Loading...
The URL can be used to link to this page
Your browser does not support the video tag.
Home
My WebLink
About
2016 Unlimited Tax General Obligation Bonds - $32,990,000 (Ord 2509 - Public Safety Plan: 1st Issuance)
2016 Unlimited Tax General Obligation Bonds Public Safety Plan: 1st Issuance $32,990,000 CITY OF TUKWILA, WASHINGTON UNLIMITED TAX GENERAL OBLIGATION BONDS, 2016 - $32,990,000 Bonds Dated: December 22, 2016 Opinion Dated: December 22, 2016 PACIFICA LAW GROUP LLP 1191 2nd Avenue, Suite 2000 Seattle, Washington 98101-3404 CITY OF TUKWILA, WASHINGTON UNLIMITED TAX GENERAL OBLIGATION BONDS, 2016 — $32,990,000 ORGANIZATIONAL DOCUMENTS 1. Certificate for Transcript 2. Certificate of the Director of Elections of King County setting forth the names and terms of office of the Mayor and City Council 3. Certificate of the Mayor setting forth the names of the City Administrator, Finance Director and City Clerk 4. Certified copy of the proceedings of the City Council last fixing the time, date and place of regular meetings of the City Council 5. Certificate of the City Clerk stating the official newspaper of the City 6. Certificate of the King County Assessor stating the assessed valuation of all of the taxable property within the City as fixed in the fall of 2015 for the purposes of 2016 taxation 7. Certificate of the Finance Director as to the outstanding indebtedness of the City, including any lease -purchase or conditional sale contracts and any general obligation debt 9. Certified copy of Ordinance No. 2509 passed on August 1, 2016 (the "Election Ordinance") 10. Certified copy of the minutes of the August 1, 2016 meeting showing adoption of the Election Ordinance 11. Affidavit of publishing a summary of the Election Ordinance 12. Order of the Director of Elections of King County regarding the election 13. Copy of affidavit of publication of all election notices 14. Copy of the ballot used at the November 8, 2016 special election 15. Certified copy of the canvass of the results of the November 8, 2016 special election 10076 00002 fm16en28g0 16. Certificate of the Director of Elections of King County regarding the number of votes cast within the City at the general election preceding the November 8, 2016 special election, the number of bond elections held within the City in the calendar year 2016, and the oaths of election officials 17. Certified copy of Ordinance No. 2514 passed on November 21, 2016 (the "Bond Ordinance") 18. Certified copy of the minutes of the meeting of the City Council (Committee of the Whole) held on November 14, 2016, showing the first reading of the Bond Ordinance 19. Certified copy of the minutes of the meeting of the City Council held on November 21, 2016, showing the passage of the Bond Ordinance 20. Affidavit of publishing a summary of the Bond Ordinance 21. Certificate of Award 22. Preliminary Official Statement dated November 22, 2016 23. Rule 15c2-12 Certification regarding Preliminary Official Statement 24. Official Statement dated November 30, 2016 25. Rating Letter 26. Copy of Blanket Issuer Letter of Representations to DTC 27. Continuing Disclosure Certificate CLOSING DOCUMENTS 28. Signature Identification Certificate 29. Certificates of Manual Signature and Certificates of Mailing 30. Certificate of Authorization of Authorized Signer on Behalf of the Fiscal Agent 31. Certificate regarding Authentication, Registration and Delivery of the Bonds 32. Official Statement Certificate 33. Certificate Regarding Bond Authorization 34. Federal Tax Certificate and exhibits 35. Financing Schedules 10076 00002 fm16en28g0 36. Internal Revenue Service Form 8038-G and Affidavit of Mailing 37. Specimen Bonds 38. Certificate Regarding Payment and Delivery 39. Receipt for Bonds 40. Closing Memorandum 41. Bond Form 101 i I MTN I I I N I ffl�� �tsl M. 10076 00002 fm16en28gO I, CHRISTY O'FLAHERTY, the City Clerk of the City of Tukwila, Washington (the "City"), do hereby certify that the within and attached documents are in each case true ant correct copies of the originals of such documents and that none of the resolutions, ordinances, proceedings, statements or certificates contained herein have been repealed, rescinded io P I P I � MEN 1111 111 1 1 � I III I WIT11-am 10076 00002 fk253d5Ogf Christy O'Flaherty, City ClerV City of Tukwila, Washington STATE OF WASHINGTON )SS. COUNTY OF KING This is to certify that 1, Julie Wise, am the Director of King County Elections, King County, Washington; and I hat the following officials serve as mayor and councilmembers for the City of Tukwila, King County, Washington, as determined from the official election records of King County, their terms of office included, as now on file in the Elections Dep,rtment. Dated at Renton, King County, Washington this 28 th day of November 2016. -1UkN1kj1�-_ Julie se, Director RNT-EL-01 00 1 919 SW Grady Way, Renton, WA 98057-2906 1 206 -296 -VOTE (8683) 1 TTY Relay: 711 1 kingcounty.gov/elections & kcelections.com El twitter.com/kcelections 0 facebook.com/kcelections 0 instapram.com/kelections M1� 10076 00002 fMI44128hl MI. 111 " "EmAll - imm, • Christy O'Flaherty, City (i City of Tukwila, Washington 1007600002fk253d5Ag , ILAtV ............. Amended by 2209 :0 •..... .............. 1908 Uty of Tukwila WasWngton AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF TU LA, WASHINGTON, SETTING COUNCIL MEETING PROCEDURES; REPEALING ORDINANCE NOS. 1311, 1345, 1421, 1770 §1, AND 1796 §3 (PART); PROVIDING FOR SEVERABILITY, AND ESTABLISHING AN EFFECTIVE DATE. WHEREAS, the City Council has decided to alter the procedures under which it operates to provide for a more efficient and orderly governmental process; and WHEREAS, several different ordinances from various years now have portions of operating procedures that could more easily be followed in one ordinance; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, DO ORDAIN AS FOLLOWS: Section 1. Chapter 2.04 of the TMC is hereby amended to read as follows: 2.04.010 Meetings Declared Open and Public All meetings of the Tukwila City Council and its committees shall be open and public, and all persons shall be permitted to attend any meeting of these bodies, except as otherwise provided in Section 2.04.140. 2.04.020 Regular Meetings The City Council shall meet regularly on the first and third Mondays of each month at 7:00 p.m., unless an alternative starting time is set and notice is provided to the public pursuant to Section 2.04.040. If at any time any Regular Meeting falls on a holiday, the Council shall meet on the next business day at the same hour. The City Council shall meet at Tukwila City Hall, unless otherwise publicly announced. 2.04.030 Committee of the Whole Meetings A. The Council shall sit as a Committee of the Whole on the second and fourth Monday of each month at 7.00 p.m., unless an alternate starting time is published; except, if at any time any committee meeting falls on a holiday, the Council shall meet on the next business day at the same hour. The City Council shall meet at Tukwila City Hall, unless otherwise publicly announced. B. Meetings of the Committee of the Whole shall be held primarily for the purpose of considering current issues of the City, coordinating the work of the City Council, and discussing draft ordinances, resolutions and policy issues in detail. The Committee of the Whole will have no power to take final actions including, but not limited to, adopting ordinances or passing motions or resolutions. C. The Committee of the Whole may meet in a retreat setting to plan their work at the beginning of the year or at any time beneficial to in-depth deliberations by the Council. Results of the Committee of the Whole's retreats will be discussed with the Mayor and administration in order to establish and understand City goals. A report summarizing the proceedings will be made available following each retreat. No official action will be taken at a retreat. 2.04.040 Special Meetings Special meetings may be called by the Mayor, or any three Councilmembers by written notice delivered by City employee(s) to each member of the Council at least 24 hours before the time specified for the proposed meeting and with public notice made pursuant to RCW 42.30.080. Council Meeting Procedures 1 2.04.050 Quorum At all meetings of the City Council, four members shall constitute a quorum for the transaction of business. A. Members of the City Council will be seated at the Council table according to seniority of the Council, except that the Council President will be seated at the right of the Mayor. B. Seniority shall be determined by the: 1. Greatest consecutive number of years served. 2. Greatest consecutive number of years plus months or years served prior to the current term(s). 3. Number of votes when elected. 2.04.070 Council President—Mayor Pro Tempore A. At the first Regular Meeting in January of each year, members of the City Council shall elect from their number a Council President who shall hold office at the pleasure of the Council. The general policy of Council is to elect presidents in a rotating order. If a vacancy occurs in the office of Council President, the City Council, at their next Regular Meeting, shall select a new Council President to serve the remainder of the year. B. In the absence of the Mayor, the Council President shall become the Mayor Pro Tempore and perform the duties of the Mayor except that the Council President shall not have the power to appoint or remove any officer or to veto any ordinance. If a vacancy occurs in the office of the Mayor, the City Council -- at their next Regular Meeting -- shall elect from their number a Mayor who shall serve until a Mayor is elected and certified at the next municipal election. 2 04.080 Presiding Officer A. All Regular and Special Meetings of the City Council shall be presided over by the Mayor or, in his/her absence, by the Mayor Pro Tempore. If neither the Mayor nor the Mayor Pro Tempore is present at a meeting, the presiding officer for that meeting shall be elected by a majority of the vote of those Councilmembers present, provided there is a quorum. B. All Committee of the Whole meetings shall be presided over by the Council President. If the Council President is temporarily absent, the Council shall elect a Councilmember to serve in that capacity until the Council President returns. C. The City Clerk or his/her designee will staff Regular and Special Council meetings and Committees of the Whole meetings. In the absence of the Clerk, Deputy Clerk or other qualified staff member appointed by the Clerk, the Mayor or Council may appoint a staff person to act in that capacity. D. The appointment of a Councilmember as Mayor Pro Tempore shall not in any way abridge his/her right to vote on matters coming before the Council at such meeting. E. The presiding officer shall preserve strict order and decorum at all meetings of the Council. The presiding officer shall state all questions coming before the Council, provide opportunity for discussion on each item on the table, and announce the decision of the Council on all subjects. Procedural decisions made by the presiding officer may be overruled by a majority vote of the Council. 2.04.090 Agenda for Regular or Special Council Meetings All items to be included on the agenda for Council consideration must be submitted to the City Clerk in full by 12:00 p.m. Noon on the Wednesday preceding each Council meeting. The City Clerk shall then prepare a proposed agenda, with attachments, according to the order of business. After the proposed agenda has been approved by the Council President or, in his/her absence, by his/her designated member of the City Council, the City Clerk shall prepare the final agenda, which shall be distributed to the Mayor, Councilmembers, City Attorney and Department Heads no later than Noon on the Friday preceding the Council Meeting. A copy of the agenda and subsequent documents shall be posted on the lobby bulletin board at City Hall. A copy of the Agenda face sheet will be posted on the City's website. Council Meeting Procedures 2 smfflcsm�� The format of a Regular or Special City Council agenda shall be as follows: A. Call to Order. B. Pledge of Allegiance. C. Roll Call. D. Special Presentations on key agenda items. E. Appointments and Proclamations of the Mayor. F. Citizens' Comments. This is an opportunity for the audience to comment on items not listed on the agenda. G. Consent Agenda. 1. Contains all consent agenda items approved by the Council President, from a Committee of the Whole, or forwarded by unanimous committee action, and routine items such as, but not limited to, approval of minutes and approval of vouchers. No ordinances, resolutions or bid awards will be included on the consent agenda. 2. The following rules shall apply to the consent agenda: a. Any member of the City Council may, by request and without a Council vote, have any items removed from the consent agenda. That item will, by automatic procedure, be placed under New Business for further discussion. b. The remaining items shall be approved by motion. H. Bid Awards. All competitive bid awards shall comply with RCW Title 39, and those that require Council approval shall include the contractor/ vendor name, the project name, and the total dollar amount of the award. The award may or may not include Washington State Sales Tax. I. Public Hearings. 1. For public hearings required by City, State or Federal law or as the Council may direct. Examples may include, but not be limited to: a. LID b. Zoning c. Budget d. Revenue sharing grants e. Annexation f. Moratoria g. Quasi-judicial decisions 2. The following procedures shall apply to public hearings, except public hearings subject to TMC Chapters 18.104 through 18.116, which shall be subject to the procedures specified therein: a. The presiding officer may exercise a change in the procedures, but said decision may be overruled by a majority vote of the City Council. b. The proponent spokesman shall speak first and be allowed 15 minutes. The Council may ask questions. c. The opponent spokesman shall be allowed 15 minutes for presentation and the Council may ask questions. d. Each side shall then be allowed 5 minutes for rebuttal. e. After the proponents and opponents have used their speaking time, Council may ask further questions of the speakers, who may respond. 3. At public hearings and for issues where a public meeting is required or requested, and a general audience is in attendance to present arguments for or against a public issue: a. A signup sheet for speakers will be available, and all citizens considering speaking will be asked to write their name and address legibly. If they speak without signing up, they will be asked to sign in after speaking. Council Meeting Procedures 3 b. A person may speak for five minutes. No one may speak for a second time until everyone wishing to speak has had an opportunity to speak. c. After the speaker has used the allotted time, Council may ask questions of the speaker and the speaker may respond, but may not engage in further debate. d. Speakers should address their comments to the City Council and should not address other audience members. No disparaging remarks or remarks directed to opponents will be allowed. e. The hearing will then be closed to public participation by the presiding officer and open for Councilmernber discussion. J. Unfinished Business. This section of the agenda shall include items of a general nature, including resolutions and ordinances previously discussed at a Council meeting. The following procedures shall apply during this section of the agenda: 1. The item will be put on the table by motion. 2. The committee chair, sponsor or a designated spokesman of each item may give a presentation. 3. If a resolution or ordinance, the City Attorney or City Administrator may read the item by title only or, if requested by any Councilmember, the document may be read in its entirety. A motion by Council shall rule. 4, The Council may then question the sponsor or designated spokesman of the presented item. 5. When discussions conclude, the Council, by motion, will act upon the resolution, ordinance or other item. K. New Business. This section of the agenda shall include all items of a general nature -- including resolutions and ordinances previously discussed at a Committee Meeting and put forward to the Regular Meeting -- and items that have been removed from the consent agenda. The procedures that apply during this section shall be the same as those under Unfinished Business. L. Reports. Reports on special interest items from the Mayor, City Council, staff, City Attorney, and intergovernmental representatives. M. Miscellaneous. N. Executive Session. O. Adjournment. 2. 04.110 Miscellaneous Agenda Procedures A. The City Council desires to provide adequate time for administration and staff analysis, fact finding and presentation. 1. Items to come before the City Council should first be placed on the agenda of the appropriate committee for discussion before they are placed on the agenda of a Regular Council Meeting. 2. All items that are not routine in nature and presented shall include a completed Council Agenda Synopsis (CAS), a staff report, and Committee Minutes. The City Clerk or a designated person shall be responsible for attaching a CAS number, keeping the original CAS, and maintaining an index for future reference. B. The agenda and provision for the Committee of the Whole shall be citizen comments, committee reports, discussion of items referred from committees, items referred by three Councilmembers, and items set by the Council President. The agenda and any attachments will be approved by the Council President or his/her designee, and shall be prepared by the City Clerk for distribution to the Council by 12:00 p.m. Noon on Friday. C. Items may be placed directly on the agenda of a Regular Meeting when the items are approved by the Council President, and: 1. The items are routine in nature, such as approval of vouchers, proclamations, acknowledgement or receipt of petitions or documents, or discussion of claims for damages. Council Meeting Procedures 4 2. An emergency condition exists that represents a personnel hazard, impending deadline, or risk of immediate financial loss. In such instances, the CAS summary or staff memo should clearly define why the special procedure is necessary. 3. In the event the sponsor of any items to come before the City Council feels it both appropriate and beneficial to the City, that sponsor may bring such items directly to the Regular Meeting with the concurrence of three Councilmembers. D. The Council President may affix an approximate time limit for each agenda item at the time of approval of the agenda. E. All proposed ordinances and resolutions shall be reviewed by the City Attorney and bear the Attorney's certification that they are in correct form before final passage. All accompanying documents shall be available before ordinances and resolutions can be passed. F. Resolutions of the City Council shall be signed by the Council President. G. A joint resolution of the City Council and the Mayor maybe proposed when: 1. The subject of the resolution is of broad City concern, and the subject contains Council policy and administrative procedure; or 2. The subject of the resolution is of a ceremonial or honorary nature. H. joint resolutions will be subject to the voting rules in TMC Chapter 2.04.130 and will be signed by the Mayor and Council President. The Council may provide for all Councilmembers to sign the joint resolution enacted under TMC Chapter 2.04.110 G. 2.04.120 Speaking Procedures A. Speaking procedure for agenda items under consideration is as follows: 1. A Councilmember desiring to speak shall address the chair and, upon recognition by the presiding officer, shall confine him/herself to the question under debate. Recognition of Councilmembers shall be by seniority. 2. Any member, while speaking, shall not be interrupted unless it is to call him or her to order. 3. No Councilmember shall speak a second time on the same motion before an opportunity has been given each Councilmember to speak on that motion. B. Addressing the Council for items under Council discussion shall proceed as follows: 1. Any person, with the permission of the presiding officer, may address the Council, but the presiding officer shall be required to recognize speakers in the following order: a. A person designated by the presiding officer to introduce the subject under discussion. b. Those whose request to be heard is contained in the written agenda. c. Those who have submitted their request to be heard in writing or to the City Clerk before the meeting. d. Those who ask recognition from the floor. 2. In addressing the Council, each person shall advance to the podium and, after recognition, give name and address, and -- unless further time is given by the presiding officer -- shall limit his/her address to five minutes. All remarks shall be made to the Council as a body and not to any individual member or to the audience. 3. No person shall be permitted to enter into any discussion from the floor without first being recognized by the presiding officer. 4. Any person making personal, impertinent or slanderous remarks while addressing the Council shall be barred from further audience participation by the presiding officer unless permission to continue is granted by a majority vote of the Council. 2.04.130 Voting A. Silence of a Councilmember during a voice vote shall be recorded as an affirmative vote except where such a Councilmember abstains because of a stated conflict Council Meeting Procedures 5 of interest. Each member present must vote on all questions before the Council and may abstain only by reason of conflict of interest. B. A roll -call vote may be requested by the presiding officer or any member of the Council. Voting normally shall be by seniority; however, this procedure may be changed by the presiding officer. C. Confirmations of appointments by the Mayor, budget transfers, personnel levels, and formal motions, resolutions, ordinances and amendments thereto shall require the affirmative votes of four Councilmembers. 2.04.140 Executive Sessions The City Council may hold an Executive Session during a Regular Meeting, Special Meeting or Committee of the Whole meeting to consider certain matters as set forth in RCW 42.30.110. 2.04.150 Continuances Any hearing being held or ordered to be held by the City Council may be continued in the manner as set forth by RCW 42.30.100. 2.04.160 Adjournment A. Any Committee of the Whole, Regular, adjourned Regular, Special or adjourned Special Meeting may be adjourned in the manner as set forth in RCW 42.30.090. B. All meetings of the Council shall adjourn no later than 11:00 p.m. If the Council desires to extend the meeting, a motion shall be required of a majority plus one vote of Councilmembers present. Items not acted on by the 11:00 p.m. deadline shall be deferred to the next respective Council meeting as unfinished business, unless Council, by a majority vote of members present, determines otherwise. 2.04.170 Questions of Parliamentary Procedure Questions of parliamentary procedure not covered by this chapter shall be governed by Robert's Rules of Order, Newly Revised (latest edition). 2.04.180 Council Committees and Representatives A. There are four standing committees of the Council consisting of three members each. The Council President shall appoint the membership of each committee and the committee chair by the second Regular Meeting of each year. The chair for each committee shall set the schedule of meetings and cause them to be published. In the event a committee member is unable to attend a meeting, that member may ask another Councilmember to attend in his/her place. B. The standing committees shall consider and may make policy and legislative recommendations to the City Council on items referred to the committee by the Council President, the Council, administrative departments, boards or commissions. If budgeted in an amount less than or equal to $25,000, a committee can approve a bid or negotiation award by an affirmative vote of three committee members. If a unanimous committee vote is not obtained, the award will be referred to the City Council for action. The standing committees, their scopes of authority, and the supporting City departments are as follow: 1. Transportation Committee, which shall consider matters related to transportation, transportation plans, traffic, transit, streets, street lighting, signals, street LIDS, and rights-of-way in coordination with the Public Works Department and Department of Community Development. 2. Utilities Committee, which shall consider matters related to water; sewer; electric power; natural gas; telephone; cable television, telecommunications; solid waste reduction, reuse and recycling, river basins; and levies in coordination with the Public Works Department. 3. Finance and Safety Committee, which shall consider matters related to the general fiscal and financial operations of the City; budget and financial reports; and policy matters related to personnel including, but not limited to, the salary grade schedule, position classifications and salary changes in coordination with the Finance Department, Administrative Services Department, and City Administrator. They will consider library issues, tourism, administrative matters, and information technology issues in conjunction Council Meeting Procedures 6 with the City Clerk, Library Advisory Board, Lodging Tax Advisory Board, Chamber of Commerce, and Information Services. They shall consider matters related to police and fire protection; the municipal court; emergency services; and animal control in coordination with the Police Department, Fire Department, Civil Service Commission, Public Works Department, and Community -Oriented Policing Board. 4. Community Affairs and Parks Committee, which shall consider matters related to the planning of the physical, economic, aesthetic, cultural and social development of the City; and Comprehensive Plan, Zoning Code, Building Code, code enforcement, Sign Code and annexation policies, in coordination with the Department of Community Development, Human Services, Planning Commission, Hearing Examiner, Sister Cities Committee, Human Services Advisory Board, and the Equity and Diversity Commission. They shall consider matters relating to parks and park plans, recreation facilities and community activities, in coordination with the Parks and Recreation Department, the Arts Commission, and Park Commission. B. The Council President may establish such ad hoc committees as may be appropriate to consider special matters that do not readily fit the standing committee structure or that require special approach or emphasis. The Council President shall appoint Council representatives to intergovernmental councils, boards and committees as needed. C. Council committees shall consider all matters referred. Each committee chair shall report to the Council the findings of the committee. Committees may refer items to the Council with no committee recommendation. D. Each committee chair may review and approve his/her committee agenda and will approve committee minutes before distribution. The committee chair can authorize the cancellation of a committee meeting. An affirmative vote of three members of Finance and Safety Committee is required when the committee approves unbudgeted items. 2.04.190 Filling Council Vacancies If a vacancy occurs in the office of Councilmember, the Council will follow the procedures outlined in RCW 35A.12.050. In order to fill the vacancy with the most qualified person available until an election is held, the Council will widely distribute and publish a notice of the vacancy, the procedure and any application form for applying. The Council will draw up an application form, which contains relevant information to answer set questions posed by the Council. The application forms will be used in conjunction with an interview of each candidate to aid the Council selection of the new Councilmember. Section 2. Repealer. Ord. Nos. 1311, 1345, 1421, 1770 §1, and 1796 §3 (part) are hereby repealed. Section 3. Severability. If any section, subsection, paragraph, sentence, clause or phrase of this ordinance or its application to any person or situation should be held to be invalid or unconstitutional for any reason by a court of competent jurisdiction, such invalidity or unconstitutionality shall not affect the validity or constitutionality of the remaining portions of this ordinance or its application to any other person or situation. Section 4. Effective Date. This ordinance or a summary thereof shall be published in the official newspaper of the City, and shall take effect and be in full force five days after passage and publication as provided by law. PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at a Regular Meeting thereof this 1 day of 2003. 'r1-TUTTrrTr' A 'PUT) ATTEST/AU ane E. Cantu, CMC, City Clerk APPROVED AS TO FORM BY: Office theAttorney ��ff Council Meeting Procedures 7 Steven M. Mullet, Mayor Filed with the City Clerk: 7// 7' h -3 Passed by the City Council: -7 /J -3 Published: 3 Effective Date: 7SJa Ordinance Number: -;?0 -iZ V SUMMARY OF ORDINANCE No. 2024 X 5 WMe AfflWAS151MY M -28M On July 21, 2003, the City Council of the City of Tukwila, Washington, adopted Ordinance No. 2024, the main points of which are summarized by its title as follows: An ordinance of the City Council of the City of Tukwila, Washington, setting council meeting procedures; repealing Ordinance Nos. 1311, 1345, 1421, 1770 §1, and 1796 §3 (part); providing for severability; and establishing an effective date. Approved by the City Council at their Regular Meeting of July 21, 2003. Jane E. Cantu, CMC City Clerk I Published: Seattle Times - July 25 2003 In Christy O'Flaherty, City Cle City of Tukwila, Washington 1007600002fk253d5Ogf Department of Assessments Accounting Division 500 Fourth Avenue, ADM -AS -0725 Seattle, WA 98104-2384 (206) 263-2381 FAX (206) 296-0106 Email: assessor.info@kingcounty.gov http://www.kingeount_y.gov/assessor/ John Wilson Assessor 11- 0 so- 0 01 a TOM 17-3 Lj re Lf= 1 11 11111� I .75-TO111071 M17 �011111MMMI PRIM IM PRII lip IN 1111111111 1, I � RMINIM, John Wilson t g o I Kin•Cunty Assess RIMMIM, NORM 110, 1111 11, 111 Flu � 11111111: 11 111111 11�11�11im � 1� ii ji�rr� I ; IIIIIIIIIIIIIII 1�! '= �� Designation LTGO Bond, 2015 LTGO Note, 2014 (Taxable) LTGO Bond, 2014 (Taxable) LTGO Refunding Bonds, 2013 LTGO Bond, 2011 LTGO Bonds, 2010B (Taxable Build America Bonds) South Correctional Entity Facility Public Development Authority Bonds, Series 2009A&B LTGO Refunding Bonds, 2008 SM M 10076 00002 fk253d5Ogf HTIM1.0 oaf •Director •1 NIPAYA I ington RILT4111 Value of Taxable Property within the City of Tukwila, Washington, as of January 30, 2016 for regular taxes and excess levies payable in 2016, per certificate of the King County Assessor (excess total excluding exempt senior citizens and timber assessed value): $ 5,357,075,444 Nonvoted Limited Indebtedness: Nonvoted Debt Ceiling per RCW 39.36.020: 1.5 0% of value of taxable property $ 80,356,132 Less: Nonvoted debt outstanding per Certificate of Finance Director ($ 27,390,177) Leases/Sale Contracts ($ 0) Total Nonvoted Debt ($ 27,390,177) Remaining Nonvoted Debt Capacity $ 52,965,955 Total Debt Ceiling for General Municipal PILrposes, Voted and Nonvoted: 2.50% value of taxable property (RCW 39.36.020) $ 133,926,886 Less: Voted Debt Outstanding per Certificate of the Finance Director ($ 0) Proposed Unlimited Tax General Obligation Bonds, 2016 ($ 32,990,000) Nonvoted debt from above ($ 27 �390,177) Total Debt ($ 60,380,177) Remaining Debt Capacity Unused: $ 73,5�46709 Based upon the certificate of assessed valuation of the King County Assessor and the certificate of general obligation debt outstanding as of December 22, 2016 of the City of Tukwila, Washington (the "City"), the issuance of the Unlimited Tax General Obligation Bonds, 2016 by the City, will be within the constitutional and • limits for nonvoted, voted and total indebtedness. t an 10076 00002 N25M509f I, CHRISTY O'FLAHERTY, City Clerk of the City of Tukwila, Washington (the "City"), do hereby certify: I . That the attached Ordinance No. 2509 (the "Ordinance") is a true and correct copy of an ordinance of the City Council, as adopted at a regular meeting of the City Council held on August 1, 2016, and duly recorded in my office, and that such Ordinance has not been amended or superseded. 2. That the meeting was duly convened and held in all respects in accordance witill law, and to the extent required by law, due and proper notice of the meeting was given; that legal quorum was present throughout the meeting and a legally sufficient number of members the City Council voted in the proper manner for the adoption of the Ordinance; that all oth -requirements and proceedings incident to the proper adoption of the Ordinance have been dul fulfilled, carried out and otherwise observed; and that I am authorized to execute this certificatel Christy O'Flaherty, City Cled City of Tukwila, Washington 10076 00002 fk253d5Ogf Cl*ty of Tulliwi*la Washington Ordinance No. —,�L 6 0 ? • • •A I• ! • � '' `., . • • � ! ', 111, +• l NOW, •'E, THE CITY COUNCIL OF OF SectionWASHINGTON, HEREBY ORDAINS AS FOLLOWS: • • and Determinations.The City Councilof the City of Washington findings and determinations: A. The City Council of the City has determined that it is in the best interest of the City 1. implementPublic Safety Plan, which includes• • three deficient fire stations that have met their useful life, guaranteeing that the Tukwila Fire Department has the funding for critical items such as fire trucks and other life/safety equipment as necessary, and constructing a justice center to hold the Tukwila Police Department • Municipal Court,to ensure the continuityand improvement availableservices (collectively, the "Project"), and the City does not currently have sufficient funds for that purpose. B. The City Councilto seek voterR1 • • f the issuance and sale of general •• • • bonds of . principal amount notR exceed $77,385,000 to pay . portion of • of - Project • the costs of of bonds, to be R. • by excess • ••• - - • • W: Word Processing\Ordinances\Public safety bond for Nov 2016 ballot 7-27-16 vc:bjs Page 1 of 6 C. The constitution and laws of the State of Washington provide that the question of whether or not the City may issue the Bonds and levy excess property taxes be submitted to the qualified electors of the City for their ratification or rejection at a special j5lection. 6117 a TOT M M 9 117 n -I U �=*- � W: Word ProcessingkOrdinances\Public safety bond for Nov 2016 ballot 7-27-16 VC:bjs Page 2 of 6 i "or, or if it has become impractical to accomplish the Project or any portion of th Project, the City may use the proceeds of the Bonds and other available money f paying the costs of that portion of the Project deemed by the City Council to be mo necessary and in the best interest of the City. A. If the ballot proposition submitted by this ordinance is approved by the qualified voters of Tukwila, a Financial Oversight Committee shall be appointed by the City Council within six months following approval. The Financial Oversight Committee shall consist of a minimum of five members comprising two residents, two members from the business community, and one individual from a non-profit organization located in the City. The Aerm of appointment for each member of the Financial Oversight Committee shall be two years. However, in order to have staggered terms, one resident and one business member of the Financial Oversight Committee will initially be appointed for three years and thereafter all terms of appointment will be for two years. The Financial Oversight Committee shall continue in existence for the economic life of the Project. B. The Financial Oversight Committee shall review the allocation of bond proceeds and progress on achieving the purposes of this proposition, and shall report at least semi-annually to the City Council on the same. The annual report shall be filed in paper and electronic form with the City Clerk. The Financial Oversight Committee may elect officers and establish rules of procedure. Financial Oversight Committee members shall serve without compensation and may be removed by the City Council following absence without cause from two or more meetings. The City Council may prescribe by ordinance or resolution such other rules relating to the appointment process and the operation of the Financial Oversight Committee as shall be necessary or appropriate. ,�T-ntmmjwrl I MM a grnm A. The City Council requests that the Elections Director of King County, Washington (the "Director'), call and conduct a special election in the City, in the manner provided by law, to be held therein in conjunction with the statewide general I W principal of and interest on the Bonds when due. The proceeds of the Bonds shall be used for capital purposes only, which shall not include the replacement of equipment. W: Word Processing\0rdinancesTublic safety bond for Nov 2016 ballot 7-27-16 VC:bjs Page 3 of 6 I �09. I; �*$ ir-ALCOPIRWill ropen o 0,7 eXcess pow due. M-UT91irm.-no 115411" # # 0 9 A. The City Clerk (or his or her designee) is authorized and directed to certify, later than 4:30 p.m. on August 2, 2016, to the Director, a copy of this ordinance and t proposition to be submitted at that election in the form of ballot title prepared by the Ci Attorney pursuant to RCW 29A.36.071, as follows: I all 1.14 [WIVI aQ Wd 7,10]ZW The Tukwila City Council passed Ordinance No. concerning financing its Public Safety Plan. If approved, this proposition would replace three fire stations, fund life/safety equipment for the Tukwila Fire Department, construct a police/court justice center and establish a # - M -M r2m NO................... F1 B. For purposes of receiving notice of any matters related to the ballot title, as provided in RCW 29A.36.080, the City Council hereby designates its bond counsel, Foster Pepper PLLC (Marc Greenough, 206-447-7888, marc.greenough@foster.com), as the individual to whom such notice shall be provided. Section 8. General Authorization. The proper City officials are authorized to perform such duties as are necessary or required by law to the end that the question of whether or not the Bonds shall be issued, as provided in this ordinance, shall be submitted to the voters of the City at the November 8, 2016 special election held in conjunction with the statewide general election. Section 9. Intent to Reimburse. The City Council declares that to the extent the City makes capital expenditures for the Project prior to the date the Bonds or other short-term obligations are issued to finance the Project, from funds that are not (and are not reasonably expected to be) reserved, allocated on a long-term basis or otherwise set aside by the City under its existing and reasonably foreseeable budgetary and W: Word Processing\Ordinances\Public safety bond for Nov 2016 ballot 7-27-16 VC:bjs Page 4 of 6 6 4 IMM 0 so -0 0 0 0 M Is 0 9 0 - 0 L-VA I 1411A am LOB V Lyle Is I a IZIN 0 W W V V W I•WAI i IAI 9 FZI lip I& P73 0 0 a jm�1114 way arrect t e vaAa or resolution or of the Bonds. Section 13. Effective Date. This ordinance or a summary thereof shall be published in the official newspaper of the City, and shall take effect and be in full force five days after passage and publication as provided by law. Section 14. Ratification of Prior Acts. Any action taken consistent with the authority of this ordinance, after its passage but prior to the effective date, is ratified, approved and confirmed. W: Word Processing\OrdinanceskPublic safety bond for Nov 2016 ballot 7-27-16 VC:bis Page 5 of 6 11 0-YA 1 0 1 OF I FTIYMUM�7.1 11WOM USMA 11:11 M,94,1 " ' i 1 W -0E. To�x - a F-111100 1�0� 1�09 M VAI Filed with th- ' -• PasseV ♦ *yAcil: PublisWed: W: Word Processing\Ordinances\Public safety bond for Nov 2016 ballot 7-27-16 VC:bjs Page 6 of 6 lill 11 11 11; 11111111 » ?_«< +1111111 «»? WX« 1 0 © ? t « » f l ©k i ?§» v? «<» #? » 0 # », 0l§ mallgol"giliggo » 2 =«2w m- y 2 2 # » d» » <§ »: © w<=§<±. < d + r. 0§#2» #r¥2»22±2?f0;±2#f #2±2?\#?2\?d?#?32y � � � � � � 2§« 2 » f 42�»�2,< 2 ■ f °d}t d�:2�4 2 2 # ?� � ?a» ? f ? « ? m+».<»»«:¥;: :d#2?#t22#2?#\22■2 »<.»<��»?; m«+„ ��#2 «» 2#??d#?f! 2t:� ■?««f «f42d�#2 #?w w «��ff$??$?f�©� ©ff■f2�■2«?2#??■?«� «yt�\ »+« e »f ■f?»©©»»< :?*#? d+»?� �2#?f©° <** d#f?«.«w: <.»,v ?#fd� :c»»»:«f■?�■�»}?*f ~°©f±#§� ©f2■ ???±#222 y ■ 2 &§«x: »»» f«» ?«± 2*= d «© +»0 certify that the attached is a full, true and correct copy of the minutes of the August 1, 2016 =171111111111 1101111211 Christy O'Flaherty, City CTe—rk--- City of Tukwila, Washington 1007600802fk253d5Og Tukwiia City Council 'Regular Meeting City Hall Council Chambers August 1, 2016 — 7:00 P.m. Start: 6:30 p.m. Mayor Ekberg announced the purpose of the Executive Session is to discuss: Potential Property Sale — Pursuant to RCW 42.30.110(1)(c) It will last no more than 30 minutes, and no decisions will be made during the Executive Session. Attendees: Allan Ekberg, Mayor; David Cline, City Administrator; Rachel Turpin, City Attorney; Derek Speck, Economic Development Administrator; Councilmembers Duffie, Robertson, Seal, Hougardy, Quinn, Kruller and McLeod. End: 6:53 p.m. CALL TO ORDS PLEDGE OF ALLEGIANCE/ROLL CALL Mayor Ekberg called the Regular Meeting of the Tukwila City Council to order at 7:00 p.m. and led the audience in the Pledge of Allegiance. ROLL CALL Christy O'Flaherty, City Clerk, called the roll of the Council. Present were Councilmembers Dennis Robertson, Verna Seal, Joe Duffie, Kathy Hougardy, De'Sean Quinn, Kate Kruller, Thomas McLeod. CITY OFFICIALS Allan Ekberg, Mayor; David Cline, City Administrator; Rachel Turpin, City Attorney; Mike Villa, Police Chief; Bruce Linton, Deputy Police Chief; Chris Flores, Interim Fire Chief; Marty Grisham, Emergency Manager; Bob Giberson, Public Works Director- Peggy McCarthy, Finance Director; Vicky Carlsen, Deputy Finance Director; Derek Speck, Economic Development Administrator; Rachel Bianchi, Communications Manager; Laurel Humphrey, Council Analyst; Christy O'Flaherty, City Clerk. AGENDA AMENDMENT MOVED BY HOUGARDY, SECONDED BY KRULLER TOA END THE AGENDA TO MOVE ITEM 7A UNDER NEW BUSINESS - A RESOLUTION DECLARING ANE EECY - TO THE CONSENT AGENDA. (This item was inadvertently left off the Consent Agenda.) MOTION CARRIED 7-0. SPECIAL PRESENTATIONS Recognition of National Night Out Against Crime poster winners. Wendy Butterworth, Police Records Specialist Wendy Butterworth, Police Records Specialist, represents the Police Department's Community Relations Committee. This committee was formed 5 years ago to promote positive police related interactions with the community. The theme for the poster contest this year was "Help crime and drugs go away." Chris Partman, Community Policing Coordinator, provided an overview of the prizes that were donated for this event. Winners received a basket of candy and toys and a $30 gift certificate from the Family Fun Tukwila City Council Regular Meeting Minutes August 1, 2016 Center; a $40 gift card from Target; and a $25 gift card to the Southcenter Mall from the Tukwila Police Guild. accomplishment. Alexander Vicuna Grand Prize from Cascade View Elementary School, to include pizza party. Cesar ••' Tukwila Elementary Prize Winner Bonds Le Cascade View Elementary Winner Jazelle Bagadiong Thorndyke Elementary Winner The winning posters were displayed to the Council and Mayor and the audience members. The Councilmembers expressed appreciation to the poster participants for their great work. PROCLAMATIONS a. A proclamation declaring August 2, 2016, as "National Night Out Against Crime" in Tukwila. Mayor Ekberg read a proclamation declaring August 2, 2016 as National Night Out in Tukwila, encouraging all citizens to join the Tukwila Police Department and the National Association of Town Watch in supporting this event. Mayor Ekberg presented Chris Partman, Community Policing Coordinator, with the proclamation. b. Confirm the appointment of Jay Wittwer to the position of Fire Chief. David Cline, City Administrator, provided a summary of Jay Wittwer's credentials to the City Council. Mr. Wittwer could not be here this evening and will be in attendance at the August 8, 2016 Council meeting. Mr. Wittwer has a Bachelor's Degree in Fire Science and a Master's Degree in Public Administration and has completed 12 courses at the National Fire Academy including the Executive Fire Officer Program in 2015. He is also accredited as a Chief Fire Officer with the Center for Public Safety. He comes to Tukwila from the North Las Vegas Fire Department, where he has served for 29 years, beginning as a firefighter and rising through the ranks to Battalion Chief. He serves on the Board for the Nevada Fire Chiefs Association and has been a Lead Instructor at the Firefighter Academy. MOVED BY ROBERTSON, SECONDED BY DUFFIE TO CONFIRM THE APPOINTMENT OF JAY WITT WER TO THE POSITION OF FIRE CHIEF.* Councilmember Kruller commended City administration for the hiring process that involved the Council. Councilmember McLeod said he has met Mr. Wittwer and is pleased with this addition to the City's staff. *MOTION CARRIED 7-0. CITIZEN COMMENTS Tukwila City Council Regular Meeting Minutes August 1, 2016 Page 101 UQ II Ig I ATA i r. R IN Ili I ling UNFINISHED BUSINESS a. An ordinance to place a public safety bond on the November 8, 2016 General Election ballot to fund the replacement of three seismically -unsound fire stations, guarantee funding for fire equipment and apparatus for the life of the bond, and construct a new Justice Center to house the Tukwila Police Department and Municipal Court. The City is considering a Public Safety Plan to fully fund police, fire and other first responders by investing in safe, modern facilities and providing essential life safety equipment. This would include a bond measure on the November 8, 2016 ballot that would fund the replacement of Fire Stations 51, 52 and 54, build a Justice Center to house Police and the Court, and fully fund apparatus and equipment for the next 20 years. Tukwila City Council • ffieeting4finutes August 1, 2016„•.. of Bruce Linton, Deputy Police Chief, and Rachel Bianchi, Communications Manager, utilized a Powerpoint presentation to summarize this issue. How got here: Two efforts converged; Public Safety prioritized • Identifying how to fully fund fire services in Tukwila has'beenongoing - o - 2010, and included two lengthy processes investigating whether joining the Kent Regional Fire Authority was the best option. direction of Runcil in 2012, the City has also engaged in a comprehensive review of City facilities, which included fire facilities, resulting in the City of Tukwila Facilities Plan for Essential Government • Public Safety was the top priority identified and, at the direction of the City Council, the Public Safety Plan was developed in 2016 to address both fire and the broader public safety facilities deficiencies identified by the Facilities Committee. Details Funds,20-year voter -approved Public Safety bond to pay for: Replacing three seismically -deficient fire stations Guaranteed funding for fire equipment and apparatus for the life of the bond New Justice Center to house Tukwila's Police Department and Municipal Court Consolidated Public Works shops facility to be paid for with an equal mix of General Fund and Utility existing rate structure Steps:Next Public Safety Bond — Council must act by August 1, 2016 to make the November 8, 2016 ballot; must also decide pro/con committee makeup Public Works — 2017/2018 Budget process Bond Oversight Committee scope and representation to be finalized by the Council this summer MOVED BY SEAL, SECONDED BY DUFFIE THAT THE PROPOSED ORDINANCE BE READ BY TITLE ONLY. • • .. • • • � , 11.1 .. ; . Councilmember Seal referenced page 59 of the agenda packet as it relates to changes in the "Financial Oversight Committee” section of the ordinance. These changes reflect the discussion at the last Council meeting. • -• • •- • • •_ • -• !11111041 - • -- Rachel Turpin, City Attorney, said that while that appears to be the only basis for removal in the ordinance, it is possible for the Council to develop procedural rules as part of the process at a later date. Tukwila City Council Regular Meeting Minutes August 1, 2016 Page 5 of 1-F Councilmember Hougardy suggested that there be consistency in the ordinance in that the word "financial" appear in front of the words "oversight committee" throughout the ordinance. ADD THE WORD "FINANCIAL" IN ALL INSTANCES IN FRONT OF THE WORDS "OVERSIGHT COMMITTEE." MOTION CARRIED 7-0 TO AMEND THE PROPOSED ORDINANCE. Councilmember Quinn inquired regarding rules that reference that the Council cannot forego their fiduciary responsibility in establishing a Financial Oversight Committee. Ms. Turpin confirmed that the Financial Oversight Committee will report to the Council, and it will not diminish the Council's fiduciary responsibility. Councilmember Robertson expressed concern that years from now, it may be reasonable to disband the Financial Oversight Committee as there will no longer be a need for it. Ms. Turpin said the Council could adopt an ordinance to amend the existing ordinance to disband the committee. *MOTION CARRIED 7-0, TO ADOPT ORDINANCE NUMBER 2509, AS AMENDED. b. Authorize the approval of Pro/Con Committees to place a public safety bond on the November guarantee funding for fire equipment and apparatus for the life of the bond, and construct a new Justice Center to house the Tukwila Police Department and Municipal Court. Ms. Bianchi provided an overview of this topic. King County Elections requires that jurisdictions putting local measures on the ballot must identify the names of individuals to be on the Pro and Con committees associated with a ballot measure. The City can only submit three names for each committee, although an unlimited number can assist the committees in preparing the statements. The City advertised that interested persons should submit their names to the City, and that the Council would make the final Interested parties for the committees are as follows: Pro Committee: • Kathleen Wilson Con Committee: =Mark Cohen ° Charles Tyson Coumci|nmennberHmugardyrecused herself from the discussion, asher husband iaacandidate for the Pro Committee. Counci|memberQuinn suggested that the Pro Committee becomprised ofKatrina Dohn.Jim Haggertnn. and Kathleen Wilson. All of these individuals are very qualified, and the City is fortunate to have these 4 names before us, Council President Duffie concurred with Councilmember Quinn and expressed the highest regard for Ed Hnugmrdyand his good work inthe City. Mr. DufOeconveyed that itwould bebest tohave the Pro Committee members not berelated toCounoi|membem. Healso feels that Mr. Hougardy issocommitted hzTukwila that hewould understand and accept this decision gracefully. Tukwila City Council Regular Meeting Minutes August 1, 2016 Page .. 14 Councilmember Seal agreed with the previous comments and relayed that while only 3 names can be submitted per King County's rules, others could participate with the Pro or Con Committee toward their work on this issue. Councilmember Kruller emphasized that being related to a Councilmember does not de -value a prospective member of a committee. In this instance, it would just be best to not have members related to Councilmembers. Councilmember McLeod supports Mr. Quinn's comments and stressed that an unlimited number of people can provide assistance toward the work of the Pro or Con Committees. Ed Hougardy's voice is valued in this community, and his voice is his own and does not come from this dais. Councilmember Robertson echoed the comments made by Councilmember McLeod. MOVED BY SEAL, SECONDED BY KRULLER TO AUTHORIZE THE APPROVAL OF PROXON COMMITTEES TO PLACE A PUBLIC SAFETY BOND ON THE NOVEMBER 8, 2016 GENERAL ELECTION BALLOT TO FUND THE REPLACEMENT OF THREE SEISMICALLY -UNSOUND FIRE STATIONS, GUARANTEE FUNDING FOR FIRE EQUIPMENT AND APPARATUS FOR THE LIFE OF THE BOND, AND CONSTRUCT A NEW JUSTICE CENTER TO HOUSE THE TUKWILA POLICE COW2T. Committees are as follows: Pro Committee: • Katrina Dohn • Jim Haggerton • Kathleen Wilson Con Committee: • Mark Cohen • Charles Tysor. NEW BUSINESS Z=. 117-3111 a M-7 M W Derek Speck, Economic Development Administrator, utilized a Powerpoint presentation to provide an overview on this topic. Council is being asked to authorize approval to enter into an agreement to sell two parcels of the Tukwila Village land to Tukwila Village Development Associates, LLC (TVDA). The deal terms carry out the intent outlined in the Disposition and Development Agreement (DDA) approved by the Council on October 12, 2012, with the following key provisions: Araf- Lot Consolidation L16-031 (Exhibit C). These lots comprise 116,173 square feet, or about 2.67 acres. This is approximately 43% of the Tukwila Village site (including the library parcel). Price: The final price will be set based on a financial model called a residual land value analysis (RLV). The RLV will take into account the project's costs (including pre -development, construction, financing, and fees), revenues, and a market capitalization rate to calculate how much the project can afford to pay for the land. That result becomes the price for the land. If the calculated land price is below a minimum, then the City does not have to sell the land. The minimum price is based on a formula of $10,000 per housing unit plus an equivalency for commercial space. TVDA estimates the minimum price for the two parcels being sold at this time will be $2,230,000 and the remaining phases will be $2,220,000, for a total of $4,450,000. Please note that the $4.45 million relates only to the property being sold to TVDA and does not include the land sale revenue from other property purchased as part of the Tukwila Village project (the library parcel, house at 14239 4211d Avenue South, and the former Newporter motel Tukwila City Council Regular Meeting Minutes August 1, 2016 Page 7 of 10 41 Ai 11 ere are two signiTicant crianges in I "T'N"A's current oeveio;Fnerit �,ian as cortiparea to ineir piani over ine past few years. First, TVDA's phasing plan in 2013 assumed that Building A would be in the first phase while Buildings D and E would be in the second phase. Now, that is reversed with Buildings D and E in the first phase and Building A in the second phase (see Exhibit A.). Second, in 2012 TVDA intended on Building A incl uding 80 apartments for rent to households -of any age. TVDA ran into some challenges when trying to arrange financing for that type of project and now plans to develop the 80 apartments as senior housing. This type of senior housing would still allow up to 15% of the units to be rented to households of any age. TVDA has also agreed to develop Building B as the type of senior housing that would allow up to 20% of units to be rented to households of any age. Between the two buildings, up to 41 apartments would still be rentable with no age restriction. If Council authorizes the Mayor to execute a Purchase and Sale Agreement (P&S) the next steps are: (1) City and TVDA complete and sign the P&S (by 8/12/16) (2) Developer submits application to Washington State Housing Finance Commission for financing approval (by 8/15/16) (3) City and Developer complete conditions precedent. This includes City Council approval of the plaza and commons lease and the term sheet for the Police Resource Center. (4) Close escrow (estimated for October 2016). August 1, 2016 Page 8 of 10 The Councilmembers asked clarifying questions of Mr. Speck and is Park, the developer of the project and exchanged comments as follows: Concern regarding a lesser number of units for people of all ages; The need to perform an analysis to review the numbers; Emphasis on when Phases 2 and 3 of the project will occur; The importance of having cleanup on the site to facilitate safety and aesthetics in the area. -N i nis iremirn,, ue on a Tor f -neeting • follow that same •::. WA� roffiPT.M. Boom Man= Councilmember Robertson went on a Police ride-a.long this past Saturday evening. He had 3 observations. The first is that while there is a national problem with violence and oolice, in Tukwila, violent crime has dropped. Secondly, the officers spend a great deal of time talking and listening to both victims and perpetrators while waiting for rnedical services to arrive on scene. While the officers often receive verbal abuse, they demonstrate patience, sincerity, and concern. Thirdly, at least one of the calls involved abandoned property. This particular property has been abandoned for 2-3 years and was dark, smelly and full of trash. There is a danger involved for both officers and the surrounding residents due to 2bandoned homes. He would like to see this issue discussed at the Community Affairs and Parks Committee to pursue solutions. She thanked the Council President and Council Analyst for their work on the recent Mid -Year Retreat. Ms. Seal reported that the escalator at the Light Rail Station has been.broken for about a month. Additionally, there is a great deal of garbage and graffiti that did not exist in the past. It is great to see, more security, however, the escalator is essential for many people to get around successfully. Ms. Se referenced the portion of the City Administrator Report regarding "Be a Part of the Art!" event ' on Augull 20, 2016 from 11:00 a.m.-3-.00 p.m. and August 21, 2016 from NOON -4:00 p.m. , at the plaza outside t new Tukwila Library site. Participants will be able to create art to be displayed on site by way of a personalized flag. Tukwila City Council Regular Meeting Minutes August 1.2OY6 Page 9o//0 a great way b)build bridges with kids inthe community. She expressed appreciation for the comments made about her husband this evening. Councilmember Quinn attended the Cascade View Safe Routes to School event. Me has heard from residents who want to park on right-of-way strips. On July 28, he attended the 2nd Joint Legislative Task Force on Community Policing. He thanked Chief Villa for being present. Next week he has a meeting at the Governor's Mansion for further discussion on Community Policing. Mr. Quinn also attended the See You in the Park and Touch a Truck events. He is pleased to be involved with the Action Tukwila group. Councilmember Kruller attended the Regional Law, Justice and Safety Commission meeting and will email out the legislative updates. A focus was on dash and body cam videos and the need for adequate redaction techniques. She thanked the Council President for the Mid -Year Retreat and offered the reminder that the Blue Angels are back in the area. She wished her parents a happy 60th anniversary. Councilmember McLeod attended the AWC Municipal Budgeting and Financial Management Workshop. He was pleased to receive information regarding Enterprise Funds, types of budgets, 0 -based budgeting and financial policies. David Cline, City Administrator, referenced the City Administrator (CA) Report in the packet and offered to answer any questions. d. CityAff#rney There was noreport. e. Intergovernmental There was noreport. EXECUTIVE SESSION - Collective Bargaining — Pursuant toRCVV42.3O.i4O(4)(a)-60minutes Mayor Ekberg announced that the Council will go into Executive Session to discuss Collective Bargaining — Pursuant toRCVV42.3O.14O(4)(a). |twill last nomore than 80minutes, and nodecisions will bemade during the Executive Session. Noaction will berequired inthe Open Meeting after the Executive Session has concluded. 9:00 p.m. Mayor Ekberg called a brief recess to allow the audience to exit the Council Chambers. Executive Session Start: 9:12 p.m. Attendees: Allan Ekberg, Cline,City Administrator; Stephanie Brown, Human Resources Director; Cabot Dow, City Negotiator; Counci|mmmbersDuffie.Robertson, Seal, Hougordy.Quinn, Kr Uer and McLeod. Executive Session End: 10:12 p.m. NlIM41US CONSENSUS EXISTED TO ADJOURN THE REGULAR MEETING. Vol @An ble*rg, IMayor Christy O'Flaherf-y, City Clerk all- Tukwila City Council Regular Meeting Minutes '1� , 'I T T?UI; 177"M"M MIA' Dana Ahnberg 6200 Soufficenter BlvId Re: Advertiser Account # 1075 10 Agency Account #: 0 ,M#11 loll V-4molumill! 11v2% ,L -,Jmj= ff!�� representative of The Seattle Times Company, publisher of The Seattle Times of general circulation published daily in King and Snohomish Counties, State of Washington. The Seattle Times has been approved as a -.45*14 Snohomish Counties. AgefltA&ft6,I'A) Signature rh tOIX r, "pIc lot, 0 z I/ IZ- .,?,, '7 e on JA wo o Subscn rn to before m -0 5 0 T D hastina C thriStin us otary Public in and for th): State Wa hin si f gton, residing at Seattle C-) V,e: Advertiser Account # 1075 10 Ad #: 666504 Agency Account #: 0 Agency Name: CITY OF TUKWILA AD TEXT PUBLIC NOTICE OF ORDINANCE ADOPTION FOR ORDINANCE 2509. On August 1, 2016 the City Council of the City of Tukwila, Washington, adopted the following ordinance, the main Points of which are summarized by title as follows: The full text of this ordinance will be pro- vided upon request. Christy O'Flaherty, MMC, City Clerk Published Seattle Times; August 4, 2016 King County Dept of Election Finance • • SW Grady STATE OF WASHINGTON • 1 +I #i t1 1 The undersigned, on •. authorized representativeof • .. publisher ofThe Seattle Timesof general• published daily in King and Snohomish Counties, State of Washington. The Seattle Times has been approved as a Snohomish The notice, in the exact form annexed, was published in the regular and entire issue of said paper or papers and distrib- uted to its subscribers during all of the said period. s '® r•~IS r 17" i c CritGerald PatrlarcaS1gnature �'• �,ubscribed and -sworn to before me on SEP 2 8 21 DATE • . i 1 F- •�' 1 1 r = O LU ® Q1 LLJ W W � r O r r i C O N E I� 9✓ Wa3 a Z C CL Q 'C U Q U) 0 CD W r P 00 K r L �C C (D Z CLC C ® �- 3 Q c 65 U 'T.3 e13 • ate', WEDNESDAY, SEPTEMBER 28,2016 I OeStOkOtOS INeies All Keith cott threatened family with gun, court papers show `+"9 order, either, Weemehe]red coidingook,aaount,W. cane violent. promaiveouh,' berrRakeyia mhstheasclOdayslater. Sconakedtheourtrodis- Shedidnotexplainwhy. To register to vote In Washington, you must be: acour[ filing said. ButbyOct. "MyhusbandWfliScott assaulted meevml dome DONATEYOUR CAR ? k` nodcewiththecourtand askedroenciBherase. bthebriek almotimaccmrgmylunes, bealimimeearandbusaf Wheels For Wishes 1-� ....dray( ily,"she mybody:'she wrote. ,� a '3 week, Ba mberg said Aakeyia Onthecompiaha she checked a box indc Heather Make -A` Ifil - x; a g f a aeeroYsedoshes Alaska and .snnwom noonaa•uaim snaka•suadma swan hedidnoebali—fichada Firearm since Ns mm home diare rvrytome y •� as �a Nt naEWashington '. calstay. KeithScomwasimhedin ' motorcycle asci dentin November,one thaarem• AJudgehn Mecklenburg month sa > `: water Manysystems canhe ` "` • s r him. He home him. Hthe e suffered Counryquidayissueda -oro ua Call: 12061819.4479 '„- ms„ ,n dn."xv"raw•w. Members ofXeith Scotts familyspeak with their lawyers in =':." last weekwln a protective order against Scott In 2015, his wife said he owned a firearm NORTH CAROLINA Wife had sought protective order over domestic violence eytucm ewasser ThdAL MmErER e NewYarkaanv CHARLOM N.C.— Nearly a year before Keith lamontgottwasshotto deadibythepoliceinan ephudedrathateetwulsed this dry, his wife applied far apeareedworderageinst him that said he owned a gun ndhast—stur,d tokill family members with it. Thedoament-,Rlcdby his wife, Aakeyia Scott, in Oaober in Dist da Cam a in Gaston Couraywhidh i[ near Charlotte. In a headwflum complaint, Aakeyia Son "seemed dui Ketch Som had hit my 8 -year -oil in the head a to,ai of three trues with his fisc and "kicked me and threaten ro kill ms with his gun." Aakeyia Sconadded,"He saidheis ialfee'andwe shotddknowthae." AftertheSept.20po®ce shooting ofKeithswtS the authoddessaidrheyli veeedagor aide scene Pamily members said M did nahaveagunwf[h Nm .W.WwasMt. Jusd'Bamberg, a lawyer f.r,he Scomfamily,seid Rakeyia Som inwhidh she can be heard erring officers he does nothave agues None Ithevideosdcfinidvely showwbetterWhadagun, and if so exactly where the gunwaswhunthepthes onlronmd him. "Regardlessafwh.,decade come-utabouthispas% about wMthe mayormay nothavedoneinthepsh ..thing changes th,lineage weYe seen,"Bamberg said. "And again, at the moment he's shot acrd m71ed, he's ... aggrossive. His hands are by hiss ides, we can't te0 wha t f f anything he has in his hands, andwhen he's shot and killed he's acnmliy-dk. Ing Wekwa tL" Police Department officials said inamemincnethata handgun and an ankle hol- sterhadbeeri—reaa dweceneafte,Scomwas shot. In Garton Co.." 2015, ling in the 1990; Keith Scott was chareed with a number a roe KeidhSconwithibra `+"9 order, either, Weemehe]red ^# moved from Noah Carolina, To register to vote In Washington, you must be: acour[ filing said. ButbyOct. .t ; 16,1eakeyi.Scomfiledanew ? k` nodcewiththecourtand askedroenciBherase. "`• "Heisnolongeeathrea[to ppeamrce,whenaDistrfct ....dray( ily,"she shreaetopublic,afesy. The Charlotte-Mecklen- wrote. In a separom interview lase .Not under the authority of the Departmentof ty' week, Ba mberg said Aakeyia condudedthat Keith Scott Somhadbeemm,awamire' - hhubandownedafuxrm. How to register On Tuesday, Bamberg said .snnwom noonaa•uaim snaka•suadma swan hedidnoebali—fichada Firearm since Ns mm home .m,marndkaranneu•smut.rsrasmt •ceamrsn,aea•e�tao,ss m,hunaryhomalonghospi- m rcnsaae, wa naw�netwreawrsa,oao,aoena Proiau. wa neve hnaazremrca redo rowpn done calstay. KeithScomwasimhedin ' motorcycle asci dentin November,one FLAT ROOFING IB rating systems are uniquely t -- �, toWtrWand Wrao month sa > `: water Manysystems canhe ` "` • s r him. He home him. Hthe e suffered Inde ed s tWilu06 cbraindhoma maumatcbeain injury, Bam- limwa messy �d�i�eW-cote Will said, and upon retum- n�w.-kandmk m THERE'S Q REASON TO WAIT FOR •d"Shetuakcamof ilm THE NEW ROOF YOU NEED NOWI I tendlyall rhelime, andas fara,,Wk,Wdidm new aeguna guns ofJanuary," $0 0 V% Bamberg Ba maid. Rakeyia Scott also brought ad PlaintinAra204inM Nr P lenburgCounty, which m. FORUMOUM PMUMANMS dschadinaCourtrc- cardsshawthatshe asked, ,eeseaINs.QarmRW u�wr.oxywwsmeemmrymmrcwm,a v .m-.. roabvaws•toer�e.w+a��w��awa.ue+�.mannina�sn judge m issue a protective orderafrerKeith Scott, ae- rThepolimssytharthey _ Ganoncountyrecords Requirements oa cedhimbectim, moordneadeputysheri0 To register to vote In Washington, you must be: office,, sewhimwidhagun was unable ca" . A dthm of the United States; and what they believed was a ijuanacigarette, and that with the 0crober2015pro- tectiveorderbefneacuun ' A legal resident of Washington State; theybeliewd heposeda ppeamrce,whenaDistrfct • At least 18 years old by Election Day;and shreaetopublic,afesy. The Charlotte-Mecklen- CCoanjudgeexmndeditby a week Thejudge, who .Not under the authority of the Departmentof ty' burg PolieeDepanment condudedthat Keith Scott Corrections. mleaseddashboard-and had'Smmmittedanaofdo- How to register body-omemvidosofthe episadethatdonotshow, mesdc- ot,"ordered himrokeepawayfrom Register online with the Secretary of State, Keith Scott acting aggressive- Rakeyi. ti medforbide wwsv.vom.wa.gov. lyin,hemom errs6eforean offiar8resfourshots.7be him—kitanyachola wheretheirchifdrenemra . Downloadaregistraelon form from the King add registrationfor onfranmdonwaaalsoeap- enrolled. Court return iib County y mredonavideoreordedby Officials were unable to mail. • Register in person at the King County Elections office or Voter Registration Annex. Man rescued at sea was suspect in olve kifflng of grandfather eYYAvsod oenrseuvote ]ru mrdPrua BOSTON—Amanwho says he spent week at sea in a life mh before being res- cued cold the Coast Gua rd he frantically looked for his mother atheief hingMa sank in the Atlantic Ocean, aaording man mull...M- IngreleasedTuesday.His motherhasn'tbesni und. Thereordingcare pmsa phonecaB 'Coast Guard officerhadwith Nathan Carman, ofvemoa, vc, after W was rexoed off the coos t f Massachuseeu on Sunday by a passing freight, r. O"Weal,Carman,22, desenlxs hea ring a "funny noise" in his boat's engine osnpanmem, maing—a, pouring In and losing sight of his —the,, tondo Comm., 54,ofmiddlemwn,Conn Sheispremmeddead. NadmnCarman,whowas a suspect in his wealthy grandfather's umohed kill- ing, told the Coast Guard his 31 -foot aluminum fi shing Mae sank and Im speru m vee days in a firm-personinna- ble life rah. Family—. bets have sail Nathan Ci r. n has Aspergersyndrome, aformofamism. Comm rias, courn mourds show Carman wa a suspect in the 2013 killing of his matemalgrandfa[her, 87 - year -ail John Chakaloa,a —1-.m developer. AccoMingroa s t rch warrent for Q -.W m tforCaiman's mapart- ent obtained by The Hatt- fordCoumn4carmanwas rhe len pereon known ro see hisgrese theraliveon Dec. 20,2013,1mesuehehad dinnerwith him ,this home n Windsor chalsalos was found dead draflen mo m- i ng. He had been shoe three times. Wind -police Capt. Thomas IePoresaidTuesday ,he invenigationinto Choke - kur kiWng remains open and active.Awillih—John Chakaku kh an carate worth more than $42 minion to his fouradulidaughiera. ACoanGuaMspokes- nsaldCarmanlehtha Bostoa bam Tuesday afmr- noon with h is father, ©ark Carman,whonewinfrom hishomeitiCafifomia. ".C-,Guardhad searched for die maher a rid son for days but called ieff,he much Friday. Nathan Car .an-' anwas found in good con didontwodaysla er,above 100nautralmfles muthof Maaha's Vineyad. Registration deadlines While you may register to vote at any time, there are registration deadlines prior to each election. Thedeadlines forthe November 8, 2016, general and special election are: • October l0- Deadline to register to vote online or by mail, or update existing voter registration Information. • October 31 - In-person registration deadline for people not currently registered in Washington. Register in person at the King County Elections office or at the Voter Registration Annex. £�H' epv er epi t(`on"'curienrt§ � Update your registration If you have moved or changed your name, or if your signature has changed. Simply update your information online or submit a new registration form. On Tuesday, November 8, 2016, In King County, Washington, there will be held a general and special election conducted conducted entirely by all. Call King County -AMMElections to obtain a replacement ballot if your original ballot packet Is lose, spelled, or destroyed. Assts¢anCeaValuahle3j.?..�.�, , Registration assistance and accessible voting equipment is available. Contact King County Elections for additional information, to meet the statutory requirements regaraing the canvassing of election ballots and to accommodate members'schedules as much as possible, the following meetings of the Canvassing Board are: October 21, 2016 at 10 a.m. Convening Meeting King County Elections November 3, 2016 at 1:30 p.m. Pre -Election Meeting King County Elections November 17, 2016 at 1:30 p.m. First Post -Election Meeting King County Elections November 23, 2016 at 1:30 p.m. Second Post -Election Meeting King County Elections November 28, 2016 at 3:30 p.m. Final Post -Election Meeting King County Elections November 29, 2016 at 3 p.m. Certification Meeting King County Elections King County Elections Is located at 919 SW Grady Way, Renton, WA 98057. The logic and accuracy test for accessible voting units will take place at King County Elections, 919 SW Grady Way, Renton, WA 98057, on October 14, 2016 at 10 a.m. The logic and accuracy test for vote counting equipment will take place at King County Elections, 919 SW Grady Way, Renton, WA 98057, on October 25, 2016 at 1 p.m. The public is Invited to attend all Canvassing Board meetings and the logic and accuracy tests. Contact information phone: 206.296 -VOTE (8683) 1.800-325.6165 TTY Relay: 711 email: elealons@kingcounty.gov online: kingcounty.gov/elections mail or in-person: King County Elections 919 SW Grady Way Renton, WA 98057 Voter Registration Annex King County Administration Building 500 4th Ave., Room 440 Seattle, WA 98104 .ay — See am November 8, 2016 TUK 11-1164 Official General and Special Election Ballot BALLOT CODE: 71 King County, Washington LEG DISTRICT: 11 S EQ: 3 see State State see on e Initiatives to the People Proposed Amendment to the WON Making selections Initiative Measure No. 1491 State Constitution Initiative Measure No. 1491 concerns Senate Joint Resolution No. 8210 court -issued extreme risk protection see �— O orders temporarily preventing access The legislature has proposed a - ME constitutional amendment to the to firearms. This measure would allow deadline for completing state see police, family, or household members O legislative and congressional 11111101 to obtain court orders temporarily redistricting. This amendment would on preventing firearms access by persons require the state redistricting Use a black ink pen to completely fill exhibiting mental illness, violent or commission to complete redistricting sell MR in the oval next to your choice, other behavior indicating they may for state legislative and congressional harm themselves or others. Should districts by November 15 of each year Met HOW to correct a mistake this measure be enacted into law? ending in a one, 46 days earlier than 111111110 w Yes currently required. Should this ^� constitutional amendment be: MW O Candaa.P %; % No C Approvedsale Initiative Measure No. 1501 O Rejected MEN Met O Candda!e 3 Initiative Measure No. 1501 concerns County : on To make a correction, draw a line seniors and vulnerable individuals. King County Sea through the entire measure response This measure would increase the Charter Amendment No. 1 feet or candidate's name. penalties for criminal identity theft and Nonpartisan Prosecuting Attorney sell civil consumer fraud targeted at EM You then have the option of making seniors or vulnerable individuals; and Shall the King County Charter be am on another choice by completely filling in exempt certain information of amended to make the elected office of another oval. vulnerable individuals and in-home King County prosecuting attorney En caregivers from public disclosure. nonpartisan? ONE � Should this measure be enacted into Yes Optional write-in law? Yes s Nosee / O No Kin County nrr y MEN Chart �i erAmendment No.2 Initiatives to the Legislature feet Gender -Neutral Language Initiative Measure No. 732 see To add a new candidate, fill in the Shall the King County Charter be oval next to the write-in line and print Initiative Measure No. 732 concerns amended to make its language 11011111 the name on the write-in line. taxes. This measure would impose a gender -neutral? carbon emission tax on certain fossil 011111111 fuels and fossil -fuel -generated Yes else Always look at both sides of - electricity, reduce the sales tax by one No See your ballot. percentage point and increase a low- income exemption, and reduce certain Federal" manufacturing taxes. Should this Do not cut, tear or damage the measure be enacted into law? President and Vice President of the ballot. O Yes United States partisan office less O No vote for one pair Asis Hillary Initiative Measure No. 735 �i Clinton and Tim Kaine Initiative Measure No. 735 concerns a Democratic Party Nominees MEN - • e ® proposed amendment to the federal Cj Donald J. Trump and MEN constitution. This measure would urge Michael Pence the Washington state congressional Republicann Party Nominees Beer delegation to propose a federal onei State constitutional amendment that O Alyson Kennedy and 0111011 -- constitutional rights belong only to Osborne Hart mme Initiatives to the People individuals, not corporations, and Socia:ist Workers Party Nominees 101111, oniii - constitutionally -protected free speech Initiative Measure No. 1433 excludes the spending of money. C Gloria Estda La Riva and MEN -D Should this measure be enacted into Eu�ene Puryear S talism & Liberation Pany Initiative Measure No. 1433 concerns law? Nominees am labor standards. This measure would O Yes n Jill Stein and tells increase the state minimum wage toAjamu Baraka No See $11.00 in 2017, $11.50 in 2018, $12.00 in C) Green Party Nominees 2019, and $13.50 in 2020, require Advisory Votes' Darrell L. Castle and see employers to provide paid sick leave, and Scott N. Bradley am adopt related laws. Should this measure Advisory vote No. 14 Constitution Party Nominees see be enacted into law? House Bill 2768 Gary Johnson and 11001 0 Yes The legislature extended, without a Bill Weld Libertarian Party Nominees Nor vote of the people, the insurance See =1 No 1 premium tax to some insurance for CD stand-alone family dental plans, see Initiative Measure No. 1464 costing an indeterminate amount in ' the first ten years, for government Initiative Measure No. 1464 concerns I spending. This tax increase should be: READ: Each candidate for president;tells ses campaign finance laws and lobbyists. This O Repealed and vice-president Is the official measure would create a campaign -finance Beer see system; allow residents to direct state Maintained nominee of a political party. For see funds to candidates: repeal the non- other partisan offices, each - ses resident sales -tax exemption; restrict Advisory Vote No. 15 '-candidate may state political Miller lobbying employment by certain former Second Engrossed Substitute party that: he or she prefers. A; sein public employees; and add enforcement House Bill 2778 candidate's preference does not ales requirements. Should this measure be . imply that the candidata is enacted into law? p y The legislature imposed, without a nominated or endorsed by the: Yes O vote of the people, certain limitations party, or that the party approves of No on the retaii sales and use tax or associates with that candidi exemptions for clean alternative -fuel see vehicles, costing $2,000,000 in the United States Senator first ten years, for government partisan office see spending. This tax increase should be: vote for one Repealed Patty Murray (Prefers Democratic Party) Maintained Chris Vance see (Prefers Republican Party) O0111110 See See .� — IN Federal State city United States Representative Legislative District No. 11 City of Tukwila Congressional District No. 4 Representative Position No. 2 Proposition No. 1 partisan office partisan office Public Safety Bonds vote for one vote for one The Tukwila City Council passed F Adam Smith (Prefers Democratic Party) Steve Bergquist (Prefers Democratic Party) Ordinance No. 2509 concerning Basler financing its Public Safety Plan. If refers Republican Party) approved, this proposition would State Supreme Court CD _ replace three fire stations, fund life/safety equipment for the Tukwila State': Justice Position No. 1 nonpartisan office Fire Department, construct a police/court justice center and Governor vote for one establish a financial oversight partisan office vote for one Mary Yu committee by authorizing issuance of Ja Inslee y David DeWolf general obligation bonds not to exceed $77,385,000 (maturing within 20 (Prefers Democratic Party) (-D Bill Bryant CD years), and would authorize the annual (Prefers Republican Party) levy of excess property taxes to pay Justice Position No. 5 nonpartisan office the bonds, all as provided in Ordinance No. 2509. Should this Lieutenant Governor vote for one proposition be approved? partisan office vote for one Barbara Madsen Yes Cyrus Habib Greg Zernpel C No (Prefers Democratic Parry) Marty McClendon CDTransportation (Prefers Republican Party) Justice Position No. 6 nonpartisan office Sound Transit (A Regional Transit Authority) Secretary of State vote for one Proposition No. 1 partisan office vote for one Charles (Charlie) Wiggins Light -Rail, Commuter -Rail, and D Kim Wyman c Dave Larson Bus Service Expansion (Prefers Republican Parry) G Tina Podlodowski The Sound Transit Board passed (Prefers Democratic Party) Resolution No. R2016-17 concerning Court of Appeals, Division No. 1, District No. 1 G expansion of mass transit in King, Pierce, and Snohomish counties. This State Treasurer - measure would expand light-rail, partisan office vote for one commuter -rail. and bus rapid transit service to connect population and Judge Position No. 1 C Duane Davidson nonpartisan office vote for one growth centers, and authorize Sound (Prefers Republican Party) Transit to Bevy or impose: an Michael Waite t--' (Prefers Republican Party) Michael J. Trickey 0.5% sales and useer a CD property tax of $0.25 or less padditional $1,000 of assessed valuation; an — -_—,. State Auditor Superior Court additional 0.8% motor -vehicle excise partisan office tax; and use existing taxes to fund the Judge Position No. 14 vote for one local share of the $53.8 billion Mark Miloscia nonpartisan office `or estimated costincludin g inflation), cost( C (Prefers Republican Party) vote one with continuing independent audits, as Pat (Patricel McCa th� m Nicole Gaines Phelps described in the Mass Transit Guide (Prefers er. ocratic arty) and Resolution No. R2016-17. Should C G David Greenspan (—� this measure be: �, Approved Attorney General partisan office vote for one Rejected 1 Judge Position No. 26 C__ Bob Fer uson nonpartisan office vote for one (Pretars Democratic Party) End of Ballot B. Trumbull CDJoshua David Keenan (Prefers Ubertarian Parry) n John H. O'Rourke Commissioner of Public Lands C) Judge Position No. 31 partisan office vote for one r --- � Steve McLaughlin nonpartisan office for (Prefers Republican Party) vote one r i, Hilary Franz CI Marc S. Stem (Prefers Democratic Party) Helen Halpert Superintendent of Public Instruction O nonpartisan office vote for one Judge Position No. 44 Erin Jones -_ nonpartisan office vote for one Chris Reykdal 0 Cathy Moore cD Eric Newman Insurance Commissioner O partisan office vote for one Judge Position No. 52 Mike Kreidler nonpartisan office for (Prefers Democratic Party) vote one Richard Schrock O Anthony Gipe (Pre`ers Republican Party) U Kristin Richardson Legislative District No. 11 O State Senator partisan office Judge Position No. 53 vote for one nonpartisan office vote for one Bob Hasegawa CD Mariana Spearman (Prefers Democratic Party) Dennis Price , c) Thomas Cline (Prefers Libertarian Party) U Legislative District No. 11 District Court Representative Position No, 1 Southwest Electoral District partisan office vote for one Judge Position No. 3 unexpired 2 -year term Zack Hudgins I nonpartisan office `--� (Prefers Democratic Party) vote for one Erin Smith Aboudara O Laurel Gibson (Prefers Republican Party) I C ) Brian J. Todd I � Lea 1114 IMMIN I a IMIU.11 t4 9110" 10610 1, CHRISTY O'FLAHERTY, City Clerk of the City of Tukwila, Washington (the "City"), do hereby certify: I That the attached Ordinance No. I. (the "Ordinance") is a true and corre copy of an ordinance of the City Council, as adopted at a regular meeting of the City Coun held on November 21, 2016, and duly recorded in my office, and that such Ord1 inance has n been amended or superseded. 1 2. That the meeting was duly convened and held in all respects in accordance with law, and to the extent required by law, due and proper notice of the meeting was given; that a legal quorum was present throughout the meeting and a legally sufficient number of members of the City Council voted in the proper manner for the adoption of the Ordinance; that all other requirements and proceedings incident to the proper adoption of the Ordinance have been duly fulfilled, carried out and otherwise observed; and that I am authorized to execute this certificate. Christy O'Flaherty, City Clerk City of Tukwila, Washington 10076 00002 fk253d50gf Cl*ty of Tukwi*la Washington Ordinance1. numberWHEREAS, the • proportion of qualified electors of - City required WHEREAS, it is deemed necessary and advisable that the City authorize the issuance of the first series of such unlimited tax general obligation bonds (the "Bonds") to provide part of the funds necessary to finance the Project and to pay costs of issuance for Bonds; • and W: Word Processing\Ordinances\Bond issuance -Public Safety Plan 11-9-16 PM:bjs Page 1 of 16 City means the City of Tukwila, a municipal corporation •' organized and existing •' the laws • the State. City Clerk means the duly appointed and acting City Clerk of the City or th,; • to the duties •i that office. City Administrator means the duly appointed and acting City Administrator, including anyone acting in such capacity for the position, or the successor to the duties R f that • Code means the Internal Revenue Code of 1986 as in effect on the date of issuance of the Bonds or (except as otherwise referenced herein) as it may be amended to apply to obligations issued on the date of issuance of the Bonds, together with applicable proposed, temporary and final regulations promulgated, and applicable official public guidance published, •' the Code. UTEMM "M Continuing Disclosure Certificate means the written undertaking • the •' of the owners and Beneficial Owners of the Bonds as required by Section (b)(5) of the Rule. ► or City Council means the Tukwila City Council, as the • ^• •• •' the City as the same is • and ^• constituted from time to time. Debt Service Fund means the fund or account created pursuant to this ordinance for the purpose of paying debt service on the Bonds. I I � 1: 1 1 1 vol 11 Im I I DTC means The Depository Trust Company, Rew Tork, New Tork, a limited purpose trust company organized under the laws of the State of New York, as ,tepository for the Bonds pursuant to Section 4 of this ordinance. Election Ordinance means Ordinance No. 2509 passed by the Council on August 1,2016. Fair Market Value means the • at which a willing • would • the investment from a willing seller in a bona fide, arm's length transaction (determined as of the date the contract to purchase or sell the investment becomes binding) if the investment is traded • an established securities market (within the meaning • Section 1273 of the Code) and, otherwise, the term "Fair Market Value" means the acquisition price in a bona fide arm's length transaction (as referenced above) if: (i) the investment is a certificate of deposit that is acquired in accordance with applicable regulations under the Code; (ii) the investment is an agreement with specifically negotiated withdrawal or reinvestment provisions and a specifically negotiated interest rate (for example, a guaranteed investment contract, a forward supply contract or other investment agreement) that is acquired in accordance with applicable regulations under W: Word Processing\Ordinances\Bond issuance -Public Safety Plan 11-9-16 PM:bjs Page 3 of 96 the Code; (iii) the investment is a United States Treasury Security --State and Local Government Series that is acquired in accordance with applicable regulations of the United States Bureau of Public Debt-, or (iv) any commingled investment fund in which the City and related parties do not own more than a 10% beneficial interest therein if the return paid by the fund is without regard to the source of the investment. To the extent required by the applicable regulations under the Code, the term "investment" shall include a hedge. Federal Tax Certiricate means the certificate executed by the Designated Representative setting forth the requirements of the Code for maintaining the tax exemption of interest on the Bonds, and attachments thereto. Finance Director means the duly appointed and acting Finance Director of the City or the successor to such officer. Government Obligations means those obligations now or hereafter defined as such in chapter 39.53 RCW, as this chapter may be hereafter amended or restated. Letter of Representations means the Blanket Issuer Letter of Representations given by the City to DTC, as amended from time to time. Mayor or City Mayor means the elected Mayor of the City or the successor to the duties of that office. MSRB means the Municipal Securities Rulemaking Board or any successors to its functions. Official Statement means the disclosure documents prepared and delivered in connection with the issuance of the Bonds. Project means the capital projects described in Section 2 of this ordinance. i INIT, 71 1 MIT I F M 1 Record Date means the close of business for the Bond Registrar 15 days preceding any interest and/or principal payment or redemption date. Registered Owner means the person named as the registered owner of a Bond in the Bond Register. For so long as the Bonds are held in book -entry only form, DTC or its nominee shall be deemed to be the sole Registered Owner. Rule means the Commission's Rule 15c2-12 under the Securities Exchange Act of 1934, as the same may be amended from time to time. Sale Document means the Bond Purchase Contract or Certificate of Award, if any, executed by the Designated Representative in connection with the sale of the Bonds pursuant to Section 12 of this ordinance, which shall provide for the name, principal and interest payment dates and amounts, red em ption/prepayment rights, and other terms to describe such Bonds as determined to be necessary by the Designated Representative. W: Word Processing\Ordinances\Bond issuance -Public Safety Plan 11-9-16 PM:bjs Page 4 of 16 13 +• (a) Bond RegistrarlBond Register The City hereby specifies and adopts the system of registration approved by the Washington State Finance Committee from time to time through the appointment of state fiscal agencies. The City shall cause a bond register to be maintained by the Bond Registrar. So long as any Bonds remain outstanding, the Bond Registrar shall make all necess I ary provisions to permit the exchange or registration or transfer of Bonds at its designated office. The Bond Registrar may be removed at any time at the option of the Finance Director upon prior notice to the Bond Registrar and a successor Bond Registrar appointed by the Finance Director. No resignation or removal of the Bond Registrar shall be effective until a successor shall have been appointed and until the successor Bond Registrar shall have W: Word Processing\OrdinancesV3ond issuance -Public Safety Plan 11-9-16 PM:bjs Page 5 of 16 accepted the duties of the Bond Registrar hereunder. The Bond Registrar is authorized, on behalf of the City, to authenticate and deliver Bonds transferred or exchanged in accordance with the provisions of such Bonds and this ordinance and to carry • all •r the Bond Registrar's powers and duties under this ordinance. The Bond Registrar shall be responsible for its representations contained in the Certificate of Authentication of the Bonds. (b) Registered Ownership. The City and the Bond Registrar, each in its discretion, may deem and treat the Registered Owner of each Bond as the absolute owner thereof for all purposes (except as provided in the Continuing Disclosure Certificate), and neither the City nor the Bond Registrar shall be affected by any notice to the contrary. Payment of any such Bond shall be made only as described in Section 4(g), but such Bond may be transferred as herein provided. All such payments made as described in Section 4(g) shall be valid and shall satisfy and discharge the liability of the City upon such Bond to the extent • the amount • amounts so paid. (c) DTC AcceptancelLetters of Representations. The Bonds initially shall be held by DTC acting as depository. The City has executed and delivered to DTC a Blanket Issuer Letter of Representations. Neither the City nor the Bond Registrar shall have any responsibility or obligation to DTC participants or the persons for whom they act as nominees (or any successor depository) with respect to the Bonds in respect of the accuracy of any records maintained by DTC (or any successor depository) or any DTC participant, the payment by DTC (or any successor depository) or any DTC participant of any amount in respect of the principal of or interest on Bonds, any notice which is permitted or required to be given to Registered Owners under this ordinance (except such notices as shall be required to be given by the City to the Bond Registrar or to DTC (or any successor depository)), or any consent given • • action taken by DTC (or any successor depository) as the Registered Owner. For so long as any Bonds are held by a depository, DTC or its successor depository or its nominee shall be deemed to be the Registered Owner for all purposes hereunder, and all references herein to the Registered Owners shall mean DTC (or any successor depository) or its nominee and shall not mean the owners of any beneficial interest in such Bonds. MJUMMZN�� (1) The Bonds shall be registered initially in the name of "Cede & Co.", as nominee of DTC, with one Bond maturing on each of the maturity dates for the Bonds in a denomination corresponding to the total principal therein designated to mature on such date. Registered ownership of such Bonds, or any portions thereof, may nol thereafter be transferred except (A) to any successor of DTC or its nominee, provided that any such successor shall be qualified under any applicable laws to provide the service proposed to be provided by it; (B) to any substitute depository appointed by the Finance Director pursuant to subsection (2) below or such substitute depository's successor, • (C) to any person as provided in subsection (4) below. W: Word Processing\Ordinances\Bond issuance -Public Safety Plan 11-9-16 PM:bjs Page 6 of 16 W: Word Processing\Ordinances\Bond issuance -Public Safety Plan 11-9-16 PM -.bis Page 7 of 16 (D Bond Registrars Ownership of Bonds. The Bond Registrar may become the R-OgZ-4 id Registrar, and to the extent permitted by law, may act as depository for and permit any of its officers or directors to act as a member of, or in any other capacity with respect to, any committee formed to protect the right of the Registered Owners or beneficial owners • Bonds. (g) Place and Medium of Payment. Both principal of and interest on the Bonds shall be payable in lawful money of the United States of America. Interest on the Bonds shallbe calculated on the basis of a year of 360 days and twelve 30 -day months. For so long as all Bonds are held by a depository, payments of principal thereof and interest thereon shall be made as provided in accordance with the operational arrangements of DTC referred to in the Letter of Representations. In the event that the Bonds are no longer held by a depository, interest on the Bonds shall be paid by check or draft mailed to the Registered Owners at the addresses for such Registered Owners appearing on the Bond Register on the Record Date, or upon the written request of a Registered •' • • than $1,000,000 • Bonds (received by the Bond Registrar at least • the Record Date), such payment shall be made by the Bond Registrar by wire transfer to the account within the United States designated by the Registered Owner. Principal of the Bonds shall be payable upon presentation and surrender of such Bonds by the Registered Owners at the designated office of the Bond Registrar. If any Bond is duly presented for payment and funds have not been provided by the City on the applicable payment date, then interest will continue to accrue thereafter on the unpaid principal thereof at the rate stated on the Bond until the Bond is paid. P? 11 1 111T • w ! • (a) Mandatory Redemption of Tenn Bonds and Optional Redemption. The Bonds shall be subject to mandatory redemption to the extent, if any, set forth in the Sale Document and as approved by the Designated Representative pursuant to Section 12. The Bonds shall be subject to optional redemption on the dates, at the prices and under the terms set forth in the Sale Document approved by the Designated Representative pursuant to • 12. (b) Purchase of Bonds. The City reserves the right to purchase any or all of the Bonds offered to it at any time at a price deemed reasonable by the Finance Director plus accrued interest to the date of purchase. (c) Selection of Bonds for Redemption. For as long as the Bonds are held in book -entry only form, the selection of particular Bonds within a maturity to be redeemed shall be made in accordance with the operational arrangements then in effect at DTC. If the Bonds are no longer held by a depository, the selection • such Bonds to be redeemed and the surrender and reissuance thereof, as applicable, shall be made as provided in the following provisions of this subsection (c). If the City redeems at any •f time fewer than all • the Bonds having the same maturity date, the particular Bonds or portions of Bonds of such maturity to be redeemed shall be selected by lot (or in such manner determined • the Bond Registrar) in increments • $5,000. In the case W: Word Processing\Ordinances\Bond issuance -Public Safety Plan 11-9-16 PM:bjs Page 8 of 16 of a Bond of a denomination greater than $5,000, the City and the Bond Registrar shall treat each Bond as representing such number of separate Bonds each of the denomination of $5,000 as is obtained by dividing the actual principal amount of such Bond by $5,000. In the event that only a portion of the principal sum of a Bond is redeemed, upon surrender of such Bond at the designated office of the Bond Registrar there shall be issued to the Registered Owner, without charge therefor, for the then unredeemed balance of the principal sum thereof, at the option of the Registered Owner, a Bond or Bonds of like maturity and interest rate in any of the denominations herein authorized. (1) Official Notice. For so long as the Bonds are held by a depository, notice of redemption shall be given in accordance with the operational arrangements of DTC 2S then in effect, and neither the City nor the Bond Registrar shall provide any notice of redemption to any beneficial owners. The notice of redemption may be conditional. Thereafter (if the Bonds are no longer held by a depository), notice of redemption shall be given in the manner hereinafter provided. Unless waived by any owner of Bonds to be redeemed, official notice of any such redemption (which redemption may be conditioned by the Bond Registrar on the receipt of sufficient funds for redemption or otherwise) shall be given by the Bond Registrar on behalf of the City by mailing a copy of an official redemption notice by first class mail at least 20 days and not more than 60 days prior to the date fixed for redemption to the Registered Owner of the Bond or Bonds to be redeemed at the address shown on the Bond Register or at such other address as is furnished in writing by such Registered Owner to the Bond Registrar. 1111110= (C) if fewer than all outstanding Bonds are to be redeemed, the identification by series and maturity (and, in the case of partial redemption, the respective principal amounts) of the Bonds to be redeemed; (E) that unless conditional notice of redemption has been given and such conditions have either been satisfied or waived, on the redemption date the redemption price shall become due and payable upon each such Bond or portion thereof called for redemption, and that interest thereon shall cease to accrue from and after said date; d (F) the place where such Bonds are to be surrendered for payment of th6 i edemption price, which place of payment shall be the designated office of the Bond X-! egistrar. W: Word Processing\Ordinances\Bond issuance -Public Safety Plan 11-9-16 PM:bjs Page 9 of 16 W: Word Processing\OrdinancesV3ond issuance -Public Safety Plan 11-9-16 PM:bjs Page 10 of 16 0 MAN Lot I M STLY1011 Lo m #1 0 Tr -IT- A-61, 9- W: Word Processing\Ordinances\Bond issuance -Public Safety Plan 11-9-16 PM:bjs Page 12 of 16 (a) Bond Sale. The Council has determined that it would be in the best interest of the City to delegate to the Designated Representative, for a limited time, the authority to determine the method of sale for the Bonds and to approve the final interest rates, maturity dates, redemption terms and principal maturities for the Bonds. W: Word Processing\Ordinances\Bond issuance -Public Safety Plan 11-9-16 PM:bjs Page 13 of 16 (b) Negotiated Bond Sale. If the Designated Representative determines that the Bonds are to be sold by negotiated public sale, the Designated Representative shall solicit proposals from one or more qualified underwriting firms and shall select the Underwriter that submits the proposal that is in the best interest of the City. Such Bonds shall be sold to the Underwriter pursuant to the terms of a Bond Purchase Co-ttract. (c) Competitive Sale. If the Designated Representative determines that the Bonds are to be sold at a competitive public sale, the Designated Representative shall: (1) establish the date of the public sale; (2) establish the criteria by which the successful bidder will be determined; (3) request that a good faith deposit accompany each bid; (4) cause notice of the public sale to be given; and (5) provide for such other matters pertaining to the public sale as he or she deems necessary or desirable. The Designated Representative shall cause the notice of sale to be given and provide for such other matters pertaining to the public sale as he or she deems necessary or ,eesirable. Such Bonds shall be sold to the Underwriter pursuant to the terms of a ,,e-t,ific?te of Award. (d) Sale Parameters. Subject to the terms and conditions set forth in this Section 12, and subject further to certification of approval of the Bond Authorization, tht- Designated Representative is hereby authorized to approve the method of sale and the final interest rates, aggregate principal amount, principal maturities, and redemption rights for the Bonds in the manner provided hereafter so long as: (1) the aggregate principal amount of the Bonds does not exceed $36,500,000; B m1 1•1 • 1 �� a- 1 0 L J=,rtnemom1's in 1111 (3) the aggregate purchase price for the Bonds shall not be less than 98% of the aggregate stated principal amount of the Bonds, excluding any original issue discount; and (4) the true interest cost for the Bonds (in the aggregate) does not exceed 4.50%. Subject to the terms and conditions set forth in this section, the Designated Representative is hereby authorized to execute the appropriate Sale Document on behalf of the City. Following the execution of the Sale Document, the Designated Representative shall provide a report to the Council describing the final terms of the Bonds approved pursuant to the authority delegated in this section. The authority granted to the Designated Representatives by this Section 12 shall expire 180 days after the eff- •i. - date of this ordinance. If a Sale Document for the Bonds has not been executed within 180 days after the effective date of this ordinance, the authorization for the issuance of the Bonds shall be rescinded, and the Bonds shall not be issued nor their sale approved unless such Bonds are re -authorized by ordinance of the Council. The ordinance re- authorizing the issuance and sale of such Bonds may be in the form of a new ordinance W: Word Processing\Ordinances\Bond issuance -Public Safety Plan 11-9-16 PM:bjs Page 14 of 16 W: Word Processing\Ordinances\Bond issuance -Public Safety Plan 11-9-16 PM:bjs Page 15 of 16 Section 17. Payments Due on Holidays. If an interest and/or principal paymen'j ,Vate for the Bonds is not a busines� day, then payment shall be made on the nexj I- tusiness day and no interest shall accrue for the intervening period. Section 18. Corrections by City Clerk or Code Reviser. Upon approval of the City Attorney and Bond Counsel, the City Clerk and the code reviser are hereby authorized to make necessary corrections to this ordinance, including but not limited to the correction of clerical errors; references to other local, state or federal laws, codes, rules, or regulations; ordinance numbering and section/subsection numbering-, and other similar necessary corrections. Section 19. Effective Date. This ordinance or a summary thereof shall be published in the official newspaper of the City, and shall take effect and be in full force five days after passage and publication as provided by law, Pa_Firi6a Law GroVLN:1 Bond Counsel INS Published: Effective Date: Ordinance Number: W: Word Processing\Ordinances\Bond issuance -Public Safety Plan 11-9-16 PM:bjs Page 16 of 16 Exhibit A Form of 1901rd [DTC LANGUAGE] N 0 Ismas'N' H. UNLIMITED TAX GENERAL OBLIGATION BOND, 20[ 1 INTEREST RATE: % MATURITY DATE: CSI P NO.: I VI: 03 &3U.".O : 101 Uoy, Zrk M The City of Tukwila, Washington (the "Cityhereby acknowledges itself to owe and for value received promises to pay to the Registered Owner identified above, or registered assigns, on the Maturity Date identified above, the Principal Amount indicated above and to pay interest thereon from '1 20—, or the most recent date to which interest has been paid or duly provided for until payment of this bond at the Interest Rate set forth above, payable on 1,20 1 and semiannually thereafter on the first days of each succeeding and . Both principal of and interest on this bond are payable in lawful money of the United States of America. The fiscal agent of the State of Washington has been appointed by the City as the authenticating agent, paying agent and registrar for the bonds of this issue (the "Bond Registrar"). For so long as the bonds of this issue are held infully immobilized form, payments of principal and interest thereon shall be made as provided in accordance with the operational arrangements of The Depository Trust Company ("DTC") referred to in the Blanket Issuer Letter of Representations (the "Letter of Representations") from the City to DTC. The bonds of this issue are issued under and in accordance with the provisions of the Constitution and applicable statutes of the State of Washington and Ordinance No. duly passed by the City Council on November 21, 2016 (the "Bond Ordinance"). Capitalized terms used in this bond have the meanings given such terms in the Bond Ordinance. This bond shall not be valid or become obligatory for any purpose or be entitled to hereon shall have been manually signed by or on behalf of the Bond Registrar or its duly designated agent. W W: Word ProcessingkOrdinanceskBond issuance -Public Safety Plan 11-5-16 SMIN A i 111IMMOU 9 M MITA HAMM A-2 rqft"VOIMU15�21 �,., I0 L M, an W: Word Processing\Ordinances\Bond issuance -Public Safety Plan 11-9-16 The Bond Registrar's Certificate of Authentication on the Bonds shall be in substantially the following form: ISM A I I i 1 1, i I ij� � 0111, 1 This bond is one of the bonds described in the within -mentioned Bond Ordinance and is one of the Unlimited Tax General Obligation Bonds, 20 of the City of Tukwila, Washington, dated .,2016. flFAY3_WMI9M �,@ � �AA_ as Bond Registrar M M W: Word Processing\Ordinances\Bond issuance -Public Safety Plan 11-9-16 11111111 111111111 1 1111111 111�]1111111111111111111111 ��Irlj Ill 111111 ;11111 I'll: I CI: I III 111 111:11 On • - •- 2016 the City Councilof of • • adopted the following ordinances, the main points of which are summarized by title as follows: " q f f R;0111111,21• f- i O • MRS I i I � ME certify that the attached is a full, true and correct copy of the minutes of the November 14, 2016 'Christy O'Flaherty, City Clerk City of Tukwila, Washington 10076 00002 fk253d5Ogf City Hall Council Chambers November 14, 2016 — 7:00 P.m. CALL TO ORDERIPLEDGE OF ALLEGIANCE Council President Duffle called the Tukwila City Council meeting to order at 7:09 p.m. and led the audience inthe Pledge ofAllegiance. OFFICIALS Present were Joe Duffie, Council President- Councilmembers Dennis Robertson, Verna Seal, Kathy Hougardy, De'Sean Quinn, Kate Kru�ler, Thomas McLeod. CITY OFFICIALS Allan Ekberg, Mayor; David Cline, City Administrator; Bob Giberson, Public Works Director; Peggy McCarthy, Finance Director- Vicky Carlsen, Deputy Finance Director; Rachel Bianchi, Communications and Government Relations �Ianager; Derek Speck, Economic Development Administrator; Gail Labanara, Public Works Analyst; Stephanie Brown -Smith, Human Resources Director; Joseph Todd, Technology and Innovation Services Director; Rick Still, Parks and Recreation Director; Jack Pace, Department of Community Development Director; Bruce Linton, Deputy Police Chief-, Barbara Saxton, Administrative Support Coordinator; Laurel Humphrey, Council Analyst-, Francesca Siegler, Deputy City Brooke Alford, 4724 S. 122nd Street, requested that Tukwila make an official statement reaffirming our City's policy ofinclusivity. She expressed concern for the intolerance experienced around the country. N1a. Alford voiced her desire for City leadership to be vigilant,, act to restore well-being in the community and consider acourse ofpositive action. Pat Lanaon, 14244 551h Ave. 8o, expressed the importance ofhaving the School Resource Officer program at Foster High School, which creates a bridge in the community. Ms. Larson expressed appreciation for Officer Adam Balcom, Police Chief Villa and Deputy Police Chief Linton for their support and positive involvement with the school program. Maria Abrego, 16311 471h Pl. S,, spoke as a student representative from Foster High School, describing the student's afternoon march from Foster High School toTukwila City Hall. The students' message to the City isone ofunity, stating "United VVeStand, Divided We Fall", Ma. Abregoexpkained they would like attention focused on many points including the desire of residents to feel safe, educating residents on legal rkghts, assistance with immigration |mw, being a non -gentrifying community and creating affordable housing for low-income families. Daniel Humkey. 13213 32»u4we So., spoke as a student representative from Foster High School. He expressed the intent ofthe student walk -out was tocreate a safe and inclusive city for all residents. Mr. Hurnkey shared that even though Tukwila is more inclusive and accepting than other cities, we still need hmfocus onmaking Tukwila safe for individual expression. Councilmember Seal proposed that a draft resolution of inclusivity be created to address many points in the email CnunnUmemberahad received onbehalf ofthe student group. The Councilmembers were unanimous in expressing gratitude to the students of Foster High School for sharing their heart -felt message with the City. The Counoi|membensexpressed support ofen inclusiveness -based resolution and encouraged continued student dialogue into the future. Tukwila City Council Committee ofthe Whole Minutes November 14.2O18 Page 2o/8 Dennis Martinez, 4G6OSouth 1OOm.shared that itisNational Apprenticeship week. Hedescribed his experience asanestimator and union pipe fitter. Hefeels there ioalarge need for skilled construction workers inthe workforce and urged residents and students tothink nfconstruction asacareer. His message and advice to students is to stay involved and find a good cause to be involved in. 1.Anordinance levying the general taxes for the fiscal year commencing January i.2D17; and 2. An ordinance relating to the limiting factor for the regular property tax levy above the rate of inflation (Implicit Price DeOa0or);and 3. An ordinance increasing the regular levy from the previous year nn all propeMN, both real and persona[ by196commencing January 1.2O17. 7:40 p.m. Council President Duffle opened the public hearing. Vicky Car|oen, Deputy Finance Director, explained the tax legislation for the 2017 fiscal year. These ordinances include setting the levy rate and achange inregular taxes from this year tolast year. She explained that since the implicit price deflator was under 196. athind ordinance is needed this year that reflects the substantial need. Ms. Carlsen added that based on our bond issue proposal for this and next year, the tax ordinance includes a47 -cent excess levy to pay the bonds back starting next year. Since this is anestimate, once the bonds are sold, there may bemneed horeturn inDecember for an amendment ifthe tax levy slightly changes. Council President Duffie called for public comments 1. An ordinance amending Ordinance No. 2458, which adopted the biennial budget for the 2015-2016 biennium, to adopt an amended year-end budget; and 2. An ordinance adopting the biennial budget for the 2017-2018 biennium; and 3. A resolution adopting the 2017-2022 Financial Planning Model and the Capital Improvement Program (CIP) for general government and the City's enterprise funds. Ms. Carlsen explained there are two ordinances and a resolution involved in the budget legislation. The ordinance amending the 2015-2016 budget has been brought to Council Committees or the City Council throughout the year. The results of the proposed amendments eliminate the budgeted General Fund drawdown and keep department budgets within expenditures. The second piece of budget legislation is ordinance adopting the 2017-2018 proposed budget. This ordinance incorporates ' the Council's prioritiesl and has been reviewed at multiple meetings and Council workshops. The final budget item is a resolutio ?.dopting the 2017-2022 Financial Planning Model and Capital Improvement Program. There were nopublic comments. 7:44 p.m. Council President Duffle closed the public hearing. SPECIAL ISSUES a. Tax levy legislation: 1. An ordinance levying the general taxes for the fiscal year commencing January 1, 2017; and 2. An ordinance relating to the limiting factor for the regular property tax levy above the rate of inflation Tukwila City Council Committee of the Whole Minutes November 14.2O18 Page 3of8 3. An ordinance increasing the regular levy from the previous year on all propedy, both real and personal, by196commencing January 1.2017. CouncUmember Seal indicated these three ondinanoea, as described by Ms. Cadmen, did not gothrough the Council Committee process. She authorized them bomove forward Uuthe full Council. Counni|mmmberRobertson stated this iaa standard ordinance reviewed every year. He sees no variations from previous years and supports the legislation, COUNCIL EXISTED TOFORWARD THESE ITEMS TOTHE NEXT REGULAR MEETING. b. Budget legislation: 1An ordinance amending Ordinance No. 2458, which adopted the biennial budget for the 2O15-2Oi6 biennium, to adopt an amended year-end budget Cnunoi|memberSeal indicated these items were discussed atthe Finance and Safety Committee meeting on November 8, 2016. The committee members were unanimous in recommending approval. Peggy McCarthy, Finance Direobor, discussed the budget amendment ordinance, which is a standard procedure each year. The budget amendments are proposed for several reasons: m Reduce the currently budgeted drawdown of the General Fund through departmental under -expenditures and increased revenue, • Add budget for departments or funds experiencing higher than expected costs. For 2016, an adjustment is proposed for the Technology and Innovation Services Department, the Recreation Department and three funds. w Adjust budgeted beginning fund balance toreflect 2O15actuals. • Add budget for revenue -backed expenditures such as grants and reimbursable services. m Add budget for carryover items budgeted in one year but expended in the current year. w Add budget for new initiatives, which is the budget for the Technology and Innovation Services initiative approved by Council in October. The proposed amendments were categorized into four groups. Ms. McCarthy referred to pages 18 and 19 of the agenda packet for information on the categorized amendments by fund and department. The four groups discussed included Existing Service Levels and P|ans. Revenue backed. Carryovers and 2. An ordinance adopting the biennial budget for the 2017-2018 biennium. 3. A resolution adopting the 2017-2022 Financial Planning Model and the Capital Improvement Program (CIP) for general government and the City's enterprise funds. Councilmember Seal stated these items were reviewed at the Finance and Safety Committee. She explained the committee members reviewed the language in the ordinance, which is the way it moved out of Committee. Councilmember Robertson proposed an addition to the Parks and Recreation Department budget. Referring to a memo distributed at tonight's meeting, Mr. Robertson discussed a proposed budget increase to implement use of reclaimed water for irrigating the golf course, as opposed to pumping water out of the river, which can be detrimental to salmon. The proposed change would create a placeholder of $100,000 per year for the next two years. The place holder would be used to pay King County for the reclaimed water, the conversion equipment, and any extra labor costs. In response to a question from Councilmember Hougardy regarding the funding, Councilmember Robertson responded the money would come from the ending fund balance. Tukwila City Council Committee of the Whole ITlinutes November 14, 2016 Page 4 o 09 EMB PFe5Ur11d11Uf1 2nd a market update. Councilmember Robertson and Councilmember Quinn asked questions to clarify the plan expenditures and to highlight key milestone dates to ensure the information interpreted is correct. COUNCIL CONSENSUS EXISTED TO FORWARD THIS ITEM TO THE NEXT REGULAR MEETING. 8:42 p.m. Councilmember McLeod exited the Council Chambers. 8:44 p.m. Councilmember McLeod returned to the Council Chambers, Tukwila City Council Committee of the Whole Minutes November 14, 2016 Page 5of8 d. A resolution adopting a new Public Works fee schedule. Councilmember Hougardy stated this item was discussed at the Utilities Committee meeting on October 25, 2016, The Committee members were unanimous in recommending approval. She explained that the City's water and sewer systems serve a portion of the city; however, all residents have the Tukwila surface water rates. Gail Labanara, Public Works Analyst, explained the rate increases for 2017 and 2018. Cascade Water Alliance's wholesale water rates are proposed to increase. The City's single and multi -family residents proposed base rate increases to $17.00 in 2017 and $18.00 in 2018. Ms. Labanara shared that since our water conservation efforts have increased, our consumption levels have decreased by 6%. King County has a 5.2% rate increase in sewage disposal fees in 2017 and has no increase proposed for 2018. Tukwila's sewer base rate will not have an increase in 2017, but does have an increase scheduled in 2018. Tukwila's surface water base rate is scheduled for an increase in 2017 and 2018. The City's rate will increase to $171.00 in 2017 and to $176.00 in 2018 per residential parcel. Ms. Labanara explained the Automatic Meter Reading Program from Puget Sound Energy. The new pole attachment fee would allow franchise holders to attach to the City -owned poles. The new rates for use of conduits and fiber optic cables is a condition of an agreement similar to the King County Metro Rapid Ride agreement approved in 2013. COUNCIL CONSENSUS EXISTED TO FORWARD THIS ITEM TO THE NEXT REGULAR MEETING. e. A contract supplement for the Tukwila 205 Levee. 25, 2016. The Committee members were unanimous in recommending approval to move forward for Council discussion. Bob Giberson, Public Works Director, explained that Northwest Hydraulic Consultants was selected to provide Phase Two levee certification which will provide documentation that the levee meets minimum federal standards. This certification allows FEMA to map the protected area outside of the 100 -year floodplain. The results of the Phase One study revealed the levee does not meet minimum freeboard requirements in 14 segments and embankment, foundation, and stability issues were present. Phase Two will review the areas identified in Phase One, collect additional site information, develop alternatives for correcting the deficiencies, and provide cost estimates. Mr. Giberson responded to Councilmember Robertson's question to clarify that this supplement is in relation to the storm water utility. The City will receive further engineering analysis as part of Phase Two. Staff has not started the conceptual design and will wait to for information based on this next phase before commencing the conceptual project level design. COUNCIL CONSENSUS EXISTED TO FORWARD THIS ITEM TO THE NEXT REGULAR MEETING. f. A contract supplement for the 42nd Avenue South Phase III Project. Councilmember Robertson said this item was discussed at the Transportation Committee meeting on November 7, 2016 and the Comm itteem embers were unanimous in recommending approval for Council discussion. He explained this project is to combine the 42nd Avenue South roadway improvement and the Gilliam Creek culvert replacement project. Project issues include compliance with the City's Sensitive Areas regulations and the need to mitigate stream location. Tukwila City Council Committee of the Whole Minutes November 14, 20 1 1 1 6 -,- Page 6 ol g. A resolution amending the Financial Planning Model policies. Councilmember Seal said this item was discussed at the Finance and Safety Committee meeting on October 18, 2016 and the Committee members were unanimous in recommending approval. She discussed the City's financial policies relating to the Financial Planning Model and other General Financial Policies. Following the Committee's review, language was added to the Policy to clarify expectations. The additional language states, "GF -5: Funds exceeding the Mayor's allocated signature authority shall not be moved between City departments without prior approval of the City Council." Councilmember Robertson and Councilmember Quinn added that this policy is about how we allocate money between departments and the future ability to make adjustments. COUNCIL CONSENSUS EXISTED TO FORWARD THIS ITEM TO THE NEXT REGULAR MEETING. h. A resolution related to the cost -of -living adjustment (COLA) for non -represented employees. This item was reviewed at the Finance and Safety Committee meeting on November 8, 2016 and was forwarded with majority approval. Stephanie Brown -Smith, Human Resources Director, explained that in 2013 the Council adopted Resolution No. 1796 establishing a compensation policy for employees, The resolution outlines that in odd numbered years non -represented employees are provided a cost of living adjustment. The COLA is based on 90% of the Seattle -Tacoma -Bremerton Area Consumer Price Index (CPI -W). For 2016, the CPI -W was 2.0%, and the COLA for non -represented employees for 2017 would be 1.8%. The proposed COLA would be reflected within the proposed 2017-2018 City budget. A review of Resolution No. 1796 in 2017 would include the overview of current compensation trends, policy review of comparable cities and any other issues deemed appropriate through discussion. ontinue the discussion reLRaLd_in__o,_Q=9,ensatior!F policies in the first quarter 2017. Councilmember Kruller expressed the need for a transparent process while reviewing the framework and approach. COUNCIL CONSENSUS EXISTED TO FORWARD THIS ITEM TO THE NEXT REGULAR MEETING. i. Developer selection for motel site. Derek Speck, Economic Development Administrator, explained that in 2014 and 2015, the City purchase' four motel properties on Tukwila International Boulevard to reduce crime and revitalize the neighborhood In 2016, the buildings were demolished and the land is now vacant. At the time of the acquisition, the City planned to sell the properties and the sale is currently planned to occur in 2018. The City recently received letters from El Centro cle la Raza and HealthPoint expressing interest in purchasing the properties. Both organizations have expressed a desire to seek funding for their propose developments from Washington State in the 2017-2018 biennium. If the Council approves a clevelopmer selection process, staff would invite statements of interest from all organizations. Council President Duffie called for citizen comments. Sharon Mann, 4452 South 160 St., feels the City does not need more low income housing and does not support the current proposed development along the Boulevard. Ms. Mann expressed that new housing development increases a need for more public support services. The two developers, HealthPoint and El Centro, do offer services, however, those specific services should not be provided by taxpayers. She feels the boulevard is the heart of the City and becomes the reflection of Tukwila. Tukwila City Council Committee ofthe Whole Minutes November 14, 2016 Page 7 of 8 Brooke Alford, 4724 S. 122nd St., expressed excitement for the proposals providing services, economic development, and affordable housing. The proposals would allow residents to stay closer to their jobs and families. She is impressed with the services of the proposed developers and believes Tukwila can have employment, residential, and services to design a vibrant and inclusive community. Dennis Martinez, 4660 South 1601h St., explained how people are wanting more transparency and he does not feel the safety bond provided enough clarity. The public assumed a fire station or the justice center would be built on those properties. Mr. Martinez shared his confidence in El Centro and feels both, *rganizations are good. He also expressed a desire to see a veterans residence in Tukwila. 9:38 p.m. Councilmember Hougardy exited the Council Chambers. 9:39 p.m. Councilmember Hougardy returned to the Council Chambers. The Councilmembers were unanimous in favor of the two proposals. They look forward to the continued exploratory process as more proposals are presented to the City. and developers to see what would be best for Tukwila. Tukwila is an inclusive community and the building should reflect those values. Councilmember Hougardy explained there was discussion at the Community Affairs and Parks Committee meeting earlier this evening regarding the option to use the land for the City. Ms. Hougardy txplained language would be added to the Request for Proposals (RFP) to include the right to hold the land if logical for City use. nrjyz Mayor Ekberg reported that he met with Foster High School students in front of City Hall this afternoon. The students came to the City Hall parking lot to express their desire to ensure that Tukwila remains an inclusive and tolerant community. The City's 2nd annual Veterans Day celebration was conducted on November 1 01h and the Museum of Flight ceremony to thank veterans for their services was held on November 11m. Councilmember Seal reported that she hosted the Council Coffee Chat on November 12, 2016. She also participated in a National League of Cities webinar titled "Election 2016: What the Results Mean for Cities". The webinar included information on infrastructure and transportation, changes to flood insurance and progrowth. Ms. Seal provided information regarding her involvement with the "Deferred Action for Childhood Arrivals" (DACA) program and stated she has shared this information on immigration issues with high school counselors and other groups and organizations. their participation and organizational assistance at the November 101h Veterans Day event at the Tukwila Community Center. On November 11, 2016, Mr. Duffie attended the Museum of Flight Veterans Day event and thanked all of those involved with making this a success. Councilmember Hougardy participated in a tour of Tukwila with King County Metro staff members on November 8, 2016 and explained that Tukwila will submit an application for an alternative services pilot project. On November 9, 2016, she attended the Veterans Day assembly at Tukwila Elementary School and the City Council Budget Work Session. On November 10, 2016, she participated in the Veterans Day event and a King County Regional Transit Committee meeting. Tukwila City Council Committee of the Whole Minute November 14, 2016 Page 8 of 8 Councilmember Quinn attended the Puget Sound Regional Council meeting on economic development on November 8, 2016 and the City of Tukwila Veterans Day event on November 10, 2016. Counoi|memberKmUershared her report fromCasoadia Rising. OnNovember 0.2D16.she attended the City Council Budget Work Session and Sound Cities Association Public Issues Committee. On November 10, 2016, she attended the Puget Sound Regional Council Transportation Policy Board meeting. She also attended both Veterans Day events inthe City. She reported that onDecember 13. 2O16.there will bea Holiday Dessert Potluck for the Tukwila International Boulevard Action Committee at Valley View Sewer District offices. Councilmember McLeod shared his gratitude to the Tukwila Fire Department and Engine 53 and 54. On November 12.2O1G.they came tohis aid due toacar accident, C. Staff There was nnreport. d. City Attorney The City Attorney's presence is not required at Committee ofthe Whole meetings. e. Intergovernmental Laurel Humphrey. Council Analyst, referenced Counci|memberC>uinn's mention of the Motinno| Anthem atthe Veterans Day event. Alex Zuniga, an 81h grader at Showalter Middle School, beautifully performed the National Anthem at that event. ADJOURNMENT 10:15 p.m. COUNCIL PRESIDENT DUFF)E DECLARED THE COMMITTEE OF THE WHOLE MEETING ADJOURNED. ZI OeDu 1=ie:�, —Go u L—nc i I P�# Francesca Siegler, Deputy ?',4ity Clerk i 9 amm 11 1 1 1 1 i I 1 11 � a ilziii iniri I III irmi vmsn�� 1111�1 �11 I MWITUMSTIMI 1�9 ��§ �I - �� regular meeting of the City Council, which reflect the passage and adoption of Ordinance 1-�Wvm a-, IM IVAU W as, RRIM I R MMI 03 111 LfI403 I a 10076 00002 fk253d5Ogf .1 Tukwila City Council Regular Meeting City Hall Council Chambers November 21, 2016 REGULAR MEETING CALL TO ORDER/PLEDGE OF ALLEGIANCE/ROLL CALL Mayor Ekberg called the Regular Meeting of the Tukwila City Council to order at 7:09 p.m. and led the audience in the Pledge of Allegiance. ROLL CALL Christy O'Flaherty, City Clerk, called the roll of the Council. Present were Councilmembers Verna Sea], Joe Duffie, Kathy Hougardy, Kate Kruller, Thomas McLeod. MOVED BY DUFFLE, SECONDED BY SEAL TO EXCUSE COUNCIL MEMBERS QUINN AND ROBERTSON FROM THE MEETING. MOTION CARRIED 5-0. ArfA[*1TJ1qy—W Allan Ekberg, Mayor David Cline, City Administrator; Rachel Turpin, City Attorney,'Mike Villa, Police Chief; Jay Wittwer, Fire Chief; Bob Giberson, Public Works Director; Gail Labanara, Public Works Analyst; Rachel Bianchi, Communications and Government Relations Manager; Stephanie Brown, Human Resources Director; Peggy McCarthy, Finance Director; Vicky Carlsen, Deputy Finance Director; Derek Speck, Economic Development Administrator; Laurel Humphrey, Council Analyst; Francesca Siegler, Deputy City Clerk; Christy O'Flaherty, City Clerk. There were no citizen comments. a. Approval of Minutes: 11/7/16 (Regular) b. Approval of Vouchers: #373491-373585; #161102-161103 in the amount of $1,578,529.78 c. A resolution adopting a new Public Works fee schedule. RESOLUTION N. 1896 [Reviewed and forwarded to Consent by the Committee of the Whole on 11114116.] d. Authorize the Mayor to sign Supplement #1 to contract #14-164 with Northwest Hydraulic Consultants, Inc., to provide levee certification services for the Tukwila 205 Levee certification in the amount of $316,788.00. [Reviewed and forwarded to Consent by the Committee of the Whole on 11114116.] e. Award a bid and authorize the Mayor to sign a contract with Westwater Construction Company for the Tukwila International Boulevard and South 144th Street Midblock Crossing Project in the amount of $88,300.00 (plus contingency). [Reviewed and forwarded to Consent by the Transportation Committee on 1117116.] f. Authorize the Mayor to sign a contract with BNSF Railway Company for the Boeing Access Road over BNRR Bridge Rehabilitation Project in the amount of $149,428.00. [Reviewed and forwarded to Consent by the Transportation Committee on 1117116.] MOVED BY DUFFIE, SECONDED BY SEAL THAT THE CONSENT AGENDA BE APPROVED AS SUBMITTED. MOTION CARRIED 5-0. Tukwila City Council Regular Meeting Minutes November 21, 2016 UNFINISHED Mayora. Authorize the • sign Supplement #6 to contract #12-010 with CH2M Hill for the 42nd ProjectAvenue South Phase III AMOUNTMOVED BY SEAL, SECONDED BY KRULLER TO AUTHORIZE THE MAYOR TO SIGN SUPPLEMENT #6 TO CONTRACT #12-010 WITH CH2M HILL FOR THE 42ND AVENUE SOUTH PHASE III PROJECT IN THE OF • •CARRIED • . Tax levy legislation: ordinance levying the general taxes forcommencing MOVED BY SEAL, SECONDED BY DUFFIE THAT THE PROPOSED ORDINANCE BE READ BY TITLE ONLY. • •CARRIEDChristy O'Flaherty, City Clerk, read the proposed ordinance by title only. MOVED BY DUFFIE, SECONDED BY SEAL THAT THE PROPOSED ORDINANCE BE ADOPTED A READ. MOTION CARRIED 5-0, TO ADOPT ORDINANCE NUMBER 2510. p.m. CouncilmemberQuinn+ the Council ordinance relating to the limiting factorfor ♦; property tax levy above• inflation MOVED BY SEAL, SECONDED BY HOUGARDY THAT THE PROPOSED ORDINANCE BE READ TITLE ONLY. R • t F Christy O'Flaherty, City Clerk, .a• the proposed • - by - 14 :Ell 031111111 J, Is 19 Lei "q WTI ZA V I :1 #1 -a i M K OF-, I 11!11 ;1 Kel ii PJ 10 F-� 10 to] Tukwila City Council Regular Meeting Minutes November 21, 2016 "Sr♦ • • • • •. personal, ITIO r • r• r •-••• r •'• ` • TITLE ONLY. • •N CARRIED 6-0. • . . w �. '. �.. w a. f :... � , , lir ! • '. Lim MOVED BY DUFFIE, SECONDED BY HOUGARDY THAT THE PROPOSED ORDINArICE BE ADOPTED AS READ. MOTION CARRIED ! TO ADOPT ORDINANCE c. An ordinance amending Ordinance No. 2458, which adopted the biennial budget for! 2016 , • • • adopt an amended • budget. MOVED BY SEAL, SECONDED• •r '•'''• ORDINANCEr ONLY.TITLE MOTION CARRIED 1 Christy O'Flaherty, City Clerk, read the proposed ordinance by title only Z WIRE "M I • r rSECONDED • PROPOSED • r r•• r READ. MOTION CARRIED 6-0, TO ADOPT ORDINANCE NUMBER 2513. d. An ordinance authorizing the issuance of Unlimited Tax General Obligation Bonds in the aggregate principal amount of not to exceed $36,500,000 to finance costs related to its Public Safety Plan. • r DUFFIE, SECONDED BY SEAL THAT THE PROPOSED ORDr BY TITLE ONLY. • • I • E AN EFFECTIVE DATE. Tukwila City Council Regular Meeting Minutes November 21, 2016 Page 4 of 7 MOVEDY QUINN, SECONDED BY DUFFIE THAT THE PROPOSED ORDINANCE BE ADOPTED AS READ.* Councilmember McLeod inquired why an ordinance on the Public Safety,Bonds would be adopted prior to the election results being certified. Peggy McCarthy, Finance Director, explained there is a short time frame involved, as the bonds must be sold within the calendar year, and the process is moving forward. The election will be certified on November 29, and if approved, the bond sale will occur on November 30, with closure on December 23, 2016. Councilmember Quinn said this process is proceeding as originally intended and is based upon certification of the election results. *MOTION CARRIED 6-0, TO ADOPT ORDINANCE NUMBER 2514. e. A resolution adopting updated policies related to the Financial Planning Model and other general financial policies. MOVEDY SEAL, SECONDED BY DUFFIE THAT THE PROPOSED RESOLUTION BE READ BY TITLE ONLY. MOTION CARRIED 6-0. Christy O'Flaherty, City Clerk, read the proposed resolution by title only RL f MOTIONMOVED BY DUFFIE, SECONDED BY SEAL THAT THE PROPOSED RESOLUTION BE ADOPTED AS CARRIED ADOPT} f. A resolution updating and clarifying the non -represented employees' compensation and adopting the Non -Represented Salary Schedule and benefits summary, effective January 1, 2017. MOVED BY SEAL, SECONDED BY DUFFIE THAT THE PROPOSED RESOLUTION BE READ BY TITLE ONLY. MOTION CARRIED 6-0. Christy O'Flaherty, City Clerk, read the proposed resolution by title only • •1 0 9*1' M •' MOVEDY DUFFIE, SECONDED BY SEAL THAT THE PROPOSED RESOLUTION BE ADOPTED AS READ.* Councilmember Hougardy relayed that the Council will revisit the policy regarding compensation in the first quarter of 2017. *MOTION CARRIED 6-0, TO ADOPT RESOLUTION NUMBER 1898. November �11, 2016 Page 5 of 7 14"0, 14442 and 14452 Tukwila International Boulevard (motel site) as outlined in the agenda packet. SELECTION FOR FOUR PARCELS OF CITY -OWNED LAND AT 14420,14440,14442 AND 14452 TUKWILA INTERNATIONAL BOULEVARD (MOTEL SITE) AS OUTLINED IN THE AGENDA PACKET.* Councilmember Kruller expressed that by this action, proposals will be accepted by developers, and no commitments have to be made that are not in the best interest of the City. *MOTION CARRIED 6-0. NEW BUSINESS A resolution of the City Council of the City of Tukwila reaffirming its commitment to being a diverse, tolerant, and inclusive City. At the November 14, 2016 Committee of the Whole meeting, the City Council requested that a resolution embracing diversity and promoting tolerance and inclusion be drafted for consideration. MOVED BY SEAL, SECONDED BY DUFFIE THAT THE PROPOSED RESOLUTION BE READ BY TITLE ONLY. MOTION CARRIED 6-0. Christy O'Flaherty, City Clerk, read the proposed resolution by title only. NONE R1111 IVA ;AWK14"I I ngmtsimm The City Council will again re -affirm its commitment to diversity and inclusiveness through a draft resolution to be discussed this evening. MOVED BY SEAL, SECONDED BY DUFFIE THAT THE PROPOSED RESOLUTION BE ADOPTED AS READ.* i — I s7MMI encouraged me addition of ianguage Trom trie Rational Leagll Call to Action" that was shared at the recent City Summit. Each of the Councilmembers had language suggestions to the draft resolution, Mayor Ekberg inquired if the Council would like to formalize the language through further discussion at a Council Committee. With a focus on ensuring the best possible content for this important piece of legislation, Councilmember Seal withdrew the motion to adopt the draft resolution this evening, with a desire for continued discussior in the Community Affairs and Parks Committee. Tukwila City Council Regular Meeting Minutes November 21, 2016 Page 6 of 7 REPORTS a. Mayor The Mayor had no report. MOAMO= Pennsylvania. She provided an overview of the training sessions and events she participated in during the Conference. She visited the Carnegie Library and attended sessions related to affordable housing and diversity. With 100,000 people turning 65 years old each day, there is a need for dedicated resources to affordable housing. An important take -away for her based on attending the conference is that if you do not have a vision from the top, it's hard to make a change. Councilmember Quinn attended the recent Thanksgiving dinner for seniors at the Tukwila Community Center, where there was a very large turnout. He also reported that based on an email from a citizen, there is an outbreak of break-ins to car trunks to steal holiday gifts. He encouraged all citizens to be extrg vigilant. Prior to the Council meeting this evening, he attended the Joint Legislative Task Force on the Use of Deadly Force in Community Policing. Doug Baldwin testified at the meeting, and the collaboration within the task force members brought forth creative solutions and recommendations. He thanked Chief Villa and City Administration for their support toward this important work. Once the recommendations have gone through the approval process, he can provide a link to the documentation. Councilmember Kruller also attended the recent NLC (National League of Cities) Conference in Pittsburgh, Pennsylvania. Her focus areas for sessions and events were transportation, the opioid epidemic, affordable housing, and a tour of the Carnegie Library. Additionally, she represented Tukwila at the General Assembly, and voted on •- • the City. She may seek • a TIS (Transportation Infrastructure and Services) Vice -Chair position. She also attended Board Nominations, which was enlightening and inspiring. Councilmember McLeod also attended the recent NLC (National League of Cities) Conference in Pittsburgh, Pennsylvania. While at the Conference, he attended an all -day communications boot camp sponsored by ABC/NBC correspondent, Carolyn Sawyer. A take -away for him during this session was the role that social media played in a police -related shooting in Charlotte, NC, He also participated in an incentive -based budgeting class. Mr. McLeod met with Councilmembers at the City of SeaTac about working together on a common theme for projects associated with Tukwila International Boulevard. Council President Duffie also attended the recent NLC (National League of Cities) Conference in Pittsburgh, Pennsylvania. He was impressed with a program in Pittsburgh that allows the purchase of homes for as low as $5, with the condition that they be lived in and not sold. Terry Bradshaw was one of the speakers and was very compelling and down-to-earth. Additionally, he attended a session with Vernice Armour as the keynote speaker. Ms. Armour is the country's first African American female combat pilot, and Mr, Duffie was very moved by the content of her comments. He thanked veterans for e they have done for this country. He also attended a youth delegation, where there was interest shown in allowing 16 -year olds to vote. c. Staff David Cline, City Administrator, referenced the City Administrator (CA) Report in the packet and offered t answer any questions. Councilmember Hougardy referenced the portion of the CA Report regarding attendance at the Veterans Day Ceremony. She '• to acknowledge that Councilmember Quinn was there with his son. She also asked when the Southcenter Pedestrian/Bicycle Bridge project would be complete. Mr. Cline responded that he would get back with the Council on the anticipated completion date. Tukwila City Council Regular Meeting Minutes November 21, 2016 Councilmember Kruller said she did miss the Duwamish Hill Preserve clean-up this past weekend, and wanted to thank staff from the Parks and Recreation Department for all the preparation they put into these events to ensure the volunteers have everything they need. d. City Attorney There was no report. e. Intergovernmental There was no report. ADJOURNMENT 8:14 p.m. UNANIMOUS CONSENSUS EXISTED TO ADJOURN THE REGULAR MEETING. Christy O'Flahe?ry, City Clerk 209W M� FAVLOI I W-11:1 • I WATIREN-1 11 �N EFIA R a DanaAhnberg 6200 Southcenter Blvd] IMICAn Re: Advertiser Account# 1075 10 Agency Account #: 0 MU, M.11 STATE OF WASBINGTON A MA '= The undersigned, on oath states that he/she is an authorized representative of The Seattle Times Compan y, publisher of The Seattle Times of general circulation published daily in King and Snohomish Counties, State of Washington. The" Seattle Times has been approved as a.!, legal newspaper by others of the Superior Court of King and Snohomish Counties. L I I V41 M ILIA I NVII I M" V I IN M94 1 11 V 0 a Notary Public in d for e St n, residing at Seattle OF \NNS Agency Account #: 0 Agency Name: CITY OF TUKWILA AD TEXT PUBLIC NOTICE OF ORDINANCE ADOPTION FOR ORDINANCES 2510-2514. On November 21, 2016 the City Council of the City of Tukwila, Washington, adopted the following ordinances, the main Points of which are summarized by title as fol- lows: The full text of these ordinances will be provided upon reauest. Christy O'Flaherty, MMC, City Clerk Published Seattle Times: November 20, 2016 Xwll" 14 M I DE11 I [UZI in 10 Ivy D11 12 V.%%" DICI p! !%11 PLU 103 11 VON@ 11 1 1 1 1. The undersigned is the Finance Director (the "Designated Representative") of the City o Tukwila, Washington (the "City"), and makes this certification for and on behalf of the Cit ► to the authorization and direction contained in Ordinance No. 2514 • the Cit] adopted by the City on November 21, 2016 (the "Ordinance"). 3. In accordance with the Ordinance, the Official Notice of Sale dated November 22, 2016 ("Notice of Sale"), has been prepared and distributed. Attached as Exhibit A hereto is the • • Sale, together with any amendments • supplements. On November 30, 2016, bids for the purchase of the Bonds, as summarized on Exhibit B hereto, were received and opened in accordance with the Notice of Sale. 5. The sale of the Bonds is hereby awarded to Morgan Stanley & Co, LLC (the "Purchaser"), the Purchaser's bid being the best responsible bid determined by the method of calculation • • in the Notice • Sale as follows: r*fjT,1JJJJJJJJJJJJMrTJ � ��:111 I ',1 1111 I� 111111 11 1• •• 1 • •',, A •• • the Purchaser's bid setting i• interest rates and purchase price for the Bonds is 7.ttache1 as Exhibit C hereto. 6. The Bonds shall be dated, mature, bear interest and be subject to redemption and other terms, all as set forth in Exhibit D hereto. Proceeds of the Bonds shall be used to pay and/or reimburse the City for: (i) a portion of the cost of constructing fire stations and acquiring related firefighting apparatus and equipment; (ii) all or a portion of the cost of constructing a justice center; • (iii) costs • issuance • the Bonds. I INVERSION! III Crl`Y)10F TUKWELA, WASHINGTON 10076 00002 fk30Cf426Y Qt • $34,390,000 * City of Tukwila, Washington U-FlmiTited Ta NOTICE IS HEREBY GIVEN that electronic bids will be received by the City of Tukwila, Washington (the "City for purchase • the above described bonds (the "Bonds") at I or sicn o er Day or Px- communicated as described under "Modification; Cancellation; Postponement." The Bonds will be sold on an all -or -none basis. Bids must be submitted electronically as described herein. Bids must be submitted electronically via the Qualified Electronic Bid Provider in accordance with this Official Notice of Sale. The City has designated PARITYO as the Qualified Electronic Bid Provider for purposes of receiving electronic bids for the Bonds. Electronic bids will be received via PARITYO until the time and date of sale, and no bid will be accepted after that time. For further information about PARITYO including any fees charged, potential bidders may contact PARITYe at (212) 849-5021. By designating a bidding service as a Qualified Electronic Bid Provider, the City does not endorse the use of such bidding service. See "BIDDING INFORMATION AND AWARD - Submission of Bids" below. All bids properly received will be considered and acted on by the City by 3:00 p.m. Pacific Time on the sale date, pursuant to a delegation of authority incorporated in a Bond Ordinance passed by the City Council (the "Council"). Bidders are referred to the attached Preliminary Official Statement for additional information reg 2:4 i Modification; Cancellation; Postponement. 7140 from the City's Financial Advisor, Public Financial Management, Inc., telephone: (206) 858-5363 or e-mail at: sea-advisors@pfm.com. Failure of any bidder to receive such notice by telephone, the Qualified Electronic Bid Provider, or i -Deal Prospectus will not affect the legality of the sale. Each bidder (and not the City or its Financial Advisor) is responsible for the timely delivery of its bid. The official time will be determined by the City and not by any bidder or Qualified Electronic Bid Provider. * Preliminary, subject to change. Im i= 01 WHAM2 I 116FUZ510rel M herein. Due Due Dec. I Amount* Dec. 1 Arnount* 2017 $1,260,000 2027 $1,835,000 2018 1,395,000 2028 1,915,000 2019 1,540,000 2029 1,985,000 2020 380,000 2030 2,070,000 2021 400,000 2031 2,150,000 2022 975,000 2032 2,235,000 2023 1,500,000 2033 2,310,000 2024 1,585,000 2034 2,395,000 2025 1,665,000 2035 2,480,000 2026 1,750,000 2036 2,565,000 Preliminary- subject to adjustment by the City as provided in this Official Notice of Sale. These amounts will represent serial maturities unless Term Bonds are specified, by the successful bidder as described herein, in which case these amounts will represent mandatory redemption amounts of Term Bonds. See "Redemption Provisions - Mandatory Redemption" below. Adjustment of Principal Amount of Bonds and Bid Price for the Bonds Before Bid Opening. Bidders are advised that the City may increase or decrease the total principal amount and/or the amounts of individual maturities of Bonds stated in this Official Notice of Sale (including any amenVa-mrits issY.64 �y the City tk0#,,Ygh th6#,vaffia4 Electr#nic Wit)irii anV i4dal Pr#sAiactys) Arnir tit, this - bidding. If such changes are made, they will be reflected in the Official Bid Form to be made available through the Qualified Electronic Bid Provider. After Receipt of the Bids. Following the time bids are due, the City reserves the right to increase or decrease the aggregate principal amount of the Bonds by an amount not to exceed 15 percent. Adjustments of the aggregate principal amount in excess of 15 percent, rounded up to the next $5,000, may be made with approval of the successful bidder. The price bid by the successful bidder will be adjusted by the City to reflect an increase or decrease in the principal amount and maturity schedule for the Bonds, taking into account the interest rates, coupons and underwriting compensation in the bid as submitted. In the event the City elects to adjust the bond size after the bid pursuant to this Official Notice of Sale, the underwriter's discount (net of bond insurance expense, if any), expressed in dollars per thousand, will be held constant. The City will not be responsible in the event and to the extent that any adjustment affects the net compensation to be realized by the successful bidder, or the true interest cost of the winning bid or its ranking relative to other bids, Redemption Provisions Optional Redemption. The Bonds maturing on December 1, 2017 through December 1, 2026, are not subject to redemption prior to their stated maturity dates. The Bonds maturing on or after December 1, 2027, are subject demdion as a whole or in yart �and if in yart with maturities to be selected bN the- on anrA date on or after December 1, 2026, at a price of par plus accrued interest, if any, to the date fixed for redemption. Mandatory Redemption. Bidders have the option to designate part or all of the Bonds maturing in the years 2027 and later as Term Bonds subject to mandatory redemption at a price of par plus accrued interest, in the years and in the amounts set forth in the serial maturity schedule for the Bonds, subject to adjustment as 41jill P 1. Ano Term Bonds so desi�einated must consist of the total oI�n�ents for two or more consecutive years and mature on the latest of such years. If no Term Bonds are designated, the Bonds will mature in the amounts and on the dates set forth in the serial maturity schedule set forth above and subject to adjustment as described herein. See "DESCRIPTION OF THE BONDS - Redemption Provisions" in the Preliminary Official Statement. Purpose of the Bonds of 0 M ti rwm =.. AME01mus MI-ArgKIM MZ*Tdgj;-E 0 10 . . 0 - RMIN1.1atilaold RUING of and interest on the Bonds as the same become due. The full faith, credit and resources of the City have been WY6VFCdUq-A4'Ue1g64 Avyrrr_-n� and interest. See "SECURITY" in the Preliminary Official Statement. Bond owners do not have a security interest in particular revenues or assets of the City. The Bonds do not constitute a debt or indebtedness of the State of Washington (the "State") or any political subdivision thereof other than the City. See "SECURITY" in the Preliminary Official Statement. Registration and Book -Entry Transfer System Co., as nominee of The Depository Trust Company ("DTC"), New York, New York. DTC will act as the initial securities depository for the Bonds. Individual purchases and sales of the Bonds will be made in book -entry form only in minimum denomination of $5,000 or integral multiples thereof within a maturity ("Authorized Denominations"). Purchasers ("Beneficial Owners") will not receive physical certificates representing their interests in the Bonds. So long as Cede & Co. is the Registered Owner of the Bonds, as nominee for DTC, references to the Registered Owners herein will mean Cede & Co. or its successor and will not mean the Beneficial Owners of the Bonds. See APPENDIX C — "BOOK -ENTRY TRANSFER SYSTEM" in the Preliminary Official Statement for the Bonds. -To 111 Eel k, V-110 I 11FAVI-11 V WIT.Or =10 - Hard copy bids will not be accepted. By submitting a bid for the Bonds, such bidder thereby agrees to the following terms and conditions: (i) If any provision in this Official Notice of Sale with respect to the Bonds conflicts with information or terms provided or required by the Qualified Electronic Bid Provider, this Official Notice of Sale, including any amendments provided to the Qualified Electronic Bid Provider and i -Deal Prospectus, shall control. (ii) The bidder is solely responsible for making necessary arrangements to access the Qualified Electronic Bid Provider for purposes of submitting its bid in a timely manner and in compliance with the requirements of this Official Notice of Sale (including any amendments provided to the Qualified Electronic Bid Provider and i -Deal Prospectus). (iii) The City has no duty or obligation to provide or assure access to the Qualified Electronic Bid Provider to any bidder, and the City shall not be responsible for proper operation of, or have any liability for, any delays, interruptions or damages caused by use or attempted use of the Qualified Electronic Bid Provider or any incomplete, inaccurate or untimely bid submitted by any bidder through the Qualified Electronic Bid Provider. (iv) The City is permitting the use of the Qualified Electronic Bid Provider as a communication mechanism, and not as the City's agent, to conduct the electronic bidding for the Bonds. The Qualified Electronic Bid Provider is acting as an independent contractor, and is not acting for or on behalf of the City. (v) The City is not responsible for ensuring or verifying bidder compliance with any Qualified Electronic Bid Provider procedures. (vi) If a bid is accepted by the City, this Official Notice of Sale (including any amendments issued by the City through the Qualified Electronic Bid Provider and i -Deal Prospectus) and the information that is submitted electronically through the Qualified Electronic Bid Provider shall form a contract, and the bidder shall be bound by the terms of such contract. 4zf* of any contract between the successful bidder and the City unless that information is included in this Official Notice of Sale (including any amendments issued by the City through the Qualified Electronic Bid Provider and i -Deal Prospectus). V �.rkffil M-17171rom M1119 a Emu, eawl Allull.el dY1tjt:!b tip 1:Fy 511)Ftl TWILT U1 Sale kirMITUIrig any amendments issued by the City through the Qualified Electronic Bid Provider and i -Deal Prospectus). Bids must be submitted electronically via the Qualified Electronic Bid Provider. Bids may not be withdrawn or revised after the time that bids are due. Interest Rates Bid. Bids may specify any number of interest rates in multiples of one-eighth of one percent (1/8 of 1 percent) or one-hundredth of one percent (1/100 of 1 percent). All Bonds of the same maturity must bear interest at the same rate and no Bond shall bear interest at more than one rate. No rate of interest may exceed 5.0 percent. Premium and Discount. No bid will be considered for a price that is less than 100.5 percent of the par value of the Bonds. Each maturity must be reoffered at a yield that will produce a price of not less than 98 percent of the principal amount for that maturity. For purposes of the preceding sentences, "price" means the price as calculated using the lesser of the yield to the redemption date, if any, or the yield to the maturity date. Good Faith Deposit The successful bidder for the Bonds shall deliver a good faith deposit in the amount of $350,000 to the City Finance Director. The good faith deposit must be paid in by federal funds wire transfer delivered no later than 90 minutes following the successful bidder's receipt of the verbal award. Wire instructions will be provided to the successful bidder at the time of the verbal award. The good faith deposit will be retained by the City as security for the performance of the successful bidder and shall be applied to the purchase price of the Bonds upon delivery of the Bonds to the successful bidder. Pending delivery of the Bonds, the good faith deposit may be invested for the sole benefit of the City. If the Bonds are ready for delivery and the successful bidder fails or nealects to complete the purchase within 30 days followino acceptance of its bid thegood faith deposit shall be retained by the City as reasonable liquidated damages, and not as a penalty. and, in that event, the City may call for additional proposals. The City's actual damages may be higher or lower than the amount of such good faith deposit. Such amount constitutes a good faith estimate of the City's actual damages. Each bidder waives the right to claim that actual damages arising from such default are less than such amount. Selection of the Successful Bidder The bids for the Bonds will be considered by the City at the date and time set for sale. The Bonds will be sold to the bidder submitting a bid in conformance with this Official Notice of Sale that produces the lowest true M&ei jvra-a-�vt 4r�lhe M, ff4 M -Y6 identified in this Official Notice of Sale. The true interest cost will be the rate necessary, on a 30/360 basis and semiannual compounding, to discount the debt service payments from the payment dates to the date of the Bonds and to the price bid. The true interest cost calculations will be performed by the City's Financial Advisor, and the City will base its determination of the best bid solely on such calculations. The successful bidder for the Bonds will be bound to,3 urchase the Bonds in the r)rinciDal amount. at such Drice. ERM111 a 111:34A 1:11 ii:i: 011MMM. �11491111 0111 1. - LHU DUHUb, IN TMIGH Udbe Me 61UGUbbiff _91111UU1 Z511all Are 41*1111111 4 P1 fwlabt� tFle Duric "I - bMM P[IFIL;Ipdi amounts at the revised bid amount, as described above under the heading "Adjustment of Principal Amount of Bonds and Bid Price for the Bonds." Vf, "Sag xrmce&S. If all bids are rejected, then the Bonds may be sold in any manner provided by law. Any bid presented after the time specified for receipt of the bids will not be accepted, and any bid not backed by the required good faith deposit will not be considered. The successful bid shall remain in effect until 5:00 p.m., Pacific Time, on the date set for the receipt of bids. M �,, �, m L=� 111"o -61, NOW I 10401161111111111 111161ill ; event, be paid by the City. Payment of any bond insurance premium and satisfaction of any conditions to the issuance of the municipal bond insurance policy will be the sole responsibility of the successful bidder. In particular, the City will not provide any opinions or enter into any agreements with respect to the provisions of any such policy. Failure of any municipal bond insurer to issue or deliver its policy will not in any way relieve the successful bidder of its contractual obligations arising from acceptance of its proposal for the purchase of the Bonds. The successful bidder must provide the City with the municipal bond insurance commitment and information with respect to the municipal bond insurance policy and the insurance provider within two business days following the award of the bid by the City. The City will require delivery, on or prior to the date of initial delivery of I of: (i) a certificate from the insurance provider regarding the accuracy and completeness of the information provided for inclusion in the Official Statement, (ii) an opinion of counsel to the insurance provider regarding the validity and enforceability of the municipal bond insurance policy, and (iii) a certificate with respect to certain tax matters, Rating. The City has received a rating from S&P Global Ratings as shown on the cover of the Preliminary OfficiaT Statement. The City will pay the fees for the rating. Any other ratings are the responsibility of the successful bidder. See "RATING" in the Preliminary Official Statement. Delivery of Bonds ft - payment of the purchase price to the City in immediately available federal funds, less the amount of the applicable good faith deposit. Closing is expected to occur on the date set forth on the cover page of the Preliminary Official Statement. If, prior to delivery of the Bonds, the interest receivable by the owners of such Bonds becomes includable in �* ross income for federal income tax %ur-toses or becomes sub ect to federal income tax other than as described in the Preliminary Official Statement, the successful bidder, at its option, may be relieved of its obligation to purchase the Bonds and, in that case, the good faith deposit accompanying its bid will be returned without interest. The Bonds will be delivered in "book -entry only" form in accordance with the letter of representations from the City to DTC. As of the date of the award of the Bonds, each successful bidder must either participate in DTC or clear through or maintain a custodial relationship with an entity that participates in DTC. The City will furnish to the successful bidder one CD-ROM transcript of proceedings-, additional transcripts will be furnished at the successful bidder's cost. Issue Price Information Within 24 hours of receipt of official award of the Bonds, the successful bidder shall advise the City and Bond Counsel of the initial reoffering prices to the public of each maturity (the "Initial Reoffering Prices"), for inclusion by the City in the final Official Statement for the Bonds. Prior to delivery of the Bonds, the successful bidder shall furnish to the City and Bond Counsel a certificate in form and substance acceptable to Bond Counsel relating to the reoffering prices for the Bonds, in substantially the form provided in Exhibit A to this Official Notice of Sale. - "106il'-wil WO wffilll� W U009 "TIM1101M _111100JUPRIM& IR 121 CUSIP Numbers It is anticipated that CUSIP identification numbers will be printed on the Bonds; however, neither the failure to print CUSIP numbers on any Bond nor any error with respect thereto will constitute cause for failure or refusal by the purchaser thereof to accept delivery of and pay for the Bonds. The City will request CUSIP numbers prior to the sale date for the Bonds. The charge of the CUSIP Service Bureau shall be paid by the successful bidder; however, all expenses for printing CUSIP numbers on the Bonds shall be paid for by the City. Bond Counsel Opinion The Cittj will furnish to the yurchaser of the Bonds the bond counsel o-�inion of Pacifica Law Grou-,p LLP Seattle - Washington, Bond Counsel, in substantially the form attached to the Preliminary Official Statement in Appendix A. Continuing Disclosure MRMWOURMI M- =maim 1511afil LU Me 1eq111U[11t!11L5 *1 Vdidyidpi ks1)k5)kjj TV 501:71-itieR aria m7unange uummissian Mull iocz-iz Rule"). See "CONTINUING DISCLOSURE UNDERTAKING" in the Preliminary Official Statement. Closing Documents I fit" I I eAi ne. MCI regarding Bond Counsel's form of opinion or the information provided by or obtained from DTC or any entity providing bond insurance or other credit facility). A no -litigation certificate will also be included in the closing documents for the Bonds. Official Statement The Preliminw Official Statement is in a form deem . ed final by the City for the purgose of the Rule, but is subject bidder, at the City's expense, not later than seven business days after the City's acceptance of the successful bidder's proposal, in sufficient quantities to permit the successful bidder to comply with Rule 15c2-12. The successful bidder shall file, or cause to be filed, the final Official Statement with the Municipal Securities Rulemaking Board ("MSRB") within one business day following the receipt of the Official Statement from the City. The successful bidder also agrees: (i) to provide to the City, in writing, promptly after the acceptance of the bid, pricing and other related information, including initial reoffering prices of the Bonds, necessary for completion of the final Official Statement-, (ii) to disseminate to all members of the underwriting syndicate, if any, copies of the final Official Statement, including any amendments or supplements prepared by the City-, and (iii) to take any and all actions necessary to comply with applicable SEC and MSRB rules governing the offering, sale and delivery of the Bonds to ultimate purchasers, including without limitation, the delivery of a final Official Statement to each investor who purchases Bonds. Additional Information AdAtixnal information maW be obtained from the Cit�,'s Financial Advisor Public Financial Manavement Inc. �Nx telephone: (206) 858-5363; or by e-mail: sea-advisors@pfm.com). The Preliminary Official Statement may be obtained from i -Deal Prospectus, a service of i -Deal LLC, at www.i-dealprospectus.com, telephone (212) 849-5021. N iYA RORM I Mi-f•iyjwfllflmsffl M I *A: I 1 3111 W-11 I has acted as underwriter (the "Underwriter") in connection with the sale and delivery #f the City of Tukwila, Washington (the "Issuer") Unlimited Tax General Obligation Bonds, 2016 in the aggregate principal amount of $_ (the "Bonds"). 1, the undersigned, hereby certify as follows on behalf of the Underwriter: 1 . I am the duly chosen, qualified and acting officer of the Underwriter for the office shown below my signature; as such, I am familiar with the facts herein certified and I am duly authorized to execute and deliver this certificate on behalf of the Underwriter. I am the officer of the Underwriter charged, along with other officers of the Underwriter, with responsibility for the Bonds. Im NMZNM3� a. Based upon reasonable expectations and actual facts that existed on the Sale Date, the Underwriter reasonably expected that the first prices at which a substantial amount of each maturity • the a- W-1 4010 Ene respective yielas set i5n: 21 5(70111-tes anu sna Statement (together the "Initial Offering Prices"). The aggregate of the Initial Offering Prices is $ b. The Initial Offering Prices of the Bonds of each maturity (and stated interest rate) reflected the Awb��- 0#4-4�2% 12te-21-ve such offering prices were established by a bona fide public offering by the Underwriter to the General Public. C. As of the Sale Date, 100% of the Bonds of each maturity were actually offered to the General Public in a bona fide public offering for the Initial Offering Prices, and the Underwriter did not hold back any "xoj16*Affijg"# E q a L7 -R 11114 M MWA I r.] I I a ps 0 M A IV -;m Lei W -In" In I a r 114 1 a I YM E I I ga.ael I go W NEW ANAM Maturity Rate The Excepted Maturities were offered to the public at their respective Initial Offering Prices using the same marketing efforts as used in marketing all other maturities of the Bonds. Despite such efforts and due to Maturities at their respective Initial Offering ■ [3. As shown on the attached Schedules, the yield on the Bonds has been calculated to be %. For purposes • this certificate, we have computed yield as the discount rate that, when used in computing the pr- ' •. eld on the debt instrument.] [4. As shown on the attached Schedules, the weighted average maturity of the Bonds is years. For i ' Alill',W"Num-11, 11 IN I i low 16, 1 11111 I =3ROMIRRUM131 EM M 21 Ls1*1NR1uMj=*1r*M- M=* HOW ro =n, MUM Counsel. Provided that nothing herein represents our interpretation of any laws, and in particular, regulations under Section 148 of the Code, the Underwriter hereby authorizes the Issuer to rely on the statements made herein in OWN W -WO purposes. Capitalized terms used herein and not otherwise defined have the meaning ascribed to such terms in the Federal Tax Certificate to which this certificate is attached. Dated: [Underwriter] A-* is PARITY Result Screeti Page I of I ........... I'll I'll, . .. . . ..... re Summary ....... .. .. 1.111.11 , 1111111] ,m, PDST coming Overview I Coma 1, 36 p" p . . .. -------- Bid Results Tukwila $34,390,000 Unlimited Tax General Obligation Bonds, 2016 The following bids were submitted using PARITY0 and displayed ranked by lowest TIC. Click on the name of each bidder to seethe respective bids. Bi d de r Na m e _wrw qp II i 4i 1 J�P� Mordan Securities LLC lRobert W. Baird & Co., Inc. *Awarding the Bonds to a specific bidder will provide you with the Reoffering Prices and Yields, Oc 1981-2002 !-Deal LL(, All rights reserved, It dermas https:l,lwww.newissuehome.i-dea.l,cotiilParitylaspl'ji.iai.i.i.asp ?f'rame=---coiiten,t&page=parity... 11/30/1016 I I PARITY Bid Form Upcoming Calendar verview •esu t xcel I ............ I -E . . .... Morgan Stanley & Co, LLC - New York, NY's Bid Tukwila $34,390,000 Unlimited Tax General Obligation Bonds, 2016 For the aggregate principal amount of $34,390,000.00, we will pay you $38,185,389,09, plus accrued interest from the date of issue to the date of deliverv. The Bonds are to bear interest at the following rate(s)- Premium: $3,795,389.09 Net Interest Cost, $16,048125137 TIC: 3,585236 Time Last Bid Received On:1 1/30/2016 8:2952 PST This proposal is made subject to all of the terms and conditions of the Official Bid Form, the Official Notice of Sale, and the Preliminary Official Statement, all of which are made a part hereof. Bidder: Morgan Stanley & Co, LLC, New York, NY Contact: Daniel Kelly Title: Executive Director Telephone: 212-761-1541 Fax: 212-507-2510 Issuer Name.- City of Tukwila Company Name, https:Hxvww,newissttehome. i -deal, cojyi/I'Eirityi,'asp/niaiii.asp?franie=content&page=parity... 11J13 }/2016 Accepted By, Accepted By: Date: Date: C 1981-2002 i -Deal LLC, All rights reserved, littps://www,newissuetioi-r)e.1-deal.comll/ilaritylaspl'liiairi.asp"?fianle=conteiit&page=parity. Page 2 of 2 '11/30/2016 PARITY Bid Form Page I of 2 This proposal is made subject to all of the terms and conditions of the Official Bid Form, the Official Notice of Sale, and the Preliminary Official Statement, all of which are made a part hereof, Bidder: Raymond James & Associates, Inc., St. Petersburg , FL Contact: Robbie Specter Title: Managing Director Telephone: 727-567-1293 Fax: Issuer Name: City of Tukwila Company Name; https://www.newissuchoiTic.i-deal.c(.)mi'Parit,v'/asp/iiiail).asp"frame=-content&page--::parity... 11/30/2016 PARITY Bid Form Accepted Accepted Date: Date° Oc 1981-2002 !-Deal LLC, All rights reserved, Trademarks 1� https://ww wmewi ssueliome, i -deal. co ni/Parity/a sphnain. asp? frame:- con tent&page::::::parity... 11130/1-0 16 PARITY Bid Form aier4ar... J.P. Morgan Securities LLC - New York, NY's Bid Tukwila $34,390,000 Unlimited Tax General Obligation Bonds, 2016 1"n, WWW"1011011,_1 1103 A a a 11 r�xor. Way] E &I-10 r-Aton I A I otal Interest Uost; V55,3VIF, 44 6.3b Premium: $3 ' 331,060.49 Net Interest Cost: $161059,388A7 TIC: 3.611739 &-ft 'WO Sale, and the Preliminary Official Statement, all of which are made a part hereof. Bidder: J.P. Morgan Securities LLC, New York, NY Contact: Steve Mitacek Title: Vice President Telephone:212-834-7155 Fax: 212-834-6739 Issuer Name-, City of Tukwila Company Name'. Page I of 2 https://www,newissti/I ehome.1-deal.corii/Parity,/as-o,i'iii,,iiii.asn'�fraine=p =conteiit&pa.gearity... 11/301/-016 Page 2 oft Accepted By: ___ Accepted By: Date: Date: 0 1981-2002 i -Deal LLC, All rights reserved, Tridefitat* https:i'/'www.neN,vissiiehome.i-deal.coi-n/Parityiaspiniaiii.asp9f.'rariic=--cont(,ii.t&,page=parity.., 11/30/2016 Z 1111VIVINI IPZ#WX#Y-.Ma Total Interest Cost: $16,645,569.22 Premium: $1,111,78312 Net Interest Costi $15,533,786,10 TIC: 3.636974 Page I of 2 This proposal is made subject to all of the terms and conditions of the Official Bid Form, the Official Notice of Sale, and the Preliminary Official Statement, all of which are made a part hereof. Bidder: Robert W. Baird & Co., Inc,, Red Bank, NJ Contact: charles massaro Title: director Telephone: 732-576-4410 Fax: 732-576-4420 Issuer Name: City of Tukwila Company Name: https:i'INN,ww.iiewissuehODle.i-deal,c(.)iii.iParitvl",isplmai,i,.i.asp?franie:--::cojitent&page=parity... 11/30/201 r Page 2 of 2 Accepted By: Accepted By: Date-, Date-, OE 1981-2002 i -Deal LLC, All rights reserved, "Trac y"I'alk� https://www,newissueh(.)me. i -deal. corn/Parity/asp/ma in. a sp'?f'rame==coi.itent&pige:::-::pari I y... 11/30/2016 FVNVIWM�4 � Excel ingCalendar r1- v i e Result i -J, ' ' -,"' ......... . . . .. . .... group Global Markets Inc. - Los Angeles, CA's Bid �AwARtIrr, Tukwila $34,390,000 Unlimited Tax General Obligation Bonds, 2016 For the aggregate principal amount of $34,390,000.00, we will pay you $38,304,541 .56, plus accrued interest from the date of issue to the date of deliveN� The Bonds are to bear interest at the following rate(s): i otai interest uost: 4i2f,522,214b.63 Premium: $3,914,541 56 Net Interest Cost: $17,008,404,27 TIC: 3,776540 Time Last Bid Received n: 11130/2016 8:25:31 P T This proposal is made subject to all of the terms and conditions of the Official Bid Form, the Official Notice of Sale, and the Preliminary Official Statement, all of which are made a part hereof, Bidder: Citigroup Global Markets Inc., Los Angeles, CA Contact: Spencer Kam Title: Director Telephone: 213-486-8817 Fax: Issuer Name.- City of Tukwila Company Name: https://Nv�vw.iiewissuelioii-ic.i-(Ica].c(:)ml/l-'arii.Y./aspi�-.naiii.asp''f'rai-rie:---co.titent&pa.ge=parit)f... 11/30/2016 PARITY Bid Form Page 2 of 2 Accepted By: Accepted By: Date: Date', 01981-2002 i -Deal LLC, All rights reserved, Tademarks F , , — -- "" littps:llwww.newissuchome.1-deal.com!'Parity,lasplmaiii.asp'?fraiiie=cont.ent&page—parity... 11/30/2016 1110=111W "95= Upcoming Calendar .. ....... . Morgan Stanley & Co, LLC - New York, NY - New York, B A Wrrr, Tukwila $34,390,000 Unlimited Tax General Obligation Bonds, 2016 For the aggregate principal amount of $34,390,000,00, we will pay you $38,185,389.09, plus accrued interest from the date of issue to the date of delivery. The Bonds are to bear interest at the following rate(s): Premium: $3,795,389.09 Net Interest Cost: $16,048,252.37 TIC: 3.585236 Time Last Bid Received On- 11/30/2016 8:29 52 PST This proposal is made subject to all of the terms and conditions of the Official Bid Form, the Official Notice of Sale, and the Preliminary Official Statement, all of which are made a part hereof, Bidder: Morgan Stanley & Co, LLC, New York, NY Contact: Daniel Kelly Title.- Executive Director Telephone -.212-761-1541 Fax: 212-507-2510 Issuer Name: City of Tukwila Company Name-, https://'w-Nvw.newissuclioiiie.i -deal. corn/Pacity/ sp/nlain,asp?frani.e=coDtent&page=pat-ity... 1111/30/2016 Page 2 of 2 Accepted By -- Accepted By: Date: Date, 01881-2002 i -Deal LLC, All rights reserved, it 0iornorIks https:fIAN-ww.iiewissuehome.i-deal.coiiilt.larity'aspf,"ni.aiii.,asp'?I.-'ranie-::;::coritentL�page--",::parity... 11/310/2016 Result I Morgan Stanley & Co, LLC's Reoffering Scale la AW Tukwila $34,390,000 Unlimited Tax General Obligation Bonds, 2016 Accrued Interest: $0.00 Gross Production: $38,291,130.50 01561-2002 i -Deal LLC, All rights reserved, fraden Bake https:llwww.iiewissuel)oiiie.i-cleal.coiiil'flarl.tylaspl'main.asp'?fiarne=conteiit&page=parity... 11/30/2016 l' $32,990,000 City of M, Washington ! r eral Oblio ! ! ! Final Term Sheet Issue Size: $32,990 ,000 Date: As of Settlement SettlementDated rt. - - December 22, 2016 Purchase Price: ,: $36,608 ,517.32Rating: Change 2017 MMMUNUMNOW. -. Principal Payment Date (Decernber 1) Principal Change 2017 $1,115,000 1rr 2018 1,240,000 (165,000 * 1,370,000 (170,000) 2020 310,000 (70,000) 2021 400,000 No Change 2022 1,005,000 30,000 2023 1,340,000 .1 err 2024 1,490,000 111 2025 1,560,000 (105,000 2026 1,640,000 (110,000) 2027 1,720,000 111- 2028 1,810,000 (105,000) 1 ■ 1,895,000 (90,000) 2030 1,990,000 (80,000) 2031 2,090,000 (60,000) 2032 2,200,000 i1a 2033 2,296,000 (15,000) 2034 2,395,000 No Change 2035 2,606,000 25,000 1 • 2,620,000 55,000 Maturity Bond Component Date Scrial Bonds: 1� s City of Tukwila, Washington Unlimited Tax General Obligation bonds, 2016 *Proposed Final Nurnbcrs* Amount Rule Yield Yield to 1'renliwn Price Maturity (-Discount) 12/0112017 1,115,000 5,000% 1.150% 103.594 40;073.10 12101J2018 1,240,000 5.0011% 1.450% 106,771 83,960.40 1210112019 1,370,000 5,000% 1.750% 109.277 127,094.90 12/01/2020 310,000 5,000% 1.950% 111,516 35,699.60 12/0112021 400,000 5.0009% 2.150% 113.292 53,168.00 12/01/2022 1,005,000 5.000% 2.320% 114,793 148,669.65 12/01/2023 1,340,000 5.000% 2.490% 115.977 214,091.30 12/01/2024 1,490,000 5.000% 2.670% 116-573 246,937.70 12/01/2025 1,560,000 5.000% 2.93CP/o 117.035 265,746.00 12/01/2026 1,640,000 5.000% 2.950% 117.550 297,820.00 12J0112027 1,720,000 5.000% 3.040% 116.706 C 3.180% 287,343.20 12/01/2028 1,810,000 5.0010% 3.160% 115.591 C 3.400% 282,197.10 12/01/2029 1,895,000 5.000% 3.230% 114.946 C 3.549% 283,226.70 12/01/2030 1,990,000 5.000% 3.290% 114.397 C 3.671% 286,500.30 12/0112031 2,090,000 5.000% 3.350% 113.852 C 3.779'/'u 289,506.80 12/01/2032 2,200,000 4.500% 3.62001% 107.290 C 3.882% 160,380.60 12/01/2033 2,295,000 4.500% 3.670% 106-859 C 3.941% 157,414.05 12/0112034 2,395,000 4.50601. 3.710% 106.516 C 3.988% 156,059.20 12/01/2035 2,505,000 4500% 3.740% 106.259 C 4.024% 156,797.95 12/01/2036 2,620,000 4.500%. 3.7700/a 106.003 C 4.0589'% 157,279.60 32,990,000 3,719,954.05 Dated Date 1212212016 Delivery Date 12122/2016 First Coupon 06/01/2017 Par Amount Premium Production Underwriter's Discount Purchase Price Accrued Interest =111100 =- 32,990,000.00 3,719,954,05 36,709,954.05 111.276005% -101.436.73 -03074779% 36,608,517,32 110.968529% 0115,113161 Nov 30, 2016 9:53 am Prepared by Public Financial Management, Inc. Page 3 $4,390,+$+ City of Tukwila, Washington .Jnlimite¥ <}< ?>ww# v a d a\¢+>¥< <<» Du lec. 1 Interest xmou f«> 2012 $1,260,000 2011 1,395,000 2079 1,540,000 2020 380,000 2027 400,000 022 975,000 023 1,500,000 2027 1,585,000 025 1,665,000 2026 1,750,000 027 1,835,000 2028 1,915,000 2029 1,985,000 2020 2,070,000 2021 2,150,000 032 <«2808 2033 2,310,000 2034 2,395,000 035 2,480,000 2036 »<6<### CUS|P Yield Price NumberM (1) Prefirninary; subject to change. (2) CUSIP is a registered trademark of the American Bankers Association. The CUSIP numbers herein are provided by the CUSIP Global Services, managed on behalf of the American Bankers Association by Standard and Poor's. CUSIP numbers are provided herein for the convenience of reference only. CUSIP numbers are subject to change. The City takes no responsibility for the accuracy of such CUSIP numbers. 6200 Southcenter Boulevard Tukwila, Washington 98188 (206) 433-1800 www.tukwilawa.gov CITY COUNCIL Joe Duffle Kathy Hougard Kate Kruller Thomas McLeo• De'Sean Quinn , — a 0 Fk'r�lsj I[:jM Ell Neill BOND COUNSEL Pacifica Law rou•LLP FINANCIAL ADVISOR Seattle, Washington (206) 858-5363 sea-advisors@pfm.com Fe M) "M M 0 M M. Finance Director City Attorney I In 03 OFFICIAL NOTICE <]F SALE ------------------------------------------vii DESCRIPTIONOFTHE BONDS ......................................................................................................................... 1 General ---------------------------------------------------'1 Authorization................................................................................................................................................... i Registrationand Payment .............................................................................................................................. 2 RedemptionProvisions ................................................................................................................................... 2 Purchase......................................................................................................................................................... 3 Failure0oPay Bonds ...................................................................................................................................... 4 Defeasance..................................................................................................................................................... 4 PURPOSE............................................................................................................................................................. 4 Sources and Uses ofFunds ........................................................................................................................... 4 SECURITY FOR THE BONDS -----------------------------------------'4 CITY TAXING AUTHOR[TY-------------------------------------------. 5 PropertyTax ................................................................................................................................................... 5 RetailSales and Use Taxes ........................................................................................................................... 6 UtilityTaxes .................................................................................................................................................... 7 PROPERTYTAX LIMITATIONS ........................................................................................................................... 7 UniformityRequirement .................................................................................................................................. 7 Limitations unRegular Property Taxes .......................................................................................................... 7 PROPERTY TAX ASSESSMENT AND C(JLLECTKOWPROCEDURES--------------------. 9 AeoeaaedVa|uation---------------------------------------------. 9 Current and Historical Assessed Valuation and Property Tax Levy Rates and Amounts for the City ---1D GENERALOBLIGATION DEBT ......................................................................................................................... 12 Authorization ofDebt --------------------------------------------12 DebtCapacity Computation .......................................................................................................................... 14 Direct andEatimatedOxedappingDebt----------------------------------. 15 Debt Service Requirements ----------------------------------------'16 FutureFinancing ........................................................................................................................................... 16 DebtPayment Record .................................................................................................................................. 18 CITYFUNDS AND ACCOUNTING ..................................................................................................................... 1G City Investments and Investment Policy ....................................................................................................... 17 Historical General Fund Operating Results .................................................................................................. 19 Statement ofRevenues, Expenditures and Changes inFund Balances ..................................................... 1Q General Fund Budgets -------------------------------------------2O THECITY ............................................................................................................................................................ 21 GENERAL AND ECONOMIC INFORMATION ................................................................................................... 27 TAXMATTERS ................................................................................................................................................... 2Q CONTINUING DISCLOSURE UNDERTAKING .................................................................................................. 3D CERTAIN INVESTMENT CONSIDERATIONS ................................................................................................... 32 RATING............................................................................................................................................................... 33 LITIGATION........................................................................................................................................................ 33 FINANCIALADVISOR ........................................................................................................................................ 33 UNDERWRITING................................................................................................................................................ 33 m $34,390,000 * City of Tukwila, Washington for purchase of the above described bonds (the "Bonds") at 8:30 a.m. Pacific Time on November 30, 2016 or such other day or time and under such other terms and conditions as may be established by the City a communicated as described under "Modification; Cancellation; Postponem- -:• eBonds will be sold on an all -or -none basis. Bids must be submitted electronically as described herein. Bids must be submitted electronically via the Qualified Electronic Bid Provider in accordance with this Offici Notice of Sale. The City has designated PARITY8 as the Qualified Electronic Bid Provider for purposes receiving electronic bids for the Bonds. Electronic bids will be received via PARITYO until the time and date sale, and no bid will be accepted after that time. For further information about PARITYO including any fe charged, potential bidders may contact PARITY8 at (212) 849-5021. By designating a bidding service as Qualified Electronic Bid Provider, the City does not endorse the use of such bidding service. See "BIDDW INFORMATION AND AWARD - Submission of Bids" below. 411 bids nroneriv received will be considered and acted on bv the Citv bv 3:00 D.M. Pacific Time on the sale dat -1 0 so . -6 0.10121on IN 4HIP111 - NO, W - 08111110 1 1 -me-u • a 0 0 [tie] 1111111191111 regaraing M-U-650,0761nance kN5 aeuneu nerein), We DUHUS, Ine SeGUIIJ lnerL-TUr, c-irnlU Q1U1eF Mdl Modification; Cancellation; Postponement. M&K 61 Wo of- Wei 0 from the City's Financial Advisor, Public Financial Management, Inc., telephone: (206) 858-5363 or - .• • . •r . advisors@pfmcomFailure of any bidder to receive such notice by telephone, the Qualified Electronic B Provider, or i -Deal Prospectus will not affect the legality of the sale. Each bidder (and not the City or its Financial Advisor) is responsible for the timely delivery of its bid. The offici.; time will be determined by the City and not by any bidder or Qualified Electronic Bid Provider. * Preliminary, subject to change M Mar=. Due Due lec. 1 Amount* Dec. 1 Amount' 2017 $1,260,000 2027 $1,835,000 2018 1,395,000 2028 1,915,000 2019 1,540,000 2029 1,985,000 2020 380,000 2030 2,070,0011 2021 400,000 2031 2,150,0011 2022 975,000 2032 2,235,001 2023 1,500,000 2033 2,310,001 2024 1,585,000 2034 2,395,00f 2025 1,665,000 2035 2,480,0011, 2026 1,750,000 2036 2,565,000 M Security for the Bonds hopm -1 lm"r:zllmllllo, 14 111 MAIN of and interest on the Bonds as the same become �IuE� The full faith, credit and resources of the City have be �&�ab�y A6=;ft61 and interest. See "SECURITY" in the Preliminary • Statement. Bond owners do not have a security interest in particular revenues or assets of the City. The Bonds do n constitute a debt or indebtedness of the State of Washington (the "State") or any political subdivision there other than the City. See "SECURITY" in the Preliminary • Statement. Registration and Book -Entry Transfer System The Bonds will be issued as full r i r n ------------------ -To F57MRTT TAMMEMMEM 0 9 Ms Submission of Bids Bids for the Bonds are to be submitted electronically via the Qualified Electronic Bid Provider. Hard copy bids will not be accepted. By submitting a bid for the Bonds, such bidder thereby agrees to the. following terms and conditions: (i) If any provision in this Official Notice of Sale with respect to the Bonds conflicts with information or terms provided or required by the Qualified Electronic Bid Provider, this Official Notice of Sale, including any amendments provided to the Qualified Electronic Bid Provider and i -Deal Prospectus, shall control. (ii) The bidder is solely responsible for making necessary arrangements to access the Qualified Electronic Bid Provider for purposes of submitting its bid in a timely manner and in compliance with the requirements of this Official Notice of Sale (including any amendments provided to the Qualified Electronic Bid Provider and i -Deal Prospectus). (iii) The City has no duty or obligation to provide or assure access to the Qualified Electronic Bid Provider • any bidder, and the City shall not be responsible i:• proper operation of, • have any t• for, any delays, interruptions or damages caused by use or attempted use of the Qualified Electronic Bid Provider or any incomplete, inaccurate or untimely bid submitted by any bidder through the Qualified • Bid Provider. (iv) The City is permitting the use of the Qualified Electronic Bid Provider as a communication mechanism, and not as the City's agent, to conduct the electronic bidding for the Bonds. The Qualified Electronic Bid Provider is acting as an independent contractor, and is not acting for or on behalf of the City. (v) The City is not responsible for ensuring or verifying bidder compliance with any Qualified Electronic Bid Provider procedures. (vi) If a bid is accepted by the—r-AW through the Qualified Electronic Bid Provider and i -Deal Prospectus) and the information that is submitted electronically through the Qualified Electronic Bid Provider shall form a contract, and the bidder shall be bound by the terms of such contract. �J-tha Aza�t Electrtink-&t or of any contract between the successful bidder and the City unless that information is included in this Official Notice of Sale (including any amendments issued by the City through the Qualified Electronic Bid Provider and i -Deal Prospectus). B r T any amendments issued by the City through the Qualified Electronic Bid Provider and i -Deal Prospectus). Bids must be submitted electronically via the Qualified Electronic Bid Provider. Bids may not be withdrawn or revised after the time that bids are • Interest Rates Bid. Bids may specify any number of interest rates in multiples of one-eighth of one percent (1/8 of 1 percent) or one-hundredth of one percent (1/100 of 1 percent). All Bonds of the same maturity must bear interest at the same rate and no Bond shall bear interest at more than one rate. No rate of interest may exceed 5.0 percent. Premium and Discount No bid will be considered for a price that is less than 100.5 percent of the par value of the Bonds. Each maturitv must •- r -•:` principal amount for that maturity. For purposes of the preceding sentences, "price" means the price as calculated using the lesser of the yield to the redemption date, if any, or the yield to the maturity date. Good Faith Deposit The successful bidder for the Bonds shall deliver a good faith deposit in the amount of $350,000 to the City Finance Director. The good faith deposit must be paid in by federal funds wire transfer delivered no later than 90 minutes following the successful bidder's receipt of the verbal award. Wire instructions will be provided to the successful bidder at the time of the verbal award. The good faith deposit will be retained by the City as security for the performance of the successful bidder and shall be applied to the purchase price of the Bonds upon delivery of the Bonds to the successful bidder. Pending delivery of the Bonds, the good faith deposit may be invested for the sole benefit of the City. If the Bonds are ready for delivery and the successful bidder fails or neolects to com,,;,,Iete the �?urchase within 30 daNs followinV ccegtance of its bid thenod -faith de -,Posit shall be retained by the City as reasonable liquidated damages, and not as a penalty. and, in that event, the City may call for additional proposals. The City's actual damages may be higher or lower than the amount of such good faith deposit. Such amount constitutes a good faith estimate of the City's actual damages. Each bidder waives the right to claim that actual damages arising from such default are less than such • • • the Successful Bidder The bids for the Bonds will be considered by the City at the date and time set for sale. The Bonds will be sold to the bidder submitting a bid in conformance with this Official Notice of Sale that produces the lowest true interest cost to the City, based on the bid price, the interest rates specified in the bid, and the principal amounts identified in this Official Notice of Sale. The true interest cost will be the rate necessary, on a 30/360 basis and semiannual compounding, to discount the debt service payments from the payment dates to the date of the Bonds and to the price bid. The true interest cost calculations will be performed by the City's Financial Advisor, and the City will base its determination of the best bid solely on such calculations. The successful bidder for the Bonds will be bound to r)urchase the Bonds in the DrinCiDal amount. at such Dric YJTJ1-1 616114 RINWAIMISM I $1911INW111,041 11161161 911111MA1114 10110111110-10 111, 01 11 IM I C;AZOVU D10 aMUM, aS UeSMDeU aUUIJ_'Tnuer Me neaulng AUJISIMent UT rrincip Bonds and Bid Price for the Bonds." *%QL2AY APTmon. If all bids are rejected, then the Bonds may be sold in any manner provided by law. Any bid presented after the time specified for receipt of the bids will not be accepted, and any bid not backed by the required good faith deposit will not be considered. The successful bid shall remain in effect until 5:00 p.m., Pacific Time, on the date set for the receipt of bids. rN and Insurance; Rating su�cessf6l bid6r of its- contractual obligations arising from acceptance of its proposal for the purchase of the Bonds. The successful bidder must provide the City with the municipal bond insurance commitment and information with respect to the municipal bond insurance policy and the insurance provider within two business days following the award of the bid by the City. The City will require delivery, on or prior to the date of initial delivery of the Bonds, of: (i) a certificate from the insurance provider regarding the accuracy and completeness of the information provided for inclusion in the Official Statement, (ii) an opinion of counsel to the insurance provider regarding the validity and enforceability of the municipal bond insurance policy, and (iii) a certificate with respect to certain tax matters, Rating. The City has received a rating from S&P Global Ratings as shown on the cover of the Preliminary Official Statement. The City will pay the fees for the rating. Any other ratings are the responsibility of the successful bidder. See "RATING" in the Preliminary Official Statement. Delivery of Bonds payment of the purchase price to the City in immediately available federal funds, less the amount of the applicable good faith deposit. Closing is expected to occur on the date set forth on the cover page of the Preliminary Official Statement. r If nrior t 0 Aliao Ali a P_RGTV,4 -tw2p-il in the Preliminary Official Statement, the successful bidder, at its option, may be relieved of its obligation to purchase the Bonds and, in that case, the good faith deposit accompanying its bid will be returned without interest. The Bonds will be delivered in "book -entry only" form in accordance with the letter of representations from the City to DTC. As of the date of the award of the Bonds, each successful bidder must either participate in DTC or clear through or maintain a custodial relationship with an entity that participates in DTC. The City will furnish to the successful bidder one CD-ROM transcript of proceedings; additional transcripts will be furnished at the successful bidder's cost. Counsel of the initial reoffering prices to the public of each maturity (the "Initial Reoffering Prices"), for inclusion by the City in the final Official Statement for the Bonds. the form provided in Exhibit A to this Official Notice of Sale. U CUSIP Numbers It is anticipated that CUSIP identification numbers will be printed on the Bonds; however, neither the failure to by the purchaser thereof to accept delivery of and pay for the Bonds. The City will request CUSIP numbers prior to the sale date for the Bonds. The charge of the CUSIP Service Bureau shall be paid by the successful bidder; however, all expenses for printing CUSIP numbers on the Bonds shall be paid for by the City. Bond Counsel Opinion Washington, Bond Counsel, in substantially the form attached to the Preliminary Official Statement in Appendix A. Continuing Disclosure information and operating data and notice of certain events to the Municipal Securities Rulemaking Council pursuant to the requirements of paragraph (b)(5)(i) of Securities and Exchange Commission Rule 15c2-12 (the See "CONTINUING DISCLOSURE UNDERTAKING" in the Preliminary Official Statement. Closing Documents As a condition to the obli ation of the successful bidder to a liv r -Tn-e-UTrT In n iney7rere i ae, noi rinsie aing regarding Bond Counsel's form of opinion or the information provided by or obtained from DTC or any entity providing bond insurance or other credit facility). A no -litigation certificate will also be included in the closing documents for the Bonds. Official Statement mu bidder's proposal, in sufficient quantities to permit the successful bidder to comply with Rule 15c2-12. The successful bidder shall file, or cause to be filed, the final Official Statement with the Municipal Securities Rulemaking Board ("MSRB") within one business day following the receipt of the Official Statement from the City. The successful bidder also agrees: (i) to provide to the City, in writing, promptly after the acceptance of the bid, pricing and other related information, including initial reoffering prices of the Bonds, necessary for completion of the final Official Statement; (ii) to disseminate to all members of the underwriting syndicate, if any, copies of the final Official Statement, including any amendments or supplements prepared by the City; and (iii) to take any and all actions necessary to comply with applicable SEC and MSRB rules governing the offering, sale and delivery of the Bonds to ultimate purchasers, including without limitation, the delivery of a final Official Statement to each investor who purchases Bonds. Addonal Information Additional information may be obtained from the City's Financial Advisor, Public Financial Management, Inc. (by telephone: (206) 858-5363; or by e-mail: sea-advisors@pfm.com). The Preliminary Official Statement may be obtained from i -Deal Prospectus, a service of i -Deal LLC, at www.i-dealprospectus.com, telephone (212) 849-5021. CITY OF TUKWILA, WASHINGTON Peggy McCarthy Peggy McCarthy, Finance Director M EXHIBIT A DRAFT FORM OF I has acted as underwriter (the "Underwriter") in connection with the sale and delivery if the City of Tukwila, Washington (the "Issuer") Unlimited Tax General Obligation Bonds, 2016 in the aggregate principal amount of $_ (the "Bonds"). 1, the undersigned, hereby certify as follows on behalf of the Underwriter: 1 . I am the duly chosen, qualified and acting officer of the Underwriter for the office shown below my signature; as such, I am familiar with the facts herein certified and I am duly authorized to execute and deliver this certificate on behalf of the Underwriter. I am the officer of the Underwriter charged, along with other officers of the Underwriter, with responsibility for the Bonds. a. Based upon reasonable expectations and actual facts that existed on the Sale Date, t - Underwriter reasonably expected that the first prices at which a substantial amount of each maturity of e - t Lfat�& -0 LHAA�h fie] NE1101 1-wivi 1 11 . 11 . . . . . . . . . . ........ T .. - Statement (together the "Initial Offering Prices"). The aggregate of the Initial Offering Prices is $ b. The Initial Offering Prices of the Bonds of each maturity (and stated interest rate) reflected t ma . 2f such offering prices were established by a bona fide public offering by the Underwriter to the General Publi C. As of the Sale Date, 100% of the Bonds of each maturity were actually offered to the Gene Public in a bona fide public offering for the Initial Offering Prices, and the Underwriter did not hold back a 2ilurtsr4i-ksa �-- in excess of the Initial Offering Price for such maturity of the Bonds. d. As of the Sale Date, at least 10% of the principal amount of each maturity of the Bonds initial AVY L L L IRILZZA oleo i I AWTUM 0 101111110MIlIzE IN movu 1W Maturities at their respective Initial Offering Prices.] [3. As shown on the attached Schedules, the yield on the Bonds has been calculated to be %. For purposes of this certificate, we have computed yield as the discount rate that, when used in computing the present 4- a .. d.1 9 1 aW.1 M ......... —1 M —1—F. C nsel. Provided that nothing herein represents our interpretation of any laws, and in particular, regulations under Section 148 of the Code, the Underwriter hereby authorizes the Issuer to rely on the statements made herein in W51601011106OW", [oil 810ORNOW111 0 -F purposes. Capitalized terms used herein and not otherwise defined have the meaning ascribed to such terms in the •- -• Tax Certificate to which this certificate is attached. Dated: [Underwriter] 0 �' IM I Almoir-IMIM MNMU $34,390,000 - City of Tukwila, • maeTfffrurn, in Tax General Obligation Bonds, 2016 (the "Bonds"). This • Statement, which includes the cover •_•- •- cover page, the table of contents and appendices, provides information concerning the City and the Bonds. Capitalized terms not defined herein shall have the meanings assigned to them in the Bond Ordinance, as defined below. I-',' "916,900MG&M % M-610111111wo N"I'mo - - 0 0 K-11 0 0 poll 410641111:010611 1 0 0 W *a I [ (1$ 0 WIWI IN I I I ilia I 111wallia - 0 411m III i a lalmor v�K11-f-rcro review should be made of the entire Official Statement. The offering of the Bonds to prospective investors is made only by means of the entire Official Statement. 01 **91 Z412 9 Is on each June 1 and December 1, commencing June 1, 2017. The Bonds will bear interest at the rates and will mature on the dates and in the amounts set forth on the inside cover of this Official Statement. Interest will be calculated on the •_ • a :1 •< year consisting • twelve 30 -day months. I • I • I gm M"M City Council (the "Council") at a regular meeting on November 21, 2016 providing for the issuance and sale of the Bonds (the "Bond Ordinance"). See "CERTAIN INVESTMENT CONSIDERATIONS - Initiative and Referendum." The Bonds were approved by the City's voters at an election held on November 8, 2016, which authorized up to S77. 85,000 0,r bo -ids to fiTa-ice tWe cost •` HU -11110.4 1611111 W WN W__ ON UIUME I I I . F oil EM= tiections,79TrMUMMIT"OT eleCIIMS In"TUMIM7"" I CerElTicauYn 1"Mm to occur no later than November 29, 2016, prior to the expected iale date for the Bonds. The results and such certification will be reflected in the final Official Statement. • of • PercentageM Yes • 60.50% • 2,280 39.50 .... Preliminary, subject to change. Election results shown are as of 9:00 a.m. Pacific time on November 22, 2016 and are subject to revision and certification by King County Elections. Final certified election results will be reflected in the final • Statement for the Bonds. The Bonds represent the first series of bonds to be issued under the 2016 Authorization. See "GENERAL OBLIGATION DEBT - Future Financing." * Preliminary, subject to change. 0 WiTERIM - a 0 1 1 MIXIIIII WN SNAMMS .- Bond, and that Bond has been called for payment by giving notice of that call to the Registered Owner thereof. Defeasance In the event that the Clt in order to effect the! a ment retirement or red t' f Bond sets side in the Debt M principal, premium, if any, and interest from the Debt Service Fund or such special account, and such Bond shall be deemed to be not outstanding under the Bond Ordinance. The term "Government Obligations" is defined in the Bond Ordinance to have the meaning given in chapter 39.53 RCW, as it ma be amended from time to time. As currentl defined in that statute the term "Government Obl' t* a ions means IF any other provision of State law. UtIflileMA Sources of Funds The Bonds Par Amount of Bonds [Plys 4;rigiiinal lsc46 Pramiym/1-6ss kisctynt] Total Sources of Funds • I I Costs of issuance include legal fees, financial advisoi's fees, underwriting discount, rating agency fees and other costs incurred ij, coinection witik tYe issuance of tke Bonds. the prompt payment of such principal and interest. T e taxes, when collected, are required to be applied solely for the paid, satisfied and discharged. 0 lit excise taxes, utility taxes, property taxes, and other taxes. In some cases, State law specifies the purposes for which various taxes can be used. The City's major sources of General Fund tax revenue are its regular property tax levy and sales and use taxes. Additionally, the City levies utility taxes and other taxes which include gambling tax, excise tax, admissions tax, and penalties and interest. Neither the State or any municipal corporation of the State currently has the authority to or collects a tax on net income. 111IM01 -0 - I I - General Fund Tax Revenues by Source Fiscal Property Sales and Utility Other Total Year Taxes Use Taxes Taxes (1) Taxes (2) Taxes -�0-15 $14,323,133 $19,334,152 $6,080,388 $5,463,696 $45,201,369 2014 14,186,753 17,105,322 5,706,556 5,220,395 42,219,026 2013 13,757,092 16,520,856 5,566,851 4,771,091 40,615,890 2012 13,830,166 15,673,891 5,535,966 4,800,341 (3) 39,840364 2011 13,427,445 16,113,733 5,424,644 3,679,639 (4) 38,645:461 (1 (1) Includes taxes on City -owned utilities, which represent approximately 30-35 percent of Utility Tax revenue each year See "Utility Taxes" below (2) includes gambling tax, excise tax, admissions tax, full-time equivalent employee tax, and penalties and interest. (3) In 2012, the City received approximately $440,000 in delinquent gambling taxes. Additionally, a new casino opened in December 2011, resulting in higher gambling tax revenue in 2012 and thereafter (4) In 2011, the City instituted a per full-time equivalent employee tax on businesses. This tax was originally classified under "licenses and permits" in the City's audited financial statements, although in subsequent years it was classified as "other taxes. " For ease of comparison, the 2011 data in this table includes the $1.641 million of revenue resulting from this tax, but classified as "licenses and permits" in the City's audited financial statements. Source: The City's audited financial statements for each year 2011 to 2015 Property Tax WAG 111dy ue i5eu tur tile F I W genM7=( Rearless, MY z provide any priority of use. In general, regular property taxes do not require voter approval, though certain statutes authorizing limited purpose levies may require voter approval. Certain tax limitations may be exceeded upon voter approval. Excess Property Tax. Excess property taxes for cities are not subject to constitutional or statutory limitations as to rate or amount. but must be authorized bv at least a 60 Dercent aDDrovina vote in an election meetina minimum voter turnout waril w. raliffi-1141411a Wel"NOW"AMM400i ordered by a court of last resort. Excess levies for the repayment of unlimited tax general obligation bonds (such as the Bonds), must meet the minimum voter requirements set forth below under "GENERAL OBLIGATION DEBT — Limits of Indebtedness." 0 as provided in RCW 82.14.460. Revenue from the tax is to provide funding for the operation or delivery of chemical dependency or mental health treatment programs and services and for the operation or delivery of therapeutic court programs and services, including treatment services, case management, and housing that are a component of a coordinated chemical dependency or mental health treatment program or service. State law does not require distribution • these taxes to the City. Sales & Use Tax Streamlining Mitigation Payments. The State currently provides payments to certain jurisdictions to mitigate net losses in sales and use tax collections of local taxing jurisdictions resulting from the change to a destination -based system. Mitigation payments are distributed at the end of each quarter for the net loss experienced in the preceding quarter. For example, the first payments were made on December 31, 2008 for July through September (third guarter) 2008. Undercurrent State law, when a iurisdiction's "voluntarycompliance revenue" exceeds ma2= The City levies a tax on public utility businesses (the "Utility Tax"), which is based on gross receipts from service provided or revenues generated within the City. It may be collected from investor-owned utilities and utilities operated by the City. Legal authority to impose the tax on public utilities (other than electric utilities) owned by other municipal corporations is not settled. •- State law, the tax rate for electric, phone and natural • utilities is limited to six percent without voter approval; there is no limitation on tax rates on other utilities. The City collects a six percent utility tax • electricity, telecommunications, natural •. cable utilities, and solid waste. The City collects a 10 percent utility tax on revenue • City -owned stormwater, water, and sewer utilities. ••• Tax The City imposes a local option lodging tax at a rate of 1.0 percent on sales of hotel/motel rooms within the City. The City's t the State's 6.5 Dercent retail sales tax and therefore is not an additional tax to ff. M-FAI 10MOM Uniformity Requirement would be applied as the maximum permissible rate for the entire taxing district. 111M.. mur-rin M., LmrMWEEMM . I - property tax levies described below. Al OWAWIX Of 1104 19 1 1MVIR"111DIMIC.10111ar-Al ... Or.L"661- 0 The following table shows the current and historical assessed valuation, and regular property tax levy rates and levy amounts for the City from 2012 to 2016. This table does not reflect excess property tax levy rates and amounts for the Bonds, which will be collected beginning in 2017. The City's preliminary 2017 assessed valuation is $5,751,820,403, which is subject to change. Assessed Valuation and Regular Property Tax Levy Rates and Levy Amounts Tax Total2012 Assessed Regular Regular Year Valuation (1) Levy Rate Levy Amount T0_16 $5,395,325,1181 .• 2015 5,054,078,747:, 1.63 , 2014 4,756,373,688 2.97799 14,129,531 2013 4,649,191,308 63,807,600 1.18 Commercial Properties 4,675,629,743 2.95408 13,711,699 assessed valuation used for computationof 1-f' capacity. Equalto regular assesseda plus timberassessed valuation. Taxpayer Being Westfield Property - - Properties KIR Tukwila 050 • Qwest Corporation Eproperty Tax Inc. -. Icon Tukwila Owner -•• ArundelAnne + •ts LLC (Group Health) ShoppingBoeing Employees Credit Union Costco Property• •Procedures Type of Business Valuation 'k -IF. Aerospace $ 552,951,680 10.25% - - •. 5.49 Commercial,255,581 Properties .• Commercial Properties 87,805,800 1.63 Telecommunications :1 1.49 Commercial Properties 79,841,600 1.48 Commercial Properties 63,807,600 1.18 Commercial Properties 50,996,857 0.95 Banking,519,779 48,178,4110.89 Retail1 ! Total.82 1 • ;• 26.54% "PROPERTYwith detailed guidelines from the DOR, to comply with the statutory and constitutional rate and amount limitations. See • - of taxes to be ;o levied and collected. The tax roll is delivered to the Treasurer, another County elected fficial, by January 15 of each year. The Treasurer creates a tax account for each taxpayer and is responsible for the collection of taxes due for each account. All taxes are due and payable on the 30th of April of each year, but if the amount due from a taxpayer exceeds $50, one-half may be paid then and the balance no later than October 31 of that year. of delinquency until paid. In addition, a penalty of 3 percent is imposed on June 1 of the year in which the tax is due and 8 percent on December 1 of the year due. Penalties are credited to the account of the taxing district; interest on delinquent taxes is credited to the County's current expense fund. The method of giving notice of payment of taxes due, the Treasurer's accounting for the money collected, the division of the taxes among the various taxing districts, notices of delinquency and collection procedures are all covered by detailed statutes and regulations. Property taxes and all charges and expenses relating to the taxes constitute a statutory lien on the property taxed. The when the taxes are paid. By law, the Treasurer may commence foreclosure of a tax lien on real property after three years have passed since the first delinquency. ius of proceeds of a forced sale of the family residence or other "homestead property" for delinquent property taxes. The to the lien securing property taxes, while the State Attorney General has taken the position that it does not. See Algona v. Sharp, 30 Wn. App. 837, 638 P.2d 627 (1982) (holding that liens securing improvement district assessments are subject to the homestead exemption). ! !- Year of Ar: i Amount Year Levied k • •' 2015 rt 2014 14,058,979 '. 13,750,828 2012 -:.. ,220 ! !- Year of Ar: i 14,189,817 99.61 14,041,329 •• .87 13,751,281 100.00 13,705,389 100.00 The amount collected in the year of levy does not include supplements or cancellations of taxes or delinquent taxes collected in that year. (2) In process of collection. Source: King County Office of Finance f- •` ... - !NEC@= Til King County King County Rural Library District Port of Seattle The City King County Hospital District No. 1 State Schools Renton School District No. 403 Emergency Medical Services King County Flood Zone Tukwila Pool Metropolitan Park District - lmv=3 Rates Per $1,000 of Assessed Value $ 1.32976 0.47714 (2) 0.16954 2.71073 0.50000 2.28514 5.35495 0.28235 0.12980 0.14853 $13.38794 Statutory Regular Levy Authority Per $1,000 of Assessed Value $1.8000) 0.500 0.450 3.347(3) 0.750 3.600(4) n/a (5) 0.500 0.500 0.750 (1) A county may increase its levy up to $2.4 75 per $1, 000 of assessed value for general county purposes if the total levies for both the county and any road district within the county do not exceed $4.05 per $1, 000 of assessed value, and no other taxing district has its levy reduced as a result of the increased county levy. The County road district levy is imposed on pruperties located in unincorporated areas of the County. (2) Reflects regular (non -voted) levy rate of $0.42439 per $1,000 of assessed value and a voter -approved excess levy of $0.05275 per $1,000 of assessed value. (3) Pursuant to RCW 41.16.060, cities (like the City) that maintain a pre-LEOFF firefighterpension fund may levy an additional $0.225 per $1, 000 of assessed value for firefighter pension funding purposes. If not actuarially required for that purpose, such a city may use this levy for any other municipal purpose and therefore the City can levy up to $3.823 per $ 1, 000 of assessed value. Additionally, the City's levy authority is reduced by the actual rate levied by the King County Rural Library District, which levied $0.47714 per $1, 000 of assessed value in 2016, resulting in a maximum City levy rate of $3.347 per $1, 000 of assessed value for 2016. (4) Pursuant to RCW 84.5Z 043(l), the levy by the State may not exceed $3.60 per $1, 000 of assessed value adjusted to the State equalized value in accordance with a ratio fixed by the State Department of Revenue, which levy is to be used exclusively for the support of the common schools. (1) Voter -approved excess levy only. School districts do not have non -voted regularlevy authority. TheCityisservedbyand overlaps with five separate school districts. The representative levy code (2340) shown in the table reflects the portion of the City that overlaps with Renton School District No. 403. I L_CJ 4 =I zr_1 1901 :111 LCLA 9 L01 2 1 NJ 4 --1 i The power of the City to contract debt of any kind is controlled and limited by State law. All debt must be set forth in accordance with detailed budget procedures and paid for out of identifiable receipts and revenues. The budget must be balanced for each fiscal year. It is unlawful for an officer or employee of the City to incur liabilities in excess of budgetary appropriations. In an emer2ency the CU Council mw ut a Wan into e ct and authorize indebtidniji i e Jhj i ni WrW Wgg� such expenditures. valuation of the taxable property within the City at the time the indebtedness is incurred. See "PROPERTY TAX ASSESSMENT AND COLLECTION PROCEDURES" above. 0 1040#77-0 IBM 11[ille oil . 0, 00 n cerTa! I esseu ILWIe n nu an auuIllurial 2.5 percent OT assesseu value for open space, park facilities and capital facilities associ�ted with economic development. The minimum turnout must be at least 40 percent of City voters who voted at the last preceding State general election. If the ballot proposition approving issuance of voter -approved debt also approved the levy of taxes without limitation in amounts sufficient to repay those voter -approved bonds, then bonds will be payable from an excess property tax levy. See "PROPERTY TAX LIMITATIONS" above. The Bonds constitute voter -approved debt. Other than the Bonds, the City does not have any voter approved debt outstanding. Within the 2.5 percent of assessed value for general purposes, the City may, without voter approval, incur general oblWation indebtedness in an amount not to exceed 1.5 i2ercent of assessed v1lW1. AdgiJiln1114, within Jhj Q ilrilni Of abbebbeu Ta&le IOU general pirposes, Me tllj llldj', U15U WILHUM—MR11 dpp[U':dl, UHLUI lr]IU firldflUlly lUdbeb dHU conditional sale contracts if the total principal component of the lease and contract payments, together with the other non -voted general obligation indebtedness of the City, does not exceed 1.5 percent of assessed value. ZcX=Q "Szoy2: obligation bonds as compared to the payment of other general obligations of the municipality. Aggregate Debt Limitations. The combination of voter -approved and non -voted general obligation debt for general municipal purposes may not exceed 2.5 percent of the City's assessed valuation. The total of all general obligation debt for all purposes may not exceed 7.5 percent of the City's assessed valuation. Short -Term Obligations. Within the limitations described above, State law permits municipal corporations to borrow mone�A and issue short-term obli�ations for anoy lawful r , ' ",", . . . . . . _�h:q_rqeA-1w-f _r;vt_x III taxes, or grants or the sale of bonds, if the bonds hav been authorized by the governing body or the voters, as applicable. Short-term obligations issued in anticipation of taxes must be repaid within six months after the end of the fiscal year in which they are issued. As of November 1, 2016, the City had the following outstanding general obligation indebtedness, which is shown, together with the Bonds. Principal Date of Final Principal Amou Amount Issued Maturity Outstanding I Limited Tax General Obligation Bond, 2015 $ 5,825,000 12/1/2035 $ 5,825,000 Limited Tax General Obligation Note, 2014 (Taxable) 2,250,000 12/1/2017 2,250,000 Limited Tax General Obligation Bond, 2014 (Taxable) 3,850,000 12/1/2034 3,709,000 Limited Tax General Obligation Refunding Bond, 2013 (2) 1,000,000 12/1/2022 657,177 Limited Tax General Obligation Bonds, 2011 4,620,000 12/1/2023 3,780,000 Limited Tax General Obligation Bonds, 201 OB (Taxable 3,970,000 12/1/2024 3,970,000 Build America Bonds) South Correctional Entity Facility Public Development 6,898,800 1/1/2039 6,265,200 Authority Bonds, Series 2009A&B (1) Limited Tax General Obligation Refunding Bonds, 2008 6,180,000 12/1/2019 2,820,000 Total Limited Tax General Obligation Debt $29,276,377 The Bonds (3) $34,390,000 12/1/2036 34,390,000 Total General Obligation Debt (3) $63,666,377 (1) The South Correctional Entity Facility Public Development Authority issued bonds for a correctional facility (the "SCORE Bonds"). Pursuant to an interfocal agreement, the City is obligated to pay eight percent of the debt service on the SCORE Bonds, which obligation constitutes limited tax general obligation debt, secured by the City's General Fund. The amounts shown in the table above represent the portion of the outstanding principal amount that is allocable to the City's obligation. (2) The proceeds of this obligation were loaned to the Tukwila Metropolitan Park District (the WPD) to pay for improvements to the pool. The MPD is a separate taxing district Pursuant to the terms of an interfocal agreement, the MPD has irrevocably pledged to levy and collect taxes and other revenues in amounts sufficient to pay debt service on the 2013 Bonds. These amounts are required to be paid to the City not later than June I and December I of each year, so long as the 2013 Bonds remain outstanding. (3) Preliminary, subject to change. W Ifi- MJULMJLUI.L:&1471147VIIM* SIM0=1 #M- "41MMIN Mgrn ma P.m. ME ml I-M;M . Bonds. iwirwn@= #>v --- IIIff!Ta*1M0P=I iMMIMIlle 7-77, General Purposes 00 ?=0.I, , I - -0- . * 'OANF-TT. -W.Tgma. T 60 0.0,» -a Utility Purposes Debt Capacity (2.5% of Assessed Valuation) Utility Purpose Bonds Outstanding Remaining General Obligation Debt Capacity for This Purpose Parks and Open Space and Economic Development Purposes Debt Capacity (2.5% of Assessed Valuation) Park and Open Space and Economic Development Purpose Bonds Outstanding Remaining General Obligation Debt Capacity for This Purpose (1) Preliminary m&eabcmg MI. $29,276,377 34,390,000 $63,666,377 $_&63 666 37 I W$ w believes to be reliable, but the City has not independently verified the accuracy or completeness of such information. No person should rely upon such information as being accurate or complete. Furthermore, the amounts described i i TLI �TLT Direct anR Estimated Overlapping Debt As of November 1, 2016 2015 Assessed Valuation for 2016 Tax Year - $5,395,325,118 2016 City Population — 19,540 Direct Debt (calculated above) (1) $ 63,666,377 Estimated Overlapping Debt: The County $17,500,366 Port of Seattle 3,872,464 School Districts 22,983,841 King County Library 2,210, 25 Total Estimated Overlapping Debt (2) $ 46,567,197 Total Net Direct and Estimated Overlapping Debt (1) $110,233,574 Certain Ratios (1) Direct Debt to Assessed Valuation 1.18% Direct and Estimated Overlapping Debt to Assessed Valuation 2.04% Direct Debt per Capita $ 3,258 Direct and Estimated Overlapping Debt per Capita $ 5,641 Per Capita Assessed Valuation $ 276,117 0) Preliminary; subject to change. M Estimated overlapping debt is as of August 1, 2016. Sources: The City, King County Office of Finance and Depallment of Assessments, and the Port of Seattle BEIM= U9 Debt Service Requirements rJ111111 I I III III I I I III 1 111 111 1 111 111 111 11111•2 ", •I' � It - I Principal Interest Future Financing Following the issuance of the Bonds, the City will have approximately $42,995,000* of the 2016 Authorization remaining. The City anticipates issuing approximately $25 million of the 2016 Authorization over the next five years. The City may also issue approximately $22 million to $38 million of limited tax general obligation bonds for capital purposes over the next two years. The issuance of any such bonds is preliminary, subject to change, and has not been approved by the City Council. Additionally, the City periodically reviews its outstanding bonds for refunding opportunities and may issue bonds for refunding purposes if market conditions warrant. Debt Payment Record wdi-ilgill"s- ?vV oftpr obligatin-ts iv -t i66"4W�l - [oil [-7M 1 11 0 - I * 1 offelgrZ1911 r.1 KZ141612111 Kell lzi� Basis of Accounting. Basis of accounting refers to when revenues and expenditures or expenses are recognized in the accounts and reported in the financial statements. Governmental funds use the modified accrual basis of accounting and proprietary and fiduciary funds use the accrual basis of accounting. Under the modified accrual basis of accounting, revenues are recorded when susceptible to accrual, i.e., both measurable and available. For the City, available means expected to be received within 60 days of year-end. On the accrual basis, the revenue is recognized in the period in which the income is earned. M' -------------------- by qualified State depositories. The City may withdraw funds in their entirety on less than 24 -hours' notice. Authorized Investments for Bond Proceeds. In addition to the eligible investments discussed above, bond proceeds with average maturities of less than four years; municipal securities rated in one of the four highest categories; and money market funds consisting of the same, so long as municipal securities held in the fund(s) are in one of the two highest rating categories of a nationally recognized rating agency. Bond proceeds may also be invested in shares of money market funds with portfolios of securities otherwise authorized by law for investment by local governments (RCW 39.59.030). The following table shows cash and investments for the City as of August 31, 2016 (unaudited), and December 31, 2015 (audited). Cash and Investments Amount as of August 31, 2016 Banks and Savings and Loan Institutions $30,862,013 LGIP Investments 10,981,632 Non-LGIP InvestmentsM 7,359,662 Total Cash and Investments $49,203,307 ir. iro ildol IRM-NIPIIOV-,&� .4110111[s iro we fi1:14DftQ ��o VIS ffol 1 :111111111 @A I #N I Ls Lei 1 0 IlaORK M %EMU NOW91, _rz 1 .1 ffil M991111011111-1 7AM 12TA Welf - - MINIMUM 1, set by the Mayor and Council. The Council is responsible for, among other things, passing ordinances and resolutions, adopting the budget, and adopting general policies and goals for the City. The Council holds regular meetings two times a month and special meetings as needed. All meetings are open to the public as provided by law and agenda items are prepared in advance. WZE•� Allan Ekberg Joe Duffie Kathy Hougardy Kate Kruller Thomas McLeod De'Sean Quinn A- AMILTA .1 R. -t"AW 6 1 A , TIZINIKIP.1=1 Position Initially Elected May6ir- Novem.- eesident - .- November 1981 Council Member November 2007 Council Member Novem.- eembe - .- January 2016 (1) Council Member November 2008 (2) Council Member November 1987 (3) Council Member November 2005 Current Term Expires (1) Council Member McLeod was appointed to the position in 2016. (2) Council Member Quinn was first appointed to the position in 2008 and won election to his first full term in November 2009. (3) Council Member Robertson served from 1988 through 1995 and was re-elected in November 2003. 1_0 MTET_XM_11T_=9 �_Mffroll MO, 0 1 a I - 0 OEM r-mr-mum"im. &W-1 Court. M . Cline has twenty-three years of public service, including economic development, long-range financial planning, capital planning and financing, community consensus building and managing municipal departments. He is Mr. Cline holds a Bachelor's of Arts in Public Policy from Stanford University with Honors and Distinction and is credentialed by the International City/County Management Association. Peggy McCarthy, Finance Director. Ms. McCarthy was hired as the City's Deputy Finance Director in November 2008 and has been serving as the Finance Director since 2011. Prior to joining the City, Ms. McCarthy was the Financial Reporting Manager for the King County Housing Authority. Ms. McCarthy's experience includes over 14 years in municipal finance, as well as industry experience with a Fortune 500 company, and public accounting experience at Deloitte. Ms. McCarthy holds a Bachelor's Degree in Business Administration from Washington State University and graduated Summa Cum Laude with Honors. F4 Employees and Bargaining Groups • r •. •aining groups Teamsters Local Union No. 763, representing A ministra i e/ffT hnical, Professional Supervisory, Maintenance and Trades, and Program Managers; USW Police Non -Commissioned and the Police Commanders in November, 2016. Full -Time Year Equivalent 2016 347.85 2015 337.10 2014 334.48 2013 332.38 2012 333.13 • r •. •aining groups Teamsters Local Union No. 763, representing A ministra i e/ffT hnical, Professional Supervisory, Maintenance and Trades, and Program Managers; USW Police Non -Commissioned and the Police Commanders in November, 2016. ;zTlr4 • :J a WAN" 101111111M - M - Q"Q 4 0 lie 0 so a 0 0 1 9011141 2:3 01-11411 L-71 I IWO 4 iMUZ1111WHP 01111- - - !Rolploillaglllollo twa system (TERS"), trie Law Entorcement Ofticers and Fire Fighters Retirement System ("LLUFF"), 0. -he PuPblic 11ate yy Employees Retirement System ("PSERS"). Contributions • • employees and employers are based on gross wages. PERS and LEOFF participants who joined the system by September 30, 1977 are Plan 1 members. Those PERS participants who joined on or after October 1, 1977, are Plan 2 members, unless they exercise an option to transfer to Plan 3. PERS participants joining on or after September 1, 2002, have the irrevocable option of choosing membership in PERS Plan 2 or PERS Plan 3. LEOFF participants who joined on or after October 1, 1977, are Plan 2 members. PSERS has only one benefit plan, Plan 2. State law requires systematic actuarial funding to finance the retirement plans. Actuarial calculations to determine , oy e cua 11 1 t' e,l ElLo d I ee cont 'b t' eOfficeoftheStat A t I SA" anon artisanle �er an e n u ionsare re ared b th r"O - 1p 1111"Wo 00 1111111062161111W QW, WIN fro iT* 4A oil W Employees/Department Number • Union or Bargaining Group Represented Employees Contract Expires Teamsters Clerical/Maintenance/Supervisory 148 12/31/2016 • Association • Firefighters Firefighters 64 12/31/2016 Police Guild Police 71 12/31/2016 -♦ Steelworkers Police Non -Commissioned Officers 14 12/31/2016 Fraternal Order • Police Green River '• Commanders 4 12/31/2016 Valley Lodge 27 Total 301 ;zTlr4 • :J a WAN" 101111111M - M - Q"Q 4 0 lie 0 so a 0 0 1 9011141 2:3 01-11411 L-71 I IWO 4 iMUZ1111WHP 01111- - - !Rolploillaglllollo twa system (TERS"), trie Law Entorcement Ofticers and Fire Fighters Retirement System ("LLUFF"), 0. -he PuPblic 11ate yy Employees Retirement System ("PSERS"). Contributions • • employees and employers are based on gross wages. PERS and LEOFF participants who joined the system by September 30, 1977 are Plan 1 members. Those PERS participants who joined on or after October 1, 1977, are Plan 2 members, unless they exercise an option to transfer to Plan 3. PERS participants joining on or after September 1, 2002, have the irrevocable option of choosing membership in PERS Plan 2 or PERS Plan 3. LEOFF participants who joined on or after October 1, 1977, are Plan 2 members. PSERS has only one benefit plan, Plan 2. State law requires systematic actuarial funding to finance the retirement plans. Actuarial calculations to determine , oy e cua 11 1 t' e,l ElLo d I ee cont 'b t' eOfficeoftheStat A t I SA" anon artisanle �er an e n u ionsare re ared b th r"O - 1p 1111"Wo 00 1111111062161111W QW, WIN fro iT* 4A oil W 11111111 11117maill Moroni 0 • impli I III I I III I I 11!111 0 9 0 Expressed as a Percentage of Covered Payroll Employee city (1) PERS Plan 1 6.00% 9.21% Plan 2 4.92 9.21 Plan 3 Variable (2) 9.21 lll� Plan 1 0.00 0.18 Plan 2 8.41(3) 5.23 PSERS Plan 2 6.36 10.54 (1) Includes 0. 18 percent DRS administrative rate. (2) Rates vary from 5.0 percent minimum to 15.0 percent maximum based on rate selected by the PERS 3 member (1) The State also contributes 3.36 percent to this plan. In July 2014, the PFC adopted contribution rate increases to be phased in over three biennia, beginning with the 2015-17 biennium. For the 2015-17 biennium employer rates will be 11 percent for PERS Plans 1, 2 and 3 (net of DRS administrative fees) and employee rates for PERS Plan 2 will be 6.12 percent. Employee rates for PERS Plan 1 and 3 remain unchanged from the table above. The LEOFF 2 Board did not adopt a rate increase for the 2015-17 biennium. The rates adopted by the PFC and LEOFF 2 Board are subject to revision by the State legislature. The following table represents the aggregate pension amounts for all plans subject to the requirements of GASB Statement No. 68, Accounting and Financial Reporting for Pensions for the year 2015. Pension Liabilities $13,725,838 7ension Assets 6,275,313 Deferred Outflows of Resources 2,426,571 Deferred Inflows of Resources 4,023,184 Pension Expense/Expenditures 1,353,356 ANIT9 R-IRIME mi-lrz MOM - ga .41 1 pians compare Age Normal ("EAN") liabilities. The EAN cost method projects future benefits under the plans, using salary growth and other assumptions, and applies the service that has been earned as of the valuation date to determine accrued liabilities. The AVA is calculated using a methodology that smooths the effect of short-term volatility in the Market Value of Assets ("MVA") by deferring a portion of the annual investment gains or losses over a period of up to eight years. This helps limit fluctuations in contribution rates and funded status that would otherwise arise from short-term changes in the MVA. W NOUN 117`�11011- and economic assumptions and investment performance. In 2011, the State Legislature ended the future automatic annual increase, which is a fixed dollar amount multiplied by the member's total years of service, for most retirees in the PERS Plan 1 plan, which is expected to reduce the unfunded accrued actuarial liability in PIERS Plan 1. HIM! 01111871 111i New GASB Reporting Rules Funded Status ($ millions) TM=1 G Actuarial Actuarial PERS 1 Accrued Plan Liability PIERS Plan 1 $12,553 PIERS Plans 2/3 32,008 PSERS Plan 2 357 LEOFF Plan 2 8,838 New GASB Reporting Rules Funded Status ($ millions) TM=1 G Actuarial Actuarial PERS 1 Value of Accrued 6,202,533 Assets Liability/(Surplus) Funded Ratit $ 7,315 $5,239 58% 28,292 3,715 88 338 19 95 9,320 (482) 105 contribution rates that are set based on statutory assumptions. I WON. INOW - I sig-G&I is ertl @4 Lai, 951 Mortl W11L. 1 K-71 gig L-710 wig 1214FIVinum R1 WRNN IM IN WWI IM V-101 Molem I I I Oil I lip] IRS Lai A 4 1 L:Xwr� I Net Pension Liability 0 Liability (Asset) PERS 1 $7,100,255 PIERS 2/3 6,202,533 PSERS 2 9,628 LEOFF 1 (939,397) LEOFF 2 (5,335,916) 0 IOWA M1 beneficiaries. Membership is limited to fire fighters employed prior to May 1, 1970 when the LEOFF retirement system was established. The City currently has 10 members receiving benefits through this Plan. Under State law, the Firefighters' Pension Plan is provided an allocation of all money received by the State from taxes on fire insurance premiums, interest earnings, member contributions made prior to the inception of LEOFF and City contributions required to meet projected future pension obligations. The components of the City's net pension liability as of December 31, 2015 was $1,829,926, and a plan fiduciary net position of $1,416,506 for a funding percentage of 77.41 percent. In addition to pensions, many State and local governmental employers provide other post -employment benefits ("OPEB") as a part of total compensation to attract and retain the services of qualified employees. OPEB includes post -employment health care as well as other forms of post -employment benefits when provided separately from a pension plan. The Governmental Accounting Standards Board ("GASB") standard concerning Accounting and Financial Reporting by Employers for Post -Employment Benefits Other than Pensions ("GASB 45") provides for the measurement, recognition and display of OPEB expenses/expenditures, related liabilities (assets), note disclosures, and, if applicable, required supplementary information in the financial reports. &A WMAgwoli-i NIQW0 - WAIII&A-61 Q "* , _4 -1 110�10YIIM, �611WiW61W1W1=11WUN1WM11W=1 acivariai vaivauun We, LIM dULTanal The funded ratio is zero percent, because the City funds benefits on a pay-as-you-go • The City's annual OPEB cost is calculated based on the annual required contribution of the employer ("ARC"), an amount actuarially determined in accordance with the parameters of GASB 45. The ARC represents a level of funding liabilities over a period • thirty years. • the plan and changes in the City's net • • i ne Uty's annuaff-47WE670M, Me percenta_ the past four years were as follows: Fiscal Year Fiscal Year •n Contribution as a 12/31/2015 Determination •'f Net •' Obligation: OPEB Cost Annual Required Contribution $2,585,779 Interest on prior year Net OPEB Obligation 146,904 Adjustment to ARC 1452,441) Annual OPEB Cost •1 Contributions made (477,292) Increase in Net OPEB Obligation $1,802,950 Net OPEB Obligation — beginning of year $5,341,973 Net OPEB Obligation — end of year $7,144,923 i ne Uty's annuaff-47WE670M, Me percenta_ the past four years were as follows: Fiscal Year Annual Contribution as a Net • Ended OPEB Cost Percentage of OPEB Cost Obligation 2015 $2,280,242 21% $7,144,923 2014 •:, 54 5,341,973 2013 1,079,076 81 4,561,781 2012 1,122,304 36 4,361,460 99 900WARMWO #-. 0 (OR I I rel I L_t I III L_J� 7-m- OWT07.74; Actuarial Actuarial Unfunded Actuarial Covered Value of Accrued Accrued Liabilities Valuation Date Assets Liabilities (UAAL) January 1, 2015 $0 $29,538 $29,538 January 1, 2014 0 21,264 21,264 January 1, 2011 0 14,805 14,805 January 1, 2008 0 16,103 16,103 7-m- OWT07.74; is Management janlarTf-,1"56 VV_-W�2,1-���UP05e OT prollaing a pooAng MOURani5m 1U1 JUIFILIY PIRNR jointly self-insuring, and/or jointly contracting for risk management services. As of December 31, 2015, WCIA has a total of 175 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, public officials' errors or omissions, stop gap, and employee benefits liability. Limits are $4 million per occurrence self-insured layer, and $16 million per occurrence in the re -insured excess layer. The excess layer is insured by the purchase of reinsurance and insurance and is subject to aggregate limits. Total limits are $20 million per occurrence subject to aggregate sublimits in the excess layers. The board of directors of WCIA determines the limits and terms of coverage annually. Insurance covera, ro.,evert- automobile A�Asical dama�,,e� fidelito inland marine and boiler and machinero are purchased on a group basis. Various deductibles apply by type of coverage. Property insurance and auto physical damage are self-funded from the members' deductible to $750,000, for all perils other than flood and earthquake, and insured above that amount by the purchase of insurance. and loss analyses. WCIA contracts for the claims investigation consultants for personnel issues and land use problems, insurance brokerage, and lobbyist services. WCIA is fylly fyi-4alf �,y its mem�ars-,whi: make a?%Ayal assessmeAte-tn a �rps�ectiyely rate,1 W,,asis, as �tetermim� �y 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. 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 mmittee and aMoints a treasurer to orovideoeiLe-m-LwALqO-iLpr-Ito-n-to-Ltb--Q-Pip-nizato-n- The WCIA executive director reports to the executive committee and is responsible for conducting the day to day operations of WCIA. The City self -insures for unemployment benefits. This is budgeted each year and has not exceeded $60,000 per year. 2:-4 n -i ?r. Ovz2lzz� of the limited liability and historical cost. KJ UAAL as a Funded Covered Percentage of Ratio Payroll Covered Payroll % $132 0% 0 195 1 0 371 3 0 581 4 is Management janlarTf-,1"56 VV_-W�2,1-���UP05e OT prollaing a pooAng MOURani5m 1U1 JUIFILIY PIRNR jointly self-insuring, and/or jointly contracting for risk management services. As of December 31, 2015, WCIA has a total of 175 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, public officials' errors or omissions, stop gap, and employee benefits liability. Limits are $4 million per occurrence self-insured layer, and $16 million per occurrence in the re -insured excess layer. The excess layer is insured by the purchase of reinsurance and insurance and is subject to aggregate limits. Total limits are $20 million per occurrence subject to aggregate sublimits in the excess layers. The board of directors of WCIA determines the limits and terms of coverage annually. Insurance covera, ro.,evert- automobile A�Asical dama�,,e� fidelito inland marine and boiler and machinero are purchased on a group basis. Various deductibles apply by type of coverage. Property insurance and auto physical damage are self-funded from the members' deductible to $750,000, for all perils other than flood and earthquake, and insured above that amount by the purchase of insurance. and loss analyses. WCIA contracts for the claims investigation consultants for personnel issues and land use problems, insurance brokerage, and lobbyist services. WCIA is fylly fyi-4alf �,y its mem�ars-,whi: make a?%Ayal assessmeAte-tn a �rps�ectiyely rate,1 W,,asis, as �tetermim� �y 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. 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 mmittee and aMoints a treasurer to orovideoeiLe-m-LwALqO-iLpr-Ito-n-to-Ltb--Q-Pip-nizato-n- The WCIA executive director reports to the executive committee and is responsible for conducting the day to day operations of WCIA. The City self -insures for unemployment benefits. This is budgeted each year and has not exceeded $60,000 per year. 2:-4 n -i ?r. Ovz2lzz� of the limited liability and historical cost. KJ lei -1 0 =11WR # '191114110111 1.00 so amount Tor claims Inat nale Deen IBNR reserve. a .0 I - 1w; VA to cover expected claims fluctuations. Administrative costs were then added. General The City is located in King County, Washington approximately 12 miles south of the downtown area of the City of Seattle and 17 miles north of the City of Tacoma, at the intersection of Interstates 5 and 405. The City is adjacent to Seattle -Tacoma International Airport. The City encompasses nine square miles and is home to a major regional shopping center (Southcenter Mail). Population Source: Washington State Office of Financial Management Economic Indicators for the City and the County ...... . . . . . nFuumZrIn. - - - - Us= Boeing Company Group Health Cooperativ- • • ostco Wholesale King County Metro Boeing Employees Credit Union Nordstrom Real Time Staffing Services Inc. Red Dot Corp City of Tukwila Macy's Type of Business -•_- D. Center/Lab/Pharmacy Cash/Carry Warehouse Transit Operating Base Banking/Credit Uni- D-•.- Department Store Employment Placement aAzwrw� Municipal Government Department Store Employees (FTE) 7,144 1,550 807 500 499 483 363 352 334 280 Population Year Tukwila King County 2016 19,540 2,105,100 2015 19,300 2,052,800 2014 19,210 2,017,250 2013 19,160 1,981,900 2012 19,080 1,957,000 Source: Washington State Office of Financial Management Economic Indicators for the City and the County ...... . . . . . nFuumZrIn. - - - - Us= Boeing Company Group Health Cooperativ- • • ostco Wholesale King County Metro Boeing Employees Credit Union Nordstrom Real Time Staffing Services Inc. Red Dot Corp City of Tukwila Macy's Type of Business -•_- D. Center/Lab/Pharmacy Cash/Carry Warehouse Transit Operating Base Banking/Credit Uni- D-•.- Department Store Employment Placement aAzwrw� Municipal Government Department Store Employees (FTE) 7,144 1,550 807 500 499 483 363 352 334 280 ♦ Civilian Labor Force and Employment Annual Average Aug2016 Aug 2015 2015 2014 2013 2012 2011 1,215,349 1,178,571 1,177,297 1,161,113 •r1,108,838 3,472,727 3,461,42? r 1,125,808.. • .r - r •0 1,082,029 1,051,738 1,020,997 ! 52,763 52,307: ;•. :73 71,014 87,841 2,736 ,, 5.7% 6.1% 7.0% 8.1% 9.3% 3,645,713 3,543,814 3,544,242 • :. ,r 3,472,727 3,461,42? 'r 00.9 • .r - 2011 3,220,860 •r 3,140 ,1911 • 200,250 ;•. 243,900 282,306 321,239 2,736 ,, 5.7% 6.1% 7.0% 8.1% 9.3% Taxable Retail Sales King CountyTaxable Taxable Retail Sales Retail Sales Taxable retail sales for 2016 represents collections through the first quarter, which is the most recent data available from the Department of Revenue. Taxable retail sales for the first quarter of 2015 were $12,765,552,578 and $479,232,765, r Per Capita Personal Income Year Metropolitan Area • r M. .. 2013 55,692 M r: • .r - Taxable retail sales for 2016 represents collections through the first quarter, which is the most recent data available from the Department of Revenue. Taxable retail sales for the first quarter of 2015 were $12,765,552,578 and $479,232,765, r Per Capita Personal Income Year Metropolitan Area 2015 N/A 2014 $58,205 2013 55,692 2012 55,622 2011 52,040 King State .; County Washington Nationa' m City BuildingPermits il,'umber of King County Building Permits Permits $68,877 50,357 Year 65,990 Permits , 66,138 47,324 44,267 .0 ,876 44,197 42,453 m City BuildingPermits il,'umber of King County Building Permits Permits Number . Value♦ '' Year Permits Permits r$3,739,960,240 7,441,102 r 2,816,919,865 r2,414,075,573 r2,197,719,628 r,' 2,736 1,155,094,272 m City BuildingPermits il,'umber of Value of Permits Permits 38 $12,665,257 17 6,029,574 r 7,441,102 14 4,835,717 1,931,795 case, owners o Me i5onas may no e a I o exercise course of a proceeding. Legal proceedings to resolould be time-consuming and expensive, and substantial delays and/or reductions in payments could result. RATING on the market price of the Bonds. The City does not have any obligation to take any action, other than file a listed event notification, if the rating on the Bonds is changed, suspended or withdrawn. Act ("CERCLA") for sediment contamination within the Lower Duwamish Waterway Superfund site. While it is 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 potential liability will be low, possibly ranging up to $300,000. I PRIM, 10110- 11TOTIRMM: [0110 M: =-1 &MIMMINAM 101111:4NIN S tement for completeness or accuracy and will not offer an opinion concerning this Official Statement. FM-iT MM N] El W-3 11TA 6*01 J The Bonds are being purchased by _ (the "Underwriter"), at a price of $ . The Bonds will be re -offered at a price of $ The Underwriter may offer and sell the Bonds to certain dealers (including dealers depositing Bonds such initial offering prices may be changed from time to time by the Underwriter. KK FIDIR;K01 Uw- •F UAW - mallimmawrow. P. 11011 R. i MOWN No -01- q- b1mmmamwipAks s ! ! j "M KNO ft" 1-0, or any entity providing bond insurance or other credit facility). By: Peggy McCarthy, Finance Director 01 APPEADIA A FOR UMEM Re: City • Tukwila, Washington Unlimited Tax General Obligation Bonds, 2016 - Tle have acted as bond counsel to the City of Tukwila, Washington (the "City"), and have examined a certified transcript of the proceedings taken in the matter of the issuance by the City of its Unlimited Tax General Obligation Bonds, 2016 (the "Bonds"), dated as of the date hereof, in the aggregate principal amount of $ —, issued • to Ordinance No. (the "Bond Ordinance") • the City for the purpose • providing • to financc costs and/or reimburse the City for costs related to its public safety plan and paying costs of issuing the Bonds. Capitalized terms not otherwise defined herein shall have the meanings given such terms in the Bond Ordinance. The Bonds are subject to redemption prior to their stated maturities as provided in the Official Statemen! prepared in connection with the issuance of the Bonds. Regarding questions of fact material to our opinion, we have relied on representations of the City in the Bond Ordinance and in the certified proceedings and on other certifications of public officials and others furnished to us without undertaking to verify the same by independent investigation. The City has not designated the Bonds as .'qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code"). MM= MTnM UlItUlGelflent OT Ine rtgnis rerneuies U1 Me riuiue[s ana owners of Me EMU_, limited by laws relating to bankruptcy, insolvency, moratorium, reorganization or other similar laws of general application affecting the rights of creditors, by the application of equitable principles and the exercise of judicial discretio-t. In- low limited by laws relating to bankruptcy, insolvency, moratorium, reorganization or other similar laws of general application affecting the rights of creditors, by the application of equitable principles and the exercise of judicia'. discretion. 3. Both principal of and interest on the Bonds are payable out of annual levies of ad valorem taxes to be M I I L-71 IV LTV I M I PJ LZM I III Le M&TA IN �IZJPI I I I I M[;] I I a LOA w IQE�VLOJ I MPJ I I I L4M I Ir- I a; I J LI a If I (qV,:MW&2qJ L;JJ;J; III L7,1&1 I p 110 01;J0103 I I L: -Rs I I L M I - IMM- 1111101-0011 Fj. lor federal income tax purposes retroactively to the date of issuance of the Bonds. Except as expressly stated above, we express no opinion regarding any tax consequences related to the ownership, sale or disposition of the Bonds, or the amount, accrual or receipt of interest on, the Bonds. Owners of the Bonds should consult their tax advisors regarding the applicability of any collateral tax consequences of owning the Bonds. We have not been engaged nor have we undertaken to review the accuracy, completeness or sufficiency of the official statement or other offering material related to the Bonds (except to the extent, if any, stated in the official statement, and we ex.eress no o�ifinion relatirjj-tbeLetp_ or relatinj to the undertakinr -I bN the CitrA to �rovide onT�IF disclosure pursuant to Securities and Exchange Commission Rule 15c2-12. This opinion is given as of the date hereof and we assume no obligation to update, revise or supplement this hereafter • ZIMMMM zffqmri� �*Ml IM APPENDIX B i StatementsFederal' 1 I Report Published September 29, 201617 AE MHEMMUM City of Tukwila Tukwila, Washington � (911 lip 1pil I l i pl�pil�lilp�' � ':� I I It Il replM oir?fi—c'CMY'vT-fT=7"ffffffri=aiements ana compuance wi federal laws and regulations. l I In I- I A I Ital to U -B I I I [IM 111 Nl I I ml=- 12 Ufas-IMMORZA 111=11116 -Toll Insurance Building, P.O. Box 40021 0 Olympia, Washington 98504-0021 El (360) 902-0370 0 TDD Relay (800) 833-6388 EM Schedule Of Findings And Questioned Costs ................................................................................. 4 Summary Schedule Of Prior Audit Findings .................................................................................. 6 Independent Auditor's Report On Internal Control Over Financial Reporting And On Compliance And Other Matters Based On An Audit Of Financial Statements Performed In Accordance With Government Auditing Standards ....................................................................... 8 Independent Auditor's Report On Compliance For Each Major Federal Program And Report On Internal Control Over Compliance In Accordance With The Uniform Guidance .................. 11 Independent Auditor's Report On Financial Statements .............................................................. 14 FinancialSection ........................................................................................................................... 18 •......... ................ 117 Washington State Auditor's Office B-3 Page 3 I SCHEDULE OF FINDINGS AND QUESTIONED COSTS City of Tukwila King County The results of our audit of the City of Tukwila are summarized below in accordance with Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, andAudit Requirementsfor FederalAwards (Uniform Guidance). We issued an unmodified opinion on the fair presentation of the financial statements of the ate remainin maor fund and the ag reg orincioles aenerallv accevted in the United States MAMEM�` � ] BmEff,= Significant Deficiencies: We reported no deficiencies in the design or operation of internal control over financial reporting that we consider to be significant deficiencies. 111111111 !!1 Ilii Iii Ir!I 1� 11 11 111 11!11;� VITM RuI F2.T,IM= � Significant Deficiencies: We reported no deficiencies in the design or operation of internal control over major federal programs that we consider to be significant deficiencies. • Material Weaknesses: We identified no deficiencies that we consider to be material weaknesses. of its major federal programs. Washington State Auditor's Office B-4 Page 4 Identification of Major Federal Programs: 1110M with the Uniform Guidance. CFDA No. Program or Cluster Title 20.205 Highway Planning and Construction 20.500 Federal Transit Capital Investment Grants The dollar threshold used to distinguish between Type A and Type B programs, as prescribed by the Uniform Guidance, was $750,000. prom r �-§ 0 1 �-' SECTION III — FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Washington State Auditor's 0Jrice B-5 Page 5 City of Tukwila King County 1. 2I 4 5 t -r 'M1 5 This schedule presents the status of federal findings reported in prior audit periods. The status listed below is the representation of the City of Tukwila. The State Auditor's Office has reviewed the status as presented by the City. Audit Period: Report ReE No.: Finding Ref. No.: CFDA Number(s): I/l/2014 -12/31/2014 1015306 2014-001 1 M 20.500 Federal Program Name and Granting Pass -Through Agency Name: ital Investment King C Agency: Federal Transit — Capounty Grants - Deartment of Transportation p Finding Caption: The City did not have adequate internal controls to ensure compliance with federal suspension and debarment requirements for its Federal Transit program. Background: During fiscal year 2014, the City spent $371,027 in Federal Transit Capital Investment Grant ftinds. The City used these funds for the construction of the Tukwila Transit Center project. Federal grant regulations prohibit recipients from contracting with or making subawards to parties suspended or debarred from doing business with the federal government. For vendor contracts paid $25,000 or more, the City must ensure the vendor is not suspended or debarred. We reviewed two contracts totaling $190,611. One vendor, a local utility, was contracted to move its own underground utilities, to ensure safe operations in the transit center. The City did not believe this contract was subject to the suspension and debarment requirement. The other vendor was the architect of the project, who was hired for additional services at the end of the project. As the original contract was entered into previously and •.•'• with non-federal funds, the City did not realize that the additional work that was paid with the federal funds was subject to suspension and debarment requirement. Status of Corrective Action: Z Fully E] Partially El Not Corrected Finding is considered no Corrected Corrected longer valid Corrective Action Taken: The City reviewed it's contractingprocedures to ensure physical evidence exists demonstrating performance of one of the three compliance options listed in 2 CFR 180.300. The City developed a debarment certification that is now requiredfor all grants that involve federalfunds. We have a contract routingform that is requiredfor all contract. Theform lists the certification as a requirementfor all grants that involvefederalfunds. Theform is reviewed to ensure compliance with all requirements prior to final approval. Washington State Auditor's Office Page 6 B-6 Audit Period: Report Referencel' Finding Reference CFDA Number(s): I/l/2014 -12/31/2014 No.: 1015306 L No.: MI 4-002 197.044 Federal Program Name and Granting Agency:• Assistance to Firefighters Grant -Department of Homeland Security 4 he City did not have adequate internal controls to ensure compliance with tederal suspension and debarment requirements for its Assistance to Firefighters grant. i Background: During the fiscal year 2014, the City spent $334,898 in Assistance to Firefighters grant funds. The Assistance to Firefighters grant was used to purchase radios to upgrade the effectiveness and efficiency of communications. The City purchased the radios through the Department of Enterprise Services. The responsibility to ensure recipients are not suspended or debarred from federal programs is the City's responsibility. debarred. Status iff Cirrrective Action: Z Fully E] Partially E] Not Corrected E] Finding is considered no Corrected Corrected longer valid Cirxrcctive Acti,rn Taken: The City reviewed it's contractingprocedures to ensure physical evidence exists demonstrating performance of one of the three compliance options listed in 2 CFR 180.300. The City developed a debarment certification that is now requiredfor all grants that involve federalfunds. We have a contract routingform that is requiredfor all contract. Theform lists the certification as a requirementfor all grants that involvefederalfunds. Theform is reviewed to ensure compliance with all requirements prior to final approval. Washington State Auditor's Office Page 7 B-7 combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the City's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. As part of obtaining reasonable assurance about whether the City's financial statements are free from material misstatement, we performed tests of the City's compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, v,rovidin- - . . Dn comviiance with those yrovisions was not an— ob-*ective of our audit and accordingly, we do not express such an opinion. Iftv 7 to be reported under Government Auditing Standards. I I I I , MIUMI I I SO] 1111 Ill I The purpose of this report is solely to describe the scope of our testing of internal control and com�eiliance and the results of that testing City's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. However, Washington State Auditor's Office Page 9 B-9 this report is a matter of public record and its distribution is not limited. It also serves to disseminate information to the public as a reporting tool to help citizens assess governmen! Sam= 7q y /0-11 " TIGIM 14 Um M wa S 19 Washington State Auditor's Office Page 10 -10 City of Tukwila King County 9WIT1T"ATA1TA9M City of Tukwila Tukwila, Washington it110410-0111 We have audited the compliance of the City of Tukwila, King County, Washington, with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Compliance Supplement that could have a direct and material effect on each of the City's major federal programs for the year ended December 31, 2015. The City's major federal programs are identified in the accompanying Schedule of Findings and Questioned Costs. E= Management is responsible for compliance with federal statutes, regulations, and the terms ar?-'I conditions of its federal awards applicable to its federal programs. I Our responsibility is to express an opinion on compliance for each of the City's major federal programs based on our audit of the types of compliance requirements referred to above. We aeavrianec-wi&t au,&hk+ United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements Cost Principles. andAudit Reaquirementsfior Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal )roaram occurred. Washington State Auditor's Office Page 11 -11 An audit includes examining, on a test basis, evidence about the City's compliance with those requirements and performing such other procedures as we considered necessary in the Rff4TnM7rJTM- GlIffifew I$ two 19 1 �q In our opinion, the City complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major Management of the City is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the City's internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program in order to determine the auditing procedures that are appropriate in the circumstances for the i-%iiiA.),,ose of ex(11 iion on com(diance for each ma[or federal-Lcmerarn and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the City's internal control over compliance. A�&fiw&&Tq"4�. *7,vroi+n over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance rey,uirement of a federal -,tro-gram that is less severe than over compliance, yet important enough to merit attention by those charged with governance. Qvr *f 1iirfi*is:- kvd-lr-- first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. We did not identify any deficiencies Washington State Auditor's Office Page 12 B-12 in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Purpose of this Report The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. However, this report is a matter of public record and its distribution is not limited. It also serves to disseminate information to the public as a reporting tool to help citizens assess government operations. N KV4 0 MWAXIMM MM 91 �11 �-M 6, Washington State Auditor's Office -13 Page 13 City of Tukwila King County 11 1•1 -1 City of Tukwila Tukwila, Washington We have audited the accompanying financial statements of the governmental activities, the hi a 9,Mr k-i6wtYw41+�w#6d-naVP* of Tukwila, King County, Washington, as of and for the year ended December 31, 2015, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed on page 18. Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting Irindodes enerallp acceLaed in the United States of includes the design, implementation, and maintenance of internal control relevant to thil. whether due to fraud or error. rgmu�1�� 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 Washington State Auditor's Orice 8-14 Page 14 due to fraud or error. In making those risk assessments, the auditor considers internal control )[,ft)FwiA61f1 Z1442�V 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 Dqpiniion r overall presentation of the financial statements. k�"-ToRimm- - for our audit opinions. W =1 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, as of December 31, 2015 and the res(i,,ective chan�es in financial %sosition and. where a�@�abl�. cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Matters of Emphasis As discussed in Note I to the financial statements, the City adopted new accounting guidance, Governmental Accounting Standards Board Statement No. 68, Accounting and Financial Reportingfor Pensions — an amendment of GASB Statement No. 2 7 and Statement No. 7 1, Pension ,Tm- rum i" n fiI I Jmf? 1,- 0 4,,fy R. 41 " k & Im, A Statement No. 68. Our opinion is not modified with respect to this matter. I I I Accounting principles generally accepted in the United States of America require that the management's discussion and analys�ivages 19 through 35, budgetary-c�varison information on pages 104 through 105, pension plan information on pages 106 through I I I and information on postemployment benefits other than pensions on pages 112 through 113 be presented to supplement the basic financial statements. Such information, although not a part of the basic 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 Washington State Auditor's Office Page 15 -15 procedures to the required supplementary information in accordance with auditing standards about the methods of preparing the information and comparing the information for consistency 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. Mozz= 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 Schedule of Expenditures of Federal Awards is presented for purposes of additional analysis as required by Title 2 U.S. Code ofFederal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, andAudit Requirementsfor Federal Awards (Uniform Guidance). This schedule 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 basic financial statements. The information has been subjected to the ?uditing procedures applied in the audit of the basic financial statements and certain additional [6)rocedures, including comparing and reconciling such information directly to the underlyiny, 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. *1THER REPORTING REQUIRED BY GOVERNMENT AUDITING STANDARDS In accordance with Government Auditing Standards, we have also issued our report dated 14W -Fi �Jcl I vwlt, N' -f, our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial re , mn inni-g. and the results of that testing and not to i,lorting and co 1* Washington State Auditor's Office Page 16 B-16 integral part of an audit performed in accordance with Government Auditing Standards in considering the City's internal control over financial reporting and compliance. 1- 1 1 MUM 14 No M A 3 MMUIVEMIL7,11 off-MERMIM Washington State Auditor's Office Page 17 -17 FINANCIAL SECTION City of Tukwila King County January 1, 2015 through December 31, 2015 Statement of Net Position — 2015 Statement of Activities — 2015 Balance Sheet — Governmental Funds — 2015 Reconciliation of Governmental Funds Balance Sheet to the Statement of Net Position — 2015 Statement of Revenues, Expenditures and Changes in Fund Balance — Governmental Funds —2015 Reconciliation of Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balance to the Statement of Activities — 2015 Statement of Net Position — Proprietary Funds — 2015 Statement of Revenues, Expenses and Changes in Fund Net Position — Proprietary Funds —2015 Statement of •. •2015 Statement of - '• •n — Fiduciary Funds1 Statementof •es in Fiduciary Net Position Fiduciary •2015 Notes• Financial Statements2015 I i' na 1 a f Schedule of Revenues, Expenditures, and Changes to Fund Balances — Budget and Actual — General Fund — 2015 Notes to the Required Supplementary Information — 2015 Pension Plan Information — 2015 Other Post -Employment Benefit Information — 2015 Schedule of of •- •2015 Washington State Auditor's Office -18 Page 18 a ILI F-11 21 [a] F-11MMMM • Total net position, the amount by which total assets plus deferred outflow of resources exceed total liabilities plus deferred inflow of resources, equals $287 million. A total of 87.4 percent or $250.8 million of total net position is invested in capital assets such as streets, land, buildings, equipment, and other improvements. The remaining net position of $36.2 million is available for debt service, capital projects, and to meet the government's ongoing activities and obligations. • The City's net position decreased by $5 million. Governmental activities decreased by $7.2 million, and business -type activities increased by $2.2 million. The primary reason for the governmental decrease is due to a $9.6 million adjustment that was a result of implementing GASB 68. An additional decrease of $1.4 million was because the City's Component Unit was divested. The business -type activities increase is primarily due to fee increases to fund future capital projects offset by a $2.3 million adjustment that was a result of implementing GASB68 and a $757 thousand change in accounting principal related to depreciation. • As of the close of the current fiscal year, the City of Tukwila's governmental funds reported combined ending fund balances of $38.6 million, an increase of $7.1 million in comparison with the prior year. Approximately 29.5% of this amount ($11.4 million) is available for spending at the government's discretion (unassigned fund balance). • At the end of the current fiscal year, unassigned fund balance for the general fund was $10.9 million, or 22 percent of total general fund expenditures. • The City of Tukwila's total outstanding long-term debt increased by $7.1 million during the current fiscal year. This change is a combination of new debt issued for $10 million offset by principal payments on existing debt, increases in compensated absences, and increases in other post -employment benefits irganized so the reader can understand the City of Tukwila as an entire operating entity. The statements then proceed to provide an increasingly detailed look at specific financial conditions. Washington State Auditor's Office -19 Page 19 2) Fund financial statements 3) Notes to the financial statements Other supplementary information, in addition to the basic financial statements, is also contained in this report. This section of the Management's Discussion and Analysis is intended to introduce and explain the basic financial statements. M 1611 F1 M I 1=1 type activities are consolidated into columns which add to a total for the City. The focus of the Statement of Net Position is designed to be similar to bottom-line results for the City and its aovernmental and business-tvK)e activities. This statement combines and consolidates overnmental funds' current M. R11 P. 0 oil Rolo, 111111 .1 11 financial health. The Statement of Activities is focused on both the gross and net cost of various functions, including both governmental and business -type activities, which are supported by the City's general tax and other revenues. This is intended to summarize and simplify the user's analysis of the cost of various governmental services and/or subsidy to various business -type activities. The revenue generated by the specific functions (charges for services, 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. Governmental activities of the City include general government (executive, finance, legal, human resources, and ourt li et i I nv ronmen n micenviri—ingn ran i Fund Financial Statements entity with a self -balancing set of accounts used to account for specific activities or meet certain objectives. While business type), the Fund Financial Statements are presented by fund type, such as the general fund, special revenue funds and proprietary funds, with the focus on major funds. term and long-term revenues/financial resources and expenditures. The information in the governmental fund Washington State Auditor's Office Page 20 B-20 CITY OF TUKWILA: 2015 CAFR . MANAGEMENT'S DISCUSSION AND ANALYSIS 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. financial statements, reconciliations are provided. The reconciliation between the governmental fund Balance UFA Changes in Fund Balance and the government -wide Statement of Activities is found directly following the governmental funds' Statement of Revenues, Expenditures, and Changes in Fund Balance. 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 facilities (urban renewal) 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 the other governmental funds can be found in the combining statements later in this report. WEM-EM"A= PQUXkA21JAMC1, bJb-&VWAXnMk2-4 WO -6 -v -&-f 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. E0 dUCUMIL 1U1 YU121Ub d11U and services provided internally to various City departments. Enterprise funds report the same functions presented as business -type activities in the government-widn- statements, but in greater detail. The City's enterprise fund statements provide information on the City's thre6 utilities (water, sanitary sewer, surface water) as well as the City -owned golf course. **IWAWS41 City's various functions. The City uses internal service funds to account for its fleet of vehicles, and its insuranc�; premiums. Fiduciary Funds Fiduciary funds account for assets held by the City in a trustee capacity or as an agent for individuals, privatz organizations, other governments or other funds. Fiduciary funds are not included in the government -wide financia' statements because their assets are not available to support the City's activities. the accrual basis. As agency funds are custodial in nature, they do not include revenues and expenses. 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 at the end of the Basic Financial Statements section. Washington State Auditor's Office B-21 Page 21 CITY OF TUKWILA: 2015 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS M W-7 New V- Mv�.M2 L funds are presented in the section titled "Fund Financial Statements and Schedules." Mai ---- ----------- 1--, Mial-MIMIQ M QI 711"IM61-A 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, $5.4 million, or 1.9% represents resources that are subject to external restrictions on how they may be used. The remaining balance of $30.8 million, or 10.7% is unrestricted and may be used to meet the City's ongoing obligations to its citizens and creditors. Current and other assetso Capital assets, net of accumulated depreciati Total assets I 10111 QW -A I�66 M $74,640 $63,671 $17,629 $15,562 $92,269 $79,233 205,816 203,975 66,826 66,036 272,642 270,011 280,456 267,646 84,455 81,598 364,912 349,244 Deferred Outflows of Resources 2,576 457 288 Long-term liabilities 47,172 40,049 7,723 8,665 54,895 48,714 Other liabilities 18,770 7,385 2,531 985 21,302 8,371 Total liabilities 65,943 47,434 10,254 9,650 76,197 57,085 Deferred Inflows of Resources 4,187 604 34 Net position Net investment in capital assets 191,331 191,081 59,483 57,678 250,815 248,759 Restricted 5,446 3,974 0 430 5,446 4,404 Unrestricted 16,126 25,009 14,659 13,840 30,785 38,849 $292' $212,903 1-pt4ppip 66 $28TIU6 T5','A`,��,,�1292' '12 Washington State Auditor's Office Page 22 B-22 CITY OF TUKWILA: 2015 CAFIR MANAGEMENT'S DISCUSSION AND ANALYSIS activities. Examples of utility activities include: maintenance of water/sewer mains, pump and lift stations, storm drain flushing, and water meter reading. in unspent bond proceeds and an increase in taxes receivable. A significant property sale occurred within the City resulting in $1.1 million accrual of real estate excise tax revenue. The increase of $2.1 million in current and other assets for business -type activities is comprised of a net increase of $1.9 million in cash and investments. This increase results from a rate structure design in the utility funds that build reserves for major infrastructure replacement and improvement. The change in net position represents the increase or decrease in City net position resulting from its various activities. Revenues: Program revenues Charges for services $9,748 $8,554 $22,158 $19,884 $31,906 $28,438 Operating grants and contributions 893 2,563 184 - 1,077 2,563 Capital grants and contributions 6,432 8,053 2,040 1,548 8,471 9,602 General revenues Property taxes 14,320 14,871 - - 14,320 14,871 Sales and use taxes 19,334 17,105 19,334 17,105 Natural gas use tax - - - - Hotel/Nbtel taxes 678 597 678 597 Utility taxes 4,019 3,856 4,019 3,856 Interfund utility taxes 2,061 1,851 2,061 1,851 Business taxes 2,749 2,556 2,749 2,556 Excise taxes 5,321 3,513 5,321 3,513 State entitlements 1,844 1,736 1,844 1,736 Investment earnings 475 444 475 444 Mscellaneous 281 179 -- 281 179 Total revenues 68,156 65,878 24,381 21,432 92,537 87,310 Expenses: General government 8,042 10,289 - - 8,042 10,289 Public safety 29,403 29,293 29,403 29,293 Transportation 11,070 11,668 11,070 11,668 Physical environment 2,611 2,480 2,611 2,480 Culture and recreation 5,125 5,716 5,125 5,716 Economic environment 5,783 5,337 5,783 5,337 Interest on long-term debt 1,033 1,205 - - 1,033 1,205 Water/sewer - - 13,186 12,752 13,186 12,752 Foster golf course 2,087 1,946 2,087 1,946 Surface water - - 4,148 3,311 4,148 3,311 Total expenses 63,068 65,987 19,421 18,009 82,489 83,996 Increase (decrease) in net position before transfer: 5,088 (109) 4,960 3,423 10,048 3,315 Transfers (300) (600) 300 600 0 0 Change in net position before special item 4,788 (709) 5,260 4,023 10,048 3,315 Special Rem L957L (1,995) 0 0 J_ _ _(957 (1,995) Change in net position 3,831 (2,704) 5,260 4,023 9,091 1,320 Net position -beginning of period 220,064 238,121 71,948 69,351 292,012 307,472 Change in accounting principle- Retirement Costs (9,551) 0 (2,308) (557) (11,859) (557) Change in accounting principle 0 0 (757) 0 (757) Prior Period Adjustment (1,442) 06,3�53_0 (870) (1,442) (16,223) Net posriion Washington State Auditor's Office Page 23 B-23 CITY OF TUKWILA: 2015 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS Governmental activities ended the year with a $7.2 million decrease in the City's net position. Revenues to fund capital assets are recorded as program or general revenues in the statement of activities. However, asset purchases are not recorded as expenses in the year purchased and construction costs are not recorded as expenses in the year incurred. Instead, the costs are recorded as long-term assets and are depreciated over their useful life. The primary reason net position decreased was due to implementation of GASB Statement No. 68 and ft divestment of the City's component unit. Divestment of component unit $1.4 million. A special item representing the 2015 urban renewal motel purchase $957 thousand valuation reduction also reduced net position. Revenues from governmental activities increased $2.3 million from 2014 activity. The components and explanation if the increase follows. * Charges for services increased $1.2 million or 14.0% in 2015. Major reasons for the increase include permit fees revenue increase of $325 thousand over 2014 due to an increase in permit activity and the City received $350 thousand in 2015 that was associated with 2014 due to a change in billing methods. Additionally, the City reclassified $406 thousand of EMS levy revenue from general revenue to charges for services. The reclassification is because the City receives the levy revenue based on call volume rather than the tax base within the City limits. * Operating grants decreased by $1.7 million or 65.2%. Funding for several projects was received in 2014 for projects that were completed in 2014 or early 2015 including a federal grant for $989 thousand overlay and repair to East Marginal Way. Additionally, the City received $334 thousand to purchase radios for first responders. This grant was specific to 2014. * Capital grants and contributions decreased $1.6 million or20.1%. In 2014 the City received $3.5 million in grant funding for regional mobility projects that was specific to 2014. The reduction of this grant is offset by increases in funding for the Interurban Ave S project. * Sales and use taxes increased $2.2 million or 13.0% primarily due to an overall increase in services activity of $895 thousand, construction activity of $436 thousand, wholesale trade category •"'r thousand, and retail trade activity of $364 thousand. All other sales and use tax categories were up except for manufacturing, which decreased by $39 thousand. * Excise taxes increased $1.8 million or 51.5% primarily due to the accrual of real estate excise tax of $1.7 million. A significant property sale occurred in the latter part of 2015 which resulted in a one-time increase in revenue. Total governmental expenses decreased by $2.9 million. General government expenses decreased from 2014 by $2.2 million, or 21.8% primarily due to lower medical costs in 2015 than 2014. Transportation expenses decreased from 2014 by $726 thousand, or 6.2%. The City expensed costs related to overlay and repair that had previously been recorded as capital assets. The primary reduction was due to less depreciation due to this prior period adjustment. Culture and recreation costs decreased by $593 thousand, or 10.4% mostly due to the divestment of the City's blended component unit. 0 UML-0 21-71814 LWAVA LOA 41111110 11 rwIWIlrwtZ] Z111M Washington State Auditor's Orice Page 24 B-24 CITY OF TUKWILA: 2010 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS The next chart summarizes the governmental activity revenue by source, while the second one reflects the specific program revenues and related expenses for the various activities of the City. Gaps between specific program revenues and their related expenses are funded through general tax revenues. Otherrev nue 4% Charges, for services graflng grants ntri uflons I% Capita;;. .,rB rt' taxes 21% Washington State Auditor's Office Page 25 B-25 CITY OF TUKWILA: 2015 CAM _ MANAGEMENT'S DISCUSSION AND ANALYSIS Program Revenues and Expenses -Governmental Activities $30,000,000 $27,000,0 $24,000,000 $21,000,000 $18,000,000 $15,000,000 $12,000,000 $9,000,000 $5,000,000 $3,000,000, 1 t rya �a 0 de Al gel Business -Type Activities Program revenues Expenses Business -type net position increased by $2.2 million during 2015. Key components of this increase include: An increase in capital grants and contributions of $492 thousand. An increase in expenditures of $1.4 million. A change in accounting principle of $757 thousand to depreciate capital assets using the straight line method. A change in accounting principle of $2.3 million also resulted in a decrease to net position. The adjustment was due to the implementation of GASB Statement No. 63. ® $2.3 million or an 11.4% increase in charges for services primarily due to utility rate increase effective January 2015, and water and sewer hook-up fees on new construction. 0 Income before non-operating revenue/(expense), capital contributions, and transfers amounted to: Water fund: $ 757,554 ® Sewerfund: 1,657;567 Foster golf course fund: (604,795) Surface water fund: 965,559 Z2&05-8 Washington State Auditor's Office Page 26 CITY OF T.UKWILA: 2015 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS �MMLEMGMEOLOOMM'' course Alj/ am 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: Washington State Auditor's Of i,Tce Page 27 B-27 CITY OF TUKWILA: 2015 CAM MANAGEMENT'S DISCUSSION AND ANALYSIS $35,000,000 $30,000,000 $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 $0 Water Comparison of Total Net Position to Spendable Net Position Business -Type Funds *Spendable/Un rst N=Posilion *Total Net Position Surface water, Foster golf Course The following chart depicts the revenues and expenses for business -type funds: $2,000,0000 Is Water Sewer Surface Water Foster Golf Course: M Expenses i Washington State Auditor's Offjjtce B-28 Page 28 CITY OF TUKWILA: 2015 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS The purpose of the City's governmental funds is to report on near-term revenues/financial resources and expenditures. This information helps determine the City's financial requirements in the near future. Specifically, the fund balance is a good indicator of the City's financial resources. of $7.1 million or 22.5%. The increase is primarily due to bond proceeds of $6.1 million in the arterial street fund, $2.25 million draw on a line -of -credit in the facilities replacement fund, an increase in real estate excise tax in sales and use tax revenue offset by an increase in general governmental expenditures. These increases are also offset by the divestiture of the City's blended component unit. • General fund $834,256 • Arterial Street •' 3,676,871 • Local Improvement District No. 33 (3,255) • Facilities — Urban Renewal 528,092 • Other governmental funds 690,705 $5,726,669 principal payment and a $346,784 interest payment associated with the assessments, exceeded revenues by $3,255. ejrer-1111 I MORO, aeot selvice I Isana, Solernmenial TOM, special ! e I.LnU5 • • projects funds increased $500 thousand. i it -as WNW, 19011111119 1 1111614111"Vi -I -1 0 1 0 0 a 0 Washington State Auditor's Office Page 29 B-29 CITY OF TUKWILA: 2015 CAFIR ...........- MANAGEMENT'S DISCUSSION AND ANALYSIS �� lill ill illilil 11, Ill lillimillil 111 111111 !!!! ill! . Arterlat street fun 13% Ge, Governmentall Funds — Fund Balances ca,«6 P 1"; d eve t I o" e 4u n 2« iYashingtonState A udnor's Office B-30 Paps $5,000,000 Taxes $4,585,479 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 ($1,000,000) RETRINT 11 1111 1111TI; 111MITIVIR11 12 RMM• •� Intergovernmental ($93,120) addressed in the discussion of the City's business -type activities. General Fund Budgetary Highlights The City budgets biennially by adopting a budget at the end of the preceding biennium, and then making ad ' iustments as necessan, via bud budget amendments that occurred in 2015: M= �-� Rew budget fdMelly Day payout $220,000 Additional budget for Police and Fire overtime 510,000 Increase utilities budget 80,000 Increase budget related to grant revenue 111,046 Adjust budget to account for grant funding received for emergency radios 60,000 Washington State Auditor's Office B-31 Page 31 Net Revenue Increase: Grant revenue not budgeted during regular budget process 736,046 Increase plan review fees for consulting services 150,000 Increase in sales tax revenue 2,122,000 Reasons for the significant variances in the general fund between the final budget and actual results include: • Revenue from taxes were $776 thousand, or 1.8%, higher than budget. Property taxes decreased $71 thousand and sales and use taxes increased $245 thousand. In addition, there was a gain of 13 percent, or $331 thousand in gambling taxes and other taxes increased $207 thousand. • Intergovernmental revenue was $346 thousand, or 7% less than budget. The primary reason is the City received grant funds in 2014 that did not carry forward into 2015. • Charges for services was $432 thousand, or 17.5% higher than budget. The primary reason is because of increased permng activity. • Expenditures were below budget by $550 thousand, or 1.1%. Transportation costs were lower than expected due to the timing of capital outlay on projects that were delayed or where completion timelines extended. All other functions showed reductions in spending. 'r - TM Capiital Assets e1just I r-gi-Jal 14 In VA I g I 11-1111 &1-1 LOJ I Construction in Progress 26,133,182 16,718,203 7,247,963 4,200,272 33,381,145 20,918,475 Buildings 10,711,996 13,810,448 8,679,027 9,397,907 19,391,023 23,208,355 Other Improvements 5,933,158 6,775,474 48,145,336 49,607,584 54,078,494 56,383,058 Machinery and Equipment 6,811,474 6,841,516 407,530 484,324 7,219,004 7,325,840 Infrastructure 120,913,528 124,516,494 - - 120,913,528 124,516,494 T6tT, $205,816;152; $203,974948; $66,036,318.;$272;642;240=,$2 0,011;266'; More detailed information on capital assets is provided in Note 7 to the financial statements. Seneral capital outlay purchases added $196,588 in machinery and equipment and included various technology 2nd thermal imaging cameras totaling $62,710. Many of the projects in the Arterial Street Fund continue to be in the construction phase adding $7.5 million in construction -in -progress for the period. The major arterial street fund activities are comprised of the following: • Interurban Avenue South, $4.5 million • Tukwila Urban Center Pedestrian/Bicycle Bridge $1.3 million • Tukwila Urban Center Transit center $0.7 million Washington State Auditor's Office Page 32 B-32 CITY OF TUKWILA: 2015 CAFR MANAGEMENT'S DISCUSSION D• Boeing Access Road Bridge Rehabilitation $0.47 million Andover Park West $0.4 million ------------- iAIIIIIITI.� Ongoing Residential Street fund construction projects added $1,408,205 to construction -in -progress and include the following: • Thorndyke Safe Routes to School, $820,669 • 40 - 42n' Ave S, $321,663 • Cascade View Safe Routes to School, $127,961 • 42nd Ave S Roadside Barriers, $75,870 • Various other Residential Street Fund projects total $62,042 luwarnish Hill Preserve work in progress improvements and $11,936 for other park related projects. I• - FMM7fM-9-aM!ivi y in tne area OT M -MI Ities improvements proviaea an aaaitiona-r,�-72-2,-j-i-3ro-w-o-rri-r. progress costs for the year. I T•T- I in the utility funds comprise of the following: current period. LIE • �11- 1-0 * . so 6-6 llliiq• 12M C.111 05 for ineilaterMuRet Uns. SUMUG zlai utilities. The increase in outstanding bonds is due to the principal payments redeemed for the year netted against new debt of is million issued in 2015. The City currently maintains a rating of AA with Standard and Poor's, AA - with Fitch's Investor Service and Al with Moody's for its general obligation debt. The City also has $6.1 million in special assessment debt. Washington State Auditor's Office Page 33 B-33 CITY OF TUKWILA: 2015 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS General obligation bonds $ 23,057,714 $ 16,638,221 $ - $ - $ 23,057,714 $ 16,638,221 Revenue bonds - - 1,742,527 2,580,000 1,742,527 2,580,000 $ 23,057,,714 .,$ :16,638,221 $ 1,742,527 , $- 2,580,600,,,$ 14,800;241 F=rMT1T$r111Mff=- I The outlook for 2016 is positive. The economy in King County is showing steady signs of recovery and the City is in a good position to take advantage of the strong regional economy. The City of Tukwila has a small residential population, yet the City serves the regional economy and has become an economic powerhouse, providing jobs and revenue for the region and state. Several major pending developments will have significant impacts on the future of Tukwila's economy: In 2015, developers broke ground on 1,11'ashington Place, a 19 -story structure comprising 370 residential units and 180 hotel rooms. The building will be the tallest between Seattle and Tacoma and the first multi- family residential housing in Tukwila's Southcenter District. Given its walkability to high capacity bus, commuter rail, retail, dining, and entertainment, the project is projected to be a catalyst for additional transit - oriented development. In 2014, the City completed construction of a new transit center in the heart of the Southcenter District on Andover Park West. The Transit Center provides a safer, expanded, high-quality bus stop with shelters, larger bus pullouts, improved lighting, sidewalks and landscaping. The transit center serves numerous King County bus routes including the RapidRide F line. Just as this project helped attract Washington Place, it will attract additional future development. Washington State Auditor's Orice Page 34 B-34 G ove mmental,Acti%Aties�,, ti N es 8t: h , er long tdrm,debU - . A6ofl2/31115"As 6fl2/31/14� As of 12/31/15' As of 12/31/14 4 As of, 12/31/15: ' M,',bf-1 2131/14 Public Works Trust Fund Loans $ - $ - $ 5,646,459 $ 5,742,867 $ 5,646,459 $ 5,742,867 Other Post Employment Benefits 7,144,923 5,341,973 - - 7,144,923 5,341,973 Employee leave benefits 3,860,472 3,740,161 334,004 306,441 4,194,476 4,046,602 Due to other governments 6,265,200 6,650,400 - - 6,265,200 6,650,400 "$,,97,270,95,! 1,78,1,842' F=rMT1T$r111Mff=- I The outlook for 2016 is positive. The economy in King County is showing steady signs of recovery and the City is in a good position to take advantage of the strong regional economy. The City of Tukwila has a small residential population, yet the City serves the regional economy and has become an economic powerhouse, providing jobs and revenue for the region and state. Several major pending developments will have significant impacts on the future of Tukwila's economy: In 2015, developers broke ground on 1,11'ashington Place, a 19 -story structure comprising 370 residential units and 180 hotel rooms. The building will be the tallest between Seattle and Tacoma and the first multi- family residential housing in Tukwila's Southcenter District. Given its walkability to high capacity bus, commuter rail, retail, dining, and entertainment, the project is projected to be a catalyst for additional transit - oriented development. In 2014, the City completed construction of a new transit center in the heart of the Southcenter District on Andover Park West. The Transit Center provides a safer, expanded, high-quality bus stop with shelters, larger bus pullouts, improved lighting, sidewalks and landscaping. The transit center serves numerous King County bus routes including the RapidRide F line. Just as this project helped attract Washington Place, it will attract additional future development. Washington State Auditor's Orice Page 34 B-34 • 4 A . u "I pirm g rAwm 61 landscaping, and property restoration in spring 2016. The City has invested significant resources into improving the health and safety of the Tukwila International Boulevard neighborhood and catalyze new development. In 2012 the City executed an agreement 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 (including at least 320 for seniors), a police neighborhood resource center, retail shops, and a community plaza. The developer started site work such as grading and utility infrastructure in 2015 and will start construction on the mixed- use buildings in 2016. The library is under construction and will be completed in 2016. Ell "MINOWN11411140 M"Im.61111f Will IM111 .712MrMqM$1G11LGj"GL7_"y z][CollaM (GAHIZZANd I I t�711UGPJ NJ 101 M Moi men 11TIMMMM111IRMSUM -mill Washington State Auditor's Office Page 35 B-35 CITY OF TUKWILA: 2015 CAFR BASIC FINANCIAL STATEMENTS CITY OF TUKWILA, WASHINGTON STATEMENT OF NET POSITION DECEMBER 31, 2015 ASSETS: Cash and cash equivalents $ 22,681,952 $ 12,293,611 $ 34,975,562 Investments 9,259,008 2,636,502 11,895,510 Taxes receivable 6,906,384 789 6,907,173 Other receivables 1,100,074 1,637,441 2,737,515 Due from other governmental units 2,857,124 659,327 3,516,452 Inventory of materials and supplies 13,837 62,402 76,241 Restricted cash and cash equivalents 2,442,097 82,006 2,524,103 Notes receivable 6,266,537 257,016 6,523,553 Real property held for resale 7,645,000 7,645,000 Investment in joint ventures 9,193,002 - 9,193,002 Non -depreciable capital assets 61,445,996 9,594,193 71,040,189 Depreciable capital assets (net of accumulated depreciation) 144,370,156 57,231,894 201,602,050 Net Pension asset 6,275,313 - 6,275,313 DEFERRED OUTFLOWS OF RESOURCES: Deferred loss on refunding 390,874 46,323 437,196 Deferred outflows related to pensions 2,185,306 241,271 2,426,577 as, _TotifbeforreO�s_ ,Resourc287,58 '2,676.180'"�', x,863;773' LIABILITIES: Accounts payable 2,035,021 125,563 2,160,584 Accrued wages and benefits payable 1,562,433 118,718 1,681,151 Accrued interest payable 339,069 18,113 357,182 Unearned revenue 460,282 12,450 472,732 Other liabilities 2,742,814 161,245 2,904,060 Bonds and other debt payable Die w ithin one year 2,774,337 759,117 3,533,454 Die in more than one year 44,397,994 6,963,873 51,361,868 Net pension liability 11,630,656 2,095,180 13,725,836 :n65 947 76 9 866 ' 425 -1 DEFERRED INFLOWS OF RESOURCES: Deferred inflows related to pensions 3,677,005 346,180 4,023,185 Business taxes received in advance 510,226 - 510,226 :'TdtalDeferrb 'Inflows6i'Fia 6urces 4' 87 1 ;346180; �x 4,53341 NET POSITION: Net investment in capital assets 191,331,156 59,483,424 250,814,581 Restricted for: Debt service 1,707,618 - 1,707,618 Tourism promotion 623,120 623,120 Arterial street improvements 2,421,047 2,421,047 Drug investigation and enforcement 7,239 7,239 Land and park acquisition, development 135,616 135,616 Fire improvements 551,434 - 551,434 Unrestricted net position 16,125,592 14,658,912 30,784,504 3r�`21i 2 902,822 $ 4 ,,;;741,42,336= The notes to the financial statements are an integral part of this statement Washington State Auditor's Office B-36 Page 36 CITY OF TUKWILA: 2015 CAFR BASIC FINANCIAL STATEMENTS CITY OF TUKWILA, WASHINGTON STATEMENT OF ACTIVITIES For the Year Ended December 31, 2015 PRIMARYGMEIMENT Taxes Property taxes $ 14,320,085 $ Governmental activities Retail sales and use taxes 19,334,152 19,334,152 Hotel/motel taxes 677,971 677,971 Utility taxes General Government $ 8,042,254 $ 3,794,134 $ 93,898 $ $ (4,154,221) 2,749,140 $ (4,154,220.24) Public safety 29,403,206 1,754,856 358,798 1,843,634 (27,289,552) Unrestricted investment earning (27,289,552) Transportation 11,069,605 206,065 272,728 4,658,261 (5,932,552) Excess of revenues over expenses (5,932,552) Physical environment 2,611,297 - - 761,722 (1,849,574) - (1,849,574) Culture and recreation 5,125,227 644,283 54,542 1,011,554 (3,414,847) Change in accounting principle - pension costs (3,414,847) Economic environment 5,782,907 3,348,802 113,504 - (2,320,602) (1,441,532) (2,320,602) Interest on long-term debt 1,033,440 - - (1,033,440) (1,033,440) n IV Total Governme talActi 'Ities, _,:,�,,_�,63067935 40: 89 3477,0, .,(45,994,j "JAI5,994,788) BUSINESS -TYPE ACTIVITIES: Water 5,734,624 6,508,536 1,213,611 1,987,523 1,987,523 Sewer 7,451,612 9,064,173 209,180 1,821,741 1,821,741 Surface water 4,147,974 5,102,617 183,616 617,100 1,755,359 1,755,359 Foster golf course 2,086,586 1,482,288 - - (604,297) (604,297) General Revenues: Taxes Property taxes $ 14,320,085 $ $ 14,320,085 Retail sales and use taxes 19,334,152 19,334,152 Hotel/motel taxes 677,971 677,971 Utility taxes 4,019,288 4,019,288 Interfund utility taxes 2,061,098 2,061,098 Business taxes 2,749,140 2,749,140 Excise Taxes 5,321,281 5,321,281 State entitlements 1,843,634 1,843,634 Unrestricted investment earning 475,345 475,345 Miscellaneous 280,551 280,551 Total General Revenues.""- 7,77,7 7, 7 7 7 51 082,545,(`, 51,,082,545, Excess of revenues over expenses 5,087,756 4,960,326 10,048,083 before transfer and special item Transfers (300,000) 300,000 - Special Rem (956,798) (956,798) 926 r 9 091 285 W position - beginning 220,064,399 71,947,737 292,012,136 Change in accounting principle - pension costs (9,551,003) (2,308,254) (11,859,257) Change in accounting principle - depreciation (757,473) (757,473) Dvestment of Component Unit (1,441,532) - (1,441,532) W position -beginning restated 209,071,863 68,882,010 277,953,873 The notes to the financial statements are an integral part of this statement. Washington State Auditor's Office B-37 Page 37 CITY OF TUKWILA: 2015 CAFR BASIC FINANCIAL STATEMENTS CITY OF TUKWILA, WASHINGTON BALANCE SHEET GOVERNMENTAL FUNDS DECEMBER 31, 2015 ASSETS: Cash and cash equivalents $ 8,724,316 $ 2,187,700 $ 1,038,769 $ 1,300,301 $ 3,691,056 $ 16,942,142 Investments 5,240,755 - - - - 5,240,755 Taxes receivable 5,571,294 627,246 - 707,844 6,906,384 Other receivables 441,099 - 410,476 139,206 990,781 Due from other governmental units 216,131 1,147,114 - 1,493,879 2,857,124 Restricted assets: Cash and cash equivalents 8,406 2,421,047 12,644 2,442,097 Special assessment receivable - - 4,925,713 - 4,925,713 Notes receivable 1,340,824 - 1,340,824 Real property held for resale - 7,645,000 7,645,000 $ 21,542,825; % 6,383,107 .$;6,374,958;' $. 8,945,301<. &,; 6, ;629`."$,.49;290,820 LIABILITIES, DEFERRED INFLOWS AND FUND BALANCES: Liabilities: Accounts payable 604,183 1,057,320 9,714 302,754 1,973,971 Accrued wages & benefits 1,493,744 14,529 1,042 33,634 1,542,948 Unearned revenue 200,700 _ _ 259,582 460,282 Other liabilities 153,776 258,876 100,000 61,412 574,064 Total Gaff�i6es...,: = .: � 2 452,402 : ;7 ., ' 110756 1,265, Deferred inflow of resources Unavailable revenue -special assessment - 5,336,189 5,336,189 Business taxes received in advance 510,226 - 510,226 Unavailable revenue -property tax, other 249,390 249,390 -;. Total DefrTed hfCovr OJ Resaiiraes„759,67 �. a... , ' ` 5,336 1139, r 6;095;$06 Fund balance: Nonspendable 1,340,914 7,645,000 - 8,985,914 Restricted: hbteltmpteltax - - 623,120 623,120 Arterial street capital improvements 2,421,047 - 2,421,047 Drug investigation and enforcement - 7,239 7,239 Park and land acquisition/development 135,616 135,616 Fre improvements 551,434 551,434 Debt service guraranty fund - 668,849 668,849 Local Improvement Dstrict 1,038,769 - 1,038,769 Assigned: Residential street improvements - 819,161 819,161 Arterial street improvements - 2,631,336 - 2,631,336 Contingencies 5,587,275 - - 5,587,275 Land & park acquisition - 1,981,473 1,981,473 Facilities & urban renewal 1,189,545 - 1,189,545 General government improvements - _ 397,033 397,033 Technology 141,373 - 141,373 Public safety equipment 350,000 - 350,000 Debt service - 203,323 203,323 The notes to the financial statements are an integral partofthis statement. Washington State Auditor's Office Page 38 -38 CITY OF TUKWILA: 2015 CAFR BASIC FINANCIAL STATEMENTS CITY OF • .ZC3iV8&-?A'nTX• DECEMBER - Total governmental fund balances as reported on this statement $ 38,643,749 Capital assets used in governmental activities are not financial resources and therefore not reported in the Unavailable revenue reported for propertytax and other receivables funds. Unavailable revenue reported for special assessment 5,336,189 5,585,579 Non -depreciable assets 61,445,996 Long term liabilities due within one year Depreciable assets (net) 139,629,022 (55,699,438) Internal service fund assets 4,741,135 205,816,152 The net pension asset is not an available resource and, therefore, is not reported in the funds. 6,275,313 Deferred outflow of pension costs 2,147,396 Deferred inflow of pension contributions (3,622,610) (1,475,214) The City has an equity interest in two joint ventures. This equity interest for the provis ion of governmental services is not a current financial resource and therefore is not reported in the funds. 9,193,002 Revenue that was not collected witin the recognition period and therefore was not available to pay current liabilities: Unavailable revenue reported for propertytax and other receivables 249,390 Unavailable revenue reported for special assessment 5,336,189 5,585,579 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 (2,774,337) Long term liabilities due in more than one year (55,699,438) Accrued interest payable (339,069) Deferred outflow on refunding 390,874 (58,421,971) Internal service funds are used bymanagement to charge the cost of certain activities, such as health insurance and fleet maintenance, to individual funds. The assets and liabilities ofthese internal service funds are included in governmental activities in the statement of net position. 7,286,210 •♦. . • a. - f.:.,. '-�. cr ! '. • -� a •p . The notes to the financial statements are an integral part of this statement. Washington State Auditor's Office -39 Page 39 CITY OF TUKWILA: 2015 CAM BASIC FINANCIAL STATEMENTS REVENUES: Taxes $ 45,201,369 $ 1,400,104 $ $ $ 1,946,643 $ 48,548,116 Licenses and pernits 2,242,256 - - 2,242,256 Intergovernmental 4,626,463 4,788,489 2,424,932 11,839,883 Charges for services 2,896,446 121,485 917,317 3,935,248 Fines and forfeitures 261,457 - - 261,457 Investment earnings 163,618 9,677 296,304 868 4,878 475,345 Special assessments - - 650,415 - - 650,415 Miscellaneous 120,887 53,646 1,809 100,000 55,925 332,268 Tofal Revenu6s, 55,512 496 948 528 oo 86 3�9,' 66 80,284,989, EXPENDITURES: Current: General government 7,247,117 365,978 95,299 7,708,394 Public safety 28,973,651 - 61,514 29,035,165 Physical environment 1,919,306 15,922 1,935,228 Transportation 2,820,022 2,948,053 24,593 5,792,668 Culture and recreation 4,259,532 - 90,520 4,350,052 Economic environment 4,328,177 - 1,504,207 5,832,384 Debt service: Principal - 605,000 1,875,507 2,480,507 Interest - - 346,784 778,826 1,125,609 Capital outlay 196,589 7,583,236 - 3,646,449 11,426,274 .TotaiEipendiiures 48,744394 ,5 ' .""103 ',951,784 ,365,978 Excess (deficiency) of revenues dyer (Under)6cper4iires 5' S 29ij, Transfers in 500,000 1,700,000 - 3,433,846 5,633,846 Transfer out (5,433,846) - (500,000) - (5,933,846) Issuance of debt 5,825,000 2,250,000 8,075,000 Bond premium 309,758 - 309,758 Net change before Special Rem 834,256 3,676,871 (3,255) 1,484,890 690,705 6,683,467 Special Rem- asset valuation (956,798) (956,798) Net change m K6, fund balances '811 2 690 705 ,5 ,726,669 Fund balance - beginning 17,496,550 1,375,512 1,042,024 8,306,453 4,696,541 31,476,863 [Divestment of Component Unit - - - - - 1,440,218 Fund balance -beginning restated 17 The notes to the financial statements are an integral part of this statement. 32,917 Washington State Auditor's Office Page 40 B-40 CITY OF TUKWILA: 2015 CAFIR BASIC FINANCIAL STATEMENTS CITY • TUKWILA, WASHINGTOR TA mr-11".44011 P0111111:14i:117A Net change in fund balances per the Statement of Revenues, Expenditures, and Changes in Fund Balances $ 5,726,669 Amount reported as change in net position in the Statement ofActivities 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 11,426,274 Capital asset disposal (4,330) Depreciation Expense (excludes internal service fund depreciation which is reflected in internal seNce fund change in net position listed below) (7,260,550) Excess of Capital Outlay Over Depreciation Expense 4,161,394 The net effect ofvarious transactions involving the Citys pension plans are Reduction in pension liability and expense 1,228,219 they are not considered "available" revenues in the government funds. Decreases this year are for: Increase in pension contribution revenue 503,132 (77,783) Reduction in the Fireman's Pension liability and expense 14,483 1,745,834 The City has equity interests in two joint ventures. The equity interests for the provision of governmental Some expenses reported in the Statement of Activities do not require the use ofcurrent (143,093) services are not current financial resources and therefore are not reported in the funds. These activities consist of. Repayment of long-term debt is reported as an expenditure in governmental funds, but the repayment Increase in accrued interest 47,792 reduces long-term liabilities in the Statement of Net Position. In the current year, these amounts (66,613) Increase in compensated absences consist of. Increase in unfunded other post employment benefits (1,802,950) Bond principal retirement 2,480,507 Change In Net Position On The Statement Of Activities Amortization expense 110,990 2,591,497 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 (309,758) General Obligation Bonds issued (7,909,800) 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. 725,108 Because some revenues will not be collected for several months after the City's fiscal year ends, they are not considered "available" revenues in the government funds. Decreases this year are for: Miscellaneous receivables (77,783) Property taxes (65,101) Special Assessment (650,415) (793,299) Some expenses reported in the Statement of Activities do not require the use ofcurrent financial resources and therefore are not reported as expenditures in governmental funds. These activities consist of. Increase in accrued interest 47,792 Amortization ofdeferred charge on bond refunding (66,613) Increase in compensated absences (141,823) Increase in unfunded other post employment benefits (1,802,950) Total additional expense (increase) decrease (1,963,594) Change In Net Position On The Statement Of Activities $ 3,830,95811 The notes to the financial statements are an integral part of this statement Washington State Auditor's Office Page 41 B-41 CITY OF TUKWILA: 2015 CAFR BASIC FINANCIAL STATEMENTS CITY OF TUKWILA, WASHINGTON STATEMENT OF NET POSITION PROPRIETARY FUNDS DECEMBER 31, 2015 Current assets: 69,525 1,609,575 579,783 2,346,230 1,416,567 3,364,962 Cash and cash equivalents $ 3,845,268 $ 5,917,392 $ 762,664 $ 1,768,287 $ 12,293,611 $ 5,739,809 Investments 2,116,492 520,010 - - 2,636,502 4,018,253 Taxes receivable - - 789 - 789 - Other receivables 466,570 891,448 5,077 274,346 1,639,231 109,294 Due from other governmental units 390,795 1,617 - 266,915 659,327 - I ventory Inventory of materials and supplies 4 - 62,402 - 62,402 13,836 Current assets restricted 62,330 92,301 241,271 37,910 Deferred Loss on Refunding - Cash and cash equivalents 15,700 5,559 66,306 - 82,006 - Total Curienj'Assets, 61834,825 7330,41X 897,239:',,-, 2,309,448,,`� 171�7,P,PPB, 9,881,193 Noncurrent assets: Notes receivable Capital assets Land Building Other improvements Machinery and equipment 257,016 257,016 87,347 69,525 1,609,575 579,783 2,346,230 1,416,567 3,364,962 6,627,496 1,875,395 13,284,419 19,851,205 14,586,442 3,559,992 42,643,402 80,641,041 - 802,138 1,242,767 94,786 49,776 2,189,467 14,897,544 Less: accumulated depreciation (10,514,341) (7,884,494) (5,759,485) (14,724,712) (38,8133,033) (10,156,409) Construction in progress 2,551,709 241,921 - 4,454,333 7,247,963 - Total capital assets (net of 476,002 276,365 541,271 801,542 2,095,180 329,212 accumulated depreciation) 14,194,624 11,621,122 6,132,364 34,877,977 66,826,087 4,741,135 Due to other governments 717,275 2,196,886 .6;432,3 4, 1,11 34 35, Toial is"146 2�1,929,449, 19,208,605 ` 7 4 P, N63046Z' TotStCisbiltes Deferred Outflows of Resources . ;'1,3,903165„ 728,517„ 4 Deferred Inflow s of Resources Deferred pension 54,814 31,826 62,330 92,301 241,271 37,910 Deferred Loss on Refunding 12,044 28,720 - 5,559 46,323 - 6te1 Deferred Qatf us., Res; ppices" NET POSITION: 60,W i32,330 g '287 0 594',�' LIABILITIES: Nat investment in capital as sets 12,941,256 8,139,154 6,132,364 Current Liabilities 59,483,424 4,741,135 Unrestricted 6,083,812 7,181,169 141,620 Accounts payable 43,179 34,454 5,164 42,767 125,563 61,051 Accrued w ages and benefits 24,732 15,135 29,958 48,894 118,718 19,485 Accrued interest payable 2,778 8,148 - 7,187 18,113 - Unearned revenue 4,771 - - 7,679 12,450 - Other current liabilities 54,952 32,853 61,376 12,065 161,245 867,500 Due to other governments 95,080 233,436 - 270,953 599,468 - Compensated absences 14,826 - 14,826 Revenue bond payable 37,664 89,790 17,379 144,823 Total Cur , rant Liabilitise, 26�,l 45 42q,,641 - PS,4 �7' _11 I , 1195206- Noncurrent liabilities: Reserve for unreported claims - - - 1,301,250 Revenue bonds payable 415,403 990,576 - 191,724 1,597,704 - Net pension liability 476,002 276,365 541,271 801,542 2,095,180 329,212 Compensated absences 120,765 10,697 90,749 96,968 319,178 - Due to other governments 717,275 2,196,886 - 2,132,830 5,046,991 Noncurrentiti0i" 3�1?4,p 4 P, N63046Z' TotStCisbiltes 1992,591; . ;'1,3,903165„ 728,517„ 4 Deferred Inflow s of Resources Deferred inflow pension earnings 78,648 45,663 89,432 132,437 346,180 54,395 si 448sou rcas- I 7 8 , "' `�� 111�:-, 'AS�qq� - , - ` - 89 ,432 32437 346,180 , 54395, , ,/, " -,' ",/, , - , NET POSITION: Nat investment in capital as sets 12,941,256 8,139,154 6,132,364 32,270,650 59,483,424 4,741,135 Unrestricted 6,083,812 7,181,169 141,620 1,252,312 14,658,912 7,286,210 025 t,/' 7$,142338.....8 $ 10 The notes tothe financial statements are an integral part ofthis statement. Washington State Auditor's Office Page 42 B-42 CITY OF TUKWILA: 2015 CAFR BASIC FINANCIAL STATEMENTS CITY OF TUKWILA, WASHINGTON SmkTMENT v--wm4m, milaim—'A PROPRIETARY FUNDS FOR THE YEAR ENDED DECEMBER 31, 2015 OPERATING IREVENUES: Charges for services $ 6,484,031 $ 9,020,998 $ 1,371,325 $ 5,085,974 $ 21,962,328 $ 8,847,111 Other operating revenue 465 - 110,466 225 111,156 112,715 Totpi 6psratih0'ftve6'u'es' 6,484,496 ',9 020,19" 8,959,826; OPERATING EXPENSES: Operating & maintenance 3,590,010 5,418,374 1,518,249 1,846,454 12,373,086 7,137,230 Administrative and general 645,770 538,327 173,909 801,518 2,159,525 441,581 Taxes 933,085 1,033,643 67,190 570,177 2,604,094 - Depreciation and amortttation 528,077 373,087 327,238 902,492 2,130,894 785,736 Total 0 ratin peris6s,', pe 36 4j 0,64 2 -,8,364,548,, Operat 787 554 65 567,95, 7,�27 't",79 �966, '2,805,885'777-5 NON-OPERATING IREV ENUE (EXPENSE): Investment earnings 24,040 43,175 952 18,905 87,073 96,407 Interest expense (37,683) (88,181) - (27,333) (153,197) - Gain (loss) on disposal of capital assets (455) (2,487) (2,942) 33,422 Other non-operating revenue - 183,616 183,616 - TbtaJ,No-n7O perating qnuejExpense) (40,0O6),'�' _,;497,,',172,70 ',�,1114,550 129,829�1 Income (Loss), Be!ore'Con'tribulioni &Transfers 12 1 6 12, EAM29_7' ' 1 725.`108' Capital contributions 1,213,611 209,180 - 617,100 2,039,890 Transfers in - - 300,000 - 300,000 Cha ge r( Net Pos iion "W 7 1,75 3 72 Total net position - beginning 17,561,954 13,803,052 7,932,071 32,650,659 71,947,737 11,664,929 Change in accounting principle - pension costs (524,409) (304,471) (596,317) (883,057) (2,308,254) (362,692) Change in accounting principle - depreciation - - (757,473) - (757,473) Total net position - beginning restated 17,037,545 13,498,581 6,578,281 31,767,602 68,882,010 11,302,237 T dii 33,Q 96 74j42,335 ,t;, 12,027,34P qtal,w Position' 32Z��' 2- INv$1, The notes to the financial statern ents are an integral part of this statement Washington State Auditor's Office Page 43 B-43 CITY OF TUKWILA: 2015 CAFR BASIC FINANCIAL STATEMENTS CRY OF TUKWILA, WASHINGTON STATEMENT • CASH FLOWS • FUNDS r --OR THE FISCAL YEAR ENDED DECEMBER 31, 2015 CASH ROWS FROM OPERATING ACTIVITIES: Cash received from customers $ 6,448,402 $ 9,016,512 $ 1,479,914 $ 5,084,443 $ 22,029,271 $ 8,896,289 Cash paid to supplier (3,431,816) (5,855,061) (768,072) (1,694,907) (11,749,856) (1,609,027) Cash paid fortaxes (933,085) (1,033,643) (67,190) (570,177) (2,604,094) Cash paid to or on behall'of employees (776,060) (446,969) (943,805) (1,188,432) (3,355,266) (6,331,851) Other cash received (paid) 465 6,365 225 7,055 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Operating grant received Transfers in CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Purchase of capital assets Contributed capital Debt proceeds Capital grants Principal payment on debt Interest payment on debt Proceeds from sale of equipment CASH FLOW FROM INVESTING ACTIVITIES: Proceeds from sale of investments Purchase of investments Interest received - 183,616 183,616 300,000 - 300,000 (1,338,852) (53,360) (2,288,866) (3,681,079) 108,387 206,109 11,576 326,073 453,057 1,581,851 209,103 2,244,011 716,283 1,454 899,725 1,617,462 (1,043,380) (1,598,960) (535,553) (3,177,892) (84,263) (124,518) (40,419) (249,200) - (500,000) - - (500,000) 6,449 24,751 952 18,905 51,057 (1,288,808) 33,418 865,729 176,192 Net increase (decrease) in cash and Cash equivalents 125,588 1,218,166 8,165 89,241 1,441,160 741,941 Restated cash equivalents - 741,941 Cash and cash equivalents -beginning ofyear 3,735,380 4,699,225 820,805 1,679,046 10,934,457 4,997,868 Cash And *hEI' """ ` ' " ' i rl"'�," Cash - end;ofyear " - 11, q" epts'�, , �' . , , " , " � � "i-,,$�'*3,860, 9 $',,5,917 3,92,'--,, 68,;,fil V8�971 • 7 C� 68, '28 �5p 1 5, 2,37 6 Cash atend ofyear consists of Cash and cash equivalents 3,845,268 5,917,392 762,664 1,768,287 12,293,611 $5,739,809 Restricted cash -customer deposits 15,700 - 66,306 - 82,006 Cash and'rVash egy'vatenisi.,"", 6, The notes to the financial statements are an integral part of this statement Washington State Auditor's Office Page 44 B-44 CITY OF TUKWILA: 2015 CAFR BASIC FINANCIAL STATEMENTS CITY O; TUKWILA, WASHINGTON STATEMENT OF • PROPRIETARYFUNDS •- THE FISCAL YEAR ENDEDDECEMBER 31, 2015 RECONCILIATION OF OPERATING INCOME PROVIDED : OPERATING Adjustments to reconcile operating income to net cash Provided (used) by operating activities: Depreciation 528,077 373,087 327,238 902,492 2,130,894 785,736 Asset (increase) decrease: - Accounts receivable (28,629) (4,487) (1,387) (1,531) (36,033) (63,538) Inventory and other - - (4,581) - (4,581) 1,132 Deferred oufow of resources increase (decrease) 54,814 31,826 62,330 92,301 241,271 37,910 Liability increases (decreases): - Accounts payable 33,773 (335,680) (3,489) (227,092) (532,488) (346,941) Other liabilities (4,140) 20,086 5,033 10,722 31,701 - Wages & benefits payable 15,106 (15,898) 16,296 21,139 36,643 225 Deferred inflow of resources (increase) decrease (78,648) (45,663) (89,432) (132,437) (346,180) (54,395) Total Adtustrrrents' �, %- 520,352 23,272 312,Og8 : ;> ;665,594 . 1521,226: „= 360,130 Net Cash Prom"ded (Useii)ByOoerat ng Activities- $ 1;307$06° , $"1;680,839 �:" $=; (292,787y:- $ 1,631,153,;,"$ 4,327,111 -,'955;410< - The notes to the financial statements are an integral part of this statement Washington State Auditor's Office Page 45 -45 CITY OF TUKWILA: 2015 CAFR BASIC FINANCIAL STATEMENTS CITY OF TUKWILA, WASHINGTON UCIMRYWE7�;r 46 -"ll FIDUCIARY FUND DECEMBER 31, 2015 ASSETS: Cash and cash 1,416,506 $ 124,624 Accounts and other payables 137,092 Total Liabilities 137.092, Washington State Auditor's Office Page 46 B-46 CITY OF TUKWILA: 2015 CAFR BASIC FINANCIAL STATEMENTS CITY OF TUKWILA, WASHINGTON • 7-IGM144 FIDUCIARY FUND FOR THE YEAR ENDED DECEMBER 31, 2015 AIMITIONS: Other contributions: Fire Insurance Prerniurns. $ 63,590 Investment earnings 2,667 TotalAdd 66,258,' Benefit payments $ 62,777 'Total Dedu6tio Washington State Auditor's Office B-47 Page 47 CITY OF TUKVMLA: 2015CAFR NOTES TO THE FINANCIAL STATEMENTS -W-W . 6 ANTRM #% 1-ffV 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. In accordance with the criteria set forth in Statement No. 14 of the Governmental Accounting Standards Board, (GASB) the City's Comprehensive Annual Financial Report (CAFR) includes all funds controlled by the City. See Note 7, Joint Ventures, for a discussion of Vallw Communications Center which is a ioint I )Wu&b1gic6siaft am Authority. • Cascade Water Alliance • Valley Cities — SCORE Jail • Valley Communications Center • Valley Narcotics Enforcement Team • Valley Special Weapons and Tactics Team • Valley Civil Disturbance Unit • Tukwila Metropolitan Park District • Regional Animal Services of King County City of SeaTac Probation Services King County Reclaimed Water Community Connectivity Consortium WINQ9=909miluclam W- M- R W 0- 0 0 11=- VNI in the City, and the City is not financially dependent upon these organizations. In 2014, the Tukwila Metropolitan Park District (District), which operates pool programs within the City, was reported Washington State Auditor's Office B-48 Page 48 CITY OF TUKVMLA: 2015 CAFR NOTES TO THE FINANCIAL STATEMENTS officio capacity as the District's commissioners. In the November 3, 2015 general election, voters approved a measure changing the governing Board of Commissioners from the Tukwila City Council serving in the ex officit capacity to a five member board with directly elected commissioners. The effective date of the proposition was November 24, 2015. As of December 31, 2015, the District was no longer a component unit of the City and the financial data associated with it was removed from the City's financial statements. B. Basis of Presentation The City's basic financial statements consist of overnment-wide statements 2nd a statement of activities, and fund financial statements which provide a more detailed level of financial information. 1 •: - . - - , . ^ It , I WON is eliminated to avoid "doubling up" revenues and expenses. The statements distinguish between governmental activities and business -type activities. The statement of net Dosition Drescaits fte ft;pTcial co-iditim nf tW-P anvPr-vtrP-tt9,1 !;.Tif %ii_q4P.-,--tviP �rtivitip_q *&I FERWfUM - I UJU;U �V I ka is tu;m"i9v 0 1 R"Mro 11vil" mMjtMMJVV11MMVJ_W FIVIVAKW UYS44 IMF P.- XSMWP.M AQXMMMV�X1W1V# Mil, individual functions and activities. TXe st?temeAt itf ?ctivities reX,,PKs tN-e ex;FeAses*f a give.n_fYAct4rA#'Ksat �iy Artgrai�i reyrenvas Aractly cti5mact-81 with the functional program. A function is an assembly • similar activities and may include portions of a fund •'I MATIM Via& F-MR1110* and interest earned on grants that is required to be used to support a particular program. F4,r ifeA0yi;Ng ti wXicX,-fN6Gti*A �iritgram reY&Nya AaKains, thdVat6rmining faettir fitr charges fir s6rricas is vrhicK- function generates the revenue. For grants and contributions, the determining factor is to which functions the revenues are restricted. Revenues which are not classified as rooram revenues are 5resented as oeneral revenues of the CA, ing j business segment or governmental function is self-financing or draws from the general revenues of the City. Fund Financial Statements Duri-ti tWe year, tte CitX searepates traTsa -ts rpl9tef t* - - - - - - - - - - - - - - - - . . . . . . . . . ...... . . . . . . . . . . ...... ..... . . . . . . . . . . . . . . . . . . . . . ....... . . . . . . . . . . . . . . . . . . . .......... ........ . . . . . . . . . 11 . . . . . . . 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. Washington State Auditor's Office B-49 Page 49 CITY OF TUKVIALA: 2015CAFR NOTES TO THE FINANCIAL STATEMENTS LSALMRU�= nTGfl is conSiCierea a separaie accolming 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 11 moo A 100-1 W (net current assets) is considered a measure of "available spendable resources." Governmental fund operating (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. The following are the City's major governmental funds: 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. As noted in the statements that follow, the general fund receives the bulk of its revenues from local taxes, followed by State shared revenues, service charges, and other income. =11[01111*11 Jim 9;401;� 1MY.JR361111mal 0 -a a a 0 ORMIRUMS M#rgWV W-0 . X. 9 to ensure that expenditures are made exclusively for qualified purposes. Proprietary and Internal Service Funds W9 VERMPUJIG 1V 0 0 lip tWpir balaw ill It big 1�1 6Wg1 1h 4,ig jjeW _16NOW MOW iWOMM I&RAW W9 904W W income, financial posiiion, and cash flows. Proprietary and internal service funds distinguish operating revenues and expenses from non-operating items. if 0411KI MIQ 0 I- ig reMal es • and internal service. Washington State Auditor's Office Page 50 B-50 CITY OF TUKVWLA: 2015 CAFIR NOTES TO THE FINANCIAL STATEMENTS 0 �=Ml FROM I i 1 11 i 'piligi! !I I 1 1!!!! 1 11 MMI I ill I I i i i 11 i I i!!! ill I Ill 1!!!! 111 ill I iiiiiiii • 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. Fiduciary funds account for assets held by the City in a trustee capacity or as an agent for individuals, privat�.- trganizations, other governments, and other funds. The City has two fiduciary funds, Firemen's Pension Trust Fund 2nd Agency Fund. The Firemen's Pension Trust Fund is accounted for in essentially the same manner as �roprietary 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 z4atements. D. Measurement Focus 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 StateTrepts ............ Washington State Auditor's Office B-51 Page 51 reconclilation wl nI Ionsffi—pffetween Tne governmeni-wine sialements and statements for governmental 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. VT. M III V-1 - �14 IVII E. Basis of Accounting Revenues – Exchange and Non-exchange Transactions 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 currenl 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 and utility taxes. Tal7ge- 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). Other Revenue Sources twiti . 16" IT"W measurable until received. Under the modified accrual basis, ex-ienditures are recorded when the fund liabilito is incurred exc sit r !�rinci-fal and interest on general long-term debt and vacation and sick pay which are recorded when paid. via the process of consolidation. Internal service fund and similar internal activity has been eliminated from the jovernment-wide statement of activities so exwenses are not re,,#,orted twice. Exce�otions to this ZO:eneral 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. concerned. Amounts reported on the government -wide statements as program revenues include, charges to (111 ns. General revenues include all taxes. The accrual basis of accounting is followed in all proprietary funds. Under the accrual Washington State Auditor's Office Page 52 B-52 CITY OF TUKVMLA: 2015CAFR NOTES TO THE FINANCIAL STATEMENTS 2nd 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 WAA9QL01 NO , Ii a - a - a - I Wiffillobl.1101r. - 0 0 - V101110111101 erlunl-M�Tm 51 itnuiluris anit actizitles oy objeci class. Any unexpenaed appropriation 6aianceE 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. 0 If rdl W1 V 1 @1 Q to] #11 r. HIC 1 6W Expenditure Categories General Government Includes administration, finance, municipal court, attorney, and city cle activities. I 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. Washington State Auditor's Office B-53 page 53 CMT OF TUKVV1LA: 2015CAFR NOTES TO THE FINANCIAL STATEMENTS G. Assets, Liabilities, and Fund Equity Cash and Cash Equivalents All cash and cash equivalents, restricted and unrestricted, consists of cash balances in the checking account, money market account, im rest funds, and the State Treasurers Local Government Investment Pool. All funds in IM7MM that are readily convertible to known amounts of cash. Investments Investments are held sevaratelv bv each fund with interest earned directiv for twe hplefit of Pacw fu-frd1_ 1-t 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 current portion of the special assessment receivable. Amounts Due to and From Other Funds and Governments, Intetfund Loans and Advances Receivable 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, 2015, there are no residual balances outstanding between the governmental activities and business -type activities. The non-current portion of interfund loans 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 aWmpriation and are not expendable a i ... . . . . . . . . transactions. 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 financial statements. Since special assessments are secured by liens against related properties, no allowance for uncollectible amounts is made. Inventories ia4efteif as itaiwajyr&ase� f-ir resale tir external cystitimdrs ir,,ither City �a�zrtrnents,*r syAAlies ant 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. Washington State Auditor's Office B-54 Page 54 CITY OF TUKVMLA: 2015 CAFR NOTES TO THE FINANCIAL STATEMENTS Real Propefty 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—an,,,, cost in excess of A_%0_ in the financial statements. so, (SWONAT14101 , limb 11=6194101VI TA are reported at net realizable value in the financial statements. WOMAN I WIIILI�,Iiairlle Tiallim- F, P I MAN a future reporting period. when the asset is urchased. These asiell lj� ip J� p Wl Aoiliel W111W 44 ire rjA gR IiAM w 01"W" ML position and in the respective funds. 1 0; INT, _A9110"Iffm- I offivethiWilngli ;W g1111111 ill J114i 4pirgsiif 4111MAP "W 110 w. that do not add to the value of the asset or materially extend an asset's life are not. 9-94, �44 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 Washington State Auditor's Office B-55 Page 55 CITY OF TUKVMLA: 2015CAFR NOTES TO THE FINANCIAL STATEMENTS 1 ther Liabilities 0_15—�Mr' I wivo ww� vffrfn W I wr�' at 1 x IBNR for claim fluctuations plus 1.5 x IBNR for a claims reserve yielding a total liability of $2,168,750. Compensated Absences 0 WMA11411101"I - M. The entire com ensated absence liabilA, which includes sala and wa es as well as related taxes, is reDorted on 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 the next year. Long -Term Obligations In the government -wide financial statements, and roRrie�j��ngj� jj awadT gil in jhj r)e activities or �roRrij n� j 1 6mpni of n6 ojillij, W 11.1mi ITO goicoulti g 1VWRV# ir _Ngnvp Q PA PAY04 -4 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 rworted as other financin, sources. Premiums received on debt expenditures. Long-term debt outstanding at year-end is outlined in Note 10. Fund BalancelNet Poon A fund balance represents the difference between the current assets and current liabilities plus deferred inflows. not represent available, spendable resources and therefore are not available for general appropriation or expenditure. inflow of resources. Net r)osition invested in caDital assets. net of related debt. COTSiStS Of G2DitaI assets. '1,et of I #'1. :. R..Q 1111"MI MiN1140101114"M imm I ".i I . M -• -• external restrictions imposed by creditors, grantors or laws or regulations of other governments. The remaining balance is reported as unrestricted. Washington State Auditor's Office Page 56 B-56 CITY OF TIJKVVILA: 2015CAFR NOTES TO THE FINANCIAL STATEMENTS N 0 IN11011111,11110 111IN-140 111MMI Ul Lilt! f:lUZ'lU115 �Udl Ullt:-1.11111C IMM -7111b Malt - Reserve fund. Enterprise funds, at the close of each fiscal year, the unrestricted fund balance shall equal or exceed 20% of the jireveous ejear revenue exclusive of non-o.�*eratin,.e non-recurrin�t revenues such as real estate sales transfers in from other funds or debt proceeds. or 250%, of the actuarially determined IBNR reserve. Fund Balance Components 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 $1.3 million is the outstanding balance of a loan from the general fund to the Tukwila Metropolitan Park District. The facilities fund has a nonspendable fund balance of $7.65 million representing real property held as an investment. —R-,F--vstft-�G-,t4n-4 or imposed by law through a constitutional provision or enabling legislation. Q1iWWftV%W4 im�,IW14Y 2 f'1#1m?.! 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. Intent of use is determined through the budgetary process and is expressed by the Finance Director. • 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. fl@ Washington State Auditor's Office Page 57 B-57 CITY OF TUKVMLA: 2015CAFR NOTES TO THE FINANCIAL STATEMENTS by unassigned. Jill $131111WOUITANE Contributions of Capital onm capi I R t example, developers, and grants or outside contributions of resources restricted to capital acquisition and construction. It also includes water and sewer connection charges. V17-1fl =-q-TTXNM= inairect cosis, aiso reTerle o as-Merneaa cos across departments. They include accounting, human resources, payroll, information technolo gy, 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 on the Statement of Activities rather than as transfers in and transfers out. r M17=0 K I If Ili INIVIO M BVI Mr -4162 or-447r.1;4I 0 14 11 Lq &-mr.4#1*11MARI Ingir-1414 &111 01--INSFA lgw L014IT114y-moill IR 11 1 HHHW��IVAO VIM= Special items are transactions that are either unusual in nature or infrequent in occurrence. They must also be within the control of management. They are reported as a separate line item entitled Special Item. The City has one special item reported in 2015. The City purchased motels in the Tukwila International Boulevard urban renewal area for redevelopment. The assets were written down to the net realizable value because the structures on the land will be demolished and the property sold as raw land. The reduction in value is reported as a special item. Estimates OWSLIV may differ from those estimates. Washington State Auditor's Office B-58 Page 58 CITY OF TUKVMLA: 2015CAFR NOTES TO THE FINANCIAL STATEMENTS `;M,'U i7oTi I Ma I M- I I 11111MIlmore mw f is 0 _W11111=17 - 7 related to neisin-ts-9-md neisio-i ey.neTse. i-iforn.ation about the fidUciary net nosition ofall state snonsored Derision flents kinulluirly levi-Ilus of eff1polee GUI ILI IU ihe •- terms. Investments are reported at fair value. I. Changes in Reporting NOTE 2 —DEPOSITS AND INVESTMENTS available for use -k -i 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 $14,479,680. Of the bank balance, J2& Qct bWRA 1i i1a Investments Washington State Auditor's Office Page 59 B-59 CITY OF TUKVVIL& 2015CAFR NOTES TO THE FINANCIAL STATEMENTS F-IMIT=11 m1no •T-IM1111:1111 U.S. Govemment Agency Notes: Federal Home Loan Mtg Corp Federal Natl Mortgage Assn Federal Home Loan Bank Federal Home Loan Mtg Corp Total U.S. Agency Notes Municipal Bonds., Washington State Convention Center: Lodging Tax Washington State Biomedical Research: Revenue - Facilities Marysville Washington: Limited General Obligation Washington State Biomedical Research: Revenue - Facilities Port of Anacortes, Washington: Limited General Obligation Douglas County School District, Washington: Unlimited General Obligation 5/13/2016 Maturity Credit Market 8/23/2017 Date Rating Value CerWrIcates of Deposit. Aaa / AA+ 1,000,013 Sound Community Bank 3/4/2017 $ 3,174,738 Bank of Washington 5/112016 250,000 Total Certificate of Deposits Aal / Aa3 3,424,738 U.S. Govemment Agency Notes: Federal Home Loan Mtg Corp Federal Natl Mortgage Assn Federal Home Loan Bank Federal Home Loan Mtg Corp Total U.S. Agency Notes Municipal Bonds., Washington State Convention Center: Lodging Tax Washington State Biomedical Research: Revenue - Facilities Marysville Washington: Limited General Obligation Washington State Biomedical Research: Revenue - Facilities Port of Anacortes, Washington: Limited General Obligation Douglas County School District, Washington: Unlimited General Obligation 5/13/2016 AAA / AA+ 2,000,398 8/23/2017 Aaa / AA+ 993,328 9/21/2018 Aaa / AA+ 1,000,013 5/25/2018 AAA / AA+ 997,016 4,990,755 7/112016 Aa3 / A+ 505,050 7/1/2017 Aaa / AA+ 520,010 12/1/2017 Aa3 / Al 304,477 7/11/2019 Aaa / AA+ 547,445 9/1/2020 Al 362,719 12/1/2020 Aal / Aa3 1,240,317 Total Municipal Bonds 3,48U, U I I 11 "I, I 1 11 �', " I Ii,8 TOTAL INVESTMENTS'95,510, * No credit rating Wth certificate of deposit accounts; accounts are insured by the Public Depository Protection Commission. Washington State Auditor's Office B-60 Page 60 CITY OF TUKWILA: 2015 CAFR NOTES TO THE FINANCIAL STATEMENTS Cash • Cash Equivalents: Investments 11,895,51 AssetsCurrent Restricted:Cash • cash equivalents 1 Total• • Investments SUMMARY BY TYPE: $ 15,700 Cash and Cash Equivalents: $ 8,406 Local Govemment Investment Pool $ 10,708,902 Money market account 13,152,028 Cash on hand 14,450 Cash in bank -book balance 13,624,285 Total cash and cash equivalents 37,499,665 Investments: Certificates of deposit 3,424,738 U.S. Government Agency Notes 4,990,755 Municipal bonds 3,480,017 Total investments 11,895,510 Restricted Assets - Governmental $ 15,700 Deposits $ 8,406 Drug Seizure funds - federal portion 12,644 Debt Senrice 2,280,652 Impact Fees 140,395 Restricted Assets-Govemmental' $ ,° 2,442;097, - Customer Deposits -Water Utility $ 15,700 -•osits-Golf Course Customer De 51,306 Lease Deposits -Golf Course 15,000 Revenue Bond Reserve Account-Water/Sewer/Surface Water - Restricted - - .- eA.. Ifewill-OZIAMA-• 1 1 Washington State Auditor's Office -61 Page 61 CITT OF T1K111Vk 2015 CAFR NOTES TO THE FINANCIAL STATEMENTS MVT777 lawl-Min -1 UJI 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. 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. VMMHM�� 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. As of December 31, 2015, the City's investments in municipal bonds were rated Aaa to Al by Moody's Investor Service. Concentration of Credit is Iffime 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. Washington State Auditor's Office Page 62 B-62 CITY OF TUKVVILA: 2015 CAFR NOTES TO THE FINANCIAL STATEMENTS invested in the Washington State Local Government Investment Pool, and U.S. Treasury or Agency securities. Taxes Receivable 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 11111111664111111111 Interest 55,087 1,790 56,877 Notes due within one year 612,971 - 612,971 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. Propedy Tax Calendar January 1st Taxes are levied and become an enforceable lien against properties. February 14 th Tax bills are mailed. April 30th First of two equal installment payments is due. If taxes are less than $50, full payment is d] (RCW 84.56.020) May 31 Assessed value of property established for next year's levy at 100 percent of market value October 31 st Second installment is due. (RCW84.56.020) I Washington State Auditor's Office Page 63 Taxes Recei\rable Property * 187.020 $ - $ 197,626 Sales & Use 3.738.003 - 3.736.033 Real Estate Excise Tax 1.097.739 - 1.097.739 Utility Tax 828.247 - 828.247 Admission/Gambling/Parking/Other 1.046.739 789 1.047.528 Total Taxes RaceimeNe 6.906.384 789 6.907.173 CuatmnerReceiveb|e Miscellaneous 432.016 5.077 437.093 Utility Accounts - 1.630.575 1.630.573 Total Customer Reneiwabie 452.016 1.635.651 2.007.667 Interest 55,087 1,790 56,877 Notes due within one year 612,971 - 612,971 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. Propedy Tax Calendar January 1st Taxes are levied and become an enforceable lien against properties. February 14 th Tax bills are mailed. April 30th First of two equal installment payments is due. If taxes are less than $50, full payment is d] (RCW 84.56.020) May 31 Assessed value of property established for next year's levy at 100 percent of market value October 31 st Second installment is due. (RCW84.56.020) I Washington State Auditor's Office Page 63 CITT OF -,rILA: 2015 CAFR NOTES Assessed values are estah&;AP_dJWh_P_r,_m is required every two years. On May 31 of each year the assessed value of property is established for the next property tax levy. M fins 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 recorde 6041 wim 11 +• - . # .. - - # •- - , •- # • • + +1 •- 11,1 #` all assessed value. An additional levy rate of $0.225 is available to the City because the City funds a Firemen's Pension --• ", " 1 #^ ' 11,1 • ., # - # - . . - # ♦ ••- . # '. •;- _, -_r-.r the last general election. Washington State Constitution and Washington State law, RCW 84.55.010, limit the rate. The City's regular levy in 2015 was%,2.84188 R 111 of -# valuation of 1 / : for •tal reyular 1- • • Due from Other majority representsgrants. Notes Receivable MwrWr by the improvement. The current portion of outstanding assessments is reported in the receivables category on the from - prior ' Assessments - charged it 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. 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 -•t. The project was c• •l ..r and accepted by #uncil in 2007. The connection- to be paid by property owners were established by ordinance, effective in August, 2007. One option given to 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. Washington State Auditor's Office -64 Page 64 CITY OF TUKVVILA: 2015CAFR NOTES TO THE FINANCIAL STATEMENTS Interfund activity is the term used to describe similar financial transactions between funds of the primary Xovernment. :004T Me. IMMM MITO * -4 . 0 � a similarly treated when they involve other funds of the City of Tukwila. V wtium mmum wo YP&5—� " PO Ram W I kkK I V"Imitmv tii-M4 Interfund loans are subject to elimination upon consolidation. 1,11114TITMAT40M. I =0 AMT14 I . M 0 ^0 -711mr, �0� nsacuons e operailons o=er 1 -Mas are recor0M=T9M'9M "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 isxojy�rietaXA and iovernmental funds transfers to establish or reduce workin�o ca - fital in other funds and transfers of remaining balances when funds are closed are classified non-operating revenue. paid for them. These transactions are expend itu res/expen se in the fund responsible and as a reduction of expenditure/expensed in the fund being reimbursed. IMM 11MIT10 MM Governmental Business -Type Activities Activities, Total Notes Receivable Special Assessments - Non -Current Portion $ 6,266,537 $ - $ 6,266,537 Sewer Payment Plan - 257,016 257,016 Total Receivables' $ 6,266,537 $ 257,016 6,523,553 Interfund activity is the term used to describe similar financial transactions between funds of the primary Xovernment. :004T Me. IMMM MITO * -4 . 0 � a similarly treated when they involve other funds of the City of Tukwila. V wtium mmum wo YP&5—� " PO Ram W I kkK I V"Imitmv tii-M4 Interfund loans are subject to elimination upon consolidation. 1,11114TITMAT40M. I =0 AMT14 I . M 0 ^0 -711mr, �0� nsacuons e operailons o=er 1 -Mas are recor0M=T9M'9M "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 isxojy�rietaXA and iovernmental funds transfers to establish or reduce workin�o ca - fital in other funds and transfers of remaining balances when funds are closed are classified non-operating revenue. paid for them. These transactions are expend itu res/expen se in the fund responsible and as a reduction of expenditure/expensed in the fund being reimbursed. IMM 11MIT10 MM 914111111 =I Washington State Auditor's Office B-65 Page 65 Transfers In $ 500,000 $ 1,700,000 $ - $ 3,433,846 $ 5,633,846 Transfers Out (5,433,846) - (500,000) - (5,933,846) 914111111 =I Washington State Auditor's Office B-65 Page 65 CITY OF TUKVVILA: 2015CAFR NOTES TO THE FINANCIAL STATEMENTS projects funds. During 2015 the City maintained operating lease agreements for the purpose of leasing City operated machinery 2nd equipment. associated with these activities are as follows. I Leasing of the Records Center expires on 5/31/2016. 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 6/30/2016. Washington State Auditor's Office B-66 Page 66 Z /26 ��2'1 '9M L " Records Center 69,704 29,400 Neighborhood Resource Center 2 21,000 10,500 Seattle Southside Visitor Center 20,141 - - - - Police Archives/Vehicle Storage 4,600 55,752 57,424 59,144 60,916 Police Department Gym 8,400 14,652 15,091 15,542 16,012 Postage Machines 9,096 9,096 9,096 9,096 9,096 Office Equipment 52,096 45,995 36,103 17,924 3,300 I Leasing of the Records Center expires on 5/31/2016. 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 6/30/2016. Washington State Auditor's Office B-66 Page 66 CITY OF TUKWlLA: 2015CAFR NOTES TO THE FINANCIAL STATEMENTS • 1 R1 17- -, � 0 L A01TA :4 In J, 14 1 W-11 W—IT-0 I 0"W, Capital assets, being depreciated: Buildings Other Improvements Machinery and Equipment Infrastructure Total capital assets being depreciated Less accumulated depreciation for. Buildings Other Improvements Machinery and Equipment Infrastructure 25,424,641 (2,845,260) 22,579,382 BEGINNING 22,671,409 18,130,493 (76,492) 18,054,002 BEGINNING Divestment of BALANCE 19,600,119 'ENDING 1,501,411 BALANCE Component 1/1/2015 - 172,163,132 'BALANCE - 173,864,754 1/1/2016 Unit RESTATED INCREASES DECREASES 12/31/2015 Governmental Activities Capital assets, not being depreciated: Land $ 35,312,814 $ 35,312,814 $ - $ - $ 35,312,814 Construction in Progress 16,718,203 16,718,203 11,355,209 (1,940,230) 26,133,182 Total capital assets, not being depreciated 52,031,017 0 52,031,017 11,355,209 (1,940,230) 61,445,996 Capital assets, being depreciated: Buildings Other Improvements Machinery and Equipment Infrastructure Total capital assets being depreciated Less accumulated depreciation for. Buildings Other Improvements Machinery and Equipment Infrastructure 25,424,641 (2,845,260) 22,579,382 92,027 22,671,409 18,130,493 (76,492) 18,054,002 10,030 18,064,032 19,600,119 (216,988) 19,383,131 1,501,411 (243,210) 20,641,332 172,163,132 - 172,163,132 1,701,622 - 173,864,754 235,318,386 (3,138,739) 232,179,646 3,305,090 (243,210) 236,241,526 (11,614,193) 292,289 (11,321,904) (637,509) (11,959,413) (11,355,020) 2,550 (11,352,470) (778,403) (12,130,873) (12,758,603) 20,639 (12,737,964) (1,402,051) 310,158 (13,829,858) (47,646,638) - (47,646,638) (5,304,588) - (52,951,226) Total accumulated depreciation (83,374,454) 315,477 (83,058,977) (8,122,551) 310,158 (90,871,370) Total capital assets, being depreciated, net 151,943,932 (2,823,262) 149,120,670 (4,817,461) 66,948 144,370,156 Gowmmental a6ti4y capital "assets, net $ 203,974,949 $ (2,823,262) 201,151,687 $ 6,537,748 $ ' (1,873,282) $ 205,816,152, component unit of the City of Tukwila. Because the TPMPD is no longer a component unit, the beginning balances are being restated. On the November 3, 2015 general election, voters approved a measure changing the governing Board of elected commissioners. The effective date of the proposition was November 24, 2015. Washington State Auditor's 0jRce Page 67 B-67 CITY OF TUKVVILA: 2015 CAFR NOTES TO THE FINANCIAL STATEMENTS USI ESS- ACTIVITIES BE B) Business -Type Activities Capital assets, not being depreciated: Land $ Construction in Progress Total capital assets, not being depreciated Capital assets, being depreciated 3INNING CHANGE IN ENDING LANCE ACCOUNTING BALANCE 1/2015 PRINCIPLE INCREASES DECREASES 12/31/2015' 2,346,230 $ - $ - $ - $ 2,346,230 4,200,272 - 3,660,185 (612,494) 7,247,963 Buildings 13,284,419 - - - 13,284,419 Other Improvements 80,053,417 - 612,494 (24,870) 80,641,041 Machinery and Equipment 2,322,594 - 20,894 (154,020) 2,189,467 Total capital assets being depreciated 95,660,430 - 633,388 (178,890) 96,114,928 Less accumulated depreciation for. Buildings (4,233,598) - (371,794) - (4,605,392) Other Improvements (30,098,748) (708,834) (1,710,507) 22,383 (32,495,705) Machinery and Equipment (1,838,270) (48,640) (48,593) 153,566 (1,781,937) Total accumulated depreciation (36,170,616) (757,473) (2,130,894) 175,949 (38,883,034) Total capital assets, being depreciated, net 59,489,816 (757,473) (1,497,506) (2,942) 57,231,894 Business -Type activity capital assets, net $ 66,036,318 $ (757,473) $ 2;162,679, $ (615,436) $ 66'826,087 Previously, the depreciation method utilized was the composite method. Beginning with fiscal year 2015, the straight-line method of depreciation is utilized for all categories of capital assets. Washington State Auditor's Office Page 68 B-68 CITY OF TUKVVlLA: 2015CAFR NOTES TO THE FINANCIAL STATEMENTS ;epreciation expense for 2015 was coargeo4o, functions/prograrns a$' Gnvernmenta|Acdtkies General Government $ 272.680 Public Safety 165.840 PhyniceiEn\Amonment 687.741 Transportation 5.339.544 EconomicEnAmnmen( 4.301 Culture and Recreation 790.444 Intangible Assets 76.269 Capital anneio held by the government's internal service funds are charged tothe mahouofunctions based ontheir usage nfthe assets 785.736 Total 2015 depreciation expense - governmental activities 0,122,551, Business -type, acthAties' Water Utility 528077 Sewer Utility 373,087 Foster Golf Course 327.238 Surface Water Utility 902482 Total 2015 depreciation expense,- b6si , r4ss-type,actiMities" $""2J30,894 1 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. Valley Com $ 2,139,201 $ - $ 2.139,281 Washington State Auditor's Office Page 69 CITY OF TUKVVILA: 2015CAFR NOTES TO THE FINANCIAL STATEMENTS Valley Communications Center I Me M -I 0 0 MOM 4 0 a 77, F IMIT W, Owl thereafter is automatically extended for consecutive five-year periods. kI H WIM14 ilia 0 MIIN a 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: Washington State Auditor's Office B-70 Page 70 CITY OF TUKVVILA: 2015CAFR NOTES TO THE FINANCIAL STATEMENTS MUZO 2014 Equity Balance $ 5,350,252 $7,530,786 $5,079,377 $2,974,283 $3,619,944 $24,554,642 2014 Percent of Equity 21.79% 30.67% 20.69% 12.11% 14.74% 100.00% GASB 68 Adjusted Equity tai (1,876,235) (2,640;908) (1,781,244) (1,043,026) (1,269,448) (8,610,861) 2014 Equity Balance - Restated $ 3,474,017 $4,889,878, $3,298,133, $1,931,257 $2,350,496, $15,943,781' Equity January 1, 2015 $3,474,017 $4,889,878 $3,298,133 $1,931,257 $2,350,496 $15,943,781 Current Year Increase/(Decrease) 470,862 649,015 555,097 208,004 507,809 2,390,787 Equity December 31, 2015 $3,944,879 $5,538,893 $3,853,230 $2,139,261 $2,858,305 $18,334,568 Percent of Equity 21.52% , , 30.21%, 1 21.02% 11, 11.67% 15.59%' '.— 100.00% (a) 2015 Owner Cities Equity Allocation was restated for GASB Statement No. 68 adjustment using percent of equity. 9 1 MTA' 11 IWALZIN AIN' F"I'MILINNIF I I FA TMUM I - A complete set of financial statements are available from Valley Communications Center, 27519 108 th Ave SE, Kent, WA 98030, or by telephone 253-372-1300. • A W I If Mil 0 Ili$ 11 G4014 Ma r� I MMA VA I or-4�1w- I M M [MI Lim I Lai a &M I a Lod LS M I UP 1 M 41 M rQ Lem Lei M 41 r -M 01111 slow4wfl ^a Washington State Auditor's Office Page 71 B-71 pohmolakill NOTES TO THE FINANCIAL STATEMENTS UFe-1`1rC1If-#,04-UILIe5 UF+t 011SUI-1111113 A&CHURI MIJUll dit! IF] FIVt:U Ul UUIFVL;LIU[lal laulliII Any agreement with a Subscribing Agency shall be in writing and approved by SCORE as provided within the SCORE Formation Interlocal Agreement. 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 'fit Ule te1l. 5CV1Y6W-6!-FtA-ffI - Itb_-Iui IIIC Bonds: wide financial statements under assets. The following is condensed (unaudited) financial information as of December 31, 2015 related to SCORE: Debt Sermce Schedule ', "I I I I I Debt Service Allocation to Owner Cities, ITEM AUBURN- BABS DES MOINES Au�bum, Buren', Federal Way Renton' SeaTac, TukvAla, Year Principal III Subsidy Total 31% 4%' 18% 36% 3% 8% 2016 $ 2,066,000 $ 4,911,886 $ (1,517,676) $ 5,459,210 $ 1,692 355 $ 218,368 $ 982,658 $ 1,965,316 $ 163,776 $ 436,737 2017 2,145,000 4,820,241 (1,511,685) 5,453,556 1,690,602 218,142 981,640 1,963,280 163,607 436,285 2018 2,240,000 4,716,979 (1,511,685) 5,444,294 1,687,731 217,772 979,973 1,959,946 163,329 435,544 2019 2,310,000 4,602,229 (1,475,151) 5,437,078 1,686,494 217,483 978,674 1,957,348 163,112 434,966 2020 2,385,000 4,484,854 (1,437,475) 5,432,379 1,684,037 217,295 977,828 1,955,656 162,971 434,590 2021-2025 13,405,000 20,377,998 (7,109,462) 26,673,636 8,268,796 1,066,941 4,801,236 9,602,473 800,206 2,133,883 2026-2030 16,325,000 15,803,611 (5,715,798) 26,412,813 8,187,972 1,056,513 4,754,306 9,508,613 792,384 2,113,025 2031-2035 20,095,000 9,856,351 (3,682,383) 26,268,968 8,143,380 1,050,759 4,728,414 9,456,828 788,069 2,101,517 2036-2039 19,410,000 2,636,145 (1,147,380) 20,898,766 6,478,617 835,951 3,761,778 7,523,555 626,963 1,671,901 Totals $00,380,000, $72,209,294 5,108, $127,480,599 , $ 39,518,984 $5,099,224 $22,946,607 ,$45;893,016 $3,824,418 $10,198,448 wide financial statements under assets. The following is condensed (unaudited) financial information as of December 31, 2015 related to SCORE: Equity January 1, 2015 Current Year Increase/(Decrease) Equity December 31, 2015 Percent of Equity $ 3,194,609 $ 359,573 $ 178,978 $2,472,263 $ 3,086,049 $ 471,943 $ 754,438 $10,517,853 137,167 17,268 18,288 148,312 136,621 26,524 34,103 518,283 $ 3,331,776 $ 376,841 $ 197,266 $2,620,575 $ 3,222,670 $ 498,467 $ 788,541 $11,036,136 30.19% 3.41% 1.79% 23.75% 29.20% 4.52% 7.15% 100.00% Completed financial statements for SCORE and SCORE PDA Gan be obtained from the SCORE, Attn: Financ-. Manager, 20817 17th Avenue South, Des Moines, WA 98198. Washington State Auditor's Office B-72 Page 72 FEDERAL, ITEM AUBURN- BURIEN DES MOINES WAY RENTON SEATAC, TUKWILA TOTAL 2014 Equity Balance $ 4,243,234 $ 515,410 $ 292,160 $3,676,724 $ 4,220,405 $ 712,666 $1,080,470 $14,741,069 2014 Percent of Equity 28.79% 3.50% 1.98% 24.94% 28.63% 4.83% 7.33% 100.00% qASB 68 Adjusted Equity (),' , 11 (1,048,625) (155,837) (113,182) (1T204,461), (1, 134,356)' (240,723):..:(326,032):4-' (4,223,216) 20 1 14 Equity Balance -Restated , $ 3,194,609 $ 359,673 178,978 $2�472,263,, i 3,086`,049 $ 754',438,, ' $10,51 1 7,853 Equity January 1, 2015 Current Year Increase/(Decrease) Equity December 31, 2015 Percent of Equity $ 3,194,609 $ 359,573 $ 178,978 $2,472,263 $ 3,086,049 $ 471,943 $ 754,438 $10,517,853 137,167 17,268 18,288 148,312 136,621 26,524 34,103 518,283 $ 3,331,776 $ 376,841 $ 197,266 $2,620,575 $ 3,222,670 $ 498,467 $ 788,541 $11,036,136 30.19% 3.41% 1.79% 23.75% 29.20% 4.52% 7.15% 100.00% Completed financial statements for SCORE and SCORE PDA Gan be obtained from the SCORE, Attn: Financ-. Manager, 20817 17th Avenue South, Des Moines, WA 98198. Washington State Auditor's Office B-72 Page 72 CITY OF TUKV\4LA: 2015CAFR NOTES TO THE FINANCIAL STATEMENTS b-olf-UH Aggregate Pension Amounts —All Plans $ 13,725,838 toll =-- #101 NMI 49"ONAM vloll[INIIISIIO 1 4 1 loll I %I W (M 1W I IsIRN1111116 systems. low Communications Unit P.O. Box 48380, Olympia, WA 98504-8380 A. Public Employees Retirement System (PERS) Plans 1, 2, and 3 PERS members include elected officials; state employees; emplo-yees of the Supreme, Appeals and Superior MA"M oww "I, 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. Washington State Auditor's Office B-73 Page 73 CITY OF TUKV\fiLA: 2015 CAFR NOTES TO THE FINANCIAL STATEMENTS 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 2015 were as follows: :2:4 aAu MOM • 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 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. 7 -3 -r UPI-CIFOU5 ailiuArts rian 2 rafes an W =300F IF 1 777 r 77 R R an. - rates. The PERS Plan 2/3 required contribution rates (expressed as a percentage of covered payroll) for 2015 wer.- as follows: Washington State Auditor's Office Page 74 B-74 CITY OF TUKVMLA: 2015CAFR NOTES TO THE FINANCIAL STATEMENTS 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 • 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. Mpf=�-- 4" • • 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. 4- • 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. -H benefit, if found eligible by the Department of Labor and Industries. PSERS Plan 2 members are vested after completing five years of eligible service. Washington State Auditor's Office Page 75 B-75 Actual Contribution Rates: Employer 213 Employee 2 Ja�a through June 2015 July through December 2015 i- so M. M WE 1 Employee PERS Plan 3 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 • 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. Mpf=�-- 4" • • 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. 4- • 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. -H benefit, if found eligible by the Department of Labor and Industries. PSERS Plan 2 members are vested after completing five years of eligible service. Washington State Auditor's Office Page 75 B-75 CITY OF TUKVMLA: 2015 CAFR NOTES TO THE FINANCIAL STATEMENTS •' -'••'# 1 • WO 1117TZIRiFF111 0 M benefit plans. 9 - - _1111145ROMMIRIM - . . I 4 A 9IM11 Wirkyr. W]EM73101110 T, a 20+ years of service — 2.0% of FAS 0 10-19 years of service — 1.5% of FAS 0 5-9 years of service — 1 % 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 I members were vested after the completion of five years of eligible service. The plan was closed to new entrants on September 30, 1977. 0 0 W 0 -H$ go] 11 VA41 ULM 01111111 OIL 141112REM #rJ11,r.K#31LVA Iroy #1;41L*1;1 11 Solludelygi I[; HQ M$I I-IT(;4 &-I N 11 1 1 _41101 of a survivor -benefit 6ther ben fits 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. Washington State Auditor's Office Page 76 B-76 CITY OF TUKVVlLA: 2015CAFR NOTES TO THE FINANCIAL STATEMENTS LEOFF Plan 2 Actual Contribution Rates: Employer Employee State and local governments _ 5.23% 8.41% Ports and Universities 8.59% 8.41% 0 M .70 17, *TTATWTIM Actuarial Assumptions OWN I ON 6%10 Roll oil r�z C;6101 I gas] all Me] offims Uroroll= lie $1 0 IF oil N ON the entry -age cost method), assumed interest and actual benefit •. • • 3% 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% Mums 91 4 irm- MUNIUMM F 19901 - V 0 a -99 =01.0 -MOT future year throughout his • her lifetime. Study Report, used when valuing the PERS 1 and TIERS 1 Basic Minimum COLA. The OSA corrected how valuation software calculates a member's entry age under the entry age normal actuarial cost method. Previousl age was rounded, resultino. in an entry age one year hioher in some cases. 6A VAIrluill"to, 1-40 611141 thirds Plan 2 members and one-third Plan 3 members. Washington State Auditor's Office Page 77 B-77 CITY OF TUKVALA: 2015CAFR NOTES TO THE FINANCIAL STATEMENTS 0 The OSA changed the way it applies salary limits, as described in the 2007-2012 Experience Study Report. 11iscount Rate MT304- M4, 107-TITI M41 M"t Hrif I I i �! I I � � I I � ii ii � , 1, 1 IM, TIMIFI�o _�A I 10=11,09 - M 10,10 KRIM 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 T�e IiAg-term ex�ecte,1 r?tet,,f retyrA tXe IRS *eAsi#A �12A iAvestmeMs if 7.5 AiergreAt w2s fetermiAet Ysixg a building -block -method. The Washington State Investment Board (WSIB) used a best estimate of expected future asset class. Those expected returns make up one component of WSIB's capital market assumptions. The WSIB 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 M3 Mil ra P-MVE R4 1914 11 W I I P 0 P PJ UPUM I im I INAVY10-3 1410 11 L40 I Igo M t74 11 111 ray-molm P] Lev Lo R;ms] I Le 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%® 5.8006 Global Equit 37% 6.60%® Private Equity 23% 9.60% 100% Sensitivity of NPIL The table below presents the City of Tukwila proportionate share of the net pension liability calculated using the Washington State Auditor's Office Page 78 B-78 CITY OF TUKWLA: 2015 CAFR NOTES TO THE FINANCIAL STATEMENTS Pension Plan Fiduciary Net Position financial report. Pension Liabilities (Assets), Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to PeTSiOTS At June 30, 2015, the City of Tukwila reported a total pension liability of $7,037,111 for its proportionate share of the net pension liabilities as follows: :1�01=1= 0 0 a riTa .. 1•I I to] NEWMAN ..... 111 AM, I - associated with the City of Tukwila were as follows: LEOFF 2 — employers (5,335,916)i proportionate share 'LEOFF 2 — State's proportionate of the net pension liability/I(asset) associated with I I I employer III III, NIIIII I " Rl � 1•1 1 � � 1 �•I I I- I .• •WSTOM Washington State Auditor's Office B-79 Page 79 11 :1�01=1= 0 0 a riTa .. 1•I I to] NEWMAN ..... 111 AM, I - associated with the City of Tukwila were as follows: LEOFF 2 — employers (5,335,916)i proportionate share 'LEOFF 2 — State's proportionate of the net pension liability/I(asset) associated with I I I employer III III, NIIIII I " Rl � 1•1 1 � � 1 �•I I I- I .• •WSTOM Washington State Auditor's Office B-79 Page 79 CITY OF TUKWLA: 2015CAFR NOTES TO THE FINANCIAL STATEMENTS JIMAM Vil; 1113111001's goal - Q fix #�-Nf f wvf- 1�j DRS in the Schedules of Employer and Nonempi6yer Allocations for all plans except LEOFF 1. LEOFF Plan I allocation percentages are based on the total historical employer contributions to LEOFF I from 1971 through 2000 and the retirement benefit payments in fiscal year 2015. Historical data was obtained from a 2011 study by the Office of the State Actuary (OSA). In fiscal year 2015, the state of Washington contributed 87.12 2N -14 . TOWC11 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. to RCW 41.27.726 and all other employers contributed the remaining 60.20 percent of employer contributions. The collective net pension liability (asset) was measured as of June 30, 2015, and the actuarial valuation date on which the total!2ension liabilitjL�assetl is based was as of June 3 �21L 1 vki the total pension liability to the measurement date. Pension Expense For the year ended December 31, 2015, the city of Tukwila recognized pension expense as follows: related to pensions from the following sources: Washington State Auditor's Office B-80 Page 80 CITY OF TUKIMLA: 2015 CAFR NOTES TO THE FINANCIAL STATEMENTS . ®': ' •'. ® • ' • � _ 1111} i • • . s •1 � Differences between expect Y r and actual experience !actual - - !; ' on pension plan estments Changes of s ! _..� Changes in proportion and differences between ,contrib nd proportionate— • contributions measurement date . �, IA I !I • • • ■ ' '.: - - •• a SII. • � •1 � Differences between expected Y r ,and actual experience and actual investment earnings Ion pension plan investments tChanges of assumptions 'Changes in proportion and differences between contributions and proportionate ishare of contributions date Washington State Auditor's Office Page 81 -81 CITY OF TUKWILA: 2015 CAFR NOTES TO THE FINANCIAL STATEMENTS Washington State Auditor's Office Page 82 -2 e . . 1. • 1 II • _' a ::: - e; - ; Differences between expected land actual experience _ land actual; ion pension plan investments Mi Changes proportion differences between 1 a . contributions and proportionate ishare of contributions Contributions s• -# easurement date Washington State Auditor's Office Page 82 -2 e . . 1. • 1 II Differences between expected ,and actual experience I _ • actual investment earnings on pension plan investments ':Changes in proportion and differences # __ 1 a . ,contributions and proportionate ofcontributions ## Contributions s• -# measurement date Washington State Auditor's Office Page 82 -2 e . . 1. • 1 II Differences between expected :and actual experience iNet difference between projected plan investments Changes�pension proportion and differences between contribution 1 a . and proportionate share of contributions Contributions s• -# measurement date Washington State Auditor's Office Page 82 -2 CITY OF TUKVMLA: 2015CAFR NOTES TO THE FINANCIAL STATEMENTS LIIV HIVdZ51IUIneM-(FcWCF1 -lie UI Lne net penslun-Motinj! III LIIU fUdi UIIUUU PUEXHIDUIZ, , 2016. Other amounts reported as deferred outflows and deferred inflows of resources related to pensions will be recognized in pension expense as follows: M 71124 11- E4,1177TTI 11 TMM; 1101,111T, Washington State Auditor's Office Page 83 B-83 CITY OF TUKVVILA: 2015CAFR NOTES TO THE FINANCIAL STATEMENTS Firemen's Pension System Summary of Significant Accounting Policies Umv 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. 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, 2015, FPF membership consisted of the following: Inactive plan members retired prior to March 1, 1970 0 Inactive plan members retired March 1, 1970 or after 10 Active Plan Members 0 Benefits Provided retirement benefit. There are two types of increases: escalation by salary in proportion to the current salary of the 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 vremiums. Contributions can also come from taxes r)aid pursuant to the Washington State Auditor's Office Page 84 B-84 CITY OF TUKVMLA: 2015CAFR 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. I I V141 0 11 Na .ocal statutes governing the investment of public funds. changing amount actually invested. 1111 7M 11MR71"IMIT R11 z M��� City's Net Pension Liability The components of the City's net pension liability at December 31, 2015 are as follows: Total pension liability $ 1,829,926 Less: Plan fiduciary net position 1,416,506 City's net pension liability $ 413,420 M7 I IPMR) the total pension liability 77.41% Schedule of Changes in the City's Net Pension Liability and Related Ratios Total Pension Liability 2014 2015 Service Cost s.... ....... .. . ... .......... Interest 50,098 49,716 . . ........ . ........ . ..... .. .. .. Changes of benefit terms Differences between expected and actual experience (2,442)] Changes in assumptions Benefit- payments, included- refunds-i'--o-f employee (61,863) (58,277) contributions Net change in total pension liability (11,765) (11,003) .. .......... ........ ..... .. ........ .. Total pension liability— beginning 1,852,693 1,840,929 Total pension liability — ending (a) 1,840,929 1,829,926 Washington State Auditor's Office Page 85 B-85 CITY OF TUKVMLA: 2015CAFR NOTES TO THE FINANCIAL STATEMENTS Plan Fiduciary Net Position Deferred Olulf 16103 of (4,500) Contributions — employer $ 64,114 63,590 Contributions — employee - - I Net investment income 1,805 2,667 I Benefit payments, including refunds of employee Plan fiduciary net position — ending (b) . . .. . .... ............. ..... ..... . .... ... . 1,413,026 1,416,506 I contributions (61,863) (58,277) Administrative expense Deferred Olulf 16103 of (4,500) Other Resources ' Differences between Net change in plan fiduciary net position 4,056 3,481 Plan fiduciary net position — beginning 1,408,970 1,413,026 Plan fiduciary net position — ending (b) . . .. . .... ............. ..... ..... . .... ... . 1,413,026 1,416,506 City's net pension liability — ending (a) — (b) $ 427,903 413,420 . ........ .. .. .. ....... .. . ... .... .... ....... . .. .. . ... ...... ........ .............. Plan fiduciary net position as a percentage of the 76.76% 77.41% total pensio!! li� �ilit y pension plan investments Totals Covered -employee payroll ... . ............ 2,442 1 _---- ............. ........ . .. City's net pension liability as a percentage of n/a n/a covered -employee payroll Deferred Outflows of Resources and Deferred Inflows of Resources At December 31, 2015, the City of Tukwila reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: f T "_1 I i W41 i"Ift, I WA A; • "IM-406"Mofti"IN' 2016. Other amounts reported as deferred outflows and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Washington State Auditor's Office Page 86 B-86 Deferred Olulf 16103 of Deferred Inflows of Resources, Resources ' Differences between expected and actual 2,442 -experience Net difference between projected and actual investment earnings on 70,339 pension plan investments Totals 70,339 2,442 1 f T "_1 I i W41 i"Ift, I WA A; • "IM-406"Mofti"IN' 2016. Other amounts reported as deferred outflows and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Washington State Auditor's Office Page 86 B-86 CITY OF TUKWILA: 2015 CAFR NOTES TO THE FINANCIAL STATEMENTS endedYear Decembet 1 s #' # # i Actuarial Assumptions The total pension liability was determined by an actuarial valuation as of December 31, 2014, using the following actuarial assumptions, applied to all periods included in the measurement: Inflation 2.75% Salary increases 3.75% Investment rate of return 2.75% # - •. • • .• • r • -11 r 10101.101w r a - W Tr • years forand of - and expected • • plan assets over period of • - - ' of ^ expected -' • of between the first day of r date of 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 than the current rate: City's net pension liability I% Decrease Current Discount 1% Increase Rate Basis of Valuation Benefits 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 !- on ' 0 Washington State Auditor's Office Page 87 -87 CITY OF TUMILA: 2015CAFR NOTES TO THE FINANCIAL STATEMENTS Member Eligibility: age 5Oand 25years ofservice 0RCVV4ij8.D4O cnAge 5Oand five years ofservice URCW41.28.OAD . Amount of benefit: 5O%ofsalary plus anadditional 296for each year ufservice inexcess of25years. Maximum benefit ofGO%ofsalary (does not apply for Non Duty Death Benefit those retiring after July 1.2DDG). Survivor Eligibility: spouse orchild Amount ufbenefit: continuation ofthe firefighters benefit. (if spouse --same, Special Provisions plus additional 5% of salary per child. If no apouoe-- 3096 ofsalary for first child, 1O96for each additional child. Maximum of8O96nfoa|ery). Duty Disability Retirement Benefit Member Eligibility: disabled after six-month waiting period. Amount cfbenefit: determined the same aoService Retirement Benefit. Commences: when a firefighter would have had 25 years of service (RC' Recovery: restoration toservice. Survivor See Survivors Benefit section under Service Retirement. Non Duty Disability Retirement Benefit Member Eligibility: disabled after 90 -day waiting period. Amount of benefit: 5096 of salary, orservice retirement benefit, ifgreater. Recovery: see Duty Disability Retirement. Limitations: no benefits payable if firefighter employed elsewhere when disabled. Survivor Eligibility: spouse orchild Amount of benefit: ' 33.3%howidow orchildren only. 45.8Y60owidow and one child. 47.6940owidow and two children. 58.O%howidow and three children. Duty Death Benefit Eligibility: spouse or child Amount of benefit: If spouse — 50% of salary plus an additional 5% of sala per child; maximum benefit of 60% of salary. If no spouse — 50% of salary Non Duty Death Benefit Eligibility: spouse or child Amount of benefit: provisions the same as Survivor's Benefit under Non -Du Disability Retirement. Special Provisions Under disability or death benefits, a surviving spouse may elect a lump-su payment of $5,000 in lieu of future monthly benefits. Vesting Termination after 20 years of service (RCW 41.18.130) or five years of servil Deferred Benefit Commences: when a firefighter would have had 25 years of service (RC' Amount of benefit: 2% of salary for each year of service. Other provisiol apply, see statutes. Death while vested prior to commencement of benefits: payment of firefighte deferred benefit to spouse or child. Washington State Auditor's Office Page 88 CITY OF TUKVVILA: 2015CAFR NOTES TO THE FINANCIAL STATEMENTS ��- Benefits Payable Annual increase proportionate to the increase in the Seattle -area C Under LEOFF Minimum increase at least 2% each year. Type 1 Escalation by salary in proportion to current salary or rank from which t firefighter retired. Type 2 Annual increase proportionate to the increase in the Seattle -area C Minimum increase at least 2% each year. Applicability Type I applies to firefighters who retired from service after 1969, th survivors, and to firefighters who retired for duty disability (but not th survivors) after 1961. Type 2 applies to all other types of monthly benefits Minimum Benefit After April 25, 1973, a minimum benefit of $300 per month to all retir firefighters and their survivors. This minimum is increased by the CPl. 7uneral Benefit $500 RCW 41.18.140, no provision under RCW 41.26. Participant Summary January 1, 2015 4Vaa- -rMau'"f ate-fi-ff �11111110 rimomelao H rA7MM-V--TiWM •- ;Tv at the dates indicated. Assumption Rates Actuarial Cost Method Entry Age F -ITT- M -TRI TWRTINTIM— January 1, 2015 2.75% Washington State Auditor's Office B-89 Page 89 Service Retirees �11111110 rimomelao H rA7MM-V--TiWM •- ;Tv at the dates indicated. Assumption Rates Actuarial Cost Method Entry Age F -ITT- M -TRI TWRTINTIM— January 1, 2015 2.75% Washington State Auditor's Office B-89 Page 89 CITY OF TUKWLA: 2015CAFR NOTES TO THE FINANCIAL STATEMENTS RP -2014 mortality table, total dataset, fully generational 'lealthy Mortality 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 generatio Disabled Mortality with mortality improvement scale MP -2014 set forwa two years for males and females. Spouse Age We assumed that wives are three years younger than] husbands. ONNOM12- I. I . I - . If I "Im"BION WIN 011111 N441 Iff IUIIY-Lfdllfl Udle, anU '91510n eAperlSeb tUf LEOFF f=rlaf] I leurees. Nepenuent SpultSes anu MOW ar The Health Plan's actuary is Healthcare Actuaries. The Health Plan does not issue a separate standalone financial report. ij r M11 =.k. M. As of December 31, 2015, there were 38 retirees meeting the eligibility requirements of a LEOFF I 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. AM== Washington State Auditor's Office Page 90 B-90 We based the long-term expected rate of return on pension plan investments assumption on the nature Discount Rate (or Investment and mix of current and expected pension plan assets Return) over a period of time representative of the expected length of time between the first day of service and dWA of the last benefit payment. The rate of 2.75% was selected. Cost of Living 2.75%, based on SSA OASDI 2014 report. Salary Increases (for calculated �,enefit increases based on 3.75%, based on SSA OASDI 2014 report. rank) RP -2014 mortality table, total dataset, fully generational 'lealthy Mortality 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 generatio Disabled Mortality with mortality improvement scale MP -2014 set forwa two years for males and females. Spouse Age We assumed that wives are three years younger than] husbands. ONNOM12- I. I . I - . If I "Im"BION WIN 011111 N441 Iff IUIIY-Lfdllfl Udle, anU '91510n eAperlSeb tUf LEOFF f=rlaf] I leurees. Nepenuent SpultSes anu MOW ar The Health Plan's actuary is Healthcare Actuaries. The Health Plan does not issue a separate standalone financial report. ij r M11 =.k. M. As of December 31, 2015, there were 38 retirees meeting the eligibility requirements of a LEOFF I 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. AM== Washington State Auditor's Office Page 90 B-90 CITY OF TUKWILA: 2015 CAFR NOTES TO THE FINANCIAL STATEMENTS changes in th City's net OPEB obligation. * (i) is the assumed interest rate that year, 4% in 2013, 2.75% in 2014 and 2.75% in 2015 ANNUAL DEVELOPMENT OF OPEB COST 2009 1,366,284 40,459 61,839 1,344,904 335,265 2010 1,366,284 90,941 143,332 1,313,893 317,771 2011 1,264,522 112,598 213,809 1,163,311 335,090 2012 1,264,522 145,727 287,945 1,122,304 404,007 2013 1,264,522 174,458 359,904 1,079,076 878,755 2014 1,903,679 171,067 388,580 1,686,166 905,974 2015 2,585,779 146,904 452,441 2,280,242 477,292 * Based on a 21 -year closed amortization as of January 1, 2008 1,009,639 1,818,820 1,031,019 996,122 2,814,942 1,048,513 828,221 3,643,163 929,432 718,297 4,361,460 860,515 200,321 4,561,781 385,767 780,192 5,341,973 997,705 1,802,950 7,144,923 2,108,487 Washington State Auditor's Vjftcv Page 91 2013 20114 2015 Annual required contribution (ARC) 1,264,522 1,903,679 2,585,779 Interest on Net OPEB Obligation 174.458 171.067 146,904 Adjustment to ARC (359.904) (388580) (452.441) Annual OPEBcost (expense) 1.079.076 1.888.166 2.280.242 Employer contributions (878.755) (905.974) (477.292) Change in Net OPEBObligation 200.321 780.192 1.802.950 Net OPEB Obligation at Beginning of year 4.381.460 4.561.781 5.341.873 Net bPEB Obligation at End 6f,vear 4,561,781 5,3 1,973 $ 7j144,923- * (i) is the assumed interest rate that year, 4% in 2013, 2.75% in 2014 and 2.75% in 2015 ANNUAL DEVELOPMENT OF OPEB COST 2009 1,366,284 40,459 61,839 1,344,904 335,265 2010 1,366,284 90,941 143,332 1,313,893 317,771 2011 1,264,522 112,598 213,809 1,163,311 335,090 2012 1,264,522 145,727 287,945 1,122,304 404,007 2013 1,264,522 174,458 359,904 1,079,076 878,755 2014 1,903,679 171,067 388,580 1,686,166 905,974 2015 2,585,779 146,904 452,441 2,280,242 477,292 * Based on a 21 -year closed amortization as of January 1, 2008 1,009,639 1,818,820 1,031,019 996,122 2,814,942 1,048,513 828,221 3,643,163 929,432 718,297 4,361,460 860,515 200,321 4,561,781 385,767 780,192 5,341,973 997,705 1,802,950 7,144,923 2,108,487 Washington State Auditor's Vjftcv Page 91 CITY OF TUKVVlLA: 2015CAFR NOTES TO THE FINANCIAL STATEMENTS obligation were as follows: PERCENTAGE OF ANNUAL OPEB COST CO&TM!ITFD_ $16,103 $16,103 0% $581 4% Percentlacie of 14,805 14,805 Annual, OPEB Employer. Annual OPEB Net 'OPEB FiscalNear Ending cost Contribution:, Cost Contributed Obligation December 31, 2013 1,079,076 878,755 81 4,561,781 December 31, 2014 1,686,166 905,974 54 5,341,973 December 31, 2015 2,280,242 477,292 21 7,144,923 Funded Status and Funding Progress liability for benefits was $30.2 million, and the actuarial value of assets was $0, resulting in an unfunded actuarial accrued liability (UAAL) of $30.2 million and a funded ratio of 0%. The funded ratio is 0%, because the City funds benefits on a pay-as-you-go basis. 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 Only four valuations completed to date ---------- 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 each valuation and the historical pattern of sharing of benefit costs between the City and Members of the Health M11Ivii-P, mr, ks%- 131 Ism I MRS. with the long-term perspective of the calculations. Washington State Auditor's Office B-92 Page 92 CITY OF TUKVvlLA: 2015CAFR NOTES TO THE FINANCIAL STATEMENTS AMR as a level c period at December 31, 2015 was 13.0 years. Assumption Rates Actuarial Cost Method Entry Age Normal method. Measurement Date January 1, 2015 Inflation Rate 3.00% Discount Rate (or Investment Selected the assumed discount rate of 2.75% based on the five - Return) 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 I actives are fully eligible for retirement. 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 The City reimburses Medicare retirees for Part B premiums. The Reimbursements 2015 annual premium is $1,258.80. Affordable Care Act (ACA) Ages 55-64 All Other Excise Tax Threshold Single $11,850 $10,200 Washington State Auditor's Office Page 93 B-93 CITY OF TUKVVlLA: 2015CAFR NOTES TO THE FINANCIAL STATEMENTS ACA Base Premium Assumed annual plan costs upon which the ACA tax calculation is based: Medicare ineligible $ 28,071 Medicare eligible $ 16,557 ACA TaxWe assumed a 40% excise tax rate on premiums above the ACA ;hreshold. • 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 2014b using baseline assumptions. Excise Pre- Part 8 Long -Term Tax Year Medicare Medicare Dentat Vision Premiums Care Threshold 2015 9.00% 6.50% 5.5% 4.0% 5.4% 5.0% 0.00% 2016 7.50% 6.50% 5.0% 4.0% 5.4% 5.0% 0.00% 2017 6.50% 6.00% 4.5% 4.0% 5.4% 5.0% 0.00% 2018 5.50% 5.50% 4.0% 4.0% 5.4% 5.0% 4.24% 2019 5.50% 5.50% 3.5% 3.5% 5.4% 5.0% 3.24% 2020 5.46% 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 inctude assumed inflation of 3% for alt future years. is increasing or decreasing over time relative to the actual. MGM= UA rora q.11MI111IMM I 111101,1111117TI4 Service for its General 0 • ligation Bonds. 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. Washington State Auditor's Office Page 94 B-94 CITY OF TUKVMLA: 2015CAFR NOTES TO THE FINANCIAL STATEMENTS * 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. 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. 16ft�fy*# piw4iggs; Xigpx,�Wi,,--&*� 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. repaid through assessments collected from property owners benefiting from related improvements. Although the 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. fmm� MEZEME�M= M. 1011106,11110"11 W1011WRIM119111 WIN 11110111110 isp aye net or unamortizea premilin or U15UU1111L, arinTal ItILP-1V51. tcApense is 5017113aseu oy 0 0 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. 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. The City is in compliance with all Washington State debt limitation statutes and bond indenture agreements. tWP Isia-tern. debt tra-rsqrtkQ�-irs of fte CitX for tWe vegr ended December 31. Washington State Auditor's Office B-95 Page 95 CITY OF TUKVVILA: 2015CAFR NOTES TO THE FINANCIAL STATEMENTS A I F Outstanding 01/01/2015 $16,638,221 $6,687,500 $2,580,000 $ 5,742,866 $4,046,602 $ 6,650,400 $5,341,973 $47,687,562 Added 8,075,000 - 1,742,527 501,484 3,464,525 - 1,802,950 15,586,486 Retired / redeemed (1,655,507) (605,000) (2,580,000) (597,892) (3,316,650) (385,200) - (9,140,249) Outstanding 12/31/2015 $23,057,714 $6,082,600 $1,742,527 $ 5,646,458 $ 4,194,477 $ 6,265,200 $ 7,144,923 $54,133,799 Add Premiums, Subtract Discounts 1,416,461 450,566 197,200 761.523 compensated absences. T ear r- aea December-' ; 3i P 2016 $ 2017 2018 2019 2020 2021-2025 2026-2030 2031-2035 2036-2040 'Totals $,2 6�ve'nnrnekavA' qtivitle�� Bonds, 4,241,428 716,242 1 179,200 249,088 450,000 271,830 6,107,788 2,062,196 634,436 184,800 243,173 445,000 257,655 3,827,260 ft, 143,521 549,296 190,800 237,069 445,000 243,638 3,809,324 1,416,461 450,566 197,200 229,039 445,000 223,613 2,961,878 5,895,371 1,382,838 1,115,600 1,018,682 2,225,000 813,794 12,451,284 0", 610, 000 638,288 1,360,800 765,620 1,402,500 239,188 7,016,395 t,756,000 234,239 963,200 308,683 3,298,423 2026-2030 175,951 - 1,902,000 211,365 5,147 2,113,365 2016 $ 144,823 $ 39,189 $ 599,468 $ 28,232 $ 811,712 2017 143,282 37,386 599,468 25,235 805,371 2018 149,659 34,033 599,468 22,238 805,398 2019 150,736 30,531 599,468 19,240 799,976 2020 156,614 27,004 599,468 16,243 799,329 2021-2025 821,462 79,052 2,360,873 37,036 3,298,423 2026-2030 175,951 4,117 205,875 5,147 391,090 2031-2032 - - 82,370 618 82,988 Totals=",, 1.742,527' ,251.314 "I, " 5.646.4581, 11 153.989",$, 7.7t4.288 Washington State Auditor's Office Page 96 B-96 CITY OF TUKWILA: 2015 CAFR NOTES TO THE FINANCIAL STATEMENTS 1KII11MCBMIX j III; • Interest OUTSTANDING OUTSTANDING Due Wthin ITEM Rates Maturity Authorized 12131)2014 ISSUED REDEEMED 12131/15 One Year " GOVERNMENTAL ACTIMTIES: Limited General Oblivation (GO) Bonds Payable 2008 Refunding-Streets/Facilities 4A0-6.00 12/01/19 6,180,000 3,450,000 630,000 2,820,000 655,000 2010 Streets / Equipment 2.00-5.41 12/01/24 5,870,000 4,350,000 380,000 3,970,000 395,000 2011 Refunding Streets (2003 GO) 1.25-4.00 12/01/23 4,620,000 4,185,000 405,000 3,780,000 420,000 2013 LTGO-MPD Pool Improw 2.00.4.00 12/01/22 1,000,000 803,221 99,507 703,714 93,737 2014 LTGO-Urban Renewal 0.85-4.86 12/01/34 3,850,000 3,850,000 141,000 3,709,000 149,000 2014 LTGO-Line of Credit 1 Mo. LIBOR+ 1.0% 12/01/17 2,250,000 - 2,250,000 - 2,250,000 - 2015 LTGO-Interurban, BAR 2.25-3.00 12/01/35 5,825,000 - 5,825,000 - 5,825,000 220,000 Total Bonds Payable 29,595,000 16,638,221 8,075,000 1,655,507 23,057,714 1,932,737 Issuance premiums - 562,755 309,758 110,990 761,523 - Net Bonds 'Payable' 29,595,000 17,200,976 ' 8,384,758 1,766,497 23,819,237 1,932,737 Due to Other Governments 2009 Facility SCORE 3.00 6.62 01101/39 6,898,800 6,430,400 - 165,200 6,265,200 171,600 2010 Valley Com Refunding 4.30-5.75 12/01/15 1,065,000 220,000 220,000 - - Total Due OtherGovemments 7,963,800 6,650,400 385,200 6,265,200 171,600' Special Assessment Debt Klickitat Urban Access Project 3.150-5.375 01/15/29 6,687,500 6,687,500 605,000 6,082,500 670,000 Total Special Assessment Debt 6,687,500 6,087,500605,000 6,082,500 ' '' 6701,000 Other Post-Employement Benefits Payable 5,341.,973 1,802,950 7,144,923 Compensated Absences: '3,740,162 3,193,766 3,073,455 - 3,860,473 . Total Governmental Funds $44,246,300 $ 39,621,012 $13,381,474' $5,830,152 $ 47 172,333 $2,774,337: • • • - ' • - •♦ `a • -• IN •• •. • •• • 111 • Washington State Auditor's Office Page 97 -97 CITY OF TUKWILA: 2015 CAFR NOTES TO THE FINANCIAL STATEMENTS Compensated Absences 306,440 270,759 243,195 334,004 14,826 Total Business-1-ylie Activities "$19,812,178 8,664,993 $ 2,514,770 $3,456,776 7,722,989 $ 759,117 TOTAL ALL FUNDS $64,058,478 $,48,286,005 $15,896,244 $9,286,927 1 $ 54,896,322' $'3,533,454' •Z [CaUM-1r, " F__". '"".kk 0 ' 0 General obligation bonds Interest - $23,057,714 OUTSTANDING $ 6,082,500 - OUTSTANDING DueWithIn, ITEM Rates Maturity Authorized, 12M1/2014 ISSUED REDEEMED 12/31115, One Year BUSINESS -TYPE ACTIVITIES: 6,265,200 Employee leave benefits 3,860,473 334,004 4,194,477 Net Prem i ums/Dis counts 761,523 - Bonds Payable: Other Post -Employment Benefits 7,144,923 - 7 144,923 111MOR11016 - 4-2 1995 Water/Sewer Revenue 4.15-6.63 02/01/15 $ 4,500,000 $ 375,000 $ $ 375,000 - $ 2006 Water/Sewer/SV\M Revenue 4.004.50 12/01126 $ 3,180,000 $ 2,205,000 $ $2,205,000 - $ 2015 Water/Sewer/SVYM Refunding 2.34 12/01/26 1,742,527 - 1,742,527 - 1,742,527 144,823 Total Bonds Payable 9,422,527 2,580,000 1,742,527 2,580,000 1,742,527 1144,823 Unamortized Defer -red Credits (Charges): Issuance Premiums - 35,770 - 35,770 - - Issuance Discounts - (82) - (82) - - Net Bonds Payable 9,422,527 2,615,687 1,742,527 2,615,688 1,742,527 144,823 Public Works Trust Fund Loans: 2003 Loan-Water/Sewer 0.50 06/01/21 273,870 101,180 - 14,454 86,725 14,454 2003 Loan -Surface Water 0.50 06101/21 219,725 81,175 11,597 69,578 11,597 2004 Loan-Water/Sewer 0.50-2.00 06/01124 5,016,000 2,728,862 272,886 2,455,976 272,886 2004 Loan -Surface Water 0.50-2.00 06/01/24 684,000 372,118 37,212 334,906 37,212 2004 Loan -Surface Water 1.00 06/01/24 4,196,056 2,221,441 222,144 1,999,297 222,144 2014 Loan -Sewer 0.5 06/01/32 - 238,090 501,484 39,599 699,975 41,175 Total Public Works Trust Fund Loans- 10,389,651 5,742,8166 501,484 , 5971,892, 1, 5,646,458 5139,468 Compensated Absences 306,440 270,759 243,195 334,004 14,826 Total Business-1-ylie Activities "$19,812,178 8,664,993 $ 2,514,770 $3,456,776 7,722,989 $ 759,117 TOTAL ALL FUNDS $64,058,478 $,48,286,005 $15,896,244 $9,286,927 1 $ 54,896,322' $'3,533,454' •Z [CaUM-1r, " F__". '"".kk 0 ' 0 General obligation bonds $23,057,714 $ - $23,057,714 Special assessment bonds $ 6,082,500 - 6,082,500 Revenue bonds - 1,742,527 1,742,527 Public Works Trust Fund loans - 5,646,458 5,646,458 Due to Other Governments 6,265,200 - 6,265,200 Employee leave benefits 3,860,473 334,004 4,194,477 Net Prem i ums/Dis counts 761,523 - 761,523 Other Post -Employment Benefits 7,144,923 - 7 144,923 111MOR11016 - 4-2 Washington State Auditor's Office B-98 Page 98 CITY OF TUKVVILA: 2015CAFR NOTES TO THE FINANCIAL STATEMENTS 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. ",I'll �111 IMME= item 1�5% 2.5% Legal Limit $ 80,929,877 $ 134,883,128 $ 269,766,256 $ 404,649,384 Outstanding Net Indebtedness 29,212,266 29,212,266 29,212,266 29,212,266 'tonds, 2006, with an effective interest rate of 4.494518 percent. KATMAI 061- # 0 0 0 .1 - 0 T, .16mal 0 defeased and the liability for those bonds has been removed from the business -type activities column of the statement of next position. The reacquisition price exceeded the net carrying amount of the old debt by $80,707. This transaction resulted in an economic gain (difference between the gresent values of the old and new debt service naMments) of $147,882, Long-term Liabilities other than debt 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. It * ^ 11 W a 111.0 - HIM - 'N W -RAO AIIIIIIJC(A 111U1,111151 a PdRial 111113 074-�_5%#Ttnuenter ramuajr, rerrrvrayut ine'RTURUMU 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. Ta 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. Washington State Auditor's Office Page 99 B-99 CITY OF TUKVMLA: 2015CAFR NOTES TO THE FINANCIAL STATEMENTS 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 second of 15 annual installments for the assessments was due by October 16, 2015. =#10r77=47.1XIlk - 1X61Kr0;-W-1l property owners chose to pay the assessment in full. Because of the additional principal payments received, the City has enough funds in the LID No. 33 funds to meet debt service requirements in 2016 and pay $157,500 additional principal. Estimated Arbitrage Rebate 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, 2015 is $0 for its tax-exempt bond issues subject to the Tax Reform Act. 4 0 $slid 11-1 A I Construction Commitments. As of December 31, 2015, the City share of contractual obligations on construction projects total $5,101,710. =t Gowmmental Acti�ties -,z;Commitment 42nd Ave S Phase Ili/Gilliam Creek SSWM 222,326 53rd Ave S Street Improvements 498,991 42nd Ave S Roadside Barriers 107,383 Interurban A\e S 1,525,419 Tukwila Urban Center - Pedestrian/Bicyle Bridge 90,306 TUC Transit Center 282,937 Ando\er Park W Street/Water 381,931 Duwamish Gardens 1,449,884 Other go\emmental projects 75,426 Total Go\o6mmentgl Activities 6341603,:, MEN=. Business4y0,,Acti\4ies; Projects :'C6mrnitment Macadam Water Upgrade 114,664 Andover Park East Water/Sewer 101,144 East Marginal Way South Storm Pipe Replacement 204,380 Other Utility related projects 46,920 Total Businew!TypeActivities Totaf CIP/Commitments, Washington State Auditor's Office Page 100 -100 CITY OF TUMMILA: 2015 CAFR NOTES TO THE FINANCIAL STATEMENTS NOTE 12 — POTENTIAL POLLUTION REMEDIATION AND OTHER LIABILITIES L, -T - I - LI I - I - QI -1 1 e potential liability is not significant and not estimable. NOTE 13 — RISK MANAGEMENT L Is AIL 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 179 Members. New members initiall�,A contract for a three-0ear term and thereafter automaticallo renew 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, public officials' errors or omissions, stop gap, and employee benefits liability. Limits are $4 million per occurrence self-insured layer, and $16 million per occurrence in the re -insured excess layer. The excess layer is insured by the purchase of reinsurance and insurance and is subject to aggregate limits. Total limits are $20 million per occurrence subject to aggregate sublimits in the excess layers. The Board of Directors determines the limits and terms of coverage annually. Insurance coveraoe for RroRel h4sical damwe, fidelW, inland marine, and boiler and mlilinj automobile R �Iamage are self-funded from the members' deductible to $750,000, for all perils other than flood and earthquake, and insured above that amount by the purchase of insurance. In-house services include risk management consultation, loss control field services, claims and litigation i_��_Mrvt rt land use problems, insurance brokerage, and lobbyist services. A "PAWMA-44"Awww"A "-- Whww "__ _64-41"74 WWW"N' INAM . I 1111=0111;�N WW11111611 Nammi"aw IWIINIIIN1011111 I 0 ally itnuing snoritaii. I will 4 mdaisiomm An investment committee using 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 organization. The WCIA Executive Director reports to the Executive Committee and is responsible for conducting the day to day operations of WCIA. Washington State Auditor's Office -101 Page 101 CITY OF TUKVVILA: 2015CAFR NOTES TO THE FINANCIAL STATEMENTS 'M#M 11IMMOM for employee dishonesty coverage. I" IMMI 61, It rrs'71 M f b I I M f M-UPIT I IT&t-e-ff r e jec-g-j" past three years, no settlement has exceeded insurance coverage. The City self -insures for unemployment benefits. This is budgeted each year and has not exceeded $60,000 per year. 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. Me M. 111 .10 0 1 L, " a lit 11170 TSTM 141414 r contributes an appropriate amount each year to pay premiums and claims. Liabilities include an actuarially to 2.5 times the IBNR reserve. : , s Mr QVP estimates to mar -end. No exRlicit mg.9in Wr illimi PW4 ,7. Wjjijnj 0 1141 R �I I I J, I iv, F-11WAK01 2 0 MA 111 0 111507-11 N 11SUMMM, s11119TIM of Tear $ 2,260,000 $ 1,669,250 $ 285,750 $ 214,250 M- I ; I I 1 0 MEMI-j�i I P1. $ is- WEE. M. - ��MIMROYMAOIIIIR ........... M 111 IM01 0 :&Elmo] or-IIINCIA-1 Washington State Auditor's Office -102 Page 102 CITY OF TUKWILA: 2015 CAFR NOTES TO THE FINANCIAL STATEMENTS The City also implemented Governmental Accounting Standards Board Statement 68, Accounting and Financial Reporting for Pensions (see Note 9, Pension Plans). On a government -wide basis, this change in accounting principle resulted in a reduction of beginning fund balance for governmental activities of $9,551,003 and of $2,308,254 for the business -type activities. I U7V77W_J# � I - properties in 2015. The properties were purchased for a total of $5,201,798. The City plans to demolish the ;tructures and hold the property as an investment until sale to a developer. Because assets held for resale cannot 141AZIMI 11411141 LIUMMIM11 LZME.-ki 01:41LO [its I 1141wil mlprws Ion milli Loamr.] r. 'a vml���� In 2014, the cities of Tukwila, SeaTac, and Des-?Tioines signed an interlocal agreement (ILA) creating a Tourism Promotion Area (TPA) to encompass the geographical boundaries of the three cities. The TPA was set up so that the City of SeaTac would serve as the legislative body for the TPA. 5 *711111 NTeM- �,* ZTed Effective January 1, 2016 most of the operations of SSVS transitioned to SSRTA. As part of this transition, all of the City of Tukwila employees who worked for SSVS assumed positions with SSRTA. The City also transitioned or terminated most on the contracts executed for the benefit of SSVS. The City of Tukwila has no obligations or liabilities associated with the operations of SSRTA. In the ast the Cit4's lodping tax funds were used to su oort four full time emiloNees with SSVS, as well as some with the cities of Des Moines and SeaTac, Tukwila intends to provide some lodging tax funds to SSRTA. The transition of SSVS to SSRTA will have no impact on the collection of lodging tax funds. The City still retains authority in the collection of the funds and how they are dispersed (subject to the limitations in State law). The transition of SSVS to SSRTA relieves the City of significant financial obligations. The transition of SSVS to SSRTA will cause a small impact to the general fund. The cities of Des Moines and SeaTac contributed over $800,000 a year to the operation of SSVS. The intergovernmental funds resulted in the City's lodging tax being charged approximately $97,925 in indirect cost allocations. Now that these intergovernmental funds are no longer going to come to the City, the indirect charge for 2016 is estimated to be approximately $35,000. It should be noted that the termination • operating SSVS will also • in a significant reduction in costs to the City to support overnight tourism. Washington State Auditor's Office Page 103 -103 CITY OF TUKWILA: 2015 CAM REQUIRED SUPPLEMENTAL INFORMATION CITT OF TUKWILA, WASHINGTON SCHEDULE OF REVEN .7—C BUDGET AND ACTUAL I 10 O'k, I ;I Taxes $ 42,301,943 $ 44,424,639 $ 45,201,369 $ 776,730 Licenses and permits 2,105,089 2,255,089 2,242,256 (12,833) Intergovernmental 4,648,899 4,972,499 4,626,463 (346,036) Charges for services 2,392,787 2,464,537 2,896,446 431,909 Fines and Foreitures 242,829 242,829 261,457 18,628 Investment earnings 86,062 126,052 163,618 37,566 Mscellaneous 97,788 77 97,788 120,887 23,099 Total Revenuesi '77- 51,875,381 583 512 9,06a,'- M" General Government 7,971,301 7,421,301 7,247,117 174,184 Public Safety 27,696,295 29,092,569 28,973,651 118,918 Physical environment 2,002,906 1,952,906 1,919,306 33,600 Transportation 3,066,264 2,866,264 2,820,022 46,242 Economic environment 4,445,449 4,470,221 4,328,177 142,044 Culture and recreation 4,092,425 4,265,425 4,259,532 5,893 Capital outlay 39,040 226,040 196,589 29,451 Excess Of Revenues And 8; 2 8,,707 4 7 79,395 2,06t70 ra Washington State Auditor's Office Page 104 -104 9 0[ Pwal a Mel 0 tZA principies. 60agetary accounts are integrated in Tuna ledgers Tor all budgeted Tunas, but the Tinand 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. A its 214,4111019*4 11-1 ITZA[zlef: a im wee IF11111011i ApenUILLIU5 or InU1,14maial nctions ana activities Dy o6ject class. Any unexpended appropriation Roaances Rapse 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. 11111MORM111 W11111111Lb Itrebelimij if] trio uabiu 1111drival t5tater-nemb incitue Owl Me orlyindi MOTTO dnu ine TIM amenuemt budget as approved by the City Council. 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 nol chargeable to the enterprise funds. Transportation Includes all street and arterial street maintenance and construction. Economic Environment Reflects the planning and building inspection activities. k - - at the dates indicated. Washington State Auditor's Office B-1 05 Page 105 CITY OF TUKWILA: 2015 CAFR REQUIRED SUPPLEMENTAL INFORMATION Z.-OO'fER DEFRIED BEREFIT PENSIOK NET PENSION LIABILITY MTXT 4- "'w'Zoo 4. - 4- I'luu,zoo 0 lo,oul'u1b 45.t53% 59.10% uevern uer a-1, Lulu U. I fJ0'dd-/b Z 0,,duz,541 $ - $ t5,;eUz,b41.L0 $ 15,405,589.00 40.26% 89.20% PSERS oropoq!ona!alshare propffitronaro of JEmploye'' Ernpflo'y'ars:"'�'�,:, of the plan fjou�l P- tlohatii sbare liability Po share '�F;qe "s net proportion ti N' h, rUT Pr the Pat" ropor, (asset), ition as fiscal", 'pension ilaollity""',"afthe net pension JldbilltyEmployers covered .percentage oft ,Yesir hding:', asset labilit total (nolois 1p"16n,liabilitj, December 31, 2015 0.052748% $ 9,628 $ $ 9,628 $ 154,426 6.23% 95.08% I T$TjW December 31, 2015 0.077944% $ (939,397) $ (939,397) $ 76,144 -1233.71% 127.36% December 31, 2015 0.519159% $ (5,335,916) $ (2,123,832)- $ (7,459,748) $ 15,113,237 -49.36% 111.67% Until a full 90 -}rear trend is compiled, govemments should present information only for those years for Mich information is available. Washington State Auditor's Office -106 Page 106 December 31, 2015 $ 873,248 $ (873,248) $ - $ 15,498,171 5.63% December 31, 2015 $ 10,105 $ (10,105) $ - $ 156,084.0 6.47% December 31, 2015 $ 776,719 $ (776,719) $ - $ 15,380,541 5.05% ' Until a full 10 -year trend is compiled, governments should present information only for those years for Mich information is available. Washington State Auditor's OJRce B-1 07 Page 107 'L 'ess :,ContribuUons ion'tithe-1— —;0' , 6 'b- pfttn ution,as a Statutorily, §t6tut on y. fj:ier icnital�a',of, Fiscal .Determined, min ter ed--"�' '0-ted Erriplio'yae , 'Co%ared Efnplio ee y Year Efidin g "Contribution Coriirb 6 n Clancy (Itxc roff,, December 31, 2015 $ 686,881 $ (686,881) $ - $ 15,654,255 4.39% December 31, 2015 $ 873,248 $ (873,248) $ - $ 15,498,171 5.63% December 31, 2015 $ 10,105 $ (10,105) $ - $ 156,084.0 6.47% December 31, 2015 $ 776,719 $ (776,719) $ - $ 15,380,541 5.05% ' Until a full 10 -year trend is compiled, governments should present information only for those years for Mich information is available. Washington State Auditor's OJRce B-1 07 Page 107 CITY OF TUKWILA: 2015 CAFR REQUIRED SUPPLEMENTAL INFORMATION SCHEDULE OF FUNDING PROGRESS January 1, 2005 $1,265 $1,182 January 1, 2007 1,336 1,310 January 1, 2009 1,445 1,610 January 1, 2011 1,430 1,582 January 1, 2013 1,416 1,296 January 1,2014* 1,409 1,853 January 1, 2015 1,413 1,841 January 1, 2014 change in actuary and adoption of GASB 67 ($83) 107% $608 N/A (26) 102 463 N/A 165 90 442 37 152 90 0 N/A (120) 109 0 N/A 444 76 0 N/A 428 77 0 N/A Total Pension Liability Service Cost Interest 50,098 49,716 1 . . . ........................ .. . ... . ...... Changes of benefit terms Differences between expected and actual experience Benefit payments, included refunds of employee (58,277) contributions Net change in total pension liability 11, in IM M n .. 1111111M. Plan Fiduciary Net Position Contributions — employer 64,114 63,590 Contributions — employee ---- — ------ Net investment income 1,805 2,667 Benefit payments, including refunds of employee (61,863) (58,277) Washington State Auditor's Office Page 108 -108 Administrative expense(4,500)- 45,951 $ 45,951 - $ 11. •, - Other 50,555 50,555 - fiduciaryNet change in plan position 4,056 52,571 fiduciary net position — beginning 1,408,970 1,413,026 Plan fiduciary net position — ending (b) 1,413,026 1,416,506 liabilityPlan City's net pension . b, 427,903 49,989 - Plan fiduciary net position as a December 31, 2011 54,865 the total pension liability - n/a December 31, 2012 • .. payroll 52,249 - - n/a City's net pension liability as a percentage of 56,962 56,962 - 1 • • fresh- startedThese changes to assumptions and experience differences increased liabilities approximately $567,000. GASB at this date. December 31, 2006 $ 45,951 $ 45,951 - $ - n/a December 31, 2007 50,555 50,555 - - n/a December 31, 2008 52,571 52,571 - - n/a December 31, 2009 48,537 48,537 - - n/a December 31, 2010 49,989 49,989 - - n/a December 31, 2011 54,865 54,865 - - n/a December 31, 2012 52,249 52,249 - - n/a December 31, 2013 56,962 56,962 - - n/a December 31, 2014 64,114 64,114 - - n/a December 31, 2015 63,590 63,590 - - n/a IN Washington State Auditor's Office Page 109 -109 , I . . ------- - REQUIREB-1111Y99WOMM, KU1 MkIfft MA .119101 Notes to Schedule: year; where information is available. Actuarial Valuation Date AnnLial'rilon6y-W6ighted'reite`, ."Iny dirit R UO of um, hot, dfinV64mbfit,�:, ret Asset Valuation Method expense 2011 0.12% 2012 0.20% 2013 0.17% 2014 0.13% 2015 . . .......... . . . ...... 0.19% year; where information is available. Actuarial Valuation Date i January 1, 2015 Actuarial Cost Method I Entry Age Asset Valuation Method Fair Market Value Measurement Date January 1, 2015 W -term expected rate of return on pension based the long on plan investments assumption on the nature and mix of Discount Rate or Investment Return () 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. Cost of Living 2.75%, based on SSA OASI 2014 report. Salary Increases (for calculated benefit increases based on rank) 3.75%, based on SSA OASDI 2014 report. RP -2014 mortality table, total dataset, fully generational with Healthy Mortality mortality improvement scale MP -2014 setback one year for males and set forward one year for females. Washington State Auditor's Office Page 110 B-110 RP -2014 mortality table, total dataset, fully generational with Disabled Mortality mortality improvement scale MP -2014 set forward two years for males and females. We assumed that wives are three years younger than Spouse Age husbands. Under the Firemen's Pension ru und, most adjustments are based on the change in salary for the rank of members held at retirement or based on the Consumer Price Index. Adjustments are determined in accordance with RCW 41.18.150. RCW 41.20 and RCW 41.26 Washington State Auditor's Office Page III B-1 11 CITY OF REQUIRED SUPPLEMENTAL INFORMATION 1 !'; ! ! N _ff'qyj (Rounded to thousands) 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 December 31, 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 1 . 1 • !' 112 a 1111114 ill - ! Assumption Actuarial Cost Method Entry `.- Normal method. Date January 1, 2015 Discount Rate (or Investment Selected the assumed discount rate of 2.75% based on the five - Return) year average investment yield on the investments expected to financeMeasurement the payment of benefits. Healthy. table (headcount w- . -total dataset, generational with mortality improvement scale MP -2014 setback one year for males and set forward one year for females. Washington State Auditor's Office -112 Page 112 CITY OF TUKWILA: 2015 CAFR REQUIRED SUPPLEMENTAL INFORMATION 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. 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 The City reimburses Medicare retirees for Part B premiums. The Reimbursements 2015 annual premium is $1,258.80. Affordable Care Act (ACA) Ages 55-64 All Other Excise Tax Threshold 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- Pan 8 Long -Term Tax Year Medicare Medicare Dental Vision Premiums Care Threshold 2015 9.00% 6.50% 5.5% 4.0% 5.4% 5.0% O.W% 2016 7.50% 6.50% 5.0% 4.0% 5.4% 5.0% 0.00% 2017 6.50% 6.00% 4.5% 4.0% 5.4% 5.0% 0.00% 2018 5.50% 5.50% 4.0% 4.0% 5.4% 5.0% 4.24% 2019 5.5M 5.50% 3.5% 3.5% 5.4% 5.0% 3.24% 2 5.46% 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 3% for all future years. Washington State Auditor's Office Page 113 -113 MCAG NO. 0447 CITY OF TLA Schedule 16 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For the Year Ended December 31, 2015 City of Tukwila, Washington Schedule of Expenditures of Federal Awards For Year Ended December 31, 2015 2 3 4 5 6 Expenditures Federal Agency Federal Program CFDA Other I.D. From Passed Foot - Name / Pass- Name Number Number Pass- From Through To note Through Agency Through Direct Total Subrecipients Ref. Name Awards Awards U.S. Dept of Agriculture Child &AdultCare 10.558 17141471 $ 1,226.40 $ 1,226.40 $ / pass-through from Food Program Off of Superintendent of Public Instruction U.S. Dept of Agriculture Cooperative Forestry 10.664 IAA -14-042/K244-12- 4,700.00 4,700.00 / pass-through from Assistance DG -018 WA St DNR U.S. Dept of Housing Community 14.218 5824592 993.17 993.17 & Urban Development Development Block / pass-through from Grant 5719835 92,905.26 92,905.26 King County Housing & Comm Development Subtotal 93,898.43 93,898.43 U.S.Dept of Justice State Criminal Alien 16.606 2015 -AP -BX -0834 $ 2,029.00 2,029.00 Assistance Prog U.S. Dept of Justice Bulletproof Vest 16.607 NA 6,796.89 6,796.89 Partnership Prog U.S. Dept of Justice Edward Byrne 16.738 2013 -DJ -BX -0715 4,840.42 4,840.42 pass-through from Memorial JAG City of Seattle Program 2014 -DJ -BX -1034 3,241.76 3,241.76 Subtotal 8,082.18 8,082.18 U.S.Dept of Transpor- Highway Planning 20.205 STPUL-1045(007) 552,512.88 552,512.88 tation / pass-through and Construction Interurban Avenue S from WA DOT STPE-CM-1320(002) 514,205.29 514,205.29 Tuk Urb Ctr Ped/Bike BHM-1380(003) 333,443.43 333,443.43 Boeing Access Bridge BHM-1274(009) 231,944.18 231,944.18 Frank Zepp Prev Maint BHOS-1320(004) 115,087.60 115,087.60 Beacon Ave Pre Maint ER -1403(006) 92,616.43 92,616.43 1-5/Klickitat Dr -Slope SRTS-1320(003) 35,495.54 35,495.54 Thorndyke Safe Route BHM-1288(005) 31,623.51 31,623.51 Grady Wy Prev Maint GCB2135 4,500.00 4,500.00 Expans Urb Ctrs & DC Subtotal 1,911,428.86 1,911,428.86 The accompanying notes to the Schedule of Expenditures of Federal Awards are an integral part of this schedule. Washington State Auditor's Office -114 Page 114 MCAG NO. 0"7 CITY OF TUKWILA Schedule 16 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For the Year Ended December 31, 2015 through from City of Seattle The accompanying notes to the Schedule of Expenditures of Federal Awards are an integral part of this schedule. Washington State Auditor's Office Page 115 -115 2 3 4 5 6_ Expenditures Federal Agency Federal Program CFDA Other I.D. From Passed Foot - Name i Pass- Name Number Number Pass- From Through To note Through Agency Through Direct Total Subrecipients Ref. Name Awards Awards U.S. Dept of Transpor- Federal Transit 20.500 13-071 $ 670,069.58 $ 670,069.58 $ tation / pass-through Capital Investment Tukwila Transit Center from King County U.S.Dept of Transpor- State & Community 20.600 Distracted Driving 1,011.60 1,011.60 tation / pass-through Highway Safety from WTSC U.S. Dept of Transpor- State & Community Traffic Safety Equip. 2,859.59 2,859.59 tation / pass-through Highway Safety from WASPC Subtotal 3,871.19 3,871.19 U.S. Dept of Transpor- National Priority 20.616 King County Distract- 1,188.60 1,188.60 tation / pass-through Safety Programs ed Driving from WTSC Click It Or Ticket 476.56 476.56 I Subtotal 1,665.16 1,665.16 U.S. Environmental Puget Sound Action 66.123 14-63401-007 28,271.00 28,271.00 Protection Agency/ Agenda:Tech Inv & pass-through from WA Implementation St Dept of Commerce Assistance U.S.Dept of Health & Partnerships To 93.331 CDIP3908 20,859.48 20,859.48 Human Services/pass- Improve Community through Seattle & King Health CDIP4007 2,083.12 2,083.12 County Public Health Subtotal 22,942.60 22,942.60 U.S. Dept of Homeland National Urban 97.025 WA -TF1 1,408.95 1,408.95 Security / pass- Search & Rescue through from Pierce Response System County Emergency Management U.S.Dept of Homeland Emergency Mgmt 97.042 EMW-2014-EP-00033 58,652.24 58,652.24 Security / pass- Performance through from WA St Grants (EMPG) Milita!y De t - U.S.Dept of Homeland Assistance to Fire- 97.044 EMW-2013-FO-02617 $ 1,340.00 1,340.00 Security fighters Grant U.S.Dept of Homeland Homeland Security 97.067 I 10,342.91 10,342.91 $ I Security / pass- Grant Program through from City of Seattle The accompanying notes to the Schedule of Expenditures of Federal Awards are an integral part of this schedule. Washington State Auditor's Office Page 115 -115 3� �01 11 • • i ! MMEM05-11111-Mrs City of Tukwila, Washington FEDERAL AWARDS For Year Ended December 31, 2015 •: • accounting as the City's financial statements. The City uses th Piccrual basis for proprietary funds. portion of the program costs. Actual program costs, including the City's portion, may be more than shown. Revenue • the Federal government Less: Direct '•"' interest rate subsidies Less: Revenue recognized in 2015 but expended in prior years M, M-1011, 1- 10 -0 0 N Lon 01-1 MA 11190 DR III 1211111 &Z I Ito I I Mkaoiolll a r. 1 VIW I I L911171zle a I I I I* tQ All I I I I Pj I I I a MI $ 3,115,943.27 (188,058.19) (92,853.65) (8,306.04) Washington State Auditor's Office Page 116 -116 We work with our audit clients and citizens to achieve our vision of government that works for citizens, by helping governments work better, cost less, deliver higher value, and earn greater public trust. In fulfilling our mission to hold state and local governments accountable for the use of public resources, we also hold ourselves accountable by continually improving our audit quality and operational efficiency and developing highly engaged and committed employees. As an elected agency, the State Auditor's Office has the independence necessary to objectively perform audits and investigations. Our audits are designed to comply with professional standards as well as to satisfy the requirements of federal, state, and local laws. Our audits look at financial information and compliance with state, federal and local laws on the part of all local governments, including schools, and all state agencies, including institutions of higher education. In addition, we conduct performance audits of state agencies and local governments as well as fraud, state whistleblower and citizen hotline investigations. frjfi�mll mej-9-'n cpfft-1 tur website and through our free, electronic subscription service. We take our role as partners in accountability seriously, and provide training and technici zssistance to governments, and have an extensive quality assurance program. Contact information for the State Auditor's Office Public Records requests Public RecordsQsao.wa.gov Main telephone (360) 902-0370 Toll-free Citizen Hotline (866) 902-3900 Website www.sao.wa.Rov Washington State Auditor's Office B-1 17 Page 117 I 6. Redemption notices will be sent to DTC. If less than all of the Bonds are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. 7. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Bonds unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the City as soon as possible after the record date. TheOmnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). 111�11 IF,, 9. DTC may discontinue providing its services as securities depository with respect to the Bonds at any time by giving reasonable notice to the City and the Registrar. Under such circumstances, in the event that a successor securities depository is not obtained, Bond certificates are required to be printed and delivered. 10. Issuer mao decide to discontinue use of the s�jstem of the book-ent[�vj transfers thLQu,!h DTC ,for a successor securities depository). In that event, Bond certificates will be printed and delivered to DTC. "4441W 4AVW669-1M* �-� fr*u source I I I rt I a F111 I LZI M or-] I r-ITIP&M ]LOA PrZA rA I r if] LZM 0111 a vvig [;;A mr� 1 A7--&2 1 RA VF1 6011 b-1 I N I I I VAIM M I I LW4401 I I V RAIA I I L :j r4fl IMIN RULE 15c2-12 CERTIFICATION 1, PEGGY MCCARTHY, the Finance Director of the City of Tukwila (the "City"), hereby certify that I am authorized to execute and deliver this certificate on behalf of the City Tukwila, Washington (the "City"), relating to the preliminary official statement dat November 22, 2016 (the "Preliminary Official Statement"), prepared in connection with the sale the City's Unlimited Tax General Obligation Bonds, 2016 (the "Bonds"). For the sole purpose the underwriter's compliance with Securities and Exchange Commission Rule 15c2 -12(b)(1), t City deems the Preliminary Official Statement final as of its date, except for the omission information on offering prices, interest rates, selling compensation, aggregate principal amo principal amount per maturity, maturity dates, delivery dates, other terms of the Bonds dependent such matters, and the identity of the underwriter. I Dated as of this 22 "d day of November, 2016. Pe Carthy, Finan 6irector fiitytoff, Tukwila, Vsington 1007600002hn20395M I RqL9JM;1I!111• S&P Rating: AA 1116wal W0101"IN 110 116MOVA11600 loll N I W R (A -.1111UNt W W WMVINIIII't YA EM;--#Tf Wt. kR #.AW# MIA At UP "I F11 WrVWt 14MUR OF; Wt V � f V 14# It Vf; Wo V UNMMAIRN.- W., MM VII TIV VA At" 4011AA on individuals and corporations; however, interest on the Bonds is taken into account in determining adjusted current $32,990,000 City of Tukwila, Washington Unlimited Tax General Obligation Bonds, 2016 Dated: As of the Delivery Date Due: December 1, as shown on the inside cover The City of Tukwila, Washington (the "City"), is issuing its Unlimited Tax General Obligation Bonds, 2016 (the "Bonds"), in fully registered form under a book -entry only system. When issued, the Bonds initially will be registered to Cede & Co., as bond owner and nominee for The Depository Trust Company ("IDTIC"), New York, New York. DTC will act as initial securities depository for the Bonds. Individual purchases of the Bonds will be made in the principal amount of $5,000 or integral multiples thereof within a maturity. Purchasers of the Bonds &6 purchased. The fiscal agent of the state of Washington (the "State"), currently U.S. Bank National Association, will act as the registrar, paying agent, transfer agent and authenticating agent for the Bonds (the "Bond Registrar"). Botdc.,vill be navahIp seniat-tualiv mi pac"I 1 atd Dpeg-4ther 1 - emne-tievig J M - 1,111111 1 "1110101 11114-1101114"N' " 11909. WIN I_ P.1w SAN!# 0100,10 "01, MR!"M Owners. See "DESCR P ION OF THE BONDS - R gistration and Paym nt" and APPENDIX C — "DTC AND ITS BOOK -ENTRY SYSTEM." constructing fire stations and acquiring related firefighting apparatus and equipment; (ii) all or a portion of t 9- orti on of t cost of constructing a justice center; and (iii) costs of issuance of the Bonds. The Bonds are subject to redemption prior to their stated dates of maturity as described hereii i See "DESCRIPTION OF THE BONDS — Redemption Provisions" herein. The Bonds constitute unlimited tax general obligations of the City. For as long as any of the JBonds a - outstandina. the Citv has irrevocablv covenanted that it will levv taxes annualiv Mon all taxable orooertvi n t _ RW, y ME Men Irrevocamy pieugeu ior ine anniai iel 01 1[le t" the prompt payment of such principal and interest. The Bonds do not constitute a debt or indebtedness of t State or any political subdivision thereof other than the City. See "SECURITY" herein. The City has not designated the Bonds as "qualified tax-exempt obligations" for banks, thrift institutions a other financial institutions under Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. S "TAX MATTERS." This cover page contains certain information for quick reference only. It is not a summary of this issue. Investors must read the entire Official Statement to obtain information essential to making an informed investment decision. The Bonds are offered when, as and if executed and delivered, and are subject to receipt of the approving legal opinion of Pacifica Law Group LLP, Seattle, Washington, Bond Counsel to the City, and certain other conditions. It is expected that the Bonds will be available for delivery in New York, New York through the facilities of DTC or to the Bond Registrar on behalf of DTC by Fast Automated Securities Transfer on or about December 22, 2016 (the "Delivery Date'). $32,990,000 City of Tukwila, Washington Unlimited Tax General Obligation Bonds, 2011 Due Dec. 1 Amount Interest Rate Yield Price CUSIP NumberM 2017 $1,115,000 5.00% 1.15% 103.594 899052JV7 2018 1,240,000 5.00 1.45 106.771 899052JW5 2019 1,370,000 5.00 1.75 109.277 899052JX3 2020 310,000 5.00 1.95 111.516 899052JY1 2021 400,000 5.00 2.15 113.292 899052JZ8 2022 1,005,000 5.00 2.32 114.793 899052KA1 2023 1,340,000 5.00 2.48 115.977 899052KI39 2024 1,490,000 5.00 2.67 116.573 899052KC7 2025 1,560,000 5.00 2.83 117.035 899052KD5 2026 1,640,000 5.00 2.95 117.550 899052KE3 2027 1,720,000 5.00 3.04 116.706 (2) 899052KFO 2028 1,810,000 5.00 3.16 115.591 (2) 899052KG8 2029 1,895,000 5.00 3.23 114.946 (2) 899052KH6 2030 1,990,000 5.00 3.29 114.397(2) 899052KJ2 2031 2,090,000 5.00 3.35 113.852(2) 899052KK9 2032 2,200,000 4.50 3.62 107.290 (2) 899052KI-7 2033 2,295,000 4.50 3.67 106.859(2) 899052KM5 2034 2,395,000 4.50 3.71 106.516(2) 899052KN3 2035 2,505,000 4.50 3.74 106.259 (2) 899052KP8 2036 2,620,000 4.50 3.77 106.003(2) 899052KQ6 CUSIP is a registered trademark of the American Bankers Association. The CUSIP numbers herein are provided by the CUSIP Global Services, managed on behalf of the American Bankers Association by Standard and Poor's. CUSIP numbers are provided herein for the convenience of reference only. CUSIP numbers are subject to change. The City takes no responsibility for the accuracy of such CUSIP numbers. (2) Priced to the optional redemption date of December 1, 2026. The order and placement of materials in this Official Statement, including the Appendices, are not to be deemed • •- a determination • relevance, materiality • importance, and this • Statement, including the cover page and Appendices, must be considered in its entirety. The offering of the Bonds is made only by means of this entire • Statement. Information on website addresses set forth in this Official Statement is not incorporated into this Official Statement and cannot be relied upon to be accurate as of the date of this Official Statement, nor should any such information be relied upon in making investment decisions regarding the Bonds. • dealer, broker, sales re•resentative • other•erson has •-- authorized • the City to 2ive an� informatio•n if aiven or made. such information or reDresentations must not be relied u on is having been authorized b� th "I IlIzImt such offer, solicitation • sale. MANOR 101 11MIN itliwiliiiiliimigllvimvw duutleu, ana MIMI resiRs May UITTRIF Me Torecasts MUM. in - 91 "project," "anticipate," "expect," "intend," "believe" and similar expressions are int�ncled to identify forward- looking statements. The achievement of certain results or other expectations contained in forward-looking statements involves known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements described to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. All estimates, projections, forecasts, assumptions and other forward-looking statements are expressly qualified in their entirety by the cautionary statements set forth in this Official Statement. These forward-looking statements speak only as of the date they were prepared. The City does not plan to issue any updates or revisions to those forward-looking statements if or when their expectations or events, conditions or circumstances on which such statements are based occur and specifically disclaims any such obligation. The 9 resentation of certain information, includinw tables of receigts from taxes and other revenues, is intended Lill 5111JIN It!Gt!IIL III5LUII(;1?TMT1?1RMdIIU IS 111111. IFIMIMIJU till MUIGale TRUre or 0MYNT 15 111 Lilt: IIIId1I(;IdI position or other affairs of the City. No representation is made that past experience, as it might be shown by such financial and other information, will necessarily continue to be repeated in the future. Information relating to debt and tax limitations is based on existing statutes and constitutional provisions. Changes in State law could alter these provisions. The Bonds have not been registered under the Securities Act of 1933, as amended, and the Bond Ordinance has not been qualified under the Trust Indenture Act of 1939, as amended, in reliance upon exemptions contained in such Acts. No federal or state securities commission or regulatory authority has passed upon the merits of the Bonds or the accuracy or completeness of this Official Statement. Any representation to the contrary may be a criminal offense. •.f" R R CITY OF TUKWILA, WASHINGT 62!#?o<»—«« Boulevard Tukwila, Washington 98188 (206) 433-1800 www.tukwilawa.gov CITY COUNCIL Joe Duffie Kathy Hougardy Kate Kruller Thomas McLeod De'»!z:#. »: BOND COUNSEL Seattle, Washington FINANCIAL ADVISOR Seattle, Washington ?#»858 « sea-advisors@pfm.com BOND REGISTRAR Washington State Fiscal Agent ......... ........ ...... 91 Page DESCRIPTION OFTHE BONDS ......................................................................................................................... 1 General........................................................................................................................................................... i Authorization................................................................................................................................................... 1 Registrationand Payment ..... --- ..... ..... —................................................................................................... 2 RedemptionProvisions ................................................................................................................................... 2 Purchase......................................................................................................................................................... 3 FailuretoPay Bonds ...................................................................................................................................... 3 Defeasance.............................................................................. —...... --- ........... —...................................... 4 PURPOSE............................................................................................................................................................. 4 Sources and Uses of Funds ..................................... ..................................................................................... 4 SECURITY FOR THE BONDS ............................................................................................................................. 4 CITY TAXING AUTHORITY .................................................................................................................................. 5 PropertyTax ................................................................................................................................................... 5 Retai|SaleaandUaeTaxes----------------------------------------- G UtilityTaxes .................................................................................................................................................... 7 PROPERTY TAX LIMITATIONS ........................................................................................................................... 7 UniformityRequirement .................................................................................................................................. 7 Limitations on Regular Property Taxes -----------------------------------.7 PROPERTY TAX ASSESSMENT AND COLLECTKONPROCEDUREG--------------------.Q AaaessedValuation---------------------------------------------.Q Current and Historical Assessed Valuation and Property Tax Levy Rates and Amounts for the City ......... 1O GENERAL OBLIGATION DEBT ......................................................................................................................... 12 Authorization ofDebt --------------------------------------------12 DebtCapacity Computation .......................................................................................................................... 14 Direct and Estimated Overlapping Debt ....................................................................................................... 15 DebtService Requirements .......................................................................................................................... iG FutureFinancing ........................................................................................................................................... 18 DebtPayment Record .................................................................................................................................. 16 CITY FUNDS AND ACCOUNTING ..................................................................................................................... 16 City Investments and Investment Policy ....................................................................................................... 17 Historical General Fund Operating Results .................................................................................................. 1B Statement ofRevenues, Expenditures and Changes inFund Balances ..................................................... 1g General Fund Budgets -------------------------------------------2O THECITY ............................................................................................................................................................ 21 GENERAL AND ECONOMIC INFORMATION ................................................................................................... 27 TAX MATTERS -------------------------------------------------29 CONTINUING DISCLOSURE UNDERTAKING .................................................................................................. 3O CERTAIN INVESTMENT CONSIDERATIONS ................................................................................................... 22 RATING............................................................................................................................................................... 33 LITIGATION................................................................................................ ....................................................... 33 FINANCIALADVISOR ........................................................................................................................................ 33 UNDERWRITING................................................................................................................................................ 33 91 This page left blank intentionally. ll' �-,, I ► $32,990,000 City of Tukwila, Washington Unlimited Ta - - - I — Mae-nw=rl, I I n connect Will] inu offunrly Or 11.5 O'niln-1110 Tax General Obligation Bonds, 2016 (the "Bonds"). This Official Statement, which includes the cover page, inside cover page, the table of contents and appendices, provides information concerning the City and the Bonds. Capitalized terms not defined herein shall have the meanings assigned to them in the Bond Ordinance, as defined below. . 1 0 0 0 1- G* .11-1 #11 11111a a ww I I WILAMPL411 =11=160 1 15971 a rol W E;UlllpleLV staterneirib Or Stun SIT'S Or 4-021,1111VIRZ), " Jjrnicn rnay ue omainea Trorn ine tity upon requesT. A TU111 review should be made of the entire Official Statement. The offering of the Bonds to prospective investors is made only by means of the entire Official Statement. 11 *.-101 N 1 :24 1 re 0 - :0, 1 The Bonds will be dated as of their initial date of delivery ("Delivery Date") and will bear interest from their dated date (or the most recent date to which interest has been paid thereon). Interest on the Bonds will be payable semiannually on each June 1 and December 1, commencing June 1, 2017. The Bonds will bear interest at the rates and will mature on the dates and in the amounts set forth on the inside cover of this Official Statement. Interest will be calculated on the basis of a 360 -day year consisting of twelve 30 -day months. Authorization The Bonds are issued pursuant to the provisions of the Constitution of the State, chapters 39.36 and 39.46 of the Revised Code of Washington ("RCW"), and other applicable laws of the State, and Ordinance No. 2514 passed by the City Council (the "Council") at a regular meeting on November 21, 2016 providing for the issuance and sale of the Bonds (the "Bond Ordinance"). See "CERTAIN INVESTMENT CONSIDERATIONS — Initiative and Referendum." The Bonds were approved by the City's voters at an election held on November 8, 2016, which authorized up to $77.385.000 inW n s to 16e jj t of anule-irienting tWe C*tM's Public SvfetM Plar� lit "ISION11 I 11W "Election Ordinance") passed by the Council on August 1, 2016 (the "2016 Authorization"). See "CERTAIN INVESTMENT CONSIDERATIONS — Initiative and Referendum." 12A S'U-Yw2�-#4i�g2iiin �cr,,C; in the last general election must cast a ballot and at least 60 percent of those voting must approve the issue. The final results from the election results are as follows. Number of Votes Percentage Yes 3,504 60.54% No 2,284 39.46 The Bonds represent the first series of bonds to be issued under the 2016 Authorization. See "GENERAL OBLIGATION DEBT — Future Financing." Pirrer-07-M—ounub-, T771777 & Co. or its successor and will not mean the Beneficial Owners of the Bonds. For information about DTC and its book- entry system, see Appendix C—"DTC AND ITS BOOK-ENTRY SYSTEM." The City makes no representation as to the accuracy or completeness of the information in Appendix C provided by DTC. Purchasers of the Bonds should confirm this information with DTC or its broker-dealer participants. Bond Registrar. The City has adopted the system of registration for the Bonds approved, from time to time, by the State Finance Committee (the "Committee"). Pursuant to chapter 43.80 RCW, the Committee designates one or more fiscal agents for bonds issued within the State. The State's fiscal agent, currently U.S. Bank National Association (the "Bond Registrar"), will authenticate the Bonds and act as the paying agent and registrar for the purpose of paying the principal of and interest on the Bonds, recording the purchase and registration, exchange or transfer, and payment of Bonds and performing the other obligations of the paying agent and registrar. No resignation or removal of the Bond Re�sistrar shall become effective until a successor has beerL.-XvApp"Ceex-uolfi mr-A Payments. To pay the principal of and interest on the Bonds when due, the City will remit money from the fund or to the Bond Registrar. The Bond Registrar is obligated to remit such payments to DTC participants for subsequent disbursement to the Beneficial Owners of the Bonds as described in Appendix C. F I B n i"i iffie 'Me 0 1 upon presentation and surrender of such Bonds by the Registered Owners at the designated office of the Bond Registrar. Transfer and Exchange; Record Date. The transfer of any Bond may be registered and Bonds may be exchanged as provided in the Bond Ordinance. Upon such surrender, the Bond Registrar shall cancel the surrendered Bond and shall authenticate and deliver, without charge to the Registered Owner or transferee therefor, a new Bond (or Bonds at the option of the new Registered Owner) of the same date, maturity, and interest rate and for the same aggregate principal amount in any authorized denomination, naming as Registered Owner the person or persons listed as the assinnee on the assinnment form -a W-earinp on the surrendered Bond in exchange for such surrendered and cancelled Bond. Any Bond may be surrendered to the Bond Registrar and exchanged, without charge, for an equal aggregate principal amount of Bonds of the same date, maturity, and interest rate, in any authorized denomination. The Bond Registrar shall not be obligated to register the transfer of or to exchange any Bond during the period between the preceding record date and the principal payment or redemption date. Optional Redemption. The Bonds maturing on December 1 in the years 2017 through 2026, inclusive, are not subjecl to redemption prior to their stated maturity. The Bonds maturing on or after December 1, 2027 are subject to optional redemption, as a whole or in part (and if in part, with maturities to be selected by the City), on any date on or after December 1, 2026 at a price equal to the principal amount to be redeemed plus accrued interest, if any, to the date fixed for redemption. R Selection of Bonds for Redemption. For as long as the Bonds are held in book entry form, the selection of particular NIB= 6=0 NOW, 41111i'li-NIM 1011011 Willel-IMM-WrIft sle Mile MatTrity Date, in 5 Or UDH-- -TT- "I EM W-0111 herein authorized. Notice of Redemption. For so long as the Bonds are held by a depository, notice of redemption shall be given in t 11- Mis '-* lizINOM11-1101 - ; Q W -M- 1 0 01114M 11111161111111111141 "I'MANI - the scheduled redemption date. Any notice of optional redemption that is so rescinded shall be of no effect, and the Bonds for which the notice of optional redemption has been rescinded shall remain outstanding. Effect of Call for Redemption. If notice of redemption has been given and not rescinded or revoked, or if the conditions set forth in a conditional notice of redemption have been satisfied or waived, the Bonds or portions of Bonds to be redeemed sha n the r. dem - due and after such date such Bonds or portions of Bonds shall cease to bear interest. Upon surrender of such Bonds for redemption in accordance with said notice, such Bonds shall be paid by the Bond Registrar at the redemption price. Installments of interest due on or prior to the redemption date shall be payable as herein provided for payment of interest. All Bonds which have been redeemed shall be canceled by the Bond Registrar and shall not be reissued. Purchase rity A�re. 104� 2njN(4-rV1&-VtL-2 2 to the City plus accrued interest to the date of purchase. M 0-10111 41 oil AS 111011916111, 1 11 G] I IN I Wl M I I ilia MUR1111IM4101 N principal, premium, if any, and interest from the Debt Service Fund or such special account, and such Bond shall be deemed to be not outstanding under the Bond Ordinance. "I UARI ow I releidi OdIVI(lb Wilt 1-111di I I I 1bJ.1df1(X UUTpuTauun—,tuiffe-extem ins 117"M U1 LU Me UAW[ I L Ylldldl I MeA db pul In 11teU I Hler ?ny other provision of State law. The Bonds are being issued for the purpose of paying and/or reimbursing the City for (i) a portion of the cost of constructing fire stations and acquiring related firefighting apparatus and equipment; (ii) all or a portion of the cost of constructing a justice center; and (iii) costs of issuance of the Bonds. • of Funds The Bonds Par Amount of Bonds $32,990,000 Plus Original Issue Premium 3,719,954 Total Sources of Funds $36,709,954 1 Uses • Funds Deposit to Project Fund $36,500,000 Costs • Issuance (1) - - 209,954 Total Uses of Funds $36,709,954 Costs of issuance include legal fees, financial advisor's fees, underwriting discount, rating agency fees and other costs incurred in connection with the issuance of the Bonds. the prompt payment ♦ such principal and interest. Ti;- tax , when collected, are required to •- applied • for the AiM!Aa1—cff paid, satisfied and discharged. I V-qrjr--d 1 11 1 11 -,A T excise taxes, utility taxes, property taxes, and other taxes. In some cases, State law specifies the purposes for which various taxes can be used. The City's major sources of General Fund tax revenue are its regular property tax levy and sales and use taxes. Additionally, the City levies utility taxes and other taxes which include gambling tax, excise tax, admissions tax, and penalties and interest. Neither the State or any municipal corporation of the State currently has the authority to or collects a tax on net income. The following table shows the tax revenue in the City's General Fund, by source, for 2011 through 2015. General Fund Tax Revenues by Source Fiscal Property Sales and utility Other Total Year Taxes Use Taxes Taxes (1) Taxes (2) Taxes 2015 $14,323,133 $19,334,152 $6,080,388 $5,463,696 $45,201,369 2014 14,186,753 17,105,322 5,706,556 5,220,395 42,219,026 2013 13,757,092 16,520,856 5,566,851 4,771,091 40,615,890 2012 13,830,166 15,673,891 5,535,966 4,800,341 (3) 39,840,364 2011 13,427,445 16,113,733 5,424,644 3,679,639 (4) 38,645,461 (4) (1) Includes taxes on City -owned utilities, which represent approximately 30-35 percent of Utility Tax revenue each year. See "Utility Taxes" below. (1) Includes gambling tax, excise tax, admissions tax, full-time equivalent employee tax, and penalties and interest. (3) In 2012, the City received approximately $440,000 in delinquent gambling taxes. Additionally, a new casino opened in December 2011, resulting in higher gambling tax revenue in 2012 and thereafter. (4) In 2011, the City instituted a per full-time equivalent employee tax on businesses. This tax was originally classified under "licenses and permits" in the City's audited financial statements, although in subsequent years it was classified as "other taxes." For ease of comparison, the 2011 data in this table includes the $1.641 million of revenue resulting from this tax, but classified as "licenses and permits" in the City's audited financial statements. Source: The City's audited financial statements for each year 2011 to 2015 Property Tax Regular Property Tax. Regular property taxes are subject to constitutional and statutory limitations as to rate and amount. See "PROPERTY TAX LIMITATIONS" herein. Regular property taxes are usually levied for general municipal purposes, though certain statutes authorize additional levies for particular limited purposes. General purpose levies may be used for the payment of debt service on limited tax general obligation indebtedness, but State law does not provide any priority of use. In general, regular property taxes do not require voter approval, though certain statutes authorizing limited purpose levies may require voter approval. Certain tax limitations may be exceeded upon voter approval. Excess Propelly Tax. Excess property taxes for cities are not subject to constitutional or statutory limitations as to rate or amount but must be authorized bv at least a 60 nercent v t I t, Am Vol t ----------- of Ind bte•ness. Chemical Dependency or Mental Health Treatment Services Sales and Use Tax. The County imposes a local sales ff MAI ;1=0 W1 Ut:PU11Ue11GY Or MnellLdl ME in Treaunent pr yzei_�t Tor Yne o$ieraflon ol CQ1 ILI programs and services, including treatment services, case management, and housing that are a component of a coordinated chemical dependency or mental health treatment program or service. State law does not require distribution of these taxes to the City. Sales & Use Tax Streamlining Mitigation Payments. The State currently provides payments to certain jurisdictions to mitigate net losses in sales and use tax collections of local taxing jurisdictions resulting from the change to a ,testination-based system. Mitigation payments are distributed at the end of each quarter for the net loss experienced in the preceding quarter. For example, the first payments were made on December 31, 2008 for July through September (third quarter) 2008. Undercurrent State law, when a jurisdiction's "voluntary compliance revenue" exceeds its loss of local sales tax revenue, the jurisdiction will cease receiving mitigation payments. The continuation of these payments is subject to change at any time by the State Legislature. The City has received mitigation payments 2veraging approximately $280,000 per quarter in each of the last three years. The City has received $857,000 in gation payments through the third quarter of 2016. JR! The City levies a tax on public utility businesses (the "Utility Tax"), which is based on gross receipts from service provided or revenues generated within the City. It may be collected from investor-owned utilities and utilities operated by the City. Legal authority to impose the tax on public utilities (other than electric utilities) owned by other municipal corporations is not settled. Under State law, the tax rate for electric, phone and natural gas utilities is limited to six percent without voter approval; there is no limitation on tax rates on other utilities. The City collects a six percent utility tax on electricity, telecommunications, natural gas, cable utilities, and solid waste. The City collects a 10 percent utility tax on revenue from City -owned stormwater, water, and sewer utilities. Lodging Tax The City impose's a local option lodging tax at a rate of 1.0 percent on sales of hotel/motel rooms within the City. The City's lodging tax is credited against the State's 6.5 percent retail sales tax, and therefore is not an additional tax to consumers. The lodging tax receipts may be used only for tourism purposes. The City received $677,971 from the lodging tax in 2015. Revenues from the lodging tax are deposited into a special revenue fund. Uniformity Requirement would be applied as the maximum permissible rate for the entire taxing district. Limitations on Regular Property Taxes property tax levies described below. W R 1161101 141min ow - Wi X01 1V if it w uld cause he taxing district's lev t exceed the applicable maximum rate limitations or the aggregate rate limitations described above. The City does not have any levy lid lifts in effect and does not expect to seek voter approval for a levy lid lift in 2017. Relationship Between Rate and Amount Limitations. Regular levies are limited by both the rate limitations and the amount limitations described above and, therefore, may need to be reduced below one threshold to avoid exceeding the other. Because the regular property tax increase limitation applies to the total dollar amount levied rather than to the levy rate, increases in the assessed value of all property in the taxing district (excluding new construction, imDrovements. annexations and State-agg%ggad-2x=---tv) %vWicW eycppd tWe ratpsf wrixt-ft ii t9yP.,; 91[suI II tWm finit FRI"M i- - t •-_• ONE , FM11OWN-11111o0 1 - I I - WON HOMO ;CW11UPPARIVI I IMA—St.MZ�.Mays -1-� V a TZI 1p% rate of growth in taxes imposed, among other events, may result in increased regular tax levy rates. Thus, as assessed values rise, the levy amount increase limitation may restrict levy rate growth. As assessed values fall, the levy rate limitation may restrict growth in the levy amount. See "PROPERTY TAX ASSESSMENT AND COLLECTION P-PQ%r--E1F,URE- herein for a table showing the City's historical assessed valuation, and regular property tax levy rates and amounts. Guaranty Fund Levies. Outside of the $3.60 per $1,000 and $5.90 per $1,000 limitations described above, but within the constitutional one percent aggregate levy limitation, the City may impose a levy for the maintenance of a local improvement guaranty fund to secure debt of any local improvement district that may be created by the City. The amount of a guaranty fund levy in any given collection year may not exceed the greater of (i) 12 percent of the outstanding obligations guaranteed by the fund, or (ii) the total amount of delinquent assessments and interest accumulated on the delinquent assessments (RCW 35.54.060). The taxes levied for the maintenance of the guaranty NO 440 W1, 19111011011WRI AIIII ItIl Ule I-ItUdl IFTIA111611-&- [T] &M- WIlb-11 No. 33 Bonds. Assessed Valuation taxation, except certain utility properties that are valued by the DOR. The Assessor is an elected official whose duties and methods of determining value are prescribed and controlled by statute and by detailed regulations promulgated by the DOR. WZ 1 im, WIN I M11 to further revision by the State Board of Equalization. 0 IN icaiIMS0 D7I, r propeffj Yal amounts for6 City from 2012 to 2016. This table does not reflect excess property tax levy rates and amounts for the Bonds, which will be collected beginning in 2017. The City's preliminary 2017 assessed valuation is $5,751,820,403, which is subject to change. Tax Assessed Regular Regular Year Valuation Levy Rate Levy Amouni 2016 $5,395,325,118 $2.71073 $14,592,910 2015 5,054,078,747 2.84188 14,327,468 2014 4,756,373,688 2.97799 14,129,531 2013 4,649,19 1,308 2.977 8 8 13,853,419 2012 4,675,629,743 2.95408 13,711,699)] Total assessed valuation used for computation of debt capacity. Equal to regular assessed valuation plus timber assessed valuation. Source: King County Department of Assessments 111 !1111 1� I 11111!1111 '1 Taxpayer Boeing Westfield Property Tax Segale Properties KIR Tukwila 050 LLCIKIMCO Qwest Corporation Eproperty Tax Inc. Dept 207 Icon Tukwila Owner Pool 1 (CWWA Tukwila 1 LLC) Anne Arundel Apts LLC (Group Health) Boeing Employees Credit Union Costco Source: King County Department of Assessments 1171 .111 ','1 I'l 11 1! 11 11, 1 LRdI Type of Business Valuation A.V. Aerospace $ 552,951,680 10.25% Shopping Center 296,255,581 5.49 Commercial Properties 127,261,693 2.36 Commercial Properties 87,805,800 1.63 Telecommunications 80,519,779 1.49 Commercial Properties 79,841,600 1.48 Commercial Properties 63,807,600 1.18 Commercial Properties 50,996,857 0.95 Banking 48,178,411 0.89 Retail 44,420,188 0.82 Total $1,432,039,189 26.54% gpygz� 1 :1111 r F11011111 !I! I! I 111nilei rii �� 101,67MIN P&-61VOM t"i T; 6 -Tv 9 a I 'A I t "M J.1;X I M M,;WW,4-.J1 H ant 'A # 'A I Affij;�.W ZA kmVAW&ff v.&I " Ws W I-W�f ty 1w V 9. 1 F ! F IV #,r.W ! F v with detailed guidelines from the DOR, to comply with the statutory and constitutional rate and amount limitations. See "PROPERTY TAX LIMITATIONS" above. ........... t! b d I t: b UJ eU L LU I r I te I eb I at I AFFI-111T L)Ar j", e a r cultiputea r' a moniniy DaSIS Trom ine Me of delinquency until paid. In addition, a penalty of 3 percent is imposed on June 1 of the year in which the tax is due and 8 percent on December I of the year due. Penalties are credited to the account of the taxing district; interest on delinquent taxes is credited to the County's current expense fund. The method of giving notice of payment of taxes due, the Treasurer's accounting for the money collected, the division of the taxes among the various taxing districts, notices of delinquency and collection procedures are all covered by detailed statutes and regulations. Property taxes and all charges and expenses relating to the taxes constitute a statutory lien on the property taxed. The V:r� 2m2tfirpi.�'* ta XA4fXVg -'21MffXJ-60I 14#J' when the taxes are paid. By law, the Treasurer may commence foreclosure of a tax lien on real property after three years have passed since the first delinquency. W 'emit property taxes that are imposed after the judgment lien has been recorded. The State's courts have not decided v. Shatp, 30 Wn. App. 837, 638 P.2d 627 (1982) (holding that liens securing improvement district assessments are subject to the homestead exemption). The amount collected in the year of levy does not include supplements or cancellations of taxes or delinquent taxes collected in that year. (2) In process of collection. OF Amount •unt Collected Percent Collected Amount Collected Percent Collected LeviedYear Year of of of of 2015 sof 14,113,739 99.07 14,189,817 99.61 2014 14,058,979 13,916,718 98.99 14,041,329 ♦ • .87 2013 13,750,828 13,549,525 •. 13,751,281 100.00 2012 13,705,220 13,521,621 98.66 13,705,389 100.00 The amount collected in the year of levy does not include supplements or cancellations of taxes or delinquent taxes collected in that year. (2) In process of collection. OF Q I I= &AWA 1 &;&2 4 WARM- I I q If*' FA v-14 - q - r.1— 147012. 11 ON King County King County Rural Library District Port of Seattle The City King County Hospital District No. 1 State Schools Renton School District No. 403 Emergency Medical Services King County Flood Zone Tukwila Pool Metropolitan Park District Total rat r . 9,•tv levv code 234A. Representative 2016 Levy Rates Per $1,000 of Assessed Value $ 1.32976 0.47714 (2) 0.16954 2.71073 0.50000 2.28514 5.35495 0.28235 0.12980 0.14853 $13.38794 Statutory Regular Levy Authority Per $1,000 of Assessed Value $1.8000) 0.500 0.450 3.347(3) 0.750 3.600(4) n1a (5) 0.500 0.500 0.750 (1) A county may increase its levy up to $2.475 per $1,000 of assessed value for general county purposes if the total levies for both the county and any road district within the county do not exceed $4.05 per $1,000 of assessed value, and no other taxing district has its levy reduced as a result of the increased county levy. The County road district levy is imposed on properties located in unincorporated areas of the County. (2) Reflects regular (non -voted) levy rate of $0.42439 per $1,000 of assessed value and a voter -approved excess levy of $0.05275 per $ 1, 000 of assessed value. (3) Pursuant to RCW 41.16.060, cities (like the City) that maintain a pre-LEOFF firefighterpension fund may levy an additional $0.225 per $1,000 of assessed value for firefighter pension funding purposes. If not actuarially required for that purpose, such a city may use this levy for any other municipal purpose and therefore the City can levy up to $3.823 per $1,000 of assessed value. Additionally, the City's levy authority is reduced by the actual rate levied by the King County Rural Library District, which levied $0.47714 per $1, 000 of assessed value in 2016, resulting in a maximum City levy rate of $3.347 per $1,000 of assessed value for 2016. (4) Pursuant to RCW 84.52.043(1), the levy by the State may not exceed $3.60 per $1, 000 of assessed value adjusted to the State equalized value in accordance with a ratio fixed by the State Department of Revenue, which levy is to be used exclusively for the support of the common schools. (5) Voter -approved excess levy only. School districts do not have non -voted regular levy authority. The City is served by and overlaps with five separate school districts. The representative levy code (2340) shown in the table reflects the portion of the City that overlaps with Renton School District No. 403. Source: King County Department of Assessments N:Q1#t"W* NKCIA10ON "I 1=4 =llll�,,Tl I el I accordance with detailed budget procedures and paid for out of identifiable receipts and revenues. The budget must be balanced for each fiscal year. It is unlawful for an officer or employee of the City to incur liabilities in excess of budgetary appropriations. In an emergency, the City Council may put a plan into effect and authorize indebtedness outside the current budget. All exWitityres f,.tr ei-mergency Ayr•#ses myst Wo Aiait frim axy weahOlc- miney i6 the fivnt AriAarly char"-Ia with such expenditures. W repay those voter -approved bonds, then bonds will be payable from an excess property tax levy. See "PROPERTY TAX LIMITATIONS" above. The Bonds constitute voter -approved debt. Other than the Bonds, the City does not have any voter approved debt outstanding. Within the 2.5 percent of assessed value for general purposes, the City may, without voter approval, incur general obliqation indebtedness in an amount not to exceed 1.5 ercent of ssessed v I Additionall wi in the 2.5 r There is no express provision in the State's laws or constitution on the priority of payment of debt service on general obligation bonds as compared to the payment of other general obligations of the municipality. Aggregate Debt Limitations. The combination of voter -approved and non -voted general obligation debt for general municipal purposes may not exceed 2.5 percent of the City's assessed valuation. The total of all general obligation debt for all purposes may not exceed 7.5 percent of the City's assessed valuation. Short -Term Obligations. Within the limitations described above, State law permits municipal corporations to borrow money and issue short-term obligations for any lawful purpose, including the anticipation of the receipt of revenues, taxes, or grants or the sale of bonds, if the bonds have been authorized by the governing body or the voters, as applicable. Short-term obligations issued in anticipation of taxes must be repaid within six months after the end of the fiscal year in which they are issued. ���0# •ation Debt As of-41ovember 1, 2016, the City had the following outstanding general obligation indebtedness, which is shown, together with the Bonds. r,iiiij,1111 ;g !!''11p; Principal Amount Issued Date of Final Principal Amount Maturity Outstanding Limited Tax General Obligation Bond, 2015 $ 5,825,000 12/1/2035 $ 5,825,000 Limited Tax General Obligation Note, 2014 (Taxable) 2,250,000 1211/2017 2,250,000 Limited Tax General Obligation Bond, 2014 (Taxable) 3,850,000 12/11/2034 3,709,000 Limited Tax General Obligation Refunding Bond, 2013 (2) 1,000,000 12/1/2022 657,177 Limited Tax General Obligation Bonds, 2011 4,620,000 12/1/2023 3,780,000 Limited Tax General Obligation Bonds, 2010B (Taxable 3,970,000 12/1/2024 3,970,000 Build America Bonds) South Correctional Entity Facility Public Development 6,898,800 1/1/2039 6,265,200 Authority Bonds, Series 2009A&B (1) Limited Tax General Obligation Refunding Bonds, 2008 6,180,000 12/1/2019 2,820,000 Total Limited Tax General Obligation Debt $29,276,377 The Bonds $32,990,000 12/1/2036 32,990,000 Total General Obligation Debt $62,266,377 The South Correctional Entity Facility Public Development Authority issued bonds for a correctional facility (the "SCORE Bonds"). Pursuant to an interlocal agreement, the City is obligated to pay eight percent of the debt service on the SCORE Bonds, which obligation constitutes limited tax general obligation debt, secured by the City's General Fund. The amounts shown in the table above represent the portion of the outstanding principal amount that is allocable to the City's obligation. (2) The proceeds of this obligation were loaned to the Tukwila Metropolitan Park District (the "MPD') to pay for improvements to the pool. The MPD, is a separate taxing district. Pursuant to the terms of an interlocal agreement, the MPD has irrevocably pledged to levy and collect taxes and other revenues in amounts sufficient to pay debt service on the 2013 Bonds. These amounts are required to be paid to the City not later than June I and December I of each year, so long as the 2013 Bonds remain outstanding. Source: The City IN MORA _WW no w,«£»,.° A7 , U;T# IAAWWIJ 9PA ability to refund outstanding debt. Future declines in assessed valuation can impac:?,=w« 4»<®°»x««® l obligation debt. The following information is based on the 2015 assessed valuation of property within the City for collection of taxes in 2016 and the general obligation debt of the City outstanding as of November 1, 2016, plus the Bonds. ±:v2,» © , 1, 2016 General Purposes Non -Voted Debt Capacity (1.5% of Assessed Valuation) Outstanding Non -Voted General Obligation Debt Remaining Non -Voted General Purpose Debt Capacity Debt Capacity (2.5% of Assessed Valuation) Utility Purpose Bonds Outstanding Remaining General Obligation Debt Capacity for This Purpose Parks and Open Space and Economic Development Purposes Debt Capacity (2.5% of Assessed Valuation) !»< z4 Open Space and Economic Development Purpose Bonds Outstanding Remaining General Obligation Debt Capacity for This Purpose rMIM-111161 M M ir $29,276,377 32,990,000 $62,266,377 $__C62 266 37 $ 72,616,75 g; 'III I I II I I 11 IF 'I'll I I I I I Ill III I I I I I 111! 111!!11 1• : I I I 1 .1, 1 0 - , 1 0 1 • Direct and Estimated Overlapping Debt As of November 1, 2016 2015 Assessed Valuation for 2016 Tax Year - $5,395,325, 1 2016 City Population — 19,540 Direct Debt (calculated above) Estimated Overlapping Debt: The County $17,500,366 Port of Seattle 3,872,464 School Districts 22,983,841 King County Library 2,210,525 Total Estimated Overlapping Debt (1) Total Net Direct and Estimated Overlapping Debt Certain Ratios Direct Debt to Assessed Taluation Direct and Estimated Overlapping Debt to Assessed Valuation Direct Debt per Capita Direct and Estimated Overlapping Debt per Capita Per Capita Assessed Valuation Estimated overlapping debt is as of August 1, 2016, ig Mma= Year The Principal Bonds Interest • , Debt Service 2018 1,240,000 1 • 1,370,0002,841,675 2020 310,000 1,403,175 2021 400,000 1,387,675• 2022 1,005,0002,372,675 2023 1,340,000 1,317,425 2,657,425 2024 1,490,000 1,250,42541 ,425 2025 1,560,0002,735,925 2026 1,640,000 1,097,925 2,737,925 2027 1,720,000 1,015,925 2028 1,810,000 929,925 2,739,925 2029 1,895,000 839,425 2,734,425 2030 1,990,000 744,675. 2031 2,090,000 645,175 2,735,175 2032 2,200,000 540,675I • 2033 2,295,000 441,675 2,736,675 2034 2,395,000 338,400 2,733,400 2035 2,505,000 230,625• 2036 2,620,000 117,900 2,737,900 Total990,000 $19,346,684 $52,336,684 Future Financing The City anticipates issuing approximately $25 million of the 2016 Authorization over the next five years. The City may next two years. The issuance of any such bonds is preliminary, subject to change, and has not been approved by the City Council. Additionally, the City periodically reviews its outstanding bonds for refunding opportunities and may issue bonds for refunding purposes if market conditions warrant. e controlled. See APPENDIX B — "2015 Audited Financial Statements." Basis of Accounting. Basis of accounting refers to when revenues and expenditures or expenses are recognized in the accounts and reported in the financial statements. Governmental funds use the modified accrual basis of accounting and proprietary and fiduciary funds use the accrual basis of accounting. Under the modified accrual basis of accounting, revenues are recorded when susceptible to accrual, i.e., both measurable and available. For the City, ?vailable means expected to be received within 60 days of year-end. On the accrual basis, the revenue is recognized in the period in which the income is earned. IN off by qualified State depositories. The City may withdraw funds in their entirety on less than 24 -hours' notice. Authorized Investments for Bond Proceeds. In addition to the eligible investments discussed above, bond proceeds may also be invested in mutual funds with portfolios consistina of U.S. aovernment and auaranteed aqenc� igun I 1MMM1=Z;M=W" 11110110M 6 W-Wilwow- I. I M IIWJ IIIdIKt:!L I Illuipal bulaArilleb nelit In Ine TUnOks) are in one OT ine Two highest rating categories of a nationally recognized rating agency. Bond proceeds may also be invested in shares of ♦ market funds with portfolios of securities otherwise authorized • law for investment • • •• (RCW 39.59.030). The followinr - table shows cash and investments for the Cito as of 2015 (audited). Cash and Investments (1) Includes U.S. Treasury and U.S. Agency securities, bank notes and municipal bonds. im Amount as of Amount as of August 31, 2016 December 31, 2015 Banks and Savings and Loan Institutions $30,862,013 $30,215,501 LGIP Investments 10,981,632 10,708,902 Non-LGIP InvestmentsM 7,359,662 8,470,772 Total Cash and Investments $49,203,307 $49,395,175 (1) Includes U.S. Treasury and U.S. Agency securities, bank notes and municipal bonds. im Mo I IMTO I oil 111 4p 6 I ilq 1 214R 0 �,-rw I r� I A w*= ig a gq If A Mo (1) Information for fiscal years 2011 through 2015 is based on audited financial statements of the City. (2) In 2011, the City instituted a per full-time equivalent employee tax on businesses. This tax was originally classified under "licenses and permits" in the City's audited financial statements, although in subsequent years it was classified as "other taxes." (1) The reduction in 2014 is due to guidance from the Washington State Auditor's Office. The City reclassified proprietary fund reimbursement of overhead expense as a reduction of General Government expense, rather than a transfer in, as it had done in prior years. (4) In 2012, Mental and Physical Health expenditures were reclassified under General Government (5) For the years 2013 and prior, Transfers In represents indirect cost allocation from proprietary funds. In 2013, Transfers In also includes $8.5 million reimbursement from Local Improvement District No. 33, and a transfer from the General Fund to the Contingency Fund. For 2014 and 2015, Transfers In represents transfers of unrestricted funds that can be used for General Fund purposes. (6) Transfers Out generally represent transfers to various reserve funds, debt service funds, capital project funds, and the City's golf course fund. In 2013, Transfers Out also represents a transfer to the City's Contingency Fund. See footnote 2, above. (7) Through 2012, $850,000 had been loaned to the Tukwila Metropolitan Park District. With the implementation of GASB 61 in 2013, the City was required to report the Tukwila Metropolitan Park District as a "blended" component unit, and as such, the loan to the Tukwila Metropolitan Park District was reclassified as an interfund loan rather than a General Fund expenditure, necessitating an adjustment for the change in accounting principle. As of December 31, 2015, the Tukwila Metropolitan Park District was no longera component unit of the City and the financial data associated with it was removed from the City's financial statements. Source: The City General Fund Budgets The City has elected to prepare and use biennial budgets, as provided in State law. Budgets for the General Fund, for the years 2015 and 2016 are shown below. The City monitors the budget during the course of the year and may make amendments throughout the year to reflect known changes or updated projections. Amendments to the 2016 adopted budget have been approved by the Council. The Mayor has provided the 2017 - 2018 Budget to the Council, which is expected to be adopted in December 2016. General Fund Budget0) For the Period January 1, 2016 through December 31, 2016 2016 2016 Adopted Budget Adopted Budget REVENUES Taxes $42,301,944 $43,668,417 Licenses and Permits 2,105,089 2,165,661 Intergovernmental 4,714,899 4,851,929 Charges for Services 1,935,648 1,966,054 Fines and Forfeits 242,829 242,829 Miscellaneous 776,271 782,412 Other Financing Sources 4,655, 20 5,908,476 Total Revenue $56,732,000 $59,585,778 EXPENDITURES Salaries and Wages $27,370,848 $28,016,903 Personnel Benefits 9,509,449 9,997,962 Supplies 1,413,838 1,276,838 Other Services and Charges 10,817,286 10,732,689 Intergovernmental Services 2,447,566 2,574,716 Capital Outlay 10,000 10,000 Transfers Out 4,959,846 7,153,791 Total Expenditure $56,528,833 $59,762,899 Net Increase (Decrease) in Fund Balance $ 203,167 $ (177,121) Beginning Fund Balance (2) $15,200,000 $15,404,983 Ending Fund Balance(2) $15,403,167 $15,227,862 The General Fund budget includes the Contingency Fund budget, a sub -fund of the General Fund. (2) The 2015 budgeted beginning balance is based on the 2014 year-end as estimated at the time of budget development. KC hal4mm • • ! :. ..:: - • -' • :! # .. :•. :. - •:.+ •'. . # ! R: •:. ..'. is the voters of the City for four-year terms. Council members are elected at large. The Mayor appoints the City set by .. # and Council. The Council is responsible for, among other things, passing ordinances and resolutions, adopting the budget, and adopting general policies and goals for the City. The Council holds regular meetings two times a month and special meetings as needed. All meetings are open to the public as provided by law and agenda items are prepared in advance. Official Position Initially Elected Current Term Expires Allan Ekberg Mayor November 2015 December 31, 2019 Joe Duffie Council President November 1981 December 31, 2017 Kathy Hougardy Council Member November 2007 December 31, 2019 Kate Kruller Council Member November 2011 December 31, 2019 Thomas McLeod Council Member January 2016 (1) December 31, 2017 De'Sean Quinn Council Member November 2008 (2) December 31, 2017 Dennis Robertson Council Member November 1987 (3) December 31, 2019 VernaElected -al Council Member November 2005December1 Council Member McLeod was appointed to the position in 2016. Council(1) : I. Quinnappointed to the position /0i and won election to his first full term in November009 CouncilI' Robertson 'R from 9i through 19951 "I in November113 Brief r6sum6sofkey administrativestafffollow: .•. wl Mr. Cline holds .Bachelor'sof Arts in PublicPolicy fromi'r ♦ University with Honorsand Distinction and is credentialed by the International City/County Management Association. Peggy McCarthy, Finance Director. Ms. McCarthy was hired as the City's Deputy Finance Director in November 2008 • has been •: as the Finance Director since 2011.• • joining the City, Ms. McCarthy was the Financial Reporting Manager for the King County Housing Authority. Ms. McCarthy's experience includes over 14 years in Deloitte. Ms. McCarthy holdsDegree in Business Administration from• ♦ - and 014 Employees and Bargaining Groups ............ Source: The City other bargaining groups Teamsters Local Union No. 763, representing Administra i e/T hnical, Professional Supervisory, Maintenance and Trades, and Program Managers; USW Police Non -Commissioned and the Police Commanders in November, 2016. Full -Time Year Equivalent 2016 347.85 2015 337.10 2014 334.48 2013 332.38 2012 333.13 Source: The City other bargaining groups Teamsters Local Union No. 763, representing Administra i e/T hnical, Professional Supervisory, Maintenance and Trades, and Program Managers; USW Police Non -Commissioned and the Police Commanders in November, 2016. Source: The City Pension Plans W7AU1W*W7AV17 "S&M V administered by the State's Department of Retirement Systems ("DRS"): the State Public Employees Retirement System ("PERS"), the Law Enforcement Officers and Fire Fighters Retirement System ("LEOFF"), or the Public Safety Employees Retirement System ("PSERS"). Contributions by both employees and employers are based on gross wages. PERS and LEOFF participants who joined the system by September 30, 1977 are Plan 1 members. Those PERS participants who joined on or after October 1, 1977, are Plan 2 members, unless they exercise an option to transfer to Plan 3. PERS participants joining on or after September 1, 2002, have the irrevocable option of choosing membership in PERS Plan 2 or PERS Plan 3. LEOFF participants who joined on or after October 1, 1977, are Plan 2 members. PSERS has only one benefit plan, Plan 2. State law requires systematic actuarial funding to finance the retirement plans. Actuarial calculations to determine ernalo er and em lo ee contributions are re ared b the Office of the State A OSMII n artisa I Z,u �14;11J 11 V. I V ryul ILI IL I ULIu Consumer Price Index increase; and (4) 0.95 percent growth in membership (1.25 percent for LEOFF). The long-term investment return assumption is used as the discount rate for determining the liabilities for a plan. The 1 0 -year average annual return on the investment of the retirement funds was 9.24 percent. Plan Funding,- Contribution Rates and Amounts. All DRS retirement plans are funded by a combination of funding sources: (1) contributions from the State; (2) contributions from employers (including the State as employer and the City and other governmental employers); (3) contributions from employees; and (4) investment returns. Retirement funds are invested by the State Investment Board, a 15 -member board created by the Legislature in 1981. 4 Employees/Department Number of Union or Bargaining Group Represented Employees Contract Expires Teamsters Clerical/Maintenance/Supervisory 148 12/31/2016 International Association of Firefighters Firefighters 64 12/31/2016 Police Guild Police 71 12/31/2016 United Steelworkers Police Non -Commissioned Officers 14 12/31/2016 Fraternal Order of Police Green River Police Commanders 4 12/31/2016 Valley Lodge 27 Total 301 Source: The City Pension Plans W7AU1W*W7AV17 "S&M V administered by the State's Department of Retirement Systems ("DRS"): the State Public Employees Retirement System ("PERS"), the Law Enforcement Officers and Fire Fighters Retirement System ("LEOFF"), or the Public Safety Employees Retirement System ("PSERS"). Contributions by both employees and employers are based on gross wages. PERS and LEOFF participants who joined the system by September 30, 1977 are Plan 1 members. Those PERS participants who joined on or after October 1, 1977, are Plan 2 members, unless they exercise an option to transfer to Plan 3. PERS participants joining on or after September 1, 2002, have the irrevocable option of choosing membership in PERS Plan 2 or PERS Plan 3. LEOFF participants who joined on or after October 1, 1977, are Plan 2 members. PSERS has only one benefit plan, Plan 2. State law requires systematic actuarial funding to finance the retirement plans. Actuarial calculations to determine ernalo er and em lo ee contributions are re ared b the Office of the State A OSMII n artisa I Z,u �14;11J 11 V. I V ryul ILI IL I ULIu Consumer Price Index increase; and (4) 0.95 percent growth in membership (1.25 percent for LEOFF). The long-term investment return assumption is used as the discount rate for determining the liabilities for a plan. The 1 0 -year average annual return on the investment of the retirement funds was 9.24 percent. Plan Funding,- Contribution Rates and Amounts. All DRS retirement plans are funded by a combination of funding sources: (1) contributions from the State; (2) contributions from employers (including the State as employer and the City and other governmental employers); (3) contributions from employees; and (4) investment returns. Retirement funds are invested by the State Investment Board, a 15 -member board created by the Legislature in 1981. 4 I he City's total contribution for the year ended December 31, 2015, was $2,402,811. The City contributed $1,581,183 to PERS, $804,404 to LEOFF and $17,224 to PSERS in 2014 for all of the City's employees that are covered under PERS, LEOFF and PSERS. The City's total contribution for the year ended December 31, 2014, was $2,203,521. The City contributed $1,415,464 to PERS, $772,284 to LEOFF and $15,773 to PSERS in 2014 for all of the City's employees that are covered under PERS, LEOFF and PSERS. liee APPENDIX B — "2015 AUDITED FINANCIAL STATEMENTS — Note 8 -Pension Plans" for a description of the State pension system and the plans. - - 1• 9 - Q• . Employee city (1) PERS $13,725,838 Pension Assets Plan 1 6.00% 9.21% Plan 2 4.92 9.21 Plan 3 Variable (2) 9.21 LEOFF Plan 1 0.00 0.18 Plan 2 8.41(3) 5.23 PSS Plan 2 6.36 10.54 (1) Includes 0.18 percent DRS administrative rate. (2) Rates vary from 5.0 percent minimum to 15.0 percent maximum based on rate selected by the PERS 3 member. (3) The State also contributes 3.36 percent to this plan. VA1116mmigil-M M rem . 10"I W01116MIN"I 11 MONMIM - FMF-1W= PAYS I and 3 remain unchanged from the table above. The LEOFF 2 Board did not adopt a rate increase for the 2015-17 biennium. The rates adopted by the PFC and LEOFF 2 Board are subject to revision by the State legislature. The following table represents the aggregate pension amounts for all plans subject to the requirements of GASB Statement No. 68, Accounting and Financial Reporting for Pensions for the year 2015. Pension Liabilities $13,725,838 Pension Assets 6,275,313 Deferred Outflows of Resources 2,426,578 Deferred Inflows of Resources 4,023,184 Pension Expense/Expenditures 1,353,356 Plan Funding Status and Unfunded Actuarial Liability. While the City's contributions in fiscal year 2015 represented its full current liability under the PERS, TRS, and LEOFF, any unfunded pension benefit obligations within the systems could be reflected in future years as higher contribution rates. The OSA website (which is not incorporated into this Official Statement by reference) includes information regarding the values and funding levels of the DRS plans. Age Normal ("EAN") liabilities. The EAN cost method projects future benefits under the plans, using salary growth and other assumptions, and applies the service that has been earned as of the valuation date to determine accrued liabilities. The AVA is calculated using a methodology that smooths the effect of short-term volatility in the Marke) Value of Assets ("MVX') by deferring a portion of the annual investment gains or losses over a period of up to eight years. This helps limit fluctuations in contribution rates and funded status that would otherwise arise from short-term changes in the MVA. N9 Funded Status ($ millions) AZM=— 10 Actuarial Actuarial Proportionate Share Accrued Plan Liability PERS Plan 1 $12,553 PERS Plans 2/3 32,008 PSERS Plan 2 357 LEOFF Plan 2 8,838 Funded Status ($ millions) AZM=— 10 Actuarial Actuarial Proportionate Share Value of Accrued 0.135736% Assets Liability/(Surplus) Funded Ratio 7,31-5 $5,239 58% 28,292 3,715 88 338 19 95 9,320 (482) 105 111119MON471 =n- A an'. =W Offacy-SCUMN ArA IRUSI I M. IF FROMM 00, W-1 901000 M0.0.111- It 1. .1 1.1- S 9. - @1. 9 IN qq of projected investment earnings. The State Department of Retirement Systems will d termine each participating employers' proportionate share of the plan liability and OSA will determine each plan's accounting valuation. The GASB rules impact accounting for pensions and not funding status of the plans that is calculated by OSA or pension contribution rates that are set based on statutory assumptions. lm1�, - MTA KII Liability (Asset) Proportionate Share PIERS 1 $7,100,255 0.135736% PERS 2/3 6,202,533 0.173592 PSERS 2 9,628 0.052748 LEOFF 1 (939,397) 0.077944 LEOFF2 (5,335,916) 0.519159 KII NAP "Wil 11 - I - I P I beneficiaries. Membership is limited to fire fighters employed �riorto May 1 I'l 970 when the LEOFF retirement system was established. The City currently has 10 members receiving benefits through this Plan. Under State law, the Firefighters' Pension Plan is provided an allocation of all money received by the State from taxes on fire insurance premiums, interest earnings, member contributions made prior to the inception of LEOFF and City contributions required to meet projected future pension obligations. The components of the City's net pension liability as of December 31, 2015 was $1,829,926, and a plan fiduciary net position of $1,416,506 for a funding percentage of 77.41 percent. and, if applicable, required supplementary information in the financial reports. re-IdGLECO-W-c"'Ll fert-WCOVvy-1114 ferre-raF, �r$17Z7MMQn SRI a tirlueu ratio lilt Zery The funded ratio is zero percent, because the City funds benefits on a pay-as-you-go basis. The City's annual OPEB cost is calculated based on the annual required contribution of the employer ("ARC"), an amount actuarially determined in accordance with the parameters of GASB 45. The ARC represents a level of funding that ' ' .. an_P`17L��R I XkM&1"_C1L0XW liabilities over a period of thirty years. The following table shows the components of the City's annual OPEB cost for 2015, the amount actually contributed to the plan and changes in the City's net OPEB costs: The City's annual OPEB cost, the percentage of OPEB cost contributed to the plan, and the net OPEB obligation for the past four years were as follows: —iscal Year Fiscal Year Ending Contribution as a 12/31/2015 Determination of Net OPEB Obligation: OPEB Cost Annual Required Contribution $2,585,779 Interest on prior year Net OPEB Obligation 146,904 Adjustment to ARC (452,441) Annual OPEB Cost 2,280,242 Contributions made J477 292) Increase in Net OPEB Obligation $1,802,950 Net OPEB Obligation — beginning of year $5,341,973 Net OPEB Obligation — end of year $7,144,923 The City's annual OPEB cost, the percentage of OPEB cost contributed to the plan, and the net OPEB obligation for the past four years were as follows: —iscal Year Annual Contribution as a Net OPEB Ended OPEB Cost Percentage of OPEB Cost Obligation 2015 $2,280,242 21% $7,144,923 2014 1,686,166 54 5,341,973 2013 1,079,076 81 4,561,781 2012 1,122,304 36 4,361,460 III - -- - - reftTar =-W I -Ay-ft rin I nwnwr?, n t I I re C is zero percent funded. The actuarial accrued liability for benefits was $30.2 million, and the actuarial value of assets was $0, resulting in an unfunded actuarial accrued liability (UAAL) of $30.2 million and a funded ratio of zero percent. The funded ratio is zero percent, because the City funds benefits on a pay-as-you-go basis. W Schedule of Funding Progress (1) Only four valuations completed to date (rounded to thousands) Funded Actuarial Actuarial Unfunded Actuarial Payroll Value of Accrued Accrued Liabilities Valuation Date Assets Liabilities (UAAL) January 1, 2015 $0 $29,538 $29,538 January 1, 2014 0 21,264 21,264 January 1, 2011 0 14,805 14,805 January 1, 2008 0 16,103 16,103 (1) Only four valuations completed to date 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 Plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. .•- ! . J4- otal of 175 members. r Mir MeMi MTMrY=r11__ __1 _1.11,77al fl-doml, _1. 011-CIMEE �___ 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, public officials' errors or omissions, stop gap, and employee benefits liability. Limits are $4 million per occurrence self-insured layer, and $16 million per occurrence in the re -insured excess layer. The excess layer is insured by the purchase of reinsurance and insurance and is subject to aggregate limits. Total limits are $20 million per occurrence subject to aggregate sublimits in the excess layers. The board of directors of WCIA determines the limits and terms of coverage annually. Insurance coverage for property, automobile physical damage, fidelity, inland marine, and boiler and machinery are purchased on a group basis. Various deductibles apply by type of coverage. Property insurance and auto physical insured above that amount by the purchase of insurance. In -he . iclude risk mananement consultation- loss control field services- claims and litioation administration and loss analyses. WCIA contracts for the claims investigation consultants for personnel issues and land use problems, insurance brokerage, and lobbyist services. WCIA is fulhe funded by its members who make annual assessments _Qn 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 The WCIA executive director reports to the executive committee and is responsible for conducting the day to day operations of WCIA. The City self -insures for unemployment benefits. This is budgeted each year and has not exceeded $60,000 per year. 5'his exAiensa is",Yitget6t in the Finance XeXaKrnent within the Qeneral Fynt anf nit resaryes are allacate1 Mcayse of the limited liability and historical cost. M., UAAL as a Funded Covered Percentage of Ratio Payroll Covered Payroll 09% $132 0% 0 195 1 0 371 3 0 581 4 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 Plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. .•- ! . J4- otal of 175 members. r Mir MeMi MTMrY=r11__ __1 _1.11,77al fl-doml, _1. 011-CIMEE �___ 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, public officials' errors or omissions, stop gap, and employee benefits liability. Limits are $4 million per occurrence self-insured layer, and $16 million per occurrence in the re -insured excess layer. The excess layer is insured by the purchase of reinsurance and insurance and is subject to aggregate limits. Total limits are $20 million per occurrence subject to aggregate sublimits in the excess layers. The board of directors of WCIA determines the limits and terms of coverage annually. Insurance coverage for property, automobile physical damage, fidelity, inland marine, and boiler and machinery are purchased on a group basis. Various deductibles apply by type of coverage. Property insurance and auto physical insured above that amount by the purchase of insurance. In -he . iclude risk mananement consultation- loss control field services- claims and litioation administration and loss analyses. WCIA contracts for the claims investigation consultants for personnel issues and land use problems, insurance brokerage, and lobbyist services. WCIA is fulhe funded by its members who make annual assessments _Qn 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 The WCIA executive director reports to the executive committee and is responsible for conducting the day to day operations of WCIA. The City self -insures for unemployment benefits. This is budgeted each year and has not exceeded $60,000 per year. 5'his exAiensa is",Yitget6t in the Finance XeXaKrnent within the Qeneral Fynt anf nit resaryes are allacate1 Mcayse of the limited liability and historical cost. M., 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 $8,273,754 in 2015. 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) and a contingency reserve equal to 1.5 times the IBNR reserve. to cover expected claims fluctuations. Administrative costs were then added. M:Q1l:I;T_11 W1W une MAE Mt ot It Seattle -Tacoma International Airport. The City encompasses nine square miles and is home to a major regional shopping center (Southcenter Mail). Population Historical and current population figures for the City and the County are provided below. Source: Washington State Office of Financial Management Economic Indicators for the City and the County The following tables present historical information on certain major economic indicators for the City and the County. Boeing Company Group Health Cooperative Costco Wholesale King County Metro Boeing Employees Credit Union Nordstrom Real Time Staffing Services Inc. Red Dot Corp City of Tukwila Macy's Type of Business Aerospace Data Center/Lab/Pharmacy Cash/Carry Warehouse Transit Operating Base Banking/Credit Union Departm- ft - poymePlacement Municipal Governm- D-•. - Department Store Source: City of Tukwila Finance Department — Business Licenses M Employees (FTE) 7,144 1,550 807 500 499 483 363 352 334 280 Population Year Tukwila King County 2016 19,540 2,105,100 2015 19,300 2,052,800 2014 19,210 2,017,250 2013 19,160 1,981,900 2012 19,080 1,957,000 Source: Washington State Office of Financial Management Economic Indicators for the City and the County The following tables present historical information on certain major economic indicators for the City and the County. Boeing Company Group Health Cooperative Costco Wholesale King County Metro Boeing Employees Credit Union Nordstrom Real Time Staffing Services Inc. Red Dot Corp City of Tukwila Macy's Type of Business Aerospace Data Center/Lab/Pharmacy Cash/Carry Warehouse Transit Operating Base Banking/Credit Union Departm- ft - poymePlacement Municipal Governm- D-•. - Department Store Source: City of Tukwila Finance Department — Business Licenses M Employees (FTE) 7,144 1,550 807 500 499 483 363 352 334 280 LUSUM, Source: U.S. Bureau of Labor Statistics Taxable Retail Sales King County City Taxable Annual Average Year Taxable Retail Sales Retail Sales Aug 2016 Aug 2016 2016 2014 2013 2012 2011 King County 2014 52,331,700,691 1,929,431,815 2013 48,553,929,767 1,846,436,674 Civilian Labor Force 1,215,349 1,178,571 1,177,297 1,161,113 1,138,902 1,122,752 1,108,838 Employment 1,167,570 1,125,808 1,124,990 1,106,290 1,082,029 1,051,738 1,020,997 Unemployment 47,779 52,763 52,307 54,823 56,873 71,014 87,841 Unemployment Rate 3.9% 4.5% 4.4% 4.7% 5.0% 6.3% 7.9% Washington State 50,357 46,414 2013 55,692 65,990 47,778 44,462 2012 Civilian Labor Force 3,645,713 3,543,814 3,544,242 3,492,866 3,464,760 3,472,727 3,461,428 Employment 3,448,590 3,352,100 3,343,992 3,278,975 3,220,860 3,190,421 3,140,190 Unemployment 197,123 191,714 200,250 213,891 243,900 282,306 321,238 Unemployment Rate 5.4% 5.4% 5.7% 6.1% 7.0% 8.1% 9.3% Source: U.S. Bureau of Labor Statistics Taxable Retail Sales M. King County City Taxable Year Taxable Retail Sales Retail Sales ---2�01 -60) $14,020,774,145 $ 743,637,934 2015 57,611,975,532 2,174,715,850 2014 52,331,700,691 1,929,431,815 2013 48,553,929,767 1,846,436,674 2012 45,178,847,087 1,769,298,604 Taxable retail sales for 2016 represents collections through the first quarter, which is the most recent data available from the Department of Revenue. Taxable retail sales for the first quarter of 2015 were $12,765,552,578 and $479,232,765, respectively. Source: Washington State Department of Revenue Per Capita Personal Income Seattle -Tacoma -Bellevue King State of Year Metropolitan Area County Washington National 2015 N/A N/A $51,898 $48,112 2014 $58,205 $68,877 50,357 46,414 2013 55,692 65,990 47,778 44,462 2012 55,622 66,138 47,324 44,267 2011 52,040 60,876 44,197 42,453 Source: U. S. Department of Commerce Bureau of Economic Analysis Residential Building Permit Statistics - King County and the City King County Building Permits City Building Permits Number of Value of Number of Value of Year Permits Permits Permits Permits 2015 4,473 $3,739,960,240 38 $12,665,257 2014 4,485 2,816,919,865 17 6,029,574 2013 4,554 2,414,075,573 20 7,441,102 2012 3,938 2,197,719,628 14 4,835,717 2011 2,736 1,155,094,272 8 1,931,795 Source: U.S. Census Bureau M. relating to any such actions, other than pursuant to its terms, if material; and (14) appointment of a successor or additional trustee or the change of name of a trustee, if material. The City also will provide to the MSRB timely notice of a failure by the City to provide required annual financial information on or before the date specified below. Format for Filing with the MSRB. Until otherwise designated by the MSRB or the SEC, any information or notices submitted to the MSRB in compliance with the Rule are to be submitted through the MSRB's Electronic Municipal Market Access system ("EMMA"), currently located at www.emma.msrb.org (which is not incorporated herein by this reference). All notices, financial information and operating data required by the Undertaking to be provided to the MSRB must be in an electronic format as prescribed by the MSRB. the Undertaking must be accompanied by identifying information as prescribed by the MSRB. TerminationlAmendment of Undertaking. The City's obligations to provide annual financial information and notices of listed events shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds. Any provision of the Undertaking shall be null and void if the City (1) obtains an opinion of nationally recognized bond Mf, V1 all 'Ill arly portion of the Undertaking. Notwithstanding any other provision of the Undertaking, the City may amend the Undertaking with an opinion of nationally recognized bond counsel in accordance with the Rule. In the event of any amendment of the Undertaking, the City shall describe such amendment in the next annual report, and shall include a narrative explanation of the reason for the amendment and its impact on the type (or in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the City. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, (i) notice of such change shall be Fiven in the same manner as for a listed event present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting •rinci•'- n1 1 le Bond Owner's Remedies. The right of any bondowner •.. beneficial owner of Bonds to enforce the provisions of the oil -IN MIAMI WNW 1 0%, through nominees or depositories. a • dissemination agent. Compliance With Continuing Disclosure Obligations. The City has entered into certain written undertakings under Rule 15c2-12 in connection with the issuance of certain of its outstanding obligations (the "Prior Undertakings"). With the Undertakings. The City notes certain exceptions to the foregoing statement as follows: Under continuing disclosure agreements relating to the City's outstanding water and sewer system revenue bonds, the City failed to timely file certain utility customer statistics for the water and sewer system revenue bonds for fiscal years 2011 through 2013. The general customer statistics and a notice of failure to file have since been filed • EMMA. 1 g1rial [is 111411Z1111 or.1:1 is Hill A44 nonlffayl �m R rill RE or any entity providing bond insurance or other credit facility). ON! T 1 115! i! E 1! 1 1 1 1!!! 1!! 111 1 1 11 1111 By: Peg-gy McCarthy Peggy McCarthy, Finance Director 0 APPENDIX FQTMOEJ59=011��� City of Tukwila Tukwila, Washington Morgan Stanley & Co, LLC New York, New York Re: City of Tukwila, Washington Unlimited Tax General Obligation Bonds, 2016 - $32,990,000 T-TIMMMITITC-r-M_u--I The Bonds are subject to redemption prior to their stated maturities as provided in the Official Statement prepared in connection with the issuance of the Bonds. Regarding questions of fact material to our opinion, we have relied on representations of the City in the Bond Ordinance and in the certified proceedings and on other certifications of public officials and others furnished to us without undertaking to verify the same by independent investigation. The City has not designated the Bonds as 11 qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code"). 0 11111PI ill I I- - 9 - FAWPAI limited by laws relating to bankruptcy, insolvency, moratorium, reorganization or other similar laws of general application affecting the rights of creditors, by the application of equitable principles and the exercise of judicial discretion. 2. The Bond Ordinance is a legal, valid and binding obligation of the City, has been duly authorized, limited by laws relating to bankruptcy, insolvency, moratorium, reorganization or other similar laws of general 2pplication affecting the rights of creditors, by the application of equitable principles and the exercise of judicial Yiscretiot. W61601111 - 111 11 11 11 a I 1 .00 0 0, YLTL�xmgm I @I V4 V&iwol a M42 [;M,14J11*1M&Mm A -7d NE I I w9mgoommills I lawly-Im 1111111 symme I o mmo ELSIM I I CAI LW;gAJULO&Z wmulzm em 1-N U'S ........... ....... for federal income tax purposes retroactively to the date of issuance of the Bonds. Except as expressly stated above, we express no opinion regarding any tax consequences related to the ownership, sale or disposition of the Bonds, or the amount, accrual or receipt of interest on, the Bonds. Owners of the Bonds should consult their tax advisors regarding the applicability of any collateral tax consequences of owning the Bonds. We have not been engaged nor have we undertaken to review the accuracy, completeness or sufficiency of the official statement or other offerinr - material related to the Bonds :�except to th'41-4�lei*rkt.y statement), and we express no opinion relating thereto, or relating to the undertaking by the City to provide ongoing disclosure pursuant to Securities and Exchange Commission Rule 15c2-12. This opinion is given as of the date hereof and we assume no obligation to update, revise or supplement this tfii-k111411 7CA--� 2,-q-fM3 �ereafter occur. Very truly yours, PACIFICA LAw GROUP LLP M APPENDIX B 2015 FederalFinancial Statements and Report 1 111111111111 iiiiijillillilillillll.c rI I rs Mrl��S =01 PT City of Tukwila Tukwila, Washington EMEMNEEM= ?Te-a-se-Ti-na anactiect our report on tfi-eUTy--o-f-1-u-Rwi I a's Imancial statements and compliance wi federal laws and regulations. i ..... . . . . . . . MM= WASTUORM MM Insurance Building, P.O. Box 40021 Ej Olympia, Washington 98504-0021 El (360) 902-0370 D TDD Relay (800) 833-6388 my, Schedule (}fFindings And Questioned Costs ................................................................................. 4 Independent Auditor's Report On Internal Control Over Financial Reporting And On Compliance And Other Matters Based On An Audit Of Financial Statements Performed In Washington State Auditor's Office Page 3 City of Tukwila King County R-PrIM MILPHII The results of our audit of the City of Tukwila are summarized below in accordance with Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirementsfor Federal Awards (Uniform Guidance). MMV.1161�, if�,, We issued an unmodified opinion on the fair presentation of the financial statements of t faid Itf America (GAAP). Significant Deficiencies: We reported no deficiencies in the design or operation of internal control over financial reporting that we consider to be significant deficiencies. fflN1V"rM—= vIt ilinlimir, rl�Irilrriti!1111 IIIII R III III INNINI IINI 11 111 1� WE= Significant Deficiencies: We reported no deficiencies in the design or operation of internal control over major federal programs that we consider to be significant deficiencies. • Material Weaknesses: We identified no deficiencies that we consider to be material weaknesses. We issued an unmodified opinion on the City's compliance with requirements applicable to ea of its major federal programs. i Washington State Auditor's Office Page 4 B-4 MEN =11' Rm I 1 pJ11 I 1 1111 111111111 1111111, 1 IF 11111111 Pill 11111111 Iti 11 1 1 1111111 1 . - I I I The following programs were selected as major programs in our audit of compliance in accordan with the Uniform Guid,?nce. i CFDA No. Program or Cluster Title 20.205 Highway Planning and Construction Forim The dollar threshold used to distinguish between Type A and Type B programs, as prescribed the Uniform Guidance, was $750,000. 1 MEME= SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONE1 COSTS @MEG= Washington State Auditor's Office Page 5 B-5 City of Tukwila King County JanuaLl 1, 2015 through December 31, 2015 This schedule presents the status of federal findings reported in prior audit periods. The status listed below is the representation of the City of Tukwila. The State Auditor's Office has reviewed the status as presented by the City. Audit Period: Report Ref. No.: Finding Ref. No.: CFDA Number(s): 1/1/2014 -12/31/2014 1015306 2014-001 M 20.500 Federal Program Name and Granting i Pass -Through Agency Name: Agency: Federal Transit — Capital Investment King County Grants - Department of Transportation Finding Caption: The City did not have adequate internal controls to ensure compliance with federal suspension and debarment requirements for its Federal Transit program. Background: During fiscal year 2014, the City spent $371,027 in Federal Transit Capital Investment Grant funds. The City used these funds for the construction of the Tukwila Transit Center project. Federal grant regulations prohibit recipients from contracting with or making subawards to parties suspended or debarred from doing business with the federal government. For vendor contracts paid $25,000 or more, the City must ensure the vendor is not suspended or debarred. We reviewed two contracts totaling $190,611. One vendor, a local utility, was contracted to move its own underground utilities, to ensure safe operations in the transit center. The City did not believe this contract was subject to the suspension and debarment requirement. The other vendor was the architect of the project, who was hired for additional services at the end of the project. As the original contract was entered into previously and paid for with non-federal I funds, the City did not realize that the additional work that was paid with the federal funds was subject to suspension and debarment requirement. Status of Corrective Action: M Fully E] Partially E] Not Corrected E] Finding is considered no Corrected Corrected longer valid Cirrrective Acti*n Takon: The City reviewed it's contractingprocedures to ensure physical evidence exists demonstrating performance of one of the three compliance options listed in 2 CFR 180.300. The City developed a debarment certification that is now requiredfor all grants that involve federalfunds. We have a contract routingforin that is requiredfor all contract. Theform lists the certification as a requirementfor all grants that involvefederalfunds. Theform is reviewed to ensure compliance with all requirements prior to final approval. Washington State Auditor's 0JJice Page 6 B-6 Audit Period: Report Reference! Finding Reference CFDA Number(s): I/l/2014 -12/31/2014 No.: 1015306 No.: 2014-002 97.044 Federal Program Name and Granting Pass -Through Agency Name: Agency: None Assistance to Firefighters Grant -Department of Homeland Security Finding Caption: The City did not have adequate internal controls to ensure compliance with federal suspension and debarment requirements for its Assistance to Firefighters grant. Background: During the fiscal year 2014, the City spent $334,898 in Assistance to Firefighters grant funds. The Assistance to Firefighters grant was used to purchase radios to upgrade the effectiveness and efficiency of communications. The City purchased the radios through the Department of Enterprise Services. The responsibility to ensure recipients are not suspended or debarred from federal programs is the City's responsibility. However, the City did not ensure the Department of Enterprise Services was not suspended or debarred. Status of Corrective Action: Z Fully E] Partially E] Not Corrected E] Finding is considered no Corrected Corrected longer valid i Corrective Action Taken: The City reviewed it's contractingprocedures to ensure physical evidence exists demonstrating performance of one of the three compliance options listed in 2 CFR 180.300. The City developed a debarment certification that is now requiredfor all grants that involve federalfunds. We have a contract routingform that is requiredfor all contract. Theform lists the certification as a requirementfor all grants that involvefederalfunds. Theform is reviewed to ensure compliance with all requirements prior tofinal approvaL Washington State Auditor's Office Page 7 B-7 combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement • the City's financial statements will not be prevented, •, detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencle-s, in V-qidi-PjLoit0 to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we diii not identify any deficiencies in internal control that we consider to be material weaknesses. As part of obtaining reasonable assurance about whether the City's financial statements are free from material misstatement, we performed tests of the City's compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are requir-W to be reported under Government Auditing Standards. I I all a, MIN3 The • • this report is solely to describe the scope • • testing • internal control arm compliance and the resul", and n 1:12de an City's internal control or on compliance. This report is an integral part of an audit performed accordance with Government Auditing Standards in considering the City's internal control a compliance. Accordingly, this communication is not suitable for any other purpose. Howev] Washington State Auditor's Office Page 9 B-9 this report is a matter of public record and its distribution is not limited. It also serves to disseminate information to the public as a reporting too] to help citizens assess government operations. 1�y >,/, 1�d MEMMEMIM Washington State Auditor's Office B-10 Page 10 City of Tukwila King County MT City • Tukwila Tukwila, Washington fie C nanc tj_o_,Frl -11 M I of compliance requirements described in the U.S. Office of Management and Budget (OMB) Compliance Supplement that could have a direct and material effect on each of the City's major federal programs for the year ended December 31, 2015. The City's major federal programs are identified in the accompanying Schedule of Findings and Questioned Costs. M= Management is responsible for compliance with federal statutes, regulations, and the tenns and conditions of its federal awards applicable to its federal programs. Our responsibility is to express an opinion on compliance for each of the City's major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of comyliance in accordance with auditing stani_ard_,�,Vamerall�,i�_ ��_ United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Re.,�uirements Cost Princ4rzles andAudit Re4uirements Or Federal Awards fUniform Guidance�,. ''..• standards and the Uniform Guidance require that we •'I. and perform the audit '.• •! reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. Washington State Auditor's Office Page 11 B-11 An audit includes examining, on a test basis, evidence about the City's compliance with thol requirements and performing such other procedures as we considered necessary in t circumstances. i LINO federal program. Our audit does not provide a legal determination on the City's compliance. In our opinion, the City complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended December 31, 2015. Management of the City is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the City's internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program in order to determine the auditing procedures that are appropriate in the circumstances and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the City's internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. We did not identify any deficiencies Washington State Auditor's Office B-12 Page 12 in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. I' I I - I 11ELISIL =1 The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. However, this report is a matter of public record and its distribution is not limited. It also serves to disseminate information to the public as a reporting tool to help citizens assess government operations. 7,�., '\/ /i 096=11 TIMAMM, Washington State Auditor's Office Page 13 B-13 MCI= City of Tukwila Tukwila, Washington We have audited the accompanying financial statements of the governmental activities, the business -•e activities each ma[or fund and the gregate remaining fund information of the Citp of Tukwila, King County, Washington, as of and for the year ended December 31, 2015, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed on page 18. Management is responsible for the preparation and fair presentation of these financial stateme in accordance with accounting principles generally accepted in the United States of America; t includes the design, implementation, and maintenance of internal control relevant to t preparation and fair presentation of financial statements that are free from material misstateme whether due to fraud or error. I F.,TTI ffrown 331ri r MVP • 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 Washington State Auditor's Office Page 14 B-14 due to fraud or error. In making those risk assessments, the auditor considers internal contra IL relevant to the Cita's i rpearation and fair Co�resental'iLvm-ofLthe-fin-?,.,Tjt4,9- im audit procedures that are appropriate in the circumstances, but not for the purpose o f expressi an opinion on the effectiveness of the City's internal control. Accordin7gly, we express no su Jr ODinion. An audit also includes i7easonanieness oi signincam: accounting estimates macie oy management, as weii as evaivating TO overall presentation of the financial statements. i for our audit opinions. E =1 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, as of December 31, 2015, 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. Matters of Emphasis As discussed in Note I to the financial statements, the City adopted new accounting guidance, Governmental Accounting Standards Board Statement No. 68, Accounting and Financial Reprf,orti - rfor Pensions — an amendment o (IGASB Statement No. 2 7 and Statement No, 7 1 , Pension Statement No. 68. Our opinion is not modified with respect to this matter. ZEMMIZ= Accounting principles generally accepted in the United States of America require that the management's discussion and analysis on pages 19 through 35, budgetary comparison information on pages 104 through 105, pension plan information on pages 106 through I I I and information on postemployment benefits other than pensions on pages 112 through 113 be presented to supplement the basic financial statements. Such information, although not a part of the basic i k4l; financial statements. uired bki the Governmental Accounting 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 Washington State Auditor's Office Page 15 B-15 procedures to the required supplementary information in accordance with auditing standa generally accepted in the United States of America, which consisted of inquiries of manageme "gstan1da r manag me about the methods of preparing the information and comparing the information for consisten with management's responses to our inquiries, the basic financial statements, and other knowled we obtained during •our audit •of the basic financial statements. We do not express an opinion 4--tW sufficient evidence to express an opinion or provide any assurance. II I' Ia31FffJt 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 Schedule of Expenditures of Federal Awards is presented for purposes of additional analysis as required by Title 2 U.S. Code ofFederal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, andAudit Requirementsfor FederalAwards (Uniform Guidance). This schedule 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 basic financial statements. The information has been subjected to the 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 axx*-ffff&rj imi *Afnn�m,*viywstd-t-0 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. OTHER REPORTING REQUIRED BY GOVERNMENT AUDITING STA,-,VD1A-.9.D5- In accordance with Government Auditing Standards, we have also issued our report dated August 30, 2016 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. The purpose of that report is to describe the scope of our testing of I of loss 1 11 Washington State Auditor's Office Page 16 B-16 integral part of an audit performed in accordance with Government Auditing Standards considering the City's internal control over financial reporting and compliance. I 1F. -MI ISIAMM49EIM, MMIMMMIM Washington State Auditor's Office Page 17 B-17 City of Tukwila King County throughJanuary 1, 2015 December 0 r � r � ► r r � r , � Management's Discussion and Analysis — 2015 Statement of Net Position — 2015 Statement of Activities — 2015 Balance Sheet — Governmental Funds — 2015 Reconciliation of Governmental Funds Balance Sheet to the Statement of Net Position — 2015 Statement of Revenues, Expenditures and Changes in Fund Balance — Governmental Funds —2015 Reconciliation of Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balance to the Statement of Activities — 2015 Statement of Net Position — Proprietary Funds — 2015 Statement of Revenues, Expenses and Changes in Fund Net Position — Proprietary Funds —2015 Statement of • •. •2015 Statement of '• •n — Fiduciary Funds1 Statement of - • • •2015 Notes to Fin?. Schedule of Revenues, Expenditures, and Changes to Fund Balances — Budget and Actual — General Fund — 2015 Notes to the Required Supplementary Information — 2015 Pension Plan Information — 2015 Other Post -Employment Benefit Information — 2015 Scheduleof .- • + of .• •2015 Notes to the Schedule of Expenditures of Federal Awards — 2015 Washington State Auditor's Office Page 18 B-18 CITY OF TUKWILA: 2015 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS ............ 111fill FIRLOOM MR!" I I Total net position, the amount by which total assets plus deferred outflow of resources exceed total liabilities plus deferred inflow of resources, equals $287 million. A total of 87.4 percent or $250.8 million of total net position is invested in capital assets such as streets, land, buildings, equipment, and other improvements. The remaining net position of $36.2 million is available for debt service, capital projects, and to meet tha government's ongoing activities and obligations. • The City's net position decreased by $5 million. Governmental activities decreased by $7.2 million, and business -type activities increased by $2.2 million. The primary reason for the governmental decrease is due to a $9.6 million adjustment that was a result of implementing GASB 68. An additional decrease of $1.4 million was because the City's Component Unit was divested. The business -type activities increase is primarily due to fee increases to fund future capital projects offset by a $2.3 million adjustment that was a result of implementing GASB68 and a $757 thousand change in accounting principal related to depreciation. • As of the close of the current fiscal year, the City of Tukwila's governmental funds reported combined ending fund balances of $38.6 million, an increase of $7.1 million in comparison with the prior year. Approximately 29.5% of this amount ($11.4 million) is available for spending at the government's discretion (unassigned fund balance). • At the end of the current fiscal year, unassigned fund balance for the general fund was $10.9 mon, or 22 percent of total general fund expenditures. • The City of Tukwila's total outstanding long-term debt increased by $7.1 million during the current fiscal year. This change is a combination of new debt issued for $10 million offset by principal payments on existing debt, increases in compensated absences, and increases in other post -employment benefits organized so the reader can understand the City of Tukwila as an entire operating entity. The statements then proceed to provide an increasingly detailed look at specc financial condons. Washington State Auditor's Office Page 19 -19 CITY OF TUKWILA: 2015 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS 0 - 1 11-1 1 •- • • - -mr-PRoMIR71 i IoN WeRN INNIU so Other supplementary information, in addition to the basic financial statements, is also contained in this report. This section of the Management's Discussion and Analysis is intended to introduce and explain the basic financial statemeits. type activities are consolidated into columns which add to a total for the City. The focus of the Statement of Net Position is designed to be similar to bottom-line results for the City and its &overnmental and businessAFk*,,e activities. This statement combines and consolidates �lfovernmentail funds'current financial resources (short-term spendable resources) with capital assets and long-term obligations. Over time, increases or decreases in net position may be one indicator of improvement or deterioration in the City's overall financial health. The Statement of Activities is focused on both the gross and net cost of various functions, including both governmental and business -type activities, which are supported by the City's general tax and other revenues. This is intended to summarize and simplify the user's analysis of the cost of various governmental services and/or subsidy to various business -type activities. The revenue generated by the specific functions (charges for services, arants and contribu 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. Governmental activities of the City include general government (executive, finance, legal, human resources, and court u c sa t h sical environmen conomic environment r n Fund Financial Statements OWN ivfft — k�211VVVIIL entity with a self -balancing set of accounts used to account for specific activities or meet certain objectives. While WWWAN VITP1111IL-74111 to RM; Ilion One] 0J I L -I mrAtv Im migra,14221 I L:_A L01014 baeas Owl mm 111m Governmental Funds term and long-term revenues/financial resources and expenditures. The information in the governmental fund Washington State Auditor's Office Page 20 B-20 CITY OF TUKWILA: 2015 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS so - MIN I M -11-1 UJI1011 Bill M 1140 r-WIM] I D Mr -A Lei Ip a C -IM small-alogmael M garzxml 11 fit; I OLM I A &a III rJ_" b-1 Lei A INNS - RIMMIMMIFFIM financial statements, reconciliations are provided. The reconciliation between the governmental fund Balance Balance Sheet, while the reconciliation between the governmental fund Statement of Revenues, Expenditures and Changes in Fund Balance and the government -wide Statement of Activities is found directly following the governmental funds' Statement of Revenues, Expenditures, and Changes in Fund Balance. 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 facilities (urban renewal) 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 the other governmental funds can be found in the combining statements later in this report. '0101 q A1,7311psimal I fMU-a7U-13eU-0y-g&,F Disiness-type UC MIMM ana use Me same • • 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 •.• and the services rendered. TT1TeUW GULU-cm, T; I I I IU I[ I LUI I Idl bt::1 MV,-_--M1U5 dlt:! ISM to accullurt for guuub LIS—dw.:, SPAI -1 and services provided internally to various City departments. 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. lxterx2l se.-Mce •' 2re 2A esseAtiql 2ccpyAtiAl •• Yse:f • 2CCYmyl2te a&I all#cate citsts iAterAally amtAt the City's various functions. The City uses internal service funds to account for its fleet of vehicles, and its insurance premiums. • Funds Fiduciary funds account for assets held by the City in a trustee capacity or as an agent for individuals, private organizations, other governments or other funds. Fiduciary funds are not included in the government -wide financial statements because their assets are not available to support the City's activities. The City has two fiduciary funds: a firemen's pension trust fund and an agency fund, which are accounted for on the accrual basis. As agency funds are custodial in nature, they do not include revenues and expenses. • • 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 at the end of the Basic Financial Statements section. Washington State Auditor's Office Page 21 B-21 CITY OF TUKWILA: 2015 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS In addition hzthe basic financial statements and accompanying noh*o, this report also presents certain required supplementary information including budget and actual schedules for the City's general fund and, budgeted moonhon+nejnrspecial revenue funds; and eschedule offunding progress for the Firemen's Pension Trust Fund and other post -employment benefits. Additional pension benefit information infound inNote O. The combining statements referred to earlier in connection with non -major governmental funds and internal service funds are presented in the section titled "Fund Financial Statements and Schedules." The Statement of Net Position can serve as a useful indicator of the City's financial position. The City ofTukwila's net position etDecember 31.2O14and 2O15totaled $292million and $287million respectively. The City's overall net position decreased $5 million, or 17%, from the prior fiscal year. The reasons for the overall increase are discussed in the following sections for governmental activities and business -type activities. By far, the largest portion of the City's net position of $250.8 million, or 87.4% reflects investment incapital assets (e.g.. |and, bui|ding, 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 awsriety ofservices to citizens. Aconrding|y, these assets are not available for future upending. Although investment in capital ooaeta is reported net ofrelated 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. Anadditional portion cf the City's net position, $5.4 miUion, or 1.996 represents resources that are subject to external restrictions on how they may beused. The remaining balance cf $3O.8million, or1O796iounrestricted and may beused tomeet the City's ongoing obligations to its citizens and creditors. Following is a condensed version of the government -wide Statement of Net Position for 2015 compared to 2014. Current and other assets Capital assets, net of accumulated depreciation Total assets280,456 267,646 84,455 81,598 364,912 349,244 205,816203,97566,826 66,036272,642270,011 Deferred Outflows of Resources 2,576 457 288 Long-term liabilities Other liabilities Total liabilities Deferred Inflows of Resources Net position Net investment in 2,864 457 47,172 40,048 7,723 8,665 54,895 48,714 18,770 7,385 2,531 985 21,302 8,371 65,943 47,434 10,254 9,650 76,197 57,085 4,187 604 346 4,533 604 capital assets 191,33 191,081 59,483 57,678 258,815 248759 Restricted 5/446 3.974 0 430 5,440 4,404 Unrestricted 16,126 25,009 14,659 13,840 30,785 38,849 The governmental unrestricted net position comprises $16 million. The general fund unrestricted net position is available for functions such as public safety employee salaries and supplies, park and road maintenance, and other general government services. The unrestricted net position ofbuoineom4ype activities, $147 miUinn, may only be spent on activities n*|ebad to one of the three City utilities (water, eewer, and surface water) or on the golf course Washington State Auditor's Office Page 22 CITY OF TUKWILA: 2015 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS activities. Examples of utility activities include: maintenance of water/sewer mains, pump and lift stations, storm drain flushing, and water meter reading. The $4.7 million increase in current and other assets for governmental activities stems primarily from the $2.1 million in unspent bond proceeds and an increase in taxes receivable. A significant property sale occurred within the City resulting in $1.1 million accrual of real estate excise tax revenue. The increase of $2.1 million in current and other assets for business -type activities is comprised of a net increase of $1.9 million in cash and investments. This increase results from a rate structure design in the utility funds that build reserves for major infrastructure replacement and improvement. The change in net position represents the increase or decrease in City net position resulting from its various activities. Following is a condensed version of the City's changes in net position. The table shows the revenues, expenses and related changes in net position for both governmental -type and business -type activities: CITY OF TUKWILA CHANGES IN NET POSITION (in thousands) Revenues: 4,788 (709) 5,260 4,023 10,048 3,315 Program revenues (957) (1,995) 0 0 (957) (1,995) Charges for services $9,748 $8,554 $22,158 $19,884 $31,906 $28,438 Operating grants and contributions 893 2,563 184 - 1,077 2,563 Capital grants and contributions 6,432 8,053 2,040 1,548 8,471 9,602 General revenues 0 0 (757) 0 (757) Property taxes 14,320 14,871 - - 14,320 14,871 Sales and use taxes 19,334 17,105 68,882 67,924 19,334 17,105 Natural gas use tax - - - - Hotel/Nbtel taxes 678 597 678 597 Utility taxes 4,019 3,856 4,019 3,856 Interfund utility taxes 2,061 1,851 2,061 1,851 Business taxes 2,749 2,556 2,749 2,556 Excise taxes 5,321 3,513 5,321 3,513 State entitlements 1,844 1,736 1,844 1,736 Investment earnings 475 444 475 444 Mscellaneous 281 179 - - 281 179 Total revenues 68,156 65,878 24,381 21,432 92,537 87,310 Expenses: General government 8,042 10,289 - - 8,042 10,289 Public safety 29,403 29,293 29,403 29,293 Transportation 11,070 11,668 11,070 11,668 Physical environment 2,611 2,480 2,611 2,480 Culture and recreation 5,125 5,716 5,125 5,716 Economic environment 5,783 5,337 5,783 5,337 Interest on long-term debt 1,033 1,205 - - 1,033 1,205 Water/sewer - - 13,186 12,752 13,186 12,752 Foster golf course 2,087 1,946 2,087 1,946 Surface water - - 4,148 3,311 4,148 3,311 Total expenses 63,068 65,987 19,421 18,009 82,489 83,996 Increase (decrease) in net position before transfer: 5,088 (109) 4,960 3,423 10,048 3,315 Transfers (300) (600) 300 600 0 0 Change in net position before special item 4,788 (709) 5,260 4,023 10,048 3,315 Special Rem (957) (1,995) 0 0 (957) (1,995) Change in net position 3,831 (2,704) 5,260 4,023 9,091 1,320 Net position -beginning of period 220,064 238,121 71,948 69,351 292,012 307,472 Change in accounting principle- Retirement Costs (9,551) 0 (2,308) (557) (11,859) (557) Change in accounting principle 0 0 (757) 0 (757) Prior Period Adjustment (1,442) (15,353) 0 (870) (1,442) (16,223) Net position beinninbalance as restated 209,072 222,768 68,882 67,924 277,954 290,693 ir Washington State Auditor's Office Page 23 B-23 CITY OF TUKWILA: 2015 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS Governmental activities ended the year with a $7.2 million decrease in the City's net position. Revenues to fund capital assets are recorded as program or general revenues in the statement of activities. However, asset purchases are not recorded as expenses in the year purchased and construction costs are not recorded as expenses in the year incurred. Instead, the costs are recorded as long-term assets and are depreciated over their useful life. The primary reason net position decreased was due to implementation of GASB Statement No. 68 and the divestment of the City's component unit. • Implementation of GASIB Statement No. 68 $9.6 million. • Divestment of component unit $1.4 million. A special item representing the 2015 urban renewal motel purchase $957 thousand valuation reduction als# reduced net position. Revenues from governmental activities increased $2.3 million from 2014 activity. The components and explanation of the increase follows. • Charges for services increased $1.2 million or 14.0% in 2015. Major reasons for the increase include permit fees revenue increase of $325 thousand over 2014 due to an increase in permit activity and the City receiveR $350 thousand in 2015 that was associated with 2014 due to a change in billing methods. Additionally, the City reclassified $406 thousand of EMS levy revenue from general revenue to charges for services. The reclassification is because the City receives the levy revenue based on call volume rath- •. - base within the City limits. • Operating grants decreased by $1.7 million or 65.2%. Funding for several projects was received in 2014 for projects that were completed in 2014 or early 2015 including a federal grant for $989 thousand overlay and repair to East Marginal Way. Additionally, the City received $334 thousand to purchase radios for first responders. This grant was specific to 2014. • Capital grants and contributions decreased $1.6 million or20.1%. In 2014 the City received $3.5 million in grant funding for regional mobility projects that was specific to 2014. The reduction of this grant is offset by increases in funding for the Interurban Ave S project. • Sales and use taxes increased $2.2 million or 13.0% primarily due to an overall increase in services activity of $895 thousand, construction activity of $436 thousand, wholesale trade category of $421 thousand, and retail trade activity of $364 thousand. All other sales and use tax categories were up except for manufacturing, which decreased by $39 thousand. • Excise taxes increased $1.8 million or 51.5% primarily due to the accrual of real estate excise tax of $1.7 million. A significant property sale occurred in the latter part of 2015 which resulted in a one-time increase in revenue. Total governmental expenses decreased by $2.9 million. General government expenses decreased from 2014 by $2.2 million, or 21.8% primarily due to lower medical costs in 2015 than 2014. Transportation expenses decreased from 2014 by $726 thousand, or 6.2%. The City expensed costs related to overlay and repair that had previously been recorded as capital assets. The primary reduction was due to less depreciation due to this prior period adjustment. Culture and recreation costs decreased by $593 thousand, or 10.4% mostly due to the divestment of the City's blended component unit. Ureir, HUMP 117 =VF F 15 16, respectively, to the financial statements. Washington State Auditor's Office B-24 Page 24 CITY OF TUKWILA: 2015 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS The next chart summarizes the governmental activity revenue bysource, while the second one reflects the specific program revenues and related expenses for the various activities of the City. Gaps between specific pnzUmm revenues and their related expenses are funded through general tax revenues. Utility taxes 9% 141 M -T -M 7 Otherrevenue 4% Charges for services 'rating grants & nntnbmionu 1% Capital grants& contributions erty taxes 21% Washington State Auditor's Office Page 25 B'25 CITY OF TUKWILA: 2015 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS • Program revenues • Expenses Business -type net position increased by$2.2million during 2O1E Key components nfthis increase include: • Anincrease incapital grants and contributions of$4Q2thousand. ° Anincrease inexpenditures of$1.4million. • A change in accounting principle of $757 thousand to depreciate capital assets using the straight line method. ° A change in accounting principle of $2.3 million also resulted in a decrease to net position. The adjustment was due tothe implementation of GASB Statement No. 68. � $23 million or an 11.4% increase in charges for services primarily due to utility rate increase effective January 2015.and water and sewer hook-up fees onnew construction. ° Income before non-operating revenue/(expense), capital contributions, and transfers amounted to: • Water fund: $ 787.554 = Sewer fund: 1.657.567 ° Foster golf course fund: (}04.705) • Surface water fund: 965,559 LZAG5 885 Washington State Auditor's OJJice Page 26 AM CITY OF TUKWILA: 2015 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS The following chart shows the relative net position balances for each business -type fund: Surface wate Foster golf course nm 21% 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. An such, most of the net position is not available to support the ongoing expenses ofthe funds. The following chart contrasts the total net position tothe spendable portion nfnet position for each enterprise fund: Washington State Auditor's 0ff7m Page z/ CITY OF TUKWILA: 2015 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS $35,000,000 $30,000,000 $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 $0 Water Comparison of Total Net Position to Spendable Net Position Business -Type Funds ESpendable/Unrst Net Position 0 Total Net Position 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 $0 1 1'. . 1 0 1 1- . 9-0 Mej MIM MMMUMIFIRm- Water Sewer Surface Water Foster Golf Course • Revenues • Expenses Washington State Auditor's Office Page 28 B-28 CITY OF TUKWILA: 2015 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS The purpose of the City's governmental funds is to report on near-term revenues/financial resources 2W expenditures. This information helps determine the City's financial requirements in the near future. Specifically, the fund balance is a good indicator of the City's financial resources. of $7.1 million or 22.5%. The increase is primarily due to bond proceeds of $6.1 million in the arterial street fund, •' draw on a line -of -credit in the facilities replacement fund, an increase in real estate excise tax receivable of $1.7 million split between the arterial street and a capital projects fund and an increase of $2.2 million in sales and use tax revenue offset by an increase in general governmental expenditures. These increases are also offset by the divestiture of the City's blended component unit. • General fund $834,256 • Arterial Street • 3,676,871 • • Improvement District No. 33 (3,255) • Facilities — •_ Renewal 528,092 Other governmental funds 690,705 $5,726,669 principal payment and a $346,784 interest payment associated with the assessments, exceeded revenues by $3,255. WNW 90111 1101,1146 rz I IR ffww 10 !r• [:J4J*zM [I i A[$ 62 1 a telr• 111A42 Loll &tzille 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 •- accounted •' in another. At the end • 2015, thz general fund had an unassigned fund balance of $10.9 million. Washington State Auditor's Office Page 29 B-29 CITY OF TUKWILA: 2015 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS The following chart shows the relative fund balances for governmental funds: Arterial street fur 13% [M - Local Improvement District #33 Urban val Capital project funds 10% I revenue funds 2% ice funds 4o Washington State Auditor's Office Page 30 B-30 CITY OF TUKWILA: 2015 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS $5,000,000 Taxes $4,585,479 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 ($1,000,000) r 11 4230•� ASMU' • =! Intergovernmental ($93,120) 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. 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 2015: zmuff=- Rew budget for &elly Day payout $220,001 Additional budget for Police and Fire overtime 510,000 Increase utilities budget 80,000 Increase budget related to grant revenue 111,046 Adjust budget to account for grant funding received for emergency radios 60,000 Washington State Auditor's Office Page 31 B-31 CITY OF TUKWILA: 2015 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS Net Revenue Increase: Grant revenue not budgeted during regular budget process 736,046 Increase plan review fees for consulting services 150,000 Increase in sales tax revenue 2,122,000 Reasons for the significant variances in the general fund between the final budget and actual results include: • Revenue from taxes were $776 thousand, or 1.8%, higher than budget. Property taxes decreased $71 thousand and sales and use taxes increased $245 thousand. In addition, there was a gain of 13 percent, or $331 thousand in gambling taxes and other taxes increased $207 thousand. • Intergovernmental revenue was $346 thousand, or 7% less than budget. The primary reason is the City received grant funds in 2014 that did not carry forward into 2015. • Charges for services was $432 thousand, or 17.5% higher than budget. The primary reason is because of increased permitting activity. • Expenditures were below budget by $550 thousand, or 1.1%. Transportation costs were lower than expected due to the timing of capital outlay on projects that were delayed or where completion timelines extended. All other functions showed reductions in spending. • . �INIVINITMU • The City's investment in capital assets for both its governmental and business -type activities as of December 31, 2015 totaled $273 million (net of accumulated depreciation), an increase of $2.6 million, or 1.0%, from 2014. This investment in capital assets includes land, buildings, improvements, machinery and equipment, construction in progress, utility transmission/distribution systems, roads, bridges, and other infrastructure. 35,312,814 Construction in Progress 26,133,182 16,718,203 Buildings 10,711,996 13,810,4489,397,90719,391,023 23,208,355 Other Improvements 5,933,158 6,775,47449,607,58454,078,494 56,383,058 Machinery and Equipment 6,811,474 6,841,516 7,219,004 7,325,840 Infrastructure 120,913,528 124,516,494 - - 120,913,528 124,516,494 2,346,230 7, 247, 963 8,679,027 48,145, 336 407,530 2,346,231 4,200,272 484,324 37,659,044 $ 37,659,045 33,381,145 20,918,475 More detailed information on capital assets is provided in Note 7 to the financial statements. General capital outlay purchases added $196,588 in machinery and equipment and included various technology purchases in the amount of $111,521, exercise equipment for $10,779, and a portable HVAC system for $11,578, and thermal imaging cameras totaling $62,710. Many of the projects in the Arterial Street Fund continue to be in the construction phase adding $7.5 million in construction -in -progress for the period. The major arterial street fund activities are comprised of the following: • Interurban Avenue South, $4.5 million • Tukwila Urban Center Pedestrian/Bicycle Bridge $1.3 million • Tukwila Urban Center Transit center $0.7 million Washington State Auditor's Oce Page 32 B-32 CITY OF TUKWILA: 2015 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS • Boeing Access Road Bridge Rehabilitation $0.47 million • Andover ■ West $0.4 million • • other Arterial Street Fun•+• •- otal $0.13 million Ongoing Residential Street fund construction projects added $1,408,205 to construction -in -progress and include the following: 0 Thorndyke Safe Routes to School, $820,669 0 40 — 42n' Ave S, •• a Cascade View Safe Routes to School, $127,961 0 42n' Ave S Roadside Barriers, $75,870 0 Various other Residential Street Fund projects total $62,01 Duwamish Hill Preserve work in progress improvements and $11,936 for other park related projects. rtipros�� MW��@=Uor& in •,rogress • for the year. V W usixess-ty�e 2ctivities c#Asiste*,if43.7 • iA iA Arigresc-wtirk fpr tXe ye2r. %z2j*r;F-rTJeQts :n the utility • comprise of the following: • East • Way S Pipe, • • •. Ave S, $1,773.744 Et i AMF VP IM • current period. 'te Tel-W-771-IffrCILTIF 131P ITS, MIT %o i / 442—ozi is rerense _771nus wr Ene MOMM-Rel a nu 5 utilities. The increase in outstanding bonds is due to the principal payments redeemed for the year netted against new debt of $8.1 million issued in 2015. The City currently maintains a rating of AA with Standard and Poor's, AA - with Fitch's Investor Service and Al with Moody's for its general obligation debt. The City also has $6.1 million in •- assessment debt. Washington State Auditor's 0JRce Page 33 B-33 CITY OF TUKWILA. 2015 QAFR MANAGEMENT'S DISCUSSION AND ANALYSIS The following schedule summarizes the City's bonded clebt: General obligation uvnu * 23.057.71* u 16,638221 * $ $ 23.057714 $ 16,638,221 Re�enueuvnuo 1742,527 ummmm 1,742527 ommmm Public Works Trust Fund Loans $ $ $ 5,64*459 $ 5,7*2867 $ 5.646,45e * 5J42867 Other Post Employment Benefits 7.1*+.923 5.3*1.973 7,1+*.923 5.:41.973 Employee leave benefits 3,860,47 3,740,161 334,004 306,4*1 4,194,*76 4,046,602 Due mother governments suenuon nmm*nn suesunn 6650400 More detailed information on long-term debt is provided in Note 11 to the financial statements. The outlook for 2016 is positive. The economy in King County is showing steady signs of recovery and the City is in a good position to take advantage of the strong regional economy. The City of Tukwila has e ameU residential population, yet the City oenmn the regional economy and has become an economic puwerhouae, providing jobs and revenue for the region and state. Several major pending developments will have significant impacts on the future cfTukwi|a'eeconomy: � In 2015. developers broke ground on Washington p|ece. o 10-ahzrystructure comprising 370 residential units and 18Ohotel rooms. The building will be the tallest between Seattle and Tacoma and the first multi- family residential housing in Tuhwi|a's Gouthcenter District. Given its vva|kabi|ity to high capacity bus, commuter rail, retail, dining, and entertainment, the project is projected to be a catalyst for additional transit - oriented development. � In 2014, the City completed construction of a new transit center in the heart of the Southcenter District on Andover Park West. The Transit Center provides osafer, expanded, high-quality bus stop with shelters, larger bus pullouts, improved lighting, sidewalks and landscaping. The transit center serves numerous King County bus routes including the RopidRide F line. Just anthis project helped attract Washington Place, it = In 2016 the City will start construction on a pedestrian and bicycle bridge over the Green River near the intersection of West Valley Highway and LonQeures Way. The bike/ped bridge in fully funded with park impact fees, federal gnenha, and e $6.8 million state regional mobility grant. This bridge will link the Southcenter District with the Tukwila commuter rail station and enable the area to grow as a transit -oriented neighborhood which will attract more multi -family housing and jobs. The bridge design and property acquisition work iaalmost finished and construction ioscheduled tobecompleted in2O17. Washington State Auditor's Office Page 34 B-34 CITY OF TUKWILA: 2015 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS T T TIM 1 DIN n Tinal paTin no. n 771-5jurny Turl-TtlTras Te landscaping, and property restoration in spring 2016. 1 The City has invested significant resources into improving the health and safety of the Tukwila International Boulevard neighborhood and catalyze new development. 1 5 1 U A F M 14 a -101110101a;1114 ago I -_tTqjrjV%jjj tTgrr __ I- MW M16190"IM1114 -1W "Imilimill - iffiN lawill wil a - Ma - WIN • attract more development and improve the .•- • the whole city. • = ♦ M • R 1-1 r • V nzm Its] so 0 A I gi M IN W111 MIXIMMMMAIDN' Washington State Auditor's Office Page 35 B-35 CITY OF TUKWILA: 2015 CAFR BASIC FINANCIAL STATEMENTS CITY OF TUKWILA, WASHINGTON STATEMENT OF NET POSITION DECEMBER 31, 2015 ASSETS: Cash and cash equivalents $ 22,681,952 $ 12,293,611 $ 34,975,562 Investments 9,259,008 2,636,502 11,895,510 Taxes receivable 6,906,384 789 6,907,173 Other receivables 1,100,074 1,637,441 2,737,515 Due from other governmental units 2,857,124 659,327 3,516,452 Inventory of materials and supplies 13,837 62,402 76,241 Restricted cash and cash equivalents 2,442,097 82,006 2,524,103 Notes receivable 6,266,537 257,016 6,523,553 Real property held for resale 7,645,000 2,095,180 7,645,000 Investment in joint ventures 9,193,002 - 9,193,002 Non -depreciable capital assets 61,445,996 9,594,193 71,040,189 Depreciable capital assets (net of accumulated 4,023,185 Business taxes received in advance 510,226 depreciation) 144,370,156 57,231,894 201,602,050 Net Pension asset 6,275,313 - 6,275,313 ie iiG Net investment in capital assets 191,331,156 59,483,424 250,814,581 Restricted for: DEFERRED OUTFLOWS OF RESOURCES: Debt service Deferred loss on refunding 390,874 46,323 437,196 Deferred outflows related to pensions 2,185,306 241,271 2,426,577 LIABILITIES: Accounts payable 2,035,021 125,563 2,160,584 Accrued wages and benefits payable 1,562,433 118,718 1,681,151 Accrued interest payable 339,069 18,113 357,182 Unearned revenue 460,282 12,450 472,732 Other liabilities 2,742,814 161,245 2,904,060 Bonds and other debt payable Due w ithin one year 2,774,337 759,117 3,533,454 Due in more than one year 44,397,994 6,963,873 51,361,868 Net pension liability 11,630,656 2,095,180 113,725,836 DEFERRED INFLOWS OF RESOURCES: Deferred inflows related to pensions 3,677,005 346,180 4,023,185 Business taxes received in advance 510,226 - 510,226 NET POSITION: Net investment in capital assets 191,331,156 59,483,424 250,814,581 Restricted for: Debt service 1,707,618 - 1,707,618 Tourism promotion 623,120 623,120 Arterial street improvements 2,421,047 2,421,047 Drug investigation and enforcement 7,239 7,239 Land and park acquisition, development 135,616 135,616 Fire improvements 551,434 - 551,434 Unrestricted net position 16,125,592 14,658,912 30,784,504 The notes to the financial statements are an integral part of this statement. Washington State Auditor's Office Page 36 B-36 CITY OF TUKWILA: 2015 CAFR BASIC FINANCIAL STATEMENTS CITY OF TUKWILA, WASHINGTON STATEMENT OF ACTIVITIES For the Year Ended December 31, 2015 PRIMARYGOVERMENT $ 14,320,085 $ $ 14,320,085 Retail sales and use taxes 19,334,152 19,334,152 Governmental activities 677,971 677,971 Utility taxes 4,019,288 4,019,288 General Government $ 8,042,254 $ 3,794,134 $ 93,898 $ $ (4,154,221) $ (4,154,220.24) Public safety 29,403,206 1,754,856 358,798 (27,289,552) (27,289,552) Transportation 11,069,605 206,065 272,728 4,658,261 (5,932,552) (5,932,552) Physical environment 2,611,297 - - 761,722 (1,849,574) (1,849,574) Culture and recreation 5,125,227 644,283 54,542 1,011,554 (3,414,847) (3,414,847) Econorric environment 5,782,907 3,348,802 113,504 - (2,320,602) (2,320,602) Interest on long-term debt 1,033,440 - - (1,033,440) (1,033,440) BUSINESS -TYPE ACTIVITIES: Water 5,734,624 6,508,536 1,213,611 1,987,523 1,987,523 Sew er 7,451,612 9,064,173 209,180 1,821,741 1,821,741 Surface water 4,147,974 5,102,617 183,616 617,100 1,755,359 1,755,359 General Revenues Taxes Property taxes $ 14,320,085 $ $ 14,320,085 Retail sales and use taxes 19,334,152 19,334,152 hotel/mDtel taxes 677,971 677,971 Utility taxes 4,019,288 4,019,288 Interfund utility taxes 2,061,098 2,061,098 Business taxes 2,749,140 2,749,140 Excise Taxes 5,321,281 5,321,281 State entitlements 1,843,634 1,843,634 Unrestricted investment earning 475,345 475,345 Mscellaneous 280,551 280,551 Excess of revenues over expenses 5,087,756 4,960,326 10,048,083 before transfer and special item Transfers (300,000) 300,000 - Special item (956,798) (956,798) tig�;H1)3-t��„ <.�w,:. �. ,,,,.�.,� , , ra,'. ,t*; ,,.i, �/�j/�.*,�./.��"*�`.� -,�v.��iF�i.�/✓i�iY���x'i>r:,�,.3 .�-.,s. Net position - beginning 220,064,399 71,947,737 292,012,136 Change in accounting principle - pension costs (9,551,003) (2,308,254) (11,859,257) Change in accounting principle - depreciation (757,473) (757,473) Divestment of Component Unit (1,441,532) - (1,441,532) Net position -beginning restated 209,071,863 68,882,010 277,953,873 The notes to the financial statements are an integral part ofthis statement. Washington State Auditor's Office Page 37 B-37 CITY OF TUKWILA: 2015 CAFR BASIC FINANCIAL STATEMENTS CITY OF TUKWILA, WASHINGTON BALANCE SHEET GOVERNMENTAL FUNDS DECEMBER 31, 2015 ASSETS: 623,120 623,120 2,421,047 - 2,421,047 Cash and cash equivalents $ 8,724,316 $ 2,187,700 $ 1,038,769 $ 1,300,301 $ 3,691,056 $ 16,942,142 Investments 5,240,755 - - - - 5,240,755 Taxes receivable 5,571,294 627,246 - - 707,844 6,906,384 Other receivables 441,099 - 410,476 5,587,275 - 139,206 990,781 Due from other governmental units 216,131 1,147,114 - 1,493,879 2,857,124 Restricted assets: - 397,033 397,033 141,373 - 141,373 Cash and cash equivalents 8,406 2,421,047 - - 12,644 2,442,097 Special assessment receivable - - 4,925,713 - 4,925,713 Notes receivable 1,340,824 - 1,340,824 Real property held for resale - 7,645,000 7,645,000 LIABILITIES, DEFERRED INFLOWS AND FUND BALANCES: Liabilities: Accounts payable 604,183 1,057,320 9,714 302,754 1,973,971 Accrued wages & benefits 1,493,744 14,529 1,042 33,634 1,542,948 Unearned revenue 200,700 - - 259,582 460,282 Other liabilities 153,776 258,876 100,000 61,412 574,064 Deferred inflow of resources Unavailable revenue -special assessment - - 5,336,189 - - 5,336,189 Business taxes received in advance 510,226 - 510,226 Unavailable revenue -property tax, other 249,390 249,390 Fund balance: hbnspendable Restricted: Hotel/motel tax Arterial street capital improvements Drug investigation and enforcement Park and land acquisition/development Fire improvements Debt service guraranty fund Local Improvement Dstrict Assigned: Residential street improvements Arterial street improvements Contingencies Land & park acquisition Facilities & urban renew at General government improvements Technology Public safety equipment Debt service Unassigned 1,340,914 7,645,000 8,985,914 - 623,120 623,120 2,421,047 - 2,421,047 - 7,239 7,239 135,616 135,616 551,434 551,434 - 668,849 668,849 1,038,769 - 1,038,769 - 819,161 819,161 - 2,631,336 - 2,631,336 5,587,275 - - 5,587,275 - - 1,981,473 1,981,473 1,189,545 - 1,189,545 - - 397,033 397,033 141,373 - 141,373 350,000 - 350,000 - 203,323 203,323 10,911,244 - 10,911,244 The notes to the financial statements are an integral part of this statement. Washington State Auditor's Office Page 38 B-38 CITY OF TUKWILA: 2015 CAFR BASIC FINANCIAL STATEMENTS CITY OF TUKWILA, WASHINGTON RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET POSITION DECEMBER 31, 2015 Total governmental fund balances as reported on this statement $ 38,643,749 Capital assets used in governmental activities are not financial resources and therefore not reported in the funds. Non -depreciable assets 61,445,996 Depreciable assets (net) 139,629,022 Internal service fund assets 4,741,135 205,816,152 The net pension asset is not an available resource and, therefore, is not reported in the funds. 6,275,313 Deferred outflow of pension costs 2,147,396 Deferred inflow of pension contributions (3,622,610) (1,475,214) 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. 9,193,002 Revenue that was not collected witin the recognition period and therefore was not available to paycurrent liabilities: Unavailable revenue reported for propertytaxand other receivables 249,390 Unavailable revenue reported for special assessment 5,336,189 5,585,579 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 (2,774,337) Long term liabilities due in more than one year (55,699,438) Accrued interest payable (339,069) Deferred outflow on refunding 390,874 (58,421,971) 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 statementofnet position. 7,286,210 The notes to the financial statements are an integral part of this statement. Washington State Auditor's Office Page 39 B-39 CITY OF TUKWILA: 2015 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, 2015 REVENUES: 7,247,117 365,978 95,299 7,708,394 Public safety Taxes $ 45,201,369 $ 1,400,104 $ $ $ 1,946,643 $ 48,548,116 Licenses and permits 2,242,256 - - 2,242,256 Intergovernmental 4,626,463 4,788,489 2,424,932 11,839,883 Charges for services 2,896,446 121,485 917,317 3,935,248 Fines and forfeitures 261,457 - - 261,457 Investment earnings 163,618 9,677 296,304 868 4,878 475,345 Special assessments - - 650,415 - - 650,415 Mscellaneous 120,887 53,646 1,809 100,000 55,925 332,268 General government 7,247,117 365,978 95,299 7,708,394 Public safety 28,973,651 - 61,514 29,035,165 Physical environment 1,919,306 - 15,922 1,935,228 Transportation 2,820,022 2,948,053 24,593 5,792,668 Culture and recreation 4,259,532 - 90,520 4,350,052 Economic environment 4,328,177 - 1,504,207 5,832,384 Debt service: 8,306,453 4,696,541 31,476,863 Principal - 605,000 1,875,507 2,480,507 Interest - - 346,784 778,826 1,125,609 Capital outlay 196,589 7,583,236 - 3,646,449 11,426,274 Excess (deficiency) of revenues OTHER FINANCING SOURCES (USES): Transfers in 500,000 1,700,000 3,433,846 5,633,846 Transfer out (5,433,846) - (500,000) - (5,933,846) Issuance of debt 5,825,000 2,250,000 8,075,000 Bond premum 309,758 - 309,758 Net change before Special Rem 834,256 3,676,871 (3,255) 1,484,890 690,705 6,683,467 Special Item- asset valuation (956,798) (956,798) Fund balance- beginning 17,496,550 1,375,512 1,042,024 8,306,453 4,696,541 31,476,863 Dvestnent of Conponent Unit - - - - - 1,440,218 Fund balance -beginning restated 17,496,550 1,375,512 1,042,024 8,306,453 4,696,541 32,917,081 The notes to the financial statements are an integral part of this statement. Washington State Auditor's Office Page 40 B-40 CITY OF TUKWILA: 2015 CAFR BASIC FINANCIAL STATEMENTS CITT OF 111KITAR, "ASAIRGTOM WIM1791TO FUND BALANCES • GOVERNMENT FUNDS TO THE STATEMENT • ACTIVITIES • THE YEAR ENDED DECEMBER 31, 2015 Net change in fund balances per the Statement of Revenues, Expenditures, and Changes in Fund Balances $ 5,726,669 Amount reported as change in net position in the Statement of ActNtities are different because: Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost ofthose assets is allocated over their estimated useful lives and reported as depreciation expense. In the current period, these amounts are: Capital Outlay 11,426,274 Capital asset disposal (4,330) Depreciation Expense (excludes internal service fund depreciation which is reflected in internal service fund change in net position listed below) (7,260,550) Excess of Capital Outlay Over Depreciation Expense 4,161,394 The net effect ofvarious transactions involving the City's pension plans are Reduction in pension liabilityand expense 1,228,219 theyare not considered "available" revenues in the government funds. Decreases this year are for: Increase in pension contribution revenue 503,132 (77,783) Reduction in the Fireman's Pension liability and expense 14,483 1,745,834 The Citylhas equityinterests in two joint ventures. The equityinterests forthe provision ofgovernmental Some expenses reported in the Statement of Activities do not require the use ofcurrent (143,093) services are not current financial resources and therefore are not reported in the funds. These activities consist of. Repayment of long-term debtis reported as an expenditure in governmental funds, butthe repayment Increase in accrued interest 47,792 reduces long-term liabilities in the Statement of Net Position. In the current year, these amounts (66,613)1 Increase in compensated absences consistot. Increase in unfunded other post employment benefits (1,802,950) Bond principal retirement 2,480,507 Change In Net Position On The Statement OfActivities Amortization expense 110,990 2,591,497 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 (309,758) General Obligation Bonds issued (7,909,800) 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. 725,108 Because some revenues will not be collected for several months after the City's fiscal year ends, theyare not considered "available" revenues in the government funds. Decreases this year are for: Miscellaneous receivables (77,783) Property taxes (65,101) Special Assessment (650,415) (793,299) Some expenses reported in the Statement of Activities do not require the use ofcurrent financial resources and therefore are not reported as expenditures in governmental funds. These activities consist of. Increase in accrued interest 47,792 Amortization ofdeferred charge on bond refunding (66,613)1 Increase in compensated absences (141,823) Increase in unfunded other post employment benefits (1,802,950) Total additional expense (increase) decrease (1,963,594) Change In Net Position On The Statement OfActivities $ 3,830,958 The notes to the financial statements are an integral part of this statement Washington State Auditor's Office Page 41 B-41 CITY OF TUKWILA: 2015 CAFR BASIC FINANCIAL STATEMENTS CITY OF TUKWILA, WASHINGTON STATEMENT OF NET POSITION PROPRIETARY FUNDS DECEMBER 31. 2015 Current assets: Deferred inflow pension earnings 78,648 Cash and cash equivalents $ 3,845,268 $ 5,917,392 $ 762,664 $ 1,768,287 $ 12,293,611 $ 5,739,809 Investments 2,116,492 520,010 - - 2,636,502 4,018,253 Taxes receivable - - 789 - 789 - Other receivables 466,570 891,448 5,077 274,346 1,639,231 109,294 Due from other governmental units 390,795 1,617 - 266,915 659,327 - Inventory of materials and supplies - - 62,402 - 62,402 13,836 Current assets restricted 802,138 1,242,767 94,786 49,776 - Cash and cash equivalents 15,700 - 66,306 - 82,006 - Noncurrent assets: Deferred inflow pension earnings 78,648 Deferred pension Notes receivable - 257,016 - - 257,016 - Capital assets 5,559 46,323 - /r Net investment in capital assets 12,941,256 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 19,851,205 14,586,442 3,559,992 42,643,402 80,641,041 - Machineryandequipment 802,138 1,242,767 94,786 49,776 2,189,467 14,897,544 Less: accumulated depreciation (10,514,341) (7,884,494) (5,759,485) (14,724,712) (38,883,033) (10,156,409) Construction in progress 2,551,709 241,921 - 4,454,333 7,247.963 - Total capital assets (net of Due to other governments 95,080 233,436 - 270,953 599,468 - accumulated depreciation) 14,194,624 11,621,122 6,132,364 34,877.977 66,826,087 4,741,135 /rrs rrr „yr/� 89,790 - 17,379 144,823 - Deferred outflows of Resources Deferred inflow pension earnings 78,648 Deferred pension 54,814 31,826 62,330 92,301 241,271 37,910 Deferred Loss on Refunding 12,044 28,720 - 5,559 46,323 - /r Net investment in capital assets 12,941,256 8,139,154 LIABILITIES: Unrestricted 6,083,812 7,181,169 141,620 1,252,312 14,658,912 7.286,210 Current Liabilities Accounts payable 43,179 34,454 5,164 42,767 125,563 61,051 Accrued w ages and benefits 24,732 15,135 29,958 48,894 118,718 19,485 Accrued interest payable 2,778 8,148 - 7,187 18,113 - Unearned revenue 41771 - - 7,679 12,450 - Other current liabilities 54,952 32,853 61,376 12,065 161,245 867,500 Due to other governments 95,080 233,436 - 270,953 599,468 - Compensated absences - 14,826 - - 14,826 - Revenue bond payable 37,654 89,790 - 17,379 144,823 - � Noncurrent liabilities: Reserve for unreported claims - - - - - 1,301,250 Revenue bonds payable 415,403 990,576 - 191,724 1,597,704 - Net pension liability 476,002 276,365 541,271 801,542 2,095.180 329,212 Compensated absences 120,765 10,697 90,749 96,968 319,178 - Due to other governments 717,275 2,196,886 - 2,132,830 5,046,991 - �r � . Deferred Inflows of Resources Deferred inflow pension earnings 78,648 45,663 69,432 132,437 346,180 54,395 NET POSITION: Net investment in capital assets 12,941,256 8,139,154 6,132,364 32,270,650 59,483,424 4,741,135 Unrestricted 6,083,812 7,181,169 141,620 1,252,312 14,658,912 7.286,210 The notes to the financial statements are an integral part ofthis statement. Washington State Auditor's Office Page 42 B-42 CITY OF TUKWILA: 2015 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. 2015 OPERATING REVENUES: 1,213,611 209,180 - 617,100 2,039,890 Transfers in - - 300,000 - Charges for services $ 6,484,031 $ 9,020,998 $ 1,371,325 $ 5,085,974 $ 21,962,328 $ 8,847,111 Other operating revenue 465 - 110,466 225 111,156 112,715 (362,692) Change in accounting principle - depreciation - - (757,473) - (757,473) - Total net position - beginning restated OPERATING EXPENSES: 68,882,010 11,302,237 �,,,�„�✓ t,, ///./.villi h,;,•,.s://////////.D//� Operating & maintenance 3,590,010 5,418,374 1,518,249 1,846,454 12,373,086 7,137,230 Adrrmistrative and general 645,770 538,327 173,909 801,518 2,159,525 441,581 Taxes 933,085 1,033,643 67,190 570,177 2,604,094 - Depreciation and amortization 528,077 373,087 327,238 902,492 2,130,894 785,736 ~7 gai NON-OPERATING REVENUE (EXPENSE): Investment earnings 24,040 43,175 952 18,905 87,073 96,407 Interest expense (37,683) (88,181) - (27,333) (153,197) - Gain (loss) on disposal of capital assets (455) (2,487) (2,942) 33,422 Other non-operating revenue - 183,616 183,616 - Capital contributions 1,213,611 209,180 - 617,100 2,039,890 Transfers in - - 300,000 - 300,000 - /l/z,.. Total net position - beginning 17,561,954 13,803,052 7,932,071 32,650,659 71,947,737 11,664,929 Change in accounting principle - pension costs (524,409) (304,471) (596,317) (883,057) (2,308,254) (362,692) Change in accounting principle - depreciation - - (757,473) - (757,473) - Total net position - beginning restated 17,037,545 13,498,581 6,578,281 31,767,602 68,882,010 11,302,237 �,,,�„�✓ t,, ///./.villi h,;,•,.s://////////.D//� The notes to the financial statements are an integral part ofthis statement. Washington State Auditor's Office Page 43 B-43 CITY OF TUKWILA: 2015 CAFR BASIC FINANCIAL STATEMENTS CITY OF TUKWILA, WASHINGTON STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE FISCAL YEAR ENDED DECEMBER 31. 2015 Page 1 oft CASH FLOWS FROM OPERATING ACTIVITIES: Cash received from customers $ 6,448,402 $ 9,016,512 $ 1,479,914 $ 5,084,443 $ 22,029,271 $ 8,896,289 Cash paid to supplier (3,431,816) (5,855,061) (768,072) (1,694,907) (11,749,856) (1,609,027) Cash paid for taxes (933,085) (1,033,643) (67,190) (570,177) (2,604,094) Cash paid to or on behalf of employees (776,060) (446,969) (943,805) (1,188,432) (3,355,266) (6,331,851) Other cash received (paid) 465 6,365 225 7,055 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Operating grant received Transfers in CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Purchase of capital assets Contributed capital Debt proceeds Capital grants Principal paymenton debt Interest payment on debt Proceeds from sale of equipment - 183,616 300,000 - 183,616 300.000 (1,338,852) (53,360) (2,288,866) (3,681,079) (1,288,808) 108,387 206,109 11,576 326,073 453,057 1,581,851 209,103 2,244,011 716,283 1,454 899,725 1,617,462 (1,043,380) (1,598,960) (535,553) (3,177,892) (84,263) (124,518) (40,419) (249,200) - 952 18,905 51,057 33,418 CASH FLOW FROM INVESTING ACTIVITIES: Proceeds from sale of investments 865,729 Purchase of investments - (500,000) - - (500,000) - Interest received 6,449 24,751 952 18,905 51,057 176,192 Net increase (decrease) in cash and Cash equivalents 125,588 1,218,166 8,165 89,241 1,441,160 741,941 Restated cash equivalents - 741,941 Cash and cash equivalents -beginning ofyear 3,735,380 4,699,225 820,805 1,679,046 10,934,457 4,997,868 Cash atend ofyearconsists of: Cash and cash equivalents 3,845,268 5,917,392 762,664 1,768,287 12,293,611 $ 5,739,809 Restricted cash -customer deposits 15,700 - 66,306 - 82,006 - The notes to the financial statements are an integral part of this statement. Washington State Auditor's Office Page 44 B-44 CITY OF TUKWILA: 2015 CAFR BASIC FINANCIAL STATEMENTS CITY OF TUKWILA, WASHINGTON STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE FISCAL YEAR ENDED DECEMBER 31, 2015 RECONCILIATION OF NET OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES Adjustments to reconcile operating income to net cash Provided (used) byoperating activities: Depreciation 528,077 373,087 327,238 902,492 2,130,894 785,736 Asset (increase) decrease: - Accounts receivable (28,629) (4,487) (1,387) (1,531) (36,033) (63,538) Inventory and other - - (4,581) - (4,581) 1,132 Deferred outflow of resources increase (decrease) 54,814 31,826 62,330 92,301 241,271 37,910 Liability increases (decreases): - Accounts payable 33,773 (335,680) (3,489) (227,092) (532,488) (346,941) Other liabilities (4,140) 20,086 5,033 10,722 31,701 - Wages & benefits payable 15,106 (15,898) 16,296 21,139 36,643 225 Deferred inflow of resources (increase) decrease (78,648) (45,663) (89,432) (132,437) (346,180) (54,395) Now The notes to the financial statements are an integral part of this statement Washington State Auditor's Office Page 45 B-45 CITY OF TUKWILA: 2015 CAFR BASIC FINANCIAL STATEMENTS CITY OF TUKWILA, WASHINGTON STATEMENT OF FIDUCIARY NET POSITON ASSETS: Cash and cash XF-3:1111111111 1,416,506 $ 124,624 Accounts and other payables 137,092 MR` NET POSITION: 1,416,506 The notes to the financial statements are an integral part of this statement. Washington State Auditor's Office Page 46 B-46 CITY OF TUKWILA: 2015 CAFR BASIC FINANCIAL STATEMENTS CITY OF TUKWILA, WASHINGTON STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FIDUCIARY FUND FOR THE YEAR ENDED DECEMBER 31, 2015 ADDITIONS: Other contributions: Fire Insurance Premiums 63,590 Investment earnings 2,667 DEDUCTIONS: Benefit payments 62.777 Net position - beginning 1,413,026 The notes to the financial statements are an integral part of this statement. Washington State Auditor's Office Page 47 B-47 CITY OF TUKWLA: 2015CAFR NOTES TO THE FINANCIAL STATEMENTS 0 0 0 01. 4 ii 1 0 general administrative, water services, sanitary sewer collection, and storm ainage. applied to governmental units. The Governmental Accounting Standa�ds Boa�d (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. UINEU�r J In accordance with the criteria set forth in Statement No. 14 of the Governmental Accounting Standards Board, (GASB) the City's Comprehensive Annual Financial Report (CAFR) includes all funds controlled by the City. See Note 7, Joint Ventures, for a discussion of Valley Communications Center, which is a joint public safety dispatching authority for five member cities, and South Correctional Entity (SCORE), which is a governmental administrative agency. Also, see Note 13, Risk Management, for a discussion of the Washington Cities Insurance Authority. • Cascade'11ater Alliance • Valley Cities — SCORE Jail • Valley Communications Center • Valley Narcotics Enforcement Team Valley Special Weapons and Tactics Team Valley Civil Disturbance Unit Tukwila Metropolitan Park District Regional Animal Services of King County King County Water Resource Inventory Area! City of SeaTac Probation Services King County Reclaimed Water Community Connectivity Consortium 1414101IMM"i ImTKOHM11 FORRIMMUNN Washington State Auditor's Office Page 48 B-48 CITY OF TUKVMLA: 2015CAFR NOTES TO THE FINANCIAL STATEMENTS U, I IN Me2A4Fe UldflylIlly LHU YU capacity to a five member board with directly elected commissioners. The effective date of the proposition was November 24, 2015. As of December 31, 2015, the District was no longer a component unit of the City and ft. financial data associated with it was removed • the City's financial statements. B. Basis of Presentation The City's basic financial statements -co 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 display information about the City. These statements include the financial activities of the government, except for fiduciary funds. The activity of the internal service funds is eliminated to avoid "doubling up" revenues and expenses. 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 V111-IIIIII -1117 A,-# -= I FVRIU #WMk�[; _7AM it with the functional program. A function is an assembly of similar activities and may include portions of a fund or IN 011 1 TfCrrUn program reTrenTe �,eriains, ne aetermining rauiormr cffa—rqeS Tor services—i–s—wn—IM function generates the revenue. For grants and contributions, the determining factor is to which functions the revenues are restricted. Rw; I jW_WMPT1;W_ti;k AM7 - I 'imited exceptions. The comparison of direct expenses with program revenues identifies the extent to which each R usiness segment • governmental function is self-financing or draws from the general revenues • the City. Fund Financial Statenepts 1 GOURKSI tV4;211M:1Q$rw1 - in a singl 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. Washington State Auditor's Office Page 49 B-49 CITY OF TUKVMLA: 2015CAFR NOTES TO THE 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. This means on current assets and currenViabilities are (net current assets) is considered a measure of "available spendable resources." Governmental fund operating (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. The following are the City's major governmental funds: 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. As noted in the statements that follow, the general fund receives the bulk of its revenues from local taxes, followed by State shared revenues, service charges, and other income. a IN MM WI .11WINWIMM to the Fiscal Agent for principal and interest on bonds issued in November 2013. =I [1][11411 [on I I sTM U IF Ms 1 rog IN I - I i - I 1 0- so AIMMIMMUM 0 0 of Itt M N SITINURFAM . - 0 - # -1; "TiM10614- to ensure that expenditures are made exclusively for qualified purposes. Proprietafy and Internal Service Funds Proprietary and internal service funds are accounted for on a "flow of economic resources" measurement focus. their balanci oheets. ProiristjW. fund o5er. iA _;.atemen;s Drese9w jWg 01 g1p I 1mvikkm I n �O v I tMIA."m income, financial position, and cash flows. Proprietary and internal service funds distinguish operating revenues and expenses from non-operating items. V., M.Amn !MLLVjd&&W MI Jah V * I.MIRL OIL 2AWIMI�M .-I. expenses Tor IrIU Unferprise utnus anu Internai serrice itnus Incii-Foe ine cost oi sales anu serlices, NO expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported 2s non-operating revenues and expenses. As described further below, there are two fund types in this category- anterprise and internal service. Washington State Auditor's Office Page 50 B-50 C" OF TUKV\4LA: 2015 CAFR NOTES TO THE FINANCIAL STATEMENTS 11AIIIIIIHNIWINW, OWN WON llillWlliliiwol if • 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. W7AWt77A7MM- '- . I VIMA# - and reDlacina all Citv vehicles and auxiliaw eouiomeTt.All eauin-treTt costs. iTcludisa deDreciatkaT_ are f9rtors 4 Q - W -t-, premiums, medical and dental costs and ancillary charges are included. Fiduciary funds account for assets held by the City in a trustee capacity or as an agent for individuals, privata. organizations, other governments, and other funds. The City has two fiduciary funds, Firemen's Pension Trust Fund 2nd 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 • results • operations. Fiduciary funds are excluded from the government -wide financial statements. D. Measurement Focus fW41=11 P 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 Washington State Auditor's Office Page 51 B-51 CITY OF TILIKVVILA: 2015 CAFR NOTES TO THE FINANCIAL STATEMENTS reconciliation with brief explanations to better identify the relationship between the government -wide statements and statements for governmental funds. 00110 1 IN Rol I I! M. 01100111 MY P.O. M "", W11111 N, I I tal 1 0 0 111- 0 0 1 11. "11,101".11111M. MINI I'M I i 0§11 14;]MIM11tr�&I IN 1 017A IM7,14M] M MV 0199101111 MW VAL-11"In k4mgME 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 accrua: 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 jor. I pill 0 . 4 a a 4 0 4 0 11111011111161iller 111010111 11 110IMMI, i IVAN IM_RX'V A!' SWIM Rorw " 1W U.- Afflk j LW t] RX kWIIRM 9 1 ttW j; t—, I fffifl J_IfWj J�-JlAk-# X—_F F f(_@ I IWMS- it[;; 0 MIA I Ron -exchange transactions, in which the City receives value without directly giving equal value in return, includf; 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 fisca' year for which the taxes are levied. (See Note 4 on receivables). "Mo IIII&MILK-71-STAIII _1_111; InGI lite IIL;eH5C5 dil IU ub, dFlILIULFIVI MIRMhaneolis rerenle.5 since Tnej 5M yerividily IM measurable until received. 11ndert P tFI_Lh_R'%iR and interest on general long-term debt and vacation and sick pay which are recorded when paid. IRCIIIIIIIIII concerned. Amounts reported on the government -wide statements as program revenues include, charges to 71 gr-axts ?xit XP -.F?! revenues include all taxes. The accrual basis of accounting is followed in all proprietary funds. Under the accrual Washington State Auditor's Office Page 52 B-52 CITY OF TUKVVILA: 2015 CAFR NOTES TO THE FINANCIAL STATEMENTS asis or actell-riting, reTenfes are recognizea I and liabilities are recorded in the fund. F. Budgets and Budgetary Accounting --- --------- --------- are not reported in the CAFR. 113101P 1, —F oil. et M011 with actual revenues and expenditures. As a management control device, the subsidiary ledgers monitor at the end of the biennium. Yn—e-Z1J,M-rT=- 76TUget --rTri-arfu gUf7ocess ar follows: 'frPTRT= W-049RX-Z�7 24�Zf rn De re0-T9a7T-YffFiTM7=i3rn its a propose - V 7 r -m= - 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. 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. Washington State Auditor's Office Page 53 B-53 CITY OF TUKV\ALA: 2015CAFR NOTES TO THE FINANCIAL STATEMENTS G. Assets, Liabilities, and Fund Equity Cash and Cash Equivalents that are readily convertible to known amounts of cash. MIMI - =1_1 4 Mo MM HIMMUMN i 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 current portion of the special assessment receivable. Amounts Due to and From Other Funds and Governments, Interfund Loans and Advances Receivable Activity WNad?% fynifs that is re�,rasantatiyittf lenVing4vavaing at the enf*f tha 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, 2015, there are no residual balances outstanding between the governmental activities and business -type activities. The non-current portion of interfund loans and advances between funds, as reported in the fund financial St2tenexts, 2re *J%et �Ty 2 NIAIV �-21?xce x#xsA)eAe2�1e 20011UAt iA 2Aflir.2WIe StverAme;021 NA14% t4i iAltic2te tXey are not available for appropriation and are not expendable available financial resources. See Note 5 on interfund transactions. 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 U-99-99-MWit 2,V-(VMW 2V.4WW%f-��2 f2kmet financial statements. Since special assessments are secured by liens against related properties, no allowance for uncollectible amounts is -if ade. =1 I rMUMMUMUM . 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. Washington State Auditor's Office B-54 Page 54 CITY OF TUKV\ALX 2015CAFR NOTES TO THE FINANCIAL STATEMENTS Real Property Held for Resale Governmental funds do not report pmperty, plan1, and equipment because such assets normally are used in opemdnnn, and therefore will never be available for spending (they are not financial assets). Hnw*ver, specific items of property occasionally are acquired with the intent of sale. Examples include fnrednnuna pmpertieo, redevelopment pmpertieu, 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 0osell the property ata price that may befar 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 inthe financial statements. The City acquired redevelopment properties in its urban renewal area along Tukwila International Boulevard. Acquisition of the Tukwila Village property began in 1999 and an agreement to develop the property was secured in 2012. Three crime -ridden motels were acquired in 2014, and two additional properties were acquired in 2015, with the intent to demolish the structures and sell the vacant land for redevelopment. All redevelopment properties are reported etnet realizable value inthe financial statements. Deferred outflow of resources is o consumption of net position by the government that is applicable to a future reporting period. Deferred inflow of resources is acquisition of net position by the government that is applicable to efutune reporting period. The accounting and reporting treatment applied to the capital onnots associated with afund 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 inthe respective funds. All capital assets are capitalized atcost (or estimated historical cost) and updated for additions and retirements during the year. Donated assets are valued at eohmohad fair market value at time of acquisition. Where historical cost is not knmwn, assets are recorded at estimated historical costs. 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: Buildings 25ho50years Non -Building Improvements 25tn50years Machinery and Equipment 20o5Uyears Intangibles 20n5Oyears Infrastructure 25 to 50 years Washington State Auditor's Office Page 55 B'55 CITY OF TUK\AALA: 2015 CAFR NOTES TO THE FINANCIAL STATEMENTS IMM.- will't.'a I Dili at 1 x IBNR for claim fluctuations plus 1.5 x IBNR for a claims reserve yielding a total liability of $2,168,750. Compensated ♦:. tne-gul-eTrmmn I fr"-ffl Mullf It reported as a fund liability. This reporting format is in compliance with GASB Statement No. 16. i�Xe currext AtkijpA re�+Xef #A tXe sckefllle *f 141ft-term li2lilitieS iS-1;2IGUI2te1 WSiXg tke 12St-iA-firSt-,T1jt (LIF#) approach. Anticipated subsequent yearly usage is used to determine the current portion of the liability. There is the next year. Long -Term Obligations MEN - JUNUMMA 717 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 currp-mt nPri I'll . Pd 0-1 dpht W*V11 R110 0 Al 6AW W il"141-109 W 01"_ M 641was Mply expenditures. Long-term debt outstanding at year-end is outlined in Note 10. • BalancelNet Poson A fund balance represents the difference between the current assets and current liabilities plus deferred inflows. not represent available, spendable resources and therefore are not available for general appropriation or expenditure. inflow of resources. Net Dosition invested in caoital assets. net of related debt. consists of caDital assets. net of A -1 MI 0 1 4 11 0 4 - liwiiiijml 0101; 111411044101M I Elk M11 i M� external restrictions imposed by creditors, grantors or laws or regulations of other governments. The remaining balance is reported as unrestricted. Washington State Auditor's Office Page 56 B-56 CITY OF TUKV\ALA: 2015 CAFR NOTES TO THE FINANCIAL STATEMENTS 11MITI L)l LIIU pi".,1101S jear one-urne revenues snaii De bet aslue in a one -Time revenue reserve wifnin ine Uonfingency Reserve fund. Ut;f #, zwf _&fobffr- previous year revenue, exclusive of non-operating, non-recurring revenues such as real estate sales, transfers in from other funds or debt proceeds. or 250%, of the actuarially determined IBNR reserve. Fund Balance Components The fund balance amounts for• overnmental funds have been classified in accordance with GASB Statement No. 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 $1.3 million is the outstanding balance of a loan from the general fund to the Tukwila Metropolitan Park District. The facilities fund has a nonspendable fund balance of $7.65 million representing real property held as an investment. Restricteif fynt ��alarices hwr6 cmstraints Pace:t YAiin the Ysetf the rasityrc6s either �y an external �,aily or imposed by law through a constitutional provision or enabling legislation. �,amrzf;4 U#,X� 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. Intent of use is determined through the budgetary process and is expressed by the Finance Director. WNW419 AA0 611w 611" wsloull lawil W 41,1949 ii Ai W "-allo-iiii iiii 't ate Washington State Auditor's Office Page 57 B-57 CITY OF TUKVVILA: 2015 CAFR NOTES TO THE FINANCIAL STATEMENTS MEW MUMUM-171-W — • 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 i cornguters and facilities. 0 9 eratin 9 exgenses are necessary costs incurred to I rovide the fog ood or service VTdL—Jle f[Te edUll IMU. All utner Mentes ano eXpOlMeb alle MMMUT as-nuri-operal.1119 111GUIUMS investment earnings, interest expense and the gain or loss on the disposition of capital assets. Contributions of Capital Contributions of canital in nronrietar_y 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. Indirect Cost Allocation Indirect costs also referred to as overhead costs consist of the cost of central services or su rt nctions shared ml� �91 MIN-111"I'll -1 • the Statement of Activities rather than as transfers in and transfers out. Interfund Activity in the purchaser funds. On the government -wide statement of activities, the exchange transactions between the sources/uses in governmental funds and after non-operating revenues/expenses section in proprietary funds. 064"TO Ma'"_ WNk"_ are eliminated. Transfers between funds reported in the business type activities column are eliminated. Special Item Special items are transactions that are either unusual in nature or infrequent in occurrence. They must also be within the control of management. They are reported as a separate line item entitled Special Item. The City has one special item reported in 2015. The City purchased motels in the Tukwila International Boulevard urban renewal area for redevelopment. The assets were written down to the net realizable value because the structures on the land will be demolished and the property sold as raw land. The reduction in value is reported as a special item. Estimates may differ from those estimates. Washington State Auditor's Office Page 58 B-58 CITY OF TUKVMLA: 2015CAFR NOTES TO THE FINANCIAL STATEMENTS Risk Management are insured by carriers for property coverage at replacement value. The City of Tukwila is a member of the Washington es Insurance Authority (WCIA) as of January 1, 1984. WCIA is an organization of Washington entities numbering 179 as of December 31, 2015. WCIA provides pooled self- insurance coverage for general liability, vehicle liability, false arrest, and errors and omissions. See Note 12 for 2dditional information on risk management. H. Pensions - 0 roUT-5=17#111 QJU as they are reported by the Washington State Department of Retirement Systems. For this purpose, bene'16 �2yxxexts (ixclulixg reftixits if em;plityee c,-#Atr4uti*xs) 2re rectXxizef wkex IfUe 2Xi Al2Y2�rle ix 2cc1,r1f,2XCP_-'J.4% the benefit terms. Investments are reported at fair value. I. Changes in Reporting AOTE 2 –DEPOSITS AND INVESTMENTS The Cib, maintains a cash and investment Qool available for use b,,, all funds. Interest earned on ,.,00led 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 lepository financial institution's failure, it is the risk that the City would not be able to recover its deposits of collateralized securities that are in the possession of the outside parties. The City minimizes custodial credit risk %y following the restrictions set forth in state law. F11 5111,1111mal MIRS"fl - - - .4 - I. W is NO. W.Ur"im. 01". liquid nature, the Pool d are considere cash equivalents. I Ft= 1=1 Washington State Auditor's Office Page 59 B-59 CITY OF TUKWILA: 2015 CAFR NOTES TO THE FINANCIAL STATEMENTS 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. At December 31, 2015, the City had the following deposits and investments: Nmml: ►-.. Sound Community Bank 3/4/2017 Aa3 / A+ $ 3,174,738 Bank of Washington 5/1/2016 Aaa / AA+ 250,000 Total Certificate of Deposits 12/1/2017 Aa3 / Al 3,424,738 U.S. Government Agency Notes. 7/1/2019 Aaa / AA+ 547,445 Federal Home Loan Mtg Corp 5/13/2016 AAA / AA+ 2,000,398 Federal Nat] Mortgage Assn 8/23/2017 Aaa / AA+ 993,328 Federal Home Loan Bank 9/21/2018 Aaa / AA+ 1,000,013 Federal Home Loan Mtg Corp 5/25/2018 AAA / AA+ 997,016 Total U.S. Agency Notes 4,990,755 Municipal Bonds. Washington State Convention Center: Lodging Tax 7/1/2016 Aa3 / A+ 505,050 Washington State Biomedical Research: Revenue - Facilities 7/1/2017 Aaa / AA+ 520,010 Marysmlle Washington: Limited General Obligation 12/1/2017 Aa3 / Al 304,477 Washington State Biomedical Research: Revenue - Facilities 7/1/2019 Aaa / AA+ 547,445 Port ofAnacortes, Washington: Limited General Obligation 9/1/2020 Al 362,719 Douglas County School District, Washington: Unlimited General Obligation 12/1/2020 Aal / Aa3 1,240,317 Total Municipal Bonds 3,480,017 z * No credit rating with certificate of deposit accounts; accounts are insured by the Public Depository Protection Commission. Washington State Auditor's Office Page 60 B-60 CITY OF TUKWiLk 2015 CAFR NOTES TO THE FINANCIAL STATEMENTS Cash and Cash Equivalents: $ 34,975,562 Investments 11, 895, 510 Current Assets Restricted: Cash and cash equivalents 2,524,103 Cash and Cash Equivalents Local Government Investment Pool $ 10,708,902 Money market account 13,152,028 Cash on hand 14,450 Cash in bank -book balance 13,624,285 Total cash and cash equivalents 37,499,665 Investments: Certificates of deposit 3,424,738 U.S. Government Agency Notes 4,990,755 Municipal bonds 3,480,017 Total investments 11,895,510 Deposits $ 8,406 Drug Seizure funds - federal portion 12,644 Debt Ser\Ace 2,280,652 Impact Fees 140,395 Washington State Auditor's Office Page 61 B-61 CITY OF TIJKVVI 2015CAFR NOTES TO THE FINANCIAL STATEMENTS Interest Rate Risk M jr;1;111, -75. 111111011111111IM111 , all RITEMMIM paiiL;j jimits at Mast nait oi tne City STIR HILIes 131 Ie5s trime Investment maturities are '• 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. 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. The City uses the weighted average maturity method to manage interest rate risk. 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, 2015, the City's investments in municipal bonds were rated Aaa to Al by Moody's Investor Service. Concentration of Credit Risk g1jill !I a 01; M - Washington State Auditor's ®ice Page 62 B-62 CITY OF TUKWILA: 2015 CAFR NOTES TO THE FINANCIAL STATEMENTS 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 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. Taxes Receivable 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. Taxes Receivable Property $ 197,626 $ - $ 197,626 Sales & Use 3,736,033 - 3,736,033 Real Estate Excise Tax 1,097,739 - 1,097,739 Utility Tax 828,247 - 828,247 Admission/Gambling/Parking/Other 1,046,739 789 1,047,528 Total Taxes Receivable 6,906,384 789 6,907,173 Customer Receivable Miscellaneous 432,016 5,077 437,093 Utility Accounts - 1,630,573 1,630,573 Total Customer Receivable 432,016 1,635,651 2,067,667 Interest 55,087 1,790 56,877 Notes due within one year 612,971 - 612,971 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. Propedy Tax Calendar January 1st Taxes are levied and become an enforceable lien against properties. February 14th Tax bills are mailed. April 30th First of two equal installment payments is due. If taxes are less than $50, full payment is due. (RCW 84.56.020) May 31 It Assessed value of property established for next year's levy at 100 percent of market value. October 31St Second installment is due. (RCW84.56.020) Washington State Auditor's Office Page 63 B-63 CITY OF TUKWILA: 2015 CAFR NOTES TO THE FINANCIAL STATEMENTS ruffws�e RM1,7e-il - - 170-121, lUfF-Yff'JUKe-(rdTV- . '— 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. 9111111111ILZA"ill -CCU 0-1-w--tlle7f I frTCfk0&-YC�-d1 -" ftG9 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. Pro4eg tax receivables at ear -end not expected to colleciltadligg'"H60 days after assessed value. An additional levy rate of $0.225 is available to the City because the City funds a Firemen's Pension Fund. LT17[Ffff1NlllL;ll tile mrldl 1,141te eAUCCio r the last general election. Washington State Constitution and Washington State law, RCW 84.55.010, limit the rate. The City's regular levy in 2015 was P2.84188 wer P1 000 of assessed valuation of �Z,5 054 078 747 for a total re�o,l lar leaXoLA-14,327 468. Due from Other Governments .411 rp-rpiva 911146NOW il MAW 0 M496iW w1i 611161111144" W-- "-- -""9 -f JWJJJW111 A-1lJlJJW!JJ%l W-l1-71101111;V1VW1JJWQJ1' Z 1 0 1"11110 1 -1 W wow 1161011111 166111W11111111101 majority represents grants. Notes Receivable Aw- by the improvement. The current portion of outstanding assessments is reported in the receivables category on the 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. Notes receivable for business -type activities consists of outstanding payment plans for sewer connection fees. The -88�&igrl&t Lfrf �-* -i 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 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. Washington State Auditor's Office Page 64 B-64 CITY OF TUKV\nLA: 2015CAFR NOTES TO THE FINANC.IAL STATEMENTS Notes Receivable Speoia|Assennments-Non-Cunan Portion $ 0.205537 $ $ 6,266.537 Sewer Payment Plan - 257,016 257,016 NOTE 4—lNTERFDNO TRANSACTIONS |ntehund activity in 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. Sen/ices Proviued0/me6— Transactions that would be treated as revenuex, expenditures or expenses if they involve external onganizohonn, such an buying goods and services in return for equal oralmost equal vo|ue, are similarly treated when they involve other funds nfthe City nfTukwila. Interfund LoanslAdvances — 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. }nterfundloans are subject 0oelimination upon consolidation. 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 nrproprietary 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. Reinbunsemnents— 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 o reduction of expend iture/expensed inthe fund being reimbursed. |nterfundtransfers for the year were mofollows: IMIMTRUMM CITY OF TUKMLA: 2015 CAFR NOTES TO THE FINANCIAL STATEMENTS The principal purposes for interfund transfers include interfund subsidies and transfers into debt service and capital projects funds. During 2015 the City maintained operating lease agreements for the purpose of leasing City operated machinery and equipment. Tukwila leases office/ storage space for the purposes of the Records Center, Seattle Southside Visitor Center and the Neighborhood Resource Center. In addition the City leased a postage machine and copiers during 2015. Costs associated with these activities are as follows. 1 Records Center 1 69,704 29,400 - - - Neighborhood Resource Center 2 21,000 10,500 Seattle Southside Visitor Center 20,141 _ _ _ - Police Archives/Vehicle Storage 4,600 55,752 57,424 59,144 60,916 Police Department Gym 8,400 14,652 15,091 15,542 16,012 Postage Machines 9,096 9,096 9,096 9,096 9,096 Office Equipment 52,096 45,995 36,103 17,924 3,300 Leasing of the Records Center expires on 5/31/2016. The tenant is responsible for the cost of utilities and maintenance of building, which is estimated, based on square footage and reconciled annually by the lessor. z Leasing of the Neighborhood Resource Center expires on 6/30/2016. Washington State Auditor's Office Page 66 B-66 CITY OF TUKWILA: 2015 CAFR NOTES TO THE FINANCIAL STATEMENTS Capital asset activity for the year ended December 31, 2015, was as follows: Governmental Activities Capital assets, not being depreciated: Land $ 35,312,814 $ 35,312,814 $ - $ - $ 35,312,814 Construction in Progress 16,718,203 16,718,203 11,355,209 (1,940,230) 26,133,182 Total capital assets, not being depreciated 52,031,017 0 52,031,017 11,355,209 (1,940,230) 61,445,996 Capital assets, being depreciated: Buildings Buildings 25,424,641 (2,845,260) 22,579,382 92,027 22,671,409 Other Improvements 18,130,493 (76,492) 18,054,002 10,030 18,064,032 Machinery and Equipment 19,600,119 (216,988) 19,383,131 1,501,411 (243,210) 20,641,332 Infrastructure 172,163,132 - 172,163,132 1,701,622 - 173,864,754 Total capital assets being depreciated 235,318,386 (3,138,739) 232,179,646 3,305,090 (243,210) 235,241,526 Less accumulated depreciation for: Buildings (11,614,193) 292,289 (11,321,904) (637,509) (11,959,413) Other Improvements (11,355,020) 2,550 (11,352,470) (778,403) (12,130,873) Machinery and Equipment (12,758,603) 20,639 (12,737,964) (1,402,051) 310,158 (13,829,858) Infrastructure (47,646,638) - (47,646,638) (5,304,588) - (52,951,226) Total accumulated depreciation (83,374,454) 315,477 (83,058,977) (8,122,551) 310,158 (90,871,370) Total capital assets, being depreciated, net 151,943,932 (27823,262) 149,120,670 (4,817,461) 66,948 144,370,156 Effective with the 2015 financial reporting year, the Tukwila Pool Metropolitan Park District (TPMPD) is no longer a component unit of the City of Tukwila. Because the TPMPD is no longer a component unit, the beginning balances are being restated. On the November 3, 2015 general election, voters approved a measure changing the governing Board of Commissioners from the Tukwila City Council serving in an ex officio capacity to a five member board with directly elected commissioners. The effective date of the proposition was November 24, 2015. Washington State Auditor's Office Page 67 B-67 CITY OF TUKWILA: 2015 CAFR NOTES TO THE FINANCIAL STATEMENTS Business -Type Activities Capital assets, not being depreciated: Land Construction in Progress Total capital assets, not being depreciated Capital assets, being depreciated: Buildings Other Improvements Machinery and Equipment Total capital assets being depreciated Less accumulated depreciation for: Buildings Other Improvements Machinery and Equipment Total accumulated depreciation Total capital assets, being depreciated, net $ 2,346,230 $ $ - $ - $ 2,346,230 4,200,272 3,660,185 (612,494) 7,247,963 6,546,502 0 3,660,185 (612,494) 9,594,194 13,284,419 - - - 13,284,419 80,053,417 612,494 (24,870) 80,641,041 2,322,594 20,894 (154,020) 2,189,467 95,660,430 633,388 (178,890) 96,114,928 (4,233,598) (371,794) - (4,605,392) (30,098,748) (708,834) (1,710,507) 22,383 (32,495,705) (1,838,270) (48, 640) (48, 593) 153,566 (1,781,937) (36,170, 616) (757,473) (2,130, 894) 175,949 (38, 883, 034) 59,489,816 (757,473) (1,497,506) (2,942) 57,231,894 The City changed the depreciation method for machinery and equipment as well as other improvements categories. Previously, the depreciation method utilized was the composite method. Beginning with fiscal year 2015, the straight-line method of depreciation is utilized for all categories of capital assets. Washington State Auditor's Office Page 68 B-68 CITY OF TUKVML& 2015CAFR NOTES TO THE FINANCIAL STATEMENTS Governmental Activhieo General Government $ 272.680 Public Safety 165.840 Phyximo|Envnonmeni 687.741 Transportation 5.339.544 EuonomicEnvmnmem 4.301 Culture and Recreation 790.444 Intangible Assets 70.265 Capital aone{o held by the government's internal service funds are charged \othe various functions based ontheir usage ofthe assets 785.736 Water Utility % 528.077 Sewer Utility 373.007 Foster Golf Course 327.238 Surface Water Utility 802.492 Ajoint venture ismlegal 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 o/ (b) an on-going financial responsibility. The City participates intwo joint ventures. Asummary nfthe City's investment injoint ventures follows. Valley Com $ 2,159.261 $ ' $ 2.139,261 Washington Stale Auditor's Office Page 69 CITY OF TUKV\ALA: 2015CAFR NOTES TO THE FINANCIAL STATEMENTS The "Valley Communications Center" was established August 2O.1970.when anInterlocal Agreement was entered into bythe four original participating municipal corporations, including the cities of Renton, Kent. Auburn, and 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 inautomatically extended for consecutive five-year periods. The purpose of the joint mpenadon, 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 toseveral subscribing agencies. Separate agreements between Valley Com and the subscribing agencies have been exeou0ad, which set forth conditions of services and mken charged. The aUnoedon 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 2O15cost distribution for the five (5)participating cities isesfollows 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. |naddition, anOperating Board was established and consists of two members of each participating City's Public Safety Departmenta, including the heads of such departments or their designees. The Operating Board p*dbnna the following functions: (1) Oversees the operation of Valley Com and advises and makes recommendations to the Administration Board; (2)Makes recommendation unDirector 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 0mthe Administration Board by September 1 of each year. The Administration Board can make changes to the proposed Valley Com budget as it finds neoessary, but final approval falls to the legislative body of each participating city, in accordance with the provisions of the Interlocal Agreement. The share nfequity belonging tnthe five (5)participating cities inasfollows.- Washington State uudifor's4ffim Page 70 CITY OF TUKVMLAi 2015CAFR NOTES TO THE FINANCIAL STATEMENTS 2014 Equity Balance 2014 Percent of Equity Equity January 1, 2015 $5,350,252 $7,530,786 $5,079.377 $2,974,283 $3.619,944 $ 24,554,642 21.79% 30.67% 20.69% 12.11% 14.74% 100.00% Current Year Increase/(Decrease) 470,862 649015 555,097 208,004 507,809 2390,787 Equity December 31, 2015 $ 3,944,879 $5,538,893 $3,853,230 $2,139,261 $2,858,305 $ 18,334,568 wu05Owner Cities Equity Allocation was restated for GASB Statement No. 08adjustment using percent of equity 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 the development, acquisition and installation ofthe 8OOMHz emergency radio communications system funded by a $57 million King County levy approved in November 1992. This agreement provides that upon voluntary hannino0nn of any sub -region's participation in the syatem, 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 2000the Valley Communications Center Development Authority was created to issue $12.758.000 in General Obligation Bonds tnfinance construction, equipment, and land for 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 onthe bonds was made in2015. A complete set of financial statements one available from Valley Communications Center, 27519 1 08t Ave SE, Kent, WA 98030, or by telephone 253-372-1300. The South Correctional Entity (SCORE) consolidated correctional facility was established February 25, 2009, when on Interlocal Agreement (the "Original Interlocal Agreement") was entered into by seven participating municipal governments, the "Member Cities" of Auburn, Buhen. Dee K8nineu, Federal VVoy, Renton, SemToo and Tukwi|o, under the authority of the ^|ntadooa| Cooperation Act" (RCVV30.34). This "Original Interlocal Agreement" was amended and restated October 1. 2009 and named the City of Deo Moines as the "Host City" and the remaining rCihoo 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 inthe 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 ofits Owner City orHost City status. SCORE, agovernmental administrative agency pursuant 0oRCVV3Q.34.O3O(3).has the power tnacquire, construct, nwn, openate, meintein, equip, and improve correctional facility known anthe "SCORE Facility" and tnprovide correctional services and functions incidental dheeto, for the purpose of detaining arrestees and sentenced Washington State Auditor's Office Page 71 CITY OF TUKWILA: 2015 CAFR NOTES TO THE FINANCIAL STATEMENTS 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 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: 2016 $ 2,065,000 $ 4,911.886 $ (1,517,676) $ 5,459,210 $ 1,692,355 $ 218,368 $ 982,658 $ 1,965,316 $ 163,776 $ 436,737 2017 2,145,000 4,820,241 (1,511,685) 5,453,556 1,690,602 218,142 981,640 1,963,280 163,607 436,285 2018 2,240,000 4,715,979 (1,511,685) 5,444,294 1,687,731 217,772 979,973 1,959,946 163,329 435,544 2019 2,310,000 4,602,229 (1,475,151) 5,437,078 1,685,494 217,483 978,674 1,957,348 163,112 434,966 2020 2,385,000 4,484,854 (1,437,475) 5,432,379 1,684,037 217,295 977,828 1,955,656 162,971 434,590 2021-2025 13,405,000 20,377,998 (7,109,462) 26,673,536 8,268,796 1,066,941 4,801,236 9,602,473 800,206 2,133,883 2026-2030 16,325,000 15,803,611 (5,715,798) 26,412,813 8,187,972 1,056,513 4,754,306 9,508,613 792,384 2,113,025 2031-2035 20.095,000 9,856,351 (3,682,383) 26,268,968 8,143,380 1,050,759 4,728,414 9,456,828 788,069 2,101,517 2036-2039 19,410,000 2,636,145 (1,147,380) 20,898,765 6,478,617 835,951 3,761,778 7,523,555 626,963 1,671,901 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, 2015 related to SCORE: 2014 Equity Balance 2014 Percent of Equity Equity January 1, 2015 Current Year Increase/(Decrease) Equity December 31, 2015 Percent of Equity $ 4,243,234 $ 515,410 $ 292,160 $3,676,724 $ 4,220,405 $ 712,666 $1,080,470 $14,741,069 28.79% 3.50% 1.98% 24.94% 28.63% 4.83% 7.33% 100.00 $ 3,194,609 $ 359,573 $ 178,978 $2,472,263 $ 3,086,049 $ 471,943 $ 754,438 $10,517,853 137,167 17,268 18,288 148,312 136,621 26,524 34,103 518,283 $ 3,331,776 $ 376,841 $ 197,266 $2,620,575 $ 3,222,670 $ 498,467 $ 788,541 $11,036,136 30.19% 3.41% 1.79% 23.75% 29.20% 4.52% 7.15% 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 $6,265,200. See Note 11 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. Washington State Auditor's Office Page 72 B-72 CITY OF TUKWILA: 2015 CAFR NOTES TO THE FINANCIAL STATEMENTS 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 2015: 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. 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 it 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. Washington State Auditor's Office Page 73 B-73 CITY OF TUKV\ALA: 2015 CAFR NOTES TO THE FINANCIAL STATEMENTS 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 on administrative expense component that is currently mot at 0.18 percent. Each bionnium, 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 2015 were as follows: The City of Tukwila actual contributions to the plan were zero dollars for the year ended December 31, 2015 PERS Plan 2/3 provides retiremen4, 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 ofAFC for Plan 3. The AFC is the average of the member's 60 highest-paid consecutive service months. There isnncap nnyears ofservice credit. Members are eligible for retirement with efull benefit e105with a1least five years ofservice credit. Retirement before age S5inconsidered enearly retirement. PERS Plan 2/3members 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 2/3members who have 30 or more years of service credit and are at least 55 years old can retire under one of two provisions: • With mbenefit that isreduced bythree percent for each year before age 65;m ° With a benefit that has a smaller (or no) reduction (depending on age) that imposes stricter return -to -work PERS Plan 28members hired onmafter May 1.2O13have the option to retire early by accepting ereduction of Ove percent for each year nfretirement before age 05. This option is available only Uzthose who are age 55 or older and have otleast 30years ofservice credit. PERS Plan 2/3retirement benefits are also actuarially reduced to reflect the choice of survivor benefit. Other PERS Plan 2/3 benefits include duty and non -duty disability paymen1m, a cost -of -living allowance (based on the CP|), copped 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 ofeligible service. Plan 3members are vested inthe defined benefit portion oftheir 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 ochance 0mchange rates upon changing employers. Asestablished bystatute, Plan 3required defined contribution rates are set at o 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 oftheir 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 o component to address the PERS Plan I 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 2015 were as follows: Washington State Auditor's Office Page 74 Actual Contribution Rates: Employer Employee* January through J ne 2015 9.21% 6.00% July through December 2015 11.18% 6.00% The City of Tukwila actual contributions to the plan were zero dollars for the year ended December 31, 2015 PERS Plan 2/3 provides retiremen4, 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 ofAFC for Plan 3. The AFC is the average of the member's 60 highest-paid consecutive service months. There isnncap nnyears ofservice credit. Members are eligible for retirement with efull benefit e105with a1least five years ofservice credit. Retirement before age S5inconsidered enearly retirement. PERS Plan 2/3members 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 2/3members who have 30 or more years of service credit and are at least 55 years old can retire under one of two provisions: • With mbenefit that isreduced bythree percent for each year before age 65;m ° With a benefit that has a smaller (or no) reduction (depending on age) that imposes stricter return -to -work PERS Plan 28members hired onmafter May 1.2O13have the option to retire early by accepting ereduction of Ove percent for each year nfretirement before age 05. This option is available only Uzthose who are age 55 or older and have otleast 30years ofservice credit. PERS Plan 2/3retirement benefits are also actuarially reduced to reflect the choice of survivor benefit. Other PERS Plan 2/3 benefits include duty and non -duty disability paymen1m, a cost -of -living allowance (based on the CP|), copped 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 ofeligible service. Plan 3members are vested inthe defined benefit portion oftheir 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 ochance 0mchange rates upon changing employers. Asestablished bystatute, Plan 3required defined contribution rates are set at o 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 oftheir 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 o component to address the PERS Plan I 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 2015 were as follows: Washington State Auditor's Office Page 74 CITY OF TUKVVIL& 2015 CAFR NOTES TO THE FINANCIAL STATEMENTS Actual Contribution Rates: Employer 2/3 Employee 2 January through June 2015 9.21% 4.92% July through December 2015 11.18% 6.12% Employee PERS Plan 3 varies The City of Tukwila actual contributions to the plan were $1,581,183 for the year ended December 31, 2015 PSERS Plan 2 was created by the 2004 Legislature and became effective July 1, 2006. To be eligible for membership, anemployee must work nnafull time basis and: ~ Have completed a certified criminal justice training course with authority to enen, 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 ° Funodonaoa|imhedauthnrityVVemhingtonpeaceoffioer,eodeOnedinRCVV1O.83.02D�nr ~ Have primary responsibility 0osupervise 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 ofJuly 1.2006\nSeptember 30200S� and ~ Employees hired on or after July 1. 2008 by a covered employer, that meet at least one of the PSERS eligibility criteria. PSERS covered employers include: ° Certain State of Washington agencies (Deportment of Corrections, Department of Natural Resources, Gambling commission, Liquor Control Buend, Parks and Recreation Commission, and Washington State Po1m|). ° 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 retinemert, disability and death benefits. Retirement benefits are determined as two percent ofthe average final compensation (AFC)for each year ofservice. The AFC isbased onthe member's GO consecutive highest creditable months ofservice. Benefits are actuarially reduced for each year that the member's age is less than OO (with ten or more oenjoe credit years in PSERS). or |eon than 05 (with fewer than ten service credit years). There isnocap onyears ofservice credit. Members are eligible for retirement akthe age of65with 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 80 is considered an *ody retirement. PSERS members who retire prior to the age of 60 receive reduced benefits. If retirement in at age 53 or older with at least 20 years of service, e three percent per year reduction for each year between the age at retirement and age 60 applies. PSERS Plan 2 retirement benefits are eniuohaUy reduced to reflect the choice of survivor benefit. Other benefits include duty and non -duty disability paymanto, 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 nfeligible service. Washington State Auditor's 0fficr Page 75 CITY OF TUKVV1LA: 2015CAFR NOTES TO THE FINANCIAL STATEMENTS 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 2employer rates include components 1naddress the PIERS Plan 1 unfunded actuarial accrued liability and administrative expense currently set at 0.18 percent. Each biennium, the state Pension Funding Council adopts Plan 2employer and employee contribution rates. The PSERSPlan 2required contribution rates (expressed as a percentage of current -year covered payroll) for 2015 were as follows: Actual Contribution Rates- Employer Employee January through June 2015 10.54% 6.36% July through December 2015 11.54% 6.59% The City of Tukwila actual contributions to the plan were $17,224 for the year ended December 31, 2015 LEOFF membership includes all full-time, fully compensated, |one| law enforcement commissioned officers, firefighters, and asofJuly 24.2OO5.emergency medical technicians. LEOFF iscomprised oftwo separate defined benefit plans. LEOFF Plan provides retirement, disability and death benefits. Retirement benefits are determined per year nf service calculated as a percent of final average salary (FAS) as follows: 0 20+years of service —2.0% of FAS ° 10-10years ofservice —1.5%ofFAS ° 5-9years nfservice —1%nfFAS The FAS is the basic monthly salary received at the time of retirement, provided a member has held the ooma position or rank for 12 months preceding the date of retirement. Othorwima, it is the average of the highest consecutive 24 months' salary within the last ten y*om 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 paymentx, e cost -of living adjustment (COLA), and o 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 0onew entrants onSeptember 3O.1Q77. 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 2015. Employers paid only the administrative expense of 0. 18 percent of covered payroll. LEOFF Plan 2 provides netirement, disability and death benefits. Retirement benefits are determined as two percent of the final average ne|ery (FAS) per year of service (the FAG is boned on the highest consecutive 00 months). Members are eligible for retirement with a full benefit at 53 with at least five years of service credit. Members who retire prior tothe age nf53receive reduced benefits. Kthe member has a\least 20years ofservice and is age 50. the reduction in three percent for each year prior to age 53. 0thenuino, the benefits are actuarially reduced for each year prior 0oage 53. LEOFF 2 retirement benefits are also actuarially reduced to reflect the choice ofesurvivor benefit. Other benefits include duty and non -duty disability payments, a cost -of -living allowance (based on the CP{), capped at three percent annually and a one-time duty -related death beneht, if found eligible by the Department of Labor and Industries. LEOFF 2 members are vested after the completion of five years of eligible service. Washington State Auditor's 0fficr Page 76 B'7G CITY OF TUKV\ALA: 2015 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 on administrative expense component set od0.18 ponmnL 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 2015 were as follows: Actual Contribution Rates: Employer Employee State and local governments 5.23% 8.41% Ports and Universities 8.59% 8.41% The City of Tukwila actual contributions to the plan were *804,404 for the year ended December 31.2015 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 oemioo costs of Plan 2 in 000nndanmy 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 3O.2O15.the state contributed $58.339.O321oLE0FFPlan 2. Actuarial Assumptions The total pension liability (TPUfor each ofthe DRS plans was determined using the most recent actuarial valuation completed in2015with evaluation date nfJune 3O.2O14. The actuarial assumptions used inthe 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 2014 actuarial valuation report. The TPL was calculated as of the valuation data and rolled forward to the measurement date of June 30. 2015. Plan liabilities were rolled forward from June 30, 2014, to June 30, 2015, reflecting each plan's normal cost (using the entry -age cost methnd).assumed interest and actual benefit payments. ° Inflation: 3% 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 bypromotions 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 DSA applied offsets ;o 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 orher lifetime. There were minor changes in methods and assumptions since the last valuation. The OSA updated demographic assumptions, consistent with the changes from the 2007-2012 Experience Study Report, used when valuing the PERS 1and TERG1Basic Minimum COLA. The OSA corrected how valuation software calculates a member's entry age under the entry age normal actuarial cost method. Previously, the funding age was rounded, resulting in an entry age one year higher insome cases. For purposes of calculating the Plan 2/3 Entry Age Normal Cost contribution rates, the OSA now uses the current blend of Plan 2 and Plan 3 salaries rather than using a long-term membership assumption of two- thirds Plan 2 members and one-third Plan 3 members. Washington State Auditor's 0ftce Page 77 CITYOFTUKWLA: 2015CAFR NOTES TO THE FINANCIAL STATEMENTS ° The OSA changed the way happlies salary limits, andescribed inthe 20O7-2012Experience Study Report. 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 77 percent long-term discount rate to determine funding liabilities for calculating future contribution rate requirements. (All plans use 77percent except LEOFF 2, which has assumed 7.5 percent). Consistent with the long-term expected rate of return, m 73 percent future investment rate of return on invested assets was assumed for the test. Contributions from plan members and employers are assumed tncontinue being made a\contractually required rates (including PERS 2/3, PBERS 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 beavailable tn make all projected future benefit payments nfcurrent plan members. Therefore, the long-term expected rate ofreturn uf7.5 percent was used 0odetermine 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 nfVVS|B'ocapital market assumptions. TheVVS|B 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 a5O-yeortime horizon. Estimated Rates ofReturn byAsset Class Best estimates of arithmetic real rates of return for each major asset class included in the pension plan's target asset allocation osnfJune 3O.2015.are summarized inthe table below. The inflation component used !ncreate the table is 2.2 percent and represents the WSIB's most recent long-term estimate of broad economic inflation. Sensitivity of NPL The table below presents the City of Tukwila proportionate nhona 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. Washington State Auditor's Office Page 78 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% Sensitivity of NPL The table below presents the City of Tukwila proportionate nhona 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. Washington State Auditor's Office Page 78 CITY OF TUKWIL& 2015 CAFR NOTES TO THE FINANCIAL STATEMENTS RMUEBWEMUEMZM%�� Detailed information about the State's pension plans' fiduciary net position is available in the separately issued DRS financial report. PensionPension Liabilities (Assets), d Deferred Outflows of At June 30, 2015, the City of Tukwila reported a total pension liability of $7,037,111 for its proportionate share of the net pension liabilities as follows: PERS 1 7,100,255 PERS 2/3 6,202,533 PSERS 2 PERS 1 8,644,579 7,100,255 5,772,278 PERS 2/3 18,136, 552 6,202,541 (2,934,883) PSERS 2 73,156 9,628 (35,563) LEOFF 1 (600,983) (939,397) (1,227,833) LEOFF 2 5,343,574 (5,335,916) (13,372,638) RMUEBWEMUEMZM%�� Detailed information about the State's pension plans' fiduciary net position is available in the separately issued DRS financial report. PensionPension Liabilities (Assets), d Deferred Outflows of At June 30, 2015, the City of Tukwila reported a total pension liability of $7,037,111 for its proportionate share of the net pension liabilities as follows: The amount of the liability/(asset) reported above for LEOFF Plan 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 liability/(asset) that was associated with the City of Tukwila were as follows: LEOFF 2 — employer's (5,335,916) proportionate share LEOFF 2 — State's proportionate share of the net pension liability/(asset) associated with (3,528,118) the employer TOTAL (8.864.034) At June 30, the City of Tukwila proportionate share of the collective net pension liabilities was as follows: Washington State Auditor's Office Page 79 B-79 PERS 1 7,100,255 PERS 2/3 6,202,533 PSERS 2 9,628 LEOFF 1 939,397 LEOFF 2 5,335,916 The amount of the liability/(asset) reported above for LEOFF Plan 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 liability/(asset) that was associated with the City of Tukwila were as follows: LEOFF 2 — employer's (5,335,916) proportionate share LEOFF 2 — State's proportionate share of the net pension liability/(asset) associated with (3,528,118) the employer TOTAL (8.864.034) At June 30, the City of Tukwila proportionate share of the collective net pension liabilities was as follows: Washington State Auditor's Office Page 79 B-79 CITY OF TUMALN 2015CAFR NOTES TO THE FINANCIAL STATEMENTS Employer contribution transmittals received and processed bythe DRS for the fiscal year ended June 3Oare used as the basis for determining each employer's proportionate share of the collective pension amounts reported by the DRS in the Schedules of Employerand NonemployerAllocations for all plans except LEOFF 1. LEOFF Plan 1 allocation percentages are based on the total historical employer contributions 0u LEOFF 1 from 1971 through 2OOOand the retirement benefit payments infiscal year 2O15. Historical data was obtained from o 2O11study bythe Office ofthe State Actuary (OSA). |nfiscal year 2D15.the state nfWashington contributed 87.i2 percent of LEOFF 1 employer contributions and all other employers contributed the remaining 12.88 percent of employer contributions. LEOFF 1 ixfully funded and nufurther employer contributions have been required since June 2000. If the plan becomes underfbnded, 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 2015.the state ofWashington contributed 3S.80percent ofLEOFF 2employer contributions pursuant to RCW 41.27.726 and all other employers contributed the remaining 60.20 percent of employer contributions. The collective net pension liability (asset) was measured as of June 30, 2015, and the actuarial valuation date on which the total pension liability (asset) is based was as of June 30, 2014, with update procedures used to roll forward the total pension liability 1nthe measurement date. Pension Expense For the year ended December 31, 2015, the city of Tukwila recognized pension expense as follows: ro PERS 1 186,773 PERS 2/3 688,648 PERS 1 0.139888% 0.135736% -0.004152% PERS 2/3 0.178370% 0.173592% -0.004778% PSERS 2 0.055208% 0.052748%, -0.002460% LEOFF 1 0.077048% 0.077944% 0.000896% LEOFF 2 0.510586% 0.519159%1 0.008573% Employer contribution transmittals received and processed bythe DRS for the fiscal year ended June 3Oare used as the basis for determining each employer's proportionate share of the collective pension amounts reported by the DRS in the Schedules of Employerand NonemployerAllocations for all plans except LEOFF 1. LEOFF Plan 1 allocation percentages are based on the total historical employer contributions 0u LEOFF 1 from 1971 through 2OOOand the retirement benefit payments infiscal year 2O15. Historical data was obtained from o 2O11study bythe Office ofthe State Actuary (OSA). |nfiscal year 2D15.the state nfWashington contributed 87.i2 percent of LEOFF 1 employer contributions and all other employers contributed the remaining 12.88 percent of employer contributions. LEOFF 1 ixfully funded and nufurther employer contributions have been required since June 2000. If the plan becomes underfbnded, 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 2015.the state ofWashington contributed 3S.80percent ofLEOFF 2employer contributions pursuant to RCW 41.27.726 and all other employers contributed the remaining 60.20 percent of employer contributions. The collective net pension liability (asset) was measured as of June 30, 2015, and the actuarial valuation date on which the total pension liability (asset) is based was as of June 30, 2014, with update procedures used to roll forward the total pension liability 1nthe measurement date. Pension Expense For the year ended December 31, 2015, the city of Tukwila recognized pension expense as follows: At December 31, 2015, the City of Tukwila reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Washington State Auditor's Office Page 80 PERS 1 186,773 PERS 2/3 688,648 LEOFF 1 (192,609) LEOFF 2 309,657 TOTAL 1,003,624 At December 31, 2015, the City of Tukwila reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Washington State Auditor's Office Page 80 CITY OF TUKWILA: 2015 CAFR NOTES TO THE FINANCIAL STATEMENTS PERS 2/3 ;, MARX �'BCFiFI 'k1 pf PERS 1 „ ; , � �� R e 0 Differences between expected and actual experience Net difference between projected Net difference between projected and actual investment earnings and actual investment earnings - 388,462 on pension plan investments Changes of assumptions Changes of assumptions - - Changes in proportion and differences between differences between 153,740 contributions and proportionate contributions and proportionate - share of contributions share of contributions Contributions subsequent to the Contributions subsequent to the 376,122 measurement date measurement date TOTAL TOTAL 376,122 388,462 PERS 2/3 Differences between expected 659,332 and actual experience Net difference between projected and actual investment earnings - 1,655,785 on pension plan investments Changes of assumptions 9,994 - Changes in proportion and differences between 153,740 contributions and proportionate share of contributions Contributions subsequent to the 486,432 measurement date TOTAL 1,155, 758 1,809,525 Washington State Auditor's Office Page 81 B-81 CITY OF TUKWILA: 2015 CAFR NOTES TO THE FINANCIAL STATEMENTS LEOFF 1 f rrbefe� d nflov � PSES _ Differences between expected 9,020 - and actual experience Net difference between projected - 158,586 and actual investment earnings - 4,775 on pension plan investments - - Changes of assumptions 60 - Changes in proportion and differences between - 149 contributions and proportionate share of contributions Contributions subsequent to the 5,090 measurement date - 158,586 TOTAL 14,170 4,924 LEOFF 1 _� QSr� - ;,, , , ///r; ..�,. ur, ...... ,sA+'''` InfipWc�f �r 2 MW (h/ Differences between expected _ and actual experience 467,248 - Net difference between projected and actual investment earnings - 158,586 on pension plan investments - 1,616,755 Changes of assumptions - - Changes in proportion and 14,074 differences between contributions and proportionate - 44,932 share of contributions Contributions subsequent to the measurement date 399,206 TOTAL - 158,586 Washington State Auditor's Office Page 82 B-82 lAMMM'°� eerr cif LEOFF 2 Differences between expected 467,248 - and actual experience Net difference between projected and actual investment earnings on - 1,616,755 pension plan investments Changes of assumptions 14,074 Changes in proportion and differences between contributions - 44,932 and proportionate share of contributions Contributions subsequent to the 399,206 measurement date TOTAL 880,529 1,661,687 Washington State Auditor's Office Page 82 B-82 CITY OF TUKWIL& 2015 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, 2016. Other amounts reported as deferred outflows and deferred inflows of resources related to pensions will be recognized in pension expense as follows: 2016 $ (417) 2017 (417) 2018 (418) 2019 2,431 2020 1,488 Thereafter 1,489 Washington State Auditor's Office Page 83 B-83 CITY OF TUMMLA: 2015CAFR NOTES TO THE FINANCIAL STATEMENTS Firemen's Pension System Summary ofSignificant Accounting Policies Investments are valued and reported otfair 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. ingle-emplmye/definedbenefitponninnp|endhatpmvdespenoionnfnrfiefighteraUhatwomhiredphorto197D. 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 tobeelected 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 \um, select a third eligible member who shall serve in the event of an absence nfone ofthe 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 in reuponnib|eforpeying1hoponsionsof\hosemembersnetinedphnr0mMenoh1.1Q7Oondforpmvidingthe^exoese benefiC', the excess of FPF formula benefits over the LE0FF benefits. Therefore, the plan in dosed to new members. A1December 31.2O15.FPF membership consisted ofthe fo||mwing� Inactive plan members retired prior to March 1, 1970 Inactive plan members retired March 1, 1970 or after Active Plan Members '7'sissol Benefits Provided All benefit 0enno are in statutes RCVV 4116. 41.18. and 41.26. FPF provides retinemert, dinabi|hy, and death benefits. Each firefighter in service on March 1. 1970 remykea 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 tnthe increase inthe Seattle -area CPI, with the change computed annually. Regardless of the increase (or decrease) inthe CPI, the benefits are increased atleast 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 1Q01.The latter applies 0nall 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 sham of the State's distribution ofthe fire insurance premium taxes. The amount the City receives is25% of all monies received by the State from taxes on fire insurance premiums. Contributions can also come from taxes paid pursuant to the Washington State Auditor's �� mge 84 CITY OF TUKWILA: 2015 CAFR NOTES TO THE FINANCIAL STATEMENTS provisions of RCW 41.16.060. This statute require that each municipality levy up to $0.45 (only $0.225 of which can 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. arvar,Ti -Fill? 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 held are with Columbia Bank City's Net Pension Liability The components of the City's net pension liability at December 31, 2015 are as follows: Total pension liability $ 1,829,926 Less: Plan fiduciary net position 1,416,506 City's net pension liability $ 413,420 Plan fiduciary net position as a percentage of the total pension liability 77.41% Total Pension Liability 2014 2015 Service Cost Interest 50,098 49,716 Changes of benefit terms _..._... ............ ........ _......._..... . _.._...... ................... - - Differences between expected and actual experience ( - (2,442) Changes in assumptions Benefit payments, included refunds of employee (6L863) (58,277) contributions Net change in total pension liability (11,765) _ (11,003) Total pension liability—beginning 1,852,693 1,840,929 _._.._ ....................................._....._------ Total pension liability— ending (a) $ 1,840,929 $ 1,829,926 Washington State Auditor's Office Page 85 B-85 CITY OF TUMMLk 2015 CAFR NOTES TO THE FINANCIAL STATEMENTS Plan Fiduciary Net Position 1,416,506 `. City's net pension liability — ending (a) — (b) $ 427,903 $ 413,420 Plan fiduciary net position as a percentage of the o 76.76 /o Contributions — employer $ 64,114 $ 63,590 Contributions — employee n/a - - Net investment income At December 31, 2015, the City of Tukwila reported deferred outflows of resources and deferred inflows of resources 1,805 2,667 Benefit payments, including refunds of employee (61,863) (58,277) contributions Administrative expense - (4,500) E........._........_..._..._......_......_......._.............._... .... ........... .... _...... ... ...... ... ................. ........... _...... _..... _...... _..... _.......... Other Net change in plan fiduciary net position 4,056 ` 3,481 Plan fiduciary net position — beginning 1,408,970 1,413,026 Plan fiduciary net position —ending (b) 1,413,026 1,416,506 `. City's net pension liability — ending (a) — (b) $ 427,903 $ 413,420 Plan fiduciary net position as a percentage of the o 76.76 /o u 77.41/o total pension liability Covered -employee payroll City's net pension liability as a percentage of n/a n/a covered -employee payroll Deferred Outflows of Resources and Deferred Inflows of Resources At December 31, 2015, the City of Tukwila reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Differences between expected and actual 2,442 experience Net difference between projected and actual investment earnings on 70,339 pension plan investments Totals 70,339 2,442 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, 2016. Other amounts reported as deferred outflows and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Washington State Auditor's Office Page 86 B-86 CITY OF TUKVALA� 2015 CAFR NOTES TO THE FINANCIAL STATEMENTS Actuarial Assumptions The total pension liability was determined by an actuarial valuation as of December 31, 2014, using the following actuarial assumptions, applied 0oall periods included inthe measurement: Inflation 2.75% Salary increases 3.75% Investment rate ofreturn 2.75% Healthy life mortality rates were based on the RP -2014 mortality table, total datemt, 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 ofreturn onpension plan investments assumption was based onthe nature and mix of current and expected pension plan assets over e period of time representative of the expected length of time between the first day nfservice and date ofthe last benefit payment. The discount rate used to measure the total pension liability was 275%. 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 net pension liability of the City, calculated using the discount rate of 2.75%, as well as what the City's net pension liability would be if it were calculated using udiscount rate that is 1'pementege'pointlower, 275%. or1-percentage point higher, 375%. than the current rate: City's net pension liability 1%Decrease Current Discount 1%Increase Rate 2.070,457 $ 1.829820 $ 1.028,370 A general summary of the substantive plan used as the basis of the valuation follows. Applicable Statutes RCVV41]0.41j8.4126 Benefits Each firefighter in service on March 1, 1970 receives the greater of the benefit payable under LEOFFnrFPF.Where benefits under the old law exceed those under the new for any firefighter, the excess benefits are paid from the FPFnf the city employing the member nnMarch 1.1A7O. Service Retirement Benefit Washington State uvam,'syffic Page 87 CITY OF TUKVVILA: 2015CAFR NOTES TO THE FINANCIAL STATEMENTS Member Eligibility: age S0and 25years ofservice 09CVV4118.O40 nrAge 5Oand five years ofservice URCVV41.2O.O9O. Amount of benefit: 50%nfsalary plus enadditional 2%for each year ofservice inexcess of25years. Maximum benefit nf8O96ofsalary (does not apply for those retiring after July 1.20O6). Survivor Eligibility: spouse orchild Amount of benefit: continuation of the firefighter's benefit. (if spouse—same. plus additional 5% of salary per child. If no opnuee-- 30Y6 ofsalary for first child, 1O96for each additional child. Maximum of 60% of salary). Duty Disability Retirement Benefit Member Eligibility: disabled after six-month waiting period. Amount ofbenefit: determined the same aoService Retirement Benefit. Recovery: restoration 1oservice. Survivor See Survivor's Benefit section under Service Retirement. Member Eligibility: disabled after 90 -day waiting period. Amount of benefit: 50% of salary, orservice retirement benefit, if greater. Recovery: see Duty Disability Retirement. Limitations: no benefits payable if firefighter employed elsewhere when disabled. Survivor Eligibility: spouse orchild Amount of benefit: 33.3%towidow orchildren only. 45.8%bowidow and one child. 47.8%bzwidow and two children. 5O.O%towidow and three children. Duty Death Benefit Eligibility: spouse nrchild Amount ofbenefit: |fspouse --5O%ofsalary plus anadditional 5%ofsalary per child; maximum benefit of8D96ofsalary. |fnospouse --58%ofsalary tn children. Non Duty Death Benefit Eligibility: spouse orchild Amount ofbenefi\:provisions the same eoSurvivor's Benefit under Non -Duty Disability Retirement. Special Provisions Under disability or death benefito, a surviving spouse may elect lump -sum payment of $5,000 in lieu of future monthly benefits. Vesting Termination after 20 years of service (RCW41.18.130) orfive years of servii Deferred Benefit Commences: when a firefighter would have had 25 years of service (RCI Amount of benefit: 2% of salary for each year of service. Other provisio apply, see statutes. Death while vested prior to commencement of benefits: payment of firefighte deferred benefit to spouse or child. Washington Slate Auditor's Office Page 88 CITY OF TUKVMLA: 2015 CAFR NOTES TO THE FINANCIAL STATEMENTS Benefits Payable Annual increase proportionate to the increase in the Seattle -area CPL Under LEOFF Minimum increase at least 2% each year. Type I Escalation by salary in proportion to current salary or rank from which the firefighter retired. Type 2 Annual increase proportionate to the increase in the Seattle -area CPI. Minimum increase at least 2% each year. Applicability 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 Minimum Benefit After April 25, 1973, a minimum benefit of $300 per month to all retired firefighters and their survivors. This minimum is increased by the CPl. 7uneral Benefit $500 RCW 41.18.140, no provision under RCW 41.26. Participant Summary January 1, 2015 ion=] NjIMMIWil,111, M �WIIIQIIN , Surviving I Spouses EzFTr4 '-Mk� , ZMENNIII at the dates indicated. FT Actuarial Cost Method Entry Age �171 IMT40 PUFMINTRTM IVOITIMM&TWI January 1, 2015 2.75% Washington State Auditor's Office Page 89 B-89 CITY OF TUKV\ALA: 2015 CAFR NOTES TO THE FINANCIAL STATEMENTS RP -2014 mortality table, total dataset, fully generational Healthy Mortality 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 Disabled Mortality with mortality improvement scale MP -2014 set forward two years for males and females. Spouse Age We assumed that wives are three years youn/- •_ • eband rugs NON Now" 110111 1 gzmaz= am The Health Plan's actuary is Healthcare Actuaries. The Health Plan does not issue a separate standalone financial report. LEM= As of December 31, 2015, there were 38 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. x3min= Washington State Auditor's Office Page 90 B-90 We based the long-term expected rate of return on pension plan investments assumption on the nature Discount Rate (or Investment and mix of current and expected pension plan assets Return) 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. Cost of Living 2.75%, based on SSA OASDI 2014 report. Salary Increases (for calculated benefit increases based on 3.75%, based on SSA OASDI 2014 report. rank) RP -2014 mortality table, total dataset, fully generational Healthy Mortality 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 Disabled Mortality with mortality improvement scale MP -2014 set forward two years for males and females. Spouse Age We assumed that wives are three years youn/- •_ • eband rugs NON Now" 110111 1 gzmaz= am The Health Plan's actuary is Healthcare Actuaries. The Health Plan does not issue a separate standalone financial report. LEM= As of December 31, 2015, there were 38 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. x3min= Washington State Auditor's Office Page 90 B-90 CITY OF TUKWILA: 2015 CAFR NOTES TO THE FINANCIAL STATEMENTS 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, 2015, the City contributed $477,292 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. zmnm• �• •, 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. • • •: _ •�j �� X11 a y/moo.., `,, $ - $ - $1,366,284 $ 557,103 $ 809,181 Annual required contribution (ARC) 1,264,522 1,903,679 2,585,779 Interest on Net OPER Obligation 174,458 171,067 146,904 Adjustment to ARC (359,904) (388,580) (452,441) Annual OPEB cost (expense) 1,079,076 1,686,166 2,280,242 Employer contributions Change in Net OPEB Obligation Net OPEB Obligation at Beginning of year (878,755) (905,974) (477,292) 200,321 780,192 1,802,950 4,361,460 4,561,781 5,341,973 * (i) is the assumed interest rate that year, 4% in 2013, 2.75% in 2014 and 2.75% in 2015. The net OPEB obligation of $7,144,923 is included as a non-current liability on the Statement of Net Position. DEVELOPMENTANNUAL OF OPEB COST 2008 $ 1,366,284 $ - $ - $1,366,284 $ 557,103 $ 809,181 $ 809,181 $ 809,181 2009 1,366,284 40,459 61,839 1,344,904 335,265 1,009,639 1,818,820 1,031,019 2010 1,366,284 90,941 143,332 1,313,893 317,771 996,122 2,814,942 1,048,513 2011 1,264,522 112,598 213,809 1,163, 311 335,090 828,221 3,643,163 929,432 2012 1,264,522 145,727 287,945 1,122, 304 404,007 718,297 4,361,460 860,515 2013 1,264,522 174,458 359,904 1,079,076 878,755 200,321 4,561,781 385,767 2014 1,903,679 171,067 388,580 1,686,166 905,974 780,192 5,341,973 997,705 2015 2,585,779 146,904 452,441 2,280,242 477,292 1,802,950 7,144, 923 2,108, 487 * Based on a 21 -year closed amortization as of January 1, 2008 Washington State Auditor's Office Page 91 B-91 CITYOFTUKVMLA: 2015CAFR NOTES TO THE FINANCIAL STATEMENTS The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation were as follows: December 31.2O13 1.079070 878,755 81 4`581.781 December 31, 2014 1.086.109 005.974 54 5.341.973 December 31, 2015 2,280,242 477,292 21 7,144,923 Funded Status and Funding Progress AoofJanuary 1.2O16.the most recent actuarial accounting update, the plan was 0%funded. The actuarial accrued liability for benefits was $302 miUinn, and the actuarial value nfassets was $O, resulting in an unfunded eotuohn| accrued liability (UAAUof$30.2million and afunded ratio ofD%.The funded ratio inO%.because the City funds benefits nnapay-eo-ynu-gnbasis. January tz000 $n $16,103 $16,103 0% $581 4& January 1.zn11 n 1*.805 14.805 o nn n January 1.an4 o 21.264 21.264 o 195 1 January 1.oms n o\zm 29,538 0 132 o Only four valuations completed to date 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, mnrto|ity, and healthcare cost trend. Actuarially determined amounts are subject to continual revision an actual results are compared with past expectations and new estimates are made about the future. GASB 45 requires that the schedule of funding pmgrenn, presented as required supplementary information following the notes to the financial stetemenCs, 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 ofprojections of benefits for financial reporting purposes isthe 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 ofshort-term volatility inactuarial accrued |iebi|itiesendtheactuaho|ve|uenfonaetn.uonnisten1 with the long-term perspective ofthe calculations. The January 1.2O15valuation 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 Washington State Auditor's 0ffic, Page 92 B -Q2 CITY OF TUKIMLA: 2015 CAFR NOTES TO THE FINANCIAL STATEMENTS is lsp� 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 1 1 Assumption Rates Actuarial Cost Method Entry Age Normal method. Measurement Date January 1, 2015 Inflation Rate 3.00% Discount Rate (or Investment Selected the assumed discount rate of 2.75% based on the five - Return) 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. 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 The City reimburses Medicare retirees for Part B premiums. The Reimbursements 2015 annual premium is $1,258.80. Affordable Care Act (ACA) Ages 55-64 All Other Excise Tax Threshold Single $ 11,850 $ 10,200 Washington State Auditor's Office Page 93 B-93 CITY OF TUKVVILA: 2015 CAFR NOTES TO THE FINANCIAL STATEMENTS ACA Base Premium Assumed annual plan costs upon which the ACA tax calculation is based: Medicare ineligible $ 28,071 Medicare eligible $ 16,557 ACA TaxWe assumed a 40% excise tax rate on premiums above the ACA ;hreshold. • 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. Exdse Pre- Paft B Long -Term Tax Year Medilcare Madikare Dentat Vision Premitints Care Threshold 2015 9.0(M 6.50% 5.59 4.01 5.4% 5.0% B. 2016 7.W% 6.50% 5.0% 4.0% 5.4% 5.0% 2017 6.5CM &00% 4.5% 4.0% 5.4% 5.0% 2018 5.5a 5.50% 4,0% 4.0% 5.4% 5AM 4.24% 2019 5.5= &50% 3.5% 3.5% 5.4% SAM 3.24% 202D 5.46% 5.46% 3.5% 3.5% 5.4% 5.0% 324% 2021-2074 3.SX 3.5% 5.1a 5.(K 3.24% 2075+ 3.W% 3-W% 3.5% 3.5% 5.4% 5.0% 3.24% * The traW rates vwtuft assunied wiflation of 3% for att futwe years. 11iiii;q Ill 3-Me-WIM-year frenu Imulinatlun 611511 unanuai sialeFrienis, prolme is increasing or decreasing over time relative to the actual. M.EM= Service for its General 0 • ligation Bonds. 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. Washington State Auditor's Office Page 94 B-94 CITY OF TUK\MLA: 2015CAFR NOTES TO THE FINANCIAL STATEMENTS 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. 9 Street program. improvements to the #•• 1142-,�1 20k&G�W16--?.14 C2Xk21-C11rEAC-#, MV df, i activities within the City's Tukwila International Boulevard (TIB) urban renewal area. X,521 -4.--a XY 2 1?: 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. 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 U usitoll E� U I 1W ti W�Kw�mwm I WmL;ALW8EW-VJk11 I W -tE vv,§ ul�' Rkw r;Z 911 w1t; i lu I W tkw I 11v ir ;�.Ikw 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. FIRM=, QJIJQ -LIZUU 1. -1 liew U15plajeU net 01 ItnaFFIE)r PFUFFIIIFII UF UISCU11FIL premium and increased by the amortization of de�t discount. The City currently maintains a rating of Aaa from Moody's Investor Service for debt in this category. State of Washington Public Works Trust Fund Loans are a low interest rate loans available from the State of Washin,!ton De-cartment of Commerce Local Government & Infrastructure Division for �Suali%inj#Ccro�ects and are a direct responsibility of the City. This debt is repaid by proprietary fund revenues. The City is in compliance with all Washington State •'• limitation statutes and bond indenture • Washington State Auditor's Office Page 95 B-95 CITY OF TUMAL& 2015 CAFR NOTES TO THE FINANCIAL STATEMENTS Outstanding 01/01/2015 $16,638,221 $6,687,500 $2,580,000 $ 5,742,866 $ 4,046,602 $ 6,650,400 $ 5,341,973 $47,687,562 Added 8,075,000 - 1,742,527 501,484 3,464,525 - 1,802,950 15,586,486 Retired / redeemed (1,655,507) (605,000) (2,580,000) (597,892) (3,316,650) (385,200) - (9,140,249) Outstanding 12/31/2015 $23,057,714 $6,082,500 $1,742,527 $ 5,646,458 $ 4,194,477 $ 6,265,200 $ 7,144,923 $54,133,799 Add Premiums, Subtract Discounts 445,000 257,655 3,827,260 761,523 2,143, 521 549,296 190,800 237,069 $54,895,322 Following are schedules showing the debt service requirements to maturity for the City's long-term debt, excluding compensated absences. 2016 $ 1,932,737 $ 779,111 $ 171,600 $ 255,861 $ 670,000 $ 286,005 $ 4,095,314 2017 4,241,428 716,242 179,200 249,088 450,000 271,830 6,107, 788 2018 2,062,196 634,436 184,800 243,173 445,000 257,655 3,827,260 2019 2,143, 521 549,296 190,800 237,069 445,000 243,638 3,809,324 2020 1,416,461 450,566 197,200 229,039 445,000 223,613 2,961,878 2021-2025 5,895,371 1,382,838 1,115,600 1,018,682 2,225,000 813,794 12,451,284 2026-2030 2,610,000 638,288 1,360,800 765,620 1,402,500 239,188 7,016,395 2031-2035 2,756,000 234,239 963,200 308,683 - - 4,262,121 2036-2040 - - 1,902,000 211,365 - - 2,113,365 2016 $ 144,823 $ 39,189 $ 599,468 $ 28,232 $ 811,712 2017 143,282 37,386 599,468 25,235 805,371 2018 149,659 34,033 599,468 22,238 805,398 2019 150,736 30,531 599,468 19,240 799,976 2020 156,614 27,004 599,468 16,243 799,329 2021-2025 821,462 79,052 2,360,873 37,036 3,298,423 2026-2030 175,951 4,117 205,875 5,147 391,090 2031-2032 - - 82,370 618 82,988 Washington State Auditor's Office Page 96 B-96 CITY OF TUKWILA: 2015 CAFR NOTES TO THE FINANCIAL STATEMENTS ,�:r_�r��i��r�ra:�t�n�►_� �i�rri���•�•i��,r�ir�,r�>.�rr�r.� GOVERNMENTAL ACTIVITIES: Limited General Obligation (G0) Bonds Payable 2008 Refunding-Streets/Facilities 4.00-6.00 12/01/19 6,180,000 2010 Streets /Equipment 2.00-5.41 12/01/24 5,870,000 2011 Refunding Streets (2003 GO) 1.25-4.00 12/01/23 4,620,000 2013 LTGO-MPD Pool Improve 2.00-4.00 12/01/22 1,000,000 2014 LTGO-Urban Renewal 0.85-4.86 12/01/34 3,850,000 2014 LTGO-Line of Credit 1 Mo. LIBOR+ 1.0% 12/01/17 2,250,000 2015 LTGO-Interurban, BAR 2.25-3.00 12/01/35 5,825,000 3,450,000 630,000 2,820,000 655,000 4,350,000 380,000 3,970,000 395,000 4,185,000 405,000 3,780,000 420,000 803,221 99,507 703,714 93,737 3,850,000 141,000 3,709,000 149,000 - 2,250,000 - 2,250,000 - - 5,825,000 - 5,825,000 220,000 Total Bonds Payable 29,595,000 16,638,221 8,075,000 1,655,507 23,057,714 1,932,737 Issuance premiums - 562,755 309,758 110,990 761,523 - MIAMI Due to Other Governments 2009 Facility SCORE 3.00-6.62 01/01/39 6,898,800 6,430,400 165,200 6,265,200 171,600 2010 Valley Com Refunding 4.30-5.75 12/01/15 1,065,000 220,000 220,000 - - Special Assessment Debt Klickitat Urban Access Project 3.150-5.375 01/15/29 6,687,500 6,687,500 605,000 6,082,500 670,000 Q1r� 5 ;:?"✓"asEss�.afi.il;Y ua�it° r ' �'�� :. N�s..:�* o .y. .... . M*9J11T-MCT47r-rrJr171- =1 Valley Communication Center Public Development Authority issued General Obligation bonds in 2000 for a new dispatch facility and refunded the debt in April 2010. The City is contracted to pay 20% of the debt service of these 15 -year bonds that matured in 2015. This debt was paid from the General fund. 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 bands that mature in 2039. This debt is paid from the General fund. Washington State Auditor's Office Page 97 B-97 CITY OF TUKVVILA: 2015 CAFR NOTES TO THE FINANCIAL STATEMENTS • BUSINESS -TYPE ACTIVITIES: Bands Payable: 1995 Water/Sewer Revenue 4.15-6.63 02/01/15 $ 4,500,000 $ 375,000 $ $ 375,000 $ 2006 Water/Sewer/SWM Revenue 4.00-4.50 12/01/26 $ 3,180,000 $ 2,205,000 $ $ 2,205,000 $ 2015 Water/Sewer/SVM/IRefunding 2.34 12/01/26 1,742,527 - 1,742,527 - 1,742,527 144,823 Unamonized Deferred Credits (Charges): $ - $23,057,714 $ 6,082,500 - 6,082,500 - 1,742,527 1,742,527 - 5,646,458 5,646,458 6,265,200 Issuance Premiums 3,860,473 334,004 4,194, 477 761,523 35,770 7,144, 923 35,770 Issuance Discounts - (82) (82) - - NetBondsPayable 9,422,527 2,615,687 1,742,527 2,615,688 1,742,527 144,823 Public Works Trust Fund Loans: 2003 Loan-Water/Sewer 0.50 06/01/21 273,870 101,180 - 14,454 86,725 14,454 2003 Loan -Surface Water 0.50 06/01/21 219,725 81,175 11,597 69,578 11,597 2004 Loan-Water/Sewer 0.50-2.00 06/01/24 5,016,000 2,728,862 272,886 2,455,976 272,886 2004 Loan -Surface Water 0.50-2.00 06/01/24 684,000 372,118 37,212 334,906 37,212 2004 Loan -Surface Water 1.00 06/01/24 4,196,056 2,221,441 222,144 1,999,297 222,144 2014 Loan -Sewer 0.5 06/01/32 238,090 501,484 39,5699 699,975 41,175 ee- //i�QV'°�2,i 1>' y S'YkFi General obligation bonds Special assessment bonds Revenue bonds Public Works Trust Fund loans Due to Other Governments Employee leave benefits Net Premiums/Discounts Other Post -Employment Benefits $23,057,714 $ - $23,057,714 $ 6,082,500 - 6,082,500 - 1,742,527 1,742,527 - 5,646,458 5,646,458 6,265,200 - 6,265,200 3,860,473 334,004 4,194, 477 761,523 - 761,523 7,144, 923 - 7,144, 923 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 Washington State Auditor's Office Page 98 B-98 CITY OF TUKV\nLA: 2015CAFR NOTES TO THE FINANCIAL STATEMENTS people, provided the indebtedness in excess of 2.5% in for utilities; 7.5% with a vote of the peop|o, provided the indebtedness in excess of 5.0% is for parks or open space development. At December 31, 2015, the debt limits for the City were as follows: Legal Limit * 80,929,877 $134,883,128 $ 269,766,256 $ 404,649,384 Outstanding Net Indebtedness 29,212,266 29,212,266 29,212,266 29,212,266 On December 15, 2015. the City issued $1.742.527 inwater and sewer revenue refunding bonds. 2015. with an effective interest cost of 2.340087 percent to advance refund $2,060,000 of outstanding water and sewer revenue bonds, 2O0O.with oneffective interest rate af4.484518percent. The net proceeds were used 0opurchase U.G.government securities that were deposited with anescrow agent 0m provide for all future debt service payments nnthe refunded bonds. Asnresult, the refunded bnndoaeoonnideed defeanod and the liability for those bonds has been removed from the business -type activities column of the statement ofnext position. The reacquisition price exceeded the net carrying amount of the old debt by $80,707. This transaction resulted in an economic gain (difference between the present values of the old and new debt service payments) of $147,882. Long-term Liabilities other than debt Claims are paid from one nrmore funds based onthe nature nfthe transaction. Employees' compensable leave ia the City's liability for all unused vacation and sick leave and unpaid overtime accrued by employees and, payable under specified conditions. This obligation in paid only at the time of termination, usually from the same funding noume(s)from which the employee's salary orwage compensation was paid. The City does not report a liability for termination benefits because it is not reasonably estimable. Tukwila Urban Access Improvement Project Local Improvement District (J[)No. 33was formed onNovember 10. 20O3byOrdinance No. 22OO. The project was designed 0oimprove congestion within the City's Urban Center. The project included a partial lid over Southcenter Parkway, removal of conflicting turning movements, and the widening nfSnuthcen0er 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 e*emo|, 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 edraw method atoninterest rate of1.8O%. This loan was repaid in2O13when special assessment bonds were issued. Washington State Auditor's Office Page 99 CITY OF TUKWILA: 2015 CAFR NOTES TO THE FINANCIAL STATEMENTS 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 second of 15 annual installments for the assessments was due by October 16, 2015. As of December 31, 2015, all LID Special Assessments were current, nothing was delinquent. During 2015, several property owners chose to pay the assessment in full. Because of the additional principal payments received, the City has enough funds in the LID No. 33 funds to meet debt service requirements in 2016 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, 2015 is $0 for its tax-exempt bond issues subject to the Tax Reform Act. Ilk150dme] J,IJh11iiIFilXc �1 Property Sale Commitment. In December 2014, the City agree 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, 2015, the City share of contractual obligations on construction projects total $5,101,710. 42nd A\e S Phase III/Gilliam Creek SSWM $ 222,326 53rd A\,e S Street Impro\ements 498,991 42nd A\e S Roadside Barriers 107,383 Interurban Aoe S 1,525,419 Tukwila Urban Center - Pedestrian/Bicyle Bridge 90,306 TUC Transit Center 282,937 Ando\,er Park W Street/Water 381,931 Duwamish Gardens 1,449,884 Other go\,emmental projects 75,426 Macadam Water Upgrade $ 114,664 Andover Park East Water/Sewer 101,144 East Marginal Way South Storm Pipe Replacement 204,380 Other Utility related projects 46,920 Washington State Auditor's Office Page 100 B-100 CITY OF TUKVVILA: 2015CAFR NOTES TO THE FINANCIAL STATEMENTS 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. NOTE 13 — RISK MANAGEMENT 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 179 Members. 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. Liabilit�t, coverk7e is written on an occurrence basis without deducti police, public officials' errors or omissions, stop gap, and employee benefits liability. Limits are $4 million per occurrence self-insured layer, and $16 million per occurrence in the re -insured excess layer. The excess layer is insured by the purchase of reinsurance and insurance and is subject to aggregate limits. Total limits are $20 million per occurrence subject to aggregate sublimits in the excess layers. The Board of Directors determines the limits and terms of coverage annually. Insurance covera ut H !2hxfsical damao lit)�, inland marine, and boiler qnd m*_chin_ery_*mQ damage are self-funded from the members' deductible to $750,000, for all perils other than flood and earthquake, and insured above that amount by the purchase of insurance. In-house services include risk management consultation, loss control field services, claims and litigation land use problems, insurance brokerage, and lobbyist services. Rlig gi 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 9overns WCIA which as comv.,rised of one desiynated reyresentative from each mzm�_e_x_Th_t_ Board elects an Executive Committee and appoints a Treasurer to provide general policy direction for the organization. The WCIA Executive Director reports to the Executive Committee and is responsible for conducting the day to day operations of WCIA. Washington State Auditor's 0ffice Page 101 B -1U1 CITY OF TUKVAL& 2015CAFR NOTES TO THE FINANCIAL STATEMENTS The City insures its buildings, equipment, and vehicle property insurance with WCIA. They self-fundup0o$25O.00O 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 ininsurance coverage inthe past year. During the year under audit and inthe past three years, nosettlement has exceeded insurance coverage. The City self -insures for unemployment benefits. This is budgeted each year and has not exceeded $60.000 per year. 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 o stop -loss policy with Sun Life Insurance Company, which provides individual limits uf$175.000and nplan limit of$8.273.754in2Oi5.Each fund contributes on appropriate amount each year to pay premiums and claims. Liabilities include an eotueha||y determined amount for claims that have been incurred but not reported (IBNR's) and a contingency reserve equal 0o2.5times the IBNR reserve. The IBNR liability is estimated using actuarial methods. Based on results as well as o review of actual mn+mL average lag days nf00.0days for medical, 10.3days for pharmacy, 32.1 days for dental, and 392days for vision were selected. Using average lag days and net adjusted paid claims, the IBNR liability was estimated as of June 3O.2015. Next, the estimated IBNR liability as of December 31, 2015 was developed by trending the June 30, 2015 estimates tnyoar-end. No explicit margin for claims fluctuations was added because the amount of the reserve in the fund balance iosufficient tocover expected claims fluctuations. Administrative costs were then added. The following table reflects changes inthe balances ofclaims liabilities for 2O15and 2O14. Claim Liabilities at Beginning of Year $ 2,260,000 $ 1,669,250 $ 285,750 $ 214,250 Claim expenses: Current year and changes inestimates 5.501.504 0.633.189 134.050 959.835 Claim payments and expenses (5,874,004) (6,042,449) (198,550) (888,335) The City nfTukwila recorded aChange inAccounting Principle concerning calculating depreciation in the Golf Course fund. Previously, depreciation was calculated using the composite depreciation method. |n2O15.the City changed to the straight line depreciation method, which is the method utilized by the City's other enterprise funds. The change in depreciation method resulted in recording $757,473 in additional depreciation for prior years. Washington State Auditor's 0fic, Page 102 CITY OF TUKWILA: 2015 CAFR NOTES TO THE FINANCIAL STATEMENTS The City also implemented Governmental Accounting Standards Board Statement 68, Accounting and Financial Reporting for Pensions (see Note 9, Pension Plans). On a government -wide basis, this change in accounting principle resulted in a reduction of beginning fund balance for governmental activities of $9,551,003 and of $2,308,254 for the business -type activities. In 2014, the cities of Tukwila, SeaTac, and Des-*oines signed an interlocal agreementjf,�) creating a Tourism Promotion Area (TPA) to encompass the geographical boundaries of the three cities. The TPA was set up so that the City of SeaTac would serve as the legislative body for the TPA. Th ii f T kwila beaan operating Seattle Southside Visitor Services (SSVS) in 2002. SSVS was resr)ons*bl f ITO Imme META; 4 F 0 '01r1W4r=-- Yffe-k--Tq, ui 1 yK,:rJJa e1J1pJU3ree.5 iFnU'1TUFKeU Tor OOTO a551MeU terminated most on the contracts executed for the benefit of SSVS. The City of Tukwila has no obligations or liabilities associated with the operations of SSRTA. I i . All & as will 1i soAj All W1.1 16 WW. IWIOU toy fl"191 "WOWAM" WA .. A111 _I kll Sig with the cities of Des Moines and SeaTac, Tukwila intends to provide some lodging tax funds to SSRTA. The transition of SSVS to SSRTA will have no impact on the collection of lodging tax funds. The City still retains authority in the collection of the funds and how they are dispersed (subject to the limitations in State law). The transition of SSVS to SSRTA relieves the City of significant financial obligations. The transition of SSVS to SSRTA will cause a small impact to the general fund. The cities of Des Moines and SeaTac contributed over $800,000 a year to the operation of SSVS. The intergovernmental funds resulted in the City's lodging tax being charged approximately $97,925 in indirect cost allocations. Now that these intergovernmental funds are no longer going to come to the City, the indirect charge for 2016 is estimated to be approximately $35,000. It should be noted that the termination of operating SSVS will also result in a significant reduction in costs to the City to support overnight tourism. Washington State Auditor's Office Page 103 B-103 CITY OF TUKWILA 2015 CAFR REQUIRED SUPPLEMENTAL INFORMATION CITY OF TUKWILA, WASHINGTON SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL r FOR THE YEAR ENDED DECEMBER 31,2015 Taxes $ 42,301,943 $ 44,424,639 $ 45,201,369 $ 776,730 Licenses and pernits 2,105,089 2,255,089 2,242,256 (12,833) Intergovernmental 4,648,899 4,972,499 4,626,463 (346,036) Charges for services 2,392,787 2,464,537 2,896,446 431,909 Fines and Foreitures 242,829 242,829 261,457 18,628 Investment earnings 86,052 126,052 163,618 37,566 Miscellaneous 97,788 97,788 120,887 23,099 EXPENDITURES: Current: General Government 7,971,301 7,421,301 7,247,117 174,184 Public Safety 27,696,295 29,092,569 28,973,651 118,918 Physical environment 2,002,906 1,952,906 1,919,306 33,600 Transportation 3,066,264 2,866,264 2,820,022 46,242 Economic environment 4,445,449 4,470,221 4,328,177 142,044 Culture and recreation 4,092,425 4,265,425 4,259,532 5,893 Capital outlav 39,040 226,040 196,589 29,451 OTHER FINANCING SOURCES (USES): Bond proceeds Transfers in Transfers out 2,200,000 1,300,000 500,000 (800,000) (4,959,846) (6,083,846) (5,433,846) 650,000 Net change in fund balances 1,861 (495,139) 834,256 1,329,395 Fund balances - beginning 15,200,000 15,881,000 17,496,550 1,615,550 Washington State Auditor's Once B-104 Page 104 CITY OF TUKWILA: 2015 CAFR REQUIRED SUPPLEMENTAL 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 2t the end •i the biennium. The City of Tukwila's budget procedures are mandated by RCW 35A.33. The steps in the budget process ar- • • ollo 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. budget as approved by the City Council. 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. Fconomic Environment Reflects the planning and building inspection activities. A the dates indicated. Washington State Auditor's Office Page 105 B-105 CITY OF TUKWILA: 2015 CAFR REQUIRED SUPPLEMENTAL INFORMATION COST SHARING MULTIPLE EMPLOYERDEFINED BENEFIT PENSION V ► • ► PERS I December 31, 2015 0.135736% $ 7,100, 255 $ - $ 7,100, 255 $ 15, 561, 016 45.63% b9.1 U Uecem ber 31, 2U1 U.1 13b92% $ 0,2U4b41 $ - $ b,2U2,541.UU $ 1b,4U0,b89.UU 4U. 20"/0 by, LU/0 Uecem bar 3l, 2U1b U.Ub2f48"/o $ 9,028 $ - $ 9,1126 $ 104,420 0.23% a0. Utl/ Uecem ber 3l, 2U16 U. U f944% $ (939,39/) $ - $ (9:59,39/) $ /0,144 -1233./l"/0 12/.3070 December 31, 2015 0.519159% $ (5,335,916) $ (2,123,832) $ (/,459,/48) $ 15,113,23/ -49.36% 111.0/"/0 Until a full 10 -year trend is compiled, governments should present information only for those years for Mich information is available. Washington State Auditor's Office Page 106 B-106 CITY OF TUKWILA: 2015 CAFR REQUIRED SUPPLEMENTAL INFORMATION CONTRIBUTIONS UCRy December 31, 2015 $ 686,881 $ (686,881) $ - $ 15,654,255 4.39% December 31, 2015 $ 873,248 $ (873,248) $ - $ 15,498,171 5.63% December 31, 2015 $ 10,105 $ (10,105) $ - $ 156,084.0 6.47% December 31, 2015 $ - $ - $ - $ 25,679 0.00% I#��333'7 December 31, 2015 $ 776,719 $ (776,719) $ - $ 15,380,541 5.05% " Until a full 10 -year trend is compiled, governments should present information only for those years for which information is available. Washington State Auditor's Office Page 107 B-107 CITY OF TUKWILA: 2015 CAFR REQUIRED SUPPLEMENTAL INFORMATION FYN:I 9INIM00, ►1�IRIhL • : � t� �Y Washington State Auditor's Office Page 108 B-108 CITY OF TUKWILA: 2015 CAFR REQUIRED SUPPLEMENTAL INFORMATION Administrative expense Other - 1 (4.500)- Net change in plan fiduciary net position 4,056 3,481 Plan fiduciary net position — beginning 1,408,970 1,413,026 Plan fiduciary net position — ending (b) 1,413,026 1,416,506 City's net pension liability — ending (a) — (b) 427,903 413,420 Plan fiduciary net position as a percentage of 76.76% 77.41% the total pension liabirity December 31.2O1O 49.989 Covered -employee payroll n/a December 31.2O11 City's net pension liability as a percentage of 54.885 n/a The following assumptions were changed as of 1M/2014: discount naha changed to 2.75%, salary increases changed to 37596. CPI changed to 2.75%, mortality tables updated to RP -2014 with Scale KAP -2014 projections. These changes toassumptions and experience differences increased liabilities approximately $567,000. GASB 67, Financia/ Reporting for Pension Plans, was adopted an of January 1. 2014. therefore liabilities were fresh - started December 31.2OOS $ 45,051 $ 45,951 $ $ ' n/a December 31.2O07 50.555 50.555 n/a December 31.2O08 52.571 52.571 - - n/a December 31.2009 48,537 48,537 n/a December 31.2O1O 49.989 49.989 n/a December 31.2O11 54.865 54.885 n/a December 31.2O12 52.249 52.249 n/a December 31.2018 56.902 56.902 n/a December 31.2U14 64.114 04.114 n/a December 31.2O15 63.590 03.590 n/a Washington State Auditor's QJJice Page 109 B-1OQ CITY OF TUKWILA: 2015 CAFR REQUIRED SUPPLEMENTAL INFORMATION Notes bmSchedule: Contributions are a portion of State Fire Insurance Premiums. Notes tnSchedule: Ten-year schedule required. However, until a full 1 0 -year trend is compiled, information is presented for those years where information is available. The key actuarial assumptions used for the January 1.2O15valuation were: Actuarial Valuation Date January 1.2O13 Actuarial Cost Method Entry Age Asset Valuation Method Measurement Date Fair Market Value January 1.2015 VVebased the long-term expected rate ofreturn cmpension plan investments assumption onthe nature and mix of current and expected pension plan assets over eperiod cf Discount Rate (or Investment Return) time representative nfthe expected length oftime between |the first day ofservice and date ofthe last benefit payment. (The rate of2.7596was selected. Cost of Living 2.75%, based on SSA OASDI 2014 report. Salary Increases (for calculated / 37596 bmoedonSSAOA�02O14napo� bene�tincreases based onrank) i � ' � RP-2O14mortality table, total dataset, fully generational with Healthy Mortality mortality improvement scale [NP-2Oi4setback one year for males and set forward one year for females. Washington State uvaw, Office Page 110 B-1 10 CITY OF TUKWILA: 2015 CAFR REQUIRED SUPPLEMENTAL INFORMATION RP -2014 mortality table, total dataset, fully generational with Disabled Mortality mortality improvement scale MP -2014 set forward two years for males and females. ... . ................ . - .............. . . . ........... .... . .......... . . ........... . . ............... . . ......... We assumed that wives are three years younger than Spouse Age husbands. Under the Firemen's Pension Trust fund, most adjustments are based on the change in salary far -t -he rank of members held at retirement or based on the Consumer Price Index. Adjustments are determined in accordance with RCW 41.18.150. RCW 41.20 and VGAV 41.26 Washington State Auditor's Office Page III -111 CITY OF TUKWILA: 2015 CAFR REQUIRED SUPPLEMENTAL INFORMATION SCHEDULE OFFUNDING PROGRESS (Rounded to thousands) January 1. 2008 $O $16.103 $16.103 0Y6 $581 4% January 1.2O11 O 14.805 14.805 O 371 3 January 1.2014 0 21.284 21.264 O 195 1 January 1.2015 0 29.530 28.538 O 132 O December 31.2OD8 $557.103 $1.380.284 41% December 31.20O& $335265 $1.368.204 25 December 31.2O1O 317.771 1.366.284 23 December 31.2011 335.090 1.264.522 26 December 31.2O12 404.007 1.264.522 32 December 31.2O13 878.755 1.264.522 89 December 31.2O14 905,974 1.003.678 48 December 31.2O15 477,292 2.585.773 18 r -TERM CARE BENEFITJ XETIREE MEDICAL AND LONG Assumption Rates Actuarial Cost Method Entry Age Normal method. Measurement Date January 1, 2015 Discount Rate (or Investment Selected the assumed discount rate of 2.75% based on the five - Return) year average investment yield on the investments expected to finance the payment of benefits. Healthy Mortality RPH-2014 mortality table (headcount weighted), total clataset, fully generational with mortality improvement scale MP -2014 setback one year for males and set forward one year for females. Washington State Auditor's Office Page 112 B-1 12 CITY OF TUKWILA: 2015 CAFR REQUIRED SUPPLEMENTAL INFORMATION 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. 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 The City reimburses Medicare retirees for Part B premiums. The Reimbursements 2015 annual premium is $1,258.80. Affordable Care Act (ACA) Ages 55-64 All Other Excise Tax Threshold 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 _rMedical Long -Term Trends* from Getzen SOA Model version 2014 b using baseline assumptions. Exdse pro- Part B ImT-Term Tax Year MAdkare MedIcare Dentat visim Premiums C"e TbrestmAd 2GI5 9.00% &50% 5.5% 4.0% 5.4% 5.0% 0.00% 2016 7.50% &50% 5.0% 4.0% 5.4% 5.0% 0.00% 2017 6.50% 6.00% 4.5% 4.0% 5.4% 5.0% 0.00% 2018 5.50% 5M% 4.0% 4.0% 5.4% 5.0% 4.24% 2019 5.50% 5.50% 3.5% 3.5% 5.4% 5.0% 3.24% 2020 5.46% 5.46% 3.5% 3.5% 5.4% 5.0% 3.24% 2021-2074 - 3.5% 3.5% 5.4% 5.0% 3.24X 2075+ 3.W% 3480% 3.5% 3.5% 5.4% 5.0% 3.24% * The trend rates inctude assumed kMation of 3% for att future years. Washington State Auditor's Office Page 113 B-113 MCAG NO. 0447 CITY OF TUKWILA Schedule 16 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For the Year Ended December 31, 2015 City of Tukwila, Washington Schedule of Expenditures of Federal Awards For Year Ended December 31, 2015 The accompanying notes to the Schedule of Expenditures of Federal Awards are an integral part of this schedule. Washington State Auditor's Office Page 114 B-114 2 3 4 5 6 Expenditures Federal Agency Federal Program CFDA Other I.D. From Passed Foot - Name I Pass- Name Number Number Pass- From Through To note Through Agency Through Direct Total Subrecipients Ref. Name Awards Awards U.S. Dept of Agriculture Child & Adult Care 10.558 17141471 1,226.40 $ 1,226.40 $ / pass-through from Food Program Off of Superintendent of Public Instruction U.S.Dept of Agriculture Cooperative Forestry 10.664 IAA -14-042/K244-12- 4,700.00 4,700.00 / pass-through from Assistance DG -018 WA St DNR I I U.S.Dept of Housing Community 14.218 5824592 993.17 993.17 & Urban Development Development Block / pass-through from Grant 5719835 92,905.26 92,905.26 King County Housing & Comm Development Subtotal 93,898.43 93,898.43 U.S.Dept of Justice State Criminal Alien 16.606 2015 -AP -BX -0834 $ 2,029.00 2,029.00 Assistance Frog U.S.Dept of Justice Bulletproof Vest 16.607 NA 6,796.89 6,796.89 Partnership Prog U.S.Dept of Justice Edward Byrne 16.738 2013 -DJ -BX -0715 4,840.42 4,840.42 pass-through from Memorial JAG City of Seattle Program 2014 -DJ -BX -1034 3,241.76 3,241.76 I Subtotal 8,082.18 8,082.18 U.S. Dept of Transpor- Highway Planning 20.205 STPUL-1045(007) 552,512.88 552,512.88 tation I pass-through and Construction Interurban Avenue S from WA DOT STPE-CM-1320(002) 514,205.29 514,205.29 Tuk Urb Ctr Ped/Bike BHM-1380(003) 333,443.43 333,443.43 Boeing Access Bridge BHM-1274(009) 231,944.18 231,944.18 Frank Zepp Prev Maint BHOS-1320(004) 115,087.60 115,087.60 Beacon Ave Pre Maint ER -1403(006) 92,616.43 92,616.43 1-5/Klickitat Dr -Slope SRTS-1320(003) 35,495.54 35,495.54 Thomclyke Safe Route BHM-1288(005) 31,623.51 31,623.51 Grady Wy Prev Maint GCB2135 4,500.00 4,500.00 Expans Urb Ctrs & DC Subtotal 1,911,428.86 1,911,428.86 The accompanying notes to the Schedule of Expenditures of Federal Awards are an integral part of this schedule. Washington State Auditor's Office Page 114 B-114 MCAG NO. 0447 CITY OF TUKWILA Schedule 16 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For the Year Ended December 31, 2015 The accompanying notes to the Schedule of Expenditures of Federal Awards are an integral part of this schedule. Washington State Auditor's Office B-115 Page 115 2 3 4 5 6 Expenditures From Federal Agency Federal Program CFDA Other I.D. Passed Foot - Name / Pass- Name Number Number Pass- From Through To note Through Agency Through Direct Total Subrecipients Ref. Name Awards Awards U.S. Dept of Transpor- Federal Transit 20.500 13-071 $ 670,069.58 $ 670,069.58 $ tation / pass-through Capital Investment Tukwila Transit Center from King County U.S.Dept of Transpor- State & Community 20.600 Distracted Driving 1,011.60 1,011.60 tation I pass-through Highway Safety from WTSC U.S.Dept of Transpor- State & Community Traffic Safety Equip. 2,859.59 2,859.59 tation / pass-through Highway Safety from WASPC Subtotal 3,871.19 3,871.19 U.S.Dept of Transpor- National Priority 20.616 King County Distract- 1,188.60 1,188.60 tation / pass-through Safety Programs ed Driving from WTSC Click It Or Ticket 476.56 476.56 I Subtotal 1,665.16 1,665.16 U.S. Environmental Puget Sound Action 66.123 14-63401-007 28,271.00 28,271.00 Protection Agency/ Agenda:Tech Inv & pass-through from WA Implementation St Dept of Commerce Assistance U.S.Dept of Health & Partnerships To 93.331 CDIP3908 20,859.48 20,859.48 Human Services/pass- Improve Community through Seattle & King Health CDIP4007 2,083.12 2,083.12 County Public Health Subtotal 22,942.60 22,942.60 U.S.Dept of Homeland National Urban 97.025 WA -TF1 1,408.95 1,408.95 Security / pass- Search & Rescue through from Pierce Response System County Emergency Management U.S.Dept of Homeland Emergency Mgmt 97.042 EMW-2014-EP-00033 58,652.24 58,652.24 Security / pass- Performance through from WA St Grants (EMPG) MqitaDe t. U.S.Dept of Homeland Assistance to Fire- 97.044 EMW-2013-FO-02617 1,340.00 1,340.00 Security fighters Grant U.S.Dept of Homeland Homeland Security 97.067 10,342.91 10,342.91 $ Security / pass- Grant Program through from City of Seattle TOTAL FEDERAL AWARDS EXPENDED $ 2,816,559.50 10,165.89 $ 2,826,725.39 $ The accompanying notes to the Schedule of Expenditures of Federal Awards are an integral part of this schedule. Washington State Auditor's Office B-115 Page 115 City of Tukwila, Washington FEDERAL AWARDS nru ki mm- mmkni vea"W.�_6 2015 For Year Ended December 31, 2015 basis of accounting as the City's financial statements. The City uses th accrual basis for proprietary funds. portion of the program costs. Actual program costs, including the City's portion, may be more than shown. Revenue from the Federal government Less: Retainage revenue recognized but not yet paid + rounding error Less: Direct Federal interest rate subsidies Less: Revenue recognized in 2015 but expended in prior years Expenditures of Federal awards I M 1011t;M&N .10 mu'R;I 114TITMORI I IN NIAM 11109111 111201AILVA 10147 '111 11 1& 1- -1 1 ^ I 1 10 , - $ 3,115,943.27 (188,058.19) (92,853.65) (8,306.04) $ 2,826,725.39 Washington State Auditor's Office Page 116 B-116 The State Auditor's Office is established in the state's Constitution and is part of the executil branch of state government. The State Auditor is elected by the citizens of Washington and sery four-year terms. We work with our audit clients and citizens to achieve our vision of government that works f citizens, by helping governments work better, cost less, deliver higher value, and earn greatl public trust. In fulfilling our mission to hold state and local governments accountable for the use of publs resources, we also hold ourselves accountable by continually improving our audit quality a operational efficiency and developing highly engaged and committed employees. I As an elected agency, the State Auditor's Office has the independence necessary to objectively perform audits and investigations. Our audits are designed to comply with professional standards as well as to satisfy the requirements of federal, state, and local laws. Our audits look at financial information and compliance with state, federal and local laws on the part of all local governments, including schools, and all state agencies, including institutions of higher education. In addition, we conduct performance audits of state agencies and local governments as well as fraud, state whistleblower and citizen hotline investigations. The results of our work are widely distributed through a variety of reports, which are available on our website and through our free, electronic subscription service. We take our role as partners in accountability seriously, and provide training and technic' assistance to governments, and have an extensive quality assurance program. I Contact information fort a State Auditor's Office Public Records requests PublicRecords@sao.wL.gov Main telephone (360) 902-0370 Toll-free Citizen Hotline (866) 902-3900 Websitewww.sao.wa.gov Washington State Auditor's Office Page 117 -117 I 6. Redemption notices will be sent to DTC. If less than all of the Bonds are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. 7. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Bonds unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. Un•- •. - e payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. I 1 11 MII 0 0 0 I It; I a k*41 LA a pr4 I MT -1-2 ON M • I MONT, 11 City of Tukwila 6200 Soutlicenter Boulevard Tukwila, WA 98188 1 4_xe�* Is. Peggy ?jLllv ingnce Director San Francisco, CA 94111-5432 tel 415 371-5000 reference no.: 1461865 r�ursuant to your request for an S&P Global Ratings rating on the above -referenced obligations, S&P Global Ratings has assigned a rating of "AA". S&P Global Ratings views the outlook for this rating as stable. A copy of the rationale supporting the rating is enclosed. This letter constitutes S&P Global Ratings' permission for you to disseminate the above -assigned ratings to interested parties in accordance with applicable laws and regulations. However, (Iii,ermission for such dissemination (other than to professional advisors bound by appropriate confidentiality arrangements) will become effective only after we have released the rating on standardandpoors.com. Any dissemination on any Website by you or your agents shall include t 6vk full analysis for the rating, including any updates, where applicable. To maintain the rating, S&P Global Ratings must receive all relevant financial and other information, including notice of material changes to financial and other information provided to us and in relevant documents, as soon as such information is available. Relevant financial and other information includes, but is not limited to, information about direct bank loans and debt and debt - like instruments issued to, or entered into with, financial institutions, insurance companies and/or other entities, whether or not disclosure of such information would be required under S.E.C. Rule l5c2-12 * You understand that S&P Global Ratings relies on you and your agents and advisors for the accuracy, timeliness and completeness of the information submitted in connection with the rating and the continued flow of material information as part of the surveillance process. Please send all information via electronic delivery to: pubfin statelocalgovtgspglobal.com. If SEC rule 17g-5 is applicable, you may post such information on the appropriate website. For any information not available in electronic fortnat or posted on the applicable website, Please send hard copies to: S&P Global Ratings Public Finance Department 55 Water Street PF Ratings U.S. (4/28/16) ME 11 lo* The rating is subject to the Terms and Conditions, if any, attached to the Engagement Letter applicable to the rating. In the absence of such Engagement Letter and Terms and Conditions, the rating is subject to the attached Terms and Conditions. The applicable Terms and Conditions are incorporated herein by reference. 'W 1111WO In rw &V-K61*J I I u I" a q 610 5 1 r! I I I IM32= .grOK90 "11TITISM714 Rrow-WOOTITAII I 1 - cc: Ms. Johanna Crane, Senior Financial Advisory Associate Public Financial Management, Inc. PF Ratings U.S. (4/28/16) • S&P Global Ratings Terms and Conditions Applicable To Public Finance Credit Ratings General. The credit ratings and other views of S&P Global Ratings are statements of opinion and not statements of fact. Credit ratings and other views of S&P Global Ratings are not recommendations to purchase, hold, or sell any securities and do not comment on market price, marketability, investor preference or suitability of any security. While S&P Global Ratings bases its credit ratings and other views on information provided by issuers and their agents and advisors, and other information from sources it believes to be reliable, S&P Global Ratings does not perform an audit, and undertakes no duty of due diligence or independent verification, of any information it receives. Such information and S&P Global Ratings' opinions should not be relied upon in making any investment decision. S&P Global Ratings does not act as a "fiduciary" or an investment advisor. S&P Global Ratings neither recommends nor will recommend how an issuer can or should achieve a particular credit rating outcome nor provides or will provide consulting, advisory, financial or structuring advice. Unless otherwise indicated, the term "issuer" means both the issuer and the obligor if the obligor is not the issuer. All Credit Rating Actions in S&P Global Ratings' Sole Discretion. S&P Global Ratings may assign, raise, lower, suspend, place on CreditWatch, or withdraw a credit rating, and assign or revise an Outlook, at any time, in S&P Global Ratings' sole discretion. S&P Global Ratings may take any of the foregoing actions notwithstanding any request for a confidential or private credit rating or a withdrawal of a credit rating, or termination of a credit rating engagement. S&P Global Ratings will not convert a public credit rating to a confidential or private credit rating, or a private credit rating to a confidential credit rating. Publication. S&P Global Ratings reserves the right to use, publish, disseminate, or license others to use, publish or disseminate a credit rating and any related analytical reports, including the rationale for the credit rating, unless the issuer specifically requests in connection with the initial credit rating that the credit rating be assigned and maintained on a confidential or private basis. If, however, a confidential or private credit rating or the existence of a confidential or private credit rating subsequently becomes public through disclosure other than by an act of S&P Global Ratings or its affiliates, S&P Global Ratings reserves the right to treat the credit rating as a public credit rating, including, without limitation, publishing the credit rating and any related analytical reports. Any analytical reports published by S&P Global Ratings are not issued by or on behalf of the issuer or at the issuer's request. S&P Global Ratings reserves the right to use, publish, disseminate or license others to use, publish or disseminate analytical reports with respect to public credit ratings that have been withdrawn, regardless of the reason for such withdrawal. S&P Global Ratings may publish explanations of S&P Global Ratings' credit ratings criteria from time to time and S&P Global Ratings may modify or refine its credit ratings criteria at any time as S&P Global Ratings deems appropriate. Reliance on Information. S&P Global Ratings relies on issuers and their agents and advisors for the accuracy and completeness of the information submitted in connection with credit ratings and the surveillance of credit ratings including, without limitation, information on material changes to information previously provided by issuers, their agents or advisors. Credit ratings, and the maintenance of credit ratings, may be affected by S&P Global Ratings' opinion of the information received from issuers, their agents or advisors. PF Ratings U.S. (4/28/16) Confidential Information. S&P Global Ratings has established policies and procedures to maintain the confidentiality of certain non-public information received from issuers, their agents or advisors. For these purposes, "Confidential Information" shall mean verbal or written information that the issuer or its agents or advisors have provided to S&P Global Ratings and, in a specific and particularized manner, have marked or otherwise indicated in writing (either prior to or promptly following such disclosure) that such information is "Confidential." S&P Global Ratings Not an Expert, Underwriter or Seller under Securities Laws. S&P Global Ratings has not consented to and will not consent to being named an "expert" or any similar designation under any applicable securities laws or other regulatory guidance, rules or recommendations, including without limitation, Section 7 of the U.S. Securities Act of 1933. S&P Global Ratings has not performed and will not perform the role or tasks associated with an "underwriter" or "seller" under the United States federal securities laws or other regulatory guidance, rules or recommendations in connection with a credit rating engagement. IMI , #1;WdrR6k4q11 I U1 UM THU1111ULIMI 11MOU MI -XI WI-Muctim 1rffff'ffTMT=TTg 11T Ine reSL11S ooTneu. Tiont Me Tse or silca -ri. S&P GLOBAL RATINGS GIVES NO EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE. S&P Global Ratings, its affiliates or third party providers, or any of their officers, directors, shareholders, of cause, actions, damages (consequential, special, indirect, incidental, punitive, compensatory, exemplary or otherwise), claims, liabilities, costs, expenses, legal fees or losses (including, without limitation, lost income or lost even if advised of the possibility of such damages or other amounts. No Third Party_ Beneficiaries. Nothing in any credit rating engagement, or a credit rating when issued, is intended or should be construed as creating any rights on behalf of any third parties, including, without limitation, any recipient of a credit rating. No person is intended as a third party beneficiary of any credit rating engagement or of a credit rating when issued. PF Ratings U.S. (4/28/16) WLN=11 � • 0 Sato 1114 Fjj�l Tukwila, Washington; General Obligation Primary Credit Analyst: Jennifer Hansen, San Francisco (1) 415-371-5035; jen.hansen@spglobal.com Secondary Contact: Satorni D Swuld, San Francisco (1) 415-371-5018; satomi.suzuld@spglobal.com WWW.STA NDARDANDPOORS.COM/RATISI RECT NOVEMBER 22, 2016 1 17611891 302253518 ICredit Profile US$31.39 mil unitd tax GO bnds ser 2016 dtd 12/15/2016 due 12/01/2036 Long Term Rating AA/Stable New Tukwila GO Long Term Rating AA/Stable Affirmed I , ` 17MIIIIIIT-79777 EMT -- 'Ur I (UTGO) bonds and affirmed its 'AA' rating on the city's outstanding 2015 limited -tax GO (LTGO) bonds. The outlook is stable. The UTGO bonds are full faith, credit and resources obligations of the city, including an ad valorem property tax pledge without limit as to rate or amount. The LTGO bonds are full faith, credit and resources obligations of the city, including an ad valorem property tax pledge within statutory and constitutional restrictions. We rate the LTGO bonds to the general obligation of the city given the strength of the city's financial position and tax base. firefighting apparatus and equipment, and constructing a justice center. I • Strong economy, with access to a broad and diverse metropolitan statistical area (MSA); • Strong management, with good financial policies and practices under our Financial Management Assessment (FMA) methodology; • Adequate budgetary performance, with an operating surplus in the general fund but an operating deficit at the total governmental fund level in fiscal 2015; • Very strong budgetary flexibility, with an available fund balance in fiscal 2015 of 34% of operating expenditures; • Very strong liquidity, with total government available cash at 50.2% of total governmental fund expenditures and 9.7x governmental debt service, and access to external liquidity we consider strong; • Adequate debt and contingent liability position, with debt service carrying charges at 5.2% of expenditures and net direct debt that is 97.8% of total governmental fund revenue, as well as low overall net debt at less than 3% of market value, but significant medium-term debt plans; and; and • Adequate institutional framework score. Strong economy We consider Tukwila's economy strong. The city, with an estimated population of 19,80 1, is located in King County in the Seattle -Tacoma -Bellevue, Wash. MSA, which we consider to be broad and diverse. The city has a projected per capita effective buying income of 78.4% of the national level and per capita market value of $272,477. Overall, the WWW.STANDARDANDPOORS.COM/RATINGSDI RECT NOVEMBER 22, 2016 2 1761189 1302253518 city's market value grew by 6.8% over the past year to $5.4 billion in 2016. The county unemployment rate was 4.4% in 2015. Tukwila is located 12 miles south of downtown Seattle and 17 miles north of Tacoma. The city is home to the Ulp.stfipld Snuftep-tteAmWall- tie lar est *o -fing� center in the Pacific Northwest. Tukwila is a maior retail, commercial, the largest landowner in the city and accounts for over 10% of assessed value. Strong management We view the city's management as strong, with good financial policies and practices under our FMA methodology, indicating financial practices exist in most areas, but that governance officials might not formalize or monitor all of them on a regular basis. The city compares prior years'budget-to-actuals and considers inflationary increases when building its budgets. The city also consults outside economists at the state level for revenue guidance. The city presents quarterly budget -to -actual updates to its council along with quarterly investment reports to the finance and safety committee. revenue and expenditure assumptions and are updated annually. The city has a 18% reserve policy for cash flow Cpurposes. In 2014, the city adopted a debt policy which while, comprehensive, does not address variable rate debt. Adequate budgetary performance of 1.7% of expenditures, but a deficit result across all governmental funds of negative 2.0% in fiscal 2015. The city has posted general fund surpluses in the last two years. The city's revenues have benefited from large revenue source, at 43%, followed by property taxes, at 32%. Based on the city's recent performance and balanced budgets over the next few years, we believe that the city's performance is likely to remain adequate. Very strong budgetary flexibility Tukwila's budgetary flexibility is very strong, in our view, with an available fund balance in fiscal 2015 of 34% of for the current and next fiscal years, which we view as a positive credit factor. W MMkM-W1XkW4 - does not have plans to spend reserves, we do not expect this to materially deteriorate in the near term. Very strong liquidity In our opinion, Tukwila's liquidity is very strong, with total government available cash at 50.2% of total governmental fund expenditures and 9.7x governmental debt service in 2015. In our view, the city has strong access to external liquidity if necessary. and municipal bonds. The city also invests in the State Treasurer's Local Government Investment Pool. We do not WWW.STANDARDANDPOORS.COM/RATINGSDIRECT NOVEMBER 22, 2016 3 1761189 1302253518 expect that liquidity will deteriorate over the near term. The city has a $2.25 million variable rate line of credit available which it has fully utilized to • some properties. The city plans to sell the properties and r••. the li • • Adequate debt and contingent liability profile In our view_ Tukwila's debt and contin-ent liabilitkyArorofile is ade�,�uate. Total governmental fund debt ;i;_rvic�; is 5.2% of total governmental fund expenditures, and net direct debt is 97.8% of total governmental fund revenue. Overall net debt is low at 2. 1% of market value, which is in our view a positive credit factor. Negatively affecting our view of the city's debt profile are its significant medium-term debt plans. This is the first issuance of a $77.4 million GO bond measure approved by voters in the Nov. 8, 2016, election. The city plans to issue an additional $25 million of the authorization in the next three years. Additionally, the city plans to issue $8.4 million of LTGO debt in the near term for street improvements. Lastly, the city plans to build a $29 million City Shops Facility as part of the city's Public Safety Facilities Plan. This construction was not part of the 2016 authorization and will be funded through a mix of LTGO debt and utility bonds. WIMIT—MIA P.Tir Me, total governmental fund expenditures in 2015. Of that amount, 3.5% represented required contributions to pension obligations, and 0. 7% represented OPEB payments . The city made its full annual required pension contribution in 2015. The city and its employees participate in defined benefit pension plans administered by the state under the Public Employees Retirement System (PERS) and Law Enforcement Officers'and Fire Fighters' Retirement System. Plans under these systems have fiduciary net positions ranging from 59% to 127% of their respective pension liabilities, will the largest by pension liability at 89% (PERS), which we consider adequate, as of June 30, 2015. Adequate institutional framework [elm rs MW reflects our view of the city's very strong flexibility and liquidity and strong management. Upside scenario not anticipate changing the rating during the outlooles two-year horizon. NOVEMBER 22, 2016 4 1761189 1302253518 * S&P Public Finance Local GO Criteria: How We Adjust Data For Analytic Consistency, Sept. 12, 2013 * Altemative Financing: Disclosure Is Critical To Credit Analysis In Public Finance, Feb. 18, 2014 * Incorporating GASB 67 And 68: Evaluating Pension/OPEB Obligations Under Standard & Poor's US. Loc,21 Govemment GO Criteria, Sept. 2, 2015 * 2015 Update Of Institutional Framework For US. Local Govemments Certain terms used in this report, particularly certain adjectives used to express our view on rating relevant factors, s levantfactor atjon is Please see Ratines Criteria at www.standardandpoors.com for further information. Complete ratings information is I j available to subscribers of RatingsDirect at www.globalcreditportal.com. All ratings affected by this rating action ca be found on the S&P Global Ratings'public website at www.standardandpoors.com. Use the Ratings search box located in the left column. WWW.STANDARDANDPOORS.COM/RATINGSDIRECT NOVEMBER 22, 2016 5 1761189 1302253518 Copyright @ 2016 by Standard & Poor's Financial Services LLC. All rights reserved. No content (including ratings, credit -related analyses and data, valuations, model, software or other application or output therefrom) or any part thereof (Content) may be modified, reverse engineered, reproduced or distributed in any form by any means, or stored in a database or retrieval system, without the prior written permission of Standard & Poor's Financial Services LLC or its affiliates (collectively, S&P). The Content shall not be used for any unlawful or unauthorized purposes. S&P and any third -party providers, as well as their directors, officers, shareholders, employees or agents (collectively S&P Parties) do not guarantee the accuracy, completeness, timeliness or availability of the Content. S&P Parties are not responsible for any errors or omissions (negligent or otherwise), regardless of the cause, for the results obtained from the use of the Content, or for the security or maintenance of any data input by the user. The Content is provided on an "as is" basis. S&P PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, FREEDOM FROM BUGS, SOFTWARE ERRORS OR DEFECTS, THAT THE CONTENT'S FUNCTIONING WILL BE UNINTERRUPTED, OR THAT THE CONTENT WILL OPERATE WITH ANY SOFTWARE OR HARDWARE CONFIGURATION. In no event shall S&P Parties be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs or losses caused by negligence) in connection with any use of the Content even if advised of the possibility of such damages. Credit -related and other analyses, including ratings, and statements in the Content are statements of opinion as of the date they are expressed and not statements of fact. S&P's opinions, analyses, and rating acknowledgment decisions (described below) are not recommendations to purchase, hold, or sell any securities or to make any investment decisions, and do not address the suitability of any security. S&P assumes no obligation to update the Content following publication in any form or format. The Content should not be relied on and is not a substitute for the skill, judgment and experience of the user, its management, employees, advisors and/or clients when making investment and other business decisions. S&P does not act as a fiduciary or an investment advisor except where registered as such. While S&P has obtained information from sources it believes to be reliable, S&P does not perform an audit and undertakes no duty of due diligence or independent verification of any information it receives. To the extent that regulatory authorities allow a rating agency to acknowledge in one jurisdiction a rating issued in another jurisdiction for certain regulatory purposes, S&P reserves the right to assign, withdraw, or suspend such acknowledgement at any time and in its sole discretion. S&P Parties disclaim any duty whatsoever arising out of the assignment, withdrawal, or suspension of an acknowledgment as well as any liability for any damage alleged to have been suffered on account thereof. S&P keeps certain activities of its business units separate from each other in order to preserve the independence and objectivity of their respective activities. As a result, certain business units of S&P may have information that is not available to other S&P business units. S&P has established policies and procedures to maintain the confidentiality of certain nonpublic information received in connection with each analytical process. S&P may receive compensation for its ratings and certain analyses, normally from issuers or underwriters of securities or from obligors. S&P reserves the right to disseminate its opinions and analyses. S&P's public ratings and analyses are made available on its Web sites, www.standardandpoors.com (free of charge), and www.ratingsdirect.com and www.globalcreditportal.com (subscription) and www.spcapitaliq.com (subscription) and may be distributed through other means, including via S&P publications and third -party redistributors. Additional information about our ratings fees is available at www.standardandpoors.com/usratingsfees. STANDARD & POORS, S&P and RATINGSDIRECT are registered trademarks of Standard & Poor's Financial Services LLC. 1111 "1171" 11) •0 I'llel"i NOVEMBER 22, 2016 6 1761189 1302253518 rK 0 CITY OF NYWILA, WASA1AGTGLV IN-asne of Luver' October 18, 1999 9 I The Depository Trust Company 55 Water Street, 50th Floor '.New York, INY 10041- 0099 I M. RTV "I. This letter sets forth our understanding with respect to all issues �.the "Securities-) that Issuer shall request be made eligible for deposit.by The Depository Trust CompaDTC"). To induce DTC to accept the Securities as eligible for deposit at DTC. and to act in accordance with Issuer Ir to with the requirements stated in DTC's Operational n• n+ as they may be amended Erom tirne to time. 92•� City of Tukwila, -Washington 200 Southcenter Boulevard am - (City) (Stft) (zip) (206) 433-1800 (To Blanket Issuer Letter of Representations) SA_MPLE OFFERING DOCUMENT IANGUAGE DESCRIBING BOOK -ENTRY -ONLY ISSUANCE ,Prepared b DTC—bracketed material may be applicable only to certain issuel • Securities are to be accomplished bv entries made on the books of Participants acting on behalf of in Securities, except in the event that use of the book -entry system for the Securities is discontinued. 4. To facilitate subsequent transfers, all Securities deposited by Participants with DTC are registered in the name of DTCs partnership nominee, Cede & Co. or such other name as requested by an authorized representative of DTC. The deposit of Securities with DTC and their registration in the name of Cede Co. or such other DTC nominee do not effect an;v change in beneficial ownership. be the Beneficial Owners. The Participants will remain responsible for keeping account of their holdings on behalf of their customers. • • ' • • � • M A' - �' + • � • • • � � • • r - •- • • � • ♦ + • •, ••• 1 r + • •- � + • • - • ! •: ! • ••• • r • ! • • • • - r- +R r -• • +:. • •• - • • R • . R. • • • - s • • - • -• •• + • •, s ! ;•. e• • •iii ! • r + + • #. ' ,' ' !I ••( This Continuing Disclosure Certificate (this "Certificate") is executed and delivered by the City of Tukwila, Washington (the "Cityin connection with the issuance by the City of its Unlimited Tax General Obligation Bonds, 2016 (the "Bonds") pursuant to Ordinance No. 2514 of the City Council, adopted on November 21, 2016 (the "Bond Ordinance"). Pursuant to the Bond Ordinance, the City hereby covenants and agrees as follows: Section 1. Pgoose of this Certificate. This Certificate is being executed and delivered by the City for the benefit of the holders and beneficial owners of the Bonds and in order to assist the ParticiDatini! Underwriter in COITIDIving with �-r Section 2. Definitions. In addition to the definitions set forth herein, in the Bond Ordinance or in the Official Statement, which apply to any capitalized term used in this Certificate unless otherwise defined herein, the following capitalized terms shall have the following meanings: Commission means the Securities and Exchange Commission. �M P Participating Underwriter means the original underwriters of the Bonds required to comply with the Rule in connection with offering the Bonds. ,Rule means Section (b)(5) of Commission's Rule 15c2-12 under the Securities Exchange Act of 1934, as the same may be amended from time to time. WAT.r.m. I Mrs (a) Financial StatementslOperating Data. The City agrees to provide or cause to be provided to the MSRB, the following annual financial information and operating data for the prior fiscal year (commencing in 2017 for the fiscal year ended December 31, 2016): (1) Annual financial statements, which statements may or may not be audite, showing ending fund balances for the City's general fund prepared in accordance with t Budgeting Accounting and Reporting System prescribed by the Washington State Audit pursuant to RCW 43.09.200 (or any successor statute) and generally of the type included in t official statement for the Bonds; (2) Principal amount of general obligation debt outstanding at the end of the applicable fiscal year; (3) Assessed valuation of taxable property in the City for that fiscal year; and (4) Property tax levy amounts and rates for that fiscal year. M 10076 00002 fk04fd42S8 Ftems 2-4 shall be required only to the extent that such information is not included in the annual financial statements. The information and data described above shall be provided on or before the end of nine months after the end of the City's fiscal year. The City's fiscal year currently ends on December 3 1. The City may adjust such fiscal year by providing written notice of the change of fiscal year to the MSRB. In lieu of providing such annual financial information and operating data, the City may cross refer to other documents available to the public on the MSRB's internet website or filed with the Commission. If not provided as part of the annual financial information discussed above, the City shall provide the City's audited annual financial statement prepared in accordance with the Budgeting Accounting and Reporting System prescribed by the Washington State Auditor pursuant to RCW 43.09.200 (or any successor statute) when and if available to the MSRB. (b) Listed Events. The City further agrees to provide or cause to be provided to the MSRB, in a timely manner not in excess of 10 business days after the occurrence of the event, notice of the occurrence of any of the following events with respect to the Bonds: • Principal and interest payment delinquencies; • Non-payment related defaults, if material; • Unscheduled draws on debt service reserves reflecting financial difficulties; • Unscheduled draws on credit enhancements reflecting financial difficulties; • Substitution of credit or liquidity providers, or their failure to perform; • Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701- TEB) or other material notices or determinations with respect to the tax status of the Bonds, or other material events affecting the tax status of the Bonds; • Modifications to the rights of Bondholders, if material; • Optional, contingent or unscheduled Bond calls other than scheduled sinking fund redemptions for which notice is given pursuant to Exchange Act Release 34-23856, if material, and tender offers; • Release, substitution, or sale of property securing repayment of the Bonds, • Rating changes; • Bankruptcy, insolvency, receivership or similar event of the City; • The consummation of a merger, consolidation, or acquisition involving the Ci or the sale of all or substantially all of the assets of the City, other than in t ordinary course of business, the entry into a definitive agreement to underta such an action or the termination of a definitive agreement relating to any sucl actions, other than pursuant to its terms, if material; and • Appointment of a successor or additional trustee or the change of name o I trustee, if material. 1007600002fk04fd42s8 Section 4. Notification Upon Failure to Provide Financial Data The City agrees to provide or cause to be provided, in a timely manner, to the MSRB notice of its failure to provide the annual financial information described in above on or prior to the date set forth in above. Section 5. EMMA; Format for Filings with the MSRB. Until otherwise designateii, by the MSRB or the Commission, any information or notices submitted to the MSRB in compliance with the Rule are to be submitted through the MSRB's Electronic Municipal Market Access system ("EMMA"), currently located at www.emma.msrb.org. All notices, financial information and operating data required by this undertaking to be provided to the MSRB must be in an electronic forinat as prescribed by the MSRB. All documents provided to the MSRB pursuant to this undertaking must be accompanied by identifying information as prescribed by 6,e WSRB. Section 6. Termination/Modification. The City's obligations to provide annu. financial information and notices of listed events shall terminate upon the legal defeasance, pri redenif,wition or Ltagiment in full of all of the Bonds. A rovision of this undertaking shall be n] and void if the City (1) obtains an opinion of nationally recognized bond counsel to the effe that the portion of the Rule that requires that provision is invalid, has been repealed retroactive or otherwise does not apply to the Bonds and (2) notifies the MSRB of such opinion and t cancellation of all or any portion of this undertaking. I Notwithstanding any other provision of this certificate, the City may amend this undertaking with an opinion of nationally recognized bond counsel in accordance with the Rule. In the event of any amendment of this undertaking, the City shall describe such amendment in and its impact on the type (or in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the City. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, (i) notice of such change shall be given in the same manner as for a listed event under Subsection (b), and (ii) the annual report for the year in which the change is made shall present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as X-evared on the basis of the new accounting 'Orincivles and those ymepared on the basis of the former accounting principles. Section 7. Bond Owner's Remedies. The right of any bondowner or beneficial owner of Bonds to enforce the provisions of this undertaking shall be limited to a right to obtain specific enforcement of the City's obligations under this undertaking, and any failure by the City to comply with the provisions of this undertaking shall not be an event of default with respect to the Bonds. For purposes of this Certificate, "beneficial owner" means any person who has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds, including persons holding Bonds through nominees or depositories. Section 8. Dissemination Agent. The City may, from time to time, appoint or engage a dissemination agent to assist it in carrying out its obligations under this Certificate, and may discharge any such dissemination agent, with or without appointing a successor dissemination agent. N 10076 00002 fk04fd42s8 m 10076 00002fk04fd42s8 P,, . -))/- C '/' a Peg arthy, Finan&Director 0 We, ALLAN EKBERG and CHRISTY O'FLAHERTY, the Mayor and City Clerk, respectively, of the City of Tukwila, Washington (the "City"), do hereby certify that the [1171W* M sit NO I Nim a P, I so so I PRO 10711 S The Bonds are dated December 22, 2016, are in the aggregate principal amount $32,990,000, are designated the "City of Tukwila, Washington, Unlimited Tax Gener Obligation Bonds, 2016," are issuable in denominations of $5,000 or any integral multip thereof (provided that no bond represents more than one maturity), are payable as set forth Ordinance No. 2514 of the City passed on November 21, 2016, at the following interest rates a mature on December 1 of the following years in the following principal amounts: I Maturity Year Principal aunt Interest Rate 2017 $1,115,000 5.00% 2018 1,240,000 5.00 2019 1,370,000 5.00 2020 310,000 5.00 2021 400,000 5.00 2022 1,005,000 5.00 2023 1,340,000 5.00 2024 1,490,000 5.00 2025 1,560,000 5.00 2026 1,640,000 5.00 2027 1,720,000 5.00 2028 1,810,000 5.00 2029 1,895,000 5.00 2030 1,990,000 5.00 2031 2,090,000 5.00 2032 2,200,000 4.50 2033 2,295,000 4.50 2034 2,395,000 4.50 2035 2,505,000 4.50 2036 2,620,000 4.50 Signature 10076 00002 fm144228yn am City Clerk STATE OF WASHINGTON) ) ss. COUNTY OF KING On this day of December, 2016, before me, the undersigned, a Notary Public in • • the State • Washington, duly commissioned and sworn, personally appeared ALLAN EKBERG, to me known to be the Mayor of the City of Tukwila, Washington, described in and • executed the within and foregoing instrument; and acknowledged to me that he signed said instrqk*W0*%Fjkee and voluntary act and deed for the uses and purposes therein mentioned. QN, '*' jV Z L2 55- Natary Public [Seu4 or SWPA [Printed Name] My appointment expires: P- 0 P WA Or STATE OF WASHINGTON) ) ss. COUNTY OF KING *n this c), 1 day of December, 2016, before me, the undersigned, a Notary Public in and for the State of Washington, duly commissioned and sworn, personally appeared CHRIST"' O'FLAHERTY, to me known to be the City Clerk of the City of Tukwila, Washington, describ in and who executed the within and foregoing instrument; and acknowledged to me that s e signed said instrument as her free and voluntary act and deed for the uses and purposes ther we-ttia-c 40 10076 00002 fm144228yn 0\- vie. 6Q, ni b - j- Notary Public \j T>- n , A [Printed Name] My appointment expires: Holli B. Van Valkenburg the duly chosen (PRINT OR TYPE NAME) qualified and acting Paralegal (POSITION) 19 FkVwfflffl. - • • ' DO HEREBY CERTIFY that on the 19th day of December, 2016, 1 mailed to the Secretary of State of the State of Washington, postage prepaid, certificates of manual signature in the form attached hereto ZE= MM 10076 00002 finl6gh285O Signature STATE OF WASHINGTON ) ss: COUNTY OF KING My name is Allan Ekberg (print or type) Mgyor-,--.. (title orposition) for Ci1y of Tukwila, Washington (name of municipality) imm IAM��H MIr-Itss" a' A -L" This affidavit is made to comply with 39.62.020 Revised Code of Washington (Ch. 86, Q,UBSCRIBED AND SWORN TO before me this o2I day of December, 2016. -Y-� NOTARYPUBLICin-11. ..--,Stateof Washington, residing at -T- L) Y--" '- k c - Printed Name: T>�-r� AIrv)V3z,-D61-czf� My Commission Expires: la -119- If Holli B. Van Valkenburg the duly chosen (PRINT OR TYPE NAME) qualified and acting Paralegal (POSITION) of the law firm *f Pacifica Law Grogp LLP U'- , I e ecretag Z q that on the rffff Ua 7—y UF -D= 5 1 m 1 0 5 e 0 - the State of Washington, postage prepaid, certificates of manual signature in the form attached hereto executed by the following officials: Um CHRISTY O'FLAHERTY City Clerk, City of Tukwila King County, Washington 10076 00002 fM16912819 rJOUNUM X P"�* r-'� Signature STATE OF WASHINGTON ) ss: COUNTY OF KING My name is Christy O'Flaherty (print or type) City Clerk (title or position) Cor City of Tukwila, Washington oil (name of municipality) IN= I x d4�1-po a2j-�4 - Signature C-1111 SUBSCRIBED AND SWORN TO before me this,:2 I day of December, 2016. -14A NOTARY PUBLIC in an r the Sta e of Z z IVVO *0 Washington, residing at Z Printed 0 My Commission Expires: .1 o-1 - I) — OF w It%\\ RMIN "M M, PIR 1111FIRMI "Ime 3MMM�Wlmmg�=,MWEMIMM mmm�� By c4' Title Trust Officer Authorized Sigder 11MIN oil I I OWN ffTIFII-T?,V-�--GEII-Eillf""-LE7@Tjl)uxj74N,", -JTS711Mf0 $32,990,000 M = -•= - � IN MCI 611 [KA11 I MOV -1110H Big] an MA a W&M M U91011 U.S. Bank National Association, fiscal agent for the State of Washingt (the "Registrar"), hereby certifies as follows: I (1) The Registrar hereby acknowledges receipt in Seattle, Washington, of following numbers of unauthenticated bonds of the following issue: I Number of Unauthenticated Bonds Bond Issue Received City of Tukwila, Washington, Unlimited Tax General 20 Obligation Bonds, 2016 - $32,990,000 (2) On the date hereof the Registrar authenticated and registered the City of Tukwila, Washington, Limited Tax General Obligation Bonds, 2016, in the aggregate principal amount of $32,990,000 (the "Bonds"), by manually executing the Certificate of Authentication and by entering the names and addresses of the Bond owners or their nominees in records maintained for such purpose and shall hold the Bonds on behalf of The Depository Trust Company. (3) All unauthenticated bonds delivered to the Registrar shall be held by it and sh-M be subject to the terms of the Agreement for Fiscal Agency Services dated as of February 2015, between the Washington State Finance Committee, as agent of the state of Washingto and U.S. Bank National Association (the "Fiscal Agency Contract"), and the duties obligations created therein. The Registrar shall be liable for the safekeeping thereof and for t ri,erformance of its duties and obligations as specifically set forth therein and for the actions I omissions of its agent(s). The Registrar shall act in good faith, and no implied duties obligations shall be incurred by the Registrar other than those specifically in the Fiscal Agen Contract. I Maturity Year Principal Amount Interest Rate CUSIP No. 2017 $1,115,000 5.00% 899052JV7 2018 1,240,000 5.00 899052J5 2019 1,370,000 5.00 899052JX3 2020 310,000 5.00 899052JYI 2021 400,000 5.00 899052JZ8 2022 1,005,000 5.00 899052KAI 2023 1,340,000 5.00 899052KB9 2024 1,490,000 5.00 899052C7 2025 1,560,000 5.00 899052KD5 2026 1,640,000 5.00 899052KE3 2027 1,720,000 5.00 899052KFO 2028 1,810,000 5.00 899052G8 2029 1,895,000 5.00 899052KH6 2030 1,990,000 5.00 899052J2 2031 2,090,000 5.00 899052KK9 2032 2,200,000 4.50 899052L7 2033 2,295,000 4.50 899052KM5 2034 2,395,000 4.50 899052KN3 2035 2,505,000 4.50 899052 2036 2,620,000 4.50 899052Q6 AlTalw-mrse • Registrar By CQ,�-fin Yrs_ Title Vice President I, Peggy McCarthy, Finance Director of the City of Tukwila, Washington (the "City"), acting in my official capacity, DO HEREBY CERTIFY that to the best of my knowledge and belief, and after reasonable investigation, (a) neither the Official Statement for the Unlimited Tax General Obligation Bonds, 2016, of the City in the aggregate principal amount of $32,990,000, nor any amendment or supplement thereto, contains any untrue statement of a material fact or omits to state any material fact necessary to make the statements therein, in light of the circumstances in which they were made, not misleading; nor (b) has there been any material adverse change in the financial condition and affairs of the City or relating to the economy of the City since the dated date of such Official Statement. Dated this 22nd day of December, 2016. CITY OF TUKWILA, WASHINGTON pt-ejoll,,& A/ 16'a Pe@WcCarthy, Fin Director 10076 00002 fk253d5Ogf Womm 1 1, �� 1pli%pls� iiiiiiiiiiiijiiiiii 111111111111111111 Jill III Jill 11111111111 1111111111111 111�11�111111!1 l��� I � II !I ',III; ! II � 11 � I � 11 � , , I lil , •�• IMP•IR L III I—E I I I I U 11 — 11 of the qualified electors of the City required by law for the adoption thereof voted in favor of a proposition authorizing the issuance of bonds of the City in the aggregate principal amount of not to exceed $77,385,000 ("Bond Authorization") to finance the cost of implementing the City's Public Safety Plan, which includes replacing three fire stations, financing critical items such as fire trucks and other life/safety equipment as necessary, and constructing a justice center to hold the Tukwila Police Department and Municipal Court, as identified in Ordinance No. 2509 passed by the Council on August 1, 2016. pMLMH3ff--JM I -f –ax—G-f—eneral-79-r'bligatio�, �FM Total 10076 00002 fk253d50gf Project Fund Deposit (Principal plus original issue premium) $ 36,500,000 01 IRROM cl�;,:& PeqwcCarthy, Fin 9�pl Director CITY OF TUKWILA, WASHINGTON 1, the undersigned, am the duly chosen, qualified and acting Finance Director of the City of Tukwila, Washington (the "Issuer"), and am one of the officers of the Issuer duly charged (by ordinance of the governing body of the Issuer), with others, with the responsibility of issuing the above -referenced bonds (the "Bonds"), on the date hereof. I am familiar with the facts certiflei herein and I am duly authorized to execute and deliver this certificate on behalf of the Issuer. I hereby certify and covenant in good faith on behalf of the Issuer as follows: 1007600802hn0I104st Exhibit C Certificate of Financial Advisor I am aware of no fact, estimate or circumstance that would create any doubt regarding the accuracy or reasonableness of all or any portion of such documents. 6. Confirmation of Covenants. The Issuer has made certain covenants with respect to the tax exemption of the Bonds in Section 9 of the Bond Ordinance (the "Tax Covenants"). The Issuer acknowledges that if the Tax Covenants are not complied with, interest on the Bonds may become taxable in the future, either at that time or with retroactive effect back to the date of issuance of the Bonds. Certain of the Tax Covenants in the Bond Ordinance and in this Certificate will survive payment in full or defeasance of the Bonds. 7. Qualification of the Issuer. The Issuer is a political subdivision of the State of Washington (the "State"), duly organized and existing as a municipal corporation with the power .*f taxation under the laws of the State, including Article XI of the Washington State • !1 I . Bond Terms. The Bonds will be dated as of and issued on the date hereof (the "Issue Date"), and bear interest from the Issue Date, payable semiannually on each June I and Itecember 1, beginning on June 1, 2017. The Bonds will mature on December I in the years and ?mounts, and bear interest at the rates as set forth in the Schedules attached to this Certificate. 2. Sale Proceeds. The Bonds were sold to Morgan Stanley & Co., LLC (thf.- I#' on / • • /+ as • • Face Amount of Bonds $32,990,000.00 Plus Original Issue Premium 3,719,954.05 Sale Proceeds of Bonds $36,709,954.05 3. Use of Sale Proceeds. The Issuer expects to use the Sale Proceeds of the Bonds as follows: Underwriter's Discount $101,436.73 Issuance Costs and additional proceeds(l) 108,517.32 Costs of the Project 36,500,000.00 Total Sale Proceeds $36,709,954.05 (1) If not needed to pay costs of issuance for the Bonds, additional proceeds in the amount of $3,550.82 will be transferred to the Debt Service Fund and used to pay capitalized interest on the Bonds. N 10076 00002 fm02104st Earnings on the proceeds of the Bonds are expected to be used for the above purposes or for payment of debt service on the Bonds, as described in Part D. 4. No Refunding. No portion of the receipts derived from the sale of the Bonds will be used to pay the principal of or interest on another issue of governmental obligations. 5. No Aggregated Issues. No tax-exempt obligations of the Issuer have been soli - within 15 days before or after the Sale Date (defined above) that will be paid from substantially the same source of funds as the Bonds (excluding guarantees from unrelated parties). 6. No Pooled Financing. No portion of the purchase price of any of the Bonds is being provided by the issuance of any other obligations of the Issuer or any other governmental illill J r 111111111111111717111! ' 1 1 I . Expectations Regarding Project Use for Life of Bonds. The Issuer reasonably expects to use the Project for governmental purposes of the Issuer during the entire term of the Monds. 2. Private Uses of Project. Part II of Exhibit A describes the Issuer's reasonable expectations regarding: a. each use to be made of the Project by any private person or entity (that is, any entity other than (i) the Issuer, (ii) other state or local governmental entities, or (iii) members of the public generally), and b. all payments (if any) directly or indirectly in respect of any use to be made of the Project by any private person or entity, which are to be made after the Closing Date. The Issuer does not•- any private business use that is notrelated to . use of the Project for governmental purposes or (ii) private business use that is related to such governmental purposes but is greater than governmental purposes financed with the Bonds. 3. No Private Loans. No portion of the proceeds of the Bonds will be used, directly or indirectly, to make or finance a loan to any person (other than a State or local government unit). 4. Reimbursement. No portion of the proceeds of the Bonds will be used f, reimbursement of expenditures paid by the Issuer prior to the Issue Date except f, (i) expenditures paid for costs of issuance of the Bonds, (ii) amounts not in excess of the lesser $100,000 1 'J of the proceeds of Bonds, preliminary c.• .i expenditures architectural, engineering surveying, soil testing and similar costs incurred befo commencement of acquisition or construction of the Project) that do not exceed 20% of the iss price of the Bonds, and (iv) capital expenditures that (A) were paid no earlier than 60 da before the date of the adoption by the Issuer of a declaration of intent (a "Reimburseme Declaration") to reimburse such expenditures from the proceeds of obligations, and (B) I M 10076 00002 fm021bMst reimoursea no iaTer Tna I I I i er tnT.MMrT?TM"T=?1T extentiture was �Tia or Me Me the Project is placed in service (but no later than three years after the expenditure is paid). The Bond Ordinance is also the Reimbursement Declaration for the Bonds. The Reimbursement Declaration was not declared as a matter of course, and is not in an amount substantially in excess of the amount expected to be necessary for the Project. Proceeds (if any) used for reimbursement of expenditures will be deposited in the general funds of the Issuer and will not be used to replace funds of the Issuer to be used to refund debt of the Issuer, to create a sinking or pledged fund for such debt or the Bonds or otherwise to create replacement proceeds for such debt or for the Bonds. 5. Qualified Equit . In addition to proceeds of the Bonds, the Issuer expects to contribute $5,609,000 (the "Qualified Equity") for costs of the Project, consisting of proceeds of *bligations that are not tax -advantaged obligations or funds that are not derived from proceeds of 9. borrowing. The Qualified Equity will pay for capital expenditures of the Project on a date that is no earlier than the date such expenditures would be eligible for reimbursement as described in Section 1.150-2(d)(2) of the Regulations and no later than the date the Project is placed in service (except for a reasonable retainage not exceeding 5% or as otherwise permitted under guidance from the Internal Revenue Service). 6. Costs of Project. The total cost of the Project is anticipated to be not less than $83,000,000. Any costs of the Project not financed out of sale or investment proceeds of the Bonds will be financed out of the Issuer's available funds, including the Qualified Equity, and proceeds of additional tax-exempt bonds not yet issued. Part D: Flow of Funds; Temporary Periods I . Flow of Funds. The Bond Ordinance creates the following funds, which ar"i d.escribei-, inTicore det-.;' [1914191110=1 111 111111•11111 • MEN I 111111111111�� The Debt Service Fund and the Project Fund are held by the Issuer pursuant to the terms of the Bond Ordinance. 2. Issuance Costs. The Underwriter will retain $101,436.73 in Bond proceeds as payment of underwriter's discount. Bond proceeds in the amount of $108,517.32 will be deposited in the Project Fund and are expected to be used for payment of legal fees, financial advisor fees, printing costs and other costs incurred in connection with the issuance of the Bonds and will be fully expended promptly upon receipt of invoices. Such amounts, if invested, will be invested without yield restrictions for a temporary period of 13 months beginning on the Issue Date. Interest earnings and gains resulting from that investment and any amounts remaining after 13 months will be retained in the Project Fund and used for the purposes thereof. M1 10076 00002 fM021b34st a. Capital Expenditures. Other than amounts allocated to issuance costs as described above, all expenditures from the Project Fund will be for (i) costs that would be chargeable to the capital accounts of the Project and (ii) interest on the Bonds in an amount that does not cause the aggregate amount of interest paid on all of the Bonds to exceed that amount of interest on the Bonds that is attributable to the period that I M- 4. Pledge of Revenues; Debt Service Fund. The Issuer has pledged the receipts from certain levies of ad valorem property taxes (the "Revenues") to the payment of debt service on the Bonds. Upon receipt, the Revenues will be deposited in the Debt Service Fund to be used for payment of debt service on the Bonds. The Issuer expects that the Revenues will be sufficient each year to pay that year's debt service. The Debt Service Fund has been established primarily to achieve a proper matching of Revenues and debt service due on the Bonds during each year that the Bonds are outstanding. Amounts deposited in the Debt Service Fund will be spent within 13 months of the date of deposit, and the Debt Service Fund will be depleted at least once a year except for a reasonable carryover amount not in excess of the greater of earnings on said N 10076 00002 fmMbMst Fund during the preceding bond year for the Bonds or 1/12th of debt service on the Bonds during the preceding bond year for the Bonds. Amounts in the Debt Service Fund will be invested without yield restrictions for a temporary period of 13 months. Interest earnings and gains resulting from investment of the Debt Service Fund will be retained in the Debt Service Fund and used for the payment of debt service on the Bonds. Any amounts in excess of a reasonable carryover amount held in the Debt Service FunS for longer than 13 months will be invested in obligations the yield on which is not in excess the yield on the Bonds. I 5. No Reserve Fund. No debt service reserve fund has been established with respect to the Bonds. 6. Minor Portion. The Issuer does not expect to invest any proceeds of the Bonds " a yield which is higher than the yield on the Bonds if such amounts are subject to yiel restriction under the Code; however, under the Code, the Issuer may invest a Minor Portion is otherwise restricted amounts at an unrestricted yield. The Minor Portion is an amount not t exceed in the aggregate the lesser of $100,000 or 5 % of the Sale Proceeds of the Bonds. I 1111 Un"Wil 11,11,112 kF1111111 I I No Other Pledged Amounts or Investment -Type Property. Except as escribe I herein, no amounts have been pledged to, or are reasonably expected to be used direct y indirectly to pay, principal or interest on the Bonds, nor are there any amounts that have bee reserved or otherwise set aside such that there is a reasonable assurance that such amounts wi be available to pay principal or interest on the Bonds. 2. No Negative Pledges. There are no amounts held under any agreement requirin the maintenance of amounts at a particular level for the direct or indirect benefit of the owners ( the Bonds or any guarantor of the Bonds, excluding for this purpose amounts in which the Issu( may grant rights that are superior to the rights of the owners of the Bonds or any guaranto of th r ' Bonds and amounts that do not exceed reasonable needs for which they are maintained and as t which the required level is tested no more frequently than every 6 months and the amount ma • be spent without any substantial restriction other than a requirement to replenish the amount b the next testing date. 3. No Other Replacement Proceeds. There are no amounts not described herein th, have a sufficiently direct nexus to the Bonds or to the Project to conclude that the amounts woul have been used for debt service on the Bonds or for the Project if the proceeds of the Bonds wei not being used for those purposes. 4. Safe Harbor. The weighted average maturity of the Bonds (12.3065 years, do( not exceed 120% of the average reasonably expected economic life of the Project. The weighte I !! . w, - com-,tuted brA the Financial Advisor as set forth in Exhibit C. The average reasonably expected economic life of the Project was determined in accordan with Section 147(b) of the Code. I Fol 10076 00002 fM021b34st 1. - • of the Bonds., Advisor has computed- • of the Bonds is 3.2504%. For purposes of computing yield, the Underwriter has represented that the issue price of the Bonds is $36,709,954.05 (being the face amount of the Bonds of $32,990,000, plus original issue premium of $3,719,954.05) and has made certain representations regarding the issue price o -Bonds expect2. No Hedge Contracts. The Issuer has not entered into, and does not reasonabI • enter into, a hedge• primarily forpurpose • -• •'I interest rate - • • • • 3. Yield on Investments. The yield on investments acquired with proceeds of t Bonds will be -• in an identicald by of -• • compounding interest used to calculate the yield on the Bonds. For certain investments subject giield restriction the Issuer magi make pi- -• • - • - -•- • - •- Section''' t of • • - . • such payments be treated as • payment forthat r reduces the yield on G• • Year forBonds. each period • !- b- through December I of the following calendar year as the bond years for the Bonds, except th. the first •• • year will commenceon Date and the last r• • year will - • on dal of payment of - Bonds 2. Rebate.r r Bond Ordinance to • r with requirements for rebate of excess investment earnings to the federal government to tt extent applicable and acknowledges that the first payment of excess investment earnings, if an, is required to be paid to the federal government no later than 60 days after the end of the 5t •• • year forBonds. Special3. • No portion of the Bonds will constituteprivate activity ro• yearswithin the meaning of Section 141(a) of the Code, the average maturity of the Bonds is great( than 5 . • none of the interest rates on Bonds during the terni of :o • result, investment earnings on the Debt Service Fund will be excluded for the purposes total amount of said earnings. 4. Rebate Spending Exceptions. If certain spending requirements are met, certai Bond proceeds may qualify for an exception to the payment of rebate. The Issuer elects t]heu of actual facts for purposes of determining eligibility for and compliance with any expenditur exceptions to arbitrage rebate; however, the Issuer does not expect a rebate spending exceptio to apply to the Bonds. M 10076 00002 fm02104st correct,11111111111 11 1110111K,11111 - ImP, 11 11. L'I 1. No Abusive Arbitrage Device. The issuance of the Bonds does not exploit the difference between tax-exempt and taxable interest rates to obtain a material financial advantage and does not overburden the tax-exempt bond market in that the Issuer is not issuing more Bonds, issuing the Bonds earlier, or allowing the Bonds to remain outstanding longer than is otherwise reasonably necessary to accomplish the governmental purposes of the Bonds. 2. No Hedge Bonds. The Bonds do not constitute "hedge bonds" because at least 85% of the Net Sale Proceeds will be used to carry out the governmental purposes of the Bonds within 3 years of the Issue Date, and not more than 50% of the proceeds of the Bonds, if any, are invested in investments having a substantially guaranteed yield for 4 or more years. 3. No Federal Guarantee. No portion of the debt service on the Bonds is being guaranteed, directly or indirectly, by the United States or any agency or instrumentality of the United States and no proceeds of the Bonds will be invested in federally insured accounts. A federal guarantee will not be deemed to arise if proceeds are invested during a temporary period or as part of a bona fide debt service fund or if invested in United States Treasury obligations. 4. Form 8038-G. I have examined the completed Form 8038-G, Information Return for Tax -Exempt Governmental Obligations, and to the best of my knowledge and belief, it is and complete. I . General. The Issuer will use a consistently applied accounting method to account for investments and expenditures of proceeds of the Bonds. Allocations of Bond proceeds to expenditures will be made only with respect to a current outlay of cash for the expenditures. No proceeds of the Bonds will be allocated to any expenditure to which proceeds of any other obligations have been allocated. 2. Final Allocation. The Issuer wilidentifyanydeviations in the Project financed from the description in Exhibit A, confirm the amount of Qualified Equity allocated to the Project, and allocate proceeds of the Bonds to expenditures with respect to the Project no later than 18 months after the later of the date the expenditure is paid or the date the Project is placed in service. In the event allocations of Bond proceeds to expenditures are not made within 60 days after the date that is 5 years after the Issue Date, the Issuer acknowledges that the Internal Revenue Service may apply•specific tracingaccounting • 1' to account forand expenditures of proceeds of the Bonds. 3. No Commingled Funds. Other than amounts in the Debt Service Fund, the Issuer expects to invest all proceeds of the Bonds in segregated accounts or within a commingled fund where Bond proceeds are invested and accounted for separately. If any Bond proceeds are invested commingled accounts that are invested and accounted for collectively, all payments and receipts of any investments will be allocated based on a consistently applied, reasonably ratable allocation method in accordance with Section 1.148-6(e) of the Regulations. In 10076 00002 fm021b34st Procedures.4. Books and Records. The Issuer will maintain books and records until 3 years after the date of retirement or redemption of the Bonds sufficient to (i) establish the accounting method used, (ii) account for all investments of proceeds of the Bonds, and (iii) substantiate the allocation of proceeds of the Bonds to expenditures. 5. Written f practices and procedures account"Written Procedures") set forth in Exhibit D in order to assure that the proceeds of the Bonds are used in such a manner so as not to violate the provisions of the Code and the applicable Regulations and to take remedial actions in the event of a violation. These Written Procedures generally !! and monitor• : 1 1 investment of Bond proceeds, use of the Project financed with the proceeds of the Bonds, and (iii) any changes in the underlying structure of the Bond financing. 6. Amendment. This Tax Certificate may• " amended ! • • 1 make such additions, deletions or modifications as may be necessary or desirable to assure exemption from federal income taxation of interest on the Bonds without consent of the holders of the i! 1 n the basis of the foregoing, it is not expected that the proceeds of the Bonds will be used in a manner that would cause the Bonds to be private activity bonds under Section 141 of the Code or to be arbitrage bonds under Section 148 of the Code and applicable Regulations. Dated: December 22, 2016 CITY OF TUKWILA, WASHINGTON M 10076 00002 fm021bMst P,Jwa,4,;� C ltA Peg arthy, Fin Director Schedule of Exhibits 1. Description of Project 11. Description of Private Use 111. Schedule of Expected Expenditures Exhibit C — Certificate of the Financial Advisor, together with Schedules so 10076 00002 fm021b34st For-MITIO Proceeds of the Bonds are expected to be used for a portion of the costs of constructin three fire stations, financing fire trucks and other life/safety equipment as necessary, an constructing a justice center (the "Justice Center") to hold the Tukwila Police Department an Municipal Court. PART 11. Description of Any Private Use of Project A. Describe each use to be made of the Project by any private person or entity (th, is, any entity other than (i) the Issuer, (ii) other state or local goverm-nental entities, C (iii) members of the general public), applying the following rules: (A) any activity carried on b a person other than a natural person or a state or local governmental unit will be treated as a trad or business of a nongoverm-nental person; (B) the use of all or any portion of the Project i treated as the direct use of proceeds; (C) a nongovernmental person will be treated as a prival business user of proceeds of the Bonds as a result of ownership, actual or beneficial use pursuat to a lease, or a management or incentive payment contract, or certain other arrangements such E a take -or -pay or other output -type contract; and (D) the private business use test is met if nongovernmental person has special legal entitlements to use directly or indirectly the Project. the Project is not available for general public use, describe any special economic benefit from th Project to any nongovernmental persons. The Issuer expects thatfood vendor or other service contracts may be entered into wit respect to the Justice Center; however, the Issuer will assure that those contracts meet th requirements qfRevenue Procedure 2016-44 or otherwise do not result in excessive privai business use. B. Payments to be made on or after the Issue Date with respect to the private uses described above. FEW 10076 00002 fm02104st Exhibit A (continued) The table below lists all reasonably expected expenditures of the Bond proceeds deposited in the Project Fund (including investment earnings to the extent those earnings remain on deposit in the Project i The Issuer reasonably expects that all Bond proceeds will be spent within 3 years after the Closing Date. On the Closing Date, the Issuer does not expect to reimburse any prior expenditures from proceeds of the Bonds. Expenditure Date (by monthorquarter) Expenditure Amount 1Q 2017 $1,450,000 2Q 2017 $1,736,000 3Q 2017 $2,650,000 4Q 2017 $3,018,000 IQ 2018 $2,572,000 2Q 2018 $2,950,000 3Q 2018 $3,977,000 4Q 2018 $8,090,000 1Q 2019 $7,450,000 2Q 2019 $1,707,000 3Q 2019 $900,000* Total: $36,500,000 *Expenditures in this quarter are expected to include any investment earnings. M 10076 00002 fm021b34st Morgan Stanley & Co., LLC has acted as underwriter (the "Underwriter") in connection with the sale and delivery of the City of Tukwila, Washington (the "Issuer") Unlimited Tax General Obligation Bonds, 2016 in the aggregate principal amount of $32,990,000 (the "Bonds"). I, the undersigned, hereby certify as follows on behalf of the Underwriter I . I am the duly chosen, qualified and acting officer of the Underwriter for the office shown below my signature; as such, I am familiar with the facts herein certified and I am duly authorized to execute and deliver this certificate on behalf of the Underwriter. I am the officer of the Underwriter charged, along with other officers of the Underwriter, with responsibility for the Bonds. a. Based upon reasonable expectations and actual facts that existed on the Sale Date, the Underwriter re-asonably expected that the first prices at which a substantial amount of each maturity of the Bonds (being at least 10% of eachmaturity) would be offered and sold to the general public (excluding bond houses, brokers or similar persons or organizations acting in the capacity of underwriters or wholesalers) (the "General Public") in a bona fide public off-ering are the prices or, in the case of obligations sold on a yield basis, the respective yields shown on the cover or inside cover of the Official Statement (together the "Initial Offering Prices"). The aggregate of the Initial Offering Prices is $36,709,954.05. b. The Initial Offering Prices of the, Bonds of each maturity (and stated interest rate) reflected the assessment by the Underwriter of not more than the fair market prices of the Bonds as of the Sale Date and such offering prices were established by a bona fide public offering by the Underwriter to the General Public. C. As of the Sale Date, 100% of the Bonds of each maturity were actually offered to the General Public in a bona fide public offering for the Initial Offering Prices, and the Underwriter did not hold back any portion of any maturity of the Bonds for itself or any of its affiliates for the purpose of selling the same at a price in excess of t- - :! erng Price for such maturity of the Bonds. d. As of the Sale Date, at least 10% of the principal amount of each maturity of the Bonds initially was sold at the respective Initial Offering Price for that maturity shown in the Official Statement. Provided that nothing herein represents our interpretation of any laws, and iia particular, regulations under Section 148 of the Code, the Underwriter hereby authorizes the Issuer to rely on the statements made herein in connection with making the representations set forth in the Federal Tax Certificate to which this certificate is attached and in its efforts to comply with the HIM coliallions-imposea Ifte 1�-ACL of their owners. The Underwriter hereby authorizes Bond Counsel to rely on this certificate for purposes of its opinion regarding the treatment of interest on the Bonds as excludable from gross income for federal income tax purposes. Capitalized terms used herein and not otherwise defined A- lf'v Dated: December 22, 2016 Morgan Stanley & Co., LLC y: Name: Name: Title: —9 1 CS _T'RES, iDS Ia MN 10076 00002 WAP3409 EXHIBITC CERTIFICATE OF FINANCIAL ADVISOR 1, the undersigned representative of the Financial Advisor, make this certificate for the benefit of all persons interested in the exclusion from gross income for federal income tax purposes of the interest on the Bonds. Each capitalized term used herein has the meaning specified for such term in the Federal Tax Certificate to which this Exhibit C is attached (the "Federal Tax Certificate"). I hereby certify as follows as of the Issue Date. - 1. 1 am the duly chosen, qualified and acting representative of the Financial Advisor for the office shown below my signature; as such,: 1 am familiar with the facts herein certified and I am duly authorized to execute and deliver this certificate on behalf of the Financial Advisor. I am the representative of the Financial Advisor who has worked with representatives of the Issuer in structuring the financial terms of the Bonds. 2. 1 have workedclosely with representatives of the Issuer in structuring the financial terms of the Bonds. To the best of my knowledge, which was acquired in the course of structuring the Bonds on behalf of the Issuer, (i) the Bonds were not structured to take advantage of the difference between tax exempt and taxable rates except as identified in the Federal Tax Certificate with respect to permissible investments subject to arbitrage rebate, and (ii) the Bonds were not issued earlier, in a greater amount, with reserves or sinking funds larger, or with a maturity longer than was reasonably necessary to finance the projects financed by the Bonds. shown on the attached Schedules, the yield on the Bonds has been calculated to be 3.2504%. For IruUoses of this certificate we have 6omvutcd Nield as the discount rate that, 3 when used in computing the present value of all principal and interest payments to be made under each applicable maturity of the Bonds from the date of issuance, to maturity, produces an exercise an option or combination of options (including an optional redemption provision) in a manner that minimizes yield on the debt instrument. 4. As shown on the attached Schedules, the weighted average maturity of the Bonds is 12.3065 years. For purposes of this certificate, the weighted average maturity of the Bonds is the sum of the products of the issue price of each group of identical Bonds and the number of years to maturity (determined separately for each group of identical Bonds and taking into account mandatory redemptions), divided by the aggregate issue price of the Bonds. To the extent that we provided the Issuer and Pacifica Law Group LLP ("Bond Counsel") with certain computations that show a bond yield, issue price, weighted average maturity and certain other information with respect to the Bonds, these computations are provided for informational purposes and are based on our understanding of directions that we have received from Bond Counsel regarding interpretation of the applicable law. We express no view regarding the legal sufficiency of any such computations or the correctness of any legal interpretation made by Bond Counsel. 10076 00002 hOZ4p34k6 The Issuer may rely on the statements-made herein in connection with making the representations set forth in the Certificate and in its efforts to comply with the conditions imposed by the Code on the exclusion of interest on the Bonds from the gross income of their owners. Bond Counsel also may rely on this certificate for purposes of its opinion regarding the treatment of interest on the Bonds as excludable from gross income for federal income tax purposes. Dated: December 22, 2616 PUBLIC FINANCIAL A NT, INC. By: M k)v— Susan Musselman, Director 10076 00002 fm024p34k6 TABLE OF CONTENTS City of Tukwila, Washington Unlimited Tax General Obligation Bonds, 2016 *Final Numbers* Report Page Sources and Uses of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . I Bond Summary Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Bond Pricing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Bond Debt Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Cost of Issuance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Underwriter's Discount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Form 8038 Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Nov 30, 2016 10:28 am Prepared by Public Financial Management, Inc. SOURCES AND USES OF FUNDS City of Tukwila, Washington Unlimited Tax General Obligation Bonds, 2016 *Final Numbers* Dated Date 12/22/2016 Delivery Date 12/22/2016 Sources: Bond Proceeds Par Amount 32,990,000.00 Premium 3,719,954.05 36,709,954.05 Uses: Project Fund Deposits: Project Fund 36,500,000.00 Delivery Date Expenses: Cost of Issuance 108,517.32 Underwriter's Discount 101,436.73 209,954.05 36,709,954.05 Nov 30, 2016 10:28 am Prepared by Public Financial Management, Inc. Page 1 BOND SUMMARY STATISTICS City of Tukwila, Washington Unlimited Tax General Obligation Bonds, 2016 *Final Numbers* Nov 30, 2016 10:28 am Prepared by Public Financial Management, Inc. Page 2 Dated Date 12/22/2016 Delivery Date 12/22/2016 Last Maturity 12/01/2036 Arbitrage Yield 3.250387% True Interest Cost (TIC) 3.601815% Net Interest Cost (NIC) 3.849324% All -In TIC 3.633945% Average Coupon 4.734922% Average Life (years) 12.385 Duration of Issue (years) 9.412 Par Amount 32,990,000.00 Bond Proceeds 36,709,954.05 Total Interest 19,346,683.54 Net Interest 15,728,166.22 Total Debt Service 52,336,683.54 Maximum Annual Debt Service 2,841,675.00 Average Annual Debt Service 2,624,488.94 Underwriter's Fees (per $ 1000) Average Takedown Other Fee 3.074772 Total Underwriter's Discount 3.074772 Bid Price 110.968528 Par Average Average PV of I by Bond Component Value Price Coupon Life change Serial Bonds 32,990,000.00 111.276 4.735% 12.385 25,657.25 32,990,000.00 12.385 25,657.25 All -In Arbitrage TIC TIC Yield Par Value 32,990,000.00 32,990,000.00 32,990,000.00 + Accrued Interest + Premium (Discount) 3,719,954.05 3,719,954.05 3,719,954.05 Underwriter's Discount -101,436.73 -101,436.73 Cost of Issuance Expense -108,517.32 Other Amounts Target Value 36,608,517.32 36,500,000.00 36,709,954.05 Target Date 12/22/2016 12/22/2016 12/22/2016 Yield 3.601815% 3.633945% 3.250387% Nov 30, 2016 10:28 am Prepared by Public Financial Management, Inc. Page 2 BOND PRICING City of Tukwila, Washington Unlimited Tax General Obligation Bonds, 2016 *Final Numbers* Maturity Bond Component Date Amount Rate Yield Price Yield to Maturity Premium (-Discount) Serial Bonds: First Coupon 06/01/2017 Par Amount 32,990,000.00 Premium 3,719,954.05 12/01/2017 1,115,000 5.000% 1.150% 103.594 36,608,517.32 110.968528% 40,073.10 12/01/2018 1,240,000 5.000% 1.450% 106.771 83,960.40 12/01/2019 1,370,000 5.000% 1.750% 109.277 127,094.90 12/01/2020 310,000 5.000% 1.950% 111.516 35,699.60 12/01/2021 400,000 5.000% 2.150% 113.292 53,168.00 12/01/2022 1,005,000 5.000% 2.320% 114.793 148,669.65 12/01/2023 1,340,000 5.000% 2.480% 115.977 214,091.80 12/01/2024 1,490,000 5.000% 2.670% 116.573 246,937.70 12/01/2025 1,560,000 5.000% 2.830% 117.035 265,746.00 12/01/2026 1,640,000 5.000% 2.950% 117.550 287,820.00 12/01/2027 1,720,000 5.000% 3.040% 116.706 C 3.180% 287,343.20 12/01/2028 1,810,000 5.000% 3.160% 115.591 C 3.400% 282,197.10 12/01/2029 1,895,000 5.000% 3.230% 114.946 C 3.549% 283,226.70 12/01/2030 1,990,000 5.000% 3.290% 114.397 C 3.671% 286,500.30 12/01/2031 2,090,000 5.000% 3.350% 113.852 C 3.778% 289,506.80 12/01/2032 2,200,000 4.500% 3.620% 107.290 C 3.882% 160,380.00 12/01/2033 2,295,000 4.500% 3.670% 106.859 C 3.941% 157,414.05 12/01/2034 2,395,000 4.500% 3.710% 106.516 C 3.988% 156,058.20 12/01/2035 2,505,000 4.500% 3.740% 106.259 C 4.024% 156,787.95 12/01/2036 2,620,000 4.500% 3.770% 106.003 C 4.058% 157,278.60 32,990,000 3,719,954.05 Dated Date 12/22/2016 Delivery Date 12/22/2016 First Coupon 06/01/2017 Par Amount 32,990,000.00 Premium 3,719,954.05 Production 36,709,954.05 111.276005% Underwriter's Discount -101,436.73 -0.307477% Purchase Price 36,608,517.32 110.968528% Accrued Interest Net Proceeds 36,608,517.32 Nov 30, 2016 10:28 am Prepared by Public Financial Management, Inc. Page 3 BOND DEBT SERVICE City of Tukwila, Washington Unlimited Tax General Obligation Bonds, 2016 *Final Numbers* Period Ending Principal Coupon Interest Debt Service Bond Balance Total Bond Value 12/01/2017 1,115,000 5.000% 1,496,708.54 2,611,708.54 31,875,000 31,875,000 12/01/2018 1,240,000 5.000% 1,533,675.00 2,773,675.00 30,635,000 30,635,000 12/01/2019 1,370,000 5.000% 1,471,675.00 2,841,675.00 29,265,000 29,265,000 12/01/2020 310,000 5.000% 1,403,175.00 1,713,175.00 28,955,000 28,955,000 12/01/2021 400,000 5.000% 1,387,675.00 1,787,675.00 28,555,000 28,555,000 12/01/2022 1,005,000 5.000% 1,367,675.00 2,372,675.00 27,550,000 27,550,000 12/01/2023 1,340,000 5.000% 1,317,425.00 2,657,425.00 26,210,000 26,210,000 12/01/2024 1,490,000 5.000% 1,250,425.00 2,740,425.00 24,720,000 24,720,000 12/01/2025 1,560,000 5.000% 1,175,925.00 2,735,925.00 23,160,000 23,160,000 12/01/2026 1,640,000 5.000% 1,097,925.00 2,737,925.00 21,520,000 21,520,000 12/01/2027 1,720,000 5.000% 1,015,925.00 2,735,925.00 19,800,000 19,800,000 12/01/2028 1,810,000 5.000% 929,925.00 2,739,925.00 17,990,000 17,990,000 12/01/2029 1,895,000 5.000% 839,425.00 2,734,425.00 16,095,000 16,095,000 12/01/2030 1,990,000 5.000% 744,675.00 2,734,675.00 14,105,000 14,105,000 12/01/2031 2,090,000 5.000% 645,175.00 2,735,175.00 12,015,000 12,015,000 12/01/2032 2,200,000 4.500% 540,675.00 2,740,675.00 9,815,000 9,815,000 12/0I/2033 2,295,000 4.500% 441,675.00 2,736,675.00 7,520,000 7,520,000 12/01/2034 2,395,000 4.500% 338,400.00 2,733,400.00 5,125,000 5,125,000 12/01/2035 2,505,000 4.500% 230,625.00 2,735,625.00 2,620,000 2,620,000 12/01/2036 2,620,000 4.500% 117,900.00 2,737,900.00 32,990,000 19,346,683.54 52,336,683.54 Nov 30, 2016 10:28 am Prepared by Public Financial Management, Inc. Page 4 BOND DEBT SERVICE City of Tukwila, Washington Unlimited Tax General Obligation Bonds, 2016 *Final Numbers* Period Ending Principal Coupon Interest Debt Service Annual Debt Service Bond Balance Total Bond Value 12/22/2016 32,990,000 32,990,000 06/01/2017 701,996.04 701,996.04 32,990,000 32,990,000 12/01/2017 1,115,000 5.000% 794,712.50 1,909,712.50 2,611,708.54 31,875,000 31,875,000 06/01/2018 766,837.50 766,837.50 31,875,000 31,875,000 12/01/2018 1,240,000 5.000% 766,837.50 2,006,837.50 2,773,675.00 30,635,000 30,635,000 06/01/2019 735,837.50 735,837.50 30,635,000 30,635,000 12/01/2019 1,370,000 5.000% 735,837.50 2,105,837.50 2,841,675.00 29,265,000 29,265,000 06/01/2020 701,587.50 701,587.50 29,265,000 29,265,000 12/01/2020 310,000 5.000% 701,587.50 1,011,587.50 1,713,175.00 28,955,000 28,955,000 06/01/2021 693,837.50 693,837.50 28,955,000 28,955,000 12/01/2021 400,000 5.000% 693,837.50 1,093,837.50 1,787,675.00 28,555,000 28,555,000 06/01/2022 683,837.50 683,837.50 28,555,000 28,555,000 12/01/2022 1,005,000 5.000% 683,837.50 1,688,837.50 2,372,675.00 27,550,000 27,550,000 06/01/2023 658,712.50 658,712.50 27,550,000 27,550,000 12/01/2023 1,340,000 5.000% 658,712.50 1,998,712.50 2,657,425.00 26,210,000 26,210,000 06/01/2024 625,212.50 625,212.50 26,210,000 26,210,000 12/01/2024 1,490,000 5.000% 625,212.50 2,115,212.50 2,740,425.00 24,720,000 24,720,000 06/01/2025 587,962.50 587,962.50 24,720,000 24,720,000 12/01/2025 1,560,000 5.000% 587,962.50 2,147,962.50 2,735,925.00 23,160,000 23,160,000 06/01/2026 548,962.50 548,962.50 23,160,000 23,160,000 12/01/2026 1,640,000 5.000% 548,962.50 2,188,962.50 2,737,925.00 21,520,000 21,520,000 06/01/2027 507,962.50 507,962.50 21,520,000 21,520,000 12/01/2027 1,720,000 5.000% 507,962.50 2,227,962.50 2,735,925.00 19,800,000 19,800,000 06/01/2028 464,962.50 464,962.50 19,800,000 19,800,000 12/01/2028 1,810,000 5.000% 464,962.50 2,274,962.50 2,739,925.00 17,990,000 17,990,000 06/01/2029 419,712.50 419,712.50 17,990,000 17,990,000 12/01/2029 1,895,000 5.000% 419,712.50 2,314,712.50 2,734,425.00 16,095,000 16,095,000 06/01/2030 372,337.50 372,337.50 16,095,000 16,095,000 12/01/2030 1,990,000 5.000% 372,337.50 2,362,337.50 2,734,675.00 14,105,000 14,105,000 06/01/2031 322,587.50 322,587.50 14,105,000 14,105,000 12/01/2031 2,090,000 5.000% 322,587.50 2,412,587.50 2,735,175.00 12,015,000 12,015,000 06/01/2032 270,337.50 270,337.50 12,015,000 12,015,000 12/01/2032 2,200,000 4.500% 270,337.50 2,470,337.50 2,740,675.00 9,815,000 9,815,000 06/01/2033 220,837.50 220,837.50 9,815,000 9,815,000 12/01/2033 2,295,000 4.500% 220,837.50 2,515,837.50 2,736,675.00 7,520,000 7,520,000 06/01/2034 169,200.00 169,200.00 7,520,000 7,520,000 12/01/2034 2,395,000 4.500% 169,200.00 2,564,200.00 2,733,400.00 5,125,000 5,125,000 06/01/2035 115,312.50 115,312.50 5,125,000 5,125,000 12/01/2035 2,505,000 4.500% 115,312.50 2,620,312.50 2,735,625.00 2,620,000 2,620,000 06/01/2036 58,950.00 58,950.00 2,620,000 2,620,000 12/01/2036 2,620,000 4.500% 58,950.00 2,678,950.00 2,737,900.00 32,990,000 19,346,683.54 52,336,683.54 52,336,683.54 Nov 30, 2016 10:28 am Prepared by Public Financial Management, Inc. Page 5 COST OF ISSUANCE City of Tukwila, Washington Unlimited Tax General Obligation Bonds, 2016 *Final Numbers* Cost of Issuance $/1000 Amount Bond Counsel 0.94874 31,299.00 Financial Advisor Fee 1.20468 39,742.50 Financial Advisor Expenses 0.00530 175.00 Disclosure Fee 0.25765 8,500.00 S&P 0.74265 24,500.00 iPreo 0.02273 750.00 Contingency 0.10763 3,550.82 3.28940 108,517.32 Nov 30, 2016 10:28 am Prepared by Public Financial Management, Inc. Page 6 UNDERWRITER'S DISCOUNT City of Tukwila, Washington Unlimited Tax General Obligation Bonds, 2016 *Final Numbers* Underwriter's Discount $/1000 Amount Underwriter's Discount 3.07477 101,436.73 3.07477 101,436.73 Nov 30, 2016 10:28 am Prepared by Public Financial Management, Inc. Page 7 FORM 8038 STATISTICS City of Tukwila, Washington Unlimited Tax General Obligation Bonds, 2016 *Final Numbers* Nov 30, 2016 10:28 am Prepared by Public Financial Management, Inc. Page 8 Dated Date 12/22/2016 Delivery Date 12/22/2016 Redemption Bond Component Date Principal Coupon Price Issue Price at Maturity Serial Bonds: 12/01/2017 1,115,000.00 5.000% 103.594 1,155,073.10 1,115,000.00 12/01/2018 1,240,000.00 5.000% 106.771 1,323,960.40 1,240,000.00 12/01/2019 1,370,000.00 5.000% 109.277 1,497,094.90 1,370,000.00 12/01/2020 310,000.00 5.000% 111.516 345,699.60 310,000.00 12/01/2021 400,000.00 5.000% 113.292 453,168.00 400,000.00 12/01/2022 1,005,000.00 5.000% 114.793 1,153,669.65 1,005,000.00 12/01/2023 1,340,000.00 5.000% 115.977 1,554,091.80 1,340,000.00 12/01/2024 1,490,000.00 5.000% 116.573 1,736,937.70 1,490,000.00 12/01/2025 1,560,000.00 5.000% 117.035 1,825,746.00 1,560,000.00 12/01/2026 1,640,000.00 5.000% 117.550 1,927,820.00 1,640,000.00 12/01/2027 1,720,000.00 5.000% 116.706 2,007,343.20 1,720,000.00 12/01/2028 1,810,000.00 5.000% 115.591 2,092,197.10 1,810,000.00 12/01/2029 1,895,000.00 5.000% 114.946 2,178,226.70 1,895,000.00 12/01/2030 1,990,000.00 5.000% 114.397 2,276,500.30 1,990,000.00 12/01/2031 2,090,000.00 5.000% 113.852 2,379,506.80 2,090,000.00 12/01/2032 2,200,000.00 4.500% 107.290 2,360,380.00 2,200,000.00 12/01/2033 2,295,000.00 4.500% 106.859 2,452,414.05 2,295,000.00 12/01/2034 2,395,000.00 4.500% 106.516 2,551,058.20 2,395,000.00 12/01/2035 2,505,000.00 4.500% 106.259 2,661,787.95 2,505,000.00 12/01/2036 2,620,000.00 4.500% 106.003 2,777,278.60 2,620,000.00 32,990,000.00 36,709,954.05 32,990,000.00 Stated Weighted Maturity Interest Issue Redemption Average Date Rate Price at Maturity Maturity Yield Final Maturity 12/01/2036 4.500% 2,777,278.60 2,620,000.00 Entire Issue 36,709,954.05 32,990,000.00 12.3065 3.2504% Proceeds used for accrued interest 0.00 Proceeds used for bond issuance costs (including underwriters' discount) 209,954.05 Proceeds used for credit enhancement 0.00 Proceeds allocated to reasonably required reserve or replacement fund 0.00 Nov 30, 2016 10:28 am Prepared by Public Financial Management, Inc. Page 8 IWO-19 !' Cloty Of ' TU kwi" I I eel Washington Resolution No. /'No I �MRFIIWNIMIM M - - Me 'I NO I I I Lola ME. I I ffieo� WHEREAS, proper use and management of borrowing can yield significan) advantages; and WHEREAS, the use of debt is -a mechanism to equalize costs of needed improvements to both present and future citizens; and WHEREAS, it is the responsibility of the City Council of the City of Tukwila tM �rovide policy direction through the passage of motions and -ordinances, adoption resolutions, and final approval of the budget; and i 111AEREAS, a debt policy establishes the purpose, type, and use of de• responsibilities of various City officials; method of sale of bonds; refundings (bonds notes); structural elements; credit objective; and the use of professional and oth service providers; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILJ WASHINGTON, HEREBY RESOLVES AS FOLLOWS: Section 1. The debt policy dated August 2014, attached hereto as "Exhibit A," is hereby adopted by this reference as if set forth in full. Section 2. The debt policy shall be reviewed on a regular basis and updated as necessary. WAWord Processing\Resolutions\Debt policy adopted 8-5-14 VC:bjs Page 1 of 2 a A I OF TI&I'T'll-A, TIASHINGTON, al 2014. APPROVED AS TO FORM BY: ra Ir - Rachel Turpin, City Attorney [oil jor.] —W Uri F.M IT, TIMMEWTI"o v: Wrg mrz-Lmirzfj WAWord Processing\Resolutions\Debt policy adopted 8-5-14 VC:bjs A debt policy and appropriate management of debt issued by the City of Tukwila (the "City") is an important factor in measuring its financial performance and condition. Proper use and management of borrowing can yield significant advantages. From a policy perspective, the City uses debt as a mechanism to equalize the costs of needed improvements to both present and future citizens. In the issuance and management of debt, the City shall comply with the Washington State constitution and with all other applicable legal requirements imposed by federal, state and local laws, rules and regulations. Approval from the City Council (the "Council") is required prior to the issuance of all debt. Long-term debt will only be used for improvements that cannot be financed from current revenues or to fulfill the purposes set forth in the first paragraph of this Debt Policy Long-term debt will only be issued after reviewing the impact oil the Six Year Financial Planning Model and its policy guidelines. When both tax exempt and taxable debt is under consideration, priority will be given to issuing the tax exempt debt, unless otherwise justified. Limited Tax General Obligation (LTGO) Bonds. The City is authorized to sell LTGO bonds under RCW 39.36.020, subject to the approval of the Council. LTGO bonds will be issued only if. (1) a project requires funding not available from alternative sources; (2) the project has a useful life longer than five years, and the Council determines it is appropriate to spread the cost over that useful life, to achieve intergenerational equity, so those benefiting will also be the ones paying; (3) matching money is available which may be lost if not applied for in a timely manner; or (4) emergency conditions exist as determined by the Council. LTGO (non -voted) debt of the City shall not exceed an aggregate total of 1.5 percent of the City's assessed value of taxable property within the City. Unlimited Tax General Obligation (UTGQ) Bonds. The City is authorized to sell UTGO bonds under RCW 39.36.020, subject to the approval of the Council, and subject to voter approval. UTGO debt will be used for capital purposes when the use of an excess tax levy is necessary for debt service payments. No combination of UTGO (voter approved) debt and LTGO debt of the City shall exceed an aggregate total of. (a) 2.5 percent of the City's assessed value of the taxable property within the City for general purposes; (b) 2.5 percent of the City's assessed value of the taxable property within the City for parks, open spaces and capital facilities associated with economic development; and (c) 2.5 percent of the City's assessed value of the taxable property within the City for utility purposes. Revenue Bonds. The City ioauthorized to sell revenue bonds under RCW35.4l.O30, subject to the approval of the Council. Revenue hnudu will be issued tofinance the acquisition, construction or improvements to facilities ofenterprise systems operated by the City, in ouonrdonuc with o system and p|ou nfimprovements. The enterprise system rnun1 be legally authorized for operation by the City. There are no legal limits to the amount Vfrevenue bonds the City can issue, but the City will not incur revenue obligations without first ensuring the ability of an enterprise system to nuctt all pledges and covenants customarily required by investors in such obligations during the term of the obligation. 0 Local Improvement District Bonds. The City is authorized to sell local improvement • (special assessment) bonds ("LID bonds") under RCW 35.45.010, subject to the approval of the Council. LID bonds are issued to finance projects that will provide special benefit to certain property owners. The specially benefiting property owners are levied an assessment, based upon a formula developed to fairly reflect the benefit received by each property owner in the local improvement district. After consideration and review, the City may form local improvement districts upon petition of benefiting property owner(s), unless the Council determines to establish such districts by resolution, pursuant to statutory authority. LIDs for utility improvements may be authorized as ULIDs, which may be financed through issuance of Revenue Bonds. Lease Purchase Financing. Lease purchase financing may be used when the cost of borrowing or other factors make it in the City's best interest. Short -Term Debt. The City is authorized to incur short-term debt under chapter 39.50 RCW, subject to the approval of the Council, Short-term debt may be issued to meet: (1) the immediate financing needs of a project for which long-term financing has been identified and is likely or secured but not yet received; or (2) cash flow needs within authorized budgets and anticipated ► • the budget year. The Finance Director is authorized to make loans from one City fund to another City fund for periods not exceeding twelve months. The Finance Director or designee is required to assure that the loaning fund will have adequate cash balances to continue to meet current expenses after the loan is made and until repayment from the receiving fund. All interfund short-term borrowing will bear interest based upon prevailing Local • Investment Pool rates. SECTION 2. RESPONSIBILITIES The primary responsibility for debt management rests with the City's Finance Director. 0 Provide for the issuance of debt at the lowest cost and risk; 0 Determine the .• debt .•. 0 Provide for the issuance • debt at appropriate intervals and in • amounts as required to fund approved projects; . Recommend to the Council the manner of sale of debt; 0 Monitor opportunities to refund debt and recommend such refunding as appropriate; . Comply with all Internal Revenue Service (IRS), Securities and Exchange Commission (SEC and Municipal Securities Rulemaking Board (MSRB) rules and regulations governing the issuance of debt pursuant to the City's Post Issuance Compliance Policy; 0 Provide information for and participate in the preparation and review of bond offering or disclosure #• - Comply with all terms, conditions and disclosures required by Ordinances governing the debt issued; . Submit to the Council all recommendations to issue debt; 0 Distribute to appropriate repositories, such as the EMMA repository managed by the Munici Securities Rulemaking Board, information regarding financial condition and affairs at such times and in the form required by contract, regulation and general practice, including Rule l5c2-12 regarding continuing disclosure; 2 0 Provide for the distribution of pertinent information to rating agencies; 0 Coordinate and lead presentations to rating agencies, when appropriate; 0 Maintain a database with all outstanding debt; 0 Apply and promote prudent fiscal practices; . Select a qualified financial advisor with experience in municipal finance in Washington, registered with the SEC and MSRI3 as a "municipal advisorand * Account for and pay all bonded indebtedness for the City , by specifically providing for t timely payment of principal of and interest on all debt; and ensuring that the fiscal age receives funds for payment of debt service on or before the payment date. 0 Approve the Debt Policy; 0 Approve indebtedness; 0 Approve budgets sufficient to provide for the timely payment of principal and interest on debt; Determine the most appropriate financing plan for proposed debt, based on recommendation from the Finance Director, upon advice of the City's financial advisor; and By Ordinance, delegate broad or limited authority to the Finance Director relative to execution of a financing plan approved by the Council. �0 oc"M 11101KIN0 I of 0 10 [0 Competitive Sale. The Finance Director may, upon the advice of the City's financial advise submit to the Council a recommendation to sell debt on a competitive bid basis. City debt issue on a competitive bid basis will be sold to the bidder proposing the lowest true interest cost to tl City. Such bid may take the form of electronically transmitted offers to purchase the bonds. Negotiated Sale. The Finance Director may, upon the advice of the City's financial advisc submit to the Council a recommendation to sell debt on a negotiated basis. If debt is sold on negotiated basis, the negotiations of terms and conditions shall include, but not be limited t• prices, interest rates, redemption provisions and underwriting compensation. The Finance Directc with the assistance of its financial advisor, shall evaluate the terms offered by the underwrit, including comparison of terms with prevail ing terms and conditions in the marketplace fi comparable issues. If more than one underwriter is included in the negotiated sale of debt, tl Finance Director shall establish appropriate levels of liability. participation and priority of orde and, with the assistance of its financial advisor, oversee the bond allocation process. Private or Direct Placement. When deerned appropriate to minimize the direct or indirect cos and risks of a debt issue, the Finance Director will, upon the advice of the City's financial advise submit.to the Council a request to incur debt issue through a private placement or direct bar placement. SECTION 4. RE, FUNDING BONDS OR NOTES Refundings will be conducted in accordance with chapter 39.53 RCW. Unless otherwise justifie( the City will refinance debt to either achieve debt service savings as market opportunities arise, or I eliminate restrictive covenants. P Unless otherwise justified, an "advance refunding" transaction will require a present value savings of five percent of the principal amount of the debt being refunded. In addition to the savings, any determination to refund debt should take into consideration all costs and negative arbitrage in the refunding escrow. A "current refunding" transaction will require present value savings in an amount or percentage to be determined by the Finance Director based upon the advice of the City's financial advisor. SECTION 5. STRUCTURAL ELEMENTS Maturity Term. The City shall issue debt with an average life less than or equal to the average life of the assets being financed. Unless otherwise stated in law, the final maturity of the debt shall be no longer than 40 years (RCW 39.46.110). Debt Service Structure. Unless otherwise justified and deemed necessary, debt service should structured on a level annual basis. Refunding bonds should be structured to produce debt servi I savings as determined by the , Finance Director, based upon the advice of the City's financi I advisor, to be in the best interest of the City. Unless specifically justified and deemed necessar debt shall not have capitalized interest. If appropriate, debt service reserve funds may be used f revenue bonds. Maturity Structure. The City's long-term debt may include serial and term bonds. Unless otherwise justified, term bonds should be sold with mandatory sinking fund requirements. Price Structure. The City's long-term debt may include par, discount and premium bonds. Discount and premium bonds must be demonstrated to be advantageous relative to par bond structures, given applicable market conditions and the City's financing goals. Interest Payments. Unless otherwise justified and deemed necessary, long-term debt will bear interest payable semiannually. Redemption Features. For each transaction, the City shall evaluate the costs and benefits of call provisions. Capitalization. Debt service reserves may be capitalized for enterprise activities only. Costs of issuance may be capitalized for all debt. Interest costs may be capitalized upon the advice of the City's financial advisor for any type of debt. and Insurance. The City may evaluate the costs and benefits of bond insurance or other credit enhancements. Any credit enhancement purchased by the City shall be competitively procured unless otherwise justified. Tax -exemption. Unless otherwise justified and deemed necessary, the City shall issue its debt on a tax-exempt basis. Taxable debt may be justified based on a need for flexibility in use of proceeds, or when expected to reduce burdens relative to IRS rules. 0 BLOM 0 [410111115wei Z4 01111 K :A] KRA Purpose. At the time • issuance • any :• regardless • tax status, the City is required to enter into a Continuing Disclosure Undertaking ("Undertaking") in order to allow the • • the Bonds to comply with Securities and Exchange ("SEC") Rule 15(c)2-12. The Undertaking is a contract between the City and the underwriter in which the City agrees to provide certain infon-nation to an "information repository" s• • the Municipal Securities Rulemaking Board ("MSRB") to ensure investors have access to annual updates and related events that occur • the year. Responsibilityfor Undertaking. The Finance Director is responsible for negotiating the terms of and complying with each of the City's Undertakings. The Finance Director will negotiate the terms of the Undertaking at the time of each bond issuance, with a goal of meeting the 5 requirements of Rule 15(c)2-12, without undue burden on the City. The Finance Director w strive to ensure that each Undertaking is similar to prior Undertakings to the extent possible, simplify future compliance. 11 department. This will require certain annual filings, by a set due date, as well as periodic filings as certain specified events arise. Filings are to be made through the Electronic Municipal Market Access ("EMMA") portal, managed by the MSRB. The Finance Director is responsible for knowing the terms of the City's Undertakings, and ensuring appropriate staff within the finance department and other departments of the City are aware of the events that may require a filing. Certification of Compliance. At the time of each subsequent bond issue, the Finance Director is responsible for reviewing all prior compliance, and providing a statement as to that prior compliance, as required by Rule 15(c)2-12. Each official statement will include a statement that describes compliance (or non-compliance) with each prior undertaking, which statement will be • by the Finance Director. C33EM= Purpose. The purpose of these post -issuance compliance procedures ("Compliance Procedures") for tax-exempt bonds and other obligations issued by the City for which federal tax exemption is provided by the Internal Revenue Code of 1986, as amended (the "Code"), is to facilitate ii 1166 6W 14 60-0 MWO U -MIN I K,7JVJ 04 1 N9916) 10 1-2 0 R I I N I III N I If E44 U.'Mra NW -CUM I I I Q I W IN I$) Of SOM 01111 El RM; 101) 0 1 WD M-11 RAM ri I V�� AeSP07FS1617i Men,-' the overall, final responsibility for monitoring whether the City is in compliance with post - issuance federal tax requirements for the City's tax-exempt bonds. However, the City Council has delegated the primary operating responsibility to monitor the City's compliance with post - issuance federal tax requirements for the City's bonds to the Finance Director and has authorizeil and directed the Finance Director of the City to adopt and implement on behalf of the City these Compliance Procedures. Arbitrage Yield Restriction and Rebate Requirements. The Finance Director will maintain or cause to be maintained records of. (a) purchases and sales of investments made with bond proceeds (including amounts treated as "gross proceeds" of bonds under section 148 of the Code) and receipts of earnings on those investments; (b) expenditures made with bond proceeds (including investment earnings on bond proceeds) in a timely and diligent manner for the governmental purposes of the bonds, such as for the costs of purchasing, constructing and/or renovating property and facilities; (c) information showing, where applicable for a particular calendar year, that the City was eligible to be treated as a "small City" in respect of bonds issued in that calendar year because the City did not reasonably expect to issue more than $5,000,000 of tax-exempt bonds in that calendar year; (d) calculations that will be sufficient to demonstrate to the Internal Revenue Service ("IRS") upon an audit of a bond issue that, where applicable, the City has complied with an available spending exception to the arbitrage rebate requirement in respect of that bond issue; 6 (e) calculations that will be sufficient to demonstrate to the IRS upon an audit of a bond issue which no exception to the arbitrage rebate requirement was applicable, that the reb amount, if any, that was payable to the United States of America in respect of investine f f al made with gross proceeds of that bond issue was calculated and timely paid with Fornmn 803 T timely filed with the IRS; and (f) information and records showing that investments held in yield -restricted advance refundi or defeasance escrows for bonds, and investments made with unspent bond proceeds after t expiration of the applicable temporary period, were not invested in higher-yieldi investments. Restrictions on Private Business Use and Private Loans. The Finance Director will adopt procedures calculated to educate and inform the principal operating officials of those departments, including utility departments, if any, of the City (the "users") for which land, buildings, facilities and equipment ("property") are financed with proceeds of tax-exempt bonds about the restrictions on private business use that apply to that property after the bonds have r d f tax -ex nnds to make or finance •EUTMO =$4M_9AO$ 6 TABLE OF CONTENTS City of Tukwila, Washington Unlimited Tax General Obligation Bonds, 2016 *Final Numbers* Report Page Sources and Uses of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . I Bond Summary Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Bond Pricing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Bond Debt Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Cost of Issuance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Underwriter's Discount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Form 8038 Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Nov 30, 2016 10:28 am Prepared by Public Financial Management, Inc. SOURCES AND USES OF FUNDS City of Tukwila, Washington Unlimited Tax General Obligation Bonds, 2016 *Final Numbers* Dated Date 12/22/2016 Delivery Date 12/22/2016 Sources: Bond Proceeds: Par Amount 32,990,000.00 Premium 3,719,954.05 36,709,954.05 Uses: Project Fund Deposits: Project Fund 36,500,000.00 Delivery Date Expenses: Cost of Issuance 108,517.32 Underwriter's Discount 101,436.73 209,954.05 36,709,954.05 Nov 30, 2016 10:28 am Prepared by Public Financial Management, Inc. Page 1 BOND SUMMARY STATISTICS City of Tukwila, Washington Unlimited Tax General Obligation Bonds, 2016 *Final Numbers* Nov 30, 2016 10:28 am Prepared by Public Financial Management, Inc. T Dated Date 12/22/2016 Delivery Date 12/22/2016 Last Maturity 12/01/2036 Arbitrage Yield 3.250387% True Interest Cost (TIC) 3.601815% Net Interest Cost (NIC) 3.849324% 'All -In TIC 3.633945% Average Coupon 4.734922% Average Life (years) 12.385 Duration of Issue (years) 9.412 Par Amount 32,990,000.00 Bond Proceeds 36,709,954.05 Total Interest 19,346,683.54 Net Interest 15,728,166.22 Total Debt Service 52,336,683.54 Maximum Annual Debt Service 2,841,675.00 Average Annual Debt Service 2,624,488.94 Underwriter's Fees (per $ 1000) Average Takedown Other Fee 3.074772 Total Underwriter's Discount 3.074772 Bid Price 110.968528 Par Average Average PV of I by Bond Component Value Price Coupon Life change Serial Bonds 32,990,000.00 111.276 4.735% 12.385 25,657.25 32,990,000.00 12.385 25,657.25 All -In Arbitrage TIC TIC Yield Par Value 32,990,000.00 32,990,000.00 32,990,000.00 + Accrued Interest + Premium (Discount) 3,719,954.05 3,719,954.05 3,719,954.05 Underwriter's Discount -101,436.73 -101,436.73 Cost of Issuance Expense -108,517.32 Other Amounts Target Value 36,608,517.32 36,500,000.00 36,709,954.05 Target Date 12/22/2016 12/22/2016 12/22/2016 Yield 3.601815% 3.633945% 3.250387% Nov 30, 2016 10:28 am Prepared by Public Financial Management, Inc. T BOND PRICING City of Tukwila, Washington Unlimited Tax General Obligation Bonds, 2016 *Final Numbers* Maturity Yield to Premium Bond Component Date Amount Rate Yield Price Maturity (-Discount) Serial Bonds: 12/01/2017 1,115,000 5.000% 1.150% 103.594 40,073.10 12/01/2018 1,240,000 5.000% 1.450% 106.771 83,960.40 12/01/2019 1,370,000 5.000% 1.750% 109.277 127,094.90 12/01/2020 310,000 5.000% 1.950% 111.516 35,699.60 12/01/2021 400,000 5.000% 2.150% 113.292 53,168.00 12/01/2022 1,005,000 5.000% 2.320% 114.793 148,669.65 12/01/2023 1,340,000 5.000% 2.480% 115.977 214,091.80 12/01/2024 1,490,000 5.000% 2.670% 116.573 246,937.70 12/01/2025 1,560,000 5.000% 2.830% 117.035 265,746.00 12/01/2026 1,640,000 5.000% 2.950% 117.550 287,820.00 12/01/2027 1,720,000 5.000% 3.040% 116.706 C 3.180% 287,343.20 12/01/2028 1,810,000 5.000% 3.160% 115.591 C 3.400% 282,197.10 12/01/2029 1,895,000 5.000% 3.230% 114.946 C 3.549% 283,226.70 12/01/2030 1,990,000 5.000% 3.290% 114.397 C 3.671% 286,500.30 12/01/2031 2,090,000 5.000% 3.350% 113.852 C 3.778% 289,506.80 12/01/2032 2,200,000 4.500% 3.620% 107.290 C 3.882% 160,380.00 12/01/2033 2,295,000 4.500% 3.670% 106.859 C 3.941% 157,414.05 12/01/2034 2,395,000 4.500% 3.710% 106.516 C 3.988% 156,058.20 12/01/2035 2,505,000 4.500% 3.740% 106.259 C 4.024% 156,787.95 12/01/2036 2,620,000 4.500% 3.770% 106.003 C 4.058% 157,278.60 32,990,000 3,719,954.05 Dated Date Delivery Date First Coupon Par Amount Premium Production Underwriter's Discount Purchase Price Accrued Interest Net Proceeds 12/22/2016 12/22/2016 06/01/2017 32,990,000.00 3,719,954.05 36,709,954.05 111.276005% -101,436.73 -0.307477% 36,608,517.32 110.968528% 36,608,517.32 Nov 30, 2016 10:28 am Prepared by Public Financial Management, Inc. Page 3 City ofTukwila, Washington Unlimited Tax General Obligation Bonds, 2016 *Final Numbers* Period Ending Principal Coupon Interest Debt 3omicv Bond Balance Total Bond Value 12/01/2017 1,115.000 5.000% 1,496.708.54 2,611,708.54 31.875,000 31.875.000 12/01/2018 1,240,000 5.000% 1,533,675.00 2J73675.00 30,635,000 30,635,000 12/01/2019 1^370.000 5.808% 1.471.675.00 2,841.675.00 29.265.000 29,205,000 12/01/2020 310,000 5.000% 1,403,175.00 1J13.175.00 28,955,000 28,955,000 12/01/2021 400,000 5.000% 1�87,675.00 1�87,675.00 28,555,000 28,555,000 12/01/2022 1.005,000 5.000% 1.367.675.00 2,372,675.00 27.550,000 27.550,000 12/01/2023 1^340.000 5.000% 1.317,425u0 2,657.425.00 26.210,000 26.210,000 12/01/2024 /,490.000 5.000% 1.250,425.00 2,740,425.00 24^720000 24,720,000 12/01/2025 1.560.000 5.000% 1.175.925.00 2.735.925.00 23,160,000 23.160,000 12/01/2026 1.440.000 5.000Y6 1.097.925.00 2.737.925.00 21,520.000 21.520,000 12/01/2027 1.720.000 5.000% 1.015.925.00 2.735.925.00 19,800.000 19.808,000 12N1/2028 1.810.000 5.000% 929,925.00 2.739.925.00 17,990,000 17.990,000 12/01/2029 1.895.000 5.000% 839,425.00 2.734.425.00 16.095.000 16,095.000 12/01/2030 1,990,000 5.000% 744.675.00 2,734,675.00 14.105.000 14.105.000 12m1/2031 2,090,000 5.000% 645.175.00 2,735,175.00 12.015,000 12.015.000 12N1D032 2.200.000 4.500% 540,675.00 2.740.675.00 9,815,000 9,815.000 12N1/2033 2.295.000 4.500% 441^675.00 2.736.675.00 7.520,000 7,520,000 12/01/2034 2,995,000 4.500% 338.400.00 2^733,400.00 5.125,000 5.125.000 12/01/2035 2.505.000 4.500% 230.625.00 2,735.625.00 2.620,000 2.620,000 12/01/2036 2.620.000 4.500% 117,900.00 2.737.900.00 32,990.000 19.346.683.54 52.336.683.54 Nov 30,2Vlh 10:28 am Prepared hrPublic Financial Management, Inc. Page BOND DEBT SERVICE City of Tukwila, Washington Unlimited Tax General Obligation Bonds, 2016 *Final Numbers* Period Ending Principal Coupon Interest Debt Service Annual Debt Service Bond Balance Total Bond Value 12/22/2016 32,990,000 32,990,000 06/01/2017 701,996.04 701,996.04 32,990,000 32,990,000 12/01/2017 1,115,000 5.000% 794,712.50 1,909,712.50 2,611,708.54 31,875,000 31,875,000 06/01/2018 766,837.50 766,837.50 31,875,000 31,875,000 12/01/2018 1,240,000 5.000% 766,837.50 2,006,837.50 2,773,675.00 30,635,000 30,635,000 06/01/2019 735,837.50 735,837.50 30,635,000 30,635,000 12/01/2019 1,370,000 5.000% 735,837.50 2,105,837.50 2,841,675.00 29,265,000 29,265,000 06/01/2020 701,587.50 701,587.50 29,265,000 29,265,000 12/01/2020 310,000 5.000% 701,587.50 1,011,587.50 1,713,175.00 28,955,000 28,955,000 06/01/2021 693,837.50 693,837.50 28,955,000 28,955,000 12/01/2021 400,000 5.000% 693,837.50 1,093,837.50 1,787,675.00 28,555,000 28,555,000 06/01/2022 683,837.50 683,837.50 28,555,000 28,555,000 12/01/2022 1,005,000 5.000% 683,837.50 1,688,837.50 2,372,675.00 27,550,000 27,550,000 06/01/2023 658,712.50 658,712.50 27,550,000 27,550,000 12/01/2023 1,340,000 5.000% 658,712.50 1,998,712.50 2,657,425.00 26,210,000 26,210,000 06/01/2024 625,212.50 625,212.50 26,210,000 26,210,000 12/01/2024 1,490,000 5.000% 625,212.50 2,115,212.50 2,740,425.00 24,720,000 24,720,000 06/01/2025 587,962.50 587,962.50 24,720,000 24,720,000 12/01/2025 1,560,000 5.000% 587,962.50 2,147,962.50 2,735,925.00 23,160,000 23,160,000 06/01/2026 548,962.50 548,962.50 23,160,000 23,160,000 12/01/2026 1,640,000 5.000% 548,962.50 2,188,962.50 2,737,925.00 21,520,000 21,520,000 06/01/2027 507,962.50 507,962.50 21,520,000 21,520,000 12/01/2027 1,720,000 5.000% 507,962.50 2,227,962.50 2,735,925.00 19,800,000 19,800,000 06/01/2028 464,962.50 464,962.50 19,800,000 19,800,000 12/01/2028 1,810,000 5.000% 464,962.50 2,274,962.50 2,739,925.00 17,990,000 17,990,000 06/01/2029 419,712.50 419,712.50 17,990,000 17,990,000 12/01/2029 1,895,000 5.000% 419,712.50 2,314,712.50 2,734,425.00 16,095,000 16,095,000 06/01/2030 372,337.50 372,337.50 16,095,000 16,095,000 12/01/2030 1,990,000 5.000% 372,337.50 2,362,337.50 2,734,675.00 14,105,000 14,105,000 06/01/2031 322,587.50 322,587.50 14,105,000 14,105,000 12/01/2031 2,090,000 5.000% 322,587.50 2,412,587.50 2,735,175.00 12,015,000 12,015,000 06/01/2032 270,337.50 270,337.50 12,015,000 12,015,000 12/01/2032 2,200,000 4.500% 270,337.50 2,470,337.50 2,740,675.00 9,815,000 9,815,000 06/01/2033 220,837.50 220,837.50 9,815,000 9,815,000 12/01/2033 2,295,000 4.500% 220,837.50 2,515,837.50 2,736,675.00 7,520,000 7,520,000 06/01/2034 169,200.00 169,200.00 7,520,000 7,520,000 12/01/2034 2,395,000 4.500% 169,200.00 2,564,200.00 2,733,400.00 5,125,000 5,125,000 06/01/2035 115,312.50 115,312.50 5,125,000 5,125,000 12/01/2035 2,505,000 4.500% 115,312.50 2,620,312.50 2,735,625.00 2,620,000 2,620,000 06/01/2036 58,950.00 58,950.00 2,620,000 2,620,000 12/01/2036 2,620,000 4.500% 58,950.00 2,678,950.00 2,737,900.00 32,990,000 19,346,683.54 52,336,683.54 52,336,683.54 Nov 30, 2016 10:28 am Prepared by Public Financial Management, Inc. Page 5 COST OF ISSUANCE City of Tukwila, Washington Unlimited Tax General Obligation Bonds, 2016 *Final Numbers* Cost of Issuance V1000 Amount Bond Counsel 0.94874 31,299.00 Financial Advisor Fee 1.20468 39,742.50 Financial Advisor Expenses 0.00530 175.00 Disclosure Fee 0.25765 8,500.00 S&P 0.74265 24,500.00 iPreo 0.02273 750.00 Contingency 0.10763 3,550.82 3.28940 108,517.32 Nov 30, 2016 10:28 am Prepared by Public Financial Management, Inc. Page 6 UNDERWRITER'S DISCOUNT City of Tukwila, Washington Unlimited Tax General Obligation Bonds, 2016 *Final Numbers* Underwriter's Discount $/1000 Amount Underwriter's Discount 3.07477 101,436.73 3.07477 101,436.73 Nov 30, 2016 10:28 am Prepared by Public Financial Management, Inc. Page 7 FORM 8038 STATISTICS City of Tukwila, Washington Unlimited Tax General Obligation Bonds, 2016 *Final Numbers* Dated Date 12/22/2016 Delivery Date 12/22/2016 Redemption Bond Component Date Principal Coupon Price Issue Price at Maturity Serial Bonds: 12/01/2017 1,115,000.00 5.000% 103.594 1,155,073.10 1,115,000.00 12/01/2018 1,240,000.00 5.000% 106.771 1,323,960.40 1,240,000.00 12/01/2019 1,370,000.00 5.000% 109.277 1,497,094.90 1,370,000.00 12/01/2020 310,000.00 5.000% 111.516 345,699.60 310,000.00 12/01/2021 400,000.00 5.000% 113.292 453,168.00 400,000.00 12/01/2022 1,005,000.00 5.000% 114.793 1,153,669.65 1,005,000.00 12/01/2023 1,340,000.00 5.000% 115.977 1,554,091.80 1,340,000.00 12/01/2024 1,490,000.00 5.000% 116.573 1,736,937.70 1,490,000.00 12/01/2025 1,560,000.00 5.000% 117.035 1,825,746.00 1,560,000.00 12/01/2026 1,640,000.00 5.000% 117.550 1,927,820.00 1,640,000.00 12/01/2027 1,720,000.00 5.000% 116.706 2,007,343.20 1,720,000.00 12/01/2028 1,810,000.00 5.000% 115.591 2,092,197.10 1,810,000.00 12/01/2029 1,895,000.00 5.000% 114.946 2,178,226.70 1,895,000.00 12/01/2030 1,990,000.00 5.000% 114.397 2,276,500.30 1,990,000.00 12/01/2031 2,090,000.00 5.000% 113.852 2,379,506.80 2,090,000.00 12/01/2032 2,200,000.00 4.500% 107.290 2,360,380.00 2,200,000.00 12/01/2033 2,295,000.00 4.500% 106.859 2,452,414.05 2,295,000.00 12/01/2034 2,395,000.00 4.500% 106.516 2,551,058.20 2,395,000.00 12/01/2035 2,505,000.00 4.500% 106.259 2,661,787.95 2,505,000.00 12/01/2036 2,620,000.00 4.500% 106.003 2,777,278.60 2,620,000.00 32,990,000.00 36,709,954.05 32,990,000.00 Stated Weighted Maturity Interest Issue Redemption Average Date Rate Price at Maturity Maturity Yield Final Maturity 12/01/2036 4.500% 2,777,278.60 2,620,000.00 Entire Issue 36,709,954.05 32,990,000.00 12.3065 3.2504% Proceeds used for accrued interest 0.00 Proceeds used for bond issuance costs (including underwriters' discount) 209,954.05 Proceeds used for credit enhancement 0.00 Proceeds allocated to reasonably required reserve or replacement fund 0.00 Nov 30, 2016 10:28 am Prepared by Public Financial Management, Inc. Page 8 STATE OF WASHINGTON) ) ss. COUNTY OF KING M 0 1 MM I Ito ROILTAM a 11 Mr. M41, [7-2 KM E ON,] 11 LRM I I MJ 8 M [A) IMIM111 I I 1 1-11111 1_1JIM I That on January 20, 2017, at 3 -c) L' a.m.��she caused IRS Form 8038-G, completed by the City of Tukwila, Washington, with respect to its Unlimited Tax General Obligation Bonds, 2016 to be mailed by depositing the same in the United States mail, in a sealed envelope, certified delivery, first class, postage prepaid, properly addressed to the Department of the Treasury, Internal Revenue Service Center, Ogden, Utah 84201. I certify that I know or have satisfactory evidence that Grace Nguyen is the person who appeared before me, and said person acknowledged that she signed this instrument, and acknowledged it to be her free and voluntary act for the uses and purposes mentioned in the instrument. Dated: fW &AA4 A) ff . V - Notary Public Print Name My commission expires NOTARY PUBLIC STATE OF WASHINGTON 0 M 0-1 Mi I (Use this space for notarial stamp/seal) -0 to ru II Ul 4 Ln Certified Mail Fee ru $ M Extra Services & Fees (check box, add fee 3. ServiceType El Return Receipt (hardcopy) $ — Irk E] Return Receipt (electronic) $ — E:3 []Certified Mail Restricted Delivery $ C3 E:3 — E] Adult Signature Required $ — [] Adult Signature Restricted Delivery $ — r3 Postage M $ r%- Total Postage and Fee: Lrl Sent To r -q C3 Street and AWC No., or f r% - City, State, ZIP+4 v P5 'IT6"A 717F -MC TR EAS I R'Y IRS CENTER OGDEN, UTAH 84201 • Complete items 1, 2,.and 3. • Print your name and address on the reverse so that we can return the card to you. • Attach this card to the back of the mallplece, or on the front if space permits. 1. Article Addressed to' ff1-1TT=?M OGDEN, UTAH 84201 If YEF bel C CmFJAN 2 4 270 OGDEN 1-7 - VERY 3. ServiceType a Priority Mail Expr6so 13 Adult Signature 0 Reglefered mail - Adult Signature RestlIcteDobviry, Q Mb"d Mall ReSWOW 9590 9402 2002 6123 4345 1 C3 Fletu sly =ptjor MW.W 1 1 2. Article Number Marlsfer from service la am=hwy 0 Signature Confirmatlon- 40, ?015 1?30 0001 2251 5286 "1 Restricted Dellvsr� 0 Signature Goriffrmation flistricted Delivery PS sorrn 3-811, July 2-0-1-5 PS—N 7-580-02-000-9053 Domestic Return Reo 0, Department of the Treasury MMr-= Ogden, UT 84201 Re: City of Tukwila, Washington Unlimited Tax General Obligation Bonds, 2016 - $32,990,000 I I I 101 MER 11 11 Very truly yours, PACIFICA LAW GROUP LLP B cry Holli Van Valkenbul Paralegal T 206.245.1700 1191 2nd Avenue, Suite 2000 Seattle, WA 98101-3404 pacificalawgroup.com Form8038-G Information Return for Tax -Exempt Governmental Obligations (Rev. September 2011) M- Under Internal Revenue Code section 149(e) OMB No. 1545-0720 See separate instructions. Department of the Treasury 10� Internal Revenue Service Caution: If the issue price is under $100,000, use Form 8038 -GC. If Amended Return- rhprk here 10 I issuer's name 2 Issuer's employer identification number (EIN) City of Tukwila, Washington 91-6001519 38 Name of person (other than issuer) with whom the IRS may communicate about this return (see instructions) 3b Telephone number of other person shown on 3a 4 Number and street (or P.O. box if mail is not delivered to street address) --- Room/suite 5 Report number (For IRS Use Only) 6200 Southcenter Boulevard T 13 6 City, town, or post office, state, and ZIP code 7 Date of issue Tukwila, WA 98188-2544 December 22, 2016 8 Name of issue 9 CUSIP number Unlimited Tax General Obligation Bonds, 2016 8990526 10a Name and title of officer or other employee of the issuer whom the IRS may call for more information (see 10b Telephone number of officer or other instructions) employee shown on 10a Peggy McCarthy, Finance Director (206) 433.1838 JUM Type of Issue (enter the issue price). See the instructions and attach schedule. 11 12 13 14 15 16 17 18 Education . . . . . . . . . . . . . . . . . . . . . . . . . . .. Health and hospital . . . . . . . . . . . . . . . . . . . . . . . Transportation . . . . . . . . . . . . . . . . . . . . . . . . . Public safety . . . . . . . . . . . . . . . . . . . . . . . . . . .. Environment (including sewage bonds) . . . . . . . . . . . . . . . . . . Housing . . . . . . . . . . . . . . . . . . . . . . . . . . . Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other. Describe Do- . . . . . . . . 11 22 12 13 14 36,709,954 05 15 16 -36,709,954 17 18 19 20 If obligations are TANs or RANs, check only box 19a . . . . . . . . . . . . . If obligations are BANS, check only box 19b . . . . . . . . . . . . . . . . If obligations are in the form of a lease or installment sale, check box . . . . . . . . 0- El IN. 0 Description of Obligations. Complete for the entire issue for which this form is being filed. (a) Final maturity date (b) Issue price (c) Stated redemption (d) Weighted (e) Yield I I price at maturity I average maturity Part IV Uses of Proceeds of Bond Issue (including underwriters' discount) 22 Proceeds used for accrued interest . . . . . . . . . . . . . . . . . . . . . Ell -36,709,954 M 23 Issue price of entire issue (enter amount from line 21, column (b)) . . . . . . . . . . . 24 25 26 27 Proceeds used for bond issuance costs (including underwriters' discount) . . 124 1 209,9541 Proceeds used for credit enhancement . . . . . . . . . . . . Proceeds allocated to reasonably required reserve or replacement fund Proceeds used to currently refund prior issues . . . . . . . . . 05 28 Proceeds used to advance refund prior issues . . . . . . . . . . 3-0-- Nonrefunding proceeds of the issue (subtract line 29 from line 23 and enter amount here) . . . 36,500,000 111 Part V' Description of Refunded Bonds. Complete this part only for refunding bonds. 31 Enter the remaining weighted average maturity of the bonds to be currently refunded 32 Enter the remaining weighted average maturity of the bonds to be advance refunded . . . . years 33 Enter the last date on which the refunded bonds will be called (MM/DD/YYM . . . . . . 34 Enter the date(s)_ the refunded bonds were issued 00. (MM/DD/YYYY) For Paperwork Reduction Act Notice, see separate instructions. Cat. No. 63773S Form 8038-G (Rev. 9-2011) Form 8038-G (Rev. 9-2011) Page 2 35 Enter the amount of the state volume cap allocated to the issue under section 141 (b)(5) 35 0 36a Enter the amount of gross proceeds invested or to be invested in a guaranteed investment contract In b Enter the final maturity date of the GIC 10 c Enter the name of the GIC provider 1110 37 Pooled financings: Enter the amount of the proceeds of this issue that are to be used to make loans 38a If this issue is a loan made from the proceeds of another tax-exempt issue, check box 110- El and enter the following information: b Enter the date of the master pool obligation 110� c Enter the BNofthe issuer nfthe master pool obligation No- d Enter the name ofthe issuer ofthe master pool obligation 1+ 39 If the issuer has designated the issue under section 265(b)(3)(13)(i)(111) (small issuer exception), check box . . . . Do- El 40 If the issuer has elected to pay a penalty in lieu of arbitrage rebate, check box . . . . . . . . . . . . . 0, [] 41a |fthe issuer has identified ahedge, check here V0� LJ and enter the following information: b Name ofhedge provider 1+ o Type ofhedge )10� d Term ofhedge m� 42 |fthe issuer has superintegratedthe hedge, check box . . . . . . . . . . . . . . . . . . . . . 11i El 43 If the issuer has established written procedures to ensure that all nonqualified bonds of this issue are rmnediated according to the requirements under the Code and Regulations (see instructions), check box . . . . . . . . 0, Z 44 If the issuer has established written procedures to monitor the requirements of section 148, check box . . . . . 1110- Z 45a If some portion of the proceeds was used to reimburse expenditures, check here 10- El and enter the amount of reimbursement . . . . . . . . .W~ Paid Check El if Preparer Alison J. Benge KV � self-employedl P01066582 Use Only Firm's name bPacifica Law Group LLP Firm's EIN Do- 45-1446871 Firm's address llo1191 Second Avenue, Suite 2000, Seattle, Washington 98101 Phone no. (206) 245-1700 Form 8038-G (Rev. 9-2011) UNLEss'rms cRiCrimAia is PRESENTED BY ANAUTHORIZED REPRESENTATIVEOFTHP DEPOSITORYTRUSTCOMPANY, A NEW YORK CORPORATION ("DTC), TOTHE ISSUEROR ITS AGENT FOR REGISTRATION OR TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN TIIENAhffiOP CEDE& CO. ORIN SUCH OTHER NAME AS IS REQUESTED BY AN AUFMRIZED REPRESENTATIVE OFDTC (AND ANYPAYN]TINT IS MADE TO aDF& CO. Olt TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE Or DTC),AN?'?RAMFFR, PLEDGOR Offirl? USEHEM"OFFOR 11,1LUEOROTMERI;75EDFOR 70,INYPA.-M,VISli'RO,VC,FULR4ASt,itICHAS'rNERECISTF,RF.DOWNER HEREOF, CEDE& CO., HAS AN INTIVEST11FRFIN. STATE OF WASHINGTON CITY OF TUKWILA UNLIMITED TAX GENERAL OBLIGATION :r i �111 I �VM MATURITY DATE December 1, 2017 Emu= 899052JV7 The City of Tukwila, Washington (the "City"), hereby acknowledges itself to owe and for value received promises to pay to the Registered Owner identified above, or registered assigns, on the Maturity Date identified above, the Principal Amount indicated above and to pay interest thereon from December 22, 2016, or the most recent date to which interest has been paid or duty provided for until payment of this bond at the Interest Rate set forth above, payable on June 1, 2017, and semiannually thereafter on the first days of each succeeding June and December. Both principal of and interest on this bond are payable in lawful money of the United States of America. The fiscal agent of the State of Washington has been appointed by the City as the authenticating agent, paying agent and registrar for the bonds of this issue (the "Bond Registrar"). For so long as the bonds of this issue are held in fully immobilized form, payments of principal and interest thereon shall be made as provided in accordance with the operational arrangements of The Depository Trust Company ("DTC") referred to in the Blanket Issuer Letter of Representations (the "Letter of Representations") from the City to DTC. The bonds of this issue are issued under and in accordance with the provisions of the Constitution and applicable statutes of the State of Washington and Ordinance No. 2514 duty passed by the City Council on November 21, 2016 (the "Bond Ordinance"). Capitalized terms used in this bond have the meanings given such terms in the Bond Ordinance. This bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Bond Ordinance until the Certificate of Authentication hereon shall have been manually signed by or on behalf of the Bond Registrar or its duly designated agent. This bond is one of an authorized issue of bonds of like date, tenor, rate of interest and date of maturity, except as to number and amount in the aggregate principal amount of $32,990,000 and is issued pursuant to the Bond Ordinance to provide a portion of the funds necessary (a) to implement its Public Safety Plan, which includes replacing three fire stations, financing critical items such as fire trucks and other life/safety equipment as necessary, and constructing a justice center to hold the Tukwila Police Department and Municipal Court, as identified in Ordinance No. 2509 passed by the City Council on August 1, 2016 and approved by the qualified electors of the City at a special election held therein on November 8, 2016, and (b) to pay costs of issuance. The bonds of this issue are subject to redemption prior to their stated maturities as provided in the Certificate of Award. P $1,115,000 ,I Emu= 899052JV7 The City of Tukwila, Washington (the "City"), hereby acknowledges itself to owe and for value received promises to pay to the Registered Owner identified above, or registered assigns, on the Maturity Date identified above, the Principal Amount indicated above and to pay interest thereon from December 22, 2016, or the most recent date to which interest has been paid or duty provided for until payment of this bond at the Interest Rate set forth above, payable on June 1, 2017, and semiannually thereafter on the first days of each succeeding June and December. Both principal of and interest on this bond are payable in lawful money of the United States of America. The fiscal agent of the State of Washington has been appointed by the City as the authenticating agent, paying agent and registrar for the bonds of this issue (the "Bond Registrar"). For so long as the bonds of this issue are held in fully immobilized form, payments of principal and interest thereon shall be made as provided in accordance with the operational arrangements of The Depository Trust Company ("DTC") referred to in the Blanket Issuer Letter of Representations (the "Letter of Representations") from the City to DTC. The bonds of this issue are issued under and in accordance with the provisions of the Constitution and applicable statutes of the State of Washington and Ordinance No. 2514 duty passed by the City Council on November 21, 2016 (the "Bond Ordinance"). Capitalized terms used in this bond have the meanings given such terms in the Bond Ordinance. This bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Bond Ordinance until the Certificate of Authentication hereon shall have been manually signed by or on behalf of the Bond Registrar or its duly designated agent. This bond is one of an authorized issue of bonds of like date, tenor, rate of interest and date of maturity, except as to number and amount in the aggregate principal amount of $32,990,000 and is issued pursuant to the Bond Ordinance to provide a portion of the funds necessary (a) to implement its Public Safety Plan, which includes replacing three fire stations, financing critical items such as fire trucks and other life/safety equipment as necessary, and constructing a justice center to hold the Tukwila Police Department and Municipal Court, as identified in Ordinance No. 2509 passed by the City Council on August 1, 2016 and approved by the qualified electors of the City at a special election held therein on November 8, 2016, and (b) to pay costs of issuance. The bonds of this issue are subject to redemption prior to their stated maturities as provided in the Certificate of Award. The City has irrevocably covenanted with the owner of this bond that it will levy taxes annually upon all the taxable property in the City without limitation as to rate or amount and in amounts sufficient, together with other money legally available therefor, to pay the principal of and interest on this bond when due. The full faith, credit and resources of the City are irrevocably pledged for the annual levy and collection of such taxes and the prompt payment of such principal and interest. The pledge of tax levies for payment of principal of and interest on the bonds may be discharged prior to maturity of the bonds by making provision for the payment thereof on the terms and conditions set forth in the Bond Ordinance. It is hereby certified that all acts, conditions and things required by the Constitution and statutes of the State of Washington to exist and to have happened, been done and performed precedent to and in the issuance of this bond exist and have happened, been done and performed and that the issuance of this bond and the bonds of this issue does not violate any constitutional, statutory or other limitation upon the amount of bonded indebtedness that the City may incur. IN WITNESS WHEREOF, the City of Tukwila, Washington, has caused this bond to be executed by the manual or facsimile signatures of the Mayor and the City Clerk and the seal of the City to be imprinted, impressed or otherwise reproduced hereon as of this 22"d day of December, 2016. yilLq i1 X9QD Date of Authentication: December 22, 2016 WASHINGTONCITY OF TUKWILA, By /:.� This bond is one of the bonds described in the within -mentioned Bond Ordinance and is one of the Unlimited Tax General Obligation Bonds, 2016, of the City of Tukwila, Washington, dated December 22, 2016. WASHINGTON STATE FISCAL AGENT, as Bond Registrar [PO HEREBY CERTIFY, with respect to the issuance of the City's Unlimited Tax General Sources of Funds Principal Amount Original Issue Premium Total: 111111 11111�111 111111 !111 Illiqll 11111��Iiq�lillii III 11�111qi�1111;11 �11 III $ 32,990,000.00 3,719,954.05 (101,436.73) $ 36,608,517.32 Uses of Funds Project Fund $ 36,500,000.00 Costs of Issuance and Additional Proceeds(i) 108,517.32 Total Uses: $ 36,608,517.32 (1) If not needed to pay costs of issuance for the Bonds, additional proceeds in the amount of $3,550.82 will be transferred to the Debt Service Fund for the Bonds. Receipt of proceeds of the Bonds as set forth above is hereby acknowledged and confirmed on behalf of the City. On this date, the City delivered the Bonds to Morgan Stanley & Co., LLC, as underwriter. pl." gy C PegwcCarthy, Fin��Irector 10076 00002 fk253d5Ogf 2016, dated as of the date hereof, in the principal amount of $32,990,000 is hereby • STANLEY & CO., LLC By Name 1-1o14Z--Ro Title V / C 6- 'Pk2E-q 1011 Plum Street SE P.O. Box 42525 Department of Commerce Olympia, WA 98504-2525 0 Phone: 360/725-2733 Email: buc@commerce.wa.gov Issue ID: 1701-004 Date Submitted: 01/04/2017 Issuer Information Name of Issuer: City of Tukwila Address of Issuer: 6200 Southcenter Boulevard Tukwila, WA 98188 Issue Type: City/Town Principle User, if different than issuer: Counties in which the entity using King the bond proceeds is located: ❑ Various Counties - More than four ❑ Statewide Issue Type and Title Was this bond voter approved? 0 Yes ❑ No Exact title of issue: City of Tukwila, Washington Unlimited Tax General Obligation Bonds, 2016 Issue Sale Method: Competitive Bid If Competitive Bid, number of bids: 5 Debt Type: GO Bond Debt Category: Bond Series: 2016 6 -DIGIT CUSIP: 899052 New/Refund/Combo: New Issue CUSIP(S) of Refunded Bonds: Private Placement Number(s): Series or Issue Year of Refunded Bonds: Advance Refund? ❑ Yes N No Net Present Value Savings: Issue Dates Dated Date of Issue: 12/22/2016 Issue Closing Date: 12/22/2016 Date of Issue Sale: 11/30/2016 Issue Maturity Date: 12/01/2036 Issue Purpose Purpose Type: Fire Protection Purpose of Proceeds: To pay and/or reimburse the city for: (i) a portion of the cost of constructing fire stations and acquiring related firefighting apparatus and equipment; (ii) all or a portion of the cost of constructing a justice center; and (iii) costs of issuance of the bonds. Printed on 1/25/2017 11:48:18 AM Page 1 of 3 Agq�k 1011 Plum Street SE P.O. Box 42525 JJ Department of Commerce Olympia, WA 98504-2525 Phone: 360/725-2733 Email: buc@commerce.wa.gov Is this a Bond Cap issuance? 0 Yes 0 No If yes: Bond Cap Use Category: Project Title: Bond Cap Amount: Par Value and Interest Rates NEW REFUND Tax -Exempt Par Value: $32,990,000.00 Taxable par Value: $0.00 Total Par Value: $32,990,000.00 Net Tax -Exempt Interest Rate: 3.849324% 0 Variable Variable Net Taxable Interest Rate: 0% 0 Variable Variable Discount: 0 Estimate Estimate Premium: 0 Estimate Estimate Yield: 3.250387% Issue Costs Underlying Security Taxes Gross Underwriting Spread: $101,436.73 0 Estimate Underwriting Spread per $1,000: $3.07 Bond CounselFee: $31,299.00 0 Estimate Legal/Underwriter's Counsel Fee: $0.00 0 Estimate Adminsitrative/Commission Fee: $0.00 0 Estimate Feasiblity Study Cost: $0.00 El Estimate Rating Agency Fee: $24,500.00 El Estimate Trustee Fee: $0.00 0 Estimate Credit Enhancement: $0.00 0 Estimate Escrow Costs: $0.00 0 Estimate Financial Advisor Fee: $39,917.50 0 Estimate Placement Agent: $0.00 0 Estimate Bond Insurance: $0.00 0 Estimate Printing, inc. Office Statement: $750.00 0 Estimate Out -of -State Travel: $0.00 El Estimate Miscellaneous: $12,050.82 0 Estimate Issuance Team Name of Financial Advisor: Epublic Financial Management, Inc. Name of Bond Counsel: I Pacifica Law Group, LLP Name [fLead Undenwher(s): I Morgan Stan|ey&Cu.LLC Printed on1/25/2O1711:4810AM Page 2nf3 1011 Plum Street SE % P.O. Box 42525 Department of Commerce Olympia, WA 98504-2525 Phone: 360/725-2733 Email: buc@commerce.wa.gov Name Of Company Insuring Bond: Name of Bond Registrar: U.S. Bank National Association Escrow Agent/Trustee: Bond Ratings Standard & Poors: AA Moody's: Fitch: Other Attachments Are bond covenants available? 0 Yes 0 No Is an Official Statement available? E Yes 0 No Reporter Contact Information Reporter Name: Huskerette Title: Paralegal Affiliation: Pacifica Law Group Address: 1011 Second Avenue Suite 2000 Seattle, WA 98101 Email: holli.vanvalkenburg@pacificalawgroup.com Phone: (206) 602-1214 Printed on 1/25/2017 11:48:18 AM Page 3 of 3 0 T 206.245.1700 1191 2nd Avenue, Suite 2000 Seattle, WA 98101-3404 pacificalawgroup.corn M M M M 1 a 4 1 z1va 1 um= -1.1 1111 piLl" New York, New York Re: City of Tukwila, Washington Unlimited Tax General Obligation Bonds, 2016 - $32,990,004 MMIMMITIPUR M, We have acted as bond counsel to the City of Tukwila, Washington (the "Citya' have examined a certified transcript of the proceedings taken in the matter of the issuance by tl I City of its Unlimited Tax General Obligation Bonds, 2016 (the "Bonds"), dated as of the da hereof, in the aggregate principal amount of $32,990,000, issued pursuant to Ordinance No. 251 (the "Bond Ordinance") of the City for the purpose of providing funds to finance costs an reimburse the City for costs related to its public safety plan and paying costs of issuing t Bonds. Capitalized terms not otherwise defined herein shall have the meanings given such te in the I Bond Ordinance. The Bonds are subject to redemption prior to their stated maturities as provided in thr.� Official Statement prepared in connection with the issuance of the Bonds. Regarding questions of fact material to our opinion, we have relied on representations of the City in the Bond Ordinance and in the certified proceedings and on other certifications of public officials and others furnished to us without undertaking to verify the same by independent investigation. The City has not designated the Bonds as "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code"). I . The Bonds have been legally issued and constitute valid and binding generll obligations of the City, except to the extent that the enforcement of the rights and remedies of t, holders and owners of the Bonds may be limited by laws relating to bankruptcy, insolvenc moratorium, reorganization or other similar laws of general application affecting the rights 0 creditors, by the application of equitable principles and the exercise of judicial discretion. 10076 00002 fk04gb2II2 City of Tukwila Morgan Stanley & Co, LLC %ecember 22, 2016 2. The Bond Ordinance is a legal, valid and binding obligation of the City, has been duly authorized, executed and delivered and is enforceable in accordance with its terms, except to the extent that enforcement may be limited by laws relating to bankruptcy, insolvency, moratorium, reorganization or other similar laws of general application affecting the rights of creditors, by the application of equitable principles and the exercise of judicial discretion. 3. Both principal of and interest on the Bonds are payable out of annual levies of ad valorem taxes to be made upon all taxable property within the City without limitation as to rate or amount and in amounts that, together with other available funds, will be sufficient to pay such principal and interest as the same shall become due. 4. Interest on the Bonds is excludable from gross income for federal income t--" purposes and is not an item of tax preference for purposes of the federal alternative minimum t imposed on individuals and corporations; however, interest on the Bonds is taken into account determininR adjusted current earnings for the purpose of computing the alternative minimum t imposed on certain corporations. The opinion set forth in the preceding sentence is subject to t condition that the City must comply with all requirements of the Code, that must be satisfi subsequent to the issuance of the Bonds in order that the interest thereon be, and continue to b - excludable from gross income for federal income tax purposes. The City has covenanted comply with all applicable requirements. Failure to comply with certain of such requiremen may cause interest on the Bonds to be included in gross income for federal income tax purpos I retroactively to the date of issuance of the Bonds. Except as expressly stated above, we express no opinion regarding any tax consequences related to the ownership, sale or disposition of the Bonds, or the amount, accrual or receipt of interest on, the Bonds. Owners of the Bonds should consult their tax advisors regarding the applicability of any collateral tax consequences of owning the Bonds. We have not been engaged nor have we undertaken to review the accuracy, eompletene-" the extent, if any, stated in the official statement), and we express no opinion relating thereto, relating to the undertaking by the City to provide ongoing disclosure pursuant to Securities Exchange Commission Rule 15c2-12. I This opinion is given as of the date hereof and we assume no obligation to update, revi or supplement this opinion to reflect any facts or circumstances that may hereafter come to o attention or any changes in law that may hereafter occur. 1007600002fk04gb2112