HomeMy WebLinkAboutCAP 2016-07-25 Item 2C - Handout Distributed at Meeting - Preliminary 2017-2018 Biennial Budget: Foster Golf CourseCity of Tukwila
Allan Ekberg, Mayor
INFORMATIONAL MEMORANDUM
TO: Community Affairs and Parks Committee
FROM: Rick Still, Parks and Recreation Director
CC: Mayor Ekberg
DATE: July 25, 2016
SUBJECT: Preliminary Review of Foster Golf Links 2017 -18 Budget — Meeting Handout
ISSUE
This memorandum is supplemental information to the July 21, 2016 budget cover memorandum
and budget sheets that were included in the agenda packet regarding the first look at the
preliminary 2017 -18 Budget for the Foster Golf Links (FGL).
BACKGROUND
Information provided in this packet is intended to an overview of the Foster Golf Links
preliminary 2017 -18 Budget (including ATTACHMENT G), the 15 -year FGL Capital
Improvement Plan, a brief history of Foster Golf Links, 2015 Year in Review, GASB -68, and
policy issues.
DISCUSSION
Foster Golf Links operates as a Special Enterprise Fund to manage the 77 acre property and
14,400 square foot clubhouse facility. The budget narrative and proposed revenue and
expenditures can be found on pages 11 -16 of the agenda packet. "ATTACHMENT G" as it is
called in the City's budget book, Attachment A to this memorandum, is a 5 -year financial
planning model for the golf course operations.
Preliminary 2017 -18 Budget
Revenues produced by FGL pay for the golf operational costs as reflected in three areas within
the budget: Maintenance (411.576.680) Pro Shop (411.576.681) and a minimal Capital
Improvement Plan (411.594.760). A brief summary of each of these divisions' Additional
information is provided on each of these areas below.
The Maintenance Division is responsible for the golf course playability for golf and FootGolf.
Golf course maintenance includes very technical and scientific turf maintenance programs and
extensive irrigation system. The golf maintenance staff also performs many other types of
maintenance including: tree, cart path, pond, water pumps, parking lot and landscape
maintenance. A golf equipment mechanic maintains all of the various specialty golf machinery
and the rentable driving golf carts.
The Pro Shop Division provides great customer experience for the people who enjoy the
beautiful golf course and its amenities. The staff maintains the computerized tee sheet to
schedule people to play golf every seven minutes throughout the day. Staff assist clients in
renting a driving golf cart, a pull cart, and golf clubs, as well as, finding the right golf equipment
and gear to use or apparel to wear on the golf course. Staff teaches lessons, run youth camps
and coordinates and accommodates leagues and tournaments. The Pro Shop Division fuels
and cleans the golf carts after the golfers are done with their round. They also manage the
concessionaire agreement and coordinate food services for the golf tournaments.
INFORMATIONAL MEMO
Page 2
The 15 -Year FGL Capital Improvement Plan was established to extend the life expectancy of
the clubhouse and to increase playability and interest of the golf course (Attachment B). The
plan is based upon approximately $50,000 annually. Some bi- annual funds would need to be
combined to accomplish the larger projects.
Brief History of Foster Golf Links & 2015 Year in Review
Additional information about Foster Golf Links can be found in Attachment C "Brief History" and
Attachment D "2015 Year in Review."
GASB -68
An explanation of GASB -68 can be found in Attachment E. The Governmental Accounting
Standards Board (GASB) provided direction to increase visibility of financial support for pension
commitments. This is a balance sheet entry only for transparency reasons, no cash was paid to
the State related to this entry. GASB -68 will be reflected in all of the enterprise funds and the
general fund.
Policy Issues:
Policy impacts of non -golf operational costs on the solvency of the golf course operations are:
Interfund Taxes - Admission Taxes (680.54.01), Transfers -Out (Indirect Cost Allocation
597.190.00) and the Public Utilities — Surface Water (680.47.26). Items 1 & 2 below are
transferred -in the golf budget from the general fund and then transferred -out of the golf budget
to the general fund.
1. The Admission Tax was established by Ordinance Number 1657 in 1993. It is a five percent
tax on admissions for entertainment purposes in the City of Tukwila to provide revenues for
Public Safety personnel. In 1995, the ordinance was repealed and amended to exclude bowling
alley(s) in Ordinance Number 1733. In 2015, there were 101 non traffic - related calls to one
bowling alley and only 17 to Foster Golf Links. There are several golf courses in the region that
charge an admission tax but these funds are used for the golf course capital improvement
program.
2. The Indirect Cost Allocation is only charged to special enterprise funds. The program was
developed to identify the overhead costs associated with operating the city and are currently
being charged to the enterprise funds (golf, sewer, water and surface water). The overhead
costs for services from the various internal functions of the city operations: human resources,
technology services, council agendas, finance, custodial and facility maintenance. The
proposed fee for 2017 is $181,000 and $184,517 in 2018. A full review of the Indirect Cost
Allocation will be on the 2017 work plan.
3. The Surface Water Management fee is charged for the square footage of non - pervious
materials on one's property, like parking lots and roofs. This fee is charged to several general
fund accounts like, parks, golf and facilities. These funds are transferred to the Public Works
surface water fund. Parks and golf have many acres of grass and landscaping that naturally
infiltrates water unlike paved surfaces and city buildings (facilities) which actually alleviates
some of the surface water. Another model in the region provides a credit to the property owner
that has more natural infiltration on their properties.
Although FGL is a Special Enterprise Fund, the operations are dissimilar to other three utility
enterprise funds (water, sewer and surface water) in the city. The utility enterprise funds are
able to increase fees to cover the rising costs while not losing customers. Golf is a market
driven recreational opportunity that participants can choose another golf course if they do not
find value in the golf experience. If the FGL golf green fee is too much, the golfer may find a
M \Council -CAP COW CAS FEG12015\Goll budget CAP 7.25- 161FGL Prelimary Budget nandou memo IntoMemo 1.25-Id.doc
INFORMATIONAL MEMO
Page 3
better value at another golf course. Utility customers cannot choose another water, sewer or
surface water department if the rates are increased. Potentially, Tukwila's model could be
changed via the Tukwila Municipal Code.
ATTACHMENT
Attachment A:
Attachment B:
Attachment C:
Attachment D:
Attachment E:
FGL ATTACHMENT G (as titled from the budget book
FGL 15 -year Capital Improvement Plan
FGL Brief History
FGL 2015 Year in Review
GASB- 68Admission Tax
M'. \Council - CAP COW CAS FEG\201fi \Golf budget CAP 7- 25-1STGL PreII Budget handout memo InfoMemo 7- 25-167oc
Attachment A CAP 7 -25 -16
ATTACHMENT G
City of Tukwila
GOLF ENTERPRISE FUND
2017 - 2022 Analysis in 000's
Foster Golf Links Preliminary 2017 -18 Budget, July 25, 2016
REVENUES (a)
2014
Actual
2015
Actual
2016
Budget
2016
Estimate
2017
2018
2019
2020
2021
Total
Excise Tax (317.200)
3
4
3
3
4
4
4
4
4
20
Merchandise (341.702)
141
128
135
135
129
129
132
134
137
661
Snacks Sales (341.7(4)
18
22
20
20
22
22
22
23
23
113
Green Fees (347.301 k302) (1)
958
1,012
1,059
1,052
1,084
1,134
1,169
1,174
1,209
5,768
Instruction (347.601) (1)
4
10
6
6
12
12
12
12
13
61
Interest Earnings (361.110)
0
1
1
1
1
1
1
1
1
5
Rentals (Clubs & Pull Carts) (362.100)
13
13
13
13
13
13
13
14
14
67
Rentals (Riding Carts) (362.101)
170
186
177
177
190
190
194
198
202
973
Concession Proceeds (362.800)
99
100
98
100
103
106
108
110
112
540
Other - Rewards Program (369.900)
0
7
0
6
7
7
7
7
7
36
Subtotal
1,407
1,484
1,512
1,513
1,565
1,618
1,650
1,683
1,722
8,244
General Fund Contribution (397.190) (2)
600
300
300
300
300
300
300
300
300
1,500
Total Revenues
2,007
1,784
1,812
1,813
1,865
1,918
1,950
1,983
2,022
9,737
EXPENDITURES
Golf Maintenance (680)
789
862
1,024
999
1,005
1,027
1,047
1,068
1,090
5,236
Pro Shop Operations (681)
604
663
502
501
580
595
607
619
631
3,033
Golf Capital - CIP Program
48
0
50
70
50
50
50
50
50
250
Subtotal
1,441
1,525
1,576
1,570
1,635
1,672
1,704
1,737
1,771
8,519
Admission Tax (680.54) to General Fund
57
60
60
60
60
60
60
60
60
300
Indirect Cost Allocation (597.190) to General Fund (5)
197
174
177
177
181
185
188
192
196
941
Subtotal
254
234
237
237
241
245
248
252
256
1,241
Total Expenditures
1,696
1,759
1,813
1,807
1,876
1,916
1,952
1,989
2,027
9,760
FUND BALANCE
Change in Fund Balance (b)
311
24
(2)
6
(11)
1
(2)
(6)
(5)
(23)
Operating prior period adjustment (GASB -68)
(206)
(596)
Beginning Balance
610
715
142
141
141
130
131
129
122
652
Ending Balance
715
142
141
147
130
131
129
122
118
629
Fund Balance:
Reserved (`) 20% of revenue
306
281
297
302
302
313
324
330
337
1,605
Unreserved
408
(139)
(156)
(156)
(173)
(182)
(195)
(208)
(219)
(976)
Ending Balance
715
142
141
147
130
131
129
122
118
629
(a) Revenues and expenditures are increased 2% years 2019 -2021, except for Green Fees which include a fee increase in the even years.
(6) Revenues in excess of (less than) expenditures
(`) Annual reserve balance policy requirement equals 20% of the prior year operating revenues.
2017 - 2021 Financial Planning Model ›Dc-IX
ATTACHMENT G, Page 2 is not available at this time
M l8Wgef ena C1P12017- 181006100V46G 2017 -2022 (NEW) 7-20-16 fa CAP 7 -25-16 rs 7252016
Foster Golf Links Capital Imrovement Plan
Attachment B CAP 7 -25 -16
Project
Estimated
Cost
Life Exp.
Comments
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
CAPITAL BUDGET
50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
1
Pond Liner
70,000
20yrs
new fleet 4 -6yrs
63,000
70,000
0
0
40,000
40,000
40,000
40,000
40,000
40,000
40,000
40,000
40,000
40,000
40,000
2
PVI Boiler
45,000
15 yrs
45,000
3
Carpet
20,000
14 yrs
in good shape
20,000
4
Drainage pump #18 fairway
15,000
10yrs
2008
15,000
18,000
5
River irrigation pump
23,000
10yrs
2009
23,000
6
Irrigation pump /panel - pond
65,000
20yrs
2012
7
Cart Barn Heater
7,000
13yrs
7,000
8
Weather Station
16,000
8yrs
2014
20,000
20,000
20,000
20,000
20,000
20,000
20,000
16,000
20,000
20,000
20,000
20,000
20,000
20,000
20,000
9
Exterior Painting
25,000
10yrs
3,000
3,400
25,000
10
Awnings
15,000
20yrs
2,000
15,000
A
Design green /bunker renovation
20,000
3yrs
1,200
5,000
1,300
1,400
1,500
1,600
B
Bunker rebuild & drainage
121,000
2yrs
16 bunkers
1,200
15,000
1,300
15,000
20,000
1,400
1,450
30,000
1,500
C
Green renov. #1 & #3
120,000
20,000
21,200
61,300
64,700
61,400
61,400
50,000
50,000
63,600
61,450
61,600
60,000
61,500
D
Green renov. #6 & #7
120,000
60,000
60,000
E
Green renov. #10 & #13
120,000
60,000
60,000
SUBTOTAL
0
70,000
50,000
50,000
50,000
50,000
38,000
43,000
60,000
60,000
40,000
60,000
60,000
30,000
18,000
BALANCE - 50,000 20,000
0 0 0 0 -10,000 -7,000 10,000 10,000 -10,000 10,000 10,000 -20,000 -32,000
Project
Cost
Life Exp.
Comments
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
OPERATIONS BUDGET
1
Golf Carts
5yrs
new fleet 4 -6yrs
63,000
63,000
0
0
40,000
40,000
40,000
40,000
40,000
40,000
40,000
40,000
40,000
40,000
40,000
Resurface cart barn - traction &drainage
Interior painting
Awning cleaning
Spot exterior painting
Restroom counters
Replace bollards
2
Sand for Topdressing
1yr
20,000
20,000
20,000
20,000
20,000
20,000
20,000
20,000
20,000
20,000
20,000
20,000
20,000
20,000
20,000
3
Recirculation Pump (boiler water system)
3,000
5yrs
3,000
3,400
3,600
4
Replace Washer /Dryer
1,500
10yrs
2,000
5
Compressor Replacement
1,000
3yrs
1,200
1,300
1,400
1,500
1,600
6
Fountain Pumps (2x)
1,000
2yrs
1,200
1,200
1,300
1,400
1,400
1,450
1,500
SUBTOTAL
86,000
85,400
20,000
21,200
61,300
64,700
61,400
61,400
60,000
64,900
63,600
61,450
61,600
60,000
61,500
GRAND TOTAL
86,000
155,400
70,000
70,000
71,200
111,300
102,700
104,400
121,400
120,000
104,900
123,600
121,450
91,600
78,000
M:IBudget and CIPI2017- 181Go /flAttachment B FGL 2017 -18 Budget -15 yr CIP
Foster Golf Links
Brief History
Attachment C CAP 7 -25 -16
Foster Golf Links was designed on the historic homestead ofJoseph Foster, a government scout and packer, who homestead-
ed the land in 1853. A maple tree, planted by him less than a decade after the Civil War, remains on the NW portion of the
property. The golf course was built in 1925 by George Eddy and was one of the first public fee courses on the west coast.
Governor Louis F. Hart was the first on the tee for the opening of the facility. His caddy was Joe Aliment, who would soon
become the owner and operator of the facility for many years.
The Aliment family owned and operated Foster from 1952 -1977.
The City purchased Foster Golf Links after Voter Approval in 1976 to finance the purchase through General Obligation Bonds.
During consideration leading up to the ballot, there was much discussion and the formation of an Ad Hoc committee. It was
noted that it would be advantageous for the City to have such a recreation area within the community, and it would help pre-
serve green space for future generations.
Resolution 554 for November 2, 1976 ballot read, in part - "Shall the City of Tukwila incur general indebtedness ... of acquir-
ing certain real properties knows as 'The Foster Golf Course' for recreation purposes ..." The ballot measure passed and
when the sale was final in 1978, Councilperson Bohrer proclaimed at the May 1, 1978 Regular Meetings,
"Hurray, Hurray, the first of May; Tukwila bought Foster Golf Links today."
Three different concessionaires operated the facility until 1990, when the City's Parks and Recreation Department assumed
management of the facility.
The course record was set by Joe Korn on his birthday, May 23rd, 2008. Mr. Korn (Foster HS alum) blistered the course, firing
an astounding 57 - a front nine 28 was followed by an inward nine of 29.
18 -hole Golf Course
77 acres of Green Space
Most Kid - Friendly Course - Cascade Golfer Magazine
High - quality, trained staff
Instructional and Junior Golf Programs
Tournaments (80 tournaments, local and regional business and non -profit groups)
League Play (17 leagues with 250 -300 golfers each week)
Footgolf
Special Events (Glow Ball, Movie Night, League Cup, Right v Left, Hair of the Dog)
Wildlife Habitat - Bald Eagles, Osprey, Salmon, Beaver, Coyote, Heron
Washington State Dept. of Ecology & KC Riverbank Restoration Site
150 Trees planted along shoreline within past 7 years
Award - winning Billy Baroo's restaurant
Best View in Tukwila - Saturday Jazz Nights
Community Meeting Place - Businesses, Receptions, Banquets (approx. 250 events /year)
' Minutes from May 1, 1978 Regular Meeting
TUKWILA
PARKS & RECREATION
GOOD HEALTHY i'N
4
-1,, •
•
a
Foster Golf Links
2015 Year in Review
The story of the 2015 Foster Golf season was a story of rejuvenation.
Attachment D CAP 7 -25 -16
The staff at Foster worked tirelessly engaging with core customers while reaching out to new golfers on a variety of
levels. Staff continues to work as a team to produce a quality product and provide the best in customer service.
Over 51,000 rounds were played in 2015; representing a 7.5% growth over 2014. It is the most rounds and revenue
Foster has recorded since 2009. Revenue also reached its highest level in the last 6 years.
2011
2012
2013
2014
2015
Rounds
➢ The staff at Foster created and updated several round producing options for guests. The most important was a
fundamental change in our interaction and engagement with the golfing public.
➢ Foster adjusted the times on the tee sheet to create more opportunities to play. This involved several tasks to
ensure that we could still provide impeccable service while maximizing play.
➢ FootGolf continued to be a success, nearly 1,000 rounds were added 2015.
➢ A more active role in on -line presence was a focus for staff. Utilizing Internet Booking Engine's (Golf Now)
massive database, staff was able to market to over 50,000 local golfers on a variety of opportunities.
➢ The staff at Foster created both weekday and weekend afternoon specials. Recognizing there are openings in
the tee sheet, staff created dynamic pricing programs to fill those open spots.
o Included, was a weekday 9 Holes and Lunch special in conjunction with Billy Baroo's.
o An early afternoon special on the weekends that filled the gaps before FootGolf.
o The "12 Man Special" was a Sunday special. Discounted green fees were offered during Seahawks
games. What was once 0 -8 golfers during game time was soon exceeding 50 golfers.
Rounds
Rounds
Rounds
Rounds
Rounds
Jan
692
716
706
1,157
1,144
Feb
1,125
1,404
1,417
736
1,571
Mar
1,712
1,622
2,899
1,979
3,198
Apr
3,171
4,343
3,757
4,452
4,731
May
5,519
5,847
6,220
6,472
6,880
Jun
7,103
6,262
7,429
6,997
7,616
Jul
7,676
8,075
8,156
7,924
8,339
Aug
8,345
8,162
7,618
7,777
7,744
Sep
5,901
6,795
4,857
5,328
5,353
Oct
2,704
2,598
2,930
2,774
3,258
Nov
1,055
1,096
1,287
926
868
Dec
947
508
481
745
306
Total
45,950
47,428
47,757
47,267
51,008
Rounds
➢ The staff at Foster created and updated several round producing options for guests. The most important was a
fundamental change in our interaction and engagement with the golfing public.
➢ Foster adjusted the times on the tee sheet to create more opportunities to play. This involved several tasks to
ensure that we could still provide impeccable service while maximizing play.
➢ FootGolf continued to be a success, nearly 1,000 rounds were added 2015.
➢ A more active role in on -line presence was a focus for staff. Utilizing Internet Booking Engine's (Golf Now)
massive database, staff was able to market to over 50,000 local golfers on a variety of opportunities.
➢ The staff at Foster created both weekday and weekend afternoon specials. Recognizing there are openings in
the tee sheet, staff created dynamic pricing programs to fill those open spots.
o Included, was a weekday 9 Holes and Lunch special in conjunction with Billy Baroo's.
o An early afternoon special on the weekends that filled the gaps before FootGolf.
o The "12 Man Special" was a Sunday special. Discounted green fees were offered during Seahawks
games. What was once 0 -8 golfers during game time was soon exceeding 50 golfers.
Weather
Weather will always have a tremendous impact on the two most important numbers in golf...rounds and revenue.
While the 2015 annual precipitation in the area did exceed the yearly average by over 7 inches, there were several
spring and summer months that provided Foster great opportunities of growth. The great weather in the spring
allowed Foster to post positive round totals which would carry us through the extremely soggy and cold conditions that
would begin in October. In the last quarter of the year, Foster received over 2 feet of rain which lightly stunted our
momentum.
Engagement
Customer Engagement is of utmost importance to Foster Golf Links operations.. Without customer engagement, Foster
would continue spinning their wheels and not realize its full potential. Customer Engagement is a long term process that
must continue to be nurtured and expanded upon. The staff at Foster approached Customer Engagement from multiple
angles and created multiple opportunities to impact the relationships that we have with so many of our customers,
members, and guests.
The following is a sample of our Engagement Program at Foster in 2015.
Event Engagements
➢ Staff created an event for New Year's Day which sold out immediately. A day traditionally closed at Foster was
transformed into a fun and exciting event, which brought in over $1500 of revenue. This event was a total team
effort between Golf Shop staff, maintenance crew, and Billy Baroo's.
➢ Staff created The League Cup tournament. This event was open to all of our league members as a team
competition. This now annual event attracted a large number of players and created a sense of pride within
each league. The winning league, The Structures, was rewarded with a perpetual plaque in our Hall of
Champions.
➢ An additional tournament to the Men's Club Calendar. The Ron Hadford Senior Open was a huge success. Not
only was this a success financially in 2015, the event has been put onto the Men's Club future calendar and will
be played annually hereafter.
➢ Foster continued with The Moonlight Classic, the annual night
event sold out with over 100 golfers for the 10th year in a row. The
Moonlight is put on by the staff at Foster and is a small fundraiser
for Camp GoodTimes of the Ronald McDonald House.
➢ Foster held its first ever Movie Night: Caddyshack. Partnering
with a local business, the event sold out golf event followed with
the outdoor cinema showing of Caddyshack. Over 60 players
participated in the golf tournament, with another 50 -60 people
attending the movie.
Instructional Engagements
➢ The Get Golf Ready program at Foster Golf Links saw a tremendous amount of growth in 2015. The GGR
program is an instructional program that best connects with the introductory player. This 5 session program
allows us to have multiple engagement opportunities and to build course loyalty. Our summer evenings were
spent teaching new golfers about this fantastic game.
➢ Two instructors, Mary Margaret and Warren held bi- weekly instructional clinics for the Foster Ladies Club.
These 1 hour sessions were held to assist our lady members in their continuing goal of improving their games.
We were able to create a tremendous amount of goodwill and once again multiple engagement opportunities.
➢ This was the second year of revitalizing the program with Junior Golf. Foster made great strides in finding more
young golfers and having them commit to an annual instruction and play program. Partnering with the PGA, we
were able to bring PGA Junior Golf League and its sister program for the older teenage players.
➢ The Foster PGA JGL team traveled around the Puget Sound
playing other golf courses junior teams. Teams played at
private country clubs like Meridian Valley and Tam 0 Shanter.
➢ Instructional staff was able to prepare 7 junior golfers for their
High School teams. 6 of them made their respective teams as
freshman!
➢ Deron Pointer, instructor, was also named Head Coach of the
Foster High School Golf Team. This is a nice honor for Deron
and also provides us an inroad into the local schools. Deron is
committed to resurrecting the Foster HS Golf Team to its past
heights.
The Golf Course
The maintenance crew did a fantastic job on the golf course in 2015. While the summer weather will be remembered
for years it did provide multiple challenges. The mini - drought conditions between May -July created difficulties in
watering the golf course properly to maintain its optimum playing conditions. The crew worked hard to correct any
trouble areas in irrigation and keeping a proper amount of water on the course to be aesthetically pleasing and
providing an optimum growing condition for the continued health of the turf.
The great summer time weather ended abruptly in the fall. Foster recorded over 2 feet of rain in the last 3 months of
2015. While the impact was felt in rounds and revenue, it additionally created numerous challenges for the crew.
One major project that has been undertaken has seen very positive results, in 2014 Foster purchased a Core Aerator and
followed it up with the purchase of a new Top Dresser. These pieces of equipment have allowed the staff to improve
the drainage and playing conditions at Foster.
The two main areas that the crew addressed in 2015 were the Teeing Grounds and the areas surrounding the putting
surfaces (the surrounds). These areas have seen a budding revitalization in their health and playability. The firmer
ground is not only a better playing surface but more importantly it is safer for the playing public.
For the semi - annual putting green aerification, Curt Chandler working with the latest information from the GCSAA, went
outside the traditional box and updated the process. By changing from hollow to solid tines, from large to small holes,
and by adjusting the sanding process, the maintenance crew was able to complete their task in less time. Another major
result was the speed of the putting green recovery. What historically was a multi week process was down to just a few
days. This unexpected surprise allowed us to have a more desirable playing condition, which directly resulted in an
increase in rounds and revenue.
An aside project at Foster was completed by the Department of Ecology and King County. Near the 15th Tee Box, the
river bank was sloughing into the Duwamish River. The past introduction of Wrap Rock had created an eddy that was
eating away at the golf course. The repair project involved the driving of multiple pylons and the chaining up of several
large trees and root balls. This will allow the silt flowing downriver to collect and slowly rebuild the river bank.
Conclusion
Foster made some huge strides in 2015 as we strive to fulfill our potential. We will continue to highlight our
commitment to Customer Engagement. This will include more Engagement Events and Instructional Opportunities as
we continue to build upon our successes from this past year.
We will also emphasize our commitment to Junior Golf, especially a more direct approach with the Tukwila HS. We
anticipate a healthy growth in The Junior Golf Program, with added teams in the PGA Jr Golf and training High School
players.
Attachment E CAP 7 -25 -16
GASB -68 Explanation
The Governmental Accounting Standards Board (GASB) establishes accounting and financial reporting
standards for U.S. state and local governments that follow Generally Accepted Accounting Principles
(GAAP). The GASB develops and issues accounting standards intended to promote financial reporting
that provides useful information to taxpayers, public officials, investors, and others who use financial
reports. The standards are recognized as authoritative by state and local governments including the
City of Tukwila.
GASB 68 (Accounting and Financial Reporting for Pensions) is intended to improve information
provided by state and local governmental employers about financial support for pensions by increasing
visibility of pension commitments. GASB 68 made two changes. First, it moved pension funding
information out of the footnotes and onto the balance sheets of employers. Previously, the City only
had to disclose pension related information. Second, it required employers that participate in cost -
sharing plans (i.e. PERS 1, 2, 3; PSERS 2; and LEOFF 1, 2) to provide information regarding their
share of the net pension liability on their books.
The reason the GASB implemented statement 68 is because, even though pension plans in
Washington state are either fully or almost fully funded, many other states are severally underfunded.
The GASB wanted to bring visibility to this issue and require reporting the liability. The statement
applies to all state and local governments, regardless of funding levels. The City was required to
implement this statement for reporting year 2015. Implementing this statement resulted in a prior
period adjustment that reduced 2015 beginning fund balance by $9.5 million for governmental funds
and $2.3 million for enterprise funds. Additionally, the City then needed to adjust the liability to reflect
the change in liability in fiscal year 2015. The liability was allocated based on employee count in each
fund. Going forward, the City will need to adjust the liability each year to reflect the change in the
pension liability. If the liability is reduced, then fund balance will increase but if the liability increases,
then fund balance will decrease. It is important to note that this is a balance sheet entry only, no cash
was paid to the State related to this entry.
The impact to the enterprise funds is as follows:
Effect on Net Position
Surface
Water Sewer Golf Course Water Total
Prior period (524,409) (304,471) (596,317) (883,057) (2,308,254)
Current period 24,573 14,269 27,944 41,379 108,165
Effect through 12/31/2015 (499,836) (290,202) (568,373) (841,678) (2,200,089)