Loading...
HomeMy WebLinkAbout2009 Comprehensive Annual Financial Report (CAFR)The City of Tukwila, Washington COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Fiscal Year Ended December 31, 2009 Duwamislr River From East Marginal Way The City of Tukwila, Washington COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended December 31, 2009 Prepared by the City of Tukwila, Finance Department Shawn Hunstock, Finance Director JIM HAGGERTON, MAYOR TUKWILA CITY COUNCIL Dennis Robertson, President Joe Duffle Allan Ekberg Joan Hernandez Verna Griffin Kathy Hougardy De'Sean Quinn CITY OF TUKWILA: 2009 CAFR TABLE OF CONTENTS COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended December 31, 2009 TABLE OF CONTENTS Page I. INTRODUCTORY SECTION Table of Contents Administrative Organizational Structure, Principal Officials, and Council Committees 1 Letter of Transmittal 3 Certificate of Achievement 9 II. FINANCIAL SECTION Auditor's Report 11 Management's Discussion and Analysis 13 Basic Financial Statements Government -wide Financial Statements: Statement of Net Assets 31 Statement of Activities 32 Fund Financial Statements: Balance Sheet — Governmental Funds 35 Statement of Revenues, Expenditures, and Changes in Fund Balance — Governmental Funds 36 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 37 Statement of Revenues, Expenditures, and Changes in Fund Balance — Budget and Actual: General Fund 38 Arterial Street Fund 39 Statement of Net Assets — Proprietary Funds 42 Statement of Revenues, Expenses, and Changes in Fund Net Assets — Proprietary Funds 43 Statement of Cash Flows — Proprietary Funds 44 Statement of Fiduciary Net Assets — Fiduciary Fund 48 Statement of Changes in Fiduciary Net Assets — Fiduciary Fund 49 Notes to the Financial Statements 51 Required Supplemental Information: Firemen's Pension Trust Fund 86 Retiree Medical and Long -Term Care Benefits for LEOFF I Employees 86 Notes to the Required Supplementary Information 87 Combining and Individual Fund Financial Statements and Schedules: Combining Balance Sheet — Non -Major Governmental Funds 90 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances — Non -Major Governmental Funds 91 Combining Balance Sheet — Non -Major Special Revenue Funds 94 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances — Non -Major Special Revenue Funds 95 Schedules of Revenues, Expenditures, and Changes in Fund Balances — Budget and Actual: Hotel /Motel Tax Fund 96 Street Fund 97 CITY OF TUKWILA: 2009 CAFR TABLE OF CONTENTS Schedules of Revenues, Expenditures, and Changes in Fund Balances — Budget and Actual: (continued) Page Contingency Fund 98 Fire Equipment Cumulative Reserve Fund 99 Drug Seizure Fund 100 Combining Balance Sheet — Non -Major Debt Service Funds 102 Combining Statement of Revenues, Expenditures, and Changes in Fund Balance — Non -Major Debt Service Funds 103 Combining Balance Sheet — Non -Major Capital Project Funds 106 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances — Non -Major Capital Project Funds 107 Combining Statements of Net Assets — Internal Service Funds 110 Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets — Internal Service Funds 111 Combining Statement of Cash Flows — Internal Service Funds 112 III. STATISTICAL SECTION Schedule Net Assets by Component 1 116 Changes in Net Assets 2 118 Fund Balances, Governmental Funds 3 119 Changes in Fund Balances of Governmental Funds 4 120 General Government Tax Revenues by Source 5 122 Property Tax Levies and Collections 6 123 Assessed and Estimated Actual Value of Taxable Property 7 124 Property Tax Rates — Direct and Overlapping Governments 8 125 Principal Property Taxpayers 9 126 Retail Sales Tax Collections by Sector 10 128 Sales Tax Rate Direct and Overlapping Governments 11 130 Ratios of Outstanding Debt by Type 12 131 Ratios of General Bonded Debt Outstanding 13 132 Computation of Direct and Overlapping Debt 14 133 Legal Debt Margin Information 15 134 Revenue Bond Coverage — Water, Sewer, and Surface Water Bonds 16 136 Demographic Statistics 17 138 Principal Employers 18 139 Staffing Levels by Department 19 140 Operating Indicators by Function 20 141 Capital Assets by Function 21 142 ii CITY OF TUKWILA: 2009 CAFR ADMINISTRATIVE ORGANIZATIONAL STRUCTURE, PRINCIPAL OFFICIALS ADMINISTRATIVE ORGANIZATIONAL STRUCTURE AND PRINCIPAL OFFICIALS c 1 MUNICIPAL COURT Kimberly Walden CITIZENS OF TUKWILA MAYOR Jim Haggerton CITY ADMINISTRATOR Steve Lancaster CITY COUNCIL CITY ATTORNEY Kenyon Disend, PLLC FINANCE Shawn Hunstock INFORMATION TECHNOLOGY Mary Miotke / HUMAN RESOURCES Stephanie Brown ■ / COMMUNITY DEVELOPMENT Jack Pace 1 ■ FIRE Nick Olivas PARKS & RECREATION Rick Still 1 / i PUBLIC WORKS Bob Giberson POLICE David Haynes / COUNCIL COMMITTEES FINANCE AND SAFETY COMMITTEE De'Sean Quinn, Chairperson Kathy Hougardy, Member Allan Ekberg, Member COMMUNITY AFFAIRS AND PARKS Joe Duffie, Chairperson Joan Hernandez, Member Verna Seal, Member 1 TRANSPORTATION Verna Seal, Chairperson Joan Hernandez, Member De'Sean Quinn, Member UTILITIES Kathy Hougardy, Chairperson Joe Duffie, Member Allan Ekberg, Member CITY OF TUKWILA: 2009 CAFR ADMINISTRATIVE ORGANIZATIONAL STRUCTURE, PRINCIPAL OFFICIALS 2 City of Tukwila 6200 Southcenter Blvd, Tukwila, WA 98188 Jim Haggerton, Mayor June 30, 2010 Honorable Jim Haggerton, Mayor Members of the Tukwila City Council Citizens of Tukwila City of Tukwila 6200 Southcenter Boulevard Tukwila, Washington 98188 -2599 Subject: TRANSMITTAL OF 2009 COMPREHENSIVE ANNUAL FINANCIAL REPORT Dear Mayor, Council Members, and Citizens: State law requires that cities publish financial statements in conformity with Generally Accepted Accounting Principles (GAAP), which are audited in accordance with generally accepted auditing standards by the State Auditor's Office, under the Revised Code of Washington (RCW) 43.09.230. Therefore, we issue and transmit to you the City of Tukwila's Comprehensive Annual Financial Report (CAFR) for the fiscal year ended December 31, 2009. This transmittal letter provides an overview of the report and the financial condition of the City. It also provides insight into the history of the City and the economic conditions affecting it, and describes the systems and controls employed by the Finance department. The Comprehensive Annual Financial Report has several significant uses. First, it provides a general overview of the City's finances to the general public and taxpayers. Second, it is referenced by bond buyers and rating agencies to evaluate the City's fiscal stability and creditworthiness. Finally, the CAFR is a series of financial statements that have been audited by the State Auditor's Office and provides assurances that assets are safeguarded and funds are expended as they were legally appropriated in the adopted budget. I. INTRODUCTION A. MANAGEMENT REPRESENTATION The Tukwila Finance Department prepared the report and accepts responsibility for the accuracy, completeness, and fairness of presentation of the information included. The data is believed to be accurate in all material respects, and it is believed that the data is 3 CITY OF TUKWILA: 2009 CAFR LETTER OF TRANSMITTAL presented in a manner that fairly sets forth the results of operations and financial position of the City as measured by the financial activity of the City's various funds. All disclosures necessary to enable the reader to gain the maximum understanding of the City's financial activity have been included. The report has been prepared in conformance with GAAP and in conformance with financial reporting standards issued by the Governmental Accounting Standards Board (GASB). City management has developed and evaluated a comprehensive internal control structure that is designed to provide reasonable, but not absolute, assurance regarding the safeguarding of assets against loss from unauthorized use or disposition, and the reliability of financial records for preparing financial statements and maintaining accountability for assets. The concept of reasonable assurance is based on the assumption that the cost of internal controls should not exceed the benefits expected to be derived. As management, we attest that, to the best of our knowledge and belief, this financial report is complete and reliable in all material aspects. As a recipient of federal, state and county financial assistance the City is required to undergo an annual single audit in conformity with the provisions of the Single Audit Act amendments of 1996 and U.S. Office of Management and Budget Circular A -133, Audits of States, Local Governments, and Non - profit Organizations. The audit is conducted by the State Auditor's Office in conjunction with the City's annual independent audit. Information related to this single audit includes the Schedule of Expenditures of Federal Awards, findings and recommendations, if applicable, and auditor's reports on internal control and compliance with applicable laws, regulations, contracts and agreements. The results of the City's annual single audit for the fiscal year ended December 31, 2009 provided no instances of material weaknesses in the internal control structure or significant violations of applicable laws. B. ORGANIZATION OF THE REPORT The report is divided into three sections: the Introductory Section, the Financial Section, and the Statistical Section. The Introductory Section contains the table of contents, a list of the City's principal officials, an organizational chart, this letter of transmittal, and the Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officers' Association of the United States and Canada (GFOA) for the 2008 CAFR. The Financial Section contains the Auditor's Report, completed by the Washington State Auditor, Management's Discussion and Analysis, Government -Wide Financial Statements, the Fund Financial Statements, Notes to the Financial Statements and Other Required Combining and Supplemental Information. The Statistical Section, which is unaudited, contains a range of statistical tables and charts that present various financial, economic, social, and demographic data about the City. This information depicts various trends that have affected the fiscal condition of the City over the last ten years. C. REPORTING ENTITY The City of Tukwila is a non - charter optional code City, operating under Section 35A of the Revised Code of Washington. It has a strong Mayor form of government with a seven - member City Council elected by the voters of the City. Councilmembers are CITY OF TUKWILA: 2009 CAFR LETTER OF TRANSMITTAL elected at large rather than by district, are responsible for establishing the general guidelines and policies for the City, and each serves a four -year term. The Mayor appoints the City Administrator as the City's chief administrative officer responsible for carrying out the policies and direction set by the Mayor and City Council. The City of Tukwila provides a full range of local government services. These services include police and fire protection; emergency medical services; construction and maintenance of streets and traditional municipal infrastructure; planning and zoning; park and recreational activities; and cultural events. In addition, the City operates an equipment maintenance /rental fund and a utility. The City operates its own municipal 18 -hole golf course. The City provides sewer, water, and surface water services. The City has a municipal court for traffic infractions, misdemeanors, and gross misdemeanors. Other jurisdictions provide jail services to the City. Tukwila residents receive library services from the King County Library System. Incorporated in 1908, the City of Tukwila abuts the City of Seattle on the north, and is one mile east of Seattle- Tacoma International Airport. Tukwila has a small residential population of 18,170; however, the daytime shopper /visitor and working population can reach over 150,000 during the holiday shopping season. II. ECONOMIC CONDITION A. SUMMARY OF LOCAL ECONOMY A diverse regional economy is led by The Boeing Company and other smaller manufacturing companies. The Puget Sound region is a major international trade gateway to the Far East. Also, high tech industries such as Microsoft have made their home in this region. This diversity has now become the strength of our economic well being. Tukwila enjoys a strong position in the Puget Sound region as well as the State of Washington. Tukwila's location at the crossroads of the State's most significant freeway network (the 1 -5 and 1 -405 interchange) and planned multi -modal transit center and commuter Tight rail reinforces the well - established advantages of Tukwila as a business location. These major transportation systems and strategic access to Seattle, Tacoma, Sea -Tac Airport and the population base of the south Puget Sound region provide a natural setting for commercial and industrial activity. Tukwila enjoys one of the largest sales tax bases in the State of Washington, with $14.4 million in revenue for 2009. The total combined retail sales activity amounted to approximately $1.7 billion in 2009. While this represents a significant decline in sales tax revenue and retail activity within Tukwila, as compared to 2008, the City has been aggressively adjusting its budget to meet the new revenue stream. The strength of the City's retail sales activity is the Westfield Southcenter Shopping Center and Parkway Plaza retail development, which combine to create one of the largest retail concentrations on the west coast. This strength has attracted new retail establishments to locate in Tukwila. 5 CITY OF TUKWILA: 2009 CAFR LETTER OF TRANSMITTAL This diversified revenue base is further supported by an assessed valuation of $4.98 billion as well as our above - mentioned sales tax base, and has allowed the City to pursue a long -term capital investment program. B. FUTURE ECONOMIC OUTLOOK Tukwila is in a continuous process of both short -term and long -term financial planning. Short -term financial planning is inherent in the development of the City's biennial budget. Concurrent with the biennial budget is the City's long -term capital needs and potential funding is assessed with the development of the six -year capital facility plan. The capital facility plan is a component of the Comprehensive Master Plan, which outlines how the City should look and function in twenty years and creates a vision that can be realistically implemented. An integral part of this vision is determining how to allocate the City's financial resources to achieve the desired goals. The City annexed an area south of the urban center on December 31, 2009. The annexation included approximately 259 acres of mostly undeveloped land. The City also entered into a development agreement with the principle owner of property within the annexation area. The agreement calls for the development of approximately 512 acres, commonly known as Tukwila South, including the recently annexed 259 acres. The master plan for Tukwila South anticipates the creation of 25,000 jobs through the addition of 5 to 10 million square feet of office technology / flex -tech space, 1 to 2 million square feet of goods and services, and 700 to 1,900 units of housing. In addition, there will be significant investment in infrastructure within the development area, including the realignment and construction of Southcenter Parkway for approximately $22.3 million in total costs. The developer has given the City a number of revenue guarantees related to Southcenter Parkway construction costs, and operations and maintenance costs within the development area. The revenue guarantees are secured by letters of credit held by an independent third party, as well as deeds of trust for certain properties within the development area. The term of the development agreement is 15 years, during which time there is expected to be a multi - million dollar investment in private and public facilities, increasing the long -term economic base of the City. Outside of the development area, growth is predicted to continue but not at the rate experienced in the late 1990's and early 2000's. The challenge is to control costs that grow at a faster rate than revenue. Areas of concern are health care costs and public safety costs related to incarceration and labor contracts. Continuing to fund these sectors will draw valuable resources from other areas such as infrastructure replacement and capital programs. As Tukwila moves forward, economic conditions will be continually monitored and adjustments to City spending and services made to maintain the City's financial health. Long -term plans will be focused on ensuring the City continues to be an economically strong and viable City. Towards that end, the City adopted a contingency reserve policy in December 2009, which calls for the eventual establishment of two months of general fund operations in reserve. It is expected the reserve will be built up over a four to five year period beginning in 2011. CITY OF TUKWILA: 2009 CAFR LETTER OF TRANSMITTAL III. OTHER RELEVANT INFORMATION A. INDEPENDENT AUDIT State law requires an annual audit of all City books of accounts and financial records by the Office of the State Auditor, which is headed by an independently elected State official, the State Auditor. The Auditor has broad legal authority to inquire into all financial and legal compliance matters and such audits are considered equal to audits by certified public accounting firms. The 2009 financial audit of the City is complete and was conducted in conformance with Generally Accepted Auditing Standards. The financial statements of all City funds have been included in this audit. The City has been given an unqualified opinion for 2009. Please see the Auditor's Report. The State Auditor's Office also audits the City's administration of its federal grants under the single audit concept. B. MANAGEMENT DISCUSSION AND ANALYSIS Accounting principles generally accepted in the United States of America require that management provide a narrative introduction, overview and analysis to accompany the basic financial statements in the form of Management's Discussion and Analysis (MD &A). This letter of transmittal is designed to complement the MD &A and should be read in conjunction with it. Tukwila's MD &A can be found immediately following the independent auditor's report. B. AWARDS The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Tukwila for its comprehensive annual financial report for the fiscal year ended December 31, 2008. This was the 22nd consecutive year that the government has achieved this prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current comprehensive annual financial report continues to meet the Certificate of Achievement Program's requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. C. ACKNOWLEDGMENTS Preparation of this report could not have been accomplished without the professional, efficient, and dedicated services of the entire staff of the Finance Department and the cooperation of other City departments. Their long hours of assistance with the preparation and review of this report are greatly appreciated. The Mayor, City Administrator and City Council are to be complimented for their encouragement, CITY OF TUKWILA: 2009 CAFR LETTER OF TRANSMITTAL interest, and support in conducting the financial operations of the City in a sound and progressive manner. The efficient assistance of examiners from the Office of the State Auditor is also appreciated. Staff who had a direct role in preparing Tukwila's 2009 Comprehensive Annual Financial Report take great pride in their work, and the entire team who worked on this project is to be commended. Respectfully submitted, 4ittaiyh_ 1,d1t) Shawn Hunstock, CPA Finance Director CITY OF TUKWILA: 2009 CAFR LETTER OF TRANSMITTAL Certificate of Achievement for Excellence in Financial Reporting Presented to City of Tukwila Washington For its Comprehensive Annual Financial Report for the Fiscal Year Ended December 31, 2008 A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers Association of the United States and Canada to government units and public employee retirement systems whose comprehensive annual financial reports (CAFRs) achieve the highest standards in government accounting and financial reporting. President Executive Director 9 CITY OF TUKWILA: 2009 CAFR LETTER OF TRANSMITTAL Washington State Auditor Brian Sonntag INDEPENDENT AUDITOR'S REPORT June 29, 2010 Mayor and City Council City of Tukwila Tukwila, Washington We have audited the accompanying financial statements of the governmental activities, the business -type activities, each major fund and the aggregate remaining fund information of the City of Tukwila, King County, Washington, as of and for the year ended December 31, 2009, which collectively comprise the City's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the City's management. Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America 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 of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business -type activities, each major fund and the aggregate remaining fund information of the City of Tukwila, King County, Washington, as of December 31, 2009, and the respective changes in financial position and, where applicable, cash flows thereof, and the respective budgetary comparison for the General Fund and Arterial Street Fund for the year then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we will also issue our report dated June 29, 2010, . on our consideration of the City's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. That report will be issued under separate cover in the City's Single Audit Report. The purpose of that report is to describe the scope of our testing of internal 11 Insurance Building, PO 13o 40021 •Olympia. Washington 98504.0021 • 136U) 9112-0370 • TDD Relay (800 ti ;_l 3SN FAX (360) 753 -0646 • hum'tiwwww.sao.wa.gw, control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. The management's discussion and analysis on pages 13 through 28, pension trust fund information and information on postemployment benefits other than pensions on pages 86 through 87 are not a required part of the basic financial statements but are supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. Our audit was performed for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The accompanying information listed as combining and individual fund financial statements and schedules on pages 90 through 112 is presented for purposes of additional analysis and is not a required part of the basic financial statements. This information has been subjected to auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. The information identified in the table of contents as the Introductory and Statistical Sections is presented for purposes of additional analysis and is not a required part of the basic financial statements of the City. Such information has not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion on it. Sincerely, BRIAN SONNTAG, CGFM STATE AUDITOR 12 CITY OF TUKWILA: 2009 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS MANAGEMENT'S DISCUSSION AND ANALYSIS For the Year Ended December 31, 2009 The discussion and analysis of the City of Tukwila's financial performance provides an overall review of the City's financial activities for the year ended December 31, 2009. The intent of this discussion and analysis is to look at the City's financial performance as a whole; readers should also review the transmittal letter, and the basic financial statements to enhance their understanding of the City's financial performance. FINANCIAL HIGHLIGHTS • Total net assets, the amount by which total assets exceed total liabilities, equal $237.7 million. A total of 82 percent or $193.9 million of total net assets is invested in capital assets such as streets, land, buildings, equipment, and other improvements. The remaining net assets of $43.8 million is available for debt service, capital projects, and to meet the government's ongoing activities and obligations. • The government's net assets increased by $12.9 million in 2009. Governmental activities provided a $13.3 million increase and business -type activities experienced a decrease accounting for the difference. • As of the close of the current fiscal year, the City of Tukwila's governmental funds reported combined ending fund balances of $23,749,527 a decrease of $4,979,810 in comparison with the prior year. • At the end of the current fiscal year, unreserved fund balance for the general fund was $7,371,530, or 16 percent of total general fund expenditures. • The City of Tukwila's total debt increased by $4,410,821 during the current fiscal year. The City incurred $6.9 million in additional debt payable to the SCORE Development Authority in connection with acquisition and development of the new SCORE jail facility (see Note 7, Joint Ventures, for more information). This increase was offset by $2.5 million in payments on existing debt. USING THIS ANNUAL FINANCIAL REPORT This annual report consists of a series of financial statements and notes to those statements. These statements are organized so the reader can understand the City of Tukwila as a financial whole or as an entire operating entity. The statements then proceed to provide an increasingly detailed look at specific financial conditions. The Statement of Net Assets and Statement of Activities provide information about the activities of the whole City presenting both an aggregate view of the City's finances and a longer -term view of those assets. Major fund financial statements provide the next level of detail. For governmental funds, these statements tell how services were financed in the short -term as well as what dollars remain for future spending. The fund financial statements also look at the City's most significant funds with all other non -major funds presented in total in one column. Overview of the Financial Statements The City's basic financial statements are presented in three parts: 13 CITY OF TUKWILA: 2009 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS 1) Government -wide financial statements 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. Government -wide Financial Statements The government -wide financial statements are designed to be corporate -like in that all governmental and business -type activities are consolidated into columns which add to a total for the City. The focus of the Statement of Net Assets is designed to be similar to bottom -line results for the City and its governmental and business -type activities. This statement combines and consolidates governmental funds' current financial resources (short-term spendable resources) with capital assets and long -term obligations. Over time, increases or decreases in net assets 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 cost of various governmental services and /or subsidy to various business -type activities. The revenue generated by the specific functions (charges for services, grants, and contributions) is compared to the expenses for those functions to show how much each function either 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, court), public safety, physical environment, economic environment, transportation, mental and physical health, and culture and recreation. The City's business -type activities include a water and sanitary sewer utility, surface water utility, and a municipal golf course. Governmental activities are primarily supported by taxes, charges for services, and grants while business -type activities are self - supporting through user fees and charges. Fund Financial Statements The Fund Financial Statements are the traditional reporting format for governments. A fund is a fiscal and accounting entity with a self - balancing set of accounts used to account for specific activities or meet certain objectives. While the government -wide statements present the City's finances based on the type of activity (general government vs. 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. Governmental funds are used to account for essentially the same functions that are reported as governmental activities in the government -wide financial statements. The governmental major fund presentation is used, utilizing the "sources and uses of resources" basis. This is the manner in which the budget is typically developed. The basis of accounting is different between the governmental fund statements and the government -wide financial statements. The governmental fund statements focus on the near -term revenues /financial resources and expenditures while the government -wide financial statements include both near -term and long -term revenues /financial resources and expenditures. The information in the governmental fund statements can be used to evaluate the City's near -term financing requirements and immediate fiscal health. Comparing the governmental 14 CITY OF TUKWILA: 2009 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS fund statements with the government -wide statements can help the reader better understand the long -term impact of the City's current -year financing decisions. Because the basis of accounting is different between the governmental fund statements and the government -wide financial statements, reconciliations are provided. The reconciliation between the governmental fund Balance Sheets and the government -wide Statement of Net Assets is found on the bottom of the governmental funds' 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 eighteen individual governmental funds. Of these, three are considered major (the general fund, the arterial street fund, and the land acquisition recreation & park development fund) and are presented separately in the governmental fund Balance Sheet and the governmental fund 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. The City maintains budgetary control over its operating funds through the adoption of a biennial budget. Budgets are adopted at the fund level according to state law. Budgetary comparison statements are presented for the general and arterial street funds within the financial statements. Other budgetary comparison schedules are included following the other government funds' combining statements in this report. Proprietary funds are used by governments to account for their business -type activities and use the same basis of accounting as utilized in private industry. Business -type activities provide specific goods or services to a group of customers that are paid for by fees charged to those customers. There is a direct relationship between the fees paid and the services rendered. The City has two types of proprietary funds: enterprise funds and internal service funds. Enterprise funds are used to account for goods and services provided to citizens, while internal service funds are used to account for goods and services provided internally to various City departments. Enterprise funds report the same functions presented as business -type activities in the government - wide statements, but in greater detail. The City's enterprise fund statements provide information on the City's three utilities (water, sanitary sewer, surface water) as well as the City -owned golf course. Internal service funds are an essential accounting tool used to accumulate and allocate costs internally among the City's various functions. The City uses internal service funds to account for its fleet of vehicles, and its insurance premiums. Internal service funds benefit both governmental and business -type activities, and are allocated accordingly in the government -wide statement of activities. 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. 15 CITY OF TUKWILA: 2009 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS 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. Other Information In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning a schedule of funding progress for the Firemen's Pension Trust Fund and other post - employment benefits. Additional pension benefit information is found in Note 8. The combining statements referred to earlier in connection with non -major governmental funds, nonmajor enterprise funds, and internal service funds are presented in the section titled "Combining and Individual Fund Financial Statements and Schedules ". Government -wide Financial Analysis As noted earlier, net assets may serve over time as a useful indicator of a government's financial position. For the City of Tukwila, total assets exceeded liabilities by $237,716,851 at December 31, 2009. The largest portion of the City's net assets, $193.9 million, or 82 percent, reflects its investment in capital assets (e.g., land, buildings, machinery, and equipment) less any related debt used to acquire those assets that is still outstanding. The City of Tukwila uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City of Tukwila's investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities: City of Tukwila Net Assets Governmental Activities Business -type Activities Total As of 12/31/09 As of 12/31/08 As of 12/31/09 As of 12/31/08 As of 12/31/09 As of 12/31/08 Current and other assets $ 46,194,349 $ 42,781,792 $ 12,551,672 $ 14,491,597 $ 58,746,021 $ 57,273,389 Capital assets, net of accumulated depreciation 172,742,658 156,538,853 54,235,914 53,906,634 226,978,572 210,445,487 Total assets 218,937,007 199,320,645 66,787,586 68,398,231 285,724,593 267,718,876 Long -term liabilities Other liabilities Total liabilities 16,895,646 19,424,007 16,157,533 16,898,070 33,053,179 36,322,077 13,802,779 4,956,887 1,151,784 1,653,823 14,954,563 6,610,710 30,698,425 24,380,894 17,309,317 18,551,893 48,007,742 42,932,787 Net assets Invested in capital assets, net of related debt 155,847,012 136,742,368 38,052,488 36,071,402 193,899,500 172,813,770 Restricted 16,360,097 19,720,546 438,619 439,100 16,798,716 20,159,646 Unrestricted 16,031,473 18,476,837 10,987,162 13,335,836 27,018,635 31,812,673 Total net assets $ 188,238,582 $ 174,939,751 $ 49,478,269 $ 49,846,338 $ 237,716,851 $ 224,786,089 The governmental unrestricted net assets comprise $16 million. The general fund unrestricted net assets are available for functions such as public safety employee salaries and supplies, park and road maintenance, and other general government services. The unrestricted net assets of business - type activities, $10.9 million, may only be spent on activities related to one of the three City utilities (water, sewer, and surface water) or to the golf course activities. Examples of utility activities include 16 CITY OF TUKWILA: 2009 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS maintenance of water /sewer mains, pump and lift stations, storm drain flushing, and water meter reading. Restricted governmental fund net assets are $16.3 million and are subject to constitutional, legal or external restrictions for purposes such as capital project construction and debt service. The $3.4 million increase in current and other assets for governmental activities is comprised of a $7.4 million increase in equity in joint ventures due to the City's participation in the SCORE joint venture, a $1.4 million increase in receivables due from other governments due to a $1.285 million receivable from King County Flood Control District for reimbursement of Howard Hanson flood prevention and mitigation costs, and a decrease in cash and investments of $6.2 million. The decrease of $1.9 million in current and other assets for business -type activities is comprised of a decrease in cash and investments. Governmental capital assets increased by $16 million due to $3.6 million of assets acquired through an annexation, $9 million Tukwila International Boulevard street improvements and $3.4 million in various other street projects. The $8.8 million increase in other liabilities for governmental activities is due to the acquisition of $6.8 million of additional debt payable to the SCORE Development Authority and to a $1 million increase in the unfunded other post employment benefit liability. The decrease of $2.3 million in unrestricted net assets for business -type activities relates to additional expense from an interfund utility tax established in 2009 and totaling $1.8 million for the year, a net transfer out to the general fund for indirect costs of $1.6 million and a revenue increase from charges for services of $1.4 million. Changes in Net Assets The change in net assets represents the increase or decrease in City net assets resulting from its various activities. Following is a condensed version of the City's changes in net assets. The table shows the revenues, expenses and related changes in net assets for both governmental -type and business -type activities: 17 CITY OF TUKWILA: 2009 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS City of Tukwila's Changes in Net Assets Governmental Activities Business -type Activities Total 2009 2008 2009 2008 2009 2008 Revenues: Program revenues Charges for services $ 3,460,912 $ 5,400,376 $ 14,190,560 $ 12,827,915 $ 17,651,472 $ 18,228,291 Operating grants and contributions 3,386,269 1,325,163 - - 3,386,269 1,325,163 Capital grants and contributions 14,784,074 2,282,592 515,633 756,400 15,299,707 3,038,992 General revenues Property taxes 11,901,072 11,656,979 - - 11,901,072 11,656,979 Sales taxes 14,588,297 18,009,296 327,999 500,000 14,916,296 18,509,296 Hotel /Motel taxes 489,806 587,216 - - 489,806 587,216 Natural gas use tax 748,772 643,037 - - 748,772 643,037 Utility taxes 5,577,583 5,136,444 5,577,583 5,136,444 Interfund utility taxes 1,813,277 1,813,277 - Business taxes 3,196,178 2,497,705 3,196,178 2,497,705 Excise taxes 367,198 983,078 - 367,198 983,078 State entitlements 2,233,445 874,046 - - 2,233,445 874,046 Investment earnings 246,287 801,847 106,032 377,954 352,319 1,179,801 Gain /(loss) on sale of capital assets 980,267 (186,663) (264,093) - 716,174 (186,663) Total revenues 63,773,437 50,011,116 14,876,131 14,462,269 78,649,568 64,473,385 Expenses: General government 6,689,659 4,723,103 - - 6,689,659 4,723,103 Public safety 26,959,352 24,147,992 - - 26,959,352 24,147,992 Physical environment 2,575,405 2,862,487 2,575,405 2,862,487 Transportation 5,541,367 5,864,297 5,541,367 5,864,297 Economic environment 4,637,531 5,017,935 4,637,531 5,017,935 Mental and physical health 4,332 4,173 4,332 4,173 Culture and recreation 4,914,256 4,797,856 - - 4,914,256 4,797,856 Interest on long -term debt 753,904 1,844,224 - - 753,904 1,844,224 Water /sewer - 9,293,434 7,293,362 9,293,434 7,293,362 Foster golf course - 2,050,172 1,968,595 2,050,172 1,968,595 Surface water 2,299,394 1,762,417 2,299,394 1,762,417 Total expenses 52,075,806 49,262,067 13,643,000 11,024,374 65,718,806 60,286,441 Increase in net assets before transfers 11,697,631 749,049 1,233,131 3,437,895 12,930,762 4,186,944 Transfers 1,601,200 1,383,774 (1,601,200) (1,383,774) Change in net assets 13,298,831 2,132,823 (368,069) 2,054,121 12,930,762 4,186,944 Net assets - beginning of period 174,939,751 172,806,928 49,846,338 47,792,217 224,786,089 220,599,145 Net assets -end of period $ 188,238,582 $ 174,939,751 $ 49,478,269 $ 49,846 338 $ 237,716,851 $ 224 786,089 Governmental activities contributed $13.3 million to the total increase in City net assets. 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. Revenues from governmental activities increased $13.7 million from 2008 activity. The components and explanation of this increase follows. • Sales tax collections decreased by $3,420,999, or 19 %. The decrease is the result of an overall decline in retail sales, as well as the impact of moving to destination -based sales tax reporting in July 2008. • Capital grants and contributions increased $12.5 million due to grant revenue received on the Tukwila International Boulevard project and various other arterial street projects. Operating grant revenue increased by $2 million due partially to a $1.285 million King County Flood Control District grant reimbursement for flood prevention costs incurred in association with the impaired Howard Hanson Dam. 18 CITY OF TUKWILA: 2009 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS • State entitlements increased $1.36 million and include $1.5 million received from the state for sales tax mitigation. • Gain on sale of capital assets increased from a loss on sale in 2008 to a gain in 2009 contributing $1.1 million to the 2009 revenue increase. • Charges for services decreased $1.9 million due to a decline in construction activity in the City and a related decline in fees collected for permits and inspections. Governmental activity expenses increased by $2.8 million, or 5.7 %. Public safety expenses increased by $2.8 million or 11.6 %, general government expenses increased by $1.9 million, or 41 %, and interest expense on long -term debt declined by $1 million, or 59 %. The increase in expenses is due partially to the over $2 million expended for flood prevention and mitigation measures resulting from the Howard Hanson dam impairment. The next chart summarizes the government activity revenue by source, while the second one reflects the specific programs' revenues and related expenses for the various activities of the City. Gaps between specific programs' revenues and their related expenses are funded through general tax revenues. Revenues by Source - Government Activities Other taxes 8% Utility taxes 12% Sales taxes 23% Other revenue 5% Charges for services 5% ra Property taxes 19% Capital grants & contributions 19 5% Operating grants & contributions 23% CITY OF TUKWILA: 2009 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS $10,000,000 $9,000,000 $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 Program Revenues and Expenses - Governmental Activities oe`��oo co a\e o� \Ge • y�a (24 Gc.„ c.„ F a a• � ee o o� o o � ❑ Program revenues • Expenses Business -type net assets decreased by $368,069 during 2009. Key components of this decrease include: • $1,233,131 increase in net assets before transfers from a combination of factors. • $1,601,200 net transfer out from the business -type activity funds. • Income before capital contributions and transfers amounted to: o Water /sewer fund: o Foster golf course fund: o Surface water fund: $ 638,668 (294,099) 372,929 $ 717,498 20 CITY OF TUKWILA: 2009 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS Below is a chart that shows the relative net asset balances for each business -type fund: Business -type Net Assets - By Fund Foster golf course 11% Surface water 39% Water /sewer 50% The majority of net assets 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 assets are not available to support the ongoing expenses of the funds. The following chart contrasts the total net assets to the spendable portion of net assets for each enterprise fund: Comparison of Total Net Assets to Spendable Net Assets Business -Type Funds $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 $0 D Spendable net assets ■ Total net assets Water /sewer Surface water 21 Foster golf course CITY OF TUKWILA: 2009 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS The following chart depicts the revenues and expenses for business -type funds: $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $0 Business -type Activity Revenues and Expenses Before Capital Contributions and Transfers Water /sewer Surface water Foster golf course Financial Analysis of Governmental Funds ❑ Revenues • Expenses The purpose of the City's government 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, fund balance is a good indicator of the City's financial resources. As of December 31, 2009, the City's governmental funds had combined fund balances of $23,749,527 a decrease of $4,979,812 or 17 %. This decrease is related to: • General fund • Arterial street fund • Land Acq. Rec & Park Development • Other governmental funds ($315,885) ($4,585,771) 721,763 ($799,919) Of the government funds' total fund balances, $23,731,627 is unreserved. Of this unreserved total, $7,101,258 is earmarked for capital projects, $9,123,401 is in special revenue funds and is earmarked for specific purposes, and $135,438 is in debt service funds dedicated for debt repayment. 22 CITY OF TUKWILA: 2009 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS The general fund is the primary operating fund of the City. All receipts and payments of ordinary City operations are processed through it unless they are required to be accounted for in another fund. At the end of 2009, the general fund had a fund balance of $7,389,430, of which substantially all is unreserved. Other funds that had significant fund balances include: • $5,820,775 in the arterial street special revenue fund; used for various transportation improvement projects. • $4,668,345 in the land acquisition, recreation and park development fund; used for acquisition, development and construction of park facilities. • $2,073,918 in the facility replacement fund; used for the replacement of existing general government facilities. The following chart shows the relative fund balances for governmental funds: Governmental Funds - Fund Balances Special revenue funds 14% Capital project funds 30% Debt service funds 1% General fund 31% Arterial street fund 24% The $315,885 decrease in the general fund balance results from revenue of $42,293,538, expenses of $46,045,887 and transfers into the fund of $3,436,464. In comparison with 2008, revenue increased $3.3 million, expenditures increased $2.5 million and transfers -in increased $1.4 million. 23 CITY OF TUKWILA: 2009 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS The general fund revenue increase of $3,391,146 came from the following sources: $4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $0 ($500,000) ($1,000,000) ($1,500,000) Taxes $2,371,079 General Fund Revenue Increases / (Decreases) - By Source Intergovernmental $3,345,727 Licenses and permits Charges for services ($739,388) ($1,156,810) Fines and forfeitures ($29,718) Miscellaneous ($189,759) Investment earnings ($209,985) The decrease of $4,585,771 in the arterial street fund is due primarily to expenditures in excess of capital grant revenue for the Tukwila International Boulevard street improvement project. Other street improvement projects such as the Tukwila Urban Center Access project and the Strander Extension project, in addition to various repair and overlay projects contributed to arterial street expenditures. Financial Analysis of Proprietary Funds The City's proprietary funds provide the same type of information as found in the government -wide financial statements, but in greater detail. Factors affecting the finances of the City's proprietary funds have already been addressed in the discussion of the City's business -type activities. General Fund Budgetary Highlights The City budgets biannually 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: • Local retail sales and use tax transfer in from Arterial Street fund $ 500,000 • Interfund utility tax transfer in from Water fund 655,000 • Interfund utility tax transfer in from Sewer fund 707,000 • Interfund utility tax transfer in from Surface Water fund 382,000 • King County Flood Control Zone District reimbursement 1,285,000 • Net transfer in from Debt Service funds 690,500 • Additional funding for Howard Hanson Dam flood prevention (2,529,000) • Additional funding for fuel, legal and other costs (703,003) • Transfer out to newly established Drug Seizure Fund 109 (154,647) 24 CITY OF TUKWILA: 2009 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS Reasons for the significant variances in the general fund between the final budget and actual results include: • Sales tax revenue was $3,695,370 less than budgeted. This reflects the effect of the recession experienced nation -wide in 2009. • Sales tax mitigation remittances from the state totaled $1,588,563. These were not budgeted and provide a favorable variance between budget and actual. • Proceeds from the sale of capital assets provided a $942,088 favorable variance from budget due to unexpected real and other property sales during the year. • The City spent $902,315 more than budgeted for public safety. Capital Asset and Debt Administration Capital Assets The City's investment in capital assets for both its governmental and business -type activities as of December 31, 2009 totaled $226.9 million (net of accumulated depreciation), an increase of $16.5 million from 2008. This investment in capital assets includes land, buildings, improvements, machinery and equipment, construction in progress, utility transmission /distribution systems, roads, bridges, and other infrastructure. Major capital asset changes during the year include: • Tukwila South Annexation of various developer roadways, a bridge and street lighting totaled $3.6 million. • Westfield Southcenter street lighting and traffic signal turnovers totaled $296,363. • Tukwila International Boulevard Phase 11 Project amounted to $5.033 million. • Tukwila International Boulevard Phase 111 Project amounted to $4.045 million. • Various repair and overlay projects to the City's major arterials totaled $1.95 million. • Tukwila Urban Center Access Project (Klickitat /Southcenter Parkway /I -5 Access Revision) totaled $1.76 million. A summary of the City's net assets follows: Summary of Capital Assets (net of depreciation) Land Buildings Other Improvements Machinery and Equipment Infrasructure Construction in Progress Total Governmental Activities Business -type Activities Total As of 12/31/09 As of 12/31/08 As of 12/31/09 As of 12/31/08 As of 12/31/09 As of 12/31/08 $ 39,352,086 $ 38,918,823 $ 1,907,416 $ 1,907,416 $ 41,259,502 $ 40,826,239 15,293,399 15,018,864 8,717,717 9,007,157 24,011,116 24,026,021 4,674,630 5,081,763 40,349,296 40,737,818 45,023,925 45,819,581 6,550,878 6,542,435 931,147 1,054,136 7,482,026 7,596,571 85,548,855 82,790,025 85,548,855 82,790,025 21,322,810 8,186,944 2,267,865 1,135,477 23,590,675 9,322,421 $172,742,658 $156,538,854 $ 54,173,441 $ 53,842,004 $226,916,098 $210,380,858 More detailed information on capital assets is provided in note 6. 25 CITY OF TUKWILA: 2009 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS Long -term Debt At the end of the current fiscal year, the City had total bonded debt outstanding of $22,515,000. Of this amount, $17,725,000 is general obligation bonds, and $4,790,000 is revenue bonds for the water /sewer and surface water utilities. The City currently maintains a rating of Al with Moody's for its general obligation debt. The following schedule summarizes the City's bonded debt: Summary of bonded debt Governmental Activities As of 12/31/09 As of 12/31/08 As of 12/31/09 General obligation bonds $ 14,301,203 $ 15,442,500 $ 3,423,797 Revenue bonds - 4,790,000 $ 14,301,203 $ 15,442,500 $ 8,213,797 Business -type Activities As of 12/31/08 $ 3,642,500 5,165,000 $ 8,807,500 Total As of 12/31/09 As of 12/31/08 $ 17,725,000 $ 19,085,000 4,790,000 5,165,000 $ 22,515,000 $ 24,250,000 Below is a summary of additional, non - bonded long -term debt of the City: Other Long -term Debt Public Works Trust Fund loans Employee leave benefits Due to other governments $ 8,405,397 2,815,474 8,151,800 $ 19,372,671 More detailed information on long -term debt is provided in note 10, page 78. Economic Factors The outlook for 2010 is positive despite the recession that the region and nation are currently experiencing. The City of Tukwila has a small residential population, yet the City works hard to serve the regional economy and has become an economic powerhouse providing jobs and revenue for the region and State. Three major pending developments will have significant positive impacts on the future of Tukwila's economy: • Tukwila South -- In 2009, the City executed development agreements and completed annexation of 259 acres as part of the 500 acre Tukwila South development. The annexation will add approximately $8.6 million in assessed value to the City of Tukwila and the entire project could add up to 10 million square feet of new development valued at up to $3 billion. • Sound Transit Light Rail Station -- In 2009, Sound Transit opened a newly constructed light rail station in Tukwila valued at over $30 million. As a public project, the facility is exempt from property taxes; however, it may encourage new development and redevelopment in the surrounding neighborhood. • Bow Lake Transfer Station -- King County is constructing a new facility to replace the existing Bow Lake Waste and Recycling Transfer Station. The $25 million project started construction in 2009 and is scheduled to be completed in 2012. This project generates development fees but as a public project it will not increase property taxes for the City of Tukwila. 26 CITY OF TUKWILA: 2009 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS • New Commercial Buildings -- In 2009, the largest new commercial developments completed were a new McDonald's restaurant, a new Fidelity Investors financial services office, and a new bank storage building. The combined projects' construction cost totaled over $4 million and will generate additional sales tax revenue for the City. • Major Tenant Improvements - -The largest new tenant improvements were completed for the Seattle Sounders FC team facilities at the Starfire Sports Complex, Old Spaghetti Factory restaurant, and Aviation Partners totaling over $3 million. • Largest Renovations -- The largest renovations were completed for the BECU Financial Center, Quest building, and Costco deli totaling over $3 million. • Largest Equipment Installations -- The largest equipment installations completed were for generators and computer communication equipment totaling approximately $5 million. Requests for Information This financial report is designed to provide a general overview of the City of Tukwila's finances for readers with an interest in the City's finances. Questions concerning this report, or requests for additional information, may be addressed to the Finance Director, City of Tukwila, 6200 Southcenter Blvd, Tukwila, WA 98188 -2544. 27 CITY OF TUKWILA: 2009 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS 28 CITY OF TUKWILA: 2009 CAFR BASIC FINANCIAL STATEMENTS GOVERNMENT -WIDE FINANCIAL STATEMENTS The City presents two government -wide financial statements: The Statement of Net Assets provides information on all City assets and liabilities, with the difference between the two reported as net assets. 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. 29 CITY OF TUKWILA: 2009 CAFR BASIC FINANCIAL STATEMENTS 30 CITY OF TUKWILA: 2009 CAFR BASIC FINANCIAL STATEMENTS CITY OF TUKWILA, WASHINGTON STATEMENT OF NET ASSETS DECEMBER 31, 2009 it PRIMARY GOVERNMENT GOVERNMENTAL BUSINESS -TYPE ACTIV mES ACTIVITIES TOTAL ASSETS: CASH AND CASH EQUIVALENTS (Note 3) $ 19,975,425 $ 8,473,059 $ 28,448,484 INVESTMENTS (Note 3) 8,016,325 1,313,231 9,329,556 RECEIVABLES: TAXES (Note 4) 3,663,369 63,946 3,727,315 CUSTOMER ACCOUNTS 845,167 912,604 1,757,771 INTEREST ON INVESTMENTS 2,421 10,549 12,970 DUE FROM OTHER GOVERNMENTAL UNITS (Note 4) 2,860,614 94,677 2,955,291 INVENTORY OF MATERIALS AND SUPPLIES 565,732 534,865 1,100,597 NET PENSION ASSET 258,764 - 258,764 INVESTMENT IN JOINT VENTURE (Note 7) 9,929,639 - 9,929,639 RESTRICTED ASSETS: CASH AND CASH EQUIVALENTS (Note 3) 33,694 512,499 546,193 NOTES RECEIVABLE 30,000 499,314 529,314 DEFERRED CHARGES 13,199 136,928 150,127 NON - DEPRECIABLE CAPITAL ASSETS (Note 6) 60,674,896 4,175,280 64,850,176 DEPRECIABLE CAPITAL ASSETS (NET OF ACCUMULATED DEPRECIATION): (Note 6) 112,067,762 49,998,159 162,065,921 PLANT ACQUISfTION ADJUSTMENT (NET OF ACCUMULATED AMORTIZATION) - 62,475 62,475 TOTAL ASSETS 218,937,007 66,787,586 285,724,593 LIABILITIES: ACCOUNTS PAYABLE 369,272 106,846 476,118 ACCRUED WAGES AND BENEFITS PAYABLE 1,228,314 303,448 1,531,762 DUE TO OTHER GOVERNMENTAL UNITS 8,133,151 - 8,133,151 ACCRUED INTEREST PAYABLE 124,223 94,650 218,873 REVENUES COLLECTED IN ADVANCE 75,749 - 75,749 OTHER CURRENT LIABILITIES 1,549,249 1,549,249 PAYABLE FROM RESTRICTED ASSETS: REVENUE BOND PRINCIPAL (Note 10) 579,972 579,972 DEPOSITS 3,000 52,317 55,317 UNEARNED REVENUE 501,001 14,551 515,552 BONDS AND OTHER DEBT PAYABLE DUE WITHIN ONE YEAR (Note 10) 3,241,963 616,554 3,858,517 DUE IN MORE THAN ONE YEAR (Note 10) 13,653,683 15,540,979 29,194,662 UNFUNDED OTHER POST EMPLOYMENT BENEFITS (Note 9) 1,818,820 - 1,818,820 TOTAL LIABILITIES 30,698,425 17,309,317 48,007,742 NET ASSETS: INVESTED IN CAPITAL ASSETS, NET OF RELATED DEBT 155,847,012 38,052,488 193,899,500 RESTRICTED NET ASSETS: CAPITAL PROJECTS 7,101,258 8,173 7,109,431 SPECIAL REVENUE FUND PROJECTS 9,123,401 - 9,123,401 DEBT SERVICE 135,438 430,446 565,884 UNRESTRICIEU NET ASSETS 16,031,473 10,987,162 27,018,635 TOTAL NET ASSETS $ 188,238,582 $ 49,478,269 $ 237,716,851 The notes to the financial statements are an integral part of this statement. 31 CITY OF TUKWILA: 2009 CAFR BASIC FINANCIAL STATEMENTS CITY OF TUKWILA, WASHINGTON STATEMENT OF ACTIVITIES FOR THE YEAR ENDED DECEMBER 31, 2009 Page 1 of 2 PROGRAM REVENUES OPERATING CAPITAL CHARGES GRANTS AND GRANTS AND EXPENSES FOR SERVICES CONTRIBUTIONS CONTRIBUTIONS FUNCTIONS / PROGRAMS: PRIMARY GOV ERNM ENT GOVERNMENTAL ACTN (TIES: GENERAL GOVERNMENT $ 6,689,659 $ 1,136,642 $ 176,857 $ PUBLIC SAFETY 26,959,352 572,094 961,824 524,675 TRANSPORTATION 5,541,367 103,311 39,915 8,847,729 PHYSICAL ENVIRONMENT 2,575,405 1,395,570 4,231,132 CULTURE AND RECREATION 4,914,256 647,354 45,068 1,180,538 ECONOMIC ENVIRONMENT 4,637, 531 1,001,511 767,035 MENTAL AND PHYSICAL HEALTH 4,332 - INTEREST ON LONG -TERM DEBT 753,904 52,075,806 3,460,912 3,386,269 14,784,074 BUSINESS -TYPE ACTIVITIES: WATER/SEWER 9,293,434 10,124,653 SURFACE WATER 2,299,394 2,641,313 FOSTER GOLF COURSE 2,050,172 1,424,594 331,393 184,240 13,643,000 14,190,560 515,633 TOTAL PRIMARY GOVERNMENT $ 65,718,806 $ 17,651,472 $ 3,386,269 $ 15,299,707 GENERAL REVENUES: PROPERTY TAXES RETAIL SALES AND USE TAXES NATURAL GAS USE TAX HOTEL /MOTEL TAXES UTILITY TAXES INTERFUND UTILITY TAXES BUSINESS TAXES EXCISE TAXES STATE ENTITLEMENTS UNRESTRICTED INVESTMENT EARNINGS GAIN (LOSS) ON SALE OF CAPITAL ASSETS TRANSFERS (Note 5) TOTAL GENERAL REVENUES CHANGE IN NET ASSETS NET ASSETS - BEGINNING NET ASSETS - ENDING 32 CITY OF TUKWILA: 2009 CAFR BASIC FINANCIAL STATEMENTS Page 2 of 2 NET (EXPENSE) REVENUE AND CHANGES IN NET ASSETS GOVERNMENTAL BUSINESS -TYPE ACTIVITES ACTN!TIES TOTAL $ (5,376,160) $ (24,900,759) 3,449,588 3,051,297 (3,041,296) (2,868,985) (4,332) (753,904) (30,444,551) $ (5,376,160) (24,900,759) 3,449,588 3,051,297 (3,041,296) (2,868,985) (4,332) (753,904) 1,162,612 526,159 (625,578) 1,162,612 526,159 (625,578) 1,063,193 1,063,193 $ (30,444,551) $ 1,063,193 $ (29,381,358) $ 11,901,072 $ - $ 11,901,072 14,588,297 327,999 14,916,296 748,772 - 748,772 489,806 - 489,806 5,577,583 5,577,583 1,813,277 - 1,813,277 3,196,178 3,196,178 367,198 367,198 2,233,445 - 2,233,445 246,287 106,032 352,319 980,267 (264,093) 716,174 1,601,200 (1,601,200) - 43,743,382 (1,431,262) 42,312,120 13,298,831 (368,069) 12,930,762 174,939,751 49,846,338 224,786,089 $ 188,238,582 $ 49,478,269 $ 237,716,851 33 CITY OF TUKWILA: 2009 CAFR BASIC FINANCIAL STATEMENTS MAJOR GOVERNMENTAL FUNDS General Fund The general fund accounts for all of the City's financial resources except those required by statute or generally accepted accounting principles to be accounted for in another fund. As is the case with most municipalities, the general fund is the largest and most important accounting entity of the City. 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. The general fund is accounted for on a modified accrual basis. Biennial budgets are adopted with appropriations lapsing at the end of each year of the biennium. Arterial Street Fund This fund is supported by the State's one -half cent gas tax and is used for major street construction. Land Acquisition, Recreation and Park Development Fund This fund is to be used for the acquisition of land, development of land, and construction of park facilities. Street, Utility, Golf Course improvements, or general government facilities improvements are not included in this fund. 34 LANDACQ. OTHER TOTAL GENERAL ARTERIAL REC & PARK GOVERNMENTAL GOVERNMENTAL FUND STREET DEVELOPMENT FUNDS FUNDS ■ CITY OF TUKWILA: 2009 CAFR BASIC FINANCIAL STATEMENTS CITY OF TUKWILA, WASHINGTON BALANCE SHEET GOVERNMENTAL FUNDS DECEMBER 31, 2009 ASSETS: CASH AND CASH EQUIVALENTS $ 2,584,279 $ 989,545 $ 3,208,981 $ 5,018,349 $ 11,801,154 INVESTMENTS 1,670,144 3,553,220 1,134,648 647,807 7,005,819 RECEIVABLES: TAXES 2,799,885 406,218 39,710 417,556 3,663,369 CUSTOMER ACCOUNTS 807,627 37,389 30,000 875,016 DUE FROM OTHER GOVERNMENTAL UNITS 1,504,872 850,212 476,415 29,115 2,860,614 DEFERRED CHARGES 13,199 - - - 13,199 TOTAL ASSETS $ 9,380,006 $ 5,836,584 $ 4,889,754 $ 6,112,827 $ 26,219,171 LIABILITIES AND FUND BALANCES: ACCOUNTS PAYABLE $ 184,516 $ 13,325 $ 134,535 $ 33,227 $ 365,603 ACCRUED WAGES & BENEFrrS 1,193,736 2,484 572 16,003 1,212,795 RETAINAGEPAYABLE 81,815 - 3,672 29,383 114,870 REVENUES COLLECTED IN ADVANCE 99,475 - - - 99,475 OTHER CURRENT LIABILTfIES 172,899 500 2,500 175,899 DEFERRED REVENUE 258,135 82,130 160,737 501,002 _ TOTAL LIABILITIES 1,990,576 15,809 221,409 241,850 2,469,644 FUND BALANCES: RESERVED FOR: IMFREST FUNDS UNRESERVED, REPORTED IN: GENERAL FUND SFECtAL REVENUE FUNDS CAPITAL PROJECT FUNDS DEBT SERVICE FUNDS 17,900 17,900 7,371,530 5,820,775 7,371,530 3,302,626 9,123,401 4,668,345 2,432,913 7,101,258 135,438 135,438 TOTAL LIABILrrIES AND FUND BALANCES $ 9,380,006 $ 5,836,584 $ 4,889,754 $ 6,112,827 $ 26,219,171 TOTAL FUND BALANCES 7,389,430 5,820,775 4,668,345 5,870,977 23,749,527 Total governmental fund balances as reported on this statement $ 23,749,527 Amounts reported for governmental activities in the statement of net assets are different because: The purchases method is used in Governmental Funds to account for Materials and Supplies - Inventory amount outstanding. 556,701 Capital assets used in governmental activities are not financial resources and therefore not reported in the funds. Non- Depreciable Assets Depreciable Assets (Net) The net pension asset resulting from contributions in excess of the annual required contribution in 2009 are not financial resources and therefore is not reported in the funds. The Qty has an equity interest in a joint venture. This equity interest for the provision of governmental services is not a current financial resource and therefore is not reported in the funds. Deferred revenue reported for property taxes that are current and prior year tax levies that w ere not collected and available to pay current year liabilities applicable to beginning net assets and current year revenues. Some liabilities are not due and payable in the current period and therefore are not reported in the funds. Long Term Liabilities Due Within One Year Long Term Liabilities Due in More Than One Year Due to Other Governmental Units Unfunded Other Fbst Employment Benefits Accrued Interest Payable Internal service funds are used by management to charge the cost of certain activities, such as insurance and fleet maintenance, to individual funds. The assets and liabilities of these internal service funds are included in governmental activities in the statement of net assets. $ 60,674,896 108,921,441 $ (3,241,963) (13,653,683) (8,133,151) (1,818,820) (124,223) 169,596,337 258,764 9,929,639 23,731 (26,971,840) 11,095,723 $ 188,238,582 Net assets of government activities as reported on the statement of net assets The notes to the financial statements are an integral part of this statement. 35 CITY OF TUKWILA: 2009 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, 2009 LANDACQ. OTHER TOTAL GENERAL ARTERIAL REC & PARK GOVERNMENTAL GOVERNMENTAL FUND STREET DEVELOPMENT FUNDS FUNDS REVENUES: TAXES $ 32,827,941 $ 1,745,694 $ 291,408 $ 2,302,238 $ 37,167,281 LICENSES AND PERMFTS 1,283,463 1,283,463 INTERGOVERNMENTAL 5,932,815 8,973,989 1,144,221 1,545,461 17,596,486 CHARGES FOR SERVICES 1,412,571 - 17,767 13,342 1,443,680 FINES AND FORFEITURES 230,273 - 71,488 301,761 INVESTMENT EARNINGS 118,713 73,959 36,317 53,615 282,604 MISCELLANEOUS 487,762 127,623 42,329 44,243 701,957 TOTAL REVENUES 42,293,538 10,921,265 1,532,042 4,030,387 58,777,232 EXPENDITURES: CURRENT: GENERAL GOVERNMENT 8,574,563 - 8,574,563 SECURITY OF PERSONS AND PROPERTY 25,453,812 - 123,120 25,576,932 PHYSICAL BWIRONMENT 1,881,425 - 177,488 2,058,913 TRANSPORTATION 2,252,639 81,659 - 2,334,298 ECONOMIC ENVIRONMENT 3,394,684 - - 1,206,707 4,601,391 MENTAL AND PHYSICAL HEALTH 4,332 - 4,332 CULTURE AND RECREATION 4,357,906 7,117 4,365,023 DEBT SERVICE PRINCIPAL 1,316,297 1,316,297 INTEREST AND OTHER COSTS - - - 778,018 778,018 CAPITAL OUTLAY 126,526 14,835,027 745,012 1,153,797 16,860,362 TOTAL EXPENDITURES 46,045,887 14,916,686 752,129 4,755,427 66,470,129 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES A (3,752,349) (3,995,421) 779,913 (725,040) (7,692,897) OTHER FINANCING SOURCES (USES): SALES OF CAPITAL ASSETS 989,608 25,000 1,014,608 TRANSFERS IN (Note 5) 3,156,300 709,444 3,865,744 TRANSFERS OUT (Note 5) (709,444) (615,350) (58,150) (851,500) (2,234,444) GENERAL OBLIGATION BONDS ISSUED - - 6,947,574 6,947,574 PAY MFNTTO FISCAL AGENT (6,880,397) (6,880,397) TOTAL OTHER FINANCING SOURCES AND USES 3,436,464 (590,350) (58,150) (74,879) 2,713,085 NET CHANGE IN FUND BALANCES (315,885) (4,585,771) 721,763 (799,919) (4,979,812) FUND BALANCES - BEGINNING 7,705,315 10,406,546 3,946,582 6,670,896 28,729,339 FUND BALANCES - ENDING $ 7,389,430 $ 5,820,775 $ 4,668,345 $ 5,870,977 $ 23,749,527 The notes to the financial statements are an integral part of this statement. 36 CITY OF TUKWILA: 2009 CAFR BASIC FINANCIAL STATEMENTS CITY OF TUKWILA, WASHINGTON RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENT FUNDS TO THE STATEMENT OF ACTIVITIES FOR THE YEAR ENDED DECEMBER 31, 2009 Net change in fund balances per the Statement of Revenues, Expenditures, and Changes in Fund Balances $ (4,979,812) Amount reported as change in net assets in the Statement of Activities are different because: Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. In the current period, these amounts are: Capital Outlay $ 17,802,173 Developer Contributions 3,943,420 Depreciation Expense (5,507,446) Excess of Capital Outlay and Donations Over Depreciation Expense The net effect of various miscellaneous transactions involving capital assets (i.e., sales, trade -ins, and donations) is to increase net assets. The net pension asset (negative net pension obligation) amortization amount in 2009 is not a financial resource and therefore not reported in the funds. The City has equity interests in two joint ventures. The equity interests for the provision of governmental services are not current financial resources and therefore are not reported in the funds. Repayment of long -term debt is reported as an expenditure in governmental funds, but the repayment reduces long -term liabilities in the statement of net assets. In the current year, these amounts consist of: Bond Principal Retirement Issuance of long -term debt is reported as revenue in governmental funds, but the issuance increases long -term liabilities in the statement of net assets. Proceeds from Issuance of Bonds Payment to Fiscal Agent Internal service funds are used by management to charge the costs of certain activities to individual funds. The net revenue (expense) of certain internal service funds is reported with governmental activities. Because some revenues will not be collected for several months after the Citys fiscal year ends, they are not considered " available" revenues in the government funds. Deferred revenues decreased bythis amount this year. $ (6,947,574) 6,880,396 Some expenses reported in the Statement of Activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds. These activities consist of: Increase in Accrued Interest $ (62,367) Increase in Compensated Absences (46,400) Increase in Unfunded Other Post Employment Benefits (1,009,639) Amortization of Bond Discount and Deferred Charges (11,872) Amortization of Bond Premiums 35,984 Total Additional Expense (Increase) Decrease 16,238,147 (34,341) 10,343 524,675 1,316,297 (67,178) 1,837,155 (452,161) (1,094,294) Change in net assets on the Statement of Activities $ 13,298,831 The notes to the financial statements are an integral part of this statement. 37 CITY OF TUKWILA: 2009 CAFR BASIC FINANCIAL STATEMENTS CITY OF TUKWILA, WASHINGTON STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL GENERAL FUND FOR THE YEAR ENDED DECEMBER 31, 2009 VARIANCE WITH ORIGINAL FINAL FINAL BUDGET BUDGET BUDGET ACTUAL POSITIVE (GAAP BASIS) (GAAP BASIS) RESULTS (NEGATIVE) REVENUES: TAXES $ 33,159,118 $ 35,403,118 $ 32,827,941 $ (2,575,177) LICENSES AND PERMITS 2,202,000 2,202,000 1,283,463 (918,537) INTERGOVERNMENTAL 2,703,000 4,043,124 5,932,815 1,889,691 CHARGES FOR SERVICES 2,214,000 2,214,000 1,412,571 (801,429) FINES AND FORFEITURES 229,000 229,000 230,273 1,273 INVESTMENT EARNINGS 480,000 480,000 118,713 (361,287) MISCELLANEOUS 485,000 285,000 487,762 202,762 TOTAL REVENUES 41,472,118 44,856,242 42,293,538 (2,562,704) EXPENDITURES: CURRENT: GENERAL GOVERNMENT 7,850,288 8,615,670 8,574,563 41,107 PUBLIC SAFETY 24,021,002 26,356,125 25,453,810 902,315 PHYSICAL ENVIRONMENT 2,113,764 2,053,261 1,881,425 171,836 TRANSPORTATION 2,623,041 2,529,898 2,252,639 277,259 ECONOMIC ENVIRONMENT 2,967,895 3,362,385 3,394,684 (32,299) MENTAL & PHYSICAL HEALTH 4,000 4,000 4,332 (332) CULTURE AND RECREATION 4,556,888 4,473,384 4,357,906 115,478 CAPITAL OUTLAY 463,571 316,821 126,527 190,294 TOTAL EXPENDITURES 44,600,449 47,711,544 46,045,887 1,665,657 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (3,128,331) (2,855,302) (3,752,349) (897,047) OTHER FINANCING SOURCES (USES): SALES OF CAPITAL ASSETS TRANSFERS IN (Note 5) TRANSFERS OUT (Note 5) TOTAL OTHER FINANCING SOURCES AND USES NET CHANGE IN FUND BALANCES FUND BALANCES - BEGINNING 70,000 70,000 989,608 919,608 2,305,000 3,091,500 3,156,300 64,800 (458,797) (709,444) (709,444) - 1,916,203 2,452,056 3,436,464 984,408 (1,212,128) (403,246) (315,885) 7,705,315 7,705,315 7,705,315 7,389,430 $ FUND BALANCES - ENDING $ 6,493,187 $ 7,302,069 $ 87,361 87,361 The notes to the financial statements are an integral part of this statement. 38 CITY OF TUKWILA: 2009 CAFR BASIC FINANCIAL STATEMENTS CITY OF TUKWILA, WASHINGTON STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL ARTERIAL STREET FUND FOR THE YEAR ENDED DECEMBER 31, 2009 VARIANCE WITH ORIGINAL FINAL FINAL BUDGET BUDGET BUDGET ACTUAL POSITIVE (GAAP BASIS) (GAAP BASIS) RESULTS (NEGATIVE) REVENUES: TAXES $ 3,290,000 $ 2,790,000 $ 1,745,694 $ (1,044,306) INTERGOVERNMENTAL 14,907,000 14,907,000 8,973,989 (5,933,011) INVESTMENT EARNINGS 300,000 300,000 73,959 (226,041) MISCELLANEOUS 4,704,000 4,704,000 127,623 (4,576,377) TOTAL REVENUES 23,201,000 22,701,000 10,921,265 (11,779,735) EXPENDITURES: CURRENT: TRANSPORTATION CAPITAL OUTLAY 26,1 10,264 81,659 25, 494, 940 14, 835, 027 (81,659) 10,659,913 TOTAL EXPENDITURES 26,110,264 25,494,940 14, 916, 686 10, 578, 254 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (2,909,264) (2,793,940) (3,995,421) (1,201,481) OTHER FINANCING SOURCES (USES): SALE OF CAPITAL ASSETS TRANSFERS OUT (Note 5) TOTAL OTHER FINANCING SOURCES AND USES NET CHANGE IN FUND BALANCES FUND BALANCES - BEGINNING FUND BALANCES - ENDING 25,000 25,000 (615,324) (615,324) (615,350) (26) (615,324) (615,324) (590,350) 24,974 (3,524,588) (3,409,264) (4,585,771) (1,176,507) 10,406, 546 10,406, 546 10,406, 546 6,881,958 $ 6,997,282 $ 5,820,775 $ (1,176,507) $ The notes to the financial statements are an integral part of this statement. 39 CITY OF TUKWILA: 2009 CAFR BASIC FINANCIAL STATEMENTS 40 CITY OF TUKWILA: 2009 CAFR BASIC FINANCIAL STATEMENTS MAJOR PROPRIETARY FUNDS ENTERPRISE FUNDS The City's enterprise funds are used to account for operations that are financed and operated in a manner similar to private business operations. The goods and services these funds provide to the general public are primarily financed by service charges. Enterprise funds are self- supporting and use the accrual method of accounting. Tukwila has three major enterprise funds. Water /Sewer Utility Fund This fund accounts for all maintenance, construction, and debt service requirements associated with the water and sanitary sewer system. Foster Golf Course Fund Accounts for services, maintenance, and operations associated with the Foster Golf Course. Surface Water Utility Fund This fund accounts for the maintenance, construction and debt service requirements of Tukwila's storm drainage system. 41 CITY OF TUKWILA: 2009 CAFR BASIC FINANCIAL STATEMENTS CITY OF TUKWILA, WASHINGTON STATEMENT OF NET ASSETS PROPRIETARY FUNDS DECEMBER 31, 2009 GOVERNMENTAL FOSTER SURFACE TOTAL ACTIVITIES WATER/SEWER GOLF WATER ENTERPRISE INTERNAL UTILITY COURSE UTILITY FUNDS SERVICE FUNDS ASSETS: CURRENT ASSETS: CASH AND CASH EQUIVALENTS INVESTMENTS RECEIVABLES: TAXES CUSTOMER ACCOUNTS INTEREST ON INVESTMENTS DUE FROM OTHER GOVERNMENTAL UNITS INVENTORY OF MATERIALS AND SUPPLIES CURRENT ASSETS RESTRICTED: CASH AND CASH EQUIVALENTS TOTAL CURRENT ASSETS $ 6,462,281 $ 103,773 $ 1,907,005 $ 8,473,059 $ 8,207,965 1,211,868 101,363 1,313,231 1,010,505 63,946 - 63,946 - 796,621 9,099 106,884 912,604 152 4,668 1,049 4,832 10,549 2,420 6,854 87,823 94,677 246,361 242,174 46,330 534,865 9,031 3,000 79,053 82,053 8,731,653 499,094 2,254,237 11,484,984 9,230,073 NONCURRENT ASSETS: RESTRICTED CASH, BOND RESERVES 393,549 36,897 430,446 - NOTES RECEIVABLE 499,314 - - 499,314 DEFERRED CHARGES 59,933 68,822 8,173 136,928 CAPfTAL ASSETS: LAND 156,872 1,609,575 140,969 1,907,416 BUILDINGS AND EQUIPMENT 3,606,095 6,627,496 909,455 11,143,046 OTHER IMPROVEMENTS 31,354,846 3,453,319 28,856,897 63,665,062 MACHINERY AND EQUIPMENT 2,119,762 208,556 48,247 2,376,565 8,838,519 CONSTRUCTION IN PROGRESS 397,856 1,870,008 2,267,864 LESS: ACCUMULATED DEPRECIATION (13,593,780) (3,308,081) (10,284,653) (27,186,514) (5,692,198) TOTAL CAPITAL ASSETS (NET OFA /D) 24,041,651 8,590,865 21,540,923 54,173,439 3,146,321 PLANT ACQUISITION ADJUSTMENT (NET OF ACCUMULATED AMORTIZATION) 62,475 62,475 - TOTAL NONCURRENT ASS 25,056,922 8,659,687 21,585,993 55,302,602 3,146,321 TOTAL ASSETS 33,788,575 9,158,781 23,840,230 66,787,586 12,376,394 LIABILITIES: CURRENT LIABILITIES: ACCOUNTS PAYABLE 22,544 16,526 67,776 106,846 - ACCRUED WAGES AND BENEFITS 101,780 100,165 101,503 303,448 15,518 ACCRUED INTEREST PAYABLE 70,272 12,374 12,004 94,650 - OTHER CURRENT LABILMES 287,341 - 329,213 616,554 1,265,152 UNEARNED REVENUE 14,551 - 14,551 - REVENUE BOND PRINCIPAL 380,600 184,972 14,400 579,972 DEPOSITS 3,000 49,317 - 52,317 TOTAL CURRENT LIABILITIES _ 880,088 363,354 524,896 1,768,338 1,280,670 NONCURRENT LIABILITIES: REVENUE BONDS PAYABLE (NET OF UNA MORTEED PREMIUMS) 4,121,370 3,264,507 334,177 7,720,054 COMPENSATED ABSENCES 25,313 4,422 2,347 32,082 OTHER LONG -TERM LIABILITIES 3,979,405 - 3,809,438 7,788,843 - TOTAL NONCURRENT LABILITIES 8,126,088 3,268,929 4,145,962 15,540,979 TOTAL LIABILITIES 9,006,176 3,632,283 4,670,858 17,309,317 1,280,670 NET ASSETS: INVESTED IN CAPITAL ASSETS, NET OF RELATED DEBT RESTRICTED FOR CAPITAL PROJECTS DEBT SERVICE UNRESTRICTED 15,534,963 5,136,964 17,380,561 38,052,488 3,146,321 393,549 8,853,888 389,534 8,173 36,897 1,743,740 8,173 430,446 10,987,162 7,949,403 TOTAL NET ASSETS $ 24,782,400 $ 5,526,498 $ 19,169,371 $ 49,478,269 $ 11,095,724 42 CITY OF TUKWILA: 2009 CAFR BASIC FINANCIAL STATEMENTS CITY OF TUKWILA, WASHINGTON STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS PROPRIETARY FUNDS FOR THE YEAR ENDED DECEMBER 31, 2009 GOVERNMENTAL FOSTER SURFACE TOTAL ACTIVITIES WATER/SEWER GOLF WATER ENTERPRISE INTERNAL UTILITY COURSE UTILITY FUNDS SERVICE FUNDS OPERATING REVENUES: CHARGES FOR SERVICES $ 9,649,321 $ 1,423,746 $ 2,547,239 $ 13,620,306 $ 7,914,503 INTERGOVERNMENTAL 85,580 - 94,074 179,654 - OTHER OPERATING REVENUE 389,754 847 - 390,601 1,371 TOTAL OPERATING REVENUES 10,124,655 1,424,593 2,641,313 14,190,561 7,915,874 OPERATING EXPENSES: OPERATIONS & MAINTENANCE 6,267,340 ADMINISTRATIVE A ND GENERAL 141,377 TAXES 1,711,432 DEPRECIATION AND AMORTIZATION 916,900 1,567,579 1,003,541 8,838,460 5,358,350 251,353 392,730 2,002 6,445 415,440 2,133,317 - 316,363 590,888 1,824,151 736,332 TOTAL OPERATING EXPENSES 9,037,049 1,890,387 2,261,222 13,188,658 6,096,684 OPERATING INCOME (LOSS) 1,087,606 (465,794) 380,091 1,001,903 1,819,190 NON - OPERATING REVENUE (EXPENSE): TAXES 327,999 327,999 - INVESTMENT EARNINGS 71,710 3,079 31,241 106,030 65,305 INTEREST EXPENSE (257,358) (156,684) (38,042) (452,084) - SALE OF CAPITAL ASSETS (264,262) 400 (231) (264,093) 93,893 AMORTIZATION OF BOND PREMIUM 10,797 1,845 353 12,996 - AMORTIZATION OF BOND DISCOUNT (6,093) (6,093) - BOND ISSUE COSTS (3,731) (4,945) (483) (9,159) - TOTAL NON - OPERATING REVENUE (EXPENSE) INCOME (LOSS) BEFORE CONTRIBUTIONS & TRANSFERS (448,937) 171,694 (7,162) (284,405) 159,198 638,669 (294,100) 372,929 717,498 1,978,388 CAPITAL CONTRIBUTIONS TRANSFERS IN (Note 5) TRANSFERS OUT (Note 5) CHANGE IN NET ASSETS TOTAL NET ASSETS BEGINNING OF YEAR TOTAL NET ASSETS END OF YEAR 331,393 150,877 (1,324,027) (203,088) (12,650) (306,750) 184,240 515,633 150,877 (415,400) (1,752,077) 43,232 162,000 (192,100) 141,769 (368,069) 1,991,520 24,985,488 5,833,248 19,027,602 49,846,338 9,104,204 $ 24,782,400 $ 5,526,498 $ 19,169,371 $ 49,478,269 $ 11,095,724 The notes to the financial statements are an integral part of this statement. 43 CITY OF TUKWILA: 2009 CAFR BASIC FINANCIAL STATEMENTS CITY OF TUKWILA, WASHINGTON STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE FISCAL YEAR ENDED DECEMBER 31, 2009 Page 1 of 2 WATER /SEWER UTILITY FOSTER GOLF COURSE SURFACE WATER UTILITY TOTAL ENTERPRISE FUNDS GOVERNMENT ACTIVITIES INTERNAL SERVICE FUNDS CASH FLOWS FROM OPERATING ACTIVITIES: CASH RECEIVED FROM USERS CASH PAID TO SUPPLIERS CASH PAID FOR TAXES CASH PAID FOR INVENTORY CASH PAID TO EMPLOYEES OTHER CASH RECEIVED (PAID) NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: SALES AND LEASEHOLD EXCISE TAXES RECEIVED TRANSFERS IN TRANSFERS OUT NET CASH PROVIDED (USED) BY NON- CAPITAL FINANCING ACTIVITIES $ 9,902,567 $ (5,358,703) (1,711,432) (15,943) (1,054,191) 36,972 1,799,270 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: PROCEEDS FROM SALE OF EQUIPMENT PURCHASE OF CAPITAL ASSETS CONTRIBUTED CAPITAL PROCEEDS FROM INSURANCE SETTLEMENT PREMIUM & BOND ISSUANCE COSTS PRINCIPAL PAYMENT ON DEBT INTEREST PAYMENT ON DEBT 1,438,188 $ 2,441,569 $ (390,249) (392,754) (68,195) (415,440) (82,050) - (997,798) (992,791) 3,079 (97,024) 640,584 327,999 (1,324,027) (12,650) (415,400) (1,324,027) 315,349 (415,400) (264,262) (366,601) 482,270 10,797 (653,243) (270,105) 400 (45,274) (1,557,547) 1,736 (232,214) (343,367) (157,288) 278,358 13,782,324 $ 7,914,503 (6,141,706) (4,757,785) (2,195,067) (97,993) (77,299) (3,044,780) (470,996) 40,051 (35,141) 2,342,830 2,573,280 327,999 162,000 (1,752,077) (192,100) (1,424,078) (263,862) (1,969,422) 482,270 12,533 (1,228,824) (149,035) 93,893 (847,466) (3,552) NET CASH PROVIDED (USED) FOR CAPITAL AND RELATED FINANCING ACTIVITIES (1,061,144) (3,116,340) CASH FLOW FROM INVESTING ACTIVITIES: PROCEEDS FROM SALE OF INVESTMENTS PURCHASE OF INVESTMENTS INTEREST RECEIVED NET CASH PROVIDED (USED) IN INVESTING ACTIVITIES NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS- BEGINNING OF YEAR CASH AND CASH EQUIVALENTS -END OF YEAR CASH AT END OF YEAR CONSISTS OF: CASH AND CASH EQUIVALENTS RESTRICTED CASH -BOND PAYMENTS RESTRICTED CASH- CUSTOMER DEPOSITS TOTAL CASH 1,880,538 382,670 (1,407,639) (130,000) 74,902 (382) 547,801 252,288 (38,100) 6,896,930 37,972 144,854 1,428,833 (100,000) 31,154 1,359,987 (37,385) 1,981,287 3,692,041 (1,637,639) 105,674 2,160,076 1,752,933 (1,309,545) 77,905 521,293 (37,513) 2,307,349 9,023,071 5,900,615 6,858,830 $ 182,826 $ 1,943,902 $ 8,985,558 $ 8,207,964 6,462,281 393,549 3,000 $ 103,773 $ 79,053 1,907,005 $ 36,897 8,473,059 $ 8,207,964 509,499 3,000 6,858,830 $ 182,826 $ 1,943,902 $ 8,985,558 $ 8,207,964 44 GOVERNMENT FOSTER SURFACE TOTAL ACTIVITIES WATER /SEWER GOLF WATER ENTERPRISE INTERNAL UTILITY COURSE UTILITY FUNDS SERVICE FUND: CITY OF TUKWILA: 2009 CAFR BASIC FINANCIAL STATEMENTS CITY OF TUKWILA, WASHINGTON STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE FISCAL YEAR ENDED DECEMBER 31, 2009 Page 2 of 2 RECONCILIATION OF NET OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES OPERATING INCOME (LOSS) $ 1,087,605 $ (465,793) $ 380,091 $ 1,001,903 $ 1,819,190 ADJUSTMENTS TO RECONCILE OPERATING INCOME TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES: DEPRECIATION 916,901 316,363 590,888 1,824,152 736,332 ASSET (INCREASES) DECREASES: ACCOUNTS RECEIVABLE (118,193) (9,099) (23,838) (151,130) MISCELLANEOUS A/R- REVENUE 4,325 15,503 (175,906) (156,078) 27,232 INVENTORY (15,943) 9,352 1,108 (5,483) 28,968 LIABILITY INCREASES (DECREASES) : ACCOUNTS & VOUCHERS PAYABLE (11,023) 16,525 (62,223) (56,721) (38,440) DEPOSITS PAYABLE (71,248) 10,269 (23,846) (84,825) WAGES & BENEFITS PAYABLE 67,372 70,637 138,009 COMPENSATED ABSENCES PAYABLE (60,527) (60,781) (45,690) (166,998) TOTAL ADJUSTMENTS 711,664 368,769 260,493 1,340,927 754,092 NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES $ 1,799,269 $ (97,024) $ 640,584 $ 2,342,830 $ 2,573,282 SCHEDULE OF NONCASH INVESTING, CAPITAL AND FINANCING ACTIVITIES CAPITAL ASSETS ACQUIRED BY CONTRIBUTED CAPITAL $ 348,430 $ - $ 184,240 $ 532,670 $ 43,232 INCREASE (DECREASE) IN FAIR VALUE OF INVESTMENT 4,230 - 12,833 17,063 2,148 TOTAL NON CASH INVESTING, CAPITAL AND FINANCING ACTIVITIES $ 352,660 $ $ 197,073 $ 549,733 $ 45,380 The notes to the financial statements are an integral part of this statement. 45 CITY OF TUKWILA: 2009 CAFR BASIC FINANCIAL STATEMENTS 46 CITY OF TUKWILA: 2009 CAFR BASIC FINANCIAL STATEMENTS FIDUCIARY FUNDS Fiduciary funds are used to account for assets held by the City of Tukwila as a trustee or agent for various individuals, private organizations, and other governmental units. The Firemen's Pension Trust Fund is accounted for on an accrual basis. Firemen's Pension Trust Fund This fund accounts for the payment of administrative costs and benefits for retired firefighters (and beneficiaries) who were employed prior to March 1, 1970. Primary revenue sources are general property tax allocations, fire insurance premium tax, and investment interest, in accordance with actuarial recommendations. Agency Fund This fund accounts for the funds over which the City is strictly a short -term custodian. 47 CITY OF TUKWILA: 2009 CAFR BASIC FINANCIAL STATEMENTS CITY OF TUKWILA, WASHINGTON STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUND DECEMBER 31, 2009 FIREMEN'S PENSION AGENCY TRUST FUND FUND ASSETS: CASH AND CASH EQUIVALENTS INVESTMENTS RECEIVABLES: INTEREST DUE FROM OTHER GOVERNMENTAL UNITS TOTAL ASSETS $ 1,336,045 $ 100,320 807 104,628 250 1,437,172 104,878 LIABILITIES: CURRENT PAYABLES TOTAL LIABILITIES 104,878 104,878 NET ASSETS: HELD IN TRUST FOR PENSION BENEFITS AND OTHER PURPOSES $ 1,437,172 $ The notes to the financial statements are an integral part of this statement. 48 CITY OF TUKWILA: 2009 CAFR BASIC FINANCIAL STATEMENTS CITY OF TUKWILA, WASHINGTON STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS FIDUCIARY FUND FOR THE YEAR ENDED DECEMBER 31, 2009 FIREMEN'S PENSION TRUST FUND ADDITIONS: FIRE INSURANCE PREMIUM TAXES $ 48,537 INVESTMENT EARNINGS 10,869 TOTAL ADDITIONS 59,406 DEDUCTIONS: BENEFIT PAYMENTS ADMINISTRATIVE EXPENSES 48,816 18,424 TOTAL DEDUCTIONS 67,240 CHANGE IN NET ASSETS (7,834) NET ASSETS - BEGINNING 1,445,006 NET ASSETS - ENDING $ 1,437,172 The notes to the financial statements are an integral part of this statement. 49 CITY OF TUKWILA: 2009 CAFR BASIC FINANCIAL STATEMENTS 50 CITY OF TUKWILA: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS For the Year Ended December 31, 2009 NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The City of Tukwila was incorporated on June 29, 1908, and operates under the laws of the State of Washington applicable to a non - charter optional code city with a Mayor /Council form of government. Tukwila is served by a Mayor and seven council members, all elected at large to four -year terms. The City provides what are considered general government services including public safety, streets, parks, planning and zoning, permits and inspection, general administrative, water services, sanitary sewer collection, and storm drainage. The accounting and reporting policies of the City of Tukwila, which conform to generally accepted accounting principles for governments, are regulated by the Washington State Auditor's Office. The City's significant accounting policies are described in this note. For business -type activities and enterprise funds reporting, the City applies all applicable GASB pronouncements and all FASB Statements and Interpretations, Accounting Principles Board (APB) Opinions and Accounting Research Bulletins (ARB) issued on or before November 30, 1989, unless they conflict with or contradict GASB pronouncements. A. The Reporting Entity Based on the criteria of Statement No. 14 of the Governmental Accounting Standards Board (GASB), the City's Comprehensive Annual Financial Report (CAFR) includes all funds, agencies and boards for which the City is financially accountable. Financial accountability is defined as appointment of a voting majority of the component unit's board, and either the ability to impose will by the primary government, or the possibility that the component unit will provide a financial benefit to or impose a financial burden on the primary government. There were no component units meeting any of these criteria during 2009. 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 15, Risk Management, for a discussion of the Washington Cities Insurance Authority. B. Basis of Presentation The City's basic financial statements consist of government -wide statements, including a statement of net assets 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 assets and the statement of activities display information about the City as a whole. 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 statements distinguish between city government activities business -type activities. The statement of net assets presents the financial condition of the governmental and business -type activities of the City at year -end. The statement of activities presents a comparison between direct expenses and program activity of the City. Direct expenses are those specifically associated with a 51 CITY OF TUKWILA: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS service, program or department and therefore clearly identifiable to a particular function. Indirect costs are included in the program expense reported for individual functions and activities. The statement of activities reports the expenses of a given function offset by program revenues directly connected with the functional program. A function is an assembly of similar activities and may include portions of a fund or summarize more than one fund to capture the expenses and program revenues associated with a distinct functional activity. Program revenues include charges paid by the recipient of the goods or services offered by the program, grants and contributions that are restricted to meeting the operational or capital requirements of a particular program and interest earned on grants that is required to be used to support a particular program. For identifying to which function program revenue pertains, the determining factor for charges for services is which function generates the revenue. For grants and contributions, the determining factor is to which functions the revenues are restricted. Revenues which are not classified as program revenues are presented as general revenues of the City, and certain limited exceptions. The comparison of direct expenses with program revenues identifies the extent to which each business segment or governmental function is self- financing or draws from the general revenues of the City. Fund Financial Statements During the year, the City segregates transactions related to certain City functions or activities in separate funds in order to aid financial management and to demonstrate legal compliance. Fund financial statements are designed to present financial information of the City at this more detailed level. The focus of governmental and enterprise fund financial statements is on major funds. Each major fund is presented in a separate column. Non -major funds are aggregated and presented in a single column. Internal service funds are combined and the totals are presented in a single column on the face of the propriety fund statements. Fiduciary funds are reported by type. 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 comprise its assets, liabilities, 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 only current assets and current liabilities are generally included on their balance sheets. Their reported fund balance (net current assets) is considered a measure of "available spendable resources." Governmental fund operating statements focus on measuring changes in financial position, rather than net income; they present increases (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: 1) The General Fund is the general operating fund of the City. It accounts for all financial resources and transactions except those required to be accounted for in another fund. 2) The Arterial Street Fund, a major special revenue fund, is established in accordance with RCW 82.36.020 for the administration of the State - levied motor vehicle half -cent gasoline tax distributed to 52 CITY OF TUKWILA: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS Tukwila. The City provides a portion of its sales tax revenues as well as several smaller tax resources for construction of large arterial street projects. 3) The Land Acquisition, Recreation and Park Development Fund is used to account for financial resources to be used for the acquisition of land, development of land, and construction of park facilities. The other governmental funds of the City, which are Special Revenue Funds account for the proceeds of specific revenue sources that are legally restricted for expenditures for specified purposes. Proprietary Funds Proprietary Funds are accounted for on a "flow of economic resources" measurement focus. This means all assets and all liabilities (whether current or noncurrent) associated with their activity are included on their balance sheets. Proprietary fund operating statements present increases (revenues and gains) and decreases (expenses and losses) in net total assets. Proprietary funds measurement focus is based upon determination of net income, financial position, and cash flows. Proprietary funds distinguish operating revenues and expenses from non - operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the City's enterprise and internal service funds are charges to the City's customers for sales and services. Operating expenses for the enterprise funds and internal service funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non - operating revenues and expenses. As described below, there are two generic fund types in this category. Restricted assets shown in the government -wide financial statements and the proprietary funds balance sheet include monies reserved for payment of revenue bond debt, and deposits held for utility and golf course customer accounts. When both restricted and unrestricted resources are available for use, it is the City's policy to use restricted resources first, then unrestricted resources as they are needed. The City's Enterprise Funds account for utility and recreation operations which are self - supported through user charges. The utilities are financed and operated like a private business enterprise which requires periodic determination of revenues earned, expenses incurred, and net income for capital maintenance, public policy, management control and accountability. The City's major enterprise funds are as follows: 1) The Water /Sewer Utility Fund accounts for operations and capital improvements to provide water and sanitary sewer services to the City. 2) The Foster Golf Course Fund is used to account for the operation, maintenance, debt service, and improvements of the municipal facility. 3) The Surface Water Utility Fund accounts for the operations and capital improvements for the City's storm drainage and surface water management function. The City has three Internal Service Funds. The Equipment Rental Fund is used to account for the costs of maintaining and replacing all City vehicles and auxiliary equipment except for major fire apparatus. All equipment costs, including depreciation, are factors in calculating the rates charged to each user department. The Insurance and Insurance — LEOFF I Funds are used to account for the costs of the City's self- insured medical plan. Medical and dental costs for covered employees are charged to the respective user departments. All premiums, medical and dental costs and ancillary charges are included. 53 CITY OF TUKWILA: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS Fiduciary Funds Fiduciary Funds account for assets held by the City in a trustee capacity or as an agent for individuals, private organizations, other governments, and other funds. The City has two Fiduciary Funds, Firemen's Pension Trust Fund and Agency Fund. The Firemen's Pension Trust Fund is accounted for in essentially the same manner as Proprietary Funds. The Agency Fund is custodial in nature (assets equal liabilities) and does not involve a measurement of results of operations. D. Measurement Focus Government -wide Financial Statements — The government -wide financial statements are prepared using the economic resources measurement focus. All assets and liabilities associated with the operation of the City are included on the Statement of Net Assets. Fund Financial Statements — All governmental funds are accounted for using a flow of current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. The statement of revenues, expenditures and changes in fund balances reports on the sources (i.e., revenues and other financing sources) and uses (i.e., expenditures and other financing uses) of current financial resources. This approach differs from the manner in which the government activities of the government -wide financial statements are prepared. Governmental fund financial statements therefore include a reconciliation with brief explanations to better identify the relationship between the government -wide statements and statements for governmental funds. Like the government -wide statements, all proprietary fund types are accounted for on a flow of economic resources measurement focus. All assets and all liabilities associated with the operation of these funds are included on the statement of net assets. The statement of changes in fund net assets presents increases (i.e., revenues) and decreases (i.e., expenses) in net total assets. The statement of cash flows provides information about how the City finances and meets the cash flow needs of its proprietary activities. Fiduciary funds are reported using the economic resources measurement focus. E. Basis of Accounting Basis of accounting refers to the recognition of revenues and expenditures or expenses in the accounts and reporting them in the financial statements. Government -wide financial statements are prepared using the accrual basis of accounting. Governmental funds use the modified accrual basis of accounting. Proprietary and fiduciary funds use the accrual basis of accounting. Revenues — Exchange and Non - exchange Transactions Revenues resulting from exchange transactions, in which each party gives and receives essentially equal value, is recorded on the accrual basis when the exchange takes place. The modified accrual basis of accounting is followed in all governmental funds of the City. Under the modified accrual basis of accounting, revenues are recorded when susceptible to accrual, i.e., both measurable and available. "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to pay current liabilities. For the City, available means expected to be received within sixty (60) days of year -end. The primary accrued revenues that meet this criteria are property and sales taxes. Non - exchange transactions, in which the City receives value without directly giving equal value in return, include property taxes, sales and use taxes, admission taxes, gambling taxes, utility taxes, 54 CITY OF TUKWILA: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS 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 Revenue sources which are not considered to meet the measurable and available criteria for revenue recognition include licenses and permits, fines and forfeitures, and other miscellaneous revenues since they are generally not measurable until received. Under the modified accrual basis, expenditures are recorded when the fund liability is incurred, except for principal and interest on general long -term debt and vacation and sick pay which are recorded when paid. As a general rule the effect of interfund activity has been eliminated via the process of consolidation from the government -wide financial statements. Internal service fund and similar internal activity has been eliminated from the government -wide statement of activities so expenses are not reported twice. Exceptions to this general rule are payments for interfund services provided and used, such as between the City's water, sewer, and surface water functions and various other functions of the City, which are not eliminated in the process of consolidation. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Amounts reported on the government -wide statements as program revenues include, charges to customers or applicants for goods, operating grants and contributions, and capital grants and contributions. General revenues include all taxes. The accrual basis of accounting is followed in all proprietary funds. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recorded when incurred. All assets and liabilities are recorded in the fund. F. Budgets and Budgetary Accounting The City of Tukwila budgets its funds in accordance with the Revised Code of Washington 35A.33. In compliance with the code, biennial budgets are adopted for the general fund and special revenue funds. For governmental funds, there are no substantial differences between the budgetary basis and generally accepted accounting principles. Budgetary accounts are integrated in fund ledgers for all budgeted funds, but the financial statements include budgetary comparisons for biennially budgeted governmental funds only. Budgets established for proprietary and fiduciary funds are "management budgets" and are not legally required to be reported and, as such, are not reported in the CAFR. The biennial appropriated budgets are adopted at the level of the fund and the budgets constitute the legal authority for expenditures at that level. Subsidiary revenue and expenditure records are used to compare the budgeted amounts with actual revenues and expenditures. As a management control device, the subsidiary ledgers monitor expenditures for individual functions and activities by object class. Any unexpended appropriation balances lapse at the end of the year. 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 preceeding 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. 55 CITY OF TUKWILA: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS 3) The Council makes its adjustments to the proposed budget and adopts by ordinance a final balanced budget no later than December 31. 4) The final operating budget as adopted is published and distributed within the first month of the following year. Copies of the budget are made available to the public. The Mayor may authorize transfers within funds; however, the City Council must approve by ordinance any amendments that increase the total for the fund. Budget amounts presented in the basic financial statements include both the original amounts and the final amended budget as approved by the City Council. Expenditure Categories General Government: includes administration, finance, municipal court, attorney, and city clerk activities. Public Safety: includes all police and fire activities. Physical Environment: includes expenditures for the public works activities not chargeable to the enterprise funds. Transportation: includes all street and arterial street maintenance and construction. Economic Environment: reflects the planning and building inspection activities. Culture and Recreation: includes the parks and recreation activities. 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, imprest funds, and the State Treasurer's Local Government Investment Pool. All funds in the care of other institutions are considered investments. Cash equivalents are short -term, highly liquid investments that are readily convertible to known amounts of cash, or are near their maturity date. Investments Investments are held separately by each of the funds with interest earned directly for the benefit of each fund. Investments are reported on the financial statements at fair value, cost or amortized cost, depending on the type and maturity length of each investment as required by GASB Statement 31. Washington State statutes provide for the City to hold investments consisting of obligations of the Federal Government, repurchase agreements, prime banker's acceptances, and time certificates of deposit. Additional deposit and investment information is presented in Note 3. Notes Receivable Notes receivable in the enterprise funds consists of sewer connection fees due from customers to the utility. Receivables and Payables Activity between funds that is representative of lending /borrowing arrangements outstanding at the end of the fiscal year are referred to as either "interfund loans receivable /payable" or "advances to /from other funds." All other outstanding balances between funds are reported as "due 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." 56 CITY OF TUKWILA: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS Interfund loans and advances between funds, as reported in the fund financial statements, are offset by a fund balance reserve account in applicable governmental funds to indicate they are not available for appropriation and are not expendable available financial resources. See also Note 5 on interfund transactions. Inventories Inventories carried in proprietary funds are valued at average cost using the consumption method. A physical count is taken at year -end. Governmental funds use the purchase method whereby inventory items are considered expenditures when purchased. Deferred Charges Unamortized debt issuance costs are those costs incurred for the issuance of long -term debt, such as legal fees, printing costs and other costs. These costs are deferred and amortized over the lives of the related issues. Capital Assets and Depreciation The accounting and reporting treatment applied to the capital assets associated with a fund are determined by its measurement focus. Capital assets acquired in governmental funds are accounted for as expenditures in the fund when the asset is purchased. These assets are reported in the governmental activities column of the government -wide statement of net assets 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 assets and in the respective funds. All capital assets are capitalized at cost (or estimated historical cost) and updated for additions and retirements during the year. Donated assets are valued at estimated fair market value at time of acquisition. Where historical cost is not known, assets are recorded at estimated historical costs. The City maintains a capitalization threshold of five thousand dollars. The City's infrastructure consists of roads, bridges, storm sewers, water and sewer distribution and collection systems. Improvements are capitalized; the costs of normal maintenance and repairs that do not add to the value of the asset or materially extend an asset's life are not. Depreciation is computed using the straight line method over estimated service lives, as follows: Asset Estimated Service Life Buildings 25 to 50 years Non - Building Improvements 25 to 50 years Utility Plant 10 to 50 years Machinery and Equipment 2 to 50 years Infrastructure 25 to 50 years See Note 6 for additional information on capital assets. Plant Acquisition Adjustments The State Auditor's Office promulgates a chart of accounts which defines Plant Acquisition Adjustments as an intangible asset account used only in proprietary fund utilities. This account includes the difference between the cost to the current governmental owner and the cost incurred by the person or company that first devoted the property to utility service. These costs are being amortized using the straight -line method over the estimated service lives of the related capital assets. 57 CITY OF TUKWILA: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS Compensated Absences Labor contracts with City of Tukwila employees call for the accumulation of vacation and sick leave. At termination of employment, employees with the required length of service may receive cash payments for all accumulated vacation leave to a maximum of 384 hours. Sick leave termination benefits are based on a percentage of accumulated sick leave up to a maximum of 180 hours. The payment is based on current wages at termination. The entire compensated absence liability is reported on the government -wide financial statements. In the enterprise funds, the entire amount of compensated absences is reported as a fund liability. This reporting format is in compliance with GASB Statement No. 16. The internal service funds do not report benefit accruals because they are immaterial. Long -Term Obligations In the government -wide financial statements, and proprietary fund types in the fund financial statements, long -term debt and other long -term obligations are reported as liabilities in the applicable governmental activities, business -type activities, or proprietary fund type statement of net assets. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the straight line method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as deferred charges and amortized over the term of the related debt. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. Long -term debt outstanding at year -end is outlined in Note 10. Fund Equity - Reserves and Designations The City recognizes in its reporting that assets are sometimes not "available spendable resources" or not at times legally available for appropriation, because they are contractually or legally restricted for some specific future use. When this is the case, as for example with imprest funds, fund equity is "reserved ". Fund balance represents the difference between the current assets and current liabilities. The City reserves those portions of fund balance which are legally segregated for a specific future use or which do not represent available, spendable resources and therefore are not available for general appropriation or expenditure. Unreserved fund balance indicates that portion of fund balance that is available for appropriation in future periods. Designations are management's intent to set aside these resources for specific services. Net assets represent the difference between assets and liabilities. Net assets invested in capital assets, net of related debt, consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any borrowing used (i.e., the amount that the City has not spent) for the acquisition, construction or improvement of those assets. Net assets are reported as restricted when there are limitations imposed on their use either through the enabling legislation adopted by the City or through external restrictions imposed by creditors, grantors or laws or regulations of other governments. All other net assets are reported as unrestricted. The City applies restricted resources first when an expense is incurred for purposes of which both restricted and unrestricted net assets are available. 58 CITY OF TUKWILA: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS Risk Management and Risk Retention It is the City of Tukwila's policy to self- insure for unemployment benefits because of the insignificant liability. Medical and dental self- insurance coverage is also provided for employees. All buildings, City equipment, and City vehicles are insured by carriers for property coverage at replacement value. The City of Tukwila is a member of the Washington Cities Insurance Authority (WCIA) as of January 1, 1984. The WCIA is an organization of Washington municipal entities numbering 136 as of December 31, 2009. WCIA provides pooled self- insurance coverage for general liability, vehicle liability, false arrest, and errors and omissions. See Note 15 for additional information on risk management. Operating Revenues and Expenses Operating revenues are generated directly from the primary activity of the proprietary funds. For the City, these revenues are charges for services for the use of the golf course, for the rental of the administration center and solid waste program, and the internal use of vehicles, computers and facilities. Operating expenses are necessary costs incurred to provide the good or service that are the primary activity of each fund. All other revenues and expenses are classified as non - operating including investment earnings, interest expense and the gain or loss on the disposition of capital assets. Contributions of Capital Contributions of capital in proprietary fund financial statement arise from outside contributions of capital assets, for example, developers, and grants or outside contributions of resources restricted to capital acquisition and construction. lnterfund Activity Exchange transactions between funds are reported as revenues in the seller funds and as expenditures /expenses in the purchaser funds. On the government -wide statement of activities, the exchange transactions between the internal service funds and the user funds are eliminated. Flows of cash or goods from one fund to another without a requirement for repayment are reported as interfund transfers. lnterfund transfers are reported as other financing sources /uses in governmental funds and after non - operating revenues /expenses section in proprietary funds. Repayments from funds responsible for particular expenditures /expenses to the funds that initially paid for them are not presented on financial statements. Transfers between governmental and business -type activities on the government -wide statement of activities are reported separately after general revenues. Transfers between funds reported in the governmental activities column are eliminated. Transfers between funds reported in the business type activities column are eliminated. Estimates The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates. H. Changes in Accounting Standards The Governmental Accounting Standards Board (GASB) has issued Statement No. 34 Basic Financial Statements — and Management's Discussion and Analysis — for State and Local Governments, Statement No. 37 Basic Financial Statements — and Management's Discussion and Analysis — for State 59 CITY OF TUKWILA: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS and Local Governments: Omnibus – an amendment of GASB Statements No. 21, and No. 34, and Statement No. 38 Certain Financial Statement Note Disclosures. These accounting and reporting standards impacted the City's revenue and expenditure recognition and assets, liabilities, and fund equity reporting. The standards also required reformatting of the financial statements and restating beginning balances. These GASB standards were implemented in 2003 except for the full reporting of infrastructure assets, which was implemented in 2004. In 2008, the City implemented the following Government Accounting Standards Board (GASB) statements: GASB Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions. GASB Statement No. 45 establishes standards of accounting and reporting for other postemployment benefits (OPEB) expense /expenditures and related OPEB liabilities or OPEB assets, note disclosures, and required supplementary information (RSI) in the financial reports of state and local governmental employers. GASB Statement No. 50, Pension Disclosures —an amendment of GASB Statements No. 25 and No. 27. GASB Statement No. 50 more closely aligns the financial reporting requirements for pension with those for other postemployment benefits (OPEB). NOTE 2 – STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY There have been no material violations of finance - related legal or contractual provisions, and there have been no expenditures exceeding legal appropriations in any of the funds of the City of Tukwila. NOTE 3 – EQUITY IN POOLED CASH AND INVESTMENTS, CASH, DEPOSITS AND INVESTMENTS The City maintains a cash and investment pool available for use by all funds. Interest earned on pooled investments is recorded in the participating funds. Investments are also held separately by several of the funds, with interest earned directly for the benefit of each fund. Cash and Cash Equivalents At year -end, the carrying amount of the City's bank balance was $4,866,371. Of the bank balance, $250,000 was covered by Federal depository insurance and the Washington State Public Depository Protection Commission insured the remainder. The City also maintains imprest funds totaling $17,900. The City participates in the State Treasurer's Investment Pool, which is a 2a7 -like unrated pool, overseen by the State Treasurer's Office. The fair value of the City's position in the pool is the same as the value of the pool shares. Because of its highly liquid nature, the Pool funds are considered cash equivalents. In 2009, excess cash in Debt Service Funds were transferred to the General Fund. Negative cash balances in the Debt Service Funds are offset by current taxes receivable. Deposits and Investments The City's investment portfolio includes Federal Home Loan Bank (FHLB) bonds, Federal National Mortgage Association (FNMA) notes, Federal Farm Credit Bureau (FFCB) notes and Federal Home Loan Mortgage Corporation (FHLMC) notes. 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 60 CITY OF TUKWILA: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS 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, 2009, the City had the following deposits and investments: SCHEDULE OF INVESTMENTS BY MATURITY Call Date Date Credit Rating Total U.S. Agency Note: Federal Home Loan Bank 02/25/2010 08/24/2012 AAA /Aaa $ 902,180 Certificates of Deposit: US Bank * 01/31/2010 * 2,350,754 Sound Community Bank * 06/15/2010 * 1,008,452 Sound Community Bank * 04/20/2011 * 1,519,633 First Savings Bank Northwest * 05/01/2011 * 2,030,860 Charter Bank * 05/26/2011 * 1,517,678 N /A, no call date or credit rating with certificate of deposit accounts. Total Investments $ 9,329,556 Unrestricted Restricted Total Cash and Cash Equivalents: Cash on hand Depository accounts Moneymarket account Local Government Investment Pool Total cash and cash equivalents Investments: Federal agency note Certificates of deposit Total investments Total Cash, Cash Equivalents, and Investments $ 14,200 $ 1,769,580 121,499 535,862 26,128,842 424,694 28,448,484 546,193 902,179 8,427,378 9,329,556 $ 14,200 1,891,079 535,862 26, 553, 536 28,994,677 902,179 8,427,378 9,329,556 $37,778,040 $ 546,193 $ 38, 324, 233 Interest Rate Risk. Interest rate risk is the risk that changes in interest rates of debt investments will adversely affect the fair value of an investment. As a means of limiting its exposure to fair value losses arising from rising interest rates, the City's investment policy limits at least half of the City's cash and investment portfolio to maturities of less than one year. Investment maturities are limited as follows: 1) At the time of investment, a minimum of fifty percent (50 %) of the cash and investment portfolio will be comprised of investments maturing or available within one year. 2) At the time of investment, no securities or investment instruments shall have a maturity exceeding four years, except when compatible with a specific fund's investment needs. 3) The average maturity of the portfolio shall not exceed two (2) years. 61 CITY OF TUKWILA: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS Credit Risk. Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. State statutes and the City's investment policy limit the types of securities authorized for investment by the City. The principal governing statutes are RCW 39.59 and RCW 39.60. The Finance Director may further restrict eligible investments by this policy at his /her discretion. Authorized investments include (but are not limited to): 1) U.S. Treasury Securities. 2) U.S. Agency Securities (i.e., obligations of any government- sponsored corporation eligible for collateral purposes at the Federal Reserve). 3) Certificates of Deposit, Money Market Deposit Accounts and savings deposits with qualified depositories within statutory limits as promulgated by the PDPC 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, 2009, the City's Federal Home Loan Bank bond investments, Federal National Mortgage Association note investments, and Federal Home Loan Mortgage Corporation note investments were rated AAA by Standard & Poor's and Aaa by Moody's Investors Service. Concentration of Credit Risk. Concentration of credit risk is the risk of loss attributed to the magnitude of an investment in a single issuer. The City of Tukwila diversifies its investments by security type and Institution as described below: 1) No more than fifty percent (50 %) of the City's cash and investment portfolio, at the time of purchase, shall be in any single financial institution. 2) Except, that no more than seventy -five percent (75 %) of the City's portfolio, at the time of purchase, shall be invested in the Washington State Local Government Investment Pool, and 3) No more than seventy -five percent (75 %) of the City's portfolio, at the time of purchase, shall be invested in U.S. Treasury or Agency securities. NOTE 4 — RECEIVABLES Property Taxes Receivable The County Finance Director acts as an agent to collect property taxes levied in the County for all taxing authorities. Taxes are levied annually on January 1 on property value listed as of the prior August 31. Assessed values are established by the County Assessor at 100% of fair market value. A revaluation of all property is required every two years. On May 31 of each year the assessed value of property is established for the next year's property tax levy. Property taxes levied by the County Assessor and collected by the County Finance Director become a lien on the first day of the levy year and may be paid in two equal installments if the total amount exceeds $50. The first half of real property taxes is due on April 30 and the balance is due October 31. Delinquent taxes bear interest at the rate of 12% and are subject to additional penalties if not paid as scheduled. 62 CITY OF TUKWILA: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS During the year, property tax revenues are recognized when cash is received. At year -end, unpaid property taxes are recorded as a receivable. Property tax receivables at year -end normally are not expected to be collected within 60 days after the current period and are, therefore, reported as deferred revenue in the governmental funds financial statements. The tax rate for general City operations is limited to $3.60 per $1,000 of assessed value. Of this amount, up to $0.45 per thousand may be designated for contribution to the Firemen's Pension Fund, if a report by a qualified actuary indicates that additional funds are required. The payment of principal and interest on limited tax (non- voted) bonds issued by the City is made from the general levy. Accordingly, the issuance of limited tax general obligation bonds has the effect of reducing property taxes available for the general operations of City government. State law also provides that the City's operating levy may not exceed 101 % of the largest single levy of the past three years. The State Constitution provides that the total of all taxes upon real and personal property by the State and all taxing entities, including the City, shall not in any year exceed 1% ($10 per $1,000) of the true and fair monetary value of such property. This limitation may be exceeded upon the approval of 60% of the City voters at an election in which the total vote exceeds 40% of the votes cast at the last general election. For 2009, the City's general tax levy was $2.66345 per each $1,000 of assessed valuation. Total assessed valuation for 2008 was $5,175,709,975 and was the basis for the 2009 assessments. Actual 2009 general levy property taxes collected were $12,190,219. Intergovernmental Grants and Entitlements All receivables from other governments are recorded at year -end as amounts Due from Other Governmental Units. These amounts represent Federal, State, and local reimbursement -type grants, and are reported as receivables and intergovernmental revenues in the year when the related expenditures are incurred. NOTE 5 — INTERFUND TRANSACTIONS Interfund transactions are classified as follows: 1) Services Provided — Transactions that would be treated as revenues, expenditures or expenses if they involve external organizations, such as buying goods and services or payments in lieu of taxes, are similarly treated when they involve other funds of the City of Tukwila. 2) Transfers — Transactions to support the operations of other funds are recorded as "Transfers" and classified with "Other Financing Sources or Uses" in the fund statements. Transfers between governmental or proprietary funds are netted as part of the reconciliation to the Government -wide financial statements. 3) 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. 4) Interfund Loans /Advances — Loans between funds are classified as interfund loans receivable and payable or as advances to and from other funds in the fund statements. Interfund loans are offset by a reservation of fund equity. Interfund loans are subject to elimination upon consolidation. 63 CITY OF TUKWILA: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS There were no interfund loans outstanding at December 31, 2009. Interfund transfers were as follows: Government and Internal Service Funds: General Fund Other Government Funds Internal Service Funds Total Transfers In Transfers (Out) Net Transfers In (Out) $ 3,156, 300 (709,444) $ 2,446,856 $ 709,444 (1,525,000) $ (815,556) $ 162,000 (192,100) $ (30,100) $ 4,027,744 (2,426, 544) $ 1,601,200 Proprietary Funds: Water /Sewer Utility Surface Water Foster Golf Utility Course Total Transfers In Transfers (Out) $ 150,877 (1,324,027) (415,400) $ (415,400) $ $ 150,877 (12,650) (1,752,077) Net Transfers In (Out) $ (1,173,150) $ (12,650) $(1,601,200) The principal purposes for interfund transfers include interfund subsidies and transfers into debt service and capital projects funds. 64 CITY OF TUKWILA: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS NOTE 6 — CAPITAL ASSETS Capital asset activity for the year ended December 31, 2009, was as follows: Beginning Balance Increases Decreases Ending Balance Governmental Activities Capital assets, not being depreciated: Land $ 38,918,823 $ 433,356 $ (93) $ 39,352,086 Construction in Progress 8,186,944 13,888,802 (752,936) 21,322,810 Total capital assets, not being depreciated 47,105,767 14,322,159 (753,029) 60,674,896 Capital assets, being depreciated: Buildings 23,178,885 - 24,013,118 Other Improvements 12,413,021 - 12,534,798 Machinery and Equipment 15,291,994 (525,842) 15,984,629 Infrastructure 113,570,916 (471,088) 119,101,710 Total capital assets being depreciated Less accumulated depreciation for: Buildings Other Improvements Machinery and Equipment Infrastructure Total accumulated depreciation Total capital assets, being depreciated, net 109,433,087 2,668,923 (34,248) 112,067,762 Governmental activity capital assets, net $ 156,538,854 $ 16,991,082 $ (787,277) $ 172,742,658 834,233 121,777 1,218,477 6,001,882 164, 454, 816 8,176, 369 (996, 930) 171, 634, 255 (8,160,021) (559,698) - (8,719,719) (7,331,258) (528, 910) - (7,860,168) (8,749,559) (1,197,453) 513,261 (9,433,751) (30,780,891) (3,221,385) 449,421 (33,552,855) (55,021,729) (5,507,446) 962,682 (59,566,493) Business -type Activities Capital assets, not being depreciated: Land $ 1,907,416 $ Construction in Progress 1,135,478 Total capital assets, not being depreciated 3,042,894 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 50,799,111 11,133, 224 62,811,519 2,389,557 - $ - $ 1,907,416 1,959,767 (827,379) 2,267,865 1,959,767 (827, 379) 4,175, 280 9,822 11,143, 046 1,259,710 (406,167) 63, 665, 063 16,008 (29, 000) 2,376,565 76,334,300 (2,126,067) (22,073,701) (1,335,421) (25,535,189) 1,285,540 (435,167) 77,184, 674 (299,262) - (2,425,329) (1,383,739) 141,673 (23,315,767) (138,997) 29,000 (1,445,418) (1,821,998) 170,673 (27,186,514) (536,458) (264,494) 49,998,159 $ 1,423,309 $ (1,091,873) $ 54,173,441 Business -type activity capital assets, net $ 53,842,005 65 CITY OF TUKWILA: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS All reported capital assets of the City are depreciated. Improvements are depreciated over the remaining useful lives of the related capital assets. Useful lives for infrastructure were estimated based on the City's historical records of necessary improvements and replacement. Capital Asset Increases Governmental Activities: Capital Outlays Developer Turnovers Developer Contributions Construction in Progress to Capital (Infrastructure) Internal Service Funds (Equipment Rental) $ 16,945,507 3,896,807 752,936 903,279 Governmental Activities - Total Increases $ 22,498,529 Depreciation Expense Governmental Activities: General Government $ 65,814 Public Safety 324,820 Physical Environment 584,787 Transportation 3,236,224 Economic Environment 12,045 Culture and Recreation 547,424 Capital assets held by the government's internal service funds charged to the various functions based on usage of assets 736,332 Total depreciation expense - governmental activities $ 5,507,446 Business -type Activities: Water /Sewer Utility Foster Golf Course Surface Water Utility Total depreciation expense - business -type activities NOTE 7 — JOINT VENTURES Valley Communications Center $ 914,747 316,363 590,888 $ 1,821,998 The "Valley Communications Center" was established August 20, 1976, when an Interlocal Agreement was entered into by the four original participating municipal corporations, including the cities of Renton, Kent, Auburn, and Tukwila, with Federal Way formally admitted during 2000. The agreement is sanctioned by the provisions and terms of the Interlocal Cooperation Act pursuant to RCW 39.34. The initial duration of the agreement was five years, and thereafter is automatically extended for consecutive five -year periods. The purpose of the joint operation, hereafter referred to as Valley Com, is to provide improved consolidated emergency communications (dispatch) services for police, fire, and medical aid, to the five participating cities and to several subscribing agencies, which include King County Fire District Nos. 2, 20, 26, 40, 43, 44, and 47; City of Pacific Police and Fire Departments; City of Black Diamond Police and 66 CITY OF TUKWILA: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS Fire Departments; City of Algona and Des Moines Police Departments; SeaTac Fire Department; North Highline Fire Department; Vashon Island Fire Department; and King County EMS Units. Separate agreements between Valley Com and the subscribing agencies have been executed, which set forth conditions of services and rates charged. The allocation of prorated financial participation among the five participating cities is the percentage of estimated dispatched calls attributed to each jurisdiction compared to the total estimated dispatched calls for the current 12 -month period ending December 31. The 2009 cost distribution for the five participating cities is as follows: City Dispatchable Percent of Calls Total Renton 80,007 18.03% Kent 102,460 27.23% Auburn 69,753 21.40% Tukwila 36,374 10.47% Federal Way 85,620 22.87% Total 374,213 100.00% Valley Com is governed by an Administration Board composed of the Mayors from the five participating cities of Renton, Kent, Auburn, Tukwila, and Federal Way. The Board is responsible for the following functions: (1) Adopting an annual budget after review by participating legislative bodies; (2) Appointment and /or discharge of the Director; (3) Approves personnel policy and makes final decisions on all major policy changes; (4) Reviews and approves all contracts. In addition, an Operating Board was established and consists of two members of each participating City's Public Safety Departments, including the heads of such departments or their designees. The Operating Board performs the following functions: (1) Oversees the operation of Valley Com and advises and makes recommendations to the Administration Board; (2) Makes recommendation on Director selection; (3) Presents proposed policies and budgets to the Administration Board; (4) Approves disbursement of funds by the Director. The Director presents a proposed budget to the Operating Board on or before August 15 of each year. The proposed budget is then presented to the Administration Board by September 1 of each year. The Administration Board can make changes to the proposed Valley Com budget as it finds necessary, but final approval falls to the legislative body of each participating city, in accordance with the provisions of the Interlocal Agreement. The share of equity belonging to the five participating cities is as follows: ITEM FEDERAL RENTON KENT AUBURN TUKWILA WAY TOTAL Equity January 1, 2009 $ 4,459,234 $6,379,999 $4,240,612 $2,573,342 $2,696,072 $20,349,259 Current Year Increase /(Decrease) 194,689 248,172 168,164 87,908 207,404 906,337 Equity December 31, 2009 $ 4,653,923 $6,628,171 $4,408,776 $2,661,250 $2,903,476 $21,255,596 Percent of Equity 21.90% 31.18% 20.74% 12.52% 13.66% 100.00% Liabilities are the responsibility of the five participating cities in direct proportion to their equity position. In August 1993, Valley Com entered into an interlocal cooperation agreement, pursuant to Chapter 39.34 RCW, with the subregions of King County, Seattle, and the Eastside Public Safety Communications Agency. This agreement governs the development, acquisition and installation of the 800 MHz 67 CITY OF TUKWILA: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS emergency radio communications system funded by a $57 million King County levy approved in November 1992. This agreement provides that upon voluntary termination of any subregion's participation in the system, it surrenders its radio frequencies, relinquishes its equipment and transfers any unexpended levy proceeds and associated equipment replacement reserves to another subregion or consortium of subregions. Thus, in accordance with this agreement, the participating cities of Valley Com have no equity interest in Valley Com's 800 -MHz communications system. During 2000, the Valley Communications Center Development Authority was created to issue $12,758,000 in General Obligation Bonds to finance construction, equipment, and land for a new facility completed in 2002. Each of the five participating cities is 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. A complete set of financial statements are available from Valley Communications Center, 27519 108th Ave SE, Kent, WA 98030, or telephone 253 - 372 -1300. South Correctional Entity (SCORE) The South Correctional Entity (SCORE) consolidated correctional facility was established February 25, 2009, when an Interlocal Agreement (the "Original Interlocal Agreement ") was entered into by seven participating municipal governments, the "Member Cities" of Auburn, Burien, Des Moines, Federal Way, Renton, SeaTac and Tukwila, under the authority of the "Interlocal Cooperation Act" (RCW 39.34). This "Original Interlocal Agreement" was amended and restated October 1, 2009 and named the City of Des Moines as the "Host City" and the remaining Member Cities as "Owner Cities ". This interlocal agreement is known as the "Formation Interlocal Agreement ". Pursuant to a separate "Host City Agreement" dated October 1, 2009, the Host City will not enjoy the same equity position as the Owner Cities until all debts issued are paid and the Host City fulfills all of its obligations as outlined in the Agreement. SCORE, an governmental administrative agency pursuant to RCW 39.34.030 (3), has the power to acquire, construct, own, operate, maintain, equip, and improve a correctional facility known as the "SCORE Facility" and to provide correctional services and functions incidental thereto, for the purpose of detaining arrestees and sentenced offenders in the furtherance of public safety and emergencies within the jurisdiction of the Member Cities. The SCORE Facility may serve the Member Cities and Subscribing Agencies which are in need of correctional facilities. Any agreement with a Subscribing Agency shall be in writing and approved by SCORE as provided within the SCORE Formation Interlocal Agreement. Financing for the acquisition, construction, equipping, and improvement of the SCORE Facility will be 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 and secured by the full faith and credit of the Cities of Auburn, Burien, Federal Way, Renton, SeaTac, and Tukwila (the "Owner Cities "). The SCORE PDA issued $86 million in special obligation bonds in 2009 to carry out the facility development project. The following is a summary of the debt service requirements for the bond issue: 68 CITY OF TUKWILA: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS Summary of Debt Service Requirements Note: Interest is to be paid from bond proceeds during the construction period (2010 -2011) The City of Tukwila reports its share of equity interest in the Governmental Activities column within the Government -wide financial statements under non - current assets. The following is condensed (unaudited) financial information as of December 31, 2009 related to SCORE: Item Federal Auburn Burien Way Renton SeaTac Tukwila Total Equity January 1, 2009 $ - $ - $ - $ - $ - $ - $ Current Year Increase /(Decrease) 1,692,471 218,383 982,725 1,965,450 163,787 436,767 5,459,583 Equity December3l, 2009 $1,692,471 $218,383 $982,725 $1,965,450 $163,787 $436,767 $5,459,583 Percent of Equity 31.00% 4.00% 18.00% 36.00% 3.00% 8.00% 100.00% Completed financial statements for SCORE and SCORE PDA can be obtained from the SCORE office, City of Renton, 1055 South Grady Way, Renton, WA 98057. NOTE 8 - PENSION PLANS The City implemented GASB Statements 25 and 27 for reporting of pension plans in 1996. For all plans the pension liability (asset) was determined in accordance with GASB Statement 27 to be zero both before and at the effective date of the transition. Washington State Department of Retirement Systems Substantially all of the City's full -time and qualifying part -time employees participate in one of the following statewide cost - sharing, multiple - employer, defined benefit public employee retirement plans administered by the State Department of Retirement Systems (DRS). Historical trend and other information regarding each plan are presented in the State Department of Retirement Systems 2009 Comprehensive Annual Financial Report. A copy of this report may be downloaded from the DRS website at www.drs.wa.gov/ administration /annual - report /cafr/ or obtained by writing to: Department of Retirement Systems Communications Unit PO Box 48380 Olympia, WA 98504 -8380 The following disclosures are made pursuant to GASB Statement No. 27, Accounting for Pensions by State and Local Government Employers, and GASB Statement No. 50, Pension Disclosures -an amendment of GASB Statements No. 25 and No. 27. 69 Debt Service Schedule Debt Service Allocation to Owner Cities Year Principal Interest 35% BABs Subsidy Total Auburn 31% Federal Way Burien 4% 18% Renton 36% SeaTac 3% Tukwila 8% 2010 $ - $ 3,394,191 $ (265,223) $ 3,128,968 $ 969,980 $ 125,159 $ 563,214 $ 1,126,428 $ 93,869 $ 250,317 2011 - 5,155,732 (1,675,089) $ 3,480,643 1,078,999 139,226 626,516 1,253,031 104,419 278,451 2012 - 5,155,732 (1,675,089) $ 3,480,643 1,078,999 139,226 626,516 1,253,031 104,419 278,451 2013 1,915,000 5,126,998 (1,675,089) $ 5,366,909 1,663,742 214,676 966,044 1,932,087 161,007 429,353 2014 1,950,000 5,066,566 (1,654,975) $ 5,361,591 1,662,093 214,464 965,086 1,930,173 160,848 428,927 2015 -2019 10,750,000 24,045,404 (8,092,315) $ 26,703,089 8,277,958 1,068,124 4,806,556 9,613,112 801,093 2,136,247 2020 -2024 12,905,000 21,102,168 (7,405,227) $ 26,601,941 8,246,602 1,064,078 4,788,349 9,576,699 798,058 2,128,155 2025 -2029 15,675,000 16,833,706 (6,067,796) $ 26,440,910 8,196,682 1,057,636 4,759,364 9,518,728 793,227 2,115,273 2030 -2034 19,265,000 11,158,380 (4,128,483) $ 26,294,897 8,151,418 1,051,796 4,733,081 9,466,163 788,847 2,103,592 2035 -2039 23,775,000 4,064,705 (1,697,914) $ 26,141,791 8,103,955 1,045,672 4,705,522 9,411,045 784,254 2,091,343 Totals $86,235,000 $ 101,103,582 $(34,337,200) $ 153,001,382 $47,430,428 $6,120,057 $27,540,248 $55,080,498 $4,590,041 $12,240,109 Note: Interest is to be paid from bond proceeds during the construction period (2010 -2011) The City of Tukwila reports its share of equity interest in the Governmental Activities column within the Government -wide financial statements under non - current assets. The following is condensed (unaudited) financial information as of December 31, 2009 related to SCORE: Item Federal Auburn Burien Way Renton SeaTac Tukwila Total Equity January 1, 2009 $ - $ - $ - $ - $ - $ - $ Current Year Increase /(Decrease) 1,692,471 218,383 982,725 1,965,450 163,787 436,767 5,459,583 Equity December3l, 2009 $1,692,471 $218,383 $982,725 $1,965,450 $163,787 $436,767 $5,459,583 Percent of Equity 31.00% 4.00% 18.00% 36.00% 3.00% 8.00% 100.00% Completed financial statements for SCORE and SCORE PDA can be obtained from the SCORE office, City of Renton, 1055 South Grady Way, Renton, WA 98057. NOTE 8 - PENSION PLANS The City implemented GASB Statements 25 and 27 for reporting of pension plans in 1996. For all plans the pension liability (asset) was determined in accordance with GASB Statement 27 to be zero both before and at the effective date of the transition. Washington State Department of Retirement Systems Substantially all of the City's full -time and qualifying part -time employees participate in one of the following statewide cost - sharing, multiple - employer, defined benefit public employee retirement plans administered by the State Department of Retirement Systems (DRS). Historical trend and other information regarding each plan are presented in the State Department of Retirement Systems 2009 Comprehensive Annual Financial Report. A copy of this report may be downloaded from the DRS website at www.drs.wa.gov/ administration /annual - report /cafr/ or obtained by writing to: Department of Retirement Systems Communications Unit PO Box 48380 Olympia, WA 98504 -8380 The following disclosures are made pursuant to GASB Statement No. 27, Accounting for Pensions by State and Local Government Employers, and GASB Statement No. 50, Pension Disclosures -an amendment of GASB Statements No. 25 and No. 27. 69 CITY OF TUKWILA: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS Public Employees Retirement System (PERS) Plans 1, 2, and 3 Plan Description. PERS is a cost - sharing multiple - employer retirement system comprised of three separate plans for membership purposes: Plans 1 and 2 are defined benefit plans and Plan 3 is a defined benefit plan with a defined contribution component. Membership in the system includes: elected officials; state employees; employees of the Supreme, Appeals, and Superior courts (other than judges currently in a judicial retirement system); employees of legislative committees; community and technical colleges, college and university employees not participating in national higher education retirement programs; judges of district and municipal courts; and employees of local governments. PERS participants who joined the system by September 30, 1977 are Plan 1 members. Those who joined on or after October 1, 1977 and by either, February 28, 2002 for state and higher education employees, or August 31, 28 2002 for local government employees, are Plan 2 members unless they exercise an option to transfer their membership to Plan 3. PERS participants joining the system on or after March 1, 2002 for state and higher education employees, or September 1, 2002 for local government employees have the irrevocable option of choosing membership in either PERS Plan 2 or PERS Plan 3. The option must be exercised within 90 days of employment. An employee is reported in Plan 2 until a choice is made. Employees who fail to choose within 90 days default to PERS Plan 3. Notwithstanding, PERS Plan 2 and Plan 3 members may opt out of plan membership if terminally ill, with less than five years to live. PERS Plan 1 and Plan 2 defined benefit retirement benefits are financed from a combination of investment earnings and employer and employee contributions. PERS retirement benefit provisions are established in state statute and may be amended only by the State Legislature. • PERS Plan 1 members are vested after the completion of five years of eligible service. Plan 1 members are eligible for retirement after 30 years of service, or at the age of 60 with five years of service, or at the age of 55 with 25 years of service. The annual benefit is two percent of the average final compensation (AFC) per year of service, capped at 60 percent. (The AFC is based on the greatest compensation during any 24 eligible consecutive compensation months.) This annual benefit is subject to a minimum for PERS Plan 1 retirees who have 25 years of service and have been retired 20 years, or who have 20 years of service and have been retired 25 years. Plan 1 members who retire from inactive status prior to the age of 65 may receive actuarially reduced benefits. If a survivor option is chosen, the benefit is further reduced. A cost -of living allowance (COLA) is granted at age 66 based upon years of service times the COLA amount, which is increased three percent annually. Plan 1 members may also elect to receive an optional COLA that provides an automatic annual adjustment based on the Consumer Price Index. The adjustment is capped at three percent annually. To offset the cost of this annual adjustment, the benefit is reduced. • PERS Plan 2 members are vested after the completion of five years of eligible service. Plan 2 members may retire at the age of 65 with five years of service with an allowance of two percent of the AFC per year of service. (The AFC is based on the greatest compensation during any eligible consecutive 60 -month period.) Plan 2 members who retire prior to the age of 65 receive reduced benefits. If retirement is at age 55 or older with at least 30 years of service, a three percent per year reduction applies; otherwise an actuarial reduction will apply. The benefit is also actuarially reduced to reflect the choice of a survivor option. There is no cap on years of service credit; and a cost -of- living allowance is granted (based on the Consumer Price Index), capped at three percent annually. • PERS Plan 3 has a dual benefit structure. Employer contributions finance a defined benefit component, and member contributions finance a defined contribution component. The defined benefit portion provides a benefit calculated at one percent of the AFC per year of service. (The 70 CITY OF TUKWILA: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS AFC is based on the greatest compensation during any eligible consecutive 60 -month period.) Effective June 7, 2006, PERS Plan 3 members are vested in the defined benefit portion of their plan after ten years of service; or after five years of service, if twelve months of that service are earned after age 44; or after five service credit years earned in PERS Plan 2 prior to June 1, 2003. Plan 3 members are immediately vested in the defined contribution portion of their plan. Vested Plan 3 members are eligible to retire with full benefits at age 65, or they may retire at age 55 with ten years of service. PERS Plan 3 members who retire prior to the age of 65 receive reduced benefits. If retirement is at age 55 or older with at least 30 years of service, a three percent per year reduction applies; otherwise an actuarial reduction will apply. The benefit is also actuarially reduced to reflect the choice of a survivor option. There is no cap on years of service credit, and Plan 3 provides the same cost -of- living allowance as Plan 2. The defined contribution portion can be distributed in accordance with an option selected by the member, either as a lump sum or pursuant to other options authorized by the Employee Retirement Benefits Board. There are 1,192 participating employers in PERS. Membership in PERS consisted of the following as of the latest actuarial valuation date for the plans of June 30, 2008: Retirees and Beneficiaries Receiving Benefits 73,122 Terminated Plan Members Entitled to but not yet Receiving Benefits 27,267 Active Plan Members Vested 105,212 Active Plan Members Non - vested 56,456 Total 262,057 Funding Policy. Each biennium, the state Pension Funding Council adopts Plan 1 employer contribution rates, Plan 2 employer and employee contribution rates, and Plan 3 employer contribution rates. Employee contribution rates for Plan 1 are established by statute at six percent for state agencies and local government unit employees, and at 7.5 percent for state government elected officials. The employer and employee contribution rates for Plan 2 and the employer contribution rate for Plan 3 are developed by the Office of the State Actuary to fully fund Plan 2 and the defined benefit portion of Plan 3. All employers are required to contribute at the level established by the Legislature. Under PERS Plan 3, employer contributions finance the defined benefit portion of the plan, and member contributions finance the defined contribution portion. The Employee Retirement Benefits Board sets Plan 3 employee contribution rates. Six rate options are available ranging from 5 to 15 percent; two of the options are graduated rates dependent on the employee's age. The methods used to determine the contribution requirements are established under state statute in accordance with chapters 41.40 and 41.45 RCW. The required contribution rates expressed as a percentage of covered payroll as of December 31, 2009 follow: PERS Plan I PERS Plan II PERS Plan III Employer* 5.31% 5.31% 5.31%** Employee 6.00% 3.90% minimum 5.0% to maximum 15.0% * The employer rates include the employer administrative expense fee currently set at 0.16 %. ** Plan 3 defined benefit portion only. Both the City and the employees made the required contributions. The City's contributions to PERS for the years ending December 31 were as follows: PERS Plan I PERS Plan II PERS Plan III 2009 $ 4,080 $ 800,885 $ 136,877 2008 4,048 789,623 135,429 2007 5,134 591,075 106,108 71 CITY OF TUKWILA: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS The increase in annual contributions is primarily due to an increase in the employer contribution rate. Law Enforcement Officers' and Fire Fighters' Retirement System (LEOFF) Plan Description. LEOFF is a cost - sharing multiple - employer retirement system comprised of two separate defined benefit plans. LEOFF participants who joined the system by September 30, 1977 are Plan 1 members. Those who joined on or after October 1, 1977 are Plan 2 members. Membership in the system includes all full -time, fully compensated, local law enforcement officers, firefighters and, as of July 24, 2005, those emergency medical technicians who were given the option and chose LEOFF Plan 2 membership. LEOFF membership is comprised primarily of non -state employees, with Department of Fish and Wildlife enforcement officers, who were first included prospectively effective July 27, 2003, being an exception. Effective July 1, 2003, the LEOFF Plan 2 Retirement Board was established by Initiative 790 to provide governance of LEOFF Plan 2. The Board's duties include adopting contribution rates and recommending policy changes to the Legislature for the LEOFF Plan 2 retirement plan. LEOFF defined benefit retirement benefits are financed from a combination of investment earnings, employer and employee contributions, and a special funding situation in which the state pays through state legislative appropriations. LEOFF retirement benefit provisions are established in state statute and may be amended by the State Legislature. LEOFF Plan 1 members are vested after the completion of five years of eligible service. Plan 1 members are eligible for retirement with five years of service at the age of 50. The benefit per year of service calculated as a percent of final average salary (FAS) is as follows: Term of Service 20 or more years 10 but less than 20 years 5 but less than 10 years Percent of Final Average 2.0% 1.5% 1.0% 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. A cost -of- living allowance is granted (based on the Consumer Price Index). LEOFF Plan 2 members are vested after the completion of five years of eligible service. Plan 2 members may retire at the age of 50 with 20 years of service, or at the age of 53 with five years of service, with an allowance of two percent of the FAS per year of service. The FAS is based on the highest consecutive 60 months. Plan 2 members who retire prior to the age of 53 receive reduced benefits. Benefits are actuarially reduced for each year that the benefit commences prior to age 53 and to reflect the choice of a survivor option. If the member has at least 20 years of service and is age 50, the reduction is three percent for each year prior to age 53. There is no cap on years of service credit; and a cost -of- living allowance is granted (based on the Consumer Price Index), capped at three percent annually. There are 375 participating employers in LEOFF. Membership in LEOFF consisted of the following as of the latest actuarial valuation date for the plans of June 30, 2008: Retirees and Beneficiaries Receiving Benefits 9,268 Terminated Plan Members Entitled to but not yet Receiving Benefits 650 Active Plan Members Vested 13,120 Active Plan Members Non - vested 3,927 Total 26,965 72 CITY OF TUKWILA: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS Funding Policy. Starting on July 1, 2000, LEOFF Plan 1 employers and employees contribute zero percent as long as the plan remains fully funded. Employer and employee contribution rates are developed by the Office of the State Actuary to fully fund the plan. LEOFF Plan 2 employers and employees are required to pay at the level adopted by the LEOFF Plan 2 Retirement Board. All employers are required to contribute at the level required by state law. The Legislature, by means of a special funding arrangement, appropriated money from the state General Fund to supplement the current service liability and fund the prior service costs of LEOFF Plan 2 in accordance with the requirements of the Pension Funding Council and the LEOFF Plan 2 Retirement Board. However, this special funding situation is not mandated by the state constitution and this funding requirement could be returned to the employers by a change of statute. The required contribution rates to the LEOFF system expressed as a percentage of covered payroll as of December 31, 2009 follow: LEOFF Plan I LEOFF Plan II Employer 0.16% 5.24% Employee 0.00% 8.46% Both the City and the employees made the required contributions. The City's contributions to the LEOFF system for the years ended December 31 were as follows: LEOFF Plan I LEOFF Plan II 2009 $ 643 $ 630,453 2008 724 615,728 2007 782 548,066 Firemen's Pension System Plan Description. The City is the administrator of the Firemen's Pension Plan which is a closed, single - employer, defined benefit pension plan that was established in conformance with RCW Chapter 41.18. This plan provides retirement and disability benefits, annual cost -of- living adjustments, and death benefits to plan members and beneficiaries. Membership is limited to fire fighters employed prior to March 1, 1970 when the LEOFF retirement system was established. The City's obligation under the Firemen's Pension Plan consists of paying all benefits, including payments to beneficiaries, for fire fighters who retired prior to March 1, 1970 and excess benefits over LEOFF for covered fire fighters who retired after March 1, 1970. Benefits and refunds of the defined benefit pension plan are recognized when due and payable in accordance with the Plan. The Plan does not issue a separate financial report. Funding Policy. Under State law, the Firemen's Pension Plan is provided an allocation of all monies 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. An actuarial valuation was completed as of December 31, 2009 and it was determined that current assets of the fund, along with future revenues from state fire insurance taxes and interest earnings, will be sufficient to pay all future Firemen's Pension Plan pension benefits. In 2009 $48,537 was received from the state from taxes on fire insurance premiums. On- behalf payments of fringe benefits and salaries for the City's employees were recognized as revenues and expenditures /expenses during the period. Costs to administer the plan are paid for through investment earnings and General Fund resources. The system does not issue a stand -alone financial report and is not included in another Public Employee Retirement System or another entity. Biennially a complete actuarial valuation financial report, including an accounting update for intervening years, is prepared by Milliman USA, Incorporated. This report is available from the City of Tukwila. 73 CITY OF TUKWILA: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS Basis of Accounting. The financial statements are prepared using the accrual basis of accounting. Benefits are recognized when due and payable in accordance with the plan. Membership of the Firemen's Pension Plan consisted of the following at December 31, 2009. Retirees and beneficiaries receiving benefits Retirees currently receiving full retirement benefits through the Law Enforcement Officers and Fire Fighters Retirement Plan (LEOFF) Total ANNUAL PENSION COST AND NET PENSION OBLIGATION 2007 2008 1. Annual normal cost (BOY) 2. Amortization of UAAL (BOY) 3. Interest to EOY 4. ARC at EOY 5. Interest on NPO 6. Adjustment to ARC 7. Annual Pension cost 8. Employer contributions *" 9. Change in NPO 10. 11. NPO at BOY NPO at EOY (7- 8) (11 prior yr) (9 + 10) (1,903) (95) (1,998) (8,008) (11,588) 1,582 41,980 (40,398) (160,165) $ (200,563) (1,903) (95) (1,998) (10,028) (14,898) 2,872 50,730 (47,858) (200,563) $ (248,421) 11 12 2009 11,185 391 11,576 (8,695) (16,888) 19,769 30,112 (10,343) (248,421) $ (258,764) * (i) is the assumed interest rate that year: 5% in 2007, 5% in 2008, 3.5% in 2009 ** Employer contributions for pensions are total contributions to the Fund net of disbursements from the Fund for medical expenses under RCW 41.26.150 and administrative expenses. The Annual Required Contribution (ARC) was computed using the Entry Age Normal Cost Method. Under this method, the projected benefits are allocated on a level basis as a percentage of salary over the earnings of each individual between entry age and exit age. The amount allocated to each year is called the Normal Cost and the portion of the Actuarial Present Value of all benefits not provided for by future Normal Cost payments is called the Actuarial Accrued Liability. Since all members have already retired, the amount of the Normal Cost is zero. The Unfunded Actuarial Accrued Liability (UAAL) is the Actuarial Accrued Liability minus the actuarial value of the Fund's assets. 74 CITY OF TUKWILA: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS ANNUAL DEVELOPMENT OF PENSION COST Fiscal Year Ended Annual Retirement Cost Interest on Net Pension Obligation Annual Pension Cost Total Employer Contri- butions Change in Net Pension Obligation Net Pension Obligation (Gain) / Balance Loss Amortization - -- (Gain) Factor / Loss Ending Balance 2007 $ (1,998) $ (8,008) $ 1,582 $41,980 $(40,398) $(200,563) $(43,978) 13.8212 $(11,588) $(200,563) 2008 $ (1,998) $ (10,028) $ 2,872 $ 50,730 $ (47,858) $ (248,421) $ (52,728) 13.4622 $ (14,898) $ (248,421) 2009 $ 11,576 $ (8,695) $ 19,769 $ 30,112 $ (10,343) $ (258,764) $ (18,536) 14.7098 $ (16,888) $ (258,764) PERCENTAGE OF ANNUAL PENSION COST CONTRIBUTED Annual Pension Fiscal Year Ending Cost (APC) Contribution as a * Percentage of APC Net Pension Obligation (Asset) December 31, 2007 December 31, 2008 December 31, 2009 $ (1,582) $ 2,872 $ 19,769 N/A 1,766 % 152 * In years with a negative APC, this percentage is not applicable. $ (200,563) $ (248,421) $ (258,764) The information presented in the preceding required schedules were determined as part of the actuarial valuations at the dates indicated. The key actuarial assumptions used for the January 1, 2009 valuation were: Actuarial valuation date January 1, 2009 Actuarial cost method Entry Age Normal Remaining amortization period Closed, 30 year as of January 1 ,2009 Asset valuation method Fair market value Assumptions: Investment rate of return 3.50% Projected salary increases 4.00% Price inflation 2.50% Growth in fire insurance premiums Based upon salary increase assumption for FPF benefits, inflation assumption for LEOFF benefits. The Schedule of Funding progress, presented as required supplementary information following the notes of the financial statements, presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits. The Schedule of Employer Contributions is also included as required supplementary information following the notes to the financial statements. NOTE 9 — OTHER POSTEMPLOYMENT BENEFIT (OPEB) PLAN Plan Description The City is the administrator of the Retiree Medical and Long -Term Care Benefits for LEOFF 1 Employees Plan which is a closed, single - employer, defined benefit, other post employment benefit plan 75 CITY OF TUKWILA: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS (OPEB). The benefits are authorized under state statute, RCW Chapters 41.16 and 41.18 and 41.26 and may be amended by the state legislature. This plan provides medical, dental and long -term care benefits to eligible retirees. Membership is limited to eligible law enforcement officers and fire fighters hired prior to the March 1, 1970 establishment of LEOFF, as well as eligible members of LEOFF hired prior to October 1, 1977. Financial reporting for the LEOFF retiree healthcare plan is included in the City's Comprehensive Annual Financial Report. Triennially, a complete actuarial valuation financial report is prepared by Milliman USA, Incorporated. This report is available from the City. Membership As of December 31, 2009, there were 5 active employees and 38 retirees meeting the eligibility requirements of a LEOFF 1 member. This is considered a closed group with no new members. Funding Policy Funding for LEOFF 1 retiree healthcare costs is provided entirely by the City as required by RCW. The City's funding policy is based upon pay -as- you -go financing requirements. The employee or retiree is not required to contribute to the cost of the plan. The annual contribution represents the cost of employer - paid benefits. Annual OPEB Cost and Net OPEB Obligation The City's annual other postemployment benefit (OPEB) cost is calculated based on the annual required contribution (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize unfunded actuarial liabilities over a period 21 years as of January 1, 2008. The following tables show the components of the City's annual OPEB cost for the year, the amount actually contributed to the plan, and changes in the City's net OPEB obligation. ANNUAL OPEB COST AND NET OPEB OBLIGATION 2008 2009 1. Annual normal cost (BOY) $ 105,058 $ 105,058 2. Amortization of UAAL (BOY) 1,196,165 1,196,165 3. Interest to EOY (1 + 2 x i *) 65,061 65,061 4. ARC at EOY (1 + 2 + 3) 1,366,284 1,366,284 5. Interest on Net OPEB Obligation - 40,459 6. Adjustment to ARC - 61,839 7. Annual OPEB cost (4 + 5 - 6) 1,366,284 1,344,904 8. Employer contributions 557,103 335,265 9. Change in Net OPEB Obligation (7- 8) 809,181 1,009,639 10. Net OPEB Obligation at BOY (11 prior yr) - 809,181 11. Net OPEB Obligation at EOY (9 + 10) $ 809,181 $ 1,818,820 * (i) is the assumed interest rate that year: 5% in 2008, 5% in 2009 The net OPEB obligation of $1,818,820 is included as a non - current liability on the Statement of Net Assets. 76 CITY OF TUKWILA: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS ANNUAL DEVELOPMENT OF OPEB COST Fiscal Year Ended Annual OPEB Cost Interest on Net OPEB Obligation Annual OPEB Cost Total Employer Contri- butions Change in Net OPEB Obligation Net OPEB Obligation Balance (Gain) / Loss - -- Amortization - -- (Gain) Factor /Loss Ending Balance 2008 $ 1,366,284 $ - $ - $557,103 $ 809,181 $ 809,181 $ 809,181 13.4622 2009 $ 1,344,904 $ 40,459 $(61,839) $335,265 $1,009,639 $ 1,818,820 $1,031,019 13.0853 $ - $ 809,181 $ 61,839 $1,818,820 The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for 2009 was as follows: PERCENTAGE OF ANNUAL OPEB COST CONTRIBUTED Fiscal Year Ending Annual OPEB Cost Employer Contribution Percentage of Annual OPEB Cost Net OPEB Contributed Obligation December 31, 2008 December 31, 2009 $ 1,366,284 $ 1,344,904 Funded Status and Funding Progress $ 557,103 41.0 % $ 335,265 25.0 % $ 809,181 $ 1,818,820 As of January 1, 2008, the most recent actuarial valuation date, the plan was 0% funded. The actuarial accrued liability for benefits was $16.1 million, and the actuarial value of assets was $0, resulting in an unfunded actuarial accrued liability (UAAL) of $16.1 million. 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. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. Actuarial Methods and Assumptions Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short -term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long -term perspective of the calculations. Significant methods and assumptions were as follows: Actuarial valuation date January 1, 2008 Actuarial cost method Entry Age Normal Amortization Method Closed, 21 year as of January 1, 2008 Asset valuation method Fair market value Assumptions: Investment rate of return 5.00% Medical inflation Year Rate Year Rate 2008 9.50% 2013 7.00% 2009 9.00% 2014 6.50% 2011 8.50% 2015 6.00% 2010 8.00% 2016 5.50% 2012 7.50% 2017+ 5.00% Dental inflation 5.00% Long -term care inflation 5.00% 77 CITY OF TUKWILA: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS The Schedule of Funding Progress, presented as required supplementary information following the notes to the financial statements, presents the results of the valuation of other post employment benefits for the fiscal year ended December 31, 2009. In future years, the schedule of funding progress will provide multi -year trend information that shows whether the actuarial value of plan assets is increasing or decreasing over time relative to the actual. NOTE 10 — LONG -TERM DEBT The City of Tukwila's long -term debt consists of Governmental Activities Long -Term Debt and Business - Type Activities Long -Term Debt. The City is in compliance with all Washington State debt limitation statutes and bond indenture agreements. The City's long -term debt is accounted for in two areas: 1. Governmental Activities Long -Term Debt - Debt in this classification is paid from property and sales tax revenues and is a general obligation of the City. The City has an Al and an Aaa bond rating from Moody's Investor Service for its 1999, 2000, 2003 General Obligation Bonds, and 2003 and 2008 General Obligation Refunding Bonds, respectively. The 2009 South Correctional Entity Facility (SCORE) Public Development Authority Bonds Series 2009A and Series 2009B with an Al rating from Moody's Investor Service, were issued in the amount of $90.6 million to finance the construction of a jail and approximately $5.8 million in capitalized interest. Internal service funds predominantly serve the governmental funds. Accordingly, long -term liabilities for them are included as part of the totals for governmental activities. 2. Business -Type Activities Long -Term Debt - Operating revenues of the individual proprietary fund are used to satisfy this debt. The City's bond rating from Moody's Investors Service is Aaa for the 1995 Revenue Bonds. The City has an Al and Aaa bond rating from Moody's Investor Service for its 2003 General Obligation Bonds and an A2 and Aaa rating on the 2006 Water /Sewer Revenue Bonds. Bond ratings to be updated. Public Works Trust Fund loans are low interest rate loans available from the Washington State Department of Community Development for qualifying projects. The schedules that follow summarize the long -term debt transactions of the City for the year ended December 31, 2009. CHANGES IN LONG -TERM DEBT SUMMARY REVENUE PUBLIC WORKS DUE TO GENERAL BONDS TRUST FUND CAPITAL COMPENSATED OTHER OBLIGATION UTILITIES LOANS LEASES ABSENCES GOVERNMENTS TOTAL Outstanding 01/01/2009 $ 19,085,000 $ 5,165,000 $ 9,021,951 $ 11,666 $ 2,734,217 $ 1,428,000 $ 37,445,834 Added - - - 2,642,519 6,898,800 9,541,319 Retired (1,360,000) (375,000) (616,554) (11,666) (2,561,262) (175,000) (5,099,482) Outstanding 12/31/2009 $ 17,725,000 $ 4,790,000 $ 8,405,397 $ - $ 2,815,474 $ 8,151,800 41,887,671 Add: Premium net of deferred charges Total Long -Term Liabilities 78 80 486 $ 41,968,157 CITY OF TUKWILA: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS Debt Service to Maturity Following is a schedule showing the debt service requirements to maturity for the City's long -term debt, excluding compensated absences. DEBT SERVICE REQUIREMENT TO MATURITY -- Government Activities Year Ended December 31 Government Activities General Obligation Bonds Due to Other Governments Public Works Trust Fund Loans Principal Interest Principal Interest TOTAL 2010 $ 1,235,028 $ 656,621 $ 184,000 $ 317,197 $ 2,392,846 2011 1,282,774 606,407 193,000 336,131 2,418,313 2012 1,328,707 437,876 202,000 326,481 2,295,064 2013 1,311,453 507,736 373,200 314,083 2,506,471 2014 1,442,386 450,640 377,000 299,032 2,569,058 2015 - 2019 5,610,480 1,413,000 1,093,000 1,289,645 9,406,124 2020 - 2024 2,090,376 305,141 1,032,400 1,095,755 4,523,672 2025 - 2029 - 1,254,000 861,273 2,115,273 2030 - 2034 - - 1,541,200 562,392 2,103,592 2035 - 2039 - 1,902,000 189,343 2,091,343 Totals $ 14,301,203 $4,377,421 $8,151,800 $5,591,333 $32,421,757 DEBT SERVICE REQUIREMENT TO MATURITY -- Business -Type Activities Year Ended December 31 Business -Type Activities General Obligation Bonds Revenue Bonds Public Works Trust Fund Loans Principal Interest Principal Interest Principal Interest TOTAL 2010 $ 184,972 $ 148,489 $ 395,000 $ 237,598 $ 616,554 $ 42,867 $ 1,625,480 2011 192,226 140,628 415,000 217,543 609,186 39,199 1,613,781 2012 201,293 132,458 440,000 194,444 558,293 35,898 1,562,386 2013 208,547 123,903 465,000 168,044 558,293 33,107 1,556,893 2014 217,614 115,561 495,000 139,953 558,293 30,315 1,556,737 2015 - 2019 1,229,520 437,002 1,160,000 438,597 2,791,465 109,705 6,166,290 2020 - 2024 1,189,624 140,417 970,000 235,575 2,713,313 40,309 5,289,238 2025 - 2029 - - 450,000 20,250 - - 470,250 Totals $ 3,423,797 $ 1,238,459 $ 4,790,000 $ 1,652,002 $ 8,405,397 $331,400 $19,841,056 79 CITY OF TUKWILA: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS CHANGES IN LONG -TERM DEBT ITEM Interest OUTSTANDING OUTSTANDING Due Within Rates Maturity Authorized 12/31/08 ISSUED REDEEMED 12/31/09 One Year GOVERNMENTAL ACTIVITIES: Limited General Obligation (GO) Bonds Payable: 1999 Streets /Facilities 5.15 12/01/09 $ 10,000,000 $ 465,000 $ - $ 465,000 $ - $ - 2004 Refunding Facilities 4.00 -5.00 12/01/14 4,195,000 2,520,000 380,000 2,140,000 395,000 2003 Streets 4.25- 4.6512/01/23 6,277,500 6,277,500 261,297 6,016,203 325,028 2008 Refunding Streets /Facilities4.00 -6.00 12/01/19 6,180,000 6,180,000 - 35,000 6,145,000 515,000 Total Bonds Payable 26,652,500 15,442,500 1,141,297 14,301,203 1,235,028 Unamortized Deferred Credits (Charges): Issuance premiums - 661,510 - 69,685 591,825 Issuance and refunding costs - (643,139) - (64,220) (578,919) Net Bonds Payable Compensated Absences: Total Governmental Funds 26,652, 500 15,460 ,871 1,146,761 14,314,110 1,235,028 2,535,136 2,405,808 2,359,408 2,581,536 2,006,935 $ 26,652,500 $ 17,996,007 $ 2,405,808 $ 3,506,169 $ 16,895,646 $ 3,241,963 BUSINESS -TYPE ACTIVITIES: Bonds Payable: 1995 Water /Sewer Revenue 4.15 -6.63 02/01/15 $ 4,500,000 $ 2,195,000 $ 2003 Limited G.O. Golf Course 3.21- 4.6512/01/23 5,772,500 3,642,500 2006 Water/ Sewer /SWM Revenu(4.00- 4.50 12/01/26 3,180,000 2,970,000 Total Bonds Payable 13,452,500 8,807,500 Unamortized Deferred Credits (Charges): Issuance Premiums - 130,199 Issuance Discounts - (37,068) Net Bonds Payable 13,452,500 8,900,631 $ 260,000 $ 1,935,000 $ 275,000 218,703 3,423,797 184,972 115,000 2,855,000 120,000 593,703 8,213,797 579,972 12,996 117,203 - (6,093) (30,975) - 600,606 8,300,025 579,972 Public Works Trust Fund Loans: 1990 Loan - Surface Water 1991 Loan - Surface Water 2003 Loan - Water /Sewer 2003 Loan - Surface Water 2004 Loan - Water /Sewer 2004 Loan - Surface Water 2004 Loan - Surface Water 5.00 07/01/10 1.00 07/01/11 0.50 07/01/21 0.50 07/01/21 0.50 -2.00 07/01/24 0.50 -2.00 07/01/24 1.00 07/01/24 140,000 1,313,000 273,870 219,725 5,016,000 684,000 4,196,056 14,737 152,678 187,906 150,755 4,366,181 595,388 3,554,306 7,369 50,892 14,455 11,596 272,887 37,212 222,144 Total Public Works Trust Fund Loans 11,842,651 9,021,951 616,554 7,368 7,368 101,786 50,893 173,451 14,454 139,159 11,597 4,093,294 272,886 558,176 37,212 3,332,162 222,144 8,405,397 616,554 Capital Lease: 128,605 11,666 - 11,666 Compensated Absences: 199,081 236,711 201,854 233,938 201,854 Total Business -Type Activities $ 25,423,756 $ 18,133,329 $ 236,711 $ 1,430,680 $ 16,939,360 $ 1,398,380 TOTAL ALL FUNDS $ 52,076,256 $ 36,129,336 $ 2,642,519 $ 4,936,849 $ 33,835,006 $ 4,640,343 Due to Other Governments Valley Communication Center Public Development Authority issued General Obligation bonds in 2000 for a new dispatch facility. The City is contracted to pay 20% of the debt service of these 15 -year bonds that mature in 2015. This debt is paid from the General fund. These bonds were refunded in April 2010. See Note 16, Subsequent Events, for more information. SCORE Public Development Authority issued General Obligation bonds in 2009 to acquire, construct, improve, and equip a consolidated correctional facility to be located in Des Moines, Washington. The City is contracted to pay 8% of the debt service of these 30 year bonds that mature in 2039. This debt is to be paid from the General fund. 80 Margin Available $ 46,317,842 $ 96,057,683 $ 220,407,286 $ 344,756,890 CITY OF TUKWILA: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS CHANGES IN LONG -TERM DEBT DUE OTHER GOVERNMENTS ITEM Interest OUTSTANDING OUTSTANDING Due Within Rates Maturity Authorized 12/31/08 ISSUED REDEEMED 12/31/09 One Year GOVERNMENTAL ACTIVITIES: Limited General Obligation (GO) Bonds Payable: 2000 Facilities 4.30 - 5.7512/01/15 $ 2,551,600 $ 1,428,000 $ - $ 175,000 $ 1,253,000 $ 184,000 2009 Facility 4.00 -5.00 01/01/22 656,400 - 656,400 656,400 2009 Facility, Build America Bond3.00 -6.62 01/01/39 6,242,400 6,242,400 6,242,400 Total General Obligation Bonds Due Other Governments $ 9,450,400 $ 1,428,000 $6,898,800 $ 175,000 $ 8,151,800 $ 184,000 Unamortized Deferred Credits (Charges): Issuance Premiums - - 48,774 668 48,105 Issuance Discounts /Costs - (67,177) (423) (66,755) Net General Obligation Bonds Due Other Governments $ 9,450,400 $ 1,428,000 $6,880,396 $ 175,246 $ 8,133,151 $ 184,000 LONG -TERM DEBT RECONCILIATION Government Enterprise Balance Funds Funds 12 -31 -09 General obligation bonds $ 14,301,203 $ 3,423,797 $17,725,000 Revenue bonds - 4,790,000 4,790,000 Public Works Trust Fund loans 8,405,397 8,405,397 Due to Other Governments 8,151,800 - 8,151,800 Employee leave benefits 2,581,536 233,938 2,815,474 Deferred charges (5,742) 86,228 80,486 Total long -term debt $ 25,028,797 $16,939,360 $41,968,157 Debt Limit Capacities State law provides that debt cannot be incurred in excess of the following percentages of the value of the taxable property of the City: 1.5% without a vote of the people; 2.5% with a vote of the people; 5.0% with a vote of the people, provided the indebtedness in excess of 2.5% is for utilities; 7.5% with a vote of the people, provided the indebtedness in excess of 5.0% is for parks or open space development. At December 31, 2009, the debt limits for the City were as follows: Item Without a Vote 1.5% 2.5% With a Vote of the People 5.0% 7.5% Legal Limit Outstanding Net Indebtedness $ 74, 609, 762 $ 124, 349, 603 $ 248, 699, 206 $ 373, 048, 810 28, 291, 920 28, 291, 920 28, 291, 920 28, 291, 920 81 CITY OF TUKWILA: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS NOTE 11 - RESERVATION OF FUND EQUITY Following is an analysis of fund equity reservation by type for each of the City's fund groups. General Fiduciary Totals Imprest funds $ 17,900 $ - $ 17,900 Employees' Pension Benefit - 1,437,172 1,437,172 Totals 17,900 $1,437,172 $1,455,072 NOTE 12 — CONSTRUCTION COMMITMENTS As of December 31, 2009 the City had $4,675,992 contractual obligations on construction projects. NOTE 13 - LITIGATION There are several lawsuits in which the City is involved. The City Attorney estimates that the potential claims against the City are either covered by insurance or are not material enough to affect the financial statements of the City. See also Note 15. NOTE 14 — RESTRICTED ASSETS The balances of the restricted asset accounts in the enterprise funds are as follows: Customer Deposits -- Water / Sewer Utility $ 3,000 Customer Deposits -- Foster Golf Course 79,053 Revenue Bond Reserve Account 430,444 Total Restricted Assets $ 512,497 NOTE 15 — RISK MANAGEMENT The City of Tukwila is a member of the Washington Cities Insurance Authority (WCIA). Utilizing Chapter 48.62 RCW (self- insurance regulation) and Chapter 39.34 RCW (Interlocal Cooperation Act), nine cities originally formed WCIA on January 1, 1981. WCIA was created for the purpose of providing a pooling mechanism for jointly purchasing insurance, jointly self- insuring, and / or jointly contracting for risk management services. WCIA has a total of 136 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 determines the limits and terms of coverage annually. 82 CITY OF TUKWILA: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS 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 damage are self- funded from the members' deductible to $500,000, 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 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 fully funded by its members, who make annual assessments on a prospectively rated basis, as determined by an outside, independent actuary. The assessment covers loss, loss adjustment, and administrative expenses. As outlined in the interlocal, WCIA retains the right to additionally assess the membership for any funding shortfall. An investment committee, using investment brokers, produces additional revenue by investment of WCIA's assets in financial instruments which comply with all State guidelines. These revenues directly offset portions of the membership's annual assessment. 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. The City insures its buildings, equipment, and vehicle property insurance with WCIA. They self -fund up to $250,000 with standard property insurance purchased above that amount. American States Insurance Company insures boiler machinery, crime and 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. During the year under audit, 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 each respective fund and no reserves are allocated because of the limited liability and historical cost. The City also self- insures for medical, dental and other health care benefits. A third -party administrator, Healthcare Management Administrators, Inc., provides claims administration. The City has a stop -loss policy with Standard Insurance Company, which provides individual limits of $110,000 and a plan limit of $5,861,518 in 2009. Each fund contributes an appropriate amount each year to pay premiums and claims. At the end of each year the employees and employer share equally any residual amounts. Liabilities include an amount for claims that have been incurred but not reported (IBNR's). Claim liabilities are calculated considering the effects of inflation, recent claim settlement trends including frequency and amount of payouts, and other economic and social factors. The basis for estimating the liabilities for unpaid claims includes the effects of specific, incremental claim adjustment expenses, salvage, subrogation, and other allocated adjustment expenses. 83 CITY OF TUKWILA: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS The following table reflects changes in the balances of claims liabilities for 2009 and 2008. ITEM Insurance — Insurance — Insurance Insurance LEOFF I LEOFF 1 2009 2008 2009 2008 Claims Liabilities at Beginning of Year $1,190,640 $ 761,569 $ 111,024 $ 86,098 Claims expenses: Current year and changes in estimates 3,887,428 4,416,452 312,421 395,005 Claims payments and expenses (3,910,317) (3,987,381) (326,044) (370,079) Claims Liabilities at End of Year $1,167,751 $1,190,640 $ 97,401 $ 111,024 NOTE 16 — SUBSEQUENT EVENTS Valley Communications Bond Refunding The Valley Communications (ValleyCom) refunded its series 2000 bonds on March 1, 2010. The City of Tukwila and four other ValleyCom members created the Valley Communications Center Development Authority (Authority) in April of 2000 with the explicit intent to issue bonds for the construction of an emergency dispatch center. Debt service on the bonds is shared equally among the five ValleyCom cities. The portion attributable to the City of Tukwila when the bonds were originally sold was $2,551,600. The City's share of the new bond issue is $1,065,000 which replaces $1,069,000 of debt outstanding from the original issue. The bonds were refunded to capitalize on the relatively low interest rates available in the bond market at the time. When originally sold, the bonds had an average interest rate of 5.30 %. The average interest rate on the bond refunding is 2.77 %. The refunding resulted in a savings, net of bond issuance costs, of $371,314. The City of Tukwila's share of that savings is 20 %, or $74,262. This savings will be realized between now and 2015. 84 CITY OF TUKWILA: 2009 CAFR REQUIRED SUPPLEMENTAL INFORMATION REQUIRED SUPPLEMENTAL INFORMATION 85 CITY OF TUKWILA: 2009 CAFR REQUIRED SUPPLEMENTAL INFORMATION FIREMEN'S PENSION TRUST FUND SCHEDULE OF FUNDING PROGRESS (rounded to thousands) Actuarial Valuation Date Actuarial Value of Assets Actuarial Accrued Liabilities Unfunded Actuarial Accrued Funded Liabilities (UAAL) Ratio Covered Payroll UAAL as a Percentage of Covered Payroll January 1, 1998 January 1, 2000 January 1, 2003 January 1, 2005 January 1, 2007 January 1, 2009 $ 981 $ 1,076 $ 1,215 $ 1265 $ 1,336 $ 1,445 $ 1,042 $ 1,243 $ 1,135 $ 1,182 $ 1,310 $ 1,610 $61 $ 167 $ (80) $ (83) $ (26) $ 165 94 % 87 % 107 % 107 % 102 % 90 % SCHEDULE OF EMPLOYER CONTRIBUTIONS 60% 149 % N/A N/A N/A N/A Fiscal Year Ending Employer Contributions Fire Insurance Total Employer Premiums Contributions Annual Required Contribution (ARC) Percentage of ARC Contributed December 31, 2004 December 31, 2005 December 31, 2006 December 31, 2007 December 31, 2008 December 31, 2009 $ (500) $ (11,250) $ (2,114) $ (8,575) $ (1,841) $ (18,425) $ 40,812 $ 40,983 $ 45,951 $ 50,555 $ 52,571 $ 48,537 $ 40,312 $ 29,733 $ 43,837 $ 41,980 $ 50,730 $ 30,112 $ (6,789) $ (6,547) $ (6,547) $ (1,998) $ (1,998) $ 11,576 RETIREE MEDICAL AND LONG -TERM CARE BENEFITS FOR LEOFF 1 EMPLOYEES SCHEDULE OF FUNDING PROGRESS (rounded to thousands) N/A N/A N/A N/A N/A 260 % Valuation Date Actuarial Value of Assets Actuarial Accrued Liabilities Unfunded Actuarial Accrued Liabilities (UAAL) Funded Covered Ratio Payroll UAAL As a Percentage of Covered Payroll January 1, 2008 $ 16,103 $ 16,103 0.0 % N/A SCHEDULE OF EMPLOYER CONTRIBUTIONS Fiscal Year Ending Employer Contributions Annual Required Contribution (ARC) Percentage of ARC Contributed December 31, 2008 December 31, 2009 $ 557,103 $ 335,265 $ 1,366,284 $ 1,366,284 41 % 25 % The information presented in the preceding required schedules was determined as part of the actuarial valuations at the dates indicated. 86 N/A CITY OF TUKWILA: 2009 CAFR REQUIRED SUPPLEMENTAL INFORMATION NOTES TO REQUIRED SUPPLEMENTARY INFORMATION FIREMEN'S PENSION TRUST FUND Actuarial valuation date January 1, 2009 Actuarial cost method Entry Age Normal Remaining amortization period Closed, 30 year as of January 1 ,2009 Asset valuation method Fair market value Assumptions: Investment rate of return 3.50% Projected salary increases 4.00% Price inflation 2.50% Growth in fire insurance premiums Based upon salary increase assumption for FPF benefits, inflation assumption for LEOFF benefits. * Under the Firemen's Pension Trust Fund, 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 RETIREE MEDICAL AND LONG -TERM CARE BENEFITS FOR LEOFF 1 EMPLOYEES Actuarial valuation date January 1, 2008 Actuarial cost method Entry Age Normal Amortization Method Closed, 21 year as of January 1, 2008 Asset valuation method Fair market value Assumptions: Investment rate of return 5.00% Medical inflation Year Rate Year Rate 2008 9.50% 2013 7.00% 2009 9.00% 2014 6.50% 2011 8.50% 2015 6.00% 2010 8.00% 2016 5.50% 2012 7.50% 2017+ 5.00% Dental inflation 5.00% Long -term care inflation 5.00% 87 CITY OF TUKWILA: 2009 CAFR REQUIRED SUPPLEMENTAL INFORMATION 88 CITY OF TUKWILA: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES NON -MAJOR GOVERNMENTAL FUNDS The City has three types of non -major governmental funds: Special Revenue Funds Special Revenue Funds are established to account for proceeds of specific taxes or other specific revenue sources that are legally restricted to expenditures for particular purposes. This revenue is segregated into individual Special Revenue Funds to classify expenditures for specified purposes. Debt Service Funds Debt Service Funds are used to account for payment of principal and interest on general obligation long -term debt. The City maintains Debt Service Funds to provide debt service payments on General Obligation Bonds both voted and councilmanic. Capital Projects Funds Capital Projects Funds account for the acquisition or development of major capital facilities, except those projects financed by proprietary funds. Sources of revenue to these funds include general obligation bond proceeds, federal and state grants, general property taxes, real estate excise taxes, sales taxes, interest earnings, and transfers from other funds. 89 CITY OF TUKWILA: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON COMBINING BALANCE SHEET NON -MAJOR GOVERNMENT FUNDS DECEMBER 31, 2009 TOTAL TOTAL TOTAL TOTAL NONMAJOR NONMAJOR NONMAJOR NONMAJOR SPECIAL REVENUE DEBT SERVICE CAPITAL PROJECTS GOVERNMENTAL FUNDS FUNDS FUNDS FUNDS ASSETS: CASH AND CASH EQUIVALENTS $ 2,910,368 $ (239,393) $ 2,347,374 $ 5,018,349 INVESTMENTS 576,463 71,344 647,807 RECEIVABLES: TAXES 374,831 42,725 417,556 DUE FROM OTHER GOVERNMENTAL UNITS 22,909 - 6,206 29,115 TOTAL ASSETS $ 3,509,740 $ 135,438 $ 2,467,649 $ 6,112,827 LIABILITIES AND FUND BALANCES: CURRENT LIABILITIES: ACCRUED WAGES AND BENEFITS $ 13,150 $ $ 2,853 $ 16,003 ACCOUNTS PAYABLE 33,227 33,227 RETAINAGEPAYABLE 29,383 29,383 OTHER CURRENT LIABILITIES 2,500 2,500 DEFFERED REVENUE 160,737 - 160,737 TOTAL LIABILITIES 207,114 34,736 241,850 FUND BALANCES: UNRESERVED 3,302,626 135,438 2,432,913 TOTAL FUND BALANCES 3,302,626 135,438 2,432,913 5,870,977 5,870,977 TOTAL LIABILITIES AND FUND BALANCES $ 3,509,740 $ 135,438 $ 2,467,649 $ 6,112,827 90 CITY OF TUKWILA: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NON -MAJOR GOVERNMENT FUNDS FOR THE YEAR ENDED DECEMBER 31, 2009 TOTAL TOTAL TOTAL TOTAL NONMAJOR NONMAJOR NONMAJOR NONMAJOR SPECIAL REVENUE DEBT SERVICE CAPITAL PROJECTS GOVERNMENTAL FUNDS FUNDS FUNDS FUNDS REVENUES: TAXES $ 489,805 $ 1,593,242 $ 219,191 $ 2,302,238 INTERGOVERNMENTAL 1,190,174 355,287 1,545,461 CHARGES FOR SERVICES - - 13,342 13,342 FINES AND FORFEITURES 71,488 - 71,488 INVESTMENT EARNINGS 21,944 10,932 20,739 53,615 MISCELLANEOUS 10,310 33,933 44,243 TOTAL REVENUES 1,783,721 1,604,174 642,492 4,030,387 EXPENDITURES: CURRENT: PHYSICAL ENVIRONMENT - - 177,488 177,488 ECONOMIC ENVIRONMENT 1,206,707 - 1,206,707 PUBLIC SAFETY 123,120 - - 123,120 DEBT SERVICE PRINCIPAL 1,316,297 1,316,297 INTEREST - 778,018 - 778,018 CAPITAL OUTLAY PUBLIC SAFETY 168,060 - 168,060 PHYSICAL ENVIRONMENT - - 982,143 982,143 ECONOMIC ENVIRONMENT 3,594 3,594 TOTAL EXPENDITURES 1,501,481 2,094,315 1,159,631 4,755,427 EXCESS (DEFICIENCY) OF REVENUES OVER(UNDER) EXPENDITURES 282,240 (490,141) (517,139) (725,040) OTHER FINANCING SOURCES (USES): TRANSFERS IN (Note 5) TRANSFERS OUT (Note 5) GENERAL OBLIGATION BONDS ISSUED PAYMENT TO FISCAL AGENT TOTAL OTHER FINANCING SOURCES AND USES NET CHANGE IN FUND BALANCES FUND BALANCES - BEGINNING FUND BALANCES - ENDING 483,444 96,000 130,000 709,444 - (786,500) (65,000) (851,500) 6,947,574 6,947,574 (6,880,397) (6,880,397) 483,444 (623,323) 65,000 (74,879) 765,684 (1,113,464) (452,139) (799,919) 2,536,942 1,248,902 2,885,052 6,670,896 $ 3,302,626 $ 135,438 $ 2,432,913 $ 5,870,977 91 CITY OF TUKWILA: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES 92 CITY OF TUKWILA: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES NON -MAJOR GOVERNMENTAL FUNDS Special Revenue Funds Special Revenue Funds are established to account for proceeds of specific taxes or other specific revenue sources that are legally restricted to expenditures for particular purposes. This revenue is segregated into individual Special Revenue Funds to classify expenditures for specified purposes. Hotel /Motel Tax Fund Established to account for the proceeds of a special excise tax on the sale of or charge made for the furnishing of lodging that is subject to tax under Chapter 82.08 RCW. The tax applies to lodging by hotel, rooming house, tourist court, motel or trailer camp. Proceeds from this tax may only be used to promote tourism. Street Fund Established in accordance with RCW 35A.37.010 to account for maintenance and improvement of the City's street and traffic control systems. Major sources of support are general tax revenues and the State - levied tax on motor vehicle fuels distributed to Tukwila, to be used for City street purposes. Contingency Fund Provides funding for any municipal expenditure, the necessity or extent of which could not be foreseen or reasonably evaluated at the time of budget adoption. Resources of the fund are general tax revenues. Fire Equipment Cumulative Reserve Fund Provides funding for major fire department equipment purchases. Primary revenue source is a $300,000 annual transfer from the General Fund. Drug Seizure Fund Established to account for the yearly accumulation of drug seizure revenues and related expenditures. 93 CITY OF TUKWILA: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON COMBINING BALANCE SHEET NON -MAJOR SPECIAL REVENUE FUNDS DECEMBER 31, 2009 TOTAL FIRE EQUIPMENT NONMAJOR HOTEL /MOTEL CUMULATIVE DRUG SPECIAL REVENUE TAX STREET CONTINGENCY RESERVE SEIZURE FUNDS ASSETS: CASH AND CASH EQUIVALENTS $ 840,164 $ 442,306 $ 804,519 $ 802,279 $ 21,100 $ 2,910,368 INVESTMENTS 101,309 192,487 80,943 - 201.724 576,463 DUE FROM OTHER GOVERNMENTAL UNITS 22,909 - - - - 22.909 TOTAL ASSETS $ 964,382 $ 634,793 $ 885,462 $ 802,279 $ 222,824 $ 3,509,740 LIABILITIES AND FUND BALANCES: ACCOUNTS PAYABLE $ 31,511 $ - $ - $ - $ 1,716 $ 33,227 ACCRUED WAGES AND BENEFITS PAYABLE 13,150 - 13,150 DEFERRED REVENUE - - 160,737 160,737 TOTAL LIABILITIES 44,661 - 160,737 1,716 207,114 FUND BALANCES: UNRESERVED TOTAL FUND BALANCES 919,721 634,793 885,462 641,542 221,108 3,302,626 919,721 634,793 885,462 641,542 221,108 3,302,626 TOTAL LIABILMES AND FUND BALANCES $ 964,382 $ 634,793 $ 885,462 $ 802,279 $ 222,824 $ 3,509,740 94 CITY OF TUKWILA: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NON -MAJOR SPECIAL REVENUE FUNDS FOR THE YEAR ENDED DECEMBER 31, 2009 HOTEL/MOTEL TAX 11 STREET 1 TOTAL FIRE EQUIFMENT NONMAJOR CUMULATIV E DRUG SPECIAL REVENUE CONTINGENCY RESERVE SEIZURE FUNDS REVENUES: TAXES $ 489,805 $ - $ - $ - $ - $ 489,805 INTERGOVERNMENTAL 755,051 267,063 - 168,060 - 1,190,174 FINES AND FORFEITURES - - - 71,488 71,488 INVESTMENT EARNINGS 5,385 4,621 7,044 3,170 1,724 21,944 MISCELLANEOUS 9,425 - - 885 - 10,310 TOTAL REVENUES 1,259,666 7,044 172,115 73,212 1,783,721 EXPENDITURES: CURRENT: PUBLIC SAFETY 116,369 6,751 123,120 ECONOMIC ENVIRONMENT 1,206,707 - 1,206,707 CAPITAL OUTLAY : PUBLIC SAFETY - - - 168,060 - 168,060 ECONOMIC ENVIRONMENT 3,594 - - - 3,594 TOTAL EXPENDITURES 1,210,301 - - 284,429 6,751 1,501,481 EXCESS (DEFICIENCY) OF REVENUES OVER(UNDER)EXPENDITURES 49,365 271,684 7,044 (112,314) 66,461 282,240 OTHER FINANCING SOURCES (USES): TRANSFERS IN (Note 5) - - - 328,797 154,647 483,444 TOTAL OTHER FINANCING SOURCES AND USES 328,797 154,647 483,444 NET CHANGE IN FUND BALANCES 49,365 271,684 7,044 216,483 221,108 765,684 FUND BALANCES - BEGINNING FUND BALANCES - ENDING 870,356 363,109 878,418 425,059 2,536,942 $ 919,721 $ 634,793 $ 885,462 $ 641,542 $ 221,108 $ 3,302,626 95 CITY OF TUKWILA: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL HOTEL /MOTEL TAX SPECIAL REVENUE FUND FOR THE YEAR ENDED DECEMBER 31, 2009 VARIANCE WITH ORIGINAL FINAL FINAL BUDGET BUDGET BUDGET ACTUAL POSITIVE (GAAP BASIS) (GAAP BASIS) RESULTS (NEGATIVE) REVENUES: TAXES $ 600,000 $ 600,000 $ 489,805 $ (110,195) INTERGOVERNMENTAL 907,000 907,000 755,051 (151,949) INVESTMENT EARNINGS 20,000 20,000 5,385 (14,615) MISCELLANEOUS 5,000 5,000 9,425 4,425 TOTAL REVENUES 1,532,000 1,532,000 1,259,666 (272,334) EXPENDITURES: CURRENT: ECONOMIC ENVIRONMENT 2,355,148 2,355,148 1,206,707 1,148,441 CAPITAL OUTLAY: ECONOMIC ENVIRONMENT 10,000 10,000 3,594 6,406 TOTAL EXPENDITURES 2,365,148 2,365,148 1,210,301 1,154,847 EXCESS (DEFICIENCY) OF REVENUES OVER(UNDER) EXPENDITURES (833,148) (833,148) 49,365 882,513 NET CHANGE IN FUND BALANCES (833,148) (833,148) 49,365 882,513 FUND BALANCES - BEGINNING 1,062,651 1,062,651 870,356 (192,295) FUND BALANCES - ENDING $ 229,503 $ 229,503 $ 919,721 $ 690,219 96 CITY OF TUKWILA: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL STREET SPECIAL REVENUE FUND FOR THE YEAR ENDED DECEMBER 31, 2009 VARIANCE WITH ORIGINAL FINAL FINAL BUDGET BUDGET BUDGET ACTUAL POSITIVE (GAAP BASIS) (GAAP BASIS) RESULTS (NEGATIVE) REVENUES: INTERGOVERNMENTAL $ 300,000 $ 300,000 $ 267,063 $ (32,937) INVESTMENT EARNINGS 10,000 10,000 4,621 (5,379) TOTAL REVENUES 310,000 310,000 271,684 (38,316) EXPENDITURES: CAPITAL OUTLAY: TRANSPORTATION 250,000 250,000 - (250,000) TOTAL EXPENDITURES 250,000 250,000 - 250,000 EXCESS (DEFICIENCY) OF REVENUES OVER(UNDER)EXPENDITURES 60,000 60,000 271,684 211,684 NET CHANGE IN FUND BALANCES FUND BALANCES - BEGINNING FUND BALANCES - ENDING 60,000 60,000 271,684 211,684 240,141 240,141 363,109 122,968 $ 300,141 $ 300,141 $ 634,793 $ 334,652 97 CITY OF TUKWILA: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL CONTINGENCY SPECIAL REVENUE FUND FOR THE YEAR ENDED DECEMBER 31, 2009 VARIANCE WITH ORIGINAL FINAL FINAL BUDGET BUDGET BUDGET ACTUAL POSITIVE (GAAP BASIS) (GAAP BASIS) RESULTS (NEGATIVE) REVENUES: INVESTMENT EARNINGS $ 17,000 $ 17,000 $ 7,044 $ (9,956) TOTAL REVENUES 17,000 17,000 7,044 (9,956) EXCESS (DEFICIENCY) OF REVENUES OVER(UNDER) EXPENDITURES 17,000 17,000 7,044 (9,956) NET CHANGE IN FUND BALANCES 17,000 17,000 7,044 (9,956) FUND BALANCES - BEGINNING 857,187 857,187 878,418 21,231 FUND BALANCES - ENDING $ 874,187 $ 874,187 $ 885,462 $ 11,275 98 CITY OF TUKWILA: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL FIRE EQUIPMENT CUMULATIVE RESERVE SPECIAL REVENUE FUND FOR THE YEAR ENDED DECEMBER 31, 2009 VARIANCE WITH ORIGINAL FINAL FINAL BUDGET BUDGET BUDGET ACTUAL POSITIVE (GAAP BASIS) (GAAP BASIS) RESULTS (NEGATIVE) REVENUES: INVESTMENT EARNINGS $ 9,000 $ 9,000 $ 3,170 $ (5,830) INTERGOVERNMENTAL 168,060 168,060 MISCELLANEOUS 885 885 TOTAL REVENUES 9,000 9,000 172,115 163,115 EXPENDITURES: CURRENT: PUBLIC SAFETY CAPITAL OUTLAY: PUBLIC SAFETY TOTAL EXPENDITURES EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES): TRANSFERS IN (Note 5) TOTAL OTHER FINANCING SOURCES AND USES NET CHANGE IN FUND BALANCES FUND BALANCES - BEGINNING FUND BALANCES - ENDING 2,000 2,000 116,369 (114,369) 328,797 168,060 168,060 330,797 170,060 284,428 (114,369) (321,797) (161,060) (112,314) 48,746 328,797 328,797 328,797 328,797 (321,797) 167,737 216,483 48,746 420,000 420,000 425,059 5,059 $ 98,203 $ 587,737 $ 641,542 $ 53,805 99 CITY OF TUKWILA: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL DRUG SEIZURE SPECIAL REVENUE FUND FOR THE YEAR ENDED DECEMBER 31, 2009 VARIANCE WITH ORIGINAL FINAL FINAL BUDGET BUDGET BUDGET ACTUAL POSITIVE (GAAP BASIS) (GAAP BASIS) RESULTS (NEGATIVE) REVENUES: INVESTMENT EARNINGS FINES AND FORFEITURES TOTAL REVENUES $ - $ - $ 1,724 $ 1,724 - 200,000 71,488 (128,512) - 200,000 73,212 (126,788) EXPENDITURES: CURRENT: PUBLIC SAFETY - 2,000 6,751 (4,751) CAPITAL OUTLAY: PUBLIC SAFETY - 105,000 105,000 TOTAL EXPENDITURES - 107,000 6,751 100,249 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES - 93,000 66,461 (26,539) OTHER FINANCING SOURCES (USES): TRANSFERS IN (Note 5) - 154,647 154,647 - TOTAL OTHER FINANCING SOURCES AND USES - 154,647 154,647 - NET CHANGE IN FUND BALANCES - 247,647 221,108 (26,539) FUND BALANCES - BEGINNING - 184,647 (184,647) FUND BALANCES - ENDING $ $ 432,294 $ 221,108 $ (211,186) 100 CITY OF TUKWILA: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES NON -MAJOR GOVERNMENTAL FUNDS Debt Service Funds Debt Service Funds are used to account for payment of principal and interest on general obligation long -term debt. The City maintains Debt Service Funds to provide debt service payments on General Obligation Bonds both voted and councilmanic. Limited Tax G.O. 1999 This fund provides payment to the Fiscal Agent for principal and interest payments required per the debt service schedule for purchase of an additional City Hall Annex and economic revitalization projects. Revenues are provided by allocation of sales tax proceeds. Limited Tax G.O. 2000 This fund provides payment to the Fiscal Agent for principal and interest payments required per the debt service schedule for the City of Tukwila's portion of a new Valley Communications Center along with four other cities. Revenues are provided by allocation of sales tax proceeds. Limited Tax G.O. 2003 This fund provides payment to the Fiscal Agent for principal and interest payments required per the debt service schedule for the City of Tukwila's Arterial Street program. Revenues are provided by allocation of sales tax proceeds. Limited Tax G.O. Refunding 2003 This fund provides payment to the Fiscal Agent for principal and interest payments required per the debt service schedule for the refunded Limited Tax G.O. 1994 Bonds for the construction of a new Community Center and replacement Fire Station. Revenues are provided by allocation of sales tax proceeds. Limited Tax G.O. Refunding 2008 This fund provides payment to the Fiscal Agent for principal and interest payments required per the debt service schedule for the refunded Limited Tax G.O. 1999 Bonds for the purchase of an additional City Hall Annex and economic revitalization projects. Revenues are provided by allocation of sales tax proceeds. Limited Tax G.O. 2009A This fund provides payment to the Fiscal Agent for principal and interest payments required per the debt service schedule for the City's portion of the construction of a correctional facility along with six other cities. Taxable Build America Bonds 2009B This fund provides payment to the Fiscal Agent for principal and interest payments required per the debt service schedule for the City's portion of the construction of a correctional facility along with six other cities. 101 CITY OF TUKWILA: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON COMBINING BALANCE SHEET NON -MAJOR DEBT SERVICE FUNDS DECEMBER 31, 2009 TOTAL LIMITED TAX LIMITED TAX LIMITED TAX LIMITED TAX LIMITED TAX NONMAJOR G.O. BONDS G.O. BONDS G.O. BONDS G.O. REFUNDING G.O. REFUNDING DEBT SERVICE 1999 2000 2003 BONDS 2003 BONDS 2008 FUNDS ASSETS: CASH AND CASH EQUIVALENTS $ (55,311) $ (22,268) $ (70,737) $ (51,394) $ (39,683) $ (239,393) RECEIVABLES: TAXES 68,756 114,237 78,376 67,624 45,838 374,831 TOTAL ASSETS $ 13,445 $ 91,969 $ 7,639 $ 16,230 $ 6,155 $ 135,438 LIABILITIES AND FUND BALANCES: FUND BALANCES: UNRESERVED $ 13,445 $ 91,969 $ 7,639 $ 16,230 $ 6,155 $ 135,438 TOTAL FUND BALANCES 13,445 91,969 7,639 16,230 6,155 135,438 TOTAL LIABILITIES AND FUND BALANCES $ 13,445 $ 91,969 $ 7,639 $ 16,230 $ 6,155 $ 135,438 102 CITY OF TUKWILA: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NON -MAJOR DEBT SERVICE FUNDS FOR THE YEAR ENDED DECEMBER 31, 2009 LIMPED TAX LIMFTEDTAX BUILD TOTAL LIMITED TAX LIMITED TAX LIMPED TAX G.O. G.O. LIMITED TAX AMERICA NONMAJOR G.O. BONDS G.O. BONDS G.O. BONDS REFUNDING REFUNDING G.O. BONDS BONDS DEBT SERVICE 1999 2000 2003 BONDS 2003 BONDS 2008 2009A 2009B FUNDS REVENUES: TAXES $ 351,749 $ 255,538 $ 407,584 $ 344,715 $ 233,656 $ $ - $ 1,593,242 INVESTMENT EARNINGS 2,252 2,381 3,379 2,166 754 - - 10,932 TOTAL REVENUES EXPENDITURES: DEBT SERVICE INTEREST PRINCIPAL "TOTAL EXPENDITURES EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER)EXPENDPURES 354,001 257,919 410,963 1- 346,881 234,410 - - 1,604,174 23,948 15,104 272,330 110,204 289,255 4,854 62,323 778,018 465,000 175,000 261,297 380,000 35,000 - - 1,316,297 488,948 190,104 533,627 490,204 324,255 4,854 62,323 2,094,315 (134,947) 67,815 (122,664) (143,323) (89,845) (4,854) (62,323) (490,141) OTHER FINANCING SOURCES (USES): TRANSFERS IN (Note 5) - 96,000 96,000 TRANSFERS OUT (Note 5) (72,500) (317,000) (288,000) (109,000) - - - (786,500) GENERAL OBLIGATION BONDS ISSUED - 705,174 6,242,400 6,947,574 PAYMENT TO FISCAL AGENT - (700,320) (6,180,077) (6,880,397) TOTAL OTHER FINANCING SOURCES AND USES (72,500) (317,000) (288,000) (109,000) 96,000 4,854 62,323 (623,323) NET CHANGE IN FUND BALANCES (207,447) (249,185) (410,664) (252,323) 6.155 (1,113,464) FUNDBALANCES - BEGINNING 220,892 341,154 418,303 268,553 - 1,248,902 FUNDBALANCES - ENDING $ 13,445 $ 91,969 S 7,639 $ 16,230 $ 6,155 $ $ - $ 135,438 103 CITY OF TUKWILA: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES 104 CITY OF TUKWILA: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES NON -MAJOR GOVERNMENTAL FUNDS Capital Projects Funds Capital Projects Funds account for the acquisition or development of major capital facilities, except those projects financed by proprietary funds. Sources of revenue to these funds include general obligation bond proceeds, federal and state grants, general property taxes, real estate excise taxes, sales taxes, interest earnings, and transfers from other funds. Facility Replacement Fund This fund was established in 1988 for the replacement of existing general government facilities. General Government Improvements This fund was established in 1992 to provide funding for minor capital improvements not related to parks, land acquisition, or major building replacements. Fire Improvements This fund is to be used for the acquisition of land, development of land, and construction of fire facilities. Source of revenue from this fund comes primarily from fire impact fees. 105 CITY OF TUKWILA: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON COMBINING BALANCE SHEET NON -MAJOR CAPITAL PROJECTS FUNDS DECEMBER 31, 2009 GENERAL TOTAL NONMAJOR FACILITY GOVERNMENT FIRE CAPITAL PROJECTS REPLACEMENT IMPROVEMENTS IMPROVEMENTS FUNDS ASSETS: CASH AND CASH EQUIVALENTS $ 2,005,876 $ 328,904 $ INVESTMENTS 70,592 RECEIVABLES: TAXES 42,725 DUE FROM OTHER GOVERNMENTAL UNITS 6,206 TOTAL ASSETS $ 2,076,468 $ 377,835 $ LIABILITIES AND FUND BALANCES: CURRENT PAYABLES: ACCRUED WAGES AND BENEFITS $ 50 $ 2,803 $ RETAINAGE PAYABLE - 29,383 OTHER CURRENT LIABILITIES 2,500 - TOTAL LIABILITIES 2,550 32,186 FUND BALANCES: UNRESERVED 2,073,918 345,649 TOTAL FUND BALANCES 2,073,918 345,649 12,594 $ 752 2,347,374 71,344 42,725 6,206 13,346 $ 2,467,649 $ 2,853 29,383 2,500 34,736 13,346 2,432,913 13,346 2,432,913 TOTAL LIABILMES AND FUND BALANCES $ 2,076,468 $ 377,835 $ 13,346 $ 2,467,649 106 CITY OF TUKWILA: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA WASHINGTON COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NON -MAJOR CAPITAL PROJECTS FUNDS FOR THE YEAR ENDED DECEMBER 31, 2009 GENERAL TOTAL NONMAJOR FACILITY GOVERNMENT FIRE CAPITAL PROJECTS REPLACEMENT IMPROVEMENTS IMPROVEMENTS FUNDS REVENUES: TAXES CHARGES FOR SERVICES INTERGOVERNMENTAL INVESTMENT EARNINGS MISCELLANEOUS TOTAL REVENUES EXPENDITURES: PHYSICAL ENVIRONMENT CAPITAL OUTLAY PHYSICAL ENVIRONMENT TOTAL EXPENDITURES EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES): TRANSFERS IN (Note 5) TRANSFERS OUT (Note 5) TOTAL OTHER FINANCING SOURCES AND USES 1,401 $ 217,790 $ - $ 219,191 13,342 13,342 287,712 67,575 - 355,287 16,655 4,080 4 20,739 33,933 - - 33,933 339,701 289,445 13,346 642,492 177,488 177,488 484,658 497,485 982,143 484,658 674,973 1,159,631 (144,957) (385,528) 13,346 (517,139) 130,000 (65,000) 130,000 (65,000) 65,000 130,000 (65,000) NET CHANGE IN FUND BALANCES (14,957) (450,528) FUND BALANCES - BEGINNING 2,088,875 13,346 (452,139) 796,177 - 2,885,052 FUND BALANCES - ENDING $ 2,073,918 $ 345,649 $ 13,346 $ 2,432,913 107 CITY OF TUKWILA: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES 108 CITY OF TUKWILA: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES NON -MAJOR PROPRIETARY FUNDS Internal Service Funds The City Internal Service Funds are used to account for the financing of special services performed by designated organizations within the City of Tukwila to other organizations within the City. They provide a service and then generate revenue by billing the organization for which the service was provided. Equipment Rental Fund Accounts for the costs of maintaining and replacing all City vehicles and auxiliary equipment except for major fire apparatus. All equipment costs, including depreciation, are factors in calculating the rates which are charged to each user department. Insurance Fund Accounts for the costs of the City's self- insured medical plan. Medical and dental costs for covered employees are charged to the respective user departments. All premiums, medical and dental costs and ancillary charges are included. The LEOFF I retiree portion of this program was split off into a separate Insurance Fund to accommodate new reporting regulations as of January 1, 2004. Insurance LEOFF I Fund This fund was created to account for the City's self- insured medical plan for LEOFF I retirees. This fund receives contributions on behalf of retired LEOFF I employees through their respective organization units. Medical, dental and prescription claims and program administrative fees are expensed in this fund. 109 CITY OF TUKWILA: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON COMBINING STATEMENTS OF NET ASSETS INTERNAL SERVICE FUNDS DECEMBER 31, 2009 TOTAL INTERNAL EQUIPMENT INSURANCE- SERVICE RENTAL INSURANCE LEOFF I FUNDS ASSETS: CURRENT ASSETS: CASH AND CASH EQUIVALENTS $ 3,221,559 $ 3,941,498 $ 1,044,908 $ 8,207,965 INVESTMENTS 100,320 607,137 303,048 1,010,505 RECEIVABLES: CUSTOMER ACCOUNTS 152 - - 152 INTEREST ON INVESTMENTS 807 807 806 2,420 INVENTORY OF MATERIALS AND SUPPLIES 9,031 - - 9,031 TOTAL CURRENT ASSETS 3,331,869 4,549,442 1,348,762 9,230,073 NONCURRENT ASSETS: CAPITAL ASSETS: MACHINERY AND EQUIPMENT LESS: ACCUMULATED DEPRECIATION TOTAL CAPITAL ASSETS (NET OF A /D) 8,838,519 (5,692,198) 3,146,321 8,838,519 (5,692,198) 3,146, 321 TOTAL NONCURRENT ASSETS 3,146,321 - 3,146,321 TOTAL ASSETS 6,478,190 4,549,442 1,348,762 12,376, 394 LIABILITIES: ACCRUED WAGES AND BENEFITS 15,518 - - 15,518 OTHER CURRENT LIABILITIES - 1,167,751 97,401 1,265,152 TOTAL LIABILITIES 15,518 1,167,751 97,401 1,280,670 NET ASSETS: INVESTED IN CAPITAL ASSETS, NET OF RELATED DEBT 3,146,321 - - 3,146,321 UNRESTRICTED 3,316,351 3,381,691 1,251,361 7,949,403 TOTAL NET ASSETS $ 6,462,672 $ 3,381,691 $ 1,251,361 $ 11,095,724 110 CITY OF TUKWILA: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS INTERNAL SERVICE FUNDS FOR THE YEAR ENDED DECEMBER 31, 2009 TOTAL INTERNAL EQUIPMENT INSURANCE- SERVICE RENTAL INSURANCE LEOFFI FUNDS OPERATING REVENUES: CHARGES FOR SERVICES $ 1,697,207 $ 5,609,785 $ 607,511 $ 7,914,503 OTHER OPERATING REVENUE 602 769 1,371 TOTAL OPERATING REVENUES 1,697,207 5,610,387 608,280 7,915,874 OPERATING EXPENSES: OPERATIONS & MAINTENANCE ADMINISTRATION DEPRECIA TION/A MO RTIZA TION 1,160,503 736,332 3,887,428 310,419 5,358,350 2,002 2,002 736,332 TOTAL OPERATING EXPENSES OPERATING INCOME (LOSS) 1,896,835 3,887,428 312,421 6,096,684 (199,628) 1,722,959 295,859 1,819,190 NON - OPERATING REVENUE (EXPENSE): INVESTMENT EARNINGS 24,843 30,109 10,353 65,305 SALE OF CAPITAL ASSETS 93,893 - - 93,893 TOTAL NON - OPERATING REVENUE (EXPENSE) INCOME (LOSS) BEFORE CONTRIBUTIONS & TRANSFERS 118,736 30,109 10,353 159,198 (80,892) 1,753,068 306,212 1,978,388 CAPITAL CONTRIBUTIONS TRANSFERS IN (Note 5) TRANSFERS OUT (Note 5) 43,232 162,000 (192,100) 43,232 162,000 (192,100) CHANGE IN NET ASSETS (67,760) 1,753,068 306,212 1,991,520 TOTAL NET ASSETS BEGINNING OF YEAR 6,530,432 1,628,623 945,149 9,104,204 TOTAL NET ASSETS END OF YEAR $ 6,462,672 $ 3,381,691 $ 1,251,361 $ 11,095,724 111 CITY OF TUKWILA: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA WASHINGTON COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS FOR THE FISCAL YEAR ENDED DECEMBER 31, 2009 Page 1 of 2 TOTAL INTERNAL EQUIPMENT INSURANCE- SERVICE RENTAL INSURANCE LEOFF I FUNDS CASH FLOWS FROM OPERATING ACTIVITIES: CASH RECEIVED FROM USERS $ 1,697,207 $ 5,609,786 $ 607,510 $ 7,914,503 CASH PAID TO SUPPLIERS (585,167) (3,861,572) (311,046) (4,757,785) CASH PAID FOR INVENTORY (77,299) - (77,299) CASH PAID TO EMPLOYEES (470,996) - (470,996) OTHER CASH RECEIVED (PAID) - (22,287) (12,854) (35,141) NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES 563,745 1,725,927 283,610 2,573,280 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: TRANSFERS IN TRANSFERS OUT 162,000 - - 162,000 (192,100) (192,100) NET CASH PROVIDED (USED) BY NON - CAPITAL FINANCING ACTIVITIES (30,100) (30,100) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: PROCEEDS FROM SALE OF EQUIPMENT 93,893 93,893 PURCHASE OF CAPITAL ASSETS (847,466) - (847,466) PROCEEDS FROM INSURANCE SETTLEMENT - (2,118) (1,434) (3,552) NET CASH PROVIDED (USED) FOR CAPITAL AND RELATED FINANCING ACTIVITIES (753,573) (2,118) (1,434) (757,125) CASH FLOW FROM INVESTING ACTIVITIES: PROCEEDS FROM SALE OF INVESTMENTS 670,740 880,439 201,754 1,752,933 PURCHASE OF INVESTMENTS (100,000) (906,818) (302,727) (1,309,545) INTEREST RECEIVED 27,707 38,088 12,110 77,905 NET CASH PROVIDED (USED) IN INVESTING ACTIVITIES 598,447 11,709 (88,863) 521,293 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 378,519 1,735,518 193,312 2,307,349 CASH AND CASH EQUIVALENTS- BEGINNING OF YEAR 2,843,040 2,205,980 851,594 5,900,615 CASH AND CASH EQUIVALENTS -END OF YEAR $ 3,221,559 $ 3,941,498 $ 1,044,907 $ 8,207,964 CASH AT END OF YEAR CONSISTS OF: CASH AND CASH EQUIVALENTS TOTAL CASH $ 3,221,559 $ 3,941,498 $ 1,044,907 $ 8,207,964 $ 3,221,559 $ 3,941,498 $ 1,044,907 $ 8,207,964 112 CITY OF TUKWILA: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA WASHINGTON COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS FOR THE FISCAL YEAR ENDED DECEMBER 31, 2009 Page 2 of 2 TOTAL INTERNAL EQUIPMENT INSURANCE- SERVICE RENTAL INSURANCE LEOFFI FUNDS RECONCILIATION OF NET OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES OPERATING INCOME (LOSS) $ (199,627) $ 1,722,959 $ 295,858 $ 1,819,190 ADJUSTMENTS TO RECONCILE OPERATING INCOME TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES: DEPRECIATION 736,332 - 736,332 ASSET (INCREASES) DECREASES: MISCELLANEOUS A/R- REVENUE - 25,857 1,375 27,232 INVENTORY 28,968 - 28,968 LIABILITY INCREASES (DECREASES) : ACCOUNTS & VOUCHERS PAYABLE (1,928) (22,889) (13,623) (38,440) TOTAL ADJUSTMENTS 763,372 2,968 (12,248) 754,092 NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES $ 563,745 $ 1,725,927 $ 283,610 $ 2,573,282 SCHEDULE OF NONCASH INVESTING, CAPITAL AND FINANCING ACTIVITIES CAPITAL ASSETS ACQUIRED BY CONTRIBUTED CAPITAL $ 43,232 $ - $ - $ 43,232 INCREASE (DECREASE) IN FAIR VALUE OF INVESTMENT 320 320 1,508 2,148 TOTAL NON CASH INVESTING, CAPITAL AND FINANCING ACTIVITIES $ 43,552 $ 320 $ 1,508 $ 45,380 113 CITY OF TUKWILA: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES 114 CITY OF TUKWILA: 2009 CAFR STATISTICAL SECTION City of Tukwila STATISTICAL SECTION December 31, 2009 Financial Trends Information Financial trends schedules are intended to provide users with information to assist them in understanding and assessing how the City's financial position has changed over time. Schedule 1 Net Assets by Component 116 Schedule 2 Changes in Net Assets 118 Schedule 3 Fund Balances, Governmental Funds 119 Schedule 4 Changes in Fund Balances, Governmental Funds 120 Schedule 5 General Governmental Tax Revenues by Source 122 Revenue Capacity Information The objective of providing revenue capacity information is to help users understand and assess the factors affecting the City's ability to generate its most significant local source revenues. Schedule 6 Property Tax Levies and Collections 123 Schedule 7 Assessed and Estimated Actual Value of Taxable Property 124 Schedule 8 Property Tax Rates - Direct and Overlapping Governments 125 Schedule 9 Principal Property Taxpayers 126 Schedule 10 Retail Sales Tax Collections by Sector 128 Schedule 11 Sales Tax Rate Direct and Overlapping Governments 130 Debt Capacity Information Debt capacity information is intended to assist users to understand and assess the City's current levels of outstanding debt and ability to issue additional debt in the future. Schedule 12 Ratios of Outstanding Debt by Type 131 Schedule 13 Ratios of General Bonded Debt Outstanding 132 Schedule 14 Computation of Direct and Overlapping Debt 133 Schedule 15 Legal Debt Margin Information 134 Schedule 16 Revenue Bond Coverage- Water and Sewer Bonds 136 Schedule 16A Revenue Bond Coverage- Surface Water Bonds 137 Demographic and Economic Information These Schedules offer demographic and economic information to assist users in understanding certain aspects of the environment within which the City operates and to provide information that facilitates comparisons of financial statement information over time and across governmental units. Schedule 17 Demographic Statistics 138 Schedule 18 Principal Employers 139 Operating Information These Schedules contain service and infrastructure data to help users understand how the information in the City's financial report relates to the services the City provides and the activities it performs. Schedule 19 Staffing Levels by Department 140 Schedule 20 Operating Indicators by Function 141 Schedule 21 Capital Assets by Function 142 115 CITY OF TUKWILA: 2009 CAFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 1 NET ASSETS BY COMPONENT(a) LAST EIGHT FISCAL YEARS (b) page 1 of 2 2002 2003 2004 2005 Governmental activities: Invested in capital assets, net of related debt $ 102,619,488 $ 118,950,364 $ 123,038,903 $ 129,855,251 Restricted 389,322 809,002 1,107,362 1,305,239 Unrestricted 23,825,950 24,341,822 25,873,104 25,289,571 Total governmental activities net assets $ 126,834,760 $ 144,101,188 $ 150,019,369 $ 156,450,061 Business -type activites: Invested in capital assets, net of related debt $ 29,032,974 $ 29,807,787 $ 30,848,350 $ 31,370,812 Restricted 1,311,344 887,398 960,485 577,587 Unrestricted 8,785,499 9,070,664 9,664,654 9,909,896 Total governmental activities net assets $ 39,129,817 $ 39,765,849 $ 41,473,489 $ 41,858,295 Primary government: Invested in capital assets, net of related debt $ 131,652,462 $ 148,758,151 $ 153,887,253 $ 161,226,063 Restricted 1,700,666 1,696,400 2,067,847 1,882,826 Unrestricted 32,611,449 33,412,486 35,537,758 35,199,467 Total primary government net assets $ 165,964,577 $ 183,867,037 $ 191,492,858 $ 198,308,356 Notes: (a) All amounts are reported on the accrual basis (b) Amounts presented from year of implementation of GASB -34 (2002) forward Source: Tukw ila Finance Department 116 CITY OF TUKWILA: 2009 CAFR STATISTICAL SECTION page 2 of 2 2006 2007 2008 2009 $ 133,129,382 $ 136,053,013 $ 136,742,368 $ 155,847,012 1,305,239 1,233,234 19,720,546 16,360,097 29, 506, 541 35, 520, 681 18,476, 837 16, 031,473 $ 163,941,162 $ 172,806,928 $ 174,939,751 $ 188,238,582 $ 34,017,190 $ 36,083,972 $ 36,071,402 $ 38,052,488 435,995 441,073 439,100 438,619 12,070,451 11,267,171 13,335,836 10,987,162 $ 46,523,636 $ 47,792,216 $ 49,846,338 $ 49,478,269 $ 167,146,572 $ 172,136,985 $ 172,813,770 $ 193,899,500 1,741,234 1,674,307 20,159,646 16,798,716 41,576,992 46,787,852 31,812,673 27,018,635 $ 210,464,798 $ 220,599,144 $ 224,786,089 $ 237,716,851 117 CITY OF TUKWILA: 2009 CAFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 2 CHANGES IN NET ASSETS (A) 2004 (b) 2005 2006 1 2007 M. 2008 i 2009 Expenses Governmental Activities General Government $ 6,167,738 $ 6,421,839 $ 7,402,398 $ 7,456,335 $ 4,723,103 $ 6,689,659 Public Safety 18,769,074 20,300,709 21,839,070 21,726,932 24,147,992 26,959,352 Physical Environment 1,442,209 1,363,049 2,734,592 2,764,373 2,862,487 2,575,405 Transportation 4,962,043 4,171,173 5,335,214 5,310,247 5,864,297 5,541,367 Economic Environment 3,469,673 3,404,605 3,600,158 3,890,845 5,017,935 4,637,531 Mental and Fhyscial Health - 3,683 4,204 4,173 4,332 Culture and Recreation 3,680,402 3,887,871 4,234,889 4,506,223 4,797,856 4,914,256 Interest on Long Term Debt 1,034,841 1,012,239 981,573 896,215 1,844,224 753,904 Total Governmental Activities 39,525,980 40,561,485 46,131,577 46,555,374 49,262,067 52,075,806 Business Type Activities Water/Sew er Utility 6,774,102 7,105,020 7,354,876 7,046,603 7,293,362 9,293,434 Foster Golf Course 1,670,400 1,751,709 1,832,303 1,849,542 1,968,595 2,050,172 Surface Water Utility 1,625,579 1,685,663 1,642,204 1,920,194 1,762,417 2,299,394 Total Business Type Activities 10,070,081 10,542,392 10,829,383 10,816,339 11,024,374 13,643,000 Total Primary Government Expenses $ 49,596,061 $ 51,103,877 $ 56,960,960 $ 57,371,713 $ 60,286,441 $ 65,718,806 Program Revenues Governmental Activities Charges for Services General Government $ 781,653 $ 1,376,749 $ 1,243,936 $ 1,590,553 $ 895,966 $ 1,136,642 Public Safety 937,873 1,328,369 538,576 425,241 1,184,530 572,094 Physical Environment 5,005 12,400 10,000 25,341 1,200 Transportation 102,614 122,201 247,026 133,500 130,637 103,311 Economic Environment 1,977,676 1,027,812 1,756,240 2,319,634 2,476,501 1,001,511 Cultural and Recreation 894,681 693,857 758,385 777,484 711,542 647,354 Operating Grants and Contributions 1,607,688 1,525,579 1,897,543 1,692,766 1,325,163 3,386,269 Capital Grants and Contributions 3,705,424 3,060,960 5,675,493 3,746,743 2,282,592 14,784,074 Total Governmental Activities Program Revenues 10,012,614 9,147,927 12,127,199 10,711,262 9,008,131 21,631,255 Business Type Activities Charges for Services Water/Sew er Utility 7,620,572 7,604,711 7,354,876 8,272,647 8,621,909 10,124,653 Foster Golf Course 1,239,274 1,434,933 1,832,303 1,272,425 1,563,681 1,424,595 Surface Water Utility 1,819,703 1,839,760 1,642,204 2,208,549 2,642,325 2,641,313 Capital Grants and Contributions 588,891 319,439 1,255,360 347,416 756,400 515,633 Total Business Type Activities Rogram Revenues 11,268,440 11,198,843 12,084,743 12,101,037 13,584,315 14,706,194 Total Primary Government Rogram Revenues 21,281,054 20,346,770 24,211,942 22,812,299 22,592,446 36,337,449 Net (Expense) /Revenue Governmental Activities (29,513,366) (31,413,558) (34,004,378) (35,844,111) (40,253,937) (30,444,551) Business Type Activities 1,198,359 656,451 2,031,638 1,284,700 2,559,941 1,063,194 Total Primary Government Net Expense . $ (28,315,007) $ (30,757,107) $ (31,972,740) $ (34,559,411) $ (37,693,996) $ (29,381,357) General Revenues and Other Changes in Net Assets Governmental Activities Taxes Property Tax $ 10,336,366 $ 10,631,036 $ 10,973,030 $ 11,302,099 $ 11,656,979 $ 11,901,072 Retail Sales and Use Tax 16,492,528 16,887,846 18,236,733 19,355,867 18,009,297 14,588,297 Natural Gas Use Tax 29,667 381,706 415,652 344,748 643,037 748,772 Hotel /Motel Tax 390,221 443,605 501,478 583,232 587,216 489,806 Utility Tax 2,309,787 2,646,356 2,930,332 3,666,079 5,136,444 7,390,860 Business Tax 1,614,587 1,732,739 2,097,082 2,236,675 2,497,705 3,196,178 Excise Tax 4,100,309 3,229,155 4,941,461 4,127,360 983,078 367,198 State Entitlements 191,589 192,816 185,475 217,600 874,046 2,233,445 Unrestricted hvestment Earnings 416,483 768,097 1,923,171 1,727,879 801,847 246,287 Gain /Loss on Sale of Capital Assets 106,776 467,510 13,652 (186,663) 980,267 Transfers (450,000) 824,118 1,372,652 1,134,683 1,383,774 1,601,200 Total Governmental Activities 35,431,537 37,844,250 44,044,576 44,709,874 42,386,760 43,743,382 Business Type Activities Retail Sales and Use Taxes 228,458 241,723 645,473 500,000 500,000 327,999 Unrestricted Investment Interest 188,242 310,750 539,463 618,563 377,955 106,032 Gain /Loss on Sale of Capital Assets - - - - - (264,093) Transfers 450,000 (824,118) 1,250,000 (1,134,683) (1,383,774) (1,601,200) Total Business Type Activities 866,700 (271,645) 2,434,936 (16,120) (505,819) (1,431,262) Total Primary Government $ 36,298,237 $ 37,572,605 $ 46,479,512 $ 44,693,754 $ 41,880,941 $ 42,312,120 Change in Net Assets Governmental Activities $ 5,918,171 $ 6,430,692 $ 7,491,102 $ 8,865,765 $ 2,132,823 $ 13,298,831 Business Type Activities 2,065,059 384,806 4,580,734 1,268,580 2,054,122 (368,068) Total Primary Government $ 7,983,230 $ 6,815,498 $ 12,071,836 $ 10,134,345 $ 4,186,945 $ 12,930,763 Notes: (a) All amounts are reported on the accrual basis (b) Amounts presented from year of implementation of GASB -34 forward (2004 for capital assets) Source: 118 Tukw ila Finance Department CITY OF TUKWILA: 2009 CAFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 3 FUND BALANCES, GOVERNMENT FUNDS LAST EIGHT FISCAL YEARS (1) (MODIFIED ACCRUAL BASIS OF ACCOUNTING) 2002 2003 2004 2005 2006 2007 2008 2009 General Fund Reserved $ 12,700 $ 613,000 $ 557,690 $ 557,690 $ 13,250 $ 12,650 $ 17,800 $ 17,900 Unreserved 3,380,158 6,247,054 8,533,639 8,408,104 8,693,215 10,504,748 7,687,515 7,371,530 Total general fund $ 3,392,858 $ 6,860,054 $ 9,091,329 $ 8,965,794 $ 8,706,465 $10,517,398 $ 7,705,315 $ 7,389,430 All other governmental funds Reserved $ 15,300 $ 765,300 $ 720,860 $ 705,560 $ - $ $ $ Unreserved, reported in: Special revenue funds 11,021,202 8,939,830 6,933,242 5,669,921 8,500,342 10,834,781 12,943,487 9,123,401 Debt service funds 389,322 809,012 1,107,362 1,305,239 1,075,347 1,233,234 1,248,901 135,438 Capital Projects funds 2,321,088 3,888,305 4,092,179 5,677,953 7,245,827 8,113,739 6,831,634 7,101,258 Total all other governmental funds $ 13,746,912 $ 14,402,447 $ 12,853,643 $ 13,358,673 $ 16,821,516 $ 20,181,754 $ 21,024,022 $ 16,360,097 Note: (1) Information available for 2002 -2008 only due to new accounting and reporting standards beginning 2002 with GASB Statement No. 34. Source: Tukw ila Finance Department $35,000,000 $30,000,000 $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 $- Fund Balances 2002 2003 2004 2005 2006 2007 2008 2009 f All Other Governmental - General Fund 119 CITY OF TUKWILA: 2009 CAFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 4 CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS (a) LAST TEN FISCAL YEARS page 1 of 2 2000 2001 2002 2003 Revenues Taxes $ 23,381,378 $ 22,019,850 $ 28,156,041 $ 31,986,222 Licenses and Permits 1,439,052 921,809 822,810 785,823 Intergovernmental 856,218 959,350 16,689,193 15,005,227 Charges for Services 1,857,182 1,232,149 1,201,080 1,796,946 Fines and Forfeitures 323,919 285,000 338,484 245,585 Investment Income 555,422 632,537 859,765 222,460 Miscellaneous 610,849 411,614 489,806 1,066,247 Total Revenues 29,024,020 26,462,309 48,557,179 51,108,510 Expenditures General Government 4,985,167 5,390,820 5,648,745 5,892,912 Public Safety 15,333,820 16,056,801 16,711,088 17,532,136 Physical Environment 1,060,844 805,029 1,228,774 1,509,946 Transportation 1,029,766 1,135,903 2,202,888 4,779,885 Economic Environment 2,103,066 2,349,462 2,974,513 3,429,674 Mental & Physical Health Culture and Recreation 1,935,736 2,110,344 2,457,973 2,985,083 Debt Service Principal 718,000 754,000 Interest 925,414 924,964 Bond Issuance Costs 112,363 Capital Outlay 542,636 524,309 17,306,146 15,636,782 Total Expenditures 26,991,035 28,372,668 50,173,541 53,557,745 Excess (Deficiency) of Revenues 2,032,985 (1,910,359) (1,616,362) (2,449,235) Over (Under) Expenditures Other Financing Sources (Uses) Transfers In 1,706,973 5,513,212 Transfers Out (175,000) (175,000) (1,845,331) (5,288,570) Sale of Capital Assets 140,535 1,646 177,995 General Obligation Bonds Issued 6,277,500 General Obligation Refunding Bonds Issued 4,195,000 Premium on General Obligation Debt 65,392 Rerrium on General Obligation Refunding Debt 248,672 Issuance Costs on General Obligation Refunding Debt Payment to Refunded Bond Escrow Agent (4,439,240) Total Other Financing Sources (Uses) (34,465) (173,354) 39,637 6,571,966 Net Change in Fund Balances $ 1,998,520 $ (2,083,713) $ (1,576,725) $ 4,122,731 Ratio of Debt Service Expenditures 5.3% 5.0% To Total Non - Capital Expenditures Note: (a) All amounts are reported on the modified - accrual basis Source: Tukw ila Finance Department 120 CITY OF TUKWILA: 2009 CAFR STATISTICAL SECTION page 2 of 2 2004 2005 2006 2007 2008 • 2009 $ 34,148,173 $ 34,624,875 $ 37,801,814 $ 39,660,792 $ 37,412,569 $ 37,167,281 808,821 1,002,683 1,273,228 1,827,709 2,022,851 1,283,463 6,306,463 5,672,810 7,083,032 6,403,217 5,697,598 17,596,486 2,919,115 2,649,678 2,345,931 2,024,892 2,569,381 1,443,680 147,137 116,737 221,097 266,188 259,991 301,761 356,625 638,196 1,159,971 1,425,423 926,913 282,604 993,386 1,000,775 1,397,585 1,751,145 816,054 701,957 45,681,724 45,705,754 51,282,658 53,359,366 49,705,357 58,777,232 5,982,594 6,136,540 6,882,594 7,034,602 7,992,286 8,574,563 18,393,514 19,604,151 20,953,226 21,038,810 22,878,689 25,576,932 883,914 788,105 2,139,959 2,196,422 2,255,880 2,058,913 2,620,038 1,705,692 2,447,096 2,413,390 2,783,077 2,334,298 3,461,092 3,384,928 3,539,657 3,878,658 4,995,514 4,601,391 - - 3,683 4,204 4,173 4,332 3,187,113 3,358,583 3,687,580 3,938,779 4,293,658 4,365,023 804,000 851,000 888,000 930,000 972,000 1,316,297 1,057,974 1,033,474 1,006,161 914,584 872,224 778,018 8,057,070 7,344,326 6,540,452 7,243,879 6,089,703 16,860,362 44,447,309 38,070,259 48,088,408 49,593,328 53,137,204 66,470,129 1,232,411 1,498,955 3,194,250 4,036,039 (3,431,846) (7,692,894) 350,000 150,000 2,143,581 2,266,349 2,515,982 3,865,744 (900,000) (1,305,000) (2,430,769) (1,131,666) (1,107,543) (2,234,444) 35,600 296,451 100 53,592 1,014,608 - - 6,180,000 6,947,574 483,599 - (108,326) - - - (6,555,273) (6,880,397) (550,000) (1,119,400) 9,263 1,134,783 1,462,031 2,713,085 $ 682,411 8105$ S x,20 x$18 $,. 47(1322 $ (9 969;815) ry 5.4% 5.4% 4.8% 4.6% 4.1% 121 4.4% CITY OF TUKWILA: 2009 CAFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 5 GENERAL GOVERNMENTAL TAX REVENUES BY SOURCE LAST TEN FISCAL YEARS Fiscal Year Property, Sales & Use _ Unlit &?` Excise Business 1 Othermbm Total Taxes 2000 $ 8,378,208 $ 18,800,979 $ - $ 2,918,619 $ 340,565 $ 491,852 $ 30,930,223 2001 9,326,336 16,345,134 - 2,445,379 383,025 444,655 28,944,529 2002 9,487,241 15,494,343 - 2,406,132 390,725 377,600 28,156,041 2003 9,854,007 16,171,756 1,591,922 3,500,318 431,188 437,031 31,986,222 2004 10,493,728 16,293,960 2,309,787 4,068,110 530,725 451,863 34,148,173 2005 10,627,410 16,887,845 2,646,356 3,222,936 408,798 831,530 34,624,875 2006 11,018,846 17,591,260 2,930,332 4,938,515 402,784 920,077 37,801,814 2007 11,177,532 19,355,867 3,666,079 4,124,168 405,973 931,173 39,660,792 2008 11,245,973 17,709,319 3,934,210 3,003,438 475,500 1,089,344 37,457,785 2009 12,190,219 14,585,015 6,172,569 2,824,407 738,341 656,730 37,167,281 change 2000- 2009 45.5% -22.4% 167.2% -3.2% 116.8% 33.5% 20.2% Notes: 00 Utility taxes enacted beginning in 2003. (5) "Other Taxes" include penalties and interest on delinquent taxes and other miscellaneous tax revenues. Source: Tukw ila Finance Department $50,000,000 - $40,000,000 - $30,000,000 - $20,000,000 - $10,000,000 Tax Revenue by Source 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 • Other • Business Tax • Excise Tax • Utilty Tax • Sales & Use Tax • Property Tax 122 CITY OF TUKWILA: 2009 CAFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 6 PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS % of Total Tax Current Tax Percent of Levy Delinquent Tax Total Tax Collections To Tax Fiscal Year Total Tax Levy Collections Collected Collections Collections Levy 2000 $ 8,538,884 $ 8,428,579 98.71% $ 101,725 $ 8,530,304 99.90% 2001 9,362,284 9,218,994 98.47% 102,095 9,321,089 99.56% 2002 9,843,102 9,526,236 96.78% 115,859 9,642,095 97.96% 2003 10,136,315 9,924,909 97.91% 175,949 10,100,858 99.65% 2004 10,489,114 10,345,276 98.63% 278,064 10,623,340 101.28% 2005 10,731,724 10,593,753 98.71% 134,345 10,728,098 99.97% 2006 10,973,030 10,844,728 98.83% 237,003 11,081,731 100.99% 2007 11,177,532 10,994,127 98.36% 115,199 11,109,326 99.39% 2008 11,411,293 11,194,247 98.10% 132,633 11,326,880 99.26% 2009 12,283,193 12,017,213 97.83% 143,156 12,160,369 99.00% Source: King County Office of Finance $15,000,000 $12,000,000 $9,000,000 - $6,000,000 - $3,000,000 - Property Tax Levies and Collections $- '''''Iuu. 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 • Total tax levy • Currenttax collections 123 CITY OF TUKWILA: 2009 CAFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 7 ASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY LAST TEN FISCAL YEARS Fiscal Year Total Assessed Total Direct Real Property Personal Property Public Utilities Value Tax Rate 2000 2,349,904,622 580,108,305 74,515,846 3,004,528,773 3.11256 2001 2,544,588,267 606,806,225 192,651,250 3,344,045,742 2.94537 2002 2,715,355,120 604,479,409 169,870,128 3,489,704,657 2.91064 2003 2,832,422,720 471,448,140 80,219,849 3,384,090,709 3.10754 2004 2,916,855,190 447,099,099 77,169,236 3,441,123,525 3.11712 2005 3,091,233,279 457,546,448 61,779,040 3,610,558,767 3.03706 2006 3,399,709,737 482,100,071 66,123,704 3,947,933,512 2.84033 2007 3,853,680,774 509,151,926 87,410,974 4,450,243,674 2.56911 2008 4,470,042,539 595,268,205 110,399,231 5,175,709,975 2.37324 2009 4,122,961,628 746,710,751 112,779,972 4,973,984,133 2.66345 Note: *Real, personal, and state public service property have been assessed at 100% of the estimated value. Source: King County Department of Assessments $6,000,000,000 $5,000,000,000 $4,000,000,000 $3,000,000,000 $2,000,000,000 $1,000,000,000 $- Assessed Value By Type I I I I I I I I I 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 III Public Utilities • Personal Property • Real Property 124 CITY OF TUKWILA: 2009 CAFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 8 PROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS (PER $1,000 OF ASSESSED VALUATION) LAST TEN FISCAL YEARS CITY OF TUKWILA Emergency Tukw ila King Fort of Medical School Dist Flood Hospital Fiscal Year General Levy Special Levy Total WA State County(a) Seattle Service #406 Control District #1 Total 2000 $ 3.11256 $3.11256 $3.14502 $2.10955 $0.19029 $ 0.24624 $ 5.54167 $ 0.04957 $ 0.09873 $14.49363 2001 2.94537 2.94537 2.98946 1.97530 0.18956 0.25000 5.11395 0.04665 0.09643 13.60672 2002 2.91064 2.91064 2.89680 1.34948 0.25895 0.24143 4.85812 0.04688 0.09254 12.65484 2003 3.10754 3.10754 2.75678 1.96799 0.25402 0.23717 5.05267 0.04669 0.09200 13.51486 2004 3.11712 3.11712 2.68951 1.91484 0.25321 0.23182 5.04535 0.04658 0.09039 13.38882 2005 3.03706 3.03706 2.49787 1.86293 0.23330 0.21982 5.01637 0.04482 0.59000 13.50217 2006 2.84033 2.84033 2.32535 1.75139 0.23158 0.20621 4.78874 0.04212 0.55652 12.74224 2007 2.56911 2.56911 2.13233 1.66106 0.22359 0.30000 4.73164 0.10000 0.50854 12.22627 2008 2.37324 2.37324 1.96268 1.51508 0.19700 0.27404 4.12360 0.09123 0.47141 11.00828 2009 2.66345 2.66345 2.22253 1.74587 0.21597 0.30000 3.89183 0.10514 0.53290 11.67769 Note: 0) Includes King County Library District tax. Source: King County Department of Assessments $3.50000 $3.00000 $2.50000 $2.00000 $1.50000 $1.00000 $0.50000 $- Direct Property Tax Rates 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 125 $ 1,630,570,526 32.78% $ 1,178,010,855 38.3% CITY OF TUKWILA: 2009 CAFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 9 PRINCIPAL PROPERTY TAXPAYERS CURRENT YEAR AND NINE YEARS AGO Name Type of Business 2009 Assessed Valuation Percent of 2009 Total Assessed Valuele) 2000 Assessed Valuation Percent of 2000 Total Assessed Valuee') Boeing Company WEA Southcenter LLC La Ranta LP KIR Tukw ila 050 LL IKIMCO Rreef America Reit II Corporation BRCP Riverview Plaza LLC Boeing Employees Credit Union Sea -Tuk Warehouse LLC Sterling Realty Organization Walton CWWA Eproperty Tax Incorporated (McBroy) Federated Department Stores (Macys) Anne Arundel Apartments LLC (Group Health) TTA /E Property Tax Dept Wig Roperties LLC (JC Penney) Jorgensen Forge Corporation Southcenter Corporate Square Puget Sound Energy /Gas - Bectric Koar - Seatac Partners LP Merrill Creek Holding LLC (Kenw orth Motors) Harnish Group Incorporated CHA Southcenter LLC (Doubletree Inn) Lowe's HIW Incorporated Hill Investment Company Qw est Corporation Southcenter Joint Ventures MBK Properties (Trammell Crow ) Gatew ay Properties Group Health Cooperative Tractor Equipment Company Pacific Gulf Properties Associated Grocers Airplane company Department Stores Commercial Roperties Commercial Properties Commercial Properties Commercial Properties Credit Union Food Distribution Cormiercial Properties Investment Property Department Stores Apartments Commercial Properties Department Stores Steel Manufacturer Hair Loss Center Bectric /Gas Utility Lodging Truck Manufacturer Truck Equipment Lodging Horne Improvement Commercial Roperties Telephone Utility Department Stores Commercial Properties Commercial Properties Healthcare Adniin Truck Equipment Property Management Food Distribution $ 534,257,164 323,176,114 116,639,470 84,646,800 66,929,100 56,378,348 52,932,440 36,731,500 36,120,900 31,554,600 31,485,900 29,708,200 29,685,100 27,066,590 26,942,564 24,758,000 22,836,078 21,092,314 20,886,500 17,516,078 16,481,665 14,790,901 7,954,200 10.74% $ 542,675,507 18.1% 6.50% 2.34% 77,869,557 2.6% 1.70% 1.35% 1.13% 1.06% 32,080,142 1.1% 0.74% 0.73% 0.63% 25,818,900 0.63% 25,959,688 0.9% 0.60% 0.60% 0.54% 13,167,246 0.4% 0.54% 10,264,793 0.3% 0.50% 0.46% 22,264,714 0.7% 0.42% 16,248,269 0.5% 0.42% 14,814,218 0.5% 0.35% 0.33% 0.30% 0.16% 17,483,954 14,437,861 9,387,200 16,857,350 121,108,140 79,034,000 56,129,500 20,958,583 20,523,095 22,826,200 18,101,938 0.6% 0.5% 0.3% 0.6% 4.0% 2.6% 1.9% 0.7% 0.7% 0.8% 0.6% ''QTA Notes: I) In 2009 the total assessed property value in the City of Tukwila was $4, 973,984,133. rot In 2000 the total assessed property value in the City of Tukwila was $3,004,528,773. Source: King County Department of Assessments 126 CITY OF TUKWILA: 2009 CAFR STATISTICAL SECTION 127 CITY OF TUKWILA: 2009 CAFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 10 RETAIL SALES TAX COLLECTIONS BY SECTOR LAST TEN FISCAL YEARS page 1 of 2 Major Industry Sector 2000 2001 2002 2003 Construction and Contracting $ 3,192,100 $ 2,104,156 $ 991,702 $ 1,119,595 Finance, Insurance & Real Estate 51,612 108,262 57,919 54,992 Manufacturing 568,041 596,052 563,919 520,474 Transportation, Communications & Utilities 353,000 360,441 350,258 377,596 Wholesale - Durable /Non - durable Goods 1,730,497 1,470,187 1,374,271 1,761,749 Retail Trade - General Merchandise 2,708,649 2,591,680 2,570,883 2,545,631 Retail Trade - Furniture /Home Furnishings 1,957,687 1,862,336 1,815,168 2,304,037 Retail Trade - Miscellaneous 2,066,226 2,115,104 2,044,562 1,723,147 Retail Trade - Clothing & Accessories 1,107,815 1,134,102 1,175,074 1,197,591 Retail Trade - Restaurants 936,411 900,496 887,103 933,886 Retail Trade - Automotive /Gas 792,951 770,063 768,664 847,864 Retail Trade - Building Materials 666,679 627,140 712,723 763,013 Service Industries - Business 1,166,278 493,806 824,497 530,833 Service Industries - Hotels 451,098 418,051 357,940 361,789 Service Industries - Other 371,467 386,590 373,911 507,935 All Other Categories 367,826 70,289 296,953 292,827 Total Retail Sales Tax Collections $ 18,488,337 $ 16,008,755 $ 15,165,547 $ 15,842,959 Notes: (a) Effective March 2005, the Department of Revenue changed reporting retail sales industries from using the Standard Industrial Classification (SIC) code to use of the North American Industry Classification System (NAICS). Retail sales tax collections prior to the time of this change have not been adjusted. By State law, the City of Tukwila is prohibited from reporting individual sales tax payers. Sources: Tukw ila Finance Department and Washington State Department of Revenue. 128 CITY OF TUKWILA: 2009 CAFR STATISTICAL SECTION page 2 of 2 2004 2005(a) 2006 2007 2008 2009 $ 958,758 $ 676,427 $ 1,166,088 $ 2,018,058 $ 1,967,785 $ 869,640 82,794 102,130 93,747 121,879 118,780 119,121 446,965 503,778 450,138 590,455 375,263 246,429 387,148 384,703 436,260 483,419 492,960 440,206 1,862,528 2,337,018 2,048,517 2,457,437 1,760,449 1,436,045 2,574,671 2,563,103 2,667,481 2,571,601 2,231,745 2,072,356 2,405,967 2,342,553 2,531,049 2,399,347 1,830,576 1,304,234 1,735,045 1,497,474 1,642,722 1,766, 853 1,718,898 1,473,496 1,247,109 1,636,183 1,704,213 1,838,646 2,103,630 2,017,904 1,031,625 1,072,275 1,119,859 1,158,424 1,312,603 1,292,252 982,413 980,006 1,053,184 1,026,778 1,066,183 748,482 850,109 815,379 855,243 777,870 619,657 589,341 488,857 979,752 1,141,632 1,198,690 1,129,380 868,260 355,514 406,547 453,376 531,836 548,962 453,657 486,215 278,041 278,777 294,869 318,696 283,319 288,169 188,540 205,644 179,421 185,312 208,467 $ 16,183,887 $ 16,763,909 $ 17,847,930 $ 19,415,583 $ 17,780,879 $ 14,423,209 129 CITY OF TUKWILA: 2009 CAFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 11 SALES TAX RATE DIRECT AND OVERLAPPING GOVERNMENTS LAST TEN FISCAL YEARS 2000 20010) 2002 2003 2004 2005 2006 2007) 2008 (e) 2009 BASIC SALES TAX RATES City of Tukwila Washington State King County Regional Transit Authority Metro Criminal Justice 0.84% 6.50% 0.15% 0.40% 0.60% 0.10% 0.84% 6.50% 0.15% 0.40% 0.80% 0.10% 0.84% 6.50% 0.15% 0.40% 0.80% 0.10% 0.84% 6.50% 0.15% 0.40% 0.80% 0.10% 0.84% 6.50% 0.15% 0.40% 0.80% 0.10% 0.84% 6.50% 0.15% 0.40% 0.80% 0.10% 0.84% 6.50% 0.15% 0.40% 0.80% 0.10% 0.84% 6.50% 0.15% 0.40% 0.90% 0.10% 0.84% 6.50% 0.25% 0.40% 0.90% 0.10% 0.84% 6.50% 0.35% 0.80% 0.90% 0.10% Department of Revenue Administration Fee 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% Total Basic Combined Sales Tax Rate 8.60% 8.80% 8.80% 8.80% 8.80% 8.80% 8.80% 8.90% 9.00% 9.50% SPECIAL SALES TAX RATES Restaurants (0) Motor Vehicles (' ) 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.00% 0.00% 0.00% 0.30% 0.30% 0.30% 0.30% 0.30% 0.30% 0.30% Notes: (a) Effective April 1, 2001 King County increased the local sales & use tax rates two- tenths of one percent (.002). This increase was the result of a vote by King County voters to increase funding for public transit systems. (b) King County Food & Beverage tax is in addition to the combined sales tax rate for restaurants, taverns and bars. The funds are used to finance the professional baseball stadium in Seattle. (0 Effective July 1, 2003, all retail sales, leases and transfers of motor vehicles are subject to the additional sales tax of three - tenths of one percent (.003). The funds are used to finance transportation improvements. (d) Effective April 1, 2007, King County increased the local sales & use tax rate one -tenth of one percent (.001). The tax will be used for transportation purposes. (e) Effective April 1, 2008, King County increased the local sales & use tax rate one -tenth of one percent (.001). The fax will be used for chemical dependency or mental health treatment services. Source: Washington State Department of Revenue Local Sales and Use Tax Rates. 130 CITY OF TUKWILA: 2009 CAFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 12 RATIOS OF OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS 1 2000 2001 20020) 2003 2004 2005 2006 2007 2008 2009 GOVERNMENTAL ACTIVITIES General Obligation Bonds $ 17,226,600 $ 16,565,000 $ 15,847,000 $ 21,628,591 $ 20,806,553 $ 19,775,262 $ 18,881,798 $ 17,946,335 $ 17,261,348 $ 22,453,003 Special Assessments - - - - - - - - - - Total Governmental Activities 17,226,600 16,565,000 15,847,000 21,628,591 20,806,553 19,775,262 18,881,798 17,946,335 17,261,348 22,453,003 BUSINESS -TYPE ACTIVITIES General Obligation Bonds 5,772,500 5,382,500 4,972,500 4,547,500 4,102,500 3,642,500 3,423,797 Revenue Bonds 5,448,000 5,015,000 4,568,782 4,168,910 3,710,438 3,143,360 5,824,452 5,470,162 5,112,231 4,790,000 Public Works Trust Fund Loans 633,506 650,245 573,234 1,032,364 2,924,739 4,911,253 9,781,151 9,378,506 9,021,951 8,405,397 Leases - - - 108,818 77,947 45,587 11,666 - Compensated Absences - - 160,661 167,212 190,139 203,940 207,367 205,504 199,081 233,938 Total Business -Type Activities 6,081,506 5,665,245 5,302,677 11,140,986 12,207,816 13,339,871 20,438,417 19,202,259 17,987,429 16,853,132 TOTAL PRIMARY GOVB9NMEN11°I $ 23,308,106 $ 22,230,245 $ 21,149,677 $ 32,769,577 $ 33,014,369 $ 33,115,133 $ 39,320,215 $ 37,148,594 $ 35,248,777 $ 39,306,135 Population 1 0I 17,181 17,230 17,270 17,270 17,240 17,110 17,930 18,000 18,080 18,170 Per Capita Personal Income Io $ 44,418 $ 43,734 $ 44,153 $ 44,704 $ 49,533 $ 48,789 $ 52,655 $ 57,409 $ 58,141 "' Percentage of Personal Income 3.05% 2.95% 2.77% 4.24% 3.87% 3.97% 4.16% 3.59% 3.35% "" Debt Per Capita $ 1,357 $ 1,290 $ 1,225 $ 1,897 $ 1,915 $ 1,935 $ 2,193 $ 2,064 $ 1,950 $ 2,163 Notes: of For years 1999 through 2002, premiums and discounts were omitted on all bonds. 0) Details regarding the City's outstanding debt can be found in the Notes to the Financial Statements section. (c) Reference SCHEDULE 17, Demographic Statistics, for population and personal income data. "' Data not available at time of publication. Sources: Qty of Tukw ila Finance Dept., Department of Community Development, and Office of the City Clerk. $50,000,000 $40,000,000 $30,000,000 $20,000,000 $10,000,000 Total Debt 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 131 CITY OF TUKWILA: 2009 CAFR STATISTICAL SECTION SCHEDULE 13 RATIOS OF GENERAL BONDED DEBT OUTSTANDING LAST TEN FISCAL YEARS Debt Payable Ratio of Net Net from Bonded Debt Bonded Fiscal Gross Bonded Less Debt Enterprise Net Bonded to Assessed Debt per Year Population Assessed Value Debt Service Funds Revenues(a) Debt Value Capita 2000 17,181 $ 3,004,528,773 $ 17,226,600 $ 370,112 $ $ 16,856,488 0.56% $ 981 2001 17,230 3,344,045,742 16,565,000 410,844 16,154,156 0.48% 938 2002 17,270 3,489,704,657 15,847,000 389,322 15,457,678 0.44% 895 2003 17,270 3,384,090,709 27,168,000 809,012 5,772,500 20,586,488 0.61% 1,192 2004 17,240 3,441,123,525 25,974,000 1,107,362 5,382,500 19,484,138 0.57% 1,130 2005 17,110 3,610,558,767 24,713,000 1,305,239 4,972,500 18,435,261 0.51% 1,077 2006 17,930 3,947,933,512 25,648,290 1,075,347 4,547,500 20,025,443 0.51% 1,117 2007 18,000 4,450,243,674 24,421,474 1,233,234 4,102,500 19,085,740 0.43% 1,060 2008 18,080 5,175,709,975 23,125,007 1,250,275 3,642,500 18,232,231 0.35% 1,008 2009 18,170 4,973,984,133 25,876,800 135,438 3,423,797 22,317,565 0.45% 1,008 Note: (a) These amounts are the general obligation bonds that are being repaid by the Foster Golf Course Fund. Sources: State of Washington Office of Financial Management King County Department of Assessments Tukw ila Finance Department $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 $- Net Bonded Debt 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 132 CITY OF TUKWILA: 2009 CAFR STATISTICAL SECTION SCHEDULE 14 COMPUTATION OF DIRECT AND OVERLAPPING DEBT AS OF DECEMBER 31, 2009 Jurisdiction Net General Percentage Estimated Obligation Debt Applicable to Applicable to Outstanding Tukw ila Tukw ila Direct: City of Tukwila $ 28,529,931 100.00% $ 28,529,931 Overlapping: King County King County Library Port of Seattle Tukw ila School District #406 Hospital District #1 Total Overlapping Debt: 1,018,882,000 129,221,246 357,315,000 30,692,399 39,455,000 1,575,565,645 Total Direct and Overlapping Debt: $ 1,604,095,576 Sources: King County Office of Finance King County Office of Assessments 100% 80% 60% 40% 20% O% City of Tukwila 1.46% 2.41% 1.46% 89.84% 5.19% Direct and Overlapping Debt King County 14,875,677 3,114, 232 5,216,799 27,574,051 2,047,715 52,828,474 $ 81,358,405 King County Library ■ Portof Seattle ■ Tukwila School District • Hospital District 133 CITY OF TUKWILA: 2009 CAFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON LEGAL DEBT MARGIN INFORMATION SCHEDULE 15 Legal Debt Margin Calculation for Fiscal Year 2009 Description MIL Councilmanic General Excess Levy Excess Levy Total Debt Voted Purpose Utility Open Space Debt (Non - Voted) Debt Indebtedness Purposes and Park Capacity Assessed Value Statutory Debt Limit Debt Applicable to Lint: Bonds Outstanding Compensated Absences Less: Cash -on -Hand for Debt Redemption Current Taxes Receivable $ 4,973,984,133 $ 4,973,984,133 $ 4,973,984,133 $ 4,973,984,133 $ 4,973,984,133 $ 4,973,984,133 1.50% 1.00% 2.50% 2.50% 2.50% 7.50% $ 74,609,762 $ F 49,739,841 $ 124,349,603 $ 124,349,603 $ 124,349,603 $ 373,048,810 $ 25,876,800 $ - $ 25,876,800 $ $ - $ 25,876,800 2,653,131 2,653,131 - 2,653,131 (136,820) (136,820) - (136,820) 374,831 374,831 - 374,831 28,291,920 28,291,920 - - 28,291,920 Remaining Debt Capacity $ 46,317,842 $ 49,739,841 $ 96,057,684 $ 124,349,603 $ 124,349,603 $ 344,756,890 Source: Tukw ila Finance Department Legal Debt Margin Calculation for Last Ten Years Total Net Debt Applicable to Lint Total Net Debt as a Percentage Debt Limit Applicable to Limit Legal Debt Margin of Debt Limit 2000 $ 225,339,657 $ 16,856,488 $ 208,483,169 7.48% 2001 250,803,432 16,154,156 234,649,276 6.44% 2002 261,727,848 15,457,678 246,270,170 5.91% 2003 253,806,804 26,358,988 227,447,816 10.39% 2004 258,084,264 24,866,638 233,217,626 9.64% 2005 270,791,907 23,407,761 247,384,146 8.64% 2006 296,095,014 24,494,996 271,600,018 8.30% 2007 333,768,277 23,188,240 310,580,037 6.95% 2008 388,178,248 21,881,765 366,296,483 5.64% 2009 373,048,810 28,291,920 344,756,890 7.58% 134 CITY OF TUKWILA: 2009 CAFR STATISTICAL SECTION 135 CITY OF TUKWILA: 2009 CAFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 16 REVENUE BOND COVERAGE - WATER AND SEWER BONDS LAST TEN FISCAL YEARS Net Revenue Fiscal Gross Operating Available for Debt Average Annual Debt Service Requirements Times Year Revenueea) Expenses(b) Service Principal Interest Total Coverageee) 2000 $ 7,302,200 $ 5,057,117 $ 2,245,083 $ 366,563 $ 158,276 $ 524,839 4.28 2001 6,944,496 5,143,551 1,800,945 363,200 148,711 511,911 3.52 2002 7,332,495 5,808,561 1,523,934 358,214 139,047 497,261 3.06 2003 7,501,583 5,784,330 1,717,253 352,692 129,354 482,046 3.56 2004 7,929,374 5,876,411 2,052,963 345,000 119,647 464,647 4.42 2005 8,023,334 6,161,436 1,861,898 334,091 110,015 444,106 4.19 2006 8,237,636 6,418,607 1,819,029 285,162 116,973 402,135 4.52 2007 9,012,898 6,774,625 2,238,273 273,920 113,819 387,739 5.77 2008 9,487,981 6,099,295 3,388,686 271,337 105,850 377,187 8.98 2009 10,527,758 8,384,852 2,142,906 267,144 97,348 364,492 5.88 Notes: (a) Includes operating and non - operating revenue. (b) Includes operating expenses and non - operating expenses exclusive of depreciation, amortization and interest charges. (c) Bond financing requirements are that the average annual coverage is at least 1.25 times the average annual debt service for Water and Sewer revenue bonds. Sources: Tukw ila Finance Department 10.00 8.00 Coverage Ratio 6.00 4.00 2.00 Water and Sewer Revenue Bonds 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 136 CITY OF TUKWILA: 2009 CAFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 16A REVENUE BOND COVERAGE - SURFACE WATER BONDS LAST FOUR FISCAL YEARS Net Revenue Fiscal Gross Operating Available for Debt Year Revenuee) Expenses(b) Service Average Annual Debt Service Requirements Principal Interest Total Times Coverage) 2006 $3,505,231 $ 1,185,799 $ 2,319,432 $18,171 $9,501 $27,672 2007 2,399,357 1,335,256 1,064,101 19,080 9,976 29,056 2008 2,888,306 1,133,871 1,754,435 19,453 9,614 29,067 2009 2,856,795 1,670,601 1,186,194 19,800 9,263 29,063 83.82 36.62 60.36 40.81 Notes: (a) Includes operating and non - operating revenue. (b) Includes operating expenses and non - operating expenses exclusive of depreciation, amortization and interest charges. (c) Bond financing requirements are that the average annual coverage is at least 1.25 times the average annual debt service for Surface Water revenue bonds. No revenue bond coverage for surface water bonds prior to 2006. Source: Tukw ila Finance Department 100.00 80.00 Coverage 60.00 Ratio 40.00 20.00 Surface Water Revenue Bonds 2006 2007 2008 2009 137 CITY OF TUKWILA: 2009 CAFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 17 DEMOGRAPHIC STATISTICS LAST TEN FISCAL YEARS Per Capita Number of Number of Tukw ila School Fiscal Personal Personal Single - Family Multi - Family District Unemployment Year Population Income (a) Income (b) Homes Units Enrollment Rate (e) 2000 17,181 $ 44,418 $ 763,146 3,364 4,196 2,562 2001 17,230 43,734 753,537 3,371 4,196 2,410 2002 17,270 44,153 762,522 3,433 4,196 2,474 2003 17,270 44,704 772,038 3,468 4,196 2,568 2004 17,240 49,533 853,949 3,732 4,107 2,628 2005 17,110 48,789 834,780 3,791 4,107 2,650 2006 17,930 52,655 944,104 3,838 4,107 2,698 2007 18,000 57,409 1,033,362 3,864 4,107 2,862 2008 18,080 58,141 1,051,189 3,884 4,107 2,769 2009 18,170 * ** * ** 3,885 4,107 2,795 5.5% 6.9% 8.3% 8.4% 7.0% 6.4% 5.7% 5.0% 5.9% 10.9% Notes: (a) Per Capita Personal Income data shown is for King County. Specific data for City of Tukwila is not available. (b) Personal Income estimates are calculated by multiplying Tukwila population by the Per Capita Personal Income estimates for Tukwila and are based on a revised methodology that provides for more accuracy. See also Footnote (a). (c) Unemployment rates are listed and estimated using the census -share method. * ** Data not available at time of publication. Sources: Tukw ila Planning Division, Department of Community Development State of Washington Office of Financial Management Washington State Employment Security Department Tukw ila School District #406 US Bureau of Econonic Analysis 12.0% 10.0% 8.0% 6.0% - 4.0% 2.0% 0.0% Unemployment Rate 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 138 CITY OF TUKWILA: 2009 CAFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 18 PRINCIPAL EMPLOYERS CURRENT YEAR AND NINE YEARS AGO Name of Company /Employer R-oduct or Business 2009 Full & Percentage of Part -Time Total City Employment Employees 2000 Full & Part -time Employment Percentage of Total City Employees Boeing Company Group Health Cooperative King County Metro Macy's Carlisle Interconnect Technolgoies Costco Wholesale Nordstrom, Inc. United Parcel Service Boeing Employees Credit Union City of Tukw ila Airplane company Data Ctr/Lab/Fharmacy/Mfg. Transit operating base Department Store Wire /Cable Connectors Cash /carry Warehouse Department Store Postal Delivery Service Banking /Credit Union Government 7,846 1,984 825 586 570 546 537 525 425 407 18.54% 4.69% 1.95% 1.38% 1.35% 1.29% 1.27% 1.24% 1.00% 0.96% 9,769 879 700 490 180 380 416 444 561 309 Sub -total - Major Employers 14,251 14,128 All Other Employment TOTAL EMPLOYMENT 28,078 30,243 42,329 44,371 Source: Tukw ila City Clerk's Office - Business Licenses 139 22.02% 1.98% 1.58% 1.10% 0.41% 0.86% 0.94% 1.00% 1.26% 0.70% CITY OF TUKWILA: 2009 CAFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 19 STAFFING LEVELS BY DEPARTMENT LAST TEN FISCAL YEARS 2000 2001 2002 2003 2004 2005 2006 1 2007 2008 2009 DEPARTM ENT Administrative Services (a) 23.25 22.25 21.75 21.75 21.75 22.75 23.75 26.75 19.75 Council 7.00 7.00 7.00 7.00 7.00 7.00 7.00 7.00 7.00 7.00 Mayor (b) 9.00 9.50 10.50 9.50 11.50 11.00 11.00 12.00 11.00 16.00 Human Resources (a) - - - - - 4.00 Finance 11.00 12.00 12.00 12.00 13.00 12.00 11.00 11.00 12.00 12.00 Recreation 23.00 23.75 17.75 20.50 20.25 22.00 22.50 23.50 23.50 22.50 Community Development 19.75 21.25 19.88 20.88 19.88 20.88 20.88 20.25 24.25 24.25 Court (a) - 9.75 Police 88.50 85.50 86.50 81.50 78.00 81.00 83.00 80.00 83.00 82.00 Fire 64.00 63.00 64.00 64.00 63.00 67.00 65.00 66.00 64.00 63.00 Information Technology (a) - - - - - 7.00 8.00 Public Works 32.00 34.00 37.00 35.00 35.00 35.00 34.00 32.00 33.00 32.00 Parks 6.50 8.50 8.50 9.50 9.50 10.50 10.25 7.50 7.50 7.50 Street 8.00 9.00 9.00 10.00 11.00 11.00 10.00 11.00 12.00 12.00 Water 6.00 6.00 6.00 5.00 5.00 6.00 7.00 7.00 7.00 7.00 Sewer 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 2.00 2.00 Golf 9.50 9.50 9.50 9.50 9.50 9.50 9.25 9.25 9.75 9.75 Surface Water 5.00 6.00 5.00 5.00 5.00 7.00 7.00 7.00 8.00 8.00 Equipment Rental 4.00 4.00 4.00 4.00 4.00 4.00 5.00 4.00 5.00 5.00 319.50 324.25 321.38 318.13 316.38 329.63 329.63 327.25 335.75 331.75 Notes: Based on filled positions not budgeted positions. (e) The departments for Human Resources, Court, City Clerk and Information Technology were previously reported under Administrative Services. (5) The department of City Clerk began reporting to the Mayor's department in 2009. Sources: Tukw ila Finance Department Equipment Rental Council Surface Water Human Resources (a) Water Street Parks Public Works Infor Whnology (a) Fire Police Community Development 140 Court(a) 1 • Council • Mayor (b) • Human Resources (a) • Finance • Recreation • Community Development ■ Court(a) • Police • Fire • Information Technology (a) • Public Works • Parks • Street • Water • Sewer ■ Golf • Surface Water • Equipment Rental CITY OF TUKWILA: 2009 CAFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 20 OPERATING INDICATORS BY FUNCTION LAST TEN FISCAL YEARS 2000 2001 2002 2003 2005 2006 2007 2008 2009 FUNCTION Police Number of Calls for Service 31,189 30,671 30,106 31,000 30,032 32,922 33,686 33,985 35,816 33,095 Fire Number of Responses 4,395 3,865 4,100 4,250 4,229 4,710 4,921 4,673 4,824 4,654 Total Fire Loss $ 1,328,726 $ 1,995,850 $ 485,765 $ 910,655 $ 910,655 $ 1,414,741 $ 2,982,265 $ 3,065,005 $ 2,300,685 $ 1,934,596 Total Inspections 6,197 5,866 4,516 5,549 5,855 5,482 4,705 4,845 6,787 6,787 Parks and Recreation Class Participants 50,300 60,000 61,000 61,000 64,000 64,000 64,000 98,087 109,273 103,603 Community Ctr Admissions 47,300 43,600 35,500 30,800 35,150 33,750 34,850 90,141 117,533 134,183 Rounds of Golf Flayed 66,317 60,311 57,490 cal 35,764 53,070 54,449 55,195 55,446 53,565 53,800 Pool Attendance ** ** ** 42,917 59,996 72,778 72,963 57,624 59,077 80,727 Street Niles 77 77 77 79 79 79 79 79 79 79 Hours Maintaining * * 13,425 14,587 13,706 15,243 16,970 17,540 19,840 22,140 Signalized Intersections 59 59 59 61 61 61 61 63 63 59 Hours Maintaining * 6,388 6,855 6,445 9,054 7,642 7,540 7,540 6,700 Water Utility Services Total Customers 2,012 2,027 2,027 2,079 2,107 2,164 2,117 2,113 2,109 2,112 Total Galons/Water(in thousands) 771,149 693,116 683,065 702,364 765,000 886,000 789,981 680,649 660,915 731,469 Sanitary Sewer Total Customers 1,586 1,622 1,622 1,671 1,698 1,710 1,720 1,718 1,684 1,694 Surface Water Total Customers 4,989 5,019 5,019 5,015 5,064 5,100 5,107 5,156 5,164 5.204 Licenses Business Licenses 2,205 2,159 2,160 2,262 2,292 2,286 2,354 2,350 2,523 2,422 Amusement Licenses 19 18 18 22 22 19 21 22 22 24 Permits Building Perrrits 452 415 401 353 364 430 422 425 423 265 Mechanical Permits 273 218 238 183 182 193 239 238 256 159 Electrical Permits N/A WA N/A NIA NSA N/A N/A 758 1,533 821 Plumbing Permits N/A WA N/A N/A N/A N/A 192 306 264 145 Public Works Permits 161 134 114 83 97 112 144 136 154 131 Libraries Number of Libraries 2 2 2 2 3 3 3 3 3 3 Total Circulation 135,276 140,680 143,150 121,468 215,115 215,115 320,794 306,001 303,665 318,991 Notes: (*) Construction of new clubhouse completed and opened in 2003. * Information not available. ** Pool facilities acquired from King County in 2003. Sources: Tukwila Departments, King County Library System 141 CITY OF TUKWILA: 2009 CAFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 21 CAPITAL ASSETS BY FUNCTION LAST TEN FISCAL YEARS 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 FUNCTION General Government Total City Area (Square Miles) Public Safety Police: Number of Vehicle Units 8.6 8.6 8.6 8.6 8.6 8.6 8.6 8.6 8.6 9.63 63 57 63 59 63 64 64 64 67 70 Fire: Number of Fire Stations 4 4 4 4 4 4 4 4 4 4 Number of Engines /Rescue Trucks /Ladders 8 8 8 8 8 8 9 9 9 9 Number of Medical Aid Vehicles 2 2 2 2 2 2 2 2 2 2 Number of Hazardous Materials Trailer Units N/A WA N/A N/A N/A 1 1 2 2 2 Transportation Paved Streets (lane miles) 163 163 163 163 163 163 163 163 163 178 Sidewalks (riles) 54 54 54 54 54 54 54 54 54 56 Number of Traffic Signals 55 55 55 55 55 55 55 57 57 59 Number of Streetlights Owned by Seattle City Light 1,180 1,180 1,180 1,180 1,180 1,180 1,180 1,180 1,180 1,180 Number of Streetlights Owned by Puget Sound Energy 670 670 670 670 670 670 670 670 670 696 Culture and Recreation Parks Acreage 0) 136 140 143 158 158 158 161 160 162 162 Number of Parks 11 12 13 15 15 15 16 18 18 18 Golf Course Acreage 67 67 67 67 67 67 67 67 67 67 Maintained Trails (miles) 11 11 11 11 11 11 11 11 11 15 Number of Playgrounds 11 11 11 13 13 13 13 13 13 11 Swimming Pool WA N/A N/A 1 1 1 1 1 1 1 Visitor Center 1 1 1 1 1 1 1 1 1 1 Community Center /Recreation Facilities 1 1 1 1 1 1 1 1 1 1 Number of Libraries 2 2 2 2 3 3 3 3 3 3 Water Water Distribution Mains (miles) 45 45 45 45 45 45 45 47.4 47.4 40.8 Maximum Daily Capacity (millions of gallons) 10 10 10 10 10 10 10 10 10 10 Number of Fire Hydrants (Owned by City of Tukwila) 499 509 509 513 527 533 537 555 572 541 Vehicles 4 6 6 7 6 7 7 8 8 8 Sewer Sanitary Sewers (miles) 33 33 33 33 33 33 33 36.9 36.9 37.4 Maximum Daily Treatment Capacity (millions of gallons) 6.33 6.33 6.33 6.33 6.33 6.33 6.33 6.33 6.33 6.33 Vehicles 8 3 3 3 3 3 5 5 6 6 Surface Water Storm Drains (miles) b) 56 57 57 58 59 60 62 67 67 68.75 Vehicles 6 4 4 4 5 5 4 4 4 4 Notes: () Reflects the correct reporting of data for Culture and Recreation - Parks Acreage for the years 1998 through 2006. Parks acreage previously reported included golf course acreage. (b) Reflects the correct reporting of data for Surface Water - Storm Drains (miles) for the years 1998 through 2006. Miles previously reported were incorrect data estimates. Sources: Various Departmnets-Tukw ila 142