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HomeMy WebLinkAbout2008 Comprehensive Annual Financial Report (CAFR)The City of Tukwila, Washington COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended December 31, 2008 Prepared by the City of Tukwila, Finance Department Shawn Hunstock, Finance Director JIM HAGGERTON, MAYOR TUKWILA CITY COUNCIL Joan Hernandez, President Joe Duffle Pam Linder Dennis Robertson Verna Griffin Kathy Hougardy De' Sean Quinn CITY OF TUKWILA: 2008 CAFR TABLE OF CONTENTS COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended December 31, 2008 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 80 Retiree Medical and Long -Term Care Benefits for LEOFF I Employees 80 Notes to the Required Supplementary Information 81 Combining and Individual Fund Financial Statements and Schedules: Combining Balance Sheet — Non -Major Governmental Funds 84 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances — Non -Major Governmental Funds 85 Combining Balance Sheet — Non -Major Special Revenue Funds 88 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances — Non -Major Special Revenue Funds 89 Schedules of Revenues, Expenditures, and Changes in Fund Balances — Budget and Actual: Hotel /Motel Tax Fund 90 Street Fund 91 CITY OF TUKWILA: 2008 CAFR TABLE OF CONTENTS Schedules of Revenues, Expenditures, and Changes in Fund Balances — Budget and Actual: (continued) Page Contingency Fund 92 Fire Equipment Cumulative Reserve Fund 93 Combining Balance Sheet — Non -Major Debt Service Funds 96 Combining Statement of Revenues, Expenditures, and Changes in Fund Balance — Non -Major Debt Service Funds 97 Combining Balance Sheet — Non -Major Capital Project Funds 100 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances — Non -Major Capital Project Funds 101 Combining Statements of Net Assets — Internal Service Funds 104 Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets — Internal Service Funds 105 Combining Statement of Cash Flows — Internal Service Funds 106 III. STATISTICAL SECTION Schedule Net Assets by Component 1 110 Changes in Net Assets 2 111 Fund Balances, Governmental Funds 3 112 Changes in Fund Balances of Governmental Funds 4 114 General Government Tax Revenues by Source 5 116 Property Tax Levies and Collections 6 117 Assessed and Estimated Actual Value of Taxable Property 7 118 Property Tax Rates — Direct and Overlapping Governments 8 119 Principal Property Taxpayers 9 120 Retail Sales Tax Collections by Sector 10 121 Sales Tax Rate Direct and Overlapping Governments 11 122 Ratios of Outstanding Debt by Type 12 123 Ratios of General Bonded Debt Outstanding 13 124 Computation of Direct and Overlapping Debt 14 125 Legal Debt Margin Information 15 126 Revenue Bond Coverage — Water and Sewer Bonds 16 127 Demographic Statistics 17 128 Principal Employers 18 129 Full -Time Equivalent City Government Employees by Function 19 130 Operating Indicators by Function 20 131 Capital Assets by Function 21 132 ii CITY OF TUKWILA: 2008 CAFR ADMINISTRATIVE ORGANIZATIONAL STRUCTURE, PRINCIPAL OFFICIALS ADMINISTRATIVE ORGANIZATIONAL STRUCTURE AND PRINCIPAL OFFICIALS 1• MUNICIPAL COURT Kimberly Walden 1 CITIZENS OF TUKWILA MAYOR Jim Haggerton CITY ADMINISTRATOR Rhonda Berry J CITY COUNCIL CITY ATTORNEY Kenyon Disend, PLLC FINANCE Shawn Hunstock INFORMATION TECHNOLOGY Mary Miotke ADMINISTRATIVE, SERVICES Viki Jessop COMMUNITY DEVELOPMENT Jack Pace J PARKS AND RECREATION Bruce Fletcher FIRE Nick Olivas r 1 PUBLIC WORKS Jim Morrow POLICE David Haynes / J COUNCIL COMMITTEES FINANCE AND SAFETY COMMITTEE Pam Linder, Chairperson Joe Duffie, Member De'Sean Quinn, Member COMMUNITY AFFAIRS AND PARKS Verna Griffin, Chairperson Joe Duffie, Member Kathy Hougardy, Member 1 TRANSPORTATION De'Sean Quinn, Chairperson Dennis Robertson, Member Verna Griffin, Member UTILITIES Kathy Hougardy, Chairperson Pam Linder, Member Dennis Robertson, Member CITY OF TUKWILA: 2008 CAFR ADMINISTRATIVE ORGANIZATIONAL STRUCTURE PRINCIPAL OFFICIALS 2 City of Tukwila 6200 Southcenter Blvd, Tukwila, WA 98188 Jim Haggerton, Mayor July 31, 2009 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 2008 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, 2008. 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 all 3 CITY OF TUKWILA: 2008 CAFR LETTER OF TRANSMITTAL significant information necessary for an understanding of the affairs and financial condition of the City has been disclosed. 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 protect the City's assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the City's financial statements in conformity with GAAP. Because the cost of internal controls should not outweigh the benefits, the City's internal control structure is designed to provide reasonable, rather than absolute, assurance that the financial statements will be free from material misstatement. 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 U.S. Office of Management and Budget Circular A -133, Audits of State and Local Governments. The audit is conducted by the State Auditor's Office in conjunction with the City's annual independent audit. The results of the City's annual single audit for the fiscal year ended December 31, 2008 provided no instances of material weaknesses in the internal control structure or significant violations of applicable laws. GAAP requires 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. 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 2007 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. The data presented in this section complies with the requirements of GASB Statement No. 44, Economic Condition Reporting: The Statistical Section. CITY OF TUKWILA: 2008 CAFR LETTER OF TRANSMITTAL 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 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 18,080; 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 light 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 $17.8 million in revenue for 2008. The total combined retail sales activity amounted to approximately $2.09 billion in 2008. At the center of this strength 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: 2008 CAFR LETTER OF TRANSMITTAL This diversified revenue base is further supported by an assessed valuation of $5.18 billion as well as our above - mentioned sales tax base, and has allowed the City to pursue an aggressive capital improvement 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 Westfield Southcenter Shopping Center completed a major expansion of the mall during 2008. This, along with other development south of the mall, as well as development of the Tukwila Village site on Tukwila International Boulevard, will insure continued growth in the City's economic base for years to come. 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. III. FINANCIAL INFORMATION A. CASH MANAGEMENT The City invests in U.S. Treasury and Agency Issues, Prime Bankers Acceptances, Time Deposits, and Repurchase Agreements. Investment policies and procedures, established by the Mayor and adopted by the City Council, require the City to establish a trustee to take delivery of all investment transactions at time of payment. The City has contracted with U.S. Bank N.A. to provide delivery versus payment trustee services on all government agency investments. The State of Washington maintains an investment pool to provide economies of scale in investing to smaller- and medium - sized cities in the State. The City uses this service for all funds not invested in longer - term securities. The pool operates under the same legal restrictions that apply to all municipalities in the State and, consequently, uses the same instruments as listed above. CITY OF TUKWILA: 2008 CAFR LETTER OF TRANSMITTAL The City has adopted a comprehensive investment policy statement to guide City investment practices. These policies are closely patterned after the recommendations in Investing Public Funds published by the Government Finance Officer's Association (GFOA). Investments are restricted to less than three years in order to maintain liquidity on all investments in all funds, yet enable the City to take advantage of the yield curve. Fiduciary funds, which involve long -term reserves and require minimal liquidity, are invested for longer time periods. The City undertakes repurchase agreements only with financial institutions that offer the City full protection in the event of default, by providing the delivery of the underlying security to the City. B. RISK MANAGEMENT 1. Types and Level of Risk Assumed It is the City's policy to self- insure for unemployment benefits as well as medical and dental costs. All buildings, equipment, and vehicles are insured by carriers for coverage at replacement value. The City is a member of the Washington Cities Insurance Authority (WCIA) as of January 1, 1984. The WCIA is a municipal corporation and not a joint venture per the Washington State Auditor's Office. The pooling arrangement with over 100 other entities provides the City's general liability, vehicle liability, false arrest, and errors and omissions coverage (see Note 15 for a more expansive discussion). 2. Risk Control Policies The Washington Cities Insurance Authority not only provides a sharing of risk by pooling of losses, it also provides an extensive array of professional services in risk management. The pool monitors the City's management practices and damage claims. The City follows the guidelines provided by the pool in an effort to minimize risk exposure in the day -to -day operations of the City's programs. The City also maintains an extensive employee safety program managed by the Human Resources department. IV. 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 2008 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 2008. 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. CITY OF TUKWILA: 2008 CAFR LETTER OF TRANSMITTAL 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, 2007. This was the 21st 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, 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 2008 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, >dLio,_4444 Shawn Hunstock, CPA Finance Director CITY OF TUKWILA: 2008 CAFR LETTER OF TRANSMITTAL Certificate of Achievement f ©r Excellence in Financial Reporting Presented to City of Tukwila Washington For its Comprehensive Annual Financial Report for the Fiscal Year Ended December 31, 2007 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: 2008 CAFR LETTER OF TRANSMITTAL Washington State .Auditor Brian Sonntag INDEPENDENT AUDITOR'S REPORT July 31, 2009 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, 2008, 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, 2008, 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_ As described in Note 1, during the year ended December 31, 2008, the City implemented the Governmental Accounting Standards Board's Statement 45, Accounting and Financial Reporting by Employers for Posfernpioynent Benefits Otter Than Pensions and Statement 50. Pension Disclosures - an amendment of GASB Statements No. 25 and No, 27, ,.,..+mom Building, PO Box 401)21.Olympia, Wasiriiig1on 0g504-0021 • (36a) 902 -0370 • TDD Relay (R0), 833.638 FAX 060) 753-0646 .1iLtp:/.4,, w..skro.wd_go, In accordance with Government Auditing Standards, we will also issue our report dated July 31, 2008, on our consideration of the City's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations. contracts, and grant agreements and other matters_ The purpose of that report is to describe the scope cif our testing of internal 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 27, pension trust fund information and Information on posternployment benefits other than pensions on pages 80 through 81 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 84 through 107 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 Gity. 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, CGF1114 STATE AUDITOR 12 CITY OF TUKWILA: 2008 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS MANAGEMENT'S DISCUSSION AND ANALYSIS For the Year Ended December 31, 2008 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, 2008. 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 $224.8 million. A total of 77 percent or $172.8 million of total net assets is invested in capital assets such as streets, land, buildings, equipment, and other improvements. The remaining net assets of $52.0 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 $4.2 million in 2008. Governmental activities provided $2.1 million or 50.9 percent with the remainder being provided by the business -type activities. • As of the close of the current fiscal year, the City of Tukwila's governmental funds reported combined ending fund balances of $28,729,337 a decrease of $1,969,815 in comparison with the prior year. • At the end of the current fiscal year, unreserved fund balance for the general fund was $7,687,515, or 17.7 percent of total general fund expenditures. • The City of Tukwila's total debt decreased by $2,097,016 (5.3 percent) during the current fiscal year. The key factor in this net decrease was due to principal repayment. 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: 1) Government -wide financial statements 2) Fund financial statements 3) Notes to the financial statements 13 CITY OF TUKWILA: 2008 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS 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 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 14 CITY OF TUKWILA: 2008 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS 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 fourteen individual governmental funds. Of these, two are considered major (the general fund, the arterial street 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 one fiduciary fund: a firemen's pension trust fund, which is accounted for on the accrual basis. 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. 15 CITY OF TUKWILA: 2008 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS 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 $224,786,090 at December 31, 2008. The largest portion of the City's net assets, $172.8 million, or 77 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 12/31/08 As of 12/31/07 As of 12/31/08 As of 12/31/07 As of 12/31/08 As of 12/31/07 Current and other assets $ 42,781,792 $ 42,770,035 $ 14,491,597 $ 12,800,899 $ 57,273,389 $ 55,570,934 Capital assets, net of accumulated depreciation 156,538,853 153,921,280 53,906,634 54,755,424 210,445,487 208,676,704 Total assets 199,320,645 196,691,315 68,398,231 67,556,323 267,718,876 264,247,638 Long -term liabilities Other liabilities Total liabilities 19,424,007 20,297,222 16,898,070 18,364,509 36,322,077 38,661,731 4,956,887 3,587,165 1,653,823 1,399,598 6,610,710 4,986,763 24,380,894 23,884,387 18,551,893 19,764,107 42,932,787 43,648,494 Net assets Invested in capital assets, net of related debt 136,742,368 136,053,013 36,071,402 36,083,972 172,813,770 172,136,985 Restricted 19,720,546 19,203,908 439,100 441,074 20,159,646 19,644,982 Unrestricted 18,476,837 17,550,007 13,335,836 11,267,171 31,812,673 28,817,178 Total net assets $ 174,939,751 $ 172,806,928 $ 49,846,338 $ 47,792,217 $ 224,786,089 $ 220,599,145 The largest component of unrestricted net assets, $18.4 million, represents the unrestricted net assets of the City's general fund 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, $13.3 million, may only be spent on activities related to one of the three City utilities (water, sewer, and surface water). Examples of utility activities include maintenance of water /sewer mains, pump and lift stations, storm drain flushing, and water meter reading. Restricted governmental fund net assets are $19.7 million and are subject to constitutional, legal or external restrictions for purposes such as capital project construction and debt service. 16 CITY OF TUKWILA: 2008 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS The increase in current and other assets for business -type activities is comprised of an increase of $1,575,272 in cash and investments, an increase of $279,875 in notes receivable, and a decrease of $200,427 in customer accounts receivable. The increase in other liabilities for governmental activities is comprised of an increase in accounts payable of $110,141, an increase in accrued wages and benefits payable of $171,692, and an increase in compensated absences of $184,249. The increase in other liabilities for business -type activities is comprised of an increase of $233,703 in current portion of revenue bonds payable, and an increase of $78,301 in customer deposits. The increase of $2,068,665 in unrestricted net assets for business -type activities relates to an increase in profitability for the enterprise funds and a corresponding increase in cash and investments. 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: 2008 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS City of Tukwila's Changes in Net Assets Governmental Activities Business -type Activities Total 2008 2007 2008 2007 2008 2007 Revenues: Program revenues Charges for services $ 5,400,376 $ 5,271,753 $ 12,827,915 $ 11,753,622 $ 18,228,291 $ 17,025,375 Operating grants and contributions 1,325,163 1,692,766 - - 1,325,163 1,692,766 Capital grants and contributions 2,282,592 3,746,743 756,400 347,416 3,038,992 4,094,159 General revenues Property taxes 11,656,979 11,302,099 11,656,979 11,302,099 Sales taxes 18,596,512 19,939,101 500,000 500,000 19,096,512 20,439,101 Natural gas use tax 643,037 344,748 643,037 344,748 Utility taxes 5,136,444 5,496,781 5,136,444 5,496,781 Business taxes 2,497,705 2,236,675 - - 2,497,705 2,236,675 Excise taxes 983,078 2,296,658 - - 983,078 2,296,658 State entitlements 874,046 217,600 874,046 217,600 Investment earnings 801,847 1,727,879 377,954 618,563 1,179,801 2,346,442 Gain /(loss) on sale of capital assets (186,663) 13,652 - - (186,663) 13,652 Total revenues 50,011,116 54,286,455 14,462,269 13,219,601 64,473,385 67,506,056 Expenses: General government 4,723,103 7,456,335 - - 4,723,103 7,456,335 Public safety 24,147,992 21,726,932 - - 24,147,992 21,726,932 Physical environment 2,862,487 2,764,373 - 2,862,487 2,764,373 Transportation 5,864,297 5,310,247 - - 5,864,297 5,310,247 Economic environment 5,017,935 3,890,845 - - 5,017,935 3,890,845 Mental and physical health 4,173 4,204 4,173 4,204 Culture and recreation 4,797,856 4,506,223 4,797,856 4,506,223 Interest on long -term debt 1,844,224 896,214 1,844,224 896,214 Water /sewer - - 7,293,362 7,046,602 7,293,362 7,046,602 Foster golf course 1,968,595 1,849,541 1,968,595 1,849,541 Surface water 1,762,417 1,920,194 1,762,417 1,920,194 Total expenses 49,262,067 46,555,373 11,024,374 10,816,337 60,286,441 57,371,710 Increase in net assets before transfers 749,049 7,731,082 3,437,895 2,403,264 4,186,944 10,134,346 Transfers 1,383,774 1,134,683 (1,383,774) (1,134,683) Change in net assets 2,132,823 8,865,765 2,054,121 1,268,581 4,186,944 10,134,346 Net assets - beginning of period 172,806,928 163,941,163 47,792,217 46,523,636 220,599,145 210,464,799 Net assets -end of period $ 174,939,751 $ 172,806,928 $ 49,846,338 $ 47,792,217 $ 224,786,089 $ 220,599,145 Governmental activities contributed $2.1 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. This amount equaled $6.1 million, which was offset by an overall increase in the cost and variety of governmental services provided as well as a general decline in City revenue. General tax revenue declined during 2008: • Property tax revenue rose by $354,880, or 3.1%. This increase is higher than the statutory maximum of 1%, and is due to taxes collected on construction completed during 2007, as well as an increase in overall assessed value for property within the City. • Sales tax collections decreased by $1,342,589, or 6.7 %. 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. • Utility taxes declined by $360,337 or 6.6 %. 18 CITY OF TUKWILA: 2008 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS • Excise taxes decreased by $1,313,580, or 57.2 %. The decline is due to decreased collection of Real Estate Excise Tax (REET) revenue, related to a general decline in commercial and residential property sales, as well as a decline in leasehold excise tax collections. • Investment revenue decreased by $1,166,641, or 49.7 %. This was due to significant decreases in interest rates during 2008. Governmental activity expenses increased by $2.7 million, or 5.8 %. Public safety expenditures increased by $2.4 million, and most other governmental program expenditures increased from 2007. 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 expenditures are funded through general tax revenues. Revenues by Source - Government Activities Other taxePther revenue 8% 3% Utility taxes 10% Charges for services 11% Capital grants & contributions 3% Operating grants & contributions 5% Sales taxes 37% 19 Property taxes 23% CITY OF TUKWILA: 2008 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 $0 Program Revenues and Expenses - Governmental Activities 1 J ■ l rl c , e owe J���o cSQo �,`to a�e� ���� ae �e�e`a0 Q ``� re`�\e J`�`emo o�o\oe a�arJ� Q G 45) �r e ❑ Program revenues • Expenses Business -type net assets increased by $2.1 million during 2008. Key components of this increase include: • $756,400 of the increase relates to utility capital contributions related to infrastructure contributed to the City by developers. • Income before capital contributions and transfers amounted to: o Water /sewer fund: $ 1,561,204 o Foster golf course fund: 117,389 o Surface water fund: 1,002,903 $ 2,681,496 • Transfers -out totaled $1,383,774. 20 CITY OF TUKWILA: 2008 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 12% Surface water 38% 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 ❑ Spendable net assets •Total net assets $25,000,000 iilimiiiiiii _,II $20,000,000 $15,000,000 $10,000,000 $5,000,000 $0 0 Water /sewer Surface water 21 Foster golf course CITY OF TUKWILA: 2008 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS The following chart following depicts the revenues and expenses for business -type funds: $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 Business -type Activity Revenues and Expenses Before Capital Contributions and Transfers Water /sew er Surface water Foster golf course Financial Analysis of Governmental Funds o 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, 2008, the City's governmental funds had combined fund balances of $28,729,337 a decrease of $1,969,815 or 6.4 %. This decrease is related to: • General fund ($2,812,083) • Arterial street fund $1,852,402 • Capital improvement projects funds ($1,282,105) • Other governmental funds $271,971 Of the government funds' total fund balances, $28,711,537 is unreserved. Of this unreserved total, $6,831,634 is earmarked for capital projects, $12,943,487 is in special revenue funds and is earmarked for specific purposes, and $1,248,901 is in debt service funds dedicated for debt repayment. 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 2008, the general fund had a fund balance of $7,705,315, of which substantially all is unreserved. Other funds that had significant fund balances include: 22 CITY OF TUKWILA: 2008 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS • $10,406,546 in the arterial street special revenue fund; used for various transportation improvement projects. • $3,946,582 in the land acquisition, recreation and park development fund; used for acquisition, development and construction of park facilities. • $2,088,875 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 9% Capital project funds 24% Debt service funds 4% General fund 27% Arterial street fund 36% The decrease in the general fund balance of $2,812,083 can be attributed to budgeted use of fund balance for general government program expenses, totaling $1,878,061, in addition to a variance in sales tax revenue of $1,031,112 compared to budget. General fund operating expenditures increased by $4.3 million from 2007. The increase relates to overall salary and benefit cost increases including a $3.0 million increase in expenditures for public safety for general salary and staffing increases. 23 CITY OF TUKWILA: 2008 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS The general fund revenue decrease of $571,565 came from the following sources: $1,000,000 - $750,000 - $500,000 - $250,000 - $0 ($250,000) - ($500,000) - ($750,000) - ($1,000,000) - ($1,250,000) - ($1,500,000) - General Fund Revenue Increases / (Decreases) - By Source Charges for services $741,672 Taxes ($1,203,645) Intergovernmental $562,196 Fines and forfeitures ($6,197) Miscellaneous $33,983 Licenses and permits ($540,019) Investment earnings ($159,554) The increase of $1,852,402 in the arterial street fund is due to sales tax and REET receipts in excess of project expenditures. Other significant changes in fund balances include: • The fire equipment cumulative reserve fund increased by $304,400 due to transfers and revenue in excess of budgeted expenditures. • The facility replacement capital projects fund decreased by $676,264 due to sales tax and other revenue receipts in excess of capital outlays. 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 fiscal year, and then making adjustments as necessary via budget amendments throughout the next two years. Following is a summary of such budget amendments: 24 CITY OF TUKWILA: 2008 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS Budgeted general fund balances decreased for the following reasons: Transfer out to Equipment Rental fund for SWAT vehicle $ 160,000 Increase in General Government for non - capital expenditures 530,000 Decrease in Physical Environment for non - capital expenditures (100,000) Decrease in Economic Environment for non - capital expenditures (55,000) Decrease in Culture and Recreation for non - capital expenditures (51,000) Decrease in Capital Outlays (324,000) $ 160,000 The changes above related to capital expenditures are due to amounts previously budgeted as capital outlay that were below the City's capitalization threshold, as discussed in Note 1 to the financial statements. These amounts were moved to non - capital line items, such as minor equipment and tools, and supplies. Reasons for the significant variances in the general fund between the final budget and actual results include: • Sales tax revenue was $1,250,064 less than what was budgeted. This reflected a general decrease in economic activity in the City and the region in the second half of 2008. • Excise taxes were $221,234 less than budget, primarily due to a decline in gambling activity in 2008. • Licenses and permits were $342,150 less than budget due to a decline in construction and tenant improvement activity in 2008. • The City spent $366,884 more than budgeted for overtime. • Office and operating supply expenditures exceed budget by $171,983. • Professional services expenditures were $654,220 more than budgeted. 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, 2008 totaled $210.4 million (net of accumulated depreciation), an increase of $1.8 million from 2007. 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: • Various repair and overlay projects to the City's major arterials totaled $994,011. • The South 144th Project (42nd Ave. S. - Military Road) amounted to $2.765 million. • The Boeing Access Road /East Marginal Way Intersection Paving Project amounted to $593,246. • The Southcenter Blvd. Water Main Project amounted to $979,340. • Acquisition of land for Duwamish Gardens totaled $1.979 million. • Completion of Macadam Winter Garden totaled $407,602. • Completion of Water Spray Park amounted to $241,235. • Completion of Fort Dent Park Playground equipment totaled $175,221. 25 CITY OF TUKWILA: 2008 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS A summary of the City's net assets follows: Summary of Capital Assets (net of depreciation) Land Buildings Other Improvements Machinery and Equipment Infrastructure Construction in Progress Total Governmental Activities As of 12/31/08 As of 12/31/07 $ 38,918,823 $ 35,901,461 15, 018, 864 15, 495, 904 5,081,763 6,542,435 82,790,025 8,186, 944 $156,538,854 4,734,374 5,518,517 81,653,216 10,617,808 $153,921,280 Business -type Activities As of 12/31/08 As of 12/31/07 $ 1,907,416 $ 1,907,416 9,007,157 9,306,419 40,737,818 1,054,136 1,135,477 $ 53,842,004 39,984,101 1,182, 559 2,308,145 $ 54,688,641 Total As of 12/31/08 As of 12/31/07 $ 40,826,239 $ 37,808,877 24, 026, 021 24, 802, 323 45,819,581 7,596,571 82,790,025 9,322,421 $ 210,380,858 44,718,475 6,701,076 81,653,216 12,925,953 $ 208,609,921 More detailed information on capital assets is provided in note 6. Long -term Debt At the end of the current fiscal year, the City had total bonded debt outstanding of $25,678,000. Of this amount, $20,513,000 is general obligation bonds, and $5,165,000 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 Business -type Activities Total As of 12/31/08 As of 12/31/07 As of 12/31/08 As of 12/31/07 As of 12/31/08 As of 12/31/07 General obligation bonds $ 16,870,500 $ 17,922,500 $ 3,642,500 $ 4,102,500 $ 20,513,000 $ 22,025,000 Revenue bonds - - 5,165,000 5,525,000 5,165,000 5,525,000 $ 16,870,500 $ 17,922,500 $ 8,807,500 $ 9,627,500 $ 25,678,000 $ 27,550,000 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 Economic Factors $ 9,021,951 2,734,217 $ 11,756,168 The outlook for 2009 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: 26 CITY OF TUKWILA: 2008 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS • Southcenter Area — Near Interstate 405 and Interstate 5, between Westfield Southcenter Shopping Center and the Sounder commuter rail station. This major rezone will allow multi- family residential and mixed -use urban form development. • Tukwila Village - On two corners at Tukwila International Boulevard and South 144th. This will include a 10,000 square foot library, 300 apartments, 50,000 square feet of retail and an outdoor plaza. • Tukwila South - This project includes a rezone and extension of Southcenter Parkway. Will allow up to 10 million square feet of redevelopment and new development, with an emphasis on office and research and development. It also allows retail and residential development. 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: 2008 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS 28 CITY OF TUKWILA: 2008 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: 2008 CAFR BASIC FINANCIAL STATEMENTS 30 CITY OF TUKWILA: 2008 CAFR BASIC FINANCIAL STATEMENTS CITY OF TUKWILA, WASHINGTON STATEMENT OF NET ASSETS DECEMBER 31, 2008 PRIMARY GOVERNMENT GOVERNMENTAL BUSINESS -TYPE ACTIVITIES ACTIVITIES TOTAL ASSETS: CASH AND CASH EQUIVALENTS (Note 3) $ 27,565,108 $ 8,428,759 $ 35,993,867 INVESTMENTS (Note 3) 6,649,470 3,361,624 10,011,094 RECEIVABLES: TAXES (Note 4) 3,223,172 76,369 3,299,541 CUSTOMER ACCOUNTS 366,693 721,111 1,087,804 INTEREST ON INVESTMENTS 38,118 19,278 57,396 DUE FROM OTHER GOVERNMENTAL UNITS (Note 4) 1,495,536 86,150 1,581,686 INVENTORY OF MATERIALS AND SUPPLIES 594,701 529,382 1,124,083 NET PENSION ASSET 248,421 248,421 INVESTMENT IN JOINT VENTURE (Note 7) 2,573,342 2,573,342 RESTRICTED ASSETS: CASH AND CASH EQUIVALENTS (Note 3) 594,312 594,312 NOTES RECEIVABLE 528,712 528,712 DEFERRED CHARGES 27,231 145,899 173,130 LAND AND CONSTRUCTION IN PROGRESS (Note 6) 47,105,768 3,042,893 50,148,661 DEPRECIABLE CAPITAL ASSETS (NET OF ACCUMULATED DEPRECIATION): (Note 6) 109,433,085 50,799,111 160,232,196 PLANT ACQUISITION ADJUSTMENT (NET OF ACCUMULATED AMORTIZATION) 64,630 64,630 TOTAL ASSETS 199,320,645 68,398,231 267,718,876 LIABILITIES: ACCOUNTS PAYABLE 631,891 631,891 ACCRUED WAGES AND BENEFITS PAYABLE 1,249,988 87,782 1,337,770 DUE TO OTHER GOVERNMENTAL UNITS - 616,554 616,554 ACCRUED INTEREST PAYABLE 63,225 103,432 166,657 REVENUES COLLECTED IN ADVANCE 184,335 - 184,335 OTHER CURRENT LIABILITIES 1,719,670 113,489 1,833,159 PAYABLE FROM RESTRICTED ASSETS: REVENUE BOND PRINCIPAL (Note 10) 593,703 593,703 DEPOSITS 3,250 138,863 142,113 UNEARNED REVENUE 295,347 295,347 BONDS AND OTHER DEBT PAYABLE: DUE WITHIN ONE YEAR (Note 10) 1,376,297 11,666 1,387,963 DUE IN MORE THAN ONE YEAR (Note 10) 18,047,710 16,886,404 34,934,114 UNFUNDED OTHER POST EMPLOYMENT BENEFITS (Note 9) 809,181 809,181 24,380,894 18,551,893 42,932,786 NET ASSETS: INVESTED IN CAPITAL ASSETS, NET OF RELATED DEBT 136,742,368 36,071,402 172,813,770 RESTRICTED NET ASSETS: CAPITAL PROJECTS 6,831,634 8,656 6,840,290 SPECIAL REVENUE FUND PROJECTS 11,640,011 - 11,640,011 DEBT SERVICE 1,248,901 430,444 1,679,345 UNRESTRICTED NET ASSETS 18,476,837 13,335,836 31,812,673 MTOTAL NET ASSETS $ 174,939,751 $ 49,846,338 $ 224,786,090 The notes to the financial statements are an integral part of this statement. 31 CITY OF TUKWILA: 2008 CAFR BASIC FINANCIAL STATEMENTS Plinm FUNCTIONS /PROGRAMS: PRIMARY GOVERNMENT GOVERNMENTAL ACTIVITIES: CITY OF TUKWILA, WASHINGTON STATEMENT OF ACTIVITIES FOR THE YEAR ENDED DECEMBER 31, 2008 Page 1 of 2 PROGRAM REVENUES OPERATING CAPITAL CHARGES GRANTS AND GRANTS AND EXPENSES FOR SERVICES CONTRIBUTIONS CONTRIBUTIONS GENERAL GOVERNMENT $ 4,723,103 $ 895,966 $ PUBLIC SAFETY 24,147,992 1,184,530 TRANSPORTATION 5,864,297 130,637 PHYSICAL ENVIRONMENT 2,862,487 1,200 CULTURE AND RECREATION 4,797,856 711,542 ECONOMIC ENVIRONMENT 5,017,935 2,476,501 MENTAL AND PHYSICAL HEALTH 4,173 INTEREST ON LONG -TERM DEBT 1,844,224 49,262,067 5,400,376 162,278 $ 329,267 40,051 152,757 37,985 602,825 706,390 92,118 1,484,083 1,325,163 2,282,592 BUSINESS -TYPE ACTIVITIES: WATER /SEWER 7,293,362 8,621,909 SURFACE WATER 1,762,417 2,642,325 FOSTER GOLF COURSE 1,968,595 1,563,681 633,415 122,985 TOTAL PRIMARY GOVERNMENT 11,024,374 12,827,915 756,400 $ 60,286,440 $ 18,228,291 $ 1,325,163 $ 3,038,991 GENERAL REVENUES: PROPERTY TAXES RETAIL SALES AND USE TAXES NATURAL GAS USE TAX HOTEL /MOTEL TAXES 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 The notes to the financial statements are an integral part of this statement. 32 CITY OF TUKWILA: 2008 CAFR BASIC FINANCIAL STATEMENTS Page 2 of 2 NET (EXPENSE) REVENUE AND CHANGES IN NET ASSETS GOVERNMENTAL BUSINESS -TYPE ACTIVITIES ACTIVITIES TOTAL $ (3,664,859) $ - $ (3,664,859) (22,634,195) - (22,634,195) (4,987,219) - (4,987,219) (2,616,412) - (2,616,412) (2,564,245) (2,564,245) (1,938,610) - (1,938,610) (4,173) - (4,173) (1,844,224) (1,844,224) (40,253,937) - (40,253,937) 1,961,962 1,002,893 (404,914) 1,961,962 1,002,893 (404,914) 2,559,941 2,559,941 $ (40,253,937) $ 2,559,941 $ (37,693,996) $ 11,656,979 $ - $ 11,656,979 18,009,297 500,000 18,509,297 643,037 - 643,037 587,216 - 587,216 5,136,444 - 5,136,444 2,497,705 - 2,497,705 983,078 983,078 874,046 - 874,046 801,847 377,955 1,179,801 (186,663) - (186,663) 1,383,774 (1,383,774) - 42,386,760 (505,819) 41,880,941 2,132,823 2,054,122 4,186,945 172,806,928 47,792,217 220,599,145 $ 174,939,751 $ 49,846,338 $ 224,786,090 33 CITY OF TUKWILA: 2008 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. 34 10,809,282 $ 10,469,604 $ 10,693,083 $ 31,971,969 7,705,315 10,406,546 10,617,476 28,729,337 CITY OF TUKWILA: 2008 CAFR BASIC FINANCIAL STATEMENTS CITY OF TUKWILA, WASHINGTON BALANCE SHEET GOVERNMENTAL FUNDS DECEMBER 31, 2008 OTHER TOTAL GENERAL ARTERIAL GOVERNMENTAL GOVERNMENTAL FUND STREET FUNDS FUNDS • ASSETS: CASH AND CASH EQUIVALENTS $ 4,836,531 $ 9,114,165 $ 7,713,799 $ 21,664,494 INVESTMENTS 2,955,447 674,086 1,567,004 5,196,537 RECEIVABLES: TAXES 2,346,837 448,046 428,289 3,223,172 CUSTOMER ACCOUNTS 366,693 366,693 INTEREST ON INVESTMENTS 9,318 7,510 8,710 25,537 DUE FROM OTHER GOVERNMENTAL UNITS 294,457 225,798 975,281 1,495,536 Mt TOTAL ASSETS $ 10,809,282 $ 10,469,604 $ 10,693,083 $ 31,971,969 LIABILITIES AND FUND BALANCES: ACCOUNTS PAYABLE $ 617,099 $ 14,792 $ - $ 631,891 ACCRUED WAGES & BENEFITS 1,213,196 3,607 15,739 1,232,542 RETAINAGE PAYABLE - 10,028 10,028 REVENUES COLLECTED IN ADVANCE 184,335 - 184,335 OTHER CURRENT LIABILITIES 407,978 - 4,624 412,602 DEFERRED REVENUE 681,358 44,659 45,216 771,234 TOTAL LIABILITIES 3,103,966 63,058 75,607 3,242,632 FUND BALANCES: RESERVED FOR: IMPREST FUNDS UNRESERVED, REPORTED IN: GENERAL FUND SPECIAL REVENUE FUNDS CAPITAL PROJECT FUNDS DEBT SERVICE FUNDS 17,800 17,800 7,687,515 10,406,546 7,687,515 2,536,941 12,943,487 6,831,634 6,831,634 1,248,901 1,248,901 . TOTAL FUND BALANCES TOTAL LIABILITIES AND FUND BALANCES Total governmental fund balances as reported on this statement $ 28,729,337 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. Capital assets used in governmental activities are not financial resources and therefore not reported in the funds. Non - Depreciable Assets $ Depreciable Assets (Net) 46,957,631 106,589,267 The net pension asset resulting from contributions in excess of the annual required contribution in 2008 are not financial resources and therefore is not reported in the funds. The City 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 were 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 Unfunded Other Post Employment Benefits Accrued Interest Payable (1,376,297) (18,047,710) (809,181) (61,851) 556,701 153,546,898 248,421 2,573,342 475,887 (20,295,039) 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. 9,104,204 Net assets of government activities as reported on the statement of net assets $ 174,939,751 The notes to the financial statements are an integral part of this statement. 35 CITY OF TUKWILA: 2008 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, 2008 1 OTHER TOTAL GENERAL ARTERIAL GOVERNMENTAL GOVERNMENTAL FUND STREET _ FUNDS FUNDS REVENUES: TAXES $ 30,456,862 $ 3,261,527 $ 3,694,180 $ 37,412,569 LICENSES AND PERMITS 2,022,851 - 2,022,851 INTERGOVERNMENTAL 2,587,088 838,272 2,272,238 5,697,598 CHARGES FOR SERVICES 2,569,381 2,569,381 FINES AND FORFEITURES 259,991 259,991 INVESTMENT EARNINGS 328,698 271,250 326,966 926,913 MISCELLANEOUS 677,521 61,845 76,689 816,054 TOTAL REVENUES 38,902,391 4,432,894 6,370,073 49,705,358 EXPENDITURES: CURRENT: GENERAL GOVERNMENT 7,992,286 7,992,286 SECURITY OF PERSONS AND PROPERTY 22,878,689 22,878,689 PHYSICAL ENVIRONMENT 2,042,037 213,843 2,255,880 TRANSPORTATION 2,462,190 320,887 - 2,783,077 ECONOMIC ENVIRONMENT 3,624,883 1,370,631 4,995,514 MENTAL AND PHYSICAL HEALTH 4,173 4,173 CULTURE AND RECREATION 4,293,658 4,293,658 DEBT SERVICE: PRINCIPAL - - 972,000 972,000 INTEREST AND OTHER COSTS - 872,224 872,224 CAPITAL OUTLAY 226,133 1,667,947 4,195,623 6,089,703 TOTAL EXPENDITURES 43,524,048 1,988,834 7,624,321 53,137,203 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (4,621,657) 2,444,059 (1,254,248) (3,431,845) OTHER FINANCING SOURCES (USES): SALES OF CAPITAL ASSETS 53,592 53,592 TRANSFERS IN (Note 5) 2,215,982 300,000 2,515,982 TRANSFERS OUT (Note 5) (460,000) (591,657) (55,886) (1,107,543) GENERAL OBLIGATION REFUNDING BONDS ISSUED - 6,180,000 6,180,000 PREMIUM ON GENERAL OBLIGATION REFUNDING DEBT 483,599 483,599 ISSUANCE COSTS ON GENERAL OBLIGATION REFUNDING DEBT (108,326) (108,326) PAYMENT TO REFUNDED BOND ESCROW AGENT (6,555,273) (6,555,273) TOTAL OTHER FINANCING SOURCES AND USES 1,809_,574 (591,657) 1,462,031 NET CHANGE IN FUND BALANCES (2,812,083) 1,852,402 (1,010,134) (1,969,814) FUND BALANCES - BEGINNING 10,517,398 8,554,144 11,627,610 30,699,152 FUND BALANCES - ENDING $ 7,705,315 $ 10,406,546 $ 10,617,476 $ 28,729,338 The notes to the financial statements are an integral part of this statement. 36 CITY OF TUKWILA: 2008 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, 2008 Net change in fund balances per the Statement of Revenues, Expenditures, and Changes in Fund Balances $ (1,969,814) 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 Depreciation Expense 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 2008 is not a financial resource and therefore not reported in the funds. The City 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. 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 for Refunding Payment to Refunded Bond Escrow 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 City's fiscal year ends, they are not considered "available" revenues in the government funds. Deferred revenues increased by this amount this year. $ 6,401,663 (4,602,848) $ (6,180,000) 6,260,000 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: Net Decrease in Materials and Supplies $ (1,062) Net Decrease in Accrued Interest 10,758 Increase in Compensated Absences (184,249) Increase in Unfunded Other Post Employment Benefits (809,181) Amortization of Bond Discount and Deferred Charges (20,627) Amortization of Bond Premiums 27,512 Total Additional Expense (Increase) Decrease 1,798,815 818,758 47,858 144,387 972,000 80,000 961,752 255,916 (976,849) Change in net assets on the Statement of Activities $ 2,132,823 The notes to the financial statements are an integral part of this statement. 37 CITY OF TUKWILA: 2008 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, 2008 VARIANCE WITH ORIGINAL FINAL FINAL BUDGET BUDGET BUDGET ACTUAL POSITIVE (GAAP BASIS) (GAAP BASIS) RESULTS (NEGATIVE) REVENUES: TAXES $ 31,424,000 $ 31,424,000 $ 30,456,862 $ (967,138) LICENSES AND PERMITS 2,385,000 2,385,000 2,022,851 (362,149) INTERGOVERNMENTAL 3,618,200 3,618,200 2,587,088 (1,031,112) CHARGES FOR SERVICES 2,471,400 2,471,400 2,569,381 97,981 FINES AND FORFEITURES 215,000 215,000 259,991 44,991 INVESTMENT EARNINGS 325,000 325,000 328,698 3,698 MISCELLANEOUS 472,000 472,000 677,521 205,521 TOTAL REVENUES 40,910,600 40,910,600 38,902,391 (2,008,209) EXPENDITURES: CURRENT: GENERAL GOVERNMENT 7,516,634 8,046,634 7,992,286 54,348 PUBLIC SAFETY 22,597,644 22,597,644 22,878,689 (281,045) PHYSICAL ENVIRONMENT 2,361,255 2,261,255 2,042,037 219,218 TRANSPORTATION 2,513,197 2,513,197 2,462,190 51,007 ECONOMIC ENVIRONMENT 3,475,041 3,420,041 3,624,883 (204,842) MENTAL & PHYSICAL HEALTH 4,000 4,000 4,173 (173) CULTURE AND RECREATION 4,559,336 4,508,336 4,293,658 214,678 CAPITAL OUTLAY 1,522,536 1,198,536 226,133 972,403 TOTAL EXPENDITURES 44,549,643 44,549,643 43, 524, 048 1,025, 595 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (3,639,043) (3,639,043) (4,621,657) (982,614) OTHER FINANCING SOURCES (USES): SALES OF CAPITAL ASSETS TRANSFERS IN (Note 5) TRANSFERS OUT (Note 5) 5,000 2,215,982 (300,000) 5,000 2,215,982 (460,000) 53,592 2,215,982 (460,000) 48,592 TOTAL OTHER FINANCING SOURCES AND USES 1,920,982 1,760,982 1,809,574 48,592 NET CHANGE IN FUND BALANCES FUND BALANCES - BEGINNING FUND BALANCES - ENDING (1,718,061) (1,878,061) 10,517,398 10, 517, 398 (2,812,083) (934,022) 10, 517, 398 $ 8,799,337 $ 8,639,337 $ 7,705,315 $ (934,022) The notes to the financial statements are an integral part of this statement. 38 CITY OF TUKWILA: 2008 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, 2008 1 VARIANCE WITH ORIGINAL FINAL FINAL BUDGET BUDGET BUDGET ACTUAL POSITIVE (GAAP BASIS) (GAAP BASIS) RESULTS (NEGATIVE) REVENUES: TAXES $ 3,430,000 $ 3,430,000 $ 3,261,527 $ (168,473) INTERGOVERNMENTAL 8,236,520 8,236,520 838,272 (7,398,248) INVESTMENT EARNINGS 200,000 200,000 271,250 71,250 MISCELLANEOUS 7,801,000 7,801,000 61,845 (7,739,155) TOTAL REVENUES 19,667,520 19,667,520 4,432,894 (15,234,626) EXPENDITURES: CURRENT: TRANSPORTATION CAPITAL OUTLAY 21,393, 917 320,887 21,393,917 1,667,947 (320,887) 19,725,970 TOTAL EXPENDITURES 21,393,917 21,393,917 1,988,834 19,405,083 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (1,726,397) (1,726,397) 2,444,059 4,170,456 OTHER FINANCING SOURCES (USES): TRANSFERS OUT (Note 5) (591,657) (591,657) (591,657) TOTAL OTHER FINANCING SOURCES AND USES (591,657) (591,657) (591,657) NET CHANGE IN FUND BALANCES FUND BALANCES - BEGINNING FUND BALANCES - ENDING (2,318,054) (2,318,054) 1,852,402 4,170,456 8,554,144 8,554,144 8,554,144 $ 6,236,090 $ 6,236,090 $ 10,406,546 $ 4,170,456 The notes to the financial statements are an integral part of this statement. 39 CITY OF TUKWILA: 2008 CAFR BASIC FINANCIAL STATEMENTS 40 CITY OF TUKWILA: 2008 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 GOVERNMENTAL FOSTER SURFACE TOTAL ACTIVITIES WATER/SEWER GOLF WATER ENTERPRISE INTERNAL UTILITY COURSE UTILITY FUNDS SERVICE FUNDS CITY OF TUKWILA: 2008 CAFR BASIC FINANCIAL STATEMENTS CITY OF TUKWILA, WASHINGTON STATEMENT OF NET ASSETS PROPRIETARY FUNDS DECEMBER 31, 2008 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 DEFERRED CHARGES TOTAL CURRENT ASSETS NONCURRENT ASSETS: RESTRICTED CASH, BOND RESERVES NOTES RECEIVABLE DEFERRED CHARGES CAPITAL ASSETS: LAND BUILDINGS AND EQUIPMENT OTHER IMPROVEMENTS MACHINERY AND EQUIPMENT CONSTRUCTION IN PROGRESS LESS: ACCUMULATED DEPRECIATION TOTAL CAPITAL ASSETS (NET OF A/D) PLANT ACQUISITION ADJUSTMENT (NET OF ACCUMULATED AMORTIZATION) MTOTAL NONCURRENT ASSETS $ 6,403,568 $ 80,801 $ 1,944,390 $ 8,428,759 $ 5,900,615 1,680,537 252,254 1,428,833 3,361,624 1,452,932 76,369 - 76,369 638,066 83,046 721,111 12,089 1,083 6,106 19,278 12,580 11,180 74,970 86,150 - 230,418 251,526 47,438 529,382 38,000 99,815 64,053 163,868 27,231 9,075,672 726,086 3,584,783 13,386,542 7,431,358 393,547 36,897 430,444 528,712 - 528,712 63,476 73,768 8,656 145,899 156,872 1,609,575 140,969 1,907,416 3,606,095 6,617,674 909,455 11,133,224 31,045,312 3,421,051 28,345,157 62,811,519 2,135,938 205,372 48,247 2,389,557 8,461,082 494,466 - 641,011 1,135,477 (12,848,887) (2,991,718) (9,694,584) (25,535,189) (5,469,127) 24,589,796 8,861,954 20,390,255 53,842,004 2,991,955 64,630 64,630 25,640,160 8,935,722 20,435,808 55,011,690 2,991,955 34,715,833 9,661,808 24,020,591 68,398,231 10,423,313 TOTAL ASSETS LIABILITIES: CURRENT LIABILITIES: ACCOUNTS PAYABLE ACCRUED WAGES AND BENEFITS DUE TO OTHER GOVERNMENTAL UNITS ACCRUED INTEREST PAYABLE OTHER CURRENT LIABILITIES REVENUE BOND PRINCIPAL DEPOSITS TOTAL CURRENT LIABILITIES NONCURRENT LIABILITIES: REVENUE BONDS PAYABLE (NET OF UNAMORTIZED PREMIUMS) COMPENSATED ABSENCES OTHER LONG -TERM LIABILITIES _ TOTAL NONCURRENT LIABILITIES TOTAL LIABILITIES. NET ASSETS: INVESTED IN CAPITAL ASSETS, NET OF RELATED DEBT RESTRICTED FOR: CAPITAL PROJECTS DEBT SERVICE UNRESTRICTED TOTAL NET ASSETS 11,145 77,343 88,489 34,407 29,528 23,846 87,782 17,446 287,341 - 329,214 616,554 77,178 13,088 13,166 103,432 - - - 1,301,664 361,200 218,703 13,800 593,703 99,815 39,048 - 138,863 871,086 300,367 457,370 1,628,823 1,319,110 4,506,673 3,451,324 348,930 8,306,928 - 85,840 65,203 48,037 199,080 - 4,266,745 11,666 4,138,652 8,417,062 - 8,859,258 3,528,193 4,535,619 16,923,070 - 9,730,344 3,828,560 4,992,989 18, 551, 893 1,319,110 15,231,312 5,265,694 15,574,396 36,071,402 2,991,955 8,656 8,656 393,547 36,897 430,444 9,360,629 567,553 3,407,653 13,335,836 6,112,248 $ 24,985,488 $ 5,833,248 $ 19,027,602 $ 49,846,338 $ 9,104,203 The notes to the financial statements are an integral part of this statement. 42 GOVERNMENTAL FOSTER SURFACE TOTAL ACTIVITIES WATER /SEWER GOLF WATER ENTERPRISE INTERNAL UTILITY COURSE UTILITY FUNDS SERVICE FUNDS CITY OF TUKWILA: 2008 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, 2008 V OPERATING REVENUES: CHARGES FOR SERVICES $ 8,603,765 $ 1,561,441 $ 2,540,179 $ 12,705,385 $ 7,609,968 INTERGOVERNMENTAL - - 102,147 102,147 - OTHER OPERATING REVENUE 18,143 2,240 - 20,383 2,459 TOTAL OPERATING REVENUES 8,621,909 1,563,681 2,642,325 12,827,915 7,612,427 OPERATING EXPENSES: OPERATIONS & MAINTENANCE 5,701,671 ADMINISTRATIVE AND GENERAL 136,436 TAXES 261,188 DEPRECIATION AND AMORTIZATION 953,552 1,303,050 960,206 7,964,926 5,976,464 141,295 277,731 1,631 7,077 32,370 300,634 - 319,265 590,839 1,863,656 710,410 TOTAL OPERATING EXPENSES OPERATING INCOME (LOSS) 7,052,846 1,629,392 1,724,709 10,406,948 6,688,506 1,569,062 (65,711) 917,616 2,420,967 923,922 NON - OPERATING REVENUE (EXPENSE): TAXES 500,000 - 500,000 INVESTMENT EARNINGS 232,657 22,303 122,995 377,955 203,478 INTEREST EXPENSE (243,167) (172,317) (36,087) (451,571) - SALE OF CAPITAL ASSETS - - - - 170,976 AMORTIZATION OF BOND PREMIUM 10,797 1,845 353 12,996 AMORTIZATION OF BOND DISCOUNT (6,093) - - (6,093) BOND ISSUE COSTS (2,052) (4,945) (1,974) (8,971) - BAD DEBT EXPENSE - (163,785) - (163,785) - TOTAL NON - OPERATING REVENUE (EXPENSE) (7,858) 183,100 85,288 260,529 374,454 INCOME (LOSS) BEFORE CONTRIBUTIONS & TRANSFERS 1,561,204 117,389 1,002,903 2,681,496 1,298,375 CAPITAL CONTRIBUTIONS 633,415 - 122,985 756,400 TRANSFERS IN (Note 5) - - - 160,000 TRANSFERS OUT (Note 5) (1,024,163) (12,149) (347,462) (1,383,774) (184,665) CHANGE IN NET ASSETS 1,170,456 105,240 778,426 2,054,122 1,273,710 TOTAL NET ASSETS BEGINNING OF YEAR 23,815,032 5,728,008 18,249,176 47,792,217 7,830,493 TOTAL NET ASSETS END OF YEAR $ 24,985,488 $ 5,833,248 $ 19,027,602 $ 49,846,338 $ 9,104,203 The notes to the financial statements are an integral part of this statement. 43 CITY OF TUKWILA: 2008 CAFR BASIC FINANCIAL STATEMENTS CITY OF TUKWILA, WASHINGTON STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE FISCAL YEAR ENDED DECEMBER 31, 2008 Page 1 of 2 1 T GOVERNMENT FOSTER SURFACE TOTAL ACTIVITIES WATER/SEWER GOLF WATER ENTERPRISE INTERNAL UTILITY COURSE + UTILITY + FUNDS SERVICE FUNDS CASH FLOWS FROM OPERATING ACTIVITIES: CASH RECEIVED FROM USERS $ 8,457,849 $ 1,446,685 $ 2,577,954 $ 12,482,489 $ 7,609,968 CASH PAID TO SUPPLIERS (4,860,369) (253,843) (278,829) (5,393,040) (5,530,258) CASH PAID FOR TAXES (261,188) (7,077) (32,370) (300,635) - CASH PAID FOR INVENTORY (9,983) (151,472) - (161,455) (69,767) CASH PAID TO EMPLOYEES (965,245) (942,124) (737,961) (2,645,330) (397,333) OTHER CASH RECEIVED (PAID) - - 456,456 NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES 2,361,066 92,169 1,528,794 3,982,029 2,069,065 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 500,000 - (1,024,163) (12,141 347,462 (1,024,163) 487,851 (347,462) 500,000 (1,383,774) 160,000 (184,6651 (883,774) (24,665) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: PROCEEDS FROM SALE OF EQUIPMENT - 5,872 5,872 36,227 PURCHASE OF CAPITAL ASSETS (448,433) (42,060) (530,245) (1,020,738) (1,022,370) CONTRIBUTED CAPITAL 633,415 - 122,985 756,400 - PROCEEDS FROM INSURANCE SETTLEMENT - - - - 134,749 PREMIUM & BOND ISSUANCE COSTS 10,797 (302) - 10,494 - PRINCIPAL PAYMENT ON DEBT (388,045) (493,920) (310,225) (1,192,190) INTEREST PAYMENT ON DEBT (288,211) (173,247) (41,469) (502,927) NET CASH PROVIDED (USED) FOR CAPITAL AND RELATED FINANCING ACTIVITIES (480,477) (709,529) (753,082) (1,943,088) (851,394) CASH FLOW FROM INVESTING ACTIVITIES: PROCEEDS FROM SALE OF INVESTMENTS 2,615,665 248,806 2,750,000 5,614,471 2,355,810 PURCHASE OF INVESTMENTS (1,718,714) (250,000) (3,416,000) (5,384,714) (2,468,092) INTEREST RECEIVED 247,651 20,627 125,696 393,974 204,531 NET CASH PROVIDED (USED) IN INVESTING ACTIVITIES 1,144,602 19,433 (540,304) 623,731 92,248 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 2,001,027 (110,076) (112,054) 1,778,897 1,285,255 4,895,903 254,930 2,093,341 7,244,174 4,615,359 $ 6,896,930 $ 144,854 $ 1,981,287 $ 9,023,071 $ 5,900,614 $ 6,403,568 $ 80,801 $ 1,944,390 $ 8,428,759 $ 5,900,614 99,815 64,053 36,897 200,765 393,547 - - 393,547 $ 6,896,930 $ 144,854 $ 1,981,287 $ 9,023,071 $ 5,900,614 44 GOVERNMENT FOSTER SURFACE TOTAL ACTIVITIES WATER/SEWER GOLF WATER ENTERPRISE INTERNAL UTILITY COURSE UTILITY FUNDS SERVICE FUNDS CITY OF TUKWILA, WASHINGTON STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE FISCAL YEAR ENDED DECEMBER 31, 2008 Page 2 of 2 CITY OF TUKWILA: 2008 CAFR BASIC FINANCIAL STATEMENTS 1 RECONCILIATION OF NET OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES OPERATING INCOME (LOSS) 1 $ 1,569,062 $ (65,711) $ 917,616 $ 2,420,966 $ 923,921 ADJUSTMENTS TO RECONCILE OPERATING INCOME TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES: DEPRECIATION 953,552 319,265 590,839 1,863,656 710,410 ASSET (INCREASES) DECREASES: ACCOUNTS RECEIVABLE (249,956) (89,953) (12,076) (351,985) MISCELLANEOUS A/R- REVENUE (11,179) (7,827) (52,295) (71,301) (27,231) INVENTORY (9,983) (25,980) 5,922 (30,041) 2,000 LIABILITY INCREASES (DECREASES) : ACCOUNTS & VOUCHERS PAYABLE 957 - 77,344 78,301 459,966 DEPOSITS PAYABLE 97,517 (19,216) 2,020 80,321 - WAGES & BENEFITS PAYABLE 1,687 2,244 - 3,931 COMPENSATED ABSENCES PAYABLE 9,409 (20,653) (576) (11,820) TOTAL ADJUSTMENTS 792,004 157,880 611,178 1,561,062 1,145,145 NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES $ 2,361,066 $ 92,169 $ 1,528,794 $ 3,982,029 $ 2,069,065 SCHEDULE OF NONCASH INVESTING, CAPITAL AND FINANCING ACTIVITIES CAPITAL ASSETS ACQUIRED BY CONTRIBUTED CAPITAL $ 348,430 $ - $ 122,985 $ 471,415 $ INCREASE (DECREASE) IN FAIR VALUE OF INVESTMENT 11,537 12,833 24,370 9,440 TOTAL NON CASH INVESTING, CAPITAL AND FINANCING ACTIVITIES 359,967 $ - $ 135,818 $ 495,785 $ 9,440 The notes to the financial statements are an integral part of this statement. 45 CITY OF TUKWILA: 2008 CAFR BASIC FINANCIAL STATEMENTS 46 CITY OF TUKWILA: 2008 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. 47 CITY OF TUKWILA: 2008 CAFR BASIC FINANCIAL STATEMENTS CITY OF TUKWILA, WASHINGTON STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUND DECEMBER 31, 2008 FIREMEN'S PENSION TRUST FUND ASSETS: CASH AND CASH EQUIVALENTS $ 1,371,882 INVESTMENTS 73,080 RECEIVABLES: INTEREST 44 TOTAL ASSETS 1,445,006 NET ASSETS: HELD IN TRUST FOR PENSION BENEFITS AND OTHER PURPOSES $ 1,445,006 The notes to the financial statements are an integral part of this statement. 48 CITY OF TUKWILA: 2008 CAFR BASIC FINANCIAL STATEMENTS CITY OF TUKWILA, WASHINGTON STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS FIDUCIARY FUND FOR THE YEAR ENDED DECEMBER 31, 2008 FIREMEN'S PENSION TRUST FUND ADDITIONS: FIRE INSURANCE PREMIUM TAXES $ 52,571 INVESTMENT EARNINGS 41,963 TOTAL ADDITIONS 94,534 DEDUCTIONS: BENEFIT PAYMENTS ADMINISTRATIVE EXPENSES 47,451 1,841 TOTAL DEDUCTIONS 49,292 CHANGE IN NET ASSETS 45,242 NET ASSETS - BEGINNING 1,399,764 NET ASSETS - ENDING $ 1,445,006 The notes to the financial statements are an integral part of this statement. 49 CITY OF TUKWILA: 2008 CAFR BASIC FINANCIAL STATEMENTS 50 CITY OF TUKWILA: 2008 CAFR NOTES TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS For the Year Ended December 31, 2008 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 2008. See Note 7, Joint Ventures, for a discussion of the Valley Communications Center, which is a joint public safety dispatching authority for five member cities. 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 those activities of the City that are governmental and those that are considered 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 that are specifically associated 51 CITY OF TUKWILA: 2008 CAFR NOTES TO THE FINANCIAL STATEMENTS with a service, program or department and therefore clearly identifiable to a particular function. Indirect costs are included in the program expense reported for individual functions and activities. 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. 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 that only current assets and current liabilities are generally included on their balances 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 is established in accordance with RCW 82.36.020 for the administration of the State - levied motor vehicle half -cent gasoline tax distributed to 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. The other governmental funds of the City account for grants and other resources whose use is restricted to a particular purpose. Proprietary Funds Proprietary Funds are accounted for on a "flow of economic resources" measurement focus. This means that 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 52 CITY OF TUKWILA: 2008 CAFR NOTES TO THE FINANCIAL STATEMENTS 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. 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's only Fiduciary Fund is a Pension Trust Fund. The Firemen's Pension Trust Fund is accounted for in essentially the same manner as Proprietary Funds. D. Measurement Focus 53 CITY OF TUKWILA: 2008 CAFR NOTES TO THE FINANCIAL STATEMENTS 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. Nonexchange transactions, in which the City receives value without directly giving equal value in return, include property taxes, sales and use taxes, admission taxes, gambling taxes, utility taxes, hotel /motel taxes, grants, entitlements, and donations. These revenues are on an accrual basis. On the accrual basis, the revenue is recognized in the period in which the income is earned. Revenue from property taxes is recognized in the fiscal year for which the taxes are levied. (See Note 4 on receivables). 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. 54 CITY OF TUKWILA: 2008 CAFR NOTES TO THE FINANCIAL STATEMENTS 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 that 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 includes 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 biannually 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. 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. 55 CITY OF TUKWILA: 2008 CAFR NOTES TO THE FINANCIAL STATEMENTS 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." 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 that they are not available for appropriation and are not expendable available financial resources. See also Note 5. 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 56 CITY OF TUKWILA: 2008 CAFR NOTES TO THE FINANCIAL STATEMENTS 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. 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. 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. 57 CITY OF TUKWILA: 2008 CAFR NOTES TO THE FINANCIAL STATEMENTS 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 ". 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 115 as of December 31, 2008. WCIA provides pooled self- insurance coverage for general liability, vehicle liability, false arrest, and errors and omissions. See Note 15 for additional information. 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 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 58 CITY OF TUKWILA: 2008 CAFR NOTES TO THE FINANCIAL STATEMENTS 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 $6,063,000. 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 $14,100. 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. 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 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, 2008, the City had the following deposits and investments: Call Date Maturity Date Credit Rating Total FNMA note 04/28/2009 04/28/2010 AAA/Aaa $ 2,015,000 FNMA note 06/24/2009 12/24/2010 AAA/Aaa 1,013,750 FNMA note 06/25/2009 06/25/2010 AAA/Aaa 941,920 FFCB note 12/15/2009 12/15/2011 AAA/Aaa 3,032,813 FHLMC note 02/04/2009 02/04/2011 AAA/Aaa 3,007,611 Total Investments $10,011,094 59 CITY OF TUKWILA: 2008 CAFR NOTES TO THE FINANCIAL STATEMENTS Unrestricted Restricted Total Cash and Cash Equivalents: Depository accounts $ 3,303,387 $ 203,312 $ 3,506,700 Cash on hand 19,100 - 19,100 Local Government Investment Pool 32,671,380 391,000 33,062,380 Total cash and cash equivalents 35,993,867 594,312 36,588,180 Investments: Federal National Mortgage Association notes 3,970,670 3,970,670 Federal Farm Credit Bureau note 3,032,813 3,032,813 Federal Home Loan Mortgage Corporation note 3,007,611 3,007,611 Total investments 10,011,094 10,011,094 Total Cash, Cash Equivalents, and Investments $ 46,004,960 $ 594,312 $ 46,599,273 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. 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, 2008, 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. 60 CITY OF TUKWILA: 2008 CAFR NOTES TO THE FINANCIAL STATEMENTS 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. 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 2008, the City's general tax levy was $2.56911 per each $1,000 of assessed valuation. Total assessed valuation for 2007 was $4,450,243,674 and was the basis for the 2008 assessments. Actual 2008 general levy property taxes collected were $11,656,979. Intergovernmental Grants and Entitlements 61 $ 1,755,982 $ (347,543) $ (24,665) $ 1,383,774 $ (1,024,163) $ (347,462) $ (12,149) $ (1,383,774) CITY OF TUKWILA: 2008 CAFR NOTES TO THE FINANCIAL STATEMENTS 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. There were no interfund loans outstanding at December 31, 2008. Interfund transfers were as follows: Government and Internal Service Funds: Other Internal General Government Service Fund Funds Funds Total Transfers In Transfers (Out) $ 2,215,982 $ 300,000 $ 160,000 $ 2,675,982 (460,000) (647,543) (184,665) (1,292,208) Net Transfers In (Out) Proprietary Funds: Surface Water /Sewer Water Foster Golf Utility Utility Course Total Transfers In $ $ $ - $ Transfers (Out) (1,024,163) (347,462) (12,149) (1,383,774) Net Transfers In (Out) The principal purposes for interfund transfers include interfund subsidies and transfers into debt service and capital projects funds. 62 CITY OF TUKWILA: 2008 CAFR NOTES TO THE FINANCIAL STATEMENTS NOTE 6 — CAPITAL ASSETS Capital asset activity for the year ended December 31, 2008, was as follows: Beginning Balance Increases Decreases Ending Balance Governmental Activities Capital assets, not being depreciated: Land Construction in Progress Total capital assets, not being depreciated Capital assets, being depreciated: Buildings Other Improvements Machinery and Equipment Infrastructure 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 Governmental activity capital assets, net Business -type Activities Capital assets, not being depreciated: Land Construction in Progress Total capital assets, not being depreciated Capital assets, being depreciated: Buildings Other Improvements Machinery and Equipment Total capital assets being depreciated Less accumulated depreciation for: Buildings Other Improvements Machinery and Equipment Total accumulated depreciation Total capital assets, being depreciated, net Business -type activity capital assets, net $ 35,901,461 $ 3,017,362 $ - $ 10,617,808 1,747,332 (4,178,195) 46,519,269 4,764,694 (4,178,195) 23,072,954 105,931 11,588,963 824,058 13,548,027 2,223,279 109,404,602 4,431,321 (479,312) (265,007) 157,614,546 7,584,589 (7,577,050) (582,971) (6,854,589) (476,669) (8,029,510) (1,179,943) (27,751,386) (3,073,675) (50,212,535) (5,313,258) (744,319) 107,402,011 2,271,331 $ 153,921,280 $ 7,036,025 $ 459,894 44,170 504,064 (240,255) (4,418,450) 38,918,823 8,186, 944 47,105, 767 23,178,885 12,413,021 15,291,994 113, 570, 916 164,454,816 (8,160,021) (7,331,258) (8,749,559) (30,780,891) (55,021,729) 109,433,087 $ 156,538,854 $ 1,907,416 $ 2,308,145 4,215,562 11,133,224 60,482,331 2,378,262 821,481 $ - $ 1,907,416 (1,994,149) 1,135,477 821,481 2,403,169 13,270 (1,994,149) 3,042,893 73, 993, 816 2,416,440 (1,826,805) (299,262) (20,498,230) (1,599,432) (1,195,703) (141,693) (23,520,738) (2,040,387) 11,133,224 (73,981) 62,811,519 (1,975) 2,389,557 (75,956) 76,334,300 23,960 1,975 25,935 50,473,079 376,053 (50,020) $ 54,688,641 $ 1,197,533 $ (2,044,170) (2,126,067) (22,073,701) (1,335,421) (25,535,189) 50,799,111 $ 53,842,004 63 Governmental Activities - Total Increases $ 12,349,283 CITY OF TUKWILA: 2008 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 Land Contributions Developer Contributions Construction in Progress to Capital (Infrastructure) Internal Service Funds (Equipment Rental) $ 7,056,599 8,800 83,318 4,178,196 1,022,370 Depreciation Expense Governmental Activities: General Government $ 63,619 Public Safety 340,402 Physical Environment 612,839 Transportation 3,077,968 Economic Environment 10,771 Culture and Recreation 497,249 Capital assets held by the governments internal service funds charged to the various functions based on usage of assets 710,410 Total depreciation expense - governmental activities $ 5,313,258 Business -type Activities: Water /Sewer Utility $ 1,125,750 Foster Golf Course 319,265 Surface Water Utility 595,372 Total depreciation expense - business -type activities $ 2,040,387 NOTE 7 — JOINT VENTURES Valley Communications Center The "Valley Communications Center" was established August 20, 1976, when an Interlocal Agreement was entered into by the four original participating municipal corporations, including the cities of Renton, Kent, Auburn, and 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 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 64 CITY OF TUKWILA: 2008 CAFR NOTES TO THE FINANCIAL STATEMENTS 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 2008 cost distribution for the five participating cities is as follows: City Dispatchable Percent of Calls Total Renton 67,064 18.03% Kent 101,284 27.23% Auburn 79,599 21.40% Tukwila 38,944 10.47% Federal Way 85,066 22.87% Total 371,956 100.00% 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. Said 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: Federal Item Renton Kent Auburn Tukwila Way Total January 1, 2008 $ 4,144,207 $ 5,857,558 $ 3,849,690 $ 2,428,955 $ 2,271,898 $ 18,552,308 Current year increase 315,027 522,441 390,922 144,387 424,174 1,796,951 December 31, 2008 $ 4,459,234 $ 6,379,999 $ 4,240,612 $ 2,573,342 $ 2,696,072 $ 20,349,259 Percent of Equity 21.91% 31.35% 20.84% 12.65% 13.25% 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 65 CITY OF TUKWILA: 2008 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 is available from Valley Communications Center, 27519 108th Ave SE, Kent, WA 98030, or telephone 253 - 372 -1300. 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. Historical trend and other information regarding each plan are presented in the State Department of Retirement Systems 2007 Comprehensive Annual Financial Report. A copy of this report may be obtained at: 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. 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 combination defined benefit /defined contribution plan. 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 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 enrolled as Plan 1 members. Those who joined either on or after October 1, 1977 and by either, February 28, 2002 for state and higher education employees, or 66 CITY OF TUKWILA: 2008 CAFR NOTES TO THE FINANCIAL STATEMENTS August 31, 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 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.) Plan 1 members who retire from inactive status prior to the age of 65 may receive actuarially reduced benefits. The benefit is actuarially reduced to reflect the choice of a survivor option. A cost -of living allowance (COLA) is granted at age 66 based upon years of service times the COLA amount, increased by three percent annually. Plan 1 members may also elect to receive an optional COLA amount 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 1 percent of the AFC per year of service. (The AFC is based on the greatest compensation during any eligible consecutive 60 -month period.) Effective June 7, 2006, 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 10 years of service. 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. 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 6 percent and do not vary from year to year. 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 67 CITY OF TUKWILA: 2008 CAFR NOTES TO THE FINANCIAL STATEMENTS portion of Plan 3. All employers are required to contribute at the level established by the Legislature. PERS Plan 3 defined contribution is a non - contributing plan for employers. Employees who participate in the defined contribution portion of PERS Plan 3 do not contribute to the defined benefit portion of PERS Plan 3. 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, 2008 follows: PERS Plan I PERS Plan II PERS Plan III Employer* 8.31% 8.31% 8.31%** Employee 6.00% 5.45% 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 2008 $ 4,048 $ 789,623 $ 135,429 2007 5,134 591,075 106,108 2006 7,283 304,192 54,324 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. 68 CITY OF TUKWILA: 2008 CAFR NOTES TO THE FINANCIAL STATEMENTS 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. Funding Policy. Plan I employers and employees are required to contribute at a prescribed rate and the State is responsible for the balance of the funding. Plan II employers and employees are required to pay at levels established by the legislature. Employer and employee contribution rates for Plan II are developed by the Office of the State Actuary to fund the system. The required contribution rates to the LEOFF system expressed as a percentage of covered payroll as of December 31, 2008 follow: LEOFF Plan I LEOFF Plan II Employer 0.16% 5.46% Employee 0.00% 8.83% 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 2008 $ 724 $ 615,728 2007 782 548,066 2006 873 481,003 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. 69 CITY OF TUKWILA: 2008 CAFR NOTES TO THE FINANCIAL STATEMENTS Funding Policy. Under State law, the Firemen's Pension Plan is provided an allocation of all moneys 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, 2008 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. 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. 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, 2008. Retirees and beneficiaries receiving benefits 10 Retirees currently receiving full retirement benefits through the Law Enforcement Officers and Fire Fighters Retirement Plan (LEOFF) 2 Total 12 GASB No. 27 THREE YEAR TREND INFORMATION Annual Pension Contribution as a Net Pension Fiscal Year Ending Cost (APC) Percentage of APC * Obligation (Asset) December 31, 2006 $ (4,686) N/A $ (160,165) December 31, 2007 (1,582) 2,654 (200,563) December 31, 2008 2,872 1,766 (248,421) * In years with a negative APC, this percentage is not applicable. Trend information gives an indication of the progress made in accumulating sufficient assets to pay benefits when due. Three -year and six -year trend information is presented as required supplementary information following the Notes to the Financial Statements. ANNUAL DEVELOPMENT OF PENSION COST Interest Total Change Net Fiscal Annual on Net Annual Employer in Net Pension - -- Amortization - -- Year Retirement Pension Pension Contri- Pension Obligation (Gain) / (Gain) Ending Ended Cost Obligation Cost butions Obligation Balance Loss Factor / Loss _ Balance 2006 (6,547) (6,699) (4,686) 43,837 (48,523) (160,165) (50,384) 13.0416 (8,560) (160,165) 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) (i) is the assumed interest rate that year; 6% in 2006, 5% in 2007, 5% in 2008. 70 CITY OF TUKWILA: 2008 CAFR NOTES TO THE FINANCIAL STATEMENTS ANNUAL PENSION COST AND NET PENSION OBLIGATION Annual Required Contribution 2006 2007 2008 1 . Annual normal cost (BOY) $ $ - $ 2 . Amortization of UAAL (BOY) (6,176) (1,903) (1,903) 3 . Interest to EOY (1 + 2 x i *) (371) (95) (95) 4 . ARC at EOY (1 + 2 + 3) (6,547) (1,998) (1,998) 5 . Interst on NPO (6,699) (8,008) (10,028) 6 . Adjustment to ARC (8,560) (11,588) (14,898) 7 . Annual pension cost (4 + 5 - 6) (4,686) 1,582 2,872 8 . Employer contributions ** 43,837 41,980 50,730 9 . Change in NPO (7 - 8) (48,523) (40,398) (47,858) 10 . NPO at BOY (11 prior yr) (111,642) (160,165) (200,563) 11 . NPO at EOY (9 + 10) $ (160,165) $(200,563) $ (248,421) *(i) is the assumed interest rate that year: 6% in 2006, 5% in 2007, 5% in 2008 ** 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 information presented in the preceding required schedules was determined as part of the actuarial valuations at the dates indicated. Since all Firemen's Pension Fund employees for Tukwila are now retired, the actuarial cost method does not apply for retirees and is irrelevant. The key actuarial assumptions used for the January 1, 2009 valuation were: Actuarial valuation date January 1, 2009 Actuarial cost method Entry Age Normal Amortization method Closed 30 years from 1/1/99, level dollars Asset valuation method Fair Value Assumptions: Investment rate of return 3.5% Projected salary increases 4.0% Price inflation 2.5% Growth in fire insurance premiums 2.5% NOTE 9 — OTHER POSTEMPLOYMENT BENEFIT (OPEB) PLAN Plan Description and Funding Policy 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 (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 LEOFFF hired prior to October 1, 1977. The Plan does not issue stand -alone financial statements and is not included in the City's or any other entity's financial statements. Triennially, a complete actuarial valuation financial report is prepared by Milliman USA, Incorporated. This report is available from the City. The City funds these benefits on a pay -as- you -go basis. 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. 71 CITY OF TUKWILA: 2008 CAFR NOTES TO THE FINANCIAL STATEMENTS Annual OPEB Cost and Net OPEB Obligation The City's annual other postemployment benefit (OPEB) cost (expense) is calculated based on the annual required contribution (ARC) of the City as the employer, and 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 not to exceed 30 years. The following tables show the components of the City's annual OPEB cost for 2008, the amount actually contributed to the plan (employer -paid benefits), and changes in the City's net OPEB obligation. Annual Cost: Annual Required Contribution Interest on Net OPEB Obligation Adjustment to Annual Required Contribution Annual OPEB Cost $ 1,366,284 $ 1,366,284 Net Obligation: Net OPEB Obligation — Beginning of Year $ Annual OPEB cost 1,366,284 Employer Contributions made (557,103) Net OPEB Obligation — End of Year $ 809,181 The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for 2008 was as follows: Contribution as a Annual Percentage of Net OPEB OPEB Cost Annual OPEB Cost Obligation $ 1,366,284 41.0% $ 809,181 Funded Status and funding Progress The funded status of the plan as of December 31, 2008, was as follows (expressed in thousands): Actuarial accrued liability (AAL) Actuarial value of plan assets Unfunded actuarial accrued liability (UAAL) $16,103 $16,103 Funded ratio (actuarial value of plan assets / AAL) 0.00% Covered payroll (active plan members) N/A UAAL as a percentage of covered payroll N/A 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. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multi -year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. 72 CITY OF TUKWILA: 2008 CAFR NOTES TO THE FINANCIAL STATEMENTS 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, 2009 Actuarial cost method Entry Age Normal Amortization method Closed, level percentage over 21 years Remaining amortization period 20 years Asset valuation method N/A — No assets Assumptions: Investment rate of return 5.0% Medical inflation 9.5% Dental inflation 5.0% Long -term care inflation rate 5.0% 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, 2008. 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 2000 Limited G.O facilities with $1,428,000 outstanding as of December 31, 2008 represents Tukwila's share of a joint venture capital project. See Note 7. 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. Public Works Trust Fund loans are low interest rate loans available from the Washington State Department of Community Development for qualifying projects. In 2005, the City of Tukwila entered into a capital lease agreement for financing the purchase of 34 golf carts. This business -type activity qualifies as a capital lease for accounting purposes, and therefore, has been recorded at the present value of the future minimum lease payments as of the inception date. The remaining balance on the lease at December 31, 2008 was $11,665 and will be paid off in 2009. The schedules that follow summarize the long -term debt transactions of the City for the year ended December 31, 2008. 73 CITY OF TUKWILA: 2008 CAFR NOTES TO THE FINANCIAL STATEMENTS LIMITED G.O. BONDS REVENUE BONDS PUBLIC WORKS TRUST FUND LOANS CAPITAL LEASES COMPENSATED ABSENCES TOTAL Outstanding 01/01/2008 Added Retired Outstanding 12/31/2008 Net deferred charges Total Long -Term Liabilities CHANGES IN LONG -TERM DEBT $ 22,025,000 6,180, 000 (7,692,000) $ 20,513,000 $ 5,525,000 $ 9,378,504 285,000 (360,000) (641,555) $ 5,165,000 $ 9,021,949 $ 45,587 $ 2,556,391 $ 39,530,482 2,186,293 8,651,293 (33,921) (2,008,467) (10,735,943) $ 11,666 $ 2,734,217 37,445,832 111,504 $ 37,557,336 ITEM Interest Rates Maturity Outstanding Authorized 12/31/07 Outstanding Due Within Issued Redeemed 12/31/08 One Year GOVERNMENTAL ACTIVITIES: Limited General Obligation (GO) Bonds Payable: 1999 Streets /Facilities 5.15 2000 Facilities 4.30 -5.75 2004 Refunding Facilities 4.00 -5.00 2003 Streets 4.25 -4.65 2009 Refunding Streets /Facilities 4.00 -6.00 Total Bonds Payable Unamortized Deferred Credits (Charges): Issuance premiums Issuance and refunding costs Net Bonds Payable 12/01/09 $ 10,000,000 $ 12/01/15 2,551,600 12/01/14 4,195,000 12/01/23 6,277,500 12/01/19 6,180,000 29,204,100 29,204,100 7,165,000 $ 1,595,000 2,885,000 6,277,500 6,180,000 $ 6,700,000 167,000 365,000 17,922,500 6,180,000 7,232,000 206,797 (182,963) 17,946,334 482,225 (480,803) 6,181,422 27,512 (20,627) 7,238,885 $ 465,000 1,428,000 2,520,000 6,277,500 6,180,000 16,870,500 $ 465,000 175,000 380,000 261,297 35,000 1,316,297 661,510 (643,139) 16,888,871 1,316,297 Compensated Absences: 2,350,887 2,002,596 1,818,347 2,535,136 60,000 Total Governmental Funds BUSINESS -TYPE ACTIVITIES: Bonds Payable: 1995 Water /Sewer Revenue 2003 Limited G.O. Golf Course 2006 Water /Sewer /SWM Revenue Total Bonds Payable Unamortized Deferred Credits (Charges): Issuance Premiums Issuance Discounts /Costs Net Bonds Payable 4.15 -6.63 3.21 -4.65 4.00 -4.50 Public Works Trust Fund Loans: 1990 Loan - Surface Water 1991 Loan - Surface Water 2003 Loan - Surface Water 2003 Loan - Water /Sewer 2003 Loan - Surface Water 2004 Loan - Water /Sewer 2004 Loan - Surface Water 02/01/15 12/01/23 12/01/26 $ 29,204,100 $ 20,297,221 $ 8,184,018 $ 9,057,232 $ 19,424,007 $ 1,376,297 $ 4,500,000 5,772,500 3,180, 000 13,452,500 $ 2,445,000 $ 4,102,500 3,080,000 9,627,500 13,452,500 5.00 1.00 0.50 0.50 0.50 0.50 -2.00 0.50 -2.00 2004 Loan - Surface Water 1.00 Total Public Works Trust Fund Loans Capital Lease: Compensated Absences: Total Business -Type Activities TOTAL ALL FUNDS 143,195 (43,161) 9,727,534 $ 250,000 $ 2,195,000 460,000 3,642,500 110,000 2,970,000 820,000 8,807,500 $ 260,000 218,703 115,000 593,703 12,996 130,199 6,093 (37,068) 839,089 8,900,631 593,703 07/01/10 140,000 22,107 - 7,370 14,737 7,368 07/01/11 1,313,000 203,571 - 50,893 152,678 50,893 07/01/08 100,000 25,000 25,000 - 07/01/21 273,870 202,360 14,454 187,906 14,454 07/01/21 219,725 162,351 - 11,596 150,755 11,596 07/01/24 5,016,000 4,388,267 250,800 272,886 4,366,181 272,886 07/01/24 684,000 598,400 34,200 37,212 595,388 37,212 07/01/24 4,196,056 3,776,450 - 222,144 3,554,306 222,144 11,942,651 9,378,506 285,000 641,555 9,021,951 616,553 128,605 45,587 33,921 11,666 11,666 205,504 183,697 190,120 199,081 25,000 $ 25,523,756 $ 19,357,131 $ 468,697 $ 1,704,685 $ 18,133,329 $ 1,246,922 $ 54,727,856 $ 39,654,352 $ 8,652,715 $ 10,761,917 $ 37,557,336 $ 2,623,219 Internal service funds predominantly serve the governmental funds. Accordingly, long -term liabilities for them are included as part of the above totals for governmental activities. At year -end, internal service 74 CITY OF TUKWILA: 2008 CAFR NOTES TO THE FINANCIAL STATEMENTS funds compensated absences are included in the above amounts. Also, for the governmental activities, claims and judgments and compensated absences are generally liquidated by the general fund. 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, 2008, the debt limits for the City were as follows: Item Without a Vote 1.5% With a Vote of the People 2.5% 5.0% 7.5% Legal Limit Outstanding Net Indebtedness Margin Available $ 77,635,650 21,881,765 $ 55,753,885 $ 129,392,749 21,881,765 $ 107,510,985 $ 258,785,499 $ 388,178,248 21,881,765 21,881,765 $ 236,903,734 $ 366,296,483 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. Year Ended December 31 Government Activities Business -Type Activities General Obligation Bonds General Obligation Bonds Revenue Bonds Public Works Trust Fund Loans Principal Interest Principal Interest Principal Interest Principal Interest 2009 2010 2011 2012 2013 2014 -2018 2019 -2023 2024 -2028 Totals $ 16,870,500 $ 1,316,297 1,419,028 1,475,774 1,530,707 1,531,453 6,273,443 3,323,798 $ 771,304 723,501 664,087 602,282 538,149 1,689,980 409,444 $ 218,703 184,972 192,226 201,293 208,547 1,180,557 1,456,202 $ 157,056 148,489 140,628 132,458 123,903 485,910 206,891 $ 5,398,747 $ 3,642,500 $ 1,395,335 $ 375,000 395,000 415,000 440,000 465,000 1,485,000 930,000 660,000 $ 5,165,000 $ 256,643 237,598 217,543 194,444 168,044 507,000 277,425 60,300 $ 1,918,997 $ 616,554 616,554 609,186 558,293 558,293 2,791,465 2,739,364 532.242 $ 9,021,951 $ 46,536 42,867 39,199 35,898 33,107 123,662 54,006 2,661 $ 377,936 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 Employees' Pension Benefit Totals $ 17,800 $ - $ 17,800 - 1,445,006 1,445,006 $ 17,800 $ 1,445,006 $ 1,462,806 NOTE 12 - CONSTRUCTION COMMITMENTS As of December 31, 2008 the City had $617,794 contractual obligations on construction projects. 75 CITY OF TUKWILA: 2008 CAFR NOTES TO THE FINANCIAL STATEMENTS 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 $ 99,815 Customer Deposits -- Foster Golf Course 64,053 Revenue Bond Reserve Account 430,444 Total Restricted Assets $ 594,312 NOTE 15 — RISK MANAGEMENT The City 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 129 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. 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. 76 CITY OF TUKWILA: 2008 CAFR NOTES TO THE FINANCIAL STATEMENTS 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 Sun Life Assurance Company, which provides individual limits of $110,000 and a plan limit of $6,539,702 in 2008. 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. The following table reflects changes in the balances of claims liabilities for 2008 and 2007. ITEM Insurance — Insurance — Insurance Insurance LEOFF I LEOFF I 2008 2007 2008 2007 Claims Liabilities at Beginning of Year $ 761,569 $ 729,613 $ 86,098 $ 100,496 Claims expenses: Current year and changes in estimates 4,416,452 3,855,847 395,005 417,222 Claims payments and expenses (3,987,381) (3,823,891) (370,079) (431,620) Claims Liabilities at End of Year $ 1,190,640 $ 761,569 $ 111,024 $ 86,098 NOTE 16 — SUBSEQUENT EVENTS SCORE Jail On January 20, 2009 the Tukwila City Council passed a resolution authorizing the Mayor to enter into an Interlocal Agreement with the cities of Auburn, Burien, Des Moines, Federal Way, Renton and SeaTac for the purpose of forming a Public Development Authority (Authority) for the construction and operation of a 77 CITY OF TUKWILA: 2008 CAFR NOTES TO THE FINANCIAL STATEMENTS jail facility in southern King County, Washington, known as the South Correctional Entity (SCORE). Under the terms of the Interlocal, the Authority is authorized to issue debt in the aggregate principal amount of not to exceed $100 million to finance the construction of the SCORE facility on behalf of the member cities and their residents. According to the Authority Charter, each member city is obligated to budget for and pay its share, and only its share, of the principal of and interest on the $100 million Series 2009 Bonds as they become due and payable. The portion allocable to each City is based on average daily jail bed population as of 2007. The City of Tukwila's proportionate share is eight percent. The debt obligation is an irrevocable, unconditional full faith and credit obligation of each City, payable from property taxes levied within the City and other sources of revenue as necessary to meet the City's obligation. It is anticipated the Authority will issue the bonds in the fall of 2009, with occupancy of the new jail in late 2011. Interest will be capitalized on the bonds during the construction period, with repayment beginning in 2012 after occupancy of the jail. Tukwila South Development Agreement At its June 8, 2009 meeting, the Tukwila City Council passed an ordinance authorizing the Mayor to enter into a development agreement with La Pianta LLC. The development agreement includes the annexation of approximately 259 acres in Tukwila's Potential Annexation Area (PAA) along the City's southwest border. The PAA is almost entirely undeveloped property with a current assessed valuation of approximately $8.6 million. Development of the PAA will be in accordance with the Tukwila South Master Plan and the new Tukwila South Overlay Zone, also adopted by City Council at its June 8, 2009 meeting. Among other things, the development agreement calls for an extension and realignment of Southcenter Parkway. Total construction costs will be approximately $26.8 million, to be paid with $18.55 million in federal and state grants, and up to $8.25 million in City issued general obligation bonds. The City will designate property taxes from the annexation area to pay for debt service on the first $6 million in bonds. Should it be necessary to issue the full $8.25 million in bonds, the developer will provide the City with a guarantee to pay for the incremental debt service on the additional $2.25 million in bonds should the increased property taxes not be enough to pay for the additional debt service. The City will track operations and maintenance costs within the project area. To the extent that the additional sales tax, real estate excise tax, utility taxes, business license fees and other revenue allocable to the PAA are not sufficient to pay for the operations and maintenance costs within the PAA, the developer has provided a $12 million guarantee. The guarantee is in the form of a $6 million letter of credit and a $6 million secured deed of trust on developer property. If the operations and maintenance costs exceed the allocable revenue, the City will invoice the developer for the difference up to a cumulative total of $12 million over 15 years. If necessary, the City may draw upon the letter of credit or foreclose upon its deed of trust up to the total $12 million operations and maintenance guarantee. 78 CITY OF TUKWILA: 2008 CAFR REQUIRED SUPPLEMENTAL INFORMATION REQUIRED SUPPLEMENTAL INFORMATION 79 CITY OF TUKWILA: 2008 CAFR REQUIRED SUPPLEMENTAL INFORMATION FIREMEN'S PENSION TRUST FUND SCHEDULE OF FUNDING PROGRESS (Rounded to Thousands) Valuation Date Actuarial Value of Assets Actuarial Unfunded Actuarial Accrued Accrued Liabilities Liabilities UAAL Funded Ratio Covered Payroll UAAL as a Percentage of Covered Payroll January 1, 2000 $ 1,076 $ 1,243 January 1, 2003 1,215 1,135 January 1, 2005 1,265 1,182 $ 167 (80) (83) 86.56% $ 112 107.05% 107.02% SCHEDULE OF EMPLOYER CONTRIBUTIONS 149.11% N/A N/A Fire Insurance Employer Premiums Contributions Total Fund Contributions Annual Required Contributions (ARC) Percentage of ARC Contributed December 31, 2003 December 31, 2004 December 31, 2005 December 31, 2006 December 31, 2007 December 31, 2008 $ 36,651 40,812 40,983 45,951 50,555 52,571 $ (3,875) (500) (11,250) (2,114) (8,575) (1,841) $ 32,776 40,312 29,733 43,837 41,980 50,730 $ (6,789) (6,789) (6,547) (6,547) (1,998) (1,998) 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 N/A Actuarial Value of Valuation Date Assets Actuarial Accrued Liabilities Unfunded Acturial Accrued Funded Liabilities (UAAL) Ratio Covered Payroll UAAL as a Percentage of Covered Payroll January 1, 2008 $ - $ 16,103 $ 16,103 0.0% N/A 0.0% The information presented in the preceding required schedules was determined as part of the actuarial valuations at the dates indicated. 80 CITY OF TUKWILA: 2008 CAFR REQUIRED SUPPLEMENTAL INFORMATION NOTES TO REQUIRED SUPPLEMENTARY INFORMATION FIREMEN'S PENSION TRUST FUND Valuation Date January 1, 2007 Actuarial Cost Method Entry Age Normal Amortization Method 30 -year, closed as of January 1, 1999 Remaining Amortization Period 21 years Asset Valuation Method Fair Value Actuarial Assumptions: Investment Rate of Return 5.00% Projected Salary Increases 4.00% Includes Inflation at 3.00% Cost of Living Adjustments Based upon salary increase assumption for FPF benefits, inflation assumption for LEOFF benefits. *Under the Firement's Pension Trust Fund, most adjustments are based on the change in salary for the rank of the 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 Valuation Date January 1, 2008 Actuarial Cost Method Entry Age Normal Amortization Method �21 -year, closed as of January 1, Remaining Amortization Period 21 years Asset Valuation Method Fair Value Actuarial Assumptions: Investment Rate of Return 5.00% Medical Trend Year Rate Year Rate 2008 9.50% 2013 7.00% 2009 9.00% 2014 6.50% 2010 8.50% 2015 6.00% 2011 8.00% 2016 5.50% 2012 7.50% 2017+ 5.00% Dental Trend 5.00% Long -Term Care Inflation Rate 5.00% 81 CITY OF TUKWILA: 2008 CAFR REQUIRED SUPPLEMENTAL INFORMATION 82 CITY OF TUKWILA: 2008 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. 83 CITY OF TUKWILA: 2008 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON COMBINING BALANCE SHEET NON -MAJOR GOVERNMENT FUNDS DECEMBER 31, 2008 TOTAL TOTAL TOTAL TOTAL NONMAJOR NONMAJOR NONMAJOR NONMAJOR SPECIAL REVENUE DEBT SERVICE CAPITAL PROJECTS GOVERNMENTAL FUNDS FUNDS FUNDS FUNDS ASSETS: CASH AND CASH EQUIVALENTS $ 1,797,117 $ 812,729 $ 5,103,952 $ 7,713,799 INVESTMENTS 587,001 162,400 817,603 1,567,004 RECEIVABLES: TAXES - 275,048 153,242 428,289 INTEREST ON INVESTMENTS 4,144 99 4,467 8,710 DUE FROM OTHER GOVERNMENTAL UNITS 160,313 814,968 975,281 TOTAL ASSETS $ 2,548,576 $ 1,250,275 $ 6,894,232 $ 10,693,083 LIABILITIES AND FUND BALANCES: CURRENT LIABILITIES: ACCRUED WAGES AND BENEFITS RETAINAGE PAYABLE OTHER CURRENT LIABILITIES DEFFERED REVENUE TOTAL LIABILITIES $ 11,635 $ - $ 4,104 $ 15,739 10,028 10,028 1,374 3,250 4,624 45,216 45,216 11,635 1,374 62,598 75,607 FUND BALANCES: UNRESERVED 2,536,941 1,248, 901 6,831,634 10, 617,476 TOTAL FUND BALANCES 2,536,941 1,248,901 6,831,634 10,617,476 TOTAL LIABILITIES AND FUND BALANCES $ 2,548,576 $ 1,250,275 $ 6,894,232 $ 10,693,083 84 CITY OF TUKWILA: 2008 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, 2008 TOTAL NONMAJOR SPECIAL REVENUE FUNDS TOTAL NONMAJOR DEBT SERVICE FUNDS TOTAL NONMAJOR CAPITAL PROJECTS FUNDS TOTAL NONMAJOR GOVERNMENTAL FUNDS REVENUES: TAXES INTERGOVERNMENTAL INVESTMENT EARNINGS MISCELLANEOUS TOTAL REVENUES EXPENDITURES: CURRENT: PHYSICAL ENVIRONMENT ECONOMIC ENVIRONMENT DEBT SERVICE PRINCIPAL INTEREST CAPITAL OUTLAY PUBLIC SAFETY PHYSICAL ENVIRONMENT TRANSPORTATION CULTURAL AND RECREATION F TOTAL EXPENDITURES EXCESS (DEFICIENCY) OF REVENUES ' OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES): TRANSFERS IN (Note 5) TRANSFERS OUT (Note 5) GENERAL OBLIGATION REFUNDING BONDS ISSUED PREMIUM ON GENERAL OBLIGATION REFUNDING DEBT ISSUANCE COSTS ON GENERAL OBLIGATION REFUNDING DEB PAYMENT TO REFUNDED BOND ESCROW AGENT TOTAL OTHER FINANCING SOURCES AND USES NET CHANGE IN FUND BALANCES FUND BALANCES - BEGINNING FUND BALANCES - ENDING 587,216 $ 841,441 58,703 7,751 1,495,111 1,370,631 584 167,592 1,538,807 (43,696) 1,819,177 $ 40,714 1,859,891 972,000 872,224 1,287,788 $ 1,430,797 227,548 68,938 3,015,071 213,843 1,565,856 2,461,591 1,844,224 4,241,290 3,694,180 2,272,238 326,966 76,689 6,370,073 213,843 1,370,631 972,000 872,224 584 1,565,856 167,592 2,461,591 7,624,321 15,667 (1,226,219) (1,254,248) 300,000 1,374 (1,374) 6,180,000 483,599 (108,326) (6,555,273) 300,000 256,304 15,667 (55,886) 2,280,637 1,233, 234 $ 2,536,941 $ 1,248,901 $ (55,886) (1,282,105) 8,113, 739 6,831,634 $ 301,374 (57,260) 6,180,000 483,599 (108,326) (6,555,273) 244,114 (1,010,134) 11,627,610 10,617,476 85 CITY OF TUKWILA: 2008 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES 86 CITY OF TUKWILA: 2008 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. 87 CITY OF TUKWILA: 2008 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON COMBINING BALANCE SHEET NON -MAJOR SPECIAL REVENUE FUNDS DECEMBER 31, 2008 TOTAL FIRE EQUIPMENT NONMAJOR HOTEL /MOTEL CUMULATIVE SPECIAL REVENUE TAX STREET CONTINGENCY RESERVE FUNDS ASSETS: CASH AND CASH EQUIVALENTS $ 428,980 $ 197,707 $ 816,466 $ 353,965 $ 1,797,117 INVESTMENTS 289,204 164,832 61,915 71,050 587,001 RECEIVABLES: INTEREST 3,493 570 38 43 4,144 DUE FROM OTHER GOVERNMENTAL UNITS 160,313 - - - 160,313 TOTAL ASSETS $ 881,991 $ 363,109 $ 878,418 $ 425,058 $ 2,548,576 LIABILITIES AND FUND BALANCES: ACCRUED WAGES AND BENEFITS PAYABLE $ 11,635 $ $ - $ $ 11,635 TOTAL LIABILITIES 11,635 - - 11,635 FUND BALANCES: UNRESERVED 870,356 363,109 878,418 425,058 2,536,941 TOTAL FUND BALANCES 870,356 363,109 878,418 425,058 2,536,941 TOTAL LIABILITIES AND FUND BALANCES $ 881,991 $ 363,109 $ 878,418 $ 425,058 $ 2,548,576 88 TOTAL FIRE EQUIPMENT NONMAJOR HOTEL/MOTEL CUMULATIVE SPECIAL REVENUE TAX STREET CONTINGENCY RESERVE FUNDS CITY OF TUKWILA: 2008 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, 2008 REVENUES: TAXES $ 587,216 $ $ - $ - $ 587,216 INTERGOVERNMENTAL 561,192 280,249 841,441 INVESTMENT EARNINGS 22,427 10,310 21,231 4,735 58,703 MISCELLANEOUS 7,501 - 250 7,751 TOTAL REVENUES 1,178,336 290,560 4,985 1,495,111 EXPENDITURES: CURRENT: ECONOMIC ENVIRONMENT 1,370,631 1,370,631 PUBLIC SAFETY - - 584 584 TRANSPORTATION 167,592 - - 167,592 TOTAL EXPENDITURES 1,370,631 167,592 584 1,538,807 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (192,295) 122,968 21,231 4,401 (43,696) OTHER FINANCING SOURCES (USES): TRANSFERS IN (Note 5) 300,000 300,000 TOTAL OTHER FINANCING SOURCES AND USES 300,000 300,000 NET CHANGE IN FUND BALANCES (192,295) 122,968 FUND BALANCES - BEGINNING 1,062,651 21,231 240,141 857,187 304,401 256,304 120,658 2,280,637 FUND BALANCES - ENDING ' $ 870,356 $ 89 363,109 $ 878,418 $ 425,058 $ 2,536,941 CITY OF TUKWILA: 2008 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, 2008 r VARIANCE WITH ORIGINAL FINAL FINAL BUDGET BUDGET BUDGET ACTUAL POSITIVE (GAAP BASIS) (GAAP BASIS) RESULTS (NEGATIVE) REVENUES: TAXES $ 600,000 $ 600,000 $ 587,216 $ (12,784) INTERGOVERNMENTAL 564,500 564,500 561,192 (3,308) INVESTMENT EARNINGS 20,000 20,000 22,427 2,427 MISCELLANEOUS 5,000 5,000 7,501 2,501 TOTAL REVENUES 1,189,500 1,189,500 1,178,336 (11,164) EXPENDITURES: CURRENT: ECONOMIC ENVIRONMENT 1,466,958 1,466,958 1,370,631 96,327 CAPITAL OUTLAY: ECONOMIC ENVIRONMENT 10,000 10,000 10,000 TOTAL EXPENDITURES 1,476,958 1,476,958 1,370,631 106,327 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (287,458) (287,458) (192,295) 95,163 NET CHANGE IN FUND BALANCES FUND BALANCES - BEGINNING FUND BALANCES - ENDING (287,458) (287,458) (192,295) 95,163 1,062,651 1,062,651 1,062,651 775,193 $ 775,193 $ 870,356 $ 95,163 90 CITY OF TUKWILA: 2008 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, 2008 IF VARIANCE WITH ORIGINAL FINAL FINAL BUDGET BUDGET BUDGET ACTUAL POSITIVE (GAAP BASIS) (GAAP BASIS) RESULTS (NEGATIVE) REVENUES: INTERGOVERNMENTAL $ 307,000 $ 307,000 $ 280,249 $ (26,751) INVESTMENT EARNINGS 10,000 10,000 10,310 310 TOTAL REVENUES 317,000 317,000 290,560 (26,440) EXPENDITURES: CAPITAL OUTLAY: TRANSPORTATION 300,000 300,000 167,592 767,592 TOTAL EXPENDITURES 300,000 300,000 167,592 132,408 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 17,000 17,000 122,968 105,968 NET CHANGE IN FUND BALANCES FUND BALANCES - BEGINNING FUND BALANCES - ENDING 17,000 17,000 122,968 240,141 240,141 240,141 105,968 $ 257,141 $ 257,141 $ 363,109 $ 105,968 91 CITY OF TUKWILA: 2008 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, 2008 VARIANCE WITH ORIGINAL FINAL FINAL BUDGET BUDGET BUDGET ACTUAL POSITIVE (GAAP BASIS) (GAAP BASIS) RESULTS (NEGATIVE) REVENUES: INVESTMENT EARNINGS $ 30,000 $ 30,000 $ 21,231 $ (8,769) TOTAL REVENUES 1111.r 30,000 30,000 21,231 (8,769) EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 30,000 30,000 21,231 (8,769) NET CHANGE IN FUND BALANCES 30,000 30,000 21,231 (8,769) FUND BALANCES - BEGINNING 857,187 857,187 857,187 - FUND BALANCES - ENDING $ 887,187 $ 887,187 $ 878,418 $ (8,769) 92 CITY OF TUKWILA: 2008 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, 2008 VARIANCE WITH ORIGINAL FINAL FINAL BUDGET BUDGET BUDGET ACTUAL POSITIVE (GAAP BASIS) (GAAP BASIS) RESULTS (NEGATIVE) REVENUES: INVESTMENT EARNINGS MISCELLANEOUS TOTAL REVENUES $ 20,000 $ 20,000 $ 4,735 $ (15,265) 250 250 20,000 20,000 4,985 (15,015) EXPENDITURES: CURRENT: PUBLIC SAFETY CAPITAL OUTLAY: PUBLIC SAFETY TOTAL EXPENDITURES EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 2,000 2,000 2,000 584 (584) 2,000 2,000 584 1,416 18,000 18,000 4,401 (13,599) OTHER FINANCING SOURCES (USES): TRANSFERS OUT (Note 5) TOTAL OTHER FINANCING SOURCES AND USES NET CHANGE IN FUND BALANCES FUND BALANCES - BEGINNING FUND BALANCES - ENDING 300,000 300,000 300,000 300,000 300,000 300,000 318,000 318,000 304,401 120,658 120,658 120,658 (13,599) $ 438,658 $ 438,658 $ 425,059 $ (13,599) 93 CITY OF TUKWILA: 2008 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES 94 CITY OF TUKWILA: 2008 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. 95 CITY OF TUKWILA: 2008 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON COMBINING BALANCE SHEET NON -MAJOR DEBT SERVICE FUNDS DECEMBER 31, 2008 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 $ 13,803 $ 262,345 $ 382,084 $ 153,124 $ 1,374 $ 812,729 INVESTMENTS 78,155 40,600 5,075 38,570 162,400 RECEIVABLES: TAXES 128,886 38,185 31,141 76,836 275,048 INTEREST ON INVESTMENTS 47 25 3 23 - 99 TOTAL ASSETS $ 220,892 $ 341,154 $ 418,303 $ 268,553 $ 1,374 $ 1,250,275 LIABILITIES AND FUND BALANCES: OTHER CURRENT LIABILITIES TOTAL LIABILITIES $ - $ - $ - $ - $ 1,374 $ 1,374 1,374 1,374 FUND BALANCES: UNRESERVED TOTAL FUND BALANCES 220,892 341,154 418,303 268,553 - 1,248,901 220,892 341,154 418,303 268,553 1,248,901 TOTAL LIABILITIES AND FUND BALANCES $ 220,892 $ 341,154 $ 418,303 $ 268,553 $ 1,374 $ 1,250,275 96 CITY OF TUKWILA: 2008 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, 2008 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 REVENUES: TAXES $ 830,000 $ 250,000 $ 250,000 $ 489,177 $ - $ 1,819,177 INVESTMENT EARNINGS 10,147 9,140 11,109 10,318 - 40,714 -ME TOTAL REVENUES 840,147 261,109 499,495 1,859,891 EXPENDITURES: DEBT SERVICE INTEREST 391,609 83,479 272,333 124,804 - 872,224 PRINCIPAL 440,000 167,000 365,000 - 972,000 1 TOTAL EXPENDITURES 831,609 250,479 272,333 489,804 - 1,844,224 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 8,538 8,661 (11,224) 9,692 15,667 OTHER FINANCING SOURCES (USES): TRANSFERS IN (Note 5) - TRANSFERS OUT (Note 5) (1,374) - GENERAL OBLIGATION REFUNDING BONDS ISSUED 6,180,000 PREMIUM ON GENERAL OBLIGATION REFUNDING DEBT 483,599 ISSUANCE COSTS ON GENERAL OBLIGATION REFUNDING DEBT (108,326) - PAYMENT TO REFUNDED BOND ESCROW AGENT (6,553,899) TOTAL OTHER FINANCING SOURCES AND USES 1,374 (1,374) 1,374 (1,374) 6,180,000 483,599 (108,326) (6,555,273) NET CHANGE IN FUND BALANCES 8,538 8,661 (11,224) 9,692 - 15,667 FUND BALANCES - BEGINNING 212,353 332,493 429,527 258,861 1,233,234 FUND BALANCES - ENDING $ 220,892 $ 341,154 $ 418,303 $ 268,553 $ - $ 1,248,901 97 CITY OF TUKWILA: 2008 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES 98 CITY OF TUKWILA: 2008 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. Land Acquisition, Recreation and Park Development Fund This special 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. 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. 99 TOTAL NONMAJOR CAPITAL PROJECTS FUNDS 1 CITY OF TUKWILA: 2008 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON COMBINING BALANCE SHEET NON -MAJOR CAPITAL PROJECT FUNDS DECEMBER 31, 2008 LAND ACQUISITION, RECREATION, AND PARK DEVELOPMENT FACILITY REPLACEMENT GENERAL GOVERNMENT IMPROVEMENTS ASSETS: CASH AND CASH EQUIVALENTS INVESTMENTS RECEIVABLES: TAXES INTEREST ON INVESTMENTS DUE FROM OTHER GOVERNMENTAL UNITS TOTAL ASSETS LIABILITIES AND FUND BALANCES: CURRENT PAYABLES: ACCRUED WAGES AND BENEFITS RETAINAGE PAYABLE OTHER CURRENT LIABILITIES DEFERRED REVENUES TOTAL LIABILITIES FUND BALANCES: UNRESERVED TOTAL FUND BALANCES OTAL LIABILITIES AND FUND BALANCES 2,830,377 $ 308,489 59,157 3,505 791,021 3,992,549 $ - $ 750 45,216 45,966 3,946,582 3,946,582 3,992,549 $ 100 1,718,752 $ 371,756 866 2,091,375 $ - $ 2,500 2,500 2,088,875 554,823 $ 137,357 94,085 96 23,947 810,308 $ 5,103,952 817,603 153,242 4,467 814,968 6,894,232 4,104 $ 10,028 14,132 796,177 4,104 10,028 3,250 45,216 62,598 6,831,634 2,088,875 796,177 6,831,634 2,091,375 $ 810,308 $ 6,894,232 CITY OF TUKWILA: 2008 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, 2008 LAND ACQUISITION, GENERAL TOTAL NONMAJOR RECREATION, AND FACILITY GOVERNMENT CAPITAL PROJECTS PARK DEVELOPMENT REPLACEMENT IMPROVEMENTS FUNDS REVENUES: TAXES $ 569,315 $ 131,526 $ 586,946 $ 1,287,788 INTERGOVERNMENTAL 1,359,016 - 71,780 1,430,797 INVESTMENT EARNINGS 125,067 76,680 25,802 227,548 MISCELLANEOUS 36,758 32,180 68,938 TOTAL REVENUES 2,090,157 240,385 684,528 3,015,071 EXPENDITURES: PHYSICAL ENVIRONMENT 34,312 - 179,531 213,843 CAPITAL OUTLAY PHYSICAL ENVIRONMENT 916,650 649,206 1,565,856 CULTURE AND RECREATION 2,461,591 - 2,461,591 TOTAL EXPENDITURES 2,495,903 916,650 828,737 4,241,290 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (405,746) (676,265) (144,209) (1,226,219) OTHER FINANCING SOURCES (USES): TRANSFERS OUT (Note 5) (55,886) (55,886) TOTAL OTHER FINANCING SOURCES AND USES (55,886) (55,886) NET CHANGE IN FUND BALANCES (461,632) (676,265) (144,209) (1,282,105) FUNDBALANCES - BEGINNING 4,408,214 2,765,139 940,385 8,113,739 FUND BALANCES - ENDING $ 3,946,582 $ 2,088,875 $ 796,177 $ 6,831,634 101 CITY OF TUKWILA: 2008 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES 102 CITY OF TUKWILA: 2008 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. 103 CITY OF TUKWILA: 2008 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON COMBINING STATEMENTS OF NET ASSETS INTERNAL SERVICE FUNDS DECEMBER 31, 2008 TOTAL INTERNAL EQUIPMENT INSURANCE- SERVICE RENTAL INSURANCE LEOFF I FUNDS ASSETS: CURRENT ASSETS: CASH AND CASH EQUIVALENTS $ 2,843,040 $ 2,205,980 $ 851,594 $ 5,900,615 INVESTMENTS 670,740 580,439 201,754 1,452,932 RECEIVABLES: INTEREST ON INVESTMENTS 4,143 6,988 1,450 12,580 INVENTORY OF MATERIALS AND SUPPLIES 38,000 - - 38,000 TOTAL CURRENT ASSETS 3,555,923 2,793,407 1,054,798 7,404,128 NONCURRENT ASSETS: DEFERRED CHARGES - 25,856 1,375 27,231 CAPITAL ASSETS: MACHINERY AND EQUIPMENT 8,461,082 - 8,461,082 LESS: ACCUMULATED DEPRECIATION (5,469,127) (5,469,127) 1 TOTAL CAPITAL ASSETS (NET OF A/D) 2,991,955 - - 2,991,955 TOTAL NONCURRENT ASSETS 2,991,955 25,856 1,375 3,019,186 TOTAL ASSETS 6,547,878 2,819,263 1,056,173 10,423,314 LIABILITIES: ACCRUED WAGES AND BENEFITS 17,446 - - 17,446 OTHER CURRENT LIABILITIES - 1,190,640 111,024 1,301,664 TOTAL LIABILITIES 17,446 1,190,640 111,024 1,319,110 NET ASSETS: INVESTED IN CAPITAL ASSETS, NET OF RELATED DEBT 2,991,955 - - 2,991,955 UNRESTRICTED 3,538,477 1,628,623 945,149 6,112,248 LTOTAL NET ASSETS $ 6,530,432 $ 1,628,623 $ 945,149 $ 9,104,203 104 CITY OF TUKWILA: 2008 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, 2008 TOTAL INTERNAL I EQUIPMENT INSURANCE- SERVICE RENTAL INSURANCE LEOFF I FUNDS OPERATING REVENUES: CHARGES FOR SERVICES $ 2,041,102 $ 5,011,764 $ 557,103 $ 7,609,968 OTHER OPERATING REVENUE - 869 1,590 2,459 TOTAL OPERATING REVENUES 2,041,102 5,012,633 558,693 7,612,427 OPERATING EXPENSES: OPERATIONS & MAINTENANCE ADMINISTRATION DEPRECIATION /AMORTIZATION 1,166,638 4,416,452 393,374 5,976,464 - 1,631 1,631 710,410 - 710,410 TOTAL OPERATING EXPENSES 1,877,048 OPERATING INCOME (LOSS) 4,416,452 395,005 6,688,506 164,053 596,180 163,688 923,921 NON - OPERATING REVENUE (EXPENSE): INVESTMENT EARNINGS SALE OF CAPITAL ASSETS TOTAL NON - OPERATING REVENUE (EXPENSE) INCOME (LOSS) BEFORE CONTRIBUTIONS & TRANSFERS TRANSFERS IN (Note 5) TRANSFERS OUT (Note 5) 109,188 170,976 280,164 68,111 26,178 68,111 26,178 203,478 170,976 374,454 444,218 664,292 189,866 1,298,375 160,000 - 160,000 (184, 665) (184, 665) CHANGE IN NET ASSETS 419,553 664,292 189,866 1,273, 710 TOTAL NET ASSETS BEGINNING OF YEAR 6,110,879 964,331 755,283 7,830,493 TOTAL NET ASSETS END OF YEAR $ 6,530,432 $ 1,628,623 $ 945,149 $ 9,104,203 105 CITY OF TUKWILA: 2008 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, 2008 Page 1 of 2 TOTAL INTERNAL EQUIPMENT INSURANCE - SERVICE RENTAL INSURANCE 6E.QFFI FUNDS CASH FLOWS FROM OPERATING ACTIVITIES: CASH RECEIVED FROM USERS $ 2,041,102 $ 5,011,764 $ 557,103 $ 7,609,968 CASH PAID TO SUPPLIERS (691,570) (4,442,308) (396,380) (5,530,258) CASH PAID FOR INVENTORY (69,767) (69,767) CASH PAID TO EMPLOYEES (397,333) (397,333) OTHER CASH RECEIVED (PAID) 429,940 26,516 456,456 NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES 882,432 187,239 2,069,065 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: TRANSFERS IN TRANSFERS OUT 160,000 (184,665) 160,000 (184,665 NET CASH PROVIDED (USED) BY NON - CAPITAL FINANCING ACTIVITIES (24,665) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: PROCEEDS FROM SALE OF EQUIPMENT 36,227 36,227 PURCHASE OF CAPITAL ASSETS (1,022,370) (1,022,370) PROCEEDS FROM INSURANCE SETTLEMENT 134,749 - 134,749 NET CASH PROVIDED (USED) FOR CAPITAL I AND RELATED FINANCING ACTIVITIES (851,394) CASH FLOW FROM INVESTING ACTIVITIES: PROCEEDS FROM SALE OF INVESTMENTS 2,105,810 125,000 125,000 2,355,810 PURCHASE OF INVESTMENTS (1,690,092) (578,000) (200,000) (2,468,092) INTEREST RECEIVED 121,509 59,366 23,655 204,531 r NET CASH PROVIDED (USED) IN INVESTING ACTIVITIES 537,227 (393,634) (51,345) 92,248 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 543,599 605,762 135,894 1,285,255 CASH AND CASH EQUIVALENTS- BEGINNING OF YEAR 2,299,441 1,600, 219 715,700 4,615,359 CASH AND CASH EQUIVALENTS -END OF YEAR $ 2,843,040 $ 2,205,980 $ 851,594 $ 5,900,614 CASH AT END OF YEAR CONSISTS OF: CASH AND CASH EQUIVALENTS • 2,843,040 $ 2,205,980 $ 851,594 $ 5,900,614 2,843,040 $ 2,205,980 $ 851,594 $ 5,900,614 106 CITY OF TUKWILA, WASHINGTON COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS FOR THE FISCAL YEAR ENDED DECEMBER 31, 2008 Page 2 of 2 CITY OF TUKWILA: 2008 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES I TOTAL INTERNAL EQUIPMENT INSURANCE - SERVICE RENTAL INSURANCE LEOFFI FUNDS RECONCILIATION OF NET OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES OPERATING INCOME (LOSS) $ 164,053 $ 596,180 $ 163,688 $ 923,921 ADJUSTMENTS TO RECONCILE OPERATING INCOME TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES: DEPRECIATION 710,410 710,410 ASSET (INCREASES) DECREASES: MISCELLANEOUSA/R - REVENUE (25,856) (1,375) (27,231) INVENTORY 2,000 2,000 LIABILITY INCREASES (DECREASES) : ACCOUNTS & VOUCHERS PAYABLE 5,969 429,071 24,926 459,966 1 TOTAL ADJUSTMENTS 718,379 403,215 23,551 1,145,145 r NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES $ 882,432 $ 999,395 $ 187,239 $ 2,069,065 SCHEDULE OF NONCASH INVESTING, CAPITAL AND FINANCING ACTIVITIES INCREASE (DECREASE) IN FAIR VALUE OF INVESTMENT 5,740 2,192 1,508 9,440 TOTAL NON CASH INVESTING, CAPITAL AND FINANCING ACTIVITIES $ 5,740 $ 2,192 $ 1,508 $ 9,440 107 CITY OF TUKWILA: 2008 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES 108 CITY OF TUKWILA: 2008 CAFR STATISTICAL SECTION City of Tukwila STATISTICAL SECTION December 31, 2008 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 110 Schedule 2 Changes in Net Assets 111 Schedule 3 Fund Balances of Governmental Funds 112 Schedule 4 Changes in Fund Balances of Governmental Funds 114 Schedule 5 General Governmental Tax Revenues by Source 116 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 117 Schedule 7 Assessed and Estimated Actual Value of Taxable Property 118 Schedule 8 Property Tax Rates - Direct and Overlapping Governments 119 Schedule 9 Principal Property Taxpayers 120 Schedule 10 Retail Sales Tax Collections by Sector 121 Schedule 11 Sales Tax Rate Direct and Overlapping Governments 122 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 123 Schedule 13 Ratios of General Bonded Debt Outstanding 124 Schedule 14 Computation of Direct and Overlapping Debt 125 Schedule 15 Legal Debt Margin Information 126 Schedule 16 Revenue Bond Coverage- Water and Sewer Bonds 127 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 128 Schedule 18 Principal Employers 129 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 Full -Time Equivalent City Government Employees by Function 130 Schedule 20 Operating Indicators by Function 131 Schedule 21 Capital Assets by Function 132 109 2002 aff 2003 2005 1 2006 III 2007 .2008 ja CITY OF TUKWILA: 2008 CAFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE NET ASSETS BY COMPONENT(a) LAST SEVEN FISCAL YEARS @I Governmental activities: Invested in capital assets, net of related debt $ 102,619,488 $ 118,950,364 $ 123,038,903 $ 129,855,251 $ 133,129,382 $ 136,053,013 $ 136,742,368 Restricted 389,322 809,002 1,107,362 1,305,239 1,305,239 1,233,234 19,720,546 Unrestricted 23,825,950 24,341,822 25,873,104 25,289,571 29,506,541 35,520,681 18,476,837 Total governmental activities net assets $ 126,834,760 $ 144,101,188 $ 150,019,369 $ 156,450,061 $ 163,941,162 $ 172,806,928 $ 174,939,751 Business -type activites: Invested in capital assets, net of related debt $ 29,032,974 $ 29,807,787 $ 30,848,350 $ 31,370,812 $ 34,017,190 $ 36,083,972 $ 36,071,402 Restricted 1,311,344 887,398 960,485 577,587 435,995 441,073 439,100 Unrestricted 8,785,499 9,070,664 9,664,654 9,909,896 12,070,451 11,267,171 13,335,836 Total governmental activities net assets $ 39,129,817 $ 39,765,849 $ 41,473,489 $ 41,858,295 $ 46,523,636 $ 47,792,216 $ 49,846,338 Primary government: Invested in capital assets, net of related debt $ 131,652,462 $ 148,758,151 $ 153,887,253 $ 161,226,063 $ 167,146,572 $ 172,136,985 $ 172,813,770 Restricted 1,700,666 1,696,400 2,067,847 1,882,826 1,741,234 1,674,307 20,159,646 Unrestricted 32,611,449 33,412,486 35,537,758 35,199,467 41,576,992 46,787,852 31,812,673 Total primary govemment net assets $ 165,964,577 $ 183,867,037 $ 191,492,858 $ 198,308,356 $ 210,464,798 $ 220,599,144 $ 224,786,089 (a) All amounts are reported on the accrual basis (b) Amounts presented from year of implementation of GASB -34 (2002) forward 110 CITY OF TUKWILA: 2008 CAFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 2 CHANGES IN NET ASSETS (a) 2006 2007 2008 Expenses Governmental Activities General Government Public Safety Physical Environment Transportation Economic Environment Mental and Physcial Health Culture and Recreation Interest on Long Term Debt Total Governmental Activities Business Type Activities $ 6,167,738 $ 6,421,839 $ 7,402,398 $ 7,456,335 $ 4,723,103 18,769,074 20,300,709 21,839,070 21,726,932 24,147,992 1,442,209 1,363,049 2,734,592 2,764,373 2,862,487 4,962,043 4,171,173 5,335,214 5,310,247 5,864,297 3,469,673 3,404,605 3,600,158 3,890,845 5,017,935 - 3,683 4,204 4,173 3,680,402 3,887,871 4,234,889 4,506,223 4,797,856 1,034,841 1,012,239 981,573 896,215 1,844,224 39,525,980 40,561,485 46,131,577 46,555,374 49,262,067 Water /Sewer Utility 6,774,102 7,105,020 7,354,876 7,046,603 7,293,362 Foster Golf Course 1,670,400 1,751,709 1,832,303 1,849,542 1,968,595 Surface Water Utility 1,625,579 1,685,663 1,642,204 1,920,194 1,762,417 Total Business Type Activities 10,070,081 10,542,392 10,829,383 10,816,339 11,024,374 Total Primary Government Expenses $ 49,596,061 $ 51,103,877 $ 56,960,960 $ 57,371,713 $ 60,286,4411 Program Revenues Governmental Activities Charges for Services General Government $ 781,653 $ 1,376,749 $ 1,243,936 $ 1,590,553 $ 895,966 Public Safety 937,873 1,328,369 538,576 425,241 1,184,530 Physical Environment 5,005 12,400 10,000 25,341 1,200 Transportation 102,614 122,201 247,026 133,500 130,637 Economic Environment 1,977,676 1,027,812 1,756,240 2,319,634 2,476,501 Cultural and Recreation 894,681 693,857 758,385 777,484 711,542 Operating Grants and Contributions 1,607,688 1,525,579 1,897,543 1,692,766 1,325,163 Capital Grants and Contributions 3,705,424 3,060,960 5,675,493 3,746,743 2,282,592 Total Govemmental Activities Program Revenues 10,012,614 9,147,927 12,127,199 10,711,262 9,008,131 Business Type Activities Charges for Services Water /Sewer Utility 7,620,572 7,604,711 7,354,876 8,272,647 8,621,909 Foster Golf Course 1,239,274 1,434,933 1,832,303 1,272,425 1,563,681 Surface Water Utility 1,819,703 1,839,760 1,642,204 2,208,549 2,642,325 Capital Grants and Contributions 588,891 319,439 1,255,360 347,416 756,400 Total Business Type Activities Program Revenues 11,268,440 11,198,843 12,084,743 12,101,037 13,584,315 Total Primary Government Program Revenues 21,281,054 20,346,770 24,211,942 22,812,299 22,592,446 Net (Expense) /Revenue Governmental Activities (29,513,366) (31,413,558) (34,004,378) (35,844,111) (40,253,937) Business Type Activities 1,198,359 656,451 2,031,638 1,284,700 2,559,941 Total Primary Government Net Expense $ (28,315,007) $ (30,757,107) $ (31,972,740) $ (34,559,411) $ (37,693,996) 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 Retail Sales and Use Tax 16,492,528 16,887,846 18,236,733 19,355,867 18,009,297 Natural Gas Use Tax 29,667 381,706 415,652 344,748 643,037 Hotel /Motel Tax 390,221 443,605 501,478 583,232 587,216 Utility Tax 2,309,787 2,646,356 2,930,332 3,666,079 5,136,444 Business Tax 1,614,587 1,732,739 2,097,082 2,236,675 2,497,705 Excise Tax 4,100,309 3,229,155 4,941,461 4,127,360 983,078 State Entitlements 191,589 192,816 185,475 217,600 874,046 Unrestricted Investment Earnings 416,483 768,097 1,923,171 1,727,879 801,847 Gain on Sale of Capital Assets - 106,776 467,510 13,652 (186,663) Transfers (450,000) 824,118 1,372,652 1,134,683 1,383,774 Total Governmental Activities 35,431,537 37,844,250 44,044,576 44,709,874 42,386,760 Business Type Activities Retail Sales and Use Taxes 228,458 241,723 645,473 500,000 500,000 Unrestricted Investment Interest 188,242 310,750 539,463 618,563 377,955 Transfers 450,000 (824,118) 1,250,000 (1,134,683) (1,383,774) Total Business Type Activities 866,700 (271,645) 2,434,936 (16,120) (505,819) Total Primary Government $ 36,298,237 $ 37,572,605 $ 46,479,512 $ 44,693,754 $ 41,880,941 Change in Net Assets Governmental Activities $ 5,918,171 $ 6,430,692 $ 7,491,102 $ 8,865,765 $ 2,132,823 Business Type Activities 2,065,059 384,806 4,580,734 1,268,580 2,054,122 Total Primary Government $ 7,983,230 $ 6,815,498 $ 12,071,836 $ 10,134,345 $ 4,186,945 (a) All amounts are reported on the accrual basis (b) Amounts presented from year of implementation of GASB -34 forward (2004 for capital assets) 111 CITY OF TUKWILA: 2008 CAFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE FUND BALANCES, GOVERNMENT FUNDS LAST SEVEN FISCAL YEARS ") (MODIFIED ACCRUAL BASIS OF ACCOUNTING) 2002 1 2003 2004 2005 2006 = 2007 = 2008 , General Fund Reserved $ 12,700 $ 613,000 $ 557,690 $ 557,690 $ 13,250 $ 12,650 $ 17,800 Unreserved 3,380,158 6,247,054 8,533,639 8,408,104 8,693,215 10,504,748 7,687,515 Total general fund $ 3,392,858 $ 6,860,054 $ 9,091,329 $ 8,965,794 $ 8,706,465 $ 10,517,398 $ 7,705,315 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 Debt service funds 389,322 809,012 1,107,362 1,305,239 1,075,347 1,233,234 1,248,901 Capital Projects funds 2,321,088 3,888,305 4,092,179 5,677,953 7,245,827 8,113,739 6,831,634 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 (1) Information available for 2002 -2008 only due to new accounting and reporting standards beginning 2002 with GASB Statement No. 34. 112 CITY OF TUKWILA: 2008 CAFR STATISTICAL SECTION 113 CITY OF TUKWILA: 2008 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 1999 2000 20-0711. 2002 Revenues Taxes $ 24,768,410 $ 23,381,378 $ 22,019,850 $ 28,156,041 Licenses and Permits 926,208 1,439,052 921,809 822,810 Intergovernmental 1,086,856 856,218 959,350 16,689,193 Charges for Services 1,158,173 1,857,182 1,232,149 1,201,080 Fines and Forfeitures 340,671 323,919 285,000 338,484 Investment Income 260,182 555,422 632,537 859,765 Miscellaneous 501,688 610,849 411,614 489,806 Total Revenues 29,042,188 29,024,020 26,462,309 48,557,179 Expenditures General Government 4,425,626 4,985,167 5,390,820 5,648,745 Public Safety 14,208,347 15,333,820 16,056,801 16,711,088 Physical Environment 581,748 1,060,844 805,029 1,228,774 Transportation 1,010,055 1,029,766 1,135,903 2,202,888 Economic Environment 2,131,187 2,103,066 2,349,462 2,974,513 Mental & Physical Health - - Culture and Recreation 1,796,008 1,935,736 2,110,344 2,457,973 Debt Service Principal 718,000 Interest - - 925,414 Bond Issuance Costs - - Capital Outlay 416,608 542,636 524,309 17,306,146 Total Expenditures 24,569,579 26,991,035 28,372,668 50,173,541 Excess (Deficiency) of Revenues 4,472,609 2,032,985 (1,910,359) (1,616,362) Over (Under) Expenditures Other Financing Sources (Uses) Transfers In - 1,706,973 Transfers Out (50,000) (175,000) (175,000) (1,845,331) Sale of Capital Assets 4,529 140,535 1,646 177,995 General Obligation Bonds Issued - - - General Obligation Refunding Bonds Issued Premium on General Obligation Debt Premium on General Obligation Refunding Debt Issuance Costs on General Obligation Refunding Debt Payment to Refunded Bond Escrow Agent Total Other Financing Sources (Uses) (45,471) (34,465) (173,354) 39,637 Net Change in Fund Balances $ 4,427,138 $ 1,998,520 $ (2,083,713) $ (1,576,725) Ratio of Debt Service Expenditures To Total Non - Capital Expenditures (a) All amounts are reported on the modified - accrual basis 114 5.3% CITY OF TUKWILA: 2008 CAFR STATISTICAL SECTION page 2 of 2 2003 2004 2005 2006 2007 2008 $ 31,986,222 $ 34,148,173 $ 34,624,875 $ 37,801,814 $ 39,660,792 $ 37,412,569 785,823 808,821 1,002,683 1,273,228 1,827,709 2,022,851 15,005,227 6,306,463 5,672,810 7,083,032 6,403,217 5,697,598 1,796,946 2,919,115 2,649,678 2,345,931 2,024,892 2,569,381 245,585 147,137 116,737 221,097 266,188 259,991 222,460 356,625 638,196 1,159,971 1,425,423 926,913 1,066,247 993,386 1,000,775 1,397,585 1,751,145 816,054 51,108,510 45,681,724 45,705,754 51,282,658 53,359,366 49,705,357 5,892,912 5,982,594 6,136,540 6,882,594 7,034,602 7,992,286 17,532,136 18,393,514 19,604,151 20,953,226 21,038,810 22,878,689 1,509,946 883,914 788,105 2,139,959 2,196,422 2,255,880 4,779,885 2,620,038 1,705,692 2,447,096 2,413,390 2,783,077 3,429,674 3,461,092 3,384,928 3,539,657 3,878,658 4,995,514 - - - 3,683 4,204 4,173 2,985,083 3,187,113 3,358,583 3,687,580 3,938,779 4,293,658 754,000 804,000 851,000 888,000 930,000 972,000 924,964 1,057,974 1,033,474 1,006,161 914,584 872,224 112,363 - - - - 15,636,782 8,057,070 7,344,326 6,540,452 7,243,879 6,089,703 53,557,745 44,447,309 38,070,259 48,088,408 49,593,328 53,137,204 (2,449,235) 1,232,411 1,498,955 3,194,250 4,036,039 (3,431,846) 5,513,212 350,000 150,000 2,143,581 2,266,349 2,515,982 (5,288,570) (900,000) (1,305,000) (2,430,769) (1,131,666) (1,107,543) 35,600 296,451 100 53,592 6,277,500 - - - - 4,195,000 - - 6,180,000 65,392 - - - 248,672 - - 483,599 - - - (108,326) (4,439,240) - (6,555,273) 6,571,966 (550,000) (1,119,400) 9,263 1,134,783 1,462,031 $ 4,122,731 $ 682,411 $ • 379,555 $ 3,203,513 $ 5,170,822 $ (1,969,815) 5.0% 5.4% 5.4% 4.8% 4.6% 4.1% 115 CITY OF TUKWILA: 2008 CAFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 5 GENERAL GOVERNMENTAL TAX REVENUES BY SOURCE LAST TEN FISCAL YEARS Fiscal Year i Property i Sales & Use Utility(e) Excise i Business Other(b) i Total Taxes 1999 $ 7,901,229 $ 16,132,619 $ $ 2,671,078 $ 327,859 $ 431,442 $ 27,464,227 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 change 1999- 2008 42.3% 9.8% 147.1% 12.4% 45.0% 152.5% 36.4% (a) Utility taxes enacted beginning in 2003. (b) "Other Taxes" include penalties and interest on delinquent taxes and other miscellaneous tax revenues. Source: City of Tukwila Finance Department 116 CITY OF TUKWILA: 2008 CAFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 6 PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS Current Tax Percent of Levy Delinquent Tax Total Tax % of Total Tax Fiscal Year Total Tax Levy Collections Collected Collections Collections Collections To Tax Levy 1999 $ 7,993,365 $ 7,745,197 96.90% $ 155,305 $ 7,900,502 98.84% 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% Source: King County Office of Finance 117 CITY OF TUKWILA: 2008 CAFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 7 ASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY LAST TEN FISCAL YEARS Fiscal Year Total Direct Tax Real Property Personal Property Public Utilities Total Assessed Value Rate 1999 $ 2,112,275,730 $ 579,434,372 $ 55,946,225 $ 2,747,656,327 $ 3.10000 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 *Real, personal, and state public service property have been assessed at 100% of the estimated value. Source: King County Department of Assessments 118 CITY OF TUKWILA: 2008 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 Medical Tukwila School Hospital Fiscal Year General Levy Special Levy Total WA State King Count?) Port of Seattle Service Dist #406 Flood Control District #1 Total 1999 $ 3.10000 $ - $ 3.10000 $ 3.30278 $ 1.68951 $ 0.21585 $ 0.27299 $ 5.91717 $ 0.05209 $ 0.11830 $ 14.66869 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 022359 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 lal Includes King County Library District tax. Source: King County Department of Assessments 119 CITY OF TUKWILA: 2008 CAFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 9 PRINCIPAL PROPERTY TAXPAYERS CURRENT YEAR AND NINE YEARS AGO Name Type of Business 2008 Assessed Valuation Percent of 2008 Total Assessed Valuelal 1999 Assessed Valuation Percent of 1999 Total Assessed Valuelbl Boeing Company WEA Southcenter LLC La Pianta LP KIR Tukwila 050 LLC /KIMCO Rreef America Reit II Corporation Boeing Employees Credit Union Walton CWWA Eproperty Tax Incorporated Sterling Realty Organization Sea -Tuk Warehouse LLC Federated Department Stores (Macys) TTA/E Property Tax Dept Anne Arundel Apartments LLC (Group Health) Puget Sound Energy /Gas - Electric BRCP Riverview Plaza LLC Southcenter Corporate Square Jorgensen Forge Corporation Koar - Seatac Partners LP Merrill Creek Holding LLC (Kenworth Motors) CHA Southcenter LLC (Doubletree Inn) Harnish Group Incorporated Wig Properties LLC (JC Penney) Lowe's HIW Incorporated Qwest Corporation Westfield Hill Investment Company Southcenter Joint Ventures MBK Properties (Trammell Crow) Gateway Properties Group Health Cooperative Tractor Equipment Company Pacific Gulf Properties Associated Grocers Airplane company Department Stores Commercial Properties Commercial Properties Commercial Properties Credit Union Investment Property Commercial Properties Food Distribution Department Stores Commercial Properties Apartments Electric /Gas Utility Commercial Properties Hair Loss Center Steel Manufacturer Lodging Truck Manufacturer Lodging Truck Equipment Department Stores Home Improvement Telephone Utility Commercial Properties Commercial Properties Department Stores Commercial Properties Commercial Properties Healthcare Admiin Truck Equipment Property Management Food Distribution $ 548,000,475 302,586,200 117,844,205 95,880,480 69,421,300 47,777,584 37,112,200 35,981,100 35,598,100 31,200,200 30,831,200 29,708,200 28,036,339 27,088,600 26,465,000 26,115,389 23,327,718 21,886,500 19,979,480 17,267,495 15,977,900 15,508,451 11,584,382 10,910,888 8,219,300 10.63% 5.87% 2.29% 1.86% 1.35% 0.93% 0.72% 0.70% 0.69% 0.61% 0.60% 0.58% 0.54% 0.53% 0.51% 0.51% 0.45% 0.42% 0.39% 0.33% 0.31% 0.30% 0.22% 0.21% 0.16% $ 550,858,183 20.0% 58,709,282 2.1% 26,868,592 1.0% 27,315,566 1.0% 21,379,757 0.8% 16,023,354 20,752,489 38,036,281 26,528,428 21,942,531 14,670,371 16,857,350 8,883,800 88,540,801 74,454,100 41,525,900 19,124,407 18,670,054 18,552,100 16,640,500 $ 1,634,308,686 31.70% $ 1,126,333,846 0.6% 0.8% 1.4% 1.0% 0.8% 0.5% 0.6% 0.3% 3.2% 2.7% 1.5% 0.7% 0.7% 0.7% 0.6% 41.0% Source: King County Department of Assessments (a) In 2008 the total assessed property value in the City of Tukwila was $5,155,404,039. (b) In 1998 the total assessed property value in the City of Tukwila was $2,575,510,077. 120 CITY OF TUKWILA: 2008 CAFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 10 RETAIL SALES TAX COLLECTIONS BY SECTOR LAST TEN FISCAL YEARS Major Industry Sector 1999 2000 2004: 2002 2003 2004 2005(a) 2006 2007 2008 Construction and Contracting $ 1,359,477 $ 3,192,100 $ 2,104,156 $ 991,702 $ 1,119,595 $ 958,758 $ 676,427 $ 1,166,088 $ 2,018,058 $ 1,967,785 Finance, Insurance & Real Estate 61,567 51,612 108,262 57,919 54,992 82,794 102,130 93,747 121,879 118,780 Manufacturing 552,560 568,041 596,052 563,919 520,474 446,965 503,778 450,138 590,455 375,263 Transportation, Communications & Utilities 236,790 353,000 360,441 350,258 377,596 387,148 384,703 436,260 483,419 492,960 Wholesale- Durable /Non- durable Goods 2,218,192 1,730,497 1,470,187 1,374,271 1,761,749 1,862,528 2,337,018 2,048,517 2,457,437 1,760,449 Retail Trade - General Merchandise 2,642,582 2,708,649 2,591,680 2,570,883 2,545,631 2,574,671 2,563,103 2,667,481 2,571,601 2,231,745 Retail Trade - Furniture /Home Furnishings 1,896,591 1,957,687 1,862,336 1,815,168 2,304,037 2,405,967 2,342,553 2,531,049 2,399,347 1,830,576 Retail Trade - Miscellaneous 1,750,154 2,066,226 2,115,104 2,044,562 1,723,147 1,735,045 1,497,474 1,642,722 1,766,853 1,718,898 Retail Trade - Clothing & Accessories 1,037,450 1,107,815 1,134,102 1,175,074 1,197,591 1,247,109 1,636,183 1,704,213 1,838,646 2,103,630 Retail Trade - Restaurants 732,639 936,411 900,496 887,103 933,886 1,031,625 1,072,275 1,119,859 1,158,424 1,312,603 Retail Trade - Automotive /Gas 736,722 792,951 770,063 768,664 847,864 982,413 980,006 1,053,184 1,026,778 1,066,183 Retail Trade - Building Materials 712,613 666,679 627,140 712,723 763,013 850,109 815,379 855,243 777,870 619,657 Service Industries - Business 991,527 1,166,278 493,806 824,497 530,833 488,857 979,752 1,141,632 1,198,690 1,129,380 Service Industries - Hotels 403,262 451,098 418,051 357,940 361,789 355,514 406,547 453,376 531,836 548,962 Service Industries - Other 326,953 371,467 386,590 373,911 507,935 486,215 278,041 278,777 294,869 318,696 All Other Categories 185,084 367,826 70,289 296,953 292,827 288,169 188,540 205,644 179,421 185,312 Total Retail Sales Tax Collections 1 $ 15,844,163 $ 18,488,337 $ 16,008,755 $ 15,165,547 $ 15,842,959 $ 16,183,887 $ 16,763,909 $ 17,847,930 $ 19,415,583 $ 17,780,879 (6 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. Sources: City of Tukwila Finance Department and Washington State Department of Revenue. Note: By State law, the City of Tukwila is prohibited from reporting individual sales tax payers. 121 CITY OF TUKWILA: 2008 CAFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 11 SALES TAX RATE DIRECT AND OVERLAPPING GOVERNMENTS LAST TEN FISCAL YEARS 1999 2000 i 2001(a) 2002 2003 2004 2005 I 2006 2007(d) 2008(e) BASIC SALES TAX RATES City of Tukwila 0.84% 0.84% 0.84% 0.84% 0.84% 0.84% 0.84% 0.84% 0.84% 0.84% Washington State 6.50% 6.50% 6.50% 6.50% 6.50% 6.50% 6.50% 6.50% 6.50% 6.50% King County 0.15% 0.15% 0.15% 0.15% 0.15% 0.15% 0.15% 0.15% 0.15% 0.25% Regional Transit Authority 0.40% 0.40% 0.40% 0.40% 0.40% 0.40% 0.40% 0.40% 0.40% 0.40% Metro 0.60% 0.60% 0.80% 0.80% 0.80% 0.80% 0.80% 0.80% 0.90% 0.90% Criminal Justice 0.10% 0.10% 0.10% 0.10% 0.10% 0.10% 0.10% 0.10% 0.10% 0.10% Department of Revenue 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% 8.60% 8.80% 8.80% 8.80% 8.80% 8.80% 8.80% 8.90% 9.00% SPECIAL SALES TAX RATES Restaurants (b) 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% Motor Vehicles i ` I 0.00% 0.00% 0.00% 0.00% 0.30% 0.30% 0.30% 0.30% 0.30% 0.30% tal 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. tbl King County Food & Beverage tax is in addition to the combined sales tax rate for restaurants, tavems and bars. The funds are used to finance the professional baseball stadium in Seattle. t`I Effective July 1, 2003, all retail sales, leases and transfers of motor vehicles are subject to the additional sales fax 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. tal Effective April 1, 2008, King County increased the local sales & use tax rate one -tenth of one percent (.001). The tax will be used for chemical dependency or mental health treatment services. Source: Washington State Department of Revenue Local Sales and Use Tax Rates. 122 1999 2000 2001 2002181 2003 2006 2007 2008 $ 21,751,767 $ 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 CITY OF TUKWILA: 2008 CAFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 12 RATIOS OF OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS GOVERNMENTAL ACTIVITIES General Obligation Bonds $ 15,170,000 $ 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 Special Assessments 25,000 - - - - - - - - - Total Governmental Activities 15,195,000 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 BUSINESS -TYPE ACTIVITIES General Obligation Bonds - - - - 5,772,500 5,382,500 4,972,500 4,547,500 4,102,500 3,642,500 Revenue Bonds 5,865,000 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 Public Works Trust Fund Loans 691,767 633,506 650,245 573,234 1,032,364 2,924,739 4,911,253 9,781,151 9,378,506 9,021,951 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 Total Business -Type Activities 6,556,767 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 TOTAL PRIMARY GOVERNMENT' Population I0' 14,840 17,181 17,230 17,270 17,270 17,240 17,110 17.930 18,000 18,080 Per Capita Personal Income l`I $ 42,218 $ 44,418 $ 43,734 $ 44,153 $ 44,704 $ 49,533 $ 48,789 $ 52,655 Percentage of Personal Income 3.47% 3.05% 2.95% 2.77% 4.24% 3.87% 3.97% 4.16% Debt Per Capita $ 1,466 $ 1,357 $ 1,290 $ 1,225 $ 1,897 $ 1,915 $ 1,935 $ 2,193 fe1 For years 1999 through 2002, premiums and discounts were omitted on all bonds. rol Details regarding the City's outstanding debt can be Pound in the Notes to the Financial Statements section. (c) Reference SCHEDULE 17, Demographic Statistics, for population and personal income data. Sources: City of Tukwila Finance Dept., Department of Community Development, and Office of the City Clerk. "'' Data not available at time of publication. 123 CITY OF TUKWILA: 2008 CAFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 13 RATIOS OF GENERAL BONDED DEBT OUTSTANDING LAST TEN FISCAL YEARS Ratio of Net Net Debt Payable Bonded Debt Bonded Fiscal Gross Bonded Less Debt from Enterprise Net Bonded to Assessed Debt per Year Population Assessed Value Debt Service Funds Revenue?) Debt Value Capita 1999 14,840 $ 2,747,656,327 $ 15,170,000 $ 1,614 $ $ 15,168,386 0.55% $ 1,022 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 Sources: State of Washington Office of Financial Management King County Department of Assessments City of Tukwila Finance Department (a) These amounts are the general obligation bonds that are being repaid by the Foster Golf Course Fund. 124 CITY OF TUKWILA: 2008 CAFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 14 COMPUTATION OF DIRECT AND OVERLAPPING DEBT AS OF DECEMBER 31, 2008 Jurisdiction Net General Percentage Estimated Obligation Debt Applicable to Applicable to Outstanding Tukwila Tukwila Direct: City of Tukwila $ 23,125,007 Overlapping: King County King County Library Port of Seattle Tukwila School District #406 Hospital District #1 Total Overlapping Debt: Total Direct and Overlapping Debt: 1,048,574,000 66,359,355 378,065,000 34,752,761 41,270,000 1,569,021,116 $ 1,592,146,123 Sources: King County Office of Finance King County Office of Assessments 125 100.00% 1.34% 0.88% 1.34% 90.11% 4.65% $ 23,125,007 14,050,892 583,962 5,066,071 31 ,315,713 1,919,055 52,935,693 $ 76,060,699 CITY OF TUKWILA: 2008 CAFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 15 LEGAL DEBT MARGIN INFORMATION LAST TEN FISCAL YEARS Legal Debt Margin Calculation for Fiscal Year 2008 Description Councilmanic General Excess Levy Excess Levy Total Debt Voted Purpose Utility Open Space Debt (Non- Voted) Debt Indebtedness Purposes and Park Capacity Assessed Value $ 5,175,709,975 $ 5,175,709,975 $ 5,175,709,975 $ 5,175,709,975 $ 5,175,709,975 $ 5,175,709,975 Statutory Debt Limit 1.50% 1.00% 2.50% 2.50% 2.50% 7.50% Debt Limit $ 77,635,650 $ 51,757,100 $ 129,392,749 $ 129,392,749 $ 129,392,749 $ 388,178,248 Debt Applicable to Limit: Bonds Outstanding $ 20,513,000 $ - $ 20,513,000 $ $ - $ 20,513,000 Capital Lease 11,666 11,666 - - 11,666 Compensated Absences 2,600,341 - 2,600,341 - - 2,600,341 Less: Cash -on -Hand for Debt Redemption 240,702 - 240,702 - - 240,702 Investments 651,123 - 651,123 - - 651,123 Current Taxes Receivable 351,417 - 351,417 - - 351,417 21,881,765 - 21,881,765 - 21,881,765 Remaining Debt Capacity $ 55,753,885 $ 51,757,100 $ 107,510,985 $ 129,392,749 $ 129,392,749 $ 366,296,483 Legal Debt Margin Calculation for Last Ten Years Total Net Debt Debt Limit Applicable to Limit Legal Debt Margin Total Net Debt Applicable to Limit as a Percentage of Debt Limit 1999 $ 206,074,224 $ 15,168,386 $ 190,905,838 7.36% 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% 126 CITY OF TUKWILA: 2008 CAFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 16 REVENUE BOND COVERAGE - WATER AND SEWER BONDS LAST TEN FISCAL YEARS Net Revenue Gross Operating Available for Debt Average Annual Debt Service Requirements Times Fiscal Year Revenue(a) Expenses(b) Service Principal Interest Total Coverage 1999 $ 6,949,624 $ 4,747,448 $ 2,202,176 $ 368,235 $ 167,678 $ 535,913 $ 4.11 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 (a) Includes operating and non - operating revenue. (b) Includes operating expenses and non - operating expenses exclusive of depreciation, amortization and interest charges. Sources: City of Tukwila Finance Department 127 CITY OF TUKWILA: 2008 CAFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 17 DEMOGRAPHIC STATISTICS LAST TEN FISCAL YEARS Fiscal Year Population Tukwila Per Capita Number of Number of School Personal Personal Single - Family Multi - Family District Unemployment Income la! Income (b) Homes Units Enrollment Rate (°) 1999 14,840 $ 42,218 $ 626,515 3,303 4,196 2,550 4.4% 2000 17,181 44,418 763,146 3,364 4,196 2,562 5.5% 2001 17,230 43,734 753,537 3,371 4,196 2,410 6.9% 2002 17,270 44,153 762,522 3,433 4,196 2,474 8.3% 2003 17,270 44,704 772,038 3,468 4,196 2,568 8.4% 2004 17,240 49,533 853,949 3,732 4,107 2,628 7.0% 2005 17,110 48,789 834,780 3,791 4,107 2,650 6.4% 2006 17,930 52,655 944,104 3,838 4,107 2,698 5.7% 2007 18,000 * ** * ** 3,864 4,107 2,862 5.0% 2008 18,080 * ** * ** 3,858 4,107 2,769 5.9% Sources: City of Tukwila Planning Division, Department of Community Development State of Washington Office of Financial Management Washington State Employment Security Department Tukwila School District #406 US Bureau of Economic Analysis (a) Per Capita Personal Income data are estimates for King County. Specific data for City of Tukwila is not available. Per Capita Personal Income was computed using Census Bureau midyear population estimates. Estimates for 2000 -2008 reflect county population estimates available as of April 2008. (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. 128 CITY OF TUKWILA: 2008 CAFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 18 PRINCIPAL EMPLOYERS CURRENT YEAR AND NINE YEARS AGO Name of Company /Employer Product or Business 2008 Full & Part-Time Employment Percentage of Total City Employees 1999 Full & Part-time Employment Percentage of Total City Employees Boeing Company Group Health Cooperative King County Metro Carlyle, Inc. Nordstrom, Inc. Macy's Costco Wholesale Red Dot Corporation City of Tukwila United Parcel Service Sub -total - Major Employers All Other Employment Airplane company Data Ctr /Lab /Pharmacy /Mfg. Transit operating base Wire /Cable Connectors Department Store Department Store Cash /carry Warehouse Heater /Air Conditioning Equipment Government Postal Delivery Service 7,790 1,784 827 636 629 595 521 454 445 407 14,088 29,852 17.73% 4.06% 1.88% 1.45% 1.43% 1.35% 1.19% 1.03% 1.01% 1.03% 9,560 500 700 166 400 490 453 345 295 499 13,408 29,153 TOTAL EMPLOYMENT 43,940 42,561 129 22.46% 1.17% 1.64% 0.39% 0.94% 1.15% 1.06% 0.81% 0.69% 1.17% CITY OF TUKWILA: 2008 CAFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 19 FULL -TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION LAST SEVEN FISCAL YEARS 2002(a) 2003 2004 2005 2006 2007 2008 FUNCTION General Government 41.25 Public Safety Police Commissioned Officers Non - Commissioned Officers Fire Commissioned Officers Non - Commissioned Officers Planning /Building /Public Works Administration /Development Services Transportation Systems Utility Systems Maintenance Services 41.25 43.25 68.00 68.00 68.00 13.00 14.00 15.00 62.00 64.00 64.00 4.00 4.00 4.00 28.88 31.50 9.00 9.00 18.50 18.50 26.50 26.50 32.50 9.00 18.50 26.50 45.25 49.00 68.00 68.00 15.00 16.00 64.00 64.00 4.00 4.00 32.50 37.00 10.00 10.00 18.50 18.50 27.50 30.50 49.25 58.88 68.00 15.00 62.00 4.00 34.00 9.00 18.50 30.50 68.00 16.00 62.00 4.00 39.50 8.00 19.50 25.50 Culture and Recreation Parks and Recreation 22.50 22.50 22.50 24.75 28.75 26.75 26.75 Pool 2.00 3.00 3.00 3.75 4.00 3.75 3.75 Golf Course 11.00 11.00 11.75 9.50 10.25 9.50 10.00 TOTAL 306.63 313.25 318.00 (a) Comparable information not available for years prior to 2002. 130 322.75 340.00 330.25 341.88 CITY OF TUKWILA: 2008 CAFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 20 OPERATING INDICATORS BY FUNCTION LAST TEN FISCAL YEARS 1 1999 la 2000 2001 2002 2 i 2004 2005 2006 2007 2008 FUNCTION Police Number of Calls for Service 32,683 31,189 30,671 30,106 31,000 30,032 32,922 33,686 33,985 35,816 Fire Number of Responses 4,367 4,395 3,865 4,100 4,250 4,229 4,710 4,921 4,673 4,824 Total Fire Loss $ 1,553,420 $ 1,328,726 $ 1,995,850 $ 485,765 $ 910,655 $ 910,655 $ 1,414,741 $ 2,982,265 $ 3,065,005 $ 2,300,685 Total Inspections 5,955 6,197 5,866 4,516 5,549 5,855 5,482 4,705 4,845 6,787 Parks and Recreation Class Participants 40,000 50,300 60,000 61,000 61,000 64,000 64,000 64,000 98,087 109,273 Admissions 38,000 47,300 43,600 35,500 30,800 35,150 33,750 34,850 90,141 117,533 Rounds of Golf Played 66,042 66,317 60,311 57,490 Iel 35,764 53,070 54,449 55,195 55,446 53,565 Pool Attendance ** ** ** ** 42,917 59,996 72,778 72,963 57,624 59,077 Street Miles 77 77 77 77 79 79 79 79 79 79 Streets /Sidewalks * 13,425 14,587 13,706 15,243 16,970 17,540 19,840 Signalized Intersections 59 59 59 59 61 61 61 61 63 63 Signals /Lights * * * 6,388 6,855 6,445 9,054 7,642 7,540 7,540 Water Utility Services Total Customers 1,961 2,012 2,027 2,027 2,079 2,107 2,164 2,117 2,113 2,109 Total Gallons/Water(in thousands) 778,402 771,149 693,116 683,065 702,364 765,000 886,000 789,981 680,649 660,915 Sanitary Sewer Total Customers 1,525 1,586 1,622 1,622 1,671 1,698 1,710 1,720 1,718 1,684 Surface Water Total Customers 4,931 4,989 5,019 5,019 5,015 5,064 5,100 5,107 5,156 5,164 Licenses Business Licenses 2,265 2,205 2,159 2,160 2,262 2,292 2,286 2,354 2,350 2,523 Amusement Licenses 19 19 18 18 22 22 19 21 22 22 Permits Building Permits 452 452 415 401 353 364 430 422 425 423 Mechanical Permits 248 273 218 238 183 182 193 239 238 256 Electrical Permits N/A N/A N/A N/A N/A N/A N/A N/A 758 1,533 Plumbing Permits N/A N/A N/A N/A N/A N/A N/A 192 306 264 Public Works Permits 92 161 134 114 83 97 112 144 136 154 Libraries Number of Libraries 2 2 2 2 2 3 3 3 3 3 Total Circulation 121,637 135,276 140,680 143,150 121,468 215,115 215,115 320,794 306,001 303,665 (el Construction of new clubhouse completed and opened in 2003. Sources: City of Tukwila Departments, King County Library System * Information not available. ** Pool facilities acquired from King County in 2003. 131 CITY OF TUKWILA: 2008 CAFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 21 CAPITAL ASSETS BY FUNCTION LAST TEN FISCAL YEARS 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 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 8.6 63 63 57 63 59 63 64 64 64 57 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 8 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 N/A N/A N/A N/A N/A 1 1 2 2 Transportation Paved Streets (lane miles) 163 163 163 163 163 163 163 163 163 163 Sidewalks (miles) 54 54 54 54 54 54 54 54 54 54 Number of Traffic Signals 55 55 55 55 55 55 55 55 57 57 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 670 670 670 670 670 670 670 670 670 670 Culture and Recreation Parks Acreage ta) 136 136 140 143 158 158 158 161 160 162 Number of Parks 11 11 12 13 15 15 15 16 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 11 Number of Playgrounds 11 11 11 11 13 13 13 13 13 13 Swimming Pool N/A N/A N/A N/A 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 2 3 3 3 3 3 Water Water Distribution Mains (miles) 45 45 45 45 45 45 45 45 47.4 47.4 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) 499 499 509 509 513 527 533 537 555 572 Vehicles 4 4 6 6 7 6 7 7 8 8 Sewer Sanitary Sewers (miles) 33 33 33 33 33 33 33 33 36.9 36.9 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 8 3 3 3 3 3 5 5 6 Surface Water Storm Drains (miles) (b) 55 56 57 57 58 59 60 62 67 67 Vehicles 6 6 4 4 4 5 5 4 4 4 Sources: City of Tukwila Departments la) 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. 132