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Home My WebLink About2022 Comprehensive Annual Financial Report (CAFR)U�►TCOMPREHENSIVE FINANCIAL REPORT For the fiscal year ended December 31, 2022 City of Tukwila, Washington VISION The city of opportunity, the community of choice 1 2 3 4 5 MISSION To provide superior services that support a safe, inviting and healthy environment for our residents, businesses and guests. VALUES Caring Professional Responsive STRATEGIC GOALS AND OBJECTIVES A community of inviting neighborhoods and vibrant business districts + Cultivate community ownership of shared spaces. + Build a broad and collaborative approach to preventing crime and increasing the sense of safety. + Focus City planning and investments on creating a connected, dynamic urban environment. + Use City efforts and investments to realize established visions for specific sub -areas. + Build and maintain public infrastructure that supports a healthy and attractive built and natural environment. A solid foundation for all Tukwila residents + Partner with organizations that help meet the basic needs of all residents. + Strive for excellent education, vocational supports, and personal growth opportunities through effective partnerships and City services. + Encourage maintenance, improvements and diversity in the City's housing stock. + Work to eliminate systemic barriers and provide equitable access to opportunities and services as outlined in the City's Equity Policy. A diverse and regionally competitive economy + Embrace the City's economic potential and strengthen the City's role as a regional business and employment center. + Strengthen the City's engagement and partnership with the business community. + Encourage development, maintenance, improvements, and diversity in the City's stock of business space. A high -performing and effective organization + Use Tukwila's Vision, Mission, and Strategic Plan to focus and prioritize City efforts. + Advance Tukwila's interests through participation in regional partnerships. + Continue to develop as an organization and support individual growth. + Ensure City facilities are safe, efficient and inviting to the public. + Ensure the long-term fiscal sustainability of the City. A positive community identity and image + Improve the City's ability to build trust and work with all members of the Tukwila community. + Facilitate connections among Tukwila's communities. + Promote a positive identity and image of Tukwila. The City of Tukwila, Washington ANNUAL COMPREHENSIVE FINANCIAL REPORT For the Year Ended December 31, 2022 Prepared by the City of Tukwila, Finance Department Vicky Carlsen, Finance Director Allan Ekberg, MAYOR 2022 TUKWILA CITY COUNCIL Thomas McLeod, Council President Kathy Hougardy Kate Kruller Tosh Sharp De'Sean Quinn Cynthia Delostrinos Johnson Mohamed Abdi CITY OF TUKWILA: 2022 ACFR TABLE OF CONTENTS ANNUAL COMPREHENSIVE FINANCIAL REPORT For the Year Ended December 31, 2022 TABLE OF CONTENTS Page I. INTRODUCTORY SECTION Administrative Organizational Structure, Principal Officials, and Council Committees 1 Letter of Transmittal 3 Certificate of Achievement 9 II. FINANCIAL SECTION Auditor's Report 11 Management's Discussion and Analysis 15 Basic Financial Statements Government -wide Financial Statements: Statement of Net Position 29 Statement of Activities 30 Fund Financial Statements: Balance Sheet — Governmental Funds 31 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position 32 Statement of Revenues, Expenditures, and Changes in Fund Balance — Governmental Funds 33 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 34 Statement of Net Position — Proprietary Funds 35 Statement of Revenues, Expenses, and Changes in Net Position — Proprietary Funds 36 Statement of Cash Flows — Proprietary Funds 37 Statement of Fiduciary Net Position — Fiduciary Funds 39 Statement of Changes in Fiduciary Net Position — Fiduciary Funds 40 Notes to the Financial Statements 41 Required Supplemental Information: Schedules of Revenues, Expenditures, and Changes in Fund Balances — Budget and Actual General Fund 101 Notes to the Required Supplementary Information 102 Schedule of Proportionate Share of the Net Pension Liability 103 Schedule of Employer Contributions 104 Firemen's Pension Trust Fund 105 Retiree Medical and Long -Term Care Benefits for LEOFF I Employees 107 Combining and Individual Fund Financial Statements and Schedules: Combining Balance Sheet — Non -Major Governmental Funds 110 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances — Non -Major Governmental Funds 111 Combining Balance Sheet — Non -Major Special Revenue Funds 112 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances — Non -Major Special Revenue Funds 113 CITY OF TUKWILA: 2022 ACFR TABLE OF CONTENTS TABLE OF CONTENTS - continued Page Combining Balance Sheet — Non -Major Debt Service Funds 114 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances — Non -Major Debt Service Funds 115 Combining Balance Sheet — Non -Major Capital Project Funds 116 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances — Non -Major Capital Project Funds 117 Schedules of Revenues, Expenditures, and Changes in Fund Balances — Budget and Actual: Arterial Street Capital Project Fund 118 Local Improvement District #33 Debt Service Fund 119 Public Safety Plan Capital Project Fund 120 City Facilities Capital Project Fund 121 Hotel/Motel Tax Special Revenue Fund 122 Drug Seizure Special Revenue Fund 123 Residential Street Capital Project Fund 124 Land & Park Acquisition Capital Project Fund 125 Facilities Urban Renewal Capital Project Fund 126 General Government Improvements Capital Project Fund 127 Fire Improvements Capital Project Fund 128 Special Assessment Bonds Guaranty Fund 129 Unlimited Tax General Obligation Debt Service Fund 130 Limited Tax General Obligation Debt Service Fund 131 Combining Statements of Net Position — Internal Service Funds 133 Combining Statement of Revenues, Expenses, and Changes in Net Position — Internal Service Funds 134 Combining Statement of Cash Flows — Internal Service Funds 135 III. STATISTICAL SECTION Schedule Net Position by Component 1 138 Changes in Net Position 2 140 Fund Balances, Governmental Funds 3 142 Changes in Fund Balances of Governmental Funds 4 144 General Government Tax Revenues by Source 5 146 Property Tax Levies and Collections 6 147 Assessed and Estimated Actual Value of Taxable Property 7 148 Property Tax Rates — Direct and Overlapping Governments 8 149 Principal Property Taxpayers 9 150 Retail Sales Tax Collections by Sector 10 152 Sales Tax Rate Direct and Overlapping Governments 11 154 Ratios of Outstanding Debt by Type 12 156 Ratios of General Bonded Debt Outstanding 13 158 Computation of Direct and Overlapping Debt 14 159 Legal Debt Margin Information 15 160 Demographic Statistics 16 162 Principal Employers 17 163 Full -Time Equivalent City Government Employees by Department 18 164 Operating Indicators by Function 19 165 Capital Assets by Function 20 166 ii CITY OF TUKWILA: 2022 ACFR ADMINISTRATIVE ORGANIZATIONAL STRUCTURE, PRINCIPAL OFFICIALS ADMINISTRATIVE ORGANIZATIONAL STRUCTURE AND PRINCIPAL OFFICIALS RESIDENTS CITY OF TUKWILA CITY COUNCIL MAYOR Allan Ekberg r C TY ADMINISTRATOR David Cline 1 MUNICIPAL COURT Kimberly Walden J CITY ATTORNEY Ogden Murphy Wallace, PLLC J ADMINISTRATIVE SERVICES Rachel Bianchi FINANCE Vicky Carlsen COMMUNITY DEVELOPMENT Nora Gierloff i PARKS & RECREATION Pete Mayer FIRE Jay Wittwer 2022 COUNCIL COMMITTEES FINANCE & GOVERNANCE COMMITTEE De'Sean Quinn, Chairperson Kate Kruller, Member Cynthia Delostrinos-Johnson, Member COMMUNITY SERVICES & SAFETY Kathy Hougardy, Chairperson Mohamed Abdi, Member Tosh Sharp, Member COUNCIL PRESIDENT Tom McLeod i i PUBLIC WORKS Hari Ponnekanti 1 POLICE Eric Dreyer J TRANSPORTATION & INFRASTRUCTURE SERVICES Kate Kruller, Chairperson Mohamed Abdi, Member Tosh Sharp, Member PLANNING & COMMUNITY DEVELOPMENT Cynthia Delostrinos-Johnson, Chairperson Kathy Hougardy, Member De'Sean Quinn, Member 1 CITY OF TUKWILA: 2022 ACFR ADMINISTRATIVE ORGANIZATIONAL STRUCTURE, PRINCIPAL OFFICIALS 2 City of Tukwila 6200 Southcenter Blvd, Tukwila, WA 98188 Allan Ekberg, Mayor October 30, 2023 Honorable Allan Ekberg, Mayor Members of the Tukwila City Council Citizens of Tukwila City of Tukwila 6200 Southcenter Boulevard Tukwila, WA 98188-2599 Subject: TRANSMITTAL OF 2022 ANNUAL COMPREHENSIVE FINANCIAL REPORT I am pleased to transmit the City of Tukwila's Annual Comprehensive Financial Report (ACFR) for the year ended December 31, 2022. This transmittal letter provides an overview of the report and the financial condition of the City. State law requires that cities publish financial statements annually in conformity with Generally Accepted Accounting Principles (GAAP), which are audited in accordance with generally accepted auditing standards by the State Auditor's Office, under the Revised Code of Washington (RCW) 43.09.230. The ACFR has several significant uses. First, it provides a general overview of the City's finances to the general public and taxpayers. Second, it is used as a reference by bond buyers and rating agencies to evaluate the City's fiscal stability and creditworthiness. Finally, the ACFR is a series of financial statements that have been audited by the State Auditor's Office and provides assurances that assets are safeguarded and funds are expended as they were legally appropriated in the adopted budget. The Tukwila Finance Department prepares the report and accepts responsibility for the accuracy, completeness, and fairness of presentation of the information included. The data is believed to be accurate in all material respects, and it is believed that the data is presented in a manner that fairly sets forth the results of operations and financial position of the City, as measured by the financial activity of the City's various funds. All disclosures necessary to enable the reader to gain the maximum understanding of the City's financial activity have been included. The report has been prepared in conformance with GAAP and in conformance with financial reporting standards issued by the Governmental Accounting Standards Board (GASB). City management has developed and evaluated a comprehensive internal control structure that is designed to provide reasonable, but not absolute, assurance regarding the safeguarding of assets against loss from unauthorized use or disposition, and the reliability of financial records for preparing financial statements and maintaining accountability for assets. The concept of reasonable assurance is based on the assumption that the cost of internal controls should not exceed the benefits expected to be derived. As management, we attest that, to the best of our knowledge and belief, this financial report is complete and reliable in all material aspects. 3 CITY OF TUKWILA: 2022 ACFR LETTER OF TRANSMITTAL As a recipient of federal, state and county financial assistance, the City is required to undergo an annual single audit in conformity with the provisions of the Single Audit Act amendments of 1996 and U.S. Office of Management and Budget Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). The audit is conducted by the State Auditor's Office in conjunction with the City's annual independent audit. Information related to this single audit includes the Schedule of Expenditures of Federal Awards, findings, and recommendations, if applicable, and auditor's reports on internal control and compliance with applicable laws, regulations, contracts, and agreements. The results of the City's annual single audit for the fiscal year ended December 31, 2021 provided no instances of material weaknesses in the internal control structure or significant violations of applicable laws. Management's Discussion and Analysis (MD&A) immediately follows the State Auditor's report and provides a narrative introduction, overview, and analysis to accompany the basic financial statements. This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. PROFILE OF THE CITY Incorporated in 1908, the City of Tukwila is in the heart of the Puget Sound region, 12 miles south of downtown Seattle, 17 miles north of Tacoma, and one mile east of Seattle -Tacoma International Airport. Tukwila has a small residential population of 22,620, making it the 49th largest of 280 cities in the State of Washington. However, the daytime shopper/visitor and working population can reach over 150,000 during the holiday shopping season. The City of Tukwila is a non -charter optional code City, operating under Section 35A of the Revised Code of Washington. It has a strong Mayor form of government with a seven -member City Council elected by the voters of the City to serve a four-year term. Councilmembers are elected at large rather than by district and are responsible for establishing the general guidelines and policies for the City. The Mayor appoints the City Administrator as the City's chief administrative officer responsible for carrying out the policies and direction set by the Mayor and City Council. The City of Tukwila provides a full range of local government services. These services include police and fire protection, emergency medical services, construction and maintenance of streets and traditional municipal infrastructure, planning and zoning, park and recreational activities, and cultural events. In addition, the City operates an equipment maintenance/rental fund. The City operates its own municipal 18-hole golf course and provides sewer, water, and surface water services. Tukwila has a municipal court for traffic infractions, misdemeanors, and gross misdemeanors. Other jurisdictions provide jail services to the City. Tukwila residents receive library services from the King County Library System. The City has adopts a biennial budget in accordance with RCW 35A.34. The Council is required to adopt a biennial budget prior to the first of each odd -numbered calendar year. Budget reviews are conducted at mid -biennium and any changes for the second half of the biennium are adopted by the City Council. The biennial budget serves as the foundation for the City of Tukwila's financial planning and control. The budget is adopted at the fund level and any increases or decreases to a fund must be authorized by Council. Appropriation changes within a fund may be authorized by the Mayor. The General Fund, two special revenue funds, four debt service funds, and eight capital project funds are included in the biennially appropriated operating budget and have budget to actual statements presented for 2022. As demonstrated by the statements and schedules included in the financial section of this report, the City continues to meet its responsibility for sound financial management. 4 CITY OF TUKWILA: 2022 ACFR LETTER OF TRANSMITTAL LOCAL ECONOMY Tukwila has a strong local economy, largely due to its location within the Puget Sound region's robust economy. The Puget Sound region benefits from a world -class natural environment, excellent universities, and the headquarters of world -class companies such as Amazon, Microsoft, and Starbucks. The region has tens of thousands of excellent jobs in leading high-tech fields such as aerospace, life sciences and global health, information and computing, gaming, and more. It also has strong industry clusters in manufacturing, maritime, military, tourism, and transportation and logistics. The Seattle/Bellevue/Everett area had a large labor force of 1.8 million in December of 2022, which was an increase compared to the previous year. At the same time the already low unemployment rate decreased from 3.6% to 3.0%. Tukwila is located at the center of the Puget Sound region. As such, it has excellent transportation with one of the State's busiest interchanges (1-5 at 1-405), a commuter train station, a light rail station, multiple bus routes including two Rapid Ride lines, and a future bus rapid transit station. The City also has easy access to Sea-Tac International Airport, King County International Airport, and the Ports of Seattle and Tacoma. Although Tukwila is small based on square miles and residential population, it has a lot of jobs. Averaging over 40 thousand jobs, more people are employed in the City of Tukwila than in 27 of the 39 counties in the State of Washington. Over two thirds of those jobs are in services, manufacturing, and retail. The City is home to the headquarters of industry leaders and brands such as BECU, Continental Mills, La Panzanella, LeoStella, Red Dot Corporation, Sabey Corporation, Sahale Snacks, and Seattle Chocolates. Tukwila is also home to hundreds of small businesses, many of which are owned by members of the City's diverse international community. Anchored by Westfield Southcenter, which is the largest mall in the Pacific Northwest, Tukwila has a large retail economy. With a large presence of Boeing and other aerospace companies, Tukwila is also strong in manufacturing. Although the Boeing Company has endured many challenges over the past few years, it still employs thousands of people in Tukwila. Boeing continues to go through significant change but it is anticipated that the aerospace and technology sectors will continue with the strength of aerospace in the region. Retail business significantly dropped during 2020 due to the COVID pandemic. In 2021 and 2022 retail returned to pre -pandemic levels, except when adjusted for inflation. The tourism economy as indicated by lodging tax revenue has rebounded to pre -pandemic levels. Industrial space has lower vacancy rates and higher property values than ever before. Although construction slowed during the pandemic, it still continued and total permit value for 2022 was the second highest for the past six years. Over the past twenty years, the number of jobs in Tukwila covered by Washington State's unemployment insurance has ranged from a low of 41,500 to a high of 48,700. Employment has fluctuated over those years with 2019's pre -pandemic numbers being slightly above average. 2021 employment was ten percent below 2019's pre -pandemic levels with the decline primarily in services, retail, and manufacturing. Depending on macro -economic events, we anticipate employment over the next few years returning to pre -pandemic levels. Tukwila is a retail powerhouse with one of the largest local retail sales tax bases in the state of Washington. Anchored by Westfield Southcenter, which is the largest mall in the Pacific Northwest, Tukwila generated almost $2.45 billion dollars in taxable retail sales in 2022. The total retail sales tax revenue amounted to $20.85 million in 2022, representing an increase of 8.6% from the $19.2 million 5 CITY OF TUKWILA: 2022 ACFR LETTER OF TRANSMITTAL collected in the prior year. Although this shows a significant increase over 2021 levels, this is likely a combination of the waning impacts of the pandemic and high inflation that occurred throughout 2022. LONG-TERM FINANCIAL PLANNING The City uses its six -year financial planning model and Capital Improvement Program (CIP) as long-term financial planning tools. These tools, along with regular review and revisions to the financial policies, ensure the City incorporates current economic conditions and financial projections into its long-range financial plans. In mid-2015, the City revised its financial reserve policy to increase the General Fund reserve level from 10% to 18% and added a one-time 10% revenue reserve in the Contingency Fund. These changes will ensure the City's policies are in alignment with the Government Finance Officers Association's "Best Practices" and provide additional protection from future downturns in the economy. The City's diversified revenue base is supported by an assessed valuation of $8.9 billion, which is an increase of 11.98% from 2021, allowing the City to pursue a long-term capital investment program. The City's 2021-2026 Capital Improvement Program, which is adopted every two years, anticipates approximately $118 million in general government capital projects, with only $7.39 million of that paid by City funding sources. These improvements are vital to the economic health of the City which must continue to efficiently move employees, shoppers, and goods into and out of the area. MAJOR INITIATIVES The City made significant investments of time and financial resources into key public projects in 2022. These projects represent Council's commitment to meeting their five Strategic Goals and Objectives: • A community of inviting neighborhoods and vibrant business districts • A solid foundation for all Tukwila residents • A diverse and regionally competitive economy • A high -performing and effective organization, and • A positive community identity and image The City of Tukwila approved funding for 30% design and estimates for the 42nd Avenue South Bridge Replacement. Approximately $27 million in federal, state and local funds have been awarded for the project. This structure serves as the connection to the residential community and the BNSF railroad Intermodal Yard. The City started preliminary work on the Transportation Element of the Comprehensive Plan. In addition, construction began on the West Valley Highway/Longacres Way roadway project. Most construction was completed in 2022, and final improvements around illumination and signal poles will be completed in 2023. The City of Tukwila has an on -going extensive rehabilitation program in the Sewer Fund for the Southcenter Commercial Business District. As the sewer mains are reaching their 50-year life span, the City has budgeted over $2 million for 3 years to reline the asbestos concrete pipes in the Southcenter area. The City has completed many projects associated with the Public Safety Plan, including the new Justice Center and two new fire stations. Phase one of the consolidated Public Works facility is nearly complete as of this writing, and planning has begun for phase two. 6 CITY OF TUKWILA: 2022 ACFR LETTER OF TRANSMITTAL AWARDS AND ACKNOWLEDGEMENTS The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Tukwila for its annual comprehensive financial report for the fiscal year that ended December 31, 2021. This was the 35th consecutive year that Tukwila has achieved this prestigious award. To be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized annual comprehensive 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 annual comprehensive financial report continues to meet the Certificate of Achievement Program's requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. Preparation of this report could not have been accomplished without the professional, efficient, and dedicated services of the entire staff of the Finance Department and the cooperation of other City departments. Their long hours of assistance with the preparation and review of this report are greatly appreciated. The Mayor, City Administrator and City Council are to be complimented for their encouragement, interest, and support in conducting the financial operations of the City in a fiscally sound and progressive manner. The efficient assistance of examiners from the Office of the State Auditor is also appreciated. Staff who had a direct role in preparing Tukwila's 2022 Annual Comprehensive Financial Report take great pride in their work, and the entire team who worked on this project is to be commended. Respectfully submitted, Cev„fn- Vicky Carlsen, CPA Finance Director CITY OF TUKWILA: 2022 ACFR LETTER OF TRANSMITTAL 8 CITY OF TUKWILA: 2021 ACFR LETTER OF TRANSMITTAL G�9 Go -eriuuent Finance Officers Association Certificate of Achievement for Excellence in Financial i eportin Presented to City of Tukwila W-asliington For its Annual Comprehensive Financial Report For the Fiscal Year Ended December 31- )011 C� P r Executive Director,'CEO 9 CITY OF TUKWILA: 2021 ACFR LETTER OF TRANSMITTAL 10 Office of the Washington State Auditor Pat McCarthy INDEPENDENT AUDITOR'S REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS Mayor and City Council City of Tukwila Tukwila, Washington REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS Opinions 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 as of and for the year then ended December 31, 2022, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents. In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business -type activities, each major fund and the aggregate remaining fund information of the City of Tukwila, as of December 31, 2022, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Basis for Opinions We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions . 11 Matters of Emphasis As discussed in Note 1 to the financial statements, in 2022, the City adopted new accounting guidance, Governmental Accounting Standards Board Statement No. 87, Leases. Our opinion is not modified with respect to this matter. Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City's ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter. Auditor's Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. Performing an audit in accordance with GAAS and Government Auditing Standards includes the following responsibilities: • Exercise professional judgment and maintain professional skepticism throughout the audit; • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements; • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, no such opinion is expressed; 12 • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements; • Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City's ability to continue as a going concern for a reasonable period of time; and • Communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control -related matters that we identified during the audit. Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis and required supplementary information as listed in the table of contents be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Supplementary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The combining financial statements and schedules are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. This information has been subjected to auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the basic financial statements as a whole. 13 Other Information The other information comprises Introductory and Statistical Section but does not include the basic financial statements and our auditor's report thereon. Management is responsible for the other information included in the financial statements. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or provide any assurance thereon. In connection with the audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report. OTHER REPORTING REQUIRED BY GOVERNMENT AUDITING STANDARDS In accordance with Government Auditing Standards, we will also issue our report dated October 30, 2023, on our consideration of the City's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City's internal control over financial reporting and compliance. Sincerely, Pat McCarthy, State Auditor Olympia, WA October 30, 2023 14 CITY OF TUKWILA: 2022 ACFR MANAGEMENT'S DISCUSSION AND ANALYSIS MANAGEMENT'S DISCUSSION AND ANALYSIS For the Year Ended December 31, 2022 The management discussion and analysis section of the City of Tukwila's Annual Comprehensive Financial Report provides an overview of the City's financial activities for the year ended December 31, 2022. The intent of this discussion and analysis is to look at the City's financial performance as a whole. Readers should also review the transmittal letter, and the basic financial statements to enhance their understanding of the City's financial performance. FINANCIAL HIGHLIGHTS • As of December 31, 2022, the City of Tukwila's total assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $364.4 million. Of this amount, $61.2 million represents unrestricted net position, which may be used to meet the government's ongoing obligations to residents and creditors. • The City of Tukwila's total net position increased $9.4 million, or 2.7%. Governmental activities increased $7.7 million due in part to generally improving revenues, offset by rising expenditure costs. Business -type activities increased $1.7 million which was primarily driven by rate increases which helped offset rising costs. • At the close of the current fiscal year, the City of Tukwila's governmental funds reported combined fund balances of $43.6 million, a decrease of $97 thousand (-0.22%). Approximately 51.5% ($22.5 million) of the fund balance is available for spending at the City's discretion (unassigned fund balance). OVERVIEW OF THE FINANCIAL STATEMENTS The discussion and analysis is intended to serve as an introduction to the City of Tukwila's basic financial statements. The City's basic financial statements are presented in three parts: 1. Government -wide financial statements 2. Fund financial statements 3. Notes to the financial statements This report also includes supplementary information intended to furnish additional detail to support the basic financial statements. Government -wide Financial Statements The government -wide financial statements provide both long-term and short-term information about the City's overall financial status, in a manner similar to private -sector business. The Statement of Net Position presents financial information on all the City's assets, liabilities, and deferred inflows/outflows of resources, with the difference reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City of Tukwila is improving or deteriorating. The Statement of Activities presents information designed to show how the City's net position changed during the year. The statement distinguishes revenue generated by specific functions from revenue provided by taxes and other sources not related to a specific function. The revenue generated by the specific functions (charges for services, grants, and contributions) is compared to the expenses for those functions to show the degree to which each function supports itself or relies on taxes and other general funding sources for support. All activity on this statement is reported on the accrual basis of accounting, requiring that revenues are reported when they are earned and expenses are reported when they are incurred, regardless of when cash is received or disbursed. Items such as (but not limited to) uncollected taxes, unpaid vendor invoices for goods or services received during the year, and earned but unused vacation leave are included in the statement of activities as revenue and expenses even though no cash has changed hands. 15 CITY OF TUKWILA: 2022 ACFR MANAGEMENT'S DISCUSSION AND ANALYSIS Both the government -wide financial statements distinguish functions of the City of Tukwila that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business -type activities). The governmental activities of the City of Tukwila include general government (finance, executive, legal, court, and human resources), public safety (police and fire), physical environment, economic environment, transportation, mental/physical health, and culture and recreation. The City's business -type activities include water, sewer, and surface water utilities, and a municipal golf course. Governmental activities are primarily supported by taxes, charges for services, and grants. Business -type activities are primarily self-supporting through user fees and charges. Fund Financial Statements The annual financial report includes fund financial statements in addition to the government -wide financial statements. A fund is a fiscal and accounting entity with a self -balancing set of accounts used to account for specific activities or meet certain objectives. The City of Tukwila Funds are often set up in accordance with special regulations, restrictions or limitations. The City of Tukwila, like other state and local governments, uses fund accounting to ensure and show compliance with finance -related legal requirements. The City's funds are divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental funds are used to account for essentially the same functions that are reported as governmental activities in the government -wide financial statements. The governmental fund statements focus on the near -term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the year. The information in the governmental fund statements can be used to evaluate the City's near -term financing requirements and immediate fiscal health. Comparing the governmental fund statements with the government -wide statements can help the reader better understand the long-term impact of the City's current year financing decisions. Because the focus of governmental funds is narrower than that of the government -wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government -wide financial statements. By doing so, readers may better understand the long-term impact of the government's near -term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The City maintains fifteen individual governmental funds. Of these, five are considered major (the general fund, the arterial street fund, the local improvement district #33 fund, city facilities and the public safety plan fund) and are presented separately in the governmental funds' Balance Sheet and the governmental funds' Statement of Revenues, Expenditures and Changes in Fund Balances. The remaining governmental funds are combined into a single column labeled "Other Governmental Funds." Individual fund data for each of these non -major governmental funds is presented in the combining and individual fund statements and schedules section of this report. The City maintains budgetary control over its operating funds through the adoption of a biennial budget. Budgets are adopted at the fund level according to state law. A budgetary comparison schedule is presented for the general fund in the Required Supplemental Information section of the report. Other budgetary comparison schedules are included following the other governmental funds' combining statements in this report. Proprietary funds are used by governments to account for their business -type activities and use the same basis of accounting as utilized in private industry. Business -type activities provide specific goods or services to a group of customers that are paid for by fees charged to those customers. There is a direct relationship between the fees paid and the services rendered. The City has two types of proprietary funds: enterprise funds and internal service funds. Enterprise funds are used to account for goods and services provided to citizens, while internal service funds are used to account for goods and services provided internally to various City departments. The same basis of accounting is used for proprietary funds in both the government -wide and individual fund statements. 16 CITY OF TUKWILA: 2022 ACFR MANAGEMENT'S DISCUSSION AND ANALYSIS Enterprise funds report the same functions presented as business -type activities in the government -wide statements, but in greater detail. The City's enterprise fund statements provide information on the City's three utilities (water, sanitary sewer, surface water) as well as the City -owned golf course. Internal service funds are an essential accounting tool used to accumulate and allocate costs internally among the City's various functions. The City uses internal service funds to account for its fleet of vehicles, and its insurance premiums for active employees and LEOFF 1 retirees. Internal service fund activities are predominantly governmental and have been included in the governmental activities columns of the government -wide statements. Individual fund data for the internal service funds is provided in the form of combining statements in the combining and individual fund statements and schedules section of this report. Fiduciary funds are used to account for resources held for the benefit of parties outside of the government. Fiduciary funds are not reported in the government -wide financial statements because the resources of those funds are not available to support the City of Tukwila's own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. The City maintains two different types of fiduciary funds. The Firemen's Pension Trust Fund is used to report resources held in trust for retirees and beneficiaries covered by the Firemen's Pension plan. The Custodial fund reports resources held by Tukwila in a custodial capacity for individuals, private organizations, and other governments. Notes to the Financial Statements The notes provide additional information that is essential to a full understanding of the data provided in the government -wide and fund financial statements. The notes to the financial statements can be found immediately following the fund financial statements. Other Information In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information including a budget and actual schedule for the City's general fund and schedules of progress in funding its obligation to provide pension and OPEB benefits to its former employees. Additional pension benefit information is found in Note 8. The combining statements referred to earlier in connection with nonmajor governmental funds and internal service funds are presented immediately following the required supplementary information on pensions and OPEB. 17 CITY OF TUKWILA: 2022 ACFR MANAGEMENT'S DISCUSSION AND ANALYSIS GOVERNMENT -WIDE FINANCIAL ANALYSIS As noted earlier, net position over time may serve as a useful indicator of a government's financial position. In the case of the City of Tukwila, assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $364.4 million at the close of the most recent fiscal year. Total net position increased by $9.4 million (2.7%) when compared to 2021. CITY OF TUKWILA'S NET POSITION (in thousands) Governmental Activities Business -type Activities Total 2022 2021 2022 2021 2022 2021 Current and other assets $94,196 $111,417 $28,334 $31,401 $122,530 $142,817 Capital assets, net of accumulated depreciation 330,014 334,119 77,653 75,582 407,667 409,701 Total assets 424,210 445,536 105,987 106,982 530,198 552,518 Deferred Outflows of Resources 11,896 4,491 975 293 12,871 4,784 Long-term liabilities 141,384 150,058 2,557 3,250 143,940 153,309 Net pension liability 2,480 1,042 572 231 3,053 1,272 Total OPEB liabilities 5,958 7,421 - 5,958 7,421 Other liabilities 12,629 10,312 1,439 1,640 14,068 11,952 Total liabilities 162,452 168,834 4,568 5,121 167,019 173,954 Deferred Inflows of Resources 10,664 25,903 1,029 2,502 11,693 28,405 Net position Net investment in capital assets 199,058 197,840 75,309 72,559 274,366 270,399 Restricted 28,835 25,281 - - 28,835 25,281 Unrestricted 35,098 32,170 26,057 27,094 61,155 59,263 Total net position $262,991 $255,290 $101,365 $99,653 $364,356 $354,943 By far, the largest portion of the City's net position ($274.4 million or 75.3%) reflects its investment in capital assets (e.g., land, buildings, machinery, equipment, vehicles, and infrastructure), less any related outstanding debt that was used to acquire those assets. The City uses these capital assets to provide a variety of services to citizens. Accordingly, these assets are not available for future spending. Although investment in capital assets is reported net of related debt, it should be noted that the resources used to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. An additional portion of the City's net position ($28.8 million or 7.9%) represents resources that are subject to external restrictions on how they may be used. The business -type activities do not report any restrictions, so the entire $28.8 million is restricted in governmental activities funds. The majority is related to tourism, net pension assets, and ongoing debt obligations. The remaining net position balance ($61.2 million, or 16.8%) is unrestricted and may be used to meet the City's ongoing obligations to its citizens and creditors. At the end of the current fiscal year, the City of Tukwila continued to report positive balances in all categories of net position. The City's overall net position increased $9.4 million (2.7%) from the prior fiscal year. The reasons for this overall increase are discussed in the following sections for governmental activities and business -type activities. 18 CITY OF TUKWILA: 2022 ACFR MANAGEMENT'S DISCUSSION AND ANALYSIS CITY OF TUKWILA'S CHANGES IN NET POSITION (in thousands) Governmental Activities Business -type Activities Total 2022 2021 2022 2021 2022 2021 Revenues: Program revenues Charges for services $15,969 $11,560 $26,244 $25,526 $42,213 $37,086 Operating grants and contributions 2,771 1,797 364 62 3,135 1,858 Capital grants and contributions 3,469 1,290 175 1,710 3,644 3,000 General revenues Property taxes 21,852 21,275 - 21,852 21,275 Sales and use taxes 21,977 20,148 - 21,977 20,148 Hotel/Motel taxes 897 540 - 897 540 Utility taxes 3,950 3,605 - 3,950 3,605 lnterfund utility taxes 2,405 2,322 - 2,405 2,322 Business taxes 2,684 2,075 - 2,684 2,075 Excise taxes 6,609 7,401 - 6,609 7,401 Investment earnings (107) 298 - (107) 298 Miscellaneous 3,646 4,068 - 3,646 4,068 Total revenues 86,122 76,379 26,783 27,297 112,905 103,676 Expenses: General government 14,314 12,227 14,314 12,227 Public safety 35,504 24,840 - 35,504 24,840 Transportation 13,806 12,760 13,806 12,760 Economic environment 5,599 5,063 5,599 5,063 Culture and recreation 6,148 4,814 6,148 4,814 Interest on long-term debt 4,303 4,443 - 4,303 4,443 Water/sewer 15,457 14,227 15,457 14,227 Foster golf course 5,945 4,327 5,945 4,327 Surface water 2,415 2,176 2,415 2,176 Total expenses 79,674 64,147 23,818 20,731 103,491 84,878 Increase (decrease) in net position before 6,448 12,231 2,965 6,566 9,413 18,798 transfers Transfers 1,253 1,384 (1,253) (1,384) Change in net position 7,701 13,615 1,712 5,182 9,413 18,798 Net position -beginning of period 255,290 241,675 99,653 94,471 354,943 336,145 Net position -end of period $262,991 $255,290 $101,365 $99,653 $364,356 $354,943 Governmental Activities During the current fiscal year, net position for governmental activities increased $7.7 million (3.0%) from the prior fiscal year for an ending balance of $263.0 million. The primary reasons for this are: • Charges for services increased by $4.4 million compared to the prior year. This represents an increase of 38.1 % over the previous revenues, but only an 8.9% improvement compared to 2019 (pre -pandemic levels). • Retail sales and use taxes totaled $22.0 million, which is an increase of $1.8 million or 9.1 % compared to the prior year. • Generally improving revenues for all other taxes as well as increases in grant revenues account for the remaining improvements to revenues over the prior year. Improvements in revenues are partly offset by increases to expenditures as programs and services return to pre -pandemic levels. 19 CITY OF TUKWILA: 2022 ACFR MANAGEMENT'S DISCUSSION AND ANALYSIS REVENUES BY SOURCE — GOVERNMENTAL ACTIVITIES Other revenue 4% Other taxes 12% Utility taxes 7% Sales and use taxes 26% Charges for servic. 19% f Operating grants & contributions 3% Capital grants & contributions 4% Property taxes 25% PROGRAM REVENUES AND EXPENSES — GOVERNMENTAL ACTIVITIES $36,000,000 $33,000,000 $30,000,000 $27,000,000 $24,000,000 $21,000,000 $18,000,000 $15,000,000 $12,000,000 $9,000,000 $6,000,000 $3,000,000 $0 I e" ° e<a\�e< rm Get` ■ �b\\ca�etiy Q • Program revenues • Expenses arsP°�a�°r c er\ioor�er� �t deco • J\� .ce \ a n C Na and 20 CITY OF TUKWILA: 2022 ACFR MANAGEMENT'S DISCUSSION AND ANALYSIS Business -Type Activities For the City of Tukwila's business -type activities, the results for the current fiscal year were positive in that overall net position increased by $1.7 million (1.7%) to reach an ending balance of $101.4 million. The overall growth is attributable to the following factors: • In the Water Utility, total net position increased $22 thousand (0.1%). Operating revenues increased by $483 thousand, primarily the result of a 5.0% rate increase effective January 1, 2022. This increase helped offset the 9.1 % increase in operating and maintenance expenses. • In the Sewer Utility, total net position increased by $484 thousand (2.0%). Operating revenues were flat compared to the prior year, declining by $4 thousand (0.05%), while operating expenses increased by $673 thousand (8.4%). • In the Surface Water Utility, total net position increased by $1.1 million (2.3%). Operating revenues increased by $357 thousand (5.1%) driven primarily by a 5.0% rate increase effective January 1, 2022. • Of the $101.4 million total net position, $26.1 million (25.7%) is unrestricted and each fund can utilize their portion for any purpose. This operating balance is necessary for future planned infrastructure replacements and repairs. The following chart shows the relative net position balances for each business -type fund: BUSINESS -TYPE NET POSITION - BY FUND Foster golf course 6% Surface water 48% Water 21% Sewer 25% 21 CITY OF TUKWILA: 2022 ACFR MANAGEMENT'S DISCUSSION AND ANALYSIS The majority of net position in the City's enterprise funds relate to capital asset infrastructure, such as water and sewer mains, and the golf course land. As such, most of the net position is not available to support the ongoing expenses of the funds. The following chart contrasts the total net position to the spendable portion of net position for each enterprise fund: COMPARISON OF TOTAL NET POSITION TO SPENDABLE NET POSITION -BUSINESS-TYPE FUNDS $60,000,000 $50,000,000 $40,000,000 $30,000,000 $20,000,000 $10,000,000 Sewer • Spendable/Unrst Net Position ■ Total Net Position Surface water The following chart depicts the revenues and expenses for business -type funds: $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 so BUSINESS -TYPE ACTIVITY REVENUES & EXPENSES (before Capital Contributions & Transfers) Water Sewer ■ Revenues • Expenses I 1 Foster golf course Surface Water Foster Golf Course 22 CITY OF TUKWILA: 2022 ACFR MANAGEMENT'S DISCUSSION AND ANALYSIS FINANCIAL ANALYSIS OF GOVERNMENTAL FUNDS The purpose of the City's governmental funds is to report on near -term inflows, outflows, and balances of spendable resources. This information helps determine the City's financial requirements in the near future. Specifically, unassigned fund balance may serve as a useful measure of a government's net resources available for discretionary use as they represent the portion of fund balance which has not yet been limited to use for a particular purpose by either an external party, the City of Tukwila itself, or a group or individual that has been delegated authority to assign resources for use for a particular purpose. As of December 31, 2022, the City's governmental funds had combined fund balances of $43.6 million, a decrease of $97 thousand (-0.2%). The decrease in overall fund balance reflects a combination of improving revenues offset by the overall rising costs of programs and services due to inflation. The change in fund balance for governmental funds compared to 2021 is as follows: • General Fund ($750,167) • Arterial Street Fund $1,852,305 • Local Improvement District #33 ($19,356) • Public Safety Plan $914,193 • City Facilities Fund ($1,540,678) • Other Governmental Funds ($552,886) The General Fund is the primary operating fund of the City. All receipts and payments of ordinary City operations are processed through this fund unless they are required to be accounted for in another. At the end of 2022, the general fund had a fund balance of $23.0 million, with $22.5 million (97.7%) of the balance classified as unassigned and available to meet the City's general obligations. Unassigned fund balance decreased from $23.2 million in 2021 to $22.5 million in 2022 due primarily to rising costs of programs and services. This was offset partially by improvements in revenues, most notably sales tax and gambling taxes, as the impacts of the pandemic begin to wane. The Arterial Street Fund increase in fund balance is primarily related to unspent funding related to an environmental impact study for the Allentown truck reroute. In addition, the fund balance increase was a result of some budgeted expenditures for the West Valley Highway project and Green River trail improvements being carried forward to 2023. The City Facilities Fund decrease is due partly to capital outlays of $2.5 million, which is primarily the first phase of improvements for the Public Works Shops project. In addition to the capital outlays, revenue was received in the fund for planned expenditures that were carried forward to 2023. The first phase of the Public Works Shop project, the Fleet & Facilities building, was substantially completed and placed in service in 2022. The second phase of the project is underway with design and planning for a new Maintenance & Engineering facility, which will house operations for streets & utilities. In Other Governmental Funds, the decrease in fund balance can be attributed to use of prior year revenues for one-time expenditures. Prior year land sales revenue is being used to fund the City's implementation of a new citywide financial accounting system. Additionally, repair and maintenance work on City Hall and other city buildings used revenue received in a prior year to fund the project expenditures. 23 CITY OF TUKWILA: 2022 ACFR MANAGEMENT'S DISCUSSION AND ANALYSIS The following chart shows the relative fund balances for governmental funds: GOVERNMENTAL FUNDS — FUND BALANCES Local Imprvmnt Dist #33 Arterial street fund 13% General fund 53% 1% Public Safety Plan fund 2% City Facilities 4% Capital project funds 18% Special revenue funds 6% Debt service funds 3% The general fund revenue increased a total of $3.8 million, which is comprised of the following sources: $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $0 ($500,000) ($1,000,000) GENERAL FUND REVENUE INCREASES/DECREASES — BY SOURCE Ta xe s $3,243,186 Intergovernmental $780,015 Charges for services $186,513 Licenses and permits _ $34,893 Fines and forfeitures $183,466 Miscellaneous $112,055 Investment earnings ($749,196) 24 CITY OF TUKWILA: 2022 ACFR MANAGEMENT'S DISCUSSION AND ANALYSIS FINANCIAL ANALYSIS OF PROPRIETARY FUNDS The City's proprietary funds provide the same type of information as found in the government -wide financial statements, but in greater detail. Factors affecting the finances of the City's proprietary funds have already been addressed in the discussion of the City's business -type activities. Unrestricted net position in business -type activities ended 2022 at $26.1 million, a decrease of almost $1.0 million (-3.8%) from 2021. GENERAL FUND BUDGETARY HIGHLIGHTS The City budgets biennially by adopting a budget at the end of the preceding biennium, and then making adjustments as necessary via budget amendments throughout the next two years. In 2022, the City continued to face the financial challenges that resulted due to the COVID-19 pandemic. The 2021- 2022 biennial budget included many of the same expense reductions that had been implemented in 2020, with frozen positions and reduced department budgets for supplies and services. In March 2021, the federal government passed the American Rescue Plan Act (ARPA). The City received $5.68 million in ARPA which allowed the City to bring back some services that had been reduced or eliminated due to the reduced revenues caused by the pandemic. The following is a summary of significant budget amendments that occurred in 2022: • The City received ARPA funds and allocated $2.86 million to 2022 to bring back programs and positions that had been frozen or eliminated due to the pandemic. • A school zone speed camera pilot program was added, which assumes the revenues generated by the program will offset program costs. Revenues received above program costs are dedicated to pedestrian safety in school zones. • Budget for the fire department was adjusted to account for increased overtime usage. Overtime increased in 2021 & 2022 due to significant reimbursable overtime, staffing a COVID testing site, and returning minimum staffing to 13. Minimum staffing had been reduced to 12 in 2020 due to lower call volume as a result of businesses being shuttered for several weeks in mid-2020 due to COVID-19. • Sales tax, Utility tax and Gambling tax budgets were increased to reflect revised projections. • A budget of $800 thousand was added for streamlined sales tax mitigation payments after the State of Washington restored this funding source to cities affected by destination -based sales tax regulation. The State had previously discontinued this funding source when revenues declined sharply due to the pandemic. • A $1.3 million transfer out to the Arterial Streets fund was added to provide funding for an environmental impact study related to the Allentown truck reroute. 25 CITY OF TUKWILA: 2022 ACFR MANAGEMENT'S DISCUSSION AND ANALYSIS CAPITAL ASSETS The City's investment in capital assets for both its governmental and business -type activities as of December 31, 2022 totaled $407.7 million (net of accumulated depreciation), a decrease of $2.0 million (-0.5%) from 2021. This investment in capital assets includes land, buildings, improvements, machinery and equipment, construction in progress, utility transmission/distribution systems, roads, bridges, and infrastructure. CITY OF TUKWILA'S CAPITAL ASSETS (net of depreciation) Governmental Activities Business -Type Activities Total 2022 2021 2022 2021 2022 2021 Land $ 60,661,130 $ 51,719,374 $ 2,350,969 $ 2,346,230 $ 63,012,099 $ 54,065,604 Buildings & Structures 100,657,683 90,407,904 8,781,754 8,736,916 109,439,438 99,144,819 Other Improvements 5,615,091 6,562,979 63,126,975 60,221,273 68,742,065 66,784,252 Machinery and Equipment 8,758,199 9,341,062 1,871,057 890,481 10,629,256 10,231,544 Leased Equipment 736,426 - - 736,426 Infrastructure 133,538,293 140,235,739 - 133,538,293 140,235,739 Construction in Progress 20,047,275 35,851,859 1,522,404 3,386,924 21,569,680 39,238,783 Total $ 330,014,098 $ 334,118,916 $ 77,653,159 $ 75,581,825 $407,667,257 $ 409,700,741 More detailed information on capital assets is provided in Note 6 to the financial statements. Capital asset events during the current fiscal year included the following: Governmental Activities: • Residential and Arterial Street Funds: The West Valley Highway project (from 1-405 to Strander) continued with the project nearing completion and expected to be placed in service mid-2023.Design and planning continues on the replacement of the 42nd Ave Bridge, with $351 thousand in costs added to construction in progress. • Public Works Shop and City Facilities: The new Fleet & Facilities Building (phase 1 of the Public Works shops project) was placed in service during the year. Planning work began on the second phase of the project, with test -to -fit and design getting underway. • Fleet Equipment: The fleet fund added $1.03 million in new vehicles and equipment and disposed of $572 thousand in surplus & retired fleet assets. • Construction in Progress (CIP): Construction in progress decreased by $15.8 million compared to the prior year. While current year construction in progress additions were $4.4 million, $20.2 million of completed projects were placed in service and capitalized to buildings, infrastructure and other improvements. The decrease is primarily attributed to the completion of phase 1 of the Public Works shops project, Fleet & Facilities building. Business Type Activities: • Water fund projects: The Macadam Road water upgrades were completed during the year, adding $2.3 million in new assets to mains, hydrants and services. • Sewer fund projects: Lift Station #2 upgrades were completed and placed in service, adding 2.1 million in new assets to buildings & structures and machinery & equipment. • Surface Water fund project: East Marginal Way storm outflows were placed in service ($2.1 million) as well as small drainage projects ($772 thousand), adding nearly $2.9 million in new assets made up of intakes/mains, outfalls and other improvements. • Construction in Progress decreased $1.9 million compared to the prior year, with $5.5 million in additions to CIP and $7.3 million in prior year projects placed in service. 26 CITY OF TUKWILA: 2022 ACFR MANAGEMENT'S DISCUSSION AND ANALYSIS LONG-TERM DEBT The City had total long-term obligations outstanding of $139.4 million at the end of the current fiscal year. Of this amount, $113.9 million is general obligation bonds which is backed by the full faith and credit of the City, $6.7 million of general obligation direct placement/borrowings, $678 thousand is revenue bonds for the water/sewer and surface water utilities, $1.5 million in public works trust fund loans, $4.4 million due to other governments, $9.5 million premium on bonds, and the remaining $2.7 million is special assessment bonds which were issued to improve access to the City's urban center. The City currently maintains a rating of "AA+" with Standard and Poor's and Fitch's Investor Service, and "Aa3" with Moody's for its general obligation debt. The following schedule summarizes the City's long-term debt: Governmental Activities Business -type Activities Total 2022 2021 2022 2021 2022 2021 General obligation bonds $ 113,895,000 $ 117,890,000 $ - $ - $ 113,895,000 $ 117,890,000 General obligation- direct placement/borrowings 6,746,000 10,611,266 - - 6,746,000 10,611,266 Revenue bonds - - 677,704 840,235 677,704 840,235 Premium on bonds issued 9,544,638 10,163,810 - - 9,544,638 10,163,810 Special assessment bonds 2,685,000 3,060,000 - - 2,685,000 3,060,000 Public Works Trust Fund Loans - - 1,476,234 2,075,701 1,476,234 2,075,701 Due to other governments 4,383,790 4,568,396 - - 4,383,790 4,568,396 $ 137,254,428 $ 146,293,472 $ 2,153,938 $ 2,915,936 $ 139,408,366 $ 149,209,408 More detailed information on long-term debt, including debt limitations, is provided in Note 10 to the financial statements. ECONOMIC FACTORS AND THE UPCOMING BIENNIAL BUDGET Tukwila has a strong business community, largely due to its central location in the Puget Sound region. Tukwila is located at the intersection of one of the State's busiest interchanges (1-5 and 1-405) and has excellent public transportation including a commuter train, Tight rail, and multiple bus routes including two Rapid Ride lines. The City also has quick, easy access to Sea-Tac International Airport, King County International Airport, the Ports of Seattle and Tacoma, and downtown Seattle. Tukwila has a very strong retail sector. Anchored by Westfield Southcenter, which is the largest mall in the Pacific Northwest, the City has become a retail, restaurant, and entertainment hub. The City also has a high concentration of light industrial jobs across many sectors and particularly aerospace. It is also home to hundreds of small businesses, many of which are owned by members of Tukwila's diverse international community. The pandemic that started in early 2020 continues to impact economies around the world, including Tukwila's. Revenues such as sales taxes and lodging taxes were significantly impacted during the early part of the pandemic due to shutdowns. Continued remote working and ecommerce shopping has prolonged the recovery for Tukwila. Over time, revenues have slowly recovered, with some returning to pre -pandemic levels. With this recovery, however, historically high inflation has pushed program and service costs even higher. Additionally, federal funding from the American Rescue and Recovery Act (ARPA) will be ending, adding more pressure to maintaining existing levels of City programs and services. Although the economy continues to improve from the effects of the COVID-19 pandemic, the City still faces some challenges entering the 2023-2024 biennium. Federal, state and county governments continue to devolve services down to cities and there is no evidence that the trajectory will slow or change anytime soon. Additionally, inflation is the highest it has been in the past four decades. This high inflation will continue to impact all expenditure types 27 CITY OF TUKWILA: 2022 ACFR MANAGEMENT'S DISCUSSION AND ANALYSIS throughout the City which will cause additional pressures on limited resources. At the same time, the City's revenues are still recovering from the effects of the pandemic and are not rising at the same pace as expenditures. It is with these challenges in mind that the City will vigilantly strive to monitor and control expenses in order to remain within the City's means. REQUESTS FOR INFORMATION This financial report is designed to provide a general overview of the City of Tukwila's finances for readers with an interest in the City's finances. Questions concerning this report, or requests for additional information, may be addressed to the Finance Director, City of Tukwila, 6200 Southcenter Blvd, Tukwila, WA 98188-2544. 28 CITY OF TUKWILA: 2022 ACFR BASIC FINANCIAL STATEMENTS CITY OF TUKWILA, WASHINGTON STATEMENT OF NET POSITION DECEMBER 31, 2022 Governmental Business -Type Activities Activities Total ASSETS: Cash and cash equivalents $ 34,705,734 $ 18,426,709 $ 53,132,443 Investments 14,864,453 5,662,726 20,527,179 Taxes receivable 7,288,488 7,288,488 Other receivables 432,570 1,668,814 2,101,384 Leases receivable 142,004 142,004 Due from other governmental units 948,648 376,859 1,325,508 Inventory of materials and supplies 59,642 69,425 129,067 Restricted cash and cash equivalents 1,441,865 182,242 1,624,106 Notes receivable -Current 60,704 937,922 998,626 Notes receivable - Noncurrent 2,250,052 28,336 2,278,387 Real property held for resale 2,007,410 2,007,410 Net Pension asset 18,864,336 981,100 19,845,436 Investment in joint ventures 11,130,404 11,130,404 Non -depreciable capital assets 80,708,406 3,873,373 84,581,779 Depreciable capital assets (net of accumulated depreciation) 249,305,692 73,779,786 323,085,478 Total Assets 1 424,210,407 105,987,292 530,197,699 DEFERRED OUTFLOWS OF RESOURCES: Deferred loss on refunding 16,620 16,620 Deferred outflows related to OFEB 331,071 - 331,071 Deferred outflows related to pensions 11,564,783 958,067 12,522,850 Total Deferred Outflows Of Resources 11,895,854 974,686 12,870,541 LIABILITIES: Accounts payable 2,637,015 749,988 3,387,002 Accrued wages and benefits payable 1,985,735 163,855 2,149,590 Accrued interest payable 538,162 5,627 543,789 Unearned revenue 3,347,591 99,728 3,447,319 Total OPEB liability due within one year 415,819 - 415,819 Lease liability due w ithin one year 252,419 - 252,419 Long-term debt due w ithin one year 7,263,652 750,808 8,014,460 Other liabilities 1,047,706 419,351 1,467,057 IBNR reserve 945,000 - 945,000 Interfund loan payable 937,922 937,922 Noncurrent liabilities Lease liability due in more than one year 518,234 - 518,234 Long-term debt due in more than one year 134,119,881 1,805,953 135,925,834 Net pension liability 2,480,271 572,370 3,052,641 Total OPEB liability due in more than one year 5,962,252 - 5,962,252 Total Liabilities 162,451,658 4,567,680 167,019,338 DEFERRED INFLOWS OF RESOURCES: Deferred inflows related to pensions 10,081,511 1,028,999 11,110,510 Deferred inflows related to leases 138,018 - 138,018 Business taxes received in advance 146,312 146,312 Deferred revenue -other 297,752 297,752 Total Deferred Inflow s Of Resources 10,663,594 1,028,999 11,692,593 NET POSITION: Net investment in capital assets 199,057,806 75,308,549 274,366,355 Restricted for: Debt service 1,653,564 1,653,564 Tourism promotion 2,342,419 2,342,419 Arterial street improvements 1,292,163 1,292,163 Drug investigation and enforcement 295,220 295,220 Land and park acquisition, development 2,783,609 2,783,609 Pension Asset 20,468,089 - 20,468,089 Unrestricted net position 35,098,137 26,056,751 61,154,888 Total Net Position $ 262,991,008 $ 101,365,300 $ 364,356,308 The notes to the financial statements are an integral part of this statement. 29 CITY OF TUKWILA: 2022 ACFR BASIC FINANCIAL STATEMENTS CITY OF TUKWILA, WASHINGTON STATEMENT OF ACTIVITIES FOR THE YEAR ENDED DECEMBER 31, 2022 Primary Government --Expenses-- Program revenues -Net (Expense) Revenue and Changes in Net Position - Charges Operating Capital Grants Governmental Business -Type For Services Grants and and Activities Activities Contributions Contributions Total FUNCTIONS / PROGRAMS: PRIMARY GOVERNMENT Governmental activities General government $ 14,314,373 $ 9,058,384 $ 563,538 $ $ (4,692,452) $ $ (4,692,452) Public safety 35,503,893 2,334,165 667,230 (32,502,498) (32,502,498) Transportation 13,805,883 1,257,366 234,856 3,295,094 (9,018,566) (9,018,566) Natural and economic environment 5,598,778 2,349,959 737,891 143,922 (2,367,006) (2,367,006) Culture and recreation 6,147,791 968,738 567,975 30,000 (4,581,078) (4,581,078) Interest on long-term debt 4,303,091 (4,303,091) (4,303,091) Total Governmental Activities 79,673,810 15,968,613 2,771,490 3,469,016 (57,464,691) (57,464,691) BUSINESS -TYPE ACTIVITIES: Water Sew er Surface w ater Foster golf course Total Business -Type Activities Total Primary Government 6,770,341 8,686,855 5,945,272 2,415,066 7,284,558 9,343,033 7,411,371 2,205,500 363,540 35,685 122,400 16,710 549,902 778,578 1,846,348 (209,566) 549,902 778,578 1,846,348 (209,566) 23,817,535 26,244,461 363,540 174,795 2,965,262 2,965,262 $ 103,491,345 $ 42,213,074 $ 3,135,030 $ 3,643,811 $ (57,464,691) $ 2,965,262 $ (54,499,429) General Revenues: Taxes Property taxes $ 21,852,111 $ Retail sales and use taxes 21,977,177 Hotel/motel taxes 897,202 Utility taxes 3,949,799 Interfund utility taxes 2,404,685 Business taxes 2,683,592 Excise Taxes 6,609,500 Unrestricted investment earnings (107,223) Miscellaneous 3,645,976 $ 21,852,111 21,977,177 897,202 3,949,799 2,404,685 2,683,592 6,609,500 (107,223) 3,645,976 Total General Revenues 63,912,819 63,912,819 Excess of revenues over expenses 6,448,128 2,965,262 9,413,389 before transfers Transfers 1,253,033 (1,253,033) Change in net position 7,701,161 1,712,229 9,413,389 Net position - beginning 255,289,848 99,653,072 354,942,919 Net position -ending $ 262,991,008 $ 101,365,300 $ 364,356,308 The notes to the financial statements are an integral part of this statement. 30 CITY OF TUKWILA: 2022 ACFR BASIC FINANCIAL STATEMENTS CITY OF TUKWILA, WASHINGTON BALANCE SHEET GOVERNMENTAL FUNDS DECEMBER 31, 2022 Local Public Other Total General Arterial Improvement Safety City Governmental Governmental Fund Street District #33 Ran Facilities Funds Funds ASSETS: Cash and cash equivalents $ 8,525,973 $ 4,049,066 $ 582,452 $ 992,165 $ 2,681,008 $ 9,389,918 $ 26,220,583 Investments 14,864,453 - - 14,864,453 Taxes receivable 6,840,929 162,701 284,858 7,288,488 Other receivables 388,563 - - - 388,563 Leases receivable 142,004 142,004 Due from other governmental units 189,977 642,325 - - - 116,347 948,648 Restricted assets: Cash and cash equivalents Special assessment receivable Notes receivable -Current Real property held for resale Total Assets 1,292,163 - 149,702 1,441,865 2,250,052 2,250,052 60,704 - - 60,704 2,007,410 2,007,410 $ 31,012,603 $ 6,146,255 $ 2,832,504 $ 992,165 $ 2,681,008 $ 11,948,235 $ 55,612,770 LIABILITIES, DEFERRED INFLOWS AND FUND BALANCES: Liabilities: Accounts payable 929,347 486,728 - - 721,642 259,817 2,397,534 Accrued wages & benefits 1,933,137 16,728 - 4,476 1,954,341 Unearned revenue 3,310,371 37,219 - - - 3,347,591 Interfund loan payable 937,922 - 937,922 Other liabilities 299,423 71,088 - 300 46,895 417,706 Total Liabilities 7,410,200 611,763 - 300 721,642 311,189 9,055,093 Deferred inflow of resources Unavailable revenue -special assessment 2,250,052 Business taxes received in advance 146,312 - Unavailable revenue -property tax, other 326,717 Deferred revenue -leases 138,018 - 77,182 2,250,052 146,312 403,899 138,018 Total Deferred Inflow Of Resources 611,047 2,250,052 77,182 2,938,282 Fund balance: Restricted: Hotel/motel tax - - 2,342,419 2,342,419 Arterial street capital improvements 1,292,163 - 1,292,163 Drug investigation and enforcement - - 295,220 295,220 Park and land acquisition/development - 2,783,609 2,783,609 Debt service guraranty fund - - 750,347 750,347 Debt service public safety plan 402,630 402,630 Local Improvement District - 582,452 582,452 Assigned: Residential street improvements - 734,407 734,407 Arterial street improvements 4,242,330 - 4,242,330 Land & park acquisition 53,030 53,030 Facilities & urban renewal - - - 3,411,652 3,411,652 General government improvements 553,386 553,386 Public safety facilities - 991,865 991,865 City facilities - 1,959,366 - 1,959,366 1%Arts - 233,164 233,164 Technology 433,498 - - - 433,498 Shoreline Restoration 93,849 - - 93,849 Unassigned 22,464,009 22,464,009 Total Fund Balance 22,991,356 5,534,493 582,452 991,865 1,959,366 11,559,864 43,619,395 Total Liabilities, Deferred Inflows And Fund Balances $ 31,012,603 $ 6,146,255 $ 2,832,504 $ 992,165 $ 2,681,008 $ 11,948,235 $ 55,612,770 The notes to the financial statements are an integral part of this statement. 31 CITY OF TUKWILA: 2022 ACFR BASIC FINANCIAL STATEMENTS CITY OF TUKWILA, WASHINGTON RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET POSITION DECEMBER 31, 2022 Total Governmental Funds Total governmental fund balances as reported on this statement $ 43,619,395 Capital assets used in governmental activities are not financial resources and therefore not reported in the funds. Non -depreciable assets Depreciable assets (net) Internal service fund assets The net pension asset is not an available resource and, therefore, is not reported in the funds. Deferred outflow of pension costs Deferred outflow of OPEB Deferred inflow of pension contributions The City has an equity interest in two joint ventures. This equity interest for the provision of governmental services is not a current financial resource and therefore is not reported in the funds. 80,708,406 242,011,601 7,294,091 11,564,783 331,071 (10,081,511) Revenue that was not collected within the recognition period and therefore was not available to pay current liabilities: Unavailable revenue reported for propertytaxand other receivables 106,147 Unavailable revenue reported for special assessment Some liabilities are not due and payable in the current period and therefore are not reported in the funds. Long term liabilities due within one year Long term liabilities due in more than one year Lease liabilities payable Unfunded other post employment benefits Accrued interest payable Internal service funds are used by management to charge the cost of certain activities, such as health insurance and fleet maintenance, to individual funds. The assets and liabilities of these internal service funds are included in governmental activities in the statement of net position. 330,014,098 18,864,336 1,814,343 11,130,404 2,250,052 2,356,199 (7,263,652) (136,532,384) (214,983) (6,378,071) (536,540) (150,925,630) 6,117,864 Net Position Of Government Activities As Reported On The Statement Of Net Position $ 262,991,008 The notes to the financial statements are an integral part of this statement. 32 CITY OF TUKWILA: 2022 ACFR BASIC FINANCIAL STATEMENTS CITY OF TUKWILA, WASHINGTON STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE YEAR ENDED DECEMBER 31, 2022 Local Public Other Total General Arterial Improvement Safety City Governmental Governmental Fund Street District #33 Flan Facilities Funds Funds REVENUES: Taxes $ 51,350,070 $ 2,685,927 $ - $ 500,000 $ - $ 5,845,873 $ 60,381,870 Licenses and permits 5,376,555 - 5,376,555 Intergovernmental 6,595,757 2,925,751 - 869,511 10,391,018 Charges for services 2,746,965 486,594 300,000 762,269 4,295,828 Fines and forfeitures 485,824 9,687 - - 495,511 Investment earnings (636,037) 67,663 135,033 6,522 37,634 141,723 (247,462) Special assessments - 381,172 381,172 Miscellaneous 340,042 140,040 501 2,544 483,127 Total Revenues 66,259,176 6,315,663 516,706 806,522 37,634 7,621,919 81,557,620 EXPENDITURES: Current: General government 9,052,551 126,051 133,249 9,311,851 Public safety 34,854,415 998,578 317,100 36,170,093 Transportation 4,677,930 2,373,757 369,827 7,421,513 Natural and economic environment 5,619,921 357,810 5,977,731 Culture and recreation 4,849,369 323,007 5,172,376 Debt service: Principal 140,106 - 375,000 - 7,860,310 8,375,416 Interest 15,097 161,063 - 4,775,340 4,951,500 Capital outlay 387,843 3,389,600 - 2,452,261 895,756 7,125,461 Total Expenditures 59,597,232 5,763,357 536,063 998,578 2,578,312 15,032,399 84,505,941 Excess (deficiency)of revenues Over (Under) Expenditures OTHER FINANCING SOURCES (USES): Transfers in Transfers out Lease financing Gain/(loss) on sale of assets held for resale Total Other Financing Sources And Uses 6,661,943 552,305 (19,356) (192,056) (2,540,678) (7,410,480) (2,948,321) 2,553,951 (10,064,760) 98,699 1,300,000 1,106,248 1,000,000 8,584,590 (3,226,996) 1,500,000 14,544,789 (13,291,756) 98,699 1,500,000 (7,412,111) 1,300,000 1,106,248 1,000,000 6,857,594 2,851,732 Net change in fund balances (750,167) Fund balances - Beginning Fund Balances - Ending 23,741,523 1,852,305 (19,356) 3,682,187 601,809 914,193 (1,540,678) (552,886) (96,589) 77,672 3,500,044 12,112,750 43,715,985 $ 22,991,356 $ 5,534,493 $ 582,452 $ 991,865 $ 1,959,366 $ 11,559,864 $ 43,619,395 The notes to the financial statements are an integral part of this statement. 33 CITY OF TUKWILA: 2022 ACFR BASIC FINANCIAL STATEMENTS CITY OF TUKWILA, WASHINGTON RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES FOR THE YEAR ENDED DECEMBER 31, 2022 Net change in fund balances per the Statement of Revenues, Expenditures, and Changes in Fund Balances Amount reported as change in net position in the Statement of Activities are different because: Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. In the current period, these amounts are: Capital Outlay Depreciation Expense (excludes internal service fund depreciation which is reflected in internal service fund change in net position listed below) Excess of Capital Outlay Over Depreciation Expense The net effect of various transactions involving the Citys pension plans are: 6,754,729 (11,247,010) Increase in pension contribution revenue 565,116 Reduction in the Fireman's Pension liability and expense The City has equity interests in two joint ventures. The equity interests for the provision of governmental services are not current financial resources and therefore are not reported in the funds. Repayment of long-term debt is reported as an expenditure in governmental funds, but the repayment reduces long-term liabilities in the Statement of Net Position. In the current year, these amounts consist of: $ (96,589) (4,492,281) 1,162,446 1,727,562 141,587 Bond principal retirement 8,375,416 Amortization expense - 8,375,416 Bond proceeds provide current financial resources to governmental funds, but issuing debt increases long-term liabilities in the statement of net position. General Obligation Bonds issued 85,907 Internal service funds are used by management to charge the costs of certain activities to individual funds. The change in net position of internal service funds is reported with governmental activities. 755,685 Because some revenues will not be collected for several months after the Citys fiscal year ends, they are not considered "available" revenues in the government funds. Changes this year are for: Miscellaneous receivables (157,211) Property taxes (7,805) Special assessment (381,172) Some expenses reported in the Statement of Activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds. These activities consist of: Increase in accrued interest 658,890 Increase in compensated absences (364,111) Miscellaneous expnese (16,876) Change in OPEB Liability 1,472,159 Total additional expense (increase) decrease (546,188) 1,750,061 Change In Net Position On The Statement Of Activities $ 7,701,161 The notes to the financial statements are an integral part of this statement. 34 CITY OF TUKWILA: 2022 ACFR BASIC FINANCIAL STATEMENTS CITY OF TUKWILA, WASHINGTON STATEMENT OF NET POSITION PROPRIETARY FUNDS DECEMBER 31, 2022 Governmental Foster Surface Total Activities Water Sewer Golf Water Enterprise Internal Svc Utility Utility Course Utility Funds Funds ASSETS: Current assets: Cash and cash equivalents $ 4,288,577 $ 7,785,511 $ 1,514,356 $ 4,838,266 $ 18,426,709 $ 8,485,150 Investments 931,043 2,820,495 - 1,911,188 5,662,726 Other Receivables 515,951 836,712 1,874 314,278 1,668,814 44,007 Due from other governmental units - - 376,859 376,859 Inventory of materials and supplies 69,425 69,425 59,642 Restricted cash and cash equivalents 42,675 139,567 182,242 Total Current Assets 5,778,246 11,442,717 1,725,221 7,440,591 26,386,775 8,588,799 Noncurrent Assets: Notes receivable 966,258 - 966,258 Net Pension asset 171,104 233,894 214,534 361,568 981,100 116,162 Capital Assets: Land 87,347 69,525 1,609,575 584,522 2,350,969 Building 1,416,567 4,006,475 6,627,496 3,724,281 15,774,819 Other improvements 28,229,721 17,533,725 3,599,021 58,686,285 108,048,752 Machinery and equipment 874,032 2,107,818 1,335,593 56,139 4,373,582 19,500,092 Leased Assets - 583,965 Less: accumulated depreciation (14,112,583) (10,095,921) (8,540,677) (21,668,186) (54,417,367) (12,789,967) Construction in progress 279,352 62,081 - 1,180,971 1,522,404 Total Capital Assets (Net Of A/D) 16,774,436 13,683,703 4,631,008 42,564,012 77,653,159 7,294,091 Total Noncurrent Assets 16,945,540 14,883,855 4,845,542 42,925,580 79,600,517 7,410,253 Total Assets 22,723,786 26,326,572 6,570,763 50,366,171 105,987,292 15,999,052 Deferred Outflow s of Resources Deferred pension 169,279 224,839 210,746 353,202 958,067 115,132 Deferred Loss on Refunding 4,321 10,304 1,994 16,620 Total Deferred Outflows Of Resources 173,600 235,144 210,746 355,196 974,686 115,132 LIABILITIES: Current liabilities: Accounts payable 380,555 64,738 29,984 274,711 749,988 239,481 Accrued wages and benefits 30,503 39,586 37,707 56,059 163,855 31,394 Accrued interest payable 814 3,142 1,671 5,627 1,622 Lease liability due w ithin one year - 103,097 Unearned revenue 99,540 4 183 99,728 Other current liabilities 155,720 155,496 108,134 419,351 630,000 Due to other governments 80,626 233,436 - 259,356 573,417 Compensated absences 7,063 283 5,731 1,753 14,831 Revenue bond payable 42,266 100,787 - 19,507 162,560 Total Current Liabilities 797,087 441,971 228,923 • 2,189,357 1,005,594 Noncurrent liabilities: Reserve for unreported claims 945,000 Lease liability due in more than one year - - 452,573 Revenue bonds payable 133,937 319,389 - 61,817 515,144 Net pension liability 99,821 136,453 125,158 210,937 572,370 67,769 Compensated absences 94,856 123,411 91,164 78,561 387,992 Due to other governments 80,626 562,836 259,356 902,817 Total Noncurrent Liabilities 409,240 1,142,089 216,322 610,672 2,378,323 1,465,341 Total Liabilities Deferred Inflows of Resources Deferred inflow pension earnings Total Deferred Inflow s Of Resources 1,206,327 1,584,060 445,245 1,332,048 4,567,680 2,470,935 192,626 221,972 237,126 377,275 1,028,999 136,219 192,626 221,972 237,126 377,275 1,028,999 136,219 NET POSITION: Investment in capital assets 16,328,257 12,477,560 4,631,008 41,871,724 75,308,549 6,738,421 Unrestricted 5,170,176 12,278,125 1,468,130 7,140,321 26,056,751 6,768,609 Total Net Position $ 21,498,433 $ 24,755,684 $ 6,099,139 $ 49,012,044 $101,365,300 $ 13,507,030 The notes to the financial statements are an integral part of this statement. 35 CITY OF TUKWILA: 2022 ACFR BASIC FINANCIAL STATEMENTS CITY OF TUKWILA, WASHINGTON STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION PROPRIETARY FUNDS FOR THE YEAR ENDED DECEMBER 31, 2022 Governmental Foster Surface Total Activities Water Sewer Golf Water Enterprise Internal Utility Utility Course Utility Funds Service Funds OPERATING REVENUES: Charges for services $ 7,260,633 $ 9,418,274 $ 2,081,479 $ 7,378,246 $ 26,138,633 $ 10,425,620 Other operating revenue 2,914 - 105,230 - 108,144 190,916 Total Operating Revenues 7,263,546 9,418,274 2,186,710 7,378,246 26,246,776 10,616,536 OPERATING EXPENSES: Operating & maintenance 4,077,709 5,924,116 1,850,252 2,347,977 14,200,053 8,147,971 Administrative and general 1,067,743 1,236,245 209,366 1,712,059 4,225,413 526,356 Taxes 1,067,284 1,108,793 10,373 834,118 3,020,568 12 Depreciation and amortization 550,426 398,609 345,075 1,045,096 2,339,207 1,473,963 Total Operating Expenses 6,763,162 8,667,763 2,415,066 5,939,250 23,785,241 10,148,302 Operating Income (Loss) 500,385 750,511 (228,356) 1,438,996 2,461,536 468,234 NON -OPERATING REVENUE (EXPENSE): Investment earnings 21,011 28,410 18,790 33,124 101,335 128,749 Interest expense (7,179) (19,092) (6,022) (32,294) (10,481) Gain (loss) on disposal of capital assets - (103,650) (103,650) 169,183 Other non -operating revenue 50,000 50,000 - Total Non -Operating Revenue (Expense) 13,832 (94,333) 18,790 77,102 15,391 287,451 Income (Loss) Before Contributions & Transfers Capital contributions Transfers in Transfers out Change in Net Position Total net position - beginning 514,216 656,178 (209,566) 1,516,098 2,476,926 755,685 35,685 122,400 330,250 488,335 300,000 300,000 (528,031) (295,076) (729,926) (1,553,033) - 21,871 483,502 90,434 1,116,422 1,712,229 755,685 21,476,562 24,272,182 6,008,705 47,895,622 99,653,072 12,751,345 Total Net Position - ending $ 21,498,433 $ 24,755,684 $6,099,139 $ 49,012,044 $101,365,300 $ 13,507,030 The notes to the financial statements are an integral part of this statement. 36 CITY OF TUKWILA: 2022 ACFR BASIC FINANCIAL STATEMENTS CITY OF TUKWILA, WASHINGTON STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED DECEMBER 31, 2022 Page 1 of 2 Governmental Foster Surface Total Activities Water Sewer Golf Water Enterprise Internal Utility Utility Course Utility Funds Service Funds CASH FLOWS FROM OPERATING ACTIVITIES: Cash received from customers $ 7,425,720 $ 9,539,886 $ 2,194,799 $ 7,388,069 $ 26,548,473 $ 10,594,593 Cash paid to supplier (3,519,220) (5,937,062) (777,829) (1,845,576) (12,079,687) (1,210,236) Cash paid for taxes (1,067,284) (1,108,793) (10,373) (834,118) (3,020,568) (12) Cash paid to or on behalf of employees (830,274) (1,097,964) (1,144,455) (1,739,168) (4,811,861) (6,810,643) Interfund activity- payments to other funds (720,092) (614,531) (209,366) (658,361) (2,202,350) (526,356) Other cash received 2,914 12,947 - 15,860 2,025 Net Cash Provided (Used) By Operating Activities 1,291,763 781,535 65,722 2,310,847 4,449,867 2,049,371 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Interfund loan receivable (937,922) - (937,922) Operating grant received - 50,000 50,000 Transfers in 300,000 - 300,000 Transfers out (528,031) (295,076) - (729,926) (1,553,033) Net Cash Provided (Used) By Non - Capital Financing Activities (528,031) (1,232,998) 300,000 (679,926) (2,140,955) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Purchase of capital assets (2,366,566) (1,377,152) (11,527) (655,296) (4,410,541) (1,614,044) Contributed capital 35,685 122,400 - 158,085 - Capital grants - 487,170 487,170 - Principalpaymentondebt (137,338) (334,205) (290,456) (761,999) - Proceeds from lease financing - 555,670 Interest payment on debt (7,497) (19,970) (6,817) (34,283) (8,859) Proceeds from sale of equipment (103,650) - (103,650) 169,183 Net Cash Provided (used) for Capital And Related Financing Activities (2,475,716) (1,712,577) (11,527) (465,399) (4,665,219) (898,051) CASH FLOW FROM INVESTING ACTIVITIES: Purchase of investments (1,000,000) (1,000,000) (2,000,000) (4,000,000) - Interest received 89,968 186,521 18,790 121,936 417,215 128,749 Net Cash Provided (Used) In Investing Activities (910,032) (813,480) 18,790 (1,878,064) (3,582,785) 128,749 Net increase (decrease) in cash and Cash equivalents (2,622,016) (2,977,519) 372,985 (712,541) (5,939,091) 1,280,069 Cash and cash equivalents -beginning of year 6,953,268 10,763,029 1,280,938 5,550,807 24,548,042 7,205,081 Cash And Cash Equivalents- end of year 4,331,252 7,785,511 1,653,923 4,838,266 18,608,951 8,485,150 Cash at end of year consists of: Cash and cash equivalents 4,288,577 7,785,511 1,514,356 4,838,266 18,426,709 8,485,150 Restricted cash -customer deposits 42,675 139,567 - 182,242 - Total Cash and cash equivalents $ 4,331,252 $ 7,785,511 $1,653,923 $ 4,838,266 $ 18,608,951 $ 8,485,150 The notes to the financial statements are an integral part of this statement. 37 CITY OF TUKWILA: 2022 ACFR BASIC FINANCIAL STATEMENTS CITY OF TUKWILA, WASHINGTON STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED DECEMBER 31, 2022 Page 2 of 2 Water Utility Sewer Utility Foster Golf Course Surface Water Utility Total Enterprise Funds Governmental Activities Internal Service Funds RECONCILIATION OF NET OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES Operating Income (Loss) Adjustments to reconcile operating income to net cash Provided (used) by operating activities: $ 500,385 $ 750,511 $ (228,356) $ 1,438,996 $ 2,461,536 $ 468,234 Depreciation 550,426 398,609 345,075 Asset (increase) decrease: Accounts receivable 158,367 121,612 172 Inventory and other (8,882) Deferred outflow of resources (increase) decrease (117,637) (170,971) (144,166) Liability increases (decreases): Accounts payable 16,558 (350,346) (27,675) Other liabilities 119,765 (67,641) 20,864 Wages & benefits payable 17,786 26,073 54,363 Deferred inflow of resources increase (decrease) 46,113 73,688 54,327 Total Adjustments 791,378 31,024 294,078 Net Cash Provided (Used) By Operating Activities SCHEDULE OF NONCASH INVESTING, CAPITAL AND FINANCING ACTIVITIES Capital assets acquired by contributed capital Increase (decrease) in fair value of investment Total Non Cash investing, Capital and Financing Activities 1,045,096 9,822 (253,180) (38,516) 26,752 (20,383) 102,260 2,339,207 1,473,963 289,973 (8,882) (685,954) (399,979) 99,741 77,839 276,388 871,850 1,988,331 (19,917) (32,148) (84,233) 196,907 10,680 35,885 1,581,137 $ 1,291,763 $ 781,535 $ 65,722 $ 2,310,847 $ 4,449,867 $ 2,049,371 $ - $ (68,957) (158,111) $ (156,920) $ (88,812) (156,920) $ (315,880) (793,473) $ (68,957) $ (158,111) $ $ (245,732) $ (472,800) $ (793,473) The notes to the financial statements are an integral part of this statement. 38 CITY OF TUKWILA: 2022 ACFR BASIC FINANCIAL STATEMENTS CITY OF TUKWILA, WASHINGTON STATEMENT OF FIDUCIARY NET POSITON FIDUCIARY FUNDS DECEMBER 31, 2022 Pension and Other Employee Benefit Custodial Trust Funds Funds ASSETS: Cash and cash equivalents $ 1,627,552 $ 301,276 Customer accounts 8,000 Total Assets 1,627,552 309,276 LIABILITIES: Accounts and other payables Total Liabilities 61,444 302,464 61,444 302,464 NET POSITION: Restricted for pensions 1,566,108 Restricted for individuals, organizations and other governments 6,812 Total Net Position $ 1,566,108 $ 6,812 The notes to the financial statements are an integral part of this statement. 39 CITY OF TUKWILA: 2022 ACFR BASIC FINANCIAL STATEMENTS CITY OF TUKWILA, WASHINGTON STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FIDUCIARY FUNDS FOR THE YEAR ENDED DECEMBER 31, 2022 Pension and Other Employee Benefit Custodial Trust Funds Funds ADDITIONS: Contributions from nonemployer entities: Fire Insurance FYemiums Transferred in $ 74,397 $ Investment earnings/(loss) 23,681 Total Additions 98,079 DEDUCTIONS: Benefit payments $ 63,194 $ Total Deductions 63,194 Change In Net Position 34,884 Net position - beginning 1,531,223 6,812 Net position - ending $ 1,566,108 $ 6,812 The notes to the financial statements are an integral part of this statement. 40 CITY OF TUKWILA: 2022 ACFR NOTES TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS For the Year Ended December 31, 2022 NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting and reporting policies of the City of Tukwila conform to generally accepted accounting principles as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for establishing governmental accounting and financial reporting principles. The City's significant accounting policies are described in this note. A. The Reporting Entity The City of Tukwila was incorporated on June 23,1908 and operates under the laws of the State of Washington applicable to a non -charter optional code city with a Mayor/Council form of government. Tukwila is served by a Mayor and seven councilmembers, all elected at large to four-year terms. The City provides what are considered general government services including public safety (police and fire), streets, parks, planning and zoning, permits and inspection, general administrative, water services, sanitary sewer collection, and storm drainage. The City of Tukwila has no component units (either blended or discretely presented) included in these statements. B. Basis of Presentation The City's basic financial statements consist of government -wide statements, including a statement of net position and a statement of activities, and fund financial statements which provide a more detailed level of financial information. Government -wide Financial Statements The statement of net position and the statement of activities report information on all of the nonfiduciary activities of the City. The activity of the internal service funds is eliminated to avoid "doubling up" revenues and expenses. The statements distinguish between governmental activities and business -type activities. The statement of net position presents the financial condition of the governmental and business -type activities of the City at year-end. The statement of activities presents a comparison between direct expenses and program activity of the City. Direct expenses are those specifically associated with a service, program, or department and therefore clearly identifiable to a particular function. Indirect costs are included in the program expense reported for individual functions and activities. The statement of activities reports the expenses of a given function offset by program revenues directly connected with the functional program. A function is an assembly of similar activities and may include portions of a fund or summarize more than one fund to capture the expenses and program revenues associated with a distinct functional activity. Program revenues include charges paid by the recipient of the goods or services offered by the program, grants and contributions that are restricted to meeting the operational or capital requirements of a particular program and interest earned on grants that is required to be used to support a particular program. For identifying which function program revenue pertains, the determining factor for charges for services is which function generates the revenue. For grants and contributions, the determining factor is to which functions the revenues are restricted. Revenues which are not classified as program revenues are presented as general revenues of the City, with 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. 41 CITY OF TUKWILA: 2022 ACFR NOTES TO THE FINANCIAL STATEMENTS Fund Financial Statements During the year, the City segregates transactions related to certain City functions or activities in separate funds in order to aid financial management and to demonstrate legal compliance. Fund financial statements are designed to present financial information of the City at this more detailed level. The focus of governmental and enterprise fund financial statements is on major funds. Each major fund is presented in a separate column. Non -major funds are aggregated and presented in a single column. Internal service funds are combined, and the totals are presented in a single column on the face of the proprietary fund statements. Fiduciary funds are reported by type. While fiduciary funds are excluded from the government -wide statements, they are included in the fund financial statements. C. Fund Accounting The accounts of the City are organized on the basis of funds; each of which is considered a separate accounting entity. Each fund is accounted for with a separate set of self -balancing accounts that are comprised of assets, deferred outflow of resources, liabilities, deferred inflow of resources, fund equity, revenues and expenditures or expenses, as appropriate. The City's resources are allocated to - and accounted for - in individual funds according to the purpose for which they are spent and how they are controlled. There are three categories of funds: governmental, proprietary and fiduciary. Governmental Funds All governmental funds are accounted for on a "flow of current financial resources" measurement focus. Their reported fund balance is considered a measure of "available spendable resources." Governmental fund operating statements focus on measuring changes in current financial position, rather than net income; they present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in fund balance. The following are the City's major governmental funds: • The general fund accounts for all the City's financial resources except those required by statute or generally accepted accounting principles to be accounted for in another fund. As is the case with most municipalities, the general fund is the largest and most important accounting entity of the City. The general fund receives the bulk of its revenues from local taxes, followed by State shared revenues, service charges, and other income. • The Arterial Street fund was established in accordance with RCW 82.36.020 for the administration of the State -levied motor vehicle half -cent gasoline tax distributed to Tukwila and is used primarily to account for capital arterial street projects. In addition to the State -levied motor vehicle gasoline tax, other revenue includes state and federal grants, impact fees, and transfers in from the general fund. • The Local Improvement District (LID) #33 accounts for assessments related to the LID and provides payment to the Fiscal Agent for principal and interest on bonds issued in November 2013. • The Public Safety Plan fund was established in 2016 after voters approved a $77.4 million bond measure to construct a justice center, rebuild 3 fire stations, and provide for life -cycle replacement of fire department apparatus and equipment. • The City Facilities fund was established in 2016 to account for costs of building a new public works shop facility. The public works shop facility is part of the City's public safety plan but is not included in the voter - approved bonds. The other governmental funds of the City account for the proceeds of specific revenue sources that are segregated to ensure that expenditures are made exclusively for qualified purposes. 42 CITY OF TUKWILA: 2022 ACFR NOTES TO THE FINANCIAL STATEMENTS Proprietary Funds The City of Tukwila maintains two different types of proprietary funds: enterprise and internal service. Enterprise funds are used to report the same functions presented as business -type activities in the government -wide financial statements. Proprietary funds are accounted for on a "flow of economic resources" measurement focus. This means all assets and all liabilities (whether current or noncurrent) associated with their activity are included on their balance sheets. Proprietary fund operating statements present increases (revenues and gains) and decreases (expenses and losses) in net position. 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 internal and external customers for sales and services. Operating expenses for the enterprise funds and internal service funds include the cost of sales and services, administrative expenses, taxes, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non -operating revenues and expenses. Restricted assets shown in the government -wide financial statements and the proprietary funds balance sheet include monies reserved for payment of revenue bond debt, and deposits held for utility and golf course customer accounts. When both restricted and unrestricted resources are available for use, it is the City's policy to use restricted resources first, then unrestricted resources as they are needed. The City's enterprise funds account for utility and golf course operations, which are self -supported through user charges. The enterprise activities are financed and operated like a private business enterprise, which requires periodic determination of revenues earned, expenses incurred, and net income for capital maintenance, public policy, management control and accountability. The City's major enterprise funds are as follows: • Water Utility Fund accounts for operations and capital improvements to provide water services to the City. • Sewer Utility Fund accounts for operations and capital improvements to provide sanitary sewer services to the City. • Foster Golf Course Fund is used to account for the operation, maintenance, and improvements of the municipal golf course facility. • Surface Water Utility Fund accounts for the operations and capital improvements for the City's storm drainage and surface water management function. The City has three internal service funds. The Equipment Rental Fund is used to account for the costs of maintaining and replacing all City vehicles and auxiliary equipment. All equipment costs, including depreciation, are factors in calculating the rates charged to each user department. The Insurance and Insurance — LEOFF I Funds are used to account for the costs of the City's self -insured medical plan for active employees and retired LEOFF I employees respectively. Medical and dental costs for covered employees are charged to the respective user departments. All premiums, medical and dental costs and ancillary charges are included. Fiduciary Funds Fiduciary funds account for assets held by the City in a trustee capacity or as an agent for individuals, private organizations, other governments, and other funds. The City has two fiduciary funds, Firemen's Pension Trust Fund and Custodial Fund. The Firefighters' Pension Fund accounts for a single -employer defined benefit system established under Washington State law to provide pension benefits for eligible firefighters. Although this pension plan has subsequently been replaced by the Washington State Law Enforcement Officers' and Fire Fighters' Pension System, firefighters hired prior to March 1, 1970 continue to be eligible for benefits under the provisions of the earlier law. Revenues received by the fund include proceeds of a state -imposed tax on fire insurance premiums. The custodial fund functions primarily as a clearing mechanism for cash resources that are collected by the City, 43 CITY OF TUKWILA: 2022 ACFR NOTES TO THE FINANCIAL STATEMENTS held for a period of time, and then disbursed to authorized recipients. Examples include sales tax and leasehold tax collected by the City then remitted to the State of Washington and court remittances due to King County and the State of Washington. Fiduciary funds are excluded from the government -wide financial statements. D. Measurement Focus Government -wide Financial Statements The government -wide financial statements are prepared using the economic resources measurement focus. All assets, deferred outflow of resources, liabilities, and deferred inflow of resources associated with the operation of the City are included on the Statement of Net Position. Fund Financial Statements All governmental funds are accounted for using a flow of current financial resources measurement focus. With this measurement focus, only current assets, current liabilities, and deferred inflow of resources generally are included on the balance sheet. The statement of revenues, expenditures and changes in fund balances reports on the sources (i.e., revenues and other financing sources) and uses (i.e., expenditures and other financing uses) of current financial resources. This approach differs from the manner in which the government activities of the government -wide financial statements are prepared. Governmental fund financial statements therefore include a reconciliation with brief explanations to better identify the relationship between the government -wide statements and statements for governmental funds. Like the government -wide statements, all proprietary and internal service fund types are accounted for on a flow of economic resources measurement focus. All assets and all liabilities associated with the operation of these funds are included on the statement of net position. The statement of changes in activities presents increases (i.e., revenues) and decreases (i.e., expenses) in net total position. The statement of cash flows provides information about how the City finances and meets the cash flow needs of its proprietary activities. Fiduciary funds are reported using the economic resources measurement focus. E. Basis of Accounting Basis of accounting refers to the recognition of revenues and expenditures or expenses in the accounts and reporting them in the financial statements. Government -wide financial statements are prepared using the accrual basis of accounting. Governmental funds use the modified accrual basis of accounting. Proprietary and fiduciary funds use the accrual basis of accounting. Revenues — Exchange and Non -Exchange Transactions Revenue resulting from exchange transactions, in which each party gives and receives essentially equal value, is recorded on the accrual basis when the exchange takes place. The modified accrual basis of accounting is followed in all governmental funds of the City. Under the modified accrual basis of accounting, revenues are recorded when susceptible to accrual, i.e., both measurable and available. "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to pay current liabilities. For the City, available means expected to be received within sixty (60) days of year-end. The primary accrued revenues that meet these criteria are sales, real estate, and utility taxes. Non -exchange transactions, in which the City receives value without directly giving equal value in return, include property taxes, sales and use taxes, admission taxes, gambling taxes, utility taxes, hotel/motel taxes, grants, entitlements, and donations. These revenues are on an accrual basis. On the accrual basis, the revenue is recognized in the period in which the income is earned. Revenue from property taxes is recognized in the fiscal year for which the taxes are levied. (See Note 3 on receivables). 44 CITY OF TUKWILA: 2022 ACFR NOTES TO THE FINANCIAL STATEMENTS Other Revenue Sources Revenue sources which are not considered to meet the measurable and available criteria for revenue recognition include licenses and permits, fines and forfeitures, and other miscellaneous revenues since they are generally not measurable until received. Under the modified accrual basis, expenditures are recorded when the fund liability is incurred, except for principal and interest on general long-term debt and vacation and sick pay which are recorded when paid. As a general rule the effect of interfund activity has been eliminated from the government -wide financial statements via the process of consolidation. Internal service fund and similar internal activity has also been eliminated from the government -wide statement of activities, so expenses are not reported twice. Exceptions to this general rule are payments for interfund services provided and used, such as between the City's water, sewer, and surface water functions and various other functions of the City, which are not eliminated in the process of consolidation. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Amounts reported on the government -wide statements as program revenues include charges to customers or applicants for goods, operating grants and contributions, and capital grants and contributions. General revenues include all taxes. The accrual basis of accounting is followed in all proprietary funds. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recorded when incurred. All assets and liabilities are recorded in the fund. F. Budgets and Budgetary Accounting The City of Tukwila budgets its funds in accordance with the Revised Code of Washington 35A.33. In compliance with the code, biennial budgets are adopted for the general fund and special revenue funds. For governmental funds, there are no substantial differences between the budgetary basis and generally accepted accounting principles. Budgetary accounts are integrated in fund ledgers for all budgeted funds, but the financial statements include budgetary comparisons for biennially budgeted governmental funds only. Budgets established for proprietary and fiduciary funds are "management budgets" and are not legally required to be reported and, as such, are not reported in the Annual Comprehensive Financial Report. The biennial appropriated budgets are adopted at the fund level and the budgets constitute the legal authority for expenditures at that level. Subsidiary revenue and expenditure records are used to compare the budgeted amounts with actual revenues and expenditures. As a management control device, the subsidiary ledgers monitor expenditures for individual functions and activities by object class. Any unexpended appropriation balances lapse at the end of the biennium. The City of Tukwila's budget procedures are mandated by RCW 35A.33. The steps in the budget process are as follows: 1) Prior to November 1 on even numbered years, the Mayor submits a proposed budget to the City Council. This budget is based on priorities established by the Council and estimates provided by the City departments during the preceding months and balanced with revenue estimates made by the Mayor. 2) The City Council conducts public hearings on the proposed budget in November. Public hearings are also held in December, if necessary. 3) The Council makes its adjustments to the proposed budget and adopts by ordinance a final balanced budget no later than December 31. 4) The final operating budget as adopted is published and distributed within the first month of the following year. Copies of the budget are made available to the public. The City Council must approve, by ordinance, any amendments that increase the total for the fund. Budget amounts presented in the financial schedules include both the original amounts and the final amended budget as approved 45 CITY OF TUKWILA: 2022 ACFR NOTES TO THE FINANCIAL STATEMENTS by the City Council. The final budget is the original budget adjusted by all reserves, transfers, allocations, supplemental appropriations, and other legally authorized changes applicable to the fiscal year. Expenditure Categories General Government Includes administration, finance, municipal court, attorney, and city clerk activities. Public Safety Includes all police and fire activities. Transportation Includes all residential and arterial street maintenance and construction. Natural and Economic Reflects all planning and building inspection as well as Environment environmental and community services. Culture and Recreation Includes expenditures related to parks and recreational activities. G. Assets, Liabilities, and Fund Equity Cash and Cash Equivalents The government's cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term investments with original maturities of three months or less from the date of acquisition. Investments Investments are held separately by each fund with interest earned directly for the benefit of each fund. Investments are reported in the financial statements at fair value, based on quoted prices in accordance with GASB Statement No. 72, Fair Value Measurement and Application. Washington State statutes provide for the City to hold investments consisting of obligations of the Federal Government, repurchase agreements, prime banker's acceptances, and time certificates of deposit. Additional deposit and investment information is presented in Note 2. Notes Receivable Notes receivable in the enterprise funds consists of sewer connection fees due from customers to the utility. In the governmental funds, it consists of the special assessment as well as developer agreements, of which the City currently has one developer agreement. Amounts Due to and From Other Funds and Governments, Interfund Loans and Advances Receivable Activity between funds that is representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either "interfund loans receivable/payable" or "advances to/from other funds." Any residual balances outstanding between the governmental activities and business -type activities are reported in the government -wide financial statements as "internal balances." As of December 31, 2022, there is one interfund loan outstanding from the sewer fund to the general fund for the purchase of a fire engine. The non -current portion of interfund loans in the general fund and advances between funds, as reported in the fund financial statements, are offset by a fund balance nonspendable account in applicable governmental funds to indicate they are not available for appropriation and are not expendable available financial resources. See Note 4 on interfund transactions. 46 CITY OF TUKWILA: 2022 ACFR NOTES TO THE FINANCIAL STATEMENTS Special Assessments Special assessments are amounts levied against benefited properties to recover costs associated with the construction of Local Improvement District (LID) projects. A lien is recorded against benefited properties until the assessment has been paid. Special assessments receivable represents all outstanding assessment amounts including current assessments billed but not collected, delinquent assessments unpaid at year-end, and special assessment amounts due in future years, which are recorded in a deferred inflow of resources account in the fund financial statements. Since special assessments are secured by liens against related properties, no allowance for uncollectible amounts is made. Inventories Inventory is defined as items purchased for resale to external customers or other City departments or supplies and small tools used in normal operations that are considered material in amount. The inventory amount on this year's financial statements reflect only those items that will be resold. Inventory held for resale is valued at lower of cost or market and there is a physical inventory count taken annually at year-end. Governmental funds use the purchase method whereby inventory items are considered expenditures when purchased. Real Property Held for Resale Governmental funds do not report property, plant, and equipment because such assets normally are used in operations, and therefore will never be available for spending (they are not financial assets). However, specific items of property occasionally are acquired with the intent of sale. Examples include foreclosure properties, redevelopment properties, and donated assets held for resale rather than retained for use in operations. Governments often acquire redevelopment properties to attract private -sector investment in an economically depressed area and are willing to sell the property at a price that may be far less than the government's cost to acquire and improve the property. Since assets held for sale can never be reported at an amount higher than their net realizable value, any cost in excess of net realizable value must be excluded from the property value reported in the financial statements. As part of a crime -reduction project, the City purchased three crime -ridden motels in 2014 plus an adjacent motel and retail shop in 2015 comprising approximately 2.3 acres. All structures on those properties were demolished in 2016 and the property is currently vacant land. In 2020 the City entered into an agreement to sell 1.7 acres of the land to HealthPoint, a federally recognized community health center, the sale will complete in 2023. HealthPoint plans to build a Health and Wellness Center by 2026. In 2021 the City sold the remaining 0.6 acres to the Tukwila Community Coalition, LLC for private development. Leases Lessee: The City is a lessee for noncancelable leases. The City recognizes a lease liability and an intangible right - to -use lease asset in the government -wide and proprietary fund financial statements. The City recognizes lease liabilities with an initial, individual value of $5,000 or more. At the commencement of a lease, the City initially measures the lease liability at the present value of payments expected to be made during the lease term. Subsequently, the lease liability is reduced by the principal portion of lease payments made. The lease asset is initially measured as the initial amount of the lease liability, adjusted for lease payments made at or before the lease commencement date, plus certain initial direct costs. Subsequently, the lease asset is amortized using the straight-line basis method over its useful life. 47 CITY OF TUKWILA: 2022 ACFR NOTES TO THE FINANCIAL STATEMENTS Governmental funds recognize a capital outlay and other financing source at the commencement of a new lease. Lease payments in governmental funds are reported as debt service principal and debt service interest expenditures. Key estimates and judgements related to leases include how the City determines (1) the discount rate it uses to discount the expected lease payments to present value, (2) lease term, and (3) lease payments. The City uses the interest rate charged by the lessor as the discount rate. When the interest rate charged by the lessor is not provided, the City generally uses its incremental borrowing rate as the discount rate for leases. The lease term includes the noncancelable period of the lease. Lease payments included in the measurement of the lease liability are composed of fixed payments and purchase option price that the City is reasonably certain to exercise. The City monitors changes in circumstances that would require a remeasurement of its lease, and will remeasure the lease asset and liability if certain changes occur that are expected to significantly affect the amount of the lease liability. Lessor: The City is a lessor for noncancelable leases. The City recognizes a lease receivable and a deferred inflow of resources in the government -wide and fund financial statements. At the commencement of a lease, the City initially measures the lease receivable at the present value of payments expected to be received during the lease term. Subsequently the lease receivable is reduced by the principal portion of lease payments received. The deferred inflow of resources is initially measured as the initial amount of the lease receivable, adjusted for lease payments received at or before the lease commencement date. Subsequently, the deferred inflow of resources is recognized as revenue over the life of the lease term using the straight-line basis method. Key estimates and judgments related to lease include how the City determines (1) the discount rate it uses to discount the expected lease payments to present value, (2) lease term, and (3) lease payments. The City uses its estimated incremental borrowing rate as the discount rate for leases. The lease term includes the noncancelable period of the lease. Lease receipts included in the measurement of the lease liability are compose of fixed payments from the lessee. The City monitors changes in circumstances that would require a remeasurement of its lease, and will remeasure the lease receivable and deferred inflows of resources if certain changes occur that are expected to significantly affect the amount of the lease receivable. Deferred Outflows /Inflows of Resources Deferred outflow of resources represent a consumption of net assets that applies to future periods and so will not be recognized as an outflow of resources (expense/expenditure) until then. The City has three items that qualify for reporting in this category. The City reports a deferred outflow related to pension, deferred outflow related to OPEB and a deferred loss on refunding water/sewer bonds. Deferred inflow of resources represent an acquisition of net assets that applies to future periods and will not be recognized as an inflow of resources (revenue) until that time. The City has six items that qualify for reporting in this category. The City reports business taxes that are received in advance and a deferred inflow related to pensions as well as unavailable revenues from special assessments, developer agreements and unavailable receivables including leases. Capital Assets and Depreciation The accounting and reporting treatment applied to the capital assets associated with a fund are determined by its measurement focus. Capital assets acquired in governmental funds are accounted for as expenditures in the fund when the asset is purchased. These assets are reported in the governmental activities column of the government - wide statement of net position but are not reported in the fund financial statements. Capital assets utilized by the proprietary funds are reported both in the business -type activities column of the government -wide statement of net position and in the respective funds. 48 CITY OF TUKWILA: 2022 ACFR NOTES TO THE FINANCIAL STATEMENTS All capital assets are capitalized at cost (or estimated historical cost) and updated for additions and retirements during the year. Where historical cost is not known, assets are recorded at estimated historical costs. Donated assets are recorded at acquisition value at time of acquisition. The City maintains two capitalization thresholds based on the type of asset being capitalized. The capitalization threshold for equipment and intangible items is ten thousand ($10,000) dollars while the threshold for buildings and infrastructure is one hundred thousand ($100,000) dollars. The City's infrastructure consists of roads, bridges, storm sewers, water and sewer distribution and collection systems. Improvements are capitalized when they extend the useful life of the asset or increase the assets capacity and/or efficiency. Costs incurred for maintenance and repairs that do not add to the value of the asset, or materially extend an asset's life, are not capitalized. Depreciation is computed using the straight-line method over estimated service lives, as follows: Asset Estimated Service Life Buildings 25 to 50 years Non -Building Improvements 25 to 50 years Machinery and Equipment 2 to 50 years Intangibles 2 to 50 years Infrastructure 25 to 50 years See Note 6 for additional information on capital assets. Other Liabilities and IBNR reserve Other liabilities include retainage, deposits and the incurred -but -not -reported (IBNR) claims. The IBNR reserve includes the claim reserve for the self -insured healthcare funds. The self-insurance fund for active employees includes an IBNR liability of $602,200 determined using actuarial methods. This liability is multiplied by a factor of 2.5 to meet the City's financial goal of maintaining reserves at 1 x IBNR for claim fluctuations plus 1.5 x IBNR for a claims reserve yielding a total liability of $1,505,500. The self-insurance fund for LEOFF 1 retirees includes an IBNR liability of $27,800 and total liability of $69,500 utilizing the same calculations as the active employees' self- insurance fund. Compensated Absences City policy and labor contracts with City of Tukwila employees call for the accumulation of vacation and sick leave. At termination of employment, employees with the required length of service may receive cash payments for all accumulated vacation leave to a maximum of 624 hours. Sick leave termination benefits are based on a percentage of accumulated sick leave up to a maximum of 180 hours. The payment is based on current wages at termination. The entire compensated absence liability, which includes salary and wages as well as related taxes, is reported on the government -wide financial statements. In the enterprise funds, the entire amount of compensated absences is reported as a fund liability. This reporting format is in compliance with GASB Statement No. 16. The current portion reported on the schedule of long-term liabilities is calculated using the last -in -first -out (LIFO) approach. Anticipated subsequent yearly usage is used to determine the current portion of the liability. Long -Term Obligations In the government -wide financial statements, and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business - type activities, or proprietary fund type statement of net position. Bond premiums and discounts are amortized over 49 CITY OF TUKWILA: 2022 ACFR NOTES TO THE FINANCIAL STATEMENTS the life of the bonds using the straight-line method. Bonds payable are reported net of the applicable bond discount. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as expenses. In the fund financial statements, governmental fund types recognize bond premiums and discounts during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. Long-term debt outstanding at year-end is outlined in Note 10. Fund Balance/Net Position A fund balance represents the difference between the current assets and current liabilities plus deferred inflows. The City restricts those portions of fund balance which are legally segregated for a specific future use or which do not represent available, spendable resources and therefore are not available for general appropriation or expenditure. Net position represents the difference between assets plus deferred outflow of resources and liabilities plus deferred inflow of resources. Net investment in capital assets consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any borrowing used (i.e., the amount that the City has spent) for the acquisition, construction, or improvement of those assets. Net position is reported as restricted when there are limitations imposed on their use either through the enabling legislation adopted by the City or through external restrictions imposed by creditors, grantors or laws or regulations of other governments. The remaining balance is reported as unrestricted. The City's current Reserve Policy addresses the various types of the City's operating and restricted use funds. The objectives of this Policy are to establish, attain, and restore minimum fund balances, including self-insurance health care reserve funds, and specified review and reporting of fund balances. At the close of each fiscal year, the General Fund balance shall equal or exceed 18%, and the Contingency Reserve Fund balance shall equal or exceed 10%, of the previous year General Fund revenue, exclusive of significant non - operating, non -recurring revenues such as real estate sales or transfers in from other funds. Additionally, 10% of the previous year one-time revenues shall be set aside in a one-time revenue reserve within the Contingency Reserve fund. Enterprise funds, at the close of each fiscal year, the unrestricted fund balance shall equal or exceed 20% of the previous year revenue, exclusive of the effects of GASB Statement No. 68, as well as significant non -operating, non -recurring revenues such as real estate sales, transfers in from other funds or debt proceeds. The City shall maintain a reserve balance in each of its self -insured health care funds an amount equal to 2.5 times or 250%, of the actuarially determined IBNR liability. Fund Balance Components The fund balance amounts for governmental funds have been classified in accordance with GASB Statement No. 54 and are reported as nonspendable, restricted, committed, assigned or unassigned. • Nonspendable fund balance includes items that cannot be spent. This includes activity that is not in a spendable form (inventories, prepaid amounts, long-term portion of loans/notes receivable, or property held for resale unless the proceeds are restricted, committed or assigned) and activity that is legally or contractually required to remain intact, such as a principal balance in a permanent fund. • Restricted fund balances have constraints placed upon the use of the resources either by an external party or imposed by law through a constitutional provision or enabling legislation. • Committed fund balances can be used only for specific purposes pursuant to constraints imposed by a formal action in the form of ordinances and resolutions of Tukwila Councilmembers, the City's highest level of 50 CITY OF TUKWILA: 2022 ACFR NOTES TO THE FINANCIAL STATEMENTS decision -making authority. This formal action is the passage of an ordinance by City Council creating, modifying, or rescinding an appropriation. These committed amounts cannot be used for any other purpose unless Council removes or changes the specified use by taking the same type of action it employed to previously commit those amounts. • Assigned fund balance includes amounts that are constrained by the City's intent to be used for a specific purpose but are neither restricted nor committed. Intent of use and authority to assign amounts is determined through the budgetary process, either during adoption or amending, and the Finance Director has final authority. • Unassigned fund balance is the residual amount not included in the four categories described above. Also, any deficit fund balances within the other governmental fund types are reported as unassigned. Each fund has been analyzed to classify the fund balance in accordance with GASB Statement No. 54. Funds are created by the City Council and money is authorized to be transferred to the fund for a particular purpose. At this point, balances in these funds are at least committed, and may be further restricted depending on whether there is an external party, constitutional provision, or enabling legislation constraint involved. The City applies restricted resources first when an expense is incurred for purposes of which both restricted and unrestricted fund balance is available in the governmental funds. When expenditures are incurred for purposes, for which unrestricted (committed, assigned, and unassigned) resources are available, and amounts in any of these unrestricted classifications can be used, it is the City's policy to spend committed resources first, assigned second, followed by unassigned. Operating Revenues and Expenses Operating revenues are generated directly from the primary activity of the proprietary funds. For the City, these revenues are service fees for utilities, charges for services for the use of the golf course and the internal use of vehicles, computers, and facilities. Operating expenses are necessary costs incurred to provide the good or service that are the primary activity of each fund. All other revenues and expenses are classified as non -operating including investment earnings, interest expense and the gain or loss on the disposition of capital assets. Contributions of Capital Contributions of capital in proprietary fund financial statement arise from outside contributions of capital assets, for example, developers, and grants or outside contributions of resources restricted to capital acquisition and construction. It also includes water and sewer connection charges. Indirect Cost Allocation Indirect costs, also referred to as overhead costs, consist of the cost of central services or support functions shared across departments. They include accounting, human resources, payroll, information technology, janitorial services, and others. These services are paid through the general fund and charged back to the proprietary funds that directly benefit from them. The indirect costs allocated to the proprietary and other funds totaled $2,687,997 for 2022 and are reported as a reduction of general government expenditures on the Statement of Activities. Interfund Activity Exchange transactions between funds are reported as revenues in the seller funds and as expenditures/expenses in the purchaser funds. On the government -wide statement of activities, the exchange transactions between the internal service funds and the user funds are eliminated. Flows of cash or goods from one fund to another without a requirement for repayment are reported as interfund transfers. Interfund transfers are reported as other financing sources/uses in governmental funds and after non -operating revenues/expenses section in proprietary funds. 51 CITY OF TUKWILA: 2022 ACFR NOTES TO THE FINANCIAL STATEMENTS Transfers between governmental and business -type activities on the government -wide statement of activities are reported separately after general revenues. Transfers between funds reported in the governmental activities column are eliminated. Transfers between funds reported in the business type activities column are eliminated. Estimates The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates. Risk Management It is the City of Tukwila's policy to self -insure for unemployment benefits because of the insignificant liability. Medical and dental self-insurance coverage is also provided for employees. All buildings, City equipment, and City vehicles are insured by carriers for property coverage at replacement value. The City of Tukwila is a member of the Washington Cities Insurance Authority (WCIA) as of January 1, 1984. WCIA is an organization of Washington entities numbering 166 as of December 31, 2022. WCIA provides pooled self- insurance coverage for general liability, vehicle liability, false arrest, and errors and omissions. See Note 13 for additional information on risk management. H. Pensions For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of all state sponsored pension plans and additions to/deductions from those plans' fiduciary net position have been determined on the same basis as they are reported by the Washington State Department of Retirement Systems. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. I. Implementation of new GASB Statements As of January 1, 2022, the City of Tukwila adopted GASB Statement No. 87, Leases. The implementation of this standard establishes a single model for lease accounting based on the foundational principle that leases are financings of the right to use an underlying asset. The standard requires recognition of certain lease assets and liabilities for leases that previously were classified as operating leases and recognized as inflows of resources or outflows of resources based on the payment provisions of the contract. The effect of the implementation of this standard had no impact on beginning net position. Additional disclosures required by this standard are included in Note 5. NOTE 2 —DEPOSITS AND INVESTMENTS The City maintains a cash and investment pool available for use by all funds. Interest earned on pooled investments is recorded in the participating funds. Investments are also held separately by several of the funds, with interest earned directly for the benefit of each fund. Cash and Cash Equivalents Custodial credit risk is the risk associated with the failure of a depository financial institution. In the event of a depository financial institution's failure, it is the risk that the City would not be able to recover its deposits or collateralized securities that are in the possession of the outside parties. The City minimizes custodial credit risk by following the restrictions set forth in state law. At year-end, the carrying amount of the City's cash balance held in banks was $3,014,906. Of the bank balance, $250,000 was covered by Federal depository insurance and the Washington Public Deposit Protection Commission (WPDPC) insured the remainder. The City also maintains imprest funds totaling $16,450. 52 CITY OF TUKWILA: 2022 ACFR NOTES TO THE FINANCIAL STATEMENTS The City participates in the Washington State Treasurer's Local Government Investment Pool (LGIP) managed by the Office of the State Treasurer, which is also responsible for establishing the investment policy for the LGIP. The LGIP is an unrated external investment pool. The pool's portfolio is invested in a manner that meets the maturity, quality, diversification, and liquidity requirements set for by GASB 79 "Certain External Investment Pools and Pool Participants" for external investment pools that elect to measured investments at amortized costs for financial reporting purposes. Investments in the LGIP are available on demand in the amount of the original investment, plus interest earnings, and are treated as a money-market investment. Accordingly, the fair value of the City's position in the LGIP is the same as the value of the city's LGIP shares. Regulatory oversight for these investments is provided as prescribed by Washington State law. The State Auditor audits the accounts of the State Treasurer to determine the compliance of investment activities with state statutes and the investment policy. Also, an independent audit of the LGIP's financial statements is performed annually. The State Treasurer has created an Advisory Committee consisting of eight members appointed by participant associations and four members appointed by the State Treasurer. The committee meets at least quarterly to provide advice on the operation of the LGIP. Investments The City's investment portfolio includes certificate of deposits insured by the Washington State Public Depository Commission, U.S. Government Agency Notes, and municipal bonds issued by state and local agencies. These investments are reported at fair value based on quoted market prices. Fair value is the amount at which a financial instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Also, the Firemen's Pension Fund is authorized to invest in stocks, bonds, and mutual funds. At December 31, 2022, the City had the following deposits and investments. Certificates of deposits are measured at amortized cost, agencies and municipal bonds are measured at fair value. SCHEDULE OF INVESTMENTS BY MATURITY Maturity Credit Fair Date Rating Value U.S. Government Agency Notes: Federal Farm Credit Bank 12/7/2023 Aaa $ 1,000,185 Federal Farm Credit Bank 9/19/2024 Aaa 993,556 Federal Home Loan Banks 12/10/2024 Aaa 936,541 Federal Home Loan Mortgage Corp 3/25/2025 Aaa 948,291 Federal Home Loan Bank 4/14/2025 Aaa 1,831,550 Federal Home Loan Mortgage Corp 10/15/2025 Aaa 793,869 Federal Home Loan Bank 12/17/2025 Aaa 931,043 Federal Home Loan Bank 2/24/2026 Aaa 887,668 Federal Farm Credit Bank 5/14/2026 Aaa 1,002,613 Federal Farm Credit Bank 5/26/2026 Aaa 959,047 Federal Farm Credit Bank 6/15/2026 Aaa 888,722 Federal Farm Credit Bank 11/30/2026 Aaa 1,791,890 Federal Home Loan Bank 5/26/2027 Aaa 963,690 Federal Home Loan Bank 6/29/2027 Aaa 952,302 Federal Home Loan Bank 6/30/2027 Aaa 962,897 Federal Farm Credit Bank 9/20/2027 Aaa 988,945 Federal Home Loan Mortgage Corp 11/8/2027 Aaa 1,001,453 Total U.S. Agency Notes 17,834,262 Municipal Bonds: Metro Oregon GO Taxable Bond 6/1/2026 Aaa 1,017,831 King Cnty Washington GO Taxable 12/1/2026 Aaa 847,205 Bellevue WA GO Taxable Ref 12/1/2026 Aaa 827,881 Total Municipal Bonds 2,692,917 TOTAL INVESTMENTS $ 20,527,179 53 CITY OF TUKWILA: 2022 ACFR NOTES TO THE FINANCIAL STATEMENTS RECONCILIATION OF ALL CASH, DEPOSITS AND INVESTMENTS CASH & CASH RESTRICTED SUMMARY BY FUNDS EQUIVALENTS CASH INVESTMENTS TOTAL Governmental Funds General Fund $ 8,525,973 $ - $ Arterial Street 4,049,066 1,292,163 Local Improvement District #33 582,452 Public Safety Plan 992,165 City Facilities 2,681,008 Other Governmental Funds 9,389,918 149,702 Internal Service Funds 8,485,150 14,864,453 $ 23,390,427 - 5,341,229 - 582,452 - 992,165 - 2,681,008 - 9,539,620 8,485,150 Proprietary Funds Water 4,288,577 42,675 931,043 5,262,295 Sewer 7,785,511 - 2,820,495 10,606,006 Foster Golf Course 1,514,356 139,567 - 1,653,923 Surface Water 4,838,266 - 1,911,188 6,749,454 Total as Reported on Statement of Net Position Firemen's Pension Trust Fund Agency Fund Total Cash, Cash Equivalents and Investments 53,132,443 1,624,106 20, 527,179 75, 283, 728 1,627,552 301,276 1,627,552 301,276 $ 55, 061, 271 $ 1,624,106 $ 20, 527,179 $ 77, 212, 556 SUMMARY BY TYPE: Cash and Cash Equivalents: Local Government Investment Pool Money market account Cash on hand Cash in bank -book balance Total cash and cash equivalents Investments: U.S. Government Agency Notes Municipal bonds Total investments Total Cash, Cash Equivalents, and Investments $ 39, 386, 807 15,381,640 16,450 1,900,480 56, 685, 377 17, 834, 262 2,692,917 20, 527,179 $ 77,212,556 54 CITY OF TUKWILA: 2022 ACFR NOTES TO THE FINANCIAL STATEMENTS RESTRICTED CASH SUMMARY Restricted Assets - Governmental Cash & cash equivalents Drug Seizure funds - federal portion Impact fees Restricted Assets -Governmental $ 149,702 1,292,163 $ 1,441,865 Restricted Assets - Business -Type Customer Deposits -Water Utility Customer Deposits -Golf Course Lease Deposits -Golf Course Restricted Assets -Business -Type $ 42,675 124,567 15,000 $ 182,242 Total Restricted Assets $ 1,624,106 Fair Value Measurement The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Fair value is defined as the exchange price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or cost advantageous market for the asset or liability in an orderly transaction. There is a fair value hierarchy which requires an entity to maximize the use of observable inputs when measuring fair value. The guidance requires three levels of fair value measurement based on the respective inputs. • Level 1 inputs are quoted prices in active markets for identical assets. These valuation inputs are considered most reliable. • Level 2 inputs are quoted prices for similar assets, quoted prices for identical or similar assets in markets that are not active, or other observables. These valuation inputs are considered to be reliable. • Level 3 inputs are significant unobservable inputs and are considered to be the least reliable. U.S. Agency Securities and municipal bonds classified in Level 2 are valued using quoted prices for similar securities and interest rates. The level of fair value measurement is based on the lowest level of significant input for the security type in its entirety. There are no Level 1 or Level 3 security classifications to report. The fair values noted in the following table have been provided by Time Value Investments, who obtains the information through Interactive Data (IDC). IDC evaluates the various securities and obtains feeds from a number of live data and market sources including active market makers and inter -dealer brokers, relative credit information, observed market movements, and sector news. IDC reviews sources on the basis of their historical accuracy for individual issues and maturity ranges. 55 CITY OF TUKWILA: 2022 ACFR NOTES TO THE FINANCIAL STATEMENTS The City has the following recurring fair value measurements as of December 31, 2022: Fair Value Measurements Using Investments by Fair Value Level US Government Agencies Municipal Bonds Total Investments by Fair Value Level Interest Rate Risk Total 17, 834, 262 2,692,917 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) 17, 834, 262 2,692,917 Significant Unobservable Inputs (Level 3) $ 20, 527,179 $ - $ 20,527,179 $ 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 investment maturities as follows: 1) At the time of investment, a minimum of thirty percent (30%) of the cash and investment portfolio will be comprised of investments maturing or available within one year. 2) At the time of investment, eighty percent (80%) of the portfolio will be comprised of investments maturing or available within five (5) years and no instruments shall have a maturity exceeding ten (10) years, except when compatible with a specific fund's investment needs. 3) The average maturity of the portfolio shall not exceed three and one half (3'/2) years or forty-two (42) months. The City uses the weighted average maturity method to manage interest rate risk. Credit Risk Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. State statutes and the City's investment policy limit the types of securities authorized for investment by the City. The principal governing statutes are RCW 39.59 and RCW 39.60. The Finance Director may further restrict eligible investments by this policy at his/her discretion. Authorized investments include (but are not limited to): 1) U.S. Treasury Securities. 2) U.S. Agency Securities (i.e., obligations of any government -sponsored corporation eligible for collateral purposes at the Federal Reserve). 3) Certificates of Deposit, Money Market Deposit Accounts and savings deposits with qualified depositories within statutory limits as promulgated by the WPDPC at the time of investment. 4) Bankers Acceptances (BA's) purchased on the secondary market with a rating of A-1, P-1, its equivalent or better. 5) General Obligation Bonds of a state or local government which have at the time of the investment one of the three highest credit ratings of a nationally recognized rating agency. 56 CITY OF TUKWILA: 2022 ACFR NOTES TO THE FINANCIAL STATEMENTS 6) The Washington State Local Government Investment Pool (LGIP), an unrated, external investment pool. As of December 31, 2022, the City's investments in municipal bonds were rated Aaa by Moody's Investor Service. Concentration of Credit Risk Concentration of credit risk is the risk of loss attributed to the magnitude of an investment in a single issuer. The City of Tukwila diversifies its investments by security type and institution as described below: 1) No more than fifty percent (50%) of the City's portfolio, at the time of purchase, shall be in any single financial institution, 2) Investment of 100% of the City's portfolio in U.S. Treasury securities shall be allowed; this is a risk -free investment, and in the event of unforeseen circumstances, the City shall have the ability to invest the entire portfolio in a risk free investment. 3) 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 4) No more than seventy-five percent (75%) of the City's portfolio, at the time of purchase, shall be invested in U.S. Treasury or Agency securities. NOTE 3 — RECEIVABLES Taxes receivable consists of property, sales and use, gambling, leasehold, hotel/motel and other taxes. Customer accounts receivable consists of amounts owed by private individuals or organizations for goods and services provided. Uncollectible amounts are considered immaterial and the direct write-off method is used. Customer accounts receivable also includes the current portion of special assessments due from property owners within Local Improvement District No. 33. Other types of accounts receivable include utility taxes due from private organizations and customer accounts receivable for amounts owed which billings have not been prepared. Governmental Business -Type Activities Activities Total Taxes Receivable Property $ 443,521 $ $ 443,521 Sales & Use 4,152,841 - 4,152,841 Real Estate Excise Tax 72,447 72,447 Utility Tax 880,956 - 880,956 Admission/Gambling/Parking/Other 1,738,723 1,738,723 Total Taxes Receivable 7,288,488 7,288,488 Customer Receivable Miscellaneous Utility Accounts Total Customer Receivable Interest Notes due within one year Total Receivables 382,294 1,567,346 382,294 1,567,346 382,294 50,276 60,704 1,567,346 1,949,640 101,468 151,744 937,922 998,626 $ 7,781,762 $ 2,606,736 $ 10, 388, 498 57 CITY OF TUKWILA: 2022 ACFR NOTES TO THE FINANCIAL STATEMENTS Property Taxes Receivable The County Treasurer acts as an agent to collect property taxes levied in the County for all taxing authorities. Collections are distributed daily via wire transfer. January 1st February 14th April 30th May 31st October 31 st Property Tax Calendar Taxes are levied and become an enforceable lien against properties. Tax bills are mailed. First of two equal installment payments is due. If taxes are less than $50, full payment is due. (RCW 84.56.020) Assessed value of property established for next year's levy at 100 percent of market value. Second installment is due. (RCW84.56.020) Assessed values are established by the County Assessor at 100% of fair market value. A revaluation of all property is required every two years. On May 31 of each year the assessed value of property is established for the next year's property tax levy. Property taxes levied by the County Assessor and collected by the County treasurer become a lien on the first day of the levy year and may be paid in two equal installments if the total amount is $50 or more. The first half of real property taxes is due on April 30 and the balance is due October 31. Delinquent taxes bear interest at the rate of 12% and are subject to additional penalties if not paid as scheduled. During the year, property tax revenues are recognized when cash is received. At year-end, unpaid property taxes are recorded as a receivable. Property tax receivables at year-end not expected to be collected within 60 days after the current period are reported as other unavailable revenue in the deferred inflow of resources section of the governmental funds financial statements. The tax rate for general City operations is limited to $3.60 per $1,000 of assessed value. An additional levy rate of $0.225 is available to the City because the City funds a Firemen's Pension Fund. The payment of principal and interest on limited tax (non -voted) bonds issued by the City is made from the general levy. Accordingly, the issuance of limited tax general obligation bonds has the effect of reducing property taxes available for the general operations of City government. State law also provides that the City's operating levy may not exceed 101% of the largest single levy since 1985. The State Constitution provides that the total of all taxes upon real and personal property by the State and all taxing entities, including the City, shall not in any year exceed 1% ($10 per $1,000) of the true and fair monetary value of such property. This limitation may be exceeded upon the approval of 60% of the City voters at an election in which the total vote exceeds 40% of the votes cast at the last general election. Washington State Constitution and Washington State law, RCW 84.55.010, limit the rate. The City's regular levy in 2022 was $2.14677 per $1,000 of assessed valuation of $ 8,010,892,032 for a total regular levy of $17,250,803. Special levies approved by the voters are not subject to the limitations listed above. In 2022, the City levied an additional $0.57394 per $1,000 for the Public Safety Plan approved by voters in November 2016. The total additional levy in 2022 was $4,476,645. Due from Other Governments All receivables from other governments are recorded at year-end as amounts Due from Other Governmental Units. These amounts represent federal, state, and local reimbursement -type grants, and are reported as receivables and intergovernmental revenues in the year when the related expenditures are incurred. As of December 31, 2022, the majority represents grants. 58 CITY OF TUKWILA: 2022 ACFR NOTES TO THE FINANCIAL STATEMENTS Notes Receivable Notes receivable for governmental activities consists of the long-term portion of the special assessments related to Local Improvement District (LID) No. 33. Special assessments are levied against certain property owners benefited by the improvement. The current portion of outstanding assessments is reported in the receivables category on the Statement of Net Position and consists of assessments which are due within one year and delinquent assessments from the prior year. Assessments are charged to property owners within the LID annually with payments due in October of each year. The repayment period for the assessments is 15 years with the first installment due in 2014 and the final installment due in 2028. Notes receivable for business —type activities consists of outstanding payment plans for sewer connection fees. The City designed and constructed sewer infrastructure in both the Allentown and Foster Point neighborhoods, which was previously on septic. The project was completed and accepted by City Council in 2007. The connection fees to be paid by property owners were established by ordinance, effective in August of 2007. One option given to property owners was an installment payment plan. This option allowed owners to sign an agreement to have the connection charge added to their monthly water bill and repaid over 5, 10, or 15 years with a 4% annual interest rate. The balance reflects all principal outstanding at year-end. Business - Governmental Type Activities Activities Total Notes Receivable Special Assessments Sewer Payment Plan Total Receivables NOTE 4 — INTERFUND TRANSACTIONS $ 2,250,052 $ - $ 2,250,052 28,336 28,336 $ 2,250,052 $ 28,336 $ 2,278,387 Interfund activity is the term used to describe similar financial transactions between funds of the primary government. Reciprocal interfund activity involves the exchange of equal or almost equal value between funds. Services Provided/Used — Transactions that would be treated as revenues, expenditures or expenses if they involve external organizations, such as buying goods and services in return for equal or almost equal value, are similarly treated when they involve other funds of the City of Tukwila. Interfund Loans/Advances — Loans between funds are classified as interfund loans receivable and payable or as advances to and from other funds in the fund statements. Interfund loans are offset by a reservation of fund balance/net position. Interfund loans are subject to elimination upon consolidation. As of December 31, 2022, the City had one outstanding interfund loan. The loan is from the sewer utility fund to the general fund to purchase a fire engine. Nonreciprocal interfund activity does not involve the exchange of equal or almost equal value between funds. Transfers — Transactions to support the operations of other funds are recorded as "Transfers" and classified with "Other Financing Sources or Uses" in the fund statements. Transfers between governmental or proprietary funds are netted as part of the reconciliation to the government -wide financial statements. Contributions — Contributions to the capital of enterprise or internal service funds, transfers of capital assets between proprietary and governmental funds, transfers to establish or reduce working capital in other funds, and transfers of remaining balances when funds are closed are classified non -operating revenue. 59 CITY OF TUKWILA: 2022 ACFR NOTES TO THE FINANCIAL STATEMENTS Reimbursements — Repayments from funds responsible for expenditures or expenses to the funds that initially paid for them. These transactions are expenditures/expense in the fund responsible and as a reduction of expenditure/expensed in the fund being reimbursed. Interfund transfers for the year were as follows: SUMMARY OF INTERFUND TRANSFERS Governmental Proprietary Funds Funds General Public Safety Arterial Other GoVt Total Golf Surface Fund Plan Street Facilities Funds Govemmental Water Sewer Course Water TOTAL Transfers In $ 2,553,951 $ 1,106,248 $1,300,000 $1,000,000 $ 8,584,590 $ 14,544,789 $ - $ - $300,000 $ - $14,844,789 Transfers Out (10,064,760) - - - (3,226,996) $ (13,291,756) (528,031) (295,076) - (729,926) (14,844,789) Net Transfers In (Out) $ (7,510,809) $ 1,106,248 $ 1,300,000 $1,000,000 $ 5,357,594 $ 1,253,033 $(528,031) $(295,076) $300,000 $(729,926) $ - The principal purposes for interfund transfers include interfund subsidies and transfers into debt service and capital projects funds. NOTE 5 — LEASES Leases Payable In September 2022, City entered into a 36-month lease as Lessee for the use of 16 separate copiers/printers deployed across City departments, referred to as the Electronic Business Machines — Supplement lease. An initial lease liability was recorded in the amount of $98,699. As of December 31, 2022, the value of the lease liability is $90,638. The City is required to make monthly fixed payments of $2,974. The lease has an interest rate of 3.5841 %. The Equipment estimated useful life was 36 months as of the contract commencement. The value of the right to use asset as of December 31, 2022, of $98,699 with accumulated amortization of $8,499 is included in the table in Note 6. The lease has an unguaranteed residual value of $5,000. In September 2020, the City entered into a 36-month lease as Lessee with Dell Financial Services for laptops which are assigned to City employees. An initial lease liability was recorded in the amount of $305,975. As of December 31, 2022, the value of the lease liability is $102,018. The City is required to make annual fixed payments of $106,814. The lease has an interest rate of 4.7012%. The Computer Equipment estimated useful life was 36 months as of the contract commencement. The value of the right to use asset as of December 31, 2022, of $303,888 with accumulated amortization of $227,916 is included in the table in Note 6. In June 2017, the City entered into a 60-month lease as Lessee for the use of Copier at George Long Shops. An initial lease liability was recorded in the amount of $9,000. As of December 31, 2022, the lease had expired, and the equipment is now covered by the Electronic Business Machines -Supplemental lease. In January 2022, the City entered into a 60-month lease as Lessee for the use of a Ford Explorer - 2576RG. An initial lease liability was recorded in the amount of $31,726. As of December 31, 2022, the value of the lease liability is $26,296. The City is required to make monthly fixed payments of $596. The lease has an interest rate of 4.1920%. The estimated useful life was 60 months as of the contract commencement. The value of the right to use asset as of December 31, 2022, of $31,726 with accumulated amortization of $5,887 is included in the table in Note 6. The lease has an unguaranteed residual value of $6,040. In September 2017, the City entered into a 60-month lease as Lessee for the use of a copier for Community Development. An initial lease liability was recorded in the amount of $10,320. As of December 31, 2022, the lease had expired and the equipment is now covered by the Electronic Business Machines -Supplemental lease. 60 CITY OF TUKWILA: 2022 ACFR NOTES TO THE FINANCIAL STATEMENTS In September 2017, the City entered into a 60-month lease as Lessee for the use of a copier for Community Development. An initial lease liability was recorded in the amount of $16,081. As of December 31, 2022, the lease had expired and the equipment is now covered by the Electronic Business Machines -Supplemental lease. In August 2018, the City entered into a 60-month lease as Lessee for the use of a copier for the finance department. An initial lease liability was recorded in the amount of $20,596. As of December 31, 2022, the value of the lease liability is $2,743. The City is required to make monthly fixed payments of $343. The lease has an interest rate of 0.2833%. The estimated useful life was 60 months as of the contract commencement. The value of the right to use asset as of December 31, 2022, of $10,943 with accumulated amortization of $8,039 is included in the table in Note 6. In June 2018, the City entered into a 60-month lease as Lessee for the use of a copier for the fire prevention department. An initial lease liability was recorded in the amount of $11,653. As of December 31, 2022, the value of the lease liability is $1,164. The City is required to make monthly fixed payments of $194. The lease has an interest rate of 0.2467%. The estimated useful life was 60 months as of the contract commencement. The value of the right to use asset as of December 31, 2022, of $5,809 with accumulated amortization of $4,647 is included in the table in Note 6. In June 2017, the City entered into a 60-month lease as Lessee for the use of a copier for fire administration. An initial lease liability was recorded in the amount of $9,120. As of December 31, 2022, the lease had expired and was not renewed. In June 2018, the City entered into a 60-month lease as Lessee for the use of a copier for human resources. An initial lease liability was recorded in the amount of $10,320. As of December 31, 2022, the lease had expired, and the equipment is now covered by the Electronic Business Machines -Supplemental lease. In June 2018, the City entered into a 60-month lease as Lessee for the use of a copier for the municipal court. An initial lease liability was recorded in the amount of $10,243. As of December 31, 2022, the lease had expired, and the equipment is now covered by the Electronic Business Machines -Supplemental lease. In August 2021, the City entered into a 60-month lease as Lessee for the use of a copier for the police department, patrol division. An initial lease liability was recorded in the amount of $7,704. As of December 31, 2022, the value of the lease liability is $5,541. The City is required to make monthly fixed payments of $130. The lease has an interest rate of 0.5773%. The estimated useful life was 60 months as of the contract commencement. The value of the right to use asset as of December 31, 2022, of $7,704 with accumulated amortization of $2,092 is included in the table in Note 6. In July 2017, the City entered into a 60-month lease as Lessee for the use of a copier for the police department, administration division. An initial lease liability was recorded in the amount of $9,000. As of December 31, 2022, the lease had expired, and the equipment is now covered by the Electronic Business Machines -Supplemental lease. In June 2018, the City entered into a 60-month lease as Lessee for the use of a copier for the police department, front office division. An initial lease liability was recorded in the amount of $13,778. As of December 31, 2022, the value of the lease liability is $1,147. The City is required to make monthly fixed payments of $230. The lease has an interest rate of 0.2467%. The estimated useful life was 60 months as of the contract commencement. The value of the right to use asset as of December 31, 2022, of $6,640 with accumulated amortization of $5,539 is included in the table in Note 6. In June 2018, the City entered into a 60-month lease as Lessee for the use of a plotter for the public works department. An initial lease liability was recorded in the amount of $16,772. As of December 31, 2022, the value of the lease liability is $1,397. The City is required to make monthly fixed payments of $280. The lease has an interest rate of 0.2467%. The estimated useful life was 60 months as of the contract commencement. The value of the right to use asset as of December 31, 2022, of $8,083 with accumulated amortization of $6,583 is included in the table in Note 6. 61 CITY OF TUKWILA: 2022 ACFR NOTES TO THE FINANCIAL STATEMENTS In June 2018, the City entered into a 60-month lease as Lessee for the use of a copier for the Tukwila Community Center, administration division. An initial lease liability was recorded in the amount of $13,276. As of December 31, 2022, the value of the lease liability is $1,327. The City is required to make monthly fixed payments of $221. The lease has an interest rate of 0.2467%. The estimated useful life was 60 months as of the contract commencement. The value of the right to use asset as of December 31, 2022, of $6,618 with accumulated amortization of $5,294 is included in the table in Note 6. In August 2021, the City entered into a 60-month lease as Lessee for the use of a copier for the technology information services department. An initial lease liability was recorded in the amount of $7,704. As of December 31, 2022, the value of the lease liability is $5,541. The City is required to make monthly fixed payments of $130. The lease has an interest rate of 0.5773%. The estimated useful life was 60 months as of the contract commencement. The value of the right to use asset as of December 31, 2022, of $7,704 with accumulated amortization of $2,092 is included in the table in Note 6. In May 2018, the City entered into a 60-month lease as Lessee for the use of a postage machine: SendPro P Series. An initial lease liability was recorded in the amount of $34,692. As of December 31, 2022, the value of the lease liability is $3,466. The City is required to make quarterly fixed payments of $1,735. The lease has an interest rate of 0.2467%. The estimated useful life was 60 months as of the contract commencement. The value of the right to use asset as of December 31, 2022, of $17,294 with accumulated amortization of $13,835 is included in the table in Note 6. In July 2017, the City entered into a 60-month lease as Lessee for the use of a copier for public works, administration division. An initial lease liability was recorded in the amount of $11,820. As of December 31, 2022, the lease had expired, and the equipment is now covered by the Electronic Business Machines -Supplemental lease. In January 2022, the City entered into a 60-month lease as Lessee for the use of a Ford Explorer - 73917D. An initial lease liability was recorded in the amount of $31,733. As of December 31, 2022, the value of the lease liability is $26,277. The City is required to make monthly fixed payments of $593. The lease has an interest rate of 3.9536%. The estimated useful life was 60 months as of the contract commencement. The value of the right to use asset as of December 31, 2022, of $31,733 with accumulated amortization of $6,135 is included in the table in Note 6. The lease has an unguaranteed residual value of $5,818. In March 2022, the City entered into a 60-month lease as Lessee for the use of a Ford Escape - 257XHG. An initial lease liability was recorded in the amount of $25,862. As of December 31, 2022, the value of the lease liability is $22,395. The City is required to make monthly fixed payments of $491. The lease has an interest rate of 5.2130%. The estimated useful life was 60 months as of the contract commencement. The value of the right to use asset as of December 31, 2022, of $25,862 with accumulated amortization of $4,282 is included in the table in Note 6. The lease has an unguaranteed residual value of $4,606. In February 2022, the City entered into a 60-month lease as Lessee for the use of a Ford Explorer - 25999W. An initial lease liability was recorded in the amount of $31,375. As of December 31, 2022, the value of the lease liability is $26,501. The City is required to make monthly fixed payments of $589. The lease has an interest rate of 4.1964%. The estimated useful life was 60 months as of the contract commencement. The value of the right to use asset as of December 31, 2022, of $31,375 with accumulated amortization of $5,752 is included in the table in Note 6. The lease has an unguaranteed residual value of $5,956. In December 2022, the City entered into a 60-month lease as Lessee for the use of a Ford Police - 26722H. An initial lease liability was recorded in the amount of $65,173. As of December 31, 2022, the value of the lease liability is $65,173. The City required to make monthly fixed payments of $1,419. The lease has an interest rate of 10.5032%. The estimated useful life was 60 months as of the contract commencement. The value of the right to use asset as of December 31, 2022, of $65,173 with accumulated amortization of $905 is included in the table in Note 6. The lease has an unguaranteed residual value of $5,818. In September 2022, the City entered into a 60-month lease as Lessee for the use of a Ford 550 - 269CGP. An initial lease liability was recorded in the amount of $87,171. As of December 31, 2022, the value of the lease liability is 62 CITY OF TUKWILA: 2022 ACFR NOTES TO THE FINANCIAL STATEMENTS $83,603. The City is required to make monthly fixed payments of $1,833. The lease has an interest rate of 8.9823%. The estimated useful life was 60 months as of the contract commencement. The value of the right to use asset as of December 31, 2022, of $87,171 with accumulated amortization of $4,552 is included in the table in Note 6. The lease has an unguaranteed residual value of $16,696. In September 2022, the City entered into a 60-month lease as Lessee for the use of a Ford Explorer - 269CSM. An initial lease liability was recorded in the amount of $46,365. As of December 31, 2022, the value of the lease liability is $44,446. The City is required to make monthly fixed payments of $965. The lease has an interest rate of 8.5418%. The estimated useful life was 60 months as of the contract commencement. The value of the right to use asset as of December 31, 2022, of $46,365 with accumulated amortization of $2,576 is included in the table in Note 6. The lease has an unguaranteed residual value of $8,826. In November 2022, the City entered into a 60-month lease as Lessee for the use of a Ford XLT - 73913D - 26FZF8. An initial lease liability was recorded in the amount of $48,893. As of December 31, 2022, the value of the lease liability is $48,487. The City is required to make monthly fixed payments of $1,029. The lease has an interest rate of 8.8190%. The estimated useful life was 60 months as of the contract commencement. The value of the right to use asset as of December 31, 2022, of $48,893 with accumulated amortization of $1,467 is included in the table in Note 6. The lease has an unguaranteed residual value of $9,059. In November 2022, the City entered into a 60-month lease as Lessee for the use of a Ford Explorer XLT - 26FzJ6. An initial lease liability was recorded in the amount of $48,909. As of December 31, 2022, the value of the lease liability is $48,232. The City is required to make monthly fixed payments of $1,008. The lease has an interest rate of 8.1026%. The estimated useful life was 60 months as of the contract commencement. The value of the right to use asset as of December 31, 2022, of $48,909 with accumulated amortization of $1,467 is included in the table in Note 6. The lease has an unguaranteed residual value of $8,872. In December 2022, the City entered into a 60-month lease as Lessee for the use of a Ram 2500 - 26HM5G. An initial lease liability was recorded in the amount of $66,626. As of December 31, 2022, the value of the lease liability is $66,626. The City is required to make monthly fixed payments of $1,366. The lease has an interest rate of 7.8967%. The estimated useful life was 60 months as of the contract commencement. The value of the right to use asset as of December 31, 2022, of $66,626 with accumulated amortization of $407 is included in the table in Note 6. The lease has an unguaranteed residual value of $12,591. In November 2022, the City entered into a 60-month lease as Lessee for the use of a Ford F-250 - 26FRX3. An initial lease liability was recorded in the amount of $68,353. As of December 31, 2022, the value of the lease liability is $67,210. The City is required to make monthly fixed payments of $1,407. The lease has an interest rate of 8.1934%. The estimated useful life was 60 months as of the contract commencement. The value of the right to use asset as of December 31, 2022, of $68,353 with accumulated amortization of $1,186 is included in the table in Note 6. The lease has an unguaranteed residual value of $12,825. In September 2022, the City entered into a 60-month lease as Lessee for the use of a Ford Explorer - 25GQ4C. An initial lease liability was recorded in the amount of $31,779. As of December 31, 2022, the value of the lease liability is $30,425. The City is required to make monthly fixed payments of $644. The lease has an interest rate of 7.3561 %. The estimated useful life was 60 months as of the contract commencement. The value of the right to use asset as of December 31, 2022, of $31,779 with accumulated amortization of $1,766 is included in the table in Note 6. The lease has an unguaranteed residual value of $6,029. 63 CITY OF TUKWILA: 2022 ACFR NOTES TO THE FINANCIAL STATEMENTS Principal and Interest Requirements to Maturity Governmental Activities Year Ended December 31 Principal Payments Interest Payments Total Payments 2023 2024 2025 2026 $ 149,322 37,261 26,580 1,820 $ 7,554 1,547 333 4 $ 156,876 38,808 26,914 1,823 Totals $ 214,983 $ 9,438 $ 224,421 Business-T pe Activities Year Ended Principal Interest December 31 Payments Payments Total Payments 2023 $ 103,097 $ 40,179 $ 143,276 2024 111,307 31,969 143,276 2025 120,224 23,052 143,276 2026 129,891 13,385 143,276 2027 91,150 3,522 94,672 Totals $ 555,670 $ 112,107 $ 667,777 Leases Receivable In January 2021, the City entered into a 24-month lease as Lessor for the use of a unit at 6300 Southcenter Boulevard. An initial lease receivable was recorded in the amount of $52,434. As of December 31, 2022, the value of the lease receivable is $0. The lessee is required to make monthly fixed payments of $2,503. The lease has an interest rate of 0.2467%. The Buildings estimated useful life was 24 months as of the contract commencement. The value of the deferred inflow of resources as of December 31, 2022 was $0, and City of Tukwila, WA recognized lease revenue of $26,217 during the fiscal year. In July 2012, the City entered into a 180-month lease as Lessor for the use of a Billboard on city property. An initial lease receivable was recorded in the amount of $375,000. As of December 31, 2022, the value of the lease receivable is $142,004. The lessee is required to make annual fixed payments of $28,891. The lease has an interest rate of 0.5727%. The infrastructure estimated useful life was 180 months as of the contract commencement. The value of the deferred inflow of resources as of December 31, 2022 was $138,018, and the City recognized lease revenue of $30,113 during the fiscal year. Governmental Activities Year Ended Principal Interest Total December 31 Payments Payments Payments 2023 $ 28,077 $ 813 $ 28,891 2024 28,238 652 28,891 2025 28,400 491 28,891 2026 28,563 328 28,891 2027 28,726 165 28,891 Totals $ 142,004 $ 2,449 $ 144,453 64 CITY OF TUKWILA: 2022 ACFR NOTE 6 — CAPITAL ASSETS NOTES TO THE FINANCIAL STATEMENTS Capital asset activity for the year ended December 31, 2022, was as follows: GOVERNMENTAL ACTIVITIES BEGINNING CHANGE IN ENDING BALANCE ACCOUNTING BALANCE 1/1/2022 PRINCIPLE INCREASES DECREASES 12/31/2022 Governmental Activities Capital assets, not being depreciated: Land $ 51,719,374 $ Construction in Progress 35,851,859 $ 8,941,757 $ - $ 60,661,130 4,406,190 (20, 210, 773) 20, 047, 275 Total capital assets not being depreciated 87,571,233 Capital assets, being depreciated: Buildings 108,689,189 Other Improvements 24,335,111 Machinery and Equipment 27,894,629 Infrastructure 230,009,898 Leased Assets 13,347,946 (20,210,773) 80,708,406 13,005,076 121,694,264 - - - 24,335,111 - 1,545,480 (572,151) 28,867,959 - - 230, 009, 898 401,548 682,664 (26,867) 1,057,346 Total capital assets being depreciated 390,928,827 Less accumulated depreciation for: Buildings (18,281,285) Other Improvements (17,772,132) Machinery and Equipment (18,553,567) Infrastructure (89, 774,159) Leased Assets 401,548 15, 233, 220 (599, 017) 405, 964, 578 (154,168) (2,755,296) (947,888) (2,126,724) (6,697,446) (193,619) 570,531 26,867 (21,036,581) (18,720,021) (20,109, 760) (96,471, 605) (320,920) Total accumulated depreciation (144,381,143) (154,168) (12,720,973) 597,398 (156,658,886) Total capital assets, being depreciated, net 246,547,684 247,380 2,512,247 (1,619) 249,305,692 Governmental activity capital assets, net $ 334,118,916 $ 247,380 $ 15,860,194 $ (20,212,393) $330,014,098 65 CITY OF TUKWILA: 2022 ACFR NOTES TO THE FINANCIAL STATEMENTS BUSINESS -TYPE ACTIVITIES BEGINNING BALANCE 1/1/2022 ENDING BALANCE INCREASES DECREASES 12/31/2022 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 $ 2,346,230 $ 4,739 $ 3,386,924 - $ 2,350,969 5,464,644 (7,329,164) 1,522,404 5,733,154 15, 573, 075 103, 319, 994 3,503,368 5,469,383 1,487,864 4,741,330 1,090,136 (7,329,164) 3,873,373 (1,286,120) (12, 572) (219, 922) 15, 774, 819 108,048,752 4,373,582 122, 396, 437 (6,836,159) (43, 098, 721) (2,612,886) 7,319,331 (1,518,615) 128,197,153 (398, 756) (1,830,890) (109,561) 241,850 7,833 219,922 (6,993,065) (44, 921, 777) (2,502,525) (52, 547, 766) 69, 848, 671 (2,339,207) 469,606 (54,417,367) 4,980,124 (1,049,009) 73, 779, 786 $ 75,581,825 $ 10,449,508 $(8,378,173) $ 77,653,159 66 CITY OF TUKWILA: 2022 ACFR NOTES TO THE FINANCIAL STATEMENTS DEPRECIATION Depreciation expense for 2022 was charged to functions/programs as follows: Governmental Activities General Government Public Safety Transportation Culture and Recreation Capital assets held by the government's internal service funds are charged to the various functions based on their usage of the assets $ 3,003,112 381,498 6,719,045 986,118 1,437,582 Total 2022 depreciation expense - governmental activities $ 12,527,354 Business -type activities: Water Utility Sewer Utility Foster Golf Course Surface Water Utility $ 550,426 398,609 345,075 1,045,096 Total 2022 depreciation expense - business -type activities $ 2,339,207 NOTE 7 — JOINT VENTURES A joint venture is a legal entity or other organization that results from a contractual agreement and that is owned, operated, or governed by two or more participants as a separate and specific activity subject to joint control in which the participants retain (a) an on -going financial interest or (b) an on -going financial responsibility. The City participates in two joint ventures. A summary of the City's investment in joint ventures follows. Equity in Operations Equity in Capital Assets financed by Outstanding Debt Valley Com $ 4,119,279 $ - SCORE 2,627,335 4,383,790 TOTAL Investment in Joint Ventures $ 4,119,279 7,011,125 TOTAL $ 6, 746, 614 $ 4, 383, 790 $ 11,130,404 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. Federal Way was formally admitted during 2000. The agreement is sanctioned by the provisions and terms of the Interlocal Cooperation Act pursuant to RCW 39.34. The initial duration of the agreement was five years, and thereafter is automatically extended for consecutive five-year periods. 67 CITY OF TUKWILA: 2022 ACFR NOTES TO THE FINANCIAL STATEMENTS The purpose of the joint operation, hereafter referred to as Valley Com, is to provide improved consolidated emergency communications (dispatch) services for police, fire, and medical aid, to the five participating cities and to several subscribing agencies. Separate agreements between Valley Com and the subscribing agencies have been executed, which set forth conditions of services and rates charged. The allocation of prorated financial participation among the five participating cities is the percentage of estimated dispatched calls attributed to each jurisdiction compared to the total estimated dispatched calls for the current 12-month period ending December 31. The 2022 cost distribution for the five (5) participating cities is as follows: City Dispatchable Calls Percent of Total Renton 83,514 20.83% Kent 108,844 27.15% Auburn 81,977 20.45% Tukwila 38,968 9.72% Federal Way 87,562 21.84% Total 400,865 100.00% Valley Com is governed by an Administration Board composed of the Mayors from the five participating cities of Renton, Kent, Auburn, Tukwila, and Federal Way. The Board is responsible for the following functions: (1) Adopting an annual budget after review by participating legislative bodies; (2) Appointment and/or discharge of the Director; (3) Approves personnel policy and makes final decisions on all major policy changes; (4) Reviews and approves all contracts. In addition, an Operating Board was established and consists of two members of each participating City's Public Safety Departments, including the heads of such departments or their designees. The Operating Board performs the following functions: (1) Oversees the operation of Valley Com and advises and makes recommendations to the Administration Board; (2) Makes recommendation on Director selection; (3) Presents proposed policies and budgets to the Administration Board; (4) Approves disbursement of funds by the Director. The Director presents a proposed budget to the Operating Board on or before August 15 of each year. The proposed budget is then presented to the Administration Board by September 1 of each year. The Administration Board can make changes to the proposed Valley Com budget as it finds necessary, but final approval falls to the legislative body of each participating city, in accordance with the provisions of the Interlocal Agreement. The share of equity belonging to the five (5) participating cities is as follows: ITEM RENTON KENT AUBURN TUKWILA FEDERAL WAY TOTAL Equity January 1, 2022 $ 8,105, 020 $10, 901, 977 $ 8, 338, 703 $ 3, 878, 636 $ 7,095,886 $ 38, 320, 221 Current Year Increase/(Decrease) 515,732 672,154 506,240 240,643 540,727 2,475,495 Equity December31, 2022 $ 8,620,749 $11,574,129 $8,844,943 $4,119,279 $ 7,636,612 $40,795,717 Percent of Equity 21.13% 28.37% 21.68% 10.10% 18.72% 100.00% Liabilities are the responsibility of the five participating cities in direct proportion to their equity position. In August 1993, Valley Com entered into an interlocal cooperation agreement, pursuant to RCW 39.34 RCW, with the sub- regions of King County, Seattle, and the Eastside Public Safety Communications Agency. This agreement governs the development, acquisition and installation of the 800 MHz emergency radio communications system funded by a $57 million King County levy approved in November 1992. This agreement provides that upon voluntary termination of any sub-region's participation in the system, it surrenders its radio frequencies, relinquishes its 68 CITY OF TUKWILA: 2022 ACFR NOTES TO THE FINANCIAL STATEMENTS equipment and transfers any unexpended levy proceeds and associated equipment replacement reserves to another sub -region or consortium of sub -regions. Thus, in accordance with this agreement, the participating cities of Valley Com have no equity interest in Valley Com's 800-MHz communications system. During 2000, the Valley Communications Center Development Authority was created to issue $12,758,000 in General Obligation Bonds to finance construction, equipment, and land for a new facility completed in 2002. Each of the five participating cities was responsible for one -fifth of the debt obligation, which originally was $2,551,600 per City. The basic agreement shall not be terminated until all bonds issued by Valley Communications Center Development Authority have been paid and retired. The final payment on the bonds was made in 2015. A complete set of financial statements are available from Valley Communications Center, 27519 108th Ave SE, Kent, WA 98030, or by telephone 253-372-1300. South Correctional Entity (SCORE) On February 25, 2009, the Cities of Auburn, Burien, Des Moines, Federal Way, Renton, SeaTac and Tukwila, Washington (Member Cities) entered into a SCORE Facility Interlocal Agreement (as amended and restated on October 1, 2009, the "2009 Interlocal Agreement") pursuant to chapter 39.34 RCW (Interlocal Cooperation Act) to jointly construct, equip, maintain and operate a consolidated regional misdemeanant correctional facility located in Des Moines, Washington (SCORE Facility) to serve the parties to the 2009 Interlocal Agreement and state agencies and other local governments (Subscribing Agencies) to provide correctional services essential to the preservation of the public health, safety and welfare. To carry out the purposes of the 2009 Interlocal Agreement and to operate, manage and maintain the SCORE Facility, the Member Cities formed the South Correctional Entity (SCORE), a separate governmental administrative agency pursuant to the 2009 Interlocal Agreement and RCW 39.34.030(3). The 2009 Interlocal Agreement named the City of Des Moines as the "Host City" and the remaining Member Cities as the "Owner Cities". Pursuant to a separate "Host City Agreement" dated October 1, 2009, the Host City will not enjoy the same equity position as the Owner Cities until all debts issued are paid and the Host City fulfills all of its obligations as outlined in the Host City Agreement. Pursuant to SCORE financial policies, all unexpended funds or reserve funds shall be distributed based on the percentage of the Member City's average daily population at the SCORE Facility for the last three (3) years regardless of its Owner City or Host City status. SCORE and the SCORE Facility may serve the Member Cities and Subscribing Agencies which are in need of correctional facilities. Any agreement with a Subscribing Agency shall be in writing and approved by SCORE as provided within the SCORE Formation Interlocal Agreement. SCORE, as a governmental administrative agency formed under the Interlocal Cooperation Act, is not expressly authorized to issue bonds. To finance and refinance the costs of the SCORE Facility, the City of Renton, Washington, chartered the South Correctional Entity Facility Public Development Authority as a public corporation pursuant to RCW 35.21.730 through 35.21.757 (Public Corporation Act) and Ordinance No. 5444, passed on February 2, 2009 (Charter Ordinance). 2009 Bonds. The SCORE PDA issued its Bonds, Series 2009A (2009A Bonds) and Bonds, Series 2009B (Taxable Build America Bonds —Direct Payment) (2009B Bonds, and, together the 2009 Bonds) on November 4, 2009 in the aggregate principal amount of $86,235,000. Proceeds of the 2009 Bonds were used to finance a portion of the costs of acquiring, constructing, developing, equipping and improving the SCORE Facility, to capitalize interest during construction, and to pay costs of issuance for the 2009 Bonds. Pursuant to the 2009 Interlocal Agreement and the ordinances of each city, each Owner City (which included the Cities of Auburn, Burien, Federal Way, Renton, SeaTac, and Tukwila) was obligated to budget for and pay its share, and only its share, of the principal of and interest on the 2009 Bonds as the same become due and payable (referred to as each Owner City's 2009 Capital Contribution). Each Owner City's obligation to pay its 2009 Capital Contribution is an irrevocable, unconditional full faith and credit obligation of such Owner City, payable from regular property taxes levied within the constitutional and statutory authority provided without a vote of the electors of the Owner City on all of the taxable property within the Owner City and other sources of revenues available therefor. 69 CITY OF TUKWILA: 2022 ACFR NOTES TO THE FINANCIAL STATEMENTS Subsequent Activities: Refunding of 2009 Bonds and Amendment and Restatement of Interlocal Agreement. Pursuant to the 2009 Interlocal Agreement, on September 5, 2018, the City of Federal Way gave its notice of intent to withdraw from SCORE effective December 31, 2019. The remaining Member Cities (including the cities of Auburn, Burien, Des Moines, Renton, SeaTac and Tukwila) entered into an Amended and Restated SCORE Interlocal Agreement (2019 Interlocal Agreement), which amended and restated the 2009 Interlocal Agreement in its entirety, removed Federal Way as a Member City and an Owner City, terminated the Host City Agreement, and made other revisions to provide for the issuance of bonds to refund the 2009 Bonds. On December 11, 2019, the Authority issued its Refunding Bonds, Series 2019 in the aggregate principal amount of $51,055,000 (2019 Bonds). The 2019 Interlocal Agreement became effective on the date of issuance of the 2019 Bonds. Proceeds of the 2019 Bonds were used to defease and refund all of the outstanding 2009 Bonds. Pursuant to the 2019 Interlocal Agreement and the ordinances of each city, each Owner City (including the Cities of Auburn, Burien, Des Moines, Renton, SeaTac, and Tukwila) is obligated to budget for and pay its share, and only its share, of the principal of and interest on the 2019 Bonds as the same become due and payable (referred to as each Owner City's 2019 Capital Contribution). Each Owner City's obligation to pay its 2019 Capital Contribution is an irrevocable, unconditional full faith and credit obligation of such Owner City, payable from regular property taxes levied within the constitutional and statutory authority provided without a vote of the electors of the Owner City on all of the taxable property within the Owner City and other sources of revenues available therefor. The following is a summary of the debt service requirements for the 2019 Bonds: SUMMARY OF DEBT SERVICE REQUIREMENTS Debt Service Schedule Debt Service Allocation to Owner Cities Auburn Burien Des Moines Renton SeaTac Tukwila Year Principal Interest Total 34.94% 4.82% 6.02% 40.96% 3.62% 9.64% 2023 1,990,000 1,919,500 3,909,500 1,365,979 188,438 235,352 1,601,331 141,524 376,876 2024 2,070,000 1,839,900 3,909,900 1,366,119 188,457 235,376 1,601,495 141,538 376,914 2025 2,155,000 1,757,100 3,912,100 1,366,888 188,563 235,508 1,602,396 141,618 377,126 2026 2,260,000 1,649,350 3,909,350 1,365,927 188,431 235,343 1,601,270 141,518 376,861 2027 2,375,000 1,536,350 3,911,350 1,366,626 188,527 235,463 1,602,089 141,591 377,054 2028-2032 13,770,000 5,778,500 19,548,500 6,830,246 942,238 1,176,820 8,007,066 707,656 1,884,475 2033-2037 17,060,000 2,485,800 19,545,800 6,829,303 942,108 1,176,657 8,005,960 707,558 1,884,215 2038 3,795,000 113,850 3,908,850 1,365,752 188,407 235,313 1,601,065 141,500 376,813 Totals $45,475,000 $ 17,080,350 $62,555,350 21,856,840 3,015,169 3,765,832 25,622,672 2,264,503 6,030,334 The City of Tukwila reports its share of equity interest in the Governmental Activities column within the Government - wide financial statements under non -current assets. The following summary of the Capital Contributions for the 2019 Bonds is condensed (unaudited) financial information reported as of December 31, 2022 in relation to SCORE: Member City 2021 Percent of Equity 2021 Equity Balance 2022 Percent of Equity 2022 Apportionment 2022 Equity Balance Auburn 41.93% 13,728,641 41.48% 367,485 14,096,126 Burien 5.30% 1,736,041 5.39% 95,847 1,831,888 Des Moines 4.95% 1,619,395 5.02% 88,153 1,707,548 Renton 31.93% 10,449,372 32.11% 464,559 10,913,931 SeaTac 8.13% 2,661,310 8.27% 151,004 2,812,314 Tukwila 7.76% 2,541,785 7.73% 85,550 2,627,335 Grand Totals 100.00% 32,736,544 100.00% 1,252,598 33,989,142 The investment in joint venture for SCORE on the Statement of Net Position includes Tukwila's share of debt refinanced in 2019. As of December 31, 2022, the City's share of SCORE debt is $4,383,790. See Note 10 for additional information on long-term debt. 70 CITY OF TUKWILA: 2022 ACFR NOTES TO THE FINANCIAL STATEMENTS Completed financial statements for SCORE and SCORE PDA can be obtained from the SCORE, Attn: Finance Manager, 20817 17'h Avenue South, Des Moines, WA 98198. NOTE 8 — PENSION PLANS The following table represents the aggregate pension amounts for all plans for the year 2022: Aggregate Pension Amounts — All Plans Pension liabilities $ (3,052,641) Pension assets 19,845,436 Deferred outflows of resources 12,522,850 Deferred inflows of resources (11,110,510) Pension expense/expenditures 1,538,676 State Sponsored Pension Plans Substantially all the City of Tukwila's full-time and qualifying part-time employees participate in one of the following statewide retirement systems administered by the Washington State Department of Retirement Systems, under cost -sharing, multiple -employer public employee defined benefit and defined contribution retirement plans. The state Legislature establishes, and amends, laws pertaining to the creation and administration of all public retirement systems. The Department of Retirement Systems (DRS), a department within the primary government of the State of Washington, issues a publicly available Annual Comprehensive Financial Report (ACFR) that includes financial statements and required supplementary information for each plan. The DRS Annual Financial Report may be downloaded from the DRS website at www.drs.wa.gov. Public Employees' Retirement System (PERS) PERS members include elected officials; state employees; employees of the Supreme, Appeals and Superior Courts; employees of the legislature; employees of district and municipal courts; employees of local governments; and higher education employees not participating in higher education retirement programs. PERS is comprised of three separate pension plans for membership purposes. PERS plans 1 and 2 are defined benefit plans, and PERS plan 3 is a defined benefit plan with a defined contribution component. PERS Plan 1 provides retirement, disability and death benefits. Retirement benefits are determined as two percent of the member's average final compensation (AFC) times the member's years of service. The AFC is the average of the member's 24 highest consecutive service months. Members are eligible for retirement from active status at any age with at least 30 years of service, at age 55 with at least 25 years of service, or at age 60 with at least five years of service. Members retiring from active status prior to the age of 65 may receive actuarially reduced benefits. Retirement benefits are actuarially reduced to reflect the choice of a survivor benefit. Other benefits include duty and non -duty disability payments, an optional cost -of -living adjustment (COLA), and a one-time duty -related death benefit, if found eligible by the Department of Labor and Industries. PERS 1 members were vested after the completion of five years of eligible service. The plan was closed to new entrants on September 30, 1977. Contributions The PERS Plan 1 member contribution rate is established by State statute at 6 percent. The employer contribution rate is developed by the Office of the State Actuary and includes an administrative expense component that is currently set at 0.18 percent. Each biennium, the state Pension Funding Council adopts Plan 1 employer contribution rates. The PERS Plan 1 required contribution rates (expressed as a percentage of covered payroll) for 2022 were as follows: 71 CITY OF TUKWILA: 2022 ACFR NOTES TO THE FINANCIAL STATEMENTS PERS Plan 1 Actual Contribution Rates Employer Employee* January — August 2022 PERS Plan 1 6.36% 6.00% PERS Plan 1 UAAL 3.71% Administrative Fee 0.18% Total 10.25% 6.00% September— December 2022 PERS Plan 1 6.36% 6.00% PERS Plan 1 UAAL 3.85% Administrative Fee 0.18% Total 10.39% 6.00% * For employees participating in JBM, the contribution rate was 12.26%. PERS Plan 2/3 provides retirement, disability and death benefits. Retirement benefits are determined as two percent of the member's average final compensation (AFC) times the member's years of service for Plan 2 and 1 percent of AFC for Plan 3. The AFC is the average of the member's 60 highest -paid consecutive service months. There is no cap on years of service credit. Members are eligible for retirement with a full benefit at 65 with at least five years of service credit. Retirement before age 65 is considered an early retirement. PERS Plan 2/3 members who have at least 20 years of service credit and are 55 years of age or older, are eligible for early retirement with a benefit that is reduced by a factor that varies according to age for each year before age 65. PERS Plan 2/3 members who have 30 or more years of service credit and are at least 55 years old can retire under one of two provisions: • With a benefit that is reduced by three percent for each year before age 65; or • With a benefit that has a smaller (or no) reduction (depending on age) that imposes stricter return -to -work rules. PERS Plan 2/3 members hired on or after May 1, 2013 have the option to retire early by accepting a reduction of five percent for each year of retirement before age 65. This option is available only to those who are age 55 or older and have at least 30 years of service credit. PERS Plan 2/3 retirement benefits are also actuarially reduced to reflect the choice of a survivor benefit. Other PERS Plan 2/3 benefits include duty and non -duty disability payments, a cost -of -living allowance (based on the CPI), capped at three percent annually and a one-time duty related death benefit, if found eligible by the Department of Labor and Industries. PERS 2 members are vested after completing five years of eligible service. Plan 3 members are vested in the defined benefit portion of their plan after ten years of service; or after five years of service if 12 months of that service are earned after age 44. PERS Plan 3 defined contribution benefits are totally dependent on employee contributions and investment earnings on those contributions. PERS Plan 3 members choose their contribution rate upon joining membership and have a chance to change rates upon changing employers. As established by statute, Plan 3 required defined contribution rates are set at a minimum of 5 percent and escalate to 15 percent with a choice of six options. Employers do not contribute to the defined contribution benefits. PERS Plan 3 members are immediately vested in the defined contribution portion of their plan. Contributions The PERS Plan 2/3 employer and employee contribution rates are developed by the Office of the State Actuary to fully fund Plan 2 and the defined benefit portion of Plan 3. The Plan 2/3 employer rates include a component to address the PERS Plan 1 UAAL and an administrative expense that is currently set at 0.18 percent. Each biennium, the state Pension Funding Council adopts Plan 2 employer and employee contribution rates and Plan 3 contribution rates. The PERS Plan 2/3 required contribution rates (expressed as a percentage of covered payroll) for 2022 were as follows: 72 CITY OF TUKWILA: 2022 ACFR NOTES TO THE FINANCIAL STATEMENTS PERS Plan 2/3 Actual Contribution Rates Employer 2/3 Employee 2* January — August 2022 PERS Plan 2/3 6.36% 6.36% PERS Plan 1 UAAL 3.71 Administrative Fee 0.18% Employee PERS Plan 3 Varies Total 10.25% 6.36% September — December 2022 PERS Plan 2/3 6.36% 6.36% PERS Plan 1 UAAL 3.85% Administrative Fee 0.18% Employee PERS Plan 3 Varies Total 10.39% 6.36% * For employees participating in JBM, the contribution rate was 15.90%. The City of Tukwila's actual PERS plan contributions were $668,862 to PERS Plan 1 and $1,115,620 to PERS Plan 2/3 for the year ended December 31, 2022. Public Safety Employees' Retirement System (PSERS) PSERS Plan 2 was created by the 2004 Legislature and became effective July 1, 2006. To be eligible for membership, an employee must work on a full-time basis and: • Have completed a certified criminal justice training course with authority to arrest, conduct criminal investigations, enforce the criminal laws of Washington, and carry a firearm as part of the job; or • Have primary responsibility to ensure the custody and security of incarcerated or probationary individuals; or • Function as a limited authority Washington peace officer, as defined in RCW 10.93.020; or • Have primary responsibility to supervise eligible members who meet the above criteria. PSERS membership includes: • PERS 2 or 3 employees hired by a covered employer before July 1, 2006, who met at least one of the PSERS eligibility criteria and elected membership during the period of July 1, 2006 to September 30, 2006; and • Employees hired on or after July 1, 2006 by a covered employer, that meet at least one of the PSERS eligibility criteria. PSERS covered employers include: • Certain State of Washington agencies (Department of Corrections, Department of Natural Resources, Gambling Commission, Liquor and Cannabis Board, Parks and Recreation Commission, and Washington State Patrol), • Washington State Counties, • Washington State Cities (except for Seattle, Spokane, and Tacoma), • Correctional entities formed by PSERS employers under the Interlocal Cooperation Act. PSERS Plan 2 provides retirement, disability and death benefits. Retirement benefits are determined as two percent of the average final compensation (AFC) for each year of service. The AFC is based on the member's 60 consecutive highest creditable months of service. Benefits are actuarially reduced for each year that the member's age is less than 60 (with ten or more service credit years in PSERS), or less than 65 (with fewer than ten service credit years). There is no cap on years of service credit. Members are eligible for retirement at the age of 65 with five years of service; or at the age of 60 with at least ten years of PSERS service credit; or at age 53 with 20 years 73 CITY OF TUKWILA: 2022 ACFR NOTES TO THE FINANCIAL STATEMENTS of service. Retirement before age 60 is considered an early retirement. PSERS members who retire prior to the age of 60 receive reduced benefits. If retirement is at age 53 or older with at least 20 years of service, a three percent per year reduction for each year between the age at retirement and age 60 applies. PSERS Plan 2 retirement benefits are actuarially reduced to reflect the choice of a survivor benefit. Other benefits include duty and non -duty disability payments, an optional cost -of living adjustment (COLA), and a one-time duty -related death benefit, if found eligible by the Department of Labor and Industries. PSERS Plan 2 members are vested after completing five years of eligible service. Contributions The PSERS Plan 2 employer and employee contribution rates are developed by the Office of the State Actuary to fully fund Plan 2. The Plan 2 employer rates include components to address the PERS Plan 1 unfunded actuarial accrued liability and administrative expense currently set at 0.18 percent. Each biennium, the state Pension Funding Council adopts Plan 2 employer and employee contribution rates. The PSERS Plan 2 required contribution rates (expressed as a percentage of current -year covered payroll) for 2022 were as follows: PSERS Plan 2 Actual Contribution Rates Employer Employee January — August 2022 PSERS Plan 2 6.50% 6.50% PERS Plan 1 UAAL 3.71% Administrative Fee 0.18% Total 10.39% 6.50% September — December 2022 PSERS Plan 2 6.60% 6.60% PERS Plan 1 UAAL 3.85% Administrative Fee 0.18% Total 10.63% 6.60% The City of Tukwila's actual plan contributions were $18,354 to PSERS Plan 2 for the year ended December 31, 2022. Law Enforcement Officers' and Fire Fighters' Retirement System (LEOFF) LEOFF membership includes all full-time, fully compensated, local law enforcement commissioned officers, firefighters, and as of July 24, 2005, emergency medical technicians. LEOFF is comprised of two separate defined benefit plans. LEOFF Plan 1 provides retirement, disability and death benefits. Retirement benefits are determined per year of service calculated as a percent of final average salary (FAS) as follows: • 20+ years of service — 2.0% of FAS • 10-19 years of service — 1.5% of FAS • 5-9 years of service — 1 % of FAS The FAS is the basic monthly salary received at the time of retirement, provided a member has held the same position or rank for 12 months preceding the date of retirement. Otherwise, it is the average of the highest consecutive 24 months' salary within the last ten years of service. Members are eligible for retirement with five years of service at the age of 50. Other benefits include duty and non -duty disability payments, a cost -of living adjustment (COLA), and a one-time duty -related death benefit, if found eligible by the Department of Labor and Industries. LEOFF 1 members were vested after the completion of five years of eligible service. The plan was closed to new entrants on September 30, 1977. 74 CITY OF TUKWILA: 2022 ACFR NOTES TO THE FINANCIAL STATEMENTS Contributions Starting on July 1, 2000, LEOFF Plan 1 employers and employees contribute zero percent, as long as the plan remains fully funded. The LEOFF Plan 1 had no required employer or employee contributions for fiscal year 2022. Employers paid only the administrative expense of 0.18 percent of covered payroll. LEOFF Plan 2 provides retirement, disability and death benefits. Retirement benefits are determined as two percent of the final average salary (FAS) per year of service (the FAS is based on the highest consecutive 60 months). Members are eligible for retirement with a full benefit at 53 with at least five years of service credit. Members who retire prior to the age of 53 receive reduced benefits. If the member has at least 20 years of service and is age 50, the reduction is three percent for each year prior to age 53. Otherwise, the benefits are actuarially reduced for each year prior to age 53. LEOFF 2 retirement benefits are also actuarially reduced to reflect the choice of a survivor benefit. Other benefits include duty and non -duty disability payments, a cost -of -living allowance (based on the CPI), capped at three percent annually and a one-time duty -related death benefit, if found eligible by the Department of Labor and Industries. LEOFF 2 members are vested after the completion of five years of eligible service. Contributions The LEOFF Plan 2 employer and employee contribution rates are developed by the Office of the State Actuary to fully fund Plan 2. The employer rate includes an administrative expense component set at 0.18 percent. Plan 2 employers and employees are required to pay at the level adopted by the LEOFF Plan 2 Retirement Board. Effective July 1, 2017, when a LEOFF employer charges a fee or recovers costs for services rendered by a LEOFF 2 member to a non-LEOFF employer, the LEOFF employer must cover both the employer and state contributions on the LEOFF 2 basic salary earned for those services. The state contribution rate (expressed as a percentage of covered payroll) was 3.41% in 2022. The LEOFF Plan 2 required contribution rates (expressed as a percentage of covered payroll) for 2022 were as follows: LEOFF Plan 2 Actual Contribution Rates Employer Employee January — December 2022 State and local governments 5.12% 8.53% Administrative Fee 0.18% Total 5.30% 8.53% Ports and Universities 8.59% 8.59% Administrative Fee 0.18% Total 8.77% 8.59% July — December 2021 State and local governments 5.12% 8.53% Administrative Fee 0.18% Total 5.30% 8.53% Ports and Universities 8.53% 8.53% Administrative Fee 0.18% Total 8.71% 8.53% The City of Tukwila's actual contributions to the plan were $872,391 for the year ended December 31, 2022. The Legislature, by means of a special funding arrangement, appropriates money from the state General Fund to supplement the current service liability and fund the prior service costs of Plan 2 in accordance with the recommendations of the Pension Funding Council and the LEOFF Plan 2 Retirement Board. This special funding situation is not mandated by the state constitution and could be changed by statute. For the state fiscal year ending June 30, 2022, the state contributed $81,388,085 to LEOFF Plan 2. The amount recognized by the City as its proportionate share of this amount is $565,116. 75 CITY OF TUKWILA: 2022 ACFR NOTES TO THE FINANCIAL STATEMENTS Actuarial Assumptions The total pension liability (TPL) for each of the DRS plans was determined using the most recent actuarial valuation completed in 2022 with a valuation date of June 30, 2021. The actuarial assumptions used in the valuation were based on the results of the Office of the State Actuary's (OSA) 2013-2018 Demographic Experience Study and the 2021 Economic Experience Study. Additional assumptions for subsequent events and law changes are current as of the 2021 actuarial valuation report. The TPL was calculated as of the valuation date and rolled forward to the measurement date of June 30, 2022. Plan liabilities were rolled forward from June 30, 2021, to June 30, 2022, reflecting each plan's normal cost (using the entry -age cost method), assumed interest and actual benefit payments. • Inflation: 2.75% total economic inflation; 3.25% salary inflation • Salary increases: In addition to the base 3.25% salary inflation assumption, salaries are also expected to grow by promotions and longevity. • Investment rate of return: 7.00% Mortality rates were developed using the Society of Actuaries' Pub. H-2010 mortality rates, which vary by member status (e.g. active, retiree, or survivor), as the base table. OSA applied age offsets for each system, as appropriate, to better tailor the mortality rates to the demographics of each plan. OSA applied the long-term MP-2017 generational improvement scale, also developed by the Society of Actuaries, to project mortality rates for every year after the 2010 base table. Mortality rates are applied on a generational basis; meaning, each member is assumed to receive additional mortality improvements in each future year throughout their lifetime. There were changes in methods and assumptions since the last valuation. • OSA updated the Joint -and -Survivor Factors and Early Retirement Factors in the model. Those factors are used to value benefits for early retirement and survivors of members that are deceased prior to retirement. These factors match the administrative factors provided to DRS for future implementation that reflect current demographic and economic assumptions. Discount Rate The discount rate used to measure the total pension liability for all DRS plans was 7.0 percent. To determine that rate, an asset sufficiency test was completed to test whether each pension plan's fiduciary net position was sufficient to make all projected future benefit payments for current plan members. Based on OSA's assumptions, the pension plans' fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return of 7.0% was used to determine the total liability. Long -Term Expected Rate of Return The long-term expected rate of return on the DRS pension plan investments of 7.0% was determined using a building -block -method. In selecting this assumption, OSA reviewed the historical experience data, considered the historical conditions that produced past annual investment returns, and considered Capital Market Assumptions (CMA's) and simulated expected investment returns provided by the Washington State Investment Board (WSIB). The WSIB uses the CMA's and their target asset allocation to simulate future investment returns at various future times. 76 CITY OF TUKWILA: 2022 ACFR NOTES TO THE FINANCIAL STATEMENTS Estimated Rates of Return by Asset Class The table below summarizes the best estimates of arithmetic real rates of return for each major asset class included in the pension plan's target asset allocation as of June 30, 2022. The inflation component used to create the table is 2.2% and represents the WSIB's most recent long-term estimate of broad economic inflation. Asset Class Target Allocation % Long -Term Expected Real Rate of Return Arithmetic Fixed Income 20% 1.5% Tangible Assets 7% 4.7% Real Estate 18% 5.7% Global Equity 32% 5.9% Private Equity 23% 8.9% 100% Sensitivity of the Net Pension Liability/(Asset) The table below presents the City of Tukwila's proportionate share of the net pension liability calculated using the discount rate of 7.0 percent, as well as what the City of Tukwila's proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower (6.0 percent) or 1-percentage point higher (8.0 percent) than the current rate. 1% Decrease (6.0%) Current Discount Rate (7.0%) 1°A) Increase (8.0°A°) PERS 1 $ 4,078,286 $ 3,052,641 $ 2,157,493 PERS 2/3 6,161,993 (5,232,534) (14,593,858) PSERS 2 60,137 (25,248) (92,635) LEOFF 1 (2,068,311) (2,360,180) (2,613,276) LEOFF 2 (530,747) (11,525,730) (20,524,182) Pension Plan Fiduciary Net Position Detailed information about the State's pension plans' fiduciary net position is available in the separately issued DRS financial report. Pension Liabilities (Assets), Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions At June 30, 2022, the City of Tukwila reported a total pension asset of $19,845,436 and a total pension liability of $3,052,641 for its proportionate share of the net pension liabilities as follows: Liability or (Asset) PERS 1 3,052,641 PERS 2/3 (5,232,534) PSERS 2 (25,248) LEOFF 1 (2,360,180) LEOFF 2 (11,525,730) Firemen's Pension (701,744) The amount of the asset reported above for LEOFF Plans 1 and 2 reflects a reduction for State pension support provided to the City of Tukwila. The amount recognized by the City of Tukwila as its proportionate share of the net 77 CITY OF TUKWILA: 2022 ACFR NOTES TO THE FINANCIAL STATEMENTS pension asset, the related State support, and the total portion of the net pension asset that was associated with the City of Tukwila were as follows: LEOFF 1 (Asset) LEOFF 2 (Asset) Employer's proportionate share $ (2,360,180) $ (11,525,730) State's proportionate share of the net pension asset associated with the employer (15,964,199) (7,466,117) TOTAL $ (18,324,379) $ (18,991,847) At June 30, the City of Tukwila's proportionate share of the collective net pension liabilities was as follows: Proportionate Share 6/30/21 Proportionate Share 6/30/22 Change in Proportion PERS 1 0.104195% 0.109635% 0.005440% PERS 2/3 0.132317% 0.141085% 0.008768% PSERS 2 0.026736% 0.035312% 0.008576% LEOFF 1 0.083135% 0.082276% -0.000859% LEOFF 2 0.420145% 0.424099% 0.003954% Employer contribution transmittals received and processed by the DRS for the fiscal year ended June 30, 2022 are used as the basis for determining each employer's proportionate share of the collective pension amounts reported by the DRS in the Schedules of Employer and Nonemployer Allocations for all plans except LEOFF 1. LEOFF Plan 1 allocation percentages are based on the total historical employer contributions to LEOFF 1 from 1971 through 2000 and the retirement benefit payments in fiscal year 2022. Historical data was obtained from a 2011 study by the Office of the State Actuary (OSA). In fiscal year 2022, the State of Washington contributed 87.12 percent of LEOFF 1 employer contributions and all other employers contributed the remaining 12.88 percent of employer contributions. The cumulative retirement benefit payments through fiscal year 2022 were used to determine the employer allocation amounts and percentages listed under All Other Employers. LEOFF 1 is fully funded and no further employer contributions have been required since June 2000. If the plan becomes underfunded, funding of the remaining liability will require new legislation. The allocation method the plan chose reflects the projected long-term contribution effort based on historical data. In fiscal year 2022, the State of Washington contributed 39% percent of LEOFF 2 employer contributions pursuant to RCW 41.26.725 and all other employers contributed the remaining 61 % of employer contributions. Pension Expense For the year ended December 31, 2022, the City of Tukwila recognized pension expense as follows: Pension Expense PERS 1 1,518,482 PERS 2/3 (1,920,844) PSERS 2 5,256 LEOFF 1 (87,829) LEOFF 2 2,023,610 Firemen's Pension (276,778) Total 1,261,898 78 CITY OF TUKWILA: 2022 ACFR NOTES TO THE FINANCIAL STATEMENTS Deferred Outflows of Resources and Deferred Inflows of Resources At December 31, 2022, the City of Tukwila reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: PERS 1 Deferred Outflows Deferred Inflows Differences between expected and actual experience - - Net difference between projected and actual investment earnings on pension plan investments - (505,912) Changes of assumptions - - Changes in proportion and differences between contributions and proportionate share of contributions - - Contributions subsequent to the measurement date 353,462 - TOTAL 353,462 (505,912) PERS 2/3 Deferred Outflows Deferred Inflows Differences between expected and actual experience 1,296,499 (118,451) Net difference between projected and actual investment earnings on pension plan investments - (3,868,451) Changes of assumptions 2,916,415 (763,622) Changes in proportion and differences between contributions and proportionate share of contributions - (547,360) Contributions subsequent to the measurement date 583,424 - TOTAL 4,796,339 (5,297,884) 79 CITY OF TUKWILA: 2022 ACFR NOTES TO THE FINANCIAL STATEMENTS PSERS 2 Deferred Outflows Deferred Inflows Differences between expected and actual experience 13,116 (278) Net difference between projected and actual investment earnings on pension plan investments - (17,706) Changes of assumptions 18,535 (7,406) Changes in proportion and differences between contributions and proportionate share of contributions (1,865) (5,499) Contributions subsequent to the measurement date 9,675 - TOTAL 39,462 (30,889) LEOFF 1 Deferred Outflows Deferred Inflows Differences between expected and actual experience - Net difference between projected and actual investment earnings on pension plan investments - (294,701) Changes of assumptions - - Changes in proportion and differences between contributions and proportionate share of contributions Contributions subsequent to the measurement date TOTAL - (294,701) LEOFF 2 Deferred Outflows Deferred Inflows Differences between expected and actual experience 2,738,704 (106,938) Net difference between projected and actual investment earnings on pension plan investments - (3,859,256) Changes of assumptions 2,919,793 (1,003,576) Changes in proportion and differences between contributions and proportionate share of contributions 936,354 (106,802) Contributions subsequent to the measurement date 460,819 - TOTAL 7,055,669 (5,076,572) 80 CITY OF TUKWILA: 2022 ACFR NOTES TO THE FINANCIAL STATEMENTS Deferred outflows of resources related to pensions resulting from the City's contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2023. Other amounts reported as deferred outflows and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Year Ended December 31 PERS 1 2023 (214,092) 2024 (194,451) 2025 (243,932) 2026 146,562 2027 - Thereafter - TOTAL (505,912) Year Ended December 31 PERS 2/3 2023 (1,345,828) 2024 (1,195, 830) 2025 (1,389,980) 2026 1,683,327 2027 567,286 Thereafter 596,056 TOTAL (1,084,969) Year Ended December 31 LEOFF 1 2023 (124,815) 2024 (113,012) 2025 (141,308) 2026 84,433 2027 - Thereafter - TOTAL (294,701) Year Ended December 31 PSERS 2 2023 (6,571) 2024 (5,834) 2025 (7,333) 2026 7,759 2027 1,432 Thereafter 9,445 TOTAL (1,102) Year Ended December 31 LEOFF 2 2023 (1,093,489) 2024 (932,079) 2025 (1,279,674) 2026 1,783,257 2027 591,182 Thereafter 2,449,081 TOTAL 1,518,279 Firemen's Pension System Plan Description Plan Administration: The Firefighters' Pension Fund (FPF) is administered by the City of Tukwila. The plan is a single -employer defined -benefit pension plan that provides pensions for firefighters that were hired prior to 1970. The firefighter's pension board consists of the following five members: the chairperson of the fire commissioners for said district who shall be chairperson of the board, the county auditor, county treasurer, and in addition, two regularly employed or retired firefighters elected by secret ballot of the employed and retired firefighters. Retired members who are subject to the jurisdiction of the pension board have both the right to elect and the right to be elected under this section. The first members to be elected by the firefighters shall be elected annually for a two- year term. The two firefighter -elected members shall, in turn, select a third eligible member who shall serve in the event of an absence of one of the regularly elected members. Plan membership is limited to active members of the Firefighter's Pension Fund (FPF) as of March 1, 1970. On that date, the Washington Law Enforcement Officers' and Firefighters' System (LEOFF) was established. FPF is responsible for paying the pensions of those members retired prior to March 1, 1970 and for providing the "excess benefit", the excess of FPF formula benefits over the LEOFF benefits. Therefore, the plan is closed to new members. At December 31, 2021 (the census date), FPF membership consisted of the following: 81 CITY OF TUKWILA: 2022 ACFR NOTES TO THE FINANCIAL STATEMENTS Type of Membership Total Inactive employees, spouses, or beneficiaries currently receiving benefit payments 7 Inactive employees entitled to but not yet receiving benefit payments: 0 Active employees 0 Total 7 Summary of Significant Accounting Policies For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pension, and pension expense information about the fiduciary net position of the City's Excess of Retirement Benefits Plan (the Plan) and additions to/deductions from the Plan's fiduciary net position have been determined on the same basis as they are reported by the Plan. For this purpose, the Plan recognizes benefit payments when due and payable in accordance with the benefit terms. Benefits Provided All benefit terms are in statutes RCW 41.16, 41.18, and 41.26. The FPF provides retirement, disability, and death benefits. Each firefighter in service on March 1, 1970 receives the greater of the benefit payable under the Washington Law Enforcement Officers' and Firefighters' Retirement System and the benefits available under the provisions of prior law. Where benefits under the old law exceed those under the new law for any firefighter, the excess benefits are paid from the FPF of the city employing the member on March 1, 1970. All members are retired and drawing benefits. Benefit terms provide for cost -of -living adjustments to each member's retirement benefit. There are two types of increases: escalation by salary in proportion to the current salary of the rank from which the firefighter retired, or an increase proportionate to the increase in the Seattle area CPI, with the change computed annually. Regardless of the increase (or decrease) in the CPI, the benefits are increased at least 2% each year. The former applies to firefighters who retired from service after 1969, their survivors, and to firefighters who retired for duty disability (but not their survivors) after 1961. The latter applies to all other types of monthly benefits. Contributions The City makes contributions based on an actuarially determined rate. As long as the FPF provides for benefits to covered members, the City will be eligible to receive a share of the State's distribution of the fire insurance premium taxes. The amount the City receives is 25% of all monies received by the State from taxes on fire insurance premiums. Contributions can also come from taxes paid pursuant to the provisions of RCW 41.16.060. This statute requires that each municipality levies up to $0.45 (only $0.225 of which can be in excess of the property tax limit pursuant to RCW 84.52.043) per $1,000 of assessed valuation, based on reports by a qualified actuary, to maintain the fund. Reporting period contributions were $71,112. City's Net Pension Liability The City's total pension liability was valued as of December 31, 2021 and was used to calculate the net pension liability. The components of the City's net pension liability at December 31, 2021 are as follows: Total pension liability $ 829,479 Less: Plan fiduciary net position (1,531,223) City's net pension liability $ (701,744) Plan fiduciary net position as a percentage of the total pension liability 184.60% 82 CITY OF TUKWILA: 2022 ACFR NOTES TO THE FINANCIAL STATEMENTS Deferred Outflows of Resources and Deferred Inflows of Resources For the report year ended December 31, 2022, the City recognized a pension expense credit of $(276,778). The City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Outflows of Resources Deferred Inflows of Resources Net difference between projected and actual investment earnings on pension plan investments $58,182 - Contributions subsequent to the measurement date 74,397 - Total $132,579 - Deferred outflows of resources related to pensions resulting from the City of Tukwila contributions subsequent to the measurement date, but before the end of the reporting period, will be recognized as a reduction of the net pension liability in subsequent fiscal periods rather than in the current fiscal period. Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in the pension expense as follows: Year ended December 31: Amount 2023 $ 19,806 2024 16,016 2025 12,131 2026 10,229 2027 - Remaining - TOTAL $ 58,182 Actuarial Assumptions The total pension liability was determined by an actuarial valuation as of December 31, 2021, using the following actuarial assumptions, applied to all periods included in the measurement: Measurment Date: Discount Rate Investment Rate of Return Inflation Salary Increases Mortality Rates December 31, 2020 December 31, 2021 2.00% 2.00% 2.75% 3.50% 1.84% 1.84% 2.75% 3.25% Mortality Rates were based on tables from the Society of Actuaries. Experience studies come from the State of Washington. There were no ad hoc postemployment benefit changes (including ad hoc COLAs) to the plan. There were no changes between the measurement date and the report date that are expected to have a significant effect on the net pension liability. Discount Rate The discount rate used to measure the total pension liability is 1.84%. Since the assets of the plan are invested entirely in short duration fixed income investments, the City has decided to use the same discount rate that is used for its unfunded OPEB valuation. 83 CITY OF TUKWILA: 2022 ACFR NOTES TO THE FINANCIAL STATEMENTS Long -Term Expected Real Rate of Return The long-term expected real rate of return is the same as the discount rate. Current Pension Liability $ 50,350 Non -Current Pension Liability 779,129 Total Pension Liability $ 829,479 Schedule of Changes in the City's Net Pension Liability and Related Ratios Increase / (Decrease) Total Pension Plan Fiduciary Net Pension Liability Net Position Liability (a) (b) (c) = (a) - (b) Balance as of report date December 31, 2021 $ 1,161,888 $ 1,539,196 $ (377,308) Changes for the year: Service cost Interest 22,655 22,655 Changes of benefit terms Differences between expected and actual experience (220,445) (220,445) Changes of assumptions (76,289) - (76,289) Contributions Employer - City's contribution 71,112 (71,112) Employee contributions Net investment income (20,255) 20,255 Benefit payments (58,330) (58,330) Administrative Expenses - Other miscellanious income / (expense) (500) 500 Net changes (332,409) (7,973) (324,436) Balance as of report date December 31, 2022 $ 829,479 $ 1,531,223 $ (701,744) Sensitivity of Liabilities to Changes in the Discount Rate Sensitivity of the total and net pension liability to changes in the discount rate. The total and net pension liability of the City, as well as what the City's total and net pension liability would be if they were calculated using a discount rate that is one percentage point lower (0.84%) or one percentage point higher (2.84%) follows: 1% Decrease Current Rate 1 % Increase 0.84% 1.84% 2.84% Total pension liability (Asset) $ 907,388 $ 829,479 $ 761,612 Increase / (decrease) 77,909 (67,867) % Change 9.39% -8.18% Net pension liability (Asset) Increase / (decrease) % Change $ (623,835) $ (701,744) $ (769,611) 77,909 (67, 867) -11.10% 9.67% 84 CITY OF TUKWILA: 2022 ACFR NOTES TO THE FINANCIAL STATEMENTS Basis of Valuation A general summary of the substantive plan used as the basis of the valuation follows. Retiree Pension Benefit General Applicable Statutes RCW 41.16, 41.18, 41.26 Benefits Each firefighter in service on March 1, 1970 receives the greater of the benefit payable under LEOFF or FPF. Where benefits under the old law exceed those under the new for any firefighter, the excess benefits are paid from the FPF of the city employing the member on March 1, 1970. Service Retirement Benefit Member Eligibility: age 50 and 25 years of service (RCW 41.18.040) or age 50 and five years of service (RCW 41.26.090). Amount of benefit: 50% of salary plus an additional 2% for each year of service in excess of 25 years. Maximum benefit of 60% of salary (does not apply for those retiring after July 1, 2006). Survivor Eligibility: spouse or child. Amount of benefit: continuation of the firefighter's benefit. (If spouse — same, plus additional 5% of salary per child. If no spouse — 30% of salary for first child, 10% for each additional child. Maximum of 60% of salary). Duty Disability Retirement Benefit Member Eligibility: disabled after six-month waiting period. Amount of benefit: determined the same as Service Retirement Benefit. Recovery: restoration to service. Survivor See Survivor's Benefit section under Service Retirement. Non Duty Disability Retirement Benefit Member Eligibility: disabled after 90-day waiting period. Amount of benefit: 50% of salary, or service retirement benefit, if greater. Recovery: see Duty Disability Retirement. Limitations: no benefits payable if firefighter employed elsewhere when disabled. Survivor Eligibility: spouse or child Amount of benefit: 33.3% to widow or children only. 45.8% to widow and one child. 47.6% to widow and two children. 50.0% to widow and three children. 85 CITY OF TUKWILA: 2022 ACFR NOTES TO THE FINANCIAL STATEMENTS Retiree Pension Benefit (Continued) Death Benefit Duty Eligibility: spouse or child Amount of benefit: If spouse — 50% of salary plus an additional 5% of salary per child; maximum benefit of 60% of salary. If no spouse — 50% of salary to children. Non -Duty Eligibility: spouse or child Amount of benefit: provisions the same as Survivor's Benefit under Non -Duty Disability Retirement Special Provisions Under disability or death benefits, a surviving spouse may elect a lump -sum payment of $5,000 in lieu of future monthly benefits. Vesting Termination after 20 years of service (RCW 41.18.130) or five years of service (RCW 41.26.090). Deferred Benefit Commencement When a firefighter would have had 25 years of service (RCW 41.18.130) or age 50 (RCW 41.26.090). Amount of Benefit 2% of salary for each year of service. Other provisions apply, see statutes. Death While Vested Prior to Commencement of Benefits Payment of firefighter's deferred benefit to spouse or child. Postretirement Increase Benefits Payable Annual increase proportionate to the increase in the Seattle -area CPI. Minimum increase at least 2% each year. Benefits Payable Under LEOFF Type 1: Escalation by salary in proportion to current salary or rank from which the firefighter retired. Type 2: Annual increase proportionate to the increase in the Seattle -area CPI. Minimum increase at least 2% each year. Applicability Type 1 applies to firefighters who retired from service after 1969, their survivors, and to firefighters who retired for duty disability (but not their survivors) after 1961. Type 2 applies to all other types of monthly benefits Minimum Benefit After April 25, 1973, a minimum benefit of $300 per month to all retired firefighters and their survivors. This minimum is increased by the CPI. Funeral Benefit $500 RCW 41.18.140, no provision under RCW 41.26. 86 CITY OF TUKWILA: 2022 ACFR NOTES TO THE FINANCIAL STATEMENTS Participant Summary December 31, 2021 - Age and service determined as of the census date. LEOFF Plan 1 (Firemen's Pension) Inactive Participants Age Service Retirees Disabled Retirees Surviving Spouses Total <70 0 0 0 0 70-74 0 0 0 0 75 - 79 1 1 1 3 80 - 84 1 1 0 2 85 - 89 0 1 1 2 90+ 0 0 0 0 Total 2 3 2 7 The key actuarial assumptions used for the December 31 valuation were: Assumption Rates Actuarial Cost Method Asset Valuation Method Valuation Date Measurement Date Report Date Discount Rate Healthy Mortality Termination Rates Disability Retirement Cost of Living Salary Increases Entry -Age Normal, Level Percentage of Salary Fair Market Value December 31, 2021 December 31, 2021 December 31, 2022 The discount rate selected is 1.84%. Since the assets of the plan are invested entirely in short duration fixed income investments, the City has decided to use the same discount rate that is used for its unfunded OPEB valuation, which is the 20- year tax-exempt municipal bond yield. RP-2014 mortality table (adjusted to 2006), total dataset, fully generational with mortaility improvement scale MP-2021. n/a n/a n/a 2.75%, based on State of Washington 2021 actuarial valuation report. Used to increase state paid benefits annually. Salary Increases 3.50%, based on State of Washington 2021 actuarial valuation report. Used to increase FPF benefits 87 CITY OF TUKWILA: 2022 ACFR NOTES TO THE FINANCIAL STATEMENTS NOTE 9 — DEFINED BENEFIT OTHER POSTEMPLOYMENT BENEFIT (OPEB) PLANS The following table represents the aggregate OPEB amounts for all plans subject to the requirements of GASB Statement 75 for the year 2022: Aggregate OPEB Amounts OPEB Liabilities $ 6,378,071 OPEB Assets - Deferred outflows of resources 331,071 Deferrred inflows of resources - OPEB expenses/expenditures (1,141, 088) Plan Description The City of Tukwila's LEOFF Plan 1 (the Plan) is a single -employer defined -benefit healthcare plan administered by the City. The Plan provides medical, prescription drug, dental, Medicare Part B premiums, long-term care, and vision expenses for LEOFF 1 retirees. The Plan does not cover dependent spouses and children. The Plan does not issue a separate standalone financial report. Benefits Provided As mandated by RCW 41.26, RCW 41.18, and RCW 41.20, the City reimburses 100% of allowable healthcare costs for LEOFF 1 retirees. All firefighters and law enforcement officers employed between 3/1/1970 and 10/31/1977 are members of a single employer defined benefit OPEB plan and are provided lifetime insurance coverage for medical, hospital and nursing care costs. These benefits are accounted for in Police and Fire Pension and Relief Funds and are considered, in substance, a postemployment healthcare plan administered by, but not part of, the Police and Fire Pension Plans. Extraordinary health and dental expenses, as determined by the Pension Board, require prior approval. Insurance policies for this benefit are underwritten as part of the City's overall insurance program. The LEOFF I OPEB plans are closed to new entrants. The City pays a monthly insurance premium to the Employee Health Care Fund for each retiree. The premium is less for Medicare age retirees, and the City reimburses retirees for the Medicare premiums. Medicare is the primary payer for retirees age 65 and over, and Cigna Administrators pays claims for retirees under age 65. The members' necessary hospital, medical, and nursing care expenses not payable by workers' compensation, Medicare, or insurance provided by another employer, are covered. Employees Covered by Benefit Terms At December 31, 2021 (the census date), the following employees were covered by the benefit terms: Inactive employees or beneficiaries currently receiving benefits 30 Inactive employees entitled to but not yet receiving benefits 0 Active employees 0 Total 30 Contributions The plan is funded on a pay-as-you-go basis and there are no assets accumulated in a qualifying trust. The authority to establish and amend benefits is determined by the LEOFF board. 88 CITY OF TUKWILA: 2022 ACFR NOTES TO THE FINANCIAL STATEMENTS Total OPEB Liability The City's total OPEB liability was valued as of December 31, 2021, and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation as of December 31, 2021. Assumptions and Other Inputs The total OPEB liability in the December 31, 2021 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified: Measurement Date: December 31, 2020 December 31, 2021 Discount Rate 2.00% 1.84% Inflation 2.50% 7.25% Healthcare Cost Trend Rates 5.40% 4.80% Salary Increases n/a n/a Mortality Rates Based on SOA Tables • Projections of the sharing benefit -related costs are based on an established pattern of practice. • Experience studies come from the State of Washington 2018 study. • Inactive employees (retirees) pay 0% of the cost of benefits. • There were no ad hoc postemployment benefit changes (including ad hoc COLAs) to the plan. • There were no changes between the measurement date and the report date that are expected to have a significant effect on the net OPEB liability. The discount rate used to measure the total OPEB liability is 1.84%. The City's OPEB Plan is an unfunded plan, therefore the discount rate was set to the rate of tax-exempt, high -quality 20-year municipal bonds, as of the valuation date. Sensitivity of the net OPEB liability to changes in the discount rates. The total OPEB liability of the City, as well as that the City's total OPEB liability would be if it were calculated using a discount rate that is one percentage point lower (0.84%) or one percentage point higher (2.84%) as follows: 1% Decrease (0.84%) Current Discount Rate (1.84%) 1% Increase (2.84%) Total OPEB Liability $ 7,008,192 $ 6,378,071 $ 5,834,832 Increase (Decrease) 630,121 (543,239) % Change 9.9% -8.5% Sensitivity of the total OPEB liability to changes in the healthcare cost trend rates. The healthcare trend for this valuation started at 4.80% and decreased to 3.94% over 55 years. The total OPEB liability of the City, as well as what the City's total OPEB liability would be if it were calculated using healthcare cost trend rates that are one percentage point lower (3.80%) or one percentage point higher (5.80%) than current healthcare cost trend rates as follows: 1% Decrease (3.80%) Current Healthcare Cost Trend Rate (4.8%) 1% Increase (5.80%) Total OPEB Liability $ 5,871,797 $ 6,378,071 $ 6,950,591 Increase (Decrease) (506,274) 572,520 % Change -7.9% 9.0% 89 CITY OF TUKWILA: 2022 ACFR NOTES TO THE FINANCIAL STATEMENTS Changes in the Total OPEB Liability — City of Tukwila LEOFF Plan 1 Total OPEB Plan Fiduciary Net OPEB Liability Net Position Liability Balance as of December 31, 2021 $ 7,898,399 $ - $ 7,898,399 Changes: Service Cost - - - Interest 154,176 - 154,176 Changes of Benefit Terms - - Difference Between Expected and Actual Experience (1,163,334) - (1,163,334) Changes of Assumptions (131,930) (131,930) Contributions Employer - City's Contribution - - Employer - Implicit Subsidy Employee Net Investment Income Benefit Payments (379,240) (379,240) Implicit Rate Subsidy Fulfilled Administrative Expenses - - Net Changes (1,520,328) (1,520,328) Balance as of December 31, 2022 $ 6,378,071 $ $ 6,378,071 For the year ended December 31, 2022, the City recognized an OPEB expense credit of $(1,141,088). At December 31, 2022, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources: Deferred Outflows of Resources Deferred Inflows of Resources Differences between expected and actual experience $ - $ - Changes of assumptions - - Contributions subsequent to the measurement date 331,071 - Total $ 331,071 $ - Amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows: Report Year Ending December 31: Amount 2023 $ 2024 2025 2026 2027 Remaining Amount Current OPEB Liability $ 415,819 Non -Current OPEB Liability 5,962,252 Total OPEB Liability $ 6,378,071 90 CITY OF TUKWILA: 2022 ACFR NOTES TO THE FINANCIAL STATEMENTS Expected Average Remaining Service Lives (EARSL) The effects on the total OPEB liability of (1) changes of economic and demographic assumptions or of other inputs and (2) differences between expected and actual experience are required to be included in OPEB expense in a systematic and rational manner over a closed period equal to the average of the expected remaining service lives of all employees that are provided with benefits through the OPEB plan (active employees and inactive employees), beginning in the current period. The expected average remaining service lives (EARSL) for the current period follows. Note, however, that for calculation purposes, 1.0 is used when calculating amortizations if the EARSL is less than 1 year. NOTE 10 — LONG-TERM LIABILITIES Governmental Activities Long -Term Debt General Obligation Bonds are direct obligations of the City for which its full faith and credit are pledged. Debt service for voter -approved issues, of which the City has one, are funded by special property tax levies. Debt service for City Council authorized bonds, also called councilmanic bonds, is funded from regular property taxes, sales taxes, or other general revenues, and is generally paid from debt service funds. The City currently maintains a rating of Aa3 from Moody's Investor Service and AA+ from Standard & Poor's. General Obligation Bonds outstanding at year-end are as follows: • 2015 LTGO bonds were issued to pay for improvements to Interurban Avenue South and reconstruct or retrofit Boeing Access Road Bridge. The City issued $5.825 million of general obligation bonds with an interest rate of 2.25%-3.0% and a final maturity of December 2035. • 2016 UTGO bonds in the amount of $32.99 million were issued after voters approved a $77.385 million bond measure that will fund a justice center, rebuild 3 fire stations and provide fire apparatus and life -safety equipment replacement for 20 years. The City issued $32.99 million of general obligation bonds with an interest rate of 4.5%-5.0% and a final maturity of December 2036. • 2017 LTGO bonds were issued to fund residential street improvements including adding sidewalks and undergrounding utilities on 42nd and 53rd Avenues. The City issued $8.18 million of general obligation bonds with an interest rate of 3.0%-3.5% and a final maturity of December 2037. • 2018 LTGO bonds were issued to fund the purchase of land in order to consolidate the Public Works function at one location. The City issued $18.365 million of general obligation bonds with an interest rate of 4.0%- 5.0% and a final maturity of December 2038. • 2019 LTGO bonds were issued to fund the purchase of land and improvements in order to consolidate the Public Works function at one location and to provide additional funding for construction of the new Justice Center and fire stations as part of the Public Safety Plan. The City issued $22.83 million of general obligation bonds with an interest rate of 3.0%-5.0% and a final maturity of December 2039. • 2019 UTGO bonds were issued to fund construction of the new Justice Center and fire stations as part of the Public Safety Plan. The City issued the remaining $37.77 million of the 2016 voter approved general obligation bonds with an interest rate of 3.0%-5.0% and a final maturity of December 2038. Direct borrowings and direct placements have terms negotiated directly with the investor or lender and are not offered for public sale. The following General Obligation bonds are direct borrowings or direct placements: • 2020 LTGO bonds were issued to refund a portion of the bonds issued in 2010 for the construction and realignment of Southcenter Parkway in the Tukwila South Annexation area and for the cost of emergency 91 CITY OF TUKWILA: 2022 ACFR NOTES TO THE FINANCIAL STATEMENTS preparedness capital and other equipment. The City issued $1,995,000 of general obligation refunding bonds with an interest rate of 1.29% and a final maturity date of December 2024. • 2021A LTGO bonds were issued to fund a portion of the Public Works Shops Phase 1 project. The City issued $2,867,300 of general obligation bonds with an interest rate of 1.7% and a final maturity of December 2031. • 2021B LTGO bonds were issued to refund the outstanding 2014 LTGO bonds that were issued to fund the acquisition and capital costs of redevelopment activities within the City's Tukwila International Boulevard (TIB) urban renewal area. The City issued $2,780,900 of general obligation refunding bonds with an interest rate of 2.7% and a final maturity date of December 2034. • 2021 C LTGO bonds were issued to refund the outstanding 2011 LTGO bonds, which were issued in 2011 to refund a portion of the 2003 bonds for the City's Arterial Streets program. The City issued $1,072,300 of general obligation refunding bonds with an interest rate of 1.15% and a final maturity date of December 2023. Special assessment bonds are issued to finance construction of local improvement district (LID) projects and are repaid through assessments collected from property owners benefiting from related improvements. Although the bonds are secured by liens against assessed properties, the City is required under state law to establish a guaranty fund to provide a means of paying LID bond debt service obligations in the event there are insufficient resources in the LID debt service fund. The special assessment bonds are not general obligation debt, but the City is obligated in some manner to cover the interest on the bonds. Therefore, the bonds are reported as Special Assessment Debt with Governmental Commitment. Special assessments outstanding at year-end are as follows: • 2013 special assessment bonds LID No. 33 were issued to reimburse the City for a portion of the costs of a major reconstruction of Klickitat and Southcenter Parkway to improve access to the urban center. The City issued $6,687,500 of special assessment bonds with an interest rate of 3.15%-5.375% and a final maturity of January 2031. Business -Type Activities Long -Term Debt Revenue bond indebtedness issued to fund proprietary activities is recorded in proprietary funds. Debt service payments are made from operating revenues generated by the proprietary funds. In proprietary funds, bonds are displayed net of unamortized premium or discount; annual interest expense is decreased by amortization of debt premium and increased by the amortization of debt discount. The City currently does not maintain a rating from any of the rating agencies because the outstanding revenue bonds are a direct placement. Revenue bonds outstanding at year-end are as follows: • 2015 water/sewer/SWM bonds were issued to refund the remaining debt of the 2006 revenue bonds. The bonds were issued to provide neighborhood revitalization to Allentown and Foster Point Sewer system. These revenue bonds have an interest rate of 2.34% and a final maturity of December 2026. State of Washington Public Works Trust Fund Loans are low interest rate loans available from the State of Washington Department of Commerce, Local Government & Infrastructure Division for qualifying projects and are a direct responsibility of the City. This debt is repaid by proprietary fund revenues. Public Works Trust Fund loans outstanding at year-end are as follows: • 2004 loan to install new water, sewer, and surface water infrastructure in Allentown and Foster Point neighborhoods. Additionally, 2 new sewer lift stations with generators, 33 manholes and catch basins, and 15 new fire hydrants were installed. 92 CITY OF TUKWILA: 2022 ACFR NOTES TO THE FINANCIAL STATEMENTS • 2004 loan constructed an underground collection system in the Cascade View neighborhood. • 2014 loan to install sewer liners in the City's commercial business district of Southcenter. Relining the sewer main avoids full excavation for a significant savings and has minimal impact to the roadway. The City is in compliance with all Washington State debt limitation statutes and bond indenture agreements. The schedules that follow summarize the long-term debt transactions of the City for the year ended December 31, 2022. CHANGES IN LONG-TERM LIABILITIES SUMMARY - GOVERNMENTAL ACTIVITIES DUE TO OTHER GENERAL PRIVATE SPECIAL COMPENSATED OTHER POST EMPLOY- LEASE NET PENSION OBLIGATION PLACEMENT ASSESSMENT ABSENCES GOVERNMENTS MBJT BENEFITS LIABILITY LIABILITY TOTAL Outstanding 01/01/2022 $ 117,890,000 $ 10,611,266 $ 3,060,000 $ 3,764,994 $ 4,568,396 $ 7,898,399 $ - $ 1,041,894 $ 148,834,949 Added - 4,071,423 - - 939,055 - 5,010,478 Retired / redeemed (3,995,000) (3,865,266) (375,000) (3,707,312) (184,606) (1,520,328) (168,402) 1,438,376 (12,377,537) Outstanding 12/31/2022 $ 113,895,000 $ 6,746,000 $ 2,685,000 $ 4,129,105 $ 4,383,790 $ 6,378,071 $ 770,653 $ 2,480,271 $ 141,467,890 Add Premiums, Subtract Discounts Total Long -Term Liabilities Debt Service to Maturity 9,544,638 $ 151,012,528 Following are schedules showing the debt service requirements to maturity for the City's long-term debt, excluding compensated absences, OPEB, lease liabilities and pensions. Governmental Activities Year Ended General Obligation General Obligation Due to Other Governments Special Assessments December Bonds Bonds - Private Placement 31 Principal Interest Principal Interest Principal Interest Principal Interest Total 2023 $ 4,300,000 $ 4,360,600 $ 1,494,000 $ 133,569 $ 191,836 $ 185,040 $ 400,000 $ 144,188 $ 11,209,232 2024 4,825,000 4,158,100 977,000 111,295 199,548 177,366 445,000 122,705 11, 016, 014 2025 5,175, 000 3,929,650 477,700 94,853 207,742 169,384 445,000 98,808 10, 598,137 2026 5,540,000 3,684,100 486,800 84,747 217,864 158,997 445,000 74,912 10, 692, 420 2027 5,930,000 3,422,775 496,900 74,444 228,950 148,104 445,000 51,015 10, 797,188 2028-2032 35, 625, 000 13,131,175 2,325,700 209,748 1,327,428 557,049 505,000 27,119 53, 708, 218 2033-2037 43, 460, 000 5,915,375 487,900 19,840 1,644,584 239,631 - - 51, 767, 330 2038-2042 9,040,000 335,150 - - 365,838 10,976 - - 9,751,964 Totals $ 113,895,000 $ 38,936,925 $ 6,746,000 $ 728,495 $ 4,383,790 $ 1,646,547 $ 2,685,000 $ 518,745 $ 169,540,502 93 CITY OF TUKWILA: 2022 ACFR NOTES TO THE FINANCIAL STATEMENTS CHANGES IN LONG-TERM LIABILITIES - GOVERNMENTAL ACTIVITIES ITEM Interest OUTSTANDING OUTSTANDING Due Within Rates Maturity Authorized 12/31/2021 ISSUED REDEEMED 12/31/2022 One Year GOVERNMENTAL ACTIVITIES: Limited General Obligation (LTGO) Bonds Payable: 2015 LTGO-Interurban, BAR 2.25-3.00 12/01/35 2017 LTGO-42nd & 53rd Streets 3.00-3.50 12/01/37 2018 LTGO - Public Works Shops 4.00-5.00 12/01/38 2019 LTGO - Public Safety Plan 3.00-5.00 12/01/39 5,825,000 8,180,000 18,365,000 22,830,000 4,415,000 6,905,000 18,365,000 22,830,000 260,000 340,000 730,000 885,000 4,155,000 6,565,000 17,635,000 21,945,000 270,000 355,000 765,000 930,000 Total LTGO Bonds Payable 55,200,000 52,515,000 2,215,000 50,300,000 2,320,000 Unlimited General Obligation (UTGO) Bonds Payable: 2016 UTGO - Public Safety 2019 UTGO - Public Safety 4.50-5.00 12/01/35 77,385,000 28,555,000 1,005,000 27,550,000 1,340,000 3.00-5.00 12/01/38 37,770,000 36,820,000 775,000 36,045,000 640,000 Total UTGO Bonds Payable 115,155,000 65,375,000 1,780,000 63,595,000 1,980,000 Private Placement Bonds: 2013 LTGO-MPD Pool Improvement 2.00-4.00 12/01/22 1,000,000 109,766 109,766 2017 Refunding Line of Credit 2.60-3.00 12/01/22 2,276,000 2,276,000 2,276,000 - - 2020 Refunding Streets (2010G0) 1.29 12/01/24 1,995,000 1,505,000 495,000 1,010,000 500,000 2021 Refunding (Ref 11/14G0 & PWS) 1.15-2.70 12/01/34 6,720,500 6,720,500 984,500 5,736,000 994,000 Total Private Placement Bonds Payable 11,991,500 10,611,266 3,865,266 6,746,000 1,494,000 Issuance premiums Net Bonds Payable Due to Other Governments 2019 SCORE Refunding 4.00-5.00 01 /01 /39 10,163,810 619,171 9,544,638 619,171 182,346,500 138,665,076 8,479,437 130,185,638 6,413,171 4,921,702 4,568,396 184,606 4,383,790 191,836 Total Due Other Governments Special Assessment Debt Klickitat Urban Access Project 3.150-5.375 01/15/29 4,921,702 4,568,396 6,687,500 3,060,000 184,606 375,000 4,383,790 191,836 2,685,000 400,000 Total Special Assessment Debt 6,687,500 3,060,000 375,000 2,685,000 400,000 Other Post -Employment Benefits Liability Net Pension Liability Lease Liability Compensated Absences: 7,898,399 1,520,328 6,378,071 415,819 1,041,894 (1,438,376) 2,480,271 - 939,055 168,402 770,653 252,419 3,764,994 4,071,423 3,707,312 4,129,105 258,645 Total Governmental Funds $ 193,955,702 $ 158,998,759 $ 5,010,478 $ 12,996,708 $ 151,012,528 $ 7,931,890 All governmental activities debt is liquidated by the general fund except for the special assessment debt and the 2019 SCORE intergovernmental debt. The special assessment debt is liquidated from assessments collected annually from property owners within boundaries of Local Improvement District #33. The 2019 SCORE debt was paid by SCORE from user fees. CHANGES IN LONG-TERM LIABILITIES SUMMARY - BUSINESS -TYPE ACTIVITIES DIRECT PLACEMENT PUBLIC WORKS REVENUE TRUST FUND COMPENSATED NET PENSION BONDS LOANS ABSENCES LIABILITY TOTAL Outstanding 01/01/2022 $ 840,235 $ 2,075,702 $ 334,419 $ 230,571 $ 3,480,927 Added - 431,713 - 431,713 Retired / redeemed (162,531) (599,468) (363,310) 341,800 (783,509) Outstanding 12/31/2022 $ 677,704 $ 1,476,234 $ 402,823 $ 572,370 $ 3,129,131 94 CITY OF TUKWILA: 2022 ACFR NOTES TO THE FINANCIAL STATEMENTS Debt Service to Maturity Following are schedules showing the debt service requirements to maturity for the City's long-term debt, excluding compensated absences and net pension liability. Business -Type Activities Year Ended Public Works Trust Fund December Direct Placement Revenue Bonds Loans 31 Principal Interest Principal Interest Total 2023 $ 162,560 $ 15,858 $ 573,417 $ 7,381 $ 759,217 2024 167,363 12,054 573,417 4,514 757,349 2025 171,830 8,138 41,175 1,647 222,790 2026 175,951 4,117 41,175 1,441 222,684 2027 - - 41,175 1,235 42,410 2028-2032 - - 205,875 3,088 208,963 Totals $ 677,704 $ 40,168 $ 1,476,234 $ 19,307 $ 2,213,413 CHANGES IN LONG-TERM LIABILITIES - BUSINESS -TYPE ACTIVITIES ITEM Interest OUTSTANDING OUTSTANDING Due Within Rates Maturity Authorized 12/31/2021 ISSUED REDEEMED 12/31/2022 One Year BUSINESS -TYPE ACTIVITIES: Direct Placement Revenue Bonds 2015 Water/Sewer/SWM Refunding 2.34 12/01/26 1,742,527 840,235 162,531 677,704 162,560 Total Bonds Payable 1,742,527 840,235 162,531 677,704 162,560 Public Works Trust Fund Loans: 2003 Loan-Water/Sewer 0.50 06/01/21 273,870 14,454 - 14,454 2003 Loan -Surface Water 0.50 06/01/21 219,725 11,597 11,597 - 2004 Loan-Water/Sewer 0.50-2.00 06/01/24 5,016,000 818,659 272,886 545,773 272,886 2004 Loan -Surface Water 0.50-2.00 06/01/24 684,000 111,635 37,212 74,424 37,212 2004 Loan -Surface Water 1.00 06/01/24 4,196,056 666,432 222,144 444,288 222,144 2014 Loan -Sewer 0.5 06/01/32 750,000 452,925 41,175 411,750 41,175 Total Public Works Trust Fund Loans 11,139,651 2,075,702 Net Pension Liability 230,571 Compensated Absences 334,419 599,468 1,476,234 573,417 (341,800) 572,370 431,713 363,310 402,823 14,831 Total Business -Type Activities $ 12,882,178 $ 3,480,927 $ 431,713 $ 783,509 $ 3,129,131 $ 750,808 TOTAL ALL FUNDS $ 206,837,880 $ 162,479,686 $ 5,442,191 $13,780,218 $ 154,141,659 $ 8,682,698 95 CITY OF TUKWILA: 2022 ACFR NOTES TO THE FINANCIAL STATEMENTS LONG-TERM LIABILITIES RECONCILIATION Governmental Business -Type Balance Activities Activities 12/31/2022 General Obligation Bonds General Obligation Bonds - Private Placement Special assessment bonds Revenue Bonds - Direct Placement Public Works Trust Fund loans Due to Other Governments Employee leave benefits Net Premiums/Discounts Other Post -Employment Benefits Lease Liability Net Pension Liability $ 113, 895, 000 $ - $113, 895, 000 6,746,000 2,685,000 4,383,790 4,129,105 9,544,638 6,378,071 770,653 2,480,271 677,704 1,476,234 402,823 572,370 6,746,000 2,685,000 677,704 1,476,234 4,383,790 4,531,928 9,544,638 6,378,071 770,653 3,052,641 Total long-term debt $ 151,012,528 $ 3,129,131 $ 154,141,659 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, 2022, the debt limits for the City were as follows: Item Without a Vote 1.5% 2.5% With a Vote of the People 5.0% 7.5% Legal Limit $ 134,556,788 $ 224,261,314 $ 448,522,627 $672,783,941 Outstanding Net Indebtedness 64,863,332 128,458,332 128,458,332 128,458,332 Margin Available $ 69,693,456 $ 95,802,982 $ 320,064,296 $544,325,609 Prior Year Defeasance of Debt In 2015, the City defeased water and sewer bonds by placing the proceeds of the new bonds in an irrevocable trust account to provide for all future debt service payments on the old bonds. Accordingly, the trust account assets and the liability for the defeased bonds are not included in the City's financial statements. At December 31, 2022, $860,000 of the defeased bonds were outstanding. Long-term Liabilities other than debt Claims are paid from one or more funds based on the nature of the transaction. Employees' compensable leave is the City's liability for all unused vacation, 25% of unused sick leave and unpaid overtime accrued by employees and, payable under specified conditions. This obligation is paid only at the time of termination, usually from the same funding source(s) from which the employee's salary or wage compensation was paid. The City does not report a liability for termination benefits because it is not reasonably estimable. 96 CITY OF TUKWILA: 2022 ACFR NOTES TO THE FINANCIAL STATEMENTS Local Improvement District No. 33 Tukwila Urban Access Improvement Project Local Improvement District (LID) No. 33 was formed on November 16, 2009 by Ordinance No. 2260. The project was designed to improve congestion within the City's Urban Center. The project included a partial lid over Southcenter Parkway, removal of conflicting turning movements, and the widening of Southcenter Parkway. Construction for the project began in March 2011 and was completed in October 2011. The project was closed out and accepted as complete by City Council on February 19, 2013. A variety of funding sources were used to pay for the project including federal and state grants, impact fees, City funds, a right-of-way donation, and special assessments. The City chose to fund the project internally, rather than obtain external, short-term financing then apply special assessments to property owners after the project was completed. Fund 104 Arterial Streets, where the project was accounted for, loaned the project funds as needed using a draw method at an interest rate of 1.80%. This loan was repaid in 2013 when special assessment bonds were issued. The City confirmed the assessment roll with a final assessment of $9,475,894. The prepayment period for the special assessments was open in the fall of 2013 and during that time the City received $2,788,350 in prepayments. Once the prepayment window closed, the City issued bonds for the remaining outstanding assessments in the amount of $6,687,500. From these proceeds, the City deposited $515,266 to the guaranty fund. The ninth of 15 annual installments for the assessments was due by October 16, 2022. As of December 31, 2022, all LID Special Assessments were current, nothing was delinquent. The City has sufficient funds in the LID No. 33 funds to meet debt service requirements in 2023. Estimated Arbitrage Rebate The Federal Tax Reform Act of 1986 requires issuers of tax-exempt debt of over $5 million to make payments to the United States Treasury of investment interest received at yields that exceed the issuer's tax-exempt borrowing rates. Payments of arbitrage rebate amounts due under these regulations must be made to the U.S. Treasury every five years. The City's estimated rebatable arbitrage amount as of December 31, 2022 is $0 for its tax-exempt bond issues subject to the Tax Reform Act. Unused Lines of Credit As of the end of 2022, the City had no open lines of credit. Terms Specified in Debt Agreements The City's bonds are not subject to acceleration upon the event of default. The City is liable for principal and interest payments only as they become due. There are no termination events or events of default specified in the debt agreements that would have financial consequences. 97 CITY OF TUKWILA: 2022 ACFR NOTES TO THE FINANCIAL STATEMENTS NOTE 11 — COMMITMENTS Construction Commitments. As of December 31, 2022, contractual obligations to contractors for construction projects total $7,597,754. Governmental Activities S 152nd Safe Routes to School Public Works Shops West Valley Highway Green River Trail Improvements 42 Ave S Bridge Replacement Allentown Truck Reroute City Hall Siding Repairs Transporation Element Comp Plan Overlay Total Governmental Activities Remaining Commitment $ 254,618 805,135 890,181 261,912 1,816,392 792,808 158,807 196,609 517,238 $ 5,693,700 Remaining Business -Type Activities Projects Commitment Stormwater Quality Retrofit $ 199,923 152nd Street Waterline Replacement 110,662 Tukwila 205 Levee Certification 77,823 S 131st PI Drainage Improvements 285,697 CBD Sewer Rehab 36,560 Chinook Wind 70,068 Lift Station #9 - Abandon 10,126 Water, Sewer, Surface Water Comp Plan Update 316,271 Riverton Creek Flap Gate Removal 45,207 GIS 149,820 Duwamish 26,000 Green the Green - Shoreline Restoration 38,496 Gilliam Creek Fish Barrier Removal 196,356 Tukwila Parkway 332,715 Floodplain 8,329 Total Business -Type Activities $ 1,904,054 Total Construction Commitments $ 7,597,754 98 CITY OF TUKWILA: 2022 ACFR NOTES TO THE FINANCIAL STATEMENTS NOTE 12 — POTENTIAL POLLUTION REMEDIATION AND OTHER LIABILITIES There are several lawsuits in which the City is involved. The City Attorney estimates that the potential claims against the City to have no material financial impact. The City of Tukwila is expected to share in potential liability under the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA") for sediment contamination within the Lower Duwamish Waterway Superfund site. In 2014, the Environmental Protection Agency estimated the total cost for the waterway cleanup to be $342 million with as many as 120 or more parties sharing in the liability. While it is not possible to provide an estimate of the City's potential CERCLA liability at this time, the relatively small size of the City's storm water system within the Lower Duwamish Waterway Superfund site area, as well as the City's recent ownership of the system, which began in 1989, means the City's share of liability should be low compared to other liable parties. A multi- year confidential process to allocate Duwamish Waterway cleanup costs by the major liable parties remains on- going. Once that process is completed and communicated to the City, which could occur in the fourth quarter of 2023, the City will be in a better position to estimate its potential liability for cleanup costs within the Lower Duwamish Waterway Superfund site. NOTE 13 — RISK MANAGEMENT The City of Tukwila is a member of the Washington Cities Insurance Authority (WCIA). Utilizing Chapter 48.62 RCW (self-insurance regulation) and Chapter 39.34 RCW (Interlocal Cooperation Act), nine cities originally formed WCIA on January 1, 1981. WCIA was created for the purpose of providing a pooling mechanism for jointly purchasing insurance, jointly self -insuring, and / or jointly contracting for risk management services. WCIA has a total of 166 members. New members initially contract for a three-year term, and thereafter automatically renew on an annual basis. A one-year withdrawal notice is required before membership can be terminated. Termination does not relieve a former member from its unresolved loss history incurred during membership. Liability coverage is written on an occurrence basis, without deductibles. Coverage includes general, automobile, police, errors or omissions, stop gap, employment practices, prior wrongful acts, and employee benefits liability. Limits are $4 million per occurrence in the self -insured layer, and $16 million in limits above the self -insured layer is provided by reinsurance. Total limits are $20 million per occurrence subject to aggregates and sublimits. The Board of Directors determines the limits and terms of coverage annually. All Members are provided a separate cyber risk policy and premises pollution liability coverage group purchased by WCIA. The cyber risk policy provides coverage and separate limits for security & privacy, event management, and cyber extortion, with limits up to $1 million and subject to member deductibles, sublimits, and a $5 million pool aggregate. Premises pollution liability provides Members with a $2 million incident limit and $10 million pool aggregate subject to a $100,000 per incident Member deductible. Insurance for property, automobile physical damage, fidelity, inland marine, and equipment breakdown coverage are purchased on a group basis. Various deductibles apply by type of coverage. Property coverage is self -funded from the members' deductible to $750,000, for all perils other than flood and earthquake, and insured above that to $400 million per occurrence subject to aggregates and sublimits. Automobile physical damage coverage is self - funded from the members' deductible to $250,000 and insured above that to $100 million per occurrence subject to aggregates and sublimits. In-house services include risk management consultation, loss control field services, and claims and litigation administration. WCIA contracts for certain claims investigations, consultants for personnel and land use issues, insurance brokerage, actuarial, and lobbyist services. WCIA is fully funded by its members, who make annual assessments on a prospectively rated basis, as determined by an outside, independent actuary. The assessment covers loss, loss adjustment, reinsurance and other administrative expenses. As outlined in the interlocal, WCIA retains the right to additionally assess the membership for any funding shortfall. An investment committee, using investment brokers, produces additional revenue by investment of WCIA's assets in financial instruments which comply with all State guidelines. 99 CITY OF TUKWILA: 2022 ACFR NOTES TO THE FINANCIAL STATEMENTS 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. Traveler's insures boiler machinery and provides for employee dishonesty coverage. The City has a Risk Management and a Safety Committee to oversee risk management. In addition, the WCIA provides support for a proactive risk analysis program and a loss control manual. There were no significant reductions in insurance coverage in the past year. During the year under audit and in the past three years, no settlement has exceeded insurance coverage. The City self -insures for unemployment benefits. This is a budgeted expenditure each year and the City paid $39,686 in unemployment in 2022. 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 Symetra which provides an individual limit of $210,000. Each fund contributes an appropriate amount each year to pay premiums and claims. Liabilities include an actuarially determined amount for claims that have been incurred but not reported (IBNR's) and a contingency reserve equal to 2.5 times the IBNR liability. The IBNR liability is estimated by blending two actuarial methods. The first method is the claim -ladder development method. This method calculates the IBNR by estimating monthly incurred claims based on the historical pattern of claim lag experienced by the City and the claim lag triangles of the City. The second method is the Claims Per Member Per Month (PMPM) Trended Method. This calculates an average PMPM claims cost for claims not yet paid based on patterns of claims costs that have been recently incurred. Knowledge of external forces that may affect future health care trends also impact the result of the calculation, along with general actuarial judgment. The following table reflects changes in the balances of claims liabilities for 2022 and 2021. SUMMARY OF HEALTH CARE CLAIM LIABILITIES Active Employees Retired Employees LEOFF I 2022 2021 2022 2021 Claim Liabilities at Beginning of Year Claim expenses: Current year and changes in estimates Claim payments and expenses Claim Liabilities at End of Year NOTE 14 — SUBSEQUENT EVENTS $ 1,500,000 $ 1,662,500 $ 82,500 $ 137,500 6,027,132 6,509,319 398,016 276,071 (6,021,632) (6,671,819) (411,016) (331,071) $ 1,505,500 $ 1,500,000 $ 69,500 $ 82,500 On January 1, 2023, the City entered into a contract for services with the Puget Sound Regional Fire Authority (RFA) to provide fire, emergency medical services, and prevention & education services for the City of Tukwila. On January 1, 2023, employees of the fire department were terminated from employment with the City and were hired by the RFA. Additionally, all equipment and apparatus was transferred to the RFA as part of the contract. 100 CITY OF TUKWILA: 2022 ACFR REQUIRED SUPPLEMENTAL INFORMATION CITY OF TUKWILA, WASHINGTON SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL GENERAL FUND FOR THE YEAR ENDED DECEMBER 31, 2022 Variance With Original Final Final Budget Budget Budget Actual Positive (GAAP Basis) (GAAP Basis) Results (Negative) REVENUES: Taxes $ 47,208,700 $ 50,208,700 $ 51,350,070 $ 1,141,370 Licenses and permits 6,110,100 6,110,100 5,376,555 (733,545) Intergovernmental 3,079,305 6,962,997 6,595,757 (367,240) Charges for services 2,864,425 2,967,425 2,746,965 (220,460) Fines and Forefitures 204,925 636,925 485,824 (151,101) Investment earnings 140,107 140,107 (636,037) (776,144) Miscellaneous 146,000 118,000 340,042 222,042 Total Revenues 59,753,562 67,144,254 66,259,176 (885,078) EXPENDITURES: Current: General Government Public safety Utilities Transportation Natural and economic environment Social services Culture and recreation Debt service: Principal Interest Capital outlay Total Expenditures Excess of Revenues And Expenditures 8,624,685 33,138,911 4,695,867 5,051,443 4,332,416 530,000 9,631,877 35,786,692 5,206,331 6,532,204 5,057,108 730,000 9,052,551 34,854,415 4,677,930 5,619,921 4,849,369 140,106 15,097 387,843 579,326 932,277 528,401 912,283 207,739 (140,106) (15,097) 342,157 56,373,322 62,944,212 59,597,232 3,346,980 3,380,240 4,200,042 6,661,943 2,461,902 OTHER FINANCING SOURCES (USES): Lease proceeds - Transfers in 4,947,467 Transfers out (7,912,941) Total Other Financing Sources And Uses (2,965,474) Net change in fund balances Fund balances - beginning Fund Balances - Ending 5,357,467 (10,719,291) (5,361,824) 98,699 2,553,951 (10,064, 760) (7,412,111) 98,699 (2,803,516) 654,531 (2,050,286) 414,766 18,356,995 (1,161,782) 23,671,384 (750,167) 23,741,523 411,615 70,139 $ 18,771,761 $ 22,509,601 $ 22,991,356 $ 481,754 101 CITY OF TUKWILA: 2022 ACFR REQUIRED SUPPLEMENTAL INFORMATION NOTES TO REQUIRED SUPPLEMENTARY INFORMATION The City of Tukwila budgets its funds in accordance with the Revised Code of Washington 35A.33. In compliance with the code, biennial budgets are adopted for the general fund and special revenue funds. For governmental funds, there are no substantial differences between the budgetary basis and generally accepted accounting principles. Budgetary accounts are integrated in fund ledgers for all budgeted funds, but the financial statements include budgetary comparisons for biennially budgeted governmental funds only. Budgets established for proprietary and fiduciary funds are "management budgets" and are not legally required to be reported and, as such, are not reported in the ACFR. The biennial appropriated budgets are adopted at the fund level and the budgets constitute the legal authority for expenditures at that level. Subsidiary revenue and expenditure records are used to compare the budgeted amounts with actual revenues and expenditures. As a management control device, the subsidiary ledgers monitor expenditures for individual functions and activities by object class. Any unexpended appropriation balances lapse at the end of the biennium. The City of Tukwila's budget procedures are mandated by RCW 35A.33. The steps in the budget process are as follows: 1) Prior to November 1 on even numbered years, the Mayor submits a proposed budget to the City Council. This budget is based on priorities established by the Council and estimates provided by the City departments during the preceding months, and balanced with revenue estimates made by the Mayor. 2) The City Council conducts public hearings on the proposed budget in November and December. 3) The Council makes its adjustments to the proposed budget and adopts by ordinance a final balanced budget no later than December 31. 4) The final operating budget as adopted is published and distributed within the first month of the following year. Copies of the budget are made available to the public. The City Council must approve by ordinance any amendments that increase the total for the fund. Budget amounts presented in the basic financial statements include both the original amounts and the final amended budget as approved by the City Council. Expenditure Categories General Government Public Safety Transportation Natural and Economic Environment Culture and Recreation Includes administration, finance, municipal court, attorney, and city clerk activities. Includes all police and fire activities. Includes all residential and arterial street maintenance and construction. Reflects all planning and building inspection as well as environmental and community services. Includes expenditures related to parks and recreational activities. The information presented in the following required schedules was determined as part of the actuarial valuations at the dates indicated. 102 CITY OF TUKWILA: 2022 ACFR REQUIRED SUPPLEMENTAL INFORMATION COST SHARING MULTIPLE EMPLOYER DEFINED BENEFIT PENSION SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY PERS 1 Fiscal Year Ending Employer's proportion of the net pension liability (asset) Employer's proportionate share of the net pension liability State's proportionate share of the net pension liability (asset) associated with the employer Total: Proportionate share of the net pension liability (asset) Employers covered payroll Employer's proportionate share of the net pension liability as a percentage of covered payroll Plan fiduciary net position as a percentage of the total pension liability June 30, 2015 June 30, 2016 June 30, 2017 June 30, 2018 June 30, 2019 June 30, 2020 June 30, 2021 June 30, 2022 0.135736% $ 0.131354% 0.127058% 0.122630% 0.121291% 0.113704% 0.104195% 0.109635% 7,100,255 $ 7,054,328 6,029,001 5,476,697 4,664,070 4,014,365 1,272,465 3,052,641 $ 7,100,255 7,054,328 6,029,001 5,476,697 4,664,070 4,014,365 1,272,465 3,052,641 $ 15,561,015 15,736,921 16,022,842 16,327,082 16,858,481 17,063,647 15,827,030 18,271,802 45.63% 44.83% 37.63% 33.54% 27.67% 23.53% 8.04% 16.71% 59.10% 57.03% 61.24% 63.22% 67.12% 68.64% 88.74% 76.56% PERS 2/3 Fiscal Year Ending Employer's proportion of the net pension liability (asset) Employers proportionate share of the net pension liability State's proportionate share of the net pension liability (asset) associated with the employer Total: Proportionate share of the net pension liability (asset) Employer's covered payroll Employer's proportionate share of the net pension liability as a percentage of covered payroll Plan fiduciary net position as a percentage of the total pension liability June 30, 2015 June 30, 2016 June 30, 2017 June 30, 2018 June 30, 2019 June 30, 2020 June 30, 2021 June 30, 2022 0.173592% 0.166622% 0.161787% 0.156335% 0.154903% 0.146296% 0.132317% 0.141085% $ 6,202,541 $ 8,389,286 5,621,325 2,669,281 1,504,635 1,871,042 (13,180,902) (5,232,534) $ 6,202,541 8,389,286 5,621,325 2,669,281 1,504,635 1,871,042 (13,180,902) (5,232,534) $ 15,406,589 15,579,718 15,861,514 16,228,608 16,843,895 17,053,352 15,827,030 18,271,802 40.26% 53.85% 35.44% 16.45% 8.93% 10.97% -83.28% -28.64% 89.20% 85.82% 90.97% 95.77% 97.77% 97.22% 120.29% 106.73% PSERS Fiscal Year Ending Employer's proportion of the net pension liability (asset) Employers proportionate share of the net pension liability State's proportionate share of the net pension liability (asset) associated with the employer Total: Proportionate share of the net pension liability (asset) Employers covered payroll Employer's proportionate share of the net pension liability as a percentage of covered payroll Plan fiduciary net position as a percentage of the total pension liability June 30, 2015 June 30, 2016 June 30, 2017 June 30, 2018 June 30, 2019 June 30, 2020 June 30, 2021 June 30, 2022 0.052748% $ 0.048428% 0.455650% 0.025080% 0.032158% 0.028557% 0.026736% 0.035312% 9,628 $ 20,581 8,928 311 (4,182) (3,929) (61,423) (25,248) 9,628 20,581 8,928 311 (4,182) (3,929) (61,423) (25,248) $ 154,426 157,203 161,328 98,474 147,556 175,312 181,231 292,166 6.23% 13.09% 5.53% 0.32% -2.83% -2.24% -33.89% -8.64% 95.08% 90.41% 96.26% 99.79% 101.85% 101.68% 123.67% 103.17% LEOFF 1 Fiscal Year Ending Employer's proportion of the net pension liability (asset) Employer s proportionate share of the net pension liability State's proportionate share of the net pension liability (asset) associated with the employer Total: Proportionate share of the net pension liability (asset) Employers covered payroll Employer's proportionate share of the net pension liability as a percentage of covered payroll Plan fiduciary net position as a percentage of the total pension liability June 30, 2015 June 30, 2016 June 30, 2017 June 30, 2018 June 30, 2019 June 30, 2020 June 30, 2021 June 30, 2022 0.077944% $ 0.077890% 0.082086% 0.083934% 0.082668% 0.081701% 0.083135% 0.082276% (939,397) $ (802,490) (1,245,425) (1,523,823) (1,634,025) (1,542,931) (2,847,841) (2,360,180) (5,428,021) (8,424,025) (10,307,102) (11,052,506) (10,436,345) (19,262,726) (15,964,199) $ (939,397) $ (6,230,511) (9,669,450) (11,830,925) (12,686,531) (11,979,276) (22,110,567) (18,324,379) 76,144 -1233.71% n/a n/a n/a n/a n/a n/a n/a 127.36% 123.74% 135.96% 144.42% 148.78% 146.88% 187.45% 169.62% LEOFF 2 Employer's proportion of the net pension liability Fiscal Year Ending (asset) Employers proportionate share of the net pension liability State's proportionate share of the net pension liability (asset) associated with the employer Total: Proportionate share of the net pension liability (asset) Employers covered payroll Employer's proportionate share of the net pension liability as a percentage of covered payroll Plan fiduciary net position as a percentage of the total pension liability June 30, 2015 June 30, 2016 June 30, 2017 June 30, 2018 June 30, 2019 June 30, 2020 June 30, 2021 June 30, 2022 0.519159% 0.510663% 0.503269% 0.480347% 0.473755% 0.438096% 0.420145% 0.424099% $ (5,335,916) (2,970,169) (6,983,743) (9,752,091) (10,975,449) (8,936,519) (24,403,761) (11,525,730) $ (2,123,832) (1,936,334) (4,530,224) (6,314,295) (7,106,396) (5,714,227) (15,743,090) (7,466,117) $ (7,459,748) (4,906,503) (11,513,967) (16,066,386) (18,081,845) (14,650,746) (40,146,851) (18,991,847) $ 15,113,237 15,480,062 15,743,133 15,759,700 16,581,465 16,552,520 16,037,465 17,522,336 -49.36% -31.70 % -73.14% -101.95% -109.05% -88.51% -250.33% -108.39% 111.67% 106.04% 113.36% 118.50% 119.43% 115.83% 142.00% 116.09% `Until a full 10-year trend is compiled, govemments should present information only for those years of Mich information is available. 103 CITY OF TUKWILA: 2022 ACFR REQUIRED SUPPLEMENTAL INFORMATION SCHEDULE OF EMPLOYER CONTRIBUTIONS PERS 1 Fiscal Year Ending Statutorily or contractually required contributions Less: Contributions in relation to the statutorily or contractually required contributions Covered Contribution Employee deficiency (excess) Payroll Contributions as a percentage of covered payroll December 31, 2015 December 31, 2016 December 31, 2017 December 31, 2018 December 31, 2019 December 31, 2020 December 31, 2021 December 31, 2022 PERS 2/3 $ 686,881 752,418 789,712 846,714 854,217 740,837 705,904 668,862 $ (686,881) (752,418) (789,712) (846,714) (854,217) (740,837) (705,904) (668,862) $ $ 15,654,255 15,777,881 16,153,755 16,742,206 17,030,131 16,004,087 16,849,796 18,271,802 4.39% 4.77% 4.89% 5.06% 5.02% 4.63% 4.19% 3.66% Fiscal Year Ending Statutorily or contractually required contributions Less: Contributions in relation to the statutorily or contractually required contributions Covered Contribution Employee deficiency (excess) Payroll Contributions as a percentage of covered payroll December 31, 2015 December 31, 2016 December 31, 2017 December 31, 2018 December 31, 2019 December 31, 2020 December 31, 2021 December 31, 2022 PSERS $ 873,248 972,612 1,090,715 1,245,790 1,310,892 1,267,208 1,160,770 1,115,620 $ (873,248) $ (972,612) (1,090,715) (1,245,790) (1,310,892) (1,267,208) (1,160,770) (1,115,620) $ 15,498,171 15,616,400 16,024,008 16,629,084 17,014,243 16,000,110 16,849,796 18,271,802 5.63% 6.23% 6.81 7.49% 7.70% 7.92% 6.89% 6.11% Fiscal Year Ending Statutorily or contractually required contributions Less: Contributions in relation to the statutorily or contractually required Contribution contributions deficiency (excess) Covered Employee Payroll Contributions as a percentage of covered payroll December 31, 2015 $ December 31, 2016 December 31, 2017 December 31, 2018 December 31, 2019 December 31, 2020 December 31, 2021 December 31, 2022 10,105 10,642 8,612 7,768 12,191 12,039 12,464 18,354 $ (10,105) (10,642) (8,612) (7,768) (12,191) (12,039) (12,464) (18,354) $ $ 156,084 161,481 129,747 113,122 170,971 174,773 189,293 292,162 6.47% 6.59% 6.64% 6.87% 7.13% 6.89% 6.58% 6.28% LEOFF 2 Fiscal Year Ending Statutorily or contractually required contributions Less: Contributions in relation to the statutorily or contractually required contributions Covered Contribution Employee deficiency (excess) Payroll Contributions as a percentage of covered payroll December 31, 2015 December 31, 2016 December 31, 2017 December 31, 2018 December 31, 2019 December 31, 2020 December 31, 2021 December 31, 2022 $ 776,719 787,110 815,548 855,040 868,767 831,485 813,295 872,391 $ (776,719) (787,110) (815,548) (855,040) (868,767) (831,485) (813,295) (872,391) $ $ 15,380,541 15,586,296 15,860,571 16,132,860 16,611,112 16,054,647 16,265,695 17,522,336 5.05% 5.05% 5.14% 5.30% 5.23% 5.18% 5.00% 4.98% *Until a full 10-year trend is compiled, governments should present information only for those years of which information is available. 104 CITY OF TUKWILA: 2022 ACFR REQUIRED SUPPLEMENTAL INFORMATION FIREMEN'S PENSION TRUST FUND Schedule of Changes in the City's Net Pension Liability and Related Ratios Total Pension Liability 2014 2015 2016 2017 2018 2019 2020 2021 2022 Service cost - - - Interest 50,098 49,716 49,332 38,796 39,385 42,542 29,959 22,655 Changes of benefit terms - - - - Difference between expected & actual experience (2,442) (311,190) (2,810) 17,256 (31,990) 1,774 (220,445) Changes of assumptions - - (62,728) (177,772) (51,490) (3,148) 75,346 (76,289) Benefits payments, included refunds of employee contributions (61,863) (58,277) (59,988) (69,186) 17,700 (80,468) (60,172) (69,186) (58,330) Net change in total pension liability (11,765) (11,003) (384,574) (30,390) (162,882) (75,317) (52,768) 37,893 (332,409) Total pension liability -beginning 1,852,693 1,840,928 1,829,925 1,445,351 1,414,961 1,252,079 1,176,762 1,123,995 1,161,888 Total pension liability -ending (a) 1,840,928 1,829,925 1,445,351 1,414,961 1,252,079 1,176,762 1,123,994 1,161,888 829,479 Plan Fiduciary Net Position Contributions - employer 64,114 63,590 66,360 68,848 (139) 71,286 68,569 72,088 71,112 Contributions - employee - - Net investment income 1,805 2,667 7,988 39,157 (39,477) 27,770 34,948 31,875 (20,255) Benefit payments, including refunds of employee contributions (61,863) (58,277) (59,988) (69,186) 17,700 (80,468) (60,172) (69,186) (58,330) Administrative expense - (4,500) (4,500) (4,624) 1,124 - - Other - 2,716 - (500) Net change in plan fiduciary net position 4,056 3,480 9,860 34,195 (18,076) 18,588 43,345 34,777 (7,973) Plan fiduciary net position - beginning 1,408, 970 1,413, 026 1,416, 506 1,426, 366 1,460, 561 1,442,485 1,461, 073 1,504,419 1,539,196 Plan fiduciary net position - ending (b) 1,413,026 1,416,506 1,426,366 1,460,561 1,442,485 1,461,073 1,504,418 1,539,196 1,531,223 City's net pension liability - ending (a) - (b) 427,902 413,419 18,985 (45,600) (190,406) (284,311) (380,424) (377,308) (701,744) Plan fiduciary net position as a percent of total pension liability 76.76% 77.41% 98.69% 103.22% 115.21% 124.16% 133.85% 132.47% 184.60% Covered employee payroll - City net pension liability as a percent of covered employee payroll n/a n/a n/a n/a n/a n/a n/a n/a n/a 105 CITY OF TUKWILA: 2022 ACFR REQUIRED SUPPLEMENTAL INFORMATION Schedule of Employer Contributions Statutorily Determined Fiscal Year Ending Contribution Less: Contributions in Relation to the Statutorily Determined Contribution Contribution Deficiency Covered (Excess) Payroll Contribution as a Percentage of Covered Payroll December 31, 2012 December 31, 2013 December 31, 2014 December 31, 2015 December 31, 2016 December 31, 2017 December 31, 2018 December 31, 2019 December 31, 2020 December 31, 2021 December 31, 2022 52,249 56,962 64,114 63,590 66,360 64,223 52,249 56,962 64,114 63,690 66,360 68,848 (139) 71,286 68,569 72,088 71,112 Contributions are a portion of State Fire Insurance Premiums. (100) (4,625) 139 (71,286) (68,569) (72,088) (71,112) Schedule of Investment Returns Schedule of Investment Returns Annual money -weighted rate of return, net of investment expense 2013 0.17% 2014 0.13% 2015 0.19% 2016 0.56% 2017 2.75% 2018 -2.68% 2019 1.93% 2020 2.39% 2021 2.12% 2022 -2.61% n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 106 CITY OF TUKWILA: 2022 ACFR REQUIRED SUPPLEMENTAL INFORMATION City of Tukwila Schedule of Changes in Total OPEB Liability and Related Ratios LEOFF Plan 1 For the year ended December31, 2022 Last 10 Fiscal Years* 2018 2019 2020 2021 2022 Total OPEB liability- beginning $26,383,115 $14,694,242 $12,700,180 $ 7,622,718 $ 7,898,399 Serivce cost - Interest 469,303 471,554 462,935 204,469 154,176 Changes in benefit terms - - - Differences between expected and actual experience (3,780,437) (199,491) (5,203,755) (92,607) (1,163,334) Changes of assumptions (7,947,448) (1,896,319) 107,644 538,778 (131,930) Benefit Payments (430,291) (369,806) (444,286) (374,959) (379,240) Other changes - - - - - TotalOPEBliability- ending 14,694,242 12,700,180 7,622,718 7,898,399 6,378,071 Covered -employee payroll Total OPEB liability as a % of covered payroll n/a n/a n/a n/a n/a Notes to Schedule: * Until a full 10-year trend is compiled, only information for those years available is presented. No assets are accumulated in a trust that meets the criteria in paragraph 4 of GASB 75. 107 CITY OF TUKWILA: 2022 ACFR 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 or committed for expenditures for specific purposes. • Hotel/Motel Tax Fund — Established to account for the proceeds of a 1 % special excise tax on overnight lodging in Tukwila. This tax provides resources to support tourism development and promotion activities in Tukwila. • Drug Seizure Fund — Accounts for monies and proceeds from the sale of property seized during drug and felony investigations. These funds are legally required to be expended on drug and felony related police activities. Debt Service Funds Debt Service Funds account for the accumulation of resources for and the payment of principal and interest on general obligation and special assessment bonds. • Special Assessment Bonds Guaranty Fund — Holds reserve funds required under state law to provide a means of paying local improvement district (LID) bond debt service obligations in the event there are insufficient resources in the LID debt service fund. • Unlimited Tax General Obligation Debt Service Fund — Accounts for principal and interest on voter approved bonds issued to pay for the construction of public safety facilities including a justice center and fire stations and fire equipment and apparatus for 20 years. • Limited Tax General Obligation Debt Service Fund — Accounts for principal and interest payments on bonds for all debt issues except for voter approved bonds. Capital Project Funds Capital Project Funds account for the acquisition or development of major capital facilities, except those projects financed by proprietary funds. Sources of revenue to these funds include general obligation bond proceeds, federal and state grants, real estate excise taxes, and transfers from the General Fund. • Residential Street — Established in accordance with RCW 35A.37.010 to account for maintenance and improvement of the City's residential streets. Major sources of support are the State -levied tax on motor vehicle fuels distributed to Tukwila to be used for City street purposes, state and federal grants, and transfers in from the General Fund. • Land Acquisition, Recreation, and Park Development — Accounts for the acquisition of land, development of land, and construction of park facilities. • Urban Renewal — Established in 1988, this fund accounts for costs associated with property owned by the City that will be utilized for redevelopment or renewal purposes. 108 CITY OF TUKWILA: 2022 ACFR FUND FINANCIAL STATEMENTS AND SCHEDULES • General Government Improvements — This fund was established in 1992 to provide funding for minor capital improvements not related to parks, land acquisition, or major building replacements. • Fire Improvements — This fund is to be used for the acquisition of land, development of land and construction of fire facilities. Revenue for this fund comes primarily from fire impact fees. 109 CITY OF TUKWILA: 2022 ACFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON COMBINING BALANCE SHEET NON -MAJOR GOVERNMENTAL FUNDS DECEMBER 31, 2022 Total Total Total Total Special Revenue Debt Service Capital Project Governmental Funds Funds Funds Funds ASSETS: Cash and cash equivalents $ 2,421,749 $ 1,144,854 $ 5,823,315 $ 9,389,918 Taxes receivable 122,249 85,305 77,305 284,858 Due from other governmental units - - 116,347 116,347 Restricted Assets: Cash and cash equivalents 149,702 149,702 Capital assets held for resale - - 2,007,410 2,007,410 Total Assets 2,693,700 1,230,159 8,024,376 11,948,235 LIABILITIES AND FUND BALANCES: Current liabilities Accounts payable Accrued wages and benefits Customer deposit Total Liabilities Deferred inflows of resources Unavailable revenue -property tax Total Deferred Inflows of Resources Fund balances: Restricted Assigned Assigned - 1% arts Total Fund balances Total Liabilities and Fund Balances 38,325 3,118 14,618 221,493 1,359 32,277 259,817 4,476 46,895 56,061 255,128 311,189 77,182 77,182 77,182 77,182 2,637,639 1,152,976 2,783,609 4,752,475 233,164 6,574,225 4,752,475 233,164 2,637,639 1,152,976 7,769,248 11,559,864 $ 2,693,700 $ 1,230,159 $ 8,024,376 $ 11,948,235 110 CITY OF TUKWILA: 2022 ACFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NON -MAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED DECEMBER 31, 2022 Total Total Total Total Special Revenue Debt Service Capital Project Governmental Funds Funds Funds Funds REVENUES: Taxes $ 897,202 $ 4,455,157 $ 493,514 $ 5,845,873 Charges for services - - 762,269 762,269 Intergovernmental 44,409 - 825,102 869,511 Investment earnings 27,652 21,039 93,032 141,723 Miscellaneous 2,544 - - 2,544 Total Revenues 971,806 4,476,196 2,173,917 7,621,919 EXPENDITURES: Current: General government - 133,249 133,249 Public safety 317,100 - - 317,100 Transportation - 369,827 369,827 Natural and economic environment 326,707 - 31,103 357,810 Culture and recreation - 323,007 323,007 Debt service Principal 7,860,310 - 7,860,310 Interest 4,775,340 - 4,775,340 Capital Outlay - - 895,756 895,756 Total Expenditures 643,807 12,635,651 1,752,942 15,032,399 Excess (deficiency) of revenues Over (Under) Expenditures OTHER FINANCING SOURCES (USES): Transfers in Transfers out Gain/(loss) on sale of assets held for resale Total Other Financing Sources And Uses Net change in fund balances Fund balances - beginning Fund Balances - Ending 328,000 (8,159,455) 8,260,676 420,975 (7,410,480) 323,914 (3,226,996) 1,500,000 8,584,590 (3,226,996) 1,500,000 8,260,676 328,000 101,221 2,309,639 1,051,756 (1,403,082) 6,857,594 (982,107) (552,886) 8,751, 355 12,112,750 $ 2,637,639 $ 1,152,976 $ 7,769,248 $ 11,559,864 111 CITY OF TUKWILA: 2022 ACFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON COMBINING BALANCE SHEET NON -MAJOR SPECIAL REVENUE FUNDS DECEMBER 31, 2022 Total Hotel/Motel Tax Drug Seizure Special Revenue Funds ASSETS: Cash and cash equivalents $ 2,238,945 $ 182,804 $ 2,421,749 Taxes receivable 122,249 122,249 Restricted Assets: Cash and cash equivalents - 149,702 149,702 Total Assets 2,361,194 332,506 2,693,700 LIABILITIES AND FUND BALANCES: Current liabilities Accounts payable Accrued w ages and benefits Customer deposit Total Liabilities Fund balances: Restricted Total Fund balances 15,658 3,118 22,667 14,618 38,325 3,118 14,618 18,775 2,342,419 37,285 56,061 295,220 2,637,639 2,342,419 295,220 2,637,639 Total Liabilities and Fund Balances $ 2,361,194 $ 332,506 $ 2,693,700 112 CITY OF TUKWILA: 2022 ACFR 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, 2022 Total Hotel/Motel Tax Drug Seizure Special Revenue Funds REVENUES: Taxes $ 897,202 $ Intergovernmental Investment earnings 27,652 Miscellaneous 1,906 44,409 638 $ 897,202 44,409 27,652 2,544 Total Revenues 926,759 EXPENDITURES: Current: Public safety Natural and economic environment Total Expenditures Excess (deficiency) of revenues Over (Under) Expenditures 45,047 971,806 317,100 317,100 326,707 326,707 326,707 317,100 643,807 600,053 Net change in fund balances 600,053 Fund balances - beginning 1,742,366 Fund Balances - Ending (272,053) 328,000 (272,053) 328,000 567,273 2,309,639 $ 2,342,419 $ 295,220 $ 2,637,639 113 CITY OF TUKWILA: 2022 ACFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON COMBINING BALANCE SHEET NON -MAJOR DEBT SERVICE FUNDS DECEMBER 31, 2022 Special Assessment Bonds Guaranty Fund Unlinyted Tax General Obligation Debt Service Fund Limited Tax General Obligation Debt Service Fund Total Nonmajor Debt Service Funds ASSETS: Cash and cash equivalents Taxes receivable Total Assets LIABILITIES AND FUND BALANCES: Total Liabilities Deferred inflows of resources Unavailable revenue -property tax Total Deferred Inflows of Resources Fund balances: Restricted Total Fund balances $ 750,347 $ 394,507 85,305 $ 1,144,854 85,305 750,347 479,812 1,230,159 77,182 77,182 750,347 77,182 402,630 77,182 1,152,976 750,347 402,630 1,152,976 Total Liabilities and Fund Balances $ 750,347 $ 479,812 $ $ 1,230,159 114 CITY OF TUKWILA: 2022 ACFR 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, 2022 Special Assessment Bonds Guaranty Fund Unlimited Tax Limited Tax General Total Nonmajor General Obligation Obligation Debt Debt Service Debt Service Fund Service Fund Funds REVENUES: Taxes Investment earnings Total Revenues 11,884 $ 4,455,157 $ 9,155 $ 4,455,157 21,039 11,884 4,464,311 4,476,196 EXPENDITURES: Debt service Principal 1,780,000 Interest 2,594,975 6,080,310 2,180, 365 7,860,310 4,775,340 Total Expenditures 4,374,975 Excess (deficiency) of revenues Over (Under) Expenditures OTHER FINANCING SOURCES (USES): Transfers in Total Other Financing Sources And Uses 8,260,676 12,635,651 11,884 89,336 (8,260,676) (8,159,455) 8,260,676 8,260,676 Net change in fund balances 11,884 8,260,676 8,260,676 89,336 101,221 Fund balances - beginning 738,462 313,293 - 1,051,756 Fund Balances - Ending $ 750,347 $ 402,630 $ $ 1,152,976 115 CITY OF TUKWILA: 2022 ACFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON COMBINING BALANCE SHEET NON -MAJOR CAPITAL PROJECT FUNDS DECEMBER 31, 2022 Land Acq. General Total Nonmajor Residential Rec & Park Urban Government Fire Capital Project Street Development Renewal Improvements Improvements Funds ASSETS: Cash and cash equivalents Taxes receivable Due from other governmental units Restricted Assets: Capital assets held for resale Total Assets $ 694,577 41,081 116,347 $ 3,108,250 $ 1,404,242 $ 616,246 $ 36,224 - - 2,007,410 $ 5,823,315 77,305 116,347 2,007,410 852,005 3,144,473 3,411,652 616,246 8,024,376 LIABILITIES AND FUND BALANCES: Current liabilities Accounts payable 91,240 74,670 - 55,582 221,493 Accrued wages and benefits 1,359 - - - - 1,359 Customer deposit 25,000 - - 7,277 - 32,277 Total Liabilities 117,598 74,670 - 62,859 255,128 Fund balances: Restricted - 2,783,609 2,783,609 Assigned 734,407 53,030 3,411,652 553,386 4,752,475 Assigned - 1 % arts - 233,164 - - - 233,164 Total Fund balances 734,407 3,069,803 3,411,652 553,386 7,769,248 Total Liabilities and Fund Balances $ 852,005 $ 3,144,473 $ 3,411,652 $ 616,246 $ $ 8,024,376 116 CITY OF TUKWILA: 2022 ACFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NON -MAJOR CAPITAL PROJECT FUNDS FOR THE YEAR ENDED DECEMBER 31, 2022 Land Acq. General Total Nonmajor Residential Rec & Park Urban Government Fire Capital Project Street Development Renew al Improvements Improvements Funds REVENUES: Taxes $ $ 493,514 $ Charges for services 589,224 Intergovernmental 825,102 Investment earnings 11,064 46,330 Total Revenues EXPENDITURES: Current: General government Transportation Culture and recreation Natural and economic environment Capital Outlay Total Expenditures Excess (deficiency) of revenues Over (Under) Expenditures 27,036 $ $ $ 493,514 173,045 762,269 825,102 8,603 - 93,032 836,165 1,129,068 27,036 8,603 173,045 2,173,917 133,249 - 133,249 369,827 - - 369,827 323,007 - 323,007 31,103 31,103 757,303 138,453 - - 895,756 1,127,129 461,460 31,103 133,249 1,752,942 OTHER FINANCING SOURCES (USES): Transfers in Transfers out Gain/(loss) on sale of assets held for resat Total Other Financing Sources And Uses Net change in fund balances Fund balances - beginning Fund Balances - Ending (290,964) 667,608 (4,068) (124,647) 173,045 420,975 317,564 6,350 (500,000) (2,553,951) 1,500,000 323,914 (173,045) (3,226,996) 1,500, 000 317,564 (493,650) (1,053,951) (173,045) (1,403,082) 26,600 173,958 (1,058,018) (124,647) (982,107) 707,806 2,895,845 4,469,671 678,033 8,751,355 $ 734,407 $ 3,069,803 $ 3,411,652 $ 553,386 $ $ 7,769,248 117 CITY OF TUKWILA: 2022 ACFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL ARTERIAL STREET CAPITAL PROJECT FUND FOR THE YEAR ENDED DECEMBER 31, 2022 Variance With Original Final Final Budget Budget Budget Actual Positive (GAAP Basis) (GAAP Basis) Results (Negative) REVENUES: Taxes $ 1,600,000 $ 1,700,000 $ 2,685,927 $ 985,927 Intergovernmental 1,040,000 6,540,000 2,925,751 (3,614,249) Fire Impact Fees 161,000 161,000 486,594 325,594 Fines and Foreitures - - 9,687 9,687 Investment earnings 30,000 30,000 67,663 37,663 Miscellaneous 80,000 80,000 140,040 60,040 Total Revenues 2,911,000 8,511,000 6,315,663 (2,195,337) EXPENDITURES: Current: Transportation 2,116,273 2,128,099 2,373,757 (245,658) Capital outlay 1,279,000 7,179,000 3,389,600 3,789,400 Total Expenditures 3,395,273 9,307,099 5,763,357 3,543,742 Excess of Revenues And Expenditures (484,273) (796,099) 552,305 1,348,404 OTHER FINANCING SOURCES (USES): Transfers in 400,000 1,700,000 1,300,000 (400,000) Total Other Financing Sources And Uses 400,000 1,700,000 1,300,000 (400,000) Net change in fund balances (84,273) 903,901 1,852,305 948,404 Fund balances - beginning 942,956 3,682,187 3,682,187 Fund Balances - Ending $ 858,683 $ 4,586,088 $ 5,534,493 $ 948,404 118 CITY OF TUKWILA: 2022 ACFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL LOCAL IMPROVEMENT DISTRICT #33 DEBT SERVICE FUND FOR THE YEAR ENDED DECEMBER 31, 2022 Variance With Original Final Final Budget Budget Budget Actual Positive (GAAP Basis) (GAAP Basis) Results (Negative) REVENUES: Special Assessment $ 445,000 $ 445,000 $ 381,172 $ (63,828) Investment earnings 136,000 136,000 135,033 (967) Miscellaneous - - 501 501 Total Revenues 581,000 581,000 516,706 (64,294) EXPENDITURES: Debt service: Principal 445,000 445,000 375,000 70,000 Interest 183,563 183,563 161,063 22,501 Total Expenditures 628,563 628,563 536,063 92,501 Excess of Revenues And Expenditures Net change in fund balances (47,563) (47,563) (19,356) 28,207 (47,563) (47,563) Fund balances - beginning 644,785 (19,356) 28,207 601,809 601,809 Fund Balances - Ending $ 597,222 $ 554,246 $ 582,452 $ 28,207 119 CITY OF TUKWILA: 2022 ACFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL PUBLIC SAFETY PLAN CAPITAL PROJECT FUND FOR THE YEAR ENDED DECEMBER 31, 2022 Variance With Original Final Final Budget Budget Budget Actual Positive (GAAP Basis) (GAAP Basis) Results (Negative) REVENUES: Taxes $ 500,000 $ 500,000 $ 500,000 $ Fire Impact Fees 300,000 300,000 300,000 Investment earnings - - 6,522 6,522 Total Revenues 800,000 800,000 806,522 6,522 EXPENDITURES: Current: Public safety 219,000 1,519,000 998,578 520,423 Total Expenditures 219,000 1,519,000 998,578 520,423 Excess of Revenues And Expenditures OTHER FINANCING SOURCES (USES): Sales of capital assets Transfers in Transfers out Total Other Financing Sources And Uses Net change in fund balances 581,000 (719,000) (192,056) 526,944 5,000,000 300,000 (2,171,467) 3,128,533 5,000,000 1,400,000 (2,171,467) 4,228,533 1,106,248 1,106,248 (5,000,000) (293,752) 2,171,467 (3,122, 285) 3,709,533 3,509,533 Fund balances - beginning 3,885,056 Fund Balances - Ending 914,193 (2,595,340) 77,672 77,672 $ 7,594,589 $ 3,587,205 $ 991,865 $ (2,595,340) 120 CITY OF TUKWILA: 2022 ACFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL CITY FACILITIES CAPITAL PROJECT FUND FOR THE YEAR ENDED DECEMBER 31, 2022 Variance With Original Final Final Budget Budget Budget Actual Positive (GAAP Basis) (GAAP Basis) Results (Negative) REVENUES: Investment earnings Total Revenues EXPENDITURES: Current: General Government Capital outlay Total Expenditures Excess of Revenues And Expenditures OTHER FINANCING SOURCES (USES): Sales of capital assets Transfers in Total Other Financing Sources And Uses Net change in fund balances $ - $ $ 37,634 $ 37,634 37,634 37,634 126,051 3,925,000 2,452,261 (126,051) 1,472, 739 - 3,925,000 2,578,312 1,346,688 - (3,925,000) (2,540,678) 1,384,322 2,500,000 1,000,000 - (2,500,000) 1,000,000 - 3,500,000 1,000,000 (2,500,000) Fund balances - beginning 36,736 (425,000) 3,500,044 (1,540,678) 3,500,044 (1,115,678) Fund Balances - Ending $ 36,736 $ 3,075,044 $ 1,959,366 $ (1,115,678) 121 CITY OF TUKWILA: 2022 ACFR 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, 2022 Variance With Original Final Final Budget Budget Budget Actual Positive (GAAP Basis) (GAAP Basis) Results (Negative) REVENUES: Taxes $ 450,000 $ 450,000 $ 897,202 $ 447,202 Investment earnings 6,000 6,000 27,652 21,652 Miscellaneous - 1,906 1,906 Total Revenues 456,000 456,000 926,759 470,759 EXPENDITURES: Current: Natural and economic environment Total Expenditures Excess of Revenues And Expenditures 1,013,209 1,016,298 326,707 689,591 1,013,209 1,016,298 326,707 689,591 (557,209) (560,298) 600,053 1,160,351 Net change in fund balances (557,209) (560,298) 600,053 1,160,351 Fund balances - beginning 1,047,063 1,742,366 1,742,366 Fund Balances - Ending $ 489,854 $ 1,182,068 $ 2,342,419 $ 1,160,351 122 CITY OF TUKWILA: 2022 ACFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL DRUG SEIZURE SPECIAL REVENUE FUND FOR THE YEAR ENDED DECEMBER 31, 2022 Variance With Original Final Final Budget Budget Budget Actual Positive (GAAP Basis) (GAAP Basis) Results (Negative) REVENUES: Intergovernmental $ - $ - $ 44,409 $ 44,409 Investment earnings 500 500 - (500) Miscellaneous 70,000 70,000 638 (69,362) Total Revenues 70,500 70,500 45,047 (25,453) EXPENDITURES: Current: Public safety 40,000 145,000 317,100 (172,100) Capital outlay - 100,000 - 100,000 Total Expenditures 40,000 245,000 317,100 (72,100) Excess of Revenues And Expenditures 30,500 (174,500) (272,053) (97,553) Net change in fund balances 30,500 (174,500) (272,053) (97,553) Fund balances - beginning 193,743 567,273 567,273 Fund Balances - Ending $ 224,243 $ 392,773 $ 295,220 $ (97,553) 123 CITY OF TUKWILA: 2022 ACFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL RESIDENTIAL STREET CAPITAL PROJECTS FUND FOR THE YEAR ENDED DECEMBER 31, 2022 Variance With Original Final Final Budget Budget Budget Actual Positive (GAAP Basis) (GAAP Basis) Results (Negative) REVENUES: Intergovernmental $ 3,436,000 $ 3,436,000 $ 825,102 $ (2,610,898) Investment earnings 20,000 20,000 11,064 (8,936) Total Revenues 3,456,000 3,456,000 836,165 (2,619,835) EXPENDITURES: Current: Transportation Capital outlay Total Expenditures Excess of Revenues And Expenditures OTHER FINANCING SOURCES (USES): Transfers in Total Other Financing Sources And Uses 3,610,000 400,000 3,610,000 369,827 30,173 757,303 2,852,697 3,610,000 4,010,000 1,127,129 2,882,871 (154,000) (554,000) (290,964) 263,036 - 400,000 317,564 (82,436) - 400,000 317,564 (82,436) Net change in fund balances (154,000) (154,000) 26,600 180,600 Fund balances - beginning 334,810 707,806 707,806 Fund Balances - Ending $ 180,810 $ 553,806 $ 734,407 $ 180,600 124 CITY OF TUKWILA: 2022 ACFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL LAND & PARK ACQUISITION CAPITAL PROJECT FUND FOR THE YEAR ENDED DECEMBER 31, 2022 Variance With Original Final Final Budget Budget Budget Actual Positive (GAAP Basis) (GAAP Basis) Results (Negative) REVENUES: Taxes $ 304,000 $ 304,000 $ 493,514 $ 189,514 Charges for services 166,940 166,940 589,224 422,284 Investment earnings 5,000 5,000 46,330 41,330 Total Revenues 475,940 475,940 1,129,068 653,128 EXPENDITURES: Current: Culture and recreation 79,000 79,000 323,007 (244,007) Capital outlay 426,000 426,000 138,453 287,547 Total Expenditures 505,000 505,000 461,460 43,540 Excess of Revenues And Expenditures (29,060) (29,060) 667,608 696,668 OTHER FINANCING SOURCES (USES): Transfers in - 6,350 6,350 Transfers out - (500,000) (500,000) Total Other Financing Sources And Uses - (493,650) (493,650) Net change in fund balances Fund balances - beginning Fund Balances - Ending (29,060) 1,609,722 (522,710) 2,895,845 173,958 2,895,845 696,668 $ 1,580,662 $ 2,373,135 $ 3,069,803 $ 696,668 125 CITY OF TUKWILA: 2022 ACFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL URBAN RENEWAL CAPITAL PROJECT FUND FOR THE YEAR ENDED DECEMBER 31, 2022 Variance With Original Final Final Budget Budget Budget Actual Positive (GAAP Basis) (GAAP Basis) Results (Negative) REVENUES: Investment earnings $ 10,000 $ 10,000 $ 27,036 $ 17,036 Total Revenues 10,000 10,000 27,036 17,036 EXPENDITURES: Current: Natural and economic environment Total Expenditures Excess of Revenues And Expenditures OTHER FINANCING SOURCES (USES): Sales of capital assets Transfers out Total Other Financing Sources And Uses 10,000 10,000 31,103 (21,103) 10,000 10,000 31,103 (21,103) (4,068) (4,068) 1,850,000 (2,776,000) (926,000) 1,850,000 (3,186,000) (1,336,000) 1,500,000 (2,553,951) (1,053,951) (350,000) 632,049 282,049 Net change in fund balances (926,000) (1,336,000) (1,058,018) 277,982 Fund balances - beginning 1,010,169 2,462,261 4,469,671 2,007,410 Fund Balances - Ending $ 84,169 $ 1,126,261 $ 3,411,652 $ 2,285,392 126 CITY OF TUKWILA: 2022 ACFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL GENERAL GOVERNMENT IMPROVEMENTS CAPITAL PROJECT FUND FOR THE YEAR ENDED DECEMBER 31, 2022 Variance With Original Final Final Budget Budget Budget Actual Positive (GAAP Basis) (GAAP Basis) Results (Negative) REVENUES: Investment earnings $ 500 $ 500 $ 8,603 $ 8,103 Total Revenues 500 500 8,603 8,103 EXPENDITURES: Current: General Government 50,000 150,000 133,249 16,751 Capital outlay 150,000 150,000 - 150,000 Total Expenditures 200,000 300,000 133,249 166,751 Excess of Revenues And Expenditures (199,500) (299,500) (124,647) 174,853 Net change in fund balances (199,500) (299,500) (124,647) 174,853 Fund balances - beginning 560,521 678,033 678,033 Fund Balances - Ending $ 361,021 $ 378,533 $ 553,386 $ 174,853 127 CITY OF TUKWILA: 2022 ACFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL FIRE IMPROVEMENTS CAPITAL PROJECT FUND FOR THE YEAR ENDED DECEMBER 31, 2022 Variance With Original Final Final Budget Budget Budget Actual Positive (GAAP Basis) (GAAP Basis) Results (Negative) REVENUES: Charges for services $ 300,000 $ 300,000 $ 173,045 $ (126,955) Investment earnings 500 500 - (500) Total Revenues 300,500 300,500 173,045 (127,455) EXPENDITURES: Total Expenditures Excess of Revenues And Expenditures OTHER FINANCING SOURCES (USES): Transfers out Total Other Financing Sources And Uses 300,500 300,500 173,045 (127,455) (300,000) (300,000) (173,045) 126,955 (300,000) (300,000) (173,045) 126,955 Net change in fund balances 500 500 - (500) Fund balances - beginning 9,759 Fund Balances - Ending $ 10,259 $ 500 $ - $ (500) 128 CITY OF TUKWILA: 2022 ACFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL SPECIAL ASSESSMENT BONDS GUARANTY FUND FOR THE YEAR ENDED DECEMBER 31, 2022 Variance With Original Final Final Budget Budget Budget Actual Positive (GAAP Basis) (GAAP Basis) Results (Negative) REVENUES: Investment earnings $ 3,000 $ 3,000 $ 11,884 $ 8,884 Total Revenues 3,000 3,000 11,884 8,884 EXPENDITURES: Total Expenditures Excess of Revenues And Expenditures 3,000 3,000 11,884 8,884 Net change in fund balances 3,000 3,000 11,884 8,884 Fund balances - beginning 722,137 738,462 738,462 Fund Balances - Ending $ 725,137 $ 741,462 $ 750,347 $ 8,884 129 CITY OF TUKWILA: 2022 ACFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL UNLIMITED TAX GENERAL OBLIGATION DEBT SERVICE FUND FOR THE YEAR ENDED DECEMBER 31, 2022 Variance With Original Final Final Budget Budget Budget Actual Positive (GAAP Basis) (GAAP Basis) Results (Negative) REVENUES: Taxes $ 4,375,000 $ 4,375,000 $ 4,455,157 $ 80,157 Investment earnings - - 9,155 9,155 Total Revenues 4,375,000 4,375,000 4,464,311 89,311 EXPENDITURES: Debt service: Principal Interest Total Expenditures Excess of Revenues And Expenditures 1,780,000 2,594,975 1,780,000 2,594,975 1,780,000 2,594,975 4,374,975 4,374,975 4,374,975 25 25 89,336 89,311 Net change in fund balances 25 25 89,336 89,311 Fund balances - beginning 78,364 313,293 313,293 Fund Balances - Ending $ 78,389 $ 313,318 $ 402,630 $ 89,311 130 CITY OF TUKWILA: 2022 ACFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL LIMITED TAX GENERAL OBLIGATION DEBT SERVICE FUND FOR THE YEAR ENDED DECEMBER 31, 2022 Variance With Original Final Final Budget Budget Budget Actual Positive (GAAP Basis) (GAAP Basis) Results (Negative) REVENUES: Investment earnings $ 2,000 $ 2,000 $ - $ (2,000) Miscellaneous 377,030 377,030 - (377,030) Total Revenues 379,030 379,030 - (379,030) EXPENDITURES: Debt service: Principal Interest Total Expenditures Excess of Revenues And Expenditures 6,264,916 2,378,088 6,264,916 2,378,088 6,080,310 2,180, 365 184,606 197,723 8,643,004 8,643,004 8,260,676 382,329 (8,263,974) (8,263,974) (8,260,676) 3,299 OTHER FINANCING SOURCES (USES): Transfers in 8,265,974 8,265,974 8,260,676 (5,299) Total Other Financing Sources And Uses 8,265,974 8,265,974 8,260,676 (5,299) Net change in fund balances 2,000 2,000 - (2,000) Fund balances - beginning 23,630 Fund Balances - Ending $ 25,630 $ 2,000 $ - $ (2,000) 131 CITY OF TUKWILA: 2022 ACFR FUND FINANCIAL STATEMENTS AND SCHEDULES NON -MAJOR INTERNAL SERVICE FUNDS Internal Service Funds The City's internal service funds are used to account for the financing of special services performed by designated departments within the City of Tukwila for the benefit of other departments within the City. The funds provide services then generate revenue by billing the department for which the service was provided. • Equipment Rental Fund — Accounts for the costs of maintaining and replacing all City vehicles and auxiliary equipment. All equipment costs, including depreciation, are factors in calculating the rates which are charged to each user department. • Insurance Fund Active Employees — Accounts for the costs of the City's self -insured medical plan. Medical and dental costs for covered employees are charged to the respective departments. All premiums, medical and dental costs and ancillary charges are included. • Insurance Fund LEOFF 1 Retirees — Accounts for the costs of the City's self -insured medical plan for LEOFF 1 retirees. Medical and dental costs for covered employees are charged to the respective departments, either the Police Department or the Fire Department. All premiums, medical and dental costs and ancillary charges are included. 132 CITY OF TUKWILA: 2022 ACFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS DECEMBER 31, 2022 Total Insurance - Insurance - Internal Equipment Active Leoff I Service Rental Employees Retirees Funds ASSETS: Current assets: Cash and cash equivalents $ 4,335,255 $ 3,895,419 $ 254,476 $ 8,485,150 Receivables 19,917 24,090 44,007 Inventory of materials and supplies 59,642 59,642 Total Current Assets 4,414,814 3,919,509 254,476 8,588,799 Noncurrent Assets: Net Pension asset 116,162 - 116,162 Capital Assets: Machinery and equipment 19,500,092 19,500,092 Leased Assets 583,965 - 583,965 Less: accumulated depreciation (12,789,967) - (12,789,967) Total Capital Assets (Net Of A/D) 7,294,091 7,294,091 Total Noncurrent Assets 7,410,253 7,410,253 Total Assets 11,825,067 3,919,509 254,476 15,999,052 Deferred Outflow s of Resources Deferred outflow pension earnings 115,132 - - 115,132 Total Deferred Outflows Of Resources 115,132 115,132 LIABILITIES: Current liabilities: Accounts payable 186,747 42,312 10,422 239,481 Accrued w ages and benefits 31,394 31,394 Accrued interest payable 1,622 1,622 Lease liability due w ithin one year 103,097 103,097 aaims incurred but not reported - 602,200 27,800 630,000 Total Current Liabilities 322,860 644,512 38,222 1,005,594 Noncurrent liabilities: Reserve for unreported claims - 903,300 41,700 945,000 Lease liability due in more than one year 452,573 452,573 Net pension liability 67,769 67,769 Total Noncurrent Liabilities 520,341 903,300 41,700 1,465,341 Total Liabilities 843,201 1,547,812 79,922 2,470,935 Deferred Inflows of Resources Deferred inflow pension earnings 136,219 136,219 Total Deferred Inflows Of Resources 136,219 136,219 NET POSITION: Investment in capital assets 6,738,421 6,738,421 Unrestricted 4,222,357 2,371,697 174,554 6,768,609 Total Net Position $ 10,960,778 $ 2,371,697 $ 174,554 $ 13,507,030 133 CITY OF TUKWILA: 2022 ACFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION INTERNAL SERVICE FUNDS FOR THE YEAR ENDED DECEMBER 31, 2022 Total Insurance - Insurance- Internal Equipment Active Leoff I Service Rental Employees Retirees Funds OPERATING REVENUES: Charges for services Other operating revenue Total Operating Revenue OPERATING EXPENSES: Operations & maintenance Administrative & general Taxes Depreciation Total Operating Expenses Operating Income (Loss) NON -OPERATING REVENUE (EXPENSE): Investment earnings Gain (loss) on disposal of capital assets Interest Expense Total Non -Operating Revenue (Expense) Income (Loss) $ 2,569,471 2,080 $ 7,552,637 188,835 $ 303,512 $ 10,425,620 190,916 2,571,551 7,741,472 303,512 10,616,536 1,915,471 333,707 12 1,473,963 5,846,523 180,609 385,976 12,040 8,147,971 526,356 12 1,473,963 3,723,153 6,027,132 398,016 10,148,302 (1,151,602) 1,714,340 64,384 169,183 (10,481) 59,565 (94,504) 468,234 4,800 128,749 169,183 (10,481) 223,086 59,565 4,800 287,451 (928,516) 1,773,905 (89,704) 755,685 Change In Net Position (928,516) 1,773,905 (89,704) 755,685 Net position beginning of year 11,889,295 597,792 264,258 12,751,345 Net Position end of year $ 10,960,778 $ 2,371,697 $ 174,554 $ 13,507,030 134 CITY OF TUKWILA: 2022 ACFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS FOR THE FISCAL YEAR ENDED DECEMBER 31, 2022 Page 1 of 2 Total Insurance - Insurance- Internal Equipment Active Leoff I Service Rental Employees Retirees Funds CASH FLOWS FROM OPERATING ACTIVITIES: Cash received from users Cash paid to suppliers Cash paid for taxes Cash paid to, or on behalf of, employees Interfund activity- payments to other funds Other cash received (paid) Net Cash Provided (Used) By Operating Activities $ 2,549,609 $ 7,741,472 $ 303,512 $ 10,594,593 (1,191,565) (11,076) (7,595) (1,210,236) (12) (12) (638,406) (5,788,010) (384,226) (6,810,643) (333,707) (180,609) (12,040) (526,356) 2,025 - 2,025 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Net Cash Provided (Used) By Non - Capital Financing Activities CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Proceed from sale of equipment Purchase of capital asset Proceeds from lease financing Interest payment on debt Net Cash Provided (Used) For Capital And Related Financing Activities CASH FLOW FROM INVESTING ACTIVITIES: Interest received Net Cash Provided (Used) In Investing Activities Net Increase (Decrease) In Cash And Cash Equivalents Cash and cash equivalents -beginning of year Cash And Cash Equivalents -End Of Year Cash at end of year consists of: Cash and cash equivalents Total Cash 387,943 1,761,776 (100,349) 2,049,371 169,183 (1,614,044) 555,670 (8,859) 169,183 (1,614,044) 555,670 (8,859) (898,051) - (898,051) 64,384 59,565 4,800 128,749 64,384 59,565 4,800 128,749 (445,724) 1,821,342 4,780,978 2,074,077 (95,549) 1,280,069 350,025 7,205,081 $ 4,335,255 $ 3,895,419 $ 254,476 $ 8,485,150 $ 4,335,255 $ 3,895,419 $ 254,476 8,485,150 $ 4,335,255 $ 3,895,419 $ 254,476 $ 8,485,150 135 CITY OF TUKWILA: 2022 ACFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS FOR THE FISCAL YEAR ENDED DECEMBER 31, 2022 Page 2 of 2 Total Insurance - Insurance- Internal Equipment Active Leoff I Service Rental Employees Retirees Funds RECONCILIATION OF NET OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES Operating Income (Loss) Adjustments to reconcile operating income to net cash Provided (used) by operating activities: Depreciation Asset (increases) decreases: Accounts receivable Inventory Deferred outflow of resources (increase) decrease Liability increases (decreases): Accounts payable Wages and benefits payable Deferred inflow of resources increase (decrease) Total Adjustments Net Cash Provided (Used) By Operating Activities SCHEDULE OF NONCASH INVESTING, CAPITAL AND FINANCING ACTIVITIES $ (1,151,602) $ 1,714,340 $ (94,504) $ 468,234 1,473,963 (19,917) (32,148) (84,233) 155,315 10,680 35,885 1,473,963 (19,917) (32,148) (84,233) 47,437 (5,845) 196,907 10,680 35,885 1,539,545 47,437 (5,845) 1,581,137 $ 387,943 $ 1,761,776 $ (100,349) $ 2,049,371 Total Non Cash Investing, Capital And Financing Activities 136 CITY OF TUKWILA: 2022 ACFR STATISTICAL SECTION City of Tukwila STATISTICAL SECTION December 31, 2022 Financial Trends Information Financial trends schedules are intended to provide users with information to assist them in understanding and assessing how the City's financial position has changed over time. Schedule 1 Net Position by Component 138 Schedule 2 Changes in Net Position 140 Schedule 3 Fund Balances, Governmental Funds 142 Schedule 4 Changes in Fund Balances of Governmental Funds 144 Schedule 5 General Governmental Tax Revenues by Source 146 Revenue Capacity Information The objective of providing revenue capacity information is to help users understand and assess the factors affecting the City's ability to generate its most significant local source revenues. Schedule 6 Property Tax Levies and Collections 147 Schedule 7 Assessed and Estimated Actual Value of Taxable Property 148 Schedule 8 Property Tax Rates -Direct and Overlapping Governments 149 Schedule 9 Principal Property Taxpayers 150 Schedule 10 Retail Sales Tax Collections by Sector 152 Schedule 11 Sales Tax Rate Direct and Overlapping Governments 154 Debt Capacity Information Debt capacity information is intended to assist users to understand and assess the City's current levels of outstanding debt and ability to issue additional debt in the future. Schedule 12 Ratios of Outstanding Debt by Type 156 Schedule 13 Ratios of General Bonded Debt Outstanding 158 Schedule 14 Computation of Direct and Overlapping Debt 159 Schedule 15 Legal Debt Margin Information 160 Demographic and Economic Information These Schedules offer demographic and economic information to assist users in understanding certain aspects of the environment within which the City operates and to provide information that facilitates comparisons of financial statement information over time and across governmental units. Schedule 16 Demographic Statistics 162 Schedule 17 Principal Employers 163 Operating Information These Schedules contain service and infrastructure data to help users understand how the information in the City's financial report relates to the services the City provides and the activities it performs. Schedule 18 Full-time Equivalent Employee by Department 164 Schedule 19 Operating Indicators by Function 165 Schedule 20 Capital Assets by Function 166 137 CITY OF TUKWILA: 2022 ACFR STATISTICAL SECTION CITY OF TUKWILA SCHEDULE 1 NET POSITION BY COMPONENT(a) LAST TEN FISCAL YEARS Page 1 of 2 2013 2014 2015 2016 Governmental activities: Net investment in capital assets $ 207,660,389 $ 191,081,461 $ 191,331,156 $ 193,113,026 Restricted 3,480,002 3,973,726 5,446,074 8,996,183 Unrestricted 26,981,105 25,009,212 16,125,592 15,809,945 Total governmental activities net position $ 238,121,496 $ 220,064,399 $ 212,902,822 $ 217,919,155 Business -type activities: Net investment in capital assets $ 55,955,595 $ 57,677,764 $ 59,483,424 $ 60,807,030 Restricted 430,444 430,444 - - Unrestricted 12,964,539 13,839,529 14,658,912 17,240,620 Total business -type activities net position $ 69,350,577 $ 71,947,736 $ 74,142,335 $ 78,047,650 Primary government: Net investment in capital assets $ 263,615,984 $ 248,759,225 $ 250,814,581 $ 253,920,056 Restricted 3,910,445 4,404,170 5,446,074 8,996,183 Unrestricted 39,945,644 38,848,741 30,784,504 33,050,565 Total primary government net position $ 307,472,073 $ 292,012,136 $ 287,045,158 $ 295,966,804 Notes: (a) All amounts are reported on the accrual basis Source: Tukw ila Finance Department 138 CITY OF TUKWILA: 2022 ACFR STATISTICAL SECTION Page 2 of 2 2017 2018 2019 2020 2021 2022 $ 199,328,694 $ 201,997,812 $ 201,649,103 $ 201,887,136 $197,839,607 $199,057,806 13,480,068 16,962,377 18,692,944 17,784,194 25,280,715 28,835,065 11,366,545 12,407,297 17,772,776 22,003,200 32,169,525 35,098,137 $ 224,175,306 $ 231,367,487 $ 238,114,823 $ 241,674,530 $255,289,848 $262,991,008 $ 65,355,778 $ 68,680,695 $ 68,362,159 $ 69,238,961 $ 72,559,196 $ 75,308,549 17,425,401 18,988,782 22,104,664 25,231,660 27,093,876 26,056,751 $ 82,781,179 $ 87,669,477 $ 90,466,823 $ 94,470,621 $ 99,653,072 $101,365,300 $ 264,684,471 $ 270,678,507 $ 270,011,262 $ 271,126,097 $270,398,803 $274,366,355 13,480,068 16,962,377 18,692,944 17,784,194 25,280,715 28,835,065 28,791,946 31,396,080 39,877,441 47,234,860 59,263,401 61,154,888 $ 306,956,485 $ 319,036,964 $ 328,581,646 $ 336,145,151 $354,942,919 $364,356,308 139 CITY OF TUKWILA: 2022 ACFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 2 CHANGES IN NET POSITION (a) Page 1 of 2 2013 2014 2016 Expenses Governmental Activities (b) General government Public safety Physical environment Transportation Culture and recreation Natural and economic environment Interest on Long Term Debt Total Governmental Activities Business Type Activities Water/Sewer Utility Foster Golf Course Surface Water Utility Total Business Type Activities Total Primary Government Expenses Program Revenues Governmental Activities (b) Charges for Services General government Public safety Physical environment Transportation Culture and recreation Natural and economic environment Operating Grants and Contributions Capital Grants and Contributions Total Governmental Activities Rogram Revenues Business Type Activities Charges for Services Water/Sewer Utility Foster Golf Course Surface Water Utility Operating Grants and Contributions Capital Grants and Contributions Total Business Type Activities Program Revenues Total Primary Government Rogram Revenues Net (Expense)/Revenue Governmental Activities Business Type Activities Total Primary Government Net Expense General Revenues and Other Changes in Net Position Governmental Activities Taxes Property Tax Retail Sales and Use Tax Natural Gas Use Tax HoteVMotel Tax Utility Tax Interfund Utility Taxes Business Tax Excise Tax Unrestricted Investment Earnings Miscellaneous Transfers Total Governmental Activities Business Type Activities Transfers Total Business Type Activities Total Primary Government $ 10,195,049 25,938,946 2,610,591 7,658,280 5,635,347 5,209,954 1,038,851 $ 10,289,399 29,292,587 11,668,098 2,479,533 5,336,659 5,716,091 1,204,771 $ 8,042,254 29,403,206 2,611,297 11,069,605 5,125,227 5,782,907 1,033,440 $ 9,662,207 31,418,713 2,554,259 11,188,189 5,431, 324 4,410,841 1,075, 729 58,287,017 65,987,138 10,421,064 1,707,993 2,563,132 12,752,125 1,945,789 3,310,716 63,067,935 65,741,262 13,186,236 2,086,586 4,147,974 13,984,368 2,077,536 4,088,360 14,692,189 18,008,631 19,420,796 20,150,264 $ 72,979,205 $ 83,995,769 $ 82,488,731 $ 85,891,525 $ 1,495,438 $ 3,858,862 871,919 970,594 27,407 196,506 287,956 8,425 744,014 2,793,185 2,786,178 726,869 3,289,818 2,563,002 16,947,529 8,053,435 26,450,258 19,170,879 13,146,131 14,308,945 1,404,264 1,406,440 3,913,184 4,168,313 338,943 1,548,280 18, 802, 521 21, 431, 978 $ 3,794,134 1,754,856 206,065 644,283 3,348,802 893,470 6,431,537 $ 3,742,937 4,130, 701 464 454,525 1,140, 558 2,434,546 1,079,020 5,000,942 17,073,146 17,983,694 15,572,709 1,482,288 5,286,233 2,039,890 24,381,122 15,661,118 1,426,385 5,875,343 25,000 767,732 23,755,578 45,252,779 40,602,857 41,454,268 41,739,272 (31,836,759) (46,816,260) 4,110,332 3,423,348 $ (27,726,426) $(43,392,912) (45,994,789) 4,960,326 (47,757,566) 3,605,314 $ (41,034,463) $ (44,152,252) $ 14,510,241 $ 14,870,621 16,316,398 17,105,322 204,457 526,832 596,781 3,879,992 3,855,544 1,686,859 1,851,013 2,570,111 2,555,999 2,745,475 3,512,894 102,486 444,282 2,166,215 1,915,031 1,060,650 (600,000) 45,769,716 45,769,716 (1,056,843) (1,060,650) (1,056,843) $ 44,712,873 (1,060,650) $ 44,709,066 $ 14,320,085 $ 14,562,501 19,334,152 18,908,190 677,971 4,019,288 2,061,098 2,749,140 5,321,281 475,345 2,124,185 51,082,546 710,267 4,045,916 2,146,515 2,716,257 6,508,665 559,733 2,915,859 (300,000) 52,773,904 600,000 600,000 $ 51,682,546 $ 52,773,904 Change in Net Position Before Special Item 16,986,447 1,316,154 Special item - - Change in Net Position 16,986,447 1,316,154 Governmental Activities 13,932,957 13,932,957 Business Type Activities 3,053,489 3,049,682 Total Primary Government $ 16,982,640 Notes: (a) All amounts are reported on the accrual basis (b) Governmental activity classifications changed beginning with the 2019 Annual report Source: Tukw ila Finance Department 10,648,083 8,621,652 (1,995,000) (956,798) 8,653,083 7,664,855 (2,703,772) 3,830,958 4,023,348 5,260,326 $ 1,319,576 $ 9,091,285 140 CITY OF TUKWILA: 2022 ACFR STATISTICAL SECTION Page 2 of 2 2017 2018 ■ 2019 2020 2022 $ 9,835,290 $ 10,763,025 $ 11,105,119 $ 10,792,736 $ 12,227,100 $ 14,314,373 31,190,347 17,097,372 27,402,906 25,090,275 24,840,036 35,503,893 2,545,144 2,645,577 - - - 12, 236, 551 15, 871, 018 18, 442, 230 12,757,271 12,760,187 13, 805, 883 5,582,038 5,591,213 6,076,219 5,522,907 4,814,194 6,147,791 4,523,596 4,411,719 4,515,516 4,426,553 5,062,727 5,598,778 2,481,559 2,748,854 3,009,268 4,927,364 4,443,170 4,303,091 68,394,526 59,128,779 70,551,259 63,517,106 64,147,415 79,673,810 14,305,425 14,861,448 15,957,397 14,111,179 14,227,351 15,457,196 1,989,972 2,091,981 2,128,042 1,908,023 2,175,885 2,415,066 4,209,325 4,464,319 6,166,267 4,991,110 4,327,427 5,945,272 20,504,722 21,417,748 24,251,707 21,010,311 20,730,662 23,817,535 $ 88,899,247 $ 80,546,527 $ 94,802,966 $ 84,527,417 $ 84,878,077 j $ 103,491,345 $ 4,144,986 $ 5,989,077 $ 6,565,339 $ 7,481,748 $ 6,342,118 $ 9,058,384 1,540,863 1,970,331 2,543,188 2,037,444 1,972,485 2,334,165 2,206,908 2,261,577 106,958 890,982 371,646 1,257,366 1,315,740 1,415,827 1,914,795 654,085 456,787 968,738 2,270,759 3,099,692 3,533,733 2,671,049 2,416,865 2,349,959 2,445,998 1,733,308 794,371 1,567,067 1,796,702 2,771,490 6,126,880 9,942,224 2,578,046 1,415,931 1,289,853 3,469,016 20,052,136 26,412,036 18,036,429 16,718,306 14,646,454 22,209,119 16,580,965 17,203,158 17,831,892 14,857,183 16,227,339 16,627,591 1,313,871 1,563,320 1,610,152 1,906,355 2,268,908 2,205,500 6,200,589 6,417,368 6,797,683 6,956,702 7,029,502 7,411,371 8,435 54,697 228,755 121,754 61,630 363,540 834,392 767,504 280,570 1,405,464 1,709,678 174,795 24,938,251 26,006,046 26,749,053 25,247,459 27,297,057 26,782,796 44,990,386 52,418,082 44,785,482 41,965,764 41,943,511 48,991,915 (48,342,390) (32,716,743) (52,514,829) (46,798,800) (49,500,960) (57,464,691) 4,433,529 4,588,299 2,497,346 4,237,148 6,566,394 2,965,262 $ (43,908,861) $ (28,128,44b) $ (50,017,483) $ (42,561,653) $ (42,934,566) $ (54,499,429) $ 17,667,590 $ 18,008,738 $ 18,390,051 $ 19,839,475 $ 21,275,135 $ 21,852,111 18, 807, 201 20, 603, 617 20, 687, 748 17,102, 061 20,148,103 21, 977,177 736,784 833,990 819,095 292,358 540,329 897,202 4,175,013 3,866,859 3,644,470 4,286,358 3,605,314 3,949,799 2,265,747 2,334,522 2,358,608 2,153,573 2,322,420 2,404,685 2,698,352 1,246,798 1,299,085 407,877 2,074,857 2,683,592 5,380,662 5,091,447 5,336,066 3,323,814 7,400,723 6,609,500 838,630 1,508,334 1,247,003 680,094 297,953 (107,223) 2,328,565 2,240,045 5,377,939 2,039,548 4,067,501 3,645,976 (300,000) (300,000) 102,100 233,350 1,383,944 1,253,033 54,598,542 55,434,351 59,262,164 50,358,508 63,116,277 65,165,852 300,000 300,000 300,000 (233,500) (1,383,944) (1,253,033) 300,000 300,000 300,000 (233,500) (1,383,944) (1,253,033) $ 54,898,542 $ 55,734,351 $ 59,562,164 $ 50,125,008 $ 61,732,334 $ 63,912,819 10, 989, 681 27, 605, 906 9,544,681 7,563,355 18,797,768 9,413,389 10,989,681 27,605,906 9,544,681 7,563,355 18,797,768 9,413,389 5,016,337 6,256,152 22,717,608 3,559,708 13,615,317 7,701,161 3,905,314 4,733,529 4,888,299 4,003,648 5,182,451 1,712,229 $ 8,921,651 $ 10,989,681 $ 27,605,906 $ 7,563,355 $ 18,797,768 $ 9,413,389 141 CITY OF TUKWILA: 2022 ACFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 3 FUND BALANCES, GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (MODIFIED ACCRUAL BASIS OF ACCOUNTING) Page 1 of 2 2013 2014 2015 2016 General Fund Nonspendable $ 1,743,362 $ 1,544,022 $ 1,340,914 $ 1,141,484 Assigned 225,000 5,771,471 6,078,648 6,277,929 Unassigned 15,317,624 10,181,057 10,911,244 11,612,330 Total general fund $ 17,285,986 $ 17,496,550 $ 18,330,806 $ 19,031,744 All other governmental funds Nonspendable $ - $ 7,370,000 $ 7,645,000 $ 7,645,000 Restricted 3,480,001 3,973,726 5,446,074 45,986,463 Assigned 4,510,623 4,076,803 7,221,870 3,389,139 Unassigned (1,566,175) (1,360,218) - - Total all other governmental funds $ 6,424,449 $ 14,060,311 $ 20,312,943 $ 57,020,602 $70 0 $60 $50 $40 $30 $20 $10 $- Fund Balances 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 tGeneral Fund —op—All Other Governmental Funds 142 CITY OF TUKWILA: 2022 ACFR STATISTICAL SECTION Page 2 of 2 2017 2018 2019 2020 2021 2022 $ 927,373 $ 718,190 $ 508,447 $ 292,498 $ 70,139 $ - 105,000 181,078 397,736 660,425 491,143 527,347 18,040,352 19,718,745 19,233,980 18,469,248 23,180,241 22,464,009 $ 19,072,725 $ 20,618,013 $ 20,140,163 $ 19,422,170 $ 23,741,523 $ 22,991,356 $ - $ - $ - $ $ $ - 51,236,443 32,531,984 48,694,929 5,483,785 7,231,746 8,448,840 10,282,709 11,819,299 17, 705,991 15,110,785 12,742,716 12,179, 200 $ 61,519,152 $ 44,351,283 $ 66,400,920 $ 20,594,569 $ 19,974,462 $ 20,628,040 143 CITY OF TUKWILA: 2022 ACFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 4 CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS ta) LAST TEN FISCAL YEARS page 1 of 2 2013 2014 2015 2016 Revenues Taxes $42,402,070 $44,441,783 $48,548,116 $ 49,588,492 Licenses and Permits 2,013,875 2,114,638 2,242,256 2,129,221 Intergovernmental 7,190,325 14,298,126 11,839,883 10,067,413 Charges for Services 3,747,646 3,838,531 3,935,248 3,911,473 Fines and Forfeitures 242,638 264,934 261,457 318,459 Investment Income 151,911 479,219 475,345 541,299 Special Assessments 2,788,350 701,723 650,415 542,180 Miscellaneous 427,368 354,395 332,268 957,158 Total Revenues 58,964,183 66,493,348 68,284,989 68,055,695 Expenditures General Government 9,303,742 7,505,173 Public Safety 25,720,884 27,254,312 Physical Environment 1,935,895 1,807,993 Transportation 3,111,493 5,820,601 Natural and Economic Environment 5,224,964 5,226,832 Culture and Recreation 4,386,392 4,680,651 Debt Service Principal 5,024,991 2,288,988 Interest 1,162,649 961,457 Capital Outlay 5,854,962 10,150,912 7,708,394 29,035,165 1,935,228 5,792,668 5,832,384 4,350,052 2,480,507 1,125,609 11,426,274 9,405,989 29,366,198 1,955,031 5,238,468 4,493,210 4,543,339 2,602,782 1,093,584 8,358,450 Total Expenditures 61,725,970 65,696,921 69,686,279 67,057,051 Excess (Deficiency) of Revenues (2,761,786) 796,428 (1,401,291) 998,643 Over (Under) Expenditures Other Financing Sources (Uses) Transfers In 20,918,983 7,300,080 5,633,846 4,025,831 Transfers In - Assessment 2,788,350 - Transfers Out (23,301,516) (7,900,080) (5,933,846) (4,325,831) Lease financing - - Sale of Capital Assets 5,493 - General Obligation Bonds Issued 1,000,000 3,850,000 8,075,000 32,990,000 Refunding of General Obligation Bonds - - LID Bonds Assessment 6,687,500 - Premium on General Obligation Debt - 309,758 3,719,954 Total Other Financing Sources (Uses) 8,098,809 3,250,000 8,084,758 36,409,954 Change in Fund Balance Before Special Item 5,337,023 4,046,428 6,683,467 37,408,597 Special Item - (1,995,000) (956,798) Net Change in Fund Balances $ 5,337,023 $ 2,051,428 $ 5,726,669 $ 37,408,597 Ratio of Debt Service Expenditures To Total Non -Capital Expenditures (a) All amounts are reported on the modified - accrual basis Source: Tukw ila Finance Department 11.07% 6.70% 6.30% 6.30% 144 CITY OF TUKWILA: 2022 ACFR STATISTICAL SECTION page 2 of 2 2017 2018 2019 2020 2021 2022 $51,655,075 $ 51,988,591 $ 52,686,247 $ 47,560,434 $ 57,281,494 $ 60,381,870 2,749,137 4,875,454 5,554,899 6,738,212 5,341,662 5,376,555 12,739,774 15,919,377 7,495,781 6,647,587 7,603,637 10,391,018 5,767,228 6,801,719 7,442,843 3,540,211 3,213,504 4,295,828 325,216 291,604 245,748 209,551 302,358 495,511 826,864 1,538,534 1,258,493 680,094 297,953 (247,462) 478,838 415,660 515,266 377,132 375,889 381,172 942,784 407,151 515,923 560,804 632,087 483,127 75,484,915 82,238,092 9,585,551 30,899,412 1,733,400 6,532,195 4,614,027 4,664,129 3,713,928 2,603,869 14,761,715 10,491,432 34,331,520 1,805,457 10,015,938 4,686,528 4,852,138 4,092,196 2,977,523 47,601,490 75,715,199 66,314,025 8,777,726 32,586,415 9,717,429 4,752,115 5,328,994 4,238,521 4,060,086 51,397,863 8,620,827 31,792,303 6,346,303 4,659,575 4,551,092 2,486,461 5,445,543 48,834,614 75,048,583 81,557,620 8,455,383 32,513,800 6,612,101 5,917,214 4,614,034 3,000,560 5,097,555 10, 381,479 9,311, 851 36,170, 093 7,421, 513 5,977,731 5,172, 376 8,375,416 4,951,500 7,125,461 79,108,226 120,854,221 (3,623,311) (38,616,129) 6,354,496 (6,654,496) (100,000) 10,456,000 7,742,669 3,119,513 (8,042,669) 18,365,000 356,839 1,809,036 120, 859,149 112,736, 719 (45,143,950) (46,422,694) 7,233,686 76,592,127 84,505,941 (1,543,543) (2,948,321) 8,867,680 9,904,409 14,544,789 (7,131,586) (8,634,330) (8,520,466) (13,291,756) - 98,699 - 1,129,345 1,500,000 60,600,000 1,995,000 6,720,500 - - (2,330,000) (3,991,000) - 6,013,637 10,412,839 6,789,528 22,993,549 (15,622,580) 66,715,737 21,571,787 (101,650) (46,524,344) 5,242,789 3,699,245 2,851,732 (96,589) $ 6,789,528 $ (15,622,580) $ 21,571,787 $(46,524,344) $ 3,699,245 $ (96,589) 9.80% 9.65% 11.95% 12.41 % 12.23% 17.22% 145 CITY OF TUKWILA: 2022 ACFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 5 GENERAL GOVERNMENTAL TAX REVENUES BY SOURCE LAST TEN FISCAL YEARS Fiscal Year Property(a) Sales & Use Utility(b) Excise Business Other Total Taxes 2013 14,510,241 16,316,398 3,879,992 2,745,475 2,570,111 2,418,148 42,440,365 2014 14,870,621 17,105,322 3,855,544 3,512,894 2,555,999 2,447,794 44,348,175 2015 14,320,085 19,334,152 4,019,288 5,321,280 2,749,140 2,739,070 48,483,015 2016 14,562,501 18,908,190 4,045,916 6,508,665 2,716,257 2,856,782 49,598,312 2017 17,667,590 18,807,201 4,175,013 5,380,662 2,698,352 3,002,531 51,731,348 2018 18,008,738 20,603,617 3,866,859 5,091,447 1,246,798 2,334,522 51,151,981 2019 18,390,051 20,687,748 3,644,470 5,336,066 1,299,085 3,177,703 52,535,122 2020 19,839,475 17,102,061 4,286,358 3,323,814 407,877 2,445,931 47,405,516 2021 21,275,135 20,148,103 3,605,314 7,400,723 2,074,857 2,862,749 57,366,880 2022 21,852,111 21,977,177 3,949,799 6,609,500 2,683,592 3,301,887 60,374,066 Change 2013-2022 50.6% 34.7% 1.8% 140.7% 4.4% 36.5% 42.3% Notes: (a) Beginning in 2017, property tax includes a voter approved excess levy for public safety facilities. (b) Utility taxes enacted beginning in 2003 for electric, natural gas, cable and telephone utilities are assessed at rates of 6.0%. A utility tax was added in 2009 for solid waste and recycling and is currently assessed at a 16.0% rate. Source: Tukw ila Finance Department $60 c $50 $40 - $30 - $20 $10 $0 Tax Revenue by Source 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 ❑ Other ❑ Business ❑ Excise ■ Utility ❑ Sales and Use Tax • Property 146 CITY OF TUKWILA: 2022 ACFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 6 PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS Collected Within the Fiscal Year of the Levy Total Collections to Date Collections in Fiscal Taxes Levied for Subsequent Year Fiscal Year Amount % of Levy Years Amount % of Levy 2013 13,740,076 13,549,525 98.61% 190,550 13,740,076 100.00% 2014 14,047,317 13,916,718 99.07% 130,599 14,047,317 100.00% 2015 14,245,846 14,113,739 99.07% 124,991 14,238,729 99.95% 2016 14,516,623 14,375,358 99.03% 140,384 14,515,742 99.99% 2017` 17,551,561 17,262,965 98.36% 288,596 17,551,561 100.00% 2018 18,006,677 17,844,087 99.10% 136,345 17,980,432 99.85% 2019 18,796,071 18,648,149 99.21% 134,186 18,782,335 99.93% 2020 20,044,161 19,705,761 98.31% 305,964 20,011,724 99.84% 2021 21,049,466 20,796,453 98.80% 178,190 20,974,643 99.64% 2022 21,727,448 21,466,630 98.80% 21,466,630 98.80% *First year of collection on 2016 voter -approved levy for Public Safety Ran Source: King County Office of Finance Property Tax Levies and Collections 21 0 18 • Taxes Levied 15 11111 for Fiscal Year 12 9 -• I I I I I I I •Collected 6 _Within the 3 - 111111111 the Levy Fiscal ear of 2013 2014 2015 2016 2017* 2018 2019 2020 2021 2022 147 CITY OF TUKWILA: 2022 ACFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 7 ASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY LAST TEN FISCAL YEARS Fiscal Year Real Property Personal Property Public Utilities Total Direct Total Assessed Value Tax Rate 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 3,824,448,044 4,146,952,417 4,409,931,075 4,763,568,175 5,242,264,743 5,823,887,746 6,430,058,373 6,809,349,200 6,890,134,092 7,806,820,227 779,103,146 744,616,273 810,422,092 849,695,435 780,938,084 678,435,063 760,313,756 826,589,881 882,202,099 954,687,537 152,822,498 162,510,057 174,971,951 150,386,219 161,740,436 171,517,113 214,068,301 247,118,481 238,555,841 208,944,784 Note: "Real, personal, and state public service property have been assessed at 100% of the Source: King County Department of Assessments 4,756,373,688 5,054,078,747 5,395,325,118 5,763,649,829 6,184,943,263 6,673,839,922 7,404,440,430 7,883,057,562 8,010,892,032 8,970,452,548 estimated value. 2.97799 2.84188 2.71073 3.05735 2.91864 2.81805 2.73416 2.67733 2.72071 2.45234 0 2 $10,000 $9,000 $8,000 $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $- Assessed Value By Type ■ ■ ■ 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Public Utilities ■ Personal Property ■ Real Property 148 CITY OF TUKWILA: 2022 ACFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 8 PROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS (PER $1,000 OF ASSESSED VALUATION) LAST TEN FISCAL YEARS CITY OF TUKWILA Central Puget Sound Fynergency Tukw ila Tukw ila Pool Regional General Special King Port of Medical School Dist Flood Metropolitan Hospital Transit Fiscal Year Levy jmina" Total WA State County18> Seattle Service #406 Control Park District District #1 Authority Total 2013 2.97799 2.97799 2.47044 2.08129 0.21533 0.33500 5.89098 0.15369 0.14944 0.50000 - 14.77416 2014 2.84188 2.84188 2.28514 1.84798 0.18885 0.30217 5.50160 0.13860 0.14962 0.50000 - 13.75584 2015 2.71073 - 2.71073 2.16898 1.95741 0.16954 0.28235 5.22858 0.12980 0.14853 0.50000 13.29592 2016 2.58592 0.47143 3.05735 2.03205 1.83412 0.15334 0.26305 5.36954 0.11740 0.15653 0.50089 0.25000 13.48427 2017 2.46285 0.45579 2.91864 2.91820 1.73925 0.13518 0.23940 5.17356 0.10708 0.15513 0.45689 0.22745 14.07078 2018 2.39148 0.42657 2.81805 2.62922 1.60359 0.12266 0.21762 3.39103 0.09660 0.15767 0.41673 0.20700 11.66017 2019 2.26293 0.47123 2.73416 3.02799 1.59993 0.11944 0.26500 3.42786 0.09199 0.15341 0.40069 0.19937 12.01984 2020 2.17985 0.49748 2.67733 3.08823 1.60421 0.11984 0.26499 3.78886 0.08909 0.15102 0.38511 0.19709 12.36577 2021 2.14677 0.57394 2.72071 2.81695 1.56491 0.11258 0.24841 4.21764 0.08146 0.15223 0.35434 0.18409 12.45332 2022 1.94728 0.50506 2.45234 2.31104 1.36024 0.09429 0.20922 3.69839 0.06717 0.15033 0.29817 0.15576 10.79695 Note: (a) Includes IGng County Library District tax and Ferry Source: King County Department of Assessments $3.20000 $3.00000 $2.80000 $2.60000 $2.40000 $2.20000 $2.00000 Direct Property Tax Rates 1 1 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 149 CITY OF TUKWILA: 2022 ACFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 9 PRINCIPAL PROPERTY TAXPAYERS CURRENT YEAR AND NINE YEARS AGO Type of Business Percent of Percent of 2022 Total 2013 Total 2022 Assessed Assessed 2013 Assessed Assessed Valuation Valuee) Valuation Value" Boeing Airplane company $ 447,566,300 4.99% $ 422,762,422 8.89% Property Tax Resources LLC Commercial Properties 212,202,500 2.37% Segale Properties Commercial Properties 185,579,700 2.07% 165,317,953 3.48% Rologis Real Estate Development 155,729,800 1.74% LIT Industrial LTD Parternership Commercial Properties 154,890,800 1.73% Sabey Corporation Real Estate Development 137,988,200 1.54% 0.00% Westfield Property Department Stores 126,758,191 1.41% 0.00% LIT Kent Valley Commercial Properties 109,254,600 1.22% BKM Management Company Commercial Properties 92,836,400 1.03% KIR Tukw ila Credit Union 91,780,200 1.02% 82,015,900 1.72% WEA Southcenter LLC Department Stores 298,510,135 6.28% E Property Tax Dept Commercial Properties 119,869,800 2.52% Qw est Corporation (US West Communications) Telephone Utility 78,499,861 1.65% CWWA Tukw ila 1 LLC Investment Roperty 40,938,100 0.86% Costco Wholesale Cash & Carry Warehouse 37,164,419 0.78% Sea-Tuk Warehouse LLC Food Distribution 34,302,000 0.72% Wig Properties LLC (JC Penny) Department Stores 33,924,982 0.71% $ 1,714,586,691 19.11% $ 1,313,305,572 27.61% Notes: (a) In 2022 the total assessed property value in the City of Tukwila was $ 8,970,452,548 (b) In 2013 the total assessed property value in the City of Tukwila was $ 4,756,373,688 Source: King County Department of Assessments 150 CITY OF TUKWILA: 2022 ACFR STATISTICAL SECTION 151 CITY OF TUKWILA: 2022 ACFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 10 RETAIL SALES TAX COLLECTIONS BY SECTOR LAST TEN FISCAL YEARS page 1 of 2 Major Industry Sector 2013 2014 2015 2016 Construction and Contracting $ 1,212,594 $ 829,073 $ 1,255,650 $ 1,383,624 Finance, Insurance & Real Estate 174,705 141,010 163,161 175,060 Manufacturing 386,964 322,189 281,501 269,117 Transportation, Communications & Utilities 475,688 549,126 743,746 746,115 Wholesale - Durable/Non-durable Goods 1,108,771 1,592,613 2,016,722 1,295,141 Retail Trade - General Merchandise 2,154,523 2,137,256 2,205,778 2,202,158 Retail Trade - Home Furnishings/Electronics 1,405,274 1,431,965 1,527,377 1,623,926 Retail Trade - Miscellaneous 1,870,200 1,973,478 1,954,150 2,032,967 Retail Trade - aothing & Accessories 2,070,198 2,013,796 2,159,647 2,089,128 Retail Trade - Restaurants 1,529,101 1,611,860 1,703,187 1,751,724 Retail Trade - Automotive/Gas 690,691 765,765 825,143 743,468 Retail Trade - Building Materials 565,734 600,610 683,485 733,928 Service Industries - Business 968,996 1,073,511 1,265,789 1,467,620 Service Industries - Hotels 502,721 562,130 626,822 650,270 Service Industries - Other 246,802 274,497 273,514 253,089 All Other Categories 525,133 468,547 978,142 845,209 Total Retail Sales Tax Collections $ 15,888,089 $ 16,347,426 $ 18,663,814 $ 18,262,544 Notes: By State law, the City of Tukwila is prohibited from reporting individual sales tax payers. Sources: Tukw ila Finance Department and Washington State Department of Revenue. 152 CITY OF TUKWILA: 2022 ACFR STATISTICAL SECTION page 2 of 2 2017 2018 2019 2020 2021 2022 $ 1,413,773 $ 1,623,112 $ 2,218,910 $ 2,389,360 $ 1,664,634 $ 1,704,697 125,978 143,696 65,075 112,453 126,652 130,194 177,788 262,700 238,694 221,232 222,561 223,090 721,413 1,016,226 1,055,296 789,886 905,716 1,057,456 1,176,868 1,309,170 1,153,607 1,101,801 1,292,657 1,355,512 2,131,267 2,187,854 2,167,481 1,836,829 1,886,826 1,739,575 1,613,643 1,649,843 1,715,419 1,419,767 1,866,419 1,875,690 2,077,239 2,131,804 2,089,854 1,994,491 2,897,074 2,856,649 2,066,858 2,084,482 1,996,280 1,186,857 1,920,971 1,837,386 1,886,139 2,009,051 2,080,421 1,273,300 1,815,023 2,160,843 800,580 1,385,284 1,063,607 560,743 743,240 837,554 805,324 813,656 835,211 996,994 1,080,480 1,080,097 1,436,825 2,051,035 2,039,153 1,684,693 1,767,313 1,980,165 650,332 717,341 744,823 251,581 473,028 775,911 267,544 394,128 346,020 340,104 373,547 391,768 812,656 115,128 106,610 150,053 143,845 843,726 $ 18,164,227 $ 19,894,510 $ 19,916,461 $ 16,310,144 $ 19,179,986 $ 20,850,313 153 CITY OF TUKWILA: 2022 ACFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 11 SALES TAX RATE DIRECT AND OVERLAPPING GOVERNMENTS LAST TEN FISCAL YEARS 2013 2014 2015 2016 2017(b) 2018 2019 2020 2021(e) 2022 BASIC SALES TAX RATES 0) City of Tukw ila 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 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.35% 0.35% Regional Transit Authority 0.90% 0.90% 0.90% 0.90% 0.90% 1.40% 1.40% 1.40% 1.40% 1.40% Metro 0.90% 0.90% 0.90% 0.90% 0.90% 0.90% 0.90% 0.90% 0.90% 0.90% Criminal Justice 0.10% 0.10% 0.10% 0.10% 0.10% 0.10% 0.10% 0.10% 0.10% 0.10% Department of Revenue 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% Administration Fee Total Basic Combined Sales Tax Rate 9.50% 9.50% 9.50% 9.50% 9.50% 10.00% 10.00% 10.00% 10.10% 10.10% Notes: (a) Effective July 1, 2003, all retail sales, leases and transfers of motor vehicles are subject to the additional sales tax of three -tenths of one percent (.003). The funds are used to finance transportation improvements. (b) Effective April 1, 2017, the Regional Transit Authority Tax increased five -tenths of one percent (.005), to one and four -tenths of one percent (.014). The tax will be used to expand and coordinate light -rail, commuter -rail, and express bus service, and improve access to transit facilities in King, Pierce, and Snohomish Counties. () Effective January 1, 2021, sales and use tax within all of King County, except for Seattle, increased one -tenth of one percent (001), to three and five tenths of one percent (0035). The tax will be used for affordable housing and realted services. Source: Washington State Department of Revenue Local Sales and Use Tax Rates. 154 CITY OF TUKWILA: 2022 ACFR STATISTICAL SECTION 155 CITY OF TUKWILA: 2022 ACFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 12 RATIOS OF OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS Page 1 of 2 2013 2014 2015 2016 2017 GOVERNM ENTAL ACTIVITIES General Obligation Bonds (c) $ 21,727,609 $ 23,851,376 $ 30,084,437 $ 64,589,264 $ 69,576,786 Special Assessment (d) 6,687,500 6,687,500 6,082,500 5,412,500 4,805,000 Total Governmental Activities 28,415,109 30,538,876 36,166,937 70,001,764 74,381,786 BUSINESS -TYPE ACTIVITIES Revenue Bonds 3,075,000 2,580,000 1,742,527 1,597,704 1,454,422 Public Works Trust Fund Loans 6,063,071 5,742,866 5,646,458 5,046,900 4,447,522 Total Business -Type Activities 9,138,071 8,322,866 7,388,985 6,644,604 5,901,944 TOTAL PRIMARY GOVERNMENT(a) $ 37,553,180 $ 38,861,742 $ 43,555,922 $ 76,646,368 $ 80,283,729 Population (b) 19,765 19,920 19,300 19,540 19,660 Per Capita Personal Income (b) $ 66,692 $ 72,696 $ 76,226 $ 79,323 $ 84,598 Percentage of Personal Income 2.85% 2.68% 2.96% 4.95% 4.83% Debt Per Capita $ 1,900 $ 1,951 $ 2,257 $ 3,923 $ 4,084 Notes: (a) Details regarding the City's outstanding debt can be found in the Notes to the Financial Statements section. (b) Reference SCHEDULE 16, Demographic Statistics, for population and personal income data. (c) Includes amounts Due to Other Governments. (d) Special assessment debt was issued in 2013 for the Klickitat Urban Access Project. *** Data not available at time of publication. Sources: U.S. Census Bureau WA State Office of Financial Management City of Tukw ila Finance Department $180 $160 $140 $120 $100 $80 $60 $40 $20 $0 Total Debt 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 156 CITY OF TUKWILA: 2022 ACFR STATISTICAL SECTION Page 2 of 2 2018 2019 2020 2021 2022 $ 85,625,504 $ 147,210,840 $ 144,037,716 $ 143,233,473 $ 134,569,428 4,320,000 3,910,000 3,430,000 3,060,000 2,685,000 89,945, 504 151,120, 840 147,467, 716 146,293,473 137,254,428 1,304,763 1,154,027 997,413 840,235 677,704 3,848,055 3,248,587 2,649,119 2,075,702 1,476,234 5,152,818 4,402,614 3,646,532 2,915,937 2,153,938 $ 95,098,322 $ 155,523,454 $ 151,114,248 $ 149,209,410 $ 139,408,366 19,800 20,930 21,360 21,798 $ 88,308 $ 92,026 $ 96,647 $ 108,212 5.44% 8.07% 7.32% 6.33% $ 4,803 $ 7,431 $ 7,075 $ 6,845 $ 22,620 6,163 157 CITY OF TUKWILA: 2022 ACFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 13 RATIOS OF GENERAL BONDED DEBT OUTSTANDING LAST TEN FISCAL YEARS Fiscal Year Population Assessed Value Ratio of Net Net Special Less Debt Bonded Debt Bonded Gross Bonded Assessment Service Net Bonded to Assessed Debt per Debt Debt(a) Funds(b) Debt Value Capita 2013 19,765 $ 4,756,373,688 $ 21,727,609 $ 6,687,500 $ 696,346 $ 21,031,263 0.44% $ 1,064 2014 19,920 5,054,078,747 23,851,376 6,687,500 1,687,497 28,851,379 0.57% 1,448 2015 19,300 5,395,325,118 30,084,437 6,082,500 1,910,940 34,255,997 0.63% 1,775 2016 19,540 5,763,649,829 64,589,264 5,412,500 1,962,497 68,039,267 1.18% 3,482 2017 19,660 6,155,826,776 69,576,786 4,805,000 1,855,519 72,526,267 1.18% 3,689 2018 19,800 6,685,919,176 85,625,504 4,320,000 1,903,729 88,041,775 1.32% 4,447 2019 20,930 6,673,839,922 147,210,840 3,910,000 1,995,748 149,125,092 2.23% 7,125 2020 21,360 7,883,057,562 144,037,716 3,430,000 1,353,344 146,114,372 1.85% 6,841 2021 21,798 8,010,892,032 143,233,473 3,060,000 1,653,564 144,639,909 1.81% 6,635 2022 22,620 8,970,452,548 134,569,428 2,685,000 1,727,306 135,527,122 1.51% 5,991 Note: (a) Special assessment debt was issued in 2013 for the Klickitat Urban Access Project. (b) Includes externally restricted fund balance available for debt service payment. Sources: U.S. Census Bureau State of Washington Office of Financial Management King County Department of Assessments Tukw ila Finance Department $160 0 $140 2 $120 $100 $80 $60 $40 $20 $0 Net Bonded Debt 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 158 CITY OF TUKWILA: 2022 ACFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 14 COMPUTATION OF DIRECT AND OVERLAPPING DEBT AS OF DECEMBER 31, 2022 Jurisdiction General Percentage Estimated Obligation Debt Applicable to Applicable to Outstanding Tukw ila(1) Tukw ila Direct: City of Tukw ila Overlapping: King County King County Library Port of Seattle Tukw ila School District #406 Total Overlapping Debt: $ 138,025,081 564,752,000 28,812,125 336,890,000 70,620,441 100.00% $ 138,025,081 6,268,747 521,499 3,739,479 70,479,200 1,001,074,566 81,008,926 Total Direct and Overlapping Debt: $ 1,139,099,647 $ 219,034,007 Sources: King County Office of Finance King County Office of Assessments (1) The percentage of overlapping debt applicable is estimated using taxable county assessed property values. 2 C 0 $160 $140 $120 $100 $80 $60 $40 $20 Direct and Overlapping Debt ■ City of Tukwila ■ King County ❑ King County Library • Port of Seattle ■ Tukwila School District 159 CITY OF TUKWILA: 2022 ACFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 15 LEGAL DEBT MARGIN INFORMATION LAST TEN FISCAL YEARS Page 1 of 2 2013 2014 2015 2016 Debt Limit Total net debt applicable to limit Legal debt margin Total net debt applicable to the limit as a percentage of debt limit Assessed Value as of December 31, 2022 Debt Limit (7.5% of assessed value) Debt applicable to limit: General obligation bonds Other long-term debt Less: Amount set aside for repayment of general obligation debt and contracts payable Total net debt applicable to limit $ 348, 689, 348 $ 356, 728, 027 $ 379, 055, 906 $ 432, 273, 737 25, 752, 600 21, 727, 609 23, 288, 621 60, 208, 532 $ 322, 936, 748 $ 335, 000, 418 $ 355, 767, 285 $ 372, 065, 205 7.39% 6.09% $ 8, 970, 452, 548 672, 783, 941 141,383,534 531,400,407 141,383,534 Legal debt margin $ 531,400,407 Source: Tukwila Finance Department 6.14% 13.93% 160 CITY OF TUKWILA: 2022 ACFR STATISTICAL SECTION Page 2 of 2 2017 2018 2019 2020 2021 2022 $ 404, 649, 384 $ 461, 687, 008 $ 500, 537, 994 $ 591, 229, 317 $ 600, 816, 902 $ 672, 783, 941 63, 662, 386 79, 701, 909 135, 668, 490 136, 578, 098 136,149, 662 141, 383, 534 $ 375, 326, 470 $ 396, 558,104 $ 369, 794, 206 $ 452, 046,114 $ 462,151, 827 $ 531, 400, 407 7.25% 14.11% 26.12% 23.54% 23.08% 21.01% 161 CITY OF TUKWILA: 2022 ACFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 16 DEMOGRAPHIC STATISTICS LAST TEN FISCAL YEARS Per Capita Personal Number of Number of Tukw ila School Fiscal Personal Income (b) Single -Family Multi -Family District Unemployment Year Population Income la) (in thousands) Homes Units Enrollment Rate (°) 2013 19,765 66,692 1,318,167 3,915 4,094 2,882 5.2% 2014 19,920 72,696 1,448,104 3,920 4,103 2,978 4.1% 2015 19,300 76,226 1,471,162 3,940 4,103 2,910 4.5% 2016 19,540 79,323 1,549,971 3,969 4,103 2,873 4.2% 2017 19,660 84,598 1,663,197 3,995 4,103 2,961 3.5% 2018 19,800 88,308 1,748,498 4,025 4,667 3,059 3.1% 2019 20,930 92,026 1,926,104 4,235 4,732 2,862 2.3% 2020 21,360 96,647 2,064,380 4,245 4,816 2,763 7.7% 2021 21,798 108,212 2,358,805 4,250 4,912 2,594 4.5% 2022 22,620 *** *** 4,269 4,912 2,595 2.8% Notes: (a) Per Capita Personal Income data shown is for King County. Specific data for City of Tukwila is not available. (b) Personal Income estimates are calculated by multiplying Tukwila population by the Per Capita Personal Income estimates for Tukwila and are based on a revised methodology that provides for more accuracy. See also Footnote (a). (c) Unemployment rates are listed and estimated using the census -share method, reported as of December 31 each year. *** Data not available at time of publication. Sources: Tukw ila Planning Division, Department of Community Development State of Washington Office of Financial Management Work Force Development Council of Seattle - King County (Unemployment Data) Tukw ila School District #406 US Bureau of Economic Analysis 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% Unemployment Rate 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 162 CITY OF TUKWILA: 2022 ACFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 17 PRINCIPAL EMPLOYERS CURRENT YEAR AND NINE YEARS AGO Name of Company/Employer Product or Business 2022 Full & Part -Time Employment (e) Rank Percentage of Total City Employees Rank 2013 Full & Percentage of Part -Time Total City Employment (b) Employees Boeing Employee's Credit Union KC Dept of Natural Resources Boeing Company Prime Now LLC King County Housing Authority Nordstrom, Inc Costco Wholesale Corp Cascade Behavioral Hospital LLC Amazon.Com Services LLC Sound King County Metro Group Health Cooperative Red Dot Corporation Macy's United Parcel Service Hartung Glass Industries Inc Sub -total - Major Employers All Other Employment TOTAL EMPLOYMENT Credit Union Government Aircraft Manufacturing Electronic Shopping Housing Assistance Department Stores Warehouse Club Healthcare E Commerce Healthcare Transit Data Ctr/Lab/Pharmacy/Mfg. Heater/air Conditioning Equipment Department Stores Postal Delivery Service Manufacturing Source: 0) Washington State Department of Revenue - Business Licenses (b) Tukw ila Finance Department - Business Licenses 1,063 1 3.76% 701 2 2.48% 587 3 2.08% 569 4 2.02% 519 5 1.84% 465 6 1.65% 419 7 1.48% 325 8 1.15% 315 9 1.12% 288 10 1.02% 5,251 22,986 28,237 4 1 6 3 2 5 7 8 9 10 566 1.44% 0.00% 7,799 19.80% 0.00% 0.00% 523 1.33% 727 1.85% 0.00% 0.00% 0.00% 800 2.03% 561 1.42% 447 1.13% 382 0.97% 329 0.84% 275 0.70% 12,409 26,983 39,392 163 CITY OF TUKWILA: 2022 ACFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 18 FULL TIME EQUIVALENT EMPLOYEE BY DEPARTMENT LAST TEN FISCAL YEARS 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 DEPARTM ENT Administrative Services (a), (b) - - - - - - 10.00 10.00 24.00 24.00 Council 8.00 8.00 8.00 8.00 8.00 8.00 8.00 8.00 8.00 8.00 Mayor (a)' (b) 16.75 20.00 19.00 16.00 16.00 13.00 10.00 10.00 5.00 5.00 Human Resources (a) 4.00 4.00 4.00 4.00 4.00 4.00 Finance (c) 12.00 12.00 12.00 12.00 11.00 11.00 12.00 12.00 12.00 13.00 Recreation 16.25 16.00 16.75 17.25 16.25 16.00 16.25 16.50 14.25 15.00 Community Development 22.13 21.63 21.00 23.75 23.00 25.00 24.00 22.00 29.00 28.75 Court 9.00 9.10 8.10 11.00 11.00 11.00 11.00 10.25 10.65 10.65 Police 87.50 89.00 93.00 93.75 92.75 97.00 98.00 84.00 86.00 81.00 Fire 67.00 67.00 70.00 71.00 72.00 73.00 66.00 64.00 61.00 64.00 Information Technology (b) 7.00 6.00 6.00 7.00 9.00 9.00 9.00 7.00 Public Works 31.00 31.00 32.00 32.00 27.00 27.00 27.20 22.00 27.00 24.00 Parks 6.00 7.00 7.00 8.00 8.00 9.00 9.00 7.00 9.75 9.75 Street 12.50 11.50 10.00 12.00 11.50 11.50 11.50 7.50 12.00 10.00 Water 7.00 7.00 6.00 7.00 7.50 7.50 7.40 7.50 6.00 6.00 Sewer 2.00 2.00 2.00 2.00 4.50 4.50 4.40 3.50 3.00 4.00 Golf 9.25 8.25 8.25 7.75 8.75 9.00 8.75 8.00 9.75 10.50 Surface Water 8.00 8.00 9.00 9.00 11.50 11.50 12.50 12.50 7.00 8.00 Equipment Rental 5.00 5.00 5.00 5.00 5.00 5.00 5.00 3.00 5.00 5.00 Metropolitan Park District Pool (d) 2.00 2.00 2.00 - - - TOTAL 332.38 334.48 339.10 346.50 346.75 352.00 350.00 314.75 329.40 326.65 Notes: Based on filled positions not budgeted positions. (a) Administrative Services includes Human Resources, Community Services and Engagement (previously reported in the Mayor's Office), and Admin Services Administration as of 2019. (b) Administrative Services includes City Clerk (previously reported in the Mayor's Office) and Information Technology (previously reported as a separate department). (c) Finance added a temporary full-time position specific to ARPA compliance. Position expires when funds are fully spent. (d) On September 12, 2011, the Board of Commissioners approved the formation of the Tukwila Metropolitan Park District (MPD) Pool. For the comprehensive annual financial report years of 2011 and 2012, the MPD Pool was treated as a discretely presented component unit. In 2013 and 2014, the MPD presented as a blended component unit. Effective in 2015, the MPD is no longer a component unit. Sources: Tukw ila Finance Department 164 CITY OF TUKWILA: 2022 ACFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 19 OPERATING INDICATORS BY FUNCTION LAST TEN FISCAL YEARS 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 FUNCTION Police Number of Calls for Service 31,355 29,840 32,946 34,229 33,123 33,288 32,465 30,079 31,338 34,345 Fire Number of Responses 4,604 5,156 5,549 5,754 5,840 5,734 5,724 5,284 6,869 7,527 Total Fire Loss $343,495 $2,738,080 $1,926,944 $2,821,016 $1,142,486 $527,687 $742,362 $3,187,074 $12,317,319 $1,482,921 Total Inspections 3,389 3,850 2,331 1,860 1,951 2 7 5 927 611 Parks and Recreation Gass Participants 52,319 45,514 68,970 64,782 83,030 73,906 78,435 27,741 26,000 38,407 Community Ctr Admissions 114,748 132,397 136,984 141,218 143,872 143,160 175,311 24,804 20,726 38,507 Rounds of Golf Rayed 47,757 47,267 51,017 47,595 43,568 49,357 50,561 58,028 64,203 58,856 Pool Attendance 71,233 79,537 - - Street Niles 79 79 79 79 79 79 79 79 79 79 Hours Maintaining 16,767 8,627 4,716 4,836 4,936 5,120 5,028 3,764 2,866 3,548 Signalized Intersections 62 62 62 64 66 74 68 74 74 74 Hours Maintaining 8,815 3,012 2,408 2,135 2,986 2,415 2,701 1,810 2,113 2,393 Water Utility Services Total Customers 2,118 2,126 2,145 2,160 2,176 2,185 2,195 2,205 2,215 2,208 Total GallonsfWater(in thousands) 645,982 668,740 697,147 655,472 697,210 672,700 618,194 543,468 597,831 605,637 Sanitary Sewer Total Customers 1,742 1,752 1,775 1,789 1,808 1,836 1,845 1,860 1,872 1,876 Surface Water Total Customers 5,226 5,239 5,242 5,249 5,282 5,286 5,289 5,261 5,278 5,282 Licenses Business Licenses 1,877 2,208 2,220 1,909 2,120 2,078 1,976 2,132 2,218 2,322 Outside Contractors 1,132 1,216 1,215 945 1,437 1,319 1,688 2,081 2,532 2,719 Perm its Building Permits 374 347 277 311 348 381 371 262 266 262 Mechanical Pernts 221 216 154 192 198 169 193 165 166 173 Electrical Permits 1,337 1,223 1,119 1,175 1,047 1,046 1,059 875 928 933 Plumbing Permits 167 184 140 185 165 161 176 133 138 121 Public Works Permits 155 152 163 175 136 152 153 249 242 257 Libraries Number of Libraries 2 2 2 2 2 2 2 2 2 2 Total Circulation 313,571 284,667 214,520 184,492 157,168 180,155 151,578 125,609 132,695 157,962 Sources: Tukw ila Departments, King County Library System 165 CITY OF TUKWILA: 2022 ACFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 20 CAPITAL ASSETS BY FUNCTION LAST TEN FISCAL YEARS 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 FUNCTION General Government Total City Area (Square Miles) Public Safety Police: Number of Vehicle Units 9.63 9.63 9.63 9.63 9.63 9.63 9.63 9.63 9.63 9.63 81 89 89 93 93 80 88 88 88 89 Fire: Number of Fire Stations 4 4 4 4 4 4 4 4 4 4 Number of Engines/Rescue Trucks/Ladders 7 9 9 9 8 8 11 8 8 8 Number of Medical Aid Vehicles 1 1 1 1 1 1 1 1 1 2 Number of Hazardous Materials Trailer Units 2 2 2 2 2 1 1 1 1 1 Transportation Paved Streets (lane miles) 188.2 188.2 188.2 188.2 188.2 188.2 188.2 188.2 188.2 188.2 Sidewalks (miles) 64.8 64.8 64.8 64.8 64.8 65.0 65.0 66 66 66 Number of Traffic Signals 63 63 63 74 76 74 74 74 74 74 Number of Streetlights Owned by Seattle City Light 901 902 902 902 902 908 910 910 910 910 Number of Streetlights Owned by Puget Sound Energy 187 187 187 187 187 187 187 187 187 187 Number of Streetlights Owned by City of Tukwila 1,216 1,224 1,224 1,224 1,224 1,224 1,224 1224 1224 1224 Culture and Recreation Parks Acreage 175.6 175.6 190 190 191 191 191 193 193 193 Number of Parks 19 19 19 19 20 20 20 21 21 21 Golf Course Acreage 77.26 77.26 77.26 77.26 77.26 77.26 77.26 77.26 77.26 77.26 Maintained Trails (miles) 15 15 15 15 15 15 15 13 13 13 Number of Playgrounds 11 11 11 11 11 11 11 11 11 11 Sw imming Pool - - - 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 2 2 2 2 2 Water Water Distribution Mains (miles) 41 49 49 49 49 49 49 49 49 49.5 Maximum Daily Capacity (millions of gallons) 10 10 10 10 10 10 10 10 10 10 Number of Fire Hydrants (Owned by City of Tukw ila) 576 576 577 577 579 579 589 601 601 603 Vehicles 8 9.05 9 9 9 8 8 8 8 8 Sewer Sanitary Sewers (miles) 37 37 37 37 39 39 39 39 40 40 Average Daily Dry Weather Flow (millions of gallons) 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 Vehicles 5 4.25 4 5 5 3 3 3 3 3 Surface Water Storm Drains (miles) 70 70 71 71 97.4 97.4 97.4 97.4 111.0 111.0 Vehicles 4 8.35 8 8 8 9 9 8 8 8 Sources: Various City of Tukwila departments 166