HomeMy WebLinkAbout10/19/2010 10 State Auditor's Report - City 2009 Financial Statements 110 BUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT _
Item No { r�
For Meeting Of October 19, 2010
ITEM TITLE State Auditor's Report — City's 2009 Financial Statements
SUBMITTED BY Finance Division
CONTACT Rita M DeBord, Finance Director; 575 -6070
Cindy Epperson, Deputy Director Accounting / Budgeting, 575 -6070
SUMMARY EXPLANATION Attached for Council review is the Washington State Auditors
Office (SAO) report regarding their examination of the City of Yakima for the period January
1 through December 31, 2009 The Auditor's examination (audit) included three areas of
review, as noted below
1 Financial Reporting, with resect to
(a) Evaluation of internal controls
(b) Compliance with laws and regulations
2 Federal Regulations, with respect to
(a) Compliance with laws and regulations
(b) Evaluation of internal controls
3 Financial Statements (and related disclosures and internal controls)
As stated in the enclosed auditor's reports, the Auditors gave the City's Financial
Statements an Unqualified Opinion (i.e.. a clean opinion with no qualifications — the highest
possible rating) The City has received an Unqualified Opinion from the State Auditors on
our financial statements every year for more than two decades The Auditor's did identify
one "Finding" of non - compliance in Federal program controls, this finding did not result in
any "Questioned Costs" by the auditors The final audit by the SAO for the fiscal year
ending December 31, 2009 is currently in progress, this is an "Accountability" audit; when
complete, this will conclude the auditor's work regarding fiscal year 2009
(Continued on next page)
Resolution _ Ordinance _Other (Specify) Report - 2009 State Audit
Contract Mail to (name and address) Phone
Funding Source N/A
APPROVED FOR SUBMITTAL. City Manager
STAFF RECOMMENDATION Accept Report
BOARD /COMMISSION RECOMMENDATION
COUNCIL ACTION
(Continued from first page)
A full copy of the audit report has been included in the agenda package provided to City
Council Members and Department Heads Due to the size and complexity of these
documents, only the auditors written reports and comments have been included for general
distribution, (i e the financial statements themselves and the related footnotes,
Management Discussion and Analysis and supplemental information are not included in the
general distribution) However, the full report may be found on the State Auditor's website,—
www.sao.wa.qov/EN / Audits /Pages /Search /AuditReportSearch - then request "The City of
Yakima" or audit number 35328 Additionally, the Comprehensive Annual Financial Report
(CAFR) is posted on the City's website To access the CAFR on -line, go to
"www ci yakima. wa us then go to "Services" and click on "Finance'; then click on "$ ", and
then "2009 Comprehensive Annual Financial Report"
Audit Results Summary
1) Financial Reporting (pg 8 & 9)
(a) Internal Controls The auditors reviewed the City's internal controls over financial
reporting to the extent the Auditor's considered necessary for the purpose of
designing their auditing procedures for the purpose of expressing their opinion on
the financial statements
The audit states. " we did not identify any deficiencies in internal control over
financial reporting that we consider to be material weaknesses. "
1
(b) Compliance As part of their review to obtain reasonable assurance that the City'
financial statements are free of material misstatements, the State Auditors test for
compliance with certain provisions of laws and regulations, contracts and grant
agreements The auditor needs to obtain reasonable assurance that compliance
with laws, regulations, contracts and grants has occurred, but they do not express
an opinion on overall compliance
The audit states " the results of our tests disclosed no instances of non - compliance
or other matters that are required to be reported under Government Auditing
Standards "
2) Major (Federal) Program Regulations (pg 10 & 11)
(a). Compliance The auditors audited and expressed an opinion on the City of Yakinia's
compliance with the requirements of laws, regulations, contracts and grants applicable
to each of the City's major federal programs The four programs specifically audited
were
> Co Community Development Block Grants (CDBG)
> HOME Investment Partnerships Program (HOME)
> Highway Planning and Construction
> Healthy Marriage Promotion and Responsible Fatherhood (Healthy Families)
> Highway Planning and Construction (ARRA, Recovery Act)
> Federal Transit Formula Grants
> Federal Transit Formula Grants (Recovery Act)
1 I
The auditors are required to perform audits to obtain reasonable assurance about
whether any non - compliance with laws, regulations, etc. could have a direct and
material effect on a major federal program
The audit states. " In our opinion, the City complied, in all material respects, with
the requirements that are applicable to its major federal programs for the year
ended December 31, 2009 " However, the results of our auditing procedures
disclosed an instance of noncompliance with those requirements, which is required
to be reported in accordance with OMB Circular A -133 and which is described in
the accompanying Schedule of Federal Audit Findings and Questioned Costs as
Finding 1
(b) Internal Controls over Compliance The auditors perform procedures to test
internal controls over compliance requirements that could have a direct and
material effect on major federal programs for the purpose of expressing an opinion
on compliance (as noted above) and to test and report on internal control over
compliance in accordance with OMB Circular A -133 The auditors did report one
instance of non - compliance
3) Financial Statements (pg 12 & 13) the State Auditors audited - and expressed an
opinion on - the City's Financial Statements for the period January 1 through
December 31, 2009 The auditors gave the City an unqualified opinion - the
4110 highest rating possible.
The auditors stated " In our
opinion, the financial statements 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 Yakima, as of December 31, 2009, and the respective
changes in financial position and, where applicable, cash flows thereof, and the
respective budgetary comparisons for the General and Community Development
Funds for the year then ended, in conformity with accounting principles generally
accepted in the United States of America "
r
Washington State Auditor's Office
Financial Statements and Federal Single Audit Report
City of Yakima
Yakima County
Audit Period
January 1, 2009 through December 31, 2009
Report No. 1004264
i
Issue Date
°1 � Or s' WASHINGTON
September 27, 2010 1 ( SONNTAG
STATE AU D I TO R
•
5I'INN['l....o>
Washington State Auditor
Brian Sonntag
September 27, 2010
Council
City of Yakima
Yakima, Washington
Report on Financial Statements and Federal Single Audit
Please find attached our report on the City of Yakima's financial statements and compliance
with federal laws and regulations
We are issuing this report in order to provide information on the City's financial condition
In addition to this work, we look at other areas of our audit client's operation for compliance with
p p
state laws and regulations The results of that audit will be included in a separately issued
accountability report.
Sincerely,
4 1; (29.
BRIAN SONNTAG, CGFM
STATE AUDITOR
III
Insurance Building, P 0 Box 40021 • Olympia, Washington 98504 -0021 • (360) 902 -0370 • TDD Relay (800) 833 -6388
FAX (360) 753 -0646 • http: / /www.sao wa.gov
• Table of Contents
City of Yakima
Yakima County
January 1, 2009 through December 31, 2009
Federal Summary 1
Schedule of Federal Audit Findings and Questioned Costs 3
Schedule of Prior Federal Audit Findings 6
Independent Auditor's Report on Internal Control over Financial Reporting and on
Compliance and Other Matters in Accordance with Government Auditing Standards 8
Independent Auditor's Report on Compliance with Requirements Applicable to each Major
Program and Internal Control over Compliance in Accordance with OMB Circular A -133 10
Independent Auditor's Report on Financial Statements 12
Financial Section 14
Federal Summary •
City of Yakima
Yakima County
January 1, 2009 through December 31, 2009
The results of our audit of the City of Yakima are summarized below in accordance with U S
Office of Management and Budget Circular A -133
FINANCIAL STATEMENTS
An unqualified opinion was issued on the financial statements of the governmental activities, the
business -type activities, each major fund and the aggregate remaining fund information
Internal Control Over Financial Reporting
• Significant Deficiencies We reported no deficiencies in the design or operation of
internal control over financial reporting that we consider to be significant deficiencies
• Material Weaknesses. We identified no deficiencies that we consider to be material
weaknesses
We noted no instances of noncompliance that were material to the financial statements of the
City
FEDERAL AWARDS
Internal Control Over Major Programs
• Significant Deficiencies. We reported no deficiencies in the design or operation of
internal control over a major federal program that we consider to be significant
deficiencies
• Material Weaknesses. We identified deficiencies that we consider to be material
weaknesses
We issued an unqualified opinion on the City's compliance with requirements applicable to its
major federal programs
We reported findings that are required to be disclosed under section 510(a) of OMB Circular
A 133
Washington State Auditor's Office
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• Identification of Major Programs.
The following were major programs during the period under audit:
CFDA No Proqram Title
14 218 Community Development Block Grants — Entitlement Grants
14 239 HOME Investment Partnerships Program
20.205 Highway Planning and Construction
20 205 ARRA — Highway Planning and Construction (Recovery Act)
20 507 Transit Cluster — Federal Transit Formula Grants
20 507 ARRA — Transit Cluster — Federal Transit Formula Grants (Recovery
Act)
93 086 Healthy Marriage Promotion and Responsible Fatherhood
The dollar threshold used to distinguish between Type A and Type B programs, as prescribed
by OMB Circular A -133, was $300,000
III The City did not qualify as a low -risk auditee under OMB Circular A -133
III
Washington State Auditor's Office
2
Schedule of Federal Audit Findings and
Questioned Costs
City of Yakima
Yakima County
January 1, 2009 through December 31, 2009
1 The City's internal controls are inadequate to ensure compliance with
federal suspension and debarment requirements
CFDA Number and Title 14 218 Community Development Block
Grant/Entitlement Grants
Federal Grantor Name U S Department of Housing and Urban
Development
Federal Award /Contract Number. 609 -MC -53 -0008
B08 -MC -53 -0008
Pass - through Entity Name NA
Pass - through Award /Contract NA
Number
Questioned Cost Amount: $0
Background
The City received federal grant funding from the U S Department of Housing and Urban
Development to benefit low- and moderate - income persons, aid in the prevention or
elimination of unsafe housing and blighted areas, or meet urgent community
development needs
Recipients of federal grants are prohibited from contracting with or making subawards to
parties that are suspended or debarred from doing business with the federal
government. For vendor contracts of $25,000 or more and all subawards, the City must
ensure the vendor or subrecipient is not suspended or debarred This can be
accomplished by obtaining a written certification from the vendor or subrecipient stating
that its organization has not been suspended or debarred Alternatively, the City may
check for suspended or debarred parties by reviewing the federal Excluded Parties List
issued by the U S General Services Administration This requirement should be met
prior to making the first payment to the vendor
Description of Condition
In 2009, the City spent $1,367,251 in Community Development Block Grant program
funds, $200,000 of which was disbursed to a for - profit agency for economic development
purposes The City did not ensure the for - profit agency was not suspended or debarred
4110
Washington State Auditor's Office
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Cause of Condition
Employees responsible for approving economic development contracts did not have
procedures in place to ensure a timely review for suspension and debarment.
Effect of Condition and Questioned Costs
Without adequate internal controls in place over suspension and debarment, the City
cannot ensure subrecipients and contractors are not suspended or debarred from
participating in federal programs This could result in a request from the granting agency
for repayment of federal funds and jeopardize future awards We found the City did
verify that this subrecipient was not suspended or debarred over a year after providing
the funding to the for - profit agency Therefore, we are not questioning these costs
Recommendation
We recommend the City strengthen internal controls and establish procedures to ensure
compliance with the suspension and debarment requirement.
City's Response
The City believes that it does, in fact, have adequate systems in place with regards to
• federal suspension and debarment requirements. In the particular incident identified by
the State Auditor's, the contract did not originate in the Office of Neighborhood
Development (ONDS), which oversees the administration of the Federal Community
Development Block Grant program When the contract arrived at ONDS, staff reviewed
the file, noted the error, and printed the missing EPLS
The City recognizes the importance of meeting federal requirements and the significant
consequences of not doing so We would like to assure the readers that City staff found
the error and corrected the error prior to the audit, which is an indication of adequate
internal control The vendor was not suspended or debarred, so no federal funds were
incorrectly spent. Additionally, all departments have been reminded of the federal
suspension and debarment requirements.
Auditor's Remarks
Although the City verified the subrecipient was not suspended or debarred, it was not
until July 26, 2010, which was approximately 15 months after the funds were disbursed
Internal controls should be in place to review for suspension and debarment before
payments are made to subrecipients
We appreciate the steps the City is taking to resolve this issue We will review the
condition during our next audit.
We thank City officials for the assistance we received during the audit.
• Applicable laws and Regulations
U S Office of Management and Budget Circular A -133, Audits of States, Local
Governments, and Non - Profit Organizations, Section 300, states in part:
Washington State Auditor's Office
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The auditee shall
(b) Maintain internal control over Federal programs that provides
reasonable assurance that the auditee is managing Federal
awards in compliance with laws, regulations, and provisions of
contracts or grant agreements that could have a material effect on
each of its Federal programs
(c) Comply with laws, regulations, and the provisions of contracts
or grant agreements related to each of its Federal programs.
Title 2, Code of Federal Regulations, Section 180 220, states in part:
(b) Specifically, a contract for goods or services is a covered transaction if
any of the following applies
(1) The contract is awarded by a participant in a non - procurement
transaction that is covered under Sec 180 210, and the amount of
the contract is expected to equal or exceed $25,000
Title 2, Code of Federal Regulations, Section 180 300 states
When you enter into a covered transaction with another person at the •
next lower tier, you must verify that the person with whom you intend to
do business is not excluded or disqualified. You do this by
(a) Checking the EPLS, or
(b) Collecting a certification from that person if allowed by this
rule, or
(c) Adding a clause or condition to the covered transaction with
that person
Washington State Auditor's Office
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•
Schedule Findings
e of Prior Federal Audit findings
City of Yakima
Yakima County
January 1, 2009 through December 31, 2009
This schedule presents the status of federal findings reported in prior audit periods The status
listed below is the representation of the City of Yakima. The State Auditor's Office has reviewed
the status as presented by the City
Audit Period January 1, Report Reference Finding Reference CFDA Numbers
2009 through December 31, No 1002542 No 1 93 086
2009
Federal Program Name and Granting Agency. Pass - Through Agency Name
Healthy Marriage Promotion and Responsible Department of Social and Health
Fatherhood, U S Department of Health and Services, Division of Child Support
Human Services
Finding Caption
The City's internal controls were inadequate to ensure compliance• with federal procurement
41) requirements for its Healthy Marriage and Responsible Fatherhood program
Background
Federal regulations require grantees to follow their own procurement procedures as long as
they comply with state laws and federal regulations For purchases not covered under state
law, such as professional services, grantees must follow procurement methods set forth in
federal regulations For purchases that exceed $100,000, grantees must formally bid the
contract. Grantees may solicit services from only one vendor when they determine awarding
the contract is not feasible using bids or competitive proposals, the goods and services are
available only from one source, or competition is determined to be inadequate Grantees and
subgrantees must document their procurement efforts
The City stated it obtained three quotes from vendors before granting the contract; however,
we found the City did not use a formal bidding process to select the contractor, in accordance
with federal procurement requirements
Status of Corrective Action (check one)
❑ Fully Corrected ❑ Partially Corrected ❑ No Corrective Action Taken X Finding is considered no longer valid
Corrective Action Taken
City Staff has been reminded of the federal procurement requirements This particular incident
was outside the norm because it involved a media broker with a base contract of $15,000
However, the subsequent purchase of media placement brought the total paid to this vendor to
$153,102. Currently, this particular program is in the close -out phase, and is no longer placing
media ads
III
Washington State Auditor's Office
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Audit Period January 1, Report Reference Finding Reference CFDA Number(s) 4110
2008 through December 31, No 1002542 No 2 14.218, 14 239,
2009 20 205 and 93 086
Federal Program Name and Granting Agency. Pass - Through Agency Name'
Community Development Block Grant, HOME Highway Planning and Construction —
Investment Partnership Program - U S WA State Department of Transportation,
Department of Housing and Urban Development; Healthy Marriage Promotion and
Highway Planning and Construction - U S Responsible Fatherhood — Department
Department of Transportation, Healthy Marriage of Social and Health Services
Promotion and Responsible Fatherhood - U S
Department of Health and Human Services
Finding Caption
The City of Yakima's internal controls are inadequate to ensure compliance with federal
suspension and debarment requirements.
Background
We noted several instances in which the City did not comply with federal requirements to
ensure vendors and subgrantees are not suspended or disbarred from receiving federal grant
funds
• Community Develpoment Block Grant: The City paid one vendor $75,000 in federal
funds
• HOME Investment Partnership Program The City paid one vendor $149,917 and one
subrecipient $200,000
• Highway Planning and Construction The City paid one vendor $30,996
• Healthy Marriage and Responsible Fatherhood The City paid one vendor $153,102.
Status of Corrective Action (check one)
X Fully Corrected ❑ Partially Corrected ❑ No Corrective Action Taken ❑ Finding is considered no longer valid
Corrective Action Taken
City staff was reminded of the federal suspension and debarment requirements. During the
current audit, we noted the prior audit finding was resolved in three of the four programs.
However, we found the issue was unresolved for the City's Community Development Block
Grant resulting in a finding for 2009
Washington State Auditor's Office
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® Independent '
p t Auditor s Report on Internal
Control over Financial Reporting and on
Compliance and Other Matters in Accordance
with Government Auditing Standards
City of Yakima
Yakima County
January 1, 2009 through December 31, 2009 ,
Council
City of Yakima
Yakima, Washington
We have audited the financial statements of the governmental activities, the business -type
activities, each major fund and the aggregate remaining fund information of the City of Yakima,
II Yakima County, Washington, as of and for the year ended December 31, 2009, which
collectively comprise the City's basic financial statements, and have issued our report thereon
dated September 16, 2010 The prior year summarized comparative information has been
derived from the City's 2008 basic financial statements that we issued our report thereon dated
September 14, 2009
We conducted our audit in accordance with auditing standards generally accepted in the United
States of America and the standards applicable to the financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States
INTERNAL CONTROL OVER FINANCIAL REPORTING
In planning and performing our audit, we considered the City's internal control over financial
reporting as a basis for designing our auditing procedures for the purpose of expressing our
opinions on the financial statements, but not for the purpose of expressing an opinion on the
effectiveness of the City's internal control over financial reporting Accordingly, we do not
express an opinion on the effectiveness of the City's internal control over financial reporting
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to
prevent, or detect and correct misstatements on a timely basis A material weakness is a
deficiency, or a combination of deficiencies, in internal control such that there is a reasonable
possibility that a material misstatement of the City's financial statements will not be prevented,
or detected and corrected on a timely basis
410 Our consideration of internal control over financial reporting was for the limited purpose
described in the first paragraph of this section and would not necessarily identify all deficiencies
in internal control that might be deficiencies, significant deficiencies or material weaknesses.
We did not identify any deficiencies in internal control over financial reporting that we consider
to be material weaknesses, as defined above
Washington State Auditor's Office
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However, we noted certain matters that we will report to the management of the City in a
separate letter dated September 16, 2010
COMPLIANCE AND OTHER MATTERS
As part of obtaining reasonable assurance about whether the City's financial statements are
free of material misstatement, we performed tests of the City's compliance with certain
provisions of laws, regulations, contracts and grant agreements, noncompliance with which
could have a direct and material effect on the determination of financial statement amounts
However, providing an opinion on compliance with those provisions was not an objective of our
audit, and accordingly, we do not express such an opinion
The results of our tests disclosed no instances of noncompliance or other matters that are
required to be reported under Government Auditing Standards
This report is intended for the information and use of management, the Council, federal
awarding agencies and pass- through entities However, this report is a matter of public record
and its distribution is not limited It also serves to disseminate information to the public as a
reporting tool to help citizens assess government operations
1.4
BRIAN SONNTAG, CGFM
STATE AUDITOR
September 16, 2010
411
Washington State Auditor's Office
9
0 Independent p dent Auditor s Report on Compliance
with Requirements Applicable to each Major
Program and Internal Control over Compliance
in Accordance with OMB Circular A -133
City of Yakima
Yakima County
January 1, 2009 through December 31, 2009
Council
City of Yakima
Yakima, Washington
COMPLIANCE
® We have audited the compliance of the City of Yakima, Yakima County, Washington, with the
types of compliance requirements described in the U S Office of Management and Budget
(OMB) CircularA -133 Compliance Supplement that are applicable to its major federal programs
for the year ended December 31, 2009 The City's major federal programs are identified in the
Federal Summary Compliance with the requirements of laws, regulations, contracts and grants
applicable to its major federal programs is the responsibility of the City's management. Our
responsibility is to express an opinion on the City's compliance based on our audit.
We conducted our audit of compliance in accordance with auditing standards generally
accepted in the United States of America, the standards applicable to the financial audits
contained in Government Auditing Standards, issued by the Comptroller General of the United
States, and OMB Circular A -133, Audits of States, Local Governments, and Non - Profit
Organizations. Those standards and OMB Circular A -133 require that we plan and perform the
audit to obtain reasonable assurance about whether noncompliance with the types of
compliance requirements referred to above that could have a direct and material effect on a
major federal program occurred An audit includes examining, on a test basis, evidence about
the City's compliance with those requirements and performing such other procedures as we
considered necessary in the circumstances We believe that our audit provides a reasonable
basis for our opinion Our audit does not provide a legal determination on the City's compliance
with those requirements
In our opinion, the City complied, in all material respects, with the requirements referred to
above that are applicable to its major federal programs for the year ended December 31, 2009
However, the results of our auditing procedures disclosed an instance of noncompliance with
those requirements, which is required to be reported in accordance with OMB Circular A -133
0 and which is described in the accompanying Schedule of Federal Audit Findings and
Questioned Costs as. Finding 1
Washington State Auditor's Office
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INTERNAL CONTROL OVER COMPLIANCE
The management of the City is responsible for establishing and maintaining effective internal
control over compliance with requirements of laws, regulations, contracts and grants applicable
to federal programs In planning and performing our audit, we considered the City's internal
control over compliance with the requirements that could have a direct and material effect on a
major federal program in order to determine our auditing procedures for the purpose of
expressing our opinion on compliance and to test and report on internal control over
compliance, but not for the purpose of expressing an opinion on the effectiveness of internal
control over compliance Accordingly, we do not express an opinion on the effectiveness of the
City's internal control over compliance
Our consideration of internal control over compliance was for the limited purpose described in
the preceding paragraph and was not designed to identify all deficiencies in internal control over
compliance that might be significant deficiencies or material weaknesses and therefore, there
can be no assurance that all deficiencies, significant deficiencies, or material weaknesses have
been identified However, as discussed below, we identified certain deficiencies in internal
control over compliance that we consider to be material weaknesses
A deficiency in internal control over compliance exists when the design or operation of a control
over compliance does not allow management or employees, in the normal course of performing
their assigned functions, to prevent, or detect and correct, noncompliance with a type of
compliance requirement of a federal program on a timely basis A material weakness in internal
control over compliance is a deficiency, or combination of deficiencies, in internal control over
compliance, such that there is a reasonable possibility that material noncompliance with a type
of compliance requirement of a federal program will not be prevented, or detected and
corrected, on a timely basis We consider the deficiencies in internal control over compliance
described in the accompanying Schedule of Federal Audit Findings and Questioned Costs as
Finding 1 to be a material weakness
The City's responses to the findings identified in our audit are described in the accompanying
Schedule of Federal Audit Findings and Questioned Costs We did not audit the City's
response and, accordingly, we express no opinion on it.
This report is intended for the information of management, the Council, federal awarding
agencies and pass- through entities. However, this report is a matter of public record and its
distribution is not limited It also serves to disseminate information to the public as a reporting
tool to help citizens assess government operations
BRIAN SONNTAG, CGFM
STATE AUDITOR
September 16, 2010
Washington State Auditor's Office
11
0 Independent Auditor's Financial
t ud�tor s Report on ��nancial
Statements
City of Yakima
Yakima County
January 1, 2009 through December 31, 2009
Council
City of Yakima
Yakima, Washington
We have audited the accompanying financial statements of the governmental activities, the
business -type activities, each major fund and the aggregate remaining fund information of the
City of Yakima, Yakima County, Washington, as of and for the year ended December 31, 2009,
which collectively comprise the City's basic financial statements as listed on page 14 These
financial statements are the responsibility of the City's management. Our responsibility is to
express opinions on these financial statements based on our audit. The prior year summarized
comparative information has been derived from the City of Yakima's 2008 basic financial
statements and, in our report dated September 14, 2009, we expressed unqualified opinions on
the respective financial statements of the governmental activities, the business -type activities,
each major fund and the aggregate remaining fund information.
We conducted our audit in accordance with auditing standards generally accepted in the United
States of America and the standards applicable to financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements An audit
also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation We believe
that our audit provides a reasonable basis for our opinions
In our opinion, the financial statements referred to above present fairly, in all material respects,
the respective financial position of the governmental activities, the business -type activities, each
major fund and the aggregate remaining fund information of the City of Yakima, as of
December 31, 2009, and the respective changes in financial position and, where applicable,
cash flows thereof, and the respective budgetary comparison for the General and Community
Development funds, for the year then ended in conformity with accounting principles generally
accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report 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
0 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 the internal control over financial reporting or on compliance That report is an
Washington State Auditor's Office
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integral part of an audit performed in accordance with Government Auditing Standards and
should be considered in assessing the results of our audit.
The management's discussion and analysis on pages 15 through 29, pension trust fund on
pages 91 through 92 and information on postemployment benefits other than pensions on page
93 are not a required part of the basic financial statements but are supplementary information
required by the Governmental Accounting Standards Board We have applied certain limited
procedures, which consisted principally of inquiries of management regarding the methods of
measurement and presentation of the required supplementary information However, we did not
audit the information and express no opinion on it.
Our audit was performed for the purpose of forming opinions on the financial statements that
collectively comprise the City's basic financial statements. The accompanying Schedule of
Expenditures of Federal Awards is presented for purposes of additional analysis as required by
U S Office of Management and Budget Circular A -133, Audits of States, Local Governments,
and Non - Profit Organizations. This schedule is not a required part of the basic financial
statements Such information has been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in our opinion, is fairly stated, in all material
respects, in relation to the basic financial statements taken as a whole
•
BRIAN SONNTAG, CGFM
STATE AUDITOR
September 16, 2010
Washington State Auditor's Office
13
Financial Section
City of Yakima
Yakima County
January 1, 2009 through December 31, 2009
REQUIRED SUPPLEMENTAL INFORMATION
Management's. Discussion and Analysis - 2009
BASIC FINANCIAL STATEMENTS
Statement of Net Assets — 2009
Statement of Activities — 2009
Balance Sheet — Governmental Funds — 2009
Reconciliation of the Balance Sheet to the Government -Wide Statement of Net Assets —
2009
Statement of Revenues, Expenditures and Changes in Fund Balance — Governmental
Funds — 2009
• Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund
Balances of Governmental Funds to the Statement of Activities — 2009
Statement of Revenues, Expenditures and Changes in Fund Balances — Budget and
Actual — General Fund — 2009
Statement of Revenues, Expenditures and Changes in Fund Balances — Budget and
Actual — Community Development Fund — 2009
Statement of Net Assets — Proprietary Funds — 2009
Statement of Revenues, Expenses and Changes in Fund Net Assets — Proprietary
Funds — 2009
Statement of Cash Flows — Proprietary Funds — 2009
Statement of Net Assets — Fiduciary Funds — 2009
Statement of Changes in Fund Net Assets — Fiduciary Funds — 2009
Notes to the Basic Financial Statements — 2009
REQUIRED SUPPLEMENTAL INFORMATION
Schedule of Employer Contributions — 2009
Schedule of Funding Progress Other Post Employment Benefits (OPEB) — 2009
SUPPLEMENTAL INFORMATION
Schedule of Expenditures of Federal Awards — 2009
• Notes to the Schedule of Expenditures of Federal Awards — 2009
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MANAGEMENT'S DISCUSSION AND ANALYSIS
The City of Yakima's discussion and analysis offers readers of the City's financial statements a narrative
overview and analysis of the City's financial activities for the fiscal year ended December 31, 2009 We
encourage readers to consider the information presented here in conjunction with additional information
that we have furnished in our letter of transmittal and in the financial statements and notes to the financial
statements (which immediately follow this discussion).
FINANCIAL HIGHLIGHTS
> The total assets of the City of Yakima exceeded its liabilities at December 31, 2009, by $266 million
dollars Net assets invested in capital (net of depreciation and related debt) account for 84% of this
amount, with a value of about $224 million. Of the remaining net assets, $30 million may be used to
meet the government's ongoing obligations to citizens and creditors, without legal restriction.
> The City's total net assets decreased by $.2 million. Most of the decrease was the result of the
economic recession and corresponding decline in general revenues, offset in part by capital grants
and donations.
> As of December 31, 2009, the City of Yakima's governmental activities reported combined ending
net assets of over $150 million, a decrease of $4.3 million in comparison with the prior year. Of that
amount, $125.8 million was invested in capital assets, $9.3 million was legally restricted for specific
projects or programs, and $14.9 million was available for spending at the government's discretion.
> Unreserved fund balance for the General Fund was $8.8 million dollars at December 31, 2009 This
balance represents 18 7% of total General Fund expenditures.
> The City of Yakima's total long -term debt at December 31, 2009, was $81 million (about $44 million
in Governmental activities and $37 million in business type activities), with a remaining capacity for
non -voted General Obligation debt at $53.5 million. Total debt increased by $5.2 million during the
current fiscal year. There was $7 million of new long -term bonded debt issued in 2009
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the City of Yakima's basic financial
statements. The basic financial statements are comprised of three components: 1) Government -wide financial
statements, 2) Fund financial statements, and 3) Notes to the financial statements.
GOVERNMENT -WIDE FINANCIAL STATEMENTS
There are two government -wide financial statements, the statement of net assets and the statement of
activities, which are designed to provide readers with a broad overview of the City of Yakima's finances in a
manner similar to a private sector business. Both of the government -wide financial statements distinguish
functions of the City of Yakima that are principally supported by taxes and intergovernmental revenues
(referred to as "governmental activities ") from functions that are intended to recover all or a significant
portion of their costs through user fees and charges (referred to as "business type activities "). The
governmental activities of the City of Yakima include a full range of local governmental services provided to
the public, such as public safety (police, municipal court, fire, and building), public improvements (streets,
traffic signals), parks and recreation, community development; and general administrative services. The
busmess type activities of the City of Yakima include sanitation (solid waste disposal, wastewater treatment,
and stormwater management), potable and irrigation water systems, and transit.
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THE STATEMENT OF NET ASSETS presents information on all of the City of Yakima's assets and liabilities, with the
"' difference between the two reported as net assets. This statement serves a purpose similar to that of the
balance sheet of a private sector business. Over time, increases or decreases in net assets may serve as a
useful indicator of changes in the City's financial position. However, this is just one indicator of financial
health of the City Other indicators include the condition of the City's infrastructure systems (roads, drainage
systems, bridges, etc.), changes in property tax base, and general economic conditions within the City
THE STATEMENT OF ACTIVITIES (CHANGES IN NET ASSETS) presents information showing how the government's net assets
changed during 2009 Because it separates program revenue (revenue generated by specific programs through
charges for services, grants, and contributions) from general revenue (revenue provided by taxes and other
sources not tied to a particular program), it shows to what extent each program has to rely on taxes for funding.
All changes in net assets are reported using the accrual basis of accounting which requires that.revenue be
reported when earned and expenses be reported when the goods and services are received, regardless of the
timing of the cash flow Items such as uncollected taxes, unpaid vendor invoices for items received in 2009, and
earned but unused vacation leave will be included in the statement of activities as revenue and expense, even
though the cash associated with these items may not be received or distributed in 2009
FUND FINANCIAL STATEMENTS
A fund is a grouping of related accounts that is used to maintain control over resources that have been
segregated for specific activities or objectives. The City of Yakima, like other state and local governments,
uses fund accounting to ensure and demonstrate compliance with finance related legal requirements. All
of the funds of the City of Yakima can be divided into three categories: Governmental Funds, Proprietary
Funds, and Fiduciary Funds. Governmental Funds are used to account for most, if not all, of a government's
tax supported activities. Proprietary Funds are used to account for a government's business type activities,
ilo where all or part of the costs of activities are supported by fees and charges that are paid directly by those
who benefit from the activities. Fiduciary Funds are used to account for resources that are held by the
government as a trustee or agent for parties outside of the government. The resources of fiduciary funds
cannot be used to support the government's own programs.
GOVERNMENTAL FUNDS
The Governmental Fund Balance Sheet and the Governmental Fund Statement of Revenues, Expenditures,
and Changes in Fund Balances present separate columns of financial data for the General Fund and the
Community Development Fund, which are considered to be major funds, based on criteria established by
GASB Statement #34. Data from the remaining governmental funds are combined into a single, aggregated
presentation. The governmental fund financial statements can be found immediately following the
government -wide financial statements. Individual fund data for each of the nonmajor governmental funds is
provided in the form of combining statements, outside of the basic financial statements.
Governmental funds are used to account for essentially the same functions reported as governmental
activities in the government -wide financial statements. However, unlike government -wide financial
statements which use accrual accounting, governmental fund financial statements focus on near -term inflows
and outflows of spendable resources and on balances of spendable resources available at the end of the
fiscal year. Such information is useful in evaluating a government's near -term financing requirements in
comparison to near -term resources available.
Because the focus of governmental fund financial statements is narrower than that of government -wide
financial statements, it is useful to compare 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 reconciliation to the governmental activities column in the government -
wide statements, in order to facilitate this comparison.
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The City maintains budgetary controls over its operating funds. The objective of budgetary controls is
to ensure compliance with legal provisions embodied in the annual appropriated budget. Budgets for
governmental funds are established in accordance with state law and are adopted on a fund level. Capital
outlays are approved on an item by item basis or project basis. A budgetary comparison statement is
provided for the General Fund and all special revenue funds to demonstrate compliance with the budget.
PROPRIETARY FUNDS
There are two 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. The
City uses enterprise funds to account for its Solid Waste (Refuse), Wastewater; Domestic Water; Irrigation,
Stormwater; and Transit functions. Internal Service Funds (the second type of proprietary funds) accumulate
and allocate costs internally among the City's various functions. The revenues and expenses of the internal
service funds that are duplicated in other funds through allocations are eliminated in the government -wide
statements, with the remaining balances included in the governmental activities column.
Proprietary fund statements follow the governmental fund statements in this report. They provide the same
type of information as the government -wide financial statements, only in more detail, since both apply the
accrual basis of accounting In comparing the Proprietary Fund Statement of Net Assets to the business
type column on the Government -Wide Statement of Net Assets, you will notice that the total net assets
agree and, therefore, need no reconciliation. In comparing the total assets and total liabilities between the
two statements, you will notice slightly different amounts. This is because the "internal balances" line on
the government -wide statement combines the "due from other funds" (asset) and the "due to other funds"
(liabilities) from the proprietary fund statement in a single line in the asset section of the government -wide
statement.
Individual fund data for each of the nonmajor proprietary funds is provided in the form of combining IP
statements. The proprietary fund combining statements follow the governmental fund combining statements
in this report.
FIDUCIARY FUNDS
Fiduciary funds are used to account for resources held for the benefit of parties outside the government.
Fiduciary funds are not reflected in the government -wide financial statement because the resources of those
funds are not available to support the City of Yakima's own programs. The accounting used for fiduciary
funds is much like that used for proprietary funds.
The City of Yakima has one fiduciary fund for Firefighter pensions. The basic fiduciary fund financial
statements can be found following the proprietary fund financial statements, in the Basic Financial Statements
section.
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 basic financial statements in this report.
GOVERNMENT-WIDE FINANCIAL ANALYSIS
STATEMENT OF NET ASSETS
As noted earlier, net assets may serve over time as a useful indicator of a government's financial position.
The City of Yakima's net assets total $266 million at December 31, 2009 The following table reflects the
condensed Government -Wide Statement of Net Assets with comparative totals for 2008.
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NET ASSETS
0 GOVERNMENTAL BUSINESS TYPE
ACTIVITIES ACTIVITIES TOTAL •
2009 2008 2009 2008 2009 2008
Assets
Current and Other Assets $54,394,590 $52,311,764 $27,065,008 $29,445,350 $81,459,598 $81,757,114
Capital Assets 152,292,682 151,151,681 130,030,526 126,126,508 282,323,208 277,278,189
Total Assets 206,687,272 203,463,445 157,095,534 155,571,858 363,782,806 359,035,303
Liabilities
Payables and Other Liabilities 12,721,629 11,850,547 4,014,908 5,091,970 16,736,537 16,942,517
Long -Term Liabilities Outstanding 43,982,181 37,320,261 37,104,946 38,595,273 81,087,127 75,915,534
Total Liabilities 56,703,810 49,170,808 41,119,854 43,687,243 97,823,664 92,858,051
Net Assets
Invest in Cap Assets, Net of Rel Debt 125,768,431 130,195,679 98,161,351 86,560,287 223,929,782 216,755,966
Restricted 9,287,543 9,804,700 2,365,700 2,361,674 11,653,243 12,166,374
Unrestricted 14,927,488 14,292,258 15,448,629 22,962,654 30,376,117 37,254,912
Total Net Assets $149,983,462 $154,292,637 $115,975,680 $111,884,615 •$265,959,142 $266,177,252
The City of Yakima's total assets stand at $363.8 million as of December 31, 2009 Of this amount, $282.3
million is accounted for by capital assets, which includes some infrastructure and construction in progress.
Out of $152.3 million in capital assets reported in Governmental activities at December 31, 2009, $71 4 million
(47 %) is accounted for by infrastructure acquisitions (including the right -of -way land associated with these
S projects and land under the road).
Of the remaining City assets, approximately $63 7 million were accounted for in cash, cash equivalents, and
investments, $11 9 million in accounts receivable, $4.9 million in notes receivable, and $1 million spread
among miscellaneous assets.
At December 31, 2009, the City had outstanding liabilities of $97.8 million, with $81 million in long -term
liabilities. Of the long -term liabilities, $5 4 million was due within a year, with the remainder due over an
extended period of time. Refer to the notes to the financial statements (Note 7) for a more in depth discussion
of long -term debt.
"Payables and Other Liabilities" for total Governmental and Business type activities total $16.7 million,
and include $11 million in accounts payable, $5.5 million in accrued liabilities and $0.2 million in liabilities
payable from restricted assets.
The largest portion of the City's net assets (84.2 %) reflects its investment in capital, less any outstanding
related debt used to acquire those assets. The City's capital assets, which are used to provide services to
citizens, are investments in capital and are not available for future spending Although the City's investment
in capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt
must be provided from other sources, since the capital assets themselves cannot be used to liquidate these
liabilities.
Approximately 4.4% of the City's net assets are subject to external restrictions on how they may be used
(restricted by the Revised Code of the State of Washington or by contractual agreements with parties outside
O of the primary government). The remaining balance of $30 million (unrestricted net assets) represents the
amount that may be used to meet the City's ongoing obligations.
At December 31, 2009, the City of Yakima reports positive balances m all three categories of net assets, for the
government as a whole, as well as for governmental activities and business type activities.
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THE STATEMENT OF ACTIVITIES (CHANGES IN NET ASSETS)
The City of Yakima's total net assets is decreased by $.2 million in 2009 Net assets for governmental activities
decreased by $4.3 million while business type activities increased by $4.1 million.
Total revenues for the City of Yakima were $108.9 million in 2009 Governmental activities provided $67.6
million (62.1 %), while business type activities added about $41.3 million (37 9 %)
Expenses for the year totaled $106.8 million, with governmental activities accounting for about $73 9 million
or 69.2% and business type activities accounting for $32.9 million or 30.8 %. Key elements in changes in net
assets are shown in the following table.
CHANGES IN NET ASSETS
GOVERNMENTAL BUSINESS TYPE
ACTIVITIES ACTIVITIES TOTAL
2009 2008 2009 2008 2009 2008
Revenues
Program Revenues
Charges for Services $6,923,789 $6,683,999 $32,976,726 $30,398,543 $39,900,515 $37,082,542
Operating Grants & Contributions 6,455,741 5,487,638 2,020,408 2,102,103 8,476,149 7,589,741
Capital Grants & Contributions 5,090,266 4,960,857 1,659,026 3,345,196 6,749,292 8,306,053
General Revenues
Property Tax 14,261,201 13,782,301 0 0 14,261,201 13,782,301
Sales Tax 17,810,213 18,989,918 4,489,747 4,828,419 22,299,960 23,818,337
Other Taxes 12,710,131 12,426,307 0 0 12,710,131 12,426,307
State Entitlements 3,738,559 3,614,482 0 0 3,738,559 3,614,4820
Other 626,352 1,010,088 116,404 198,389 742,756 1,208,477
Total Revenues 67,616,252 66,955,590 41,262,311 40,872,650 108,878,563 107,828,240
Expenses
General Government 8,656,161 8,671,290 0 0 8,656,161 8,671,290
Security of Persons and Property 40,008,664 38,214,353 0 0 40,008,664 38,214,353
Physical Environment 1,189,908 1,354,509 0 0 1,189,908 1,354,509
Transportation 11,108,811 11,213,276 0 0 11,108,811 11,213,276
Economic Environment 4,821,392 4,145,905 0 0 4,821,392 4,145,905
Mental & Physical Health 86,217 19,418 0 0 86,217 19,418
Cultural & Rec Environment 7,020,665 7,156,402 0 0 7,020,665 7,156,402
Interest on Long -Term Debt 1,004,163 862,646 0 0 1,004,163 862,646
Transit 0 0 7,928,658 8,323,437 7,928,658 8,323,437
Refuse 0 0 4,217,711 3,971,530 4,217,711 3,971,530
Wastewater 0 0 12,297,172 12,166,826 12,297,172 12,166,826
Water 0 0 5,748,350 5,519,988 5,748,350 5,519,988
Irrigation 0 0 1,732,812 1,694,812 1,732,812 1,694,812
Stormwater 0 0 1,028,178 582,854 1,028,178 582,854
Total Expenses 73,895,981 71,637,799 32,952,881 32,259,447 106,848,862 103,897,246
Increases in Net Assets Before
Nonoperating Sources (Uses) (6,279,729) (4,682,209) 8,309,430 8,613,203 2,029,701 3,930,994
Gain / Loss on Sale of Capital Assets (2,217,530) 134,867 (17,282) 1,285,475 (2,234,812) 1,420,342
Transfers 4,188,083 3,664,196 (4,201,083) (4,188,370) (13,000) (524,174)
Accounting Loss on GOB Refunding 0 (3,696) 0 0 0 (3,696)
Change in Net Assets (4,309,176) (886,842) 4,091,065 5,710,308 (218,111) 4,823,466
Net Assets — Beginning 154,292,637 147,243,603 111,884,612 114,110,175 266,177,249 261,353,778
Change in Accounting Principle 0 7,935,871 0 (7,935,871) 0 0
Net Assets — Ending $149,983,461 $154,292,632 $115,975,677 $111,884,612 $265,959,138 $266,177,244
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GOVERNMENTAL ACTIVITIES
0 Within governmental activities, tax revenue accounted for 66.2% of total revenue sources, with grants and
contributions accounting for 17 1%. The remaining 16 7% of revenue was provided by charges for services,
interest income, and miscellaneous revenues. (Note: the revenue indicators in the following charts do not
include one -time only financing sources, such as proceeds from new debt or the sale of assets.)
Governmental activities decreased net assets by $4.3 million or 2.8 %. Significant fluctuations in revenue are
as follows:
➢ Operating Grants & Contributions increased $0.9 million from 2008 to 2009 The City receives an
annual contribution from Yakima County for its 911 program, which was approved for additional
staffing in 2009, and added about $0 4 million. The City was also successful in obtaining new grants
for public safety initiatives, which added about $0.4 million.
➢ Property tax increased by $0.5 million or 3 4 %. The base property tax increase, capped by state law at
1 %, and about a 2% increase in new construction contributed to the overall increase in the tax.
➢ Sales tax decreased by $1.2 million or 6.2 %. The decline is mostly the effects of distress in the
national economy
The categories of Other Taxes and State Entitlements both experienced a slight increase. The major
component of "Other Taxes" is utility tax, which was less affected by the economic downturn as this
revenue source is driven primarily by consumption and rates. "State Entitlements" are primarily per capita
distributions, and typically increase slightly year to year, as the population grows. Conversely, "Other
Revenues" consist primarily of interest earnings, and although the amount available to invest remained
relatively constant, the market rate drop in interest rates resulted in a decrease of about $0.4 million.
The largest program expenses consist of Security of Persons and Property (public safety), Transportation, and
General Government, respectively These programs accounted for 80.9% of total governmental expenses.
For the most part, changes in expenses were the result of the implementation of cost containment measures in
response to the revenue reductions caused by the national recession. The major exceptions to this rule follow.
➢ Security of Persons and Property demonstrated an increase of $1.8 million or 4.7% primarily because
of increased jail costs, overtime, and salary adjustments, funded partially by the operating grants
mentioned above. This category remains City Council's highest budget priority
➢ Economic Environment increased by about $0 7 million, primarily because the HUD Block Grant
funded about $0.5 million of infrastructure in 2008, and none of these resources were used on capital
items in 2009
Following are graphs which illustrate revenue by source and expenditures by program for governmental
funds in 2009
IP
Washington State Auditor's Office
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REVENUES BY SOURCE — GOVERNMENTAL ACTIVITIES
Sla
E
•
ntitlements Revenues
Capital Grants and 5.5 / 0.9
Contributions - Property Tax
7.5% 21.1%
Operating Grants r - i
and Contributions
9 4% ?JO
.N ^,g
•
Charges for
Services ,,,,0011,1:.;-P
10.4 % s
4 Sales Tax
k
26.3%
ft *
Other Taxes
18.8%
EXPENSES AND PROGRAM REVENUES — GOVERNMENTAL ACTIVITIES
40,000,000 8 Expenses
O Program Revenues
35,000,000 r
•
30,000,000
•
25,000,000 • - 6,4;
20,000,000 6.,
ti.
•
15,000,000
10,000,000 ? . r i
5,000,000
r €
..___}:! , *Gic_: €:: ..s_.,.,.�' -
General Security of Physical Transportation Economic Mental & Cultural & Interest on
Government Persons and Environment Environment Physical Health Recreational Long -Term Debt
Property Environment
BUSINESS TYPE ACTIVITIES
Of the $41.3 million in business type revenues, 80% was provided by charges for services, with the remaining
amount provided by grants, contributions, transit sales tax and interest income. Overall, business type
revenues demonstrated an increase of $0 4 million or 1% over 2008
Business type revenues and expenses experienced the following fluctuations:
➢ Charges for Services increased by $2.6 million or 8.5 %. The Water, Wastewater, Irrigation, and Refuse
utilities had rate increases for 2009 of 5.5 %, 3.5 %, 5.5 %, and 5% respectively The prior year (2008)
was the first year of implementation of a federally mandated Stormwater / surface water program. A
rate increase of 59% (from $22 to $35 per ERU) was approved for 2009 as this program continues to be
developed.
Washington State Auditor's Office
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> The downturn in housing starts reduced developer contributions in the Wastewater and Water
utilities, causing the category of Capital Grants and Contributions to drop by $1.7 million or 50%.
> Transit Sales Tax also experienced a reduction of $0.3 million or 7.0% as a result of the national
economic recession. Fortunately, the fuel prices fell significantly from 2008 levels in about the same
amount as operating revenue so that service reductions were not required in 2009
> Stormwater expenses demonstrated an increase of $.4 million or 76.4 %, mainly due to the ramp -up in
program expenses, as the new utility continues implementation.
Of the $33 million in business type expenses, 37.3% are associated with the Wastewater program and 24.1% with
Transit, domestic water programs represent about 17 4 %, Refuse 12.8 %, Irrigation 5.3% and Stormwater 3.1 %.
The following charts depict the expenses and program revenues, with a breakdown of revenues by source for
the business type activities.
REVENUES BY SOURCE — BUSINESS TYPE ACTIVITIES
Operating Grants
and Contributions
- . 1, 4.9%
{
„'t .„ Capital Grants an
- : ' Via" Contributions
• Charges for .,r ,, 4.0%
Services f ,'�
Unrestricted
'" { i O ,.; Investment
79.9% `'„
- *�� <� Earnings
� r i ".5 r z_ 's M.. ; " 0.3%
t
., ,r ,^ d , Sales Tax
�'
Y 4
` 7 , _ � tit ;: 10.9%
i
d
v y5!
EXPENSES AND PROGRAM REVENUES — BUSINESS TYPE ACTIVITIES
18,000,000 - ® Expenses
❑ Program Revenues
16,000,000
14,000,000
12,000,000 - tr
10,000,000 ,'-'
8,000,000 m"
6,000,000 'tt '- ,' i,
' to -"^`, ,31
4,000,000 ";.(.74 ':y."'.. ' 3
4
t . y, }: I i i
.1 4 h lel
2,000,000 1 r '' A
.1 ' I I fi JN .' o.. 5 w r , i
Transit Refuse Wastewater Water Irrigation Stormwater
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Charges for services represent the majority (80 %) of revenue in these funds. The only fund that does not rely
heavily on charges for service is the Transit fund, which is subsidized by a voter approved local option sales
tax of 0.3% and a federal operating grant.
FINANCIAL ANALYSIS OF THE CITY'S FUNDS
As noted earlier, the City of Yakima uses fund accounting to ensure and demonstrate compliance with finance
related legal and regulatory requirements. Following is a financial analysis of the City's governmental and
proprietary funds.
GOVERNMENTAL FUNDS ANALYSIS
The General Fund and the Community Development Fund (which administers the City's Community
Development Block Grants) are the City's major funds (as defined in GASB #34) in 2009 Together these funds
account for 48.6% of total governmental fund assets and 33 6% of total governmental fund balances.
The focus of the City of Yakima's governmental funds is to provide information on near -term inflows, outflows,
and balances of spendable resources. In particular, unreserved fund balance may serve as a useful measure of a
government's net resources available for spending at the end of the fiscal year. As of December 31, 2009, the City's
governmental funds reported combined fund balances of about $27 4 million. Of this total amount, about $24.1
million (88 %) is unreserved and available for spending within these funds. Reserved fund balance of $3.3 million
is not available for new spending because it was previously committed to: pay debt service ($0.64 million),
generate income to pay for the perpetual care of the municipal cemetery ($0.58 million), liquidate contracts and
purchase orders of the prior period ($1.5 million) and for a variety of other restricted purposes ($0.58 million).
The General Fund is the chief operating fund of the City of Yakima. At the end of the 2009 fiscal year, unreserved
•
fund balance of the General Fund was $8.5 million, while total fund balance is about $8.8 million. Unreserved
fund balance is about 18% of total general fund expenditures (which represents about a 2.2 month reserve). Total
assets in the General Fund amounted to $15.3 million, accounting for 35.7% of total governmental fund assets.
The fund balance of the City of Yakima's General Fund is decreased by $2.2 million during the current fiscal
year. Even amid a national recession, revenues were basically flat from 2008 to 2009 However, several
factors combined to create an increase in expenditures:
➢ 2008 and 2009 bargaining unit settlements included some catch -up provisions, since all bargaining
units agreed to freeze wages in 2007,
➢ An escalation in outside jail costs,
➢ New public safety grants, and
➢ Increases in insurance rates, including medical, property and liability
With revenues feeling the pressure of the national recession and expenditures responding to the economic
issues listed above, General Fund used reserves, but not to the extent originally projected. However, it took
directed budget constraints to accomplish this.
The General Fund accounts for 63.7% of all governmental fund revenue and 57 9% of all expenditures.
The Community Development fund has an increase of $87,533 in fund balance. This fund balance fluctuates
from year to year depending on the timing of the receipt and spending of program income.
Other g overnmental funds ended with a net mcrease in fund balances of $3 4 million. While most funds had
modest changes in fund balance, much of this increase can be attributed to the unspent balance of proceeds of
a General Obligation bond for Capitol Theatre Expansion project.
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ENTERPRISE FUNDS ANALYSIS
0 Transit, Wastewater, Domestic (potable) Water, and Irrigation Water are considered major funds in the City's
2009 (GASB 34) Financial Statements while Refuse and Stormwater are nonmajor funds.
As of December 31, 2009, the City's enterprise funds (internal service fund balances are treated entirely as
governmental activities) reported combined net assets of $116 million, with $57.3 million or approximately
49 4% being contributed by the Wastewater fund. Of the $116 million, over $98.2 million (84.7 %) of net assets
is accounted for by investment in capital assets, net of related debt, $2.4 million is restricted for debt service
and $15 4 million is unrestricted. The Notes to the Financial Statements (Note 9) present segment information
that is grouped according to revenue bond requirements for these business type activities.
GENERAL FUND BUDGETARY HIGHLIGHTS
GENERAL FUND CHANGES-IN BUDGET
The following table shows the 2009 General Fund Adopted (original) Budget, the amended (final) Budget,
Actual revenue and expenditure amounts, and the variance of Actuals compared to the Final budget.
CHANGE IN GENERAL FUND BALANCE
VARIANCE WITH
FINAL BUDGET
BUDGETED AMOUNTS ACTUAL POSITIVE
ORIGINAL FINAL AMOUNTS (NEGATIVE)
0 Revenues
Taxes and Special Assessments $37,502,346 $37,502,346 $36,761,929 ($740,417)
Licenses and Permits 814,000 814,000 711,834 (102,166)
Intergovernmental Revenues 2,852,289 2,890,508 3,073,099 182,591
Charges for Services 4,880,680 4,880,680 4,719,438 (161,242)
Fines and Forfeits 1,632,900 1,632,900 1,631,593 (1,307)
Interest 850,000 850,000 556,076 (293,924)
Other Revenues 75,200 75,200 101,369 26,169
Total Revenues $48,607,415 $48,645,634 $47,555,338 ($1,090,296)
Expenditures
Current
General Government 12,266,073 12,533,822 11,508,451 1,025,371
Security of Persons and Property 32,932,000 33,875,750 33,219,445 656,305
Physical Environment 1,543,117 1,548,117 1,363,183 184,934
Economic Environment 1,008,032 1,015,558 914,254 101,304
Mental and Physical Health 20,790 86,811 86,217 594
Cultural and Recreational Environment 16,333 16,333 16,333 0
Capital Outlay
General Government 57,500 222,110 120,774 101,336
Security of Persons and Property 6,001 6,001 9,600 (3,599)
Debt Service
Principal Retirement 88,828 88,828 84,844 3,984
Interest 13,907 13,907 9,520 4,387
Total Expenditures 47,952,581 49,407,237 47,332,621 2,074,616
0 Excess (Deficiency) of Revenues
Over (Under) Expenditures $654,834 ($761,603) $222,717 $984,320
Washington State Auditor's Office
24
VARIANCE WITH
FINAL BUDGET
BUDGETED AMOUNTS ACTUAL POSITIVE
ORIGINAL FINAL AMOUNTS NEGATIVE)
Other Financing Sources (Uses)
Transfers In $40,000 $40,000 $40,000 $0
Transfers (Out) (2,382,275) (2,382,275) (2,422,933) (40,658)
Intergovernmental Agreements (39,095) (39,095) (39,095) 0
Sale of Capital Assets 0 0 975 975
Compensation for Loss of General Capital Assets 1,000 1,000 145 (855)
Total Other Financing Sources (Uses) (2,380,370) (2,380,370) (2,420,908) (40,538)
Net Change in Fund Balances (1,725,536) (3,141,973) (2,198,191) 943,782
Fund Balances - January 1 5,883,829 5,883,829 11,047,042 5,163,213
Change in Reserve for Inventory 0 0 (6,643) (6,643)
Fund Balances - December 31 $4,158,293 $2,741,856 $8,842,208 $6,100,352
During the year, the 2009 General Fund budget was increased from $47 9 million to $49 4 million, or by $1.5
million. The increases in appropriations are summarized as follows:
➢ $399,898 in outstanding encumbrances / commitments which were rebudgeted from the prior year.
➢ $729,000 for Yakima County jail costs.
➢ $180,000 for Patrol and Special Operations overtime.
➢ $40,000 for additional Indigent Defense services, designed to decrease jail time / costs.
➢ $21,478 for a federal Police training grant.
➢ $66,021 for behavioral health diversion program to direct an individual with a history of mental
illness away from incarceration into an appropriate program also designed to decrease jail costs.
➢ $18,259 for operating cost associated with the City providing purchasing services to Yakima County
The increases related to police training program and operating cost for purchasing services were funded by
a corresponding increase in revenue, while the balance of adjustments were to be funded from the General
Fund reserves and / or corresponding reductions in other expenditures.
GENERAL FUND BUDGET TO ACTUAL
Total General Fund revenues were budgeted at about $48.6 million. Actual revenue of $47.6 million resulted
in a negative variance of $1 1 million, a loss of 2.3% under the amended budget. As discussed at the Citywide
level, the recession put downward pressure on sales taxes, new construction / development fees, and interest
earnings. Therefore, in General Fund, Taxes (primarily sales tax) experienced negative results compared to
budget by about $0 74 million. Charges for Services were down $0.2 million primarily in the areas of outside
engineering and plan checking fees, and investment interest is down $0.3 million.
General Fund expenditures, including other financing uses, totaled $49 7 million compared to the final budget
of $51.8 million — resulting in a positive variance of $2.1 million or 4.1 %. Most of this variance is in the area
of General Government, and is the result primarily of a cost containment plan that held position vacancies,
coupled with a reduction in fuel prices and a reduction in retirement system rates.
Washington State Auditor's Office
25
The General Fund budget is typically built assuming positive variances in both revenue and expenditures.
Revenue is conservatively estimated, while expenditure estimates utilize highest probable costs. Historically,
actual amounts have been close to "break even ", however 2009 is an exception, since revenues were well
below even the conservative estimates. This resulted in a net decrease in fund balance of about $2.2 million
(about 4.2% of the total General Fund budget)
CAPITAL ASSET AND DEBT ADMINISTRATION
CAPITAL ASSETS
The City of Yakima's total investment in capital assets, including construction in progress, for its
governmental and business type activities as of December 31, 2009, amounts to over $282 million (net of
accumulated depreciation). This investment in capital assets includes land, buildings, system improvements,
machinery and equipment, park facilities, infrastructure, and construction in progress on buildings and
systems.
Major capital asset events during the 2009 fiscal year included the following:
➢ A variety of projects for street expansion / repair were ongoing during the year. $4 million was spent
on infrastructure projects in 2009, while the 2010 budget includes over $20.6 million in planned
projects, funded primarily by state and federal grants, matched by fuel tax and real estate excise tax.
The major project in 2009 and continuing into 2010 include a railroad grade separation project.
➢ In the area of Cultural & Recreational Environment, major capital investments include the Capitol
• Theatre expansion, funded by a Limited Tax General Obligation bond issued in 2009 About $3
million was spent on Capitol Theatre expansion in 2009
➢ Vehicles, street equipment, and trucks were added to the fleet as either additional equipment or
replacements during the year, at a cost of $1.8 million.
➢ Wastewater capital improvements include: $1 1 million was spent on an Ultraviolet Disinfection
project, funded primarily by a state Public Works Trust Fund loan and about $2.8 million on Final
SCADA Tip Out / Dystor / Daft Retrofit projects funded by the 2008 Revenue Bond. The 2010
budget includes about $2.2 million to continue upgrades at the plant, and $3 4 million for interceptor
and trunk line extensions funded by intergovernmental loans, capital reserves and current capital
transfers from the operating fund.
➢ The Domestic Water Treatment plant capital program spent about $1 9 million in 2009 The 2010
budget includes $1.2 million for a new well project at Gardner Park (partly funded by a Public
Works Trust Fund Loan), $1.5 million for Automated Meter Reading; and $.3 million for water main
replacement and designs for lagoons (funded by capital reserves and current capital transfers from
the operating fund).
➢ In 2003, the City Council approved the rebuild of the irrigation delivery system, which was estimated
to cost approximately $14 million and be completed over an eight -year period. About $1.8 million
was spent on system rebuild projects in 2009 The 2010 budget includes about $2.6 million for project
continuation, funded by utility capital rates and reserves.
110
Washington State Auditor's Office
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CAPITAL ASSETS (NET OF DEPRECIATION)
GOVERNMENTAL BUSINESS TYPE
•
ACTIVITIES ACTIVITIES TOTAL
2009 2008 2009 2008 2009 2008
Capital Assets
Land $12,858,062 $11,672,483 $2,163,373 $2,163,373 $15,021,435 $13,835,856
Building 31,541,005 33,801,128 39,769,182 29,954,689 71,310,187 63,755,817
Improvements Other Than Buildings 6,990,394 6,870,004 61,106,382 55,317,509 68,096,776 62,187,513
Machinery and Equipment 12,149,183 11,724,356 13,304,029 8,544,788 25,453,212 20,269,144
Infrastructure 68,109,569 67,479,646 0 0 68,109,569 67,479,646
Intangibles 0 0 115,659 115,659 115,659 115,659
Construction in Progress 20,644,469 19,604,064 13,571,901 30,030,490 34,216,370 49,634,554
Total Capital Assets $152,292,682 $151,151,681 $130,030,526 $126,126,508 $282,323,208 $277,278,189
Additional information on the City of Yakima's capital assets can be found in Note 4 of this report.
LONG -TERM DEBT
On December 31, 2009, the City of Yakima had total bonded debt outstanding of almost $53 1 million. Of this
amount, $27 million is classified as governmental activity and backed by the full faith and credit of the City
The remaining $26.1 million represents bonds secured solely by specific revenue sources (i.e. revenue bonds).
In 2009 the City issued $7 million Limited Tax General Obligation bonds for the expansion, rehabilitation, and
improvement of the Capitol Theatre.
The City of Yakima's total bonded debt had a net increase of $3.4 million during 2009
The City participates in a loan program administered by the State's Department of Community Development,
which is included as Intergovernmental loans in the long -term debt schedules. Infrastructure improvements,
such as street, bridge, water, or sewage projects, are eligible to compete for loan awards. This type of funding
is preferred because the interest rates for new loans range from 0.5% to 1.5% based on the percentage of local
match available for the project. (i.e. the higher the match, the lower the interest rate). In 2009, the City borrowed
$1.7 million for Water, Wastewater, and Railroad Grade Separation projects utilizing this State program.
The City's remaining capacity for non -voted debt on December 31, 2009, was approximately $53.5 million
in comparison to the total legal limit of $80.8 million. The City has a general guideline of retaining 50% of
its non -voted capacity for emergencies. The City of Yakima was upgraded in 2008 to an "A +" rating from
Standard & Poor's for general obligation debt. A summary of the City's bonded debt follows. Additional
information on the City's long -term debt can be found in Note 7
OUTSTANDING DEBT
GOVERNMENTAL BUSINESS TYPE
ACTIVITIES ACTIVITIES TOTAL
2009 2008 2009 2008 2009 2008
Outstanding Debt
General Obligation Bonds $26,978,811 $21,973,052 $0 $0 $26,978,811 $21,973,052
Revenue Bonds 0 0 26,080,000 27,725,000 26,080,000 27,725,000
Intergovernmental Loans 1,500,908 1,294,328 10,756,643 10,592,819 12,257,551 11,887,147
Special Assessment Debt 256,500 334,600 0 0 256,500 334,600
Unfunded Pension Liability 8,835,001 7,203,200 0 0 8,835,001 7,203,200
Compensated Absences 6,156,097 6,128,116 0 0 6,156,097 6,128,116
Other Debt 254,864 386,965 268,315 115,775 523,179 502,740
Total Outstanding Debt $43,982,181 $37,320,261 $37,104,958 $38,433,594 $81,087,139 $75,753,855
Washington State Auditor's Office
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ECONOMIC FACTORS
There are a number of factors that have a fiscal impact on various revenues of the City, including voter
approved initiatives over the last few years, as well as changes in State and Federal regulations. Following
is a list of significant factors, which have an impact on the City's revenues. The City is committed to the
continued application of sound fiscal management practices to ensure balanced budgets are maintained and
critical core services are provided to our citizens.
> In 2001 state voters approved Initiative 747, which capped property tax levy growth each year at a
maximum of 1 %, plus any additions for annexations and new construction. This initiative represents
a severe restriction on local government revenue growth, which makes budget balancing more
difficult because actual inflation rates have grown at an average of 3 times the 1% limitation.
> The Downtown area is in transition from a retail center to a central business district. The City is
actively participating in several projects to upgrade the downtown as follows:
O The City has been awarded State and Federal grants of about $8.6 million for infrastructure and
pedestrian improvements in the downtown core, construction began in mid 2006. Phase IV is in
the planning stages.
O The City owned Capitol Theatre, located in the center of the downtown area, is in the midst of a
major upgrade / expansion project. In 2007, the state legislature approved a sales tax credit for
performing arts centers of .025 %, which started flowing to the Yakima Regional Public Facilities
District in the spring of 2008. A phased capital plan has been developed which includes the
LTGO debt of about $7.0 million issued by the City in 2009 and serviced by the tax credit.
III Due to a state - allowed property tax exemption for new residential development in downtown,
another portion of the closed mall is being dedicated to the construction of a suite of luxury
condominiums, which have now been completed.
➢ The unemployment rate (10.7% as of March, 2010) in the County continues to be higher than the
state and national average. The County's predominant industry is agriculture and food related. This
industry has a history of high unemployment rates, seasonal employment, and low median income
(Yakima is about 64% of the state average). However, the agriculture based local economy has not
been as negatively affected in this severe national recession as many other cities around the state
and country Historically, the City's unemployment rate has run 3 - 3.5% above the national, but that
gap has shrunk to less than 1% above. Wholesale and retail trade experienced the largest loss of jobs,
reflecting sluggish consumer spending patterns of late. However, construction jobs have not declined
at the national pace, due to stability in the commercial sector.
> Efforts to diversify our economic base include expansion of the current community college to offer
four -year degree programs through major state institutions, including Washington State University
and University of Washington. Additionally, a new medical school has finished construction in the
urban area, and began instruction in late 2008.
> The City is continuing to annex property within the Urban Growth Boundary that is being hooked
up to sewer services, although the City is experiencing a slowdown in this activity as most of the
sewered properties are within the City limits.
➢ During the process of issuing bonds in 2008, Standard and Poor's (S & P) reviewed the credit rating
el for both the Wastewater / Water utility and General Obligation bonds, and both received an upgrade.
The credit rating of the Wastewater / Water utility went up two steps —from single A (A) to double A
minus (AA -) with a stable outlook. The analyst's press release indicates that this upgrade is primarily
due to the combination of:
Washington State Auditor's Office
28
• Strong fiscal management and financial performance, including net revenues sufficient to cover
debt service by more than three times during the last five years, and
•
• Governing body's policy of setting multi -year rate increases based on long -term capital and
operational needs
➢ In August Standard and Poor's also increased the City's General Obligation credit rating one notch
from A to A+ with a stable outlook. S & P's rationale and perceived credit strengths for the City
included.
• Long - standing economic role as a service and manufacturing center for a surrounding
agricultural region,
• Track record of very strong available General Fund balances, and
• Good financial policies and practices, including a minimum General Fund balance threshold and
the use of a financial forecasting model.
➢ According to S & P, the City's perceived credit weaknesses were:
• Merely adequate median household effective buying income (EBI) and historically high
unemployment rates, and
• Limited revenue flexibility under state law
➢ The next major economic development initiative that the City is embarking on is a competitive state
redevelopment / tax increment program called Local Infrastructure Financing Tool (LIFT), as set
forth in RCW 39 102. The redevelopment area consists of 556 acres adjacent to Interstate 82, formerly
used as a sawmill and plywood plant. The City received an award of up to $1 million per year for 25
years from the state to support required infrastructure improvements to service the new mixed use
proposed development. 2009 was designated as the "base year ", and the City will receive the state's
increase of both sales and property taxes as they are realized.
The 2010 budget is balanced for all funds, within guidelines established by city management, to accomplish
municipal service levels and priorities set by City Council. Although $2.6 million was eliminated from
General Government (i.e. tax - supported) 2009 budgets to balance 2010 (including about 23 positions,
with all but one of these being vacant), the major revenues were estimated assuming a flattening of the
economy Unfortunately, sales tax continue to decline in the first quarter of 2010, therefore, the City Manager
implemented additional cost containment measures in April, 2010 to maintain a balanced budget. Sales tax
receipts in both April and May 2010 were slightly higher than the same months in 2009, so it appears that the
significant decline is beginning to level off. To date, overall budget results are performing as expected.
REQUESTS FOR INFORMATION
This financial report is designed to provide a general overview of the City of Yakima's finances for all those
with an interest in the government's finances. This report, along with the City's published budget documents
are posted on the City's website at www.ci.yakima.wa.us. Questions concerning any of the information
provided in this report or requests for additional financial information should be addressed to City of Yakima
— Finance Director, 129 North Second Street, Yakima, WA 98901
Washington State Auditor's Office
29
CITY OF / filth
S STATEMENT OF NET ASSETS
December 31, 2009
With comparative totals for December 31, 2008 Page 1 of 1
GOVERNMENTAL BUSINESS TYPE TOTAL
ACTIVITIES ACTIVITIES 2009 2008
ASSETS
Cash and Cash Equivalents $27,125,400 $5,208,649 $32,334,049 $34,169,777
Investments at Amortized Cost 12,298,180 16,506,248 28,804,428 26,678,812
Receivables — Net 7,519,468 2,569,325 10,088,793 10,261,301
Due from Other Government Units 1,793,538 27,801 1,821,339 2,079,965
Notes Receivable 4,892,537 0 4,892,537 4,935,316
Inventories 581,337 207,500 788,837 807,144
Unamortized Debt Issue Cost 0 179,785 179,785 195,362
Restricted Assets
Cash and Cash Equivalents 173,510 2,365,700 2,539,210 2,618,817
Fiscal Agent 10,620 0 10,620 10,620
Capital Assets — Net of Accumulated Depreciation
Land 12,858,062 2,163,373 15,021,435 13,835,856
Buildings 31,541,005 39,769,182 71,310,187 63,755,817
Improvements Other Than Buildings 6,990,394 61,106,382 68,096,776 62,187,513
Machinery & Equipment 12,149,183 13,304,029 25,453,212 20,269,144
0 Construction in Process 20,644,469 13,571,901 34,216,370 49,634,554
Intangibles 0 115,659 115,659 115,659
Infrastructure 68,109,569 0 68,109,569 67,479,646
Total Assets $206,687,272 $157,095,534 $363,782,806 $359,035,303
LIABILITIES
Accounts Payable and Other Current Liabilities $8,819,847 $2,171,592 $10,991,439 $10,846,695
Accrued Liabilities 3,652,633 1,843,316 5,495,949 5,761,587
Due to Other Government Units 75,639 0 75,639 77,092
Liabilities Payable from Restricted Assets 173,510 0 173,510 257,143
Noncurrent Liabilities
Special Assessment Debt with Governmental Commitment 256,500 0 256,500 334,600
Due Within One Year 2,684,782 2,769,843 5,454,625 5,002,134
Due in More than One Year 41,040,899 34,335,103 75,376,002 70,578,800
Total Liabilities 56,703,810 41,119,854 97,823,664 92,858,051
NET ASSETS
Invested in Capital Assets, Net of Related Debt 125,768,431 98,161,351 223,929,782 216,755,966
Restricted
Debt Service 643,219 2,365,700 3,008,919 3,157,603
Capital Projects 2,241,478 0 2,241,478 2,681,458
Other Purposes 1,211,422 0 1,211,422 1,007,876
Notes Receivable 5,191,424 0 5,191,424 5,319,437
Unrestricted 14,927,488 15,448,629 30,376,117 37,254,912
Total Net Assets $149,983,462 $115,975,680 $265,959,142 $266,177,252
0
The Notes to the Financial Statements, found in the Basic Financial section, are an integral part of this statement.
Washington State Auditor's Office
30
CITY OF / UIl2
STATEMENT OF ACTIVITIES
II
For the Year Ended December 31, 2009
With comparative totals for December 31, 2008 Page 1 of 1
NET (EXPENSE) REVENUE
PROGRAM REVENUES AND CHANGES IN NET ASSETS
CHARGES OPERATING CAPITAL BUSINESS
FOR GRANTS & GRANTS & GOVERNMENT TYPE TOTAL
EXPENSES SERVICES CONT'S CONT'S ACTIVITIES ACTIVITIES 2009 2008
FUNCTIONS /PROGRAMS
Governmental Activities
General Government $8,656,161 $12,518 $0 $0 ($8,643,643) $0 ($8,643,643) ($8,652,605)
Security of Persons & Property 40,008,664 2,538,686 4,152,878 434,739 (32,882,361) 0 (32,882,361) (32,782,242)
Physical Environment 1,189,908 648,713 0 14,290 (526,905) 0 (526,905) (374,019)
Transportation 11,108,811 59,106 33,535 4,353,333 (6,662,837) 0 (6,662,837) (8,563,472)
Economic Environment 4,821,392 1,595,042 2,111,463 14,911 (1,099,976) 0 (1,099,976) 374,147
Mental & Physical Health 86,217 0 0 0 (86,217) 0 (86,217) (19,418)
Cultural Sr Rec Environment 7,020,665 2,069,724 157,865 272,993 (4,520,083) 0 (4,520,083) (3,625,050)
Interest on Long -Term Debt 1,004,163 0 0 0 (1,004,163) 0 (1,004,163) (862,646)
Total Governmental Activities 73,895,981 6,923,789 6,455,741 5,090,266 (55,426,185) 0 (55,426,185) (54,505,305)
Business Type Activities
Transit 7,928,658 931,119 1,851,249 383,191 0 (4,763,099) (4,763,099) (5,051,961)
Refuse 4,217,711 4,654,440 25,000 0 0 461,729 461,729 272,307
Wastewater 12,297,172 15,941,146 24,491 778,613 0 4,447,078 4,447,078 5,204,929
Water 5,748,350 7,096,553 10,986 487,622 0 1,846,811 1,846,811 1,343,316
Irrigation 1,732,812 2,646,392 0 0 0 913,580 913,580 867,874
Stormwater 1,028,178 1,707,076 108,682 9,600 0 797,180 797,180 949,930
Total Business Type Activities 32,952,881 32,976,726 2,020,408 1,659,026 0 3,703,279 3,703,279 3,586,395
Total $106,848,862 $39,900,515 $8,476,149 $6,749,292 (55,426,185) 3,703,279 (51,722,906) (50,918,910)
GENERAL REVENUES
Taxes
Property Taxes 14,261,201 0 14,261,201 13,782,301
Sales and Use Taxes 17,810,213 4,489,747 22,299,960 23,818,337
Franchise and Utility Taxes 10,292,854 0 10,292,854 9,583,683
Excise Taxes 2,412,122 0 2,412,122 2,839,410
Penalties and Interest 5,155 0 5,155 3,214
State Entitlements 3,738,559 0 3,738,559 3,614,482
Unrestricted Invest Earnings 556,076 100,232 656,308 1,061,343
Miscellaneous 70,276 16,172 86,448 147,134
Gam / Loss on Sale - Cap Assets (2,217,530) (17,282) (2,234,812) 1,420,342
Transfers 4,188,083 (4,201,083) (13,000) (524,174)
Debt Issue Cost 0 0 0 (3,696)
Total General Revenue, Transfers, Special & Extraordinary Items 51,117,009 387,786 51,504,795 55,742,376
Change in Net Assets (4,309,176) 4,091,065 (218,111) 4,823,466
Net Assets - Beginning 154,292,637 111,884,612 266,177,249 261,353,778
Net Assets - Ending $149,983,461 $115,975,677 $265,959,138 $266,177,244
•
The Notes to the Financial Statements, found in the Basic Financial section, are an integral part of this statement.
Washington State Auditor's Office
31
CITY OF Ya/cu>r t,
0 BALANCE SHEET
GOVERNMENTAL FUNDS
December 31, 2009
With comparative totals for December 31, 2008 Page 1 of 2
#000 #124 OTHER TOTAL
GENERAL COMMUNITY GOVERNMENTAL GOVERNMENTAL FUNDS
FUND DEVELOPMENT FUNDS 2009 2008
ASSETS
Cash & Equity in Pooled Investments $1,690,087 $0 $20,186,433 $21,876,520 $17,566,584
Deposits w / Fiscal Agent / Trustee 173,510 0 0 173,510 257,143
Receivables
Taxes 4,377,582 0 233,866 4,611,448 4,530,322
Accounts 1,473,515 0 288,406 1,761,921 1,572,535
Special Assessments 0 0 13,971 13,971 4,576
LID Assessments — Delinquent 0 0 24,669 24,669 30,255
LID Assessments — Deferred 0 0 274,218 274,218 353,866
Notes / Contracts 0 4,882,237 10,300 4,892,537 4,935,316
Interest / Penalties 100,694 0 0 100,694 185,505
Due from Other Funds 136,212 0 0 136,212 67,319
Due from Other Government Units 101,902 633,620 932,786 1,668,308 1,854,469
ilio Inventories 56,999 0 0 56,999 63,642
Investments, at Amortized Cost 7,153,387 0 3,731 7,157,118 8,251,997
Total Assets $15,263,888 $5,515,857 $21,968,380 $42,748,125 $39,673,529
110
The Notes to the Financial'Statements, found in the Basic Financial section, are an integral part of this statement.
Washington State Auditor's Office
32
CITY OF iziu a,
BALANCE SHEET
•
GOVERNMENTAL FUNDS
December 31, 2009
With comparative totals for December 31, 2008 Page 2 of 2
#000 #I24 OTHER TOTAL
GENERAL COMMUNITY GOVERNMENTAL GOVERNMENTAL FUNDS
FUND DEVELOPMENT FUNDS 2009 2008
LIABILITIES AND FUND BALANCES
Liabilities
Warrants / Accounts Payable $744,140 $97,725 $2,062,944 $2,904,809 $1,522,573
Wages / Benefits Payable 3,646,341 57,514 816,768 4,520,623 4,241,572
Contracts Payable 0 0 114,240 114,240 104,275
Due to Other Funds 0 101,078 35,134 136,212 67,319
Due to Other Government Units 69,040 0 6,599 75,639 77,092
Deposits Payable 181,349 0 374,600 555,949 600,619
Deferred Revenue 1,607,300 4,882,237 351,696 6,841,233 6,646,425
Custodial Accounts 173,510 0 0 173,510 257,143
Total Liabilities $6,421,680 $5,138,554 $3,761,981 $15,322,215 $13,517,018
Fund Balances
Reserved
Inventory $56,999 $0 $0 $56,999 $63,642
Encumbrances 299,225 0 1,192,351 1,491,576 562,394
Continuing Appropriations 0 0 517,880 517,880 151,173
Debt Service 0 0 643,219 643,219 795,929
Endowment 0 0 578,511 578,511 566,365
Parking and Business Improvement 0 0 11,053 11,053 8,963
Unreserved
General Fund 8,485,984 0 0 8,485,984 10,583,502
Special Revenue Funds 0 377,303 6,590,941 6,968,244 7,385,325
Capital Projects Funds 0 0 8,672,444 8,672,444 6,039,218
Total Fund Balances $8,842,208 $377,303 $18,206,399 $27,425,910 $26,156,511
Total Liabilities and Fund Balances $15,263,888 $5,515,857 $21,968,380
ill
The Notes to the Financial Statements, found in the Basic Financial section, are an integral part of this statement.
Washington State Auditor's Office
33
CITY OF Xt!C[Itt!L
•RECONCILIATION OF THE BALANCE SHEET TO THE GOVERNMENT-WIDE
STATEMENT OF NET ASSETS
For the Year Ended December 31, 2009
With comparative totals for December 31, 2008 Page 1 of 1
TOTAL
GOVERNMENTAL FUNDS
2009 2008
Total Fund Balances (as shown on the Governmental Funds Balance Sheet) $27,425,910 $26,156,511
Amounts reported for governmental activities in the statement of net assets are
different because:
Capital assets used in governmental activities are not financial resources and, 143,501,016 142,789,029
therefore, are not reported in the funds.
Other long -term assets are not available to pay for current - period expenditures 6,841,233 6,646,425
and, therefore, are deferred in the funds.
Internal service funds are used by management to charge the costs of services 16,340,115 16,138,357
to individual funds. The assets and liabilities of the internal service funds are
included in government activities in the statement of net assets.
0 Long -term liabilities, including bonds payable, are not due and payable in the (43,982,181) (37,320,261)
current period and, therefore, are not reported in the funds.
Accrued interest payable on General Obligation Debt (142,631) (117,424)
Net assets of governmental activities $149,983,462 $154,292,637
•
The Notes to the Financial Statements, found in the Basic Financial section, are an integral part of this statement.
Washington State Auditor's Office
34
CITY OF Y Iota
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES,
GOVERNMENTAL FUNDS
For the Year Ended December 31, 2009
With comparative totals for December 31, 2008 Page 1 of 2
#000 #124 OTHER TOTAL
GENERAL COMMUNITY GOVERNMENTAL GOVERNMENTAL FUNDS
FUND DEVELOPMENT FUNDS 2009 2008
REVENUES
Taxes and Special Assessments $36,761,929 $0 $11,494,375 $48,256,304 $48,426,630
Licenses and Permits 711,834 0 0 711,834 993,122
Intergovernmental Revenues 3,073,099 2,111,463 9,877,168 15,061,730 11,993,793
Charges for Services 4,719,438 486,419 1,212,844 6,418,701 6,536,514
Fines and Forfeits 1,631,593 0 0 1,631,593 1,582,815
Interest 556,076 29,893 167,203 753,172 1,406,974
Other Revenues 101,369 1,621 1,731,382 1,834,372 1,681,236
Total Revenues 47,555,338 2,629,396 24,482,972 74,667,706 72,621,084
EXPENDITURES
Current
General Government 11,508,451 0 117,924 11,626,375 11,367,421
Security of Persons and Property 33,219,445 0 4,687,471 37,906,916 34,815,209
Physical Environment 1,363,183 0 289,634 1,652,817 1,679,504
Transportation 0 0 5,395,000 5,395,000 5,777,109
Economic Environment 914,254 2,541,863 1,322,272 4,778,389 4,143,741
Mental and Physical Health 86,217 0 0 86,217 19,418
Cultural and Recreational Environment 16,333 0 6,045,662 6,061,995 6,216,680
Capital Outlay
General Government 120,774 0 386,879 507,653 551,177
Security of Persons and Property 9,600 0 1,045,001 1,054,601 308,146
Physical Environment 0 0 851,145 851,145 83,020
Transportation 0 0 4,396,229 4,396,229 4,233,601
Economic Environment 0 0 218,874 218,874 2,055,128
Cultural & Recreational Environment 0 0 3,613,463 3,613,463 1,626,484
Debt Service
Principal Retirement 84,844 0 2,548,016 2,632,860 2,551,597
Interest 9,520 0 969,436 978,956 860,933
Total Expenditures 47,332,621 2,541,863 31,887,006 81,761,490 76,289,168
Excess (Deficiency) of Revenues
Over (Under) Expenditures $222,717 $87,533 ($7,404,034) ($7,093,784) ($3,668,084)
III
The Notes to the Financial Statements, found in the Basic Financial section, are an integral part of this statement.
Washington State Auditor's Office
35
CITY OF Yit A/ttfl
• ;STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
For the Year Ended December 31, 2009
With comparative totals for December 31, 2008 Page 2 of 2
#000 #I24 OTHER TOTAL
GENERAL COMMUNITY GOVERNMENTAL GOVERNMENTAL FUNDS
FUND DEVELOPMENT FUNDS 2009 200E
OTHER FINANCING SOURCES (USES)
Proceeds from Long Term Debt — GO Bonds $0 $0 $7,003,898 $7,003,898 $2,946,303
Proceeds from Intergovernmental Loans 0 0 600,000 600,000 241,500
Transfers In 40,000 0 6,099,059 6,139,059 5,774,525
Transfers (Out) (2,422,933) 0 (3,002,802) (5,425,735) (5,338,433)
Intergovernmental Agreements (39,095) 0 0 (39,095) (39,095)
Sale of Capital Assets 975 0 9,150 10,125 13,353
Compensation for Loss of Gen. Capital Assets 145 0 81,430 81,575 141,640
Total Other Financing Sources (Uses) (2,420,908) 0 10,790,735 8,369,827 3,739,793
Net Change in Fund Balances (2,198,191) 87,533 3,386,701 1,276,043 71,709
Fund Balances — January 1 11,047,042 289,770 14,819,699 26,156,511 26,071,422
Change in Reserve for Inventory (6,643) 0 0 (6,643) 13,380
Fund Balances — December 31 $8,842,208 $377,303 $18,206,400 $27,425,911 $26,156,511
•
The Notes to the Financial Statements, found in the Basic Financial section, are an integral part of this statement.
Washington State Auditor's Office
36
CITY OF illlitta
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, 2009
With comparative totals for December 31, 2008 Page 1 of 1
2009 2008
Net change in fund balances as shown on Governmental Funds Statement of $1,276,043 $71,709
Revenues, Expenditures, and Changes in Fund Balance.
Governmental funds report capital outlays as expenditures. However, in the 2,659,664 929,850
statement of activities the cost of those assets is allocated over their estimated
useful lives and reported as depreciation expense. This is the amount by which
capital outlays exceeded depreciation in the current period.
The net effect of various miscellaneous transactions involving capital assets (i.e. (1,947,677) 1,905,515
sales, trade -ins, donations and physical inventory adjustments) is to decrease net
assets.
Revenues in the statement of activities that do not provide current financial 194,806 (496,876)
resources are not reported as revenues in the funds.
The issuance of long -term debt (e.g , bonds, leases) provides current financial (5,002,138) (639,903) ID
resources to governmental funds, while the repayment of the principal of long-
term debt consumes the current financial resources of governmental funds.
Neither transaction, however, has any effect on net assets. Also, governmental
funds report the effect of issuance costs, premiums, discounts, and similar items
when debt is first issued, whereas these amounts are deferred and amortized in the
statement of activities.
Some expenses reported in the statement of activities do not require the use of (1,691,632) (2,786,895)
current financial resources and therefore are not reported as expenditures in
governmental funds (compensated absences,OPEB, inventory).
Internal service funds are used by management to charge the costs of services to 201,758 129,757
individual funds. The net revenue (expenses) of certain internal service funds is
reported with governmental activities.
Change in net assets, as reflected on the Statement of Activities ($4,309,176) ($886,843)
The Notes to the Financial Statements, found in the Basic Financial section, are an integral part of this statement.
Washington State Auditor's Office
37
CITY OF / tat
• STATEMENT OF REVENUES, EXPENDITURES & CHANGES
IN FUND BALANCES - BUDGET AND ACTUAL
GENERAL FUND
For the Year Ended December 31, 2009 Page 1 of 1
VARIANCE WITH
FINAL BUDGET
BUDGETED AMOUNTS ACTUAL POSITIVE
ORIGINAL FINAL AMOUNTS (NEGATIVE)
REVENUES
Taxes and Special Assessments $37,502,346 $37,502,346 $36,761,929 ($740,417)
Licenses and Permits 814,000 814,000 711,834 (102,166)
Intergovernmental Revenues 2,852,289 2,890,508 3,073,099 182,591
Charges for Services 4,880,680 4,880,680 4,719,438 (161,242)
Fines and Forfeits 1,632,900 1,632,900 1,631,593 (1,307)
Interest 850,000 850,000 556,076 (293,924)
Other Revenues 75,200 75,200 101,369 26,169
Total Revenues 48,607,415 48,645,634 47,555,338 (1,090,296)
EXPENDITURES
Current
General Government 12,266,073 12,533,822 11,508,451 1,025,371
0 Security of Persons and Property 32,932,000 33,875,750 33,219,445 656,305
Physical Environment 1,543,117 1,548,117 1,363,183 184,934
Economic Environment 1,008,032 1,015,558 914,254 101,304
Mental & Physical Health 20,790 86,811 86,217 594
Cultural & Recreational Environment 16,333 16,333 16,333 0
Capital Outlay
General Government 57,500 222,110 120,774 101,336
Security of Persons and Property 6,001 6,001 9,600 (3,599)
Debt Service
Principal Retirement 88,828 88,828 84,844 3,984
Interest 13,907 13,907 9,520 4,387
Total Expenditures 47,952,581 49,407,237 47,332,621 2,074,616
Excess (Deficiency) of Revenues
Over (Under) Expenditures $654,834 ($761,603) $222,717 $984,320
OTHER FINANCING SOURCES (USES)
Transfers In $40,000 $40,000 $40,000 $0
Transfers (Out) (2,382,275) (2,382,275) (2,422,933) (40,658)
Intergovernmental Agreements (39,095) (39,095) (39,095) 0
Sale of Capital Assets 0 0 975 975
Compensation for Loss of General Capital Assets 1,000 1,000 145 (855)
Total Other Financing Sources (Uses) (2,380,370) (2,380,370) (2,420,908) (40,538)
Net Change in Fund Balances (1,725,536) (3,141,973) (2,198,191) 943,782
Fund Balances - January 1 5,883,829 5,883,829 11,047,042 5,163,213
hange in Reserve for Inventory 0 0 (6,643) (6,643)
Fund Balances - December 31 $4,158,293 $2,741,856 $8,842,208 $6,100,352
The Notes to the Financial Statements, found in the Basic Financial section, are an integral part of this statement.
Washington State Auditor's Office
38
CITY OF YitI6Wilt
STATEMENT OF REVENUES, EXPENDITURES & CHANGES
III
IN FUND BALANCES - BUDGET AND ACTUAL
COMMUNITY DEVELOPMENT FUND
For the Year Ended December 31, 2009 Page 1 of 1
VARIANCE WITH
FINAL BUDGET
BUDGETED AMOUNTS ACTUAL POSITIVE
ORIGINAL FINAL AMOUNTS (NEGATIVE)
REVENUES
Intergovernmental Revenues $1,620,091 $3,828,452 $2,111,463 ($1,716,989)
Charges for Services 531,000 531,000 486,419 (44,581)
Interest 27,650 27,650 29,893 2,243
Other Revenues 1,500 1,500 1,621 121
Total Revenues 2,180,241 4,388,602 2,629,396 (1,759,206)
EXPENDITURES
Current
Economic Environment 2,317,063 4,071,871 2,541,863 1,530,008
Capital Outlay
Transportation 0 453,553 0 453,553
Total Expenditures 2,317,063 4,525,424 2,541,863 1,983,561
Excess (Deficiency) of Revenues
•
Over (Under) Expenditures ($136,822) ($136,822) $87,533 $224,355
Net Change in Fund Balances ($136,822) ($136,822) $87,533 $224,355
Fund Balances - January 1 782,545 782,545 289,770 (492,775)
Fund Balances - December 31 $645,723 $645,723 $377,303 ($268,420)
411
The Notes to the Financial Statements, found in the Basic Financial section, are an integral part of this statement.
Washington State Auditor's Office
39
CITY OF / t/I/IL
0 STATEMENT OF NET ASSETS
PROPRIETARY FUNDS
December 31, 2009
With comparative totals for December 31, 2008 Page 1 of 4
BUSINESS TYPE ACTIVITIES - ENTERPRISE FUNDS
#462 & #364 #973 #974
TRANSIT WASTEWATER WATER
ASSETS
Current Assets
Cash & Equity in Pooled Investments $679,816 $1,706,504 $1,318,028
Deposits w / Fiscal Agent / Trustee 0 0 0
Receivables
Accounts / Taxes (Net) 803,459 1,253,168 10,126
Interest / Penalties 0 0 0
Other Receivables 0 7,500 0
Due from Other Government Units 27,801 0 0
Inventories 0 0 207,500
Investments, at Amortized Cost 1,500,000 8,506,248 4,000,000
Total Current Assets 3,011,076 11,473,420 5,535,654
Noncurrent Assets
III Restricted Assets
Cash 0 1,969,220 361,044
Land 1,307,989 583,270 173,614
Buildings 7,363,248 66,439,113 8,548,449
Other Improvements 135,742 45,118,296 40,638,105
Machinery & Equipment 9,126,574 10,748,850 3,065,655
Accumulated Depreciation (7,623,340) (57,636,828) (21,890,055)
Construction in Progress 689,731 7,077,061 1,624,275
Intangibles 0 0 221,830
Unamortized Debt Issue Costs 0 122,479 17,727
Total Noncurrent Assets 10,999,944 74,421,461 32,760,644
Total Assets $14,011,020 $85,894,881 $38,296,298
•
The Notes to the Financial Statements, found in the Basic Financial section, are an integral part of this statement.
Washington State Auditor's Office
40
CITY OF 1/1/ JIAi
STATEMENT OF NET ASSETS
PROPRIETARY FUNDS
December 31, 2009
With comparative totals for December 31, 2008 Page 2 of 4
BUSINESS TYPE ACTIVITIES - ENTERPRISE FUNDS - GOVERNMENTAL ACTIVITIES -
#975 OTHER TOTAL INTERNAL
IRRIGATION ENTERPRISE FUNDS 2009 2008 SERVICE FUNDS
$726,702 $777,599 $5,208,649 $11,614,113 $5,248,880
0 0 0 0 10,620
206,742 279,358 2,552,853 2,823,850 732,547
8,972 0 8,972 8,972 0
0 0 7,500 7,500 0
0 0 27,801 225,496 125,230
0 0 207,500 201,139 524,338
2,000,000 500,000 16,506,248 12,007,244 5,141,062
2,942,416 1,556,957 24,519,523 26,888,314 11,782,677
35,436 0 2,365,700 2,361,674 0
•
98,500 0 2,163,373 2,163,373 0
418,532 0 82,769,342 70,673,361 37,397
12,151,844 440,334 98,484,321 91,019,818 112,131
73,816 11,879 23,026,774 17,361,949 20,517,112
(3,036,509) (20,285) (90,207,017) (85,344,316) (11,874,974)
4,153,487 27,346 13,571,900 30,030,490 0
0 0 221,830 221,830 0
39,579 0 179,785 195,362 0
13,934,685 459,274 132,576,008 128,683,541 8,791,666
$16,877,101 $2,016,231 $157,095,531 $155,571,855 $20,574,343
The Notes to the Financial Statements, found in the Basic Financial section, are an integral part of this statement.
Washington State Auditor's Office
41
CITY OF Yititotet,
0 STATEMENT OF NET ASSETS
PROPRIETARY FUNDS
December 31, 2009
With comparative totals for December 31, 2008 Page 3 of 4
BUSINESS TYPE ACTIVITIES - ENTERPRISE FUNDS -
#462 & #364 #973 #974
TRANSIT WASTEWATER WATER
LIABILITIES
Current Liabilities
Warrants / Accounts Payable $78,396 $368,290 $78,668
Wages / Benefits Payable 329,458 431,686 209,469
Compensated Absences Payable 343,744 588,176 190,368
Claims and Judgments Payable 0 0 0
Accrued Payables 0 166,778 21,072
Deposits Payable 6,100 4,500 197,739
Current Portion Long -Term Debt 0 764,246 300,597
Restricted Payables
Current Portion Long Term Debt 0 1,383,750 206,250
Total Current Liabilities 757,698 3,707,426 1,204,163
Noncurrent Liabilities
40 Bonds Payable 0 18,196,687 1,598,313
Unamortized Bond Discount / Premium 0 404,458 69,766
Deferred Amount On Debt Refunding 0 (78,058) (49,157)
Loans Payable — Long -Term 0 6,352,370 3,374,453
Total Noncurrent Liabilities 0 24,875,457 4,993,375
Total Liabilities 757,698 28,582,883 6,197,538
NET ASSETS
Invested in Capital Assets, Net of Related Debt 10,999,944 50,575,420 26,878,306
Restricted for Debt Service 0 1,969,220 361,044
Unrestricted 2,253,378 4,767,358 4,859,410
Total Net Assets $13,253,322 $57,311,998 $32,098,760
•
The Notes to the Financial Statements, found in the Basic Financial section, are an integral part of this statement.
Washington State Auditor's Office
42
CFIY OF / MILL
STATEMENT OF NET ASSETS
•
PROPRIETARY FUNDS
December 31, 2009
With comparative totals for December 31, 2008 Page 4 of 4
BUSINESS TYPE ACTIVITIES - ENTERPRISE FUNDS - GOVERNMENTAL ACTIVITIES -
#975 OTHER TOTAL INTERNAL
IRRIGATION ENTERPRISE FUNDS 2009 2008 SERVICE FUNDS
$375,440 $73,381 $974,175 $2,178,185 $630,394
52,941 173,863 1,197,417 1,125,638 208,072
49,816 205,449 1,377,553 1,330,613 256,576
0 0 0 0 3,139,186
69,574 0 257,424 267,650 0
0 0 208,339 189,884 0
0 0 1,064,843 979,235 0
115,000 0 1,705,000 1,645,000 0
662,771 452,693 6,784,751 7,716,205 4,234,228
4,580,000 0 24,375,000 26,080,000 0
III
(113,729) 0 360,495 404,052 0
0 0 (127,215) (175,699) 0
0 0 9,726,823 9,662,685 0
4,466,271 0 34,335,103 35,971,038 0
5,129,042 452,693 41,119,854 43,687,243 4,234,228
9,248,404 459,274 98,161,348 96,425,813 8,791,666
35,436 0 2,365,700 2,361,674 0
2,464,219 1,104,264 15,448,629 13,097,125 7,548,449
$11,748,059 $1,563,538 $115,975,677 $111,884,612 $16,340,115
III
The Notes to the Financial Statements, found in the Basic Financial section, are an integral part of this statement.
Washington State Auditor's Office
43
CITY OF /AK IFisii
O STATEMENT OF REVENUES, EXPENSES & CHANGES IN FUND NET ASSETS
PROPRIETARY FUNDS
For the Year Ended December 31, 2009
With comparative totals for December 31, 2008 Page 1 of 2
— BUSINESS TYPE ACTIVITIES — ENTERPRISE FUNDS —
#462 & #364 #973 #974
TRANSIT WASTEWATER WATER
OPERATING REVENUES
Charges for Services $931,119 $15,933,456 $7,085,787
Charges for Insurance 0 0 0
Employer Contributions 0 0 0
Employee Contributions 0 0 0
Other Operating Revenues 0 7,690 10,766
Total Operating Revenues 931,119 15,941,146 7,096,553
OPERATING EXPENSES
Operations and Maintenance 6,090,352 6,661,512 2,060,729
Administration / Overhead 869,282 1,447,551 1,973,118
Taxes 0 2,716,749 1,489,567
Depreciation / Amortization 969,024 2,755,730 1,113,629
Other Benefits 0 0 0
0 Total Operating Expenses 7,928,658 13,581,542 6,637,043
Operating Income (Loss) (6,997,539) 2,359,604 459,510
NON - OPERATING REVENUES (EXPENSES)
Operating Grants and Subsidies 6,340,996 0 0
Interest Revenue 12,915 36,153 6,664
Other Non - Operating Revenues 16,172 24,491 10,986
Interest Expenses 0 (767,762) (102,664)
Amortization of Bond Payment Discount 0 (9,969) (2,870)
Gain (Loss) on Capital Assets Disposition (19,782) 2,500 0
Non - Operating Revenue Net of Expenses 6,350,301 (714,587) (87,884)
Income (Loss) Before Contributions and Transfers (647,238) 1,645,017 371,626
Capital Contributions 383,191 778,613 487,622
Transfers In 185,000 232,939 0
Transfers (Out) 0 (542,516) (227,497)
Change in Net Assets (79,047) 2,114,053 631,751
Total Net Assets — January 1 13,332,369 55,197,945 31,467,009
Total Net Assets — December 31 $13,253,322 $57,311,998 $32,098,760
10
The Notes to the Financial Statements, found in the Basic Financial section, are an integral part of this statement.
Washington State Auditor's Office
44
CITY OF / I.IILQi
STATEMENT OF REVENUES, EXPENSES & CHANGES IN FUND NET ASSETS •
PROPRIETARY FUNDS
For the Year Ended December 31, 2009
With comparative totals for December 31, 2008 Page 2 of 2
BUSINESS TYPE ACTIVITIES - ENTERPRISE FUNDS - GOVERNMENTAL ACTIVITIES -
#975 OTHER TOTAL INTERNAL
IRRIGATION ENTERPRISE FUNDS 2009 2008 SERVICE FUNDS
$2,642,753 $6,360,693 $32,953,808 $30,339,901 $6,021,973
0 0 0 0 2,382,676
0 0 0 0 9,129,005
0 0 0 0 1,628,225
3,639 823 22,918 58,642 908
2,646,392 6,361,516 32,976,726 30,398,543 19,162,787
1,067,846 4,973,085 20,853,524 20,427,542 6,360,080
200,623 615,781 5,106,355 4,808,132 2,721,108
46,143 64,686 4,317,145 4,022,364 0
200,839 10,768 5,049,990 4,965,865 1,387,780
0 0 0 0 9,674,428
1,515,451 5,664,320 35,327,014 34,223,903 20,143,396
al
1,130,941 697,196 (2,350,288) (3,825,360) (980,609)
0 133,682 6,474,678 6,554,365 0
43,500 1,000 100,232 198,389 195,585
0 0 51,649 376,157 1,008,835
(209,696) 0 (1,080,122) (1,224,105) 0
(7,665) 0 (20,504) (39,543) 0
0 0 (17,282) 1,285,475 (41,497)
(173,861) 134,682 5,508,651 7,150,738 1,162,923
957,080 831,878 3,158,363 3,325,378 182,314
0 9,600 1,659,026 3,345,196 6,444
0 0 417,939 350,707 50,000
(112,250) (262,000) (1,144,263) (1,310,973) (37,000)
844,830 579,478 4,091,065 5,710,308 201,758
10,903,229 984,060 111,884,612 106,174,304 16,138,357
$11,748,059 $1,563,538 $115,975,677 $111,884,612 $16,340,115
0
The Notes to the Financial Statements, found in the Basic Financial section, are an integral part of this statement.
Washington State Auditor's Office
45
CITY OF Yi linit
0 STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
For the Year Ended December 31, 2009
With comparative totals for December 31, 2008 Page 1 of 4
-� BUSINESS TYPE ACTIVITIES - ENTERPRISE FUNDS -
#462 & #364 #973 #974
TRANSIT WASTEWATER WATER
CASH FLOWS FROM OPERATING ACTIVITIES
Cash Received from Customers $931,119 $16,267,897 $7,030,300
Contributions Received — Employer and Employee 0 0 0
Cash Paid to Suppliers for Goods and Services (4,687,508) (4,195,621) (2,333,002)
Cash Paid for Salaries and Benefits (3,390,901) (4,531,567) (2,200,229)
Other Operating Revenues Collected 0 7,690 10,766
Cash Paid to Claimants and Beneficiaries 0 0 0
Cash Paid in Lieu of Taxes 0 (2,062,101) (994,227)
Net Cash Provided by Operating Activities (7,147,290) 5,486,298 1,513,608
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Operating Grants Received / Sales Tax 6,364,850 0 0
Transfers In from Other Funds 0 0 0
Transfers Out to Other Funds 0 0 0
Net Cash Provided by Noncapital Financing Activities 6,364,850 0 0
I V CASH FLOWS FROM CAPITAL FINANCING ACTIVITIES
Proceeds from Public Works Trust / SIED Loan / Revenue Bonds 0 115,000 1,015,740
Cash Received for Debt Service from Other Governments 0 18,790 0
Cash Received from Disposal of Capital Assets 1,027 2,500 0
Cash Contributions in Aid of Construction 16,172 752,938 358,642
Principal Paid on Revenue Bonds 0 (1,339,987) (195,012)
Principal Paid on Public Works Trust / SIED Loan 0 (763,096) (217,898)
Capital Expenditures Paid (830,459) (3,953,048) (2,235,119)
Interest and Other Debt Service Paid 0 (777,427) (102,212)
Capital Grants Received 551,191 0 0
Other Non - Operating Capital Revenue 0 5,701 10,986
Transfer In 185,000 232,939 0
Transfer Out 0 (542,516) (227,497)
Net Cash Used for Capital Financing Activities (77,069) (6,248,206) (1,592,370)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from Sale of Investment Securities 0 5,000,996 0
Interest Received on Investments 12,915 36,153 6,664
Purchase of Investment Securities (1,500,000) (8,500,000) 0
Net Cash Provided by Investing Activities (1,487,085) (3,462,851) 6,664
Net Increase (Decrease) in Cash and Cash Equivalents (2,346,594) (4,224,759) (72,098)
Cash and Cash Equivalents at Beginning of Year 3,026,410 7,900,483 1,751,170
Cash and Cash Equivalents at End of Year $679,816 $3,675,724 $1,679,0
41)
The Notes to the Financial Statements, found in the Basic Financial section, are an integral part of. this statement.
Washington State Auditor's Office
46
CITY OF ILila
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
For the Year Ended December 31, 2009
With comparative totals for December 31, 2008 Page 2 of 4
BUSINESS TYPE ACTIVITIES - ENTERPRISE FUNDS - GOVERNMENTAL ACTIVITIES -
#975 OTHER TOTAL INTERNAL
IRRIGATION ENTERPRISE FUNDS 2009 2008 SERVICE FUNDS
$2,629,608 $6,364,627 $33,223,551 $30,557,158 $6,165,024
0 0 0 0 12,945,649
(708,165) (3,422,106) (15,346,402) (13,226,619) (7,159,727)
(603,198) (1,776,642) (12,502,537) (12,590,667) (2,241,081)
3,639 823 22,918 23,429 0
0 0 0 0 (10,032,403)
0 (418,431) (3,474,759) (3,228,104) 0
1,321,884 748,271 1,922,771 1,535,197 (322,538)
0 159,232 6,524,082 8,380,229 0
0 0 0 0 883,605
0 0 0 0 (37,000)
0 159,232 6,524,082 8,380,229 846,605
0
0 0 1,130,740 10,924,995 0
0 0 18,790 359,470 0
0 0 3,527 1,314,282 21,572
0 0 1,127,752 1,426,483 0
(110,000) 0 (1,644,999) (5,202,500) 0
0 0 (980,994) (915,863) 0
(1,814,067) (22,848) (8,855,541) (9,279,416) (1,879,864)
(210,709) 0 (1,090,348) (1,229,825) 0
0 0 551,191 218,613 0
0 0 16,687 16,687 56,444
0 0 417,939 350,707 0
(112,250) (262,000) (1,144,263) (1,310,973) 0
(2,247,026) (284,848) (10,449,519) (3,327,340) (1,801,848)
1,000,000 0 6,000,996 12,556,591 3,778,509
43,500 1,000 100,232 196,512 259,072
0 (500,000) (10,500,000) (11,000,000) (2,500,000)
1,043,500 (499,000) (4,398,772) 1,753,103 1,537,581
118,358 123,655 (6,401,438) 8,341,189 259,800
643,780 653,944 13,975,787 5,634,598 4,989,080
$762,138 $777,599 $7,574,349 $13,975,787 $5,248,880
•
The Notes to the Financial Statements, found in the Basic Financial section, are an integral part of this statement.
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CITY OF /AX ', ui
! STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
For the Year Ended December 31, 2009
With comparative totals for December 31, 2008 Page 3 of 4
- BUSINESS TYPE ACTIVITIES - ENTERPRISE FUNDS -
#462 & #364 #973 #974
TRANSIT WASTEWATER WATER
CASH AT THE END OF THE YEAR CONSISTS OF
Operating Fund Cash $679,816 $1,706,504 $1,318,028
Revenue Bond Reserve Account Cash 0 1,864,840 346,880
Revenue Bond Redemption Account Cash 0 104,380 14,164
Total Cash at the End of the Year $679,816 $3,675,724 $1,679,072
RECONCILIATION OF NET OPERATING INCOME (LOSS) TO NET CASH
PROVIDED (USED) BY OPERATING ACTIVITIES
Net Operating Income (Loss) ($6,997,539) $2,359,604 $459,510
Adjustments to Reconcile Operating Income (Loss) to Net
Cash Provided by Operating Activities
Depreciation 969,024 2,755,730 1,113,629
lio Change in Assets and Liabilities
(Increase) Decrease in Accounts Receivable 0 347,073 (64,965)
Increase in Allowance for Uncollectibles 0 (12,632) 9,478
(Increase) Decrease in Inventory 0 12,081 (18,442)
Increase (Decrease) in Warrants / Accounts Payable (1,139,346) 9,648 (6,526)
Increase (Decrease) in Wages / Benefits Payable 30,362 6,666 12,334
Increase (Decrease) in Compensated Absences Payable (9,791) 8,128 8,590
Increase (Decrease) in Claims and Judgments Payable 0 0 0
Total Adjustments (149,751) 3,126,694 1,054,098
Net Cash Provided by Operating Activities ($7,147,290) $5,486,298 $1,513,608
SCHEDULE OF NONCASH CAPITAL AND RELATED FINANCING ACTIVITIES
Capital Assets Acquired by Noncash Contributions $0 $25,675 $128,980
III
The Notes to the Financial Statements, found in the Basic Financial section, are an integral part of this statement.
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CITY OF Ktitdritt
STATEMENT OF CASH FLOWS
ill
PROPRIETARY FUNDS
For the Year Ended December 31, 2009
With comparative totals for December 31, 2008 Page 4 of 4
BUSINESS TYPE ACTIVITIES - ENTERPRISE FUNDS - GOVERNMENTAL ACTIVITIES -
#975 OTHER TOTAL INTERNAL
IRRIGATION ENTERPRISE FUNDS 2009 2008 SERVICE FUNDS
$726,702 $777,599 $5,208,649 $11,614,113 $5,248,880
0 0 2,211,720 2,208,121 0
35,436 0 153,980 153,553 0
$762,138 $777,599 $7,574,349 $13,975,787 $5,248,880
$1,130,941 $697,196 ($2,350,288) ($3,825,360) ($980,609)
200,839 10,768 5,049,990 4,965,865 1,387,780
(13,145) 3,934 272,897 165,121 (52,114)
•
0 0 (3,154) 16,923 0
0 0 (6,361) 45,865 18,025
(132) (22,676) (1,159,032) (9,051) (347,382)
1,033 21,384 71,779 87,442 7,741
2,348 37,665 46,940 88,392 1,996
0 0 0 0 (357,975)
190,943 51,075 4,273,059 5,360,557 658,071
$1,321,884 $748,271 $1,922,771 $1,535,197 ($322,538)
$0 $9,600 $164,255 $1,532,100 $0
10
The Notes to the Financial Statements, found in the Basic Financial section, are an integral part of this statement.
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CITY OF Y�un2
()STATEMENT OF NET ASSETS
FIDUCIARY FUNDS
December 31, 2009
With comparative totals for December 31, 2008 Page 1 of 1
— FIREMEN'S RELIEF AND PENSION —
2009 2008
ASSETS
Cash & Equity in Pooled Investments $746,911 $831,758
LIABILITIES
Warrants /Accounts Payable 988 3,127
NET ASSETS
Held in Trust for Pension Benefits and Other Purposes $745,923 $828,631
•
The Notes to the Financial Statements, found in the Basic Financial section, are an integral part of this statement.
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CITY OF Ya Litet
STATEMENT OF CHANGES IN FUND NET ASSETS
FIDUCIARY FUNDS
December 31, 2009
With comparative totals for December 31, 2008 Page 1 of 1
— FIREMEN'S RELIEF AND PENSION —
2009 2008
ADDITIONS
Employer Contributions $1,482,075 $1,621,825
Interest Revenue 3,000 5,728
Total Additions 1,485,075 1,627,553
DEDUCTIONS
Administration / Overhead 71,911 45,270
Pension Benefits 771,018 712,458
Other Benefits 724,854 687,047
Total Deductions 1,567,783 1,444,775
Change In Net Assets (82,708) 182,778
Total Net Assets, January 1 828,631 645,853
Total Net Assets, December 31 $745,923 $828,631
i
The Notes to the Financial Statements, found in the Basic Financial section, are an integral part of this statement.
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0 NOTES TO THE FINANCIAL STATEMENTS
Year ended December 31, 2009
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting policies of the City of Yakima, Washington, conform to Generally Accepted Accounting
Principles (GAAP) as applicable to governmental units. The City has adopted the pronouncements of
the Governmental Accounting Standards Board (GASB) which is the accepted standard setting body for
establishing governmental accounting and financial reporting principles nationally The following is a
summary of the more significant policies. The policies should be reviewed as an integral part of the financial
statements and are presented to assist the reader in interpreting the financial statements and other data in this
report.
REPORTING ENTITY
The City of Yakima was incorporated in 1886 and operates under a Council / Manager form of government
with a full -time City Manager. The City of Yakima provides a full range of municipal services, which include:
police, fire, engineering, parks, cemetery, street, and administrative services. Included in the City's Enterprise
Fund financial reports are: water, irrigation, sanitary wastewater, solid waste, stormwater and transit. The
0 Yakima Air Terminal is operated under a joint venture agreement with Yakima County (see Note 10)
The City's financial statements include all funds, agencies and boards which are financially accountable to
the City Financial accountability is manifest when the primary government appoints the majority of an
organization's governing body and is able to impose its will on that organization or there is a potential for the
organization to provide specific financial burdens on the primary government. The primary government may
be financially accountable if an organization is fiscally dependent on the primary government regardless of
whether the organization has a separately elected governing board, a governing board appointed by a higher
level of government, or a jointly appointed board. An organization is fiscally dependent if it is unable to
determine its budget without another government having the substantive authority to approve or modify the
budget, to levy taxes or set rates or charges without substantive approval by another government, or to issue
bonded debt without substantive approval by another government. Applying these criteria, the primary
government consists solely of the legal entity of the City
Related Organization — The City's officials are also responsible for appointing the members of the boards of
another organization, but the City's accountability for this organization does not extend beyond making the
appointments.
Yakima Housing Authority — The Yakima Housing Authority was created by Resolution No. D -1575, in 1971,
and, under certain_ conditions, can be dissolved by the City Yet, it is an independent entity with distinct
governmental character and organization. The City of Yakima created the Housing Authority per Washington
State Revised Code Chapter 35.82 which provides that liabilities incurred by the Housing Authority will be
satisfied from its assets, and that no person shall have any right of action against the City on account of its
debts, obligations, and Liabilities, except for a Contingent Loan Agreement dated October 1, 1998, for a single
bond issue of $2.6 million.
0
Yakima Regional Public Facilities District — Although a separate legal entity, the City has elected to account
for the operations of the Public Facilities District, as a blended component unit, in two Nonmajor Special
Revenue Funds. The cities of Yakima, Selah and Union Gap originally formed a Public Facilities District
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(PFD) for the purpose of expanding the Yakima Convention Center and in 2008 added expansion of the
Capitol Theatre. The City appoints a majority of the board members and must approve the annual budget.
The financial agreement stipulates that all revenue derived by the PFD (primarily two separate state sales tax
credits) be transferred to the City and the City will use these funds for the applicable project debt service and
operations, and reimbursement of administrative costs of the PFD
GOVERNMENT AND FUND FINANCIAL STATEMENTS
The government -wide financial statements consist of the statement of net assets and the statement of activities.
These statements report information on all of the nonfiduciary activities of the primary government. For the
most part, the effect of interfund activity has been removed from these statements. Governmental activities,
which normally are supported by taxes and intergovernmental revenues, are reported separately from
business type activities, which rely to a significant extent on fees and charges for support.
The statement of activities demonstrates the degree to which the direct expenses of a given function or segment
are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function
or segment. The City's policy is to allocate indirect costs to individual functions, if they are non -tax supported.
Program revenues include: 1) charges to customers or applicants who purchase, use, or directly benefit from
goods, services, or privileges provided by a given function or segment; 2) fines and forfeitures, and 3) grants
and contributions that are restricted to meeting the operational or capital requirements of a particular
function or segment.
Taxes and other items not properly included among program revenues are reported instead as general revenues.
Separate fund financial statements are provided for governmental funds, proprietary funds, and fiduciary
funds, even though the latter are excluded from the government -wide financial statements. Major individual
governmental funds and major individual enterprise funds are reported as separate columns in the fund
financial statements.
MEASUREMENT FOCUS, BASIS OF ACCOUNTING, & FINANCIAL STATEMENT PRESENTATION
The government -wide financial statements are reported using the economic resources measurement focus and
the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements. Under
this measurement focus, revenues are recorded when earned and expenses are recorded when a liability is
incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the
year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility
requirements imposed by the provider have been met.
All governmental fund financial statements are reported using the "current financial resources" measurement
focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both
measurable and available. Revenues are considered to be available when they are collectible within the
current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City
considers revenues to be available if they are collected within sixty days of the end of the current fiscal period.
Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt
service expenditures, as well as expenditures related to compensated absences and claims and judgments, are
recorded only when payment is due.
Certain charges for service, sales based taxes, and interest associated within the current period are considered
to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Only the
portion of special assessment receivable due within the current fiscal period is considered to be susceptible to
accrual as revenue of the current period. Grants are considered measurable and available to the extent that
expenditures have been made. Other intergovernmental revenues are considered measurable and available
when earned. Other revenues such as state shared revenue, licenses, fines and fees are not considered
susceptible to accrual since they are not generally measurable until received. Expenditures are generally
Washington State Auditor's Office
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recognized when the related fund liability is incurred, as under accrual accounting. All other revenue items
S are considered to be measurable and available only when cash is received by the City
The City of Yakima reports the following major governmental funds:
> The General Fund is the City's primary operating fund. It accounts for all financial resources of the
general government, except those required to be accounted for in another fund.
> The Community Development Fund accounts for the Office of Neighborhood Development, which is
the focus of the City's effort to improve economic opportunities and housing conditions in Yakima.
Federal Housing and Urban Development grants are the major revenue source for this program.
The City reports the following enterprise funds as major funds:
> The Transit Fund accounts for the operation of the City Transit System, funded primarily by 0.03%
sales tax, federal grants and fares.
> The Water and Wastewater Funds account for the provision of water and wastewater services to the
residents of the City and other outside utility agreements.
> The Irrigation Utility Fund is responsible for the operation, maintenance and reconstruction of the
existing irrigation system.
Additionally, the government reports the following fund types:
S > Internal Service Funds account for fleet management services, liability insurance, employee benefit
reserves, and public works administration services provided to other departments or agencies of the
government, or to other governments, on a cost reimbursement basis.
> Pension Trust Funds are used to account for the operations of trust established for employee retirement
benefits. They are accounted for in essentially the same manner as proprietary funds because of the
need for determining the periodic income of the trust.
Private sector standards of accounting and financial reporting issued prior to December 1, 1989, generally
are followed in both the government -wide and proprietary fund financial statements to the extent that those
standards do not conflict with or contradict guidance of the Governmental Accounting Standards Boards.
Governments also have the option of the following subsequent private sector guidance for their business type
activities and enterprise funds, subject to this same limitation. The City has elected not to follow subsequent
private sector guidance.
As a general rule the effect of interfund activity has been eliminated from the government -wide financial
statements. Exceptions to this general rule are charges between the City's utility functions and various
other functions of the government. Elimination of these charges would distort the direct costs and program
revenues reported for the various functions concerned.
Amounts reported as program revenues include: 1) charges to customers or applicants for goods, services, or
privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including
special assessments. Internally dedicated resources are reported as general revenues rather than as program
. revenues. Likewise, general revenues include all taxes.
Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating g P p g OP g revenues
and expenses generally result from providing services and producing and delivering goods in connection
with proprietary funds' principal ongoing operations. The principal operating revenues of the water,
Washington State Auditor's Office
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wastewater, refuse, stormwater and irrigation enterprise funds and of the government's internal service funds
are charges to customers for sales and services. Operating expenses for enterprise funds and internal service
funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All
revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.
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.
ASSETS, LIABILITIES AND EQUITIES
CASH MW INVESTMENTS
Cash and investments are managed under the guidance of the City's Investment Policy modified by
Resolution No R- 2009 -50 of the City Council. The policy was based on the Model Investment Policy
prepared by the Association of Public Treasurers of the United States and Canada and applies to all financial
assets of the City of Yakima.
Investments are made using the "prudent person" standard with primary objectives being safety of principal,
liquidity enabling the City to meet all operating requirements and a return on investment objective of
attaining a market rate of return through budgetary and economic cycles.
Investments of City funds except those of the Firemen's Relief and Pension Fund are limited to
➢ Investment deposits, including certificates of deposit with qualified public depositories as defined in
Chapter 39.58 Revised Code of Washington.
• Certificates, notes or bonds of the United States, or other obligations of the United States, or its
agencies, or of any corporation wholly owned by the government of the United States (such as
the Government National Mortgage Association).
• Obligations of government sponsored corporations which are eligible as collateral for advances to
member banks as determined by the Board of Governors of the Federal Reserve System. (These
include but are not limited to Federal Home Loan Bank notes and bonds, Federal Farm Credit
Bank consolidated notes and bonds, Federal National Mortgage Association notes, debentures,
and guaranteed certificates of participation).
• Bankers Acceptances and Commercial Paper purchased on the secondary market.
• Washington State Local Government Investment Pool.
• General obligation bonds of any state or local government in the United States and revenue
bonds from jurisdictions in Washington state having a long -term credit rating of no less than A3
as rated by Moody's or A- by Standard and Poor's.
➢ Repurchase and reverse repurchase agreements are excluded as eligible investments.
➢ Resources of the Firemen's Relief and Pension Fund may be invested in high quality corporate bonds
in addition to instruments listed above.
➢ The City purchases investments from SEC registered security broker- dealers and banks having
offices within Washington State.
10
The City's Treasury Services Officer, under the direction of the Director of Finance and Budget, invests or
deposits all temporary cash. These investments and time deposits do not result in reductions to the cash
Washington State Auditor's Office
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balances of the various funds and are considered to be cash equivalents to the funds under the definition
4110 promulgated in GASB Statement #31, which states that investments purchased within thirty days of maturity
are considered to be cash equivalents. These amounts are reported on the Combined Balance Sheet as part of
"Cash and Cash Equivalents."
RECEIVABLES
Taxes receivable consists of property and other taxes including related interest and penalties (See Note 4 —
Receivables). Accrued interest receivable consists of amounts earned on investments, notes, and contracts as
of year -end.
Special assessments are recorded when levied. Special assessments receivable consists of current and
delinquent assessments. Deferred assessments consist of unbilled special assessments that are liens against
the property benefited. Customer accounts receivable consists of amounts due from private individuals or
organizations for goods and services. Notes and contracts receivable consists of amounts owed on open
account from private individuals or organizations for goods and services rendered. The major component
of the notes receivable category is in the Community Development fund and represents a revolving home
ownership assistance program.
AMOUNTS DUE To AND FROM OTHER FUNDS; INTERFUND LOANS AND ADVANCES RECEIVABLE
These accounts include all interfund receivables and payables. A separate schedule of interfund loans
receivable and payable is furnished in Note 4 — Interfund Receivables. Long -term interfund loans are
separately identified as "Advances" — at December 31, 2009, there were no interfund advances.
AMOUNTS DUE To AND FROM OTHER GOVERNMENTAL UNITS
0 These accounts include amounts due to or from other governments for grants, entitlements, temporary
loans, taxes and charges for services, except amounts billed for utility usage which is included in customer
receivables.
INVENTORIES
Inventories in governmental funds consist of expendable supplies held for consumption. The cost is recorded
as an expenditure at the time individual inventory items are purchased. The reserve for inventory is equal
to the ending amount of inventory to indicate that a portion of the fund balance is not available for future
expenditure.
Inventories in the General Fund, Enterprise Funds and Internal Service Funds are valued at cost on a moving
average method.
RESTRICTED ASSETS AND LIABILITIES
These accounts contain resources for debt service reserve / redemption in the enterprise funds. The current
portion of related liabilities is shown as Payables from Restricted Assets. Specific debt service reserve
requirements are described in Note 7
CAPITAL ASSETS (SEE NOTE 4 — CAPITAL ASSETS)
Capital assets, which include property, plant, equipment, and infrastructure assets (i.e., roads, bridges,
sidewalks, and similar items) are reported in the applicable governmental or business type columns in
the government -wide financial statements. Capital assets are defined by the City as assets with an initial,
individual cost of more than $5,000 and an estimated useful hfe in excess of two years. Such assets are
recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are
.recorded at estimated fair market value at the date of donation.
Infrastructure assets are long lived assets that normally are stationary in nature and normally can be
preserved for a significantly greater number of years than most capital assets. Examples of infrastructure
include roads, bridges, drainage systems, water and wastewater systems, and lighting systems.
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When capital assets are purchased, they are capitalized and depreciated in the government -wide financial
statements and the proprietary fund statements. Capital assets are recorded as expenditures of the current
period in the governmental fund financial statements.
The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend
assets' lives are not capitalized.
Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest
incurred during the construction phase of the capital assets of business type activities is included as part of
the capitalized value of the assets constructed.
Property, plant, and equipment of the City is depreciated using the straight line method over the following
estimated useful lives.
Buildings 25 - 40 Years
Improvements Other than Buildings 7 - 50 Years
Utility Plant 33 - 50 Years
Equipment 2 - 25 Years
Intangibles (Organization Costs and Goodwill) 75 -100 Years
Infrastructure 15 - 50 Years
CUSTODIAL ACCOUNTS
These accounts reflect the liability for net monetary assets being held by the City in its trustee or agency capacity
ACCRUED LIABILITIES
Other accrued liabilities include primarily interest payable on long -term debt, Public Works Trust Loans and
small miscellaneous payables not classified m other categories in Enterprise Funds.
DEFERRED REVENUES
This account includes amounts recognized as receivables but not as revenue in governmental funds because
the revenue recognition criteria has not been met. (See Note 1— Measurement Focus)
NONCURRENT LIABILITIES
Noncurrent liabilities include long -term debt, compensated absences and the cumulative unfinanced liability
related to post employment benefits. For additional information on long -term debt see Note 7
Long -Term Obligations — In the government -wide financial statements, and proprietary fund types in the fund
financial statements, long -term obligations are reported as liabilities in the applicable governmental activities,
business type activities, or proprietary fund type statement of net assets. Bond premiums and discounts, as
issuance costs, are deferred and amortized over the life of the bonds using the effective interest method. Bonds
payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as
deferred charges and amortized over the term of the related debt.
In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as
bond issuance costs, during the current period. The bond proceeds, net of premiums, discounts and issuance
costs are reported as "other financing sources"
Compensated Absences — The contracts with employees call for the accumulation of vacation and sick leave.
At termination of employment, employees may receive cash payment for all accumulated vacation up to
a certain number of hours and a percentage of sick leave, depending on employee group The payment is
based on current wage at termination.
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The amounts of unpaid vacation and sick leave accumulated by City employees are accrued as expenses
0 when incurred in proprietary funds, which use the accrual basis of accounting. In the governmental funds,
only the amounts that normally would be liquidated with expendable available financial resources are
accrued as current -year expenditures. The City uses the last -in, first -out method of recognizing the hours
used of compensated absences. Employees are charged for the last day of vacation or sick leave earned when
the leave is used. Thus, unless it is anticipated that compensated absences will be used in excess of a normal
year's accumulation, no additional expenditures are accrued. Therefore, the entire unpaid liability for the
governmental funds is a reconciling item between the fund and government -wide presentations.
FUND EQUITY
Fund equity is recognized as fund balance in governmental fund types and as net assets in proprietary fund
types. Certain fund equity may be reserved for a specific future use or to denote unavailability for current
operations Designations of fund balance represent tentative management plans that are subject to change.
Unless otherwise noted, fund balances and retained earnings (deficits) are unreserved and undesignated.
NOTE 2 - RECONCILIATION OF GOVERNMENT -WIDE & FUND FINANCIAL
STATEMENTS
EXPLANATION OF CERTAIN DIFFERENCES BETWEEN THE GOVERNMENTAL FUND BALANCE SHEET
The governmental fund balance sheet includes a reconciliation between fund balance — total government funds and
net assets — governmental activities as reported in the government -wide statement of net assets. One element of that
reconciliation explains that "long -term liabilities, including bonds payable, are not due and payable in the current
period and, therefore, are not reported in the funds." The details of this $43,982,181 difference are as follow
S Bonds Payable $26,978,811
Intergovernmental Loans 1,500,908
Contractual Agreements — Yakima County 244,806
Special Assessments — Notes 256,500
Lease Purchase Agreements 10,058
Unfinanced Pension Liability 8,835,001
Compensated Absences 6,156,097
Net adjustments to reduce fund balance — total governmental
funds to arrive at net assets — governmental activities $43,982,181
EXPLANATION OF CERTAIN. DIFFERENCES BETWEEN THE GOVERNMENTAL FUND STATEMENTS
The governmental fund statement of revenues, expenditures, and changes in fund balances includes a
reconciliation between net changes in fund balances — total governmental funds and changes in net assets of
governmental activities as reported in the government -wide statement of activities. One element of that
reconciliation explains that "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." The details of this $2,659,664 difference are as follows:
Capital Outlay $10,641,965
Depreciation Expense (7,982,301)
Net adjustment to increase net changes in fund balances —
total governmental funds to arrive at changes in net assets
of governmental activities $2,659,664
1111
Another element of that reconciliation states that "The net effect of various miscellaneous transactions
involving capital assets (i.e., sales, trade -ins, donations and physical inventory adjustments) is to decrease net
assets." The details of this $1,947,677 difference are as follows:
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In the statement of activities, only the gain on the sale of
capital assets is reported. However, in the governmental
funds, the proceeds from the sale increase financial
•
resources. Thus, the change in net assets differs from the
change in fund balance by the cost of the capital assets sold. ($7,120)
Donations of capital assets increase net assets in the statement
of activities, but do not appear in the governmental funds
because they are not financial resources. 361,553
A physical inventory resulted in the adjustment of
capital assets, which decreased net assets in the statement
of activities, but do not appear in the governmental funds
because there was not a use of financial resources (2,302,110)
Net adjustment to decrease net changes in fund balances —
total governmental funds to arrive at changes in net assets
of governmental activities ($1,947,677)
Another element of that reconciliation states that "The issuance of long -term debt (e.g., bonds, leases)
provides current financial resources to governmental funds, while the repayment of the principal of long -term
debt consumes the current financial resources of governmental funds. Neither transaction, however, has any
effect on net assets." The details of this ($5,002,138) difference are as follows.
Debt Issued or Incurred.
Issuance of General Obligation Bonds ($7,035,000) •
Intergovernmental Loan (600,000)
Principal Repayments:
General Obligation Debt 2,029,241
Intergovernmental Loans 393,420
Contractual Agreement — Yakima County 70,454
Special Assessment Notes 78,100
Lease Purchase Agreements 61,647
Net adjustment to decrease net changes in fund balances —
total governmental funds to arrive at changes in net assets
of governmental activities ($5,002,138)
Another element of that reconciliation states that "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." The details of this ($1,691,632) difference are as follows:
Compensated Absences ($27,981)
Change in Unfunded Pension Liability 47,608
Change in Other Post Employment Benefit Liability (1,679,409)
Change in Reserve for Inventory (6,643)
Accrued Interest Payable (25,207)
Net adjustment to decrease net changes in fund balances —
total governmental funds to arrive at changes in net assets
of governmental activities ($1,691,632)
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NOTE 3 - STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
O BUDGETS AND BUDGETARY ACCOUNTING
SCOPE OF BUDGET
The City Council annually approves the City's operating budget. The operating budget is designed to
allocate annually available resources among the City's services and programs and to provide for associated
financing decisions.
Annual appropriated budgets are adopted on the modified accrual basis of accounting. For governmental
funds, there are no differences between 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 the General Fund and Special Revenue Funds only Budgets for debt service
and capital projects are adopted at the level of the individual debt issue or project and for fiscal periods that
correspond to the lines of debt issues or projects. Budgetary comparisons for proprietary funds, although not
legally required, may be requested from the Department of Finance and Budget.
Annual appropriated budgets are adopted at the fund level. Subsidiary revenue and expenditure ledgers 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.
Appropriations for general and special revenue funds lapse at year end.
PROCEDURES FOR ADOPTING THE ORIGINAL BUDGET
III The City's budget procedures are mandated by Washington State Law The steps in the budget process are as
follows:
1 Prior to November 1, the City Manager submits a proposed budget to the City Council. This budget
is based on priorities established by the Council and estimates provided by City departments during
the preceding months and balanced with revenue estimates.
2. The Council conducts public hearings on the proposed budget in November to obtain taxpayer
comments.
3. During mid - December, the budget is legally enacted through passage of an ordinance.
AMENDING THE BUDGET
The City Manager is authorized to transfer budgeted appropriations between departments within any fund,
however, any revisions that alter the total expenditures of a fund, or that affect the number of permanently
authorized employee positions, salary ranges, or other conditions of employment must be approved by the
City Council.
When'the City Council determines that it is in the best interest of the City to increase or decrease the
appropriation for a particular fund, it may do so by an ordinance approved by a one more than simple
majority of those council members present after holding two public hearings.
The budget amounts shown in the financial statements represent the original adopted budget and all
supplemental appropriations. City -wide, supplemental appropriations totaled $11 4 million. The principal
four amendments were to reappropriate 2009 outstanding encumbrances in the amount of $3 0 million,
Ill an appropriation in the amount of $534,191 for grant funded crime prevention programs in multiple
jurisdictions, $1.0 million for criminal justice expenses — including jail costs and a few reimbursable grants,
and nonlapsing appropriations for various projects in capital funds (Arterial Street, LID construction, and
Wastewater Facilities) in the amount of $5.7 million.
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ENCUMBRANCES
Encumbrance accounting, under which purchase orders, contracts, and other commitments for the
expenditure of funds are recorded in order to reserve that portion of the applicable appropriation, is
•
employed as an extension of formal budgetary integration in the governmental funds. Encumbrances are
reported as reservations of fund balances since they do not constitute expenditures or liabilities. The City
reappropriates outstanding encumbrances in the subsequent year.
FUND EQUITY
DEFICIT FUND EQUITIES
Temporary deficits of the Local Improvement Construction Fund arise because long -term financing has not
been issued. During the construction phase, the Local Improvement District issues warrants, which accrue
interest and are held as an investment internally, shown on the balance sheet as Warrants Payable, resulting in
a deficit fund balance. When the LID is completed, bonds or notes are issued and the Warrants Outstanding
are redeemed, eliminating the deficit.
DESIGNATED FUND BALANCES
This category is used to set aside governmental fund balances when city management has plans or tentative
commitments to expend resources for certain purposes in future periods. Further legal action will be required
to authorize the actual expenditures. Special Revenue Funds have a designated fund balance of $451,642 for
the Capitol Theatre Reserve Fund for modifications to the Capitol Theatre. The Capital Project Funds have a
designated fund balance of $5,624,814 for replacement of equipment and other capital improvements.
RESERVED FUND BALANCE IN PERMANENT FUNDS
The reserve of $578,511 in the Cemetery Trust Fund represents a portion of the amounts paid for cemetery
plots. Provisions of these sales require $120 of the sales price be held in trust and that the income on the
investment of these amounts be used to maintain the plots. The Reserve for Endowments represents an
endowment for cemetery beautification. The provisions of the endowment stipulate that income from the
endowment be used only for grounds improvements.
FIDUCIARY FUND NET ASSETS
The Firemen's Relief and Pension Fund has Net Assets held in Trust for Pension Benefits and other purposes
of $745,923, which represents the accumulated contributions made by the government through property taxes
(see Note 4) plus interest earnings and state fire insurance premium tax proceeds.
NOTE 4 - DETAILED NOTES ON ALL FUNDS
DEPOSITS AND INVESTMENTS
In its 2005 Notes to the Financial Statements, the City of Yakima implemented GASB Statement No. 40,
Deposit and Investment Risk Disclosures — an amendment of GASB Statement No 3, issued in March 2003
The provisions of this Statement are effective for financial statements for periods beginning after June 15,
2004. This statement addresses common deposit and investment risks related to credit risk, concentration
of credit risk, interest rate risk, and foreign currency risk. As an element of interest rate risk, this Statement
requires certain disclosures of investments that have fair values that are highly sensitive to changes in interest
rates. The City holds no such investments as of the Statement of Net Assets date.
As required by state law, all deposits and investments of the City's funds are direct or indirect obligations of
the U.S. Government, high quality Municipal Bonds, Bankers' Acceptances, high quality Commercial Paper
or deposits with Washington State banks and savings and loan institutions or the Washington State Local
Government Investment Pool. Investments of trust funds are not subject to the preceding limitations.
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DEPOSITS
. The City of Yakima maintains deposit relationships with several Washington State commercial banks and
savings and loan institutions.
The Public Deposit Protection Commission of the State of Washington (PDPC) covers all deposits not covered
by the Federal Depository Insurance Corporation (FDIC) The PDPC is a statutory authority established
under RCW 39.58. It constitutes a multiple financial institution collateral pool that insures public deposits.
In such a pool, a group of financial institutions holding public funds pledge collateral to a common pool.
The PDPC provides protection by maintaining strict standards as to the amount of public deposits financial
institutions can accept, and by monitoring the financial condition of all public depositories and optimizing
collateralization requirements. The City's agent in the name of the City holds all deposits.
The City of Yakima had the following bank balances on hand on December 31, 2009•
Banks and Savings and Loan Institutions $9,302,001
Petty Cash and Other Imprest Funds 14,755
Local Government Investment Pool (LGIP) 25,796,077
Total $35,112,833
CUSTODIAL CREDIT RISK: DEPOSITS — The custodial credit risk for deposits is the risk that, in the event of a depository
financial institution failure, the City's deposits with banks and savings and loan associations may not be
recovered. Because of the PDPC, the City's deposits are not subject to this risk.
0 The LGIP is an unrated 2a7 like pool, as defined by GASB 31 Accordingly, participants' balances in the LGIP
are not subject to interest rate risk, as the weighted average maturity of the portfolio will not exceed 90 days.
Per GASB 40 guidelines, the balances are also not subject to custodial credit risk. The credit risk of the LGIP is
limited as most investments are either obligations of the US government, government sponsored enterprises,
or insured demand deposit accounts and certificates of deposit. Investments or deposits held by the LGIP
are all classified as category 1 risk level investments. They are either insured or held by a third -party custody
provider in the LGIP's name.
FOREIGN CURRENCY RISK: DEPOSITS — Foreign currency risk is the risk that changes in exchange rates will adversely
affect the fair value of an investment or a deposit. The City of Yakima does not participate in making deposits
or investments that are exposed to this type of risk.
INVESTMENTS
As of December 31, 2009, the City of Yakima had the following investments:
INVESTMENT PORTFOLIO
WEIGHTED WEIGHTED
AVERAGE AVERAGE
CARRYING FAIR FINAL EFFECTIVE
INVESTMENT TYPES VALUE VALUE MATURITY DURATION
Federal Agency Callable Securities $28,804,428 $28,767,284 1,213 38
Local Assessment Notes 256,500 256,500 N/A N/A
Total Notes and Securities Portfolio $29,060,928 $29,023,784 1,213 38
"' Note: Investments are reported at Carrying Value on the Statement of Net Assets as the difference between
Carrying Value and Fair Value is considered immaterial.
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INTEREST RATE RISK
In accordance with its adopted investment policy, the City manages its exposure to declines in fair value due
to rising interest rates by limiting the weighted average maturity of its cash and security portfolio as a whole'
to not more than 2.5 years, and has a five -year maximum investment limitation. Additionally, the City does
not use derivatives, pass through obligations or other extremely interest rate sensitive instruments in its
portfolio Weighted average maturity on callable securities is calculated using the final maturity date rather
than the call date for conservatism.
INVESTMENT MANAGEMENT
CARRYING FAIR LESS THAN 1 - 2 2 - 5
INVESTMENT TYPES VALUE VALUE I YEAR YEARS YEARS
Federal Agency Callable Securities $28,804,428 $28,767,284 $1,000,000 $1,000,000 $26,804,428
Local Assessment Notes I'I 265,000 265,000 N/A N/A 265,000
Total Notes and Securities Portfolio $29,069,428 $29,032,284 $1,000,000 $1,000,000 $27,069,428
(1) Represents 10 -year LID Notes the City is holding. All other investments in this category are under five -year
final maturity Callable securities are stated at their final maturity.
CREDIT RISK
State law, under RCW sections 35.39 and 39.59, limits investments that a Washington class 1 City may hold
to: (1) Direct and Indirect obligations of the US Government, (2) high quality Municipal Bonds of Washington
State or Cities and Towns within the State, (3) high quality General Obligation bonds of another State or City,
by Washington Administrative Code permission, not in the RCW's, (4) Bankers Acceptances and high quality
Commercial Paper as long as they hold one of the 2 highest Credit ratings issued by at least two nationally
recognized rating agencies, and the (4) State Treasurer's LGIP The LGIP is a 2a7 like pool, and investments
in the pool are reported at the share price of 100% of dollars invested. The City's own adopted Investment
Policy adheres to the RCW's and also allows for investment in high quality Commercial Paper, Banker's
Acceptances and the LGIP (see Deposit Note for information on the LGIP).
CUSTODIAL CREDIT RISK
The City's investment Policy does not include Repurchase, Reverse — Repurchase agreements or securities
lending as allowable investment activity; therefore no custodial credit risk exists. All investments are held
in the City's name by a third party custodian through a Trust Agreement, and are considered Category 1
investments, with the exception of the LGIP and LID Notes (see Deposit note for custodial risk details)
PROPERTY TAXES
The County Treasurer acts as an agent to collect property taxes levied within the county for all taxing
authorities. Collections are distributed after the end of each month, on the tenth day of the following month.
PROPERTY TAX CALENDAR
January 1 Taxes are levied and become an enforceable lien against properties.
February 14 Tax bills are mailed.
April 30 First of two equal installment payments is due.
May 31 Assessed value of property is established for next year's levy at 100% of market value.
October 31 Second installment is due.
During the year, property tax revenues are recognized when cash is collected. At year -end, property tax
revenues are recognized for collections in the hands of the County Treasurer at December 31st. No allowance
for uncollectible taxes is established because delinquent taxes are considered fully collectable.
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The City is permitted by law to levy up to $3.60 per $1,000 of assessed valuation for general government
. services, less a maximum levy of $.50 / $1,000 for the Library District, beginning in 2007 This amount may be
reduced for either of the following reasons:
D The Washington State Constitution limits total regular property tax levies to one - percent of assessed
valuation or $10 per $1,000 of value. If the tax levies of all districts exceed this amount, each is
proportionately reduced until the total is at or below the one percent limit.
D Washington State law, RCW 84.55.010, limits the total dollar amount of regular property taxes that
may be levied annually to 101% of the highest levy in the three previous years (excluding new
construction, annexations and state assessed property).
Special levies approved by the voters are not subject to the above limitations.
For 2009, the City's regular tax levy was $2.8886 per $1,000 on a total assessed valuation of $5,368,959,341,
for a total regular levy of $15,508,982. Included in the City's regular levy is an authorization to levy for the
Firemen's Relief and Pension Fund (see Note 5). This levy is subject to the same limitations as the levy for
general government services. The Firemen's Relief and Pension portion of the regular tax levy for 2009 was
$.2634 per $1,000, or $1,414,441 Additionally, special levies for General Obligation Bond obligations totaled
$268,000.
RECEIVABLES
Receivables as of year -end for the City's individual major funds, nonmajor, internal service and agency
funds in the aggregate, including applicable allowance for uncollectible accounts, are shown in the following
* chart.
ACCOUNTS RECEIVABLE
SPECIAL DUE FROM INTEREST &
TAXES ACCOUNTS ASSESSMENTS OTHER GOVT'S PENALTIES OTHER TOTAL
General Fund $4,377,582 $1,473,515 $0 $101,902 $100,694 $0 $6,053,693
Community & Economic Dev 0 4,882,237 0 633,620 0 0 5,515,857
Nonmajor Governmental 233,866 298,706 312,858 932,786 0 0 1,778,216
Transit 803,459 0 0 27,801 0 0 831,260
Refuse 0 193,886 0 0 0 0 193,886
Wastewater 0 1,253,168 0 0 0 7,500 1,260,668
Water 0 10,126 0 0 0 0 10,126
Irrigation 0 206,742 0 0 8,972 0 215,714
Stormwater 0 85,472 0 0 0 85,472
Internal Service Funds 0 732,547 0 125,230 0 0 857,777
Total $5,414,907 $9,136,399 $312,858 $1,821,339 $109,666 $7,500 $16,802,669
Revenues of the Water, Wastewater, Refuse and Irrigation funds are reported net of uncollectible amounts.
Total uncollectible amounts related to revenues of the current period of approximately 1% of billed revenue
are as follows:
Refuse $46,492
Wastewater 146,350
Water 71,271
• Irrigation 26,421
Stormwater 16,854
Total $307,388
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Governmental funds report deferred revenue in connection with receivables for revenues that are not
considered to be available to liquidate liabilities of the current period. Governmental funds also defer
revenue recognition in connection with resources that have been received, but not yet earned. At the end of
the current fiscal year, the various components of deferred revenue and unearned revenue reported in the
governmental funds were as follows:
DEFERRED REVENUES
UNAVAILABLE
General Fund
Court Receivables $1,452,439
WA State Office of Public Defense 150,000
Miscellaneous 4,861
Community Economic Development — Homeownership Programs 4,882,237
Special Revenue Funds
Parks & Recreation — Pool / Field Rentals 8,127
Streets / Sidewalk Repairs 2,683
Community Relations — Equipment Reimbursement 1,600
Arterial Street — Debt Service Assessment 10,300
Cemetery — Lot Sales 29,164
Public Safety Communications — Site Lease 1,075
Parking & Business Improvement — Assessment Levied on Businesses 13,533
Front Street Business Impr — Assessment Levied on Businesses in Boundaries 438
Debt Service Funds
LID Fund — Special Assessments Not Yet Due 273,905
Capital Project Funds
Parks & Recreation Capital — Private Contributions 10,871
Total Deferred / Unearned Revenue for Governmental Funds $6,841,233
INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS
CLASSIFICATION OF INTERFUND TRANSACTIONS
Interfund transactions are classified as follows:
1 Transactions that would be treated as revenues, expenditures or expenses if they involved external
organizations, such as buying goods and services, are similarly treated when they involve other funds
of the City
2. Transfers to support the operations of other funds are recorded as "Transfers" and classified with
"Other Financing Sources or Uses."
3 Contributions to the capital of enterprise or internal service funds (transfers between those funds
and the general capital assets account group), transfer to establish or reduce working capital in other
funds, and transfers of remaining balances when funds are closed are classified as transfers and
reported as nonoperating revenues.
4. Loans between funds are classified as interfund loans receivable and payable or as advances to and
from other funds on the combined balance sheet depending on the time period for which the loan
was made. Interfund loans do not affect total fund equity, but advances to other funds are offset by a
reservation of fund equity As of December 31, 2009, there were no advances to / from any funds.
INTERFUND LOANS AND RECEIVABLES
The following table depicts the temporary cash overdrafts in individual funds as of December 31, 2009 —
caused by timing of cash flow related to grant reimbursements.
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INTERFUND LOANS
DUE FROM DUE TO
OTHER FUNDS OTHER FUNDS
General Fund $136,312 $0
Special Revenue Funds
Community Development 0 101,178
Community Services 0 27,571
Trolley 0 7,563
Total $136,312 $136,312
INTERFUND TRANSFERS
Interfund transfers represent subsidies and contributions provided to other funds with no corresponding debt
or promise to repay General Fund transfers are primarily used to: 1) allocate the portion of utility taxes that
are designated to support Parks and Recreation and Law and Justice Capital programs, 2) support the Public
Safety dispatch operation with a portion of the telephone tax, and 3) contribute to the Contingency Fund. The
Internal Service transfer in represents capital contributions from other funds to purchase new vehicle additions
to the rolling stock fleet. Other transfers generally represent debt service and capital project funding.
The following table depicts interfund operating transfer activity during 2009
OPERATING TRANSFERS
TRANSFER IN
GENERAL NONMAJOR INTERNAL
TRANSFER OUT FUND GOVERNMENT TRANSIT WASTEWATER SERVICE TOTAL
General Fund $0 $2,422,933 $0 $0 $0 $2,422,933
Nonmajor Governmental 40,000 2,875,802 37,000 0 50,000 3,002,802
Refuse 0 0 37,000 0 0 37,000
Wastewater 0 542,516 0 0 0 542,516
Water Operating Fund 0 139,058 55,500 32,939 0 227,497
Irrigation 0 93,750 18,500 0 0 112,250
Stormwater 0 25,000 0 200,000 0 225,000
Internal Services 0 0 37,000 0 0 37,000
Total $40,000 $6,099,059 $185,000 $232,939 $50,000 $6,606,998
CAPITAL ASSETS
CAPITAL ASSET ACTIVITY
BALANCE BALANCE
I/1/09 ADDITIONS ADJUSTMENTS DELETIONS 12/31/09
Governmental Activities
Capital Assets - Not Depreciated
Land $11,672,483 $1,522,827 ($337,248) $0 $12,858,062
Construction in Progress $19,509,797 8,358,797 (7,224,125) 0 20,644,469
Total Capital Assets - Not Depreciated $31,182,280 $9,881,624 ($7,561,373) $0 $33,502,531
Capital Assets - Depreciated
0 Buildings and Structures $48,831,314 $94,928 ($1,246,787) $0 $47,679,455
Other Improvements $11,469,199 4,117 620,320 0 12,093,636
Equipment & Machinery $9,116,195 805,046 248,218 (40,784) 10,128,675
Infrastructures $198,202,331 217,803 6,095,604 0 204,515,738
Capitalized Leases $1,267,620 0 (458,092) (127,600) 681,928
Total Capital Assets - Depreciated 268,886,659 1,121,894 5,259,263 (168,384) 275,099,432
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CAPITAL ASSET ACTIVITY (CONTINUED)
BALANCE BALANCE r
I/1/09 ADDITIONS ADJUSTMENTS DELETIONS 12/31/09
Less Accumulated Depreciation
Buildings & Structures (15,049,278) (1,101,113) (5,030) 0 (16,155,421)
Other Improvements (4,605,178) (605,302) 1,716 0 (5,208,764)
Equipment & Machinery (6,193,543) (558,627) 3,314 33,664 (6,715,192)
Infrastructures (130,722,685) (5,683,484) _ 0 0 (136,406,169)
Capitalized Leases (709,226) (33,775) 0 127,600 (615,401)
Total Accumulated Depreciation (157,279,910) (7,982,301) 0 161,264 (165,100,947)
Total Capital Assets — Depreciated Net $111,606,749 ($6,860,407) $5,259,263 ($7,120• $109,998,485
Governmental Activities Capital Assets — Net $142,789,029 $3,021,217 ($2,302,110) ($7,120) $143,501,016
Internal Service Funds
Capital Assets — Not Depreciated
Construction in Progress $94,267 10,613 (104,880) 0 0
Capital Assets — Depreciated
Buildings $37,397 $0 $0 $0 $37,397
Other Improvements 7,251 0 $104,880 0 112,131
Machinery 19,116,758 1,879,564 0 (479,210) 20,517,112
Total Capital Assets — Depreciated 19,161,406 1,879,564 104,880 (479,210) 20,666,640
Less Accumulated Depreciation
Buildings (18,305) (2,121) 0 0 (20,426)
Other Improvements (1,268) (5,341) 0 0 (6,609)
Machinery (10,873,448) (1,380,318) 0 405,827 (11,847,939) 0
Total Accumulated Depreciation (10,893,021) (1,387,780) 0 405,827 (11,874,974)
Total Capital Assets — Depreciated Net $8,268,385 $491,784 $104,880 ($73,383) $8,791,666
Total Capital Assets — Governmental Activities $151,151,681 $3,523,614 ($2,302,110) ($80,503) $152,292,682
Business Type Activities
Capital Assets — Not Depreciated
Land $2,163,373 $0 $0 $0 $2,163,373
Construction in Progress 30,030,490 7,952,267 (24,035,965) (374,891) 13,571,901
Total Capital Assets — Not Depreciated 32,193,863 7,952,267 (24,035,965) (374,891) 15,735,274
Capital Assets — Depreciated
Buildings & Structures 70,884,811 0 11,884,530 0 82,769,341
Other Improvements 90,808,367 616,892 7,059,062 0 98,484,321
Equipment & Machinery 17,361,950 774,495 5,098,428 (208,099) 23,026,774
Completed Construction — Not Classified 0 0 0 0 0
Intangibles 221,830 0 0 0 221,830
Total Capital Assets Depreciated 179,276,958 1,391,387 24,042,020 (208,099) 204,502,266
Less Accumulated Depreciation
Buildings & Structures (40,930,122) (2,069,886) (151) 0 (43,000,159)
Other Improvements (35,490,858) (1,887,232) 151 0 (37,377,939)
Equipment & Machinery (8,817,162) (1,092,872) 0 187,289 (9,722,745)
Intangibles (106,171) 0 0 0 (106,171)
Total Accumulated Depreciation (85,344,313) (5,049,990) 0 187,289 (90,207,014)
Total Capital Assets — Depreciated Net $93,932,645 ($3,658,603) $24,042,020 ($20,810) $114,295,252
Total Capital Assets — Business Type Activities $126,126,508 $4,293,664 $6,055 ($395,701) $130,030,526
NOTE. The 2009 adjustment column represents (a) construction works in progress that were completed and classified
into the appropriate capital asset category, (b) minor reclassification corrections and adjustments to physical
inventory and (c) transfers of equipment between governmental and business type activities.
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Depreciation expense was charged to functions / programs as follows:
GOVERNMENTAL ACTIVITIES
General Government $94,249
Security of Persons and Property 825,648
Physical Environment 9,260
Transportation 5,847,972
Economic Environment 80,977
Cultural and Recreational Environment 1,124,195
Capital assets held by the City's internal service
funds are charged to the various functions
based on their usage of the assets 1,387,780
Total Depreciation - Governmental Activities $9,370,081
BUSINESS TYPE ACTIVITIES
Transit $969,024
Wastewater 2,755,730
Water 1,113,629
Irrigation 200,839
Stormwater 10,768
Total Depreciation - Business Type Activities $5,049,990
40 COMMITMENTS
CONSTRUCTION COMMITMENTS
The City has active construction projects as of December 31, 2009 The major street project is the construction
of a railroad underpass on Lincoln Avenue. The Capitol Theatre is constructing a production center, which
will also include a 500 seat black box theatre Other projects include improvements to the Wastewater facility
and collection system, the rebuilding of the Irrigation system and improvements to the water distribution
system, including a feasibility study of conversion to an automated meter reading system.
CURRENT CONSTRUCTION PROJECTS
CONTRACT SPENT REMAINING
PROJECT AMOUNT To DATE COMMITMENT
Street Construction $19,402,715 $5,193,127 $14,209,588
Capitol Theatre 6,473,723 2,691,999 3,781,724
Wastewater Treatment Plant and Mains 7,787,185 5,818,441 1,968,744
Irrigation System Design / Rebuild 3,893,284 2,152,300 1,740,984
Water System 2,159,351 1,715,645 443,706
Total $39,716,258 $17,571,512 $22,144,746
Street constructions are being financed by as tax, federal, state or local grants, and low interest state
agency loans. The Capitol Theatre improvements are being funded by general obligation bond proceeds.
Wastewater improvements are being financed by revenue bond proceeds, State Public Works Trust Fund
loans and wastewater utility revenues / capital reserves. Irrigation improvements are funded by irrigation
0 capital rates / reserves. Water system improvements are being financed by a State Public Works Trust Fund
loan and Capital reserves.
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NOTE 5 - PENSION PLANS
Substantially all City 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 Department of Retirement Systems (DRS), a department within the primary government of
the State of Washington, issues a publicly available Comprehensive Annual Financial Report (CAFR) that
includes financial statements and required supplementary information for each plan. The DRS CAFR may be
downloaded from the DRS website at www.drs.wa.gov, or by writing to:
Department of Retirement Systems
Communications Unit
P O Box 48380
Olympia, WA 98504 -8380
The following disclosures are made pursuant to GASB Statement 27, Accounting for Pensions by State and Local
Government Employers, and No 50, Pension Disclosures, an Amendment of GASB Statements No 25 and No 27
PUBLIC EMPLOYEES' RETIREMENT SYSTEM (PERS) PLANS I, 2 & 3
PLAN DESCRIPTION
PERS is a cost - sharing multiple employer retirement system comprised of three separate plans for
membership purposes. Plans 1 and 2 are defined benefit plans and Plan 3 is a defined benefit plan with a
defined contribution component.
Membership in the system includes: elected officials, state employees, employees of the Supreme, Appeals, and •
Superior courts (other than judges currently in a judicial retirement system), employees of legislative committees,
community and technical colleges, college and university employees not participating in national higher
education retirement programs, judges of district and municipal courts, and employees of local governments.
PERS participants who joined the system by September 30, 1977, are Plan 1 members. Those who joined on
or after October 1, 1977, and by August 31, 2002, for local government employees, are Plan 2 members unless
they exercise an option to transfer their membership to Plan 3 PERS participants joining the system on or
after September 1, 2002, for local government employees have the irrevocable option of choosing membership
in either PERS Plan 2 or PERS Plan 3 The option must be exercised within ninety days of employment. An
employee is reported in Plan 2 until a choice is made. Employees who fail to choose within ninety days
default to PERS Plan 3. Notwithstanding, PERS Plan 2 and Plan 3 members may opt out of plan membership
if terminally ill, with less than five years to live.
PERS Plan 1 and Plan 2 defined benefit retirement benefits are financed from a combination of investment
earnings and employer and employee contributions. PERS retirement benefit provisions are established in
state statute and may be amended only by the State Legislature.
PERS Plan 1 members are vested after the completion of five years of eligible service. Plan 1 members are
eligible for retirement at any age after thirty years of service, or at the age of sixty with five years of service, or
at the age of 55 with 25 years of service. The annual benefit is two percent of the average final compensation
(AFC) per year of service, capped at sixty- percent. (The AFC is based on the greatest compensation during
any 24 eligible consecutive compensation months.) This annual benefit is subject to a minimum for PERS
Plan 1 retirees who have 25 years of service and have been retired 20 years, or who have 20 years of service
and have been retired 25 years. Plan 1 members who retire from inactive status prior to the age of 65 may
receive actuarially reduced benefits. If a survivor option is chosen, the benefit is further reduced. A cost of
living allowance (COLA) is granted at age 66 based upon years of service times the COLA amount, which is
increased three percent annually Plan 1 members may also elect to receive an optional COLA that provides an
Washington State Auditor's Office
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automatic annual adjustment based on the Consumer Price Index. The adjustment is capped at three percent
el annually To offset the cost of this annual adjustment, the benefit is reduced.
PERS Plan 2 members are vested after the completion of five years of eligible service. Plan 2 members may retire at
the age of 65 with five years of service with an allowance of two percent of the AFC per year of service. (The AFC
is based on the greatest compensation during any ehgible consecutive 60 -month period.) Plan 2 members who
retire prior to the age of 65 receive reduced benefits. If retirement is at age 55 or older with at least thirty-years of
service, a three- percent per year reduction applies; otherwise an actuarial reduction will apply The benefit is also
actuarially reduced to reflect the choice of a survivor option. There is no cap on years of service credit; and a cost
of living allowance is granted (based on the Consumer Price Index), capped at three percent annually.
Plan 3 has a dual benefit structure. Employer contributions finance a defined benefit component, and
member contributions finance a defined contribution component. The defined benefit portion provides
a benefit calculated at one percent of the AFC per year of service. (The AFC is based on the greatest
compensation during any eligible consecutive 60 -month period.) Effective June 7, 2006, Plan 3 members are
vested in the defined benefit portion of their plan after ten years of service; or after five years of service, if
twelve months of that service are earned after age 44, or after five service credit years earned in PERS Plan
2 prior to June 1, 2003. Plan 3 members are immediately vested in the defined contribution portion of their
plan. Vested Plan 3 members are eligible to retire with full benefits at age 65, or they may retire at age 55 with
10 years of service. Plan 3 members who retire prior to the age of 65 receive reduced benefits. If retirement
is at age 55 or older with at least 30 years of service, a three percent per year reduction applies, otherwise an
actuarial reduction will apply The benefit is also actuarially reduced to reflect the choice of a survivor option.
There is no cap on years of service credit, and Plan 3 provides the same cost of living allowance as Plan 2.
4110 The defined contribution portion can be distributed in accordance with an option selected by the member,
either as a lump sum or pursuant to other options authorized by the Employee Retirement Benefits Board.
There are 1,192 participating employers in PERS. Membership in PERS consisted of the following as of the
latest actuarial valuation date for the plans of June 30, 2008
Retirees and beneficiaries receiving benefits 73,122
Terminated plan members entitled to
but not yet receiving benefits 27,267
Active plan members vested 105,212
Active plan members nonvested 56,456
Total 262,057
FUNDING POLICY
Each biennium, the state Pension Funding Council adopts Plan 1 employer contribution rates, Plan 2 employer
and employee contribution rates, and Plan 3 employer contribution rates. Employee contribution rates for Plan
1 are established by statute at six percent for state agencies and local government unit employees, and at 7.5
percent for state government elected officials. The employer and employee contribution rates for Plan 2 and
the employer contribution rate for Plan 3 are developed by the Office of the State Actuary to fully fund Plan
2 and the defined benefit portion of Plan 3. All employers are required to contribute at the level established
by the Legislature. Under PERS Plan 3, employer contributions finance the defined benefit portion of the
plan, and member contributions finance the defined contribution portion. The Employee Retirement Benefits
Board sets Plan 3 employee contribution rates. Six rate options are available ranging from 5 to 15 percent;
two of the options are graduated rates dependent on the employee's age. The methods used to deterrrune the
contribution requirements are established under state statute in accordance with chapters 41.40 and 4145 RCW
The required contribution rates expressed as a percentage of current year covered payroll, as of December 31,
2009, were as follows.
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MEMBERS
PERS PLAN I PERS PLAN 2 PERS PLAN 3
•
Employer 5.31 % (2) 5.31 % (2) 5.31 % (3)
Employee 6.00 %m 3.90 %m (5)
(1) The employer rates include the employer administrative expense fee currently set at 0 16%.
(2) The employer rate for state elected officials is 7.89% for Plan 1 and 5.31% for Plan 2 and Plan 3.
(3) Plan 3 defined benefit portion only.
(4) The employee rate for state elected officials is 7.50% for Plan 1 and 3.90% for Plan 2.
(5) Variable from 5.0% minimum to 15.0% maximum based on rate selected by the PERS 3 member.
Both the City and the employees made the required contributions. The City's required contributions for the
years ended December 31 were as follows:
CITY CONTRIBUTIONS
PERS PLAN 1 PERS PLAN 2 PERS PLAN 3
2009 114,667 1,438,351 261,602
2008 145,121 1,456,931 252,135
2007 133,956 1,087,755 171,842
LAW ENFORCEMENT OFFICERS' AND FIRE FIGHTERS' RETIREMENT SYSTEM (LEOFF) PLANS I AND 2
PLAN DESCRIPTION
LEOFF is a cost sharing multiple employer retirement system comprised of two separate defined benefit
plans. LEOFF participants who joined the system by September 30, 1977, are Plan 1 members. Those
who joined on or after October 1, 1977, are Plan 2 members. Membership in the system includes all full -
time, fully compensated, local law enforcement commissioned officers, firefighters and, as of July 24, 2005,
those emergency medical technicians who were given the option and chose LEOFF Plan 2 membership
LEOFF membership is comprised primarily of non -state employees, with Department of Fish and Wildlife
enforcement officers, who were first included prospectively effective July 27, 2003, being an exception.
Effective July 1, 2003, the LEOFF Plan 2 Retirement Board was established by Initiative 790 to provide
governance of LEOFF Plan 2. The Board's duties include adopting contribution rates and recommending
policy changes to the Legislature for the LEOFF Plan 2 retirement plan.
LEOFF defined benefit retirement benefits are financed from a combination of investment earnings, employer
and employee contributions, and a special funding situation in which the state pays through state legislative
appropriations. LEOFF retirement benefit provisions are established in state statute and may be amended by
the State Legislature.
LEOFF Plan 1 members are vested after the completion of five years of eligible service. Plan 1 members are
eligible for retirement with five years of service at the age of 50. The benefit per year of service calculated as a
percent of final average salary (FAS) is as follows:
BENEFIT PERCENTAGE
TERM OF SERVICE % OF FINAL
AVERAGE
Twenty or More Years 2.0%
•
Ten years, less than twenty years 1.5%
Five years, less than ten years 1.0%
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The FAS is the basic monthly salary received at the time of retirement, provided a member has held the same
0 position or rank for 12 months preceding the date of retirement. Otherwise, it is the average of the highest
consecutive 24 months' salary within the last ten years of service. A cost of living allowance is granted (based
on the Consumer Price Index).
LEOFF Plan 2 members are vested after the completion of five years of eligible service. Plan 2 members may
retire at the age of 50 with 20 years of service, or at the age of 53 with five years of service, with an allowance
of two percent of the FAS per year of service. The FAS is based on the highest consecutive 60 months. Plan 2
members who retire prior to the age of 53 receive reduced benefits. Benefits are actuarially reduced for each
year that the benefit commences prior to age 53 and to reflect the choice of a survivor option. If the member
has at least 20 years of service and is age 50, the reduction is three percent for each year prior to age 53. There
is no cap on years of service credit and a cost of living allowance is granted (indexed to the Seattle Consumer
Price Index), capped at three percent annually
There are 375 participating employers in LEOFF Membership in LEOFF consisted of the following as of the
latest actuarial valuation date for the plans of June 30, 2008.
Retirees and beneficiaries receiving benefits 9,268
Terminated plan members entitled to
but not yet receiving benefits 650
Active plan members vested 13,120
Active plan members nonvested 3,927
Total 26,965
el FUNDING POLICY
Starting on July 1, 2000, LEOFF Plan 1 employers and employees contribute zero percent as long as the
plan remains fully funded. Employer and employee contribution rates are developed by the Office of the
State Actuary to fully fund the plan. LEOFF Plan 2 employers and employees are required to pay at the
level adopted by the LEOFF Plan 2 Retirement Board. All employers are required to contribute at the level
required by state law The Legislature, by means of a special funding arrangement, appropriated money from
the state General Fund to supplement the current service liability and fund the prior service costs of LEOFF
Plan 2 in accordance with the requirements of the Pension Funding Council and the LEOFF Plan 2 Retirement
Board. However, this special funding situation is not mandated by the state constitution and this funding
requirement could be returned to the employers by a change of statute.
The required contribution rates expressed as a percentage of current year covered payroll, as of December 31,
2009, were as follows:
CONTRIBUTION RATES
LEOFF PLAN I LEOFF PLAN 2
Employer(') 0 16% 5.24%
Employee 0.00% 8.46%
State N/A 3.38%
(1) The employer rates include the employer administrative expense fee currently set at 0 16%.
Both the City and the employees made the required contributions. The City's required contributions for the
years ending December 31 were as follows:
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CITY CONTRIBUTIONS
LEOFF PLAN I LEOFF PLAN.2
•
2009 $629 $1,002,165
2008 618 916,053
2007 708 784,226
OTHER RETIREMENT SYSTEMS — VOLUNTEER FIREFIGHTERS' RELIEF AND PENSION FUND
The Volunteer Firefighters' Relief and Pension Fund System is a cost sharing multiple employer retirement
system which was created by the Legislature in 1945 under Chapter 41 16 RCW It provides pension,
disability and survivor benefits. Membership in the system requires service with a fire department of an
electing municipality of Washington State except those covered by LEOFF The system is funded through
member contributions of $30 per year, employer contributions of $30 per year, forty- percent of the Fire
Insurance Premium Tax, and earnings from the investment of moneys by the Washington State Investment
Board. However, members may elect to withdraw their contribution upon termination
FIREMEN'S PENSION
The City has a single employer, defined benefit pension plan for Firefighters employed prior to March 1,
1970, and governed by Washington State Law RCW 41.26. Under the terms of the governing law, the pension
member is entitled to payment from the City's pension plan for those benefits in excess of those calculated
under the LEOFF plan.
The City's Firemen's Pension Fund is a closed group No new members are permitted. Employees attaining
the age of fifty who have completed 25 or more years of service are entitled to annual benefits of fifty- percent
of their salary plus an additional two- percent for each year of service in excess of 25 years, up to a maximum
of sixty- percent of salary The pension plan also provides death and disability pension benefits plus sick
benefits for eligible active and retired employees.
If the employee terminates his employment with the Fire Department and is not eligible for any other benefit
under the Firemen's Pension, the employee is entitled to the following:
➢ Return of accumulated contributions less any benefits paid.
➢ When a Firefighter would have had 25 years of service, 2% of salary for each year of service.
Firefighters are no longer required to contribute to the Firemen's Pension. The City is required to contribute
the amount necessary to fund the Firemen's Pension, using the aggregate projected benefit method. Under
state law, partial funding of the Firemen's Pension Fund may be provided by an annual tax levy of up to $.45
per $1,000 of assessed valuation of all taxable property of the City The Firemen's Pension Fund also receives
a proportionate share of the 25 percent of the tax on fire insurance premiums set aside by the state for all paid
firemen in the state. Additional funding is provided by investment interest earnings.
During the year ended December 31, 2009, there were no plan amendments.
CONTRIBUTIONS REQUIRED AND CONTRIBUTIONS MADE
The City's funding policy is to provide for periodic employer contributions at actuarially determined rates
that, expressed as percentages of annual covered payroll, are designed to accumulate sufficient assets to pay
benefits when due. The required contributions are determined using an aggregate projected benefit funding
method with the annual cost increasing six- percent per year over the period ending December 31, 2017
Under this method, the normal cost is a p
P ortion of the actuarial present value of benefits allocated to a •
valuation year. The actuarial accrued liability is equal to the actuarial value of assets. (Thus, there is no
unfunded actuarial accrued liability under this method.)
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Significant actuarial assumptions used to compute contribution requirements were the same as those used to
O compute the standardized measure of the pension benefit obligation.
POLICE PENSION
The City has a single employer, defined benefit pension plan for Police Officers employed prior to March 1,
1970, and governed by Washington State Law RCW 41.20 and 41.26. Under the governing law, the pension
member is entitled to payment from the City's pension plan for those benefits in excess of those calculated
under the LEOFF plan. The City also covers four members who were ineligible under the State Law
Enforcement Officers and Firefighters (LEOFF) Program.
The City's Police Pension Fund is a closed group No new members are permitted. Employees who have
completed 25 years or more of service are entitled to annual benefits of 50% of their salary plus an additional
2% for each year of service in excess of 25 years — up to a maximum of 60% of salary The plan provides death
and disability pension benefits plus sick benefits for eligible active and retired employees.
If the employee terminates his employment with the Police Department and is not eligible for any other
benefit under the Police Pension, the employee is entitled to the following:
➢ Return of 75% of contributions made after June 8, 1955, less any benefits paid.
➢ When Police Officer would have had 25 years of service, 2% of salary for each year of service.
Plan members are no longer required to contribute to the Police Pension. The City is operating on a pay as
you go basis.
411/ During the year ended December 31, 2009, there were no plan amendments.
CONTRIBUTIONS REQUIRED AND CONTRIBUTIONS MADE
The Police Pension is a department within the General Fund. The City engaged Milliman U.S.A., Consultant
& Actuaries, to perform the pension's actuarial study They issued a valuation dated January 1, 2008. The
valuation provided actuarially determined rates to accumulate sufficient assets to pay benefits when due
rather than the current pay as you go basis. The required contributions are determined using an aggregate
projected benefit method with the annual cost increasing six- percent per year over the period ending
December 31, 2017
SUMMARY OF FIREMEN'S PENSION AND POLICE PENSION
SCHEDULE OF FUNDING PROGRESS
(ROUNDED To THOUSANDS)
UNFUNDED
ACTUARIAL UAAL AS A
ACTUARIAL ACTUARIAL ACCRUED PERCENTAGE
VALUATION VALUE ACCRUED LIABILITIES FUNDED COVERED COVERED
DATE OF ASSETS LIABILITIES (UAAL) RATIO PAYROLL PAYROLL
Fire Pension 1/1/98 $70 $10,455 $10,375 1% $270 3,843%
1/1/03 658 8,520 7,862 8% 0 N/A
1/1/08 646 9,935 9,289 7% 0 N/A
Police Pension 1/1/98 0 8,277 8,277 0% 264 3,135%
1/1/03 0 8,154 8,154 0% 0 N/A
III 1/1/08 0 9,002 9,002 0% 0 N/A
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NOTE 6 - SELF- INSURANCE FUNDS
The City maintains Reserve Funds to provide for self insurance coverage in the areas of Unemployment .'
Compensation, Medical / Dental coverage, and Workers' Compensation. In addition, the City maintains a
Risk Management Fund to provide for property, liability, and other coverage.
UNEMPLOYMENT COMPENSATION
In 1978, the City of Yakima established an Unemployment Compensation Reserve Fund to provide
unemployment compensation coverage for its employees, and thereby elected to participate with the State of
Washington in a cost reimbursement instead of monthly premium program. In doing so, the City retained its
right to appeal awards and determinations made by the State Department of Employment Security
The City has contracted with Talx Corporation UCeXpress to represent the City in appeal hearings and to
provide audits of state awards.
The State of Washington invoices the City on a quarterly basis for reimbursement of claims which represent
payment of unemployment compensation and related administrative costs. Resources accrue to the
Unemployment Compensation Reserve Fund through monthly charges made to each Operating Fund based
on employee earnings. Normal accrual rates have been between .5 and 75 percent of gross payroll, while
costs under the monthly premium program would have been approximately three- percent of payroll. The
City has achieved considerable savings. Interfund premiums are based primarily upon the insured funds
claims experience and are reported as quasi external interfund transactions, a total for 2009 of $117,392.
Incurred but not reported claims of $37,073 have been accrued as a liability
SELF INSURED MEDICAL /DENTAL PROGRAM
The City, in August, 1979, self insured its medical and dental programs for all eligible employees (temporary
employees and employees hired to work less than half time are not eligible to participate in the plan). The
City's Human Resources Office administers the self insured program and claims payment services are
provided by Healthcare Management Administrators, Inc.
Each Operating Fund is charged an accrual amount per covered employee which would otherwise have been
paid to an insurance carrier. These amounts are determined by the City based upon recommendations made
by Emspring (formerly Fisher Consulting). Factors considered by the broker include the amount of claims paid
the previous year, increases over prior years, claims administration costs, projected insurance industry inflation
rates and the status of the Fund's Reserve. Interfund premiums to the Employee Health Benefit Reserve Fund
for 2009 were $7,666,516. Incurred but not reported claims of $1,283,078 have been accrued as a liability
In order to avoid catastrophic losses, the City reinsures the program by purchasing insurance known as
"stop loss insurance." Two types of "stop loss" insurance are purchased. 1) individual stop loss, and, 2)
aggregate stop loss, with both provided through Sunlife Insurance Co Under the individual stop loss
insurance, the City pays the first $175,000 of claims for an individual employee or dependent. Any charges
accrued by an individual in excess of $175,000 in a calendar year are thereafter reimbursed by Sunlife, up to
a lifetime maximum benefit of $1 million per person. The aggregate stop loss is designed to protect the City
from multiple large claims which may not reach the individual stop loss attachment point ($175,000) The
aggregate stop loss attachment point is calculated by determining the projected amount of claims for the year
and adding an additional 25% of that amount (125% of projected claims)
WORKERS' COMPENSATION PROGRAM
The City self - insured its workers' compensation program for all employees except those covered by the
LEOFF 1 Retirement System in July, 1984. This workers' compensation program provides coverage identical •
to the state administered workers' compensation program, however, the City pays only the direct injury
related costs and certain administrative fees. The program is administered by the City's Human Resources
Office with claims administration and safety services provided by Intermountain Claims, Inc.
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Each Operating Fund is charged an appropriate accrual amount, per employee, based on rate requirements
* prescribed by the State of Washington. Each year the Reserve Fund is reviewed to determine a contribution
rate which provides for an appropriate reserve. Interfund premiums to the Workers' Compensation Fund for
2009 were $1,245,097 Based on the claims manager's estimate, the City has accrued incurred but not reported
claims of $843,035 at December 31, 2009
In order to avoid catastrophic losses, the City "reinsures" the program by purchasing insurance known as
"stop loss" insurance. This insurance is provided through Wells Fargo Insurance Services under a policy
purchased from Safety National Casualty Corporation. Under the individual stop loss coverage, the City
pays the first $550,000 of a claim and the insurance company pays (a) the balance up to $1 million for an
individual claim or (b) the balance up to a maximum of $25 million for multiple claims arising from a single
incident.
RISK MANAGEMENT PROGRAM
The City is exposed to various risks of loss related to torts, theft of, damage to, and destruction of assets,
errors and omissions, and natural disasters. The Risk Management Fund was established in 1986 to account
for its risk management program. Resources accrue to the fund through interfund premiums to operating
funds for appropriate insurance coverage and the replenishment and building of reserves for potential
liability claims. City contributions to the Risk Management Reserve Fund for 2009 were $2,240,533 The fund
provides for administration, legal services, and claims adjustment and for the purchase of property, general
liability, and other insurance coverage.
Liabilities of the fund are reported when it is probable that a loss has occurred and the amount of the loss can
be reasonably estimated. Liabilities include an amount for claims that has been incurred but not reported.
The result of the process to estimate the claims liability is not an exact amount as it depends on many complex
factors, such as inflation, changes in legal doctrines, and damage awards. Accordingly, claims are reevaluated
periodically to consider recent claim settlement trends, inflation, and other economic or social factors. The
estimate of the claims liability also includes amounts for incremental claim adjustment expenses related to
specific claims. Estimated recoveries, for example from subrogation, are another component of the claims
liability estimate. Based on these factors, the claims manager's estimate of claims liability at December 31,
2009, is $976,000.
PROPERTY INSURANCE COVERAGE
The City of Yakima purchases property insurance and boiler and machinery insurance from Affiliated
FM Insurance Company covering loss or damage to City owned property from various perils including
earthquake and flood. The policy is subject to a $100,000,000 limit per occurrence and a $100,000 per
occurrence deductible. The policy number from 1/10/09 to 1 /10 /10 was PB218.
CITIES INSURANCE ASSOCIATION OF WASHINGTON
The City of Yakima became an associate member of the Cities Insurance Association of Washington (CIAW)
effective December 14, 2005
Chapter 48.62 RCW authorizes the governing body of any one or more governmental entities to form together
into or join a pool or organization for the joint purchasing of insurance, and / or joint self - insuring, and / or
joint hiring or contracting for risk management services to the same extent that they may individually
purchase insurance, self - insure, or hire or contract for risk management services. An agreement to form a
pooling arrangement was made pursuant to the provisions of Chapter 39.34 RCW, the Interlocal Cooperation
Act. The pool was formed on September 1, 1988, when 32 cities in the State of Washington joined together
O by signing an Interlocal Governmental Agreement to pool their self - insured losses and jointly purchase
insurance and administrative services.
The pool allows members to jointly purchase insurance coverage and provide related services, such as
administration, risk management, claims administration, etc. Coverage for Public Officials Liability is on
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a "claims made" basis. All other coverages are on an "occurrence basis" The pool provides the following
forms of group purchased insurance coverage for its members: property, general liability, law enforcement
liability, automobile liability, employment practices liability, boiler and machinery, bonds of various types,
and public officials liability
The City of Yakima participates in the liability coverages provided by the CIAW The insurance policy period
through CLAW is from September 1st to September 1st of each year. For the insurance policy period from
9/01/08 to 9/01/09, the City of Yakima has general liability, public officials liability, law enforcement liability,
employment practices liability and automobile liability coverage, subject to a deductible amount of $100,000
per occurrence, through its associate membership in the Cities Insurance Association of Washington with
St. Paul Fire and Marine Insurance Company, St. Paul Minnesota, policy no. GP06302090 For the insurance
policy period from 9/01/09 to 9/01/10, the City of Yakima has general liability, public officials liability, law
enforcement liability, employment practices liability and automobile liability coverage, subject to a deductible
amount of $100,000 per occurrence, through an associate membership in the Cities Insurance Association
of Washington with Munich Reinsurance America, Inc., and Torus Specialty Insurance Company, policy no.
CIAW091034514. The per occurrence and aggregate limits of liability of the general liability coverage through
CLAW are $15,000,000 per occurrence with $25,000,000 aggregate for general liability Since joining CLAW
on December 14, 2005, the City of Yakima has not had any settlements that exceeded its insurance coverage
through CIAW
Claims are submitted by the City with Canfield & Associates, which has been contracted by CIAW to perform
pool administration, claims adjustment and administration and loss prevention for the pool. The Board of
Directors of CIAW has contracted with Canfield & Associates to perform day to day administration of the
pool. Copies of the CIAW pool's annual report may be obtained by writing to 451 Diamond Drive, Ephrata,
WA 98823
WASHINGTON STATE TRANSIT INSURANCE POOL
The City of Yakima Transit Division is insured for liability insurance through the Washington State Transit
Insurance Pool (WS'1'll'). The City of Yakima Transit Division joined WSTIP on September 1, 2005
For the insurance policy period of 1/1/09 to 1/1/10, the City of Yakima Transit Division has liability
coverage, which is not subject to a deductible amount ($0 deductible), under coverage document no. WSTIP
2009 GL - YT, and public official liability coverage, subject to a deductible amount of $5,000, under coverage
document no WSTIP POL 2009 - YT, with the Washington State Transit Insurance Pool, Olympia, Washington.
The per occurrence and aggregate limits of liability of the liability coverage through WSTIP are $12,000,000
Since joining WSTIP on September 1, 2005, the City of Yakima Transit Division has not presented any claims
to WSTIP that exceeded its coverage limits through WSTIP
WSTIP is a 24- member self insurance program with public transit members who provide transit services and
is located in Olympia, Washington. WSTIP supplies Yakima Transit auto liability, general liability, and public
officials liability coverage.
The Washington State Transit Insurance Pool was formed by Interlocal Agreement on January 1, 1989,
pursuant to Chapters 48.61 and 39.34 RCW The purpose for forming WSTIP was to provide member Transit
Systems programs of joint self - insurance, joint purchasing of insurance and joint contracting for hiring of
personnel to provide risk management, claims handling and administrative services. Transit authorities
joining the Pool must remain members for a minimum of 36 months, a member may withdraw from the
Pool after that time by giving 12 months notice. The Pool underwriting and rate setting policies have been
established after consultation with actuaries. The Pool members are subject to a supplemental assessment in
the event of deficiencies. If the assets of the Pool were to be exhausted, members would be responsible for
the Pool's liabilities. WSTIP is regulated by the Washington State Risk Manager and audited yearly by the
Washington State Auditor.
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Yakima Transit has not presented any claims to WSTIP in the last three years that exceeded its current
. coverage limits through WSTIP
Yakima Transit carries the following policies of insurance with the indicated lunits of liability
RISK COVERAGE PERIOD COVERAGE
Auto Liability 1/1/09 - 12/31/09 $12,000,000 per occurrence with a $0 deductible
General Liability 1/1/09 - 12/31/09 $12,000,000 per occurrence with a $0 deductible
Public Officials 1/1/09 - 12/31/09 $12,000,000 per claim / aggregate with a $5,000 deductible
Coverage for public official liability is on a "claims made" basis. All other coverage's are on an "occurrence"
basis.
Changes in the balance of claims liability during 2009 follows:
2009 2008
Unpaid Claims, January 1 $1,100,000 $1,100,000
Incurred Claims (including incurred but not reported) 660,631 698,409
Claim Payments (including direct legal costs) (784,631) (698,409)
Unpaid Claims, December 31 $976,000 $1,100,000
NOTE 7 - LONG -TERM DEBT AND CAPITAL LEASES
*The State law provides that debt cannot be incurred in excess of the following percentages of the value of the
taxable property of the City
LEGAL DEBT PERCENTAGE
LIMIT CUMULATIVE
BY SECTION LIMIT
General Purpose
Without a Vote (includes capital leases) 1.50%
With a Vote 1.00% 2.50% 2.50%
Utilities Purpose 2.50% 5.00%
Open Space and Parks Facilities 2.50% 7.50%
TOTAL LEGAL LIMIT 7.50%
The basic percentages for Section I are the maximum levels of indebtedness those sections may incur.
However, utility or parks indebtedness may each exceed 2.50% and reduce the general indebtedness margin.
The percentages are applied to the taxable assessed value (regular levies) of $5,389,218,769 resulting in the
debt limits, as of December 31, 2009, for the City as follows:
DEBT LIMITS
WITHOUT A VOTE WITH A VOTE
GENERAL GENERAL UTILITIES OPEN SPACE
PURPOSE I.5% PURPOSE 2.5% 5.0% & PARKS 7.5%
Legal Limit $80,838,282 $134,730,469 $269,460,938 $404,191,407
1111 Net Outstanding Indebtedness* 27,343,424 28,468,687 28,468,687 28,468,687
Margin Available $53,494,858 $106,261,782 $240,992,251 $375,722,720
* Indebtedness is the outstanding debt less cash, investments, and tax receivables available to redeem debt.
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There have been no material violations of finance related legal or contractual provisions in any of the funds of
the City All bonded debt of the City is tax - exempt. We believe the City to be in compliance with applicable
IRS & SEC regulations.
The accompanying schedule of long term debt provides a listing of the outstanding debt of the City and
summarizes the City's debt transactions for 2009
LONG -TERM LIABILITIES
AMOUNTS
BALANCE PAYMENTS / BALANCE DUE WITHIN
I/1/2009 ADDITIONS RETIREMENTS 12/31/2009 ONE YEAR
Governmental Activities
General Obligation Debt
Bonds $21,973,052 $7,035,000 $2,029,241 $26,978,811 $2,098,125
Intergovernmental Loans 1,294,328 600,000 393,420 1,500,908 504,062
Contractual Agreement — Yakima County 315,260 0 70,454 244,806 72,537
Special Assessment — Notes 334,600 0 78,100 256,500 38,762
Lease Purchase Agreements 71,705 0 61,647 10,058 10,058
Unfunded Post Employment Benefits Liability 7,203,200 1,631,801 0 8,835,001 0
Vacation / Sick Leave Accrual 6,128,116 27,981 0 6,156,097 0
Total Government Activities Long -Term Debt $37,320,261 $9,294,782 $2,632,862 $43,982,181 $2,723,544
Business Type Activities
Revenue Debt Payable
Revenue Bonds $27,725,000 $0 $1,645,000 $26,080,000 $1,705,000
Intergovernmental Loans 10,592,819 1,130,740 966,916 10,756,643 1,064,843
SIED Loans — Yakima County 49,102 0 14,066 35,036 14,788
Unam Debt Issue Cost / Prem / Disc / Def Amt 228,353 0 (4,926) 233,279 0
Total Revenue Debt Payable $38,595,274 $1,130,740 $2,621,056 $37,104,958 $2,784,631
Total Long -Term Debt $75,915,535 $10,425,522 $5,253,918 $81,087,139 $5,508,175
GENERAL OBLIGATION DEBT
General obligation bonds consist of serial and term bonds, to be retired through the fiscal year ending
December 31, 2026. The City levies a special property tax, collects motel / hotel taxes, Business License fees,
utility taxes, and receives State sales tax credits and gas tax for the principal and interest payments due within
a fiscal year and provides the amounts in the respective Debt Service Fund.
On August 18, 2009 the City issued $7,035,000 in Limited Tax General Obligation Bonds in 2 separate series —
$2,055,000 in Series 2009A, and $4,980,000 in Series 2009B Taxable (Build America Bonds — Direct Payment).
The proceeds from these bonds are being used to finance the expansion, rehabilitation, and improvement of
the Capitol Theatre (a performing arts theatre located in the City) and to repay the interfund loan.
Series 2009A and Series 2009B will be retired in December 1, 2018 and December 1, 2032, respectively The
average annual debt service of $460,000 net of Federal subsidy is intended to be paid from sales and use tax
by the City from the Yakima Regional Public Facilities District.
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GENERAL OBLIGATION BONDS
0 AVERAGE
DATE .OF ANNUAL
FINAL INTEREST ORIGINAL OUTSTANDING DEBT
MATURITY RATE ISSUE 12/3 I /2009 SERVICE
Special Property Tax Levy
2004 Fire Improvement Bonds Ref 1995 12/01/2014 2.0% - 3.5% $2,300,000 $1,330,000 $294,560
Regular Property Tax Levy
2005 Parks Capital Projects 12/01/2015 4.0% - 4.5% 755,000 490,000 94,554
2008 Fire Ladder Truck 12/01/2021 3.25% - 4.0% 760,000 705,000 75,620
Total Regular Property Tax Levy 1,515,000 1,195,000
Regular Property Tax Levy / Real Excise Tax / Gas Tax
2007 River Road Street Project Bond 05/01/2017 4.0% - 5.0% 1,765,000 1,470,000 219,992
2007 Fire Station West Valley Rehab Bond 05/01/2022 4.0% - 5.0% 815,000 735,000 73,434
2007 Downtown Revitalization Project Bond 05/01/2022 4.0% - 4.5% 1,490,000 1,340,000 133,814
2008 Third Ave / Mead Walnut St Project Bond 12/01/2019 3.25% - 4.0% 2,190,000 1,980,000 240,594
Total Regular Property Tax Levy / Real Excise Tax 6,260,000 5,525,000
Hotel / Motel Tax
2004 Cony Center Expansion Bonds Ref 1996 11/01/2019 2.0% - 4.2% 4,175,000 3,420,000 419,183
Public Facilities District — State Sales Tax Credit
2002 Convention Center Addition 06/01/2012 3.0% - 5.0% 6,735,000 675,000 239,725
2007 Convention Center Addition Refunding 2002 05/01/2026 4.0% - 5.0% 4,910,000 4,890,000 414,988
4111 2009 Capitol Theatre Expansion 12/01 /2032 3.0% - 6.6% 7,035,000 6,860,000 551,521
Total Public Facilities District 18,680,000 12,425,000
Business Licenses & Real Estate Excise Tax
2003 SunDome Expansion 12/01/2023 2.34% - 4.72% 1,430,528 1,173,811 148,552
Utility Tax
2003 Criminal Justice / 1 -82 Bonds ref 1994 12/01 /2013 4.35% - 5.25% 4,155,000 1,910,000 514,216
$38,515,528 $26,978,811
REVENUE BONDS
Water / Wastewater / Irrigation revenue bonds consist of serial and term bonds, to be retired through the fiscal year
ending December 31, 2034. The principal and interest for the water / wastewater parity revenue bonds are provided
by the results of operations. Principal and interest on Irrigation System Bonds are provided by capital rates.
UTILITY REVENUE BONDS
AVERAGE
DATE OF ANNUAL
FINAL INTEREST ORIGINAL OUTSTANDING DEBT
MATURITY RATE ISSUE 12/31/2009 SERVICE
2003 Wastewater Revenue Bonds 11 /01/2023 2.0% - 5.0% $17,545,000 $13,465,000 $1,347,278
2004 Irrigation Revenue Bonds 09/01/2034 2.0% - 4.8% 5,215,000 4,695,000 320,211
2008 Water / Wastewater Revenue Bonds 11/01/2011 4.0% - 5.0% 1,516,049 1,025,000 542,497
(Refund of 1998 — Refund of 1991)
2008 Water Rev Bonds (Refund of 1998) 11/01/2018 4.0% - 5.0% 1,883,951 1,720,000 235,490
2008 Wastewater Revenue Bonds 11/01/2027 /01 /2027 4.0% - 5M% 5,440,000 5,175,000 413,317
$31,600,000 $26,080,000
The following Schedule sets forth revenue debt service requirements to maturity (in thousands) and depicts
both bond and intergovernmental loans and contracts.
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REVENUE DEBT SERVICE
BONDED NOTES AND
DEBT INTEREST CONTRACTS INTEREST
2010 $1,705 1,158 $1,065 $64
2011 1,765 1,097 1,065 57
2012 1,285 1,031 1,065 49
2013 1,335 983 1,003 41
2014 1,395 930 832 35
2015 - 2019 7,660 3,670 3,086 109
2020 - 2024 7,295 1,764 2,121 41
2025 - 2029 2,245 591 519 5
2030 - 2034 1,395 207 0 0
$26,080 $11,431 $10,756 $401
At December 31, 2009, the City had $2,365,700 in reserved net assets for debt service for the enterprise funds.
These are in compliance with reserve requirements as contained in the various indentures.
INTERGOVERNMENTAL LOANS AND CONTRACTUAL AGREEMENTS
The City participated in a program administered by the State's Department of Community Development
on behalf of the Public Works Board. The program provides financial assistance for general government
activities, such as street / bridge improvements, or proprietary activities, such as water or sewage projects.
The City has 19 loans through the Washington State Loan Programs as described in the following chart.
PUBLIC WORKS TRUST FUND LOANS
MATURITY MAXIMUM OUTSTANDING
INTEREST DATE AUTHORIZED 12/31 /2009
Real Estate Transfer Tax
PW-5-91-280-071 - Fruitvale Canal Wasteway 3.0% 07/01 /2011 1,188,000 $121,337
Arterial Street Gas Tax
PW -5 -90- 280 -050 - Tieton Drive, 5th Avenue to 16th Avenue 3.0% 07/01/2011 803,157 31,756
PW -5 -91- 280 -070 - N 1st Avenue, Yakima Avenue to "I" Street 1.0% 07/01/2011 1,155,000 99,942
PW -5 -95- 791 -052 - Fair Avenue Improvements 1.0% 07/01/2011 1,000,000 319,504
PW -00- 691 -062 - Downtown Yakima Rehabilitation Project 1.0% 06/10/2010 1,180,000 126,048
Railroad Grade Separations - Lincoln Ave / MLK Jr Blvd 0.5% 07/01 /2028 3,000,000 600,000
General Fund Sales Tax
CERB loan #C95 -107 Utilities - Madison Ave. and 8th, "J" St and 8th 6.0% 07/01/2016 425,448 202,321
Sub - Total - General Long -Term Debt $1,500,908
Wastewater Operating Revenue
PW -5 -92- 280 -046 - Wastewater Collection System Improvements 1.0% 07/01/2012 1,120,000 $185,193
PW -5 -93- 280 -054 - Wastewater Facility Rehabilitation 1.0% 07/01/2013 3,221,708 682,023
PW -5- 94-784 -049 - Wastewater Collection System Improvements 1.0% 07/01/2014 1,481,000 204,505
PW -5 -95- 791 -053 - Headworks / Digester Rehabilitation 1.0% 07/01/2015 3,030,558 980,247
PW -5 -95- 791 -054 - Wastewater Improvements King Street Collector 1.0% 07/01/2015 209,367 70,111
PW-01-691-071 - Fruitvale Neighborhood WW - Water Project Phase I 0.5% 07/01 /2021 1,466,250 931,500
PW -05- 691 -064 - Fruitvale Neighborhood WW - Water Project Phase I 0.5% 07/01/2025 2,307,000 1,872,583
PW -07- 962 -019 - Ultra Violet Disinfection 0.5% 07/01 /2027 2,300,000 2,185,000
Water Operating Revenue
PW -03 -027 - Naches River Water Treatment Plant Improvement 0.5% 07/01/2023 2,694,000 1,886,150
SRF -04- 65104 -037 - Naches River Water Treatment Filter Rehab 0.5% 10/01/2025 966,772 743,590
PC08-951-051 - New Water Well 0.5% 07/01/2021 2,257,200 1,015,740
Sub - Total - Revenue Debt $10,756,642
Total Intergovernmental Loans $12,257,550
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The Public Works Trust Fund loans have a term not to exceed twenty years and require 1/19th of the original
al principal plus interest to be paid each July 1st. These are subordinate to utility systems' parity debt and do
not require a full, faith and credit pledge.
The City has entered into contractual agreements with Yakima County for Supporting Investments in
Economic Development (SIED) Loans for several different infrastructure projects, the detail of which follows:
CONTRACTUAL AGREEMENTS
ORIGINAL OUTSTANDING
FUNDING SOURCE /USE • ISSUE DATE MATURITY DATE ISSUE 12/31/2009
Contracted Assessment 2001 Issue 06/01/2011 $44,000 $10,300
Hotel / Motel Tax 2003 Issue 06/01 /2010 75,000 10,714
Contracted Assessment 2005 Issue 06/01 /2010 25,000 5,466
Contracted Assessment 2006 Issue 06/01 /2012 64,500 29,570
Contracted Assessment 2006 Issue 06/01/2011 50,000 32,968
Contracted Assessment 2008 Issue 06/01/2012 27,500 16,933
Contracted Assessment 2008 Issue 06/01/2012 214,000 173,889
$500,000 $279,840
The following schedule sets forth the general obligation debt and intergovernmental loans and contracts, debt
service requirements including interest, to maturity (in thousands)
GENERAL OBLIGATION DEBT SERVICE
BONDED NOTES AND
0 DEBT INTEREST CONTRACTS INTEREST
2010 $2,098 $1,142 $504 $23
2011 2,157 1,079 348 16
2012 2,222 1,014 238 12
2013 2,304 943 208 9
2014 1,855 868 84 6
2015 - 2019 7,887 3,412 119 6
2020 - 2024 4,355 2,094 0 0
2025 - 2029 2,745 865 0 0
2030 - 2032 1,355 181 0 0
$26,978 $11,598 $1,501 $72
At December 31, 2009, the City had $537,359 available in debt service funds to service the General Obligation
Bonds and notes.
There are a number of other limitations and restrictions contained in the various bond indentures. The City is
in compliance with all significant limitations and restrictions.
SPECIAL ASSESSMENT DEBT WITH GOVERNMENTAL COMMITMENT
Debt service requirements for special assessment notes are met by assessments levied against property
owners. The special assessment debt are notes that are due as moneys become available from payments on
individual assessments. Special assessment debts currently outstanding are as follows:
LID #1056, 12/17/2015 Wastewater
South 7th, 8th, & 9th Avenue Installment Note, 8.75% Interest $89,000
LID #1057, 05/01/2016 Wastewater
• North 84th Ave & Hawthorne Dr - Installment Note, 9.25% Interest 82,500
LID #1058, 05/01/2016 Wastewater
North 90th Ave, 94th PI, Yakima Ave Installment Note, 9.25% Interest 85,000
Total $256,500
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Debt service requirements for special assessment notes / bonds are met by assessments levied against
property owners. Pursuant to RCW 35.54, the City maintains a Local Improvement Guarantee Fund for
the purpose of guaranteeing, to the extent of the fund, the payments of its LID bonds. The fund balance at
December 31, 2009, of the LID Guarantee Fund totaled $79,830.
LEASE PURCHASE AGREEMENTS
GENERAL CAPITAL ASSETS
As part of the City's capital equipment budgeting program, selected items are obtained via lease purchase
and municipal lease / deferred purchase plans. Since the leases are financing agreements which transfer
ownership to the City at the end of the lease term, the City records the present value of future lease payments
as a capital outlay expenditure and as an offset to other financial sources in the year that the asset is received.
The present value of payments due in future periods is shown as a liability in the financial statements and the
cost of the asset is recorded in the financial statements. A summary of the leased equipment is detailed below.
Vehicles $10,059
Total $10,059
The following is a schedule of the future minimum lease payments under the above capital lease and the
present value of net minimum lease payments at December 31, 2009, for the fiscal year listed.
2010 $10,286
Less: Amount Representing Interest 227
Present Value of Net Minimum Lease Payments $10,059
UNFUNDED POST EMPLOYMENT BENEFIT LIABILITIES
The City maintains two single employer defined benefit pension plans, Firemen's Pension and Police Pension,
which are closed systems covering Firemen and Police Officers hired prior to March 1, 1970 Both plans had
their first annual actuarial valuation as of March 31, 1989 The required contributions identified in this and
subsequent studies were the basis for recording the unfunded pension liability since 1989, with the most
recent study performed as of January 1, 2008.
Starting in 2008, the City implemented GASB 45 for Other Post Employment Benefits (OPEB), and initial
actuarial evaluations were performed as of January 1, 2008. By State statute, the City is required to provide
healthcare benefits for certain retired police officers and firefighters. The City's self - insured medical plan
allows retirees and the eligible dependents to self -pay premiums using the same rate as active employees, until
they reach age 65, thereby creating an "implicit rate subsidy" All three of the programs are pay as you go.
The following chart details the outstanding liabilities:
BALANCE BALANCE
1/1/09 ADDITIONS 12/31/09
Unfunded Pension Liability — Police $5,421,961 (47,608) $5,374,353
Unfunded OPEB Liability — Fire LEOFF 1 678,235 628,396 1,306,631
Unfunded OPEB Liability — Police LEOFF 1 577,126 562,109 1,139,235
Unfunded OPEB Liability — Non -LEOFF 1 525,878 488,904 1,014,782
Total Post Employment Benefit Liability $7,203,200 $1,631,801 $8,835,001
0 Both the Police Pension and Police OPEB are paid out of a department in the General Fund. The Fire OPEB
are paid through the Firemen's pension trust fund. The non -LEOFF retiree benefits are being paid annually
through the Employees Health Benefit Reserve fund. The unfunded pension liability will be adjusted
annually by comparing actual expenditures for benefits to the actuarially determined contribution.
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The Firemen's Pension is a trust fund and has as its funding sources a portion of local property taxes, a
state tax on fire insurance premiums, and interest income. This fund has an unfunded pension liability of
$1,886,709 at December 31, 2009
See Note 5 for additional information on the pension funds, and Note 11 for additional information on Other
Post Employment Benefits.
NOTE 8 - CONTINGENCIES
The City participates in a number of federal and state assisted programs. These grants are subject to audit
by the grantors or their representatives. Such audits could result in requests for reimbursement to grantor
agencies for expenditures disallowed under the terms of the grants. City management believes that such
disallowances, if any, will be immaterial.
SECTION 108 LOAN PROGRAM
In 2003, the City was authorized to administer a Housing and Urban Development (HUD) Section 108 Loan
program. HUD has authorized the City to lend up to a maximum of $6.945 million in two separate loan pools
($4 million in 2003 and $2.945 million in 2005). These federal loans are available for the purpose of funding
property rehabilitation for economic development activities that will create new jobs within the target area. As
of December 31, 2009, the City has approved all its authorized maximum Section 108 loans of $6.945 million.
The nature of this program is the City approves qualified projects for the loan within HUD guidelines and acts
as a conduit for HUD funds. The loan proceeds flow directly to the ultimate Corporate Borrower. Payments
411 flow from the Corporate Borrower to the City's Custodian and then to HUD The loans are on an amortization
schedule from 10 years to 25 years. The HUD contract specifically provides that the loans are not full faith and
credit obligations of the City, but instead, future Community Development Block Grant (CDBG) allocations
are pledged on these loans. The City has entered into agreements to collateralize their position within HUD
underwriting guidelines. In 2005, one of the loans was defeased, and another defeased in 2009 Additionally,
the City has been awarded a $1 million Economic Development Initiative (EDI) grant from HUD as a
protection in case of a default. As of December 31, 2009, one of the loans was past due and the EDI grant was
used to pay a portion of the principal and interest due. (The EDI grant can be utilized for past due payments).
POTENTIAL LITIGATION
On February 15, 2005, Congdon Orchards, Inc. and Congdon Development Company, LLC (Congdon) filed a
damage claim with the City alleging Congdon has been wrongfully damaged by Yakima's breaches of contract,
negligence, tortious conduct, breaches of duties, errors and omissions, and other wrongful conduct. Congdon
alleged its damages exceeded $21 million and continue. The City entered into letter agreements extending a
2005 tolling agreement, and the tolling agreement will now expire on October 1, 2011. Congdon has not filed a
lawsuit, and it is not known whether it will do so. The City believes the chances of recovery are low
Because of its activities, the City is subject to certain pending legal actions which arise in the ordinary course
of business. The City believes, based on the information presently known, that the ultimate liability for any
such legal actions will not be material to the financial position of the City
NOTE 9 - SEGMENT INFORMATION
WATER AND WASTEWATER UTILITIES
For the purposes of revenue bond debt issuance, the water and wastewater utilities are combined m a single
segment (i.e., the System). Therefore, investors in the revenue bonds rely on the revenue generated by both
activities for repayment. In 2004, the City issued the first $5 million of $10 million revenue bonds authorized
for the Irrigation system. The balance may be issued in 2011, or later as needed. Investors in these revenue
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bonds rely solely on the revenue generated from the irrigation utility for repayment. Summary financial
information for the System and irrigation utility follows.
•
SYSTEM INFORMATION
WATER I
WASTEWATER IRRIGATION
CONDENSED STATEMENT OF NET ASSETS
Assets
Current Assets $17,009,074 $2,942,416
Restricted Assets 2,330,264 35,436
Capital Assets 104,851,841 13,899,249
Total Assets 124,191,179 16,877,101
Liabilities
Current Liabilities 4,911,589 662,771
Noncurrent Liabilities 29,868,832 4,466,271
Total Liabilities 34,780,421 5,129,042
Net Assets
Invested in Capital Assets, Net of Related Debt 77,453,726 9,248,404
Restricted 2,330,264 35,436
Unrestricted 9,626,768 2,464,219
Total Net Assets $89,410,758 $11,748,059
CONDENSED STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET ASSETS
Operating Revenues
Charges for Services $23,019,243 $2,642,753
Other Operating Revenues 18,456 3,639
Total Operating Revenues 23,037,699 2,646,392
Operating Expenses
Operations and Maintenance 16,349,226 1,314,612
Depreciation 3,869,359 200,839
Total Operating Expenses 20,218,585 1,515,451
Operating Income (Loss) $2,819,114 $1,130,941
Nonoperating Revenues (Expenses)
Miscellaneous Interest (Net) ($840,448) ($173,861)
Other Nonoperating (Net) 37,977 0
Total Nonoperating Revenues (Expenses) (802,471) (173,861)
Income (Loss) Before Contributions and Transfers $2,016,643 $957,080
Capital Contributions 1,266,235 0
Operating Transfers (Net) (537,074) (112,250)
Change in Net Assets $2,745,804 $844,830
Total Net Assets — January 1 $86,664,954 $10,903,229
Total Net Assets — December 31 $89,410,758 $11,748,059
CONDENSED STATEMENT OF CASH FLOWS
Net cash Provided (Used) by
Operating Activities $6,999,906 $1,321,884
Capital and Related Financing Activities (7,840,576) (2,247,026)
Investing Activities (3,456,187) 1,043,500
Net Increase (Decrease) ($4,296,857) $118,358
Beginning Cash and Cash Equivalents $9,651,653 $643,780
Ending Cash and Cash Equivalents $5,354,796 $762,138
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NOTE 10 - JOINT VENTURES
` YAKIMA AIR TERMINAL
The City and the County of Yakima entered into a joint venture for operation of the Yakima Air Terminal on
July 1, 1982. The Yakima Air Terminal Board is comprised of five individuals: two appointed by the City,
two by the County, and one selected by the four appointees. Annually, the governing bodies of the City and
County each designate one of its members as an advisory ex- officio member of the Air Terminal Board.
The City and the County contribute equally to the joint venture and own jointly, in equal shares, all properties
or facilities, however, annual profits and losses are retained by the Airport. The Yakima Air Terminal is
presently self - sustaining. We have considered disclosure requirements promulgated in GASB 39 and have
elected to continue to disclose the joint venture in a manner consistent with prior years. We feel the effects of
the joint venture on the combined Financial statements taken as a whole is immaterial.
The Air Terminal budget is approved, amended and / or supplemented by joint resolution of the City and
County Real property acquisition and sale in excess of $50,000 must be approved by both the City and
County Issuance of bonds for Airport purposes by the City or County requires both party's approval.
Unaudited financial data for the year ended December 31, 2008, the most recent available, is as follows:
YAKIMA AIR TERMINAL FINANCIAL DATA
ASSETS
Current Assets $888,789
Property, Plant and Equipment, Net 6,929,222
Intangible Assets, Net 63,991
Construction in Progress 847,603
Total Assets $8,729,605
LIABILITIES
Current Liabilities $83,799
Other Liabilities — Long -Term Debt 30,485
Total Liabilities $114,284
NET AssETs
Restricted Net Assets $7,970,306
Unrestricted Net Assets 645,015
Total Net Assets $8,615,321
REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS
Operating Revenues $1,060,754
Operating Expenses
Operations / Maintenance $1,046,431
Depreciation 1,171,079
Total Operating Expenses $2,217,510
Total Operating Income (Loss) ($1,156,756)
Nonoperating Revenues (Expenses)
Miscellaneous Interest Revenue $13,278
Operating Subsidies 418,481
Other 197,098
• Total Nonoperating Revenues (Expenses) $628,857
Total Net Income (Loss) ($527,899)
Total Net Assets, January 1 $9,143,222
Total Net Assets, December 31 $8,615,323
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Complete financial statements for the Airport can be obtained from the Yakima Air Terminal at 2400 West
Washington Avenue, Yakima, WA, 98903
NOTE 11 - OTHER POSTEMPLOYMENT BENEFIT PLANS
BENEFITS OTHER THAN PENSION BENEFIT
In addition to providing pension benefits, the City provides certain health care (100% of medically necessary
costs) and life insurance benefits for retired employees under the City's Firemen's and Police Pensions as
prescribed by state statutes. Current employees under these two pensions become eligible for those benefits
if they reach normal retirement age while working for the City The cost of retiree health care insurance and
life insurance benefits is recognized as an expenditure as claims are paid. Both plans are being funded 100%
by the City on a pay as you go basis. For 2009, the costs totaled $724,291 for the Firemen's Pension which has
a total of 69 participants currently eligible to receive benefits and $725,262 for the Police Pension which has a
total of 63 participants currently eligible to receive benefits.
In 2008 the City engaged Milliman USA Consultants and Actuaries to perform an actuarial valuation of
other postemployment benefits (OPEB) obligations for LEOFF I Fire / Police and Non -LEOFF I employees, in
accordance with GASB 45
LEOFF 1 EMPLOYEES
Under RCW law, retiree medical, hospital, and nursing care, as long as a disability exists, are covered for
any active firefighter hired prior to March 1, 1970 For any retired officer hired prior to March 1, 1970,
retiree medical, hospital, and nursing care are covered at the discretion of the Retirement Board. Members
retired prior to 1961 for reasons other than duty disability are not eligible for retiree medical benefits during
retirement. Under LEOFF Law, the necessary hospital, retiree medical, and nursing care expenses not payable
by Workers' Compensation, Social Security, etc. are covered for any active or retired LEOFF 1 member.
Effective January 1, 2007, the City began reimbursing dental costs up to an annual maximum of $500 for
LEOFF I Fire / Police employees.
ELIGIBILITY
Employees are eligible to receive lifetime retiree medical benefits upon service retirement after age 50 with at
least five years of service. If they are not eligible to retire when leaving LEOFF, but have 20 years of service
credit, they are eligible for retiree medical benefits when pension benefits commence. Employees also receive
lifetime benefits upon disability
RETIREE PREMIUMS
Funding Policy — Funding for LEOFF retiree healthcare costs is provided entirely by the City as required by
RCW The City's funding policy is based upon pay as you go financing requirements.
Annual OPEB Cost and Net OPEB Obligation — The City's annual other postemployment benefit (OPEB)
cost is calculated based upon the annual required contribution (ARC), an amount actuarially determined in
accordance with the parameters of GASB Statement 45 The ARC represents a level of funding that if paid
on an ongoing basis is projected to cover the normal cost each year and amortize any unfunded actuarial
liabilities over a period of thirty years as of January 1, 2009 The following table shows the components of the
City's annual OPEB cost for the year, the amount actually contributed to the plan, and changes in the City's
net OPEB. The net OPEB obligation of $2,445,866 is included as a noncurrent liability on the Statement of Net
Assets.
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NET OPEB OBLIGATION
0 LEOFF LEOFF
FIRE POLICE
12/31/09 12/31/09
Annual Required Contribution (ARC)
Annual Normal Cost (BOY) $42,839 $45,860
Amortization of UALL (BOY) 1,276,274 1,208,621
Interest 46,169 43,907
ARC at End of Year (EOY) 1,365,282 1,298,388
Interest on Net OPEB Obligation 23,738 20,199
Adjustment to ARC (36,333) (30,917)
Annual OPEB Cost 1,352,687 1,287,670
Employer Contributions (724,291) (725,561)
Change in Net OPEB Obligation 628,396 562,109
Net OPEB Obligation at BOY 678,235 577,126
Net OPEB Obligation $1,306,631 $1,139,235
Funded Status and Funding Progress — As of January 1, 2008, the most recent actuarial valuation date, the plan
was 0% funded. The accrued liability for benefits was $47,302,000 and the actuarial value of the assets was $0
resulting in a UAAL of $47,302,000:
SCHEDULE OF FUNDING PROGRESS
(Amount Expressed in Thousands)
S ACTUARIAL UNFUNDED
VALUATION ACCRUED ACT ACCRUED
DATE LIABILITY LIAB. (UAAL)
Police 1/1/08 $23,007 $23,007
Fire 1/1/08 $24,295 $24,295
The City's annual OPEB cost, the percentage of OPEB cost contributed to the plan, and the net OPEB
obligation for 2009 were as follows:
OPEB CONTRIBUTIONS — GASB 45
ANNUAL % OF NET
VALUATION OPEB OPEB COST OPEB
DATE COST CONTRIBUTED OBLIGATION
Police 12/31/08 $1,298,338 55.55% $577,126
12/31/09 1,298,388 55.88% 1,139,235
Fire 12/31/08 1,352,687 50.32% 678,235
12/31/09 1,352,687 53.05% 1,306,631
NON -LEOFF 1 EMPLOYEES
The City of Yakima provides to its retirees employer - provided subsidies associated with postemployment
medical benefits. Retirees eligible to receive pension benefit payments along with their qualifying dependents
are eligible to remain on the medical insurance plan up to Medicare eligible age 65, by self - paying the entire
composite premium rates which blend both active and inactive (i.e. retired) member claims history
O EuGisiury
City members are eligible for retiree medical benefits after becoming eligible for retirement pension benefits
(either reduced or full pension benefits) Spouses of retired members of Plan 1 of LEOFF are also eligible for
benefits. Also, dependent children of retirees under the age of 25 are eligible for benefits.
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Only people under age 65 are eligible for benefits.
Former members who are entitled to a deferred vested pension benefit are eligible to receive medical benefits `
after pension benefit commencement. Spouses under age 65 of covered members are eligible for medical
benefits after the members' benefits terminate due to death or obtaining age 65
MEDICAL BENEFITS
Upon retirement, members are permitted to receive medical benefits. Retirees pay $495 16 per month for
pre -65 Medical coverage for 2009 If a retiree chooses to cover his spouse and / or eligible family an amount
of $433.80 per month for pre -65 Medical coverage will be paid in 2009
FUNDING POLICY
The funding policy is based upon the pay as you go financing requirements.
ANNUAL OPEB COST AND NET OPEB OBLIGATION
The City's annual other postemployment benefit (OPEB) cost is calculated based upon the annual required
contribution (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement
45 The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover the normal
cost each year and amortize any unfunded actuarial liabilities over a period of thirty years as of January 1,
2009 The following table shows the components of the City's annual OPEB cost for the year, the amount
actually contributed to the plan, and changes in the City's net OPEB.
ANNUAL OPEB COST AND NET OPEB OBLIGATION
Ill /09
Annual Required Contribution (ARC) ill
Annual Normal Cost (BOY) $473,260
Amortization of UALL (BOY) 367,909
Interest 29,441
ARC at End of Year (EOY) 870,610
Determination of Net OPEB Obligation
Annual Required Contribution (ARC) 870,610
Interest on Prior Year Net OPEB Obligation 18,406
Adjustment to ARC (28,172)
Annual OPEB Cost 860,844
Employer Contributions (371,940)
Change in net OPEB 488,904
Net OPEB Obligation at BOY 525,878
Net OPEB Obligation — End of Year $1,014,782
The City's annual OPEB cost, the percentage of OPEB cost contributed to the plan, and the net OPEB
obligation for 2009 were as follows:
EMPLOYER CONTRIBUTIONS — NON -LEOFF
FISCAL ANNUAL % OF NET
YEAR OPEB OPEB COST OPEB
ENDED COST CONTRIBUTED OBLIGATION
12/31/08 $870,610 39.6% $525,878
12/31/09 870,610 42.72% 1,014,782
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ACTUARIAL METHODS AND ASSUMPTIONS
eb Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood
y the employer and the plan members) and include the types of benefits provided at the time of each valuation.
The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short -
term volatility in actuarial accrued liabilities, consistent with the long -term perspective of the calculations.
In the January 1, 2008 actuarial valuation, the Entry Age Normal actuarial cost method was used. The
actuarial assumptions used included a 3.5% discount rate, which is based upon the long -term investment
yield on the investments that are expected to be used to finance the payment of benefits. Medical trend
assumptions range from 9.5% for 2009 dropping gradually to 5% in 2017 and beyond.
The UAAL is being amortized on a closed basis at the assumed discount rate. The remaining amortization
period at January 1, 2008 was 30 years.
FUNDED STATUS AND FUNDING PROGRESS
As of January 1, 2008, the most recent actuarial valuation date, the plan was 0% funded. The accrued liability
for benefits was $7.0 million, and the actuarial value of assets was $0, resulting in a UAAL of $7.0 million.
SCHEDULE OF FUNDING PROGRESS
FISCAL ACTUARIAL ACTUARIAL UNFUNDED UALL AS A %
YEAR VALUE OF ACCRUED ACT. ACCRUED FUNDED COVERED OF COVERED
ENDED ASSETS LIABILITY LIAB. (UAAL) RATIO PAYROLL PAYROLL
12/31/08 $0 $7,003,432 $7,003,432 0% N/A N/A
• Actuarial valuations involve estimates of the value of reported amounts and assumptions about the
probability of occurrence of events far into the future. Examples include assumptions about future
employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of
the plan and the annual required contributions of the employer are subject to continual revision as actual
results are compared with past expectations and new estimates are made about the future.
NOTE 12 - OTHER DISCLOSURES
CHANGE IN ACCOUNTING ENTITY
In 2009, 2 new special revenue funds were created in the City to account for new activities:
> The Police Grants Fund was created in 2009 to account for supplemental police grant - funded
programs, including the COPS Hiring Recovery Program. Additionally, the City /County Narcotics
Unit (CCNU) was dissolved in the fall of 2009, therefore, the City's portion of drug related seized and
forfeited assets will be managed through this fund.
➢ The Recovery Grants Program Fund is being used to account for American Recovery and
Reinvestment Act (ARRA) grants that include projects in various operating divisions.
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REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF EMPLOYER CONTRIBUTIONS
III
December 31, 2009
POLICE PENSION
MEDICAL
ACTUAL BENEFIT ANNUAL
FISCAL EMPLOYER PAYMENTS NET REQUIRED PERCENTAGE
YEAR CONTRIBUTIONS & ADMIN EMPLOYER CONTRIBUTION OF ARC
ENDING TAXES EXPENSES CONTRIBUTION (ARC) CONTRIBUTED
12/31/00 $1,147,560 $513,778 $633,782 $671,522 94.4%
12/31/01 933,831 442,878 490,953 671,522 73 1%
12/31/02 991,009 478,769 512,240 671,522 76.3%
12/31/03 1,133,242 561,692 571,550 657,086 87.0%
12/31/04 1,287,904 702,241 585,663 657,086 89 1%
12/31/05 1,204,159 644,225 559,934 657,086 85.2%
12/31/06 1,235,437 701,306 534,131 657,086 81.3%
12/31/07 1,384,894 765,907 618,987 657,086 94.2%
12/31/08 1,279,173 723,381 555,792 546,180 101.8%
12/31/09 1,316,310 742,965 573,345 546,180 105.0%
FIRE PENSION
ACTUAL MEDICAL
•
EMPLOYER BENEFIT ANNUAL
FISCAL CONT'S TAXES PAYMENTS NET REQUIRED PERCENTAGE
YEAR & FIRE INS & ADMIN EMPLOYER CONTRIBUTION OF ARC
ENDING PREMIUMS EXPENSES CONTRIBUTION (ARC) CONTRIBUTED
12/31/00 $1,256,578 $445,493 $811,085 $840,067 96.5%
12/31/01 1,332,816 481,554 851,262 836,095 101.8%
12/31/02 1,325,372 530,732 794,640 836,095 95.0%
12/31/03 1,406,347 639,871 766,476 633,545 121.0%
12/31/04 1,425,048 769,426 655,622 633,545 103.5%
12/31/05 1,460,423 706,947 753,476 633,545 118.9%
12/31/06 1,558,187 815,278 742,909 633,545 117.3%
12/31/07 1,603,774 814,394 789,380 633,545 124.6%
12/31/08 1,627,553 732,318 885,235 563,583 158.8%
12/31/09 1,487,075 796,765 690,310 563,583 122.5%
POLICE OPEB
ACTUAL ANNUAL PERCENTAGE
FISCAL EMPLOYER MEDICAL NET REQUIRED OF ARC
YEAR CONTRIBUTIONS BENEFIT EMPLOYER CONTRIBUTION CONTRIBUTED
ENDING TAXES PAYMENTS CONTRIBUTION (ARC)
12/31/08 $721,262 $721,262 $721,262 $1,298,388 55.5%
12/31/09 725,561 725,262 725,561 1,298,388 55.9%
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FIRE OPEB
• ACTUAL ANNUAL
FISCAL EMPLOYER MEDICAL NET REQUIRED PERCENTAGE
YEAR CONTRIBUTIONS BENEFIT EMPLOYER CONTRIBUTION OF ARC
ENDING TAXES PAYMENTS CONTRIBUTION (ARC) CONTRIBUTED
12/31/08 $687,047 $687,047 $687,047 $1,365,282 55.3%
12/31/09 724,291 724,291 724,291 1,365,282 53 1%
NON -LEOFF OPEB
ACTUAL ANNUAL
FISCAL EMPLOYER MEDICAL NET REQUIRED PERCENTAGE
YEAR CONTRIBUTIONS BENEFIT EMPLOYER CONTRIBUTION OF ARC
ENDING TAXES PAYMENTS CONTRIBUTION (ARC) CONTRIBUTED
12/31/08 $344,732 $344,732 $344,732 $870,610 39.6%
12/31/09 371,940 371,940 371,940 870,610 42.7%
•
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REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF FUNDING PROGRESS
OTHER POST EMPLOYMENT BENEFITS (OPEB)
(Dollar Amounts in Thousands)
December 31, 2009
FISCAL ACTUARIAL UNFUNDED
YEAR ACCRUED ACT ACCRUED COVERED
ENDED LIABILITY LIAB. (UAAL) PAYROLL
LEOFF 1
Police 12/31/08 $23,007 $23,007 16
Fire 12/31/08 24,295 24,295 .29
NON -LEOFF 12/31/08 7,003 7,003 N/A
•
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CITY OF / G/
0 SCHEDULE #16
EXPENDITURES OF FEDERAL AWARDS
For the Year Ended December 31, 2009 Page 1 of 2
FROM PASS- FROM
GRANTOR /PASS- THROUGH GRANTOR CFDA THROUGH DIRECT
PROGRAM TITLE No. OTHER 1.D. NUMBER AWARDS AWARDS NOTE
U S. Department of Housing & Urban Development
Community Dev Block Grant / Entitlement Grants 14.218 B 09 -MC -53 -0008 $84,604
Community Dev Block Grant / Entitlement Grants 14.218 B 08 -MC -53 -0008 1,209,339
Community Dev Block Grant / Entitlement Grants 14.218 CDBG Program Income 73,308 3
Sub -Total $1,367,251
Home Investment Partnerships Program 14.239 M09 -MC53 -0203 160,081
Home Investment Partnerships Program 14.239 M08 -MC53 -0203 657,439
Home Investment Partnerships Program 14.239 Home Program Income 203,930 3
Sub -Total 1,021,450
Community Dev Block Grant / Economic Dev Initiative 14.246 B- 04 -SP -WA -0866 82,863
Total Department of Housing and Urban Development $2,471,564
fa U S. Department of Justice
Edward Byrne Memorial State and Local 16.580 2008 -DD -BX -0482 $143,367
State Criminal Alien Assistant Program 16.606 2009 -AP -BX -0439 25,925
Public Safety Partnership & Community Policing Grants 16.710 2008- CKWX0543 182,172
Edward Byrne Memorial Justice Assistance Grant 16.738 2007 -DJ -BX -1217 65,020
ARRA Edward Byrne Memorial Justice Assistance Grant 16.804 ARRA 2009 -SB -B9 -1257 80,525 7
Total U.S. Department of Justice $497,009
U S. Department of Transportation
Federal Transit Administration - Formula Grant 20.507 WA- 90X452 -00 $1,762,894
ARRA Federal Transit Administration 20.507 WA -96- X016 -00 150,005 7
Sub -Total 1,912,899
Passed - through Washington State Dept of Transportation
Highway Plan & Const - Railroad Grade Separation 20.205 STPX-000S (062) $1,362,687 2
Highway Plan & Const - Trolley Restoration 20.205 STPE- 1485(019) 4,308 2
Highway Plan & Const - Wm Douglas Trail / 6th Ave 20.205 STPE- 1485(020) 21,953 2
Highway Plan & Const - Wm Douglas Trail / Bridge 20.205 STPE- 1485(020) 235,180 2
Highway Plan & Const - Coolidge Rd. Widening 20.205 CM- 4560(001) 22,397 2
Highway Plan & Const - Nob Hill Blvd. Overpass Repairs 20.205 BHM4566(008) 1,108,850 2
ARRA Highway Plan & Const - Nob Hill Improvements 20.205 ARRA- 4566(009) 515,410 2,7
Sub -Total 3,270,785
Total U.S. Department of Transportation $3,270,785 $1,912,899
U S. Department of Energy
ARRA Energy Efficiency and Conservation Block Grant 81.128 ARRA- DE- SC0003043 $7,563 7
W
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CITY OF /u/t2
SCHEDULE #16
0
EXPENDITURES OF FEDERAL AWARDS
For the Year Ended December 31, 2009 Page 2 of 2
FROM PASS- FROM
GRANTOR / PASS-THROUGH GRANTOR CFDA THROUGH DIRECT
PROGRAM TITLE No. OTHER I.D. NUMBER AWARDS AWARDS NOTE
U S. Department of Health and Human Services (DSHS)
Passed - through Yakima County
Special Programs for the Aging / Disease Prevention 93.043 0969 -54703 $876
Special Programs for the Aging / Disease Prevention 93.043 0969 -54703 33,161
Sub -Total CFDA 93.043 34,037
Special Prog for the Aging / Grants for Supportive Svcs 93.044 0969 -54703 12,246
Sub -Total Passed - through Yakima County $46,283
Passed - through DSHS Division of Child Support (DCS)
Healthy Marriage Promotion & Responsible Fatherhood 93.086 0664 -94430 332,946
Total U.S. Department Health Passed - through $379,229
Corporation for National and Community Service
Passed - through WA State Employment Security
AmeriCorps Recovery 94.006 K987 $69,793
II/
Homeland Security
Staffing forAdequate Fire & Emergency Response (SAFER) 97.083 EMW- 2005 -FF -00188 $69,000
$3,719,807 $4,958,035
Total Federal Assistance Direct & Pass - Through Awards $8,677,842
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CFIY OF / t."llIZQi
41) SCHEDULE #16
NOTES TO THE SCHEDULE OF EXPENDITURES
For the Year Ended December 31, 2009 Page 1 of 1
NOTE 1 — BASIS OF ACCOUNTING
The Schedule of Expenditures of Federal Award is prepared on the same basis of accounting as the City of Yakima
financial statements. The City of Yakima uses modified accrual system for all governmental funds, full accrual system
for proprietary, nonexpendable and pension trust funds.
NOTE 2 — PROGRAM COSTS
The amounts shown as current year expenditures represent only the federal portion of the program costs. Actual
program costs, including the City of Yakima's portion, may be more than shown.
NOTE 3 — PROGRAM INCOME
The City of Yakima has a loan program for low income housing. Under this federal grant, repayments to the City
of Yakima are considered program revenues (income) and loans of such funds to eligible recipients are considered
expenditures.
0 NOTE 4 — FEDERAL LOANS
In 2003, the City of Yakima was authorized to administer a Section 108 Loan program. There were no new loans in 2009
Since the City is only contingently liable, this amount is not included in the Schedule of Long -Term Debt. See Note 8 —
Contingencies in the Basic Financial Statements section for details of the entire program.
NOTE 5 — NONCASH AWARDS
Not Applicable.
NOTE 6 — AMOUNT PAID TO SUBRECIPIENTS
The City of Yakima paid the following amounts to subrecipients:
CDBG- 14.218 — $250,000
ARRA- 16.804 — $80,525
NOTE 7 — AMERICAN RECOVERY AND REINVESTMENT ACT (ARRA) OF 2009
Expenditures for this program were funded by ARRA.
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1 / `N
ABOUT THE STATE AUDITORS OFFICE
The State Auditor's Office is established in the state's Constitution and is part of the executive
branch of state government. The State Auditor is elected by the citizens of Washington and serves
four -year terms.
Our mission is to work in cooperation with our audit clients and citizens as an advocate for
government accountability As an elected agency, the State Auditor's Office has the independence
necessary to objectively perform audits and investigations. Our audits are designed to comply with
professional standards as well as to satisfy the requirements of federal, state, and local laws.
The State Auditor's Office employees are located around the state to deliver our services effectively
and efficiently
Our audits look at financial information and compliance with state, federal and local laws on the part
of all local governments, including schools, and all state agencies, including institutions of higher
education In addition, we conduct performance audits of state agencies and local governments and
fraud, whistleblower and citizen hotline investigations.
ID
The results of our work are widely distributed through a variety of reports, which are available on
our Web site and through our free, electronic subscription service We continue to refine our
reporting efforts to ensure the results of our audits are useful and understandable.
We take our role as partners in accountability seriously We provide training and technical
assistance to governments and have an extensive quality assurance program
State Auditor Brian Sonntag, CGFM
Chief of Staff Ted Rutt
Deputy Chief of Staff Doug Cochran
Chief Policy Advisor Jerry Pugnetti
Director of Audit Chuck Pfeil, CPA
Director of Special Investigations Jim Brittain, CPA
Director for Legal Affairs Jan Jutte, CPA, CGFM
Director of Quality Assurance Ivan Dansereau
Local Government Liaison Mike Murphy
Communications Director Mindy Chambers
Public Records Officer Mary Leider
Main number (360) 902 -0370
Toll -free Citizen Hotline (866) 902 -3900
Website www.sao.wa.uov
Subscription Service https: / /www.sao.wa.gov /EN /News /Subscriptions/ •
(SAO FACTS.DOC Rev. 06/09)