HomeMy WebLinkAboutWA State 2024 Financial Federal Audit Report
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Financial Statements and Federal Single
Audit Report
City of Pasco
For the period January 1, 2024 through December 31, 2024
Published September 25, 2025
Report No. 1038165
Insurance Building, P.O. Box 40021 Olympia, Washington 98504-0021 (564) 999-0950 Pat.McCarthy@sao.wa.gov
Office of the Washington State Auditor
Pat McCarthy
September 25, 2025
Mayor and City Council
City of Pasco
Pasco, Washington
Report on Financial Statements and Federal Single Audit
Please find attached our report on the City of Pasco’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 activities and
condition.
Sincerely,
Pat McCarthy, State Auditor
Olympia, WA
Americans with Disabilities
In accordance with the Americans with Disabilities Act, we will make this document available in
alternative formats. For more information, please contact our Office at (564) 999-0950, TDD
Relay at (800) 833-6388, or email our webmaster at webmaster@sao.wa.gov.
Office of the Washington State Auditor sao.wa.gov
TABLE OF CONTENTS
Schedule of Findings and Questioned Costs ................................................................................... 4
Schedule of Audit Findings and Responses .................................................................................... 6
Summary Schedule of Prior Audit Findings .................................................................................. 13
Independent Auditor's Report on Internal Control Over Financial Reporting and on Compliance
and Other Matters Based on an Audit of Financial Statements Performed in Accordance with
Government Auditing Standards ................................................................................................... 15
Independent Auditor's Report on Compliance for Each Major Federal Program and Report on
Internal Control Over Compliance in Accordance With the Uniform Guidance ......................... 18
Independent Auditor's Report on the Financial Statements .......................................................... 21
Financial Section ........................................................................................................................... 25
Corrective Action Plan for Findings Reported Under Uniform Guidance ..................................135
About the State Auditor's Office ..................................................................................................137
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S CHEDULE OF FINDINGS AND QUESTIONED COSTS
City of Pasco
January 1, 2024 through December 31, 2024
SECTION I – SUMMARY OF AUDITOR’S RESULTS
The results of our audit of the City of Pasco are summarized below in accordance with Title 2 U.S.
Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost
Principles, and Audit Requirements for Federal Awards (Uniform Guidance).
Financial Statements
We issued an unmodified opinion on the fair presentation of the basic financial statements of the
governmental activities, the business-type activities, each major fund, the aggregate discretely
presented component units and the aggregate remaining fund information in accordance with
accounting principles generally accepted in the United States of America (GAAP).
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 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 major federal programs that we consider to be significant deficiencies.
• Material Weaknesses: We identified no deficiencies that we consider to be material
weaknesses.
We issued an unmodified opinion on the City’s compliance with requirements applicable to each
of its major federal programs.
We reported no findings that are required to be disclosed in accordance with 2 CFR 200.516(a).
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Identification of Major Federal Programs
The following programs were selected as major programs in our audit of compliance in accordance
with the Uniform Guidance.
The dollar threshold used to distinguish between Type A and Type B programs, as prescribed by
the Uniform Guidance, was $1,222,522.
The City did not qualify as a low-risk auditee under the Uniform Guidance.
SECTION II – FINANCIAL STATEMENT FINDINGS
See Findings 2024-001 and 2024-002.
SECTION III – FEDERAL AWARD FINDINGS AND QUESTIONED
COSTS
None reported.
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SCHEDULE OF AUDIT FINDINGS AND RESPONSES
City of Pasco
January 1, 2024 through December 31, 2024
2024-001 The City did not have adequate internal controls to ensure accurate
reporting of its financial statements.
Background
State and federal agencies, the City Council, the City Manager and the public rely
on the information included in the financial statements and reports to make
decisions. Management is responsible for designing and following internal controls
that provide reasonable assurance its financial reporting is reliable, and the financial
statements are accurate. The City prepares its financial statements in accordance
with generally accepted accounting principles (GAAP).
Our audit found deficiencies in internal controls over accounting and financial
reporting that affected the City’s ability to produce reliable financial statements.
Governmental Accounting Standards requires the State Auditor’s Office to
communicate material weaknesses in internal controls as a finding
Description of Condition
We identified deficiencies in internal controls over the City’s process for preparing
its financial statements that, when taken together, represent a material weakness.
Specifically, we found the City:
• Did not dedicate necessary resources to ensure fiduciary fund statements
were accurate
• Did not have an adequate process to identify all federal expenditures and
ensure accurate reporting on the Schedule of Expenditures of Federal
Awards (SEFA)
• Had a review process that was insufficient for ensuring financial statements
were accurate and complete
Additionally, although the City had procedures for reporting capital assets and
calculating related accumulated depreciation, its internal controls were not
adequate to ensure it accurately reported capital assets on its financial statements.
When it brings a capital asset into service, the City is responsible for assigning an
expected useful life that estimates the length of time it expects to use the asset. Over
time, the City should adjust useful lives for when it expects to replace capital assets
or extend the useful lives for various reasons including funding availability, asset
condition or public need. Our audit found the City did not have an effective process
to monitor and periodically reassess the useful life of its assets.
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Cause of Condition
The City has a component unit, Pasco Public Facilities District, which issued a bond
in the audit period. The City acts as the fiscal agent for the District. City staff did
not know how to report the bond on its fiduciary fund statements, which led to
incorrect reporting.
The City experienced significant turnover in the finance department. The City did
not have sufficient resources to ensure the financial statements were accurate and
complete. Also, the City misinterpreted the reporting requirement to report federal
loan expenditures on the SEFA when the City submits the reimbursement request
to the grantor. Lastly, although the City has a process in place to reassess the useful
life of capital assets, the process did not include reviewing the infrastructure assets
to ensure reported capital asset balances were accurate.
Effect of Condition
The City’s financial statements included errors that management did not identify
before submitting them for audit. Specifically, we noted the City:
• Included $50,544,431 of bond liabilities and premiums in the accounts
payable balance in the fiduciary fund statements, which is a liability of the
Pasco Public Facilities District and caused an overstatement of $50,544,431
• Did not include the unspent bond proceeds in the net investment in capital
asset calculation for the water/sewer fund, which resulted in an
understatement of $20,248,702 for the net investment in capital asset
balance
• Did not include $8,383,220 of federal expenditures on its SEFA related to
the Clean Water and State Revolving Federal Loan Program
• Included $117 million of fully depreciated but still in use assets and
accumulated depreciation of the same amount on its financial statements
We also identified several less significant errors in the City’s financial statements,
notes and schedules it provided for audit. Furthermore, we identified less significant
understatements and overstatements and misclassifications of assets, liabilities,
revenues and expenditures.
The City subsequently corrected the information in the first three bullets listed
above.
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Recommendation
We recommend the City dedicate sufficient resources to preparing accurate
financial statements, notes and schedules. In particular, the City should establish a
robust review process to ensure the information reported is accurate and complete.
Further, the City should dedicate resources to reevaluate the useful life of capital
assets to ensure it reports capital assets accurately.
City ’s Response
The City of Pasco appreciates the work of the State Auditor’s Office (SAO) and the
opportunity to respond. The insights provided are valuable in helping us strengthen
financial reporting and internal controls.
We acknowledge the issues noted in the audit and are committed to taking
corrective action to prevent them from recurring. Staffing changes and vacancies
in the Finance Department during the financial preparation period contributed to
reporting challenges. To address this, the City will establish a core team of
experienced ACFR preparers for the 2025 report to ensure timely and accurate
completion. The department will also adjust priorities to ensure financial reporting
duties receive the necessary focus, consistent with the SAO’s findings related to the
2024 ACFR misstatement review.
The City also recognizes the need for improvements in the tracking and reporting
of capital assets, particularly infrastructure. While existing processes for buildings,
structures, machinery, and equipment have proven effective, roadway upgrades
and replacements present greater complexity. Going forward, the City will explore
and implement standardized measurement methodologies to improve consistency
in evaluating and documenting roadway modifications.
The City remains fully committed to continuous improvement and appreciates the
audit team’s feedback as an important resource in ensuring accurate, transparent,
and reliable financial reporting.
Auditor’s Remarks
We appreciate the City’s commitment to resolve this finding and thank the City for
its cooperation and assistance during the audit. We will review the corrective action
taken during our next regular audit.
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Applicable Laws and Regulations
Government Auditing Standards, July 2018 Revision, paragraphs 6.40 and 6.41
establish reporting requirements related to significant deficiencies or material
weaknesses in internal control, instances of fraud, and noncompliance with
provisions of laws, regulations, contracts, or grant agreements.
The American Institute of Certified Public Accountants defines significant
deficiencies and material weaknesses in its Codification of Statements on Auditing
Standards, section 265, Communicating Internal Control Related Matters Identified
in an Audit, paragraph 7.
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SCHEDULE OF AUDIT FINDINGS AND RESPONSES
City of Pasco
January 1, 2024 through December 31, 2024
2024-002 The Pasco Public Facilities District’s internal controls were
inadequate to ensure financial statements were accurate and
complete.
Background
The Pasco City Council appoints a five-member Board of Directors to govern the
Pasco Public Facilities District. The Pasco Public Facilities District does not have
any official government employees instead, the Board entered into an agreement
with the City to oversee daily operations.
It is the Pasco Public Facilities District’s responsibility to design, implement, and
maintain internal controls to ensure their financial statements are fairly presented
and provide reasonable assurance regarding the reliability of those statements.
District management, state and federal agencies, and the public rely on the
information included in the financial statements and reports to make decisions.
Management is responsible for designing and following internal controls that
provide reasonable assurance its financial reporting is reliable and the financial
statements and notes to financial statements are accurate. The District prepares its
financial statements in accordance with generally accepted accounting principles.
Our audit identified deficiencies in internal controls over accounting and financial
reporting that affected the District’s ability to produce reliable financial statements.
Government Auditing Standards requires the State Auditor’s Office to
communicate material weaknesses as a finding.
Description of Condition
This is the first financial statement audit for the District. Additionally, the District
issued revenue bonds in 2024 for the first time, which required it to account for and
report the new debt issuance activity in the financial statements.
We found the District’s review process was insufficient to ensure the financial
statements submitted for audit were accurate and complete. Specifically, the
District’s review process failed to detect that it had submitted an incorrect version
of the financial statements as part of its annual report submission.
We found this deficiency in internal controls to be a material weakness.
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Cause of Condition
Although the District had a process over financial statement preparation and
review, the District did not dedicate sufficient resources to ensure it submitted the
final version of the prepared financial statement report for audit.
Effect of Condition
The District’s financial statements contained errors management did not detect.
During our audit of the financial statements, we noted the following errors:
• The District did not include bonds issued and the bond premium on the
Statement of Revenues, Expenditures and Changes in Fund Balance. This
caused an understatement of $50.5 million of Other Financing Sources
(Revenues) and the Ending Fund Balance.
• Cash and cash equivalents was overstated by $288,120.
The District subsequently corrected these errors.
In addition, we identified other smaller, immaterial, errors throughout the financial
statements, notes to the financial statements and supporting schedules.
Recommendation
We recommend the District dedicate sufficient time and resources to reviewing
financial statements and ensure the final financial statements submitted for audit
are accurate and complete.
District ’s Response
The Pasco Public Facility District appreciates the work of the State Auditor’s
Office (SAO) and the opportunity to respond. This valuable insight supports our
ongoing efforts to strengthen financial reporting and internal controls. We have
outlined the circumstances contributing to each issue and the corrective measures
being implemented.
Bond Exclusion
The preparation of the Financial Statements presented unique challenges due to
increased complexity compared to prior years. All statements, notes, and schedules
were developed from the ground up without the benefit of specialized financial
reporting software, requiring manual preparation—a time-intensive process,
particularly during first-time implementation.
It is important to note that the bond issuance and related premiums were not
entirely omitted from the Financial Statements. They were included in other
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sections but were inadvertently excluded from the Statement of Revenues,
Expenditures, and Changes in Fund Balance. This occurred as the result of a copy-
and-paste error during the transfer of data between software platforms. While the
statement was originally prepared accurately, the updated version was not
properly carried over to the final financial packet.
Cash Overstatement
The overstatement resulted from the implementation of a new accounting software
module, which created duplicate entries on the back end when beginning balances
were brought in. The software provider is currently assisting with a system update
and testing to resolve this issue.
To ensure accuracy going forward, the City has adopted and will continue to use a
parallel manual bank reconciliation process. This process was in place during
FY25 and successfully identified the $288,153 variance as a reconciling item under
review by both staff and the software company. The continued use of this control
will provide assurance that the system correction is producing accurate reporting
for FY25 and beyond.
Auditor’s Remarks
We appreciate the District’s commitment to resolve this finding and thank the
District for its cooperation and assistance during the audit. We will review the
corrective action taken during our next regular audit.
Applicable Laws and Regulations
Government Auditing Standards, July 2018 Revision, paragraphs 6.40 and 6.41
establish reporting requirements related to significant deficiencies or material
weaknesses in internal control, instances of fraud, and noncompliance with
provisions of laws, regulations, contracts, or grant agreements.
The American Institute of Certified Public Accountants defines significant
deficiencies and material weaknesses in its Codification of Statements on Auditing
Standards, section 265, Communicating Internal Control Related Matters Identified
in an Audit, paragraph 7.
RCW 43.09.200 Local government accounting – Uniform system of accounting,
requires the State Auditor to prescribe the system of accounting and reporting for
all local governments.
The Budgeting, Accounting and Reporting System (BARS) Manual, 3.1.3, Internal
Control, requires each local government to establish and maintain an effective
system of internal controls that provides reasonable assurance that the government
will achieve its objectives.
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SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
City of Pasco
January 1, 2024 through December 31, 2024
This schedule presents the status of findings reported in prior audit periods.
Audit Period:
January 1, 2023 through December 31, 2023
Report Ref. No.:
60865
Finding Ref. No.:
2023-001
Finding Caption:
The City did not have adequate internal controls to ensure accurate reporting of its financial
statements.
Background:
When preparing the government-
information in the governmental fund financial statements. This conversion is necessary as the
information in the governmental fund financial statements is presented using the modified
accrual basis of accounting while the government- wide statements are on the full accrual basis.
The governmental fund financial statements report available financial resources and show the
performance in the short term while the government-wid
finances of the government in the long term and its entirety.
Our audit identified internal control deficiencies that, when taken together, represent a material
weakness. We found the City does not have an effective review process to ensure their financial
statements are accurate. Specifically, there were errors in t
financial statements to the government-wide financial statements that were not detected in
preparation for review.
Status of Corrective Action: (check one)
☐ Fully
Corrected
☒ Partially
Corrected ☐ Not Corrected ☐ Finding is considered no
longer valid
Corrective Action Taken:
When completing the FY 2023 ACFR, the City encountered significant complications related
the upgrade of statement builder software. To prepare for completion of 2024 report, the
software. Staff available and assigned to the completion and review of ACFR for FY 2023 was
insufficient for the task. In preparation for 2024 ACFR work, typically accounting duties were
adjusted and an ACFR team of accountants assembled. This segregation allowed one team to
address other finance efforts, while the ACFR team focused on year end closing and ACFR
completion.
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Audit Period:
January 1, 2023 through
December 31, 2023
Report
Reference No.:
60865
Finding Ref. No.:
2023-002
ALN(s):
21.027
Agency:
COVID-19-
Fiscal Recovery Funds
U.S. Department of Treasury
Pass-Through Agency Name:
N/A
Finding Caption:
The City did not have adequate controls for ensuring compliance with federal suspension and
debarment requirements.
Background:
suspended or debarred from doing business with the federal government. Whenever the City
enters into contracts or purchases goods and services that it expects to equal or exceed $25,000,
suspended, debarred or otherwise excluded from participating in federal programs. The City
may verify this by obtaining a written certification from the contractor, adding a clause or
condition into the contract that states the contractor is not suspended or debarred or checking
Management at SAM.gov. The City must verify this before entering into the contract and must
maintain documentation demonstrating compliance with this federal requirement.
Our audit found the City did not have adequate controls in place to verify three contractors it
paid more than $25,000 in federal funds were not suspended or debarred from participating in
federal programs.
Status of Corrective Action: (check one)
☒ Fully
Corrected
☐ Partially
Corrected ☐ Not Corrected ☐ Finding is considered no
longer valid
Corrective Action Taken:
This error occurred in a department unfamiliar with Uniform Guidance due to inexperience
with Federal grants. To expose need, guidance related to spending on projects including any
portion of federal funding has been added to the City’s Purchasing Procedures and Policy,
Administrative Order 470. The most recent update occurred as of 12/31/2024. Included in the
AO is direction requiring “Suspension and debarment checks should be made on the EPLS site
(www.sam.gov) and documented or add in the clause in the procurement contract. To ensure
compliance document process by printing out the screen verifying suspension and debarment
check.
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INDEPENDENT AUDITOR’S REPORT
Report on Internal Control over Financial Reporting and on Compliance and Other
Matters Based on an Audit of Financial Statements Performed in Accordance with
Government Auditing Standards
City of Pasco
January 1, 2024 through December 31, 2024
Mayor and City Council
City of Pasco
Pasco, Washington
We have audited, 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, the financial statements of the
governmental activities, the business-type activities, each major fund, the aggregate discretely
presented component units and the aggregate remaining fund information of the City of Pasco, as
of and for the year ended December 31, 2024, and the related notes to the financial statements,
which collectively comprise the City’s basic financial statements, and have issued our report
thereon dated September 19, 2025.
REPORT ON INTERNAL CONTROL OVER FINANCIAL
REPORTING
In planning and performing our audit of the financial statements, we considered the City’s internal
control over financial reporting (internal control) as a basis for designing audit procedures that are
appropriate in the circumstances 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. Accordingly, we do not express an opinion on the effectiveness of the City’s
internal control.
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. A significant deficiency is a deficiency, or a combination of
deficiencies, in internal control that is less severe than a material weakness, yet important enough
to merit attention by those charged with governance.
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Our consideration of internal control was for the limited purpose described above and was not
designed to identify all deficiencies in internal control that might be material weaknesses or
significant deficiencies and therefore, material weaknesses or significant deficiencies may exist
that were not identified.
However, we identified certain deficiencies in internal control, as described in the accompanying
Schedule of Audit Findings and Responses as Findings 2024-001 and 2024-002, that we consider
to be material weaknesses.
REPORT ON COMPLIANCE AND OTHER MATTERS
As part of obtaining reasonable assurance about whether the City’s financial statements are free
from material misstatement, we performed tests of its compliance with certain provisions of laws,
regulations, contracts and grant agreements, noncompliance with which could have a direct and
material effect on the financial statements. 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.
RESPONSE TO FINDINGS
Government Auditing Standards requires the auditor to perform limited procedures on the City’s
and Pasco Public Facilities District’s responses to the findings identified in our audit and described
in the accompanying Schedule of Audit Findings and Responses. The enter conditional
textresponses were not subjected to the auditing procedures applied in the audits of the financial
statements and, accordingly, we express no opinion on the responses.
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PURPOSE OF THIS REPORT
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of the
City’s internal control or on compliance. This report is an integral part of an audit performed in
accordance with Government Auditing Standards in considering the City’s internal control and
compliance. Accordingly, this communication is not suitable for any other purpose. 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.
Pat McCarthy, State Auditor
Olympia, WA
September 19, 2025
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INDEPENDENT AUDITOR’S REPORT
Report on Compliance for Each Major Federal Program and Report on Internal
Control over Compliance in Accordance with the Uniform Guidance
City of Pasco
January 1, 2024 through December 31, 2024
Mayor and City Council
City of Pasco
Pasco, Washington
REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL
PROGRAM
Opinion on Each Major Federal Program
We have audited the compliance of the City of Pasco, with the types of compliance requirements
identified as subject to audit in the U.S. Office of Management and Budget (OMB) Compliance
Supplement that could have a direct and material effect on each of the City’s major federal
programs for the year ended December 31, 2024. The City’s major federal programs are identified
in the auditor’s results section of the accompanying Schedule of Findings and Questioned Costs.
In our opinion, the City complied, in all material respects, with the types of compliance
requirements referred to above that could have a direct and material effect on each of its major
federal programs for the year ended December 31, 2024.
Basis for Opinion on Each Major Federal Program
We conducted our audit of compliance in accordance with auditing standards generally accepted
in the United States of America (GAAS); the standards applicable to financial audits contained in
Government Auditing Standards issued by the Comptroller General of the United States; and the
audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative
Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance)
are further described in the Auditor’s Responsibilities for the Audit of Compliance section of our
report.
We are required to be independent of the City and to meet our other ethical responsibilities, in
accordance with the relevant ethical requirements relating to our audit. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on
compliance for each major federal program. Our audit does not provide a legal determination on
the City’s compliance with the compliance requirements referred to above.
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Responsibilities of Management for Compliance
Management is responsible for compliance with the requirements referred to above and for the
design, implementation, and maintenance of effective internal control over compliance with the
requirements of laws, statutes, regulations, rules and provisions of contracts or grant agreements
applicable to the City’s federal programs.
Auditor’s Responsibilities for the Audit of Compliance
Our objectives are to obtain reasonable assurance about whether material noncompliance with the
compliance requirements referred to above occurred, whether due to fraud or error, and express an
opinion on the City’s compliance based on our audit. Reasonable assurance is a high level of
assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in
accordance with GAAS, Government Auditing Standards and the Uniform Guidance will always
detect a material noncompliance when it exists. The risk of not detecting a material noncompliance
resulting from fraud is higher than for that resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of internal control.
Noncompliance with the compliance requirements referred to above is considered material, if there
is a substantial likelihood that, individually or in the aggregate, it would influence the judgement
made by a reasonable user of the report on compliance about the City’s compliance with the
requirements of each major federal program as a whole.
Performing an audit in accordance with GAAS, Government Auditing Standards and the Uniform
Guidance includes the following responsibilities:
• Exercise professional judgment and maintain professional skepticism throughout the audit;
• Identify and assess the risks of material noncompliance, whether due to fraud or error, and
design and perform audit procedures responsive to those risks. Such procedures include
examining, on a test basis, evidence regarding the City’s compliance with the compliance
requirements referred to above and performing such other procedures as we considered
necessary in the circumstances;
• Obtain an understanding of the City’s internal control over compliance relevant to the audit
in order to design audit procedures that are appropriate in the circumstances and to test and
report on internal control over compliance in accordance with the Uniform Guidance, but
not for the purpose of expressing an opinion on the effectiveness of the City’s internal
control over compliance. Accordingly, no such opinion is expressed; and
• We are required to communicate with those charged with governance regarding, among
other matters, the planned scope and timing of the audit and any significant deficiencies
and material weaknesses in internal control over compliance that we identified during the
audit.
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REPORT ON INTERNAL CONTROL OVER COMPLIANCE
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. A significant deficiency in internal control over compliance is a deficiency, or a
combination of deficiencies, in internal control over compliance with a type of compliance
requirement of a federal program that is less severe than a material weakness in internal control
over compliance, yet important enough to merit attention by those charged with governance.
Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal
control over compliance. Accordingly, no such opinion is expressed. Our consideration of internal
control over compliance was for the limited purpose described in the Auditor’s Responsibilities
for the Audit of Compliance section above and was not designed to identify all deficiencies in
internal control over compliance that might be material weaknesses or significant deficiencies in
internal control over compliance and therefore, material weaknesses or significant deficiencies
may exist that were not identified.
Given these limitations, during our audit we did not identify any deficiencies in internal control
over compliance that we consider to be material weaknesses, as defined above.
Purpose of this Report
The purpose of this report on internal control over compliance is solely to describe the scope of
our testing of internal control over compliance and the results of that testing based on the
requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other
purpose. 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.
Pat McCarthy, State Auditor
Olympia, WA
September 19, 2025
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INDEPENDENT AUDITOR’S REPORT
Report on the Audit of the F inancial Statements
City of Pasco
January 1, 2024 through December 31, 2024
Mayor and City Council
City of Pasco
Pasco, Washington
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS
Opinions
We have audited the accompanying financial statements of the governmental activities, the
business-type activities, each major fund, the aggregate discretely presented component units and
the aggregate remaining fund information of the City of Pasco, as of and for the year ended
December 31, 2024, and the related notes to the financial statements, which collectively comprise
the City’s basic financial statements as listed in the financial section of our report.
In our opinion, the accompanying financial statements referred to above present fairly, in all
material respects, the respective financial position of the governmental activities, the business-type
activities, each major fund, the aggregate discretely presented component units and the aggregate
remaining fund information of the City of Pasco, as of December 31, 2024, and the respective
changes in financial position and, where applicable, cash flows thereof, and the respective
budgetary comparison for the General, ARPA and Ambulance funds for the year then ended in
accordance with accounting principles generally accepted in the United States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United
States of America (GAAS) and the standards applicable to financial audits contained in
Government Auditing Standards, issued by the Comptroller General of the United States. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for
the Audit of the Financial Statements section of our report. We are required to be independent of
the City and to meet our other ethical responsibilities, in accordance with the relevant ethical
requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinions .
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Matters of Emphasis
As discussed in Note 1 to the financial statements, in 2024, the County adopted new accounting
guidance, Governmental Accounting Standards Board Statement No. 101, Compensated
Absences. Our opinion is not modified with respect to this matter.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements
in accordance with accounting principles generally accepted in the United States of America, and
for the design, implementation, and maintenance of internal control relevant to the preparation and
fair presentation of financial statements that are free from material misstatement, whether due to
fraud or error.
In preparing the financial statements, management is required to evaluate whether there are
conditions or events, considered in the aggregate, that raise substantial doubt about the City’s
ability to continue as a going concern for twelve months beyond the financial statement date,
including any currently known information that may raise substantial doubt shortly thereafter.
Auditor’s Responsibilit ies for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report
that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute
assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and
Government Auditing Standards will always detect a material misstatement when it exists. The
risk of not detecting a material misstatement resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or
the override of internal control. Misstatements are considered material if there is a substantial
likelihood that, individually or in the aggregate, they would influence the judgment made by a
reasonable user based on the financial statements.
Performing an audit in accordance with GAAS and Government Auditing Standards includes the
following responsibilities:
• Exercise professional judgment and maintain professional skepticism throughout the audit;
• Identify and assess the risks of material misstatement of the financial statements, whether
due to fraud or error, and design and perform audit procedures responsive to those risks.
Such procedures include examining, on a test basis, evidence regarding the amounts and
disclosures in the financial statements;
• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the City’s internal control. Accordingly, no such opinion
is expressed;
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• Evaluate the appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management, as well as evaluate the overall
presentation of the financial statements;
• Conclude whether, in our judgment, there are conditions or events, considered in the
aggregate, that raise substantial doubt about the City’s ability to continue as a going
concern for a reasonable period of time; and
• Communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit, significant audit findings, and certain internal
control-related matters that we identified during the audit.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
management’s discussion and analysis and required supplementary information listed in the
financial section of our report be presented to supplement the basic financial statements. Such
information is the responsibility of management and, although not a part of the basic financial
statements, is required by the Governmental Accounting Standards Board who considers it to be
an essential part of financial reporting for placing the basic financial statements in an appropriate
operational, economic or historical context. We have applied certain limited procedures to the
required supplementary information in accordance with auditing standards generally accepted in
the United States of America, which consisted of inquiries of management about the methods of
preparing the information and comparing the information for consistency with management’s
responses to our inquiries, the basic financial statements, and other knowledge we obtained during
our audit of the basic financial statements. We do not express an opinion or provide any assurance
on the information because the limited procedures do not provide us with sufficient evidence to
express an opinion or provide any assurance.
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the City’s basic financial statements. The accompanying Schedule of
Expenditures of Federal Awards is presented for purposes of additional analysis as required by
Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements,
Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). This
supplementary information is not a required part of the basic financial statements. Such
information is the responsibility of management and was derived from and relates directly to the
underlying accounting and other records used to prepare the basic financial statements. The
information has been subjected to the auditing procedures applied in the audit of the basic financial
statements and certain additional procedures, including comparing and reconciling such
information directly to the underlying accounting and other records used to prepare the basic
financial statements or to the basic financial statements themselves, and other additional
procedures in accordance with auditing standards generally accepted in the United States of
America. In our opinion, the information is fairly stated, in all material respects, in relation to the
basic financial statements as a whole.
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OTHER REPORTING REQUIRED BY GOVERNMENT AUDITING
STANDARDS
In accordance with Government Auditing Standards, we have also issued our report dated
September 19, 2025 on our consideration of the City’s internal control over financial reporting and
on our tests of its compliance with certain provisions of laws, regulations, contracts and grant
agreements and other matters. The purpose of that report is to describe the scope of our testing of
internal control over financial reporting and compliance and the results of that testing, and not to
provide an opinion on the effectiveness of the City’s internal control over financial reporting or on
compliance. That report is an integral part of an audit performed in accordance with Government
Auditing Standards in considering the City’s internal control over financial reporting and
compliance.
Pat McCarthy, State Auditor
Olympia, WA
September 19, 2025
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FINANCIAL SECTION
City of Pasco
January 1, 2024 through December 31, 2024
REQUIRED SUPPLEMENTARY INFORMATION
Management’s Discussion and Analysis – 2024
BASIC FINANCIAL STATEMENTS
Statement of Net Position – 2024
Statement of Activities – 2024
Balance Sheet – Governmental Funds – 2024
Reconciliation of Governmental Funds Balance Sheet to the Statement of Net Position –
2024
Statement of Revenues, Expenditures and Changes in Fund Balance – Governmental
Funds – 2024
Reconciliation of Governmental Funds Statement of Revenues, Expenditures and
Changes in Fund Balance to the Statement of Activities – 2024
Statement of Revenues, Expenditures, and Changes in Fund Balances – Budget to Actual
– General Fund – 2024
Statement of Revenues, Expenditures, and Changes in Fund Balances – Budget to Actual
– ARPA Fund – 2024
Statement of Revenues, Expenditures, and Changes in Fund Balances – Budget to Actual
– Ambulance – 2024
Statement of Net Position – Proprietary Funds – 2024
Statement of Revenues, Expenses and Changes in Fund Net Position – Proprietary Funds
– 2024
Statement of Cash Flows – Proprietary Funds – 2024
Statement of Fiduciary Net Position – 2024
Statement of Changes in Fiduciary Net Position – Fiduciary Funds – 2024
Notes to Financial Statements – 2024
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REQUIRED SUPPLEMENTARY INFORMATION
Schedule of Changes in the Net OPEB Liability and Related Ratios – Old Fire OPEB –
2024
Schedule of Investment Returns – Old Fire OPEB – 2024
Schedule of City Contributions – LEOFF 1 OPEB – 2024
Schedule of Changes in Total OPEB Liability and Related Ratios – LEOFF 1 – 2024
Schedule of Proportionate Share of Net Pension Liability – PERS 1, PERS 2/3, LEOFF 1,
LEOFF 2, PSERS 2 – 2024
Schedule of Employer Contributions – PERS 1, PERS 2/3, LEOFF 2 – 2024
Schedule of Contributions – Fire Pension Fund – 2024
Schedule of Changes in the Net Pension Liability and Related Ratios – Old Fire Pension
Fund – 2024
Schedule of Investment Ratios – Old Fire Pension – 2024
SUPPLEMENTARY AND OTHER INFORMATION
Schedule of Expenditures of Federal Awards – 2024
Notes to the Schedule of Expenditures of Federal Awards – 2024
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MANAGEMENTS’ DISCUSSION AND ANALYSIS
This section of the City of Pasco’s (City) annual comprehensive financial statements (ACFR)
provides a narrative overview and analysis of the financial activities for the fiscal year ended
December 31, 2024. Readers are encouraged to consider commentary provided in the
management’s discussion and analysis (MD&A) in conjunction with the financial statements and
notes to the financial statements. While each portion of the ACFR is useful, they are produced to
complement and complete financial reporting for readers.
Financial Highlights
x The total assets and deferred outflows of resources of the City exceeded liabilities and
deferred inflows, or net position, at the close of December 31, 2024, by $728.6M. Net
investment in capital assets (capital asset cost net of depreciation and related debt) accounted
for 68.2% of this amount or $496.7M. Of the remaining net position, $126.4M, or 17.3%,
may be used to meet the government’s ongoing obligations to its citizens, creditors and
employees without restriction. A final category, valued at $105.6M is restricted for specific
use based on legal requirements.
x The City’s total net position improved by $30.1M, or 4.3% compared to 2023 year-end
value. Governmental activities increased by $20.7M while business-type activities increase
by $11.6M. Affecting the net position change are accounting changes and error correction
adjustments reflected in both the government and business activities of $-2.5M and $2.3M,
respectively. Details are disclosed in Note 18 accounting changes and error correction
x City-wide net investment in capital decreased by $14.9M in 2024. This decrease reflects
issuance of debt for the purpose of street infrastructure.
x City-wide restricted net position increased by $27.7M representing 32.5% of total net
position. The most significant impact is related to fund balance restricted for capital
improvements. In 2024, a limited term general obligation bond in the amount of $35.6M was
issued to support transportation projects in the Broadmoor Area of the City. At the end of 2024
remaining bond proceeds were unspent in the amount of $32.2M. Also increased as of the end
of 2024 are dollars set aside for debt service in the amount of $9.6M. This amount is three
times greater than the 2023 value. The above-mentioned bond issue as well as various low-
interest loans agreements in support of business-type, utilities projects, have resulted in
increasing debt service.
x Activity related to general revenues reported on the Statement of Activities resulted in an
improvement of $12M in 2024 over 2023. This increased recognition includes higher revenues
associated with taxes including property tax (3.7%), sales tax (13.6%) and business and
occupation tax (7.3%). Excise tax revenues decreased (-28.3.%) due to significant reductions
in Real Estate Excise Tax collections based on lower volume and value of sales transactions.
Interest income improved by $5.1M because of favorable interest rates. The effect of internal
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transfers between governmental and business-type activities in 2024 resulted in a net inflow to
governmental activities of $1.2M. Compared to 2023, the impact was significant. In 2023,
Government activities transferred $5.9M to Business-Type Activities primarily in support of
infrastructure improvement projects using American Rescue Plan Act (ARPA) funding. In
2024, that funding transfer for the same purpose declined to $559K. New in 2024, the Sewer
Utility transferred funds to the LID Guarantee Fund in relation to the East Urban Growth
Boundary Sewer project. Completion of this project resulted in the issuance of $20M bond
anticipation note in 2024. The related transfer of $1.8M to the guarantee fund was necessary
due to the increase in Local Improvement District (LID) liabilities.
x Expenses reported on the Statement of Activities for governmental activities were greater
than program revenues by $51.6M. General revenues, including tax proceeds of $60.2M, are
used to offset the difference between program revenues and expenses. Included in General
Revenues are earnings from investment income and miscellaneous revenues, $11.3M for
governmental activities in 2024. These revenues also augment net position. However, the
revenues can vary and should not be relied upon to support ongoing City operations. For
business-type activities, revenues exceeded expenses by $8.4M. Business-type investment and
miscellaneous revenues accounted for an additional revenue source valued over $2.1M.
x Governmental fund balances at year-end were $114.1M, an increase of $27M. Of this fund
balance, a total of $25.2M is available to meet ongoing obligations without restriction. An
additional $1.2M has been assigned toward completion of a future community center project
per Council direction. Major funds within the governmental funds category include
Ambulance, American Rescue Plan Act (ARPA) and Construction. As of yearend 2024, the
Ambulance Fund has a fund balance of $7.3M, which is a reduction from the prior year’s fund
balance by $30K. A deficit fund balance of $1.4M is attributable to the Construction Fund.
This deficit is the result of project spending that outpaced funding in the current period.
Available support is being identified based on reallocation during capital improvement plan
analysis and pending grant applications. The ARPA fund reflects no fund balance. Assets in
this fund are used and revenues recognized as Act appropriate spending occurs. The remaining
governmental fund balance is the combined effect of non-major governmental funds. These
funds represent only a small portion of unassigned fund balance, with their respective fund
balances restricted for unique fund purposes.
o Revenues reported in the governmental funds increased from 2024 to 2023 by
$975K. All categories of revenue increased apart from intergovernmental revenue.
The change in intergovernmental revenues reflected a decrease of $5.4M as
compared to 2023 activity related to the ARPA and Construction Funds. Annual
activity, and associated funding source by project, result in change levels of revenue
from year to year.
o Current expenses increased by $5.3M. In all categories of Current Expenditures,
expenses were higher except for General Government.
General Government increases associated with labor costs of approximately
9% were more than offset via less supplies and services expenditures.
Between 2023 and 2024, General Government expenditures reflect a net
decrease of $2M. During 2024, supplies and technology costs decreased
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partially based on reduced 2024 projects. Also, the effect of software related
entries decreased from 2023 to 2024 by $1M. This change was primarily
the result of subscription-based information technology accounting
(SBITA) treatment.
Public Safety expenditures increased by $4.5M from 2023 to 2024. Labor
costs increased 11%, or $3.7M. The services category also reflected an
increase of 12%, approximately $1.3M. Like the General Government
category, accounting pronouncements for leases and SBITAs affected the
expenditure change from 2023 to 2024 by $504K. Offsetting these
expenditure increases were decreases supplies expenditures.
In the Transportation function, expenditures increased by approximately
10%, or $601K. Labor accounted for the primary increase, $485K. Supplies
cost was slightly lower, $35K. Services expenditure was greater than
recorded in 2023 by $154K.
Expenditures in the Natural and Economic category increased six percent,
or $837K in 2024. Due to positional vacancies, labor cost was nearly flat.
Nearly all the increase, approximately $600K, was recorded in services-
type expenditures. This increase includes expenditure associated with a
$1.25M pass through of a Department of Commerce grant benefitting
development of affordable housing.
Culture and Community category of expenditures increased by nearly
$1.4M, or 16%. Labor cost increases accounted for $410K, or
approximately a quarter of cost increase. The remaining increases were
primarily in the services category, namely for seasonal labor expenses and
increased payments for library services.
o Capital expenses decreased by $5.5M as compared to 2023 totals. In 2024, there
were a handful more individual projects reflecting activity. However, total annual
spending decreased. Transportation improvement related spending for projects in
the Broadmoor Area of the City captured a large portion of capital spending
accounting for $10.8M. Other significant project spending in 2024 included Lewis
Street Overpass ($6.8M), Sylvester Street Safety Program ($3.8M), Oregon
Avenue Overlay ($2.6M), Court Street and Road 68 Intersection Improvements
($2.4M) and Argent Road Widening ($1.7M). On the non-transportation side of
projects, larger project spending in 2024 included Gesa Stadium Improvements
($851K), completion of Fire Station 85 construction ($518K), spending for
renovations at Martin Luther King Jr Center ($472K), Memorial Pool Bubble
construction ($468K) and Highland Park Improvements ($383K). Significant
equipment spending included the purchase of Fire Department deliberators
($395K) and costs associated with emergency generators for Police Department
($306K) and City Hall ($307K).
o Debt service expenses increased by $2.3M as compared to 2023 totals. In 2023 and
2024, general obligation bonds were issued adding both principal and interest
payment requirements. Proceeds from the 2023 bond supported improvements
including, Fire Station 85 construction, improvements at the Memorial Pool and
Gesa Stadium, and City Hall generators. The 2024 bond issuance purpose was
entirely for capital transportation improvements in the Broadmoor Tax Increment
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Area. Property tax proceeds gained by improvements in this area of town are
dedicated to retirement of this associated debt.
As of December 31, 2024, the City’s outstanding debt net any accompanying unamortized
premium or discount and composed of bonds and loans, increased by $95.1M. Within the
governmental activities, total outstanding debt increased by $37.7M, reflecting the issuance of a
limited-term general obligation bond in the amount of $35.6M. Proceeds received are for the
support for construction transportation projects located in the Broadmoor Tax Increment Financing
Area. Within business-type activities, total outstanding debt increased by $57.4M. The
Water/Sewer Fund, a business type-activity, was the recipient of various loan programs of the State
of Washington. The projects supported include capital improvements for facilities, including the
West Pasco Water Treatment Plant, Butterfield Water Treatment Plant, Water Reservoir Storage
Tank Zone Three, Wastewater Treatment Plant, and Process Water Reuse Facility storage and
treatment projects. Typically, this form of funding is received on a reimbursement basis and bears
interest cost significantly lower than debt funding achieved from the bond market. As detailed in
Note 8, interest rates range from zero percent to two percent. Based on the lower borrowing cost
associated with these types of loans, the City will continue to seek out opportunities to apply for
similar financing
Overview of the Financial Statements
This discussion and analysis are intended to serve as an introduction to the City of Pasco’s basic
financial statements. The financial statements are comprised of three components: 1) government-
wide financial statements, 2) fund financial statements, and 3) notes to the financial statements.
This report also contains other supplementary information in addition to the basic financial
statements themselves.
The activities of the City are classified as either governmental or business-type depending upon
the nature of services provided and source of funding. Both government-wide financial statements,
statement of net position and statement of activities, segregate financial reporting based on the
activity type.
Governmental activities provide services that are principally supported by taxes and
intergovernmental revenues. Depending upon purpose and authority for revenue collection
financial activity is reported in either the General, Special Revenue, Debt Service, or Capital
Projects funds. Governmental activities included basic services of the City like police and fire
services, parks and recreation program delivery, streets and facilities maintenance, etc. Other City
activities are classified as business-type. These services receive all or a significant portion of their
financial support from fees and charges. The City’s business-type activities include utilities
(composed of individual water, sewer, irrigation, process water reuse, and storm water utilities),
equipment maintenance and equipment replacement services, and personnel benefits.
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The City adopts a biennial budget. Budgets are adopted via ordinance at the fund level in
accordance with state law. A budgetary comparison statement is presented in the basic statements
for all major funds and a combined comparison for all non-major special revenue funds.
Government-wide Financial Statements
The government-wide financial statements are designed to provide readers with a broad overview
of the City’s finances in a manner similar to a private-sector business.
The Statement of Net Position presents information on the City’s assets, liabilities, and deferred
inflows and deferred outflows, with the difference reported as net position. The purpose of this
statement is to report activity similarly to a consolidated balance sheet in private business. Over
time, increases or decreases in net position may serve as a useful indicator of whether the financial
position of the City of Pasco is improving or deteriorating. Certain activity is only presented the
government-wide statement due to the basis of accounting differing from the fund financial
statements.
In 2024, current assets increased by 16.6% or an additional $36.5M. A large portion of this value
was reflected in capital development fees held for reinvestment to expand City infrastructure,
unspent bond proceeds, investments and debt service set aside. Non-current assets decreased in
value, lower by $3.4M than the 2024 value. Primarily, this reduction is the effect of net pension
asset adjustment. Capital asset values grew by $83.1M in 2024. This increase reflects the City’s
emphasis on stewardship of its facilities and infrastructure as well as the ongoing march of
community expansion. Deferred outflows reflecting the recognition of future pension activity
positively affecting net position in 2024 by $4.6M.
On the liability side of the government-wide activity, current liabilities increased significantly.
This change is primarily reflective of the planned 2025 refunding of a bond anticipation note for a
Local Improvement District. Long term liabilities increased by $78.3M. Of this total, the material
changes include the addition of a 2024 general obligation bond and capital construction supported
by multiple state and federal loans that occurred in 2024.
Deferred inflows decrease related to 2024 activity. This reduction occurred as related to pension
activity. All pension and OPEB accounting is determined with the assistance of an independent
actuary.
The Statement of Activities presents information showing how the City’s net position changed
during the most recent fiscal year. All changes in net position are reported as soon as the underlying
event giving rise to the change occurs, regardless of the timing of related cash flows. Thus,
revenues and expenses are reported in this statement for some items that will only result in cash
flows in future fiscal periods (e.g. uncollected taxes and earned but unused vacation leave).
Fund Financial Statements
A fund is a grouping of related accounts that are used to maintain control over resources that have
been segregated for specific activities or objectives. The City of Pasco, like other state and local
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governments, uses fund accounting to ensure and demonstrate compliance with finance-related
legal requirements. All funds of the City can be divided into the following categories:
governmental, proprietary, permanent, fiduciary and custodial funds.
Governmental Funds
Governmental funds are used to account for essentially the same functions reported as
governmental activities in the government-wide financial statements. However, unlike the
government-wide financial statements, governmental fund financial statements focus on near-term
inflows and outflows of spendable resources, as well as on balances of spendable resources
available at the end of the fiscal year. Such information may be useful in evaluating a government’s
near-term financing requirements.
Because the focus of governmental funds is narrower than that of the government-wide financial
statements, it is useful to compare the information presented for governmental funds with similar
information presented for governmental activities in the government-wide 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 statements of
revenues, expenditures and changes in fund balances provide a reconciliation to facilitate this
comparison between governmental funds and governmental activities.
The City maintains thirty-one (31) individual governmental funds including the General Fund.
Information is presented separately in the governmental fund balance sheet and in the
governmental fund statement of revenues, expenditures and changes in fund balances for the
General Fund, which is a major fund as defined by the Governmental Accounting Standards
Board (GASB). In 2024, the General, Ambulance, American Rescue Plan Act (ARPA), and
Construction Funds were the only major governmental funds. From year to year, the Ambulance
Fund has moved in or out of the major fund classification based on annual activity. Financial
results for major funds are reported individually in the governmental fund balance sheet and
governmental fund statement of revenues, expenditures, and changes in fund balances.
Remaining non-major funds financial activity are consolidated. To view individual fund data for
non-major governmental funds, reference the combining and individual fund statements and
schedules section of this report.
Proprietary Funds
The City maintains two different types of proprietary funds. Enterprise funds are used to report the
same functions presented as business-type activities in the government-wide financial statements.
The City uses an enterprise fund to account for the Water/Sewer Utility. Internal service funds are
an accounting device used to accumulate and allocate costs internally among the City’s various
functions. The City uses internal service funds to account for its equipment maintenance and
replacement, central stores and medical/dental insurance activities. As the central stores,
medical/dental insurance and certain equipment maintenance and replacement services
predominately benefit governmental rather than business-type functions, they have been included
with governmental activities in the government-wide financial statements. Data from the other two
internal service funds (equipment maintenance and equipment replacement of utility equipment)
are combined into a single, aggregated presentation in the basic proprietary fund financial
statement.
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Proprietary funds report financial information using the same measurement focus and basis of
accounting as that used for creation of the government-wide financial statements. Readers,
however, can find more detail reported in the enterprise fund financial statements. Data from the
other two internal service funds (equipment maintenance and equipment replacement of utility
equipment) are combined into a single, aggregated presentation in the basic proprietary fund
financial statements.
The proprietary fund basic statements are presented following the governmental fund statements
of this report.
Permanent Funds
Permanent funds are used to collect principal and disburse earnings for a specific purpose. The
principal value is preserved and protected from spending to generate interest earnings. In turn,
interest earnings are usable as a source of income for a specified purpose.
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
statements because the resources of those funds are not available to support the City of Pasco’s
programs.
Custodial Funds. A custodial fund is a type of fiduciary fund. The purpose of a custodial fund is
to report resources held by the City for the ultimate benefit of others, but not based on a pension,
other post-employment benefit, investment nor private purpose relationship. The activity of the
custodial funds does not reflect City activity nor is the City administratively involved. Instead, the
City provides accounting support of the activity for the benefit of the controlling entity.
Notes to the Financial Statements
The notes provide additional information that is essential to acquire a full understanding of the
data provided in the government-wide and fund financial statements. The notes are presented
following the basic financial statements of this report.
Other Information
In addition to the basic financial statements and accompanying notes, this report also presents the
required supplementary information (RSI) concerning the City’s progress in funding it obligation
to provide pension benefits and Other Post-Employment Benefits (OPEB) to its employees.
Pension obligations discussed in RSI include the City’s ratable share of State PERS and LEOFF
plans, as well as those statutory obligations arising from past service of participating police and
firefighters who were hired by the City prior to October 1, 1977. Required supplementary
information can be found immediately following the notes to the financial statements of this report.
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Government-wide Overall Financial Analysis
Net Position.This section provides analysis of the government-wide financial statements
including long-term and short-term information about the City’s overall financial condition. The
following tables address the financial results of the City as a whole.
Net position over time may serve as a useful indicator of a government’s financial health. The
City’s assets and deferred outflows of resources exceeded its liabilities and deferred inflows of
resources by $728.6M as of December 31, 2024. This is an increase of $27.7M or 4.0%, as
compared to December 31, 2023. Including the effect of accounting changes and error corrections,
government net position increased by $18.6M, or 4.3%. Similarly, business-type net position with
a accounting changes and error corrections impact, increased by $11.5M or 4.4%. Following is a
condensed version of the City’s statement of net position for the years ended December 31, 2024
and 2023.
The City’s investment in capital assets, including land, buildings, infrastructure, and equipment,
is substantial. A subset of net position, net investment in capital, is reflected distinctly. This
calculation recognizes the cost of capital assets, less any outstanding related debt used to purchase
or improve those assets, net any unspent bond proceeds. As capital assets are used to provide
services, their value lies in support of service delivery to citizens and customers. The associated
net position is unavailable for future spending. Annual debt service payments related to debt is
paid by annual revenues of the supporting fund.
A second subset of net position is restricted for specific use or subject to external restrictions.
Examples include net position available for use based on adherence to bond covenants, for
construction completion or fulfilling commitments to employees in the form of pensions and other
post-employment benefits, and program specific support. The value of these restrictions on net
position total $105.6M, or 14.5%, of all net position.
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The remaining net position of $126.4M is unrestricted. It may be used to meet the government’s
ongoing obligations to citizens and creditors. While not legally restricted, a portion of the
unrestricted net position has been committed by City Council action for projects and other
programs in the future.
At the end of 2024, the government-wide net position was positive for all reported categories,
governmental and business-type.
Governmental Activities:
Governmental activities net position increased by $18.6M including the impact of accounting
changes and error correction adjustment. Key elements of the current year’s increase in net position
as compared to year end 2023 net position follow.
Revenues:
Program revenues decreased by approximately $14.6M, or 17%. Program revenues are composed
of charges for services and grants and contributions to be used for operational or capital efforts.
Charges for services are recognized on a year-to-year basis and often associated with recurring
programs and services provided by the City. Some examples include fees for items like permitting
and planning services, engineering services, animal control service, parks and recreation programs
and police and fire services to other government agencies. The noticeable change in general
government and transportation revenue types in the two years compared partially offset each other.
Some charge for services revenues that were reported in transportation category in 2023 were more
appropriately reported in general government in 2024. Another correction that occurred as of the
2024 report is the correct treatment of transfers within government fund types. In 2023, transfers
were erroneously reported as capital revenues.
$-
$5
$10
$15
$20
$25
$30
$35
$40
$45
$50
General
Government
Public Safety Cultural &
Community
Natural &
Economic
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Revenue Comparison Governmental Activities
2024 2023
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During creation of the 2023 Annual Comprehensive Financial Report (ACFR), a software
malfunction resulted in misclassification of activity. Unfortunately, the result makes comparison
with a correctly reported 2024 statement challenging. Material revenue changes in 2024 are
outlined below:
Description Amount Change 2024 Classification
ARPA Revenue -$4.96M General Government
Affordable Housing Grant -$1.26M Natural and Economic
GEMT Ambulance Transports +$0.76M Public Safety
Ambulance Monthly Fee +$0.43M Public Safety
Ambulance Transport Fee +$0.73M Public Safety
Internal Service Charges +$0.59M General Government
Plan Check Revenue -$0.40M Natural and Economic
School Impact Fees +$0.49M Natural and Economic
Farm Lease +$1.16M Investment Income & Misc.
Tax revenues are the largest source of revenue within governmental activities. In 2024, tax
revenues were $60.2M, or $3.7M greater than 2023 revenue.
Sales tax revenue for 2024 was higher than those of 2023 by approximately 13%, or $3.6M. While
changes were reflected across the spectrum of tax categories, the most meaningful increase was
reflected in the category of construction sale tax, increasing by approximately 68%, or $2.4M.
Property tax for 2024 was $467K higher than 2023. Unlike sales and excise tax, property tax is
more consistent as it is not as affected by the economy as sales tax. This increased revenue was
the result of new construction assessed value added to the City’s tax rolls during 2023 for 2024
collection. Council approval of maximum annual property tax levy increase of one percent (1%)
per Washington state legislation also positively impacted revenue collections.
Business and occupation taxes, many of which are associated with taxes imposed on utility service
providers, increased $944K over 2023 totals, or 2.3%. The City receives utility taxes from
providers of electric, natural gas, cable television, telephone, water and wastewater, ambulance
and stormwater service providers. Revenues can be affected by growth in customer accounts,
fluctuation in annual billed consumption and rate changes from year to year. Another subsection
of business and occupation taxes are those relate to gaming enterprises. The revenues received
from this activity decreased by $97K, or 10%, as compared to 2023 activity. Reporting in 2023
misclassified revenues between business and occupation taxes and excise taxes. This narrative
properly presents the change from 2023 to 2024 by taxation source.
The City’s real estate excise tax revenues of 2024 decreased resulting in reduction of revenue
$1.3M, a 28.3% decrease over the prior year. Real estate excise tax is a product of residential
and commercial property sales. As the cost of borrowing, and specifically interest rates
associated with real property acquisition has increased, sales remained slow in 2024 as
compared historical levels.
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The persistence of elevated interest rate levels throughout 2024 afforded the City the opportunity
to earn increased interest revenue as compared to 2023. Interest income in 2024 was approximately
$800K greater, or a 30% increase.
Expenses:
Program expenses increased by approximately $17.2M, or 16%. Labor cost increased as a result
of cost of living and time in position wage changes by $5.4M or 10%. The one function reporting
no increase in labor costs is Natural and Economic. This stagnation in cost reflects the existence
of vacant positions in 2024. No new positions were added city-wide in 2024. Instead, cost of living
style wage changes and progression in wage scale accounted for labor cost increases. Supplies
spending was reduced in 2024 for all function classifications as related to reduced impact of
inflation as well as reduced purchases, especially for tools, equipment and technology hardware.
Culture and Community spending on supplies increased in relation to maintenance efforts at the
community softball complex. Services spending increase was recorded in all functional categories
exclusive of General Government. For the General Government category, this change in services
expenses is chiefly the reflection of lower software maintenance and vehicle costs.
$-
$10
$20
$30
$40
$50
$60
General
Government
Public Safety Cultural &
Community
Natural &
Economic
Transportation Interest on
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Expenses Comparison Governmental Activities
2024 2023
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Business-Type Activities:
Business-type activities of 2024 contributed to the City’s net position by $11.5M, or an increase
of 4.4%. Of the government-wide increase in net position in 2024, business-type activities growth
accounted for 38% of the net position increase. Key elements of the current year increase in net
position and changes as compared to the prior year follow.
Revenues: Charges for services contribute most significantly to business-type revenues supplying
87% of program revenue in 2024. In 2024, charges for services revenues decreased by
approximately, $814k, or -2.1%. However, the decrease was the effect of changes to Process Water
Reuse processor billing. In 2023, billings related to the Process Water Reuse Facility (PWRF)
included one-time costs associated with establishment of a debt coverage reserve and payments
toward a work acceleration agreement for a construction project. Also related to changes at the
Process Water Reuse Facility, treatment for a processor that previously remitted industrial
wastewater to the municipal sewer plant shifted treatment flows to the PWRF.
The City routinely performs revenue requirement analysis. At times, these studies indicate needed
rate amendments. Based on a 2021 review, a series of annual rate increases were approved. The
first increase occurred in 2022. The series of approved rate increases are planned through 2026.
In 2024, water rates increased by 6.5% and sewer rates by 4%. Revenue recorded in charges for
services was ten percent greater for water utility service. The sewer utility service revenue for
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2024 reflects annual increase of five percent. Charge for service revenue in irrigation (5%) and
stormwater (6.9%) grew despite no change in rates.
Similar to governmental activities, interest income earnings in 2024 for business-type activities
improved as compared to 2023. The added revenue for 2024 was an increase of nearly $900K.
Expenses: Expenses increased by one percent. All categories of expense decreased as compared
to last year, apart from labor and debt interest expense. Labor cost, including wages and personnel
benefits, was approximately six percent higher in 2024 as compared to 2023. No new positions
were added in 2024, instead the increase is primarily the reflection of cost-of-living styled wage
increases. Expenses associated with supplies decreased by 16%. Accounting for a little over half
all such spending, chemicals cost was about -5% of 2023 cost. Spending for services was lower
than 2023. In this category, the difference was a small decrease of less than one percent. Within
the services category, taxes expense for remittals to State of Washington and City’s General Fund
based on revenues of the year are the greatest category of increase. The next largest element of
services cost for business-type expenses was associated with services supplied for administrative
support. In 2024, the cost was five percent higher than 2023 cost. Utilities services supplied to the
business-type funds, like purchase of electricity and garbage disposal service, increased in 2024
by 7% as a reflection of increased service area and growth of customer accounts. Small, service-
type savings in dues and subscriptions and travel and training, helped offset instances where 2024
service spending grew. However, the major area of lower spending was reflected in equipment and
vehicle maintenance related cost, down by $639K over the 2023 level. Interest associate with bond
and loan cost for capital improvements grew by $2.4M. City services provided by business-type
funds rely heavily on capital infrastructure. In 2024, low-interest governmental loans and a bond
anticipation note related to a local improvement district formed for the expansion of sewer service
were incurred. Theses borrowings support both renewal and replacement type infrastructure
improvements necessary to well steward existing facilities and complete expansion-type
infrastructure to meet City growth.
Transfers between the business-type and governmental activities were elevated over 2023. As
noted above a bond anticipation note was issued to provide interim financing for the East UGA
Sewer Local Improvement District (LID). As required by State statue, a transfer out equal to ten
percent of outstanding LID assessments, or an additional $1.8M, was completed to fund the LID
Guaranty Fund. This set aside exists to protect against potential delinquency in assessment
installments. A transfer in supportive of capital projects from the ARPA Fund was recorded in
2024 as well.
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Financial Analysis of the City’s Funds
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance
related legal requirements. The focus of the City’s governmental funds is to provide information
on near-term inflows, outflows and balances of spendable resources.
Major Governmental Funds.
The General Fund is the chief operating fund of the City of Pasco. The services provided by the
General Fund are those that citizens may typically view as government services. They include
police and fire protection, parks and recreation programs, issuance of building permits and
community wide code enforcement, municipal court operations, and the functions of the Council
and administrative services of City government.
Activity of 2024 resulted in a fund balance increase of $27.4M. Comparatively, the 2023 fund
balance increase was a much smaller amount, $175K. This fluctuation highlights the potential fund
balance impact from year to year based on activity reported as Other Financing Sources or Uses.
Some examples of Other Financing category activity include sales of assets, transfers in or out of
the fund for capital or operational support of other funds and proceeds from issuance of long-term
debt. In 2024, the General Fund recognized incoming Other Financing Sources in the amount of
$43M. Of these dollars, $39.3 are dedicated to capital improvements via issuance of debt proceeds
and an additional $1.9M from the sale of assets. Outgoing financing uses in 2024, primarily for
support of capital construction projects, were $15.3M.
General Fund activity, when excluding the Other Financing category, resulted in 2024 excess of
revenues over expenditures of $605K. In 2023, this value reflected a deficiency in revenues as
compared to expenses of $3.3M. Revenues in 2024 increased by a little over 10%, or $ 7.3M. Of
this change, the greatest contributor, taxes, infused an additional $4.18M, followed by
intergovernmental ($1.29M) and miscellaneous revenue ($1.08M).
On the expenditure side of General Fund activity, 2024 results increased by approximately $9.5
million, or 5% over 2023 totals. Expenditures are reported by purpose, including current, capital
and debt service. The current category reflects spending to support functions of City service
provision. For 2024, outgoing expenditure increased most to support delivery of public safety
($3.69M), cultural and community ($1.39M) and natural and economic environment ($645K). The
smallest increase was reflected in the transportation category. Only general government category
reported a decrease in expenses as compared to 2023 (-$2.06M). Capital spending decreased by
$2.6M in 2024 as compared to 2023. Costs associated with debt service increased in 2024 by
$2.3M because of new debt issuance in 2023 and 2024.
Taxes are the primary source of revenue for the General Fund, supplying 70.9% of all fund revenue
in 2024. Property taxes increased by $467K. The City is legally entitled to increase its levy
annually by one percent. This increase was approved by Council in 2023 for 2024 tax collection
resulting in new revenue of approximately $130K. The remaining additional property tax revenue
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increase was the result of new residential and commercial construction within the City’s
jurisdiction. Sales tax revenues improved in 2024 by $3.6M. Across the various categories of sales
tax, receipts improved. However, the most impactful increase is reflected in construction. Utility
tax in 2024 was 2.3% greater, approximately an additional $295K, over the revenue of 2023. The
City receives other tax revenues, most notably gambling taxes. Other tax revenue increased by a
small 1%, or $17K, in 2024.
Other categories of General Fund revenue activity for 2024 reflected improvement in charges for
services ($202K) and fines and penalties ($568K) and increases in licenses and permits ($159K),
intergovernmental ($1.2M), and miscellaneous ($1M). The increases of large value occurred in
the intergovernmental category primarily as a result of a grant the flowed through the City in
support of an affordable housing project. While the funding of $1.36M was recorded as
intergovernmental revenue, to fully comprehend the effect it is important to consider that these
funds were distributed to a contractor and not available for City programs. The other material
revenue increase reflected in 2024 for miscellaneous revenue was the result of increase
reimbursements and rebates. The City operates a regional Basic Law Enforcement Academy.
Reimbursements received in 2024 were greater based on completion of training sessions.
General fund operating expenses increased by $3.5M, or 4.6%. The cost increase in dollars spent
was reflected in public safety category ($3.69M), general government (-$2.05M), culture and
community ($1.39M), natural and economic environment ($0.65M) and transportation ($0.1M).
Expenditures associated with labor costs and services increased in 2024. Labor cost increased
approximately ten percent based on cost-of-living style or time in position wage increases and
associated rise in benefit cost. Service category expenses, composed of a variety of services, were
higher in 2024 as well. Across the current expenditure categories material service level cost
changes include:
x General Government category reflected lower services costs, namely
o Interfund savings for vehicle replacement (-$424K)
o Reduced spending for software maintenance (-$306K) and software subscription (-
$335K) costs
x Public Safety service costs increased approximately $1.2M. Of this change, notable
increases are reflected in Other Contract Services, primarily composed of corrections
center costs and dispatch services, and long-term vehicle lease expense.
x Transportation supportive services expenditures decreased slightly, primarily related to
lower interfund savings for vehicle replacement, (-$105K)
x Culture and Community service expenditures increases with greater library service
assessments paid to Mid-Columbia Library ($368K) and seasonal labor ($143K).
x Natural and Economic service expenditures reflect a large, pass through grant payment
supportive of development of affordable housing ($1.25M). This unique 2024 expense was
offset by lower contributions associated with animal control shelter construction, -$723K
less than 2023 contributions. Also, lower in 2024, were Professional Services costs for
building inspection services, -$177K.
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Budgetary demands on the General fund as the primary operational fund for City services are
many. As such, the fund is monitored closely to analyze actual demands as compared to budgetary
approvals by Council. As described in Note 1 in the Notes to the Financial Statements, this fund
is budgeted in accordance with Washington State law, as well as City policy to assure budgetary
amendments are appropriately administered. A schedule of Revenues, Expenditures and Changes
in Net Position “Budget to Actual” comparison is provided within the Annual Comprehensive
Financial Report, to present comparisons between actual revenues and expenditures and the
original and amended budgets.Following are major amendments to the General fund’s biennial
budget during 2024:
x To appropriate for an increase in revenue and expenditures in relation to a Department of
Commerce grant from the Connecting Housing to Infrastructure Program (CHIP). Grant
revenues were received by the City and remitted to developer completing an eligible multi-
family affordable housing project, less retention of a small administrative fee. Expenditure
appropriations were amended by $1.25M.
At the conclusion of 2024, General fund revenues (excluding beginning fund balance) were 103%
of the amended biennial budget for 2023/2024. Actual expenditures in the General fund for the
biennium (excluding ending fund balance) were 99% of amended biennial budget.
Among revenues, the budgetary improvement of most value was reported in taxes category
providing an additional $2.6M. Tax revenues represented 73% of General Fund revenues in the
biennium. Sales taxes were 50% of tax revenues for this biennium. As sales tax can be influenced
by economic pressures like inflation and cost of borrowing, especially where construction sales
tax receipts are considered, this revenue source varies from year to year. For example, in 2024
sales tax revenues were $3.2M greater than those of 2023. Of material impact was greater
construction related sales tax revenues. Permit and licenses revenues for the biennium were 87%
of budget. This shortfall is related to lower building permit revenue than budgeted with cost of
borrow expected to have imposed a negative impact in each year of the biennium.
Intergovernmental revenues are slightly below budget (96% of biennium). This shortfall is
primarily related to lower state shared revenue that is a product of real estate excise tax. Charges
for services met 103% of budget. Associated revenues associated with services supplied by city
employees to other funds was the largest item of increase. Smaller increases were reflected for
police and airport fire services. Utility billing related fees previously reported in this category were
reclassified as fines and penalties in 2024. There were other small decreases across charges for
services revenue. The only noteworthy reduction was recognized in plan check fees, lower by
$403K in 2024 as compared to the prior year. As noted above, appropriate reclassification of utility
billing charges associated with late payment was moved to the revenue category of Fines and
Penalties in 2024. This change reflects an additional $473K in 2024 fines and forfeitures category.
Finally, miscellaneous revenues were 262% of budget. Revenues recorded as miscellaneous
include donations, refunds, reimbursements or rebates, restitution, judgement and insurance
recoveries, all of which can typically be nonroutine or unanticipated. Most impactful receipts of
2024 include refunds related to costs associated with City operation of a regional basic law
enforcement academy from the State of Washington Criminal Justice Training Commission
($657K) and settlements related to opioid judgements ($523K).
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Current expenditures represented 102% of biennial budget. General Government and
Transportation activity were underbudget. The remaining categories of Public Safety, Natural and
Economic, and Cultural and Community activities were over budget.
Debt service expenditures reflected savings compared to budgeted spending. This savings is
primarily related to delay in issuance of debt associated with the Broadmoor Area Tax Increment
transportation projects. When planning the biennial budget, issuance was planned for beginning of
biennium which would have resulted in an early debt service payment timeline. However,
concurrent with development and project planning issuance was delayed. This delay resulted in
biennial savings of approximately $5M.
Actual Capital Outlays were 111% of biennially budgeted totals. This overage is the result of
capital recognition of subscription-based information technology, a recently imposed accounting
pronouncement of the Government Accounting Standards Board, of $2.2M. This new treatment
results in purchases of technology subscription agreements that extend over more than one year
and meet specific stipulations are accounted for similar to financed capital transactions.
Ambulance Fund is a special revenue fund of the City accounting for all activity related to the
Fire Department’s operation of an emergency medical transportation service. Over the past many
years, based on annual activity the Ambulance Fund has been reported as a Major fund or included
in the summary presentation of Nonmajor Funds. For the year ended 2024, the Ambulance Fund
met criteria to be reported as a Major Fund. In 2024, fund balance decreased $95K, based on yearly
transactions. This change was offset by $65K accounting changes and error correction. In 2024,
revenues are primarily earned through Charges for Services (69%) and Intergovernmental
Revenues (31%). Charges for services are the result of billings for instances requiring ambulance
transport or a monthly availability charge. Of the Charges for Service category, the monthly
ambulance availability revenue is crucial, contributing nearly $6.3M of the $8.9M in service
revenue. Intergovernmental revenue includes funding from a SAFER grant ($1M), supportive of
labor costs of an expanded firefighter staff for approximately three years. With conclusion of the
grant term, ongoing related cost will be fully borne by the Ambulance Fund revenues. The
remaining intergovernmental revenue in 2024 was primarily the result of a federal entitlement
program for Ground Emergency Medical Transport (GEMT) that serves to cover transport cost
associated with patients in the Medicaid health care program. Expenses, as compared to 2023,
increased 10% in 2024. Revenues recognized in 2024 were 16% higher than those of 2023, or an
additional $1.8M. Expenses for the year of 2024 increased by 11%, or an additional $1.3M. Labor
costs were higher by $885K, or 10%. This increase does not reflect additional staffing, but instead
is the result of negotiated collective bargaining and other pay and benefit changes. Supplies
expenses decreased 25% overall. The one exception in the supplies category were the cost of
medical supplies. Those supplies expenses for 2024 were 13% greater than 2023. Service category
expenses increased two percent, or $80K. Ambulance Fund spent an additional $440K on capital,
including the purchase of defibulators ($392K), in 2024. While revenue recorded in 2024 nearly
covered expenses, the conclusion of the SAFER grant, approximately one million annually, is
anticipated to have a significant impact on fund balance. In 2025, a revenue requirements study is
being performed to assess financial expectations and related rate needs for the coming years.
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American Rescue Plan Act Fund (ARPA) accounts for activity related to federal funds received
as part of the Coronavirus State and Local Fiscal Recovery Funds. Unearned revenue, a reflection
of grant proceeds not yet associated with completed grant eligible projects as of December 31,
2024 is $3.89 million. Funds were used toward eligible projects and programs, including water
utility system capital improvements ($600K), renovation of MLK Center ($472K), improvements
at the Pasco Specialty Kitchen ($100K), resource navigator program spending to support
emergency services ($147K), expenses associated with the beginning stages of improvements of
the City’s Boys and Girls Club ($116K) and efforts for other programs of smaller nature plus
program administration ($50K). All remaining ARPA funds as of the end of 2024, were obligated
and expected to be spent by December 31, 2026.
The Construction Fund accounts for all City capital improvements except those completed and
funded for proprietary activities. A accounting changes and error correction in the amount of $69K
was completed increasing the beginning fund balance. A deficit fund balance of $1.3M is the result
of project spending that outpaced funding in the current period. Available support is being
identified based on reallocation during capital improvement plan analysis and pending grant
applications.
Intergovernmental revenues from both City funds and external grants and loans are the primary
source of project funding. In 2024, the fund recorded $11.1M from state and federal sources. The
other major funding source interfund transfers was $24.1M. Funds are received primarily as a
reimbursement for project spending.
In 2024, expenditures of $34.6 million for 57 projects were recorded in the construction fund.
Following are major projects accounted for in the Construction fund in 2024:
x Completion of work on the Lewis Street Overpass Project in the amount of $6.8M. A long-
time priority of Councils, community members, and the business community this project
in the heart of downtown Pasco replaced an underpass constructed in 1937 to bypass the
BNSF railyard. Replacement of the structure has enhanced connectivity through downtown
Pasco as it serves as a connector to a primary east-west corridor.
x Various transportation improvement projects thorough the City. Most notably;
o Completion of I-82/Broadmoor Boulevard Interchange improvements composed of
the installment of a new loop off-ramp and supporting roundabout, $7.5M.
o Sylvester Street Safety Program Improvements, $3.8M, promoting safer, more
efficient multi-modal and non-vehicular travel.
o Overlay project on Oregon Avenue, $2.6M
o Court Street and Road 68 Intersection Improvements, $2.5M, completing
construction of a roundabout to enhance traffic flow and safety.
o Argent Road Widening, $1.7M. This phased project additionally enhances lighting,
and includes addition of stormwater facilities.
x Supportive of community recreational opportunities capital expenditures in 2024 include
improvements at Gesa Stadium ($851K), improvements at Highland Park ($384K) and
Memorial Pool Bubble design and installation ($468K). Also, important for the
community, 2024 marks the beginning of improvements at the Martin Luther King Center
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with spending of $472K. This project is partially supported by $2.5M of American Rescue
Plan Act funding.
Proprietary Funds.Reporting of activity in the City of Pasco enterprise funds mirrors the
information found in the government-wide financial statements for business-type activities. The
activity of the Water/Sewer Utility (Utility), a major fund, is separately stated from that of the
internal service funds when reported at the fund level.
To evaluate the financial health of the Utility Fund, it is important to review various elements of
activity during 2024. The Statement of Net Position reflects the Utility’s financial assets and
liabilities. The residual value of these accounting elements, otherwise known as net position,
reflects the Utility Funds’ ability to meet obligations and invest in future growth. The net position
of the Utility Fund, which increased by $10.8M based on activity of 2024, totals $266.2M. Net
position, however, includes important subsets of resources for which use is designated. As the
Utility Fund relies heavily upon the reliability and adequacy of system infrastructure to provide
services to customers, capital investment is important. One category, net investment in capital of
$169.1M decreased by $23.8M in the current period. This change, however, highlights the
Utilities’ planning by way of debt funding long service assets and further rate investment to meet
existing and future service needs. The value of Net Investment in Capital is a byproduct of
completed construction projects and therefore not spendable. A second category of net position is
restricted net position. As of December 31, 2024, restricted net position of $28.6M is dedicated to
future capital investment, debt repayment and pension liabilities. The remaining value of net
position is unrestricted at $68.4M. These available funds serve as a reserve to support cash flow
needs, unforeseen emergencies, ongoing operations and a measure of capital investment to offset
depreciation. Based on activity in 2024, unrestricted net position increased by $26.5M.
To help assess the impact of financial activity, often the value of working capital is compared from
year to year. Working capital reflects the value of current assets minus current liabilities. It is a
measure of liquidity for the utility to meet its short-term obligations. At the end of 2024, the Utility
has current assets of $101.1M available to meet its current liability obligations of $35.3M, resulting
in working capital of $65.8M, or a ratio of current assets 2.87 times greater than current liabilities.
At the end of 2023, the working capital ratio calculation equaled 4.99. The measure to classify
transactions as current, or short term, are those assets that can be converted into cash with a year
or any liabilities that are due with a year. Cash on hand always represents a current asset. For this
reason, current assets benefit by the accumulation of $20M of capital development funds collected
as connection type fees for new service extensions. These fees reflect a buy-in to the investment
made in the utility infrastructure over the years by existing customers They are available for use
for capital infrastructure improvements only, however. Current liabilities increased as of the end
of 2024 related to debt service. In 2025, the City will refinance a bond anticipation note that was
issued as interim financing for the East UGA Sewer Local Improvement District. The outstanding
principal of $20.1M is included as a current liability, significantly higher than the current bonds
payable figure as of 12/31/2023.
The debt service coverage ratio, a measure of annual available net revenue to pay annual debt
service, decreased from 3.11 in 2023 to 2.30 in 2024. This reduction reflects added debt burden
related to large scale capital projects. By bond covenant, debt service ratio must be at least 1.25.
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The Utility Fund operating revenue for charges for services $38.8M reflects a decrease of one
percent from 2023 revenues. However, unique one-time billing that took place in 2023 related to
debt service coverage reserve set aside and project spending in the PWRF utility resulted in
additional 2023 revenue of $3.4M. With the one-time billing effect removed, 2024 revenue for
charges for services is greater than 2023 by eight percent. This increase was the result of
programmed rate increases in the water (5.0%) and sewer (4.0%) utilities and an increasing
customer count across all utility systems. Revenues associated with permits was nearly the same
from 2023 to 2024, reduced in 2024 by $2K. Operating expenses totaled $31.9M. This value
represents an 1% increase over 2023. Depreciation expense increased by seven percent, or $480K,
reflected growth in depreciable assets. The remaining operating expenses increases by percentage
change over 2023 were in labor expenses (5%), supplies (-16%) and services (-1%). Increase in
labor expense was reflective of cost-of-living type wage adjustments. The utilities use many types
of supplies and services. Across those items, savings of note were in chemical supplies and vehicle
or equipment related services.
Non-Operating activity reduced net position by an amount of $3.15M. The primary affect is the
payment of debt service in the form of interest expense on outstanding loans and bonds. In 2024,
interest expense increased by $2.4M over 2023. The utility recognizes interest income and minor
revenue activity, like rent revenues and sales of assets. For 2024, a higher rate of return on short
term investments benefitted the utility by increasing interest income by $473K over last year’s
interest earnings.
Capital contributions to the fund for year 2024 amounted to $5.7M. These contributions are tied
to service area growth and, as such, must be spent toward capital improvements that enhance utility
capacity for service. In addition to revenues received and dedicated to capital expansion, the need
for infrastructure renewal and replacement and improvements to increase a growing population
require that City staff seek low-interest and grant funding opportunities where possible.
Acquisition of funding sources with reduced borrowing cost benefit rate payers. In 2024, the
Water/Sewer Utility Fund received loan proceeds of $10.6M to support capital projects from low-
interest state or federal funding programs. While rate revenue is necessary to pay associated debt
service, lower interest expense lessens the rate impact.
In 2024, capital expenses of $62.3 million were recorded against 24 projects in the Water/Sewer
Utility Fund. To manage many large-scale capital projects, the Water/Sewer Utility Fund has
programed a phased approach around numerous important projects. The following are some of the
major projects accounted for in 2024.
x Continuing work that began in 2023, PWRF Pretreatment Improvements (Phase 2)
Winter Storage recorded construction expenditures of $25.7M. This project will
construct three lined ponds to provide an additional 330 million gallons of winter
storage capacity for process wastewater from existing and known future industrial
food processors. This project is expected to be completed in 2025.
x The Reservoir Storage Tank - Zone 3, started in a previous year, added construction
expenses of $3.6M. This project includes design and construction of a new 3.5-
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million-gallon water storage tank in Pressure Zone 3. The project creates an
elevated skirted tank and extension of an existing 24-inch waterline to the tank site.
x Expansion of sewer service in a portion of the City’s urban growth area began in
2022 with the formation of a local improvement district (LID). In 2024, additional
construction expenditures of $8.7M were completed. Included in the project is the
construction of a new sanitary sewer lift station, force main and trunk mains. A
bond anticipation note was issued in 2024. The bond anticipation note will mature
on September 1, 2025, and be replaced by the issuance of bonds. Upon completion
of improvements and confirmation of the final assessment roll for LID 152, a
permanent financing will be incurred. Those properties benefiting from the
improvements have the option of any or all of final assessment to avoid financing
costs. Otherwise, based on the interest associated with permanent financing, LID
participants can spread repayment over the coming 15 years.
x Started in a prior period, the Wastewater Treatment Plant (WWTP) Improvements
(Phase 2) project continued in 2024 with expenditures of $3.2M. This project was
recommended by the WWTP Facility Plan. This phase focuses on solids treatment
and water disinfection, as well as completion of outfall replacement. This project
will extend into 2026.
x Efforts on West Pasco Water Treatment Plant Expansion (Phase 2) project
recognized expenditures of $13.5M in 2024. This project will provide the necessary
improvements to increase treatment capacity at the West Pasco Water Treatment
Plant (WPWTP) to 12 million gallons per day. To achieve firm capacity at
12MGD, three phases of projects are needed. This project is expected to be
completed in 2025.
x Expansion of City utilities, including water, irrigation, sewer and stormwater
services, in the Broadmoor Area Tax Increment Area of $2.5M.
Capital Asset and Debt Administration
Financial activity for capital assets is recorded primarily in the Construction Fund for
governmental activities. Business-type capital expenditures are reflected in the Water/Sewer
Utility Fund or internal service funds.Overall, the value of capital assets for governmental
activities increased by $18M due to increases in both non-depreciable and depreciable asset
values. Similarly, the value of capital assets for business type activities increased by $64.9M
mainly due to increase in construction work in progress and completed infrastructure. Reflected
as an asset for the first time in 2024 is the value of a lease for water rights of $8.7M.
Below is a summary of capital asset values at the close of 2024 as compared to last year’s end.
Highlights of significant capital projects undertaken in 2024 and their associated spending, are
included in the Construction Fund and Proprietary Funds sections of this analysis.
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Additional information on the City of Pasco’s capital assets can be found in Note 5.
Long-term Debt. At the end of 2024, the City of Pasco had total outstanding debt of $285.2M. Of
this amount, $77.2M is debt backed by the full faith and credit of the government. The business-
type debt total of $204.9M includes $75.2M of bonds secured primarily by specified revenue
resources (e.g., revenue bonds). The remaining business-type debt, $109.7M is composed of low
interest loans, namely from State of Washington sponsored programs including the Public Works
Board Loan, the Department of Health, and the Department of Ecology. The business-type
activities also have an outstanding Hanford Area Economic Investment Fund (HAEIF) loan for
improvements at the reuse facility.
In 2024, the Water/Sewer Fund issued a bond anticipation note (BAN) of $20.1M to support
construction of the East Urban Growth Area Sewer project. This project is associated with a Local
Improvement District. The project will be completed with final assessment amount approved in
2025. After a thirty-day prepayment period, long-term financing in the form of a special
assessment bond will be issued. Repayment of this debt is assigned to property owners in the
district and extended over a 15-year timeline.
Additional information on the City of Pasco’s long-term liabilities can be found in Note 8.
Economic Factors and Next Year’s Budgets and Rates
As previously mentioned, the City adopts a biennial budget. The close of the fiscal period ending
December 31, 2024, is also the end of the biennial budget cycle.
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The 2025/2026 biennial budget was approved by City Council at the December 9, 2024 meeting.
During creation of the 2025/2026 budget, it was necessary to cautiously balance service needs and
anticipated costs with revenue expectations for the biennium. There are many factors that may
affect the financial status of the City’s activities in the coming years, including:
x Inflationary pressure tied to economic factors outside the City’s control continue to be a
concern. Over the past many years, inflation has decreased the City’s purchasing power
for both supplies and services. As of the completion of this report, inflated interest rates
remain. Additionally, the impacts of economic policy changes at the Federal level are
unknown.
x Regardless of this uncertainty, demand for housing and related City services, is expected
to persist. Based on population demands, decisions made in the prior few years will
precipitate growth. Significant to this expectation is the expansion of the City’s urban
growth area and the establishment of a Tax Increment Financing Area. Infrastructure
improvements in both areas of the City are expected to precipitate development and
increased demand for services for governmental and business-type activities.
x In addition to spending tied to needed expansion of infrastructure to serve a growing
citizenry, necessary renewal and replacement of existing City infrastructure will be crucial
and have a financial impact on the City. The 2025-2030 Capital Improvement Plan, as
well as the 2025-2026 Budget, include projects that are tentatively planned should low-
interest funding through State or Federal programs be secured.
To assist in balancing community needs with budgetary demands, the City has created, or is in the
process of completing various facilities, program and revenue assessments.
x Annual renewal of the six-year Capital Improvement Plan (CIP)
x The City initiated development of a General Fund Forecast Model. This plan evaluates a
ten-year planning horizon. This analysis will result in calculation of baseline results for
provision of existing City services and programs. Using the resulting data, long-range
decision making will be better informed.
x The City will begin creation of its periodic update to the Comprehensive Plan in
accordance with the Washington State Growth Management Act.
x Review of revenue and fee requirements to support capital and operational needs including,
o Water and Sewer Utility Revenue Requirements
o Permitting and Development Fees
o Traffic Impact Fee
A copy of City of Pasco’s most recent 2025/2025 Biennial Budget can be access on the City’s
website at www.pasco-wa.gov on the Finance Department page.
Requests for Information
This financial report is designed to provide a general overview of the City of Pasco’s finances for
all those with an interest in the government’s finances. Questions concerning any of the
information provided in this report or requests for additional financial information should be
addressed to the Finance Director, PO Box 293, Pasco, WA 99301.
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Component Unit
Governmental Activities Business-type Activities Total
Pasco Public Facility
District
ASSETS
Current assets:
Cash and cash equivalents 75,291,158$ 34,926,339$ 110,217,497$ 9,049,511$
Restricted cash:
Customer deposits 590,189 817,061 1,407,250
Capital Development 959,850 20,318,261 21,278,111
Debt Service 2,341,329 6,158,732 8,500,061
Asset retirement reserve - 13,130 13,130
Self insured 2,388,350 - 2,388,350
Program, grant, donation 2,609,665 150,000 2,759,665
Permit and Plan Check 890,740 - 890,740
Unspent bond proceeds 22,232,083 20,538,729 42,770,812 42,854,852
Investments - unspent bond proceeds 9,938,542 - 9,938,542
Investments - Cemetery endowment 532,453 - 532,453
Investments 9,857,965 5,559,574 15,417,539
Inventories 131,519 645,703 777,222
Prepaid - 97,566 97,566
Receivables
Taxes 6,936,268 - 6,936,268 1,060,601
Customers (net of allowance)7,994,291 3,738,723 11,733,014
Grants 4,282,428 2,144 4,284,572
Due from other governments 100,000 - 100,000
Loans - 15,520,242 15,520,242
Leases receivable 641,645 93,904 735,549
Internal Balances 2,028,860 (2,028,860) -
Total current assets 149,747,335 106,551,248 256,298,583 52,964,964
Noncurrent assets:
Restricted cash:
Debt covenants - 1,862,745 1,862,745
Cemetery endowment 69,212 - 69,212
Receivables:
Special assessment receivable 556,642 2,279,899 2,836,541
Rehab loan 717,696 - 717,696
Leases receivable 3,075,609 27,511 3,103,120
Net Pension Asset 20,603,506 1,046,542 21,650,048
Net OPEB Asset 4,995,712 -4,995,712
Joint Ventures 2,207,732 - 2,207,732
Capital assets not being depreciated:
Land 26,609,802 5,003,125 31,612,927 4,626,380
Construction work in progress 41,530,031 143,512,532 185,042,563 2,398,271
Capital assets net of accumulated depreciation:
Buildings and structures 58,283,507 58,844,026 117,127,533
Other improvements 9,916,331 497,739 10,414,070
Machinery and equipment 14,018,669 10,347,490 24,366,159
Infrastructure 225,134,240 159,559,394 384,693,634
Right to use leases 2,609,525 8,735,870 11,345,395
SBITA 616,732 - 616,732
Total noncurrent assets 410,944,946 391,716,873 802,661,819 7,024,651
Total assets 560,692,281 498,268,121 1,058,960,402 59,989,615
DEFERRED OUTFLOWS OF RESOURCES
Deferred Outflow - Pension Related 17,789,292 1,393,869 19,183,161
Deferred Outflow - Debt Refunding - 17,270 17,270
Total deferred outflows of resources 17,789,292 1,411,139 19,200,431 -
Total assets and deferred outflows of resources 578,481,573$ 499,679,260$ 1,078,160,833$ 59,989,615$
continued on next page
City of Pasco
Statement of Net Position
December 31, 2024
Primary Government
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Component Unit
Governmental Activities Business-type Activities Total
Pasco Public
Facility District
LIABILITIES
Current liabilities:
Accounts payable 10,964,538$ 6,605,294$ 17,569,832$ 674,689$
Leases 1,277,642 290,029 1,567,671
Other liabilities
Deposits payable from restricted assets 1,517,039 828,478 2,345,517
Accrued interest payable from restricted assets - 746,870 746,870
Compensated absences 3,853,250 272,425 4,125,675
Notes and loans payable 190,000 3,083,014 3,273,014
Bonds payable 2,074,358 23,553,785 25,628,143 2,997,460
Net Pension Liability 1,030,453 294,309 1,324,762
Unearned revenue 137,166 - 137,166
Unearned revenue-advance grant 3,897,369 - 3,897,369
SBITA 409,585 - 409,585
Total OPEB Liability 530,901 - 530,901
Total current liabilities 25,882,301 35,674,204 61,556,505 3,672,149
Noncurrent liabilities:
Compensated absences 337,528 85,612 423,140
Asset retirement obligation - 13,130 13,130
Notes & loans payable 2,831,000 106,570,839 109,401,839
Bonds payable 75,134,905 71,739,557 146,874,462 47,546,971
Leases 3,936,453 8,452,144 12,388,597
Net pension liability 484,919 138,499 623,418
Total OPEB Liability 5,709,901 - 5,709,901
SBITA 55,104 - 55,104
Total noncurrent liabilities 88,489,810 186,999,781 275,489,591 47,546,971
Total liabilities 114,372,111 222,673,985 337,046,096 51,219,120
DEFERRED INFLOWS OF RESOURCES
Deferred Inflow - Debt Refunding - 26,685 26,685
Deferred Inflow - leases 3,645,687 114,682 3,760,369
Deferred Inflow - OPEB related 543,956 - 543,956
Deferred Inflow - Other - 150,000 150,000
Deferred Inflow - Pension Related 7,651,107 414,586 8,065,693
Total deferred inflows of resources 11,840,750 705,953 12,546,703 -
Total liabilities and deferred inflows of resources 126,212,861 223,379,938 349,592,799 51,219,120
NET POSITION
Net investment in capital assets 324,258,081 192,643,224 516,901,305 (664,927)
Restricted for:
Capital improvement 32,170,625 20,318,261 52,488,886 42,854,852
Cemetery endowment (nonspendable)601,665 - 601,665
Culture and recreation 380,239 - 380,239
Debt repayment/ guarantee 2,341,329 7,287,738 9,629,067
Economic development 30,761 - 30,761
Litter and housing abatement 124,150 - 124,150
OPEB 4,995,712 - 4,995,712
Opioid and overdose response plan 638,513 - 638,513
Park development 4,527,961 - 4,527,961
Pensions 20,603,506 1,046,543 21,650,049
Permit and plan check fee 890,740 - 890,740
Program, grant, donations 1,971,151 - 1,971,151
State Law WAC 2,388,350 - 2,388,350
Streets and boulevards 5,247,820 - 5,247,820
Unrestricted 51,098,107 55,003,556 106,101,663 (33,419,430)
Total net position 452,268,710$ 276,299,322$ 728,568,032$ 8,770,495$
The notes to financial statements are an integral part of this statement.
City of Pasco
Statement of Net Position
December 31, 2024
Primary Government
Page 51
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Component Unit
Functions/Programs Expenses
Charges for
Services, Fines &
License
Operating Grants
and and
21,692,018$ 16,797,003$ 1,802,522$ -$ (3,092,493)$ -$ (3,092,493)$$
52,410,848 14,682,865 2,620,717 59,991 (35,047,275)- (35,047,275)
23,019,471 7,646,384 104,201 11,536,029 (3,732,857)- (3,732,857)
13,642,065 8,166,035 3,256,384 - (2,219,646)- (2,219,646)
10,725,115 3,181,489 22,829 311,183 (7,209,614)- (7,209,614)
2,532,541 --- (2,532,541)- (2,532,541)
Total governmental activities 124,022,058 50,473,776 7,806,653 11,907,203 (53,834,426)- (53,834,426)
13,686,520 16,139,276 40,094 2,168,360 - 4,661,210 4,661,210
2,937,909 2,156,132 - 300,653 - (481,124) (481,124)
11,682,202 11,775,058 - 3,026,482 - 3,119,338 3,119,338
5,662,615 6,036,830 --- 374,215 374,215
2,295,632 2,707,470 35,324 276,204 - 723,366 723,366
Total business-type activities 36,264,878 38,814,766 75,418 5,771,699 - 8,397,005 8,397,005
160,286,936$ 89,288,542$ 7,882,071$ 17,678,902$ (53,834,426) 8,397,005 (45,437,421)
1,760,855 ------
Total component unit 1,760,855 ------
13,224,729 - 13,224,729
29,688,687 - 29,688,687
13,909,346 - 13,909,346
3,279,273 - 3,279,273
11,317,012 2,060,457 13,377,469
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General Fund Ambulance ARPA Construction
Total
Nonmajor
Funds
Total Governmental
Funds
ASSETS
Cash and cash equivalents 21,831,160$ 4,505,999$3,338,561$ -$ $35,594,767 65,270,487$
Restricted Cash
Cemetery endowment - - - - 69,212 69,212
Customer deposits 564,771 - - - 985,268 1,550,039
Debt service - - - - 2,341,353 2,341,353
Permit and plan check 890,740 - - - - 890,740
Program, grant, donation 2,584,715 - - - 24,950 2,609,665
Unspent bond proceeds 22,232,083 - - - - 22,232,083
Investments 12,523,665 822,148 677,414 - 4,897,188 18,920,415
Inventory 131,519 - - - -131,519
Receivables:-
Taxes receivable 6,241,233 - - - 695,035 6,936,268
Customer (net of allowances)1,785,930 1,942,171 - - 3,698,052 7,426,153
Interfund loans - - - - 14,552 14,552
Due from other funds 568,138 - - - - 568,138
Grants 628,281 547,228 - 2,842,410 264,509 4,282,428
Leases 243,537 - - - 3,473,717 3,717,254
Loans - - - - 717,696 717,696
Special assessments - - - - 556,642 556,642
Due from other governments - - - - 100,000 100,000
Total assets 70,225,772 7,817,546 4,015,975 2,842,410 53,432,941 138,334,644
DEFERRED OUTFLOWS OF RESOURCES
Total assets and deferred outflows of resources 70,225,772 7,817,546 4,015,975 2,842,410 53,432,941 138,334,644
LIABILITIES
Accounts payable 4,229,009 551,591 118,606 3,907,687 1,266,025 10,072,918
Interfund loans payable LT - - - - 15,938 15,938
Pay from restricted assets - Deposits 564,771 - - - 985,268 1,550,039
Due to other funds - - - 292,273 275,865 568,138
Unearned revenue-advance grant - - 3,897,369 - - 3,897,369
Total liabilities 4,793,780 551,591 4,015,975 4,199,960 2,543,096 16,104,402
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - court receivables 811,855 - - - - 811,855
Unavailable revenue - debt refunding - - - - - -
Unavailable revenue - lease 228,065 - - - 3,417,622 3,645,687
Unavailable revenue - property taxes 198,695 - - - - 198,695
Unavailable revenue - special assessment - - - - 527,563 527,563
Unavailable revenue - Traffic impact fees - - - - 88,881 88,881
Unavailable revenue - Unavailable revenue 134,138 - - - 2,662,729 2,796,867
Total deferred inflows of resources 1,372,753 - - - 6,696,795 8,069,548
Total liabilities and deferred inflows of resources 6,166,533 551,591 4,015,975 4,199,960 9,239,891 24,173,950
FUND BALANCES (DEFICITS)
Nonspendable
Cemetery perpetual fund - - - - 601,665 601,665
Inventory 131,519 - - - - 131,519
Restricted
Construction projects 32,170,624 - - - 6,784,889 38,955,513
Culture and recreation 41,740 - - - 338,499 380,239
Economic development - - - - 30,761 30,761
Law enforcement 1,378,264 - - - - 1,378,264
Litter and housing abatement - - - - 124,150 124,150
Opioid and Overdose Response Plan 638,513 - - - - 638,513
Park development - - - - 4,527,961 4,527,961
Permit and plan chk fees 890,740 - - - - 890,740
Program, grant, donation 586,188 - - - - 586,188
Special assessment debt - - - - 2,416,247 2,416,247
Street and boulevard - - - - 5,247,820 5,247,820
Committed
Landfill claims 407,344 - - - - 407,344
Redflex - - - - 947,840 947,840
Special revenue funds - 7,265,955 - - 23,195,428 30,461,383
Assigned
Future projects 1,230,430 - - - - 1,230,430
Unassigned
Unassigned/Unrestricted 26,583,877 - - (1,357,550) (22,210) 25,204,117
Total fund balances (deficits)64,059,239 7,265,955 - (1,357,550) 44,193,050 114,160,694
Total liabilities and fund balances (deficits)70,225,772$ 7,817,546$4,015,975$ 2,842,410$53,432,941$ 138,334,644$
The notes to financial statements are an integral part of this statement.
City of Pasco
Balance Sheet
Governmental Funds
December 31, 2024
Page 53
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$ 114,160,694
Investment in joint venture 2,207,732
Net pension asset 20,603,506
Net OPEB asset 4,995,712
27,806,950
19,590,186
Internal payable representing charges in excess of cost to business-type
activates: current year
1,978,005
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General Fund Ambulance ARPA Construction
Total Nonmajor
Funds
Total Governmental
Funds
REVENUES
Taxes 56,234,596$ -$ -$ -$ 3,867,437$$
3,316,009 --- 309,442
5,044,169 3,988,336 1,477,164 11,110,231 3,408,371
10,169,772 8,918,495 - -8,139,883 27,228,150
Fines and forfeitures 1,429,116 --- 133,859
1,204,076 1,279 214,748 - 1,341,523
1,904,916 3,520 - 45,045 282,500
Total revenues 79,302,654 12,911,630 1,691,912 11,155,276 17,483,015
16,621,154 - - - 21,771
37,786,300 13,068,016 - 2,849 -
3,704,961 -- 65,097 2,873,318
5,397,679 - 163,184 4,978 8,492,636
8,976,881 --898 765,124
1,887,323 16,159 - - 317,426
3,341,479 63,583 - - 267,850
537,360 -- 307,713 -
148,170 555,083 - 847,300 -
- - -30,461,210 -
159,353 --- 653,665
136,242 -- 2,917,484 -
Total expenditures 78,696,902 13,702,841 163,184 34,607,529 13,391,790
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$27,434,735
Proceeds from issuance of bonds (35,615,000)
Capitalization of bond premium on bond issuance (3,699,712)
Discount on bond issuance 311,636
Amortization of premiums/discounts 200,203
Principal repayment 1,460,000
(37,342,873)
Change in earned revenue reported as deferred inflows in the fund statements 2,354,739
Change in the City's investment in joint ventures 617,946
Change in the City's net pension liability 333,476
Change in the City's net pension asset 2,239,836
Change in the City's net pension related deferred outflows 4,420,963
Change in the City's net pension related deferred inflows 291,695
Change in the City's net pension related deferred inflows 1,627,350
Prior period for net pension deferred inflows (100,516)
Change in deferred inflow - leases (lessor)355,764
Change in lease liability (623,035)
Change in SBITA liability (926,409)
Change in the City's net OPEB obligation (445,609)
Change in the City's OPEB asset 831,385
Change in the City's OPEB deferred inflows 352,819
Change in compensated absences 193,383
11,523,787
Change in net position 1,978,005
1,978,005
Depreciation (18,637,059)
Capital outlays 37,709,139
Donated infrastructure 699,921
Disposal/Sale of capital assets, including loss/gain on disposal (98,306)
Right to use - leases 533,844
Amortization of leases (4,634,024)
SBITA asset 1,335,392
Page 56
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2023/2024 Biennial Budget Amounts
Page 57
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Original Final
2023-2024
Actuals
Variance to Final
Budget Over
(under)
REVENUES
Intergovernmental 402,712$ 402,712$ 7,924,189$7,521,477$
Investment Income 20,000 20,000 474,560 454,560
Total revenues 422,712 422,712 8,398,749 7,976,037
EXPENDITURES
Current:
Natural & Economic 102,711 102,711 234,411 131,700
Total expenditures 102,711 102,711 234,411 131,700
Excess (deficiency) of revenues over expenditures 320,001 320,001 8,164,338 7,844,337
OTHER FINANCING SOURCES (USES)
Transfers out (300,000) (10,287,184) (8,277,776) (2,009,408)
Total other financing sources (uses)(300,000) (10,287,184) (8,277,776) (2,009,408)
Net change in fund balances 20,001 (9,967,183) (113,438) 5,834,929
Fund balances - beginning 35,000 35,000 113,438 78,438
Fund balances - ending 55,001$(9,932,183)$ -$5,913,367$
The notes to financial statements are an integral part of this statement.
City of Pasco
Statement of Revenues, Expenditures and Changes in Fund Balances - Budget to Actual
ARPA Fund
For the Year Ended December 31, 2024
2023/2024 Biennial Budget Amounts
Page 58
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Original Final
2023-2024
Actuals
Variance to Final
Budget Over
(under)
REVENUES
Investment income 1,300$ 1,300$ 2,560$ 1,260$
Intergovernmental 8,983,655 8,983,655 7,047,612 (1,936,043)
Charges for service 15,526,355 16,276,355 17,042,221 765,866
Miscellaneous 15,972 15,972 47,446 31,474
Total revenues 24,527,282 25,277,282 24,139,839 (1,137,443)
EXPENDITURES
Current:
Public Safety 24,794,609 26,094,609 25,451,384 (643,225)
Capital outlay:
Public Safety 217,000 217,000 670,328 453,328
Total expenditures 25,011,609 26,311,609 26,121,712 (189,897)
Excess (deficiency) of revenues over expenditures (484,327) (1,034,327) (1,981,873) (947,546)
OTHER FINANCING SOURCES (USES)
Sale of Asset 33,717 33,717
Rent & leases 38,000 38,000 29,791 (8,209)
Transfers in 1,140,000 1,140,000 1,125,620 (14,380)
Insurance recoveries - - 91,209 91,209
Total other financing sources (uses)1,178,000 1,178,000 1,280,337 102,337
Net change in fund balances 693,673 143,673 (701,536) (845,209)
Fund balances - beginning 5,745,545 7,296,121 7,901,889 605,768
Prior Period adjustment - - 65,602 65,602
Fund balances - ending 6,439,218$ 7,439,794$ 7,265,955$(173,839)$
The notes to financial statements are an integral part of this statement.
Statement of Revenues, Expenditures and Changes in Fund Balances - Budget to Actual
Ambulance
For the Year Ended December 31, 2024
2023/2024 Biennial Budget Amounts
Page 59
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Governmental Activities
Total Enterprise Funds Internal Service Funds
ASSETS
Current assets:
Cash and cash equivalents 28,450,908$ 16,496,078$
Restricted cash:
Customer deposits 967,061 -
Capital development 20,318,261 -
Unspent bond proceeds 20,538,729 -
Debt service 6,158,732 -
Asset retirement obligation 13,130 -
Self insured reserve - 2,388,350
Investments 4,558,373 2,409,747
Inventory 645,703 -
Prepaid 97,566 -
Receivables:
Customer (net of allowances) 3,738,723 -
Grants 2,144 -
Loans 15,520,242 -
Lease receivable ST 93,904 -
Interfund loans - 2,028,860
Total current assets 101,103,476 23,323,035
Noncurrent assets:
Restricted cash:
Debt covenants 1,862,745 -
Receivables:
Special assessments 2,279,899 -
Lease receivable LT 27,511 -
Net pension asset 1,046,542 110,915
Capital assets not being depreciated:
Land 5,003,125 -
Construction in progress 143,512,532 -
Capital assets net of accumulated depreciation:
Buildings and structures 58,844,026 -
Other improvements 497,739 -
Machinery and equipment 7,094,554 9,123,203
Infrastructure 159,559,394 -
Right to use leases 8,735,870 -
Total noncurrent assets 388,463,937 9,234,118
Total assets 489,567,413 32,557,153
DEFERRED OUTFLOWS OF RESOURCES
Pension related 1,393,869 147,725
Debt refunding 17,270 -
Total deferred outflows of resources 1,411,139 147,725
Total assets and deferred outflows of resources 490,978,552 32,704,878
continued on next page
Business-type Activities
City of Pasco
Statement of Net Position
Proprietary Funds
December 31, 2024
Page 60
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Governmental Activities
Total Enterprise Funds Internal Service Funds
LIABILITIES
Current liabilities:
Accounts payable 5,968,870
290,029
828,478
746,870
272,425
3,083,014
294,309
23,553,785
215,880
Total current liabilities 35,253,660
85,612
13,130
1,812,980
106,570,839
71,739,557
8,452,144
138,499
Total noncurrent liabilities 188,812,761
Total liabilities 224,066,421
114,682
26,685
414,586
150,000
Total deferred inflows of resources 705,953
Total liabilities and deferred inflows of resources 224,772,374
189,390,288
20,318,261
7,287,738
1,046,543
-
48,163,348
Total net position 266,206,178
10,093,144
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Governmental
Activities
Water/Sewer
Utility
Internal Service
Funds
OPERATING REVENUES
Licenses and permits 258,590$ -$
Charges for service 38,814,766 13,591,559
Total operating revenues 39,073,356 13,591,559
OPERATING EXPENSES
Depreciation 7,556,633 1,323,973
Salaries and wages 6,224,553 797,777
Personnel benefits 1,725,498 277,575
Supplies 2,287,690 1,264,598
Services 14,139,914 8,555,412
Total operating expenses 31,934,288 12,219,335
Operating income (loss) 7,139,068 1,372,224
NONOPERATING REVENUES (EXPENSES)
Investment income 1,482,404 970,386
Fines and forfeitures 181,195 -
Miscellaneous 30,223 381,230
Rents and leases 88,750 -
Intergovernmental grants 75,418 -
Insurance recoveries 19,296 -
Sale of Asset - 4,200
Gain (loss) on disposal - (66,052)
Debt issue costs (178,951) -
Interest on long term debt (4,850,003) -
Total nonoperating revenues (expenses) (3,151,668) 1,289,764
Income (loss) before contributions and transfers 3,987,400 2,661,988
Capital development 5,771,699 14,380
Transfers in 559,160 -
Transfers out (1,787,080) -
Change in net position 8,531,179 -
Total net position - beginning 255,351,560 28,984,967
Prior Period Adjustment 2,323,439 -
Total net position - ending 266,206,178$ 31,661,335$
Business-type
Activities
The notes to financial statements are an integral part of this statement.
City of Pasco
Statement of Revenues, Expenses, and Changes in Net Position
Proprietary Funds
December 31, 2024
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Governmental Activities
Total Enterprise Funds Internal Service Funds
CASH FLOWS FROM OPERATING ACTIVITIES
Cash receipts from customers 36,388,313$13,591,559$
Payments to employees (8,423,828)(1,093,526)
Payments to suppliers (22,300,928)(9,591,054)
Net cash provided (used) by operating activities 5,663,557 2,906,979
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Fees and penalties 181,195 -
Insurance recoveries 19,296 -
Rents and leases 88,750 -
Miscellaneous 30,223 381,229
Operating grants 75,418 -
Prior period adjustment 2,323,437 -
Net cash provided (used) by noncapital financing activities 2,718,319 381,229
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES
Sale of asset -4,200
Capital grants and contributions proceeds 905,593 -
Loan proceeds 50,077,991 -
Bond procceeds received 20,388,182 -
Capital Charges 3,690,191 -
Transfers in (out) for capital (1,227,920)-
Interest paid on capital debt (5,028,954)-
Principal paid on capital debt (5,201,431)-
Acquisition and construciton for capital assets (61,188,861)(2,265,998)
Interfund Loan (257,891)257,891
Net cash provided (used) by capital and related financing activities 2,156,900 (2,003,907)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest on investments 1,482,405 970,386
Purchase of investments (3,333,434)(1,839,311)
Net cash provided (used) by investing activities (1,851,029)(868,925)
Net increase (decrease) in cash and cash equivalents 8,687,747 415,376
Balances - beginning of year 69,621,819 18,469,052
Balances - end of the year 78,309,566 18,884,428
Cash 78,309,566 18,884,428
Total Cash 78,309,566 18,884,428
Reconciliation of operating income (loss) to net cash provided (used) by operating activities:
Operating Income 7,139,068 1,372,224
Adjustments to reconcile operating income (loss) to net cash provided (used) by operating
activities:
Depreciation 7,556,633 1,323,973
Changes in assets and liabilities:
(Increase) decrease in customer Receivables (175,206)-
(Increase) decrease in prepaid (97,566)-
(Increase) decrease in Inventory (223,117)-
(Increase) decrease in accounts Payable - Supplier (5,911,026)228,952
(Increase) decrease in retainage Payable (318,204)-
(Increase) decrease in accounts payable closure cost 2,298 -
(Increase) decrease in salaries & benefits payable 160,548 17,812
(Increase) decrease in interest payable 340,168 -
(Increase) decrease in accounts customer deposits payble 205,959 -
(Increase) decrease in compensated absences (45,962)26,823
(Increase) decrease in deferred outflow pension (161,256)(17,646)
(Increase) decrease in deferred outflows- debt refunding 4,409 -
(Increase) decrease in pension liability (225,420)(23,593)
(Increase) decrease in pension asset 477,531 49,922
(Increase) decrease in deferred inflow- debt refunding (8,895)-
(Increase) decrease in deferred inflow lease (97,299)-
(Increase) decrease in deferred inflow - unavailable revenue (2,279,899)-
(Increase) decrease in deferred inflow - pension (679,216)(71,491)
Net cash provided (used) by operating activities 5,663,548 2,906,976
Noncash investing, capital and financing activities
Contribution of capital assets 1,532,960 14,380
Total noncash investing, capital and financing activities 1,532,960$ 14,380$
Business-type Activities -
The notes to financial statements are an integral part of this statement.
City of Pasco
Statement of Cash Flows
Proprietary Funds
December 31, 2024
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Pension (and Other
Post-Employment
Benefits) Funds Custodial Funds
ASSETS
Cash and cash equivalents 919,035 51,701,815
Receivables:
Other governments -64,419
Special Assessments 1,386
Taxes for other governments - 1,060,600
Investments at fair value:
Federal Agency 1,826
Mutual Funds 9,993,485
Total assets 10,915,732 52,826,834
LIABILITIES
Accounts payable - 773,693
Total liabilities - 773,693
NET POSITION
Restricted for
Other governments 52,053,141
Pensions 5,467,055 -
Postemployment benefits other than pensions 5,448,677 -
Total net position 10,915,732$ 52,053,141$
The notes to the financial statements are an intergral part of this statement
City of Pasco
6WDWHPHQWRIFiduciary1HW3RVLWLRQ
December 31, 2024
Pension and
Other Post-
Employmnent
Benefits Custodial Funds
ADDITIONS
Tax collections for other governments 138,235$ 6,362,069$
Fees collected on behalf other agency - 514,728
Intergovernmental grants and other payments 1,424,757
Amounts collected on behalf other agency - 50,544,431
Investment income 1,678,601
Interest and dividends 152,508
Total additions 1,969,344 58,845,985
DEDUCTIONS
Pension benefits paid to beneficiaries 83,047
Medical premiums for retirees 86,081
Tax collections remitted to other governments - 980,372
Fees remitted to other goverments - 514,728
Payments made on behalf of other government 16,087 9,513,047
Total deductions 185,215 11,008,147
Net increase (decrease) in fiduciary net position 1,784,129 47,837,838
Net Position -- beginning of the year 9,131,603 4,215,303
Net Position -- end of the year 10,915,732$ 52,053,141$
The notes to the financial statements are an intergral part of this statement
City of Pasco
Statement of Changes in Fiduciary Net Position
For the Year Ended December 31, 2024
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NOTES TO THE FINANCIAL STATEMENTS
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the City of Pasco have been prepared in conformity with generally
accepted accounting principles (GAAP) as applied to governmental units. The Governmental
Accounting Standards Board (GASB) is the accepted standard setting body for establishing
governmental accounting and financial reporting principles. The significant accounting policies
are described below.
A. Reporting Entity
The City of Pasco was incorporated on May 4, 1891, and operates under the laws of the state
of Washington applicable to a Non-Charter Code City with a Council/Manager form of
government. As required by the generally accepted accounting principles the financial
statements present City of Pasco as a primary government unit. The component unit discussed
below is included in the City reporting entity because of the significance of its operational
relationship with the City of Pasco.
The Pasco Public Facility district (PPFD) was created in 2002 pursuant to Chapter 35.57 of the
Revised Code of Washington for the purposes of acquiring, constructing, operating, and
financing one or more regional centers through cooperative and joint ventures with the City of
Kennewick. The PFD is discreetly presented in the component unit column in the government-
wide financial statements to emphasize that is a legally separate entity.
Complete separate financial statements for the district may be obtained from the City of Pasco,
P.O. Box 293, Pasco, WA 99301.
B. Basis of Presentation - Government-Wide and Fund Financial Statements
The government-wide financial statements (i.e., the statement of net position and the statement
of activities) report information on all of the non-fiduciary activities of the primary government
and its component unit. For the most part, the effect of inter-fund 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 service.
The statement of activities demonstrates the degree to which the direct expenses of a given
function or segment is offset by program revenues. Direct expenses are those that are clearly
identifiable with a specific function or segment. Our policy is to allocate indirect costs to a
specific function or segment. 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 and 2) grants and contributions that are restricted to meeting the
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operational or capital requirements or a particular function or segment. Taxes and other items
not properly included among program revenues are reported instead as general revenues.
As a general rule the effect of the inter-fund activity has been eliminated from the government–
wide financial statements. Exceptions to this rule include business taxes the utilities pays to
the general fund, internal service fund activities in which outside parties are engaged and
certain other service functions between funds, that if eliminated may misrepresent the cost
reported for various other functions of the government.
Separate fund financial statements are provided for governmental funds, proprietary funds, and
fiduciary funds. Major individual governmental funds and major individual enterprise funds
are reported as separate columns in the fund financial statements.
The City of Pasco reports the following major governmental funds:
x The General Fund:The General (or current expense) Fund is the City of Pasco’s primary
operating fund. It accounts for all financial resources of the general government, except those
required or elected to be accounted for in separate fund.
x The Construction Fund:The Construction Fund is a capital project fund used to account for
significant construction and capital acquisition related to governmental activities.
x ARPA Fund: The ARPA fund is a special revenue fund used to account for all activities related
to the Federal funds received for the Coronavirus State and Local Fiscal Recovery Funds under
the American Rescue Plan Act of 2021. This includes subrecipient grants issued by the City and
City use of the funds.
x Ambulance Services Fund:Fund is used to account for all activities related to providing medical
services, including ambulance transports to the residents of the City. Revenues sources generated
from Federal assistance through the Ground Emergency Medical Transportation Payment
program, service fees and ambulance utility rates.
The City of Pasco reports the following major proprietary fund:
x The Water/Sewer Fund:The Water/Sewer Fund accounts for water, sewer, water reuse, storm
water and irrigation utilities activities.
Additionally, the City of Pasco reports the following fund types:
x Special Revenue funds are used to account for specific revenue sources that are restricted,
committed, or assigned to expenditures for a particular purpose.
x Debt Services funds are used to account for the resources accumulated and payments made for
principal and interest on long–term general obligation debt of governmental funds. These funds
include the Local Improvement Districts (LID) Guarantee fund which provides financial security
for outstanding LID bonds.
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x Permanent funds are used to report resources that are legally restricted to the extent that only
earnings, not principal, may be used for purposes of supporting a specific City program. The
City has one permanent fund, Cemetery Perpetual Care Fund.
x Internal Service funds are used to account for equipment replacement and operations, central
stores, as well as medical/dental insurance services provided to other departments on a cost-
reimbursement basis.
x Pension & OPEB Trust funds are used to account for the sources and uses of funds to meet the
pension benefit and other post-employment benefit obligations made to firemen covered under
the Plan prior to the creation of the Law Enforcement Officers and Fire Fighters’ (LEOFF)
pension system in 1970.
x Custodial funds are used to report resources held by the city in a purely custodial capacity on
behalf of the State Administrative Office of the Courts, Animal Control Authority and Pasco
Public Facility District.
C. Measurement Focus, Basis of Accounting
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. 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.
Governmental fund financial statements are reported using the current financial resources
measurement focus and the modified accrual basis of accounting.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 60 days of the end of the current fiscal period. The City considers
property taxes as available if they are collected within 60 days after year end. Expenditures
generally are recorded when a liability is incurred under accrual accounting. However, debt
service expenditures, as well as expenditures related to compensated absences, claims and
judgements are recorded only when payment is due.
Property taxes, licenses, and associated interest within the current period are all considered to
be susceptible to accrual and have so been recognized as revenues of the current period. Only
the portion of a special assessment receivable due within the current fiscal period is considered
to be susceptible to accrual as revenue of the current period. All other revenue items are
considered to be measurable and available only when cash is received by the City.
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Proprietary fund financial statements are reported using the economic resources measurement
focus and full-accrual basis of accounting. Revenues are recorded when earned and expenses
are recorded when a liability is incurred regardless of the timing of the cash flows. Proprietary
funds distinguish operating revenues and expenses from non-operating items. Operating
revenues and expenses generally result from providing services, producing, and delivering
goods in connection with a proprietary fund’s principal ongoing operations. The principal
operating revenues of the Water/Sewer Fund are charges to customers. The major services
provided by the proprietary fund are water, sewer, storm drain, irrigation and industrial
wastewater processing. Operating expenses for enterprise funds and internal service funds
include the cost of sales, services and administrative expenses, and depreciation on capital
assets. All revenues and expenses not meeting this definition are reported as non-operating
revenues and expenses.
D. Budgetary Information
Scope of Budget
Biennial appropriated budgets are adopted for the general fund and special revenue funds on a
modified accrual basis. Budgets for debt service and capital project funds are adopted at the level
of the individual debt issue or project and for fiscal periods that correspond to the lives of debt
issues or project and for fiscal periods that correspond to the lives of debt issues or projects. The
City also adopts appropriated budgets for proprietary and internal service funds as “management
budgets”. All budgets are adopted at the fund level.
Appropriations for all funds lapse at the end of the biennium. Budgets for capital outlays are
re-appropriated until the purpose of the appropriation has been accomplished or abandoned.
Amending the Budget
The City Manager is authorized to transfer budgeted amounts within the funds. However, any
revisions that alter the total appropriations of a fund, or which affects the number of authorized
employee positions, salary ranges, or other conditions of employment must be approved by the
City Council.
When City Council determines it is in the best interest of the City of Pasco to increase or
decrease the appropriation for a particular fund, it may do so by ordinance approved by one
more than the majority after holding public hearing(s).
The budget amounts shown in the financial statements are the final authorized amounts as
revised during the year.
The financial statements contain the original and final budget information. The original budget
is the first complete appropriated budget. The final budget is the original budget adjusted by all
reserves, transfers, allocations, supplemental appropriations, and other legally authorized
changes applicable for the fiscal year.
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Excess of Expenditures over Appropriations
Neither the General Fund, nor any major special revenue funds, reported expenditures in excess
of budgeted appropriation. The Cemetery Fund, a non-major special revenue fund reported
expenditures in excess of budget in the amount of $20,376 due to costs associated with services
provided at year-end.
Deficit Fund Balance
The Construction Fund, a major capital improvement fund of the City, ended the year with a
negative fund balance of ($1,357,549). The negative fund balance is a result of project spending
that outpaced funding in the current period. Available support is being identified based on
reallocation during capital improvement plan analysis and pending increases to grant awards.
MLK Center fund, a non-major special revenue fund ended the year with a negative fund balance
of ($27,337). The negative fund balance is due to reduction in long-standing grant revenue for
staffing. Similarly, the Senior Center fund, a non-major special revenue fund ended the year
with a negative fund balance of ($1,791). The same long-standing grant revenue reduction
impacted the Senior Center.
E. Assets, Liabilities, Deferred Inflows, Deferred Outflows, Fund Balance/Net Position
1.Cash and Cash Equivalents
It is the City’s policy to invest temporary cash surpluses. As of December 31, 2024, the City
had invested $101,181,420 with the Washington State Local Government Investment Pool
(LGIP). These investments are short-term investments of residual cash. This amount is
classified on the Statement of Net Position as cash and cash equivalents. The interest earned
on these investments is prorated to the various funds based upon their ownership of invested
cash.
For purposes of the statement of cash flows, the City considers all highly liquid investments
(including restricted assets) with a maturity of three months or less when purchased to be cash
equivalents.
2.Investments (See Note 3, Deposits and Investments)
3.Receivables
Tax receivables consist of property taxes, sales taxes, business and occupation taxes, gambling
taxes and excise taxes. Property taxes are levied January 1 on property values assessed as of
December of the prior year. The tax levy is divided into two billings with the first billing due
April 30 and the second is due October 31. Detailed information on property tax can be found
in Note 4.
Special assessments are levied against certain property owners when their property is the
beneficiary of a city managed project. Based upon each property’s proportional share of the
improvement an assessment is levied. When levied a receivable is recorded. Special
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assessments receivable consists of current assessments, plus any delinquent assessments along
with related interest and penalties. As of December 31, 2024, $34,068 of special assessments
receivable were delinquent.
Customer accounts receivables consist of amounts owed from private individuals or
organizations for goods and services, including amounts owed for which billings have not been
prepared. Uncollectible amounts, except in two instances, are considered immaterial and the
direct write-off method is used. The exceptions are in the ambulance fund and revolving
abatement fund. An allowance is calculated based on historical write-offs. The total allowance
recorded city wide as of December 31, 2024, is $216,546.
Other receivables include municipal court receivables related to legal fines and charges and
amounts due the City related to organizations or public entities with which the City has entered
contractual relationships. The municipal court receivable is $10,891,893.18 of which
$10,079,211.91 is not expected to be collected. Only the net receivable of $812,681.27 is
recorded in the financial statements. The portion that is calculated as uncollectible is based
upon the year’s collection rate. Contract based receivables are the result of City provision of
working or revolving funds and revenues that the City had not received as of year-end 2024.
4.Amounts Due to and from Other funds, Inter-fund Loans and Advances Receivable
Activities between funds that are representative of lending/borrowing arrangements
outstanding at the end of the fiscal year are referred to as either inter-fund loans
receivable/payable or advances to/from other funds. All other outstanding balances between
funds are reported as due to/from other funds. Any residual balances outstanding between the
governmental activities and business-type activities are reported in the government-wide
financial statements as internal balances. A separate schedule of inter-fund loans receivable
and payable is furnished in Note 6,Inter-fund Balances and Transfers.
Advances between funds, as reported in the fund financial statements, are offset by a fund
balance reserve account in applicable governmental funds to indicate that they are not
available for appropriation and are not expendable available financial resources.
5.Inventories
Inventories in governmental funds consist of expendable supplies held for consumption. The
cost is recorded as an expenditure at the time of purchase. In the governmental funds, there are
inventories related to parks and recreation materials and supplies. Inventories in proprietary
funds consist of materials and supplies used in both maintenance and capital activities.
Inventories in proprietary funds are valued using a last in first out (LIFO) method.
6.Restricted Assets and Liabilities
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In accordance with utility bond ordinances, state law, or other agreements, separate restricted
assets have been established. These accounts contain resources for construction and debt
service, including current and delinquent special assessments receivable, in enterprise funds.
The current portion of related liabilities is shown as Payables from Current Restricted Assets.
Specific debt service reserve requirements are described in Note 8, Long-Term Debt.
The restricted assets of the governmental activities are composed of the following:
The restricted assets of the business type activities are composed of the following:
7. Capital Assets
Capital assets, which include leases, property, plant, and equipment and infrastructure assets,
are reported in the applicable governmental or business-type columns in the government-wide
financial statements. Capital assets, other than infrastructure, are defined by the city as assets
with an initial individual cost of more than $5,000 and an estimated useful life in excess of
two years. Useful life estimates are periodically reassessed and adjusted based on actual
experience and/or asset condition assessments. See Note 5, Capital Assets and CWIP for
details on changes to useful life and depreciation. Such assets are recorded at historical cost
or estimated historical cost if purchased or constructed. Donated capital assets are recorded at
acquisition value at the date of donation.
The city reports infrastructure assets on a network and subsystem basis. Such assets are
recorded at historical cost if purchased or constructed. Additions, improvements and other
capital outlays that significantly extend the useful life of an asset are capitalized. The cost of
normal maintenance and repairs and street preservation activities that do not add to the value
of the asset or materially extend asset lives are not capitalized. Assets are depreciated over
their useful lives using the straight-line depreciation method.
Restricted Assets and Liabilities -Governmental Funds
For Year Ending 2024
Restricted Assets and Liabilities - Enterprise Funds
For Year Ending 2024
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Major outlays for capital assets and improvements are reported as Construction Work in
Progress as projects are constructed. Interest, if material to the cost of the asset that is 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. Capital Assets and improvements are
capitalized once the project is completed.
Capitalization thresholds, the dollar value above which an asset acquisitions are added to the
capital asset accounts and estimated useful lives of capital assets are as follows:
8. Leases & SBITA’s
Lessee/SBITA:The city recognizes a lease/SBITA liability and an intangible right-to-use
lease/SBITA asset in the government-wide and proprietary fund financial statements. The city
recognizes lease/SBITA liabilities with an initial, individual value of $25,000 or more.
The lease/SBITA asset is amortized using the straight‐line basis over its useful life.
Governmental funds recognize a capital outlay and other financing source at the
commencement of a new lease/SBITA. Lease/SBITA payments in governmental funds are
reported as debt service principal and debt service interest expenditures.
The city uses the interest rate charged by the lessor/vendor as the discount rate. When the
interest rate charged by the lessor/vendor is not provided, the city generally uses its incremental
borrowing rate as the discount rate for leases.
Lessor:The city recognizes a lease receivable and a deferred inflow of resources in the
government‐wide and fund financial statements.
The deferred inflow of resources is recognized as revenue over the life of the lease term using
the straight‐line basis.
The city uses its estimated incremental borrowing rate as the discount rate for leases.
9. Deferred Outflows/Inflows of Resources
In addition to assets, the statement of financial position will sometimes report a separate section
for deferred outflows of resources. This separate financial statement element, deferred outflows
of resources, represents a consumption of net assets that applies to a future period(s) and so
will not be recognized as an outflow of resources (expense/expenditure) until then.
Assets
Useful Lives
(Years)
N/A
5-50
5-100
2-50
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In addition to liabilities, the statement of financial position will sometimes report a separate
section for deferred inflows of resources. This separate financial statement element, deferred
inflows of resources, represents an acquisition of net assets that applies to a future period(s)
and will not be recognized as an inflow of resources (revenue) until that time.
The city has one type of item, unavailable revenues,which arises only under a modified accrual
basis of accounting, which qualifies as a deferred inflow. Unavailable revenue is reported only
in the governmental funds balance sheet. The governmental funds report unavailable revenues
for 2024 as follows:
a. Uncollected property taxes levied.
b. Unbilled special assessments levied against benefited property for the cost of local
improvements. An allowance for uncollectible accounts is not necessary since the
assessments are liens against the property benefited.
c. Grant funds received in advance.
d. CDBG Loans Unbilled Principal.
e. Uncollected Municipal Court Fines outstanding.
f. Lease activity in which the City is the lessor.
In addition to unavailable revenues, changes in pension and OPEB assumptions and
calculation variables also create deferred inflows and deferred outflows. These are reported
in the enterprise funds and at the government wide level in the Statement of Net Position.
10. Compensated Absences
The city accrues accumulated unpaid vacation and sick leave and associated employee related
costs when earned (or estimated to be earned) by the employee. All vacation and sick pay is
accrued when incurred in the government-wide, proprietary, and fiduciary fund financial
statements. In governmental funds, such amounts are not accrued using the modified accrual
basis of accounting but are reported as a liability in the government-wide financial statements.
Non-Represented Employees/Directors/Managers
Sick leave may be accumulated up to a maximum of 960 hours for all employees except
firefighters and police. Upon resignation, retirement, or death; sick leave is payable at a rate of
25% of accrued hours up to a maximum accrual base of 720 hours. Vacation leave may be
accumulated up to a maximum of one and a half times the employee’s annual vacation accrual
rate and is payable upon resignation, retirement, or death.
Firefighters
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Sick leave may be accumulated up to a maximum of 1,440 hours. For firefighters with less than
20 years of service with the City, sick leave is payable at a rate of 25% of accrued hours up to
a maximum accrual base of 840 hours upon resignation, retirement, or death. For firefighters
with 20 years or more of service with the city, sick leave is payable at a rate of 50% of accrued
hours up to a maximum accrual base of 840 hours. Vacation leave may be accumulated up to a
maximum of two times the employee’s annual vacation accrual rate and is payable upon
resignation, retirement, or death.
Police
Sick leave may be accumulated up to a maximum of 1,200 hours. Upon resignation or death,
sick leave is payable at a rate of 25% of accrued hours up to a maximum accrual base of 720
hours. Upon retirement, sick leave is payable at a rate of 35% up to a maximum accrual base
of 1,200 hours. Vacation leave may be accumulated up to a maximum of two times the
employee’s annual vacation accrual rate and is payable upon resignation, retirement, or death.
Non-Uniformed Police
Sick leave may be accumulated up to a maximum of 960 hours. Upon resignation, retirement,
or death; sick leave is payable at a rate of 25% of accrued hours up to a maximum accrual base
of 720 hours. Vacation leave may be accumulated up to a maximum of two times the
employee’s annual vacation accrual rate and is payable upon resignation, retirement, or death.
Operating Engineers
Sick leave may be accumulated up to a maximum of 960 hours. Upon resignation, retirement,
or death; sick leave is payable at a rate of 25% of accrued hours up to a maximum accrual base
of 720 hours. Vacation leave may be accumulated up to a maximum of two times the
employee’s annual vacation accrual rate. Upon retirement from City service employees shall
receive payment for up to 328 hours of accumulated vacation. Any excess vacation must be
taken prior to the last day of employment. An employee who separates from City service for
other than retirement shall receive all accumulated vacation.
11. Pensions and OPEB
For purposes of measuring the net pension liability or asset, deferred outflows of resources and
deferred inflows of resources related to pensions, and pension expense, information about the
fiduciary net position of all state sponsored pension plans and additions to/deductions from
those plans’ fiduciary net position have been determined on the same basis as they are reported
by the Washington State Department of Retirement Systems. For this purpose, benefit
payments (including refunds of employee contributions) are recognized when due and payable
in accordance with the benefit terms. Investments are reported at fair value.
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For purposes of measuring the net pension liability, deferred outflows of resources and
deferred inflows of resources related to pension, and pension expense information about the
fiduciary net position of the City's Old Fireman’s' Pension Fund —610 (the Plan) and additions
to/deductions from the Plan's fiduciary net position have been determined on the same basis as
they are reported by the Plan. For this purpose, the Plan recognizes benefit payments when due
and payable in accordance with the benefit terms.
For purposes of measuring the total OPEB liability, deferred outflows of resources and
deferred inflows of resources related to OPEB, and OPEB expense information of the City’s
LEOFF 1 Retiree Health Plan (the Plan) have been determined on the same basis as they are
reported by the Plan. For this purpose, the Plan recognizes benefit payments when due and
payable in accordance with the benefit terms.
For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred
inflows of resources related to OPEB, and OPEB expense information about the fiduciary net
position of the City's Old Firemen’s Pension Fund (the Plan) and additions to/deductions from
the Plan's fiduciary net position have been determined on the same basis as they are reported
by the Plan. For this purpose, the Plan recognizes benefit payments when due and payable in
accordance with the benefit terms.
12. Long-term Debt
In the government-wide statements and proprietary fund types in the fund financial statements,
long-term debt and other long-term obligations are reported as liabilities in the applicable
governmental activities, business-type activities, or proprietary fund type statements of net
position.
Bond premiums and discounts when material, are deferred and amortized over the life of the
bonds using the effective interest method. Bonds payables are reported net of the applicable
bond premium or discount.
In the fund financial statements governmental fund types recognize bond premiums and
discounts, as well as bond issuance costs, during the current period. The face amount of debt
issued is reported as other financing sources. Premiums received on debt issuances are reported
as other financing sources. Issuance costs, whether withheld from actual debt proceeds
received or not, are reported as professional service costs.
13. Unearned Revenues
This account includes amounts recognized as receivables but not revenues in governmental
funds because the revenue recognition criteria have not been met. As of year-end 2024, the city
reported $3,897,369 in unearned revenue due to grant funds received in advance related to State
and Local Fiscal Recovery Funds authorized by the American Rescue Plan Act and awarded
by the US Department of Treasury.
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11. Fund Balance and Fund Flow Policies
Fund balance of governmental funds is reported in various categories based on the nature of
any limitations requiring the use of resources for specific purposes. The government itself can
establish limitations on the use of resources through either a commitment (committed fund
balance) or an assignment (assigned fund balance).
The committed fund balance classification includes amounts that can be used only for specific
purposes determined by formal action of the government’s highest level of decision-making
authority. The city council is the highest level of decision-making authority for the government
that can, by adoption of an ordinance prior to the end of the fiscal year, commit fund balance.
Once adopted, the limitation imposed by the ordinance remains in place until a similar action
is taken (the adoption of another ordinance) to remove or revise the limitation.
Amounts in the assigned fund balance classification are intended to be used by the government
for specific purposes but do not meet the criteria to be classified as committed.The council
may also assign fund balances, as it does when appropriating fund balances, to cover a gap
between estimated revenue and appropriations in the subsequent year’s appropriated budget.
Unlike commitments, assignments generally only exist temporarily. In other words, an
additional action does not normally have to be taken for the removal of an assignment.
Conversely, as discussed above, an additional action is essential to either remove or revise a
commitment.
The City has not adopted a specific flow of funds policy relating to the use of restricted and
unrestricted resources when both are available. Therefore, the statements are prepared using
the default option provided in GASB 54 which provides, that when both restricted and
unrestricted resources are available, restricted resources are used first. While the city has not
formally established a policy for its use of unrestricted fund balance amounts, committed
amounts would be reduced first, followed by assigned amounts, and then unassigned amounts
when expenditures are incurred for purposes for which amounts in any of these unrestricted
fund balance classifications could be used.
In the fund financial statements, governmental funds report restrictions of fund balance as
follows:
Nonspendable fund balance -includes amounts that are not in spendable form such as inventory
or are required to be maintained intact such as the principal of a permanent fund.
Restricted fund balance -includes amounts that can be spent only for the specific purpose
stipulated by external resource providers such as for grant providers, bondholders, higher levels
of government, or through enabling legislation.
Committed fund balance –includes amounts that can be used only for the specific purposes
determined by a formal action of the city council. Commitments may be changed or lifted only
by the city council taking the same formal action that imposed the constraint originally.
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Assigned fund balance –includes amounts intended to be used by the government for specific
purposes. Intent can be expressed by the governing body or by an official designated by the
governing body to which the governing body designates authority.
Unassigned fund balance - includes the residual classification for the General Fund and
includes all spendable amounts not contained in the other classifications. The General Fund is
the only governmental fund that reports a positive unassigned fund balance amount. In other
funds, the unassigned classification will be used only to report a deficit balance resulting from
overspending for specific purposes for which amounts had been restricted, committed, or
assigned.
F. Accounting and Reporting Change
For the year ended December 31, 2024, the City implemented guidance for the presentation
and disclosures of Accounting and Error Corrections, as required by the GASB Statement No.
100. Details are disclosed in Note 18 Accounting changes and error correction.
For the year ended December 31, 2024, the City implemented guidance for the presentation
and disclosure of liabilities related to compensated absences. These changes were in response
to the provisions of GASB Statement No. 101,Compensated Absences.
NOTE 2: Subscription Based IT Arrangements (SBITA)
For the year ended 12/31/2024, the financial statements include the adoption of GASB Statement
No. 96, Subscription-Based Information Technology Arrangements. The primary objective of this
statement is to enhance the relevance and consistency of information about governments'
subscription activities. This statement establishes a single model for subscription accounting based
on the principle that subscriptions are financings of the right to use an underlying asset. Under this
Statement, an organization is required to recognize a subscription liability and an intangible right-
to-use subscription asset. For additional information, refer to the disclosures below.
As of 12/31/2024, Pasco, WA had 22 active subscriptions. The subscriptions have payments that
range from $2,428 to $312,967 and interest rates that range from 2.3100% to 3.0183%. As of
12/31/2024, the total combined value of the subscription liability is $464,687, and the total
combined value of the short-term subscription liability is $409,585. The combined value of the
right to use asset, as of 12/31/2024 of $1,396,920 with accumulated amortization of $780,188 is
included within the Subscription Class activities table found below. The subscriptions had $0 of
Variable Payments and $0 of Other Payments, not included in the Subscription Liability, within
the Fiscal Year.
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Future principal and interest lease payments as of December 31, 2024, were as follows:
NOTE 3: DEPOSITS AND INVESTMENTS
Summary of Deposit and Investment Balances
Reconciliation of the City’s deposits and investment balances as of December 31, 2024, is as
follows:
Total Deposits 192,157,572 1,004,640
Investments 25,888,534 9,995,311
Total Investments 25,888,534 9,995,311
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Deposits
Custodial Credit Risk
Custodial credit risk for deposits is the risk that in the event of a failure of a depository financial
institution, the City would not be able to recover deposits or will not be able to recover collateral
securities that are in possession of an outside party. The City’s deposits and certificates of deposit
are mostly covered by federal depository insurance (FDIC) or by collateral held in a multiple
financial institution collateral pool administered by the Washington Public Deposit Protection
Commission (WPDPC). The FDIC insures the first $250,000 of the City’s deposits. The deposit
balances over $250,000 are insured by the WPDPC.
The City does not have a deposit policy for custodial credit risk beyond the requirements of state
statute. Washington State law restricts deposit of funds to financial institutions physically located
in Washington unless otherwise expressly permitted by statute and authorized by the WPDPC.
State statute permits additional amounts to be assessed on a pro rata basis to members of the
WPDPC pool in the unlikely event the pool’s collateral should be insufficient to cover a loss.
Investments
It is the City’s policy to invest all temporary cash surpluses. The interest on these investments is
prorated to the various funds. Investments are stated at fair value based on quoted market prices in
accordance with GASB Statement No. 72, Fair Value Measurement and Application. Accordingly,
the change in the fair-value of investment is recognized as an increase or decrease to the investment
assets and investment income. Interest income on investments is recognized in non-operating
revenue as earned. Changes in fair value of investments are recognized on the statements of
Revenues, Expenses, and Changes in Net Position. Investments are subject to the following risks.
Interest Rate Risk
Interest Rate Risk is the risk the City may face should interest rate variances affect the fair value
of investments. In accordance with its investment policy, the City manages its exposure to declines
in fair value by limiting the maturity of investments. To achieve its financial objective of
maintaining liquidity to meet all operating requirements, the City typically selects investments that
have shorter average maturities.
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The following table depicts Weighted Average Maturity (WAM) for all City investments with
maturities, by number of months. In addition to the interest rate risk disclosed below, the City
includes investments with fair value highly sensitive to interest rate changes.
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Credit Risk
Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its
obligations. State law and the City investment policy limit investments to those authorized by State
Statute. The City of Pasco holds investments in U.S. Government Agency Securities, the Local
Government Investment Pool (LGIP) and demand deposits at U.S. Bank. The investment policy
for “credit risk” does not extend beyond the types of authorized investments and the concentration
of credit risk described below. As of December 31, 2024, the City’s investments in agency
securities were all rated AAA. The LGIP is not rated and registered with the SEC and the fair value
of the city’s position in the pool is the same as the value of the pool shares. The LGIP is regulated
by the state of Washington’s state finance committee in accordance with RCW 43.250. Credit risk
is limited as most investments are either obligations of the U.S. Government, government
sponsored enterprises, insured demand deposit accounts or certificates of deposit.
Concentration of Credit Risk
Concentration of credit risk is the risk of loss attributed to the magnitude of a government’s
investment in a single issuer. It is the policy of the city to diversify its investment portfolio to
eliminate the risk of loss resulting from overconcentration of assets in a specific class of securities.
The table below identifies the types of investments, concentration of investments in any one issuer,
and maturities of the City's investment portfolio as of December 31, 2024.
ISSUER
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Local Government Investment Pool
The city is a participant in the Local Government Investment Pool, which was authorized by
Chapter 294, Laws of 1986, and is managed and operated by the Washington State Treasurer. The
State Finance Committee is the administrator of the statute that created the pool and adopts rules.
The State Treasurer is responsible for establishing the investment policy for the pool and reviews
the policy annually and proposed changes are reviewed by the LGIP advisory Committee.
The Office of the State Treasurer prepares a stand-alone LGIP financial report. A copy of the report
is available from the Office of the State Treasurer, PO Box 40200, Olympia, Washington 98504-
0200, online at http://www.tre.wa.gov.
Investments Reported as Cash Equivalents as of December 31, 2024
Amortized Cost Less than 1 Year
Local Government Investment Pool $101,181,420 $101,181,420
In addition to the City of Pasco investments presented in the series of tables following this section,
the City’s Old Fire Pension and Old Fire OPEB Funds report the following investments in their
Trust Funds:
Investments Measured at Fair Value
The City measures and reports investments at fair value using the valuation input hierarchy
established by Generally Accepted Accounting Principles (GAAP), as follows:
Level 1: Quoted prices in active markets for identical assets or liabilities.
Level 2: These are quoted market prices for similar assets or liabilities, quoted prices for
identical or similar assets or liabilities in markets that are not active, or other than
quoted prices that are not observable.
Level 3: Unobservable inputs for an asset or liability.
Safekeeping for the City’s investments is provided by U.S. Bank. U.S. Bank contracts with
Independent Directors Council (IDC) to provide fair market values of investments monthly. The
pricing methodology varies depending on multiple components, including if an investment is being
actively traded. In depth pricing methodology is available from IDC.
1,827$ 5.37%
4,614,305$ *Varies N/A
4,616,132$
FMV 12/31/24 Interest Rate
5,379,180 *Varies N/A
5,379,180
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As of December 31, 2024, the City had the following investments measured at fair value:
NOTE 4: PROPERTY TAXES
The county treasurer acts as an agent to collect property taxes levied in the county for all taxing
authorities. Collections are distributed by the 10th day of the following month.
Property taxes are recorded as a receivable and revenue when levied, offset by deferred revenue.
Property tax collected in advance of the fiscal year to which it applies is recorded as a deferred
inflow and recognized as revenue of the period to which it applies. No allowance for
uncollectible tax is established because delinquent taxes are considered fully collectible. Prior
year tax levies were recorded using the same principle and delinquent taxes are evaluated
annually. As of 12/31/24 delinquent taxes totaled $277,836.
The City may levy up to $3.60 per $1,000 of assessed valuation for general governmental services
subject to two limitations:
a. Chapter 84.55.010 of the Revised Code of Washington limits the growth of non-voted
property taxes to the lesser of 1% per year, or the Implicit Price Deflator. Adjustments
for new construction and annexations are excluded from this calculation.
b. The Washington State Constitution limits the total regular property taxes to one percent
of assessed valuation or $10 per $1,000 of value. If the taxes of all districts exceed this
amount, each is proportionately reduced until the total is at or below the one percent
limit.
Quoted Prices Active
Markets for Identical
Assets
Significant Other
Observable Inputs
Significant
Unobservable
Inputs
12/31/2024 (Level 1) (Level 2) (Level 3)
Investment by Fair Value Level
Total Investments in Statement of Net Position 25,888,534$
Fair Value Measurement
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The City’s regular levy for 2024 was $1.07978 per $1,000 on an assessed valuation of
$12,331,147,293. This resulted in a total regular levy of $13,314,947 for 2024. The City did not
levy any taxes for special levies in 2023. The City passed Ordinance 4618 on October 31, 2022 to
establish the Tax Increment Financing area resulting in $34,479 TIF property tax revenue for 2024.
NOTE 5: CAPITAL ASSETS AND CWIP
Capital asset activity for the year ended December 31, 2024, was as follows:
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Depreciation expense by function:
Construction commitments
The City of Pasco has active construction projects as of December 31, 2024. The projects include
street construction and various utility related projects. At year end,the city’s commitments with
contractors are as follows:
Business activities capital assets, net 321,571,293$ (48,846)$ 321,522,447$ 86,087,885$ 21,110,158$ 386,500,176$
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NOTE 6: INTER-FUND BALANCES AND TRANSFERS
Inter-fund loans
The composition of inter-fund loan balances as of December 31, 2024, are presented in the
following table. These loans are included in the fund financial statements but eliminated from the
government wide statement of net assets because they are internal borrowings. There are also one
day loans from the general fund totaling $568,138 for funds with negative cash at year end that are
classified as due from transactions on the balance sheet governmental funds. The composition of
due to and due from balances as of December 31, 2024, are presented in the following table.
CATEGORY PROJECT NAME SPENT TO DATE
Well Capacity Upgrades 521,366 76,681
Memorial Pool Bubble Cover 327,009 176,082
A Street Phase 1.5 301,563 67,182
30,663,440 1,824,446
WWTP Improvements Phase 1 18,335,864 33,851
WWTP Improvements Phase 2A 11,037,487 3,198,312
Lewis Street Overpass 28,263,396 922,623
City Wide Traffic Signal Improvements - Phase 2 4,153,644 493,646
2,202,421 434,896
Sylvester Street Safety Program (Improvements)3,170,662 45,258
6,929,494 469,465
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Inter-fund transfers
Transfers between funds during the year ended December 31, 2024, are as follows:
Transfers are used to 1) move unrestricted general fund revenues to finance various programs that
the government must account for in other funds in accordance with budgetary authorizations,
including amounts provided as subsidies or matching funds for various grant programs; 2) move
investment earnings or operating subsidies from one fund to its designated, authorized purpose
carried out by another fund; 3) move resources designated for construction to and from
construction funds as projects are created and/or completed.
There were one-time transfers for grant purpose between several special revenue funds, the general
fund, and the construction funds. There were on-going transfers to move grant support from the
Community Development Block Grant fund to the general fund for qualified grant activities, and
from the general fund to the ambulance fund.
NOTE 7: CHANGES IN LONG-TERM LIABILITIES
Changes in long-term liabilities - governmental.
The City liquidates most governmental debt service, leases, SBITA, pension and OPEB liabilities
from the General Fund. The only debt service not liquidated from the General Fund is debt related
to the Gesa Stadium improvements which is repaid from the Stadium Fund. Compensated absences
are mainly liquidated from General, Street and Ambulance funds. The fund for which the liability
is incurred is responsible for liquidating the liability. The average percentage of usage of
compensated absences varies significantly between governmental and business-type funds,
therefore the City uses a three-year average usage percentage for projecting compensated absences
due within one year. This method is the most accurate by following the current trend for each type
of funds. Internal service funds predominantly serve the governmental funds, and their long-term
liabilities are included as part of the totals for governmental activities.
TRANSFER FROM
TR
A
N
S
F
E
R
T
O
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The table below reflects the change in Long-Term Liabilities for Governmental activities for
year ended December 31, 2024.
Changes in long-term liabilities –business-type.
All business-type funds liquidate their own compensated absences, judgements, and claims.
The table below reflects the change in Long-Term Liabilities for Business-Type activities for year
ended December 31, 2024.
NOTE 8: LONG TERM DEBT
The City issues general obligation bonds to finance capital improvements such as street projects,
softball fields, library improvements, police station and other municipal facilities. Bonded
indebtedness has also been entered into in prior years to advance refund several general obligation
and revenue bonds. General obligation bonds have been issued for both general government and
business-type activities and are being repaid for the applicable resources. Revenue bonds are
issued to finance capital facilities, facility improvements and equipment purchases for the City’s
GOVERNMENTAL ACTIVITIES Beginning Balance
01/01/2024 Additions Reductions
34,665,000$ 35,615,000$ (1,270,000)$ 69,010,000$ $
4,699,754 3,699,712 (200,203)8,199,263
39,364,754 39,314,712 (1,470,203)77,209,263
3,211,000 -(190,000)3,021,000
3,997,395 3,517,984 (3,324,601)4,190,778
5,837,130 593,333 (1,216,367)5,214,096
1,391,098 195,650 (1,122,059)464,689
6,686,411 -(445,609)6,240,802
1,848,848 (333,477)1,515,371
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utilities. Governmental debt is considered obligations of the general government and is repaid with
general governmental resources. Proprietary fund revenues are used to repay revenue and
refunding bonds as well as certain loans to proprietary funds.
Governmental Debt
The City’s outstanding general obligation bonds are comprised of a 2015 bond issue that funded
the construction of a new police station and a 2019 bond issue to fund the construction of two fire
stations, improvements to the Gesa Stadium and the City’s contribution the construction of the
Tri-City Animal Shelter. There was a bond issue in 2023 for the purpose of an annex building to
the Tri-City Animal Shelter, City pool improvements, City Hall improvements and additional
improvements to the Gesa Stadium. A Public Safety Sales tax of three-tenths of one percent,
implemented in 2012 was identified as the source of repayment of the 2015 bond. A bond was
issued in 2024 for transportation improvements in the Tax Increment Financing Area. Property tax
revenues associated with this area is a source or repayment for this bond. These issues are repaid
from the General Fund, except for the Gesa Stadium bond which is repaid from the Stadium Fund.
During 2021, the City received a loan from the U.S. Department of Housing and Urban
Development (HUD) for the Peanuts Park Restoration Project. This loan will be repaid from HUD
CDBG annual grant allocations.
General obligation bonds outstanding as of December 31, 2024, are as follows:
The annual debt service requirements to maturity for general obligation bonds and loans is
presented in the following table.
GOVERNMENTAL DEBT - BONDS
Total Governmental Debt
GOVERNMENTAL DEBT -LOANS
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Business-Type Debt
In 2024, the City’s Water/Sewer utility continued the construction of projects supported by a 2023
revenue bond, the City refunded 2 bonds and issued $10.2 million revenue bond for Reuse Facility
improvements and issued $21.37 million revenue bonds for Water, Irrigation and Storm projects.
In 2024 the City received a Public Works board loan for Butterfield Water Treatment Plant
improvements in the amount of 850k.
The City is also liable for a total of two Public Works board for Butterfield; and Seven Department
of Ecology loans four for Sewer Treatment Plant improvements, three for Reuse Facility for
improvements, four Drinking Water Loans one for the Columbia Water Supply Project was
completed in 2018, one for Butterfield Water Treatment Plant and one West Pasco Water
Treatment plant and one for Water Reservoir Storage tank Zone 3; One CERB for Reuse Facility
improvements. The City is also liable for a local loan from the Hanford Area Economic Investment
Fund Advisory Committee (HAEIFAC) for improvements for the Reuse Facility.
In 2024, the City’s outstanding debt related to business-type activities $181,038,053.
As of December 31, 2024, investments in the proprietary funds in the amount of $4,558,372 and
shrinking restricted cash $20,538,728 in reserves as required by bond indentures in the amount of
$1,862,744.
Revenue Bonds, General Obligation Bonds and Loans outstanding for Business-Type Accounts
are as follows:
GOVERNMENTAL DEBT
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Purpose Issuance Amount Final Maturity Interest Rates Year
14,380,000$ 12/01/2040 2.00%-5.00% 10,885,000
7,135,000 12/01/2029 4.00%-5.00%4,265,000
16,415,000 12/01/2050 1.17%-3.57%14,700,000
20,845,000 12/01/2043 3.29%-4.43%20,275,000
12,400,000 12/01/2043 5.34%-6.00%11,845,000
71,385,000$ $
BUSINESS TYPE DEBT -BONDS
Purpose Issuance Amount Final Maturity Interest Rates Outstanding as of
December 31, 2024
Due Within 1
Year
DM15-952-037 Columbia Water Supply Project 6,810,430$ 10/01/2034 1.50% 3,996,570$ 399,657$
DWL26037 DWSRF WP WTP Ph 1 2 5,353,000 10/01/2040 1.75%4,827,125 301,695
DWL27107 DWSRF WP WTP Ph 2 7 9,753,259 10/01/2042 1.75%8,731,129 485,309
PCL28205 DWSRF Butterfield WTP PH 9 510,000 10/01/2032 0.00%285,420 62,658
PR24-96103-010- Butterfield WTP Improvements1 850,000 06/01/2029 1.38%73,169 14,633
PC22-96103-049 Reservoir Storage Tank Zone 38 10,000,000 06/01/2041 0.94%9,137,456 571,091
WQC-2021-Pasco-00020 EL210165 Clean Water Preservation5 5,253,920 12/30/2043 1.20%5,001,714 235,802
WQC-2022-Pasco-00044 EL220421 Water Quality Sewer6 21,511,498 06/30/2045 1.20%20,021,777 350,770
WQC-2024-Pasco-00007 EL240577 Clean Water Preservation3 6,934,933 12/30/2044 1.20%6,123,617 268,809
WQC-2024-Pasco-00007 EL240578 Clean Water Preservation4 19,348,262 02/12/2046 1.20%12,752,245 -
HAEIFAC - Reuse Facility Improvement Loan 1,500,000 07/01/2028 3.20%628,741 149,688
WQC-2021-Pasco-00144 EL210324 Clean Water Preservation6 1,514,728 06/30/2044 1.20%1,484,653 67,986
WQC-2024-Pasco-00091 EL240557 Clean Water Preservation11 30,951,000 06/30/2046 1.20%29,820,263 -
WQC-2024-Pasco-00091 EL240568 Clean Water Preservation12 3,983,159 06/30/2046 1.20%2,519,974 -
S23-790A0-257 Dept of Commerce CERB10 4,250,000$ 07/31/2044 2.00% 4,250,000 174,916
109,653,853 3,083,014
Total Business Type Debt 181,038,853$6,043,014$
12 WQC-2024-Pasco-00091 EL240568 Department of Ecology Loan- Water Quality Combined Financial Assistance to be used for WWTP total loan $3,983,159 drawn to date $2,519,975
3 WQC-2024-Pasco-00007 EL240577 Department of Ecology Loan- Water Quality Combined Financial Assistance to be used for WWTP. Total loan $6,934,933 recorded draw $623,617.
4 WQC-2024-Pasco-00007 EL240578 Department of Ecology Loan- Water Quality Combined Financial Assistance to be used for WWTP Total loan $19,348,262 recorded draw $12,752,245
5WQC-2021-Pasco-00020 EL210165 Clean Water Quality fully drawn
6WQC-2022-Pasco-00044 EL220421 Clean Water loan is approved for $21,511,498 and recorded draws $20,021,777
7DWL27107 DWSRF WPWTP Ph2 2 loan is approved for $9,753,259. and recorded draws $9,155,658
8Dept of Commerce PC22-96103-049 has held back $500,000 in reimbursement until project is complete.
2 Department of Health DWL26037 has held back 500,000 in reimbursement until project is complete
1 PR24-96103-010- Butterfield WTP Improvements new in 2024 total loan $850k recorded draw $73,169k
9DWSRF PCL28205 loan is approved for $510,000 and recorded draws $294,161
10CERB Dept of Commerce loan in the amount of 4,250,000 fully drawn.
11 WQC-2024-Pasco-00091 EL240557 Department of Ecology Loan- Water Quality Combined Financial Assistance to be used for WWTP total loan $30,951,000 drawn to date $29,820,263
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The annual debt service requirements to maturity for all Business-Type debt is as follows:
For financial statement presentation the City’s non-current portion of bonds payable are presented
net of premium and discounts. Current bonds payable reflects actual principal payments including
the current portion of the amortized premium due within one year. The following table illustrates
the breakdown by fund type for current and non-current bonds payable and the effect of premium
or discount on balances. Balances shown are as of December 31, 2024.
Special Assessment Debt
Local improvement districts (LID's) are created for the primary purposes of constructing streets,
storm drainage, sidewalk, street lighting, water, and sewer improvements. The principal and
interest on the bond issues are expected to be paid solely from special assessments collected. The
assessments are liens against the property and are subject to foreclosure. The LID Guarantee Fund
BUSINESS TYPE DEBT
Bonds Governmental Business Type Total
Current Bonds Payable
Net of Premium/Discounts )77,209,263$ 74,905,160$ 152,114,423$
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ended the year with a balance of $2,272,234. There is no external debt issue for local improvement
districts, all outstanding debt is internally funded through inter-fund loans. See details in Note 6:
Inter-fund Balances and Transfers.There is a Bond Anticipation Note for the construction costs
related to ULID No. 152 totaling $20,060,000. This Note will be repaid when the LID assessments
are finalized, and long-term note is issued in 2025. See details in Note 20: Short Term Debt.
NOTE 9: LEASES
For the year ended 12/31/2024, the financial statements include the adoption of GASB Statement
No. 87, Leases. The primary objective of this statement is to enhance the relevance and consistency
of information about governments' leasing activities. This statement establishes a single model for
lease accounting based on the principle that leases are financings of the right to use an underlying
asset. Under this Statement, a lessee is required to recognize a lease liability and an intangible
right-to-use lease asset, and a lessor is required to recognize a lease receivable and a deferred inflow
of resources. For additional information, refer to the disclosures below.
City as a Lessee
As of 12/31/2024, City of Pasco, WA had 55 active leases. The leases have payments that range
from $3,924 to $359,420 and interest rates that range from 0.6860% to 6.5000%. As of 12/31/2024,
the total combined value of the lease liability is $5,214,098, the total combined value of the short-
term lease liability is $1,277,642. The combined value of the right to use asset, as of 12/31/2024
of $7,411,397 with accumulated amortization of $4,801,874 is included within the Lease Class
activities table found below. The leases had $0 of Variable Payments and $0 of Other Payments,
not included in the Lease Liability, within the Fiscal Year.
Future principal and interest lease payments as of December 31, 2024, were as follows:
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City as a Lessor
The City is a lessor of various leases for land, buildings and infrastructure. These leases each have
varying length terms bases on each individual contract term. For the year ended 12/31/2024, the
financial statements include the adoption of GASB Statement No. 87, Leases. The primary
objective of this statement is to enhance the relevance and consistency of information about
governments' leasing activities. Under this Statement, a lessee is required to recognize a lease
liability and an intangible right-to-use lease asset, and a lessor is required to recognize a lease
receivable and a deferred inflow of resources. For additional information, refer to the disclosures
below. The City recognized principal lease revenue of $599,924 for governmental and $103,081
for business-type for qualified lease agreements.
Future lease principal and interest revenue receipts as of December 31, 2024, were as follows:
Leases Receivable
Fiscal Year Principal Payments Interest Payments Total Payments
2025 118,907 676 119,583
2026 52,596 148 52,743
Fiscal Year Principal Payments Interest Payments Total Payments
2025 616,642 32,906 649,548
2026 349,365 26,519 375,884
2027 274,800 24,188 298,988
2028 245,925 22,163 268,088
2029 147,362 20,431 167,794
2030 - 2034 690,539 79,828 770,367
2035 - 2039 583,547 42,453 626,000
2040 - 2044 316,065 9,935 326,000
2045 - 2049 121,028 4,972 126,000
2050 - 2054 122,560 3,440 126,000
2055 - 2059 124,112 1,888 126,000
2060 - 2063 75,221 379 75,600
Total 3,838,669 269,926 4,108,595
Principal and Interest Expected to Maturity
Business-Type Activities
Governmental Activities
BUSINESS-TYPE ACTIVITIES:Balance as of Balance as of Short-Term Balance as of
January 1, 2024 Additions Reductions December 31, 2024 December 31, 2024
Lease Receivable
Infrastructure
7510 Sandifur Pkwy 95,626 - 34,812 60,814 36,116
Total Infrastructure Lease Receivable 95,626 - 34,812 60,814 36,116
Land
New Cingular - 5427 Road 76 - Muncipal Water Tower 68,784 - 32,404 36,380 33,567
T-Mobile - 5427 Road 76, - Old Tower 47,571 - 23,350 24,221 24,221
Total Land Lease Receivable 116,355 - 55,754 60,601 57,788
Total Lease Receivable 211,981 - 90,566 121,415 93,904
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NOTE 10: RISK MANAGEMENT
City of Pasco is a member of the Washington Cities Insurance Authority (WCIA). Utilizing
Chapter 48.62 RCW (self-insurance regulation) and Chapter 39.34 RCW (Interlocal Cooperation
Act), nine cities originally formed WCIA on January 1, 1981. WCIA was created for the
purpose of providing a pooling mechanism for jointly purchasing insurance, jointly self-insuring,
and / or jointly contracting for risk management services. As of December 31, 2024, WCIA had
a total of 168 members.
New members initially contract for a three-year term, and thereafter automatically renew on an
annual basis. A one-year withdrawal notice is required before membership can be terminated.
Termination does not relieve a former member from its unresolved loss history incurred during
membership.
Liability coverage is written on an occurrence basis, without deductibles. Coverage includes
general, automobile, police, errors or omissions, stop gap, employment practices, prior wrongful
acts, and employee benefits liability. Limits are $4 million per occurrence in the self-insured
layer, and $16 million in limits above the self-insured layer is provided by reinsurance. Total
limits are $20 million per occurrence subject to aggregates and sublimits. The Board of
Directors determines the limits and terms of coverage annually.
All Members are provided a separate cyber risk policy and premises pollution liability coverage
group purchased by WCIA. The cyber risk policy provides coverage and separate limits for
security & privacy, event management, and cyber extortion, with limits up to $1 million and
subject to member deductibles, sub-limits, and a $5 million pool aggregate. Premises pollution
GOVERNMENTAL ACTIVITIES:Balance as of Balance as of Short-Term Balance as of
January 1, 2024 Additions Reductions December 31, 2024 December 31, 2024
Lease Receivable
Buildings
1011 E Ainsworth St - FCEM 2022-2026 86,236 - 29,390 56,846 34,045
204 W Clark St - WCJTC Academy 114,758 - 26,337 88,421 26,424
321 W. Lewis St. - 2025 9,751 - 5,532 4,219 4,219
403 W. Lewis St. 73,562 - 23,688 49,874 23,851
Greyhound - Pasco Intermodel Transportation Facility 165,877 - 30,920 134,957 32,495
Group Health - Pasco Post Office 48,869 - 13,851 35,018 14,230
Martin Luther King Community Center 58,947 - 33,327 25,620 25,620
Mission Express - Pasco Transportation Facility 70,632 - 22,684 47,948 23,535
Old Pasco Post Office - 401 W. Lewis St. 18,267 - 9,108 9,158 9,158
Total Building Lease Receivable 646,899 - 194,837 452,061 193,577
Infrastructure
Amtrak - Pasco Transportation Facility 2024-2029 - 182,503 28,468 154,035 35,073
Pasco Marina 140,480 - 27,549 112,931 27,820
Total Infrastructure Lease Receivable 140,480 182,503 56,017 266,966 62,893
Land
1900 West A Street - End 2024 1,197 -1,197 - -
Amtrak - Pasco Transportation Facility 5,606 - 5,606 - -
Baseball Stadium 2024 - 350,987 31,457 319,530 35,037
Burnham Sev Pasco- PWRF Burnham 934,929 - 22,844 912,085 22,902
Irrigation Circle 13 - 70,623 - 70,623 70,623
Irrigation Circle 2, L2 - 82,132 - 82,132 82,132
Irrigation Circle 3 - 72,193 - 72,193 72,193
Irrigation Circle 4 and 5 142,816 - 142,816 - -
Irrigation Circle 8 69,054 - 69,054 - -
Circle 16 South 2023-2026 62,604 - 12,515 50,089 25,003
Sun Willows Golf Course 1,567,670 - 76,096 1,491,574 77,284
Total Land Lease Receivable 2,783,876 575,935 361,585 2,998,226 385,174
Total Lease Receivable 3,571,255 758,438 612,439 3,717,253 641,644
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liability provides Members with a $2 million incident limit and $10 million pool aggregate
subject to a $100,000 per incident Member deductible.
Insurance for property, fidelity, inland marine, and equipment breakdown coverage are
purchased on a group basis. Various deductibles apply by type of coverage. Property coverage is
self-funded from the members’ deductible to $1,000,000, for all perils other than flood and
earthquake, and insured above that to $400 million per occurrence subject to aggregates and sub
limits. Automobile physical damage coverage is self-funded from the members’ deductible to
$250,000 and insured above that to $100 million per occurrence subject to aggregates and sub
limits.
In-house services include risk management consultation, loss control field services, and claims
and litigation administration. WCIA contracts for certain claims investigations, consultants for
personnel and land use issues, insurance brokerage, actuarial, and lobbyist services.
WCIA is fully funded by its members, who make annual assessments on a prospectively rated
basis, as determined by an outside, independent actuary. The assessment covers loss, loss
adjustment, reinsurance and other administrative expenses. As outlined in the interlocal, WCIA
retains the right to additionally assess the membership for any funding shortfall.
An investment committee, using investment brokers, produces additional revenue by investment
of WCIA’s assets in financial instruments which comply with all State guidelines.
A Board of Directors governs WCIA, which is comprised of one designated representative from
each member. The Board elects an Executive Committee and appoints a Treasurer to provide
general policy direction for the organization. The WCIA Executive Director reports to the
Executive Committee and is responsible for conducting the day-to-day operations of WCIA.
The City is self-funded for medical, prescription, and dental coverage, in addition offering a fully
insured vision plan for its employees. A third-party administrator, First Choice Health Network,
processes all medical claims for reimbursement, MedImpact processes all prescription claims, and
Delta Dental all dental claims. The third-party administrator provides utilization management
services. The City currently maintains four months (16 weeks) of program expense in cash reserves
for medical, prescription, and dental claims. Program expenses include average claims as well as
administrative and third-party provider costs. To limit the exposure for large claims, the City
purchases individual stop-loss coverage from a commercial insurance carrier that limits the City's
exposure for claim losses to $200,000 per individual.
The number of medical/dental claims in excess of commercial insurance for the last three years
are:
2022 2023 2024
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NOTE 11: JOINT AGREEMENT/JOINT VENTURES
A. Bi-County Police Information Network
The Bi-County Police Information Network (BI-PIN) was established November 24, 1982, when an
Interlocal Agreement was entered into by eight participating municipal corporations; the cities of
Kennewick, Pasco, Richland, Connell West Richland, and Prosser, and Benton and Franklin
Counties. BI-PIN was established to assist the participating police and sheriff's departments in the
deterrence and solution of criminal incidents. BI-PIN is served by an Executive Committee composed
of the City Manager of each of the cities and a member from each of the Boards of County
Commissioners of Benton and Franklin Counties. A liaison from the Bi-County Chiefs and Sheriffs
is an ex officio, non-voting member.
The allocation of financial participation among the participating jurisdictions is based upon the
approved budget for that year and is billed quarterly in advance to each agency. On dissolution of the
Interlocal Agreement, the net position will be shared based upon participant contribution.
Effective January 1, 1992, the City of Kennewick assumed responsibility for operation of the BI-PIN
system. As the Operating Jurisdiction, Kennewick provides all necessary support services for the
operation of BI-PIN such as accounting, legal services, and risk management and information
systems.
BI-PIN is currently in the process of implementing a new RMS/JMS system as well as upgrading all
supporting infrastructure. The City of Pasco's equity interest in BI-PIN was $336,752 on December
31, 2024, which is reported as an investment in joint ventures in the government-wide statement of
net position. The change in equity is reflected in the government-wide statement of activities under
Public Safety. The City does not anticipate any income distributions from BI-PIN since charges are
assessed only to recover anticipated expenses.
Complete separate financial statements for BI-PIN may be obtained at the City of Kennewick, 210
W. 6th Ave., Kennewick, Washington, 99336.
B. Metro Drug Forfeiture Fund
The Metropolitan Controlled Substance Enforcement Group (Metro) established prior to 1987, when
Interlocal Agreement entered into by six participating municipal corporations, the cities of
Kennewick, Pasco, Richland, and West Richland, and Benton and Franklin Counties. Metro
established to account for the proceeds of forfeitures, federal grants, and court ordered contributions,
and to facilitate the disbursement of those proceeds for the purpose of drug enforcement and
investigations. Metro served by an Executive Committee composed of the City Manager or designee
of each of the cities and a member from each of the Boards of County Commissioners of Benton and
Franklin Counties. In addition, a Governing Board consisting of the Chiefs of Police from the cities
and the Sheriffs from the counties administers daily activity.
Effective July 1, 2009, the City of Kennewick assumed responsibility for the operation of Metro. As
the Operating Jurisdiction, Kennewick provides accounting services for the operation of Metro.
The City of Pasco's equity interest in Metro was $107,491 on June 30, 2024, which is reported as an
investment in joint ventures in the government-wide statement of net position. The change in equity
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is reflected in the government-wide statement of activities under Public Safety. The City does not
anticipate any income distributions from Metro.
Complete separate financial statements for Metro obtained at the City of Kennewick, 210 West Sixth
Avenue, Kennewick, Washington.
C. SECOMM -SECOMM provides public safety communications services to the Cities of
Kennewick, Richland, Pasco and the Counties of Benton and Franklin. Each owns an equal
share of SECOMM’s net assets. Financial participation is allocated among the five
participants based on equal shares of capital expenses, predetermined fixed costs, direct costs
and percentages of use. SECOMM also provides service through contracts to the Cities of
West Richland and Prosser, Connell and the Benton and Franklin County Fire Protection
Districts, Port of Pasco, Walla Walla Fire District #5 and the North Franklin County Hospital
district. Service contract agencies are assessed on a cost per capita or cost per call basis. The
City of Pasco’s equity interest in SECOMM as of December 31, 2024 was $1,167,204 which
is reported as an asset in the government-wide Statement of Net Assets. The change in equity
is reflected in Public Safety under the government-wide Statement of Activities. Upon
dissolution of the Interlocal Agreement, the net assets will be shared equitably among the
participants.
D. Microwave - The microwave system is accounted for separately within its own fund and the
user groups are charged a portion of costs based on number of circuits utilized. The Cities of
Kennewick, Richland and Benton County each own a share of Microwave’s pre-2024 net
assets. Under the third amended and restated interlocal agreement, the City of Pasco and
Franklin County will participate in constructing a new Microwave system to replace the
separate Benton County and Franklin County systems. Equity related to the new system is
shared equally among the five participants. The City of Pasco’s equity interest in Microwave
as of December 31, 2024 was $596,285 which is reported as an asset in the government-wide
Statement of Net Position. The change in equity is reflected in Public Safety under the
government-wide Statement of Activities. Upon dissolution of the Interlocal Agreement, the
net position will be shared equitably among the participants.
Complete and separate financial statements for all operations of Benton County Emergency
Services may be obtained at the City of Richland, 625 Swift Blvd, Richland, Washington.
D. Tri-City Animal Control Authority
In 2005 the city entered into an interlocal agreement with the cities of Kennewick and Richland
to jointly fund the operations of the Animal Control Authority (ACA). The ACA was
established to provide animal control and sheltering services. ACA is served by an Executive
Committee composed of the City Manager, or designee, of each of the cities.
In 2005, the City of Pasco was designated as the Operation Jurisdiction for the ACA. As the
Operating Jurisdiction, the City provides all necessary support services for the operation such
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as accounting, contract administration and risk management. As of July 1, 2022, the City
agreed to manage the operations of the authority.
NOTE 12: RELATED PARTIES/ORGANIZATIONS
Pasco Public Facility District Pursuant to RCW 35.57 (the “City PFD Act”) the Pasco Public
Facilities District was formed and created by Ordinance No. 3558 on July 15, 2002, coextensive
with the boundaries of the City, with the powers and authority set forth in the City PFD Act. The
District was established for the purpose of acquiring, constructing, owning, remodeling,
maintaining, equipping, re-equipping, repairing, financing, operating one or more Regional
Centers, as defined by the RCW 35.57.020 and/or participating with any other qualified public
facilities district in a cooperative and joint development of a Regional Center in the Tri-Cities area
by interlocal agreement.
The members of the board of directors of the District (the “PFD Board”) shall be selected and
appointed by the Council, as required by the RCW. The PFD Board consisted of five members.
Three of the members will be appointed based on recommendations from local organizations. The
members serve four-year terms. The Council may, by resolution, remove a member for any reason.
Vacancies will be filled by appointment by the Council.
All corporate powers of the District will be exercised by or under the authority of the PFD Board;
and the business, property and affairs of the District shall be managed under the direction of the
PFD Board, except as may be otherwise provided for by law or in its Charter.
Complete separate financial statements for the District may be obtained from the City of Pasco,
P.O. Box 293, Pasco, WA 99301.
Downtown Pasco Development Authority
Pursuant to RCW 35.21, the Downtown Pasco Development Authority was formed and created by
Ordinance No. 3985 (the DPDA Act) on December 20, 2010, coextensive with the boundaries of
the City, with the powers and authority set forth in the City DPDA Act. The Authority was created
to administer and execute Federal grants or programs;to receive and administer private
funds, goods or services for any lawful public service;and to perform any lawful public
purpose or public function to provide for the revitalization and enhancement of the
downtown Pasco area.
The members of the board of directors of the Authority (the “DPDA Board”) are selected and
appointed by the Mayor of the City of Pasco, subject to confirmation by the City Council. The
DPDA Board consists of seven members. Five of the members are representative of for-profit
business or property owners within the downtown area. Two members are representative of the
banking and/or real estate profession, and/or representatives of business management. The
members serve four-year terms. The Council may, by resolution, remove a member for any reason.
Vacancies will be filled by appointment by the Mayor, subject to confirmation by the City Council.
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All corporate powers of the Authority will be exercised by or under the authority of the DPDA
Board; and the business, property and affairs of the Authority shall be managed under the direction
of the DPDA Board, except as may be otherwise provided by law or in its Charter.
In October 2023, the DPDA was administratively dissolved by the Washington Secretary of State,
Corporations & Charities Division.
In April 2024, the City of Pasco Ordinance 3985 (that created the DPDA in 2010) and the Charter
of the DPDA was repealed by the City of Pasco Ordinance 4711.
Trade, Recreation, Agricultural Center
In 1994 the City entered into an agreement with Franklin County for the Trade, Recreation, and
Agricultural Center (TRAC). The City and Franklin County share in the costs of operating and
covering TRAC’s debt service. Franklin County handles all operating decisions and financial
reporting for TRAC. In Spring of 2019, Franklin County partnered with HAPO Community Credit
Union for a ten-year naming rights agreement. As such, for the purposes of this document, the
terms HAPO Center and TRAC are interchangeable.
The City accounts for its portion of TRAC activity in the TRAC Special Revenue Fund. For
calendar year 2024, the City of Pasco paid Franklin County $162,500 for operating expenditures.
Additionally, in 2014 the City provided $100,000 to the County to assist with TRAC’s cash flows.
This will be returned to the City in 2026, when the existing agreement lapses. It is classified on
the balance sheet as a non-current asset: Due from Other Government. As of December 31, 2024,
the TRAC Fund had a fund balance of $104,936.
Complete financial statements for TRAC may be obtained from Franklin County, 1016 N. 4th
Avenue, Pasco, Washington.
Housing Authority of the City of Pasco and Franklin County
The Housing Authority of the City of Pasco and Franklin County was formed and created by
Ordinance No. 2299 on September 8, 1981, in order to pursue the rehabilitation and redevelopment
of blighted areas containing unsanitary or unsafe habitations located within the City of Pasco and
Franklin County. Its formation empowered the joint housing authority to exercise all rights referred
to under RCW 35.82 “Housing Authority Law.”
Three of the five Authority board members are appointed by the City Council.
Financial statements for the Authority may be obtained from the Housing Authority of the City of
Pasco and Franklin County, 2505 W. Lewis Street, Pasco, WA 99301.
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NOTE 13: JOINTLY GOVERNED ORGANIZATIONS
Tri-Cities Regional Public Facilities District
Pursuant to RCW 35.57 the Tri-Cities Regional Public Facilities District was formed jointly by
the Cities of Pasco, Kennewick, and Richland. The District was established for the purpose of
acquiring, constructing, owning, remodeling, maintaining, equipping, re-equipping, repairing,
financing, operating one or more Regional Centers, as defined by the RCW35.57.020 and/or
participating with any other qualified public facilities districts in a cooperative and joint
development of a Regional Center in the Tri-Cities area, by interlocal agreement.
The District is governed by a nine-member board, with three members representing each city.
Each member must either be a member of the City Council or the Public Facilities District of the
representative city.
Franklin County Emergency Management
Franklin County Emergency Management (FCEM) is a political subdivision of Franklin County
and its municipalities. The FCEM is responsible for coordinating and establishing emergency
response plans to prepare Franklin County for emergencies involving the following: Energy
Northwest; the Hanford Nuclear Reservation; the Pasco Airport; and all Homeland Security,
natural and man-made disasters.
FCEM is governed by a seven-member board, with two County Commissioners, one City Manager
or designee from each of the following cities: Connell, Kahlotus, and Mesa. The City of Pasco
has two representatives on the board due to its population base.
Benton-Franklin Council of Governments
The Benton-Franklin Council of Governments (BFCG) is a voluntary association of the units of
local government, whose purpose is to facilitate a cooperative approach to regional problem
solving.
Seventeen regular voting members represent the two counties, local governments, including a
Public Utility District, a Transportation District, a Port and the Washington State Department of
Transportation. The City of Pasco has one City Council member as its voting representative on
the Board. In addition to regular voting members, there is one associate member and two affiliate
members.
Benton-Franklin Council of Governments Economic Development District
The Benton-Franklin Council of Governments Economic Development District (EDD) is a
voluntary association of the units of local government and private sector members whose purpose
is to facilitate a cooperative approach to regional economic development.
The board is comprised of the members of the Benton-Franklin Council of Governments plus nine
representatives from the private sector.
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Benton County Emergency Services (BCES)
BCES was formed January 1, 1997, through an interlocal agreement entered into by the Cities
of Richland, Kennewick, West Richland, Benton City and Prosser as well as Benton County.
Since then, a second amended and restated interlocal agreement was made and entered into by
and between the following entities: Benton County, Franklin County, the Cities of Kennewick,
Richland, West Richland, Prosser, Benton City, and Pasco, Benton County Fire Protection
Districts and the Public Utility District #1 of Benton County. A third amended and restated
interlocal agreement was ratified in 2024 which, among other provisions, formally withdrew
the Public Utility District at their request. An Executive Board oversees the operations of
BCES and consists of the City Managers (or designee) from the Cities of Kennewick, Pasco
and Richland, City Administrators from Prosser and West Richland, a Council member from
Benton City, a Benton County Commissioner, a Franklin County Commissioner and a single
representative collectively representing Benton County Fire Protection Districts. The City of
Richland serves as the operating jurisdiction providing all the necessary administrative support
services and reporting for BCES. The total amount paid by BCES in 2024 for these services
was $537,907. No distributions of income to the City are expected since charges are assessed
only to recover anticipated expenses.
NOTE 14: EMPLOYEE RETIREMENT SYSTEMS AND PENSION PLANS
The following table represents the aggregate pension amounts for all plans for the year 2024:
State Sponsored Pension Plans
Substantially all city’s full-time and qualifying part-time employees participate in one of the
following statewide retirement systems administered by the Washington State Department of
Retirement Systems, under cost-sharing, multiple-employer public employee defined benefit and
defined contribution retirement plans. The state Legislature establishes, and amends, laws
pertaining to the creation and administration of all public retirement systems.
The Department of Retirement Systems (DRS), a department within the primary government of
the State of Washington, issues a publicly available annual comprehensive annual financial report
(ACFR) that includes financial statements and required supplementary information for each plan.
The DRS ACFR may be downloaded from the DRS website at www.drs.wa.gov.
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Public Employee’s Retirement System (PERS)
PERS members include elected officials; state employees; employees of local governments; and
higher education employees not participating in higher education retirement programs.
PERS is composed of and reported as three separate plans for accounting purposes: Plan 1, Plan
2/3 and Plan 3. Plan 1 accounts for the defined benefits of Plan 1 members. Plan 2/3 accounts for
the defined benefits of Plan 2 members and the defined benefit portion of benefits for Plan 3
members. Plan 3 accounts for the defined contribution portion of benefits for Plan 3 members.
Although employees can be a member of only Plan 2 or Plan 3, the defined benefits of Plan 2 and
Plan 3 are accounted for in the same pension trust fund. All assets of Plan 2/3 may legally be used
to pay the defined benefits of any Plan 2 or Plan 3 members or beneficiaries.
PERS Plan 1 provides retirement, disability and death benefits. Retirement benefits are
determined as 2% of the member’s average final compensation (AFC) times the member’s years
of service. The AFC is the average of the member’s 24 highest consecutive service months.
Members are eligible for retirement from active status at any age with at least 30 years of service,
at age 55 with at least 25 years of service, or at age 60 with at least five years of service. PERS
Plan 1 retirement benefits are actuarially reduced if a survivor benefit is chosen. Members retiring
from active status prior to the age of 65 may also receive actuarially reduced benefits. Other
benefits include an optional cost-of-living adjustment (COLA). PERS 1 members were vested after
the completion of five years of eligible service. The plan was closed to new entrants on September
30, 1977.
PERS Plan 2/3 provides retirement, disability and death benefits. Retirement benefits are
determined as 2% of the member’s AFC times the member’s years of service for Plan 2 and 1%
of AFC for Plan 3. The AFC is the average of the member’s 60 highest-paid consecutive service
months. Members are eligible for retirement with a full benefit at 65 with at least five years of
service credit. Retirement before age 65 is considered an early retirement. PERS Plan 2/3 members
who have at least 20 years of service credit and are 55 years of age or older, are eligible for early
retirement with a benefit that is reduced by a factor that varies according to age for each year
before age 65. PERS Plan 2/3 retirement benefits are actuarially reduced if a survivor benefit is
chosen. Other PERS Plan 2/3 benefits include a COLA based on the CPI, capped at 3%
annually. PERS 2 members are vested after completing five years of eligible service. Plan 3
members are vested in the defined benefit portion of their plan after ten years of service; or after
five years of service if 12 months of that service are earned after age 44.
PERS Plan 3 defined contribution benefits are totally dependent on employee contributions and
investment earnings on those contributions. Members are eligible to withdraw their defined
contributions upon separation. Members have multiple withdrawal options, including purchase of
an annuity. PERS Plan 3 members are immediately vested in the defined contribution portion of
their plan.
PERS Contributions
The PERS Plan 1 member contribution rate is established by State statute at 6%. The PERS 1
employer and PERS 2/3 employer and employee contribution rates are developed by the Office of
the State Actuary, adopted by the Pension Funding Council and is subject to change by the
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legislature. The PERS Plan 2/3 employer rate includes a component to address the PERS Plan 1
Unfunded Actuarial Accrued Liability (UAAL).
As established by Chapter 41.34 RCW, Plan 3 defined contribution rates are set at a minimum of
5% and a maximum of 15%. PERS Plan 3 members choose their contribution rate from six options
when joining membership and can change rates only when changing employers. Employers do not
contribute to the defined contribution benefits.
The PERS Plans defined benefit required contribution rates (expressed as a percentage of covered
payroll) for the fiscal year were as follows:
Judicial Benefit Multiplier (JBM) Program: The JBM Program provides judicial members of the
Public Employees’ Retirement System (PERS) with an increased retirement benefit multiplier. It
also requires employees to pay a higher contribution rate.
The City’s actual PERS plan contributions were $621,504 to PERS Plan 1 and $1,433,668 to PERS
Plan 2/3 for the year ended December 31, 2024.
Law Enforcement Officers’ and Fire Fighters’ Retirement System (LEOFF)
LEOFF was established in 1970, and its retirement benefit provisions are contained in Chapter
41.26 RCW. LEOFF membership includes all of the state’s full-time, fully compensated, local
law enforcement commissioned officers, fire fighters and, as of July 24, 2005, emergency medical
technicians.
6.36% 2.55% 0.20% 9.11%
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LEOFF Plan 1 provides retirement, disability, and death benefits. Retirement benefits are
determined per year of service calculated as a percent of final average salary (FAS) as follows:
x 20+ years of service –2.0% of FAS
x 10-19 years of service –1.5% of FAS
x 5-9 years of service –1% of FAS
The FAS is the basic monthly salary received at the time of retirement, provided a member has
held the same position or rank for 12 months preceding the date of retirement. Otherwise, it is the
average of the highest-paid consecutive 24 months’ within the last ten years of service. Members
are eligible for retirement with five years of service at the age of 50. Other benefits include a
COLA. LEOFF 1 members were vested after the completion of five years of eligible service. The
plan was closed to new entrants on September 30, 1977.
Contributions
Starting on July 1, 2000, LEOFF Plan 1 employers and employees contribute 0%, as long as the
plan remains fully funded. The LEOFF Plan I had no required employer or employee contributions
for fiscal year 2024. Employers paid only the administrative expense of 0.20% of covered payroll.
LEOFF Plan 2 provides retirement, disability, and death benefits. Retirement benefits are
determined as 2% of the FAS per year of service (the FAS is based on the highest-paid consecutive
60 months). Members are eligible for retirement with a full benefit at 53 with at least five years
of service credit. Members who retire prior to the age of 53 receive reduced benefits. If the
member has at least 20 years of service and is age 50 - 52, the reduction is 3% for each year prior
to age 53. Otherwise, the benefits are actuarially reduced for each year prior to age 53. LEOFF 2
retirement benefits are also actuarially reduced to reflect the choice of a survivor benefit. Other
benefits include a COLA (based on the CPI), capped at 3% annually. LEOFF 2 members are
vested after the completion of five years of eligible service.
Contributions
Starting on July 1, 2000, LEOFF Plan 1 employers and employees contribute 0%, as long as the
plan remains fully funded. The LEOFF Plan I had no required employer or employee contributions
for fiscal year 2024. Employers paid only the administrative expense of 0.20% of covered payroll.
LEOFF Plan 2 provides retirement, disability and death benefits. Retirement benefits are
determined as 2% of the FAS per year of service (the FAS is based on the highest-paid consecutive
60 months). Members are eligible for retirement with a full benefit at 53 with at least five years of
service credit. Members who retire prior to the age of 53 receive reduced benefits. If the member
has at least 20 years of service and is age 50 –52, the reduction is 3% for each year prior to age
53. Otherwise, the benefits are actuarially reduced for each year prior to age 53. LEOFF 2
retirement benefits are also actuarially reduced to reflect the choice of a survivor benefit. Other
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benefits include a COLA (based on the CPI), capped at 3% annually. LEOFF 2 members are vested
after the completion of five years of eligible service.
The employee contribution rate was 8.53%.
The City’s actual contributions to the plan were $1,433,461 for the year ended December 31,
2024.
The Legislature, by means of a special funding arrangement, appropriates money from the state
General Fund to supplement the current service liability and fund the prior service costs of Plan 2
in accordance with the recommendations of the Office of the State Actuary and the LEOFF Plan
2 Retirement Board. This special funding situation is not mandated by the state constitution and
could be changed by statute. For the state fiscal year ending June 30, 2024, the state contributed
$96,422,231 to LEOFF Plan 2. The amount recognized by the City as its proportionate share of
this amount is $882,241.
Actuarial Assumptions
The total pension liability (TPL) for each of the DRS plans was determined using the most recent
actuarial valuation completed in 2024 with a valuation date of June 30, 2023. The actuarial
assumptions used in the valuation were based on the results of the Office of the State Actuary’s
(OSA) 2013-2018 Demographic Experience Study and the 2023 Economic Experience Study.
Additional assumptions for subsequent events and law changes are current as of the 2023 actuarial
valuation report. The TPL was calculated as of the valuation date and rolled forward to the
measurement date of June 30, 2024. Plan liabilities were rolled forward from June 30, 2023, to
June 30, 2024, reflecting each plan’s normal cost (using the entry-age cost method), assumed
interest and actual benefit payments.
x Inflation:2.75% total economic inflation; 3.25% salary inflation
x Salary increases: In addition to the base 3.25% salary inflation assumption, salaries are also
expected to grow by service-based salary increase.
x Investment rate of return:7.00%
Timeframe Contribution Rate Admin Fee
January - December 5.12% 0.20% 5.32%
January - December 8.53% 0.20% 8.73%
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Mortality rates were developed using the Society of Actuaries’ Pub. H-2010 mortality rates, which
vary by member status (e.g. active, retiree, or survivor), as the base table. OSA applied age offsets
for each system, as appropriate, to better tailor the mortality rates to the demographics of each
plan. OSA applied the long-term MP-2017 generational improvement scale, also developed by the
Society of Actuaries, to project mortality rates for every year after the 2010 base table. Mortality
rates are applied on a generational basis; meaning, each member is assumed to receive additional
mortality improvements in each future year throughout their lifetime.
Assumptions did not change from the prior contribution rate setting June 30, 2022 Actuarial
Valuation Report (AVR). OSA adjusted their methods for calculating UAAL contribution rates in
PERS 1 to reflect the delay between the measurement date of calculated Plan 1 rates and when the
rates are collected. OSA made an adjustment to their model to reflect past inflation experience
when modeling future COLAs for current annuitants in all plans except PERS1.
Discount Rate
The discount rate used to measure the total pension liability for all DRS plans was 7.0%.
To determine that rate, an asset sufficiency test was completed to test whether each pension plan’s
fiduciary net position was sufficient to make all projected future benefit payments for current plan
members. Based on OSA’s assumptions, the pension plans’fiduciary net position was projected
to be available to make all projected future benefit payments of current plan members. Therefore,
the long-term expected rate of return of 7.0% was used to determine the total liability.
Long-Term Expected Rate of Return
The long-term expected rate of return on the DRS pension plan investments of 7.0% was
determined using a building-block-method. In selecting this assumption, OSA reviewed the
historical experience data, considered the historical conditions that produced past annual
investment returns, and considered Capital Market Assumptions (CMAs) and simulated expected
investment returns provided by the Washington State Investment Board (WSIB). The WSIB uses
the CMA’s and their target asset allocation to simulate future investment returns at various future
times.
Estimated Rates of Return by Asset Class
The table below summarizes the best estimates of arithmetic real rates of return for each major
asset class included in the pension plan’s target asset allocation as of June 30, 2024. The inflation
component used to create the table is 2.5% and represents the WSIB’s most recent long-term
estimate of broad economic inflation.
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Sensitivity of the Net Pension Liability/(Asset)
The table below presents the City’s proportionate share of the net pension liability calculated using
the discount rate of 7%, as well as what the City’s proportionate share of the net pension liability
would be if it were calculated using a discount rate that is 1-percentage point lower (6%) or 1-
percentage point higher (8%) than the current rate.
Pension Plan Fiduciary Net Position
Detailed information about the State’s pension plans’ fiduciary net position is available in the
separately issued DRS financial report.
Pension Liabilities (Assets), Pension Expense, and Deferred Outflows of Resources and
Deferred Inflows of Resources Related to Pensions
At June 30, 2024, the City reported its proportionate share of the net pension liabilities and assets
as follows:
The amount of the asset reported above for LEOFF Plans 1 and 2 reflects a reduction for State
pension support provided to the City. The amount recognized by the City as its proportionate share
of the net pension asset, the related State support, and the total portion of the net pension asset that
was associated with the City were as follows:
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On June 30, the City’s proportionate share of the collective net pension liabilities was as follows:
Employer contribution transmittals received and processed by the DRS for the fiscal year ended
June 30, 2024, are used as the basis for determining each employer’s proportionate share of the
collective pension amounts reported by the DRS in the Schedules of Employer and Nonemployer
Allocations for all plans except LEOFF 1.
LEOFF Plan 1 allocation percentages are based on the total historical employer contributions to
LEOFF 1 from 1971 through 2000 and the retirement benefit payments in fiscal year 2023.
Historical data was obtained from a 2011 study by the Office of the State Actuary (OSA). The
state of Washington contributed 87.12 percent of LEOFF 1 employer contributions and all other
employers contributed the remaining 12.88 percent of employer contributions. LEOFF 1 is fully
funded and no further employer contributions have been required since June 2000. If the plan
becomes underfunded, funding of the remaining liability will require new legislation. The
allocation method the plan chose reflects the projected long-term contribution effort based on
historical data.
In fiscal year 2024, the state of Washington contributed 39% of LEOFF 2 employer contributions
pursuant to RCW 41.26.725 and all other employers contributed the remaining 61% of employer
contributions.
LEOFF 1 Asset
(2,095,150)$$
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Pension Expense
For the year ended December 31, 2024, the city recognized pension expense as follows:
Deferred Outflows of Resources and Deferred Inflows of Resources
At December 31, 2024, the city reported deferred outflows of resources and deferred inflows of
resources related to pensions from the following:
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Deferred outflows of resources related to pensions resulting from the City’s contributions sub-
sequent to the measurement date will be recognized as a reduction of the net pension liability in
the year ended December 31, 2024. Other amounts reported as deferred outflows and deferred
inflows of resources related to pensions will be recognized in pension expense as follows:
Firemen's Pension
Plan Description
Plan Administration:The Firemen’s’ Pension Fund (FPF) is administered by the City of Pasco.
The plan is a single employer defined benefit pension plan that provides pensions for
firefighters that were hired prior to 1970.
PERS 1 PERS 2/3 LEOFF 1 LEOFF 2
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The Municipal Firefighters' Pension board consists of the following five members, ex officio,
the mayor, or in a city of the first class, the mayor or a designated representative who shall be
an elected official of the city, who shall be chairperson of the board, the city comptroller or
clerk, the chairperson of finance of the city council, or if there is no chairperson of finance, the
city treasurer, and in addition, two regularly employed or retired firefighters elected by secret
ballot of those employed and retired firefighters who are subject to the jurisdiction of the board.
The members to be elected by the firefighters shall be elected annually for a two-year term.
The two firefighters elected as members shall, in turn, select a third eligible member who shall
serve as an alternate in the event of an absence of one of the regularly elected members. In case
a vacancy occurs in the membership of the firefighters or retired members, the members shall
in the same manner elect a successor to serve the unexpired term. The board may select and
appoint a secretary who may but need not be a member of the board. In case of absence or
inability of the chairperson to act, the board may select a chairperson pro tempore who shall
during such absence or inability to perform the duties and exercise the powers of the
chairperson. A majority of the members of the board shall constitute a quorum and have power
to transact business.
Benefits provided.All benefit terms are in statutes RCW 41.16, 41.18, and 41.26. FPF provides
retirement, disability, and death benefits. Each firefighter in service on March 1, 1970 receives
the greater of the benefit payable under the Washington Law Enforcement Officers' and
Firefighters' Retirement System and the benefits available under the provisions of prior law.
Where benefits under the old law exceed those under the new law for any firefighter, the excess
benefits are paid from the FPF of the city employing the member on March 1, 1970.
All members are retired and drawing benefits. Benefit terms provide for cost-of-living
adjustments to each member's retirement benefit. There are two types of increases: escalation
by salary in proportion to the current salary of the rank from which the firefighter retired, or an
increase proportionate to the increase in the Seattle-area CPI, with the change computed
annually. Regardless of the increase (or decrease) in the CPI, the benefits are increased at least
2% each year. The former applies to firefighters who retired from service after 1969, their
survivors, and to firefighters who retired for duty disability (but not their survivors) after 1969.
The latter applies to all other types of monthly benefits.
Employees Covered by Benefit Terms:Plan membership is limited to active members of the
Firefighters' Pension Fund (FPF) as of March 1, 1970. On that date, the Washington Law
Enforcement Officers' and Firefighters' System (LEOFF) was established. FPF is responsible
for paying the pensions of those members retired prior to March 1, 1970 and for providing the
"excess benefit", the excess of FPF formula benefits over the LEOFF benefits. Therefore, the
plan is closed to new members.
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At December 31, 2024, the benefit terms covered the following employees:
Contributions.As long as the FPF provides for benefits to covered members, the City will be
eligible to receive a share of the State's distribution of the fire insurance premium taxes. The
amount the City receives is 25% of all monies received by the State from taxes on fire insurance
premiums. Contributions can also come from taxes paid pursuant to the provisions of RCW
41.16.060. This statute require that each municipality levy up to $0.45 (only $0.225 of which
can be in excess of the property tax limit pursuant to RCW 84.52.043) per $1,000 of assessed
valuation, based on reports by a qualified actuary, to maintain the fund.
Reporting Period contributions: $138,235
Investments
The Fire Pension Plan does not have an investment policy for investing pension funds. At year
end investments are reported at quoted market price as provided by our broker, US Bank. At
December 31, 2024 the Fire Pension Plan had the following investments, reported at fair market
value.
Federal Agency $ 1,827
Mutual Funds $ 4,614,305
Rate of Return.For the year ended December 31, 2024, the annual money-weighted rate of
return on pension plan investments, net of pension plan investment expense, was 21.43%. The
money-weighted rate of return expresses investment performance, net of investment expense,
adjusted for the changing amount actually invested.
Actuarial Assumptions:The total pension liability in the December 31, 2024 actuarial valuation
was determined using the following actuarial assumptions, applied to all periods included in
the measurement, unless otherwise specified:
Discount Rate 7.00%
Investment Rate of Return 7.00%
Inflation 2.75%
Salary increases 3.25%
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Mortality rates were based on tables from the Society of Actuaries.
Experience studies come from the State of Washington. The last economic experience study
was done in 2021 and the last demographic experience study was 2018.
There were no ad hoc postemployment benefit changes (including ad hoc COLAs) to the plan.
Discount rate.The discount rate used to measure the total pension liability was 7.0%. The
projection of cash flows used to determine the discount rate assumed City contributions were
equal to the statutorily calculated contribution of state fire insurance premiums for the next 20
years. Based on this assumption, the pension plan's fiduciary net position was projected to be
available to make all projected future benefit payment for current plan members. Therefore,
the long-term expected rate of return on pension plan investments was applied to all periods of
projected benefit payments to determine the total pension liability.
Sensitivity of liabilities to changes in the discount rate.Sensitivity of the total and net pension
liability to changes in the discount rate. The total and net pension liability of the City, as well
as what the City's total and net pension liability would be if they were calculated using a
discount rate that is one percentage point lower (6.00%) or one percentage point higher (8.00%)
follows:
Fiduciary Net Position.The components of the net pension liability of the City on December
31, 2024, were as follows:
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The following table presents the changes in Net Pension Liability for year ending December 31,
2024.
Deferred Outflows of Resources and Deferred Inflows of Resources
Total Pension Plan Fiduciary Net
Liability Position
1,035,086$ 4,460,172$ $
Service Cost --
Interest 69,305 -
173 -
Change in assumptions --
Contributions- employer/other -138,235
Contributions- employee --
Net investment income -960,828
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On December 31, 2024, the City recognized a pension expense of ($452,325). The City reported
deferred outflows of resources and deferred inflows of resources related to the Fire Pension Plan
from the following sources:
Amounts reported as deferred outflows of resources and deferred inflows of resources related to
pensions will be recognized in the pension expense as follows:
Amount
The Fire Pension Fund is reported in the City’s comprehensive annual financial report as a
Fiduciary Fund. Pension Liability, Pension Asset, Deferred Inflows and Deferred Outflows are
reported in the Government Wide Statement of Net Position. A copy of the plan statements can
be obtained by request at the following address: City of Pasco 525 N 3rd Ave., Pasco, WA 99301.
NOTE 15: Defined Benefit Other Postemployment Benefit (OPEB) Plans
The following table represents the aggregate OPEB amounts for all plans subject to the
requirements of GASBS 75 for the year 2024:
LEOFF 1 –Postemployment Healthcare Plan
In addition to the pension benefits outlined in Note 14, Employee Retirement Systems and
Pension Plans, the City of Pasco provides post-retirement health care benefits via a single
employer defined benefit plan in accordance with state statute for retired police officers and
firefighters who are eligible for lifetime healthcare under the Law Enforcement Officers’ and
Firefighters’ (LEOFF1) plan one retirement system.
OPEB Liabilities 6,240,802$
OPEB Assets (4,995,712)
Deferred Outflows of Resources -
Deferred Inflows of Resources 543,956
OPEB Expense (340,869)$
Aggregate OPEB Amounts - All Plans
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Plan Description: As required by the Revised Code of Washington (RCW) Chapter 41.26, the
City provides lifetime medical care for members of the Law Enforcement Officers and
Firefighters (LEOFF) retirement system hired before October 1, 1977, under a defined-benefit
healthcare plan administered by the City. The plan is funded on a pay-as-you-go basis and there
are no assets accumulated in a qualifying trust.
Benefits Provided:The members' necessary hospital, medical, prescription and nursing care
expenses not payable by worker's compensation, Medicare, or other insurance are covered.
Employees covered by benefit terms: At December 31, 2024, the following employees were
covered by the benefit terms:
Contributions:The City pays benefits as they come due.
Contributions rate: Benefits Due
Reporting period contributions: $ 583,306
Net OPEB Liability:The City’s total OPEB liability was valued as of December 31, 202 4 and
was used to calculate the total OPEB liability measured as of December 31, 2024.
Actuarial Assumptions: The total OPEB liability in the December 31, 2024 actuarial valuation
was determined using the following actuarial assumptions, applied to all periods included in the
measurement, unless otherwise specified:
Healthcare cost trend rates
Discount Rate: 4.10%
Inflation: 2.75%
Salary Increases: 3.25%
Healthcare cost trend rates
Pre-Medicare: n/a
Medicare: 4.90%*
Mortality Rates Based on SOA Tables.
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x Projections of the sharing of benefit-related costs are based on an established pattern of
practice.
x Experience studies come from the State of Washington. The last economic experience
study was done in 2021 and the last demographic experience study was from 2018.
x Inactive employees (retirees) pay 0% of the cost of benefits. There were no ad hoc
postemployment benefit changes (including ad hoc COLAs) to the plan.
Discount Rate: The discount rate used to measure the total OPEB liability was 4.10%. The City’s
OPEB Plan is an unfunded plan, therefore the discount rate was set to the rate of tax-exempt,
high-quality 20-year municipal bonds, as of the valuation date.
*Trending down to 4.04% over 51 years. Applies to calendar years.
Trust Assets: There are no assets accumulated in a trust that meets the criteria in paragraph 4 of
GASB 75 to pay related benefits.
Sensitivity of the total OPEB liability to changes in the discount rate. The total OPEB liability
of the City, as well as what the City’s total OPEB Liability would be if it were calculated using
a discount rate that is one point lower (3.10%) or one percentage point higher (5.10%) follows:
Sensitivity of the total OPEB liability to changes in the healthcare cost trend rates. The
healthcare trend for this valuation started at 4.90% and decreased to 4.04% over 51 years. The
total OPEB liability of the City, as well as what the City’s total OPEB liability would be if it
were calculated using healthcare cost trend rates that are one percentage point lower (3.90%) or
one percentage point higher (5.90%) than current healthcare cost trend rates follows:
Changes in the Total OPEB Liability
The changes in total OPEB liability for 2024 are presented in the following table.
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There is a schedule of sources of changes in the Total OPEB liability presented as RSI,
immediately following the notes to the financial statements. Because this plan is unfunded there
are no disclosures relating to Fiduciary Net Position or investment experience. There were no
Deferred Outflows or Deferred Inflows of resources related to this OPEB Plan for 2024.
Fire Pension –Postemployment Healthcare Plan
Plan Description: As required by the Revised Code of Washington (RCW) Chapter 41.26, the
City provides lifetime medical care for members of the Law Enforcement Officers and Firefighters
(LEOFF) retirement system hired before October 1, 1977 under a single employer, defined benefit
healthcare plan administered by the City. The Old Fire Pension OPEB covers firefighters that were
hired prior to the creation of the LEOFF 1 retirement system.
Benefits Provided: The members' necessary hospital, medical, and nursing care expenses not
payable by worker's compensation, social security, insurance provided by another employer, or
other pension plan, or any other similar source are covered. Most medical coverage for eligible
retirees is provided by the City's employee medical insurance program. Under authorization of the
LEOFF Disability Board, direct payment is made for other retiree medical expenses not covered
by standard medical plan benefit provisions. Members of the Fire Pension plan purchase medical
insurance through the City's medical insurance program.
Employees Covered by Benefit Terms: At December 31, 2024 (the census date), the benefit terms
covered the following employees:
Plan Fiduciary Net
Total OPEB Position
Liability (b)
6,686,411$ -$$
Service Cost --
Interest 241,083 -
Schedule of changes in the Total OPEB Liability
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Contributions:Funding for LEOFF retiree healthcare costs is provided entirely by the City as
required by the RCW. The City's funding policy is based upon pay-as-you-go financing
requirements for any requirements in excess of amounts previously set aside in the Fire Pension
OPEB trust fund. Reporting period contributions: $0.
Net OPEB Liability: The City's total OPEB liability was valued as of December 31, 2024, and
was used to calculate the net OPEB liability measured as of December 31, 2024.
Actuarial Assumptions: The total OPEB liability in the December 31, 2024 actuarial valuation
was determined using the following actuarial assumptions, applied to all periods included in the
measurement, unless otherwise specified:
Measurement Date: December 31, 2024
Discount Rate: 7.00%
Investment Rate of Return: 7.00%
Inflation: 2.75%
Healthcare cost trend rates:
Pre-Medicare: n/a
Medicare: 4.90%*
Salary Increases: 3.25%
Mortality Rates were based on tables from the Society of Actuaries.
x Projections of the sharing of benefit-related costs are based on an established
pattern of practice.
x Experience studies come from the State of Washington. The last economic
experience study was done in 2021 and the last demographic experience study was
2018.
x Inactive employees (retirees) pay none of the cost of benefits.
x There were no ad hoc postemployment benefit changes (including ad hoc COLAs)
to the plan.
There were no changes between the measurement date and the report date that are expected to have
a significant effect on the total OPEB liability.
Discount Rate: GASB 75 allows the use of a discount rate that is up to the expected long-term rate
of return on the assets in the Trust set aside to pay benefits, if the plan sponsor makes regular
contributions to the Trust such that the assets are not depleted at any point in the future. If the
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plans' actuary determines that contributions are not sufficient to keep the Trust funded, a blend of
the long-term rate of return and the yield or index rate for 20-year, tax-exempt municipal bonds
will be used for the periods when the Trust funds are not sufficient to cover benefit payments.
Based on this requirement, and with the approval of the plan sponsor, the discount rate used to
measure the total OPEB liability is 7.00%.
*Trending down to 4.04% over 51 years. Applies to calendar years.
Sensitivity of Liabilities to Changes in the Discount Rate and Healthcare Cost Trend Rate:
Sensitivity of the total and net OPEB liability to changes in the discount rate. The total and net
OPEB liability of the City, as well as what the City's total and net OPEB liability would be if they
were calculated using a discount rate that is one percentage point lower (6.00%) or one percentage
point higher (8.00%) follows:
Sensitivity of the net OPEB liability to changes in the healthcare cost trend rates. The healthcare
trend for this valuation started at 4.90% and decreased to 4.04% over 51 years. The total OPEB
liability of the City, as well as what the City's total OPEB liability would be if it were calculated
using healthcare cost trend rates that are one percentage point lower (3.90%) or one percentage
point higher (5.90%) than current healthcare cost trend rates follows:
Changes in the Net OPEB Liability
The changes in net OPEB liability for 2024 are presented in the following table.
For the report year ended December 31, 2024, the City recognized an OPEB expense of
($478,566). The City reported deferred outflows of resources and deferred inflows of resources
related to OPEB from the following sources:
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Amounts reported as deferred outflows of resources and deferred inflows of resources related to
OPEB will be recognized in OPEB expense as follows:
Long-Term Expected Real Rate of Return: The long-term expected rate of return is determined
using the long-term rates of return developed by the State of Washington in their 2021 economic
experience study.
of ResourcesOld Firemen's Plan
Total OPEB Plan Fiduciary Net
Liability Position
(a)(b)
507,010$ 4,671,337$ $
Service Cost --
Interest 32,478 -
Changes in the Net OPEB Liability
Total OPEB Liability $452,964
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Investments: The Old Fire OPEB Plan does not have an investment policy. The board approves
any purchase or sale transactions regarding assets of the plan. The plan has only one investment,
a mutual fund that was purchased in 2003. The investment is detailed in the following table.
The Old Fire OPEB Plan does not have a specific reserve policy or requirement, however all
assets of the plan are considered assets of the trust and as such are obligated for payment of
current and future benefits to plan members.
NOTE 16: CONTINGENCIES AND LITIGATION
The City has recorded in its financial statements all material liabilities, including applicable
estimates for situations that are not yet resolved but where, based on available information,
management believes it is probable that the City will have to make payment. The City has closely
reviewed all pending claims,and it is management’s opinion, the City's insurance policies and
self-insurance reserves are adequate to pay all material known or pending claims. As discussed in
Note 8, Long-term Debt, the City is contingently liable for repayment of debt.
The City participates in a number of Federal and State assisted programs. These grants are subject
to audit by the grantors or representatives. Such audits could result in requests for reimbursement
to grantor agencies for expenditures disallowed under the terms of the grants. However, City
management believes that such disallowances, if any, will be immaterial.
NOTE 17: SUBSEQUENT EVENTS
In 2022, a local improvement district (LID) was formed to construct sewer collection
infrastructure in an urban growth area which covers approximately 1,000 acres. A bond
anticipation note (BAN) to fund project construction was issued March 14, 2024 for
approximately $20.3M. The LID assessments were finalized April 2025. The BAN of $20.3M
will be repaid and replaced with an LID Bond of $12.6M during late summer 2025.
NOTE 18: ACCOUNTING CHANGES AND ERROR CORRECTIONS
The following table itemizes the accounting changes and error corrections made in 2024, along
with the purposes for the adjustments:
Name of Investment Type Balance as of 12/31/24
Washington Mutual Investors Fund-A Mutual Fund $5,379,180 Gold 18.82%
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Purpose for
Adjustment (Decrease) Increase
Adjustment to Fund
Balance/ Net Position
Governmental Funds:
General Fund 1 - 467,661
3 8,742
12 19,498
5 (18,550)
3 26,132
3 498
5 (1,499)
1 18,375
5 (83,978)
5 (17,877)
5 (11,881)
5 (1,596)
5 (68,245)
4 - 68,875
Total Governmental Funds (203,626) 609,781
Water/Sewer Utility Fund 6 104,326
7 (521,248)
8 23,280
1 486,036
10 (48,846)
11 2,279,890
Total Business-Type Funds:(570,094) 2,893,532
Statement of Net Position 2 (291,695)
2 (100,516)
9 195,649
9 (402,956)-
13 (2,286,751)-
(3,081,918) 195,649
(3,855,638) 3,698,962 (156,676)
Accounting Changes and Error Corrections
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Purpose for accounting changes and error correction:
1. UM Conversion Audit A/R moves from fund 100 & 150 to 411
2. Pension deferred inflows were overstated by $100,516 in prior year and outflows were
understated in prior year by $291,695.
3. Charter Communications donates funds to the Communications Department for the purpose
of improving communication devices in the council chambers. This entry was made to correct
entries made to the incorrect GL accounts in accounting changes and error corrections.
4. Revenues were overstated due to duplicate billing for project.
5. GASB 87 Lease adjustments for misclassified leases between funds and missing leases from
prior year.
6. In 2023 WA St Dep of Revenue was paid twice on 8/28/2023 and voided on 01/16/2024 for
W/S B&O Taxes, should have been voided on 12/31/2023
7. Darigold customer in PWRF billed too much in 2023 in the amount of $521,248 due to CERB
loan proceeds received.
8. A/P vendor Tapani was overpaid $23,271 due to the tax rate paid being 8.7% and 8.9%,
whereas it should have been 8.1% due to the location of the PWRF facility.
9. Subscription based information technology agreements were omitted and not reported as
assets.
10. The project was deemed non-viable and was consequently removed from CWIP.
11. Recognize LID 151 Assessment, was recorded as deferred in 2023
12. Revenue was overstated due to incorrect reimbursement billing for fire mobilization services.
13. Interfund loan between governmental internal service fund and business type fund was
overstated due to duplication recording in reconciliation to government wide statements.
NOTE 19: Asset Retirement Obligation (ARO)
The City of Pasco has estimated closure costs associated with a decanting drying bed for waste
collected from street sweeping. As of December 31, 2024, the reported estimated liability for
these costs was $13,130. The City also reports restricted cash in this amount as a reserve for this
liability. The estimated closure costs are a result of local permitting regulations through the
Benton-Franklin Health District. The estimated closure costs are determined by an independent
quote from a company qualified to clean the drying bed of any remaining waste as well as
estimated labor costs based on current rates. These costs would only be incurred if the drying bed
area would need to be suddenly vacated which is not anticipated for the foreseeable future. There
is no tangible asset associated with this liability as it is only an open-air area of immaterial value
located on City premises.
Page 125
C
NOTE 20: Business-Type Short Term Debt
In 2024 Water/Sewer received $20,060,000 (BAN) Bond anticipated Note for ULID Sewer this
note is due within a year.
1/1/2024
Page 126
C
Old Fire OPEB Fund
A schedule of contributions for the Old Fire OPEB Fund is not included because the plan is fully
funded and there have been no contributions for the past five years. The OPEB plan's fiduciary
net position is projected to have sufficient funds to pay all projected benefit payment for current
plan members. Therefore, there are no future projected contributions.
Total OPEB liability
Net change in total OPEB liability (23,657) 91,861 (504,259) (62,538)(486,899) (55,778) (87,758)
Total OPEB liability - beginning 1,636,038 1,612,381 1,704,242 1,199,983 1,137,445 650,546 594,768
Total OPEB liability - ending 1,612,381 1,704,242 1,199,983 1,137,445 650,546 594,768 507,010
Plan fiduciary net position
Net change in plan fidiciary net position 358,968 (178,195) 625,463 161,501 918,044 (472,147) 593,298 777,339
Plan fiduciary net position - beginning 2,664,405 3,023,373 2,845,178 3,470,641 3,632,142 4,550,186 4,078,039 4,671,337
Plan fiduciary net position - ending 3,023,373 2,845,178 3,470,641 3,632,142 4,550,186 4,078,039 4,671,337 5,448,676
Net OPEB liability ending (1,410,992)$ (1,140,936)$ (2,270,658) (2,494,697) (3,899,640) (3,483,271) (4,164,327) (4,995,712)
187.5% 166.9% 289.2% 319.3% 699.4% 685.7% 921.4% 1202.9%
Covered-employee payroll N/A N/A N/A N/A N/A N/A N/A N/A
N/A N/A N/A N/A N/A N/A N/A N/A
Notes to Schedule:
Plan fiduciary net position as a % of Total OPEB
liability
Net OPEB liability as a % of covered-employee
payroll
Page 127
C
LEOFF 1 OPEB
2017 2018 2019 2020 2021 2022 2023
Notes to Schedule:
*Until a full 10-year trend is compiled, only information for those years available is presented.
Notes to Schedule
2017 2018 2019 2020 2021 2022 2023
Total OPEB liability - beginning 16,078,996$ 16,179,101$ 16,223,295$ 12,231,327$ 12,969,448$ 10,605,392$ 8,499,941$$
Total OPEB liability - ending 16,179,101 16,223,295 12,231,327 12,969,448 10,605,392 8,499,941 6,686,411 6,240,802
Notes to Schedule:
No assets are accumulated in a trust that meets the criteria in paragraph 4 of GASB 75.
Page 128
C
State Plans
PERS PLAN 1 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
0.102321% 0.098322% 0.099661% 0.093918% 0.091766% 0.086902% 0.090217% 0.093487% 0.109828%
PERS PLAN 2/3
0.125949% 0.122675% 0.126788% 0.120274% 0.118486% 0.113176% 0.115916% 0.121879% 0.141629%
LEOFF 1
0.067488% 0.066826% 0.066934% 0.067877% 0.069031% 0.069045% 0.067071% 0.067125% 0.067329%
LEOFF 2
0.405844% 0.400187% 0.427714% 0.469232% 0.492544% 0.468151% 0.479684% 0.486887% 0.547781%
Page 129
C
Old Fire Pension
Notes to Schedule:
Actuarial Cost Method: Entry-age normal, level percent of pay
Amortization Method: Closed period, level percent of pay
Amortization Period: 1 year
Inflation: 2.75%
Assumed Payroll Growth: 3.250%
Rate of Return on Assets: 7.00%
Mortality Rate: CalPERS Rates
Retirement Rates: NA
Contributions came from State Fire Insurance Premiums
Total Pension Liability
62,545 69,305
57,649 173
67,103 0
(91,409)(90,038)
Net change in total pension liability
Total pension liability - beginning
Total pension liability - ending
Plan Fiduciary Net Position
(3,311)(2,236)
Net change in plan fiduciary net position
Plan fiduciary net position- beginning
Plan fiduciary net position-ending
Net pension liability - Ending
Plan fiduciary net position as a % of total pension liability 189.0% 212.7% 231.4% 222.8% 236.2% 272.7% 431.4% 379.9% 430.9% 538.9%
Covered payroll - - - - - - - - - -
Net pension liability as a % of covered payroll n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
Notes to schedule:
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
-0.86% 12.14% 15.94% -5.10% 20.34% 12.07% 21.17% -13.48% 24.10%
Page 130
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Page 133
City of Pasco
Notes to the Schedule of Expenditures of Federal Awards
For the Year Ended December 31, 2024
NOTE 1 – Basis of Accounting
The Schedule of Expenditures of Federal Awards is prepared on the same basis of accounting as the City’s
financial statements. The City uses a modified accrual basis of accounting for its governmental funds and full
accrual basis of accounting for its proprietary funds.
NOTE 2 – Federal De Minimis Indirect Cost Rate
The city has elected to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance.
NOTE 3 – Revolving loan – Program Income
The City participates in the Housing and Urban Development HOME Program for low-income individuals, as
part of a regional consortium administered through the City of Richland. The City is not privy to information
on what portion of funds received from the City of Richland are derived from program income. The amount
of loan funds disbursed to program participants for the year was $25,350 and is presented in this schedule. The
amount of principal and interest in loan repayments received for the year was $154,272.
NOTE 4 – Program Costs
The amounts shown as current year expenditures represent only the federal grant portion of the program costs.
Entire program costs, including the City’s portion, are more than shown. Such expenditures are recognized
following, as applicable, either the cost principles in the OMB Circular A-87, Cost Principles for State, Local,
and Indian Tribal Governments, or the cost principles contained in Title 2 U.S. Code of Federal Regulations
Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards,
wherein certain types of expenditures are not allowable or are limited as to reimbursement.
Note 5 – Federal Loans
The city was approved by Department of Ecology to receive a loan totaling 30,951,000 in 2024 to
renovate Public Works Reuse Facility winter storage. The amount listed for this loan includes the
expenses funded with the loan proceeds withing the current fiscal year.
Page 134
Office of the Washington State Auditor sao.wa.gov
CORRECTIVE ACTION PLAN FOR FINDINGS REPORTED UNDER
UNIFORM GUIDANCE
City of Pasco
January 1, 2024 through December 31, 2024
This schedule presents the corrective action planned by the City for findings reported in this report
in accordance with Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform
Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards
(Uniform Guidance).
Finding ref
number:
2024-001
Finding caption:
The City did not have adequate internal controls to ensure accurate
reporting of its financial statements.
Name, address, and telephone of City contact person:
Griselda Garcia, Interim Finance Director
525 N. Third Ave
Pasco, WA 99301
Corrective action the auditee plans to take in response to the finding:
For the 2025 ACFR, a core team of seasoned ACFR preparers will be essential to complete
the report. To facilitate capacity building among less experienced staff, designated personnel
without preparatory responsibilities will be tasked with reviewing and validating ACFR data.
Furthermore, based on the findings of the 2024 ACFR misstatement review mandated by the
Washington State Auditor’s Office, the Department will prioritize financial duties accordingly.
This approach will incorporate on-the-job training strategies to enhance the competency of
less experienced staff.
Conversely, infrastructure replacement and retirement activities present greater challenges.
Typically, when roadway segments are upgraded or replaced, comparisons are not conducted
on a segment-by-segment basis. It will be necessary to explore measurement methodologies
that enable standardized evaluation and documentation of roadway modifications based on a
uniform unit of measure.
Anticipated date to complete the corrective action:
Page 135
Office of the Washington State Auditor sao.wa.gov
Finding ref
number:
2024-002
Finding caption:
The Pasco Public Facilities District’s internal controls were inadequate
to ensure financial statements were accurate and complete.
Name, address, and telephone of City contact person:
Griselda Garcia, Interim Finance Director
525 N. Third Ave
Pasco, WA 99301
Corrective action the auditee plans to take in response to the finding:
As noted in the response to the finding, the 2024 PPFD statements reflected significant changes
from prior year reporting. Similar restrictions associated with staff experience and availability
that were noted in Finding 2024-001 resulted in demands that were a detriment to accurate,
complete statement preparation. For the 2025 ACFR, a core team of seasoned ACFR preparers
will be essential to complete the report. To facilitate capacity building among less experienced
staff, designated personnel without preparatory responsibilities will be tasked with reviewing
and validating ACFR data. Furthermore, based on the findings of the 2024 ACFR misstatement
review mandated by the Washington State Auditor’s Office, the Department will prioritize
financial duties accordingly. This approach will incorporate on-the-job training strategies to
enhance the competency of less experienced staff.
An improved reconciliation process for cash to bank comparison has been implemented in
discrepancies.
Anticipated date to complete the corrective action:
submission, May 2026
Page 136
Office of the Washington State Auditor sao.wa.gov
ABOUT THE STATE AUDITOR’S OFFICE
The State Auditor’s Office is established in the Washington State Constitution and is part of the
executive branch of state government. The State Auditor is elected by the people of Washington
and serves four-year terms.
We work with state agencies, local governments and the public to achieve our vision of increasing
trust in government by helping governments work better and deliver higher value.
In fulfilling our mission to provide citizens with independent and transparent examinations of how
state and local governments use public funds, we hold ourselves to those same standards by
continually improving our audit quality and operational efficiency, and by developing highly
engaged and committed employees.
As an agency, the State Auditor’s Office has the independence necessary to objectively perform
audits, attestation engagements and investigations. Our work is designed to comply with
professional standards as well as to satisfy the requirements of federal, state and local laws. The
Office also has an extensive quality control program and undergoes regular external peer review
to ensure our work meets the highest possible standards of accuracy, objectivity and clarity.
Our audits look at financial information and compliance with federal, state and local laws for all
local governments, including schools, and all state agencies, including institutions of higher
education. In addition, we conduct performance audits and cybersecurity audits of state agencies
and local governments, as well as state whistleblower, fraud and citizen hotline investigations.
The results of our work are available to everyone through the more than 2,000 reports we publish
each year on our website, www.sao.wa.gov. Additionally, we share regular news and other
information via an email subscription service and social media channels.
We take our role as partners in accountability seriously. The Office provides training and technical
assistance to governments both directly and through partnerships with other governmental support
organizations.
Stay connected at sao.wa.gov
• Find your audit team
• Request public records
• Search BARS Manuals (GAAP and
cash), and find reporting templates
• Learn about our training workshops
and on-demand videos
• Discover which governments serve you
— enter an address on our map
• Explore public financial data
with the Financial Intelligence Tool
Other ways to stay in touch
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Page 137