HomeMy WebLinkAbout2011 ACFR COMPREHENSIVE ANNUAL
FINANCIAL REPORT
CITY OF PASCO, WASHINGTON
FOR THE FISCAL YEAR ENDED
DECEMBER 31, 2011
CITY OF
L PASCO V1
Prepared by
Finance Division
Dunyele Mason, CPA- Financial Services Manager
Administrative and Community Services Department
Richard G. Terway - Director
City of Pasco, -Washington 2011 Comprehensive AnnuaCF nancialReport
TABLE OF CONTENTS
INTRODUCTORY SECTION
Letterof Transmittal ............................................................................................ 1
Certificate of Achievement for Excellence in Financial Reporting....................................... 7
OrganizationalChart ........................................................................................... 8
Directory of City Officials..................................................................................... 9
Directory of Management Team.............................................................................. 10
FINANCIAL SECTION
Independent Auditor's Report ................................................................................. 11
Management's Discussion and Analysis .................................................................... 13
Basic Financial Statements
Government Wide Financial Statements
Statement of Net Assets... ......................................................................................... 26
Statement of Activities..................................................................................... 27
Fund Financial Statements
Balance Sheet—Governmental Funds......................................................................................... 28
Statement of Revenues, Expenditures and Changes in Fund Balances—Governmental Funds.. 29
Reconciliation of Statement of Revenues, Expenditures and Changes in Fund Balance of
Governmental Funds to the Statement of Net Assets.................................................. 30
Statement of Revenues, Expenditures and Changes in Fund Balances—Budget and Actual-
GeneralFund.............................................................................................. 31
Statement of Net Assets -Proprietary Fund............................................................. 32
Statement of Revenues, Expenses and Changes in Net Assets—Proprietary Funds .............. 33
Statement of Cash Flows—Proprietary Fund .......................................................... 34
Statement of Net Assets—Fiduciary Funds ............................................................ 35
Statement of Changes in Net Assets—Fiduciary Funds................................................ 36
Notes to Financial Statement.................................................................................. 37
Required Supplementary Information
Firemen's Pension Fund.................................................................................. 77
Other LEOFF 1 OPEB.................................................................................... 78
Firemen's OPEB Fund.................................................................................... 79
Combining and Individual Fund Statements
Combining Balance Sheet—Nonmajor Other Governmental Funds ................................ 81
Combining Statement of Revenues, Expenditures and Changes in Fund Balance-
Nonmajor Other Governmental Funds ................................................................ 82
Combining Statement of Expenditures—Budget to Actual—Nonmajor Other Governmental Funds 83
Combining Balance Sheet—Nonmajor Special Revenue Funds ................................... 84
Combining Statement of Revenues, Expenditures and Changes in Fund Balance-
Nonmajor Special Revenue Funds...................................................................... 88
Combining Balance Sheet—Nonmajor Debt Service Funds.......................................... 92
City of Pasco, -Washington 2011 Comprehensive AnnuaCF nancialR.eport
TABLE OF CONTENTS (continued)
Combining Statement of Revenues, Expenditures and Changes in Fund Balance-
Nonmajor Debt Service Funds.......................................................................... 93
Combining Balance Sheet—Nonmajor Capital Project Funds....................................... 94
Combining Statement of Revenues, Expenditures and Changes in Fund Balance-
Nonmajor Capital Project Funds........................................................................ 95
Combining Statement of Net Assets—Nonmajor Internal Service Funds........................... 97
Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets—
Nonmajor Internal Service Funds...................................................................... 98
Combining Statement of Cash Flows—Nonmajor Internal Service Funds................................ 99
Combining Statement of Net Asset—Fiduciary Funds................................................ 101
Combining Statement of Changes in Net Assets—Fiduciary Funds.................................. 103
Combining Statement of Changes in Assets and Liabilities—Agency Funds...................... 104
STATISTICAL SECTION
Financial Trends
NetAssets by Component...................................................................................................... 108
Changesin Net Assets................................................................................................................ 109
Governmental Activities Tax Revenues by Source....................................................... 111
Fund Balances of Governmental Funds................................................................................... 112
Changes in Fund Balances of Governmental Funds................................................................ 113
Revenue Capacity
Assessed Value of Taxable Property/Excise Taxes by Type........................................................ 114
Property Tax Rates /Taxable Retail Sales................................................................................ 115
Principal Property Taxpayers.................................................................................................... 116
Principal Excise Taxpayers .................................................................................... 117
Top Ten Industries that Generate Sales Tax.............................................................. 118
Property Tax Levies and Collections...................................................................................... 119
Debt Capacity
Ratios of Outstanding Debt by Type/Ratio of General Bonded Debt Outstanding....................... 120
LegalDebt Margin.............................................................................................................. 121
Pledged Revenue Coverage..................................................................................................... 122
Direct and Overlapping Governments Activities Debt................................................... 123
Demographic and Economic Information
Demographic and Economic Statistics.......................................................................................... 124
PrincipalEmployers...................................................................................................... 125
Non Agriculture Wage and Salary Workers.............................................................. 126
BuildingPermits............................................................................................. 127
Operating Information
Full Time Equivalent City Government Employees by Function...................................... 128
Operating Indicators by Function......................................................................... 129
Capital used by Function................................................................................... 130
City of Pasco, -Washington 2011 Comprehensive AnnuaCF nancialPeport
STATE REQUIRED SCHEDULES
Schedule 9 - Long-Term Debt- L.I.D. Assessments & General Obligations and Revenue........... 132
Schedule 10—Limitation of Indebtedness.................................................................... 133
Schedule 16 -Expenditures of Federal, State and Local Financial Assistance.......................... 134
Notes to Schedule of Expenditures of Federal, State and Local Financial Assistance.................. 136
Schedule 19 - Labor Relations Consultants.................................................................. 137
Schedule 21 —Local Government Risk Assumption....................................................... 138
Acknowledgements ............................................................................................. 140
City of Pasco, -Washington 2011 Comprehensive AnnuaC E nancial Report
"Appreciation is a wonderful thing; it makes what is excellent in others
belong to us as well."
Voltaire
City of Pasco, -Washington 2011 Comprehensive .annual T nandaC eport
6/20/2012
Honorable Mayor, Members of the City Council and Pasco Citizens
City of Pasco, Washington
We are pleased to submit the Comprehensive Annual Financial Report (CAFR) of the City of
Pasco for the year ended December 31, 2011. State law requires that within 150 days of the
close of each fiscal year all general-purpose local governments publish a complete set of
financial statements presented in conformity with general accepted accounting principles
(GAAP) and audited in accordance with generally accepted auditing standards by licensed
certified public accountants. The City of Pasco is audited by the State of Washington Auditor's
Office. Pursuant to that requirement, we are issuing an audited comprehensive financial report
for the City of Pasco for the fiscal year ended December 31, 2011.
This report consists of management's representation concerning the finances of the City of
Pasco. Consequently, management assumes full responsibility for the completeness and
reliability of the information in this report. In order to provide a basis for making these
representations, the management of the City of Pasco has established a comprehensive internal
control framework designed to protect the government's assets from loss, theft or misuse and to
compile reliable information for the preparation of the City of Pasco's financial statements in
conformity with GAAP. Because the cost of internal controls should not outweigh the benefits,
the City of Pasco's comprehensive framework of internal controls has been designed to provide
reasonable rather than absolute assurance that the financial statements will be free from material
misstatement. As management, we assert that, to the best of our knowledge and belief, this
financial report is complete and reliable in all material respects.
The City of Pasco financial statements have been audited by the State's Auditor's Office. The
goal of the independent audit is to provide reasonable assurance that the financial statements of
the City of Pasco for the fiscal year ended December 31, 2011 are free of material misstatement.
The independent audit involved examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements; assessing the accounting principles used and significant
estimates made by management; and evaluating the overall financial statement presentation. The
independent auditor concluded, based upon the audit, that there was a reasonable basis for
rendering an unqualified opinion that the City of Pasco's financial statements for the fiscal year
ended December 31, 2011 are fairly presented in conformity with GAAP. The independent
auditor's report is presented as the first component of the financial section of this report.
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City of Pasco, -Washington 2011 Comprehensive .annualTinanciaC eport
The independent audit of the financial statement information for the year ended December 31,
2011 also required a broader federal mandated "Single Audit" designed to meet the special needs
of federal grantor agencies. The City expended sufficient federal funds during the fiscal year to
justify this additional audit. The standards governing Single Audit engagements require the
independent auditor to report not only on the fair presentation of the financial statements but also
on the audited government's internal controls and compliance with legal requirements with
special emphasis on internal controls and legal requirements involving the administration of
federal awards.
GAAP requires that management provide a narrative introduction, overview and analysis to
accompany the basic financial statements in the form of Management's Discussion and Analysis
(MD&A). This letter of transmittal is designed to complement the MD&A and should be read in
conjunction with it. The city of Pasco's MD&A can be found immediately following the report
of the independent auditors.
Profile of the City of Pasco
The City of Pasco is located in south central Washington(Franklin County) in the Mid-Columbia
region of the Pacific Northwest. The City encompasses approximately 34 square miles. Pasco
serves as the Franklin County seat and is the largest city in the County. Pasco and the
neighboring cities of Richland, Kennewick and surrounding area which are located in Benton
County, make up the Tri-Cities Metropolitan Area, the fourth largest urban area in Washington
State. The 2000 census population of Pasco was 32,066, while the Tri-Cities Metropolitan Area
was 186,600. The 2010 census population for the City of Pasco was 59,781 and the 2010 Tri-
Cities Metropolitan Area population was approximately 25 3,340. For 2011 the city' population is
estimated at 61,000. This represents a 90% growth rate in Pasco's population since the 2000
census.
Initially established in 1884, the City was incorporated in 1891, and has operated under state
laws applicable to a code city with a Council/Manager form of government since May 5, 1964.
The City Manager is appointed by the City Council and is responsible to the City Council for the
proper administration of all City operations. Council members are elected for four year
overlapping terms through citywide elections. The City Council is comprised of seven members,
one of which is selected by the members to serve as Mayor for a two-year term. Council
members are part-time elected officials who exercise legislative authority and determine matters
of policy for the City.
The City is a general-purpose government and provides the full range of municipal services
authorized by state law. These services include police and fire protection, ambulance service,
parks and recreation activities, street maintenance and construction, planning and zoning and
general administrative services. The City owns and operates a water/sewer system, a cemetery
and a championship golf course. The City also owns a baseball stadium that is leased to an
independent operator.
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City of Pasco, -Washington 2011 Comprehensive .annualTinanciaCReport
Local Economy
The City's economy is directly based on agriculture and related food processing and
transportation. Farmland comprises the majority of the County's land area. The County has
estimated total farm acreage of 492,000, comprised of 242,000 irrigated acres and 250,000 dry
land acres. Portions of the County lie within one of the world's largest irrigation districts, the
U.S. Bureau of Reclamation's Columbia Basin Irrigation Project. In the early 1940's Congress
authorized a plan to provide for irrigation of over 1 million acres in the Columbia Basin region
of Washington State. Construction of the Irrigation Project began in 1946. The Grand Coulee
Dam is the only source of both water and hydroelectric power for the Project.
With the growth in farm production due to the Irrigation Project, food processing has become a
major factor in the area's economy. The Pasco Processing Center (the "Center"), a 240-acre
industrial park designed for the food processing industry, was constructed in 1995. The Center
provides food processors the unique advantage of handling wastewater disposal via the City's
industrial wastewater system rather than the general sewer system. The Center was developed
jointly by the City, Port of Pasco and Franklin County Public Utility District. This system
pumps the wastewater into huge storage ponds, which is sprayed onto crops for disposal. These
storage ponds allow processors to operate year round. Since completion, several large food
processors have built plants that utilize this facility. J.R. Simplot Food Group (now known as
Pasco Processing LLC) opened a $32 million frozen vegetable processing plant at the Center in
1995 employing 250 full time employees with 500 more during peak seasons. Americold
constructed an $8 million freezing facility that employs 100 full time workers. Twin City Foods
completed construction on its $20 million frozen corn processing plant at the Center in 1998 and
employs approximately 100 full time workers with 200 more during peak seasons. Reser's Fine
Foods completed construction of a $15 million fresh potato products plant in 1998 that employs
between 75 and 100 full time workers. Bybee Fresh Foods completed construction of a $12
million processing plant in 2006 and relocated its Yakima Valley operations. In 2009, Syngenta
completed construction of a $42 million seed processing facility to serve its global markets. The
other major food processor in the area, Lamb Weston, operates a French fry processing plant just
north of the City limits employing about 700 workers.
The major reason for the rapid growth of the Tri-Cities in the 1970's was the expansion of the
Hanford Nuclear Reservation, which has evolved into one of the largest nuclear industrial centers
in the United States. Located in Benton County, the Hanford Reservation encompasses
approximately 560 square miles and contains various nuclear and nuclear-related projects,
serving as a national energy resource center. Today, the focus is on energy research,
environmental remediation/waste management and related technology. A 40-year Tri-Party
Agreement was signed by the U.S. Department of Energy, the State and the U.S. Environmental
Protection Agency, which established a plan to "cleanup" the environment of the Hanford
Reservation. The overall plan is intended to improve radioactive and chemical waste disposal
and to manage future waste generated at the site.
The commitment to tourism as a means of economic diversification has been a combined effort
of the public and private sectors. In 1994, a professional minor league baseball stadium was
built. The stadium seats 4,000 and includes a parking lot for 1,000 automobiles. The stadium is
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City of Pasco, -Vashinqton 2011 Compreliensive .Annual EtnancialReport
currently leased to Northwest Baseball Ventures I, LLC, owners of the Tri-City Dust Devils and
a single A affiliate of the Colorado Rockies of Major League Baseball.
In 1995, the $9.5 million Trade Recreation Agriculture Center (TRAC) was built through a joint
venture between the City of Pasco and Franklin County. TRAC includes a rodeo and livestock
arena, exhibition hall, meeting rooms, a concession area, and administrative offices.
Additionally, an adjoining 15-field soccer complex occupying 45 acres was developed in 1995
and shares the stadium parking lot. The complex is the State's second largest and has become a
popular location for tournament play. In 2000, the City completed construction of a $3.5 million
six field softball complex in the TRAC area. The City added lights to the softball fields in 2002.
The push for additional tourism continues. A pavilion was constructed at the TRAC facility that
added an ice rink and additional rental space; and in 2001, the City owned Sun Willows Golf
Course Clubhouse was completely renovated and the irrigation system completely replaced in
2003.
Pasco is also the home of the region's only international airport, train and bus depots.
Summary of Current and Future Economic Outlook
The economy both nationally and locally has been a major news topic for the past several years.
Incidents that have negatively impacted the economy are: the slowdown in the economy
particularly in the manufacturing sector, inflation increases, corporate bankruptcies, layoffs and
relocations, the War on Terrorism, and soaring gasoline and energy prices.
Residential home, retail business and professional office construction have continued to grow,
with a high concentration of new growth taking place in the Interstate I-182 and Road 68 area.
Over the past 7 years, Wal-Mart opened a super center store; Lowe's opened a home
improvement store; and a 12-screen theater complex opened. New restaurants and other service
businesses have opened to serve the residential growth in the surrounding area. Residential
home construction has also been renewed in the area along A Street and Highway 12.
In 2009, the Pasco School District completed construction of the 341,000 square foot Chiawana
High School, the second high school for the community. The total contract amount was $72
million and was completed on time to start school in the fall of 2009.
In 2011, the Pasco economy was stable and continued to grow but at a slower pace. The city
issued a total of 2,134 building permits representing approximately $133 million in construction
costs. Of the total permits, 483 were for new single-family residences which equates to $105
million in assessed valuation. The average value of a new home in Pasco was just over$218,000
in 2011.
While total revenue to the general fund is expected to grow by more than $2 million, tax revenue
is estimated to grow by only 1.5% in 2012 as compared to 2011's budget. When compared to
2008 actual tax receipts, the 2012 projection of tax revenues reflects less than 1% increase over
the past four years. For the past decade the city has opted to "bank"the levy capacity rather than
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City of Pasco, -Washington 2011 Comprehensive .annual TinanciaC eport
increase property taxes by the maximum legal limit. This has resulted in an accumulated banked
levy capacity of$1,601,917.
In 2011 the county's residents approved a new three tenths of one percent sales tax increase
devoted to criminal justice. This new revenue source will fund a new four person Street Crimes
unit in the city's police department,pay the cost (and/or debt service) to replace the city's
Municipal Court building as well as fund the construction of a new police station. In 2011 there
were no personnel lay-offs or furloughs but there were also no pay increases for some personnel
groups in an effort to match available resources.
2012 is planned overall to be a"status quo" year with revenue sources overall holding steady;
while 2013 may face more serious revenue challenges. Given the significant fiscal challenges at
the state level, revenues that are currently received from the state to cities are at risk of reduction
and/or elimination. A 4% decrease in certain state revenues has been factored into the 2012
budget. Discussions at the state level include the possibility of elimination of several of those
revenue sources altogether in 2013. Fortunately the City of Pasco's general fund has sufficient
reserves to address shortfalls in the near term. The city has systematically refinanced debt over
the last several years to take advantage of the lower interest rates thereby lowering its annual
costs. In 2012 the city further plans to use fund balance to early retire a debt issue, thereby even
further reducing annual debt service costs. These reductions in future costs will help cushion the
anticipated future decline in revenues.
In 2011 the city reviewed the costs of providing ambulance and fire services. These two
functions are carried out using many shared resources. Additionally, collections from billing and
the Ambulance Fund balance have continued to decline. The specific identification of ambulance
costs were reviewed and indicated the need for significant additional resources to cover those
costs. Accordingly in 2012, it is anticipated that the subsidy by the General Fund to the
Ambulance fund will increase from $420,000 to $890,000. In 2012 the per household charge for
ambulance service was increased from $3.60 per month to $5.85 per month. The rate was further
approved to increase to $6.25 effective January 1, 2013; which is anticipated to return the
general fund subsidy to $420,000 for 2013.
Awards
The Government Finance Officers Association of the United States and Canada (GFOA)
awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Pasco
for its comprehensive annual financial report for the fiscal year ended December 31, 2010. In
order to be awarded a Certificate of Achievement, a government must publish an easily readable
and efficiently organized comprehensive annual financial report. This report must satisfy both
generally accepted accounting principles and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe that our current
comprehensive annual financial report continues to meet the Certificate of Achievement
Program's requirements and we are submitting it to the GFOA to determine its eligibility for
another certificate.
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City of Pasco, -Washington 2011 Comprehensive .annualTinanciaC eport
Acknowledgments
The preparation of this report would not have been possible without the efficient and dedicated
service of the entire Finance Division staff of the Administrative and Community Services
Department. We would like to express our appreciation to all those who assisted and contributed
to the preparation of this report.
In closing, we would like to thank the members of the City Council for their leadership and
support in planning and conducting the financial affairs of the City in a responsible and
progressive manner.
Respectively submitted,
Gal, c eld Richard G. Teru�ay Dunyele Mason
a ,a er Director Administrative& Financial Services Manager
t
o unity Se ices
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City of Pasco, Washington 2011 Comprehensive AnnuaCEtnanciaCPeport
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Pasco
Washington
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
December 31, 2010
A Certificate of Achievement for Excellence in Financial
Reporting is presented by the Government Finance Officers
Association of the United State and Canada to
government units and public employee retirement
systems whose comprehensive annual financial
reports(CAFRs)achieve the highest
standards in government accounting
and financial reporting.
UZSSTTATeS
President
Executive fAAP0:�d1Tla!!
Executive Director
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City of Pasco, Washington 2011 Comprehensive AnnuaCTnanciaCReport
2011 ORGANIZATIONAL CHART
PASCO CITIZENS
PASCO CITY COUNCIL
CITY MANAGER
DEPUTY CITY MANAGER
COMMUNICATION
SPECIALIST HR MANAGER EXECUTIVE SUPPORT STAFF
MUNICIPAL COURT JUDGE COMMUNITY & ECONOMIC DEVELOPMENT
DIRECTOR
POLICE CHIEF FIRE CHIEF
PUBLIC WORKS/ENGINEERING DIRECTOR ADMINISTRATIVE & COMMUNITY SERVICES
DIRECTOR
WATER/WW UTILITY/STREET MUNICIPAL
TREATMENT PLANT MAINTENANCE FIELD CITY CLERK PROSECUTING
DIV. MANAGER DIV MGR ATTORNEY
INFORMATION RECREATION
SERVICES SERVICES
MANAGER MANAGER
FINANCIAL FACILITIES
SERVICES DIVISION
MANAGER MANAGER
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City of Pasco, Washington 2011 Comprehensive AnnuaCTnanciaCReport
DIRECTORY OF CITY OFFICIALS
As of December 31,2011
LENGTH IN TERM
ELECTED OFFICIALS POSITION EXPIRES
MAYOR
Matt Watkins 2 12/31/2015
COUNCILMEMBERS
Rebecca M.Francik 14 12/31/2015
Michael Garrison 23 12/31/2013
Robert Hoffman 6 12/31/2013
Tom Larsen 10 12/31/2013
Saul Martinez 2 12/31/2013
Al Yenney 4 12/31/2015
LENGTH IN YEARS OF
ADMINISTRATIVE OFFICIALS POSITION SERVICE
CITY MANAGER
Gary D. Crutchfield 27 33
DEPUTY CITY MANAGER
Stanley R. Strebel 2 13
PUBLIC WORKS DIRECTOR
Ahmad Qayoumi 1 I
ADMISTRATIVE&COMMUNITY SERVICES DIRECTOR
Richard G. Terway 2 2
COMMUNITY DEVELOPMENT DIRECTOR
Rick White 4 4
FIRE CHIEF
Robert W. Gear 3 3
POLICE CHIEF
Robert W. Metzger 2mo 2mo
MUNICIPAL COURT JUDGE
David L.Petersen 6mo 6mo
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City of Pasco, Washington 2011 Comprehensive .annual T nandaC eport
MANAGEMENT TEAM
As of December 31, 2011
Gary Crutchfield, City Manager
Stanley R. Strebel,Deputy City Manager
Lynne Jackson, Personnel Manager
Richard G. Terway, Director
Dunyele Mason,Finance Manager
Sarita Cooper, Customer Service Manager
Jesse Rice, Information Services Manager
Carlene Hanscom, Recreation Manager
Dan Dotta, Facilities Manager
Rick White, Director
Michel Nickolds, Inspection Services Manager
Robert W. Gear,Fire Chief
David L. Petersen, Judge
Dorothy R. French, Court Administrator
Robert W. Metzger, Chief
James Raymond, Captain- ISD
Ken Roske, Captain- Patrol
Ahma Qayoumi, Director
Mike Pawlak, City Engineer
Reuel Klempel, Plant Division Manager
Jesse U. Greenough, Field Division Manager
Kent McCue, Construction Manager
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City of Pasco, Washington 2011 Comprehensive .annual T nanciaC eport
� ;4
JM1
Washington State Auditor
Brian Sonntag
INDEPENDENT AUDITOR'S REPORT
June 20,2012
Mayor and City Council
City of Pasco
Pasco,Washington
We have audited the accompanying financial statements of the governmental activities, the business-type
activities, each major fund and the aggregate remaining fund information of the City of Pasco, Franklin
County, Washington, as of and for the year ended December 31, 2011,which collectively comprise the City's
basic financial statements as listed in the table of contents. These financial statements are the responsibility of
the City's management. Our responsibility is to express an opinion on these financial statements based on our
audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards, issued
by the Comptroller General of the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial
respective position of the governmental activities, the business-type activities, each major fund, and the
aggregate remaining fund information of the City of Pasco, Franklin County, Washington, as of December 31,
2011, and the respective changes in financial position and, where applicable, cash flows thereof, and the
respective budgetary comparison for the General fund for the year then ended in conformity with accounting
principles generally accepted in the United States of America.
As described in Note 1, during the year ended December 31, 2011, the City has implemented the
Governmental Accounting Standards Board Statement No. 54 — Fund Balance Reporting and Governmental
Fund Type Definitions.
In accordance with Government Auditing Standards, we will also issue our report dated June 21, 2012, on our
consideration of the City's internal control over financial reporting and on our tests of its compliance with
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City of Pasco, -Washington 2011 Comprehensive .annual financiaC eport
certain provisions of laws, regulations, contracts and grant agreements and other matters. That report will be
issued under separate cover in the City's Single Audit Report. The purpose of that report is to describe the
scope of our testing of internal control over financial reporting and compliance and the results of that testing,
and not to provide an opinion on the internal control over financial reporting or on compliance. That report is
an integral part of an audit performed in accordance with Government Auditing Standards and should be
considered in assessing the results of our audit.
Accounting principles generally accepted in the United States of America require that the management's
discussion and analysis,pension trust fund and information on postemployment benefits other than pensions be
presented to supplement the basic financial statements. Such information, 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 State of America, which
consisted of inquires of management about the methods of preparing the information and comparing the
information for consistency with management's responses to our inquires, the basic financial statements, and
other knowledge we obtained during the 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.
Our audit was performed for the purpose of forming an opinion on the financial statements that collectively
comprise the City's basic financial statements. The accompanying information listed as combining and
individual fund financial statements and supplemental information is presented for purposes of additional
analysis and 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 financial statements. This information has been subjected to auditing procedures applied in the
audit of the basic financial statements and certain additional procedures, including comparing and reconciling
such information directly to the underlying accounting and other records used to prepare the financial
statements or to the 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 taken as a whole.
The information identified in the table of contents as the Introductory and Statistical Section is presented for
purposes of additional analysis and is not a required part of the basic financial statements of the City. Such
information has not been subjected to the auditing procedures applied in the audit of the basic financial
statements and, accordingly,we do not express an opinion or provide any assurance on it.
Sincerely,
BRIAN SONNTAG, CGFM
STATE AUDITOR
Insurance Building,P.O. Box 40021 • Olympia,Washington 98504-0021 • (360)902-0370 •TDD Relay(800)
833-6388
FAX(360)753-0646 • http://www.sao.wa.gov
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City of Pasco, lwashington 2011 Comprehensive AnnuaCLtnanciaCAepor t
MANAGEMENTS' DISCUSSION AND ANALYSIS
As management of the City of Pasco, we offer readers of the financial statements this narrative
overview and analysis of the financial activities of the City of Pasco for the fiscal year ended
December 31, 2011. We encourage readers to consider the information that we have furnished in
our letter of transmittal which can be found starting on page 1 of this report. All amounts, unless
otherwise indicated, are expressed in thousands of dollars.
Financial Highlights
• The assets of the City of Pasco exceeded liabilities at the close of the most recent fiscal
year by$313,962. Of this amount, $42,533 may be used to meet the government's
ongoing obligations to the citizens and creditors.
• The city's total net assets increased by$27,452. Approximately 21% of that increase is
due to increases in business-type activities and 79%to governmental-type activities. The
overall financial position of the city has improved over the prior year.
• As of the close of the current fiscal year, the City of Pasco's governmental funds reported
combined ending fund balances of$26,352, an increase of$4,518 in comparison with the
prior year.
• At the end of the current fiscal year, the unrestricted, unassigned fund balance for the
general fund was $8,050 which also represents 27% of total general fund expenditures.
• Spending on governmental activities included in the Capital Improvement Plan during
2011 totaled$4,302. The largest project continued with 2011 spending on the Lewis
Street overpass project of$2,342. The funding for the 2011 Lewis Street expenditures
was predominantly grant reimbursed. Other street projects included the next phase for the
Kurtzman area redevelopment($522), the start of the 4th Ave Corridor redevelopment
($179) and several smaller street projects. $641 was spent on community housing
redevelopment projects and $375 on park projects ($338 for a new park).
• Spending on business activities included in the Capital Improvement Plan during 2011
totaled$3,933. Included was $494 spent to finish up the new water treatment plant, $526
for the Broadmoor Pump Station improvements with the remainder of the water
construction amount spent on line and meter replacement activities. Sewer construction
was split with $313 for treatment plant upgrades $722 on replacement projects.
Stormwater and the Process Water Reuse Facility spent $117 and$158 respectively on
system replacements. The Irrigation system spent $163 of its total spending of$180 to
build a new well house.
• Private development contributed a total of$22,226 in governmental activity
infrastructure and$4,184 in utility infrastructure.
13
City of Pasco, -Washington 2011 Comprehensive .annualTinanciaC eport
• In 2011 the city issued new debt of$4,199 of which $89 was for a special assessment
note to fund certain street improvements and $4,110 was to refinance existing general
obligation bonds to take advantage of the lower interest rates.
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. Those financial statements comprise 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.
Government-wide financial statements. The government-wide financial statements are
designed to provide readers with a broad overview of the City of Pasco's finances in a manner
similar to a private-sector business. The Statement of Net Assets presents information on all of
the City of Pasco's assets and liabilities with the difference between the two reported as net
assets. Over time increases or decreases in net assets may serve as a useful indicator of whether
the financial position of the City of Pasco is improving or deteriorating.
The statement of activities presents information showing how the government's net assets
changed during the most recent fiscal year. All changes in net assets 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).
The government-wide financial statements distinguish functions of the City of Pasco that are
principally supported by taxes and intergovernmental revenues (Governmental Activities) from
activities that are supported by (Business-Type Activities). The governmental activities of the
City of Pasco include general government, public safety, utilities and environment,
transportation, economic environment, and culture and recreation. The business-type activities
of the City of Pasco include water/sewer (which cover water, sewer, irrigation, process-reuse and
storm water activities), equipment maintenance and equipment replacement services.
The government-wide financial statements can be found on pages 26-27 of this report.
Fund financial statements. A fund is a grouping of related accounts that is used to maintain
control over resources that have been segregated for specific activities or objectives. The City of
Pasco, like other state and local governments, uses fund accounting to ensure and demonstrate
compliance with finance-related legal requirements. All of the funds of the City of Pasco can be
divided into three categories: governmental funds,proprietary funds, and fiduciary 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
14
City of Pasco, Washington 2011 Comprehensive .annual TinanciaC eport
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 of Pasco maintains forty-four individual governmental funds. 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. In 2011 the general fund was the
only major governmental fund. Data from the other funds are combined into a single, aggregate
presentation. Individual fund data for each of these nonmajor governmental funds is provided in
the form of Combining Statements elsewhere in this report.
The City of Pasco adopts an annual appropriated budget for its general fund. A budgetary
comparison statement has been provided for the general fund to demonstrate compliance with
this budget.
The basic governmental fund financial statements can be found starting on page 28 of this report.
Proprietary funds. The City of Pasco 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 of Pasco 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 to the City of Pasco's various functions. The City of Pasco uses internal
service funds to account for its equipment maintenance and replacement, central stores and
medical/dental insurance. 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.
Proprietary funds provide the same type of information as the government-wide financial
statements, only in more detail. The enterprise fund financial statements provide separate
information for the water/sewer fund. 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 starting on page 32.
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
own programs. The accounting used for the fiduciary funds is much like that used for enterprise
15
City of Pasco, -Washington 2011 Comprehensive .annual TinanciaC eport
funds except for agency funds which only show assets and liabilities. The basic fiduciary fund
financial statements can be found on pages 35 of this report.
Notes to the financial statements. The notes provide additional information that is essential to
a full understanding of the data provided in the government-wide and fund financial statements.
The notes to the financial statements can be found starting on page 37.
Government-wide Financial Analysis
As noted earlier, net assets may serve over time as a useful indicator of a government's financial
position. In the case of the City of Pasco, assets exceeded liabilities by $313,962 at the close of
the most recent fiscal year. The largest portion of the City of Pasco's net assets (86%) reflects its
investment in capital assets (e.g. buildings, machinery, equipment, infrastructure, construction in
progress) less any related outstanding debt used to acquire those assets. The city of Pasco uses
these capital assets to provide services to citizens; consequently, these assets are not available for
future spending. Although the City of Pasco's investment in its capital assets is reported net of
related debt, it should be note that the resources needed to repay this debt must be provided from
other resources, since the capital assets themselves cannot be used to liquidate these liabilities.
Less than 1% of the City of Pasco's net assets represent resources that are subject to external
restrictions on how they may be used. The remaining balance of unrestricted net assets (14%)
totaling $42,533 may be used to meet the government's ongoing obligations to citizens and
creditors.
City of Pasco's Net Assets(in millions)
Governmental Activities Business Activities otal Prim Governmen
2011 2010 2011 2010 2011 2010
Current assets $ 34.00 $ 31.22 $ 13.71 $ 15.05 $ 47.71 $ 46.27
Capital and noncurrent assets 151.28 134.30 170.41 167.38 321.69 301.68
Total assets 185.28 165.52 184.12 182.43 369.40 347.95
Current liabilities 3.23 3.88 5.74 5.59 8.97 9.47
Noncurrent liabilities 9.99 11.21 36.48 40.67 46.47 51.88
Total liabilities 13.22 15.09 42.22 46.26 55.44 61.35
Net assets:
Invested in capital,net of debt 141.50 122.34 129.53 124.77 271.03 247.11
Restricted 0.40 0.38 - - 0.40 0.38
Unrestricted 30.16 27.71 12.37 11.40 42.53 39.11
Total net assets $172.06 $150.43 $ 141.90 $136.17 $313.96 $286.60
At the end of the current fiscal year, the city of Pasco is able to report positive balances in all
three categories of net assets, both the government as a whole, as well as for its separate
governmental and business-type activities. The same held true for the prior fiscal year.
The government's net assets increased by $27,452 during the current fiscal year. This increase
represents the degree to which ongoing revenues have exceeded increases in ongoing expenses
16
City of Pasco, -Washington 2011 Comprehensive .Annual EinancialR.eport
mostly through cost containment measures. The increase ($26,410 or 96%) was through
contributions of infrastructure from private development and other governmental agencies.
City of Pasco's Change in Net Assets (in millions)
Governmental Activities Business Activities otal Primar Governmen
2011 2010 2011 2010 2011 2010
Revenues
Program revenues:
Charges for services $ 12.64 $ 10.29 $ 17.77 $ 18.15 $ 30.41 $ 28.44
Operating grants&contributions 1.76 1.45 0.37 2.13 1.45
Capital grants&contributions 25.12 25.49 5.68 4.65 30.80 30.14
General revenues:
Property taxes 6.85 6.08 6.85 6.08
Other taxes 20.16 18.90 20.16 18.90
Investment income and miscellaneous 3.30 2.81 0.18 1.06 3.48 3.87
Total revenues 69.83 65.02 24.00 23.86 93.83 88.88
Program expenses:
General government 6.53 6.92 6.53 6.92
Public safety 19.90 19.42 19.90 19.42
Physical environment 2.41 1.90 2.41 1.90
Transportation 9.85 7.83 9.85 7.83
Health and human services 1.04 1.65 1.04 1.65
Economic environment 0.25 0.80 0.25 0.80
Culture and recreation 7.70 4.72 7.70 4.72
Interest on long term debt 0.52 0.51 0.52 0.51
Water 6.85 6.54 6.85 6.54
Sewer 7.92 6.94 7.92 6.94
Process water reuse 1.50 1.44 1.50 1.44
Storm water 0.96 0.79 0.96 0.79
Irrigation 1.04 1.05 1.04 1.05
Total expenses 48.20 43.75 18.27 16.76 66.47 60.51
Changes in net assets 21.63 21.27 5.73 7.10 27.36 28.37
Transfers - 0.15 - 0.15 - -
Total changes in net assets $ 21.63 $ 21.12 $ 5.73 $ 7.25 $ 27.36 $ 28.37
Governmental activities. Governmental activities increased the City of Pasco's net assets by
$21,724 or 79% of the total change in net assets. $22,226 of increase was from contributions of
infrastructure from private and other governmental agencies.
While the pace of construction slowed in 2011 as compared to the prior year, residential growth
continued in the city. For the most part, the city weathered the general economic challenges
throughout the state with a continued growth and a net change ($1,873 on $26,854) in tax
revenues. Property tax revenues continued to grow through increases in new construction and
assessed valuation and sales tax continued to grow from new construction and continued
improved economic climate. The city was able to maintain status quo on the number of approved
personnel positions and avoided lay-offs. The city was able to fund step increases, bargaining
positions received contractual adjustments; nonrepresented personnel received no cost of living
adjustment in 2011. Without regard to the contributed capital assets, the city's governmental
activity revenue of$47,447 was slightly less than related expenses of$48,097.
17
City of Pasco, Washington 2011 Comprehensive .annual EtnanciaCReport
GOVERNMENTAL ACTIVITES -REVENUES BY SOURCE
Sources of Revenues 2011 Sources of Revenues 2010
Investment Charges for
income and services Investment
miscellaneous 18% income and Charges for
5% miscellaneous services
4% 16%
Operating
Grants& Operating
Contributions grants&
Other Taxes 2 Other taxes contributions
2%
29% 29%
Property
Property y - --- Capital taxes Capital
grants&
10% grants& 10% contributions
contributions 39
36
GOVERNMENTAL ACTIVITIES -EXPENSES AND PROGRAM REVENUES
20.00
18.00
16.00
14.00
z 12.00
10.00
J_
8.00
6.00
4.00
2.00
fie; �a�\°� �e�� tJ\`e5 ate\°� oep�
10 0Q,
0
■2011 Expense ■2011 Revenue 2010 Expense ■2010 Revenue
18
City of Pasco, -Washington 2011 Comprehensive .annualTinancialR.eport
Business-type activities. 21% of the increase in the City of Pasco's net assets was related to
business-type activities. $5,671 of the $5,728 increase (99%) was from capital contributions. The
city implemented a stormwater rate increase and a sewer rate decrease in 2011. The changes in
these rates were expected to have offsetting impact on residential customers. The stormwater rate
increase was needed due to recover the full costs of doing business. The sewer rate decrease was
possible due to the continued strong growth in sewer customers to assist in paying for the
existing sewer treatment plant. Without regard to the contributed capital assets, the city's
business activity revenues of$19,632 exceeded related expenses of$18,265.
UTILITY ACTIVITIES —EXPENSES AND PROGRAM REVENUES COMPARISON
10.00
9.00
8.00
7.00
z
6.00
CJ
2
5.00
4.00
3.00
2.00
1.00 T
Water Sewer Process Water Stormwater Irrigation
Reuse
2011 Expense 2011 Revenue 2010 Expense 2010 Revenue
Financial Analysis of the Government's Funds.
As noted earlier, the City of Pasco uses fund accounting to ensure and demonstrate compliance
with finance related legal requirements.
Governmental funds. The focus of the City of Pasco's governmental funds is to provide
information on near-term inflows, outflows and balances of spendable resources. Such
information is useful in assessing the City of Pasco financing requirements. In particular,
unreserved fund balance may serve as a useful measure of a government's net resources
available for spending at the end of the fiscal year.
19
City of Pasco, -Washington 2011 Comprehensive .annual TinanciaC eport
As of the end of the current fiscal year, the City of Pasco governmental funds reported combined
ending fund balances of $26,352 an increase of $4,518 in comparison with prior year.
Approximately 30% of this total amount, $7,872 constitutes unassigned fund balance which is
available for spending at the government's discretion.
The general fund is the chief operating fund of the City of Pasco. At the end of the current fiscal
year, unassigned fund balance of the general fund was $8,050 As a measure of the general fund's
liquidity, it may be useful to compare unrestricted, unassigned fund balance to total expenditures.
This represents 27% of total expenditures.
The fund balance of the City of Pasco's general fund increased by $2,100 during the current
fiscal year; which is 6.5% of current year revenues. Overall revenues increased by 8.7% ($2,616)
and total expenditures increased by 11.5% ($3,465). General fund revenues were affected by
$330 in property taxes plus sales tax increases of $1,100 (both due largely to the continued
increases in construction); gas utility taxes were up $100 while most of the other business taxes
remained fairly flat. Gambling taxes were also up $184. More was received in grant revenues
($100) and increased Engineering service charges of $572 (due to reorganization where the
utility engineers were moved to the general fund engineering division thus revenue from their
services for construction activities was received into the general fund and not the utility fund).
The city was able to maintain status quo on the number of approved personnel positions and
avoided lay-offs. Several vacant police positions went unfilled for most of the year. The city was
able to fund step increases, but there was not a general cost of living wage adjustment in 2011
for nonrepresented and management employees. Union employees were paid per contract terms.
When removing the effect of the refinancing of debt, the general fund revenues of$32,541 were
more than related expenses of$29,366.
There were two individual fund changes in 2011. The first was the creation of a new Golf Course
fund. This new special revenue fund was created to account for the activities of the city golf
course and is run by a contract management company on the city's behalf. Previously, the golf
course was leased to an outside company and the general fund received rental revenue for the
land lease, but the revenues and costs of running the golf course were not included in the city's
accounts. The second change was the reclassification of what was reported as a special revenue
fund in the prior year as the Contingency fund was reclassified and included as part of the
general fund in the current year pursuant to the new fund definitions contained in GASB 54.
Proprietary funds. The City of Pasco enterprise funds provide the same type of information
found in the government-wide financial statements, but in more detail and separately states the
activity of the Water/Sewer Utility separate from the internal service funds. Unrestricted net
assets of the utility fund at the end of 2011 were $10,797. The working capital ratio is the current
assets less current liabilities and is a measure of liquidity for the utility to meet its short term
payment obligations. At the end of 2011 the utility is well positioned as it has current assets of
$12,137 available to meet its current liability obligations of$5,740 resulting in a working capital
ratio of 2.11. The utility showed a loss before contributions and transfers of($392). Stormwater
rates were increased in 2011 and a second increase took effect February 1, 2012. The city
continues to invest in both new infrastructure due to growth in population as well as replacing
20
City of Pasco, lwashington 2011 Comprehensive .annualTinanciaC eport
existing infrastructure as needed. The city has a meter and service replacement program with the
goal of replacing the meters on an average of once every ten years. The utility actively
participates with its customer utilizing utility local improvement districts to supplement the rate
payer's participation in capital construction.
General Fund Budgetary Highlights
During the year there was an increase of 19% or $5,818 in appropriations between the original
and final amended budget for current, debt and capital outlays. $4,655 of the increase was related
to authorization to refinance the 2011 GO bond issue. $95 was to provide authorization to
expend a new grant, $174 was to provide for additional legal services and care of prisoners and
$164 to accommodate the consolidation of engineers from the utility to the general fund.
Additional appropriation approval was obtained for transfers for construction ($468); provide
approval for overnight liquidity loans at year end ($935); and to increase subsidies to other funds
($598 which were also affected by the engineering reorganization and charges). The overnight
loans were approved to provide liquidity to several funds in case grant revenues were not
received prior the end of the year. Grant revenue and other resources were received so most of
the loan authorization was not utilized as only$703 of interfund loans was actually issued.
Capital funding authorized in the original budget ($453) went substantially unspent with only
$177 spent in 2011. Capital spending was canceled or postponed given the uncertainty of the
economic climate in 2011.
Actual expenditures were 97% of the revised budget, actual revenues were 107% of the revised
budget. Actual revenues exceeded actual expenditures in by$3,011 (9%). Like capital, operating
expenditures were held in check given the economic uncertainty affecting revenues.
Capital Asset and Debt Administration
Capital assets. The City of Pasco's investment in capital assets for its governmental and
business-type activities as of December 31, 2011 amounts to $319,582 (net of accumulated
depreciation). This investment in capital assets includes land, buildings, improvements
machinery and equipment, park facilities, roads, water and sewer treatment plants, etc. The total
change in the City of Pasco's capital assets (net of depreciation) for the current year was an
increase of 17,673 for governmental activities and an increase of 3,418 for business-type
activities.
Major capital asset events during the current fiscal year included the following:
• Spending on governmental activities included in the Capital Improvement Plan during
2011 totaled $4,302. The largest project continued with 2011 spending on the Lewis
Street overpass project of$2,342. The funding for the 2011 Lewis Street expenditures
was predominantly grant reimbursed. Other street projects included the next phase for the
Kurtzman area redevelopment($522),the start of the 4th Ave Corridor redevelopment
($179) and several smaller street projects. $641 was spent on community housing
redevelopment projects and $375 on park projects ($338 for a new park).
21
City of Pasco, -Washington 2011 Comnreliensive .Annual EinancialReport
• Spending on business activities included in the Capital Improvement Plan during 2011
totaled $3,933. $494 was spent to finish up the new water treatment plant, $526 on the
Broadmoor Pump Station improvements with the remainder of the water construction
amount spent on line and meter replacement activities. Sewer construction was split with
$313 for treatment plant upgrades $722 on replacement projects. Stormwater and the
Process Water Reuse Facility spent $117 and $158 respectively on system replacements.
The Irrigation system spent $163 of its total spending of$180 to build a new well house.
Additional information on the City of Pasco's capital assets can be found in note 4.C. starting on
page 51 of this report.
City of Pasco's Capital Assets at Year-End(in millions)
(Net of Depreciation)
Governmental Activities Business-Type Activities JTotal Primary Government
2011 2010 2011 2010 2011 2010
Land $ 7.55 $ 7.12 $ 6.60 $ 6.60 $ 14.15 $ 13.72
Construction in process 5.65 2.86 13.90 12.87 19.55 15.73
Buildings and structures 25.46 25.75 34.12 36.51 59.58 62.26
Other improvements 5.07 5.72 - - 5.07 5.72
Machinery and equipment 3.94 4.00 2.39 2.17 6.33 6.17
Infrastructure 102.61 87.33 112.30 107.80 214.91 195.13
Total capital assets $ 150.28 $ 132.78 $ 169.31 $ 165.95 $ 319.59 $ 298.73
Long-term debt. At the end of the current fiscal year, the City of Pasco had total bonded debt
outstanding of$34,390. Of this amount $7,670 comprises debt backed by the full faith and credit
of the government. $26,240 of the City of Pasco bonded debt represents bonds secured primarily
by specified revenue resources (i.e. revenue bonds). The city has $480 in special assessment
bonds and $89 of special assessment notes outstanding at the end of 2011; both of which are
secured by the LID Guarantee Fund.
The city refinanced the outstanding balance of its 2001 issue of general obligation bonds.
Additionally, the city issued a new special assessment Note for $89 to cover the remaining costs
of neighborhood improvements to street infrastructure for LID 146 that was not covered be grant
funding or early pre-payments. The Note was issued by the city and it was purchased by the
city's Fire Pension Fund as an investment.
Additional information on the City of Pasco's long term liabilities can be found in note 4.17.
starting on page 55 of this report.
City of Pasco's Bonds and Notes
(in millions)
Governmental Activities Business-Type Activities JTotal Primary Government
2011 2010 2011 2010 2011 2010
General Obligation Bonds $ 7.67 $ 8.94 $ - $ - $ 7.67 $ 8.94
Special As s es s ement Bonds&Notes 0.57 $ 0.79
Revenue Bonds 26.24 29.13 26.24 29.13
Notes 0.54 0.71 13.53 15.06 14.07 15.77
Total $ 8.78 $ 10.44 $ 39.77 $ 44.19 $ 47.98 $ 53.84
22
City of Pasco, -Washington 2011 Comprehensive .annualTinanciaC eport
Economic Factors and Next Year's Budgets and Rates (amounts not in thousands)
While the rest of the nation continued its struggle to recover from the financial crisis, the Tri-
Cities (and Pasco) are still continuing to grow. The city's population has increased to 61,000
persons. Next year the relatively stable local economy and low interest rates are expected to
continue fostering more housing construction; though at a slower pace than the recent past. The
general fund is expected to hold even in 2012 and is preparing for possible cuts in 2013 revenue
as the state's fiscal challenges remain. 2012 total general fund revenue is expected to remain at
about $32 million which is just $1 million more than 2008's revenue. Existing sales tax is
expected to remain stable as tax on construction is expected to offset decreases in other
discretionary taxable sales. Effective April 1, 2012 the city will start receiving an additional three
tenths of one percent of new sales tax to be used for criminal justice purposes which was passed
by a vote of the people in November 2011. This tax will be used to fund a new Street Crimes
division (including four new positions) of the police department. The rest of the sales tax is
currently planned to fund the replacement of the Municipal Court space inside a new County
Courthouse and to fund debt service for a new city police station. Utility tax receipts which
represent approximately 25% of the total general fund revenues are expected to remain generally
flat overall. Property tax receipts will be expected to increase modestly due solely to the
expected addition of at least $75 million in new taxable construction value within the city. The
depressed national economic conditions suggest that interest rates will remain low for most of
2011. With the remainder of the city's longer term investment portfolio maturing, the interest
income from new investments in 2011 are expected to be significantly less than the past several
years even thought the overall amount invested will remain fairly stable.
Step increases have been funded in the 2012 budget but a general wage increase has not.
Contractual increases per union contracts will be funded. The medical/dental fund accounts for
the self-insured provision of medical/dental benefits in lieu of purchasing a healthcare insurance
plan from the marketplace. Over the 20+ years of self-insured operation, the average
cost/employee is notably lower than comparable cities, underscoring the importance to continue
the self insured model (despite 40% growth in claims over the past four years). The 2012 budget
anticipates another 10% increase in claims expense due largely to expected impacts of the
coverage changes imposed by the new federal health care legislation. Due to increasing claim
costs the reserves are approximately half as compared to the end of 2010. A premium increase
was put in place July 1, 2011 and an additional premium increase occurred January 1, 2012.
Recurring revenue for streets is estimated to total $1.08 million next year, with approximately
three quarters of that in the form of state shared gas tax ($790). In addition, the street fund
receives a direct allocation of local utility tax ($205) as well as the entire cable TV franchise fee
($290). The latter two revenue sources were assigned to the street fund a few years ago (from
the general fund) to reduce reliance on annual transfers from the general fund to support street
maintenance operations. Street construction will remain limited with the primary focus
remaining on the Lewis Street overpass and the 4th Ave corridor projects.
The only fund larger than the general fund is the water/sewer utility fund. The water/sewer utility
fund has grown rapidly over the past few years as it provides services to the thousands of new
23
City of Pasco, -Washington 2011 Comprehensive .annualTinanciaC eport
homes built over the past decade. Utility revenues are expected to continue based on growth. The
city is passed a 67% storm water rate increase in April 2011 (from $1.80 monthly per household
to $3.00 monthly per household). An additional 30% per residential unit rate increase (monthly
rate changed from $3.00 to $3.90) was effective February 1, 2012. The prior rate was not
sufficient to cover current operating costs. While residential sewer was lowered to cushion the
effect of the April 2011 increase, no such offset took place with the February change.
In 2011 the city reviewed the costs of providing ambulance and fire services. These two
functions are carried out using many shared resources. Additionally, collections from billing and
the Ambulance Fund balance have continued to decline. The specific identification of ambulance
costs were reviewed and indicated the need for significant additional resources to cover those
costs. Accordingly in 2012, it is anticipated that the subsidy by the General Fund to the
Ambulance fund will increase from $420,000 to $890,000. In May 2012 the per household
charge for ambulance service was increased from $3.60 per month to $5.85 per month. The rate
was further approved to increase to $6.25 effective January 1, 2013; which is anticipated to
return the general fund subsidy to $420,000 for 2013.
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 Financial Services Manager, PO Box 293, Pasco, WA 99301.
24
City of Pasco, -Washiagton 2011 Comprehensive .annual EtnanciaCPeport
BASIC FINANCIAL STATEMENTS
25
City of Pasco, Washington 2011 Comprehensive AnnuaCTnanciaCReport
Statement of Net Assets
December 31,2011
Governmental Business-Type
Activities Activities Total
ASSETS
Current assets:
Cash&cash equivalents $ 24,898,769 $ 4,263,090 $ 29,161,859
Restricted cash&cash equivalents:
Customer deposits 194,537 568,054 762,591
Unspent bond proceeds - 2,670,000 2,670,000
Revenue bond covenants - 2,657,140 2,657,140
Investments 4,588,657 2,000,000 6,588,657
Receivables(net of allowances):
Taxes 2,056,657 2,056,657
Customers 1,765,587 1,091,837 2,857,424
Grants 415,563 - 415,563
Special assessments 82,936 87,030 169,966
Inventories - 377,455 377,455
Total current assets 34,002,706 13,714,606 47,717,312
Noncurrent assets:
Restricted cash bond reserve 410,000 410,000
Special assessments &loans 786,642 699,201 1,485,843
Joint Ventures 213,036 213,036
Capital assets not being depreciated:
Land 7,551,136 6,598,676 14,149,812
Construction work in progress 5,648,301 13,899,412 19,547,713
Capital assets net of accumulated depreciation:
Buildings and structures 25,458,664 34,119,516 59,578,180
Other improvements 5,074,383 5,074,383
Machinery and equipment 3,936,294 2,389,370 6,325,664
Infrastructure 102,610,403 112,295,371 214,905,774
Total noncurrent assets 151,278,859 170,411,546 321,690,405
Total assets 185,281,565 184,126,152 369,407,717
LIABILITIES
Current liabilities:
Accounts payable 1,325,951 804,162 2,130,113
Due to other governments 22,514 126 22,640
Deposits payable 199,588 568,054 767,642
Accrued interest payable - 696,800 696,800
Compensated absences-current 417,783 120,149 537,932
Loans to other governments-current 173,497 1,575,357 1,748,854
Bonds-current 1,092,408 1,980,000 3,072,408
Total current liabilities 3,231,741 5,744,648 8,976,389
Noncurrent liabilities:
Compensated absences 1,320,839 267,605 1,588,444
Net OPEB obligation 1,149,251 1,149,251
Loans to other governments 369,058 11,955,593 12,324,651
Bonds 7,146,943 24,260,000 31,406,943
Total noncurrent liabilities 9,986,091 36,483,198 46,469,289
Total liabilities 13,217,832 42,227,846 55,445,678
NET ASSETS
Invested in capital assets net of related debt 141,497,275 129,531,395 271,028,670
Restricted permanent fund corpus 400,067 400,067
Unrestricted 30,166,391 12,366,911 42,533,302
Total Net Assets $ 172,063,733 $ 141,898,306 $ 313,962,039
The notes to the financial statements are an integral part of this statement.
26
City of Pasco, Washington 2011 Comprehensive .annual Tinancial Report
Statement of Activities
For the Year Ended December 31,2011
Net Revenue(Expense)and Changes in Net Assets
Program Revenues Primary Government
Charges for Operating Capital
Services,Fines& Grants and Grants& Governmental Business-Type
Functional Programs Expenses Licenses Contributions Contributions Activities Activities Total
Primary Government:
Governmental Activities:
General government $ 6,516,607 $ 1,980,723 $ - $ - $ (4,535,884) $ (4,535,884)
Public safety 19,834,256 3,892,950 387,700 (15,553,606) (15,553,606)
Physical environment 2,405,657 1,331,040 24,042,563 24,042,563
Transportation 9,836,086 1,794,826 576,643 25,117,180 (7,464,617) (7,464,617)
Economic environment 1,040,838 1,458,746 226,038 643,946 643,946
Health and human services 251,021 30,006 70,690 (150,325) (150,325)
Culture and recreation 7,695,618 2,160,505 502,234 (5,032,879) (5,032,879)
Interest on long term debt 517,240 (517,240) (517,240)
Total Governmental Activities 48,097,323 12,648,796 1,763,305 25,117,180 (8,568,042) - (8,568,042)
Business-type Activities:
Water 6,845,027 7,267,150 - 1,800,412 2,222,535 2,222,535
Sewer 7,922,125 6,577,606 108,589 2,581,319 1,345,389 1,345,389
Water Process Reuse 1,501,230 2,234,232 - - 733,002 733,002
Storm Water 959,530 739,995 261,830 - 42,295 42,295
Irrigation 1,036,691 955,231 - 1,289,317 1,207,857 1,207,857
Total Business-Type Activities 18,264,603 17,774,214 370,419 5,671,048 5,551,078 5,551,078
Total Primary Government $ 66,361,926 $ 30,423,010 $ 2,133,724 $ 30,788,228 (8,568,042) 5,551,078 (3,016,964)
General Revenues:
Taxes:
Property taxes 6,847,015 6,847,015
Sales taxes 9,402,620 9,402,620
B&O taxes 8,914,391 8,914,391
Excise taxes 1,838,179 1,838,179
Intergovermental 2,598,542 2,598,542
Investment income and miscellaneous 691,265 176,670 867,935
Total general revenues 30,292,012 176,670 30,468,682
Change in Net Assets 21,723,970 5,727,748 27,451,718
Net Assets Beginning 150,339,763 136,170,558 286,510,321
Net Assets Ending $ 172,063,733 $ 141,898,306 $ 313,962,039
The notes to the financial statements are an integral part of this statement.
27
City of Pasco, Washington 2011 Comprehensive AnnuaCTnandaCReport
Balance Sheet
Governmental Funds
December 31,2011
Other
General Governmental Total
ASSETS
Cash and cash equivalents $ 5,648,875 $ 14,393,663 $ 20,042,538
Restricted cash equivalents-deposits 194,537 - 194,537
Investments 3,588,657 1,000,000 4,588,657
Receivables(net of allowances):
Taxes 1,803,181 253,476 2,056,657
Customers 1,312,257 453,330 1,765,587
Interfund loans 643,000 60,000 703,000
Grants 36,137 379,426 415,563
Special assessments&loans - 869,578 869,578
Total assets 13,226,644 17,409,473 30,636,117
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable 357,414 384,340 741,754
hnterfund loans payable - 1,020,682 1,020,682
Due to other governments 20,389 2,125 22,514
Customer deposits 195,324 4,264 199,588
Deferred revenue 1,395,045 905,028 2,300,073
Total liabilities 1,968,172 2,316,439 4,284,611
Fund Balances:
Nonspendable permanent fund 400,067 400,067
Restricted - 9,496,320 9,496,320
Committed 5,375,032 5,375,032
Assigned 3,208,332 3,208,332
Unassigned 8,050,140 (178,385) 7,871,755
Total fund balances 11,258,472 15,093,034 26,351,506
Total liabilities and fund balance $ 13,226,644 $ 17,409,473
Amounts reported for governmental activities in the statements of net assets
are different because:
Long-term assets used in governmental activities are not financial resources and
therefore are not reported in the government funds. 150,492,217
Long-term liabilities are not due and payable in the current period and therefore
are not reported in the funds.Proceeds from new debt and repayments of exisiting
debts are recorded as resources and expenditures for fund reporting but are additions
and reductions of liabilities for government wide reporting. (11,658,739)
Other long-term assests are not available to pay for current period expenditures and,
therefore,are deferred in the funds. 2,300,073
Internal Service funds are used by management to charge the costs of certain
activities to individual funds. The assets and liabilities of internal service funds are
included in the governmental activities in the statement of net assets. 4,578,676
Net assets of governmental activities(see page 26) $ 172,063,733
The notes to the financial statements are an integral part of this statement.
28
City of Pasco, lwashington 2011 Comprehensive AnnuaCTnanciaCReport
Statement of Revenues, Expenditures and Changes in Fund Balances
Governmental Funds
For the Year Ended December 31, 2011
General Other
Fund Governmental Total
REVENUES
Taxes $ 23,671,711 $ 3,159,801 $ 26,831,512
Licenses and permits 1,589,554 284,218 1,873,772
Intergovernmental revenue 2,087,937 6,164,046 8,251,983
Charges for services 3,511,244 3,963,922 7,475,166
Fines and forfeitures 902,265 52,544 954,809
Miscellaneous revenue 785,500 1,761,940 2,547,440
Total revenues 32,548,211 15,386,471 47,934,682
EXPENDITURES
Current:
General government 6,086,874 - 6,086,874
Public safety 16,101,436 2,679,135 18,780,571
Physical environment 1,845,919 441,806 2,287,725
Transportation - 2,446,805 2,446,805
Economic environment 425,651 446,375 872,026
Health and human services 14,252 196,374 210,626
Culture and recreation 3,899,162 2,502,834 6,401,996
Capital outlay:
General government 153,952 153,952
Public safety 16,415 18,085 34,500
Transportation 3,276,044 3,276,044
Economic environment 657,080 657,080
Culture and recreation 7,023 361,576 368,599
Debt service:
Principal 645,312 929,957 1,575,269
Interest 341,265 175,975 517,240
Total expenditures 29,537,261 14,132,046 43,669,307
Excess of revenues over(under)expenditures 3,010,950 1,254,425 4,265,375
OTHER FINANCING SOURCES(USES)
Debt proceeds from refinancing 4,443,726 89,351 4,533,077
Debt proceeds used in refinancing (4,280,000) (4,280,000)
Transfers in 370,712 4,858,171 5,228,883
Transfers out (1,445,605) (3,783,278) (5,228,883)
Total other financing sources(uses) (911,167) 1,164,244 253,077
Net change in fund balances 2,099,783 2,418,669 4,518,452
Fund balances-beginning 9,158,689 12,674,365 21,833,054
Fund balances-ending $ 11,258,472 $ 15,093,034 $ 26,351,506
The notes to the financial statements are an integral part of this statement.
29
City of Pasco, Washington 2011 Comprehensive AnnuaCTnanciaCReport
Reconciliation of the Statement of Revenues,Expenditures,and
Changes in Fund Balance of Governmental Funds to the Statement of Activities
For the Year Ended December 31,2011
Net change in fund balances-total governmental funds $ 4,518,452
Amounts reported for governmental activities in the Statement of Activities are
different because of the following reconciling items:
Governmental funds report capital outlays as expenditures. However,in the statement
of net assets they are reported net of depreciation as a capital asset. This is the
amount by which capital outlays exceeded depreciation in the current period. (4,710,412)
The statement of net assets shows a decrease in joint ventures not reported in the funds. (17,105)
The issuance of long-term debt(e.g.bonds,notes)provides current financial resources to
governmental funds,while the repayment of the principal of long-term debt consumes current
financial resources of governmental funds.Neither transaction,however,has any affect on net
assets. 775,637
Revenues reported in the statement of activies that do not provide current financial resources
are not reported as revenues in the funds. 22,450,271
Some expenses such as for compensated absences and loss on disposal of assets reported in
the statement of net activities do not the use of current financial resources and,therefore,are not (604,447)
reported as expenditures in the governmental funds.
Internal service funds are used by management to charge the costs of certain activities to
individual funds. The net revenue of internal service funds is reported with governmental
activities. This amount comes from the Combining Statement of Revenues,Expenditures
and Changes in Net Fund Assets for Internal Service Funds,Net Operating Income. (688,426)
Change in net assets of governmental activities(see page 27) $ 21,723,970
The notes to the financial statements are an integral part of this statement.
30
City of Pasco, Washington 2011 Comprehensive AnnuaCTnanciaCReport
Statement of Revenues,Expenditures,and Changes in Fund Balances-Budget to Actual
General Fund
For the Year Ended December 31,2011
Original Final Variance to
Budget Budget Actual Final Budget
REVENUES
Taxes $ 22,800,000 $ 22,800,000 $ 23,671,711 $ 871,711
Licenses and permits 1,052,650 1,052,650 1,589,554 536,904
Intergovernmental revenue 1,632,200 1,708,200 2,087,937 379,737
Charges for services 3,007,750 3,185,250 3,511,244 325,994
Fines and forfeitures 971,600 971,600 902,265 (69,335)
Miscellaneous revenue 635,200 635,199 785,500 150,301
Total revenues 30,099,400 30,352,899 32,548,211 2,195,312
EXPENDITURES
Current:
General government 5,822,115 6,149,540 6,086,874 62,666
Public safety 16,430,946 16,629,521 16,101,436 528,085
Physical environment 1,739,360 1,739,360 1,845,919 (106,559)
Economic environment 476,120 476,120 425,651 50,469
Health and human services 12,400 12,400 14,252 (1,852)
Culture and recreation 3,793,385 4,009,560 3,899,162 110,398
Capital outlay:
General government 418,000 113,575 153,952 (40,377)
Public safety 25,420 25,420 16,415 9,005
Physical environment 9,600 9,600 9,600
Culture and recreation 15,025 7,023 8,002
Debt service:
Principal 580,310 955,310 645,312 309,998
Interest 313,350 313,350 341,265 (27,915)
Total expenditures 29,621,006 30,448,781 29,537,261 911,520
Excess of revenues over(under)expenditures 478,394 (95,882) 3,010,950 3,106,832
OTHER FINANCING SOURCES(USES)
Debt proceeds and other miscellaneous 4,443,726 4,443,726 -
Debt and fees refinanced (4,280,000) (4,280,000) -
Transfers in 100,000 371,000 370,712 (288)
Transfers out (750,000) (1,460,605) (1,445,605) 15,000
Total other financing uses (650,000) (925,879) (911,167) 14,712
Net change in fund balances (171,606) (1,021,761) 2,099,783 3,121,544
Fund balances-beginning 6,189,858 6,189,858 9,158,689 2,968,831
Fund balances-ending $ 6,018,252 $ 5,168,097 $ 11,258,472 $ 6,090,375
The notes to the financial statements are an integral part of this statement.
31
City of Pasco, Washington 2011 Comprehensive AnnuaCTnanciaCReport
Statement of Net Assets
Proprietary Funds
For the Year Ended December 31,2011
Water/Sewer Internal
Utility Service
ASSETS
Current assets:
Cash and cash equivalents $ 2,685,884 $ 6,433,437
Restricted cash equivalents: -
Customer deposits 568,054
Unspent bond proceeds 2,670,000
Revenue bond convenants 2,657,140
Investments 2,000,000
Receivables(net of allowances):
Customers 1,091,837 -
Interfund loans-current portion 43,890
Grants -
Special assessments-current portion 87,030
Inventory 377,455 -
Total current assets 12,137,400 6,477,327
Noncurrent assets:
Restricted cash equivalents 410,000
Special assessments 699,201 -
Interfund loan 273,792
Capital assets not being depreciated: -
Land 6,598,676
Construction work in progress 13,899,412
Capital assets net of accumulated depreciation:
Buildings and structures 34,119,516 -
Machinery and equipment 996,684 3,496,933
Infrastructure 112,295,371 -
Total nonurrent assets 169,018,860 3,770,725
Total assets 181,156,260 10,248,052
LIABILITIES
Current liabilities:
Accounts payable 799,680 588,679
Due to other governments 126 -
Other liabilities
Customer deposits payable 568,054
Accrued interest payable 696,800
Compensated absences-current portion 120,149
Loans to other governments-current portion 1,575,357
Revenue bonds-current portion 1,980,000
Total current liabilities 5,740,166 588,679
Noncurrent liabilities:
Compensated absences 264,491 14,154
Loans to other governments 11,955,593
Revenue bonds payable 24,260,000
Total noncurrent liabilities 36,480,084 14,154
Total liabilities 42,220,250 602,833
NET ASSETS
Investment in capital assets,net
of related debt 128,138,709 3,496,933
Unrestricted 10,797,301 6,148,286
Total net assets 138,936,010 $ 9,645,219
Adjustment to reflect the consolidation of internal
service fund activity related to eterprise funds 2,962,296
Net assets of business-type activiteis(see page 26) $ 141,898,306
The notes are an integral part of this statement.
32
City of Pasco, Washington 2011 Comprehensive .annual financiaC eport
Statement of Revenues, Expenses, and Changes in Fund Net Assets
Proprietary Funds
For the Year Ended December 31, 2011
Water/Sewer Internal
Utility Service
OPERATING REVENUES
Charges for services $ 16,901,872 -
Miscellaneous 90,093 5,957,017
Total operating revenues 16,991,965 5,957,017
OPERATING EXPENSES
Depreciation 5,072,818 617,801
Salaries and wages 2,591,571 255,542
Personnel benefits 442,045 3,786,588
Supplies 1,070,238 897,526
Services 2,614,490 489,475
Intergovernmental 2,356,078 -
Interfimd services 2,242,042 108,886
Total operating expenses 16,389,282 6,155,818
OPERATING INCOME(LOSS) 602,683 (198,801)
NONOPERATING REVENUES (EXPENSES)
Interest income 176,670 24,831
Rents and leases 782,248 -
Loss on disposal of capital assets - (21,818)
Interest expense (1,953,217) -
Total nonoperating revenues (expenses) (994,299) 3,013
Income (loss)before contributions and
transfers (391,616) (195,788)
Capital contributions 6,041,467 -
Transfers in - 217,945
Transfers out (217,945) -
Changes in net assets 5,431,906 22,157
Net assets-beginning 133,504,104 9,623,062
Net assets - ending $ 138,936,010 $ 9,645,219
The notes to the financial statements are an integral part of this statement.
33
City of Pasco, Washington 2011 Comprehensive AnnuaCTnanciaCReport
Statement of Cash Flows
Proprietary Funds
For the Year Ended December 31,2011
Water/Sewer Internal
Utility Service
CASH FLOW FROM OPERATING ACTIVITIES
Receipts from customers $ 17,755,453 $ 5,957,017
Payments to employees (2,977,928) (4,037,905)
Payments to suppliers (3,602,150) (1,491,772)
Payments to other governments (2,432,977)
Payments to other funds (2,242,042) -
Net cash provided by operating activities 6,500,356 427,340
CASH FLOW FROM CAPITAL AND RELATED FINANCING ACTIVITIES
Proceeds from sale of assets 20,878
Acquisition of capital assets (3,895,663) (989,417)
Principal paid on debt (4,415,553)
Interest paid on debt (1,636,802)
Bond proceeds received -
Payments received from notes and loans 223,962 -
Transfers out for capital (217,945) 217,945
Capital charges 1,857,073 -
Capital grant and contribution proceeds 108,588
Net cash used by capital and related financing activities (7,976,340) (750,594)
CASH FLOWS FROM INVESTING ACTIVITIES
Investments sold and earnings 176,670 1,024,801
Interfimd loan repayment - 57,633
Net cash provided from investing activities 176,670 1,082,434
Net increase in cash&cash equivalents (1,299,314) 759,180
Beginning cash&cash equivalents 10,290,392 5,674,257
Ending cash&cash equivalents $ 8,991,078 $ 6,433,437
NOW CASH ACTIVITIES
Capital contributions 4,184,394 -
Total noncash activities $ 4,184,394 $
RECONCILATION OF OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES
Net Operating Income $ 602,683 $ (198,801)
ADJUSTMENTS TO RECONCILE OPERATING
INCOME TO NET CASH PROVIDED(USED)BY
OPERATING ACTIVITIES
Depreciation 5,072,818 617,801
Rents and leases 782,248
Changes in assets and liabilities
Increase in customer and other receivables (35,721) -
Decrease in inventories 7,750 -
Decrease in accounts payable and other liabilities 74,828 4,115
Increase in due other governments (76,899) -
Decrease in customer deposits owing 16,961
Increase in compensated absences 55,688 4,225
Net cash provide by operating activities $ 6,500,356 $ 427,340
The notes to the financial statements are an integral part of this statement.
34
City of Pasco, Washiagton 2011 Comprehensive .annual EtnanciaCPeport
Statement of Net Assets
Fiduciary Funds
December 31, 2011
Pension and Other
Postemployment
Benefits Agency
ASSETS
Cash&cash equivalents $ 713,361 $ 345,923
Investments(at fair market value):
LID Note 89,351
Federal Agency 118,507
Mutual Funds 2,735,777
Total assets 3,656,996 345,923
LIABILITIES
Accounts payable 206,398
Due to others - 139,525
Total liabilities - 345,923
NET ASSETS
Held in trust for pension benefits and other
purposes $ 3,656,996
The notes to the financial statements are an integral part of this statement.
35
City of Pasco, Washington 2011 Comprehensive AnnuaCTnanciaCReport
Statement of Changes in Fiduciary Net Assets
Fiduciary Funds
For the year ended December 31, 2011
Pension and Other
Postemployment
Benefits
ADDITIONS
Taxes $ 45,132
Investment earnings:
Interest 7,669
Dividends 62,128
Net increase in market value of investments 19,180
Total Additions 134,109
DEDUCTIONS
Pension benefits 96,850
Medical premiums 105,395
Administrative expenses 16,080
Total deductions 218,325
Change in net assets (84,216)
Net assets-beginning 3,741,212
Net assets-ending $ 3,656,996
The notes to the financial statements are an integral part of this statement.
36
City of Pasco, -Washington 2011 Comprehensive .annual T nanciaC eport
NOTES TO 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 government 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 the City of Pasco as a primary government unit. The City of Pasco does
not have any component units.
The City is a general purpose government and provides police and fire protection including
emergency medical response, a municipal court, engineering, street construction and
maintenance, planning and zoning, parks and recreation services, a public library and general
administrative functions. The City also owns and operates a cemetery, a water system, a
sewer system, a process water reuse system, a storm water management system and an
irrigation system. The municipal golf course is owned by the city and operations are
contracted to an outside vendor. The City's basic financial statements include the financial
position and results of operations of all funds that are controlled by the City.
B. Government-wide and fund financial statements
The government—wide financial statements (i.e., the Statement of Net Assets and the
Statement of Activities) report information on all of the non-fiduciary activities of the
primary government. For the most part, the effect of interfund activity has been removed
from these statements. Exceptions to this general rule are for charges between the
government's utility functions and certain other service functions and various other functions
of the government. These transactions that are for products and services rendered have not
been eliminated. Elimination of these charges would distort the direct costs and program
revenues reported for the various functions concerned. Governmental activities, which
normally are supported by taxes and intergovernmental revenues, are reported separately
from business-type activities, which rely to a significant extent on fees and charges for
support.
37
City of Pasco, -Washington 2011 Comprehensive .annualTinanciaC eport
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 not 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 operational or capital requirements for a particular function or segment. Taxes and other
items not properly included among program revenues are reported instead as general
revenues.
Separate fund financial statements are provided for governmental funds, proprietary funds,
and fiduciary funds, even though the latter are excluded from the government-wide financial
statements. Major individual governmental funds and major individual enterprise funds are
reported as separate columns in the fund financial statements.
C. Measurement focus, basis of accounting, and financial statement presentation
The government-wide financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting, as are the proprietary fund and
fiduciary fund financial statements. Agency funds, a type of fiduciary fund, have no
measurement focus as the purpose of this type of fund is to simply receive and disburse funds
belonging to another organization. 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 recognized
as soon as they are both measurable and available. Revenues are considered to be available
when they are collectible within the current period or soon enough thereafter to pay liabilities
of the current period. For this purpose, the City considers revenues to be available if they are
collected within 31 days of the end of the current fiscal period. Expenditures generally are
recorded when a liability is incurred, as under accrual accounting. However, debt service
expenditures, as well as expenditures related to compensated absences and claim and
judgments, are recorded only when payment is due.
Property taxes, licenses, and interest associated within the current period are all considered to
be susceptible to accrual and so have been recognized as revenues of the current fiscal period.
Only the portion of special assessment receivable due within the current fiscal period is
considered to be susceptible to accrual as revenue of the current period. All other revenue
items are considered to be measurable and available only when cash is received by the City.
38
City of Pasco, -Vashinqton 2011 Comnreliensive .Annual EinancialReport
The City reports the general fund as a major governmental fund. The general fund is the
city's primary operating fund. It accounts for all governmental financial resources, except
those required to be accounted for in a separate fund.
The City reports the Water/Sewer fund as a major proprietary fund. This fund includes water,
sewer,process water reuse, stormwater and irrigation systems.
Additionally, the City reports the following fund types:
Special Revenue funds are used to account for revenues that are raised for a specific
purpose.
Debt Service funds which account for the resources accumulated and payments made for
principal and interest on long-term general obligation debt of governmental funds.
Capital Project funds are used to report significant capital acquisition and construction
separate from ongoing operating activities.
Permanent funds are used to report resources that are legally restricted to the extent that
only earnings, and not principal, may be used for purposes that support the reporting
government's programs.
Internal Service funds account for equipment replacement and operation, central stores,
and medical/dental insurance services provided to other departments of the City on a cost
reimbursement basis.
Pension Trust funds is used to account for the sources and uses of funds to meet the
pension benefit rights of those firemen covered under the Plan prior to the creation of
Law Enforcement Officers and Fire Fighters (LEOFF) pension system in 1970 as well as
other post-employment benefits for medical services for retired LEOFF employees.
Private-sector standards of accounting and financial reporting issued prior to December 1,
1989, generally are followed in both government-wide and proprietary fund financial
statements to the extent that those standards do not conflict with or contradict guidance of the
Governmental Accounting Standards Board. Governments also have the option of following
subsequent private sector guidance for their business-type activities and enterprise funds,
subject to this same limitation. The City has elected not to follow subsequent private-sector
guidance.
As a general rule the effect of the interfund activity has been eliminated for the government-
wide financial statements. Exceptions are for business taxes the utility pays to the general
fund. Likewise, other charges between the government's utility functions and certain other
service functions and various other functions of the government have not been eliminated.
Eliminations of these charges would distort the direct costs and program revenues reported
for the various functions concerned.
39
CiLy of Pasco, -Washington 2011 Comprehensive .annualFinancial Report
Amounts reported as program revenues include 1) charges to customers, 2) operating grants
and contributions, and 3) capital grants and contributions, including special assessments.
Internally dedicated resources are reported as general revenues rather than as program
revenues. General revenues include all taxes.
Proprietary funds distinguish operating revenues and expenses from non-operating items.
Operating revenues and expenses generally result from providing services and producing and
delivering goods in connection with a proprietary fund's principal ongoing operations. The
principal operating revenues of the Water/Sewer Fund are charges to customers. The major
services provided by the proprietary fund are water, sewer, storm drain, irrigation and
industrial waste water processing. Operating expenses for enterprise funds and internal
service funds include the cost of sales and services, administrative expenses, and depreciation
on capital assets. All revenues and expenses not meeting this definition are reported as non-
operating revenues and expenses.
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.
D. Assets,liabilities and equities
1. Deposits and investments
The government's cash and cash equivalents are considered to be cash on hand, demand
deposits, and short-term investments with original maturities of three months or less from
the date of acquisition.
State statutes and the city's investment policies authorize the city to invest in obligations
of the U.S. treasury, repurchase agreements and the State Treasurer's Local Government
Investment Pool (LGIP). The interest on these investments is prorated to the various
funds on a monthly basis.
The City's deposits are covered by federal depository insurance (FDIC and FSLIC) or by
collateral held in the multiple financial institution collateral pool administered by the
Washington Public Deposit protection Commission(PDPC).
Investments are generally reported at cost which approximates fair market value for the
items held. In the pension fund mutual fund investments are reported at fair market value.
The LGIP operates in accordance with appropriate state laws and regulations. The
reported value of the pool is the same as the fair value of the pool shares. See additional
deposit investment and restricted asset information in note 4. A.
2. Receivables and payables
Activities between funds that are representative of lending/borrowing arrangements
outstanding at the end of the fiscal year are referred to as "interfund loans
payable/receivable". All other outstanding balances between funds are reported as "due
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City of Pasco, -Washington 2011 Comprehensive .annualTinanciaC eport
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".
Loans between funds, as reported in the fund financial statements, are included as a
liability in applicable governmental funds so that the indicated fund balance represents
amounts available for appropriation and expendable available financial resources.
Taxes receivable consist of property taxes, sales taxes, interfund taxes, business and
occupation 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; the first billing is due April 30 and the second is due October 31.
Customer accounts receivable consist of amounts owed from private individuals or
organizations for goods and services. The allowance for uncollectible accounts for the
ambulance fund is approximately 12% of the outstanding receivable at December 31,
2011.
Grants receivable are reported for grants where qualified expenditures have been made
prior to the end of the year.
Other receivables include municipal court receivables, and interest receivable. Accrued
interest at year end consists of amounts earned by investments, notes and contracts at the
end of the year.
Special assessments are recorded when levied. Special assessments receivable consist of
current and delinquent assessments and related interest and penalties. Deferred
assessments consist of unbilled special assessments that are liens against the property
benefitted. As of December 31, 2011 $20,553 of Governmental and $39,154 of Business-
type special assessments were delinquent. Assessed property owners are responsible for
debt repayment. The city is guarantee's the debt to the extent of the LID guarantee fund.
Notes and contracts receivable consist of amounts owed on open account from private
individuals or organizations for goods and services rendered. Since the City is unable by
law to grant credit to any entity, all loans receivable are related to grant monies received
from other agencies which have authorized the loan as part of the grant process.
Repayment of these loans are used to establish revolving loan funds for loans that match
the original grant purpose.
3. In ven tories
There are currently no inventories in governmental funds. Inventories in proprietary funds
are valued using a floating average of costs.
4. Restricted assets and liabilities
These accounts contain resources for construction and debt service in enterprise funds and
customer deposits.
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City of Pasco, -Washington 2011 Comprehensive .annualTinanciaC eport
S. Capital assets. Capital assets, which include 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 one year. Such assets are recorded at
historical cost or estimated historical cost if purchased or constructed. The government
reports infrastructure assets on a network and subsystem basis. Such assets are recorded at
historical cost if purchased or constructed. Donated capital assets are recorded at
estimated fair market value at the date of donation. 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 deprecation method.
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. There were no capitalized
interest costs capitalized by the City during fiscal year 2011.
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:
Assets Threshold Useful Lives
Land All
Building & Structure $5,000 5 - 50
Other improvements $5,000 5 - 100
Machinery& Equipment &Vehicles $5,000 2 - 50
Infrastructure $5,000 5 - 50
6 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.
Sick leave may be accumulated up to a maximum of 960 hours for all employees except
firefighters. Firefighter sick leave may be accumulated up to a maximum of 840 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 one and a half times the employee's annual vacation accrual rate and
is payable upon resignation, retirement or death.
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City of Pasco, -Washington 2011 Comprehensive .annualTinanciaC eport
7. Long-term obligations
In the government-wide financial statements, and proprietary fund types in the fund
financial statements, long-term debt and other long-term obligations are reported as
liabilities in the applicable governmental activities, business-type activities, or proprietary
fund type statement of net assets.
Bond premiums and discounts, as well as issuance costs, when material, are deferred and
amortized over the life of the bonds using the effective interest method. Bonds payable
are reported net of the applicable bond premium or discount. Material bond issuance costs
are reported as deferred charges and amortized over the term of the related debt. Currently
there are no material amounts of bond premiums, discounts or unamortized issuance
costs.
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 financial sources. Premiums received on debt issuances
are reported as other financing uses. Issuance costs, whether or not withheld from actual
debt proceeds received, are reported as professional service costs.
8. Deferred revenues
Deferred Revenues are those revenues that are measurable but not yet available, under the
modified accrual basis of accounting. Accordingly they are not recorded as revenue. The
balance sheet shows the receivable, but includes deferred revenue as its offset. The City
incurred the following deferred items in 2011:
a. Uncollected property taxes levied.
b. Unbilled special assessments levied against benefited property for the cost of local
improvements. An allowance for uncollectibles is not necessary since the assessments
are liens against the property benefited.
9. Fund equity
In the fund financial statements, governmental funds report restrictions of fund balance.
Nonspendable fund balance - includes amounts that are not in spendable form (inventory,
for example) or are required to be maintained intact (the principal of a permanent fund,
for example).
Restricted fund balance - includes amounts that can be spent only for the specific purpose
stipulated by external resource providers (for example, 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 Pasco 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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City of Pasco, -Washington 2011 Comprehensive .annualTinanciaC eport
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 amounts that are available for any purpose.
NOTE 2 — RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL
STATEMENTS
A. Explanation of certain differences between the governmental funds balance sheet
and the government-wide statement of net assets.
The governmental fund balance sheets includes a reconciliation between fund balance —
total governmental funds and net assets — governmental activities as reported in the
government-wide statement of net assets. One element of that reconciliation explains that
"capital assets used in governmental activities are not financial resources and, therefore,
are not reported in the funds". The following shows the detail of these capital asset
changes net of accumulated depreciation:
Beginning balance of capital assets excluded from fund level:
Joint venture $ 230,141
Land 7,120,085
Construction in process 2,864,506
Building 25,745,253
Other improvements 5,715,200
Equipment 4,002,213
Infrastructure 87,333,693
Current year spending in construction work in progress 4,312,362
Current year capital purchases 592,554
Current year capital donations received 22,225,746
Current year decrease in joint venture (17,105)
Current year capital asset disposals (17,103)
Current year depreciation (9,615,328)
Net adjustment to add to government-wide fund balance to arrive at
Net assets-governmental activities $ 150,492,217
Another element of that reconciliation explains that "long-term liabilities...are not due
and payable in the current period and are not reported in the funds." The following show
the detail of these liability changes:
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City of Pasco, -Washington 2011 Compreliensive .Annual Tinancial Report
Beginning balance of long-term liabilities excluded from fund level:
Compensated absences $ 1,717,940
Bonds and notes payable 10,437,823
OPEB obligation 571,549
Current year compensated absences 9,642
Current year principal payments reducing debt (5,855,268)
Current year new debt proceeds 4,199,351
Current year OPEB and other expense recognized 577,702
Net adjustment to reduce government-wide fund balance to arrive at
Net assets-governmental activities $ 11,658,739
B. Explanation of certain differences between the governmental funds statement of
revenues, expenditures, and changes in fund balances and the government-wide
statement of activities
The governmental funds' statement of revenues, expenditures and changes in fund
balances includes reconciliation between net changes in fund balances — total
governmental funds and changes in net assets of governmental activities as reported in the
government-wide statement of activities. One element of that reconciliation explains that
"Revenues reported in the statement of activities that do not provide current financial
resources are not reported as revenues in the funds." $22,225,746 of this amount is due
capital assets contributed to the City.
NOTE 3 - STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
A. Budgetary information
Scope of budget
Annual revenue and appropriated expenditure budgets are adopted for the general, special
revenue, proprietary and pension trust funds. Additionally, project basis budgets are
adopted for capital projects. All annual appropriations lapse at the fiscal year end. For
governmental funds, the only difference between the budgetary basis and generally
accepted accounting principles (GAAP) is that proceeds from interfund loans are treated
as budged revenue and repayment of interfund loans are treated as budgetary expenditures
(except for loans that are issued one day and repaid the next). Budgetary accounts are
integrated in fund ledgers for all budgeted funds. Budgets for debt service and capital
project funds are adopted at the level of the individual debt issue or projects and for the
fiscal periods that correspond to the lives of debt issues or projects and the annual
expenditure piece is also included in the appropriate fund's annual budget. Nation
Council on Governmental Accounting (CNGA) Statement 1 does not require, and the
financial statements do not present budgetary comparisons for proprietary fund types.
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City of Pasco, -Washington 2011 Comprehensive .annual T nanciat Report
Procedures for adopting the original budget
The City's for
procedures are mandated by RCW 35A.33. The steps in the budget
process are as follows:
• Prior to the first Tuesday in November, the City Manager submits a proposed budget to
the Council. This budget is based on priorities established by the Council and estimates
provided by departments during the preceding months, and balanced with revenue
estimates made by the Financial Services Manager.
• The Council conducts public hearings on the proposed budget in November and/or
December.
• The Council makes its adjustments to the proposed budget and adopts by ordinance a
final balanced budget no later than December 31.
• Within 30 days of adoption, the final budget is available to the public.
Amending the budget
The budget, as adopted, constitutes the legal authority for expenditures. The City's
budget is adopted at the fund level, so that expenditures may not legally exceed
appropriations at that level of detail. The City Manager is authorized to transfer budgeted
amounts between departments within any fund; however, any revisions that alter the total
expenditures of a fund, or that affect the number of authorized employee positions, salary
ranges, hours, or other conditions of employment must be approved by the City Council.
When the City Council determines that it is in the best interest of the City to increase or
decrease the appropriation for a particular fund, it may do so by ordinance approved by
one more than the majority after holding one public hearing.
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.
B. Deficit fund equity
The LID Note fund, Golf Course and Community Development funds showed deficit
fund equity positions at December 31, 2011. This is expected and normal since the debt
related to these funds is from an internal loan rather than an outside funding source. With
internal financing the debt is carried within the fund and therefore results in a negative
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City of Pasco, -Washington 2011 Comprehensive .annualTinanciaC eport
fund balance. Cash balances were positive for these funds at the end of the year. If the
financing was external, then no fund deficit would exist.
C. Budgetary compliance
The Golf Course fund exceeded its total budgetary authority in 2011 by $233,508. This
was primarily due to the fact that 2011 was the first year of operating the golf course,
December actual expenses were higher than estimated/budgeted and there were no more
scheduled council meetings to approve expenditures prior to the end of the year. The LID
construction fund exceeded its budget authority by$712 and was closed December 31.
NOTE 4—DETAILED NOTES ON ALL FUNDS
A. Deposits, investments and restricted assets
As of December 31, 2011 the government had the following:
Weighted Average
Fair Value Maturities (Years)
Local Government Investment Pool
Total Invested Cash Equivalents $27,447,150 N/A
Investments in Federal Agencies 3,707,164 6.28
Investment in Mutual Funds 2,735,777 N/A
Investment in Certificate of Deposits 3,000,000 2.08
Investment in Notes 89,351 9.38
Total fair value $36,979,442
Portfolio weighted average maturity 0.82
Interest rate risk. Interest rate risk is the risk that changes in interest rates will adversely affect
the fair value of an investment. In accordance with its investment policy, the City manages its
exposure to declines in fair value by limiting the maturity of investments. Investments over one
year require the City Manager's approval. In addition, to achieve its financial objective of
maintaining liquidity to meet all operating requirements, the City typically selects investments
that have shorter average maturities.
Credit risk. Credit risk is the risk that an issuer or other counterparty to an investment will not
fulfill its obligations. The city investment policy allows the following types of investments in
accordance with state law: demand or investment deposits in qualified public depositories
located within the state; United States' government bonds, notes bills; certificates of deposits
from financial institutions that participate in Washington State's Public Deposit Protection
Commission's list of"Qualified Public Depositories"; bankers acceptances, repurchase
agreements and the Washington State Treasurer's Office Local Government Investment Pool
(LGIP). 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, 2011 the
City's investments in agency securities were all rated AAA. The LGIP is unrated, however the
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City of Pasco, -Vashinqton 2011 Comprehensive .annualTinanciaC eport
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. With the Exception of U.S. Treasury securities and the State
Treasurer's Local Government Investment Pool (LGIP)no more than twenty percent of the city's
total investment portfolio should be invested in a single security type and not more than twenty
percent should be invested with a single financial institution.
Concentration of credit risk as a percentage of total investments:
Issuer Book Value I %of Total
Federal Farm Credit Bank 2,000,000 5%
Federal Home Loan Bank 1,000,000 3%
Small Business Association 707,163 2%
AmFunds Mutual Funds 2,058,933 6%
US Bank CD 3,000,000 8%
Local Government Invest Pool 27,447,150 76%
36,213,246 100%
Custodial credit risk — deposits. This is the risk that in the event of a bank failure, the
governments' deposits may not be returned. The city's policy states that the maximum amount to
be placed with any one depositary shall not exceed the net worth of the institution (at the time of
investment) as determined by the State of Washington Public Deposit Protection Commission
(PDPC). According to the PDPC Act implemented August 11, 1969 financial institutions holding
public funds have requirements to collateralize those funds. The maximum liability of a public
depository is equal to ten percent of all public deposits held by that depositary at the time of the
most recent Commission report date or the average of the balances of public deposits on the four
most recent Commission report dates, whichever is greater. This amount, which is subject to
audit, represents the maximum amount the Commission can assess each depository in the event
of a loss due to default of a participating depositary. The city had $10,202,617 on deposit with
US Bank on December 31, 2011. The FDIC insures those deposits up to $250,000. US Bank is
required to collateralize 10% of the remaining funds which is $1,020,262. The temporary
custodial credit risk for uncollateralized deposits at US Bank was $8,932,355 at 12/31/11.
Custodial credit risk — investments. For an investment, this is the risk that, in the event of the
failure of the counterparty, the government will be able to recover the value of its investments or
other collateral securities that are in the possession of an outside party. The city limits its
custodial credit risk by holding investments that are insured and are registered or held by the
city's agent in the city's name. Certificates of deposits are entirely covered by federal depository
insurance (FDIC and FSLIC) or by collateral held in a multiple financial institution collateral
pool administered by the Washington Public Deposit Protection Commission(PDPC).
Restricted assets. The corpus of permanent funds is included in restricted assets. The
Water/Sewer utility issued bond proceeds in the prior year for construction projects which were
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City of Pasco, -Washington 2011 Comprehensive .annualTinanciaC eport
not fully expended by the end of the current year. The remaining funds are restricted for
construction purposes. Certain resources set aside for the repayment of revenue bonds are
classified as restricted assets on the balance sheet because they are maintained in a separate
account and their use is limited by applicable bond covenants. The "bond debt service" account is
used by the Water/Sewer fund to report resources set aside to subsidize potential deficiencies
from the Water/Sewer operations that could adversely affect debt service payments. The
Water/Sewer fund has constructed projects and assessed special assessments to recover certain
portions of the construction costs. Those assessments receivable are pledged to pay for the related
special assessment debt and are therefore restricted to that purpose. Cash provided from
customers as deposits are also restricted. Restricted assets are composed of the following:
Temporary Permanent
Restrictions Restrictions
City View Cemetery Endowment $400,067
Water/Sewer Debt Service account $2,657,140
Water/Sewer Debt Reserve account 410,000
Water/Sewer Bond Proceeds 2,670,000
Water/Sewer Special Assess Receivable 786,231
Governmental Special Assess Receivable 869,578
Water/Sewer Customer Deposits 568,054
Governmental Funds Customer Deposits 194,537
B. Receivables
Taxes receivable.
Taxes receivable consist of several types of taxes: property taxes, sales taxes and business &
occupation taxes, excise taxes, gambling and admission taxes.
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 Tax Calendar
January 1 Taxes are levied and become an enforceable lien against properties.
February 14 Tax bills are mailed
April 30 First of two equal installment payments is due.
May 31 Assessed value of property established for next year's levy at 100% of
market value.
October 31 Second installment is due.
Property taxes are recorded as a receivable when levied, offset by deferred revenue. During the
year property tax revenues are recognized when cash is collected and deferred property tax
revenue is reduced. Prior year tax levies were recorded using the same principal. The reported
balances include tax payments from the county received through December 31, 2011. Tax
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City of Pasco, lashington 2011 Comprehensive AnnuaCEinanciaC eport
receipts received by the county in December but remitted to the City in January are not material
and are included as part of the tax receivable amount reported. Delinquent taxes totaled $312,224
and since these funds are not available revenue recognition is deferred. Subsequent collections of
delinquent amounts will be recorded in revenue in the period actually received.
The City may levy up to $3.60 per $1,000 of assessed valuation for general governmental
services subject to two limitations:
a. Except as otherwise provided for, the levy for taxing districts in any year shall be set
so that the regular property taxes payable in the following year shall not exceed the
limit factor of 101% multiplied by the amount of regular property taxes lawfully
levied for such district in the highest of the three most recent years in which such
taxes were levied for such district plus an additional dollar amount calculated by
multiplying the increase in assessed value in that district resulting from new
construction, improvements to property, and any increase in the assessed value of
state-assessed property by the regular property tax levy rate of that district for the
preceding year.
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. Effective November 29, 2007 Washington State House Bill (HB)
2416 reinstated the one percent property tax limit factor adopted by voters under
Initiative No. 747 following the invalidation of that initiative by the courts. The
provisions of HB 2416 are retroactive to and prospective from taxes levied for
collection in 2002. The retroactivity extinguishes the additional levying capacity
resulting from the November 2007 court ruling but let's stand any banked capacity
accumulated prior to the court ruling and the authority to continue to bank future
unused capacity.
In November 2010, the City approved an ordinance establishing the operating levy for 2011 of
$6,112,398 based on an assessed valuation of$3,102,662,066 and an estimated rate of$1.970005
per$1,000 of assessed value. In November 2011, the City approved an ordinance establishing the
operating levy for 2012 of$6,327,858 based on an assessed valuation of$3,215,099,688 and an
estimated rate of$1.96817 per $1,000 of assessed value.
Additionally, the city levied an additional amount to cover bond payments for the 1999 UTGO
bond for the Library Remodel ($65,757); the 1999 UTGO bond for the Fire Station ($83,293) and
for the 2002 UTGO Refunding bonds ($377,000).
Sales and excise taxes. The state is the collection agent for sales and real estate excise taxes in the
State of Washington. The vendor has until approximately the end of the following month to remit
sales tax to the state for taxable sales. The state then has approximately another month to remit
the city's portion of the tax to the city. The city's basic sales tax rate is one-half of one percent.
Utility occupation taxes. The city assessed a gross revenue tax and use on certain utilities within
the city. The rate is for these taxes are eight and one-half percent.
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City of Pasco, -Washing ton 2011 Comprehensive .annual TinanciaC eport
Other receivables. As of December 31, 2011 the city's individual major funds contain no
allowance for uncollectible accounts and nonmajor funds receivable balances include the
applicable allowance for uncollectible accounts (which relates to ambulance services) of$89,523.
Special assessments and deferred revenue. Governmental funds report deferred revenue in
connection with receivables for revenues that are not considered to be available to liquidate
liabilities of the current period. Governmental funds also defer revenue recognition in
connection with resources that have been received but not yet earned. At the end of the current
fiscal year, the various components of deferred revenue reported in the governmental funds were
as follows:
Deferred Revenue—Property Taxes $ 312,224
Deferred Revenue— Special Assessments 734,582
Deferred Revenue—Municipal Court 1,105,445
Deferred Revenue—Other 147,822
Total $2,300,073
Loans receivable. Loans receivables consist of amounts owed on an open account from private
individuals or organizations for goods and services rendered. Since the City is unable by law to
grant credit to any entity, all loans receivable are related to grant monies received from other
agencies which have authorized the loan as part of the grant process. Repayments of these loans
are used to establish revolving loan funds for loans that match the original grant purpose. The
long term portion of those loans receivable are included in reserved fund balance as the assets are
not available to liquidate liabilities in the current period.
C. Capital Assets
Capital asset activity for the year ended December 31, 2011 was as follows:
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City of Pasco, Washington 2011 Comprehensive .annual finandaC eport
Beginning Current Period Current Period Ending Balance
Governmental Activities: Balance 01/01/11 Increases Decreases 12/31/11
Capital assets,not being depreciated
Land 7,120,086 431,050 0 7,551,136
Construction in process 2,689,373 4,307,550 1,348,622 5,648,301
Total capital assets,not being depreciated 9,809,459 4,738,600 1,348,622 13,199,437
Capital assets,being depreciated:
Building&structure 36,529,327 830,684 0 37,360,011
Other improvements 8,995,965 0 0 8,995,965
Machinery and equipment 8,969,534 712,410 305,378 9,376,566
Infrastructure 126,842,492 22,372,723 0 149,215,215
Total capital assets being depreciated 181,337,318 23,915,817 305,378 204,947,757
Less accumulated depreciation:
Building&structure 10,784,074 1,117,273 0 11,901,347
Other improvements 3,280,766 640,816 0 3,921,582
Machinery and equipment 4,967,322 761,225 288,275 5,440,272
Infrastructure 39,508,798 7,096,014 0 46,604,812
Total accumulated depreciation 58,540,960 9,615,328 288,275 67,868,013
Total capital assets,being depreciated,net 122,796,358 14,300,489 17,103 137,079,744
Governmental activities capital assets net $ 132,605,817 $ 19,039,089 $ 1,365,725 $ 150,279,181
Beginning Current Period Current Period Ending Balance
Business Type Activities: Balance 01/01/11 Increases Decreases 12/31/11
Capital assets,not being depreciated
Land $ 6,598,676 $ - $ - $ 6,598,676
Construction in process 12,871,898 1,027,514 0 13,899,412
Total capital assets,not being depreciated 19,470,574 1,027,514 0 20,498,088
Capital assets,being depreciated:
Building&structure 64,900,003 0 0 64,900,003
Machinery and equipment 4,870,854 597,144 308,305 5,159,693
Infrastructure 131,768,495 7,052,543 0 138,821,038
Total capital assets being depreciated 201,539,352 7,649,687 308,305 208,880,734
Less accumulated depreciation:
Building&structure 28,386,824 2,393,663 0 30,780,487
Machinery and equipment 2,700,265 341,788 271,730 2,770,323
Infrastructure 23,965,521 2,560,146 0 26,525,667
Total accumulated depreciation 55,052,610 5,295,597 271,730 60,076,477
Total capital assets,being depreciated,net 146,486,742 2,354,090 36,575 148,804,257
Business activities capital assets net $ 165,957,316 $ 3,381,604 $ 36,575 $ 169,302,345
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City of Pasco, Washington 2011 Comprehensive AnnuaCTnanciaCReport
Depreciation expense by function:
Governmental activities:
General government $ 429,732
Public Safety 326,051
Physical environment 28,465
Transportation 7,368,700
Economic environment 168,812
Health&human services 40,395
Culture&recreation 1,253,173
Total depreciation expense-governmental activities $ 9,615,328
Business-type activities:
Water $ 1,589,927
Sewer 2,885,300
Process water reuse facility 231,807
Stonmvater 168,034
Irrigation 420,529
Total depreciation expense-business-type activities: $ 5,295,597
Construction commitments
The City of Pasco has active construction projects as of December 31, 2011. The projects include
street construction and various utility constructions. At year end, the city's commitments with
contractors are as follows:
Project Spent to Date Remaining
Commitment
Streets $2,962,604 $ 259,528
Housing - 117,457
Parks 24,936 249,323
Water 484,305 404,606
Sewer 337,986 37,525
Irrigation 104,601 2,208,569
Total $3,914,432 $3,277,008
D. Interfund loans receivable, payable and transfers
Interfund loans
The composition of interfund loan balances as of December 31, 2011 is as follows:
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City of Pasco, Washington 2011 Comprehensive .annual TinanciaC eport
Interfund Loan Loan Loan Interfund Loan Due in More
Receivable Purpose Amount Payable than 1 year
General Fund Temp Cash flow $475,000 Nonmajor Spec Revenue $ -
General Fund Construction Financing 168,000 Construction Fund -
Nonmajor Spec Revenue Improvements 60,000 Nonmajor Spec Revenue 60,000
Internal Service Fund Investment in LID 317,682 Nonmajor Debt Service Fund 273,791
Interfund transfers
Transfers between funds during the year ended December 31, 2011 are as follows:
TRANSFER FROM
Nonmajor Nonmajor Nonmajor Internal
General Utility Pemnanent Total
Special Debt Construction Service
T General $ - $ 90,000 $ $ 280,712 $ $ $ - $ 370,712
R
A
N Nonmajor Special Revenue 1,355,615 277,448 - 520,000 100 2,153,163
S
F Nonmajor Construction 89,990 2,579,696 35,322 - - 2,705,008
E
R Internal Service - - - - 214,931 3,014 - 217,945
T Total $ 1,445,605 $ 2,947,144 1 $ 35,322 $ 800,712 $ 214,931 $ 3,014 $ 100 $ 5,446,828
O
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 the purpose of construction 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; from earnings in the cemetery endowment fund to pay the general fund for
maintenance activities; from earnings and fund balance of the Boulevard Maintenance fund to
the general fund to pay for boulevard maintenance activities; from the general fund to the TRAC
fund to support those activities; from the general fund to the ambulance fund as required by law.
E. Leases
Operating leases. The city leases its front-line police vehicles. Leases are generally for a three
year period. Generally, at the end of the three year period the lease ends and the city returns the
54
CiLy of Pasco, Washington 2011 Comprehensive Annual Financial Report
vehicles. New vehicles and leases are then acquired. The following represents the future
minimum lease payments:
Year Ending
December 31 Amount
2012 $14,596
2013 4,941
2014 11,951
2015 6,864
Total $38,352
F. Long-term Debt
Changes in long-term liabilities. For the governmental activities, compensated balances are
generally liquidated by the General and Streets funds while worker's compensation claims are
liquidated by the Medical/Dental internal services fund. The net pension obligation is generally
liquidated by the Fire Pension Trust Fund and the net OPEB obligation is generally liquidated by
the Other Post Employment Benefit Trust fund.
Long-term liability activity for the year ended December 31, 2011 was as follows:
Beginning Ending Due Within
Balance Additions Reductions Balance One Year
GOVERNMENTAL AC TIVITIES
General obligation bonds $ 8,940,000 $ 4,110,000 $ (5,380,000) $ 7,670,000 $ 1,085,000
Special assessment bonds¬es 785,129 89,351 (305,129) 569,351 7,408
External loans¬es 712,692 - (170,137) 542,555 173,497
Compensated absences 1,717,940 1,274,030 (1,253,348) 1,738,622 417,783
Net OPEB obligation 582,589 937,477 (370,815) 1,149,251 -
Governmental activity long-term liabilities $ 12,738,350 $ 6,410,858 1 $ (7,479,429)1 $ 11,669,779 1 $ 1,683,688
BUSINESS ACHVITIES
Revenue bonds 29,125,000 - (2,885,000) 26,240,000 1,980,000
External loans¬es 15,061,503 - (1,530,553) 13,530,950 1,575,357
Compensated absences 331,136 417,065 (360,448) 387,753 120,149
Business activity long-term liabilities $44,517,639 $ 417,065 1 $ (4,776,001)1 $ 40,158,703 1 $3,675,506
Long-term debt. The city issues general obligation bonds to finance capital improvements such
as bridges, streets, municipal buildings and enterprise facilities such as water and sewer utilities.
Bonded indebtedness has also been entered into (currently and in prior years) to advance refund
several general obligation and revenue bonds. The City is also liable for notes that were entered
into for the purchase of the TRAC Facility, Animal Control facilities and police equipment.
These notes are considered obligations of the general government and are being repaid with
general governmental resources. Proprietary fund revenues are used to repay revenue and
refunding bonds as well as certain loans. The bond issues are not subject to arbitrage but the
investments held in reserves (and the Guarantee Fund for LID 135 and 145) are subject to rebate
and yield restrictions.
55
City of Pasco, Washington 2011 Compre(iensive .AnnuaCEtjianciaCR.eport
GENERAL OBLIGATION BONDS
MATURITY I INTEREST ORIGINAL INSTALLMENT
PURPOSE RANGE RATERANGE AMOUNT 1 2012 AMOUNT
1999 LTGO Library and Fire Station 2011-2019 5.25%-5.60% $ 1,700,000 $ 143,800
2002 LTGO Rivershore,City Hall,Refi 1995 2011-2022 3.50%-4.70% 3,635,000 318,559
2002 Civic Center 2011-2013 4.00%-4.00% 3,155,000 378,600
2011 LTGO Refund 2001 LTGO 2011-2020 2.00%-4.00% $4,110,000 532,650
YEARENDING GOVERNMENTAL ACTIVITIES BUSINESS-TYPE ACTIVITIES
DECEMBER 31 PRINCIPAL I INTEREST PRINCIPAL INTEREST
2012 1,085,000 288,609
2013 1,110,000 252,496
2014 770,000 214,940
2015 785,000 186,840
2016 685,000 160,520
2017-2021 3,050,000 368,223
2022-2027 185,000 4,348
TOTAL $ 7,670,000 1$ 1,475,976 1$ $
SPECIAL ASSESSMENT BONDS&NOTES
MATURITY INTEREST I ORIGINAL I INSTALLMENT
PURPOSE RANGE RATE RANGE AMOUNT 2012 AMOUNT
LID 145 A Street Improvments 2012-2020 2.25%-5.00% $ 785,129 $ 21,000
LID 146 KurtzmanImprovments 2013-2021 4.10% $89,351 $11,071
YEARENDING GOVERNMENTAL ACTIVITIES BUSINESS-TYPE ACTIVITIES
DECEMBER 31 PRINCIPAL I INTEREST PRINCIPAL INTEREST
2012 $ 7,408 $ 24,663
2013 7,711 24,360
2014 8,028 24,044
2015 88,357 23,714
2016 88,699 20,372
2017-2021 369,148 44,207
TOTAL Is 569,351 $ 161,360 1$ Is
REVENUE BONDS
MATURITY I INTEREST ORIGINAL I INSTALLMENT
PURPOSE RANGE RATERANGE AMOUNT 2012 AMOUNT
2002 Water/Sewer 2011-2022 3.50%4.70% 5,945,000 434,163
2005 Water/Sewer 2011-2025 4.001/o-1.25% 4,400,000 322,192
2007 Water/SewerULID 2011-2022 4.25%-4.75% 845,000 77,412
2009 Water/Sewer 2011-2029 3.00%4.75% 10,045,000 780,725
2010 A Ref 1998B Plus New 2011-2029 3.00%4.370% 9,070,000 1,245,600
2010T Ref1998A 2018 4.62% 1,240,000 183,122
YEARENDING GOVERNMENTAL ACTIVITIES BUSINESS-TYPEACTWITIES
DECEMBER31 PRINCIPAL I INTEREST PRINCIPAL INTEREST
2012 $ 1,980,000 $ 1,063,214
2013 2,035,000 1,003,363
2014 2,105,000 931,943
2015 1,415,000 865,188
2016 1,425,000 804,737
2017-2021 7,635,000 3,100,763
2022-2026 6,405,000 1,551,682
2027-2031 3,240,000 282,576
TOTAL $ $ $ 26,240,000 1$ 9,603,466
EXTERNAL LOANS
INTEREST I ORIGINAL INSTALLMENT
PURPOSE MATURITY RATE AMOUNT 2012 AMOUNT
2002 Animal Control FaciWty Land 12/1/2016 6.24% $ 275,500 $ 25,700
2009 Police Vehicle Computers 6/1/2013 3.47% 194,051 $ 53,867
2006 Port Airport Fire Building 7/12/2016 4.00% 120,000 14,580
1998TRACLoan 12/1/2014 4.505-5.50% 1,197,931 104,781
Waste Water Polution Control Facilities PWTF 95-02 6/30/2015 1.00% 812,700 44,732
West Pasco Water SystemPWTF 95-026 6130/2015 1.00% 2,687,300 111,670
Riverview Tmnk/SESewer 6/30/2020 1.00% 1,890,000 121,143
Sewer Treatment Plant Phase 1&2 SRF Loan 10/13/2015 1.00% 23,700000 1,719,955
YEARENDING GOVERNMENTAL ACTIVITIES BUSINESS-TYPEACFIVITIFS
DECEMBER 31 PRINCIPAL I INTEREST PRINCIPAL I INTEREST
2012 $ 173,497 $ 25,430 $ 1,575,357 $ 422,143
2013 $ 151,149 $ 17,550 1,621,743 373,140.00
2014 $ 136,626 $ 10,881 1,669,767 322,502
2015 $ 43,210 $ 3,864 1,719,487 270,166
2016 $ 38,073 $ 1,504 1,620,576 216,076
2017-2021 $ $ 5,324,020 315,952
TOTAL $ 542,555 1$ 59,229 $ 13,530,950 $ 1,919,979
56
CiLy of Pasco, -Washington 2011 Comprehensive .annual Financial Report
The city refinanced the 2001 LTGO with the same original final maturity date, a$170,000
reduction in principal and realized a net present value savings of$553,896.
NOTE 5 - OTHER INFORMATION
A. Risk Management
The City of Pasco maintains insurance against most normal hazards except for unemployment
and automobile collision, where it has elected to become self-insured.
For unemployment claims, the City is on a 100% reimbursable program with the State where
the City pays all unemployment claims charged against it.
The City is a member of the Washington Cities Insurance Authority(WCIA).
Utilizing Chapter 48.62 RCW (self insurance regulation) and Chapter 39.3 RCW (Interlocal
Cooperation Act), nine cities originally formed WCIA on January 1, 1981. WCIA was
created for the purpose of providing a pooling mechanism for jointly purchasing insurance,
jointly self-insuring, and/or jointly contracting for risk management services. WCIA has a
total of over 126 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. Effective January
2011 City of Pasco coverage changed to a $100,000 per incident deductible. Coverage
includes general, automobile, police professional, public officials' errors and omissions, stop
gap, and employee benefits liability. WCIA limits are $4 million per occurrence in the self
insured layer, and $16 million per occurrence in the re-insured layer. The excess layer is
insured by the purchase of reinsurance and is subject to aggregate sub-limits in the excess
layers. The Board of Directors determines the limits and terms of coverage annually.
Insurance coverage for property, automobile physical damage, fidelity bonds, inland marine,
and boiler and machinery are purchased on a group basis. Various deductibles apply by type
of coverage. Property insurance and auto physical damage are self-funded from the
member's deductible to $500,000, for all perils other than flood and earthquake, and insured
above that amount by the purchase of reinsurance. (City does not participate in these
programs; all is purchased through commercial broker as identified on this page).
In-house services include risk management consultation, loss control field services, claims
and litigation administration, and loss analyses. WCIA contracts for the claims investigation
consultants for personnel issues and land use problems, insurance brokerage and lobbyist
services.
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City of Pasco, -Washington 2011 Comprehensive .annualTinanciaC eport
WCIA is fully funded by its members, who make annual assessments on a prospectively rated
basis, as determined by an outside, independent actuary. The assessment covers loss, loss
adjustment, and administrative expenses. As outlined in the interlocal, WCIA retains the
right to additionally assess the membership for any funding shortfall.
An investment committee, using investment brokers, produces additional revenue by
investment of WCIA's assets in financial instruments which comply with all State guidelines.
These revenues directly offset portions of the membership's assessment.
A Board of Directors governs WCIA, which is comprised of one designated representative
from each member. The Board elects an Executive Committee and appoints a Treasurer to
provide general policy direction for the organization. The WCIA Executive Director reports
to the Executive Committee and is responsible for conducting the day-to-day operations of
WCIA.
Property, Inland Marina, boiler, machinery and employee fidelity insurance is purchased
through commercial insurance brokers.
The City is self-insured for medical and dental coverage for its employees. A third party
administrator, Benefits Management, Inc. processes all claims for reimbursement. The third
party administrator provides utilization management services and requires pre-authorization
for all non-emergency hospital confinements. It is the City's policy to maintain at least four
months of average monthly claims in cash reserves. 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 $80,000 per individual.
B. Related organization
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 is 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 will serve four-year terms. Of the initial members, one will be
appointed for a one year term, one for a two year term, one for a three year term, and the
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City of Pasco, -Washington 2011 Comprehensive .annualTinanciaC eport
remainder for 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 herein, or in the
Charter.
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 shares with Franklin County the expenses to
operate and cover debt service. Franklin County handles all operating decisions and financial
reporting for TRAC.
Complete financial statements for TRAC may be obtained at Franklin County, 1016 N. 4th
Avenue, Pasco, Washington.
For calendar year 2011, the City of Pasco paid Franklin County $340,660 in operating
expenses and$102,789 in debt service expenses.
The City's obligation for debt service is included in the debt service schedule in Note 4. F.
C. Employee retirement systems and pension plans
Substantially all City full-time and qualifying part-time employees participate in one of the
following statewide retirement systems administered by the Washington State Department of
Retirement Systems, under cost-sharing multiple-employer public employee defined benefit
retirement plans. The Department of Retirement Systems (DRS), a department within the
primary government of the State of Washington, issues a publicly available comprehensive
annual financial report (CAFR) that includes financial statements and required supplementary
information for each plan. The DRS CAFR may be obtained by writing to: Department of
Retirement Systems, Communications Unit, P.O. Box 48380, Olympia, WA 98504-8380; or
it may be downloaded from the DRS website at www.drs.wa.gov.
The following disclosures are made pursuant to GASB Statements No. 27, Accounting for
Pensions by State and Local Government Employers and No. 50, Pension Disclosures, an
Amendment of GASB Statements No. 25 and No. 27.
Public Employees' Retirement System (PERS) Plans 1, 2 And 3
Plan Description
The Legislature established PERS in 1947. Membership in the system includes: elected
officials; state employees; employees of the Supreme, Appeals, and Superior courts (other
than judges currently in the Judicial Retirement System); employees of legislative
59
City of Pasco, -Washington 2011 Comprehensive .annualTinandaC eport
committees; community and technical colleges, college and university employees not
participating in higher education retirement programs; judges of district and municipal
courts; and employees of local governments. PERS retirement benefit provisions are
established in Chapters 41.34 and 41.40 RCW and may be amended only by the State
Legislature.
PERS is a cost-sharing multiple-employer retirement system comprised of three separate
plans for membership purposes: Plans 1 and 2 are defined benefit plans and Plan 3 is a
defined benefit plan with a defined contribution component.
PERS members who joined the system by September 30, 1977 are Plan 1 members. Those
who joined on or after October 1, 1977 and by either, February 28, 2002 for state and higher
education employees, or August 31, 2002 for local government employees, are Plan 2
members unless they exercised an option to transfer their membership to Plan 3. PERS
members joining the system on or after March 1, 2002 for state and higher education
employees, or September 1, 2002 for local government employees have the irrevocable
option of choosing membership in either PERS Plan 2 or PERS Plan 3. The option must be
exercised within 90 days of employment. An employee is reported in Plan 2 until a choice is
made. Employees who fail to choose within 90 days default to PERS Plan 3.
Notwithstanding, PERS Plan 2 and Plan 3 members may opt out of plan membership if
terminally ill, with less than five years to live.
PERS Plan 1 and Plan 2 defined benefit retirement benefits are financed from a combination
of investment earnings and employer and employee contributions.
PERS Plan 1 members are vested after the completion of five years of eligible service. Plan 1
members are eligible for retirement after 30 years of service, or at the age of 60 with five
years of service, or at the age of 55 with 25 years of service. The monthly benefit is two
percent of the average final compensation (AFC) per year of service. (AFC is the monthly
average of the 24 consecutive highest-paid service credit months.) The retirement benefit may
not exceed 60 percent of AFC. The monthly benefit is subject to a minimum for PERS Plan 1
retirees who have 25 years of service and have been retired 20 years, or who have 20 years of
service and have been retired 25 years. Plan 1 members retiring from inactive status prior to
the age of 65 may receive actuarially reduced benefits. If a survivor option is chosen, the
benefit is further reduced. A cost-of-living allowance (COLA) was granted at age 66 based
upon years of service times the COLA amount. This benefit was eliminated by the
Legislature, effective July 1, 2011. Plan 1 members may elect to receive an optional COLA
that provides an automatic annual adjustment based on the Consumer Price Index. The
adjustment is capped at three percent annually. To offset the cost of this annual adjustment,
the benefit is reduced.
PERS Plan 1 provides duty and non-duty disability benefits. Duty disability retirement
benefits for disablement prior to the age of 60 consist of a temporary life annuity payable to
the age of 60. The allowance amount is $350 a month, or two-thirds of the monthly AFC,
whichever is less. The benefit is reduced by any workers' compensation benefit and is
payable as long as the member remains disabled or until the member attains the age of 60. A
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City of Pasco, -Washington 2011 Comprehensive .annualTinancialR.eport
member with five years of covered employment is eligible for non-duty disability retirement.
Prior to the age of 55, the allowance amount is two percent of the AFC for each year of
service reduced by two percent for each year that the member's age is less than 55. The total
benefit is limited to 60 percent of the AFC and is actuarially reduced to reflect the choice of a
survivor option. A cost-of-living allowance was granted at age 66 based upon years of service
times the COLA amount. This benefit was eliminated by the Legislature, effective July 1,
2011. Plan 1 members may elect to receive an optional COLA that provides an automatic
annual adjustment based on the Consumer Price Index. The adjustment is capped at 3 percent
annually. To offset the cost of this annual adjustment, the benefit is reduced.
PERS Plan 1 members can receive credit for military service. Members can also purchase up
to 24 months of service credit lost because of an on-the-job injury.
PERS Plan 2 members are vested after the completion of five years of eligible service. Plan 2
members are eligible for normal retirement at the age of 65 with five years of service. The
monthly benefit is two percent of the AFC per year of service. (AFC is the monthly average
of the 60 consecutive highest-paid service months.)
PERS Plan 2 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 reduced benefit. The benefit is reduced by an
early retirement factor(ERF)that varies according to age, for each year before age 65.
PERS Plan 2 members who have 30 or more years of service credit and are at least 55 years
old can retire under one of two provisions:
• With a benefit that is reduced by 3 percent for each year before age 65.
• With a benefit that has a smaller (or no) reduction (depending on age) that
imposes stricter return-to-work rules.
PERS Plan 2 retirement benefits are also actuarially reduced to reflect the choice, if made, of
a survivor option. There is no cap on years of service credit; and a cost-of-living allowance is
granted (based on the Consumer Price Index), capped at three percent annually.
The surviving spouse or eligible child or children of a PERS Plan 2 member who dies after
leaving eligible employment having earned ten years of service credit may request a refund of
the member's accumulated contributions.
PERS Plan 3 has a dual benefit structure. Employer contributions finance a defined benefit
component and member contributions finance a defined contribution component. The defined
benefit portion provides a monthly benefit that is one percent of the AFC per year of service.
(AFC is the monthly average of the 60 consecutive highest-paid service months.)
Effective June 7, 2006, PERS Plan 3 members are vested in the defined benefit portion of
their plan after ten years of service; or after five years of service, if twelve months of that
service are earned after age 44; or after five service credit years earned in PERS Plan 2 prior
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CiLy of Pasco, -Washington 2011 Comprehensive .annual Financial Report
to June 1, 2003. Plan 3 members are immediately vested in the defined contribution portion
of their plan.
Vested Plan 3 members are eligible for normal retirement at age 65, or they may retire early
with the following conditions and benefits:
• If they have at least ten service credit years and are 55 years old, the benefit is
reduced by an ERF that varies with age, for each year before age 65.
• If they have 30 service credit years and are at least 55 years old, they have the
choice of a benefit that is reduced by 3 percent for each year before age 65; or a
benefit with a smaller (or no) reduction factor (depending on age) that imposes
stricter return-to-work rules.
PERS Plan 3 defined benefit retirement benefits are also actuarially reduced to reflect the
choice, if made, of a survivor option. There is no cap on years of service credit and Plan 3
provides the same cost-of-living allowance as Plan 2.
PERS Plan 3 defined contribution retirement benefits are solely dependent upon contributions
and the results of investment activities.
The defined contribution portion can be distributed in accordance with an option selected by
the member, either as a lump sum or pursuant to other options authorized by the Director of
the Department of Retirement Systems.
PERS Plan 2 and Plan 3 provide disability benefits. There is no minimum amount of service
credit required for eligibility. The Plan 2 monthly benefit amount is two percent of the AFC
per year of service. For Plan 3, the monthly benefit amount is one percent of the AFC per
year of service.
These disability benefit amounts are actuarially reduced for each year that the member's age
is less than 65, and to reflect the choice of a survivor option. There is no cap on years of
service credit, and a cost-of-living allowance is granted (based on the Consumer Price Index)
capped at 3 percent annually.
PERS Plan 2 and Plan 3 members may have up to ten years of interruptive military service
credit; five years at no cost and five years that may be purchased by paying the required
contributions. Effective July 24, 2005, a member who becomes totally incapacitated for
continued employment while serving the uniformed services, or a surviving spouse or eligible
children, may apply for interruptive military service credit. Additionally, PERS Plan 2 and
Plan 3 members can also purchase up to 24 months of service credit lost because of an on-
the-job injury.
PERS members may also purchase up to five years of additional service credit once eligible
for retirement. This credit can only be purchased at the time of retirement and can be used
only to provide the member with a monthly annuity that is paid in addition to the member's
retirement benefit.
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City of Pasco, Washington 2011 Comprehensive .annualTinanciaC eport
Beneficiaries of a PERS Plan 2 or Plan 3 member with ten years of service who is killed in
the course of employment receive retirement benefits without actuarial reduction, if the
member was not at normal retirement age at death. This provision applies to any member
killed in the course of employment, on or after June 10, 2004, if found eligible by the
Department of Labor and Industries.
A one-time duty-related death benefit is provided to the estate (or duly designated nominee)
of a PERS member who dies in the line of service as a result of injuries sustained in the
course of employment, or if the death resulted from an occupational disease or infection that
arose naturally and proximately out of said member's covered employment, if found eligible
by the Department of Labor and Industries.
Judicial Benefit Multiplier
During January 1, 2007 through December 31, 2007, judicial members of PERS were given
the choice to participate in the Judicial Benefit Multiplier Program (JBM) enacted in 2006.
Justices and judges in PERS Plan 1 and Plan 2 were able to make a one-time irrevocable
election to pay increased contributions that would fund a retirement benefit with a 3.5 percent
multiplier. The benefit would be capped at 75 percent of AFC. Judges in PERS Plan 3 could
elect a 1.6 percent of pay per year of service benefit, capped at 37.5 percent of AFC.
Members who chose to participate in JBM would: accrue service credit at the higher
multiplier beginning with the date of their election; be subject to the benefit cap of 75 percent
of AFC, pay higher contributions; stop contributing to the Judicial Retirement Account
(JRA); and be given the option to increase the multiplier on past judicial service. Members
who did not choose to participate would: continue to accrue service credit at the regular
multiplier; continue to participate in JRA, if applicable; never be a participant in the JBM
Program; and continue to pay contributions at the regular PERS rate.
Newly elected or appointed justices and judges who chose to become PERS members on or
after January 1, 2007, or who had not previously opted into PERS membership, were required
to participate in the JBM Program. Members required into the JBM program would: return to
prior PERS Plan if membership had previously been established; be mandated into Plan 2 and
not have a Plan 3 transfer choice, if a new PERS member; accrue the higher multiplier for all
judicial service; not contribute to JRA; and not have the option to increase the multiplier for
past judicial service.
There are 1,197 participating employers in PERS. Membership in PERS consisted of the
following as of the latest actuarial valuation date for the plans of June 30, 2010:
Retirees and Beneficiaries Receiving Benefits 76,899
Terminated Plan Members Entitled to But Not Yet Receiving Benefits 28,860
Active Plan Members Vested 105,521
Active Plan Members Nonvested 51,005
Total 262,285
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City of Pasco, -Washington 2011 Comprehensive .annual T nanciaC eport
Funding Policy
Each biennium, the state Pension Funding Council adopts PERS Plan 1 employer
contribution rates, PERS Plan 2 employer and employee contribution rates, and PERS Plan 3
employer contribution rates. Employee contribution rates for Plan 1 are established by statute
at six percent for state agencies and local government unit employees, and at 7.5 percent for
state government elected officials. The employer and employee contribution rates for Plan 2
and the employer contribution rate for Plan 3 are developed by the Office of the State
Actuary to fully fund Plan 2 and the defined benefit portion of Plan 3. All employers are
required to contribute at the level established by the Legislature. Under PERS Plan 3,
employer contributions finance the defined benefit portion of the plan and member
contributions finance the defined contribution portion. The Plan 3 employee contribution
rates range from 5 percent to 15 percent, based on member choice. Two of the options are
graduated rates dependent on the employee's age. As a result of the implementation of the
Judicial Benefit Multiplier Program in January 2007, a second tier of employer and employee
rates was developed to fund, along with investment earnings, the increased retirement
benefits of those justices and judges that participate in the program.
The methods used to determine the contribution requirements are established under state
statute in accordance with Chapters 41.40 and 41.45 RCW.
The required contribution rates expressed as a percentage of current-year covered payroll, as
of December 31, 2011, are as follows:
Members not participating in JBM:
PERS Plan 1 PERS Plan 2 PERS Plan 3
Employer* 7.25%** 7.25%** 7.25%***
Employee 6.00%**** 4.64%****
*The employer rates include the employer administrative expense fee currently set at 0.16%.
**The employer rate for state elected officials is 10.80%for Plan 1 and 7.25%for Plan 2 and Plan 3.
***Plan 3 defined benefit portion only.
**** The employee rate for state elected officials is 7.50%for Plan 1 and 4.64%for Plan 2.
*****Variable from 5.0%minimum to 15.0%maximum based on rate selected by the PERS 3 member.
Members participating in JBM:
PERS Plan 1 PERS Plan 2 PERS Plan 3
Employer—State Agency* 9.75% 9.75% 9.75%
Employer—Local Government* 7.25% 7.25% 7.25%
Employee—State Agency 9.76% 9.10% 7.50%
Employee—Local Government 12.26% 11.60% 7.50%
*The employer rates include the employer administrative expense fee currently set at 0.16%.
**Plan 3 defined benefit portion only.
***Minimum rate.
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City of Pasco, -Washington 2011 Comprehensive .annualTinanciaC eport
Both City and the employees made the required contributions. The City's required
contributions for the years ended December 31 were as follows:
PERS Plan 1 PERS Plan 2 PERS Plan 3
2011 $ 33,181 $ 478,488 $ 89,001
2010 $ 30,900 $ 399,013 $ 71,751
2009 $ 39,492 $ 533,321 $ 84,383
Law Enforcement Officers' and Fire Fighters' Retirement System (LEOFF) Plans 1 & 2
Plan Description
The Legislature established LEOFF in 1970. Membership in the system includes all full-time,
fully compensated, local law enforcement commissioned officers, firefighters and, as of July
24, 2005, emergency medical technicians. LEOFF membership is comprised primarily of
non-state employees, with Department of Fish and Wildlife enforcement officers, who were
first included prospectively effective July 27, 2003, being an exception. LEOFF retirement
benefit provisions are established in Chapter 41.26 RCW and may be amended only by the
State Legislature.
LEOFF is a cost-sharing multiple-employer retirement system comprised of two separate
defined benefit plans. LEOFF members who joined the system by September 30, 1977 are
Plan 1 members. Those who joined on or after October 1, 1977 are Plan 2 members.
LEOFF defined benefit retirement benefits are financed from a combination of investment
earnings, employer and employee contributions, and a special funding situation in which the
state pays through state legislative appropriations.
Effective July 1, 2003, the LEOFF Plan 2 Retirement Board was established by Initiative 790
to provide governance of LEOFF Plan 2. The Board's duties include adopting contribution
rates and recommending policy changes to the Legislature for the LEOFF Plan 2 retirement
plan.
LEOFF Plan 1 members are vested after the completion of five years of eligible service. Plan
1 members are eligible for retirement with five years of service at the age of 50.
The benefit per year of service calculated as a percent of final average salary (FAS) is as
follows:
Term of Service Percent of Final Average Salary
20 or more years 2.0%
10 but less than 20 years 1.5%
5 but less than 10 years 1.0%
The FAS is the basic monthly salary received at the time of retirement, provided a member
has held the same position or rank for 12 months preceding the date of retirement. Otherwise,
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City of Pasco, -Washington 2011 Comprehensive .annual TinandaC eport
it is the average of the highest consecutive 24 months' salary within the last 10 years of
service. A cost-of-living allowance is granted(based on the Consumer Price Index).
LEOFF Plan 1 provides death and disability benefits. Death benefits for survivors of Plan 1
members on active duty consist of the following: (1) If eligible spouse, 50 percent of the
FAS, plus 5 percent of FAS for each eligible surviving child, with a limitation on the
combined allowances of 60 percent of the FAS; or (2) If no eligible spouse, eligible children
receive 30 percent of FAS for the first child plus 10 percent for each additional child, subject
to a 60 percent limitation of FAS, divided equally.
A one-time duty-related death benefit is provided to the estate (or duly designated nominee)
of a LEOFF Plan 1 member who dies as a result of injuries or illness sustained in the course
of employment, if found eligible by the Department of Labor and Industries.
The LEOFF Plan 1 disability allowance is 50 percent of the FAS plus 5 percent for each child
up to a maximum of 60 percent. Upon recovery from disability before the age of 50, a
member is restored to service with full credit for service while disabled. Upon recovery after
the age of 50, the benefit continues as the greater of the member's disability allowance or
service retirement allowance.
LEOFF Plan 1 members may purchase up to five years of additional service credit once
eligible for retirement. This credit can only be purchased at the time of retirement and can be
used only to provide the member with a monthly annuity that is paid in addition to the
member's allowance.
LEOFF Plan 2 members are vested after the completion of five years of eligible service. Plan
2 members may retire at the age of 50 with 20 years of service, or at the age of 53 with five
years of service, with an allowance of two percent of the FAS per year of service. (FAS is
based on the highest consecutive 60 months). Plan 2 members who retire prior to the age of
53 receive reduced benefits. Benefits are actuarially reduced for each year that the benefit
commences prior to age 53 and to reflect the choice of a survivor option. If the member has at
least 20 years of service and is age 50, the reduction is 3 percent for each year prior to age 53.
A cost-of-living allowance is granted (based on the Consumer Price Index), capped at three
percent annually.
LEOFF Plan 2 provides disability benefits. There is no minimum amount of service credit
required for eligibility. The Plan 2 allowance amount is two percent of the FAS for each year
of service. Benefits are actuarially reduced for each year that the member's age is less than
53, unless the disability is duty-related, and to reflect the choice of a survivor option. If the
member has at least 20 years of service and is age 50, the reduction is three percent for each
year prior to age 53. A catastrophic disability benefit equal to 70 percent of their FAS, subject
to offsets for workers' compensation and Social Security disability benefits received, is also
available to those LEOFF Plan 2 members who are severely disabled in the line of duty and
incapable of future substantial gainful employment in any capacity.
Effective June 2010, benefits to LEOFF Plan 2 members who are catastrophically disabled
include payment of eligible health care insurance premiums.
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City of Pasco, -Washington 2011 Comprehensive .annualTinandaC eport
Members of LEOFF Plan 2 who leave service because of a line of duty disability are allowed
to withdraw 150 percent of accumulated member contributions. This withdrawal benefit is
not subject to federal income tax. Alternatively, members of LEOFF Plan 2 who leave service
because of a line of duty disability may be eligible to receive a retirement allowance of at
least ten0 percent of FAS and two percent per year of service beyond five years. The first ten
percent of the FAS is not subject to federal income tax.
LEOFF Plan 2 retirees may return to work in an eligible position covered by another
retirement system, choose membership in that system and suspend their pension benefits, or
not choose membership and continue receiving pension benefits without interruption.
LEOFF Plan 2 members who apply for retirement may purchase up to five years of additional
service credit. The cost of this credit is the actuarial equivalent of the resulting increase in the
member's benefit.
LEOFF Plan 2 members can receive service credit for military service that interrupts
employment. Additionally, LEOFF Plan 2 members who become totally incapacitated for
continued employment while servicing in the uniformed services may apply for interruptive
military service credit. Should any such member die during this active duty, the member's
surviving spouse or eligible child(ren) may request service credit on behalf of the deceased
member.
LEOFF Plan 2 members may also purchase up to 24 consecutive months of service credit for
each period of temporary duty disability.
Beneficiaries of a LEOFF Plan 2 member who is killed in the course of employment receive
retirement benefits without actuarial reduction, if found eligible by the Director of the
Department of Labor and Industries.
Benefits to eligible surviving spouses and dependent children of LEOFF Plan 2 members
killed in the course of employment include the payment of on-going health care insurance
premiums paid to the Washington state Health Care Authority.
A one-time duty-related death benefit is provided to the estate (or duly designated nominee)
of a LEOFF Plan 2 member who dies as a result of injuries or illness sustained in the course
of employment, if found eligible by the Department of Labor and Industries.
There are 374 participating employers in LEOFF. Membership in LEOFF consisted of the
following as of the latest actuarial valuation date for the plans of June 30, 2010:
Retirees and Beneficiaries Receiving Benefits 9,647
Terminated Plan Members Entitled to But Not Yet Receiving Benefits 782
Active Plan Members Vested 13,420
Active Plan Members Non-vested 3,656
Total 27,505
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CiLy of Pasco, Washington 2011 Comprehensive .annualFinancial Report
Funding Policy
Starting on July 1, 2000, LEOFF Plan 1 employers and employees contribute zero percent as
long as the plan remains fully funded. Employer and employee contribution rates are
developed by the Office of the State Actuary to fully fund the plan. LEOFF Plan 2 employers
and employees are required to pay at the level adopted by the LEOFF Plan 2 Retirement
Board. The Legislature, by means of a special funding arrangement, appropriated money
from the state General Fund to supplement the current service liability and fund the prior
service costs of LEOFF Plan 2 in accordance with the requirements of the Pension Funding
Council and the LEOFF Plan 2 Retirement Board. However, this special funding situation is
not mandated by the state constitution and this funding requirement could be returned to the
employers by a change of statute.
The required contribution rates expressed as a percentage of current-year covered payroll, as
of December 31, 2011, are as follows:
LEOFF Plan 1 LEOFF Plan 2
Employer* 0.16% 5.24%**
Employee 0.00% 8.46%
State N/A 3.38%
*The employer rates include the employer administrative expense fee currently set at 0.16%.
**The employer rate for ports and universities is 8.62%.
Both City and the employees made the required contributions. The City's required
contributions for the years ended December 31 were as follows:
LEOFF Plan 1 LEOFF Plan 2
2011 $ 712 $ 455,227
2010 $ 697 $ 472,818
2009 $ 818 $ 459,665
Firemen's Pension
The City administers a closed, small single-employer defined benefit plan called the
Firemen's Pension Fund. The system is shown as a trust fund in the financial reports of the
City.
GASB Statements No 25 and 27 require performance of biennial actuarial valuations. The
most recent actuarial study of the system was performed to determine the funding
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City of Pasco, -Washington 2011 Comprehensive .annual Tinandal Report
requirements as of September 30, 2010. This plan in not audited; however, a copy of the can
be obtained by request at the following address:
City of Pasco
525 N 3rd Ave
Pasco, WA 99301
The City of Pasco's obligations under the Firemen's Pension Fund are limited to the benefits
provided to firefighters retired prior to March 1, 1970. As of December 31, 2011, there were
a total of 12 individuals covered by this system, and 4 of the 12 are widows. To meet these
obligations, the City may contribute annually to the Fund the amount raised by levying all or
part of a tax of up to $0.45 per $1,000 of true and fair market value, the maximum provided
by law for maintaining the Fund. Contributions also include income from state fire insurance
premium collections.
All actuarial calculations are based on RCW 41.16 and 41.18, the statutes establishing the
Firefighter's Pension Fund, and RCW 41.26, the statute establishing the Washington Law
Enforcement Officers' and Firefighters' Retirement System. Benefit provisions are
established in state statute and may be amended only by the State Legislature.
Each retiree 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 for
any firefighter, the excess benefits are paid from the Firefighter's Pension Fund of the city
employing them on March 1, 1970.
For a service retirement the member's benefit is 50% of salary plus an additional 2% for
each year of service in excess of 25 years. The maximum benefit is 60% of salary. The
survivor benefit is the same as the member's. The spouse is the same plus additional 5% of
salary per child. The maximum benefit in either case is 60% of salary. For a duty disability
retirement the member must be disabled for a six-month waiting period, during which time
salary is payable from the Fund. The amount of the benefit is 50% of salary plus an
additional 5% for each unmarried child under the age of 18. For a non-duty disability
retirement the member must be disabled after a 90-day waiting period, during which time
salary is payable from the Fund. For non-duty related disability the benefit is the same as
duty related disability. For both the duty related and non-duty related disabilities the survivor
benefits to spouse and/or child are as follows:
Percentage of Salary
To Widow Only 33.3%
To Widow and One Child 45.8%
To Widow and Two Children 47.6%
To Widow and Three Children 50.0%
To Children Only 33.33%
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City of Pasco, -Washington 2011 Comprehensive .annual TinandaC eport
For purposes of retirement benefit payments, salaries are escalated in proportion to the
current salary of the rank from which the firefighter retired. After April 25, 1973 a minimum
benefit of $300 per month to all retired firefighters and their survivors apply. A funeral
benefit of$500 is provided to defray funeral expenses.
The cash and investment balance (at fair market value) at December 31, 2011 was $1,667,133
and retirement pension payments totaled $96,850. The actuarial computation was performed
using the entry age normal cost method and include a UAAL amortization over a closed 20-
year period as of September 30, 2010. Under this method the projected benefits are allocated
on a level basis as a percentage of salary over the earnings of each individual between entry
age and assumed exit age. Investment earnings of the assets are assumed to accrue at an
annual rate of 4.0%. Salaries are assumed to increase at the rate of 3.5% per annum. This
assumption is for future inflation increases only. Since the members have at least 20 years of
service, no additional increase is assumed for merit increases. Certain benefits increase at the
same rate as the salaries for active members of the same rank the retiree had attained at
retirement. These salaries were assumed to increase at the rate of 3.5% per annum and are
assumed to increase on January 1 each year. Other benefits increase at the same rate as the
CPI . The CPI was assumed to increase at the rate of 2.5%per annum.
GASB Statement No.27 Annual Pension Cost and Net Pension Obligation
Fiscal Year Ended December 31
Annual required contribution(ARC) 2007 2008 2009 2010 2011
Annual Normal Cost(BOY) $0 $0 $0 $0 $0
Amortization of UAAL(BOY) 0 0 0 0 0
Interest to EOY 0 0 0 0 0
ARC at EOY $0 $0 $0 $0 $0
Interest on Net Pension Obligation(NPO) 0 0 0 0 0
Adjustment to ARC 0 0 0 0 0
Annual pension cost(APC) $0 $0 $0 $0 $0
Employer contributions 0 0 0 0 0
Change in NPO $0 $0 $0 $0 $0
NPO at Beginning of Year 0 0 0 0 0
Net Pension Obligation at End of Year $0 $0 $0 $0 $0
The schedules of funding progress for postemployment defined benefit plans are found
immediately following the notes to the financial statements and present multi-year trend
information about whether the actuarial value of plan assets are increasing or decreasing
relative to the actuarial accrued liability for benefits over time. The pension plan has
remained fully funded over the last five years and no additional contributions were made.
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City of Pasco, Washington 2011 Comprehensive .annual TinanciaC eport
D. 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. In the opinion
of management, the City's insurance policies and self-insurance reserves are adequate to pay
all known or pending claims.
As discussed in Note 4. F 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 grantor or representative. 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.
E. Joint ventures
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 five participating municipal corporations,
the cities of Kennewick, Pasco, and Richland, and Benton and Franklin Counties. BI-PIN
was established to assist the participating police and sheriffs 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 assets will be shared based upon participant
contribution.
Effective January 1, 1992, the City of Kennewick assumed responsibility for the operation of
the BI-PIN system. As the Operating Jurisdiction, the City provides all necessary support
services for the operation of BI-PIN such as accounting, legal services, risk management and
information systems. The total amount reduced by BI-PIN in 2011 for these transactions was
$36,390
The City of Pasco's equity interest in BI-PIN was $144,697 on December 31, 2011, which is
reported as investment in joint ventures in the government-wide statement of net assets. The
change in equity is reflected in the government-wide statement of activities under Public
Safety. The City does not anticipate any income distribution from BI-PIN since charges are
assessed only to recover anticipated expenses.
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City of Pasco, lashington 2011 Comprehensive AnnuaCTnanciaCReport
Complete separate financial statements for BI-PIN may be obtained at the City of
Kennewick, 210 West Sixth Avenue, Kennewick, Washington.
Metro Drug Forfeiture Fund
The Metropolitan Controlled Substance Enforcement Group (Metro) was established prior to
1987, when six participating municipal corporations entered into an Interlocal Agreement.
These entities include the cities of Kennewick, Pasco, Richland, and West Richland, and
Benton and Franklin Counties. Metro was 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 is 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 Police Chiefs from each of the
cities and the Sheriffs and Prosecuting Attorneys from the two counties, administers daily
activity.
Effective July 1, 2009, the City of Kennewick assumed responsibility for the operation of
Metro. As the Operating Jurisdiction, the City provides all necessary support services for the
operation of Metro such as accounting, legal services and risk management.
The City of Pasco's equity interest in Metro was $68,339 on December 31, 2011, which is
reported as an investment in joint ventures in the government-wide Statement of Net Assets.
The change in equity is reflected in the government-wide statement of activities under Public
Safety. The City does not anticipate any income distribution from Metro since charges are
assessed only to recover anticipated expenses.
Complete separate financial statements for Metro may be obtained from the City of
Kennewick, Washington.
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. 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
as accounting, contract administration and risk management.
Complete separate financial statements for ACA may be obtained from the City of Pasco,
Washington.
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City of Pasco, -Washington 2011 Comprehensive AnnuaCTnandaCReport
G. Other postemployment benefits
LEOFF 1 -Medical
In addition to the pension benefits outlined in Note 5.C, the City of Pasco provides post-
retirement health care benefits in accordance with state statute for retired police officers and
firefighters who are eligible under the Law Enforcement Officers' and Firefighters' (LEOFF)
plan 1 retirement system. As of December 31, 2011, the City had 51 individuals that met the
eligibility requirements of this plan.
Medical 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 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.
Funding Policy
Pursuant to state statute, the City reimburses 100% of authorized LEOFF 1 retiree healthcare
costs. The City pays a monthly insurance premium to cover each retiree under its medical
insurance program as well as any remaining eligible out of pocket expenses. Employer
contributions are financed on a pay-as-you-go basis. Expenditures for postemployment health
care benefits are recognized as retirees report claims and include a provision for estimated claims
incurred but not yet reported to the City.
Annual OPEB Costs and Net OPEB Obligation
The City's annual Other Post Employment Benefits (OPEB) cost is calculated based upon the
annual required contribution (ARC), an amount actuarially determined in accordance with the
parameters of Governmental Accounting Standards Board (GASB) Statement 45. The ARC
represents a level of funding that, if paid on an ongoing basis, is projected to cover the normal
costs each year and amortize any unfunded actuarial liabilities over a period of ten years.
Entities with fewer than 100 retired LEOFF members have the option under GASB 45 to either
hire an actuary to perform a valuation of the plan or do the valuation in-house. The Office of the
State Actuary for Washington State has provided a tool for City to perform an in-house
evaluation. Actuarial evaluations involve estimates and assumptions about the distant future that
are continually revised. The schedule of funding progress, located following the notes, provides
multi-year trend data to help determine whether net plan assets are increasing or decreasing over
time. Benefits are projected based on benefit levels and cost-sharing arrangements as of the date
of the valuation and do not explicitly reflect the potential effects of legal or contractual funding
limitations. Actuarial valuations take a long-term perspective that involves the use of techniques
designed to reduce volatility.
The City of Pasco has a total of 38 LEOFF 1 members in this plan. Thirty-three of those
members are retired and five are still active employees.
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City of Pasco, -Washington 2011 Comprehensive .annual TinandaC eport
The City uses the alternative measurement method permitted under GASB Statement No. 45. A
single retirement age of 56.22 was assumed for all active members for the purpose of
determining the actuarial accrued liability. Termination and mortality rates were assumed to
follow the LEOFF 1 termination and mortality rates used in the September 30, 2006 actuarial
valuation report issued by the office of the State Actuary (OSA). Healthcare costs and trends
were determined by Milliman and used by OSA in the State-wide LEOFF 1 medical study
performed in 2007. The results were based on grouped data with 4 active groupings and 4
inactive groupings. The actuarial cost method used to determine the actuarial accrued liability
was Projected Unit Credit. The Actuarial Accrued Liability and the Net OPEB Obligation are
amortized on an open basis as a level dollar over 15 years. These assumptions are individually
and collectively reasonable for the purpose of this valuation. As the year ended December 31,
2010 was the first year of implementation of GASB 45, annual OPEB cost was equal to the ARC
for the year.
2010 2011
Annual required contribution(ARC) $946,632 $937,477
Interest on Net OPEB Obligation(NOO) 0 0
Adjustments to ARC 0 (9,155)
Annual OPBEP cost(expense) $946,632 $937,477
Contributions made 364,043 370,815
Increase NOO 582,589 566,662
NOO at Beginning of Year 0 582,589
NOO at End of Year $582,589 $1,149,251
The City's OPEB cost, the percentage of OPEB cost contributed to the plan, and the net OPEB
obligation for the years ending December 31, 2010 and 2011 respectively are shown on the
following schedule:
%of
Fiscal Annual Annual Net
Year OPEB OPEB OPEB
Ended Cost Contributed Obligation
12/31/11 $937,477 40% $1,149,251
12/31/10 $946,632 38% $582,589
Fire Pension -Medical
Medical 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 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
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City of Pasco, -Washington 2011 Comprehensive .annualTinandaC eport
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.
Funding Policy
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.
Annual OPEB Costs and Net OPEB Obligation
The City's annual Other Post Employment Benefits (OPEB) cost is calculated based upon the
annual required contribution (ARC), an amount actuarially determined in accordance with the
parameters of Governmental Accounting Standards Board (GASB) Statement 45. The ARC
represents a level of funding that, if paid on an ongoing basis, is projected to cover the normal
costs each year and amortize any unfunded actuarial liabilities over a period of ten years.
Entities with fewer than 100 retired LEOFF members have the option to either hire an actuary to
perform a valuation of the plan or do the valuation in-house. The Office of the State Actuary for
Washington State has provided a tool to do the in-house evaluation. Actuarial evaluations
involve estimates and assumptions about the distant future that are continually revised. The
schedule of funding progress, located following the notes, provides multi-year trend data to help
determine whether net plan assets are increasing or decreasing over time. Benefits are projected
based on benefit levels and cost-sharing arrangements as of the date of the valuation and do not
explicitly reflect the potential effects of legal or contractual funding limitations. Actuarial
valuations take a long-term perspective that involves the use of techniques designed to reduce
volatility.
The City of Pasco has a total of 6 LEOFF plan 1 members that are also members of the Old
Firemen's Pension Plan and are fully funded through the Old Fire Pension Fund. All six are
retired. Based on the 2011 in-house evaluation, the Actuarial Accrued Liability for the Fire
Pension OPEB Fund is $1,736,000. As of December 31, 2011, the fund had assets of
$1,667,133.
The City uses the alternative measurement method permitted under GASB Statement No. 45.
Termination and mortality rates were assumed to follow the LEOFF 1 termination and mortality
rates used in the September 30, 2006 actuarial valuation report issued by the office of the State
Actuary (OSA). Healthcare costs and trends were determined by Milliman and used by OSA in
the State-wide LEOFF 1 medical study performed in 2007. The actuarial cost method used to
determine the actuarial accrued liability was Projected Unit Credit. The Actuarial Accrued
Liability and the Net OPEB Obligation are amortized on an open basis as a level dollar over 15
years. These assumptions are individually and collectively reasonable for the purpose of this
valuation. As December 31, 2010 was the first year of implementation for GASB 45, annual
OPEB cost was equal to the ARC for the year.
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City of Pasco, -Washington 2011 Comprehensive .annual financiaC eport
2010 2011
Annual required contribution(ARC) $0 $0
Interest on Net OPEB Obligation(NOO) 0 0
Annual OPBEP cost(expense) $0 $0
Contributions made 0 0
Increase NOO $0 $0
NOO at Beginning of Year 0 0
NOO at End of Year $0 $0
The City's OPEB cost, the percentage of OPEB cost contributed to the plan, and the net OPEB
obligation for the years ending December 31, 2010 and 2011 respectively are shown on the
following schedule:
%of
Fiscal Annual Annual Net
Year OPEB OPEB OPEB
Ended Cost Contributed Obli ation
12/31/11 $0 N/A $0
12/31/10 $0 N/A $0
H. Prior period adjustments
"Net assets beginning" on the Statement of Activities in the Governmental Activities column
was restated(decreased) a net total of$669,589. The largest component of this change
($400,000) is due to restatement of the general fund's beginning cash balance to bring the
statements into balance with the actual cash balances at the end of the prior year. $134,594 was
to bring deferred revenues related to special assessments to the correct total. The remaining
$134,995 is due to removing the deferred revenue from beginning fund balance as revenues are
not deferred at the government wide level. Under the full accrual basis of accounting the revenue
is not subject to the "availability" criteria and was earned in prior periods.
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City of Pasco, Washington 2011 Comprehensive AnnuaCTnanciaCReport
Required Supplementary Information
Firemen's Pension Fund
The following is a schedule of contributions from the employer and other contributing entities for the
Firemen's Pension Fund:
Annual
Fiscal Actual Fire Actual Required Percentage
Year Insurance Employer Total Contribution ofARC
Ending Premiums Contributions Contributions (ARC) Contributed
12/31/2011 45,132 - 45,132 - N/A%
12/31/2010 41,516 - 41,516 - N/A%
12/31/2009 39,785 - 39,785 - N/A%
12/31/2008 41,723 - 41,723 - N/A%
12/31/2007 40,123 - 40,123 - N/A%
12/31/2006 34,834 - 34,834 - N/A%
Schedule of Funding Progress for the Firemen's Pension Fund(rounded to thousands)
Unfunded UAAL As A
Actuarial Actuarial Actuarial Percentage
Asset Accrued Accrued Funded Covered of Covered
Valuation Date Value Liabilities Liabilities(UAAL) Ratio Payroll Payroll
September 30,2011 $ 1,667 $ 1,736 $ 69 96% N/A N/A%
September 30,2010 $ 1,599 $ 1,599 $ - 100% N/A N/A%
September 30,2005 $ 3,921 $ 2,820 $ (1,101) 139% N/A N/A%
December 31,1999 $ 3,467 $ 2,468 $ (999) 140% N/A N/A%
December 31,1984 $ 870 $ 1,502 $ 632 58% N/A N/A%
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City of Pasco, Washington 2011 Comprehensive .annual T nanciaC eport
Required Supplementary Information
Other LEOFF 1 OPEB
The following is a schedule of contributions from the employer and other contributing entities for the
Other LEOFF 1
Annual
Fiscal Actual Fire Actual Required Percentage
Year Insurance Employer Total Contribution of ARC
Ending Premiums Contributions Contributions (ARC) Contributed
12/31/2011 - 364,043 364,043 937,477 39%
12/31/2010 - 364,043 364,043 946,632 38%
Schedule of Funding Progress for the Firemen's OPEB Fund(rounded to thousands)
Unfunded UAAL As A
Actuarial Actuarial Actuarial Percentage
Asset Accrued Accrued Funded Covered of Covered
Valuation Date Value Liabilities Liabilities (UAAL) Ratio Payroll Payroll
December 31,2011 $ - $ 9,638 $ 9,638 0% N/A N/A%
December 31,2010 $ - $ 9,693 $ 9,693 0% N/A N/A%
78
City of Pasco, Washington 2011 Comprehensive .annual T nanciaC eport
Required Supplementary Information
Firemen's OPEB Fund
The following is a schedule of contributions from the employer and other contributing entities for the
Firemen's Pension Fund:
Annual
Fiscal Actual Fire Actual Required Percentage
Year Insurance Employer Total Contributior of ARC
Ending Premiums Contributions Contributions (ARC) Contributed
12/31/2011 - - - - N/A%
12/31/2010 - - - - N/A%
12/31/2009 - - - - N/A%
12/31/2008 - - - - N/A%
12/31/2007 - - - - N/A%
12/31/2006 - - - - N/A%
Schedule of Funding Progress for the Firemen's OPEB Fund(rounded to thousands)
Unfunded UAAL As A
Actuarial Actuarial Actuarial Percentage
Asset Accrued Accrued Funded Covered of Covered
Valuation Date Value Liabilities Liabilities (UAAL) Ratio Payroll Payroll
December 31,2011 $ 2,358 $ 1,736 $ (622) 136% N/A N/A%
December 31,2010 $ 1,993 $ 1,812 $ (181) 110% N/A N/A%
79
City of Pasco, Washington 2011 Comprehensive AnnuaCTnanciaCReport
COMBINING AND INDIVIDUAL FUND
STATEMENTS AND SCHEDULES
Nonmajor Governmental Funds
Special Revenue Funds
Special revenue funds are used to account for specific revenues that are legally restricted to expenditures
for particular purposes.
Debt Service Funds
Debt service funds are used to account for the accumulation of resources for, and the payment of general
long-term debt principal and interest.
Capital Project Funds
Capital project funds are used to account for the acquisition and construction of major capital facilities other than
those financed by proprietary funds and trust funds.
Permanent Funds
Permanent funds are used to report resources that are legally restricted to the extent that only earnings, not principal,
may be sued for purposes that support the reporting government's programs.
80
City of Pasco, Washington 2011 Comprehensive AnnuaCTnanciaCReport
Combining Balance Sheet
Nonmajor Other Governmental Funds
December 31,2011
Total Total Total Cemetery
Nonmajor Nonmajor Nonmajor Perpetual Care Total
Other Special Debt Construction Nonmajor Other
Revenue Service Projects Permanent Governmental
ASSETS
Cash&cash equivalents $ 10,966,646 $ 1,486,980 $ 1,540,297 $ 399,740 $ 14,393,663
Investments 1,000,000 - - - 1,000,000
Receivables(net of allowances):
Taxes 230,401 23,075 - - 253,476
Customers 452,253 - 750 327 453,330
Interfund loans 60,000 - - - 60,000
Grants 379,426 - - 379,426
Special assessments&loans 134,995 734,583 - - 869,578
Total assets 13,223,721 2,244,638 1,541,047 400,067 17,409,473
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable 268,693 15,000 100,647 - 384,340
Interfund loans payable 535,000 317,682 168,000 1,020,682
Due to other governments 2,125 - - 2,125
Deferred revenue 147,370 757,658 - - 905,028
Deposits payable 4,264 - - 4,264
Total liabilities 957,452 1,090,340 268,647 - 2,316,439
Fund Balances:
Nonspendable permanent fund - - - 400,067 400,067
Restricted 8,517,064 979,256 - - 9,496,320
Committed 3,927,590 175,042 1,272,400 - 5,375,032
Unassigned (178,385) (178,385)
Total Fund Balances 12,266,269 1,154,298 1,272,400 400,067 15,093,034
TOTAL LIABILITIES AND
FUND BALANCES $ 13,223,721 $ 2,244,638 $ 1,541,047 $ 400,067 $ 17,409,473
81
City of Pasco, Washington 2011 Compre(iensive .AnnuaCTtnanciaCR.eport
Combining Statement of Revenues,Expenditures,and Changes in Fund Balances
Nonmajor Other Governmental Funds
For the Year Ended December 31,2011
Total Total Cemetery
Nonmajor Nonmajor Total Perpetual Care Total
Other Special Debt Nonmajor Nonmajor Other
Revenue Service Construction Permanent Governmental
REVENUES
Taxes $ 2,631,936 $ 527,865 $ $ $ 3,159,801
Licenses and permits 284,218 - 284,218
Intergovernmental revenue 4,370,647 - 1,793,399 6,164,046
Charges for services 3,947,525 - - 16,397 3,963,922
Fines and forfeitures 52,544 - - - 52,544
Miscellaneous revenue 828,187 608,531 324,936 286 1,761,940
Total Revenues 12,115,057 1,136,396 2,118,335 16,683 15,386,471
EXPENDITURES
Current:
Public safety 2,679,135 - - - 2,679,135
Physical environment 441,806 - - - 441,806
Transportation 2,446,805 - - - 2,446,805
Economic environment 446,375 - - - 446,375
Health and human services 196,374 - - - 196,374
Culture and recreation 2,490,709 - 12,125 - 2,502,834
Capital outlay:
Public safety 7,535 - 10,550 - 18,085
Transportation - - 3,276,044 - 3,276,044
Economic environment 657,080 - - - 657,080
Culture and recreation - - 361,576 - 361,576
Debt Service:
Principal 189,828 740,129 - - 929,957
Interest 37,548 138,427 - - 175,975
Total Expenditures 9,593,195 878,556 3,660,295 - 14,132,046
Excess of revenues
over(under)expenditures 2,521,862 257,840 (1,541,960) 16,683 1,254,425
OTHER FINANCING SOURCES(USES)
Debtproceeds - - 89,351 - 89,351
Transfers in 2,153,163 - 2,705,008 - 4,858,171
Transfers out (2,947,144) (35,322) (800,712) (100) (3,783,278)
Total other financing sources(uses) (793,981) (35,322) 1,993,647 (100) 1,164,244
Net change in fund balances 1,727,881 222,518 451,687 16,583 2,418,669
Fund balances-beginning 10,538,388 931,780 820,713 383,484 12,674,365
Fund balances-ending $12,266,269 $ 1,154,298 $ 1,272,400 $ 400,067 $ 15,093,034
82
City of Pasco, Washington 2011 Comprehensive AnnuaCTnandaCReport
Schedule of Expenditures-Budget to Actual
Nonmajor Other Governmental Funds
For the Year Ended December 31,2011
Revenues Expenditures
Final Variance to Final Variance to
Budget Actual Final Budget Budget Actual Final Budget
Special Revenue Funds
City Street Fund $ 2,557,908 $ 2,493,816 $ (64,092) $ 2,414,901 $ 2,414,901 $
Arterial Street Fund 2,350,100 1,235,677 (1,114,423) 2,607,548 402,765 (2,204,783)
I-82 Traffic Impact Fund 1,145,640 330,055 (815,585) 1,280,623 284,982 (995,641)
Street Overlay Fund 2,278,370 842,995 (1,435,375) 2,278,370 16,587 (2,261,783)
Community Dev Block Grant Fund 2,492,285 1,624,526 (867,759) 2,314,752 1,652,884 (661,868)
ML King Community Center Fund 136,950 132,262 (4,688) 146,950 130,719 (16,231)
Ambulance Services Fund 2,790,040 2,450,267 (339,773) 3,075,675 2,686,670 (389,005)
City View Cemetery Fund 347,780 244,319 (103,461) 363,780 225,041 (138,739)
Blvd Perpetual Maintenance Fund 1,721,294 164,157 (1,557,137) 1,781,294 70,000 (1,711,294)
Athletic Program Fund 298,270 202,626 (95,644) 298,270 190,225 (108,045)
Golf Course 1,414,660 1,393,782 (20,878) 1,219,030 1,452,538 233,508
Senior Center Fund 332,570 322,183 (10,387) 297,570 278,407 (19,163)
Multi-Modal Fund 89,030 68,183 (20,847) 134,030 96,603 (37,427)
Bi-Centenial Fund 6,430 5 (6,425) 6,430 - (6,430)
Rivershore Trail&Marina Fund 21,610 12,004 (9,606) 21,610 12,234 (9,376)
Special Lodging Assess Fund 290,110 189,235 (100,875) 290,110 196,374 (93,736)
Litter Abatement Fund 27,330 12,507 (14,823) 27,330 14,583 (12,747)
Revolving Abatement Fund 398,620 71,645 (326,975) 422,355 78,836 (343,519)
TRAC Develop&Operating Fund 526,650 475,713 (50,937) 547,150 443,349 (103,801)
Park Development Fund 2,596,750 501,077 (2,095,673) 2,516,260 404,510 (2,111,750)
Capital Improvement Fund 4,621,310 1,119,545 (3,501,765) 4,521,310 1,227,122 (3,294,188)
hidustrial Development Fund 1,032,400 129,459 (902,941) 1,032,400 10,000 (1,022,400)
Stadium/Convention Ctr Fund 384,060 251,889 (132,171) 280,060 251,009 (29,051)
Landfill Remediation Fund 401,760 293 (401,467) 401,760 - (401,760)
Total 28,261,927 14,268,220 (13,993,707) 28,279,568 12,540,339 (15,739,229)
Debt Service Funds
LID Loans 104,000 121,807 17,807 139,323 52,210 (87,113)
LID Bonds 144,470 442,595 298,125 334,712 334,712
Library/Fire Station Bonds 258,823 149,796 (109,027) 258,823 149,352 (109,471)
2002 UTGO Bonds 958,611 378,443 (580,168) 958,611 377,604 (581,007)
LID Guarantee 978,874 43,755 (935,119) 978,874 - (978,874)
Total 2,444,778 1,136,396 (1,308,382) 2,670,343 913,878 (1,756,465)
Capital Project Funds
General Purpose Construction 1,092,978 4,632,503 3,539,525 8,659,047 4,179,295 (4,479,752)
LID Construction 277,756 280,191 2,435 281,000 281,712 712
Total 1,370,734 4,912,694 3,541,960 8,940,047 4,461,007 (4,479,040)
Permanent Funds
Cemetery Perpetual Care 393,160 16,683 $ (376,477) 393,160 $ 100 $ (393,060)
Total $ 393,160 $ 16,683 $ (376,477) $ 393,160 $ 100 $ (393,060)
83
City of Pasco, Washington 2011 Comprehensive AnnuaCTnandaCReport
Combining Balance Sheet
Nonmajor Special Revenue Funds
December 31,2011
Community
City Arterial I-182 Traffic Street Development
Street Street Impact Overlay Block Grant
ASSETS
Cash&cash equivalents $ 28,681 $ 816,973 $ 757,900 $ 2,933,764 $ 9,789
Investments -
Receivables(net of allowances):
Taxes 78,907 29,907 76,499 -
Customers 99,702 -
Interfund loans -
Grants 197,026 178,512
Special assessments&loans 134,995
Total assets 404,316 846,880 757,900 3,010,263 323,296
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable 156,085 12,186 17,930
hrterfund loans payable 290,000
Due to other governments -
Deferred revenue 134,995
Deposits payable -
Total liabilities 156,085 12,186 - 442,925
Fund Balances:
Restricted 834,694 757,900
Committed 248,231 3,010,263 -
Unassigned (119,629)
Total Fund Balances 248,231 834,694 757,900 3,010,263 (119,629)
TOTAL LIABILITIES AND
FUND BALANCES $ 404,316 $ 846,880 $ 757,900 $ 3,010,263 $ 323,296
84
City of Pasco, Washington 2011 Comprehensive AnnuaCTnandaCReport
M.L.King
Community Ambulance City View Athletic Golf Senior Multi-Modal
Center Services Cemetery Blvd.Perpetual Program Course Center Facility
$ 14,387 $(120,791) $ 66,161 $ 656,448 $ 135,801 $139,881 $ 101,544 $ 52,292
1,000,000
2,206 230,203 9,765 2,046 1,755 3,235
60,000
3,888
16,593 109,412 75,926 1,716,448 135,801 141,927 107,187 55,527
41349 26,921 848 11,326 15,583 15,425 3,373
185,000
1,313 245 441
12,375
193 1,150 100 621 2,200
4,542 26,921 14,536 - 12,476 200,683 16,291 6,014
1,716,448 123,325 90,896 49,513
12,051 82,491 61,390
(58,756)
12,051 82,491 61,390 1,716,448 123,325 (58,756) 90,896 49,513
$ 16,593 $ 109,412 $ 75,926 $ 1,716,448 $ 135,801 $141,927 $ 107,187 $ 55,527
85
City of Pasco, Washington 2011 Comprehensive AnnuaCTnandaCReport
Combining Balance Sheet
Nonmajor Special Revenue Funds(continued)
December 31,2011
Rivershore Trail Special
&Marina Lodging Litter Revolving
Bi-Centennial Maintenance Assessment Abatement Abatement
ASSETS
Cash&cash equivalents $ 6,264 $ 6,252 $ 1,225 $ 6,982 $ 180,554
Investments
Receivables(net of allowances):
Taxes 13,046
Customers 2,257 2,187 98,897
Interfund loans
Grants
Special assessments&loans
Total assets 6,264 8,509 14,271 9,169 279,451
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable 352 687 799
Interfund loans payable
Due to other governments 126
Deferred revenue
Deposits payable
Total liabilities - 478 - 687 799
Fund Balances:
Restricted 6,264 8,031 14,271 8,482 278,652
Committed
Unassigned
Total Fund Balances 6,264 8,031 14,271 8,482 278,652
TOTAL LIABILITIES AND
FUND BALANCES $ 6,264 $ 8,509 $ 14,271 $ 9,169 $ 279,451
86
City of Pasco, Washington 2011 Comprehensive AnnuaCTnandaCReport
Total
T.R.A.C. Industrial Stadium/ Nonmajor
Development Park Capital Development Convention Landfill Special
&Operating Development Improvements &Infrastructure Center Remediation Revenue
$ 82,205 $ 1,591,249 $ 2,032,716 $ 1,004,623 $ 60,655 $ 401,091 $ 10,966,646
1,000,000
16,021 16,021 230,401
452,253
60,000
379,426
134,995
98,226 1,591,249 2,032,716 1,004,623 76,676 401,091 13,223,721
2,829 268,693
60,000 535,000
2,125
147,370
4,264
- - - - 62,829 - 957,452
1,591,249 2,032,716 1,004,623 8,517,064
98,226 13,847 401,091 3,927,590
(178,385)
98,226 1,591,249 2,032,716 1,004,623 13,847 401,091 12,266,269
$ 98,226 $ 1,591,249 $ 2,032,716 $ 1,004,623 $ 76,676 $ 401,091 $ 13,223,721
87
City of Pasco, Washington 2011 Comprehensive AnnuaCTnanciaCReport
Combining Statement of Revenues,Expenditures,and Changes in Fund Balances
Nonmajor Special Revenue Funds
For the Year Ended December 31,2011
Community
City Arterial I-182 Traffic Street Development
Street Street Impact Overlay Block Grant
REVENUES
Taxes $ 206,439 $ 841,090 $
Licenses and permits 284,218 -
Intergovernmental revenue 1,435,711 1,195,558 1,581,511
Charges for services - 400
Fines and forfeitures -
Miscellaneous revenue - 40,119 330,055 1,905
Total Revenues 1,926,368 1,235,677 330,055 842,995 1,581,911
EXPENDITURES
Current:
Public safety -
Physical environment 105,579
Transportation 2,414,901 15,317 16,587 -
Economic environment 332,378
Health and human services -
Culture and recreation
Capital outlay:
Public safety -
Economic environment 641,845
Debt Service:
Principal -
Interest -
Total Expenditures 2,414,901 15,317 - 16,587 1,079,802
Excess of revenues
over(under)expenditures (488,533) 1,220,360 330,055 826,408 502,109
OTHER FINANCING SOURCES(USES)
Transfers in 567,448 42,615
Transfers out (387,448) (284,982) (573,082)
Total other financing sources(uses) 567,448 (387,448) (284,982) - (530,467)
Net change in fund balances 78,915 832,912 45,073 826,408 (28,358)
Fund balances-beginning 169,316 1,782 712,827 2,183,855 (91,271)
Fund balances-ending $ 248,231 S 834,694 $ 757,900 $ 3,010,263 $ (119,629)
88
City of Pasco, Washington 2011 Comprehensive AnnuaCTnandaCReport
M.L.King
Community Ambulance City View Athletic Golf Senior Multi-Modal
Center Services Cemetery Blvd.Perpetual Program Course Center Facility
1,738 27,358
2,559 2,025,279 210,984 150,363 1,356,057 -
29,703 3,250 3,235 164,157 52,263 29,725 64,825 68,183
32,262 2,030,267 214,219 164,157 202,626 1,385,782 92,183 68,183
2,679,135
225,041 96,603
40,396
130,719 190,225 1,452,538 238,011
7,535
130,719 2,686,670 225,041 - 190,225 1,452,538 278,407 96,603
(98,457) (656,403) (10,822) 164,157 12,401 (66,756) (186,224) (28,420)
100,000 420,000 30,100 8,000 230,000
(70,000)
100,000 420,000 30,100 (70,000) - 8,000 230,000
1,543 (236,403) 19,278 94,157 12,401 (58,756) 43,776 (28,420)
10,508 318,894 42,112 1,622,291 110,924 47,120 77,933
$ 12,051 $ 82,491 $ 61,390 $ 1,716,448 $ 123,325 $ (58,756) $ 90,896 $ 49,513
89
City of Pasco, lwashington 2011 Comprehensive AnnuaCTnanciaCReport
Combining Statement of Revenues,Expenditures,and Changes in Fund Balances
Nonmajor Special Revenue Funds(continued)
For the Year Ended December 31,2011
Rivershore Trail Special T.R.A.C.
&Marina Lodging Litter Revolving Development
Bi-Centennial Maintenance Assessment Abatement Abatement &Operating
REVENUES
Taxes $ 189,221 $ 240,713
Licenses and permits
Intergovernmental revenue
Charges for services 5,000 16,898
Fines and forfeitures 52,544
Miscellaneous revenue 5 12,004 14 7,507 2,203 -
Total Revenues 5 12,004 189,235 12,507 71,645 240,713
EXPENDITURES
Current:
Public safety
Physical environment 14,583
Transportation
Economic environment 63,601
Health and human services 196,374
Culture and recreation 12,234 340,660
Capital outlay:
Public safety
Economic environment 15,235
Debt Service:
Principal 84,828
Interest 17,861
Total Expenditures - 12,234 196,374 14,583 78,836 443,349
Excess of revenues
over(under)expenditures 5 (230) (7,139) (2,076) (7,191) (202,636)
OTHER FINANCING SOURCES(USES)
Transfers in 235,000
Transfers out
Total other financing sources(uses) - - 235,000
Net change in fund balances 5 (230) (7,139) (2,076) (7,191) 32,364
Fund balances-beginning 6,259 8,261 21,410 10,558 285,843 65,862
Fund balances-ending $ 6,264 $ 8,031 $ 14,271 $ 8,482 $ 278,652 $ 98,226
90
City of Pasco, Washington 2011 Comprehensive AnnuaCTnandaCReport
Total
Nonmaj or
Park Capital Indust.Devel. Stadium/ Landfill Special
Development Improvement &Infrastructure Conv.Center Remediation Revenue
$ 918,161 $ 236,312 $ 2,631,936
284,218
128,771 4,370,647
179,985 3,947,525
52,544
1,092 1,384 688 15,577 293 828,187
181,077 919,545 129,459 251,889 293 12,115,057
2,679,135
441,806
2,446,805
10,000 446,375
196,374
126,322 2,490,709
7,535
657,080
105,000 189,828
19,687 37,548
- 10,000 251,009 - 9,593,195
181,077 919,545 119,459 880 293 2,521,862
320,000 200,000 2,153,163
(404,510) (1,227,122) (2,947,144)
(84,510) (1,027,122) - - - (793,981)
96,567 (107,577) 119,459 880 293 1,727,881
1,494,682 2,140,293 885,164 12,967 400,798 10,538,388
$ 1,591,249 $ 2,032,716 $ 1,004,623 $ 13,847 $ 401,091 $ 12,266,269
91
City of Pasco, Washington 2011 Comprehensive AnnuaCTnanciaCReport
Combining Balance Sheet
Nonmajor Debt Service Funds
December 31,2011
Total
1999 Library/ 2002 Local hnprov. Nonmajor
LID LID Fire Station Unl.Tax G.O. District Debt
Loans Bonds Bonds Refunding Bonds Guaranty Service
ASSETS
Cash&cash equivalents $ 12,002 $ 213,883 $ 98,859 $ 237,611 $ 924,625 $ 1,486,980
Receivables(net of allowances):
Taxes - 6,358 16,717 23,075
Special assessments&loans 399,223 324,261 11,099 734,583
Total assets 411,225 538,144 105,217 254,328 935,724 2,244,638
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable - 15,000 15,000
hrterfund loans payable 317,682 317,682
Deferred revenue 399,223 324,261 6,358 16,717 11,099 757,658
Total liabilities 716,905 324,261 6,358 16,717 26,099 1,090,340
Fund Balances:
Restricted (305,680) 213,883 98,859 237,611 734,583 979,256
Coninitted 175,042 175,042
Total Fund Balances (305,680) 213,883 98,859 237,611 909,625 1,154,298
TOTAL LIABILITIES AND
FUND BALANCES $ 411,225 $ 538,144 $ 105,217 $ 254,328 $ 935,724 $ 2,244,638
92
City of Pasco, -Washington 2011 Comprehensive .annual financiaC eport
Combining Statement of Revenues,Expenditures,and Changes in Fund Balances
Nonmajor Debt Service Funds
December 31,2011
Total
1999 Library/ 2002 Local huprov. Nonmajor
LID LID Fire Station Unl.Tax G.O. District Debt
Loans Bonds Bonds Refunding Bonds Guaranty Service
REVENUES
Taxes $ - $ 149,692 $ 378,173 $ 527,865
Miscellaneous revenue 121,807 442,595 104 270 43,755 608,531
Total Revenues 121,807 442,595 149,796 378,443 43,755 1,136,396
EXPENDITURES
Debt Service:
Principal - 305,129 100,000 335,000 740,129
Interest 16,888 29,583 49,352 42,604 138,427
Total Expenditures 16,888 334,712 149,352 377,604 - 878,556
Excess of revenues
over(under)expenditures 104,919 107,883 444 839 43,755 257,840
OTHER FINANCING SOURCES(USES)
Transfers out (35,322) (35,322)
Total other financing sources(uses) (35,322) - - - - (35,322)
Net change in fund balances 69,597 107,883 444 839 43,755 222,518
Fund balances-beginning (375,277) 106,000 98,415 236,772 865,870 931,780
Fund balances-ending $ (305,680) $ 213,883 $ 98,859 $ 237,611 $ 909,625 $ 1,154,298
93
Cit-o of Pasco, Washington 2011 Comprehensive .annual EtnanciaCReport
Combining Balance Sheet
Nonmajor Capital Projects Funds
December 31, 2011
General LID Total
Capital Projects Capital Projects Capital Projects
ASSETS
Cash&cash equivalents $ 1,540,297 $ 1,540,297
Receivables (net of allowances):
Customers 750 750
Total assets 1,541,047 - 1,541,047
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable 100,647 100,647
Interfund loans payable 168,000 168,000
Total liabilities 268,647 - 268,647
Fund Balances:
Committed 1,272,400 - 1,272,400
Total Fund Balances 1,272,400 - 1,272,400
TOTAL LIABILITIES AND
FUND BALANCES $ 1,541,047 $ - $ 1,541,047
94
City of Pasco, -Washington 2011 Comprehensive AnnuafFYnancialR.eport
Combining Statement of Revenues, Expenditures and Changes in Fund Balance
Nonmajor Capital Project Funds
December 31, 2011
Genearal LID Total
Capital Projects Capital Projects Capital Projects
REVENUES
Intergovernmental revenue $ 1,793,399 $ 1,793,399
Miscellaneous revenue 322,500 2,436 324,936
Total Revenues 2,115,899 2,436 2,118,335
EXPENDITURES
Current:
Culture and recreation 12,125 12,125
Capital outlay:
Public safety 10,550 10,550
Transportation 3,275,044 1,000 3,276,044
Culture and recreation 361,576 361,576
Total Expenditures 3,659,295 1,000 3,660,295
Excess of revenues
over(under)expenditures (1,543,396) 1,436 (1,541,960)
OTHER FINANCING SOURCES(USES)
Debt proceeds - 89,351 89,351
Transfers in 2,516,604 188,404 2,705,008
Transfers out (520,000) (280,712) (800,712)
Total other financing sources(uses) 1,996,604 (2,957) 1,993,647
Net change in fund balances 453,208 (1,521) 451,687
Fund balances-beginning 819,192 1,521 820,713
Fund balances-ending $ 1,272,400 $ - $ 1,272,400
95
City of Pasco, Washington 2011 Comprehensive AnnuaCTnanciaCReport
Nonmajor Proprietary Funds
Enterprise Funds
Enterprise funds are used to account for the financing of goods or services for which a fee is charged
to external users for use of those goods and services. The City of Pasco does not have any nonmajor
enterprise funds.
Internal Service Funds
Internal service funds are used to account for the financing of goods or services provided by one
department to other departments of the government and to other government units on a cost
reimbursement basis.
96
City of Pasco, 'Washington 2011 Comprehensive AnnualFinancialR.eport
Combining Statement of Net Assets
Nonmajor Internal Services Fund
For the Year Ended December 31,2011
Governmental Activities Business-Type Activities
Equipment Equipment Medical Equipment Equipment Total
Rental Rental Insurance Central Rental Rental Internal
Operations Replacement Fund Stores Operations Replacement Service
ASSETS
Current assets:
Current cash&cash equivalents $ 215,300 $ 3,495,800 $ 1,132,278 $ 12,853 $ 138,855 $ 1,438,351 $ 6,433,437
Investments -
Receivables
Interfund loans-current portion 43,890 43,890
Total current assets 215,300 3,539,690 1,132,278 12,853 138,855 1,438,351 6,477,327
Noncurrent assets:
Interfund loans 273,792 273,792
Construct work in process -
Machinery and equipment 5,798,950 2,513,308 8,312,258
Accumulated depreciation (3,694,703) (1,120,622) (4,815,325)
Total noncurrent assets - 2,378,039 - - 1,392,686 3,770,725
Total assets 215,300 5,917,729 1,132,278 12,853 138,855 2,831,037 10,248,052
LIABILITIES
Current liabilities:
Accounts payable 32,298 551,858 41 4,482 588,679
Due to other governments
Total current liabilities 32,298 551,858 41 4,482 588,679
Noncurrent liabilities:
Compensated absences 11,040 3,114 14,154
Total noncurrent liabilities 11,040 - 3,114 14,154
Total liabilities 43,338 - 551,858 41 7,596 - 602,833
NET ASSETS
Investment in capital assets,net
of related debt 2,104,247 1,392,686 3,496,933
Unrestricted 171,962 3,813,482 580,420 12,812 131,259 1,438,351 6,148,286
Total net assets $ 171,962 $ 5,917,729 $ 580,420 $ 12,812 $ 131,259 $ 2,831,037 $ 9,645,219
97
City of Pasco, 'Washington 2011 Comprehensive AnnualFinancialR.eport
Combining Statement of Revenues,Expenditures,and Changes in Fund Net Assets
Nonmajor Internal Service Funds
For the Year Ended December 31,2011
Governmental Activities Business-Type Activities
Equipment Equipment Medical Equipment Equipment Total
Rental Rental Insurance Central Rental Rental Internal
Operations Replacement Fund Stores Operations Replacement Service
OPERATING REVENUES
Miscellaneous interfimd charges $ 815,309 $ 818,684 $ 3,649,061 $ 788 $ 353,263 $ 319,912 S 5,957,017
Total operating revenues 815,309 818,684 3,649,061 788 353,263 319,912 5,957,017
OPERATING EXPENSES
Depreciation 414,476 203,325 617,801
Salaries&wages 185,925 69,617 255,542
Personnel benefits 26,851 3,748,763 10,974 3,786,588
Supplies 557,779 84,154 1,034 254,559 897,526
Services 69,860 385,384 34,231 489,475
Interfund services 63,346 34,500 11,040 108,886
Total operating expenses 903,761 498,630 4,168,647 1,034 380,421 203,325 6,155,818
OPERATING INCOME(LOSS) (88,452) 320,054 (519,586) (246) (27,158) 116,587 (198,801)
NONOPERATING REVENUES(EXPENSES)
Investment income 176 22,489 1,006 10 103 1,047 24,831
Loss on disposal of capital assets (9,135) (12,683) (21,818)
Total nonoperating revenues 176 13,354 1,006 10 103 (11,636) 3,013
Income(loss)before contributions and
transfers (88,276) 333,408 (518,580) (236) (27,055) 104,951 (195,788)
Transfers in 217,945 217,945
Changes in net assets (88,276) 333,408 (518,580) (236) (27,055) 322,896 22,157
Net assets-beginning 260,238 5,584,321 1,099,000 13,048 158,314 2,508,141 9,623,062
Net assets-ending $ 171,962 $ 5,917,729 $ 580,420 $ 12,812 $ 131,259 $ 2,831,037 $ 9,645,219
98
City of Pasco, 'Washington 2011 Comprehensive AnnualFinancialR.eport
Combining Statement of Cash Flows
Nonmajor Internal Service Funds
For the Year Ended December 31,2011
Governmental Activities Business-Type Activities
Equipment Equipment Equipment Equipment Total
Rental Rental Medical Central Rental Rental Internal
Operations Replacement Insurance Stores Operations Replacement Service
CASH FLOW FROM OPERATING ACTIVITIES:
Cash from customers $ 815,309 $ 818,684 $ 3,649,061 $ 788 $ 353,263 $ 319,912 $ 5,957,017
Payments to employees (209,481) - (3,748,763) - (79,661) - (4,037,905)
Payments to suppliers (677,489) (94,104) (419,031) (1,526) (299,622) - (1,491,772)
Net cash provided by operating activities (71,661) 724,580 (518,733) (738) (26,020) 319,912 427,340
CASH FLOW FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:
Proceeds from disposal of assets 20,878 20,878
Transfers in for capital 217,945 217,945
Acquisition of capital assets (414,740) (574,677) (989,417)
Net cash used in capital activities - (414,740) - - (335,854) (750,594)
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment sales and income 176 1,022,459 1,006 10 103 1,047 1,024,801
Interfund loans - 57,633 - - - - 57,633
Net cash provided from investing activities 176 1,080,092 1,006 10 103 1,047 1,082,434
Net increase in cash and cash equivalents (71,485) 1,389,932 (517,727) (728) (25,917) (14,895) 759,180
Beginning cash and cash equivalents 286,785 2,105,868 1,650,005 13,581 164,772 1,453,246 5,674,257
Ending cash and cash equivalents $ 215,300 $ 3,495,800 $ 1,132,278 $ 12,853 $ 138,855 $ 1,438,351 $ 6,433,437
CASH PROVIDED BY OPERATING
ACTIVITIES:
Net operating income(loss) $ (88,452) $ 320,054 $ (519,586) $ (246) $ (27,158) $ 116,587 $ (198,801)
ADJUSTMENTS TO RECONCILE OPERATING
INCOME TO NET CASH PROVIDED BY
OPERATING ACTIVITIES
Depreciation - 414,476 - - - 203,325 617,801
Increase(decrease)in accounts payable 13,496 (9,950) 853 (492) 208 - 4,115
Increase in compensated absences 3,295 - - 930 - 4,225
Net cash provided by operating activities $ (71,661) $ 724,580 $ (518,733) $ (738) $ (26,020) $ 319,912 $ 427,340
99
City of Pasco, 'Washington 2011 Comprehensive AnnualFinancialR.eport
Trust and Agency Funds
Pension and Other Postemployment Benefit Trust Funds
Pension and other post-employment benefit trust funds are used to report resources that are required to be
held in trust for the members and beneficiaries of defined benefit pension plans, defined contribution
plans, other postemployment benefit plans or other employee benefit plans.
Agency Funds
Agency funds are used to report resources held by the reporting government in a purely custodial capacity.
Agency funds typically involve only the receipt, temporary investment, and remittance of fiduciary
resources to individuals,private organizations, or other governments.
100
City of Pasco, 'Washington 2011 Comprehensive AnnuaCTinancialR.eport
Combining Statement of Net Assets
Fiduciary Funds
December 31,2011
Trust Funds
Other Total
Postemployment Fire Pension and Other
Benefit Pension Postemployment
Trust Trust Benefits
ASSETS
Cash&cash equivalents $ 434,457 $ 278,904 $ 713,361
Investments at fair market value
LID note 89,351 89,351
Federal agency 118,507 118,507
Mutual funds 1,555,406 1,180,371 2,735,777
Total assets 1,989,863 1,667,133 3,656,996
LIABILITIES
Total liabilities - - -
NET ASSETS
Held in trust for pension benefits
and other purposes $ 1,989,863 $ 1,667,133 S 3,656,996
101
City of Pasco, 'Washington 2011 Comprehensive AnnualFinancialPeport
Combining Statement of Changes in Assets and Liabilities
Fiduciary Funds (continued)
December 31, 2011
Agency Funds
Public Animal Senior
Flexible Fadity Control Center Payroll Total
Spending District Authority Association Clearing Agency
ASSETS
Cash&cash equivalents $ 3,614 $ 62,217 $ 75,625 $ 1,683 $ 202,784 $ 345,923
Total assets 3,614 62,217 75,625 1,683 202,784 345,923
LIABILITIES
Accounts payable 3,614 202,784 206,398
Due to other governments 62,217 75,625 1,683 139,525
Total liabilities $ 3,614 $ 62,217 $ 75,625 $ 1,683 $ 202,784 $ 345,923
102
City of Pasco, 'Washington 2011 Comprehensive ✓`lnnuaCTinanciaCReport
Combining Statement of Changes in Fiduciary Net Assets
Fiduciary Funds
For The Year Ended December 31, 2011
Other Total
Postemployment Fire Pension and Other
Benefit Pension Postemployment
Trust Trust Benefits
ADDITIONS
Taxes $ - $ 45,132 $ 45,132
Investment earnings
Interest 328 7,341 7,669
Dividends 37,192 24,936 62,128
Net change in fair value of investments 65,207 (46,027) 19,180
Total additions 102,727 31,382 134,109
DEDUCTIONS
Pension benefits 96,850 96,850
Medical premiums 105,395 105,395
Administrative expenses 16,080 16,080
Total deductions 105,395 112,930 218,325
Change in net assets (2,668) (81,548) (84,216)
Net assets-beginning 1,992,531 1,748,681 3,741,212
Net assets-ending $ 1,989,863 $ 1,667,133 $ 3,656,996
103
City of Pasco, 'Washington 2011 Comprehensive AnnuaCTinancialR.eport
Combining Statement of Changes in Assets and Liabilities
Agency Funds
December 31, 2011
Flexible Spending Accounts Pasco Public Facility District
Balance Balance Balance Balance
January 1 Additions Deletions December 31 January 1 Additions Deletions December 31
ASSETS
Cash&cash equivalents $ 7,065 $ 160,461 $ 163,912 $ 3,614 $ 97,211 $ 266,365 $ 301,359 $ 62,217
Total assets 7,065 160,461 163,912 3,614 97,211 266,365 301,359 62,217
LIABILITIES
Accounts payable 7,065 160,374 163,825 3,614 -
Due to other governments - 97,211 296,169 331,163 62,217
Total liabilities $ 7,065 $ 160,374 $ 163,825 $ 3,614 $ 97,211 $ 296,169 $ 331,163 $ 62,217
104
City of Pasco, 'Washington 2011 Comprehensive AnnualFinancialR.eport
Animal Control Authority Senior Center Association
Balance Balance Balance Balance
January 1 Additions Deletions December 31 January 1 Additions Deletions December 31
$ 4 $ 244,458 $ 168,837 $ 75,625 $ 1,603 $ 1,086 $ 1,006 $ 1,683
4 244,458 168,837 75,625 1,603 1,086 1,006 1,683
4 665,969 590,348 75,625 1,603 1,086 1,006 12683
$ 4 $ 665,969 $ 590,348 $ 75,625 $ 1,603 $ 1,086 $ 1,006 $ 1,683
105
City of Pasco, 'Washington 2011 Comprehensive AnnualFinancialR.eport
Combining Statement of Changes in Assets and Liabilities
Agency Funds(continued)
For the Year Ended December 31,2011
Payroll Clearing Total Agency Funds
Balance Balance Balance Balance
January 1 Additions Deletions December 31 January 1 Additions Deletions December 31
ASSETS
Cash&cash equivalents $ 197,592 $25,494,065 $25,488,873 $ 202,784 $ 303,475 $26,286,471 $26,244,023 $ 345,923
Total assets 197,592 25,494,065 25,488,873 202,784 303,475 26,286,471 26,244,023 345,923
LIABILITIES
Accounts payable 197,592 9,309,596 9,304,404 202,784 204,657 9,469,970 9,468,229 206,398
Due to other govemments 98,818 1,023,242 982,535 139,525
Total liabilities $ 197,592 $ 9,309,596 $ 9,304,404 $ 202,784 $ 303,475 $10,493,212 $10,450,764 $ 345,923
106
City of Pasco, 'Washington 2011 Comprehensive AnnuaCTinanciaCReport
STATISTICAL SECTION
This part of the City of Pasco's comprehensive annual financial report presents detailed information as a
context for understanding what the information in the financial statements, note disclosures and required
supplementary information says about the government's overall financial health.
CONTENTS Page
Financial Trends 108
These schedules contain trend information to help the reader understand how
the government's financial performance and well-being have changed over time.
Revenue Capacity 114
These schedules contain information to help the reader assess the government's
most significant revenue sources.
Debt Capacity 120
These schedules present information to help the reader assess the affordability of
the government's current levels of outstanding debt and the government's ability to
issue additional debt in the future.
Demographic and Economic Information 124
These schedules offer demographic and economic indicators to help the reader
understand the environment within which the government's financial activities take
place.
Operating Information 128
These schedules contain service data to help the reader understand how the
information in the government's financial report relates to services the government
provides and the activities it performs.
Sources:Unless otherwise noted,the information in these schedules is derived from the comprehensive annual financial
reports for the relevant year.
107
City of Pasco, 'Washington 2011 Comprehensive AnnuaCTinancialR.eport
Net Assets by Component
Last light Fiscal Years
(accrual basis of accounting)
(amounts expressedinthousands)
Fiscal Year Ended December 31
2004 2005 2006 2007 2008 2009 2010 2011
Governmental activities
Invested in capital assets,net ofrelated debt $38,549 $47,804 $59,050 $74,058 $85,294 $97,602 $122,343 $141,497
Restricted for:
Restricted 4,618 5,734 5,738 3,941 4,005 3,551 383 400
Unrestricted 16,081 15,366 15,944 22,710 23,750 24,111 28,241 30,166
Total governmental activities net assets 59,248 68,904 80,732 100,709 113,049 125,264 150,967 172,063
Business-type activities
Invested in capital assets,net ofrelated debt 59,694 69,646 93,667 97,635 109,736 1,136,995 124,771 129,532
Restricted 746 1,321 1,798 842 747 777 - -
Unrestricted 14,174 23,041 6,252 12,611 5,712 12,618 11,400 12,367
Total business-type activities net assets 74,614 94,008 101,717 111,088 116,195 1,150,390 136,171 141,899
Primary government
Invested in capital assets,net ofrelated debt 98,243 117,450 152,717 171,694 195,030 211,596 247,114 271,029
Restricted 5,364 7,055 7,536 4,783 4,752 4,328 383 400
Unrestricted 30,255 38,407 22,196 35,321 29,462 36,729 39,641 42,533
Totalprimary government net assets $133,862 $162,912 $182,449 $211,798 $229,244 $252,653 $287,138 $313,962
108
City of Pasco, 'Washington 2011 Comprehensive AnnuaCTinancialR.eport
Changes in Net Assets
Last Fight Fiscal Years
(accrual basis of accounting)
(amounts expressed in thousands)
Fiscal Year Ended December 31
2004 2005 2006 2007 2008 2009 2010 2011
enses
Governmental activities:
General government $7,374 $8,116 $8,889 $9,649 $10,410 $12,059 $6,921 $6,517
Public safety 13,056 14,004 16,592 17,214 18,296 18,743 19,419 19,834
Physical environment 1,548 1,690 2,319 2,137 3,532 3,050 1,900 2,406
Transportation 3,799 5,944 1,299 4,242 4,331 5,137 7,831 9,836
Economic environment 819 934 1,647 1,117 1,199 1,385 797 1;041
Health and human services 46 45 44 40 57 59 1,652 251
Culture and recreation 5,408 4,893 4,872 5,713 5,983 6,212 4,724 7,695
Interest on long term debt 774 714 682 640 587 413 512 517
Total governmental activities expenses 32,824 36,340 36,344 40,752 44,395 47,058 43,756 48,097
Business-type activities
Water 4,289 3,950 5,051 5,180 5,990 6,029 6,538 6,845
Sewer 5,812 5,878 5,724 6,275 6,316 6;826 6,944 7,922
Water process reuse 1,417 1,466 1,558 1,503 1,569 1,558 1,444 1,501
Storm water 316 377 518 595 607 735 791 959
Irrigation 356 544 748 936 1,015 1,009 1,045 1,038
Total business-type activities expenses 12,190 12,215 13,599 14,489 15,497 16,157 16,762 18,265
Total primary government expenses 20,634 24,125 22,745 26,263 28,898 30,901 26,994 29,832
Pro gram revenues
Governmental Activities:
Charges for Services
General government 4,493 4,885 5,529 7,098 6,667 8,982 2,134 1,981
Public safety 1,455 1,784 1,862 2,263 2,626 3,006 3,684 3,893
Physical environment 366 675 798 744 836 1,282 499 1,331
Transportation 93 45 810 491 476 623 1,504 1,795
Economic environment 2,007 1,961 1,780 1,579 1,135 1,431 17 1,459
Health and human services 0 0 0 0 0 0 1,851 30
Culture and recreation 1,048 744 583 465 445 480 604 2,161
Operating grants and contributions 846 1,199 1,045 1,074 376 504 1,448 1,763
Capital grants and contributions 6,863 6,547 9,244 3,438 14,753 13,283 25,488 25,117
Total governmental activities programrevenues 17,171 17,840 21,651 17,152 27,314 29,591 37,229 39,530
Business-type activities
Charges for services 12,153 13,112 14,186 14,307 17,232 18,319 18,148 17,774
Operating grants and contributions 0 0 0 0 0 0 0 370
Capital grants and contributions 9,911 14,203 3,625 6,377 3,254 3,061 4,654 5,671
Total bus ines s-type activities programrevenues 22,064 27,315 17,811 20,684 20,486 21,380 22,802 23,815
Total primary government program revenues $39,235 $45,155 $39,462 $37,836 $47,800 $50,971 $60,031 $63,345
109
City of Pasco, 'Washington 2011 Comprehensive .annual Tinancial Report
Changes in Net Assets
Last]Eight Fiscal Years(continued)
(accrual basis of accounting)
(amounts expressedinthousands)
Fiscal Year Ended December 31
2004 2005 2006 2007 2008 2009 2010 2011
Net(expenses)/revenues
Governmental activities ($15,653) ($18,500) ($14,693) ($23,599) ($17,078) ($17,467) ($6,527) ($8,567)
Business-type activities 9,874 15,100 4,212 6,195 4,504 5,223 6,040 5,550
(5,779) (3,400) (10,481) (17,404) (12,574) (12,244) (487) (3,017)
Total primary government net(expense)/revenues
General revenues and other changes in net assets
Governmental Activities:
Taxes
Property taxes 4,699 4,883 5,303 5,774 6,055 6,276 6,080 6,847
Sales and use taxes 7,412 7,857 8,226 8,646 8,843 8,000 8,245 9,403
Occupational utility taxes 6,456 7,100 7,561 7,842 8,689 8,924 8,917 8,914
Othertaxes 2,838 3,396 3,305 3,729 4,655 4,686 1,738 1,838
Intergovernmental* 1,663 2,599
Investment and miscellaneous 2,630 3,365 2,412 2,892 987 852 1,147 691
Transfers 2,199 584 113 846 613 566 149
Total governmental activities 21,836 26,017 26,920 29,729 29,842 29,304 27,641 30,292
Business-type activities
Investment and miscellaneous 4,105 4,120 3,758 4,184 425 399 1,062 177
Transfers 1,378 58 183 866 613 566 149
Total business-type activities 5,483 4,062 3,575 3,318 (188) (167) 1,211 177
Total primary government 27,319 30,079 30,495 33,047 29,654 29,137 28,852 30,469
Changes in net assets**
Governmental activities 6,183 7,517 12,227 6,130 12,764 11,837 21,114 21,725
Business-type activities 15,357 19,162 7,787 9,513 4,316 5,056 7,251 5,727
Total primary government $21,540 $26,679 $20,014 $15,643 $17,080 $16,893 $28,365 $27,452
*Included with"Other taxes"until 2010.
**Beginning Net Assets were restated based on priorperiod adjustments recorded in 2010.
110
City of Pasco, 'Washington 2011 Comprehensive AnnualFinancialR.eport
Governmental Activities Tax Revenues by Source
Last Ten Fiscal Years
(accrual psis of accounting)
(amounts expressed in thousands)
Fis cal Year
Ended Property Sales and Excise and Other
December 31 Taxes Use Taxes B&O Taxes Taxes Total Taxes
2002 $3,727 $6,892 $4,430 $901 $15,950
2003 4,039 6,348 5,844 2,761 18,992
2004 4,699 7,412 6,456 2,677 21,244
2005 4,883 7,857 7,100 3,223 23,063
2006 5,303 8,226 7,561 3,305 24,395
2007 5,774 8,646 7,842 3,729 25,991
2008 6,056 8,843 8,689 4,655 28,243
2009 6,276 8,000 8,924 4,686 27,886
2010 6,080 8,245 8,917 1,739 24,981
2011 6,847 9,403 8,914 1,838 27,002
Source:
Statement of activities
Prior CAFR
111
City of Pasco, 'Washington 2011 Comprehensive AnnuaCTinancialR.eport
Fund Balance of Governmental Funds
Last Fight Fiscal Years
(modified accrual basis of accounting)
(amounts expressed in thousands)
Fiscal Year Ended December 31
2004 2005 2006 2007 2008 2009 2010 2011
General fund
Assigned $ 3,208
Unassigned 8,050
Reserved* $ 70 $ 59 $ 1,891 $ 1,517 $ 692 $ 1,898
Unreserved* 7,589 9,109 6,861 9,088 10,270 7,917 9,414
Total general fund $ 7,659 $ 9,168 $ 8,752 $ 10,605 $ 10,962 $ 9,815 $ 9,414 $11,258
All other governmental funds
Nonspendable $ 400
Restricted 9,496
Committed 5,375
Unassigned (178)
Reserved* $ 4,616 $ 5,728 $ 5,729 $ 3,910 $ 3,890 $ 2,798 $ 383
Unreserved,reported in:
Special revenue funds* 7,142 4,912 6,115 8,260 9,872 9,010 10,846
Debt service funds* 60 281 671 773 921 1,307 1,095
Capital project funds* (206) (440) (1,158) (224) 1,750 655) 833
Total all other governmental funds $11,612 $ 10,481 $ 11,357 $ 12,719 $ 12,933 $ 12,460 $13,157 $15,093
*Prior to GASB 54
112
City of Pasco, 'Washington 2011 Comprehensive AnnualFinancialR.eport
Changes in Fund Balances of Governmental Funds
Last Fight Fiscal Years
(modified accrual basis of accounting)
(amounts expressedin thousands)
Fiscal Year Ended December 31
2004 2005 2006 2007 2008 2009 2010 2011
Revenue
Taxes $ 20,491 $ 22,196 $ 23,362 $ 24,516 $ 25,716 $ 25,339 $ 24,960 $ 26,832
Licenses and permits 2,337 2,338 2,116 1,924 1,616 1,860 1,966 1,874
hitergovernmental revenue 2,628 3,494 10,802 4,719 5,293 4,041 7,929 8,252
Charges for services 3,887 4,226 4,388 4,738 4,771 5,285 5,502 7,475
Fines and forfeitures 740 746 829 1,054 1,017 1,063 944 955
Investment and miscellaneous 2,453 3,075 2,803 2,734 2,310 2,963 2,930 2,547
Totalrevenues 32,536 36,075 44,300 39,685 40,723 40,551 44,231 47,935
Expenditures
Current:
General government 4,337 4,817 5,026 5,001 5,341 5,847 6,547 6,087
Public safety 12,734 13,588 15,593 16,820 17,711 18,418 18,820 18,780
Physical environment 1,246 1,444 1,609 1,825 2,078 2,066 1,855 2,288
Transportation 1,076 1,104 1,133 1,537 1,536 1,566 2,149 2,447
Economic environment 461 648 681 745 671 944 54 872
Health and human services 46 45 44 40 57 59 1,313 210
Culture and recreation 3,434 3,464 3,827 4,117 4,279 4,670 4,757 6,402
Capital outlay* 5,878 8,222 14,188 5,737 7,345 7,718
General government 104 154
Public safety 124 35
Physical environment 868
Transportation 3,441 3,276
Economic environment 419 657
Health and human services -
Culture and recreation 2,633 369
Debt service:
Principal 1,116 1,106 1,120 1,162 1,108 1,249 1,178 1,575
Interest 774 714 682 640 587 413 512 517
Total expenditures 31,102 35,152 43,903 37,624 40,713 42,950 44,774 43,669
Excess of revenues
over(under)expenditures 1,434 923 397 2,061 10 (2,399) (543) 4,266
Other financing sources(uses)
Disposition of capital assets 367 41 157 7
Proceeds of general debt 219 795 4,533
Debt refinanced (4,280)
Insurance recoveries an other 18 30 1 251 (1)
Operating transfers in 4,260 5,322 5,864 4,984 5,094 5,432 6,559 5,229
Operating transfers out (4,628) (6,068) 5,710 (4,247) (4,542) 4,52 (6,708) (5,229)
Total other financing sources(uses) 236 (675) 155 894 559 1,156 645 253
Net change in fund balances $ 1,670 $ 248 $ 552 $ 2,955 $ 569 $ (1,243) $ 102 $ 4,519
Debt services as percentage
of noncapital expenditures 8.10% 7.25% 6.46% 5.99% 5.35% 4.95% 4.76% 5.64%
*Break out not available prior to 2010
113
City of Pasco, 'Washington 2011 Comprehensive .annual Tinancial Report
Assessed Value of Taxable Property
Last Ten Fiscal Years
(in thousands of dollars)
Real Property
Fiscal Year Total Taxable Total
Fnded Residential Commercial Other Assessed Direct Tax
December 31 Property Property Property Valuation Rate
2002 $968,149 $109,023 $49,984 $1,127,156 $3.66
2003 1,185,854 64,831 53,395 1,304,080 3.20
2004 1,608,204 116,704 54,917 1,779,825 2.81
2005 1,838,148 81,763 52,699 1,972,610 2.81
2006 1,685,326 85,760 54,277 1,825,363 2.74
2007 2,309,544 113,973 59,650 2,483,167 2.54
2008 1,942,831 473,136 445,373 2,861,340 2.49
2009 1,525,399 869,876 539,517 2,934,792 2.23
2010 2,151,661 577,476 172,776 2,901,913 2.22
2011 2,216,469 582,468 209,591 3,008,528 2.18
Source: Franklin County Assessor
Heise Taxes by Type
Last Ten Fiscal Years
(in thousands of dollars)
(Gross Rerrnues times 8 1/2% Tax Rate)
Fiscal Year
Ended
December 31 Admissions Cable TV Solid Waste Water Irri tipon** Sewer Stonn** Reuse** Gas Telephone Electricity Total
2002 $50 $284 $326 $375 $529 $346 $1,045 $2,129 $5,084
2003 50 294 347 464 600 370 1,321 2,449 5,895
2004 57 341 388 488 688 472 1,493 2,586 6,513
2005 49 295 404 561 778 614 1,459 2,990 7,150
2006 38 300 387 547 793 786 1,607 3,140 7,598
2007 78 288 468 563 742 853 1,723 3,206 7,921
2008 115 356 482 595 724 799 2,519 3,213 8,803
2009 136 369 491 646 820 962 2,142 3,382 8,948
2010 149 383 515 709 821 925 2,059 3,356 8,917
2011 142 381 530 658 81 636 63 127 809 2,034 3,455 8,916
*Previously included in Water
**Previously included in Sewer
114
City of Pasco, 'Washington 2011 Comprehensive AnnuaCTinancialR.eport
Property Tax Rates
Direct and Overlapping 1 Governments
Last Ten Fiscal Years
Overlapping Rates
City ofPasco County School District
Total direct
Fiscal Year Debt Debt Total Debt Total and
Ended Operatin service Total city Operating service county Operating service school Special overlapping
December3l gmillage millage millage millage millage millage millage millage millage districts rates
2002 3.063 0.599 3.662 2.060 0.156 2.216 3.938 2.300 6.238 0.448 12.564
2003 2.684 0.514 3.198 2.059 0.473 2.532 4.005 2.479 6.484 0.445 12.659
2004 2.662 0.146 2.808 1.904 0.496 2.400 3.826 2.799 6.625 0.436 12.269
2005 2.416 0.389 2.805 1.792 0.383 2.175 3.941 2.628 6.569 0.410 11.959
2006 2.391 0.350 2.741 1.749 0.348 2.097 3.768 2.747 6.515 0.399 11.752
2007 2.249 0.293 2.542 1.699 0.320 2.019 3.929 2.992 6.921 0.388 11.870
2008 2.221 0.268 2.489 1.673 0.281 1.954 3.834 3.083 6.917 0.383 11.743
2009 2.004 0.230 2.234 1.459 0.261 1.720 4.170 3.081 7.251 0.347 11.552
2010 1.999 0.225 2.224 1.478 0.238 1.716 4.155 2.395 6.550 0.338 10.828
2011 1.972 0.212 2.184 1.422 0.216 1.638 4.359 2.286 6.645 0.329 10.796
Source: Franklin County Assessors(Property taxbooklet)
1 Overlapping rates are those of local and county governments that apply to property owners within the City ofPasco. Not all overlapping rates apply to
all City ofPasco property owners whose property is located within the geographic boundaries ofthe special district.
Taxable Retail Sales
Last Seven Fiscal Years
Fiscal Year Ended
December 31 City of Pasco 1 Franklin County 2
2005 $858,747,074 $862,138,345
2006 894,155,932 929,717,630
2007 933,196,329 1,057,004,462
2008 957,490,181 1,052,102,171
2009 870,450,609 917,095,762
2010 896,484,942 964,584,879
2011 949,914,894 1,033,145,212
1 Source:Tax Tools
2 Source: Washington State Department of Revenue
115
City of Pasco, 'Washington 2011 Comprehensive AnnualFinancialR.eport
Principal Property Taxpayers
Current Year and Three Years Prior
Fiscal Year EndedDecember 31
(amounts expressed in thousands)
2011 2008*
Taxable Percentage Taxable Percentage
assessed of total assessed oftotal
Taxpayer value Rank taxable value Rank taxable
Syngenta Seed hic $35,329 1 1.08% 0.00%
Pasco Processing LLC 27,530 2 0.85% 31,316 1 1.09%
Bybee Foods LLC 24,057 3 0.74%
BNSF Railway Co. 18,391 4 0.56% 12,255 9 0.43%
Twin City Foods,hic. 16,915 5 0.52% 22,098 2 0.77%
The Crossing at Chapel Hill 16,085 6 0.49% 16,085 4 0.56%
Broadmoor LLC 15,382 7 0.47% 16,432 3 0.57%
Wal-Mart,Inc 13,745 8 0.42% 13,745 6 0.48%
Reser's Fine Foods,hic 13,553 9 0.42% 14,400 5 0.50%
Skywest Airlines,hic 11,205 10 0.34% 13,241 7 0.46%
Old Standard Life Insurance 11,234 10 0.39%
Conagra Foods Lamb-Weston,Inc. 12,632 8 0.44%
$192,192 5.89% $163,438 5.69%
Source: Franklin County Assessor's Office
*Oldest comparative information that is available.
116
City of Pasco, 'Washington 2011 Comprehensive AnnualFinancialPeport
Principal lxcis eTaxpayers
Current Year and Seven Years Prior
Fiscal Year EndedDecember 31
(amounts expressedin thousands)
2011 2004*
Percentage of Percentage
Tax Total Tax Tax of Total Tax
Taxpayer Revenue Rank Revenue Revenue Rank Revenue
Company A $3,455 1 38.75% $2,586 1 39.71%
Company B 731 2 8.20% 407 3 6.25%
Company C 616 3 6.91% 0.00%
Company D 530 4 5.94% 388 4 5.96%
Company F 401 5 4.50% 0.00%
Company E 381 6 4.27% 341 5 5.24%
Company G 336 7 3.77% 477 2 7.32%
Company J 184 8 2.06% 109 8 1.67%
Company H 150 9 1.68% 0.00%
Company I 123 10 1.38% 139 7 2.13%
Company K - 302 6 4.64%
Company L - 73 9 1.12%
Company M - 71 10 1.09%
$6,907 77.46% $4,893 75.13%
Note:Per state privacy laws the names of the companies are confidential and have been indicated instead by letter.The
above information is provided to show concentration risk by company.
*This is the oldest comparative information available.
Source:Revenue collection
117
City of Pasco, 'Washington 2011 Comprehensive AnnualFinancialR.eport
Top Ten Industries that Generate Sales Tax
Current Year andFiwe Years Prior
Fiscal Year Ended December 31
2011 2006
Sales % of Sales % of
Tax Total Tax Total
Industries Paid Rank Sales Tax Paid Rank Sales Tax
Motor vehicle and parts dealers $1,258,496 1 15.94% $1,553,185 1 20.95%
Wholesale trade,durable goods 756,776 2 9.59% 776,944 2 10.48%
Repair and maintenance 538,871 3 6.83% 0.000/0
Specialty trade contractors 528,044 4 6.69% 628,960 3 8.48%
General merchandise stores 517,836 5 6.56% 408,218 5 5.51%
Food services,drinking places 491,780 6 6.23% 338,591 8 4.57%
Building material and garden 353,267 7 4.47% 249,406 9 3.36%
Rental and leasing services 256,461 8 3.25% 357,386 7 4.82%
Construction of buildings 254,525 9 3.22% 421,800 4 5.69%
Rail Transportation 249,022 10 3.15% 0.00°/0
Telecommunications 200,425 10 2.70%
Miscellaneous store retailers 381,601 6 5.15%
Other 2,690,167 34.07% 2,097,093 28.29%
Total $7,895,245 $ 7,413,609 71.71%
Source:Washington State Department of Revenue taxtools
118
City of Pasco, 'Washington 2011 Comprehensive AnnualFinancialR.eport
Property Tax Levies and Collections
Last Ten Fiscal Years
(amounts expressed in thousands)
Collected within the
fiscal year of the levy Total collections to date
Total tax Collections in
Fiscal Year Ended levy for Percentage Subsequent Percentage
December 31 fiscal year Amount of levy years 1 Amount of levy
2002 3,991 3,839 96.2% 3 3,842 96.3%
2003 4,028 3,869 96.1% 52 3,921 97.3%
2004 4,392 4,210 95.9% 88 4,298 97.9%
2005 4,859 4,674 96.2% 186 4,860 100.00/0
2006 5,314 5,114 96.2% 194 5,308 99.9%
2007 5,763 5,600 97.2% 160 5,760 99.9%
2008 6,061 5,887 97.1% 156 6,043 99.7%
2009 5,738 5,579 97.2% 125 5,704 99.4%
2010 6,400 6,211 97.0% 77 6,288 98.3%
2011 6,638 6,480 97.6% 0 6,480 97.6%
Source: Franklin County Treasurer's Office Tax Rolls
1 County provides four prior years and combines five years or more together.
119
City of Pasco, Washington 2011 Comprehensive AnnualFinancialR.eport
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
(amounts expressed in thousands,except per capita amount)
Governmental Activities Business-type Activities
Fiscal Year General Water/ Other Total Percentage
Ended Obligation Special Sewer Loans Primary of Personal Per
December 31 Bonds Assessments Bonds Payable Government Income Capita 1
2002 Not available Not available Not available Not available Not available Not available Not available
2003 $15,727 $2,080 $17,614 $24,328 $59,749 7.6% $1,590
2004 14,500 1,501 15,940 23,694 55,635 6.5% 1,362
2005 13,650 2,329 19,300 22,340 57,619 6.2% 1,304
2006 12,955 3,288 18,045 20,950 55,238 5.4% 1,160
2007 11,850 2,853 17,620 19,523 51,846 5.0010 1,033
2008 10,915 120 16,245 18,056 45,336 3.8% 867
2009 9,945 120 16,549 24,710 51,324 3.6% 942
2010 8,940 785 29,125 15,061 53,911 Not available 958
2011 7,670 785 26,240 13,531 48,226 Not available 791
Note:Details regarding the City's outstanding debt can be found in the notes and schedules to the financial statements.
This ratio was calculated using population for the applicable fiscal year.
Ratios of General Bonded Debt Outstanding
andBondedper Capita
Last Ten Fiscal Years
(amounts expressed in thousands,except per capita amount)
Percentage of
Fiscal Year General Less:Amounts estimated actual
Ended obligations available in debt taxable value 1 Per
December3l bonds service fund Total of property capita
2002 $19,147 $1,659 $17,488 $0 $505
2003 15,727 2,732 12,995 0 346
2004 14,500 2,865 11,635 0 285
2005 13,650 2,973 10,677 0 242
2006 12,955 3,105 9,850 0 207
2007 11,850 2,824 9,026 0 180
2008 10,915 2,787 8,128 0 155
2009 9,945 1,231 8,714 0 160
2010 8,940 1,322 7,618 0 135
2011 7,670 1,487 6,183 0 101
Note:Details regarding the City's outstanding debt can be found in the notes and schedules statements.
to the financial statements.
1 See the schedule of assessed value taxable property on page 114 for property value data.
120
City of Pasco, 'Washington 2011 Comprehensive AnnuaCTinancialR.eport
Legal Debt Margin
Last Ten Fiscal Years
(amounts expressed in thousands)
Fiscal Year Ended December 31
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Debt limit $28,197 $32,602 $44,496 $49,691 $57,846 $62,079 $72,012 $73,370 $72,923 $75,213
Total net debt applicable to limit 17,171 17,734 11,894 16,204 15,341 10,470 13,252 12,501 11,954 11,670
Legal debt margin $11,026 $14,868 $32,602 $33,487 $42,505 $51,609 $58,760 $60,869 $60,969 $63,543
Total net debt applicable to the limit as a 6090% 54.40% 26.73% 32.61% 26.52% 16.87% 18.40% 17.04% 16.39% 15.52%
percentage of debt 1anit
Legal debt margin calculation for fiscal year 2011
Assessed value 53,008,528
CENERALPURPPOSES
Limit of 2.5%of Assessed Value $75,213
Councilmanic:
Capacity(1.5%of Assessed Value) 45,128
Less:
GO Bonds Outstanding (6,155)
Special Assessment Bonds&Notes (569)
State LOCAL Loans (198)
TRAC Obligation (284)
Airport Fire Station (61)
Compensated Absences (1,739)
OPEB (1,149)
Totaldebt (10,155)
Remaining capacity without a vote 34,973
Voter Approved:
Capacity(1.0%ofAssessed Value) 30,085
Less:
Sourrces: GO Bonds Outstanding (1,515)
Franklin County Assessors Office-(Steve Marks)* Remaining capacity with a vote 28,570
Debt Schedule Statement
Note:The total indebtedness for general purposes with or without a vote cannot exceed 2.5%ofthe value of taxable property.The general purposes indebtedness includes debt for capital
leases without a vote.The legal limit for capital leases debt(RCW 35.42.200)is included in the 2.5 percent and does not constitute extra allowable debt.
The 1.5 percent is the ma:aum limit for gemeral purposes without a vote(councilmanic debt).A council may choose to allocate any portion ofthis debt capacity to the"voted" category.
If done so,this 1.5 percent ofthe indebtedness available without vote is to be proportionately reduced by the excess"voted"debt over 1 percent.
121
City of Pasco, 'Washington 2011 Comprehensive .annual Tinancial Report
Pledged-Revenue Coverage
Last Ten Fiscal Years
(amounts expressed in thousands)
WATER/SEWER BONDS
Fiscal Year Ended December 31
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Total operating revenues* $9,874 $10,969 $11,761 $12,758 $13,742 $15,850 $15,929 $17,002 $18,194 $18,671
Total operating expenses 4,469 4,998 5,302 5,759 6,166 6,550 7,061 8,068 8,202 9,569
Operating Income 5,405 5,971 6,459 6,999 7,576 9,300 8,868 8,934 9,992 9,102
Total non-operating revenue 1,038 902 1,058 605 615
Net Revenue 5,405 5,971 6,459 6,999 7,576 10,338 9,770 9,992 10,597 9,717
Total other source 310 576 382 388 284
Special assessment debt service 170 450 261 245 378
Non assessment debt service 5,405 5,971 6,459 6,999 7,576 10,478 9,896 10,113 10,740 9,623
Non assemend bond debt services 1,206 1,671 1,664 1,758 2,061 1,889 1,856 2,119 2,310 3,716
Debt service coverage 4.48 3.57 3.88 3.98 3.68 5.55 5.33 4.77 4.65 2.59
*Operating revenues exclude revenue raised and used to pay interfund city taxes.
122
City of Pasco, 'Washington 2011 Comprehensive .annual Tinancial Report
Direct and Overlapping Governmental Activities Debt
As of December 31,2011
(amounts expressed in thousands)
Direct debt Amount
Voted General Obligation $ 1,515
Councilmanic General Obligation Debt 9,574
Less Amounts Available in Debt Service Funds 1,487
Total direct debt 12,576
Overlapping Debt
Estimated Share of
Jurisdiction Outstanding debt Percent applicable Overlapping Debt
Franklin County 16,500 53.45% 8,819
Pasco School District 126,985 63.59% 80,750
Port of Pasco 9,524 53.67% 5,112
Total overlapping debt $ 94,681
Governmental activities debt ratios
Assessed valuation-2011(established in November,2010 for the 2011 taxyear) $ 3,008,528
Population 61
Net direct debt to assessed valuation 0.42%
Net direct debt and overlapping debt to assessed valuation 3.57%
Assessed valuation per capita $ 49,320
Net direct debt per capita $ 206
Direct debt and overlapping debt per capita $ 1,758
Councilmanic debt and other obligations consist of G.O.Bonds Outstanding $ 7,668
State LOCAL Loans 198
T.RA.C.Obligation 283
Airport Fire Station 61
OPEB 1,149
Compensated Absences 1,728
$ 11,087
Voted GO debt: G.O.Bonds Outstanding $ 1,515
$ 1,515
(1)Outstanding debt represents total general obligation debt.
(2)Applicable percentage is determined by ratio of assessed valuation of property subject to taxation
in the overlapping unit to valuation of property subject to taxation in the reporting unit.
Source
Franklin County Assessor's Office
Franklin County Assessor's website-taxbooklet
123
City of Pasco, 'Washington 2011 Comprehensive AnnuaCginanciaCReport
Demographic and Economic Statistics
Last Ten Fiscal Years
Pasco Tri Cities Franklin County
Fiscal Year Per capita Median Median
Ended Unemployment personal household household School
December 31 Population 1 Population 1 rate 3 Population 1 income 2 income 1 age 3"1 enrollment 4
2002 35,147 131,577 8.5% 52,286 $20,760 $41,817 $28 9,785
2003 38,437 137,987 8.8% 54,907 21,028 42,117 28.47 10,353
2004 41,842 143,472 7.5% 58,576 20,971 41,309 27.40 11,038
2005 45,846 149,776 7.0% 62,572 21,048 42,256 27.00 11,828
2006 49,439 155,439 7.0% 66,371 21,317 43,187 27.00 12,516
2007 52,555 160,145 6.4% 69,582 20,573 49,337 28.66 12,610
2008 54,993 166,933 10.3% 72,230 22,955 44,797 28.20 13,701
2009 57,579 172,169 7.26% 75,111 26,342 43,754 27.40 14,437
2010 59,781 181,756 7.55% 78,163 Not Available 53,355 Not Available 15,427
2011 61,000 184,755 7.75% 80,500 Not Available 53,644 28.53 16,143
State
Fiscal Year Per capita Median
Ended Average wage Unemployment personal household School
December 31 per job 1 rate 1 Population 1 income 1 income 1 enrollment 1
2002 $45,417 7.30% 6,059,316 $39,665 $46,039 Not Available
2003 45,365 7.40% 6,126,885 39,753 46,967 Not Available
2004 45,524 6.20% 6,208,515 41,151 49,585 Not Available
2005 45,586 5.50% 6,298,816 40,818 50,004 Not Available
2006 46,643 4.90% 6,420,258 2,772 53,522 Not Available
2007 47,840 4.50% 6,525,086 44,124 56,141 Not Available
2008 47,342 5.50% 6,608,245 43,553 57,858 Not Available
2009 48,079 9.30% 6,672,159 42,461 55,458 Not Available
2010 Not Available 9.60% 6,724,540 43,564 54,888 138,314,294
2011 Not Available Not Available 6,767,900 Not Available 55,500 140,287,604
SOURCE:
I State of Washington Office of Financial Management
2 Washington State University Northwest Income Indicators Project Report-Information is for Franklin County 2002-2008.
Office of Finance Management after 2010
3 State of Washington Employment Security Department (Tri Cities Annual Average)
4 Pasco School District(October Enrollment)ftom2002-2010.Office of Financial management 2011
124
City of Pasco, 'Washington 2011 Comprehensive AnnuaCTinancialR.eport
Principal Employers
Current Year and Ten Years Prior
Year Ended December 31
Tri Cities
2011 2002
Employer Employees Industry Rank Employees Industry Rank
Battelle/PNNL 4,485 Research and development I Not available
URS 3,500 Government 2
CH2M Hill 3,260 Government 3
ConAgra(Lamb Weston) 3,057 Agriculture products 4
Bechtel National 2,850 Government 5
Kadlec Medical Center 2,175 Health services 6
Pasco School District 2,065 K-12 Education 7
Washington River Protection 1,686 Government 8
Mission Support Alliance 1,478 Government 9
Kennewick School District 1,473 K-12 Education 10
Source:TRIDEC
Prior years'information is not available.
Franklin County
2011 2002
Employer Employees Industry Rank Employees Industry Rank
Pasco School District 2,065 K-12 education I Not available
Lourdes Health Network 807 Health care 2
Columbia Basin College 766 Conimtnity college 3
Boise Cascade 571 Paper and packaging pProducts 4
Pasco processing 350 Food processor-vegetables 5
City of Pasco 305 City services 6
Reser's Fine Foods 230 Food processor-potatoes 7
Douglas Fruit 210 Fruit packaging 8
Franklin County 190 County services 9
West Communication 180 Call center 10
Source:TRIDEC
Prior years'information is not available.
125
City of Pasco, 'Washington 2011 Comprehensive AnnuaCTinanciaCReport
Non-Agriculture Wage and Salary Workers
Employed in Kennewick-Richland-Pasco MSA(000s)ci)
Last Ten fiscal Years
Fiscal Year Ended Decmeber 31
Employment Sector Oct-2011 Feb-2010 2009 2008 2007 2006 2005
Goods Producing 14,800 12,900 12,900 12,900 12,700 11,900 11,600
Natural resources&mining 7,000 6,100 5,900 6,500 6,600 6,000 5,900
Manufacturing 7,800 6,800 7,000 6,400 6,100 5,800 5,800
Service providing 87,000 82,900 82,900 80,700 78,900 74,800 75,300
Private services providing 68,400 64,800 65,600 63,700 62,500 58,900 59,300
Trade,transportation,warehousing&utilities 17,200 15,200 15,800 16,700 16,800 16,000 14,900
Retail trade 11,700 11,700 12,000 11,700 11,900 11,400 10,600
Financial activities 3,600 3,200 3,300 3,600 3,600 3,500 3,400
Professional&business services 23,500 22,600 22,700 20,600 20,300 18,500 20,600
Administrative&support services 10,700 11,400 11,600 9,400 9,800 9,000 10,000
Education&health services 11,600 10,600 10,700 10,100 9,700 9,200 8,600
Leisure and hospitality 9,300 8,400 8,500 8,600 8,100 7,900 7,900
Food services 6,900 6,100 6,200 6,300 6,000 5,600 5,600
Government 18,600 18,100 17,400 17,000 16,400 16,000 16,000
Federal&State government 4,300 4,100 3,700 37,000 3,700 3,600 3,600
Local government 14,300 14,000 13,700 13,300 12,700 12,400 12,400
Total Non-Agriculture 101,800 95,800 95,800 93,600 91,600 86,700 86,900
Total Private 83,200 77,700 78,400 76,600 75,200 70,700 70,900
(1)Detail may not add to indicated total due to rounding. Excludes proprietors,agriculture,self-employed,unpaid family,domestic workers
and military. Includes all full and part-time wage and salary workers receiving pay during the period including the 12th of the month by
place of work.
Source:Washington State Employment Security Department.
126
City of Pasco, 'Washington 2011 Comprehensive .annual Tinancial Report
Building Permits
Last Ten Fiscal Years
(amounts expressed in thousands)
Res idental z Commercial Industrial Total
New New
Fiscal Year Single Single
Ended Family Family Total Total
December 31 Permits Value Permits Value Permits Value Permits Value Permits Value
2002 794 $96,000 1,882 100,423 291 $12,571 9 $468 2,182 $113,462
2003 950 116,700 1,984 121,856 284 37,993 6 487 2,274 160,336
2004 1,056 146,031 2,075 151,345 395 43,342 4 1,098 2,474 195,785
2005 1,027 165,638 2,192 170,760 350 38,874 7 2,300 2,549 211,934
2006 744 133,250 1,869 139,835 343 41,064 34 21,384 2,246 202,283
2007 524 106,192 1,576 106,191 269 68,417 41 13,153 1,886 187,761
2008 404 77,891 1,403 82,934 227 17,494 47 22,554 1,677 122,982
2009 476 96,228 1,499 102,110 261 43,189 90 16,799 1,850 162,098
2010 544 111,392 1,908 119,197 234 31,251 45 7,324 2,187 157,772
2011 492 105,577 1,817 113,320 289 16,591 28 3,519 2,134 133,430
SOURCE:
1 City of Pasco website Building Permit History.
2 Includes single family and mobile home
127
City of Pasco, 'Washington 2011 Comprehensive AnnualFinancialR.eport
Full-Time Equivalent City Government Employees by Function
Last Ten Fiscal Years
Fiscal Year Ended December 31
Function 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
General government 43 44 42 47 47 49 51 52 46 45
Public safety
Muni Court 12 12 13 13 13 14 14 14 15 16
Police
Officers 48 51 55 62 62 64 66 69 67 67
Civilians 10 10 10 11 12 11 11 11 11 12
Fire
Firefighters and officers 31 31 31 34 34 34 34 34 34 33
Ambulance 12 15 15 15 15 15 15 15 16 18
Physical enviroment
Utilities
Water 16 17 17 17 18 18 20 22 22 22
Sewer 13 14 14 14 14 15 17 18 18 18
Waterprocess reuse 2 3 3 3 3 3 3 3 3 2
Storm water 3 3 4 4 4 4 4 4 4 5
Irrigation 1 1 2 2 2 2 2 2 2 2
Transportation
Highways and streets
Engineering 13 12 12 13 15 14 14 13 13 13
Maintenance 6 6 6 7 7 7 7 7 7 7
Health and human services 2 2 2 2 2 2 2 2
Economic enviroment 11 10 11 12 12 15 14 17 15 15
Culture and recreation 11 11 14 15 15 16 17 16 16 16
Total 232 240 251 271 275 283 291 299 291 293
Source:Annual Operating Budget
128
City of Pasco, 'Washington 2011 Comprehensive AnnualFinancialR.eport
Operating Indicators by Function
Last Ten Fiscal Years
Fiscal Year Ended December 31
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Function
Public Safety
Police
Violent crime 149 105 142 98 160 150 166 217 183 202
Nonviolent crime 1,545 1,519 1,712 2,021 1,795 1,817 1,688 1,525 1,475 1,609
Calls for service 30,248 31,740 34,556 45,835 46,095 49,191 54,061 55,672 52,116 49,819
Victims per 1000 population 49 43 45 47 41 39 35 32 29 30
Fire&Emergency Medical Service
Number of emergency reponse-Fire N/A N/A N/A 416 429 428 233 238 215 278
Number of emergency reponse-EMS N/A N/A N/A 2,462 2,485 2,586 3,316 3,005 3,016 3,337
Total response time-Fire 0 0
Total response time-EMS 1 1
Total other response time 0
Community Development
Number ofnew Single Family units 741 872 1,031 1,008 729 518 398 467 530 483
Number ofnew Muli Family units 0 0 1 0 0 0 0 0 8 1
Number ofnew Manufactured units 53 78 25 19 15 6 6 9 14 9
Commercial p emits 300 290 399 357 377 310 274 351 279 317
Construction value(millions) 13.0 38.5 44.4 41.1 62.4 81.6 40.0 60.0 38.6 20.1
Residential permits 1,882 1,984 2,075 2,192 1,869 1,576 1,403 1,499 1,908 1,817
Construction value(millions) 100.4 121.9 151.3 170.8 139.8 106.2 82.9 102.1 119.2 113.3
Utilities
Water
Bills processed 122,924 134,693 144,627 151,515 165,165 177,195 189,061 194,614 202,136 207,685
New connections 989 1,070 1,331 1,246 838 734 543 631 666 571
Water meters replaced 294 26 43 104 88 75 78 73 1,842 1,900
Source:Various government departments.
129
City of Pasco, 'Washington 2011 Comprehensive AnnualFinancialR.eport
Capital Used by Function
Last Ten Fiscal Years
Fiscal Year Eaded December 31
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Function
Public Safety
Police Stations 1 1 1 1 1 1 1 1 1 1
Patrolunits 30 30 30 34 34 35 37 43 43 43
Fire stations 3 3 3 3 3 3 3 3 3 3
Culture and recreation
Parks* 40
Parks acreage* 207
Swimming pools 3 3 3 3 3 3 3 3 3 3
Physical emiroment
Streets
Street(niles) 189 203 212 225 238 302 392 475 619 781
Street lights 2,385 2,613 2,753 2,905 3,074 3,138 3,172 3,222 3,290 3,374
Traffic signals** 33 33 38 42 44 49
Water
Water mains(miles) 235 249 259 274 289 292 298 302 306 309
Services(accum.Total) 10,997 12,276 12,983 14,002 15,021 15,335 15,508 15,748 16,081 16,305
Fire hydrants 1,370 1,499 1,595 1,741 1,887 1,916 1,966 1,997 2,036 2,069
Maidmumdaily capacity(M®) 29 29 29 29 29 29 29 29 33 33
Sewer
Sanitary sewer(miles) 161.6 175.2 185.3 195.4 206.5 209.5 216.2 219.8 224 226
Maximum daily treatment capacity
7.1 7.1 7.1 7.1 7.1 7.1 7.1 7.1 7.1
(MGD)*
Average daily treatment(M®)* 3.2 3.1 3.3 3.6 3.9 4.0
Water Process Reuse
Irrigated acres 1,848 1,848 1,848 1,848 1,848 1,848 1,848 1,848 1,848
Total Acres 2,200 2,200 2,200 2,200 2,200 2,200 2,200 2,200 2,200
Storm Water
Storm sewer(miles) 34 35 37 39 40 40 40 40 42 43
Number ofcatch basins 1,780 1,987 2,150 2,407 2,664 2,738 2,801 2,878 3,089 3,176
Irrigation
Irrigation mains(miles)* 16 29 46 63 67 68 73 80 84
Maxinuxmdaily capacity(thousand of 1,450 1,450 8,950 9,950 12,300 16,100 17,100 17,100 17,100
gallons)*
Source:Various government departments.
Note:No capital asset indicators are available for the general government function.
*prior years not available
**some years not available
130
City of Pasco, -Washington 2011 Comprehensive AnnuaC Financial Report
STATE REQUIRED SCHEDULES
131
CitVot Pasco, 'Washington 2011 Comprehensive AnnuaCTtinancial Report
MCAGNO.0292
SCFIEDULE 9-LONG TERM DEBT
For the Year Ended December 31,2011
BARS code for Beginning BARS code for Ending
Outstanding ID No. Description Balance Additions Reductions Redemption of del rt Balance
DEBT/LIABR ITIFS RELATED TO GOVERNMENTAL FUNDS
Councilmanic GO Bonds
850.225152 251.11 2001 LTGO 99&Refund 1994 4,655,000 (4,655,000) 010.905.59151.571050 -
850.225153 251.16 2002 LTGO New&Refund 1995 1,770,000 (120,000) 010.905.59151.571060 1,650,000
850.225153 251.16 2002 LTGO New&Refund 1995 565,000 (105,000) 195.960.59151.571012 460,000
850.225155 2011 LTGO Refund 2001 LTGO - 4,110,000 (65,000) 010.905.59151.571061 4,045,000
Total Councilmanic 6,155,000
Voted-GO Bonds
850.225151 251.14 1999 UTGO Library&Fire Station 900,000 - (100,000) 272.980.59151.571020 800,000
850.225154 251.12 2002 ULTGO Ref Civic Ctr City Ball 1,050,000 (335,000) 273.980.59151.571020 715,000
Total Voted-Capital Facilities 1,515,000
Other Debt
'850.226362 263.81 2002 State LOCAL-Animal Control Facililty Land 143,635 (23,572) 010.905.59151.575002 120,063
'850.226364 263.81 2009 State LOCAL-Police Vehicle Computers 127,936 (49,859) 010.905.59151.575004 78,077
'850.226384 263.81 2006 Port Airport Fire Building 72,845 (11,882) 010.905.59151.579092 60,963
'850.226383 263.81 1998 TRAC Loan 368,276 (84,828) 191.961.59151.579090 283,448
Total Other Debt 542,551
850.223150 Compensated Absences(259.11) 1,717,940 1,274,030 (1;253,348) Total Comp Absences 1,738,622
'850.226390 OPEB Related Liabilities(263.93) 582,589 937,477 (370,815) Total OPEB 1,149,251
See Special Assessment Below 569,351
TOTAL GOVERNMENTAL ACTIVITIES PER FOOTNOTE 11,669,775
DEBT/LIABILITIES RELATED TO GOVERNMENTAL FUNDS
Revenue Bonds-Nonwted
'410.225248 252.11 2002 Rev Bond Water 46.10% 1,857,830 (122,165) 410.760.58241.572010 1,735,665
'410.225248 252.11 2002 Rev Bond Sewer 38.501/. 1,551,550 (102,025) 410.770.58241.572010 1,449,525
'410.225248 252.11 2002 Rev Bond Irrigation 15.40% 620,620 (40,810) 410.795.58241.572010 579,810
410.225249 252.11 2005 Rev Bond Water 3,565,000 (180,000) 410.760.58241.572010 3,385,000
'410.225250 252.11 2009 Revenue Bond Water Plant 8,840,000 (330,000) 410.760.58241.572010 8,510,000
'410.225252 252.11 2010A 5011.Water New 3,135,000 (115,000) 410.760.58241.572010 3,020,000
'410.225252 252.11 2010A 50%Sewer New 3,135,000 (115,000) 410.770.58241.572010 3,020,000
'410.225252 252.11 2010A Ref98B Water 20.48% 573,440 (136,192) 410.760.58241.572010 437,248
'410.225252 252.11 2010A Ref98B Sewer.88% 24,640 (5,852) 410.770.58241.572010 18,788
'410.225252 252.11 2010A Ref 1998B PWRF 78.641% 2,201,920 (522,956) 410.775.58241.572010 1,678,964
410.225253 252.11 2010T Refund 98A PWRF 1,240,000 (130,000) 410.775.58241.572010 1,110,000
Total Revenue Bonds 24,945,000
External Notes&Loans-Nonwted
'410.226380 263.82 Sewer Pollution Control Facility PWTF 95-025 215,057 (43,011) 410.770.58241.579090 172,045
'410.226380 263.82 West Pasco Water System PWTF 95-026 536,876 (107,375) 410.760.58241.579090 429,501
'410.226380 263.82 Riverview Trunk/SE Sewer PW00-043 1,111,404 (111,140) 410.770.58241.579090 1,000,263
'410.226381 263.82 Sewer Treatment Plant Phase l&2SRFLoan 13,198,197 - (1,269,026) 410.770.58241.579090 11,929,171
Total External Loans 13,530,980
Compensated Absences 331,136 417,065 (360,448) 387,753
See Special Assessment Below 1,295,000
TOTAL BUSINESS ACTIVITIFS PER FOOTNOTE 40,158,733
Governmental Special Assessment-Debt w/Commitment
850.225311 253.12 2010 LID 145-A Streetlmprovements 785,129 - (305,129) 245.980.59195.573010 480,000
2011 LID 146&Pension Fund Note - 89,351 - 246.980.59151.579010 89,351
Total Godt Spec Assess w/Commitment 569,351
Business SuecialAssessment-Debtw/Commitment
410.225244 1998C Rev Bond ULID 130&131 110,000 - (110,000) 410.770.58241.572010 -
410.225245 1999 ULID 133&134-Sewer 435,000 (435,000) 410.770.58241.572010
410.225246 2001 ULID 136&137-Sewer 300,000 (300,000) 410.770.58241.572010 -
410.225249 2007 ULID 141&142-Sewer 695,000 (180,000) 410.770.58241.572010 515,000
'410.225250 2009 ULID 143-Sewer 840,000 (60,000) 410.770.58241.572010 780,000
Total Business Spec Assess w/Commitment 1,295,000
132
City of Pasco, 'Washington 2011 Comprehensive AnnuaCThiancialR.eport
MCAG NO.0292
SCHEDULE 10-LIMITATION OF INDEBTEDNESS
For the Year Faded December 31,2011
Property Valuation for 2011 Taxes* $3,008,528,000
GENERAL PURPOSES
Limit of 2.5%of Assessed Value
Councilmanic:
Capacity(1.5%of Assessed value) 45,127,920
Less:
G.O.Bonds Outstanding $6,155,000
Special Assessment Bonds&Notes $569,351
State LOCAL Loans 198,143
T.R.A.C.Obligation 283,447
Airport Fire Station 60,963
Compensated Absences 1,738,622
OPEB 1,149,251
Outstanding Debt 10,154,777
Remaining debt capacity witout a vote 34,973,143
Voter-Approved-
Capacity(1.0%of Assessed Value) 30,085,280
Less:
G.O.Bonds Outstanding 1,515,000
Outstanding Debt 1,515,000
Remaining debt capacity with a vote 28,570,280
UTILITY PURPOS ES
Voter-Approved:
Capacity(2.5%of Assessed Value) 75,213,200
Remaining debt capacity-Utility Purpose,voted 75,213,200
OPEN SPACE AND PARK FACILITIES
Voter-Approved:
Capacity(2.5%of Assessed Value) 75,213,200
Remaining debt capacity-Open Space Park&Facilites,voted 75,213,200
*Source Franklin County Tax Collection Book
133
City of Pasco, 'Washington 2011 Comprehensive AnnualFinancialR.eport
MCAG NO.0292
SCHEDULE 16-S CHEDULE OF EXPENDTFURFS OF FEDERAL AWARDS
Fiscal Year Ended December 31,2011
Grantor/ Federal Other Pass-
Pass-Through Grantor CFDA Identification Through Direct
Program Title Number Number Awards Awards Total
US Department of Health&Human Services
Pass through Yakima County.Office ofA gin 2&Lone Tenn Care
2011 Aging&Long Term Care-Foot care 93.043 $ 6,856 $ 6,856
2011 Aging&Long Term Care-Foot care 93.044 14,078 14,078
Total US Dept of Health&Human Services 20,934 - 20,934
US Department of Federal Emergency Management Agency
2011-2012 Assisstance to Firefighters(FEMA) 97.044 EMW-2010-FO-03221 67,452 67,452
Total US Department ofFEMA - 67,452 67,452
US Department of Energy
2009-2012 Energy Efficency Conservation(ARRA) 81.128 DE-SCO002086 456,643 456,643
Total US Department of Energy 456,643 456,643
Bonneville Power
2011-2012 Smart hrigation Controller 81.52664 00052664 10,000 10,000
Total Bonneville Power 10,000 10,000
US Department of Housing&Urban Development
Community Development Block Grant/Entitlement Grant 14.218 B-10-MC-53-009 791,681 791,681
Community Development Block Grant/Program Income 14.218 2,000 2,000
Pass Through Washington Department of Commerce
Neighborhood Stabilization Plan 14.228 08-176401-014 35,613 35,613
Total US Department of Housing&Urban Development 35,613 793,681 829,294
US Department of Justice
2008-2012 Edward Bryne Memorial JAG 16.738 2009-DJ-BX-1308 5,975 5,975
Pass Through from City of Kennewick
2009 Project Safe Neighborhoods 16.609 F09-34023-002 7,471 7,471
2010 Project Safe Neighborhoods 16.609 FIO-34023-002 7,000 7,000
2011-2012 Project Safe Neighborhood 16.609 FII-34023-001 1,466 1,466
Pass Through from Department of Commerce
2010-2011 STOP Violence Against Women 16.588 FIO-31103-141 34,302 34,302
Pass Through from MEFRO Drug Task Force
2011-2012 Edward Byrne Formula(Metro) 16.738 M 11-34021-012 50,291 50,291
2010-2011 Edward Byrne Formula(Metro) 16:738 M 10-34021-012 55,682 55,682
Total US Dept of Justice 156,212 5,975 162,187
National Traffic Safety Administration
Pass through Washington Association of Sherrif&Police Commission
2011-2013 Target ZERO Task Force 20.600 CP12-03 6,311 6,311
2009-2011 Target ZERO Task Force 20.600 CP12-03 26,469 26,469
32,780 32,780
US Department of Transportation
Lewis Street Over Pass 20.205 STPUS-1-IP-3530(006)&LA-7055 706,706 706,706
Pass through Washington Traffic Safety Commission
2010-2011 CIOT Click-it-or-Ticket(WTSC) 20.602 1,509 1,509
2010-2011 Slow Down or Pay Up(WTSC) 20.600 1,873 1,873
2011-2012 Impaired Driving 20.600 795 795
2010-2011 DHGN DUI Emphasis(WTSC) 20.601 4,041 4,041
Pass through Washington Department of Transportation
2012-2013 Street Overlays(STP) 20.205 STPD-STPUS-HIP-3530(006) 5,913 5,913
Total US Dept.of Transportation 720,837 - 720,837
TOTAL FEDERAL AWARDS EXPENDED: $ 966,376 $1,333,751 $2,300,127
134
City of Pasco, 'Washington 2011 Comprehensive AnnualFinancialR.eport
MCAGNO.0292
CITY OF PAS CO
SCHEDULE 16-SCHEDULEOF STATEAND LOCAL FINANCIAL ASSISTANCE
Fiscal Year Ended December 31,2011
Grantor/ Federal Other Pass-
Pass-Through Grantor CFDA Identification Through Direct
Pro ram Title Number Number Awards Awards Total
Washington State Senior Citizens
Pass through Yakima County.Office ofAging&Long Term Care
2011 Aging&Long Term Care-Foot care MOD NO 1 $ 4,487 $ $ 4,487
Total Washington State Senior Citizens 4,487 4,487
Washington State Traffic Safety Commission
2011 School Zone Flashing Beacons - 120,000 120,000
2011-2013 Target ZERO Task Force CP12-03 15,133 15,133
Total Traffic Safety Co mrission 135,133 135,133
Washington State Department of Transportation
Highway Planning&Construction-Lewis St Overpass STPUS-HLP-3530(006)&LA-7055 1,004,337 1,004,337
Total Washington State Department of Transportation 1,004,337 1,004,337
Washington State Department of Ecology
2010-2011 Stomnvater Grant Phase H G1000270 FY 10 43,007 43,007
Columbia Water Supply Project C1200160 2,954 2,954
USBR Irrigation Connection C1200160 4,174 4,174
2010 Stormwater Street Sweeper&Brochure GI 100081 218,823 218,823
Total Washington State Department of Ecology 268,958 268,958
Washington State Patrol
2011-2012 Basic Fire Fighter Training Program C110116GSC 12,000 12,000
Total Washington State Patrol - 12,000 12,000
Washington Department of Commerce
2011-2012 Edward Byrne Formula(Metro) State Portion M l l-34021-012 10,301 10,301
Total Washington Department of Commerce 10,301 - 10,301
Washington State Department of Health&Human
Services
2010-2011 EMS Prehospital Participation(Trauma Care) 303-GLA-70,168 - 1,738 1,738
1,738 1,738
TOTAL STATEAND LOCAL ASSISTANCE- $ 14,788 $ 1,422,166 $ 1,436,954
135
City of Pasco, 'Washington 2011 Comprehensive AnnuaCTinanciaCReport
NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (SCHEDULE 16)
NOTE 1 —BASIS OF ACCOUNTING
The Schedule of Financial Assistance is prepared on the same basis of accounting as the City's financial
statements. The City uses a modified accrual basis of accounting in all of the related Governmental
funds and full accrual in the Proprietary funds.
NOTE 2 —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, may be more than shown.
NOTE 3 —REVOLVING LOAN—PROGRAM INCOME
The City has a revolving loan program for low-income housing. Under this federal pass-through grant,
repayments to the City are considered program revenues (income) and loans of such funds to eligible
recipients are considered expenditures. No loan funds were disbursed in 2011 for the rehab loan
program. The amount of principal and interest received in loan repayments for the year was $49,640.
The City also participates in the HUD HOME Program for low-income individuals, which is
administered through the City of Richland. Under this federal pass-through grant, the sale of low-
income homes by the City is considered program revenues (income) and costs of building homes and
purchase of properties are considered expenditures. This program is audited through the City of
Richland.
136
City of Pasco, -Washington 2011 Comprehensive .Annual Financial Report
MCAG NO. 0292
SCHEDULE 19- LABOR RELATIONS CONSULTANTS
For the Year Ended December 31, 2011
Has your government engaged labor relations consultants? X Yes No
If yes, please provide the following information for each consultant(s):
Name of Firm: Name of Firm:
The Wesley Group The Summit Law
Name of Consultant: Name of Consultant:
Kevin Wesley Otto Klein, consultant
Business Address: Business Address:
P.O. Box 7164 315 Fifth Avenue South Suite 1000
Kennewick, WA 99336-0616 Seattle, WA 98104
Amount Paid To Consultant During Fiscal Year: Amount Paid To Consultant During Fiscal Year:
$22,843.76 $2,610.50
Terms And Consitions, As Applicable, Including: Terms And Consitions, As Applicable, Including:
Rates (E.G., Hourly, Etc.): $100 per hour Rates (E.G., Hourly, Etc.): $280 per hour
Maximum Compensation Allowed: 0 Maximum Compensation Allowed: 0
Duration Of Services: Various throughout the year.
Services Provided: Union Bargaining Assistance
Certified Correct this 22nd day of March,2012
to the best of my knowledge and belief;
Signature
Lynn Jacks n
HR r
137
City of Pasco, Washington 2011 Comprehensive AnnualFinancialR.eport
MCAGNO.0292
SCHEDULE 21-LOCAL GOVERNMENT RISK ASSUMPTION
For the Year Ended December 31,2011
Program Manager: Lynne Jackson
Address: 525 N 3rd Ave Pasco Wa 99301
Phone: 509-545-3473
Email: jacksonl @pasco-wa. ooy
Yes Does the entity self-insure for any class of risk,including liability,property,health and
welfare,unemployment compensation,workers'compensation?(yes or no)
Which class of risk does the entity self-insure?(Check all that apply)
Liability
Property
X Health and welfare(medical,dental,prescription)
Unemployment compensation
Workers'compensation
Other-please dscribe
Yes Does the entity self-insure as an individual program?(yes or no)
No Does the entity allow another separate legal entity into its self-insurance
programs(yes or no)For example,employees of a different organization
participate in a health and welfare program of a city.
If so,list the entity or entities:
No Does the entity self-insure as a joint program?(yes or no)
If Yes,list the other members)
No Does the entity administer its own claims?(yes or no)
Yes Does the entity contract with a third party administrator for claims administration?(yes or no)
Yes Did the entity receive a claims audit in the last three years,regardless of who administered
the claims?(yes or no)
Yes Were the program's revenues sufficient to cover the program's expenses(yes or no)
No Did the programuse an acturary to determine its liabilities?(yes or no)
138
City of Pasco, 'Washington 2011 Comprehensive AnnualFinancialR.eport
MCAGNO.0292
SCHEDULE 21-LOCAL GOVERNMENT RISK ASSUMPTION
For the Year Ended December 31,2011
Third Party Administrator Benefit Management,Inc.
Contact Kelli Gerstenkorn
Address: PO Box 1090,Great Bend,KS 67530
Phone: 800-290-1368 x1052
Email: kaerstenkom&bn*ansas.com
Describe each class of risk the governing body has decided to assume as well as the appropriate
dollar level involved.
Numbers of claims Numbers of claims Total amount of
Description of Risk Type received during the paid during the claims paid
period period during the period
Medical/Rx 21,554 21,692 $3,417,415.83
Dental 1,679 1,629 $341,096.00
139
City of Pasco, 'Washington 2011 Comprehensive AnnuaCTinancialR.eport
OUR THANKS TO AN EXCELLENT TEAM
We recognize the contributions of the following City of Pasco employees for their contribution to this
report. Each member of this team of professionals played a key role in producing this CAFR. Their
dedication and teamwork are essential to the success of this report and all of their efforts are hugely
appreciated.
Richard G. Terway
Administrative and Community Service Director
Dunyele Mason
Financial Services Manager
Karen Southwick
Accounting Lead
Karen Conn
Staff Accountant
Cora Large
Staff Accountant
140