HomeMy WebLinkAbout04-22-15 Pasco PFD Board Agenda PacketPasco Public Facilities District
Building Regional Facilities through Community Partnerships
April 22, 2015
4:00 p.m.
Pasco City Hall - Conference Room #1
AGENDA
1. Call to order and roll call
2. Approval of minutes:
* Regular Meeting December 23, 2014
3. Claims Approval:
* 1st Quarter 2015: $106,543.19
4. Financial Report:
* 1 st Quarter:
• Operating Statement
• Net Assets Statement
* 2014 Financial Report
5. Old Business:
Update on TCRPFD
6. New Business:
Pasco Project Selection Path Forward
7. Other Business:
8. Adjournment
(* indicates documents mailed with agenda)
PUBLIC FACILITIES DISTRICT BOARD
December 23, 2014
MINUTES
Call To Order:
The meeting was called to order at 4:00 p.m., by PFD President Morrissette, in Conference
Room #1 at Pasco City Hall.
Roll Call:
Board Members Present: Leonard Dietrich, John Merk, Craig Maloney, Spence Jilek and
Mark Morrissette.
Also Present: Stan Strebel, Deputy City Manager and Eva Lindgren, Interim Finance
Manager.
Approval of Minutes:
It was motioned by Mr. Dietrich, seconded by Mr. Merk, and carried to approve the
minutes of the July 16, 2014 Regular Meering.
Claims Approval:
President Morrissette presented third quarter Claims History. Following discussion, it was
motioned by Mr. Merk seconded by Dr. Jilek and carried to approve payment of third quarter
claims in the total amount of $109,789.12.
Financial Report:
President Morrissette presented the third quarter Operating Statement reflecting Total
Sources of Funds $307,770.00 and Total Uses of Funds $305,836.00. The third quarter Net
Assets Statement was also presented reflecting an actual Net Asset balance of $49,458.00.
Following discussion, the Financial Report was accepted as presented.
Mr. Strebel proposed to skip the January PFD meeting and meet in April. President
Morrissette requested the April meeting be scheduled after April 15`s.
It was motioned by Mr. Dietrich, seconded by Dr. Jilek, and carried to cancel the January
meeting and schedule the first quarter PFD meeting in April after the 15th.
Old Business:
None
New Business:
• 2015 Operating Budget
Mr. Strebel presented the 2015 Pasco Public Facilities District operating budget.
PUBLIC FACILITIES DISTRICT BOARD
Minutes —December 23, 2014
Page - 1
It was motioned by Dr. Jilek, seconded by Mr. Merk, and carried to approve the 2015
Pasco Public Facilities District Operating Budget as presented.
Auditor's Recommendation "Compensation Waiver"
Mr. Strebel explained the Auditor's recommendation regarding the "Waiver of
Remuneration," as contained in the audit report. Each Board Member was provided a
form, waiving all compensation for meeting attendance for the time that they have served
on the board and through the remainder of their current terms for completion. After
completion all forms were returned to Mr. Strebel. It was also noted that there were no
findings or other issues identified by the State Auditor in the recent report.
• Association of Washington State Public Facilities Districts Membership
Mr. Strebel presented the 2015 Membership Dues invoice in the sum of $750.00.
Mr. Dietrich stated it would be advisable to find out about possible membership levels.
Mr. Strebel will contact the Association in order to explore membership level options and
report back to the PFD Board.
Following discussion, it was motioned by Dr. Jilek seconded by Mr. Maloney and carried
to pay up to $750.00 for renewal of 2015 Membership Dues.
• Report on Pending Property Sale: Sandifur Parkway
Mr. Strebel stated the property sale is scheduled to be complete by January Wh, 2015.
• Update on TCRPFD
Mr. Strebel reported the TCRPFD was in the process of establishing a committee to
consider community feedback and desired projects.
Mr. Maloney stated that he would be interested in being a member of the committee.
Other Business
• Training: Open Public Meetings Act (new legal requirement)
Mr. Strebel stated that Mr. Dietrich, President Morrissette and Mr. Merk need to
complete the required training which will take place today after the meeting.
Mr. Maloney and Dr. Jilek previously completed the training.
Mr. Dietrich, President Morrissette and Mr. Merk agreed to remain after adjournment in
order to complete the required training.
Adjournment:
There being no other business, President Morrissette adjourned the meeting at 5:02 p.m.
Mark Morrissette, President
Debra L. Clark, PFD Secretary
PUBLIC FACILITIES DISTRICT BOARD
Minutes — December 23, 2014
Page - 2
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PASCO PUBLIC FACILITIES DISTRICT
STATEMENT OF REVENUES, EXPENDITURES & CHANGES IN FUND BALANCE
Year to Date Ending March 31, 2015
REVENUES
Sales Tax
City of Pasco Grant
Interest Income
Total Revenues
EXPENDITURES
Advertising/Publications
Legal Services
Kennewick PFD
Professional Services
Insurance
Administrative Services
Total Expenditures
Net Change in Fund Balances
Annual
2015 2015
Budget Actual
$ 370,000 $ 34,319
20,000 5,001
100 24
390,100 39,344
1,000
1,000
370,000 34,319
10,000
2,800 729
12,000 3,000
396,800 38,048
(6,700) 1,296
Beginning Fund Balance, January 1 52,000 49,311
Ending Fund Balance $ 45,300 $ 50,607
PASCO PUBLIC FACILITIES DISTRICT
BALANCESHEET
As of March 31, 2015
ASSETS
Cash $ 82,740
Prepaid Insurance 2,186
TOTAL ASSETS 84,926
19GI031gII11VR
Accounts Payable 34,319
TOTAL LIABILITIES 34,319
TOTAL NET ASSETS $ 50,607
Administrative and Community Services Department
525 N. 3rd Avenue, Pasco, WA 99301
MEMORANDUM
TO: The Board of the Pasco Public Facilities District
FROM: Eva Lindgrei Aeputy Director of ACS
RE: 2014 Annual Financial Statements and 2015 I't Quarter Financial Statements
Enclosed please find the 2014 annual financials and the 2015 1" quarter financials. I will be attending
the Pasco Public Facilities District board meeting on April 22 and will be available to answer any
questions you may have regarding these documents.
The City is in the process of updating its practices to more closely accord with Governmental GAAP
(Generally Accepted Accounting Principles), which has resulted in some changes to how the Public
Facility District's financial information is being reported both on an annual and quarterly basis.
Below are items of note relating to the 2014 Annual Financial Statements:
• Two months of sales taxes receivable are reflected in these statements, since there is a two-
month lag in sales tax payments from the State of Washington (i.e. November sales taxes are
received in January.)
• Three months of sales taxes payable are reflected in these statements, since the October taxes
were received at the end of December and not remitted until January.
• Prepaid insurance is reported.
• Descriptive language has been made less specific. For example, "Kennewick PFD" has
become "Intergovernmental Payments."
Below are items of note regarding the 2015 1 st Quarter Financial Statements:
Because January and February receipts are 2014 revenues, this statement reports only March
receipts as revenues. These receipts represent January sales taxes.
No sales taxes receivable are recorded for February or March sales taxes, since these amounts
are currently unknown.
PASCO PUBLIC FACILITIES DISTRICT
Pasco, Washington
ANNUAL FINANCIAL STATEMENTS
For the fiscal year ended
December 31, 2014
Prepared by:
Finance Division
Administrative and Community Services Department
Richard G. Terway — Director
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TABLE OF CONTENTS
Directory of Board of Directors........................................1
Management's Discussion and Analysis...............................2
Basic Financial Statements
Government -wide Financial Statements
Statement of Net Position...............................................8
Statement of Activities..................................................9
Fund Financial Statements
Balance Sheet — Governmental Fund................................10
Statement of Revenues, Expenditures and Changes in Fund
Balance — Governmental Fund......................................11
Statement of Revenues, Expenditures and Changes in Fund
Balance - Governmental Fund Budget To Actual ..................12
Notes to the Financial Statements...........................................13
This page is intentionally blank.
Pasco Public Facilities District 2014 Basic Financial Statements
Directory of Board Directors
As of December 31, 2014
APPOINTED DIRECTORS TERM EXPIRES
PRESIDENT
Mark Morrissette 7/14/2016
VICE PRESIDENT
Leonard Dietrick 7/14/2018
SECRETARY/TREASURER
Craig Maloney 7/14/2018
DIRECTORS
Spencer Jilek 7/14/2017
John Merk 7/14/2015
Pasco Public Facilities District 2014 Basic Financial Statements
Management's Discussion and Analysis
This management discussion and analysis of the Pasco Public Facilities District's (PPFD)
financial performance provides an overview of the financial activities for the year ended
December 31, 2013. Please read it in conjunction with the accompanying basic financial
statements and the notes to the financial statements.
Financial Highlights
• The assets of the Pasco Public Facilities District's exceeded its liabilities at December 31,
2014 by $49,311.
The Pasco Public Facilities District program revenues exceeded its program expenses by
$1,787.
Overview of the Financial Statements
This discussion and analysis are intended to serve as an introduction to the Pasco Public
Facilities District'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 required 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 Pasco Public Facilities District's
finances in a manner similar to a private -sector business. The Statement of Net Position presents
information on all of the assets and liabilities with the difference between the two reported as net
position. Over time, increases or decreases in net position may serve as a useful indicator of
whether the financial position of the Pasco Public Facilities District is improving or
deteriorating.
The statement of activities presents information showing how the government's net position
changed during the most recent fiscal year. All changes in net position are reported as soon as
the underlying event giving rise to the change occurs, regardless of the timing of related cash
flows. Thus, revenues and expenses are reported in this statement for some items that will only
result in cash flows in future fiscal periods (e.g. uncollected taxes).
The government -wide financial statements include a single function (classified as culture and
recreation) which is primarily supported by taxes and intergovernmental revenues
(Governmental Activities). The PPFD currently does not have any business -type activities. The
governmental activity of the Pasco Public Facilities District was to provide support to the
Kennewick Convention Center. In addition, the Pasco Public Facilities District conducted some
project concept planning and evaluation work through consultant contracts.
The government -wide financial statements can be found on pages 8-9 of this report.
2
Pasco Public Facilities District 2014 Basic Financial Statements
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 Pasco
Public Facilities District like other governments uses fund accounting to ensure and demonstrate
compliance with finance -related legal requirements.
Governmental funds. Governmental funds are used to account for essentially the same functions
reported as governmental activities in the government -wide financial statements. However,
unlike the government -wide financial statements, governmental fund financial statements focus
on near-term inflows and outflows of spendable resources, as well as on balances of spendable
resources available at the end of the fiscal year. Such information may be useful in evaluating a
government's near-term financing requirements.
Because the focus of governmental funds is narrower than that of the government -wide financial
statements, it is useful to compare the information presented for governmental funds with similar
information presented for governmental activities in the government -wide statements. By doing
so, readers may better understand the long-term impact of the government's near-term financing
decisions. Both the governmental fund balance sheet and the governmental fund statements of
revenues, expenditures and changes in fund balances provide a reconciliation to facilitate this
comparison between governmental funds and governmental activities.
The PPFD maintains just one governmental fund; the general fund. Information is presented in
the governmental fund balance sheet and in the governmental fund statement of revenues,
expenditures and changes in fund balances. The general fund is a major fund as defined by the
Governmental Accounting Standards Board (GASB).
The PPFD 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 10 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 fund statements. The notes to the financial
statements can be found starting on page 13.
Government -wide Financial Analysis
As noted earlier, net position may serve over time as a useful indicator of a government's
financial position. In the case of the PPFD, assets exceeded liabilities by $49,311 at the close of
2014. All of the Pasco Public Facilities District's net position represents working capital (current
assets minus current liabilities), as it does not have any investments in long term capital assets or
long term debt obligations. At the end of the current and prior fiscal years, the PPFD was able to
report positive net position. The government's net position increased by $1,787 during the
current fiscal year. This increase represents the degree to which ongoing revenues have exceeded
ongoing expenses. Payables represent the amount of sales taxes payable to the Kennewick Public
Facility District (KPFD), per inter -local agreement.
Pasco Public Facilities District 2014 Basic Financial Statements
Current assets
Current liabilities
Total net position
Pasco Public Facility District Net Position
Governmental Activities
Restated
2014 2013
$151,603 $140,514
102,292 92,990
Total Primary Government
Restated
2014 2013
$ 151,603 $140,514
102,292 92,990
$ 49,311 $ 47,524 $ 49,311 $ 47,524
Statement of Activities
The following condensed table of changes in net assets compares the revenues and expenses for
the current year to those of the prior year.
Program revenues
General revenues
Total revenues
Program expenses
Changes in net position
Pasco Public Facility District Changes in Net Position
Governmental Activities
Restated
2014 2013
$ 19,996 $ 20,000
404,574 400,128
424,570 420,128
Total Primary Government
Restated
2014 2013
$ 19,996 $ 20,000
404,574 400,128
424,570 420,128
422,783 412,968 422,783 412,968
1,787 7,160 1,787 7,160
The largest form of revenue is from sales taxes ($404,574 and $400,128 in 2014 and 2013,
respectively). The largest expense is the payment to the KPFD for all of the sales taxes received.
The other expenses are mostly administrative in nature, and continued one-time costs relating to
market analysis and feasibility studies for a potential regional aquatics center.
m
Pasco Public Facilities District 2014 Basic Financial Statements
Financial Analysis of the Government's Funds.
As noted earlier, the Pasco Public Facilities District (PPFD) uses fund accounting to ensure and
demonstrate compliance with finance related legal requirements.
Governmental funds. The focus of the Pasco Public Facilities District's governmental funds is to
provide information on near-term inflows, outflows and balances of spendable resources. Such
information is useful in assessing the Pasco Public Facilities District financing requirements. In
particular, unrestricted fund balance may serve as a useful measure of a government's net
resources available for spending at the end of the fiscal year.
As of the end of the current fiscal year, the PPFD's only governmental fund is its general fund.
The general fund is the chief operating fund of the PPFD and reported an ending fund balance of
$49,311, an increase of $1,787, in comparison with the prior year. All of fund balance consists of
unassigned fund balance, which is available for spending at the government's discretion.
As a measure of the general fund's liquidity, it may be useful to compare unrestricted,
unassigned fund balance to total expenditures. This represents 12% of total expenditures.
Overall, revenues increased by $4,446 and total expenditures increased by 9,815. Generally fund
revenues were affected by the continued strength in sales activity as the increase was due to
increases in sales tax revenues. Normally revenues and expenditures would be expected to
increase by the same amount, however, in the prior year there were one-time expenditures related
to supporting the Regional Public Facility District and which were not reported in the current
year.
General Fund Budgetary Highlights
There was no change in appropriations between the original and final amended budget. Actual
revenues were 121% of both the original and revised budget; actual expenditures were 115% of
the original and revised budget. This was due to increased sales tax revenue and the related
KPFD expense of all sales taxes received.
Economic Factors and Next Year's Budget
2015's budget was developed using the expectations that 2015 activity would be similar to
2014's actual revenues and expenditures.
Requests for Information
This financial report is designed to provide a general overview of the Pasco Public Facilities
District'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 Deputy Director of A&CS, City of Pasco, P.O. Box 293,
Pasco, WA 99301.
Pasco Public Facilities District 2014 Basic Financial Statements
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0
Pasco Public Facilities District 2014 Basic Financial Statements
BASIC FINANCIAL STATEMENTS
Pasco Public Facilities District 2014 Basic Financial Statements
ASSETS
Investments
Taxes receivable
Prepaid items
Total assets
LIABILITIES
Accoimts payable
Total liabilities
PASCO PUBLIC FACILITIES DISTRICT
STATEMENT OF NET POSITION
As of December 31, 2014
Governmental
Activities
$ 80,193
68,495
2,915
151,603
102,292
102,292
NET POSITION
Unrestricted 49,311
Total net position $ 49,311
The notes to the financial statements are an integral part of this statement.
E
Total Primary
Government
$ 80,193
68,495
2,915
151,603
102,292
102,292
49,311
S 49,311
Pasco Public Facilities District 2014 Basic Financial Statements
PASCO PUBLIC FACILITIES DISTRICT
STATEMENT OF ACTMTIES
For the Year Ended December 31, 2014
Charges for Operating Capital Governmental Toml Prmnry
Funaamal Programs Expenses Services Grants Grants Activities Government
Primary Goventment
Governmental Activities:
Cultural& Community Activities $ 422,783 $ $ 19,996 $
- $ (402,787)
$(402,787)
Total Gover»enml Activities 422,783 19,996
(402,787)
(402,787)
Total Pramy Government $ 422,783 $ $ 19,996 $
Geremlrevemres:
Taxes
404,521
404,521
lnvesrmcot earnings
53
53
Totalgecemlrevetwts
404,574
404,574
Change in net position
1,787
1,787
Net position - beguming
47,524
47,524
Net position- ending
499311
49,311
The notes to the 5naucial statemems are an integral part oftbiv statement.
0
Pasco Public Facilities District 2014 Basic Financial Statements
PASCO PUBLIC FACILITIES DISTRICT
BALANCE SHEET
As ofDecember 31, 2014
ASSETS
Investments
Taxes Receivable
Prepaid Items
Total assets
LIABILITIES
Accounts Payable
Total LiabAties
FUND BALANCES
Unassigned
Total find balance
80,193
68,495
2,915
151,603
102,292
102,292
49,311
$ 49,311
The notes to the financial statements are an integral part of this statement.
10
Pasco Public Facilities District 2014 Basic Financial Statements
STATEMENT OF REVENUES, EXPENDITURES & CHANGES IN FUND BALANCE
Year to Date Ending December 31, 2014
REVENUES
Taxes
Grants
Investment earnings
Total Revenues
EXPENDITURES
Current:
Culture and Conmumnity Activities:
AdvertisingTubfications
Legal Services
Intergovernmental Payments
Professional Services
Insurance
Administrative Services
Total Expenditures
Net change in find balance
Fund balance - beginning
Fund balance - ending
IrMi5. I
2014
Budget
$ 330,000
20,000
95
2014
Actual
$ 404,521
19,996
53
$ 350,095 $ 424,570
$ 1,000
1,000
330,000
20,000
2,800
12,000
366,800
(16,705)
47,233
$ 68
675
404,521
2,721
2,798
12,000
422,783
1,787
47,524
$ 30,528 $ 49,311
The notes to the financial statements are an integral part of this statement.
11
Pasco Public Facilities District 2014 Basic Financial Statements
PASCO PUBLIC FACILITIES DISTRICT
STATEMENT OF REVENUES, EXPENDITURES & CHANGES IN FUND BALANCE -
BUDGErTO ACTUAL -GENERAL FUND
Year to Date Ending December 31, 2014
REVENUES
Taxes
Grants
Investment earnings
Total Reverses
EXPENDITURES
Current:
Culture and recreation:
Advertising/Publications
Legal Services
Intergovernmental Services
Professional Services
Insurance
Administrative Services
Total Expenditures
Net change in fiord balance
Fund balance - beg®ing
Fund balance - ending
Original
Final
68
932
Budget
Budget
Actual
Variance
$ 330,000
$ 330,000
$ 404,521
$ 74,521
20,000
20,000
19,996
(4)
95
95
53
(42)
$ 350,095
$ 350,095
$ 424,570
$ 74,475
1,000
1,000
68
932
1,000
1,000
675
325
330,000
330,000
404,521
(74,521)
20,000
20,000
2,721
17,279
2,800
2,800
2,798
2
12,000
12,000
12,000
-
366,800
366,800
422,783
(55,983)
(16,705)
(16,705)
1,787
18,492
47,233
47,233
47,524
291
$ 30,528 $
30,528
$ 49,311
$ 18,783
The notes to the financial statements are an integral part ofths statement.
12
Pasco Public Facilities District 2014 Basic Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Pasco Public Facilities District (PPFD) 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 following
is a summary of the more significant policies.
A. Reporting Entity
The Pasco Public Facilities District (PPFD or "District") was created by the Council of the
City the Pasco by passage of Ordinance No. 3558 on July 15, 2002, to participate in
acquisition, construction, operation, and/or financing of a regional center (as defined in RCW
35.57) in the Tri -Cities area.
State law, as defined in the Revised Code of Washington (RCW) Chapter 35.57 (the City
PFD Act), authorizes the City Council, as the legislative authority of the City, to create a
public facilities district coextensive with the boundaries of the City for the purposes, among
others, of acquiring, constructing, operating, and financing one or more "Regional Centers"
through cooperative and joint ventures with one or more qualifying public facilities districts.
A Regional Center is defined in the City Public Facilities District (PFD) Act as
"...convention, conference, or special events center, or any combination of facilities, and
related parking facilities, serving a regional population constructed, improved or rehabilitated
after July 25, 1999 at a cost of at least $10,000,000 including debt service."
State law also states a public facilities district created before July 31, 2002 that commences
construction or improvement of a Regional Center before January 1, 2004 may impose, solely
for Regional Center Purposes, a 0.033% sales and use tax. The Sales Tax operates to shift a
share of the State's sales and use tax revenues to the public facilities district at no additional
cost to taxpayers.
The Board of Directors is comprised of 5 members; two members appointed by the City
Council and 3 members appointed by the City Council based on recommendations from local
organizations. The Board then elects a President, a Vice President, and a Secretary/Treasurer.
The initial appointment of the Board called for one - one year term, one - two year term, one -
three year term and two - four year terms. Thereafter, appointments are for four year terms.
13
Pasco Public Facilities District 2014 Basic Financial Statements
B. Government -wide and fund fmancial statements
The government—wide financial statements (i.e., the Statement of Net Position and the
Statement of Activities) report information on all of the non -fiduciary activities of the
primary government. As there is just one fund, the general fund, there is no interfund activity
in these statements. Governmental activities, which normally are supported by taxes and
intergovernmental revenues, are reported separately from business -type activities, which rely
to a significant extent on fees and charges for support. The PPFD had no business -type
activities in the current or prior year.
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. PPFD 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.
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. Revenues are recorded when earned
and expenses are recorded when a liability is incurred, regardless of the timing of related cash
flows.
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 60 days of the end of the current fiscal period. Expenditures generally are
recorded when a liability is incurred, as under accrual accounting.
The PPFD reports the general fund as a major governmental fund. The general fund is the
PPFD's primary operating fund. It accounts for all governmental financial resources.
Amounts reported as program revenues include 1) charges to customers, 2) operating grants
and contributions, and 3) capital grants and contributions. General revenues include all
taxes.
The PPFD does not have a flow of funds policy and therefore utilizes the default provided by
GASB 54 which assumes restricted assets are used before unrestricted assets.
D. Assets, liabilities and equities
Deposits and investments
14
Pasco Public Facilities District 2014 Basic Financial Statements
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 and include amount invested in the State of Washington's Local
Government Investment pool. This is done via City of Pasco's City Treasurer. The
investments are held in the City of Pasco's name and are recorded in the City accounts, as
held on behalf of the PPFD.
Receivables and payables
Receivables consist of sales taxes receivable. Payables result from an inter -local agreement
with the Kennewick Public Facility District (KPFD) that all sales tax received will be passed
through to the KPFD.
Fund balance and fund flow policies
Fund balance of governmental funds is reported in various categories based on the nature of
any limitations requiring the use of resources for specific purposes. The District itself can
establish limitations on the use of resources through either a commitment (committed fund
balance) or an assignment (assigned fund balance).
The committed fund balance classification includes amounts that can be used only for
specific purposes determined by formal action of the District's highest level of decision-
making authority. The Board is the highest level of decision making authority for the
government that can, by adoption of an ordinance prior to the end of the fiscal year, commit
fund balance. Once adopted, the limitation imposed by the ordinance remains in place until a
similar action is taken (the adoption of another ordinance) to remove or revise the limitation.
Amounts in the assigned fund balance classification are intended to be used by the
government for specific purposes but do not meet the criteria to be classified as committed.
The Board may also assign fund balance as it does when appropriating fund balance to cover
a gap between estimated revenue and appropriations in the subsequent year's appropriated
budget. Unlike commitments, assignments generally only exist temporarily. In other words,
an additional action does not normally have to be taken for the removal of an assignment.
Conversely, as discussed above, an additional action is essential to either remove or revise a
commitment.
The District 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.
In the fund financial statements, governmental funds report restrictions of fund balance as
follows:
Non spendable fund balance - includes amounts that are not in spendable form such as
inventory or are required to be maintained intact such as the principal of a permanent fund.
Restricted fund balance - includes amounts that can be spent only for the specific purpose
stipulated by external resource providers such as for grant providers, bondholders, higher
levels of government, or through enabling legislation.
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Pasco Public Facilities District 2014 Basic Financial Statements
Committed fund balance — includes amounts that can be used only for the specific purposes
determined by a formal action of the Board. Commitments may be changed or lifted only by
the Board taking the same formal action that imposed the constraint originally.
Assigned fund balance — includes amounts intended to be used by the District 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 - STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
Scope of Budgetary Accounting. Annual appropriated budgets are adopted for the PPFD on
the modified accrual basis of accounting. Annual appropriated budgets are adopted at the
major expenditure category level. Appropriations lapse at year-end. Budgetary accounts are
integrated in fund ledgers for all budgeted funds.
Amending the Budget. When the Board determines it is in the best interest of the PPFD to
increase or decrease the appropriation for a particular item, it may do so with a motion
approved by an affirmative vote of at least three Board members.
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 any authorized amendments.
Budget Compliance. The PPFD expenditures exceeded the budget appropriation by $55,983.
The primary source of revenue is sales tax, which is volatile in nature. By contract, the total
amount of sales tax received is an expense and was passed through to the KPFD even though
it exceeded the amount estimated and budgeted.
NOTE 3 — DETAILED NOTES ON ALL FUNDS
A. Deposits and investments
As of December 31, 2014 the government had the following:
Weighted Average
Fair Value Maturities (Years)
Local Government Investment Pool
Total Invested Cash Equivalents $80,193 N/A
Interest rate risk Interest rate risk is the risk that changes in interest rates will adversely
affect the fair value of an investment. The PPFD does not have an investment policy, but
manages its exposure to declines in fair value by limiting investing only in the State of
Washington's Local Government Investment Pool (LGIP).
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Pasco Public Facilities District 2014 Basic Financial Statements
Credit risk. Credit risk is the risk that an issuer or other counterparty to an investment will
not fulfill its obligations. The PPFD does not have an investment policy, but manages its
exposure to credit risk by limiting investing only in the State of Washington's LGIP.
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. The PPFD does not have an
investment policy, but manages its exposure to concentration of credit risk by limiting
investing only in the State of Washington's Local Government Investment Pool. The LGIP
invests in a variety of governmentally issued securities.
Custodial credit risk — deposits. This is the risk that in the event of a bank failure, the
governments' deposits may not be returned. The PPFD does not have a deposit policy, but
manages its exposure to custodial risk by investing 100% of its fund in the State of
Washington's Local Government Investment Pool and therefore does not maintain any
deposits in a bank.
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 parry. The PPFD does not
have a custodial credit risk policy, but manages its exposure by investing 100% of its funds in
the State of Washington's Local Government Investment Pool.
B. Receivables and payables
Taxes receivable. The PPFD received November and December 2014 sales tax distributions
from the State of Washington in January and February 2015, respectively. The State receives
the sales tax, and then distributes the appropriate portion of the tax the following month to the
local governmental entities. As receivables are recognized when earned, the sales taxes from
underlying sales transactions are recognized as receivables. Per the inter -local agreement,
100% of the sales tax received is owed to KPFD. Sales taxes are received on the last day of
the month, creating a payable which is then paid to KPFD during the next month.
NOTE 4 — PRIOR PERIOD CORRECTION OF AN ERROR
For 2013 entity -wide and fund statements, only November sales taxes receivable were
accrued. Since the PPFD is a pass-through entity with regards to sales taxes, the 2013
understatement of $32,863 in both accrued receivables and payables, no change to the 2013
ending equity resulted. Therefore, no restatements of beginning net position or fund balance
were required for the current financial statements.
For 2013 fund statements, deferred inflows were not accrued to offset the December taxes
receivable, in accordance with the 31 -day revenue recognition period stipulated in the
PPFD's footnotes. Since neither the taxes nor deferred revenues were accrued, no restatement
of beginning fund balance was required.
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Pasco Public Facilities District 2014 Basic Financial Statements
NOTE 5 — CHANGE IN APPLICATION OF ACCOUNTING PRINCIPLE
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.
In 2013, the City considered revenues to be available if they were collected within 31 days of
the end of the "current" fiscal period. For the 2014 financial statements, a 60 -day revenue
recognition period is being applied. However, because any increase in sales taxes receivable
are off -set by taxes payable, no restatements of beginning fund balance are required.
NOTE 6 - OTHER INFORMATION
A. Risk Management
The Pasco Public Facilities District owns no property and does not hire any employees.
Therefore, the PPFD does not carry any insurance other than maintaining coverage for
officials' errors and omissions. In 2014, there were no policy coverage changes, claims, nor
settlements.
B. Related organization
City of Pasco. Pursuant to RCW 35.57 (the "City PFD Act") the Pasco Public Facilities
District was formed and created by City of Pasco Ordinance No. 3558 on July 15, 2002,
coextensive with the boundaries of the City of Pasco, with the powers and authority set forth
in the City PFD Act.
All corporate powers of the PPFD are exercised by or under the authority of the PPFD Board;
and the business, property and affairs of the PPFD are managed under the direction of the
PPFD Board, except as may be otherwise provided in the Charter. The PPFD operates
independently from the City of Pasco.
The PPFD contracts with the City of Pasco to administer its accounting operations, manage
its cash and provide organizational administrative support. Sales tax proceeds are received by
the City for the benefit of the PPFD. The City Treasurer disburses funds on behalf of the
PPFD and invests any surplus amounts commingled with City investments. Separate
accounts are maintained within the City to designate and hold separately amounts on behalf
of the PPFD.
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