HomeMy WebLinkAbout2016 ACFR COMPREHENSIVE ANNUAL
FINANCIAL REPORT
CITY OF PASCO, WASHINGTON
FOR THE FISCAL YEAR ENDED
DECEMBER 31, 2016
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Prepared by:
Finance Department
Richa Sigdel-Director
Citta of Pasco, "Washington 2o16 Comprehensive Annual Financial Report
TABLE OF CONTENTS
INTRODUCTORY SECTION
Letterof Transmittal ............................................................................................ 1
OrganizationalChart ........................................................................................... 6
Directory of City Officials and Management Team........................................................ 7
FINANCIAL SECTION
Independent Auditor's Report ................................................................................. 8
Management's Discussion and Analysis .................................................................... 12
Basic Financial Statements
Government Wide Financial Statements
Statement of Net Position........................................................................................... 24
Statement of Activities..................................................................................... 25
Fund Financial Statements
Balance Sheet—Governmental Funds......................................................................................... 26
Statement of Revenues, Expenditures and Changes in Fund Balances—Governmental Funds.. 27
Reconciliation of Statement of Revenues, Expenditures and Changes in Fund Balance of
Governmental Funds to the Statement of Net Activities............................................. 28
Statement of Revenues, Expenditures and Changes in Fund Balances—Budget and Actual-
GeneralFund.............................................................................................. 29
Statement of Net Position-Proprietary Fund............................................................ 30
Statement of Revenues, Expenses and Changes in Net Position—Proprietary Funds.............. 31
Statement of Cash Flows—Proprietary Fund........................................................... 32
Statement of Net Position—Fiduciary Funds............................................................ 33
Statement of Changes in Net Position—Fiduciary Funds................................................ 34
Notes to the Financial Statements...............................................................................35
Required Supplementary Information
Firemen's OPEB Fund/Other LEOFF 1 OPEB....................................................... 88
Schedule of Proportionate Share of the Net Pension Liability -All State Plans.................. 89
Schedule of Employer Contributions - All State Plans................................................ 90
Schedule of Employer and Other Contributions—Fire Pension Plan ............................... 91
Schedule of Changes in Net Pension Liability—Fire Pension Plan.................................... 92
Combining and Individual Fund Statements
Combining Balance Sheet—Nonmajor Other Governmental Funds ................................ 94
Combining Statement of Revenues, Expenditures and Changes in Fund Balance-
Nonmajor Other Governmental Funds ................................................................. 95
Combining Balance Sheet—Nonmajor Special Revenue Funds ................................... 96
Combining Statement of Revenues, Expenditures and Changes in Fund Balance-
Nonmajor Special Revenue Funds...................................................................... 100
Combining Balance Sheet—Nonmajor Debt Service Funds.......................................... 104
Combining Statement of Revenues, Expenditures and Changes in Fund Balance-
Nonmajor Debt Service Funds......................................................................... 105
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Citta of Pasco, "Washington 2o16 Comprehensive Annual Financial Report
TABLE OF CONTENTS (continued)
Statement of Revenues, Expenditures and Changes in Fund Balance— Budget to Actual
Major Construction Fund................................................................................ 106
Schedule of Revenues and Expenditures—Budget to Actual—Nonmajor Other Governmental
Funds ..................................................................................................... 107
Combining Statement of Net Position—Nonmajor Internal Service Funds........................ 109
Combining Statement of Revenues, Expenses, and Changes in Net Position—
Nonmajor Internal Service Funds...................................................................... 110
Combining Statement of Cash Flows—Nonmajor Internal Service Funds................................ 111
Combining Statement of Net Position—Fiduciary Funds............................................. 113
Combining Statement of Changes in Net Position—Fiduciary Funds............................... 115
Combining Statement Assets and Liabilities—Agency Funds....................................... 116
STATISTICAL SECTION
Financial Trends
NetPosition by Component.................................................................................................... 120
Changesin Net Position............................................................................................................. 121
Governmental Activities Tax Revenues by Source....................................................... 123
Fund Balances of Governmental Funds................................................................................... 124
Changes in Fund Balances of Governmental Funds................................................................ 125
Revenue Capacity
Assessed Value of Taxable Property .......................................................................................... 126
B&O Taxes by Type/Property Tax Rates .................................................................................. 127
Taxable Retail Sales/Principal Property Taxpayers........................................................... 128
Principal B&O Taxpayers .................................................................................... 129
Top Ten Industries that Generate Sales Tax.............................................................. 130
Property Tax Levies and Collections...................................................................................... 131
Debt Capacity
Ratios of Outstanding Debt by Type/Ratio of General Bonded Debt Outstanding....................... 132
LegalDebt Margin.............................................................................................................. 133
Direct and Overlapping Governmental Activities Debt................................................ 134
Waterworks Utility Debt Service Coverage................................................................................. 135
Demographic and Economic Information
Demographic and Economic Statistics.......................................................................................... 136
PrincipalEmployers...................................................................................................... 137
Non Agriculture Wage and Salary Workers.............................................................. 138
BuildingPermits............................................................................................. 139
Operating Information
Full Time Equivalent City Government Employees by Function...................................... 140
Operating Indicators by Function......................................................................... 141
BuildingPermits............................................................................................. 142
Capital used by Function................................................................................... 143
Waterworks Utility Customers ............................................................................. 144
Waterworks Utility Rates................................................................................... 145
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Citta of Pasco, "Washington 2oi6 Comprehensive Annual EinancialR.eport
STATE REQUIRED SCHEDULES
Schedule 9— Schedule of Long-Term Liabilities......................................................... 148
Schedule 15 — Schedule of State Financial Assistance....................................................... 149
Schedule 16— Schedule of Expenditures of Federal Awards............................................... 150
Notes to Schedule of Expenditures of Federal Awards................................................ ..... 151
Schedule 19 - Labor Relations Consultants.................................................................. 153
Schedule 21 —Local Government Risk Assumption....................................................... 154
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City of Pasco, 'Washington 2oi6 Comprehensive AnnuaCFinanciaCReporL 3 t
F 0 CITY MANAGER (509)54S-3404 1 Fax (509) 545-3403
F'(), Box 293, (525 North 3rdAvenue I P;),L:Li,V4'ashinginn 99301 ) wU.w.pa.co-wak,guw
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May 30, 2017
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, 2016. State statute and debt covenants require the City to issue an
audited CAFR annually.
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, management
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's
financial statements in conformity with Generally Accepted Accounting Practices (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's financial statements have been audited by the State's Auditor's Office (SAO). The goal
of the SAO audit is to provide reasonable third-party assurance that the financial statements of the
City for the fiscal year ended December 31,2016 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's financial statements for the fiscal year ended December 31, 2015 are fairly
presented in conformity with GAAP. The SAO's report is presented as the first component of the
financial section of this report.
In addition to the independent financial statement audit for the year ended December 31, 2015, the
City underwent a Single Audit. This is mandated for agencies expending federal grant funds in excess
of$500,000 during the year,which the City did. 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
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City of Pasco, 'Washington 2o16 Comprehensive AnnuaCFinanciaCReport
(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 Franklin County, in south-central Washington. This area is also
known as the Mid-Columbia region of the Pacific Northwest. The City encompasses approximately
34 square miles, 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 2010 census population for the City of Pasco was 59,781 and the 2010 Tri-Cities Metropolitan
Area population was approximately 253,340. For 2016, Office of Financial Management estimated
the City's population at 70,560. This represents over an 18% increase in Pasco's population since
2010.
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. Under Washington law, Council members have been elected
for four-year overlapping terms through citywide elections; however, because of 2016 litigation in
the Federal District Court of Eastern Washington regarding voting rights,Judge Lonny R. Suko ruled
that all City Council positions would be up for election in 2017. In said ruling, districts 1, 3,4, and 6
will be elected to four-year terms, and districts 2, 5, and the at-large seat will be initially elected to
two-year terms followed by four-year terms thereafter. The ruling further provides that each of the
district seats is to be decided only by voters residing within the district while the at-large seat will be
voted on a city-wide basis.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.
LOCAL ECONOMY
The City's economy is largely 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("Center"), a 240-acre industrial
park designed for the food processing industry,was constructed in 1995. The Center provides food
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City of Pasco, "Washington 2016 Comprehensive AnnnaCE'inanciaCReport
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,where it is treated and then used to irrigate crops. These storage ponds
allow processors to operate year round. Since completion, several large food processors have
developed plants,which 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. In 2013, Grimmway Farms acquired property for a carrot processing building and a carrot
soaker shed, at a cost in excess of$4 million, in anticipation of employing 30 people working three
8-hour shifts for four months out of the year. In 2015, Grimmway increased their production by
creating two 8-hour shifts (16 hours) Monday through Saturday, from July 1 to
December. Grimmway completed a major expansion which doubled their plant size. This expansion
created approximately 200 new jobs.
In 2016, AutoZone Inc., a Fortune 500 company, announced plans to build a 443,819-square-foot
distribution center and truck maintenance yard in Pasco. This operation is expected to create 200 new
jobs when operational.
A major catalyst for the 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.
Congress passed the National Defense Authorization Act of 2015,which authorized the establishment
of the Department of Energy's most significant Manhattan Project properties within a Manhattan
Project National Park, including Hanford. President Obama signed the National Defense
Authorization Act into law on December 19, 2014. The Defense Act establishes the Manhattan
Project National Historical Park as a unit of the National Park Service no later than one year after
enactment.
The Department of Energy's Pacific Northwest National Laboratory,located in Richland,is only one
of ten such facilities. Its focus is on using science and technology to meet national priorities. It has
teamed with several local economic development partners to develop and market the region's first
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City of Pasco, Washington 2016 Comprehensive AnnuaCFnanciaCReport
technology-based research area known as the Tri-Cities Research District. Currently, 1,700-acre
District's 70+tenants employ more than 8,000 people.
A commitment to tourism as a means of economic diversification has been a focus 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 currently leased to Northwest
Baseball Ventures I, LLC, owners of the Tri-City Dust Devils and a single A affiliate of the San
Diego Padres 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.
Washington State has a robust $4.4 billion wine industry, ranking it only second nationally for
premium wine production. Known as the"Heart of Washington Wine Country,"Tri-Cities region is
home to over 200 wineries within a 60-mile radius.
Lourdes Hospital is located in Pasco, and is the third largest employer in Franklin County, with 804
employees. In 2016, the Hospital celebrated 100 years of responding to the healthcare needs of the
community. It now has 10 locations and more than 200 providers offering numerous inpatient and
outpatient services.
Pasco is also the home of the region's only international airport,train and bus depots. The Tri-Cities
Airport(PSC) is the largest airport in the Southeastern Washington and Northeastern Oregon region
and the fourth largest air carrier airport in the state of Washington with connections to eight major
hubs. The airport now connects this vibrant community to the world, with regular flights to Seattle,
Portland, San Francisco, Minneapolis/St. Paul, Denver, Salt Lake City, Los Angeles, Las Vegas and
Mesa, Arizona.
SUMMARY OF CURRENT AND FUTURE ECONOMIC OUTLOOK
The Franklin County-Benton County area has experienced rapid and sustained growth which has
outdistanced the growth rates of both Washington State and the United States. This region's 10-year
and 40-year average growth has remained level at 2.7%per annum. Washington State's 10-year and
40-year average growth of 1.3% and 1.8%, respectively, have not kept pace. The United States' 10-
year and 40-year average growth lags even further behind, with 0.9% and 1.0%, respectively. The
trend for this region appears to remain on track.
In 2016,the Pasco economy was stable and continued to grow. The city issued 2,220 building permits
representing approximately $255 million in construction value. Of the total permits, 387 were for
new single-family residences,which equates to$95 million in construction value. The average value
of a new home in Pasco was approximately$245,000, in 2016. This is an increase of 17% increase
in home value compared to $210,000 in 2010. This growing economy was reflected in Standard &
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City of Pasco, 'Washington 2oi6 Comprehensive AnnnaCE'inanciaCReport
Poor's rating the 2013 utility bond issue as AA-/Stable and the 2015 General Obligation bond issue
as AA-/Stable.
In 2012, the county's residents approved a three-tenths of one percent sales tax increase devoted to
criminal justice.This revenue source funded a new four-person Street Crimes unit in the City's Police
Department; paid for the replacement of the City's Municipal Court building; and funded the
construction of the City's new Police Community Services Building, which broke ground in the
spring of 2015, and was completed in spring of 2017.
In late 2012, the City annexed 608 acres assessed at $121,000,000. Because of timing issues, 2014
was the first year during which the City received property taxes from the annexation. In the spring
of 2015, the City annexed the Road 80 area. This annexation covers 688 acres assessed at
$118,000,000.
In 2014, the Pasco School District completed Franklin STEM (Science, Technology, Engineering,
and Math) Elementary School, at a cost of$9,500,000. This year, construction has been completed
on three schools: Marie Curie STEM Elementary School and McClintock STEM Elementary School,
both at a cost of$20,000,000. Additionally, Delta High School, a STEM school serving Pasco,
Kennewick and Richland,was constructed in Pasco, at a cost of$7,500,000. The heavy investment
in school infrastructure is indicative of the growth Pasco has sustained and looks to continue, as well
as the area's commitment to providing a well-educated and technologically savvy workforce capable
of meeting the future needs of regional, national, as well as international employers. In 2016, the
school district was the largest employer in the City, with 2,015 employees.
On September 19, 1955, Columbia Basin College held its first classes in the temporary quarters of
the former Pasco Naval Air Station. From the initial enrollment of 272 students to more than 7,000
students today, Columbia Basin College continues meet the higher education needs of residents in
Benton and Franklin Counties. The College is in the process of building student housing,which will
provide 45 units to house 125 students; with goal of building 375 single, double, and quad units in
future. In 2016, the college was the third largest employer in Franklin County,with 511 employees.
ACKNOWLEDGMENTS
The preparation of this report would not have been possible without the efficient and dedicated
service of the entire Finance Department,as well as the cooperation and assistance provided by other
divisions and departments. 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.
Respectfully submitted,
David Zabell, City Manager
Richa Sigdel, Finance Director
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City of Pasco, -Washington 2016 Comprehensive AnnuaC E'inanciaCReport
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City of Pasco, 'Washington 2016 Comprehensive AnnuaCFinanciaCReport
Directory of City Officials and Managers
As of December 31, 2016
Elected Officials Term Expires
Mayor
Matt Watkins 12/31/2019
Council Members
Rebecca M. Francik 12/31/2019
Chi Flores 12/31/2017
Robert Hoffinan 12/31/2017
Tom Larsen 12/31/2017
Saul Martinez 12/31/2017
Al Yenney 12/31/2019
Due to 2016 litigation in the Federal District Court of Eastern Wasbington regarding voting rights,all City Council
positions will be up for election in 2017.
Administrative Officials
City Manager David Zabel]
Deputy City Manager Stanley R. Strebel
Public Works Director Ahmad Qayoumi
Administrative& Community Services Director Richard G. Terway
Community Development Director Rick White
Finance Director Richa Sigdel
Fire Chief Robert W. Gear
Police Chief Robert W. Metzger
Municipal Court Judge David L. Petersen
ManaEement Team
Customer Service Manger Stephanie Brock
Information Services Manager Jesse Rice
Recreation Manager Brent Kubalek
Facilities Manager Dan Dotta
Court Administrator Dorothy R. French
Personnel Manager Colleen Chapin
Inspection Services Manager Troy Hendren
Captain-Patrol Ken Roske
City Engineer Dan Ford
Public Works Superintendent John Millan
Division Manager Vacant
Division Manager Paul Rhoads
Division Manager Derek Wiitala
Division Manager Steve Brewer
Construction Manager Kent McCue
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Cit-V of Pasco, 'Washington 2oi6 Comprehensive AnnuaCFnanciaCReporV INDEPENDENT t
AUDITOR'S ' • ON
FINANCIAL STATEMENTS
my of Pasco
Franklin County
January 1, 2016 through December 31, 2016
Mayor and City Council
City of Pasco
Pasco,Washington
REPORT ON THE FINANCIAL STATEMENTS
We have audited the accompanying financial statements of the governmental activities, the
business-type activities, each major fund and the aggregate discretely presented component unit
and remaining fund information ofthe City of Pasco,Franklin County,Washington,as of and for
the year ended December 31, 2016, and the related notes to the financial statements, which
collectively comprise the City's basic financial statements as listed on page 14.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements
in accordance with accounting principles generally accepted in the United States of America; this
includes the design, implementation, and maintenance of internal control relevant to the
preparation and fair presentation of financial statements that are free from material misstatement,
whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express opinions 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 ofthe United States. Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditor's judgment,
including the assessment of the risks of material misstatement of the financial statements,whether
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City of Pasco, 'Washington 2016 Comprehensive AnnuaCFnanciaCReport
due to fraud or error. In making those risk assessments, the auditor considers internal control
relevantto the City's preparation and fair presentation ofthe financial statements in orderto design
audit procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the City's internal control. Accordingly, we express no such
opinion. An audit also includes evaluating the appropriateness o faccounting policies used and the
reasonableness of significant accounting estimates made by management,as well as evaluating the
overall presentation ofthe financial statements.
e believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opini o ns.
Opinion
In our opinion, the financial statements referred to above present fairly, in all material resp ects,
the respective financial position of the governmental activities, the business-type activities, each
maj or fund and the aggregate di scretel y pre sented component unit and remaining fund information
ofthe City of Pasco, as of December 31, 2016, and the respective changes in financial position
and,where applicable, cash flows thereof,and the respective budgetary comparison for the General
Fund, far the year then ended in accordance with accounting principles generally accepted in the
United States of America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
management's discussion and analysis on pages 16 through 26, information on postemployment
benefits otherthan pensions on page 90 and pension plan information on pages 91 through 94 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 B oard who
considers it to be an essential part of financial reporting for placing the basic financial statements
in an appropriate operational, economic or historical context. We have applied certain limited
procedures to the required supplementary information in accordance with auditing standards
generally accepted in the United States of America,which consisted o f inquiries of management
about the metho ds o f preparing the information and comparing the information for consistency
with management's responses to our inquiri es,the basic financial statements,and other knowledge
we obtained during our audit of the basic financial statements. We do not express an opinion or
provide any assurance on the information because the limited procedures do not provide us with
sufficient evidence to express an opinion or provide any assurance.
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City of Pasco, 'Washington 2016 Comprehensive AnnuaCFnanciaCReport
Supplementary and Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the City's basic financial statements. The accompanying Schedule of
Expenditures of Federal Awards is presented far purposes of additional analysis as required by
Title 2 US Code of Federal Regulations (CFR)Part 200, Uniform Administrative Requirements,
Cost Principles, and Audit Requirements fir Federal Awards (Uniform Guidance). This schedule
is not a required part o f the basic financial statements. Such information is the responsibility o f
management and was derived from and relates directly to the underlying accounting and other
records usedto prepare the basic financial statements. The information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and certain additional
procedures, including comparing and reconciling such information directly to the underlying
accounting and other records used to prepare the basic financial statements or to the basic financial
statements themselves, and other additional procedures in accordance with auditing standards
generally accepted in the United States of America. ha our opinion,the information is fairly stated,
in all material respects,in relation to the basic financial statements taken as a whole.
OTHER REPORTING REQUIRED BY GOVERNMENT AUDITIN
STANDARDS
In accordance with C7overnme nt Auditing Standards, we have also issued our report dated
September 26, 2017 on our consideration of the City's intemal control over financial reporting and
on our tests of its compliance with certain provisions of laws, regulations, contracts and grant
agreements and other matters. The purpose ofthat 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
providean opinion oninternal control over financial reporting or on compliance. Thatreportis an
integral part of an audit performed in accordance with Government Auditing Standards in
considering the City's internal control over financial reporting and compliance.
Pat McCarthy
State Auditor
Olympia,WA
September 26, 2017
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City of Pasco, 'Washington 2oi6 Comprehensive AnnualFinancial Report
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, 2016. 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 and deferred inflows of the City of Pasco exceeded liabilities and deferred
outflows at the close of the most recent fiscal year by$407,516. Of this amount, $52,847
may be used to meet the government's ongoing obligations to the citizens and creditors.
• The City of Pasco's total net position improved by $23,507. Approximately 27% of the
increase in net position is due to increases in business-type activities and 73% is due to
governmental-type activities. Significant portion of the increase is attributable to capital
grants and contributions received from developers in the form of donated infrastructure.
• As of the close of the current fiscal year,the City of Pasco's governmental funds reported
combined ending fund balances of$35,212, a decrease of$366 in comparison with the
prior year.
• At the end of the current fiscal year, the unrestricted, unassigned fund balance for the
City's General Fund was $14,191, which also represents 36% of total General Fund
expenditures. There was an excess of revenues over expenditures of$3,226; transfers in
totaling$192 and transfers out totaling $7,041. Of the transfers out, $6,236 was for one-
time expenditures (to cover construction project capital spending)and$805 for cash flow
and other subsidies to Special Revenue funds.
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 Position presents information on all of
the City of Pasco's 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 City of Pasco 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
11
City of Pasco, 'Washington 2o16 Comprehensive Annna,[EtnanciaCReport
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 fees and charges (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 24-25 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 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 thirty-one individual governmental funds including the general fund.
Information is presented separately in the governmental fund balance sheet and in the
governmental fund statement of revenues, expenditures and changes in fund balances for the
general fund, which is a major fund as defined by the Governmental Accounting Standards
Board. In 2016,the General Fund and the Construction Fund were the only major governmental
funds. Data from the other funds are combined into a single, aggregate presentation. Individual
fund data for each of these non-major governmental funds is provided in the form of Combining
Statements elsewhere in this report.
12
City of Pasco, 'Washington 2016 Comprehensive Annna[E nanciaCRepor
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 24 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. An Internal service fund is 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 30.
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
funds except for agency funds which only show assets and liabilities. The basic fiduciary fund
financial statements can be found starting on page 33 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 35.
Government-wide Overall 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 City of Pasco, assets and deferred inflows exceeded liabilities
and deferred outflows by $407.53 million at the close of the most recent fiscal year. The largest
portion of the City of Pasco's net position$354.19 million(87%)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 noted 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. 4%
($16.90 million) of the City of Pasco's net position represents resources that are subject to
external restrictions on how they maybe used. The remaining$36.44 million of unrestricted net
13
City of Pasco, 'Washington 2oi6 Comprehensive AnnualFnanciaCPxport
position (9%) may be used to meet the government's ongoing obligations to citizens and
creditors.
City ofPasco's Net Position(in millions)
Governmental Activities Business-T e Activities Total Primary Government
2016 2015 2016 2015 2016 2015
NonCapital assets $ 51.73 $ 53.18 $ 25.02 $ 26.78 $ 76.75 79.96
Capital as sets 223.53 205.53 180.87 176.76 404.40 382.29
Total as sets 275.26 258.71 205.89 203.54 481.15 462.25
Deferred Outflows 3.41 2.81 0.57 0.43 3.98 3.24
Current liabilities 7.85 6.41 4.32 4.95 12.17 11.36
Noncurrent liabilities 24.14 23.38 40.72 43.83 64.86 67.21
Total liabilities 31.99 29.79 45.04 48.78 77.03 78.57
Deferred Inflows 0.49 2.62 0.08 0.27 0.57 2.89
Net position:
Investment in capital assets 212.71 198.28 141.48 139.18 354.19 337.46
Restricted 16.90 20.40 - - 16.90 20.40
Unrestricted 16.58 10.43 19.86 15.74 36.44 26.17
Total net position $ 246.19 $ 229.11 $ 161.34 $ 154.92 $ 407.53 $ 384.03
At the end of the current fiscal year, the City of Pasco is able to report positive balances in all
three categories of net position, both for 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.
As mentioned in the financial highlights, The City's net position increased by $23.50 million,
during the current fiscal year. All of the increase in the City's net position was attributable to
capital grants and contributions received from developers in the form of donated infrastructure
related to residential and commercial development and state and federal grants received for street
construction and improvement projects, and, water and sewer infrastructure improvements.
14
City of Pasco, 'Washington 2o16 Comprehensive AnnuaCTinanciaCReport
City of Pasco's Change in Net Position(in millions)
Governmental Activities Business-Ty e Activities Total Prima Government
2016 2015 2016 2015 2016 2015
Revenues
Program revenues:
Charges for services $ 23.50 $ 20.21 $ 20.98 $ 46.97 $ 41.19
Operating grants&contributions 1.32 1.77 0.01 0.03 1.33 1.80
Capital grants&contributions 25.05 23.93 7.19 6.09 32.24 30.02
General revenues:
Property taxes 7.93 7.26 7.93 7.26
Other taxes 26.80 26.36 26.80 26.36
Investment income and miscellaneous 2.26 1.99 0.15 0.10 2.41 2.09
Total revenues 86.86 81.52 30.82 27.20 117.68 108.72
Program expenses:
General government 8.72 8.24 8.72 8.24
Public safety 29.38 24.93 29.38 24.93
Transportation 16.63 16.37 16.63 16.37
Economic environment 5.62 5.14 5.62 5.14
Culture and recreation 8.93 8.11 8.93 8.11
Interest on long term debt 0.50 0.44 0.50 0.44
Water 9.48 9.10 9.48 9.10
Sewer 8.57 8.17 8.57 8.17
Process water reuse 3.17 2.52 3.17 2.52
Storm water 1.53 1.17 1.53 1.17
Irrigation 1.65 1.78 1.65 1.78
Total expenses 69.78 63.23 24.40 22.74 94.18 85.97
Changes in net position 17.08 18.29 6.42 4.46 23.50 22.75
Transfers - - - - - -
Total changes in net position $ 17.08 $ 18.29 $ 6.42 $ 4.46 $ 23.50 $ 22.75
Governmental Activities. Governmental activities decreased the City of Pasco's net position by
($0.98). The decrease is attributable to the investment in Public Safety and the consequential
increase in expenses. In 2016, the city added 11 positions: 5 in the Police Department, 3 in the
Fire Department, 2 in the Administrative & Community Services Department, and 1 Human
Resources.Additionally, in 2015,the City also approved additional 18 positions, 8 of which were
Public Safety hires.
Tax revenues for the City have been increasing at a steady race,reflecting a healthy and growing
economy. Property sales tax revenue increased by 9%, Sales tax revenue increased by 9%, and
Excise tax revenue increased by 18%. During the same period utility tax revenue decreased by
12%, primarily due to timing of revenue recognition during year-end. Additionally, Cable TV
and Telephone utility tax revenues have continued their historical decline due to nontaxable data
services available through cellular services, bundling of services by telephone and cable
providers that result in reduced charges and taxable revenue for each service, and replacement of
traditional landlines with cellular phones.
15
City of Pasco, 'Washington 2o16 Comprehensive .annual TinanciaCReport
GOVERNMENTAL ACTIVITES —REVENUES BY SOURCE
Sources of Revenues 2016 Sources of Revenues 2015
Investment
income and Charges for Investment
miscellaneous services income and
3% 27% miscellaneous Charges for
3% services
25
Other taxes Other taxes
31% 32%
Operating Operating
grants&
grants&
contributions
contributions 2%
1%
Property Property taxes
taxes 9% Capital grants
9% Capital &
grants& contributions
contributions 29
29
GOVERNMENTAL ACTIVITIES —EXPENSES AND PROGRAM REVENUES
30.00
25.00
20.00
N
Z
0
15.00
CJ_
G
10.00
5.00
L -77
e� CD a� ion Gte t�
0
Cie <Go LJ�� 4114-
Q.
a�
■2016 Expense ■2016 Revenue ■2015 Expense ■2015 Revenue
Business-Type Activities. 27% of the increase in the City of Pasco's net position is related to
business-type activities. The total increase in net position for business-type activities was$6,420.
16
City of Pasco, Washington 2o16 Comprehensive AnnuaCEtnancial Report
Charges for services increased by$2,490 (12%). Effective, January 1, 2016,water consumption
rates increased by 5%, Sewer rates increased by 9%, and Irrigation rates increased by 5%.
UTILITY ACTIVITIES —EXPENSES AND PROGRAM REVENUES COMPARISON
12.00
10.00
Ln 8.00
2
0
J
6.00
4.00
2.00
Water Sewer Process Water Stormwater Irrigation
Reuse
■2016 Expense ■2016 Revenue ■2015 Expense ■2015 Revenue
Financial Analysis of the City'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.
As of the end of the 2016, the City of Pasco governmental funds reported combined ending fund
balances of$35,212, which is a decrease of$0.37 from the prior year. Approximately 84% of
this total amount, $13,912 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 2016,unassigned
fund balance of the general fund was $14,190. As a measure of the general fund's liquidity, it
17
City of Pasco. "Washington 2016 Comprehensive AnnuaCFinanciaCReport
may be useful to compare unrestricted, unassigned fund balance to total expenditures. This
represents 36% of total expenditures.
The fund balance of the City of Pasco's General Fund decreased by $2,656 during 2016, which
is 6.2% of current year revenues. Overall revenues increased by $1,626 (5%) and total
expenditures increased by $1,672 (4%). General fund tax revenues increased by $799 (3%).
Property taxes increased approximately(3%)due to new construction and steady valuations, and
sales taxes increased by $1,241 (9%)with the continued steady economic recovery.
The City was able to increase the number of approved personnel positions, by adding eleven
positions. The General Fund revenues of $42,970 exceeded expenditures of $39,744 before
transfers in/out.
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 from the internal service funds. Unrestricted net position of
the utility fund at the end of 2016 was $16,733. 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 2016, the utility is well positioned as it has current assets of$21,799
available to meet its current liability obligations of$4,239,resulting in a working capital ratio of
5. The utility showed a loss before contributions and transfers of$1,105. This was more than
offset by $7,189 in capital contributions. The City continues to invest in new infrastructure due
to the growth of its population, as well as due to the need to address aging infrastructure issues.
The City has a meter and service replacement program with the goal of replacing its meters on
an average of once every ten years. Local improvement districts (LIDS) are used by the utility to
supplement the ratepayers' participation in capital construction.
General Fund Budgetary Highlights
The legal level of appropriation is at the fund level. The budget by function is shown to provide
information that is more detailed. There were increases to the original budget by $1,057 in
expenses, and $2,057 in transfer out appropriations. $521 of the increase was for General
Government, $289 of the increase was for Public Safety, and $1,000 of the increase was for the
construction of the Police Community Services facility. Actual spending was less than the
original appropriation.
Actual revenues were 102% of the original revenue budget and 98% of the final revenue budget.
Revenues are generally estimated low in order to protect the city from unanticipated funding
fluctuations. Actual total revenues exceeded actual total expenditures in by$3,226.
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, 2016 amounts to $401,320 (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
18
City of Pasco, 'Washington 2o16 Comprehensive AnnnaC E'inanciaCR.eport
increase of $18,004 for governmental activities and an increase of $6,779 for business-type
activities. $24,565 and $5,201 in noncash capital contributions were made to governmental and
business-type activities, respectively, in 2016.
Major capital asset activity during the current fiscal year included the following:
• Capital spending in governmental funds for 2016 was $8,170: $206 for general
governmental purposes, $5,606 for public safety purposes, $518 for economic
environment, $995 for transportation purposes and $845 for culture and recreation
purposes. The largest projects for 2016 was $5,217 spending for the Police Station(total
project budget of$9,518).
• Construction spending in the utility fund (major component of business-activities) for
2016 was $8,278. Construction spending was $2,636 for water, $5,479 for sewer, very
small amounts for PWRF, storm water and irrigation. The largest water project was
Oregon Ave Waterline $1,182 in 2016 (total project budget was $1,100). The largest
sewer project was for the Wastewater Treatment Plant Primary Clarifier#3 which spent
$4,709 in 2016 (total project budget of$5,052).
Additional information on the City of Pasco's capital assets can be found in note 5 starting on
page 52 of this report.
City of Pasco's Capital Assets at Year-End(in millions)
(Net of Depreciation)
Governmental Activities Business-Type Activities Total Primary Government
2016 2015 2016 2015 2016 2015
Land $ 15.37 $ 14.36 $ 2.73 $ 2.53 $ 18.10 $ 16.89
Construction in process 16.28 13.21 9.09 3.94 25.37 17.15
Buildings and structures 23.95 25.46 34.31 36.84 58.26 62.30
Other improvements 3.24 3.05 0.06 - 3.30 3.05
Machinery and equipment 7.54 6.52 7.09 7.64 14.63 14.16
Infrastructure 157.15 142.92 124.52 120.06 281.67 262.98
Total capital assets $ 223.53 $ 205.52 $ 177.80 $ 171.01 $ 401.33 $ 376.53
Long-term Debt. At the end of 2016, the City of Pasco had total outstanding debt of $49.48
million. Of this amount, $10.43 million comprised debt backed by the full faith and credit of the
government. $38.99 million of the City of Pasco bonded debt represents bonds secured primarily
by specified revenue resources (e.g. revenue bonds). The city also has $0.05 million in special
assessment bonds.
Additional information on the City of Pasco's long-term liabilities can be found in note 7 starting
on page 55 of this report.
19
City of Pasco, 'Washington 2o16 Comprehensive AnnuaCFnanciaCR.eport
City ofPasco's Bonds and Notes
(in millions)
Governmental Activities Business-Ty eActivities Total Priinary Government
2016 2015 2016 2015 2016 2015
General Obligation Bonds $ 10.43 $ 11.89 $ 3.38 $ 13.81 $ 11.89
Special Assessernent Bonds 0.05 0.16 0.05 0.16
Loans&Notes 0.01 0.08 0.51 6.94 0.52 7.02
Revenue Bonds 35.10 38.29 35.10 38.29
$ 10.49 $ 12.13 $ 38.99 $ 45.23 $ 49.48 $ 57.36
Economic Factors and Next Year's Budgets and Rates (amounts not in thousands)
In 2016, the Pasco economy was stable and continued to grow. The city issued 2,220 building
permits representing approximately$255 million in construction value. Of the total permits, 387
were for new single-family residences, which equates to $95 million in construction value. The
average value of a new home in Pasco was approximately $245,000, in 2016. This stable
economy was reflected in Standard&Poor's rating the 2015 utility bond issue as AA-/Stable and
the 2015 General Obligation bond issue as AA-/Stable.
In 2012, the county's residents approved a new three-tenths of one percent sales tax increase
devoted to criminal justice. This new revenue source funded a new four-person Street Crimes
unit in the city's police department; paid for the replacement of the city's Municipal Court
building; and funded the construction of the city's new Police Community Services Building,
which broke ground in the spring of 2015, and was completed in the spring of 2017.
In late in 2012, the city annexed a part of Franklin County. 2014 was the first year the city
received the additional property taxes from the annexation. The annexed area was in a part of the
county already surrounded by the city. In the spring of 2015, the city annexed the Road 80 area.
This annexation covers 688 acres and represents an addition of property assessed at
$118,000,000.
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 homes built over the past decade.Every year the utility updates its six-year rate plan.Annual
rate increases are scheduled. 2016's rate increases are 5% for water consumption; sewer's rate
increase is 9%; the ambulance rate increase is 15% (from$12.65 to $14.55 per month). The City
is conducting a rate study for Storm water and Irrigation services during 2017.
Requests for Information
This financial report is designed to provide a general overview of the City of Pasco's finances
for all those with an interest in the government's finances. Questions concerning any of the
information provided in this report or requests for additional financial information should be
addressed to the Finance Director, PO Box 293, Pasco, WA 99301.
20
City of Pasco, -Washington 2016 Comprehensive AnnuaC EmanciaCReport
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21
City of Pasco, -Washington 2016 Comprehensive AnnuaC E'inanciaCReport
BASIC FINANCIAL STATEMENTS
22
City of Pasco, 'Washington 2o16 Comprehensive AnnuaCFnanciaCR.eport
Statement of Net Position
December 31,2016
Governmental Business-Type Component Unit
Pasco Public
Activities Activities Total Facility District
ASSETS
Current assets:
Cash&cash equivalents $ 22,461,122 $ 14,469,874 $ 36,930,996 $ 42,829
Restricted cash:
Program,grant,donations 320,956 320,956
Customer deposits 278,102 426,573 704,675
Unspent bond proceeds - 4,117,289 4,117,289
Debt covenants 264,751 884,035 1,148,786
Investments 16,267,368 2,853,095 19,120,463
Receivables(net ofalloovances):
Taxes 3,995,206 3,995,206 81,929
Customers 1,940,492 2,047,059 3,987,551
Grants 323,436 10,937 334,373
Due from Fiduciary Funds 275,000 275,000
Due from other governments 100,000 100,000
Prepaids 3,146
hrventones 196,767 196,767
Total current assets 46,226,433 25,005,629 71,232,062 127,904
Noncurrent assets:
Restricted cash 455,173 1,263,478 1,718,651
Restricted investments-Debt/IBNR/LID 1,397,189 1,636,761 3,033,950
Special assessments 543,591 180,627 724,218
Net Pension Asset 3,016,107 3,016,107
Joint Ventures 81,047 81,047
Capital assets not being depreciated:
Land 15,373,198 2,725,435 18,098,633
Construction work in progress 16,282,189 9,086,415 25,368,604
Capital assets net of accunnilated depreciation
Buildings and structures 23,948,558 34,306,159 58,254,717
Other arprovements 3,236,787 56,947 3,293,734
Machinery and equipment 7,543,841 7,089,046 14,632,887
Infiasnacture 157,147,154 124,524,643 281,671,797
Total noncurrent assets 229,024,834 180,869,511 409,894,345
Total assets 275,251,267 205,875,140 481,126,407 127,904
DEFERRED OUTFLOWS OF RESOURCES
Pension related 3,414,120 572,519 3,986,639
LIABILITIES
Current liabilities:
Accounts payable 2,795,591 830,187 3,625,778 110,033
IBNR payable from restricted assets 1,680,670 1,680,670
Due to other fiords 275,000 275,000
Deposits payable from restricted assets 178,103 426,573 604,676
Accrued interest payable from restricted assets - 173,974 173,974
Compensated absences-current 2,106,348 - 2,106,348
Loans due to other governments-current 11,930 114,689 126,619
Bonds-current 800,387 2,772,418 3,572,805
Total current liabilities 7,848,029 4,317,841 12,165,870 110,033
Noncurrent liabilities:
Compensated absences 384,200 234,011 618,211
Net OPEB obligation 4,086,203 4,086,203
Notes payable 40,309 393,753 434,062
Bonds payable(net ofprerniarm 9,966,960 37,154,731 47,121,691
Net pension obligation 9,666,795 2,937,825 12,604,620
Total noncurrent liabilities 24,144,467 40,720,320 64,864,787
Total liabilities 31,992,496 45,038,161 77,030,657 110,033
DEFERRED INFLOWS OF RESOURCES - -
Pension related 487,327 78,774 566,101
NET POSITION
Net investment in capital assets 212,712,141 141,470,343 354,182,484
Restricted for:
Cemetery(nonexpendable) 486,429 486,429
Prepaid iters - - 3,146
Program,grant,donations 34,956 34,956
Streets and boulevards 6,986,140 6,986,140
Litter and housing abatement 561,571 561,571
Park development 2,152,337 2,152,337
Capital improvement 5,927,245 5,927,245
Economic development 114,353 114,353
Debt repayment/guarantee 634,814 634,814
Conanitted for:
Landfill 407,344 407,344
Special revenue funds 3,769,477 3,769,477
Constructionprojects 225,500 225,500
Draestricted 12 173,257 19,860,381 32,033,638 14,725
Total Net Position $ 246,185,564 $ 161,330,724 $ 407,516,288 $ 17,871
The notes to the financial statements are an integral part ofthis statemenr
23
City of Pasco, 'Washington 2o16 Comprehensive AnnuaCFnanciaCReport
Statement of Activities
For the Year Ended December 31,2016
Net Revenue(Expenses)and Changes in Net Position
Program Revenues Priamy Government
Charges for Operating Capital
Services,Fines& Grants and Grants and Governmental Business-Type Component Unit
Expenses Licenses Contributions Connrbutions Activities Activities Total Pasco Public
Functional Programs Facility District
Primary Government:
Goverrawntal activities:
General go-ranuent $ 8,716,441 $ 4,740,997 $ - $ - $ (3,975,444) $ - $ (3,975,444) $ -
Public safety 29,373,810 6,309,905 463,806 - (22,600,099) - (22,600,099) -
Transportation 16,627,294 3,771,494 161,321 02 23,700,108 11,005,629 - 11,005,629 -
Natural&economic envvonmern 5,617,654 6,021,806 531,300 278,497 1,213,949 - 1,213,949 -
Cuhrseandrecreation 8,929,402 2,556,162 164,987 1,074,398 (5,133,855) - (5,133,855) -
Interest onlong term debt 504,038 (504,038) (504,038)
Total governmental activities 69,768,639 23,400,364 1,321,414 25,053,003 (19,993,858) (19,993,858)
Business-type activities:
Water 9,475,449 9,480,798 - 2,350,970 2,356,319 2,356,319 -
Imgawn 1,646,426 1,301,273 - 993,454 648,301 648,301 -
Sev,er 8,571,343 7,958,262 - 3,129,523 2,516,442 2,516,442 -
Process Water Reuse 3,172,408 3,347,578 - - 175,170 175,170 -
StormWater 1,531,054 1,515,109 10,937 714,849 709,841 709,841
Total business-type activities 24,396,680 23,603,020 10,937 7,188,796 6,406,073 6,406,073
Total primary governmev $ 94,165,319 $ 47,003,384 $ 1,332,351 $ 32,241,799 (19,993,858) 6,406,073 (13,587,785) -
Component units
Pasco Public Facility District
Total component units $ 539,656 $ 20,000 $ $ (519,656)
General Revenues:
Taxes:
Property taxes 7,928,041 7,928,041
Sales taxes 14,886,729 14,886,729 483,114
B&O taxes 9,027,827 9,027,827
Excise taxes 2,884,722 2,884,722
Intergovermental 1,961,197 1,961,197
hrvestment income and miscellaneous 300,357 145,721 446,078 387
Transfers
Total general revenues and transfers 36,988,873 145,721 37,134,594 (36,155)
Change in net position 16,995,015 6,551,794 23,546,809 (36,155)
Net position-beginning(Adjusted- 229,190,549 154,778,930 383,969,479 54,026
See Note 15)
Net position-ending $ 246,185,564 $ 161,330,724 $ 407,516,288 $ 17,871
The notes to the financial statements are an integral part ofths statement.
24
City of Pasco, 'Washington 2oi6 Comprehensive AnnuaCFnanciaCReport
Balance Sheet
Governmental Funds
December 31,2016
Other
General Construction Governmental Total
ASSETS
Cash&cash equivalents $ 4,852,772 $ 1,363,642 $ 13,570,618 $ 19,787,032
Restricted cash
Program,grant,donation 34,956 2,519 37,475
Customer deposits 267,427 10,675 278,102
Cemetery endowement 455,173 455,173
Debt service 264,751 264,751
Investments 6,931,276 5,954,510 12,885,786
Receivables(net of allowances):
Taxes 3,572,998 422,208 3,995,206
Customers 1,138,180 18,000 749,693 1,905,873
Interfridloans 587,517 587,517
Grants 9,910 130,775 182,751 323,436
Special assessments&bans 543,591 543,591
Due from other fiords 275,000 275,000
Due from other governments 100,000 100,000
Total assets 17,082,519 1,512,417 22,844,006 41,438,942
LIABILITIES
Accounts payable 1,059,902 1,286,917 403,855 2,750,674
Interfind loans payable 1,161,975 1,161,975
Due to other fiords 275,000 275,000
Deposits payable from restricted assets 167,427 10,676 178,103
Total liabilities 1,227,329 1,286,917 1,851,506 4,365,752
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue 1,221,976 638,998 1,860,974
FUND BALANCES(DEFICITS)
Nonspendable
Cemetery permanent fiord 486,429 486,429
Restricted
Program,gun,donation 34,956 34,956
Street and boulevard 6,986,140 6,986,140
Litter&housing abatement 561,571 561,571
Park development 2,152,337 2,152,337
Capital improvements 5,927,245 5,927,245
Economic development 114,353 114,353
Debt repayment/guarantee - 634,814 634,814
Cormndtted
Landfill chi ms 407,344 407,344
Special revenue funds 3,769,477 3,769,477
Constructionprojects 225,500 225,500
Unassigned 14,190,914 (278,864) 13,912,050
Total hind balances 14,633,214 225,500 20,353,502 35,212,216
Total liabilities,deferred inflows of resources
and fund balances $ 17,082,519 $ 1,512,417 $ 22,844,006
Amounts reported for governmental activities in the statements of net position
are different because:
Long-term assets used in governmental activities are not financial resources and
therefore are not reported in the government Suds. 223,019,104
Deferred pension outflows are not available to pay for current period expenditures and
therefore are not reported in the govenrnental finds. 3,374,082
Long-term liabilities are riot due and payable in the current period and therefore
are not reported in the funds.Proceeds from new debt and repayments of exisiti ng
debts are recorded as resources and expenditures for find reporting but are additions
and reductions of liabilities for government wide reporting. (25,684,406)
Deterred inflows and proceeds from asset sales in govermimental funds is susceptible to N
accrual therefore are not reported in the Statement ofNet Activities.Other expenses are
susceptible to finL accrual and are reported in the Statement ofNet Activities but not
in the governmental finds. (854,347)
Internal Service fluids are used by management to charge the costs of certain
activities to individual finds.The assets and liabilities of some rtnemal service Lads
are included in the governmental activities in the statement of net position hnerfimd bans
between governmental activities are excluded. 11,118,915
Net position of governmental activities(see page 24) $ 246,185,564
The notes to the financial statements are an integral part of this statemcnt.
25
City of Pasco, 'Washington 2o16 Comprehensive AnnuaCFnanciaCReport
Statement of Revenues,Expenditures and Changes in Fund Balances
Governmental Funds
For the Year Ended December 31,2016
General Other
Fund Construction Governmental Total
REVENUES
Taxes $ 30,987,198 $ 3,740,123 $ 34,727,321
Licenses and permits 2,042,239 473,823 2,516,062
hrtergovernmentalrevenue 2,069,451 343,019 2,867,845 5,280,315
Charges for services 6,318,087 9,219,740 15,537,827
Fines and forfeitures 748,324 235,467 983,791
Miscellaneous revenue 805,049 26,880 2,124,439 2,956,368
Total revenues 42,970,348 369,899 18,661,437 62,001,684
EXPENDITURES
Current:
General government 8,556,646 10,648 - 8,567,294
Public safety 20,883,970 769,244 5,551,396 27,204,610
Transportation 1,799,127 192,030 2,155,845 4,147,002
Natural&economic environment 1,782,897 - 3,662,557 5,445,454
Culture and recreation 5,257,241 14,120 2,859,566 8,130,927
Capital outlay:
General government 131,216 74,657 - 205,873
Public safety 133,499 5,428,025 44,201 5,605,725
Transportation 963,253 32,059 995,312
Natural&economic environment 518,400 - 518,400
Culture and recreation - 845,130 - 845,130
Debt service:
Principal 776,140 515,000 1,291,140
Interest 423,184 80,854 504,038
Total expenditures 39,743,920 8,815,507 14,901,478 63,460,905
Excess of revenues over(under)expenditures 3,226,428 (8,445,608) 3,759,959 (1,459,221)
OTHER FINANCING SOURCES(USES)
Sale of assets 955,431 54,680 1,010,111
Transfers in 191,668 8,432,675 1,603,539 10,227,882
Transfers out (7,040,858) (3,187,024) (10,227,882)
Total other financing sources(uses) (5,893,759) 8,432,675 (1,528,805) 1,010,111
Net change in fund balances (2,667,331) (12,933) 2,231,154 (449,110)
Fund balances-beginning(Adjusted- 17,300,545 238,433 18,122,348 35,661,326
See Note 15)
Fund balances-ending $ 14,633,214 $ 225,500 $ 20,353,502 $ 35,212,216
The notes to the financial statements are an integral part of this statement.
26
City of Pasco, 'Washington 2o16 Comprehensive AnnuaCfinancial Report
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 31,2016
(Continued from prior page)
Net change in fund balances-total governmental funds $ (449,110)
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 position they are reported net of depreciation as a capital asset.Capital assets contributed
by private developers do not provide current resources and are not reported as revenues in the funds. 18,691,550
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. 1,291,140
Revenues reported in the statement of activies that do not provide current financial resources
are not reported as revenues in the funds. (813,129)
Some expenses such as for compensated absences,pension expense,gain on disposal of assets,etc.
are reported in the Statement ofNet Activities do not the use of current financial resources and,therefore, (2,356,690)
are not 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 certain activity is reported with governmental
activities. Interfimd transfers between govennental funds are elnninated in the Statement of Net Activities. 631,254
Change in net position of governmental activities(see page 25) $ 16,995,015
The notes to the financial statements are an integral part of this statement.
27
City of Pasco, 'Washington 2o16 Comprehensive AnnuaCFinanciaCReport
Statement of Revenues, Expenditures, and Changes in Fund Balances-Budget to Actual
General Fund
For the Year Ended December 31,2016
Original Final Variance to
Budget Budget Actual Final Budget
REVENUES
Taxes $30,533,000 $ 31,863,000 $ 30,987,198 $ (875,802)
Licenses and permits 1,738,400 1,843,400 2,042,239 198,839
Intergovernmentalrevenue 2,122,148 2,151,648 2,069,451 (82,197)
Charges for services 6,217,614 6,268,414 6,318,087 49,673
Fines and forfeitures 1,116,600 1,119,800 748,324 (371,476)
Miscellaneous revenue 454,340 493,440 805,049 311,609
Total revenues 42,182,102 43,739,702 42,970,348 (769,354)
EXPENDITURES
Current:
General government 8,975,169 9,495,749 8,556,646 (939,103)
Public safety 21,196,908 21,484,901 20,883,970 (600,931)
Transportation 1,765,221 1,806,118 1,799,127 (6,991)
Natural&economic environment 1,819,279 1,811,710 1,782,897 (28,813)
Culture and recreation 4,960,020 4,961,346 5,257,241 295,895
Capital outlay:
General government 111,700 245,700 131,216 (114,484)
Public safety 78,000 158,000 133,499 (24,501)
Debt service:
Principal 1,117,436 1,117,436 776,140 (341,296)
Interest 434,239 434,239 423,184 (11,055)
Total expenditures 40,457,972 41,515,199 39,743,920 (1,771,279)
Excess of revenues over(under)expenditures 1,724,130 2,224,503 3,226,428 (2,540,633)
OTHER FINANCING SOURCES(USES)
Debt proceeds and other miscellaneous 1,010,000 - -
Sale of Capital Asset 1,125,000 1,125,000 955,431 (169,569)
Transfers in 143,000 143,000 191,668 48,668
Transfers out (6,201,000) (7,201,000) (7,040,858) 160,142
Total other financing uses (3,923,000) (5,933,000) (5,893,759) 39,241
Net change in fund balances (2,198,870) (3,708,497) (2,667,331) (2,501,392)
Fund balances-beginning(Adjusted See Note
15) 10,566,361 17,289,115 17,300,545 11,430
Fund balances-ending S 8,367,491 S 13,580,618 $ 14,633,214 $ (2,489,962)
Interlimd loan activity included for budget purposes but not
included in Statement of Revenues,Expenditures and Changes
in Fund Balance -
Fund balances-ending $ 14,633,214
The notes to the financial statements are an integral part of this statement.
28
City of Pasco, 'Washington 2oi6 Comprehensive AnnuaCFnanciaCReport
Statement of Net Position
Proprietary Funds
December 31,2016
Water/Sewer Internal
Utility Service
ASSETS
Current assets:
Cash and cash equivalents $ 12,768,035 $ 4,375,929
Restricted cash equivalents:
Claim incuured but not reported(IBNR) 283,481
Customer deposits 426,573
Unspent bond proceeds 4,117,289
Revenue bond covenants 884,035
Irrvestments 1,348,423 4,886,254
Receivables(net of allowances):
Customers 2,047,059 34,619
Grants 10,937 -
Inventory 196,767
Total current assets 21,799,118 9,580,283
Noncurrent assets:
Restricted cash-bond reserve 1,263,478 -
Restricted investments-bond covenants&IBNR 1,636,761 1,397,189
Special assessments 180,627 -
Interfimd ban 540,505
Capital assets not being depreciated:
Land 2,725,435 -
Construction work in progress 9,086,415
Capital assets net of accumulated depreciation
Buildings and structures 34,306,159 -
Other Improvements 56,947 -
Machinery and equipment 5,346,012 6,446,995
Infrastructure 124,524,643
Total noncurrent assets 179,126,477 8,384,689
Total assets 200,925,595 17,964,972
DEFERRED OUTFLOWS
Pension related 572,519 40,038
LIABILITIES
Current liabilities:
Accounts payable 750,949 124,155
IBNR payable from restricted assests 1,680,670
Other liabilities
Customer deposits payable from restricted assets 426,573
Accrued interest payable from restricted assets 173,974
Compensated absences-current portion - -
Loans due to other govemments-current portion 114,689
Revenue bonds-current portion 2,772,418
Total current liabilities 4,238,603 1,804,825
Noncurrent liabilities:
Compensated absences 234,011 -
Loans due to other governments 393,753 -
Revenue bonds payable(net of premium) 37,154,731 -
Net pension obligation 2,937,825 205,454
Total noncurrent liabilities 40,720,320 205,454
Total liabilities 44,958,923 2,010,279
DEFERRED INFLOWS
Pension related 78,774 5,509
NET POSITION
Net investment in capital assets 139,727,309 6,446,995
Unrestricted 16,733,108 9,542,227
Total net position $ 156,460,417 $15,989,222
Adjustment for the net effect of the current year
activity between the internal service fiords and the
enterprise fiord 4,870,307
Net position ofbusiness-type activities(see page 24) $ 161,330,724
The notes are an integral part of this statement.
29
City of Pasco, 'Washington 2o16 Comprehensive AnnuaCFnanciaCReport
Statement of Revenues,Expenses, and Changes in Net Position
Proprietary Funds
For the Fiscal Year Ended 12/31/2016
Business Type
Water/Sewer Internal
Utility Service
OPERATING REVENUES
Permits $ 158,565 $ -
Charges for services 23,419,634 6,060,483
Miscellaneous 24,821 3,437,876
Total operating revenues 23,603,020 9,498,359
OPERATING EXPENSES
Depreciation 6,816,267 965,588
Salaries and wages 3,097,783 264,527
Personnel benefits 2,278,217 138,506
Supplies 1,556,387 730,345
Services 9,604,889 6,349,953
Total operating expenses 23,353,543 8,448,919
OPERATING INCOME 249,477 1,049,440
NONOPERATING REVENUES(EXPENSES)
Investment income 92,280 92,375
Investment loss (5,815)
Rents and leases 53,441 -
Grant 10,937 -
Gain on sale of capital assets - (36,860)
Interest expense (1,511,022) -
Total nonoperatingrevenues(expenses) (1,354,364) 49,700
Income(loss)before contributions
and transfers (1,104,887) 1,099,140
Capital contributions 7,188,796 -
Transfers in - -
Transfers out - -
Changes in net position 6,083,909 1,099,140
Net position-beginning(Adjusted-See Note 15) 150,376,508 14,890,082
Net position-ending 156,460,417 $ 15,989,222
Changes in net position 6,083,909
Adjustment for the net effect the current year
activity between the internal service fiords and the
enterprise fiord 467,886
Change in net position of business-type activities
(page 25) $ 6,551,794
The notes to the financial statements are an integral part of this statement.
30
City of Pasco, 'Washington 2016 Comprehensive AnnuaCFnanciaCReport
Statement of Cash Flows
Proprietary Funds
For the Fiscal Year Ended 12/31/2016
Water/Sewer hrtemal
Utility Service
CASH FLOW FROM OPERATING ACTIVITIES
Receipts from customers $ 22,448,714 $ 9,463,740
Payments to employees (4,568,800) (367,378)
Payments to suppliers (11,305,877) (6,466,627)
Net cash provided by operating activities 6,574,037 2,629,735
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: -
Noncapital grants 10,937
Rents and leases 53,441
Net cash provided from noncapital financial activities 64,378
CASH FLOW FROM CAPITAL AND RELATED FINANCING ACTIVITIES
Proceeds from sale of assets - (38,859)
Acquisition of capital assets (8,210,082) (1,521,840)
Principal paid to refinance existing debt
Principal paid on existing debt (8,711,997)
Interest paid on debt (1,691,803)
Bond proceeds received 3,959,939
Payments received from notes and loans -
Transfers in(out)for capital -
Capital charges 1,987,462
Capital grant and contribution proceeds (10,937)
Net cash used by capital and related financing activities (12,677,418) (1,560,699)
CASH FLOWS FROM INVESTING ACTIVITIES
Investments sold and earnings 2,041,448 88,558
Investments purchased - (2,994,100)
Net cash provided from investing activities 2,100,165 (2,408,937)
Net increase in cash (3,938,838) (1,339,901)
Beginning cash 23,398,248 5,999,311
Ending cash $ 19,459,410 $ 4,659,410
RECONCILATION OF OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES
Net Operating Income $ 249,477 $ 1,049,440
ADRJSTMENTS TO RECONCILE OPERATING
INCOME TO NET CASH PROVIDED(USED)BY
OPERATING ACTIVITIES
Depreciation 6,816,267 965,588
Changes in assets and liabilities
Decrease in customer receivables (1,208,154) (34,619)
Decrease in inventories -
Increase in accounts payable (144,601) 613,671
Decrease in accounts customer deposits payable 53,846
Decrease in compensated absences 22,431
(Increase)decrease in pension deferred outflow (144,026) (5,107)
Increase(decrease)in pension obligation 1,124,952 57,665
Increase(decrease)in pension deferred inflow (196,155) (16,903)
Net cash provide by operating activities $ 6,574,037 $ 2,629,735
NON CASH ACTIVITIES
Capital contributions 5,201,334 -
Total noncash activities $ 5,201,334 $
The notes to the financial statements are an integral part of this statement.
31
City of Pasco, 'Washington 2oi6 Comprehensive AnnuaCFinanciaCReport
Statement of Net Position
Fiduciary Funds
December 31, 2016
Pension and Other
Post-Employment
Benefits Agency
ASSETS
Cash&cash equivalents $ 572,714 $ 462,809
Receivables
Interfund Loan 33,954
Investments
Federal Agency 36,469
Mutual Funds 4,462,412
Total assets 5,105,549 462,809
LIABILITIES
Due to others - 462,809
Total liabilities - $ 462,809
NET POSITION
Held in trust for pension benefits/other
post employment benefits $ 5,105,549
The notes to the financial statements are an integral part of this statement.
32
City of Pasco, 'Washington 2oi6 Comprehensive AnnuaCFinanciaCReport
Statement of Changes in Net Position
Fiduciary Funds
For the year ended December 31, 2016
Pension and Other
Post-Employment
Benefits
ADDITIONS
Taxes $ 58,192
Investment earnings
Interest 64,519
Dividends 25,594
Net increase in market value of investments 496,054
Total Additions 644,359
DEDUCTIONS
Pension benefits 118,053
Medical premiums 188,120
Administrative expenses 11,700
Total deductions 317,873
Change in net position 326,486
Net position-beginning(adjusted-see note 15) 4,779,063
Net position-ending $ 5,105,549
The notes to the financial statements are an integral part of this statement.
33
City of Pasco, 'Washington 2o16 Comprehensive AnnuaCT nanciaCReport
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the City of Pasco have been prepared in conformity with generally
accepted accounting principles (GAAP) as applied to governmental units. The Governmental
Accounting Standards Board (GASB) is the accepted standard setting body for establishing
governmental accounting and financial reporting principles.The significant accounting policies
are described below.
A. Reporting Entity
The City of Pasco was incorporated on May 4, 1891 and operates under the laws of the
state of Washington applicable to a Non-Charter Code City with a Council/Manager
form of government. As required by the generally accepted accounting principles the
financial statements present City of Pasco as a primary government unit. The
component unit discussed below is included in the City reporting entity because of the
significance of its operational relationship with the City of Pasco.
The Pasco Public Facility was created pursuant to Chapter 35.57 of the Revised Code
of Washington for the purposes of acquiring, constructing, operating and financing one
or more regional centers through cooperative and joint ventures with the City of
Kennewick. The PFD is discreetly presented in the component unit column in the
government-wide financial statements to emphasize that is a legally separate entity.
B. Basis of Presentation- Government-Wide and Fund Financial Statements
The government-wide financial statements (i.e., the statement of net position and the
statement of activities) report information on all of the non-fiduciary activities of the
primary government and its component unit. Although fiduciary funds are excluded
from the government-wide financial statements, effective in 2015, all pension
components of fiduciary funds are required to be reported in the government-wide
financial statements. For the most part, the effect of inter-fund activity has been
removed from these statements. Governmental activities,which normally are supported
by taxes and intergovernmental revenues, are reported separately from business-type
activities, which rely to a significant extent on fees and charges for support.
The statement of activities demonstrates the degree to which the direct expenses of a
given function or segment is offset by program revenues. Direct expenses are those that
are clearly identifiable with a specific function or segment. Our policy is to allocate
indirect costs to a specific function or segment. Program revenues include 1) charges to
customers or applicants who purchase, use, or directly benefit from goods, services, or
privileges provided by a given function or segment and 2) grants and contributions that
are restricted to meeting the operational or capital requirements or a particular function
34
City of Pasco, 'Washington 2oi6 Comprehensive AnnuaCFinanciaCReport
or segment. Taxes and other items not properly included among program revenues are
reported instead as general revenues.
As a general rule the effect of the inter-fund activity has been eliminated from the
government—wide financial statements. Exceptions to this rule include business taxes
the utility pays to the general fund, activities in internal service funds in which outside
parties are engaged and certain other service functions between funds,that if eliminated
may misrepresent the cost date reported for various other functions of the government.
Separate fund financial statements are provided for governmental funds, proprietary
funds, and fiduciary funds. Major individual governmental funds and major individual
enterprise funds are reported as separate columns in the fund financial statements.
The City of Pasco reports the following major governmental funds:
• The General Fund: The General (or current expense) Fund is the City of Pasco's
primary operating fund. It accounts for all financial resources of the general
government, except those required or elected to be accounted for in separate fund.
• The Construction Fund: the Construction Fund is a capital project fund used to
account for significant construction and capital acquisition related to governmental
activities.
The City of Pasco reports the following major proprietary fund:
• The Water/Sewer Fund: the Water/Sewer Fund accounts for water, sewer, water
reuse, storm water and irrigation utility activities.
Additionally, the City of Pasco reports the following fund types:
• Special Revenue funds are used to account for specific revenue sources that are
restricted, committed, or assigned to expenditures for a particular purpose.
• Debt Services funds are used to account for the resources accumulated and
payments made for principal and interest on long—term general obligation debt of
governmental funds.
• Permanent funds are used to report resources that are legally restricted to the extent
that only earnings, not principal, may be used for purposes that support the
government's program.
• Internal Service funds are used to account for equipment replacement and
operations, central stores, as well as medical/dental insurance services provided to
other departments on a cost-reimbursement basis.
• Pension Trust funds are used to account for the sources and uses of funds to meet
35
City of Pasco, 'Washington 2oi6 Comprehensive AnnuaCTinanciaCPxport
the pension benefit and other post-employment benefit obligations made to firemen
covered under the Plan prior to the creation of the Law Enforcement Officers and
Fire Fighters' (LEOFF)pension system in 1970.
• Agency funds are used to report resources held by the city in a purely custodial
capacity on behalf of the Animal Control Authority and on behalf of all employees
for Payroll Clearing and those employees with Flexible Spending Accounts.
C. Measurement Focus, Basis of Accounting
Government-wide financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting, as are the proprietary fund and
fiduciary fund financial statements. Revenues are recorded when earned and expenses
are recorded when a liability is incurred, regardless of the timing of related cash flows.
Property taxes are recognized as revenues in the year for which they are levied. Grants
and similar items are recognized as revenue as soon as all eligibility requirements
imposed by the provider have been met.
Governmental fund financial statements are reported using the current financial
resources measurement focus and the modified accrual basis of accounting. Revenues
are considered to be available when they are collectible within the current period or
soon enough thereafter to pay liabilities of the current period. For this purpose,the City
considers revenues to be available if they are collected within 60 days of the end of the
current fiscal period. The City considers property taxes as available if they are collected
within 60 days after year end. Expenditures generally are recorded when a liability is
incurred, as under accrual accounting. However, debt service expenditures, as well as
expenditures related to compensated absences and claims and judgements 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 period. All other revenue items are considered to be measurable and available
only when cash is received by the City.
Proprietary fund financial statements are reported using the economic resources
measurement focus and full-accrual basis of accounting. Revenues are recorded when
earned and expenses are recorded when a liability is incurred regardless of the timing
of the cash flows. Proprietary funds distinguish operating revenues and expenses from
non-operating items. Operating revenues and expenses generally result from providing
services 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
36
City of Pasco, 'Washington 2016 Comprehensive AnnuaCFinanciaCReport
expenses not meeting this definition are reported as non-operating revenues and
expenses.
D. Budgetary Information
1. Scope of Budget
Annual appropriated budgets are adopted for the general and special revenue and on a
modified accrual basis. Budgets for debt service and capital project funds are adopted at
the level of the individual debt issue or project and for fiscal periods that correspond to
the lives of debt issues or projects. The City also adopts appropriated budgets for
proprietary, debt service, and internal service funds. All budgets are adopted at the fund
level.
Appropriations for all funds lapse at year-end. Budgets for capital outlays are re-
appropriated until the purpose of the appropriation has been accomplished or abandoned.
2. Amending the Budget
The City Manager is authorized to transfer budgeted amounts within the funds.
However, any revisions that alter the total appropriations of a fund, or which affects the
number of authorized employee positions, salary ranges, hours, or other conditions of
employment must be approved by the City Council.
When City Council determines it is in the best interest of the City of Pasco to increase or
decrease the appropriation for a particular fund, it may do so by ordinance approved by
one more than the majority after holding a public hearing.
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.
Excess of Expenditures over Appropriations
There were no funds that exceeded approved budget appropriations.
Deficit Fund Net Position
The LID Loan Fund, a non-major debt service fund of the City, ended the year with a
negative fund balance of($278,864). The negative fund balance is a result of required
accounting practices. Previously most LID's were financed with a bond issue which is
not reflected on the balance sheet of the governmental fund. The current LID's are
financed with interfund loans which are recorded as a loan payable on the balance sheet
and GASB requires future principal payments to be recorded as deferred inflows on the
balance sheet. Both items are recorded on the liability side of the balance sheet with only
the LID assessments receivable on the asset side. The result is almost always a negative
net position for the fund. The deficit fund balance will be corrected as the loans are paid
off.
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City of Pasco, 'Washington 2o16 Comprehensive Annual Etnancial Report
E. Assets, Liabilities, Deferred Inflows, Deferred Outflows, Fund Balance/Net Position
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 fair value for the items held. 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 3.
2. Receivables and payables
Taxes receivable consist of property taxes, sales 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. Detailed information on property tax can
be found in Note 4.
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.
Other receivables. As of December 31, 2016 the only major fund of the city to have an
allowance for uncollectible accounts was the General Fund. The gross Municipal Court
receivable for the City is $10,443,881 of which$9,534,219 is not expected to be collected
(allowance for uncollectible accounts) and thus only the net amount of $909,662 is
included in the financial statements. The estimate for uncollectible is based on historical
collections and the fact that in recent years' lawmakers have removed the City's ability
to hold citizens accountable for nonpayment of fines. Non-major funds receivable
balances include the applicable allowance for uncollectible accounts (which relates to
ambulance services) of$100,000.
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City of Pasco, -Washington 2o16 Comprehensive Annual Etnancial Report
Special assessments and unavailable revenue. Governmental funds report unavailable
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 inflows reported in
the governmental funds were as follows:
Unavailable Revenue—Property Taxes $ 192,313
Unavailable Revenue—Special Assessments/Loans 543,591
Unavailable Revenue—Municipal Court 909,662
Unavailable Revenue—Other 215,408
Total Unavailable Revenues 1 860 974
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.
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 21% of the outstanding receivable at December 31,
2016.
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 principal and unbilled principal. Deferred assessments consist of
unbilled special assessments that are liens against the property benefitted. As of
December 31, 2016, $14,212.32 of delinquent assessments were outstanding in
Governmental Funds and $33,045.33 were outstanding in the Business Funds (Sewer).
Assessed property owners are responsible for debt repayment. The city 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.
39
City of Pasco, 'Washington 2oi6 Comprehensive AnnuaCFinanciaCReport
3. Amounts Due to and from Other Funds and Governments,Interfund Loans and
Advances Receivable
Activities between funds that are representative of lending/borrowing arrangements
outstanding at the end of the fiscal year are referred to as either interfund loans
receivable/payable or advances to/from other funds. All other outstanding balances
between funds are reported as due to/from other funds. Any residual balances
outstanding between the governmental activities and business-type activities are
reported in the government-wide financial statements as internal balances. A separate
schedule of interfund loans receivable is furnished in Note 6.
4. Inventories
There are currently no inventories in governmental funds. Inventories in proprietary
funds are valued using a floating average of costs, which approximates market value.
5. Restricted Assets and Liabilities
These accounts contain resources for construction and debt service, including current
and delinquent special assessments receivable, in the enterprise fund. The current
portion of related liabilities is shown as Payables from Restricted Assets. Additional
information on Restricted Assets can be found in Note 3.
6. 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
depreciation 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 2016.
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City of Pasco, 'Washington 2016 Comprehensive Annual Etnancial Report
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 1 - 50
Infrastructure $5,000 5 - 50
7. Deferred Outflows/Inflows of Resources
In addition to assets, the statement of financial position will sometimes report a separate
section for deferred outflows of resources. This separate financial statement element,
deferred outflows of resources, represents a consumption of net position that applies to a
future period(s) and so will not be recognized as an outflow of resources
(expense/expenditure)until then.
In addition to liabilities, the statement of financial position will sometimes report a
separate section for deferred inflows of resources. This separate financial statement
element, deferred inflows of resources, represents an acquisition of net position that
applies to a future period(s) and so will not be recognized as an inflow of resources
(revenue)until that time.
The city has one type of item, unavailable revenues which arises only under a modified
accrual basis of accounting, which qualifies as a deferred inflow. Unavailable revenue is
reported only in the governmental funds balance sheet. The governmental funds report
unavailable revenues for 2016 as follows:
a. Uncollected property taxes levied.
b. Unbilled special assessments levied against benefited property for the cost of local
improvements. An allowance for uncollectible accounts is not necessary since the
assessments are liens against the property benefited.
c. Rain checks and gift certificates issued by the golf course and certain headstones and
liner sales by the cemetery which obligate the city to future services.
In addition to unavailable revenues, changes in pension assumptions and calculation
variables also create deferred inflows and deferred outflows. These are reported in the
enterprise funds and in the government wide level in the Statement of Net Position.
8. Compensated Absences
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City of Pasco, Uashinaton 2016 Comprehensive Annual Tinancial Report
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.
9. Pensions
For purposes of measuring the net pension liability, deferred outflows of resources and
deferred inflows of resources related to pensions,and pension expense, information about
the fiduciary net position of all state sponsored pension plans and additions to/deductions
from those plans' fiduciary net position have been determined on the same basis as they
are reported by the Washington State Department of Retirement Systems. For this
purpose, benefit payments (including refunds of employee contributions) are recognized
when due and payable in accordance with the benefit terms. Investments are reported at
fair value.
10. Long-term Obligations
In the government-wide statements and proprietary fund types in the fund financial
statements, long-term debt and other long-term obligations are reported as liabilities in the
applicable governmental activities, business-type activities, or proprietary fund type
statements of net position.
Bond premiums and discounts, 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.
In the fund financial statements, governmental fund types recognize bond premiums and
discounts, as well as bond issuance costs, during the current period. The face amount of
debt issued is reported as other financing sources. Premiums received on debt issuances
are reported as other financing uses. Issuance costs, whether or not withheld from actual
debt proceeds received, are reported as professional service costs.
11. Fund Balance and Fund Flow Policies
Fund balance of governmental funds is reported in various categories based on the nature
of any limitations requiring the use of resources for specific purposes. The government
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City of Pasco, Washington 2o16 Comprehensive Annual Tinancial Report
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 determine by formal action of the government's highest level of
decision-making authority. The city council is the highest level of decision making
authority for the government that can, by adoption of an ordinance prior to the end of the
fiscal year, commit fund balance. Once adopted, the limitation imposed by the ordinance
remains in place until a similar action is taken (the adoption of another ordinance) to
remove or revise the limitation.
Amounts in the assigned fund balance classification are intended to be used by the
government for specific purposes but do not meet the criteria to be classified as
committed. The council may also assign fund 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 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.
In the fund financial statements, governmental funds report restrictions of fund balance as
follows:
Nonspendable fund balance - includes amounts that are not in spendable form such as
inventory or are required to be maintained intact such as the principal of a permanent fund.
Restricted fund balance- includes amounts that can be spent only for the specific purpose
stipulated by external resource providers such as for grant providers, bondholders, higher
levels of government, or through enabling legislation.
Committed fund balance—includes amounts that can be used only for the specific purposes
determined by a formal action of the city council. Commitments may be changed or lifted
only by the City Council taking the same formal action that imposed the constraint
originally.
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.
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City of Pasco, 'Washington 2oi6 Comprehensive AnnuaCFnanciaCReport
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 position.
The governmental fund balance sheet includes a reconciliation between fund balance—total
governmental funds and net position — governmental activities as reported in the
government-wide statement of net position. One element of that reconciliation explains that
"Long-term 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 Asset Excluded from Fund Level:
Joint Venture $ 47,959
Land 14,363,583
Construction in process 13,212,181
Building 25,463,153
Other Improvements 3,052,003
Equipment 2,254,772
Infrastructure 142,917,795
Pension Assets 4,984,645
Current year change in pension asset (1,968,538)
Current year spending in construction work in progress 7,829,466
Current year capital purchases 340,975
Current year capital donations received 24,564,988
Current year increase in Joint Venture 33,088
Current year depreciation (14,076,966)
Net adjustment to add to government wide fund balance to arrive at
Net Position Governmental Activities $ 223,019,104
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City of Pasco, 'Washington 2016 Comprehensive Annual Tinancial Report
Another element of that reconciliation explains the 'Long-term liabilities are not due and payable in
the current and are not reported in the funds. The following show the detail of these liability
changes.
Beginning Balance of Long-Term Liabilities Excluded from Fund Level:
Compensated absences $ (2,106,348)
OPEB obligation (3,331,084)
Pension obligation (7,891,909)
Bonds payable (12,092,160)
Current year changes to pension obligation (1,569,432)
Current year principal payments reducing debt 1,306,527
Net adjustment to reduce government wide fund balance to arrive at
Net Position Governmental Activities $ (25,684,406)
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 position of governmental activities as reported in the government-wide
statement of activities. The first element of that reconciliation relates to capital activity as
follows:
Capital outlays for:
Land $ -
Construction in process 7,829,466
Machinery and equipment 340,975
Contributed capital assets 24,564,988
Current year depreciation (14,076,966)
Gain on Joint venture 33,088
Net capital activity $ 18,691,551
The second element of that reconciliation related to debt activity as follows
New Debt issued $ -
Debt repayment (1,306,527)
Net debt activity $ (1,306,527)
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City of Pasco, 'Washington 2016 Comprehensive Annual Tinancial Report
NOTE 3: DEPOSITS,INVESTMENTS AND RESTRICTED ASSETS
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 $22,190,883 on deposit with US Bank on
December 31, 2016. The FDIC insures those deposits up to $250,000. US Bank is required to
collateralize 10% of the remaining funds which is $2,219,088. The temporary custodial credit risk
for uncollateralized deposits at US Bank was $19,721,795 on December 31, 2016.
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).
As of December 31, 2016, the City's deposits and investments were as follows:
Fair Market Value Weighted Average
12/31/2016 Maturities (Years)
Local Government Investment Pool
Total Invested Cash Equivalents $ 38,988,493 N/A
Investments in Federal Agencies 22,190,883 2.36
Investment in Mutual Funds (Pension Trust) 4,462,412 N/A
Total Fair Value $ 65,641,788
Portfolio Weighted Average Maturity 2.36
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. The city's investment policy does not specifically address interest rate risk.
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City of Pasco, 'Washington 2o16 Comprehensive Annual Etnancial Report
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, 2016 the
City's investments in agency securities were all rated AAA. The LGIP is not registered with the
SEC and the fair value of the city's position in the pool is the same as the value of the pool shares.
The LGIP is regulated by the state of Washington's state finance committee. 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 at December 31, 2016 were as
follows:
ISSUER *FAIR VALUE AT 12/31/16 PERCENTAGE
Local Government Investment Pool $ 38,988,493 59.40%
SBA Participation 228,447 0.35%
Federal Farm Credit Bank 4,969,505 7.57%
Federal Home Loan Bank 2,004,119 3.05%
Federal Home Loan Mtg. Corporation 2,729,548 4.16%
FICO Strips 4,244,901 6.47%
Federal National Mortgage Association 1,979,236 3.02%
Resolution Funding Corporation 2,040,955 3.11%
Resolution Funding Corporation-Strips 3,994,172 6.08%
AmFunds Mutual Funds 4,462,412 6.80%
TOTAL $ 65,641,788 100%
*All investments were measured at Level 1, Quoted prices in active markets for identical assets or liabilities.
The following table depicts Weighted Average Maturity(WAM) for all City investments with
maturities.
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City of Pasco, 'Washington 2016 Comprehensive AnnuaCFinanciaCReport
Calculation of Weighted Average Maturity(WAM)
B C =B* D
Maturity Date #of Months to Maturity Value %of total WAM
10/1/2026 9.83 $ 36,469 0.16% 0.016155
2/1/2027 10 191,978 0.87% 0.086512
10/1/2017 0.8 1,992,272 8.98% 0.074516
6/8/2018 1.5 1,001,693 4.51% 0.067710
7/5/2018 1.6 1,983,002 8.94% 0.141191
7/27/2018 1.6 2,729,548 12.30% 0.194345
9/14/2018 1.8 994,231 4.48% 0.078406
12/27/2018 2.0 2,268,127 10.22% 0.204420
3/8/2019 2.3 1,002,426 4.52% 0.101639
6/13/2019 2.5 1,979,236 8.92% 0.222979
9/26/2019 2.8 1,976,774 8.91% 0.244971
10/15/2019 2.8 2,040,955 9.20% 0.260283
7/15/2020 3.6 2,007,711 9.05% 0.323899
10/15/2020 3.8 1,986,461 8.95% 0.342850
3.3 $ 22,190,883 100.00% 2.359875
Restricted assets.The corpus of permanent funds is included in restricted assets. The Water/Sewer
utility issued bond proceeds prior to 2016 for construction projects which were 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 from customers as deposits are also restricted. Restricted assets
(cash and investments) are composed of the following:
48
City of Pasco, 'Washington 2o16 Comprehensive AnnuaCFnanciaCReport
Temporary Permanent
Restrictions Restrictions
City View Cemetery Endowment $ $455,173
Program,grant, donations:
Recreation Donations 9,181
Bi-centennial Contribution 6,264
Drug Forfeit, Evidence, Federal Share 19,511
Claims incurred but not reported(IBNR) cash 283,481
Customer Deposits:
Governmental Funds Customer Deposits 278,102
Water/Sewer Customer Deposits 426,573
Unspent Bond Proceeds:
Water/Sewer Unspent Bond Proceeds 4,117,289
Debt Covenants:
Water/Sewer Debt Service account 884,035
Water/Sewer Debt Reserve account 1,263,478
LID Guarantee 100,000
LID Bonds and Loans 164,751
Restricted Investments:
Water/Sewer Debt covenants 1,636,761
Incurred But Not Reported(IBNR) 1,397,189
Totals $10,586,615 $455,173
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City of Pasco, 'Washington 2o16 Comprehensive AnnuaCFnanciaCReport
NOTE 4: PROPERTY TAX
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 1 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. The amount of taxes receivable at year-end that would be collected soon enough to be
available to pay liabilities of the current period is immaterial. Property tax collected in advance of
the fiscal year to which it applies is recorded as a deferred inflow and recognized as revenue of the
period to which it applies. No allowance for uncollectible tax is established because delinquent
taxes are considered fully collectible. Prior year tax levies were recorded using the same principle
and delinquent taxes are evaluated annually. The reported balances include tax payments from the
county received through December 31, 2016. Delinquent taxes totaled $192,313 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. Chapter 84.55.010 of the Revised Code of Washington limits the growth of non-voted
property taxes to the lesser of 1%per year, or the Implicit Price Deflator. Adjustments
for new construction and annexations are excluded from this calculation.
b. The Washington State Constitution limits the total regular property taxes to one percent
of assessed valuation or$10 per$1,000 of value. If the taxes of all districts exceed this
amount, each is proportionately reduced until the total is at or below the one percent
limit.
The City's regular levy for 2016 was $1.93672 per $1,000 on an assessed valuation of
$3,937,446,202. This resulted in a total regular levy of$7,625,727 for 2016. The City also levied
special levy amounts for voter approved bond issues. The following table reflects all 2016 levy
amounts for the City.
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City of Pasco, 'Washington 2016 Comprehensive AnnuaCFinanciaCReport
City of Pasco 2016 Levy Rates
Levy Rate Total Levy
General Levy 1.93672 $ 7,625,727
Special Levies
1999 Library Remodel 0.01702 53,959
1999 Fire Station 0.02156 68,341
Total 1.97529 $ 7,748,027
NOTE 5: CAPITAL ASSETS AND CWIP
Capital asset activity for the year ended December 31, 2016 was as follows:
Beginning Current
Balance Current Period Period Ending Balance
Governmental Activities: 01/01/16 Increases Decreases 12/31/16
Capital assets,not being depreciated
Land $ 14,363,583 $ 1,149,646 $ 140,031 $ 15,373,198
Construction in progress 13,212,182 8,918,086 5,848,079 16,282,189
Total capital assets,not being depreciated 27,575,765 10,067,732 5,988,110 31,655,387
Capital assets,being depreciated:
Building&structure 41,829,672 266,473 1,877,381 40,218,764
Other improvements 9,354,136 725,083 286,454 9,792,765
Machinery and equipment 14,292,506 2,016,664 809,656 15,499,514
Infrastructure 225,649,605 26,541,497 - 252,191,102
Total capital assets being depreciated11,702,145
Less accumulated depreciation:
Building&structure 16,366,519 916,088 1,012,401 16,270,206
Other improvements 6,302,132 521,757 267,911 6,555,978
Machinery and equipment 7,773,660 975,719 793,706 7,955,673
Infrastructure 82,731,810 12,312,138 - 95,043,948
Total accumulated depreciation 113,174,121 14,725,702 2,074,018 125,825,805
Total capital assets,being depreciated,net 177,951,798 14,824,015 899,473 191,876,340
Governmental activities capital assets net $205,527,563 $ 24,891,747 $6,887,583 $223,531,727
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City of Pasco, 'Washington 2016 Comprehensive Annual Financial Report
Beginning Current
Balance Current Period Period Ending Balance
Business Type Activities: 01/01/16 Increases Decreases 12/31/16
Capital assets,not being depreciated
Land $ 2,532,743 $ 192,692 $ - $ 2,725,435
Construction in process 3,937,728 8,683,580 3,534,893 9,086,415
Total capital assets,not being depreciated 6,470,471 8,876,272 3,534,893 11,811,850
Capital assets,being depreciated:
Building&structure 77,048,235 204,646 - 77,252,881
Other Improvements - 56,947 - 56,947
Machinery and equipment 11,463,793 460,368 - 11,924,161
Infrastructure 158,917,114 7,848,724 510,061 166,255,777
Total capital assets being depreciated 247,429,142 8,570,685 510,061 255,489,766
Less accumulated depreciation:
Building&structure 40,210,188 2,736,534 - 42,946,722
Machinery and equipment 3,826,671 1,008,444 - 4,835,115
Infrastructure 38,853,050 3,388,145 510,061 41,731,134
Total accumulated depreciation 8209,909 7,133,123 510,061 89,512,971
Total capital assets,being depreciated,net 164,539,233 1,437,562 - 165,976,795
Business activities capital assets net $ 171,009,704 $ 10,313,834 $3,534,893 $ 177,788,645
Depreciation expense by function:
Governmental activities:
General government $ 354,087
Public Safety 488,163
Transportation 12,619,506
Economic environment 213,480
Culture &recreation 1,050,466
Total depreciation expense - governmental activities $ 14,725,702
Business-type activities:
Water $ 2,702,503
Irrigation 545,766
Sewer 3,249,257
Process water reuse facility 385,420
Stonnwater 250,177
Total depreciation expense- business-type activities: $ 7,133,123
Construction commitments
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Cit-V of Pasco, 'Washington 2o16 Comprehensive Annual Tinancial Report
The City of Pasco has active construction projects as of December 31, 2016. The projects include
street construction and various utility constructions. At year end, the city's commitments with
contractors are as follows:
CAFR PROJECT SPENT TO REMAINING
CATEGORY COMMITMENT DATE COMMITMENTS
GENERAL $ 8,187,904 $ 8,131,483 $ 56,421
STREET 776,072 447,406 328,665
WATER 2,530,250 1,564,217 966,033
IRRIGATION 297,037 - 297,037
SEWER 1 6,112,1091 5,524,642 587,468
STORMWATER 51,202 1 - 51,202
TOTAL Is 17,954,574 1 $15,667,748 $ 2,286,826
NOTE 6: INTERFUND BALANCES AND TRANSFERS
Interfund loans
The composition of interfund loan balances as of December 31, 2016 is as follows:
DUE FROM
Nonmajor Special Nonmajor Debt
p VLandPtrrc:hase
rpose Revenue Service Total
w
;Nomiajor Internal Sery $ 475,938 $ - $ 475,938
Nonmajor Special Revenue Parking Lot Repaving 243,370 - 243,370
A Nonma'or Special Revenue LID Financing - 344,147 344,147
Nonma'or Internal Service LID Financing - 64,567 64,567
Nomnajor Fiduciary LID Financing - 33,954 33,954
Total $ 719,308 $ 442,668 $ 1,161,976
Interfund transfers
Transfers between funds during the year ended December 31, 2016 are as follows:
TRANSFER FROM
E' Nonmajor Special Nonmajor Debt
W
General Revenue Service Total
General $ - $ 143,000 $ 48,667 $ 191,667
Nonmajor Special Revenue 805,000 294,097 300,000 1,399,097
Non Major Debt Service - - 204,442 204,442
Major Construction 6,235,858 2,196,817 - 8,432,675
Total $ 7,040,858 $ 2,633,914 $ 553,109 $ 10,227,881
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,
53
Cit-V of Pasco, Washington 2016 Comprehensive Annual Tinancial Report
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 and fund balance of the Boulevard Maintenance fund to the general
fund to pay for boulevard maintenance activities and from the general fund to the ambulance fund.
NOTE 7: CHANGES IN LONG-TERM LIABILITIES AND LONG-TERM DEBT
Changes in long-term liabilities -governmental. For the governmental activities, compensated
balances are generally liquidated by the General and Streets funds while medical and dental claims
are liquidated by the Medical/Dental internal services fund. Internal service funds predominantly
serve the governmental funds. Accordingly, long-term liabilities for them are included as part of
the totals for governmental activities.Also for governmental activities,claims and judgements and
compensated absences are generally liquidated by the General fund.
The table below reflects the change in Long-Term Liabilities for Governmental activities for year
ended December 31, 2016.
Changes in long-term liabilities — business type. All business type funds liquidate their own
compensated absences,judgements, and claims.
The table below reflects the change in Long-Term Liabilities for Business Type activities for year
ended December 31, 2016.
Beginning Balance Ending Balance Due Within One
GOVERNMENTAL ACTIVITIES 01/01/2016 Additions Reductions 12/31/16 Year
General Obligation Bonds $ 11,580,000 $ $ (1,150,000) $ 10,430,000 $ 770,000
Premiums 307,734 (15,387) 292,347 15,387
Total GO Bonds Payable 11,887,734 (1,165,387) 10,722,347 785,387
Special Assessment Bond 160,000 - (115,000) 45,000 15,000
External Loans 38,069 3,537 (29,676) 11,930 11,930
Compensated Absences 2,106,348 1,941,036 (1,556,836) 2,490,548 1,556,836
OPEB Obligations 3,331,084 755,119 4,086,203 -
PensionObligations2 8,039,698 479,421 8,519,119 -
Activity $ 25,562,933 $ 3,179,113 $ (2,866,899) $ 25,875,147 $ 2,369,153
Reclassified External Loan for$40,301 to interfiM loan as the loan was made between a fiduciary fiord and a debt service fund of the City
and was not an external loan.
2Pension Obligations resulting from the implementation of GASB 68 were not included in this table in 2015 for Govermnental and Business
Type Activities.
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City of Pasco, 'Washington 2016 Comprehensive AnnuaCF nanciaCReport
Beginning Balance Ending Balance Due Within One
BUSINESS TYPE ACTIVITIES 01/01/2016 Additions Reductions 12/31/16 Year
Revenue Bonds $ 36,690,000 $ $ (1,635,000) $ 35,055,000 $ 1,715,000
LTGO Bond' - 3,959,939 (576,936) 3,383,003 1,112,418
Premiums 1,595,529 (106,384) 1,489,145 98,200
Total Bonds Payable 38,285,529 3,959,939 (2,318,320) 39,927,148 2,925,618
State Loans 6,944,623 67,430 (6,503,610) 508,443 114,502
Compensated Absences 211,579 236,986 (214,554) 234,011 214,554
Pension Obligations 1,812,873 1,124,952 2,937,825 -
Business Activity Long-Term Activity 47,254,604 5,389,307 (9,036,484) 43,607,427 3,254,674
Total Changes in Business Type&
Governmental Long-Term Liabilities $ 72,817,537 $ 8,568,420 $(11,903,383) $ 69,482,574 $ 5,623,827
3A Cashmere Valley Bank LTGO Bond refinanced a state loan(Dept.of Ecology)for the sewer plant in 2016.A portion of sewer fund reserves
related to the original debt was also used to liquidate the debt.
4A loan for domestic water from the State Revolving Fund has been authorized for the City in the amount of$6,810,430.There have been no draws
but the state added a loan fee in the amount of$67,430,which is being amortized for the life of the loan.The amount due will change with every draw.
Long-term debt. The city issues general obligation bonds to finance capital improvements such
as street projects, softball fields, library improvements, police station and other municipal
facilities. Revenue bonds are issued to finance capital facilities, facility improvements and
equipment purchases for the City's utilities. General obligation bonds have been issued for both
general government and business-type activities. In 2016 the City made the final payment on a
loan to purchase land for a new Animal Control Facility.A loan to the Port of Pasco for the Airport
Fire Building was scheduled to be paid off in 2016, however at year end it was discovered that in
2016 the Port had voided and returned the 2015 fourth quarter payments as well as the first two
payments in 2016. The Port indicated the loan was paid in full and instructed staff to cease sending
payments. The City's records indicate there is an outstanding balance of$11,930 still due the Port
and we are working with them to reconcile payment history. Governmental debt is considered
obligations of the general government and is 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 145) are subject to rebate and yield restrictions. Bonded indebtedness has also been
entered into (currently and in previous years) to advance refund general obligation and revenue
bonds.
General obligation bonds and loans outstanding as of December 31, 2016 are as follows:
GOVERNMENTAL DEBT-BONDS AND LOANS
Interest Rate Outstanding as of Due Within 1
Purnosik Maturity Range Range Original Amount December 31,2016 Year
2011 LTGO Refunding 2001 LTGO 2011-2020 3.00%-4.00% $ 4,110,000 $ 1,940,000 460,000
2015 LTGO Police Station 2015-2045 3.00%-4.00% 8,795,000 8,490,000 310,000
2010 LID 145 Financing 2012-2020 2.25%-5.00% 785,129 45,000 15,000
12006 Port Airport Fire Building 2006-2016 4.00% 120,000 11,930 11,930
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CiLy of Pasco, -Nashinaton 2o16 Comprehensive Annual Tinancial Report
'The status of the Port Loan is currently being investigated with the Port and the loan will either
be paid in full or written off in 2017.
For presentation purposes,the remaining LID 145 Bonds($45,000) are being included in the table
for general obligation debt because the LID is accounted for in a Governmental Fund(Debt Service
Fund). The annual debt service requirements to maturity for general obligation bonds,LID Bonds
and Loans are as follows:
GOVERNMENTAL DEBT
Year Ending
December 31 Principal Interest Total Debt Service
2017 $ 796,930 $ 401,650 $ 1,198,580
2018 810,000 373,200 1,183,200
2019 845,000 340,650 1,185,650
2020 860,000 306,700 1,166,700
2021 360,000 272,300 632,300
2022-2026 2,035,000 1,133,300 3,168,300
2027-2031 2,465,000 702,675 3,167,675
2032-2036 2,315,000 221,063 2,536,063
$ 10,486,930 $ 3,751,538 $ 14,238,468
Revenue Bonds, General Obligation Bonds and Loans outstanding for Business Type Accounts
are as follows:
BUSINESS TYPE DEBT-BONDS
Interest Rate Outstanding as of Due Within 1
ose Maturity Range Range Original Amount December 31,2016 Year
2009 Water/Sewer Capital Projects 2009-2029 1.35%-4.75% $ 10,045,000 $ 7,180,000 $ 455,000
2010A Refunding Water/Sewer 2010-2029 3.00%-5.00% 9,070,000 4,765,000 285,000
2010T Refimding&Capital-Reuse 2010-2018 4.62% 1,240,000 355,000 175,000
2013A Sewer Capital Projects 2010-2028 3.00%-4.00% 2,520,000 2,220,000 100,000
2013T Capital Projects Reuse Facility 2010-2028 .69%-4.89% 7,235,000 6,365,000 440,000
2015 Water/Sewer Capital Projects 2015-2040 2.00%-5.00% 14,380,000 14,170,000 260,000
2016 Sewer Refunding LTGO Bond-pay SRF Loan 2016-2019 1.36% 3,959,939 3,383,003 1,112,418
BUSINESS TYPE DEBT-LOANS
Interest Rate Outstanding as of Due Within 1
Purpose Maturity Range Range Original Amount December 31,2016 Year
PW00-691-043 Riverview Trunk Sewer Interceptor 2000-2020 0.50% $ 1,890,000 $ 444,562 $ 111,140
DM 15-952-037 Columbia Water Supply Project 2016-2035 1.50% 67,430 63,881 3,362
The debt service requirements to maturity for all Business Type debt is as follows:
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City of Pasco, 'Washington 2016 Comprehensive AnnuaCFinanciaCReport
BUSINESS TYPE DEBT
Year Ending IV
December 31 Principal Interest Total Debt Service
2017 $ 2,941,920 $ 1,543,772 $ 4,485,692
2018 3,002,101 1,470,919 4,473,020
2019 3,302,489 1,394,700 4,697,189
2020 2,229,503 1,305,287 3,534,790
2021 2,138,362 1,222,583 3,360,945
2022-2026 9,691,811 4,847,012 14,538,823
2027-2031 6,556,811 2,814,251 9,371,062
2032-2036 4,568,449 1,672,254 6,240,703
2037-2041 4,515,000 463,150 4,978,150
TOTAL $ 38,946,446 $ 16,733,928 $ 55,680,374
In 2016 the City obtained funding from Cashmere Valley Bank in the amount of$3,959,939. The
debt is considered a short term general obligation bond and the purpose was to pay for a portion
of the Sewer department's outstanding State Water Pollution Control loan from the Department of
Ecology. In addition to Cashmere Bank funding, the Sewer department contributed funds from
debt reserves to pay in full the entire loan balance of$5,640,749. The City realized a Net Present
Value savings of$207,623 in interest as the bond rate of 1.36% is substantially less than the loan
rate of 3.5%.
Defeased Debt. In prior years the City defeased certain revenue bonds by placing the proceeds of
new bonds in an irrevocable trust to provide for all future debt service payments on the old bonds.
Accordingly,the trust account assets and the liability for defeased bonds are not included the City's
financial statements. At December 31, 2016, $315,000 of 2007 Water Sewer bonds outstanding
are considered defeased.
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
vehicles. New vehicles and leases are then acquired. The following represents the future annual
minimum lease payments:
Police vehicles
Year Ending December Amount
2017 $ 524,832
2018 461,969
2019 326,588
2020 172,349
2021 122,175
2022 26,569
Total $ 1,634,481
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CiLy of Pasco, 'Washington 2016 Comprehensive AnnuaCFnanciaCReport
NOTE 8: 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 of Pasco 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 168
members.
New members initially contract for a three-year term, and thereafter automatically renew on an
annual basis. A one-year withdrawal notice is required before membership can be terminated.
Termination does not relieve a former member from its unresolved loss history incurred during
membership.
Liability coverage is written on an occurrence basis, without deductibles. Coverage includes
general, automobile, police, errors or omissions, stop gap, employment practices and employee
benefits liability. Limits are $4 million per occurrence in the self-insured layer, and $16 million
in limits above the self-insured layer is provided by reinsurance. Total limits are $20 million per
occurrence subject to aggregates and sub-limits. The Board of Directors determines the limits and
terms of coverage annually. Effective January 2011 City of Pasco coverage changed to a$100,000
per incident deductible from a no deductible policy.
WCIA offers insurance for property, automobile physical damage, fidelity, inland marine, and
boiler and machinery coverage, which is purchased on a group basis, however the City purchases
all property insurance from a commercial insurance broker and does not participate in the WCIA
property coverage program.
In-house services include risk management consultation,loss control field services, and claims and
litigation administration. WCIA contracts for certain claims investigations, consultants for
personnel and land use issues, insurance brokerage, actuarial and lobbyist services.
WCIA is fully funded by its members, who make annual assessments on a prospectively rated
basis, as determined by an outside, independent actuary. The assessment covers loss, loss
adjustment, and administrative expenses. As outlined in the interlocal, WCIA retains the right to
additionally assess the membership for any funding shortfall.
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Cit-V of Pasco, 'Washington 2o16 Comprehensive .annual TinanciaCReport
An investment committee, using investment brokers, produces additional revenue by investment
of WCIA's assets in financial instruments which comply with all State guidelines.
A Board of Directors governs WCIA, which is comprised of one designated representative from
each member. The Board elects an Executive Committee and appoints a Treasurer to provide
general policy direction for the organization. The WCIA Executive Director reports to the
Executive Committee and is responsible for conducting the day-to-day operations of WCIA.
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. The City currently maintains four months of program expense
in cash reserves for medical and dental claims. Program expense includes average claims as well
as administrative and third party provider costs. To limit the exposure for large claims, the City
purchases individual stop-loss coverage from a commercial insurance carrier that limits the City's
exposure for claim losses to $100,000 per individual. The amount of medical/dental claims in
excess of commercial insurance for the last three years are:
2014 1 2015 2016
$ 4,396,624 1 $ 4,627,663 $ 4,858,665
NOTE 9: JOINT AGREEMENT/JOINT VENTURES
A. Bi-County Police Information Network
The Bi-County Police Information Network(BI-PIN)was established November 24, 1982,when an
Interlocal Agreement was entered into by eight participating municipal corporations; the cities of
Kennewick, Pasco, Richland, Connell West Richland, and Prosser, and Benton and Franklin
Counties. BI-PIN was established to assist the participating police and 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 position will be shared based upon participant contribution.
Effective January 1, 1992,the City of Kennewick assumed responsibility for operation of the BI-PIN
system. As the Operating Jurisdiction, Kennewick provides all necessary support services for the
operation of BI-PIN such as accounting, legal services, and risk management and information
systems.
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City of Pasco, -Nashinaton 2o16 Comprehensive Annual Tinancial Report
The City of Pasco's equity interest in BI-PIN was $39,321 on December 31,2016,which is reported
as an investment in joint ventures in the government-wide statement of net position. The change in
equity is reflected in the government-wide statement of activities under Public Safety. The City does
not anticipate any income distributions from BI-PIN since charges are assessed only to recover
anticipated expenses.
Complete separate financial statements for BI-PIN may be obtained at the City of Kennewick, 210
W. 6th Ave.,Kennewick,Washington,99336.
B. Metro Drug Forfeiture Fund
The Metropolitan Controlled Substance Enforcement Group (Metro) was established prior to 1987,
when an Interlocal Agreement was entered into by six participating municipal corporations,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 Chiefs of Police
from the cities and the Sheriffs from the counties administers daily activity.
Effective July 1,2009,the City of Kennewick assumed responsibility for the operation of Metro.As
the Operating Jurisdiction,Kennewick provides accounting services for the operation of Metro.
The City of Pasco's equity interest in Metro was $41,726 on June 30, 2016,which is reported as an
investment in joint ventures in the government-wide statement of net position. The change in equity
is reflected in the government-wide statement of activities under Public Safety. The City does not
anticipate any income distributions from Metro.
Complete separate financial statements for Metro may be obtained at the City of Kennewick,210 West Sixth
Avenue,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(ACA). The ACA was established to
provide animal control and sheltering services. ACA is served by an Executive Committee
composed of the City Manager, or designee, of each of the cities.
In 2005, the City of Pasco was designated as the Operation Jurisdiction for the ACA. As the
Operating Jurisdiction, the City provides all necessary support services for the operation such as
accounting, contract administration and risk management.
Complete separate financial statements for ACA may be obtained from the City of Pasco,P.O.Box
293, Pasco, Washington 99301.
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City of Pasco, Washington 2o16 Comprehensive .annual TinanciaCReport
NOTE 10: RELATED PARTIES/ORGANIZATIONS
Pasco Public Facility District
Pursuant to RCW 35.57 (the "City PFD Act") the Pasco Public Facilities District was formed and
created by Ordinance No. 3558 on July 15,2002, coextensive with the boundaries of the City,with
the powers and authority set forth in the City PFD Act. The District was established for the purpose
of acquiring, constructing, owning, remodeling, maintaining, equipping, re-equipping, repairing,
financing, operating one or more Regional Centers, as defined by the RCW 35.57.020 and/or
participating with any other qualified public facilities district in a cooperative and joint
development of a Regional Center in the Tri-Cities area by interlocal agreement.
The members of the board of directors of the District (the "PFD Board") shall be selected and
appointed by the Council, as required by the RCW. The PFD Board consisted of five members.
Three of the members will be appointed based on recommendations from local organizations. The
members serve four-year terms. The Council may,by resolution,remove a member for any reason.
Vacancies will be filled by appointment by the Council.
All corporate powers of the District will be exercised by or under the authority of the PFD Board;
and the business, property and affairs of the District shall be managed under the direction of the
PFD Board, except as may be otherwise provided for by law or in its Charter.
Complete separate financial statements for the District may be obtained from the City of Pasco,
P.O. Box 293, Pasco, WA 99301.
Downtown Pasco Development Authority
Pursuant to RCW 35.21,the Downtown Pasco Development Authority was formed and created by
Ordinance No. 3985 (the DPDA Act) on December 20, 2010, coextensive with the boundaries of
the City,with the powers and authority set forth in the City DPDA Act. The Authority was created
to administer and execute Federal grants or programs; to receive and administer private
funds, goods or services for any lawful public service; and to perform any lawful public
purpose or public function to provide for the revitalization and enhancement of the
downtown Pasco area.
The members of the board of directors of the Authority (the "DPDA Board") are selected and
appointed by the Mayor of the City of Pasco, subject to confirmation by the City Council. The
DPDA Board consists of nine members. Five of the members are representative of for-profit
business or property owners within the downtown area. At least two members are representative
of the banking and/or real estate profession, and at least two members are representatives of
business or corporate management. The members serve four-year terms. The Council may, by
resolution, remove a member for any reason. Vacancies will be filled by appointment by the
Mayor, subject to confirmation by the City Council.
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City of Pasco, -Nashinaton 2016 Comprehensive Annual Fnancial Report
All corporate powers of the Authority will be exercised by or under the authority of the DPDA
Board; and the business,property and affairs of the Authority shall be managed under the direction
of the DPDA Board, except as may be otherwise provided by law or in its Charter.
In 2016, the City expended $144,100 in subsidies and pass-through grants to the DPDA. As part
of its charter, the DPDA was granted the right to receive the revenues generated by the Farmers'
Market and the Specialty Kitchen program. The activity from those two programs are not reflected
in the amount noted above.
Financial statements for the Authority may be obtained from the Downtown Pasco Development
Authority at 720 W. Lewis Street, Suite 131, Pasco, WA 99301.
Trade, Recreation,Agricultural Center
In 1994 the City entered into an agreement with Franklin County for the Trade, Recreation, and
Agricultural Center (TRAC). The City and Franklin County share in the costs of operating and
covering TRAC's debt service. Franklin County handles all operating decisions and financial
reporting for TRAC.
The City accounts for its portion of TRAC activity in the TRAC Special Revenue Fund. For
calendar year 2016, the City of Pasco paid Franklin County $273,948 for operating expenditures.
Additionally, in 2014 the City provided$100,000 to the County to assist with TRAC's cash flows.
This will be returned to the City in 2026, when the existing agreement lapses. It is classified on
the balance sheet as a non-current asset: Due from Other Government. As of December 31, 2016,
the TRAC Fund had a fund balance of$210,547.
Complete financial statements for TRAC may be obtained from Franklin County, 1016 N. 4th
Avenue, Pasco, Washington.
Housing Authority of the City of Pasco and Franklin County
The Housing Authority of the City of Pasco and Franklin County was formed and created by
Ordinance No. 2299 on September 8, 1981, in order to pursue the rehabilitation and redevelopment
of blighted areas containing unsanitary or unsafe habitations located within the City of Pasco and
Franklin County. Its formation empowered the j oint housing authority to exercise all rights referred
to under RCW 35.82 "Housing Authority Law."
Three of the five Authority board members are appointed by the City Council.
During 2016, the Authority received $1,937 in pass-through grants administered by the City. In
2015, the City and the Authority entered into an agreement which will result in Payment in Lieu
of Taxes (PILOT) to the City starting in 2015 in order to defray the cost of the City providing
essential local public services.
Financial statements for the Authority may be obtained from the Housing Authority of the City of
Pasco and Franklin County, 2505 W. Lewis Street, Pasco, WA 99301.
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City of Pasco, 'Washington 2016 Comprehensive Annual Tinancial Report
NOTE 11: JOINTLY GOVERNED ORGANIZATIONS:
Tri-Cities Regional Public Facilities District
Pursuant to RCW 35.57 the Tri-Cities Regional Public Facilities District was formed jointly by
the Cities of Pasco, Kennewick, and Richland. The District was established for the purpose of
acquiring, constructing, owning, remodeling, maintaining, equipping, re-equipping, repairing,
financing, operating one or more Regional Centers, as defined by the RCW 35.57.020 and/or
participating with any other qualified public facilities districts in a cooperative and joint
development of a Regional Center in the Tri-Cities area, by interlocal agreement.
The District is governed by a nine-member board, with three members representing each city.
Each member must either be a member of the City Council or the Public Facilities District of the
representative city.
Franklin County Emergency Management
Franklin County Emergency Management (FCEM) is a political subdivision of Franklin County
and its municipalities. The FCEM is responsible for coordinating and establishing emergency
response plans to prepare Franklin County for emergencies involving the following: Energy
Northwest; the Hanford Nuclear Reservation; the Pasco Airport; and all Homeland Security,
natural and man-made disasters
FCEM is governed by a seven-member board,with two County Commissioners,one City Manager
or designee from each of the following cities: Connell, Kahlotus, and Mesa. The City of Pasco
has two representatives on the board due to its population base.
Benton-Franklin Council of Governments
The Benton-Franklin Council of Governments (BFCG) is a voluntary association of the units of
local government, whose purpose is to facilitate a cooperative approach to regional problem
solving.
Seventeen regular voting members represent the two counties, local governments, including a
Public Utility District, a Transportation District, a Port and the Washington State Department of
Transportation. The City of Pasco has one City Council member as its voting representative on
the Board. In addition to regular voting members,there is one associate member and two affiliate
members.
Benton-Franklin Council of Governments Economic Development District
The Benton-Franklin Council of Governments Economic Development District (EDD) is a
voluntary association of the units of local government and private sector members whose purpose
is to facilitate a cooperative approach to regional economic development.
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City of Pasco, 'Washington 2o16 Comprehensive Annual Tinancial Report
The board is comprised of the members of the Benton-Franklin Council of Governments plus nine
representatives from the private sector.
NOTE 12: EMPLOYEE RETIREMENT SYSTEMS AND PENSION PLANS
The City implemented GASB Statement 68,Accounting and Financial Reporting for Pensions in
January 2015. The following table represents the aggregate pension amounts for all State plans
subject to the requirements of the GASB Statement 68, Accounting and Financial Reporting for
Pensions for the year 2016:
Aggregate Pension Amounts -All Plans
Pension liabilities $(11,456,944)
Pension assets 3,016,107
Deferred outflows of resources 3,837,803
Deferred inflows of resources (477,104)
Pension expense/expenditures $ (550,832)
State Sponsored Pension Plans
Substantially all the city's full-time and qualifying part-time employees participate in one of the
following statewide retirement systems administered by the Washington State Department of
Retirement Systems, under cost-sharing, multiple-employer public employee defined benefit and
defined contribution retirement plans. The state Legislature establishes, and amends, laws
pertaining to the creation and administration of all public retirement systems.
The Department of Retirement Systems (DRS), a department within the primary government of
the State of Washington,issues a publicly available 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 98540-8380
Or the DRS CAFR may be downloaded from the DRS website at www.drs.wa.gov.
Public Employees' Retirement System (PERS)
PERS members include elected officials; state employees; employees of the Supreme, Appeals
and Superior Courts; employees of the legislature; employees of district and municipal courts;
employees of local governments; and higher education employees not participating in higher
education retirement programs. PERS is comprised of three separate pension plans for
membership purposes. PERS plans 1 and 2 are defined benefit plans,and PERS plan 3 is a defined
benefit plan with a defined contribution component.
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CiLy of Pasco, 'Washington 2016 Comprehensive Annual Tinancial Report
PERS Plan 1 provides retirement, disability and death benefits. Retirement benefits are
determined as two percent of the member's average final compensation(AFC)times the member's
years of service. The AFC is the average of the member's 24 highest consecutive service months.
Members are eligible for retirement from active status at any age with at least 30 years of service,
at age 55 with at least 25 years of service, or at age 60 with at least five years of service. Members
retiring from active status prior to the age of 65 may receive actuarially reduced benefits.
Retirement benefits are actuarially reduced to reflect the choice of a survivor benefit. Other
benefits include duty and non-duty disability payments, an optional cost-of-living adjustment
(COLA), and a one-time duty-related death benefit, if found eligible by the Department of Labor
and Industries. PERS 1 members were vested after the completion of five years of eligible service.
The plan was closed to new entrants on September 30, 1977.
Contributions
The PERS Plan 1, member contribution rate is established by State statute at 6 percent. The
employer contribution rate is developed by the Office of the State Actuary and includes an
administrative expense component that is currently set at 0.18 percent. Each biennium, the state
Pension Funding Council adopts Plan 1 employer contribution rates. The PERS Plan 1 required
contribution rates (expressed as a percentage of covered payroll) for 2016 were as follows:
PERS Plan 1
Actual Contribution Rates Employer Employee*
PERS Plan 1 6.23% 6.00%
PERS Planl UAAL 4.77% 6.00%
Administrative Fee 0.18%
Total 11.18%1 12.000/.
* For employees participating in JBM, the contribution rate was 12.26%
The city's actual contributions to the plan were $11,467 for the year ended December 31, 2016.
PERS Plan 2/3 provides retirement, disability and death benefits. Retirement benefits are
determined as two percent of the member's average final compensation(AFC)times the member's
years of service for Plan 2 and 1 percent of AFC for Plan 3. The AFC is the average of the
member's 60 highest-paid consecutive service months. There is no cap on years of service credit.
Members are eligible for retirement with a full benefit at 65 with at least five years of service
credit. Retirement before age 65 is considered an early retirement. PERS Plan 2/3 members who
have at least 20 years of service credit and are 55 years of age or older, are eligible for early
retirement with a benefit that is reduced by a factor that varies according to age for each year
before age 65. PERS Plan 2/3 members who have 30 or more years of service credit and are at
least 55 years old can retire under one of two provisions:
• With a benefit that is reduced by three percent for each year before age 65; or
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City of Pasco, 'Washington 2016 Comprehensive Annual Tinancial Report
• With a benefit that has a smaller(or no)reduction(depending on age)that imposes stricter
return-to-work rules.
PERS Plan 2/3 members hired on or after May 1,2013 have the option to retire early by accepting
a reduction of five percent for each year of retirement before age 65. This option is available only
to those who are age 55 or older and have at least 30 years of service credit. PERS Plan 2/3
retirement benefits are also actuarially reduced to reflect the choice of a survivor benefit. Other
PERS Plan 2/3 benefits include duty and non-duty disability payments, a cost-of-living allowance
(based on the CPI), capped at three percent annually and a one-time duty related death benefit, if
found eligible by the Department of Labor and Industries. PERS 2 members are vested after
completing five years of eligible service. Plan 3 members are vested in the defined benefit portion
of their plan after ten years of service; or after five years of service if 12 months of that service are
earned after age 44.
PERS Plan 3 defined contribution benefits are totally dependent on employee contributions and
investment earnings on those contributions. PERS Plan 3 members choose their contribution rate
upon joining membership and have a chance to change rates upon changing employers. As
established by statute,Plan 3 required defined contribution rates are set at a minimum of 5 percent
and escalate to 15 percent with a choice of six options. Employers do not contribute to the defined
contribution benefits. PERS Plan 3 members are immediately vested in the defined contribution
portion of their plan.
Contributions
The PERS Plan 2/3 employer and employee contribution rates are developed by the Office of the
State Actuary to fully fund Plan 2 and the defined benefit portion of Plan 3. The Plan 2/3 employer
rates include a component to address the PERS Plan 1 UAAL and an administrative expense that
is currently set at 0.18 percent. Each biennium, the state Pension Funding Council adopts Plan 2
employer and employee contribution rates and Plan 3 contribution rates. The PERS Plan 2/3
required contribution rates(expressed as a percentage of covered payroll)for 2016 were as follows:
PERS Plan 2/3 10
Actual Contribution Rates Employer 2/3 Employee 2*
PERS Plan 2/3 6.23% 6.12%
PERS Planl UAAL 4.77%
Employee PERS Plan 3 Varies
Administrative Fee 0.18%
Total 11.18%1 6.12%
* For employees participating in JBM, the contribution rate was 15.30%
The city's actual PERS plan contributions were $567,012 to PERS Plan 1 and $739,983 to PERS
Plan 2/3 for the year ended December 31, 2016.
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City of Pasco, -Washington 2o16 Comprehensive Annual Tinancial Report
Law Enforcement Officers' and Fire Fighters' Retirement System (LEOFF)
LEOFF membership includes all full-time, fully compensated, local law enforcement
commissioned officers, firefighters, and as of July 24, 2005, emergency medical technicians.
LEOFF is comprised of two separate defined benefit plans.
LEOFF Plan 1 provides retirement, disability and death benefits. Retirement benefits are
determined per year of service calculated as a percent of final average salary(FAS) as follows:
• 20+years of service—2.0% of FAS
• 10-19 years of service— 1.5% of FAS
• 5-9 years of service— 1% of FAS
The FAS is the basic monthly salary received at the time of retirement, provided a member has
held the same position or rank for 12 months preceding the date of retirement. Otherwise, it is the
average of the highest consecutive 24 months' salary within the last ten years of service. Members
are eligible for retirement with five years of service at the age of 50. Other benefits include duty
and non-duty disability payments,a cost-of living adjustment(COLA),and a one-time duty-related
death benefit, if found eligible by the Department of Labor and Industries. LEOFF 1 members
were vested after the completion of five years of eligible service. The plan was closed to new
entrants on September 30, 1977.
Contributions
Starting on July 1, 2000, LEOFF Plan 1 employers and employees contribute zero percent, as
long as the plan remains fully funded. The LEOFF Plan 1 had no required employer or employee
contributions for fiscal year 2015. Employers paid only the administrative expense of 0.18 percent
of covered payroll.
LEOFF Plan 2 provides retirement, disability and death benefits. Retirement benefits are
determined as two percent of the final average salary(FAS) per year of service (the FAS is based
on the highest consecutive 60 months). Members are eligible for retirement with a full benefit at
53 with at least five years of service credit. Members who retire prior to the age of 53 receive
reduced benefits. If the member has at least 20 years of service and is age 50, the reduction is
three percent for each year prior to age 53. Otherwise,the benefits are actuarially reduced for each
year prior to age 53. LEOFF 2 retirement benefits are also actuarially reduced to reflect the choice
of a survivor benefit. Other benefits include duty and non-duty disability payments, a cost-of-
living allowance (based on the CPI), capped at three percent annually and a one-time duty-related
death benefit, if found eligible by the Department of Labor and Industries. LEOFF 2 members are
vested after the completion of five years of eligible service.
Contributions
The LEOFF Plan 2 employer and employee contribution rates are developed by the Office of the
State Actuary to fully fund Plan 2. The employer rate included an administrative expense
component set at 0.18 percent. Plan 2 employers and employees are required to pay at the level
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City of Pasco, Washington 2o16 Comprehensive Annual Tinancial Report
adopted by the LEOFF Plan 2 Retirement Board. The LEOFF Plan 2 required contribution rates
(expressed as a percentage of covered payroll) for 2016 were as follows:
LEOFF Plan 2
Actual Contribution Rates Employer Employee
State and Local Governments 5.05% 8.41%
Administrative Fee 0.18%
Total 5.23% 8.41%
Ports and Universities 8.41% 8.41%
Administrative Fee 0.18%
Total 8.59% 8.41%
The city's actual contributions to the plan were $637,436 for the year ended December 31, 2016.
The Legislature, by means of a special funding arrangement, appropriates money from the state
General Fund to supplement the current service liability and fund the prior service costs of Plan 2
in accordance with the recommendations of the Pension Funding Council and the LEOFF Plan 2
Retirement Board. This special funding situation is not mandated by the state constitution and
could be changed by statute. For the state fiscal year ending June 30, 2016, the state contributed
$60,375,158 to LEOFF Plan 2. The amount recognized by the City as its proportionate share of
this amount is $399,128.
Actuarial Assumptions
The total pension liability(TPL) for each of the DRS plans was determined using the most recent
actuarial valuation completed in 2016 with a valuation date of June 30, 2015. The actuarial
assumptions used in the valuation were based on the results of the Office of the State Actuary's
(OSA) 2007-2012 Experience Study.
Additional assumptions for subsequent events and law changes are current as of the 2015 actuarial
valuation report. The TPL was calculated as of the valuation date and rolled forward to the
measurement date of June 30, 2016. Plan liabilities were rolled forward from June 30, 2015, to
June 30, 2016, reflecting each plan's normal cost (using the entry-age cost method), assumed
interest and actual benefit payments.
• Inflation: 3%total economic inflation; 3.75% salary inflation
• Salary increases: In addition to the base 3.75% salary inflation assumption, salaries are
also expected to grow by promotions and longevity.
• Investment rate of return: 7.5%
Mortality rates were based on the RP-2000 report's Combined Healthy Table and Combined
Disabled Table,published by the Society of Actuaries. The OSA applied offsets to the base table
and recognized future improvements in mortality by projecting the mortality rates using 100
percent Scale BB. Mortality rates are applied on a generational basis; meaning, each member is
assumed to receive additional mortality improvements in each future year throughout his or her
lifetime.
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City of Pasco, 'Washington 2o16 Comprehensive Annual Tinancial Report
There were minor changes in methods and assumptions since the last valuation.
• For all systems, except LEOFF Plan 2, the assumed valuation interest rate was lowered
from 7.8%to 7.7%. Assumed administrative factors were updated.
• Valuation software was corrected on how the nonduty disability benefits for LEOFF Plan
2 active members is calculated.
• New LEOFF Plan 2 benefit definitions were added within the OSA valuation software to
model legislation signed into law during the 2015 legislative session.
Discount Rate
The discount rate used to measure the total pension liability for all DRS plans was 7.5 percent.
To determine that rate, an asset sufficiency test included an assumed 7.7 percent long-term
discount rate to determine funding liabilities for calculating future contribution rate requirements.
(All plans use 7.7 percent except LEOFF 2, which has assumed 7.5 percent). Consistent with the
long-term expected rate of return, a 7.5 percent future investment rate of return on invested assets
was assumed for the test. Contributions from plan members and employers are assumed to
continue being made at contractually required rates (including PERS 2/3 employers, whose rates
include a component for the PERS 1 plan liabilities). Based on these assumptions, the pension
plans' fiduciary net position was projected to be available to make all projected future benefit
payments of current plan members. Therefore,the long-term expected rate of return of 7.5 percent
was used to determine the total liability.
Long-Term Expected Rate of Return
The long-term expected rate of return on the DRS pension plan investments of 7.5 percent was
determined using a building-block-method. The Washington State Investment Board(WSIB)used
a best estimate of expected future rates of return(expected returns, net of pension plan investment
expense, including inflation) to develop each major asset class. Those expected returns make up
one component of WSIB's capital market assumptions. The WSIB uses the capital market
assumptions and their target asset allocation to simulate future investment returns at various future
times. The long-term expected rate of return of 7.5 percent approximately equals the median of
the simulated investment returns over a 50-year time horizon.
Estimated Rates of Return by Asset Class
Best estimates of arithmetic real rates of return for each major asset class included in the pension
plan's target asset allocation as of June 30,2016, are summarized in the table below. The inflation
component used to create the table is 2.2 percent and represents the WSIB's most recent long-term
estimate of broad economic inflation.
69
City of Pasco, 'Washington 2016 Comprehensive AnnuaCginanciaCR.eport
Asset Class Target Allocation % Long-Term Expected Real Rate
of Return Arithmetic
Fixed Income 20% 1.70%
Tangible Assets 5% 4.40%
Real Estate 15% 5.80%
Global Equity 37% 6.60%
Private Equity 23% 9.60%
100%
Sensitivity of NPL
The table below presents the city's proportionate share of the net pension liability calculated using
the discount rate of 7.5 percent, as well as what the city's proportionate share of the net pension
liability would be if it were calculated using a discount rate that is I-percentage point lower (6.5
percent) or 1-percentage point higher(8.5 percent) than the current rate.
1% Decrease Current Rate Discount 1% Increase
7M7 6.50% 7.50% 8.50%
PERS Plan 1 $ 6,367,577 $ 5,280,354 $ 4,344,733
PERS Plan 2/3 11,372,212 6,176,589 (3,215,271)
LEOFF Plan 1 (408,997) (688,499) (997,411)
LEOFF Plan 2 $ 6,527,254 $ (2,327,608) $ (9,001,602)
Pension Plan Fiduciary Net Position
Detailed information about the State's pension plans' fiduciary net position is available in the
separately issued DRS financial report.
Pension Liabilities (Assets), Pension Expense, and Deferred Outflows of Resources and
Deferred Inflows of Resources Related to Pensions
At June 30,2016,the city reported a total pension liability of$11,456,944 and a net pension(asset)
of$(3,016,107) for its proportionate share of the net pension liabilities (assets). The table below
details these amount by plan:
Liability or(Asset)
PERS 1 $ 5,280,355
PERS 2/3 6,176,589
LEOFF 1 (688,499)
LEOFF 2 $ (2,327,608)
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City of Pasco, 'Washington 2o16 Comprehensive Annual Tinancial Report
The amount of the asset reported above for LEOFF Plan 2 reflects a reduction for State pension
support provided to the city. The amount recognized by the city as its proportionate share of the
net pension liability/(asset), the related State support, and the total portion of the net pension
liability/(asset) that was associated with the city were as follows:
LEOFF 1 Asset LEOFF 2 Asset
Employer's proportionate share $ (688,499) $ (2,327,608)
State's proportionate share of the
net pension asset associated with
the employer (4,656,990) (1,517,431)
Total $ (5,345,489) $ (3,845,039)
At June 30, the city's proportionate share of the collective net pension liabilities was as follows:
Proportionate Proportionate Change in
Plan Share 6/30/15 Share 6/30/16 Proportion
PERS 1 0.102321% 0.098322% -0.003999%
PERS 2/3 0.125949% 0.122675% -0.003274%
LEOFF 1 0.067488% 0.066826% -0.000662%
LEOFF 2 0.405844% 0.400187% -0.005657%
Employer contribution transmittals received and processed by the DRS for the fiscal year ended
June 30 are used as the basis for determining each employer's proportionate share of the collective
pension amounts reported by the DRS in the Schedules of Employer and Non-employer Allocations
for all plans except LEOFF 1.
LEOFF Plan 1 allocation percentages are based on the total historical employer contributions to
LEOFF 1 from 1971 through 2000 and the retirement benefit payments in fiscal year 2016.
Historical data was obtained from a 2011 study by the Office of the State Actuary(OSA). In fiscal
year 2016, the state of Washington contributed 87.12 percent of LEOFF 1 employer contributions
and all other employers contributed the remaining 12.88 percent of employer contributions.
LEOFF 1 is fully funded and no further employer contributions have been required since June
2000. If the plan becomes underfunded, funding of the remaining liability will require new
legislation. The allocation method the plan chose reflects the projected long-term contribution
effort based on historical data.
In fiscal year 2016, the state of Washington contributed 39.46 percent of LEOFF 2 employer
contributions pursuant to RCW 41.26.725 and all other employers contributed the remaining 60.54
percent of employer contributions.
The collective net pension liability (asset) was measured as of June 30, 2016, and the actuarial
valuation date on which the total pension liability (asset) is based was as of June 30, 2015, with
update procedures used to roll forward the total pension liability to the measurement date.
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Cit-V of Pasco, 'Washington 2016 Comprehensive AnnuaCFnanciaCR.eport
Pension Expense
For the year ended December 31, 2016, the city recognized pension expense as follows:
Pension Expense 2016
PERS 1 $ (791,939)
PERS 2 1,305,394
LEOFF 1 (82,418)
LEOFF 2 119,795
TOTAL $ 550,832
Deferred Outflows of Resources and Deferred Inflows of Resources
At December 31, 2016, the city reported deferred outflows of resources and deferred inflows of
resources related to pensions from the following sources:
Deferred Outflows Deferred Inflows
PERS 1 of Resources of Resources
7Differencesetween expected and actual
$ - $
Net difference between projected and actual
investment earnings on pension plan
investments 132,951 -
Changes of assumptions -
Changes in proportion and differences between
contributions and proportionate share of
Contributions subsequent to the measurement
date 302,010
TOTAL I $ 434,961 $ -
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City of Pasco, 'Washington 2o16 Comprehensive AnnuaCFinanciaCP.eport
Deferred Outflows Deferred Inflows
i1a PERS 2/3 MM of Resources of Resources
Differences between expected and actual
experience $ 328,899.04 $ (203,899.34)
Net difference between projected and actual
investment earnings on pension plan
investments 755,836 -
Changes of assumptions 63,840 -
Changes in proportion and differences between
contributions and proportionate share of
contributions 260,903 (103,304)
Contributions subsequent to the measurement
date 388,272
TOTAL $ 1,797,750 $ (307 204)
Deferred Outflows Deferred Inflows
LEOFF 1 of Resources of Resources
Differences between expected and actual
experience $ -
Net difference between projected and actual
investment earnings on pension plan
investments 69,985 -
Changes of assumptions - -
Changes in proportion and differences between
contributions and proportionate share of
contributions
Contributions subsequent to the measurement
date
TOTAL $ 69,985 $ -
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City of Pasco, 'Washington 2oi6 Comprehensive AnnuaCFinanciaCReport
Deferred Outflows Deferred Inflows
i0d LEOFF 2 of Resources of Resources
Differences between expected and actual
experience $ 318,945.04 $
Net difference between projected and actual
investment earnings on pension plan
investments 836,403 -
Changes of assumptions 8,776 -
Changes in proportion and differences between
contributions and proportionate share of
contributions 38,142 ($169,900)
Contributions subsequent to the measurement
date 332,841
TOTAL $ 1,535,107 $ (169,900)
TOTAL DEFERRED OUTFLOWS Deferred Outflows Deferred Inflows
AND INFLOWS FOR ALL PLANS of Resources of Resources
Differences between expected and actual
experience $ 647,844.07 $ (203,899.34)
Net difference between projected and actual
investment earnings on pension plan
investments 1,795,175 -
Changes of assumptions 72,616 -
Changes in proportion and differences between
contributions and proportionate share of
contributions 299,045 ($273,204)
Contributions subsequent to the measurement
date 1,023,123
TOTAL $ 3,837,803 $ (477,104)
Deferred outflows of resources related to pensions resulting from the city's contributions
subsequent to the measurement date will be recognized as a reduction of the net pension liability
in the year ended December 31, 2017. Other amounts reported as deferred outflows and deferred
inflows of resources related to pensions will be recognized in pension expense as follows:
74
City of Pasco, UashinQton 2016 Comprehensive AnnuaCFinanciaCReport
Net Effect on Futurel:ension Expense Nor
Year Ended 12/31 PERS 1 PERS 2/3 LEOFF 1 LEOFF 2 Total
2017 (32,735) 80,693 (14,462) (44,177) (10,682)
2018 32,735) 80,693 14,462 44,177) 10,682
2019 122,101 589,124 60,612 658,295 1,430,133
2020 76,320 351,764 38,298 443,007 909,390
2021 1 - - 1 19,418 19,418
Thereafter -
Firemen's Pension
The following table represents the aggregate pension amounts for the Firemen's' Pension
Fund, subject to the requirements of GASB Statement 68 for the year 2016.
Aggregate Pension Amounts -Old Fire Pension
Pension Liabilities $ (1,147,676)
Pension Assets -
Deferred Outflows of Resources 148,836
Deferred Inflows of Resources (88,997)
Pension Expense 1,087,837
Plan Description
Plan Administration: The Firemen's' Pension Fund(FPF)is administered by the City of Pasco.
The plan is a single-employer defined benefit pension plan that provides pensions for
firefighters that were hired prior to 1970.
The municipal firefighters' pension board consists of the following five members, ex officio,
the mayor, or in a city of the first class, the mayor or a designated representative who shall be
an elected official of the city, who shall be chairperson of the board, the city comptroller or
clerk,the chairperson of finance of the city council, or if there is no chairperson of finance,the
city treasurer, and in addition, two regularly employed or retired firefighters elected by secret
ballot of those employed and retired firefighters who are subject to the jurisdiction of the board.
The members to be elected by the firefighters shall be elected annually for a two-year term.
The two firefighters elected as members shall, in turn, select a third eligible member who shall
serve as an alternate in the event of an absence of one of the regularly elected members. In case
a vacancy occurs in the membership of the firefighters or retired members, the members shall
in the same manner elect a successor to serve the unexpired term. The board may select and
appoint a secretary who may, but need not be a member of the board. In case of absence or
inability of the chairperson to act, the board may select a chairperson pro tempore who shall
during such absence or inability to perform the duties and exercise the powers of the
chairperson. A majority of the members of the board shall constitute a quorum and have power
to transact business.
Plan Membership: Plan membership is limited to active members of the Firefighters' Pension
Fund(FPF) as of March 1, 1970. On that date,the Washington Law Enforcement Officers' and
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City of Pasco, 'Washington 2o16 Comprehensive AnnuaCE'inanciaCReport
Firefighters' System (LEOFF) was established. FPF is responsible for paying the pensions of
those members retired prior to March 1, 1970 and for providing the "excess benefit",the excess
of FPF formula benefits over the LEOFF benefits. Therefore, the plan is closed to new
members. At December 31, 2016, FPF membership consisted of the following:
Inactive plan members retired prior to March 1, 1970 and receiving benefits: 0
Inactive plan members retired March 1, 1970 or after and receiving benefits: 11
Active Plan Members: 0
Benefits provided. All benefit terms are in statutes RCW 41.16,41.18,and 41.26. FPF provides
retirement, disability, and death benefits. Each firefighter in service on March 1, 1970 receives
the greater of the benefit payable under the Washington Law Enforcement Officers' and
Firefighters' Retirement System and the benefits available under the provisions of prior law.
Where benefits under the old law exceed those under the new law for any firefighter,the excess
benefits are paid from the FPF of the city employing the member on March 1, 1970.
All members are retired and drawing benefits. Benefit terms provide for cost-of-living
adjustments to each member's retirement benefit. There are two types of increases: escalation
by salary in proportion to the current salary of the rank from which the firefighter retired, or an
increase proportionate to the increase in the Seattle-area CPI, with the change computed
annually. Regardless of the increase (or decrease) in the CPI, the benefits are increased at least
2% each year. The former applies to firefighters who retired from service after 1969, their
survivors, and to firefighters who retired for duty disability(but not their survivors)after 1969.
The latter applies to all other types of monthly benefits.
Contributions. In 2016 and prior years, the City was eligible to receive a share of the State's
distribution of the fire insurance premium taxes, subject to providing benefits to covered
members of the Fire Pension Plan. In 2016 the plan received $58,192 from this tax. Pursuant
to the provisions of RCW 41.16.060, the City is allowed to levy up to $0.45 per $1,000 of
assessed valuation to maintain the Fire Pension Fund. Only$0.225 of the levy can be in excess
of the property tax limit pursuant to RCW 84.52.043 and a report from a qualified actuary must
show the property tax is necessary to maintain the fund. The City does not currently levy the
allowable property tax to fund the FPF. In 2017 the state submitted a budget that eliminated
the tax for Cities that did not levy the additional property tax.The City is financially responsible
to fund the plan.
Investments
The Fire Pension Plan does not have an investment policy for investing pension funds. At year
end investments are reported at quoted market price as provided by our broker, US Bank. At
December 31, the Fire Pension Plan had the following investments, reported at fair market
value.
Federal Agency $ 36,469
Mutual Funds $1,929,797
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City of Pasco, Washington 2o16 Comprehensive Annual Tinancial Report
Rate of Return. For the year ended December 31, 2016, the annual money-weighted rate of
return on pension plan investments, net of pension plan investment expense, was -0.86%. The
money-weighted rate of return expresses investment performance, net of investment expense,
adjusted for the changing amount actually invested.
Actuarial Assumptions: The total pension liability was determined by an actuarial valuation as
of December 31, 2016, using the following actuarial assumptions, applied to all periods
included in the measurement:
Inflation 2.50%
Salary increases 3.00%
Investment rate of return 7.10%
Healthy life mortality rates were based on the RP-2014 mortality table, total dataset, fully
generational projected with Scale MP-2014, set back one year for males and set forward one
year for females. Disabled life mortality rates were based on the RP-2014 mortality table, total
dataset, fully generational projected with Scale MP-2014, set back two years for males and
females.
The long-term expected rate of return on pension plan investments assumption was based on
the nature and mix of current and expected pension plan assets over a period of time
representative of the expected length of time between the first day of service and date of the
last benefit payment.
Discount rate. The discount rate used to measure the total pension liability was 7.10%. The
projection of cash flows used to determine the discount rate assumed City contributions were
equal to the statutorily calculated contribution of state fire insurance premiums for the next 20
years. Based on this assumption, the pension plan's fiduciary net position was projected to be
available to make all projected future benefit payment for current plan members. Therefore,
the long-term expected rate of return on pension plan investments was applied to all periods of
projected benefit payments to determine the total pension liability.
Sensitivity of the net pension liability to changes in the discount rate. The net pension liability
of the City, calculated using the discount rate of 7.10%, as well as what the City's net pension
liability would be if it were calculated using a discount rate that is one-percentage-point lower,
6.10%, or one-percentage point higher, 8.10%, than the current rate, follows:
Net Pension Liability I%Decrease Current Discount Rate 1%Increase
$ 1,282,688 $ 1,147,676 $ 1,032,812
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City of Pasco, 'Washington 2oi6 Comprehensive AnnuaCFnanciaCReport
Net Pension Liability
The components of the City's net pension liability at December 31, 2016 are as follows:
Total Pension Liability $ 1,147,676
Less Plan Fiduciary Net Position (2,441,144)
Net Pension Liability/(Asset) $ (1,293,468)
Plan Fiduciary Net Position as a
Percentage of the Total Pension Liability 212.70%
The funded status of the Plan as of December 31, 2016, as well as other required disclosure
information follows:
Total Pension Plan Fiduciary Net Net Pension
Liability Position Liability
(a) (b) (a)-(b)
Balances at January 1, 2016 $ 1,185,733 $ 2,240,970 $ (1,055,237)
Changes for the year:
Service Cost - - -
Interest 79,996 - 79,996
Differences between expected and
actual experience - - -
Change in assumptions - - -
Contributions- employer/other - 58,193 (58,193)
Contributions- employee - -
Net investment income - 267,948 (267,948)
Benefit payments, including refunds -
ofemployee contributions (118,053) (118,053) -
Administrative expense - (7,914) 7,914
Other changes - - -
Net changes (38,057) 200,174 (238,231)
Balances at December 31, 2016 $ 1,147,676 $ 2,441,144 $ (1,293,468)
Healthcare Actuaries performed an actuarial study on January 1, 2016 for this plan. The firm
also completed a roll forward update of the plan's actuals at year end 2016, which is the date of
the pension liability. This plan does not have a special funding situation.
The plan is closed to new participants and there were no changes of assumptions or benefits in
2016. The City's fiscal year and the Fire Pension Plan both observe a fiscal year ending
December 31.
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CiLy of Pasco, 'Washington 2o16 Comprehensive Annual Etnancial Report
The schedule of changes in net pension liability and related ratios, schedule of employer
contributions and schedule of investment returns 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 by the City.
Deferred Outflows of Resources and Deferred Inflows of Resources
At December 31, 2016, the city reported deferred outflows of resources and deferred inflows of
resources related to the Fire Pension Plan from the following sources:
Deferred Outflows Deferred Inflows
Firemen's Pension Plan of Resources of Resources
Difference between expected and actual experience $ - $
Net difference between projected and actual investment
earnings on Pension plan investments 148,836 (88,997)
Changes in proportion and differences between contributions
and proportionate share of contributions - -
Changes of assumptions - -
Contributions subsequent to the measurement date - -
TOTAL $ 148,836 $ (88,997)
Deferred outflows of resources related to pensions resulting from the city's contributions
subsequent to the measurement date will be recognized as a reduction of the net pension
liability in the year ended December 31, 2017. Other amounts reported as deferred outflows
and deferred inflows of resources related to pensions will be recognized in pension expense as
follows:
Year Ended
December 31 Fire Pension Plan
2017 $ 14,960
2018 14,960
2019 14,960
2020 14,960
2021
Thereafter
The Fire Pension Fund is reported in the City's CAFR as a Fiduciary Fund. Pension Liability,
Pension Asset, Deferred Inflows and Deferred Outflows are reported in the Government Wide
Statement of Net Position. A copy of the plan statements can be obtained by request at the
following address: City of Pasco 525 N 3rd Ave., Pasco, WA 99301.
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City of Pasco, 'Washington 2016 Comprehensive AnnuaCFinanciaCReport
NOTE 13: OTHER POST-EMPLOYMENT BENEFITS
LEOFF 1 —Postemployment Healthcare Plan
In addition to the pension benefits outlined in Note 8, Employee Retirement Systems and Pension
Plans,the City of Pasco provides post-retirement health care benefits via a single employer defined
benefit plan in accordance with state statute for retired police officers and firefighters who are
eligible under the Law Enforcement Officers' and Firefighters' (LEOFF 1)plan retirement system.
Effective December 31, 2010, the City adopted the provisions of GASB Statement No. 45,
Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than
Pensions (GASB No. 45), which requires the City to accrue other postemployment benefits
(OPEB)expense related to its postretirement healthcare plan based on a computed annual required
contribution (ARC) that includes the current period's service cost and an amount to amortize
unfunded actuarial accrued liabilities. Instead of recording expense on a "pay-as-you-go" basis,
the City, under GASB No. 45, has recorded a liability of$4,086,203 for the difference between
the actuarially calculated ARC and the estimated contributions made since the adoption of GASB
No. 45. This liability is included in other noncurrent liabilities in the city wide statement of net
position. The effect of GASB No. 45 for the current fiscal year was to decrease the City's excess
of revenue over expenses for the year ended December 31, 2016 by approximately$755,119.
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.
Summary of Significant Accounting Policies: The LEOFF 1 OPEB plan is accounted for using a
modified accrual basis of accounting. Revenues are recognized as soon as they are measureable
and available and expenditures are generally recorded when a liability is incurred except for certain
exceptions like claims and judgements whereby the expenditure is only reported when paid.
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. Retirees are
not required to contribute to the plan.
For the fiscal year ended December 31, 2016, the City contributed $554,588 to the plan for
Healthcare. The City's contribution was entirely to fund 'pay-as-you-go' costs under the Health
Plan and not to prefund benefits. There were no retiree contributions.
Annual OPEB Cost and Net OPEB Obligation: The basis for the City's annual OPEB cost
(expense) is the ARC. The ARC represents a level of funding that, if paid on an ongoing basis, is
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City of Pasco, Washington 2o16 Comprehensive AnnuaCFinanciaCReport
projected to cover the normal cost each year and amortize any unfunded actuarial liabilities. The
following displays the components of the City's annual OPEB cost, the estimated amount
contributed to the Health Plan, and changes in the City's net OPEB obligation to the Health Plan
for the year ended December 31, 2016:
The City's annual OPEB cost,the percentage of annual OPEB cost contributed to the Health Plan,
and the net OPEB obligation follow:
Calculation of Net OPEB Obligation
Normal cost-Entry Age Normal Method $ 16,955
Amortization of unfunded actuarial accrued liability 1,451,583
(UAAL)ARC 1,468,538
Interest on Net OPEB Obligation 124,916
Adjustment to Annual Required Contribution(ARC) (283,747)
Annual OPEB Cost(expense) 1,309,707
Contributions Made (554,588)
Increase in Net OPEB Obligation 755,119
Net OPEB Obligation - beginning of year 3,331,084
Net OPEB Obligation - End of year $ 4,086,203
Percentage of
Fiscal Year Annual OPEB Employer Annual OPEB Net OPEB
Ended Cost Contributions Cost Contributed Obligation
12/31/2014 $ 1,191,159 $ 649,284 54.51% $ 2,523,460
12/31/2015 1,446,611 638,987 44.17% 3,331,084
12/31/2016 1,309,707 554,588 42.34% 4,086,203
Funded Status and Funding Progress: The funded status of the Health Plan as of December 31,
2016,
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City of Pasco, 'Washington 2016 Comprehensive Annual Tinancial Report
Funded Status and Funding Progress
Actuarial Accrued Liabiliky(AAL)Entry Age Normal $ 16,413,817
Actuarial Value of Plan Assets -
Unfunded Actuarial Accrued Liability(UAAL) $ 16,413,817
Funded Ratio (actuarial value ofplan assets divided by AAL) 0.0%
Covered Payroll 225,834
UAAL as a Percentage of Covered Payroll 7268%
Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and
assumptions about the probability of occurrence of events far into the future. Examples include
assumptions about future employment, mortality, and healthcare cost trend. Actuarially
determined amounts are subject to continual revision as actual results are compared with past
expectations and new estimates are made about the future. GASB 45 requires that the schedule of
funding progress,presented as required additional information following the notes to the financial
statements,presents multi-year trend information that shows whether the actuarial value of Health
Plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for
benefits.
Actuarial Methods and Assumptions: The basis of projections of benefits for financial reporting
purposes is the substantive plan (the Health Plan as understood by the City and members of the
Health Plan) and includes the types of benefits provided at the time of each valuation and the
historical pattern of sharing of benefit costs between the City and members of the Health Plan to
that point. The actuarial methods and assumptions used include techniques that are designed to
reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of
assets, consistent with the long-term perspective of the calculations.
The December 31, 2016 roll forward valuation used the entry age normal actuarial cost method.
The actuarial assumptions included a 3.75% investment rate of return (net of administrative
expenses)and an initial annual healthcare cost trend rate of 8.5%for pre-Medicare expenses,to an
ultimate rate of 3.84% after 61 years. The Medicare trend assumption is 5.5%, to an ultimate rate
of 3.84%after 61 years. The trend for the Excise Tax threshold is 0%until 2020,when a trend rate
of 4.24% is used. The trend for all future years after that year is 3.24%. All trend rates include a
3.0%inflation assumption. The UAAL is amortized as a level dollar amount on an open basis over
15 years.
As of December 31, 2016, the City of Pasco has a total of thirty-one LEOFF 1 members in this
plan. Twenty-nine of those members are retired and two are still active employees.
There is a schedule of funding progress presented as RSI, immediately following the notes to the
financial statements. Trending information regarding plan assets is not available because there are
no assets set aside to fund this plan.
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CiLy of Pasco, -Nashinaton 2016 Comprehensive AnnuaCFinanciaCR.eport
Fire Pension—Postemployment Healthcare Plan
Effective December 31, 2010, the City adopted the provisions of GASB Statement No. 43,
Financial Reporting for Postemployment Benefits Other Than Pension Plans (GASB No. 43),
which requires the City to accrue other postemployment benefits (OPEB) expense related to its
postretirement healthcare plan based on a computed annual required contribution (ARC) that
includes the current period's service cost and an amount to amortize unfunded actuarial accrued
liabilities. This cumulative reporting of the underfunding of the ARC does not currently apply to
the City's Fire Pension OPEB Plan because it has been fully funded for several years. The City
anticipates the funds on deposit in the Fire Pension Postemployment Healthcare Plan will be
sufficient to provide medical benefits to all remaining participants. The most current actuary study
shows the plan has a net OPEB Asset of$1,193,257.
Plan Description:As required by the Revised Code of Washington(RCW)Chapter 41.26,the City
provides lifetime medical care for members of the Law Enforcement Officers and Firefighters
(LEOFF)retirement system hired before October 1, 1977 under a single employer, defined benefit
healthcare plan administered by the City. The members' necessary hospital, medical, and nursing
care expenses not payable by worker's compensation, social security, insurance provided by
another employer, or other pension plan, or any other similar source are covered. Most medical
coverage for eligible retirees is provided by the City's employee medical insurance program.Under
authorization of the LEOFF Disability Board, direct payment is made for other retiree medical
expenses not covered by standard medical plan benefit provisions. Members of the Fire Pension
plan purchase medical insurance through the City's medical insurance program. There are currently
six eligible participants in this plan.
Funding Policy: Funding for Fire Pension 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.
For the fiscal year ended December 31, 2016, the City contributed $0 to the Health Plan. There
were no retiree contributions.
Annual OPEB Cost and Net OPEB Obligation: The basis for the City's annual OPEB cost(expense)
is the ARC. The ARC represents a level of funding that, if paid on an ongoing basis, is projected
to cover the normal cost each year and amortize any unfunded actuarial liabilities (or funding
excess) over a period not to exceed ten years. The Actuarial Accrued Liability is defined as the
excess of the present value of an OPEB Fund's total of future benefits and fund administration
expense over the present value of the future normal cost of those benefits. In essence it is the
amount an actuary anticipates at a certain point in time, will cover all future expenses of a plan.
The current Actuarial Accrued Liability for the Fire Pension OPEB Plan is$1,471,148 and the fund
assets at year end are $2,664,405, resulting in the plan being overfunded by $1,193,257. Because
the plan is fully funded,the table for annual OPEB cost is not applicable and has not been included.:
Funded Status and Funding Progress: The funded status of the Fire Pension OPEB Plan as of
December 31, 2016 is as follows:
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City of Pasco, 'Washington 2016 Comprehensive AnnuaCFinanciaCReport
Funded Status and Funding Progress
Actuarial Accrued Liabililty (AAL) Entry Age Normal $ 1,471,148
Actuarial Value of Plan Assets 2,664,405
Actuarial Accrued Asset $ (1,193,257)
Funded Ratio (actuarial value of plan assets divided by AAL) 181.1%
Covered Payroll N/A
UAAL as a Percentage of Covered Payroll 0.00%
Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and
assumptions about the probability of occurrence of events far into the future. Examples include
assumptions about future inflation, mortality, and healthcare cost trend. Actuarially determined
amounts are subject to continual revision as actual results are compared with past expectations and
new estimates are made about the future. GASB 43 requires that the schedule of funding progress,
presented as required supplementary information following the notes to the financial statements,
presents multi-year trend information that shows whether the actuarial value of Health Plan assets
is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits.
Actuarial Methods and Assumptions: The basis of projections of benefits for financial reporting
purposes is the substantive plan (the Health Plan as understood by the City and members of the
Health Plan) and includes the types of benefits provided at the time of each valuation and the
historical pattern of sharing of benefit costs between the City and members of the Health Plan to
that point. The actuarial methods and assumptions used include techniques that are designed to
reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of
assets, consistent with the long-term perspective of the calculations.
The December 31, 2016 roll forward valuation used the entry age normal actuarial cost method.
The actuarial assumptions included a 7.20% investment rate of return (net of administrative
expenses) The Medicare trend assumption is 5.5%, to an ultimate rate of 3.8% after 61 years. The
trend for the Excise Tax threshold is 0%until 2020, when a trend rate of 0.00% is used. The trend
for all future years after that year is 3.24%. All trend rates include a 3.0% inflation assumption.
NOTE 14: 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
material known or pending claims. As discussed in Note 3. F, Long-term Debt, the City is
contingently liable for repayment of debt.
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City of Pasco, 'Washington 2o16 Comprehensive AnnuaC E'inanciaCReport
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.
Currently, there is an underground fire in a non-municipal Pasco landfill which closed in
1998. The Washington State Department of Ecology(DOE) is proposing to issue an enforcement
order to parties collectively known as Potentially Liable Persons (PLPs). The City entered into an
"Institutional Control" agreement with the DOE to regulate development and provide for the
conversion of private water wells located down-plume from the site to be abandoned in favor of
using the City's municipal water system. It is the City's understanding that,because of its entering
into this agreement, the DOE is excluding the City from being designated as a PLP.
NOTE 15: PRIOR PERIOD CORRECTIONS
General Fund 100 - $11,431
Ambulance Fund 150 - $111,650
Water/Sewer Utility Fund 410—($123,081)
All utility billing activity is processed through one software system. Included in this monthly
billing activity are charges related to services supplied by the water, sewer, stormwater, and
ambulance funds. Additionally, there are miscellaneous service charges that benefit the general
fund. During 2016,the activity and account coding of the billing system was analyzed. As a result
of this analysis, the need to recognize outstanding accounts receivable totals in funds other than
the water/sewer utility was revealed. As part of this recognition, the outstanding receivables at the
end of 2015 were recognized in both the general and ambulance funds.
LID Fund 246 - $40,301
In 2016 a prior period adjustment was done in fund 246 to account for an inter-fund loan payable
that should have been reported in the fund. In 2011 the Pension Trust fund had loaned fund 246
funds for LID assessments and the fund had been making payments each year but no liability had
been reported for the loan. The Trust Fund reported the loan as a "Note Receivable", which was
reclassified to an inter-fund loan in 2016.
Firemen's Pension Trust Fund 610 - $1,185,733
The City of Pasco adopted GASB 68 in 2015 which mandated changes in pension accounting and
financial statement presentation. 2015 beginning balances were restated to include the addition of
all pension components. The Firemen's Pension Trust Fund recorded a prior period correction in
2015 to restate beginning balances and record the pension liability. The liability for the trust fund
should have been recorded in the government wide statements and not the trust fund.A prior period
adjustment was done in 2016 to remove the $1,185,733 liability from the trust fund.
NOTE 16: SUBSEQUENT EVENT
There are no subsequent events to report.
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City of Pasco, -Washington 2016 Comprehensive AnnuaC E'inanciaCRepoYt
REQ UIRED S UPPLEMENTAR Y INFORMA TION
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City of Pasco, WashfRgton 2016 Comprehensive AnnuaCFinanciaCR.eport
Required Supplementary Information
Firemen's OPEB Fund
Although a schedule of contributions from the employer and other contributing entities is a GASB
requirement for the Firemen's OPEB Fund,we did not include one because the plan is fully funded
and there have been no contributions for the past five years.
A schedule of funding progress for the Firemen's OPEB Fund is included below. The plan is
fully funded and all participants are retired.
Unfunded
Actuarial
Actuarial Accrued UAAL as a
Actuarial Accrued Liabilities Covered Percentage of
Valuation Date Asset Value Liabilities (UAAL) Funded Ratio Payroll Covered Payroll
12/31/2016 $2,664,405 $ 1,471,148 $ (1,193,257) 181.11% N/A N/A
12/31/2015 2,538,093 1,420,555 (1,117,538) 178.67% N/A N/A
12/31/2014 2,650,369 1,988,000 (662,369) 133.32% N/A N/A
Required Supplementary Information
LEOFF 1 OPEB Fund
The following is a schedule of contributions from the employer for the LEOFF 1 OPEB Plan
Actual Annual Required Percentage o
Employer Total Contribution ARC
Fiscal Year Ending Contributions Contributions (ARC) Contributed
12/31/2016 $ 554,588 $ 554,588 $ 1,468,538 37.76%
12/31/2015 638,987 638,987 1,579,238 40.46%
12/31/2014 649,284 649,284 1,290,122 50.33%
Unfunded
F__I Actuarial
Actuarial Accrued UAAL as a
Actuarial Accrued Liabilities Covered Percentage of
Valuation Date Asset Value Liabilities (UAAL) Funded Ratio Payroll Covered Payroll
12/31/2016 $ - $16,413,817 $ 16,413,817 1 0.00%1 $225,834 1 7268%
12/31/2015 - 19,361,802 19,361,802 1 0.00%1 218,161 1 8875%
12/31/2014 - 19,880,000 19,880,000 1 0.00%1 219,984 1 9037%
State Retirement Plans
Schedule of Proportionate Share of Net Pension Liability
As of June 30
Last 3 Fiscal Years*
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City of Pasco, 'Washington 2o16 Comprehensive AnnuaC E'inanciaCReport
PERS PLAN 1 2014 2015 2016
Employer's percentage of the net pension liability 0.097647% 0.102321% 0.098322%
Employer's proportionate share of the collective net
pension liability $ 4,919,014 $ 5,352,340 $ 5,280,355
Employer's covered employee payroll $ 342,721 $ 163,430 $ 104,245
Employer's proportionate share of the net pension
liability as a percentage of covered employee payroll 1435.28% 3275.00% 5065.33%
Plan fiduciary net position as a percentage of the total 61.19% 59.10% 57.03%
pension liability
PERS PLAN 2/3
Employer's percentage of the net pension liability 0.114462% 0.125949% 0.122675%
Employer's proportionate share of the collective net
pension liability $ 2,313,690 $ 4,500,230 $ 6,176,589
Employer's covered employee payroll $10,474,619 $11,212,390 $11,878,130
Employer's proportionate share of the net pension
liability as a percentage of covered employee payroll 22.09% 40.14% 52.00%
Plan fiduciary net position as a percentage of the total 93.29% 89.20% 85.82%
pension liability
LEOFF 1
Employer's percentage of the net pension asset 0.067804% 0.067488% 0.098322%
Employer's proportionate share of the collective net
pension asset $ (822,321) $ (813,380) $ (688,499)
Employer's covered employee payroll $ 219,984 $ 207,267 $ 226,769
Employer's proportionate share of the net pension
asset as a percentage of covered employee payroll -373.81% -392.43% -303.61%
Plan fiduciary net position as a percentage of the total 126.91% 127.36% 123.74%
pension asset
LEOFF 2
Employer's percentage of the net pension asset 0.365709% 0.405844% 0.400187%
Employer's proportionate share of the collective net
pension asset $(4,853,116) $ (4,171,265) $(2,327,608)
State's proportionate share of the net pension asset
associated with the employer (3,193,777) (2,758,046) (1,517,431)
TOTAL $(8,046,893) $ (6,929,311) $(3,845,039)
Employer's covered employee payroll $10,497,629 $12,154,638 $12,622,501
Employer's proportionate share of the net pension
asset as a percentage of covered employee payroll -76.65% -57.01% -30.46%
Plan fiduciary net position as a percentage of the total 116.75% 111.67% 106.04%
pension asset
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City of Pasco, 'Washington 2o16 Comprehensive AnnuaCFinanciaCReport
Schedule of Employer Contributions
As of December 31
Last 3 Fiscal Years
PERS PLAN 1 2014 2015 2016
Statutorily or contractually required contributions $ 31,484 $ 16,252 $ 10,583
Contributions in relation to the statutorily or contractually
required contributions (31,484) (16,252) (10,583)
Contribution deficiency(excess) $ - $ - $ -
Covered employer payroll $ 342,721 $ 163,430 $ 104,245
Contributions as a percentage of covered employee payroll 9.19% 9.94% 10.15%
PERS PLAN 2/3
Statutorily or contractually required contributions $ 964,775 $ 1,140,430 $ 1,327,926
Contributions in relation to the statutorily or contractually
required contributions (964,775) (1,140,430) (1,327,926)
Contribution deficiency(excess) $ - $ - $ -
Covered employer payroll $10,474,619 $11,212,390 $11,877,299
Contributions as a percentage of covered employee payroll 9.21% 10.17% 11.18%
LEOFF 1
Statutorily or contractually required contributions $ 396 $ 373 $ 407
Contributions in relation to the statutorily or contractually
required contributions (396) (373) (407)
Contribution deficiency(excess) $ - $ - $ -
Covered employer payroll $ 219,984 $ 207,267 $ 225,834
Contributions as a percentage of covered employee payroll 0.18% 0.18% 0.18%
LEOFF 2
Statutorily or contractually required contributions $ 549,396 $ 635,688 $ 660,156
Contributions in relation to the statutorily or contractually
required contributions (549,396) (635,688) (660,156)
Contribution deficiency(excess) $ - $ - $ -
Covered employer payroll $10,497,629 $12,154,638 $12,622,501
Contributions as a percentage of covered employee payroll 5.23% 5.23% 5.23%
*These schedules will be built prospectively until they contain ten years of data.
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City of Pasco, 'Washington 2o16 Comprehensive AnnuaCFnanciaCReport
Schedule of Contributions
Fire Pension Fund
2015 201
Statutorially Determined Contribution $ 54,506 $ 58,193
Less Contributions Made (54,506) (58,193)
Contribution Deficiency(excess) - -
Covered-Employee Payroll $ - $ -
Contributions as a percentage of covered employee payroll n/a n/a
This schedule will be built prospectively until it contains 10 years of data
Notes to Schedule:
Contributions came from State Fire Insurance Prem zns.
Schedule of Investment Returns -Fire Pension Plan
2014 2015 2016
Annual Money Weighted Rate of Return,Net of
Investment Expense 3.30% -0.86% 12.14%
GASB 68 requires a disclosure of the changes in Net Pension Liability for the last 10 fiscal years, or as
many years as are available.
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City of Pasco, 'Washington 2016 Comprehensive Annual Tinancial Report
Schedule of Changes in the City's Net Pension Liability and Related Ratios
Fire Pension Fund- For Years Ended:
Total Pension Liability 2015 2016
Service Cost $ - $ -
Interest 82,477 79,996
Changes ofbenefit terms - -
Differences between expected and actual experience - -
Changes of assumptions - -
Benefit payments, including refunds of employee contnbutions (116,770) (118,053)
Net change in total pension liability (34,293) (38,057)
Total pension liability- beginning 1,220,026 1,185,733
Total pension liability- ending $ 1,185,733 $ 1,147,676
Plan Fiduciary Net Position
Contributions- employer $ 54,506 $ 58,193
Contributions- employee - -
Net investment income (19,689) 267,948
Benefit payments, including refunds of employee contributions (116,770) (118,053)
Administrative expense (3,398) (4,414)
Other - (3,500)
Net change in plan fiduciary net position (85,351) 200,174
Plan fiduciary net position- beginning 2,326,321 2,240,970
Plan fiduciary net position-ending 2,240,970 2,441,144
City's net pension liability- $ (1,055,237) $ (1,293,468)
Plan fiduciary net position as a percentage of the total pension 188.99% 212.70%
Covered employee payroll - -
City's net pension liability as a percentage of covered employee payroll n/a n/a
Notes to schedule:
The following assumptions were adopted as of 1/1/2015:discount rate 7.1%, salary increases 3.00%, CPI
2.50%,mortality tables updated to RP-2014 with Scale MP-2014 projections.
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City of Pasco, 'Washington 2oi6 Comprehensive AnnuaCFnanciaCR.eport
COMBINING AND INDIVIDUAL FUND
STATEMENTS AND SCHEDULES
Nonmajor Governmental Funds
Special Revenue Funds
Special revenue funds are used to accoutn for specific revenues that are legally restricted to expenditures for
particular purposes.
Debt Service Funds
Debt service fundsare used to account for the accumulation of resources for and the payment of general long-term
debtprincipal and interest.
Permanent Funds
Permanent funds are used to report resources that are legally restricted to the extent that only earnings, not
principal, may be used for purposes that support the reporting government's programs.
Major Governmental Fund
Capital Project Fund
Capital project funds are used to account for the acquistion and construction of major capital facilities other than
those financed by proprietary funds and trust funds.
92
City of Pasco, 'Washington 2o16 Comprehensive AnnuaCFinanciaCReport
Combining Balance Sheet
Nonmajor Other Governmental Funds
December 31,2016
Total Total Cemetery
Nonmajor Nonmajor Perpetual Care Total
Other Special Debt Nonruajor Other
Revenue Service Permanent Governmental
ASSETS
Cash&cash equivalents $ 13,006,141 $ 533,866 $ 30,611 $ 13,570,618
Restricted cash:
Program,grant,donation 2,519 - 2,519
Customer deposits 10,675 - 10,675
Cemetery endowment - - 455,173 455,173
Debt service - 264,751 264,751
Investments 5,954,510 - 5,954,510
Receivables(net of allowances):
Taxes 422,208 - 422,208
Customers 749,048 - 645 749,693
Interfund loans 587,517 - 587,517
Grants 182,751 - 182,751
Special assessments &loans 148,097 395,494 543,591
Due from other governments 100,000 - 100,000
Total assets 21,163,466 1,194,111 486,429 22,844,006
LIABILITIES
Accounts payable 403,855 - 403,855
Interfund loans payable 719,308 442,667 1,161,975
Due to other funds 275,000 - 275,000
Deposits payable from restricted assets 10,676 - 10,676
Total liabilities 1,408,839 442,667 1,851,506
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues 243,504 395,494 638,998
FUND BALANCES
Nonspendable
Cemetery permanent fund - - 486,429 486,429
Prepaid items - - - -
Restricted
Street and boulevard 6,986,140 - - 6,986,140
Litter&housing abatement 561,571 - - 561,571
Park development 2,152,337 - - 2,152,337
Capital improvements 5,927,245 - - 5,927,245
Economic development 114,353 - - 114,353
Debt guarantee - 634,814 - 634,814
Committed
Special revenue fiords 3,769,477 - 3,769,477
Unassigned - (278,864) (278,864)
Total fund balances 19,511,123 355,950 486,429 20,353,502
Total liabilities,deferrend inflows of
resources and find balances $ 21,163,466 $ 1,194,111 $ 486,429 $ 22,844,006
93
City of Pasco, 'Washington 2o16 Comprehensive AnnuaCFinanciaCReport
Combining Statement of Revenues,Expenditures, and Changes in Fund Balances
Nonmajor Other Governmental Funds
For the Year Ended December 31,2016
Total Total Cemetery
Nonmajor Nonmajor Perpetual Care Total
Other Special Debt Nonmajor Other
Revenue Service Permanent Governmental
REVENUES
Taxes $ 3,615,780 $ 124,343 $ - $ 3,740,123
Licenses and permits 473,823 - 473,823
Intergovermnental revenue 2,867,845 - 2,867,845
Charges for services 9,201,131 - 18,609 9,219,740
Fines and forfeitures 235,467 - 235,467
Miscellaneous revenue 1,921,687 202,630 122 2,124,439
Total revenues 18,315,733 326,973 18,731 18,661,437
EXPENDITURES
Current:
Public safety 5,551,396 - 5,551,396
Transportation 2,155,845 - 2,155,845
Natural and economic environment 3,662,557 - 3,662,557
Culture and recreation 2,859,566 - 2,859,566
Capital outlay: -
Public safety 44,201 - 44,201
Transportation 32,059 - 32,059
Debt service:
Principal - 515,000 515,000
Interest 29,644 51,210 80,854
Total expenditures 14,335,268 566,210 - 14,901,478
Excess of revenues
over expenditures 3,980,465 (239,237) 18,731 3,759,959
OTHER FINANCING SOURCES(USES)
Sale of assets 54,680 - - 54,680
Transfers in 1,399,097 204,442 1,603,539
Transfers out (2,633,915) (553,109) (3,187,024)
Total other financing sources(uses) (1,180,138) (348,667) - (1,528,805)
Net change in fiord balances 2,800,327 (587,904) 18,731 2,231,154
Fund balances-beginning(Adjusted-See Note 15 ) 16,710,796 943,854 467,698 18,122,348
Fund balances-ending $ 19,511,123 $ 355,950 $ 486,429 $ 20,353,502
94
City of Pasco, 'Washington 2016 Comprehensive AnnuaCFinanciaCReport
Combining Balance Sheet
Nonmajor Special Revenue Funds
December 31,2016
Corns pity
City Arterial I-182 Traffic Street Development
Street Street Impact Overlay Block Grant
ASSETS
Cash&cash equivalents $ 71,642 $ 970,199 $ 1,043,083 $ 2,900,958 $ 25,919
Restricted cash:
Customer deposits -
Cemetery endowment
Debt service
Investments -
Restricted investment -
Receivables(net of allowances):
Taxes 167,896 75,797 65,395 -
Customers 87,943 -
Interfund loans -
Grants 12,866 167,612
Special assessments &loans 148,097
Due from other governments -
Total assets 340,347 1,045,996 1,043,083 2,966,353 341,628
LIABILITIES
Accounts payable 40,671 26,412 5,442
Interfmd loans payable -
Due to other funds 75,000
Deposits payable from restricted assets -
Total liabilities 40,671 26,412 80,442
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues 148,097
FUND BALANCES
Nonspendable
Cemetery permanent fund
Prepaid items
Restricted
Street and boulevard 1,026,186 1,043,083 2,939,941
Litter&housing abatement
Park development
Capital improvements
Economic development 113,089
Debt guarantee
Committed
Special revenue finds 299,676 19,810
Unassigned
Total fund balances 299,676 1,045,996 1,043,083 2,939,941 113,089
Total liabilities,deferrend inflows of
resources and fund balances $ 340,347 $ 1,045,996 $ 1,043,083 $ 2,966,353 $ 341,628
95
City of Pasco, 'Washington 2016 Comprehensive AnnuaCF'manciaCReport
M.L.King
Comrmmity Ambulance City View Boulevard Athletic Golf Senior Multi-Modal
Center Services Cemetery Perpetual Program Course Center Facility
$129,707 $ 10,686 $ 128,585 $ 1,140,379 $ 237,826 $206,133 $ 36,112 $ 224,957
4,750 300 5,625
249,034
375,710 898 2,000 2,919 4,046
587,517
2,273
129,707 386,396 129,483 1,976,930 240,345 212,883 41,604 234,628
2,420 38,176 641 21,822 9,923 8,693 3,588
200,000
4,750 300 5,626
2,420 238,176 641 21,822 14,673 8,993 9,214
53,980 41,427
1,976,930
127,287 148,220 74,862 218,523 156,783 32,611 225,414
127,287 148,220 74,862 1,976,930 218,523 156,783 32,611 225,414
$129,707 $ 386,396 $ 129,483 $ 1,976,930 $ 240,345 $212,883 $ 41,604 $ 234,628
96
City of Pasco, 'Washington 2016 Comprehensive AnnuaCFinanciaCReport
Combining Balance Sheet
Nonmajor Special Revenue Funds
December 31,2016
Rivershore Trail Special
School &Marina Lodging Litter Revolving
Impact Fees Maintenance Assessment Abatement Abatement
ASSETS
Cash&cash equivalents $ 128,171 $ 34,165 $ 1,264 $ 5,897 $ 284,471
Restricted cash:
Customer deposits
Cemetery endowment
Debt service
Investments
Restricted investment
Receivables(net of allowances):
Taxes 39,884
Customers 1,742 2,500 271,290
Interfimd loans
Grants
Special assessments &loans
Due from other governments
Total assets 128,171 35,907 41,148 8,397 555,761
LIABILITIES
Accounts payable 121,758 728 39,884 245 2,342
Interfimd loans payable
Due to other fiords
Deposits payable from restricted assets
Total liabilities 121,758 728 39,884 245 2,342
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues
FUND BALANCES
Nonspendable
Cemetery permanent fiord
Prepaid items
Restricted
Street and boulevard
Litter&housing abatement 8,152 553,419
Park development
Capital improvements
Economic development 1,264
Debt guarantee
Committed
Special revenue fiords 6,413 35,179
Unassigned
Total fimd balances 6,413 35,179 1,264 8,152 553,419
Total liabilities,deferrend inflows of
resources and fund balances $ 128,171 $ 35,907 $ 41,148 $ 8,397 $ 555,761
97
City of Pasco, -Washington 2016 Comprehensive AnnuaCFnanciaCR.eport
Total
T.R.A.C. Stadium/ Nonmajor
Development Park Capital Economic Convention Special
&Operating Development Improvements Development Center Revenue
$ 73,929 $ 1,156,201 $ 1,965,007 $ 1,733,019 $ 497,831 $ 13,006,141
10,675
996,136 3,962,238 747,102 5,954,510
36,618 36,618 422,208
749,048
587,517
182,751
148,097
100,000 100,000
210,547 2,152,337 5,927,245 2,480,121 534,449 21,163,466
80,483 627 403,855
475,938 243,370 719,308
275,000
10,676
556,421 243,997 1,408,839
243,504
6,986,140
561,571
2,152,337 2,152,337
5,927,245 5,927,245
114,353
210,547 1,923,700 290,452 3,769,477
210,547 2,152,337 5,927,245 1,923,700 290,452 19,511,123
$ 210,547 $ 2,152,337 $ 5,927,245 $ 2,480,121 $ 534,449 $ 21,163,466
98
City of Pasco, 'Washington 2016 Comprehensive Annual Tinancial Report
Combining Statement of Revenues,Expenditures,and Changes in Fund Balances
Nonmajor Special Revenue Funds
For the Year Ended December 31,2016
Community
City Arterial I-182 Traffic Street Development
Street Street Impact Overlay Block Grant
REVENUES
Taxes $ 212,121 $ - $ - $ 850,425 $
Licenses and pemuts 473,823
Intergovenunentalrevenue 1,153,921 496,226 809,092
Charges for services 6,650 246,786 -
Fines and forfeitures -
Miscellaneous revenue 6,982 9,647 7,133 16,159 11,061
Total revenues 1,846,847 512,523 253,919 866,584 820,153
EXPENDITURES
Current:
Public safety -
Transportation 2,038,847 43,030 -
Natural and economic environment 492,930
Culture and recreation -
Capital outlay:
Public safety
Transportation 32,059
Debt service:
Principal
Interest -
Total expenditures 2,070,906 - - 43,030 492,930
Excess ofrevenues
over expenditures (224,059) 512,523 253,919 823,554 327,223
OTHER FINANCING SOURCES(USES)
Sale ofassets -
Transfers in 544,097
Transfers out (763,592) (123,132) (289,000)
Total other financing sources(uses) 544,097 (763,592) (123,132) - (289,000)
Net change in fiord balances 320,038 (251,069) 130,787 823,554 38,223
Fund balances-beginning(Adjusted-See Note 15 ) (20,362) 1,297,065 912,296 2,116,387 74,866
Fund balances-ending $ 299,676 $ 1,045,996 $ 1,043,083 $ 2,939,941 $ 113,089
99
City of Pasco, 'Washington 2o16 Comprehensive AnnuaCF'manciaCReport
M.L.King
Corm Rmity Ambulance City View Boulevard Athletic Golf Senior Multi-Modal
Center Services Cemetery Perpetual Program Course Center Facility
$ $ $ $ $ $ $ $
1,290 16,487 70,965
2,993 4,686,236 248,456 131,619 141,041 1,382,764 24,525
40,055 4,514 678 32,082 3,920 277,433 43,615 76,568
43,048 4,692,040 249,134 163,701 144,961 1,660,197 84,627 147,533
5,551,396
61,152
255,999
105,495 117,597 1,693,955 326,699
44,201
105,495 5,595,597 255,999 - 117,597 1,693,955 326,699 61,152
(62,447) (903,557) (6,865) 163,701 27,364 (33,758) (242,072) 86,381
120,000 420,000 60,000 250,000
(75,000)
120,000 420,000 60,000 (75,000) - 250,000 -
57,553 (483,557) 53,135 88,701 27,364 (33,758) 7,928 86,381
69,734 631,777 21,727 1,888,229 191,159 190,541 24,683 139,033
$ 127,287 $ 148,220 $ 74,862 $ 1,976,930 $ 218,523 $ 156,783 $ 32,611 $ 225,414
100
City of Pasco, 'Washington 2016 Comprehensive Annual Tinancial Report
Combining Statement of Revenues,Expenditures,and Changes in Fund Balances
Nonmajor Special Revenue Funds
For the Year Ended December 31,2016
Rivershore Trail Special
School &Marina Lodging Litter Revolving
Impact Fees Maintenance Assessment Abatement Abatement
REVENUES
Takes $ - $ - $ 277,117 $ - $
Licenses and pemvts
Intergovenmrentalrevenue
Charges for services 1,902,075 10,625 124,153
Fines and forfeitures 235,467
Miscellaneous revenue 851 17,762 136 35 7,060
Total revenues 1,902,926 17,762 277,253 10,660 366,680
EXPENDITURES
Current:
Public safety
Transportation 12,816
Natural and economic environment 1,915,573 162,372
Culture and recreation 12,592 308,696
Capital outlay:
Public safety
Transportation
Debt service:
Principal
Interest
Total expenditures 1,915,573 12,592 308,696 12,816 162,372
Excess of revenues
over expenditures (12,647) 5,170 (31,443) (2,156) 204,308
OTHER FINANCING SOURCES(USES)
Sale of assets
Transfers in 5,000
Transfers out
Total other financing sources(uses) - 5,000 -
Net change in fund balances (12,647) 5,170 (31,443) 2,844 204,308
Fund balances-beginning(Adjusted-See Note 15 ) 19,060 30,009 32,707 5,308 349,111
Fund balances-ending $ 6,413 $ 35,179 $ 1,264 $ 8,152 $ 553,419
101
City of Pasco, 'Washington 2o16 Comprehensive .annual TinanciaCReport
Combining Statement of Revenues,Expenditures,and Changes in Fund Balances
Nonmajor Special Revenue Funds
For the Year Ended December 31,2016
Total
T.R.A.C. Nonmajor
Development Park Capital Economic Stadium/ Special
&Operating Development Improvement Development Conv.Center Revenue
$ 276,864 $ - $ 1,722,389 $ - $ 276,864 $ 3,615,780
473,823
319,864 2,867,845
293,208 9,201,131
235,467
427 11,979 45,669 1,274,913 33,008 1,921,687
277,291 305,187 1,768,058 1,594,777 309,872 18,315,733
5,551,396
2,155,845
691,266 144,417 3,662,557
273,948 20,584 2,859,566
44,201
32,059
18,851 10,793 29,644
273,948 - - 710,117 175,794 14,335,268
3,343 305,187 1,768,058 884,660 134,078 3,980,465
54,680 54,680
1,399,097
(287,560) (642,916) (452,715) (2,633,915)
- (287,560) (642,916) (398,035) - (1,180,138)
3,343 17,627 1,125,142 486,625 134,078 2,800,327
207,204 2,134,710 4,802,103 1,437,075 156,374 16,710,796
$ 210,547 $ 2,152,337 S 5,927,245 $ 1,923,700 $ 290,452 $19,511,123
102
City of Pasco, 'Washington 2016 Comprehensive AnnuaCFinanciaCReport
Combining Balance Sheet
Nonmajor Debt Service Funds
December 31,2016
Total
1999 Library/ 2002 Local Improv. Nonmajor
LID LID Fire Station Unl.Tax G.O. District Debt
Loans Bonds Bonds Refunding Bonds Guaranty Service
ASSETS
Cash&cash equivalents $ - $ - $ $ $ 533,866 $ 533,866
Restricted cash:
Debt service 163,803 948 100,000 264,751
Receivables(net of allowances):
Special assessments &loans 305,263 90,231 395,494
Total assets 469,066 91,179 633,866 1,194,111
LIABILITIES
Interfimd loans payable 442,667 442,667
Total liabilities 442,667 - 442,667
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues 305,263 90,231 395,494
FUND BALANCES
Restricted
Debt guarantee - 948 633,866 634,814
Unassigned (278,864) (278,864)
Total fiord balances (278,864) 948 633,866 355,950
Total liabilities,deferrend inflows of
resources and fund balances $ 469,066 $ 91,179 $ $ $ 633,866 $ 1,194,111
103
City of Pasco, 'Washington 2016 Comprehensive AnnualginanciaCReport
Combining Statement of Revenues,Expenditures,and Changes in Fund Balances
Nonmajor Debt Service Funds
For the Year Ended December 31,2016
Total
1999 Library/ 2002 Local Improv. Nonmajor
LID LID Fire Station Unl.Tax G.O. District Debt
Loans Bonds Bonds Refunding Bonds Guaranty Service
REVENUES
Taxes $ - $ - $ 122,619 $ 1,724 $ - $ 124,343
Miscellaneous revenue 162,437 27,927 172 449 11,645 202,630
Total revenues 162,437 27,927 122,791 2,173 11,645 326,973
EXPENDITURES
Current:
Debt service:
Principal - 115,000 400,000 515,000
Interest 21,110 7,800 22,300 51,210
Total expenditures 21,110 122,800 422,300 - - 566,210
Excess of revenues
over expenditures 141,327 (94,873) (299,509) 2,173 11,645 (239,237)
OTHER FINANCING SOURCES(USES)
Transfers in - 204,442 204,442
Transfers out (253,109) (300,000) (553,109)
Total other financing sources(uses) - 204,442 (253,109) (300,000) (348,667)
Net change in fiord balances 141,327 (94,873) (95,067) (250,936) (288,355) (587,904)
Fund balances-beginning(Adjusted-See Note 15 ) (420,191) 95,821 95,067 250,936 922,221 943,854
Fund balances-ending $ (278,864) $ 948 $ - $ - $ 633,866 $ 355,950
104
City of Pasco, 'Washington 2016 Comprehensive Annual Tinancial Report
Statement of Revenues, Expenditures, and Changes in Fund Balances-Budget to Actual
Construction Fund-Major Fund
For the Year Ended December 31, 2016
CONSTRUCTION FUND
Original Final Variance to
Budget Budget Actual Final Budget
REVENUES
Intergovernmentalrevenue $ 9,883,000 $ 9,883,000 $ 343,019 $ (9,539,981)
Miscellaneous revenue 71,000 71,000 26,880 (44,120)
Total revenues 9,954,000 9,954,000 369,899 (9,584,101)
EXPENDITURES
General government - - 10,648 (10,648)
Public safety - - 769,244 (769,244)
Transportation - - 192,030 (192,030)
Culture and recreation - - 14,120 (14,120)
Capital outlay.
General government 1,905,000 1,905,000 74,657 1,830,343
Public safety 3,221,000 3,221,000 5,428,025 (2,207,025)
Transportation 12,978,000 12,978,000 963,253 12,014,747
Natural&economic environment 518,400 (518,400)
Culture and recreation 2,006,000 2,006,000 845,130 1,160,870
Total expenditures 20,110,000 20,110,000 8,815,507 11,294,493
Excess of revenues over(under)expenditures (10,156,000) (10,156,000) (8,445,608) 1,710,392
OTHER FINANCING SOURCES
Transfers in 11,131,000 12,131,000 8,432,675 3,698,325
Total other financing sources 11,131,000 12,131,000 8,432,675 3,698,325
Net change in fund balances 975,000 1,975,000 (12,933) (1,987,933)
Fund balances-beginning 362,570 238,433 238,433 -
Fund balances-ending $ 1,337,570 $ 2,213,433 $ 225,500 $ (1,987,933)
105
City of Pasco, 'Washington 2o16 Comprehensive AnnuaCTinanciaCR.eport
Schedule of Revenues and Expenditures-Budget to Actual
Nonmajor Other Governmental Funds
For the Year Ended December 31,2016
Revenues Expenditures
Final Variance to Final Variance to
Budget Actual Final Budget Budget Actual Final Budget
Special Revenue Funds
City Street Fund $ 2,132,809 $ 2,390,944 $ 258,135 $ 1,993,321 $ 2,070,906 $ 77,585
Arterial Street Fund 504,350 512,523 8,173 1,798,260 763,592 (1,034,668)
I-82 Traffic Impact Fund 201,000 253,919 52,919 256,000 123,132 (132,868)
Street Overlay Fund 1,628,500 866,584 (761,916) 1,803,242 43,030 (1,760,212)
Comarrmity Dev Block Grant Fund 1,137,957 820,153 (317,804) 874,397 781,930 (92,467)
ML King Community Center Fund 167,260 163,048 (4,212) 170,418 105,495 (64,923)
Ambulance Services Fund 5,413,669 5,112,040 (301,629) 5,569,551 5,595,597 26,046
City View Cemetery Fund 285,550 309,134 23,584 287,277 255,999 (31,278)
Blvd Perpetual Maintenance Fund 269,704 163,701 (106,003) 75,000 75,000
Athletic Program Fund 132,000 144,961 12,961 139,095 117,597 (21,498)
Golf Course 1,661,017 1,660,197 (820) 1,690,134 1,693,955 3,821
Senior Center Fund 306,584 334,627 28,043 327,706 326,699 (1,007)
Multi-Modal Fund 77,100 147,533 70,433 58,382 61,152 2,770
School Impact Fees 1,500,000 1,902,926 402,926 1,500,000 1,915,573 415,573
Rivershore Trail&Marina Fund 16,850 17,762 912 13,459 12,592 (867)
Special Lodging Assess Fund 321,000 277,253 (43,747) 287,067 308,696 21,629
Litter Abatement Fund 17,500 15,660 (1,840) 15,905 12,816 (3,089)
Revolving Abatement Fund 135,800 366,680 230,880 190,272 162,372 (27,900)
TRAC Develop&Operating Fund 331,200 277,291 (53,909) 274,200 273,948 (252)
Park Development Fund 186,800 305,187 118,387 700,000 287,560 (412,440)
Capital Improvement Fund 1,226,000 1,768,058 542,058 2,306,901 642,916 (1,663,985)
Economic Development Fund 1,321,000 1,649,457 328,457 1,606,142 1,162,832 (443,310)
Stadium/Convention Ctr Fund 314,035 309,872 (4,163) 293,330 175,794 (117,536)
Total 19,287,685 19,769,510 481,825 22,230,059 16,969,183 (5,260,876)
Debt Service Funds
LID Loans 164,930 162,437 (2,493) 93,372 21,110 (72,262)
LID Bonds 25,940 27,927 1,987 122,800 122,800
Library/Fire Station Bonds 390,900 327,233 (63,667) 422,300 422,300 -
2002 UTGO Bonds - 2,173 2,173 252,800 253,109 309
LID Guarantee 1,400 11,645 10,245 300,000 300,000 -
Total 583,170 531,415 (51,755) 1,191,272 1,119,319 (71,953)
Permanent Funds
Cemetery Perpetual Care 15,100 18,731 3,631 - -
Total $ 15,100 $ 18,731 $ 3,631 $ - $ $
106
City of Pasco, 'Washington 2oi6 Comprehensive AnnuaCFinanciaCReport
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.
107
City of Pasco, 'Washington 2o16 Comprehensive AnnuaCFinanciaCReport
Combining Statement of Net Position
Nonmajor Internal Services Fund
December 31,2016
Governmental Activities Business-Type Activities
Medicall
Equipment Equipment Dental Equipment Equipment Total
Rental Rental Insurance Central Rental Rental hitemal
Operations Replacement Fund Stores Operations Replacement Service
ASSETS
Current assets:
Current cash&cash equivalents $ 450,036 $ 1,224,653 $ 986,445 $ 12,956 $ 151,956 $ 1,549,883 $ 4,375,929
Restricted cash-IBNR 283,481 283,481
Investments 3,381,582 - 1,504,672 4,886,254
Receivables 34,619 - 34,619
Total current assets 484,655 4,606,235 1,269,926 12,956 151,956 3,054,555 9,580,283
Noncurrent assets:
hrterfund loans 540,505 - 540,505
Restricted investments-IBNR - 1,397,189 1,397,189
Machinery and equipment 4,703,961 - 1,743,034 6,446,995
Total noncurrent assets - 5,244,466 1,397,189 1,743,034 8,384,689
Total assets 484,655 9,850,701 2,667,115 12,956 151,956 4,797,589 17,964,972
DEFERRED OUTFLOWS
Pension related 40,038 40,038
LIABILITIES
Current liabilities:
Accounts payable 43,019 1,898 22,285 56,953 124,155
IBNR payable from restricted assets 1,680,670 1,680,670
Total current liabilities 43,019 1,682,568 22,285 56,953 1,804,825
Noncurrent liabilities:
Pension liability 205,454 205,454
Total noncurrent liabilities 205,454 - - 205,454
Total liabilities 248,473 1,682,568 22,285 56,953 2,010,279
DEFERRED INFLOWS
Pension related 5,509 5,509
NET POSITION
Net investment in capital assets 4,703,961 - 1,743,034 6,446,995
Unrestricted 270,711 5,146,740 984,547 12,956 129,671 2,997,602 9,542,227
Total net position $ 270,711 $ 9,850,701 $ 984,547 $ 12,956 $ 129,671 $ 4,740,636 $ 15,989,222
108
City of Pasco, 'Washington 2o16 Comprehensive AnnuaCFinanciaCReport
Combining Statement of Revenues,Expenses,and Changes in Net Position
Nonmajor Internal Service Funds
For the Year Ended December 31,2016
Governmental Activities Business-Type Activities
Equipment Equipment Medical/Dental Equipment Equipment Total
Rental Rental Insurance Central Rental Rental Internal
Operations Replacement Fund Stores Operations Replacement Service
OPERATING REVENUES
Charges for goods and services S 48,032 S - $ 6,012,451 $ $ - $ - $ 6,060,483
Miscellaneous interfund charges 1,073,865 1,155,845 23,085 322,140 862,941 3,437,876
Total operating revenues 1,121,897 1,155,845 6,035,536 322,140 862,941 9,498,359
OPERATING EXPENSES
Depreciation 648,734 - 316,854 965,588
Salaries&wages 172,657 91,870 264,527
Personnel benefits 100,542 37,964 138,506
Supplies 461,786 68,878 - 199,681 730,345
Services 222,445 6,039,030 88,478 6,349,953
Total operating expenses 957,430 717,612 6,039,030 417,993 316,854 8,448,919
OPERATING INCOME(LOSS) 164,467 438,233 (3,494) (95,853) 546,087 1,049,440
NONOPERATING REVENUES(EXPENSES)
Investment income 2,462 55,128 15,043 91 1,835 17,816 92,375
Investment(loss) (3,816) (1,999) (5,815)
Loss on sale of capital assets (36,860) - (36,860)
Total nonoperating revenues 2,462 18,268 11,227 91 1,835 15,817 49,700
Income(loss)before contributions and
transfers 166,929 456,501 7,733 91 (94,018) 561,904 1,099,140
Changes in net position 166,929 456,501 7,733 91 (94,018) 561,904 1,099,140
Net position-beginning 103,782 9,394,200 976,814 12,865 223,689 4,178,732 14,890,082
Net position-ending $ 270,711 $ 9,850,701 $ 984,547 $ 12,956 $ 129,671 $ 4,740,636 15,989,222
109
City of Pasco, 'Washington 2016 Comprehensive AnnuaCFinanciaCReport
Combining Statement of Cash Flows
Nonmajor Internal Service Funds
For the Year Ended December 31,2016
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 $ 1,087,278 $ 1,155,845 $ 6,035,536 $ $ 322,140 $ 862,941 $ 9,463,740
Payments to employees (237,544) - - (129,834) - (367,378)
Payments to suppliers (662,511) (68,878) (5,515,440) (276,751) 56,953 (6,466,627)
Net cash provided by operating activities 187,223 1,086,967 520,096 (84,445) 919,894 2,629,735
CASH FLOW FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:
Proceeds from disposal of assets (36,860) (1,999) (38,859)
Transfers in for capital
Acquisition of capital assets (1,088,622) (433,218) (1,521,840)
Net cash used in capital activities (1,125,482) - - (435,217) (1,560,699)
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment sales and income 2,462 55,128 11,226 91 1,835 17,816 88,558
Investment purchases - (983,723) (1,000,660) - (1,009,717) (2,994,100)
Interfimd loans - 496,605 496,605
Net cash provided from investing activities 2,462 (431,990) (989,434) 91 1,835 (991,901) (2,408,937)
Net increase in cash and cash equivalents 189,685 (470,505) (469,338) 91 (82,610) (507,224) (1,339,901)
Beginning cash and cash equivalents 260,351 1,695,158 1,739,264 12,865 234,566 2,057,107 5,999,311
Ending cash and cash equivalents $ 450,036 $ 1,224,653 $ 1,269,926 $ 12,956 $ 151,956 $ 1,549,883 $ 4,659,410
CASH PROVIDED BY OPERATING
ACTIVITIES:
Net operating income(loss) $ 164,467 $ 438,233 $ (3,494) $ $ (95,853) $ 546,087 $ 1,049,440
ADJUSTMENTS TO RECONCILE OPERATING
INCOME TO NET CASH PROVIDED BY
OPERATING ACTIVITIES
Depreciation 648,734 - - 316,854 965,588
(Increase)/decrease in customer receivables (34,619) (34,619)
Increase(decrease)in accounts payable 21,720 - 523,590 11,408 56,953 613,671
(Increase)decrease in pension deferred outflow (5,107) (5,107)
Increase(decrease)in pension obligation 57,665 57,665
Net cash provided by operating activities $ 187,223 $ 1,086,967 $ 520,096 S $ (84,445) $ 919,894 $ 2,629,735
110
City of Pasco, 'Washington 2oi6 Comprehensive AnnuaCFinanciaCReport
Trust and Agency Funds
Pension and Other Postemployment Benefit Trust Funds
Pension and other post-employm ent 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.
iii
City of Pasco, -Washington 2016 Comprehensive AnnuaC E'inanciaCReport
Combining Statement of Net Position
Fiduciary Funds
December 31, 2016
Trust Funds
Total
Firemen's Other Pension and Other
Firemen's Post-Employment Post-Employment
Pension Benefits Benefits
ASSETS
Cash $ 440,925 $ 131,789 $ 572,714
Receivables
Interfund Loan 33,954 33,954
Investments at fair market value:
Federal agency 36,469 36,469
Mutual funds 1,929,796 2,532,616 4,462,412
Total assets 2,441,144 2,664,405 5,105,549
LIABILITIES
Total liabilities - - -
NET POSITION
Held in trust for pension benefits
and other purposes $ 2,441,144 $ 2,664,405 $ 5,105,549
112
City of Pasco, 'Washington 2016 Comprehensive AnnuaCTinanciaCReport
Combining Statement of Assets and Liabilities
Fiduciary Funds (continued)
December 31, 2016
Agency Funds
Public Animal
Flexible Facility Control Payroll Total
Spending District Authority Clearing Agency
ASSETS
Cash&cash equivalents $ 7,925 $ 42,829 $ 41,748 $ 370,307 $ 462,809
Receivables
Interestreceivable
Investments,at FMV -
Total assets 7,925 42,829 41,748 370,307 462,809
LIABILITIES
Accounts payable 7,925 370,307 378,232
Due to other governments 42,829 41,748 84,577
Total liabilities $ 7,925 $ 42,829 $ 41,748 $ 370,307 $ 462,809
113
City of Pasco, 'Washington 2o16 Comprehensive AnnuaCFinanciaCReport
Combining Statement of Changes in Net Position
Fiduciary Funds
For The Year Ended December 31, 2016
Trust Funds
Total
Firemen's Other Pension and Other
Firemen's Post-Employment Post-Employment
Pension Benefits Benefits
ADDITIONS
Taxes $ 58,192 $ 58,192
Investment earnings
Interest 29,016 35,503 64,519
Dividends 12,735 12,859 25,594
Net change in fair value of investments 226,198 269,856 496,054
Total additions 326,141 318,218 644,359
DEDUCTIONS
Pension benefits 118,053 118,053
Medical premiums 184,620 184,620
Administrative expenses 7,914 7,286 15,200
Total deductions 125,967 191,906 317,873
Change in net assets 200,174 126,312 326,486
Net position-beginning(Adjusted 2,240,970 2,538,093 4,779,063
see note 15)
Net position-ending $ 2,441,144 $ 2,664,405 $ 5,105,549
114
City of Pasco, 'Washington 2o16 Comprehensive AnnuaCFinanciaCReport
Combining Statement of Changes in Assets and Liabilities
Agency Funds
For the Year Ended December 31, 2016
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 $ 8,022 $ 182,096 $ 182,193 $ 7,925 $ 51,009 $ 120299 $ 128,479 $ 42,829
Receivables
Interest Receivable - -
Investments,at FMV -
Total assets 8,022 182,096 182,193 7,925 51,009 120,299 128,479 42,829
LIABILITIES
Accounts payable 8,022 190,916 191,013 7,925 -
Due to other governments - 51,009 165,121 173,301 42,829
Total liabilities $ 8,022 $ 190,916 $ 191,013 $ 7,925 $ 51,009 $ 165,121 $ 173,301 $ 42,829
115
City of Pasco, 'Washington 2oi6 Comprehensive AnnuaCFinanciaCReport
Animal Control Authority Payroll Clearing
Balance Balance Balance Balance
January 1 Additions Deletions December 31 January 1 Additions Deletions December 31
$ 82,571 $ 116,179 $ 157,002 $ 41,748 $ 228,948 $30,436,560 $30,295,201 $ 370,307
82,571 116,179 157,002 41,748 228,948 30,436,560 30,295,201 370,307
- 228,948 31,859,198 31,717,839 370,307
82,571 137,822 178,645 41,748
$ 82,571 $ 137,822 $ 178,645 $ 41,748 $ 228,948 $31,859,198 $31,717,839 $ 370,307
116
City of Pasco, 'Washington 2oi6 Comprehensive AnnuaCFinanciaCReport
Combining Statement of Assets and Liabilities
Fiduciary Funds (continued)
December 31, 2016
Total Agency Funds
Balance Balance
January 1 Additions Deletions December 31
ASSETS
Cash& Cash Equivalents $ 370,550 $ 30,855,134 $ 30,762,875 $ 462,809
Receivables
Interest Receivable - - - -
Investments,at FMV - - - -
Total Assets 370,550 30,855,134 30,762,875 462,809
LIABILITIES
Accounts payable 236,970 32,050,114 31,908,852 378,232
Due to Other Governments 133,580 302,943 351,946 84,577
Total Liabilities $ 370,550 $ 32,353,057 $ 32,260,798 $ 462,809
117
City of Pasco, 'Washington 2oi6 Comprehensive AnnuaCFinanciaCReport
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 120
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 126
These schedules contain information to help the reader assess the government's most significant revenue
sources.
Debt Capacity 132
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 136
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 140
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.
118
City of Pasco, 'Washington 2oi6 Comprehensive AnnuaCFnanciaCReport
Net Position by Component
Last Ten Fiscal Years
(accrual busts ofaccounting)
(amounts expressedin thousands)
Fiscal Year Ended December 31
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Governmental activities
Net investment in capital assets $74,058 $85,294 $97,602 $122,343 $141,497 $163,582 $188,996 $185,424 $198,278 $212,712
Restricted for:
Restricted* 3,941 4,005 3,551 383 400
Cemetery(nonexpendable) 418 434 455 468 486
Prepaids 141
Program,grant,donations 86 35
Contested tax&drug forefits 228 57
Bicentennial celebration 6
Streets and boulevards 6,489 7,205 7,150 6,204 6,986
litter and housing abatement 289 329 369 354 562
Parkdevelopment 1,739 1,821 1,994 2,135 2,152
Culture and recreation 133
Capital improvement 2,259 2,976 3,733 4,802 5,927
Economic development 221 3 49 108 114
General obligation debt 337 334 349 635
Special assessment debt 240 48 64 6,240
Unrestricted 22,710 23,750 24,111 28,241 30,166 14,616 11,883 15,934 10,433 16,576
Total governmental activities net position 100,709 113,049 125,264 150,967 172,063 190,196 214,390 215,719 229,108 246,185
Business-type activities
Net investment capital assets 97,635 109,736 136,995 124,771 129,532 130,321 129,664 137,088 139,166 141,470
Restricted 842 747 777 - - 10,841
Unrestricted 12,611 5,712 12,618 11,400 12,367 14,719 19,115 4274 15,736 19,860
Total bus ines s-type activities net position 111,088 116,195 150,390 136,171 141,899 145,040 148,779 152,203 154,902 161,330
Primary govemment
Net investment in capital assets 171,694 195,030 211,596 247,114 271,029 293,903 318,660 322,512 337,444 354,182
Restricted 4,783 4,752 4,328 383 400 11,998 13,511 14,361 20,397 16,897
Unrestricted 35,321 29,462 36,729 39,641 42,533 29,335 30,998 20,208 26,169 36,436
Totalprimary government net assets $211,798 $229,244 $252,653 $287,138 $313,962 $335,236 $363,169 $357,081 $384,010 $407,515
*Break out not available prior to 2012
119
City of Pasco, 'Washington 2o16 Comprehensive AnnuaCFnanciaCReport
Changes in Net Position
Last Ten Fiscal Years
(accrual basis of accounting)
(amounts expressedin thousands)
Fiscal Year Fnded December 31
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Expenses
Governmental activities:
General government $9,649 $10,410 $12,059 $6,921 $6,517 $6,730 $7,060 $8,092 $8,238 $8,716
Public safety 17,214 18,296 18,743 19,419 19,834 20,498 22,491 21,624 24,917 29,374
Physical environment 2,137 3,532 3,050 1,900 2,406 2,992
Transportation 4,242 4,331 5,137 7,831 9,836 9,913 14,097 16,728 16,374 16,628
Economic environment 1,117 1,199 1,385 797 1,041 2,386 4,456 4,710 5,137 5,618
Health and human services 40 57 59 1,652 251 421
Culture and recreation 5,713 5,983 6,212 4,724 7,695 8,224 8,003 7,941 8,115 8,929
Interest on long term debt 640 587 413 512 517 315 265 210 444 504
Total governmental activities expenses 40,752 44,395 47,058 43,756 48,097 51,479 56,372 59,305 63,225 69,769
Business-type activities
Water 5,180 5,990 6,029 6,538 6,845 6,748 7,780 8,238 9,099 9,476
Irrigation 936 1,015 1,009 1,045 1,038 1,099 1,226 1,546 1,779 1,531
Sewer 6,275 6,316 6,826 6,944 7,922 7,435 7,223 7,902 8,175 1,646
Waterpmcess reuse 1,503 1,569 1,558 1,444 1,501 1,185 1,542 1,848 2,524 8,571
Stormwater 595 607 735 791 959 1,028 1,165 1,288 1,168 3,173
Total business-type activities expenses 14,489 15,497 16,157 16,762 18,265 17,495 18,936 20,822 22,745 24,397
Total primary government expenses 55,241 59,892 63,215 60,518 66,362 68,974 75,308 80,127 85,970 94,166
Pro Bram revenues
Governmental Activities:
Charges for Services
General government 7,098 6,667 8,982 2,134 1,981 2,575 4,578 5,083 5,283 4,741
Public safety 2,263 2,626 3,006 3,684 3,893 4,415 4,398 5,144 5,177 6,310
Physical environment 744 836 1,282 499 1,331 1,406
Transportation 491 476 623 1,504 1,795 310 3,507 4,203 3,672 3,772
National&economic environment 1,579 1,135 1,431 17 1,459 2,734 3,361 3,172 3,570 6,022
Health and human services 1,851 30 14
Culture and recreation 465 445 480 604 2,161 1,838 2,471 2,334 2,502 2,556
Operating grants and contributions 1,074 376 504 1,448 1,763 1,043 639 1,702 1,770 1,321
Capital grants and contributions 3,438 14,753 13,283 25,488 25,117 16,144 30,631 4,302 23,929 25,053
Total governmental activities programrevenm 17,152 27,314 29,591 37,229 39,530 30,479 49,585 25,940 45,903 49,775
Business-type activities
Charges for services 14,307 17,232 18,319 18,148 17,774 18,044 17,977 20,002 20,979 23,603
Operating grants and contributions 0 0 0 0 370 412 42 23 27 11
Capital grants and contributions 6,377 3,254 3,061 4,654 5,671 5,586 4,214 3,344 6,090 7,189
Total business-type activities progmmrevenuc 20,684 20,486 21,380 22,802 23,815 24,042 22,233 23,369 27,096 30,803
Total primary government program revenues $37,836 $47,800 $50,971 $60,031 $63,345 $54,521 $71,818 $49,309 $72,999 $80,578
120
City of Pasco, 'Washington 2o16 Comprehensive AnnuaCFnanciaCReport
Changes in Net Position
Last Ten Fiscal Years(continued)
(accrual basis of accounting)
(amounts expres sed in thousands)
Fiscal Year Fnded December 31
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Net(expenses)/revenues
Governmental activities ($23,599) ($17,078) ($17,467) ($6,527) ($8,567) ($21,000) ($6,787) ($33,365) ($17,322) ($19,994)
Business-type activities 6,195 4,504 5,223 6,040 5,550 6,547 3,297 2,547 4,351 6,406
Total primary government (17,404) (12,574) (12,244) (487) (3,017) 4,45313,490 (30,(30,818) (12,971) (13,588)
General revenues andother changes in net assets
Governmental Activities:
Taxes
Property taxes 5,774 6,055 6,276 6,080 6,847 6,658 7,149 7,069 7,255 7,928
Sales and use taxes 8,646 8,843 8,000 8,245 9,403 10,284 11,472 12,695 13,646 14,887
Occupational utility taxes 7,842 8,689 8,924 8,917 8,914 8,843 8,894 9,592 10,268 9,028
Othertaxes 3,729 4,655 4,686 1,738 1,838 2,046 2,117 2,290 2,443 2,884
Intergovernmental* 1,663 2,599 3,161 1,566 1,581 1,741 1,962
Investment and miscellaneous 2,892 987 852 1,147 691 1,486 137 62 252 300
Transfers 846 613 566 (149) 3,439 (355) (150)
Total governmental activities 29,729 29,842 29,304 27,641 30,292 35,917 30,980 33,139 35,605 36,989
Business-type activities
Investment and miscellaneous 4,184 425 399 1,062 177 33 88 29 103 145,721
Transfers (866) (613) (566) 149 (3,439) 355 150
Total business-type activities 3,318 (188) (167) 1,211 177 (3,406) 443 179 103 145,721
Total primarygovemment 33,047 29,654 29,137 28,852 30,469 32,511 31,423 33,318 35,708 182,710
Changes in net position
Govemmentalactivities 6,130 12,764 11,837 21,114 21,725 14,917 24,193 (226) 18,283 16,995
Business-type activities 9,513 4,316 5,056 7,251 5,727 3,141 3,740 2,726 4,454 152,127
Total primary government $15,643 $17,080 $16,893 $28,365 $27,452 $18,058 $27,933 $2,500 $22,737 $169,122
*Included with"Other taxes"until 2010.
121
City of Pasco, 'Washington 2o16 Comprehensive AnnuaCFinanciaCReport
Governmental Activities Tax Revenues by Source
Last Ten Fiscal Years
(accrual basis 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
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
2012 6,659 10,284 8,843 2,046 27,832
2013 7,149 11,472 8,894 2,117 29,632
2014 7,069 12,695 9,592 2,290 31,646
2015 7,255 13,646 10,268 2,443 33,612
2016 7,928 14,887 9,028 2,884 34,727
Source:
Statement of activities
Prior CAFR
*Also included intergovernmental revenues
122
City of Pasco, 'Washington 2016 Comprehensive AnnuaCFnanciaCReport
Fund Balance of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
(amounts expressed in thousands)
Fis cal Year En ded December 31
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
General fund
Assigned $ $ - $ - $ $ $ 3,208 $ - $ - $ -
Restricted
Prepaids 136
Program,grant,donation 86 35
Bi-centennial celebration 6
Law Enforcement 228 57
Debt Repayment/guarantee 4,876
Committed
Landfill claims 401 405 406 407 407
Assigned
Subsequent year's budget appropriation 2,872 806 1,858
Unassigned 8,050 6,264 5,612 7,978 11,920 12,333
Reserved* 1,891 1,517 692 1,898
Unreserved* 6,861 9,088 10,270 7,917 9,414
Total general fund $ 8,752 $ 10,605 $ 10,962 $ 9,815 $ 9,414 $11,258 $ 9,543 $ 6,245 $ 9,383 $ 17,289 $ 14,633
All other governmental funds
Nonspendable
Cemetery permanent fund $ - $ - $ - $ - $ - $ 400 $ 418 $ 434 $ 455 $ 467 $ 486
Restricted 9,496 5
Street and boulevard** 6,489 7,205 7,150 6,204 6,986
Litter&housing abatement** 288 329 369 354 562
Park development** 1,739 1,822 1,995 2,135 2,152
Culture and recreation 132
Capital improvements** 2,260 2,976 3,733 4,802 5,927
Economic development** 221 3 49 108 115
Debt repayment/guarantee 1,364 635
General obligation debt** 337 334 349
Special assessment debt** 240 47 64
Commnitted 5,375
Special revenue funds* 1,117 2,365 2,031 3,017 3,770
Construction projects* 861 199 33 238 226
Debt guarantee* 1,033 924 926
Unassigned (178) (1,254) (1,188) (442) (400) (279)
Reserved* 5,729 3,910 3,890 2,798 383
Unreserved,reported in:
Special revenue funds 6,115 8,260 9,872 9,010 10,846
Debt service funds 671 773 921 1,307 1,095
Capital project funds (1,158) (224) (1,750) (655) 833
Total all other governmental funds $11,357 $12,719 S 12,933 $12,460 $13,157 S 15,093 $13,749 $15,582 S 16,717 $ 18,289 $ 20,580
*Prior to GASB 54
*'*Break out not available prior to 2012
123
City of Pasco, 'Washington 2016 Comprehensive AnnuaCFnanciaCReport
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
(amounts expressedin thousands)
Fiscal Year Ended December 31
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Revenue
Taxes $ 24,516 $ 25,716 $ 25,339 $ 24,960 $ 26,832 $ 28,017 $ 29,602 $ 31,756 $ 33,587 $ 34,727
Licenses and permits 1,924 1,616 1,860 1,966 1,874 1,862 1,777 1,983 3,389 2,516
Intergovernmental revenue 4,719 5,293 4,041 7,929 8,252 4,901 5,785 6,868 5,857 5,280
Charges for services 4,738 4,771 5,285 5,502 7,475 9,509 11,486 12,562 11,598 15,538
Fines and forfeitures 1,054 1,017 1,063 944 955 891 985 961 1,209 984
Investment and miscellaneous 2,734 2,310 2,963 2,930 2,547 2,767 2,559 3,146 2,264 2,956
Total revenues 39,685 40,723 40,551 44,231 47,935 47,947 52,194 57,276 57,904 62,001
EMenditures
Current:
General government 5,001 5,341 5,847 6,547 6,087 6,381 6,705 7,720 7,940 8,567
Public safety 16,820 17,711 18,418 18,820 18,780 19,990 22,365 22,110 25,269 27,205
Physical environment 1,825 2,078 2,066 1,855 2,288 2,846
Transportation 1,537 1,536 1,566 2,149 2,447 2,890 3,897 6,344 5,273 4,147
Natural and economic enviroment 745 671 944 54 872 2,137 4,287 4,568 4,989 5,446
Health and human services 40 57 59 1,313 210 376
Culture and recreation 4,117 4,279 4,670 4,757 6,402 6,807 6,978 7,153 7,357 8,131
Capital outlay* 5,737 7,345 7,718
Generalgovemment 104 154 193 1,426 506 166 206
Public safety 124 35 648 2,726 258 3,274 5,606
Physical environment 868 7
Transportation 3,441 3,276 3,141 2,994 2,852 2,203 995
Natural and economic enviroment 419 657 1,527 254 1,351 518
Culture and recreation 2,633 369 185 225 471 845
Debt service:
Principal 1,162 1,108 1,249 1,178 1,575 3,308 1,194 675 581 1,291
Interest 640 587 413 512 517 316 265 210 445 504
Total expenditures 37,624 40,713 42,950 44,774 43,669 50,752 53,091 53,972 57,%8 63,461
Excess ofrevenues
over(under)expenditures 2,061 10 (2,399) (543) 4,266 (2,805) (897) 3,304 (64) (1,460)
Otherfinancine sources(uses)
Disposition ofcapital assets 157 7 227 700 1,010
Proceeds ofgeneral debt 795 4,533 8,795
Debt proceeds-Premium 308
Debt refinanced (4,280)
Insurance recoveries 251 (1)
Transfer in 4,984 5,094 5,432 6,559 5,229 6,434 7,029 3,800 7,352 10,228
Transfer out (4,247) (4,542) (4,527) (6,708) (5,229) (6,689) (7,596) (4,343) (7,613) (10,228)
Total other financing sources(uses) 894 559 1,156 645 253 (255) (567) (316) 9,542 1,010
Net change in fund balances $ 2,955 $ 569 _L 1,243) $ 102 $ 4,519 $ (3,060) $ (1,464) $ 2,988 $ 9,478 $ (450)
Debt services as percentage
ofnoncapital expenditures 5.7% 5.1% 4.7% 4.5% 5.4% 7.8°% 3.0% 1.8% 1.9% 3.0%
*Breakout not available prior to 2010
124
City of Pasco, 'Washington 2016 Comprehensive AnnuaCFnanciaCReport
Assessed Value of Taxable Property
Last Ten Fiscal Years
(in thousands of dollars)
Real Property
Fiscal Year Total Taxable Total
Faded Residential Commercial Other Assessed Direct Tax
December 31 Property Property Property Valuation Rate
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
2012 2,323,387 716,283 180,219 3,219,889 2.17
2013 2,433,119 731,717 165,958 3,330,794 2.16
2014 2,455,759 833,089 192,151 3,480,999 2.00
2015 2,615,824 914,211 201,939 3,731,974 1.99
2016 2,616,243 911,431 198,327 3,726,001 1.98
125
City of Pasco, 'Washington 2o16 Comprehensive AnnuaCFinanciaCR.eport
B&O Taxes by Type
Last Ten Fiscal Years
(in thousands of dollars)
(Gross Revenues times 8 1/2% Tax Rate)
Fiscal Year
Ended
December 31 Admissions Cable TV Solid Waste Water Irrigation* Sewer Storm** Reuse** Gas Telephone Electricity Total
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
2012 148 391 536 679 85 647 91 158 707 1,910 3,489 8,841
2013 157 404 512 689 89 666 97 124 525 1,711 3,465 8,439
2014 158 516 573 782 107 665 108 186 790 1,839 4,026 9,750
2015 160 532 660 809 115 680 124 191 829 1,695 4,635 10,430
2016 129 457 649 860 121 765 129 285 530 1,413 3,819 9,157
*Previously included in Water
**Previously included in Sewer
Property Tax Rates
Direct and Overlapping 1 Gowernments
Last Ten Fiscal Years
Overlapping Rates
City of Pasco County School District
Total direct
Fiscal Year Debt Debt Total Debt Total and
Ended Operating service Total city Operating service county Operating service school Special overlapping
December 31 millage millage millage millage millage millage millage millage millage districts rates
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
2012 1.968 0.203 2.171 1.440 0.214 1.654 4.352 2.250 6.602 0.033 10.460
2013 1.967 0.197 2.164 1.508 0.201 1.709 4.455 2.207 6.662 0.329 10.864
2014 1.956 0.045 2.001 1.352 0.135 1.487 4.314 2.528 6.842 0.323 10.653
2015 1.946 0.042 1.988 1.308 0.124 1.432 4.389 2.497 6.886 0.313 10.619
2016 1.937 0.039 1.976 1.401 0.113 1.514 4.318 2.390 6.708 0.311 10.509
Source: Franklin County Assessors(Property taxbooklet)
1 Overlapping rates are those of local and county governments that apply to property owners within the City of Pasco. Not all overlapping rates apply to
all City of Pasco property owners whose property is located within the geographic boundaries of the special district.
126
City of Pasco, 'Washington 2o16 Comprehensive AnnuaCFinanciaCR.eport
Taxable Retail Sales
Last Ten Fiscal Years
Fiscal Year
Ended
December 31 City of Pasco 1 Franklin County 1
2007 856,422,037 1,057,004,462
2008 877,529,074 1,052,102,171
2009 802,641,083 917,095,762
2010 825,267,329 964,584,879
2011 839,174,222 1,007,226,337
2012 861,063,371 1,037,096,483
2013 933,301,814 1,110,257,463
2014 1,016,794,531 1,196,017,085
2015 1,125,060,910 1,315,962,291
2016 1,250,472,836 1,428,477,621
1 Source: Washington State Department of Revenue
Principal Property Taxpayers
Current Year and Seven Years Prior
Fiscal Year Ended December 31
(amounts expressed in thousands)
2016 2008
Taxable Percentage Taxable Percentage
assessed of total assessed of total
Taxpayer value Rank taxable value Rank taxable
Syngenta Seed Inc $35,078 1 0.83%
Pasco Processing LLC $32,121 2 0.76% 31,316 1 1.09%
Kenyon Zero Storage $30,278 3 0.72%
CFR Frozen Foods LLC $29,392 4 0.70%
Crimay Enterprises Inc $28,250 5 0.67%
Twin City Foods,Inc. $21,053 6 0.50% 22,098 2 0.77%
Broadmoor LLC $17,083 7 0.40% 16,432 3 0.57%
The Crossing at Chapel Hill $16,951 8 0.40% 16,085 4 0.56%
Frank Tiegs LLC $16,164 9 0.38%
Wal-Mart,Inc $14,368 10 0.34% 13,745 6 0.48%
Western State Equipment 14,400 5 0.50%
Skywest Airlines,Inc 13,241 7 0.46%
Conagra Foods Lamb-Weston,Inc. 12,632 8 0.44%
BNSF Railway Co. 12,255 9 0.43%
Old Standard Life Insurance 11,234 10 0.39%
$240,738 5.70% $163,438 5.69%
Source: Franklin County Assessor's Office
127
City of Pasco, 'Washington 2o16 Comprehensive AnnuaCFinanciaCR.eport
Principal B&O Taxpayers
Current Year and Ten Years Prior
Fiscal Year Ended December 31
(amounts expressedin thousands)
2016 2007
Percentage of Percentage
Tax Total Tax Tax of Total Tax
Taxpayer Revenue Rank Revenue Revenue Rank Revenue
Company A $4,206 1 0.459320738 $3,205 1 40.46%
Company B 705 2 0.076990281 468 4 5.91%
Company D 661 3 0.072185213 746 2 9.42%
Company E 498 4 0.054384624 288 6 3.64%
Company F 375 5 0.040952277 554 3 6.99%
Company C 348 6 0.038003713 0.00%
Company G 186 7 0.020312329 437 5 5.52%
Company J 151 8 0.016490117 135 8 1.70%
Company O 97 9 0.010592989 0.00%
Company N 81 10 0.008845692 0.00%
168 7 2.12%
Company H 82 10 1.04%
Company L 97 9 1.22%
$7,308 79.81% $6,180 78.02%
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.
Source:Revenue collection
128
City of Pasco, 'Washington 2o16 Comprehensive AnnuaCFnanciaCReport
Top Ten Industries that Generate Sales Tax
Current Year and Nine Years Prior
Flscal Year Ended December 31
2016 2007
Sales % of Sales % of
Tax Total Tax Total
Industries Paid Rank Sales Tax Paid Rank Sales Tax
Motor Vehicle and Parts Dealers $1,809,086 1 17.53% $1,499,029 1 18.98%
Merchant Wholesale,Durable Goods 1,060,261 2 10.27% 919,467 2 11.64%
Construction of Buildings 924,852 3 8.95% 394,555 6 4.99%
Specialty Trade Contractors 842,468 4 8.16% 379,450 7 4.80%
Food Services,Drinking Places 804,767 5 7.80% 506,250 3 6.41%
General Merchandise Stores 669,166 5 6.48% 455,016 4 5.76%
Building Material and Garden 478,187 7 4.63% 358,462 9 4.54%
Statewide Pool-Miscellaneous 374,822 8 3.63%
Telecommunications 323,198 9 3.13% 374,108 8 4.74%
Food and Beverage Stores 286,951 10 2.78% 0.00%
Rail Transportation 0.000/0 218,985 10 2.77%
Rental and Leasing Services 0.000/0 466,361 5 5.90%
Other 2,746,460 26.64% 2,327,977 29.47%
Total $10,320,218 100.00% $7,899,660 100.00%
Source:Washington State Department of Revenue
129
City of Pasco, 'Washington 2o16 Comprehensive AnnuaCFinanciaCReport
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
2007 5,763 5,600 97.2% 160 5,760 99.9%
2008 6,061 5,887 97.1% 158 6,045 99.7%
2009 5,738 5,579 97.2% 160 5,739 100.0%
2010 6,400 6,211 97.0% 138 6,349 99.2%
2011 6,638 6,480 97.6% 141 6,621 99.7%
2012 6,850 6,693 97.7% 154 6,847 100.0%
2013 7,011 6,833 97.5% 168 7,001 99.9%
2014 7,064 6,933 98.1% 64 6,997 99.1%
2015 7,287 7,169 98.4% 64 7,233 99.3%
2016 7,748 7,627 98.4% 0 7,627 98.4%
Source: Franklin County Treasurer's Office Tax Rolls
1 County provides four prior years and combines five years or more together.
130
City of Pasco, 'Washington 2o16 Comprehensive AnnuaCFnanciaCReport
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
(amounts expressedin thousands,except per capita amount)
Governmental Activities Business-type Activities
Fiscal Year General External Percentage of
Ended Obligation Special Loans& Water/Sewer Other Loans Total Primary Personal Per
December 31 Bonds Assessments Notes3 Bonds' Payable3 Govemment hicome4 Capita'
2007 11,850 2,853 2,496 17,620 18,078 52,897 5.1% 1,054
2008 10,915 120 2,222 16,245 16,722 46,224 3.9% 884
2009 9,945 120 2,093 16,549 23,487 52,194 3.6% 958
2010 8,940 785 1,824 29,125 13,950 54,624 3.4% 970
2011 7,670 785 1,543 26,240 12,531 48,769 2.8% 799
2012 4,710 395 1,258 24,260 11,067 41,690 2.2% 665
2013 3,835 227 995 30,355 9,556 44,968 2.2% 685
2014 3,315 208 748 28,030 7,997 40,298 1.90/0 595
2015 11,580 160 593 36,690 6,389 55,412 2.8% 845
2016 10,430 45 12 38,438 508 49,433 2.4% 724
Note:Details regarding the City's outstanding debt can be found in the notes and schedules to the financial statements.
1 This ratio was calculated using population for the applicable fiscal year.
'Water/Sewer Bonds include Special Assessments.
3 External Loans&Notes and Other Loans Payble have been restated to correct for loan misclassified as business-type
that should have been classifed as governmental.Total Primary Govemement debt was not impacted.
4Personal Income stats were not available for every year.In those cases the previous year's total was used.
Ratios of General Bonded Debt Outstanding
and Bonded per Capita
Last Ten FIs cal Years
(amounts expressed in thousands,except per capita amount)
Percentage of
Fiscal Year General Less:Amounts estimated actual
Ended Obligation available in debt taxable value of Per
December 31 bonds service fund' Total property2 capita
2007 11,850 2,824 9,026 0.3635% 180
2008 10,915 2,787 8,128 0.2841% 155
2009 9,945 1,231 8,714 0.2969% 160
2010 8,940 1,322 7,618 0.2625% 135
2011 7,670 1,487 6,183 0.2055% 101
2012 4,710 1,494 3,216 0.0999% 51
2013 3,835 1,325 2,510 0.0754% 38
2014 3,315 1,420 1,895 0.0544% 28
2015 11,580 1,459 10,121 0.3039% 154
2016 10,430 - 10,430 0.2799% 148
Note:Details regarding the City's outstanding debt can be found in the notes and schedules
to the financial statements.
' Outstanding General Obligation bonds are paid by the General Fund.
2 See schedule of assessed value taxable property on page 126 for property taxvalues.
131
City of Pasco, 'Washington 2oi6 Comprehensive AnnuaCFnanciaCR.eport
Legal Debt Margin
Last Ten Fiscal Years
(amounts expressedin thousands)
Fiscal Year Ended December 31
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Debt limit $62,079 $72,012 $73,370 $72,923 $75,213 $80,378 $88,541 $88,576 $91,985 $98,436
Total net debt applicable to limit 10,470 13,252 12,501 11,954 11,670 4,966 4,053 4,063 12,174 10,442
Legal debt margin $51,609 $58,760 $60,869 $60,969 $63,543 $75,412 $84,488 $84,513 $79,811 $87,994
Total net debt applicable to the 16.87% 18.40% 17.04% 16.39% 15.52% 6.18% 4.58% 4.59% 13.23% 10.61%
limit as a percentage of debt limit
Legal debt margin calculation for fiscal year 2016
Assesed Valuation for 2016 Collections $3,937,446
Non-Voted Debt Capacity Value(1.5%ofAssessed Value) 59,062
Less:
Non-Voted GO Bonds Outstanding (10,430)
Other Non-voted General Obligations Outstanding (12)
(10,442)
Remaining capacity without a vote 48,620
Voted and Non-Voted Debt Capacity:(2.5%of Assessed Value) 98,436
Less:
Voted GO Bonds Outstanding 0
Non-Voted GO Bonds Outstanding (10,430)
Other Non-voted General Obligations Outstanding (12)
(10,442)
$ 87,994
Note:The total indebtedness for general purposes with or without a vote cannot exceed 2.5%of the 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 maxiumlimit for gerneral purposes without a vote(councilmanic debt).A council may choose to allocate any portion of this debt capacity to the"voted" category.
If done so,this 1.5 percent of the indebtedness available without vote is to be proportionately reduced by the excess'voted"debt over 1 percent.
132
City of Pasco, 'Washington 2o16 Comprehensive AnnuaCFinanciaCReport
Direct and Overlapping Governmental Activities Debt
As of December 31,2016
(amounts expressedin thousands)
Direct debt Amount
Voted General Obligation $ -
Councilmanic General Obligation Debt 10,442
Total direct debt 10,442
Overlapping Debt
Estimated Share of
Jurisdiction Outstanding debt Percent applicable Overlapping Debt
Franklin County 26,410 50.47% 13,329
Pasco School District 136,170 61.67% 83,976
Port of Pasco 28,375 50.94% 14,454
Total overlapping debt 111,759
Total direct&overlapping debt 122,201
Governmental activities debt ratios
Assessed valuation-2016(established in November,2015 for the 2016 taxyear) 3,937,446
Population 71
Net direct debt to assessed valuation 0.27%
Net direct debt and overlapping debt to assessed valuation 3.10%
Assessed valuation per capita 55,457
Net direct debt per capita 147
Direct debt and overlapping debt per capita 1,721
Councilmanic debt and other obligations:
G.O.Bonds Outstanding 10,430
Other Non-voted G.O.Outstanding 12
10,442
Voted GO debt:
G.O.Bonds Outstanding -
(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.
Sources:
Franklin County Assessor's Office
Franklin County Assessor's website-taxbooklet
133
City of Pasco, 'Washington 2o16 Comprehensive AnnuaCFinanciaCReport
Waterworks Utility Debt Service Coverage
(Per Bond Offical Statement Defintions)
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Operating Revenues
Water Sales(1) $ 5,619,985 $ 5,304,341 $ 5,515,937 $ 5,596,298 $ 6,797,470 $ 6,989,958 $ 7,087,462 $ 7,594,091 $ 7,971,096 $ 8,293,323
Irrigation Sales P1 678,321 717,653 753,251 874,036 917,076 954,204 1,105,076 1,188,855 1,180,488
Sewer Sales Ip 7,809,425 5,997,993 6,265,581 5,788,397 5,614,564 5,705,414 5,813,572 5,914,671 6,197,706 7,030,704
Stomrwater Sales pl 442,174 462,205 401,279 867,801 883,305 972,375 1,054,682 1,305,138 1,386,325
Process Water Reuse Sales P1 1,654,699 1,720,517 1,723,291 1,492,743 1,942,683 1,453,597 1,997,655 2,053,639 3,063,034
Other Utility Charges(2) 2,418,505 1,851,282 2,320,023 3,871,057 1,907,123 1,711,031 1,935,286 2,347,236 2,072,899 2,541,924
Total Operating Revenues 15,847,915 15,928,810 17,001,916 18,133,573 17,553,737 18,149,467 18,216,496 20,013,411 20,789,333 23,495,798
Operating&Maintenance Expenses
Salaries&Wages 2,014,749 2,205,177 2,662,207 2,518,691 2,535,882 2,461,588 2,599,431 2,830,832 3,016,535 3,097,784
Personnel Benefits 682,213 423,330 478,162 892,651 913,062 952,672 1,114,349 1,330,549 1,403,036 2,255,786
Supplies 361,443 673,157 479,289 854,667 1,092,728 855,626 1,121,916 1,492,845 1,633,374 1,556,387
Services Ol 3,750,684 3,758,991 4,448,568 4,477,102 5,193,430 5,293,094 5,749,161 5,890,538 7,010,663 7,445,805
Total Operating Expenses 6,809,089 7,060,655 8,068,226 8,743,111 9,735,102 9,562,980 10,584,857 11,544,764 13,063,608 14,355,762
Operating Income 9,038,826 8,868,155 8,933,690 9,390,462 7,818,635 8,586,487 7,631,639 8,468,647 7,725,725 9,140,036
Non-Operating Revenue
Interest Income 579,418 371,318 359,244 228,784 116,848 39,607 41,009 15,685 28,310 48,536
Net Familand Rental(3) 686,140 530,307 698,974 375,599 498,413
Total Non-Operating Revenues(4) 1,265,558 901,625 1,058,218 604,383 615,261 39,607 41,009 15,685 28,310 48,536
Net Revenues 10,304,384 9,769,780 9,991,908 9,994,845 8,433,896 8,626,094 7,672,648 8,484,332 7,754,035 9,188,572
Other Sources of Funds
Special Assessment Repayments 297,186 575,461 42,005 387,867 283,861 225,506 257,366 123,404 94,284 52,673
Total Other Sources 297,186 575,461 42,005 387,867 283,861 225,506 257,366 123,404 94,284 52,673
Max Annual Assessment Debt Service 417,156 567,968 390,393 289,613 212,489 199,582 203,764 202,852 202,852 94,074
Net Revenue Available for
NonAssessment Debt Service 10,184,414 9,777,273 9,643,520 10,093,099 8,505,268 8,652,018 7,726,250 8,404,884 7,645,467 9,147,171
Non-Assessment Bond Debt Service(5) 2,050,932 1,856,078 2,119,329 2,309,689 2,852,381 2,905,851 2,771,990 3,348,068 4,475,261 3,078,188
Non-Assessrnent Bond
Debt Service Coverage(6) 4.97 5.27 4.55 4.37 2.98 2.98 2.79 2.51 1.71 2.97
Balance Available for Other Purposes $ 8,133,482 $ 7,921,195 $ 7,524,191 $ 7,783,410 $ 5,652,887 $ 5,746,167 $ 4,954,260 $ 5,056,816 $ 3,170,206 $ 6,068,983
Notes:
Irrigation included with Water 20042007;Stormwater and Process Water Reuse included with Sewer 2004-2007.
m Excludes revenue raised and used to pay interfund city taxes.
(Z)Includes one time fees such as new connection,new meter,capital facility,penalties,operating grants,etc.
(s)Farmassets sold in 2011
141 Excludes noncash capital contributions,gains/losses,capital grants,etc.
151 Excludes debt for prepaid maturities.
(6)Bond convenant requires coverage ratio of 1.25 times Maximum Annual Debt Service
134
City of Pasco, 'Washington 2016 Comprehensive AnnuaCFnanciaCR.eport
Demographic and Economic Statistics
Last Ten Fiscal Years
Pasco Tri Cities Franklin County
Kennewick-
Fiscal Year Richand MSA Per capita Total Personal Median Median
Ended Unemployment personal Income3 (in household household School
December 31 Population 1 Population 1 rate 1'4 Population 1 income t thousands) income 1'3 age' enrollment 2
2007 52,555 160,145 6.4% 69,582 20,573 1,431,510 49,337 28.66 12,610
2008 54,993 166,933 10.3% 72,230 22,955 1,658,040 44,797 28.20 13,701
2009 57,579 172,169 7.26% 75,111 26,342 1,978,574 43,754 27.40 14,437
2010 59,781 181,756 7.79% 78,163 Not Available Not Available 53,355 Not Available 15,427
2011 61,000 184,755 7.92% 80,500 Not Available Not Available 53,644 28.53 16,143
2012 62,670 187,720 8.73% 82,500 30,169 2,488,943 56,221 Not Available 15,994
2013 65,600 193,160 9.10% 84,800 30,534 2,589,283 57,196 29.14 16,612
2014 67,770 197,560 7.70% 86,600 Not Available Not Available 58,538 29.71 17,016
2015 68,240 199,610 6.80% 87,150 Not Available Not Available 57,664 Not Available 17,353
2016 70,560 203,090 6.90% Not Available Not Available Not Available 58,854 Not Available 17,780
S tate
Fiscal Year Per capita Total Personal Median School
Ended Average wage Unemployment personal hicome3 (in household enrollment
December 31 perjob 1'3 rate 1'4 Population 1 income 1'3 thousands) income 1'3 K-12 1
2006 43,825 4.90% 6,420,258 40,139 257,702,736 53,522 1,027,312
2007 46,114 4.50% 6,525,086 42,845 279,567,310 56,141 1,031,846
2008 47,140 5.50% 6,608,245 44,162 291,833,316 57,858 1,025,495
2009 47,993 9.30% 6,672,159 42,112 280,977,960 55,458 1,032,678
2010 49,337 9.90% 6,724,540 42,521 285,934,165 54,888 1,037,219
2011 51,139 9.20% 6,767,900 44,420 300,630,118 55,500 1,037,676
2012 52,945 8.20% 6,817,770 46,045 313,924,220 56,444 1,040,631
2013 53,334 7.00% 6,882,400 48,353 332,784,687 57,554 1,047,353
2014 55,427 6.10% 6,968,170 49,583 345,502,773 58,686 1,057,388
2015 Not Available 5.70% 7,061,410 51,146 361,162,876 62,108 1,067,998
2016 Not Available 5.40% 7,183,700 Not Available Not Available 65,500 1,080,027
SOURCES:
State of Washington Office of Financial M anagement
2 Pasco School District(October Enrollment)from 2002-2010.Office of Financial management 2011 October Headcount Enrollment
3 2013 and 2014 Data is inflation adjusted to 2013 Dollars per State of Washington Office of Financial Management
4 2013 and 2014 Unemployment Date from the U.S.Bureau of Labor Statistics
135
City of Pasco, 'Washington 2o16 Comprehensive AnnuaCFnanciaCReport
Principal Employers
Current Year&4 Years Ago
Year Ended December 31
Tri Cities
2016 2012
Employer Employees Industry Rank Employees Industry Rank
Battelle/PNNL 4,365 Research and Development 1 Research and Development
Kadlec Medical Center 3,304 Health Services 2 2,175 Health Services 5
Bechtel National 2,898 Government 3 2,850 Government 4
ConAgra(Iamb Weston) 2,727 Agriculture Products 4 3,057 Agriculture Products 3
Kennewick School District 2,130 Education 5 Education
Washington River Protection 2,077 Government 6 1,686 Government 6
Pasco School District 2,015 Education 7 Education
Mission Support Alliance 1,928 Government 8 1,478 Government 7
Richland School District 1,500 Education 9
CH2M Hill 1,400 Government 10 3,260 Government 2
Tyson Foods 1,300 Agriculture Products 9
URS 3,500 Government 1
Washington Closure Hanford 1,370 Government 8
Energy Northwest 1,222 Research and Development 10
Source:TRIDEC
Prior years'information is not available.
Franklin County
2016 2012
Employer Employees Industry Rank Employees Industry Rank
Pasco School District 2,015 Education 1 2,065 K-12 1
Lourdes Health Network 804 Health Care 2 807 Health Care 2
Columbia Basin College 511 Community College 3 766 Conmiunity College 3
Pasco Processing 400 Food Processor 4 350 Food processor-vegetables 5
Boise Cascade 380 Manufacturing 5 574 Manufacturing 4
City of Pasco 349 City Services 6 305 City services 6
Douglas Fruit 300 Fruit Packaging 7 210 Fruit packaging 8
Tri-Cities Airport 300 Airport 8
Franklin County 286 County Services 9 190 County services 9
Reser's Fine Foods 219 Food Processor 10 230 Food processor-potatoes 7
West Corrmamnication 180 Call Center 10
Source:TRIDEC
136
City of Pasco, Washington 2o16 Comprehensive AnnuaCFnanciaCR.eport
Non-Agriculture Wage and Salary Workers
Employed in Kennewick-Richland-Pasco MSA(rounded to hundreds)(')
Last Ten Fiscal Years
Employment Sector 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007
Goods Producing 14,900 14,600 1,400 13,600 13,400 13,600 13,300 13,200 12,900 12,700
Natural resources&construction 7,200 6,700 6,300 6,200 6,000 6,500 6,200 6,300 6,500 6,600
Manufacturing 7,700 7,900 7,700 7,400 7,400 7,100 7,100 6,900 6,400 6,100
Service providing 96,200 92,700 89,700 88,100 87,900 90,300 88,600 83,900 80,700 78,900
Private services providing 76,100 73,700 71,100 69,800 69,800 72,200 70,700 66,500 63,700 62,500
Trade,transportation,warehousing&utilities 20,100 19,100 18,100 17,500 17,100 16,700 16,600 16,200 16,700 16,800
Retail trade 13,900 12,700 12,100 11,800 11,700 11,500 11,400 11,300 11,700 11,900
Financial activities 3,900 4,000 3,900 4,200 3,900 3,700 3,600 3,400 3,600 3,600
Professional&business services 21,200 21,200 20,700 20,800 21,800 24,900 24,500 21,700 20,600 20,300
Administrative&support services 11,700 10,800 10,400 10,500 10,600 12,200 12,000 10,200 9,400 9,800
Education&health services 15,400 14,800 14,400 13,700 13,400 13,300 13,000 12,300 10,100 9,700
Leisure and hospitality 11,200 10,400 9,900 9,600 9,500 9,400 9,000 8,800 8,600 8,100
Food services 8,400 7,600 7,300 7,000 6,900 6,800 6,500 6,300 6,300 6,000
Government 20,100 19,000 18,600 18,300 18,200 18,100 18,000 17,400 17,000 16,400
Federal&State government 4,400 4,300 4,300 4,300 4,200 4,200 4,200 4,000 3,700 3,700
Local government 15,700 14,700 14,300 14,100 13,900 13,900 13,700 13,400 13,300 12,700
Total Non-Agriculture 111,100 107,300 103,700 101,700 101,300 103,900 101,900 97,100 93,600 91,600
Total Private 91,000 88,300 85,100 83,400 83,100 85,900 84,000 79,700 76,600 75,200
(1)Detail may not add to indicated total due to rounding. Ewholes 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. Infomration for 2005 through 2008 is from Washington State Employment
Security Department(using BLS data).All subsequent data(2009 and forward)is directly fromthe U.S.Bureau of Labor Statistics(BLS)and not seasonally adjusted.
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City of Pasco, 'Washington 2o16 Comprehensive AnnuaCFinanciaCReport
Building Permits
Last Ten Fiscal Years
(amounts expressed in thousands)
Res idental 2 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
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
2012 338 72,768 1,507 85,314 328 30,317 54 26,360 1,889 141,991
2013 220 50,396 1,705 73,701 364 44,173 44 6,862 2,113 124,736
2014 223 53,923 1,517 67,408 297 58,575 74 37,832 1,888 163,815
2015 248 62,949 1,724 83,033 317 48,618 98 36,291 2,139 167,942
2016 389 94,956 387 110,833 368 53,880 111 90,563 866 255,276
SOURCE-
1 City of Pasco website Building Pemrit History.
2 Includes single family and mobile home
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City of Pasco, 'Washington 2016 Comprehensive AnnuaCFinanciaCR.eport
Full-Time Equivalent City Gowernment Employees by Function
Last Ten Fiscal Years
Fiscal Year Ended December 31
Function 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
General government 49 51 52 46 45 45 45 49 50 52
Public safety
Muni Court 14 14 14 15 16 16 16 15 15 15
Police
Officers 64 66 69 67 67 67 71 71 71 77
Civilians 11 11 11 11 12 12 12 12 12 10
Fire
Firefighters and officers 34 34 34 34 33 33 35 35 39 35
Ambulance 15 15 15 16 18 19 19 19 19 28
Physical enviroment
Utilities
Water 18 20 22 22 22 21 20 20 22 24
Sewer 15 17 18 18 18 17 18 19 21 20
Water process reuse 3 3 3 3 2 2 3 2 2 3
Stormwater 4 4 4 4 5 5 4 5 6 6
Irrigation 2 2 2 2 2 2 2 4 4 5
Transportation
Highways and streets
Engineering 14 14 13 13 13 14 16 17 17 17
Maintenance 7 7 7 7 7 7 6 7 8 10
Health and human services 2 2 2 2 2 3 3 3 3 3
Economic enviroment 15 14 17 15 15 15 15 16 16 16
Culture and recreation 16 17 16 16 16 16 16 16 17 20
Total 283 291 299 291 293 294 301 310 322 341
Source:Annual Operating Budget
139
City of Pasco, 'Washington 2oi6 Comprehensive AnnuaCFnanciaCR.eport
Operating Indicators by Function
Last Ten fiscal years
Fiscal year
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Function
Public Safety
Police
Violent crime 150 166 217 183 202 178 151 183 156 146
Nonviolent crime 1,817 1,688 1,525 1,475 1,609 1,711 1,628 1,516 1,482 1,689
Calls for service 49,191 54,061 55,672 52,116 49,819 52,027 54,996 52,067 49,575 55,407
Victims per 1000 population 39 35 32 29 30 30 27 40 25 38
Fire&Emergency Medical Service
Number of emergency response-FIRE 428 233 238 215 277 260 279 241 281 243
%of total incidents-FIRE* 10% 7% 6% 6% 5% 6% 5%
Number of emergency response-EMS 2,586 3,316 3,005 3,016 3,337 3,474 3,394 3,731 4,011 3,960
%of total incidents-IMS* 90% 79% 79% 79% 79% 79% 77%
Number of emergency response-OTHER* 614 662 658 730 805 914
%of total incidents-OTHER* 15% 15% 15% 16% 16% 18%
Community Development
Number of new Single Family units 518 398 467 530 483 314 204 219 243 387
Number of new Muli Family units 0 0 0 8 1 16 0 8 0 0
Number of new Manufactured units 6 6 9 14 9 21 16 4 5 2
Corrunercial permits 310 274 351 279 317 382 408 341 415 479
Construction value(millions) 81.6 40.0 60.0 38.6 20.1 56.7 51.0 96.4 84.9 144.4
Residential permits 1,576 1,403 1,499 1,908 1,817 1,507 1,705 1,517 1,724 1,941
Construction value(millions) 106.2 82.9 102.1 119.2 113.3 85.3 73.7 67.4 83.0 110.8
Physical environment
Highway and streets
Street resurfacing(miles)* 4.6 3.50 3.57 9.63 0.00
Utilities
Water
Bills processed 177,195 189,061 194,614 202,136 207,685 217,911 226,934 227,682 233,858 239,670
New connections 734 543 631 666 571 449 328 340 438 568
Water meters replaced 75 78 73 1,842 1,900 2,640 1,431 1,471 1,499 1,117
Source:Various City of Pasco departments.
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City of Pasco, 'Washington 2o16 Comprehensive AnnuaCFinanciaCReport
City of Pasco
Building Permits
Year ended December 31,2016
Amounts Amounts
No.of Permits in Thousands in Millions
Commercial 368 53,880
Less Multi-Family 0 0
Industrial 111 90,563
479 144,443 144
Mobile Home 2 111
Plus Commercial Multi Family 0 0
Residential 1,941 110,722
1,943 110,833 111
Total 2,422 255,276 255
Single Family:
SFDU 387 94,845
Mobile Home 2 111
389 94,956 95
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City of Pasco, 'Washington 2oi6 Comprehensive AnnuaCFnanciaCReport
Capital Used by Function
Last Ten Fiscal Years
Fiscal Year Ended December 31
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Function
Public Safety
Police Stations 1 1 1 1 1 1 1 1 1 1
Police Sub-Stations 4 4 4 4 4 4 4 4 4 4
Patrolunits 35 37 43 43 50 52 53 58 39 54
Fire stations 3 3 3 3 3 3 3 3 3 3
Culture and recreation
Parks* 27 27 27 27 21 24
Parks acreage* 274 280 280 320 323 329
Swimming pools 3 3 3 3 3 3 3 2 2 2
Physical environment
Streets
Street(miles) 302 392 475 619 781 821 823 839 843 673
Street lights 3,138 3,172 3,222 3,290 3,374 3,449 3,469 3,476 3,532 3,469
Traffic signals* 49 50 50 50 50 50
Water
Water mains(miles) 292 298 302 306 309 313 314 315 323 318
Services(accumulated total) 15,335 15,508 15,748 16,081 16,305 16,660 16,754 16,783 17,206 17,671
Fire hydrants 1,916 1,966 1,997 2,036 2,069 2,106 2,114 2,138 2,214 2,266
Maximum daily capacity
Million Gallons per Day(M®) 29 29 29 33 33 30 30 30 32 33
Sewer
Sanitary sewer(miles) 209.5 216.2 219.8 224 226 264 265 266 269 272.89
Maximum daily treatment
capacity(M®) 7.1 7.1 7.1 7.1 7.1 7.1 7.1 7.1 6.5 6.5
Average daily treatment(MGD)* 3.1 3.3 3.6 3.9 4.0 4.1 4.3 4.5 5.0 5.2
Water Process Reuse
Irrigated acres 1,848 1,848 1,848 1,848 1,848 1,848 1,848 1,848 1,848 1,832
Total Acres 2,200 2,200 2,200 2,200 2,200 2,200 2,200 2,200 2,200 2,200
Storm Water
Storm sewer(miles) 40 40 40 42 43 45 46 47 48 50
Number of catch basins 2,738 2,801 2,878 3,089 3,176 3,289 3,322 3,336 3,451 3,623
Irrigation
Maximumdailycapacity(thousand of 12,300 16,100 17,100 17,100 17,100 17,100 17,100 20,760 20,760 20,760
gallons)
Sources:Various government departments.
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City of Pasco, 'Washington 2o16 Comprehensive AnnuaCFnanciaCReport
Waterworks Utility Customer Accounts
Last FSght Fiscal Years
For the Month of August
2008 2009 2010 2011 2012 2013 2014 2015 2016
Water System Accounts by Class
Single Family Residential 13,549 14,344 14,670 15,204 15,612 15,792 15,969 16,355 16,687
Multi-Family Residential 504 507 453 463 468 470 482 496 505
Commercial 1,058 1,112 1,272 1,296 1,321 1,421 1,372 1,430 1,443
Other 56 426 402 4,047 422 452 455 476 486
Total 15,167 16,389 16,797 21,010 17,823 18,135 18,278 18,757 19,121
Sewer System Accounts by Class
Single Family Residential 11,887 12,148 12,841 13,373 13,746 13,949 14,133 14,450 14,904
Multi-Family Residential 504 482 442 449 454 470 497 512 527
Commercial 921 1,017 935 949 969 987 1,004 1,125 1,128
Total 13,312 13,647 14,218 14,771 15,169 15,406 15,634 16,087 16,559
Stormwater System Customer Accounts 14,667 15,129 15,778 16,329 16,718 17,580 17,781 18,585 18,585
Irrigation System Customer Accounts 3,992 4,284 4,783 5,176 5,435 5,668 6,604 6,863 6,863
Percent of Total Annual Billed Revenue
Process Water Reuse Facility Customers
Pasco Processing 39% 43% 38% 50% 46% 46% 41% 42% 44%
Twin City Foods 16% 190/0 32% 16% 21% 190/0 22% 23% 26%
CRF Frozen Foods-Bybee Food 16% 18% 16% 17% 15% 21% 19% 19% 15%
Reser's Fine Food 290/. 20% 14% 17% 18% 14% 18% 16% 15%
1000/0 1000/0 1000/0 1000/0 100% 1000/0 100% 100% 1000/0
Source:City of Pasco billing systems.
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City of Pasco, 'Washington 2o16 Comprehensive AnnuaCFinanciaCReport
Waterworks Selected Utility Rates
Last Ten Fiscal Years
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Water rates and monthly charges
Inside city rates listed,outside city 90%surcharge
Consumption per 100 cu feet $ 0.54 $ 0.54 $ 0.54 $ 0.54 $ 0.65 $ 0.65 $ 0.65 $ 0.68 $ 0.68 $ 0.70 $ 0.74
Single family residential monthly base(in city)
Size of Service
3/4 inch 10.50 10.50 10.50 10.50 12.50 12.50 12.50 12.50 16.25 16.25 17.06
1 inch 15.75 15.75 15.75 15.75 18.74 18.74 18.74 18.74 24.35 24.35 25.57
Multi-family and commercial monthly base
Size of Service
3/4 inch 14.80 14.80 14.80 14.80 17.61 17.61 17.61 17.61 22.90 22.90 24.05
1 inch 21.37 21.37 21.37 21.37 25.43 25.43 25.43 25.43 33.05 33.05 35.18
1 1/2 inch 41.69 41.69 41.69 41.69 49.61 49.61 49.61 49.61 64.50 64.50 67.73
2 inch 66.88 66.88 66.88 66.88 79.59 79.59 79.59 79.59 103.45 103.45 108.62
3 inch 91.34 91.34 91.34 91.34 108.69 108.69 108.69 108.69 141.30 141.30 148.37
4 inch 131.60 131.60 131.60 131.60 156.60 156.60 156.60 156.60 203.60 203.60 213.78
6 inch 205.43 205.43 205.43 205.43 244.46 244.46 244.46 244.46 317.80 317.80 333.69
8 inch 284.68 284.68 284.68 284.68 338.77 338.77 338.77 338.77 440.40 440.40 462.42
Irrigation monthly charge
Base per residential unit 24.00 24.00 24.00 24.00 24.00 26.00 26.00 26.00 26.00 26.00 26.00
Per Irrigation unit 7.50 7.50 7.50 7.50 7.50 8.12 8.12 8.12 8.12 8.12 8.12
Per Irrigated acre 70.00 70.00 70.00 70.00 70.00 75.81 75.81 75.81 75.81 75.81 75.81
Sewer rates and monthly charges
Inside city rates listed,outside city 50%surcharge
Residential monthly base<=4 units 30.59 27.53 27.53 27.53 27.53 24.80 24.80 24.80 24.80 24.80 27.22
Residential monthly base>4 units 24.50 22.05 22.05 22.05 22.05 20.00 20.00 20.00 20.00 20.00 21.95
No residential consumption charge 8.30
Commercial base rate 40.88 36.79 36.79 36.79 36.79 33.35 33.35 33.35 33.35 33.35 36.60
Consumption per 100 cu ft over 1000 cu ft 1.29 1.29 1.29 1.29 1.29 1.29 1.29 1.29 5.25 1.29 1.42
Stormwater monthly charge
Residential
Single family residential 1.80 1.80 1.80 1.80 1.80 3.00 3.90 3.90 4.40 4.90 4.90
Apartments(per unit) 1.80 1.80 1.80 1.80 1.80 3.00 1.95 1.95 2.20 2.45 2.45
Multi-family residential(per unit) 0.90 0.90 0.90 0.90 0.90 1.50 1.95 1.95 2.20 2.45 2.45
Undeveloped parcels - - - - - - - - - - -
Vacant buildings 1.80 1.80 1.80 1.80 1.80 3.00 3.90 3.90 4.40 4.90 4.90
Indus trial/Commercial
Parking for 0-5 vehicles 1.80 1.80 1.80 1.80 1.80 3.00 3.90 3.90 4.40 4.90 4.90
Parking for 6-10 vehicles 3.60 3.60 3.60 3.60 3.60 6.00 7.80 7.80 8.80 9.80 9.80
Parking for 11-15 vehicles 5.40 5.40 5.40 5.40 5.40 9.00 15.60 15.60 13.20 14.70 14.70
Parking for 16 plus vehicles 7.20 7.20 7.20 7.20 7.20 12.00 19.50 19.50 17.60 19.60 19.60
Additional charges
Property runoff to City systems($1.25 min) 40.00 40.00 40.00 40.00 40.00 66.70 86.71 86.71 86.71 86.71 86.71
State Highway right-of-way-acre $10.00 S 10.00 $10.00 $ 10.00 $10.00 $16.68 $21.71 $21.71 $21.71 $21.71 $21.71
Source:City of Pasco Municipal Code Title 3
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City of Pasco, 'Washington 2oi6 Comprehensive AnnuaCFnanciaCReport
"Appreciation is a wonderful thing: it makes what is excellent in other belong to us as well. "
Voltaire
145
City of Pasco, -Washington 2016 Comprehensive AnnuaC E'inanciaCReport
STATE REQUIRED SCHEDULES
146
City of Pasco, Washington 2oi6 Comprehensive AnnuaCFnanciaCR.eport
MCAG NO. 0292
Schedule 9 -Schedule of Liabilities
For the Year Ended December 31,2016
Beginning Ending
ID No.Debt Type Description Due Date Balance Additions Reductions Balance
GENERAL OBLIGATIONS
251.12 Voted 1999 UTGO Library&Fire Station 12/1/2016 $ 400,000 $ $ (400,000) $
251.11 Councilmanic 2011 LTGO Refund 2001 LTGO 12/1/2020 2,385,000 (445,000) 1,940,000
251.11 Councilmanic 2015 LTGO Police Station 12/1/2035 8,795,000 (305,000) 8,490,000
263.83 Other Gov't 12006 Port Airport Fire Building 7/12/2016 8,393 3,537 11,930
263.96 LOCAL 2002 State LOCAL-Animal Control Fac.Lanc 12/1/2016 29,676 - (29,676) -
TOTAL GENERAL OBLIGATIONS 11,618,069 3,537 (1,179,676) 10,441,930
REVENUE OBLIGATIONS
252.11 Revenue Bond 2009 Revenue Bond Water Plant 11/1/2029 7,630,000 - (450,000) 7,180,000
252.11 Revenue Bond 2010A Water/Sewer Bond 6/1/2029 5,040,000 (275,000) 4,765,000
252.11 Revenue Bond 2010T Refund 98-Reuse Facility 6/1/2018 520,000 (165,000) 355,000
252.11 Revenue Bond 2013A Sewer Bond 12/1/2028 2,320,000 (100,000) 2,220,000
252.11 Revenue Bond 2013T Reuse Facility Bond 12/1/2028 6,800,000 (435,000) 6,365,000
252.11 Revenue Bond 2015 Water/Sewer Revenue Refunding 12/1/2040 14,380,000 - (210,000) 14,170,000
251.11 Councilmanic 2Cashmere Valley Bank Sewer SRF Refunding 7/31/2019 - 3,959,939 (576,936) 3,383,003
263.82 PWTF Loan Riverview Trunk/SE Sewer PW00-043 7/1/2020 555,702 - (111,140) 444,562
263.88 DWSRF Loan 3Columbia Water supply DM15-952-037 10/1/2034 - 67,430 (3,549) 63,881
263.82 SRF Loan Sewer Treatment Plant Phase 1&2 SRF Loan 2/24/2016 6,388,921 - (6,388,921) -
259.12 Accrued Leave Compensated Absences 2,317,927 2,178,022 (1,771,390) 2,724,559
264.40 OPEB Other Post Employment Benefits 3,331,084 755,119 4,086,203
264.30 Pension Liability 4Pension Liabilities 9,852,571 1,604,373 11,456,944
TOTAL REVENUE OBLIGATIONS 59,1369205 8,564,883 (10,486,936) 57,214,152
ASSESSMENT OBLIGATIONS
253.11 2010 LID 145-A Street Improvements 11/15/2020 160,000 - (115,000) 45,000
TOTAL ASSESSMENT OBLIGATIONS 160,000 - (115,000) 45,000
TOTAL LIABILITIES $70,914,274 $ 8,568,420 $(11,781,612) $ 67,701,082
Notes to Schedule of Long-Term Liabilities
lin 2016 the Port returned 2015 4th qtr payments to us,as well as two payments paid in 2016.According to the Port the loan is paid in full.We are trying to confum
2Cashmere Valley Bank issued a short term LTGO Bond to pay off Department of Ecology State Water Pollution Loan fromthe State Revolving Fund(SRF).
3Columbia Water Supply Loan is approved for$6,810,430;no draws have been taken but a$67,430 loan fee has been charged.The O/B will increase when draws are made.
4GASB 68 was implemented in 2015,however the Net Pension Obligation was not included on the 2015 Schedule of Liabilities.It has been included in 2016 beginning balance.
An LIDNote listed in the 2015 schedule for$40,301,was reclassified as an interfund loan.It is an interfund loan between LID 246 Fund and the Pension Trust Fund 610.
The City reported a pension liability in the government wide statement fora Fiduciary Fund for an old Firemen Pension Plan.The Pension Liability is$1,147,676 for 2016.
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City of Pasco, Washington 2016 Comprehensive AnnuaC E'inanciaCReport
MCAG NO. 0292
CITY OF PASCO
SCHEDULE 15-SCHEDULE OF STATE AND LOCAL FINANCIAL ASSISTANCE
For the Year Ended December 31, 2016
Grantor/ Other
Pass-Through Grantor Identification STATE
Program Title Number AWARDS
Washington State Department of Ecology
Shoreline Master Program SMP (DOE) G1400367 704
Water Qualiity Stormwater Capacity Grant WQSWCAP-1517-Pasco-00069 10,937
Total Department of Ecology 11,641
Department of Recreation Conservation Office
Highland Park Lighting & Upgrades 1303/15-1372D 133,500
133,500
Department of Health &Human Services
2016 Prehospital Participation Grant SFY16 1,290
1,290
TOTAL STATE AND LOCAL ASSISTANCE: 146,431
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City of Pasco, 'Washington 2oi6 Comprehensive AnnuaCFnanciaCReport
MCAG NO.0292
SCHEDULE 16-SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Year Ended December 31,2016
From
Grantor/ Federal Other Pass- From
Pass-Through Grantor CFDA Identification Through Direct
Program Title Number Number Awards Awards Total Note:
Forest Service.Department of Agriculture
Pass-Through WA State Department of Natural Resources
Cooperative Forestry Assistance 10.664 2016 Tree Inventory grant 15,000 - 15,000 2
Office of Community Planning and Development. Department of Housing&Urban Development
Community Development Block Grant/Entitlement Grant 14.218 B-14-MC-53-009-CDBG 62,803 62,803 3
Community Development Block Grant/Entitlement Grant 14.218 B-15-MC-53-009-CDBG 129,784 129,784 3
Community Development Block Grant/Entitlement Grant 14.218 B-16-MC-53-009-CDBG 297,479 297,479 3
Community Development Block Grant/Entitlement Grant cluster - 490,066 490,066
Pass-Through Washington Department of Commerce
Community Development Block Grants/State's program 14.228 08-F6401-014 1,808 - 1,808 3
Pass-Through City of Richland
Home Investment Partnerships Program 14.239 Home Program 279,174 - 279,174 3&5
Bureau of Justice Assistance.Department of Justice
Bullet Proof Vest Partnership Program 16.607 2016 Bullet Proof Vest 5,638 5,638 2
Pass-Through Washington Department of Commerce
Violence Against Women Formula Grant 16.588 2015-WF-A>F0053/F15-31103-040 34,697 - 34,697
Pass-Through from METRO Drug Task Force -
Edward Byrne Memorial Justice Assistance 16.738 F15-31440-008 307 307 2
Criminal Division.Department of Justice
Pass-Through from US Marshalls -
Equitable Sharing Program 16.922 Equitable Sharing 15,868 15,868 6
US Department of Transportation/Federal Highway Administration
Pass-Through Washington Department of Transportation
Highway Planning and Construction 20.205 STPUL-3515(007)LA-8059 1,786 1,786 2&8
Highway Planning and Construction 20.205 STPUS-0397(008)LA-7866 52,384 52,384 2
Highway Planning and Construction 20.205 STPUL-3515(008)LA-8322 49,166 49,166 2
Highway Planning and Construction 20.205 HSIP-3551(004)-LA 8697 75,426 75,426 2
Highway Planning and Construction 20.205 STPUL-3515(006)LA-8060 56,082 56,082 2
Highway Planning and Construction 20.205 STP UL-991 1(010)LA-8321 121,589 121,589 2&4
Highway Planning and Construction 20.205 STP UL-1 823(062)LA 8318 141,484 141,484 2
Highway Planning and Construction 20.205 STPUL-3522(001)LA-8117 1,576 1,576 2
Total US Dept.of Transportation FHA 499,493 499,493
US Department of Transportation-National Highway Traffic Safety Administration(NHTSA)
Pass-Through Washington Traffic Safety Commission
State and Community Highway Safety 20.600 2015-2016 Seat Belt Patrols 493 493 2
State and Community Highway Safety 20.600 2015-2016 DISTRACTED Driving Pa 767 767 2
State and Community Highway Safety 20.600 2016-2017 Impaired Driving 1,236 1,236 2
State and Community Highway Safety 20.600 G16PTDPTWTSC 19,836 19,836 2
State and Community Highway Safety 20.600 2015-2016 Impaired Driving Patrols 378 378 2
Total CFDA 20.600 22,710 22,710 2
State and Community Highway Safety 20.616 2015-2016 WTSC-Flex Funding 3,031 3,031 2
State and Community Highway Safety 20.616 2016-2017 Flex Funding 974 974 2
Total CFDA20.616 4,005 4,005
Total US Dept of Transportation NHTSA 26,715 26,715
Aministration for Community Living.Department of
Health&Human Services
Pass-Through Yakima County.Office of Aging&Long Term Care
Special Programs for the Aging_Title III,Part B 93.044 ALTC 15 $ 16,487 $ $ 16,487 2
Total US Dept of Health&Human Services 16,487 16,487
TOTAL FEDERAL AWARDS EXPENDED: $ 889,549 $ 495,704 $1,385,253
The accompanying notes are an integral part of this schedule.
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City of Pasco, 'WashfRgton 2o16 Comprehensive AnnualFnancialReport
NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
NOTE 1 —BASIS OF ACCOUNTING
The Schedule of Expenditures of Federal Awards is prepared on the same basis of accounting as the City's
financial statements. The City uses a modified accrual basis of accounting for its governmental funds and
full accrual basis of accounting for its proprietary funds.
NOTE 2—PROGRAM COSTS
The amounts shown as current year expenditures represent only the federal grant portion of the program costs.
Entire program costs, including the City's portion, are more than shown. Such expenditures are recognized
following, as applicable, either the cost principles in OMB Circular A-87, Cost Principles for State, Local, and
Indian Tribal Governments, or the cost principles contained in Title 2 U.S. Code of Federal Regulations Part 200,
Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, wherein
certain types of expenditures are not allowable or are limited as to reimbursement.
NOTE 3 —REVOLVING LOAN—PROGRAM INCOME
The City participates in a Regional Revolving Loan program for economic development which is operated
by Benton Franklin Council of Governments. Under this federal pass-through grant, repayments to the
City are considered program income, and loans of such funds to eligible recipients are considered
expenditures.
The City participates in the Neighborhood Stabilization Program for recovering foreclosed properties
which are rehabilitated and sold as low-income housing. Under this federal pass-through grant, the sale of
low-income homes by the City is considered program income, and the cost of rehabilitating homes and
purchasing properties are considered expenditures.
The City also participates in the Housing and Urban Development HOME Program for low-income
individuals, as part of a regional consortium administered through the City of Richland. The City is not
privy to information on what portion of funds received from the City of Richland are derived from program
income.
NOTE 4—PRIOR YEAR EXPENDITURES
The amount reported includes $44,030 previously unreported prior year expenditures. This amount was
not billable due to max received on grant award. Grant was amended giving the City authorization to
request previous expenditures.
NOTE 5—AMOUNTS AWARDED TO SUBRECIPIENTS
The total amount of$279,174 was passed through to sub-recipient City of Richland.
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Cit-of Pasco, 'Washington 2016 Comprehensive AnnuaCFnanciaCReport
NOTE 6–DEPARTMENT OF JUSTICE –EQUITABLE SHARING
The City reports these funds on the Schedule of Expenditures of Federal Awards when program proceeds
are received rather than when expenditures are incurred due to program stipulations.
NOTE 7–INDIRECT COST RATE
The amount expended includes $0.00 claimed as an indirect cost recovery using an approved indirect cost rate
of 0 percent. The City has elected to use the 10-percent de minimis indirect cost rate allowed under Uniform
Guidance.
NOTE 8–PRIOR YEAR EXPENDITURES
The amount reported includes $1,786 previously unreported prior year expenditures. This amount was not
billable due to max received on grant award. Grant was changed giving the City authorization to request
previous expenditures.
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City of Pasco, -Washington 2016 Comprehensive AnnuaC E'inanciaCReport
MCAG NO. 0292
SCHEDULE 19- LABOR RELATIONS CONSULTANTS
For the Year Ended December 31, 2016
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 Elizabeth Kennar, 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:
$1,012.50 $3,681.16 pd by HR to consultant
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.): $285.00 per hour
Maximum Compensation Allowed: 0 Maximum Compensation Allowed: 0
Duration Of Services: Various throughout the year.
Services Provided: Union Bargaining Assistance-Wesley
Human Resources Issues - Kennar
Certified Correct this 16th day of February 2017
to the best of my knowledge and belief:
Signature
Colleen Chapin - -
HR Manager
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Cityof Pasco, 'Washington 2oi6 Comprehensive AnnuaCFinanciaCR.eport
MCAGNO.0292
SCHEDULE 21-LOCAL GOVERNMENT RISK ASSUMPTION
For the Year Ended December 31,2016
ProgramManager: Coleen Chapin
Address: 525 N 3rd Ave Pasco Wa 99301
Phone: 509-545-3473
Email: cha inc asco-wa.aov
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 ofrisk does the entity self-insure?(Check all that apply)
Liability
Property
X Health and welfare(medical,dental,prescription)
Unemployment compensation
Workers'compensation
Other-please dscrib e
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 othermember(s)
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 deternune its liabilities?(yes or no)
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Cit-of Pasco, 'Washington 2016 Comprehensive AnnuaCFnanciaCReport
MCAGNO.0292
SCHEDULE 21-LOCAL GOVERNMENT RISK ASSUMPTION
For the Year Ended December 31,2016
Third Party Administrator Benefit Management,hic.
Contact Kelli Gerstenkom
Address: PO Box 1090,Great Bend,KS 67530
Phone: 800-290-1368 x2076
Email: kalover bMkansaa=
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 28,514 28,302 $5,542,028.45
Dental 1,957 1,693 $396,816.44
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City of Pasco, 'Washington 2oi6 Comprehensive AnnuaCFinanciaCReport
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.
Richa Sigdel
Finance Director
Lynn Kauer
Accounting Lead
Darcy Buckley
Accounting Lead
Karen Conn
Staff Accountant
Charlene Sandland
Staff Accountant
Cindy Willis
Accounts Payable
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