HomeMy WebLinkAbout2017 ACFR COMPREHENSIVE ANNUAL
FINANCIAL REPORT
CITY OF PASCO, WASHINGTON
FOR THE FISCAL YEAR ENDED
DECEMBER 31, 2017
CITY 1
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Prepared by:
Finance Department
Richa Sigdel-Director
City of Pasco, "Washington 2017 Comtirehensive .AnnualFinancial Rep
TABLE OF CONTENTS
INTRODUCTORY SECTION
Letterof Transmittal ............................................................................................ 1
OrganizationalChart ........................................................................................... 7
Directory of City Officials and Management Team........................................................ 8
FINANCIAL SECTION
Independent Auditor's Report ................................................................................. 9
Management's Discussion and Analysis .................................................................... 13
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................................................ 33
Notes to the Financial Statements...............................................................................34
Required Supplementary Information
Firemen's OPEB Fund/Other LEOFF 1 OPEB....................................................... 90
Schedule of Proportionate Share of the Net Pension Liability -All State Plans.................. 92
Schedule of Employer Contributions - All State Plans................................................ 93
Schedule of Employer and Other Contributions—Fire Pension Plan ............................... 94
Schedule of Changes in Net Pension Liability—Fire Pension Plan.................................... 94
Combining and Individual Fund Statements
Combining Balance Sheet—Nonmajor Other Governmental Funds ................................ 96
Combining Statement of Revenues, Expenditures and Changes in Fund Balance-
Nonmajor Other Governmental Funds ................................................................. 97
Combining Balance Sheet—Nonmajor Special Revenue Funds ................................... 98
Combining Statement of Revenues, Expenditures and Changes in Fund Balance-
Nonmajor Special Revenue Funds...................................................................... 102
Combining Balance Sheet—Nonmajor Debt Service Funds.......................................... 106
Combining Statement of Revenues, Expenditures and Changes in Fund Balance-
Nonmajor Debt Service Funds......................................................................... 107
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City of Pasco, "Washington 2017 Comtirehensive .AnnualFinancial Rep
TABLE OF CONTENTS (continued)
Statement of Revenues, Expenditures and Changes in Fund Balance— Budget to Actual
Major Construction Fund................................................................................ 108
Schedule of Revenues and Expenditures—Budget to Actual—Nonmajor Other Governmental
Funds ..................................................................................................... 109
Combining Statement of Net Position—Nonmajor Internal Service Funds........................ 111
Combining Statement of Revenues, Expenses, and Changes in Net Position—
Nonmajor Internal Service Funds...................................................................... 112
Combining Statement of Cash Flows—Nonmajor Internal Service Funds................................ 113
Combining Statement of Net Position—Fiduciary Funds............................................. 115
Combining Statement of Changes in Net Position—Fiduciary Funds............................... 117
Combining Statement Assets and Liabilities—Agency Funds....................................... 118
STATISTICAL SECTION
Financial Trends
NetPosition by Component.................................................................................................... 122
Changesin Net Position............................................................................................................. 123
Governmental Activities Tax Revenues by Source....................................................... 124
Fund Balances of Governmental Funds................................................................................... 125
Changes in Fund Balances of Governmental Funds................................................................ 126
Revenue Capacity
Assessed Value of Taxable Property .......................................................................................... 127
B&O Taxes by Type ........................ .................................................................................. 127
PropertyTax Rates ....................................................................................................................... 128
TaxableRetail Sales ................................................................................................. 128
Principal Property Taxpayers....................................................................................... 129
Principal B&O Taxpayers ..................................................................................... 129
Top Ten Industries that Generate Sales Tax.............................................................. 130
Property Tax Levies and Collections...................................................................................... 130
Debt Capacity
Ratios of Outstanding Debt by Type/Ratio of General Bonded Debt Outstanding....................... 131
LegalDebt Margin.............................................................................................................. 132
Direct and Overlapping Governmental Activities Debt................................................ 133
Waterworks Utility Debt Service Coverage................................................................................. 134
Demographic and Economic Information
Demographic and Economic Statistics.......................................................................................... 135
PrincipalEmployers...................................................................................................... 136
Non Agriculture Wage and Salary Workers.............................................................. 137
BuildingPermits............................................................................................. 138
Operating Information
Full Time Equivalent City Government Employees by Function...................................... 138
Operating Indicators by Function......................................................................... 139
BuildingPermits............................................................................................. 140
Capital used by Function................................................................................... 141
Waterworks Utility Customers ............................................................................. 142
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City of Pasco, "Washington 2017 Comtirehensive .AnnualFinancial Rep
Waterworks Utility Rates................................................................................... 143
STATE REQUIRED SCHEDULES
Schedule 9— Schedule of Long-Term Liabilities......................................................... 146
Schedule 15 — Schedule of State Financial Assistance....................................................... 147
Schedule 16— Schedule of Expenditures of Federal Awards............................................... 148
Notes to Schedule of Expenditures of Federal Awards................................................ ..... 149
Schedule 17—Limitation on Public Works Projects performed by employees........................ 150
Schedule 19 - Labor Relations Consultants.................................................................. 151
Schedule 21 —Local Government Risk Assumption....................................................... 152
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City of Pasco, 'Washington 2017 Comprehensive .AnnuaCTinancial ReporL 3 t
F 0 CITY MANAGER (509)54S-3404 1 Fax (509) 545-3403
P0. Box 293, (525 North 3rdAvenue I N,L:o,)4'ashinginn 99301 ) www.pa.co-waG,gov
"94W
May 30, 2018
Honorable Mayor, Members of the City Council, Pasco Community Members and interested
parties,
We are pleased to submit the Comprehensive Annual Financial Report (CAFR) of the City of
Pasco for the year ended December 31,2017. 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 within the 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, 2017 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 31,2016 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, 2016,
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.
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City of Pasco, -Washington 2017 Comprehensive AnnuaCTinancial Report
GAAP requires that management provide a narrative introduction, overview and analysis to
accompany the basic financial statements in the form of Management's Discussion and Analysis
(MD&A). This letter of transmittal is designed to complement the MD&A and should be read in
conjunction with it. The City of Pasco's MD&A can be found immediately following the report
of the independent auditors.
PROFILE OF THE CITY OF PASCO
The City of Pasco is located in 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 2017, Office of
Financial Management estimated the City's population at 73,013. This represents over a 16%
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. Historically, the City Council was made up of five
council seats decided by district in the primary election, but "at-large" in the general election,
and two"at-large"seats,which were voted on in a City-wide vote in both the primary and general
election. Due to rapid population growth, the voting district boundaries have been changed
several times. The City's demographic characteristics have also changed. In 2015, the City
Council pursued a change to district-based election system in both primary and general elections;
however, during the 2015 and 2016 legislative sessions, the State legislature failed to pass
legislation allowing such a change to occur. In the interim, the American Civil Liberties Union
("ACLU") filed a complaint for an alleged violation to the federal Voting Rights Act. The City
and the ACLU jointly proposed to pursue a remedy through a Consent Order to the United States
District Court for the Eastern District of Washington State to allow for the change to district-
based voting in the general election.While similar,the City and ACLU proposal differed slightly.
On January 27, 2017, a Senior Federal District Court Judge, the Honorable Lonny Suko, found
that the City's proposed plan of six voting districts with one "at large" position met the
requirements of the federal Voting Rights Act and ordered the change, including that all seven
seats stand for election in 2017. The City Council is comprised of seven members, six elected by
district, one elected at-large, with one of the seven 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, current and long-range
planning and zoning and general administrative services. The City owns and operates a
water/sewer system, a cemetery and a championship golf course. The City also owns a baseball
stadium that is leased to an independent operator.
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City of Pasco, 'Washington 2017 Comprehensive AnnuaCginanciaCReport
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 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 200 full time workers. Reser's Fine Foods completed
construction of a $15 million fresh potato products plant in 1998 that employs 230 full-time
workers.
Bybee Fresh Foods (now known as J.R. Simplot) 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 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. The facility is operational in 2017 and employs 320 full-time
workers.
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
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Cityof Pasco, 'Washington 2017 Comprehensive .AnnualFinancial Report
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 technology-based research area known as the Tri-Cities Research District.
Currently, the 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 $4.8 billion wine industry, ranking it only second nationally for
premium wine production. Known as the "Heart of Washington Wine Country," Columbia
Valley region is home to over 200 wineries within a 60-mile radius, with 50,000 acres of
vineyards, making it bigger in area than Napa Valley.
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.
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Cit► of Pasco, 'Washington 2017 Comprehensive .AnnualFinancial Report
Pasco is also the home of the region's only international airport, train and bus depots. Tri-Cities
Airport, a regional airport served by several airlines with direct flights to nine major US cities:
Denver, Las Vegas, Los Angeles, Mesa, Minneapolis, Portland, Salt Lake City, San Francisco,
and Seattle.The local Amtrak station and a Greyhound bus station is located in Pasco,connecting
the City to the rest of the country. Additional commercial transportation is also accomplished
through extensive barge traffic on the Columbia and Snake rivers. Rail transport is provided by
the BNSF Railway. Trucking uses Interstate 182, and to a lesser extent U.S. Route 395.
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
average growth since 2010 Census has remained level at 2.1% per annum. Washington State's
and United States' average growth of 1.4%and 0.7%,respectively,have not kept pace. The trend
for this region appears to remain on track with a 2017 growth rate at 2.3%.
In 2017, the Pasco economy was stable and continued to grow. The City issued 2,616 building
permits representing approximately$250 million in construction value. Of the total permits,468
were for new single-family residences, which equates to $119 million in construction value. The
average value of a new home in Pasco was approximately $255,000, in 2017. This is a 21%
increase in home value compared to $210,000 in 2010. This growing economy was reflected in
Standard & Poor's rating the 2017 Utility 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. The City has continued its annexation process as the City continues to grow. The
City annexed property assessed at $520,000 in 2017.
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. In 2017, voters approved a $99,500,000 bond to expand a middle school, add two
elementary schools and a middle school and other safety projects.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. The
school district was the largest employer in the City, with 2,065 employees.
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City of Pasco, 'Washington 2017 Comprehensive .AnnualFinancial Report
Businesses have continued making significant investment in Pasco through their new or existing
infrastructure. A large rental storage, Great Harvest, and Bleyhl, with $11 million in value, is
being constructed in Chapel Hill area. A multi-family complex on East Ainsworth area is being
planned at the cost of$5 million. In total, the City estimates more than $66 million investment
in construction for commercial and industrial purposes.
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
6,800 students today, Columbia Basin College continues meet the higher education needs of
residents in Benton and Franklin Counties. The College started the operation of a student housing
building,which will provide 45 units to house 125 students;with the goal of building 375 single,
double, and quad units in the future. In 2017, the college was the third largest employer in
Franklin County, with 766 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
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Richa Sigdel, Finance Director
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City of Pasco, 'Washington 2017 Comprehensive AnnuaCginanciaCReport
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City of Pasco, 'Washington 2017 Comprehensive AnnuaCginanciaCPeport
Directory of City Officials and Managers
As of December 31,2017
Elected Officials District Term
Mayor
Matt Watkins At-Large 2018-2019
Mayor Pro Tem
Craig Maloney District Six 2018-2021
Council Members
Blache Barajas District One 2018-2021
Ruben Alvarado District Two 2018-2019
Saul Martinez District Three 2018-2021
Pete Serrano District Four 2018-2021
David Milne District Five 2018-2019
Administrative Officials
City Manager David Zabell
Deputy City Manager Stanley R Strebel
Police Chief Robert W.Metzger
Fire Chief Robert W. Gear
Administrative&Comniunity Services Director- Interim Dan Dotta
Community Development Director Rick White
Finance Director Richa Sigdel
Public Works Director- Interim Richard G. Terway
Municipal Court Judge Unassigned
Manap,ement Team
Municipal Court Administrator Dorothy R.French
Human Resources Manager Colleen Chapin
PD Deputy Police Chief Ken Roske
PD Captain(Detective) Brent Cook
PD Captain(Patrol) Jeff Harpster
Fire-Deputy Chief Dave Hare
Facilities Manager Dan Dotta
Recreation Manager Brent Kubalek
Information Services Manager Jesse Rice
Customer Service Manager Stephanie Brock
City Engineer Dan Ford
Construction Manger Kent McCue
PW Superintendent John Millan
PW Division Manager Unassigned
PW Division Manager Derek Wntala
PW Division Manager Curt Shaw
PW Division Manager Unassigned
PW Senior Management Analyst Troy Phillips
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Cit-V of Pasco, 'Washington 2017 Comprehensive AnnuaCT nanciaCReport
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PENDENT
FINANCIAL STATEMENTS
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a City of I'lasto
,lfantiary 1, 2017 thraugh December 31, 2017
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',Mayor and city coa'c II
City of-Pmeo
APasco, Washington
REPORT ON THE FINANCIAL STATEMENTS
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We have acditM the accornpanying financial staterneiits of the governmental activities, the
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business-type autivities,, each major fnd and Ehc aggregate discretely Rxcsented component units
and remaining fund information of the City of Pasco, as of and for the year ender! December 31,
2017,and the related notes io the financial statements,which collectively cu mprise the City's basic
ofinancial statements as listed on page 19_
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Management's Responsibility Por the. kinanrial Statements
Management is responsible for the preparation and Fair presentation of these financial statements
in accordance with accounting principles generally aj�ccptcd in the United Stairs of America; this
includes the design, implementation, and maintenanor, of internal control T; lIcvant to the
1 preparation and fair presentation ofif*inancW statements that are free from material miss ternent,
M whether due to fraud cit error,
Auditor's Responsibility
Z (Jur responsibility is to expre2.s opinions on these financial statements based on our audit, We
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conducted our audit in aceordanue with auditing standards generally accepted in the 11nitcd Stages
of America and the standards a*ic:ahle to financial audits contained in Gouernrtmerd Audifing
Standards, issued by the Comptroller General of'the United State_ Those standards require that
w�. plan and perfonu (he audit to obtain reasonable assurance about whether the financial
stawirienls are free froin material tnisstal mcnt,
An audit involvcs perfonning procedures to obtain audit evidence about the arnouuts and
disclosures in the Iinan6al statements, The procedures sed ocled depend on the auditor's judgment,
includi ng the x sessn,cm of the risk s of material m issLxtiLmenEt of the financial staterncnts, whether
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City of Pasco, 'Washington 2017 Comprehensive AnnuaCginanciaCReport
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d due to Baud or crwr. in making those risk assessmerm, the auditor considers internal control
4 relevant to the City's preparation and fair presentation of the financiai statements in mdur to design
I audit procedure that are appropriate in the circumstancEm hat not for the purpose of expressing
0 an opinion on the cffectiverness of the City's internal control_ Aecordingly,we express no such
p opinion. An audit also includes evaluating the appropriateness of accounting policies usrcl and the
reasonableness afsigni ficant accounting estimates made by munagctnent,as welt asevaluatingthe
overall presentation of the financial statements_
We be]ieve#hat the audit evidence we have obtained is suffi cient and apprepri ate to provide a Basi s
aFor our audit opinions.
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0 in our opinion, the financial statements refencd to above present fairly, in all material respects,
the respective Enancial position of the goverrunmtal activities, the business-type activities,ewh
93 major fund and the ag67cgate discretely presented component units and remaining fund
infbrmation of the City ofYawo,asof December 31,2017,and the resppctivcchanges in financial
A pcs�tion and, where applicabie,cash flows thereof, and the budgetary comparison for the General
# Fund, for the year then ended in accordance with accounting principles generally accepted in the
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United States of America.
Matters or emphasis
As discusnud in Note 15 to the financial statements, in 2017, the City adopted new accounting
guidance, Governmental Accounting Standards Board Statement No. 15, Aecounring and
FlnanOaf Repejrtlrtg for Poseemployment Benef4s Orher Than Pensions. 013r opinion is not
1 modified with respect to this matter.
Other Matters
Required Suppfementarf Information
y AwA)unting principles generally accepted ire the United States of America require that the
management's discussion and analysis and required supplementary information listed on page 19
�1 be presented to supplemml the basic financial statements, Such inform a#inn, although not apart
of thtu basic financial sta=ge nts, is required by the Governmental AcQoanting Standards Board
who considers it to be an essential pmi of finanuiai reporting for piecing the basic financial
Ai statern mb;in an appropriate operational,economic or historical context. We have applied cel-Lain
limited procedures to the r gajred suppletnntary information in accordance: with auditing
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Cit-V of Pasco, 'Washington 2017 Comprehensive AnnuaCgfnanciaCReport
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1A standards generally accepted in the United States of America, which consisted of inquiries of
management aboul ilio methods of preparing the inilormalion and comparing the information fur
Qconsistency with management's responses to ottr inquiries, the basic financial swternents, and
I other knowledge we obtained during our audit of the htrLic firimciat statements_ We do Trot"press
an opinion or provide any assurance on the information because the limited proecdures do not
provide us with sufficient evidence to exprem an opinion or provide any assurance.
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Supplementary and Other Intfurination
Our audit was conducted for the purpose of forming opinions on the financial slatcments that
collectively comprise the City's basic finaneisJ stalements. The accompanying Schedule of
Expenditures of Federal Awards i9 presented for purposes of additional antilysin as required by
Title 2 U.S. Code of Yederal Regulations(CFR)Pw 240, Unf forni Adminisrralfke Requircments,
Cost Prineiples, and ArrdilAwards(Un]forn7Guidan )- 'fhisschedufe
is not a rquired pnrt of the bAsic financial statements- Such information is the responsibility of
roan tgement and wa derived fiom and relates dace y to the underlying acwvnling and other
drecords used to pre=pare the basic financial statements_ The information has been subjmtcd to the
o auditing procedures applied in the Audit of the basic financial statements and certain additional
0. procedures, including comparing and reconciling such information directly to the undo.-rlying
accounti rig and othorrecords used to prepare the basic financial statements or to the basic finamcia[
statements themselves, and other additional procedures in accordance with auditing standards
genemllyawepted in the Uniled States of America, in OurO*iort, Che information is fairly statud,
in all material respects, in relation to the basic financial sta#omcnts taken as a whole,
I OTHER REPORTING REQUIRED BY GOVERNMENT T AUDITING
y
STANDARDS
W tri accordance with Government Auditing Standards, we have also issued our report dated
ZSeptember 24,201$ on our considmfaon of the City's internal control ow r financial reporting and
l■I on our tats of its compliance ;-%ith certain provisions of laiv,;, regulations. contracts and grant
agreements and other matterm_ The put)ose of that report is to describe the scope of our testing of
IN internal control over financial reporting and compliance and the results cif that testi ag, and not to
I�
11
City of Pasco, -Washington 2017 Comprehensive AnnuaCTinancial Report
e
Y
s provide an opinion on inletnal control over financia)rgK)rting or on cornplianee. That report is an
V integml part of an audit performed in accorducc with Governmenf Auditing Standar& in
considcring the City's int�emO eantrol over financial r pt�rtir�g€u�d compliance_
Y
'd Pat McCarthy
6 State Auditor
Olympia, WA
p
September 24, Ql$
0
0
1
i
1M
`M
rw�
w
12
City of Pasco, 'Washington 2017 Comprehensive .AnnuaCTinancial 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, 2017. 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$414,540. Of this amount, $56.11
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 $7,024. Approximately 91% of the
increase in net position is due to increases in business-type activities and 9% 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$36,455, an increase of$1,363 in comparison with the
prior year, which is inclusive of prior period adjustments that restated fund balance.
• At the end of the current fiscal year, the unrestricted, unassigned fund balance for the
City's General Fund was $13,118, which also represents 29% of total General Fund
expenditures. There was an excess of revenues over expenditures of$861; transfers out
totaling $2,403. Of the transfers out, $1,090 was for one-time expenditures (to cover
construction project capital spending) and $1,313 for cash flow and other subsidies to
Special Revenue funds.
• Implementation of GASB 74-Financial reporting for postemployment benefit plans other
than pension plans,which dictates unfunded OPEB liabilities to be recognized on the face
of an agency's financial statement, has impacted the City for$11,992.
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
13
Cit-V of Pasco. "Washington 2017 Comprehensive .AnnuaCEinancial Report
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
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 ou flows 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 2017,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
14
City of Pasco, Washington 2017 Comprehensive .AnnualFinancial Rem
fund data for each of these non-major governmental funds is provided in the form of Combining
Statements elsewhere in this report.
The City of Pasco adopts an annual appropriated budget for its General Fund. A budgetary
comparison statement has been provided for the General Fund to demonstrate compliance with
this budget.
The basic governmental fund financial statements can be found starting on page 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. Generally 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. However with the implementation of GASB Statement 68, Accounting
and Financial Reporting For Pensions, and GASB Statement 74, Financial Reporting For
Postemployment Benefit Plans Other Than Pension Plans, the City is required to include net
Pension and OPEB Liabilities and Assets and the related Deferred Inflows and Outflows of
Resources of the Fiduciary Funds in the Government Wide Statements. 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 34.
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 $414.55 million at the close of the most recent fiscal year. The largest
portion of the City of Pasco's net position$358.44 million(86%)reflects its investment in capital
15
City of Pasco, "Washington 2017 Comprehensive .AnnualFinancial Report
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%
($18.10 million) of the City of Pasco's net position represents resources that are subject to
external restrictions on how they maybe used. The remaining$38.01 million of unrestricted net
position (9%) may be used to meet the government's ongoing obligations to citizens and
creditors.
City of Pasco's Net Position(in millions)
GovemanentalActivities Business-TeActivities Total Primary
Government
2017 2016 2017 2016 2017 2016
NonCapital assets $ 63.33 $ 51.73 $ 38.60 $ 25.02 $ 101.93 76.75
Capital assets 227.02 223.53 187.67 180.87 414.69 404.40
Total assets 290.35 275.26 226.27 205.89 516.62 481.15
Deferred Outflows 1.95 3.41 0.43 0.57 2.38 3.98
Current liabilities 8.94 7.85 6.34 4.32 15.28 12.17
Noncurrent liabilities 32.91 24.14 52.21 40.72 85.12 64.86
Total liabilities 41.85 31.99 58.55 45.04 100.40 77.03
Deferred Inflows 3.62 0.49 0.43 0.08 4.05 0.57
Net position:
Investment in capital assets 217.06 212.71 141.37 141.48 358.43 354.19
Restricted 18.10 16.90 - - 18.10 16.90
Committed 5.37 4.40 - 5.37 4.40
Unrestricted 6.30 12.18 26.34 19.86 32.64 32.04
Total net position $ 246.83 $ 246.19 $ 167.71 $ 161.34 $ 414.54 $ 407.53
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 $7.02 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.
16
City of Pasco, 'Washington 2017 Comprehensive AnnuaCginanciaCReport
City of Pasco's Change in Net Position(in millions)
Governmental Activities Business-Ty e Activities Total PrimaryGovernment
2017 2016 2017 2016 2017 2016
Revenues
Program revenues:
Charges for services $ 16.27 $ 23.50 $ 25.82 $ 23.47 $ 42.09 $ 46.97
Operating grants&contributions 1.04 1.32 0.07 0.01 1.11 1.33
Capital grants&contributions 14.19 25.05 5.27 7.19 19.46 32.24
General revenues:
Property taxes 7.96 7.93 7.96 7.93
Other taxes 29.82 26.80 29.82 26.80
Investment income and miscellaneous 4.09 2.26 0.21 0.15 4.30 2.41
Totalrevenues 73.37 86.86 31.37 30.82 104.74 117.68
Program expenses:
General government 8.59 8.72 8.59 8.72
Public safety 30.66 29.38 30.66 29.38
Transportation 17.89 16.63 17.89 16.63
Economic environment 6.89 5.62 6.89 5.62
Culture and recreation 9.17 8.93 9.17 8.93
Interest on long term debt 0.45 0.50 0.45 0.50
Water 10.20 9.48 10.20 9.48
Sewer 8.99 8.57 8.99 8.57
Process waterreuse 2.59 3.17 2.59 3.17
Storm water 1.30 1.53 1.30 1.53
Irrigation 1.99 1.65 1.99 1.65
Total expenses 73.65 69.78 25.07 24.40 98.72 94.18
Changes in net position (0.28) 17.08 6.30 6.42 6.02 23.50
Transfers (0.07) 0.07
Total changes in net position $ (0.35) $ 17.08 $ 6.37 $ 6.42 $ 6.02 $ 23.50
Governmental Activities. Governmental activities decreased the City of Pasco's net position by
($16.73). The decrease is attributable to the implementation of GASB 74 as mentioned in the
financial highlights section. In 2017, the city added 10 positions: 1 in the Police Department, 6
in the Fire Department, 1 in the Administrative & Community Services Department, and 2 in
Community and Economic Development. Additionally, in 2016, the City also approved
additional 11 positions, eight 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 2.5%, Sales tax revenue increased by 6.3%,
and Real Estate Excise tax revenue increased by 20.9%. During the same period, utility tax
revenue increased by 16.4%,primarily due to longer and colder weather.
17
City of Pasco, 'Washington 2017 Comprehensive .AnnuaCTinancial Peport
GOVERNMENTAL ACTIVITIES —REVENUES BY SOURCE
Sources of Revenues 2017 Sources of Revenues 2016
biwstment Charges for
income and services Investment
miscellaneous 22
3% income and
miscellaneous
3� Charges for
services
27%
Operating
grants& Other taxes
contributions 31%
1%
Operating
Other taxes grants&
41% t -_it contributions
1%
Capital grants
&contributions Property taxes Ad
Flapit.
19% 9% IF
rants
Property taxes &
11% contributions
29%
GOVERNMENTAL ACTIVITIES —EXPENSES AND PROGRAM REVENUES
35.00
30.00
25.00
z 20.00
O_
J
J
15.00
10.00
5.00
o
,`ca�yQ
meta 0- otea o�
et
�a
■2017 Expenses ■2017 Revenue 2016 Expense ■2016 Revenue
Business-Type Activities. 91% of the increase in the City of Pasco's net position is related to
business-type activities. In 2017, the business type activities made up 40% of the City's net
18
Cityof Pasco, 'Washington 2017 Comprehensive .AnnualFinancial Report
position. This significant impact is due to recognition of the unfunded OPEB liabilities on the
City's financial statement for the first time as required by GASB 74. The net position for
business-type activities has stayed steady over the last year.
UTILITY ACTIVITIES —EXPENSES AND PROGRAM REVENUES COMPARISON
14.00
12.00
10.00
z
0
8.00
6.00
4.00
2.00
Water Sewer Process Water Stormwater Irrigation
Reuse
■2017 Expenses ■2017 Revenue 2016 Expense 2016 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 2017, the City of Pasco governmental funds reported combined ending fund
balances of$36,455, which is an increase of$1,363 from the prior year. Approximately 36% of
this total amount, $12,987 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 2017,unassigned
fund balance of the general fund was $13,118. As a measure of the general fund's liquidity, it
19
City of Pasco. "Washington 2017 Comprehensive AnnuaCginanciaCReport
may be useful to compare unrestricted, unassigned fund balance to total expenditures. This
represents 29% of total expenditures.
The fund balance of the City of Pasco's General Fund decreased by $1,064 during 2017, which
is 2.3% of current year revenues. Overall revenues increased by $3,045 (7%) and total
expenditures increased by $5,411 (13.6%). General fund tax revenues increased by $2,342
(7.5%). Property taxes increased approximately 2% due to new construction and steady
valuations, and sales taxes increased by 6%with the continued steady economic recovery.
The City was able to increase the number of approved personnel positions, by adding ten
positions. The General Fund revenues of $46,015 exceeded expenditures of $45,155 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 2017 was $32,777. 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 2017, the utility is well positioned as it has current assets of$34,875
available to meet its current liability obligations of$6,313,resulting in a working capital ratio of
5.5. The utility showed a gain before contributions and transfers of$759. This was more than
offset by $5,267 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 $991 in
expenses, and $1,272 in transfer out appropriations. Majority of the increase was for public
safety at the rate of$1,375.
Actual revenues and expenses both were 105% of the original budget. Revenues are generally
estimated low in order to protect the city from unanticipated funding fluctuations. The City also
started accruing Payroll, which resulted in approximately $1,500; this accrual was not planned
during 2017 budget process.
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, 2017 amounts to $411,320 (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
increase of $3,490 for governmental activities and an increase of $6,500 for business-type
20
City of Pasco, Washington 2017 Comprehensive AnnuaCginanciaCReport
activities. $10,833 and $3,439 in noncash capital contributions were made to governmental and
business-type activities, respectively, in 2017.
Major capital asset activity during the current fiscal year included the following:
• Capital spending in governmental funds for 2017 was $6,802: $268 for general
governmental purposes, $1,053 for public safety purposes, $4,152 for transportation
purposes and $1,352 for culture and recreation purposes. The largest projects for 2017
was $2,103 spending for the 20th Avenue Safety Improvement, and $996 for Police
Community Services Station.
• Capital spending in the utility fund (major component of business-activities) for 2017
was $10,206. The largest projects were Columbia Water Supply project at $6,559,
Butterfield WTP 24 Inch Valve Replacement at$478, and Capital Avenue Lift Station at
$399 in 2017.
Additional information on the City of Pasco's capital assets can be found in note 5 starting on
page 54 of this report.
City of Pasco's Capital Assets at Year-End(in millions)
(Net of Depreciation)
Governmental Activities Business-Type Activities Total Prinrary Government
2017 2016 2017 2016 2017 2016
Land $ 16.83 $ 15.37 $ 2.83 $ 2.73 $ 19.66 $ 18.10
Construction in process 12.72 16.28 10.31 9.09 23.03 25.37
Buildings and structures 31.52 23.95 34.00 34.31 65.52 58.26
Other improvements 3.16 3.24 0.20 0.06 3.36 3.30
Machinery and equipment 8.69 7.54 7.04 7.09 15.73 14.63
Infrastructure 154.10 157.15 129.92 124.52 284.02 281.67
Total capital assets $ 227.02 $ 223.53 $ 184.30 $ 177.80 $ 411.32 $ 401.33
Long-term Debt. At the end of 2017, the City of Pasco had total outstanding debt of $60.77
million. Of this amount, $9.66 million comprised debt backed by the full faith and credit of the
government. $51.09 million of the City of Pasco bonded debt represents bonds secured primarily
by specified revenue resources (e.g. revenue bonds). The city also has $0.02 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 52 of this report.
21
City of Pasco, 'Washington 2017 Comprehensive AnnuaCginanciaCReport
City ofPasco's Bonds and Notes
(in millions)
Governmental Acrivities Business-TeActivities TotalPrima Government
2017 2016 2017 2016 2017 2016
General Obligation Bonds $ 9.66 $ 10.43 $ 2.27 $ 3.38 $ 11.93 $ 13.81
Special AssessementBonds 0.02 0.05 0.02 0.05
Loans&Notes - 0.01 6.30 0.51 6.30 0.52
Revenue Bonds - 42.52 35.10 42.52 35.10
$ 9.68 $ 10.49 $ 51.09 $ 38.99 $ 60.77 $ 49.48
Economic Factors and Next Year's Budgets and Rates (amounts not in thousands)
In 2017, the Pasco economy was stable and continued to grow. The city issued 2,616 building
permits representing approximately$200 million in construction value. The number of permits
for the City increased by 8% in 2017, however, the construction value went down by 22%. This
discrepancy is due to permit for AutoZone facility in 2016. Of the total permits, 468 were for
new single-family residences, which equates to $119 million in construction value. The average
value of a new home in Pasco was approximately $254,000, in 2017. This stable economy was
reflected in Standard & Poor's rating the 2017 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 City has continued its annexation process as the City continues to grow. The
City annexed property assessed at $520,000 in 2017.
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. Since 2015,City has conducted comprehensive rate studies
for Water, Sewer, Stormwater, and Irrigation services and implemented necessary annual rate
increases. 2017's rate increases are 5% for water; 9% for sewer; 3% for irrigation; 15% for
Stormwater, and 3% for ambulance services.
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.
22
City of Pasco, -Washington 2017 Comprehensive AnnuaCTinanciaCReport
BASIC FINANCIAL STATEMENTS
23
City of Pasco, 'Washington 2017 Comprehensive AnnuaCginanciaCReport
Statement of Net Position
December 31,2017
Governmental Business-Type Corsptonent Una
Pasco Public
Activities Activities Total Facility District
ASSETS
Current assets:
Cash&cash equivalents $ 24,986,186 $ 11,993,618 $ 36,979,804 $ 57,407
Restricted cash:
Program,grant,donations 1,328,996 1,328,996
Customer deposits 465,895 2,505,136 2,971,031
Unspent bond proceeds - 10,126,907 10,126,907
Debt covenants 214,582 1,016,542 1,231,124
Investments 14,265,159 6,881,616 21,146,775
Receivables(ret of allowances):
Taxes 4,485,538 4,485,538 89,199
Customers 3,178,304 1,578,606 4,756,910
Grams 1,569,886 4,255,202 5,825,088
Due from Other fiords 1,560,000 1,560,000
Due from other govemments 100,000 100,000
1-fortes 236,790 236,790
Total current assets 52,154,546 38,594,417 90,748,963 146,606
Nonrnment assets:
Restricted cash 455,983 1,624,029 2,080,012
Restricted investments-DebtIIBNR/LSD 402,958 1,638,087 2,041,045
Special assessments 330,308 102,879 433,187
Net Pension Asset 8,519,268 8,519,268
Net OPEB Asset 1,410,992 1,410,992
Joan Ventures 55,777 55,777
Capital assets not being depreciated:
Lard 16,831,768 2,830,911 19,662,679
Construction work in progress 12,717,587 10,310,773 23,028,360
Capital assets net ofaccumrlated depreciation:
Buildings and structures 31,522,941 34,000,886 65,523,827
Other improvements 3,162,778 196,951 3,359,729
Machinery and equipment 8,691,024 7,043,103 15,734,127
Infrastructure, 154,090,363 129,923,990 284,014,353
Total noreutrent assets 238,191,747 187,671,609 425,863,356
Total assets 290,346,293 226,266,026 516,612,319 146,606
DEFERRED OUTFLOWS OF RESOURCES
Pension&OPEB related 1,950,865 431,607 2,382,472
LIABILITIES
Current liabilities:
Accounts payable 2,775,803 2,188,777 4,964,580 129,328
IBNR payable from restricted assets 1,687,670 1,687,670
Due to other firms 1,560,000 1,560,000
Deposits payable from restricted assets 343,993 358,052 702,045
Accrued interest payable from restricted assets - 203,454 203,454
Compensated absences-current 1,772,392 243,180 2,015,572
Loans due to other governments-current - 462,136 462,136
Bonds-current 805,000 2,887,599 3,692,599
Total current liabilities 8,944,858 6,343,198 15,288,056 129,328
Noncurrent liabilities:
Compensated absences 939,710 2,702 942,412
Net OPEB obligation 16,179,101 16,179,101
Notes payable - 5,838,203 5,838,203
Bonds payable(net ofpremnma) 9,151,960 43,872,441 53,024,401
Net pension obligation 6,634,394 2,499,875 9,134,269
Total noncurrent liabilities 32,905,165 52,213,221 85,118,386
Total liabRies 41,850,023 58,556,419 100,406,442 129,328
DEFERRED INFLOWS OF RESOURCES -
Pension&OPEB related 3,619,574 428,780 4,048,354
NET POSITION
Net investment in capital assets 217,059,501 141,373,142 358,432,643
Restricted for:
Cemetery(nonexpendable) 505,174 505,174
Program,grant,donatiore 44,284 44,284
Streets and boulevards 7,996,530 7,996,530
Litter and housing abatement 415,536 415,536
Park development 1,723,175 1,723,175
Culture and recreation (3,699) (3,699)
Capital improvement 6,979,994 6,979,994
Econorrtic development 63,572 63,572
Debt=payment/guarantee 371,214 371,214
Comrtited for:
Landhll 407,344 407,344
Special revenue fiords 4,407,873 4,407,873
Conshretionprojects 556,633 556,633
Unrestricted 6,300,430 26,339,292 32,639,722 17,278
Total Net Position $ 246,827,561 $ 167,712,434 $ 414,539,995 $ 17,278
The rotes to the financial statements are an integral part ofthis statement.
24
City of Pasco, 'Washington 2017 Comprehensive AnnuaCginanciaCReport
Statement of Activities
For the Year Ended December 31,2017
Net Revenue(Expenses)and Changes in Net Position
Program Revenues Primary Government
Charges for Operating Capital
Services,Fines& Grants and Grants and Governarental Business-Type Component Unit
Expenses Licenses Contributions Contributions Activities Activities Total Pasco Public
Functional Programs Facility District
Primary Government:
Govermnental activities:
Generalgovennnent $ 7,593,970 $ 4,759,008 $ - $ - $ (2,834,962) $ - $ (2,834,962) $ -
Public safety 30,660,677 8,524,778 532,283 - (21,603,616) - (21,603,616) -
Transportation 17,893,303 2,609,071 22,647 14,017,054 (1,244,531) - (1,244,531) -
Natural&economic enviromrent 6,893,606 6,095,653 457,673 162,924 (177,356) - (177,356) -
Culture and recreation 9,167,992 2,904,673 28,425 9,095 (6,225,799) - (6,225,799) -
Interestonlongtermdebt 438,309 (438,309) (438,309)
Total govenmrentalactivities 72,647,857 24,893,183 1,041,028 14,189,073 (32,524,573) (32,524,573)
Business-type activities:
Water 10,172,389 10,227,241 - 2,168,410 2,223,262 2,223,262 -
Irrigation 1,992,558 1,458,565 - 520,340 (13,653) (13,653) -
Sewer 8,986,586 8,809,264 - 2,207,326 2,030,004 2,030,004
Process Water Reuse 2,589,778 3,745,301 55,587 - 1,211,110 1,211,110 -
StormWater 1,302,643 1,575,287 12,958 371,451 657,053 657,053
Total business-type activities 25,043,954 25,815,658 68,545 5,267,527 6,107,776 6,107,776
Total primarygovermnent $97,691,811 $ 50,708,841 $ 1,109,573 $ 19,456,600 (32,524,573) 6,107,776 (26,416,797) -
Component units
Pasco Public Facility District
Total component units $ 533,926 $ 20,000 $ $ (513,926)
General Revenues:
Taxes:
Property taxes 7,963,302 7,963,302
Saks taxes 15,818,075 15,818,075 513,004
B&O taxes 10,512,227 10,512,227
Excise taxes 3,487,288 3,487,288
hrtergovennental 3,609,085 3,609,085
Investment income and misce➢aneous 485,195 208,934 694,129 329
Transfers (65,000) 65,000
Total general revenues and transfers 41,810,172 273,934 42,084,106 (593)
Change in net position 9,285,599 6,381,710 15,667,309 (593)
Netposition-beginning 246,185,564 161,330,724 407,516,288 17,871
Adjustments to Beginning Net Position (8,643,602) (8,643,602)
See Note 15)
Netposition-ending $246,827,561 $167,712,434 $ 414,539,995 $ 17,278
The notes to the financial statements are an integral part of this statement.
25
City of Pasco, 'Washington 2017 Comprehensive AnnuaC f'inanciaCReport
Balance Sheet
Governmental Funds
December 31,2017
Other
General Construction Governmental Total
ASSETS
Cash&cash equivalents $ 5,048,250 $ 5,402 $ 15,657,995 $ 20,711,647
Restricted cash
Program,grant,donation 44,284 - 44,284
Customer deposits 351,812 114,083 465,895
Cemetery endowement 455,983 455,983
Debt service 214,582 214,582
Investments 4,864,419 4,987,650 9,852,069
Receivables(net ofallowances):
Taxes 3,813,203 672,335 4,485,538
Customers 1,268,328 6 1,909,970 3,178,304
Inter&md loam 344,131 344,131
Grants 27,434 1,378,400 164,052 1,569,886
Special assessments&loans 330,308 330,308
Due from other fiords 1,560,000 1,560,000
Due from other governments 100,000 100,000
Total assets 16,977,730 1,383,808 24,951,089 43,312,627
LIABILITIES
Accounts payable 1,964,552 352,175 583,611 2,900,338
Interfnd loans payable 386,043 386,043
Due to other fiords 475,000 1,085,000 1,560,000
Deposits payable from restricted assets 234,697 109,296 343,993
Total liabilities 2,199,249 827,175 2,163,950 5,190,374
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue 1,209,086 458,085 1,667,171
FUND BALANCES(DEFICITS)
Nompendable
Cemetery permanent fund 505,174 505,174
Restricted
Program,grant,donation 44,284 44,284
Street and boulevard 7,996,530 7,996,530
Litter&housing abatement 415,536 415,536
Park development 1,723,175 1,723,175
Cultural and recreation (3,699) (3,699)
Capital improvements 6,979,994 6,979,994
Economic development 63,572 63,572
Debt repayment/guarantee - 371,214 371,214
Committed
Landfill cams 407,344 407,344
Special revenue funds 4,407,873 4,407,873
Construction projects 556,633 556,633
Unassigned 13,117,767 (130,315) 12,987,452
Total fiord balances 13,569,395 556,633 22,329,054 36,455,082
Total fiabilrties,deferred aflows of resources
and fund balances $ 16,977,730 $ 1,383,808 $ 24,951,089
Amounts reported for governmental activities in the statements ofmt position
are different because:
Long-term assets used in governmental activities are not financial resources and
therefore are not reported m the government funds. 231,194,823
Deferred pension outflows are not available to pay for current period expenditures and
therefore are not reported in the governmental fiords. 1,925,471
Long-tern liabilities are not due and payable in the current period and therefore
are not reported in the finds.Proceeds from new debt and repayments of exiski ng
debts are recorded as resources and expenditures for fund reporting but are additions
and reductions of liabilities for government wide reporting. (34,986,479)
Deferred inflows and proceeds from asset sales in governmental finds is susceptible to flu
accrual therefore are not reported in the Statement ofNet Activities.Other expenses are
susceptible to full accrual and are reported in the Statement ofNet Activities but not
in the governmental finds. (2,325,174)
Internal Service funds are aced by management to charge the costs of certain
activities to individual finds.The assets and liabilities of some internal service funds
are included in the governmental activities in the statement of net position hrterfund loans
between governmental activities we excluded. 14,563,838
Net position ofgovemmental activities(see page 24) $ 246,827,561
The notes to the financial statements are an integral part of this statement.
26
City of Pasco, 'Washington 2017 Comprehensive AnnuaCginanciaCReport
Statement of Revenues,Expenditures and Changes in Fund Balances
Governmental Funds
For the Year Ended December 31,2017
General Other
Fund Construction Governmental Total
REVENUES
Taxes $ 33,329,261 $ - $ 4,451,632 $ 37,780,893
Licenses and permits 2,177,235 398,420 2,575,655
Intergovernmental revenue 2,130,299 3,192,349 2,628,512 7,951,160
Charges for services 6,932,637 11,505,730 18,438,367
Fines and forfeitures 788,474 171,813 960,287
Miscellaneous revenue 657,342 62,134 2,072,256 2,791,732
Total revenues 46,015,248 3,254,483 21,228,363 70,498,094
EXPENDITURES
Current:
General government 8,775,433 63,141 - 8,838,574
Public safety 25,360,912 377,209 6,514,849 32,252,970
Transportation 1,786,262 87 2,662,527 4,448,876
Natural&economic environment 2,071,815 215,039 4,498,680 6,785,534
Culture and recreation 5,810,905 192,078 2,760,218 8,763,201
Capital outlay:
General government 97,239 170,951 - 268,190
Public safety 57,515 924,857 71,135 1,053,507
Transportation - 4,136,997 15,286 4,152,283
Natural&economic environment - (41,996) 18,597 (23,399)
Culture and recreation 11,416 1,340,210 - 1,351,626
Debt service:
Principal 781,930 25,000 806,930
Interest 401,176 37,133 438,309
Total expenditures 45,154,603 7,378,573 16,603,425 69,136,601
Excess of revenues over(under)expenditures 860,645 (4,124,090) 4,624,938 1,361,493
OTHER FINANCING SOURCES(USES)
Sale of assets - 66,693 66,693
Transfers in 638,000 4,455,223 1,373,163 6,466,386
Transfers out (2,402,717) (4,128,669) (6,531,386)
Total other financing sources(uses) (1,764,717) 4,455,223 (2,688,813) 1,693
Net change in fund balances (904,072) 331,133 1,936,125 1,363,186
Fund balances-begronuig(Adjusted- 14,473,467 225,500 20,392,929 35,091,896
See Note 15)
Fund balances-ending $ 13,569,395 $ 556,633 $ 22,329,054 $ 36,455,082
The notes to the financial statements are an integral part of this statement.
27
City of Pasco, 'Washington 2017 Comprehensive AnnuaCginanciaCReport
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 31,2017
Net change in fiord balances-total governmental funds $ 1,363,186
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. 2,355,750
The issuance of long-term debt(e.g.bonds,notes)provides current financial resources to
governmental fiords,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. 806,930
Revenues reported in the statement of activies that do not provide current financial resources
are not reported as revenues in the funds. 599,869
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, 714,941
are not reported as expenditures in the governmental fluids.
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 governmental fimds are eliminated in the Statement ofNet Activities. 3,444,923
Change in net position of governmental activities(see page 25) $ 9,285,599
The notes to the financial statements are an integral part of this statement.
28
City of Pasco, 'Washington 2017 Comprehensive AnnuaCginanciaCReport
Statement of Revenues,Expenditures, and Changes in Fund Balances-Budget to Actual
General Fund
For the Year Ended December 31,2017
Original Final Variance to
Budget Budget Actual Final Budget
REVENUES
Taxes $31,996,655 $ 32,596,655 $ 33,329,261 $ 732,606
Licenses and pernuts 1,921,964 2,121,964 2,177,235 55,271
Intergovernmental revenue 2,118,837 2,123,737 2,130,299 6,562
Charges for services 6,523,156 6,279,131 6,932,637 653,506
Fines and forfeitures 872,100 861,100 788,474 (72,626)
Miscellaneous revenue 498,760 509,260 657,342 148,082
Total revenues 43,931,472 44,491,847 46,015,248 1,523,401
EXPENDITURES
Current:
General government 8,885,624 8,653,358 8,775,433 122,075
Public safety 23,791,956 25,167,299 25,360,912 193,613
Transportation 1,845,649 1,545,369 1,786,262 240,893
Natural&economic environment 1,914,449 1,941,449 2,071,815 130,366
Culture and recreation 5,172,706 5,276,373 5,810,905 534,532
Capital outlay.
General government 76,600 114,089 97,239 (16,850)
Public safety 82,396 62,000 57,515 (4,485)
Culture and recreation - - 11,416 11,416
Debt service:
Principal 770,000 770,000 781,930 11,930
Interest 399,400 399,400 401,176 1,776
Total expenditures 42,938,780 43,929,337 45,154,603 1,225,266
Excess of revenues over(under)expenditures 992,692 562,510 860,645 2,748,667
OTHER FINANCING SOURCES(USES)
Transfers in 493,000 638,000 638,000 -
Transfers out (1,478,000) (2,750,000) (2,402,717) 347,283
Total other financing uses (985,000) (2,112,000) (1,764,717) 347,283
Net change in fiord balances 7,692 (1,549,490) (904,072) 3,095,950
Fund balances-beginning(adjusted see note
15) 13,038,450 14,633,214 14,473,467 (159,747)
Fund balances-ending $13,046,142 $ 13,083,724 $ 13,569,395 $ 2,936,203
Interfimd loan activity included for budget purposes but not
included in Statement of Revenues,Expenditures and Changes
in Fund Balance -
Fund balances-ending $ 13,569,395
The notes to the financial statements are an integral part of this statement.
29
City of Pasco, 'Washington 2017 Comprehensive AnnuaCginanciaCReport
Statement of Net Position
Proprietary Funds
December 31,2017
Water/Sewer Internal
Utility Service
ASSETS
Current assets:
Cash and cash equivalents $ 9,786,786 $ 6,481,371
Restricted cash equivalents:
Claims incuured but not reported(IBNR) 1,284,712
Customer deposits 2,505,136
Unspent bond proceeds 10,126,907
Revenue bond covenants 1,016,542
Investments 5,369,052 5,925,654
Receivables(net of allowances):
Customers 1,578,606 -
Grants 4,255,202
Inventory 236,790
Total current assets 34,875,021 13,691,737
Noncurrent assets:
Restricted cash-bond reserve 1,624,029 -
Restricted investments-bond covenants&IBNR 1,638,087 402,958
Special assessments 102,879 -
huterfund ban 14,567
Capital assets not being depreciated:
Land 2,830,911 -
Construction work in progress 10,310,773 1,274,589
Capital assets net of accumulated depreciation:
Bwldnngs and structures 34,000,886 -
Other huprovements 196,951 -
Machinery and equipment 5,571,342 6,081,185
Infrastructure 129,923,990
Total noncurrent assets 186,199,848 7,773,299
Total assets 221,074,869 21,465,036
DEFERRED OUTFLOWS
Pension related 431,607 25,394
LIABILITIES
Current liabilities:
Accounts payable 2,158,526 (94,284)
IBNR payable from restricted assests 1,687,670
Other liab>kws
Customer deposits payable from restricted assets 358,052
Accrued interest payable from restricted assets 203,454
Compensated absences-current portion 243,180 -
Loans due to other governments-current portion 462,136
Revenue bonds-current portion 2,887,599
Total current liabilities 6,312,947 1,593,386
Noncurrent liabilities:
Compensated absences 2,702 -
Loans due to other governments 5,838,203
Revenue bonds payable(net of premium) 43,872,441 -
Net pension obligation 2,499,875 147,074
Total noncurrent liabilities 52,213,221 147,074
Total liabilities 58,526,168 1,740,460
DEFERRED INFLOWS
Pension related 428,780 25,226
NET POSITION
Net investment in capital assets 129,774,474 7,355,774
Unrestricted 32,777,054 12,368,970
Total net position $ 162,551,528 $19,724,744
Adjustment for the net effect of the current year
activity between the internal service fiends and the
enterprise fiuid 5,160,906
Net position ofbusiness-type activities(see page 24) $ 167,712,434
The notes are an integral part of this statement.
30
City of Pasco, 'Washington 2017 Comprehensive AnnuaCginanciaCPeport
Statement of Revenues,Expenses, and Changes in Net Position
Proprietary Funds
For the Fiscal Year Ended 12/31/2017
Business Type
Water/Sewer Internal
Utility Service
OPERATING REVENUES
Pem>its $ 185,594 $ -
Charges for services 25,630,064 11,450,233
Total operating revenues 25,815,658 11,450,233
OPERATING EXPENSES
Depreciation 6,494,372 994,448
Salaries and wages 3,461,415 368,479
Personnel benefits 1,648,291 128,147
Supplies 1,839,791 883,871
Services 9,899,512 5,611,879
Total operating expenses 23,343,381 7,986,824
OPERATING INCOME 2,472,277 3,463,409
NONOPERATING REVENUES(EXPENSES)
Investment income 94,516 115,280
Investment gain(loss) 21,952 43,518
Miscellaneous 28,093 127,950
Rents and leases 64,373 -
Grant 68,545 -
Gain(Loss)on disposal ofproperty (362,047) (14,635)
Interest expense (1,629,125) -
Total nonoperatingrevenues(expenses) (1,713,693) 272,113
Income(loss)before contributions
and transfers 758,584 3,735,522
Capital contributions 5,267,527 -
Transfers in 65,000 -
Changes in net position 6,091,111 3,735,522
Net position-beginning 156,460,417 15,989,222
Net position-ending 162,551,528 $ 19,724,744
Changes in net position 6,091,111
Adjustment for the net effect the current year activity between
the internal service funds and the enterprise fund 290,599
Change in net position of business-type activities(page 25) $ 6,381,710
The notes to the financial statements are an integral part of this statement.
31
City of Pasco, 'Washington 2017 Comprehensive AnnuaCginanciaCReport
Statement of Cash Flows
Proprietary Funds
For the Fiscal Year Ended 12/31/2017
Water/Sewer Internal
Utility Service
CASH FLOW FROM OPERATING ACTIVITIES
Receipts from customers $ 26,293,338 $ 11,484,852
Payments to employees (5,044,867) (520,645)
Payments to suppliers (10,371,749) (6,707,189)
Net cash provided by(used far)operating activities 10,876,722 4,257,018
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
Operating grants 68,545 -
Miscellaneous 28,093 127,950
Rents and leases 64,373 -
Net cash provided from noncapital financial activities 161,011 127,950
CASH FLOW FROM CAPITAL AND RELATED FINANCING
ACTIVITIES
Proceeds from sale of assets - 56,799
Acquisition and construction of capital assets (10,194,258) (1,939,289)
Principal paid on capital debt (3,281,308)
Interest paid on capital debt (3,085,017)
Bond proceeds received 9,998,510
Payments received from notes and loans 6,005,655
Transfers in(out)for capital 65,000
Capital charges 1,827,575
Capital grant and contribution proceeds (4,244,265)
Net cash provided by(used for)capital and related financing activities (2,908,108) (1,882,490)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of investments 3,012,612 1,117,656
Purchase of investments (5,658,715) (1,039,399)
Interest on investments 116,468
Interfimd loan repayment 525,938
Net cash provided from investing activities (2,529,635) 604,195
Net increase(decrease)in cash and cash equivalents 5,599,990 3,106,673
Beguming cash and cash equivalents 19,459,410 4,659,410
Ending cash and cash equivalents 25,059,400 7,766,083
Reconciliation of operating income(loss)to net cash provided by
(used for)operating activities:
Net Operating Income 2,472,277 3,463,409
Adjustment to reconcile operating income(loss)to net cash provided by
(used for)operating activities:
Depreciation expense 6,494,372 994,448
(Increase)decrease in customer receivables 546,201 34,619
(Increase)decrease in inventories (40,023) -
Increase(decrease)in accounts payable 1,407,577 (211,439)
(Decrease)increase in accounts customer deposits payable (68,521)
(Decrease)increase in compensated absences 11,871
(Increase)decrease in pension deferred outflow 140,912 14,644
Increase(decrease)in pension obligation (437,950) (58,380)
Increase(decrease)in pension deferred inflow 350,006 19,717
Net cash provide by(Used for)Operating Activities $ 10,876,722 $ 4,257,018
NON CASH ACTIVITIES
Contributions of capital assets 3,439,952 -
Total noncash activities $ 3,439,952 $
The notes to the financial statements are an integral part of this statement.
32
Cit-V of Pasco, 'Washington 2017 Comprehensive AnnuaCginanciaCReport
Statement of Net Position
Fiduciary Funds
December 31, 2017
Pension and Other
Post-Employment
Benefits Agency
ASSETS
Cash&cash equivalents $ 475,322 $ 643,774
Receivables
Interfund Loan 27,346
Investments
Federal Agency 24,889
Mutual Funds 5,258,209
Total assets 5,785,766 643,774
LIABILITIES
Due to others - 643,774
Total liabilities - $ 643,774
NET POSITION
Held in trust for pension benefits/other
post employment benefits $ 5,785,766
The notes to the financial statements are an integral part of this statement.
Statement of Changes in Net Position
Fiduciary Funds
For the year ended December 31, 2017
Pension and Other
Post-Employment
Benefits
ADDITIONS
Taxes $ 63,504
Investment earnings
Interest 802,170
Dividends 89,802
Total Additions 955,476
DEDUCTIONS
Pension benefits 120,503
Medical premiums 94,835
Administrative expenses 59,921
Total deductions 275,259
Change in net position 680,217
Net position-beginning 5,105,549
Net position-ending $ 5,785,766
The notes to the financial statements are an integral part of this statement.
33
City of Pasco, 'Washington 2017 Comprehensive .AnnuaCTinancial Report
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 in 2002 pursuant to Chapter 3 5.5 7 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, all pension and other post-employment
benefits (OPEB) 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
or segment. Taxes and other items not properly included among program revenues are
reported instead as general revenues.
34
City of Pasco, 'Washington 2017 Comprehensive .AnnualFinancial Report
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 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 utilities 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
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.
35
City of Pasco, 'Washington 2017 Comprehensive .AnnuaCTinancial Report
• 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
expenses not meeting this definition are reported as non-operating revenues and
expenses.
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City of Pasco, "Washington 2017 Comprehensive .AnnuaCTinancial Report
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.
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
The City Street Fund exceeded budgeted appropriations at year end. This was due
primarily to the accrual of salary and benefits for a full payroll that had not been
budgeted.
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($130,315). 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 inter-fund loans which are recorded as a loan payable on the balance sheet.
Since 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.
The Golf Course Fund has a negative fund balance of$3,699 for year ending December
31, 2017. Following year end entries, staff discovered a disparity between the City year
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City of Pasco, -Washington 2017 Comprehensive .AnnuaCTinancial Report
end golf course revenues and the revenue reported by the management company that
operates the golf course. An in depth analysis of the fund determined staff had entered
sales of gift cards as revenue instead of a liability for deferred or unavailable revenue.
All entries were corrected, resulting in a negative fund balance for the fund.
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 tax and other state shared
revenues 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.
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, 2017 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 $11,007,266 of which $10,070,548 is not expected to be
collected(allowance for uncollectible accounts)and thus only the net amount of$936,718
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
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City of Pasco, -Washington 2017 Comprehensive Annual Financial Report
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.
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 $ 172,367
Unavailable Revenue—Municipal Court 936,719
Unavailable Revenue—Other 100,000
Unavailable Revenue—CDBG P&I Revenue 127,441
Unavailable Revenue--Cemetary 62,919
Unavailable Revenue—Golf Gift Certificates 64,857
Unavailable Revenue—Special Assessments/Loans 202,868
Total Unavailable Revenues 1 667 171
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 receivables 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.
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 9.2% of the outstanding ambulance transport service
revenue receivables at December 31, 2017.
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
future unbilled principal. Deferred assessments consist of unbilled special assessments
that are liens against the property benefitted. As of December 31, 2017, $6,694.39 of
delinquent assessments were outstanding in Governmental Funds and $7,128.83 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.
3. Amounts Due to and from Other Funds and Governments,Interfund Loans and
Advances Receivable
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City of Pasco, 'Washington 2017 Comprehensive Annual Financial Report
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
Inventories in governmental funds consist of expendable supplies held for consumption.
The cost is recorded as an expenditure at the time purchase. There are currently no
inventories in governmental funds. Inventories in proprietary funds are valued using a
last in first out(LIFO)method.
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 2017.
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City of Pasco. -Washington 2017 Comprehensive AnnuaCTinancial 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 NA
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 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 2017 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.
d. CDBG Loans Unbilled Principal.
e. Uncollected Municipal Court Fines outstanding.
f. Donations for police body cams that will be refunded if the department decides against
body cams.
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 at the government wide level in the Statement of Net Position.
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City of Pasco, -Washington 2017 Comprehensive Annual Financial Report
8. Compensated Absences
The City accrues accumulated unpaid vacation and sick leave and associated employee
related costs when earned (or estimated to be earned) by the employee. All vacation and
sick pay is accrued when incurred in the government-wide,proprietary,and fiduciary fund
financial statements. In governmental funds, such amounts are not accrued using the
modified accrual basis of accounting but are reported as a liability in the government-wide
financial statements.
Sick leave may be accumulated up to a maximum of 960 hours for all employees except
firefighters. Firefighter sick leave may be accumulated up to a maximum of 840 hours.
Upon resignation, retirement or death, sick leave is payable at a rate of 25% of accrued
hours up to a maximum accrual base of 720 hours. Vacation leave may be accumulated up
to a maximum of one and a half times the employee's annual vacation accrual rate and is
payable upon resignation, retirement or death.
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.
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City of Pasco, -Washington 2017 Comprehensive AnnuaCTinanciaCReport
11. Fund Balance and Fund Flow Policies
Fund balance of governmental funds is reported in various categories based on the nature
of any limitations requiring the use of resources for specific purposes. The government
itself can establish limitations on the use of resources through either a commitment
(committed fund balance) or an assignment(assigned fund balance).
The committed fund balance classification includes amounts that can be used only for
specific purposes determined by formal action of the government's highest level of
decision-making authority. The city council is the highest level of decision making
authority for the government that can, by adoption of an ordinance prior to the end of the
fiscal year, commit fund balance. Once adopted, the limitation imposed by the ordinance
remains in place until a similar action is taken (the adoption of another ordinance) to
remove or revise the limitation.
Amounts in the assigned fund balance classification are intended to be used by the
government for specific purposes but do not meet the criteria to be classified as
committed. The council may also assign fund 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.
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City of Pasco, -Washington 2017 Comprehensive .AnnuaCTinancial Report
Assigned fund balance — includes amounts intended to be used by the government for
specific purposes. Intent can be expressed by the governing body or by an official
designated by the governing body to which the governing body designates authority.
Unassigned fund balance - includes amounts that are available for any purpose.
NOTE 2: RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL
STATEMENTS
A. Explanation of certain differences between the governmental funds balance sheet
and the government-wide statement of net 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 $ 81,047
Land 15,373,198
Construction in process 16,282,190
Building 23,948,557
Other Improvements 3,236,788
Equipment 2,839,879
Infrastructure 157,147,154
Pension Assets 4,309,575
OPEB Assets 1,028,367
Current year change in pension asset 4,592,318
Current year spending in construction work in progress 6,531,019
Current year capital purchases 271,188
Current year capital donations received 10,833,800
Current year increase in Joint Venture (25,270)
Current year depreciation (15,254,987)
Net adjustment to add to government wide fund balance to arrive at
Net Position Governmental Activities $ 231,194,823
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City of Pasco, Washington 2017 Comprehensive .Annual Tinancial Report
Another element of that reconciliation explains that'Long-term liabilities are not due and
payable in the current period and are not reported in the funds." The following show the
detail of these liability changes.
Beginning Balance of Long-Term Liabilities Excluded from Fund Level:
Compensated absences (2,490,548)
OPEB obligation (16,078,996)
Pension obligation (8,313,665)
Bonds Payable (10,751,932)
Current Year changes to pension obligation 1,826,345
Current year principal payments reducing debt 822,317
Net adjustment to reduce government-wide fund balance to arrive at
Net Position Governmental Activities $ (34,986,479)
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 6,531,019
Machinery and equipment 271,188
Contributed capital assets 10,833,800
Current year depreciation (15,254,987)
Gain on Joint venture (25,270)
Net capital activity $ 2,355,750
The second element of that reconciliation related to debt activity as follows
New Debt issued $ -
Debt repayment (806,930)
Net debt activity $ (806,930)
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City of Pasco, 'Washington 2017 Comprehensive .AnnuaCTinancial Report
NOTE 3: DEPOSITS,INVESTMENTS AND RESTRICTED ASSETS
Deposits
As of December 31, 2017 the carrying amount of the City's cash balances was $55,966,004 which
consisted of$17,390,191 in the City's checking account at US Bank, $39,365,326 deposited in the
Local Government Investment Pool, deposits in transit of$349,734, $25,171 in cash drawers/petty
cash, less outstanding checks of$1,164,418. A portion, $1,176,503, of the deposits are maintained
for the benefit of the fiduciary funds the City supports.
Custodial Credit Risk
Custodial Credit Risk is the risk that in the event of a failure of the counterparty to an investment
transaction the City would not be able to recover the value of the investment or collateral securities.
The City's deposits are insured by the Federal Deposit Insurance Corporation (FDIC) or by
collateral held in a multiple financial institution collateral pool administered by the Washington
Public Deposit Protection Commission (WPDPC). The FDIC insures the first $250,000 of the
City's deposits. The deposit balances over $250,000 are insured by the WPDPC. State statute
permits additional amounts to be assessed on a pro rata basis to members of the WPDPC pool in
the unlikely event the pool's collateral should be insufficient to cover a loss.
Investments
Investments are stated at fair value based on quoted market prices in accordance with GASB
Statement No. 72, Fair Value Measurement and Application. Accordingly, the change in the fair-
value of investment is recognized as an increase or decrease to the investment assets and investment
income. Interest income on investments is recognized in non-operating revenue as earned. Changes
in fair value of investments are recognized on the statements of Revenues, Expenses, and Changes
in Net Position.
Interest Rate Risk
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. To achieve its financial objective
of maintaining liquidity to meet all operating requirements, the City typically selects investments
that have shorter average maturities.
Credit Risk
State law and the City investment policy limit investments to those authorized by State Statute.
The City of Pasco holds investments in U.S. Government Agency Securities, the Local
Government Investment Pool (LGIP) and demand deposits at U.S. Bank. The investment policy
for"credit risk"does not extend beyond the types of authorized investments and the concentration
of credit risk described below. As of December 31, 2017 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
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Cit-V of Pasco, -Washington 2017 Comprehensive .AnnuaCEtnancial Report
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. Government Agency 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.
Local Government Investment Pool
The Washington State Local Government Investment Pool(LGIP) operates in a manner consistent
with the SEC's Rule 2a-7 of the Investment Company act of 1940. The LGIP manages a portfolio
of securities that meet the maturity, quality, diversification, liquidity and market value calculation
requirements set forth by the Governmental Accounting Standards Board (GASB) for external
investment pools, that elect to measure, for financial reporting purposes, investments at amortized
cost. For GASB reporting purposes funds in the LGIP are reported as cash equivalents.
Investments Reported as Cash Equivalents as of December 31, 2017
Amortized Cost Less than 1 Year
Local Government Investment Pool $39,365,326.39 $39,365,326.39
In addition to the City of Pasco investments presented in the series of tables following this section,
the City's Old Fire Pension and Old Fire OPEB Funds report the following investments in their
Trust Funds:
Old Fire Pension Trust Fund Investments FMV 12/31/17 Interest Rate Maturity
Small Business Admn Participation SBAP $ 24,888.84 5.37% 10/1/2026
The Investment Co. of America Mutual Funds 2,271,878.28 *Varies N/A
Total $ 2,296,767.12
*YTD Return 19.74%
Old Fire OPEB Trust Fund Investments FMV 12/31/17 Interest Rate Maturity
WAMU Investors Fund A Mutual Funds 2,986,331.15 *Varies N/A
Total $ 2,986,331.15
*YTD Return 20.19%
Investments Measured at Fair Value
The City measures and reports investments at fair value using the valuation input hierarchy
established by Generally Accepted Accounting Principles (GAAP), as follows:
Level 1: Prices quoted in active markets for identical securities,
Level 2: Quoted market prices for similar assets or liabilities, quoted prices for identical or similar
assets or liabilities in markets that are not active, or other than quoted prices that are not
observable.
Level 3: Unobservable inputs for an asset or liability.
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Cit-V of Pasco, -Washington 2017 Comprehensive .Annual Tinancial Report
Safekeeping for the City's investments is provided by U.S. Bank. U.S. Bank contracts with
Independent Directors Council (IDC) to provide fair market values of investments on a monthly
basis. The pricing methodology varies depending on multiple components, including if an
investment is being actively traded. In depth pricing methodology is available from IDC.
As of December 31, 2017, the City had the following investments measured at fair value:
Fair Value Measurement Using
Quoted Prices Significant
Active Markets Other Significant
for Identical Observable Unobservable
Assets Inputs Inputs
I nvestment Type (Level l) (Level 2) (Level 3) Total
U.S. Government Agency Securities $ - $ 23,187,820 $ - $ 23,187,820
The table below identifies the types of investments,concentration of investments in any one issuer,
and maturities of the City's investment portfolio as of December 31, 2017. The City's investments
are all government agency issues and not subject to the 20%maximum.
Maturities
Less than 1 %of Total
Investment Type Fair Value year 1 to 5 years Portfolio
SBA Participation $ 125,937 $ - $ 125,937 0.54%
Federal Farm Credit Bank 5,954,807 2,985,113 2,969,694 25.68%
Federal Home Loan Bank 1,994,321 998,563 995,758 8.60%
Federal Home Loan Mtg.Corporation 2,738,456 2,738,456 - 11.81%
FICO Strips 4,295,221 2,300,795 1,994,426 18.52%
Federal National Mortgage Association 1,980,628 - 1,980,628 8.54%
Resolution Funding Corporation 2,058,455 - 2,058,455 8.88%
Resolution Funding Corporation-Strips 4,039,995 - 4,039,995 17.42%
Total Investments $ 23,187,820 $ 9,022,927 $ 14,164,893 100.00%
38.91% 61.09% 100.00%
The following table depicts Weighted Average Maturity(WAM) for all City investments with
maturities,by number of months.
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City of Pasco, 'Washington 2017 Comprehensive AnnuaCginanciaCPeport
Calculation of Weighted Average Maturity (WAM)
A B C D =B*D
Fair Market
#of Months to Value as
Maturity Date Maturity 12/31/17 %of total WAM
02/01/2027 110 125,937 0.54% 0.597429
06/08/2018 6.0 998,563 4.31% 0.258385
07/05/2018 7.0 1,991,128 8.59% 0.601087
07/27/2018 7.0 2,738,456 11.81% 0.826692
09/14/2018 9.0 993,985 4.29% 0.385800
12/27/2018 12.0 2,300,795 9.92% 1.190692
03/08/2019 14.0 995,758 4.29% 0.601204
06/13/2019 18.0 1,980,628 8.54% 1.537501
09/26/2019 21.0 1,994,426 8.60% 1.806247
10/15/2019 22.0 2,058,455 8.88% 1.953009
07/15/2020 31.0 2,035,390 8.78% 2.721131
10/15/2020 34.0 2,004,605 8.65% 2.939326
12/06/2021 48.0 2,969,694 12.81% 6.147422
26.1 $ 23,187,820 100.00% 21.565925
Restricted assets.The corpus of permanent funds is included in restricted assets. The Water/Sewer
utility issued bond proceeds prior to 2018 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 comprised of the following:
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City of Pasco, 'Washington 2017 Comprehensive AnnuaCg'inanciaCReport
Temporary Permanent
Restrictions Restrictions
My t4ew Cemetary Endowment $ - $ 455,953
Progorum,Donations, Cfuims
Recreation Donations 14,649
Drug Forfeit, Evidence, Federal Share 29,634
Claims incurred but not reported(IBNR) 1,284,712
Custamer Deposits
Governmental Funds Customer Deposits 465,895
Water/Sewer Customer Deposits 2,505,136
Unspen t Send Pruceeds
Water/Sewer Unspent Bond Proceeds 10,126,907
Debt Cmwrenunts
Water/Sewer Debt Service Account 1,016,542
Water/Sewer Debt Reserve Account 1,624,029
LID Guarantee 100,000
LID Bonds & Loans 114,582
Restricted Investments
Water/Sewer Debt Convenants 1,638,087
Incurrd But Not Reported Claims (IBNR) 402,958
Total Restricted Cash and Investments $19,323,131 $ 455,983
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
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City of Pasco, Washington 2017 Comprehensive .AnnualFinancial Report
county received through December 31, 2017. Delinquent taxes totaled $172,367 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 2017 was $1.8802 per $1,000 on an assessed valuation of
$4,227,977,752. This resulted in a total regular levy of$7,949,354 for 2017. The City did not levy
any taxes for special levies in 2017.
NOTE 5: CAPITAL ASSETS AND CWIP
Capital asset activity for the year ended December 31, 2017 was as follows:
Beginning Begimmg
Balance Prior Period Balance Current Period Current Period Ending Balance
Governmental Activities: 01/01/17 Adjustments 01/01/17 Increases Decreases 12/31/17
Capital assets,not being depreciated
Land $ 15,373,198 $ - $ 15,373,198 $ 1,525,263 $ 66,693 $ 16,831,768
Construction in progress 16,282,189 123,740 16,405,929 8,310,457 11,998,799 12,717,587
Total capital assets,not being depreciated 31,655,387 123,740 31,779,127 9,835,720 12,065,492 29,549,355
Capital assets,being depreciated:
Building&structure 40,218,765 - 40,218,765 8,463,526 95,314 48,586,977
Other improvements 9,792,764 9,792,764 234,287 13,356 10,013,695
Machinery and equipment 15,499,514 15,499,514 2,319,802 112,926 17,706,390
Infrastructure 252,191,102 (123,740) 252,067,362 10,699,635 44,727 262,722,270
Total capital assets being depreciated 317,702,145 (123,740) 317,578,405 21,717,250 266,323 339,029,332
Less accumulated depreciation:
Building&structure 16,270,207 16,270,207 885,288 91,459 17,064,036
Other improvements 6,555,978 6,555,978 307,276 12,337 6,850,917
Machinery and equipment 7,955,673 7,955,673 1,155,470 95,777 9,015,366
Infrastructure 95,043,948 95,043,948 13,627,958 39,999 108,631,907
Total accumulated depreciation 125,825,806 125,825,806 15,975,992 239,572 141,562,226
Total capital assets,being depreciated,net 191,876,339 (123,740) 191,752,599 5,741,258 26,751 197,467,106
Governmental activities capital assets net $ 223,531,726 $ - $223,531,726 $ 15,576,978 $12,092,243 $227,016,461
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City of Pasco, -Washington 2017 Comprehensive AnnuaCEtnancial Report
Beginning Beginning
Balance Prior Period Balance Current Period Current Period Ending Balance
Business Type Activities: 01/01/17 Adj 01/01/17 Increases Decreases 12/31/17
Capital assets,not being depreciated
Land $ 2,725,435 $ $ 2,725,435 $ 105,476 $ - $ 2,830,911
Construction in process 9,086,415 9,086,415 9,951,716 8,727,358 10,310,773
Total capital assets,not being depreciated 11,811,850 11,811,850 10,057,192 8,727,358 13,141,684
Capital assets,being depreciated:
Building&structure 77,252,880 77,252,880 2,042,246 70,465 79,224,661
Other Improvements 56,947 56,947 141,143 - 198,090
Machinery and equipment 11,924,161 11,924,161 936,229 48,632 12,811,758
Infrastructure 166,255,777 166,255,777 9,751,375 1,585,954 174,421,198
Total capital assets being depreciated 255,489,765 255,489,765 12,870,993 1,705,051 266,655,707
Less accumrilated depreciation:
Building&structure 42,946,722 42,946,722 2,342,178 65,125 45,223,775
Other Improvements - - 1,139 - 1,139
Machinery and equipment 4,835,115 4,835,115 963,216 29,676 5,768,655
Infrastructure 41,731,134 41,731,134 3,461,284 695,210 44,497,208
Total accumulated depreciation 89,512,971 89,512,971 6,767,817 790,011 95,490,777
Total capital assets,being depreciated,net 165,976,794 165,976,794 6,103,176 915,040 171,164,930
Business activities capital assets net $ 177,788,644 $ $177,788,644 $ 16,160,368 $ 9,642,398 $184,306,614
Depreciation expense by function:
Governmental activities:
General government $ 407,012
Public Safety 582,238
Transportation 13,745,303
Economic environment 198,981
Culture&recreation 1,042,458
Total depreciation expense-governmental activities $ 15,975,992
Business-type activities:
Water $ 2,742,439
Irrigation 562,407
Sewer 2,813,594
Process water reuse facility 451,281
Stormwater 198,096
Total depreciation expense-business-type activities: $ 6,767,817
Construction commitments
The City of Pasco has active construction projects as of December 31, 2017. The projects include
street construction and various utility related projects. At year end, the city's commitments with
contractors are as follows:
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City of Pasco, 'Washington 2017 Comprehensive AnnuaCginanciaCPeport
CATEGORY PROJECT NAME SPENT TO REMAINING
DATE COMMITMENT
Sewer Pearl Street Lift Station $ 16,824 $ 212,311
Street Argent Road Widening 271,513 136,142
Street Oregon Ave Corridor 860,311 6,972,772
Street Road 68 Interchange 134,269 176,280
Street Overlay 2017Trail Rehabilitation 74,539 186,625
Water Columbia Water Supply 7,503,293 3,394,965
Water Butterfield PLC Upgrade 23,687 466,891
Economic Process Water
Development Resource Facility Plan 180,960 726,984
Process Water Irrigation Pump
Resource Facility Station Building 11,936 150,704
TOTAL $ 9,077,332 $ 12,423,674
NOTE 6: INTERFUND BALANCES AND TRANSFERS
Inter-fund loans
The composition of inter-fund loan balances as of December 31, 2017 are presented in the
following table. These loans are included in the Fund Financial Statements but eliminated from the
Government Wide Statement of Net Assets because they are internal borrowings. There are also
one day loans totaling $1,560,000, for funds with negative cash at year end that are classified as
Due To and Due From transactions in the Government Wide and Fund Financial Statements.
0
INTERFUND LOANS DUE FROM
Q Nonmajor Special Nonmajor Debt
oLoan Purpose Revenue Service Total
a Nonmajor Special Revenue Parking Lot Repa 123,483 - 123,483
Nonmajor Special Revenue LID Financing - 220,647 220,647
Nonmajor Internal Service LID Financing - 14,567 14,567
Nonmajor Fiduciary LID Financing - 27,346 27,346
Total $ 123,483 $ 262,560 $ 386,043
Interfund transfers
Transfers between funds during the year ended December 31, 2017 are as follows:
TRANSFER FROM
General Nonmajor Special Nonmajor Debt
Revenue JL Service
C) General $ - $ 338,000 $ 300,000 $ 638,000
tea' Nonmajor Special Revenue 1,313,000 60,163 - 1,373,163
w Nonmajor Debt Service - - - -
Z Major Construction 1,024,716 3,430,506 - 4,455,222
Major Utility 65,000 - - 65,000
Total $ 2,402,716 $ 3,828,669 $ 300,000 1 $ 6,531,385
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Cit-V of Pasco, -Washington 2017 Comprehensive .AnnuaCTinancial Report
Transfers are used to 1) move unrestricted general fund revenues to finance various programs that
the government must account for in other funds in accordance with budgetary authorizations,
including amounts provided as subsidies or matching funds for various grant programs; 2) move
investment earnings or operating subsidies from one fund to its designated, authorized purpose
carried out by another fund; 3) move resources designated for construction to and from
construction funds as projects are created and/or completed.
There were one time transfers for the purpose of construction between several special revenue
funds, the general fund and the construction funds. There were on-going transfers to move grant
support from the Community Development Block Grant fund to the general fund for qualified
grant activities; from earnings 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
Changes in long-term liabilities -governmental. The City liquidates most governmental debt
service from the General Fund while compensated absences are generally liquidated from General,
Street and Ambulance funds. The average percentage of usage of compensated absences varies
significantly between governmental and business type funds, therefore the City uses the most
current year usage amounts for projecting compensated absences due within one year. This method
is the most accurate by following the current trend for of each type of funds. Internal service funds
predominantly serve the governmental funds and their long-term liabilities are included as part of
the totals for governmental activities. In 2017 liabilities for Internal Service Funds included with
Governmental activities was $147,074.
The table below reflects the change in Long-Term Liabilities for Governmental activities for year
ended December 31, 2017.
Beginn ng Balance Ending Balance Due Within One
GOVE.RNMENTALACTIVITIES 01/01/2017 Additions Reductions 12/31/17 Year
General Obligation Bonds $ 10,430,000 $ $ (770,000) $ 9,660,000 $ 795,000
Prenma s 292,347 (15,387) 276,960 15,387
Total GO Bonds Payable 10,722,347 (785,387) 9,936,960 810,387
Special Assesstnent Bond 45,000 (25,000) 20,000 10,000
ExtemalLoanst 11,930 (11,930) - -
CompensatedAbsences 2,490,548 1,993,946 (1,772,392) 2,712,102 1,772,392
OPEB Obligations' 4,086,203 12,092,898 - 16,179,101 -
Pension Obligations 8,519,119 - (1,884,725) 6,634,394 -
Governrnental Activity Long-Term Activity $ 25,875,147 $ 14,086,844 $ (4,479,434) $ 35,482,557 $ 2,592,779
'The Airport Loan was reconciled with the Port of Pasco and paid in full.
'The City implemented GASB 75 in 2017,requiring the City to report the total accrued actuarial OPEB liability instead of the cumulative underfunding.
Changes in long-term liabilities — business type. All business type funds liquidate their own
compensated absences,judgements, and claims.
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City of Pasco, Washington 2017 Comprehensive .AnnuaCEtnancial Report
The table below reflects the change in Long-Term Liabilities for Business Type activities for year
ended December 31, 2017.
Beginning Ending Balance Due Within One
BUSINESS TYPE ACTIVITIES Balance Additions Reductions 12/31/17 Year
Revenue Bonds $ 35,055,000 $ 9,415,000 $ (1,955,000) $42,515,000 $ 1,760,000
LTGO Bonds 3,383,003 - (1,112,418) 2,270,585 1,127,599
Premiums 1,489,145 583,510 (98,200) 1,974,455 123,486
Total Bonds Payable 39,927,148 9,998,510 (3,165,618) 46,760,040 3,011,085
State Loans' 508,443 6,005,656 (213,759) 6,300,340 462,136
Compensated Absences 234,011 255,051 (243,180) 245,882 243,180
Pension Obligations 2,937,825 (437,950) 2,499,875 -
Business Activity Long-Term Activity 43,607,427 16,259,217 (4,060,507) 55,806,137 3,716,401
Total Changes in Business Type&
Governmental Long-Term Liabilities $ 69,482,574 $30,346,061 $ (8,539,941) $91,288,694 $ 6,309,180
3The City recognized loan draws from the State Revolving Fund totaling$6,005,656 in 2017.
NOTE 8: LONG TERM DEBT
The city issues general obligation bonds to finance capital improvements such as street projects,
softball fields, library improvements, police station and other municipal facilities. 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. Governmental debt is considered obligations of the general government
and is repaid with general governmental resources. Proprietary fund revenues are used to repay
revenue and refunding bonds as well as certain loans to proprietary funds. Bonded indebtedness
has also been entered into to advance refund general obligation and revenue bonds.
Governmental Debt
The City's outstanding general obligation bonds are comprised of 2011 refunding bonds and a
2015 bond issue that funded the construction of a new police station. A Public Safety Sales tax of
three-tenths of one percent, implemented in 2012 was identified as the source of repayment of the
bonds. These issues are repaid from the General Fund.
General obligation bonds outstanding as of December 31, 2017 are as follows:
GOVERNMENTAL DEBT-BONDS
Outstanding as of Due Within 1
Purpose Issuance Amount Final Maturity Interest Rates December 31,2017 Year
2011 LTGO Refunding 2001 LTGO $ 4,110,000 12/1/2020 3.00%-4.00% $ 1,480,000 475,000
2015 LTGO Police Station 8,795,000 12/1/2035 3.00%-4.00% 8,180,000 320,000
2010 LID 145 Financing 785,129 11/15/2020 2.25%-5.00% 20,000 10,000
Total Governmental Debt $ 9,680,000 $ 805,000
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City of Pasco, -Washington 2017 Comprehensive .AnnuaCEtnancial Report
For presentation purposes,the remaining LID 145 Bonds ($20,000)are being included in the table
for general obligation debt because the LID is accounted for in a Governmental Fund(Debt Service
Fund).
Special Assessment Debt
As of December 31, 2017, LID 145 has $20,000 in bonds outstanding and $14,155 available for
debt service, with assessments of$20,881 due in 2018. The LID Guarantee Fund ended the year
with a balance of$336,178.
The annual debt service requirements to maturity for general obligation bonds and LID Bonds is
presented in the following table.
GOVERNMENTAL DEBT
Year Ending
December 31 Principal Interest Total Debt Service
2018 $ 805,000 $ 372,700 $ 1,177,700
2019 840,000 340,400 1,180,400
2020 860,000 306,700 1,166,700
2021 360,000 272,300 632,300
2022 375,000 257,900 632,900
2023-2027 2,115,000 1,051,900 3,166,900
2028-2032 2,555,000 612,988 3,167,988
2033-2035 1,770,000 134,250 1,904,250
TOTAL $ 9,680,000 $ 3,349,138 $ 13,029,138
Business Type Debt
In 2017 the City's Water/Sewer utility issued $9.4 million in improvement revenue bonds to
provide funding and reimbursement for multiple sewer capital projects. The projects include
upgrades and replacement of several sewer lift stations,treatment plant upgrades,relining projects
and certain immediate needs projects identified by staff and consultants. These bonds will be
repaid from revenues from the Water/Sewer utility. The City is also liable for two state loans; 1)
Public Works trust fund loan secured for the Riverview Trunk Sewer Intercept project that will be
satisfied in 2020, and 2) Drinking Water Loan for the Columbia Water Supply Project, which is
still in the construction phase with final draws expected in 2018.
As of December 31, 2017, restricted cash and investments in the proprietary funds contain
$4,278,658 in sinking funds and reserves as required by bond indentures.
Revenue Bonds, General Obligation Bonds and Loans outstanding for Business Type Accounts
are as follows:
56
City of Pasco, WashjMton 2017 Comprehensive AnnuaCTinancial Peport
BUSINESS TYPE DEBT-BONDS
Outstanding as of Due Within 1
Purpose Issuance Amount Final Maturity Interest Rates December 31,2017 Year
2009 Water/Sewer Capital Projects $ 10,045,000 05/01/2029 1.35%-4.75% $ 6,485,000 $ 475,000
2010A Refunding Water/Sewer 9,070,000 06/01/2029 3.00%-5.00% 4,480,000 295,000
2010T Refimding&Capital-Reuse 1,240,000 06/01/2018 4.62% 180,000 180,000
2013A Sewer Capital Projects 2,520,000 12/01/2028 3.00%-4.00% 2,120,000 100,000
2013T Capital Projects Reuse Facility 7,235,000 12/01/2028 .69%-4.89% 5,925,000 445,000
2015 Water/Sewer Capital Projects 14,380,000 12/01/2040 2.00%-5.00% 13,910,000 265,000
2017 Sewer Improvement Revenue Bonds 9,415,000 12/01/2042 3.30%-4.00% 9,415,000 -
2016 Sewer Refiulding LTGO Bond-pay SRF Lo; 3,959,939 07/01/2019 1.36% 2,270,585 1,127,599
$ 44,785,585 $ 2,887,599
BUSINESS TYPE DEBT-LOANS
Outstanding as of Due Within 1
Purpose Issuance Amount Final Maturity Interest Rates December 31,2017 Year
PW00-691-043 Riverview Trunk Sewer Intercept $ 1,890,000 06/30/2020 0.50% $ 333,421 $ 111,141
DM15-952-037 Colunbia Water Supply Project* 6,810,430 10/01/2034 1.50% 5,966,919 350,995
$ 6,300,340 $ 462,136
Total Business Type Debt $ 51,085,925 $ 3,349,735
*The Columbia Water Supply Project Loan is approved for$6,810,430 and has recorded draws of$6,005,656 through December 31,2017.
The debt service requirements to maturity for all Business Type debt is as follows:
BUSINESS TYPE DEBT
Year Ending
December 31 Principal Interest Total Debt Service
2018 $ 3,242,740 $ 1,904,285 $ 5,147,025
2019 3,656,810 1,842,601 5,499,411
2020 2,583,822 1,747,874 4,331,696
2021 2,492,682 1,659,855 4,152,537
2022 2,192,682 1,566,204 3,758,886
2023-2027 11,283,412 6,503,086 17,786,498
2028-2032 8,548,412 4,422,066 12,970,478
2033-2037 8,015,365 2,823,071 10,838,436
2038-2042 9,070,000 1,036,825 10,106,825
TOTAL $ 51,085,925 $ 23,505,867 $ 74,591,792
For financial statement presentation the City's non-current portion of bonds payable are presented
net of premium while current bonds payable reflect actual principal payments due within one year.
The following table illustrates the breakdown by fund for current and non-current bonds payable
and the effect of premium on balances. Balances shown are as of December 31, 2017.
Business Type Bonds Water Sewer Reuse Sub Total Governmental Total
Current Bonds Payable $ 777,500 $ 1,485,099 $ 625,000 $ 2,887,599 $ 805,000 $ 3,692,599
Non Current-Bonds Payable 15,627,200 20,790,786 5,480,000 41,897,986 $ 8,875,000 50,772,986
Bond Premium 789,506 1,184,949 1,974,455 276,960 2,251,415
Total Non Current Bonds Payable Net of Premium 16,416,706 21,975,735 5,480,000 43,872,441 9,151,960 53,024,401
Total Bonds Payableat 12/31/17 $ 17,194,206 $ 23,460,834 $ 6,105,000 $ 46,760,040 $ 9,956,960 $ 56,717,000
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City of Pasco, 'Washington 2017 Comprehensive .AnnualFinancial Report
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 were not included in the
City's financial statements. In 2017 the remaining $315,000 of outstanding defeased debt of the
City was redeemed.
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
2018 497,465
2019 401,457
2020 247,348
2021 199,651
2022 58,872
Total $ 1,404,794
NOTE 9: 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 39.34 RCW (Interlocal Cooperation
Act), nine cities originally formed WCIA on January 1, 1981. WCIA was created for the purpose
of providing a pooling mechanism for jointly purchasing insurance,jointly self-insuring, and/ or
jointly contracting for risk management services. WCIA has a total of 161 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 $21 million
in limits above the self-insured layer is provided by reinsurance. Total limits are $25 million per
occurrence subject to aggregates and sublimity. The Board of Directors determines the limits and
terms of coverage annually. Although WCIA offers property and other physical damage coverage,
the City of Pasco purchases only the Liability coverage through WCIA.
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City of Pasco, -Washington 2017 Comprehensive .AnnuaCTinancial Report
Insurance for property, fidelity, inland marine, and boiler and machinery coverage are purchased
through Conover Insurance and various deductibles apply by type of coverage.
WCIA In-house services include risk management consultation, loss control field services, and
claims and litigation administration. WCIA contracts for certain claims investigations,consultants
for personnel and land use issues, insurance brokerage, actuarial, and lobbyist services.
WCIA is fully funded by its members, who make annual assessments on a prospectively rated
basis, as determined by an outside, independent actuary. The assessment covers loss, loss
adjustment, reinsurance and other administrative expenses. As outlined in the interlocal, WCIA
retains the right to additionally assess the membership for any funding shortfall.
An investment committee, using investment brokers, produces additional revenue by investment
of WCIA's assets in financial instruments which comply with all State guidelines.
A Board of Directors governs WCIA, which is comprised of one designated representative from
each member. The Board elects an Executive Committee and appoints a Treasurer to provide
general policy direction for the organization. The WCIA Executive Director reports to the
Executive Committee and is responsible for conducting the day to day operations of WCIA.
The City is self-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:
2015 1 2016 1 2017
$ 4,627,663 1 $ 4,858,665 1 $ 4,463,350
NOTE 10: 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 established to assist the participating police and sheriffs departments in the
deterrence and solution of criminal incidents. BI-PIN 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 based upon the
approved budget for that year and billed quarterly in advance to each agency. On dissolution of the
Interlocal Agreement,the net position shared based upon participant contribution.
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City of Pasco, Washington 2017 Comprehensive AnnuaCTinancial Report
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.
The City of Pasco's equity interest in BI-PIN was $33,923 on December 31,2017,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 obtained at the City of Kennewick, 210 W. 6th
Ave.,Kennewick,Washington,99336.
B. Metro Drug Forfeiture Fund
The Metropolitan Controlled Substance Enforcement Group(Metro)established prior to 1987,when
Interlocal Agreement entered into by six participating municipal corporations, the cities of
Kennewick, Pasco, Richland, and West Richland, and Benton and Franklin Counties. Metro
established to account for the proceeds of forfeitures,federal grants,and court ordered contributions,
and to facilitate the disbursement of those proceeds for the purpose of drug enforcement and
investigations. Metro served by an Executive Committee composed of the City Manager or designee
of each of the cities and a member from each of the Boards of County Commissioners of Benton and
Franklin Counties. In addition,a Governing Board consisting of the Chiefs of Police from the cities
and the Sheriffs from the counties administers daily activity.
Effective July 1,2009,the City of Kennewick assumed responsibility for the operation of Metro.As
the Operating Jurisdiction,Kennewick provides accounting services for the operation of Metro.
The City of Pasco's equity interest in Metro was $21,854 on June 30, 2017, which 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 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 2017 Comprehensive AnnuaCT nanciaCReport
NOTE 11: 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.
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.
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City of Pasco, -Washington 2017 Comprehensive Annual Financial Report
In 2017, the City expended $118,691 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 2017, the City of Pasco paid Franklin County $122,003 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, 2017,
the TRAC Fund had a fund balance of$415,322.
Complete financial statements for TRAC may be obtained from Franklin County, 1016 N. 4"
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.
In 2015, the City and the Authority entered into an agreement which established 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.
NOTE 12: JOINTLY GOVERNED ORGANIZATIONS:
Tri-Cities Regional Public Facilities District
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City of Pasco, -Washington 2017 Comprehensive AnnuaCTinanciaCReport
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.
The board is comprised of the members of the Benton-Franklin Council of Governments plus nine
representatives from the private sector.
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City of Pasco, Washington 2017 Comprehensive AnnuaCTinancial Report
NOTE 13: 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 2017.
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.
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
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City of Pasco, Washington 2017 Comprehensive Annualginancial Report
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 2017 were as follows:
PERS Plan 1
Actual Contribution Rates Employer Employee*
PERS Plan 1 12.52% 6.00%
Administrative Fee 0.18%
Total 12.70% 6.00%
For the year ended December 31,2017,The city's contributions to PERS Plan 1 was$4,077 which
includes the 0.18% Administrative Fee. For the purpose of calculating GASB 68 liability on the
PERS Plan 1, contributions include $610,152 for the UAAL component of the plan, which is
calculated and paid on PERS 2/3 wages.
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
• 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
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City of Pasco, Washington 2017 Comprehensive Annual Financial Report
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 2017 were as follows:
PERS Plan 2/3
Actual Contribution Rates Employer 2/3 Employee 2*
PERS Plan 2/3 12.52% 7.38%
Employee PERS Plan 3 Varies
Administrative Fee 0.18%
Total 12.70%1 7.38%
* For employees participating in JBM, the City's contribution rate was 13.68%
For the year ended December 31, 2017 the city's actual PERS Plan 2/3 contributions were
$1,482,728. This amount includes Administrative Fees and$610,152 for PERS Plan 1 UAAL.
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
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City of Pasco, -Washington 2017 Comprehensive AnnuaCTinancial Report
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 I had no required employer or employee
contributions for fiscal year 2017. 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
adopted by the LEOFF Plan 2 Retirement Board. The LEOFF Plan 2 required contribution rates
(expressed as a percentage of covered payroll) for 2017 were as follows:
LEOFF Plan 2
Actual Contribution Rates Employer Employee
State and Local Governments 5.25% 8.75%
Adn*iistrative Fee 0.18%
Total 5.43% 8.75%
The city's contributions to the plan were $763,912 for the year ended December 31, 2017, which
includes 0.18% in Administrative Fees.
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City of Pasco, Washington 2017 Comprehensive AnnuaCTinancial Report
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, 2017, the state contributed
$62,155,262 to LEOFF Plan 2. The amount recognized by the City as its proportionate share of
this amount is $438,297.
Actuarial Assumptions
The total pension liability(TPL) for each of the DRS plans was determined using the most recent
actuarial valuation completed in 2017 with a valuation date of June 30,2016. Besides the discount
rate, the actuarial assumptions used in the valuation are summarized in the Actuarial Section of
DRS' Comprehensive Annual Financial Report located on the DRA employer-resource GASB
webpage. The assumptions reflect the results of OSA's 2007-2012 Experience Study and the 2015
Economic Experience Study.
Additional assumptions for subsequent events and law changes are current as of the 2016 actuarial
valuation report. The TPL was calculated as of the valuation date and rolled forward to the
measurement date of June 30, 2017. Plan liabilities were rolled forward from June 30, 2016, to
June 30, 2017, 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" 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 throughout the member's lifetime.
Change in Assumptions and Methods:
Actuarial results that OSA provided reflect the following changes in assumptions and methods:
• For all plans except LEOFF Plan 1,how terminated and vested member benefits are valued
was corrected.
• How the basic minimum Cola in PERS Plan 1 and TRS Plan 1 is valued for legal order
payees was improved.
• The average expected remaining service lives calculation was revised. It is used to
recognize the changes in pension expense to no longer discount future years of service back
to present day.
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Citi of Pasco, -Vashinqton 2017 Comprehensive 2LnnuaCTinanciaCReport
Discount Rate
The discount rate used to measure the total pension liability for all DRS plans was 7.5 percent for
all plans. To determine that rate, an asset sufficiency test was completed to test whether each
pension plan's fiduciary net position was sufficient to make all projected future benefit payments
for current plan members.
Consistent with current law, the asset sufficiency test included an assumed 7.70% 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. In selecting this assumption, OSA reviewed the
historical experience data, considered the historical conditions that produced past annual
investment returns, and considered Capital Market Assumptions (CMAs) and simulated expected
investment returns the Washington State Investment Board (WSIB)provided
The CMAs contain three pieces of information for each class of assets WSIB currently invests in:
• Expected Annual Return
• Standard deviation of the annual return
• Correlations between the annual returns of each asset class with every other asset class.
The WSIB uses the CMAs and their target asset allocation to simulate future investment returns at
various future times.
Estimated Rates of Return by Asset Class
The table below summarizes the best estimates of arithmetic real rates of return for each major
asset class included in the pension plan's target asset allocation as of June 30, 2017.
The inflation component used to create the table is 2.20% and represents the WSIB's most recent
long-term estimate of broad economic inflation.
Asset Class Target Allocation %Long-Term Expected Real Rate
of Return Arithmetic
Fixed Income 20% 1.70%
Tangible Assets 5% 4.90%
Real Estate 15% 5.80%
Global Equity 37% 6.30%
Private Equity 23% 9.30%
100%
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City of Pasco, -Washington 2017 Comprehensive AnnuaCTinancial Report
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 1-percentage point lower (6.5
percent) or 1-percentage point higher(8.5 percent) than the current rate.
I%Decrease Current Rate Discount I%Increase
6.50% 7.50% 8.50%
PERS Plan 1 5,760,816 4,728,992 3,835,211
PERS PIla
213 11,868,277 4,405,277 (1,709,545)
LEOFF Plan 1 (753,289) (1,015,536) (1,240,746)
LEOFF Plan 1,284,387 (5,935,285) (11,817,571)
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
For year ending December 31, 2017, the city reported a total pension liability of$9,134,269 and a
net pension(asset)of$(6,950,821)for its proportionate share of the net pension liabilities (assets).
The table below details these amounts by plan:
Aggregate Pension Amounts- All Plans
Pension liabilities $ (9,134,269)
Pension assets 6,950,821
Deferred outflows of resources 2,270,845
Deferred inflows of resources (3,565,644)
Pension expense/expenditures $ 1,038,889
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 (1,015,536) (5,935,285)
State's proportionate share of the
net pension asset associated with
the employer (6,869,061) (3,850,108)
Total $ (7,884,597) $ (9,785,393)
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City of Pasco, 'Washington 2017 Comprehensive AnnuaCginanciaCReport
At June 30, 2017, the city's proportionate share of the collective net pension liabilities was as
follows:
Proportionate Proportionate Change in
Plan Share 6/30/16 Share 6/30/17 Proportion
PERS 1 0.098322% 0.099661% 0.001339%
PERS 2/3 0.122675% 0.126788% 0.004113%
LEOFF 1 0.066826% 0.066934% 0.000108%
LEOFF 2 0.400187% 0.427714% 0.027527%
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 2017.
Historical data was obtained from a 2011 study by the Office of the State Actuary(OSA). In fiscal
year 2017, 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 2017, the state of Washington contributed 39.34 percent of LEOFF 2 employer
contributions pursuant to RCW 41.26.725 and all other employers contributed the remaining 60.65
percent of employer contributions
The collective net pension liability (asset) was measured as of June 30, 2017, and the actuarial
valuation date on which the total pension liability (asset) is based was as of June 30, 2016, with
update procedures used to roll forward the total pension liability to the measurement date.
Pension Expense
For the year ended December 31, 2017, the city recognized pension expense as follows:
Pension Expense 2017
PERS 1 $ 358,000
PERS 2 $ 698,885
LEOFF 1 $ (162,685)
LEOFF 2 $ 144,690
TOTAL $ 1,038,890
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Cit-V of Pasco, Washington 2017 Comprehensive AnnuaCEtnancial Report
Deferred Outflows of Resources and Deferred Inflows of Resources
At December 31, 2017, the city reported deferred outflows of resources and deferred inflows of
resources related to pensions from the following sources:
Deferred Outflows Deferred Inflows
in ofResources of Resources
Differences between expected and actual
experience $ - $
Net difference between projected and actual
investment earnings on pension plan
investments - (176,473)
Changes of assumptions -
Changes in proportion and differences between
contributions and proportionate share of
Contributions subsequent to the measurement
date 316,238
TOTAL $ 316,238 $ (176,473)
Deferred Outflows Deferred Inflows
PERS 2/3 of Resources of Resources
Differences between expected and actual
experience $ 446,359 $ (144,882)
Net difference between projected and actual
investment earnings on pension plan
investments - 1,174,341)
Changes of ass tions 46,792 -
Changes in proportion and differences between
contributions and proportionate share of
contributions 303,578 (71,023)
Contributions subsequent to the measurement
date 464,082
TOTAL $ 1,260,811 $ (1,390,246)
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 - (94,367)
Changes of assumptions - -
Changes in proportion and differences between
contributions and proportionate share of
contributions -
Contributions subsequent to the measurement
date
TOTAL $ - $ (94,367)
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City of Pasco, Washington Zoic Comprehensive AnnuaCginanciaCReport
Deferred Outflows Deferred Inflows
LEOFF 2 of Resources of Resources
Differences between expected and actual
experience $ 260,867 $ (225,076)
Net difference between projected and actual
investment earnings on pension plan
investments - (1,332,513)
Changes of assumptions 7,147 -
Changes in proportion and differences between
contributions and proportionate share of
contributions 30,512 (346,969)
Contributions subsequent to the measurement
date 395,270
TOTAL $ 693,796 $ (1,904,558)
TOTAL DEFERRED OUTFLOWS Deferred Outflows Deferred Inflows
AND INFLOWS FOR ALL PLANS of Resources of Resources
Differences between expected and actual
experience $ 707,226 $ (369,958)
Net difference between projected and actual
investment earnings on pension plan
investments - (2,777,694)
Changes of assumptions 53,939 -
Changes in proportion and differences between
contributions and proportionate share of
contributions 334,090 (417,992)
Contributions subsequent to the measurement
date 1,175,590 -
TOTAL $ 2,270,845 $ (3,565,644)
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:
Net Effect on Future Pension Expense
Year Ended 12/31 PERS 1 PERS 2/3 LEOFF 1 LEOFF 2 Total
2018 (119,284) (367,458) (59,223) (671,271) (1,217,236)
2019 37,660 160,206 15,972 79,521 293,359
2020 (8,744) (84,521) (6,378) (150,572) (250,215)
2021 (86,104) (448,294) (44,738) (605,519) (1,184,655)
2022 63,718 - (46,106) 17,612
Thereafter 82,833 - (212,086) (129,253)
Total $ (176,472) $ (593,516) $ (94,367) $ (1,606,033) $(2,470,388)
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City of Pasco, -Washington 2017 Comprehensive AnnuaCT nanciaCReport
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 2017.
Aggregate Pension Amounts -Old Fire Pension
Pension Liabilities $ -
Pension Assets (1,568,447)
Deferred Outflows of Resources 111,627
Deferred Inflows of Resources (237,004)
Pension Expense (26,259)
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
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, 2017, 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: 8
Inactive plan members retired March 1, 1970 or after and not currently receiving benefits: 1
Active Plan Members: 0
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City of Pasco, -Washington 2017 Comprehensive .AnnualFinancial Report
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. One member is eligible for City benefits but
because of the formulary is only receiving benefits from the state. He continues to be eligible
for City benefits if they exceed the LEOFF benefit. Benefit payments 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 2017 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 2017 the plan received$63,503 from this tax. In addition
to the fire insurance premium tax the plan receives interest and dividends on plan assets. In
recent year's actuarial valuations have supported the City's assertion that the plan is fully
funded. The City did not contribute to the plan in 2017.
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.
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 $ 24,889
Mutual Funds $ 2,271,878
Rate of Return. For the year ended December 31, 2017, the annual money-weighted rate of
return on pension plan investments, net of pension plan investment expense,was 15.94%. The
money-weighted rate of return expresses investment performance, net of investment expense,
adjusted for the changing amount actually invested.
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City of Pasco, Washington 2017 Comprehensive .AnnualFinancial Report
Actuarial Assumptions: The total pension liability was determined by an actuarial valuation as
of December 31, 2017, using the following actuarial assumptions, applied to all periods
included in the measurement:
Inflation 2.50%
Salary increases 3.00%
*Investment rate of return 7.00%
The discount rate was changed was reduced from 7.1%to 7.0% as of 12/31/17
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 7.0%. The
projection of cash flows used to determine the discount rate assumed City contributions were
equal to the statutorily calculated contribution of state fire insurance premiums for the next 20
years. Based on this assumption, the pension plan's fiduciary net position was projected to be
available to make all projected future benefit payment for current plan members. Therefore,
the long-term expected rate of return on pension plan investments was applied to all periods of
projected benefit payments to determine the total pension liability.
Sensitivity of the net pension liability to changes in the discount rate. The net pension liability
of the City, calculated using the discount rate of 7.0%, 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,
6.0%, or one-percentage point higher, 8.0%, than the current rate, follows:
Net Pension Liability 1%Decrease I Current Discount Rate 1%Increase
$ (1,461,517) $ (1,568,447) $ (1,660,198)
Net Pension Liability
The components of the City's net pension liability and funding status at December 31, 2017
are as follows:
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City of Pasco, 'Washington 2017 Comprehensive AnnuaCginanciaCReport
OLD FIRE PENSION-Funded Status as of December 31,2017
Total Pension Liability $ 1,193,946
Less:Plan Fiduciary Net Position 2,762,393
Fire Pension Fund Net Pension Liability/(Asset) $ (1,568,447)
Plan Fiduciary Net Position as a Percentage of 231.37%
the Total Pension Liability
Covered Payroll NA
USSLas a percentage of covered payroll NA
The following table presents the changes in Net Pension Liability for year ending December 31,
2017.
Changes in Net Pension Liability
Total Pension Plan Fiduciary Net Net Pension
Liability Position Liability
(a) (b) (a)-(b)
Balances at January 1,2017 $ 1,147,676 $ 2,441,145 $ (1,293,469)
Changes for the year:
Service Cost - - -
Interest 77,207 77,207
Differences between expected and
actual experience 79,758 79,758
Change in assumptions 9,808 - 9,808
Contributions-employer/other - 63,503 (63,503)
Contributions-employee - - -
Netinvestmentincome - 384,118 (384,118)
Benefit payments,including refimds
of employee contributions (120,503) (120,503) -
Administrative expense - (5,870) 5,870
Other changes - - -
Net changes 46,270 321,248 (274,978)
Balances at December 31,2017 $ 1,193,946 $ 2,762,393 $ (1,568,447)
Healthcare Actuaries performed an actuarial study on December 31,2017 for this plan. The firm
also completed a roll forward update of the plan's actuals for 2018. This plan does not have a
special funding situation.
Changes Since the Prior Valuation
1) The discount rate was changed from 7.10%to 7.00% as of December 31, 2017
2) The valuation reflects updated census information.
The City's fiscal year and the Fire Pension Plan both observe a fiscal year ending December 31.
The components of FPF Plan Expense for 2017 are presented in the following table:
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City of Pasco, Washington 2017 Comprehensive AnnuaCTinanciaCReport
Components of 2017 Plan Expense
1) Service Cost $ -
2)Interest on Liabilities 77,207
3)Interest on Assets (171,298)
4)Administrative Expenses 5,870
5)Differences between Expected and Actual Experience 79,758
6)Change in Assumptions 9,808
7)Differences Between Expected and Actual Earnings (27,604)
$ (26,259)
Deferred Outflows of Resources and Deferred Inflows of Resources
At December 31, 2017, 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 M of Resources of Resources
Difference between expected and actual experience -
Net difference between projected and actual investment
earnings on pension plan investments 111,627 (237,004)
Changes in proportion and differences between contributions
and proportionate share of contributions -
Changes of assumptions
Contributions subsequent to the measurement date -
TOTAL 1 $ 111,627 $ (237,004)
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
2018 $ (27,604)
2019 (27,604)
2020 (27,604)
2021 (42,564)
2022 -
Thereafter -
The schedule of changes in net pension liability and related ratios, schedule of employer
contributions and schedule of investment returns are presented as Required Supplementary
Information(RSI) and can be found immediately following the notes to the financial statements.
The tables 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.
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City of Pasco, Washington 2017 Comprehensive .AnnualFinancial Report
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 Yd Ave., Pasco, WA 99301.
NOTE 14: 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 for lifetime healthcare under the Law Enforcement Officers' and Firefighters' (LEOFF 1)
plan one retirement system.
The LEOFF 1 Disability Board is responsible for management of the LEOFF 1 OPEB plan,which
is mandated by RCW 41.26. The LEOFF 1 Disability Board consists of the following five
members: the mayor or a designated representative who shall be an elected official of the city,who
shall be chairperson of the board, a council member, a"citizen at large"appointed by the City, one
retired firefighter and one retired police officer. 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.
In 2017 the City of Pasco implemented the provisions of GASB 74, Financial Reporting for
Postemployment Benefit Plans Other Than Pension Plans, and GASB 75, Accounting and
Financial Reporting for Postemployment Benefits Other Than Pensions. These statements address
both the OPEB Plan and the employer's reporting requirements. GASB 75 requires the net OPEB
liability to be measured as the total OPEB liability, less the amount of the OPEB plan's fiduciary
net position. The City, as employer is required to report the net OPEB liability or (asset), and
deferred inflows and outflows associated with the plan in the Government Wide Statement of Net
Position. The LEOFF 1 OPEB plan is funded on a pay as you go basis and as such, the plan does
not have assets accumulated for future payments.
In prior years the City reported this plan under the provisions of GASB 45, which calculated the
liability for the plan as the cumulative over/under funding of the annual required contribution,plus
associated interest. For 2016 an OPEB obligation of$4,086,206 was reported in the government
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City of Pasco, -Washington 2017 Comprehensive .AnnuaCTinancial Report
wide statement of net positon. Net position was restated in 2017 to recognize the beginning Net
OPEB liability of$16,078,996.
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,prescription and nursing care
expenses not payable by worker's compensation,Medicare,or other insurance are covered.LEOFF
1 members are eligible for the plan when they terminate employment. The plan is closed to new
participants and there are currently 31 retired LEOFF 1 members in the plan and one remaining
active LEOFF 1 employee that will be eligible upon retirement. There are no inactive plan
members not receiving plan benefits. The plan requires members to sign up for Medicare and pay
the premiums when they reach age 65. The City contributes the full premium for the City's
healthcare for all members. Although the premium charged is the same as active employees,29 of
the 31 eligible members have primary coverage with Medicare and the City insurance is a
secondary provider. Only two members have primary coverage with the City. The Board must
approve any medical reimbursements not covered by Medicare or the City's insurance. In 2017
the City paid $538,371 in monthly premiums for 31 members and $8,780 for additional items not
covered by Medicare or insurance. For year ending 2017, the City's benefit payments totaled
$547,151, which is 279% of covered payroll. Plan members do not contribute to the plan and
spouses and other dependents are not eligible for this plan. There are no third party contributions
to this plan.
The LEOFF 1 OPEB Plan has no assets and is considered unfunded, the total liability is reported
in the Government Wide Statement of Net Position.
The components of the Net OPEB Liability of the City as of December 31, 2017,were as follows:
Total OPEB Liability $16,179,101
Plan Fiduciary Net Position 0
City's Total OPEB Liability $16,179,101
Covered Payroll 196,197
Total OPEB Liability as a percentage of covered payroll 8246.4%
Healthcare Actuaries completed a full valuation under the new GASB 74 and 75 standards, of the
plan as of December 31, 2017.
Summary of Significant Accounting Policies: For purposes of measuring the net OPEB liability,
deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB
expense information about the fiduciary net position of the City of Pasco LEOFF 1 Plan, (the plan)
and additions to/deductions from the Plan's fiduciary net position have been determined on the
80
City of Pasco, Washington 2017 Comprehensive AnnuaCTinancial Report
same basis as they are reported by the plan. For this purpose,the plan recognizes benefit payments
when due and payable in accordance with the benefit terms. The LEOFF 1 OPEB plan is accounted
for using a modified accrual basis of accounting.
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.
Actuarial Assumptions: The total liability in the December 31, 2017 actuarial valuation was
determined using the following actuarial assumptions, applied to all periods included in the
measurement,unless otherwise specified:
Inflation: 2.75%
Salary Increases: 3.75%
Healthcare cost trend rates: 7.0% in the first year, trending down to 3.84% over 58 years
Healthy mortality rates: RPH-2014 mortality table (headcount weighted), total dataset, fully
generational with mortality improvement scale MP-2017, set back one year for males and set
forward one year for females.
Disabled mortality rates: RPH-2014 mortality table (headcount weighted), total dataset, fully
generational with mortality improvement scale MP-2017, set forward two years for males and
females.
Discount Rate: The discount rate used to measure the total OPEB liability was 3.5%. The City's
OPEB Plan is an unfunded plan,therefore the discount rate was set to the rate of tax-exempt, high
quality 20 year municipal bonds, as of the valuation date.
The changes in total OPEB liability for 2017 are presented in the following table.
Total OPER
Liability
Balances at January 1,2017 $ 16,078,996
Changes for the year:
Service Cost 89,165
interest 556,341
Benefit payments (545,401)
Net changes 100,105
Balances as of December 31,2017 $ 16,179,101
Sensitivity of the total OPEB liability to changes in the discount rate. The total OPEB liability of
the City, as well as what the City's total OPEB Liability would be if it were calculated using a
discount rate that is one point lower(2.50%) or one percentage point higher(4.50%) follows:
I%Decrease Current Discount Rate I%Increase
Total OPEB Liability 2.50% 3.50% 4.50%
$ 18,241,716 $ 16,179,101 $ 14,449,805
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City of Pasco, -Washington 2017 Comprehensive .AnnuaCTinancial Peport
Sensitivity of the total OPEB liability to changes in the healthcare cost trend rates. The total
OPEB liability of the City, as well as what the City's total OPEB Liability would be if it were
calculated using a healthcare cost trend rates that is one point lower(6.00%) or one percentage
point higher(8.00%) than current healthcare cost trend rates follows:
I%Decrease Current Discount Rate I%Increase
Total OPEB Liability 6.00% 7.00% 8.00%
Decreasing to 2.84% Decreasing to 3.84% Decreasing to 4.84%
$ 14,519,605 $ 16,179,101 $ 18,113,316
The plan incurred pension expense of$645,506 in 2017. Under GASB 75, the basic formula for
calculating OPEB expense is as follows:
Calculation of Expense under GASB 75
December 31,2017
1) Service Cost $ 89,165
2)Interest(on liabilities) 556,341
3)Interest(on assets) -
4)Administrative Expenses -
5)Difference between expected and actual experience -
6)Change in Assumptions -
7)Difference between expected and actual earnings -
Total Expense $ 645,506
There is a schedule of sources of changes in the net OPEB liability presented as RSI, immediately
following the notes to the financial statements. Because this plan is unfunded there are no
disclosures relating to Fiduciary Net Position or investment experience.
There were no Deferred Outflows or Deferred Inflows of resources related to this OPEB Plan for
2017.
Fire Pension—Postemployment Healthcare Plan
Effective December 31, 2017, the City of Pasco implemented the provisions of GASB 74,
Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans, and GASB 75,
Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions. These
statements address both the OPEB Plan and the employer's reporting requirements. GASB 75
requires the net OPEB liability to be measured as the total OPEB liability, less the amount of the
OPEB plan's fiduciary net position. The City, as employer is required to report the net OPEB
liability or(asset), and deferred inflows and outflows associated with the plan in the Government
Wide Statement of Net Position.
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City of Pasco, -Washington 2017 Comprehensive .AnnualFinancial Report
The Old Fire OPEB Plan is a defined benefit plan administered through a trust. The Fire Pension
Board is responsible for management of the Old Fire OPEB plan, which is mandated by RCW
41.26. The Firefighters Pension Board consists of the following five members: the mayor or a
designated representative who shall be an elected official of the city, who shall be chairperson of
the board, the City Clerk, the City Finance Manager/Director and two elected retired firefighters
covered by the plan. 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 Description: The Old Fire Pension OPEB covers firefighters that were hired prior to the
creation of the LEOFF 1 retirement system. As required by the Revised Code of Washington
(RCW) Chapter 41.26, the City provides these retirees lifetime medical care under a defined-
benefit healthcare plan administered by the City. The members' necessary hospital, medical,
prescription and nursing care expenses not payable by worker's compensation, Medicare, or other
insurance are covered. Plan members are eligible for the plan when they terminate employment.
The plan is closed to new participants and all eligible members are retired and drawing benefits.
There are currently 5 eligible members in the plan and spouses and beneficiaries are not eligible
for the plan. The plan requires members to sign up for Medicare and pay the premiums when they
reach age 65. The City contributes the full premium for the City's healthcare for all members and
members do not contribute to the plan. Although the premium charged is the same as active
employees, all 5 members have primary coverage with Medicare and the City insurance is a
secondary provider. The Board must approve any medical reimbursements not covered by
Medicare or the City's insurance. In 2017 the plan paid $94,835 in monthly premiums for 5
members and $50,003 for additional items not covered by Medicare or insurance.
The components of the Net OPEB Liability of the City as of December 31, 2017,were as follows:
Total OPEB Liability $ 1,612,381
Plan Fiduciary Net Position 3,023,373
City's Total OPEB Liability(Asset) ($ 1,410,992)
Plan Fiduciary Net Position as a percentage of total OPEB 187.51%
Covered Payroll N/A
Total OPEB Liability as a percentage of covered payroll N/A
Healthcare Actuaries completed a full valuation under the new GASB 74 and 75 standards, of the
plan as of December 31, 2017.
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City of Pasco, -Washington 2017 Comprehensive .Annual Financial Report
Summary of Significant Accounting Policies: For purposes of measuring the net OPEB liability,
deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB
expense information about the fiduciary net position of the Old Fire OPEB Plan, (the plan) and
additions to/deductions from the Plan's fiduciary net position have been determined on the same
basis as they are reported by the plan. Investments are reported at fair value. The Old Fire OPEB
plan is accounted for using a modified accrual basis of accounting.
Funding Policy: Pursuant to state statute, the City is wholly responsible for 100% of authorized
Old Fire OPEB 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.
Actuarial Assumptions: The total liability in the December 31, 2017 actuarial valuation was
determined using the following actuarial assumptions, applied to all periods included in the
measurement,unless otherwise specified
Inflation: 2.75%
Salary Increases: 3.75%
Healthcare cost trend rates: 6.0% in the first year, trending down to 3.84% over 58 years
Healthy mortality rates: RPH-2014 mortality table (headcount weighted), total dataset, fully
generational with mortality improvement scale MP-2017, set back one year for males and set
forward one year for females.
Disabled mortality rates: RPH-2014 mortality table (headcount weighted), total dataset, fully
generational with mortality improvement scale MP-2017, set forward two years for males and
females.
Discount Rate: The discount rate used to measure the total OPEB liability was 7.75%. The City's
Old Fire OPEB Plan's fiduciary net position was projected to be available to make all projected
future benefit payment for current members. Therefore, the long-term expected rate of return on
plan investments was applied to all periods of projected benefit payments to determine the total
OPEB liability.
The changes in total OPEB liability for 2017 are presented in the following table.
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City of Pasco, -Washington 2017 Comprehensive AnnuaCTinanciaCR.eport
Changes in the Net OPEB Liability
Total OPEB Plan Fiduciary Net Net OPEB
Liabiity Position Liability
(a) (b) (c)—(a)-(b)
Balances at January 1,2017 $ 1,636,038 $ 2,664,405 $ (1,028,367)
Changes for the year:
Service Cost - - -
Interest 121,181 121,181
Differences between expected and actual experience -
Change in assumptions - -
Net investment income 507,854 (507,854)
Contributions - -
Benefit payments,including refunds
of employee contributions (144,838) (144,838) -
Admnistrative expense (4,048) 4,048
Other changes - -
Net changes (23,657) 358,968 (382,625)
Balances at December 31,2017 $ 1,612,381 $ 3,023,373 $ (1,410,992)
Sensitivity of the total OPEB liability to changes in the discount rate. The total OPEB liability of
the City, as well as what the City's total OPEB Liability would be if it were calculated using a
discount rate that is one point lower(6.75%) or one percentage point higher(8.75%) follows:
I%Decrease Current Discount Rate I%Increase
Total OPEB Liability 6.75% 7.75% 8.75%
$ (1,293,591) $ (1,410,992) $ (1,515,381)
Sensitivity of the total OPEB liability to changes in the healthcare cost trend rates. The total
OPEB liability of the City, as well as what the City's total OPEB Liability would be if it were
calculated using a healthcare cost trend rates that is one point lower(5.00%) or one percentage
point higher(7.00%) than current healthcare cost trend rates follows:
I%Decrease Current Discount Rate I%Increase
5.00% 6.00% 7.00%
Total OPEB Liability
Decreasing to 2.84% Decreasing to 3.84% Decreasing to 4.84%
$ (1,511,086) $ (1,410,992) $ (1,300,465)
The plan incurred pension expense of($136,919) in 2017. Under GASB 75, the basic formula for
calculating OPEB expense is as follows:
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City of Pasco, -Washington 2017 Comprehensive AnnuaCTinanciaCReport
Calculation of Expense under GASB 75
December 31,2017
1)Service Cost $ -
2)Interest(on liabilities) 121,181.00
3)Interest(on assets) (200,722.00)
4)Administrative Expenses 4,048.00
5)Difference between expected and actual experience -
6)Change in Ass-unptions -
7)Difference between expected and actual earnings (61,426.00)
Total Expense $ (136,919)
At December 31, 2017, the City reported deferred outflows of resources and deferred inflows of
resources related to OPEB from the following sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
Differences between actual and expected experience $ $
Change of assumptions
Net difference between projected and actual earnings on OPEB Plan Investments (245,706)
Total $ $ (245,706)
Amounts reported as deferred outflows or resources and deferred inflows of resources related to
OPEB will be recognized in OPEB expense as follows:
Year Ended December 31 Amount
2018 (61,426)
2019 (61,426)
2020 (61,426)
2021 (61,426)
Investments: The Old Fire OPEB Plan does not have an investment policy. The board approves
any purchase or sale transactions regarding assets of the plan. The plan has only one investment,
a mutual fund that was purchased in 2003. The investment is detailed in the following table.
Annualized
Balance as of 2017 YTD Return Since
Name of Investment Type 12/31/17 Rating by Morningstar Return 1/1/03
Washington Mutual Investers Fund-A Mutual Fund $2,986,331 Gold 17.39% 9.32%
The Old Fire OPEB Plan does not have a specific reserve policy or requirement, however all
assets of the plan are considered assets of the trust and as such are obligated for payment of
current and future benefits to plan members.
Weighted Annualized
Balance as of Rate of Return Since
Name of Investment Type 12/31/17 Rating by Morningstar Return 1/1/03
Washington Mutual Investers Fund-A Mutual Fund $2,986,331 Gold 17.39% 9.32%
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City of Pasco, 'Washington 2017 Comprehensive AnnuaCTinanciaCPeport
NOTE 15: PRIOR PERIOD CORRECTIONS
In 2017 the City of Pasco implemented GASB 74,Financial Reporting for Postemployment Benefit
Plans Other Than Pension Plans, and GASB 75, Accounting and Financial Reporting for
Postemployment Benefits Other Than Pensions. These GASB Statements reflect a fundamental
overhaul in the standards for accounting and financial reporting for postemployment benefits other
than pensions(OPEB). Previously the City reported the cumulative difference between the Annual
Required Contribution (ARC) and the actual contribution for the LEOFF 1 Retiree OPEB plan.
The change in accounting rule means the City will now report the "Net OPEB Liability/(Asset)"
of the plan, as well as deferred inflows, deferred outflows and OPEB expense in the Government
Wide Statement of Net Position and Statement of Activities. The City will also report the Net
OPEB components of the Old Fire OPEB plan which is administered through a Pension Trust Fund.
During the implementation of GASB 74 and 75 it was determined that like the Net Asset of the
Old Fire OPEB Plan, the Net Pension Asset of the Old Fire Pension Plan should be reported and
not just the liability for the plan. The 2017 beginning balances for Governmental Activities were
restated to reduce net position by$8,523,282. The components of the restatement are presented in
the table below:
Components of Pension and OPEB Restatements
Restatements Due to GASB 74& 75 12/31/2016 1/1/2017 Difference
LEOFF 1 OPEB Plan Net OPEB Liability $ 4,086,203 $ 16,078,996 $ 11,992,793
Old Fire OPEB Plan Net OPEB Asset - (1,028,367) $ (1,028,367)
Total $ 4,086,203 $ 15,050,629 $ 10,964,426
Restatement of GASB 68 Liability 12/31/2016 1/1/2017 Difference
Old Fire Net Pension Liability $ 1,147,676 $ - $ (1,147,676)
Old Fire Net Pension Asset - (1,293,468) (1,293,468)
$ 1,147,676 $ (1,293,468) $ (2,441,144)
Total reduction to Net Position $ 8,523,282
General Fund 100 and Capital Improvement Fund 193
During the City's 20016 Financial Audit the audit staff discovered$159,746 in Real Estate Excise
Tax (REET) that had been erroneously credited and reported in the General Fund as Property Tax
revenue. A prior period adjustment has been completed to reduce revenue and cash in the General
Fund and increase the same balances in the Capital Improvement Fund 193.
Revolving Abatement Fund 190
In 2016, the City transitioned from one system to another to account for code enforcement and
abatement billings.Until the conversion was complete the existing receivables remain on the City's
balance with the plan to remove those balances upon successful implementation of the new system.
A key member of that conversion process left the City's employment before making the adjusting
entry leaving the outstanding balance of accounts receivable and related revenues too high in 2016.
As soon as this oversight was discovered, a prior period adjustment was made to correct. The prior
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City of Pasco, Washington 2017 Comprehensive .AnnuaCEinancial Report
period adjustment reduced the accounts receivable balance by$102,500. The ultimate effect of this
adjusting entry also reduced the net position of the revolving abatement fund.
Additionally, as part of the transition to a new system of revolving abatement program billing, the
method of recognizing bad debt accounts sent to collection changed. This change revealed the need
to make a prior period adjustment for accounts sent to collection in 2017 but billed in 2016.Without
the adjustment,the revenue reported in 2017 would be understated.As with the adjustment detailed
above, this entry reduced the net position of the revolving abatement fund.
NOTE 16: CONTINGENCIES AND LITIGATION
The City has recorded in its financial statements all material liabilities, including applicable
estimates for situations that are not yet resolved but where, based on available information,
management believes it is probable that the City will have to make payment. The City has closely
reviewed all pending claims and it is management's opinion,the City's insurance policies and self-
insurance reserves are adequate to pay all material known or pending claims. As discussed in Note
3. F,Long-term Debt, the City is contingently liable for repayment of debt.
The City participates in a number of Federal and State assisted programs. These grants are subject
to audit by the 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.
As of the issuance of this report, the City and the Franklin County Irrigation District are involved
in a contract dispute regarding the placement of an irrigation water line. No accrual was made to
reflect any anticipated expense for the City as of December 31, 2017. The dispute is presently in
the discovery stage of arbitration. Settlement efforts are likewise continuing. The dispute is
over a contract provision allocating responsibility for the relocation of one of the District's lines
within the path of a street improvement project. The District is seeking specific performance to
require the City to relocate that line. The City disputes that claim. While there are no damages
demanded, if the District is successful the consequential costs to the City would include, not only
the cost of the line replacement,but also the acquisition of property rights for the relocated
line. Those combined costs could reach between $300,000 to $400,000. If the City and the
District are unable to resolve this dispute by agreement, it is anticipated that an arbitration
hearing will be held in approximately October, 2018, in Pasco, Washington.
NOTE 17: SUBSEQUENT EVENT
There are no subsequent events to report.
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City of Pasco, -Washington 2017 Comprehensive AnnuaCTinancial Report
REQ UIRED S UPPLEMENTAR Y INFORMATION
89
City of Pasco, 'WashfRgton 2017 Comprehensive AnnuaCT nanciaCReport
Required Supplementary Information
Old Fire OPEB Fund
These schedules are presented to illustrate the requirements to show information for 10 years,
however until a full 10 year trend is compiled the City will present all available GASB 74/75
compliant information.
A schedule of funding progress for the Old Fire OPEB Fund is not included because the plan is
fully funded and there have been no contributions for the past five years.
Schedule of changes in the Net OPEB Liability
Total OPEB Plan Fiduciary Net Net OPEB
Liability Positron Liability
(a) (b) (c)=(a)-(b)
Balances at January 1,2017 $ 1,636,038 $ 2,664,405 $ (1,028,367)
Changes for the year:
Service Cost - - -
Interest 121,181 - 121,181
Differences between expected and actual experience -
Change in assumptions - -
Net investment income 507,854 (507,854)
Contributions -
Benefit payments,including refunds
of employee contributions (144,838) (144,838) -
Administrative expense (4,048) 4,048
Other changes - -
Net changes (23,657) 358,968 (382,625)
Balances at December 31,2017 $ 1,612,381 $ 3,023,373 $ (1,410,992)
Schedule of Investment Returns- Old Fire OPEB Plan
2017
Annual Money Weighted Rate of Return,Net
of Investment Expense 17.39%
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City of Pasco, 'Washington 2017 Comprehensive AnnuaCT nanciaCReport
Required Supplementary Information
LEOFF 1 OPEB Fund
The Schedule of Investment Returns was not included for this plan because there are no fund
assets to invest. These schedules are presented to illustrate the requirements to show information
for 10 years, however until a full 10 year trend is compiled the City will present all available
GASB 74/75 compliant information.
Schedule of City Contributions
For Year ending 12/31/17
Actuarially Determined Contribution $ 547,515
Contribution in relation to the actuarially $ 547,515
determined contribution
Contribution deficiency (excess) -
Covered Payroll $ 196,197
Contributions as a%of Covered Payroll 279%
Notes to Schedule
Actuarial Cost Method Entry Age
Asset Valuation Method Not Applicable
Measurement Date December 31,2017
Discount Rate 3.50%
Healthcare Cost Trend 7%in the first year
trending down to 3.84%
over 58 years
Schedule of changes in the Net OPEB Liability
Total OPEB
Liability
Balances at January 1,2017 $ 16,078,996
Changes for the year:
Service Cost 89,165
hrterest 556,341
Benefit payments (545,401)
Net changes 100,105
Balances as of December 31,2017 $ 16,179,101
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City of Pasco, Washington 2017 Comprehensive AnnuaCTinanciaCR.eport
Schedule of Proportionate Share of the Net Pension Liability/(Asset)
As of June 30
Last 4 Fiscal Years
PERS PLAN 1 2014 2015 2016 2017
Employer's percentage of the net pension liability 0.097647% 0.102321% 0.098322% 0.099661%
Employer's proportionate share of the collective net
pension liability $ 4,919,014 $ 5,352,340 $ 5,280,355 $ 4,728,992
Employer's covered employee payroll $ 342,721 $ 163,430 $ 104,245 $ 34,781
Employer's proportionate share of the net pension
liability as a percentage of covered employee payroll 1435.28% 3275.00% 5065.33% 13596.48%
Plan fiduciary net position as a percentage of the total 61.19% 59.10% 57.03% 61.24%
pension liability
PERS PLAN 2/3 2014 2015 2016 2017
Employer's percentage of the net pension liability 0.114462% 0.125949% 0.122675% 0.126788%
Employer's proportionate share of the collective net
pension liability $ 2,313,690 $ 4,500,230 $ 6,176,589 $ 4,405,277
Employer's covered employee payroll $ 10,474,619 $ 11,212,390 $ 11,878,130 $ 12,471,204
Employer's proportionate share of the net pension
liability as a percentage of covered employee payroll 22.09% 40.14% 52.00% 35.32%
Plan fiduciary net position as a percentage of the total 93.29% 89.20% 85.82% 90.97%
pension liability
LEOFF 1 2014 2015 2016 2017
Employer's percentage of the net pension asset 0.067804% 0.067488% 0.066826% 0.066934%
Employer's proportionate share of the collective net
pension asset $ (822,321) $ (813,380) $ (688,499) $ (1,015,536)
Employer's covered employee payroll $ 219,984 $ 207,267 $ 226,769 $ 197,219
Employer's proportionate share of the net pension
asset as a percentage of covered employee payroll -373.81% -392.43% -303.61% -514.93%
Plan fiduciary net position as a percentage of the total 126.91% 127.36% 123.74% 135.96%
pension asset
LEOFF 2 2014 2015 2016 2017
Employer's percentage of the net pension asset 0.365709% 0.405844% 0.400187% 0.427714%
Employer's proportionate share of the collective net
pension asset $ (4,853,116) $ (4,171,265) $ (2,327,608) $ (5,935,285)
State's proportionate share of the net pension asset
associated with the employer (3,193,777) (2,758,046) (1,517,431) (3,850,108)
TOTAL $ (8,046,893) $ (6,929,311) $ (3,845,039) $ (9,785,393)
Employer's covered employee payroll $ 10,497,629 $ 12,154,638 $ 12,622,501 $ 14,338,666
Employer's proportionate share of the net pension
asset as a percentage of covered employee payroll -76.65% -57.01% -30.46% -68.24%
Plan fiduciary net position as a percentage of the total 116.75% 111.67% 106.04% 113.36
pension asset
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City of Pasco, 'Washington 2017 Comprehensive AnnuaCginanciaCReport
Schedule of Employer Contributions
As of December 31
Last 4 Fiscal Years
PERS PLAN 1 2014 2015 2016 2017
Statutorily or contractually required contributions 31,484 16,252 10,583 4,077
Contributions in relation to the statutorily or contractually
required contributions (31,484) (16,252) (10,583) (4,077)
Contribution deficiency(excess) - - - -
Covered employer payroll $ 342,721 $ 163,430 $ 104,245 $ 34,781
Contributions as a percentage of covered employee payroll 9.19% 9.94% 10.15% 11.72%
PERS PLAN 2/3 2014 2015 2016 2017
Statutorily or contractually required contributions 964,775 1,140,430 1,327,926 1,482,156
Contributions in relation to the statutorily or contractually
required contributions (964,775) (1,140,430) (1,327,926) (1,482,156)
Contribution deficiency(excess) - - - -
Covered employer payroll $ 10,474,619 $ 11,212,390 $ 11,877,299 $ 12,471,204
Contributions as a percentage of covered employee payroll 9.21% 10.17% 11.18% 11.88%
LEOFF 1 2014 2015 2016 2017
Statutorily or contractually required contributions 396 373 407 355
Contributions in relation to the statutorily or contractually
required contributions (396) (373) (407) (355)
Contribution deficiency(excess) - - - -
Covered employer payroll $ 219,984 $ 207,267 $ 225,834 $ 197,218
Contributions as a percentage of covered employee payroll 0.18% 0.18% 0.18% 0.18%
LEOFF 2 2014 2015 2016 2017
Statutorily or contractually required contributions 549,396 635,688 660,156 763,912
Contributions in relation to the statutorily or contractually
required contributions (549,396) (635,688) (660,156) (763,912)
Contribution deficiency(excess) - - - -
Covered employer payroll $ 10,497,629 $ 12,154,638 $ 12,622,501 $ 14,338,666
Contributions as a percentage of covered employee payroll 5.23% 5.23% 5.23% 5.33%
These schedules will be built prospectively until they contain ten years of data.
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City of Pasco, 'Washington 2017 Comprehensive AnnuaCTinanciaCReport
Schedule of Contributions
Fire Pension Find
Statutorially Determined Contribution $ 54,506 $ 58,193 $ 63,503
Less Contributions Made (54,506) (58,193) (63,503)
Contribution Deficiency(excess)
Covered-Employee Payroll $ $ $
Contributions as a percentage of covered employee payroll n/a 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 Premiums.
Schedule of Investment Returns-Fire Pension Plan
Annual Money Weighted Rate of Return,Net of
Investment Expense -0.86% 12.14% 15.94%
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.
Schedule of Changes in the City's Net Pension Liability and Related Ratios
Fire Pension Fund-For Years Ended:
Total Pension Liabilrty 2015 2016 2017
Service Cost $ - $ - $ -
Interest 82,477 79,996 77,207
Changes of benefit terms - -
Diflerences between expected and actual experience 79,758
Changes of assumptions 9,808
Benefit payrnents,including refunds of employee contributions (116,770) (118,053) (120,503)
Net change in total pension liability (34,293) (38,057) 46,270
Total pension liability-beginning 1,220,026 1,185,733 1,147,676
Total pension liability-ending $ 1,185,733 $ 1,147,676 $ 1,193,946
Plan Fiduciary Net Position
Contributions-employer $ 54,506 $ 58,193 $ 63,503
Contributions-employee - -
Net investment income (19,689) 267,948 384,118
Benefit payments,including refunds of employee contributions (116,770) (118,053) (120,503)
Administrative expense (3,398) (4,414) (5,870)
Other (3,500) -
Net change inplan fiduciary net position (85,351) 200,174 321,248
Plan fiduciary net position-beginning 2,326,321 2,240,970 2,441,145
Plan fiduciary net position-ending 2,240,970 2,441,144 2,762,393
City's net pensionliabilty- $ (1,055,237) $ (1,293,468) $ (1,568,447)
Plan fiduciary net position as a percentage of the total pension 188.99% 212.70% 231.37%
Covered employee payroll - -
Ciiy's net pension liability as a percentage of covered employee
payroll n/a n/a n/a
Notes to schedule:
The following assumptions were adopted as of 1/1/2017:discount rate 7.0%,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 2017 Comprehensive AnnuaCginanciaCReport
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.
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City of Pasco, -Washington 2017 Comprehensive AnnuaCTinanciaCPeport
Combining Balance Sheet
Nonmajor Other Governmental Funds
December 31,2017
Total Total Cemetery
Nonmajor Nonmajor Perpetual Care Total
Other Special Debt Nonmajor Other
Revenue Service Permanent Governmental
ASSETS
Cash&cash equivalents $ 15,373,836 $ 236,178 $ 47,981 $ 15,657,995
Restricted cash:
Customer deposits 114,083 - 114,083
Cemetery endowment - - 455,983 455,983
Debt service - 214,582 214,582
Investments 4,987,650 - 4,987,650
Receivables(net of allowances):
Taxes 672,335 - 672,335
Customers 1,856,061 52,699 1,210 1,909,970
hrterfiuxi loans 344,131 - 344,131
Grants 164,052 - 164,052
Special assessments &loans 127,441 202,867 330,308
Due from other governments 100,000 - 100,000
Total assets 23,739,589 706,326 505,174 24,951,089
LIABILITIES
Accounts payable 583,611 - 583,611
hrterfinid loans payable 123,483 262,560 386,043
Due to other fiords 1,085,000 - 1,085,000
Deposits payable from restricted asse 109,296 - 109,296
Total liabilities 1,901,390 262,560 2,163,950
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues 255,218 202,867 458,085
FUND BALANCES
Nonspendable
Cemetery permanent find - - 505,174 505,174
Restricted
Street and boulevard 7,996,530 7,996,530
Litter&housing abatement 415,536 415,536
Park development 1,723,175 1,723,175
Culture&recreation (3,699) (3,699)
Capital improvements 6,979,994 6,979,994
Economic development 63,572 - 63,572
Debt guarantee - 371,214 371,214
Committed
Special revenue funds 4,407,873 - 4,407,873
Unassigned - (130,315) (130,315)
Total fund balances 21,582,981 240,899 505,174 22,329,054
Total liabilities,deferrend inflows of
resources and fund balances $ 23,739,589 $ 706,326 $ 505,174 S 24,951,089
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Citi of Pasco, -Vashinqton 2017 Comprehensive AnnuaCginanciaCReport
Combining Statement of Revenues,Expenditures, and Changes in Fund Balances
Nonmajor Other Governmental Funds
For the Year Ended December 31,2017
Total Total Cemetery
Nonmajor Nonmajor Perpetual Care Total
Other Special Debt Nomnajor Other
Revenue Service Pennanent Governmental
REVENUES
Taxes $ 4,451,632 $ - $ - $ 4,451,632
Licenses and permits 398,420 - 398,420
Intergoverntnental revenue 2,628,512 - 2,628,512
Charges for services 11,488,178 - 17,552 11,505,730
Fines and forfeitures 171,813 - 171,813
Miscellaneous revenue 1,840,801 230,262 1,193 2,072,256
Total revenues 20,979,356 230,262 18,745 21,228,363
EXPENDITURES
Current:
Public safety 6,514,849 - 6,514,849
Transportation 2,662,527 - 2,662,527
Natural and economic environment 4,498,680 - 4,498,680
Culture and recreation 2,760,218 - 2,760,218
Capital outlay: -
Public safety 71,135 - 71,135
Transportation 15,286 - 15,286
Natural and economic environment 18,597 - 18,597
Debt service:
Principal - 25,000 25,000
Interest 16,820 20,313 37,133
Total expenditures 16,558,112 45,313 - 16,603,425
Excess of revenues
over expenditures 4,421,244 184,949 18,745 4,624,938
OTHER FINANCING SOURCES(USES)
Sale of assets 66,693 - - 66,693
Transfers in 1,373,163 - 1,373,163
Transfers out (3,828,669) (300,000) (4,128,669)
Total other financing sources(uses) (2,388,813) (300,000) - (2,688,813)
Net change in fiord balances 2,032,431 (115,051) 18,745 1,936,125
Fund balances-beginning(Adjusted-See Note 15) 19,550,550 355,950 486,429 20,392,929
Fund balances-ending $ 21,582,981 $ 240,899 $ 505,174 $ 22,329,054
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City of Pasco, -Washington 2017 Comprehensive AnnuaCTinanciaCPeport
Combining Balance Sheet
Nonmajor Special Revenue Funds
December 31,2017
Community
City Arterial I-182 Traffic Street Development
Street Street Impact Overlay Block Grant
ASSETS
Cash&cash equivalents $ 4,271 $ 1,215,242 $ 908,771 $ 3,755,384 $ 1,366
Restricted cash:
Customer deposits -
Cemetery endowment
Debt service
Investments
Receivables(net of allowances):
Taxes 175,974 79,719 66,109
Customers 86,032
hnterfinnd loans -
Grants 163,377
Special assessments &loans 127,441
Due from other governments -
Total assets 266,277 1,294,961 908,771 3,821,493 292,184
LIABILITIES
Accounts payable 77,175 17,570
Interfund loans payable -
Due to other firnds 80,000 85,000
Deposits payable from restricted assets -
Total liabilities 157,175 102,570
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues 127,441
FUND BALANCES
Nonspendable
Cemetery pemranent fund
Restricted
Street and boulevard 1,263,218 908,771 3,821,493
Litter&housing abatement
Park development
Culture&recreation
Capital improvements
Economic development 62,173
Debt guarantee
Connnitted
Special revenue fimds 109,102 31,743
Unassigned
Total fimdbalances 109,102 1,294,961 908,771 3,821,493 62,173
Total liabilities,deferrend inflows of
resources and fiord balances $ 266,277 $ 1,294,961 $ 908,771 $ 3,821,493 $ 292,184
Continued on next page
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City of Pasco, 'Washington 2017 Comprehensive AnnuaCginanciaCReport
M.L.King
Community Ambulance City View Boulevard Athletic Golf Senior Multi-Modal
Center Services Cemetery Perpetual Program Course Center Facility
$ 188,998 $ 8,299 $ 113,471 $ 1,157,747 $ 247,230 $ 60,374 $ 28,854 $ 338,270
99,170 247 4,540 4,500 5,626
501,170
1,564,106 1,522 3,979 4,168
344,131
675
188,998 1,671,575 115,240 2,003,048 251,770 68,853 29,529 348,064
4,620 219,359 4,180 14,299 3,194 11,007 1,738
920,000
99,170 4,500 5,626
4,620 1,238,529 4,180 14,299 7,694 11,007 7,364
62,919 64,858
2,003,048
(3,699)
184,378 433,046 48,141 237,471 18,522 340,700
184,378 433,046 48,141 2,003,048 237,471 (3,699) 18,522 340,700
$ 188,998 $1,671,575 $ 115,240 $ 2,003,048 $ 251,770 $ 68,853 $ 29,529 $ 348,064
Continued on next page
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City of Pasco, 'Washington 2017 Comprehensive AnnuaCginanciaCReport
Combining Balance Sheet
Nonmajor Special Revenue Funds
December 31,2017
Rivershore Trail Special
School &Marina Lodging Litter Revolving
Impact Fees Maintenance Assessment Abatement Abatement
ASSETS
Cash&cash equivalents $ 127,808 $ 86,245 $ 29,707 $ 17,312 $ 205,892
Restricted cash:
Customer deposits
Cemetery endowment
Debt service
Investments
Receivables(net of allowances):
Taxes 41,001
Customers 1,829 625 193,800
Interfund loans
Grants
Special assessments &loans
Due from other governments
Total assets 127,808 88,074 70,708 17,937 399,692
LIABILITIES
Accounts payable 127,808 190 69,309 874 1,219
htterfwid loans payable
Due to other funds
Deposits payable from restricted assets
Total liabilities 127,808 190 69,309 874 1,219
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues
FUND BALANCES
Nonspendable
Cemetery permanent find
Restricted
Street and boulevard
Litter&housing abatement 17,063 398,473
Park development
Culture&recreation
Capital improvements
Economic development 1,399
Debt guarantee
Committed
Special revenue finds 87,884
Unassigned
Total fund balances - 87,884 1,399 17,063 398,473
Total liabilities,deferrend inflows of
resources and fiord balances $ 127,808 $ 88,074 $ 70,708 $ 17,937 $ 399,692
Continued on next page
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City of Pasco, 'Washington 2017 Comprehensive AnnuaCginanciaCReport
Total
T.RA.C. Stadium/ Nonmajor
Development Park Capital Economic Convention Special
&Operating Development Improvements Development Center Revenue
$ 276,563 $ 1,222,005 $ 2,762,670 $ 2,063,581 $ 553,776 $ 15,373,836
114,083
501,170 3,985,310 4,987,650
38,759 232,014 38,759 672,335
1,856,061
344,131
164,052
127,441
100,000 100,000
415,322 1,723,175 6,979,994 2,063,581 592,535 23,739,589
26,069 5,000 583,611
123,483 123,483
1,085,000
109,296
26,069 128,483 1,901,390
255,218
7,996,530
415,536
1,723,175 1,723,175
(3,699)
6,979,994 6,979,994
63,572
415,322 2,037,512 464,052 4,407,873
415,322 1,723,175 6,979,994 2,037,512 464,052 21,582,981
$ 415,322 $ 1,723,175 $ 6,979,994 $ 2,063,581 $ 592,535 $ 23,739,589
Continued on next page
101
City of Pasco, Washington 2017 Comprehensive .AnnuaCTinancial Report
Combining Statement of Revenues,Expenditures,and Changes in Fund Balances
Nonmajor Special Revenue Funds
For the Year Ended December 31,2017
Conn uuty
City Arterial I-182 Traffic Street Development
Street Street Impact Overlay Block Grant
REVENUES
Taxes $ 247,073 $ - $ - $ 990,173 $
Licenses and permits 398,420
Intergovernmental revenue 1,049,406 513,303 620,597
Charges for services 22,729 2,369 312,140 -
Fines and forfeitures -
Miscellaneous revenue 5,655 11,933 12,771 39,423 36,029
Total revenues 1,723,283 527,605 324,911 1,029,596 656,626
EXPENDITURES
Current:
Public safety -
Transportation 2,495,734 112,597 -
Natural and economic environment 435,096
Culture and recreation -
Capital outlay:
Public safety
Transportation 15,286
Natural and economic environment
Debt service:
Principal
Interest -
Total expenditures 2,511,020 - - 112,597 435,096
Excess of revenues
over expenditures (787,737) 527,605 324,911 916,999 221,530
OTHER FINANCING SOURCES(USES)
Sale of assets -
Transfers in 597,163
Transfers out (278,640) (459,223) (35,447) (272,446)
Total other financing sources(uses) 597,163 (278,640) (459,223) (35,447) (272,446)
Net change in fund balances (190,574) 248,965 (134,312) 881,552 (50,916)
Fund balances-beginning(Adjusted-See Note 15) 299,676 1,045,996 1,043,083 2,939,941 113,089
Fund balances-ending $ 109,102 $ 1,294,961 $ 908,771 $ 3,821,493 $ 62,173
102
City of Pasco, 'Washington 2017 Comprehensive AnnuaCginanciaCReport
M.L.King
Coram mity Ambulance CityView Boulevard Athletic Golf Senior Multi-Modal
Center Services Cemetery Perpetual Program Course Center Facility
1,270 15,370 74,191
2,865 6,429,273 214,595 157,750 122,678 1,325,668 15,670
44,892 20,267 3,280 38,368 4,088 283,639 15,282 86,586
47,757 6,450,810 217,875 196,118 126,766 1,609,307 46,322 160,777
6,514,849
45,491
244,596
110,666 107,818 1,769,789 291,411
71,135
110,666 6,585,984 244,596 - 107,818 1,769,789 291,411 45,491
(62,909) (135,174) (26,721) 196,118 18,948 (160,482) (245,089) 115,286
120,000 420,000 231,000
(170,000)
120,000 420,000 - (170,000) - 231,000 -
57,091 284,826 (26,721) 26,118 18,948 (160,482) (14,089) 115,286
127,287 148,220 74,862 1,976,930 218,523 156,783 32,611 225,414
$ 184,378 $ 433,046 $ 48,141 $ 2,003,048 $ 237,471 $ (3,699) $ 18,522 $ 340,700
103
City of Pasco, -Washington 2017 Comprehensive AnnuaCTinancial Report
Combining Statement of Revenues,Expenditures,and Changes in Fund Balances
Nonmajor Special Revenue Funds
For the Year Ended December 31,2017
Rivershore Trail Special
School &Marina Lodging Litter Revolving
Impact Fees Maintenance Assessment Abatement Abatement
REVENUES
Taxes $ - $ $ 327,947 $ - $
Licenses and perrnits
Intergovernmental revenue
Charges for services 2,325,575 12,500 79,278
Fines and forfeitures 171,813
Miscellaneous revenue 1,367 63,176 431 116 10,523
Total revenues 2,326,942 63,176 328,378 12,616 261,614
EXPENDITURES
Current:
Public safety
Transportation 8,705
Natural and economic environment 2,333,355 296,240
Culture and recreation 10,471 328,243
Capital outlay:
Public safety
Transportation
Natural and economic environment
Debt service:
Principal
Interest
Total expenditures 2,333,355 10,471 328,243 8,705 296,240
Excess of revenues
over expenditures (6,413) 52,705 135 3,911 (34,626)
OTHER FINANCING SOURCES(USES)
Sale of assets
Transfers in 5,000
Transfers out
Total other financing sources(uses) - - 5,000
Net change in fiord balances (6,413) 52,705 135 8,911 (34,626)
Fund balances-beginning(Adjusted-See Note 15) 6,413 35,179 1,264 8,152 433,099
Fund balances-ending $ - $ 87,884 $ 1,399 $ 17,063 $ 398,473
104
City of Pasco, 'WashfRgton 2017 Comprehensive AnnuaCginanciaCReport
Total
T.R.A.C. Nonmajor
Development Park Capital Economic Stadium/ Special
&Operating Development Improvement Developtnent Conv.Center Revenue
$ 325,587 $ - $ 2,235,264 $ - $ 325,588 $ 4,451,632
398,420
354,375 2,628,512
465,088 11,488,178
171,813
1,191 30,369 80,411 1,020,481 30,523 1,840,801
326,778 495,457 2,315,675 1,374,856 356,111 20,979,356
6,514,849
2,662,527
1,034,000 155,393 4,498,680
122,003 19,817 2,760,218
71,135
15,286
18,597 18,597
9,519 7,301 16,820
122,003 - - 1,062,116 182,511 16,558,112
204,775 495,457 2,315,675 312,740 173,600 4,421,244
66,693 66,693
1,373,163
(924,619) (1,422,673) (265,621) (3,828,669)
- (924,619) (1,422,673) (198,928) - (2,388,813)
204,775 (429,162) 893,002 113,812 173,600 2,032,431
210,547 2,152,337 6,086,992 1,923,700 290,452 19,550,550
$ 415,322 $ 1,723,175 $ 6,979,994 $ 2,037,512 $ 464,052 $21,582,981
105
City of Pasco, -Washington 2017 Comprehensive AnnuaCginanciaCPeport
Combining Balance Sheet
Nonmajor Debt Service Funds
December 31, 2017
Total
Local Improv. Nonmajor
LID LID District Debt
Loans Bonds Guaranty Service
ASSETS
Cash&cash equivalents - $ - $ 236,178 $ 236,178
Restricted cash:
Debt service 100,427 14,155 100,000 214,582
Receivables(net of allowances):
Customers 31,818 20,881 52,699
Special assessments &loans 166,548 36,319 202,867
Total assets 298,793 71,355 336,178 706,326
LIABILITIES
Interfund loans payable 262,560 262,560
Total liabilities 262,560 - - 262,560
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues 166,548 36,319 202,867
FUND BALANCES
Restricted
Debt guarantee - 35,036 336,178 371,214
Unassigned (130,315) (130,315)
Total fund balances (130,315) 35,036 336,178 240,899
Total liabilities,deferrend inflows of
resources and fund balances $ 298,793 $ 71,355 $ 336,178 $ 706,326
106
City of Pasco, Washington 2017 Comprehensive AnnuaCEtnancial Report
Combining Statement of Revenues,Expenditures, and Changes in Fund Balances
Nonmajor Debt Service Funds
For the Year Ended December 31, 2017
Total
Local Improv. Nonmajor
LID LID District Debt
Loans Bonds Guaranty Service
REVENUES
Taxes $ - $ - $ - $ -
Miscellaneous revenue 166,612 61,338 2,312 230,262
Total revenues 166,612 61,338 2,312 230,262
EXPENDITURES
Debt service:
Principal - 25,000 25,000
Interest 18,063 2,250 20,313
Total expenditures 18,063 27,250 - 45,313
Excess of revenues
over expenditures 148,549 34,088 2,312 184,949
OTHER FINANCING SOURCES(USES)
Transfers out - (300,000) (300,000)
Total other financing sources(uses) - - (300,000) (300,000)
Net change in fund balances 148,549 34,088 (297,688) (115,051)
Fund balances-beginning (278,864) 948 633,866 355,950
Fund balances-ending $ (130,315) $ 35,036 $ 336,178 $ 240,899
107
City of Pasco, Washington 2017 Comprehensive AnnuaCginanciaCPeport
Statement of Revenues, Expenditures, and Changes in Fund Balances-Budget to Actual
Construction Fund-Major Fund
For the Year Ended December 31, 2017
CONSTRUCTION FUND
Original Final Variance to
Budget Budget Actual Final Budget
REVENUES
Intergovernmentalrevenue $ 7,791,000 $ 7,791,000 $ 3,192,349 $ (4,598,651)
Miscellaneous revenue 62,134 62,134
Total revenues 7,791,000 7,791,000 3,254,483 (4,536,517)
EXPENDITURES
Current:
General government 63,141 (63,141)
Public safety 377,209 (377,209)
Transportation 87 (87)
Natural&economic environment 215,039 (215,039)
Culture and recreation 192,078 (192,078)
Capital outlay:
General government 2,341,525 2,339,325 170,951 2,168,374
Public safety 721,985 664,185 924,857 (260,672)
Transportation 10,329,880 11,172,880 4,136,997 7,035,883
Natural&economic environment 580,893 580,893 (41,996) 622,889
Cukure and recreation 2,976,717 2,976,717 1,340,210 1,636,507
Total expenditures 16,951,000 17,734,000 7,378,573 10,355,427
Excess of revenues over(under)expenditures (9,160,000) (9,943,000) (4,124,090) (5,818,910)
OTHER FINANCING SOURCES
Debt proceeds and other miscellaneous 3,037,000 3,037,000 3,037,000
Transfers in 6,123,000 7,936,000 4,455,223 3,480,777
Total other financing sources 9,160,000 10,973,000 4,455,223 3,480,777
Net change in fund balances - 1,030,000 331,133 (698,867)
Fund balances-beginning 1,213,433 225,501 225,500 (1)
Fund balances-ending $ 1,213,433 $ 1,255,501 $ 556,633 $ (698,868)
108
City of Pasco, Washington 2017 Comprehensive AnnuaCTinanciaCPeport
Schedule of Revenues and Expenditures -Budget to Actual
Nonmajor Other Governmental Funds
For the Year Ended December 31, 2017
Revenues Expenditures
Final Variance to Final Variance to
Budget Actual Final Budget Budget Actual Final Budget
Special Revenue Funds
City Street Fund $ 2,251,288 $ 2,320,446 $ 69,158 $ 2,481,115 $ 2,511,020 $ 29,905
Arterial Street Fund 516,677 527,605 10,928 583,700 278,640 (305,060)
I-82 Traffic Impact Fund 205,000 324,911 119,911 210,000 459,223 249,223
Street Overlay Fund 968,475 1,029,596 61,121 218,385 148,044 (70,341)
Cottmntnity Dev Block Grant Fund 1,071,920 656,626 (415,294) 1,120,250 707,542 (412,708)
ML King Community Center Fund 164,610 167,757 3,147 118,217 110,666 (7,551)
Ambulance Services Fund 6,671,258 6,870,810 199,552 6,746,787 6,585,984 (160,803)
City View Cemetery Fund 209,310 217,875 8,565 246,212 244,596 (1,616)
Blvd Perpetual Maintenance Fund 364,680 196,118 (168,562) 170,000 170,000
Athletic Program Fund 139,450 126,766 (12,684) 133,998 107,818 (26,180)
Golf Course 1,904,500 1,609,307 (295,193) 1,826,663 1,769,789 (56,874)
Senior Center Fund 282,384 277,322 (5,062) 288,663 291,411 2,748
Multi-Modal Fund 122,100 160,777 38,677 58,452 45,491 (12,961)
School Impact Fees 2,400,000 2,326,942 (73,058) 2,400,000 2,333,355 (66,645)
Rivers hore Trail&Marina Fund 16,850 63,176 46,326 11,602 10,471 (1,131)
Special Lodging Assess Fund 335,150 328,378 (6,772) 335,150 328,243 (6,907)
Litter Abatement Fund 17,500 17,616 116 16,000 8,705 (7,295)
Revolving Abatement Fund 156,800 261,614 104,814 275,317 296,240 20,923
TRAC Develop&Operating Fund 262,300 326,778 64,478 255,000 122,003 (132,997)
Park Development Fund 207,500 495,457 287,957 546,500 924,619 378,119
Capital Improvement Fund 1,247,500 2,315,675 1,068,175 3,987,500 1,422,673 (2,564,827)
Economic Development Fund 1,226,000 1,441,549 215,549 2,102,327 1,327,737 (774,590)
Stadium/Convention Ctr Fund 293,800 356,111 62,311 293,517 182,511 (111,006)
Total 21,035,052 22,419,212 1,384,160 24,425,355 20,386,781 (4,038,574)
Debt Service bunds
LID Loans 73,927 166,612 92,685 172,398 18,063 (154,335)
LID Bonds 27,045 61,338 34,293 52,800 27,250 (25,550)
LID Guarantee 500 2,312 1,812 300,000 300,000
Total 101,472 230,262 128,790 525,198 345,313 (179,885)
Permanent Funk
Cemetery Perpetual Care 15,100 18,745 3,645 -
Total $ 15,100 $ 18,745 $ 3,645 $ $ - $
109
City of Pasco, 'Washington 2017 Comprehensive AnnuaCginanciaCPeport
Nonmajor Proprietary Funds
Enterprise Funds
Enterprise funds are used to account for thefinancing 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.
110
City of Pasco, 'Washington 2017 Comprehensive AnnuaCginanciaCReport
Combining Statement of Net Position
Nonmajor Internal Services Fund
December 31,2017
Governmental Activities Business-Type Activities
Medicall
Equipment Equipment Dental Equipment Equipment Total
Rental Rental Insurance Central Rental Rental Internal
Operations Replacement Fund Stores Operations Replacement Service
ASSETS
Current assets:
Current cash&cash equivalents $ 528,987 $ 2,688,530 $ 1,043,942 $ 13,080 $ 145,558 $ 2,061,274 $ 6,481,371
Restricted cash-IBNR 1,284,712 1,284,712
Investments 3,404,945 1,008,145 1,512,564 5,925,654
Total current assets 528,987 6,093,475 3,336,799 13,080 145,558 3,573,838 13,691,737
Noncurrent assets:
Interfund loans 14,567 - 14,567
Restricted investments-IBNR - 402,958 402,958
Construct work in process 1,274,589 - 1,274,589
Machinery and equipment 4,609,424 - 1,471,761 6,081,185
Total noncurrent assets - 5,898,580 402,958 1,471,761 7,773,299
Total assets 528,987 11,992,055 3,739,757 13,080 145,558 5,045,599 21,465,036
DEFERRED OUTFLOWS
Pension related 25,394 - 25,394
LIABILITIES
Current liabilities:
Accounts payable 69,628 38,170 (232,333) 30,251 (94,284)
113NR payable from restricted assets 1,687,670 1,687,670
Total current liabilities 69,628 38,170 1,455,337 30,251 1,593,386
Noncurrent liabilities:
Pension liability 147,074 - 147,074
Total noncurrent liabilkies 147,074 - - 147,074
Total liabilities 216,702 38,170 1,455,337 30,251 1,740,460
DEFERRED INFLOWS
Pension related 25,226 - 25,226
NET POSITION
Net investment in capital assets 5,884,013 1,471,761 7,355,774
Unrestricted 312,453 6,069,872 2,284,420 13,080 115,307 3,573,838 12,368,970
Total net position $ 312,453 $ 11,953,885 S 2,284,420 $ 13,080 $ 115,307 $ 5,045,599 $ 19,724,744
111
City of Pasco, 'Washington 2017 Comprehensive .AnnualFinancial Report
Combining Statement of Revenues,Expenses,and Changes in Net Position
Nonmajor Internal Service Funds
For the Year Ended December 31,2017
Governmental Activities Business-Type Activities
Equipment Equipment MedicaUDental Equipment Equipment Total
Rental Rental Insurance Central Rental Rental Internal
Operations Replacement Fund Stores Operations Replacement Service
OPERATING REVENUES
Charges for goods and services $ 1,106,028 $ 2,850,783 $ 6,489,249 $ 468,693 $ 535,480 $11,450,233
Total operating revenues 1,106,028 2,850,783 6,489,249 468,693 535,480 11,450,233
OPERATING EXPENSES
Depreciation 721,004 - 273,444 994,448
Salaries&wages 201,925 166,554 368,479
Personnel benefits 60,766 67,381 128,147
Supplies 591,638 83,432 - 208,801 883,871
Services 220,105 5,346,917 44,857 5,611,879
Total operating expenses 1,074,434 804,436 5,346,917 487,593 273,444 7,986,824
OPERATING INCOME(LOSS) 31,594 2,046,347 1,142,332 - (18,900) 262,036 3,463,409
NONOPERATING REVENUES(EXPENSES)
Investment income 5,013 48,154 29,737 124 1,380 30,872 115,280
Investment gain(loss) 25,788 8,145 9,585 43,518
Miscellaneous 5,135 119,659 3,156 127,950
Gain(Loss)ondisposalofcapitalassets (17,105) - 2,470 (14,635)
Total nonoperating revenues 10,148 56,837 157,541 124 4,536 42,927 272,113
Income(loss)before contributions and
transfers 41,742 2,103,184 1,299,873 124 (14,364) 304,963 3,735,522
Changes in net position 41,742 2,103,184 1,299,873 124 (14,364) 304,963 3,735,522
Net position-begirming 270,711 9,850,701 984,547 12,956 129,671 4,740,636 15,989,222
Netposition-ending $ 312,453 $11,953,885 $ 2,284,420 $ 13,080 $ 115,307 $ 5,045,599 19,724,744
112
City of Pasco, 'Washington 2017 Comprehensive AnnuaCginanciaCReport
Combining Statement of Cash Flows
Nonmajor Internal Service Funds
For the Year Ended December 31,2017
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 $ 1,140,647 $ 2,850,783 $ 6,489,249 $ $ 468,693 $ 535,480 $11,484,852
Payments to employees (286,710) - - (233,935) - (520,645)
Payments to suppliers (785,134) (45,262) (5,574,148) (245,692) (56,953) (6,707,189)
Net cash provided by operating activities 68,803 2,805,521 915,101 (10,934) 478,527 4,257,018
CASH FLOWS FROM NON-CAPITAL
FINANCING ACTIVITIES
Miscellaneous 5,135 119,659 3,156 127,950
5,135 - 119,659 3,156 - 127,950
CASH FLOW FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:
Proceeds from disposal of assets 25,788 31,011 56,799
Acquisition of capital assets (1,918,162) (21,127) (1,939,289)
Net cash used in capital activities - (1,892,374) - - 9,884 (1,882,490)
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment sales and income 5,013 48,154 1,032,113 124 1,380 30,872 1,117,656
Investment purchases - (23,362) (1,008,145) - (7,892) (1,039,399)
Interfund loans - 525,938 525,938
Net cash provided from investing activities 5,013 550,730 23,968 124 1,380 22,980 604,195
Net increase in cash and cash equivalents 78,951 1,463,877 1,058,728 124 (6,398) 511,391 3,106,673
Begumang cash and cash equivalents 450,036 1,224,653 1,269,926 12,956 151,956 1,549,883 4,659,410
Ending cash and cash equivalents $ 528,987 $ 2,688,530 $ 2,328,654 $ 13,080 $ 145,558 $ 2,061,274 $ 7,766,083
CASH PROVIDED BY OPERATING
ACTIVITIES:
Net operating income(loss) $ 31,594 $ 2,046,347 $ 1,142,332 $ - $ (18,900) $ 262,036 $ 3,463,409
ADJUSTMENTS TO RECONCILE OPERATING
INCOME TO NET CASH PROVIDED BY
OPERATING ACTIVITIES
Depreciation - 721,004 - 273,444 994,448
(hicrease)/decrease in customer receivables 34,619 34,619
Increase(decrease)in accounts payable 26,609 38,170 (227,231) 7,966 (56,953) (211,439)
(Increase)decrease in pension deferred outflow 14,644 14,644
Increase(decrease)in pension obligation (58,380) (58,380)
Increase(decrease)in pension deferred inflow 19,717 19,717
Net cash provided by operating activities $ 68,803 $ 2,805,521 $ 915,101 $ $ (10,934) $ 478,527 $ 4,257,018
113
City of Pasco, 'Washington 2017 Comprehensive AnnuaCginancial Report
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.
114
City of Pasco, 'Washington 2017 Comprehensive AnnuaCginanciaCReport
Combining Statement of Net Position
Fiduciary Funds
December 31, 2017
Trust Funds
Total
Firemen's Other Pension and Other
Firemen's Post-Employment Post-Employment
Pension Benefits Benefits
ASSETS
Cash $ 438,280 $ 37,042 $ 475,322
Receivables
Interfimd Loan 27,346 27,346
Investments at fair market value:
Federal agency 24,889 24,889
Mutual funds 2,271,878 2,986,331 5,258,209
Total assets 2,762,393 3,023,373 5,785,766
LIABILITIES
Total liabilities - - -
NET POSITION
Held in trust for pension benefits
and other purposes $ 2,762,393 $ 3,023,373 $ 5,785,766
115
City of Pasco, 'Washington 2017 Comprehensive .AnnuaCTinancial Peport
Combining Statement of Assets and Liabilities
Fiduciary Funds (continued)
December 31, 2017
Agency Funds
Public Animal
Flexible Facility Control Payroll Total
Spending District Authority Clearing Agency
ASSETS
Cash&cash equivalents $ 35,185 $ 57,407 $ 54,883 $ 496,299 $ 643,774
Total assets 35,185 57,407 54,883 496,299 643,774
LIABILITIES
Accounts payable 35,185 496,299 531,484
Due to other governments 57,407 54,883 112,290
Total liabilities $ 35,185 $ 57,407 $ 54,883 $ 496,299 $ 643,774
116
City of Pasco, 'Washington 2017 Comprehensive .AnnuaCTinancial Report
Combining Statement of Changes in Net Position
Fiduciary Funds
For The Year Ended December 31, 2017
Trust Funds
Total
Firemen's Other Pension and Other
Firemen's Post-Employment Post-Employment
Pension Benefits Benefits
ADDITIONS
Taxes $ 63,504 $ 63,504
Investment earnings
Interest 347,898 454,272 802,170
Dividends 36,220 53,582 89,802
Total additions 447,622 507,854 955,476
DEDUCTIONS
Pension benefits 120,503 120,503
Medical premiums 94,835 94,835
Services 5,870 54,051 59,921
Total deductions 126,373 148,886 275,259
Change in net assets 321,249 358,968 680,217
Net position-beginning 2,441,144 2,664,405 5,105,549
Net position-ending $ 2,762,393 $ 3,023,373 $ 5,785,766
117
City of Pasco, 'Washington 2017 Comprehensive .AnnuaCTinancial Peport
Combining Statement of Changes in Assets and Liabilities
Agency Funds
For the Year Ended December 31, 2017
Flexible Spending Accounts Pasco Public Facility District
Balance Balance Balance Balance
January 1 Additions Deletions December 31 January 1 Additions Deletions December 31
ASSETS
Cash&cash equivalents $ 7,925 $ 173,041 $ 145,781 $ 35,185 $ 42,829 $ 526,063 $ 511,485 $ 57,407
Total assets 7,925 173,041 145,781 35,185 42,829 526,063 511,485 57,407
LIABILITIES
Accounts payable 7,925 178,905 151,645 35,185 -
Due to other governments - 42,829 14,578 57,407
Total liabilities $ 7,925 $ 178,905 $ 151,645 $ 35,185 $ 42,829 $ 14,578 $ - $ 57,407
118
City of Pasco, 'Washington 2017 Comprehensive AnnuaCginanciaCReport
Animal Control Authority Payroll Clearing
Balance Balance Balance Balance
January 1 Additions Deletions December 31 January 1 Additions Deletions December 31
$ 41,748 $ 36,095 $ 22,960 $ 54,883 $ 370,307 $33,536,638 $33,410,646 $ 496,299
41,748 36,095 22,960 54,883 370,307 33,536,638 33,410,646 496,299
- 370,307 37,061,531 36,935,539 496,299
41,748 36,095 22,960 54,883
$ 41,748 $ 36,095 $ 22,960 $ 54,883 $ 370,307 $37,061,531 $ 36,935,539 $ 496,299
119
City of Pasco, -Washington 2017 Comprehensive Annual Financial Report
Combining Statement of Assets and Liabilities
Fiduciary Funds (continued)
December 31, 2017
Total Agency Funds
Balance Balance
January 1 Additions Deletions December 31
ASSETS
Cash& Cash Equivalents $ 462,809 $ 34,271,837 $ 34,090,872 $ 643,774
Total Assets 462,809 34,271,837 34,090,872 643,774
LIABILITIES
Accounts payable 378,232 37,240,436 37,087,184 531,484
Due to Other Governments 84,577 50,673 22,960 112,290
Total Liabilities $ 462,809 $ 37,291,109 $ 37,110,144 $ 643,774
120
City of Pasco, 'Washington 2017 Comprehensive AnnuaCginanciaCReport
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 122
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 127
These schedules contain information to help the reader assess the government's most significant revenue
sources.
Debt Capacity 131
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 135
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 138
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.
121
City of Pasco, 'Washington 2017 Comprehensive AnnuaC f'inanciaCReport
Net Position by Component
Last Ten Fiscal Years
(accrual basis ofaccounting)
(amounts expressedin thousands)
Fiscal Year Ended December 31
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Governmental activities
Net investment in capital assets $85,294 $97,602 $122,343 $141,497 $163,582 $188,996 $185,424 $198,278 $212,712 $217,060
Restricted for:
Restricted* 4,005 3,551 383 400
Cemetery(nonexpendable) 418 434 455 468 486 505
Prepaids 141
Program,grant,donations 86 35 44
Contested tax&drug forefits 228 57
Bicentennial celebration 6
Streets and boulevards 6,489 7,205 7,150 6,204 6,986 7,996
Litter and housing abatement 289 329 369 354 562 416
Park development 1,739 1,821 1,994 2,135 2,152 1,723
Culture and recreation 133 (4)
Capital improvement 2,259 2,976 3,733 4,802 5,927 6,980
Economic development 221 3 49 108 114 64
General obligation debt 337 334 349 635 371
Special assessment debt 240 48 64 6,240
Committed for:
Landfill* 407
Special revenue funds* 4,408
Construction projects* 557
Unrestricted 23,750 24,111 28,241 30,166 14,616 11,883 15,934 10,433 16,576 6,301
Total governmental activities net position 113,049 125,264 150,967 172,063 190,196 214,390 215,719 229,108 246,185 246,828
Business-type activities
Net investment capital assets 109,736 136,995 124,771 129,532 130,321 129,664 137,088 139,166 141,470 141,373
Restricted 747 777 - - 10,841
Unrestricted 5,712 12,618 11,400 12,367 14,719 19,115 4,274 15,736 19,860 26,339
Total busines s-type activities net position 116,195 150,390 136,171 141,899 145,040 148,779 152,203 154,902 161,330 167,712
Primary government
Net investment in capital assets 195,030 211,596 247,114 271,029 293,903 318,660 322,512 337,444 354,182 358,433
Restricted 4,752 4,328 383 400 11,998 13,511 14,361 20,397 16,897 18,095
Conartitted* - - - - - - - - - 5,372
Unrestricted 29,462 36,729 39,641 42,533 29,335 30,998 20,208 26,169 36,436 32,640
Total primary government net assets $229,244 $252,653 $287,138 $313,962 $335236 $363,169 $357,081 $384,010 $407,515 $414,540
*Break out not available prior to 2012
**Break out not reported prior to 2017
122
City of Pasco, 'Washington 2017 Comprehensive AnnuaCg'inanciaCReport
Changes in Net Position
Last Ten Fiscal Years
(accrual basis of accounting)
(amounts expres sed in thousands)
Fiscal Year Fnded December 31
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Expenses
Governmental activities:
General government $10,410 $12,059 $6,921 $6,517 $6,730 $7,060 $8,092 $8,238 $8,716 $7,594
Public safety 18,296 18,743 19,419 19,834 20,498 22,491 21,624 24,917 29,374 30,661
Physical environment 3,532 3,050 1,900 2,406 2,992
Transportation 4,331 5,137 7,831 9,836 9,913 14,097 16,728 16,374 16,628 17,893
Economic environment 1,199 1,385 797 1,041 2,386 4,456 4,710 5,137 5,618 6,894
Health and human services 57 59 1,652 251 421
Culture and recreation 5,983 6,212 4,724 7,695 8,224 8,003 7,941 8,115 8,929 9,168
Interest on long term debt 587 413 512 517 315 265 210 444 504 438
Total governmental activities expenses 44,395 47,058 43,756 48,097 51,479 56,372 59,305 63,225 69,769 72,648
Business-type activities
Water 5,990 6,029 6,538 6,845 6,748 7,780 8,238 9,099 9,476 10,172
Irrigation 1,015 1,009 1,045 1,038 1,099 1,226 1,546 1,779 1,646 1,993
Sewer 6,316 6,826 6,944 7,922 7,435 7,223 7,902 8,175 8,571 8,986
Water process reuse 1,569 1,558 1,444 1,501 1,185 1,542 1,848 2,524 3,173 2,590
Storm water 607 735 791 959 1,028 1,165 1,288 1,168 1,531 1,303
Total business-type activities expenses 15,497 16,157 16,762 18,265 17,495 18,936 20,822 22,745 24,397 25,044
Total primary government expenses 59,892 63,215 60,518 66,362 68,974 75,308 80,127 85,970 94,166 97,692
Proeramrevenues
Governmental Activities:
Charges for Services
General government 6,667 8,982 2,134 1,981 2,575 4,578 5,083 5,283 4,741 4,759
Public safety 2,626 3,006 3,684 3,893 4,415 4,398 5,144 5,177 6,310 1
Physical environment 836 1,282 499 1,331 1,406
Transportation 476 623 1,504 1,795 310 3,507 4,203 3,672 3,771 2,609
National&economic environment 1,135 1,431 17 1,459 2,734 3,361 3,172 3,570 6,022 6,096
Health and human services 1,851 30 14
Culture and recreation 445 480 604 2,161 1,838 2,471 2,334 2,502 2,556 2,905
Operating grants and contributions 376 504 1,448 1,763 1,043 639 1,702 1,770 1,321 1,041
Capital grants and contributions 14,753 13,283 25,488 25,117 16,144 30,631 4,302 23,929 25,053 14,189
Total governmental activities programrevenues 27,314 29,591 37,229 39,530 30,479 49,585 25,940 45,903 49,774 31,600
Business-type activities
Charges for services 17,232 18,319 18,148 17,774 18,044 17,977 20,002 20,979 23,603 25,816
Operating grants and contributions 0 0 0 370 412 42 23 27 11 69
Capital grants and contributions 3,254 3,061 4,654 5,671 5,586 4,214 3,344 6,090 7,189 5,267
Total business-type activities progmmrevenues 20,486 21,380 22,802 23,815 24,042 22,233 23,369 27,096 30,803 31,152
Total primary government program revenues $47,800 $50,971 $60,031 $63,345 $54,521 $71,818 $49,309 $72,999 $80,577 $62,752
123
City of Pasco, 'Washington 2017 Comprehensive AnnuaCg'inanciaCReport
Changes in Net Position
Last Ten Fiscal Years(continued)
(accrual basis ofaccounting)
(amounts expres sed in thousands)
Fiscal Year Ended December 31
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Net(expenses)/revenues
Governmental activities ($17,078) ($17,467) ($6,527) ($8,567) ($21,000) ($6,787) ($33,365) ($17,322) ($19,995) ($41,048)
Business-type activities 4,504 5,223 6,040 5,550 6,547 3,297 2,547 4,351 6,406 6,108
Total primary government (12,574) (12,244) (48 (3,017) (14,453) (3,490) (30,818) (12,971) (13,589) (34,940)
General revenues andother changes in net assets
Governmental Activities:
Taxes
Property taxes 6,055 6,276 6,080 6,847 6,658 7,149 7,069 7,255 7,928 7,963
Sales and use taxes 8,843 8,000 8,245 9,403 10,284 11,472 12,695 13,646 14,887 15,818
Occupational utility taxes 8,689 8,924 8,917 8,914 8,843 8,894 9,592 10,268 9,028 10,512
Other taxes 4,655 4,686 1,738 1,838 2,046 2,117 2,290 2,443 2,884 3,487
Intergovernmental* 1,663 2,599 3,161 1,566 1,581 1,741 1,962 3,609
hivestment and miscellaneous 987 852 1,147 691 1,486 137 62 252 300 485
Transfers 613 566 (149) 3,439 (355) (150) (65)
Total governmental activities 29,842 29,304 27,641 30,292 35,917 30,980 33,139 35,605 36,989 41,809
Business-type activities
Investment and miscellaneous 425 399 1,062 177 33 88 29 103 145 209
Transfers (613) (566) 149 (3,439) 355 150 65
Total business-type activities (188) (167) 1,211 177 (3,406) 443 179 103 145 274
Total primary government 29,654 29,137 28,852 30,469 32,511 31,423 33,318 35,708 37,134 42,083
Changes in net position
Governmental activities 12,764 11,837 21,114 21,725 14,917 24,193 (226) 18,283 16,994 761
Business-type activities 4,316 5,056 7,251 5,727 3,141 3,740 2,726 4,454 6,551 6,382
Total primary government $17,080 $16,893 $28,365 $27,452 $18,058 $27,933 $2,500 $22,737 $23,545 $7,143
*Included with"Other taxes"until 2010.
Governmental Activities Tax Revenues by Source
Last Ten Fiscal Years
(accrual psis of accounting)
(amounts expressed in thousands)
Fis cal Year
Ended Property Sales and Excise and Other
December 31 Taxes Use Taxes B&O Taxes Taxes Total Takes
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
2017 7,963 15,818 10,512 3,487 37,780
Source:
Statement of activities
124
City of Pasco, 'Washington 2017 Comprehensive AnnuaC f'inanciaCReport
Fund Balance of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
(amounts expressedin thousands)
Fiscal Year Faded December 31
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
General fund
Assigned $ $ - $ $ $ 3,208 $ $ $ - $ - $ - $
Restricted
Prepaids 136
Program,grant,donation 86 35 44
Bi-centennial celebration 6
Law Enforcement 228 57
Debt Repayment/guarantee 4,876
Committed
Landfill claim 401 405 406 407 407 407
Assigned
Subsequent year's budget appropriation 2,872 806 1,858
Unassigned 8,050 6,264 5,612 7,978 11,920 12,333 13,118
Reserved* 1,517 692 1,898
Unreserved* 9,088 10,270 7,917 9,414
Total general fund $ 10,605 $ 10,962 $ 9,815 $ 9,414 $11,258 $ 9,543 $ 6,245 $ 9,383 $ 17,289 $ 14,633 $ 13,569
All other governmental funds
Nonspendable
Cemetery permanent fund $ - $ - $ - $ - $ 400 $ 418 $ 434 $ 455 $ 467 $ 486 $ 505
Restricted 9,496 5
Street and boulevard** 6,489 7,205 7,150 6,204 6,986 7,997
litter&housing abatement** 288 329 369 354 562 416
Park development** 1,739 1,822 1,995 2,135 2,152 1,723
Culture and recreation 132 (4)
Capital improvements** 2,260 2,976 3,733 4,802 5,927 6,980
Economic development** 221 3 49 108 115 63
Debt repayment/guarantee 1,364 635 371
General obligation debt** 337 334 349
Special assessment debt** 240 47 64
Comas fitted 5,375
Special revenue funds* 1,117 2,365 2,031 3,017 3,770 4,408
Construction projects* 861 199 33 238 226
Debt guarantee* 1,033 924 926
Unassigned (178) (1,254) (1,188) (442) (400) (279) (130)
Reserved* 3,910 3,890 2,798 383
Unreserved,reported in:
Special revenue funds 8,260 9,872 9,010 10,846
Debt service funds 773 921 1,307 1,095
Capital project funds 224) (1,750) (655) 833
Total all other governmental funds $ 12,719 $ 12,933 $ 12,460 $13,157 $15,093 $13,749 $15,582 $ 16,717 $ 18,289 $ 20,580 $ 22,329
*Prior to GASB 54
*'*Break out not available prior to 2012
125
City of Pasco, 'Washington 2017 Comprehensive AnnuaCg'inanciaCReport
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
(amounts expressed in thousands)
Fiscal Year Fnded December 31
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Revenue
Taxes $ 25,716 $ 25,339 $ 24,960 $ 26,832 $ 28,017 $ 29,602 $ 31,756 $ 33,587 $ 34,727 $ 37,781
Licenses andperrnits 1,616 1,860 1,966 1,874 1,862 1,777 1,983 3,389 2,516 2,576
Intergovernmental revenue 5,293 4,041 7,929 8,252 4,901 5,785 6,868 5,857 5,280 7,951
Charges for services 4,771 5,285 5,502 7,475 9,509 11,486 12,562 11,598 15,538 18,438
Fines and forfeitures 1,017 1,063 944 955 891 985 961 1,209 984 960
Investment and miscellaneous 2,310 2,963 2,930 2,547 2,767 2,559 3,146 2,264 2,956 2,792
Total revenues 40,723 40,551 44,231 47,935 47,947 52,194 57,276 57,904 62,001 70,498
Expenditures
Current:
General government 5,341 5,847 6,547 6,087 6,381 6,705 7,720 7,940 8,567 8,839
Public safety 17,711 18,418 18,820 18,780 19,990 22,365 22,110 25,269 27,205 32,253
Physical environment 2,078 2,066 1,855 2,288 2,846
Transportation 1,536 1,566 2,149 2,447 2,890 3,897 6,344 5,273 4,147 4,449
Natural and economic enviroment 671 944 54 872 2,137 4,287 4,568 4,989 5,446 6,786
Health and human services 57 59 1,313 210 376
Culture and recreation 4,279 4,670 4,757 6,402 6,807 6,978 7,153 7,357 8,131 8,763
Capital outlay* 7,345 7,718
General government 104 154 193 1,426 506 166 206 268
Public safety 124 35 648 2,726 258 3,274 5,606 1,053
Physical environment 868 7
Transportation 3,441 3,276 3,141 2,994 2,852 2,203 995 4,152
Natural and economic enviroment 419 657 1,527 254 1,351 518 (23)
Culture and recreation 2,633 369 185 225 471 845 1,352
Debt service:
Principal 1,108 1,249 1,178 1,575 3,308 1,194 675 581 1,291 807
Interest 587 413 512 517 316 265 210 445 504 438
Total expenditures 40,713 42,950 44,774 43,669 50,752 53,091 53,972 57,968 63,461 69,137
Excess ofrevenues
over(under)expenditures 10 (2,399) (543) 4,266 (2,805) (897) 3,304 (64) (1,460) 1,361
Otherfnancine sources(uses)
Disposition ofcapital assets 7 227 700 1,010 67
Proceeds ofgeneral debt 795 4,533 8,795
Debt proceeds-Premiums 308
Debt refinanced (4,280)
Insurance recoveries 251 (1)
Transferin 5,094 5,432 6,559 5,229 6,434 7,029 3,800 7,352 10,228 6,466
Transfer out (4,542) (4,527) (6,708) (5,229) (6,689) (7,596) (4,343) (7,613) (10,228) (6,531)
Total other financing sources(uses) 559 1,156 645 253 (255) (567) (316) 9,542 1,010 2
Net change in fund balances $ 569 $ (1,243) $ 102 $ 4,519 $ (3,060) _L_(I,464) $ 2,988 $ 9,478 $ (450) $ 1,363
Debt services as percentage
ofnoncapitalexpenditures 5.1% 4.70/,) 4.5% 5.4% 7.81/,) 3.0% 1.8% 1.9% 3.01% 1.9%
*Breakout not available prior to 2010
126
City of Pasco, 'Washington 2017 Comprehensive AnnuaCginanciaCReport
Assessed Value of Taxable Property
Last Ten Fiscal Years
(in thousands of dollars)
Real Property
Fiscal Year Total Taxable Total
Ended Residential Commercial Other Assessed Direct Tax
December 31 Property Property Property Valuation Rate
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
2017 3,158,813 1,198,038 229,222 4,586,073 1.88
Source: Franklin County Assessor
B&O Taxes by Type
Last Ten Fiscal Years
(in thousands of dollars)
(Gross Revenues times 81/2% Tax Rate)
Fiscal Year
Ended
December 31 Admissions Cable TV Solid Waste Water Irrigation* Sewer Storm** Reuse** Gas Telephone Electricity Total
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
2017 122 552 764 914 138 842 134 295 794 1,361 4,707 10,623
*Previously included in Water
**Previously included in Sewer
127
City of Pasco, 'Washington 2017 Comprehensive AnnuaCg'inanciaCReport
Property Tax Rates
Direct and Overlapping 1 Governments
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
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
2017 1.880 0.000 1.880 1.327 0.099 1.426 4.271 2.252 6.523 0.295 10.124
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.
Taxable Retail Sales
Last Ten Fiscal Years
Fiscal Year
Ended
December 31 City of Pasco 1 Franklin County 1
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
2017 1,333,597,814 1,534,638,802
Source: Washington State Department of Revenue
128
City of Pasco, 'Washington 2017 Comprehensive AnnuaCg'inanciaCReport
Principal Property Taxpayers
Current Year and Ten Years Prior
Fiscal Year Ended December 31
(amounts expressed in thousands)
2017 2008
Taxable oftotal Taxable oftotal
assessed taxable assessed taxable
Taxpayer value Rank assessed value Rank assessed
Kenyon Zero Storage $37,740 1 0.89%
Autowne Parts hie $37,654 2 0.89% 31,316 1 1.090/0
Syngenta Seeds LLC $32,328 3 0.76%
Pasco Processing LLC $30,580 4 0.72%
Grimmway Enterprises Inc $26,210 5 0.62%
Twin City Foods,hie. $18,947 6 0.45% 22,098 2 0.77%
Columbia Villas LLC $18,621 7 0.44% 16,432 3 0.57%
Frank Tiegs LLC $17,355 8 0.41% 16,085 4 0.56%
Broadmoor LLC $17,083 9 0.40%
Simplot-RDO LLC $17,069 10 0.40% 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%
$253,587 5.98% $163,438 5.69%
Source: Franklin County Assessor's Office
Principal B&O Taxpayers
Current Year and Six Years Prior
Fiscal Year Ended December 31
(amounts expressed in thousands)
2017 2010
Percentage of Percentage of
Total Tax Total Tax
Taxpayer Tax Revenue Rank Revenue Tax Revenue Rank Revenue
Company A $4,671 1 0.439706298 $3,356 1 37.64%
Company B 774 2 0.072860774 741 2 8.31%
Company D 758 3 0.071354608 515 4 5.78%
Company E 484 4 0.045561517 383 5 4.30%
Company F 469 5 0.044149487 377 6 4.23%
Company C 355 6 0.033418055 698 3 7.83%
Company G 340 7 0.032006025 368 7 4.13%
Company J 118 8 0.011107973 136 10 1.53%
Company O 110 9 0.010354890
Company N 87 10 0.008189777
Company P 147 9 1.65%
Company H 165 8 1.85%
$8,166 76.87% $7,198 80.75%
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
129
City of Pasco, 'Washington 2017 Comprehensive AnnuaCg'inanciaCReport
Top Ten Industries that Generate Sales Tax
Current Year and ten Years Prior
Fiscal Year Ended December 31
2008 2017
Sales %of Sales %of
Tax Total Tax Total
Industries Paid Rank Sales Tax Paid Rank Sales Tax
Motor Vehicle and Parts Dealers $1,249,062 1 15.47% $3,927,890 1 27.96%
Merchant Wholesale,Durable Goods 802,995 2 9.95% 1,062,526 2 7.56%
Construction of Buildings 779,667 3 9.66% 995,868 3 7.09%
Specialty Trade Contractors 515,638 4 6.39% 940,391 4 6.69%
Food Services,Drinking Places 410,259 6 5.08% 899,867 5 6.40%
General Merchandise Stores 481,991 5 5.97% 722,292 6 5.14%
Building Material and Garden 353,684 8 4.38% 609,767 7 4.34%
Rental and Leasing Services 0.00% 337,214 8 2.40%
Telecommunications 0.00% 334,972 9 2.38%
Miscellaneous Store Retailers 409,489 7 5.07% 0.00%
Repair and Maintenance 333,228 9 4.13% 0.00%
Other 2,736,782 10 33.90% 4,218,844 10 30.04%
Total $8,072,795 66.10% $14,049,631 69.96%
Source:Washington State Department of Revenue
Property Tax Uiies 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 YearFnded levy for Percentage Subsequent Percentage
December 31 fiscal year Amount of levy years 1 Amount of levy
2008 6,061 5,887 97.1% 158 6,045 99.7%
2009 5,738 5,579 97.2% 160 5,739 100.00/0
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 6,847 100.00/0
2013 7,011 6,833 97.5% 163 6,996 99.8%
2014 7,064 6,933 98.1% 74 7,007 99.2%
2015 7,287 7,169 98.4% 77 7,246 99.4%
2016 7,748 7,627 98.4% 67 7,694 99.3%
2017 7,949 7,942 99.9% 0 7,942 99.90/0
Source: Franklin County Treasurer's Office Tax Rolls
t County provides four prior years and combines five years or more together.
130
City of Pasco, Washington 2017 Comprehensive AnnuaCginanciaCReport
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
(amounts expressed in thousands,except per capita amount)
Governmental Activities Business-type Activities
Fiscal Year General External Percentage of
Ended Obligation Special Loans& Water/Sewer Other Loans Total Primary Per Capita Per
December 31 Bonds Assessments Notes Bonds Payable' Government Income2 Capita
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 1.9% 595
2015 11,580 160 593 36,690 6,389 55,412 2.7% 812
2016 10,430 45 12 38,438 508 49,433 2.3% 701
2017 9,660 20 - 44,785 6,300 60,765 4.4% 848
Note:Details regarding the City's outstanding debt can be found in Schedule 9 and the Debt and Liability Notes in the notes to the financial statements.
Resources:
'Other Loans Payble include a new Public Works Trust Fund Loan-Secure Access Washington
2Per Capita Income provided by AWC Open Portal City Snapshot
3 Washington State Office of Financial Management,April 1 Population by City
Ratios of General Bonded Debt Outstanding
and Bonded per Capita
Last Ten Fiscal Years
(amounts expressedin 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 property capita
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% 148
2016 10,430 - 10,430 0.2996% 148
2017 9,660 - 9,660 0.2588% 135
Note:Details regarding the City's outstanding debt can be found in the notes and schedules
to the financial statements.
1 Outstanding General Obligation bonds are paid by the General Fund.
2 See schedule of assessed value taxable property for property tax values.
131
City of Pasco, 'Washington 2017 Comprehensive AnnuaCg'inanciaCReport
Legal Debt Margin
Last Ten Fiscal Years
(amounts expressed in thousands)
Fiscal Year Ended December 31
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Debt limit $72,012 $73,370 $72,923 $75,213 $80,378 $88,541 $88,576 $91,985 $98,436 $ 105,699
Total net debt applicable to limit 13,252 12,501 11,954 11,670 4,966 4,053 4,063 12,174 10,442 9,660
Legal debt margin $58,760 $60,869 $60,969 $63,543 $75,412 $84,488 $84,513 $79,811 $87,994 $ 96,039
Total net debt applicable to the o 0 0 0 0 0 0 0 0
limit as a percentage of debt limit 18.40% 17.04/ 16.39/ 15.52/0 6.18/0 4.58/0 4.59/0 13.23/0 10.61/0 9.14/0
Legal debt margin calculation for fiscal year 2017
Assesed Valuation for 2017 Collections $ 4,227,978
Non-Voted Debt Capacity Value(1.5%of Assessed Value) 63,420
Less:
Non-Voted GO Bonds Outstanding (9,660)
Other Non-voted General Obligations Outstanding
Remaining capacity without a vote 53,760
Voted and Non-Voted Debt Capacity:(2.5%of Assessed Value) 105,699
Less:
Voted GO Bonds Outstanding -
Non-Voted GO Bonds Outstanding (9,660)
Other Non-voted General Obligations Outstanding -
$ 96,039
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 maxium limit for gemeral 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 2017 Comprehensive AnnuaCginanciaCReport
Direct and Overlapping Governmental Activities Debt
As of December 31,2017
(amounts expressed in thousands)
Direct debt Amount
Voted General Obligation $ -
Councilmanic General Obligation Debt 9,660
Total direct debt 9,660
Overlapping Debt
Estimated Share of
Jurisdiction Outstanding debt Percent applicable Overlapping Debt
Franklin County 26,804 49.53% 13,276
Pasco School District 218,401 60.81% 132,810
Port of Pasco 28,442 49.95% 14,207
Total overlapping debt 160,293
Total direct&overlapping debt 169,953
Governmental activities debt ratios
Assessed valuation-2017(established in November,2016 for the 2017 taxyear) 4,227,978
Population 71
Net direct debt to assessed valuation 0.23%
Net direct debt and overlapping debt to assessed valuation 4.02%
Assessed valuation per capita 59,549
Net direct debt per capita 136
Direct debt and overlapping debt per capita 2,394
Councilmanic debt and other obligations:
G.O.Bonds Outstanding 9,660
Other Non-voted G.O.Outstanding -
$ 9,660
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 2017 Comprehensive AnnuaCginanciaCReport
Waterworks Utility Debt Service Coverage
(Per Bond Offical Statement Deflations)
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Operating Revenues
Water Sales(1) $ 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 $ 8,712,335
Irrigation Sales(1) 678,321 717,653 753,251 874,036 917,076 954,204 1,105,076 1,188,855 1,180,488 1,320,669
Sewer Sales pl 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 7,890,524
Stoamvater Sales(1) 442,174 462,205 401,279 867,801 883,305 972,375 1,054,682 1,305,138 1,386,325 1,441,274
Process Water Reuse Sales(q 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 3,291,049
Other Utility Charges tel 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 2,521,081
Total Operating Revenues 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 25,176,932
Operating&Maintenance Expenses
Salaries&Wages 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 3,461,414
Personnel Benefits 423,330 478,162 892,651 913,062 952,672 1,114,349 1,330,549 1,403,036 2,255,786 1,636,421
Supplies 673,157 479,289 854,667 1,092,728 855,626 1,121,916 1,492,845 1,633,374 1,556,387 1,839,792
Services pl 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 7,565,546
Total Operating Expenses 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 14,503,173
Operating Income 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 10,673,759
Non-Operating Revenue
Interest Income 371,318 359,244 228,784 116,848 39,607 41,009 15,685 28,310 48,536 94,215
Net Farmland Rental(3) 530,307 698,974 375,599 498,413
Total Non-Operating Revenues(4) 901,625 1,058,218 604,383 615,261 39,607 41,009 15,685 28,310 48,536 94,215
Net Revenues 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 10,767,974
Other Sources of Funds
Special Assessment Repayments 575,461 42,005 387,867 283,861 225,506 257,366 123,404 94,284 52,673 99,775
Total Other Sources 575,461 42,005 387,867 283,861 225,506 257,366 123,404 94,284 52,673 99,775
Max Annual Assessment Debt Service 567,968 390,393 289,613 212,489 199,582 203,764 202,852 202,852 94,074 383,389
Net Revenue Available for
NonAssessment Debt Service 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 10,484,360
Non-Assessment Bond Debt Service(5) 1,856,078 2,119,329 2,309,689 2,852,381 2,905,851 2,771,990 3,348,068 4,561,778 3,078,188 3,023,664
Non-Assessment Bond
Debt Service Coverage(6) 5.27 4.55 4.37 2.98 2.98 2.79 2.51 1.68 2.97 3.47
Balance Available for Other Purposes $ 7,921,195 $ 7,524,191 $ 7,783,410 $ 5,652,887 $ 5,746,167 $ 4,954,260 $ 5,056,816 $ 3,083,689 $ 6,068,983 $ 7,460,696
Notes:
Irrigation included with Water 2004-2007;Stomnvater and Process Water Reuse included with Sewer 20042007.
(t)Excludes revenue raised and used to pay interfund city taxes.
(2)Includes one time fees such as new connection,new meter,capital facility,penalties,operating grants,etc.
(s)Farmassets sold in 2011
(4)Excludes noncash capital contributions,gains/losses,capital grants,etc.
(S)Excludes debt for prepaid maturities.
(6)Bond conversant requires coverage ratio of 1.25 times MaxivnrmAnnual Debt Service
134
City of Pasco, 'Washington 2017 Comprehensive AnnuaCg'inanciaCReport
Demographic and Economic Statistics
Last Ten Fiscal Years
Pasco Tri Cities FYanklin County
Kennewick-
Fiscal Year Richand MSA Per capita Total Personal Median Median
Ended Unemployment personal Income (in household household School
December3l Population 1 Population 1 rate 1'4 Population 1 income 1 thousands) incotre 1 age 6 enrollment
2008 54,993 166,933 10.3% 72,230 22,955 1,658,040 44,797 28.20 13,701 2
2009 57,579 172,169 7.26% 75,111 26,342 1,978,574 43,754 27.40 14,437 2
2010 59,781 181,756 7.79% 78,163 Not Available Not Available 53,355 Not Available 15,427 2
2011 61,000 184,755 7.92% 80,500 Not Available Not Available 53,644 28.53 16,143 2
2012 62,670 187,720 8.73% 82,500 30,169 2,488,943 56,221 Not Available 15,994 2
2013 65,600 193,160 9.10% 84,800 30,534 2,589,283 57,196 29.14 16,612 2
2014 67,770 197,560 7.70% 86,600 Not Available Not Available 58,538 29.71 17,016 2
2015 68,240 199,610 6.80% 87,150 33,955 6 Not Available 57,664 29.10 17,353 z
2016 70,560 203,090 6.90% 88,670 32,999 6 Not Available 58,854 29.30 17,780 x
2017 71,680 206,110 5.70% 90,330 Not Available Not Available 57,535 Not Available 19,932 s
State
Fiscal Year Percapita Total Personal Median School
Ended Average wage Unemployment personal Income (in household enrollment
December3l perjob 1'3 rate 1'4 Population 1 income 1'3 thousands) income 1'3 K-12 1
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 57,057 5.70% 7,061,410 51,146 361,162,876 62,108 1,067,998
2016 Not Available 5.40% 7,183,700 53,493 Not Available 65,500 1,080,027
2017 Not Available 4.40% 7,310,300 Not Available Not Available 68,550 1,104,039
SOURCES:
1 State of Washington Office of Financial Management
2 Pasco School District(October Enrollment).Office of Financial management October Headcount Enrollment
3 2013 and 2014 Data is inflation adjusted to 2013 Dollars per State of Washington Office of Financial Management
4 Unemployment Date from the U.S.Bureau of Labor Statistics
5 2017 K12.wa.us/DataAdmin/enrollment
6 United States Census Bureau/Fact Finder.census.gov
135
City of Pasco, 'Washington 2017 Comprehensive AnnuaCg'inanciaCReport
Principal Employers
Current Year&6 Years Ago
Year laded December 31
Tri Cities
2011 2017
Employer Employees Industry Rank FSnployees Industry Rank
Battelle/PNNL 4,485 Research and Development 1 4,500 Research&Development 1
Kadlec Medical Center 2,175 Health Services 6 3,532 Health Services 2
ConAgra(Lamb Weston) 3,057 Food processing 4 3,000 Food processing 3
Bechtel National 2,850 Government 5 2,943 Government 4
Kennewick School District Education 2,336 Education 5
Washington River Protection 1,686 Government 7 2,129 Government 6
Pasco School District Education 2,015 Education 7
Mission Support Alliance 1,478 Government 8 1,902 Government 8
CH2M Hill 3,260 Government 3 1,682 Government 9
Richland School District Education 1,500 Education 10
URS 3,500 Government 2
Washington Closure Hanford 1,370 Government 9
Tyson Foods 1,300 Agriculture Products 10
Energy Northwest Research and Development
Source:TRIDEC
Pranklin County
2011 2017
Ehrployer Employees Industry Rank )5nployees Industry Rank
Pasco School District 2,065 Education 1 2,015 Education 1
Lourdes Health Network 807 Health Care 2 804 Health Care 2
Columbia Basin College 766 Community College 3 786 Community College 3
Coyote Ridge Correction Facility 680 Correction Facility 4
Douglas Fruit 210 Fruit packaging 8 621 Fruit packaging 5
Pasco Processing 350 Food processor-vegetables 5 500 Food processor-vegetables 6
Walmart 356 Retail 7
City of Pasco 305 City Services 6 355 City Services 8
Tri-City Community Health 330 Health Care 9
Lamb Weston 300 Food processor 10
Boise Cascade 571 Paper&packaging products 4
Resers 230 Food processor-potatoes 7
Franklin County 190 County services 9
West Communications 180 Call service 10
Source:TRIDEC
136
City of Pasco, Washington 2017 Comprehensive .AnnuaCTinancial Report
Non-Agriculture Wage and Salary Workers
Employed in Kennewick-Richland-Pasco MSA(roundedto hundreds)")
Last Ten Fiscal Years
Employment Sector 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Goods Producing 12,900 13,200 13,300 13,600 13,400 13,600 1,400 14,600 14,900 16,600
Natural resources&construction 6,500 6,300 6,200 6,500 6,000 6,200 6,300 6,700 7,200 8,600
Manufacturing 6,400 6,900 7,100 7,100 7,400 7,400 7,700 7,900 7,700 8,000
Service providing 80,700 83,900 88,600 90,300 87,900 88,100 89,700 92,700 96,200 99,700
Private services providing 63,700 66,500 70,700 72,200 69,800 69,800 71,100 73,700 76,100 76,000
Trade,transportation,warehousing&utilities 16,700 16,200 16,600 16,700 17,100 17,500 18,100 19,100 20,100 25,800
Retail trade 11,700 11,300 11,400 11,500 11,700 11,800 12,100 12,700 13,900 13,200
Financial activities 3,600 3,400 3,600 3,700 3,900 4,200 3,900 4,000 3,900 3,900
Professional&business services 20,600 21,700 24,500 24,900 21,800 20,800 20,700 21,200 21,200 21,400
Information 1,000 1,000 900 900 900 900 900 900 800 800
Administrative&support services 9,400 10,200 12,000 12,200 10,600 10,500 10,400 10,800 11,700 11,200
Education&health services 10,100 12,300 13,000 13,300 13,400 13,700 14,400 14,800 15,400 15,500
Leisure and hospitality 8,600 8,800 9,000 9,400 9,500 9,600 9,900 10,400 11,200 11,300
Food services 6,300 6,300 6,500 6,800 6,900 7,000 7,300 7,600 8,400 8,500
Government 17,000 17,400 18,000 18,100 18,200 18,300 18,600 19,000 20,100 20,100
Federal&State government 3,700 4,000 4,200 4,200 4,200 4,300 4,300 4,300 4,400 4,400
Local government 13,300 13,400 13,700 13,900 13,900 14,100 14,300 14,700 15,700 15,700
Total Non-Agriculture 93,600 97,100 101,900 103,900 101,300 101,700 103,700 107,300 111,100 112,700
Total Private 76,600 79,700 84,000 85,900 83,100 83,400 85,100 88,300 91,000 92,600
(1)Detail may not add to indicated total due to rounding. Excludes proprietors,agriculture,self-employed,unpaid family,domestic workers and
military. Includes all full and part-time wage and salary workers receiving pay during the period including the 12th of the month by place of work
Information for 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.
137
City of Pasco, 'Washington 2017 Comprehensive AnnuaCg'inanciaCReport
Building Permits
Last Ten Fiscal Years
(amounts expressed in thousands)
Residental2 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
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
2017 474 119,754 2,618 134,519 421 56,276 80 10,034 3,119 200,829
SOURCE-
1 City of Pasco website Building Pemrit History.
Z Includes single family and mobile home
Full-Time Equivalent City Government En4iloyees by Function
Last Ten Fiscal Years
Fiscal Year Ended December 31
Function 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
General government 51 52 46 45 45 45 49 50 52 54
Public safety
Muni Court 14 14 15 16 16 16 15 15 15 15
Police
Officers 66 69 67 67 67 71 71 71 77 77
Civilians 11 11 11 12 12 12 12 12 10 10
Fire
Firefighters and officers 34 34 34 33 33 35 35 39 35 36
Ambulance 15 15 16 18 19 19 19 19 28 36
Physical enviroment
Utilities
Water 20 22 22 22 21 20 20 22 24 22
Sewer 17 18 18 18 17 18 19 21 20 20
Waterprocess reuse 3 3 3 2 2 3 2 2 3 7
Storm water 4 4 4 5 5 4 5 6 6 8
litigation 2 2 2 2 2 2 4 4 5 3
Transportation
Highways and streets
Engineering 14 13 13 13 14 16 17 17 17 17
Maintenance 7 7 7 7 7 6 7 8 10 10
Health and human services 2 2 2 2 3 3 3 3 3 3
Economic enviroment 14 17 15 15 15 15 16 16 16 16
Culture and recreation 17 16 16 16 16 16 16 17 20 20
Total 291 299 291 293 294 301 310 322 341 354
Source:Annual Operating Budget
138
City of Pasco, 'Washington 2017 Comprehensive AnnuaCg'inanciaCReport
Operating Indicators by Function
Last Ten fiscal years
Fiscal year
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Function
Public Safety
Police
Violent crime 166 217 183 202 178 151 183 156 146 143
Nonviolent crime 1,688 1,525 1,475 1,609 1,711 1,628 1,516 1,482 1,689 1,432
Calls for service 54,061 55,672 52,116 49,819 52,027 54,996 52,067 49,575 55,407 57,250
Victims per 1000 population 35 32 29 30 30 27 40 25 38 20
Fire&Emergency Medical Service
Number ofemergency response-FIRE 233 238 215 277 260 279 241 281 243 289
%of total incidents-FIRE* 10% 7% 6% 6% 5% 6% 5% 5%
Number ofemergencyresponse-EMS 3,316 3,005 3,016 3,337 3,474 3,394 3,731 4,011 3,960 4,105
%oftotalincidents-IMS* 90% 79% 79% 79% 79% 79% 77% 75%
Number ofemergencyresponse-OTHER* 614 662 658 730 805 914 1,116
%oftotalincidents-OTHER* 15% 15% 15% 169/6 169/6 18% 20%
Community Development
Number of new Single Family units 398 467 530 483 314 204 219 243 387 468
Number of new MuliFamily units 0 0 8 1 16 0 8 0 0 1
Number ofnew Manufactured units 6 9 14 9 21 16 4 5 2 6
Commercialpermits 274 351 279 317 382 408 341 415 479 501
Construction value(millions) 40.0 60.0 38.6 20.1 56.7 51.0 96.4 84.9 144.4 66.3
Residential permits 1,403 1,499 1,908 1,817 1,507 1,705 1,517 1,724 1,941 2,115
Construction value(millions) 82.9 102.1 119.2 113.3 85.3 73.7 67.4 83.0 110.8 134.5
Physical environment
Highway and streets
Street resurfacing(miles)* 4.6 3.50 3.57 9.63 0.00 0.00
Utilities
Water
Bills processed 189,061 194,614 202,136 207,685 217,911 226,934 227,682 233,858 239,670 242,916
New connections 543 631 666 571 449 328 340 438 568 672
Water meters replaced 78 73 1,842 1,900 2,640 1,431 1,471 1,499 1,117 187
Source:Various City of Pasco departments.
139
City of Pasco, 'Washington 2017 Comprehensive AnnuaCginanciaCReport
City of Pasco
Building Permits
Year ended December 31,2017
Amounts Amounts
No.of Permits in Thousands in Millions
Commercial 421 56,276
Less Multi-Family (1) (4,916)
Industrial 80 10,034
500 61,394 61
Mobile Home 6 390
Plus Commercial Multi Family 1 4,916
Residential 2,109 134,129
2,116 139,435 139
Total 2,616 200,829 200
Single Family:
SFDU 468 119,364
Mobile Home 6 390
474 119,754 120
140
City of Pasco, 'Washington 2017 Comprehensive AnnuaCg'inanciaCReport
Capital Used by Function
Last Ten Fiscal Years
Fiscal Year EndedDecember 31
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
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
Patrol units 37 43 43 50 52 53 58 39 54 61
Fire stations 3 3 3 3 3 3 3 3 3 3
Culture and recreation
Parks* 27 27 27 27 21 24 28
Parks acreage* 274 280 280 320 323 329 375
Swimming pools 3 3 3 3 3 3 2 2 2 2
Physical environment
Streets
Street(miles) 392 475 619 781 821 823 839 843 669 675
Street lights 3,172 3,222 3,290 3,374 3,449 3,469 3,476 3,532 3,413 3,505
Traffic signals* 49 50 50 50 50 50 51
Water
Water trains(miles) 298 302 306 309 313 314 315 323 310 323
Services(accumulated total) 15,508 15,748 16,081 16,305 16,660 16,754 16,783 17,206 17,248 20,079
Fire hydrants 1,966 1,997 2,036 2,069 2,106 2,114 2,138 2,214 2,190 2,724
Maidmurn daily capacity
Million Gallons per Day(M®) 29 29 33 33 30 30 30 32 33 33
Sewer
Sanitary sewer(miles) 216.2 219.8 224 226 264 265 266 269 269.89 275.06
Maximum daily treatment
capacity(MGD) 7.1 7.1 7.1 7.1 7.1 7.1 7.1 6.5 6.5 6.5
Average daily treatment(MCD)* 3.3 3.6 3.9 4.0 4.1 4.3 4.5 5.0 5.2 5.4
Water Process Reuse
Irrigated acres 1,848 1,848 1,848 1,848 1,848 1,848 1,848 1,848 1,832 1,856
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 42 43 45 46 47 48 49 51
Number of catch basins 2,801 2,878 3,089 3,176 3,289 3,322 3,336 3,451 3,508 3,705
Irrigation
Ma)dmumdaily capacity(thousand of 16,100 17,100 17,100 17,100 17,100 17,100 20,760 20,760 20,760 32,760
gallons)
Sources: Various government departments.
141
City of Pasco, 'Washington 2017 Comprehensive AnnuaCg'inanciaCReport
Waterworks Utility Customer Accounts
Last Fight Fiscal Years
For the Month of August
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
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 17,634
Multi-Family Residential 504 507 453 463 468 470 482 496 505 544
Commercial 1,058 1,112 1,272 1,296 1,321 1,421 1,372 1,430 1,443 1,456
Other 56 426 402 4,047 422 452 455 476 486 466
Total 15,167 16,389 16,797 21,010 17,823 18,135 18,278 18,757 19,121 20,100
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 15,481
Multi-Family Residential 504 482 442 449 454 470 497 512 527 526
Commercial 921 1,017 935 949 969 987 1,004 1,125 1,128 1,206
Total 13,312 13,647 14,218 14,771 15,169 15,406 15,634 16,087 16,559 17,213
StormwaterSystem Customer Accounts 14,667 15,129 15,778 16,329 16,718 17,580 12781 18,585 18,585 19,445
Irrigation System Customer Accounts 3,992 4,284 4,783 5,176 5,435 5,668 6,604 6,863 6,863 7,495
Percent of Total Annual Billed Revenue
Process Water Reuse Facility Customers
Pasco Processing 390/. 43% 38% 50% 46% 46% 41% 420/. 44% 47/a
Twin City Foods 160/. 19% 320/. 16% 21% 19% 22% 23% 26% 29%
CRF Frozen Foods-Bybee Food 16% 18% 16% 17% 15% 21% 19% 19% 15% 1%
Reser's Fine Food 290/. 20% 14% 17% 18% 14% 18% 16% 15% 23%
1001/. 100% 100% 100% 100% 100% 100% 1001/. 100% 100%
Source:City of Pasco billing systems.
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Waterworks Selected Utility Rates
Last Ten Fiscal Years
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Water rates and monthly charges
Inside city rates listed;outside city 90%surcharge
Consumption per 100 cu feet $ 0.54 $ 0.54 $ 0.65 $ 0.65 $ 0.65 $ 0.68 $ 0.68 $ 0.70 $ 0.74 $ 0.77
Single family residential monthly base(in city)
Size of Service
3/4 inch 10.50 10.50 12.50 12.50 12.50 12.50 16.25 16.25 17.06 17.92
1 inch 15.75 15.75 18.74 18.74 18.74 18.74 24.35 24.35 25.57 26.85
Multi-family and commercial monthly base
Size of Service
3/4 inch 14.80 14.80 17.61 17.61 17.61 17.61 22.90 22.90 24.05 25.25
1 inch 21.37 21.37 25.43 25.43 25.43 25.43 33.05 33.05 35.18 36.93
1 1/2 inch 41.69 41.69 49.61 49.61 49.61 49.61 64.50 64.50 67.73 71.11
2 inch 66.88 66.88 79.59 79.59 79.59 79.59 103.45 103.45 108.62 114.05
3 inch 91.34 91.34 108.69 108.69 108.69 108.69 141.30 141.30 148.37 155.78
4 inch 131.60 131.60 156.60 156.60 156.60 156.60 203.60 203.60 213.78 224.47
6 inch 205.43 205.43 244.46 244.46 244.46 244.46 317.80 317.80 333.69 350.37
8 inch 284.68 284.68 338.77 338.77 338.77 338.77 440.40 440.40 462.42 485.54
Irrigation monthly charge
Base per residential unit 24.00 24.00 24.00 26.00 26.00 26.00 26.00 26.00 26.00 27.30
Per Irrigation unit 7.50 7.50 7.50 8.12 8.12 8.12 8.12 8.12 8.12 8.53
Per Irrigated acre 70.00 70.00 70.00 75.81 75.81 75.81 75.81 75.81 75.81 79.60
Sewer rates and monthly charges
Inside city rates listed;outside city 50%surcharge
Residential monthly base-4 units 27.53 27.53 27.53 24.80 24.80 24.80 24.80 24.80 27.22 29.67
Residential monthly base>4 units 22.05 22.05 22.05 20.00 20.00 20.00 20.00 20.00 21.95 23.93
No residential consumption charge 8.30
Commercial base rate 36.79 36.79 36.79 33.35 33.35 33.35 33.35 33.35 36.60 39.90
Consumption per 100 cu It over 1000 cu ft 1.29 1.29 1.29 1.29 1.29 1.29 5.25 1.29 1.42 1.54
Stormwater monthly charge
Residential
Single family residential 1.80 1.80 1.80 3.00 3.90 3.90 4.40 4.90 4.90 4.90
Apartments(per unit) 1.80 1.80 1.80 3.00 1.95 1.95 2.20 2.45 2.45 2.45
Multi-family residential(per unit) 0.90 0.90 0.90 1.50 1.95 1.95 2.20 2.45 2.45 2.45
Undeveloped parcels - - - - - - - - -
Vacant buildings 1.80 1.80 1.80 3.00 3.90 3.90 4.40 4.90 4.90 4.90
Indus tri al/Commercial
Parking for 0-5 vehicles 1.80 1.80 1.80 3.00 3.90 3.90 4.40 4.90 4.90 4.90
Parking for 6-10 vehicles 3.60 3.60 3.60 6.00 7.80 7.80 8.80 9.80 9.80 9.80
Parking for 11-15 vehicles 5.40 5.40 5.40 9.00 15.60 15.60 13.20 14.70 14.70 14.70
Parking for 16 plus vehicles 7.20 7.20 7.20 12.00 19.50 19.50 17.60 19.60 19.60 19.60
Additional charges
Property runoff to City systems($1.25 min) 40.00 40.00 40.00 66.70 86.71 86.71 86.71 86.71 86.71 86.71
State Highway right-of-way-acre $10.00 $ 10.00 $10.00 $16.68 $21.71 $ 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 2017 Comprehensive AnnuaCginanciaCReport
"Appreciation is a wonderful thing: it makes what is excellent in other belong to us as well. "
Voltaire
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City of Pasco, -Washington 2017 Comprehensive Annual Financial Report
STATE REQUIRED SCHEDULES
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City of Pasco, Washington 2017 Comprehensive AnnuaCginanciaCReport
MCAG NO.0292
Schedule 9 -Schedule of Liabilities
For the Year Ended December 31,2017
Beginning Ending
ID No.Debt Type Description Due Date Balance Additions Reductions Balance
GENERAL OBLIGATIONS
251.11 Councilmanic 2011 LTGO Refund 2001 LTGO 12/1/2020 1,940,000 (460,000) 1,480,000
251.11 Councilmanic 2015 LTGO Police Station 12/1/2035 8,490,000 (310,000) 8,180,000
263.83 Other Gov't 12006 Port Airport Fire Building 7/12/2016 11,930 (11,930) -
TOTAL GENERAL OBLIGATIONS 10,441,930 - (781,930) 9,660,000
REVENUE OBLIGATIONS
252.11 Revenue Bond 2009 Revenue Water Sewer Bond' 11/1/2029 7,180,000 (695,000) 6,485,000
252.11 Revenue Bond 2010A Water/Sewer Bond 6/1/2029 4,765,000 (285,000) 4,480,000
252.11 Revenue Bond 2010T Refund 98-Reuse Facility 6/1/2018 355,000 (175,000) 180,000
252.11 Revenue Bond 2013A Sewer Bond 12/1/2028 2,220,000 (100,000) 2,120,000
252.11 Revenue Bond 2013T Reuse Facility Bond 12/1/2028 6,365,000 (440,000) 5,925,000
252.11 Revenue Bond 2015 Water/Sewer Revenue Refunding 12/1/2040 14,170,000 - (260,000) 13,910,000
252.11 Revenue Bond 2017 Water/Sewer Improvement Revenue 12/1/2042 - 9,415,000 9,415,000
251.11 Councilmanic Cashmere Valley Bank Sewer SRF Refunding 7/31/2019 3,383,003 - (1,112,418) 2,270,585
263.82 PWTF Loan Riverview Trunk/SE Sewer PW00-043 7/1/2020 444,562 - (111,140) 333,422
263.88 DWSRF Loan Columbia Water supply DM15-952-0373 10/1/2034 63,881 6,005,656 (102,618) 5,966,919
259.12 Accrued Leave Compensated Absences 12/31/2018 2,724,559 2,248,997 (2,015,572) 2,957,984
264.40 OPEB Liability Other Post Employment Benef1ts4 12/31/2018 4,086203 12,092,898 16,179,101
264.30 Pension Liability Pension Liabilities 12/31/2018 11,456,944 - (2,322,675) 9,134,269
TOTAL REVENUE OBLIGATIONS 57,214,152 29,762,551 (7,619,423) 79,357,280
ASSESSMENT OBLIGATIONS
253.11 2010 LID 145-A Street Improvements 11/15/2020 45,000 - (25,000) 20,000
TOTAL ASSESSMENT OBLIGATIONS 45,000 - (25,000) 20,000
TOTAL LIABILITIES $ 67,701,082 $29,762,551 $ (8,426,353) $ 89,037,280
Notes to Schedule of Long-Term Liabilities
IIn addition to the regular scheduled principal payment for the 2009 Water Sewer Revenue Bonds,$240,000 in callable bonds with maturities of 2022 and 2024 were redeemed in 2017.
2New revenue bonds were issued by the Water/Sewer Utility in 2017 to be used for Sewer infrastructure improvements.
3I 2017 the City reported cash draws from the Columbia Water Supply loan of$1,783,251 and accrued revenue of$4,222,405 that was received in early 2018.
4The large increase in OPEB Liability was a result ofthe City implementing GASB 74 and 75 in 2017.The statements require reporting the total OPEB liability as ofthe reporting date.
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City of Pasco, Washington 2017 Comprehensive Annual Financial Report
MCAG NO. 0292
CITY OF PASCO
SCHEDULE 15-SCHEDULE OF STATE AND LOCAL FINANCIAL ASSISTANCE
For the Year Ended December 31, 2017
Grantor/ Other
Pass-Through Grantor Identification STATE
Program Title Number AWARDS
Washington State Department of Ecology
Water Qualiity Stormwater Capacity Grant WQSWCAP-1517-Pasco-00069 12,957
Washington State Traffic Safety Commission
School Zone Traffic Safety 10,475
Washington State Office of Public Defence
Public Defense Improvement GRT17362 5,978
Washington State Department of Transportation
WA State Dept of Transportation Permanent Statewide Bike Counter Installation 13,055
Department of Health &Human Services
2017 Prehospital Participation Grant SFY17 1,270
TOTAL STATE AND LOCAL ASSISTANCE: 43,735
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MCAG NO.0292
SCHEDULE 16-SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Year Ended December 31,2017
From
Grantor/ Federal Other Pass- From
Pass-Through Grantor CFDA Identification Through Direct
Program Title Number Number Awards Awards Total Note:
Economic Development Administration,US Department of Commerce-
Pass-Through WA State Department of Commerce
Economic Adjustment Assistance 11.307 07-79-07368 55,588 55,588 2
Total CDBG-Entitlement Grants Cluster 55,588 - 55,588
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 77,234 77,234 3
Community Development Block Grant/Entitlement Grant 14.218 B-16-MC-53-009-CDBG 147,277 147,277 3
Community Development Block Grant/Entitlement Grant 14.218 B-17-MC-53-009-CDBG 309,861 309,861 3
Total CDBG-Entitlement Grants Cluster - 534,372 534,372
Pass-Through Washington Department of Commerce
Community Development Block Grants/State's program 14.228 08-F6401-014 10,349 10,349 3
Pass-Through City of Richland
Home Investment Partnerships Program 14.239 Home Program 162,560 162,560 3&4
Pass-Through Washington Department of Commerce
Violence Against Women Formula Grant 16.588 2017 Stop Violence Against Womer 34,698 34,698 2
Bureau of Justice Assistance.Department of Justice
Bullet Proof Vest Partnership Program 16.607 2017 Bullet Proof Vest 6,070 6,070 2
Criminal Division.Department of Justice
Pass-Through from US Marshalls
Equitable Sharing Program 16.922 Equitable Sharing 16,035 16,035 5
US Department of Transportation/Federal Highway Administration
Pass-Through Washington Department of Transportation
Highway Planning and Construction 20.205 STPUS-0397(008)LA-7866 22,622 22,622 2
Highway Planning and Construction 20.205 STPUL-3515(008)LA-8322 1,412 1,412 2
Highway Planning and Construction 20.205 HSIP-3551(004)-LA 8697 1,916,921 1,916,921 2
Highway Planning and Construction 20.205 STPUL-9911(010)LA-8321 1,145,646 1,145,646 2
Highway Planning and Construction 20.205 STPUL-1823(062)LA 8318 22,644 22,644 2
Highway Planning and Construction 20.205 STPUL-3522(001)LA-8117 10,018 10,018 2
Total Highway Planning and Contrruction cluster: 3,119,263 3,119,263
US Department of Transportation-National Highway Traffic Safety Administration(NHTSA)
Pass-Through Washington Association of Sherriff&Police Commission
State and Community Highway Safety 20.600 WASPC Traffic Safety Equipment Gran 980 980 2
Pass-Through Washington Traffic Safety Commission
State and Community Highway Safety 20.600 2016-2017 Seat Belt Patrols 830 830 2
State and Community Highway Safety 20.600 2016-2017 Distracted Driving 1,092 1,092 2
State and Community Highway Safety 20.600 2016-2017 Impaired Driving 2,541 2,541 2
State and Community Highway Safety 20.600 2017-2018 Impaired Driving Patrols 836 836
Total CFDA 20.600 6,279 6,279 2
National Priority Safety Protrams 20.616 2016-2017 Flex Funding 2,189 2,189 2
Toad Highway Safety Cluster: 8,468 8,468
Office of Water.Environmental protection Agency
Pass-Through WA State Department of Commerce
Capitalization Grants for Drinking Water State RevolvingFund: 66.468 DM 15-952-037(DWSRF) 6,005,656 6,005,656 2,6
Total Drinking Water State Revolving Fund Cluster: 6,005,656 6,005,656
Administration for Community Living.Department of Health&Human Services
Pass-Through Yakima County.Office of Aging&Long Term Care
US Dept of Health&Human Svcs 93.044 93.044 15,370 15,370 2
Total Aging Cluster: 15,370 15,370
US Department of Homeland Security
Pass-Through Franklin County Emergency Management
Homeland Security Grant Program(A) 97.067 E17-078 HSGP(16SHSP) 10,993 10,993 2
Total Franklin County Emergency Management 10,993 10,993
Total US Department of Homeland Security 10,993 10,993
TOTAL FEDERAL AWARDS EXPENDED: $9,438,980 $ 540,442 $9,979,422
The accompanying notes are an integral part of this schedule.
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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–Amounts awarded to subrecipients
The total amount of$162,560 passed through to sub-recipient City of Richland.
NOTE 5–Department of Justice Equitable Sharing
The City reports these funds on the Schedule of Expenditures of Federal Awards when program proceeds
received rather than when expenditures incurred due to program stipulations.
NOTE 6–Federal loan-Office of Water,Environmental Protection agency
In September of 2015, the City entered into a loan agreement with the State of Washington Department of
Commerce. As a beneficiary of the Drinking Water State Revolving Loan program (DWSRF), the City also
became a sub recipient of funds provided by the United States Environmental Protection Agency, CFDA
number 66.468. The total loan amount of$6,810,430 was approved for the purpose of construction of the
Columbia Water Supply project less a 1%loan fee of$67,430. As of December 31,2017,the outstanding loan
balance is$5,966,918. This balance is the result of draws against the total$6,073,85 less principal repayments
of$106,167. This loan is reported on the City's schedule of liabilities.
NOTE 7–Indirect cost rate
The city has not elected to use the 10-percent de minimis indirect cost rate allowed under the Uniform
Guidance.
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City of Pasco, -Washington 2017 Comprehensive Annual Financial Report
MCAG NO.0292
Schedule 17-LIMITATION ON PUBLIC WORKS PROJECTS PERFORMED BY PUBLIC EMPLOYEES
For the Year Ended December 31,2017
Total current public work construction budget as amended(annual or biennial
as applicable) 27,238,885
Allowable portion of total public works(10 percent of line 1) 2,723,888
Less:Amount(if any) in excess of permitted amount from prior budget period. -
Total allowable public works(line 2 minus line 3) 2,723,888
Total public works projects performed by public employees during the current
year(including work performed by a county) (24,577)
If this is the second year of a biennial budget,total public works projects
performed by public employees during the first year of biennium -
Restricted under(over)allowable(line 4 minus line 5 minus line 6) 2,748,466
NOTE: If the restricted amount is over allowable,this amount must be carried
forward to the next budget period report.
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City of Pasco, -Washiagton 2017 Comprehensive Annual Financial Report
MCAG NO. 0292
CITY OF PASCO
SCHEDULE 19-LABOR RELATIONS CONSULTANTS
For the Year Ended December 31, 2017
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:
$0.00 $29,448.47 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.): $295.00
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 7th day of February 2018
to the best of my knowledge and belief:
c�
Colleen Chapin
HR Manager
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MCAGNO.0292
CITY OF PASCO
SCHEDULE 21-LOCAL GOVERNMENT RISK ASSUMPTION
For the Year Ended December 31,2017
ProgramManager: Coleen Chapin
Address: 525 N 3rd Ave Pasco Wa 99301
Phone: 509-545-3473
Email: chanincQpasco-wa.goy
Yes Does the entity self-insure for any class of risk,including liability,property,health and
welfare,unemployment compensation,workers'compensation?(yes or no)
Which class of risk does the entity self-insure?(Check all that apply)
liability
Property
X Health and welfare(medical,dental,prescription)
Unemployment compensation
Workers'compensation
Other-please ds cribe
Yes Does the entity self-insure as an individual program?(yes or no)
No Does the entity allow another separate legal entity into its self-insurance
programs(yes or no)For example,employees of a different organization
participate in a health and welfare program of a city.
If so,list the entity or entities:
No Does the entity self-insure as a joint program?(yes or no)
If Yes,list the other member(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 programs revenues sufficient to cover the programs expenses(yes or no)
No Did the program use an acturary to determine its liabilities?(yes or no)
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City of Pasco, 'Washington 2017 Comprehensive AnnuaCginanciaCReport
MCAGNO.0292
SCHEDULE 21-LOCAL GOVERNMENT RISK ASSUMPTION
For the Year Ended December 31,2017
Third Party Administrator Benefit Management,hic.
Contact Kelli Glover
Address: PO Box 1090,Great Bend,KS 67530
Phone: 800-290-1368 x2076
Email: kalover benefitmanagementllc.com
Describe each class of risk the governing body has decided to assume as well as the appropriate
dollar level involved.
Numbers of claims Numbers of claims Total amount of
Description of Risk Type received during the paid during the claims paid
period period during the period
Medical/Rx 30,276 29,642 $4,394,659.31
Dental 1,945 1,769 $423,418.82
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City of Pasco, 'Washington 2017 Comprehensive AnnuaCginanciaCReport
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
Rosa Moreno
Staff Accountant
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