HomeMy WebLinkAbout2019 ACFRCOMPREHENSIVE ANNUAL
FINANCIAL REPORT
CITY OF PASCO, WASHINGTON
FOR THE FISCAL YEAR ENDED
DECEMBER 31, 2019
Prepared by:
Finance Department
Richa Sigdel-Director
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
TABLE OF CONTENTS
INTRODUCTORY SECTION
Letter of Transmittal ……………………………………………………………………………….. 1
Organizational Chart ………………………………………………………………………………. 8
Directory of City Officials and Leadership Team………………………………………………….. 9
FINANCIAL SECTION
Independent Auditor’s Report ………………………………………………………………...…… 11
Management’s Discussion and Analysis ………………………………………………………….. 14
Basic Financial Statements
Government Wide Financial Statements
Statement of Net Position…………………………………………............................................ 25
Statement of Activities…………………………………………………………………………. 26
Fund Financial Statements
Balance Sheet – Governmental Funds ......................................................................................... 27
Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds.. 28
Reconciliation of Statement of Revenues, Expenditures and Changes in Fund Balance of
Governmental Funds to the Statement of Net Activities.……..…………….…………..…… 29
Statement of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual-
General Fund…………………………………………………………………………………. 30
Statement of Net Position - Proprietary Fund…………………….…………………………….. 31
Statement of Revenues, Expenses and Changes in Net Position – Proprietary Funds………….. 32
Statement of Cash Flows – Proprietary Fund ………………………………………………….. 33
Statement of Net Position – Fiduciary Funds…………………………………………………… 34
Statement of Changes in Fiduciary Net Position – Fiduciary Funds.……………………..……… 35
Notes to the Financial Statements….…………………….…………………………….………… 37
Required Supplementary Information
Schedule of Changes in Net OPEB Liability and Related Ratios - Firemen’s OPEB Plan . ….. 92
Schedule of Investment Returns – Fireman’s OPEB Plan.. ……………………………………. 92
Schedule of City Contributions - LEOFF 1 OPEB …………….…..…………………………. 93
Schedule of Changes in Net OPEB Liability and Related Ratios – LEOFF 1 OPEB ………… 93
Schedule of Changes in Net Pension Liability and Related Ratios – Fire Pension Plan ....……. 94
Schedule of Employer Contributions – Fire Pension Plan …………………………….………. 94
Schedule of Investment Returns – Fire Pension Plan …………………………………………. 94
Schedule of Proportionate Share of the Net Pension Liability - All State Plans…………….… 95
Schedule of Employer Contributions - All State Plans………………………………………... 96
Combining and Individual Fund Statements
Combining Balance Sheet – Nonmajor Other Governmental Funds ………………………….. 98
Combining Statement of Revenues, Expenditures and Changes in Fund Balance-
Nonmajor Other Governmental Funds ……………………………………………………….. 99
Combining Balance Sheet – Nonmajor Special Revenue Funds …………………………….. 100
Combining Statement of Revenues, Expenditures and Changes in Fund Balance-
Nonmajor Special Revenue Funds……………………………………………………………. 105
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
TABLE OF CONTENTS (continued)
Combining Balance Sheet – Nonmajor Debt Service Funds…….…………………………….. 110
Combining Statement of Revenues, Expenditures and Changes in Fund Balance-
Nonmajor Debt Service Funds…………………………………………………………….... 111
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget to Actual
Major Construction Fund.…………………….……………………………………………… 112
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget to Actual
Major Ambulance Fund...…………………….……………………………………………… 113
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget to Actual
Major LID Loan Fund...…...………………….……………………………………………… 114
Schedule of Revenues and Expenditures–Budget to Actual–Nonmajor Other Governmental
Funds ……………………………………………………………………………………….. 115
Combining Statement of Net Position – Nonmajor Internal Service Funds…………………… 118
Combining Statement of Revenues, Expenses, and Changes in Net Position –
Nonmajor Internal Service Funds…..………..……………………………………………… 119
Combining Statement of Cash Flows – Nonmajor Internal Service Funds................................ 120
Combining Statement of Net Position– Fiduciary Funds……………………………..………. 122
Combining Statement Assets and Liabilities – Custodial Funds…..………………………… 123
Combining Statement of Changes to Net Position – Fiduciary Funds…...…………..……….. 124
Combining Statement of Changes in Assets & Liabilities –Custodial Funds.………….……. 125
Combining Statement of Changes to Net Position – Custodial Funds…...…………..……….. 125
STATISTICAL SECTION
Financial Trends
Net Position by Component……………………............................................................................ 127
Changes in Net Position……….................................................................................................... 128
Governmental Activities Tax Revenues by Source…………………..………..………………… 130
Fund Balances of Governmental Funds………………….............................................................. 131
Changes in Fund Balances of Governmental Funds…………………........................................... 132
Revenue Capacity
Assessed Value of Taxable Property .......................................................................................... 133
B&O Taxes by Type ……………………................................................................................... 133
Property Tax Rates ....................................................................................................................... 134
Taxable Retail Sales ………………………………..……………………................................... 134
Principal Property Taxpayers…………………………….………………................................... 135
Principal B&O Taxpayers …………………………….…………………..............……………. 136
Top Ten Industries that Generate Sales Tax…………………………………………………….. 137
Property Tax Levies and Collections…………………................................................................. 137
Debt Capacity
Ratios of Outstanding Debt by Type/Ratio of General Bonded Debt Outstanding....................... 138
Legal Debt Margin……………………………............................................................................. 139
Direct and Overlapping Governmental Activities Debt……………………………………...... 140
Waterworks Utility Debt Service Coverage……........................................................................... 141
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
Demographic and Economic Information
Demographic and Economic Statistics.......................................................................................... 142
Principal Employers…………………………………………...................................................... 143
Non Agriculture Wage and Salary Workers…………………………………………………….. 144
Building Permits………………………………………………………………………………… 144
TABLE OF CONTENTS (continued)
Operating Information
Full Time Equivalent City Government Employees by Function…………………………........ 145
Operating Indicators by Function………………………………………………………………. 146
Building Permits………………………………………………………………………………… 147
Capital used by Function……………………………………………………………………….. 148
Waterworks Utility Customers …………………………………..…..…………………………. 149
Waterworks Utility Rates………………………………………………….……………………. 150
STATE REQUIRED SCHEDULES
Schedule 9 – Schedule of Long-Term Liabilities……………………………….………..……… 153
Schedule 15 – Schedule of State Financial Assistance…………………………………..………….. 154
Schedule 16 – Schedule of Expenditures of Federal Awards……………………………………….. 155
Notes to Schedule of Expenditures of Federal Awards……………………………..…………. ….. 156
Schedule 17 – Limitation on Public Works Projects performed by employees…………………… 157
Schedule 19 - Labor Relations Consultants………………………………………………………… 158
Schedule 21 – Local Government Risk Assumption………………………………………………. 159
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
Date: ____
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 ending December 31, 2019.
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’s comprehensive framework of internal controls are 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, 2018 are free of material misstatements. 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.
With the exception of the misclassification of expense, 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 ending December 31, 2018 are fairly presented in
conformity with GAAP.
In addition to the independent financial statement audit for the year ending December 31, 2018,
the City underwent a Single Audit. This is mandated for agencies expending federal grant funds
in excess of $500,000 during the year, which the City did. The standards governing Single Audit
engagements require the independent auditor to report not only on the fair presentation of the
financial statements, but also on the audited government’s internal controls and compliance with
legal requirements, with special emphasis on internal controls and legal requirements involving
the administration of federal awards.
GAAP requires that management provide a narrative introduction, overview and analysis to
accompany the basic financial statements in the form of Management’s Discussion and Analysis
(MD&A). This letter of transmittal complements the MD&A and the two should be read in
1
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
concert. 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, along with the neighboring cities of Richland and Kennewick, which are in
Benton County, make up the Tri-Cities Metropolitan Area, the fourth largest urban area in
Washington State.
Pasco has experienced rapid residential growth in the 21st century, growing from a population of
32,066 in 2000 to an estimated 75,290 in 2019. The City is projected to exceed a population of
over 124,000 in the next 20 years, and is rated among the best places to invest, live, and seek
employment.
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. 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, a championship golf course and a baseball stadium that is leased
to a Class A minor league baseball team, the Dust Devils, who are affiliated with the San Diego
Padres.
The City adopted its first biennial budget in 2018 for 2019-2020 biennium. The Council is
required to adopt an initial budget for the biennium no later than December 31st preceding the
beginning of the fiscal year on January 1st. The City of Pasco maintains budgetary controls to
ensure compliance with legal provisions embodied in the budget. All activities are appropriated
through the budget process and published in the City’s Budget document. The City Council must
adopt an ordinance to increase or decrease total appropriations in a Fund.
In 2019, the City received the Distinguished Budget Presentation Award from GFOA for its
2019/2020 biennial budget document. In order to qualify for the Distinguished Budget
Presentation Award, the City’s budget document was judged to be proficient in several
categories, including as a policy document, a financial plan, an operation guide, and a
communications device.
2
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
LOCAL ECONOMY
The Tri-Cities is the fastest growing community in the state of Washington. The current
population estimate is 296,000, making it the 165th largest market in the United States and 8th
largest in the Pacific Northwest. Franklin County accounts for 94,680 of the total Tri-Cities area
population. A once small, quiet Central Washington town on the banks of the Columbia, Pasco
has experienced rapid growth over a prolonged period of time that has transformed the City into
a dynamic and vibrant community of over 75,000 people; well within the top 20 most populated
cities in the State. The Pasco of today is a regional hub of commerce with a diverse population,
and quickly rising education levels and household incomes. The City’s economy is largely based
on agriculture and related food processing, manufacturing, retail, and transportation.
The region’s economy is anchored in agribusiness, food processing, manufacturing, research and
development, specialized services, production technology, government, and healthcare.
Agribusiness
The area produces bountiful harvests with a rich variety of crops. Climate, soil, experience, and
sophisticated technology all contribute to this outcome. Pasco is among the most important
production centers for tree fruit, wine grapes, sweet corn, potatoes and hay in the state. Franklin
County has over 625,000 acres in farmed land and produces products sold worldwide amounting
to more than $750,000,000. With easy access to diverse and high quality products, supporting
infrastructure, and a robust transportation network, food processing has become a major factor
in the area’s economy.
The City’s Process Water Reuse Facility (PWRF), was designed and developed specifically for
the food processing industry. Constructed in 1995, the facility provides food processors the
unique advantage of providing wastewater disposal via land application rather than through the
municipal wastewater collection and treatment systems. The PWRF was developed jointly by the
City, Port of Pasco and Franklin County Public Utility District. This system pumps the produce
washwater from the processors into large storage ponds where it is treated and then land applied
to irrigate crops. These storage ponds allow processors to operate year round. Since completion,
the operation has expanded to include several large food processors such as J.R Simplot, Pasco
Processing, Reser’s Fine Foods, Twin City Foods, and Freeze Pack.
Grimmway Farms, a global produce leader and the world’s largest producer of carrots, operates
a major production facility in Pasco employing over 200 workers. The City is currently working
with Grimmway to divert their flows from the municipal wastewater treatment plant to the
PWRF.
Due to high growth and demand, the City has completed a Facility Plan to modernize and expand
the PWRF to meet the demands of current and future processors. Food processing and storage
companies employ an estimated 1,000 employees, with additional employees during peak
seasons.
Syngenta, a seed processing facility that serves its global market, employs 100 workers. 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.
Volm Companies, a national manufacturer offering a comprehensive array of food packaging
options, recently expanded its footprint in Pasco with a new packaging facility. The new facility
3
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
is located in close proximity to the major food processors in the region and plays an integral part
on the farm to table chain. Volm’s Pasco facility employs approximately 100 skilled and semi -
skilled workers.
Government
A major catalyst for the growth of the Tri-Cities in the 1970’s was the expansion of the Hanford
Nuclear Reservation, which has evolved into one of the largest nuclear industrial centers in the
United States. Located in Benton County, the Hanford Reservation encompasses approximately
560 square miles and contains various nuclear and nuclear-related projects, serving as a national
energy resource center. Today, the focus is on energy research, environmental remediation/waste
management and related technology. A 40-year Tri-Party Agreement was signed by the U.S.
Department of Energy, the State and the U.S. Environmental Protection Agency, which
established a plan to “cleanup” the environment of the Hanford Reservation. The plan is intended
to improve radioactive and chemical waste disposal and to manage future waste generated at the
site. 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 2,875-acre District’s 80+ tenants employ more than 7,000 professional, technical
and administrative staff, many of whom reside in Pasco.
Tourism
The community has diligently focused on diversifying its economic portfolio, including a
commitment to tourism. 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, a single A
affiliate of the San Diego Padres team of Major League Baseball.
In 1995, The HAPO Center, formerly called the TRAC, was built through a joint venture between
the City of Pasco and Franklin County. The HAPO Center has two large exhibition halls, meeting
rooms, a concession area, and administrative offices. Additionally, an adjoining 15-field soccer
complex occupying 45 acres was developed in 1995. 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 push for tourism has been
fueled by the growing popularity of Columbia Valley region wines. Washington State has a
robust $4.8 billion wine industry, ranking it second nationally for premium wine production.
Known as the “Heart of Washington Wine Country”, the 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. Visitors are coming to the region from all over the country and world to enjoy
premium wines, food, and weather. To meet the growing demand, the City continues to see
growth in the hospitality industry, with a new 99-room Courtyard by Marriott hotel adjacent to
the airport completed in early 2020.
Healthcare
Lourdes Health Network is located in Pasco and is the fourth largest employer in Franklin
County, with over 800 employees. In 2016, the Hospital celebrated 100 years of responding to
the healthcare needs of the community. It now has 10 locations, housing 24 physician and
specialty clinics. Lourdes Counseling Center is the largest and only inpatient and outpatient
behavioral health service provider in Southeastern Washington.
4
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
Kadlec, a regional medical center serving the community since 1944, also serves the region. It is
the second largest employer in the Tri-Cities area, employing over 3,500 workers.
Trios Health, formerly known as Kennewick General Hospital, first started in 1952 as a
community driven effort to establish a Kennewick-based hospital. The organization operates two
teaching hospitals and a network of outpatient specialty practices and services, employing more
than 1,200 workers. RCCH Healthcare Partners now manages Trios Health, as well as Lourdes
Health Network.
Transportation and Other
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 was operational in 2017 and
employs 320 workers.
Pasco is also the home of the region’s only international airport, train and bus depots. Tri-Cities
Airport is regional airport served by several airlines, with direct flights to nine major US cities:
Denver, Las Vegas, Los Angeles, Mesa, Minneapolis, 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. The Trucking industry uses Interstate 182, and to a lesser extent U.S. Route 395.
SUMMARY OF CURRENT AND FUTURE ECONOMIC OUTLOOK
The Benton-Franklin 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 the 2010 Census has remained level at 1.8% per annum; comparatively
Washington State and the United States have experienced average growth rates of 1.3% and
0.7%, respectively, during this same period. The Office of Financial Management anticipates the
City to add 50,000 new residents by 2040. The growth trend for Pasco also remains on track,
with a 2019 growth rate of 2.2%.
Pasco continues to attract a young, energetic and diverse workforce. At 29, the median age is a
decade younger than the statewide average. Most of the City’s labor force and household incomes
are climbing closer to regional and statewide levels, making Pasco an attractive place to start or
relocate families and businesses. A 2017 survey of Pasco area businesses and institutions (1,000
to 2,000) indicated that 60% have plans to expand locally in the future. There was a strong
support for public amenities including public markets, cultural facilities, and an accessible
network of paths for walking and biking.
In 2019, the Pasco economy was stable and continued to grow. The City issued 2,755 building
permits, an increase of over 2.6% the previous year. This represents approximately $268 million
in construction value. Of the total permits, 585 were for new single-family residences, which
equates to $154 million in construction value. The average value of a new home in Pasco was
approximately $270,000 in 2019. This is a 28% increase in home value compared to $210,000 in
2010. The strength of the City’s growing economy is confirmed by the Standard & Poor’s rating
of the City’s 2019 General Obligation, and most recently, through their rating of the City’s 2020
Utility bond, issue as AA-/Stable. The City’s ability to maintain its rating during a time of
5
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
unprecedented economic certainty and volatility due to the COVID-19 pandemic is reflective of
the City’s bright long and short-term economic prospects.
Businesses have continued making a significant investment in Pasco through their new or
existing infrastructure. In total, the City received more than $98,000,000 investment in
construction for commercial and industrial purposes. In 2017, voters approved a $99,500,000
school 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 accommodate in the future, as well as the area’s commitment
to providing a well-educated and technologically adept workforce capable of meeting the future
needs of regional, national, as well as international employers. Pasco School District Elementary
School, valued at $13,000,000 completed construction in 2019. An additional three (3) public
schools were permitted in 2019, valued at a total $51,900,000. Furthermore, a variety of
commercial and industrial construction such as a new hangar, class A office space, and new retail
spaces continue. Pasco School District is the largest employer in the City with over 2,000
employees.
The City is also home to Columbia Basin College, which provides two-year and four-year
degrees to students in the region. The college held its first classes in 1955, and from the initial
enrollment of 272 students to more than 6,800 students today, it continues to meet the higher
education needs of the community. Reflecting its growth, popularity, and demand, it started the
operation of a student housing building, which provides 45 units to house 125 students; with the
goal of building 375 single, double, and quad units in the future. In 2019, the college was the
third largest employer in Franklin County with over 750 employees.
Road 68 Corridor continues to be an important economic activity center for the City. The area
has been growing each year, largely providing retail, restaurant, and accommodation services.
The area provides an estimated 1,882 jobs, an increase of 42% since 2015. Preliminary permitting
discussions are underway for another hotel adjacent to the Pasco Sporting Complex and the
HAPO Center, an indication of its growing regional attraction.
The City is also working with landowners on developing the Broadmoor area, a location central
to the Tri-Cities region and a blank space ready for development. The City extended sewer
services to the area in the summer of 2019 and is in the process of completing the
environmental review process for the master planned development of a two-thousand-acre area
encompassing what is known as the Broadmoor Area. The development plan envisions the area
to include a combination of homes, condominiums, apartments, offices, stores, mixed-use and a
transportation system of bike/ped trails, transit and boulevards focused on connectivity and
walkability. The Cit y expects significant economic development activity in this area in the near
future.
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.
6
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
In closing, we would like to thank the members of the City Council for their leadership and
support in planning and conducting the financial affairs of the City in a responsible and
progressive manner.
Respectfully submitted,
David Zabell, City Manager
Richa Sigdel, Finance Director
7
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
8
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
9
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
10
Office of the Washington State Auditor
INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL
OVER FINANCIAL REPORTING AND ON COMPLIANCE AND
OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL
STATEMENTS PERFORMED IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS
City of Pasco
January 1, 2019 through December 31, 2019
Mayor and City Council
City of Pasco
Pasco, Washington
We have audited, in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States, the financial statements of the
governmental activities, the business-type activities, each major fund and the aggregate discretely
presented component units and remaining fund information of the City of Pasco, as of and for the
year ended December 31, 2019, and the related notes to the financial statements, which collectively
comprise the City’s basic financial statements, and have issued our report thereon dated
December 16, 2020.
As discussed in Note 16 to the 2019 financial statements, in February 2020, a state of emergency
was declared that could have a negative financial effect on the City. Management’s plans in
response to this matter are also described in Note 16.
INTERNAL CONTROL OVER FINANCIAL REPORTING
In planning and performing our audit of the financial statements, we considered the City’s internal
control over financial reporting (internal control) to determine the audit procedures that are
appropriate in the circumstances for the purpose of expressing our opinions on the financial
statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s
internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s
internal control.
Our consideration of internal control was for the limited purpose described in the preceding
paragraph and was not designed to identify all deficiencies in internal control that might be
material weaknesses or significant deficiencies and therefore, material weaknesses or significant
11
Office of the Washington State Auditor
deficiencies may exist that were not identified. However, as described in the accompanying
Schedule of Audit Findings and Responses, we identified certain deficiencies in internal control
that we consider to be material weaknesses.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent,
or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a
combination of deficiencies, in internal control such that there is a reasonable possibility that a
material misstatement of the City’s financial statements will not be prevented, or detected and
corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of
deficiencies, in internal control that is less severe than a material weakness, yet important enough
to merit attention by those charged with governance. We consider the deficiencies described in the
accompanying Schedule of Audit Findings and Responses as Finding 2019-001 to be material
weaknesses.
COMPLIANCE AND OTHER MATTERS
As part of obtaining reasonable assurance about whether the City’s financial statements are free
from material misstatement, we performed tests of the City’s compliance with certain provisions
of laws, regulations, contracts and grant agreements, noncompliance with which could have a
direct and material effect on the determination of financial statement amounts. However, providing
an opinion on compliance with those provisions was not an objective of our audit, and accordingly,
we do not express such an opinion.
The results of our tests disclosed no instances of noncompliance or other matters that are required
to be reported under Government Auditing Standards.
CITY’S RESPONSE TO FINDINGS
The City’s response to the findings identified in our audit is described in the accompanying
Schedule of Audit Findings and Responses. The City’s response was not subjected to the auditing
procedures applied in the audit of the financial statements and, accordingly, we express no opinion
on the response.
PURPOSE OF THIS REPORT
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of the
City’s internal control or on compliance. This report is an integral part of an audit performed in
12
Office of the Washington State Auditor
accordance with Government Auditing Standards in considering the City’s internal control and
compliance. Accordingly, this communication is not suitable for any other purpose. However, this
report is a matter of public record and its distribution is not limited. It also serves to disseminate
information to the public as a reporting tool to help citizens assess government operations.
Pat McCarthy
State Auditor
Olympia, WA
December 16, 2020
13
City of Pasco, Washington 2019 Comprehensive Annual Financial 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, 2019. 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 millions of dollars.
Financial Highlights
The assets and deferred outflows of the City of Pasco exceeded liabilities and deferred
inflows at the close of the most recent fiscal year by $502.36. Of this amount, $94.29
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 $46.56. Approximately 71% of the
increase in net position is due to increases in governmental-type activities and 29% is due
to business-type activities. A 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 $70.93. This represents an increase of $30.50 in
comparison with the prior year, mainly attributable to issuance of a Limited Tax
Obligation Bond for $18.57 in November of 2019.
At the end of the current fiscal year, the unrestricted, unassigned fund balance for the
City’s General Fund was $20.26, which also represents 43% of total General Fund
expenditures. This is an increase of $4.90 over prior year, attributable to robust sales tax
revenue, adoption of banked capacity on property taxes, and a modest increase in
expenses. There was an excess of revenues over expenditures of $8.17 with transfers out
totaling $4.21. This is a significant increase over prior year due to a change in revenue
recognition and transfer practices ($1.30), one-time subsidy to Ambulance Fund ($0.70),
one-time capital expenditures ($1.56) and remainder for other subsidies to Special
Revenue funds. The City also issued Limited Tax General Obligation Bonds (LTGO) of
$18.57 to fund construction of two Fire Stations, a new Animal Shelter, and
improvements to GESA Stadium.
Overview of the Financial Statements
This discussion and analysis are intended to serve as an introduction to the City of Pasco’s basic
financial statements. The financial statements are comprised of three components: 1)
government-wide financial statements, 2) fund financial statements, and 3) notes to the financial
statements. This report also contains other supplementary information in addition to the basic
financial statements themselves.
Government-wide Financial Statements. The government-wide financial statements are
designed to provide readers with a broad overview of the City of Pasco’s finances in a manner
similar to a private-sector business. The Statement of Net Position presents information on all of
the City of Pasco’s assets and liabilities, with the difference between the two reported as net
position. Over time increases or decreases in net position may serve as a useful indicator of
whether the financial position of the City of Pasco is improving or deteriorating.
14
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
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 25-26 of this report.
Fund Financial Statements. A fund is a grouping of related accounts that are used to maintain
control over resources that have been segregated for specific activities or objectives. The City
of Pasco, like other state and local governments, uses fund accounting to ensure and demonstrate
compliance with finance-related legal requirements. All of the funds of the City of Pasco can be
divided into three categories: governmental funds, proprietary funds, and fiduciary funds.
Governmental Funds. Governmental funds are used to account for essentially the same
functions reported as governmental activities in the government-wide financial statements.
However, unlike the government-wide financial statements, governmental fund financial
statements focus on near-term inflows and outflows of spendable resources, as well as on
balances of spendable resources available at the end of the fiscal year. Such information may be
useful in evaluating a government’s near-term financing requirements.
Because the focus of governmental funds is narrower than that of the government-wide financial
statements, it is useful to compare the information presented for governmental funds with similar
information presented for governmental activities in the government-wide statements. By doing
so, readers may better understand the long-term impact of the government’s near-term financing
decisions. Both the governmental fund balance sheet and the governmental fund statements of
revenues, expenditures and changes in fund balances provide a reconciliation to facilitate this
comparison between governmental funds and governmental activities.
The City of Pasco maintains thirty-one (31) individual governmental funds including the
general fund. Information is presented separately in the governmental fund balance sheet and
in the governmental fund statement of revenues, expenditures and changes in fund balances for
the general fund, which is a major fund as defined by the Governmental Accounting Standards
Board (GASB). In 2019, the General Fund, Ambulance Fund, LID Loan Fund and the
Construction Fund were the only major governmental funds. Due to addition of new Fire
Station in 2018, continued increase in labor and equipment costs, as well as increase in revenue
related to changes in ambulance fees and Ground Emergency Medical Transportation (GEMT)
has resulted in the Ambulance fund being classified as a major fund in 2019. Further, in 2019,
15
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
LID 150 was formed which resulted in internally funded debt issued in the amount of $2
million. The significant increase in liability resulted in the fund being classified as a major fund
in 2019.
Data from the other funds are combined into a single, aggregate presentation. Individual fund
data for each of these non-major governmental funds is provided in the form of Combining
Statements elsewhere in this report.
The City of Pasco adopts a biennial 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 27 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 31.
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. The basic fiduciary fund financial statements can be found starting on
page 34 of this report.
Notes to the Financial Statements
The notes provide additional information that is essential to a full understanding of the data
provided in the government-wide and fund financial statements. The notes to the financial
statements can be found starting on page 37.
Government-wide 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, the net position for governmental and
business-type activities was $502.36 at the close of the most recent fiscal year. The largest portion
of the City of Pasco’s net position $408.06 (81%) reflects its investment in capital assets (e.g.
buildings, machinery, equipment, infrastructure, construction in progress) less any related
16
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
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. 13.5%
($68.02) of the City’s net position represents resources that are subject to external restrictions on
how they may be used. The remaining $26.28 of unrestricted net position (5%) may be used to
meet the government’s ongoing obligations to citizens and creditors.
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 $46.56, during the
current fiscal year. The majority of the increase in the City’s net position was attributable to
capital grants and contributions received from developers in the form of donated infrastructure
related to residential and commercial development, and state and federal grants received for street
construction and improvement projects, and, water and sewer infrastructure improvements, as
well as issuance of LTGO bonds at the end of the fiscal year. There was an increase in fund
balance, as the City is gearing up for significant capital projects in transportation, parks, and
utilities.
2019 2018 2019 2018 2019 2018
NonCapital assets 110.95$ 77.52$ 43.90$ 48.07$ 154.85$ 125.59
Capital assets 258.33 245.73 201.77 188.32 460.10 434.05
Total assets 369.28 323.25 245.67 236.39 614.95 559.64
Total of deferred outflows of resources 2.77 2.77 0.47 0.33 3.24 3.10
Current liabilities 8.93 13.88 6.15 7.04 15.08 20.92
Noncurrent liabilities 46.14 29.63 46.29 49.52 92.43 79.15
Total liabilities 55.07 43.51 52.44 56.56 107.51 100.07
Total deferred inflows of resources 7.44 6.20 0.88 0.67 8.32 6.87
Net position:
Net investment in capital assets 247.55 236.87 160.51 147.34 408.06 384.21
Restricted 61.42 21.23 6.60 - 68.02 21.23
Unrestricted 0.57 18.21 25.71 32.15 26.28 50.36
Total net position 309.54$ 276.31$ 192.82$ 179.49$ 502.36$ 455.80$
Total Primary Government
City of Pasco's Net Position (in millions)
Governmental Activities Business-Type Activities
17
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
Governmental Activities. Governmental activities increased the City of Pasco’s net position by
$33.23. The increase is attributable to robust national and local economy lending to an increase
in sales, criminal justice, and public safety taxes. Additionally, continued growth of the region
has resulted in healthy building permits revenues, as well as Real Estate Excise Taxes (REET).
The City also adopted its banked capacity for property taxes, resulting in increase of property tax
rate by 23.1%. Property tax revenue increased by 28% in 2019. Growth in housing increased the
donated asset to the City in the form of the right-of-ways, roads, and other infrastructure by $6.92
in 2019. While this is less of an increase as compared to prior year, the donations have been
cyclical in nature, with large spikes experienced every other year. Increase in net position ensures
the City’s capacity to maintain the same service level during difficult economic times when tax
and permit revenues sharply decline; like the ongoing COVID-19 pandemic.
Tax revenues for the City have been increasing at a steady pace, reflecting a healthy and growing
economy. Sales tax revenue increased by 6.3% compared to 5.5% the prior year, and excise tax
increased by 32.9%, compared to 4.3% in 2018 and 21% in 2017. Similarly, B&O taxes increased
by 15.1% due to growth in population, households, businesses, and rates. Overall, taxes increased
by 15.8% in 2019 versus 2.7% in the same period the prior year.
2019 2018 2019 2018 2019 2018
Revenues
Program revenues:
Charges for services 37.06$ 27.17$ 29.67$ 28.17$ 66.73$ 55.34$
Operating grants & contributions 1.47 1.61 0.01 1.00 1.48 2.61
Capital grants & contributions 7.98 31.76 4.11 7.00 12.09 38.76
General revenues:
Property taxes 10.70 8.35 10.70 8.35
Other taxes 34.22 30.44 34.22 30.44
Investment income and miscellaneous 4.56 4.46 0.64 1.00 5.20 5.46
Total revenues 95.99 103.79 34.43 37.17 130.42 140.96
Program expenses: *
General government 9.04 6.95 9.04 6.95
Public safety 31.00 32.47 31.00 32.47
Transportation 11.77 18.05 11.77 18.05
Economic environment 7.81 6.87 7.81 6.87
Culture and recreation 5.95 9.49 5.95 9.49
Interest on long term debt 0.53 0.42 0.53 0.42
Water 14.35 10.28 14.35 10.28
Irrigation 1.81 9.31 1.81 9.31
Sewer (0.14) 2.51 (0.14) 2.51
Process water reuse 3.22 1.40 3.22 1.40
Storm water 1.36 1.91 1.36 1.91
Total expenses 66.10 74.25 20.60 25.41 86.70 99.66
29.89 29.54 13.83 11.78 43.72 41.30
Transfers 0.54 (0.08) (0.54) - - (0.08)
Special Item: Gain on sale of asset 1.29 - 0.09 - 1.38 -
Change in net position 31.72 29.46 13.38 11.76 45.10 41.22
Prior period adjustment 1.51 0.02 (0.05) - 1.46 0.02
Total change in net position 33.23$ 29.48$ 13.33$ 11.76$ 46.56$ 41.24$
*See Note 5- and explanation of changes in useful lives.
City of Pasco's Change in Net Position (in millions)
Business-Type Activities Total Primary GovernmentGovernmental Activities
Increase in net position before transfers
18
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
GOVERNMENTAL ACTIVITIES – REVENUES BY SOURCE
GOVERNMENTAL ACTIVITIES – EXPENSES AND PROGRAM REVENUES
Business-Type Activities. 29% of the increase in the City of Pasco’s net position is related to
business-type activities. In 2019, the business type activities made up 38% of the City’s net
position. The net position for business-type activities has increased by $13.33 due to increase in
capital assets and decrease in liabilities. The City increased rates for Water, Sewer, Irrigation,
and Stormwater services by 3%, 4%, 3%, and 5% respectively. The City is embarking on
significant investments to manage the aging infrastructure and growth as reflected in City’s 2020-
2025 Capital Improvement Plan. Improvements will be funded by a combination of grants,
accumulated unrestricted fund balance, low interest loans, and revenue bonds.
Charges for
services
38%
Operating
grants &
contributions
2%Capital grants
&
contributions
8%
Property taxes
11%
Other taxes
35%
Investment
income and
miscellaneous
3%
Investment income
and miscellaneous
5%
Sources of Revenues 2019
Charges for
services
26%
Operating
grants &
contributions
2%
Capital grants
&
contributions
31%
Property taxes
8%
Other taxes
29%
Gain on sale of
asset
0%
Sources of Revenues 2018
-
5.00
10.00
15.00
20.00
25.00
30.00
35.00
MILLIONS2019 Expenses 2019 Revenue 2018 Expense 2018 Revenue
19
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
UTILITY ACTIVITIES – EXPENSES AND PROGRAM REVENUES COMPARISON
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 year 2019, the City of Pasco governmental funds reported combined ending
fund balances of $70.93, which is an increase of $30.50 from the prior year. Approximately 26%
of this total amount, $18.74 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 2019, unassigned
fund balance of the General Fund was $20.26. As a measure of the General Fund’s liquidity, it
may be useful to compare unrestricted, unassigned fund balance to total expenditures. This
represents 43.0% of total expenditures.
The overall fund balance of the City of Pasco’s General Fund increased during 2019 by $25.46 .
This total includes restricted LTGO bond balance of $18.57. Strong sales tax growth, enaction
banked property tax capacity, other growth-related revenues, as well as gaming taxes improved
the funds financial standing. Overall revenues increased by $6.43 (13.0%) and total expenditures
increased by $0.97 (2.1%). General fund tax revenues increased by $6.50 (3.5%). Property taxes
increased approximately 28.1% due to Council utilizing banked capacity for property taxes, new
construction and steady valuations. Sales taxes increased by 6.3% with the continued steady
economic recovery. The City restored an Accreditation Program Coordinator position during the
2019-2020 biennial budget preparation. During the Biennial Adjustment, Council approved 50%
of Deputy Fire Chief and 25% of a Staff Accountant salary and wages to be funded by the General
Fund.
(2.00)
-
2.00
4.00
6.00
8.00
10.00
12.00
14.00
16.00
Water Sewer Process Water
Reuse
Stormwater IrrigationMILLIONS
2019 Expenses 2019 Revenue 2018 Expense 2018 Revenue
20
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
The General Fund revenues of $55.80 exceeded expenditures of $47.58 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. The activity of the Water/Sewer Utility, a
major fund, is separately stated from that of the internal service funds. Unrestricted net position
of the utility fund at the end of 2019 was $17.40. A working capital ratio is the value of 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 2019, the utility is well positioned as it has current assets of
$35.55 available to meet its current liability obligations of $6.14, resulting in a working capital
ratio of 5.79. The reduction in current assets from year 2018 of $8.20 is mainly due to investment
in capital improvements by way of utilizing bond proceeds, loans, and accumulated fund balance.
The utility showed a gain before contributions and transfers of $9.37, an increase of $5.30 over
the prior year. This increase over the prior year’s operating income is primarily related to changes
to our accounting estimates for depreciable assets. During 2019, in conjunction with the City’s
effort to evaluate and plan for capital improvements, an effort was made to assess our existing
capital assets and their remaining useful lives. As this study of assets was completed in 2019, a
change in the estimated useful life for classes of assets resulted in a material impact to the utility’s
annual depreciation expense. Capital contributions to the fund for year 2019 amounted to $4.11.
As mentioned before, the City continues to invest in new infrastructure to support the growth of
its population and address aging infrastructure issues. The City has facility plans at various stages
of completion for its major services like water, sewer, and process water reuse. Additionally, also
with a goal of preparing for the future, a pilot program consisting of researching technology tied
to automatic meter reading (AMR) and advanced metering infrastructure (AMI) options for a
meter and service replacement program has been initiated. The goal of the program is the
replacement of water meters on an average of once every ten years.
General Fund Budgetary Highlights
City of Pasco adopted its first Biennial Budget for 2019-2020 period. The legal level of
appropriation is at the fund level and the authorization is for the true biennial period. The budget
by function is shown to provide information that is more detailed. As required by the Revised
Code of Washington (RCW), City adjusted the budget as necessary. The City anticipates to
remain within the current budget with some variances attributable to delays in the construction
of capital projects like the Fire Stations, as well as disruption in revenue sources due to the
COVID-19 pandemic.
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, 2019 amounts to $460.09 (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 $12.60 for governmental activities and an increase of $13.45 for business-type
activities.
Major capital asset activity during the current fiscal year included the following:
Capital spending in governmental funds for 2019 was $12.19: $1.28 for general
governmental purposes, $1.98 for public safety purposes, $7.52 for transportation
21
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
purposes, $0.03 for Economic development and $1.38 for culture and recreation purposes.
The largest projects for 2019 were Chapel Hill L.I.D $5.10 and City Hall Remodel $1.19
Capital spending in the utility fund (major component of business-activities) for 2019
was $13.30. The largest projects were Foster Wells Force Main at $4.33, Columbia East
Lift Station and Force Main at $2.85 and Harris Road Sewer Transmission Main at $2.74.
Additional information on the City of Pasco’s capital assets can be found in Note 5 starting on
page 54.
Long-term Debt. At the end of 2019, the City of Pasco had total outstanding debt of $72.24
million. Of this amount, $26.13 million comprised debt backed by the full faith and credit of the
government. $38.71 million of the City of Pasco bonded debt represents bonds secured primarily
by specified revenue resources (e.g. revenue bonds). The City has also received assistance in the
form of low interest loans from Department of Health, Department of Commerce, and Hanford
Area Economic Investment Fund (HAEIF). In 2019, the City issued a LTGO bond of $18.57
million for the construction of two fire stations, improvements to the Gesa Stadium and the City’s
contribution of the construction of the Tri-City Animal Shelter.
Additional information on the City of Pasco’s long-term liabilities can be found in Note 7 starting
on page 57 of this report.
Economic Factors and Next Year’s Budgets and Rates (amounts not in millions)
In 2019, the Pasco economy was stable and continued to grow. The City issued 2,755 building
permits, an increase of over 2.6% from the previous year. This represents approximately $268
million in construction value. Of the total permits, 585 were for new single-family residences,
which equates to $154 million in construction value. The average value of a new home in Pasco
was approximately $270,000 in 2019. This is a 28% increase in home value compared to
$210,000 in 2010. The strength of the City’s growing economy is confirmed by the Standard &
Poor’s rating the City’s 2019 General Obligation and most recently through their rating of the
2019 2018 2019 2018 2019 2018
Land 19.47$ 17.33$ 3.15$ 3.10$ 22.62$ 20.43$
Construction in process 17.65 15.74 10.45 13.65 28.10 29.39
Buildings and structures 33.71 32.54 46.63 33.13 80.34 65.67
Other improvements 3.83 2.89 0.44 0.19 4.27 3.08
Machinery and equipment 8.71 9.43 9.66 6.64 18.37 16.07
Infrastructure 174.96 167.80 131.44 131.61 306.40 299.41
Total capital assets 258.33$ 245.73$ 201.77$ 188.32$ 460.10$ 434.05$
Governmental Activities Total Primary GovernmentBusiness-Type Activities
City of Pasco's Capital Assets at Year-End (in millions)
(Net of Depreciation)
2019 2018 2019 2018 2019 2018
General Obligation Bonds 26.13$ 8.87$ 1.14$ 26.13$ 10.01$
Special Assessment Bonds - - - -
Loans & Notes - 7.40 8.00 7.40 8.00
Revenue Bonds - 38.71 40.76 38.71 40.76
26.13$ 8.87$ 46.11$ 49.90$ 72.24$ 58.77$
Governmental Activities Total Primary GovernmentBusiness-Type Activities
City of Pasco's Bonds and Notes
(in millions)
22
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
City’s 2020 Utility bond issue as AA-/Stable. The City’s ability to maintain its rating during a
time of unprecedented economic certainty and volatility due to the COVID-19 pandemic is
reflective of the City’s bright long and short-term economic prospects.
Businesses have continued making a significant investment in Pasco through new or existing
infrastructure. In total, the City received more than $98,000,000 investment in construction for
commercial and industrial purposes. Furthermore, a variety of commercial and industrial
construction such as; a new hangar, class A office space, and new retail spaces continue. In 2017,
voters approved a $99,500,000 school 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 accommodate in the
future, as well as the area’s commitment to providing a well-educated and technologically adept
workforce capable of meeting the future needs of regional, national, as well as international
employers. An elementary school valued at $13,000,000 completed construction in 2019. An
additional three (3) public schools were permitted in 2019, valued at a total $51,900,000. Pasco
School District is the largest employer in the City with over 2,000 employees.
The City is also home to Columbia Basin College, which provides two-year and four-year
degrees to students in the region. The college held its first classes in 1955, and from the initial
enrollment of 272 students to more than 6,800 students today, it continues to meet the higher
education needs of the community. It started the operation of a student housing building, which
provides 45 units to house 125 students; with the goal of building 375 single, double, and quad
units in the future. In 2019, the college was the third largest employer in Franklin County with
over 750 employees.
Road 68 Corridor continues to be an important economic activity center for the City. The area
has been growing each year, largely providing retail, restaurant, and accommodation services.
The area provides estimated 1,882 jobs, an increase of 42% since 2015. Preliminary permitting
discussions are underway for another hotel adjacent to the Pasco Sporting Complex and The
HAPO Center, an indication of its growing regional attraction.
The City is also working with landowners on developing the Broadmoor area, a location central
to the Tri-Cities region and a blank space ready for development. The City extended sewer
services to the area in the summer of 2019 and is in the process of completing the environmental
review process for the master planned development of a two-thousand-acre area encompassing
what is known as the Broadmoor Area. The development plan envisions the area to include a
combination of homes, condominiums, apartments, offices, stores, mixed-use and a
transportation system of bike/ped trails, transit and boulevards focused on connectivity and
walkability. The City expects significant economic development activity in this area in the near
future.
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.
23
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
BASIC FINANCIAL STATEMENTS
24
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
Governmental Business-Type Component Unit
Activities Activities Total
Pasco Public
Facility District
ASSETS
Current assets:
Cash & cash equivalents 45,414,594$ 16,071,756$ 61,486,350$ 70,215$
Restricted cash:
Program, grant, donations 2,203,458 2,203,458
Customer deposits 340,338 440,972 781,310
Capital development 7,348,675 7,348,675
Unspent bond proceeds 19,692,428 6,600,716 26,293,144
Permit and Plan Check 629,737 629,737
Debt service 1,093,509 1,072,654 2,166,163
Debt covenants 3,779,231 3,779,231
Investments 12,776,252 5,837,432 18,613,684
Receivables (net of allowances):
Taxes 5,214,347 5,214,347 110,201
Customers 2,870,968 2,301,326 5,172,294
Grants 414,741 2,523 417,264
Special assessment- current portion
Prepaids - 84,315 84,315
Inventories - 318,811 318,811
Total current assets 90,650,372 43,858,411 134,508,783 180,416
Noncurrent assets:
Restricted cash - Debt - - -
Special assessments 2,162,430 41,937 2,204,367
Net Pension asset 14,520,434 14,520,434
Net OPEB asset 2,270,659 2,270,659
Joint Ventures 1,347,726 1,347,726
Capital assets not being depreciated:
Land 19,473,173 3,149,049 22,622,222
Construction work in progress 17,651,905 10,452,939 28,104,844
Capital assets net of accumulated depreciation:
Buildings and structures 33,708,388 46,634,972 80,343,360
Other improvements 3,830,838 441,411 4,272,249
Machinery and equipment 8,708,297 9,655,181 18,363,478
Infrastructure 174,953,941 131,434,906 306,388,847
Total noncurrent assets 278,627,791 201,810,395 480,438,186 -
Total assets 369,278,163 245,668,806 614,946,969 180,416
DEFERRED OUTFLOWS OF RESOURCES
Pension related 2,771,603 467,590 3,239,193
Total deferred outflows of resources 2,771,603 467,590 3,239,193 -
LIABILITIES
Current liabilities:
Accounts payable 5,083,853 2,370,138 7,453,991 163,708
Deposits payable from restricted assets 340,338 440,973 781,311
Accrued interest payable from restricted assets - 202,412 202,412
Compensated absences - current 2,026,785 262,677 2,289,462
Loans due to other governments - current - 638,408 638,408
Bonds - current 1,481,851 2,236,541 3,718,392
Total current liabilities 8,932,827 6,151,149 15,083,976 163,708
Noncurrent liabilities:
Compensated absences 1,502,526 48,100 1,550,626
Total OPEB liability 12,231,327 12,231,327
Loans due to other governments - 6,777,298 6,777,298
Bonds payable (net of premium)28,983,242 38,202,889 67,186,131
Net Pension liability 3,420,483 1,259,147 4,679,630
Total noncurrent liabilities 46,137,578 46,287,434 92,425,012
Total liabilities 55,070,405 52,438,583 107,508,988 163,708
DEFERRED INFLOWS OF RESOURCES
Pension related 7,105,613 875,998 7,981,611
OPEB related 333,409 333,409
Deferred revenues - 1,598 1,598
Total deferred inflows of resources 7,439,022 877,596 8,316,618 -
NET POSITION
Net investment in capital assets 247,553,877 160,514,038 408,067,915
Restricted for:
Program, grant, donations 72,768 72,768
Streets and boulevards 8,980,194 8,980,194
Litter and housing abatement 474,250 474,250
Park development 2,997,734 2,997,734
Permit & Plan Check Fee 629,737 629,737
Culture and recreation 108,252 108,252
Capital improvement 9,123,369 9,123,369
Economic development 71,637 71,637
Pensions 14,520,434 14,520,434
State Law WAC 2,129,808 2,129,808
Other Postemployment Benefits 2,270,659 2,270,659
Debt repayment/guarantee 20,036,338 6,600,716 26,637,054
Unrestricted net position 571,282 25,705,463 26,276,745 16,708
Total Net Position 309,540,339$ 192,820,217 502,360,556$ 16,708$
The notes to the financial statements are an integral part of this statement.
Statement of Net Position
December 31, 2019
25
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
Charges for Operating Capital
Services, Fines &Grants and Grants and Governmental Business-Type Component Unit
Functional Programs
Expenses Licenses Contributions Contributions Activities Activities Total Pasco Public
Facility District
Primary Government:
Governmental activities:
General government 9,039,463$ 8,448,857$ 46,570$ -$ (544,036)$ -$ (544,036)$ -$
Public safety 31,003,077 11,263,298 675,110 - (19,064,669) - (19,064,669) -
Transportation 11,770,120 3,859,378 - 7,966,628 55,886 - 55,886 -
Natural & economic environment 7,807,430 10,306,364 734,264 - 3,233,198 - 3,233,198 -
Culture and recreation 5,953,440 3,186,573 14,436 10,539 (2,741,892) - (2,741,892) -
Interest on long term debt 526,169 (526,169) - (526,169) -
Total governmental activities 66,099,699 37,064,470 1,470,380 7,977,167 (19,587,682) - (19,587,682) -
Business-type activities:
Water 14,340,208 11,853,258 - 1,659,993 - (826,957) (826,957) -
Irrigation 1,811,366 1,701,636 - 113,801 - 4,071 4,071 -
Sewer**(136,696) 10,065,478 - 2,192,720 - 12,394,894 12,394,894 -
Process Water Reuse 3,221,517 4,040,449 - - - 818,932 818,932 -
Storm Water 1,358,525 2,011,650 7,852 141,057 - 802,034 802,034 -
Total business-type activities 20,594,920 29,672,471 7,852 4,107,571 - 13,192,974 13,192,974 -
Total primary government 86,694,619$ 66,736,941$ 1,478,232$ 12,084,738$ (19,587,682) 13,192,974 (6,394,708) -
Component units
Pasco Public Facility District
Total component units 625,675$ 20,000$ -$ -$ (605,675)
General Revenues:
Taxes:
Property taxes 10,697,869 10,697,869
Sales taxes 17,750,533 17,750,533 594,634
B&O taxes 11,627,957 11,627,957
Excise taxes 4,830,108 4,830,108
Intergovermental 3,649,236 3,649,236
Investment income and miscellaneous 920,453 643,068 1,563,521 716
Transfers 540,462 (540,462) -
Gain on sale of asset 1,290,215 85,000 1,375,215
Total general revenues and transfers 51,306,833 187,606 51,494,439 (10,325)
Change in net position 31,719,151 13,380,580 45,099,731 (10,325)
277,821,188 179,439,637 457,260,825 27,033
Net position - ending 309,540,339$ 192,820,217$ 502,360,556$ 16,708$
* see note 17 for prior period adjustment
**Accounting change of estimates in capital assets
The notes to the financial statements are an integral part of this statement.
Statement of Activities
For the Year Ended December 31, 2019
Net position - beginning as restated*
Program Revenues
Net Revenue (Expenses) and Changes in Net Position
Primary Government
26
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
General Construction Ambulance
Local
Improvement
District Loans
Other
Governmental Total
ASSETS
Cash & cash equivalents 12,060,758$ 2,166,600$ 1,340,312$ -$ 20,824,617$ 36,392,287$
Restricted cash
Program, grant, donation 72,768 882 73,650
Customer deposits 212,160 116,842 11,336 340,338
Unspent bond proceeds 18,572,957 1,119,471 19,692,428
Permit and Plan Check 629,737 - 629,737
Debt service 871,786 221,723 1,093,509
Investments 3,613,316 6,980,517 10,593,833
Receivables (net of allowances):
Taxes 4,458,848 755,499 5,214,347
Customers 1,726,986 731,309 411,169 2,869,464
Interfund loans 2,517,590 78,471 2,596,061
Grants 57,695 165,250 36,525 155,271 414,741
Special assessments & loans 2,034,210 128,220 2,162,430
Due from other funds 252,000 - 252,000
Total assets 44,174,815 2,331,850 2,224,988 2,905,996 30,687,176 82,324,825
LIABILITIES
Accounts payable 1,626,282 1,885,817 170,183 10,869 1,177,142 4,870,293
Interfund loans payable 2,146,061 450,000 2,596,061
Due to other funds 252,000 252,000
Deposits payable from restricted assets 212,160 116,842 11,336 340,338
Total liabilities 1,838,442 1,885,817 287,025 2,156,930 1,890,478 8,058,692
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue- property taxes 178,962 178,962
Unavailable revenue- special assessments 7,183 7,183
Unavailable revenue- court receivables 897,451 897,451
Unavailable revenue- other 8,482 2,004,744 240,151 2,253,377
Total deferred inflows of resources 1,084,895 - - 2,004,744 247,334 3,336,973
FUND BALANCES (DEFICITS)
Restricted
Program, grant, donation 72,768 72,768
Street and boulevard 8,980,194 8,980,194
Litter & housing abatement 474,250 474,250
Park development 2,997,734 2,997,734
Permit & Plan Check Fee 629,737 629,737
Cultural and recreation 108,252 108,252
Capital improvements 9,123,369 9,123,369
Economic development 71,637 71,637
Debt repayment/guarantee 18,572,957 1,463,381 20,036,338
Committed
Landfill claims 407,344 407,344
Special revenue funds 1,937,963 19,983 5,576,098 7,534,044
Red Flex 75,617 75,617
Construction projects 446,033 446,033
Assigned
Future Project-Community Center 1,230,430 1,230,430
Unassigned 20,262,625 (1,275,661) (245,551) 18,741,413
Total fund balances 41,251,478 446,033 1,937,963 (1,255,678) 28,549,364 70,929,160
Total liabilities, deferred inflows of resources
and fund balances 44,174,815$ 2,331,850$ 2,224,988$ 2,905,996$ 30,687,176$
Amounts reported for governmental activities in the statements of net position
are different because:
Long-term assets used in governmental activities are not financial resources and
therefore are not reported in the government funds.271,797,923
Deferred pension outflows are not available to pay for current period expenditures and
therefore are not reported in the governmental funds.2,727,105
Long-term liabilities are not due and payable in the current period and therefore
are not reported in the funds. Proceeds from new debt and repayments of exisiting
Debts are recorded as resources and expenditures for fund reporting but are additions
and reductions of liabilities for government wide reporting.(52,953,144)
Deferred inflows and proceeds from asset sales in governmental funds is susceptible to full
accrual therefore are not reported in the Statement of Net Activities. Other expenses are
susceptible to full accrual and are reported in the Statement of Net Activities but not
in the governmental funds.(955,719)
Internal Service funds are used by management to charge the costs of certain
activities to individual funds. The assets and liabilities of some internal service funds
are included in the governmental activities in the statement of net position. Interfund loans
between governmental activities are excluded.17,995,014
Net position of governmental activities ( see page 25)309,540,339$
The notes to the financial statements are an integral part of this statement.
Balance Sheet
Governmental Funds
December 31, 2019
27
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
General Fund Construction Ambualnce
Local
Improvement
District Loans Other Governmental Total
REVENUES
Taxes 40,991,693$ -$ -$ 3,917,781$ 44,909,474$
Licenses and permits 2,756,947 582,445 3,339,392
Intergovernmental revenue 2,553,214 1,060,204 2,477,499 2,829,951 8,920,868
Charges for services 7,493,163 6,469,995 8,528,934 22,492,092
Fines and forfeitures 1,014,446 183,718 1,198,164
Miscellaneous revenue 939,713 - 26,444 3,357,589 2,000,087 6,323,833
Total revenues 55,749,176 1,060,204 8,973,938 3,357,589 18,042,916 87,183,823
EXPENDITURES
Current:
General government 10,914,663 473,388 - - - 11,388,051
Public safety 26,417,642 70,264 7,622,773 - 34,110,679
Transportation 1,665,818 56,084 - 3,480,090 5,201,992
Natural & economic environment 2,371,218 - - 6,306,360 8,677,578
Culture and recreation 4,760,769 67,229 - 2,621,041 7,449,039
Capital outlay:-
General government 23,018 1,253,261 - - 1,276,279
Public safety 121,380 1,838,457 18,735 - 1,978,572
Transportation - 7,460,071 - 61,586 7,521,657
Natural & economic environment - 71 - 31,893 31,964
Culture and recreation 7,439 1,299,366 - 72,185 1,378,990
Debt service:-
Principal 830,000 - - 830,000
Interest 468,413 48,680 9,076 - 526,169
Total expenditures 47,580,360 12,518,191 7,690,188 9,076 12,573,155 80,370,970
Excess of revenues over (under) expenditures 8,168,816 (11,457,987) 1,283,750 3,348,513 5,469,761 6,812,853
OTHER FINANCING SOURCES (USES)
Insurance recoveries 59,478 - 10 51,233 110,721
Proceeds from sale of asset 1,045,223 - 311,766 1,356,989
Debt proceeds - bond issued 16,445,000 1,645,000 18,090,000
Debt proceeds - premium on bond issued 3,738,905 355,000 4,093,905
Transfers in 231,600 11,821,158 1,120,000 2,807,933 15,980,691
Transfers out (4,210,210) - - (4,538,203) (6,699,200) (15,447,613)
Total other financing sources (uses)17,309,996 11,821,158 1,120,010 (4,538,203) (1,528,268) 24,184,693
Net change in fund balances 25,478,812 363,171 2,403,760 (1,189,690) 3,941,493 30,997,546
Fund balances - beginning as restated*15,772,666 82,862 (465,797) (65,988) 24,607,871 39,931,614
Fund balances - ending 41,251,478$ 446,033$ 1,937,963$ (1,255,678)$ 28,549,364$ 70,929,160$
* see note 17 for prior period adjustment
The notes to the financial statements are an integral part of this statement.
Statement of Revenues, Expenditures and Changes in Fund Balances
Governmental Funds
For the Year Ended December 31, 2019
28
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
Net change in fund balances - total governmental funds 30,997,546$
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.14,121,949
The issuance of long-term debt (e.g. bonds, notes) provides current financial resources to
governmental funds, while the repayment of the principal of long-term debt consumes current
financial resources of governmental funds. Neither transaction, however, has any affect on net
assets. (21,353,905)
Revenues reported in the statement of activies that do not provide current financial resources
are not reported as revenues in the funds.1,709,891
Some expenses such as for compensated absences, pension expense, gain on disposal of assets, etc.
are reported in the Statement of Net Activities do not the use of current financial resources and, therefore, 5,796,513
are not reported as expenditures in the governmental funds.
Internal service funds are used by management to charge the costs of certain activities to
individual funds. The net revenue of certain activity is reported with governmental
activities. Interfund transfers between govermental funds are eliminated in the Statement of Net Activities.447,157
Change in net position of governmental activities (see page 26)31,719,151$
The notes to the financial statements are an integral part of this statement.
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, 2019
29
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
Variance to
2019 Final Budget
Original Final Actual Over (Under)
REVENUES
Taxes 74,418,849$ 81,331,099$ 40,991,693$ (40,339,406)$
Licenses and permits 4,459,000 4,459,000 2,756,947 (1,702,053)
Intergovernmental 4,737,868 4,737,868 2,553,214 (2,184,654)
Charges for services 15,417,018 15,417,018 7,493,163 (7,923,855)
Fines and forfeitures 1,811,200 1,811,200 1,014,446 (796,754)
Miscellaneous 1,195,800 1,195,800 939,713 (256,087)
Total revenues 102,039,735 108,951,985 55,749,176 (53,202,809)
EXPENDITURES
Current:
General government 20,364,016 19,737,016 10,914,663 (8,822,353)
Public safety 53,558,905 55,172,905 26,417,642 (28,755,263)
Transportation 3,886,421 3,636,821 1,665,818 (1,971,003)
Natural & economic environment 4,577,273 4,773,273 2,371,218 (2,402,055)
Culture and recreation 11,681,606 12,113,356 4,760,769 (7,352,587)
Capital outlay:
General government 589,702 589,702 23,018 (566,684)
Public safety 150,000 150,000 121,380 (28,620)
Culture and recreation 7,439 7,439
Debt service:
Principal 2,778,734 2,778,734 830,000 (1,948,734)
Interest 2,446,900 2,446,900 468,413 (1,978,487)
Total expenditures 100,033,557 101,398,707 47,580,360 (53,818,347)
Excess of revenues over (under) expenditures 2,006,178 7,553,278 8,168,816 (107,021,156)
OTHER FINANCING SOURCES (USES)
Debt proceeds - bond Issued 17,250,000 17,250,000 16,445,000 (805,000)
Debt proceeds - premium on bond Issued - - 3,738,905 3,738,905
Insurance recoveries - - 59,478 59,478
Proceeds from sale of asset - - 1,045,223 1,045,223
Transfers in 455,200 455,200 231,600 (223,600)
Transfers out (18,999,116) (24,766,116) (4,210,210) 20,555,906
Total other financing uses (1,293,916) (7,060,916) 17,309,996 24,370,912
Net change in fund balances 712,262 492,362 25,478,812 (82,650,244)
Fund balances - beginning as restated* 13,290,429 15,790,933 15,772,666 (18,267)
Fund balances - ending 14,002,691$ 16,283,295$ 41,251,478$ (82,668,511)$
Interfund loan activity included for budget purposes but not
included in Statement of Revenues, Expenditures and Changes
in Fund Balance -
Fund balances - ending 41,251,478$
* see note 17 for prior period adjustment
The notes to the financial statements are an integral part of this statement.
Statement of Revenues, Expenditures, and Changes in Fund Balances-Budget to Actual
General Fund
For the Year Ended December 31, 2019
Budget Amounts
2019/2020 Biennial
30
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
Water/Sewer Internal
Utility Service
ASSETS
Current assets:
Cash and cash equivalents 13,430,213$ 11,663,850$
Restricted cash equivalents:
Self Insured reserve 2,129,808
Customer deposits 440,972 -
Capital development 7,348,675 -
Unspent bond proceeds 6,600,716 -
Debt Service 1,072,654 -
Debt Covenants 3,779,231 -
Investments 3,947,879 4,071,972
Receivables (net of allowances):
Customers 2,301,326 1,504
Grants 2,523 -
Prepaid-Other 84,315 -
Inventory 318,811 -
Total current assets 39,327,315 17,867,134
Noncurrent assets:
Special assessments 41,937 -
Capital assets not being depreciated:
Land 3,149,049 -
Construction work in progress 10,452,939 -
Capital assets net of accumulated depreciation:
Buildings and structures 46,634,972 -
Other Improvements 441,411 -
Machinery and equipment 8,279,069 6,407,340
Infrastructure 131,434,906 -
Total noncurrent assets 200,434,283 6,407,340
Total assets 239,761,598 24,274,474
DEFERRED OUTFLOWS
Pension related 467,590 44,498
467,590 44,498
LIABILITIES
Current liabilities:
Accounts payable 2,362,429 221,269
Other liabilities
Customer deposits payable from restricted assets 440,973
Accrued interest payable from restricted assets 202,412
Compensated absences - current portion 262,677 -
Loans due to other governments - current portion 638,408
Revenue bonds - current portion 2,236,541
Total current liabilities 6,143,440 221,269
Noncurrent liabilities:
Compensated absences 48,100 -
Loans due to other governments 6,777,298 -
Current Portion Loan PayableRevenue bonds payable (net of premium)38,202,889 -
Net pension liability 1,259,147 119,826
Total noncurrent liabilities 46,287,434 119,826
Total liabilities 52,430,874 341,095
DEFERRED INFLOWS
Deferred revenue 1,598
Pension related 875,998 83,364
Total deferred inflows 877,596 83,364
NET POSITION
Net investment in capital assets 159,137,926 6,407,340
Restricted for State Law WAC - 2,129,808
Debt repayment/guarantee 6,600,716
Unrestricted 21,182,076 15,357,365
Total net position 186,920,718$ 23,894,513$
5,899,499
Net position of business-type activities (see page 25) 192,820,217$
The notes are an integral part of this statement.
Statement of Net Position
Proprietary Funds
December 31, 2019
Adjustment for the net effect of the current year
activity between the internal service funds and the
enterprise fund
Total deferred outflows
31
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
Business Type
Water/Sewer Internal
Utility Service
OPERATING REVENUES
Permits 211,934$ -$
Charges for services 29,460,037 10,231,637
Fines & Penalties 500 -
Total operating revenues 29,672,471 10,231,637
OPERATING EXPENSES
Depreciation 1,354,319 1,116,339
Salaries and wages 3,827,189 429,637
Personnel benefits 1,607,406 176,636
Supplies 1,627,982 889,868
Services 10,748,526 7,209,856
Total operating expenses 19,165,422 9,822,336
OPERATING INCOME 10,507,049 409,301
NONOPERATING REVENUES (EXPENSES)
Investment income 546,108 319,687
Miscellaneous 48,747 152,638
Rents and leases 48,213 -
Grant 7,852 -
Gain (Loss) sale of asset (55,458) -
Sale of Asset 140,458 -
Gain (Loss) on disposal of property (138,839) (256)
Interest expense (1,732,258) -
Total nonoperating revenues (expenses)(1,135,177) 472,069
Income (loss) before contributions and transfers 9,371,872 881,370
Capital contributions 4,107,571 -
Transfers in - 7,384
Transfers out (533,078) (7,384)
Changes in net position 12,946,365 881,370
Net position - beginning as restated*173,974,353 23,013,143
Net position - ending 186,920,718 23,894,513$
Changes in net position 12,946,365
Adjustment for the net effect the current year activity between
the internal service funds and the enterprise fund 434,215
Change in net position of business-type activities (page 26)13,380,580$
* see note 17 for prior period adjustment
The notes to the financial statements are an integral part of this statement.
Statement of Revenues, Expenses, and Changes in Net Position
Proprietary Funds
For the Fiscal Year Ended 12/31/2019
32
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
Water/Sewer Internal
Utility Service
CASH FLOW FROM OPERATING ACTIVITIES
Receipts from customers 30,096,662$ 10,231,345$
Payments to employees (5,594,898) (598,542)
Payments to suppliers (12,029,920) (8,138,625)
Net cash provided by (used for) operating activities 12,471,844 1,494,178
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:-
Grants O&M 7,852 -
Miscellaneous 48,747 152,638
Rents and leases 48,213 -
Net cash provided from noncapital financial activities 104,812 152,638
CASH FLOW FROM CAPITAL AND RELATED FINANCING
ACTIVITIES
Proceeds from sale of assets 140,458 -
Gain on Sale of asset (55,458) -
Acquisition and construction of capital assets (13,492,709) (244,076)
Principal paid on capital debt (3,775,583) -
Interest paid on capital debt (1,756,216) -
Bond proceeds received (121,541) -
Transfers in (out) for capital (533,078) -
Capital charges 2,331,216
Capital grant and contribution proceeds 1,033,157 -
Net cash provided by (used for) capital and related financing activities (16,229,754) (244,076)
CASH FLOWS FROM INVESTING ACTIVITIES
Investment income - 428,388
Purchase of investments (590,654) 346,466
Interest on investments 546,108
Net cash provided from investing activities (44,546) 774,854
Net increase (decrease) in cash and cash equivalents (3,697,644) 2,177,594
Beginning cash and cash equivalents 36,370,105 11,616,064
Ending cash and cash equivalents 32,672,461 13,793,658
Reconciliation of operating income (loss) to net cash provided by
(used for) operating activities:
Net Operating Income 10,507,049 409,301
Adjustment to reconcile operating income (loss) to net cash provided by
(used for ) operating activities:
Depreciation expense 1,354,319 1,116,339
(Increase) decrease in customer receivables 376,128 (292)
(Increase) decrease in inventories (65,524) -
Increase (decrease) in accounts payable 412,112 (38,901)
(Decrease) increase in accounts customer deposits payable 48,063
(Decrease) increase in compensated absences 86,380
(Increase) decrease in pension deferred outflow (138,153) (18,518)
Increase (decrease) in pension liability (317,910) (4,545)
Increase (decrease) in pension deferred inflow 209,380 30,794
Net cash provide by (Used for) Operating Activities 12,471,844$ 1,494,178$
NON CASH ACTIVITIES
Contributions of capital assets 1,773,832 -
Total noncash activities 1,773,832$ -$
The notes to the financial statements are an integral part of this statement.
Statement of Cash Flows
Proprietary Funds
For the Fiscal Year Ended 12/31/2019
33
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
Pension and Other
Post-Employment Cemetery Custodial
Benefits Perpetual Funds
ASSETS
Cash & cash equivalents 450,005$ 557,884$ 101,449$
Receivables
Interest 37,025 -
Loan 10,869 -
Taxes for other governments 110,201
Investments
Federal Agency 15,070 -
Mutual Funds 5,984,694 -
Total assets 6,497,663 557,884 211,650
LIABILITIES
Accounts Payable 163,708
Due to other governments - - 47,942
Total liabilities - - 211,650
NET POSITION RESTRICTED FOR:
Pensions 3,027,021 - -
Postemployment benefits other than pensions 3,470,642
Individuals, organizations and other governments 557,884 87,951
TOTAL NET POSITION 6,497,663 557,884 87,951
The notes to the financial statements are an integral part of this statement.
Statement of Net Position
Fiduciary Funds
December 31, 2019
34
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
Pension and Other
Post-Employment
Benefits
Cemetry
Perpetual
Custodial
Funds
ADDITIONS
Taxes 81,458$ -$
Charge for Service 19,594
Interest, dividends, and other 1,231,214 7,056 996
Sales tax collections for other governments 594,634
Intergovernmental grants and other payments - - 65,239
Total Additions 1,312,672 26,650 660,869
DEDUCTIONS
Pension benefits 131,781 -
Medical premiums 87,540 -
Capital 45,239
Payments of sales tax to other governments 594,835
Services 3,917 - 30,840
Total deductions 223,238 - 670,914
Change in net position 1,089,434 26,650 (10,045)
Net position - beginning 5,408,229 531,234 97,996
Net position - ending 6,497,663$ 557,884$ 87,951$
The notes to the financial statements are an integral part of this statement.
Statement of Changes
in Fiduciary Net Position
For the year ended December 31, 2019
Trust Funds
35
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
36
City of Pasco, Washington 2019 Comprehensive Annual Financial 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 35.57 of the Revised
Code of Washington for the purposes of acquiring, constructing, operating and
financing one or more regional centers through cooperative and joint ventures with the
City of Kennewick. The PFD is discreetly presented in the component unit column in
the government-wide financial statements to emphasize that is a legally separate entity.
Complete separate financial statements for the District may be obtained from the City of
Pasco, P.O. Box 293, Pasco, WA 99301.
B. Basis of Presentation - Government-Wide and Fund Financial Statements
The government-wide financial statements (i.e., the statement of net position and the
statement of activities) report information on all of the non-fiduciary activities of the
primary government and its component unit. For the most part, the effect of inter-fund
activity has been removed from these statements. Governmental activities, which
normally are supported by taxes and intergovernmental revenues, are reported
separately from business-type activities, which rely to a significant extent on fees and
charges for service.
The statement of activities demonstrates the degree to which the direct expenses of a
given function or segment is offset by program revenues. Direct expenses are those that
are clearly identifiable with a specific function or segment. Our policy is to allocate
indirect costs to a specific function or segment. Program revenues include 1) charges to
customers or applicants who purchase, use, or directly benefit from goods, services, or
privileges provided by a given function or segment and 2) grants and contributions that
are restricted to meeting the 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.
37
City of Pasco, Washington 2019 Comprehensive Annual Financial 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.
Ambulance Services Fund – Fund is used to account for all activities related to
providing medical services, including ambulance transports to the residents of the
City. Revenues sources generated from service fees and ambulance utility rates.
LID Loan Fund – Fund is used to account for the resources accumulated and
payments made for Local Improvement District related debt.
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.
38
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
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.
Custodial 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 the Pasco
Public Facility District.
C. Measurement Focus, Basis of Accounting
Government-wide financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting, as are the proprietary fund and
fiduciary fund financial statements. Revenues are recorded when earned and expenses
are recorded when a liability is incurred, regardless of the timing of related cash flows.
Property taxes are recognized as revenues in the year for which they are levied. Grants
and similar items are recognized as revenue as soon as all eligibility requirements
imposed by the provider have been met.
Governmental fund financial statements are reported using the current financial
resources measurement focus and the modified accrual basis of accounting. Revenues
are considered to be available when they are collectible within the current period or
soon enough thereafter to pay liabilities of the current period. For this purpose, the City
considers revenues to be available if they are collected within 60 days of the end of the
current fiscal period. The City considers property taxes as available if they are collected
within 60 days after year end. Expenditures generally are recorded when a liability is
incurred, 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. Only the portion of special assessment receivable due within the current
fiscal period is considered to be susceptible to accrual as revenue of the current period.
All other revenue items are considered to be measurable and available only when cash
is received by the City.
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
39
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
services, administrative expenses, and depreciation on capital assets. All revenues and
expenses not meeting this definition are reported as non-operating revenues and
expenses.
D. Budgetary Information
1. Scope of Budget
Biennial appropriated budgets are adopted for the general fund and special revenue funds
on a modified accrual basis. Budgets for debt service and capital project funds are adopted
at the level of the individual debt issue or project and for fiscal periods that correspond to
the lives of debt issues or project and for fiscal periods that correspond to the lives of debt
issues or projects. The City also adopts appropriated budgets for proprietary and internal
service funds as “management budgets”. All budgets are adopted at the fund level.
Appropriations for all funds lapse at the end of the biennium. Budgets for capital outlays
are re-appropriated until the purpose of the appropriation has been accomplished or
abandoned.
2. Amending the Budget
The City Manager is authorized to transfer budgeted amounts within the funds.
However, any revisions that alter the total appropriations of a fund, or which affects the
number of authorized employee positions, salary ranges, hours, or other conditions of
employment must be approved by the City Council.
When City Council determines it is in the best interest of the City of Pasco to increase or
decrease the appropriation for a particular fund, it may do so by ordinance approved by
one more than the majority after holding public hearing(s).
The budget amounts shown in the financial statements are the final authorized amounts
as revised during the year.
The financial statements contain the original and final budget information. The original
budget is the first complete appropriated budget. The final budget is the original budget
adjusted by all reserves, transfers, allocations, supplemental appropriations, and other
legally authorized changes applicable for the fiscal year.
Excess of Expenditures over Appropriations
Neither the General Fund, nor any major special revenue funds, reported expenditures in
excess of budgeted appropriation.
Deficit Fund Net Position
The LID Loan Fund, a major debt service fund of the City, ended the year with a negative
fund balance of ($1,255,678). 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
40
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
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 Rivershore Trail & Marina Maintenance Fund, a nonmajor special revenue fund of
the City, ended the year with a negative fund balance of ($293,800). The negative fund
balance is a result of the need to rebuild a marina dock to due weather related damage.
There is an outstanding inter-fund loan liability used to fund the repairs.
The Animal Control Fund, a nonmajor special revenue fund of the City, ended the year
with a negative fund balance of ($14,989). The negative fund balance is a result of
operation expenses exceeded revenues.
E. Assets, Liabilities, Deferred Inflows, Deferred Outflows, Fund Balance/Net Position
1. Cash and Cash Equivalents
It is the City’s policy to invest temporary cash surpluses. As of December 31, 2019, the
City had invested $ 57,684,453 with the Washington State Local Government
Investment Pool (LGIP). These investments are short-term investments of residual
cash. This amount is classified on the Statement of Net Position as cash and cash
equivalents. The interest earned on these investments is prorated to the various funds
based upon their ownership of invested cash.
For purposes of the statement of cash flows, the City considers all highly liquid
investments (including restricted assets) with a maturity of three months or less when
purchased to be cash equivalents.
2. Investments See (Note 3, Deposits and Investments)
3. Receivables
Taxes receivable consist of property taxes, sales taxes, business and occupation taxes,
gambling 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.
Special assessments are levied against certain property owners when their property is the
beneficiary of a City managed project. Based upon each property’s proportional share of
the improvement an assessment is levied. When levied a receivable in recorded. Special
assessments receivable consists of current, and any delinquent, assessments and related
interest and penalties. As of December 31, 2019, $10,744 of special assessments
receivable were delinquent.
Customer accounts receivables consist of amounts owed from private individuals or
organizations for goods and services, including amounts owed for which billings have
not been prepared. Uncollectible amounts, except in two instances, are considered
immaterial and the direct write-off method is used. The exceptions are in the
41
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
ambulance fund and revolving abatement fund. An allowance is calculated based on
historical write-offs. The total allowance recorded city wide as of December 31, 2019
is $113,209.
Other receivables include municipal court receivables related to legal fines and charges
and amounts due the City related to organizations or public entities with which the City
has entered contractual relationships. The municipal court receivable is $10,907,028 of
which $10,009,577 is not expected to be collected. Only the net receivable of $897,451
is recorded in the financial statements. The portion that is calculated as uncollectible is
based upon the year’s collection rate. Of the receivables derive based upon contractual
relationships they are the result of the provision of working funds or activity that
created revenues that the City had not received as of yearend 2019.
4. Amounts Due to and from Other Governments, Interfund Loans and Advances
Receivable
Activities between funds that are representative of lending/borrowing arrangements
outstanding at the end of the fiscal year are referred to as either interfund loans
receivable/payable or advances to/from other funds. All other outstanding balances
between funds are reported as due to/from other funds. Any residual balances
outstanding between the governmental activities and business-type activities are
reported in the government-wide financial statements as internal balances. A separate
schedule of interfund loans receivable and payable is furnished in Note 6, Interfund
Balances and Transfers.
Advances between funds, as reported in the fund financial statements, are offset by a
fund balance reserve account in applicable governmental funds to indicate that they are
not available for appropriation and are not expendable available financial resources.
5. Inventories
Inventories in governmental funds consist of expendable supplies held for consumption.
The cost is recorded as an expenditure at the time purchase. There are currently no
inventories in governmental funds. Inventories in proprietary funds consist of materials
and supplies used in both maintenance and capital activities. Inventories in proprietary
funds are valued using a last in first out (LIFO) method.
6. Restricted Assets and Liabilities
In accordance with utility bond ordinances, state law, or other agreements, separate
restricted assets have been established. These accounts contain resources restricted for
use only on specific activity. Some examples are capital construction activity, debt
service, or reimbursements of customers’ deposits. The current portion of related
liabilities is shown as Payables from Restricted Assets. Specific debt service reserve
requirements are described in Note 8, Long-Term Debt.
The restricted assets of the enterprise funds are composed of the following:
42
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
7. 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 $5,000 and an estimated useful
life in excess of two years. Useful life estimates are periodically reassessed and adjusted
based on actual experience and/or asset condition assessments. See Note 5, Capital
Assets and CWIP for details on changes to useful life and depreciation. Such assets are
recorded at historical cost or estimated historical cost if purchased or constructed.
Donated capital assets are recorded at acquisition value at the date of donation.
The City reports infrastructure assets on a network and subsystem basis. Such assets are
recorded at historical cost if purchased or constructed. Additions, improvements and other
capital outlays that significantly extend the useful life of an asset are capitalized. The cost
of normal maintenance and repairs and street preservation activities that do not add to the
value of the asset or materially extend asset lives are not capitalized. Assets are
depreciated over their useful lives using the straight line depreciation method.
Major outlays for capital assets and improvements are reported as Construction Work in
Progress as projects are constructed. Interest, if material to the cost of the asset that is
incurred during the construction phase of the capital assets of business-type activities is
included as part of the capitalized value of the assets constructed. Capital Assets and
improvements are capitalized once the project is completed.
Capitalization thresholds, the dollar value above which an asset acquisitions are added
to the capital asset accounts and estimated useful lives of capital assets are as follows:
Customer Deposits 440,973$
Unspent Bond Proceeds 6,600,716
Capital Development:
Water/Sewer capital expansion contributions 6,244,240
Water Rights 1,104,435$
Assets
Useful Lives
(Years)
Land N/A
Building & Structures 5-50
Other Improvements 5-100
Machinery & equipment & vehicles 2-50
43
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
8. 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 2019 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.
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.
9. 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.
City-wide, excluding Firefighters and Police
Sick leave may be accumulated up to a maximum of 960 hours for all employees except
firefighters and police. Upon resignation, retirement or death; sick leave is payable at a
rate of 25% of accrued hours up to a maximum accrual base of 720 hours. Vacation leave
may be accumulated up to a maximum of one and a half times the employee’s annual
vacation accrual rate and is payable upon resignation, retirement or death.
44
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
Firefighters
Sick leave may be accumulated up to a maximum of 1,440 hours. For firefighters with less
than 20 years of service with the City, sick leave is payable at a rate of 25% of accrued
hours up to a maximum accrual base of 840 hours, upon resignation, retirement or death.
For firefighters with 20 years or more of service with the City, sick leave is payable at a
rate of 50% of accrued hours up to a maximum accrual base of 840 hours. Vacation leave
may be accumulated up to a maximum of two times the employee’s annual vacation
accrual rate and is payable upon resignation, retirement or death.
Police
Sick leave may be accumulated up to a maximum of 1,200. Upon resignation or death;
sick leave is payable at a rate of 25% of accrued hours up to a maximum accrual base of
720 hours. Upon retirement, sick leave is payable at a rate of 35% up to a maximum of
1,200 hours. Vacation leave may be accumulated up to a maximum of two times the
employee’s annual vacation accrual rate and is payable upon resignation, retirement or
death.
10. Pensions and OPEB
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.
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 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.
11. 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.
45
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
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.
12. 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 deci sion 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 relatin g 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.
46
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
Restricted fund balance - includes amounts that can be spent only for the specific purpose
stipulated by external resource providers such as for grant providers, bondholders, higher
levels of government, or through enabling legislation.
Committed fund balance – includes amounts that can be used only for the specific purposes
determined by a formal action of the city council. Commitments may be changed or lifted
only by the City Council taking the same formal action that imposed the constraint
originally.
Assigned fund balance – includes amounts intended to be used by the government for
specific purposes. Intent can be expressed by the governing body or by an official
designated by the governing body to which the governing body designates authority.
Unassigned fund balance - includes amounts that are available for any purpose.
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:
47
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
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
Joint Venture 1,144,343$
Land 17,336,555
Construction in process 15,738,766
Building 32,537,160
Other Improvements 2,891,890
Equipment 3,813,445
Infrastructure 167,788,570
Pension Assets 12,171,481
OPEB Assets 1,140,935
Current year change in pension asset 2,348,953
Current year change in OPEB asset 1,129,724
Current year spending in construction work in progress 11,851,226
Current year capital purchases (29,613)
Current year capital donations received 6,916,963
Current year increase in Joint Venture 203,383
Current year depreciation (5,185,858)
Net adjustment to add to government wide fund balance to arrive at
Net Position Governmental Activities 271,797,923$
Beginning Balance of Capital Asset Excluded from Fund Level:
Compensated absences (2,964,099)$
OPEB (16,223,295)
Pension (5,376,554)
Bonds payable (8,035,000)
Current year changes to pension 1,245,897
Bond Premium (246,188)
Issuance of new debt (22,183,905)
Current year principal payments reducing debt 830,000
Net adjustment to reduce government wide fund balance to arrive at
Net Position Governmental Activities (52,953,144)$
Another element of that reconciliation explains the "Long-term liabilities are not due and
payable in the current and are not reported in the funds. The following show the detail of
these liability changes.
Beginning Balance of Long-Term Liabilities Excluded from Fund Level:
48
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
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:
NOTE 3: DEPOSITS AND INVESTMENTS
Deposits
As of December 31, 2019 the carrying amount of the City’s cash balances was $105,797,412 which
consisted of $49,598,032 in the City’s checking accounts at US Bank, $57,684,453 deposited in
the Local Government Investment Pool, deposits in transit of $375,834, less outstanding checks of
$1,829,761. A portion, $1,109,340, of the deposits are maintained for the benefit of the fiduciary
funds the City supports.
Custodial Credit Risk
Custodial credit risk for deposits is the risk that in the event of a failure of a failure of a depository
financial institution, the City would not be able to recover deposits or will not be able to recover
collateral securities that are in possession of an outside party. The City deposits and certificates of
deposit are mostly covered by federal depository insurance (FD IC) or by collateral held in a
multiple financial institution collateral pool administered by the Washington Public Deposit
Protection Commission (PDPC). The FDIC insures the first $250,000 of the City’s deposits. The
deposit balances over $250,000 are insured by the WPDPC. The City does not have a deposit policy
for custodial credit risk beyond the requirements of state statute. Washington State law restricts
deposit of funds to financial institutions physically located in Washington unless otherwise
expressly permitted by statute and authorized by the WPDPC. State statute permits additional
Land -$
Building & Structure 72,185
Construction in process 11,851,226
Machinery and equipment 264,050
Other Improvement -
Contributed capital assets 6,916,963
Current year depreciation (5,185,858)
Gain on Joint venture 203,383
Net capital activity 14,121,949
New Debt issued (22,183,905)
Debt repayment 830,000
Net debt activity (21,353,905)$
The second element of that reconciliation related to debt activity as follows
Capital outlays for:
49
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
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 is the risk the City may face should interest rate variances affect the fair value of
investments. In accordance with its investment policy, the City manages its exposure to declines
in fair value by limiting the maturity of investments. To achieve its financial objective of
maintaining liquidity to meet all operating requirements, the City typically selects investments that
have shorter average maturities.
The following table depicts Weighted Average Maturity (WAM) for all City investments with
maturities, by number of months.
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 inv estment policy
for “credit risk” does not extend beyond the types of authorized investments and the concentration
Maturity Date
# of Months to
Maturity
Fair Market
Value as
12/31/19 % of total WAM
02/01/2027 85.0 65,850$ 0.35% 0.300706
06/10/2022 30.0 2,001,658 10.75% 3.226107
01/19/2023 37.0 2,178,289 11.70% 4.329970
06/19/2023 42.0 2,001,822 10.75% 4.516920
07/15/2020 7.0 2,127,029 11.43% 0.799906
10/15/2020 10.0 2,100,327 11.28% 1.128378
01/15/2021 12.0 3,148,809 16.92% 2.029996
10/21/2022 34.0 1,995,060 10.72% 3.644202
01/30/2020 1.0 2,994,843 16.09% 0.160895
29 18,613,686$ 100.00% 20.137079
Calculation of Weighted Average Maturity (WAM)
50
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
of credit risk described below. As of December 31, 2019 the City’s investments in agency
securities were all rated AAA. The LGIP is not regist ered with the SEC and the fair value of the
city’s position in the pool is the same as the value of the pool shares. The LGIP is regulated by the
state of Washington’s state finance committee. Credit risk is limited as most investments are either
obligations of the U.S. Government, government sponsored enterprises, insured demand deposit
accounts or certificates of deposit.
Concentration of Credit Risk
Concentration of credit risk is the risk of loss attributed to the magnitude of a government’s
investment in a single issuer. It is the policy of the city to diversify its investment portfolio to
eliminate the risk of loss resulting from overconcentration of assets in a specific class of securities.
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, 2019.
Local Government Investment Pool
The city is a participant in the Local Government Investment Pool was authorized by Chapter 294,
Laws of 1986, and is managed and operated by the Washington State Treasurer. The State Finance
Committee is the administrator of the statute that created the pool and adopts rules. The State
Treasurer is responsible for establishing the investment policy for the pool and reviews the policy
annually and proposed changes are reviewed by the LGIP advisory Committee.
Investments in the LGIP, a qualified external investment pool, are reported at amortized cost which
approximates fair value. The LGIP is an unrated external investment pool. The pool portfolio is
invested in a manner that meets the maturity, quality, diversification and liquidity requirements set
forth by the GASBS 79 for external investments pools that elect to measure, for financial reporting
purposes, investments at amortized cost. The LGIP does not have any legally binding guarantees
of share values. The LGIP does not impose liquidity fees or redemption gates on participant
withdrawals. For GASB reporting purposes funds in the LGIP are reported as cash equivalents.
The Office of the State Treasurer prepares a stand-alone LGIP financial report. A copy of the
report is available from the Office of the State Treasurer, PO Box 40200, Olympia, Washington
98504-0200, online at http://www.tre.wa.gov.
Investment Type Fair Value
Less than 1
year 1 to 5 years
6 to 10
years
Debt Securities
SBA Participation 65,850$ -$ -$ 65,850$
Federal Farm Credit Bank 4,989,903 2,994,843 1,995,060 -
Federal Home Loan Bank 2,001,658 - 2,001,658 -
Federal National Mortgage Association 4,180,111 - 4,180,111 -
Resolution Funding Corporation-Strips 7,376,164 7,376,164 - -
Total Debt Securties 18,613,686$ 10,371,007$ 8,176,829$ 65,850$
Investment Maturities (in Years)
51
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
Investments Reported as Cash Equivalents as of December 31, 2019
Amortized Cost Less than 1 Year
Local Government Investment Pool $57,684,453 $57,684,453
In addition to the City of Pasco investments presented in the series of tables following this section,
the City’s Old Fire Pension and Old Fire OPEB Funds report the following investments in their
Trust Funds:
Investments Measured at Fair Value
The City measures and reports investments at fair value using the valuation input hierarchy
established by Generally Accepted Accounting Principles (GAAP), as follows:
Level 1: Quoted prices in active markets for identical assets or liabilities;
Level 2: These are quoted market prices for similar assets or liabilities, quoted prices for
identical or similar assets or liabilities in markets that are not active, or other than quoted prices
that are not observable;
Level 3: Unobservable inputs for an asset or liability.
Safekeeping for the City’s investments is provided by U.S. Bank. U.S. Bank contracts with
Independent Directors Council (IDC) to provide fair market values of investments on a monthly
basis. The pricing methodology varies depending on multiple components, including if an
investment is being actively traded. In depth pricing methodology is available from IDC.
As of December 31, 2019, the City had the following investments measured at fair value:
Old Fire Pension Trust Fund Investments FMV 12/31/19 Interest Rate Maturity
Small Business Admn Participation SBAP 15,070$ 5.37% 10/1/2026
The Investment Co. of America Mutual Funds 2,546,234 *Varies N/A
Total 2,561,304
*YTD Return 19.74%
Old Fire OPEB Trust Fund Investments FMV 12/31/19 Interest Rate Maturity
WAMU Investors Fund A Mutual Funds 3,438,460 *Varies N/A
Total 3,438,460$
*YTD Return 20.19%
52
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
NOTE 4: PROPERTY TAXES
The county treasurer acts as an agent to collect property taxes levied in the county for all taxing
authorities. Collections are distributed by the 10th day of the following month.
Property taxes are recorded as a receivable and revenue when levied, offset by deferred revenue.
Property tax collected in advance of the fiscal year to which it applies is recorded as a deferred
inflow and recognized as revenue of the period to which it applies. No allowance for uncollectible
tax is established because delinquent taxes are considered fully collectible. Prior year tax levies
were recorded using the same principle and delinquent taxes are evaluated annually. As of
12/31/19, delinquent taxes totaled $194,775.
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 2019 was $1.9394 per $1,000 on an assessed valuation of
$5,500,291,262. This resulted in a total regular levy of $10,667,334 for 2019. The City did not levy
any taxes for special levies in 2019
Quoted Prices
Active Markets for
Identical Assets
Significant Other
Observable Inputs
Significant
Unobservable
Inputs
12/31/2019 (Level 1)(Level 2)(Level 3)
Investment by Fair Value Level
U.S. Government Agency Securities 18,613,686$ -$ 18,613,686$ -$
Total Investments measured at fair value 18,613,686 -$ 18,613,686$ -$
Total Investments in Statement of Net Position 18,613,686$
Fair Value Measurement Using
January 1 Taxes are levied and become an enforceable lien against properties.
February 14 Tax bills are mailed.
April 30 First of two equal installment payments is due.
May 31 Assessed value of property established for next year's levy at 100% of market value.
October 31 Second installment is due.
Property Tax Calendar
53
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
NOTE 5: CAPITAL ASSETS AND CWIP
Capital asset activity for the year ended December 31, 2019 was as follows:
In 2019, the City conducted an assessment of existing capital assets and their remaining useful
lives. The study included condition assessments, information from capital asset planning and
Governmental Activities:
Beginning
Balance
01/01/19
Prior Period
Adjustments
Beginning
Balance
01/01/19
Current Period
Increases
Current Period
Decreases
Ending Balance
12/31/19
Capital assets, not being depreciated
Land 17,336,555$ -$ 17,336,555$ 2,433,634$ 297,016$ 19,473,173$
Construction in progress 15,738,767 (365,847) 15,372,920 12,085,308 9,806,323 17,651,905
Total capital assets, not being depreciated 33,075,322 (365,847) 32,709,475 14,518,942 10,103,339 37,125,078
Capital assets, being depreciated:
Building & structure 50,679,040 - 50,679,040 502,475 3,162,238 48,019,277
Other improvements 9,981,571 - 9,981,571 (157,308) 2,444,545 7,379,718
Machinery and equipment 19,237,475 - 19,237,475 513,508 579,051 19,171,932
Infrastructure 271,276,664 - 271,276,664 13,767,212 6,362,804 278,681,072
Total capital assets being depreciated 351,174,750 - 351,174,750 14,625,887 12,548,638 353,251,999
Less accumulated depreciation:
Building & structure 18,141,881 - 18,141,881 (726,367) 3,104,625 14,310,889
Other improvements 7,089,682 - 7,089,682 (1,100,063) 2,440,739 3,548,880
Machinery and equipment 9,797,630 - 9,797,630 1,239,446 573,441 10,463,635
Infrastructure 103,488,095 - 103,488,095 6,601,841 6,362,805 103,727,131
Total accumulated depreciation 138,517,288 - 138,517,288 6,014,857 12,481,610 132,050,535
Total capital assets, being depreciated, net 212,657,462 - 212,657,462 8,611,030 67,028 221,201,464
Governmental activities capital assets net 245,732,784$ (365,847)$ 245,366,937$ 23,129,972$ 10,170,367$ 258,326,542$
Business Type Activities:
Beginning
Balance
01/01/19
Prior Period
Adjustments
Beginning
Balance
01/01/19
Current Period
Increases
Current Period
Decreases
Ending Balance
12/31/19
Capital assets, not being depreciated
Land 3,101,211$ -$ 3,101,211$ 47,838$ -$ 3,149,049$
Construction in process 13,649,928 (47,195) 13,602,733 13,344,618 16,494,412 10,452,939
Total capital assets, not being depreciated 16,751,139 (47,195) 16,703,944 13,392,456 16,494,412 13,601,988
Capital assets, being depreciated:
Building & structure 63,705,109 - 63,705,109 6,015,854 38,192 69,682,771
Other Improvements 198,090 - 198,090 252,384 - 450,474
Machinery and equipment 13,212,357 - 13,212,357 4,152,483 7,135 17,357,705
Infrastructure 171,824,075 - 171,824,075 7,986,031 8,092,430 171,717,676
Total capital assets being depreciated 248,939,631 - 248,939,631 18,406,752 8,137,757 259,208,626
Less accumulated depreciation:
Building & structure 30,571,929 - 30,571,929 (7,514,200) 9,930 23,047,799
Other Improvements 5,101 - 5,101 3,962 - 9,063
Machinery and equipment 6,573,044 - 6,573,044 1,136,615 7,135 7,702,524
Infrastructure 40,221,077 - 40,221,077 8,015,284 7,953,591 40,282,770
Total accumulated depreciation 77,371,151 - 77,371,151 1,641,661 7,970,656 71,042,156
Total capital assets, being depreciated, net 171,568,480 - 171,568,480 16,765,091 167,101 188,166,470
Business activities capital assets net 188,319,619$ (47,195)$ 188,272,424$ 30,157,547$ 16,661,513$ 201,768,458$
54
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
timing of scheduled asset replacements as well as new information regarding the longevity of
assets. This resulted in changes to estimated useful lives in governmental and business-type funds.
For the most part, useful lives were extended resulting in significant impact to accumulated
depreciation and current year depreciation.
Depreciation expense by function:
Construction commitments
The City of Pasco has active construction projects as of December 31, 2019. The projects include
street construction and various utility related projects. At year end, the city’s commitments with
contractors are as follows:
General government 428,038$
Public Safety 957,062
Transportation 6,713,959
Economic environment (832,496)
Culture & recreation (1,251,706)
Total depreciation expense - governmental activities 6,014,857$
Water 6,690,472$
Irrigation 565,202
Sewer (6,414,302)
Process water reuse facility 622,911
Stormwater 177,378
Total depreciation expense- business-type activities:1,641,661$
Governmental activities:
Business-type activities:
CATEGORY PROJECT NAME SPENT TO
DATE
REMAINING
COMMITMENT
Sewer WWTP PLC Upgrade 811,454$ 3,638$
Streets Chapel Hill Blvd Extension 3,971,656 87,151
Process Water Resource Facility Columbia East Pump Station 2,745,787 47,032
Process Water Resource Facility Foster Wells Forcemain 4,179,988 717,789
Process Water Resource Facility Irrigation Pump Station 1,720,869 6,327,747
13,429,754$ 7,183,358$ TOTAL
55
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
NOTE 6: INTERFUND BALANCES AND TRANSFERS
Inter-fund loans
The composition of inter-fund loan balances as of December 31, 2019 are presented in the
following table. These loans are included in the Fund Financial Statements but eliminated from the
Government Wide Statement of Net Assets because they are internal borrowings. There are also
one day loans from the General Fund totaling $252,000 for funds with negative cash at year end
that are classified as Due from transactions on the Balance Sheet Governmental Funds. The
composition of Due to and Due from balances as of December 31, 2019 are presented in the
following table.
Inter-fund transfers
Transfers between funds during the year ended December 31, 2019 are as follows:
Transfers are used to 1) move unrestricted general fund revenues to finance various programs that
the government must account for in other funds in accordance with budgetary authorizations,
including amounts provided as subsidies or matching funds for various grant programs; 2) move
Loan Purpose Nonmajor Special
Revenue
Major Local
Improvement
District Loan
Total
General Fund LID Financing -$ $ 2,067,590 2,067,590$
General Fund Marina dock repairs-Interim
Financing 450,000 - 450,000
Nonmajor Special Revenue LID Financing - 78,471 78,471
450,000$ 2,146,061$ 2,596,061$
INTERFUND LOANS DUE TO
Total
INTERFUND LOANS DUE FROM Due to
General Fund Total
Nonmajor Special Revenue 252,000$ 252,000$
Total 252,000$ 252,000$ DUE FROMGeneral Nonmajor Special
Revenue
Major Local
Improvement
District Loans
Utility Internal
Service Total
General -$ 231,600$ -$ -$ -$ 231,600$
Nonmajor Special Revenue 1,565,722 709,133 - 533,078 - 2,807,933
Major Ambulance 1,120,000 - - - - 1,120,000
Major Construction 1,524,489 5,758,466 4,538,203 - - 11,821,158
Internal Service - - - - 7,384 7,384
Total 4,210,211$ 6,699,199$ 4,538,203$ 533,078$ 7,384$ 15,988,075$
TRANSFER FROM
TRANSFER TO56
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
investment earnings or operating subsidies from one fund to its designated, authorized purpose
carried out by another fund; 3) move resources designated for construction to and from
construction funds as projects are created and/or completed.
There were one time transfers for grant purpose between several special revenue funds, the general
fund and the construction funds. There were on -going transfers to move grant support from the
Community Development Block Grant fund to the general fund for qualified grant activities; and
from the general fund to the ambulance fund.
NOTE 7: CHANGES IN LONG-TERM LIABILITIES
Changes in long-term liabilities -governmental.
The City liquidates most governmental debt service, pension and OPEB liabilities from the
General Fund. The only debt service not liquidated from the General Fund is debt related the Gesa
Stadium improvements which is repaid from the Stadium Fund. 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 a three-year average usage percentage for projecting compensated absences
due within one year. This method is the most accurate by following the current trend for 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 2019 liabilities for
Internal Service Funds included with Governmental activities was $119,826.
The table below reflects the change in Long-Term Liabilities for Governmental activities for year
ended December 31, 2019.
GOVERNMENTAL ACTIVITIES
Beginning Balance
01/01/2019 Additions Reductions
Ending Balance
12/31/19
Due Within One
Year
General Obligation Bonds 8,865,000$ 18,090,000$ (830,000)$ 26,125,000$ 1,330,000$
Premiums 261,573 4,093,905 (15,387) 4,340,091 151,850
Total GO Bonds Payable 9,126,573 22,183,905 (845,387) 30,465,091 1,481,850
Compensated Absences 2,964,098 2,965,046 (2,399,834) 3,529,310 2,026,785
OPEB Liabilities 16,223,295 - (3,991,968) 12,231,327 -
Pension Liabilities 4,670,922 - (1,250,439) 3,420,483 -
Governmental Activity Long-Term Activity 32,984,888$ 25,148,951$ (8,487,628)$ 49,646,211$ 3,508,635$
57
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
Changes in long-term liabilities – business type.
All business type funds liquidate their own compensated absences, judgements, and claims.
The table below reflects the change in Long-Term Liabilities for Business Type activities for year
ended December 31, 2019.
NOTE 8: LONG TERM DEBT
The City issues general obligation bonds to finance capital improvements such as street projects,
softball fields, library improvements, police station and other municipal facilities. Bonded
indebtedness has also been entered into in prior years to advance refund several general obligation
and revenue bonds. General obligation bonds have been issued for both general government and
business-type activities and are being repaid for the applicable resources. Revenue bonds are
issued to finance capital facilities, facility improvements and equipment purchases for the City’s
utilities. Governmental debt is considered obligations of the general government and is repaid with
general governmental resources. Proprietary fund revenues are used to repay revenue and
refunding bonds as well as certain loans to proprietary funds.
Governmental Debt
The City’s outstanding general obligation bonds are comprised of 2011 refunding bonds, a 2015
bond issue that funded the construction of a new police station and a 2019 bond iss ue to fund the
construction of two fire stations, improvements to the Gesa Stadium and the City’s contribution
the construction of the Tri-City Animal Shelter. A Public Safety Sales tax of three-tenths of one
percent, implemented in 2012 was identified as the source of repayment of the 2015 bond. These
issues are repaid from the General Fund, with the exception of the Gesa Stadium bond which is
repaid from the Stadium Fund.
General obligation bonds outstanding as of December 31, 2019 are as follows:
BUSINESS TYPE ACTIVITIES
Beginning Balance
01/01/2019 Additions Reductions
Ending Balance
12/31/19
Due Within One
Year
Revenue Bonds 40,755,000$ -$ (2,045,000)$ 38,710,000$ 2,115,000$
LTGO Bonds 1,142,986 - (1,142,986) - -
Premiums 1,850,969 - (121,541) 1,729,428 121,541
Total Bonds Payable 43,748,955 - (3,309,527) 40,439,428 2,236,541
State Loans 6,571,841 - (465,844) 6,105,997 510,797
External Loan 1,431,466 - (121,754) 1,309,712 127,612
Compensated Absences 224,396 374,834 (288,453) 310,777 262,677
Pension Liabilities 1,577,058 (317,911) 1,259,147 -
Business Activity Long-Term Activity 53,553,716 374,834 (4,503,489) 49,425,061 3,137,627
Total Changes in Business Type &
Governmental Long-Term Liabilities 86,538,604$ 25,523,785$ (12,991,117)$ 99,071,272$ 6,646,262$
58
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
The annual debt service requirements to maturity for general obligation bonds is presented in the
following table.
Business Type Debt
In 2019 the City’s Water/Sewer utility continued the construction of projects supported by a $9.4
million revenue bond that was issued at the end of 2017. The purpose of the bond was 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. The Columbia Water
Supply Project was completed in 2018. The final draw against the loan, which is paid on a
reimbursement basis, is anticipated to be received in 2020 in conjunction with the final close out
of the loan process. The City is also liable for a local loan from the Hanford Area Economic
Investment Fund Advisory Committee (HAEIFAC) for improvements for the Reuse Facility.
As of December 31, 2019, restricted cash and investments in the proprietary funds contain
$4,851,885 in sinking funds and reserves as required by bond indentures.
Purpose Issuance Amount Final Maturity Interest Rates Outstanding as of
December 31, 2019
Due Within 1
Year
2011 LTGO Refunding 2001 LTGO 4,110,000$ 12/1/2020 3.00%-4.00%510,000$ 510,000$
2015 LTGO Police Station 8,795,000 12/1/2035 3.00%-4.00% 7,525,000 350,000
2019 LTGO Fire Station No. 83 & No. 84 14,800,000 12/1/2049 4.00%-5.00% 14,800,000 380,000
2019 LTGO Gesa Stadium 1,645,000 12/1/2049 4.00%-5.00% 1,645,000 50,000
2019 LTGO Animal Shelter 1,645,000$ 12/1/2049 4.00%-5.00% 1,645,000 40,000
26,125,000$ 1,330,000$ Total Governmental Debt
GOVERNMENTAL DEBT - BONDS
Year Ending
December 31 Principal Interest Total Debt Service
2020 1,330,000$ 1,149,065$ 2,479,065$
2021 875,000 1,142,800 2,017,800
2022 910,000 1,107,800 2,017,800
2023 945,000 1,071,400 2,016,400
2024 990,000 1,028,050 2,018,050
2025-2029 5,690,000 4,412,800 10,102,800
2030-2034 5,525,000 3,096,013 8,621,013
2035-2039 2,970,000 2,111,375 5,081,375
2040-2044 3,030,000 1,435,000 4,465,000
2045-2049 3,860,000 598,000 4,458,000
TOTAL 26,125,000$ 17,152,303$ 43,277,303$
GOVERNMENTAL DEBT
59
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
Revenue Bonds, General Obligation Bonds and Loans outstanding for Business Type Accounts
are as follows:
The annual debt service requirements to maturity for all Business Type debt is as follows:
For financial statement presentation the City’s non-current portion of bonds payable are presented
net of premium and discounts. Current bonds payable reflect actual principal payments including
the current portion of the amortized premium due within one year. The following table illustrates
the breakdown by fund type for current and non-current bonds payable and the effect of premium
or discount on balances. Balances shown are as of December 31, 2019.
Purpose Issuance Amount Final Maturity Interest Rates Outstanding as of
December 31, 2019
Due Within 1
Year
2009 Water/Sewer Capital Projects 10,045,000$ 05/01/2029 1.35%-4.75%5,515,000$ 510,000$
2010A Refunding Water/Sewer 9,070,000 06/01/2029 3.00%-5.00%3,880,000 320,000
2013A Sewer Capital Projects 2,520,000 12/01/2028 3.00%-4.00%1,850,000 175,000
2013T Capital Projects Reuse Facility 7,235,000 12/01/2028 .69%-4.89%5,020,000 470,000
2015 Water/Sewer Capital Projects 14,380,000 12/01/2040 2.00%-5.00%13,030,000 640,000
2017 Sewer Improvement Revenue Bonds1 9,415,000$ 12/01/2042 3.30%-4.00%9,415,000 -
38,710,000$ 2,115,000$
Purpose Issuance Amount Final Maturity Interest Rates Outstanding as of
December 31, 2018
Due Within 1
Year
PW00-691-043 Riverview Trunk Sewer Interceptor 1,890,000$ 06/30/2020 0.50%111,140$ 111,140$
DM15-952-037 Columbia Water Supply Project2 6,810,430 10/01/2034 1.50%5,994,855 399,657
HAEIFAC - Reuse Facility Improvement Loan 1,500,000$ 07/01/2028 3.20%1,309,712 127,612
7,415,707 638,409
46,125,707$ 2,753,409$
1 This bond requires interest-only payments until 2030.
Total Business Type Debt
2The Columbia Water Supply Project Loan is approved for $6,810,430 and has recorded draws of $6,073,086 through December 31, 2019.
BUSINESS TYPE DEBT -BONDS
BUSINESS TYPE DEBT -LOANS
Year Ending
December 31 Principal Interest Total Debt Service
2020 2,753,409$ 1,798,336$ 4,551,745$
2021 2,666,495 1,705,461 4,371,956
2022 2,370,747 1,606,927 3,977,674
2023 2,385,137 1,517,901 3,903,038
2024 2,474,607 1,426,573 3,901,180
2025-2029 11,462,026 5,636,698 17,098,724
2030-2034 8,368,285 3,827,548 12,195,833
2035-2039 7,995,000 2,111,375 10,106,375
2040-2042 5,650,000 412,045 6,062,045
TOTAL 46,125,706$ 20,042,864$ 66,168,570$
BUSINESS TYPE DEBT
60
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
Special Assessment Debt
Local improvement districts (LID's) are created for the primary purposes of constructing streets,
storm drainage, sidewalk, street lighting, water, and sewer improvements. The principal and
interest on the bond issues are expected to be paid solely from special assessments collected. The
assessments are liens against the property and are subject to foreclosure. The LID Guarantee Fund
ended the year with a balance of $343,910. There is no external debt issue for local improvement
districts, all outstanding debt is internally funded through inter-fund loans. See details in Note 6:
Interfund Balances and Transfers
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. Total cost for such leases was $499,503 for
the year ended December 31, 2019. The following represents the future annual minimum lease
payments:
NOTE 9: RISK MANAGEMENT
The City of Pasco maintains insurance against most normal hazards except for unemployment and
automobile collision, where it has elected to become self-insured.
For unemployment claims, the City is on a 100% reimbursable program with the State where the
City pays all unemployment claims charged against it.
The City of Pasco is a member of the Washington Cities Insurance Authority (WCIA). Utilizing
Chapter 48.62 RCW (self-insurance regulation) and Chapter 39.34 RCW (Interlocal Cooperation
Bonds and Loans Governmental Business Type Total
Current Bonds and Loans Payable 1,330,000$ 2,753,411$ 4,083,411$
Bond Premium 151,850 121,541 273,391
Total Current Bonds and Loans Payable 1,481,850 2,874,952 4,356,802
Non Current - Bonds and Loans Payable 24,795,000 43,372,297 68,167,297
Bond Premium 4,188,242 1,607,888 5,796,131
Total Non Current Bonds and Loans Payable 28,983,242 44,980,185 73,963,428
Total Bonds and Loans Payable at 12/31/19 30,465,092$ 47,855,138$ 78,320,230$
Year Ending December Amount
2020 444,997$
2021 393,242
2022 223,434
2023 110,573
Total 1,172,247$
Police vehicles
61
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
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 163 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 Liability, Police Liability, Errors or Omissions Liability, Employment Practices Liability,
Employee Benefit Liability and Stop-Gap 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 sub limits. Additionally, the
City participates in the Equipment Breakdown Program (limits $100 million), Pollution Liabili ty
Program (limits are $2 million per condition), and Information Security Insurance (limits $10
million aggregate pool policy and per member $1 million limit). The Board of Directors
determines the limits and terms of coverage annually.
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 has not had claims in excess of insurance for the last three years.
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 (16 weeks) 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 $100,000 per individual. The amount of
medical/dental claims in excess of commercial insurance for the last three years are:
2017 2018 2019
4,463,350$ 5,196,581$ 6,170,277$
62
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
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 was established to assist the participating police and sheriff's departments in the
deterrence and solution of criminal incidents. BI-PIN is served by an Executive Committee composed
of the City Manager of each of the cities and a member from each of the Boards of County
Commissioners of Benton and Franklin Counties. A liaison from the Bi-County Chiefs and Sheriffs
is an ex officio, non-voting member.
The allocation of financial participation among the participating jurisdictions is based upon the
approved budget for that year and is billed quarterly in advance to each agency. On dissolution of the
Interlocal Agreement, the net position will be shared based upon participant contribution.
Effective January 1, 1992, the City of Kennewick assumed responsibility for operation of the BI-PIN
system. As the Operating Jurisdiction, Kennewick provides all necessary support services for the
operation of BI-PIN such as accounting, legal services, and risk management and information
systems. The total amount paid by BI-PIN in 2019 for these transactions was $119,000.
BI-PIN is currently in the process of implementing a new RMS/JMS system as well as upgrading all
supporting infrastructure. The City of Pasco's equity interest in BI-PIN was $291,130 on Dec 31,
2019, which is reported as an investment in joint ventures in the government-wide statement of net
position. The change in equity is reflected in the government-wide statement of activities under
Public Safety. The City does not anticipate any income distributions from BI-PIN since charges are
assessed only to recover anticipated expenses.
Complete separate financial statements for BI-PIN may be obtained at the City of Kennewick, 210
W. 6th Ave., Kennewick, Washington, 99336.
B. Metro Drug Forfeiture Fund
The Metropolitan Controlled Substance Enforcement Group (Metro) established prior to 1987, when
Interlocal Agreement entered into by six participating municipal corporations, the cities of
Kennewick, Pasco, Richland, and West Richland, and Benton and Franklin Counties. Metro
established to account for the proceeds of forfeitures, federal grants, and court ordered contributions,
and to facilitate the disbursement of those proceeds for the purpose of drug enforcement and
investigations. Metro served by an Executive Committee composed of the City Manager or designee
of each of the cities and a member from each of the Boards of County Commissioners of Benton and
Franklin Counties. In addition, a Governing Board consisting of the Chiefs of Police from the cities
and the Sheriffs from the counties administers daily activity.
Effective July 1, 2009, the City of Kennewick assumed responsibility for the operation of Metro. As
the Operating Jurisdiction, Kennewick provides accounting services for the operation of Metro.
The City of Pasco's equity interest in Metro was $11,096 on Dec 31, 2019, which reported as an
investment in joint ventures in the government-wide statement of net position. The change in equity
63
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
is reflected in the government-wide statement of activities under Public Safety. The City does not
anticipate any income distributions from Metro.
Complete separate financial statements for Metro obtained at the City of Kennewick, 210 West Sixth
Avenue, Kennewick, Washington.
C. SECOMM
SECOMM provides public safety communications services to the Cities of Kennewick,
Richland, Pasco and the Counties of Benton and Franklin. Each owns an equal share of
SECOMM’s net assets. Financial participation is allocated among the five participants based
on equal shares of capital expenses, predetermined fixed costs, direct costs and percentages
of use. SECOMM also provides service through contracts to the Cities of West Richland
and Prosser, Connell and the Benton and Franklin County Fire Protection Districts, Port of
Pasco, Walla Walla Fire District #5 and the North Franklin County Hospital district.
Service contract agencies are assessed on a cost per capita or cost per call basis. The City of
Pasco’s equity interest in SECOMM as of December 31, 2019 was $1,045,500 which is
reported as an asset in the government-wide Statement of Net Assets. The change in equity
is reflected in Public Safety under the government-wide Statement of Activities. Upon
dissolution of the Interlocal Agreement, the net assets will be shared equitably among the
participants.
Complete and separate financial statements for all operations of Benton County
Emergency Services may be obtained at the City of Richland, 505 Swift Blvd, Richland,
Washington.
D. Tri-City Animal Control Authority
In 2005 the city entered into an interlocal agreement with the cities of Kennewick and
Richland to jointly fund the operations of the Animal Control Authority (ACA). The ACA
was established to provide animal control and sheltering services. ACA is served by an
Executive Committee composed of the City Manager, or designee, of each of the cities.
In 2005, the City of Pasco was designated as the Operation Jurisdiction for the ACA. As
the Operating Jurisdiction, the City provides all necessary support services for the operation
such as accounting, contract administration and risk management.
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
64
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
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 direct ion 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 e xecute 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.
In 2019, the City expended $200,808 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.
65
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
Trade, Recreation, Agricultural Center
In 1994 the City entered into an agreement with Franklin County for the Trade, Recreation, and
Agricultural Center (TRAC). The City and Franklin County share in the costs of operating and
covering TRAC’s debt service. Franklin County handles all operating decisions and financial
reporting for TRAC. In Spring of 2019, Franklin County partnered with HAPO Community Credit
Union for a ten year naming rights agreement. As such, for the purposes of this document, the
terms HAPO Center and TRAC are interchangeable.
The City accounts for its portion of TRAC activity in the TRAC Special Revenue Fund. For
calendar year 2018, the City of Pasco paid Franklin County $239,054 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, 2019,
the TRAC Fund had a fund balance of $590,0558.
Complete financial statements for TRAC may be obtained from Franklin County, 1016 N. 4 th
Avenue, Pasco, Washington.
Housing Authority of the City of Pasco and Franklin County
The Housing Authority of the City of Pasco and Franklin County was formed and created by
Ordinance No. 2299 on September 8, 1981, in order to pursue the rehabilitation and redevelopment
of blighted areas containing unsanitary or unsafe habitations located within the City of Pasco and
Franklin County. Its formation empowered the joint housing authority to exercise all rights referred
to under RCW 35.82 “Housing Authority Law.”
Three of the five Authority board members are appointed by the City Council.
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
Pursuant to RCW 35.57 the Tri-Cities Regional Public Facilities District was formed jointly by
the Cities of Pasco, Kennewick, and Richland. The District was established for the purpose of
acquiring, constructing, owning, remodeling, maintaining, equipping, re-equipping, repairing,
financing, operating one or more Regional Centers, as defined by the RCW35.57.020and/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.
66
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
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.
Benton County Emergency Services (BCES)
BCES was formed January 1, 1997 through an interlocal agreement entered into by the Cities of
Richland, Kennewick, West Richland, Benton City and Prosser as well as Benton County. A
second amended and restated interlocal agreement was made and entered into by and between
the following entities: Benton County, Franklin County, the Cities of Kennewick, Richland,
West Richland, Prosser, Benton City, and Pasco, Benton County Fire Protection Districts and the
Public Utility District #1 of Benton County. An Executive Board oversees the operations of
67
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
BCES and consists of the City Managers (or designee) from the Cities of Kennewick, Pasco and
Richland, City Administrators from Prosser and West Richland, a Council member from Benton
City, a Benton County Commissioner, a Franklin County Commissioner and a single
representative collectively representing Benton County Fire Protection Districts. The City of
Richland serves as the operating jurisdiction providing all the necessary administrative support
services and reporting for BCES. The total amount paid by BCES in 2019 for these services was
$414,139. No distributions of income to the City are expected since charges are assessed only to
recover anticipated expenses.
NOTE 13: EMPLOYEE RETIREMENT SYSTEMS AND PENSION PLANS
The following table represents the aggregate pension amounts for all plans for the year 2019:
State Sponsored Pension Plans
Substantially all city’s full-time and qualifying part-time employees participate in one of the
following statewide retirement systems administered by the Washington State Department of
Retirement Systems, under cost-sharing, multiple-employer public employee defined benefit and
defined contribution retirement plans. The state Legislature establishes, and amends, laws
pertaining to the creation and administration of all public retirement systems.
The Department of Retirement Systems (DRS), a department within the primary government of
the State of Washington, issues a publicly available comprehensive annual financial report (CAFR)
that includes financial statements and required supplementary information for each plan. The DRS
CAFR may be obtained by writing to:
Department of Retirement Systems
Communications Unit
P.O. Box 48380
Olympia, WA 98540-8380
Or the DRS CAFR may be downloaded from the DRS website at www.drs.wa.gov.
Public Employee’s Retirement System (PERS)
PERS members include elected officials; state employees; employees of the Supreme, Appeals
and Superior Courts; employees of the legislature; employees of district and municipal courts;
employees of local governments; and higher education employees not participating in higher
Pension liabilities (4,679,630)$
Pension assets 14,187,947
Deferred outflows of resources 3,239,193
Deferred inflows of resources (7,981,610)
Pension expense/expenditures 430,411$
Aggregate Pension Amounts - All Plans
68
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
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
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 2019 were as follows:
* For employees participating in JBM, the contribution rate was 12.26%.
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
Actual Contribution Rates Employer Employee*
January – June 2019
PERS Plan 1 7.52%6.00%
PERS Plan 1 UAAL 5.13%
Administrative Fee 0.18%
Total 12.83%6.00%
June – December 2019
PERS Plan 1 7.92%6.00%
PERS Plan 1 UAAL 4.76%
Administrative Fee 0.18%
Total 12.86%6.00%
PERS Plan 1
69
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
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
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 2019 were as follows:
70
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
* For employees participating in JBM, the contribution rate was 18.53% to 19.75%.
The city’s actual PERS plan contributions were $651,374 to PERS Plan 1 and $1,016,896 to PERS
Plan 2/3 for the year ended December 31, 2019.
Law Enforcement Officers’ and Fire Fighters’ Retirement System (LEOFF)
LEOFF membership includes all full-time, fully compensated, local law enforcement
commissioned officers, firefighters, and as of July 24, 2005, emergency medical technicians.
LEOFF is comprised of two separate defined benefit plans.
LEOFF Plan 1 provides retirement, disability and death benefits. Retirement benefits are
determined per year of service calculated as a percent of final average salary (FAS) as follows:
20+ years of service – 2.0% of FAS
10-19 years of service – 1.5% of FAS
5-9 years of service – 1% of FAS
The FAS is the basic monthly salary received at the time of retirement, provided a member has
held the same position or rank for 12 months preceding the date of retirement. Otherwise, it is the
average of the highest consecutive 24 months’ salary within the last ten years of service. Members
are eligible for retirement with five years of service at the age of 50. Other benefits include duty
and non-duty disability payments, a cost-of living adjustment (COLA), and a one-time duty-related
death benefit, if found eligible by the Department of Labor and Industries. LEOFF 1 members
were vested after the completion of five years of eligible service. The plan was closed to new
entrants on September 30, 1977.
Contributions
Starting on July 1, 2000, LEOFF Plan 1 employers and employees contribute zero percent, as
long as the plan remains fully funded. The LEOFF Plan I had no required employer or employee
contributions for fiscal year 2019. Employers paid only the administrative expense of 0.18 percent
of covered payroll.
Actual Contribution Rates Employer 2/3 Employee 2*
January – June 2019
PERS Plan 2/3 7.52%7.41%
PERS Plan 1 UAAL 5.13%
Administrative Fee 0.18%
Employee PERS Plan 3 Varies
Total 12.83%7.41%
July – December 2019
PERS Plan 2/3 7.92%7.90%
PERS Plan 1 UAAL 4.76%
Administrative Fee 0.18%
Employee PERS Plan 3 Varies
Total 12.86%7.90%
PERS Plan 2/3
71
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
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 includes 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.
Effective July 1, 2017, when a LEOFF employer charges a fee or recovers costs for services
rendered by a LEOFF 2 member to a non-LEOFF employer, the LEOFF employer must cover both
the employer and state contributions on the LEOFF 2 basic salary earned for those services. The
state contribution rate (expressed as a percentage of covered payroll) was 3.44% as of July 1, 2019.
The LEOFF Plan 2 required contribution rates (expressed as a percentage of covered payroll) for
2019 were as follows:
The city’s actual contributions to the plan were $909,813 for the year ended December 31, 2019.
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, 2019, the state contributed
$72,959,897 to LEOFF Plan 2. The amount recognized by the city as its proportionate share of
this amount is $594,692.
Employer Employee
Actual Contribution Rates 5.25%8.75%
State and local governments 0.18%
Administrative Fee 5.43%8.75%
LEOFF Plan 2
72
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
Actuarial Assumptions
The total pension liability (TPL) for each of the DRS plans was determined using the most recent
actuarial valuation completed in 2019 with a valuation date of June 30, 2018. The actuarial
assumptions used in the valuation were based on the results of the Office of the State Actuary’s
(OSA) 2007-2012 Experience Study and the 2017 Economic Experience Study.
Additional assumptions for subsequent events and law changes are current as of the 2018 actuarial
valuation report. The TPL was calculated as of the valuation date and rolled forward to the
measurement date of June 30, 2019. Plan liabilities were rolled forward from June 30, 2018, to
June 30, 2019, reflecting each plan’s normal cost (using the entry-age cost method), assumed
interest and actual benefit payments.
Inflation: 2.75% total economic inflation; 3.50% salary inflation
Salary increases: In addition to the base 3.50% salary inflation assumption, salaries are
also expected to grow by promotions and longevity.
Investment rate of return: 7.4%
Mortality rates were based on the RP-2000 report’s Combined Healthy Table and Combined
Disabled Table, published by the Society of Actuaries. The OSA applied offsets to the base table
and recognized future improvements in mortality by projecting the mortality rates using 100
percent Scale BB. Mortality rates are applied on a generational basis; meaning, each member is
assumed to receive additional mortality improvements in each future year throughout his or her
lifetime.
There were changes in methods and assumptions since the last valuation.
OSA updated modeling to reflect providing benefit payments to the date of the initial
retirement eligibility for terminated vested members who delay application for retirement
benefits.
OSA updated COLA programming to reflect legislation signed during the 2018 legislative
session that provides PERS and TRS Plan 1 annuitants who are not receiving a basic
minimum, alternate minimum, or temporary disability benefit with a one-time permanent
1.5% increase to their monthly retirement benefit, not to exceed a maximum of $62.50 per
month.
Discount Rate
The discount rate used to measure the total pension liability for all DRS plans was 7.4 percent.
To determine that rate, an asset sufficiency test included an assumed 7.5 percent long-term
discount rate to determine funding liabilities for calculating future contribution rate requirements.
(All plans use 7.5 percent except LEOFF 2, which has assumed 7.4 percent). Consistent with the
long-term expected rate of return, a 7.4 percent future investment rate of return on invested assets
was assumed for the test. Contributions from plan members and employers are assumed to
73
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
continue being made at contractually required rates (including PERS 2/3, PSERS 2, SERS 2/3, and
TRS 2/3 employers, whose rates include a component for the PERS 1, and TRS 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 7.4 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 7.4 percent was
determined using a building-block-method. In selecting this assumption, the Office of the State
Actuary (OSA) reviewed the historical experience data, considered the historical conditions that
produced past annual investment returns, and considered capital market assumptions and simulated
expected investment returns provided by the Washington State Investment Board (WSIB). The
WSIB uses the capital market assumptions and their target asset allocation to simulate future
investment returns over various time horizons.
Estimated Rates of Return by Asset Class
Best estimates of arithmetic real rates of return for each major asset class included in the pension
plan’s target asset allocation as of June 30, 2019, are summarized in the table below. The inflation
component used to create the table is 2.2 percent and represents the WSIB’s most recent long-term
estimate of broad economic inflation.
Sensitivity of the Net Pension Liability / (Asset)
The table below presents the city’s proportionate share of the net pension liability calculated using
the discount rate of 7.4 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 (6.4
percent) or 1-percentage point higher (8.4 percent) than the current rate.
Asset Class Target Allocation
% Long-Term Expected
Real Rate of Return
Arithmetic
Fixed Income 20%2.20%
Tangible Assets 7%5.10%
Real Estate 18%5.80%
Global Equity 32%6.30%
Private Equity 23%9.30%
100%
1% Decrease Current Rate Discount 1% Increase
6.40%7.40%8.40%
PERS Plan 1 4,419,092$ 3,528,728$ 2,756,221$
PERS Plan 2/3 8,826,961 1,150,902 (5,147,811)
LEOFF Plan 1 (1,116,213) (1,364,474) (1,578,825)
LEOFF Plan 2 (2,121,737)$ (11,410,732)$ (18,992,679)$
74
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
Pension Plan Fiduciary Net Position
Detailed information about the State’s pension plans’ fiduciary net position is available in the
separately issued DRS financial report.
Pension Liabilities (Assets), Pension Expense, and Deferred Outflows of Resources and
Deferred Inflows of Resources Related to Pensions
At June 30, 2019, the city reported a total pension liability of $4,679,630 for its proportionate share
of the net pension liabilities as follows:
The amount of the asset reported above for LEOFF Plans 1 and 2 reflects a reduction for State
pension support provided to the city. The amount recognized by the city as its proportionate share
of the net pension asset, the related State support, and the total portion of the net pension asset that
was associated with the city were as follows:
At June 30, the city’s proportionate share of the collective net pension liabilities was as follows:
Employer contribution transmittals received and processed by the DRS for the fiscal year ended
June 30 are used as the basis for determining each employer’s proportionate share of the collective
pension amounts reported by the DRS in the Schedules of Employer and Nonemployer Allocations
for all plans except LEOFF 1.
LEOFF Plan 1 allocation percentages are based on the total historical employer contributions to
LEOFF 1 from 1971 through 2000 and the retirement benefit payments in fiscal year 2019.
Historical data was obtained from a 2011 study by the Office of the State Actuary (OSA). In fiscal
year 2019, 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
Liability (or Asset)
PERS 1 3,528,728
PERS 2/3 1,150,902
LEOFF 1 (1,364,474)
LEOFF 2 (11,410,732)
LEOFF 1 Asset LEOFF 2 Asset
Employer’s proportionate share $ (1,232,308) $ (9,526,433)
TOTAL $ (9,567,611) $ (15,694,618)
State’s proportionate share of the net pension asset
associated with the employer (8,335,303) (6,168,185)
Proportionate Proportionate Change in
Plan Share 6/30/18 Share 6/30/19 Proportion
PERS 1 0.093918%0.091766%-0.002152%
PERS 2/3 0.120274%0.118486%-0.001788%
LEOFF 1 0.067877%0.069031%0.001154%
LEOFF 2 0.469232%0.492544%0.023312%
75
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
legislation. The allocation method the plan chose reflects the projected long-term contribution
effort based on historical data.
In fiscal year 2019, the state of Washington contributed 39.57 percent of LEOFF 2 employer
contributions pursuant to RCW 41.26.725 and all other employers contributed the remaining 60.43
percent of employer contributions.
The collective net pension liability (asset) was measured as of June 30, 2019, and the actuarial
valuation date on which the total pension liability (asset) is based was as of June 30, 201 8, with
update procedures used to roll forward the total pension liability to the measurement date.
Pension Expense
For the year ended December 31, 2019, the city recognized pension expense as follows:
Deferred Outflows of Resources and Deferred Inflows of Resources
At December 31, 2019, the city reported deferred outflows of resources and deferred inflows of
resources related to pensions from the following sources:
PERS 1 61,387$
PERS 2 347,774
LEOFF 1 (90,757)
LEOFF 2 134,166
Old Fire Pension (22,159)
TOTAL 430,411$
Pension Expense 2019
76
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
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, 2020. Other amounts reported as deferred outflows and deferred
inflows of resources related to pensions will be recognized in pension expense as follows:
Deferred Outflows Deferred Inflows
of Resources of Resources
-$ -$
Net difference between projected and actual investment earnings on pension plan investments - (235,749)
- -
Changes in proportion share - -
Contributions subsequent to the measurement date 340,274 -
TOTAL 340,274$ (235,749)$
Deferred Outflows Deferred Inflows
of Resources of Resources
Differences between expected and actual experience 329,736$ (247,438)$
Net difference between projected and actual investment earnings on pension plan investments - (1,675,244)
Changes of assumptions 29,471 (482,880)
Changes in proportion share 477,464 (614,340)
Contributions subsequent to the measurement date 560,857 -
TOTAL 1,397,528$ (3,019,902)$
Deferred Outflows Deferred Inflows
of Resources of Resources
Differences between expected and actual experience -$ -$
Net difference between projected and actual investment earnings on pension plan investments - (141,455)
Changes of assumptions - -
Changes in proportion share - -
Contributions subsequent to the measurement date - -
TOTAL -$ (141,455)$
Deferred Outflows Deferred Inflows
of Resources of Resources
Differences between expected and actual experience 821,104$ (205,195)$
Net difference between projected and actual investment earnings on pension plan investments - (2,339,557)
Changes of assumptions 18,798 (1,284,073)
Changes in proportion share 173,333 (612,351)
Contributions subsequent to the measurement date 488,156 -
TOTAL 1,501,391$ (4,441,176)$
TOTAL DEFERRED OUTFLOWS Deferred Outflows Deferred Inflows
AND INFLOWS FOR ALL PLANS of Resources of Resources
Differences between expected and actual experience 1,150,840$ (452,633)$
Net difference between projected and actual investment earnings on pension plan investments - (4,392,005)
Changes of assumptions 48,269 (1,766,953)
Changes in proportion share 650,797 (1,226,691)
Contributions subsequent to the measurement date 1,389,287 -
TOTAL 3,239,193$ (7,838,282)$
LEOFF 1
LEOFF 2
PERS 1
Differences between expected and actual experience
Changes of assumptions
PERS 2/3
Year ended December 31:PERS 1 PERS 2/3 LEOFF 1 LEOFF 2
2020 $ (52,043) $ (539,194) $ (32,856) $ (688,353)
2021 (123,275) (912,737) (72,418) (1,247,893)
2022 (43,992) (434,252) (26,278) (571,605)
2023 (16,440) (257,017) (9,903) (323,493)
2024 - (55,922) - (136,033)
Thereafter - 15,892 - (460,564)
Total Net Deferred (Inflows)/Outflows (235,749)$ (2,183,231)$ (141,455)$ (3,427,941)$
77
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
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 2019.
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 annuall y for a two-year term.
The two firefighters elected as members shall, in turn, select a third eligible member who shall
serve as an alternate in the event of an absence of one of the regularly elected members. In case
a vacancy occurs in the membership of the firefighters or retired members, the members shall
in the same manner elect a successor to serve the unexpired term. The board may select and
appoint a secretary who may, but need not be a member of the board. In case of absence or
inability of the chairperson to act, the board may select a chairperson pro tempore who shall
during such absence or inability to perform the duties and exercise the powers of the
chairperson. A majority of the members of the board shall constitute a quorum and have power
to transact business.
Benefits provided. All benefit terms are in statutes RCW 41.16, 41.18, and 41.26. FPF provides
retirement, disability, and death benefits. Each firefighter in service on March 1, 1970 receives
the greater of the benefit payable under the Washington Law Enforcement Officers' and
Firefighters' Retirement System and the benefits available under the provisions of prior law.
Where benefits under the old law exceed those under the new law for any firefighter, the excess
benefits are paid from the FPF of the city employing the member on March 1, 1970.
All members are retired and drawing benefits. 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
Pension Liabilities -$
Pension Assets (1,412,740)
Deferred Outflows of Resources -
Deferred Inflows of Resources (143,328)
Pension Expnse (22,159)$
Aggregate Pension Amounts - Old Fire Pension
78
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
annually. Regardless of the increase (or decrease) in the CPI, the benefits are increased at least
2% each year. The former applies to firefighters who retired from service after 1969, their
survivors, and to firefighters who retired for duty disability (but not their survivors) after 1969.
The latter applies to all other types of monthly benefits.
Employees Covered by Benefit Terms: Plan membership is limited to active members of the
Firefighters' Pension Fund (FPF) as of March 1, 1970. On that date, the Washington Law
Enforcement Officers' and Firefighters' System (LEOFF) was established. FPF is responsible
for paying the pensions of those members retired prior to March 1, 1970 and for providing the
"excess benefit", the excess of FPF formula benefits over the LEOFF benefits. Therefore, the
plan is closed to new members.
At December 31, 2019, the benefit terms covered the following employees:
Inactive employees, spouses, or beneficiaries currently receiving benefit payments: 9
Inactive employees entitled to but not yet receiving benefit payments: 0
Active Plan Members: 0
Contributions. As long as the FPF provides for benefits to covered members, the City will be
eligible to receive a share of the State's distribution of the fire insurance premium taxes. The
amount the City receives is 25% of all monies received by the State from taxes on fire insurance
premiums. Contributions can also come from taxes paid pursuant to the provisions of RCW
41.16.060. This statute require that each municipality levy up to $0.45 (only $0.225 of which
can be in excess of the property tax limit pursuant to RCW 84.52.043) per $1,000 of assessed
valuation, based on reports by a qualified actuary, to maintain the fund. The City did not
contribute to the plan in 2019.
Reporting Period contributions: $81,458
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, 2019 the Fire Pension Plan had the following investments, reported at fair market
value.
Federal Agency $ 15,070
Mutual Funds $ 2,546,234
Rate of Return. For the year ended December 31, 2019, the annual money-weighted rate of
return on pension plan investments, net of pension plan investment expense, was 20.34%. The
money-weighted rate of return expresses investment performance, net of investment expense,
adjusted for the changing amount actually invested.
Actuarial Assumptions: The total pension liability in the December 31, 2019 actuarial valuation
was determined using the following actuarial assumptions, applied to all periods included in
the measurement, unless otherwise specified:
79
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
Discount Rate 7.00%
Investment Rate of Return 7.00%
Inflation 2.50%
Salary increases n/a
Mortality rates were based on tables from the Society of Actuaries.
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, 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 (6.00%) or one percentage point higher
(8.00%) follows:
The following table presents the changes in Net Pension Liability for year ending December 31,
2019.
1% Decrease Current Discount Rate 1% Increase
6.00%7.00%8.00%
(1,634,934)$ (1,745,227)$ (1,840,379)$
Net Pension Liability (Asset)
2019
Changes in Net Pension Liability
Total Pension Plan Fiduciary Net Net Pension
Liability Position Liability
(a)(b)(a)-(b)
Balances at January 1, 2019 1,150,311$ 2,563,050$ (1,412,739)$
Changes for the year:
Interest 75,910 - 75,910
Changes in Benefit Terms - - -
Differences between expected and actual experience 189,364 - 189,364
Change in assumptions (2,010) - (2,010)
Contributions- City's Contribution - 81,458 (81,458)
Contributions- employee - - -
Net investment income - 515,983 (515,983)
Benefit payments, including refunds of employee contribution (131,781) (131,781) -
Administrative expense - (1,689) 1,689
Other changes - - -
Net changes 131,483 463,971 (332,488)
Balances at December 31, 2019 1,281,794$ 3,027,021$ (1,745,227)$
80
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
Deferred Outflows of Resources and Deferred Inflows of Resources
At December 31, 2019, the city reported deferred outflows of resources and deferred inflows of
resources related to the Fire Pension Plan from the following sources:
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, 2019. Other amounts reported as deferred outflows
and deferred inflows of resources related to pensions will be recognized in pension expense as
follows:
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.
The Fire Pension Fund is reported in the City’s CAFR as a Fiduciary Fund. Pension Liability,
Pension Asset, Deferred Inflows and Deferred Outflows are reported in the Government Wide
Statement of Net Position. A copy of the plan statements can be obtained by request at the
following address: City of Pasco 525 N 3rd Ave., Pasco, WA 99301.
Deferred Outflows Deferred Inflows
of Resources of Resources
Difference between expected and actual experience - -
Changes in Assumptions - -
Net difference between projected and actual
investment earnings on pension plan investments - (143,328)
Contributions subsequent to the measurement date - -
TOTAL -$ (143,328)$
Firemen's Pension Plan
Year Ended December 31 Amount
2020 (29,346)
2021 (44,305)
2022 (1,744)
2023 (67,933)
2024 -
Thereafter -
81
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
NOTE 14: Defined Benefit Other Postemployment Benefit (OPEB) Plans
The following table represents the aggregate OPEB amounts for all plans subject to the
requirements of GASBS 75 for the year 2019:
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’ (LEOFF1)
plan one retirement system.
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.
Benefits Provided: The members' necessary hospital, medical, prescription and nursing care
expenses not payable by worker's compensation, Medicare, or other insurance are covered.
Employees covered by benefit terms: At December 31, 2019, the following employees were
covered by the benefit terms:
Contributions: The City pays benefits as they come due.
Contributions rate: Benefits Due
Reporting period contributions: $ 633,129
Total OPEB Liability: The City’s total OPEB liability was valued as of December 31, 2019 and
was used to calculate the total OPEB liability measured as of December 31, 2019.
OPEB Liabilities 12,231,327$
OPEB Assets (2,270,659)
Deferred Outflows of Resources -
Deferred Inflows of Resources (333,409)
OPEB Expense (4,721,881)$
Aggregate OPEB Amounts - All Plans
Category Count
Inactive employees, spouses, or beneficiaries currently receiving benefit payments:30
Inactive employees entitled to but not yet receiving benefit payments: -
Active employees 1
Total 31
82
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
Actuarial Assumptions: The total liability in the December 31, 2019 actuarial valuation was
determined using the following actuarial assumptions, applied to all periods included in the
measurement, unless otherwise specified:
Discount Rate: 2.75%
Inflation: 2.75%
Salary Increases: 3.75%
Healthcare cost trend rates: 6.0% trending down to 3.94% over 55 years
Mortality Rates are based tables from the Society of Actuaries
Projections of the sharing of benefit-related costs are based on an established
pattern of practice.
Experience studies were not used in this valuation.
Inactive employees (retirees) pay 0% of the cost of benefits.
There were no ad hoc postemployment benefit changes (including ad hoc COLAs)
to the plan.
Discount Rate: The discount rate used to measure the total OPEB liability was 2.75%. 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.
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 net OPEB Liability would be if it were calculated using a
discount rate that is one point lower (1.75%) or one percentage point higher (3.75%) follows:
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 net 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:
1% Decrease Current Rate 1% Increase
1.75%2.75%3.75%
13,615,132$ 12,231,327$ 11,052,200$
Total OPEB Liability (asset)
11,109,030$ 12,231,327$ 13,513,238$
Total OPEB Liability (asset)
5.00% Decreasing to
2.94%
6.00% Decreasing to
3.94%
7.00% Decreasing to
4.94%
83
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
Changes in the Total OPEB Liability
The changes in total OPEB liability for 2019 are presented in the following table.
There is a schedule of sources of changes in the Total OPEB Liability presented as RSI,
immediately following the notes to the financial statements. Because this plan is unfunded there
are no disclosures relating to Fiduciary Net Position or investment experience.
There were no Deferred Outflows or Deferred Inflows of resources related to this OPEB Plan for
2019.
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 total OPEB
liability or (asset), and deferred inflows and outflows associated with the plan in the Government
Wide Statement of Net Position.
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 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
Plan Fiduciary Net Total OPEB
Total OPEB Position Liability
Liability (a)(b)(c) = (a)-(b)
Balances at January 1, 2019 16,223,295$ -$ 16,223,295$
Changes for the year:
Service Cost 99,097 - -
Interest 560,203 - 560,203
Changes of Benefit Terms -
Differences Between Expected and Actual Experience (2,410,901)
Changes in Assumptions (1,607,238)
Benefit payments (633,129) (633,129)
Net changes (3,991,968) - (3,991,968)
Balance as of December 31, 2019 12,231,327$ - 12,231,327
Schedule of changes in the Total OPEB Liability
84
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
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: As required by the Revised Code of Washington (RCW) Chapter 41.26, the
City provides lifetime medical care for members of the Law Enforcement Officers and Firefighters
(LEOFF) retirement system hired before October 1, 1977 under a single employer, defined benefit
healthcare plan administered by the City. The Old Fire Pension OPEB covers firefighters that were
hired prior to the creation of the LEOFF 1 retirement system. 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.
Benefits Provided: The members' necessary hospital, medical, and nursing care expenses not
payable by worker's compensation, social security, insurance provided by another employer, or
other pension plan, or any other similar source are covered. Most medical coverage for eligible
retirees is provided by the City's employee medical insurance program. Under authorization of the
LEOFF Disability Board, direct payment is made for other retiree medical expenses not covered
by standard medical plan benefit provisions. Members of the Fire Pension plan purchase medical
insurance through the City's medical insurance program.
Employees Covered by Benefit Terms: At December 31, 2019 (the census date), the benefit terms
covered the following employees:
Contributions: Funding for LEOFF retiree healthcare costs is provided entirely by the City as
required by the RCW. The City's funding policy is based upon pay-as-you-go financing
requirements for any requirements in excess of amounts previously set aside in the Fire Pension
OPEB trust fund. 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. Reporting period contributions: $ -
Category Count
Inactive employees, spouses, or beneficiaries currently receiving benefit payments:5
Inactive employees entitled to but not yet receiving benefit payments: -
Active employees -
Total 5
85
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
Actuarial Assumptions: The total OPEB liability in the December 31, 2019 actuarial valuation
was determined using the following actuarial assumptions, applied to all periods included in the
measurement, unless otherwise specified:
Discount Rate: 7.75%
Investment Rate of Return: 7.75%
Inflation: 2.50%
Healthcare cost trend rates: 6.0% in the first year, trending down to 3.94% over 55 years
Salary Increases: n/a
Mortality Rates were based on tables from the Society of Actuaries
Projections of the sharing of benefit-related costs are based on an established pattern of
practice.
No experience reports were used.
Inactive employees (retirees) pay 0% of the cost of benefits.
There were no ad hoc postemployment benefit changes (including an hoc COLAs) to the
plan.
Discount Rate: The discount rate used to measure the total OPEB liability is 7.75%. The 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 plan investments
was applied to all periods of projected benefit payments to determine the total OPEB liability.
Long-Term Expected Real Rate of Return: The long-term expected rate of return is 7.75%.
Sensitivity of the net OPEB liability to changes in the discount rate. The total OPEB liability of
the City, as well as what the City’s net 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:
Sensitivity of the net OPEB liability to changes in the healthcare cost trend rates. The total
OPEB liability of the City, as well as what the City's net OPEB liability would be if it were
calculated using healthcare cost trend rates that are one percentage point lower (5.00%) or one
percentage point higher (7.00%) than current healthcare cost trend rates follows:
86
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
Changes in the Net OPEB Liability
The changes in net OPEB liability for 2019 are presented in the following table.
At December 31, 2019, the City reported deferred outflows of resources and deferred inflows of
resources related to OPEB from the following sources:
Amounts reported as deferred outflows of resources and deferred inflows of resources related to
OPEB will be recognized in OPEB expense as follows:
Total OPEB Plan Fiduciary Net Net OPEB
Liability Position Liability
(a)(b)(c) = (a)-(b)
Balances at January 1, 2019 1,704,242$ 2,845,178$ (1,140,936)$
Changes for the year:
Service Cost - - -
Interest 128,678 - 128,678
Differences between expected and actual
experience (295,129) (295,129)
Change in assumptions (250,033) - (250,033)
Net investment income - 715,231 (715,231)
Contributions - - -
Benefit payments (87,778) (87,778) -
Administrative expense - (1,990) 1,990
Other changes - - -
Net changes (504,262) 625,463 (1,129,725)
Balances at December 31, 2019 1,199,980$ 3,470,641$ (2,270,661)$
Changes in the Net OPEB Liability
Deferred Outflows Deferred Inflows
of Resources of Resources
Difference between expected and actual experience - -
Changes in Assumptions - -
Net difference between projected and actual investment
earnings on pension plan investments - (333,409)
Contributions subsequent to the measurement date - -
TOTAL -$ (333,409)$
Old Firemen's Plan
87
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
Investments: The Old Fire OPEB Plan does not have an investment policy. The board approves
any purchase or sale transactions regarding assets of the plan. The plan has only one investment,
a mutual fund that was purchased in 2003. The investment is detailed in the following table.
The Old Fire OPEB Plan does not have a specific reserve policy or requirement, however all
assets of the plan are considered assets of the trust and as such are obligated for payment of
current and future benefits to plan members.
NOTE 15: 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.
NOTE 16: SUBSEQUENT EVENTS
Year Ended
December 31 Amount
2020 (98,397)
2021 (98,399)
2022 (36,973)
2023 (99,640)
2024 -
Remaining -
Name of Investment Type
Balance as of
12/31/19
Rating by
Morningstar
2019 YTD
Return
Annualized
Return
Washington Mutual Investers Fund-A Mutual Fund $3,438,460 Gold 20.19% 25.54%
88
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
On February 2020, the Governor of the state of Washington declared a state of emergency in
response to the spread of a deadly new virus. In the weeks following the declaration,
precautionary measures to slow the spread of the virus have been ordered. These measures
include closing schools, colleges and universities, cancelling public events, prohibiting public
and private gatherings, and requiring people to stay home unless they are leaving for an essential
function.
This has impacted revenue streams in various areas of the city such as utilities, permitting and
recreational activities. City expects decreased revenue in sales tax, tourism related taxes, and
motor vehicle fuel taxes. However, the full impact of the revenue loss is not known at this time.
Management has approved payment plans and postponed activities, when possible, in attempt to
mitigate the decrease in revenue. City has healthy reserves to weather the economic downturn if
needed.
The length of time these measures will be in place, and the full extent of the financial impact on
the city is unknown at this time.
On March 2, 2020, the City passed Ordinance No. 4483 establishing Local Improvement District
No. 151 for sewer improvements and authorizing the issuance of bonds. Proceeds from district
special assessments will be used for bond redemption. District assessments are estimated to be
$5.7 million. Bonds have not been issued as of the date of this report.
On May 13, 2020, the city issued $7.2 million in water and sewer refunding revenue bonds and
$16.4 million in water and sewer revenue bonds for capital improvements. The refunding bonds
bear interest rates from 4 to 5 percent and will be redeemed over the next 10 years and the
revenue bonds bear interest rates from 1.2 to 3.6 percent will be redeemed over the next 30 years.
NOTE 17: PRIOR PERIOD ADJUSTMENT
The following table itemizes the prior period adjustments made in 2019, along with the purposes for the
adjustments:
Purpose for prior period adjustments:
Governmental Activities
Purpose for
Adjustment Decrease Increase
Adjustment to Fund
Balance / Net Position
General Fund 1 (18,267)$ -$ (18,267)$
CDBG Fund 2 - 17,837 17,837
Animal Control 3 - 44,174 44,174
Stadium Fund 4 - 5,000 5,000
Construction Fund 2 & 5 (383,685) - (383,685)
Medical / Dental Fund 6 - 1,848,008 1,848,008
1,513,067
Business-Type Funds
Water/Sewer Utility Fund 7 (47,195) - (47,195)
(47,195)$
Prior Period Adjustments
Total
Total
89
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
1. Accounts payable balance was increased by $18,267 due to uncleared payments removed
in error in prior years.
2. Staff time charges to a grant funded project in the prior year were removed from the
construction work in progress asset. This adjustment of $17,837 impacted the CDBG
fund and the Construction fund.
3. The Animal Control Fund was reported as an Agency Fund in the past and should have
been reported as Special Revenue Fund. The beginning fund balance of $44,174 was
added in 2019.
4. Accounts payable balance was reduce by $5,000 due to an accrual from 2017 which was
not reversed in the correct year.
5. As projects were completed and moved out of construction work in progress,
expenditures were identified which should not have been capitalized in CWIP. These
expenditures netted $365,848. These were removed from the asset and expensed.
6. In the past, a liability was recorded for the reserve amount required for self-insurance.
The reserve amount was classified as restricted cash and restricted fund, further it did not
meet the criteria of a liability. The liability was reduced by $1,848,008.
7. As projects were completed and moved out of construction work in progress,
expenditures were identified which should not have been capitalized in CWIP. These
expenditures netted $47,195. These were removed from the asset and expensed.
90
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
REQUIRED SUPPLEMENTARY INFORMATION
91
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
Old Fire OPEB Fund
A schedule of contributions for the Old Fire OPEB Fund is not included because the plan is fully
funded and there have been no contributions for the past five years. The OPEB plan's fiduciary
net position is projected to have sufficient funds to pay all projected benefit payment for current
plan members. Therefore, there no future projected contributions.
2017 2018 2019
Total OPEB liability
Service cost -$ -$ -
Interest 121,181 121,446 128,678
Changes of benefit terms - - -
Differences between expected and actual experience - 61,074 (295,126)
Changes of assumptions - - (250,033)
Benefit payments, including refunds of contributions (144,838) (90,659) (87,778)
Implicit Rate Subsidy Credit - - -
Net change in total OPEB liability (23,657) 91,861 (504,259)
Total OPEB liability - beginning 1,636,038 1,612,381 1,704,242
Total OPEB liability - ending (a)1,612,381 1,704,242 1,199,983
Plan fiduciary net position
Net investment income 507,854 (84,994) 715,231
Contributions - employer - - -
Contributions - employee - - -
Benefit payments, including refunds of contributions (144,838) (90,659) (87,778)
Administrative expense (4,048) (2,542) (1,990)
Other - - -
Net change in plan fidiciary net position 358,968 (178,195) 625,463
Plan fiduciary net position - beginning 2,664,405 3,023,373 2,845,178
Plan fiduciary net position - ending (b)3,023,373 2,845,178 3,470,641
Net OPEB liability ending (a) - (b)(1,410,992)$ (1,140,936)$ (2,270,659)
Plan fiduciary net position as a % of total OPEB liability (b)/(a)187.5% 166.9% 289.2%
Covered-employee payroll**N/A N/A N/A
Net OPEB liability as a % of covered-employee payroll N/A N/A N/A
Notes to Schedule:
*Until a full 10-year trend is compiled, only information for those years available is presented. The
City adopted GASB 75 for the fiscal year ending December 31, 2017.
Schedule of Changes in Net OPEB Liability and Related Ratios
Old Fire OPEB
For the year ended December 31, 2019
Last 10 Fiscal Years*
2017 2018 2019
Annual money-weighted rate of return, net of investment expense 19.61%-2.86%25.54%
Notes to Schedule:
*Until a full 10-year trend is compiled, only information for those years available is presented.
For the year ended December 31, 2019
Last 10 Fiscal Years*
Schedule of Investment Returns
Old Fire OPEB
92
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
LEOFF 1 OPEB Fund
The Schedule of Investment Returns was not included for this plan because there are no fund
assets to invest. This schedule is 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.
2017 2018 2019
Actuarially Determined Contribution 547,515$ 609,121$ 633,129$
Contribution in relation to the actuarially 545,401 609,121 633,129
determined contribution
Contribution deficiency (excess) - - -
Covered Payroll 152,318$ 158,030$ 168152
Contributions as a % of Covered Payroll 358% 385% 377%
Notes to Schedule
Actuarial Cost Method Entry Age
Asset Valuation Method Not Applicable
Measurement Date
Discount Rate 2.75%
Healthcare Cost Trend 6% in the first year trending down
to 3.94% over 55 years* Until a full 10 year trend is compiled, only information for those years available is
presented. The City adopted GASB 75 for the fiscal year ending December 31, 2017.
December 31, 2019
Schedule of City Contributions
LEOFF 1 OPEB
For the year ended December 31, 2019
Last 10 Fiscal Years*
93
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
Old Fire Pension Fund
2017 2018 2019
Total OPEB liability
Service cost 89,165$ 95,746$ 99,097
Interest 556,341 557,569 560,203
Changes of benefit terms - - -
Differences between expected and actual experience - - (2,410,901)
Changes of assumptions - - (1,607,238)
Benefit payments (545,401) (609,121) (633,129)
Implicit Rate Subsidy Credit - - -
Net change in total OPEB liability 100,105 44,194 (3,991,968)
Total OPEB liability - beginning 16,078,996 16,179,101 16,223,295
Total OPEB liability - ending 16,179,101 16,223,295 12,231,327
Covered-employee payroll**152,318$ 158,030$ 168,152$
Total OPEB liability as a % of covered-employee payroll 10621.9% 10266.0% 7274.0%
Notes to Schedule:
Schedule of Changes in Total OPEB Liability and Related Ratios
LEOFF 1 OPEB
For the year ended December 31, 2019
Last 10 Fiscal Years*
*Until a full 10-year trend is compiled, only information for those years available is presented. The
City adopted GASB 75 for the fiscal year ending December 31, 2017.
Fire Pension Fund - For Years Ended:
Total Pension Liability 2015 2016 2017 2018 2019
Service Cost -$ -$ -$ -$ -
Interest 82,477 79,996 77,207 87,555 75,910
Changes of benefit terms - - - -
Differences between expected and actual experience - - 79,758 (2,791) 189,364
Changes of assumptions - - 9,808 - (2,010)
Benefit payments, including refunds of employee contributions (116,770) (118,053) (120,503) (128,399) (131,781)
Net change in total pension liability (34,293) (38,057) 46,270 (43,635) 131,483
Total pension liability - beginning 1,220,026 1,185,733 1,147,676 1,193,946 1,150,311
Total pension liability - ending 1,185,733 1,147,676 1,193,946 1,150,311 1,281,794
Plan Fiduciary Net Position
Contributions- employer 54,506 58,193 63,503 73,414 81,458
Contributions - employee - - - - -
Net investment income (19,689) 267,948 384,118 (139,435) 515,983
Benefit payments, including refunds of employee contributions (116,770) (118,053) (120,503) (128,399) (131,781)
Administrative expense (3,398) (7,914) (5,870) (4,923) (1,689)
Other - - - - -
Net change in plan fiduciary net position (85,351) 200,174 321,248 (199,343) 463,971
Plan fiduciary net position- beginning 2,326,321 2,240,970 2,441,145 2,762,393 2,563,050
Plan fiduciary net position-ending 2,240,970 2,441,144 2,762,393 2,563,050 3,027,021
City's net pension liability (1,055,237)$ (1,293,468)$ (1,568,447)$ (1,412,740)$ (1,745,227)
Plan fiduciary net position as a percentage of the total pension 188.99%212.70%231.37%222.81%236.16%
Covered employee payroll - - - - -
City's net pension liability as a percentage of covered employee
payroll n/a n/a n/a n/a n/a
Notes to schedule:
Schedule of Changes in the City's Net Pension Liability and Related Ratios
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.
94
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
2015 2016 2017 2018 2019
Statutorially Determined Contribution 54,506$ 58,193$ 63,503$ 73,414$ 81458
Less Contributions Made (54,506) (58,193) (63,503) (73,414) (81,458)
Contribution Deficiency (excess)- - - - -
Covered-Employee Payroll -$ -$ -$ -$ -$
Contributions as a percentage of covered employee payroll n/a n/a 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 Contributions
Fire Pension Fund
2015 2016 2017 2018 2019
Annual Money Weighted Rate of Return, Net of Investment Expense -0.86% 12.14%15.94% -5.10% 20.34%
Schedule of Investment Returns - Fire Pension Plan
95
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
State Plans
*GASB 68 requires a disclosure of the changes in Net Pension Liability for the last 10 fiscal years, or as
years are available. These schedules will be built prospectively until they contain ten years of data.
PERS PLAN 1 2014 2015 2016 2017 2018 2019
Employer's percentage of the net pension liability 0.097647%0.102321%0.098322%0.099661%0.093918%0.091766%
Employer's proportionate share of the collective net
pension liability 4,919,014$ 5,352,340$ 5,280,355$ 4,728,992$ 4,194,410$ 3,528,728$
Covered payroll 10,817,340 11,375,820 11,376,115 12,505,985 13,010,425 12,738,991
Employer's proportionate share of the net pension
liability as a percentage of covered employee payroll 45.47%47.05%46.42%37.81%32.24%27.70%
Plan fiduciary net position as a percentage of the total pension
liablity 61.19%59.10%57.03%61.24%63.22%67.12%
PERS PLAN 2/3
Employer's percentage of the net pension liability 0.114462%0.125949%0.122675%0.126788%0.120274%0.118486%
Employer's proportionate share of the collective net
pension liability 2,313,690 4,500,230 6,176,589 4,405,277 2,053,572 1,150,902
Covered payroll 10,474,619 11,212,390 11,878,130 12,471,204 13,008,696 13,173,229
Employer's proportionate share of the net pension
liability as a percentage of covered employee payroll 22.09%40.14%52.00%35.32%15.79%8.74%
Plan fiduciary net position as a percentage of the total pension
liablity 93.29%89.20%85.82%90.97%95.77%97.77%
LEOFF 1
Employer's percentage of the net pension asset 0.067804%0.067488%0.066826%0.066934%0.067877%0.069031%
Employer's proportionate share of the collective net
pension asset (822,321) (813,380) (688,499) (1,015,536) (1,232,308) (1,364,474)
Covered payroll 219,984 207,267 226,769 197,219 162,162 163,046
Employer's proportionate share of the net pension
asset as a percentage of covered employee payroll -373.81%-392.43%-303.61%-514.93%-759.92%-836.86%
Plan fiduciary net position as a percentage of the total pension
liablity 126.91%127.36%123.74%135.96%144.42%148.78%
LEOFF 2
Employer's percentage of the net pension asset 0.365709%0.405844%0.400187%0.427714%0.469232%0.492544%
Employer's proportionate share of the collective net
pension asset (4,853,116) (4,171,265) (2,327,608) (5,935,285) (9,526,433) (11,410,732)
Covered payroll 10,497,629$ 12,154,638$ 12,622,501$ 14,338,666$ 17,145,685$ 17,210,964$
Employer's proportionate share of the net pension
asset as a percentage of covered employee payroll -46.23%-34.32%-18.44%-41.39%-55.56%-66.30%
Plan fiduciary net position as a percentage of the total pension
liablity 116.75% 111.67% 106.04% 113.36 118.5 119.43
Schedule of Proportionate Share of the Net Pension Liability/(Asset)
As of June 30
Last 10 Fiscal Years*
96
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
*GASB 68 requires a disclosure of the changes in Net Pension Liability for the last 10 fiscal years, or as
years are available. These schedules will be built prospectively until they contain ten years of data.
PERS PLAN 1 2014 2015 2016 2017 2018 2019
Statutorily or contractually required contributions 31,484$ 16,252$ 500,426$ 614,166$ 658,434$ 651,374$
Contributions in relation to the statutorily or contractually
required contributions (31,484) (16,252) (500,426) (614,166) (658,434) (651,374)
Contribution deficiency (excess)- - - - - -
Covered payroll 10,817,340 11,375,820 11,376,115 12,505,985 13,010,425 12,738,991
Contributions as a percentage of covered payroll 0.29%0.14%4.40%4.91%5.06%5.11%
PERS PLAN 2/3
Statutorily or contractually required contributions 964,775 1,140,430 649,813 850,217 999,063 1,016,896
Contributions in relation to the statutorily or contractually
required contributions (964,775) (1,140,430) (649,813) (850,217) (999,063) (1,016,896)
Contribution deficiency (excess)- - - - -
Covered payroll 10,474,619 11,212,390 11,877,299 12,471,204 13,008,696 13,173,229
Contributions as a percentage of covered payroll 9.21%10.17%5.47%6.82%7.68%7.72%
LEOFF 1
Statutorily or contractually required contributions 396 373 407 355 292 293
Contributions in relation to the statutorily or contractually
required contributions (396) (373) (407) (355) (292) (293)
Contribution deficiency (excess)- - - - -
Covered payroll 219,984 207,267 225,834 197,218 162,162 163,046
Contributions as a percentage of covered payroll 0.18%0.18%0.18%0.18%0.18%0.18%
LEOFF 2
Statutorily or contractually required contributions 549,396 635,688 660,156 763,912 937,526 909,786
Contributions in relation to the statutorily or contractually
required contributions (549,396) (635,688) (660,156) (763,912) (937,526) (909,786)
Contribution deficiency (excess)- - - - - -
Covered payroll 10,497,629$ 12,154,638$ 12,622,501$ 14,338,666$ 17,145,685$ 17,210,964$
Contributions as a percentage of covered payroll 5.23%5.23%5.23%5.33%5.47%5.29%
Schedue of Employer Contributions
As of December 31
Last 10 Fiscal Years*
97
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
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 funds are used to account for the accumulation of resources for and the payment of general long -term
debt principal and interest.
Permanent Funds
Permanent funds are used to report resources that are legally restricted to the extent th at 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.
Ambulance Project Fund
Ambulance Services Fund – Fund is used to account for all activities related to providing medical services,
including ambulance transports to the residents of the City. Revenues sources generated from service fees and
ambulance utility rates.
Local Improvement District Loan Fund
LID Loan Fund – Fund is used to account for the resources accumulated and payments made local improvement
district related loans.
98
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
Total Total
Nonmajor Nonmajor Total
Other Special Debt Other
Revenue Service Governmental
ASSETS
Cash & cash equivalents 20,658,118$ 166,499$ 20,824,617$
Restricted cash:
Program, grant, donation 882 - 882
Customer deposits 11,336 - 11,336
Debt Service 221,723 221,723
Unspent bond proceeds 1,119,471 - 1,119,471
Investments 6,980,517 - 6,980,517
Receivables (net of allowances):
Taxes 755,499 - 755,499
Customers 411,169 - 411,169
Interfund loans 78,471 - 78,471
Grants 155,271 - 155,271
Special assessments & loans 121,037 7,183 128,220
Total assets 30,291,771 395,405 30,687,176
LIABILITIES
Accounts payable 1,177,142 - 1,177,142
Interfund loans payable 450,000 - 450,000
Due to other funds 252,000 - 252,000
Deposits payable from restricted assets 11,336 - 11,336
Total liabilities 1,890,478 - 1,890,478
DEFERRED INFLOWS OF RESOURCES
Deferred revenues 240,151 7,183 247,334
FUND BALANCES
Restricted
Street and boulevard 8,980,194 - 8,980,194
Litter & housing abatement 474,250 - 474,250
Park development 2,997,734 - 2,997,734
Culture & recreation 108,252 - 108,252
Capital improvements 9,123,369 - 9,123,369
Economic development 71,637 - 71,637
Debt guarantee 1,119,471 343,910 1,463,381
Committed
Special revenue funds 5,576,098 - 5,576,098
Unassigned (289,863) 44,312 (245,551)
Total fund balances 28,161,142 388,222 28,549,364
Total liabilities, deferrend inflows of
resources and fund balances 30,291,771$ 395,405$ 30,687,176$
Combining Balance Sheet
Nonmajor Other Governmental Funds
December 31, 2019
99
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
Total Total
Nonmajor Nonmajor Total
Other Special Debt Other
Revenue Service Governmental
REVENUES
Taxes 3,917,781$ -$ 3,917,781$
Licenses and permits 582,445 - 582,445
Intergovernmental revenue 2,829,951 - 2,829,951
Charges for services 8,528,934 - 8,528,934
Fines and forfeitures 183,718 - 183,718
Miscellaneous revenue 1,973,528 26,559 2,000,087
Total revenues 18,016,357 26,559 18,042,916
EXPENDITURES
Current:
Transportation 3,480,090 - 3,480,090
Natural and economic environment 6,306,360 - 6,306,360
Culture and recreation 2,621,041 - 2,621,041
Capital outlay:
Transportation 61,586 - 61,586
Natural and economic environment 31,893 - 31,893
Culture and recreation 72,185 - 72,185
Total expenditures 12,573,155 - 12,573,155
Excess of revenues
over expenditures 5,443,202 26,559 5,469,761
OTHER FINANCING SOURCES (USES)
Insurance recoveries 51,233 - 51,233
Proceeds from sale of asset 311,766 - 311,766
Bond Issued 1,645,000 - 1,645,000
Premium on bond Issued 355,000 - 355,000
Transfers in 2,807,933 - 2,807,933
Transfers out (6,699,200) - (6,699,200)
Total other financing sources (uses)(1,528,268) - (1,528,268)
Net change in fund balances 3,914,934 26,559 3,941,493
Fund balances - beginning as restated*24,246,208 361,663 24,607,871
Fund balances - ending 28,161,142$ 388,222$ 28,549,364$
* see note 17 for prior period adjustment
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Nonmajor Other Governmental Funds
For the Year Ended December 31, 2019
100
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
Community
City Arterial I-182 Traffic Street Development
Street Street Impact Overlay Block Grant
ASSETS
Cash & cash equivalents 3,348$ 643,863$ 1,225,898$ 3,155,847$ 795$
Restricted cash:
Program, grant, donation -
Customer deposits 1,000
Debt Service
Unspent bond proceeds -
Investments 193,588 349,121 1,191,313 -
Receivables (net of allowances):
Taxes 158,468 81,626 - -
Customers 192,223 -
Interfund loans -
Grants 153,325
Special assessments & loans 121,037
Total assets 354,039 919,077 1,575,019 4,347,160 276,157
LIABILITIES
Accounts payable 158,809 21,896
Interfund loans payable -
Due to other funds 190,000 62,000
Deposits payable from restricted assets 1,000
Total liabilities 348,809 - - - 84,896
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues 121,037
FUND BALANCES
Restricted
Street and boulevard 872,362 1,575,019 4,347,160
Litter & housing abatement
Park development
Culture & recreation
Capital improvements
Economic development 70,224
Debt guarantee
Committed
Special revenue funds 5,230 46,715
Unassigned
Total fund balances 5,230 919,077 1,575,019 4,347,160 70,224
Total liabilities, deferrend inflows of
resources and fund balances 354,039$ 919,077$ 1,575,019$ 4,347,160$ 276,157$
The notes to financial statements are an integral part of this statement.Continued on next page
Combining Balance Sheet
Nonmajor Special Revenue Funds
December 31, 2019
101
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
M.L. King
Community City View Boulevard Athletic Golf
Center Cemetery Perpetual Program Course
ASSETS
Cash & cash equivalents 125,756$ 146,388$ 1,617,420$ 288,462$ 118,975$
Restricted cash:
Program, grant, donation 247 635
Customer deposits 4,300
Debt Service
Unspent bond proceeds
Investments 489,762
Receivables (net of allowances):
Taxes
Customers 1,197 27,780
Interfund loans 78,471
Grants
Special assessments & loans
Total assets 125,756 147,832 2,185,653 289,097 151,055
LIABILITIES
Accounts payable 5,803 11,278 41,327 6,081
Interfund loans payable
Due to other funds
Deposits payable from restricted assets 4,300
Total liabilities 5,803 11,278 - 41,327 10,381
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues 2,584 78,846 32,422
FUND BALANCES
Restricted
Street and boulevard 2,185,653
Litter & housing abatement
Park development
Culture & recreation 108,252
Capital improvements
Economic development
Debt guarantee
Committed
Special revenue funds 117,369 57,708 247,770
Unassigned
Total fund balances 117,369 57,708 2,185,653 247,770 108,252
Total liabilities, deferrend inflows of
resources and fund balances 125,756$ 147,832$ 2,185,653$ 289,097$ 151,055$
The notes to financial statements are an integral part of this statement.Continued on next page
Combining Balance Sheet
Nonmajor Special Revenue Funds
December 31, 2019
102
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
Rivershore Trail
Animal Senior Multi-Modal School & Marina
Control Center Facility Impact Fees Maintenance
ASSETS
Cash & cash equivalents 49,235$ 47,059$ 153,425$ 714,555$ 157,113$
Restricted cash:
Program, grant, donation
Customer deposits 6,036
Debt Service
Unspent bond proceeds
Investments
Receivables (net of allowances):
Taxes
Customers 245
Interfund loans
Grants 1,946
Special assessments & loans
Total assets 49,235 49,250 159,461 714,555 157,113
LIABILITIES
Accounts payable 64,224 4,739 4,250 695,629 913
Interfund loans payable 450,000
Due to other funds
Deposits payable from restricted assets 6,036
Total liabilities 64,224 4,739 10,286 695,629 450,913
DEFERRED INFLOWS OF RESOURCES
Deferred revenues 2,762
FUND BALANCES
Restricted
Street and boulevard
Litter & housing abatement
Park development
Culture & recreation -
Capital improvements
Economic development
Debt guarantee
Committed
Special revenue funds 44,511 146,413 -
Unassigned (14,989) 18,926 (293,800)
Total fund balances (14,989) 44,511 146,413 18,926 (293,800)
Total liabilities, deferrend inflows of
resources and fund balances 49,235$ 49,250$ 159,461$ 714,555$ 157,113$
The notes to financial statements are an integral part of this statement.Continued on next page
Combining Balance Sheet
Nonmajor Special Revenue Funds
December 31, 2019
103
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
Special T.R.A.C./HAPO
Lodging Litter Revolving Development Park
Assessment Abatement Abatement & Operating Development
ASSETS
Cash & cash equivalents 29,862$ 31,900$ 361,762$ 490,055$ 2,352,440$
Restricted cash:
Program, grant, donation
Customer deposits
Debt Service
Unspent bond proceeds
Investments 645,294
Receivables (net of allowances):
Taxes 39,127
Customers 313 89,411 100,000
Interfund loans
Grants
Special assessments & loans
Total assets 68,989 32,213 451,173 590,055 2,997,734
LIABILITIES
Accounts payable 67,576 837 5,799
Interfund loans payable
Due to other funds
Deposits payable from restricted assets
Total liabilities 67,576 837 5,799 - -
DEFERRED INFLOWS OF RESOURCES
Deferred revenues 2,500
FUND BALANCES
Restricted
Street and boulevard
Litter & housing abatement 28,876 445,374
Park development 2,997,734
Culture & recreation
Capital improvements
Economic development 1,413
Debt guarantee
Committed
Special revenue funds 590,055
Unassigned
Total fund balances 1,413 28,876 445,374 590,055 2,997,734
Total liabilities, deferrend inflows of
resources and fund balances 68,989$ 32,213$ 451,173$ 590,055$ 2,997,734$
The notes to financial statements are an integral part of this statement.Continued on next page
Combining Balance Sheet
Nonmajor Special Revenue Funds
December 31, 2019
104
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
Total
Stadium/Nonmajor
Capital Economic Convention Hotel/Motel Special
Improvements Development Center Excise Tax Revenue
ASSETS
Cash & cash equivalents 5,281,879$ 2,819,536$ 815,828$ 26,717$ 20,658,118$
Restricted cash:
Program, grant, donation 882
Customer deposits 11,336
Debt Service -
Unspent bond proceeds 1,119,471 1,119,471
Investments 3,442,980 668,459 6,980,517
Receivables (net of allowances):
Taxes 398,510 77,768 755,499
Customers 411,169
Interfund loans 78,471
Grants 155,271
Special assessments & loans 121,037
Total assets 9,123,369 3,487,995 1,935,299 104,485 30,291,771
LIABILITIES
Accounts payable 83,749 4,232 1,177,142
Interfund loans payable 450,000
Due to other funds 252,000
Deposits payable from restricted assets 11,336
Total liabilities - 83,749 4,232 - 1,890,478
DEFERRED INFLOWS OF RESOURCES
Deferred revenues 240,151
FUND BALANCES
Restricted
Street and boulevard 8,980,194
Litter & housing abatement 474,250
Park development 2,997,734
Culture & recreation 108,252
Capital improvements 9,123,369 9,123,369
Economic development 71,637
Debt guarantee 1,119,471 1,119,471
Committed
Special revenue funds 3,404,246 811,596 104,485 5,576,098
Unassigned (289,863)
Total fund balances 9,123,369 3,404,246 1,931,067 104,485 28,161,142
Total liabilities, deferrend inflows of
resources and fund balances 9,123,369$ 3,487,995$ 1,935,299$ 104,485$ 30,291,771$
The notes to financial statements are an integral part of this statement.
Combining Balance Sheet
Nonmajor Special Revenue Funds
December 31, 2019
105
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
Community
City Arterial I-182 Traffic Street Development
Street Street Impact Overlay Block Grant
REVENUES
Taxes -$
Licenses and permits 582,445 -
Intergovernmental revenue 1,040,538 522,604 729,204
Charges for services 612,466 74,214 610,648 -
Fines and forfeitures -
Miscellaneous revenue 5,320 14,972 24,617 85,379 31,884
Total revenues 2,240,769 611,790 635,265 85,379 761,088
EXPENDITURES
Current:
Transportation 2,536,189 3,733 6,152 820,989 -
Natural and economic environment 305,053
Culture and recreation -
Capital outlay:-
Transportation 61,586 -
Natural and economic environment -
Culture and recreation -
Total expenditures 2,597,775 3,733 6,152 820,989 305,053
Excess of revenues
over expenditures (357,006) 608,057 629,113 (735,610) 456,035
OTHER FINANCING SOURCES (USES)
Insurance recoveries 9,274 -
Proceeds from sale of asset -
Bond Issued -
Premium on bond Issued -
Transfers in 559,702 1,041,020 -
Transfers out (58,296) (727,226) (145,667) (441,324) (498,470)
Total other financing sources (uses)510,680 (727,226) (145,667) 599,696 (498,470)
Net change in fund balances 153,674 (119,169) 483,446 (135,914) (42,435)
Fund balances - beginning as restated*(148,444) 1,038,246 1,091,573 4,483,074 112,659
Fund balances - ending 5,230$ 919,077$ 1,575,019$ 4,347,160$ 70,224$
* see note 17 for prior period adjustment
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Nonmajor Special Revenue Funds
For the Year Ended December 31, 2019
106
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
M.L. King
Community City View Boulevard Athletic Golf
Center Cemetery Perpetual Program Course
REVENUES
Taxes
Licenses and permits
Intergovernmental revenue
Charges for services 90 281,210 220,390 179,325 1,523,838
Fines and forfeitures
Miscellaneous revenue 53,434 2,412 42,589 4,348 292,759
Total revenues 53,524 283,622 262,979 183,673 1,816,597
EXPENDITURES
Current:
Transportation 10,247
Natural and economic environment 287,176
Culture and recreation 157,514 204,067 1,806,983
Capital outlay:
Transportation
Natural and economic environment 8,264
Culture and recreation 18,316
Total expenditures 175,830 295,440 10,247 204,067 1,806,983
Excess of revenues
over expenditures (122,306) (11,818) 252,732 (20,394) 9,614
OTHER FINANCING SOURCES (USES)
Insurance recoveries
Proceeds from sale of asset
Bond Issued
Premium on bond Issued
Transfers in 70,000
Transfers out (137,600)
Total other financing sources (uses)70,000 - (137,600) - -
Net change in fund balances (52,306) (11,818) 115,132 (20,394) 9,614
Fund balances - beginning as restated*169,675 69,526 2,070,521 268,164 98,638
Fund balances - ending 117,369$ 57,708$ 2,185,653$ 247,770$ 108,252$
* see note 17 for prior period adjustment
Continued on next page
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Nonmajor Special Revenue Funds
For the Year Ended December 31, 2019
107
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
Rivershore Trail
Animal Senior Multi-Modal School & Marina
Control Center Facility Impact Fees Maintenance
REVENUES
Taxes
Licenses and permits
Intergovernmental revenue 14,436 101,883
Charges for services 771,580 16,214 3,048,500
Fines and forfeitures
Miscellaneous revenue 169 26,542 86,918 26,951
Total revenues 771,749 57,192 188,801 3,048,500 26,951
EXPENDITURES
Current:
Transportation 92,089
Natural and economic environment 830,911 3,029,884
Culture and recreation 279,838 14,233
Capital outlay:
Transportation
Natural and economic environment
Culture and recreation 53,869
Total expenditures 830,911 279,838 92,089 3,029,884 68,102
Excess of revenues
over expenditures (59,162) (222,646) 96,712 18,616 (41,151)
OTHER FINANCING SOURCES (USES)
Insurance recoveries 41,959
Proceeds from sale of asset
Bond Issued
Premium on bond Issued
Transfers in 230,000
Transfers out (300,000)
Total other financing sources (uses)- 230,000 (300,000) - 41,959
Net change in fund balances (59,162) 7,354 (203,288) 18,616 808
Fund balances - beginning as restated*44,173 37,157 349,701 310 (294,608)
Fund balances - ending (14,989)$ 44,511$ 146,413$ 18,926$ (293,800)$
* see note 17 for prior period adjustment
Continued on next page
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Nonmajor Special Revenue Funds
For the Year Ended December 31, 2019
108
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
Special T.R.A.C./HAPO
Lodging Litter Revolving Development Park
Assessment Abatement Abatement & Operating Development
REVENUES
Taxes
Licenses and permits
Intergovernmental revenue
Charges for services 312,791 12,500 110,154 755,014
Fines and forfeitures 183,718
Miscellaneous revenue 504 355 21,450 5,765 45,776
Total revenues 313,295 12,855 315,322 5,765 800,790
EXPENDITURES
Current:
Transportation 10,691
Natural and economic environment 313,295 263,824
Culture and recreation 146,020 12,386
Capital outlay:
Transportation
Natural and economic environment
Culture and recreation
Total expenditures 313,295 10,691 263,824 146,020 12,386
Excess of revenues
over expenditures - 2,164 51,498 (140,255) 788,404
OTHER FINANCING SOURCES (USES)
Insurance recoveries
Proceeds from sale of asset
Bond Issued
Premium on bond Issued
Transfers in 5,000 209,133
Transfers out (10,106)
Total other financing sources (uses)- 5,000 - 209,133 (10,106)
Net change in fund balances - 7,164 51,498 68,878 778,298
Fund balances - beginning as restated* 1,413 21,712 393,876 521,177 2,219,436
Fund balances - ending 1,413$ 28,876$ 445,374$ 590,055$ 2,997,734$
* see note 17 for prior period adjustment
Continued on next page
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Nonmajor Special Revenue Funds
For the Year Ended December 31, 2019
109
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
Total
Nonmajor
Capital Economic Stadium/ Hotel/Motel Special
Improvement Development Conv. Center Excise tax Revenue
REVENUES
Taxes 3,264,061$ -$ 653,720$ 3,917,781$
Licenses and permits 582,445
Intergovernmental revenue 421,286 2,829,951
Charges for services 8,528,934
Fines and forfeitures 183,718
Miscellaneous revenue 156,002 1,005,641 39,703 38 1,973,528
Total revenues 3,420,063 1,426,927 39,703 653,758 18,016,357
EXPENDITURES
Current:
Transportation 3,480,090
Natural and economic environment 19,057 1,056,989 20,031 180,140 6,306,360
Culture and recreation 2,621,041
Capital outlay:
Transportation 61,586
Natural and economic environment 23,629 31,893
Culture and recreation 72,185
Total expenditures 19,057 1,080,618 20,031 180,140 12,573,155
Excess of revenues
over expenditures 3,401,006 346,309 19,672 473,618 5,443,202
OTHER FINANCING SOURCES (USES)
Insurance recoveries 51,233
Proceeds from sale of asset 311,766 311,766
Bond Issued 1,645,000 1,645,000
Premium on bond Issued 355,000 355,000
Transfers in 533,078 160,000 2,807,933
Transfers out (3,130,849) (880,529) (369,133) (6,699,200)
Total other financing sources (uses)(3,130,849) 844,844 1,279,471 (369,133) (1,528,268)
Net change in fund balances 270,157 1,191,153 1,299,143 104,485 3,914,934
Fund balances - beginning as restated* 8,853,212 2,213,093 631,924 - 24,246,208
Fund balances - ending 9,123,369$ 3,404,246$ 1,931,067$ 104,485$ 28,161,142$
* see note 17 for prior period adjustment
The notes to financial statements are an integral part of this statement.
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Nonmajor Special Revenue Funds
For the Year Ended December 31, 2019
110
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
Total
Local Improv. Nonmajor
LID District Debt
Bonds Guaranty Service
ASSETS
Cash & cash equivalents 44,312$ 122,187$ 166,499$
Restricted cash:
Debt service 221,723 221,723
Receivables (net of allowances):
Special assessments & loans 7,183 7,183
Total assets 51,495 343,910 395,405
LIABILITIES
Total liabilities - - -
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues 7,183 7,183
FUND BALANCES
Restricted
Debt guarantee 343,910 343,910
Unassigned 44,312 - 44,312
Total fund balances 44,312 343,910 388,222
Total liabilities, deferrend inflows of
resources and fund balances 51,495$ 343,910$ 395,405$
December 31, 2019
Combining Balance Sheet
Nonmajor Debt Service Funds
111
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
Total
Local Improv. Nonmajor
LID District Debt
Bonds Guaranty Service
REVENUES
Miscellaneous revenue 22,130$ 4,429$ 26,559$
Total revenues 22,130 4,429 26,559
EXPENDITURES
Total expenditures - - -
Excess of revenues
over expenditures 22,130 4,429 26,559
OTHER FINANCING SOURCES (USES)
Transfers out -
Total other financing sources (uses)- - -
Net change in fund balances 22,130 4,429 26,559
Fund balances - beginning 22,182 339,481 361,663
Fund balances - ending 44,312$ 343,910$ 388,222$
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Nonmajor Debt Service Funds
December 31, 2019
112
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
Variance to
Original Final Final Budget
Budget Budget Actual Over (under)
REVENUES
Intergovernmental revenue 17,262,000$ 6,665,000$ 1,060,204$ (5,604,796)$
Charges for services 15,788,500 15,788,500 (15,788,500)
Total revenues 33,050,500 22,453,500 1,060,204 (21,393,296)
EXPENDITURES
Current:
General government 1,702,185 1,702,185 473,388 (1,228,797)
Public safety 70,264 70,264
Transportation 56,084 56,084
Culture and recreation 67,229 67,229
Capital outlay:
General government 3,523,736 4,043,736 1,253,261 (2,790,475)
Public safety 19,205,000 15,365,000 1,838,457 (13,526,543)
Transportation 35,039,399 27,246,399 7,460,071 (19,786,328)
Natural & economic environment 71 71
Culture and recreation 14,138,424 14,654,424 1,299,366 (13,355,058)
Total expenditures 73,608,744 63,011,744 12,518,191 (50,493,553)
Excess of revenues over (under) expenditures (40,558,244) (40,558,244) (11,457,987) 29,100,257
OTHER FINANCING SOURCES
Debt proceeds and other miscellaneous 7,921,000 7,921,000 (7,921,000)
Transfers in 32,637,244 32,637,244 11,821,158 (20,816,086)
Total other financing sources 40,558,244 40,558,244 11,821,158 (20,816,086)
Net change in fund balances - - 363,171 363,171
Fund balances - beginning as restated *- - 82,862 82,862
Fund balances - ending -$ -$ 446,033$ 446,033$
* see note 17 for prior period adjustment
CONSTRUCTION FUND
Schedule of Revenues, Expenditures, and Changes in Fund Balances-Budget to Actual
Construction Fund - Major Fund
For the Year Ended December 31, 2019
2019/2020 Biennial Budgeted Amounts
113
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
Variance to
Original Final Final Budget
Budget Budget Actual Over (under)
REVENUES
Intergovernmental revenue 3,107,720$ 3,107,720$ 2,477,499$ (630,221)$
Charges for services 12,635,684 12,635,684 6,469,995 (6,165,689)
Miscellaneous revenue 26,444 26,444
Total revenues 15,743,404 15,743,404 8,973,938 (6,769,466)
EXPENDITURES
Current:
Public safety 22,482,463 22,552,796 7,622,773 (14,930,023)
Capital outlay:
Public safety 87,000 87,000 18,735 (68,265)
Debt service:
Interest 48,680 48,680
Total expenditures 22,569,463 22,639,796 7,690,188 (14,949,608)
Excess of revenues over (under) expenditures (6,826,059) (6,896,392) 1,283,750 (8,180,142)
OTHER FINANCING SOURCES
Insurance recoveries 10 10
Transfers in 840,000 1,540,000 1,120,000 (420,000)
Total other financing sources 840,000 1,540,000 1,120,010 (419,990)
Net change in fund balances (5,986,059) (5,356,392) 2,403,760 7,760,152
Fund balances - beginning 1,228,550 762,753 (465,797) (1,228,550)
Fund balances - ending (4,757,509)$ (4,593,639)$ 1,937,963$ 6,531,602$
Schedule of Revenues, Expenditures, and Changes in Fund Balances-Budget to Actual
Ambulance Fund - Major Fund
For the Year Ended December 31, 2019
AMBULANCE
2019/2020 Biennial Budgeted Amounts
114
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
Variance to
Original Final Final Budget
Budget Budget Actual Over (under)
REVENUES
Miscellaneous revenue 68,721$ 5,373,721$ 3,357,589$ (2,016,132)$
Total revenues 68,721 5,373,721 3,357,589 (2,016,132)
EXPENDITURES
Current:
General government 8,393 8,393 - (8,393)
Debt service:
Principal 71,944 71,944 - (71,944)
Interest 7,319 7,319 9,076 1,757
Total expenditures 87,656 87,656 9,076 (78,580)
Excess of revenues over (under) expenditures (18,935) 5,286,065 3,348,513 1,937,552
OTHER FINANCING SOURCES
Transfers out - (5,305,000) (4,538,203) (766,797)
Total other financing sources - (5,305,000) (4,538,203) (766,797)
Net change in fund balances (18,935) (18,935) (1,189,690) (1,170,755)
Fund balances - beginning 47,774 (65,988) (65,988) -
Fund balances - ending 28,839$ (84,923)$ (1,255,678)$ (1,170,755)$
LOCAL IMPROVEMENT DISTRICT LOANS
Schedule of Revenues, Expenditures, and Changes in Fund Balances-Budget to Actual
LID Loans - Major Fund
For the Year Ended December 31, 2019
2019/2020 Biennial Budgeted Amounts
115
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
Final Budget 2019 Actual
Variance with
Final Budget
Over (Under)Final Budget 2019 Actual
Variance with
Final Budget
Over (Under)
Special Revenue Funds
City Street Fund 5,708,306$ 2,800,471$ (2,907,835)$ 5,553,218$ 2,656,071$ (2,897,147)$
Arterial Street Fund 1,097,694 611,790 (485,904) 1,440,636 730,959 (709,677)
I-82 Traffic Impact Fund 510,000 635,265 125,265 371,584 151,819 (219,765)
Street Overlay Fund 2,116,461 1,126,399 (990,062) 4,614,913 1,262,313 (3,352,600)
Community Dev Block Grant Fund 1,806,424 761,088 (1,045,336) 1,806,424 803,523 (1,002,901)
ML King Community Center Fund 236,216 123,524 (112,692) 302,928 175,830 (127,098)
City View Cemetery Fund 518,200 283,622 (234,578) 561,900 295,440 (266,460)
Blvd Perpetual Maintenance Fund 363,263 262,979 (100,284) 293,564 147,847 (145,717)
Athletic Program Fund 324,595 183,673 (140,922) 408,582 204,067 (204,515)
Golf Course 3,718,000 1,816,597 (1,901,403) 3,667,382 1,806,983 (1,860,399)
Animal Control - 771,749 771,749 - 830,911 830,911
Senior Center Fund 592,716 287,192 (305,524) 605,032 279,838 (325,194)
Multi-Modal Fund 382,252 188,801 (193,451) 458,805 392,089 (66,716)
School Impact Fees 5,250,000 3,048,500 (2,201,500) 5,250,000 3,029,884 (2,220,116)
Rivershore Trail & Marina Fund 489,200 26,951 (462,249) 81,002 68,102 (12,900)
Special Lodging Assess Fund 650,500 313,295 (337,205) 650,500 313,295 (337,205)
Litter Abatement Fund 35,100 17,855 (17,245) 30,238 10,691 (19,547)
Revolving Abatement Fund 407,000 315,322 (91,678) 800,318 263,824 (536,494)
TRAC Develop & Operating Fund 556,000 214,898 (341,102) 553,344 146,020 (407,324)
Park Development Fund 1,453,200 800,790 (652,410) 3,660,336 22,492 (3,637,844)
Capital Improvement Fund 4,860,000 3,420,063 (1,439,937) 7,759,527 3,149,906 (4,609,621)
Economic Development Fund 2,743,200 2,271,771 (471,429) 2,273,087 1,080,618 (1,192,469)
Stadium/Convention Ctr Fund 2,388,600 2,199,703 (188,897) 2,371,222 900,560 (1,470,662)
Hotel/Motel Excise tax 1,251,000 653,758 (597,242) 1,212,244 549,273 (662,971)
Total 37,457,927 23,136,056 (14,321,871) 44,726,786 19,272,355 (25,454,431)
Debt Service Funds
LID Bonds 22,130 22,130 - - -
LID Guarantee 755,500 4,429 (751,071) - - -
Total 755,500$ 26,559$ (728,941)$ -$ -$ -$
Schedule of Revenues and Expenditures - Budget to Actual
For the Year Ended December 31, 2019
Nonmajor Other Governmental Funds
Revenues Expenditures
2019/2020 Biennial Budgeted Amounts
116
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
SUN WILLOWS GOLF COURSE
VOLUNTEER PARK
117
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
Enterprise funds are used to account for the financing of goods or services for which a fee is charged
to external users for use of those goods and services. The City of Pasco does not have any nonmajor
enterprise funds.
Internal service funds 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.
Nonmajor Proprietary Funds
Enterprise Funds
Internal Service Funds
118
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
Medical/
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 368,309$ 6,973,330$ 1,667,287$ 13,381$ 7,709$ 2,633,834$ 11,663,850$
Self-insured reserve 2,129,808 2,129,808
Investments 1,656,256 526,163 1,889,553 4,071,972
Receivables 1,504 - 1,504
Total current assets 369,813 8,629,586 4,323,258 13,381 7,709 4,523,387 17,867,134
Noncurrent assets:
Machinery and equipment 5,031,228 - 1,376,112 6,407,340
Total noncurrent assets - 5,031,228 - - - 1,376,112 6,407,340
Total assets 369,813 13,660,814 4,323,258 13,381 7,709 5,899,499 24,274,474
DEFERRED OUTFLOWS
Pension related 44,498 - 44,498
LIABILITIES
Current liabilities:
Accounts payable 63,991 12,741 136,828 7,709 221,269
Total current liabilities 63,991 12,741 136,828 - 7,709 - 221,269
Noncurrent liabilities:
Pension liability 119,826 - 119,826
Total noncurrent liabilities 119,826 - - - - - 119,826
Total liabilities 183,817 12,741 136,828 - 7,709 - 341,095
DEFERRED INFLOWS
Pension related 83,364 - 83,364
NET POSITION
Net investment in capital assets 5,031,228 - 1,376,112 6,407,340
Restricted for State Law WAC 2,129,808 - 2,129,808
Unrestricted 147,130 8,616,845 2,056,622 13,381 - 4,523,387 15,357,365
Total net position 147,130$ 13,648,073$ 4,186,430$ 13,381$ -$ 5,899,499$ 23,894,513$
Business-Type ActivitiesGovernmental Activities
Combining Statement of Net Position
Nonmajor Internal Services Fund
December 31, 2019
119
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
Equipment Equipment Medical/Dental Equipment Equipment Total
Rental Rental Insurance Central Rental Rental Internal
Operations Replacement Fund Stores Operations Replacement Service
OPERATING REVENUES
Charges for goods and services 1,507,627$ 1,530,780$ 6,444,064$ 114,784$ 634,382$ 10,231,637$
Total operating revenues 1,507,627 1,530,780 6,444,064 - 114,784 634,382 10,231,637
OPERATING EXPENSES
Depreciation 828,999 - 287,340 1,116,339
Salaries & wages 373,373 56,264 429,637
Personnel benefits 157,466 19,170 176,636
Supplies 740,881 34,203 - 114,784 889,868
Services 287,332 6,922,524 7,209,856
Total operating expenses 1,559,052 863,202 6,997,958 - 114,784 287,340 9,822,336
OPERATING INCOME (LOSS)(51,425) 667,578 (553,894) - - 347,042 409,301
NONOPERATING REVENUES (EXPENSES)
Investment income 3,718 156,580 64,660 172 94,557 319,687
Miscellaneous 11,974 140,664 152,638
Gain (Loss) on disposal of capital assets (256) - (256)
Total nonoperating revenues 15,692 156,324 205,324 172 - 94,557 472,069
Income (loss) before contributions and transfers (35,733) 823,902 (348,570) 172 - 441,599 881,370
Transfers out - (7,384) (7,384)
Transfers in 7,384 - 7,384
Changes in net position (28,349) 823,902 (348,570) 172 (7,384) 441,599 881,370
Net position - beginning as restated*175,479 12,824,171 4,535,000 13,209 7,384 5,457,900 23,013,143
Net position - ending 147,130$ 13,648,073$ 4,186,430$ 13,381$ -$ 5,899,499$ 23,894,513
* see note 17 for prior period adjustment
Governmental Activities
Combining Statement of Revenues, Expenses, and Changes in Net Position
Nonmajor Internal Service Funds
For the Year Ended December 31, 2019
Business-Type Activities
120
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
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 1,507,335$ 1,530,780$ 6,444,064$ -$ 114,784$ 634,382$ 10,231,345$
Payments to employees (523,108) - (75,434) - - - (598,542)
Payments to suppliers (1,020,821) (21,462) (6,548,669) - (129,426) (418,247) (8,138,625)
Net cash provided by operating activities (36,594) 1,509,318 (180,039) - (14,642) 216,135 1,494,178
CASH FLOWS FROM NON-CAPITAL
FINANCING ACTIVITIES
Miscellaneous 11,974 - 140,664 - - - 152,638
Transfers In (Out)7,384 - (7,384) - -
19,358 - 140,664 - (7,384) - 152,638
CASH FLOW FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:
Acquisition of capital assets - (234,083) - - - (9,993) (244,076)
Net cash used in capital activities - (234,083) - - - (9,993) (244,076)
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment income 3,718 156,580 173,361 172 - 94,557 428,388
Investment purchases - 1,413,844 - - - (1,067,378) 346,466
Net cash provided from investing activities 3,718 1,570,424 173,361 172 - (972,821) 774,854
Net increase in cash and cash equivalents (13,518) 2,845,659 133,986 172 (22,026) (766,679) 2,177,594
Beginning cash and cash equivalents 381,827 4,127,671 3,663,109 13,209 29,735 3,400,513 11,616,064
Ending cash and cash equivalents 368,309 6,973,330 3,797,095 13,381 7,709 2,633,834 13,793,658
CASH PROVIDED BY OPERATING
ACTIVITIES:
Net operating income (loss)(51,425) 667,578 (553,894) - - 347,042 409,301
ADJUSTMENTS TO RECONCILE OPERATING
INCOME TO NET CASH PROVIDED BY
OPERATING ACTIVITIES
Depreciation - 828,999 - - - 287,340 1,116,339
(Increase)/decrease in customer receivables (292) - - - - - (292)
Increase (decrease) in accounts payable*7,392 12,741 373,855 - (14,642) (418,247) (38,901)
(Increase) decrease in pension deferred outflow (18,518) - - - - - (18,518)
Increase (decrease) in pension (4,545) - - - - - (4,545)
Increase (decrease) in pension deferred inflow 30,794 - - - - - 30,794
Net cash provided by operating activities (36,594)$ 1,509,318$ (180,039)$ -$ (14,642)$ 216,135$ 1,494,178$
*see prior period adjustment
Combining Statement of Cash Flows
Nonmajor Internal Service Funds
For the Year Ended December 31, 2019
Governmental Activities Business-Type Activities
121
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
Pension and other post-employment benefit trust funds are used to report resources that are required to be
held in trust for the members and beneficiaries of defined benefit pension plans, defined contribution
plans, other postemployment benefit plans or other employee benefit plans.
Custodial funds are used to report resources held by the reporting government in a purely custodial capacity.
Custodial funds typically involve only the receipt, temporary investment, and remittance of fiduciary
resources to individuals, private organizations, or other governments.
Trust and Custodial Funds
Pension and Other Postemployment Benefit Trust Funds
Custodial Funds
Cemetery Perpetual Care Trust Fund
Fund is used to accumulate and invest resources that are required to be held in trust for the use of
perpetual care of the cemetery grounds.
122
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
Firemen's Other
Firemen's Post-Employment Cemetery
Pension Benefits Perpetual Care
ASSETS
Cash 436,529$ 13,476$ 89,913$
Restricted cash-Cemetery 467,971
Receivables
Interest Receivable 18,319 18,706
Special assessments & loans 10,869
Investments at fair market value:
Federal agency 15,070
Mutual funds 2,546,234 3,438,460
Total assets 3,027,021 3,470,642 557,884
LIABILITIES
Total liabilities - - -
NET POSITION
Held in trust for pension benefits
and other purposes 3,027,021$ 3,470,642$ 557,884$
Combining Statement of Net Position
Fiduciary Funds
December 31, 2019
Trust Funds
123
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
Public Animal
Facility Control Total
District Authority Custodial
ASSETS
Cash & cash equivalents 70,215$ 31,234$ 101,449$
Receivables
Taxes 110,201 110,201
Total assets 180,416 31,234 211,650
LIABILITIES
Accounts payable 163,708 - 163,708
Due to other governments 16,708 31,234 47,942
Total liabilities 180,416$ 31,234$ 211,650$
Combining Statement of Assets and Liabilities
Custodial Funds
December 31, 2019
Custodial Funds
124
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
Firemen's Other
Firemen's Post-Employment Cemetery
Pension Benefits Perpetual Care Total
ADDITIONS
Taxes 81,458$ -$ -$ 81,458$
Charges for Service 19,594 19,594
Interest 469,044 654,456 7,056 1,130,556
Dividends 46,939 60,775 107,714
Total additions 597,441 715,231 26,650 1,339,322
DEDUCTIONS
Pension benefits 131,781 131,781
Medical premiums 87,540 87,540
Services 1,689 2,228 3,917
Total deductions 133,470 89,768 - 223,238
Change in net assets 463,971 625,463 26,650 1,116,084
Net position - beginning 2,563,050 2,845,179 531,234 5,939,463
Net position - ending 3,027,021$ 3,470,642$ 557,884$ 7,055,547$
Combining Statement of Changes to
Fiduciary Funds Position
For The Year Ended December 31, 2019
Trust Funds
Balance Balance Balance Balance
January 1 Additions Deletions December 31 January 1 Additions Deletions December 31
ASSETS
Cash & cash equivalents 74,103$ 596,146$ 600,034$ 70,215$ 1,176$ 115,598$ 85,540$ 31,234$
Receivables
Taxes 90,996 19,205 110,201 -
Total assets 165,099 615,351 600,034 180,416 1,176 115,598 85,540 31,234
LIABILITIES
Accounts payable 90,996 72,712 163,708 40,517 40,517 -
Due to other governments 74,103 57,395 16,708 1,176 115,598 85,540 31,234
Total liabilities 165,099$ 72,712$ 57,395$ 180,416$ 41,693$ 115,598$ 126,057$ 31,234$
Combining Statement of Changes in Assets & Liabilities
Custodial Funds
December 31, 2019
Pasco Public Facility District Animal Control Authority
125
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
Public Facility
District
Animal Control
Authority
Total Custodial
Funds
ADDITIONS
Taxes 594,635$ -$ 594,635$
PPFD Pasco Support 20,000 20,000
Investment income 716 280 996
Local grants, other payments 9,151 9,151
Pasco payments 36,088 36,088
Total Additions 615,351 45,519 660,870
DEDUCTIONS
Services 625,675 625,675
Capital 45,239 45,239
Total deductions 625,675 45,239 670,914
Change in net position (10,324) 280 (10,044)
Net position - beginning 27,032 70,963 97,995
Net position - ending 16,708$ 71,243$ 87,951$
The notes to the financial statements are an integral part of this statement.
Combining Statement of Changes to
Custodial Funds Net Position
For The Year Ended December 31, 2019
Custodial Funds
126
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
SACAJAWEA HISTORICAL STATE PARK
127
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
STATE REQUIRED SCHEDULES
128
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
Schedule 9 -Schedule of Liabilities
For the Year Ended December 31, 2019
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 1,005,000 - 495,000 510,000
251.11 Councilmanic 2019 LTGO Fire Station No. 83 & No. 84 12/1/2049 - 14,800,000 - 14,800,000
251.11 Councilmanic 2019 LTGO Gesa Stadium 12/1/2049 - 1,645,000 - 1,645,000
251.11 Councilmanic 2019 LTGO Animal Shelter 12/1/2049 - 1,645,000 - 1,645,000
251.11 Councilmanic 2015 LTGO Police Station 12/1/2035 7,860,000 - 335,000 7,525,000
TOTAL GENERAL OBLIGATIONS 8,865,000 18,090,000 830,000 26,125,000
REVENUE OBLIGATIONS
252.11 Revenue Bond 2009 Revenue Water Sewer Bond1 11/1/2029 6,010,000 - 495,000 5,515,000
252.11 Revenue Bond 2010A Water/Sewer Bond 6/1/2029 4,185,000 - 305,000 3,880,000
252.11 Revenue Bond 2013A Sewer Bond 12/1/2028 2,020,000 - 170,000 1,850,000
252.11 Revenue Bond 2013T Reuse Facility Bond 12/1/2028 5,480,000 - 460,000 5,020,000
252.11 Revenue Bond 2015 Water/Sewer Revenue Refunding 12/1/2040 13,645,000 - 615,000 13,030,000
252.11 Councilmanic Cashmere Valley Bank Sewer SRF Refunding37/31/2019 1,142,986 - 1,142,986 -
252.11 Revenue Bond 2017 Water/Sewer Improvement Revenue 2 12/1/2042 9,415,000 - - 9,415,000
263.82 PWTF Loan Riverview Trunk/SE Sewer PW00-043 7/1/2020 222,282 - 111,140 111,142
263.88 DWSRF Loan Columbia Water supply DM15-952-037 10/1/2034 6,349,559 - 354,704 5,994,855
263.86 Revenue Bond HAEIFAC - Reuse Facility Improvement Loan 7/1/2028 1,431,466 - 121,754 1,309,712
259.12 Accrued Leave Compensated Absences 12/31/2019 3,188,495 3,339,880 2,688,287 3,840,088
264.40 OPEB Liability Other Post Employment Benefits 12/31/2019 16,223,295 3,991,968 12,231,327
264.30 Pension Liability Pension Liabilities 12/31/2019 6,247,982 - 1,568,352 4,679,630
TOTAL REVENUE OBLIGATIONS 75,561,065 3,339,880 12,024,191 66,876,754
TOTAL LIABILITIES 84,426,065$ 21,429,880$ 12,854,191$ 93,001,754$
3Cashmere Valley Bank issued a short term LTGO Bond to pay off a Department of Ecology State Water Pollution Loan from the State Revolving Fund (SRF).
2New revenue bonds were issued by the Water/Sewer Utility in 2017 to be used for Sewer infrastructure improvements. This bond requires interest only payments until 2030.
MCAG NO. 0292
Notes to Schedule of Long-Term Liabilities
1In 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.
129
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
Grantor/Other
Pass-Through Grantor Identification STATE
Program Title Number AWARDS
Washington State Department of Ecology
2017-2019 Biennial Stormwater Capacity Grant 7,852
Washington State Secretery of State
2019-2020 TARGET ZERO (WTSC)784
Department of Receration Conservation Office
Schlagel Park Boating Facilities Upgrade 8,788
A Street Sporting 18-1361 AD 1,751
Washington State Office of Public Defence
Public Defense Improvement 20,000
Washington State Department of Transportation
Oregon Ave (SR 397)- Phase 1 182 to Lewis St (or A 185,333
Road 84 Safe Walking Route Connection HLP-SR17(007) LA 9214 38
Rowena Chess School Crossing HLP-SR17(006) LA 9213 83
185,454
Department of Health & Human Services
Prehospital Participation Grant 1,266
AOC by the Washington State legislature
LFO Funding Distribution E2SHB-1783 11,570
TOTAL STATE AND LOCAL ASSISTANCE:237,465
GR9.FR.35.99.FR
MCAG NO. 0292
CITY OF PASCO
SCHEDULE 15- SCHEDULE OF STATE AND LOCAL FINANCIAL ASSISTANCE
For the Year Ended December 31, 2019
WQSWCAP-1719-Pasco-00120
18-2355 DEV
GR0.MN.34.19.01
STPUS-0397 (008) LA-7866
GR0.PL.33.20.TZ
130
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
From
Grantor/Federal Other Pass-From
Pass-Through Grantor CFDA Identification Through Direct
Program Title Number Number Awards Awards Total Note:
Forest Service, Department Of Agriculture
Pass-Through WA State Department of Natural Resources
Cooperative Forestry Assistance 10.664 IAA-93-095254 15,000 15,000 2
Economic Development Administration, US Department of Commerce-
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 - 3
Community Development Block Grant/Entitlement Grant 14.218 B-16-MC-53-009- CDBG 14,123 14,123 3
Community Development Block Grant/Entitlement Grant 14.218 B-17-MC-53-009- CDBG 247,556 247,556 3
Community Development Block Grant/Entitlement Grant 14.218 B-18-MC-53-009- CDBG 127,151 127,151 3
Community Development Block Grant/Entitlement Grant 14.218 B-19-MC-53-009- CDBG 350,353 350,353 3
Community Development Block Grant/Entitlement Grant cluster - 739,183 739,183
Community Development Block Grants Section 108 Loan Guarantees 14.248 B-18-MC-53-0009 2,640 2,640
Pass-Through Washington Department of Commerce
Community Development Block Grants/State's program 14.228 08-F6401-014 60 60 3
Pass-Through City of Richland
Home Investment Partnerships Program 14.239 Home Program 62,137 62,137 3 & 4
Pass-Through Washington Dept of Archaeology & Historic Preservation
Historic Preservation Fund Grants-In-Aid (A,B)15.904 FY18-61018-007 5,000 5,000 3
Bureau of Justice Assistance
Pass -Through Washington Association of Sherrifs & Police Chiefs
Law Enforcement Assistance National Instant Criminal Background Check System 16.309 HB 1501 2,000 2,000 2
Bureau of Justice Assistance, Department of Justice
Bullet Proof Vest Partnership Program 16.607 2018 Bullet Proof Vest 6,063 6,063 2
Public Safety Partnership and Community Policing Grant 16.710 2017UMWX0103 162,182 162,182 2
Pass-Through Washington Department of Commerce
Violence Against Women Formula Grant 16.588 F18-31103-023 34,698 34,698 2
Pass-Through from US Marshalls
Equitable Sharing Program 16.922 Equitable Sharing 3,147 3,147 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 145,547 145,547 2
Highway Planning and Construction 20.205 STPUL-3515 (009) LA 9626 1,052 1,052 2
Highway Planning and Construction 20.205 STPUL-3515(008) LA-8322 5,264 5,264 2
Highway Planning and Construction 20.205 STPUS-HLP-3530(006) & LA-7055 714,565 714,565 2
Highway Planning and Construction 20.205 STPUL (3515) (010) LA 9648 306 306
Highway Planning and Construction Cluster Total US Dept. of Transportation FHA 866,734 - 866,734
Pass-Through Washington Association of Sherriff & Police Commission
State and Community Highway Safety 20.600 GR0.PL.33.19.TS 6,241 6,241 2
Highway Safety Cluster Total US Dept. of Transportation 6,241 - 6,241
Administration for Community Living, Department of Health & Human Services
Pass-Through Yakima County, Office of Aging & Long Term Care
Special Programs for the Aging, Title III. Part B, Grans for
Supportive Services and Senior Centers 93.044 ALTCCOG 2018-18 14,436 14,436 2
Aging Cluster Total US Dept of Health & Human Services 14,436 - 14,436
US Department of Homeland Security
Pass-Through Franklin County Emergency Management
Homeland Security Grant Program (A)97.067 E18-146, FFY 2017 14,881 14,881 2
Staffing for Adeqiate Fire and Emergency Response 97.083 EMW-2016-FH-00428 443,847 443,847 2
Total US Department of Homeland Security 458,728 - 458,728
TOTAL FEDERAL AWARDS EXPENDED:1,468,181$ 910,068$ 2,378,249$
The accompanying notes are an integral part of this schedule.
MCAG NO. 0292
SCHEDULE 16- SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Year Ended December 31, 2019
131
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
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 recogni zed
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 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 amount of loan funds disbursed to program participants for the
year was $0. The amount of loan repayments received for the year was $31,475.
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.
The amount of loan funds directly disbursed to program participants for the year was $49,000.
NOTE 4 – 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 5 – Indirect cost rate
The city has elected to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance.
132
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
MCAG 0292 Schedule 17
City of Pasco
LIMITATION ON PUBLIC WORKS PROJECTS PERFORMED BY PUBLIC EMPLOYEES
For the Year Ended December 31, 2019
Total current public work construction budget as amended (annual or 81,444,850
biennial as applicable)
Allowable portion of total public works (10 percent of line 1)8,144,485
Less: Amount (if any) in excess of permitted amount from prior budget
period.0
Total allowable public works (line 2 minus line 3)8,144,485
Total public works projects performed by public emploiyees during the
current year (include work performed by a county)862,162.99
If this is the second year of a biennial budget, total public works projects
performed by public employees during the first year of biennium 0
Restricted under (over) allowable (line 4 minus line 5 minus line 6)7,282,322
NOTE: If the restricted amount is over allowable, this amount must be carried forward
to the next budget period report.
133
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
MCAG NO. 0292
City of Pasco
Schedule 19-LABOR RELATIONS CONSULTANTS
For the Year Ended December 31, 2019
Has your government engaged labor relations consultants? _X__ Yes ___ No
If yes, please provide the following information for each consultant:
Name of firm: Summit Law Group
Name of consultant: Elizabeth Kennar & Danial Swedlow
Business address:
315 5th Ave Suite Suite 1000
Amount paid to consultant during fiscal year: $32,421.09
Terms and conditions, as applicable, including:
Rates (e.g., hourly, etc.) $330.00 per hour
Maximum compensation allowed -0-
Duration of services Various throughout the year
Services provided Union Bargaining, Human Resources issues (FMLA,PFML, COVID-19
134
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
CITY OF PASCO
SCHEDULE 21 - LOCAL GOVERNMENT RISK ASSUMPTION
For the Year Ended December 31, 2019
How do you insure property and liability risks, if at all?
Formal or informatl self-insurance program/activity for some or all perils/risks
Belong to a public entity risk pool
x Purchase private insurance
Retain risk internally without formal or informal self-insurance program/activity
x Self-insure for some or all benefits
Belong to a public entity risk pool
All benefits are provided by a health insurance company or HMO
Not applicable – no such benefits offered
How do you insure unemployment compensation obligations, if any?
x Self-insured ("Reimbursable")
Belong to a public entity risk pool
Pay taxes to Employment Security Department ("Taxable")
Not applicable - no employees
How do you insure workers compensation obligations, if any?
Self-insured ("Reimbursable")
Belong to a public entity risk pool
x Pay premiums to Labor and Industries
Not applicable - no employees
How do you insure other risks or obligations, if any?
Self-insure some or all other risks
x Belong to public entity risk pool
Purchase private insurance
Not applicable - have no other insurable risks
Medical / Rx Dental Program/Risk 3 Program/Risk 4 Program/Risk 5
Self-Insurance as a formal program?Yes Yes
If yes, do other governments participate?No No
If yes, please list participating governments.
Self-Insure as part of a joint program?No No
Does a Third-Party Administer manage claims?Yes Yes
If no, does somebody reconcile claims payments to the
information in the claims management software?
Has program had a claims audit in last three years?Yes Yes
Are program resources sufficient to cover expenses?Yes Yes
Does an actuary estimate program liability?No No
Number of claims paid during the period?28,675 1,798
Total amount of paid claims during the period?$6,070,303 $427,620
Total amount of recoveries during the period?$87,263 0
Provide any other information necessary to explain answers to the Schedule 21 questions above.
Self-insurance program title or type of risk or peril covered
by formal self-insurance:
MCAG NO. 0292
How do you provide health and welfare insurance (ex: medical, dental, prescription drug, and/or vision benefits) to employees, if at all?
135
City of Pasco, Washington 2019 Comprehensive Annual Financial Report
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
Griselda Garcia
Accounting Lead
Darcy Buckley
Accounting Lead
Karen Conn
Staff Accountant
Charlene Sandland
Staff Accountant
Rosa Moreno
Staff Accountant
136