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Home My WebLink About2020 ACFR City of Pasco, Washington 2020 Comprehensive Annual Financial Report 2 Table of Contents INTRODUCTORY SECTION .................................................................................................. 8 Letter of Transmittal ........................................................................................................................... 9 City of Pasco Organizational Chart .................................................................................................... 16 Directory of City Officials and Leadership Team ................................................................................. 17 FINANCIAL SECTION .......................................................................................................... 20 Independent Auditor’s Report ........................................................................................................... 22 Management’s Discussion and Analysis .............................................................................................. 26 Financial Highlights ....................................................................................................................... 26 Overview of the Financial Statements ............................................................................................ 27 Government-wide Overall Financial Analysis ................................................................................. 29 Financial Analysis of the City’s Funds. ............................................................................................ 34 General Fund Budgetary Highlights ............................................................................................... 36 Capital Asset and Debt Administration ........................................................................................... 36 Economic Factors and Next Year’s Budgets and Rates .................................................................... 38 Requests for Information ............................................................................................................... 39 Basic Financial Statements ................................................................................................................. 40 Government Wide Financial Statements ............................................................................................. 41 Statement of Net Position ............................................................................................................... 41 Statement of Activities ................................................................................................................... 43 Fund Financial Statements ................................................................................................................. 45 Balance Sheet – Governmental Funds ............................................................................................ 45 Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds ......... 47 Reconciliation of Statement of Revenues, Expenditures and Changes in Fund Balance of Governmental Funds to the Statement of Net Activities ................................................................. 50 Statement of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual – General Fund .............................................................................................................................................. 51 Statement of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual – Ambulance Fund ........................................................................................................................... 52 Statement of Net Position – Proprietary Fund ................................................................................ 53 Statement of Revenues, Expenses and Changes in Net Position – Proprietary Funds ....................... 55 Statement of Cash Flows – Proprietary Fund ................................................................................. 56 Statement of Net Position – Fiduciary Funds .................................................................................. 57 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 3 Statement of Changes in Fiduciary Net Position – Fiduciary Funds ................................................. 58 Notes to the Financial Statements .................................................................................................. 60 NOTE 1: Summary of Significant Accounting Policies .................................................................. 60 NOTE 2: Reconciliation of Governmentwide and Fund Financial Statements ............................. 72 NOTE 3: Deposits and Investments ............................................................................................ 75 NOTE 4: Property Taxes ............................................................................................................ 80 NOTE 5: Capital Assets and CWIP .............................................................................................. 81 NOTE 6: Inter-fund Balances and Transfers ................................................................................ 84 NOTE 7: Changes in Long-term Liabilities .................................................................................. 86 NOTE 8: Long Term Debt .......................................................................................................... 87 NOTE 9: Risk Management ........................................................................................................ 91 NOTE 10: Joint Agreement/Joint Ventures ................................................................................. 93 NOTE 11: Related Parties/Organizations ..................................................................................... 96 NOTE 12: Jointly Governed Organizations ................................................................................ 99 NOTE 13: Employee Retirement Systems and Pension Plans ...................................................... 101 NOTE 14: Defined Benefit Other Postemployement Benefit (OPEB) Plans ................................. 118 NOTE 15: Contingencies and Litigation ..................................................................................... 125 NOTE 16: Subsequent Events .................................................................................................... 126 NOTE 17: Prior Period Adjustment ........................................................................................... 127 NOTE 18: COVID-19 Pandemic ................................................................................................. 129 Required Supplementary Information .............................................................................................. 130 Schedule of Changes in Net OPEB Liability and Related Ratios – Firemen’s OPEB Plan .................. 131 Schedule of Investment Returns – Fireman’s OPEB Plan ................................................................ 132 Schedule of City Contributions – LEOFF 1 OPEB ........................................................................... 133 Schedule of Changes in Net OPEB Liability and Related Ratios – LEOFF 1 OPEB ........................... 134 Schedule of Changes in net Pension Liability and Related Ratios – Fire Pension Plan ..................... 135 Schedule of Employer Contributions – Fire Pension Plan ............................................................... 135 Schedule of Investment Returns – Fire Pension Plan ...................................................................... 135 Schedule of Proportionate Share of the Net Pension Liability – All State Plans ............................... 136 Schedule of Employer Contributions – All State Plans .................................................................... 137 Combining and Individual Fund Statements ..................................................................................... 138 Nonmajor Governmental Funds ................................................................................................... 140 Combining Balance Sheet – Nonmajor Other Governmental Funds ........................................... 141 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 4 Combining Statement of Revenues, Expenditures and Changes in Fund Balance – Nonmajor Other Governmental Funds ................................................................................................................ 142 Combining Balance Sheet – Nonmajor Special Revenue Funds .................................................. 144 Combining Statement of Revenues, Expenditures and Changes in Fund Balance – Nonmajor Special Revenue Funds .............................................................................................................. 150 Combining Balance Sheet – Nonmajor Deb Service Funds ......................................................... 155 Combining Statement of Revenues, Expenditures and Changes in Fund Balance – Nonmajor Debt Service Funds ............................................................................................................................ 156 Combining Balance Sheet – Nonmajor Permanent Funds .......................................................... 157 Combining Statement of Revenues, Expenditures and Changes in Fund Balance – Nonmajor Permanent Funds ...................................................................................................................... 158 Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget to Actual – Major Construction Fund .................................................................................................................... 159 Schedule of Revenues and Expenditures – Budget to Actual – Nonmajor Other Governmental Funds ........................................................................................................................................ 160 Nonmajor Proprietary Funds ........................................................................................................ 162 Combining Statement of Net Position – Nonmajor Internal Service Funds ................................. 163 Combining Statement of Revenues, Expenditures and Changes in Net Position – Nonmajor Internal Service Funds ............................................................................................................... 165 Combining Statement of Cash Flows – Nonmajor Internal Service Funds ................................... 167 Trust and Custodial Funds ............................................................................................................ 170 Combining Statement of Net Position – Fiduciary Funds ........................................................... 171 Combining Statement of Changes to Net Position – Fiduciary Funds ......................................... 172 Combining Statement of Assets and Liabilities – Custodial Funds ............................................... 173 Combining Statement of Changes to Net Position – Custodial Funds ......................................... 174 STATISTICAL SECTION ....................................................................................................... 176 Financial Trends ............................................................................................................................... 178 Net Position by Component ......................................................................................................... 179 Changes in Net Position ............................................................................................................... 181 Governmental Activities Tax Revenues by Source ......................................................................... 186 Fund Balances of Governmental Funds ......................................................................................... 187 Changes in Fund Balances of Governmental Funds ....................................................................... 189 Revenue Capacity ............................................................................................................................ 190 Assessed Value of Taxable Property .............................................................................................. 191 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 5 B&O Taxes by Type ..................................................................................................................... 192 Property Tax Rates ....................................................................................................................... 193 Taxable Retail Sales ...................................................................................................................... 194 Principal Property Taxpayers ........................................................................................................ 195 Principal B&O Taxpayers .............................................................................................................. 198 Top Ten Industries That General Sales Tax .................................................................................... 199 Property Tax Levies and Collections ............................................................................................. 201 Debt Capacity ................................................................................................................................. 202 Ratios of Outstanding Debt by Type/Ration of General Bond Debt Outstanding ......................... 203 Rations of General Bond Debt Outstanding and Bonded per Capita ............................................ 204 Legal Debt Margin ....................................................................................................................... 205 Direct and Overlapping Governmental Activities Debt ................................................................. 206 Waterworks Utility Debt Service Coverage .................................................................................. 207 Demographic and Economic Information ......................................................................................... 210 Demographic and Economic Statistics ........................................................................................... 211 Principal Employers ...................................................................................................................... 213 Non-Agriculture Wage and Salary Workers ................................................................................... 214 Building Permits ........................................................................................................................... 215 Operating Information ..................................................................................................................... 216 Full Time Equivalent City Government Employees by Function .................................................... 217 Operating Indicators by Function ................................................................................................. 218 Building Permits ........................................................................................................................... 219 Capital Used by Function ............................................................................................................ 220 Waterworks Utility Customers ...................................................................................................... 221 Waterworks Utility Rates ............................................................................................................. 223 STATE REQUIRED SCHEDULES .......................................................................................... 226 SCHEDULE 9 – Schedule of Long-Term Liabilities ............................................................................ 227 SCHEDULE 15 – Schedule of State Financial Assistance ..................................................................... 228 SCHEDULE 16 – Schedule of Expenditures of Federal Awards .......................................................... 229 Notes to Schedule of Expenditures of Federal Awards .................................................................. 231 SCHEDULE 17 – Limitation on Public Works Projects Performed by Employees ............................... 232 SCHEDULE 19 – Labor Relations Consultants ................................................................................... 234 SCHEDULE 21 – Local Government Risk Assumption ....................................................................... 235 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 6 SUN WILLOWS GOLF COURSE VOLUNTEER PARK City of Pasco, Washington 2020 Comprehensive Annual Financial Report 7 This page intentionally left blank. City of Pasco, Washington 2020 Comprehensive Annual Financial Report 8 INTRODUCTORY SECTION City of Pasco, Washington 2020 Comprehensive Annual Financial Report 9 LETTER OF TRANSMITTAL June 22, 2021 Honorable Mayor, Members of the City Council, Pasco Community Members and interested parties, We are pleased to submit the Comprehensive Annual Financial Report of the City of Pasco for the year ending December 31, 2020. State statute and debt covenants require the City to issue an audited Comprehensive Annual Financial Report 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, 2019 consisted of one material misstatement where City erred in calculation of major fund and hence misclassified two funds as minor fund instead of a major fund. The misclassification did not result in over or under statement of expenses, but simply categorization in a manner different than prescribed as per GASB 34. City has implemented an annual report software to prepare future financial reports and forgo its long reliance on complicate spreadsheets prone to errors. 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. Except for the misclassification of funds, the independent auditor concluded, based upon the audit, that there was a reasonable basis for rendering an City of Pasco, Washington 2020 Comprehensive Annual Financial Report 10 unqualified opinion that the City’s financial statements for the fiscal year ending December 31, 2019 are fairly presented in conformity with GAAP. In addition to the independent financial statement audit for the year ending December 31, 2019, 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 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 77,100 in 2020. 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 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 11 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. 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. LOCAL ECONOMY The Tri-Cities is the fastest growing community in the state of Washington. The current population estimate over 302,000, making it the 3rd largest in Washington State. Franklin County accounts for 96,760 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. 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. Franklin County placed 48th in the United States on the value of agricultural product. 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 wash water 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, City of Pasco, Washington 2020 Comprehensive Annual Financial Report 12 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. The City is currently planning to expand capacity for current and new processors. Furthermore, in 2020, Port of Pasco announced plans for a new 300-acre property to attract heavy industrial development to attract more food processors and new industry targets. Phase 1 of the construction is scheduled to start on spring of 2021. 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 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 13 completed in early 2020. While COVID-19 pandemic has impacted tourism significantly, area is seeing signs of tourism industry going back to normal by end of 2022. 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. 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 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. This extensive and diversified transportation network has attracted industrial processors and distribution centers to the area. 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 2020 growth rate of 2.2%. Pasco continues to attract a young, energetic and diverse workforce. At 30.4, the median age is 7.3 years 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 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 14 strong support for public amenities including public markets, cultural facilities, and an accessible network of paths for walking and biking. In 2020, the Pasco economy suffered the impacts of the global pandemic. However, stable economy and well-paying local jobs have helped the area weather the crisis. The City issued 2,930 building permits, an increase of over 6.4% the previous year. This represents approximately $285 million in construction value. Of the total permits, 585 were for new single-family residences, which equates to $135 million in construction value. The average value of a new home in Pasco was approximately $320,000 in 2020, an increase of 18% over the prior year. 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 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 $132,000,000 investment in construction for commercial and industrial purposes, an increase of $34,000,000. Voters have continually approved school bonds to expand the areas to school system to accommodate growth. 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 had accounted for $52,000,000 in commercial permits in 2019, whereas there were no permits issued for schools in 2020. Future schools are anticipated to be built in near future. 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 2020, the college was the third largest employer in Franklin County with over 765 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. COVID-19 pandemic has impacted the tourism and convention industry; however, all indicators show a quick recovery to normal by end of 2021. 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 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 15 services to the area in the summer of 2019 and has completed 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/pedestrian trails, transit and boulevards focused on connectivity and walkability. Major retailers like Costco are expected to be serving the residents of Pasco and its neighboring areas. This is expected to spur 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. 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 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 16 CITY OF PASCO ORGANIZATIONAL CHART CITIZENS CITY COUNCIL CITY MANAGER MUNICIPAL COURT JUDGE Municipal Court Probation Services Court Services HUMAN RESOURCES Employment Benefits/ Compensation Labor Relations POLICE CHIEF Investigation Field Operations Support Operations FIRE CHIEF Fire Supression Ambulance COMMUNITY & ECONOMIC DEVELOPMENT DIRECTOR Block Grants Economic Development Inspections/Code Enforcement Services Planning Development Services PUBLIC WORKS DIRECTOR Engineering Street Maintenance Utilities Equipment Rental & Replacement ADMINISTRATIVE & COMMUNITY SERVICES DIRECTOR Indigent Defense & Prosecution Recreation Facilities City Clerk Information Services FINANCE DIRECTOR Accounting Customer Service DEPUTY CITY MANAGER Communications City of Pasco, Washington 2020 Comprehensive Annual Financial Report 17 DIRECTORY OF CITY OFFICIALS AND LEADERSHIP TEAM City of Pasco, Washington 2020 Comprehensive Annual Financial Report 18 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 19 This page intentionally left blank. City of Pasco, Washington 2020 Comprehensive Annual Financial Report 20 FINANCIAL SECTION City of Pasco, Washington 2020 Comprehensive Annual Financial Report 21 This page intentionally left blank. City of Pasco, Washington 2020 Comprehensive Annual Financial Report 22 INDEPENDENT AUDITOR’S REPORT City of Pasco, Washington 2020 Comprehensive Annual Financial Report 23 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 24 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 25 This page intentionally left blank. City of Pasco, Washington 2020 Comprehensive Annual Financial Report 26 MANAGEMENT’S 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, 2020. 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. Financial Highlights • The assets and deferred outflows of the City of Pasco exceeded liabilities and deferred inflows, or net position, at the close of December 31, 2020 by $545,129,459. Of this amount, $36,205,583 may be used to meet the government’s ongoing obligations to the citizens and creditors. While not formally restricted, City has assigned $1,230,430 of the unrestricted fund to future Community Center project. • The City of Pasco’s total net position improved by $42,768,903. Approximately 67% of the increase in net position is due to increases in governmental-type activities and 33% 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 well as significant capital projects in progress for governmental and business type activities. • Expenses were $19,588,437 greater than the program revenues generated for governmental activities. Program revenues exceeded expenses by $11,363,497 for business- type activities. • As of the close of the current fiscal year, the City of Pasco’s governmental funds reported combined ending fund balances of $76,931,960. This represents an increase of $6,002,800 in comparison with the prior year. • At the end of the current fiscal year, the unrestricted, unassigned fund balance for the City’s General Fund was $25,873,815, which also represents 51% of total General Fund expenditures. This is an increase of $5,611,190 over prior year, attributable to allocation of CARES Act grants, minimal economic impact due to COVID-19 pandemic, and modest increase in expenses due to deferment of activities during the pandemic. Committed fund balance reported in City’s General Fund was $494,541, which consisted of landfill claims and surplus revenue from City’s electronic traffic safety cameras (RedFlex). City also sold its Senior Center in 2016, proceeds of which are assigned to construction of future Community/Senior Center. Finally, restricted fund balance in the general fund was $11,153,347, largely due to unspent debt proceeds from City’s 2019 LTGO funds to relocate two fire stations, build a new animal shelter, and upgrade GESA Stadium. The funds are expected to be fully expended by end of 2023. City of Pasco, Washington 2020 Comprehensive Annual Financial Report 27 • The City of Pasco’s total net capital assets increased by $37,507,394 during the year ended December 31, 2020. Majority of the increase can be attributed to investment made in the City’s infrastructure including parks, facilities, streets, and utility infrastructure. 61% of the increase in net capital assets are contributable to governmental activities. • At the end of the December 31, 2020, City’s outstanding debt increased by $14,672,742. Within the governmental activities, total outstanding debt decreased by $1,481,850, which reflects principal of $1,330,000 and related annual recognition of premium amortization of $151,850 on debt obligations. Within business-type activities, total debt increased by $13,071,274. Debt increased by the addition of new bond proceeds of $16,415,000, plus a premium tied to the issuance of $1,063,759, the refunding debt to replace two outstanding bond issues of $7,135,000 and the initial draw against a Public Works Board loan of $107,221. Outstanding debt decreased with the removal of the face value of the two refunded bonds totaling, $8,565,000, annual principal payments totaling $2,938,412 and the year’s value of amortization related to bonds outstanding of $146,295. 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. 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. City of Pasco, Washington 2020 Comprehensive Annual Financial Report 28 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 2020, the General Fund, Ambulance Fund, and the Construction Fund were the only major governmental funds. LID Fund was categorized as major governmental fund for 2019 due to construction of Chapel Hill Boulevard funded by LID bond. The fund is not eligible to be categorized as a major fund in 2020. 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. 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 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 29 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. 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. 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. Government-wide Overall Financial Analysis As noted earlier, net position may serve over time as a useful indicator of a government’s financial position. The net position for governmental and business-type activities is $545,129,459 at the close of the fiscal year after applying prior period adjustments. Adjustments for prior period activity, relating to the government wide statement of net position presentation resulted in an additional $4,176,580 decrease. A discussion of these adjustments can be found under the heading Note 17: Prior Period Adjustments. The largest portion of the City of Pasco’s net position $430,038,793 (79%) reflects its investment in capital assets (e.g., buildings, machinery, equipment, infrastructure, construction in progress) less any related outstanding debt used to acquire those assets. The City of Pasco uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City of Pasco’s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other resources, since the capital assets themselves cannot be used to liquidate these liabilities. $78,885,083 (14.5%) of the City’s net position represents resources that are subject to external restrictions on how they may be used. The remaining $36,205,583 (6.5%) of unrestricted net position may be used to meet the government’s ongoing obligations to citizens and creditors. Governmental unrestricted fund has increased by $21,277,068 and is largely contributed to healthy increase in fund balances across governmental funds, including General and Ambulance Fund. Furthermore, payoff of inter-fund loan for Local Improvement District 150 (LID 150) contributed increase in unrestricted net position in 2020. Business-type net position decreased by City of Pasco, Washington 2020 Comprehensive Annual Financial Report 30 $11,348,320. Historically capital revenue was accounted for as restricted asset but was not presented as restricted net position. 2020 therefore presents net position in accordance with accounting standard. 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. However, Pasco Public Facility District, component unit, reported a negative net position of $29,680 due to ongoing activity around feasibility study to build an aquatic facility. A ballot measure to be presented to voters to consider additional sales tax to build and operate the facility is expected in 2021. Mitigations will be implemented to address fund balance shortfall in correspondence with the success or failure of the ballot measure. As mentioned in the financial highlights, the City’s net position increased by $42,768,903, during the current fiscal year. Much 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 significant projects in progress throughout City’s different funds. City has been reserving its fund balance for significant capital projects in transportation, parks, and utilities. 2020 2019 2020 2019 2020 2019 NonCapital assets 116,565,630 110,951,621 55,307,673 43,900,348 171,873,303 154,851,969 Capital assets 280,610,030 258,326,542 216,992,364 201,768,458 497,602,394 460,095,000 Total assets 397,175,660 369,278,163 272,300,037 245,668,806 669,475,697 614,946,969 Total of deferred outflows of resources 2,739,580 2,771,603 414,408 467,590 3,153,988 3,239,193 Current liabilities 10,057,773 8,932,827 6,695,964 6,151,149 16,753,737 15,083,976 Noncurrent liabilities 44,212,096 46,137,578 58,738,596 46,287,434 102,950,692 92,425,012 Total liabilities 54,269,869 55,070,405 65,434,560 52,438,583 119,704,429 107,508,988 Total deferred inflows of resources 7,420,670 7,439,022 375,127 877,596 7,795,797 8,316,618 Net position: Net investment in capital assets 262,403,197 247,553,877 167,635,596 160,514,038 430,038,793 408,067,915 Restricted 53,973,154 61,415,180 24,911,929 6,600,716 78,885,083 68,015,896 Unrestricted 21,848,350 571,282 14,357,233 25,705,463 36,205,583 26,276,745 Total net position 338,224,701 309,540,339 206,904,758 192,820,217 545,129,459 502,360,556 Governmental Activities Business-Type Activities Total Primary Government City of Pasco's Net Position City of Pasco, Washington 2020 Comprehensive Annual Financial Report 31 Governmental Activities. Governmental activities increased the City of Pasco’s net position by $28,684,365 after prior period adjustments. Key elements of the current year’s increase in net position and changes relative to the prior year follow. • Program revenues increased by approximately $24,000,000, largely contributable to capital grants and contributions in the transportation area received from developers in the form of donated infrastructure. Other increases are attributable Operating grants and contributions also saw an increase largely due to increase in pension asset and increase COVID-19 assistance grants from the Federal and State government. Charges for services decreased by $7,250,000, however, this is due to one-time activity of Local Improvement District (LID) related revenue in 2019 and should have been classified as a general revenue rather than charge for service. Charges for services were also impacted by reduction in revenue from recreational activities due to COVID-19 pandemic. • Tax revenues are the largest source of revenue within the governmental activities for the City have been increasing at a steady pace, reflecting a healthy and growing economy. 2020 2019 2020 2019 2020 2019 Revenues Program revenues: Charges for services 29,810,827 37,064,470 32,858,079 29,672,471 62,668,906 66,736,941 Operating grants & contributions 11,221,281 1,470,380 282,000 7,852 11,503,281 1,478,232 Capital grants & contributions 29,526,743 7,977,167 6,809,743 4,107,571 36,336,486 12,084,738 General revenues: Property taxes 11,066,380 10,697,869 11,066,380 10,697,869 Other taxes 32,659,299 34,208,598 32,659,299 34,208,598 Investment income and miscellaneous 7,975,208 4,569,689 312,239 643,068 8,287,447 5,212,757 Total revenues 122,259,738 95,988,173 40,262,061 34,430,962 162,521,799 130,419,135 Program expenses: General government 12,456,759 9,039,463 12,456,759 9,039,463 Public safety 40,014,643 31,003,077 40,014,643 31,003,077 Transportation 20,092,531 11,770,120 20,092,531 11,770,120 Economic environment 8,522,809 7,807,430 8,522,809 7,807,430 Culture and recreation 7,950,814 5,953,440 7,950,814 5,953,440 Interest on long term debt 1,109,732 526,169 1,109,732 526,169 Water 11,278,305 14,340,208 11,278,305 14,340,208 Irrigation 1,953,508 1,811,366 1,953,508 1,811,366 Sewer 8,945,634 (136,696) 8,945,634 (136,696) Process water reuse 5,053,060 3,221,517 5,053,060 3,221,517 Storm water 1,355,818 1,358,525 1,355,818 1,358,525 Total expenses 90,147,288 66,099,699 28,586,325 20,594,920 118,733,613 86,694,619 32,112,450 29,888,474 11,675,736 13,836,042 43,788,186 43,724,516 Transfers (1,233,333) 540,462 1,233,333 (540,462) - - Special Item: Gain on sale of asset 508,391 1,290,215 (11,722) 85,000 496,669 1,375,215 Change in net position 31,387,508 31,719,151 12,897,347 13,380,580 44,284,855 45,099,731 Prior period adjustment (2,703,146) 1,513,067 1,187,194 (47,195) (1,515,952) 1,465,872 Total change in net position 28,684,362 33,232,218 14,084,541 13,333,385 42,768,903 46,565,603 *See Note 5- and explanation of changes in useful lives. City of Pasco's Change in Net Position Increase in net position before transfers Business-Type Activities Total Primary GovernmentGovernmental Activities City of Pasco, Washington 2020 Comprehensive Annual Financial Report 32 • Property tax revenue increased by 3.4% in 2020, or by approximately $369,000. This increase was largely attributable to growth in new construction. City banked its statutorily authorized increase in property tax rate in 2020. • Sales tax revenue increased by 6.2% in 2020, or approximately $1,099,000. There is no one factor to account for this increase, but strong local economy even throughout the pandemic, growth in economic development within the City, and strong growth in construction. Marketplace Fairness Act requires out-of-state businesses without a physical presence in Washington State, but who make sales to Washington consumers, to follow tax collection laws of Washington State. It is not possible to quantify the impact of this law yet, but we believe that increase in sales tax was also benefitted by passing of this law and increase in online sales during the pandemic. • Utility taxes (B&O Taxes) decreased by 4.4%, mainly due to decrease in electric utility revenue. Area experienced severe winter conditions during winter of 2019, whereas, by comparison, winter of 2020 was mild. The decrease could be attributed to this change in weather patterns. Franklin Public Utility District provides electric services to all Pasco residents. • Excise tax revenue, which includes Real Estate Excise Tax (REET), admissions, leasehold, and gambling tax, reduced by 44.3%, which equates to $2,138,000. This significant decrease is directly due to COVID-19 pandemic. Closure of venues like casinos and movie theaters, as well as impacts to real estate transactions during the second and third quarter of the year impacted the revenue source significantly. Furthermore, 2019 saw a significant increase in REET revenue and the trend was expected to go down in 2020. On a full accrual basis, expenses within the governmental activities increased by 36% or approximately $24,000,000. However, excluding capital outlay, pension, and depreciation expense, expenses increased by approximately $2,600,000, an increase of 4%. Significant increases were in the areas of Public Safety based on changes to pension liability, also Transportation where an accounting estimate change put in place in 2019 resulted in decrease of depreciation expenses for the year. Transportation expenses for year ending December 31, 2020 reflects standard depreciation schedule after the implementation of the 2019 accounting estimate change. Following charts illustrate different component of the City’s revenue from governmental activities. As illustrated in graph, City’s largest source of revenue is taxes, making up approximately 36% of the total revenue. Charges for services are another reliable revenue source for the City, accounting for 24% of the total revenue received by the City to support governmental activities. Capital and operating grants and contributions made up over 33% of the revenue. However, it is important to note that this revenue source is impacted by construction trends, as the chart for 2019 illustrates. City of Pasco, Washington 2020 Comprehensive Annual Financial Report 33 GOVERNMENTAL ACTIVITIES – REVENUES BY SOURCE GOVERNMENTAL ACTIVITIES – EXPENSES AND PROGRAM REVENUES Charges for services 24% Operating grants & contributions 9% Capital grants & contributions 24% Property taxes 9% Other taxes27% Investment income and miscellaneous 3% Investment income and miscellaneous 7% Sources of Revenues 2020 Charges for services 38% Operating grants & contributions 2% Capital grants & contributions 8% Property taxes 11 % Other taxes 35% Gain on sale of asset 1% Sources of Revenues 2019 - 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 30,000,000 35,000,000 40,000,000 45,000,000 2020 Expenses 2020 Revenue 2019 Expense 2019 Revenue City of Pasco, Washington 2020 Comprehensive Annual Financial Report 34 Business-Type Activities. 33% of the increase in the City of Pasco’s net position is related to business-type activities. In 2020, the business type activities made up 38% of the City’s net position. The net position for business-type activities has increased by $14,084,0541. This value represents an improvement to net position in 2020 of 7%. Asset value increased 10% primarily related to investment in capital investment. Liabilities increased 24%. This increase reflects the issuance of new bond debt that was incurred to support investment in the City’s process water reuse facility. The City increased rates for Water (3%) and Sewer (4%) in 2020. Investment in aging infrastructure, coupled with investment in new facilities to support anticipated growth has occurred over the past couple of years. This effort continued in 2020 and is reflected in City’s 2020-2025 Capital Improvement Plan. Improvements. Funding for the necessary capital improvements will be provided by a combination of grants, accumulated unrestricted fund balance, low interest loans, and revenue bonds. 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. - 2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 14,000,000 16,000,000 Water Sewer Process Water Reuse Stormwater Irrigation 2020 Expenses 2020 Revenue 2019 Expense 2019 Revenue City of Pasco, Washington 2020 Comprehensive Annual Financial Report 35 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. For the period ended on December 31, 2020, the City of Pasco governmental funds reported combined ending fund balances of $76,931,960, which is an increase of $6,002,530, or 8.5% from the prior year. Approximately 34% of this total amount, $25,315,988 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 2020, unassigned fund balance of the General Fund was $25,873,815. As a measure of the General Fund’s liquidity, it may be useful to compare unrestricted, unassigned fund balance to total expenditures. This represents 52.0% of total expenditures. The overall fund balance of the City of Pasco’s General Fund decreased during 2020 by $2,499,346. This total includes unspent bond proceeds of $9,959,062. Strong sales tax other growth-related revenues, as well as infusion of federal government gaming taxes improved the funds financial standing. Overall revenues increased by $2,651,121 (4.8%) and total expenditures increased by $2,543,791(5.3%). General Fund tax revenues decreased by $33,242 (0.1%), mainly due to reduction in utility taxes (weather factor) and significant reduction in gaming and admissions taxes (COVID-19 pandemic). Property taxes increased approximately $368,511 (3.4%) due to new construction and steady valuations. It is important to note that property sales tax increased by 28.1% in the last reporting period, due to Council utilizing banked capacity for property taxes. Sales taxes increased by $1,099,423 (6.2%) with the continued steady economic activity despite the pandemic. The growth in sales tax revenue in the last reporting period was 6.3%. The City added an Application Specialist, and a Deputy Court Clerk to the General Fund position during the 2021-2022 biennial budget adoption. The General Fund revenues of $58,400,297 exceeded expenditures of $50,124,151, or by $8,276,146 before transfers in/out. Transfers in/out net outflow was $11,075,916, mainly related to construction of two new fire stations. 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 2020 was $9,491,278. 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 2020, the utility is well positioned as it has current assets of $46,355,743 available to meet its current liability obligations of $6,688,551, resulting in a working capital ratio of 6.93. The increase in current assets is impacted by unspent bond proceeds and fees collected for new service areas. The total value of these funds is anticipated to be used in 2021 to support capital improvements. Exclusive of capital related activity, current assets City of Pasco, Washington 2020 Comprehensive Annual Financial Report 36 increased by the virtue of an improved cash balance and a small increase in accounts receivable at year end. Current liabilities increased slightly as compared to year end 2019. Primarily, this increase was a reflection of an increase to the coming year’s debt service tied to the new bond issuance. The utility showed a gain before contributions and transfers of $3,770,777 a decrease of a $5,601,095 over the prior year. While charges for services increased in 2020, the growth in utility expenses was greater. This increase, however, was largely the reflection of accounting estimate changes that occurred in 2019. Therefore, the comparison of the two years is not representative of operational, ongoing costs. Instead, the 2019 value for depreciation was significantly small and represented a one-time change. For remaining operational expenses, labor costs were nearly flat, supplies increased by 30% ($491,308) and service expenses by 27% (2,909,947). Included in the reported labor cost are the impact of changes in compensated absence and pension liabilities. The offset to the rise or fall of the liabilities as of each year end is labor expense for the given year. With the accrual impact removed, labor cost of the utility increased 3.9%. Supplies expense increased primarily as a reflection of more maintenance effort and the purchase of water rights. Finally, the increase is service expense is tied to consultant agreements for various plans and studies, a 10% increase in utility taxes that rises with the growth of revenues recognized, and a large contract that provides for the clearing of sediment from the Process Water Reuse Facility storage pond. Capital contributions to the fund for year 2020 amounted to $6,809,743. These contributions are tied to service area growth for the utilities and, as such, must be spent on capital expansion. As mentioned before, the City continues to invest in new infrastructure to support the growth of its population and address aging infrastructure issues. 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 remained within budget, which was its first biennial budget. Unprecedented uncertainty brought upon by COVID- 19 pandemic resulted in underestimation of revenues, while authorized expenses were delayed until full impact of the pandemic to revenue were known. Furthermore, City’s capital purchases and projects were delayed due to various factors like Washington State’s Stay Home Stay Healthy orders, unavailability of raw materials, or slowdown due to COVID-19 safety protocol in place. 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, 2020 amounts to $497,602,394 (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 $22,283,488 for governmental activities and an increase of $15,223,906 for business-type activities. City of Pasco, Washington 2020 Comprehensive Annual Financial Report 37 Major capital asset activity during the current fiscal year included the following: • Capital spending in governmental funds for 2020 was $11,522,609: $518,246 for general governmental purposes, $8,892,661 for public safety purposes, $801,554 for transportation purposes, $306,494 for Economic development and $1,003,655 for culture and recreation purposes. The largest projects for 2020 were Fire Station 83 replacement $5,110,789 and Fire Station 84 replacement $3,403,355. • Capital spending in the utility fund (major component of business-activities) for 2020 was $15,005,805. The largest projects were PWRF Irrigation Pump Station improvements at $8,315,133, WWTP project 1 at $2,242,138 and Pearl Street Lift station at $1,177,788. Additional information on the City of Pasco’s capital assets can be found in Note 5. Long-term Debt. At the end of 2020, the City of Pasco had total outstanding debt of $89,909,652 million. Of this amount, $24,795,000 million comprised of debt backed by the full faith and credit of the government. The business type debt total of $60,926,410 is primarily composed of $54,041,892 million of bonds secured primarily by specified revenue resources (e.g., revenue bonds). The remaining business type debt is composed of low interest loans, namely from two State of Washington sponsored programs: the Public Works Board Loan and the Department of Health, and a Hanford Area Economic Investment Fund (HAEIF) loan. In 2020, the City issued a Revenue bond of $16,415,000 million for Reuse Facility. Additional information on the City of Pasco’s long-term liabilities can be found in Note 7. 2020 2019 2020 2019 2020 2019 Land 23,877,045 19,473,173 3,882,418 3,149,049 27,759,463 22,622,222 Construction in process 20,525,366 17,651,905 18,494,884 10,452,939 39,020,250 28,104,844 Buildings and structures 34,574,138 33,708,388 45,619,874 46,634,972 80,194,012 80,343,360 Other improvements 3,561,348 3,830,838 496,028 441,411 4,057,376 4,272,249 Machinery and equipment 8,869,436 8,708,297 9,540,645 9,655,181 18,410,081 18,363,478 Infrastructure 189,202,697 174,953,941 138,958,515 131,434,906 328,161,212 306,388,847 Total capital assets 280,610,030 258,326,542 216,992,364 201,768,458 497,602,394 460,095,000 Governmental Activities Total Primary GovernmentBusiness-Type Activities City of Pasco's Capital Assets at Year-End (in millions) (Net of Depreciation) 2020 2019 2020 2019 2020 2019 General Obligation Bonds 28,983,242 30,465,093 - - 28,983,242 30,465,093 Special Assessment Bonds - - - - - - Loans & Notes - - 6,884,518 7,415,706 6,884,518 7,415,706 Revenue Bonds - - 54,041,892 40,439,430 54,041,892 40,439,430 28,983,242 30,465,093 60,926,410 47,855,136 89,909,652 78,320,229 Governmental Activities Total Primary GovernmentBusiness-Type Activities City of Pasco's Bonds and Notes (in millions) City of Pasco, Washington 2020 Comprehensive Annual Financial Report 38 Economic Factors and Next Year’s Budgets and Rates In 2020, the Pasco economy was stable and continued to grow. The City issued 2,930 building permits, an increase of 6.4% from the previous year. This represents approximately $284,638,000 in construction value. Of the total permits, 539 were for new single-family residences, which equates to $135,000,000 in construction value. The average value of a new home in Pasco was approximately $320,000 in 2020, an increase of 18% over the prior year. 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 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 $132,000,000 investment in construction for commercial and industrial purposes, an increase of $34,000,000. Voters have continually approved school bonds to expand the areas to school system to accommodate growth. 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 had accounted for $52,000,000 in commercial permits in 2019, whereas there were no permits issued for schools in 2020. Future schools are anticipated to be built in near future. 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 and has 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 760 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. COVID-19 pandemic has impacted the tourism and convention industry; however, all indications show a quick recovery to normal by end of 2021. 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 has completed the environmental review process for the master planned development of a two-thousand-acre area encompassing what is known City of Pasco, Washington 2020 Comprehensive Annual Financial Report 39 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/pedestrian trails, transit and boulevards focused on connectivity and walkability. Major retailers like Costco are expected to be serving the residents of Pasco and its neighboring areas. This is expected to spur significant economic development activity in this area in the near future. City’s business-type activities will be impacted significantly by providing utility services to the residential, commercial, and industrial growth. Large capital projects to repair, maintain, expand, and build new facilities are planned, including but not limited to the improvement of City’s Wastewater Treatment Plant, Water Treatment Plan, Process Water Reuse Facility (industrial wastewater), as well as new water reservoirs. The City has utilized established rate models on a yearly basis to ensure appropriate revenues are generated to maintain services. New rate study to revamp the model is planned for 2021. Council has approved rate increases on all utility services since 2015, however due to hardships created by COVID-19 pandemic, recommended rate increases might not be feasible. A copy of City of Pasco’s most recent 2021-2022 Biennial Budget can be access on the City’s website at https://www.pasco-wa.gov/1104/2021-2022-Budget . 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. City of Pasco, Washington 2020 Comprehensive Annual Financial Report 40 BASIC FINANCIAL STATEMENTS City of Pasco, Washington 2020 Comprehensive Annual Financial Report 41 GOVERNMENT WIDE FINANCIAL STATEMENTS Statement of Net Position City of Pasco, Washington 2020 Comprehensive Annual Financial Report 42 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 43 Statement of Activities City of Pasco, Washington 2020 Comprehensive Annual Financial Report 44 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 45 FUND FINANCIAL STATEMENTS Balance Sheet – Governmental Funds City of Pasco, Washington 2020 Comprehensive Annual Financial Report 46 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 47 Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds City of Pasco, Washington 2020 Comprehensive Annual Financial Report 48 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 49 This page intentionally left blank. City of Pasco, Washington 2020 Comprehensive Annual Financial Report 50 Reconciliation of Statement of Revenues, Expenditures and Changes in Fund Balance of Governmental Funds to the Statement of Net Activities City of Pasco, Washington 2020 Comprehensive Annual Financial Report 51 Statement of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual – General Fund City of Pasco, Washington 2020 Comprehensive Annual Financial Report 52 Statement of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual – Ambulance Fund City of Pasco, Washington 2020 Comprehensive Annual Financial Report 53 Statement of Net Position – Proprietary Fund City of Pasco, Washington 2020 Comprehensive Annual Financial Report 54 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 55 Statement of Revenues, Expenses and Changes in Net Position – Proprietary Funds City of Pasco, Washington 2020 Comprehensive Annual Financial Report 56 Statement of Cash Flows – Proprietary Fund City of Pasco, Washington 2020 Comprehensive Annual Financial Report 57 Statement of Net Position – Fiduciary Funds Pension and Other Post-Employment Custodial Benefits Funds ASSETS Cash & cash equivalents 483,336$ 55,685$ Receivables Loan 8,469 - Taxes for other governments - 109,684 Investments Federal Agency 10,567 - Mutual Funds 6,496,887 - Total assets 6,999,259 165,369 LIABILITIES Accounts Payable - 163,727 Due to other governments - 89 Total liabilities - 163,816 NET POSITION RESTRICTED FOR: Pensions 3,367,117 - Postemployment benefits other than pensions 3,632,142 - Individuals, organizations and other governm - 1,642 TOTAL NET POSITION 6,999,259$ 1,642$ The notes to the financial statements are an integral part of this statement. Statement of Net Position Fiduciary Funds December 31, 2020 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 58 Statement of Changes in Fiduciary Net Position – Fiduciary Funds Pension and Other Post-Employment Benefits Custodial Funds ADDITIONS Taxes 89,252$ -$ Interest, dividends, and other 617,843 230 Sales tax collections for other governments - 635,125 Intergovernmental grants and other payments - 54,752 Total Additions 707,095 690,107 DEDUCTIONS Pension benefits 111,111 - Medical premiums 87,540 - Capital - 34,534 Services 6,848 701,873 Total deductions 205,499 736,407 Change in net position 501,596 (46,300) Net position - beginning 6,497,663 47,942 Net position - ending 6,999,259$ 1,642$ 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, 2020 Trust Funds City of Pasco, Washington 2020 Comprehensive Annual Financial Report 59 This page intentionally left blank. City of Pasco, Washington 2020 Comprehensive Annual Financial Report 60 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. City of Pasco, Washington 2020 Comprehensive Annual Financial Report 61 Taxes and other items not properly included among program revenues are reported instead as general revenues. As a general rule the effect of the inter-fund activity has been eliminated from the government–wide financial statements. Exceptions to this rule include business taxes the utility pays to the General Fund, activities in internal service funds in which outside parties are engaged and certain other service functions between funds, that if eliminated may misrepresent the cost 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: This 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 Federal assistance through the Ground Emergency Medical Transportation Payment program, service fees and ambulance utility rates. 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. These funds include the Local Improvement Districts (LID) Guarantee Fund which provides financial security for outstanding LID bonds. City of Pasco, Washington 2020 Comprehensive Annual Financial Report 62  Permanent Funds are used to report resources that are legally restricted to the extent that only earnings, not principal, may be used for purposes of supporting a specific City program. The City has one permanent fund, Cemetery Perpetual Care Fund.  Internal Service Funds are used to account for equipment replacement and operations, central stores, as well as medical/dental insurance services provided to other departments on a cost-reimbursement basis.  Pension Trust Funds are used to account for the sources and uses of funds to meet the pension benefit and other post-employment benefit obligations made to firemen covered under the Plan prior to the creation of the Law Enforcement Officers and Fire Fighters’ (LEOFF) pension system in 1970.  Custodial Funds are used to report resources held by the City in a purely custodial capacity on behalf of the Animal Control Authority and on behalf of 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 Statement 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. City of Pasco, Washington 2020 Comprehensive Annual Financial Report 63 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 wastewater processing. Operating expenses for enterprise funds and internal service funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses. 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 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 64 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 debt service fund of the City, ended the year with a negative fund balance of ($701,174). The negative fund balance is a result of required accounting practices. Previously most LID’s were financed with a bond issue which is not reflected on the balance sheet of the governmental fund. The current LID’s are financed with inter-fund loans which are recorded as a loan payable on the balance sheet. Since GASB requires future principal payments to be recorded as deferred inflows on the balance sheet. Both items are recorded on the liability side of the balance sheet with only the LID assessments receivable on the asset side. The result is almost always a negative net position for the fund. The deficit fund balance will be corrected as the loans are paid off. The Rivershore Trail & Marina Maintenance Fund, a nonmajor special revenue fund of the City, ended the year with a negative fund balance of ($48,278). The negative fund balance is a result of the need to rebuild a marina dock due to 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 ($47,980). The negative fund balance is a result of operation expenses exceeding 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, 2020, the City had invested $ 58,052,273 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. City of Pasco, Washington 2020 Comprehensive Annual Financial Report 65 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, 2020, $83,528 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 Ambulance Fund and Revolving Abatement Fund. An allowance is calculated based on historical write-offs. The total allowance recorded citywide as of December 31, 2020 is $179,929. 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 $11,086,230 of which $10,328,222 is not expected to be collected. Only the net receivable of $758,009 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 2020. 4. Amounts Due to and from Other Governments, Inter-fund 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 inter-fund 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 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 66 schedule of inter-fund loans receivable and payable is furnished in Note 6, Inter-fund 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 for construction and debt service, including current and delinquent special assessments receivable, in enterprise funds. The current portion of related liabilities is shown as Payables from Current 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: 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 $5,000 and an estimated useful life in excess of two years. Useful life estimates are periodically reassessed and adjusted based on actual experience and/or asset condition assessments. See Note 5, Capital Assets and CWIP for details on changes to useful life and Customer Deposits 469,184$ Unspent Bond Proceeds 11,534,736 Debt Service 372,997 Capital Development: Water/Sewer capital expansion contributions 7,957,104 Water Rights 1,201,742$ City of Pasco, Washington 2020 Comprehensive Annual Financial Report 67 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: 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 Assets Useful Lives (Years) Land N/A Building & Structures 5-50 Other Improvements 5-100 Machinery & equipment & vehicles 2-50 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 68 is reported only in the governmental funds balance sheet. The governmental funds report unavailable revenues for 2020 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 are 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. a. Citywide, 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. b. 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. City of Pasco, Washington 2020 Comprehensive Annual Financial Report 69 c. 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 or asset, 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 pension liability, deferred outflows of resources and deferred inflows of resources related to pension, and pension expense information about the fiduciary net position of the City's Old Firemen’s Pension Fund — 610 (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. For purposes of measuring the total 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's LEOFF 1 Retiree Health Benefits 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. 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's Old Firemen’s Pension Fund (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. City of Pasco, Washington 2020 Comprehensive Annual Financial Report 70 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. Bond premiums and discounts 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 decision-making authority for the government that can, by adoption of an ordinance prior to the end of the fiscal year, commit fund balance. Once adopted, the limitation imposed by the ordinance remains in place until a similar action is taken (the adoption of another ordinance) to remove or revise the limitation. Amounts in the assigned fund balance classification are intended to be used by the government for specific purposes but do not meet the criteria to be classified as committed. The council may also assign fund balance as it does when appropriating fund balance to cover a gap between estimated revenue and appropriations in the subsequent year’s appropriated budget. Unlike commitments, assignments generally only exist temporarily. In other words, an additional action does not normally have to be taken for the removal of an assignment. Conversely, as discussed above, an additional action is essential to either remove or revise a commitment. The City has not adopted a specific flow of funds policy relating to the use of restricted and unrestricted resources when both are available. Therefore, the statements are prepared using the default option provided in GASB 54 which provides that when both City of Pasco, Washington 2020 Comprehensive Annual Financial Report 71 restricted and unrestricted resources are available, restricted resources are used first. While the City has not formally established a policy for its use of unrestricted fund balance amounts, committed amounts would be reduced first, followed by assigned amounts, and then unassigned amounts when expenditures are incurred for purposes for which amounts in any of these unrestricted fund balance classifications could be used. In the fund financial statements, governmental funds report restrictions of fund balance as follows: Non-spendable Fund Balance includes amounts that are not in spendable form such as inventory or are required to be maintained intact such as the principal of a permanent fund. Restricted Fund Balance includes amounts that can be spent only for the specific purpose stipulated by external resource providers such as for grant providers, bondholders, higher levels of government, or through enabling legislation. 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 the residual classification for the General Fund and includes all spendable amounts not contained in the other classifications. The General Fund is the only governmental fund that reports a positive unassigned fund balance amount. In other funds, the unassigned classification will be used only to report a deficit balance resulting from overspending for specific purposes for which amounts had been restricted, committed, or assigned. City of Pasco, Washington 2020 Comprehensive Annual Financial Report 72 NOTE 2: RECONCILIATION OF GOVERNMENTWIDE 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: 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 charges. Joint Venture 1,347,726$ Land 19,473,173 Construction in process 17,651,905 Building 33,708,388 Other Improvements 3,830,838 Equipment 3,677,069 Infrastructure 174,953,941 Pension Assets 14,520,434 OPEB Assets 2,270,659 Prior period adjustment - capital asset reduction (1,473,434) Current year change in pension asset (1,534,675) Current year change in OPEB asset 224,039 Current year spending in construction work in progress 11,522,611 Current year sale of capital assets (468,130) Current year capital donations received 29,252,567 Current year increase in Joint Venture 93,137 Current year depreciation (16,876,502) Net adjustment to add to government wide fund balance to arrive at Net Position Governmental Activities 292,173,746$ Beginning Balance of Capital Asset Excluded from Fund Level: City of Pasco, Washington 2020 Comprehensive Annual Financial Report 73 Compensated absences (3,529,311)$ OPEB (12,231,327) Pension (3,420,483) Bonds payable (26,125,000) Bond Premium (4,340,093) Current year changes to compensated absences liabilities (552,750) Current year changes to pension liabilities 332,043 Current year changes to OPEB liabilities (738,121) Current year premium reduction 151,851 Current year principal payments reducing debt 1,330,000 Net adjustment to reduce government wide fund balance to arrive at Net Position Governmental Activities (49,123,191)$ Beginning Balance of Long-Term Liabilities Excluded from Fund Level: Deferred pension outflows 2,771,603$ Current year change in deferred pension outflow (71,499) Net adjustment to add to government wide fund balance to arrive at Net Position Governmental Activities 2,700,104$ Beginning Balance of Deferred Outflows Excluded from Fund Level: Deferred pension inflows (7,105,613)$ Deferred OPEB inflows (333,409) Current year change in pension related deferred inflows 3,920,904 Current year change in OPEB related deferred inflows 105,908 Net adjustment to add to government wide fund balance to arrive at Net Position Governmental Activities (3,412,210)$ Beginning Balance of Deferred Inflows Excluded from Fund Level: City of Pasco, Washington 2020 Comprehensive Annual Financial Report 74 B. Explanation of certain differences between the governmental funds statement of revenues, expenditures, and changes in fund balances and the government-wide statement of activities. The governmental funds’ statement of revenues, expenditures and changes in fund balances includes reconciliation between net changes in fund balances – total governmental funds and changes in net position of governmental activities as reported in the government-wide statement of activities. The first element of that reconciliation relates to capital activity as follows: Cash and equivalents 9,022,307$ Restricted cash - IBNR 2,129,808 Investments 2,182,419 Receivables 1,504 Machinery and equipment 5,031,228 Deferred pension outflows 44,498 Accounts payable (213,560) Pension liabilities (119,826) Deferred pension inflows (83,364) Change in current year assets 1,061,471 Change in current year liabilities (141,681) Change in deferred outflows (5,022) Change in deferred inflows 44,510 Net adjustment to reduce government wide fund balance to arrive at Net Position Governmental Activities 18,954,292$ Effect of Internal Service Fund Government Type Activity on Statements: Land 264,953$ Construction in process 10,865,713 Machinery and equipment 391,945 Contributed capital assets 29,252,567 Current year depreciation (16,876,502) Gain on Joint venture 93,137 Net capital activity 23,991,813 Debt repayment 1,330,000 Net debt activity 1,330,000$ The second element of that reconciliation related to debt activity as follows Capital outlays for: City of Pasco, Washington 2020 Comprehensive Annual Financial Report 75 NOTE 3: DEPOSITS AND INVESTMENTS A. Summary of Deposit and Investment Balances Reconciliation of the City’s deposits and investment balances as of December 31, 2020, is as follows: 1. Deposits a. Custodial Credit Risk Custodial credit risk for deposits is the risk that in the event 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’s deposits and certificates of deposit are mostly covered by federal depository insurance (FDIC) or by collateral held in a multiple financial institution collateral pool administered by the Washington Public Deposit Protection Commission (WPDPC). The FDIC insures the first $250,000 of the City’s deposits. The deposit balances over $250,000 are insured by the WPDPC. 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 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. 2. Investments It is the City’s policy to invest all temporary cash surpluses. The interest on these investments is prorated to the various funds. Investments are stated at fair value based on quoted market prices in accordance with GASB Statement No. 72, Fair Value Government Wide Fiduciary Funds Cash on Hand 7,550 - Deposits with Private Financial Institutions 66,220,679 539,021 Deposits in transit 500,818 - Outstanding Checks (1,264,549) - Deposits in State LGIP 58,052,572 - Total Deposits 123,517,070 539,021 Investments 16,516,741 6,507,454 Total Investments 16,516,741 6,507,454 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 76 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. Investments are subject to the following risks. a. 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. In addition to the interest rate risk disclosed below, the City includes investments with fair value highly sensitive to interest rate changes. Investment Type Fair Value Less than 1 year 1 to 5 years 6 to 10 years SBA Participation 51,126$ -$ -$ 51,126$ Federal Farm Credit Bank 3,037,944 3,037,944 - Federal Home Loan Bank 5,004,446 - 5,004,446 - Federal National Mortgage Association 5,214,318 - 5,214,318 - Resolution Funding Corporation-Strips 3,208,907 3,208,907 - - Total Debt Securties 16,516,741$ 3,208,907$ 13,256,708$ 51,126$ Investment Maturities (in Years) Maturity Date # of Months to Maturity Fair Market Value as 12/31/20 % of total WAM 02/01/2027 73 51,126 0.31%0.225966 11/25/2024 47 2,000,084 12.11%5.691434 10/23/2023 34 3,004,362 18.19%6.184532 01/19/2023 25 2,227,239 13.48%3.371184 04/22/2024 40 2,987,079 18.09%7.234064 01/15/2021 1 3,208,907 19.43%0.194282 01/24/2024 37 3,037,944 18.39%6.805454 37 16,516,741$ 100.00%29.706916 Calculation of Weighted Average Maturity (WAM) City of Pasco, Washington 2020 Comprehensive Annual Financial Report 77 b. Credit Risk Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. State law and the City investment policy limit investments to those authorized by State Statute. The City of Pasco holds investments in U.S. Government Agency Securities, the Local Government Investment Pool (LGIP) and demand deposits at U.S. Bank. The investment policy for “credit risk” does not extend beyond the types of authorized investments and the concentration of credit risk described below. As of December 31, 2020, the City’s investments in agency securities were all rated AAA. The LGIP is not rated and registered with the SEC and the fair value of the City’s position in the pool is the same as the value of the pool shares. The LGIP is regulated by the state of Washington’s state finance committee in accordance with RCW 43.250. 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. c. 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, 2020. d. Local Government Investment Pool The City is a participant in the Local Government Investment Pool, which was authorized by Chapter 294, Laws of 1986, and is managed and operated by the ISSUER *FAIR VALUE AT 12/31/20 PERCENTAGE SBA Participation 51,126 0.31% Federal Farm Credit Bank 3,037,944 18.39% Federal Home Loan Bank 5,004,446 30.30% Federal National Mortgage Association 5,214,318 31.57% Resolution Funding Corporation-Strips 3,208,907 19.43% TOTAL 16,516,741$ 100% *All investments were measured at Level 2, Significant Other Observable Inputs. City of Pasco, Washington 2020 Comprehensive Annual Financial Report 78 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. The (city/county/district) 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. 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. Investments Reported as Cash Equivalents as of December 31, 2020. Amortized Cost Less than 1 Year Local Government Investment Pool $58,052,573 $58,052,573 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 79 In addition to the City of Pasco investments presented in the series of tables following this section, the City’s Old Fire Pension and Old Fire OPEB Funds report the following investments in their Trust Funds: B. Investments Measured at Fair Value The City measures and reports investments at fair value using the valuation input hierarchy established by Generally Accepted Accounting Principles (GAAP), as follows: Level 1: Quoted prices in active markets for identical assets or liabilities; Level 2: These are quoted market prices for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other than quoted prices that are not observable; Level 3: Unobservable inputs for an asset or liability. Safekeeping for the City’s investments is provided by U.S. Bank. U.S. Bank contracts with Independent Directors Council (IDC) to provide fair market values of investments on a monthly basis. The pricing methodology varies depending on multiple components, including if an investment is being actively traded. In depth pricing methodology is available from IDC. As of December 31, 2020, the City had the following investments measured at fair value: Old Fire Pension Trust Fund Investments FMV 12/31/20 Interest Rate Maturity Small Business Admn Participation SBAP 10,567$ 5.37%10/1/2026 The Investment Co. of America Mutual Funds 2,866,911 *Varies N/A Total 2,877,478 *YTD Return 19.74% Old Fire OPEB Trust Fund Investments FMV 12/31/20 Interest Rate Maturity WAMU Investors Fund A Mutual Funds 3,629,976 *Varies N/A Total 3,629,976$ *YTD Return 20.19% Quoted Prices Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs 12/31/2020 (Level 1)(Level 2)(Level 3) Investment by Fair Value Level U.S. Government Agency Securities 16,516,741$ -$ 16,516,741$ -$ Total Investments measured at fair value 16,516,741$ -$ 16,516,741$ -$ Total Investments in Statement of Net Position 16,516,741$ Fair Value Measurement Using City of Pasco, Washington 2020 Comprehensive Annual Financial Report 80 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 12/31/20 delinquent taxes totaled $191,905. 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 1% 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 1% limit. The City’s regular levy for 2020 was $1.8075 per $1,000 on an assessed valuation of $6,121,229,885. This resulted in a total regular levy of $11,064,358 for 2020. The City did not levy any taxes for special levies in 2020. January 1 Taxes are levied and become an enforceable lien against properties. February 14 Tax bills are mailed. April 30 First of two equal installment payments is due. May 31 Assessed value of property established for next year's levy at 100% of market value. October 31 Second installment is due. Property Tax Calendar City of Pasco, Washington 2020 Comprehensive Annual Financial Report 81 NOTE 5: CAPITAL ASSETS AND CWIP Capital asset activity for the year ended December 31, 2020 was as follows: Governmental Activities: Beginning Balance 01/01/20 Prior Period Adjustments Adjusted Beginning Balance 01/01/20 Current Period Increases Current Period Decreases Ending Balance 12/31/20 Capital assets, not being depreciated Land 19,473,173$ -$ 19,473,173$ 4,871,110$ 467,238$ 23,877,045$ Construction in progress 17,651,905 (1,473,434) 16,178,471 11,483,255 7,136,360 20,525,366 Total capital assets, not being depreciated 37,125,078 (1,473,434) 35,651,644 16,354,365 7,603,598 44,402,411 Capital assets, being depreciated: Building & structure 48,019,277 - 48,019,277 1,998,549 - 50,017,826 Other improvements 7,379,718 - 7,379,718 26,447 - 7,406,165 Machinery and equipment 19,171,932 - 19,171,932 976,772 888,423 19,260,281 Infrastructure 278,681,072 - 278,681,072 29,172,946 1,068,632 306,785,386 Total capital assets being depreciated 353,251,999 - 353,251,999 32,174,714 1,957,055 383,469,658 Less accumulated depreciation: Building & structure 14,310,889 - 14,310,889 1,132,799 - 15,443,688 Other improvements 3,548,880 - 3,548,880 295,937 - 3,844,817 Machinery and equipment 10,463,635 - 10,463,635 549,242 622,032 10,390,845 Infrastructure 103,727,131 - 103,727,131 14,924,191 1,068,633 117,582,689 Total accumulated depreciation 132,050,535 - 132,050,535 16,902,169 1,690,665 147,262,039 Total capital assets, being depreciated, net 221,201,464 - 221,201,464 15,272,545 266,390 236,207,619 Governmental activities capital assets net 258,326,542$ (1,473,434)$ 256,853,108$ 31,626,910$ 7,869,988$ 280,610,030$ Business Type Activities: Beginning Balance 01/01/20 Prior Period Adjustments Adjusted Beginning Balance 01/01/20 Current Period Increases Current Period Decreases Ending Balance 12/31/20 Capital assets, not being depreciated Land 3,149,049$ -$ 3,149,049$ 733,369$ -$ 3,882,418$ Construction in process 10,452,939 1,187,194 11,640,133 15,896,929 9,042,178 18,494,884 Total capital assets, not being depreciated 13,601,988 1,187,194 14,789,182 16,630,298 9,042,178 22,377,302 Capital assets, being depreciated: Building & structure 69,682,771 - 69,682,771 653,444 - 70,336,215 Other Improvements 450,474 - 450,474 65,104 - 515,578 Machinery and equipment 17,357,705 - 17,357,705 947,976 82,055 18,223,626 Infrastructure 171,717,676 - 171,717,676 11,208,570 186,604 182,739,642 Total capital assets being depreciated 259,208,626 - 259,208,626 12,875,094 268,659 271,815,061 Less accumulated depreciation: Building & structure 23,047,799 - 23,047,799 1,668,542 - 24,716,341 Other Improvements 9,063 - 9,063 10,487 - 19,550 Machinery and equipment 7,702,524 - 7,702,524 1,050,790 70,333 8,682,981 Infrastructure 40,282,770 - 40,282,770 3,684,961 186,604 43,781,127 Total accumulated depreciation 71,042,156 - 71,042,156 6,414,780 256,937 77,199,999 Total capital assets, being depreciated, net 188,166,470 - 188,166,470 6,460,314 11,722 194,615,062 Business activities capital assets net 201,768,458$ 1,187,194$ 202,955,652$ 23,090,612$ 9,053,900$ 216,992,364$ City of Pasco, Washington 2020 Comprehensive Annual Financial Report 82 In 2020, it was determined that a local improvement district funded project included utility assets. A prior period adjustment was necessary to properly assign assets to the functions they support. The change resulted in a reduction in governmental activities, with an offsetting increase in business type activities, in the amount of $1,395,293. Additionally, in the governmental activities, work originally anticipated to be capital in nature, amounting to $78,141, was determined instead to be facility maintenance. The total effect of prior period adjustments to governmental activities was $1,473,434. See note 17 for details. Depreciation expense by function: Construction Commitments The City of Pasco has active construction projects as of December 31, 2020. The projects include street construction and various utility related projects. At year end, the City’s commitments with contractors are as follows: General government 443,448$ Public Safety 481,910 Transportation 14,919,078 Economic environment 151,879 Culture & recreation 905,853 Total depreciation expense - governmental activities 16,902,169$ Water 2,772,979$ Irrigation 583,214 Sewer 2,422,139 Process water reuse facility 453,721 Stormwater 182,727 Total depreciation expense- business-type activities:6,414,780$ Governmental activities: Business-type activities: City of Pasco, Washington 2020 Comprehensive Annual Financial Report 83 CATEGORY PROJECT NAME SPENT TO DATE REMAINING COMMITMENT Fire Fire Station No. 84 & Admin Bldg 2,471,845 5,054,461 General Gesa Stadium Improvements 217,976 185,125 Process Water Resource Facility Embankment Repair -$ 667,895.76$ Process Water Resource Facility Columbia East Pump Station 2,749,181 47,032 Process Water Resource Facility Foster Wells Forcemain 4,421,389 717,789 Process Water Resource Facility Irrigation Pump Station 7,495,158 1,097,196 Sewer WWTP PLC Upgrade 815,092 37,527.26 Sewer Road 36 Lift Station - 593,685 Sewer NW Area Sewer LID - 1,726,861 Sewer 9th & Washington Lift Station- S. Maitland Lift Station (Combined)- 526,341 Streets Chapel Hill Blvd Extension 4,014,952 202,899 Streets Wrigley Drive Extension - 285,000 Streets Road 68 Signage & Striping - 95,924 Streets Court Street Overlay - 390,111 Water Wehe Water Main Replacement - 158,270 22,185,593$ 11,786,117$ TOTAL City of Pasco, Washington 2020 Comprehensive Annual Financial Report 84 NOTE 6: INTER-FUND BALANCES AND TRANSFERS A. Inter-fund loans The composition of inter-fund loan balances as of December 31, 2020 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. B. Inter-fund transfers Transfers between funds during the year ended December 31, 2020 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 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. Loan Purpose Nonmajor Special Revenue Nonmajor Debt Service Total General Fund LID Financing -$ $ 827,452 827,452$ General Fund Marina dock repairs- Interim Financing 225,550 - 225,550 Nonmajor Special Revenue LID Financing - 67,709 67,709 225,550$ 895,160$ 1,120,710$ TotalINTERFUND LOANS DUE FROM INTERFUND LOANS DUE TO General Nonmajor Special Revenue Nonmajor Debt Service Major Construction Internal Service Total General -$ 220,902$ -$ 485$ -$ 221,387$ Nonmajor Special Revenue 2,012,981 252,127 - 11,375 710,184 2,986,667 Major Ambulance 420,000 - - - - 420,000 Major Construction 8,864,321 3,406,932 85,751 - - 12,357,004 Major Utility - 1,233,333 - - - 1,233,333 Total 11,297,302$ 5,113,294$ 85,751$ 11,860$ 710,184$ 17,218,391$ TRANSFER FROM TRANSFER TO City of Pasco, Washington 2020 Comprehensive Annual Financial Report 85 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. City of Pasco, Washington 2020 Comprehensive Annual Financial Report 86 NOTE 7: CHANGES IN LONG-TERM LIABILITIES A. 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 to the Gesa Stadium improvements which is repaid from the Stadium Fund. Compensated absences are mainly liquidated from General, Street and Ambulance Funds. The fund for which the liability is incurred is responsible for liquidating the liability. 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 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 2020 long-term liabilities for internal service funds included with Governmental activities was $130,258. The table below reflects the change in Long-Term Liabilities for Governmental activities for year ended December 31, 2020. B. Changes in long-term liabilities – Business Type All business types liquidate their own compensated absences, judgements, and claims. The table below reflects the change in Long-Term Liabilities for Business Type activities for year ended December 31, 2020. GOVERNMENTAL ACTIVITIES Beginning Balance 01/01/2020 Additions Reductions Ending Balance 12/31/20 Due Within One Year General Obligation Bonds 26,125,000$ -$ (1,330,000)$ 24,795,000$ 875,000$ Premiums 4,340,091 - (151,850) 4,188,241 151,850 Total GO Bonds Payable 30,465,091 - (1,481,850) 28,983,241 1,026,850 Compensated Absences 3,529,310 3,022,125 (2,469,375) 4,082,060 2,259,113 OPEB Liabilities 12,231,327 738,121 - 12,969,448 622,429 Pension Liabilities 3,420,483 - (332,043) 3,222,902 1,137,164 Governmental Activity Long-Term Activity 49,646,211$ 3,760,246$ (4,283,268)$ 49,257,651$ 5,045,556$ BUSINESS TYPE ACTIVITIES Beginning Balance 01/01/2020 Additions Reductions Ending Balance 12/31/20 Due Within One Year Revenue Bonds 38,710,000$ 23,550,000$ (10,865,000)$ 51,395,000$ 2,390,000$ Premiums 1,729,428 1,063,759 (146,295) 2,646,892 150,299 Total Bonds Payable 40,439,428 24,613,759 (11,011,295) 54,041,892 2,540,299 State Loans 6,105,997 107,221 (510,799) 5,702,419 422,079 External Loan 1,309,712 - (127,613) 1,182,099 131,838 Compensated Absences 310,777 311,497 (318,387) 303,887 287,746 Pension Liabilities 1,259,147 33,517 - 1,292,664 402,404 Business Activity Long-Term Activity 49,425,061 25,065,994 (11,968,094) 62,522,961 3,784,366 Total Changes in Business Type & Governmental Long-Term Liabilities 99,071,272$ 28,826,240$ (16,251,362)$ 111,780,612$ 8,829,922$ City of Pasco, Washington 2020 Comprehensive Annual Financial Report 87 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. A. Governmental Debt The City’s outstanding general obligation bonds are comprised of a 2015 bond issue that funded the construction of a new police station and a 2019 bond issue 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 (3/10) of 1%, 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, 2020 are as follows: The annual debt service requirements to maturity for general obligation bonds is presented in the following table. Purpose Issuance Amount Final Maturity Interest Rates Outstanding as of December 31, 2020 Due Within 1 Year 2015 LTGO Police Station 8,795,000 12/1/2035 3.00%-4.00%7,175,000 360,000 2019 LTGO Fire Stations 14,800,000 12/1/2049 4.00%-5.00%14,096,000 422,300 2019 LTGO Gesa Stadium 1,645,000 12/1/2049 4.00%-5.00%1,762,000 46,350 2019 LTGO Animal Shelter 1,645,000 12/1/2049 4.00%-5.00%1,762,000 46,350 24,795,000$ 875,000$ GOVERNMENTAL DEBT - BONDS Total Governmental Debt City of Pasco, Washington 2020 Comprehensive Annual Financial Report 88 B. Business Type Debt In 2020, 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. In 2020, the City refunded two bonds and issued a $16.4 million revenue bond for Reuse Facility improvements. The City is also liable for two state loans: 1) Drinking Water Loan for the Columbia Water Supply Project. The Columbia Water Supply Project was completed in 2018. 2) Public Works Board loan for pre-construction of Reuse Facility improvements. 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, 2020, restricted cash and investments in the proprietary funds contain $4,422,189 in sinking funds and reserves as required by bond indentures. Revenue Bonds, General Obligation Bonds and Loans outstanding for Business Type Accounts are as follows: Year Ending December 31 Principal Interest Total Debt Service 2021 875,000$ 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 1,045,000 982,600 2,027,600 2026-2030 5,945,000 4,154,913 10,099,913 2031-2035 5,260,000 2,856,675 8,116,675 2036-2040 2,480,000 1,970,500 4,450,500 2041-2045 3,180,000 1,283,500 4,463,500 2046-2049 3,165,000 405,000 3,570,000 TOTAL 24,795,000$ 16,003,238$ 40,798,238$ GOVERNMENTAL DEBT City of Pasco, Washington 2020 Comprehensive Annual Financial Report 89 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, 2020. Purpose Issuance Amount Final Maturity Interest Rates Outstanding as of December 31, 2020 Due Within 1 Year 2013A Sewer Capital Projects 2,520,000$ 12/01/2028 3.00%-4.00%1,675,000$ 180,000$ 2013T Capital Projects Reuse Facility 7,235,000 12/01/2028 .69%-4.89%4,550,000 490,000 2015 Water/Sewer Capital Projects 14,380,000 12/01/2040 2.00%-5.00%12,390,000 665,000 2017 Sewer Improvement Revenue Bonds1 9,415,000 12/01/2042 3.30%-4.00%9,415,000 - 2020A Water/Sewer Revenue Bond 7,135,000 12/01/2029 4.00%-5.00%7,135,000 680,000 2020B PWRF Revenue Bond 16,415,000$ 12/01/2050 1.17%-3.57%16,230,000 375,000 51,395,000$ 2,390,000$ 1 This bond requires interest-only payments until 2030. BUSINESS TYPE DEBT -BONDS Purpose Issuance Amount Final Maturity Interest Rates Outstanding as of December 31, 2020 Due Within 1 Year DM15-952-037 Columbia Water Supply Project 6,810,430$ 10/01/2034 1.50%5,595,198$ 399,657$ HAEIFAC - Reuse Facility Improvement Loan 1,500,000 07/01/2028 3.20%1,182,099 131,838 PWB- PWRF Pre-treatment Improvements 107,221$ 06/01/2024 0.84%107,221 22,422 6,884,518 553,917 58,279,518$ 2,943,917$ Total Business Type Debt BUSINESS TYPE DEBT -LOANS Year Ending December 31 Principal Interest Total Debt Service 2021 2,943,917 2,094,934 5,038,851 2022 2,643,169 2,000,962 4,644,131 2023 2,657,559 1,916,955 4,574,514 2024 2,759,562 1,830,807 4,590,369 2025-2029 12,627,026 7,737,125 20,364,151 2030-2034 10,678,285 5,781,426 16,459,711 2035-2039 10,655,000 3,719,788 14,374,788 2040-2044 8,780,000 1,550,688 10,330,688 2044-2049 3,710,000 553,685 4,263,685 2050 825,000 29,469 854,469 TOTAL 58,279,518$ 27,215,839$ 85,495,357$ BUSINESS TYPE DEBT City of Pasco, Washington 2020 Comprehensive Annual Financial Report 90 C. 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 $345,658. 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: Inter-fund 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 $495,307 for the year ended December 31, 2020. The following represents the future annual minimum lease payments: Bonds Governmental Business Type Total Current Bonds Payable 875,000$ 2,390,000$ 3,265,000$ Bond Premium/Discounts 151,850 150,298 302,148 Total Current Bonds Payable 1,026,850 2,540,298 3,567,148 Non Current - Bonds Payable 23,920,000 49,005,000 72,925,000 Bond Premium/Discounts 4,036,392 2,496,594 6,532,986 Total Non Current Bonds Payable 27,956,392 51,501,594 79,457,986 Total Bonds Payable (Net of Premium/Discounts )28,983,242$ 54,041,892$ 83,025,134$ Year Ending December Amount 2021 466,651$ 2022 296,844 2023 183,882 2024 51,325 2025 3,991 Total 1,002,692$ Police vehicles City of Pasco, Washington 2020 Comprehensive Annual Financial Report 91 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. City of Pasco is a member of the Washington Cities Insurance Authority (WCIA). Utilizing Chapter 48.62 RCW (self-insurance regulation) and Chapter 39.34 RCW (Interlocal Cooperation Act), nine cities originally formed WCIA on January 1, 1981. WCIA was created for the purpose of providing a pooling mechanism for jointly purchasing insurance, jointly self-insuring, and / or jointly contracting for risk management services. WCIA has a total of 162 members. New members initially contract for a three-year term, and thereafter automatically renew on an annual basis. A one-year withdrawal notice is required before membership can be terminated. Termination does not relieve a former member from its unresolved loss history incurred during membership. Liability coverage is written on an occurrence basis, without deductibles. Coverage includes general, automobile, police, errors or omissions, stop gap, employment practices and employee benefits liability. Limits are $4 million per occurrence in the self-insured layer, and $21 million in limits above the self-insured layer is provided by reinsurance. Total limits are $25 million per occurrence subject to aggregates and sublimits. The Board of Directors determines the limits and terms of coverage annually. Insurance for property, automobile physical damage, fidelity, inland marine, and boiler and machinery coverage are purchased on a group basis. Various deductibles apply by type of coverage. Property coverage is self-funded from the members’ deductible to $750,000, for all perils other than flood and earthquake, and insured above that to $400 million per occurrence subject to aggregates and sublimits. Automobile physical damage coverage is self-funded from the members’ deductible to $250,000 and insured above that to $100 million per occurrence subject to aggregates and sublimits. 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. City of Pasco, Washington 2020 Comprehensive Annual Financial Report 92 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 $100,000 per individual. The amount of medical and/or dental claims in excess of commercial insurance for the last three years are: 2018 2019 2020 5,196,581$ 6,170,277$ 5,620,957$ City of Pasco, Washington 2020 Comprehensive Annual Financial Report 93 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 2020 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 $279,824 on Dec 31, 2020, 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 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 94 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 $34,327 on Dec 31, 2020, which reported as an investment in joint ventures in the government-wide statement of net position. The change in equity is reflected in the government-wide statement of activities under Public Safety. The City does not anticipate any income distributions from Metro. Complete separate financial statements for Metro obtained at the City of Kennewick, 210 West Sixth Avenue, Kennewick, Washington. 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, 2020 was $1,126,712 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. City of Pasco, Washington 2020 Comprehensive Annual Financial Report 95 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. City of Pasco, Washington 2020 Comprehensive Annual Financial Report 96 NOTE 11: RELATED PARTIES/ORGANIZATIONS A. Pasco Public Facility District Pursuant to RCW 35.57 (the “City PFD Act”) the Pasco Public Facilities District was formed and created by Ordinance No. 3558 on July 15, 2002, coextensive with the boundaries of the City, with the powers and authority set forth in the City PFD Act. The District was established for the purpose of acquiring, constructing, owning, remodeling, maintaining, equipping, re-equipping, repairing, financing, operating one or more Regional Centers, as defined by the RCW 35.57.020 and/or participating with any other qualified public facilities district in a cooperative and joint development of a Regional Center in the Tri- Cities area by interlocal agreement. The members of the board of directors of the District (the “PFD Board”) shall be selected and appointed by the Council, as required by the RCW. The PFD Board consisted of five members. Three of the members will be appointed based on recommendations from local organizations. The members serve four-year terms. The Council may, by resolution, remove a member for any reason. Vacancies will be filled by appointment by the Council. All corporate powers of the District will be exercised by or under the authority of the PFD Board; and the business, property and affairs of the District shall be managed under the direction of the PFD Board, except as may be otherwise provided for by law or in its Charter. Complete separate Financial Statements for the District may be obtained from the City of Pasco, P.O. Box 293, Pasco, WA 99301. B. Downtown Pasco Development Authority Pursuant to RCW 35.21, the Downtown Pasco Development Authority was formed and created by Ordinance No. 3985 (the DPDA Act) on December 20, 2010, coextensive with the boundaries of the City, with the powers and authority set forth in the City DPDA Act. The Authority was created to administer and execute Federal grants or programs; to receive and administer private funds, goods or services for any lawful public service; and to perform any lawful public purpose or public function to provide for the revitalization and enhancement of the downtown Pasco area. The members of the board of directors of the Authority (the “DPDA Board”) are selected and appointed by the Mayor of the City of Pasco, subject to confirmation by the City Council. The DPDA Board consists of nine members. Five of the members are representative of for-profit business or property owners within the downtown area. At least two members are representative of the banking and/or real estate profession, and at least two members are representatives of business or corporate management. The members serve four-year terms. The Council may, by resolution, remove a member for any reason. City of Pasco, Washington 2020 Comprehensive Annual Financial Report 97 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 2020, the City expended $169,800 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. C. 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 2020, the City of Pasco paid Franklin County $276,871 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, 2020, the TRAC Fund had a fund balance of $524,766. Complete Financial Statements for TRAC may be obtained from Franklin County, 1016 N. 4th Avenue, Pasco, Washington. D. 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.” City of Pasco, Washington 2020 Comprehensive Annual Financial Report 98 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. City of Pasco, Washington 2020 Comprehensive Annual Financial Report 99 NOTE 12: JOINTLY GOVERNED ORGANIZATIONS A. 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. 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. B. 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. C. 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. City of Pasco, Washington 2020 Comprehensive Annual Financial Report 100 D. 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. E. 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 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 2020 for these services was $411,026. No distributions of income to the City are expected since charges are assessed only to recover anticipated expenses. City of Pasco, Washington 2020 Comprehensive Annual Financial Report 101 NOTE 13: EMPLOYEE RETIREMENT SYSTEMS AND PENSION PLANS The following table represents the aggregate pension amounts for all plans for the year 2020: A. State Sponsored Pension Plans Substantially all the City’s full-time and qualifying part-time employees participate in one of the following statewide retirement systems administered by the Washington State Department of Retirement Systems, under cost-sharing, multiple-employer public employee defined benefit and defined contribution retirement plans. The state Legislature establishes, and amends, laws pertaining to the creation and administration of all public retirement systems. The Department of Retirement Systems (DRS), a department within the primary government of the State of Washington, issues a publicly available comprehensive annual financial report that includes financial statements and required supplementary information for each plan. The DRS comprehensive annual financial report may be obtained by writing to: Department of Retirement Systems Communications Unit P.O. Box 48380 Olympia, WA 98540-8380 Or the DRS comprehensive annual financial report may be downloaded from the DRS website at www.drs.wa.gov. 1. Public Employee’s Retirement System (PERS) PERS members include elected officials; state employees; employees of the Supreme, Appeals and Superior Courts; employees of the legislature; employees of district and municipal courts; employees of local governments; and higher education employees not participating in higher education retirement programs. PERS is comprised of three separate pension plans for membership purposes. PERS plans 1 and 2 are defined benefit plans, and PERS plan 3 is a defined benefit plan with a defined contribution component. Pension liabilities 4,515,566$ Pension assets 12,985,759 Deferred outflows of resources 3,119,082 Deferred inflows of resources 3,597,092 Pension expense/expenditures 127,505$ Aggregate Pension Amounts - All Plans City of Pasco, Washington 2020 Comprehensive Annual Financial Report 102 a. PERS Plan 1 provides retirement, disability and death benefits. Retirement benefits are determined as 2% 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%. 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%. 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 2020 were as follows: * For employees participating in JBM, the contribution rate was 12.26%. b. PERS Plan 2/3 provides retirement, disability and death benefits. Retirement benefits are determined as 2% of the member’s average final compensation (AFC) times the member’s years of service for Plan 2 and 1% of AFC for Plan 3. The AFC is the average of the member’s 60 highest-paid consecutive service months. There is no cap on years of service credit. Members are eligible for retirement with a full benefit at 65 with at least five years of service credit. Retirement before age 65 is considered an early retirement. PERS Plan 2/3 members who have at least 20 years of service credit and are 55 years of age or older, are eligible for early retirement with a benefit that is reduced by a factor that varies according to age for each year before Actual Contribution Rates Employer Employee* January – August 2020 PERS Plan 1 7.92%6.00% PERS Plan 1 UAAL 4.76% Administrative Fee 0.18% Total 12.86%6.00% September – December 2020 PERS Plan 1 7.92%6.00% PERS Plan 1 UAAL 4.87% Administrative Fee 0.18% Total 12.97%6.00% PERS Plan 1 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 103 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 3% 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 5% 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 3% 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% and escalate to 15% 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%. 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 2020 were as follows: City of Pasco, Washington 2020 Comprehensive Annual Financial Report 104 * For employees participating in JBM, the contribution rate was 19.75%. The City’s actual PERS plan contributions were $665,510 to PERS Plan 1 and $1,099,234 to PERS Plan 2/3 for the year ended December 31, 2020. 2. 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. a. 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. Actual Contribution Rates Employer 2/3 Employee 2* January – August 2020 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%7.41% September – December 2020 PERS Plan 2/3 7.92%7.90% PERS Plan 1 UAAL 4.87% Administrative Fee 0.18% Employee PERS Plan 3 Varies Total 12.97%7.90% PERS Plan 2/3 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 105 Contributions Starting on July 1, 2000, LEOFF Plan 1 employers and employees contribute 0%, as long as the plan remains fully funded. The LEOFF Plan I had no required employer or employee contributions for fiscal year 2020. Employers paid only the administrative expense of 0.18% of covered payroll. b. LEOFF Plan 2 provides retirement, disability and death benefits. Retirement benefits are determined as 2% 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 3% 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 3% 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%. 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% in 2020. The LEOFF Plan 2 required contribution rates (expressed as a percentage of covered payroll) for 2020 were as follows: Actual Contribution Rates Employer Employee January – December 2020 State and local governments 5.15%8.59% Administrative Fee 0.18% Total 5.33%8.59% Ports and Universities 8.59%8.59% Administrative Fee 0.18% Total 8.77%8.59% LEOFF Plan 2 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 106 The City’s actual contributions to the plan were $965,108 for the year ended December 31, 2020. 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, 2020, the state contributed $76,297,643 to LEOFF Plan 2. The amount recognized by the City as its proportionate share of this amount is $617,114. 3. Actuarial Assumptions The total pension liability (TPL) for each of the DRS plans was determined using the most recent actuarial valuation completed in 2020 with a valuation date of June 30, 2019. The actuarial assumptions used in the valuation were based on the results of the Office of the State Actuary’s (OSA) 2013-2018 Experience Study and the 2019 Economic Experience Study. Additional assumptions for subsequent events and law changes are current as of the 2019 actuarial valuation report. The TPL was calculated as of the valuation date and rolled forward to the measurement date of June 30, 2020. Plan liabilities were rolled forward from June 30, 2019, to June 30, 2020, 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 developed using the Society of Actuaries’ Pub. H-2020 mortality rates, which vary by member status, as the base table. The OSA applied age offsets for each system, as appropriate, to better tailor the mortality rates to the demographics of each plan. OSA applied the long-term MP-2017 generational improvement scale, also developed by the Society Actuaries, to project mortality rates for every year after the 2010 base table. 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. City of Pasco, Washington 2020 Comprehensive Annual Financial Report 107  OSA updated its demographic assumptions based on the results of its latest demographic experience study. See OSA’s 2013-2018 Demographic Experience Study at leg.wa.gov/osa.  OSA updated the Early Retirement Factors and Joint-and-Survivor factors used in its model to match the ones implemented by DRS on October 1, 2020. These factors are used to value benefits for members who elect to retire early and for survivors of members that die prior to retirement.  The valuation includes liabilities and assets for Plan 3 members purchasing Total Allocation Portfolio annuities when determining contribution rates and funded status.  OSA simplified its modeling of medical premium reimbursements for survivors of duty-related deaths in LEOFF 2.  OSA changed its method of updating certain data items that change annually, including the public safety duty-related death lump sum and Washington state average wage. OSA set these values in 2018 and will project them into the future using assumptions until the next Demographic Experience Study in 2025. See www.leg.wa.gov/osa for more information on this method change. 4. Discount Rate The discount rate used to measure the total pension liability for all DRS plans was 7.4%. To determine that rate, an asset sufficiency test was completed to test whether each pension plan’s fiduciary net position was sufficient to make all projected future benefit payments for current plan members. Based on OSA’s 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% was used to determine the total liability. 5. Long-Term Expected Rate of Return The long-term expected rate of return on the DRS pension plan investments of 7.4% 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 (CMA’s) and simulated expected investment returns provided by the Washington State Investment Board (WSIB). The WSIB uses the CMA’s and their target asset allocation to simulate future investment returns at various future times. City of Pasco, Washington 2020 Comprehensive Annual Financial Report 108 6. 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, 2020, are summarized in the table below. The inflation component used to create the table is 2.2% and represents the WSIB’s most recent long-term estimate of broad economic inflation. 7. 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%, 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%) or 1-percentage point higher (8.4%) than the current rate. 8. 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. 9. Pension Liabilities (Assets), Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions At June 30, 2020, the City reported a total pension asset of $10,853,518 and a total pension liability of $4,515,567 for its proportionate share of the net pension liabilities as follows: 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% Asset Class Target Allocation % Long-Term Expected Real Rate of Return Arithmetic 1% Decrease Current Discount Rate 1% Increase -(6.40%)-(7.40%)-(8.40%) PERS 1 $ 3,842,982 $ 3,068,110 $ 2,392,342 PERS 2/3 9,006,462 1,447,457 (4,777,389) LEOFF 1 (1,061,325) (1,303,921) (1,513,807) LEOFF 2 $ (189,053) $ (9,549,597) $ (17,214,015) Plan City of Pasco, Washington 2020 Comprehensive Annual Financial Report 109 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 Non-employer Allocations for all plans except LEOFF 1. LEOFF Plan 1 allocation percentages are based on the total historical employer contributions to LEOFF 1 from 1971 through 2000 and the retirement benefit payments in fiscal year 2020. Historical data was obtained from a 2011 study by the Office of the State Actuary (OSA). In fiscal year 2020, the state of Washington contributed 87.12% of LEOFF 1 employer contributions and all other employers contributed the remaining 12.88% of employer contributions. LEOFF 1 is fully funded and no further employer contributions have been required since June 2000. If the plan becomes underfunded, funding of the remaining liability will require new legislation. The allocation method the plan chose reflects the projected long-term contribution effort based on historical data. Liability (or Asset) PERS 1 $ 3,068,110 PERS 2/3 1,447,457 LEOFF 1 (1,303,921) LEOFF 2 $ (9,549,597) Plan LEOFF 1 Asset LEOFF 2 Asset Employer’s proportionate $ (1,303,921) $ (9,549,597) State’s proportionate share of the net pension asset associated with the employer (8,819,690) (6,106,244) TOTAL $ (10,123,611) $ (15,655,841) Proportionate Share 6/30/19 PERS 1 0.0917660%0.0869020%-0.0004864% PERS 2/3 0.1184860%0.1131760%-0.0053100% LEOFF 1 0.0690310%0.0690450%0.0000140% LEOFF 2 0.4925440%0.4681510%-0.0243930% Proportionate Share 6/30/20 Change in ProportionPlan City of Pasco, Washington 2020 Comprehensive Annual Financial Report 110 In fiscal year 2020, the State of Washington contributed 39% of LEOFF 2 employer contributions pursuant to RCW 41.26.725 and all other employers contributed the remaining 61% of employer contributions. The collective net pension liability (asset) was measured as of June 30, 2020, and the actuarial valuation date on which the total pension liability (asset) is based was as of June 30, 2019, with update procedures used to roll forward the total pension liability to the measurement date. 10. Pension Expense For the year ended December 31, 2020, the City recognized pension expense as follows: 11. Deferred Outflows of Resources and Deferred Inflows of Resources At December 31, 2020, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: PERS 1 $ (49,470) PERS 2/3 92,969 LEOFF 1 (67,263) LEOFF 2 354,343 Old Fire Pension (203,074) TOTAL $ 127,505 Pension Expense PERS 1 Deferred Outflows of Deferred Inflows of Resources Differences between expected and actual experience $ - $ - Net difference between projected and actual investment earnings on pension plan investments - (17,082) Changes of assumptions - - Changes in proportion and differences between contributions and proportionate share of contributions - - Contributions subsequent to the measurement date 352,742 - TOTAL $ 352,742 $ (17,082) City of Pasco, Washington 2020 Comprehensive Annual Financial Report 111 PERS 2/3 Deferred Outflows of Resources Deferred Inflows of Resources Differences between expected and actual experience $ 518,168 $ (181,401) Net difference between projected and actual investment earnings on pension plan investments - (73,510) Changes of assumptions 20,616 (988,738) Changes in proportion and differences between contributions and proportionate share of contributions (144,669) (44,089) Contributions subsequent to the measurement date 578,831 - TOTAL $ 972,946 $ (1,287,738) LEOFF 1 Deferred Outflows of Resources Deferred Inflows of Resources Differences between expected and actual experience $ - $ - Net difference between projected and actual investment earnings on pension plan investments - (13,639) Changes of assumptions - - Changes in proportion and differences between contributions and proportionate share of contributions - - Contributions subsequent to the measurement date - - TOTAL $ - $ (13,639) LEOFF 2 Deferred Outflows of Resources Deferred Inflows of Resources Differences between expected and actual experience $ 1,321,344 $ (169,371) Net difference between projected and actual investment earnings on pension plan investments - (106,438) Changes of assumptions 13,835 (1,478,701) Changes in proportion and differences between contributions and proportionate share of contributions (44,129) (286,107) Contributions subsequent to the measurement date 502,343 - TOTAL $ 1,793,394 $ (2,040,617) Old Fire Pension Deferred Outflows of Resources Deferred Inflows of Resources Differences between expected and actual experience $ - $ - Net difference between projected and actual investment earnings on pension plan investments - (238,016) Changes of assumptions - - Changes in proportion and differences between contributions and proportionate share of contributions - - Contributions subsequent to the measurement date - - TOTAL $ - $ (238,016) ALL PLANS Deferred Outflows of Resources Deferred Inflows of Resources Differences between expected and actual experience $ 1,839,512 $ (350,772) Net difference between projected and actual investment earnings on pension plan investments - (448,685) Changes of assumptions 34,451 (2,467,439) Changes in proportion and differences between contributions and proportionate share of contributions (188,798) (330,196) Contributions subsequent to the measurement date 1,433,916 - TOTAL $ 3,119,082 $ (3,359,076) City of Pasco, Washington 2020 Comprehensive Annual Financial Report 112 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, 2021. Other amounts reported as deferred outflows and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Year ended December 31:PERS 1 2021 $ (77,519) 2022 (2,438) 2023 23,653 2024 39,222 2025 - Thereafter $ - Year ended December 31:PERS 2/3 2021 $ (642,015) 2022 (184,974) 2023 (15,681) 2024 71,963 2025 (87,975) Thereafter $ (89,576) Year ended December 31: LEOFF 1 2021 $ (48,687) 2022 (2,538) 2023 13,841 2024 23,746 2025 - Thereafter $ - Year ended December 31: LEOFF 2 2021 $ (763,117) 2022 (150,850) 2023 84,973 2024 263,150 2025 (120,550) Thereafter $ (99,639) City of Pasco, Washington 2020 Comprehensive Annual Financial Report 113 B. Firemen's Pension 1. Plan Description The Firemen’s’ Pension Fund (FPF) is administered by the City of Pasco. The plan is a single employer defined benefit pension plan that provides pensions for firefighters that were hired prior to 1970. The Municipal Firefighters' Pension board consists of the following five members, ex officio, the Mayor, or in a city of the first class, the Mayor or a designated representative who shall be an elected official of the city, who shall be chairperson of the board, the city comptroller or clerk, the chairperson of finance of the City Council, or if there is no chairperson of finance, the City Treasurer, and in addition, two regularly employed or retired firefighters elected by secret ballot of those employed and retired firefighters who are subject to the jurisdiction of the board. The members to be elected by the firefighters shall be elected annually for a two-year term. The two firefighters elected as members shall, in turn, select a third eligible member who shall serve as an alternate in the event of an absence of one of the regularly elected members. In case a vacancy occurs in the membership of the firefighters or retired members, the members shall in the same manner elect a successor to serve the unexpired term. The board may select and appoint a secretary who may, but need not be, a member of the board. In case of absence or inability of the chairperson to act, the board may select a chairperson pro tempore who shall during such absence or inability to perform the duties and exercise the powers of the chairperson. A majority of the members of the board shall constitute a quorum and have power to transact business. 2. Benefits Provided All benefit terms are in statutes RCW 41.16, 41.18, and 41.26. FPF provides retirement, disability, and death benefits. Each firefighter in service on March 1, 1970 receives the greater of the benefit payable under the Washington Law Enforcement Officers' and Firefighters' Retirement System and the benefits available under the provisions of prior law. Where benefits under the old law exceed those under the new law for any firefighter, the excess benefits are paid from the FPF of the city employing the member on March 1, 1970. All members are retired and drawing benefits. Benefit terms provide for cost-of-living adjustments to each member's retirement benefit. There are two types of increases: escalation by salary in proportion to the current salary of the rank from which the firefighter retired, or an increase proportionate to the increase in the Seattle-area CPI, with the change computed annually. Regardless of the increase (or decrease) in the CPI, the benefits are increased at least 2% each year. The former applies to firefighters who retired from service after 1969, their survivors, and to firefighters who retired for duty City of Pasco, Washington 2020 Comprehensive Annual Financial Report 114 disability (but not their survivors) after 1969. The latter applies to all other types of monthly benefits. 3. 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, 2020, the benefit terms covered the following employees: 4. 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. Reporting Period contributions: $89,252 5. 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, 2020 the Fire Pension Plan had the following investments, reported at fair market value. Federal Agency $ 10,567 Mutual Funds $ 2,866,912 Count Inactive employees, spouses, or beneficiaries currently receiving benefit payment 9 Inactive employees entitled to but not yet receiving benefit payments: 0 Active employees: 0 Total 9 Category City of Pasco, Washington 2020 Comprehensive Annual Financial Report 115 6. Rate of Return For the year ended December 31, 2020, the annual money-weighted rate of return on pension plan investments, net of pension plan investment expense, was 12.07%. The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amount actually invested. 7. Actuarial Assumptions The total pension liability in the December 31, 2020 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified:  Discount Rate 7.00%  Investment Rate of Return 7.00%  Inflation 2.50%  Salary increases 3.00%  Mortality rates were based on tables from the Society of Actuaries.  No experience reports were used.  There were no ad hoc postemployment benefit changes (including ad hoc COLAs) to the plan. 8. 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. 9. Sensitivity of Liabilities to Change in the Discount Rate Sensitivity of the total and net pension liability to changes in the discount rate. The total and net pension liability of the City, as well as what the City's total and net pension liability would be if they were calculated using a discount rate that is one percentage point lower (6.00%) or one percentage point higher (8.00%) follows: 1% Decrease Current Discount Rate 1% Increase 6.00%7.00%8.00% 1,339,628$ 1,234,876$ 1,144,269$ Total Pension Liability (Asset) City of Pasco, Washington 2020 Comprehensive Annual Financial Report 116 10. Fiduciary Net Position The components of the net pension liability of the City at December 31, 2020 were as follows: The following table presents the changes in Net Pension Liability for year ending December 31, 2020. 11. Deferred Outflows of Resources and Deferred Inflows of Resources At December 31, 2020, the City recognized a pension expense of -$203,074. The City reported deferred outflows of resources and deferred inflows of resources related to the Fire Pension Plan from the following sources: 1% Decrease Current Discount Rate 1% Increase 6.00%7.00%8.00% (2,027,489)$ (2,132,241)$ (2,222,848)$ Net Pension Liability (Asset) Total Pension Liability 1,234,876$ Plan Fiduciary Net Position 3,367,117 Net Pension Liability (Asset)(2,132,241)$ Plan Fiduciary Net Position as a % of Total Pension Liability 272.67% Total Pension Plan Fiduciary Net Net Pension Liability Position Liability Balances at January 1, 2020 1,281,794$ 3,027,021$ (1,745,227)$ Changes for the year: Service Cost - - - Interest 85,837 - 85,837 Differences between expected and actual experience (21,644) - (21,644) Change in assumptions - - - Contributions- employer/other - 89,252 (89,252) Contributions- employee - - - Net investment income - 364,053 (364,053) Benefit payments, including refunds of employee contribution (111,111) (111,111) - Administrative expense - (2,098) 2,098 Other changes - - - Net changes (46,918) 340,096 (387,014) Balances at December 31, 2020 1,234,876$ 3,367,117$ (2,132,241)$ Changes in Net Pension Liability City of Pasco, Washington 2020 Comprehensive Annual Financial Report 117 Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in the pension expense as follows: The Fire Pension Fund is reported in the City’s comprehensive annual financial report 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 City of Pasco, 525 N. 3rd Ave., Pasco, WA 99301. Deferred Outflows Deferred Inflows of Resources of Resources -$ -$ - - - (238,016) - - -$ (238,016)$ Difference between expected and actual experience Net Difference between projected and actual earnings on pension plan investments Changes of assumptions TOTAL Firemen's Pension Plan Contributions subsequent to the measurement date Year Ended December 31 Amount 2021 (75,314) 2022 (32,753) 2023 (98,942) 2024 (31,007) 2025 - Thereafter - City of Pasco, Washington 2020 Comprehensive Annual Financial Report 118 NOTE 14: DEFINED BENEFIT OTHER POSTEMPLOYEMENT BENEFIT (OPEB) PLANS The following table represents the aggregate OPEB amounts for all plans subject to the requirements of GASBS 75 for the year 2020: A. LEOFF 1 – Postemployment Healthcare Plan In addition to the pension benefits outlined in Note 13, 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. 1. Plan Description As required by the Revised Code of Washington (RCW) Chapter 41.26, the City provides lifetime medical care for members of the Law Enforcement Officers and Firefighters (LEOFF) retirement system hired before October 1, 1977, under a defined- benefit healthcare plan administered by the City. The plan is funded on a pay-as-you- go basis and there are no assets accumulated in a qualifying trust. 2. 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, 2020, the following employees were covered by the benefit terms: OPEB Liabilities 12,969,448$ OPEB Assets (2,494,697) Deferred Outflows of Resources - Deferred Inflows of Resources (227,501) OPEB Expense 1,068,068$ 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 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 119 3. Contributions The City pays benefits as they come due. Contributions rate: Benefits Due Reporting period contributions: $ 526,399 4. 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, 2020. 5. Actuarial Assumptions The total OPEB liability in the December 31, 2020 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified:  Discount Rate: 2.00%  Inflation: 2.00%  Salary Increases: 3.75%  Healthcare cost trend rates - Pre-Medicare: 6.50%* - Medicare: 6.00%*  Mortality Rates are based on CalPERS tables.  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. *Trending down to 3.94% over 54 years. Applies to calendar years. 6. Discount Rate The discount rate used to measure the total OPEB liability was 2.00%. 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 total OPEB Liability would be if it were calculated using a discount rate that is one point lower (1.00%) or one percentage point higher (3.00%) follows: City of Pasco, Washington 2020 Comprehensive Annual Financial Report 120 Total OPEB Liability (asset) 1% Decrease Current Rate 1% Increase 1.00% 2.00% 3.00% $ 14,438,226 $ 12,969,448 $ 11,717,812 Sensitivity of the total OPEB liability to changes in the healthcare cost trend rates. The healthcare trend for this valuation started at 6.00% and decreased to 3.94% over 54 years. The total OPEB liability of the City, as well as what the City’s total OPEB Liability would be if it were calculated using a healthcare cost trend rates that is one point lower (5.00%) or one percentage point higher (7.00%) than current healthcare cost trend rates follows: Total OPEB Liability (asset) 5.00% Decreasing to 2.94% 6.00% Decreasing to 3.94% 7.00% Decreasing to 4.94% $ 11,676,055 $ 12,969,448 $ 14,458,186 7. Changes in the Total OPEB Liability The changes in total OPEB liability for 2020 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 2020. Plan Fiduciary Net Total OPEB Total OPEB Position Liability Liability (a)(b)(c) = (a)-(b) Balances at January 1, 2020 12,231,327$ -$ 12,231,327$ Changes for the year: Service Cost 61,124 - - Interest 330,804 - 330,804 Changes of Benefit Terms - Differences Between Expected and Actual Experienc (84,229) Changes in Assumptions 956,821 Benefit payments (526,399) (526,399) Net changes 738,121 - 738,121 Balance as of December 31, 2020 12,969,448$ - 12,969,448 Schedule of changes in the Total OPEB Liability City of Pasco, Washington 2020 Comprehensive Annual Financial Report 121 B. Fire Pension – Postemployment Healthcare Plan 1. 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. 2. 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. 3. Employees Covered by Benefit Terms At December 31, 2020 (the census date), the benefit terms covered the following employees: 4. 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. 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 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 122 5. Actuarial Assumptions The total OPEB liability in the December 31, 2020 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: 5.50% trending down to 3.94% over 53 years. Applies to calendar 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. 6. 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. 7. Sensitivity of Liabilities to Changes in the Discount Rate and Healthcare Cost Trend Rate Sensitivity of the total and net OPEB liability to changes in the discount rate. The total and net OPEB liability of the City, as well as what the City's total and net OPEB liability would be if they were calculated using a discount rate that is one percentage point lower (6.75%) or one percentage point higher (8.75%) follows: 1% Decrease Current Discount Rate 1% Increase 6.75%7.75%8.75% 1,200,407$ 1,137,445$ 1,080,291$ Net OPEB Liability (Asset) (2,431,735)$ (2,494,697)$ (255,851)$ Total OPEB Liability (Asset) City of Pasco, Washington 2020 Comprehensive Annual Financial Report 123 8. Sensitivity of the Net OPEB Liability to Change in the Healthcare Cost Trend Rates The healthcare trend for this valuation started at 5.50% and decreased to 3.94% over 53 years. The total OPEB liability of the City, as well as what the City's total OPEB liability would be if it were calculated using healthcare cost trend rates that are one percentage point lower (4.50%) or one percentage point higher (6.50%) than current healthcare cost trend rates follows: C. Changes in the Net OPEB Liability The changes in net OPEB liability for 2020 are presented in the following table. At December 31, 2020, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources: 1% Decrease Current Discount Rate 1% Increase 4.50%5.50%6.50% 1,073,428$ 1,137,445$ 1,206,935$ Net OPEB Liability (Asset) (2,558,714)$ (2,494,697)$ (2,425,207)$ Total OPEB Liability (Asset) Total OPEB Plan Fiduciary Net Net OPEB Liability Position Liability Balances at January 1, 2020 1,199,983$ 3,470,641$ (2,270,658)$ Changes for the year: Service Cost - - - Interest 89,471 - 89,471 Differences between expected and actual experience (60,969) (60,969) Change in assumptions - - - Net investment income - 254,531 (254,531) Contributions - - - Benefit payments (91,040) (91,040) - Administrative expense - (1,990) 1,990 Other changes - - - Net changes (62,538) 161,501 (224,039) Balances at December 31, 2020 1,137,445$ 3,632,142$ (2,494,697)$ Changes in the Net OPEB Liability City of Pasco, Washington 2020 Comprehensive Annual Financial Report 124 Amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows: 1. 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. 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 - (227,501) Contributions subsequent to the measurement date - - TOTAL -$ (227,501)$ Old Firemen's Plan Year Ended December 31 Amount 2021 (96,521) 2022 (35,095) 2023 (97,762) 2024 1,877 2025 - Remaining - Name of Investment Type Balance as of 12/31/20 Rating by Morningstar 2020 YTD Return Annualized Return Since 1/1/03 Washington Mutual Investers Fund-A Mutual Fund $3,629,976 Gold 7.43%9.56% City of Pasco, Washington 2020 Comprehensive Annual Financial Report 125 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 8, 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 grantors or representatives. 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. As of December 31, 2020, there was one damage claims and one potential lawsuit pending against the City. However, in our opinion, neither the potential liability from any single claim or lawsuit, nor the aggregate potential liability resulting from pending claims nor lawsuits, would affect materially, the financial condition of the City. City of Pasco, Washington 2020 Comprehensive Annual Financial Report 126 NOTE 16: SUBSEQUENT EVENTS On March 2, 2020, the City passed Ordinance No. 4483 establishing Local Improvement District (LID) No. 151 to support the construction of a new sanitary sewer trunk line and other sewer improvements in the Broadmoor area located in the northwest section of the City. The estimated assessment against benefiting properties is $5,770,000. The total estimated cost of the improvements is $6,880,000. On December 7th, 2020, a contract for the construction of the sewer trunk line was awarded. The completion of the full project will require interim funding in the form of a bond anticipation note. The City anticipates the project will be complete and LID bonds issued in less than two years. With the availability of General Fund reserves, in conjunction with the underwriter’s recommendation, the note will be secured internally. This plan is mutually beneficial by the avoidance of higher issuance costs associated with an external financing, which is passed on to assessed properties, and affording the General Fund a higher interest rate than typically available to the City based on conservative investment protections. The interest rate of the interim financing will be 3.25%. City of Pasco, Washington 2020 Comprehensive Annual Financial Report 127 NOTE 17: PRIOR PERIOD ADJUSTMENT The following table itemizes the prior period adjustments made in 2020, along with the purposes for the adjustments: Purpose for prior period adjustments: Purpose for Adjustment (Decrease)Increase Adjustment to Fund Balance / Net Position Governmental Funds: General Fund 1 (76,690)$ 335,384$ 258,694$ Construction Fund 1 (631,447) 192,256 (439,191) Other Governmental Funds: City Streets Fund 1 - 39,056 39,056 Arterial Streets Fund 1 (105,846) - (105,846) I-182 Traffic Impact Fund 1 - 191,547 191,547 Street Overlay Fund 1 - 33,630 33,630 MLK Comm Center Fund 1 (9,720) - (9,720) Park Development Fund 1 - 30,000 30,000 Capital Improvement REET Fund 1 (224,125) 113,946 (110,179) Economic Development Fund 1 - 112,008 112,008 Total Other Governmental Funds (339,690) 520,187 180,496 Total Governmental Funds:(1,047,827) 1,047,827 (0) Business-Type Funds: Water/Sewer Utility Fund 2 (208,099) - (208,099) 3 - 1,395,293 1,395,293 Total Business-Type Funds:(208,099) 1,395,293 1,187,194 Total prior period adjustments - all funds (1,255,926) 2,443,120 1,187,194 Government-wide Financial Statements: 2 (78,141) - (78,141) 3 (1,395,293) - (1,395,293) (1,473,434) - (1,473,434) 4 (3,336,973) 75,943 (3,261,030) 5 - 557,884 557,884 (3,336,973) 633,827 (2,703,146) Total Government-wide Governmental Activities (4,810,407) 633,827 (4,176,580) Prior Period Adjustments Statement of Net Position Statement of Activities City of Pasco, Washington 2020 Comprehensive Annual Financial Report 128 1. An audit of prior years' projects discovered the source of funding was coded incorrectly. This entry decreases assets of the correct funding source and increase assets to correct effect of prior funding treatment. 2. Projects originally planned as capital in nature were determined to be maintenance projects. The value of these projects as of end of 2019 was $78,141 which was included in CWIP. It should have been a prior year expense. This adjustment decreased CWIP directly on the Statement of Net Position, see Note 5 for details. 3. Assets totaling $1,395,293 were recognized as CWIP in 2019 as governmental in nature, instead are utility assets. These were reported in CWIP in 2019. This adjustment was made directly to CWIP to decreasing the government wide net position and increased for business type. 4. An adjustment miscalculation in the composition of the government-wide statement resulted in a presentation error which omitted a liability. No fund adjustments were necessary. 5. Incorrect implementation of GASB 84 in 2019 resulted in the Cemetery Perpetual Care Fund reported as a custodial fund instead of a governmental permanent fund. City of Pasco, Washington 2020 Comprehensive Annual Financial Report 129 NOTE 18: COVID-19 PANDEMIC In February 2020, the Governor of the state of Washington declared a state of emergency in response to the spread of the deadly new virus known as COVID-19. In the months following the declaration, precautionary measures to slow the spread of the virus were ordered. These measures included closing schools, cancelling public events, limiting public and private gatherings, and restricting business operations, travel and non-essential activities. COVID-19 pandemic has impacted the City of Pasco’s finances through reduction in tourism related economic activity and revenue. However, the area has been insulated from severe economic factors due to reasonable cost of living, and well-paying and stable jobs. The area also has a diversified economy including but not limited to agriculture, wine, research, and Hanford cleanup activity. Due to these factors, the area has been able to attract other industrial businesses to further boost the local economy like Volm Companies and AutoZone in recent times. COVID-19 has been devastating to our residents, small businesses, and restaurant and hospitality industry. However, diversification of its economy and stable jobs has allowed the City to weather the crises while issuing single family home permits at a greater rate than in 2019. Visit Tri-Cities, area’s regional tourism and visitor’s association, anticipates tourism industry returning to normal operations by end of 2022. These factors are dependent on factors that the City cannot control, like vaccinations or new strains. City saw a sharp decline in tourism related revenue, however, robust increase in sales tax offset such reduction. While the City has seen its delinquency in accounts receivable increase over the past year, federal, state and local assistance is being made available to residents needing help to pay for their utilities. City anticipates some write-off, but the amount is expected to be immaterial in nature. Similarly, City does not anticipate any of its capital projects to be cancelled due to inability to continue to provide funding. City has ample reserves to continue with projects in progress. Due to the strong growth, need to maintain our service level and strong financial condition, City has continued to add more staff as planned. The City does not anticipate reduction in workforce in the near future. In conclusion, while COVID-19 pandemic has been unprecedented in nature and has impacted our City and its residents negatively, we do not at this time anticipate any substantial changes to revenues and expenditures in near future. The length of time these measures will continue to be in place, and the full extent of the financial impact on the City is unknown at this time. City of Pasco, Washington 2020 Comprehensive Annual Financial Report 130 REQUIRED SUPPLEMENTARY INFORMATION City of Pasco, Washington 2020 Comprehensive Annual Financial Report 131 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 are no future projected contributions. Schedule of Changes in Net OPEB Liability and Related Ratios – Firemen’s OPEB Plan 2017 2018 2019 2020 Total OPEB liability Service cost -$ -$ -$ -$ Interest 121,181 121,446 128,678 89,471 Changes of benefit terms - - - - Differences between expected and actual experience - 61,074 (295,126) (60,969) Changes of assumptions - - (250,033) - Benefit payments, including refunds of contributions (144,838) (90,659) (87,778) (91,040) Implicit Rate Subsidy Credit - - - - Net change in total OPEB liability (23,657) 91,861 (504,259) (62,538) Total OPEB liability - beginning 1,636,038 1,612,381 1,704,242 1,199,983 Total OPEB liability - ending 1,612,381 1,704,242 1,199,983 1,137,445 Plan fiduciary net position Net investment income 507,854 (84,994) 715,231 254,531 Contributions - employer - - - - Contributions - employee - - - - Benefit payments, including refunds of contributions (144,838) (90,659) (87,778) (91,040) Administrative expense (4,048) (2,542) (1,990) (1,990) Other - - - - Net change in plan fidiciary net position 358,968 (178,195) 625,463 161,501 Plan fiduciary net position - beginning 2,664,405 3,023,373 2,845,178 3,470,641 Plan fiduciary net position - ending 3,023,373 2,845,178 3,470,641 3,632,142 Net OPEB liability ending (1,410,992)$ (1,140,936)$ (2,270,659) (2,494,698) Plan fiduciary net position as a % of Total OPEB liability 187.5%166.9%289.2%319.3% Covered-employee payroll N/A N/A N/A N/A Net OPEB liability as a % of covered-employee payroll N/A N/A N/A N/A Notes to Schedule: Schedule of Changes in Net OPEB Liability and Related Ratios *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. Last 10 Fiscal Years* For the year ended December 31, 2020 Old Fire OPEB City of Pasco, Washington 2020 Comprehensive Annual Financial Report 132 Schedule of Investment Returns – Fireman’s OPEB Plan 2017 2018 2019 2020 Annual money-weighted rate of return, net of investment expense 19.61%-2.86%25.54%7.43% Notes to Schedule: *Until a full 10-year trend is compiled, only information for those years available is presented. Schedule of Investment Returns Old Fire OPEB For the year ended December 31, 2020 Last 10 Fiscal Years* City of Pasco, Washington 2020 Comprehensive Annual Financial Report 133 LEOFF 1 OPEB Fund Schedule of City Contributions – LEOFF 1 OPEB The Schedule of Investment Returns was not included for this plan because there are no fund assets to invest. 2017 2018 2019 2020 547,515$ 609,121$ 633,129$ 526,399$ 547,515 609,121 633,129 526,399 -$ -$ -$ -$ 152,318$ 158,030$ 168,152$ 174,458$ 359% 385% 377% 302% Entry Age Not Applicable December 31, 2020 2.00% 6.00% *Until a full 10 year trend is compiled, only information for those years avialable is presented. The City adopted GASB 75 for the fiscal year ending December 31, 2017. Actuarial Cost Method Asset Valuation Method Measurement Date Discount Rate Heathlcare Cost Trend Schedule of City Contributions LEOFF 1 OPEB For the year ended December 31, 2020 Last 10 Fiscal Years* Actuarially Determined Contribution Contribution in relation to the actuarially determined contribution Contribution deficiency (excess) Covered Payroll Contribution as a % of Covered Payroll Notes to Schedule City of Pasco, Washington 2020 Comprehensive Annual Financial Report 134 Schedule of Changes in Net OPEB Liability and Related Ratios – LEOFF 1 OPEB 2017 2018 2019 2020 Total OPEB liability Service cost 89,165$ 95,746$ 99,097$ 61,124$ Interest 556,341 557,569 560,203 330,804 Changes of benefit terms - - - - Differences between expected and actual experience - - (2,410,901) (84,229) Changes of assumptions - - (1,607,238) 956,821 Benefit payments (545,401) (609,121) (633,129) (526,399) Implicit Rate Subsidy Credit - - - Net change in total OPEB liability 100,105 44,194 (3,991,968) 738,121 Total OPEB liability - beginning 16,078,996 16,179,101 16,223,295 12,231,327 Total OPEB liability - ending 16,179,101 16,223,295 12,231,327 12,969,448 Covered-employee payroll**152,318$ 158,030$ 168,152$ 174,458$ Total OPEB liability as a % of covered-employee pay 10621.9%10266.0%7274.0%7434.1% Notes to Schedule: Schedule of Changes in Total OPEB Liability and Related Ratios LEOFF 1 OPEB For the year ended December 31, 2020 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. City of Pasco, Washington 2020 Comprehensive Annual Financial Report 135 Old Fire Pension Fund Schedule of Changes in net Pension Liability and Related Ratios – Fire Pension Plan Schedule of Employer Contributions – Fire Pension Plan Schedule of Investment Returns – Fire Pension Plan Fire Pension Fund - For Years Ended: Total Pension Liability 2015 2016 2017 2018 2019 2020 Service Cost -$ -$ -$ -$ - - Interest 82,477 79,996 77,207 87,555 75,910 85,837 Changes of benefit terms - - - - - Differences between expected and actual experience - - 79,758 (2,791) 189,364 (21,644) Changes of assumptions - - 9,808 - (2,010) - Benefit payments, including refunds of employee contributions (116,770) (118,053) (120,503) (128,399) (131,781) (111,111) Net change in total pension liability (34,293) (38,057) 46,270 (43,635) 131,483 (46,918) Total pension liability - beginning 1,220,026 1,185,733 1,147,676 1,193,946 1,150,311 1,281,794 Total pension liability - ending 1,185,733$ 1,147,676$ 1,193,946$ 1,150,311$ 1,281,794$ 1,234,876$ Plan Fiduciary Net Position Net investment income (19,689)$ 267,948$ 384,118$ (139,435)$ 515,983$ 364,053$ Contributions- employer 54,506 58,193 63,503 73,414 81,458 89,252 Contributions - employee - - - - - - Benefit payments, including refunds of employee contributions (116,770) (118,053) (120,503) (128,399) (131,781) (111,111) Administrative expense (3,398) (7,914) (5,870) (4,923) (1,689) (2,098) Net change in plan fiduciary net position (85,351) 200,174 321,248 (199,343) 463,971 340,096 Plan fiduciary net position- beginning 2,326,321 2,240,970 2,441,145 2,762,393 2,563,050 3,027,021 Plan fiduciary net position-ending 2,240,970$ 2,441,144$ 2,762,393$ 2,563,050$ 3,027,021$ 3,367,117$ Net Pension Liability City's net pension liability - Ending (1,055,237)$ (1,293,468)$ (1,568,446)$ (1,412,739)$ (1,745,227)$ (2,132,241)$ Plan fiduciary net position as a percentage of the total pension liability 189.0%212.7%231.4%222.8%236.2%272.7% 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 n/a Notes to schedule: The City adopted GASB 68 for the fiscal year ending December 31, 2015. Schedule of Changes in the City's Total Pension Liability and Related Ratios 2015 2016 2017 2018 2019 2020 Actuarially Determined Contribution (ADC)54,506$ 58,193$ 63,503$ 73,414$ 81,458$ 89,252$ Less Contributions Made (54,506) (58,193) (63,503) (73,414) (81,458) (89,252) Contribution Deficiency (excess)- - - - - - Covered-Employee Payroll -$ -$ -$ -$ -$ -$ Contributions as a percentage of covered employee payroll 0%0%0%0%0%0% Notes to Schedule: Actuarial Cost Method: Entry-age normal, level percent of pay Amortization Method: Closed period, level percent of pay Amortization Period: 20 years Inflation: 2.5% Assumed Payroll Growth: 3% Rate of Returen on Assets: 7% Mortality Rate: CalPERS Rates Retirement Rates: CalPERS Rates This schedule will be built prospectively until it contains 10 years of data Contributions came from State Fire Insurance Premiums Fire Pension Fund Schedule of Contributions 2015 2016 2017 2018 2019 2020 Annual Money Weighted Rate of Return, Net of Investment Expense -0.86%12.14%15.94%-5.10%20.34%12.07% Schedule of Investment Returns - Fire Pension Plan City of Pasco, Washington 2020 Comprehensive Annual Financial Report 136 State Plans Schedule of Proportionate Share of the Net Pension Liability – All 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 2020 Employer's percentage of the net pension liability 0.097647%0.102321%0.098322%0.099661%0.093918%0.091766%0.086902% 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$ 3,068,110$ Covered payroll 10,817,340 11,375,820 11,376,115 12,505,985 13,010,425 13,173,229 13,190,638 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%26.79%23.26% Plan fiduciary net position as a percentage of the total pension liability 61.19%59.10%57.03%61.24%63.22%67.12%68.64% PERS PLAN 2/3 Employer's percentage of the net pension liability 0.114462%0.125949%0.122675%0.126788%0.120274%0.118486%0.113176% 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 1,447,457 Covered payroll 10,474,619 11,212,390 11,878,130 12,471,204 13,008,696 13,173,229 13,190,638 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%10.97% Plan fiduciary net position as a percentage of the total pension liability 93.29%89.20%85.82%90.97%95.77%97.77%97.22% LEOFF 1 Employer's percentage of the net pension asset 0.067804%0.067488%0.066826%0.066934%0.067877%0.069031%0.069045% 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) (1,303,921) Covered payroll 219,984 207,267 226,769 197,219 162,162 163,046 182,264 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%-715.40% Plan fiduciary net position as a percentage of the total pension liability 126.91%127.36%123.74%135.96%144.42%148.78%146.88% LEOFF 2 Employer's percentage of the net pension asset 0.365709%0.405844%0.400187%0.427714%0.469232%0.492544%0.468151% 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) (9,549,597) Covered payroll 10,497,629$ 12,154,638$ 12,622,501$ 14,338,666$ 17,145,685$ 17,210,964$ 17,596,649$ 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%-54.27% Plan fiduciary net position as a percentage of the total pension liability 116.75%111.67%106.04%113.36%118.50%119.43%115.83% Schedule of Proportionate Share of the Net Pension Liability/(Asset) As of June 30 Last 10 Fiscal Years* City of Pasco, Washington 2020 Comprehensive Annual Financial Report 137 Schedule of Employer Contributions – All 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 2020 Statutorily or contractually required contributions 31,484$ 16,252$ 500,426$ 614,166$ 658,434$ 651,374$ 665,510$ Contributions in relation to the statutorily or contractually required contributions (31,484) (16,252) (500,426) (614,166) (658,434) (651,374) (665,510) Contribution deficiency (excess)- - - - - - - Covered payroll 10,817,340 11,375,820 11,376,115 12,505,985 13,010,425 12,738,991 13,572,180 Contributions as a percentage of covered payroll 0.29%0.14%4.40%4.91%5.06%5.11%4.90% PERS PLAN 2/3 Statutorily or contractually required contributions 964,775 1,140,430 649,813 850,217 999,063 1,016,896 1,099,234 Contributions in relation to the statutorily or contractually required contributions (964,775) (1,140,430) (649,813) (850,217) (999,063) (1,016,896) (1,099,234) Contribution deficiency (excess)- - - - - - - Covered payroll 10,474,619 11,212,390 11,877,299 12,471,204 13,008,696 13,173,229 13,572,180 Contributions as a percentage of covered payroll 9.21%10.17%5.47%6.82%7.68%7.72%8.10% LEOFF 2 Statutorily or contractually required contributions 549,396 635,688 660,156 763,912 937,526 909,786 965,108 Contributions in relation to the statutorily or contractually required contributions (549,396) (635,688) (660,156) (763,912) (937,526) (909,786) (965,108) Contribution deficiency (excess)- - - - - - - Covered payroll 10,497,629$ 12,154,638$ 12,622,501$ 14,338,666$ 17,145,685$ 17,210,964$ 17,895,833$ Contributions as a percentage of covered payroll 5.23%5.23%5.23%5.33%5.47%5.29%5.39% Schedue of Employer Contributions As of December 31 Last 10 Fiscal Years* City of Pasco, Washington 2020 Comprehensive Annual Financial Report 138 COMBINING AND INDIVIDUAL FUND STATEMENTS City of Pasco, Washington 2020 Comprehensive Annual Financial Report 139 This page intentionally left blank. City of Pasco, Washington 2020 Comprehensive Annual Financial Report 140 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 that only earnings, not principal, may be used for purposes that support the reporting government’s programs. City of Pasco, Washington 2020 Comprehensive Annual Financial Report 141 COMBINING BALANCE SHEET – NONMAJOR OTHER GOVERNMENTAL FUNDS Special revenue funds Debt service funds Cemetery Perpetual Care Permanent fund Total Nonmajor Governmental Funds ASSETS Cash and cash equivalents $ 25,441,166 $ 326,959 $ 130,972 $ 25,899,097 Restricted cash: Program, grant, donation 1,421,620 - - 1,421,620 Customer deposits 12,286 - - 12,286 Debt service - 194,529 - 194,529 Unspent bond proceeds 817,347 - - 817,347 Cemetery endowment - - 470,351 470,351 Investments 5,254,177 - - 5,254,177 Receivable (net of allowances) Taxes 267,340 - - 267,340 Customers 286,391 78,305 252 364,948 Interfund loans 67,708 - - 67,708 Grants 129,634 - - 129,634 Special assessments & loans 97,794 1,358,407 - 1,456,201 Due from other governments 100,000 - - 100,000 Total assets $ 33,895,463 $ 1,958,200 $ 601,575 $ 36,455,238 LIABILITIES Accounts payable 645,999 8,469 - 654,468 Interfund loans payable 225,550 895,160 - 1,120,710 Pay from restricted assets - Deposits $ 12,286 $ - $ - $ 12,286 Total liabilities 883,835 903,629 - 1,787,464 DEFERRED INFLOWS OF RESOURCES Unavailable revenue - special assessments - 1,358,407 - 1,358,407 Unavailable revenue - other 1,634,613 - - 1,634,613 Total deferred inflow of resources 1,634,613 1,358,407 - 2,993,020 Total liabilities and deferred inflows of resources 2,518,448 2,262,036 - 4,780,484 FUND BALANCES (DEFICITS) Nonspendable Cemetery permanent fund - - 601,575 601,575 Restricted Capital improvements 10,407,702 - - 10,407,702 Culture & Recreation 30,056 - - 30,056 Debt guarantee - 194,530 - 194,530 Economic development 102,359 - - 102,359 Litter & housing abatement 636,511 - - 636,511 Park development 3,426,183 - - 3,426,183 Street and boulevard 9,949,595 - - 9,949,595 Committed Special revenue funds 6,864,086 19,984 - 6,884,070 Assigned Unassigned (39,477) (518,350) - (557,827) Total fund balances (deficits) $ 31,377,015 $ (303,836) $ 601,575 $ 31,674,754 Total liabilities and fund balances (deficits) $ 33,895,463 $ 1,958,200 $ 601,575 $ 36,455,238 The notes to financial statements are an integral part of this statement. City of Pasco Combining Governmental Balance Sheet Nonmajor Governmental Funds Summary by Fund Type December 31, 2020 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 142 COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE – NONMAJOR OTHER GOVERNMENTAL FUNDS Special revenue Debt service Cemetery Perpetual Care Permanent fund Total Nonmajor Governmental Funds REVENUES Taxes $ 2,767,228 $ - $ - $ 2,767,228 Licenses and permits 292,202 - - 292,202 Intergovernmental 2,659,425 - - 2,659,425 Charges for service 7,718,735 - 40,820 7,759,555 Fines and forfeitures 219,877 - - 219,877 Investment interest 165,389 2,027 2,871 170,287 Miscellaneous 1,489,942 739,813 - 2,229,755 Total revenues 15,312,798 741,840 43,691 16,098,329 EXPENDITURES Current: Transportation 2,912,444 51 - 2,912,495 Natural & Economic environment 5,432,841 - - 5,432,841 Cultural & Community Activities 2,582,406 - - 2,582,406 Capital outlay: Transportation 9,340 - - 9,340 Natural & Economic environment 306,494 - - 306,494 Debt service: Principal retirement 45,000 - - 45,000 Interest 93,720 92,418 - 186,138 Total expenditures 11,382,245 92,469 - 11,474,714 Excess (deficiency) of revenues over expenditures 3,930,553 649,371 43,691 4,623,615 OTHER FINANCING SOURCES (USES) Insurance recoveries 254,929 - - 254,929 Sale of asset 976,521 - - 976,521 Transfers in 2,986,667 - - 2,986,667 Transfers out (5,113,293) (85,751) - (5,199,044) Total other financing sources (uses) (895,176) (85,751) - (980,927) Net change in fund balances 3,035,377 563,620 43,691 3,642,688 Fund balances - beginning 28,161,142 (867,456) 557,884 27,851,570 Prior Period Adjustment 180,496 - - 180,496 Fund balances - ending $ 31,377,015 $ (303,836) $ 601,575 $ 31,674,754 The notes to financial statements are an integral part of this statement. City of Pasco Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Governmental Funds Summary by Fund Type For the Year Ended December 31, 2020 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 143 This page intentionally left blank. City of Pasco, Washington 2020 Comprehensive Annual Financial Report 144 COMBINING BALANCE SHEET – NONMAJOR SPECIAL REVENUE FUNDS City Street Arterial Street I-182 Traffic Impact Street Overlay Community Development Block Grant ASSETS Cash and cash equivalents $ 797,409 $ 804,573 $ 1,828,510 $ 3,499,398 $ 3,825 Restricted Cash: Program, grant, donation - - 1,416,438 - - Customer deposits - - - - 1,000 Unspent bond proceeds - - - - - Investments - 194,294 382,002 963,238 - Receivables (net of allowances): Taxes 137,963 69,919 - - - Customers 4,817 - - - - Interfund loans - - - - - Grants - - - - 129,634 Special assessments & loans - - - - 97,794 Due from other governments - - - - - Total assets $ 940,189 $ 1,068,786 $ 3,626,950 $ 4,462,636 $ 232,253 LIABILITIES Accounts payable $ 90,281 $ - $ - $ 4,707 $ 32,513 Interfund loans payable - - - - - Pay from restricted assets - Deposits - - - - 1,000 Total liabilities 90,281 - - 4,707 33,513 DEFERRED INFLOWS OF RESOURCES Unavailable revenue - other - - 1,416,438 - 97,794 Total deferred inflows of resources - - 1,416,438 - 97,794 Total liabilities including deferred inflow - - 1,416,438 - 131,307 FUND BALANCES (DEFICITS) Restricted Capital improvements - - - - - Culture & Recreation - - - - - Economic development - - - - 100,946 Litter & housing abatement - - - - - Park development - - - - - Street and boulevard - 1,029,936 2,210,512 4,457,929 - Committed Special revenue funds 849,908 38,850 - - - Assigned Unassigned - - - - - Total fund balances (deficits) $ 849,908 $ 1,068,786 $ 2,210,512 $ 4,457,929 $ 100,946 Total liabilities, deferred inflows of resources and fund balances (deficits) $ 940,189 $ 1,068,786 $ 3,626,950 $ 4,462,636 $ 232,253 City of Pasco Combining Balance Sheet Nonmajor Special revenue funds December 31, 2020 The notes to financial statements are an integral part of this statement. Continued on next page City of Pasco, Washington 2020 Comprehensive Annual Financial Report 145 MLK Community Center City View Cemetery Boulevard Perpetual Maintenance Athletics Program Golf ASSETS Cash and cash equivalents $ 77,294 $ 266,219 $ 1,758,697 $ 211,295 $ 68,880 Restricted Cash: Program, grant, donation - 247 - 4,935 - Customer deposits - - - - 4,750 Unspent bond proceeds - - - - - Investments - - 424,813 - - Receivables (net of allowances): Taxes - - - - - Customers - 823 - 400 22,721 Interfund loans - - 67,708 - - Grants - - - - - Special assessments & loans - - - - - Due from other governments - - - - - Total assets $ 77,294 $ 267,289 $ 2,251,218 $ 216,630 $ 96,351 LIABILITIES Accounts payable $ 7,843 $ 27,154 $ - $ 4,330 $ 34,038 Interfund loans payable - - - - - Pay from restricted assets - Deposits - - - - 4,750 Total liabilities 7,843 27,154 - 4,330 38,788 DEFERRED INFLOWS OF RESOURCES Unavailable revenue - other - 84,142 - - 27,507 Total deferred inflows of resources - 84,142 - - 27,507 Total liabilities including deferred inflow 7,843 111,296 - 4,330 0 66,295 FUND BALANCES (DEFICITS) Restricted Capital improvements - - - - - Culture & Recreation - - - - 30,056 Economic development - - - - - Litter & housing abatement - - - - - Park development - - - - - Street and boulevard - - 2,251,218 - - Committed Special revenue funds 69,451 155,993 - 212,300 - Assigned Unassigned - - - - - Total fund balances (deficits) $ 69,451 $ 155,993 $ 2,251,218 $ 212,300 $ 30,056 Total liabilities, deferred inflows of resources and fund balances (deficits) $ 77,294 $ 267,289 $ 2,251,218 $ 216,630 $ 96,351 City of Pasco Combining Balance Sheet Nonmajor Special revenue funds The notes to financial statements are an integral part of this statement. Continued on next page December 31, 2020 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 146 Senior Center Multi Modal Facility School Impact Fees Rivershore Trail & Marina Maintenance Special Lodging Assessment ASSETS Cash and cash equivalents $ 79,793 $ 272,570 $ 206,519 $ 180,737 $ 25,401 Restricted Cash: Program, grant, donation - - - - - Customer deposits - 6,536 - - - Unspent bond proceeds - - - - - Investments - - - - - Receivables (net of allowances): Taxes - - - - 30,170 Customers - 3,362 32,900 - - Interfund loans - - - - - Grants - - - - - Special assessments & loans - - - - - Due from other governments - - - - - Total assets $ 79,793 $ 282,468 $ 239,419 $ 180,737 $ 55,571 LIABILITIES Accounts payable $ 4,385 $ 9,368 $ 182,637 $ 911 $ 54,158 Interfund loans payable - - - 225,550 - Pay from restricted assets - Deposits - 6,536 - - - Total liabilities 4,385 15,904 182,637 226,461 54,158 DEFERRED INFLOWS OF RESOURCES Unavailable revenue - other 100 5,453 - 2,554 - Total deferred inflows of resources 100 5,453 - 2,554 - Total liabilities including deferred inflow 4,485 21,357 182,637 229,015 54,158 FUND BALANCES (DEFICITS) Restricted Capital improvements - - - - - Culture & Recreation - - - - - Economic development - - - - 1,413 Litter & housing abatement - - - - - Park development - - - - - Street and boulevard - - - - - Committed Special revenue funds 75,308 261,111 - - - Assigned Unassigned - - 56,782 (48,278) - Total fund balances (deficits) $ 75,308 $ 261,111 $ 56,782 $ (48,278) $ 1,413 Total liabilities, deferred inflows of resources and fund balances (deficits) $ 79,793 $ 282,468 $ 239,419 $ 180,737 $ 55,571 Nonmajor Special revenue funds December 31, 2020 The notes to financial statements are an integral part of this statement. Continued on next page City of Pasco Combining Balance Sheet City of Pasco, Washington 2020 Comprehensive Annual Financial Report 147 Litter Abatement Revolve Abatement TRAC/HAPO Development & Operating Park Development Capital Improvements ASSETS Cash and cash equivalents $ 44,178 $ 450,235 $ 494,766 $ 2,816,955 $ 7,814,430 Restricted Cash: Program, grant, donation - - - - - Customer deposits - - - - - Unspent bond proceeds - - - - - Investments - - - 609,228 1,753,588 Receivables (net of allowances): Taxes - - - - - Customers 312 148,009 - - 22,337 Interfund loans - - - - - Grants - - - - - Special assessments & loans - - - - - Due from other governments - - 100,000 - - Total assets $ 44,490 $ 598,244 $ 594,766 $ 3,426,183 $ 9,590,355 LIABILITIES Accounts payable $ - $ 5,598 $ 70,000 $ - $ - Interfund loans payable - - - - - Pay from restricted assets - Deposits - - - - - Total liabilities - 5,598 70,000 - - DEFERRED INFLOWS OF RESOURCES Unavailable revenue - other 625 - - - - Total deferred inflows of resources 625 - - - - Total liabilities including deferred inflow 625 5,598 70,000 - - FUND BALANCES (DEFICITS) Restricted Capital improvements - - - - 9,590,355 Culture & Recreation - - - - - Economic development - - - - - Litter & housing abatement 43,865 592,646 - - - Park development - - - 3,426,183 - Street and boulevard - - - - - Committed Special revenue funds - - 524,766 - - Assigned Unassigned - - - - - Total fund balances (deficits) $ 43,865 $ 592,646 $ 524,766 $ 3,426,183 $ 9,590,355 Total liabilities, deferred inflows of resources and fund balances (deficits) $ 44,490 $ 598,244 $ 594,766 $ 3,426,183 $ 9,590,355 The notes to financial statements are an integral part of this statement. Continued on next page City of Pasco Combining Balance Sheet Nonmajor Special revenue funds December 31, 2020 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 148 Economic Development Stadium/Convention Center Hotel/Motel Excise Tax Animal Control Total Nonmajor Special revenue funds ASSETS Cash and cash equivalents $ 2,949,144 $ 706,582 $ 82,683 $ 1,073 $ 25,441,166 Restricted Cash: Program, grant, donation - - - - 1,421,620 Customer deposits - - - - 12,286 Unspent bond proceeds - 817,347 - - 817,347 Investments 927,014 - - - 5,254,177 Receivables (net of allowances): Taxes - - 29,288 - 267,340 Customers - - 28,444 22,266 286,391 Interfund loans - - - - 67,708 Grants - - - - 129,634 Special assessments & loans - - - - 97,794 Due from other governments - - - - 100,000 Total assets $ 3,876,158 $ 1,523,929 $ 140,415 $ 23,339 $ 33,895,463 LIABILITIES Accounts payable $ 41,756 $ - $ 5,000 $ 71,320 $ 645,999 Interfund loans payable - - - - 225,550 Pay from restricted assets - Deposits - - - - 12,286 Total liabilities 41,756 - 5,000 71,320 883,835 DEFERRED INFLOWS OF RESOURCES Unavailable revenue - other - - - - 1,634,613 Total deferred inflows of resources - - - - 1,634,613 Total liabilities including deferred inflow 41,756 - 5,000 71,320 2,518,448 FUND BALANCES (DEFICITS) Restricted Capital improvements - 817,347 - - 10,407,702 Culture & Recreation - - - - 30,056 Economic development - - - - 102,359 Litter & housing abatement - - - - 636,511 Park development - - - - 3,426,183 Street and boulevard - - - - 9,949,595 Committed Special revenue funds 3,834,402 706,582 135,415 - 6,864,086 Assigned Unassigned - - - (47,981) (39,477) Total fund balances (deficits) $ 3,834,402 $ 1,523,929 $ 135,415 $ (47,981) $ 31,377,015 Total liabilities, deferred inflows of resources and fund balances (deficits) $ 3,876,158 $ 1,523,929 $ 140,415 $ 23,339 $ 33,895,463 City of Pasco The notes to financial statements are an integral part of this statement. Combining Balance Sheet Nonmajor Special revenue funds December 31, 2020 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 149 This page intentionally left blank. City of Pasco, Washington 2020 Comprehensive Annual Financial Report 150 COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE – NONMAJOR SPECIAL REVENUE FUNDS City Street Arterial Street I-182 Traffic Impact Street Overlay Community Development Block Grant REVENUES Taxes $ - $ - $ - $ - $ - Licenses and permits 292,202 - - - - Intergovernmental 921,491 450,542 - - 656,475 Charges for service 477,218 - 572,175 - - Fines and forfeitures - - - - - Investment income - 4,864 9,598 23,673 - Miscellaneous 7,397 2,243 3,903 9,841 35,021 Total revenues 1,698,308 457,649 585,676 33,514 691,496 EXPENDITURES Current: Transportation 1,979,729 10,231 3,084 831,229 - Natural & Economic environment - - - - 457,306 Cultural & Community Activities - - - - - Capital outlay: Transportation 9,340 - - - - Natural & Economic environment - - - - - Debt service: Interest - - - - - Principal retirement - - - - - Total expenditures 1,989,069 10,231 3,084 831,229 457,306 Excess (deficiency) of revenues over expenditures (290,761) 447,418 582,592 (797,715) 234,190 OTHER FINANCING SOURCES (USES) Insurance recoveries - - - - - Sale of asset - - - - - Transfers in 1,359,572 10,000 - 1,039,345 - Transfers out (263,189) (201,863) (138,646) (164,491) (203,468) Total other financing sources (uses) 1,096,383 (191,863) (138,646) 874,854 (203,468) Net change in fund balances 805,622 255,555 443,946 77,139 30,722 Fund balances - beginning 5,230 919,077 1,575,019 4,347,160 70,224 Prior Period Adjustment 39,056 (105,846) 191,547 33,630 - Fund balances - ending $ 849,908 $ 1,068,786 $ 2,210,512 $ 4,457,929 $ 100,946 The notes to financial statements are an integral part of this statement. Continued on next page For the Year Ended December 31, 2020 City of Pasco Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Special revenue funds City of Pasco, Washington 2020 Comprehensive Annual Financial Report 151 MLK Community Center City View Cemetery Boulevard Perpetual Maintenance Athletics Program Golf REVENUES Taxes $ - $ - $ - $ - $ - Licenses and permits - - - - - Intergovernmental 6,801 3,891 - - - Charges for service 2,196 466,508 194,649 43,946 1,398,227 Fines and forfeitures - - - - - Investment income 612 930 10,906 1,246 379 Miscellaneous 26,756 5 9,232 3,300 301,505 Total revenues 36,365 471,334 214,787 48,492 1,700,111 EXPENDITURES Current: Transportation - - 11,622 - - Natural & Economic environment - 373,049 - - - Cultural & Community Activities 144,563 - - 83,962 1,778,307 Capital outlay: Transportation - - - - - Natural & Economic environment - - - - - Debt service: Interest - - - - - Principal retirement - - - - - Total expenditures 144,563 373,049 11,622 83,962 1,778,307 Excess (deficiency) of revenues over expenditures (108,198) 98,285 203,165 (35,470) (78,196) OTHER FINANCING SOURCES (USES) Insurance recoveries - - - - - Sale of asset - - - - - Transfers in 70,000 - - - - Transfers out - - (137,600) - - Total other financing sources (uses) 70,000 - (137,600) - - Net change in fund balances (38,198) 98,285 65,565 (35,470) (78,196) Fund balances - beginning 117,369 57,708 2,185,653 247,770 108,252 Prior Period Adjustment (9,720) - - - - Fund balances - ending $ 69,451 $ 155,993 $ 2,251,218 $ 212,300 $ 30,056 The notes to financial statements are an integral part of this statement. Continued on next page City of Pasco Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Special revenue funds For the Year Ended December 31, 2020 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 152 Senior Center Multi Modal Facility School Impact Fees Rivershore Trail & Marina Maintenance Special Lodging Assessment REVENUES Taxes $ - $ - $ - $ - $ 30,141 Licenses and permits - - - - - Intergovernmental 8,379 102,942 - - - Charges for service 2,003 - 2,706,850 - 186,106 Fines and forfeitures - - - - - Investment income 301 906 - 1,175 - Miscellaneous 4,199 84,720 - 27,188 221 Total revenues 14,882 188,568 2,706,850 28,363 216,468 EXPENDITURES Current: Transportation - 73,870 - - - Natural & Economic environment - - 2,668,994 - 216,468 Cultural & Community Activities 218,201 - - 75,352 - Capital outlay: Transportation - - - - - Natural & Economic environment - - - - - Debt service: Interest - - - 17,550 - Principal retirement - - - - - Total expenditures 218,201 73,870 2,668,994 92,902 216,468 Excess (deficiency) of revenues over expenditures (203,319) 114,698 37,856 (64,539) - OTHER FINANCING SOURCES (USES) Insurance recoveries - - - 254,929 - Sale of asset - - - - - Transfers in 234,116 - - 55,132 - Transfers out - - - - - Total other financing sources (uses) 234,116 - - 310,061 - Net change in fund balances 30,797 114,698 37,856 245,522 - Fund balances - beginning 44,511 146,413 18,926 (293,800) 1,413 Prior Period Adjustment - - - - - Fund balances - ending $ 75,308 $ 261,111 $ 56,782 $ (48,278) $ 1,413 The notes to financial statements are an integral part of this statement. Continued on next page City of Pasco Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Special revenue funds For the Year Ended December 31, 2020 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 153 Litter Abatement Revolve Abatement TRAC/HAPO Development & Operating Park Development Capital Improvements REVENUES Taxes $ - $ - $ - $ - $ 2,317,588 Licenses and permits - - - - - Intergovernmental - - - - - Charges for service 12,500 64,618 - 820,160 - Fines and forfeitures - 219,877 - - - Investment income 168 2,010 2,633 15,471 62,750 Miscellaneous - 19,194 - 6,224 17,995 Total revenues 12,668 305,699 2,633 841,855 2,398,333 EXPENDITURES Current: Transportation 2,679 - - - - Natural & Economic environment - 158,427 - - 7,526 Cultural & Community Activities - - 280,049 1,972 - Capital outlay: Transportation - - - - - Natural & Economic environment - - - - - Debt service: Interest - - - - - Principal retirement - - - - - Total expenditures 2,679 158,427 280,049 1,972 7,526 Excess (deficiency) of revenues over expenditures 9,989 147,272 (277,416) 839,883 2,390,807 OTHER FINANCING SOURCES (USES) Insurance recoveries - - - - - Sale of asset - - - - - Transfers in 5,000 - 212,127 1,375 - Transfers out - - - (442,809) (1,813,642) Total other financing sources (uses) 5,000 - 212,127 (441,434) (1,813,642) Net change in fund balances 14,989 147,272 (65,289) 398,449 577,165 Fund balances - beginning 28,876 445,374 590,055 2,997,734 9,123,369 Prior Period Adjustment - - - 30,000 (110,179) Fund balances - ending $ 43,865 $ 592,646 $ 524,766 $ 3,426,183 $ 9,590,355 The notes to financial statements are an integral part of this statement. Continued on next page City of Pasco Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Special revenue funds For the Year Ended December 31, 2020 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 154 Economic Development Stadium/Convention Center Hotel/Motel Excise Tax Animal Control Total Nonmajor Special revenue funds REVENUES Taxes $ - $ - $ 419,499 $ - $ 2,767,228 Licenses and permits - - - - 292,202 Intergovernmental 508,904 - - - 2,659,425 Charges for service - - - 771,579 7,718,735 Fines and forfeitures - - - - 219,877 Investment income 24,620 3,075 28 44 165,389 Miscellaneous 904,385 26,613 - - 1,489,942 Total revenues 1,437,909 29,688 419,527 771,623 15,312,798 EXPENDITURES Current: Transportation - - - - 2,912,444 Natural & Economic environment 556,455 13,533 176,468 804,615 5,432,841 Cultural & Community Activities - - - - 2,582,406 Capital outlay: Transportation - - - - 9,340 Natural & Economic environment 306,494 - - - 306,494 Debt service: Interest - 76,170 - - 93,720 Principal retirement - 45,000 - - 45,000 Total expenditures 862,949 134,703 176,468 804,615 11,382,245 Excess (deficiency) of revenues over expenditures 574,960 (105,015) 243,059 (32,992) 3,930,553 OTHER FINANCING SOURCES (USES) Insurance recoveries - - - - 254,929 Sale of asset 976,521 - - - 976,521 Transfers in - - - - 2,986,667 Transfers out (1,233,333) (302,124) (212,128) - (5,113,293) Total other financing sources (uses) (256,812) (302,124) (212,128) - (895,176) Net change in fund balances 318,148 (407,139) 30,931 (32,992) 3,035,377 Fund balances - beginning 3,404,246 1,931,068 104,485 (14,989) 28,161,143 Prior Period Adjustment 112,008 - - - 180,496 Fund balances - ending $ 3,834,402 $ 1,523,929 $ 135,416 $ (47,981) $ 31,377,016 The notes to financial statements are an integral part of this statement. City of Pasco Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Special revenue funds For the Year Ended December 31, 2020 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 155 COMBINING BALANCE SHEET – NONMAJOR DEB SERVICE FUNDS Local Improv. District Guaranty Local Improvement District Loans LID Bonds Total Nonmajor Debt service funds ASSETS Cash and cash equivalents $ 255,295 $ 19,984 $ 51,680 $ 326,959 Restricted Cash: Debt covenants 90,363 104,166 - 194,529 Receivables (net of allowances): Customers - 78,305 - 78,305 Special assessments & loans - 1,358,407 - 1,358,407 Total assets $ 345,658 $ 1,560,862 $ 51,680 $ 1,958,200 LIABILITIES Accounts payable $ - $ 8,469 $ - $ 8,469 Interfund loans payable - 895,160 - 895,160 Total liabilities - 903,629 - 903,629 DEFERRED INFLOWS OF RESOURCES Unavailable revenue - special assessments - 1,358,407 - 1,358,407 Total deferred inflows of resources - 1,358,407 - 1,358,407 FUND BALANCES (DEFICITS) Restricted Debt Guarantee 90,363 104,167 - 194,530 Committed Special revenue funds - 19,984 - 19,984 Assigned Unassigned 255,295 (825,325) 51,680 (518,350) Total fund balances (deficits) $ 345,658 $ (701,174) $ 51,680 $ (303,836) Total liabilities, deferred inflows of resources and fund balances (deficits) $ 345,658 $ 1,560,862 $ 51,680 $ 1,958,200 The notes to financial statements are an integral part of this statement. City of Pasco Combining Balance Sheet Nonmajor Debt service funds December 31, 2020 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 156 COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE – NONMAJOR DEBT SERVICE FUNDS Local Improv. District Guaranty Local Improvement District Loans LID Bonds Total Nonmajor Debt service funds REVENUES Investment income $ 1,749 $ 246 $ 32 $ 2,027 Miscellaneous - 732,290 7,523 739,813 Total revenues 1,749 732,536 7,555 741,840 EXPENDITURES Current: Transportation - 51 - 51 Debt service: Interest - 92,231 187 92,418 Total expenditures - 92,282 187 92,469 Excess (deficiency) of revenues over expenditures 1,749 640,254 7,368 649,371 OTHER FINANCING SOURCES (USES) Transfers out - (85,751) - (85,751) Total other financing sources (uses) - (85,751) - (85,751) Net change in fund balances 1,749 554,503 7,368 563,620 Fund balances - beginning 343,910 (1,255,678) 44,312 (867,456) Prior Period Adjustment - - - - Fund balances - ending $ 345,659 $ (701,175) $ 51,680 $ (303,836) The notes to financial statements are an integral part of this statement. City of Pasco Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Debt service funds For the Year Ended December 31, 2020 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 157 COMBINING BALANCE SHEET – NONMAJOR PERMANENT FUNDS Cemetery Perpetual ASSETS Cash and cash equivalents $ 130,972 Restricted Cash: Restricted Cemetery Endowment 470,351 Receivables (net of allowances): Customers 252 Total assets $ 601,575 LIABILITIES Total liabilities - FUND BALANCES (DEFICITS) Restricted Cemetery Endowment 601,575 Committed Assigned Total fund balances (deficits) $ 601,575 Total liabilities, deferred inflows of resources and fund balances (deficits) $ 601,575 The notes to financial statements are an integral part of this statement. City of Pasco Combining Balance Sheet Nonmajor Permanent funds December 31, 2020 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 158 COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE – NONMAJOR PERMANENT FUNDS Cemetery Perpetual REVENUES Charges for service $ 40,820 Investment income 2,871 Total revenues 43,691 EXPENDITURES Current: Capital outlay: Debt service: Total expenditures - Excess (deficiency) of revenues over expenditures 43,691 OTHER FINANCING SOURCES (USES) Total other financing sources (uses) - Net change in fund balances 43,691 Fund balances - beginning 557,884 Prior Period Adjustment - Fund balances - ending $ 601,575 The notes to financial statements are an integral part of this statement. City of Pasco Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Permanent funds For the Year Ended December 31, 2020 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 159 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE – BUDGET TO ACTUAL – MAJOR CONSTRUCTION FUND City of Pasco, Washington 2020 Comprehensive Annual Financial Report 160 SCHEDULE OF REVENUES AND EXPENDITURES – BUDGET TO ACTUAL – NONMAJOR OTHER GOVERNMENTAL FUNDS Final Budget 2019/20 Actual Variance with Final Budget Over (Under)Final Budget 2019/2020 Actual Variance with Final Budget Over (Under) Special Revenue Funds City Street Fund 5,764,248$ 5,858,351$ 94,103$ 5,078,218$ 4,908,329$ (169,889)$ Arterial Street Fund 847,694 1,079,439 231,745 1,621,636 943,053 (678,583) I-82 Traffic Impact Fund 1,110,000 1,220,941 110,941 516,584 293,549 (223,035) Street Overlay Fund 2,116,461 2,199,258 82,797 4,614,913 2,258,033 (2,356,880) Community Dev Block G 1,806,424 1,452,584 (353,840) 2,006,424 1,464,297 (542,127) ML King Community Ce 243,216 229,889 (13,327) 333,928 320,393 (13,535) City View Cemetery Fun 668,200 754,956 86,756 711,900 668,489 (43,411) Blvd Perpetual Mainten 503,263 477,766 (25,497) 298,564 297,069 (1,495) Athletic Program Fund 199,595 232,165 32,570 288,582 288,029 (553) Golf Course 3,318,000 3,516,708 198,708 3,667,382 3,585,290 (82,092) Animal Control 1,539,006 1,543,372 4,366 1,539,006 1,635,526 96,520 Senior Center Fund 452,716 536,190 83,474 505,032 498,039 (6,993) Multi-Modal Fund 382,252 377,369 (4,883) 458,805 465,959 7,154 School Impact Fees 5,970,000 5,755,350 (214,650) 6,213,000 5,698,878 (514,122) Rivershore Trail & Mari 859,200 365,375 (493,825) 389,002 161,004 (227,998) Special Lodging Assess 500,500 529,763 29,263 500,500 529,763 29,263 Litter Abatement Fund 35,100 35,523 423 30,238 13,370 (16,868) Revolving Abatement F 592,000 621,021 29,021 720,318 422,251 (298,067) TRAC Develop & Opera 556,000 429,658 (126,342) 853,344 426,069 (427,275) Park Development Fund 1,653,200 1,644,020 (9,180) 3,045,336 467,273 (2,578,063) Capital Improvement Fu 5,660,000 5,818,396 158,396 5,561,527 4,971,074 (590,453) Economic Development 4,743,200 4,686,201 (56,999) 4,273,087 3,176,900 (1,096,187) Stadium/Convention Ctr 2,228,600 2,229,392 792 2,176,222 1,337,387 (838,835) Hotel/Motel Excise tax 1,106,000 1,073,284 (32,716) 992,244 937,869 (54,375) Total 42,854,875 42,666,971 (187,904) 46,395,792 35,767,893 (10,627,899) Debt Service Funds LID Loans 5,373,721 4,090,125 (1,283,596) 5,392,656 4,725,312 667,344 LID Bonds 38,893 29,685 (9,208) 1,070 187 883 LID Guarantee 755,500 6,178 (749,322) - - - Total 6,168,114$ 4,125,988$ (2,042,126)$ 5,393,726$ 4,725,499$ 668,227$ Permanent Funds Cemetery Perpetual Care 70,340 72,169 1,829 - - - Total 70,340$ 72,169$ 1,829$ -$ -$ -$ Schedule of Revenues and Expenditures - Budget to Actual Nonmajor Other Governmental Funds For the Year Ended December 31, 2020 2019/2020 Biennial Amounts Revenues Expenditures City of Pasco, Washington 2020 Comprehensive Annual Financial Report 161 This page intentionally left blank. City of Pasco, Washington 2020 Comprehensive Annual Financial Report 162 Nonmajor Proprietary Funds Enterprise Funds Enterprise Funds are used to account for the financing of goods or services for which a fee is charged to external users for use of those good and services. The City of Pasco does not have any Nonmajor Enterprise Funds. Internal Service Funds Internal Service Funds are used to account for the financing of goods or services provided by one department to other departments of the government and to other government units on a cost reimbursement basis. City of Pasco, Washington 2020 Comprehensive Annual Financial Report 163 COMBINING STATEMENT OF NET POSITION – NONMAJOR INTERNAL SERVICE FUNDS Equipment O&M Govt Equipment Replacement Govt Med/Dental Central Stores ASSETS Current assets: Cash and cash equivalents $ 274,659 $ 7,480,277 $ 2,046,229 $ 13,449 Self-insured reserve - - 1,990,838 - Investments - 1,835,916 429,753 - Receivables - Customers 12 - - - Total current assets 274,671 9,316,193 4,466,820 13,449 Noncurrent assets: Machinery and equipment - 5,201,854 - - Construction in progress - 155,750 - - Total noncurrent assets - 5,357,604 - - Total assets 274,671 14,673,797 4,466,820 13,449 DEFERRED OUTFLOWS OF RESOURCES Pension related 39,476 - - - Total deferred outflows of resources 39,476 - - - Total assets and deferred outflows of resources $ 314,147 $ 14,673,797 $ 4,466,820 $ 13,449 LIABILITIES Current liabilities: Accounts payable 70,119 128,868 141,618 - Pension Liability 4,204 - - - Total current liabilities 74,323 128,868 141,618 - Noncurrent liabilities: Pension Liability 130,258 - - - Total noncurrent liabilities 130,258 - - - Total liabilities 204,581 128,868 141,618 - DEFERRED INFLOWS OF RESOURCES Pension Related 38,854 - - - Total deferred inflows of resources 38,854 - - - Total liabilities and deferred inflows of resources 243,435 128,868 141,618 - NET POSITION Net investment in capital assets - 5,357,604 - - Restricted for: State Law WAC - - 1,990,838 - Unrestricted 70,712 9,187,325 2,334,364 13,449 Total net position $ 70,712 $ 14,544,929 $ 4,325,202 $ 13,449 The notes to financial statements are an integral part of this statement. Governmental Activities City of Pasco Combining Statement of Net Position Nonmajor Internal service funds December 31, 2020 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 164 Equipment O&M Utility Equipment Replacement Utility Total Nonmajor Internal service funds $ 7,413 $ 3,933,998 $ 13,756,025 - - 1,990,838 - 931,954 3,197,623 - - 12 7,413 4,865,952 18,944,498 - 2,117,041 7,318,895 - - 155,750 - 2,117,041 7,474,645 7,413 6,982,993 26,419,143 - - 39,476 - - 39,476 $ 7,413 $ 6,982,993 $ 26,458,619 7,413 - 348,018 - - 4,204 7,413 - 352,222 - - 130,258 - - 130,258 7,413 - 482,480 - - 38,854 - - 38,854 7,413 - 521,334 - 2,117,041 7,474,645 - - 1,990,838 - 4,865,952 16,471,802 $ - $ 6,982,993 $ 25,937,285 Business-Type Activities City of Pasco, Washington 2020 Comprehensive Annual Financial Report 165 COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN NET POSITION – NONMAJOR INTERNAL SERVICE FUNDS Equipment O&M Govt Equipment Replacement Govt Med/Dental Central Stores OPERATING REVENUES Charges for service $ 1,416,381 $ 1,560,461 $ 6,363,256 $ - Total operating revenues 1,416,381 1,560,461 6,363,256 - OPERATING EXPENSES Depreciation - 25,667 - - Salaries & wages 424,827 - 64,022 - Personnel benefits 148,205 - 21,246 - Supplies 593,667 205,351 - - Services 356,182 - 6,468,192 - Total operating expenses 1,522,881 231,018 6,553,460 - Operating income (loss) (106,500) 1,329,443 (190,204) - NONOPERATING REVENUES (EXPENSES) Investment income 1,342 68,235 26,438 68 Miscellaneous 17,014 7,720 171,139 - Grant 11,726 - 10,157 - Insurance recoveries - - 121,242 - Sale of asset - 467,141 - - Gain (Loss) on disposal of property - (265,499) - - Total nonoperating revenues 30,082 277,597 328,976 68 Income (loss) before contributions and transfers (76,418) 1,607,040 138,772 68 Transfers out - (710,184) - - Change in net position (76,418) 896,856 138,772 68 Total net position - beginning 147,130 13,648,073 4,186,430 13,381 Prior Period Adjustment - - - - Total net position - ending $ 70,712 $ 14,544,929 $ 4,325,202 $ 13,449 The notes to financial statements are an integral part of this statement. Governmental Activities City of Pasco Combining Statement of Revenues, Expenditures, and Changes in Net Position Internal service funds For the Year Ended December 31, 2020 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 166 Equipment O&M Utility Equipment Replacement Utility Total Internal service funds $ 79,679 $ 1,075,212 $ 10,494,989 79,679 1,075,212 10,494,989 - 19,161 44,828 - - 488,849 - - 169,451 79,679 - 878,697 - - 6,824,374 79,679 19,161 8,406,199 - 1,056,051 2,088,790 - 27,443 123,526 - - 195,873 - - 21,883 - - 121,242 - - 467,141 - - (265,499) - 27,443 664,166 - 1,083,494 2,752,956 - - (710,184) - 1,083,494 2,042,772 - 5,899,499 23,894,513 - - - $ - $ 6,982,993 $ 25,937,285 Business-Type Activities City of Pasco, Washington 2020 Comprehensive Annual Financial Report 167 COMBINING STATEMENT OF CASH FLOWS – NONMAJOR INTERNAL SERVICE FUNDS Equipment O&M Govt Equipment Replacement Govt Med/Dental Central Stores CASH FLOWS FROM OPERATING ACTIVITIES Cash receipts from customers $ 1,417,873 $ 1,560,461 $ 6,363,256 $ - Payments to employees (590,934) - (84,940) - Payments to suppliers (950,671) (89,224) (6,463,730) - Net cash provided (used) by operating activities (123,732) 1,471,237 (185,414) - CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Miscellaneous 17,014 7,720 171,139 - Operating grants 11,726 - 10,157 - Insurance recoveries - - 121,242 - Net cash provided (used) by noncapital financing activities 28,740 7,720 302,538 - CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Proceeds from sale of assets - 467,141 - - Transfers in (out) - (710,184) - - Acquisition and construction of capital assets - (617,542) - - Net cash provided (used) by capital and related financing activities - (860,585) - - CASH FLOWS FROM INVESTING ACTIVITIES Investment Income - 18,756 4,391 - Investment purchases - (179,660) 96,410 - Interest on investments 1,342 49,479 22,047 68 Net cash provided (used) by investing activities 1,342 (111,425) 122,848 68 Net increase (decrease) in cash and cash equivalents (93,650) 506,947 239,972 68 Balances - beginning of year 368,309 6,973,330 3,797,095 13,381 Balances - end of the year $ 274,659 $ 7,480,277 $ 4,037,067 $ 13,449 Reconciliation of operating income (loss) to net cash provided (used) by operating activities: Operating Income $ (106,500) $ 1,329,443 $ (190,204) $ - Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation - 25,667 - - (Increase)/decrease in customer receivables 1,492 - - - Increase (decrease) in accounts payable (822) 116,127 4,463 - Increase (decrease) in salaries & benefits payable 6,950 - 327 - (Increase) decrease in pension deferred outflow 5,022 - - - Increase (decrease) in pension liability 14,636 - - - Increase (decrease) in pension deferred inflow (44,510) - - - Net cash provided (used) by operating activities $ (123,732) $ 1,471,237 $ (185,414) $ - The notes to financial statements are an integral part of this statement. City of Pasco Statement of Cash Flows Internal service funds For the Year Ended December 31, 2020 Governmental Activities City of Pasco, Washington 2020 Comprehensive Annual Financial Report 168 Equipment O&M Utility Equipment Replacement Utility Total $ 79,679 $ 1,075,212 $ 10,496,481 - - (675,874) (79,975) - (7,583,600) (296) 1,075,212 2,237,007 - - 195,873 - - 21,883 - - 121,242 - - 338,998 - - 467,141 - - (710,184) - (760,090) (1,377,632) - (760,090) (1,620,675) - 9,521 32,668 - 957,601 874,351 - 17,920 90,856 - 985,042 997,875 (296) 1,300,164 1,953,205 7,709 2,633,834 13,793,658 $ 7,413 $ 3,933,998 $ 15,746,863 $ - $ 1,056,051 2,088,790 - 19,161 44,828 - - 1,492 (296) - 119,472 - - 7,277 - - 5,022 - - 14,636 - - (44,510) $ (296) $ 1,075,212 $ 2,237,007 Business-Type Activities City of Pasco, Washington 2020 Comprehensive Annual Financial Report 169 This page intentionally left blank. City of Pasco, Washington 2020 Comprehensive Annual Financial Report 170 Trust and Custodial Funds Pension and Other Postemployment Benefit Trust Funds Pension and Other Postemployment 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 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. City of Pasco, Washington 2020 Comprehensive Annual Financial Report 171 COMBINING STATEMENT OF NET POSITION – FIDUCIARY FUNDS Firemen's Other Firemen's Post-Employment Pension Benefits ASSETS Cash 481,170$ 2,166$ Receivables Special assessments & loans 8,469 - Investments at fair market value: Federal agency 10,567 - Mutual funds 2,866,911 3,629,976 Total assets 3,367,117 3,632,142 LIABILITIES Total liabilities - - NET POSITION Held in trust for pension benefits and other purposes 3,367,117$ 3,632,142$ Combining Statement of Net Position Fiduciary Funds December 31, 2020 Trust Funds City of Pasco, Washington 2020 Comprehensive Annual Financial Report 172 COMBINING STATEMENT OF CHANGES TO NET POSITION – FIDUCIARY FUNDS Firemen's Other Firemen's Post-Employment Pension Benefits Total ADDITIONS Taxes 89,252$ -$ 89,252$ Investment earnings 320,591 191,516 512,107 Interest 3,506 146 3,652 Dividends 39,956 62,128 102,084 Total additions 453,305 253,790 707,095 DEDUCTIONS Pension benefits 111,111 - 111,111 Medical premiums - 87,540 87,540 Services 2,098 4,750 6,848 Total deductions 113,209 92,290 205,499 Change in net assets 340,096 161,500 501,596 Net position - beginning 3,027,021 3,470,642 6,497,663 Net position - ending 3,367,117$ 3,632,142$ 6,999,259$ Combining Statement of Changes to Fiduciary Funds Position For The Year Ended December 31, 2020 Trust Funds City of Pasco, Washington 2020 Comprehensive Annual Financial Report 173 COMBINING STATEMENT OF ASSETS AND LIABILITIES – CUSTODIAL FUNDS Balance Balance Balance Balance January 1 Additions Deletions December 31 January 1 Additions Deletions December 31 ASSETS Cash & cash equivalents 70,215$ 657,908$ 706,001$ 22,122$ 31,234$ 36,897$ 34,568$ 33,563$ Receivables Taxes 110,201 109,684 110,201 109,684 - - - - Total assets 180,416 767,592 816,202 131,806 31,234 36,897 34,568 33,563 LIABILITIES Accounts payable 163,708 161,487 163,708 161,487 - 2,240 - 2,240 Due to other governments - - - - - 89 - 89 Total liabilities 163,708$ 161,487$ 163,708$ 161,487$ -$ 2,329$ -$ 2,329$ Combining Statement of Changes in Assets & Liabilities Custodial Funds December 31, 2020 Pasco Public Facility District Animal Control Authority City of Pasco, Washington 2020 Comprehensive Annual Financial Report 174 COMBINING STATEMENT OF CHANGES TO NET POSITION – CUSTODIAL FUNDS Public Facility District Animal Control Authority Total Custodial Funds ADDITIONS Taxes 635,125$ -$ 635,125$ PPFD Pasco Support 20,000 - 20,000 Investment income 141 89 230 Local grants, other payments 218 34,534 34,752 Total Additions 655,484 34,623 690,107 DEDUCTIONS Services 701,873 - 701,873 Capital - 34,534 34,534 Total deductions 701,873 34,534 736,407 Change in net position (46,389) 89 (46,300) Net position - beginning 16,708 31,234 47,942 Net position - ending (29,681)$ 31,323$ 1,642$ 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, 2020 Custodial Funds City of Pasco, Washington 2020 Comprehensive Annual Financial Report 175 This page intentionally left blank. City of Pasco, Washington 2020 Comprehensive Annual Financial Report 176 STATISTICAL SECTION This part of the City of Pasco’s comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures and required supplementary information says about the government’s overall financial health. CONTENTS Financial Trends .............................................................................................................. 178 These schedules contain trend information to help the reader understand how the government’s financial performance and well-being have changed over time. Revenue Capacity ........................................................................................................... 190 These schedules contain information to help the reader assess the government’s most significant revenue sources. Debt Capacity ................................................................................................................. 202 These schedules present information to help the reader assess the affordability of the government’s current levels of outstanding debt and the government’s ability to issue additional debt in the future. Demographic and Economic Information .......................................................................... 210 These schedules offer demographic and economic indicators to help the reader understand the environment within which the government’s financial activities take place. Operating Information .................................................................................................... 216 These schedules contain service data to help the reader understand how the information in the government’s financial report relates to services the government provides and the activities it performs. Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. City of Pasco, Washington 2020 Comprehensive Annual Financial Report 177 This page intentionally left blank. City of Pasco, Washington 2020 Comprehensive Annual Financial Report 178 FINANCIAL TRENDS City of Pasco, Washington 2020 Comprehensive Annual Financial Report 179 Net Position by Component 2011 2012 2013 2014 2015 Governmental activities Net investment in capital assets 141,497$ 163,582$ 188,996$ 185,424$ 198,278$ Restricted for: Restricted *400 Cemetery (nonexpendable)418 434 455 468 Prepaids 141 Program, grant, donations 86 Contested tax & drug forefits 228 57 Bicentennial celebration 6 Streets and boulevards 6,489 7,205 7,150 6,204 Litter and housing abatement 289 329 369 354 Park development 1,739 1,821 1,994 2,135 Permit & plan check fee*** Culture and recreation 133 Capital improvement 2,259 2,976 3,733 4,802 Economic development 221 3 49 108 Pensions*** State Law WAC*** Other Postemployment Benefits*** Debt repayment guarantee 337 334 349 Special assessment debt 240 48 64 6,240 Committed for: Landfill* Special revenue funds* Red flex*** Construction projects* Assigned Future project-community center*** Unrestricted 30,166 14,616 11,883 15,934 10,433 Total governmental activities net position 172,063 190,196 214,390 215,719 229,108 Business-type activities Net investment capital assets 129,532 130,321 129,664 137,088 139,166 Restricted - 10,841 Unrestricted 12,367 14,719 19,115 4,274 15,736 Total business-type activities net positio 141,899 145,040 148,779 152,203 154,902 Primary government Net investment in capital assets 271,029 293,903 318,660 322,512 337,444 Restricted - 11,998 13,511 25,202 20,397 Committed*- - - - - Assigned *** Unrestricted 42,533 29,335 30,998 20,208 26,169 Total primary government net assets 313,562$ 335,236$ 363,169$ 367,922$ 384,010$ * Break out not available prior to 2012 ** Break out not reported prior to 2017 *** Started resticting in 2019 Fiscal Year Ended December 31 Net Position by Component Last Ten Fiscal Years (accrual basis of accounting) (amounts expressed in thousands) City of Pasco, Washington 2020 Comprehensive Annual Financial Report 180 2016 2017 2018 2019 2020 212,712$ 217,060$ 236,868$ 247,554$ 262,403$ 486 505 531 - 601 35 44 19 73 384 6,986 7,996 8,635 8,980 9,949 562 416 416 474 637 2,152 1,723 2,219 2,998 3,426 630 811 (4) 99 108 30 5,927 6,980 8,853 9,123 20,366 114 64 96 72 102 14,520 12,986 2,130 1,991 2,271 2,495 635 371 362 20,036 195 407 407 407 407 4,408 3,395 7,534 13,389 76 87 557 101 446 1,230 1,230 16,576 6,301 14,307 (9,122) 6,735 246,185 246,828 276,308 309,540 338,224 141,470 141,373 147,338 160,514 167,636 10,380 24,912 19,860 26,339 32,149 21,926 14,357 161,330 167,712 179,487 192,820 206,905 354,182 358,433 384,206 408,068 430,039 16,897 18,095 21,230 71,795 78,885 - 5,372 3,903 8,463 13,883 1,230 1,230 36,436 32,640 46,456 12,804 21,092 407,515$ 414,540$ 455,795$ 502,360$ 545,129$ City of Pasco, Washington 2020 Comprehensive Annual Financial Report 181 Changes in Net Position 2011 2012 2013 2014 2015 Expenses Governmental activities: General government 6,517$ 6,730$ 7,060$ 8,092$ 8,238$ Public safety 19,834 20,498 22,491 21,624 24,917 Transportation 9,836 9,913 14,097 16,728 16,374 Economic environment 3,698 5,799 4,456 4,710 5,137 Culture and recreation 7,695 8,224 8,003 7,941 8,115 Interest on long term debt 517 315 265 210 444 Total governmental activities expenses 48,097 51,479 56,372 59,305 63,225 Business-type activities Water 6,845 6,748 7,780 8,238 9,099 Irrigation 1,038 1,099 1,226 1,546 1,779 Sewer 7,922 7,435 7,223 7,902 8,175 Water process reuse 1,501 1,185 1,542 1,848 2,524 Storm water 959 1,028 1,165 1,288 1,168 Total business-type activities expenses 18,265 17,495 18,936 20,822 22,745 Total primary government expenses 66,362 68,974 75,308 80,127 85,970 Program revenues Governmental Activities: Charges for Services General government 1,981 2,575 4,578 5,083 5,283 Public safety 3,893 4,415 4,398 5,144 5,177 Transportation 1,795 310 3,507 4,203 3,672 National & economic environment 2,820 4,154 3,361 3,172 3,570 Culture and recreation 2,161 1,838 2,471 2,334 2,502 Operating grants and contributions 1,763 1,043 639 1,702 1,770 Capital grants and contributions 25,117 16,144 30,631 4,302 23,929 Total governmental activities program revenues 39,530 30,479 49,585 25,940 45,903 Business-type activities Charges for services 17,774 18,044 17,977 20,002 20,979 Operating grants and contributions 370 412 42 23 27 Capital grants and contributions 5,671 5,586 4,214 3,344 6,090 Total business-type activities program revenues 23,815 24,042 22,233 23,369 27,096 Total primary government program revenues 63,345$ 54,521$ 71,818$ 49,309$ 72,999$ Changes in Net Position Last Ten Fiscal Years (accrual basis of accounting) (amounts expressed in thousands) Fiscal Year Ended December 31 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 182 2016 2017 2018 2019 2020 8,716$ 7,594$ 6,950$ 9,040$ 12,457$ 29,374 30,661 32,470 31,003 40,014 16,628 17,893 18,047 11,770 20,092 5,618 6,894 6,873 7,807 8,523 8,929 9,168 9,490 5,954 7,951 504 438 421 526 1,110 69,769 72,648 74,251 66,100 90,147 9,476 10,172 10,285 14,340 11,278 1,646 1,993 1,914 1,811 1,953 8,571 8,986 9,309 (137) 8,946 3,173 2,590 2,508 3,222 5,053 1,531 1,303 1,395 1,359 1,356 24,397 25,044 25,411 20,595 28,586 94,166 97,692 99,662 86,695 118,733 4,741 4,759 6,108 8,449 4,467 6,310 8,525 8,808 11,263 12,714 3,771 2,609 2,319 3,859 3,528 6,022 6,096 6,075 10,306 6,818 2,556 2,905 3,864 3,187 2,283 1,321 1,041 1,614 1,471 11,221 25,053 14,189 31,756 7,977 29,526 49,774 40,124 60,544 46,512 70,557 23,603 25,816 28,172 29,672 32,858 11 69 1,048 8 282 7,189 5,267 7,395 4,108 6,810 30,803 31,152 36,615 33,788 39,950 80,577$ 71,276$ 97,159$ 80,300$ 110,507$ City of Pasco, Washington 2020 Comprehensive Annual Financial Report 183 2011 2012 2013 2014 2015 Net (expenses)/revenues Governmental activities ($8,567)($21,000)($6,787)($33,365)($17,322) Business-type activities 5,550 6,547 3,297 2,547 4,351 Total primary government (3,017)(14,453)(3,490)(30,818)(12,971) General revenues and other changes in net assets Governmental Activities: Taxes Property taxes 6,847 6,658 7,149 7,069 7,255 Sales and use taxes 9,403 10,284 11,472 12,695 13,646 Occupational utility taxes 8,914 8,843 8,894 9,592 10,268 Other taxes 1,838 2,046 2,117 2,290 2,443 Intergovernmental 2,599 3,161 1,566 1,581 1,741 Investment and miscellaneous 691 1,486 137 62 252 Transfers 3,439 (355)(150)- Gain on sale of asset* Total governmental activities 30,292 35,917 30,980 33,139 35,605 Business-type activities Investment and miscellaneous 177 33 88 29 103 Transfers (3,439)355 150 - Gain on sale of asset* Total business-type activities 177 (3,406)443 179 103 Total primary government 30,469 32,511 31,423 33,318 35,708 Changes in net position Governmental activities 21,725 14,917 24,193 (226)18,283 Business-type activities 5,727 3,141 3,740 2,726 4,454 Total primary government $27,452 $18,058 $27,933 $2,500 $22,737 *Reporting separate gain on sale of asset in 2019 Changes in Net Position Last Ten Fiscal Years (continued) (accrual basis of accounting) (amounts expressed in thousands) Fiscal Year Ended December 31 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 184 2016 2017 2018 2019 2020 ($19,995)($41,048)($13,707)($19,588)($19,590) 6,406 6,108 11,204 13,193 11,364 (13,589)(34,940)(2,503)(6,395)(8,226) 7,928 7,963 8,353 10,698 11,066 14,887 15,818 16,696 17,751 18,850 9,028 10,512 10,104 11,628 11,117 2,884 3,487 3,636 4,830 2,693 1,962 3,609 3,589 3,649 4,077 300 485 871 921 3,898 - (65) (78) 540 (1,233) 1,290 508 36,989 41,809 43,171 51,307 50,976 145 209 571 643 312 - 65 - (540) 1,233 85 (12) 145 274 571 188 1,533 37,134 42,083 43,742 51,495 52,509 16,994 761 29,464 31,719 31,386 6,551 6,382 11,775 13,381 12,897 $23,545 $7,143 $41,239 $45,100 $44,283 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 185 This page intentionally left blank. City of Pasco, Washington 2020 Comprehensive Annual Financial Report 186 Governmental Activities Tax Revenues by Source Fiscal Year Ended December 31 Property Taxes Sales and Use Taxes B&O Taxes Excise and Other Taxes Total Taxes 2011 6,847$ 9,403$ 8,914$ 1,838$ 27,002$ 2012 6,659 10,284 8,843 2,046 27,832 2013 7,149 11,472 8,894 2,117 29,632 2014 7,069 12,695 9,592 2,290 31,646 2015 7,255 13,646 10,268 2,443 33,612 2016 7,928 14,887 9,028 2,884 34,727 2017 7,963 15,818 10,512 3,487 37,780 2018 8,353 16,696 10,104 3,636 38,789 2019 10,698 17,751 11,628 4,830 44,907 2020 11,066$ 18,850$ 11,117$ 2,693$ 43,726$ Source: Statement of activities Prior CAFR * Also included intergovernmental revenues Governmental Activities Tax Revenues by Source Last Ten Fiscal Years (accrual basis of accounting) (amounts expressed in thousands) City of Pasco, Washington 2020 Comprehensive Annual Financial Report 187 Fund Balances of Governmental Funds 2011 2012 2013 2014 2015 General fund Assigned 3,208$ -$ -$ -$ -$ Restricted Capital improvements Debt Repayment/guarantee 4,876 Law Enforcement 228 57 Permit & plan check fees 3 Prepaids 136 Program, grant, donation 6 86 Committed Landfill claims 401 405 406 407 Red Flex 3 Assigned Subsequent year's budget appropriation 2,872 806 Future project- Community Center 4 Unassigned 8,050 6,264 5,612 7,978 11,920 Total general fund 11,258$ 9,543$ 6,245$ 9,383$ 17,289$ All other governmental funds Nonspendable Cemetery permanent fund 1 400$ 418$ 434$ 455$ 467$ Restricted 5 Capital improvements 2 2,260 2,976 3,733 4,802 Culture and recreation 132 Debt repayment/guarantee 1,364 Economic development 2 221 3 49 108 General obligation debt 2 337 334 349 Litter & housing abatement 2 288 329 369 354 Park development 2 1,739 1,822 1,995 2,135 Special assessment debt 2 240 47 64 Street and boulevard 2 6,489 7,205 7,150 6,204 Committed 5,375 Special revenue funds 1,117 2,365 2,031 3,017 Construction projects 861 199 33 238 Debt guarantee 1,033 924 926 Unassigned (178) (1,254) (1,188) (442) (400) Total all other governmental funds 5,597$ 13,749$ 15,582$ 16,717$ 18,289$ 1 Started reporting in Fiduciary funds in 2019 2 Break out not available prior to 2012 3 Started Red Flex, permit and plan fees in 2019 4 Started project Community Center Fund Balance of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) (amounts expressed in thousands) Fiscal Year Ended December 31 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 188 2016 2017 2018 2019 2020 -$ -$ -$ -$ -$ 9,959 18,572 630 811 35 44 19 73 384 407 407 407 407 407 76 87 1,858 1,230 1,230 12,333 13,118 15,365 20,263 25,874 14,633$ 13,569$ 15,791$ 41,251$ 38,752$ 486$ 505$ 531$ -$ 602$ 5,927 6,980 8,853 9,123 10,408 (4) 98 108 30 635 371 362 1,463 195 115 63 96 72 102 562 416 416 474 636 2,152 1,723 2,219 2,998 3,426 6,986 7,997 8,635 8,980 9,950 3,770 4,408 3,395 7,535 13,389 226 101 446 - (279) (130) (66) (1,521) (558) 20,580$ 22,329$ 24,640$ 29,678$ 38,180$ City of Pasco, Washington 2020 Comprehensive Annual Financial Report 189 Changes in Fund Balances of Governmental Funds 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Revenue Taxes 26,832$ 28,017$ 29,602$ 31,756$ 33,587$ 34,727$ 37,781$ 38,789$ 44,909$ 43,726$ Licenses and permits 1,874 1,862 1,777 1,983 3,389 2,516 2,576 2,947 3,340 2,889 Intergovernmental revenue 8,252 4,901 5,785 6,868 5,857 5,280 7,951 13,867 8,921 13,821 Charges for services 7,475 9,509 11,486 12,562 11,598 15,538 18,438 18,174 22,492 21,708 Fines and forfeitures 955 891 985 961 1,209 984 960 1,072 1,198 1,250 Investment**256 Miscellandous**3,316 Investment and miscellaneous**2,547 2,767 2,559 3,146 2,264 2,956 2,792 3,769 6,324 Total revenues 47,935 47,947 52,194 57,276 57,904 62,001 70,498 78,618 87,184 86,966 Expenditures Current: General government 6,087 6,381 6,705 7,720 7,940 8,567 8,839 10,041 11,388 10,810 Public safety 18,780 19,990 22,365 22,110 25,269 27,205 32,253 33,254 34,111 36,843 Transportation 2,447 2,890 3,897 6,344 5,273 4,147 4,449 4,057 5,202 5,099 Natural and economic enviroment 3,370 5,359 4,287 4,568 4,989 5,446 6,786 6,674 8,678 8,373 Culture and recreation 6,402 6,807 6,978 7,153 7,357 8,131 8,763 8,833 7,449 7,043 Capital outlay General government 154 193 1,426 506 166 206 268 424 1,276 518 Public safety 35 648 2,726 258 3,274 5,606 1,053 789 1,978 8,893 Transportation 3,276 3,141 2,994 2,852 2,203 995 4,152 8,084 7,522 802 Natural and economic enviroment 657 1,534 254 1,351 518 (23) 26 32 306 Culture and recreation 369 185 225 471 845 1,352 1,302 1,379 1,004 Debt service: Principal 1,575 3,308 1,194 675 581 1,291 807 815 830 1,330 Interest 517 316 265 210 445 504 438 421 526 1,279 Total expenditures 43,669 50,752 53,091 53,972 57,968 63,461 69,137 74,720 80,371 82,300 Excess of revenues over (under) expenditures 4,266 (2,805) (897) 3,304 (64) (1,460) 1,361 3,898 6,813 4,666 Other financing sources (uses) Insurance recoveries 111 325 Proceeds from sale of asset 227 700 1,010 67 140 1,357 977 Proceeds of general debt 4,533 8,795 18,090 Debt proceeds - Premiums 308 4,094 Transfer in 5,229 6,434 7,029 3,800 7,352 10,228 6,466 3,399 15,981 15,985 Transfer out (5,229) (6,689) (7,596) (4,343) (7,613) (10,228) (6,531) (3,477) (15,448) (16,508) Total other financing sources (uses)253 (255) (567) (316) 9,542 1,010 2 62 24,185 779 Net change in fund balances 4,519$ (3,060)$ (1,464)$ 2,988$ 9,478$ (450)$ 1,363$ 3,960$ 30,998$ 5,445$ Debt services as percentage of noncapital expenditures 5.4%7.8%3.0%1.8%1.9%3.0%1.9%1.8%1.8%3.3% Capital outlay General government 154 193 1,426 506 166 206 268 424 1,276 518 Public safety 35 648 2,726 258 3,274 5,606 1,053 789 1,978 8,893 Transportation 3,276 3,141 2,994 2,852 2,203 995 4,152 8,084 7,522 802 Natural and economic enviroment 657 1,534 254 1,351 - 518 (23) 26 32 306 Culture and recreation 369 185 - 225 471 845 1,352 1,302 1,379 1,004 Donated assets*24,450 6,917 29,252 Depreciation expense*(15,918) (5,186) (16,876) Joint venture*1,089 204 93 Prior period adjustment capital outlay (1,473) Governmental funds capital outlays as expenditures.4,491$ 5,701$ 7,400$ 5,192$ 6,114$ 8,170$ 6,802$ 20,246$ 14,122$ 22,519$ * totals not reported prior to 2018 ** totals split out in 2020 Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) (amounts expressed in thousands) Fiscal Year Ended December 31 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 190 REVENUE CAPACITY City of Pasco, Washington 2020 Comprehensive Annual Financial Report 191 Assessed Value of Taxable Property Fiscal Year Ended December Residential Property Commercial Property Other Property Total Taxable Assessed Valuation Total Direct Tax Rate 2011 2,216,469$ 582,468$ 209,591$ 3,008,528$ 2.18 2012 2,323,387 716,283 180,219 3,219,889 2.17 2013 2,433,119 731,717 165,958 3,330,794 2.16 2014 2,455,759 833,089 192,151 3,480,999 2.00 2015 2,615,824 914,211 201,939 3,731,974 1.99 2016 2,616,243 911,431 198,327 3,726,001 1.98 2017 3,158,813 1,198,038 229,222 4,586,073 1.88 2018 3,556,588 1,423,538 273,940 5,254,066 1.88 2019 4,015,768 1,540,926 292,317 5,849,011 1.88 2020 4,450,475$ 1,732,969$ 315,883$ 6,499,327$ 1.75 Source: Franklin County Assessor Real Property Assessed Value of Taxable Property Last Ten Fiscal Years (in thousands of dollars) City of Pasco, Washington 2020 Comprehensive Annual Financial Report 192 B&O Taxes by Type Fiscal Year Ended December 31 Admissions Cable TV Solid Waste Water Irrigation *Sewer Storm **Reuse **Gas Telephone Electricity Total 2011 142$ 381$ 530$ 658$ 81$ 636$ 63$ 127$ 809$ 2,034$ 3,455$ 8,916$ 2012 148 391 536 679 85 647 91 158 707 1,910 3,489 8,841 2013 157 404 512 689 89 666 97 124 525 1,711 3,465 8,439 2014 158 516 573 782 107 665 108 186 790 1,839 4,026 9,750 2015 160 532 660 809 115 680 124 191 829 1,695 4,635 10,430 2016 129 457 649 860 121 765 129 285 530 1,413 3,819 9,157 2017 122 552 764 914 138 842 134 295 794 1,361 4,707 10,623 2018 126 440 797 921 175 834 144 245 746 1,290 4,407 10,125 2019 384 543 932 1,030 178 960 167 320 905 1,187 5,406 12,012 2020 246$ 309$ 895$ 978$ 146$ 899$ 194$ 414$ 904$ 1,244$ 4,902$ 11,131$ * Previously included in Water ** Previously included in Sewer B&O Taxes by Type Last Ten Fiscal Years (in thousands of dollars) (Gross Revenues times 8 1/2% Tax Rate) City of Pasco, Washington 2020 Comprehensive Annual Financial Report 193 Property Tax Rates Fiscal Year Ended December 31 Operating millage Debt service millage Total city millage Operating millage Debt service millage Total county millage Operating millage Debt service millage Total school millage Special districts Total direct and overlapping rates 2011 1.972 0.212 2.184 1.422 0.216 1.638 4.359 2.286 6.645 0.329 10.796 2012 1.968 0.203 2.171 1.440 0.214 1.654 4.352 2.250 6.602 0.033 10.460 2013 1.967 0.197 2.164 1.508 0.201 1.709 4.455 2.207 6.662 0.329 10.864 2014 1.956 0.045 2.001 1.352 0.135 1.487 4.314 2.528 6.842 0.323 10.653 2015 1.946 0.042 1.988 1.308 0.124 1.432 4.389 2.497 6.886 0.313 10.619 2016 1.937 0.039 1.976 1.401 0.113 1.514 4.318 2.390 6.708 0.311 10.509 2017 1.880 0.000 1.880 1.327 0.099 1.426 4.271 2.252 6.523 0.295 10.124 2018 1.746 0.000 1.746 1.262 0.098 1.360 3.947 2.004 5.951 0.280 9.337 2019 1.939 0.000 1.939 1.304 0.096 1.400 1.500 2.347 3.847 0.262 7.448 2020 1.808 0.000 1.808 1.257 0.000 1.257 1.500 2.263 3.763 0.255 7.083 Source: Franklin County Assessors (Property tax booklet) 1 Overlapping rates are those of local and county governments that apply to property owners within the City of Pasco. Not all overlapping rates apply to all City of Pasco property owners whose property is located within the geographic boundaries of the special district. City of Pasco Property Tax Rates Direct and Overlapping 1 Governments Last Ten Fiscal Years Overlapping Rates School DistrictCounty City of Pasco, Washington 2020 Comprehensive Annual Financial Report 194 Taxable Retail Sales Fiscal Year Ended December 31 City of Pasco 1 Franklin County 1 2011 839,174$ 1,007,226$ 2012 861,063 1,037,096 2013 933,302 1,110,257 2014 1,016,795 1,196,017 2015 1,125,061 1,315,962 2016 1,250,473 1,428,478 2017 1,333,598 1,534,639 2018 1,412,016 1,630,212 2019 1,474,580 1,699,297 2020 2 1,671,050 1,941,106$ 1 Source: Washington State Department of Revenue Taxable Retail Sales Last Ten Fiscal Years (amounts expressed in thousands) 2 4th Qtr data was not avialable, amount was estimated based on year-to-date information. City of Pasco, Washington 2020 Comprehensive Annual Financial Report 195 Principal Property Taxpayers Taxpayer Taxable assessed value Rank Percentage of total taxable Simplot-RDO LLC 86,668$ 1 1.28% Twin City Foods, Inc.46,975 2 0.69% Kenyon Zero Storage 38,854 3 0.57% Autozone Parts Inc 38,753 4 0.57% Crossing at Chapel Hill ICG LLC 37,882 5 0.56% Syngenta Seeds LLC 32,758 6 0.48% Broadmoor LLC 30,138 7 0.44% Pasco Processing LLC 28,868 8 0.43% Columbia Villas LLC 27,831 9 0.41% Broadmoor Properties LLC 23,367 10 0.34% Syngenta Seed Inc Bybee Foods LLC BNSF Railway Co. Wal-Mart, Inc Reser's Fine Foods, Inc Skywest Airlines, Inc Conagra Foods Lamb-Weston, Inc. 392,094$ 5.77% Source: Franklin County Assessor's Office (amounts expressed in thousands) Principal Property Taxpayers Current Year and Ten Years Prior Fiscal Year Ended December 31 2020 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 196 Taxable assessed value Rank Percentage of total taxable 16,915 5 0.52% 16,085 6 0.49% 15,382 7 0.47% 27,530 2 0.85% 15,382 7 0.47% 35,329 1 1.08% 24,057 3 0.74% 18,391 4 0.56% 13,745 8 0.42% 13,553 9 0.42% 11,205 10 0.34% $190,659 5.84% 2011 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 197 This page intentionally left blank. City of Pasco, Washington 2020 Comprehensive Annual Financial Report 198 Principal B&O Taxpayers Taxpayer Tax Revenue Rank Percentag e of Total Tax Revenue Tax Revenue Rank Percentage of Total Tax Revenue Company A $3,455 1 38.75%4,849$ 1 65.27% Company B 530 4 5.94%904 2 12.17% Company C 731 2 8.20%894 3 12.03% Company D 304 4 4.09% Company F 401 5 4.50%145 5 1.96% Company M 123 10 1.38%109 6 1.46% Company Q 80 7 1.07% Company I 71 8 0.96% Company E 616 3 6.91%29 9 0.38% Company G 381 6 4.27%- 0.00% Company H 336 7 3.77%23 10 0.31% Company K 184 8 2.06%- 0.00% Company L 150 9 1.68%- 0.00% - $6,907 77.46%7,429$ 100.00% Note: Per state privacy laws the names of the companies are confidential and have been indicated instead by letter. The above information is provided to show concentration risk by company. Source: Revenue collection Principal B&O Taxpayers Current Year and Ten Years Prior Fiscal Year Ended December 31 (amounts expressed in thousands) 2011 2020 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 199 Top Ten Industries That General Sales Tax 2011 Sales % of Tax Total Industries Paid Rank Sales Tax Motor Vehicle and Parts Dealers 1,258,496$ 1 24.18% General Merchandise Stores 517,836 5 9.95% Specialty Trade Contractors 528,044 4 10.14% Construction of Buildings 254,525 9 4.89% Building Material and Garden 353,267 7 6.79% Merchant Wholesale, Durable Goods 756,776 2 14.54% Miscellaneous Store Retailers 0.00% Food Services, Drinking Places 491,780 6 9.45% Rental and Leasing Services 256,461 8 4.93% Repair and Maintenance 538,871 3 10.35% Rail Transportation 249,022 10 4.78% Total 5,205,078$ 100.00% Source: Washington State Department of Revenue *4th Qtr data was not avialable, amount was estimated based on year-to-date inform Top Ten Industries that Generate Sales Current Year and ten Years Prior Fiscal Year Ended December 31 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 200 2020 Sales % of Tax Total Paid Rank Sales Tax 499,388,445$ 1 31.00% 168,042,465 2 10.40% 167,557,306 3 10.40% 159,456,677 4 9.90% 159,308,094 5 9.90% 153,305,508 6 9.50% 115,297,182 7 7.00% 99,423,544 8 6.20% 50,893,600 9 3.20% 40,626,972 10 2.50% 0.00% 1,613,299,793$ 100% mation. s Tax City of Pasco, Washington 2020 Comprehensive Annual Financial Report 201 Property Tax Levies and Collections Fiscal Year Ended December 31 Total tax levy for fiscal year Amount Percentage of levy Collections in Subsequent years 1 Amount Percentage of levy 2011 6,638$ 6,480$ 97.6%141 6,621 99.7% 2012 6,850 6,693 97.7%154 6,847 100.0% 2013 7,011 6,833 97.5%163 6,996 99.8% 2014 7,064 6,933 98.1%75 7,008 99.2% 2015 7,287 7,169 98.4%93 7,262 99.7% 2016 7,748 7,627 98.4%107 7,734 99.8% 2017 7,949 7,932 99.8%104 8,036 100.2% 2018 8,381 8,288 98.9%100 8,388 100.1% 2019 10,667 10,558 99.0%95 10,653.0 99.9% 2020 11,064$ 11,036$ 99.7%0 $11,036 99.7% Source: Franklin County Treasurer's Office Tax Rolls 1 County provides four prior years and combines five years or more together. Total collections to date Collected within the fiscal year of the levy Property Tax Levies and Collections Last Ten Fiscal Years (amounts expressed in thousands) City of Pasco, Washington 2020 Comprehensive Annual Financial Report 202 DEBT CAPACITY City of Pasco, Washington 2020 Comprehensive Annual Financial Report 203 Ratios of Outstanding Debt by Type/Ration of General Bond Debt Outstanding Fiscal Year Ended December 31 General Obligation Bonds Special Assessments External Loans & Notes Water/ Sewer Bonds Other Loans Payable 1 Total Primary Government Percentage of Per Capita Income 2 Per Capita 3 2011 7,670$ 785$ 1,543$ 26,240$ 12,531$ 48,769$ 2.8%799 2012 4,710 395 1,258 24,260 11,067 41,690 2.2%665 2013 3,835 227 995 30,355 9,556 44,968 2.2%685 2014 3,315 208 748 28,030 7,997 40,298 1.9%595 2015 11,580 160 593 36,690 6,389 55,412 2.7%812 2016 10,430 45 12 38,438 508 49,433 2.3%701 2017 9,660 20 - 44,785 6,300 60,765 4.4%848 2018 8,865 - - 41,898 6,532 57,295 1.4%779 2019 26,125 - - 38,710 7,416 72,251 1.6%960 2020 24,795$ 51,395$ 6,884$ 83,074$ 1.7%1,088 Resources: 1 Other Loans Payble include a Public Works Trust Fund Loan & Drinking Water State Revolving Fund Loan 2 Median household income provided by World Population Review.com. 3 2020 population estimate provided by World Population Review.com. Note: Details regarding the City's outstanding debt can be found in Schedule 9 and the Debt and Liability Notes in the notes to the financial Ratios of Outstanding Debt by Type Last Ten Fiscal Years (amounts expressed in thousands, except per capita amount) Governmental Activities Business-type Activities City of Pasco, Washington 2020 Comprehensive Annual Financial Report 204 Rations of General Bond Debt Outstanding and Bonded per Capita Fiscal Year Ended December 31 General Obligation bonds Less: Amounts available in debt service fund1 Total Percentage of estimated actual taxable value of property2 Per capita 2011 7,670$ 1,487$ 6,183$ 0.2055%101 2012 4,710 1,494 3,216 0.0999%51 2013 3,835 1,325 2,510 0.0754%38 2014 3,315 1,420 1,895 0.0544%28 2015 11,580 1,459 10,121 0.2712%148 2016 10,430 - 10,430 0.2799%148 2017 9,660 - 9,660 0.2106%135 2018 8,865 - 8,865 0.1687%120 2019 26,125 - 26,125 0.4467%347 2020 24,795$ -$ 24,795$ 0.3815%325 Note: Details regarding the City's outstanding debt can be found in the notes and schedules to the financial statements. 1 Outstanding General Obligation bonds are paid by the General Fund. 2 See schedule of assessed value taxable property for property tax values. Ratios of General Bonded Debt Outstanding and Bonded per Capita Last Ten Fiscal Years (amounts expressed in thousands, except per capita amount) City of Pasco, Washington 2020 Comprehensive Annual Financial Report 205 Legal Debt Margin 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Debt limit 75,213$ 80,378$ 88,541$ 88,576$ 91,985$ 98,436$ 105,699$ 120,022$ 137,507$ 153,031$ Total net debt applicable to limit 11,670 4,966 4,053 4,063 12,174 10,442 9,660 8,865 26,125 24,795 Legal debt margin 63,543$ 75,412$ 84,488$ 84,513$ 79,811$ 87,994$ 96,039$ 111,157$ 111,382$ 128,236$ Total net debt applicable to the limit as a percentage of debt limit 15.52%6.18%4.58%4.59%13.23%10.61%9.14%7.39%19.00%16.20% Legal debt margin calculation for fiscal year 2020 2019 Assesed Valuation for 2020 Collections 3,679,413$ Non-Voted Debt Capacity Value (1.5% of Assessed Value)55,191 Less: Non-Voted GO Bonds Outstanding (11,180) Other Non-voted General Obligations Outstanding (594) (11,774) Remaining capacity without a vote 43,417 Voted and Non-Voted Debt Capacity: (2.5% of Assessed Value)91,985 Less: Voted GO Bonds Outstanding (400) Non-Voted GO Bonds Outstanding (11,180) Other Non-voted General Obligations Outstanding (594) (12,174) - Note: The total indebtedness for general purposes with or without a vote cannot exceed 2.5% of the value of taxable property. The general purposes indebtedness includes debt for capital leases without a vote. The legal limit for capital leases debt (RCW 35.42.200) is included in the 2.5 percent and does not constitute extra allowable debt. The 1.5 percent is the maxium limit for gerneral purposes without a vote (councilmanic debt). A council may choose to allocate any portion of this debt capacity to the "voted" category. If done so, this 1.5 percent of the indebtedness available without vote is to be proportionately reduced by the excess "voted" debt over 1 percent. 116,613 153,031 (24,795) 128,236$ - 91,818 24,795 6,121,230$ Legal Debt Margin Last Ten Fiscal Years (amounts expressed in thousands) Fiscal Year Ended December 31 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 206 Direct and Overlapping Governmental Activities Debt Direct debt Amount Voted General Obligation -$ Councilmanic General Obligation Debt 24,795 Total direct debt 24,795 Overlapping Debt Jurisdiction Outstanding debt Percent applicable Estimated Share of Overlapping Debt Franklin County 20,586 0.00%- Pasco School District 203,845 0.00%- Port of Pasco 29,116 0.00%- Total overlapping debt - Total direct & overlapping debt 24,795 Governmental activities debt ratios Assessed valuation- 2020 (established in November, 2019 for the 2020 tax year)6,121,230 Population 76 Net direct debt to assessed valuation 0.41% Net direct debt and overlapping debt to assessed valuation 0.41% Assessed valuation per capita 80,543 Net direct debt per capita 326 Direct debt and overlapping debt per capita 326 Councilmanic debt and other obligations: G.O. Bonds Outstanding 24,795 Other Non-voted G.O. Outstanding - 24,795$ Voted GO debt: G.O. Bonds Outstanding - -$ (1) Outstanding debt represents total general obligation debt. (2) Applicable percentage is determined by ratio of assessed valuation of property subject to taxation in the overlapping unit to valuation of property subject to taxation in the reporting unit. Direct and Overlapping Governmental Activities Debt As of December 31, 2020 (amounts expressed in thousands) City of Pasco, Washington 2020 Comprehensive Annual Financial Report 207 Waterworks Utility Debt Service Coverage 2011 2012 2013 2014 2015 2016 Operating Revenues Water Sales (1)6,797,470$ 6,989,958$ 7,087,462$ 7,594,091$ 7,971,096$ 8,293,323$ Irrigation Sales (1)874,036 917,076 954,204 1,105,076 1,188,855 1,180,488 Sewer Sales (1)5,614,564 5,705,414 5,813,572 5,914,671 6,197,706 7,030,704 Stormwater Sales (1)867,801 883,305 972,375 1,054,682 1,305,138 1,386,325 Process Water Reuse Sales (1)1,492,743 1,942,683 1,453,597 1,997,655 2,053,639 3,063,034 Other Utility Charges (2)1,907,123 1,711,031 1,935,286 2,347,236 2,072,899 2,541,924 Total Operating Revenues 17,553,737 18,149,467 18,216,496 20,013,411 20,789,333 23,495,798 Operating & Maintenance Expenses Salaries & Wages 2,535,882 2,461,588 2,599,431 2,830,832 3,016,535 3,097,784 Personnel Benefits (3)913,062 952,672 1,114,349 1,330,549 1,403,036 2,255,786 Supplies 1,092,728 855,626 1,121,916 1,492,845 1,633,374 1,556,387 Services (1)5,193,430 5,293,094 5,749,161 5,890,538 7,010,663 7,445,805 Total Operating Expenses 9,735,102 9,562,980 10,584,857 11,544,764 13,063,608 14,355,762 Operating Income 7,818,635 8,586,487 7,631,639 8,468,647 7,725,725 9,140,036 Non-Operating Revenue Interest Income 116,848 39,607 41,009 15,685 28,310 48,536 Misc Income - - - - - - Net Farmland Rental (4)498,413 - - - - - Total Non-Operating Revenues (5)615,261 39,607 41,009 15,685 28,310 48,536 Net Revenues before Assessments 8,433,896 8,626,094 7,672,648 8,484,332 7,754,035 9,188,572 Special Assessment Repayments 283,861 225,506 257,366 123,404 94,284 52,673 Net Revenue for Debt Service Payment 8,717,757 8,851,600 7,930,014 8,607,736 7,848,319 9,241,245 Bond Debt Service (6)3,064,870 3,105,433 2,975,754 3,550,920 2,767,541 3,142,209 Debt Service Coverage (7)2.84 2.85 2.66 2.42 2.84 2.94 Balance Available for Other Purposes 5,652,887$ 5,746,167$ 4,954,260$ 5,056,816$ 5,080,778$ 6,099,036$ Notes: (1) Excludes revenue raised and used to pay interfund city taxes. (3) In 2018, the pension accrual entry resulted in a negative expense making the personnel benefits total lower than reported in the pas (4) Farm assets sold in 2011. (5) Excludes noncash capital contributions, gains/losses, capital grants, etc. (6) Excludes debt for prepaid maturities. (7) Bond convenant requires coverage ratio of 1.25 times Maximum Annual Debt Service Waterworks Utility Debt Service Coverage (Per Bond Official Statement Definitions) (2) Includes one time fees such as new connection, new meter, capital facility, penalties, operating grants, etc. Beginning in 2018, the c City of Pasco, Washington 2020 Comprehensive Annual Financial Report 208 2017 2018 2019 2020 8,712,335$ 9,484,909$ 9,960,584$ 10,639,412$ 1,320,669 1,388,616 1,516,420 1,656,949 7,890,524 8,443,300 8,915,763 9,405,342 3,291,049 3,549,788 3,522,920 5,194,726 1,441,274 1,690,190 1,811,771 1,936,366 825,842 1,088,528 1,265,165 1,074,733 23,481,693 25,645,331 26,992,622 29,907,528 3,461,414 3,336,849 3,827,189 3,984,669 1,636,421 883,142 1,607,406 1,414,194 1,839,792 1,991,868 1,627,982 2,119,290 7,565,547 8,179,595 8,121,300 10,707,922 14,503,174 14,391,454 15,183,877 18,226,075 13,007,723 11,253,877 11,808,745 11,681,453 94,215 413,342 538,452 235,648 - 120,582 50,973 54,959 - - 94,215 533,924 589,425 290,607 13,101,938 11,787,801 12,398,170 11,972,060 99,775 36,689 24,254 12,564 13,201,713 11,824,490 12,422,424 11,984,624 3,452,150 3,177,081 3,436,107 4,176,102 3.82 3.72 3.62 2.87 9,749,563$ 8,647,409$ 8,986,317$ 8,986,317$ ast. capital facility revenues are excluded from this calculation. 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City of Pasco, Washington 2020 Comprehensive Annual Financial Report 210 DEMOGRAPHIC AND ECONOMIC INFORMATION City of Pasco, Washington 2020 Comprehensive Annual Financial Report 211 Demographic and Economic Statistics Pasco Fiscal Year Ended December 31 Population 1 Population 5 Kennewick- Richand MSA Unemploymen t rate 1, 3, 6 Population 1 Per capita personal income 1 2011 61,000 184,755 7.92%80,500 31,975 2012 62,670 187,720 8.73%82,500 30,169 2013 65,600 193,160 9.10%84,800 30,534 2014 67,770 197,560 7.70%86,600 32,831 2015 68,240 199,610 6.80%87,150 33,955 2016 70,560 203,090 6.90%88,670 32,999 2017 71,680 206,110 5.70%90,330 36,666 2018 73,013 210,183 6.50%92,540 37,836 2019 74,846 215,599 5.90%94,680 39,526 2020 77,326 224,584 6.70%96,441 Not Available Fiscal Year Ended December 31 Average wage per job 1 , 3 Unemploymen t rate 1, 3, 6 Population 1 Per capita personal income 1 , 3 2011 51,139 9.20%6,767,900 47,133 2012 52,945 8.20%6,817,770 48,270 2013 53,334 7.00%6,882,400 47,898 2014 55,427 6.10%6,968,170 49,513 2015 57,057 5.70%7,061,410 51,410 2016 58,977 5.40%7,183,700 51,795 2017 53,470 4.40%7,310,300 52,783 2018 54,689 4.5%7,427,570 53,712 2019 69,700 4.3%7,546,410 64,898 2020 N/A 7.8%7,656,200 64,898 SOURCES: 1 State of Washington Office of Financial Management. Per capita income not available for 2020 2 Pasco School District (October Enrollment). Office of Financial management October Headcount Enrollment 3 Unemployment Data from the U. S. Bureau of Labor Statistics 4 data.census.gov 5 worlpopulationreview.com 6 Unemployment Rate as of Sept 2020 esd.wa.gov Demographic and Economic Statis Last Ten Fiscal Years Tri Cities State City of Pasco, Washington 2020 Comprehensive Annual Financial Report 212 Total Personal Income 1 (in thousands) Median household income 1 Median household age 1 School enrollment 2 Not Available 53,644 28.53 16,143 2,488,943 56,221 Not Available 15,994 2,589,283 57,196 29.14 16,612 Not Available 58,538 29.71 17,016 Not Available 57,664 29.10 17,353 Not Available 58,854 29.30 17,780 Not Available 57,535 29.90 19,932 Not Available 68,179 30 20,617 Not Available 66,735 29.30 21,433 Not Available 62,002 30.00 20,837 Total Personal Income 3 (in thousands) Median household income 1 School enrollment K-12 2 318,991,431 55,500 1,037,676 329,093,758 56,444 1,040,631 329,653,195 57,554 1,047,353 345,015,001 58,686 1,057,388 363,027,088 62,108 1,067,998 372,079,742 65,500 1,080,027 385,859,565 68,550 1,104,039 398,949,640 73,294 1,138,071 489,746,916 78,687 1,147,573 496,872,068 74,073 1,095,125 stics Franklin County City of Pasco, Washington 2020 Comprehensive Annual Financial Report 213 Principal Employers Employees Industry Rank Employees Industry Rank Battelle/PNNL Research and Development 4,700 Research & Development 1 Kadlec Medical Center 2,175 Health Services 5 3,674 Health Services 2 ConAgra (Lamb Weston)3,057 Food processing 3 3,000 Food processing 3 Bechtel National 2,850 Government 4 1,450 Government 10 Kennewick School District Education 3,000 Education 4 Washington River Protection 1,686 Government 6 2,971 Government 5 Pasco School District Education 2,288 Education 6 Mission Support Alliance 1,478 Government 7 2,240 Government 7 CH2M Hill 3,260 Government 2 1,688 Government 9 Richland School District Education 1,900 Education 8 URS 3,500 Government 1 Government Washington Closure Hanford 1,370 Government 8 Government Tyson Foods 1,300 Agriculture Products 9 Agriculture Products Energy Northwest 1,222 Research and Development 10 Source: TRIDEC and Representatives from the employers Employer Employees Industry Rank Employees Industry Rank Lamb Weston 3,000 Food processor 1 Pasco School District 2,065 Education 1 2,288 K-12 2 Columbia Basin College 766 Community College 3 635 Community College 6 Lourdes Health Network 807 Health Care 2 837 Health Care 4 Coyote Ridge Correction Facility 775 Correction Facility 5 Pasco Processing 350 Food processor-vegetables 5 876 Food processor-vegetables 3 Walmart 374 Retail 8 City of Pasco 305 City Services 6 364 City Services 9 Douglas Fruit 210 Fruit packaging 8 346 Fruit packaging 10 Tri-City Community Health 230 Health Care 7 380 Health Care 7 Boise Cascade 574 Paper & packaging products 4 Franklin County 190 County services 9 West Communications 180 Call service 10 Source: TRIDEC and Representatives from the employers Principal Employers Current Year & 9 years prior Year Ended December 31 2020 2020 Tri Cities* Franklin County* *The Tri-Cities are three closely tied cities which include Pasco, Kennewick and Richland. Each city borders one-another, making the Tri-Cities seem like one uninterrupted mid-sized city. Due to this, many employers overlap among the three cities. 2012 2012 *Pasco is the county seat of Franklin County and the largest city within the county, making up approximately 70 percent of the county's population. Many employers have locations in Pasco and throughout the county. City of Pasco, Washington 2020 Comprehensive Annual Financial Report 214 Non-Agriculture Wage and Salary Workers Employment Sector 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Goods Producing 13,600 13,400 13,600 1,400 14,600 14,900 16,600 17,300 18,200 18,800 Natural resources & construction 6,500 6,000 6,200 6,300 6,700 7,200 8,600 9,500 9,600 10,800 Manufacturing 7,100 7,400 7,400 7,700 7,900 7,700 8,000 7,800 8,600 8,000 Service providing 90,300 87,900 88,100 89,700 92,700 96,200 99,700 99,100 101,900 99,900 Private services providing 72,200 69,800 69,800 71,100 73,700 76,100 76,000 78,900 81,400 81,800 Trade, transportation, warehousing & utilities 16,700 17,100 17,500 18,100 19,100 20,100 25,800 20,100 20,600 20,200 Retail trade 11,500 11,700 11,800 12,100 12,700 13,900 13,200 13,700 14,100 14,500 Financial activities 3,700 3,900 4,200 3,900 4,000 3,900 3,900 4,200 4,300 4,000 Professional & business services 24,900 21,800 20,800 20,700 21,200 21,200 21,400 21,400 22,200 23,400 Information 900 800 800 800 900 900 900 700 800 800 Administrative & support services 12,200 10,600 10,500 10,400 10,800 11,700 11,200 11,900 12,500 12,900 Education & health services 13,300 13,400 13,700 14,400 14,800 15,400 15,500 17,000 17,600 18,000 Leisure and hospitality 9,400 9,500 9,600 9,900 10,400 11,200 11,300 11,800 12,200 12,100 Food services 6,800 6,900 7,000 7,300 7,600 8,400 8,600 9,000 9,200 7,000 Government 18,100 18,200 18,300 18,600 19,000 20,100 20,100 20,200 20,500 18,100 Federal & State government 4,200 4,200 4,300 4,300 4,300 4,400 4,400 1,200 1,300 4,200 Local government 13,900 13,900 14,100 14,300 14,700 15,700 15,700 16,100 16,200 13,900 Total Non-Agriculture 103,900 101,300 101,700 103,700 107,300 111,100 112,700 117,300 121,000 118,700 Total Private 85,900 83,100 83,400 85,100 88,300 91,000 92,600 96,200 99,600 100,600 Non-Agriculture Wage and Salary Workers Employed in Kennewick-Richland-Pasco* MSA (rounded to hundreds) (1) Last Ten Fiscal Years (1) Detail may not add to indicated total due to rounding. Excludes proprietors, agriculture, self-employed, unpaid family, domestic workers and military. Includes all full and part-time wage and salary workers receiving pay during the period including the 12th of the month by place of work. Information for 2008 is from Washington State Employment Security Department (using BLS data). All subsequent data (2009 and forward) is directly from the U. S. Bureau of Labor Statistics (BLS) and not seasonally adjusted. *The Tri-Cities are three closely tied cities which include Pasco, Kennewick and Richland. Each city borders one-another, making the Tri-Cities seem like one uninterrupted mid-sized city. Due to this, many employers overlap among the three cities. City of Pasco, Washington 2020 Comprehensive Annual Financial Report 215 Building Permits Fiscal Year Ended December 31 New Single Family Permit s New Single Family Value Total Permits Total Value Permits Value Permits Value Permit s Value 2011 492 105,577$ 1,817 113,320$ 289 16,591$ 28 3,519$ 2,134 133,430$ 2012 338 72,768 1,507 85,314 328 30,317 54 26,360 1,889 141,991 2013 220 50,396 1,705 73,701 364 44,173 44 6,862 2,113 124,736 2014 223 53,923 1,517 67,408 297 58,575 74 37,832 1,888 163,815 2015 248 62,949 1,724 83,033 317 48,618 98 36,291 2,139 167,942 2016 389 94,956 387 110,833 368 53,880 111 90,563 866 255,276 2017 474 119,754 2,618 134,519 421 56,276 80 10,034 3,119 200,829 2018 489 128,271 2,690 143,335 425 47,140 73 29,588 3,188 220,063 2019 588 154,803 2,755 169,400 424 88,716 61 9,755 2,755 267,871 2020 539 135,138$ 2,930 152,467$ 370 49,482$ 66 82,689$ 3,366 284,638$ SOURCE: 1 City of Pasco website Building Permit History. *Includes single family and mobile home TotalCommercialResidental *Industrial Building Permits Last Ten Fiscal Years ($ amounts expressed in thousands) City of Pasco, Washington 2020 Comprehensive Annual Financial Report 216 OPERATING INFORMATION City of Pasco, Washington 2020 Comprehensive Annual Financial Report 217 Full Time Equivalent City Government Employees by Function Function 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 General government 45 45 45 49 50 52 54 53 53 53 Public safety Muni Court 16 16 16 15 15 15 15 15 15 15 Police Officers 67 67 71 71 71 77 77 81 83 83 Civilians 12 12 12 12 12 10 10 10 9 9 Fire Firefighters and officers 33 33 35 35 39 35 36 39 39 39 Ambulance 18 19 19 19 19 28 36 40 40 40 Physical enviroment Utilities Water 22 21 20 20 22 24 22 22 22 22 Sewer 18 17 18 19 21 20 20 19 19 19 Water process reuse 2 2 3 2 2 3 7 7 7 7 Storm water 5 5 4 5 6 6 8 8 9 9 Irrigation 2 2 2 4 4 5 3 3 3 3 Transportation Highways and streets Engineering 13 14 16 17 17 17 17 17 17 17 Maintenance 7 7 6 7 8 10 10 10 9 9 Health and human services 2 3 3 3 3 3 3 3 3 3 Economic enviroment 15 15 15 16 16 16 16 16 16 16 Culture and recreation 16 16 16 16 17 20 20 19 19 19 Total 293 294 301 310 322 341 354 362 363 363 Source: Annual Operating Budget Full-Time Equivalent City Government Employees by Function Last Ten Fiscal Years Fiscal Year Ended December 31 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 218 Operating Indicators by Function 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Function Public Safety Police Violent crime 202 178 151 183 156 146 143 166 188 197 Nonviolent crime 1,609 1,711 1,628 1,516 1,482 1,689 1,432 1,280 1,382 1,300 Calls for service 49,819 52,027 54,996 52,067 49,575 55,407 57,250 66,815 40,453 36,728 Victims per 1000 population 30 30 27 40 25 38 20 19 21 20 Fire & Emergency Medical Service Number of emergency response-FIRE 277 260 279 241 281 243 289 313 204 186 % of total incidents-FIRE*7%6%6%5%6%5%5%5%4%3% Number of emergency response-EMS 3,337 3,474 3,394 3,731 4,011 3,960 4,105 4,192 4,039 4,424 % of total incidents-EMS*79%79%79%79%79%77%75%74%78%78% Number of emergency response-OTHER*614 662 658 730 805 914 1,116 1,186 941 1,088 % of total incidents- OTHER*15%15%15%16%16%18%20%21%18%19% Community Development Number of new Single Family units 483 314 204 219 243 387 468 485 585 525 Number of new Muli Family units 1 16 0 8 0 0 1 1 3 0 Number of new Manufactured units 9 21 16 4 5 2 6 4 3 14 Commercial permits 317 382 408 341 415 479 501 498 485 436 Construction value (millions)20.1 56.7 51.0 96.4 84.9 144.4 66.3 76.7 98.5 132.2 Residential permits 1,817 1,507 1,705 1,517 1,724 1,941 2,115 2,188 2,270 2,480 Construction value (millions)113.3 85.3 73.7 67.4 83.0 110.8 134.5 143.3 169.1 151.4 Physical environment Highway and streets Street resurfacing (miles)*4.6 3.50 3.57 9.63 0.00 0.00 0.00 3.9 0.0 Utilities Water Bills processed 207,685 217,911 226,934 227,682 233,858 239,670 242,916 248,347 274,138 263,115 New connections 571 449 328 340 438 568 672 589 724 584 Water meters replaced 1,900 2,640 1,431 1,471 1,499 1,117 187 146 39 41 Source: Various City of Pasco departments. Operating Indicators by Function Last Ten fiscal years Year Ended December 31 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 219 Building Permits Amounts Amounts No. of Permits in Thousands in Millions Commercial 370 49,482$ 50$ Less Multi-Family - - - Industrial 66 82,689 83 436 132,171 132 Mobile Home 14 1,074 1 Plus Commercial Multi Family - - - Residential 2,480 151,393 151 2,494 152,467 152 Total 2,930 284,638 284 Single Family: SFDU 525 134,064 134 Mobile Home 14 1,074 1 Total 539 135,138$ 135 Building Permits City of Pasco Year ended December 31, 2020 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 220 Capital Used by Function 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Function Public Safety Police Stations 1 1 1 1 1 1 1 1 1 1 Police Sub-Stations 4 4 4 4 4 4 4 4 4 4 Patrol units 50 52 53 58 39 54 61 64 66 66 Fire stations 3 3 3 3 3 3 3 3 4 4 Culture and recreation Parks *27 27 27 27 21 24 28 28 28 28 Parks acreage *274 280 280 320 323 329 375 28 388 388 Swimming pools 3 3 3 2 2 2 2 2 2 2 Physical environment Streets Street (miles)781 821 823 839 843 669 675 665 738 750 Street lights 3,374 3,449 3,469 3,476 3,532 3,413 3,505 4,369 4,315 4,567 Traffic signals *49 50 50 50 50 50 51 51 52 52 Water Water mains (miles)309 313 314 315 323 310 323 360 414 419 Services (accumulated total)16,305 16,660 16,754 16,783 17,206 17,248 20,079 21,708 22,874 23,164 Fire hydrants 2,069 2,106 2,114 2,138 2,214 2,190 2,724 2,836 2,906 3,015 Maximum daily capacity Million Gallons per Day (MGD)33 30 30 30 32 33 33 33 33 33 Sewer Sanitary sewer (miles)226 264 265 266 269 269.89 275.06 256 261.5 266 Maximum daily treatment capacity (MGD) 7.1 7.1 7.1 7.1 6.5 6.5 6.5 6.5 6.5 6.5 Average daily treatment (MGD) *4.0 4.1 4.3 4.5 5.0 5.2 5.4 5.4 5.2 5.3 Water Process Reuse Irrigated acres 1,848 1,848 1,848 1,848 1,848 1,832 1,856 1,856 2,277 1,856 Total Acres 2,200 2,200 2,200 2,200 2,200 2,200 2,200 2,200 2,360 2,368 Storm Water Storm sewer (miles)43 45 46 47 48 49 51 88 96 98 Number of catch basins 3,176 3,289 3,322 3,336 3,451 3,508 3,705 5,163 5,333 5,567 Irrigation Irrigation mains (miles) 84 90 95 96 101 101 127 154 168 174 Maximum daily capacity (thousand of gallons) 17,100 17,100 17,100 20,760 20,760 20,760 32,760 21,013 21,013 21,013 Sources: Various government departments. Capital Used by Function Last Ten Fiscal Years Fiscal Year Ended December 31 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 221 Waterworks Utility Customers 2011 2012 2013 2014 2015 Water System Accounts by Class Single Family Residential 15,204 15,612 15,792 15,969 16,355 Multi-Family Residential 463 468 470 482 496 Commercial 1,296 1,321 1,421 1,372 1,430 Other 4,047 422 452 455 476 Total 21,010 17,823 18,135 18,278 18,757 Sewer System Accounts by Class Single Family Residential 13,373 13,746 13,949 14,133 14,450 Multi-Family Residential 449 454 470 497 512 Commercial 949 969 987 1,004 1,125 Total 14,771 15,169 15,406 15,634 16,087 Stormwater System Customer Accounts 16,329 16,718 17,580 17,781 18,585 Irrigation System Customer Accounts 5,176 5,435 5,668 6,604 6,863 Process Water Reuse Facility Customers Pasco Processing 50%46%46%41%42% Twin City Foods 16%21%19%22%23% CRF Frozen Foods-Bybee Food 17%15%21%19%19% Reser's Fine Food 17%18%14%18%16% 100%100%100%100%100% Source: City of Pasco billing systems. Waterworks Utility Customer Account Last Ten Fiscal Years For the Month of August Percent of Total Ann City of Pasco, Washington 2020 Comprehensive Annual Financial Report 222 2016 2017 2018 2019 2020 16,687 17,471 18,035 18,723 19,054 505 491 496 499 497 1,443 1,470 1,524 1,528 1,555 486 426 441 429 524 19,121 19,858 20,496 21,179 21,630 14,904 15,405 15,870 16,502 16,792 527 524 533 533 531 1,128 1,137 1,183 1,177 1,203 16,559 17,066 17,586 18,212 18,526 18,585 19,445 19,697 20,652 20,941 6,863 7,495 7,956 8,355 8,634 44%47%41%45%49% 26%29%19%20%18% 15%1%17%13%19% 15%23%23%22%14% 100%100%100%100%100% nts nnual Billed Revenue City of Pasco, Washington 2020 Comprehensive Annual Financial Report 223 Waterworks Utility Rates 2011 2012 2013 2014 2015 Water rates and monthly charges Inside city rates listed; outside city 90% surcharge Consumption per 100 cu feet 0.65$ 0.65$ 0.68$ 0.68$ 0.70$ Single family residential monthly base (in city) Size of Service 3/4 inch 12.50 12.50 12.50 16.25 16.25 1 inch 18.74 18.74 18.74 24.35 24.35 Multi-family and commercial monthly base Size of Service 3/4 inch 17.61 17.61 17.61 22.90 22.90 1 inch 25.43 25.43 25.43 33.05 33.05 1 1/2 inch 49.61 49.61 49.61 64.50 64.50 2 inch 79.59 79.59 79.59 103.45 103.45 3 inch 108.69 108.69 108.69 141.30 141.30 4 inch 156.60 156.60 156.60 203.60 203.60 6 inch 244.46 244.46 244.46 317.80 317.80 8 inch 338.77 338.77 338.77 440.40 440.40 Irrigation monthly charge Base per residential unit 26.00 26.00 26.00 26.00 26.00 Per Irrigation unit 8.12 8.12 8.12 8.12 8.12 Per Irrigated acre 75.81 75.81 75.81 75.81 75.81 Sewer rates and monthly charges Inside city rates listed; outside city 50% surcharge Residential monthly base <= 4 units 24.80 24.80 24.80 24.80 24.80 Residential monthly base > 4 units 20.00 20.00 20.00 20.00 20.00 No residential consumption charge 8.30 Commercial base rate 33.35 33.35 33.35 33.35 33.35 Consumption per 100 cu ft over 1000 cu ft 1.29 1.29 1.29 5.25 1.29 Stormwater monthly charge Residential Single family residential 3.00 3.90 3.90 4.40 4.90 Apartments (per unit)3.00 1.95 1.95 2.20 2.45 Multi-family residential (per unit)1.50 1.95 1.95 2.20 2.45 Undeveloped parcels - - - - - Vacant buildings 3.00 3.90 3.90 4.40 4.90 Industrial/Commercial Parking for 0-5 vehicles 3.00 3.90 3.90 4.40 4.90 Parking for 6-10 vehicles 6.00 7.80 7.80 8.80 9.80 Parking for 11-15 vehicles 9.00 15.60 15.60 13.20 14.70 Parking for 16 plus vehicles 12.00 19.50 19.50 17.60 19.60 Additional charges Property runoff to City systems ($1.25 min) 66.70 86.71 86.71 86.71 86.71 State Highway right-of-way - acre 16.68$ 21.71$ 21.71$ 21.71$ 21.71$ Source: City of Pasco Municipal Code Title 3 Waterworks Selected Utility Rates Last Ten Fiscal Years City of Pasco, Washington 2020 Comprehensive Annual Financial Report 224 2016 2017 2018 2019 2020 0.74$ 0.77$ 0.81$ 0.83$ 0.85$ 17.06 17.92 18.81 19.37 19.96 25.57 26.85 28.19 29.04 29.91 24.05 25.25 26.51 27.31 28.13 35.18 36.93 38.78 39.94 41.14 67.73 71.11 74.67 76.91 79.22 108.62 114.05 119.76 123.35 127.05 148.37 155.78 163.57 168.48 173.53 213.78 224.47 235.69 242.76 250.04 333.69 350.37 367.89 378.93 390.30 462.42 485.54 509.82 525.12 540.87 26.00 27.30 28.12 28.96 29.83 8.12 8.53 8.79 9.05 9.32 75.81 79.60 81.99 84.45 86.98 27.22 29.67 31.45 32.71 34.02 21.95 23.93 25.36 26.37 27.43 36.60 39.90 42.29 43.98 45.74 1.42 1.54 1.64 1.71 1.78 4.90 4.90 5.64 5.92 6.21 2.45 2.45 2.82 2.96 3.11 2.45 2.45 2.82 2.96 3.11 - 4.90 4.90 5.64 5.92 6.52 4.90 4.90 5.64 5.92 6.52 9.80 9.80 11.27 11.83 13.04 14.70 14.70 22.54 23.67 19.56 19.60 19.60 28.18 29.58 32.60 86.71 86.71 111.16 116.72 122.55 21.71$ 21.71$ 26.97$ 28.32$ 29.73$ City of Pasco, Washington 2020 Comprehensive Annual Financial Report 225 SACAJAWEA HISTORICAL STATE PARK City of Pasco, Washington 2020 Comprehensive Annual Financial Report 226 STATE REQUIRED SCHEDULES City of Pasco, Washington 2020 Comprehensive Annual Financial Report 227 SCHEDULE 9 – SCHEDULE OF LONG-TERM LIABILITIES Schedule 9 -Schedule of Liabilities For the Year Ended December 31, 2020 ID No.Debt Type Description Due Date Beginning Balance Additions Reductions Ending Balance GENERAL OBLIGATIONS 251.11 Councilmanic 2011 LTGO Refund 2001 LTGO 12/01/2020 510,000 - 510,000 - 251.11 Councilmanic 2019 LTGO Fire Station No. 83 & No. 84 12/01/2049 14,800,000 - 380,000 14,420,000 251.11 Councilmanic 2019 LTGO Gesa Stadium 12/01/2049 1,645,000 - 45,000 1,600,000 251.11 Councilmanic 2019 LTGO Animal Shelter 12/01/2049 1,645,000 - 45,000 1,600,000 251.11 Councilmanic 2015 LTGO Police Station 12/01/2035 7,525,000 - 350,000 7,175,000 26,125,000 - 1,330,000 24,795,000 REVENUE OBLIGATIONS 252.11 Revenue Bond 2009 Revenue Water Sewer Bond1 11/01/2029 5,515,000 - 5,515,000 - 252.11 Revenue Bond 2010A Water/Sewer Bond1 06/01/2029 3,880,000 - 3,880,000 - 252.11 Revenue Bond 2013A Sewer Bond 12/01/2028 1,850,000 - 175,000 1,675,000 252.11 Revenue Bond 2013T Reuse Facility Bond 12/01/2028 5,020,000 - 470,000 4,550,000 252.11 Revenue Bond 2015 Water/Sewer Revenue Refunding 12/01/2040 13,030,000 - 640,000 12,390,000 252.11 Revenue Bond 2017 Water/Sewer Improvement Revenue2 12/01/2042 9,415,000 - - 9,415,000 252.11 Revenue Bond 2020A Water/Sewer Revenue Bond3 12/01/2029 - 7,135,000 - 7,135,000 252.11 Revenue Bond 2020B PWRF Revenue Bond4 12/01/2050 - 16,415,000 185,000 16,230,000 263.82 PWTF Loan Riverview Trunk/SE Sewer PW00-043 07/01/2020 111,142 - 111,142 - 263.82 PWB Loan PWRF Pre-treatment Improvements4 06/01/2024 - 107,221 - 107,221 263.88 DWSRF Loan Columbia Water supply DM15-952-037 10/01/2034 5,994,855 - 399,657 5,595,198 263.86 Loans & Other Oblig.HAEIFAC - Reuse Facility Improvement Loa 07/01/2028 1,309,712 - 127,613 1,182,099 259.12 Accrued Leave Compensated Absences 12/31/2020 3,840,088 3,333,622 2,787,763 4,385,947 264.40 OPEB Liability Other Post Employment Benefits 12/31/2020 12,231,327 738,121 - 12,969,448 264.30 Pension Liability Pension Liabilities 12/31/2020 4,679,630 - 164,064 4,515,566 TOTAL REVENUE OBLIGATIONS 66,876,754 27,728,964 14,455,239 80,150,478 TOTAL LIABILITIES 93,001,754$ 27,728,964$ 15,785,239$ 104,945,478$ 3New revenue bonds issued by the Water/Sewer Utility in 2020 to be used for Water/Sewer infrastructure improvements. 4New revenue bonds issued by the PWRF Utility in 2020 to be used for PWRF infrastructure improvements. 2This bond requires interest only payments until 2030. MCAG NO. 0292 Notes to Schedule of Long-Term Liabilities 12009 & 2010 were refunded in 2020 TOTAL GENERAL OBLIGATIONS City of Pasco, Washington 2020 Comprehensive Annual Financial Report 228 SCHEDULE 15 – SCHEDULE OF STATE FINANCIAL ASSISTANCE Grantor/ Pass-Through Grantor STATE Program Title AWARDS Washington State Department of Ecology 2019-21 Biennial Stormwater Capacity Grant 46,008 Aquifer Storage and Recovery Study ( ASR)59,188 105,196 Department of Receration Conservation Office Schlagel Park Boating Facilities Upgrade 88,118 A Street Sporting 19,700 107,818 Washington State Department of Commerce 1923 Grant - Increasing Residential Building Capacity 4,743 Washington State Traffic Safety Commission Pasco PD School PD School Zone 6,402 Department of Health & Human Services Prehospital Participation Grant 1,260 AOC by the Washington State legislature LFO Funding Distribution 1,080 TOTAL STATE AND LOCAL ASSISTANCE:226,499 E2SHB-1783 WQSWCAP-1921-Pasco-0041 18-2355 Dev Agency #2280 GR9.FR.35.99.FR 20-63314-043 18-1360 DEV WROCR-1921-Pasco-00015 Other Identification Number MCAG NO. 0292 CITY OF PASCO SCHEDULE 15- SCHEDULE OF STATE AND LOCAL FINANCIAL ASSISTANCE For the Year Ended December 31, 2020 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 229 SCHEDULE 16 – SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS From Federal Agency Federal CFDA Other Pass-From (Pass-Through Agency)Program Number Award Through Direct Total Pass through to Number Awards Awards Subrecipients Note Community Development Block Grant/Entitlement Grant cluster Department of Housing & Urban Development Community Development Block Grant 14.218 B-16-MC-53-009-CDBG 25,746 25,746 1 & 3 Department of Housing & Urban Development Community Development Block Grant 14.218 B-17-MC-53-009-CDBG 25,676 25,676 1 & 3 Department of Housing & Urban Development Community Development Block Grant 14.218 B-18-MC-53-009-CDBG 25,745 25,745 1 & 3 Department of Housing & Urban Development Community Development Block Grant 14.218 B-19-MC-53-009-CDBG 6,268 6,268 1 & 3 Department of Housing & Urban Development Community Development Block Grant 14.218 B-20-MC-53-009-CDBG 319,892 319,892 51,154 1 & 3 Department of Housing & Urban Development COVID-19 Community Development Block Grant 14.218 B-20-MC-53-009- CDBG 223,071 223,071 Community Development Block Grant/Entitlement Grant cluster - 626,398 626,398 51,154 Department of Housing & Urban Development (Via City of Richland)Home Investment Partnerships Program 14.239 Home Program 33,688 - 33,688 1 & 3 US Department of the Interior (Via WA Department of Archaeology & Historic Preservation) Historic Preservation Fund's Underrepresented Communities 15.904 P18AP00010-0002 4,000 - 4,000 1 Department of Justice COVID-19 Coronavirus Emergency Supplemental Funding Program 16.034 2020-VD-BX-0545 - 13,012 13,012 1 Department of Justice (Via WA Department of Commerce)Violence Againnst Women 16.588 F19-31103-023 34,698 - 34,698 1 Department of Justice Bullet Proof Vest Partnership Program 16.607 2018 Bullet Proof Vest - 88 88 1 Department of Justice Bullet Proof Vest Partnership Program 16.607 2019 Bullet Proof Vest - 17,586 17,586 1 - 17,674 17,674 - Department of Justice Public Safety Partnership and Community Policing Grant 16.710 2017UMWX0103 - 173,601 173,601 1 Department of Justice Body Worn Camera Policy & Implementation 16.835 2018-BC-BX-0010 - 36,332 36,332 1 Highway Planning and Construction Cluster US Department of Transportation, Federal Highway Administration (Via WA State Department of Transportion)Highway Planning and Construction 20.205 STPUL 3515 (009) LA 9626 22,309 - 22,309 1 & 2 US Department of Transportation, Federal Highway Administration (Via WA State Department of Transportion)Highway Planning and Construction 20.205 STPUL 3515 (010) LA 9648 46,923 - 46,923 1 & 2 US Department of Transportation, Federal Highway Administration (Via WA State Department of Transportion)Highway Planning and Construction 20.205 STPUL 3552 (001) LA 9601 34,180 - 34,180 1 & 2 US Department of Transportation, Federal Highway Administration (Via Benton Franklin Council of Governments) Highway Planning and Construction 20.205 STPUL-9911 (011)1,079 - 1,079 1 & 2 US Department of Transportation, Federal Highway Administration (Via WA State Department of Transportion)Highway Planning and Construction 20.205 STPUL 9911 (011) LA 9831 70,942 - 70,942 1 & 2 US Department of Transportation, Federal Highway Administration (Via WA State Department of Transportion)Highway Planning and Construction 20.205 STPUS HLP 3530 (006) LA 7055 652 - 652 1 & 2 US Department of Transportation, Federal Highway Administration (Via WA State Department of Transportion)Highway Planning and Construction 20.205 STPUL 9911 (012) LA 9853 617 - 617 1 & 2 Total Highway Planning and Construction Cluster 176,700 - 176,700 - Highway Safety Cluster US Department of Transportation, National Highway Traffic Safety Administration (Via WA Association of Sheriff & Police Commission) State and Community Highway Safety 20.600 2020-HVE-3774-Washington Traffi 7,752 - 7,752 1 & 2 US Department of Transportation, National Highway Traffic Safety Administration (Via WA Association of Sheriff & Police Commission) State and Community Highway Safety 20.600 2021-HVE-4055-Region 14 Target 3,878 - 3,878 1 & 2 US Department of Transportation, National Highway Traffic Safety Administration (Via WA Traffic Safety Commission) National Priority Safety Programs 20.616 2021-AG-4151 1,106 - 1,106 1 & 2 Total Highway Safety Cluster 12,736 - 12,736 - MCAG NO. 0292 SCHEDULE 16- SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For the Year Ended December 31, 2020 Total CFDA 16.607 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 230 From Federal Agency Federal CFDA Other Pass-From (Pass-Through Agency)Program Number Award Through Direct Total Pass through to Number Awards Awards Subrecipients Note MCAG NO. 0292 SCHEDULE 16- SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For the Year Ended December 31, 2020 US Department of the Treasury (Via WA Department of Commerce)COVID-19 Coronavirus Relief Fund 21.019 20-6514C-283 3,388,050 - 3,388,050 1 US Department of Treasury (Via Benton-Franklin Health District)COVID-19 Coronavirus Relief Fund 21.019 CBC West Testing Site 1,060,649 - 1,060,649 1 US Department of Health & Human Services (Via WA State Office of Public Defense)COVID-19 Coronavirus Relief Fund 21.019 GRT21001 22,000 - 22,000 1 4,470,699 - 4,470,699 - Aging Cluster Department of Health & Human Services, Administration for Community Living, (Via 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 2019-74 4,011 - 4,011 1 Total Aging Cluster 4,011 - 4,011 - US Department of Health & Human Services COVID-19 Provider Relief Fund 93.498 HHS-58158577609 40,236 40,236 1 US Department of Homeland Security, Federal Management Agency Assistance to Firefighters Grant 97.044 EMW-2018-FP-00304 - 11,251 11,251 1 US Department of Homeland Security (Via Franklin County Emergency Management)Homeland Security Grant Program 97.067 E18-146, FFY 2017 15,900 15,900 1 US Department of Homeland Security(Via Franklin County Emergency Management) Staffing for Adeqiate Fire and Emergency Response 97.083 EMW-2016-FH-00428 200,221 200,221 1 TOTAL FEDERAL AWARDS EXPENDED:4,952,653$ 918,505$ 5,871,158$ 51,154$ The accompanying notes are an integral part of this schedule. Total CFDA 21.019 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 231 Notes to Schedule of Expenditures of Federal Awards For the Year Ended December 31, 2020 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. The amounts shown as current year expenditures represent only the federal grant portion of the program costs. Entire program costs, including the City’s portion, are more than shown. Such expenditures are recognized following, as applicable, either the cost principles in the 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 2 – Federal De Minimis Indirect Cost Rate The City has elected to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. 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 principal and interest in loan repayments received for the year was $9,186. 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 disbursed to program participants for the year was $30,000 and is presented in this schedule. The amount of principal and interest in loan repayments received for the year was $121,943. City of Pasco, Washington 2020 Comprehensive Annual Financial Report 232 SCHEDULE 17 – LIMITATION ON PUBLIC WORKS PROJECTS PERFORMED BY EMPLOYEES MCAG (0292)Schedule 17 City of Pasco LIMITATION ON PUBLIC WORKS PROJECTS PERFORMED BY PUBLIC EMPLOYEES For the Year Ended December 31, 2020 Total current public work construction budget as amended (annual or 26,013,014 biennial as applicable) Allowable portion of total public works (10 percent of line 1)2,601,301 Less: Amount (if any) in excess of permitted amount from prior budget period.- Total allowable public works (line 2 minus line 3)2,601,301 Total public works projects performed by public emploiyees during the current year (include work performed by a county)786,449 If this is the second year of a biennial budget, total public works projects performed by public employees during the first year of biennium 862,163 Restricted under (over) allowable (line 4 minus line 5 minus line 6)952,689 NOTE: If the restricted amount is over allowable, this amount must be carried forward to the next budget period report. City of Pasco, Washington 2020 Comprehensive Annual Financial Report 233 This page intentionally left blank. City of Pasco, Washington 2020 Comprehensive Annual Financial Report 234 SCHEDULE 19 – LABOR RELATIONS CONSULTANTS City of Pasco, Washington 2020 Comprehensive Annual Financial Report 235 SCHEDULE 21 – LOCAL GOVERNMENT RISK ASSUMPTION City of Pasco, Washington 2020 Comprehensive Annual Financial Report 236 City of Pasco, Washington 2020 Comprehensive Annual Financial Report 237 This page intentionally left blank. City of Pasco, Washington 2020 Comprehensive Annual Financial Report 238 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 comprehensive annual financial report. Their dedication and teamwork are essential to the success of this report and all of their efforts are hugely appreciated. Richa Sigdel Finance Director Darcy Buckley Finance Manager Griselda Garcia Accounting Lead Brian Quinn Staff Accountant Charlene Sandland Staff Accountant Karen Conn Staff Accountant Rosa Moreno Staff Accountant