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HomeMy WebLinkAbout2013 CAFR electronic version GFOA.pdf2013 COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED ON DECEMBER 31, 2013 CITY OF AUBURN WASHINGTON COMPREHENSIVE ANNUAL FINANCIAL REPORT Fiscal Year January 1, 2013 through December 31, 2013 Prepared by Finance Department Shelley Coleman, Finance Director Cover photo by Dan Streiffert Auburn Environmental Park City of Auburn: 2013 CAFR Table of Contents i COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended December 31, 2013 TABLE OF CONTENTS I. INTRODUCTORY SECTION Page Title Page Table of Contents ....................................................................................................................................................... i City Officials ................................................................................................................................................................ 1 Organizational Chart (City and Council Committees) .............................................................................................. 2 Letter of Transmittal ................................................................................................................................................. 3 Certificate of Achievement ....................................................................................................................................... 11 II. FINANCIAL SECTION Auditor’s Report ....................................................................................................................................................... 13 Management’s Discussion and Analysis .................................................................................................................. 17 Basic Financial Statements Government-wide Financial Statements: Statement of Net Position............................................................................................................................. 37 Statement of Activities .................................................................................................................................. 38 Fund Financial Statements: Governmental Funds Balance Sheet .............................................................................................................................................. 41 Statement of Revenues, Expenses and Changes in Fund Balances ........................................................ 42 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Government Funds to the Statement of Activities .................................................. 43 Statement of Revenues, Expenses and Changes in Fund Balances – Budget and Actual: General Fund ........................................................................................................................................... 44 Arterial Street Fund ................................................................................................................................ 45 Proprietary Funds: Statement of Net Position ......................................................................................................................... 48 Statement of Revenues, Expenses, and Changes in Fund Net Position .................................................. 49 Statement of Cash Flows ........................................................................................................................... 50 Fiduciary Funds: Statement of Fiduciary Net Position ......................................................................................................... 54 Statement of Changes in Fiduciary Net Position ...................................................................................... 55 Notes to the Financial Statements.......................................................................................................................... 57 Required Supplemental Information ..................................................................................................................... 103 Combining and Individual Fund Financial Statements and Schedules Non-Major Government Funds: Combining Balance Sheet ..........................................................................................................................106 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances .............................. 107 Non-Major Special Revenue Funds: Combining Balance Sheet .......................................................................................................................... 110 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances .............................. 112 Statement of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual: Local Street Special Revenue Fund ....................................................................................................... 114 Hotel/Motel Tax Special Revenue Fund ................................................................................................ 115 Arterial Street Preservation Special Revenue Fund .............................................................................. 116 City of Auburn: 2013 CAFR Table of Contents ii Statement of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual: Page (continued) Drug Forfeiture Special Revenue Fund ................................................................................................. 117 Housing & Community Development Special Revenue Fund .............................................................. 118 Recreation Trails Special Revenue Fund ............................................................................................... 119 Business Improvement Area Special Revenue Fund ............................................................................ 120 Cumulative Reserve Special Revenue Fund .......................................................................................... 121 Mitigation Special Revenue Fund .......................................................................................................... 122 Non-Major Debt Service Funds: Combining Balance Sheet .......................................................................................................................... 124 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances .............................. 125 Capital Project Fund: Combining Balance Sheet .......................................................................................................................... 128 Combining Statement of Revenues, Expenditures, and Changes in Fund Balance ................................ 129 Permanent Fund: Balance Sheet ............................................................................................................................................. 132 Statement of Revenues, Expenditures and Changes in Fund Balance .................................................... 133 Non-Major Enterprise Funds: Combining Statement of Net Position ...................................................................................................... 136 Combining Statement of Revenues, Expenses, and Changes in Net Position ........................................ 137 Combining Statement of Cash Flows ........................................................................................................ 138 Internal Service Funds: Combining Statement of Net Position ...................................................................................................... 142 Combining Statement of Revenues, Expenses, and Changes in Net Position ........................................ 143 Combining Statement of Cash Flows ........................................................................................................ 144 Agency Fund: Statement of Changes in Assets and Liabilities ........................................................................................ 148 III. STATISTICAL SECTION Schedule Net Position by Components .................................................................................................................. 1 .............. 150 Changes in Net Positions ........................................................................................................................ 2 .............. 151 Fund Balances, Government Funds ........................................................................................................ 3 .............. 152 Changes in Fund Balances, Government Funds ..................................................................................... 4 .............. 153 Tax Revenues by Source, Government Funds ....................................................................................... 5 .............. 154 Assessed Value by Type ......................................................................................................................... 6 .............. 155 Property Tax Data ................................................................................................................................... 7 .............. 156 Property Tax Levies and Collections ..................................................................................................... 8 .............. 158 Principal Taxpayers – Property Taxes ................................................................................................... 9 .............. 159 Retail Tax Collections by Sector ........................................................................................................... 10 .............. 160 Ratios of Outstanding Debt by Type ..................................................................................................... 11 .............. 161 Computation of Legal Debt Margin ...................................................................................................... 12 .............. 162 Legal Debt Margin Ratios ..................................................................................................................... 13 .............. 162 Computation of Net Direct and Estimated Overlapping Debt ............................................................ 14 .............. 163 Ratios of Net General Bonded Debt to Assessed Value ...................................................................... 15 .............. 164 Pledged Revenue Bond Coverages ...................................................................................................... 16 .............. 165 Population, Income and Housing Trends ............................................................................................. 17 .............. 166 Major Employers ................................................................................................................................... 18 .............. 167 Staffing Levels by Department ............................................................................................................. 19 .............. 168 Operating Indicators by Department ................................................................................................... 20 .............. 169 Capital Asset Indicators by Department .............................................................................................. 21 .............. 170 CITY OFFICIALS MAYOR Nancy Backus CITY COUNCIL Claude DaCorsi John Holman Wayne Osborne Bill Peloza Yolanda Trout Rich Wagner Largo Wales DEPARTMENT DIRECTORS Finance Director Shelley Coleman City Attorney Dan Heid Human Resources Director Rob Roscoe - Interim Innovation & Technology Director Ron Tiedeman Parks Director Daryl Faber Community Development & Public Works Director Kevin Snyder Police Chief Bob Lee Director of Administration Michael Hursh 1 !" #$# % & #’#() * ! &" ’ !")+ # !"*!+ $&’ ,+- & %*# ! !.’ .! - & /’ ! /’ & ! 2 3 June 26, 2014 Honorable Nancy Backus, Mayor Members of the Auburn City Council Citizens of the City of Auburn 25 W Main Street Auburn, WA 98001 We are pleased to present the City’s Comprehensive Annual Financial Report for the year ended December 31, 2013. We publish this financial statement in conformity with generally accepted accounting principles (GAAP). It has been audited in accordance with generally accepted auditing standards by the Washington State Auditor’s Office. Therefore, we issue and transmit to you the City of Auburn’s Comprehensive Annual Financial Report (CAFR) for the fiscal year ended December 31, 2013. This transmittal letter provides an overview of the report and the financial condition of the City. It also provides insight into the history of the City and the economic conditions affecting it, and describes the systems and controls employed by the Finance department. The Comprehensive Annual Financial Report has several significant uses. First, it provides a general overview of the City’s finances to the general public and taxpayers. Second, it is referenced by bond buyers and rating agencies to evaluate the City’s fiscal stability and creditworthiness. Finally, the CAFR is a series of financial statements that have been audited by the State Auditor’s Office and provides assurances that assets are safeguarded and funds are expended as they were legally appropriated in the biennial budget. I. INTRODUCTION A. Management Representation The Auburn Finance Department prepared the report and accepts complete responsibility for the accuracy, completeness, and fairness of presentation of the information included. The data is believed to be accurate in all material respects, and it is believed that all significant information necessary for an understanding of the affairs and financial condition of the City has been disclosed. The report has been prepared in conformance with generally accepted accounting principles and in conformance with financial reporting standards issued by the Governmental Accounting Standards Board (GASB). City management has developed and evaluated a comprehensive internal control structure that is designed to protect the City’s assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the City’s financial statements in conformity with generally accepted accounting principles. Because the cost of internal controls should not outweigh the benefits, the City’s internal control structure is designed to provide reasonable, rather than absolute, assurance that the City of Auburn: 2013 CAFR Letter of Transmittal 4 financial statements will be free from material misstatement. As management, we attest that, to the best of our knowledge and belief, this financial report is complete and reliable in all material aspects. As a recipient of federal, state and county financial assistance the City is required to undergo an annual single audit in conformity with U.S. Office of Management and Budget Circular A-133, Audits of State and Local Governments. The audit is conducted by the State Auditor’s Office in conjunction with the City’s annual independent audit. The results of the City’s annual single audit for the fiscal year ended December 31, 2013 provided no instances of material weakness in the internal control structure or significant violations of applicable laws. GAAP requires that management provide a narrative introduction, overview and analysis to accompany the basic financial statements in the form of Management’s Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. Auburn’s MD&A can be found immediately following the independent auditor’s report. B. Organization of the Report The report is divided into three sections: the Introductory Section, the Financial Section, and the Statistical Section. The Introductory Section contains the table of contents, a list of the City’s principal officials, an organizational chart, this letter of transmittal, and the Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officers’ Association of the United States and Canada for the 2012 CAFR. The Financial Section contains the Washington State Auditor’s Report, completed by the Washington State Auditor, Management’s Discussion and Analysis, Government-Wide Financial Statements, the Fund Financial Statements, Notes to the Financial Statements and Other Required Combining and Supplemental Information. The Statistical Section, which is unaudited, contains a range of statistical tables and charts that present various financial, economic, social, and demographic data about the City. This information depicts various trends that have affected the fiscal condition of the City over the last ten years. The data presented in this section complies with the requirements of GASB Statement No. 44, Economic Condition Reporting: The Statistical Section. C. Reporting Entity The City of Auburn was incorporated in 1891 and currently operates as a non-charter Code City under the laws of the State of Washington. Code City status in Washington provides “home rule” authority to cities. Auburn has a Mayor/Council form of government; the Mayor is elected and is the full-time Chief Administrator. The seven-member City Council is elected at large, rather than by district. Members of the City Council are responsible for establishing the general direction and policies for the City and for providing the resources necessary to carry out those policies. As the City’s chief administrator, the Mayor is responsible for carrying out the policy and direction set by the City Council. This includes the enforcement of laws and ordinances, the execution of contracts and agreements, and maintenance of peace and order in the city. The City is located primarily in southern King County (county seat, Seattle) and a small northeastern portion of Pierce County. These are the two most populous counties in the State of Washington, comprising over 40% of the state-wide population. The City is strategically located in relation to the labor and consumer markets of the two largest cities in the area: Seattle in King County and Tacoma in Pierce County. Auburn currently serves approximately 73,235 people within its incorporated limits. City of Auburn: 2013 CAFR Letter of Transmittal 5 The City provides a wide range of services, both beneficial and necessary, to its residents as well as to the adjacent area. These services include police protection; parks and recreational facilities that include a senior center, gymnasium, golf course and museum; land use management and development regulation; infrastructure construction and maintenance; water, sanitary sewage collection, storm drainage, and solid waste services; a general aviation airport; and a municipal cemetery. The City is a member/owner of Valley Communications providing emergency 911 services and South Correctional Entity providing jail facilities. Both these organizations provide services to other owner/member governments and other non owner/member governments as well through interlocal agreements. II. ECONOMIC CONDITION A. Summary of Local Economy Auburn began as a small rural community based on agriculture and the railroad, which maintained a significant switching and repair facility. The City has grown significantly since World War II, both as a residential community and as a commercial and industrial area. Auburn has become a significant area for automobile sales and has also developed a substantial manufacturing and distribution base with the largest employer being The Boeing Co., which employs over 6,000 people in its Auburn facility. Boeing is a worldwide supplier of aircraft and related products. The City’s assessed valuation in 2013, for 2014 property tax collection, was $7.288 billion. Auburn has enjoyed steady residential and industrial growth over the years as development has moved outward from the major cities. The City currently has a growing array of manufacturing facilities, as well as distribution, wholesaling, and retailing operations. Auburn is home to the MultiCare Auburn Medial Center and serves the local geographic area and is a major trauma center of the northwest providing 213 beds and supports about 635 employees. The medical center also includes an oncology center. Auburn also has experienced an increase in new businesses and development activity. In October 2013, the former SuperMall of the Great Northwest was rebranded to the Outlet Collection Seattle after a $35 million renovation. Major new businesses include Orion Industries, a leader in manufacturing and precision metal fabrication for the aerospace, defense, automotive and marine industries; Hospital Central Services Association (HCSA), a leading healthcare services organization serves a consortium of nonprofit hospitals for their laundry services; construction of the new Franciscan Medical Pavilion, a two-story 38,000 square foot mixed use building that will provide space for primary care as well as specialty cardiology, vascular surgery, endocrinological, and general surgical medical care services, was completed in early 2014. Currently there is $45 million of new development permitted and under construction and additional projects totaling $35 million in plan review. Significant new development projects underway include the new Trades Building and Student Life Building on the Green River Community College campus; $110 million reconstruction and modernization of Auburn Senior High School; and construction of Project Lofts, a new six-story mixed use building in downtown Auburn that will feature commercial and residential units and a covered parking garage. As the City moves forward, several positive developments are on the horizon. The City has been identified as an Innovation Partnership Zone (IPZ) in Washington State that will help businesses thrive through partnerships in research and workforce development. As new businesses and developments take hold, they will serve to broaden and strengthen the City’s economic foundation far into the future City of Auburn: 2013 CAFR Letter of Transmittal 6 Since 2004 the City’s total assessed property valuation has risen from $4.77 billion in 2004 to $6.97 billion in 2013. The recent economic downturn, coupled with the impact of the Streamlined Sales Tax (SST) legislation enacted by the State of Washington that went into effect July 1, 2008, has dropped general sales tax revenues from their high in 2007 of $17.5 million to $14.5 million in 2013. The SST impact is estimated to have eliminated approximately $200,000 a month of sales tax revenue to the City. To lessen the financial impact on cities severely impacted by this legislation, the State of Washington implemented a mitigation plan under which the City of Auburn received approximately $1.95 million in mitigation payments in 2013. While the City, similar to other municipalities in the region and nationally, has suffered during the recent economic recession, the local economy is improving. Sales Tax revenue, net of criminal justice and annexation sales tax credits, constitutes approximately twenty five percent of the General Fund budget, increased to $14.5 million (+10.7%) over the previous year. While the local economy is recovering, the City remains vigilant in its management of expenses and to ensure it lives within its means. The City’s staffing level totals 403 full-time equivalents (FTEs). Despite economic cycles, the City has continually focused on enhancing the quality of life in the community and focusing on maintaining and redeveloping its aging infrastructure. For example, in 2013, the City sold $11.4 million in new revenue bonds to support improvements to critical water and stormwater facilities, construction of which will ensure continued quality services for current and future utility customers. The City’s budgeting process is based on financial policies directed at conserving fiscal resources while supporting programmatic strategies. Budget recommendations reflect a long-range analysis of fiscal trends. These policies and practices have not only averted serious funding problems in the past, but have enabled the General Fund to remain on a firm financial footing during the most recent recession. The City is maintaining a stable financial condition by managing expenditure budgets to available revenue streams. All funds contain adequate balances, and the City’s debt is manageable. The General fund contains a satisfactory balance, a significant Insurance fund has been set aside for contingencies, and the Equipment Rental fund is adequate for vehicle replacement. The Proprietary and Fiduciary funds are in satisfactory condition. The City completed a review of the City’s water, sewer and stormwater utility rates in 2012 and established rates to fund operating and capital needs through 2017 including the issuance of new revenue bonds in early 2013 to support significant new utility construction projects. B. Future Economic Outlook Auburn is in a continuous process of both short-term and long-term financial planning. Short-term financial planning is inherent in the development of the City’s biennial budget. Concurrent with the biennial budget is the review of the City’s long-term capital needs. Funding sources are assessed with the development of the six-year Capital Facilities Plan. The capital facility plan is a component of the Comprehensive Master Plan, which outlines how the City should look and function in twenty years and creates a vision that can be realistically implemented. An integral part of this vision is determining how to allocate the City’s financial resources to achieve the desired goals. City of Auburn: 2013 CAFR Letter of Transmittal 7 The City has several long-term municipal planning and capital projects underway. These include reconstruction of aged utility infrastructure; street improvements including rehabilitation of local neighborhood streets. These projects will improve mobility, will contribute to the completion of a North/South arterial corridor, and provide for greater recreational opportunities for the community. These municipal projects, coupled with the new private sector developments described earlier, will help ensure local economic growth continue, albeit not at the rate experienced in the late 1990’s. The challenge is to control costs that grow at a faster rate than revenue. Areas of concern are health care costs, pension costs, other post employment benefits (OPEB), and public safety costs related to incarceration and labor contracts. Continuing to maintain service level in these sectors will draw valuable resources from other areas such as infrastructure replacement and capital programs. As Auburn moves forward, economic conditions will be continually monitored and adjustments to city spending and services made to maintain the City’s financial health. Long-term plans will be focused on ensuring the City continues to be an economically strong and viable city. III. FINANCIAL INFORMATION A. Cash Management The City invests in U.S. Treasury and Agency Issues, Prime Bankers Acceptances, Time Deposits, and Repurchase Agreements. Investment policies and procedures, established by the Mayor and adopted by the City Council, require the City to establish a trustee to take delivery of all investment transactions at time of payment. The City has contracted with the Bank of New York to provide delivery versus payment trustee services on all government agency investments. The State of Washington maintains an investment pool to provide economies of scale in investing to smaller- and medium-sized cities in the State. The City uses this service for all funds not invested in longer-term securities. The pool operates under the same legal restrictions that apply to all municipalities in the State and, consequently, uses the same instruments as listed above. The State also takes delivery of all investment transactions. The City has adopted a comprehensive investment policy statement to guide City investment practices. These policies are closely patterned after the recommendations in Investing Public Funds published by the Government Finance Officer’s Association (GFOA). Investments are restricted to less than three years in order to maintain liquidity on all investments in all funds, yet enable the City to take advantage of the yield curve. Fiduciary funds, which involve long-term reserves and require minimal liquidity, are invested for longer time periods. The City undertakes repurchase agreements only with financial institutions that offer the City full protection in the event of default, by providing the delivery of the underlying security to the City. B. Risk Management The City participates in the Washington Cities’ Insurance Authority (an insurance pool of over 100 cities) and the City actively pursues risk reduction in the operation of its programs. The City purchases, with employee participation, most of its health insurance for its employees through commercial policies administered by the Association of Washington Cities. Employees represented by the Teamsters Union have insurance through the Teamsters organization. Beginning in 2014 the City created its own worker’s compensation program and pool. Prior, the City participated in the Washington State Workers’ Compensation program. City of Auburn: 2013 CAFR Letter of Transmittal 8 In order to keep its long-term options open and to provide for any uninsured losses that might occur, the City has elected to build an insurance reserve (the Insurance fund). The Insurance fund supplements various insurance coverage’s maintained by the City. This fund is also used to self-insure some limited exposures, the most significant of which is accidental loss to City-owned vehicles. The Washington Cities’ Insurance Authority not only provides a sharing of risk by pooling of losses, it also provides an extensive array of professional services in risk management. The pool monitors the City’s management practices and damage claims. The City follows the guidelines provided by the pool in an effort to minimize risk exposure in the day-to-day operations of the City’s programs. The City also maintains an extensive employee safety program managed by the Human Resources department. IV. OTHER RELEVANT INFORMATION A. Independent Audit State law requires an annual audit of all City books of accounts and financial records by the Office of the State Auditor, which is headed by an independently elected State official, the State Auditor. The Auditor has broad legal authority to inquire into all financial and legal compliance matters and such audits are considered equal to audits by certified public accounting firms. The 2013 financial audit of the City is complete and was conducted in conformance with Generally Accepted Auditing Standards. The financial statements of all City funds have been included in this audit. The City has been given an unqualified opinion for 2013. Please see the Auditor’s Report. The State Auditor’s Office also audits the City’s administration of its federal grants under the single audit concept. B. Awards The Government Finance Officer’s Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Auburn for its Comprehensive Annual Financial Report for the fiscal year ended December 31, 2012. This was the twenty-sixth consecutive year that the City has achieved this prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current Comprehensive Annual Financial Report continues to meet the Certificate of Achievement Program’s requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. The City has also received the Government Finance Officer’s Association Distinguished Budget Presentation award for twenty-two years. The City was one of just twenty-one cities in the state to receive both the Certificate of Achievement for Excellence in Financial Reporting and the Distinguished Budget Presentation award for 2013. C. Acknowledgments Preparation of this report could not have been accomplished without the professional, efficient, and dedicated staff of the Finance department and various other City employees who assisted in its production. Further appreciation is extended to the Mayor and City Council for their encouragement, City of Auburn: 2013 CAFR Letter of Transmittal 9 interest, and support in conducting the financial affairs of the City in a sound and progressive manner. The assistance of the auditors from the Washington State Auditor’s Office is also greatly appreciated. Respectfully submitted, Shelley R. Coleman Finance Director 10 11 12 13 14 15 16 City of Auburn: 2013 CAFR Management’s Discussion and Analysis 17 MANAGEMENT’S DISCUSSION AND ANALYSIS The City of Auburn’s (the “City”) discussion and analysis is designed to:  Assist the reader in focusing on significant financial issues  Provide an overview of the City’s financial activity  Identify changes in the City’s financial position (its ability to meet future years’ challenges)  Identify any material deviations from the approved budget  Identify individual fund issues or concerns Management’s Discussion and Analysis is designed to focus on the current year’s activities, resulting changes and currently known facts. Therefore, it should be read in conjunction with the Transmittal Letter and the City’s financial statements. Financial Highlights  Total government-wide net position, the difference between assets plus deferred outflows and liabilities plus deferred inflows, equal $624.0 million, an increase of $3.8 million or 0.6%. Of this, a total of $511.8 million, or 82.0% of total net position, is net investment in capital assets, and includes assets such as utility systems, streets, buildings, land, vehicles and equipment. An additional $7.5 million of net position is restricted for purposes of endowment and debt service. Of the remaining $104.7 million of net position, $24.3 million is legally restricted, restricted by City policy for specific purposes, or is restricted for use by the City’s utilities and $80.3 million is unrestricted.  The net increase in government-wide net position during 2013 was $3.8 million. Of this amount, $16.8 million was directly related to the decrease in City-owned net investment in capital assets and restricted for capital projects increased $12.4 million.  Business-type net position increased by $6.4 million to $215.3 million during 2013 as a result of capital contributions related to the City’s water, sewer and storm water utilities.  Governmental fund balances at year-end totaled $46.9 million. Of this amount, $17.8 million, or 38%, is unassigned and available to fund ongoing activities. Compared to 2012, total governmental fund balances increased by $4.4 million. This increase reflects the net effect of a general improvement in the regional economy and continued vigilance in monitoring general spending.  Total City debt payments during the year, net of compensated absences and other post employment benefits, were $4.76 million. Total outstanding debt, including bonds and loans, totaled $114.3 million at December 31, 2013. This ending debt balance is an increase of $13.5 million from 2012 and is primarily the result of $11.4 million in added Utility revenue bonds issued in 2013. See note 9 for further information on debt activity during the year. City of Auburn: 2013 CAFR Management’s Discussion and Analysis 18 Other City Highlights: Parks and Community Development  Constructed a new playground at Brannan Park. The playground was designed by Auburn youth and community members and playground equipment was built by over 250 community volunteers in just over six- hours. The 27 acre park contains one of the city’s most heavily used sports complexes and features a baseball complex with lighted fields, basketball court, play structure, soccer field, waking trails among other amenities.  Completed Lea Hill Park, a seven acre parcel that was acquired as part of a land exchange with the Green River Community College. The park features a skate park, picnic shelter, amphitheater, basketball court and small scale soccer and multipurpose field.  Installed the first ever Outdoor Sculpture Garden in Downtown Auburn, featuring six sculptures by local artists.  Auburn was ranked among top 10 in Center for Digital Government and National League of Cities 2013 Digital Cities survey.  The Green River Community College ranked among the top associate degree and certificate awarding colleges in the 2012-2013 academic year, according to a study released by the national journal Community College Week. Over the past 10 years, Green River has made the top 100 list seven times. Public Works  Completed emergency storm repairs to the Hidden Valley Vista deteriorated storm water lines.  Completed guard-rail improvements along Kersey Way, Green River Road and Mountain View Drive.  Completed the M Street Underpass (grade separation) project, which grade separated M Street SE from the Burlington Northern Santa Fe Stampede Pass Rail Line.  Completed the 2013 pavement patching, chip seal and overlay project.  Completed overlay of West Valley Highway from 15th Street NW to 37th Street NW.  Completed upgrading the SCADA system.  Completed the Lea Hill Safe Routes to School project, improving student pedestrian routes to Hazelwood Elementary, Lea Hill Elementary and Rainier Middle School.  Completed D Street storm, sewer and water utility and street improvements. Overview of the Financial Statements The City’s basic financial statements are presented in three parts: 1) Government-wide financial statements 2) Fund financial statements 3) Notes to the financial statements These statements report the Cities net position, and changes in them. The net position is the difference between assets plus deferred outflows of resources and liabilities plus deferred inflows of resources. The City does not report deferred inflows of resources because it had no items requiring recognition as deferred inflows of resources in 2013. Other supplementary information, in addition to the basic financial statements, is also contained in this report. This section of the management’s discussion and analysis is intended to introduce and explain the basic financial statements. City of Auburn: 2013 CAFR Management’s Discussion and Analysis 19 Government-wide Financial Statements The Financial Statements are presented in conformity with the Governmental Accounting Standards Board (GASB), which establishes GAAP for governmental entities. The City adopted the provisions of Statement No. 63 – Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position as of December 31, 2012 and GASB No. 65 – Items Previously Reported as Assets and Liabilities as of December 31, 2013. In adopting these new standards, the statement of net position reflects the retroactive application of GASB No. 65 in that bond issuance costs are no longer a contra-liability account and reduce previously reported net position and previous losses on bond refundings are now reported as deferred outflows of resources. The government-wide financial statements are designed to be corporate-like in that all governmental and business-type activities are consolidated into columns which add to a total for the City. The focus of the Statement of Net Position is designed to be similar to bottom-line results for the City and its governmental and business-type activities. This statement combines and consolidates governmental funds’ current financial resources (short-term spendable resources) with capital assets, deferred outflows of resources, long-term obligations and deferred inflows of resources, (which there are none to report). Over time, increases or decreases in net position may be one indicator of improvement or deterioration in the City’s overall financial health. The Statement of Activities is focused on both the gross and net cost of various functions, including both governmental and business-type activities, which are supported by the City’s general tax and other revenues. This is intended to summarize and simplify the user’s analysis of cost of various governmental services and/or subsidy to various business- type activities. The revenue generated by the specific functions (charges for services, grants, and contributions) is compared to the expenses for those functions to show how much each function either supports itself or relies on taxes and other general funding sources for support. All activity on this statement is reported on the accrual basis of accounting, requiring that revenues are reported when they are earned and expenses are reported when they are incurred, regardless of when cash is received or disbursed. Governmental activities of the City include general government (executive, finance, legal, human resources, and contracted court), security (police), physical environment, economic environment, transportation, health and human services, and culture and recreation. The City’s business-type activities include water, sanitary sewer, storm water and solid waste utilities, as well as the operations of a golf course, airport, and cemetery. Governmental activities are primarily supported by taxes, charges for services, and grants while business-type activities are self-supporting through user fees and charges. Fund Financial Statements The Fund Financial Statements are the traditional reporting format for governments. A fund is a fiscal and accounting entity with a self-balancing set of accounts used to account for specific activities or meet certain objectives. While the government-wide statements present the City’s finances based on the type of activity (general government vs. business type), the Fund Financial Statements are presented by fund type, such as the general fund, special revenue funds and proprietary funds, with the focus on major funds. Governmental Funds are used to account for essentially the same functions that are reported as governmental activities in the government-wide financial statements. The government major fund is presented utilizing the “sources and uses of liquid resources” basis. This is the manner in which the budget is typically developed. The basis of accounting is different between the governmental fund statements and the government-wide financial statements. The governmental fund statements focus on the near-term revenues/financial resources and expenditures while the government-wide financial statements include both near-term and long-term revenues/financial resources and expenses. The information in the governmental fund statements can be used to evaluate the City’s near-term financing City of Auburn: 2013 CAFR Management’s Discussion and Analysis 20 requirements and immediate fiscal health. Comparing the governmental fund statements with the government-wide statements can help the reader better understand the long-term impact of the City’s current-year financing decisions. Because the basis of accounting is different between the governmental fund statements and the government-wide financial statements, reconciliations are provided. The reconciliation between the governmental fund Balance Sheets and the government-wide Statement of Net Position is found on the bottom of the governmental funds’ Balance Sheet, while the reconciliation between the governmental fund Statement of Revenues, Expenditures and Changes in Fund Balance and the government-wide Statement of Activities is found directly following the governmental funds’ Statement of Revenues, Expenses, and Changes in Fund Balances. The City maintains twenty (20) individual governmental funds. Of these, three are considered major (the general fund, the arterial street fund, and the capital improvement projects fund) and are presented separately in the governmental fund Balance Sheet and the governmental fund Statement of Revenues, Expenditures and Changes in Fund Balances. The remaining governmental funds are combined into a single column labeled “Other Governmental Funds”. Individual fund data for each of the other governmental funds can be found in the combining statements later in this report. The City maintains budgetary control over its operating funds through the adoption of a biennial budget. Budgets are adopted at the fund level according to state law. Budgetary comparison statements are presented for the general and arterial street funds as part of the basic financial statements. Other budgetary comparison statements are included following the other government funds’ combining statements in this report. Proprietary funds are used by governments to account for their business-type activities and use the same basis of accounting utilized in private industry. Business-type activities provide specific goods or services to a group of customers that are paid for by fees charged to those customers. There is a direct relationship between the fees paid and the services rendered. The City has two types of proprietary funds: enterprise funds and internal service funds. Enterprise funds are used to account for goods and services provided to citizens, while internal service funds are used to account for goods and services provided internally to various City departments. Enterprise funds report the same functions presented as business-type activities in the government-wide statements, but in greater detail. The City’s enterprise fund statements provide information on the City’s four utilities (water, sanitary sewer, storm water, and solid waste) as well as the City-owned airport, cemetery, and golf course. Internal service funds are an essential accounting tool used to accumulate and allocate costs internally among the City’s various functions. The City uses internal service funds to account for its fleet of vehicles, its maintenance and operation of facilities, the City-wide provision of computer hardware and software services, and its insurance premiums. Internal service funds benefit both governmental and business-type activities, and are allocated accordingly in the government-wide statement of activities. Fiduciary funds account for assets held by the City in a trustee capacity or as an agent for individuals, private organizations, other governments or other funds. Fiduciary funds are not included in the government-wide financial statements because their assets are not available to support the City’s activities. The City has two fiduciary funds: a pension fund and an agency fund, and are accounted for on the accrual basis. As agency funds are custodial in nature, they do not include revenues and expenses. City of Auburn: 2013 CAFR Management’s Discussion and Analysis 21 Notes to the Financial Statements The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found at the end of the Basic Financial Statements section. Other Information In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the budget vs. actual reports of the City’s general fund and major special revenue funds. The budget vs. actual required supplementary information can be found on page 44 and 45, and the pension benefit and other postemployment benefit required supplementary information is found in the required supplemental information. The combining statements referred to earlier in connection with nonmajor governmental funds, nonmajor enterprise funds, and internal service funds are presented in the section titled “Fund Financial Statements and Schedules”. Government-wide Financial Analysis The statement of net position may serve as a useful indicator of the City’s financial position. The overall financial position has improved for the City of Auburn over the prior year. Changes in Net Position from 2012 to 2013 show an increase in total net position of $4.18 million (not including the prior period adjustment of $0.38 million). Following is a condensed version of the government-wide statement of net position with a comparison to 2012: As of 12/31/13 As of 12/31/12 As of 12/31/13 As of 12/31/12 As of 12/31/13 As of 12/31/12 Current and other assets 101,729,060$ 97,545,749$ 56,821,892$ 41,668,321$ 158,550,952$ 139,214,070$ Capital assets, net of accumulated depreciation 379,730,745 386,230,900 212,902,959 208,530,146 592,633,704 594,761,046 Total assets 481,459,805 483,776,649 269,724,851 250,198,467 751,184,656 733,975,116 Deferred Outflows of Resources 27,929 - 49,856 - 77,785 - Long-term liabilities 64,297,074 62,930,643 45,806,167 34,579,930 110,103,241 97,510,573 Other liabilities 8,548,606 9,537,546 8,628,868 6,750,234 17,177,474 16,287,780 Total liabilities 72,845,680 72,468,189 54,435,035 41,330,164 127,280,715 113,798,353 Net position Net investment in capital assets 346,195,793 354,899,294 165,619,867 173,709,864 511,815,660 528,609,158 Restricted for: Capital Projects 12,517,220 10,603,982 10,453,443 - 22,970,663 10,603,982 Nonexpendable Permanent Endowment 1,536,316 1,475,580 - - 1,536,316 1,475,580 Debt Service 45,788 50,439 5,973,355 4,306,893 6,019,143 4,357,332 Tourist Promotion 131,851 109,913 - - 131,851 109,913 Drug Investigation & Enforce 710,147 856,402 - - 710,147 856,402 Comm Dev Block Grant 37,519 43,397 - - 37,519 43,397 Central Business Distr Dev 41,068 24,403 - - 41,068 24,403 Rate Stabilization - - 412,791 412,165 412,791 412,165 Unrestricted 47,426,352 43,245,050 32,880,216 30,439,381 80,306,568 73,684,431 Total net position 408,642,054$ 411,308,460 215,339,672$ 208,868,303$ 623,981,726$ 620,176,763$ Governmental Activities Business-type Activities Total STATEMENT OF NET POSITION Comparative Analysis of 2013 and 2012 City of Auburn: 2013 CAFR Management’s Discussion and Analysis 22 The City’s net position increased by $3.8 million (including the change in accounting principle). The increase in Net Position from the Statement of Activities is reported at $4.18 million. The difference of $0.38 million is due to writing-off bond issuance costs in conformity with GASB No. 65 as a prior period adjustment. This prior period adjustment is only reflected in the 2013 financial statements as the City does not present comparative financial statements. As such, the prior period adjustment is not reflected in this Management’s Discussion and Analysis for 2012 but rather is reflected in the 2013 reported amounts. The largest component of the City’s net position, $511.8 million, or 82.0%, is its net investment in capital assets. These capital assets, such as streets, parks, trails, and vehicles and equipment related to police and public works, are used to provide services to the citizens. As a result, these assets are not for sale, and are therefore not available to fund current and future City obligations. The City elected the GASB 34 reporting option to include all general infrastructure of the City acquired or substantially renovated since 1980. The largest component of unrestricted net position, $47.4 million, may be used for functions such as public safety employee salaries and supplies, park and road maintenance, and other general governmental services. The second largest component of unrestricted net position, $32.9 million, represents the unrestricted net position of the City’s business-type activities and may only be spent on activities related to one of the four City utilities (water, sanitary sewer, storm water and solid waste) or to the City-owned ventures (airport, golf course, and cemetery). Examples of utility activities include maintenance of water/sewer mains, pump and lift stations, storm drain flushing, water meter reading, and garbage collection. Activities related to the other City-owned ventures include maintenance of hangars and runways at the airport, and grooming and landscaping at the golf course and cemetery. Restricted governmental fund net position is $15.0 million and is restricted for purposes such as capital project construction, debt service, drug investigation and enforcement, and endowment. Total net investment in capital assets decreased $16.8 million which is due to the sale of governmental fund assets and the increase in bonds in business-type activities. Changes in Net Position The change in net position represents the increase or decrease in City net position resulting from its various activities. Following is a condensed version of the City’s changes in net position. The table shows the revenues, expenses and related changes in net position for both governmental-type and business-type activities: City of Auburn: 2013 CAFR Management’s Discussion and Analysis 23 2013 2012 2013 2012 2013 2012 Revenues: Program revenues Charges for services 9,824,305$ 7,916,897$ 57,533,735$ 50,710,688$ 67,358,040$ 58,627,585$ Operating grants and contributions 1,967,252 3,560,707 90,361 97,052 2,057,613 3,657,759 Capital grants and contributions 5,955,062 17,835,784 5,483,344 7,248,835 11,438,406 25,084,620 General revenues Property taxes 14,490,790 14,970,136 - - 14,490,790 14,970,136 Sales taxes 18,335,157 16,679,278 - - 18,335,157 16,679,278 Interfund utility taxes 3,892,250 3,281,816 - - 3,892,250 3,281,816 Admission & utility taxes 9,156,636 8,856,498 - - 9,156,636 8,856,498 Excise taxes 2,555,850 2,141,620 - - 2,555,850 2,141,620 Other taxes 4,429,090 4,679,333 - - 4,429,090 4,679,333 Investment earnings 121,687 178,618 68,400 82,903 190,087 261,521 Miscellaneous revenue (4,625,627) 547,391 763,717 1,781,676 (3,861,910) 2,329,066 Total revenues 66,102,452 80,648,078 63,939,557 59,921,154 130,042,009 140,569,232 Expenses: General government 7,508,112 9,441,887 - - 7,508,112 9,441,887 Public safety 27,423,015 27,339,301 - - 27,423,015 27,339,301 Transportation 14,861,834 15,736,610 - - 14,861,834 15,736,610 Physical environment 2,699,301 2,535,877 - - 2,699,301 2,535,877 Culture and recreation 9,184,289 8,310,210 - - 9,184,289 8,310,210 Economic environment 2,346,025 2,914,335 - - 2,346,025 2,914,335 Health and human services 510,285 633,175 - - 510,285 633,175 Interest on long-term debt 3,795,024 2,336,960 - - 3,795,024 2,336,960 Water - - 11,893,094 9,655,724 11,893,094 9,655,724 Sanitary sewer - - 21,584,215 19,680,724 21,584,215 19,680,724 Storm drainage - - 7,726,467 8,025,729 7,726,467 8,025,729 Solid waste - - 12,535,078 11,305,322 12,535,078 11,305,322 Golf course - - 1,933,597 1,912,174 1,933,597 1,912,174 Other business-type activities - - 1,857,252 1,954,104 1,857,252 1,954,104 Total expenses 68,327,885 69,248,355 57,529,703 52,533,777 125,857,588 121,782,132 Increase in net position before transfers (2,225,433) 11,399,723 6,409,854 7,387,377 4,184,421 18,787,099 Transfers (218,230) (513,428) 218,230 513,428 - - Change in net position (2,443,663) 10,886,295 6,628,084 7,900,805 4,184,421 18,787,099 Net Position, January 1, as Previously Reported 411,308,460 400,422,165 208,868,303 200,967,498 620,176,763 601,389,663 Change in Accounting Principle (222,743) - (156,715) - (379,458) - Net Position, January 1, as Restated 411,085,717 208,711,588 619,797,305 Net position, December 31 408,642,054$ 411,308,460$ 215,339,672$ 208,868,303$ 623,981,726$ 620,176,762$ Governmental Activities Business-type Activities Total CHANGES IN NET POSITION Comparative Analysis of 2013 and 2012 Governmental activities declined by $2.7 million. Revenues to fund capital assets are recorded as program or general revenues in the statement of activities. However, asset purchases are not recorded as expenses in the year purchased and construction costs are not recorded as expenses in the year incurred. Instead, the costs are recorded as long-term assets and are depreciated over their useful life. General tax revenues increased by 4.4% to $52.9 million between 2012 and 2013, compared to an increase of 1.4% between 2011 and 2012:  Property tax revenue decreased $479,000 or 3.2%.  Sales tax collections increased $1.7 million or 9.9%, reflecting continued improvement in the economy.  Utility and admission tax revenue increased by $300,000 or 3.4%.  Excise tax revenue increased by $414,000 or 19.3%. The increase in excise taxes is due primarily to real estate excise taxes (REET) which increased as a result of an increase in real estate transactions. City of Auburn: 2013 CAFR Management’s Discussion and Analysis 24 Investment earnings fell by $56,931 in governmental activities and $14,503 in business-type activities for a government-wide decline of $71,434 or 27.3%. These declines reflect the continued low interest rates. Government-wide Miscellaneous revenue decreased $6.2 million to $(3.9) million. Miscellaneous revenue of $2.3 million in 2012 was attributable to contributions from King County Flood Control District for flood barrier removal and the City of Algona for the purchase of storage in the Lakeland Hills Reservoir. Miscellaneous revenue of $(3.9) million in 2013 was and attributable to a sale of Land. Government-wide expenses increased by approximately $4.1 million or 3.4% and were attributable to an increase in interest on long term debt, and operating expenses for water, sewer and solid waste utilities. The following first chart summarizes the government activity revenue by source, while the second chart reflects the specific programs’ revenues and related expenses for the various activities of the City. Gaps between specific programs’ revenues and their related expenditures are funded through general tax revenues. Revenues by Source – Government Activities Charges for Services15% Capital Grants & Contributions 9% Operating Grants & Contributions 3% Property Taxes22% Sales Taxes 28% Interfund Utility Taxes 6% Utility & Admission Taxes 14% Other Taxes10% Other Revenue -7% City of Auburn: 2013 CAFR Management’s Discussion and Analysis 25 Program Expenses and Revenues – Governmental Activities $0 $5,000,000 $10,000,000 $15,000,000 $20,000,000 $25,000,000 $30,000,000 Program Revenues Expenses Business-type net position totaled $215.3 million, an increase of 3.1%. Key components of this increase include:  Business-type revenues increased $4.0 million to $63.9 million due to an increase in charges for services which is offset by decreases in capital grants and contributions and miscellaneous revenue.  Income (loss) before capital contributions and transfers amounted to: Water fund: $ 39,600 Sanitary sewer fund: (317,813) Storm fund: 834,790 Solid waste fund: 469,805 Golf course: (477,957) Non-major funds: (268,284) $ 280,141  Net transfers totaled $218,230. City of Auburn: 2013 CAFR Management’s Discussion and Analysis 26 The following chart shows the relative net position balances for each business-type fund: Business Type Net Position – By Fund Water32.0% Sanitary Sewer 36.2% Storm Drainage 24.1% Solid Waste0.7% Airport 4.3% Cemetery0.4%Golf Course2.3% The majority of net position in the City’s enterprise funds relate to capital asset infrastructure, such as water and sewer mains, the airport runway, and the golf course land. As such, most of the net position is not available to support the ongoing expenses of the funds. Following are two charts that contrast the total net position to the spendable portion of net position for each enterprise fund: Comparison of Total Net Position to Spendable Net Position Utility Funds $0 $10,000,000 $20,000,000 $30,000,000 $40,000,000 $50,000,000 $60,000,000 $70,000,000 $80,000,000 Water Sanitary Sewer Storm Drainage Solid Waste Spendable Net Position Total Net Position City of Auburn: 2013 CAFR Management’s Discussion and Analysis 27 Comparison of Total Net Position to Spendable Net Position Other Enterprise Funds ($100,000) $900,000 $1,900,000 $2,900,000 $3,900,000 $4,900,000 $5,900,000 $6,900,000 $7,900,000 $8,900,000 $9,900,000 Airport Cemetery Golf course Spendable Net Position Total Net Position The following first chart depicts the revenues and expenses for business-type funds, while the second shows the various sources of business-type revenue: Business Type Activity Revenues and Expenses Before Capital Contributions and Transfers $0 $1,500,000 $3,000,000 $4,500,000 $6,000,000 $7,500,000 $9,000,000 $10,500,000 $12,000,000 $13,500,000 $15,000,000 $16,500,000 $18,000,000 $19,500,000 $21,000,000 $22,500,000 Water SanitarySewer StormDrainage Solid Waste GolfCourse MinorBusiness-TypeActivities Revenues Expenses City of Auburn: 2013 CAFR Management’s Discussion and Analysis 28 Business Type Activity Revenues By Source Charges for Services 88.6% Capital Contributions 8.6% Investment Earnings 0.1% Business-type Miscellaneous Income2.7% Financial Analysis of Governmental Funds The purpose of the City’s governmental funds is to report on near-term revenues/financial resources and expenditures. This information helps determine the City’s financial requirements in the near future. Specifically, fund balance is a good indicator of the City’s financial resources. As of December 31, 2013, the City’s governmental funds had combined fund balances of $46.9 million, an increase of $4.4 million or 10.3% over the previous year. This increase is primarily due to an increase in fund balance for the Capital Improvement fund due to proceeds from the sale of Auburn Professional Plaza Suite #380 and land of $2.6 million and an increase in fund balance for the Mitigation fund due to a reduction in net transfers. The following table shows the changes in fund balance between 2012 and 2013. Changes in Fund Balance - By Fund Fund 2013 2012 Difference General fund 23,644,516$ 23,701,900$ (57,384)$ Arterial street fund 2,435,922 2,143,713 292,209 Capital improvement fund 9,102,927 6,412,475 2,690,452 Mitigation fund 4,640,767 3,061,179 1,579,588 Cemetery endowment fund 1,629,564 1,585,916 43,648 All other government funds 5,430,224 5,607,774 (177,550) Total 46,883,920$ 42,512,957$ 4,370,963$ Of the government funds’ total fund balances, $17.8 million is unassigned. Nonspendable, restricted, committed and assigned fund balances total $29.1 million. Of this $29.1 million, $10.1 million is earmarked for capital projects, $11.4 million is in special revenue funds that are earmarked for specific purposes and $1.5 million is for endowment. City of Auburn: 2013 CAFR Management’s Discussion and Analysis 29 The general fund is the primary operating fund of the City. All receipts and payments of ordinary City operations are processed through it unless they are required to be accounted for in another fund. At the end of 2013, the general fund had a fund balance of $23.6 million, $5.9 million of which is assigned, and $17.7 million is unassigned. Other funds that had significant fund balances include:  $10.1 million in the capital improvement projects fund; used for various governmental capital asset projects.  $4.6 million in the mitigation fund; used to collect fees from new development to mitigate the cost of new roads and other infrastructure.  $1.6 million in the cemetery endowed care fund; used for maintenance of the cemetery.  $6.8 million in all other government funds; used primarily for local street improvements and local revitalization funding. The following chart shows the relative fund balances for governmental funds: Governmental Funds – Fund Balances General Fund50% Arterial Street Fund5% Capital Improvement Fund 19% Mitigation Fund10% Cemetery Endowment Fund4% All Other Government Funds 12% The general fund balance of $23.6 million decreased by $57,384 from the prior year. Revenues increased with the gradual improvement in the local and regional economic conditions and expenses increased slightly over 2013, as the City continues its vigilance in monitoring general expenditure activity. City of Auburn: 2013 CAFR Management’s Discussion and Analysis 30 General fund revenue increased by $952,840, sources of which are shown in the chart below. Property taxes increased $1.5 million and sales taxes decreased $295,000. Licenses and Permits increased by $697,000 and Charges for Services decreased by $288,000. Building permit and Plan Check activity increased as a result of several projects including the Auburn High School Modernization project, construction of several new buildings and businesses in the City including the HCSA regional hospital laundry facility, construction of the Franciscan Medical Pavilion, various projects at Boeing, the remodel of The Outlet Collection – Seattle, as well as numerous housing developments – most notably The Ridge at Bowman Creek, Lakeland East, Auburn 40 PUD and Kendall Ridge. Intergovernmental revenues decreased by $1.1 million as a result of one-time federal grants and a decrease in liquor revenue distributions from the State of Washington. Fines and Forfeitures decreased by $151,000, reflecting a decline in revenue collections from fines related to the Redflex red light traffic cameras. 2013 General Fund Revenue Increases – By Source Property Taxes$1,548,968 Sales Taxes($294,890) Interfund Utility Taxes $523,229 Utility & Admission Taxes$231,408 Licenses & Permits$697,305 Charges for Services($288,407) Fines & Forfeitures($151,354) Intergovernmental($1,115,739) Miscellaneous($132,298) ($1,300,000) ($1,100,000) ($900,000) ($700,000) ($500,000) ($300,000) ($100,000) $100,000 $300,000 $500,000 $700,000 $900,000 $1,100,000 $1,300,000 $1,500,000 $1,700,000 Financial Analysis of Proprietary Funds The City’s proprietary funds provide the same type of information as found in the government-wide financial statements, but in greater detail. Factors affecting the finances of the City’s proprietary funds have already been addressed in the discussion of the City’s business-type activities. General Fund Budgetary Highlights The City budgets biennially by adopting two single-year budgets at the end of each even-numbered year and then making adjustments as necessary via budget amendments throughout the next two years. Major amendments to the 2012 biennially budget (for years 2012 & 2013) included: City of Auburn: 2013 CAFR Management’s Discussion and Analysis 31  Budgeted General Fund expenditures increased from $54.3 million to $56.2 million. Significant changes include five new staff positions in the Police Department, ratification of labor agreements with the City’s labor groups, and a transfer to the Cumulative Reserve Fund to replenish the fund balance as a result of past withdrawals. Reasons for the variances in the general fund between the final budget and actual results include:  Actual General Fund revenues totaled $53.6 million and exceeded budget by $2.1 million. Significant areas of variance include sales taxes, which exceeded budget by $1.5 million reflecting improvement in the local economy, licenses and permits and charges for services, which exceeded budget by $486,000 and $244,000, respectively, reflecting increased activity from building permits and plan check fees; and utility taxes were below budget by $251,000 reflecting decreased revenue from natural gas and telephone utility taxes.  Actual General Fund expenditures totaled $52.8 million and were under-budget by $3.4 million. Departments experienced savings due to continued vigilance in monitoring city-wide expenditures. Significant areas of under-expenditure occurred within the Security of Person and Property, reflecting staff vacancies within the Police Department and within General Government reflecting savings within the non-departmental program. Capital Asset and Debt Administration Capital Assets The City’s investment in capital assets for both its governmental and business-type activities as of December 31, 2013 totaled $592.6 million (net of accumulated depreciation), a decrease of $2.1 million from 2012. This investment in capital assets includes land, buildings, improvements, machinery and equipment, construction in progress, utility transmission/distribution systems, roads, bridges, and other infrastructure. Major capital asset changes during the year include:  Developer contributions resulted in an increase of $1.6 million in utility infrastructure assets and $0.5 million in governmental infrastructure assets.  $8.6 million was spent by proprietary funds on construction projects during the year.  Sale of government land resulted in a decrease of $6.4 million  Sale of Auburn Professional Plaza Suite #380 resulted in a decrease of $1.0 million  $14.3 million was spent by governmental funds on construction projects during the year. Some of the larger projects in the governmental funds include: $5.9 million on M St SE Grade Separation $1.7 million on 2013 Local Street Pavement Reconstruction $1.1 million on 2013 Pavement Patching Chip seal A summary of the City’s capital assets follows: City of Auburn: 2013 CAFR Management’s Discussion and Analysis 32 Summary of Capital Assets (net of depreciation) As of 12/31/13 As of 12/31/12 As of 12/31/13 As of 12/31/12 As of 12/31/13 As of 12/31/12 Land 103,974,530$ 110,399,907$ 14,505,063$ 14,505,063$ 118,479,593$ 124,904,970$ Building 45,933,740 47,118,785 6,218,212 6,520,898 52,151,952 53,639,683 Site improvements 7,207,075 5,849,425 170,249,102 169,895,574 177,456,177 175,744,999 Equipment 6,628,402 6,889,727 419,207 403,444 7,047,609 7,293,171 Intangibles 656,220 746,511 5,196,600 5,196,600 5,852,820 5,943,111 Infrastructure 210,343,717 186,775,205 - - 210,343,717 186,775,205 Construction in progress 4,987,061 28,451,340 16,314,775 12,008,567 21,301,836 40,459,907 379,730,745$ 386,230,900$ 212,902,959$ 208,530,146$ 592,633,704$ 594,761,046$ Governmental Activities Business-type Activities Total More detailed information on capital assets is provided in Note 7. Long-term Debt At the end of the current fiscal year, the City had total bonded debt outstanding of $92.1 million. Of this amount, $25.9 million is due to other governments, $33.4 million is general obligation bonds, and $32.8 million is revenue bonds for the water, sewer and storm utilities. The City currently maintains a rating of Aa3 with Moody’s and a rating of AA+ with Standard & Poor’s for its general obligation debt. The following schedule summarizes the City’s bonded debt: Summary of Bonded Debt Governmental Activities Business-type Activities Total General obligation bonds 28,660,000$ 4,700,000$ 33,360,000$ Revenue bonds - 32,820,000 32,820,000 Due to other governments 25,966,700$ - 25,966,700 54,626,700$ 37,520,000$ 92,146,700$ Below is a summary of additional, non-bonded long-term debt of the City: Other Long-Term Debt Public Works Trust Fund loans 12,442,903$ Employee leave benefits 2,544,234 Other Post Employment Benefits 4,968,040 19,955,177$ City of Auburn: 2013 CAFR Management’s Discussion and Analysis 33 Washington State law limits the amount of general obligation debt a governmental entity may issue to 7.5% of its total assessed value. Of the 7.5% limit, 2.5% is for general purposes, 2.5% is for open spaces/parks, and 2.5% is for utilities. Non-voted (limited tax) general obligation indebtedness is limited to 1.5% of assessed valuation. The combination of unlimited tax and limited tax general obligation debt for all purposes cannot exceed 7.5% of assessed valuation. Additional information can be found in note 9 and in the statistical section of this report. Economic Factors Over the past year, economic conditions have improved locally. Real estate activity and real property values have improved, retail sales showed a double digit growth for the first time in eight years, and the rate of unemployment in the County and City is at pre recessionary levels. While general economic conditions have improved over the past 18 months, the pace of growth is slowing and several areas at the Federal and State levels of government continue to cast a long shadow. These include long-term unemployed at the national level and Congressional action to extend long- term unemployment benefits; the ongoing disagreements within the United States Congress on finding a long-term solution to funding governmental services and its strategy of Continuing Appropriations Acts to authorize temporary funding solutions for governmental operations; and at the State level, long-term fiscal challenges remain as the State will need to address holes left by one-time budget fixes in the current budget and will need to fund another $1 billion to meet basic education mandates. In 2012, State budget challenges resulted in reduced streamlined sales tax revenue distributions to cities and temporarily suspended its distributions of liquor excise taxes. Such actions may likely recur in the future as the State continues to grapple with its financial situation. As a result of these challenges, the City remains cautious and as a result continues to vigilantly monitor and control its expenses. In the longer-term, the economic outlook for the City is positive. The City has seen significant private investments in the community, including completing sales of several blocks in downtown, which will serve as a catalyst for future redevelopment; modernization and reconstruction of Auburn High School; $35 million in the remodel and rebranding of the regional mall, The Outlet Collection Seattle; and construction of several new buildings and businesses in the City including the HCSA regional hospital laundry facility, construction of the Franciscan Medical Pavilion, and new residential developments. Recent significant development in the City includes:  Issuance of 934 building permits compared to 923 for the year prior. This includes the projects listed above and many new residential developments around the City. As the pace of the economic recovery strengthens, the numbers of commercial and residential building permits and commercial transactions are expected to increase, particularly in the downtown area.  Completion of the M Street SE Grade Separation project. This multi-million project represent a significant investment in the City’s transportation infrastructure and will serve to help to improve local transportation mobility and vehicular and pedestrian safety. In conclusion, the City continues to closely monitor its financial performance and will proactively adjust its current expenditure budget as needed in order to live within its means. While general economic conditions have improved, short-term challenges to the City’s overall financial condition remain. These challenges include a slowing in the pace of economic growth and continued austerity measures at the State and Federal level, both of which may affect the amount of revenues that are available for local services. In the longer term, the City’s financial performance is City of Auburn: 2013 CAFR Management’s Discussion and Analysis 34 expected to continue to improve as the combined effects of improved economic conditions and a series of community investments are expected to take hold. Requests for Information This financial report is designed to provide a general overview of the City of Auburn’s finances for readers with an interest in the City’s finances. Questions concerning this report, or requests for additional information, may be addressed to the Finance Director, City of Auburn, 25 West Main Street, Auburn WA 98001-4998. City of Auburn: 2013 CAFR Basic Financial Statements 35 GOVERNMENT-WIDE FINANCIAL STATEMENTS The City presents two government-wide financial statements. The Statement of Net Position This statement provides information all on city assets and liabilities, with the difference between the two reported as net position. The Statement of Activities This statement is focused on both the gross and net cost of various functions, including both governmental and business-type activities, which are supported by the City’s general tax and other revenues. City of Auburn: 2013 CAFR Basic Financial Statements 36 City of Auburn: 2013 CAFR Basic Financial Statements 37 Governmental Business-Type Activities Activities Total ASSETS: Cash and Cash Equivalents (Note 3)43,846,902$ 31,187,399$ 75,034,301$ Investments (Note 3)3,232,240 997,290 4,229,530 Receivables Taxes 413,882 - 413,882 Customer Accounts 104,285 5,711,968 5,816,253 Other Receivables 2,285,897 955 2,286,852 Special Assessments 496,189 - 496,189 Due From Other Governmental Units (Note 6)2,480,145 370,154 2,850,299 Internal Balances (555,473) 555,473 - Materials and Supplies Inventory 201,118 168,968 370,086 Restricted Assets: Temporarily Restricted: Cash and Cash Equivalents (Note 3)10,443,827 17,003,785 27,447,612 Due From Other Governmental Units (Note 6)2,051,502 - 2,051,502 Permanently Restricted: Cash and Cash Equivalents (Note 3)1,536,316 - 1,536,316 Prepaids 984,319 - 984,319 Long-Term Contracts and Notes 505,029 825,900 1,330,929 Net Pension Asset (Note 10)259,299 - 259,299 Investment in Joint Ventures (Note 15)33,443,583 - 33,443,583 Depreciable Capital Assets (Net of Accumulated Depreciation) (Note 7)270,769,154 176,886,521 447,655,675 Non-Depreciable Capital Assets (Note 7)108,961,591 36,016,438 144,978,029 Total Assets 481,459,805 269,724,851 751,184,656 DEFERRED OUTFLOWS OF RESOURCES: Deferred Outflow from Bond Refunding 27,929 49,856 77,785 Total Deferred Outflow of Resources 27,929 49,856 77,785 LIABILITIES: Accounts Payable 4,746,234 3,669,865 8,416,099 Other Liabilities Payable 357,313 - 357,313 Payable From Restricted Assets: Accrued Interest - 1,695,394 1,695,394 Deposits - 164,196 164,196 Unearned Revenue 1,429,611 921,080 2,350,691 Bonds and Other Debt Payable: Due Within One Year (Note 9)2,616,159 3,099,413 5,715,572 Due in More Than One Year (Note 9)32,761,623 44,885,087 77,646,710 Due to Other Governmental Units: Due Within One Year (Note 9)828,900 - 828,900 Due in More Than One Year (Note 9)25,137,800 - 25,137,800 Net OPEB Obligation (Note 11)4,968,040 - 4,968,040 Total Liabilities 72,845,680 54,435,035 127,280,715 NET POSITION Net Investment in Capital Assets 346,195,793 165,619,867 511,815,660 Restricted: Capital Projects 12,517,220 10,453,443 22,970,663 Nonexpendable Permanent Endowment 1,536,316 - 1,536,316 Debt Service 45,788 5,973,355 6,019,143 Tourist Promotion 131,851 - 131,851 Drug Investigation and Enforcement 710,147 - 710,147 Community Development Block Grant Program 37,519 - 37,519 Central Business District Development 41,068 - 41,068 Rate Stabilization - 412,791 412,791 Unrestricted 47,426,352 32,880,216 80,306,568 Total Net Position 408,642,054$ 215,339,672$ 623,981,726$ The notes to the basic financial statements are an integral part of this statement. Primary Government City of Auburn, WashingtonSTATEMENT OF NET POSITION December 31, 2013 City of Auburn: 2013 CAFR Basic Financial Statements 38 Charges Operating Capital for Services Grants and Grants and Expenses and Fines Contributions Contributions FUNCTIONS / PROGRAMS: Primary Government Governmental Activities: General Government 7,508,112$ 893,326$ 63,943$ 374,018$ Public Safety 27,423,015 2,103,823 883,773 13,339 Transportation 14,861,834 1,967,778 55,743 4,719,033 Physical Environment 2,699,301 398,564 - 304,173 Culture and Recreation 9,184,289 873,970 939,804 131,180 Economic Environment 2,346,025 3,586,844 23,989 38,419 Health and Human Resources 510,285 - - 374,900 Interest on Long-Term Debt 3,795,024 - - - 68,327,885 9,824,305 1,967,252 5,955,062 Business-Type Activities Water 11,893,094 11,695,351 - 1,005,667 Sanitary Sewer 21,584,215 21,711,948 - 3,255,766 Storm Drainage 7,726,467 8,184,303 - 1,033,128 Solid Waste 12,535,078 12,911,232 90,361 - Golf Course 1,933,597 1,454,938 - - Nonmajor Business-Type Activities 1,857,252 1,575,963 - 188,783 57,529,703 57,533,735 90,361 5,483,344 Total Primary Government 125,857,588$ 67,358,040$ 2,057,613$ 11,438,406$ General Revenues: Taxes: Property Retail Sales and Use Interfund Utility Utility Excise Other Investment Earnings Other Revenues Loss on Sale of Capital Assets Contributions to Endowment Funds Transfers (Note 5) Total General Revenues Change in Net Position Net Position, January 1, as Previously Reported Change In Accounting Principle Net Position, January 1, as Restated Net Position, December 31 The notes to the basic financial statements are an integral part of this statement. Program Revenues City of Auburn, Washington STATEMENT OF ACTIVITIES For the Year Ended December 31, 2013 Page 1 of 2 City of Auburn: 2013 CAFR Basic Financial Statements 39 Governmental Business-Type Activities Activity Total (6,176,825)$ -$ (6,176,825)$ (24,422,080) - (24,422,080) (8,119,280) - (8,119,280) (1,996,564) - (1,996,564) (7,239,335) - (7,239,335) 1,303,227 - 1,303,227 (135,385) - (135,385) (3,795,024) - (3,795,024) (50,581,266) - (50,581,266) - 807,924 807,924 - 3,383,499 3,383,499 - 1,490,964 1,490,964 - 466,515 466,515 - (478,659) (478,659) - (92,506) (92,506) - 5,577,737 5,577,737 (50,581,266) 5,577,737$ (45,003,529)$ 14,490,790$ -$ 14,490,790$ 18,335,157 - 18,335,157 3,892,250 - 3,892,250 9,156,636 - 9,156,636 2,555,850 - 2,555,850 4,429,090 - 4,429,090 121,687 68,400 190,087 192,898 763,717 956,615 (4,856,031) - (4,856,031) 37,506 - 37,506 (218,230) 218,230 - 48,137,603 1,050,347 49,187,950 (2,443,663) 6,628,084 4,184,421 411,308,460 208,868,303 620,176,763 (222,743) (156,715) (379,458) 411,085,717 208,711,588 619,797,305 408,642,054$ 215,339,672$ 623,981,726$ Changes in Net Assets Net (Expense) Revenue and Page 2 of 2 City of Auburn: 2013 CAFR Basic Financial Statements 40 MAJOR GOVERNMENTAL FUNDS General Fund The general fund accounts for all of the City's financial resources except those required by statute or generally accepted accounting principles to be accounted for in another fund. As is the case with most municipalities, the general fund is the largest and most important accounting entity of the City. As noted in the statements that follow, the general fund receives the bulk of its revenues from local taxes, followed by State shared revenues, service charges, and other income. The general fund is accounted for on a modified accrual basis. Biennial budgets are adopted with appropriations lapsing at the end of each year of the biennium. Arterial Street Fund This fund is supported by the State of Washington’s motor vehicle fuel tax and by various grants and is used for major street construction. Capital Improvement Projects Fund This fund accounts for major capital acquisitions, and streets and parks construction projects. City of Auburn: 2013 CAFR Basic Financial Statements 41 Other Total General Arterial Capital Governmental Governmental Fund Street Improvement Funds Funds ASSETS: Cash and Cash Equivalents 20,514,377$ 1,431,709$ 9,102,654$ 10,871,449$ 41,920,189$ Investments (Note 3)2,231,310 - - 1,000,930 3,232,240 Receivables: Taxes 413,882 - - - 413,882 Customer Accounts 3,372 2,000 - - 5,372 Other Receivables 1,954,960 - - 328,243 2,283,203 Special Assessments - - - 496,189 496,189 Long-Term Notes and Contracts - - 505,029 - 505,029 Due From Other Governmental Units (Note 6)2,477,092 1,933,934 21,317 96,251 4,528,594 Prepaids 127 - - - 127 Total Assets 27,595,120 3,367,643 9,629,000 12,793,062 53,384,825 LIABILITIES AND FUND BALANCES: Liabilities: Current Payables 2,534,307 503,328 21,044 596,318 3,654,997 Customer Deposits 193,873 - - - 193,873 Other Liabilities Payable 84 - - - 84 Unearned Revenue 1,222,340 428,393 505,029 496,189 2,651,951 Total Liabilities 3,950,604 931,721 526,073 1,092,507 6,500,905 Fund Balances: (Note 1) Nonspendable 127 - - - 127 Nonspendable Permanent Endowment - - - 1,536,316 1,536,316 Restricted - 2,435,922 4,951,862 6,095,809 13,483,593 Committed - - - 3,242,662 3,242,662 Assigned 5,892,611 - 4,151,065 825,768 10,869,444 Unassigned 17,751,778 - - - 17,751,778 Total Fund Balances:23,644,516 2,435,922 9,102,927 11,700,555 46,883,920 Total Liabilities and Fund Balances 27,595,120$ 3,367,643$ 9,629,000$ 12,793,062$ 53,384,825$ Total governmental fund balances as reported on this statement 46,883,920$ Amounts reported for governmental activities in the statement of net position are different because: Capital assets used in governmental activities are not financial resources and therefore not reported in the funds.373,605,463 Other long-term assets are not available to pay for current-period expenditures and therefore are deferred in the funds. Prepaids 984,192 Interest receivable on investments 2,694 Unearned revenue beyond the city's 30-day measurable and available period 1,222,340 Net pension asset 259,299 2,468,525 Deferred Outflows are not available to pay for current-period expenditures and therefore are deferred in the funds. Deferred Outflow from Bond Refunding 27,929 Internal service funds are used by management to charge the cost of certain activities, such as insurance, fleet maintenance and information technology, to individual funds. The assets and liabilities of these internal service 18,517,251 funds are included in governmental activities in the statement of net position. Certain Joint Ventures activities do not use or provide current financial resources but increase net position.7,476,883 Some liabilities are not due and payable in the current period and therefore are not reported in the funds. Bonds and loans payable (33,380,584) Financing debt service interest and other cost for bond issue (154,372) Interest payable (160,856) Net other postemployment obligations (4,968,040) Compensated absences payable (1,674,065) (40,337,917) Net position of government activities as reported on the statement of net position 408,642,054$ The notes to the basic financial statements are an integral part of this statement. City of Auburn, Washington BALANCE SHEET GOVERNMENTAL FUNDS December 31, 2013 City of Auburn: 2013 CAFR Basic Financial Statements 42 Other Total General Arterial Capital Governmental Governmental Fund Street Improvement Funds Funds REVENUES: Taxes: Property 14,415,456$ -$ -$ 120,217$ 14,535,673$ Retail Sales & Use 16,115,145 - - 2,220,012 18,335,157 Interfund Utility 3,336,214 - - 556,036 3,892,250 Utility 7,709,443 - - 1,447,193 9,156,636 Excise 239,371 - 2,225,898 90,581 2,555,850 Other - - - 69,475 69,475 Licenses and Permits 3,041,948 - - - 3,041,948 Intergovernmental 4,716,290 5,173,669 - 1,965,025 11,854,984 Charges for Services 2,144,329 - - 1,747,447 3,891,776 Fines and Forfeitures 1,441,603 - - - 1,441,603 Special Assessments - - - 40,772 40,772 Investment Earnings 54,299 1,779 37,358 50,715 144,151 Miscellaneous 406,061 17,968 76,540 121,104 621,673 Total Revenues 53,620,159 5,193,416 2,339,796 8,428,577 69,581,948 EXPENDITURES: Current: General Government 7,300,667 - - - 7,300,667 Security of Persons and Property 26,856,249 - - 290,341 27,146,590 Physical Environment 2,855,908 - - - 2,855,908 Transportation 2,958,952 8,012,382 - 4,148,196 15,119,530 Economic Environment 2,145,122 - - 547,267 2,692,389 Health and Human Services 631,997 - - - 631,997 Culture and Recreation 7,924,531 - - 794 7,925,325 Debt Service: Principal 1,185,838 90,803 - 961,540 2,238,181 Interest and Other Costs 1,029,945 6,561 - 1,673,262 2,709,768 Capital Outlay 195,673 - 1,085,969 1,464,957 2,746,599 Total Expenditures 53,084,882 8,109,746 1,085,969 9,086,357 71,366,954 Excess (Deficiency) of Revenues Over (Under) Expenditures 535,277 (2,916,330) 1,253,827 (657,780) (1,785,006) OTHER FINANCING SOURCES (USES): Sales of Capital Assets - - 2,593,405 - 2,593,405 Insurance Recoveries 192,898 - - - 192,898 Issuance of Debt - 3,044,491 - - 3,044,491 Transfers In (Note 5)2,193,548 164,048 84,658 2,333,846 4,776,100 Transfers Out (Note 5)(2,979,107) - (1,241,438) (230,380) (4,450,925) Total Other Financing Sources and Uses (592,661) 3,208,539 1,436,625 2,103,466 6,155,969 Net Change in Fund Balances (57,384) 292,209 2,690,452 1,445,686 4,370,963 Fund Balances - Beginning 23,701,900 2,143,713 6,412,475 10,254,869 42,512,957 Fund Balances - Ending 23,644,516$ 2,435,922$ 9,102,927$ 11,700,555$ 46,883,920$ The notes to the basic financial statements are an integral part of this statement. City of Auburn, Washington STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE GOVERNMENTAL FUNDS For the Year Ended December 31, 2013 City of Auburn: 2013 CAFR Basic Financial Statements 43 Net change in fund balances per the Statement of Revenues, Expenditures and Changes in Fund Balance 4,370,963$ Amount reported as change in net position in the Statement of Activities are different because: Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlay ($14,556,227) exceeded depreciation ($13,990,186) in the current period.566,041 Certain Capital and Joint Venture activities do not use or provide current financial resources but increase net position.1,324,447 Governmental funds report sales of assets as other financing sources while the Statement of Activities reports only the gain or loss on sale of capital assets.(7,438,578) Debt proceeds are reported as financing sources in governmental fund and thus contribute to the change in fund balances. In the government-wide statements, however, issuing debt increases long-term liabilities in the statement of net assets and does not affect the statement of activities.(3,044,491) Revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds: Unearned revenue 717,863 Amortization of bond premium 32,283 Investment interest receivable 2,694 752,840 Developer contributions and annexation of infrastructure assets are reported as revenue in the statement of activities, but do not provide current financial resources and are not reported as fund revenue.507,725 Repayment of the principal of long-term debt consumes the current financial resources of governmental funds but has no effect on the net position. 1,059,530 Internal service funds are used by management to charge the costs of certain activities, such as insurance and fleet maintenance, to individual funds. The net revenue (expense) of certain internal service funds is reported with governmental activities.409,488 Some expenses reported in the Statement of Activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds. Amortization of prepaids (109,355) Change in accrued interest payable (2,506) Change in net pension obligation or asset (30,698) Change in net other postemployment benefits (899,601) Change in compensated absences payable 90,532 (951,628) Change in net position on the Statement of Activities (2,443,663)$ The notes to the basic financial statements are an integral part of this statement. City of Auburn, Washington RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENT FUNDS TO THE STATEMENT OF ACTIVITIES For the Year Ended December 31, 2013 City of Auburn: 2013 CAFR Basic Financial Statements 44 Variance with Final Final Budget Original Adopted Actual Positive (GAAP Basis)(GAAP Basis)Results (Negative) REVENUES: Taxes: Property 14,299,417$ 14,299,417$ 14,415,456$ 116,039$ Retail Sales & Use 14,205,030 14,619,470 16,115,145 1,495,675 Interfund Utility 2,991,933 2,991,933 3,336,214 344,281 Utility 7,960,087 7,960,087 7,709,443 (250,644) Excise 298,466 298,466 239,371 (59,095) Licenses and Permits 1,838,484 2,556,384 3,041,948 485,564 Intergovernmental 4,751,784 4,831,660 4,716,290 (115,370) Charges for Services 1,970,947 1,899,942 2,144,329 244,387 Fines and Forfeitures 1,556,500 1,556,500 1,441,603 (114,897) Investment Earnings 64,900 64,900 46,788 (18,112) Miscellaneous 415,200 426,200 406,061 (20,139) Total Revenues 50,352,748 51,504,959 53,612,648 2,107,689 EXPENDITURES: Current: General Government 8,523,903 8,284,609 7,300,667 983,942 Security of Persons and Property 27,394,704 28,138,539 26,856,249 1,282,290 Physical Environment 2,493,468 3,071,531 2,855,908 215,623 Transportation 3,303,864 3,313,353 2,958,952 354,401 Economic Environment 2,574,945 2,523,806 2,145,122 378,684 Health and Human Services 738,759 796,804 631,997 164,807 Culture and Recreation 7,640,695 7,931,512 7,924,531 6,981 Debt Service 1,641,951 2,012,224 2,010,903 1,321 Capital Outlay 5,000 162,221 195,673 (33,452) Total Expenditures 54,317,289 56,234,599 52,880,002 3,354,597 Excess (Deficiency) of Revenues Over (Under) Expenditures (3,964,541) (4,729,640) 732,646 5,462,286 OTHER FINANCING SOURCES (USES): Insurance Recoveries 25,000 87,322 192,898 105,576 Transfers In (Note 5)193,000 267,000 193,548 (73,452) Transfers Out (Note 5)(51,250) (2,051,250) (2,051,646) (396) Total Other Financing Sources and Uses 166,750 (1,696,928) (1,665,200) 31,728 Net Change in Fund Balances (3,797,791) (6,426,568) (932,554) 5,494,014 Fund Balances - Beginning 12,108,801 16,348,942 16,348,942 - Fund Balances - Ending 8,311,010$ 9,922,374$ 15,416,388$ 5,494,014$ RECONCILIATION OF PERSPECTIVE DIFFERENCE BETWEEN BUDGETARY INFORMATION AND GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP): The Cumulative Reserve Fund is combined withthe General Fund for purposes of GASB Statement 54 8,228,128 Fund Balance - Ending (GAAP)23,644,516$ The notes to the basic financial statements are an integral part of this statement. Budget Amounts For the Year Ended December 31, 2013 City of Auburn, Washington STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL GENERAL FUND City of Auburn: 2013 CAFR Basic Financial Statements 45 Variance with Final Final Budget Original Adopted Actual Positive (GAAP Basis)(GAAP Basis)Results (Negative) REVENUES: Taxes: Intergovernmental 10,681,915$ 9,846,086$ 5,173,669$ (4,672,417)$ Investment Earnings 2,500 2,500 1,779 (721) Miscellaneous - 36,485 17,968 (18,517) Total Revenues 10,684,415 9,885,071 5,193,416 (4,691,655) EXPENDITURES: Current: Transportation 920,664 920,664 8,012,382 (7,091,718) Principal 113,983 113,983 90,803 23,180 Interest and Other Costs 11,471 11,471 6,561 4,910 Capital Outlay 12,518,106 14,302,273 - 14,302,273 Total Expenditures 13,564,224 15,348,391 8,109,746 7,238,645 Excess (Deficiency) of Revenues Over (Under Expenditures (2,879,809) (5,463,320) (2,916,330) 2,546,990 OTHER FINANCING SOURCES (USES): Issuance of Debt 1,800,115 3,336,170 3,044,491 (291,679) Transfers In (Note 5)635,540 906,500 164,048 (742,452) Total Other Financing Sources and Uses 2,435,655 4,242,670 3,208,539 (1,034,131) Net Change in Fund Balances (444,154) (1,220,650) 292,209 1,512,859 Fund Balances - Beginning 1,300,518 2,143,713 2,143,713 - Fund Balances - Ending 856,364$ 923,063$ 2,435,922$ 1,512,859$ The notes to the basic financial statements are an integral part of this statement. Budget Amounts For the Year Ended December 31, 2013 City of Auburn, Washington STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL ARTERIAL STREET FUND City of Auburn: 2013 CAFR Basic Financial Statements 46 City of Auburn: 2013 CAFR Basic Financial Statements 47 MAJOR PROPRIETARY FUNDS ENTERPRISE FUNDS The City's enterprise funds are used to account for operations that are financed and operated in a manner similar to private business operations. The goods and services these funds provide to the general public are primarily financed by service charges. Enterprise funds are self-supporting and use the accrual method of accounting. Auburn has five major enterprise funds. The Water Fund This fund accounts for all maintenance, construction, and debt service requirements associated with the water system. The Sanitary Sewer Fund This fund accounts for maintenance, construction, and debt requirements for Auburn's sanitary sewer system. The Storm Drainage Fund This fund accounts for the maintenance, construction and debt service requirements of Auburn's storm drainage system. The Solid Waste Fund Garbage collection services for the City are accounted for in this fund, supported almost entirely by garbage collection fees. Expenses include payment to the City's garbage contractor and other service charges. The Golf Course Fund Accounts for services, maintenance, and operations associated with the Auburn Municipal Golf Course. City of Auburn: 2013 CAFR Basic Financial Statements 48 Governmental ActivitiesNon-Major Total Sanitary Storm Solid Golf Enterprise Enterprise InternalWaterSewerDrainageWasteCourseFundsFundsService Funds ASSETS: Current Assets Cash and Cash Equivalents 6,933,381$ 12,778,843$ 8,894,035$ 1,170,906$ 206,952$ 1,203,282$ 31,187,399$ 13,906,856$ Investments - - 997,290 - - - 997,290 - Restricted Cash: Bond Payments 1,773,039 447,210 829,406 - - - 3,049,655 - Customer Deposits 16,337 95,451 - - - 52,409 164,197 - Other 7,546,533 516,972 5,726,428 - - 13,789,933 - Customer Accounts 999,061 2,375,137 931,782 1,402,027 3,961 - 5,711,968 98,913 Other Receivables - - 955 - - - 955 - Due From Other Governmental Units - - 222,677 62,626 - 84,851 370,154 3,053 Inventories 141,028 7,009 7,566 - - 13,365 168,968 201,114 Total Current Assets 17,409,379 16,220,622 17,610,139 2,635,559 210,913 1,353,907 55,440,519 14,209,936 Noncurrent Assets Long-Term Contracts and Notes - 825,900 - - - - 825,900 - Capital Assets: Land 897,971 1,695,023 5,686,254 - 2,229,636 3,996,179 14,505,063 - Water Rights 5,196,600 - - - - - 5,196,600 - Buildings and Equipment 2,463,741 1,235,992 219,214 496,617 6,620,690 3,665,664 14,701,918 17,942,480 Improvements Other Than Buildings 101,191,935 88,561,822 56,162,320 - 3,023,053 9,751,600 258,690,730 117,158 Construction in Progress 10,812,019 2,372,710 2,922,064 - - 207,982 16,314,775 - Less: Accumulated Depreciation (42,909,512) (23,198,636) (19,321,900) (374,292) (3,531,251) (7,170,536) (96,506,127) (11,934,352) Total Capital Assets (Net of A/D)77,652,754 70,666,911 45,667,952 122,325 8,342,128 10,450,889 212,902,959 6,125,286 Total Noncurrent Assets 77,652,754 71,492,811 45,667,952 122,325 8,342,128 10,450,889 213,728,859 6,125,286 Total Assets 95,062,133 87,713,433 63,278,091 2,757,884 8,553,041 11,804,796 269,169,378 20,335,222 DEFERRED OUTFLOW OF RESOURCES: Deferred Outflow from Bond Refunding - - - - - 49,856 49,856 - LIABILITIES: Current Liabilities: Current Payables 1,078,499 627,749 657,995 1,130,998 61,344 113,280 3,669,865 1,091,237 Customer Deposits - - - - - - - 2,500 Loans Payable - Current 515,855 288,262 - - - - 804,117 - Employee Leave Benefits - Current 180,068 108,988 168,396 22,061 45,025 15,758 540,296 129,997 Revenue Bonds Payable - Current 839,969 144,845 405,186 - - - 1,390,000 - General Obligation Bonds Payable - Current - - - - 240,000 125,000 365,000 - Payable From Restricted Assets:- Accrued Interest 959,978 311,195 424,221 - - - 1,695,394 - Deposits 16,337 95,450 - - - 52,409 164,196 - Total Current Liabilities 3,590,706 1,576,489 1,655,798 1,153,059 346,369 306,447 8,628,868 1,223,734 Noncurrent Liabilities Unearned Revenue 42,200 162,203 597,204 - 119,473 - 921,080 - Employee Leave Benefits 53,695 32,500 50,214 6,578 13,426 4,699 161,112 38,764 Loans Payable 4,155,517 3,243,456 - - - - 7,398,973 - Revenue Bonds Payable 18,564,040 5,050,589 9,287,940 - - - 32,902,569 - General Obligation Bonds Payable - - - - 3,086,675 1,335,758 4,422,433 - Total Noncurrent Liabilities 22,815,452 8,488,748 9,935,358 6,578 3,219,574 1,340,457 45,806,167 38,764 Total Liabilities 26,406,158 10,065,237 11,591,156 1,159,637 3,565,943 1,646,904 54,435,035 1,262,498 NET POSITION: Invested in Capital Assets, Net of Related Debt 53,577,373 61,939,759 35,974,826 122,325 5,015,453 8,990,131 165,619,867 6,125,286 Restricted for: Debt Service 3,403,353 964,182 1,605,820 - - - 5,973,355 - Capital Projects 5,916,219 - 4,537,224 - - - 10,453,443 - Rate Stabilization - - 412,791 - - - 412,791 - Unrestricted 5,759,030 14,744,255 9,156,274 1,475,922 (28,355) 1,217,617 32,324,743 12,947,438 Total Net Position 68,655,975$ 77,648,196$ 51,686,935$ 1,598,247$ 4,987,098$ 10,207,748$ 214,784,199$ 19,072,724$ Adjustment to reflect the consolidation of internal service funds related to enterprise funds 555,473 Net assets of business-type activities 215,339,672$ The notes to the basic financial statements are an integral part of this statement. City of Auburn, WashingtonSTATEMENT OF NET POSITIONPROPRIETARY FUNDSDecember 31, 2013 Enterprise Funds City of Auburn: 2013 CAFR Basic Financial Statements 49 Governmental Activities Non-Major Total Sanitary Storm Sold Golf Enterprise Enterprise Internal Water Sewer Drainage Waste Course Funds Funds Service Funds OPERATING REVENUES: Charges of Services 11,695,351$ 21,711,948$ 8,184,303$ 12,911,232$ 1,184,540$ 969,507$ 56,656,881$ 11,325,483$ Other Operating Revenue - - - - 270,398 606,456 876,854 224,850 Total Operating Revenue 11,695,351 21,711,948 8,184,303 12,911,232 1,454,938 1,575,963 57,533,735 11,550,333 OPERATING EXPENSES: Operations & Maintenance 4,572,464 16,005,927 2,113,050 10,849,639 1,178,640 609,902 35,329,622 7,955,452 Administration 2,951,254 2,139,329 2,919,570 732,547 230,594 701,532 9,674,826 1,095,547 Depreciation / Amortization 2,289,288 1,886,057 1,529,701 18,819 304,519 460,788 6,489,172 1,164,365 Other Operating Expenses 1,371,582 1,940,915 759,178 934,073 58,739 12,390 5,076,877 - Total Operating Expenses 11,184,588 21,972,228 7,321,499 12,535,078 1,772,492 1,784,612 56,570,497 10,215,364 Operating Income (Loss)510,763 (260,280) 862,804 376,154 (317,554) (208,649) 963,238 1,334,969 NON-OPERATING REVENUE (EXPENSE): Interest Revenue 23,019 20,442 20,944 1,348 702 1,945 68,400 18,973 Other Non-Operating Revenue 214,324 180,381 356,010 92,303 - 11,060 854,078 256,178 Gain (Loss) on Sale of Capital Assets - - - - - - - (10,858) Interest Expense (635,239) (253,574) (351,913) - (161,105) (72,640) (1,474,471) - Other Non-Operating Expenses (73,267) (4,782) (53,055) - - - (131,104) - Total Non-Operating Revenue (Expense)(471,163) (57,533) (28,014) 93,651 (160,403) (59,635) (683,097) 264,293 Income (Loss) Before Contributions & Transfers 39,600 (317,813) 834,790 469,805 (477,957) (268,284) 280,141 1,599,262 Capital Contribution 1,005,667 3,255,766 1,033,128 - - 188,783 5,483,344 - Transfers In (Note 5)- - - - 442,230 - 442,230 200,280 Transfers Out (Note 5)(50,000) (50,000) (124,000) - - - (224,000) (743,685) Change in Net Position 995,267 2,887,953 1,743,918 469,805 (35,727) (79,501) 5,981,715 1,055,857 Net Position, January 1, as Previosly Reported 67,719,033 74,779,493 49,964,488 1,128,442 5,056,377 10,311,366 208,959,199 18,016,867 Change in Accounting Principle (58,325) (19,250) (21,471) - (33,552) (24,117) (156,715) - Net Position, January 1, as Restated 67,660,708 74,760,243 49,943,017 1,128,442 5,022,825 10,287,249 208,802,484 18,016,867 Net Position, December 31 68,655,975$ 77,648,196$ 51,686,935$ 1,598,247$ 4,987,098$ 10,207,748$ 214,784,199$ 19,072,724$ Change in net position from this statement 5,825,000 Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds 646,369 Change in net position of business-type activities 6,471,369$ The notes to the basic financial statements are an integral part of this statement. City of Auburn, Washington STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION PROPRIETARY FUNDS For the Year Ended December 31, 2013 Enterprise Funds City of Auburn: 2013 CAFR Basic Financial Statements 50 Page 1 of 2 Government Non Major Activities Sanitary Storm Solid Golf Enterprise Internal Water Sewer Drainage Waste Course Funds Total Service Funds CASH FLOWS FROM OPERATING ACTIVITIES: Cash Received from Users 11,619,718$ 21,449,231$ 8,176,520 12,876,792$ 1,460,191$ 1,580,252$ 57,162,704$ 11,502,608$ Cash Paid to Suppliers for Goods & Services (3,904,962) (15,747,307) (1,845,053) (10,904,047) (528,569) (673,712) (33,603,650) (5,246,537) Cash Paid for Taxes (1,291,295) (1,940,925) (759,178) (934,074) (58,739) (12,390) (4,996,601) (3,400) Cash Paid to Employees (3,353,149) (2,184,388) (2,908,766) (571,419) (875,165) (606,388) (10,499,274) (3,524,568) Other Cash Received - - - - 20,206 - 20,206 - Other Non-Operating Revenue 58,737 110,819 5,363 - - 5,571 180,490 734 Other Cash Paid - - (222,677) (976) - - (223,653) - Net Cash Provided (Used) by Operating Activities 3,129,049 1,687,430 2,446,209 466,276 17,924 293,333 8,040,221 2,728,837 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:Interfund Loan Payable - - - - (350,000) - (350,000) - Operating Grant Received - 69,562 705,853 83,945 - 4,812 864,172 217,121 Transfers In - - - - 442,230 - 442,230 200,280 Transfers Out (50,000) (50,000) (124,000) - - - (224,000) (743,685) Net Cash Provided (Used) by Noncapital Financing Activities (50,000) 19,562 581,853 83,945 92,230 4,812 732,402 (326,284) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Proceeds from Sale of Equipment - - - - - - - 23,801 Purchase of Capital Assets (6,157,370) (799,006) (2,064,882) - - (200,222) (9,221,480) (1,063,684) Contributed Capital 599,728 2,393,479 660,846 - - 188,783 3,842,836 - Capital Grants - - 292,447 - - (45,936) 246,511 - Proceeds from Other Governments 155,587 112,500 58,200 - - - 326,287 - Proceeds from Insurance Settlement - - - - - - - 38,323 Principal Payment on Debt (1,315,702) (429,424) (198,705) - (225,000) (115,000) (2,283,831) - Interest Payment on Debt (495,295) (265,269) (426,157) - (165,867) (68,543) (1,421,131) - Debt Proceeds 8,755,680 - 5,235,686 - - - 13,991,366 - Net Cash Provided (Used) for Capital and Related Financing Activities 1,542,628 1,012,280 3,557,435 - (390,867) (240,918) 5,480,558 (1,001,560) CASH FLOW FROM INVESTING ACTIVITIES: Purchase of Investments - - (1,000,000) - - - (1,000,000) - Interest Received 27,803 20,442 22,699 1,348 702 2,623 75,617 18,973 Net Cash Provided (Used) in Investing Activities 27,803 20,442 (977,301) 1,348 702 2,623 (924,383) 18,973 Net Increase (Decrease) in Cash and Cash Equivalents 4,649,480 2,739,714 5,608,197 551,569 (280,011) 59,850 13,328,799 1,419,966 Cash and Cash Equivalents - Beginning of Year 11,619,810 11,103,544 9,841,673 619,337 486,963 1,195,841 34,867,168 12,486,890 Cash and Cash Equivalents - End of Year 16,269,290$ 13,843,258$ 15,449,870 1,170,906$ 206,952$ 1,255,691$ 48,195,967$ 13,906,856$ CASH AT END OF YEAR CONSISTS OF: Cash and Cash Equivalents 6,933,381 12,778,843 8,894,035 1,170,906 206,952 1,203,282 31,187,399 13,906,856 Restricted Cash - Bond Payments 1,773,039 447,210 829,406 - - - 3,049,655 - Restricted Cash - Customer Deposits 16,337 95,451 - - - 52,409 164,197 - Restricted Cash - Other 7,546,533 516,972 5,726,428 - - - 13,789,933 - Total Cash 16,269,290$ 13,838,476$ 15,449,869 1,170,906$ 206,952$ 1,255,691$ 48,191,184$ 13,906,856$ The notes to the basic financial statements are an integral part of this statement. City of Auburn, Washington STATEMENT OF CASH FLOWS PROPRIETARY FUNDS For the Fiscal Year Ended December 31, 2013 City of Auburn: 2013 CAFR Basic Financial Statements 51 Page 2 of 2 Government Non Major Activities Sanitary Storm Solid Golf Enterprise Internal Water Sewer Drainage Waste Course Funds Total Service Funds RECONCILIATION OF NET OPERATING INCOME TO NEW CASH PROVIDED BY OPERATING ACTIVITIES Operating Income (Loss)510,763$ (260,280)$ 862,804 376,154$ (317,554)$ (208,649)$ 963,238$ 1,334,969$ ADJUSTMENTS TO RECONCILE OPERATING INCOME TONET CASH PROVIDED (USED) BY OPERATING ACTIVITIES: Depreciation 2,289,288 1,886,057 1,529,701 18,819 304,519 460,788 6,489,172 1,164,365 Asset (Increases) Decreases: Accounts Receivable (77,224) (155,956) (7,783) (34,440) 5,253 - (270,150) (47,000) Miscellaneous A/R Revenue 58,737 - (217,315) - - 5,571 (153,007) 734 Inventory 6,490 (529) (2,033) - - 719 4,647 (47,907) Liability Increases (Decreases): Accounts & Vouchers Payable 306,536 196,771 248,905 110,183 5,261 32,200 899,856 335,965 Deposits Payable 1,591 4,059 - - - 4,289 9,939 (725) Wages & Benefits Payable 13,245 7,615 15,264 (1,889) 957 (3,628) 31,564 7,023 Compensated Absences Payable 19,623 9,693 16,666 (2,551) (718) 2,043 44,756 (18,587) Unearned Revenue - - - - 20,206 - 20,206 - Total Adjustments 2,618,286 1,947,710 1,583,405 90,122 335,478 501,982 7,076,983 1,393,868 Net Cash Provided (Used) by Operating Activities 3,129,049$ 1,687,430$ 2,446,209 466,276$ 17,924$ 293,333$ 8,040,221$ 2,728,837$ SCHEDULE OF NONCASH INVESTING, CAPITAL ANDFINANCING ACTIVITIESCapital Assets Acquired by Contributed Capital 405,939 862,287 372,282 - - - 1,640,508 - Increase (Decrease) in Fair Value of Investment - - 2,710 - - - 2,710 - Total Non Cash Investing, Capital and Financing Activities 405,939$ 862,287$ 374,992 -$ -$ -$ 1,643,218$ -$ The notes to the basic financial statements are an integral part of this statement. PROPRIETARY FUNDS City of Auburn, Washington STATEMENT OF CASH FLOWS For the Fiscal Year Ended December 31, 2013 City of Auburn: 2013 CAFR Basic Financial Statements 52 City of Auburn: 2013 CAFR Basic Financial Statements 53 FIDUCIARY FUNDS Fiduciary funds are used to account for assets held by the City of Auburn as a trustee or agent for various individuals, private organizations, and other governmental units. The Fire Relief and Pension Fund is accounted for on an accrual basis. The agency fund is custodial in nature; therefore, no annual budget is adopted. TRUST FUNDS The Fire Relief and Pension Fund This fund accounts for the payment of administrative costs and benefits for retired firefighters (and beneficiaries) who were employed prior to March 1, 1970. Primary revenue sources are general property tax allocations, fire insurance premium tax, and investment interest, in accordance with actuarial recommendations. AGENCY FUNDS The Agency Fund This fund accounts for the funds over which the City is strictly a short-term custodian. City of Auburn: 2013 CAFR Basic Financial Statements 54 Fire Relief Pension Agency Trust Fund Fund ASSETS: Cash and Cash Equivalents 2,372,243$ 1,118,339$ Investments - U.S. Government Securities 81,047 - Receivables: Customer Accounts - 4,758 Interest 659 - Due from Other Governmental Units - 30,000 Total Assets 2,453,949 1,153,097 LIABILITIES: Current Payables 6,959 373,016 Due to Other Governmental Units - 780,081 Total Liabilities 6,959 1,153,097 NET POSITION Held in Trust for Pension Benefits and Other Purposes 2,446,990$ -$ The notes to the financial statements are an integral part of this statement. City of Auburn, Washington STATEMENT OF FIDUCIARY NET POSITION FIDUCIARY FUNDS December 31, 2013 City of Auburn: 2013 CAFR Basic Financial Statements 55 Fire Relief Pension Trust fund ADDITIONS: Fire Insurance Premiums - Intergovernmental Revenue 70,035$ Investment Earnings 10,480 Total Additions 80,515 DEDUCTIONS:Benefit Payments 167,659 Professional Services 6,280 Administrative Expenses 11,430 Total Deductions 185,369 Change in Net Postion (104,854) Net Position - Beginning 2,551,844 Net Position - Ending 2,446,990$ The notes to the financial statements are an integral part of this statement. City of Auburn, Washington STATEMENT OF CHANGES IN FIDUCIARY NET POSTION FIDUCIARY FUNDS For the Year Ended December 31, 2013 City of Auburn: 2013 CAFR Basic Financial Statements 56 City of Auburn: 2013 CAFR Notes to the Financial Statements 57 City of Auburn NOTES TO THE FINANCIAL STATEMENTS December 31, 2013 Note 1 – Summary of Significant Accounting Policies ........................................................................................ 58 A. Reporting Entity ........................................................................................................................ 58 B. Basic Financial Statement ........................................................................................................... 58 C. Measurement Focus, Basis of Accounting, and Basis of Presentation ............................................ 59 D. Budget and Budgetary Accounting .............................................................................................. 62 E. Assets, Liabilities and Fund Balance ............................................................................................. 63 1. Deposits and Investments ..................................................................................................... 63 2. Receivables .......................................................................................................................... 64 3. Interfund Receivables and Payables ...................................................................................... 64 4. Amounts Due From Other Governmental Units.................................................................... 64 5. Inventories and Prepaid Expenses ......................................................................................... 64 6. Restricted Assets .................................................................................................................. 64 7. Interfund Transactions ......................................................................................................... 64 8. Capital Assets ...................................................................................................................... 64 9. Compensated Absences ........................................................................................................ 65 10. Unearned Revenues ............................................................................................................. 66 11. Fund Balance Components – Proprietary Funds .................................................................... 66 12. Fund Balance Components – Governmental Funds ............................................................... 66 F. Revenues, Expenditures and Expenses ......................................................................................... 67 G. Estimates ................................................................................................................................... 68 Note 2 – Stewardship, Compliance and Accountability .................................................................................... 68 Note 3 – Deposits and Investments ................................................................................................................. 68 Note 4 – Property Taxes ..................................................................................................................................71 Note 5 – Interfund Activity ............................................................................................................................. 73 Note 6 – Due From Other Governmental Units............................................................................................... 74 Note 7 – Capital Assets and Depreciation ........................................................................................................ 75 Note 8 – Capital Lease Obligation ................................................................................................................... 76 Note 9 – Long-Term Liabilities ........................................................................................................................ 77 Note 10 – Pension Plans ....................................................................................................................................81 Note 11 – Other Post Employment Benefits ...................................................................................................... 93 Note 12 – Association of Washington Cities Employment Benefit Trust .............................................................. 95 Note 13 – Construction Commitments .............................................................................................................. 95 Note 14 – Cemetery Endowed Care Fund ......................................................................................................... 96 Note 15 – Joint Ventures / Related Party .......................................................................................................... 96 Note 16 – Jointly Governed Organization / Related Party ................................................................................. 99 Note 17 – Contingencies and Litigation ........................................................................................................... 100 Note 18 – Risk Management and Insurance..................................................................................................... 100 Note 19 – Subsequent Event ............................................................................................................................ 101 City of Auburn: 2013 CAFR Notes to the Financial Statements 58 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: The City of Auburn, King County, Washington, was incorporated in 1891. It operates under the laws of the State of Washington applicable to a Non-Charter Code City under a Mayor/Council form of government. A full-time mayor and seven part-time council members administer Auburn, all elected at-large to four-year terms. The City provides a range of municipal services authorized by state law, including water services, sanitary sewer collection, solid waste collection, storm drainage, a general aviation airport, a municipal cemetery and a municipal golf course. The accounting and reporting policies of the City of Auburn, which conform to Generally Accepted Accounting Principles (GAAP) for governments, are regulated by the Washington State Auditor’s Office. The City implemented the following new accounting and reporting standards issued by the Governmental Accounting Standards Board (GASB): a. GASB Statement No. 63 – Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position was adopted for fiscal year 2012 reporting. The statement provides financial reporting guidance for reporting deferred outflows of resources, deferred inflows of resources and net position. The City reported deferred outflows of resources but had no items to report as deferred inflows of resources in 2013. b. GASB Statement No. 65 – Items Previously Reported as Assets and Liabilities was adopted for fiscal 2013 reporting. The Statement establishes accounting and financial reporting standards that reclassify as deferred outflows of resources or deferred inflows of resources, certain items that were previously reported as assets and liabilities. The City has restated is prior year bond issuance costs to conform to GASB No. 65. This adjustment has been reflected as a prior period adjustment for a change in accounting principle in the City’s financial statements, amounting to a decrease to net position of $379,458. The City also has reclassified certain transactions related to bond refunding as deferred outflows of resources. The City’s significant accounting policies are described in the following notes. A. Reporting Entity In accordance with the criteria set forth in Statement No. 14 of the Governmental Accounting Standards Board (GASB) the City’s Comprehensive Annual Financial Report (CAFR) includes all funds controlled by the City. Joint Ventures - Based on the criteria of Governmental Accounting Standards Board (GASB) Statement No. 14 as modified by GASB Statements No. 34 and 61, the Valley Communications Center and South Correctional Entity Facility (SCORE) are included in the accompanying government-wide statement of net position as a joint venture. (Please refer to Notes 9 and 15). Jointly Governed Organizations - The cities of Auburn, Algona and Pacific formed the Valley Regional Fire Authority (VRFA) effective January 1, 2007. The VRFA is a separate municipal corporation of the State of Washington, organized as a regional fire protection service authority under RCW 52.26. The VRFA is not financially accountable to the member cities, none of the participating cities has an ongoing financial interest in the VRFA, and the VRFA is not financially dependent upon any member city. The VRFA imposes its own property tax levy and fire benefit charge. The government-wide financial statements consist of the government-wide statement of net position and the government-wide statement of activities. B. Basic Financial Statements The City’s basic financial statements consist of government-wide financial statements and fund financial statements. The government-wide financial statements, which include the statement of net position and the statement of activities, City of Auburn: 2013 CAFR Notes to the Financial Statements 59 summarize the entire operation of the City. The governmental fund financial statements, which include the balance sheet, statement of revenues, expenditures and changes in fund balance, and statement of revenues, expenditures and changes in fund balance budget and actual statement, provide a more detailed level of reporting. The proprietary fund financial statements, which include statement of net position, statement of revenues, expenses, and changes in net position and statement of cash flows, provide a more detailed level of reporting. The government-wide financial statements report information on all of the non-fiduciary activities of the City. For the most part, the effect of interfund activity has been eliminated from these statements. Because governmental activities are normally supported by taxes and intergovernmental revenue, while business-type activities are generally supported through user fees and charges, governmental activities are reported separately from business-type activities on all government-wide financial statements. The Statement of Net Position reports the assets, deferred outflows of resources, liabilities and deferred inflows of resources of the primary government. The net position section of this statement represents the residual amount of assets and their associated liabilities, deferred outflow of resources and deferred inflows of resources. The net position section is divided into three categories. The first category is Net Investment in Capital Assets, which includes all capital assets, net of accumulated depreciation, less any debt outstanding associated with the assets. Capital assets cannot readily be sold and converted into cash. The second category is Restricted Net Position, which includes those assets, net of their related debt that have a constraint placed on their use. The constraints are either: 1) externally imposed by creditors, such as through debt covenants, grantors, contributors, or laws and regulations of other governments, or 2) imposed by law through constitutional provisions or enabling legislation. The final section is Unrestricted Net Position, and this represents net position that generally can be used for any purpose. However, they are not necessarily in a spendable form, such as cash. The statement of activities demonstrates the degree to which the direct expenses of various functions and activities of the City are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or activity. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services or privileges provided by a function or activity, and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or activity. Taxes and other items that are not properly included among function or activity revenues are instead reported as general revenues. The City does not allocate indirect expenses to functions in the statement of activities. Separate financial statements are included for government funds, proprietary funds, and fiduciary funds, even though fiduciary funds are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported in separate columns in the fund financial statements. C. Measurement Focus, Basis of Accounting and Basis of Presentation The accounts of the City are organized on the basis of funds, each of which is considered a separate accounting entity. Each fund is accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenue, and expenditures or expenses, as appropriate. The City resources are allocated to, and accounted for in, individual funds according to the purpose for which they are spent and how they are controlled. The basis of accounting refers to the timing of when revenues and expenditures or expenses are recognized in the accounts and reported in the financial statements. The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary and pension trust fund financial statements. Interfund services provided and used are not eliminated in the process of consolidation. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. City of Auburn: 2013 CAFR Notes to the Financial Statements 60 The modified accrual basis of accounting is followed in all governmental and permanent funds of the City. Under the modified accrual basis of accounting, revenues are recognized when measurable and available. Revenues are generally considered available if they are collected within the current period or soon enough thereafter (30 days) to pay current liabilities. For derived tax revenues, such as sales tax and utility business and occupation taxes, revenues are recognized in the period when the underlying exchange has occurred. For imposed non-exchange taxes, such as property taxes, revenues are recognized when the use of resources is permitted, or when resources are available. Grant revenue is recognized in the period in which the expenditure occurs and the eligibility requirements have been met. Non-exchange transactions, such as contributions, are recognized when the donation eligibility requirements have been satisfied. Those specific major revenue sources accrued are: Property Taxes – King County and Pierce County collect property taxes and remit to the City daily or monthly. December collections by each County, remitted in January, are recognized as revenues in current year even though received in the subsequent year since they are considered to be measurable and available. Property taxes remaining uncollected at year-end are reported as “unearned revenue”, since they are not considered to be available. Sales Tax Revenues – The State of Washington collects all sales taxes. Auburn’s portion is remitted to the City by the State monthly. The sales tax received in January is recognized as revenue in current year even though received in the subsequent year because of when the underlying transaction occurred and the resources are considered to be measurable and available. Grant Revenues – On cost reimbursement grants, grant revenue is recognized when the expenditure is incurred. Under the modified accrual basis, expenditures are recorded when the fund liability is incurred, except for the un- matured interest and principal on general long-term debt, which is recognized when due, and for compensated absences which are recorded as expenditures when liquidated from expendable available fund resources. Purchases of capital assets from governmental funds are reported as expenditures during the year incurred and the asset is capitalized and reported on the government-wide statement of net position. Long-term liabilities, including compensated absences not currently due and payable, are also reported on the government-wide statement of net position. The accrual basis of accounting is followed in all proprietary, agency, and pension trust funds. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recorded when incurred. The three broad fund categories and nine fund types presented in this report are described below: 1. Governmental Fund Types All governmental funds are accounted for on a spending or “financial flow” measurement focus. This means that only current assets and current liabilities generally are included on their balance sheets. Their reported fund balance (net current assets) is considered a measure of “available spendable resources”. Governmental fund operating statements focus on measuring cash flows rather than net income; they present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. a. General fund – This fund is used to account for all financial resources and transactions of the City not accounted for in another fund, as required. The general fund is always considered a major fund. b. Special Revenue funds – These funds are used to account for the proceeds of specific revenue sources (other than major capital projects) that are legally restricted to expenditures for specified purposes. One special revenue fund is considered major: the arterial street fund. This fund is supported by the State of Washington’s motor vehicle fuel tax and by various grants and is used for major street construction. City of Auburn: 2013 CAFR Notes to the Financial Statements 61 c. Debt Service funds – These funds account for the accumulation of resources for, and the payment of, general long-term and special assessment debt principal, interest, and related costs. These funds also include the LID guarantee fund which provides financial security for outstanding LID bonds. d. Capital Projects funds – These funds are used to account for financial resources to be used for the acquisition or construction of major capital facilities other than those financed by proprietary funds. One capital project fund is considered major: the capital improvement projects fund. This fund accounts for major capital acquisitions, and street and parks construction projects. e. Permanent funds – These funds are used to account for resources that are legally restricted to the extent that only earnings, and not principal, may be used for purposes of supporting a specific City program. 2. Proprietary Fund Types Financial statements for proprietary funds use the economic resources measurement focus and the accrual basis of accounting. This means that all assets and all liabilities (whether current or non-current) associated with their activity are included on their Statement of Net Position. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recorded when incurred. The economic resources measurement focus is applied in the determination of financial position, net income, and cash flow. 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 revenue of the City’s utility funds, other enterprise funds, and internal service funds are charges to customers for sales and services, vehicle and computer replacement, and insurance. Operating expenses for enterprise funds and internal service funds include the cost of sales and services, administrative expenses, taxes, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses, or as capital contributions. Substantially all proprietary fund operating revenues are used as security for revenue bonds. GASB Statement No. 62 Codification of Accounting and Financial Reporting Guidance Contained in Pre- November 30, 1989 FASB and AICPA Pronouncements, provides a codification of private-sector standards of accounting and financial reporting issued prior to December 1, 1989, to be followed in the financial statements of proprietary fund types. The City has adopted provisions of GASB Statement No. 62. a. Enterprise funds – These funds are used to account for services to the general public where all or most of the costs, including depreciation, are to be financed or recovered from users of such services. Five enterprise funds are considered major funds. Utilities provided to residents are accounted for in the water fund, sanitary sewer fund, storm drainage fund and the solid waste fund. The golf course fund is used to account for business operations at the City’s municipal golf course. b. Internal Service funds – These funds are used to account for the financing of goods and services provided to other funds, departments, or governments on a cost reimbursement basis. The City uses internal service funds to account for its fleet of vehicles, its maintenance and operation of facilities, the City-wide provision of computer hardware and software services, and its insurance premiums. 3. Fiduciary Fund Types Fiduciary funds are used to account for assets held by the City in a trustee capacity or as an agent for individuals, private organizations, other governments, and/or other funds. These include a Fire Relief and Pension Trust Fund and Agency Fund. Each fiduciary fund is classified for accounting measurement purposes as either a governmental fund or a proprietary fund. City of Auburn: 2013 CAFR Notes to the Financial Statements 62 a. Fire Relief and Pension Trust Fund - This fund is accounted for on the accrual basis in essentially the same manner as proprietary funds since capital management is critical. Based on actuarial recommendations, there are no employee or employer contributions to the Fire Relief and Pension Plan. Pension benefits are recognized when due; plan administration costs are also recognized when incurred in this fund. b. Agency Fund – This fund is custodial in nature (assets equal liabilities) and does not involve a measurement of results of operations. D. Budget and Budgetary Accounting The City of Auburn budgets in accordance with the Revised Code of Washington (RCW) 35A.33 for the general and special revenue funds. For governmental funds, there are no substantial differences between the budgetary basis and generally accepted accounting principles. Budgetary accounts are integrated in fund ledgers for all budgeted funds, but the financial statements include budgetary comparisons for the biennial budgeted governmental funds only. Budgets established for proprietary and trust funds are “management budgets”, and are not legally required to be reported and, as such, are not reported in the CAFR. The biennial budget is proposed by the Mayor and adopted by the City Council with legal budgetary control at the fund level; i.e., expenditures and other financing sources may not exceed budgeted appropriations at the fund level. The Mayor may authorize transfers within funds; however, the City Council must approve by ordinance any amendments that increase the total for the fund. Any unexpended appropriation balances lapse at the end of the fiscal year. The City prepares the biennial budget on the modified accrual basis, which conforms to Generally Accepted Accounting Principles (GAAP). The CAFR includes budgetary comparisons for those governmental funds with legally adopted budgets. Budget amounts include the adopted current year budget appropriations and any revisions made during the year. State law establishes the budget process and the time limits under which a budget must be developed. The City follows the procedures outlined below to establish its biennial budget: a. Sixty days prior to each odd numbered fiscal year, the Mayor submits to the City Council a preliminary budget for the biennium commencing the following January 1st. The operating budget includes proposed expenditures and funding sources. b. Public hearings are conducted at the Auburn City Council Meetings to obtain taxpayer comments. c. Prior to December 31st, the budget is legally enacted through passage of an ordinance. d. The final operating budget as adopted is published and distributed after adoption. Copies of the budget are made available to the public. City of Auburn: 2013 CAFR Notes to the Financial Statements 63 Original Final Budget Revisions Budget Governmental Funds General Fund 54,368,539$ 3,917,310$ 58,285,849$ Total Governmental Funds 54,368,539 3,917,310 58,285,849 Special Revenue Funds: Local Street 2,474,250$ 390,000$ 2,864,250$ Arterial Street 13,564,224 1,784,167 15,348,391 Hotel/Motel Tax 85,000 - 85,000 Arterial Street Preservation 2,630,920 225,000 2,855,920 Drug Forfeiture Fund 282,922 17,500 300,422 Housing and Community Development 460,000 142,000 602,000 Recreation Trails - - - Business Improvement Area 55,000 - 55,000 Cumulative Reserve 1,616,109 1,000 1,617,109 Mitigation Fees 717,210 155,514 872,724 Total Special Revenue Funds 21,885,635 2,715,181 24,600,816 Total Budgeted Funds 76,254,174$ 6,632,491$ 82,886,665$ ORIGINAL AND SUPPLEMENTAL APPROPRIATIONS E. Assets, Liabilities, and Fund Balance 1. Deposits and Investments It is the City’s policy to invest all temporary cash surplus. At December 31, 2013, the Washington State Local Government Investment Pool (LGIP) was holding $97,392,182 in short-term investments. This amount is classified on the Statement of Net Position as cash and cash equivalents. The interest on these investments is prorated to the various funds based upon ownership of investments. For purposes of the Statement of Cash Flows, cash and cash equivalents includes cash on deposit with financial institutions in both demand and time deposit accounts, and amounts invested in the Local Government Investment Pool, administered by the State Treasurer’s Office because it is operated in a manner consistent with a Securities and Exchange Commission’s Rule 2a-7of the Investment Company Act of 1940. The State Finance Committee is the administrator of the statute that created the pool and adopts appropriate rules. The State Treasurer’s Office is responsible for establishing the investment policy for the pool and reviews it annually. Any proposed changes are reviewed by the LGIP Advisory Committee. The terms of the policy are designed to ensure the safety and liquidity of the funds deposited in the LGIP. The City, by state law, is authorized to purchase certificates of deposit issued by Washington State depositories that participate in Washington Public Deposit Protection Commission (WPDPC), U.S. Treasury and Agency securities, banker’s acceptances, and repurchase agreements. The City purchases repurchase agreements only from institutions that use authorized securities for collateral. The City of Auburn also has signed a “master repurchase agreement” with its primary bank, Key Bank. For purposes of the statement of cash flows, all proprietary fund types and similar trust funds consider all highly liquid investments (including restricted assets) with maturity of three months or less when purchased to be cash equivalents. Investments are recorded at fair value. Adjustments are made to cost for investments amortized over the period to maturity in accordance with GASB Statement No. 31. The investment in the state investment pool is valued at the pool’s share price. City of Auburn: 2013 CAFR Notes to the Financial Statements 64 2. Receivables Taxes receivable consist of property taxes (see Note 4). Accrued interest receivable consists of amounts earned on notes and contracts at the end of the year. Customer accounts receivable consist of amounts owed by private individuals or organizations for goods and services provided. Uncollectible amounts are considered immaterial and the direct write-off method is used. Special assessments are levied against certain property owners and become liens against the property benefited by the improvement. Special assessments receivable consist of current assessments, which are due within one year, delinquent assessments remaining unpaid after the due date, and unearned, uncollected assessments, which have been levied, but are not due within one year. Other receivables include utility taxes due from private organizations and customer accounts receivable, which consist of amounts owed from private individuals or organizations for goods and services, including amounts owed for which billings have not been prepared. Notes and contracts receivable consist of amounts owed on open accounts from private individuals or organizations for goods and services rendered. 3. Interfund Receivables and Payables These accounts include all interfund receivables and payables. A separate schedule of interfund activity is furnished in Note 5. 4. Amounts Due From Other Governmental Units This account includes amounts due from other governments for grants, entitlements and charges for services. A schedule by fund of amounts due from other governmental units is presented in Note 6. 5. Inventories and Prepaid Expenses Government fund types recognize the cost of inventory items and prepaid expenses (expenses that benefit future periods) as expenditures in the year of purchase. In governmental funds, materials and supplies remaining at year- end are immaterial and not included in inventory. In enterprise and internal service funds, inventories are valued at cost using the weighted average costing method. 6. Restricted Assets In accordance with the utility bond ordinances, state law, or other agreements, separate restricted assets have been established. These assets are restricted for specific purposes including the establishment of bond reserve funds, utility rate stabilization funds, financing the ongoing capital improvement programs of the various utilities, customer deposits, nonexpendable permanent cemetery endowment and other purposes. 7. Interfund Transactions During the course of normal operations, the City has numerous transactions between City funds. Interfund services provided and used, such as buying goods and services, are recorded as revenues and expenditures. Internal service fund billings are recorded as revenues in the equipment rental fund and as expenditures in the paying fund. Transfers between funds are included as “other financing sources or uses” in governmental fund types and as other items in proprietary fund types. 8. Capital Assets Capital assets are recorded at historical cost when known or at estimated historical cost when actual costs are not known. Infrastructure, such as roads, bridges and water mains, is reported in the applicable government or business-type activities columns in the government-wide statement of net position. All infrastructure costs have City of Auburn: 2013 CAFR Notes to the Financial Statements 65 been calculated and are reported. Government-donated capital assets are stated at their market value on the date donated. Major outlays for capital assets and improvements are capitalized as projects are constructed. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized. For proprietary funds, interest costs incurred to bring certain assets to the condition and location necessary for their intended use are capitalized as part of the historical cost of acquiring the assets. Additionally, in situations involving the acquisition of certain assets financed with the proceeds of tax-exempt borrowing, any interest earned on related interest-bearing investment from such proceeds are offset against the related interest costs in determining either capitalization rates or limitations on the amount of interest costs to be capitalized. Capital assets of enterprise and internal service funds are recorded at cost. The capital assets of the airport are carried at cost and include those acquired with capital contributed by the Federal Government. Capital assets of all funds are depreciated, and are calculated on the straight-line method using estimated lives as follows: Asset Capitalization Threshold Depreciation Method Estimated Useful Life Building $5,000 Straight-line 20 - 50 years Other Improvements $5,000 Straight-line 10 - 50 years Equipment/Machinery $5,000 Straight-line 2 - 20 years Infrastructure $5,000 Straight-line 25 - 50 years Utility Plant $5,000 Straight-Line 25 - 50 years At the inception of capital leases at the government fund reporting level, the net present value of future minimum lease payments allocable to the capital asset is reflected as expenditures and an “other financing source” of an equal amount. 9. Compensated Absences City employees accrue vacation leave at a variable rate based on years of service. In general, employees are allowed to accumulate vacation leave up to what would be earned in two years. Unaffiliated employees accrue sick leave at the rate of eight hours per month up to 960 hours. Sick leave accumulations over 960 hours at year-end are paid at 25%. Sick leave is not paid upon termination except in some instances upon separation in good standing, where employees hired before 12/31/1984 can be reimbursed at their current rate for unused sick leave up to a maximum of 960 hours, at a rate based on years of service. The City’s union contracts have varied sick leave accruals and payout options. In general, non-exempt employees can accrue up to 80 hours of compensatory time. The City reports compensated absences as liabilities in the government-wide statement of net position and in proprietary funds. Vacation, compensatory time, and sick leave are calculated separately for each employee using the rules described above. The reporting format is in compliance with GASB statement No. 16. Governmental funds recognize expenditures for vacation, sick, and compensatory time when paid. Proprietary and pension trust funds recognize the expense and accrue a liability for vacation and sick leave pay as the leave is earned. All compensated absence liabilities include salary-related payments, where applicable. City of Auburn: 2013 CAFR Notes to the Financial Statements 66 10. Unearned Revenues This account reflects the amounts of taxes and other long-term receivables for which the revenue recognition criteria have not been met. It also reflects prepayments on accounts and grants received in advance. 11. Fund Balance Components – Proprietary Funds In proprietary funds, net position is generally restricted in connection with restricted assets or for legal segregation. These restrictions are identified on the statement of net position of each fund type. The City holds and administers a Utility System Rate Stabilization Fund. The City may, by ordinance, withdraw from the Rate Stabilization Fund for inclusion in the net revenue of the Utility System at any time for any current fiscal year of the Utility System, except that the total amount withdrawn from the Rate Stabilization Fund in any fiscal year may not exceed the total debt service of the Utility System in that year. 12. Fund Balance Components – Governmental Funds Fund balance is presented in the governmental fund financial statements and represents the difference between assets and liabilities reported within the governmental fund. Beginning with the most restrictive constraints, fund balance amounts are reported in the following categories: a. Nonspendable fund balance includes items that cannot be spent. This includes activity that is not in a spendable form (investments, prepaid amounts, long-term portion of loans/notes receivable, or property held for resale unless the proceeds are restricted, committed or assigned) and activity that is legally or contractually required to remain intact. b. Restricted fund balance is externally (outside the City) enforceable limitations imposed by creditors, grantors, contributors, laws and regulations of other governments, or laws through constitutional provisions or enabling legislation. c. Committed fund balance is self-imposed limitations imposed at the highest level of decision making authority, namely, Mayor and City Council. Mayor and City Council approval by ordinance is required to commit, modify or rescind resources. d. Assigned fund balance includes amounts that are constrained by the City’s intent to be used for a specific purpose, but are neither restricted nor committed. It is the City’s policy that intent of use can be assigned by City Council or by a designated official for that purpose. Adopted by City Council in the binennial budget ordinance. For governmental funds, other than the General Fund, this is the residual amount within the fund that is not restricted or committed. e. Unassigned fund balance is the residual amount of the General Fund not included in the four categories described above. Also, any deficit fund balances within the other governmental fund types are reported as unassigned. When expenditure is incurred for purposes for which both restricted and unrestricted resources are available, it is the City’s policy to use restricted resources first. When expenditures are incurred for purposes, for which unrestricted (committed, assigned, and unassigned) resources are available, and amounts in any of these unrestricted classifications could be used, it is the City’s policy to spend committed resources first, then assigned and unassigned, in that order. The following shows the composition of the fund balance of the governmental funds for the fiscal year ended December 31, 2013: City of Auburn: 2013 CAFR Notes to the Financial Statements 67 Arterial Capital Other Total General Street Improvement Governmental Governmental Fund Fund Fund Funds Funds Nonspendable Prepaids 127$ -$ -$ 127$ Cemetery Endowment - - - 1,536,316 1,536,316 Total Nonspendable 127 - - 1,536,316 1,536,443 Restricted Major Street Construction - $2,435,922 - - 2,435,922 REET 1 Allowable Projects - - 2,227,414 - 2,227,414 REET 2 Allowable Projects 2,724,449 - 2,724,449 Parks and Trails Construction Projects - - - 336,740 336,740 Fenster Levee Setback - - - 137,739 137,739 Downtown Infrastructure Improvements - - - 60,691 60,691 City Tourism Promotion - - - 131,851 131,851 Drug Investigation and Enforcement - - - 710,147 710,147 Community Development Block Grant Program - - - 37,519 37,519 Recreational Trail Development - - - 29,550 29,550 Downtown Business Area Improvements - - - 41,068 41,068 Street and Fire Service Mitigation Fees - - - 4,564,716 4,564,716 Debt Service - - - 45,788 45,788 Total Restricted - 2,435,922 4,951,862 6,095,809 13,483,593 Committed Local Street Improvements (Save our Streets)- - - 1,763,391 1,763,391 Aterial Street Preservation - - - 1,479,271 1,479,271 Total Committed - - - 3,242,662 3,242,662 Assigned Appropriations Over Estimated Revenue 5,892,611 - - - 5,892,611 Arterial Street Presevation Fund 4,151,065 3,244 4,154,309 Downtown and Sidewalk Improvements - - - - - Drug Investigation and Enforcement - - - 1,206 1,206 Community Development Block Grant Program - - - 4 4 Recreation Trail Development - - - 37 37 Downtown Business Area Improvements - - - 84 84 Local Street Improvements - - - 153,515 153,515 School Administration Fees - - - 76,051 76,051 Cemetery Capital Enhancement and Maintenance - - - 93,248 93,248 Downtown Infrastructure Improvements - - - 498,379 498,379 Debt Service - - - - - Total Assigned 5,892,611 - 4,151,065 825,768 10,869,444 Unassigned Unassigned 17,751,778 - - - 17,751,778 Total Unassigned 17,751,778 - - - 17,751,778 Total Fund Balances 23,644,516$ 2,435,922$ 9,102,927$ 11,700,555$ 46,883,920$ Governmental Fund Balances December 31, 2013 Major F. Revenues, Expenditures and Expenses Under the modified accrual basis of accounting: • Charges for services, interest on investments, and rents generally are considered measurable and available when earned in governmental funds. • Taxes and federal or state entitlements or shared revenues that have been collected but not remitted by an intermediary collection agency to the City are considered measurable and available. • Special assessments are considered measurable and available when they become due. • Grants are considered measurable and available to the extent that expenditures have been made. Other intergovernmental revenues are considered measurable and available when earned. • Interfund revenues for goods and services are considered measurable and available when earned. • Proceeds from sale of capital assets are recognized as other financing sources. • Revenues from taxpayer-assessed taxes (i.e., sales tax), net of estimated refunds, are recognized when measurable and available to finance expenditures of the current period. • All other revenues are either not measurable or considered not available until collected. • Expenditures are generally recognized when incurred, except for principal and interest on general long-term debt, which are reported as expenditures when paid, and compensated absences, which are reported as expenditures when liquidated from expendable available financial resources. City of Auburn: 2013 CAFR Notes to the Financial Statements 68 Under the accrual basis of accounting: • Revenues are recognized when earned and expenses are recognized when incurred. • Contributions of capital in proprietary fund financial statements arise from internal and external contributions of capital assets or from grants or outside contributions of resources restricted to capital acquisition and construction. Transfers between government and business-type activities on the government-wide statement of activities are reported as general revenues. Transfers between funds reported in the governmental activities column are eliminated, as are transfers between funds reported in the business-type activities column. G. Estimates The preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates. NOTE 2 – STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY There have been no material violations of finance-related legal or contractual provisions, and there have been no expenditures exceeding legal appropriations in any of the funds of the City of Auburn. NOTE 3 – DEPOSITS AND INVESTMENTS At December 31, 2013, the carrying amount of the City’s cash demand deposits with Key Bank totaled $10,023,829 while the bank balance was $11,339,347. In addition, there was $92,800 in petty cash ($10,000 in the Drug Forfeiture Fund to be used for enforcements purposes, $7,300 in various petty cash and cashier change funds, and $75,500 in fiduciary funds). Custodial Credit Risk. Custodial credit risk is the risk associated with the failure of a depository financial institution. In the event of a depository financial institution’s failure, it is the risk that the City would not be able to recover its deposits or collateralized securities that are in the possession of the outside parties. The City minimizes custodial credit risk by following the restrictions set forth in state law. The Federal Deposit Insurance Corporation (FDIC) insures the City’s deposits up to $250,000. The Washington Public Deposit Protection Commission (WPDPC) (established under Chapter 39.58 of the Revised Code of Washington) constitutes a multiple financial institution collateral pool. Pledged securities under the WPDPC collateral pool are held by the WPDPC’s agent in the name of the collateral pool. As required by State law, all investments of the City’s funds are obligations of the U.S. Government, or deposits with Washington State banks that participate in the WPDPC. Pension and permanent funds are not subject to these limitations. All temporary investments are stated at cost. Other investments are shown on the statement of net position at fair value. Investments that were not at par value (cost) as of December 31, 2013 are reported at fair value. The fair value of the position in the state investment pool is the same as the value of shares held by the City in the pool at amortized cost because it is operated in a manner consistent with the Securities and Exchange Commission’s Rule 2a-7 of the Investment Company Act of 1940. City of Auburn: 2013 CAFR Notes to the Financial Statements 69 During 2013, the net decrease in the fair value of investments being held for more than one year is $11,278 at year- end. As of December 31, 2013, the City had the following investments and maturities: Fair Less than 1 to 2 2 to 3 Greater than Investment Type Value 1 year years years 3 years State investment pool 97,392,182$ 97,392,182$ -$ -$ -$ US Treasuries 81,047 - - 81,047 - US Agencies 4,229,530 - - 3,992,800 236,730 101,702,759$ 97,392,182$ -$ 4,073,847$ 236,730$ Reconciliation to government- wide statement of net position: Total investments above 101,702,759$ Plus: cash in checking 10,023,829 Plus: petty cash 92,800 Less: cash investments in fiduciary funds (3,571,629) Total cash and investments, government- wide statement of net position 108,247,759$ Schedule of Investments by Maturities As of December 31, 2013 Investment maturities Governmental Business-Type Activities Activities Total Cash and Cash Equivalents 43,846,902$ 31,187,399$ 75,034,301$ Investments 3,232,240 997,290 4,229,530 Temporarily Restricted: Cash and Cash Equivalents 10,443,827 17,003,785 27,447,612 Permanently Restricted: Cash and Cash Equivalents 1,536,316 - 1,536,316 59,059,285$ 49,188,474$ 108,247,759$ Reconciliation of Cash and Investments Government-Wide Statement of Net Position As of December 31, 2013 Interest Rate Risk Interest rate risk is the risk that changes in interest rates of debt investments will adversely affect the fair value of an investment. As a means of limiting its exposure to fair value losses arising from rising interest rates, the City’s investment policy limits the maximum maturity of an investment to not greater than three years, unless an investment is matched to an anticipated future cash flow. The segmented time distribution presented in the schedule of investments by maturity above indicates how the City has managed its interest rate risk. 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’s investment policy limits the instruments in which the City may invest. These include: 1. United States bonds City of Auburn: 2013 CAFR Notes to the Financial Statements 70 2. United States certificates of indebtedness 3. Bonds or warrants of the State of Washington 4. General obligation or utility revenue bonds or warrants of its own or of any other city or town in the State 5. Its own bonds or warrants of a local improvement district which are within the protection of the local improvement guaranty fund 6. Savings or time accounts in designated public depositories 7. Certificates, notes or bonds of United States agencies, or corporations wholly owned by the United States. 8. Repurchase agreements 9. Banker’s acceptances 10. Federal Home Loan Bank notes and bonds, Federal Land Bank bonds, Federal National Mortgage Association notes, debentures and guaranteed certificates of participation, or obligations of any other government sponsored corporation whose obligations are or may be eligible as collateral for advances to member banks as determined by the Board of Governors of the Federal Reserve System or any portion thereof in investment deposits as defined in RCW 39.8.010 secured by collateral in accordance with RCW 39.58 11. Interim financing warrants of local improvement districts 12. State Local Government Investment Pool As of December 31, 2013, the City had investments in a limited number of investment instruments as follows: • U.S. Treasuries • State Local Government Investment Pool • Federal Farm Credit Bank Bonds • Federal National Mortgage Association Bonds • Lakehaven Utility District (WA) Bonds With the exception of the State Local Government Investment Pool, which is not rated, all of the investments above carried a rating of AAA by Standard & Poor’s rating service at December 31, 2013. Concentration of Credit Risk Concentration of credit risk is the risk of loss attributed to the magnitude of an investment in a single issuer. The City diversifies its investments by security type and institution. The investment policy states: “With the exception of US Treasury securities and the State Investment Pool, no more than 20% of the City’s total investment portfolio will be invested in a single security type or with a single financial institution”. Other information Effective 2002, the City has established arrangements with Bank of New York for safekeeping of all investments. The following is a schedule of investments by fund type: City of Auburn: 2013 CAFR Notes to the Financial Statements 71 State Investment U.S. Pool Securities Total General Fund -$ 2,231,310$ 2,231,310$ Permanent Fund 1,000,930 1,000,930 Enterprise Funds - 997,290 997,290 Fiduciary Funds - 81,047 81,047 Treasurer's Residual Funds 97,392,182 - 97,392,182 Total 97,392,182 4,310,577$ 101,702,759$ As of December 31, 2013 Schedule of Investments by Fund Category and Investment Type NOTE 4 – PROPERTY TAXES Property taxes received during tax year 2013 were $14,535,673 including collection of prior year delinquent assessments. Property taxes assessed for collection in tax year 2013 were based on a regular tax levy of $2.07 per $1,000 on a total 2012 assessed value of $6,909,168,076. For levy year 2013, to be received in 2014, the City’s regular tax levy is $2.10 per $1,000 on a 2013 assessed valuation of $7,288,022,732, as of December 31, 2013, for a total regular levy of $15,792,046. State law provides that debt cannot be incurred in excess of the following percentages of the taxable property of the City. 1.50% of assessed value without a vote of the people 2.50% of assessed value with a vote of the people The City has additional authority to incur the following debt as a percentage of total valuation. 2.50% of assessed value with a vote of the people, indebtedness is for utilities 2.50% of assessed value with a vote of the people, indebtedness is for parks, or open space development At December 31, 2013, the debt limits for the City were as follows: For Parks or Without General For Open Space a Vote Purposes Utilities Development Total Item 1.50%1.00%2.50%2.50%Capacity Legal Limit 109,320,341$ 72,880,227$ 182,200,568$ 182,200,568$ 546,601,704$ Outstanding indebtedness (64,047,284) - - - (64,047,284) Margin available 45,273,057$ 72,880,227$ 182,200,568$ 182,200,568$ 482,554,420$ With a Vote The County Treasurer acts as an agent to collect property taxes levied in the county for all taxing authorities. Taxes are levied annually on January 1 on property values listed as of the prior August 31. The County assesses property at 100% of fair value. A revaluation of all property is required at least once every four years and a physical inspection is required at least once every six years. Property taxes levied by the County Assessor and collected by the County Treasurer become a lien on the first day of the levy year and may be paid in two installments if the total amount exceeds $10. The first half of real property taxes City of Auburn: 2013 CAFR Notes to the Financial Statements 72 is due on April 30 and the balance is due October 31. Delinquent taxes bear interest at the rate of 12% and are subject to additional penalties if not paid as scheduled. At year-end, property taxes are recorded as a receivable with the portion not expected to be collected within 30 days offset by unearned revenue. During the year, property tax revenues are recognized when cash is received. 1. The Washington State Constitution limits the total regular property taxes to 1% of assessed valuation or $10 per $1,000 of value. If the taxes of all districts exceed this amount, each is proportionately reduced until the total is at or below the 1% limit. 2. Washington State law in RCW 84.55.010 limits the annual growth of regular property taxes to the lesser of 1% or the rate of inflation. With a vote of the majority of the voters within a taxing district, the 1% levy limitation can be “lifted” and additional taxes may be levied 3. The City may voluntarily levy taxes below the legal limit. Special levies approved by the voters are not subject to the above limitations. Property taxes are recorded as receivable and offset by an unearned revenue account when levied. Since state law allows for the sale of property for failure to pay taxes, no estimate of uncollectible taxes is made. City of Auburn: 2013 CAFR Notes to the Financial Statements 73 NOTE 5 – INTERFUND ACTIVITY Transfers are legally authorized transfers of resources from a fund receiving revenue to the fund through which resources are to be expended. The principal purposes for interfund transfers include interfund subsidies, transfers into capital project and debt service funds and transfers into internal service funds for interfund facility, information services and equipment rental services: Funds Transfer In Transfer Out Governmental funds: General 193,548$ 2,051,646$ General - Cumulative reserve 2,000,000 927,461 Total general fund 2,193,548 2,979,107 Special revenue funds: Local street fund 150,000 - Arterial street fund 164,048 - Mitigation fees 151,302 220,380 Total special revenue funds 465,350 220,380 Debt service funds: 1998 Library GO 234,049 - 2010 A&B Annex 1,322,499 - 2010 C&D Local Rev 196,200 - LID guarantee - 10,000 Total debt service funds 1,752,748 10,000 Capital projects funds: Capital Improvement Major 84,658 1,241,438 Municipal Park Construction 279,796 - Total capital projects funds 364,454 1,241,438 Proprietary funds: Water - 50,000 Sewer - 50,000 Storm drainage - 124,000 Golf course 442,230 - Commercial retail - - Total proprietary funds 442,230 224,000 Internal service funds: Facilities - 736,685 Information services 100,140 - Equipment rental 100,140 7,000 Total internal service funds 200,280 743,685 Total 5,418,610$ 5,418,610$ All transfers are considered routine. Transfers City of Auburn: 2013 CAFR Notes to the Financial Statements 74 NOTE 6 – DUE FROM OTHER GOVERNMENTAL UNITS As of December 31, 2013, the City had receivables due from other governmental units as follows: General Fund: Auburn Valley Humane Society 102,548$ King County District Court 660,032 King County -Real Estate Excise Taxes 207,469 King County Sheriff's - Registered Sex Offender Grant 10,335 Pierce County - Real Estate Excise Taxes 6,935 Muckleshoot Indian Tribe 127,433 Seattle Police Department 13,697 SCORE 242 US Department of Justice 13,339 WA Auto Theft Prevention Authority - Auto Theft Preventio 5,113 WA State Military Department - EMPG Grant 15,209 WA State Traffic Safety Commission - Seat belt / DUI enforce 3,445 WA State Treasurer - Sales Taxes 1,311,295 Total General Fund 2,477,092 Arterial Street Fund: King County Dept. of Natural Resources & Parks Wastewater 22,196 WA State Transportation Improvement Board - Arterial Street 161,248 Port of Seattle 385,700 Muckleshoot Indian Tribe 50,873 Washington Traffic Safety Commission 48,000 WA Dept. of Transportation - Arterial street imp.1,265,917 Total Arterial Street Fund 1,933,934 Drug Forfeiture Fund: Pierce County Sheriff's Department -TNET 13,363 Housing & Community Development: U.S. Dept. of Housing - Community Development Block Gran 40,904 Municipal Park Construction: Green River Community College 41,984 General Government Capital Improvements: Pierce County - Real Estate Excise Taxes 21,317 Storm Fund: WA State Department of Ecology 50,000 King Conservation District 20,000 King County Flood Control District 152,677 Total Storm Drainage Fund 222,677 Solid Waste Fund: Department of Ecology - ECPG Grant 1,084 King County - Local hazardous waste management grant 20,817 King County - Waste reduction and recycling grant 40,725 Total Solid Waste fund 62,626 Airport Fund Federal Aviation Administration 80,039 WA Department of Transportation -Aviation Division 4,812 Total Airport fund 84,851 Information Services Fund: City of Black Diamond 1,029 VRFA 2,024 Total Information Services fund 3,053 Agency Fund: City of Kent-Police 30,000 Total 4,931,801$ Reconciliation to government-wide statement of net position: Total above due from other governmental units 4,931,801 Amount due to fiduciary fund (30,000) Total due from other governmental units, 4,901,801$ Government-wide statement of net position Due from Other Governmental Units City of Auburn: 2013 CAFR Notes to the Financial Statements 75 NOTE 7 – CAPITAL ASSETS AND DEPRECIATION Capital asset activity for the year ended December 31, 2013 is as follows: Balance Decreases/Balance 1/1/13 Increases Adjustments 12/31/13 Governmental activities: Capital assets, not being depreciated: Land 110,399,907$ 692,680$ (7,118,057)$ 103,974,530$ Construction in progress 28,451,340 4,952,334 (28,416,613) 4,987,061 Total capital assets, not being depreciated 138,851,247 5,645,014 (35,534,670) 108,961,591 Capital assets, being depreciated: Buildings 58,729,893 959,170 (1,055,734) 58,633,329 Improvements other than buildings 16,428,766 2,030,604 (1) 18,459,369 Machinery and equipment 20,810,822 1,083,905 (254,134) 21,640,593 Intangibles 1,095,684 - - 1,095,684 Infrastructure 292,968,753 35,506,457 - 328,475,210 Total capital assets being depreciated 390,033,918 39,580,136 (1,309,869) 428,304,185 Less: accumulated depreciation for: Buildings (11,611,108) (1,142,790) 54,309 (12,699,589) Improvements other than buildings (10,579,341) (672,953) - (11,252,294) Machinery and equipment (13,921,095) (1,310,572) 219,476 (15,012,191) Intangibles (349,173) (90,291) - (439,464) Infrastructure (106,193,548) (11,937,945) - (118,131,493) Total accumulated depreciation (142,654,265) (15,154,551) 273,785 (157,535,031) Total capital assets, being depreciated, net 247,379,653 24,425,585 (1,036,084) 270,769,154 Governmental activities capital assets, net 386,230,900$ 30,070,599$ (36,570,754)$ 379,730,745$ Business-type activities: Capital assets, not being depreciated: Land 14,505,063$ -$ -$ 14,505,063$ Water Rights 5,196,600 - - 5,196,600 Construction in progress 12,008,567 9,082,875 (4,776,667) 16,314,775 Total capital assets, not being depreciated 31,710,230 9,082,875 (4,776,667) 36,016,438 Capital assets, being depreciated: Buildings 11,396,634 - - 11,396,634 Improvements other than buildings 252,217,643 6,473,088 - 258,690,731 Machinery and equipment 3,222,591 82,693 - 3,305,284 Total capital assets being depreciated 266,836,868 6,555,781 - 273,392,649 Less: accumulated depreciation for: Buildings (4,875,736) (302,686) - (5,178,422) Improvements other than buildings (82,322,069) (6,119,556) (4) (88,441,629) Machinery and equipment (2,819,147) (66,930) - (2,886,077) Total accumulated depreciation (90,016,952) (6,489,172) (4) (96,506,128) Total capital assets, being depreciated, net 176,819,916 66,609 (4) 176,886,521 Business-type activities capital assets, net 208,530,146$ 9,149,484$ (4,776,671)$ 212,902,959$ Schedule of Capital Asset Activity City of Auburn: 2013 CAFR Notes to the Financial Statements 76 Depreciation/amortization expense was charged to functions/programs of the City as follows: Depreciation/amortization expense was charged to functions/programs of the City as follows: Governmental activities: General government 987,477$ Public safety 406,854 Transportation 11,575,173 Culture and recreation 1,020,682 Capital assets held by the City's internal service funds are charged to the various functions based on their usage of the assets 1,164,365 Total depreciation/amortization expense - governmental activities 15,154,551$ Business-type activities: Water 2,289,288$ Sanitary sewer 1,886,057 Storm water 1,529,701 Solid waste 18,819 Golf course 304,519 Airport 403,105 Cemetery 57,683 Total depreciation expense - business-type activities 6,489,172$ The 2013 total interest cost incurred for business-type activities was $2,007,542 of which $1,474,471 was charged to expense and $533,071 capitalized. NOTE 8 – CAPITAL LEASE OBLIGATION The City has the following capital lease: One January 1, 2007 the City entered into a capital lease agreement for the Auburn Avenue Theater facility for a 15 year term. The intent is for the City’s Parks, Arts and Recreation department to offer performances to the public, as well as make the facility available for short-term rentals. Lease Payable Theater 2014 76,436$ 2015 76,436 2016 76,436 2017 76,436 2018 76,436 2019-2021 229,305 Total minimum lease payments 611,485 Less: Amounts representing interest (130,714) Present value of future minimum lease payments 480,771$ Schedule of Future Minimum Lease Payments As of December 31, 2013, the gross value of the Auburn Theater facility acquired under the capital lease is $695,504. Monthly lease payments of $6,369.68 plus annual inflation adjustments based on the U.S. CPI-W index are payable through the end of the lease period on December 1, 2021. Interest on the lease was imputed at 6.22 percent. City of Auburn: 2013 CAFR Notes to the Financial Statements 77 NOTE 9 – LONG-TERM LIABILITIES General Obligation Bonds are direct obligations of the City for which its full faith and credit are pledged. Debt service for voter-approved issues, of which the City has none, would be funded by special property tax levies. Debt service for City Council authorized bonds, also called councilmanic bonds, is funded from regular property taxes or general revenues, and is generally paid from debt service funds but can be paid from other designated funds. General Obligation Bonds outstanding at year-end are as follows: • 2005 Limited Tax General Obligation refunding bonds were issued to partially advance refund the 1999 Limited Tax Obligation bonds. 1999 Limited Tax General Obligation bonds were issued for construction of hangars at the Auburn Municipal Airport. The 2005 Limited Tax General Obligation refunding bonds mature in 2019 and are paid from the Airport fund. • 2006 Limited Tax General Obligation bonds were issued to fund improvements at the Auburn Golf Course including a pro shop, clubhouse and related facilities, as well as construction of a columbarium at the Mountain View Cemetery. • 2006 Limited Tax General Obligation (taxable) bonds were issued to construct and equip restaurant, banquet and related facilities for a restaurant facility to be located at the Auburn Golf Course clubhouse. • 2010A Limited Tax General Obligation Improvement and Refunding bonds were issued to provide funds with which to (i) pay a portion of the costs of acquisition of certain condominium units to provide city office space near City Hall (City Hall Annex) in lieu of the City Hall Annex lease and (ii) to partially advance refund the 1998 Limited Tax General Obligation bonds. The 1998 Limited General Obligation bonds were issued for construction of a library to be owned and operated by the King County Rural Library District. The City advance refunded the 1998 Limited Tax General Obligation bonds in 2010. The debt is considered extinguished in an in-substance defeasance and, accordingly is not reflected in the accompanying financial statements. The remaining balance of outstanding defeased debt as of December 31, 2013 is $1,245,000. • 2010B Limited Tax General Obligation Bonds (Taxable Build America Bonds – Direct Payment) bonds were issued to provide funds with which to pay a portion of the costs of acquisition of certain condominium units to provide city office space near City Hall (City Hall Annex) in lieu of the City Hall Annex lease. • 2010C Limited Tax General Obligation Bonds were issued to provide funds with which to pay portion of the downtown infrastructure improvements in the City’s revitalization area. • 2010D Limited Tax General Obligation Bonds (Taxable Build America Bonds – Direct Payment) bonds were issued to provide funds with which to pay portion of the downtown infrastructure improvements in the City’s revitalization area. Revenue Bonds are payable from water, sewer and storm drainage utility revenues generated by those enterprise funds. State of Washington Public Works Trust Fund Loans are a direct responsibility of the City. Auburn currently has eight outstanding loans with a remaining total balance of $12,442,903. Six of the loans are for water and sewer construction projects. The loans are being repaid from water and sewer fund revenues over a 20-year period that begins upon each project completion (PWTF 1999, PWTF 2001, PWTF 2002, PWTF 2004, PWTF 2006 & PWTF 2013). The other two loans are for arterial street improvements and are being repaid from arterial street fund revenues over a 20-year period that began in 2009 upon project completion (PWTF 2008) and over a 29-year period that began in 2013 upon project completion (PWTF 2012). Compensated Absences are paid by those funds that have employees. These are mostly payable by the General fund and enterprise funds. City of Auburn: 2013 CAFR Notes to the Financial Statements 78 The following schedules summarize the long-term debt transactions of the City for the year ended December 31, 2013. The first table summarizes all debt transactions for Auburn, while the second provides detailed information on all long- term debt. Additional schedules reflect total annual debt service requirements to maturity and the reconciliation of debt by fund type. General Obligation (1)Utility Employee Leave Benefit Other Post Employment Benefits Premium Due To Other Governments Total Long-term debt payable 12/31/12 36,435,623$ 30,026,474$ 2,608,597$ 4,068,439$ 799,391$ 27,379,850$ 101,318,374$ Added 3,044,491 12,940,447 2,014,434 2,024,410 1,050,919 - 21,074,701 Retired (1,399,530) (1,943,831) (2,078,797) (1,124,809) (135,936) (1,413,150) (8,096,053) Long-term debt payable 12/31/13 38,080,584$ 41,023,090$ 2,544,234$ 4,968,040$ 1,714,374$ 25,966,700$ 114,297,022$ (1) Includes capital leases CHANGES IN LONG-TERM LIABILITES SUMMARY Employee Leave Benefits Year Principal Interest Principal Interest Principal Interest Principal Principal (1)Interest 2014 2,153,900$ 3,401,272$ 47,882$ 28,554$ 2,382,860$ 1,616,843$ 1,959,830$ 6,544,472$ 5,046,669$ 2015 2,235,150 3,310,406 50,947 25,490 2,412,860 1,581,893 58,440 4,757,397 4,917,789 2016 2,099,950 3,219,326 54,207 22,229 2,457,859 1,531,384 58,440 4,670,456 4,772,939 2017 2,189,400 3,127,140 57,677 18,759 2,502,860 1,478,310 58,440 4,808,377 4,624,209 2018 2,266,100 3,027,605 61,368 15,068 2,552,859 1,424,523 58,440 4,938,767 4,467,196 2019-2023 10,335,550 13,886,817 208,690 20,614 12,439,538 6,072,136 292,203 23,275,981 19,979,567 2024-2028 11,004,250 11,586,828 - - 12,449,243 3,579,665 58,441 23,511,934 15,166,493 2029-2033 12,477,150 8,683,274 - - 7,197,944 673,613 - 19,675,094 9,356,887 2034-2038 13,325,250 4,595,369 - - 541,800 16,254 - 13,867,050 4,611,623 2039-2043 1,240,000 597,143 - - 325,080 3,252 - 1,565,080 600,395 Totals 59,326,700$ 55,435,180$ 480,771$ 130,714$ 45,262,903$ 17,977,873$ 2,544,234$ 107,614,608$ 73,543,767$ (1)107,614,608$ Principal debt service requirements to maturity 4,968,040 Other Post Employment Benefits 1,714,374 Premium 114,297,022$ Long Term Liabilities 12/31/2013 Obligation Bonds Obligation Bonds/Loans Long-Term Debt DEBT SERVICE REQUIREMENT TO MATURITY General Capital Lease Utility Total City of Auburn: 2013 CAFR Notes to the Financial Statements 79 Interest Maturity Original Principal Balance Balance Due Within Issue Name Rates Date Amount Installments 12/31/12 Additions Reductions 12/31/13 One Year GOVERNMENTAL DEBT General Obligation Bonds: LTGO 2010A (1)2.00-4.50%12/1/2018 4,385,000$ $235,000 - $720,000 2,480,000$ -$ (720,000)$ 1,760,000$ 745,000$ LTGO 2010B (1)3.27-6.24%12/1/2039 20,365,000 $535,000 - $1,240,000 20,365,000 - - 20,365,000 0 LTGO 2010C (1)2.00-4.00%12/1/2014 920,000 $105,000 - $215,000 420,000 - (205,000) 215,000 215,000 LTGO 2010D (1)3.27-6.19%12/1/2034 6,320,000 $220,000 - $445,000 6,320,000 - - 6,320,000 0 Total General Obligation Bonds 31,990,000 29,585,000 - (925,000) 28,660,000 960,000 Capital Lease: Auburn Avenue Theater 6.22%12/31/2021 695,504 $3,877 - $6,333 524,498 - (43,727) 480,771 47,882 Employee Leave Benefits: Compensated absences - 1,951,945 1,459,085 (1,568,204) 1,842,826 1,419,534 Other Post Employment Benefits: LEOFF 1 - 4,068,439 2,024,410 (1,124,809) 4,968,040 - Public Works Trust Fund Loans: PWTF 2008 0.50%7/1/2028 1,527,273 80,383 1,286,125 - (80,383) 1,205,742 80,383 PWTF 2012 0.50%6/1/2041 3,044,491 108,360 - 3,044,491 (10,420) 3,034,071 108,360 Total Public Works Trust Fund Loans 4,571,764 1,286,125 3,044,491 (90,803) 4,239,813 188,743 Premium Related to Debt 192,240 - (37,868) 154,372 - Total Governmental 37,257,268$ 37,608,247$ 6,527,986$ (3,790,411)$ 40,345,822$ 2,616,159$ BUSINESS-TYPE DEBT General Obligation Bonds GO refunding bond 2005 (1)4.00-4.50%12/1/2019 1,375,000$ $10,000 - $190,000 1,055,000$ -$ (115,000)$ 940,000$ 125,000$ GO bond 2006 (1)4.25-5.00%12/1/2025 3,275,000 $5,000 - $395,000 3,275,000 - - 3,275,000 - GO bond 2006 taxable 5.40-5.52%12/1/2015 1,885,000 $45,000 - $245,000 710,000 - (225,000) 485,000 240,000 Total General Obligation Bonds 6,535,000 5,040,000 - (340,000) 4,700,000 365,000 Revenue Bonds: Utility sys refunding bonds 2005 (1)3.00-4.75%11/1/2016 2,765,000 $45,000 - $355,000 1,330,000 - (310,000) 1,020,000 325,000 Utility sys bonds 2010 (1)3.00-6.40%12/1/2030 21,295,000 $575,000 - $1,720,000 21,295,000 - (575,000) 20,720,000 590,000 Utility sys bonds 2013 (1)0.38-4.00%12/1/2032 11,415,000 $335,000 - $785,000 - 11,415,000 (335,000) 11,080,000 475,000 Total Revenue Bonds 35,475,000 22,625,000 11,415,000 (1,220,000) 32,820,000 1,390,000 Employee Leave Benefits: Compensated absences - 656,652 555,349 (510,593) 701,408 540,296 Public Works Trust Fund Loans: PWTF 1999 1.00%7/1/2019 3,465,000 $182,368 1,276,579 - (182,368) 1,094,211 182,368 PWTF 2001 0.50%7/1/2021 4,290,405 $227,086 2,043,771 - (227,086) 1,816,685 227,085 PWTF 2002 1.00%7/1/2022 641,250 $26,115 261,145 - (26,115) 235,030 26,115 PWTF 2004 0.50%7/1/2024 2,049,036 $107,844 1,294,128 - (107,844) 1,186,284 107,844 PWTF 2006 0.50%7/1/2026 3,325,000 $180,418 2,525,851 - (180,418) 2,345,433 180,418 PWTF 2013 2.00%6/1/2032 1,525,447 $80,287 - 1,525,447 - 1,525,447 80,287 Total Public Works Trust Fund Loans 15,296,138 7,401,474 1,525,447 (723,831) 8,203,090 804,117 Premium Related to Debt 607,151 1,050,919 (98,068) 1,560,002 - Total Proprietary 57,306,138$ 36,330,277$ 14,546,715$ (2,892,492)$ 47,984,500$ 3,099,413$ Total All Funds 94,563,406$ 73,938,524$ 21,074,701$ (6,682,903)$ 88,330,322$ 5,715,572$ (1) Subject to federal arbitrage compliance rules. CHANGES IN LONG-TERM LIABILITIES City of Auburn: 2013 CAFR Notes to the Financial Statements 80 Due to Other Governments • Valley Communication Center Public Development Authority issued General Obligation bonds in 2000 for a new dispatch facility. The City is contracted to pay 20% of the debt service of these 15-year bonds that mature in 2015. This debt is paid from the General fund. • SCORE Public Development Authority issued General Obligation bonds in 2009 to acquire, construct, improve, and equip a consolidated correctional facility located in Des Moines, Washington. The city is contracted to pay 31% of the debt service of these 30 year bonds that mature in 2039. This debt is paid from the General fund. Interest Maturity Original Principal Balance Balance Due Within Issue Name Rates Date Amount Installments 12/31/12 Additions Reductions 12/31/13 One Year GOVERNMENTAL DEBT: General Obligation Bonds: Valley Communication Public Dev Auth 3.00-4.00%12/1/2015 1,065,000$ $21,000 - $220,000 647,000$ -$ (215,000)$ 432,000$ 212,000$ SCORE Public Development Authority 3.00-6.62%1/1/2039 26,732,850 $593,650 - $1,601,150 26,732,850 - (1,198,150) 25,534,700 616,900 Total General Obligation Bonds Due Other Governments 27,797,850$ 27,379,850$ -$ (1,413,150)$ 25,966,700$ 828,900$ CHANGES IN LONG-TERM LIABILITIES DUE TO OTHER GOVERNMENTS Enterprise Governmental Funds Funds 12/31/13 Liabilities payable from restricted assets: Revenue bonds 2,922,900$ -$ 2,922,900$ Long-term bonds payable: General obligation bonds 4,700,000 28,660,000 33,360,000 Capital lease - 480,771 480,771 Revenue bonds 29,897,100 - 29,897,100 Public Works Trust Fund loans 8,203,090 4,239,813 12,442,903 Due to Other Governments - 25,966,700 25,966,700 Employee leave benefits 701,408 1,842,826 2,544,234 Other Post Employment Benefits - 4,968,040 4,968,040 Premium 1,560,002 154,372 1,714,374 Total long-term debt 47,984,500$ 66,312,522$ 114,297,022$ LONG-TERM LIABILITIES RECONCILIATION Revenue Bond Debt Service Coverage The required debt service coverage for the 2013 utility revenue bonds, 2010 utility revenue bonds and the 2005 utility revenue refunding bonds is 1.25. Debt service coverage for 2013 was 1.74. The ratio indicates the direction and degree to which the revenue stream exists to meet the current debt burden. The ratio is calculated by dividing the net revenue available by debt service requirements. The restricted rate stabilization fund for the utility revenue bonds was established to minimize the effect on rates of revenue fluctuations between years. By transferring cash into this stabilization fund, adjusted net revenue available for debt service, as defined, would be decreased by the amount of the transfer. Conversely, transfers out of the account would increase adjusted net revenue available for debt service. City of Auburn: 2013 CAFR Notes to the Financial Statements 81 Estimated Arbitrage Rebate The Federal Tax Reform Act of 1986 requires issuers of tax-exempt debt of over $5 million to make payments to the United States Treasury of investment interest received at yields that exceed the issuer’s tax-exempt borrowing rates. Payments of arbitrage rebate amounts due under these regulations must be made to the U.S. Treasury every five years. The City’s estimated rebatable arbitrage amount as of December 31, 2013 is $0 for its tax-exempt bond issues subject to the Tax Reform Act issued through that date. NOTE 10 – PENSION PLANS Substantially all City 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 retirement plans. The Department of Retirement Systems (DRS), a department within the primary government of the State of Washington, issues a publicly available comprehensive annual financial report (CAFR) that includes financial statements and required supplementary information for each plan. The DRS CAFR may be obtained by writing to: Department of Retirement Systems, Communications Unit, P.O. Box 48380, Olympia, WA 98504-8380; or it may be downloaded from the DRS website at www.drs.wa.gov. The following disclosures are made pursuant to GASB Statement 27, Accounting for Pensions by State and Local Government Employers, and Statement 50, Pension Disclosure, an Amendment of GASB Statement No. 25 and No. 27. Public Employees’ Retirement System (PERS) Plans 1, 2, and 3 Plan Description The Legislature established PERS in 1947. Membership in the system includes: elected officials; state employees; employees of the Supreme, Appeals, and Superior courts; employees of legislative committees; community and technical colleges, college and university employees not participating in higher education retirement programs; employees of district and municipal courts; and employees of local governments. Approximately 50 percent of PERS salaries are accounted for by state employment. PERS retirement benefit provisions are established in chapters 41.34 and 41.40 RCW and may be amended only by the State Legislature. PERS is a cost-sharing multiple-employer retirement system comprised of three separate plans for membership purposes: Plans 1 and 2 are defined benefit plans and Plan 3 is a defined benefit plan with a defined contribution component. PERS members who joined the system by September 30, 1977 are Plan 1 members. Those who joined on or after October 1, 1977 and by either, February 28, 2002 for state and higher education employees, or August 31, 2002 for local government employees, are Plan 2 members unless they exercise an option to transfer their membership to Plan 3. PERS members joining the system on or after March 1, 2002 for state and higher education employees, or September 1, 2002 for local government employees have the irrevocable option of choosing membership in either PERS Plan 2 or PERS Plan 3. The option must be exercised within 90 days of employment. An employee is reported in Plan 2 until a choice is made. Employees who fail to choose within 90 days default to PERS Plan 3. Notwithstanding, PERS Plan 2 and Plan 3 members may opt out of plan membership if terminally ill, with less than five years to live. PERS is comprised of and reported as three separate plans for accounting purposes: Plan 1, Plan 2/3, and Plan 3. Plan 1 account for the defined benefits of Plan members. Plan 2/3 accounts for the defined benefits of Plan 2 members and the defined benefit portion of benefits for Plan 3 members. Plan 3 accounts for the defined contribution portion of benefits for Plan 3 members. Although members can only be a member of either Plan 2 or Plan 3, the defined benefit portions of Plan 2 and Plan 3 are accounted for in the same pension trust fund. All assets of this Plan 2/3 defined City of Auburn: 2013 CAFR Notes to the Financial Statements 82 benefit plan may legally be used to pay the defined benefits of any of the Plan 2 and Plan 3 members or beneficiaries, as defined by the terms of the plan. Therefore, Plan 2/3 is considered to be a single plan for accounting purposes. PERS Plan 1 and Plan 2 retirement benefits are financed from a combination of investment earnings and employer and employee contributions. Employee contributions to the PERS Plan 1 and Plan 2 defined benefit plans accrue interest at a rate specified by the Director of DRS. During DRS Fiscal Year 2013, the rate was five and one-half percent compounded quarterly. Members of PERS Plan 1 and Plan 2 can elect to withdraw total employee contributions and interest thereon upon separation from PERS-covered employment. PERS Plan 1 members are vested after the completion of five years of eligible service. Plan 1 members are eligible for retirement at any age after 30 years of service, or at the age of 60 with five years of service, or at the age of 55 with 25 years of service. The monthly benefit is two percent of the average final compensation (AFC) per year of service. AFC is the monthly average of the 24 consecutive highest paid service credit months. The retirement benefit may not exceed 60 percent of AFC. This monthly benefit is subject to a minimum for PERS Plan 1 retirees who have 25 years of service and have been retired 20 years, or who have 20 years of service and have been retired 25 years. Plan 1 members who retire from inactive status prior to the age of 65 may receive actuarially reduced benefits. If a survivor option is chosen, the benefit is further reduced. A cost-of-living allowance (COLA) was granted at age 66 based upon years of service times the COLA amount. Plan 1 members may elect to receive an optional COLA that provides an automatic annual adjustment based on the Consumer Price Index. The adjustment is capped at three percent annually. To offset the cost of this annual adjustment, the benefit is reduced. PERS Plan 1 provides duty and non-duty disability benefits. Duty disability retirement benefits for disablement prior to the age of 60 consist of a temporary life annuity. The allowance amount is $350 a month, or two-thirds of the monthly AFC, whichever is less. The benefit is reduced by any workers’ compensation benefit and is payable as long as the member remains disabled or until the member attains the age of 60, at which time the benefit is converted to the member’s service retirement amount. A member with five years of covered employment is eligible for non-duty disability retirement. Prior to the age of 55, the allowance amount is 2 percent of the AFC for each year of service reduced by 2 percent for each year that the member’s age is less than 55. The total benefit is limited to 60 percent of the AFC and is actuarially reduced to reflect the choice of a survivor option. Plan 1 members may elect to receive an optional COLA amount (based on the Consumer Price Index), capped at 3 percent annually. To offset the cost of this annual adjustment, the benefit is reduced. PERS Plan 1 members can receive credit for military service while actively serving in the military if such credit makes them eligible to retire. Members can also purchase up to 24 months of service credit lost because of an on-the-job injury. The survivor of a PERS Plan 1 member who does after having earned ten years of service credit has the option, upon the member’s death, of either a monthly survivor benefit or the lump sum of contributions plus interest. PERS Plan 2 members are vested after the completion of five years of eligible service. Plan 2 members are eligible for normal retirement at the age of 65 with five years of service. The monthly benefit is 2 percent of the AFC per year of service. The AFC is the monthly average of the 60 consecutive highest-paid service months. There is no cap on years of service credit; and a cost-of-living allowance is granted (based on Consumer Price Index), capped at 3 percent annually. PERS Plan 2 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 reduced benefit. The benefit is reduced by an early retirement factor (ERF) that varies according to age, for each year before age 65. City of Auburn: 2013 CAFR Notes to the Financial Statements 83 PERS Plan 2 members who have 30 or more years of service credit and are at least 55 years old can retire under one of two provisions if hired prior to May 1, 2013: • With a benefit that is reduced by 3 percent for each year before age 65. • With a benefit that has a smaller (or no) reduction (depending on age) that imposes stricter return-to-work rules. PERS Plan 2 members hired on or after May 1, 2013 have the option to retire early by accepting a reduction of 5 percent for each year of retirement before age 65. This option is available only to those who are age 55 or older and have at least 30 years of service. PERS Plan 2 retirement benefits are also actuarially reduced to reflect the choice, if made, of a survivor option. The surviving spouse or eligible child or children of a PERS Plan 2 member who dies after having earned ten years of service credit has the option of either a monthly benefit or a lump sum payment of the member’s contributions plus interest. PERS Plan 3 has a dual benefit structure. Employer contributions finance a defined benefit component and member contributions finance a defined contribution component. As established by Chapter 41.34 RCW, employee contribution rates to the defined contribution component range from 5 percent to 15 percent of salaries, based on the member choice. Members who do not choose a contribution rate default to a 5 percent rate. There are currently no requirements for employer contributions to the defined contribution component of PERS Plan 3. PERS Plan 3 defined contribution retirement benefits are dependent upon the results of investment activities. Members may elect to self-direct the investment of their contributions. Any expenses incurred in conjunction with the self- directed investments are paid by the members. Absent a member’s self-direction, PERS Plan 3 contributions are invested in the Retirement Strategy Fund that assumes the member will retire at age 65. For DRS’s fiscal year 2013, PERS Plan 3 employee contributions were $99 million, and plan refunds paid out were $69.4 million. The defined benefit portion of PERS Plan 3 provides members a monthly benefit that is 1 percent of the AFC per year of service. The AFC is the monthly average of the 60 consecutive highest-paid service months. There is no cap on years of service credit, and Plan 3 provides the same cost of living allowance as Plan 2. Effective June 7, 2006 PERS Plan 3 members are vested in the defined benefit portion of the plan after ten years of service; or after five year of service, if twelve months of that service is earned after age 44; or after five service credit years earned in PERS Plan 2 by June 1, 2003. Plan 3 members are immediately vested in the defined contribution portion of their plan. Vested Plan 3 members are eligible for normal retirement at age 65, or they may retire early with the following conditions and benefits: • If they have at least ten service credit years and are 55 years old, the benefit is reduced by an ERF that varies with age, for each year before age 65. • If they have 30 service credit years, are at least 55 years old, and were hired before May 1, 2013, they have the choice of a benefit that is reduced by three percent for each year before age 65; or a benefit with a smaller (or no) reduction factor (depending on age) that imposes stricter return-to-work rules. • If they have 30 service credit years, are at least 55 years old, and were hired after May 1, 2013, they have the option to retire early by accepting a reduction of five percent for each year before age 65. PERS Plan 3 benefits are actuarially reduced to reflect the choice, if made, of a survivor option. City of Auburn: 2013 CAFR Notes to the Financial Statements 84 PERS Plan 2 and Plan 3 provide disability benefits. There is no minimum amount of service credit required for eligibility. The Plan 2 monthly benefit amount is 2 percent of the AFC per year of service. For Plan 3, the monthly benefit amount is 1 percent of the AFC per year of service. These disability benefit amounts are actuarially reduced for each year that the member’s age is less than 65, and to reflect the choice of a survivor option. There is no cap on years of service credit, and a cost-of-living allowance is granted (based on the Consumer Price Index) capped at 3 percent annually. PERS Plan 2 and Plan 3 members may have up to ten years of interruptive military service credit; five years at no cost and five years that may be purchased by paying the required contributions. Effective July 24, 2005, a member who becomes totally incapacitated for continued employment while serving the uniformed services, or a surviving spouse or eligible children, may apply for interruptive military service credit. Additionally, PERS Plan 2 and Plan 3 members can also purchase up to 24 months of service credit lost because of an on-the-job injury. PERS members may also purchase up to five years of additional service credit once eligible for retirement. This credit can only be purchased at the time of retirement and can be used only to provide the member with a monthly annuity that is paid in addition to the member’s retirement benefit. Beneficiaries of a PERS Plan 2 or Plan 3 member with ten years of service who is killed in the course of employment receive retirement benefits without actuarial reduction, if the member was not at normal retirement age at death. This provision applies to any member killed in the course of employment, on or after June 10, 2004, if found eligible by the Department of Labor and Industries. A one-time duty-related death benefit is provided to the estate (or duly designated nominee) of a PERS member who dies in the line of service as a result of injuries sustained in the course of employment, or if the death resulted from an occupational disease or infection that arose naturally and proximately out of said member’s covered employment, if found eligible by the Department of Labor and Industries. Judicial Benefit Multiplier Beginning January 1, 2007 through December 31, 2007, judicial members of PERS were given the choice to participate in the Judicial Benefit Multiplier Program (JBM), enacted in 2006. Justices and judges in PERS Plan 1 and 2 were able to make a one-time irrevocable election to pay increased contributions that would fund a retirement benefit with a 3.5 percent multiplier. The benefit would be capped at 75 percent of average final compensation. Judges in PERS Plan 3 could elect a 1.6 percent of pay per year of service benefit, capped at 37.5 percent of average compensation. Members who choose to participate in JBM would: accrue service credit at the higher multiplier beginning with the date of their election, be subject to the benefit cap of 75 percent of average final compensation, pay higher contributions, stop contributing to the Judicial Retirement Account (JRA), and be given the option to increase the multiplier on past judicial service. Members who did not choose to participate would: continue to accrue service credit at the regular multiplier; continue to participate in JRA, if applicable; never be a participant in the JBM Program; and continue to pay contributions at the regular PERS rate. Newly elected or appointed justices and judges who chose to become PERS members on or after January 1, 2007, or who had not previously opted into PERS membership, were required to participate in the JBM Program. Members required into the JBM program would: return to prior PERS Plan if membership had previously been established; be mandated into Plan 2 and not have a Plan 3 transfer choice, if a new PERS member; accrue the higher multiplier for all judicial service; not contribute to JRA; and not have the option to increase the multiplier for past judicial service. City of Auburn: 2013 CAFR Notes to the Financial Statements 85 There are 2,304 participating employers in PERS. Membership in PERS consisted of the following as of the latest actuarial valuation date for the plans of June 30, 2013: Retirees and Beneficiaries Receiving Benefits 82,242 Terminated Plan Members Entitled to but not yet Receiving Benefits 30,515 Active Plan Members Vested 106,317 Active Plan Members Non-vested 44,273 Total 263,347 Funding Policy Each biennium, the state Pension Funding Council adopts Plan 1 employer contribution rates, Plan 2 employer and employee contribution rates, and Plan 3 employer contribution rates. Employee contribution rates for Plan 1 are established by statute at 6 percent for state agencies and local government unit employees, and at 7.5 percent for state government elected officials. The employer and employee contribution rates for Plan 2 and the employer contribution rate for Plan 3 are developed by the Office of the State Actuary to fully fund Plan 2 and the defined benefit portion of Plan 3. All employers are required to contribute at the level established by the Legislature. Under PERS Plan 3, employer contributions finance the defined benefit portion of the plan, and member contributions finance the defined contribution portion. The Plan 3 employee contribution rates range from 5 percent to 15 percent, based on the member choice. As a result of the implementation of the Judicial Benefit Multiplier Program in January 2007, a second tier of employer and employee rates was developed to fund, along with investment earnings, the increased retirement benefits of those justices and judges that participate in the program. The methods used to determine the contribution requirements are established under state statute in accordance with chapters 41.40 and 41.45 RCW. The required contribution rates expressed as a percentage of current year covered payroll, as of December 31, 2013, were as follows: Members not participating in JBM: PERS Plan 1 PERS Plan 2 PERS Plan 3 Employer*9.21%**9.21%**9.21%*** Employee 6.00%****4.92%********* * The employer rates include an administrative expense fee currently set at 0.18%. ** The employer rate for state elected officials is 13.73% for Plan 1 and 9.21% for Plan 2 and Plan 3. *** Plan 3 defined benefit portion only. **** The employee rate for state elected officials is 7.50% for Plan 1 and 4.92% for Plan 2. ***** Variable from 5.0% minimum to 15.0% maximum based on rate selected by the PERS 3 member. Members participating in JBM: PERS Plan 1 PERS Plan 2 PERS Plan 3 Employer*9.21%9.21%9.21%** Employee 12.26%12.30%7.50%*** * The employer rates include the employer administrative expense fee currently set at 0.18%. ** Plan 3 defined benefit portion only. *** Minimum rate. Both the City of Auburn and the employees made the required contributions. The City’s required contributions for the years ended December 31 were as follows: City of Auburn: 2013 CAFR Notes to the Financial Statements 86 PERS Plan 1 PERS Plan 2 PERS Plan 3 2013 34,563$ 1,371,134$ 313,045$ 2012 29,077 1,182,550 268,187 2011 26,173 1,002,132 227,334 The employer contribution rate for the City was 7.25% in 2011, 7.21% in 2012, and 9.21% in 2013. Law Enforcement Officers’ and Fire Fighters’ Retirement System (LEOFF) Plans 1 and 2. Plan Description The Legislature established LEOFF in 1970. Membership in the system includes all full-time, fully compensated, local law enforcement commissioned officers, firefighters and as of July 24, 2005, emergency medical technicians. LEOFF membership is comprised primarily of non-state employees, with Department of Fish and Wildlife enforcement officers, who were first included in prospectively effective July 27, 2003, being an exception. LEOFF retirement benefit provisions are established in Chapter 41.26 RCW and may be amended only by the State Legislature. LEOFF is a cost-sharing multiple-employer retirement system comprised of two separate defined benefit plans. LEOFF members who joined the system by September 30, 1977 are Plan 1 members. Those who joined on or after October 1, 1977 are Plan 2 members. LEOFF defined benefit retirement benefits are financed from a combination of investment earnings, employer and employee contributions, and a special funding situation in which the state pays through state legislative appropriations. Employee contributions to the LEOFF Plan 1 and Plan 2 defined benefit plans accrue interest at a rate specified by the Director of DRS. During DRS fiscal year 2012, the rate was five and one-half percent compounded quarterly. Members in LEOFF Plan 1 and Plan 2 can elect to withdraw total employee contributions and interest earnings upon separation from LEOFF covered employment. Effective July 1, 2003, the LEOFF Plan 2 Retirement Board was established by Initiative 790 to provide governance of LEOFF Plan 2. The Board’s duties include adopting contribution rates and recommending policy changes to the Legislature for the LEOFF Plan 2 retirement plan. LEOFF Plan 1 members are vested after the completion of five years of eligible service. Plan 1 members are eligible for retirement with five years of service at the age of 50. The benefit per year of service calculated as a percent of final average salary (FAS) is as follows: 20 or more years 10 but less than 20 years 5 but less than 10 years 1.5% 1.0% Term of Service Percent of Final Average Salary 2.0% 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. A cost-of-living allowance is granted (based on the Consumer Price Index). LEOFF Plan 1 provides death and disability benefits. Death benefits for survivors of Plan 1 members on active duty consist of the following: (1) If eligible spouse, 50 percent of the FAS, plus 5 percent of FAS for each eligible surviving child, with a limitation on the combined allowances of 60 percent of the FAS; or (2) If no eligible spouse, eligible City of Auburn: 2013 CAFR Notes to the Financial Statements 87 children receive 30 percent of FAS for the first child plus 10 percent for each additional child, subject to a 60 percent limitation of FAS, divided equally. A one-time duty-related death benefit is provided to the beneficiary or the estate of a LEOFF Plan 1 member who dies as a result of injuries or illness sustained in the course of employment, or if the death resulted from an occupational disease or infection that arose naturally and proximately out of the member’s covered employment, if found eligible by the Department of Labor and Industries. The LEOFF Plan 1 disability allowance is 50 percent of the FAS plus 5 percent for each child up to a maximum of 60 percent. Upon recovery from disability before the age of 50, a member is restored to service with full credit for service while disabled. Upon recovery after the age of 50, the benefit continues as the greater of the member’s disability allowance or service retirement allowance. LEOFF Plan 1 members may purchase up to five years of additional service credit once eligible for retirement. This credit can only be purchased at the time of retirement and can be used only to provide the member with a monthly annuity that is paid in addition to the member’s allowance. LEOFF Plan 2 members are vested after the completion of five years of eligible service. Plan 2 members may retire at the age of 50 with 20 years of service, or at the age of 53 with five years of service, with an allowance of two percent of the FAS per year of service. The FAS is based on the highest consecutive 60 months. Plan 2 members who retire prior to the age of 53 receive reduced benefits. Benefits are actuarially reduced for each year that the benefit commences prior to age 53 and to reflect the choice of a survivor option. If the member has at least 20 years of service and is age 50, the reduction is three percent for each year prior to age 53. A cost-of-living allowance is granted (based on the Consumer Price Index), capped at three percent annually. LEOFF Plan 2 provides disability benefits. There is no minimum amount of service credit required for eligibility. The Plan 2 allowance amount is 2 percent of the FAS for each year of service. Benefits are actuarially reduced for each year that the member’s age is less than 53, unless the disability is duty-related, and to reflect the choice of a survivor option. If the member has at least 20 years of service and is age 50, the reduction is 3 percent for each year prior to age 53. A catastrophic disability benefit equal to 70 percent of their FAS, subject to offsets for workers’ compensation and Social Security disability benefits received, is also available to those LEOFF Plan 2 members who are severely disabled in the line of duty and incapable of future substantial gainful employment in any capacity. Effective June 2010, benefits to LEOFF Plan 2 members who are catastrophically disabled include payment of eligible health care insurance premiums. Members of LEOFF Plan 2 who leave service because of a line of duty disability are allowed to withdraw 150 percent of accumulated member contributions. This withdrawal benefit is not subject to federal income tax. Alternatively, members of LEOFF Plan 2 who leave service because of a line of duty disability may be eligible to receive a retirement allowance of at least 10 percent of FAS and 2 percent per year of service beyond five years. The first 10 percent of the FAS is not subject to federal income tax. LEOFF Plan 2 retirees may return to work in an eligible position covered by another retirement system, choose membership in that system and suspend their pension benefits, or not choose membership and continue receiving pension benefits without interruption. LEOFF Plan 2 members who apply for retirement may purchase up to five years of additional service credit. The cost of this credit is the actuarial equivalent of the resulting increase in the member’s benefit. LEOFF Plan 2 members can purchase service credit for military service that interrupts employment. Additionally, LEOFF Plan 2 members who become totally incapacitated for continued employment while serving in the uniformed City of Auburn: 2013 CAFR Notes to the Financial Statements 88 services may apply for interruptive military service credit. Should any such member die during this active duty, the member’s surviving spouse or eligible children may purchase service credit on behalf of the deceased member. LEOFF Plan 2 members may also purchase up to 24 consecutive months of service credit for each period of temporary duty disability. Beneficiaries of a LEOFF Plan 2 member who is killed in the course of employment receive retirement benefits without actuarial reduction, if found eligible by the Director of the Department of Labor and Industries. Benefits to eligible surviving spouses and dependent children of LEOFF Plan 2 members killed in the course of employment include the payment of on-going health care insurance premiums paid to the Washington State Health Care Authority. A one-time duty-related death benefit is provided to the beneficiary or the estate of a LEOFF Plan 2 member who dies as a result of injuries or illness sustained in the course of employment, or if the death resulted from an occupational disease or infection that arose naturally and proximately out of the member’s covered employment, if found eligible by the Director of the Department of Labor and Industries. Legislation passed in 2009 provides to the Washington-state-registered domestic partners of LEOFF Plan 2 members the same treatment as married spouses, to the extent that the treatment is not in conflict with federal laws. There are 425 participating employers in LEOFF. Membership in LEOFF consisted of the following as of the latest actuarial valuation date for the plans of June 30, 2013: Retirees and Beneficiaries Receiving Benefits 10,189 Terminated Plan Members Entitled to but not yet Receiving Benefits 689 Active Plan Members Vested 14,273 Active Plan Members Non-vested 2,633 Total 27,784 Funding Policy Starting on July 1, 2000, LEOFF Plan 1 employers and employees contribute zero percent as long as the plan remains fully funded. Employer and employee contribution rates are developed by the Office of the State Actuary to fully fund the plan. LEOFF Plan 2 employers and employees are required to pay at the level adopted by the LEOFF Plan 2 Retirement Board. All employers are required to contribute at the level required by state law. The Legislature, by means of a special funding arrangement, appropriated money from the state General Fund to supplement the current service liability and fund the prior service costs of LEOFF Plan 2 in accordance with the requirements of the Pension Funding Council and the LEOFF Plan 2 Retirement Board. However, this special funding situation is not mandated by the state constitution and this funding requirement could be returned to the employers by a change of statute. For DRS fiscal year 2013, the state contributed $54.2 million to LEOFF Plan 2. The methods used to determine the contribution requirements are established under state statue in accordance with Chapters 41.26 and 41.45 RCW. The required contribution rates expressed as a percentage of current-year covered payrolls, as of December 31, 2013, were as follows: LEOFF Plan 1 LEOFF Plan 2 Employer*0.18%5.23% Employee 0.00%8.41% * The employer rates include the employer administrative expense fee currently set at 0.18%. ** The employer rate for ports and universities is 8.59%. City of Auburn: 2013 CAFR Notes to the Financial Statements 89 Both the City of Auburn and the employees made the required contributions. The City’s required contributions for the years ended December 31 were: LEOFF Plan 1 LEOFF Plan 2 2013 -$ 491,540$ 2012 - 467,819 2011 - 459,991 Public Safety Employees’ Retirement System (PSERS) Plan 2 Plan Description The Legislature created PSERS in 2004 and the system became effective July 1, 2006. PSERS Plan 2 membership includes full-time employees of a covered employer on or before July 1, 2006, who met at least one of the PSERS eligibility criteria, and elected membership during the election period of July 1, 2006 to September 30, 2006; and those full-time employees, hired on or after July 1, 2006 by a covered employer, that meet at least one of the PSERS eligibility criteria. PSERS retirement benefit provisions are established in chapter 41.37 RCW and may be amended only by the State Legislature. PSERS is a cost-sharing multiple-employer retirement system comprised of a single defined benefit plan, PSERS Plan 2. A covered employer is one that participates in PSERS. Covered employers include the following: State of Washington agencies: Department of Corrections, Department of Natural Resources, Parks and Recreation Commission, Gambling Commission, Washington State Patrol, and Liquor Control Board; Washington state counties; Washington state cities except for Seattle, Tacoma and Spokane; and corrections entities formed by PSERS employers under the Interlocal Cooperation Act. To be eligible for PSERS, an employee must work on a full time basis and: • Have completed a certified criminal justice training course with authority to arrest, conduct criminal investigations, enforce the criminal laws of Washington, and carry a firearm as part of the job; or • Have primary responsibility to ensure the custody and security of incarcerated or probationary individuals; or • Function as a limited authority Washington peace officer, as defined in RCW 10.93.020; or • Have primary responsibility to supervise eligible members who meet the above criteria. PSERS retirement benefits are financed from a combination of investment earnings and employer and employee contributions. Employee contributions to the plan accrue interest at a rate specified by the Director of DRS. During Fiscal Year 2013, the rate was five and one-half percent, compounded quarterly. Members in PSERS Plan 2 can elect to withdraw total employee contributions and interest thereon, in lieu of any retirement benefit, upon separation from PSERS-covered employment. PSERS Plan 2 members are vested after completing five years of eligible service. PSERS members may retire with a monthly benefit of two percent of the average final compensation (AFC) at the age of 65 with five years of service; or at the age of 60 with at least ten years of PSERS service credit; or at age 53 with 20 years of service. The AFC is the monthly average of the member’s 60 consecutive highest-paid service credit months. There is no cap on years of service credit; and a cost-of-living allowance is granted (based on the Consumer Price Index), capped at three percent annually. City of Auburn: 2013 CAFR Notes to the Financial Statements 90 PSERS members who retire prior to the age of 60 receive reduced benefits. If retirement is at age 53 or older with at least 20 years of service, a three percent per year reduction for each year between the age at retirement and age 60 applies. PSERS Plan 2 provides disability benefits. There is no minimum amount of service credit required for eligibility. The monthly benefit is two percent of the AFC for each year of service. The AFC is based on the member’s 60 consecutive highest creditable months of service. Benefits are actuarially reduced for each year that the member’s age is less than 60 (with ten or more service credit years in PSERS), or less than 65 (with fewer than ten service credit years). There is no cap on years of service credit; and a cost-of-living allowance is granted (based on the Consumer Price Index), capped at three percent annually. PSERS members meeting specific eligibility requirements have options available to enhance their retirement benefits. Some of these options are available to their survivors. A one-time duty-related death benefit is provided to the beneficiary or the estate of a PSERS member who dies as a result of injuries or illness sustained in the course of employment, or if the death resulted from an occupational disease or infection that arose naturally and proximately out of the member’s covered employment, if found eligible by the Department of Labor and Industries. There are 75 participating employers in PSERS. Membership in PSERS consisted of the following as of the latest actuarial valuation date for the plan of June 30, 2013: Retirees and Beneficiaries Receiving Benefits 27 Terminated Plan Members Entitled to but not yet Receiving Benefits 60 Active Plan Members Vested 2,083 Active Plan Members Non-vested 2,167 Total 4,337 Funding Policy Each biennium, the state Pension Funding Council adopts PSERS Plan 2 employer and employee contribution rates. The employer and employee contribution rates for Plan 2 are developed by the Office of the State Actuary to fully fund Plan 2. The methods used to determine the contribution requirements are established under state statute in accordance with Chapters 41.37 and 41.45 RCW. The required contribution rates expressed as a percentage of current-year covered payrolls, as of December 31, 2013, were as follows: PSERS Plan 2 Employer*10.54% Employee 6.36% *The employer rate includes an employer administrative expense fee of 0.18%. The City of Auburn has not had any employees enrolled in the PSERS Plan since 2011, thus no contributions have been made to the plan since 2010. City of Auburn Fire Relief and Pension Plan The City is the administrator of the Firemen’s Pension Plan (Plan), which is a closed, single-employer defined benefit pension plan that was established in conformance with RCW Chapters 41.16 and 41.18. This plan provided retirement City of Auburn: 2013 CAFR Notes to the Financial Statements 91 and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. Membership is limited to firefighters employed prior to March 1, 1970 when the LEOFF retirement system was established. The City’s obligation under the Firemen’s Pension Plan consists of paying all benefits, including payments to beneficiaries and healthcare, for firefighters who retired prior to March 1, 1970, and excess pension and healthcare benefits of LEOFF for covered firefighters who retired after March 1, 1970. Benefits and refunds of the defined benefit pension plan are recognized when due and payable in accordance with the Plan. The Plan does not issue a separate financial report. Under state law, the Firemen’s Pension Plan is provided an allocation of 25% of all monies received by the state from taxes on fire insurance premiums, interest earnings, member contributions made prior to the inception of LEOFF, and City contributions required to meet projected future pension obligations. The actuary determined as of January 1, 2013 that no future City contributions would be required beyond future revenues from state fire insurance taxes and interest earnings. In 2013, $70,035 was received from the state from taxes on fire insurance premiums. On-behalf payments of fringe benefits and salaries for the City’s employees were recognized as revenues and expenditures/expenses during the period. Administrative costs, such as City staff time and actuarial valuation costs are funded from interest earnings or City contributions. The required schedule of funding progress immediately following the notes to the financial statements presents multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits. Membership of the Firemen’s Pension Plan consisted of 13 eligible, of which 11 are receiving benefits. Fiscal Actual Annual Required Percentage Annual Percentage Net Year Employer Contribution of ARC Pension Cost of APC Pension (Asset) Ending Contributions*(ARC)Contributed (APC)Contributed Obligation December 31, 2001 37,281 - N/A 341 10932.84%(36,940) December 31, 2002 40,869 - N/A 684 5975.00%(77,125) December 31, 2003 45,664 - N/A 1,137 4016.18%(121,652) December 31, 2004 (137,783) (91,881) N/A (90,143) N/A (74,012) December 31, 2005 (144,746) (78,690) N/A (76,827) N/A (6,093) December 31, 2006 (149,327) (78,690) N/A (77,774) N/A 65,460 December 31, 2007 17,920 (5,048) N/A (5,420) N/A 42,120 December 31, 2008 12,167 (5,048) N/A (4,885) N/A 25,068 December 31, 2009 37,232 (78,233) N/A (77,503) N/A (89,667) December 31, 2010 49,049 (78,233) N/A (73,634) N/A (212,350) December 31, 2011 43,474 21,469 202%30,859 140.88%(224,965) December 31, 2012 48,380 21,469 225%32,156 150.00%(241,189) December 31, 2013 52,326 70,351 74%83,024 63.00%(210,491) *Employer Contributions for pensions are total contributions to the Fund net of disbursements from the Fund for medical expenses under RCW 41.26.150 and administrative expenses. GASB STATEMENT No. 27GASB STATEMENT No. 25 SCHEDULE OF EMPLOYER CONTRIBUTIONS THREE YEAR TREND INFORMATION City of Auburn: 2013 CAFR Notes to the Financial Statements 92 Fiscal ARC at Amort.Annual Total Year End of Interest on ARC Factor Pension Cost Employer Change in NPO (Asset) Ending Year (1)NPO (2)Adjustment *(APC)Contributions NPO Balance (3) 12/31/2001 - (3,417) (3,758) 12.99%341 37,281 (36,940) (36,940) 12/31/2002 - (6,002) (6,686) 12.83%684 40,869 (40,185) (77,125) 12/31/2003 - (8,815) (9,952) 12.65%1,137 45,664 (44,527) (121,652) 12/31/2004 (91,881) (11,932) (13,670) 12.47%(90,143) (137,783) 47,640 (74,012) 12/31/2005 (78,690) (7,369) (9,232) 13.30%(76,827) (144,746) 67,919 (6,093) 12/31/2006 (78,690) (3,294) (4,210) 13.04%(77,774) (149,327) 71,553 65,460 12/31/2007 (5,048) 833 1,205 13.82%(5,420) 17,920 (23,340) 42,120 12/31/2008 (5,048) (334) (497) 13.46%(4,885) 12,167 (17,052) 25,068 12/31/2009 (78,233) (950) (1,680) 14.13%(77,503) 37,232 (114,735) (89,667) 12/31/2010 (78,233) (5,539) (10,138) 13.66%(73,634) 49,049 (122,683) (212,350) 12/31/2011 21,469 (10,446) (19,836) 13.17%30,859 43,474 (12,615) (224,965) 12/31/2012 21,469 (10,951) (21,638) 12.65%32,156 48,380 (16,224) (241,189) 12/31/2013 70,351 (10,875) (23,548) 12.32%83,024 52,326 30,698 (210,491) (1) A change in consulting actuaries resulted in a recommended change in the actuarial methods and assumptions. (2) 7% interest rate was used for years prior to January 1, 2000-2004; 6% 2005-2006; 5% 2007-2008; 4% 2011-2012, 3.75% 2013 Statement of Net Position prior to 2010. * Based on 30-year level-dollar closed amortization as of January 1, 1999. (3) The Net Pension Obligation (NPO) balance is reflected as part of Deferred Charges on the Government-wide GASB STATEMENT No. 27 Annual Development of Pension Cost The information presented in the preceding required schedules was determined as part of the actuarial valuations at the date indicated. Valuation date: Actuarial cost method: Amortization method: Remaining amortization period: Asset valuation method: Actuarial Valuation Info: Fair market value January 1, 2013 Entry age normal 30-year, closed as of January 1, 1999 16 years Inflation rate:2.50% Investment rate of return:3.75% Projected salary increases:3.50% Cost-of living adjustments:2.50% Actuarial Assumptions City of Auburn: 2013 CAFR Notes to the Financial Statements 93 NOTE 11 – OTHER POST EMPLOYMENT BENEFITS In 2008, the city implemented GASB Statement 45, Accounting and Financial Reporting by Employers for Post Employment Benefits Other Than Pensions. Plan Description The city is the administrator of the LEOFF 1 employees plan covering lifetime medical care. This plan is a defined benefit healthcare plan, other post employment benefit plan (OPEB). The city is required to pay post employment benefits in accordance with Revised Code of Washington (RCW) Chapter 41.16, all medical and long term care as long as a disability exists are covered for any active firefighter hired prior to March 1, 1970. For any retired firefighter hired prior to March 1, 1970, medical and long term care are covered at the discretion of the Retirement Board. Members retired prior to 1961 for reasons other than duty disability are not eligible for medical benefits during retirement. In 1970, LEOFF was established by the Legislature under RCW Chapter 41.26. LEOFF members who joined the system by September 30, 1977 are Plan 1 members. For Plan 1 members, the city is required to pay all healthcare expenses incurred by LEOFF 1 retirees. The City’s cost is reduced by any amounts retirees receive from Medicare or other health plans. Funding Policy The funding policy is based upon the pay-as-you-go financing requirements paid out of the General fund. Membership As of December 31, 2013, there was 1 active member and 56 retirees meeting the eligibility requirements of a LEOFF 1 member. This is considered a closed group with no new members. The one active member is employed by the Valley Regional Fire Authority (VRFA) which is a separate governmental entity and the City is billed annually for their medical costs. Annual OPEB Cost and Net OPEB Obligation The City’s annual other post employment benefit (OPEB) cost is calculated based upon the annual required contribution (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover the normal cost each year and amortize any unfunded actuarial liabilities over a period of 21 years as of January 1, 2008. The following table shows the components of the City’s annual OPEB cost for the year, the amount actually contributed to the plan and changes in the City’s net OPEB for LEOFF. City of Auburn: 2013 CAFR Notes to the Financial Statements 94 Fiscal Year Ending Annual Required Contribution (ARC)12/31/2011 12/31/2012 12/31/2013 1. Annual Normal Costs at beginning of year 101,456$ 101,456$ 101,456$ 2. Amortization of UAAL at beginning of year 2,011,425 2,011,425 2,011,425 3. Interest to end of year 84,515 84,515 84,515 4. ARC at end of year 2,197,396$ 2,197,396$ 2,197,396$ 5. Interest on Net OPEB Obligation 82,754 123,847 162,738 6. Adjustment to ARC 157,139 244,712 335,724 7. Annual OPEB Cost 2,123,011$ 2,076,531$ 2,024,410$ 8. Employer Contributions 1,095,684 1,104,259 1,124,809 9. Change in Net OPEB Obligation 1,027,327 972,272 899,601 10. Net OPEB Obligation at beginning of year 2,068,840 3,096,167 4,068,439 11. Net OPEB Obligation at end of year 3,096,167$ 4,068,439$ 4,968,040$ The net OPEB obligation of $4,968,040 is included as a non-current liability on the Statement of Net Position. The City’s annual OPEB cost, the percentage of OPEB costs contributed to the plan, and the net OPEB obligation for 2013, 2012 and 2011 are as follows: Contributions as a Annual Percentage of Net OPEB Fiscal Year Ending OPEB Cost Annual OPEB Cost Obligation December 31, 2013 2,024,410$ 56%4,968,040$ December 31, 2012 2,076,531 53%4,068,439 December 31, 2011 2,123,011 52%3,096,167 Funded Status and Funding Progress As of January 1, 2014, the most recent actuarial valuation date, the plan was 0% funded. The accrued liability for benefits was $26.2 million, and the actuarial value of assets was $0, resulting in a UAAL of $26.2 million. The required schedule of funding progress immediately following the notes to the financial statements presents multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits. Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. Actuarial Methods and Assumptions Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities, consistent with the long-term perspective of the calculations. In the January 1, 2014 actuarial valuation, the entry age normal actuarial cost method was used. The actuarial assumptions used included a 3.25% discount rate, which is based upon the long-term investment yield on the investments that are expected to be used to finance the payment of benefits. The medical (healthcare) trend rate of City of Auburn: 2013 CAFR Notes to the Financial Statements 95 6.9% for pre-65 retirees and 7.0% for post-65 retirees is assumed and the inflation rate includes the dental inflation rate of 5.0% and long term care inflation rate of 4.75%. The UAAL is being amortized on a closed basis at the assumed discount rate using the level dollar amortization method. The remaining amortization period at January 1, 2014 was 15 years. NOTE 12 – ASSOCIATION OF WASHINGTON CITIES EMPLOYEE BENEFIT TRUST (“Trust”) Trust Description The City is a Participating Employer in the Association of Washington Cities Employee Benefit Trust (“Trust”), a cost- sharing multiple-employer welfare benefit plan administered by the Association of Washington Cities. The Trust provides medical benefits to certain eligible retired employees of Participating Employers and their eligible family members. Under Article VII of the Trust document, the Trustees have the authority and power to amend the amount and the nature of the medical and other benefits provided by the Trust. The Trust issues a publicly available financial report that includes financial statements and requires supplementary information for Trust. That report, along with a copy of the Trust document, may be obtained by writing to Trust at 1076 Franklin Street SE, Olympia, WA 98501- 1346 or by calling 1-800-562-8981. Funding Policy The Trust provides that contribution requirements of Participating Employers and of participating employees, retirees and other beneficiaries, if any, are established and may be amended by the Board of Trustees of the Trust. Retirees of the City receiving medical benefits from the Trust contribute up to $830.01 per month for non-Medicare enrolled retiree-only coverage, $1,667.27 for non-Medicare enrolled retiree and spouse coverage, $1,280.56 for Medicare enrolled retiree and non-Medicare enrolled spouse (or non-Medicare enrolled retiree and Medicare-enrolled spouse) and $899.43 for Medicare-enrolled retiree and spouse coverage. Participating Employers are not contractually required to contribute an assessed rate each year by the Trust for non- LEOFF 1 retirees. The retire pays for 100% of the premium. NOTE 13 – CONSTRUCTION COMMITMENTS At December 31, 2013 the City had the following contractual obligations on construction projects: SCHEDULE OF OUTSTANDING CONSTRUCTION OBLIGATIONS As of December 31, 2013 Amount Outstanding Traffic projects 404,411$ Street projects 567,426 Utilities projects 2,254,288 Total commitments 3,226,125$ City of Auburn: 2013 CAFR Notes to the Financial Statements 96 NOTE 14 – CEMETERY ENDOWED CARE FUND The City maintains one permanent fund known as the cemetery endowed care fund. Paid into this fund is 10% of the base, pre-tax sales price of each grave, niche or crypt. This fund is irreducible in principal and no part of the income of this fund shall ever be used for purposes other than those specified upon the creation of the fund. RCW 68.44.020 restricts the use of endowment net appreciation to endowment care “stipulated in the instrument by which the fund was established”. For the City, the instrument that established the fund is Auburn City Code section 3.04.080, and section 3.040.120 governs the use of the fund. ACC 3.04.120 restricts net interest or income from investments to the care of the lots and in the improvement or embellishment of the cemetery or the erection or preservation of any buildings or structures, fences or walks, or for the repair, preservation, erection or renewal of any tomb, monument, grave, stone, fence, railing or other erection in or around the cemetery. The funds may also be used for planting and cultivating trees, shrubs, flowers or plants in or around the cemetery. All expenditures of income from the fund must first be authorized by the City Council. For 2013, of the $6,142 net appreciation on investments, all was available for expenditures. Amounts that are available for expenditure are reflected as assigned fund balance. NOTE 15 – JOINT VENTURES / RELATED PARTY Valley Communications Center The “Valley Communications Center” was established August 20, 1976, when an Interlocal Agreement was entered into by four participating municipal corporations: Renton, Kent, Auburn and Tukwila. The provisions and terms of the “Interlocal Cooperation Act”, pursuant to RCW 39.34, sanction the agreement. The initial duration of the agreement was five years and thereafter is automatically extended for consecutive two-year periods, unless terminated by one or more of the participating cities. Any such termination must be in writing and served upon the other cities on or before July 1 in any one year and such termination shall then become effective on the last day of such year. On August 4, 1999 the Administration Board of Valley Communications Center voted to include the City of Federal Way as a full participating member city as of January 1, 2000. The five participating municipal corporations that include the cities of Renton, Kent, Auburn, Tukwila, and Federal Way on April 17, 2000 entered into a new Interlocal Agreement, pursuant to RCW 39.34, et seq. This agreement reaffirmed Valley Communications Center as a governmental administration agency pursuant to RCW 39.34.030 (3) (b). The purpose of the joint operation, hereafter referred to as Valley Com, is to provide improved consolidated emergency communications (dispatch) services for police, fire and medical aid to the five participating cities and to the several subscribing agencies, which include King County Fire Districts #2, #20, #40, #43, #44, #47, Black Diamond Fire Department, Vashon Island Fire Department, City of Pacific Police and Fire Departments, City of Algona Police Department, City of Black Diamond Police Department, City of Des Moines Police Department, SeaTac Fire Department, North Highline Fire Department, and King County EMS Units. In 1988, King County Fire District #1 was annexed to the City of Tukwila. A separate agreement between Valley Com and the subscribing agencies has been executed, which set forth condition of services and rates charged. The participating cities provide the majority of revenues to Valley Com. The method of allocating revenue source was changed in 1990 to a basis of prior year’s calls with actual first and second quarter and estimated third and fourth quarter calls. The allocation of prorated financial participation among the five participating cities is the percentage of estimated dispatched calls attributed to each jurisdiction compared to the total actual and estimated dispatched calls, for the period for January 1, through December 31. The percentages are applied to the current approved budget, less revenue from subscribing agencies and all other sources. City of Auburn: 2013 CAFR Notes to the Financial Statements 97 The 2013 cost distribution for the five participating cities is as follows: Dispatchable Percent of Calls Total * Renton 72,740 20.70% Kent 97,579 27.76% Auburn 71,881 20.45% Tukwila 34,192 9.73% Federal Way 75,073 21.36% Total 351,465 100.00% * Distribution of current year net income is based on these budgeted percentages. Valley Com is served by an Administration Board composed of the Mayors or designated representatives from the five participating cities of Renton, Kent, Auburn, Tukwila and Federal Way. The Administration Board is responsible for the following functions: 1) Budget review and recommendation to the legislative bodies of the participating cities, and budget adoption after each legislative body has approved the required financial participation for the ensuing year; 2) Approval of appointment and/or discharge of the Director; 3) Approval of personnel policy and final decisions on all major policy changes; 4) Review and approval of all contracts. In addition, an Operations Board provides direction and consists of two members of each participating City’s public safety departments, including the heads of such departments or their designees. The Operations Board performs the following functions: 1) Oversees the operation of Valley Com, advises and makes recommendations to the Administration Board; 2) Makes recommendations on Director selection; 3) Presents proposed policies and budget to the Administration Board; 4) Approves disbursement of funds by the Director. The Director presents a proposed budget to the Operations Board on or before August 15 of each year. Said budget is then presented to the Administration Board by September 1 of each year. The Administration Board can make changes to the proposed Valley Com budget as it finds necessary, but final approval falls to the legislative body of each participating city in accordance with the provisions of the Interlocal Agreement. In August 1993, Valley Com entered into an Interlocal Cooperation Agreement, pursuant to Chapter 39.34 RCW, with the sub-regions of King County, Seattle and Eastside Public Safety Communications Agency (EPSCA). This agreement governs the development, acquisition and installation of the 800 MHz emergency radio communications system (system) funded by the $57 million King County levy. This agreement provides that upon voluntary termination of any sub-region participation in the system, it surrenders its radio frequencies, relinquishes its equipment and transfers any unexpended levy proceeds and association equipment replacement reserves to another sub-region or consortium of sub-regions. The share of equity belonging to the five participating cities is as follows: Item Renton Kent Auburn Tukwila Federal Way Total Equity Dec 31, 2012 5,062,434$ 7,139,778$ 4,783,577$ $2,843,407 3,324,584$ 23,153,780$ Current year change 178,173 239,013 176,069 83,751 183,886 860,892 Equity Dec 31, 2013 5,240,607$ 7,378,791$ 4,959,646$ 2,927,158$ 3,508,470$ 24,014,672$ % of equity 21.82%30.73%20.65%12.19%14.61% % of 2013 distribution 20.70%27.76%20.45%9.73%21.36% City of Auburn: 2013 CAFR Notes to the Financial Statements 98 Liabilities are the responsibility of the five participating cities in direct proportion to their equity position. Complete audited financial statements for Valley Communications Center can be obtained from Valley Communications Center, 27519 108th Ave SE, Kent, WA 98030, or telephone 253-372-1300. South Correctional Entity (SCORE) The South Correctional Entity (SCORE) consolidated correctional facility was established February 25, 2009, when an Interlocal Agreement (the “Original Interlocal Agreement”) was entered into by seven participating municipal governments, the “Member Cities” of Auburn, Burien, Des Moines, Federal Way, Renton, SeaTac and Tukwila, under the authority of the “Interlocal Cooperation Act” (RCW 39.34). This “Original Interlocal Agreement” was amended and restated October 1, 2009 and named the City of Des Moines as the “Host City” and the remaining Member Cities as “Owner Cities”. This Interlocal agreement is known as the “Formation Interlocal Agreement”. Pursuant to a separate “Host City Agreement” dated October 1, 2009, the Host City will not enjoy the same equity position as the Owner Cities until all debts issued are paid and the Host City fulfills all of its obligations as outlined in the Agreement. Pursuant to SCORE financial policies, all unexpected funds or reserve funds shall be distributed based on the percentage of the Member City’s average daily population at the SCORE Facility for the last three (3) years regardless of their Owner City or Host City status. SCORE, a governmental administrative agency pursuant to RCW 39.34.030 (3), has the power to acquire, construct, own, operate, maintain, equip, and improve a correctional facility known as the “SCORE Facility” and to provide correctional services and functions incidental thereto, for the purpose of detaining arrestees and sentenced offenders in the furtherance of public safety and emergencies within the jurisdiction of the Member Cities. The SCORE Facility may serve the Member Cities and Subscribing Agencies which are in need of correctional facilities. Any agreement with a Subscribing Agency shall be in writing and approved by SCORE as provided within the SCORE Formation Interlocal Agreement. Financing for the acquisition, construction, equipping, and improvement of the SCORE Facility was provided by bonds issued by the South Correctional Entity Facility Public Development Authority (the “SCORE PDA”), a public development authority chartered by the City of Renton pursuant to RCW 35.21.730 through 35.21.755 and secured by the full faith and credit of the Cities of Auburn, Burien, Federal Way, Renton, SeaTac, and Tukwila. The SCORE PDA issued $86 million in special obligation bonds in 2009 to carry out the facility development project. The following is a summary of the debt service requirements for the bond issue: 35% BABs Auburn Burien Federal Way Renton SeaTac Tukwila Year Principal Interest Subsidy Total 31%4%18%36%3%8% 2014 1,950,000$ 5,066,566$ (1,654,975)$ 5,361,591$ 1,662,093$ 214,464$ 965,086$ 1,930,173$ 160,848$ 428,927$ 2015 1,990,000 4,995,069 (1,632,787) 5,352,282 1,659,207 214,091 963,411 1,926,822 160,568 428,183 2016 2,065,000 4,911,886 (1,632,787) 5,344,099 1,656,671 213,764 961,938 1,923,876 160,323 427,528 2017 2,145,000 4,820,241 (1,621,980) 5,343,261 1,656,411 213,730 961,787 1,923,574 160,298 427,461 2018 2,240,000 4,715,979 (1,621,980) 5,333,999 1,653,540 213,360 960,120 1,920,240 160,020 426,720 2019-2023 12,435,000 21,771,988 (7,583,953) 26,623,035 8,253,141 1,064,921 4,792,146 9,584,293 798,691 2,129,843 2024-2028 15,060,000 17,809,677 (6,398,978) 26,470,699 8,205,917 1,058,828 4,764,726 9,529,452 794,121 2,117,656 2029-2033 18,475,000 12,403,424 (4,553,914) 26,324,510 8,160,598 1,052,980 4,738,412 9,476,824 789,735 2,105,961 2034-2038 22,795,000 5,605,241 (2,225,755) 26,174,486 8,114,091 1,046,979 4,711,407 9,422,815 785,235 2,093,959 2039 5,165,000 170,858 (119,601) 5,216,257 1,617,040 208,650 938,926 1,877,853 156,488 417,301 Totals 84,320,000$ 82,270,929$ (29,046,710)$ 137,544,219$ 42,638,709$ 5,501,767$ 24,757,959$ 49,515,922$ 4,126,327$ 11,003,539$ Summary of Debt Service Requirements Debt Service Schedule Debt Service Allocation to Owner Cities City of Auburn: 2013 CAFR Notes to the Financial Statements 99 The City of Auburn reports its share of equity interest in the Governmental Activities column within the Government- wide financial statements under non-current assets. The following is condensed (unaudited) financial information as of December 31, 2013 related to SCORE: Member City Percent of Equity 2012 Equity Balance 2013 Distribution 2013 Equity Balance Auburn 31.00%1,368,859$ 1,148,378$ 2,517,237$ Burien 4.00%176,627 117,696 294,323 Des Moines 1.00%- 107,970 107,970 Federal Way 22.00%794,820 1,026,120 1,820,940 Renton 31.00%1,589,644 958,575 2,548,219 SeaTac 4.00%132,469 199,239 331,708 Tukwila 7.00%353,254 248,680 601,934 Grand Totals 100.00%4,415,673$ 3,806,658$ 8,222,331$ South Correctional Entity (SCORE) 2013 Owner Cities Equity Allocation Completed financial statements for SCORE and SCORE PDA can be obtained at SCORE, 20817 17th Avenue South, Des Moines, WA 98198. Since the obligation to fund future joint venture-related debt is separately reported as due to other governments, the investment in joint ventures is reported as a combination of this debt with the current reported equity in joint ventures as follows: Balance Additions Reductions Balance 12/31/2012 12/31/2013 Valley Communication Public Dev Auth 647,000$ -$ (215,000)$ 432,000$ SCORE Public Development Authority 26,732,850 - (1,198,150) 25,534,700 Due to Other Governments 27,379,850 - (1,413,150) 25,966,700 Valley Communications Center 4,783,577 176,069 - 4,959,646 South Correctional Entity (SCORE)1,368,859 1,148,378 - 2,517,237 Equity Share 6,152,436 1,324,447 - 7,476,883 Total Investment in Joint Ventures 33,443,583$ Investment in Joint Ventures NOTE 16 – JOINTLY GOVERNED ORGANIZATION / RELATED PARTY Residents of the cities of Auburn, Algona and Pacific approved in the November 7, 2006 general election the creation of a regional fire authority pursuant to RCW 52.26. The new regional fire protection service authority, called the Valley Regional Fire Authority (VRFA), provides first responder fire and emergency medical services to residents of Auburn, Algona and Pacific. The VRFA is a new municipal corporation, with its own Governing Board, and is legally separate from the three cities it serves. The Governing Board of the VRFA consists of the Mayors of the three cities within the VRFA service area, as well as two Councilmembers from each city. Membership on the Governing Board is made by appointment from the city council of the respective member cities. Effective January 1, 2007, all personnel, assets, equipment and contractual obligations of the former Auburn Fire Department were transferred to the VRFA. Similar transfers were made by the cities of Algona and Pacific. In accordance with the interlocal agreement at time of formation, each member city retained its obligation for LEOFF 1 firefighter and Fire Relief and Pension Plan obligations. During 2013 Auburn paid $7,487.25 for the employer’s share of active LEOFF 1 firefighter medical premiums and benefit payments. Premium and benefit payments for retired LEOFF 1 firefighters for 2013 were $232,118. Medical premiums and benefit payments made under the Fire Relief and Pension Plan for 2013 were $147,987. City of Auburn: 2013 CAFR Notes to the Financial Statements 100 NOTE 17 – CONTINGENCIES AND LITIGATION As of December 31, 2013, a number of claims were pending against the City for damages and legal actions. While the outcome of these actions is uncertain, no losses are clearly anticipated at this time due to these pending claims. In the event of a liability finding against the City, it is anticipated that any potential adverse judgment against the City also would be subject to coverage under the City’s comprehensive liability insurance, including public officials’ errors and omission insurance and general liability insurance. NOTE 18 – RISK MANAGEMENT & INSURANCE Risk Management The City is exposed to various risks of loss such as: theft and damage and destruction of assets, errors and omissions, injuries or property damage to others, employees’ health, and natural disasters. All risk financing activities are accounted for in the Insurance internal service fund. To insure against risks of loss the City of Auburn 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, public officials’ errors or omissions, stop gap, and employee benefits liability. Limits are $4 million per occurrence self insured layer, and $16 million per occurrence in the re-insured excess layer. The excess layer is insured by the purchase of reinsurance and insurance and is subject to aggregate limits. Total limits are $20 million per occurrence subject to aggregate sublimits in the excess layers. The Board of Directors determines the limits and terms of coverage annually. Insurance coverage for property, automobile physical damage, fidelity, inland marine, and boiler and machinery are purchased on a group basis. Various deductibles apply by type of coverage. Property insurance and auto physical damage are self-funded from the members’ deductible to $750,000, for all perils other than flood and earthquake, and insured above that amount by the purchase of insurance. In-house services include risk management consultation, loss control field services, claims and litigation administration, and loss analyses. WCIA contracts for the claims investigation consultants for personnel issues and land use problems, insurance brokerage, and lobbyist services. WCIA is fully funded by its members, who make annual assessments on a prospectively rated basis, as determined by an outside, independent actuary. The assessment covers loss, loss adjustment, and administrative expenses. As outlined in the interlocal agreement, 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 Auburn: 2013 CAFR Notes to the Financial Statements 101 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. No settlement has exceeded insurance coverage over the past three years. Workers’ Compensation Title 51 RCW requires the City to ensure payment of benefits for job-related injuries and diseases through the Workers’ Compensation fund or through self-insurance. The City participates in the State of Washington’s Workers’ Compensation program. Premiums are based on individual employer’s reported payroll hours and insurance rates based on each employer’s risk classification and past experience. The premium is paid by employer and employee contributions. NOTE 19 – SUBSEQUENT EVENTS There have been no material events subsequent to December 31, 2013 to report. City of Auburn: 2013 CAFR Notes to the Financial Statements 102 City of Auburn: 2013 CAFR Required Supplemental Information 103 The informtion presented in the following required schedules was determined as part of the actuarial valuations at the dates indicated. Firefighter’s Pension Fund January 1, 2013 Unfunded Actuarial Actuarial UAAL as a Actuarial Accrued Accrued Percentage Actuarial Value Liabilities -Liabilities Funded Covered of Covered Valuation Date of Assets Entry Age (UAAL)Ratio Payroll Payroll January 1, 2001 3,632$ 2,332$ (1,300)$ 155.75%58$ (2241%) January 1, 2003 3,514 2,428 (1,086) 144.73%61 (1780%) January 1, 2005 3,160 2,172 (988) 145.00%64 (1544%) January 1, 2007 2,868 2,802 (66) 102.00%- N/A January 1, 2009 2,941 1,878 (1,063) 157.00%- N/A January 1, 2011 2,780 3,052 272 91.00%- N/A January 1, 2013 2,552 3,387 835 75.00%- N/A This plan primarily covers inactive participants. There are no current member contributions. GASB STATEMENTS No. 25 and No. 27 SCHEDULE OF FUNDING PROGRESS (rounded to thousands) Retiree Medical and Long-Term Care Benefits For LEOFF 1 Employees January 1, 2014 Unfunded Actuarial UAAL as a Actuarial Actuarial Accrued Percentage Actuarial Value Accrued Liabilities Funded Covered of Covered Valuation Date of Assets Liabilities (UAAL)Ratio Payroll Payroll January 1, 2008 - 20,738$ 20,738$ 0%N/A N/A January 1, 2011 - 26,482$ 26,482$ 0%N/A N/A January 1, 2014 - 26,246 26,246 0%N/A N/A GASB STATEMENTS No. 43 and No. 45 SCHEDULE OF FUNDING PROGRESS (rounded to thousands) City of Auburn: 2013 CAFR Required Supplemental Information 104 City of Auburn: 2013 CAFR Fund Financial Statements and Schedules 105 NON-MAJOR GOVERNMENTAL FUNDS The City has four types of Non-Major Governmental Funds. Special Revenue Funds Special revenue funds account for the proceeds of specific revenue sources and are segregated into individual funds to ensure that expenditures are made exclusively for qualified purposes. Special revenue funds are accounted for on a modified accrual basis. Biennial budgets are adopted with appropriations lapsing at year-end. Debt Service Funds Debt service funds account for payments of principal and interest on general obligation and special assessment long-term debt. Capital Project Funds Capital project funds account for the City of Auburn's financial resources used for the acquisition or construction of major non-proprietary capital facilities. Permanent Funds Permanent funds are used to report resources that are legally restricted to the extent that only earnings, and not principal, may be used for purposes that support City programs that are for the benefit of the City or its citizens. City of Auburn: 2013 CAFR Fund Financial Statements and Schedules 106 Total Total Total Total Total Nonmajor Nonmajor Nonmajor Nonmajor Nonmajor Special Revenue Debt Service Capital Projects Permanent Governmental Funds Funds Funds Funds Funds ASSETS: Cash and Cash Equivalents 8,991,909$ 45,788$ 1,208,312$ 625,440$ 10,871,449$ Investments - - - 1,000,930 1,000,930 Other Receivables 325,049 - - 3,194 328,243 Special Assessments - 496,189 - - 496,189 Due From Other Governmental Units 54,267 - 41,984 - 96,251 Total Assets 9,371,225 541,977 1,250,296 1,629,564 12,793,062 LIABILITIES AND FUND BALANCES: Liabilities: Current Payables 379,571 - 216,747 - 596,318 Unearned Revenue - 496,189 - - 496,189 Total Liabilities 379,571 496,189 216,747 - 1,092,507 Fund Balances: Nonspendable - - - 1,536,316 1,536,316 Restricted 5,514,851 45,788 535,170 - 6,095,809 Committed 3,242,662 - - - 3,242,662 Assigned 234,141 - 498,379 93,248 825,768 Unassigned - - - - - Total Fund Balances 8,991,654 45,788 1,033,549 1,629,564 11,700,555 Total Liabilities and Fund Balances 9,371,225$ 541,977$ 1,250,296$ 1,629,564$ 12,793,062$ December 31, 2013 City of Auburn, Washington COMBINING BALANCE SHEET NON-MAJOR GOVERNMENT FUNDS City of Auburn: 2013 CAFR Fund Financial Statements and Schedules 107 Total Total Total Total Total Nonmajor Nonmajor Nonmajor Nonmajor Nonmajor Special Revenue Debt Service Capital Projects Permanent Governmental REVENUES: Taxes: Property -$ -$ 120,217$ -$ 120,217$ Retail Sales & Use 1,942,720 277,292 - - 2,220,012 Interfund Utility 556,036 - - - 556,036 Utility 1,447,193 - - - 1,447,193 Excise 90,581 - - - 90,581 Other 69,475 - - - 69,475 Intergovernmental 462,544 494,710 1,007,771 - 1,965,025 Charges for Services 1,698,830 - 11,111 37,506 1,747,447 Special Assessments - 40,772 - - 40,772 Investment Earnings 14,475 28,474 1,624 6,142 50,715 Miscellaneous 79,414 - 41,690 - 121,104 Total Revenues 6,361,268 841,248 1,182,413 43,648 8,428,577 EXPENDITURES: Current: Security of Persons & Property 290,341 - - - 290,341 Transportation 4,148,196 - - - 4,148,196 Economic Environment 547,267 - - - 547,267 Cultural and Recreation - - 794 - 794 Debt Service: Principal - 961,540 - - 961,540 Interest - 1,673,262 - - 1,673,262 Capital Outlay - - 1,464,957 - 1,464,957 Total Expenditures 4,985,804 2,634,802 1,465,751 - 9,086,357 Excess (Deficiency) of Revenues Over (Under) Expenditures 1,375,464 (1,793,554) (283,338) 43,648 (657,780) OTHER FINANCING SOURCES (USES): Transfers In (Note 5)301,302 1,752,748 279,796 - 2,333,846 Transfers Out (Note 5)(220,380) (10,000) - - (230,380) Total Other Financing Sources (Uses)80,922 1,742,748 279,796 - 2,103,466 Net Change in Fund Balances 1,456,386 (50,806) (3,542) 43,648 1,445,686 Fund Balances - Beginning 7,535,268 96,594 1,037,091 1,585,916 10,254,869 Fund Balances - Ending 8,991,654$ 45,788$ 1,033,549$ 1,629,564$ 11,700,555$ City of Auburn, Washington COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NON-MAJOR GOVERNMENT FUNDS For the Year Ended December 31, 2013 City of Auburn: 2013 CAFR Fund Financial Statements and Schedules 108 City of Auburn: 2013 CAFR Fund Financial Statements and Schedules 109 NON-MAJOR GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS Special revenue funds account for the proceeds of specific revenue sources and are segregated into individual funds to ensure that expenditures are made exclusively for qualified purposes. Special revenue funds are accounted for on a modified accrual basis. Annual budgets are adopted with appropriations lapsing each year of the biennium. The City has nine non-major special revenue funds. The Local Street Fund This fund was created when Auburn voters approved the Save Our Streets lid lift in 2004 and is used to account for all revenues and expenditures related to this initiative. Hotel/Motel Tax Fund This fund was created to account for the hotel/motel taxes levied to support City tourist promotion. Arterial Street Preservation Fund This fund was created to repair classified arterial streets and is funded from a one percent utility tax increase that was adopted by Council in 2008. Drug Forfeiture Fund Money seized and forfeited from drug activity is deposited in this fund to be used exclusively for drug investigation and enforcement. The Housing and Community Development Fund Accounts for projects associated with the Community Development Block Grant program. The Recreational Trails Fund Created for the purpose of trail development. This is a tax-supported fund. The Business Improvement Area Fund Accounts for special assessments on downtown merchants for ongoing services and for improvements made to the downtown area. Mitigation Fees Accounts for the receipt of contracted mitigation fees for streets and fire service. City of Auburn: 2013 CAFR Fund Financial Statements and Schedules 110 Page 1 of 2 Hotel/Arterial Housing Local Motel Street Drug Community Streets Tax Preservation Forfeiture Development ASSETS: Cash and Cash Equivalents 1,938,064$ 135,601$ 1,213,022$ 721,359$ 19,742$ Other Receivables - - 325,049 - - Due From Other Governmental Units - - - 13,363 40,904 Total Assets 1,938,064 135,601 1,538,071 734,722 60,646 LIABILITIES AND FUND BALANCES: Liabilities: Current Payables 21,158 3,750 55,556 23,369 23,123 Total Liabilities 21,158 3,750 55,556 23,369 23,123 Fund Balances: Restricted - 131,851 - 710,147 37,519 Committed 1,763,391 - 1,479,271 - - Assigned 153,515 - 3,244 1,206 4 Unassigned Total Fund Balances 1,916,906 131,851 1,482,515 711,353 37,523 Total Liabilities and Fund Balances 1,938,064$ 135,601$ 1,538,071$ 734,722$ 60,646$ City of Auburn, Washington COMBINING BALANCE SHEET NON-MAJOR SPECIAL REVENUE FUNDS December 31, 2013 City of Auburn: 2013 CAFR Fund Financial Statements and Schedules 111 Page 2 of 2 Total Business Nonmajor Recreational Improvement Mitigation Special Revenue Trails Area Fees Funds 29,587$ 59,801$ 4,874,733$ 8,991,909$ - - - 325,049 - - - 54,267 29,587 59,801 4,874,733 9,371,225 - 18,649 233,966 379,571 - 18,649 233,966 379,571 29,550 41,068 4,564,716 5,514,851 - - - 3,242,662 37 84 76,051 234,141 - 29,587 41,152 4,640,767 8,991,654 29,587$ 59,801$ 4,874,733$ 9,371,225$ City of Auburn: 2013 CAFR Fund Financial Statements and Schedules 112 Page 1 of 2 Hotel/Arterial Housing Local Motel Street Drug Community Streets Tax Preservation Forfeiture Development REVENUES: Taxes: Retail Sales & Use 1,942,720$ -$ -$ -$ -$ Interfund Utility - - 556,036 - - Utility - - 1,447,193 - - Excise - 90,581 - - - Other - - - - - Intergovernmental - - - 42,125 413,319 Charges for Services - 6,370 - - - Investment Earnings 3,515 179 3,244 1,206 4 Miscellaneous 29,125 - - 50,289 - Total Revenues 1,975,360 97,130 2,006,473 93,620 413,323 EXPENDITURES: Current: Security of Persons and Property - - - 240,341 - Transportation 1,943,937 - 2,204,259 - - Economic Environment - 75,192 - - 419,212 Total Expenditures 1,943,937 75,192 2,204,259 240,341 419,212 Excess (Deficiency) of Revenues Over (Under) Expenditures 31,423 21,938 (197,786) (146,721) (5,889) OTHER FINANCING SOURCES (USES): Transfers In (Note 5)150,000 - - - - Transfers Out (Note 5)- - - - - Total Other Financing Sources (Uses)150,000 - - - - Net Change in Fund Balances 181,423 21,938 (197,786) (146,721) (5,889) Fund Balances - Beginning 1,735,483 109,913 1,680,301 858,074 43,412 Fund Balances - Ending 1,916,906$ 131,851$ 1,482,515$ 711,353$ 37,523$ City of Auburn, Washington COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NON-MAJOR SPECIAL REVENUE FUNDS For the Year Ended December 31, 2013 City of Auburn: 2013 CAFR Fund Financial Statements and Schedules 113 Page 2 of 2 Total Business Nonmajor Recreational Improvement Mitigation Special Revenue Trails Area Fees Funds -$ -$ -$ 1,942,720$ - - - 556,036 - - - 1,447,193 - - - 90,581 - 69,475 - 69,475 7,100 - - 462,544 - - 1,692,460 1,698,830 37 84 6,206 14,475 - - 79,414 7,137 69,559 1,698,666 6,361,268 - - 50,000 290,341 - - - 4,148,196 - 52,863 - 547,267 - 52,863 50,000 4,985,804 7,137 16,696 1,648,666 1,375,464 - - 151,302 301,302 - - (220,380) (220,380) - - (69,078) 80,922 7,137 16,696 1,579,588 1,456,386 22,450 24,456 3,061,179 7,535,268 29,587$ 41,152$ 4,640,767$ 8,991,654$ City of Auburn: 2013 CAFR Fund Financial Statements and Schedules 114 Variance with Final Final Budget Original Adopted Actual Positive (GAAP Basis)(GAAP Basis)Results (Negative) REVENUES: Taxes: Property 1,474,250$ 1,474,250$ 1,942,720$ 468,470$ Investment Earnings 3,350 3,350 3,515 165 Miscellaneous - - 29,125 29,125 Total Revenues 1,477,600 1,477,600 1,975,360 497,760 EXPENDITURES: Current: Transportation 128,080 128,080 1,943,937 (1,815,857) Capital Outlay 2,346,170 2,736,170 - 2,736,170 Total Expenditures 2,474,250 2,864,250 1,943,937 920,313 Excess (Deficiency) of Revenues Over (Under) Expenditures (996,650) (1,386,650) 31,423 1,418,073 OTHER FINANCING SOURCES (USES): Transfers In (Note 5)150,000 150,000 150,000 - Total Other Financing Sources (Uses)150,000 150,000 150,000 - Net Change in Fund Balances (846,650) (1,236,650) 181,423 1,418,073 Fund Balances - Beginning 1,117,320 1,735,483 1,735,483 - Fund Balances - Ending 270,670$ 498,833$ 1,916,906$ 1,418,073$ Budget Amounts For the Year Ended December 31, 2013 City of Auburn, Washington STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL LOCAL STREETS SPECIAL REVENUE FUND City of Auburn: 2013 CAFR Fund Financial Statements and Schedules 115 Variance with Final Final Budget Original Adopted Actual Positive (GAAP Basis)(GAAP Basis)Results (Negative) REVENUES: Taxes: Excise 70,000$ 70,000$ 90,581$ 20,581$ Charges for Services 9,100 9,100 6,370 (2,730) Investment Earnings 150 150 179 29 Total Revenues 79,250 79,250 97,130 17,880 EXPENDITURES: Current: Economic Environment 85,000 85,000 75,192 9,808 Total Expenditures 85,000 85,000 75,192 9,808 Excess (Deficiency) of Revenues Over (Under) Expenditures (5,750) (5,750) 21,938 27,688 Net Change in fund Balances (5,750) (5,750) 21,938 27,688 Fund Balances - Beginning 91,931 109,913 109,913 - Fund Balances - Ending 86,181$ 104,163$ 131,851$ 27,688$ Budget Amounts For the Year Ended December 31, 2013 City of Auburn, Washington STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL HOTEL/MOTEL TAX SPECIAL REVENUE FUND City of Auburn: 2013 CAFR Fund Financial Statements and Schedules 116 Variance with Final Final Budget Original Adopted Actual Positive (GAAP Basis)(GAAP Basis)Results (Negative) REVENUES: Taxes: Interfund Utility 495,956$ 495,956$ 556,036$ 60,080$ Utility 1,504,032 1,504,032 1,447,193 (56,839) Intergovernmental 560,000 560,000 - (560,000) Investment Earnings 1,500 1,500 3,244 1,744 Total Revenues 2,561,488 2,561,488 2,006,473 (555,015) EXPENDITURES: Current: Transportation 2,630,920 2,854,410 2,204,259 650,151 Capital Outlay - 1,510 - 1,510 Total Expenditures 2,630,920 2,855,920 2,204,259 651,661 Excess (Deficiency) of Revenues Over (Under) Expenditures (69,432) (294,432) (197,786) 96,646 Net Change in Fund Balances (69,432) (294,432) (197,786) 96,646 Fund Balances - Beginning 1,654,369 1,680,301 1,680,301 - Fund Balances - Ending 1,584,937$ 1,385,869$ 1,482,515$ 96,646$ Budget Amounts For the Year Ended December 31, 2013 City of Auburn, Washington STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL ARTERIAL STREET PRESERVATION SPECIAL REVENUE FUND City of Auburn: 2013 CAFR Fund Financial Statements and Schedules 117 Variance with Final Final Budget Original Adopted Actual Positive (GAAP Basis)(GAAP Basis)Results (Negative) REVENUES: Taxes: Intergovernmental 30,000$ 30,000$ 42,125$ 12,125$ Investment Earnings 1,300 1,300 1,206 (94) Miscellaneous 250,000 250,000 50,289 (199,711) Total Revenues 281,300 281,300 93,620 (187,680) EXPENDITURES: Current: Security of Persons & Property 282,922 283,154 240,341 42,813 Capital Outlay - 17,268 - 17,268 Total Expenditures 282,922 300,422 240,341 60,081 Excess (Deficiency of Revenues Over (Under) Expenditures (1,622) (19,122) (146,721) (127,599) Net Change in Fund Balances (1,622) (19,122) (146,721) (127,599) Fund Balances - Beginning 919,090 858,074 858,074 - Fund Balances - Ending 917,468$ 838,952$ 711,353$ (127,599)$ Budget Amounts For the Year Ended December 31, 2013 City of Auburn, Washington STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL DRUG FORFEITURE SPECIAL REVENUE FUND City of Auburn: 2013 CAFR Fund Financial Statements and Schedules 118 Variance with Final Final Budget Original Adopted Actual Positive (GAAP Basis)(GAAP Basis)Results (Negative) REVENUES: Intergovernmental 450,000$ 592,000$ 413,319$ (178,681)$ Investment Earnings - - 4 4 Total Revenues 450,000 592,000 413,323 (178,677) EXPENDITURES: Current: Economic Environment 460,000 602,000 419,212 182,788 Total Expenditures 460,000 602,000 419,212 182,788 Excess (Deficiency) of Revenues Over (Under) Expenditures (10,000) (10,000) (5,889) 4,111 Net Change in Fund Balances (10,000) (10,000) (5,889) 4,111 Fund Balances - Beginning 55,647 43,412 43,412 - Fund Balances - Ending 45,647$ 33,412$ 37,523$ 4,111$ Budget Amounts For the Year Ended December 31, 2013 City of Auburn, Washington STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL HOUSING & COMMUNITY DEVELOPMENT SPECIAL REVENUE FUND City of Auburn: 2013 CAFR Fund Financial Statements and Schedules 119 Variance with Final Final Budget Original Adopted Actual Positive (GAAP Basis)(GAAP Basis)Results (Negative) REVENUES: Intergovernmental 7,100$ 7,100$ 7,100$ -$ Investment Earnings 20 20 37 17 Total Revenues 7,120 7,120 7,137 17 Excess (Deficiency) of Revenues Over (Under) Expenditures 7,120 7,120 7,137 17 Net Change in Fund Balances 7,120 7,120 7,137 17 Fund Balances - Beginning 22,451 22,451 22,450 (1) Fund Balances - Ending 29,571$ 29,571$ 29,587$ 16$ Budget Amounts For the Year Ended December 31, 2013 City of Auburn, Washington STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL RECREATION TRAILS SPECIAL REVENUE FUND City of Auburn: 2013 CAFR Fund Financial Statements and Schedules 120 Variance with Final Final Budget Original Adopted Actual Positive (GAAP Basis)(GAAP Basis)Results (Negative) REVENUES: Other 55,000$ 55,000$ 69,475 14,475$ Investment Earnings 40 40 84 44 Total Revenues 55,040 55,040 69,559 14,519 EXPENDITURES: Current: Economic Environment 55,000 55,000 52,863 2,137 Total Expenditures 55,000 55,000 52,863 2,137 Excess (Deficiency) of Revenues Over (Under) Expenditures 40 40 16,696 16,656 Net Change in Fund Balances 40 40 16,696 16,656 Fund Balances - Beginning 21,640 24,456 24,456 - Fund Balances - Ending 21,680$ 24,496$ 41,152$ 16,656$ Budget Amounts For the Year Ended December 31, 2013 City of Auburn, Washington STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL BUSINESS IMPROVEMENT AREA SPECIAL REVENUE FUND City of Auburn: 2013 CAFR Fund Financial Statements and Schedules 121 Variance with Final Final Budget Original Adopted Actual Positive (GAAP Basis)(GAAP Basis)Results (Negative) REVENUES: Investment Earnings 3,000$ 3,000$ 7,511$ 4,511$ Total Revenues 3,000 3,000 7,511 4,511 EXPENDITURES: Debt Service: Principal 215,000 215,000 204,880 10,120 Interest and Other Costs 25,880 25,880 - 25,880 Total Expenditures 240,880 240,880 204,880 36,000 Excess (Deficiency) of Revenues Over (Under) Expenditures (237,880) (237,880) (197,369) 40,511 OTHER FINANCING SOURCES (USES): Transfers In (Note 5)- 2,000,000 2,000,000 - Transfers Out (Note 5)(1,375,229) (1,376,229) (927,461) 448,768 Total Other Financing Sources (Uses)(1,375,229) 623,771 1,072,539 448,768 Net Change in Fund Balances (1,613,109) 385,891 875,170 489,279 Fund Balances - Beginning 7,313,905 7,352,958 7,352,958 - Fund Balances - Ending 5,700,796$ 7,738,849$ 8,228,128$ 489,279$ RECONCILIATION OF PERSPECTIVE DIFFERENCE BETWEEN BUDGETARY INFORMATION AND GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP): The Cumulative Reserve Fund is combined with the General Fund for purposes of GASB Statement 54 (8,228,128) Fund Balance - Ending (GAAP)-$ The notes to the financial statements are an integral part of this statement. Budget Amounts For the Year Ended December 31, 2013 City of Auburn, Washington STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL CUMULATIVE RESERVE SPECIAL REVENUE FUND City of Auburn: 2013 CAFR Fund Financial Statements and Schedules 122 Variance with Final Final Budget Original Adopted Actual Positive (GAAP Basis)(GAAP Basis)Results (Negative) REVENUES: TAXES: Charges for Services 875,000$ 875,000$ 1,692,460$ 817,460$ Investment Earnings 5,000 5,000 6,206 1,206 Total Revenues 880,000 880,000 1,698,666 818,666 EXPENDITURES: Current: Security of Person & Property 50,000 50,000 50,000 - Total Expenditures 50,000 50,000 50,000 - Excess (Deficiency) of Revenues Over (Under) Expenditures 830,000 830,000 1,648,666 818,666 OTHER FINANCING SOURCES (USES): Transfers In (Note 5)- 151,300 151,302 2 Transfers Out (Note 5)(667,210) (822,724) (220,380) 602,344 Total Other Financing Sources (Uses)(667,210) (671,424) (69,078) 602,346 Net Change in Fund Balances 162,790 158,576 1,579,588 1,421,012 Fund Balances - Beginning 2,368,612 3,061,179 3,061,179 - Fund Balances - Ending 2,531,402$ 3,219,755$ 4,640,767$ 1,421,012$ Budget Amounts For the Year Ended December 31, 2013 City of Auburn, Washington STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL MITIGATION SPECIAL REVENUE FUND City of Auburn: 2013 CAFR Fund Financial Statements and Schedules 123 NON-MAJOR GOVERNMENTAL FUNDS DEBT SERVICE FUNDS Debt service funds account for payments of principal and interest on general obligation and special assessment long-term debt. The City of Auburn has one outstanding general obligation issue, and three special assessment funds. The 2010 A Series General Obligation Bonds (refunding portion) Accounts for debt service on a Council-approved bond issue to partially advance refund the 1998 General Obligation Library Bonds. The 2010 A Series (non-refunding portion) and B Series General Obligation Bonds Accounts for debt service on a Council-approved bond issue to finance acquisition costs of certain condominium units in the City Hall Annex. The 2010 C Series and 2010 D Series General Obligation Bonds Accounts for the debt service on a Council-approved bond issue to finance a portion of the downtown infrastructure improvements in the City’s revitalization area. The L.I.D. Guarantee Fund This fund provides financial security for outstanding L.I.D. bonds and special assessment debt. Special Assessment Debt Fund Accounts for the special assessment collections and debt service payments for all local improvement districts located within the City. City of Auburn: 2013 CAFR Fund Financial Statements and Schedules 124 Total GO Library 2010 2010 Nonmajor Refunding A & B C & D Local LID Special Debt Service Bond Debt Annex Revitalization Guarantee Assessments Funds ASSETS: Cash and Cash Equivalents -$ -$ -$ 34,524$ 11,264$ 45,788$ Special Assessments - - - - 496,189 496,189 Total Assets - - - 34,524 507,453 541,977 LIABILITIES AND FUND BALANCES: Liabilities: Unearned Revenue - - - - 496,189 496,189 Total Liabilities - - - - 496,189 496,189 Fund Balances: Restricted - - - 34,524 11,264 45,788 Total Fund Balances - - - 34,524 11,264 45,788 Total Liabilities and Fund Balances -$ -$ -$ 34,524$ 507,453$ 541,977$ City of Auburn, Washington COMBINING BALANCE SHEET NON-MAJOR DEBT SERVICE FUNDS December 31, 2013 City of Auburn: 2013 CAFR Fund Financial Statements and Schedules 125 Total GO Library 2,010 2,010 Nonmajor Refunding A & B C & D Local L I D Special Debt Service Bond Debt Annex Revitalization Guarantee Assessments Funds REVENUES: Taxes: Retail Sales & Use -$ -$ 277,292$ -$ -$ 277,292$ Special Assessments - - - - 40,772 40,772 Intergovernmental - 374,018 120,692 - - 494,710 Investment Earnings 96 - 183 53 28,142 28,474 Total Revenues 96 374,018 398,167 53 68,914 841,248 EXPENDITURES: Debt Service: Principal 220,000 500,000 205,000 - 36,540 961,540 Interest 60,300 1,196,517 389,367 - 27,078 1,673,262 Total Expenditures 280,300 1,696,517 594,367 - 63,618 2,634,802 Excess (Deficiency) of Revenues Over (Under) Expenditures (280,204) (1,322,499) (196,200) 53 5,296 (1,793,554) OTHER FINANCING SOURCES (USES): Transfers In (Note 5)234,049 1,322,499 196,200 - - 1,752,748 Transfers Out (Note 5)- - - (10,000) - (10,000) Total Other Financing Sources (Uses)234,049 1,322,499 196,200 (10,000) - 1,742,748 Net Change in Fund Balances (46,155) - - (9,947) 5,296 (50,806) Fund Balances - Beginning 46,155 - - 44,471 5,968 96,594 Fund Balances - Ending -$ -$ -$ 34,524$ 11,264$ 45,788$ City of Auburn, Washington COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE NON-MAJOR DEBT SERVICE FUNDS For the Year Ended December 31, 2013 City of Auburn: 2013 CAFR Fund Financial Statements and Schedules 126 City of Auburn: 2013 CAFR Fund Financial Statements and Schedules 127 NON-MAJOR GOVERNMENTAL FUNDS CAPITAL PROJECT FUNDS Capital projects funds account for the City of Auburn's financial resources used for the acquisition or construction of major non-proprietary capital facilities. Auburn has two non-major capital project funds. The Municipal Park Construction Fund Accounts for park related construction activity and includes funding from a portion of field rental income and adult athletic team fees. The Local Revitalization Fund Accounts for the City Hall Plaza and the Downtown Promenade project. City of Auburn: 2013 CAFR Fund Financial Statements and Schedules 128 Municipal Nonmajor Park Local Capital Project Construction Revitalization Funds ASSETS: Cash and Cash Equivalents 649,242$ 559,070$ 1,208,312$ Due From Other Governmental Units 41,984 - 41,984 Total Assets 691,226 559,070$ 1,250,296$ LIABILITIES AND FUND BALANCES: Liabilities: Current Payables 216,747 - 216,747 Total Liabilities 216,747 - 216,747 Fund Balances: Restricted 474,479 60,691 535,170 Assigned - 498,379 498,379 Total Fund Balances 474,479 559,070 1,033,549 Total Liabilities and Fund Balances 691,226$ 559,070$ 1,250,296$ City of Auburn, Washington COMBINING BALANCE SHEET CAPITAL PROJECT FUND December 31, 2013 City of Auburn: 2013 CAFR Fund Financial Statements and Schedules 129 Municipal Nonmajor Park Local Capital Project Construction Revitalization Funds REVENUES: Taxes: Property 120,217$ -$ 120,217$ Intergovernmental 947,079 60,692 1,007,771 Charges for Services 11,111 - 11,111 Investment Earnings 759 865 1,624 Miscellaneous 41,690 - 41,690 Total Revenues 1,120,856 61,557 1,182,413 EXPENDITURES: Cultural and Recreation 794 - 794 Capital Outlay 1,355,494 109,463 1,464,957 Total Expenditures 1,356,288 109,463 1,465,751 Excess (Deficiency) of Revenues Over (Under) Expenditures (235,432) (47,906) (283,338) OTHER FINANCING SOURCES (USES): Transfers In (Note 5)279,796 - 279,796 Total Other Financing Sources (Uses)279,796 - 279,796 Net Change in Fund Balances 44,364 (47,906) (3,542) Fund Balances - Beginning 430,115 606,976 1,037,091 Fund Balances - Ending 474,479$ 559,070$ 1,033,549$ City of Auburn, Washington COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES CAPITAL PROJECT FUND For the Year Ended December 31, 2013 City of Auburn: 2013 CAFR Fund Financial Statements and Schedules 130 City of Auburn: 2013 CAFR Fund Financial Statements and Schedules 131 NON-MAJOR GOVERNMENTAL FUNDS PERMANENT FUNDS Permanent funds are used to report resources that are legally restricted to the extent that only earnings, and not principal, may be used for purposes that support City programs that are for the benefit of the City or its citizens. Auburn has one permanent fund. The Cemetery Endowed Care Fund Accounts for non-expendable investments held by the City's trustee. The interest income from investments is available for use by the cemetery fund for capital enhancement and maintenance. City of Auburn: 2013 CAFR Fund Financial Statements and Schedules 132 Cemetery Endowed Care ASSETS: Cash and Cash Equivalents Non-Expendable Trust 625,440$ Investments 1,000,930 Other Receivables 3,194 Total Assets 1,629,564 FUND BALANCES: Nonspendable 1,536,316 Assigned 93,248 Total Fund Balances 1,629,564 Total Liabilities and Fund Balances 1,629,564$ City of Auburn, Washington BALANCE SHEET PERMANENT FUND December 31, 2013 City of Auburn: 2013 CAFR Fund Financial Statements and Schedules 133 Cemetery Endowed Care REVENUES: Increase to Endowment from Lot Sales 37,506$ Investment Earnings 6,142 Total Revenues 43,648 Excess (Deficiency) of Revenues Over (Under) Expenditures 43,648 Net Change in Fund Balance 43,648 Fund Balance - Beginning 1,585,916 Fund Balance - Ending 1,629,564$ For the Year Ended December 31, 2013 City of Auburn, Washington STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE PERMANENT FUND City of Auburn: 2013 CAFR Fund Financial Statements and Schedules 134 City of Auburn: 2013 CAFR Fund Financial Statements and Schedules 135 NON-MAJOR PROPRIETARY FUNDS ENTERPRISE FUNDS The City's enterprise funds are used to account for operations that are financed and operated in a manner similar to private business operations. The goods and services these funds provide to the general public are primarily financed by service charges. Enterprise funds are self-supporting and use the accrual method of accounting. Auburn has two non-major enterprise funds. The Airport Fund Provides accounting of the activities of the Auburn Municipal Airport. Sources of income for the fund are leases, rentals, fuel charges, investment interest, and grant funding as available. The Cemetery Fund Accounts for Mountain View Cemetery's operations. City of Auburn: 2013 CAFR Fund Financial Statements and Schedules 136 Total Nonmajor Enterprise Airport Cemetery Funds ASSETS: Current Assets: Cash and Cash Equivalents 908,031$ 295,251$ 1,203,282$ Restricted Cash: Customer Deposits 52,409 - 52,409 Due From Other Governmental Units 84,851 - 84,851 Inventories - 13,365 13,365 Total Current Assets 1,045,291 308,616 1,353,907 Noncurrent Assets: Capital Assets: Land 3,653,343 342,836 3,996,179 Buildings and Equipments 2,643,397 1,022,267 3,665,664 Improvements Other Than Buildings 8,608,183 1,143,417 9,751,600 Construction in Progress 207,982 - 207,982 Less: Accumulated Depreciation (5,807,148) (1,363,388) (7,170,536) Total Capital Assets (Net of A/D)9,305,757 1,145,132 10,450,889 Total Noncurrent Assets 9,305,757 1,145,132 10,450,889 Total Assets 10,351,048 1,453,748 11,804,796 DEFERRED OUTFLOWS OF RESOURCES: Deferred Outflow from Bond Refunding 49,856 49,856 LIABILITIES: Current Liabilities: Current Payables 66,598 46,682 113,280 Employee Leave Benefits - Current 2,157 13,601 15,758 General Obligation Bonds Payable - Current 125,000 - 125,000 Customer Deposits 52,409 - 52,409 Total Current Liabilities 246,164 60,283 306,447 Noncurrent Liabilities: Employee Leave Benefits 644 4,055 4,699 General Obligation Bonds Payable 835,230 500,528 1,335,758 Total Noncurrent Liabilities 835,874 504,583 1,340,457 Total Liabilities 1,082,038 564,866 1,646,904 NET POSITION: Invested in Capital Assets, Net of Related Debt 8,345,527 644,604 8,990,131 Unrestricted 973,339 244,278 1,217,617 Total Net Position 9,318,866$ 888,882$ 10,207,748$ City of Auburn, Washington COMBINING STATEMENT OF NET POSITION NON-MAJOR ENTERPRISE FUNDS December 31, 2013 City of Auburn: 2013 CAFR Fund Financial Statements and Schedules 137 Total Nonmajor Enterprise Airport Cemetery Funds OPERATING REVENUES: Charges for Services 25,861$ 943,646$ 969,507$ Other Operating Revenue 606,456 - 606,456 Total Operating Revenues 632,317 943,646 1,575,963 OPERATING EXPENSES: Operations & Maintenance 14,471 595,431 609,902 Administration 464,826 236,706 701,532 Depreciation/Amortization 403,105 57,683 460,788 Other Operating Expenses 171 12,219 12,390 Total Operating Expenses 882,573 902,039 1,784,612 Operating Income (Loss)(250,256) 41,607 (208,649) NON-OPERATING REVENUE (EXPENSE): Interest Revenue 1,545 400 1,945 Other Non-Operating Revenues 10,383 677 11,060 Interest Revenue (Expense)(51,212) (21,428) (72,640) Total Non-Operating Revenue (Expense)(39,284) (20,351) (59,635) Income (Loss) Before Contributions & Transfers (289,540) 21,256 (268,284) Capital Contributions 188,783 - 188,783 Change in Net Position (100,757) 21,256 (79,501) Net Position, January 1, as Previosly Reported 9,439,263 872,103 10,311,366 Change in Accounting Principle (19,640) (4,477) (24,117) Net Position, January 1, as Restated 9,419,623 867,626 10,287,249 Net Position, December 31 9,318,866$ 888,882$ 10,207,748$ City of Auburn, Washington COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION NON-MAJOR ENTERPRISE FUNDS For the Year Ended December 31, 2013 City of Auburn: 2013 CAFR Fund Financial Statements and Schedules 138 Page 1 of 2 Total Non Major Enterprise Airport Cemetery Funds CASH FLOWS FROM OPERATING ACTIVITIES: Cash Received From Users 636,606$ 943,646$ 1,580,252$ Cash Paid to Suppliers for Goods & Services (420,641) (253,071) (673,712) Cash Paid for Taxes (171) (12,219) (12,390) Cash Paid to Employees (27,238) (579,150) (606,388) Other Non-Operating Revenue 5,571 - 5,571 Net Cash Provided (Used) By Operating Activities 194,127 99,206 293,333 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Operating Grant Received 4,812 - 4,812 Net Cash Provided (Used) by Non-Capital Financing Activities 4,812 - 4,812 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Purchase of Capital Assets (200,222) - (200,222) Contributed Capital 188,783 - 188,783 Capital Grant (45,936) - (45,936) Principal Payment on Debt (115,000) - (115,000) Interest Payment on Debt (46,275) (22,268) (68,543) Net Cash Provided (Used) for Capital and Related Financing Activities (218,650) (22,268) (240,918) CASH FLOW FROM INVESTING ACTIVITIES: Interest Received 1,545 1,078 2,623 Net Cash Provided (Used) in Investing Activities 1,545 1,078 2,623 Net Increase (Decrease) in Cash and Cash Equivalents (18,166) 78,016 59,850 Cash and Cash Equivalents - Beginning of Year 978,606 217,235 1,195,841 Cash and Cash Equivalents - End of Year 960,440$ 295,251$ 1,255,691$ CASH AT END OF YEAR CONSISTS OF: Cash and Cash Equivalents 908,031 295,251 1,203,282 Restricted Cash - Customer Deposits 52,409 - 52,409 Total Cash 960,440$ 295,251$ 1,255,691$ City of Auburn, Washington COMBINING STATEMENT OF CASH FLOWS NON-MAJOR ENTERPRISE FUNDS For the Fiscal Year Ended December 31, 2013 City of Auburn: 2013 CAFR Fund Financial Statements and Schedules 139 Page 2 of 2 Total Non Major Enterprise Airport Cemetery Funds RECONCILIATION OF NET OPERATING INCOME TO NEW CASH PROVIDED BY OPERATING ACTIVITIES Operating Income (Loss)(250,256)$ 41,607$ (208,649)$ ADJUSTMENTS TO RECONCILE OPERATING INCOME TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES: Depreciation 403,105 57,683 460,788 Asset (Increases) Decreases: Miscellaneous A/R Revenue 5,571 - 5,571 Inventory - 719 719 Liability Increases (Decreases): Accounts & Vouchers Payable 31,066 1,134 32,200 Deposits Payable 4,289 - 4,289 Wages & Benefits Payable 44 (3,672) (3,628) Compensated Absences Payable 308 1,735 2,043 Total Adjustments 444,383 57,599 501,982 Net Cash Provided (Used) by Operating Activities 194,127$ 99,206$ 293,333$ SCHEDULE OF NONCASH INVESTING, CAPITAL AND FINANCING ACTIVITIES Total Non Cash Investing, Capital and Financing Activities -$ -$ -$ City of Auburn, Washington COMBINING STATEMENT OF CASH FLOWS NON-MAJOR ENTERPRISE FUNDS For the Fiscal Year Ended December 31, 2013 City of Auburn: 2013 CAFR Fund Financial Statements and Schedules 140 City of Auburn: 2013 CAFR Fund Financial Statements and Schedules 141 NON-MAJOR PROPRIETARY FUNDS INTERNAL SERVICE FUNDS The City of Auburn's internal service funds are used to account for the financing of goods and services provided by one department of operation to other departments on a cost reimbursement basis. Internal service funds are self-supporting and use the accrual method of accounting. Auburn has four internal service funds. The Insurance Fund Provides a source of funds to pay unemployment claims and property and casualty claims which fall below deductible levels. The Facilities Funds Accounts for the costs of maintaining various City facilities. The Information Services Fund Accounts for the costs of purchasing and maintaining the City’s various computer and telecommunications systems. The Equipment Rental Fund Accounts for the costs of purchasing, maintaining, and operating Auburn's fleet of vehicles and related equipment. City of Auburn: 2013 CAFR Fund Financial Statements and Schedules 142 Information Equipment Insurance Facilities Services Rental Total ASSETS: Current Assets: Cash and Cash Equivalents 1,815,842$ 2,085,450$ 3,851,084$ 6,154,480$ 13,906,856$ Customer Accounts - 98,913 - - 98,913 Due From Other Governmental Units - - 3,053 - 3,053 Inventories - - - 201,114 201,114 Total Current Assets 1,815,842 2,184,363 3,854,137 6,355,594 14,209,936 Capital Assets: Buildings and Equipment - - 5,575,587 12,366,893 17,942,480 Improvements Other than Buildings - - 7,497 109,661 117,158 Less: Accumulated Depreciation - - (4,299,727) (7,634,625) (11,934,352) Total Capital Assets (Net of A/D)- - 1,283,357 4,841,929 6,125,286 Total Noncurrent Assets - - 1,283,357 4,841,929 6,125,286 Total Assets 1,815,842 2,184,363 5,137,494 11,197,523 20,335,222 LIABILITIES: Current Liabilities: Current Payables 111 207,852 448,125 435,149 1,091,237 Customer Deposits - 2,500 - - 2,500 Employee Leave Benefits - Current - 27,631 65,417 36,949 129,997 Total Current Liabilities 111 237,983 513,542 472,098 1,223,734 Noncurrent Liabilities Employee Leave Benefits - 8,239 19,507 11,018 38,764 Total Noncurrent Liabilities - 8,239 19,507 11,018 38,764 Total Liabilities 111 246,222 533,049 483,116 1,262,498 NET POSITION: Invested in Capital Assets, Net of Related Debt - - 1,283,357 4,841,929 6,125,286 Unrestricted 1,815,731 1,938,141 3,321,088 5,872,478 12,947,438 Total Net Position 1,815,731$ 1,938,141$ 4,604,445$ 10,714,407$ 19,072,724$ City of Auburn, WashingtonCOMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS December 31, 2013 City of Auburn: 2013 CAFR Fund Financial Statements and Schedules 143 Information Equipment Insurance Facilities Services Rental Total OPERATING REVENUES: Charges for Services -$ 3,507,467$ 4,835,649$ 2,982,367$ 11,325,483$ Other Operating Revenue - 121,154 103,696 - 224,850 Total Operating Revenues - 3,628,621 4,939,345 2,982,367 11,550,333 OPERATING EXPENSES: Operations & Maintenance - 2,589,688 4,042,615 1,323,149 7,955,452 Administration 215,150 - - 880,397 1,095,547 Depreciation/Amortization - - 467,317 697,048 1,164,365 Total Operating Expenses 215,150 2,589,688 4,509,932 2,900,594 10,215,364 Operating Income (Loss)(215,150) 1,038,933 429,413 81,773 1,334,969 NON-OPERATING REVENUE (EXPENSE): Interest Revenue 2,200 2,801 5,072 8,900 18,973 Other Non-Operating Revenues - 217,121 526 38,531 256,178 Gain (Loss) on Sale of Capital Assets - - - (10,858) (10,858) Total Non-Operating Revenue (Expense)2,200 219,922 5,598 36,573 264,293 Income (Loss) Before Contributions (212,950) 1,258,855 435,011 118,346 1,599,262 Transfers In (Note 5)- - 100,140 100,140 200,280 Transfers Out (Note 5)- (736,685) - (7,000) (743,685) Change in Net Position (212,950) 522,170 535,151 211,486 1,055,857 Total Net Position - Beginning 2,028,681 1,415,971 4,069,294 10,502,921 18,016,867 Total Net Position - Ending 1,815,731$ 1,938,141$ 4,604,445$ 10,714,407$ 19,072,724$ City of Auburn, Washington COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION INTERNAL SERVICE FUNDS For the Year Ended December 31, 2013 City of Auburn: 2013 CAFR Fund Financial Statements and Schedules 144 Page 1 of 2 Information Equipment Insurance Facilities Services Rental Total CASH FLOWS FROM OPERATING ACTIVITIES: Cash Received From Users -$ 3,581,926$ 4,938,315$ 2,982,367$ 11,502,608$ Cash Paid to Suppliers for Goods & Services (211,870) (1,797,006) (1,943,768) (1,293,893) (5,246,537) Cash Paid for Taxes (3,400) - - - (3,400) Cash Paid to Employees - (890,585) (1,950,988) (682,995) (3,524,568) Other Non-Operating Revenue - - 526 208 734 Net Cash Provided (Used) By Operating Activities (215,270) 894,335 1,044,085 1,005,687 2,728,837 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Operating Grant Received - 217,121 - - 217,121 Transfers In - - 100,140 100,140 200,280 Transfers Out - (736,685) - (7,000) (743,685) Net Cash Provided (Used) by Non-Capital Financing Activities - (519,564) 100,140 93,140 (326,284) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Proceeds from Sale of Equipment - - - 23,801 23,801 Purchase of Capital Assets - - (475,772) (587,912) (1,063,684) Proceeds from Insurance Settlement - - - 38,323 38,323 Net Cash Provided (Used) for Capital and Related Financing Activities - - (475,772) (525,788) (1,001,560) CASH FLOW FROM INVESTING ACTIVITIES: Interest Received 2,200 2,801 5,072 8,900 18,973 Net Cash Provided (Used) in Investing Activities 2,200 2,801 5,072 8,900 18,973 Net Increase (Decrease) in Cash and Cash Equivalents (213,070) 377,572 673,525 581,939 1,419,966 Cash and Cash Equivalents - Beginning of Year 2,028,912 1,707,878 3,177,559 5,572,541 12,486,890 Cash and Cash Equivalents - End of Year 1,815,842$ 2,085,450$ 3,851,084$ 6,154,480$ 13,906,856$ CASH AT END OF YEAR CONSISTS OF: Cash and Cash Equivalents 1,815,842 2,085,450 3,851,084 6,154,480 13,906,856 Total Cash 1,815,842$ 2,085,450$ 3,851,084$ 6,154,480$ 13,906,856$ City of Auburn, Washington COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS For the Fiscal Year Ended December 31, 2013 City of Auburn: 2013 CAFR Fund Financial Statements and Schedules 145 Page 2 of 2 Information Equipment Insurance Facilities Services Rental Total RECONCILIATION OF NET OPERATING INCOME TO NEW CASH PROVIDED BY OPERATING ACTIVITIES Operating Income (Loss)(215,150)$ 1,038,933$ 429,413$ 81,773$ 1,334,969$ ADJUSTMENTS TO RECONCILE OPERATING INCOME TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES: Depreciation - - 467,317 697,048 1,164,365 Asset (Increases) Decreases: Accounts Receivable - (45,970) (1,030) - (47,000) Miscellaneous A/R Revenue - - 526 208 734 Inventory - - - (47,907) (47,907) Liability Increases (Decreases): Accounts & Vouchers Payable (120) (79,508) 150,494 265,099 335,965 Wages & Benefits Payable - (420) 3,575 3,868 7,023 Compensated Absences Payable - (17,975) (6,210) 5,598 (18,587) Total Adjustments (120) (144,598) 614,672 923,914 1,393,868 Net Cash Provided (Used) by Operating Activities (215,270)$ 894,335$ 1,044,085$ 1,005,687$ 2,728,837$ SCHEDULE OF NONCASH INVESTING, CAPITAL AND FINANCING ACTIVITIES Total Non Cash Investing, Capital and Financing Activities -$ -$ -$ -$ -$ City of Auburn, Washington COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS For the Fiscal Year Ended December 31, 2013 City of Auburn: 2013 CAFR Fund Financial Statements and Schedules 146 City of Auburn: 2013 CAFR Fund Financial Statements and Schedules 147 AGENCY FUNDS The agency fund accounts for monies over which the City is strictly a short-term custodian. Agency funds typically involve only the receipt, temporary investment, and remittance of fiduciary resources to individuals, private organizations, or other governments. City of Auburn: 2013 CAFR Fund Financial Statements and Schedules 148 Balance Balance 1/1/2013 Additions Deductions 12/31/2013 ASSETS: Cash and Cash Equivalents 1,231,749$ 1,847,910$ 1,961,320$ 1,118,339$ Other Current Assets 1,054 294,979 291,275 4,758 Due from Other Governments - 30,000 - 30,000 Total Assets 1,232,803$ 2,172,889$ 2,252,595$ 1,153,097$ LIABILITIES: Due to Other Government Units 1,232,803 2,412,771 2,492,477 1,153,097 Total Liabilities 1,232,803$ 2,412,771$ 2,492,477$ 1,153,097$ City of Auburn, Washington STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUND For the Fiscal Year Ended December 31, 2013 City of Auburn: 2013 CAFR Statistical Section 149 City of Auburn STATISTICAL SECTION December 31, 2013 Financial Trends Information Financial trends schedules are intended to provide users with information to assist them in understanding and assessing how the City’s financial position has changed over time. Schedule 1 Net position by components .............................................................................................. 150 Schedule 2 Changes in net position ...................................................................................................... 151 Schedule 3 Fund balances, government funds ....................................................................................... 152 Schedule 4 Changes in fund balances, government funds ...................................................................... 153 Schedule 5 Tax revenues by source, government funds ......................................................................... 154 Revenue Capacity Information The objective of providing revenue capacity information is to help users understand and assess the factors affecting the City’s ability to generate its most significant local source revenues. Schedule 6 Assessed value by type ........................................................................................................ 155 Schedule 7 Property tax data ............................................................................................................... 156 Schedule 8 Property tax levies and collections ...................................................................................... 158 Schedule 9 Principal taxpayers-property taxes-sales taxes ...................................................................... 159 Schedule 10 Retail tax collections by sector ........................................................................................... 160 Debt Capacity Information Debt capacity information is intended to assist users to understand and assess the City’s current levels of outstanding debt and ability to issue additional debt in the future. Schedule 11 Ratios of outstanding debt by type ..................................................................................... 161 Schedule 12 Computation of legal debt margin ...................................................................................... 162 Schedule 13 Legal debt margin ratios ...................................................................................................... 162 Schedule 14 Computation of net direct and estimated overlapping debt ................................................. 163 Schedule 15 Ratios of net general bonded debt to assessed value ............................................................ 164 Schedule 16 Pledged revenue bond coverages ........................................................................................ 165 Demographic and Economic Information These schedules offer demographic and economic information to assist users in understanding certain aspects of the environment within which the City operates and to provide information that facilitates comparisons of financial statement information over time and across governmental units. Schedule 17 Population, income and housing trends ............................................................................... 166 Schedule 18 Major employers ................................................................................................................ 167 Operating Information These schedules contain service and infrastructure data to help users understand how the information in the City’s financial report relates to the services the City provides and the activities it performs. Schedule 19 Staffing levels by department .............................................................................................. 168 Schedule 20 Operating indicators by department .................................................................................... 169 Schedule 21 Capital indicators by department ....................................................................................... 170 City of Auburn: 2013 CAFR Statistical Section 150 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Governmental activities: Invested in capital assets, net of related debt 171,921,373$ 194,121,232$ 200,814,063$ 212,611,232$ 303,564,348$ 314,691,982$ 320,506,701$ 340,941,112$ 354,899,294$ 346,195,793$ Restricted 25,615,116 23,442,309 26,839,342 24,519,024 28,965,599 12,741,566 15,180,467 14,230,963 13,164,116 15,019,909 Unrestricted 28,490,736 24,095,336 24,148,157 26,774,107 25,955,501 43,754,879 46,734,364 45,250,090 43,245,050 47,426,352 Total governmental activities net position 226,027,225 241,658,877 251,801,562 263,904,363 358,485,448 371,188,427 382,421,532 400,422,165 411,308,460 408,642,054 Business-type activities: Invested in capital assets, net of related debt 106,783,634 115,137,273 125,265,152 130,515,163 144,626,496 150,621,492 152,343,987 166,289,542 173,709,864 165,619,867 Restricted 1,969,809 2,238,611 6,987,485 1,227,395 933,914 2,071,219 4,107,128 4,153,982 4,719,058 16,839,589 Unrestricted 31,849,110 32,513,576 25,693,517 40,655,261 35,859,489 29,546,169 28,642,334 30,523,974 30,439,381 32,880,216 Total business-type activities net position 140,602,553 149,889,460 157,946,154 172,397,819 181,419,899 182,238,880 185,093,449 200,967,498 208,868,303 215,339,672 Primary government: Invested in capital assets, net of related debt 278,705,007 309,258,505 326,079,215 343,126,395 448,190,844 465,313,474 472,850,688 507,230,654 528,609,158 511,815,660 Restricted 27,584,925 25,680,920 33,826,827 25,746,419 29,899,513 14,812,785 19,287,595 18,384,945 17,883,174 31,859,498 Unrestricted 60,339,846 56,608,912 49,841,674 67,429,368 61,814,990 73,301,048 75,376,698 75,774,064 73,684,431 80,306,568 Total primary government net position 366,629,778$ 391,548,337$ 409,747,716$ 436,302,182$ 539,905,347$ 553,427,307$ 567,514,981$ 601,389,663$ 620,176,763$ 623,981,726$ Source: City of Auburn, Finance Department City of Auburn, Washington SCHEDULE 1NET POSITION BY COMPONENTS Last Ten Fiscal Years (Accrual Basis of Accounting) City of Auburn: 2013 CAFR Statistical Section 151 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 ExpensesGovernmental activities: General government 4,235,953$ 5,284,440$ 6,462,578$ 7,196,492$ 8,000,715$ 7,567,085$ 7,934,948$ 8,581,829$ 9,441,887$ 7,508,112$ Public safety 26,076,348 28,048,087 29,804,864 33,396,630 28,217,844 25,675,063 25,890,627 27,320,805 27,339,301 27,423,015 Transportation 8,239,795 7,956,286 7,619,268 8,077,154 12,974,861 11,471,167 11,989,752 12,123,615 15,736,610 14,861,834 Physical environment 2,415,047 2,209,652 2,418,543 3,269,334 3,096,696 3,327,836 2,498,539 2,327,911 2,535,877 2,699,301 Culture and recreation 4,949,050 5,324,543 5,729,431 6,539,281 6,271,924 7,561,569 7,307,270 7,606,584 8,310,210 9,184,289 Economic environment 2,866,473 1,919,780 1,848,988 2,400,031 2,608,980 3,000,257 2,499,631 3,135,984 2,914,335 2,346,025 Health and human services 597,423 602,726 763,156 416,456 776,224 527,029 578,247 619,172 633,175 510,285 Interest on long-term debt 362,051 188,945 203,180 163,916 226,651 408,471 1,809,322 1,685,055 2,336,960 3,795,024 Total governmental activities expenses 49,742,140 51,534,459 54,850,008 61,459,294 62,173,895 59,538,478 60,508,335 63,400,955 69,248,355 68,327,885 Business-type activities: Water 6,913,709 6,962,997 7,647,935 7,873,191 8,565,231 8,970,215 10,042,879 8,961,736 9,655,724 11,893,094 Sewer 11,207,786 12,044,330 11,878,252 13,974,607 14,479,299 16,569,297 17,794,958 18,852,402 19,680,724 21,584,215 Storm drainage 3,169,350 3,354,899 3,852,335 4,224,881 5,226,823 7,275,072 6,994,381 6,752,021 8,025,729 7,726,467 Solid waste 8,645,372 9,121,727 9,936,222 10,368,901 10,781,426 11,019,606 9,894,429 9,957,943 11,305,322 12,535,078 Golf course 973,110 1,032,733 1,020,070 1,576,126 1,958,703 1,909,758 1,844,108 1,903,836 1,912,174 1,933,597 Non-major business-type activities 1,624,365 1,593,944 1,618,285 1,735,118 1,720,603 1,666,754 1,781,204 2,010,776 1,954,104 1,857,252 Total business-type activities expenses 32,533,692 34,110,630 35,953,099 39,752,824 42,732,085 47,410,702 48,351,960 48,438,714 52,533,777 57,529,703 Total primary government expenses 82,275,832$ 85,645,089$ 90,803,107$ 101,212,118$ 104,905,980$ 106,949,180$ 108,860,294$ 111,839,669$ 121,782,132$ 125,857,588$ Program revenues Governmental activities: Charges for services General Government 561,013$ 663,309$ 820,585$ 1,126,258$ 2,316,125$ 814,095$ 1,168,574$ 1,010,911$ 897,521$ 893,326$ Public Safety 1,767,687 2,109,284 2,514,867 3,100,973 2,674,777 2,854,530 2,938,942 3,867,013 1,016,191 2,103,823 Transportation 447,036 1,052,110 631,340 1,930,504 1,272,751 1,587,850 960,532 1,042,147 1,819,851 1,967,778 Physical Environment 365,681 244,766 436,503 576,539 257,780 147,996 86,306 103,590 36,766 398,564 Culture and Recreation 654,417 726,753 881,318 1,245,122 917,544 1,048,390 962,558 1,182,688 880,380 873,970 Economic Environment 3,097,230 3,169,262 2,590,763 2,070,534 1,638,579 1,654,692 1,732,397 2,294,916 3,266,188 3,586,844 Health and human services - - - - - 989 449 7,528 - - Total charges for services 6,893,064 7,965,484 7,875,376 10,049,930 9,077,556 8,108,542 7,849,758 9,508,793 7,916,897 9,824,305 Operating grants and contributions 2,178,951 2,445,913 2,714,324 2,923,968 2,567,788 3,001,401 3,022,835 1,724,711 3,560,707 1,967,252 Capital grants and contributions 5,192,593 11,162,241 5,174,350 9,213,115 94,905,563 12,806,049 10,702,132 19,730,140 17,835,784 5,955,062 Total governmental activities program revenues 14,264,608 21,573,638 15,764,050 22,187,013 106,550,907 23,915,992 21,574,725 30,963,644 29,313,388 17,746,619 Business-type activities: Charges for services 31,747,066 32,658,440 36,226,324 38,784,127 39,883,386 42,338,079 43,461,742 45,045,488 50,710,688 57,533,735 Operating grants and contributions 33,384 54,999 47,961 43,263 55,024 87,454 70,841 116,735 97,052 90,361 Capital grants and contributions 4,351,278 7,857,856 3,988,202 12,479,500 10,670,660 1,992,259 7,391,111 15,981,735 7,248,835 5,483,344 Total business-type activities program revenues 36,131,728 40,571,295 40,262,487 51,306,890 50,609,070 44,417,792 50,923,694 61,143,958 58,056,575 63,107,440 Total primary government program revenues 50,396,336 62,144,933 56,026,537 73,493,903 157,159,977 68,333,784 72,498,419 92,107,602 87,369,963 80,854,059 Net (expense)/revenueGovernmental activities (35,477,532) (29,960,821) (39,085,958) (39,272,281) 44,377,012 (35,622,486) (38,933,610) (32,437,311) (39,934,967) (50,581,266) Business-type activities 3,598,036 6,460,665 4,309,388 11,554,066 7,876,985 (2,992,910) 2,571,734 12,705,244 5,522,798 5,577,737 Total primary government net expense (31,879,496)$ (23,500,156)$ (34,776,570)$ (27,718,215)$ 52,253,997$ (38,615,396)$ (36,361,876)$ (19,732,067)$ (34,412,169)$ (45,003,529)$ General revenues and other changes in net position Governmental activities: Taxes: Property taxes 12,598,954$ 13,464,390$ 15,186,456$ 16,164,073$ 10,804,825$ 13,362,672$ 14,766,470$ 15,204,611$ 14,970,136$ 14,490,790$ Retail sales and use tax 15,429,527 16,333,169 17,784,374 18,958,484 17,620,661 14,727,496 15,657,081 16,213,244 16,679,278 18,335,157 Interfund utility taxes 1,714,102 1,792,136 1,983,652 2,095,901 2,507,213 3,437,526 2,788,083 2,948,297 3,281,816 3,892,250 Utility taxes 5,012,010 5,349,713 5,893,041 6,073,429 8,075,355 9,071,485 8,886,964 9,049,689 8,856,498 9,156,636 Excise taxes 3,384,515 4,633,037 4,568,549 3,862,692 3,477,517 2,310,076 1,389,030 1,859,738 2,141,620 2,555,850 Other taxes 1,678,485 1,796,224 1,859,428 2,005,836 2,949,430 4,607,584 4,622,138 4,644,909 4,679,333 4,429,090 Investment earnings 708,259 1,465,102 2,454,694 2,993,174 1,589,837 570,798 379,316 224,593 178,618 121,687 Miscellaneous 192,469 564,416 69,037 (406,847) 2,751,495 67,223 214,190 775,969 547,391 (4,625,627) Transfers 627,000 194,286 (570,588) (371,660) 427,740 170,605 1,463,444 (483,107) (513,428) (218,230) Total governmental activities 41,345,321 45,592,473 49,228,643 51,375,082 50,204,073 48,325,465 50,166,715 50,437,943 50,821,262 48,137,603 Business-type activities: Investment earnings 421,803 895,870 1,574,444 2,098,417 1,242,363 312,618 158,211 101,694 82,903 68,400 Miscellaneous 1,287,528 2,124,658 1,602,274 427,522 330,472 3,669,878 1,588,068 2,584,004 1,781,676 763,717 Transfers (627,000) (194,286) 570,588 371,660 (427,740) (170,605) (1,463,444) 483,107 513,428 218,230 Total business-type activities:1,082,331 2,826,242 3,747,306 2,897,599 1,145,095 3,811,891 282,835 3,168,805 2,378,007 1,050,347 Total primary government 42,427,652$ 48,418,715$ 52,975,949$ 54,272,681$ 51,349,168$ 52,137,356$ 50,449,550$ 53,606,748$ 53,199,269$ 49,187,950$ Change in net position Before Change in Accounting Principle Governmental activities 5,867,789 15,631,652 10,142,685 12,102,801 94,581,085 12,702,979 11,233,105 18,000,632 10,886,295 (2,443,663) Business-type activities 4,680,367 9,286,907 8,056,694 14,451,665 9,022,080 818,981 2,854,569 15,874,049 7,900,805 6,628,084 Total primary government 10,548,156$ 24,918,559$ 18,199,379$ 26,554,466$ 103,603,165$ 13,521,960$ 14,087,674$ 33,874,681$ 18,787,100$ 4,184,421$ Change in Accounting Principle Governmental activities - - - - - - - - - (222,743) Business-type activities - - - - - - - - - (156,715) Total primary government -$ -$ -$ -$ -$ -$ -$ -$ -$ (379,458)$ Change in net position After Change in Accounting Principle Governmental activities 5,867,789 15,631,652 10,142,685 12,102,801 94,581,085 12,702,979 11,233,105 18,000,632 10,886,295 (2,666,406) Business-type activities 4,680,367 9,286,907 8,056,694 14,451,665 9,022,080 818,981 2,854,569 15,874,049 7,900,805 6,471,369 Total primary government 10,548,156$ 24,918,559$ 18,199,379$ 26,554,466$ 103,603,165$ 13,521,960$ 14,087,674$ 33,874,681$ 18,787,100$ 3,804,963$ Source: City of Auburn, Finance Department City of Auburn, WashingtonSCHEDULE 2CHANGES IN NET POSITIONLast Ten Fiscal Years (Accrual Basis of Accounting) City of Auburn: 2013 CAFR Statistical Section 152 2004 2005 2006 2007 2008 2009 2010 2011 (1)2012 2013 General Fund Unreserved 20,702,250$ 15,938,825$ 14,448,328$ 14,462,720$ 13,071,091$ 13,237,851$ 15,382,354$ -$ -$ -$ Nonspendable - 370,400 127 Assigned 7,082,130 5,935,567 5,892,611 Unassigned 14,193,365 17,395,933 17,751,778 Total General Fund 20,702,250 15,938,825 14,448,328 14,462,720 13,071,091 13,237,851 15,382,354 21,275,495 23,701,900 23,644,516 All other governmental funds Reserved 1,270,769 1,375,591 1,376,798 1,501,033 1,507,565 1,538,038 1,592,378 Unreserved, Reported In: Special Revenue Funds 10,612,069 8,967,039 10,738,431 13,124,661 14,463,370 15,184,058 15,486,918 Capital Projects Funds 13,852,020 13,111,273 14,727,423 9,873,331 12,990,032 10,422,360 12,589,604 Permanent Funds 222,020 232,832 188,524 170,983 144,396 153,503 132,717 Total Unreserved 24,686,109 22,311,144 25,654,378 23,168,975 27,597,798 25,759,921 28,209,239 Nonspendable 1,453,540 1,475,580 1,536,316 Restricted 12,781,743 11,688,536 13,483,593 Committed 3,134,449 3,258,257 3,242,662 Assigned 3,120,372 2,388,684 4,976,833 Total All Other Governmental Funds 25,956,878$ 23,686,735$ 27,031,176$ 24,670,008$ 29,105,363$ 27,297,959$ 29,801,617$ 20,490,104$ 18,811,057$ 23,239,404$ (1)GASB Statement No. 54 was implemented in FY 2011. See Note 1E of the Notes to the Basic Financial Statements. Source: City of Auburn, Finance Department City of Auburn, Washington SCHEDULE 3FUND BALANCES, GOVERNMENT FUNDS Last Ten Fiscal Years (Modified Accrual Basis of Accounting) City of Auburn: 2013 CAFR Statistical Section 153 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Revenues Taxes 38,258,799$ 41,467,853$ 44,867,161$ 46,721,651$ 43,781,530$ 42,514,006$ 43,069,695$ 44,812,975$ 46,003,582$ 48,545,041$ Licenses and permits 2,248,576 2,227,963 1,683,320 1,606,950 1,110,722 1,326,875 1,311,916 1,769,516 2,344,643 3,041,948 Intergovernmental 4,697,501 6,826,222 6,831,240 5,766,484 8,369,888 9,616,067 9,656,529 16,174,149 20,045,299 11,854,984 Charges for services 3,393,178 3,939,610 3,659,773 5,017,224 3,784,544 3,473,199 3,073,168 2,938,815 4,006,762 3,891,776 Fines and forfeits 845,721 777,241 1,054,201 2,155,120 2,059,771 1,911,034 2,472,411 1,940,326 1,592,957 1,441,603 Special assessments 127,976 153,627 75,574 52,291 57,402 107,597 43,502 32,972 39,115 40,772 Investment earnings 336,442 1,175,258 1,477,368 2,456,291 1,363,375 484,696 386,890 237,056 200,826 144,151 Miscellaneous 2,452,468 1,247,252 1,865,079 877,473 1,296,349 1,142,428 3,023,589 2,322,580 871,191 621,673 Total revenues 52,360,661 57,815,026 61,513,716 64,653,484 61,823,581 60,575,902 63,037,699 70,228,389 75,104,375 69,581,948 Expenditures General government 5,472,630 5,308,663 6,062,037 6,834,084 7,719,205 7,864,410 7,770,957 8,310,037 8,761,452 7,300,667 Public safety 25,870,873 27,169,657 29,148,278 33,568,753 26,023,912 25,762,116 24,597,986 27,399,406 24,039,435 27,146,590 Transportation 5,152,344 10,337,587 9,403,147 7,385,929 8,910,967 9,850,579 10,054,434 16,059,156 20,766,134 15,119,530 Physical environment 2,304,248 2,191,796 2,435,201 3,352,466 3,490,636 3,192,089 2,480,641 2,290,328 2,526,526 2,855,908 Economic environment 2,796,902 1,877,675 1,928,978 2,142,282 2,530,827 3,028,684 2,597,849 3,138,590 2,876,558 2,692,389 Health and human services 597,423 602,726 763,156 416,456 776,224 527,029 568,911 616,717 616,583 631,997 Culture and recreation 4,806,217 4,815,643 5,016,554 6,571,275 6,296,743 6,622,546 6,663,881 6,918,623 7,228,345 7,925,325 Capital outlay (1)12,100,966 507,484 3,822,895 7,346,316 4,778,334 30,338,508 8,486,382 8,597,944 4,007,018 2,746,599 Debt service: Principal 1,018,355 10,582,246 420,631 435,093 456,655 479,661 26,683,671 1,208,512 1,219,137 2,238,181 Interest / other 248,005 315,960 247,551 203,266 264,997 296,241 1,775,746 1,761,334 2,245,858 2,709,768 Total expenditures 60,367,963 63,709,437 59,248,428 68,255,920 61,248,500 87,961,863 91,680,457 76,300,647 74,287,046 71,366,954 Excess of revenues over (under) expenditures (8,007,302) (5,894,411) 2,265,288 (3,602,436) 575,081 (27,385,961) (28,642,758) (6,072,258) 817,329 (1,785,006) Other financing sources (uses) Transfers in 3,946,424 9,753,294 8,873,200 6,103,144 7,386,082 6,994,306 9,442,727 7,410,926 6,643,116 4,776,100 Transfers out (3,319,424) (11,703,804) (9,554,816) (5,542,988) (7,993,842) (6,997,801) (7,745,568) (6,242,333) (7,005,097) (4,450,925) Capital leases 10,350,000 - - 695,504 17,728 24,549,186 - - - - Insurance recoveries - - - - - 114,607 200,642 154,200 291,210 192,898 Issuance of debt - - 142,313 - 360,000 957,278 31,172,273 - - 3,044,491 Issuance of refunding bond - - - - - - 2,150,000 - - - Debt Premium - - - - - - 305,844 - - - Payment to escrow agent - refunded bond - - - - - - (2,235,000) - - - Sales of capital assets 119,053 811,353 127,959 - 2,698,677 127,741 - 1,331,092 800 2,593,405 Total other financing sources (uses)11,096,053 (1,139,157) (411,344) 1,255,660 2,468,645 25,745,317 33,290,918 2,653,885 (69,971) 6,155,969 Net change in fund balances 3,088,751$ (7,033,568)$ 1,853,944$ (2,346,776)$ 3,043,726$ (1,640,644)$ 4,648,159$ (3,418,373)$ 747,358$ 4,370,963$ Debt service as a percentage of noncapital 2.37%19.81%1.39%1.12%1.42%1.54%37.50%5.44%6.64%8.71% expenditures (1)Capital outlay reported in governmental funds for 2013 are $2,746,599 plus $11,809,628 which is reported for each functional activity with the other funds results in total capital outlay of $14,556,227 as reported on the Reconciliation of the Statement of Renevues, Expenditures, and Changes in Fund Balances of Government Funds to the Statement of Activities. Source: City of Auburn, Finance Department City of Auburn, Washington SCHEDULE 4 CHANGES IN FUND BALANCES, GOVERNMENT FUNDS Last Ten Fiscal Years (Modified Accrual Basisi of Accouting) City of Auburn: 2013 CAFR Statistical Section 154 Fiscal Sales Interfund Year Property & Use Utility Utility Excise Other Total 2004 12,680,361 15,429,527 1,714,102 5,012,010 3,384,515 38,284 38,258,799 2005 13,319,740 16,333,169 1,792,136 5,349,713 4,633,037 40,058 41,467,853 2006 14,582,829 17,784,374 1,983,652 5,893,041 4,568,549 54,716 44,867,161 2007 15,666,016 18,958,484 2,095,901 6,073,429 3,862,692 65,129 46,721,651 2008 12,040,124 17,620,661 2,507,213 8,075,355 3,477,517 60,660 43,781,530 2009 12,914,943 14,727,496 3,437,526 9,071,485 2,310,076 52,480 42,514,006 2010 14,283,303 15,657,081 2,788,083 8,886,964 1,389,030 65,234 43,069,695 2011 14,683,329 16,213,244 2,948,297 9,049,689 1,859,738 58,678 44,812,975 2012 14,987,636 16,679,278 3,281,816 8,856,498 2,141,620 56,734 46,003,582 2013 14,535,673 18,335,157 3,892,250 9,156,636 2,555,850 69,475 48,545,041 Change 2004-2013 14.6%18.8%127.1%82.7%-24.5%81.5%26.9% Source: City of Auburn, Finance Department TAX REVENUES BY SOURCE, GOVERNMENT FUNDS Last Ten Fiscal Years SCHEDULE 5 City of Auburn, Washington $0 $10,000 $20,000 $30,000 $40,000 $50,000 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Th o u s a n d s Figure 5: Tax Revenues by Source 2004-2013 Excise & other Utility Interfund utility Sales & use Property City of Auburn: 2013 CAFR Statistical Section 155 State Total Total Fiscal Property Personal Land and Assessed Direct Year and Other Property Building Value Rate 2004 137,611 704,061 3,834,629 4,676,301 2.88 2005 116,895 623,298 4,359,276 5,099,469 2.87 2006 101,419 607,875 5,055,734 5,765,028 2.73 2007 107,302 635,352 5,783,641 6,526,295 1.48 2008 112,101 640,004 5,804,585 6,556,690 1.49 2009 121,918 764,857 7,837,089 8,723,864 (*)1.49 2010 114,661 715,534 6,935,683 7,765,878 1.82 2011 126,415 726,944 6,711,148 7,564,507 1.93 2012 124,204 709,024 6,392,321 7,225,550 2.08 2013 124,230 745,891 6,098,598 6,968,719 2.10 Source: King County Dept of Assessments & Pierce County Assessor-Treasurer (*) In 2009, Total Assessed Value increased significantly due to annexations of Lea Hill and West Hill areas (Amounts Expressed in Thousands) City of Auburn, Washington SCHEDULE 6 ASSESSED VALUE BY TYPE Last Ten Fiscal Years $0 $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 $8,000,000 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Figure 6: Assessed Value by Type 2004 -2013 State property Personal property Land and building City of Auburn: 2013 CAFR Statistical Section 156 Page 1 of 2 Item 2004 2005 2006 2007 Assessed and estimated actual values (1) Estimated and actual value (in thousands)4,676,301$ 5,099,469$ 5,765,028$ 6,526,295$ Assessed value (in thousands)4,676,301 5,099,469 5,765,028 6,526,295 Ratio of assessed to actual 100%100%100%100% Property tax rates (1) Direct regular and special General fund 2.87319$ 2.86520$ 2.73076$ 1.48385$ Debt service funds - - - - Subtotal 2.87319 2.86520 2.73076 1.48385 Overlapping regular and special (1) Auburn School District 5.34914$ 5.37195$ 4.94903$ 4.40970$ King County 1.43146 1.38229 1.28956 1.20770 State of Washington 2.75678 2.68951 2.32535 2.13233 Port of Seattle 0.25402 0.25321 0.23158 0.22359 Emergency Medical Services 0.23717 0.23182 0.20621 0.30000 Hospital District 0.09200 0.09039 0.55652 0.50854 King County Library District 0.53653 0.53255 0.50027 0.45336 Valley Regional Fire Authority - - - 1.00000 King County Flood Zone - - - 0.10000 King County Ferry District - - - 0.05500 Subtotal 10.65710 10.55172 10.05852 10.39022 Total direct and overlapping 13.53029$ 13.41692$ 12.78928$ 11.87407$ Sources: (1) King County and Pierce County Deparments of Assessments; real and personal property has been assessed at 100% of the estimated actual value. (2) The 2008 decrease in property tax levy to $1.48 is due to the incorporation of the Valley Regional Fire Authority effective 1/1/2007. The VRFA will assess its own property tax levy in 2008, partially offsetting what was previously levied by the City. SCHEDULE 7 PROPERTY TAX DATA Last Ten Fiscal Years City of Auburn, Washington $1.00 $1.50 $2.00 $2.50 $3.00 2004 2005 2006 2007 2008 (2)2009 2010 2011 2012 2013 Pe r $ 1 , 0 0 0 o f A s s e s s e d V a l u a t i o n Figure 7a: Ten Years City Property Tax Rates 2004 -2013 City of Auburn: 2013 CAFR Statistical Section 157 Page 2 of 2 2008 (2)2009 2010 2011 2012 2013 6,556,690$ 8,723,864$ 7,765,878$ 7,564,507$ 7,225,550$ 6,968,719$ 6,556,690 8,723,864 7,765,878 7,564,507 7,225,550 6,968,719 100%100%100%100%100%100% 1.48385$ 1.48678$ 1.82336$ 1.93458$ 2.07527$ 2.10000$ - - - - - - 1.48385 1.48678 1.82336 1.93458 2.07527 2.10000 4.40970$ 4.37709$ 5.09382$ 5.99562$ 6.14004$ 6.62190$ 1.20770 1.09772 1.28499 1.33816 1.41588 1.54051 2.13233 1.96268 2.22253 2.27990 2.42266 2.56720 0.22359 0.19700 0.21597 0.22366 0.22982 0.23324 0.30000 0.27404 0.30000 0.30000 0.30000 0.30000 0.50854 0.47141 0.53290 0.55753 0.50000 0.50000 0.45336 0.41736 0.48526 0.56621 0.56992 0.56743 1.00000 1.10995 1.17910 1.17977 1.18925 1.20479 0.10000 0.91230 0.10514 0.10976 0.11616 0.13210 0.05500 0.05018 0.00348 0.00360 0.00372 0.00378 10.39022 10.86973 11.42319 12.55421 12.88745 13.67095 11.87407$ 12.35651$ 13.24655$ 14.48879$ 14.96272$ 15.77095$ $0.00 $2.00 $4.00 $6.00 $8.00 $10.00 $12.00 $14.00 2004 2005 2006 2007 2008 (2)2009 2010 2011 2012 2013 Do l l a r s (R a t e P e r T h o u s a n d ) Figure 7b: Property Tax Rates Last Ten Fiscal Years Hospital District King County Ferry District King County Flood Zone Valley Regional Fire Authority King County Library District Emergency Medical Services Port of Seattle State of Washington King County Auburn School District City of Auburn: 2013 CAFR Statistical Section 158 Total Tax Collections Fiscal Levy for in Subsequent Current Year Year Fiscal Year Amount % of Levy Years Amount % of Levy Levy Balance King County: 2004 12,210,218$ 12,031,253$ 98.5%178,596$ 12,209,848$ 100.0%369$ 2005 12,635,747 12,393,241 98.1%243,409 12,636,650 100.0%(903) 2006 13,401,036 13,164,248 98.2%234,308 13,398,556 100.0%2,480 2007 13,856,697 13,605,301 98.2%237,145 13,842,446 99.9%14,251 2008 9,551,629 9,406,398 98.5%142,369 9,548,767 100.0%2,862 2009 11,667,794 11,390,684 97.6%272,254 11,662,938 100.0%4,856 2010 12,717,164 12,459,564 98.0%244,637 12,704,201 99.9%12,963 2011 13,076,853 12,846,996 98.2%184,096 13,031,092 99.7%45,761 2012 13,399,095 13,167,731 98.3%151,118 13,318,849 99.4%80,246 2013 12,904,335 12,673,712 98.2%- 12,673,712 98.2%230,623 393,509$ Pierce County: 2004 579,828$ 566,356$ 97.7%13,472$ 579,828$ 100.0%-$ 2005 783,135 769,223 98.2%13,911 783,134 100.0%0 2006 1,242,038 1,220,642 98.3%21,376 1,242,018 100.0%20 2007 1,851,622 1,816,706 98.1%34,876 1,851,582 100.0%40 2008 1,226,764 1,177,665 96.0%49,073 1,226,738 100.0%26 2009 1,264,380 1,223,668 96.8%40,688 1,264,356 100.0%25 2010 1,489,793 1,451,377 97.4%37,912 1,489,289 100.0%504 2011 1,425,431 1,401,537 98.3%22,119 1,423,656 99.9%1,774 2012 1,496,130 1,478,223 98.8%13,454 1,491,677 99.7%4,453 2013 1,484,660 1,471,129 99.1%- 1,471,129 99.1%13,531 20,373$ Total current levy balance 413,882$ Source: King County Finance and Business Operations Division Pierce County Budget and Finance Department Fiscal Year of the Levy Total Collections to Date City of Auburn, Washington SCHEDULE 8 PROPERTY TAX LEVIES AND COLLECTIONS Last Ten Fiscal Years Collected Within the 95.0% 95.5% 96.0% 96.5% 97.0% 97.5% 98.0% 98.5% 99.0% 99.5% 100.0% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 FIGURE 8: TEN YEARS COLLECTION OF LEVIED PROPERTY TAXES Last Ten Fiscal Years Collection percentage within the fiscal year of the levy Total collection percentage City of Auburn: 2013 CAFR Statistical Section 159 Percentage Percentage of Total City of Total City Assessed Taxable Assessed Taxable Taxpayer Value Rank Assessed Value Value Rank Assessed Value Boeing Company 470,247,997$ 1 6.75%550,146,955$ 1 11.76% Glimcher Supermall Venture 87,826,065 2 1.26%91,364,868 2 1.95% Safeway 75,920,115 3 1.09%- EPropertyTax Inc.72,076,400 4 1.03%- Puget Sound Energy 63,758,052 5 0.91%53,200,729 3 1.14% Muckleshoot Indian Tribe 56,321,200 6 0.81%49,417,600 5 1.06% Belara Communities LLC 48,145,500 7 0.69%- PPF Industrial (formerly UPS Supply Chain Solutions)43,600,200 8 0.63%40,426,159 7 0.86% Four Lakes Apartments LLC 27,466,500 9 0.39%- Wal-Mart Property 26,724,119 10 0.38%- McElroy George & Assoc. Inc.52,125,100 4 1.11% Complex Property Advisors Corporation - 43,431,167 6 0.93% US West Communications - 34,187,146 8 0.73% Roundup Co. (Fred Meyer)- 17,646,167 9 0.38% La Pianta LLC - 13,973,600 10 0.30% TOTALS 972,086,148$ 13.95%945,919,491$ 20.23% Source: King County and Pierce County Departments of Assessments Total assessed value for 2013:6,968,719,333$ Total assessed value for 2004:4,676,301,000$ 2013 2004 City of Auburn, Washington SCHEDULE 9a PRINCIPAL TAXPAYERS-PROPERTY TAXES Current Year and Nine Years Ago 0% 5% 10% 15% 20% 25% 2004 2013 FIGURE 9a-1: TOP TAXPAYER ASSESSED VALUE AS A PERCENTAGE OF TOTAL ASSESSED VALUE Current Year and Nine Years Ago 0% 5% 10% 15% 20% 25% 2004 2013 FIGURE 9a-2: TOP 10 TAXPAYERS ASSESSED VALUE AS A PERCENTAGE OF TOTAL ASSESSED VALUE Current Year and Nine Years Ago Percentage Percentage Sales of Total City Sales of Total City Tax Sales Taxes Tax Sales Taxes Received Sector (1)Rank Received Received Sector (1)Rank Received 449,062$ General Retail 1 3.1% 362,413 Automotive 2 2.5% 359,830 Automotive 3 2.5% 324,812 Transportation Manufacturing 4 2.3% 286,488 Automotive 5 2.0% 269,068 Automotive 6 1.9% 230,690 Bldg. Material & Garden 7 1.6% 228,864 General Retail 8 1.6% 219,474 Automotive 9 1.5% 206,562 Automotive 10 1.4% 2,937,263$ 20.4% Source: Washington State Department of Revenue (1) It is illegal to disclose specific taxpayer sales tax information, so the above information is being provided without identification 2013 2004 NOT AVAILABLE City of Auburn, WashingtonSCHEDULE 9b PRINCIPAL TAXPAYERS-SALES TAXES Current Year and Ten Years Ago City of Auburn: 2013 CAFR Statistical Section 160 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 RETAIL TRADE SECTOR Automotive/gas 2,893$ 3,326$ 3,428$ 3,643$ 3,255$ 2,559$ 2,553$ 2,785$ 3,019$ 3,136$ Furniture 438 218 263 268 241 220 194 218 226 235 Electronics & appliances - 451 288 262 242 132 121 127 145 174 Building materials 479 488 594 615 521 358 389 383 425 447 Food stores 395 358 346 378 360 352 354 331 341 335 Health & personal care - 120 130 143 152 150 144 148 149 174 Apparel 765 836 874 899 873 781 752 754 772 889 General merchandise 990 970 941 974 872 833 801 968 967 974 Food/Drink 651 - - - - - - - - - Misc retail trade 905 724 939 1,334 1,234 755 834 851 897 990 7,515 7,491 7,803 8,516 7,750 6,140 6,142 6,566 6,943 7,354 SERVICE SECTOR Information - 506 507 531 489 457 979 481 396 446 Finance & insurance - 86 84 85 85 83 68 66 53 91 Real estate, rental, leasaing - 294 311 330 394 304 288 304 326 279 Professional, scientific, technical - 119 116 162 146 200 191 175 173 184 Administrative, supply & remediation services - 197 195 301 261 261 239 295 334 336 Educational - 81 81 87 91 42 56 53 54 50 Healthcare & social serivces - 45 33 88 98 61 37 41 115 33 Arts & entertainment - 104 126 172 171 147 154 149 153 149 Accomodation & food service - 764 833 870 915 827 806 839 921 979 Other services - 477 492 502 457 485 493 482 530 507 - 2,673 2,779 3,128 3,107 2,867 3,310 2,882 3,056 3,054 OTHER SECTORS Services (1)1,152 - - - - - - - - - Construction 2,402 2,008 2,453 2,240 1,647 1,368 1,322 1,296 1,221 1,943 Manufacturing 793 414 486 625 643 383 411 583 405 624 Transportation 401 31 26 22 76 31 29 77 55 46 Wholesaling 1,795 2,313 2,571 2,943 2,306 1,073 1,180 1,260 1,297 1,279 Banking 127 - - - - - - - - - Other business 108 73 72 143 72 47 128 224 61 64 Subtotal - other sectors 6,779 4,839 5,607 5,973 4,744 2,902 3,071 3,439 3,038 3,956 GRAND TOTAL 14,294$ 15,003$ 16,189$ 17,617$ 15,601$ 11,909$ 12,523$ 12,887$ 13,037$ 14,364$ OVERLAPPING SALES TAX RATES Basic sales tax rates City of Auburn 0.84%0.84%0.84%0.84%0.84%0.84%0.84%0.84%0.84%0.84% Washington State 6.50%6.50%6.50%6.50%6.50%6.50%6.50%6.50%6.50%6.50% King County 0.16%0.16%0.16%0.26%0.36%0.36%0.36%0.36%0.36%0.36% Regional Transit Authority 0.40%0.40%0.40%0.40%0.40%0.90%0.90%0.90%0.90%0.90% Metro 0.80%0.80%0.80%0.80%0.80%0.80%0.80%0.80%0.80%0.80% Criminal Justice 0.10%0.10%0.10%0.10%0.10%0.10%0.10%0.10%0.10%0.10% Total basic sales tax rate 8.80%8.80%8.80%8.90%9.00%9.50%9.50%9.50%9.50%9.50% Special sales tax rates Restaurants-for stadium funding (2)0.50%0.50%0.50%0.50%0.50%0.50%0.50%0.50%0.00%0.00% Motor vehicles-for multimodal transportation 0.30%0.30%0.30%0.30%0.30%0.30%0.30%0.30%0.30%0.30% (1) Starting in March of 2005, the State of Washington switched from classifiying retail sales using the Standard Industrial Classification (SIC) code to the North American Industry Classification System (NAICS). As a result, specific trend comparisons of 2005 results to prior year may not be meaningful. (2) This tax expired on October 1, 2011 Source: City of Auburn Finance department and State of Washington City of Auburn, Washington SCHEDULE 10 RETAIL TAX COLLECTIONS BY SECTOR Last Ten Fiscal Years (Amounts Expressed in Thousands) $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 $18,000 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 (T h o u s a n d s ) FIGURE 10: RETAIL TAX COLLECTIONSCity of Auburn: 2004 -2013 Other Wholesaling Manufacturing Contracting Services Other Retail Automotive City of Auburn: 2013 CAFR Statistical Section 161 General Special Public Works Total Percentage Fiscal Obligation Assessment Capital Revenue Trust Fund Primary of Personal Per Year Bonds Bonds Leases Bonds Loans Government Income (1)Capita 2004 6,754,000$ 228,354$ 10,322,787$ 8,220,000$ 7,066,042$ 32,591,183$ 4.16%706.43$ 2005 6,478,000 132,354 - 7,020,000 8,679,509 22,309,863 2.68%469.98 2006 11,210,000 36,827 - 5,905,000 9,853,410 27,005,237 3.04%551.63 2007 10,650,000 36,827 663,553 4,730,000 10,149,419 26,229,799 2.77%519.71 2008 10,053,000 36,827 646,799 3,495,000 9,730,324 23,961,950 1.82%357.61 2009 36,160,850 36,827 25,193,600 2,200,000 10,014,943 73,606,220 4.11%1,090.70 2010 64,816,850 - 604,685 23,220,000 10,296,024 98,937,559 5.35%1,449.21 2011 63,430,850 - 566,212 22,930,000 9,491,810 96,418,872 5.07%1,363.68 2012 61,900,771 - 524,498 23,057,333 8,687,599 94,170,201 5.05%1,321.87 2013 59,568,505 - 480,771 34,292,569 12,442,903 106,784,748 5.57%1,458.11 Source: City of Auburn, Finance Department (1) Personal income data provided by US Census Bureau estimate for 2013, 2012, 2011; Hebert Research for 2004, 2005 and 2010 only; other years are city estimates City of Auburn, Washington Last Ten Fiscal Years Govrnmental Activities Business-type Activities RATIOS OF OUTSTANDING DEBT BY TYPE SCHEDULE 11 $0 $300 $600 $900 $1,200 $1,500 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 FIGURE 11: PER CAPITA DEBT Last Ten Fiscal Years City of Auburn: 2013 CAFR Statistical Section 162 Parks and Utility Total Councilmanic Excess Levy Open Spaces Purpose Capacity December 31, 2013 - Total Assessed Value: 7,288,022,732$ 2.5% of Assessed Value -$ 182,200,568$ 182,200,568$ 182,200,568$ 546,601,704$ 1.5% of Assessed Value 109,320,341 (109,320,341) - - - Statutory Debt Limit 109,320,341 72,880,227 182,200,568 182,200,568 546,601,704 Debt Outstanding 64,047,284 - - - 64,047,284 Net Debt Outstanding 64,047,284 - - - 64,047,284 Remaining Debt Capacity 45,273,057$ 72,880,227$ 182,200,568$ 182,200,568$ 482,554,420$ General Capacity Special Purpose Capacity City of Auburn, Washington SCHEDULE 12 COMPUTATION OF LEGAL DEBT MARGIN As of December 31, 2013 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Debt Limit 350,782$ 350,782$ 432,377$ 489,472$ 653,979$ 577,669$ 565,822$ 539,989$ 518,188$ 546,602$ Total net debt applicable to limit 17,055 17,055 11,352 10,757 10,771 62,671 66,868 65,364 63,815 64,047 Legal debt margin 333,727$ 333,727$ 421,025$ 478,715$ 643,208$ 514,998$ 498,954$ 474,625$ 454,372$ 482,554$ Total net debt applicable to the limit as a percentage of debt limit 4.86%4.86%2.63%2.20%1.65%10.85%11.82%12.10%12.32%11.72% City of Auburn, Washington SCHEDULE 13 LEGAL DEBT MARGIN RATIOS Last Ten Fiscal Years (Expressed in Thousands) City of Auburn: 2013 CAFR Statistical Section 163 Net Debt Percent Bonded Amount Outstanding Applicable (3)Applicable Net direct debt: Net direct debt - City of Auburn (1)59,501,656$ Estimated net overlapping debt: (2) King County 812,796,000$ 1.98%16,093,361$ Port of Seattle 283,815,000 1.98%5,619,537 School District No. 210 190,158,934 2.25%4,278,576 School District No. 408 132,930,000 78.11%103,831,623 School District No. 415 182,487,330 1.97%3,595,000 Rural Library District 127,607,269 3.19%4,070,672 Valley Regional Fire Authority 16,360,000 89.69%14,673,284 Pierce County 183,068,506 0.99%1,812,378 Total estimated net overlapping debt 153,974,431 Total direct and overlapping debt 213,476,087$ Sources: (1) City of Auburn finance department; includes both bonded and non bonded debt related to government activities (2) Overlapping governments (3) King County Assessors office and Pierce County Assessors office. Calculation of overlapping debt: applicable percentage is determined by the ratio of assessed valuation of taxable property in overlapping unit to valulation of property subject to taxation in the City of Auburn. COMPUTATION OF NET DIRECT AND ESTIMATED OVERLAPPING DEBT As of December 31, 2013 City of Auburn, Washington SCHEDULE 14 City of Auburn: 2013 CAFR Statistical Section 164 Ratio of Net Debt Net Bonded Net Assessed Net Service Bonded Debt to Bonded Fiscal Value (1)Bonded Amount (3)Debt Assessed Debt per Year Population (Thousands) Debt (2)Available (Thousands)Value Capita 2004 46,135 4,676,301$ 6,754,000$ 7,248$ 6,747$ 0.14%146$ 2005 47,470 5,099,469 6,478,000 14,256 6,464 0.13%136 2006 48,955 5,765,028 11,210,000 25,372 11,185 0.19%229 2007 50,470 6,526,295 10,650,000 35,810 10,614 0.16%211 2008 67,005 6,556,690 10,053,000 41,603 10,011 0.15%150 2009 67,485 8,723,864 36,160,850 37,746 36,123 0.41%536 2010 68,270 7,765,878 64,816,850 46,058 64,771 0.83%949 2011 70,705 7,564,507 63,430,850 45,754 63,385 0.84%897 2012 71,240 7,225,550 61,900,771 46,155 61,855 0.86%869 2013 73,235 6,968,719 59,568,505 - 59,569 0.85%813 Notes: (1) From Schedule 6 (2) Amount includes both bonded and non bonded debt related to government activities (3) Fund balance from debt service fund. RATIOS OF NET GENERAL BONDED DEBT TO ASSESSED VALUE AND GROSS BONDED DEBT PER CAPITA Last Ten Fiscal Years City of Auburn, Washington SCHEDULE 15 $0 $200 $400 $600 $800 $1,000 - 0.0020 0.0040 0.0060 0.0080 0.0100 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 De b t / A s s e s s e d V a l u e Year FIGURE 15: BONDED DEBT RATIOS Last Ten Fiscal Years Debt/AV Debt/Pop City of Auburn: 2013 CAFR Statistical Section 165 Direct(2)Debt Service Requirements Gross (1)Operating Net Revenue Times Year Revenue Expense Available Principal Interest Total (3)Coverage 2004 21,958,359$ 16,834,837$ 5,123,522$ 1,633,533$ 539,754$ 2,173,287$ 2.36 2005 24,562,487 18,078,747 6,483,740 1,800,568 417,834 2,218,402 2.92 2006 27,087,351 19,615,315 7,472,036 1,718,412 333,016 2,051,428 3.64 2007 27,492,779 21,237,294 6,255,485 1,914,523 281,065 2,195,588 2.85 2008 27,665,498 23,149,802 4,515,696 1,942,938 279,765 2,222,703 2.03 2009 31,265,941 27,314,611 3,951,330 2,002,938 217,283 2,220,221 1.78 2010 33,115,398 28,749,877 4,365,520 1,056,094 150,675 1,206,769 3.62 2011 34,909,200 29,201,088 5,708,112 1,013,830 1,248,612 2,262,442 2.52 2012 38,119,472 30,974,506 7,144,966 1,028,830 1,277,285 2,306,115 3.10 2013 42,406,722 36,406,640 6,000,082 1,943,830 1,508,405 3,452,235 1.74 Source: City of Auburn, Finance Department (1) Includes water, sewer & storm drainage operating, interest and other revenues. (2) Includes water, sewer & storm drainage operating expenses less depreciation. (3) Includes both parity and non-parity debt. PLEDGED REVENUE BOND COVERAGES Last Ten Fiscal Years City of Auburn, Washington SCHEDULE 16 $0 $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 $8,000,000 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 YEAR FIGURE 16: UTILITY BOND COVERAGES Last Ten Fiscal Years Net revenue available Debt service requirements City of Auburn: 2013 CAFR Statistical Section 166 Item 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 School enrollment (1)13,838 13,760 14,367 14,559 14,716 14,589 14,482 14,363 14,596 14,661 Rate of unemployment (2)7.0%5.4%4.8%4.2%5.5%9.5%9.6%8.7%7.3%5.1% Population (3)46,135 47,470 48,955 50,470 67,005 67,485 68,270 70,705 71,240 73,235 Personal income (thousands of dollars) (4)1,161,714$ 1,247,566$ 1,342,818$ 1,444,871$ 2,024,087$ 1,989,661$ 1,848,752$ 1,901,540$ 1,871,973$ 1,917,219$ Per capita personal income (4)25,181$ 26,281$ 27,430$ 28,628$ 30,208$ 29,483$ 27,080$ 26,894$ 26,277$ 26,179$ Housing units (5) One unit 8,990 9,105 9,402 9,625 14,186 14,235 14,333 14,823 14,957 15,393 Two or more 8,078 8,655 8,943 9,623 10,375 10,391 10,426 10,592 10,631 10,841 Mobile home or special 2,421 2,346 2,407 2,382 2,761 2,782 2,794 2,635 2,618 2,630 Total housing units 19,489 20,106 20,752 21,630 27,322 27,408 27,553 28,050 28,206 28,864 Sources: (1) Auburn School District No. 408 (2) Bureau of Labor Statistics (3) WA State Office of Financial Management (4) US Census Bureau (5) Office of Financial Management City of Auburn, Washington SCHEDULE 17 POPULATION, INCOME AND HOUSING TRENDS Last Ten Fiscal Years 0 20,000 40,000 60,000 80,000 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 FIGURE 17: POPULATION AND HOUSING TRENDS Last Ten Fiscal Years Population Total housing units City of Auburn: 2013 CAFR Statistical Section 167 Percentage Percentage of Total City of Total City Employer Product/service Employees Rank Employment Employees Rank Employment The Boeing Company Aerospace 6,016 1 17.6%5,000 1 13.9% The Outlet Collection Retail 2,500 2 7.3%- Auburn School District Education 1,902 3 5.6%2,000 3 5.6% Muckleshoot Tribal Enterprises Gaming 1,632 4 4.8%2,100 2 5.8% Green River Community College Education 1,000 5 2.9%850 4 2.4% Multicare Auburn Medical Center Hospital 955 6 2.8%625 5 1.7% Emerald Downs Racetrack Horse racing 725 7 2.1%500 8/9 1.4% Zones, Inc.Technology reseller 644 8 1.9%500 8/9 1.4% Safeway Distribution Center Distribution Center 638 9 1.9%- Social Security Administration Gov't / public offices 620 10 1.8%600 6 1.7% Certainteed Corporation Construction - 575 7 1.6% Federal Aviation Administration Federal government - 450 10 1.2% TOTALS 16,632 48.6%13,200 36.6% Sources: WA Employment Security Department 2013 - City of Auburn, Economic Development 2004 - City of Auburn, 2004 CAFR 2013 2004 City of Auburn, Washington SCHEDULE 18 MAJOR EMPLOYERS Current Year and Nine Years Ago 0% 20% 40% 60% 80% 100% 2004 2013 FIGURE 18a: AUBURN EMPLOYMENT BASE PERCENTAGE OF TOP EMPLOYER COMPARED TO ALL EMPLOYERS Last Ten Fiscal Years Top employer All employers 0% 20% 40% 60% 80% 100% 2004 2013 FIGURE 18b: AUBURN EMPLOYMENT BASE PERCENTAGE OF TOP 10 EMPLOYERS COMPARED TO ALL EMPLOYERSLast Ten Fiscal Years Top 10 employers City of Auburn: 2013 CAFR Statistical Section 168 Department 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Mayor 4 8 10 11 12 12 10 10 7 7 Human Resources 7 7 15 17 18 9 7 7 8 8 Finance 28 21 23 24 25 25 21 22 22 23 Municipal Court (4)13 14 15 17 21 21 17 19 - - Legal 13 13 13 14 16 16 13 13 13 13 Planning 31 32 25 29 34 34 24 24 28 29 Police 115 117 118 121 152 152 131 118 122 125 Fire (1)81 82 82 - - - - - - - Public works 49 48 48 54 63 63 43 43 43 49 Parks, Arts, & Recreation 37 36 36 38 40 40 35 36 36 36 Street 13 11 11 15 14 14 12 19 19 19 Water 16 16 16 19 20 20 22 22 22 22 Sewer 6 8 8 11 11 11 11 12 12 12 Storm Drainage 7 9 9 12 16 17 16 10 10 10 Solid Waste 2 2 2 2 2 2 2 2 2 2 Airport 3 - - - - - - - - - Cemetery 7 6 6 7 7 7 7 7 7 5 Golf course 6 6 6 9 9 9 8 8 8 8 Facilities (2)- - - - - 10 10 10 9 9 Innovation & Technology - 10 11 15 18 18 14 14 18 18 Equipment Rental 10 10 9 9 10 11 6 6 7 8 TOTAL 448 456 463 424 488 490 408 401 392 403 Source: City of Auburn Finance Department (1) No data is presented for Fire employees for 2007 and thereafter due to incorporation of Fire department into a separate legal entity effective 1/1/07. (2) Facilities Division was previously included in the Human Resources Department prior to the creation of a new Internal Service fund in 2009. (3) Due to the economic downturn, the City froze 82.5 of the total 490 positions in 2009. (4) In 2012, the City contracted out the Municipal Court to the King County District Court - resulting in a reduction of 19 positions. City of Auburn, Washington SCHEDULE 19 STAFFING LEVELS BY DEPARTMENT Last Ten Fiscal Years - 20 40 60 80 100 120 140 160 Nu m b e r o f E m p l o y e e s FIGURE 19: STAFFING LEVELS BY TYPE OF SERVICELast Ten Fiscal Years 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 City of Auburn: 2013 CAFR Statistical Section 169 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Planning Commercial permits 217 240 248 214 95 112 18 38 24 32 Commercial construction value ($1,000's)77,121$ 71,047$ 63,658$ 63,658$ 22,887$ 58,896$ 8,386$ 10,904$ 13,219$ 28,357$ Residential permits 766 604 485 293 165 85 184 229 461 464 Residential construction value ($1,000's)155,551$ 112,125$ 61,872$ 61,872$ 27,048$ 15,739$ 36,602$ 43,574$ 98,212$ 96,248$ Police Crimes: Arson 43 33 36 30 24 19 23 29 27 14 Aggravated Assault 135 168 158 143 154 163 137 148 110 145 Burglary 861 623 686 590 630 590 725 757 983 651 DUI 240 218 158 145 194 193 192 214 171 138 Homicide 1 1 - 1 - 3 3 2 6 5 Narcotics 399 472 493 368 439 440 442 396 383 279 Rape 24 13 24 12 14 13 15 23 23 26 Robbery 91 85 122 92 102 92 79 107 110 109 Theft 2,344 2,509 2,216 1,962 2,343 2,362 2,533 2,435 2,415 2,583 Theft - motor vehicle 802 869 642 672 639 370 569 600 588 678 Traffic: Non-criminal 7,962 6,850 4,978 6,865 6,794 7,788 7,182 5,400 4,922 5,378 Parking 1,827 2,140 3,965 4,802 3,740 4,026 4,648 3,383 1,946 2,052 Fire (1) Type of response: Building 107 94 98 - - - - - - - Non-building 249 198 238 - - - - - - - Alarm systems 497 474 524 - - - - - - - Service 493 493 618 - - - - - - - Other 940 870 979 - - - - - - - First Aid 5,562 5,679 5,616 - - - - - - - Parks and Recreation Athletic teams 507 445 459 479 416 428 439 429 388 382 Recreation activities 1,896 2,086 2,069 2,719 2,056 2,335 2,281 3,462 3,833 3,568 Golf course rounds 45,336 47,501 43,454 50,500 54,993 50,572 49,950 45,484 45,704 47,480 Senior center visits 32,103 35,308 35,381 34,427 36,805 41,032 41,350 41,802 40,704 36,991 Cultural activities 56 56 58 84 84 90 101 127 146 180 Museum audience served 10,274 9,340 9,400 12,090 11,921 11,835 12,570 14,119 15,397 14,163 Cemetery burials 271 277 277 245 289 232 228 273 259 226 Sources: Various city departments (1) 2007 - Effective 1/1/2007 Valley Regional Fire Authority formed replacing the Fire Departments of Auburn, Pacific and Algona. City of Auburn, Washington SCHEDULE 20 OPERATING INDICATORS BY DEPARTMENT Last Ten Fiscal Years City of Auburn: 2013 CAFR Statistical Section 170 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 General City Total area (square miles)22.8 23.3 23.4 23.4 30.0 30.1 30.1 30.2 30.2 30.2 Public Works Miles of streets 180 180 180 186 272 276 283 285 249 245 Number of streetlights 3,355 3,410 3,575 3,602 5,074 5,392 5,523 5,581 6,101 6,110 Number of traffic signals 66 72 72 72 83 85 86 89 93 94 Utilities Number of services 12,144 12,833 12,633 12,954 13,050 13,076 13,372 13,334 13,863 14,106 Miles of water mains 254 278 279 287 283 293 297 304 314 315 Miles of sanitary sewers 177 177 177 182 205 207 213 213 219 220 Miles of storm sewers 185 190 195 197 197 204 226 247 252 263 Number of fire hydrants 2,270 2,285 2,300 2,369 2,969 2,998 3,044 3,277 3,308 3,329 Public Safety Number of fire stations (1)3 3 3 - - - - - - - Number of police stations 2 2 2 2 2 2 2 2 2 2 Parks and Recreation Total park acreage 592 596 596 596 598 602 602 602 630 635 Number of softball/baseball fields 19 19 19 19 19 18 18 18 17 17 Number of soccer/football fields 3 3 3 3 3 3 3 3 3 4 Number of playgrounds 25 29 30 30 32 33 35 35 35 36 Sources: Various city departments (1) Effective 1/1/2007 Valley Regional Fire Authority formed replacing the Fire Departments of Auburn, Pacific and Algona. City of Auburn, Washington SCHEDULE 21 CAPITAL ASSET INDICATORS BY DEPARTMENT Last Ten Fiscal Years City of Auburn: 2013 CAFR Statistical Section 171 Prepared by: Shelley Coleman Finance Director Rhonda Ewing Financial Services Manager Janice Davies Accounting Manager Brenda Goodson-Moore Utilities Customer Care Manager Teri Ashton Accountant Ronda Stella Payroll & Accounts Payable Supervisor Consuelo Rogel Financial Analyst Aimee Campbell Financial Analyst Tamara Baker Financial Analyst Evelyn McOsker Finance Secretary City of Auburn: 2013 CAFR Statistical Section 172