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CITY OF AUBURN: 2007 CAFR
MANAGEMENT'S DISCUSSION AND ANALYSIS
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 assets, the amount by which total assets exceed total liabilities,
equal $436.3 million. A total of $343.1 million, or 79% of total net assets, is invested in
capital assets, net of debt related to the capital assets, and includes assets such as utility
systems, streets, buildings, land, vehicles and equipment. An additional $2.2 million of net
assets is restricted for purposes of endowment and debt service. Of the remaining $91.0
million of net assets, the majority is legally restricted, reserved by City policy for specific
purposes, or is restricted for use by the City's utilities.
. The net increase in government-wide net assets during 2007 was $26.6 million. Of this
amount, $22.8 million was directly related to the increase in City-owned capital assets and
infrastructure.
. On a government-wide basis, government net assets increased by $12.1 million during
2007. Of this amount $11.8 million is related to the capitalization of construction projects,
and the balance of the increase is due to lower than anticipated expenditures.
. Business-type net assets increased by $14.5 million during 2007. Of this amount, $10.8
million is related to infrastructure assets donated by developers, $1.7 million is related to
utility system development charges, and the rest is related to increases in the sanitary sewer
and storm drainage funds.
. Government fund balances at year-end totaled $39.1 million. Of this amount, $37.6 million,
or 96%, is unreserved and available to fund ongoing activities. However, the majority of the
unreserved fund balance relates to special revenue funds and, as such, is legally restricted
for specific purposes. Included in unreserved fund balance is $6.0 million in the cumulative
reserve fund that is intended to provide resources in the event of significant downturns in
certain City funds or provide for capital needs as designated by the City Council.
Compared to 2006, total government fund balances decreased by $2.3 million. This
decrease is a result of planned use of fund balance in the capital projects fund.
. The general fund's unreserved fund balance of $14.4 million at year-end is relatively
unchanged from 2006. The slight increase of $14,392 for 2007 is the result of budgeted use
of accurately forecasted general fund revenue, offset by planned net transfers out of the
general fund.
. Total City debt payments during the year, net of compensated absences, was $2.3 million.
Total outstanding debt, including bonds and loans, totaled $27.8 million at December 31st.
This ending debt balance is a decrease of $2.5 million and is the result of scheduled debt
15
CITY OF AUBURN: 2007 CAFR
MANAGEMENT'S DISCUSSION AND ANALYSIS
repayment and removal of the compensated absence liability for firefighters and EMS,
partially offset by additional new Public Works Trust Fund loans. See note 11 for further
information on debt activity during the year and note 15 for information related to
incorporation of what was the City's fire department into a new regional fire protection
district.
Other City Highlights:
. The newly created, and first regional fire authority in the state, Valley Regional Fire Authority
(VRFA) began operations. This moved the City fire department to a new taxing authority
which operates similar to a fire district. The City acted as fiscal agent for 2007 for this entity.
. Adopted the Environmental Park (EP) District and associated rezone to encourage
compatible development in the proximity of the Auburn Environmental Park.
. Developed a fiber communications infrastructure plan.
. Police reduced crime through community programs educating citizens on reducing crimes.
. Citizens in two King County Planned Annexation Areas (PAA's) voted to annex into the City
effective January 1, 2008. Total population increased by approximately 15,500.
. The Save our Streets program completed over $2.2 million in local street projects.
. Worked with other regional governments on future regional water supplies, climate change,
water demand, source exchange and small systems management.
. Began discussions with King County Metro to extend sewer treatment services agreement to
2056 via a new service agreement.
. Continued support of the Regional Transportation Improvement District (RTID) package in
preparation for the fall 2007 ballot and voter approval.
. Completed construction of a new golf course club house and restaurant.
. Expanded recreation programs and completed and/or redesigned several parks.
. Expanded the use of Photosafe Red Light Photo Enforcement and Speed Enforcement
within the City to enhance the public safety of our pedestrian and vehicular traffic.
Expansion included one new intersection and two school zones.
. Worked with Valley Cities to develop regional truck route mapping and evaluation of freight
impacts on the City arterial street system.
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
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.
16
CITY OF AUBURN: 2007 CAFR
MANAGEMENT'S DISCUSSION AND ANALYSIS
Government-wide Financial Statements
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 Assets 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
and long-term obligations. Over time, increases or decreases in net assets 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, 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 operating a golf course,
airport, cemetery and commercial retail space. 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.
Government 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
presentation is used, 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
government fund statements and the government-wide financial statements. The government 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 expenditures. The information in the governmental fund statements can be used to
evaluate the City's near-term financing 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 government fund statements and the
government-wide financial statements, reconciliations are provided. The reconciliation between the
government fund Balance Sheets and the government-wide Statement of Net Assets is found on the
bottom of the government funds' Balance Sheet, while the reconciliation between the government
fund Statement of Revenues, Expenditures and Changes in Fund Balance and the government-wide
17
CITY OF AUBURN: 2007 CAFR
MANAGEMENT'S DISCUSSION AND ANALYSIS
Statement of Activities is found directly following the government funds' Statement of Revenues,
Expenses, and Changes in Fund Balance.
The City maintains nineteen 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 required supplemental
information. Other budgetary comparison schedules 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 as 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 and the City-leased retail space.
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, 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.
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
18
CITY OF AUBURN: 2007 CAFR
MANAGEMENT'S DISCUSSION AND ANALYSIS
information can be found in the tab labeled "Required Supplemental Information" and the pension
benefit required supplementary information is found in note 10.
The combining statements referred to earlier in connection with nonmajor government funds,
non major 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 assets can serve as a useful indicator of the City's financial position. The City
of Auburn's net assets (assets in excess of liabilities) at December 31, 2007 totaled $436.3 million.
Following is a condensed version of the government-wide statement of net assets with a comparison
to 2006:
City of Auburn Net Assets
Governmental Activities Business-type Activities Total
As of 12/31/07 As of 12/31/06 As of 12/31/07 As of 12/31/06 As of 12/31/07 As of 12/31/06
Current and other assets $ 58,618,809 $ 60,119,600 $ 46,338,621 $ 48,538,753 $ 104,957,430 $ 108,658,353
Capital assets, net of
accumulated depreciation 217.146.886 204.552.704 151.684.341 136.106.696 368.831.227 340.659.400
Total assets 275,765,695 264,672,304 198,022,962 184,645.449 473,788,657 449,317,753
Long-term liabilities 7.461,126 9,040.438 22.422,501 23,549,299 29,883,627 32,589,737
Other liabilities 4.400,206 3,830,304 3,202,642 3,149,996 7,602,848 6,980,300
Total liabilities 11,861,332 12,870,742 25,625,143 26,699,295 37.486.475 39,570,037
Net assets
Invested in capital assets,
net of related debt 212,611,232 200,814,063 130,515,163 125,265,152 343,126,395 326,079,215
Restricted 24,519,024 26,839,342 1,227,395 6,987,485 25,746,419 33,826,827
Unrestricted 26,774,107 24,148,157 40,655,261 25,693,517 67.429,368 49,841,674
Total net assets $ 263,904,363 $ 251,801,562 $ 172,397,819 $ 157,946,154 $ 436,302,182 $ 409,747,716
The largest component of the City's net assets, $343.1 million, or 79%, is its investment in capital
assets, less debt related to the acquisition or construction of those 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 assets, $40.7 million, represents the unrestricted net
assets 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, cemetery, and commercial retail property). 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 assets are $24.5 million and are restricted for purposes such as
capital project construction, debt service, mitigation, and endowment.
The remaining net assets of the City may be used for functions such as public safety employee
salaries and supplies, park and road maintenance, and other general government services.
19
CITY OF AUBURN: 2007 CAFR
Changes in Net Assets
MANAGEMENT'S DISCUSSION AND ANALYSIS
The change in net assets represents the increase or decrease in City net assets resulting from its
various activities.
Following is a condensed version of the City's changes in net assets. The table shows the revenues,
expenses and related changes in net assets for both governmental-type and business-type activities:
City of Auburn's Changes in Net Assets
Revenues:
Program revenues
Charges for services
Operating grants and contributions
Capital grants and contributions
General revenues
Property taxes
Sales taxes
Interfund utility taxes
Admission & utility taxes
Excise taxes
Other taxes
Investment earnings
Miscellaneous revenue
Total revenues
Expenses:
General government
Public safety
Transportation
Physical environment
Culture and recreation
Economic environment
Health and human services
Interest on long-term debt
Water
Sanitary sewer
Storm drainage
Solid waste
Golf course
Other business-type activities
Total expenses
Increase in net assets before transfers
Transfers
Change in net assets
Net assets-beginning of period
Net assets-end of period
Governmental Activities
2007 2006
$ 10,049,930 $
2,923,968
9,213,115
16,164,073
18,958,484
2,095,901
6,073,429
3,862,692
2,005,836
2,993,174
(406,847)
73,933,755
7,196,492
33,396,630
8,077,154
3,269,334
6,539,281
2,400,031
416,456
163,916
61,459,294
12,474,461
(371,660)
Business-type Activities
2007 2006
7,875,376
2.714,324
5,174,350
$ 38,784,127
43,263
12,479,500
$ 36,226,324
47,961
3,988,202
1,574,444
1,602,274
43,439,205
7,647,935
11,878,252
3,852,335
9,936,222
1,020,070
1,618,285
35,953,099
7,486,106
570,588
Total
2007 2006
$ 48,834,057
2,967,231
21,692,615
16,164,073
18,958,484
2,095,901
6,073,429
3,862,692
2,005,836
5,091,591
20,675
127,766,584
7,196,492
33,396,630
8,077,154
3,269,334
6,539,281
2,400,031
416,456
163,916
7,873,191
13,974,607
4,224,881
10,368,901
1,576,126
1.735,118
101,212,118
26,554,466
$ 44,101,700
2.762,285
9,162,552
15,186,456
17,784,374
1,983,652
5,893,041
4,568,549
1,859,428
4,029,138
1,671,311
109,002,486
6,462,578
29,804,864
7,619,268
2,418,543
5,729,431
1,848,988
763,156
203,180
7,647,935
11,878,252
3,852,335
9,936,222
1,020,070
1,618,285
90,803,107
18,199,379
12,102,801 10,142,685 14,451,665 8,056,694 26,554,466 18,199,379
15,186,456
17,784,374
1,983,652
5,893,041
4,568,549
1,859,428
2,454,694
69,037
65,563,281
2,098,417
427,522
53,832,829
251,801,562 241,658,877 157,946,154 149,889,460 409,747,716 391,548,337
6,462,578
29,804,864
7,619,268
2,418,543
5,729,431
1,848,988
763,156
203,180
54,850,008
7,873,191
13,974,607
4,224,881
10,368,901
1,576,126
1.735,118
39,752,824
$ 263,904,363 $ 251,801,562 $ 172.397,819 $ 157,946,154 $ 436,302,182 $ 409,747,716
10,713,273
14,080,005
Governmental activities contributed $12.1 million to the total increase in City net assets. 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. This amount equaled $11.4 million, which was
offset by an overall increase in the cost and variety of governmental services provided.
(570,588)
371,660
20
CITY OF AUBURN: 2007 CAFR
MANAGEMENT'S DISCUSSION AND ANALYSIS
General tax revenue rose during 2007:
. Property tax revenue rose by $977,617, or 6.4%. This increase is higher than the statutory
maximum of 1 %, and is due to the Save Our Streets levy lid lift passed by the voters in 2004,
as well as taxes collected on construction completed during 2007.
. Sales tax collections had a healthy increase of $1,174,110, or 6.6%.
. Utility and admission tax revenue rose by $180,388 or 3.1 %.
. Real Estate Excise Tax (REET) revenue decreased by $705,857, or 15.5%.
. Investment revenue rose by $538,480, or 21.9%. This was due to rising interest rates during
the first half of 2007.
Governmental activity expenses rose $6.6 million, or 12.0%. Public safety and general government
expenditures increased by $4.3 million and most other governmental program expenditures
increased from 2006.
The next chart summarizes the government activity revenue by source, while the second one 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
Other revenue
3%
Other taxes
8%
Utility & admission taxes
8%
Interfund utility taxes
3%
Cha rges for services
14%
Capital grants &
contributions
4%
Operating grants &
contributions
12%
Property taxes
22%
21
CITY OF AUBURN: 2007 CAFR
MANAGEMENT'S DISCUSSION AND ANALYSIS
Program Revenues and Expenses - Governmental Activities
$35,000,000
$5,000,000
o Program revenues
. Expenses
$30,000,000
$25,000,000
$20,000,000
$15,000,000
$10,000,000
$0
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Business-type net assets increased by $14.5 million. Key components of this increase include:
. $12.5 million of the increase relates to utility capital contributions. Of this amount, $10.8
million is related to utility infrastructure contributed to the City by developers, and $1.7 million
is related to new customer connections
. Income (loss) before capital contributions and transfers amounted to:
o Water fund:
o Sanitary sewer fund:
o Storm fund:
o Solid waste fund:
o Golf course:
o Non-major funds:
$ 724,525
605,714
388,580
254,029
(39,102)
(34.522)
$ 1,899,224
. Net transfers-in totaled $371,660.
22
CITY OF AUBURN: 2007 CAFR
MANAGEMENT'S DISCUSSION AND ANALYSIS
Below is a chart that shows the relative net asset balances for each business-type fund:
Business-type Net Assets - By Fund
Golf course
3%
Solid waste
2%
Water
32%
Commercial retail
1%
Storm drainage
22%
Sanitary sewer
35%
The majority of net assets 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
assets are not available to support the ongoing expenses of the funds. Following are two charts that
contrast the total net assets to the spendable portion of net assets for each enterprise
fund:
Comparison of Total Net Assets to Spendable Net Assets
Utility Funds
$0
Sanitary sewer
$60,000,000
$50,000,000
$40,000,000
$30,000,000
$20,000,000
$10,000,000
Water
Storm drainage
Solid waste
23
CITY OF AUBURN: 2007 CAFR
MANAGEMENT'S DISCUSSION AND ANALYSIS
Comparison of Total Net Assets to Spendable Net Assets
Other Enterprise Funds
$8,000,000
$7,000,000
$6,000,000
$5,000,000
$4,000,000
$3,000,000
$2,000,000
$1,000,000
$0
o Spendable net assets
. Total net assets
The first chart following depicts the revenues and expenses for business-type funds, while the
second shows the various sources of business-type revenue:
$15,000,000
$13,500,000
$12,000,000
$10,500,000
$9,000,000
$7,500,000
$6,000,000
$4,500,000
$3,000,000
$1,500,000
Airport
Cemetery
Golf course
Commercial retail
Business-type Activity Revenues and Expenses
Before Capital Contributions and Transfers
$0
Water
Sanitary
sewer
Storm
drainage
Solid waste Golf course Minor
business-type
activities
24
o Revenues
. Expenses
CITY OF AUBURN: 2007 CAFR
MANAGEMENT'S DISCUSSION AND ANALYSIS
Business-type Activity Revenues - By Source
Investment earnings
4%
Capital contributions
23%
Financial Analysis of Governmental Funds
Business-type
miscellaneous
income
1%
Charges for services
72%
The purpose of the City's government 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, 2007, the City's governmental funds had combined fund balances of
$39,132,728 a decrease of $2,346,776 or 5.7%. This decrease is related to:
. General fund
. Arterial street fund
. Capital improvement projects fund
. Other governmental funds
$14,392
$17,131
($3,827,447)
$1,449,148
Of the government funds' total fund balances, $37,621,570 is unreserved. Of this unreserved total,
$9,873,331 is earmarked for capital projects and $13,124,661 is in special revenue funds and is
earmarked for specific purposes. Of the $1,511,158 of fund balances that are reserved, $1,319,367
is reserved for endowment.
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 2007, the general fund had a fund balance of $14,462,720, of which substantially all is
unreserved.
Other funds that had significant fund balances include:
. $9,685,352 in the capital improvement projects fund; used for various governmental capital
asset projects.
. $5,962,968 in the cumulative reserve fund; used for revenue stabilization or capital projects.
25
CITY OF AUBURN: 2007 CAFR
MANAGEMENT'S DISCUSSION AND ANALYSIS
. $5,120,045 in the mitigation fund; used to collect fees from new development to mitigate the
cost of new roads and other infrastructure.
. $1,490,350 in the cemetery endowed care fund; used for maintenance of the cemetery.
The following chart shows the relative fund balances for governmental funds:
Governmental Funds - Fund Balances
Cemetery
endowment fund
4%
All other government
funds
4%
Mitigation fund
13%
General fund
37%
Cumulative reserve
fund
15%
Arteria I street fund
2%
Capital improvement
fund
25%
The increase in the general fund balance of $14,392 can be attributed to transferring $600,000 to the
golf course fund, $300,000 to the capital projects fund and other fund transfers, offset by the
increase in retail sales tax and other taxes and fees. General fund operating expenditures increased
by $7.3 million from 2006. The increase relates to overall salary and benefit cost increases including
a $3.0 million increase in expenditures for the police department for general salary and staffing
increases, in addition to new staffing added in anticipation of increased services levels for
annexation areas effective January 1, 2008, as described in note 18.
The general fund revenue increase of $4.3 million came from the following sources:
26
CITY OF AUBURN: 2007 CAFR
MANAGEMENT'S DISCUSSION AND ANALYSIS
General Fund Revenue Increases I (Decreases) - By Source
$1,500,000
$1,250,000
Property taxes
$1,219,693
Sales taxes
$1,174,110
$1,000,000
Fines & forfeitures
$876,188
$750,000
$500,000
$0
Miscellaneous
$274,669
$250,000
Charges for services
$42,846
($250,000)
Licenses & penn its
($76,370)
Intergovemmental
($194,398)
The increase of $17,131 in the arterial street fund is due to transfers in from the capital improvement
projects fund and mitigation fees fund, as well as increased investment income for 2007.
The decrease of $3,827,447 in the capital improvement projects fund is due to transfers out of
$2,821,296 for major capital projects primarily in the local street and arterial street funds. Capital
outlays within the capital improvement projects fund increased by $2,068,019 from prior year, which
was partially offset by transfers in of $914,800 as well as investment income of $739,227.
Other significant changes in fund balances include:
. The mitigation fund increased by $1,778,133 due to an increase in revenue from prior year
of $1 ,321 ,072 and expenditures less than what was anticipated and budgeted for.
. The local streets fund increased by $219,283 due to transfers in from the capital
improvement projects and mitigation funds, as well as lower than anticipated expenditures.
. The cumulative reserve fund increased by $320,781 due to investment income earned
during 2007.
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 biannually by adopting a budget at the end of the preceding fiscal year, and then
making adjustments as necessary via budget amendments throughout the next two years. Following
is a summary of such budget amendments:
27
CITY OF AUBURN: 2007 CAFR
MANAGEMENT'S DISCUSSION AND ANALYSIS
Budgeted general fund revenue changed for the following reasons:
Beginning Fund Balance higher than anticipated
Grants & Intergovernmental Revenue
Engineering Fees
Culture & Recreation
Traffic Photo Enforcement
Contributions
Mukleshoot Tribe Fee for Signal Poles
Operating Transfer In
$ 3,736,203
873,600
340,000
48,800
760,000
163,200
25,000
31,220
$ 5.978.023
Budgeted general fund expenditures changed for the following reasons:
Program Improvement - Council Assistant
Program Improvement - Property Manager
Program Improvement - Development Services staffing
Program Improvement - Ass!. Police Chief, patrol positions
Program Improvement - Construction Inspectors
Program Improvement - Traffic Operations Technician
Program Improvement - Small tools & equipment
Early start for annexation related salaries & benefits
Increase operating expenses for annexation positions
Decrease Public Safety (Fire/EMS) expenditures related to VRFA
Probation Assistant position reclassification
Public Defender contract
Increased Planning department professional services
Development peer review services
Police Investigations Unit promotions
Police uniforms
Police vehicles
Traffic photo enforcement costs
Grant funded operating expenditures
Additional street and traffic signal expenditures
Parks department operating expenditures
Increased cash receipting software & hardware costs
Public art map & brochure
Clean Sweep project
Utility cost increases
Street Maintenance Workers (3) & Field Supervisor
Supplies & equipment for additional Streets division staff
Increase retiree medical payments & insurance
Multiservice center & gateway projects
Mill Creek restoration project
Transfer out to Mitigation Fund
Transfer out to Fire Relief & Pension Fund
Transfer out to Information Services Fund
Transfer out to Equipment Rental Fund
Transfer out to Golf Course Fund
Transfer out to Capital Projects Fund
$ 17,900
55,500
141,300
587,000
83,600
67,900
22,000
50,400
20,500
(348,200)
1,900
60,000
398,600
125,000
19,100
52,500
209,500
180,000
80,200
177,000
244,900
32,400
15,000
35,000
185,000
68,700
15,000
329,000
159,100
20,000
53,300
5,200
27,600
800
600,000
414,800
$ 4,207,500
Reasons for the significant variances in the general fund between the final budget and actual results
include:
. Property taxes increased by $1,219,693 due to an increase in assessed values along with
voter approved additional levies for the Save-Our-Streets program.
. Fines and forfeitures increased by $876,188 from prior year due to an increase in photo
enforcement efforts at intersections and within school zones.
28
CITY OF AUBURN: 2007 CAFR
MANAGEMENT'S DISCUSSION AND ANALYSIS
. Sales tax revenue was much stronger than anticipated, resulting in a positive variance to
budget of $1 ,174,110.
. Investment income was $498,061 greater than budgeted due to the rising interest rates in
the first ha If of 2007.
. Professional services expenditures were $1,183,628 million less than budgeted.
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, 2007 totaled $368.8 million (net of accumulated depreciation), an increase of $28.2
million from 2006. 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:
. Land, building and right-of-way costs were incurred during the year, resulting in an increase
in governmental infrastructure of $2.3 million. The City also finalized during 2007 the
donation process for property valued at $2.2 million received from the federal government.
. Developer contributions resulted in an increase of $1 0.8 million in utility infrastructure assets.
. $10.0 million was spent by proprietary funds on construction projects during the year. Some
of the larger ones include:
o $1.7 million on Auburn Way South sanitary sewer project
o $0.5 million on Lea Hill sanitary sewer pump station costs
o $0.6 million on M St SE storm system improvements
o $4.5 million on golf course clubhouse and restaurant
o $0.4 million on completion of a columbarium at the cemetery
. Equipment with a net book value of $1,037,163 was transferred to the newly created Valley
Regional Fire Authority (VRFA) upon incorporation of the authority. See note 15 for more
information on the VRFA. As a separate municipal corporation of the state, the transfer was
accounted for as a disposal by the City.
A summary of the City's net assets follows:
29
CITY OF AUBURN: 2007 CAFR
MANAGEMENT'S DISCUSSION AND ANALYSIS
Summary of Capital Assets (net of depreciation)
Land
Building
Joint venture
Site improvements
Equipment
Intangibles
Infrastructure
Construction in progress
Governmental Activities
As of 12/31/07 As of 12/31/06
$ 48,969,057 $ 44,536,400
16,789,533 14,930,016
2,885,788 2,737,913
4,077,270 2,578,111
6,109,008 7,072,672
649,137
134,140,672
3,526,421
$ 217,146,886
129,431,581
3,266,011
$ 204,552,704
Business-type Activities
As of 12/31/07 As of 12/31/06
$ 14,158,803 $ 14,158,803
8,666,798 4,053,247
Total
As of 12/31/07 As of 12/31/06
$ 63,127,860 $ 58,695,203
25,456,331 18,983,263
2,885,788 2,737,913
125,914,668 114,985,149
7,151,076 8,112,917
649,137
134,140,672
9,505,695
$ 368,831,227
121,837,398 112,407,038
1,042,068 1,040,245
5,979,274 4,447,367
$ 151,684,341 $ 136,106,700
129,431,581
7,713,378
$ 340,659,404
Long-term Debt
More detailed information on capital assets is provided in note 7.
At the end of the current fiscal year, the City had total bonded debt outstanding of $15,416,827. Of
this amount, $10,650,000 is general obligation bonds, $4,730,000 is revenue bonds for the water
and storm utilities, and $36,827 is special assessment debt with government commitment. The City
currently maintains a rating of A 1 with Moody's for its general obligation debt.
The following schedule summarizes the City's bonded debt:
Summary of bonded debt
General obligation bonds
Special assessment bonds
Revenue bonds
Governmental
Activities
$ 4,230,000
36,827
$ 4,266,827
Busi ness-type
Activities
$ 6,420,000
$
Total
10,650,000
36,827
4,730,000
15,416,827
4,730,000
$ 11,150,000
$
Below is a summary of additional, non-bonded long-term debt of the City:
Other Long-term Debt
Public Works Trust Fund loans
Employee leave benefits
$ 10,149,419
1,629,872
$ 11,779,291
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. Following is a summary
of the City's legal debt limitations and capacity:
30
CITY OF AUBURN: 2007 CAFR
MANAGEMENT'S DISCUSSION AND ANALYSIS
Summary of legal debt limits and capacity
With a Vote
General
Open spaces/parks
Utilities
Totals
Legal Limitation
$ 163,157,375
163,157,375
163,157,375
$ 489,472,125
Auburn
Capacity
$ 152,436,451
163,157,375
163,157,375
$ 478,751,200
Without a Vote
General
Totals
$ 97,894,425 $ 87,173,501
$ 97,894,425 $ 87,173,501
Additional information can be found in note 11 and in the statistical section of this report.
Economic Factors
The outlook for 2008 and beyond is positive. The economy in the county and the City has been
robust. Many existing businesses are planning to expand their facilities & employ more people.
According to the Washington State Employment Security Department, the Auburn economy added
1,450 new jobs between January 2006 and January 2008. Some of the most recent and significant
projects are:
. Auburn Regional Medical Center is planning an 11 ,OOO-square foot cancer treatment center
adjacent to the hospital, along with a public/private mix 300-stall parking garage.
. A new three story building that will house a floor of City offices (City Hall Annex) will break
ground next to City Hall in 2008. The building will feature Key Bank as its anchor, along with
medical/professional offices and a restaurant..
. Downtown redevelopment is planned on several blocks (4+) near the Transit Station. A
developer has been selected and the project value is estimated to be $240 million.
. Plans are moving forward to develop a large retail/office project in the City's north end that
had been a drive-in movie complex. Up to 65 acres may be involved. Significant new retail
sales tax revenues would be generated from this project.
. A new Super Wal-Mart is about to begin its 2 year construction cycle adjacent to the Super
Mall that will also provide the City with new jobs and new tax revenues.
. The City issued 293 residential permits in 2007 for new construction, remodels, and rehabs.
In addition, 214 commercial and industrial permits were issued for new projects and
renovations.
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.
31
CITY OF AUBURN: 2007 CAFR
MANAGEMENT'S DISCUSSION AND ANALYSIS
*
*
*
*
* MORE THAN YOU IMAGINED
32
CITY OF AUBURN: 2007 CAFR
BASIC FINANCIAL STATEMENTS
GOVERNMENT-WIDE FINANCIAL STATEMENTS
The City presents two government-wide financial statements:
The Statement of Net Assets provides information all on city assets and
liabilities, with the difference between the two reported as net assets.
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.
33
CITY OF AUBURN: 2007 CAFR
BASIC FINANCIAL STATEMENTS
*
*
*
*
* MORE THAN YOU IMAGINED
34
CITY OF AUBURN: 2007 CAFR BASIC FINANCIAL STATEMENTS
CITY OF AUBURN, WASHINGTON
STATEMENT OF NET ASSETS
DECEMBER 31, 2007
PRIMARY GOVERNMENT
GOVERNMENTAL BUSINESS-TYPE
ACTIVITIES ACTIVITIES TOTAL
ASSETS:
CASH AND CASH EQUIVALENTS (Note 3) $ 41,577,938 $ 23,922,681 $ 65,500,619
INVESTMENTS (Note 3) 8,298,435 12,511,727 20,810,162
RECEIVABLES:
TAXES 1,578,248 1,578,248
CUSTOMER ACCOUNTS 210,127 4,080,825 4,290,952
OTHER RECEIVABLES 1,419,273 128,108 1,547,381
SPECIAL ASSESSMENTS 703,809 703,809
DUE FROM OTHER GOVERNMENTAL UNITS (Note 6) 3,059,817 43,263 3,103,080
INTERNAL BALANCES (67,437) 67,437
MA TERIALS AND SUPPLIES INVENTORY 135,275 243,935 379,210
LONG-TERM CONTRACTS AND NOTES 7,182 1,236,816 1,243,998
DEFERRED CHARGES 1,696,142 1,696,142
RESTRICTED ASSETS:
TEMPORARILY RESTRICTED:
CASH AND CASH EQUIVALENTS (Note 3) 4,103,829 4,103,829
DEPRECIABLE CAPITAL ASSETS (NET OF ACCUMULATED
DEPRECIA TION): (Note 7) 164,715,613 131,546,343 296,261,956
NON-DEPRECIABLE CAPITAL ASSETS 52,431,273 20,137,998 72,569,271
TOTAL ASSETS 275,765,695 198,022,962 ~ 473,788,6571
LIABILITIES:
ACCOUNTS PAYABLE 4,131,939 2,782,537 6,914,476
OTHER LIABILITIES PAYABLE 268,267 139,501 407,768
PAYABLE FROM RESTRICTED ASSETS:
ACCRUED INTEREST 280,604 280,604
UNEARNED REVENUE 1,132,203 916,385 2,048,588
BONDS AND OTHER DEBT PAYABLE:
DUE WITHIN ONE YEAR (Note 11) 1,589,305 2,451,334 4,040,639
DUE IN MORE THAN ONE YEAR (Note 11) 4,702,791 19,054,782 23,757,573
SPEC ASSESSMENT DEBT WITH GOV'T COMMITMENT (Note 11) 36,827 36,827
TOTAL LIABILITIES 11,861,332 25,625,143 37,486,4751
NET ASSETS:
INVESTED IN CAPITAL ASSETS, NET OF RELATED DEBT 212,611,232 130,515,163 343,126,395
RESTRICTED NET ASSETS:
CAPITAL PROJECTS 9,908,034 9,908,034
SPECIAL REVENUE FUND PROJECTS 13,129,957 13,129,957
DEBT SERVICE 148,938 706,976 855,914
NON EXPENDABLE PERPETUAL CARE 1,332,095 1,332,095
CONSTRUCTION 520,419 520,419
UNRESTRICTED NET ASSETS 26,774,107 40,655,261 67,429,368
TOTAL NET ASSETS $ 263,904,363 $ 172,397,819 $ 436,302,1821
The notes to the financial statements are an integral part of this statement.
35
CITY OF AUBURN: 2007 CAFR
BASIC FINANCIAL STATEMENTS
CITY OF AUBURN, WASHINGTON
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED DECEMBER 31,2007
Page 1 of 2
EXPENSES
CHARGES
FOR SERVICES
PROGRAM REVENUES
OPERATING
GRANTS AND
CONTRIBUTIONS
CAPIT AL
GRANTS AND
CONTRIBUTIONS
FUNCTIONS I PROGRAMS:
PRIMARY GOVERNMENT
GOVERNMENTAL ACTIVITIES
GENERAL GOVERNMENT
PUBLIC SAFETY
TRANSPORTATION
PHYSICAL ENVIRONMENT
CULTURE AND RECREATION
ECONOMIC ENVIRONMENT
HEALTH AND HUMAN SERVICES
INTEREST ON LONG-TERM DEBT
$
7,196,492 $ 1,126,258 $ 316,788 $ 2,241,373
33,396,630 3,100,973 1,407,219 4,727
8,077,154 1,930,504 14,153 6,711,776
3,269,334 576,539 582,631 74,076
6,539,281 1,245,122 377,876 181,163
2,400,031 2,070,534 107,504
416,456 117,797
163,916
61,459,294 10,049,930 2,923,968 9,213,1151
7,873,191 7,934,141 5,578,567
13,974,607 13,352,474 4,700,246
4,224,881 4,196,732 2,200,687
10,368,901 10,442,391 43,263
1,576,126 1,401,757
1,735,118 1,456,632
39,752,824 38,784,127 43,263 12,479,500 I
101,212,118 $ 48,834,057 $ 2,967,231 $ 21,692,6151
BUSINESS-TYPE ACTIVITIES:
WATER
SANITARY SEWER
STORM DRAINAGE
SOLID WASTE
GOLF COURSE
NON MAJOR BUSINESS-TYPE ACTIVITIES
!TOTAL PRIMARY GOVERNMENT
$
GENERAL REVENUES
TAXES
PROPERTY
RETAIL SALES AND USE
INTERFUND UTILITY
UTILITY
EXCISE
OTHER
INVESTMENT EARNINGS
MISCELLANEOUS
GAIN (LOSS) ON SALE OF CAPITAL ASSETS
CONTRIBUTIONS TO ENDOWMENT FUNDS
TRANSFERS (Note 5)
I TOTAL GENERAL REVENUES
I CHANGE IN NET ASSETS
NET ASSETS - BEGINNING
I NET ASSETS - ENDING
The notes to the financial statements are an integral part of this statement.
36
CITY OF AUBURN: 2007 CAFR
BASIC FINANCIAL STATEMENTS
Page 2 of 2
NET (EXPENSE) REVENUE AND
CHANGES IN NET ASSETS
GOVERNMENTAL
ACTIVITIES
BUSINESS-TYPE
ACTIVITY
TOTAL
$ (3,512,073) $ $ (3,512,073)
(28,883,711) (28,883,711)
579,279 579,279
(2,036,088) (2,036,088)
(4,735,120) (4,735,120)
(221,993) (221,993)
(298,659) (298,659)
(163,916) (163,916)
(39,272,281) ~ (39,272,281 )1
5,639,517 5,639,517
4,078,113 4,078,113
2,172,538 2,172,538
116,753 116,753
(174,369) (174,369)
(278,486) (278,486)
I 11,554,066 11,554,0661
1$ (39,272.281) . $ 11,554,066 $ (27,718,215)1
$ 16,164,073 $ $ 16,164,073
18,958,484 18,958,484
2,095,901 2,095,901
6,073,429 6,073,429
3,862,692 3,862,692
2,005,836 2,005,836
2,993,174 2,098,417 5,091,591
429,472 429,472
(457,499) (1,950) (459,449)
50,652 50,652
(371,660) 371,660
51 ,~,082 2,~,599 54,~~
12,102801 14,451,665 26,5544661
251,801,562 157,946,154 409,747,716
1$ 263,904,363 $ 172.397,819 $ 436,302,1821
37
CITY OF AUBURN: 2007 CAFR
BASIC FINANCIAL STATEMENTS
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
~ocal 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's one-half cent gas tax and is used for major
street construction.
Capital Improvement Projects Fund
This fund accounts for major capital acquisitions, and streets and parks
construction projects.
38
CITY OF AUBURN: 2007 CAFR BASIC FINANCIAL STATEMENTS
CITY OF AUBURN, WASHINGTON
BALANCE SHEET
GOVERNMENTAL FUNDS
DECEMBER 31, 2007
OTHER TOTAL
GENERAL ARTERIAL CAPITAL GOVERNMENTAL GOVERNMENTAL
FUND STREET IMPROVEMENT FUNDS FUNDS
ASSETS:
CASH AND CASH EQUIVALENTS $ 10,830,782 $ 759,779 $ 7,540,469 $ 12,214,976 $ 31,346,006
INVESTMENTS 2,997,813 2,013,111 2,286,261 7,297,185
RECEIVABLES
TAXES 1,578,248 1,578,248
CUSTOMER ACCOUNTS 69,144 91,182 160,326
OTHER RECEIVABLES 1,343,298 24,595 1,367,893
SPECIAL ASSESSMENTS 703,809 703,809
INTERFUND RECEIVABLE (Note 5) 229,000 134,375 363,375
LONG-TERM NOTES AND CONTRACTS 610,951 610,951
DUE FROM OTHER GOVERNMENTAL UNITS 1,857,841 760,670 441,306 3,059,817
DEFERRED CHARGES 6,868 6,868
TOTAL ASSETS $ 18,906,126 $ 1,520,449 $ 10,414,683 $ 15,653,220 $ 46,494,478 I
LIABILITIES AND FUND BALANCES:
CURRENT PAYABLES $ 2,613,365 $ 250,594 $ 93,784 $ 577,217 $ 3,534,960
CUSTOMER DEPOSITS 235,470 235,470
INTERFUND PAYABLE (note 5) 229,000 229,000
OTHER LIABILITIES PAYABLE 69 69
DEFERRED REVENUE 1,594,502 428,393 635,547 703,809 3,362,251
TOTAL LIABILITIES 4,~,406 678,987 729,331 1,~,026 7,~,ZQQJ
FUND BALANCES
RESERVED FOR
PETTY CASH 10,125 10,125
DEBT SERVICE 181,666 181,666
ENDOWMENT 1,319,367 1,319,367
UNRESERVED, REPORTED IN
GENERAL FUND 14,452,595 14,452,595
SPECIAL REVENUE FUNDS 841,462 12,283,199 13,124,661
CAPITAL PROJECT FUNDS 9,685,352 187,979 9,873,331
PERMANENT FUND 170,983 170,983
TOTALFiJ'No-BALANCES 14,462,720 841,462 9,685,352 14,143,194 39,132,728 I
TOTAL LIABILITIES AND FUND BALANCES $ 18,906,126 $ 1,520,449 $ 10,414,683 $ 15,653,220 $ 46,494,478 I
Other long-term assets are not available to pay for current-period expenditures and therefore are deferred in the funds.
Prepaid expenses
Net pension asset
Interest receivable on investments
Unearned revenue beyond the city's 30-day measurable and available period
Deferred charges for bond issue costs
$ 39,132,728
212,008,540
1,640,321
48,953
81,751
1,594,502
1,126
3,366,653
15,665,633
(4,373,561 )
(32,728)
(1,199,348)
(663,554)
(6,269,191)
$ 263,904,363 I
Total governmental fund balances as reported on this statement
Amounts reported for governmental activities in the statement of net assets are different because:
Capital assets used in governmental activities are not financial resources and therefore not reported in the funds.
Internal service funds are used by management to charge the cost of certain activities, such as insurance and fleet
maintenance, to individual funds. The assets and liabilities of these internal service funds are included in governmental
activities in the statement of net assets.
Some liabilities are not due and payable in the current period and therefore are not reported in the funds.
Bonds and loans payable
Interest payable
Compensated absences payable
Capital lease payable
INet assets of government activities as re[!Qrted on the statement of net assets
The notes to the financial statements are an integral part of this statement.
39
CITY OF AUBURN: 2007 CAFR
BASIC FINANCIAL STATEMENTS
CITY OF AUBURN, WASHINGTON
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED DECEMBER 31,2007
OTHER TOTAL
GENERAL ARTERIAL CAPITAL GOVERNMENTAL GOVERNMENTAL
FUND STREET IMPROVEMENT FUNDS FUNDS
REVENUES:
TAXES
PROPERTY $ 15,166,016 $ $ $ 500,000 $ 15,666,016
RETAIL SALES & USE 18,958,484 18,958,484
INTERFUND UTILITY 2,095,901 2,095,901
UTILITY 6,073,429 6,073,429
EXCISE 1,008,066 2,769,221 85,405 3,862,692
OTHER 65,129 65,129
LICENSES AND PERMITS 1,606,950 1,606,950
INTERGOVERNMENTAL 3,451,594 1,635,666 30,000 649,224 5,766,484
CHARGES FOR SERVICES 2,663,788 2,353,436 5,017,224
FINES AND FORFEITURES 1,930,389 224,731 2,155,120
SPECIAL ASSESSMENTS 52,291 52,291
INVESTMENT EARNINGS 848,061 63,434 739,227 805,569 2,456,291
MISCELLANEOUS 786,146 14,153 25,905 51.269 877,473
I TOTAL REVENUES 54,~,824 1,~,253 3,~,353 4,~054 64,~,;!.iliJ
EXPENDITURES:
CURRENT
GENERAL GOVERNMENT 6,834,084 6,834,084
SECURITY OF PERSONS AND PROPERTY 32,798,206 57,641 712,906 33,568,753
PHYSICAL ENVIRONMENT 3,352,466 3,352,466
TRANSPORTATION 2,096,049 3,396,595 1,893,285 7,385,929
ECONOMIC ENVIRONMENT 1,872,312 269,970 2,142,282
HEALTH AND HUMAN SERVICES 416,456 416,456
CULTURE AND RECREATION 6,541,980 29,295 6,571,275
DEBT SERVICE
PRINCIPAL 191,091 35,578 208,424 435,093
INTEREST AND OTHER COSTS 34,050 297 168,919 203,266
CAPITAL OUTLAY 5,427,063 1,919,253 7,346,316
I TOTAL EXPENDITURES 54,136,694 3,432,470 5,484,704 5,202,052 68,255,920 I
EXCESS (DEFICIENCY) OF REVENUES
rO\!ER"(ONDERtEXPENDITORES '152~130 (1~lg~2'17) (1~920~351) ('1~4'998) (3~602:-436)1
OTHER FINANCING SOURCES (USES):
PROCEEDS FROM CAPITAL LEASE 695,504 695,504
TRANSFERS IN (Note 5) 1,047,733 1,736,348 914,800 2,404,263 6,103,144
TRANSFERS OUT (Note 5) (2,180,975) (2,821,896) (540,117) (5,542,988)
TOTAL OTHER FINANCING SOURCES AND USES (ill,738) 1,736,.348 (1,907 096) 1864,146 1255,~
NET CHANGE IN FUND BALANCES 14,392 17,131 (3,827,447) 1,449,148 (2,346,776)
FUND BALANCES - BEGINNING 14,448,328 824,331 13,512,799 12,694,046 41,479,504
IFUND BALANCES - ENDING $ 14,462,720 $ 841 ,462 $ 9,685,352 $ 14,143,194 $ 39,132,7281
The notes to the financial statements are an integral part of this statement.
40
CITY OF AUBURN: 2007 CAFR
BASIC FINANCIAL STATEMENTS
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, 2007
Net change in fund balances per the Statement of Revenues, Expenditures and Changes in Fund Balance
Amount reported as change in net assets 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 ($11 ,394,900)
exceeded depreciation and amortization ($7,230,093) in the current period.
Revenues in the Statement of Activities that do not provide current financial resources
are not reported as revenues in the funds:
Deferred revenue
Donation of property
Amortization of bond premium
Investment interest receivable
507,304
2,241,373
3,138
34,666
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.
Repayment of the principal of long-term debt consumes the current financial resources of
governmental funds but has no effect on the net assets.
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.
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 debt issue costs
Amortization of prepaid expenses
Change in accrued interest payable
Change in net pension obligation
Change in compensated absences payable
(3,240)
(109,355)
2,148
65,605
1,569,046
$ (2,346,776)
4,164,807
2,786,481
5,076,110
411,669
486,306
1,524,204
$ 12,102,8011
IChange in net assets on the Statement of Activities
The notes to the financial statements are an integral part of this statement.
41
CITY OF AUBURN: 2007 CAFR
BASIC FINANCIAL STATEMENTS
*
*
*
*
* MORE THAN YOU IMAGINED
42
CITY OF AUBURN: 2007 CAFR
BASIC FINANCIAL STATEMENTS
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.
43
CITY OF AUBURN: 2007 CAFR
BASIC FINANCIAL STATEMENTS
TOTAL ASSETS
CITY OF AUBURN, WASHINGTON
STATEMENT OF NET ASSETS
PROPRIETARY FUNDS
DECEMBER 31, 2007
GOVERNMENTAL
NON-MAJOR TOTAL ACTIVITIES
SANITARY STORM SOLID GOLF PROPRIETARY PROPRIETARY INTERNAL
WATER SEWER DRAINAGE WASTE COURSE FUNDS FUNDS SERVICE FUNDS
5.860.893 9.958.790 3.534.480 1.613.651 349.176 2.605.691 23.922.681 10.231.932
4.003,125 4.000,918 3.507,344 1.000,340 12,511.727 1,001.250
1,028.885 449,902 272.207 1,750,994
43.665 18.471 77.366 139.502
502.043 989,826 504.933 216,531 2.213.333
749.529 1.620.525 489.623 1.217.238 3.910 4.080.825 49.801
33.439 29.439 45.369 19.861 128,108 1.406
43.263 43.263
223,040 4.330 7,597 8.968 243,935 135.275
12,:L4.4l6,j9.-16,622,2g9 8,539 248 3,8g~,,353_83?19,1.1-2,695,g35-15,03....,;4,368 1,1,;lJ9,66tJ
1.163.400 73.416 1,236.816
897.971 1.654.958 5.686.254 2.229.636 3.689.984 14.158.803
2.902.031 1,120,740 192,076 496.618 6.381,833 5.237.684 16,330.982 11.455,280
78.679,611 53.232,004 37.356.499 3,023,052 6,628.275 178,919.441 46,591
981.228 4,589,591 266,636 141,740 5,979,195 64,206
(30.047,965) (13.917.417) (11.645.026) (256.803) (1.761,529) (6.075.340) (63.704.080) (6.427.731)
53.412.876 46.679,876 31,856.439 239,815 9,872,992 9.622,343 151,684.341 5.138.346
53.412.876 47.843.276 31 856.439 239.815 9.872,992 9.695.759 152,921.157 5.138.3461
65.857.495 64.465,575 40.395.687 4.134.168 10,710.906 12.391,694 197,955.525 16,558,Q1Q.I
375.436 1.158.317 189.865 859.169 140.789 58.961 2.782.537 596.979
43,665 18.471 77,365 139,501
134.375 134.375
435.568 243,955 679,523
101,807 59.756 66.260 13,046 42.129 18.813 301.811 83.829
855,100 379,900 1.235.000
175.000 60.000 235,000
198.109 12.493 70.002 280,604
2,o.og,685 1.492,@2 706,Q27 872,215 492,293 2).5,139 fi,W,35:1 680,~
42.201 162.203 597.204 41.361 73.416 916.385
11,849 6.955 7,712 1.518 4.903 2.190 35,127 9.757
5.323.768 4.039,393 9.363,161
2.551.701 979,049 3,530,750
4.313.362 1.812.382 6.125,744
7,929,519 4,2il1l,551 1.583,965 1,518 4,~,~2.2-1,~988 19,971,167 9,M
9,939,20.4_5,7,01,543 2,289 992 873,733_4,851,919_2,103,127_25,759,518 690,565J
44.246.739 42.396.528 30.497.490 239.815 5,384.630 7.749.961 130.515,163 5,138.346
502,043 204,933 706,976
304,152 216,267 520.419
11.169.509 16.063.352 7.403.272 3.020.620 258.090 2.538.606 40.453.449 10.729.099
55.918.291 58.764.032 38.105.695 3.260.435 5.858.987 10.288.567 172.196.007 15.867.4451
Adjustment to reflect the consolidation
of internal service funds related to
enterprise funds 201,812
Net assets of business-type activities h 172.397.8191
ASSETS:
CURRENT ASSETS:
CASH AND CASH EOUIVALENTS
INVESTMENTS
RESTRICTED CASH:
BONDS PAYMENTS
CUSTOMER DEPOSITS
OTHER
CUSTOMER ACCOUNTS
OTHER RECEIVABLES
DUE FROM OTHER GOVERNMENTAL UNITS
INVENTORIES
L...._.1.oJ.&L.CU .1313 EtJ)~.&SS E:!;;S
NONCURRENT ASSETS:
LONG-TERM CONTRACTS AND NOTES
CAPITAL ASSETS:
LAND
BUILDINGS AND EQUIPMENT
IMPROVEMENTS OTHER THAN BUILDINGS
CONSTRUCTION IN PROGRESS
LESS: ACCUMULATED DEPRECIATION
TOTAL CAPITAL ASSETS (NET OF AID)
TOTAL NONCURRENT ASSETS
LIABILITIES:
CURRENT LIABILITIES:
CURRENT PAYABLES
CUSTOMER DEPOSITS
INTERFUND PAYABLES
LOANS PAYABLE-CURRENT
EMPLOYEE LEAVE BENEFITS-CURRENT
REVENUE BONDS PAYABLE-CURRENT
GENERAL OBLIGATION BONDS PAYABLE-CURRENT
ACCRUED INTEREST
T:QThL CURREtfl..L~B.lLillES
NONCURRENT LIABILITIES:
DEFERRED REVENUE
EMPLOYEE LEAVE BENEFITS
LOANS PAYABLE
REVENUE BONDS PA YABLE
GENERAL OBLIGATION BONDS PAYABLE
IOTAL OTHER NONCURREtfl..L~B.lLillES
L.....-TOTilL LIABILITIES
NET ASS ETS:
INVESTED IN CAPITAL ASSETS. NET OF RELATED DEBT
RESTRICTED FOR:
DEBT SERVICE
CONSTRUCTION
UNRESTRICTED
TOTAL NET ASSETS
The note5 to the financial 5tatement5 are an integral part of thi5 5tatement.
44
CITY OF AUBURN: 2007 CAFR
BASIC FINANCIAL STATEMENTS
CITY OF AUBURN, WASHINGTON
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS
PROPRIETARY FUNDS
FOR THE YEAR ENDED DECEMBER 31,2007
WATER
SANITARY
SEWER
STORM
DRAINAGE
SOLID
WASTE
GOLF
COURSE
NON MAJOR
ENTERPRISE
FUNDS
TOTAL
PROPRIETARY
FUNDS
GOVERNMENTAL I
ACTIVITI ES
INTERNAL
SERVICE FUNDS
OPERATING REVENUES:
CHARGES FOR SERVICES 7,933,931 13,352,474 4,196,564 10,442,161 1,395,839 1,400,070 38,721,039 7,091,830
INTEREST 2,471 2,471
OTHER OPERATING REVENUE 210 168 230 5,918 54,091 60,617 164,171
r--TOT AI:"OPERA TI NG""REVEN U ES 7,934,141 13,352,474 4,196,732 10,442,391 1,401,757 1,456,632 38,784,127 7,256,0011
OPERATING EXPENSES:
OPERATIONS & MAl NTENANCE 3,019,557 10,180,017 1,397,273 8,767,982 1,217,974 633,366 25,216,169 4,745,296
ADMINISTRATION 1,627,322 1,351,278 1,394,071 637,940 55,685 553,378 5,619,674 870,164
DEPR EC IA TION/AMORTIZA TION 2,008,907 986,668 951,898 38,107 142,634 444,006 4,572,220 1,097,840
OTHER OPERATING EXPENSES 844,938 1,034,275 388,563 924,872 60,806 9,875 3.263,329
TOTiiC"QPERATi'NG'EXPENSES 7.500,724 13.552.238 4,131,805 10,368,901 1,477,099 1,640,625 38.671,392 6,713,3001
OPERATING INCOME (LOSS 433,417 (199,764) 64,927 73,490 (75.342) (183,993) 112,735 542.7011
NON-OPERATING REVENUE (EXPENSE):
INTEREST REVENUE 599,673 706,993 416,141 137,276 136,167 102,167 2,098,417 536,645
OTHER NON-OPERATING REVENUES 63,902 222,135 588 43,263 142,847 472,735 7,848
GAIN (LOSS) ON SALE OF CAPITAL ASSETS (900) (1,050) (1,950) (457,499)
INTEREST EXPENSE (214,721) (20,434) (67,420) (99,027) (91.799) (493,401)
OTHER NON-OPERATING EXPENSES (157,746) (103,216) (25,656) (2,694) (289,312)
TOTAL"NON~OPERATING'RE\7ENUE'(EXPENSE)- 291,108 805,478 323.653 180,539 36,240 149,471 1,786,489 86,9941
INCOME (LOSS) BEFORE CONTRIBUTIONS & TRANSFERS 724,525 605,714 388,580 254,029 (39,102) (34,522) 1,899,224 629,6951
CAPITAL CONTRIBUTIONS 5,578,567 4,700,246 2,200,687 12,479,500 549,892
TRANSFERS IN (Note 5) 451,160 70,500 521,660 15,000
TRANSFERS OUT (Note 5) (50,000) (50,000) (50,000) (150,000) (1,007,000)
I CHANGE IN NET ASSETS 6,253,092 5,255,960 2,539,267 254,029 412,058 35,978 14,750,384 187,5871
TOTAL NET ASSETS BEGINNING OF YEAR 49.665.199 53.508.072 35.566,428 3.006,406 5,446.929 10.252.589 157,445.623 15.679.858
ITOT AL NET ASSETS END OF YEAR 55,918,291 58,764,032 38,105,695 3,260,435 5.858,987 10,288,567 172,196.007 15,867,4451
Change in net assets from this statement 14,750,384
Adjustment to reflect the consolidation of internal service fund
activities related to enterprise funds (298,719)
Change in net assets of business-type activities 1$ 14,451,6651
The notes to the financial statements are an integral part of this statement.
45
CITY OF AUBURN: 2007 CAFR BASIC FINANCIAL STATEMENTS
CITY OF AUBURN, WASHINGTON
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE FISCAL YEAR ENDED DECEMBER 31,2007
Page 1 of 2
GOVERNMENTI
NON-MAJOR ACTIVITIES
ENTERPRISE INTERNAL
FUND TOTAL SERVICE FUNDS
1.464.804 40.034,163 7.098.588
(730,643) (24.143,346) (2.665.833)
(9.875) (3.263.329) (37.804)
2.552 (62,057) (611,956)
(517.843) (6,775.506) (2,099,664)
31.191 100.000
208,995 5,821,116 1,783,331
134.375
(19.615)
67.807 518.966 15.000
(150.000) (1.007.000)
67.807 483.726 (992,0001~
640,844 649.011 38.406
(547,182) (10,292,731) (1,072,757)
(380,001 )
SANITARY STORM SOLID
WATER SEWER DRAINAGE WASTE
8.418.450 13,664.123 4.373.102 10.707,150
(2.683.859) (9.888,113) (1.202,949) (8,937,223)
(844.938) (1.034.275) (388.563) (924.872)
(62,171) (2,104) (334)
(2,187.347) (1.435.232) (1.527,544) (455,186)
22,362 8.599 230
2,640,135 1,326,761 1,262,311 390,099
(19,615)
GOLF
COURSE
CASH FLOWS FROM OPERATING ACTIVITIES:
CASH RECEIVED FROM USERS
CASH PAID TO SUPPLIERS
CASH PAID FOR TAXES
CASH PAID FOR INVENTORY
CASH PAID TO EMPLOYEES
OTHER CASH RECEIVED (PAID)
NET.CASH PROVIDED~(USED)
BY OPERATING ACTIVITIES
1,406.534
(700,559)
(60.806)
(652,354)
(7,185)
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
INTERFUND LOAN PAYABLE
OPERATING GRANT RECEIVED
TRANSFERS IN
TRANSFERS OUT
NETCASHP'RSVIOED (USED) BY NON-
CAPITAL FINANCING ACTIVITIES
134.375
451.159
(50.000)
(50.000)
(50.000)
(50.QQQ)_(~)_(~1_(J.2,~)
585 534
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES:
PROCEEDS FROM SALE OF EOUIPMENT
PURCHASE OF CAPITAL ASSETS
SALE OF FIXED ASSETS
CONTRIBUTED CAPITAL
CAPITAL GRANTS
PROCEEDS FROM OTHER GOVERNMENTS
PROCEEDS FROM INSURANCE SETTLEMENT
PREMIUM & BOND ISSUANCE COSTS
PRINCIPAL PAYMENT ON DEBT
INTEREST PAYMENT ON DEBT
DEBT PROCEEDS
OTHER CASH RECEIVED (PAID)
reJET CASH PROVIIfED(iJSEDiFORCAPITA[
UN D--3E L4JE D--5.It-J~~CII)! G.&CJ!.VJII ES
8,167
(1,283.400)
(2,781,166)
(1,091,797)
(5.145)
(4.584,041)
1,733,971
588
689.653
15.737
(759) 4.835 24.182
(330.000) (45.062) (2,093.475)
(98,387) (92.271) (551.255)
165.000 1,040,000
41.361 33.592 74.953
.
(2,J6J ,635)_(1,:U2,896)_I7.!;o,J38)_38.1.:!8_~,806,826)-1oi,0.l.1-(8..l.o9,366)_11 ,:!.!3,98ZJ.
537,135
43,263
109.255
591,339
378,237
764.395
588
15.737
14.170
(1.249.269)
(258.379)
365
(107,844)
(14.258)
875,000
5.936
(361,300)
(87.960)
CASH FLOW FROM INVESTING ACTIVITIES:
PROCEEDS FROM SALE OF INVESTMENTS 5,494.087 3.755,855 1.750,000 10.999.942 3.454,669
PURCHASE OF INVESTMENTS (4.999.400) (3.758.780) (4.249.800) (13.007.980) (1.000.000)
INTEREST RECEIVED 585.537 671.124 362.906 118.169 136.167 102.168 1.976.071 536.703
ffiET"CASHp'R"oVIDED"{OsEDjIN INVESTING ACTIVITIES 1 080,224 668,199 (2,136,894) 118,169 136,167 102,168 (31,967) 2,991,372.}
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 1,508.724 832.064 (1.694,721 ) 526,771 (4.092.310) 482.981 (2.436.491) 2.368,716
CASH AND CASH EQUIVALENTS-BEGINNING OF YEAR 5.926.762 10.135.023 6.184.036 1.086.880 4.930.224 2.200.076 30.463.001 7.863.216
(CASi1AN D.CASi1"EQU 1\1 ALENTS~EN D.O F'1EAR 7.435.486 10.967.087 4.489.315 1.613.651 837.914 2.683.057 28.026.510 10.231.932~
CASH AT END OF YEAR CONSISTS OF:
CASH AND CASH EQUIVALENTS 5.860.893 9,958.790 3.534.480 1,613.651 349.176 2.605.691 23,922,681 10,231,932
RESTRICTED CASH-BOND PA YMENTS 1,530.928 989,826 954.835 272,207 3,747.796
RESTRICTED CASH-CUSTOMER DEPOSITS 43.665 18.471 216.531 77.366 356.032
I"'""'TOTAL"CASH 7.435.486 10.967.087 4.489.315 1.613.651 837.914 2.683.057 28.026.510 10.231.932~
The notes to the financial statements are an integral part of this statement.
46
CITY OF AUBURN: 2007 CAFR BASIC FINANCIAL STATEMENTS
CITY OF AUBURN, WASHINGTON
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE FISCAL YEAR ENDED DECEMBER 31,2007
WATER
SANITARY
SEWER
STORM
DRAINAGE
SOLID
WASTE
GOLF
COURSE
NON-MAJOR
ENTERPRISE
FUND
Page 2 of 2
GOVERNMENTI
ACTIVITIES
INTERNAL
SERVICE FUNDS
TOTAL
RECONCILIATION OF NET OPERATING INCOME TO NEW CASH
PROVIDED BY OPERATING ACTIVITIES
!:QE..ERATli'J'GTNc'OME (LOSS)
ADJUSTMENTS TO RECONCILE OPERATING INCOME TO NET CASH
PROVIDED (USED) BY OPERATING ACTIVITIES:
433,417-$~7~$
64,927-~7~$-C75Y41J'$
(183,~ $
112,7re-$-542':zQl]
DEPRECIATION 2.008.907 986,668 951 .898 38,107 142.634 444.006 4.572.220 1,097.841
ASSET (INCREASES) DECREASES:
ACCOUNTS RECEIVABLE 476,104 303,640 176,370 264.989 4,777 6.734 1,232,614 (24,561)
INVENTORY (62,171) (2,104) (334) 2.552 (62.057) (34,619)
LIABILITY (INCREASES) DECREASES:
ACCOUNTS & VOUCHERS PAYABLE (126.680) 221,570 75,794 13,139 (101.185) (80,720) 1.918 214.249
DEPOSITS PAYABLE 8.205 30,372 8,172 46.749
WAGES & BENEFITS PAYABLE 26,363 19,411 10.918 (1,789) 9.988 4.634 69.525 21,491
COMPENSATED ABSENCES PAYABLE (124.010) (33.032) (17.262) 2.163 11.942 7.610 (152.589) (33.771 )
r-TbTAL-ADJUST!:1ENTS- -- 2,206,718 1,526,525 1,197,384 316,609 68,156 392,988 5,708,380 1,240,62Q.}
[Bp"cA'sii"PRbli ID EDlIT SEDTB'fOPE RA TI~G-ACTI\iITI ES 2.640.135 1.326,761 1.262.311 390.099 (7.185) 208.995 5.821.116 1.783.331 ~
SCHEDULE OF NONCASH INVESTING. CAPITAL AND
FINANCING ACTIVITIES
CAPITAL ASSETS ACQUIRED BY CONTRIBUTED CAPITAL 5,027.226 4,322,009 1,436.292 10,785.527 549,892
INCREASE (DECREASE) IN FAIR VALUE OF INVESTMENT 20.625 41.875 10.981 2,440 75.921 1.250
TOTAL NON CASH INVESTING, CAPITAL AND 551.1421
FINANCING ACTIVITIES 5.047.851 4.363.884 1,447.273 2,440 10.861,448
The notes to the financial statements are an integral part of this statement.
47
CITY OF AUBURN: 2007 CAFR
BASIC FINANCIAL STATEMENTS
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 custo-
dian.
48
CITY OF AUBURN: 2007 CAFR
BASIC FINANCIAL STATEMENTS
CITY OF AUBURN, WASHINGTON
STATEMENT OF FIDUCIARY NET ASSETS
FIDUCIARY FUNDS
DECEMBER 31, 2007
LIABILITIES:
CURRENT PAYABLES
TOTAL LIABILITIES
FIRE
RELIEF
PENSION AGENCY
TRUST FUND FUND
$ 2,818,630 $ 2,203,513
86,078
3,984
655
394,508
$ 2,905,363 : $ 2,602,005 I
$ 6,395 $ 2,602,005
6,395 2,602,005 I
ASSETS:
CASH AND CASH EQUIVALENTS
INVESTMENTS
RECEIVABLES:
CUSTOMER ACCOUNTS
INTEREST
DUE FROM OTHER GOVERNMENTAL UNITS
~TOTAC"A'SSETS
NET ASSETS:
HELD IN TRUST FOR PENSION BENEFITS
AND OTHER PURPOSES
$
2,898,968 $
- I
The notes to the financial statements are an integral part of this statement.
49
CITY OF AUBURN: 2007 CAFR
BASIC FINANCIAL STATEMENTS
CITY OF AUBURN, WASHINGTON
STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS
FIDUCIARY FUNDS
FOR THE YEAR ENDED DECEMBER 31,2007
FIRE
RELIEF
PENSION
TRUST FUND
$ 60,185
161,705
221,890 I
107,364
308
41,957
149,6281
72,2611
2,826,706
$ 2,898,9681
ADDITIONS:
FIRE INSURANCE PREMIUMS-TRANSFERRED FROM GENERAL FUND
INVESTMENT EARNINGS
I TOTAL ADDITIONS
DEDUCTIONS:
BENEFIT PAYMENTS
PROFESSIONAL SERVICES
ADMINISTRATIVE EXPENSES
I TOTAL DEDUCTIONS
r-CRANGE~ETASSETS
NET ASSETS - BEGINNING
INET ASSETS - ENDING
The notes to the financial statements are an integral part of this statement.
50
CITY OF AUBURN: 2007 CAFR
NOTES TO THE FINANCIAL STATEMENTS
City of Auburn
NOTES TO THE FINANCIAL STATEMENTS
December 31,2007
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICiES............................................... .52
A. REPORTING ENTITY ......................................................................................................... 52
B. BASIC FINANCIAL STATEMENTS ...................................................................................52
C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING, AND
BASIS OF PRESENTATION .............................................................................................. 53
D. BUDGET AND BUDGETARY ACCOUNTING.................................................................... 56
E. ASSETS, LIABILITIES, AND FUND EQUiTy..................................................................... 57
1. DEPOSITS AND INVESTMENTS ............................................................................... 57
2. RECEiVABLES............................................................................................................ 57
3. INTERFUND RECEIVABLES AND PAYABLES .........................................................58
4. AMOUNTS DUE FROM OTHER GOVERNMENTAL UNITS...................................... 58
5. INVENTORIES ............................................................................................................ 58
6. RESTRICTED ASSETS............................................................................................... 58
7. INTERFUND TRANSACTIONS................................................................................... 58
8. CAPITAL ASSETS....................................................................................................... 58
9. DEFERRED CREDITS/CHARGES .............................................................................59
10. COMPENSATED ABSENCES.................................................................................... 59
11. DEFERRED REVENUES ............................................................................................ 60
12. RESERVATIONS AND DESIGNATIONS OF FUND EQUITY .................................... 60
F. REVENUES, EXPENDITURES AND EXPENSES ............................................................. 60
G. ESTIMATES........................................................................................................................ 61
H. CHANGES IN ACCOUNTING STANDARDS ..................................................................... 61
NOTE 2 - STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITy.............................................. 61
NOTE 3 - DEPOSITS AND INVESTMENTS...................................................................................... 62
NOTE 4 - PROPERTY TAXES........................................................................................................... 64
NOTE 5 - INTERFUND ACTIVITY ..................................................................................................... 65
NOTE 6 - DUE FROM OTHER GOVERNMENTAL UNITS ...............................................................67
NOTE 7 - CAPITAL ASSETS AND DEPRECIATION ........................................................................ 68
NOTE 8 - CAPITAL LEASE OBLIGATION......................................................................................... 69
NOTE 9 - RECORDED VACATION, SICK LEAVE, AND POST-EMPLOYMENT BENEFITS .......... 70
NOTE 10 - PENSION PLANS ............................................................................................................ 70
NOTE 11 - LONG-TERM DEBT ......................................................................................................... 79
NOTE 12 - CONSTRUCTION COMMITMENTS................................................................................ 82
NOTE 13 - CEMETERY ENDOWED CARE FUND ...........................................................................82
NOTE 14 - JOINT VENTURE / RELATED PARTY............................................................................ 83
NOTE 15 - JOINTLY GOVERNED ORGANIZATION / RELATED PARTy....................................... 84
NOTE 16 - CONTINGENCIES AND LITIGATION .............................................................................85
NOTE 17 - RISK MANAGEMENT & INSURANCE ............................................................................ 85
NOTE 18 - SUBSEQUENT EVENT ................................................................................................... 86
51
CITY OF AUBURN: 2007 CAFR
NOTES TO THE FINANCIAL STATEMENTS
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's significant accounting policies are described in the following notes.
A. REPORTING ENTITY
The City's Comprehensive Annual Financial Report (CAFR) includes all funds controlled
by the City.
Joint Venture - Based on the criteria of Governmental Accounting Standards Board
(GAS B) Statement No. 14 as modified by GASB Statement No. 34, the Valley
Communications Center is included in the accompanying government-wide statement of
net assets as a joint venture. (Please refer to Notes 7 and 14).
Jointly Governed Organization - 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 City of Auburn is
fiscal agent for the VRFA, and as such activity for the VRFA is accounted for in the City's
agency fund.
The government-wide financial statements consist of the government-wide statement of
net assets 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 assets and the statement of activities, summarize the entire
operation of the City. The fund financial statements, which include balance sheets,
statements of revenues, expenditures and changes in fund balances, budget and actual
statements, and statements 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 activities demonstrates the degree to which the direct expenses of
various functions and activities of the City are offset by program revenues. Direct
52
CITY OF AUBURN: 2007 CAFR
NOTES TO THE FINANCIAL STATEMENTS
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.
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 "deferred revenue", since they are not
considered to be available.
53
CITY OF AUBURN: 2007 CAFR
NOTES TO THE FINANCIAL STATEMENTS
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, 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 assets. Long-term liabilities, including compensated absences not currently due and
payable, are also reported on the government-wide statement of net assets.
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 one-half cent gas tax and is used for major street
construction.
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
54
CITY OF AUBURN: 2007 CAFR
NOTES TO THE FINANCIAL STATEMENTS
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
Proprietary funds are accounted for on the "flow of economic resources"
measurement focus. This means that all assets and all liabilities (whether current or
non-current) associated with their activity are included on their balance sheets. Their
reported fund equity is segregated into contributed capital and net asset components.
Proprietary fund operating statements present increases (revenues and gains) and
decreases (expenses and losses) in net total fund equities. The proprietary fund
measurement focus is upon 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.
Pursuant to Statement No. 20 of the Governmental Accounting Standards Board
(GASB), Accounting and Financial Reporting for Proprietary Funds and Other
Governmental Entities That Use Proprietary Fund Accounting, the City has chosen to
apply all applicable GASB pronouncements as well as the following pronouncements
issued on or before November 30, 1989, unless those pronouncements conflict with
or contradict GASB pronouncements: FASB Statements and Interpretations, APB
Opinion, and ARBs.
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.
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.
55
CITY OF AUBURN: 2007 CAFR
NOTES TO THE FINANCIAL STATEMENTS
The Fire Relief and Pension Trust 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.
The Agency 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 biannually 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:
1. 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
1 st. The operating budget includes proposed expenditures and funding sources.
2. Public hearings are conducted at the Auburn City Council Meetings to obtain
taxpayer comments.
3. Prior to December 31 st, the budget is legally enacted through passage of an
ordinance.
4. The final operating budget as adopted is published and distributed after adoption.
Copies of the budget are made available to the public.
Amounts shown in the accompanying financial statements represent the original
budgeted amounts and all supplemental appropriations.
56
CITY OF AUBURN: 2007 CAFR
NOTES TO THE FINANCIAL STATEMENTS
ORIGINAL AND SUPPLEMENTAL APPROPRIATIONS
Original Final
Budget Revisions Budget
Governmental funds
General fund $ 54,987,600 $ 4,207,500 $ 59,195,100
~governmental funds 54,987,600 4,207,500 59,195,100 I
Special revenue funds:
Local street 1,200,000 911 ,100 2,111 ,100
Arterial street 7,599,000 2,723,000 10,322,000
Hotel/motel tax 70,000 30,300 100,300
Drug forfeiture fund 259,500 83,500 343,000
Local Law Enforcement Block Grant 29,000 29,000
Housing and Community Development 520,737 520,737
Business Improvement Area 53,500 53,500
Cumulative reserve 1,151,900 (1,141,900) 10,000
Mitigation fees 895,000 1 ,373,400 2,268,400
Parks & recreation special projects 41,154 19,358 60,512
Total special revenue funds 11,819,791 3,998,758 15,818,5491
Total budgeted funds $ 66,807,391 $ 8,206,258 $ 75,013,649 I
E. ASSETS, LIABILITIES, AND FUND EQUITY
1. DEPOSITS AND INVESTMENTS
It is the City's policy to invest all temporary cash surplus. At December 31,2007, the
Local Government Investment Pool (LGIP) was holding $71,383,914 in short-term
investments. This amount is classified on the balance sheet 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.
The City, by state law, is authorized to purchase certificates of deposit issued by
Washington State depositories that participate in the state investment pool, 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.
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.
57
CITY OF AUBURN: 2007 CAFR
NOTES TO THE FINANCIAL STATEMENTS
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 deferred, 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
Inventories in the enterprise and internal service funds are valued at cost using the
weighted average costing method. Governmental fund types recognize the cost of
inventory items as expenditures when purchased. In governmental funds, materials
and supplies remaining at year-end are immaterial and not included in inventory.
6. RESTRICTED ASSETS
There are three types of restricted assets: customer deposits, proceeds of revenue
bonds issued by City utilities that are restricted by applicable bond ordinances to pay
bond and construction costs, and funds contributed by the Muckleshoot Indian Tribe
that have been restricted for use in certain construction projects.
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".
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
58
CITY OF AUBURN: 2007 CAFR
NOTES TO THE FINANCIAL STATEMENTS
water mains, is reported in the applicable government or business-type activities
columns in the government-wide statement of net assets. All infrastructure costs
have 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.
In accordance with FASB Statement No. 62, the City capitalized net construction
period interest during 2007 for enterprise funds with projects funded by tax-exempt
bonds. Because construction period interest expense exceeded interest revenue, the
net effect of capitalization was to increase overall project costs. Net construction
period interest expense was $6,466 for the columbarium construction project at the
Mountain View Cemetery, and $30,865 for the clubhouse construction project at the
Auburn Golf Course. In accordance with FASB Statement No. 34, the City
capitalized construction period interest related to taxable bonds for the restaurant
portion of the golf course clubhouse project. Interest expense capitalized related to
the taxable bonds was $98,898.
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 improvements financed by
special assessments that provide capital assets to a government's proprietary funds
are capitalized on the fund's balance sheet and are offset by equity.
Capital assets of all funds are depreciated, and are calculated on the straight-line
method utilizing estimated lives as follows:
Asset
Building
Improvement
Equipment
Infrastructure
Capitalization
Threshold
$5,000
$5,000
$5,000
$5,000
Depreciation
Method
Straight-line
Straight-line
Straight-line
Straight-line
Estimated
Useful Life
10 - 50 years
10 - 50 years
3 - 20 years
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. DEFERRED CREDITS/CHARGES
Deferred charges and credits include the premium, discount and issuance costs of
revenue bonds that are amortized over the life of the bond issue. Deferred credits
and charges also include undistributed court receipts.
10. 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
59
CITY OF AUBURN: 2007 CAFR
NOTES TO THE FINANCIAL STATEMENTS
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 assets and in proprietary funds. Vacation, compensatory time, and
sick leave are calculated separately for each employee using the rules described
above.
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.
11. DEFERRED 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.
12. RESERVATIONS AND DESIGNATIONS OF FUND EQUITY
In governmental funds, reserves are used to indicate a portion of fund balance that is
not appropriable for expenditure or is legally segregated, and designations are used
to indicate tentative managerial plans for financial resource utilization in a future
period. In proprietary funds, net assets are generally reserved in connection with
restricted assets or for legal segregation. These reserves are identified on the
balance sheet of each fund type.
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.
60
CITY OF AUBURN: 2007 CAFR
NOTES TO THE FINANCIAL STATEMENTS
Proceeds from sale or loss 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.
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
H. CHANGES IN ACCOUNTING STANDARDS
The Governmental Accounting Standards Board (GAS B) has issued Statement No. 34
Basic Financial Statements - and Management's Discussion and Analysis - for State
and Local Governments, Statement No. 37 Basic Financial Statements - and
Management's Discussion and Analysis - for State and Local Governments: Omnibus -
an amendment of GASB Statements No. 21, and No. 34, and Statement No. 38 Certain
Financial Statement Note Disclosures. These new accounting and reporting standards
impacted the City's revenue and expenditure recognition and assets, liabilities, and fund
equity reporting. The new standards also required reformatting of the financial
statements and restating beginning balances. These new GASB standards were
implemented in 2003 except for the full reporting of infrastructure assets, which was
implemented in 2004.
NOTE 2 - STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
61
CITY OF AUBURN: 2007 CAFR
NOTES TO THE FINANCIAL STATEMENTS
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, 2007, the carrying amount of the City's cash demand deposits with Key Bank
totaled $3,170,172 while the bank balance was $3,420,147. In addition, there was $10,000 in the
Drug Forfeiture Fund to be used for enforcement purposes, and $6,325 in various petty cash and
cashier change funds.
The Federal Deposit Insurance Corporation (FDIC) insures the City's deposits up to $100,000
and the Washington Public Deposit Protection Commission (WPDPC) insures amounts over
$100,000. The WPDPC is a multiple financial institution collateral arrangement, which provides
for additional assessments against members of the pool on a pro rata basis.
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. Pension and non-expendable trust funds
are not subject to these limitations. All temporary investments are stated at cost. Other
investments are shown on the balance sheet at fair value. Investments that were not at par value
(cost) as of December 31, 2007 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.
During 2007, the net decrease in the fair value of investments being held for more than one year
is $198,587 at year-end.
As of December 31,2007, the City had the following investments and maturities:
SCHEDULE OF INVESTMENTS BY MATURITIES
AS OF DECEMBER 31, 2007
Investment Type
Investment maturities I
Fair Less than 1 to 2 2to 3 Greater than I
Value 1 year years years 3 years
$ 71 ,383,914 $ 71,383,914 $ - $ - $
86,078 86,078
20,810,160 7,990,633 5,300,309 7,519,219
$ 92,280,152 $ 79,374,546 $ 5.300.309 $ 7.519.219 $ 86.078 I
State investment pool
US Treasuries
US Agencies
rTOtal
Reconciliation to government-
wide statement of net assets:
Total investments above
Plus: cash in checking and petty cash
Less: cash investments in fiduciary funds
Total cash and investments, government-
wide statement of net assets
$ 92,280,152
3,242,679
(5,108,221 )
$ 90,414,610 I
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.
62
CITY OF AUBURN: 2007 CAFR
NOTES TO THE FINANCIAL STATEMENTS
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.
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, 2007, the City had investments in a limited number of investment
instruments as follows:
. Federal Home Loan Bank bonds
. Federal National Mortgage Association bonds
. Federal Farm Credit Bank bonds
. Federal Home Loan Mortgage Corporation bonds
. State Local Government Investment Pool
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,
2007.
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.
Below is a schedule of investments by fund type:
63
CITY OF AUBURN: 2007 CAFR
NOTES TO THE FINANCIAL STATEMENTS
SCHEDULE OF INVESTMENTS BY FUND CATEGORY AND INVESTMENT TYPE
AS OF DECEMBER 31, 2007
State
Investment U.S.
Pool Securities Total
General Fund $ $ 2,997,813 $ 2,997,813
Special Revenue Funds 1,000,938 1,000,938
Capital Project Funds 2,013,111 2,013,111
Permanent Funds 1,285,323 1,285,323
Enterprise Funds 12,511,726 12,511,726
Internal Service Funds 1,001,250 1,001,250
Fiduciary Funds 86,078 86,078
Treasurer's Residual Funds 71 ,383,914 71,383,914
I Total $ 71 ,383,914 $ 20,896,238 $ 92,280,1521
NOTE 4 - PROPERTY TAXES
Property taxes received during tax year 2007 were $15,666,016, including collection of prior year
delinquent assessments. Property taxes assessed for collection in tax year 2007 were based on a
regular tax levy of $2.73 per $1 ,000 on a total 2006 assessed value of $5,759,446,291.
For levy year 2007, to be received in 2008, the City's regular tax levy is $1.48 per $1,000 on a
2007 assessed valuation of $6,526,294,998, as of December 31, 2007, for a total regular levy of
$9,684,042. The decrease in levy rate from $2.73 to $1.48 is a result of incorporation of the new
Valley Regional Fire Authority, as discussed in Note 15, which will assess its own property tax
levy and fire benefit charge for 2008. 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
2.50% of assessed value
without a vote of the people
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
2.50% of assessed value
with a vote of the people, indebtedness is for utilities
with a vote of the people, indebtedness is for parks, or open
space development
At December 31 , 2007, the debt limits for the City were as follows:
With a Vote
For Parks or
Without General For Open Space
Item a Vote Purposes Utilities Development Total
1.50% 1.00% 2.50% 2.50% Ca pacity
Legal Limit $ 97,894,425 $ 65,262,950 $ 163,157,375 $ 163,157,375 $ 489,472,125
Outstanding indebtedness (11,126,484) (11,126,484)
Assets available 3,040,560 3,040,560
Margin available $ 89,808,501 $ 65,262,950 $ 163,157,375 $ 163,157,375 $ 481,386,2011
64
CITY OF AUBURN: 2007 CAFR
NOTES TO THE FINANCIAL STATEMENTS
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 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 deferred revenue. In the statement of activities, this deferred
revenue is referred to as "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 a deferred 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.
NOTE 5 - INTERFUND ACTIVITY
The next two tables summarize interfund activity during 2007. The first table details transfers
while the second lists loan activity. Transfers are legally authorized transfers of resources from a
fund receiving revenue to the fund through which resources are to be expended.
65
CITY OF AUBURN: 2007 CAFR
NOTES TO THE FINANCIAL STATEMENTS
Funds
Transfers
Transfer Out Transfer In
Governmental funds:
General fund
$
2,180,975 $
1,047,733
Special revenue funds:
Local street fund
Arterial street fund
Local Law Enforce Block Grants
Recreational trails
Mitigation fees
Special parks and recreation
Total special revenue funds
358,374
30,733
389,107
1 ,586,100
1,736,348
2,600
5,100
66,297
3,396,445
Debt service funds:
1998 library GO
LID guarantee
Special assessments
Total debt service funds
10,000
70,510
80,510
306,500
70,511
377,011
Capital projects funds:
Park construction
Capital improvement projects
Total capital projects funds
2,821,896
2,821,896
367,155
914,800
1,281,955
Proprietary funds:
Water
Sewer
Storm drainage
Cemetery
Golf course
Total proprietary funds
50,000
50,000
50,000
150,000
70,500
451,160
521,660
Internal service funds:
Information services
Equipment rental
Total internal service funds
15,000
1,007,000
1,007,000
15,000
Fiduciary funds:
Fire pension & relief fund
60,185
Permanent funds:
Cemetery endowed care
ITotal
$
70,500
6,699,988 $
6,699,988 I
All transfers are considered routine.
Loans between funds are classified as interfund loans receivable and payable or advances to and
from other funds on the balance sheet, depending on the time period for which the loan was
made. Interfund loans do not affect total fund equity.
66
CITY OF AUBURN: 2007 CAFR
NOTES TO THE FINANCIAL STATEMENTS
Interfund Loans Balance Balance
Due From Due To 1/1/2007 New Loans Repayments 12/31/2007
Golf course fund Capital projects fund $ $ 150,000 $ 15,625 $ 134,375
Park construction fund General fund 150,000 150,000
Comm Dev Blk Grant General fund 134,000 75,000 59,000
Local Law Blk Grant General fund 20,000 20,000
iTotal interfund loans $ 134,000 $ 320,000 $ 90,625 $ 363,375 I
All interfund loans are considered short-term cash loans.
NOTE 6 - DUE FROM OTHER GOVERNMENTAL UNITS
As of December 31,2007, the City had receivables due from other governmental units as follows:
IDue from Other Governmental Units
General fund:
WA State Treasurer - Sales taxes
WA Dept. of Ecology - Shoreline upgrade grant
WA Dept. of Transportation - Wayfinding grant
King County - Olympic Leadership Academy grant
King County - Real estate excise taxes
Pierce County - Real estate excise taxes
Muckleshoot Indian Tribe - Public safety
Total general fund
Arterial street fund:
WA Dept. of Transportation - Arterial street improvements
Local law enforcement block grant:
U.S. Dept. of Justice - Justice assistance grant
Housing & community development:
U.S. Dept. of Housing - Community development block grant
Municipal park construction:
WA Recreation and Conservation Office - Park imp. grants
Solid waste fund:
WA Dept. of Ecology - Coordinated prevention grant
King County - Local hazardous waste management grant
King County - Waste reduction and recycling grant
Total solid waste fund
Agency disbursement fund:
King County - Basic life support
City of Algona - Court administration
Total agency disbursement fund
iTotal
Reconciliation to government-wide statement of net assets:
Total above due from other governmental units
Amount due to fiduciary fund
Total due from other governmental units,
government-wide statement of net assets
$ 1,348,934
3,039
13,418
12,500
117,445
54,686
307,819
1,857,841
760,670
29,000
63,106
349,200
5,023
13,420
24,820
43,263
374,206
20,302
394,508
$ 3,497,5881
$ 3,497,588
(394,508)
$ 3,103,080 I
67
CITY OF AUBURN: 2007 CAFR
NOTES TO THE FINANCIAL STATEMENTS
NOTE 7 - CAPITAL ASSETS AND DEPRECIATION
Capital asset activity for the year ended December 31,2007 is as follows:
Schedule of Capital Asset Activity
Balance Decreasesl Balance
1/1/07 Increases Adjustments 12/31/07
Governmental activities:
Capital assets, not being depreciated:
Land $ 44,536,400 $ 4,432,657 $ $ 48,969,057
Construction in progress 3,266,011 3,522,259 (3,261,849) 3,526,421
Total capital assets, not being depreciated 47,802,411 7,954,916 (3,261,849) 52,495,478
Capital assets, being depreciated:
Buildings 21,726,647 2,477,701 24,204,348
Improvements other than buildings 10,578,948 1,749,261 (5,235) 12,322,974
Machinery and equipment 17,296,361 2,107,208 (4,455,281) 14,948,288
Joint venture 3,701,815 147,875 3,849,690
Intangibles 695,504 695,504
Infrastructure 180,518,220 10,668,410 191,186,630
Total capital assets being depreciated 233,821,991 17,845,959 (4,460,516) 247,207,434
Less: accumulated depreciation for:
Buildings (6,796,631 ) (618,184) (7,414,815)
Improvements other than buildings (8,000,837) (244,867) (8,245,704)
Machinery and equipment (10,223,689) (1,459,195) 2,843,604 (8,839,280)
Joint venture (963,902) (963,902)
Intangibles ( 46,367) (46,367)
Infrastructure (51,086,639) (5,959,319) (57,045,958)
Total accumulated depreciation (77,071,698) (8,327,932) 2,843,604 (82,556,026)
Total capital assets, being depreciated, net 156,750,293 9,518,027 (1,616,912) 164,651,408
rGovernmentalacHvities capital assets, net $ 204,552, 704 ~ $ 17,472,943 ~ $ (4,878,761( $ 217,146,8861
Business-type activities:
Capital assets, not being depreciated:
Land $ 14,158,803 $ $ $ 14,158,803
Construction in progress 4,447,367 10,088,672 (8,556,765) 5,979,274
Total capital assets, not being depreciated 18,606,170 10,088,672 (8,556,765) 20,138,077
Capital assets, being depreciated:
Buildings 7,326,265 5,458,467 12,784,732
Improvements other than buildings 165,310,868 13,608,574 178,919,442
Machinery and equipment 3,378,391 212,214 ( 44,432) 3,546,173
Total capital assets being depreciated 176,015,524 19,279,255 ( 44,432) 195,250,347
Less: accumulated depreciation for:
Buildings (3,273,018) (204,072) (640,844) (4,117,934)
Improvements other than buildings (52,903,830) (4,178,214) (57,082,044)
Machinery and equipment (2,338,146) (189,934) 23,975 (2,504,105)
Total accumulated depreciation (58,514,994) ( 4,572,220) (616,869) (63,704,083)
Total capital assets, being depreciated, net 117,500,530 14,707,035 (661 ,301) 131,546,264
rSusiness-tYJ:>e activities caJ:>ital assets, net $ 136,106,700 ~ $ 24,795,707 ~ $ (9,218,066) ~ $ 151,684,341 1
68
CITY OF AUBURN: 2007 CAFR
NOTES TO THE FINANCIAL STATEMENTS
Depreciation/amortization expense was charged to functions/programs of the City as follows:
Government activities:
General government
Public safety
Transportation
Physical environment
Culture and recreation
Capital assets held by the City's internal service funds are charged to the various
functions based on their usage of the assets
rTotal aef)reciation/amortization eXf)ense - governmental activities
$ 198,037
518,613
5,836,292
61,988
615,162
1,097,840
$ 8,327,932 I
Business-type activities:
Water
Sanitary sewer
Storm water
Solid waste
Golf course
Airport
Cemetery
Commercial retail
rTO'ialaepreciation expense - bUSiness-type activHies
$ 2,008,907
986,668
951 ,898
38,1 07
142,634
246,349
78,330
119,327
$ 4,572,220 I
NOTE 8 - CAPITAL LEASE OBLIGATION
During 2007 the City entered into a capital lease agreement for the Auburn Avenue Theater
facility. 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.
SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS
2008
2009
2010
2011
2012
2013-2017
2018-2021
Total minimum lease payments
Less: Amounts representing interest
Ipresent value of future minimum lease payments
Lease
Payable
$ 66,000
66,000
66,000
66,000
66,000
330,000
264,000
924,000
(260,446)
$ 663,5541
As of December 31, 2007, the value of capital assets acquired under the capital lease is
$649,137. Monthly lease payments of $5,500 are payable through the end of the lease period on
December 1, 2021. Interest on the lease was imputed at five percent.
69
CITY OF AUBURN: 2007 CAFR
NOTES TO THE FINANCIAL STATEMENTS
NOTE 9 - RECORDED VACATION, SICK LEAVE, AND POST-EMPLOYMENT BENEFITS
In accordance with GASB Statement No. 16, the City accrues vacation and sick leave pay. The
accrual is shown on the government-wide statement of net assets for both governmental and
proprietary funds. The accrual is also seen in the separate proprietary fund balance sheets, but
is excluded from the separate governmental fund balance sheets since it is not currently due and
payable at year-end (please refer to Note 11).
In addition to pension benefits described in Note 10, the City provides post-employment benefits,
in accordance with state statutes, to all LEOFF 1 retirees. Currently, 65 retirees meet the
eligibility requirements. The City provides long-term care, medical insurance, and reimburses all
validated claims for medical, dental and hospitalization costs incurred by retirees. Expenditures
for post-retirement health care benefits are recognized as retirees report claims. During the year,
expenditures of $1,020,293 were recognized for post-employment health care. This represents
an increase of $98,650 from the previous year.
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 and
defined contribution 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. The following disclosures are made pursuant to GASB Statement 27, Accounting
for Pensions by State and Local Government Employers.
Public Employees' Retirement System (PERS) Plans 1, 2, and 3
Plan Description
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.
Membership in the system includes: elected officials; state employees; employees of the
Supreme, Appeals, and Superior courts (other than judges currently in a judicial retirement
system); employees of legislative committees; community and technical colleges, college and
university employees not participating in national higher education retirement programs; judges of
district and municipal courts; and employees of local governments.
PERS participants 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 participants 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.
70
CITY OF AUBURN: 2007 CAFR
NOTES TO THE FINANCIAL STATEMENTS
PERS defined benefit retirement benefits are financed from a combination of investment earnings
and employer and employee contributions. PERS retirement benefit provisions are established in
state statute and may be amended only by the State Legislature.
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 annual benefit is two percent of the
average final compensation per year of service, capped at 60 percent. The average final
compensation is based on the greatest compensation during any 24 eligible consecutive
compensation months. Plan 1 retirements from inactive status prior to the age of 65 may receive
actuarially reduced benefits. The benefit is actuarially reduced to reflect the choice of a survivor
option. A cost-of living allowance (COLA) is granted at age 66 based upon years of service times
the COLA amount, increased by three percent annually. Plan 1 members may also elect to
receive an additional COLA amount (indexed to the Seattle Consumer Price Index), capped at
three percent annually. To offset the cost of this annual adjustment, the benefit is reduced.
Plan 2 members are vested after the completion of five years of eligible service. Plan 2 members
may retire at the age of 65 with five years of service, or at the age of 55 with 20 years of service,
with an allowance of two percent of the average final compensation per year of service. The
average final compensation is based on the greatest compensation during any eligible
consecutive 60-month period. Plan 2 retirements prior to the age of 65 receive reduced benefits.
If retirement is at age 55 or older with at least 30 years of service, a three percent per year
reduction applies; otherwise an actuarial reduction will apply. The benefit is also actuarially
reduced 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 (indexed to the Seattle Consumer Price Index), capped at
three percent annually.
Plan 3 has a dual benefit structure. Employer contributions finance a defined benefit component,
and member contributions finance a defined contribution component. The defined benefit portion
provides a benefit calculated at one percent of the average final compensation per year of
service. The average final compensation is based on the greatest compensation during any
eligible consecutive 60-month period. Effective June 7, 2006, Plan 3 members are vested in the
defined benefit portion of their plan after ten years of service; or after five years of service, if
twelve months of that service are earned after age 44; or after five service credit years earned in
PERS Plan 2 prior to June 1, 2003. Plan 3 members are immediately vested in the defined
contribution portion of their plan. Vested Plan 3 members are eligible to retire with full benefits at
age 65, or at age 55 with 10 years of service. Retirements prior to the age of 65 receive reduced
benefits. If retirement is at age 55 or older with at least 30 years of service, a three percent per
year reduction applies; otherwise an actuarial reduction will apply. The benefit is also actuarially
reduced to reflect the choice of a survivor option. There is no cap on years of service credit, and
Plan 3 provides the same cost-of-living allowance as Plan 2.
The defined contribution portion can be distributed in accordance with an option selected by the
member, either as a lump sum or pursuant to other options authorized by the Employee
Retirement Benefits Board.
Judicial Benefit Multiplier
Beginning January 1, 2007 through December 31, 2007, judicial members of PERS may choose
to participate in the Judicial Benefit Multiplier Program (JBM). Current justices or judges in PERS
Plan 1 and 2 may 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 financial compensation. Judges in PERS Plan 3 can 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 will accrue service credit at the higher multiplier
beginning with the date of their election, pay higher contributions, stop contributing to the Judicial
71
CITY OF AUBURN: 2007 CAFR
NOTES TO THE FINANCIAL STATEMENTS
Retirement Account (JRA), and be given the option to increase the multiplier on past judicial
service. Members who do not choose to participate will: 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.
Justices and judges who are newly elected or appointed to judicial service and choose to become
PERS members on or after January 1, 2007, or who have not previously opted into PERS
membership, are required to participated in the JBM Program.
Justices and judges who are newly elected or appointed to judicial service will: 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.
There are 1,188 participating employers in PERS. Membership in PERS consisted of the
following as of the latest actuarial valuation date for the plans of September 30,2006:
Retirees and Beneficiaries Receiving Benefits
Terminated Plan Members Entitled to but not yet Receiving Benefits
Active Plan Members Vested
Active Plan Members Non-vested
Total
70,201
25,610
105,215
49.812
250,838
Fundinq 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 Employee
Retirement Benefits Board sets Plan 3 employee contribution rates. Six rate options are available
ranging from 5 to 15 percent; two of the options are graduated rates dependent on the
employee's age. 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 31,2007, were as follows:
Members not participating in JBM:
PERS Plan 1
PERS Plan 2
PERS Plan 3
Employer*
Employee
6.13%**
6.13%**
6.13%***
6.00%****
4.15%****
* The employer rates include the employer administrative expense fee currently set at 0.16%.
72
CITY OF AUBURN: 2007 CAFR
NOTES TO THE FINANCIAL STATEMENTS
** The employer rate for state elected officials is 9.12% for Plan 1 and 6.13% 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 4.15% 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 I
Employer*
Employee
6.13%
12.26%
6.13%
10.38%
6.13%**
7.50%***
* The employer rates include the employer administrative expense fee currently set at 0.16%.
** Plan 3 defined benefit portion only.
*** Minimum rate.
Both City and the employees made the required contributions. The City's required contributions
for the years ended December 31 were as follows:
PERS Plan 1 PERS Plan 2 PERS Plan 3 I
2007 $49,744 $765,172 $144,898
2006 $37,733 $386,786 $65,820
2005 $24,541 $226,425 $30,450
The increase in contributions each year is primarily due to an increase in the employer
contribution rate. The employer contribution rate for the City was 2.44% in 2005, 3.69% in 2006,
and 6.13% in 2007.
Law Enforcement Officers' and Fire Fighters' Retirement System (LEOFF) Plans 1 and 2
Plan Description
LEOFF is a cost-sharing multiple-employer retirement system comprised of two separate defined
benefit plans. LEOFF participants 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. Membership in the
system includes all full-time, fully compensated, local law enforcement officers and firefighters.
LEOFF membership is comprised primarily of non-state employees, with Department of Fish and
Wildlife enforcement officers, who were first included prospectively effective July 27, 2003, being
an exception. In addition, effective July 24, 2005, current members of PERS who are emergency
medical technicians can elect to become members of LEOFF Plan 2.
Effective July 1, 2003, the LEOFF Plan 2 Retirement Board was established 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 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
73
CITY OF AUBURN: 2007 CAFR
NOTES TO THE FINANCIAL STATEMENTS
pays through state legislative appropriations. LEOFF retirement benefit provisions are
established in state statute and may be amended by the State Legislature.
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 is as follows:
Term of Service
20 or more years
10 but less than 20 years
5 but less than 10 years
Percent of Final Average Salary
2.0%
1.5%
1.0%
The final average salary 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. If membership was established in LEOFF after February 18, 1974, the service
retirement benefit is capped at 60 percent of final average salary. A cost-of-living allowance is
granted (indexed to the Seattle Consumer Price Index).
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 final average salary per year of service. The final
average salary is based on the highest consecutive 60 months. Plan 2 retirements prior to the
age of 53 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. There is no cap on years of
service credit; and a cost-of-living allowance is granted (indexed to the Seattle Consumer Price
Index), capped at three percent annually.
There are 383 participating employers in LEOFF. Membership in LEOFF consisted of the
following as of the latest actuarial valuation date for the plans of September 30,2006:
Retirees and Beneficiaries Receiving Benefits
Terminated Plan Members Entitled to but not yet Receiving Benefits
Active Plan Members Vested
Active Plan Members Non-vested
Total
8,951
602
12,711
3.603
25,867
Fundinq Policy
Starting on July 1, 2000, 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. 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 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.
The required contribution rates expressed as a percentage of current year covered payroll, as of
December 31,2007, were as follows:
74
CITY OF AUBURN: 2007 CAFR
NOTES TO THE FINANCIAL STATEMENTS
LEOFF Plan 1
LEOFF Plan 21
Employer*
Employee
0.16%
0.00%
5.35%**
8.64%
* The employer rates include the employer administrative expense fee currently set at 0.16%.
** The employer rate for ports and universities is 8.80%.
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 21
2007 $216 $382,356
2006 $1,049 $585,329
2005 $1,236 $463,000
Public Safety Employees' Retirement System (PSERS) Plan 2
Plan Description
PSERS was created by the 2004 legislature and became effective July 1, 2006. PSERS is a
cost-sharing multiple-employer retirement system comprised of a single defined benefit plan,
PSERS Plan 2.
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.
A "covered employer" is one that participates in PSERS. Covered employers include: State of
Washington agencies: Department of Corrections, Department of Natural Resources, Parks and
Recreation Commission, Gambling Commission, Washington State Patrol, Liquor Control Board;
Washington state counties; and Washington state cities except for Seattle, Tacoma and Spokane.
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 defined benefit retirement benefits are financed from a combination of investment
earnings and employer and employee contributions. PSERS retirement benefit provisions are
established in state statute and may be amended only by the State Legislature.
Plan 2 members are vested after the completion of five years of eligible service. PSERS Plan 2
members may retire at the age of 65 with five years of service, or at the age of 60 with at least 10
years of PSERS service credit, with an allowance of two percent of the average final
compensation per year of service. The average final compensation is the monthly average of the
75
CITY OF AUBURN: 2007 CAFR
NOTES TO THE FINANCIAL STATEMENTS
member's 60 consecutive highest-paid service credit months, excluding any severance pay such
as lump-sum payments for deferred sick leave, vacation or annual leave. Plan 2 retirees 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. There is no cap on years of service credit; and a cost-of-living allowance is granted
(indexed to the Seattle Consumer Price Index), capped at three percent annually.
There are 69 participating employers in PSERS. Membership in PSERS consisted of the
following as of the latest actuarial valuation date for the plan of September 30, 2006:
Retirees and Beneficiaries Receiving Benefits
Terminated Plan Members Entitled to but not yet Receiving Benefits
Active Plan Members Vested
Active Plan Members Non-vested
Total
2.073
2,073
Fundinq Policy
Each biennium, the state Pension Funding Council adopts 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. All employers are required to contribute at the
level established by the Legislature. 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 payroll, as of
December 31,2007, were as follows:
PSERS
Plan 2
Employer*
Employee
8.55%
6.57%
*The employer rate includes and employer administrative expense fee of 0.16%.
Both City and the employees made the required contributions. The City's required contributions
for the years ended December 31 were as follows:
PSERS I
Plan 2
2007 $ 48,549
2006 $ 7,225
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 and disability benefits, annual cost-of-living
adjustments, and death benefits to plan members and beneficiaries. Membership is limited to
76
CITY OF AUBURN: 2007 CAFR
NOTES TO THE FINANCIAL STATEMENTS
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, 2007 that no
future City contributions would be required beyond future revenues from state fire insurance taxes
and interest earnings. In 2007 $60,185 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.
Membership of the Firemen's Pension Plan consisted of 15 eligible, of which 14 are receiving
benefits.
GASB STATEMENTS No. 25 and No. 27 SCHEDULE OF FUNDING PROGRESS
(rounded to thousands)
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, 1999 $2,096 $2,157 $60 97.17% $119 51%
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% $0 N/A
This plan primarily covers inactive participants. There are no current member contributions.
Prior to adoption of GASB Statement No. 25 in 1997, the Annual Required Contribution (ARC)
was not determined pursuant to the parameters required by the statement. Therefore, no liability
prior to 1997 has been shown.
77
CITY OF AUBURN: 2007 CAFR
NOTES TO THE FINANCIAL STATEMENTS
GASB STATEMENT No. 25 GASB STATEMENT No. 27
SCHEDULE OF EMPLOYER CONTRIBUTIONS THREE YEAR TREND INFORMATION
fiscal Actual Annual Required Percentage Annual Percentage Net
Year Employer Contribution of ARC Pension Cost of APC Pension
Ending Contributions (ARC) Contributed (APC) Contributed Obligation
December 31, 1998 $24,822 $38,763 64%
December 31, 1999 $52,738 $5,381 980%
December 31, 2000 $31,721 $5,381 590% $5,520 574.66% ($48,808)
December 31, 2001 $37,281 $0 N/A $341 10932.84% ($85,748)
December 31, 2002 $40,869 $0 N/A $684 5975.00% ($125,933)
December 31, 2003 $45,664 $0 N/A $1,137 4016.18% ($170,460)
December 31, 2004 ($137,783) ($91,881) N/A ($90,143) NiA ($122,820)
December 31, 2005 ($144,746) ($78,690) N/A ($76,827) NiA ($54,901)
December 31, 2006 ($149,327) ($78,690) N/A ($77,774) NiA $16,652
December 31, 2007 $60,185 ($5,048) NiA ($5,420) N/A ($48,953)
GASB STATEMENT No. 27
Annual Development of Pension Cost
Fiscal ARC at Amort. Annual Total
Year End of Interest on ARC Factor Pension Cost Employer Change in NPO
Ending Year (1) NPO(2) Adjustment (APC) Contributions NPO Balance (3)
12/31/1998 $38,763 $873 $848 12.88% $38,788 $24,822 $13,966 $24,822
12/31/1999 $5,381 $1,742 $1,874 13.28% $5,249 $52,738 ($47,489) ($22,667)
12/31/2000 $5,381 ($1,582) ($1,721) 13.14% $5,520 $31,721 ($26,201 ) ($48,808)
12/31/2001 $0 ($3,417) ($3,758) 12.99% $341 $37,281 ($36,940) ($85,748)
12/31/2002 $0 ($6,002) ($6,686) 12.83% $684 $40,869 ($40,185) ($125,933)
12/31/2003 $0 ($8,815) ($9,952) 12.65% $1,137 $45,664 ($44,527) ($170,460)
12/31/2004 ($91,881 ) ($11,932) ($13,670) 12.47% ($90,143) ($137,783) $47,640 ($122,820)
12/31/2005 ($78,690) ($7,369) ($9,232) 13.30% ($76,827) ($144,746) $67,919 ($54,901)
12/31/2006 ($78,690) ($3,294) ($4,210) 13.04% ($77,774) ($149,327) $71,553 $16,652
12/31/2007 ($5,048) $833 $1,205 13.82% ($5,420) $60,185 ($65,605) ($48,953)
(1) A change in consulting actuaries resulted in a recommended change in the actuarial methods and assumptions.
(2) 8.00% interest rate was used for years prior to January 1, 1999: 7.00% thereafter.
(3) The Net Pension Obligation (NPO) balance is reflected as part of Deferred Credits on the Government-wide
Statement of Net Assets
* Based on 30-year level-dollar closed amortization as of January 1, 1999 (27 years as of January 1,2003).
The information presented in the preceding required schedules was determined as part of the
actuarial valuations at the date indicated.
78
CITY OF AUBURN: 2007 CAFR
NOTES TO THE FINANCIAL STATEMENTS
IValuation date
Actuarial cost method
IAmortization method
Remaining amortization period
IAsset valuation method
JanuarY. 1, 2007
Entry age normal
30-year, closed as of JanuarY. 1, 1999
22 years
Fair market value
Actuarial Assumptions
Ilnvestment rate of return
Projected salary increases
!COst-of living~justments
5%
4%
3%
NOTE 11 - LONG-TERM DEBT
General Obliqation 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:
. 1998 Limited Tax General Obligation bonds were issued for construction of a library to be
owned and operated by the King County Rural Library District. These 20-year bonds
mature in 2018 and are paid from the Debt Service fund.
. 1999 Limited Tax General Obligation bonds were issued for construction of hangars at
the Auburn Municipal Airport. These 20-year bonds mature in 2019 and are paid from
the Airport fund.
. Valley Communication Center 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.
. 2005 Limited Tax General Obligation refunding bonds were issued to partially advance
refund the 1999 Limited Tax Obligation bonds.
. 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.
Revenue Bonds are payable from water and storm drainage utility revenues generated by those
enterprise funds.
Special Assessment Bonds are not a direct responsibility of the City, but are funded from the
collection of special assessment payments. Debt service principal and interest costs are paid
from the individual LID funds. The City is obligated for special assessment debt to the extent that
79
CITY OF AUBURN: 2007 CAFR
NOTES TO THE FINANCIAL STATEMENTS
it is required to establish an LID Guarantee fund for the purpose of guaranteeing the payment of
local improvement bonds in the event there are insufficient funds in the individual LID fund.
State of Washinqton Public Works Trust Fund Loans are a direct responsibility of the City.
Auburn currently has six outstanding loans with a remaining total balance of $10,149,419. Five of
the loans are being repaid from water and sewer fund revenues over a 20-year period that begins
upon each project completion. The other loan is being repaid from arterial street fund revenues
over a 4-year period that begins upon project completion.
The following schedules summarize the long-term debt transactions of the City for the year ended
December 31,2007. 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.
CHANGES IN LONG-TERM DEBT SUMMARY
General Special Employee Leave
Obligation Utility Assessment Benefit Deferred Charges Total
Long-term debt payable 12/31/06 $ 11,210,000 $ 15,758,410 $ 36,827 $ 3,385,277 $ (62,563) $ 30,327,951
Added 695,504 875,000 1,580,035 3,150,539
Retired (591,951) (1,753,991) (3,335,440) 37,931 (5,643,451 )
~g-term debt [layable 12/31/07 $ 11,313,553 $ 14,879,419 $ 36,827 $ 1,629,872 $ (24,632) $ 27,835,0391
DEBT SERVICE REQUIREMENT TO MATURITY
General Capital Lease Utility Special Employee Total
Obligation Bonds Obligation Bonds/Loans Assessments Leave Benefits Long-Term Debt
YEAR Principal Interest Principal Interest Principal Interest Principal Interest Principal Principal Interest
2008 597.000 $ 499.944 33.585 $ 32.415 $ 1.950.103 $ 281.065 2.102 $ 1.459.953 $ 4.040.639 $ 815.526
2009 625.000 469.878 35.303 30.697 2.010.102 217.247 1.682 16.992 2.687.396 719.504
2010 669,000 439.857 37,109 28.891 990,102 149,499 1,261 16.992 1,713.202 619,508
2011 718,000 408.540 39.009 26.991 969.524 133.882 841 16.992 1,743.524 570.253
2012 752,000 374.718 41,003 24.997 984.524 117.841 36.827 420 16.992 1,831,345 517,976
2013 795.000 339.292 43.102 22,898 989.524 101,201 16.992 1,844.617 463.391
2014 831,000 300.712 45,307 20.693 1.004.524 84.361 16.992 1,897,822 405,766
2015 873.000 259.514 47.625 18,375 1.019.524 64,484 16.992 1,957,140 342.373
2016 685.000 215.340 50,061 15.939 1.034.524 44.081 16,992 1,786.576 275.360
2017 725,000 183.730 52,623 13,377 679.524 23,154 16.992 1.474,138 220,261
2018 755,000 151.665 55.315 10,685 679.524 18,714 16.994 1,506,832 181,064
2019 495,000 118,125 58.145 7,855 679.524 14,274 1,232,669 140,254
2020 320.000 95.850 61,119 4.881 497,155 9.834 878.274 110,565
2021 330.000 81.450 64.247 1,753 497,155 7.217 891,402 90.420
2022 345.000 66.600 270.070 4.601 615.070 71.201
2023 360.000 51,075 243.955 3.120 603.955 54.195
2024 380.000 34.875 243.955 1.900 623,955 36,775
2025 395,000 17.775 136,110 681 531,112 18,456
I TOTALS $ 10.650,000 $ 4.108.937 663.553 $ 260.447 $ 14.879.419 $ 1.277.158 36.827 $ 6,307 $ 1.629.872 $ 27,859.671 $ 5.652.8481
80
CITY OF AUBURN: 2007 CAFR
NOTES TO THE FINANCIAL STATEMENTS
CHANGES IN LONG-TERM DEBT
I Issue Name Interest Maturity Original Principal Balance Balance Due Within
Rates Date Amount Installments 12/31/06 Additions Reductions 12/31/07 One Year
Governmental debt:
General obliaation bonds:
Limited G.O. library 3.75-5.00% 12/1/2018 4.000.000 $110.000 - $290.000 2.820.000 (185.000) 2.635.000 195.000
Valley Communication G.O. 4.30-5.75% 12/1/2015 2,551,600 $96.600 - $233,000 1.755.000 (160.000) 1,595.000 167,000
~general obligation bonds 6,551,600 4,575,000 (345.000) 4.230,000 362,000 I
Caoitallease:
IAuburn Avenue Theater (.1) 5.00% 12/31/2021 695,504 $5,500 695.504 (31,951) 663.553 33,5851
Emolovee leave benefit:
~!2ensated absences 2.895,752 1.253.442 (2.856,260) 1.292,934 1,158,1421
Public Works Trust Fund loans:
r~wrE 2~(a) 0.50% 7/1/2010 142,313 _$~,578 142.313 (35.578) 106.735 355i'81
Soecial assessment bonds:
[U.D. # 347 6.85% 5/1/2012 587~7 varies 36,827 36.827 -I
I Deferred charges related to debt (1.228) 102 (1,126) -.
I Total governmental 7,281,740 7.648.664 1.948.946 (3.268.687) 6.328.923 1,589,3051
Business-type debt:
General obliaation bonds
GO bond 1999 5.00-5.10% 11/1/2009 1.655,000 $45.000 - $65,000 175.000 (50.000) 125.000 60,000
GO refunding bond 2005 4.00-5.00% 12/1/2019 1.375.000 $10.000 - $190.000 1.345.000 1.345.000
GO bond 2006 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 1,840,000 (165,000) 1.675,000 175,000
ITotal GO bonds 8,190,000 6,635,000 (215,000) 6,420,000 235.000 1
Revenue bonds:
Utility sys. revenue 1997 (2) 5.50% 11/1/2007 5.000,000 $230.000 - $245.000 245.000 (245.000)
Utility sys. revenue 1999 (2) 5.00-5.10% 11/1/2009 8,345,000 $670,000 - $1,030,000 2.940,000 (930,000) 2,010,000 980,000
Utility sys. refunding bonds 2005 (2) 3.00-4.75% 11/1/2016 2.765,000 $45,000 - $355,000 2.720.000 2.720.000 255,000
ITotal revenue bonds 16,110,000 5.905.000 (1,175,000) 4.730.000 1.235,.QQQj
Emolovee leave benefit:
~p'ensated absences 489.525 326.593 (479.1801 336.938 301.811 ~
Public Works Trust Fund loans:
PwrF 1999 1.00% 7/1/2019 3.850.000 $182.368 2.370.789 (182.368) 2.188.421 182.368
PwrF 2001 0.50% 7/1/2021 4.290.405 $227,086 3.406.284 (227,086) 3.179,198 227.086
PwrF 2002 1.00% 7/1/2022 641.250 $26,114 417.832 (26,115) 391,717 26,114
PwrF 2004 0.50% 7/1/2024 2.156.880 $107.844 1.941,192 (107.844) 1.833.348 107,844
PwrF 2006(b) 0.50% 7/1/2025 1.575.000 $87,500 1.575.000 875.000 2.450.000 136.111
ITotal Public Works Trust Fund loans 12.513.535 9.711.097 875.000 (543.413) 10.042.684 679,5231
[Deferred charges related to debt (61,335) 37,829 (23,506) -I
Total proprietary 36,813,535 22.679,287 1.201.593 (2,374,764) 21.506.116 2.451.3341
Total all funds 44.095.275 30.327.951 3.150.539 (5.643.451) 27.835.039 4.040.639 ~
(1) Imputed interest rate of 5.00%.
(2) Subject to federal arbitrage rules.
LONG-TERM DEBT RECONCILIATION
Enterprise Governmental
Funds Funds 12/31/07
Liabilities payable from restricted assets:
Revenue bonds $ 885,610 $ $ 885,610
Long-term bonds payable:
General obligation bonds 6,420,000 4,230,000 10,650,000
Capital lease 663,553 663,553
Revenue bonds 3,844,390 3,844,390
Special assessments with 143,562 143,562
government commitment
Public Works Trust Fund loans 10,042,684 10,042,684
Employee leave benefits 336,938 1,292,934 1,629,872
Deferred charges (23,506) (1,126) (24,632)
ITotallong-term debt $ 21,506,116 $ 6,328,923 $ 27,835,039 I
81
CITY OF AUBURN: 2007 CAFR
NOTES TO THE FINANCIAL STATEMENTS
Revenue Bond Debt Service Coveraqe
The required debt service coverage for the 1999 utility revenue bonds and the 2005 utility
revenue refunding bonds is 1.25. Debt service coverage for 2007 was 2.85. Please refer to
Schedule 16 in the statistical section.
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.
NOTE 12 - CONSTRUCTION COMMITMENTS
At December 31, 2007 the City had the following contractual obligations on construction projects:
SCHEDULE OF OUTSTANDING CONSTRUCTION OBLIGATIONS
AS OF DECEMBER 31, 2007
Amount Outstanding
Traffic projects
Street projects
Utilities projects
rTotal commitments
$
211,471
596,062
655,407
1,462,940 I
$
NOTE 13-CEMETERYENDOWEDCAREFUND
The City maintains one permanent fund known as the cemetery endowed care fund. Paid into
this fund are 15% of all proceeds received from the sale 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 2007, of the $89,327 net appreciation on investments, $52,959 was available for expenditure,
and the rest was related to an unrealized gain on a long-term investment that matures in 2009.
Amounts that are available for expenditure are reflected as unrestricted net assets.
82
CITY OF AUBURN: 2007 CAFR
NOTES TO THE FINANCIAL STATEMENTS
NOTE 14 - JOINT VENTURE / RELATED PARTY
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 anyone 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 years 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.
The 2007 cost distribution for the five participating cities is as follows:
Dispatchable
Calls
Percent ofl
Total *
Renton
Kent
Auburn
Tukwila
Federal Way
ITotal
68,312
99,059
64,342
38,220
84,624
354,557
19.27%
27.94%
18.15%
10.78%
23.87%
100.00%1
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
83
CITY OF AUBURN: 2007 CAFR
NOTES TO THE FINANCIAL STATEMENTS
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, 2006 $ 3,981 ,550 $ 5,580,415 $3,701,815 $2,378,343 $ 2,048,504 $ 17,690,627
Current year change 162,657 277,142 147.875 50,612 223,394 861,680
Equity Dec 31, 2007 $ 4,144,207 $ 5,857,557 $ 3,849,690 $ 2,428,955 $ 2,271,898 $ 18,552,307
% of equity 22.34% 31.57% 20.75% 13.09% 12.25%
% of 2007 distribution 18.88% 32.16% 17.16% 5.87% 25.93%
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.
NOTE 15 - 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
84
CITY OF AUBURN: 2007 CAFR
NOTES TO THE FINANCIAL STATEMENTS
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. The City of Auburn designated a portion of its 2007 tax revenue
to support the VRFA for 2007 only. The amount of tax revenue paid to the VRFA was
$10,546,600 and is reflected in the general fund as an operating expenditure for security of
persons and property.
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 2007
Auburn paid $99,493 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 2007
was $126,745. Medical premiums and benefit payments made under the Fire Relief and Pension
Plan for 2007 were $144,356.
The City of Auburn acted as fiscal agent for the VRFA during 2007. Revenue and expenses of the
VRFA were accounted for in the City's agency fund.
NOTE 16 - CONTINGENCIES AND LITIGATION
As of December 31, 2007, 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 17 - RISK MANAGEMENT & INSURANCE
Risk Management
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 126
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 $3 million per occurrence self insured layer, and $12 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 $15 million per occurrence subject to
aggregate sublimits in the excess layers. The Board of Directors determines the limits and terms
of coverage annually.
85
CITY OF AUBURN: 2007 CAFR
NOTES TO THE FINANCIAL STATEMENTS
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
$500,000, for all perils other than flood and earthquake, and insured above that amount by the
purchase of reinsurance.
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, 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. These revenues
directly offset portions of the membership's annual assessment.
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 18 - SUBSEQUENT EVENTS
Annexation
At its January 16, 2007 meeting, the Auburn City Council passed resolutions initiating an
annexation election process for Auburn's Potential Annexation Areas (PAAs). The City Council
action included a 4.6 square mile area commonly referred to as Lea Hill, and a 1.8 square mile
area commonly referred to as West Hill, which were identified as PAAs in Auburn's
Comprehensive Plan more than a decade ago. On August 21,2007, the voters in the Lea Hill and
West Hill areas approved the resolutions to become annexed into the city limits of Auburn. With
certification of census data in December 2007 by the State of Washington, Office of Financial
Management, annexation of Lea Hill and West Hill became effective January 1, 2008.
As a result of annexation and an increase in the population of approximately 15,500 additional
residents, the City increased staffing to meet additional citizen needs. During 2008, as a result of
annexation, the City added sixteen commissioned police officers and forty other staff positions for
a total of fifty-six new positions. The impact on the City's budget due to the increase in personnel
costs and benefits, along with non-salary operating costs, resulted in an increase of $5,974,400 in
the general fund budget for 2008. The City is also planning for an increase in operating and
capital costs related to infrastructure maintenance, investment and replacement.
86
CITY OF AUBURN: 2007 CAFR
REQUIRED SUPPLEMENTAL INFORMATION
CITY OF AUBURN, WASHINGTON
SCHEDULE OF REVENUES, EXPENSES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
GENERAL FUND
FOR THE YEAR ENDED DECEMBER 31,2007
VARIANCE WITH
ORIGINAL FINAL FINAL BUDGET
BUDGET BUDGET ACTUAL POSITIVE
(GAAP BASIS) (GAAP BASIS) RESULTS (NEGATIVE)
REVENUES:
TAXES:
PROPERTY $ 14,700,000 $ 14,700,000 $ 15,166,016 $ 466,016
RETAIL SALES & USE 17,162,600 17,162,600 18,958,484 1,795,884
INTERFUND UTILITY 1,868,800 1,868,800 2,095,901 227,101
UTILITY 5,416,600 5,416,600 6,073,429 656,829
EXCISE 1,006,500 1,006,500 1,008,066 1,566
LICENSES AND PERMITS 1,721,000 1,721,000 1,606,950 (114,050)
INTERGOVERNMENTAL 2,862,500 3,736,100 3,451 ,594 (284,506)
CHARGES FOR SERVICES 1 ,758,500 2,138,500 2,663,788 525,288
FINES AND FORFEITURES 746,000 1,506,000 1,930,389 424,389
INVESTMENT EARNINGS 350,000 350,000 848,061 498,061
MISCELLANEOUS 351,100 548,100 786,146 238,046
ITOTAL REVENUES 47,943,600 50 154,200 54,588,824 4,434,~
EXPENDITURES:
CURRENT:
GENERAL GOVERNMENT 8,203,000 8,031,000 6,834,084 1,196,916
SECURITY OF PERSONS AND PROPERTY 32,573,800 33,854,300 32,798,206 1,056,094
PHYSICAL ENVIRONMENT 2,803,300 3,393,500 3,352,466 41,034
TRANSPORTATION 2,139,800 2,280,600 2,096,049 184,551
ECONOMIC ENVIRONMENT 1,807,800 2,556,900 1,872,312 684,588
HEALTH AND HUMAN SERVICES 592,200 599,700 416,456 183,244
CULTURE AND RECREATION 5,442,200 6,081,900 6,541 ,980 (460,080)
DEBT SERVICE 225,141 (225,141)
I TOTAL EXPENDITURES 53,562,100 56,797,900 54,136,694 2,661,2061
EXCESS (DEFICIENCY) OF REVENUES
~ER~(O~DERTEXPEN~TORES (5,618,500) . (6,643, 700) ~ 452,130 7]95,8301
OTHER FINANCING SOURCES (USES):
PROCEEDS FROM CAPITAL LEASE 695,504 695,504
TRANSFERS IN (Note 5) 1,017,000 1,048,220 1,047,733 (487)
TRANSFERS OUT (Note 5) (1,425,500) (2,397,200) (2,180,975) 216,225
I TOTAL OTHER FINANCING SOURCES AND USES (~500) (1,~~) (437,738) 911,~
NET CHANGE IN FUND BALANCES (6,027,000) (7,992,680) 14,392 8,007,072
FUND BALANCES - BEGINNING 10,712,125 14,448,328 14,448,328
IFUND BALANCES - ENDING $ 4,685,125 $ 6,455,648 $ 14,462,720 $ 8,007,0721
87
CITY OF AUBURN: 2007 CAFR
REQUIRED SUPPLEMENTAL INFORMATION
CITY OF AUBURN, WASHINGTON
SCHEDULE OF REVENUES, EXPENSES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
ARTE~ALSTREETFUND
FOR THE YEAR ENDED DECEMBER 31, 2007
VARIANCE WITH
ORIGINAL FINAL FINAL BUDGET
BUDGET BUDGET ACTUAL POSITIVE
(GAAP BASIS) (GAAP BASIS) RESULTS (NEGATIVE)
REVENUES:
INTERGOVERNMENTAL $ 4,516,000 $ 6,065,000 $ 1,635,666 $ (4,429,334)
INVESTMENT EARNINGS 50,000 50,000 63,434 13,434
MISCELLANEOUS 800,000 800,000 14,153 (785,847)
I TOTAL REVENUES 5~,000 6~,000 1,713,253 (5,201..H...7)J
EXPENDITURES:
CURRENT:
TRANSPORTA TION 7,599,000 10,322,000 3,396,595 6,925,405
DEBT SERVICE:
PRINCIPAL 35,578 (35,578)
INTEREST AND OTHER COSTS 297 (297)
I TOTAL EXPENDITURES 7,599,000 10,322,000 3,432,470 6,889,530 I
EXCESS (DEFICIENCY) OF REVENUES
I OVER (UNDER) EXPENDITURES (2,233,000) . (3,407,000) . (1,719,217) . 1,687,7831
OTHER FINANCING SOURCES (USES):
TRANSFERS IN (Note 5) 1,689,300 2,810,300 1,736,348 (1,073,952)
TOTAL OTHER FINANCING SOURCES AND USES 1,689,300 2,810,300 1,736,348 (1,073,952)J
NET CHANGE IN FUND BALANCES (543,700) (596,700) 17,131 613,831
FUND BALANCES - BEGINNING 702,331 792,347 824,331 31,984
IFUND BALANCES - ENDING $ 158,631 $ 195,647 $ 841 ,462 $ 645,8151
88
CITY OF AUBURN: 2007 CAFR
FUND FINANCIAL STATEMENTS AND SCHEDULES
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.
89
CITY OF AUBURN: 2007 CAFR
FUND FINANCIAL STATEMENTS AND SCHEDULES
CITY OF AUBURN, WASHINGTON
COMBINING BALANCE SHEET
NON-MAJOR GOVERNMENT FUNDS
DECEMBER 31, 2007
TOTAL TOT AL TOTAL TOTAL TOTAL
NONMAJOR NON MAJOR NON MAJOR NON MAJOR NONMAJOR
SPECIAL REVENUE DEBT SERVICE CAPITAL PROJ PERMANENT GOVERNMENT AL
FUNDS FUNDS FUNDS FUNDS FUNDS
ASSETS:
CASH AND CASH EQUIVALENTS 11,704,782 181,666 123,501 205,027 12,214,976
INVESTMENTS 1,000,938 1,285,323 2,286,261
RECEIVABLES:
SPECIAL ASSESSMENTS 703,809 703,809
DUE FROM OTHER GOVERNMENT AL UNITS 92,106 349,200 441,306
DEFERRED CHARGES 6,868 6,868
r---'TOTALAS'SETS 12,804,694 : $ 885,475 : $ 472,701 : $ 1,490,350 15,653,2201
LIABILITIES AND FUND BALANCES:
CURRENT PAY ABLES 442,495 134,722 577,217
INTERFUND PAYABLE (Note 5) 79,000 150,000 229,000
DEFERRED REVENUE 703,809 703,809
TOTAL LIABILITIES 521,495 703,809 284,722 1,510,0261
FUND BALANCES:
RESERVED FOR:
DEBT SERVICE 181,666 181,666
ENDOWMENT 1,319,367 1,319,367
UNRESERVED:
DESIGNATED FOR MITIGATION 4,960,078 4,960,078
UNDESIGNATED 7,323,121 187,979 170,983 7,682,083
TOT AL FUND BALANCES 12,283,199 181,666 187,979 1 ,490,350 14,143,1941
TOTAL LIABILITIES AND FUND BALANCES 12,804,694 885,475 472,701 1 ,490,350 15,653,220 I
90
CITY OF AUBURN: 2007 CAFR
FUND FINANCIAL STATEMENTS AND SCHEDULES
CITY OF AUBURN, WASHINGTON
COMBINING STATEMENT OF REVENUES. EXPENDITURES. AND CHANGES IN FUND BALANCES
NON-MAJOR GOVERNMENT FUNDS
FOR THE YEAR ENDED DECEMBER 31, 2007
TOTAL TOTAL TOTAL TOTAL TOTAL
NON MAJOR NONMAJOR NONMAJOR NON MAJOR NONMAJOR
SPECIAL REVENUE DEBT SERVICE CAPITAL PROJECTS PERMANENT GOVERNMENTAL
REVENUES:
TAXES
PROPERTY $ 500,000 $ $ $ $ 500,000
EXCISE 85,405 85,405
OTHER 65,129 65,129
INTERGOVERNMENTAL 217,724 431,500 649,224
CHARGES FOR SERVICES 2,279,710 23,074 50,652 2,353,436
FINES AND FORFEITURES 224,731 224,731
SPECIAL ASSESSMENTS 52,291 52,291
INVESTMENT EARNINGS 616,250 65,768 34,226 89,325 805,569
MISCELLANEOUS 14,616 36,653 51,269
I TOTAL REVENUES 4 003 565 118059 525 453 139 977 4,787,~
EXPENDITURES:
CURRENT
SECURITY OF PERSONS & PROPERTY 712,906 712,906
TRANSPORTATION 1,893,285 1,893,285
ECONOMIC ENVIRONMENT 269,970 269,970
CULTURAL AND RECREATION 29,295 29,295
DEBT SERVICE
PRINCIPAL 208,424 208,424
INTEREST 168,919 168,919
CAPITAL OUTLAY 1,919,253 1,919,253
l _TOT ~1.. EXP~r::!D!Itg,S _ 2,905,456 377.343 1,919,253 5,202,0521
EXCESS (DEFICIENCY) OF REVENUES
~(~) EXPENDITURES 1,098,109 (259,284) .. (1,393,800) . 139,977 (414,998)1
OTHER FINANCING SOURCES (USES):
TRANSFERS IN (Note 5) 1,660,097 377,011 367,155 2,404,263
TRANSFERS OUT (Note 5) (389,107) (80,510) (70,500) (540,117)
rTOTAL OT~ER~FINANCING SOURCES ANDUSES 1,270,990 296,501 367,155 (70 500) 1,864,1461
NET CHANGE IN FUND BALANCES 2,369,099 37,217 (1,026,645) 69,477 1,449,148
FUND BALANCES - BEGINNING 9,914,100 144,449 1,214,624 1,420,873 12,694,046
~FUND BALANCES - ENDING $ 12,283,199 $ 181,666 $ 187,979 $ 1,490,350 $ 14,143,1941
91
CITY OF AUBURN: 2007 CAFR
FUND FINANCIAL STATEMENTS AND SCHEDULES
*
*
*
*
* MORE THAN YOU IMAGINED
92
CITY OF AUBURN: 2007 CAFR
FUND FINANCIAL STATEMENTS AND SCHEDULES
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 ten 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.
Drug Forleiture Fund - Money seized and forfeited from drug activity is
deposited in this fund to be used exclusively for drug investigation and
enforcement.
Local Law Enforcement Block Grant - Accounts for police overtime relating
to community oriented policing.
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.
The Cumulative Reserve Fund - Created for the purpose of revenue
stabilization for future operations.
Mitigation Fees - Accounts for the receipt of contracted mitigation fees for
streets and fire service.
Special Parks and Recreation -- Accounts for funds that are donated to the
City for specific parks and recreation uses. This fund was closed at the end of
2007 with remaining amounts transferred to the general fund to be used for
related projects in 2008.
93
CITY OF AUBURN: 2007 CAFR
FUND FINANCIAL STATEMENTS AND SCHEDULES
94
CITY OF AUBURN: 2007 CAFR
FUND FINANCIAL STATEMENTS AND SCHEDULES
Page 2 of 2
TOTAL
HOUSING BUSINESS NON MAJOR
COMMUNITY RECREATION IMPROVEMENT CUMULATIVE MITIGATION SPECIAL REVENUE
DEVELOPMENT TRAILS AREA RESERVE FEES FUNDS
$ 92,222 $ 31,594 $ 46,558 $ 4,962,030 $ 5,439,108 $ 11,704,782
1,000,938 1,000,938
63,106 92,106
6,868
1$ 155,328 $ 31,594 $ 46,558 $ 5,962,968 $ 5,439,108 $ 12,804,6941
$ 86,097 $ $ $ $ 319,063 $ 442,495
59,000 79,000
145,097 319,063 521,495 I
4,960,078 4,960,078
10,231 31,594 46,558 5,962,968 159,967 7,323,121
10,231 31,594 46,558 5,962,968 5,120,045 12,283,199
h 155,328 $ 31,594 $ 46,558 $ 5,962,968 $ 5,439,108 $ 12,804,6941
95
CITY OF AUBURN: 2007 CAFR
FUND FINANCIAL STATEMENTS AND SCHEDULES
CITY OF AUBURN, WASHINGTON
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
NONMAJOR SPECIAL REVENUE FUNDS
FOR THE YEAR ENDED DECEMBER 31,2007
Page 1 of 2
HOTEL! LOCAL LAW HOUSING
LOCAL MOTEL DRUG ENFORCEMENT COMMUNITY
STREETS TAX FORFEITURE GRANT DEVELOPMENTI
REVENUES:
TAXES
PROPERTY $ 500,000 $ $ $ $
EXCISE 85,405
OTHER
INTERGOVERNMENTAL 15,573 29,000 173,151
CHARGES FOR SERVICES
FINES AND FORFEITURES 224,731
INVESTMENT EARNINGS 26,468 3,495 28,044 507
MISCELLANEOUS
1 TOTAL REVENUES 526,468 88,900 268,348 29,507 173,J21.J
EXPENDITURES:
CURRENT
SECURITY OF PERSONS & PROPERTY 240,273 29,000
TRANSPORTATION 1,893,285
ECONOMIC ENVIRONMENT 63,628 174,067
CULTURAL AND RECREATION
1 TOTAL EXPENDITURES 1,893,285 63,628 240,273 29,000 174,0671
EXCESS (DEFICIENCY) OF REVENUES
~(UNDER) EXPENDITURES (1,366,817) ~ 25,272 28,075 507 (916)'
OTHER FINANCING SOURCES (USES):
TRANSFERS IN (Note 5) 1,586,100 2,600
TRANSFERS OUT (Note 5)
rT'6TAL5T~ER~FINANCING SOURCES'ANDUSES-- 1,586,100 2,600 -.
NET CHANGE IN FUND BALANCES 219,283 25,272 28,075 3,107 (916)
FUND BALANCES - BEGINNING 222,158 62,122 542,632 9,154 11,147
:FUND BALANCES - ENDING $ 441,441 $ 87,394 $ 570.707 $ 12,261 $ 10,2311
96
CITY OF AUBURN: 2007 CAFR
FUND FINANCIAL STATEMENTS AND SCHEDULES
Page 2 of 2
TOTAL
BUSINESS SPECIAL NON MAJOR
RECREA TION IMPROVEMENT CUMULATIVE MITIGATION PARKS AND SPECIAL REVENUE
TRAILS AREA RESERVE FEES RECREATION FUNDS
$ $ $ $ $ $ 500,000
85,405
65,129 65,129
217,724
2,279,710 2,279,710
224,731
1,497 1,325 320,781 234,133 616,250
14,616 14,616
1,497 66,454 320,781 2,lli843 14,616 4,003,5651
443,633 712,906
1,893,285
32,275 269,970
29,295 29,295
32,275 443,633 29,295 2,905,4561
1,497 34,179 320,781 2,070,210 (14,679) _ 1,098,1091
5,100 66,297 1,660,097
(358,374) (30,733) (389,107)
5,100 (292 077) : (30733) : 1,270,990 .
6,597 34,179 320,781 1,778,133 (45,412) 2,369,099
24,997 12,379 5,642,187 3,341,912 45,412 9,914,100
h 31,594 $ 46,558 $ 5,962,968 $ 5,120,045 $ $ 12,283,1991
97
CITY OF AUBURN: 2007 CAFR
FUND FINANCIAL STATEMENTS AND SCHEDULES
CITY OF AUBURN, WASHINGTON
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
LOCAL STREETS SPECIAL REVENUE FUND
FOR THE YEAR ENDED DECEMBER 31, 2007
VARIANCE WITH
ORIGINAL FINAL FINAL BUDGET
BUDGET BUDGET ACTUAL POSITIVE
(GAAP BASIS) (GAAP BASIS) RESULTS (NEGATIVE)
REVENUES:
TAXES:
PROPERTY $ 500,000 $ 500,000 $ 500,000 $
INVESTMENT EARNINGS 20,000 20,000 26,468 6,468
I TOTAL REVENUES 520,000 520,000 526,468 6,468 I
EXPENDITURES:
CURRENT:
TRANSPORTATION 1,200,000 2,111,100 1,893,285 217,815
I TOTAL EXPENDITURES 1,200,000 2,111,100 1,893,285 217,8151
EXCESS (DEFICIENCY) OF REVENUES
I OVER (~) EXPENDITURES (680,000) ~ (1,591, 100) ~ (1 ,366,817) ~ 224,283 1
OTHER FINANCING SOURCES (USES):
TRANSFERS IN (Note 5) 675,000 1,586,100 1,586,100
I TOTAL OTHER FINANCING SOURCES AND USES 675,000 1,586,100 1,586,100 -I
NET CHANGE IN FUND BALANCES (5,000) (5,000) 219,283 224,283
FUND BALANCES - BEGINNING 46,520 222,158 222,158
:F~D.BALANCE~ENDING $ 41,520 : $ 217,158 : $ 441,441 : $ 224,283 I
98
CITY OF AUBURN: 2007 CAFR
FUND FINANCIAL STATEMENTS AND SCHEDULES
CITY OF AUBURN, WASHINGTON
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
HOTEL/MOTEL TAX SPECIAL REVENUE FUND
FOR THE YEAR ENDED DECEMBER 31, 2007
ORIGINAL FINAL
BUDGET BUDGET
(GAAP BASIS) (GAAP BASIS)
ACTUAL
RESULTS
VARIANCE WITH
FINAL BUDGET
POSITIVE
(NEGATIVE)
REVENUES:
TAXES:
EXCISE
INVESTMENT EARNINGS
I TOTAL REVENUES
$
60,000 $
1,000
61,000
70,000 $
2,500
72,500
85,405 $
3,495
88,900
15,405
995
16,400 I
EXPENDITURES:
CURRENT:
ECONOMIC ENVIRONMENT
I TOTAL EXPENDITURES
EXCESS (DEFICIENCY) OF REVENUES
lOVER (UNDER) EXPENDITURES
70,000 100,300 63,628 36,672
70,000 100,300 63,628 36,672 I
(9,000) ~ (27,800) ~ 25,272 53,072 I
(9,000) (27,800) 25,272 53,072
40,717 62,122 62,122
$ 31,717 $ 34,322 $ 87,394 $ 53,072 I
NET CHANGE IN FUND BALANCES
FUND BALANCES - BEGINNING
.FUND BALANCES - ENDING
99
CITY OF AUBURN: 2007 CAFR
FUND FINANCIAL STATEMENTS AND SCHEDULES
CITY OF AUBURN, WASHINGTON
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
DRUG FORFEITURE SPECIAL REVENUE FUND
FOR THE YEAR ENDED DECEMBER 31, 2007
VARIANCE WITH
ORIGINAL FINAL FINAL BUDGET
BUDGET BUDGET ACTUAL POSITIVE
(GAAP BASIS) (GAAP BASIS) RESULTS (NEGATIVE)
$ $ 15,000 $ 15,573 $ 573
200,000 250,000 224,731 (25,269)
15,000 15,000 28,044 13,044
215,000 280,000 268,348 (11,652)J
REVENUES:
INTERGOVERNMENTAL
FINES AND FORFEITURES
INVESTMENT EARNINGS
I TOTAL REVENUES
EXPENDITURES:
CURRENT:
SECURITY OF PERSONS & PROPERTY
I TOTAL EXPENDITURES
EXCESS (DEFICIENCY) OF REVENUES
lOVER (UNDER) EXPENDITURES
259,500 343,000 240,273 102,727
259,500 343,000 240,273 102,7271
(44,500) . (63,000) . 28,075 91,0751
(44,500) (63,000) 28,075 91,075
542,245 542,632 542,632
$ 497,745 $ 479,632 $ 570,707 $ 91,0751
NET CHANGE IN FUND BALANCES
FUND BALANCES - BEGINNING
.FUND BALANCES - ENDING
100
CITY OF AUBURN: 2007 CAFR
FUND FINANCIAL STATEMENTS AND SCHEDULES
CITY OF AUBURN, WASHINGTON
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
LOCAL LAW ENFORCEMENT GRANT SPECIAL REVENUE FUND
FOR THE YEAR ENDED DECEMBER 31, 2007
VARIANCE WITH
ORIGINAL FINAL FINAL BUDGET
BUDGET BUDGET ACTUAL POSITIVE
(GAAP BASIS) (GAAP BASIS) RESULTS (NEGATIVE)
REVENUES:
INTERGOVERNMENTAL $ 26,300 $ 26,300 $ 29,000 $ 2,700
INVESTMENT EARNINGS 100 100 507 407
I TOTAL REVENUES 26,400 26,400 29,507 3,1071
EXPENDITURES:
CURRENT:
SECURITY OF PERSONS & PROPERTY 29,000 29,000 29,000
I TOTAL EXPENDITURES 29,000 29,000 29,000 -I
EXCESS (DEFICIENCY) OF REVENUES
I OVER (UNDER) EXPENDITURES (2,600) _ (2,600) _ 507 3,1071
OTHER FINANCING SOURCES (USES):
TRANSFERS IN (Note 5) 2,600 2,600 2,600
I TOTAL OTHER FINANCING SOURCES AND USES 2,600 2,600 2,600 -I
NET CHANGE IN FUND BALANCES 3,107 3,107
FUND BALANCES - BEGINNING 6,295 9,154 9,154
.FUND BALANCES - ENDING $ 6,295 $ 9,154 $ 12,261 $ 3,1071
101
CITY OF AUBURN: 2007 CAFR
FUND FINANCIAL STATEMENTS AND SCHEDULES
CITY OF AUBURN, WASHINGTON
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
HOUSING & COMMUNITY DEVELOPMENT SPECIAL REVENUE FUND
FOR THE YEAR ENDED DECEMBER 31, 2007
ORIGINAL FINAL
BUDGET BUDGET
(GAAP BASIS) (GAAP BASIS)
ACTUAL
RESULTS
VARIANCE WITH
FINAL BUDGET
POSITIVE
(NEGATIVE)
REVENUES:
INTERGOVERNMENTAL
I TOTAL REVENUES
$ 509,800 $
509,800
509,800 $
509,800
173,151 $
173,151
(336,649)
(336,649)J
EXPENDITURES:
CURRENT:
ECONOMIC ENVIRONMENT
I TOTAL EXPENDITURES
EXCESS (DEFICIENCY) OF REVENUES
lOVER (UNDER) EXPENDITURES
520,737 520,737 174,067 346,670
520,737 520,737 174,067 346,670 I
(10,937) _ (10,937) _ (916) . 10,021 I
(10,937) (10,937) (916) 10,021
10,937 11,147 11,147
$ $ 210 $ 10,231 $ 10,021 I
NET CHANGE IN FUND BALANCES
FUND BALANCES - BEGINNING
.FUND BALANCES - ENDING
102
CITY OF AUBURN: 2007 CAFR
FUND FINANCIAL STATEMENTS AND SCHEDULES
CITY OF AUBURN, WASHINGTON
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
RECREATION TRAILS SPECIAL REVENUE FUND
FOR THE YEAR ENDED DECEMBER 31, 2007
VARIANCE WITH
ORIGINAL FINAL FINAL BUDGET
BUDGET BUDGET ACTUAL POSITIVE
(GAAP BASIS) (GAAP BASIS) RESULTS (NEGATIVE)
REVENUES:
INVESTMENT EARNINGS $ 800 $ 800 $ 1,497 $ 697
I TOTAL REVENUES 800 800 1,497 6971
EXCESS (DEFICIENCY) OF REVENUES
I OVER (UNDER) EXPENDITURES 800 800 1,497 6971
OTHER FINANCING SOURCES (USES):
TRANSFERS IN (Note 5) 5,100 5,100 5,100
I TOTAL OTHER FINANCING SOURCES AND USES 5,100 5,100 5,100 -I
NET CHANGE IN FUND BALANCES 5,900 5,900 6,597 697
FUND BALANCES - BEGINNING 24,724 24,997 24,997
.FUND BALANCES - ENDING $ 30,624 $ 30,897 $ 31,594 $ 6971
103
CITY OF AUBURN: 2007 CAFR
FUND FINANCIAL STATEMENTS AND SCHEDULES
CITY OF AUBURN, WASHINGTON
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
BUSINESS IMPROVEMENT AREA SPECIAL REVENUE FUND
FOR THE YEAR ENDED DECEMBER 31, 2007
ORIGINAL FINAL
BUDGET BUDGET
(GAAP BASIS) (GAAP BASIS)
ACTUAL
RESULTS
VARIANCE WITH
FINAL BUDGET
POSITIVE
(NEGATIVE)
REVENUES:
TAXES:
OTHER
INVESTMENT EARNINGS
I TOTAL REVENUES
$
53,000 $
500
53,500
53,000 $
500
53,500
65,129 $
1,325
66,454
12,129
825
12,9541
EXPENDITURES:
CURRENT:
ECONOMIC ENVIRONMENT
I TOTAL EXPENDITURES
EXCESS (DEFICIENCY) OF REVENUES
lOVER (UNDER) EXPENDITURES
53,500 53,500 32,275 21,225
53,500 53,500 32,275 21,2251
34,179 34,1791
34,179 34,179
101 12,379 12,379
$ 101 $ 12,379 $ 46,558 $ 34,1791
NET CHANGE IN FUND BALANCES
FUND BALANCES - BEGINNING
.FUND BALANCES - ENDING
104
CITY OF AUBURN: 2007 CAFR
FUND FINANCIAL STATEMENTS AND SCHEDULES
CITY OF AUBURN, WASHINGTON
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
CUMULATIVE RESERVE SPECIAL REVENUE FUND
FOR THE YEAR ENDED DECEMBER 31, 2007
VARIANCE WITH
ORIGINAL FINAL FINAL BUDGET
BUDGET BUDGET ACTUAL POSITIVE
(GAAP BASIS) (GAAP BASIS) RESULTS (NEGATIVE)
REVENUES:
INVESTMENT EARNINGS $ 180,000 $ 180,000 $ 320,781 $ 140,781
I TOTAL REVENUES 180,000 180,000 320,781 140,781 I
EXCESS (DEFICIENCY) OF REVENUES
I OVER (UNDER) EXPENDITURES 180,000 180,000 320,781 140,781 I
OTHER FINANCING SOURCES (USES):
TRANSFERS OUT (Note 5) (1,151,900) (10,000) 10,000
I TOTAL OTHER FINANCING SOURCES AND USES (1,151,900) ~ (10,000) ~ 10,000 I
NET CHANGE IN FUND BALANCES (971,900) 170,000 320,781 150,781
FUND BALANCES - BEGINNING 5,567,883 5,642,187 5,642,187
.FUND BALANCES - ENDING $ 4,595,983 $ 5,812,187 $ 5,962,968 $ 150,781 I
105
CITY OF AUBURN: 2007 CAFR
FUND FINANCIAL STATEMENTS AND SCHEDULES
CITY OF AUBURN, WASHINGTON
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
MITIGATION SPECIAL REVENUE FUND
FOR THE YEAR ENDED DECEMBER 31, 2007
VARIANCE WITH
ORIGINAL FINAL FINAL BUDGET
BUDGET BUDGET ACTUAL POSITIVE
(GAAP BASIS) (GAAP BASIS) RESULTS (NEGATIVE)
REVENUES:
CHARGES FOR SERVICES $ 720,000 $ 1,320,000 $ 2,279,710 $ 959,710
INVESTMENT EARNINGS 50,000 50,000 234,133 184,133
I TOTAL REVENUES 770,000 1,370,000 2,513,843 1,143,8431
EXPENDITURES:
CURRENT:
SECURITY OF PERSONS & PROPERTY 443,633 (443,633)
I TOTAL EXPENDITURES 443,633 (443,633~
EXCESS (DEFICIENCY) OF REVENUES
I OVER (~) EXPENDITURES 770,000 ~ 1 ,370,000 ~ 2,070,210 700,210 I
OTHER FINANCING SOURCES (USES):
TRANSFERS IN (Note 5) 66,300 66,297 (3)
TRANSFERS OUT (Note 5) (895,000) (2,268,400) (358,374) 1,910,026
I TOTAL OTHER FINANCING SOURCES AND USES (895,000) : (2,202,100< (292,077) : 1,910,023 I
NET CHANGE IN FUND BALANCES (125,000) (832,100) 1,778,133 2,610,233
FUND BALANCES - BEGINNING 3,036,295 3,341,912 3,341,912
.FUND BALANCES - ENDING $ 2,911,295 $ 2,509,812 $ 5,120,045 $ 2,610,2331
106
CITY OF AUBURN: 2007 CAFR
FUND FINANCIAL STATEMENTS AND SCHEDULES
CITY OF AUBURN, WASHINGTON
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
SPECIAL PARKS AND RECREATION SPECIAL REVENUE FUND
FOR THE YEAR ENDED DECEMBER 31, 2007
VARIANCE WITH
ORIGINAL FINAL FINAL BUDGET
BUDGET BUDGET ACTUAL POSITIVE
(GAAP BASIS) (GAAP BASIS) RESULTS (NEGATIVE)
REVENUES:
MISCELLANEOUS $ $ 15,100 $ 14,616 $ (484)
I TOTAL REVENUES 15,100 14,616 (484tl
EXPENDITURES:
CURRENT:
CULTURAL AND RECREATION 41,154 29,292 29,295 (3)
I TOTAL EXPENDITURES 41,154 29,292 29,295 (3)1
EXCESS (DEFICIENCY) OF REVENUES
I OVER (~) EXPENDITURES (41,154) ~ (14,192) ~ (14,679) (487)1
OTHER FINANCING SOURCES (USES):
TRANSFERS OUT (Note 5) (31,220) (30,733) 487
I TOTAL OTHER FINANCING SOURCES AND USES (31,220) (30,733) 4871
NET CHANGE IN FUND BALANCES (41,154) (45,412) (45,412)
FUND BALANCES - BEGINNING 41,154 45,412 45,412
.FUND BALANCES - ENDING $ $ $ $ -I
107
CITY OF AUBURN: 2007 CAFR
FUND FINANCIAL STATEMENTS AND SCHEDULES
*
*
*
*
* MORE THAN YOU IMAGINED
108
CITY OF AUBURN: 2007 CAFR
FUND FINANCIAL STATEMENTS AND SCHEDULES
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 1998 General Obligation Library Bonds - Accounts for debt service on
a Council-approved bond issue to finance, in conjunction with King County, the
construction of a new library in the City.
The L.I.D. Guarantee Fund - This fund provides financial security for out-
standing 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.
109
CITY OF AUBURN: 2007 CAFR
FUND FINANCIAL STATEMENTS AND SCHEDULES
ASSETS:
CASH AND CASH EQUIVALENTS
RECEIVABLES
SPECIAL ASSESSMENTS
~TOT'Ai:"'i\sSETS
CITY OF AUBURN, WASHINGTON
COMBINING BALANCE SHEET
DEBT SERVICE FUNDS
DECEMBER 31, 2007
TOTAL
1998 GO NON MAJOR
LIBRARY LID SPECIAL DEBT SERVICE
BOND DEBT GUARANTEE ASSESSMENTS FUNDS
$ 35,810 $ 115,023 $ 30,833 $ 181,666
703,809 703,809
$ 35,810 : $ 115,023 $ 734,642 : $ 885,4751
$ $ $ 703,809 $ 703,809
703,809 703,~
35,810 30,833 66,643
115,023 115,023
35,810 115,023 30,833 181,2ffiJ
$ 35,810 $ 115,023 $ 734,642 $ 885,4751
LIABILITIES AND FUND BALANCES:
DEFERRED REVENUE
TOTAL LIABILITIES
FUND BALANCES
RESERVED FOR
DEBT SERVICE
LID GUARANTEE
TOTAL FUND BALANCES
TOTAL LIABILITIES AND FUND BALANCES
110
CITY OF AUBURN: 2007 CAFR
FUND FINANCIAL STATEMENTS AND SCHEDULES
CITY OF AUBURN, WASHINGTON
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE
NONMAJOR DEBT SERVICE FUNDS
FOR THE YEAR ENDED DECEMBER 31, 2007
TOTAL
1998 G.O. NON MAJOR
LIBRARY LID SPECIAL DEBT SERVICE
BOND DEBT GUARANTEE ASSESSMENTS FUNDS
REVENUES:
TAXES:
SPECIAL ASSESSMENTS $ $ $ 52,291 $ 52,291
INVESTMENT EARNINGS 10,378 2,509 52,881 65,768
I TOTAL REVENUES 10,378 2,509 105,172 118,0591
EXPENDITURES:
DEBT SERVICE
PRINCIPAL 185,000 23,424 208,424
INTEREST 121,440 47,479 168,919
TOTAL EXPENDITURES 306,440 70,903 377,3431
EXCESS (DEFICIENCY) OF REVENUES
I OVER (UNDER) EXPENDITURES (296,062) 2,509 34,269 (259,284)1
OTHER FINANCING SOURCES (USES):
TRANSFERSIN(N~e~ 306,500 70,511 377,011
TRANSFERS OUT (Note 5) (10,000) (70,510) (80,510)
I ~ 296,501 1
TOTAL OTHER FINANCING SOURCES AND USES 306,500 60,511 (70,510) ~
NET CHANGE IN FUND BALANCES 10,438 63,020 (36,241) 37,217
FUND BALANCES - BEGINNING 25,372 52,003 67,074 144,449
IFUND BALANCES - ENDING $ 35,810 $ 115,023 $ 30,833 $ 181,6661
111
CITY OF AUBURN: 2007 CAFR
FUND FINANCIAL STATEMENTS AND SCHEDULES
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 one non-major capital project fund.
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.
112
CITY OF AUBURN: 2007 CAFR
FUND FINANCIAL STATEMENTS AND SCHEDULES
CITY OF AUBURN, WASHINGTON
BALANCE SHEET
CAPITAL PROJECT FUND
DECEMBER 31,2007
MUNICIPAL
PARK
CONSTRUCTION
ASSETS:
CASH AND CASH EQUIVALENTS
DUE FROM OTHER GOVERNMENTAL UNITS
TOTAL ASSETS
LIABILITIES AND FUND BALANCES:
CURRENT PAYABLES
INTERFUND PAYABLE (Note 5)
TOTAL LIABILITIES
FUND BALANCES:
UNRESERVED
UNDESIGNATED
TOTAL FUND BALANCES
$
123,501
349,200
472,701 1
$
$
134,722
150,000
284,7221
187,979
187,9791
TOTAL LIABILITIES AND FUND BALANCES
113
$
472,701 I
CITY OF AUBURN: 2007 CAFR
FUND FINANCIAL STATEMENTS AND SCHEDULES
CITY OF AUBURN, WASHINGTON
STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES
CAPITAL PROJECT FUND
FOR THE YEAR ENDED DECEMBER 31,2007
MUNICIPAL
PARK
CONSTRUCTION
$
431 ,500
23,074
34,226
36,653
525,4531
REVENUES:
I NTERGOVERNMENT AL
CHARGES FOR SERVICES
INVESTMENT EARNINGS
MISCELLANEOUS
I TOTAL REVENUES
EXPENDITURES:
CAPITAL OUTLAY
I TOTAL EXPENDITURES
EXCESS (DEFICIENCY) OF REVENUES
lOVER (UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES):
TRANSFERS IN (Note 5)
,TOTAL OTHER FINANCING SOURCES AND USES
NET CHANGE IN FUND BALANCES
FUND BALANCES - BEGINNING
IFUND BALANCES - ENDING
114
1,919,253
1,919,2531
(1,393,800)1
367,155
367,1551
(1,026,645)
$
1,214,624
187,9791
CITY OF AUBURN: 2007 CAFR
FUND FINANCIAL STATEMENTS AND SCHEDULES
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.
115
CITY OF AUBURN: 2007 CAFR
FUND FINANCIAL STATEMENTS AND SCHEDULES
CITY OF AUBURN, WASHINGTON
BALANCE SHEET
PERMANENT FUND
DECEMBER 31,2007
CEMETERY
ENDOWED
CARE
ASSETS:
CASH AND CASH EQUIVALENTS
NON-EXPENDABLE TRUST $ 205,027
INVESTMENTS 1 ,285,323
TOTAL ASSETS $ 1,490,350 I
FUND BALANCES:
RESERVED FOR:
ENDOWMENT $ 1,319,367
UNRESERVED
UNDESIGNATED 170,983
TOTAL FUND BALANCES 1,490,350 I
TOTAL LIABILITIES AND FUND BALANCES $ 1,490,350 I
116
CITY OF AUBURN: 2007 CAFR
FUND FINANCIAL STATEMENTS AND SCHEDULES
CITY OF AUBURN, WASHINGTON
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE
PERMANENT FUND
FOR THE YEAR ENDED DECEMBER 31,2007
CEMETERY
ENDOWED
CARE
REVENUES:
INCREASE TO ENDOWMENT FROM LOT SALES
INVESTMENT EARNINGS
I TOTAL REVENUES
IEXCESS OF REVENUES OVER EXPENDITURES
OTHER FINANCING SOURCES (USES):
TRANSFERS OUT (Note 5)
I TOTAL OTHER FINANCING SOURCES AND USES
NET CHANGE IN FUND BALANCE
FUND BALANCE - BEGINNING
IFUND BALANCE - ENDING
117
$
50,652
89,325
139,9771
139,9771
(70,500)
(70,500)1
69,477
$
1,420,873
1,490,350 I
CITY OF AUBURN: 2007 CAFR
FUND FINANCIAL STATEMENTS AND SCHEDULES
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 three 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.
The Commercial Retail Fund - Accounts for revenues and expenses related
to City-owned or leased property that is rented to commercial tenants.
118
CITY OF AUBURN: 2007 CAFR
FUND FINANCIAL STATEMENTS AND SCHEDULES
CITY OF AUBURN, WASHINGTON
COMBINING STATEMENT OF NET ASSETS
NON-MAJOR ENTERPRISE FUNDS
DECEMBER 31,2007
TOT AL
NON MAJOR
COMMERCIAL ENTERPRISE
CEMETERY RET AIL FUNDS
710,181 988,467 2,605,691
77,366
3,910
8,968 8,968
719",149 988,467 2,~,W
73,416 73,416
36,641 3,689,984
1,024,112 1,737,398 5,237,684
1,082,094 356,229 6,628,275
141,740
(1,020,635) (1,107,218) (6,075,340)
1,122,212 986,409 9,622,343
1 195,628 986,409 9,695,~
1,914,777 1,974,876 12,391,693...l
42,085 7,310 58,961
77,365
16,540 18,813
60,000
58,625 7310 215,j1gJ
73,416 73,416
1,925 2,190
499,361 1,812,382
574,702 1,887,988 I
633,327 7,310 2,103,1ll...l
622,851 986,409 7,749,961
658,599 981,157 2,538,606
1,281,450 1,967,566 10,288,5671
AIRPORT
ASSETS:
CURRENT ASSETS:
CASH AND CASH EQUIVALENTS
RESTRICTED CASH:
CUSTOMER DEPOSITS
CUSTOMER ACCOUNTS
INVENTORIES
TOTAL CURRENT ASSETS
907,043
77,366
3,910
988,319
NONCURRENT ASSETS:
LONG-TERM CONTRACTS AND NOTES
CAPIT AL ASSETS:
LAND
BUILDINGS AND EQUIPMENT
IMPROVEMENTS OTHER THAN BUILDINGS
CONSTRUCTION IN PROGRESS
LESS: ACCUMULATED DEPRECIATION
TOT AL CAPITAL ASSETS (NET OF AID)
3,653,343
2,476,174
5,189,952
141,740
(3,947,487)
7,513,722
TOT AL NONCURRENT ASSETS
7,513,722
TOT AL ASSETS
8,502,041
LIABILITIES:
CURRENT LIABILITIES:
CURRENT PAY ABLES
CUSTOMER DEPOSITS
EMPLOYEE LEAVE BENEFITS-CURRENT
GENERAL OBLIGATION BONDS PAY ABLE-CURRENT
TOT AL CURRENT LIABILITIES
9,566
77,365
2,273
60,000
149,204
NONCURRENT LIABILITIES:
DEFERRED REVENUE
EMPLOYEE LEAVE BENEFITS
GENERAL OBLIGATION BONDS PAYABLE
TOTAL NONCURRENT LIABILITIES
265
1,313,021
1,313,286
TOTAL LIABILITIES
1,462,490
NET ASSETS:
INVESTED IN CAPITAL ASSETS, NET OF RELATED DEBT
UNRESTRICTED
TOTAL NET ASSETS
6,140,701
898,850
7,039,551
119
CITY OF AUBURN: 2007 CAFR
FUND FINANCIAL STATEMENTS AND SCHEDULES
CITY OF AUBURN, WASHINGTON
COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS
NON MAJOR ENTERPRISE FUNDS
FOR THE YEAR ENDED DECEMBER 31,2007
TOTAL
NONMAJOR
COMMERCIAL ENTERPRISE
AIRPORT CEMETERY RETAIL FUNDS
OPERATING REVENUES:
CHARGES FOR SERVICES $ 660,028 $ 740,042 $ $ 1,400,070
INTEREST 2,471 2,471
OTHER OPERATING REVENUE 54,091 54,091
~TOTAL OPERATjj\jGRE~ENUES 660,028 742,513 : 54,091 : 1,456,632 I
OPERATING EXPENSES:
OPERATIONS & MAINTENANCE 3,754 599,347 30,265 633,366
ADMINISTRATION 353,821 197,082 2,475 553,378
DEPRECIA TIONiAMORTIZA TION 246,349 78,330 119,327 444,006
OTHER OPERATING EXPENSES 199 9,676 9,875
I TOTAL OPERATING EXPENSES 604,123 884,435 152,067 1,640,625 I
.OPERATING INCOME (LOSS) 55,905 (141,922). (97,976) . (183,993)1
NON-OPERATING REVENUE (EXPENSE):
INTEREST REVENUE 44,816 40,770 16,581 102,167
OTHER NON-OPERATING REVENUES 109,255 33,592 142,847
GAIN (LOSS) ON SALE OF CAPITAL ASSETS (1,050) (1,050)
INTEREST EXPENSE (76,463) (15,336) (91,799)
OTHER NON-OPERATING EXPENSES (2,694) (2,694)
I TOTAL NON-OPERATING REVENUE (EXPENSE) 76,558 56,332 16,581 149,471 I
INCOME (LOSS) BEFORE TRANSFERS 132,463 (85,590) _ (81,395) _ (34,522)1
TRANSFERS IN (Note 5) 70,500 70,500
I CHANGE IN NET ASSETS 132,463 (15,090) (81,395) 35,978 I
TOTAL NET ASSETS BEGINNING OF YEAR 6,907,088 1 ,296,540 2,048,961 10,252,589
. 10,288,5671
ITOTAL NET ASSETS END OF YEAR $ 7,039,551 $ 1,281,450 $ 1,967,566 $
120
CITY OF AUBURN: 2007 CAFR
FUND FINANCIAL STATEMENTS AND SCHEDULES
CITY OF AUBURN, WASHINGTON
COMBINING STATEMENT OF CASH FLOWS
NON MAJOR ENTERPRISE FUNDS
FOR THE FISCAL YEAR ENDED DECEMBER 31,2007
Page 1 of 2
TOTAL
NON MAJOR
COMMERCIAL ENTERPRISE
AIRPORT CEMETERY RETAIL FUNDS
CASH FLOWS FROM OPERATING ACTIVITIES:
CASH RECEIVED FROM USERS $ 671,466 $ 742,513 $ 50,825 $ 1,464,804
CASH PAID TO SUPPLIERS (336,456) (357,210) (36,977) (730,643)
CASH PAID FOR TAXES (199) (9,676) (9,875)
CASH PAID FOR INVENTORY 2,552 2,552
CASH PAID TO EMPLOYEES (21,184) (496,659) (517,843)
NET CASH PROVIDED (USED) 208,9951
BY OPERATING ACTIVITIES 313,627 (118,480) 13,848
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
TRANSFERS IN 67,807 67,807
NET CASH PROVIDED (USED) BY NON-
CAPITAL FINANCING ACTIVITIES 67,807 67,807
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES:
PROCEEDS FROM SALE OF EQUIPMENT 640,844 640,844
PURCHASE OF CAPITAL ASSETS (133,038) (414,144) (547,182)
PROCEEDS FROM OTHER GOVERNMENTS 109,255 109,255
PREMIUM & BOND ISSUANCE COSTS 4,835 4,835
PRINCIPAL PAYMENT ON DEBT (45,062) (45,062)
INTEREST PAYMENT ON DEBT (76,463) (15,808) (92,271)
OTHER CASH RECEIVED (PAID) 33,592 33,592
NET CASH PROVIDED (USED) FOR CAPITAL 104,011 1
AND RELATED FINANCING ACTIVITIES (140,473)_(396,360) 640,844
CASH FLOW FROM INVESTING ACTIVITIES:
INTEREST RECEIVED 44,817 40,770 16,581 102,168
I NET CASH PROVIDED (~) IN INVESTING ACTIVITIES 44,817 40,770 16,581 102,168 I
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 217,971 (406,263) 671,273 482,981
CASH AND CASH EQUIVALENTS-BEGINNING OF YEAR 766,438 1,116,444 317,194 2,200,076
I CASH AND CASH EQUIVALENTS-END OF YEAR $ 984,409 $ 710,181 $ 988,467 $ 2,683,057 I
CASH AT END OF YEAR CONSISTS OF:
CASH AND CASH EQUIVALENTS $ 907,043 $ 710,181 $ 988,467 $ 2,605,691
RESTRICTED CASH-CUSTOMER DEPOSITS 77,366 77,366
TOTAL CASH $ 984,409 $ 710,181 $ 988,467 $ 2,683,057 I
121
CITY OF AUBURN: 2007 CAFR
FUND FINANCIAL STATEMENTS AND SCHEDULES
CITY OF AUBURN, WASHINGTON
COMBINING STATEMENT OF CASH FLOWS
NON MAJOR ENTERPRISE FUNDS
FOR THE FISCAL YEAR ENDED DECEMBER 31,2007
AIRPORT
Page 2 of 2
TOTAL
NONMAJOR
COMMERCIAL ENTERPRISE
CEMETERY RETAIL FUNDS
RECONCILIATION OF NET OPERATING INCOME TO NEW CASH
PROVIDED BY OPERATING ACTIVITIES
I OPERATING INCOME (LOSS)
~
55,905 $ (141 ,922) ~
(97,976)J-(183,993)J
ADJUSTMENTS TO RECONCILE OPERATING INCOME TO NET CASH
PROVIDED (USED) BY OPERATING ACTIVITIES:
DEPRECIATION
ASSET (INCREASES) DECREASES:
ACCOUNTS RECEIVABLE
INVENTORY
LIABILITY (INCREASES) DECREASES:
ACCOUNTS & VOUCHERS PAYABLE
DEPOSITS PAYABLE
WAGES & BENEFITS PAYABLE
COMPENSATED ABSENCES PAYABLE
TOTAL ADJUSTMENTS
246,349 78,330 119,327 444,006
6,734 6,734
2,552 2,552
(201) (76,282) (4,237) (80,720)
11 ,438 (3,266) 8,172
(64) 4,698 4,634
200 7,410 7,610
257,722 23,442 111,824 392,988 I
313,627 : $ (118,480): $ 13,848 $ 208,995 I
ffiETC'"ASiiPRO\7itiE-D(CjSETDTBVQpYRATfNGA'CTi\7]TrES $
SCHEDULE OF NONCASH INVESTING, CAPITAL AND
FINANCING ACTIVITIES
CAPITAL ASSETS ACQUIRED BY CONTRIBUTED CAPITAL $
INCREASE (DECREASE) IN FAIR VALUE OF INVESTMENT
$
$
$
TOTAL NON CASH INVESTING, CAPITAL AND
FINANCING ACTIVITIES
$
$
$
$
-I
122
CITY OF AUBURN: 2007 CAFR
FUND FINANCIAL STATEMENTS AND SCHEDULES
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 three
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 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.
123
CITY OF AUBURN: 2007 CAFR
FUND FINANCIAL STATEMENTS AND SCHEDULES
124
CITY OF AUBURN: 2007 CAFR
FUND FINANCIAL STATEMENTS AND SCHEDULES
CITY OF AUBURN, WASHINGTON
COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS
INTERNAL SERVICE FUNDS
FOR THE YEAR ENDED DECEMBER 31,2007
INFORMATION EQUIPMENT
INSURANCE SERVICES RENTAL TOTAL
OPERATING REVENUES:
CHARGES FOR SERVICES $ $ 4,155,900 $ 2,935,930 $ 7,091,830
OTHER OPERATING REVENUE 100,000 64,171 164,171
TOTAL OPERATING REVENUES 100,000 : 4,220,071 2,935,930 : 7,256,0011
OPERATING EXPENSES:
OPERATIONS & MAINTENANCE 3,294,554 1,450,742 4,745,296
ADMINISTRATION 241,000 73,936 555,228 870,164
DE PRE CIA TIONiAMORTIZA TION 280,581 817,259 1,097,840
TOTAL OPERATING EXPENSES 241,000 3,649,071 2,823,229 6,713,300 .
OPERATING INCOME (LOSS) (141,000) _ 571,000 112,701 542,7011
NON-OPERA TING REVENUE (EXPENSE):
INTEREST REVENUE 113,901 163,297 259,447 536,645
OTHER NON-OPERATING REVENUES 7,848 7,848
GAIN (LOSS) ON SALE OF CAPITAL ASSETS (15,305) (442,194) (457,499)
TOTAL NON-OPERATING REVENUE (EXPENSE) 113,901 147,992 (174,899) 86,994 .
INCOME (~) BEFORE CONTRIBUTIONS & TRANSFERS (27,099) . 718,992 (62,198) _ 629,6951
CAPITAL CONTRIBUTIONS 549,892 549,892
TRANSFERS IN (Note 5) 15,000 15,000
TRANSFERS OUT (Note 5) (1,007,000) ~ (1,007,000)
I CHANGE IN NET ASSETS (27,099) _ 733,992 (519,306) _ 187,5871
TOTAL NET ASSETS BEGINNING OF YEAR 2,742,617 3,028,076 9,909,165 15,679,858
lTOTAL NET ASSETS END OF YEAR $ 2,715,518 $ 3,762,068 $ 9,389,859 $ 15,867,4451
125
CITY OF AUBURN: 2007 CAFR
FUND FINANCIAL STATEMENTS AND SCHEDULES
CITY OF AUBURN, WASHINGTON
COMBINING STATEMENT OF CASH FLOWS
INTERNAL SERVICE FUNDS
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2007
Page 1 of 2
INFORMA TION EQUIPMENT
INSURANCE SERVICES RENTAL TOTAL
CASH FLOWS FROM OPERATING ACTIVITIES:
CASH RECEIVED FROM USERS $ (15,612) $ 4,178,270 $ 2,935,930 $ 7,098,588
CASH PAID TO SUPPLIERS (203,196) (1,655,592) (807,045) (2,665,833)
CASH PAID FOR TAXES (37,804) (37,804)
CASH PAID FOR INVENTORY (611,956) (611,956)
CASH PAID TO EMPLOYEES (1,539,116) (560,548) (2,099,664)
OTHER CASH RECEIVED (PAID) 100,000 100,000
NET CASH PROVIDED (USED) 1 ,783,331 1
BY OPERATING ACTIVITIES (lli!,612) 983,562 956,381
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
TRANSFERS IN 15,000 15,000
TRANSFERS OUT (1,007,000) (1,007,000)
NET CASH PROVIDED (USED) BY NON- (992,000)J
CAPITAL FINANCING ACTIVITIES 15,000 (1,007,000)
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES:
PROCEEDS FROM SALE OF EQUIPMENT (15,305) 53,711 38,406
PURCHASE OF CAPITAL ASSETS (418,401) (654,356) (1,072,757)
SALE OF FIXED ASSETS (380,001) (380,001)
PROCEEDS FROM INSURANCE SETTLEMENT 365 365
NET CASH PROVIDED (USED) FOR CAPITAL (600,280)~(1,413,987)J
AND RELATED FINANCING ACTIVITIES (813,707)
CASH FLOW FROM INVESTING ACTIVITIES:
PROCEEDS FROM SALE OF INVESTMENTS 1,497,344 993,125 964,200 3,454,669
PURCHASE OF INVESTMENTS (1,000,000) (1,000,000)
INTEREST RECEIVED 113,901 166,011 256,791 536,703
I NET CASH PROVIDED (~) IN INVESTING ACTIVITIES 1,611,245 1,159,136 220,991 2,991,372 I
NET INCREASE (DECREASE) IN CASH AND 2,368,7161
CASH EQUIVALENTS 1,454,633 1,343,991 (429,908)
CASH AND CASH EQUIVALENTS-BEGINNING OF YEAR 1,260,885 1,713,478 4,888,853 7,863,216
I CASH AND CASH EQUIVALENTS-END OF YEAR $ 2,715,518 $ 3,057,469 $ 4,458,945 $ 10,231,9321
CASH AT END OF YEAR CONSISTS OF:
CASH AND CASH EQUIVALENTS $ 2,715,518 $ 3,057,469 $ 4,458,945 $ 10,231,932
ITotA[ CASR $ 2,715,518 $ 3,057,469 : $ 4,458,945 : $ 10,231,9321
126
CITY OF AUBURN: 2007 CAFR
FUND FINANCIAL STATEMENTS AND SCHEDULES
CITY OF AUBURN, WASHINGTON
COMBINING STATEMENT OF CASH FLOWS
INTERNAL SERVICE FUNDS
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2007
Page 2 of 2
INSURANCE
INFORMA TION
SERVICES
EQUIPMENT
RENTAL
TOTAL
RECONCILIATION OF NET OPERATING INCOME TO NEW CASH
PROVIDED BY OPERATING ACTIVITIES
r6PERATING INCOME (~)
$
(141,000) $-571,000 $
112, io'1-$-542,"i011
ADJUSTMENTS TO RECONCILE OPERATING INCOME TO NET CASH
PROVIDED (USED) BY OPERATING ACTIVITIES:
DEPRECIATION
ASSET (INCREASES) DECREASES:
ACCOUNTS RECEIVABLE
INVENTORY
280,582 817,259 1,097,841
3,870 (41,801) 13,370 (24,561)
(34,619) (34,619)
(19,482) 152,983 80,748 214,249
21,634 (143) 21,491
(836) (32,935) (33,771)
(15,612) 412,562 843,680 1,240,630 I
(156,612) $ 983,562 ~ $ 956,381 ~ $ 1,783,331 1
$ $ 549,892 $ 549,892
1,250 1,250
$ $ 551,142 $ 551,1421
LIABILITY (INCREASES) DECREASES:
ACCOUNTS & VOUCHERS PAYABLE
WAGES & BENEFITS PAYABLE
COMPENSATED ABSENCES PAYABLE
~T5TAL'ii'DJITSTiiiiENTS
rNET"CASA"PROVIDED-(OSEDtByIOPERATING-f(CTIVITI ES- $
SCHEDULE OF NONCASH INVESTING, CAPITAL AND
FINANCING ACTIVITIES
CAPITAL ASSETS ACQUIRED BY CONTRIBUTED CAPITAL $
INCREASE (DECREASE) IN FAIR VALUE OF INVESTMENT
TOTAL NON CASH IN~ESTING, CAPITAL AND
FINANCING ACTIVITIES
$
127
CITY OF AUBURN: 2007 CAFR
FUND FINANCIAL STATEMENTS AND SCHEDULES
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.
128
CITY OF AUBURN: 2007 CAFR
FUND FINANCIAL STATEMENTS AND SCHEDULES
CITY OF AUBURN, WASHINGTON
STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
AGENCY FUND
FOR THE FISCAL YEAR ENDED DECEMBER 31,2007
BALANCE BALANCE I
1/1/2007 ADDITIONS DEDUCTIONS 12/31/2007
ASSETS:
CASH AND CASH EQUIVALENTS $ 825,631 $ 4,235,022 $ 2,857,140 $ 2,203,513
OTHER CURRENT ASSETS 3,618 8,991 8,625 3,984
DUE FROM OTHER GOVERNMENTAL UNITS 399 394,508 399 394,508
TOTAL ASSETS $ 829,648 $ 4,638,521 $ 2,866,164 $ 2,602,005 1
LIABILITIES:
DUE TO OTHER GOVERNMENTAL UNITS $ 829,648 $ 4,638,521 $ 2,866,164 $ 2,602,005
ITOTALCIABI elTl E'S $ 829,648 : $ 4,638,521 :$ 2,866,164 : $ 2,602,005 I
129
CITY OF AUBURN: 2007 CAFR
FUND FINANCIAL STATEMENTS AND SCHEDULES
*
*
*
*
* MORE THAN YOU IMAGINED
130