HomeMy WebLinkAbout5449 RESOLUTION NO. 5449
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
AUBURN, WASHINGTON, AUTHORIZING THE CITY TO
APPLY FOR, AND IF AWARDED, TO ACCEPT AND
EXPEND GRANT FUNDS IN THE AMOUNT OF UP TO
$3,100,000.00 FROM THE FEDERAL AVIATION
ADMINISTRATION RELATED TO THE AUBURN
MUNICIPAL AIRPORT RUNWAY ENHANCEMENT
PROGRAM AND AMENDING RESOLUTION 5439
WHEREAS, On June 11, 2019, Council adopted Resolution 5439, which
authorized the City to apply for grant funds up to $2.7 million dollars; and
WHEREAS, because the preliminary bids for the project have come in higher than
anticipated, staff requests authorization to re-apply for a higher grant amount; and,
WHEREAS, the City's required match will be 5% ($175,000.00) if requested
Washington State Department of Transportation, Aviation Division ("WSDOT") grant
funds are awarded or, alternatively, 10% ($350,000.00) if the WSDOT funds are not
awarded, and the matching funds are available in the City's budget.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF AUBURN,
WASHINGTON, RESOLVES as follows:
Section 1. Section 1 of Resolution 5439 is amended to read as follows:
Section 1. The Council expresses its support for the construction of the Runway
Enhancement Project and authorizes the City's Expenditure of up to One Hundred
Seventy-Five Thousand Dollars ($175,000.00) as its 5% match of the funds needed to
complete this construction. Alternatively, the Auburn City Council authorizes the
expenditure of up to Three Hundred Fifty Thousand Dollars ($350,000.00) if the requested
Resolution No. 5449
August 5, 2019
Page 1 of 2 Rev.2018
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Single Audit Certification Form
The Single Audit Act of 1984 established audit requirements for non-Federal entities that receive Federal aid. On
December 26,2014,the implementing document,OMB Circular A-133(Audits of States,Local Governments,and Non-
Profit Organizations)was superseded by 2 CFR Part 200(Uniform Administrative Requirements,Cost Principles,and
Audit Requirements for Federal Awards). If your current fiscal year began before December 26,2014,then OMB
Circular A-133 is still applicable. If your fiscal year begins on or after January 1,2015,then 2 CFR Part 200 applies.
Under OMB A-133,State or local governments(City,County,Airport Authority,Airport Board)that expend$500,000 or
more a year(calendar or fiscal)in total Federal financial assistance must conduct an audit and submit it to the Federal
Audit Clearinghouse.If the single audit is required under 2 CFR Part 200,then the total Federal financial assistance
expenditure limit is$750,000 or more. For more information on the Single Audit Act requirements please reference the
following web site: http://harvester.census.gov/sac/
This notice is our request for a copy of your most recent audit,whether or not there are any significant findings.In
accordance with your Airport Improvement Program(AIP)grant agreement,you must also provide that information to
your local Airports District Office(ADO). Please fill out the information below by checking the appropriate line(s),sign,
date,and return this form to the FAA local ADO identified at the bottom of the form.
Airport Sponsor Information:
City of Auburn 2018
Sponsor Name Fisca'Fisca 4 a endar Year Endm:
Auburn Munkipal Airport
Alrpott A;idle
Nancy Backus Mayor
Sponsor's Representative Name Representative's Title
(253)931-3041 nbackus@tz auburnwa.gov
Telephone Email
Please check the appropriate line(s):
® We are subject to the Single Audit requirements and are taking the following action:
❑ The Single Audit for this fiscal/calendar year has been submitted to the FAA.
® The Single Audit for this fiscal/calendar year is attached. Single Audit for 2017 calendar year is attached.
® The Single Audit report will be submitted to the FAA as soon as this audit is available.Single Audit for 2018
and 2019 calendar
year will be submitted
when available from
0 We are exempt from the Single Audit requirements for the fiscal/calendar noted above. the Washington State
Auditor's Office.
Sponsor Certification:
ivte9/27/19
St atu a Date
Return to: FAA, Seattle Airports District Office
2200 S.216th Street
Des Moines,WA 98198
Office of the Washington State Auditor
Pat McCarthy
Financial Statements and Federal Single Audit
Report
City of Auburn
King County
For the period January 1 , 2017 through December 31, 2017
Published July 26, 2018 .910 El
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Office of the Washington State Auditor
Pat McCarthy
July 26, 2018
Mayor and City Council
City of Auburn
Auburn, Washington
Report on Financial Statements and Federal Single Audit
Please find attached our report on the City of Auburn's financial statements and compliance with
federal laws and regulations.
We are issuing this report in order to provide information on the City's financial condition.
Sincerely,
-T.i2 lit.2-cce
Pat McCarthy
State Auditor
Olympia, WA
Insurance Building,P.O.Box 40021 •Olympia,Washington 98504-0021 •(360)902-0370•Pat.McCarthy@sao.wa.gov
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TABLE OF CONTENTS
Schedule of Findings and Questioned Costs 4
Independent Auditor's Report on Internal Control Over Financial Reporting and on Compliance
and Other Matters Based on an Audit of Financial Statements Performed in Accordance with
Government Auditing Standards 6
Independent Auditor's Report on Compliance for Each Major Federal Program and Report on
Internal Control Over Compliance in Accordance With the Uniform Guidance 8
Independent Auditor's Report on Financial Statements 11
Financial Section 14
About the State Auditor's Office 106
Washington State Auditor's Office Page 3
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SCHEDULE OF FINDINGS AND QUESTIONED COSTS
City of Auburn
King County
January 1, 2017 through December 31, 2017
SECTION I — SUMMARY OF AUDITOR'S RESULTS
The results of our audit of the City of Auburn are summarized below in accordance with Title 2
U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost
Principles, and Audit Requirements for Federal Awards (Uniform Guidance).
Financial Statements
We issued an unmodified opinion on the fair presentation of the financial statements of the
governmental activities,the business-type activities, each major fund and the aggregate remaining
fund information in accordance with accounting principles generally accepted in the United States
of America(GAAP).
Internal Control over Financial Reporting:
• Significant Deficiencies: We reported no deficiencies in the design or operation of internal
control over financial reporting that we consider to be significant deficiencies.
• Material Weaknesses: We identified no deficiencies that we consider to be material
weaknesses.
We noted no instances of noncompliance that were material to the financial statements of the City.
Federal Awards
Internal Control over Major Programs:
• Significant Deficiencies: We reported no deficiencies in the design or operation of internal
control over major federal programs that we consider to be significant deficiencies.
• Material Weaknesses: We identified no deficiencies that we consider to be material
weaknesses.
Washington State Auditor's Office Page 4
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We issued an unmodified opinion on the City's compliance with requirements applicable to its
major federal program.
We reported no findings that are required to be disclosed in accordance with 2 CFR 200.516(a).
Identification of Major Federal Programs:
The following program was selected as a major program in our audit of compliance in accordance
with the Uniform Guidance.
CFDA No. Program or Cluster Title
20.205 Highway Planning and Construction
The dollar threshold used to distinguish between Type A and Type B programs, as prescribed by
the Uniform Guidance, was $750,000.
The City qualified as a low-risk auditee under the Uniform Guidance.
SECTION II — FINANCIAL STATEMENT FINDINGS
None reported.
SECTION III — FEDERAL AWARD FINDINGS AND QUESTIONED
COSTS
None reported.
Washington State Auditor's Office Page 5
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL
OVER FINANCIAL REPORTING AND ON COMPLIANCE AND
OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL
STATEMENTS PERFORMED IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS
City of Auburn
King County
January 1, 2017 through December 31, 2017
Mayor and City Council
City of Auburn
Auburn, Washington
We have audited, in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States, the financial statements of the
governmental activities,the business-type activities, each major fund and the aggregate remaining
fund information of the City of Auburn, King County, Washington, as of and for the year ended
December 31, 2017, and the related notes to the financial statements, which collectively comprise
the City's basic financial statements, and have issued our report thereon dated July 19, 2018.
INTERNAL CONTROL OVER FINANCIAL REPORTING
In planning and performing our audit of the financial statements,we considered the City's internal
control over financial reporting (internal control) to determine the audit procedures that are
appropriate in the circumstances for the purpose of expressing our opinions on the financial
statements, but not for the purpose of expressing an opinion on the effectiveness of the City's
internal control. Accordingly, we do not express an opinion on the effectiveness of the City's
internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees,in the normal course of performing their assigned functions,to prevent,
or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a
combination of deficiencies, in internal control such that there is a reasonable possibility that a
material misstatement of the City's financial statements will not be prevented, or detected and
corrected on a timely basis. A significant deficiency is a deficiency, or a combination of
Washington State Auditor's Office Page 6
deficiencies, in internal control that is less severe than a material weakness, yet important enough
to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph
of this section and was not designed to identify all deficiencies in internal control that might be
material weaknesses or significant deficiencies. Given these limitations, during our audit we did
not identify any deficiencies in internal control that we consider to be material weaknesses.
However, material weaknesses may exist that have not been identified.
COMPLIANCE AND OTHER MATTERS
As part of obtaining reasonable assurance about whether the City's financial statements are free
from material misstatement, we performed tests of the City's compliance with certain provisions
of laws, regulations, contracts and grant agreements, noncompliance with which could have a
direct and material effect on the determination of financial statement amounts. However,
providing an opinion on compliance with those provisions was not an objective of our audit, and
accordingly, we do not express such an opinion.
The results of our tests disclosed no instances of noncompliance or other matters that are required
to be reported under Government Auditing Standards.
PURPOSE OF THIS REPORT
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of the
City's internal control or on compliance. This report is an integral part of an audit performed in
accordance with Government Auditing Standards in considering the City's internal control and
compliance. Accordingly, this communication is not suitable for any other purpose. However,
this report is a matter of public record and its distribution is not limited. It also serves to
disseminate information to the public as a reporting tool to help citizens assess government
operations.
Pat McCarthy
State Auditor
Olympia, WA
June 21, 2018
Washington State Auditor's Office Page 7
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR
EACH MAJOR FEDERAL PROGRAM AND REPORT ON
INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE
WITH THE UNIFORM GUIDANCE
City of Auburn
King County
January 1, 2017 through December 31, 2017
Mayor and City Council
City of Auburn
Auburn, Washington
REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL
PROGRAM
We have audited the compliance of the City of Auburn, King County, Washington,with the types
of compliance requirements described in the U.S. Office of Management and Budget (OMB)
Compliance Supplement that could have a direct and material effect on each of the City's major
federal programs for the year ended December 31, 2017. The City's major federal programs are
identified in the accompanying Schedule of Findings and Questioned Costs.
Management's Responsibility
Management is responsible for compliance with federal statutes, regulations, and the terms and
conditions of its federal awards applicable to its federal programs.
Auditor's Responsibility
Our responsibility is to express an opinion on compliance for each of the City's major federal
programs based on our audit of the types of compliance requirements referred to above. We
conducted our audit of compliance in accordance with auditing standards generally accepted in the
United States of America; the standards applicable to financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States; and the audit
requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative
Requirements, Cost Principles, and Audit Requirements for Federal Awards(Uniform Guidance).
Those standards and the Uniform Guidance require that we plan and perform the audit to obtain
Washington State Auditor's Office Page 8
reasonable assurance about whether noncompliance with the types of compliance requirements
referred to above that could have a direct and material effect on a major federal program occurred.
An audit includes examining, on a test basis, evidence about the City's compliance with those
requirements and performing such other procedures as we considered necessary in the
circumstances.
We believe that our audit provides a reasonable basis for our opinion on compliance for each major
federal program. Our audit does not provide a legal determination on the City's compliance.
Opinion on Each Major Federal Program
In our opinion, the City complied, in all material respects, with the types of compliance
requirements referred to above that could have a direct and material effect on each of its major
federal programs for the year ended December 31, 2017.
REPORT ON INTERNAL CONTROL OVER COMPLIANCE
Management of the City is responsible for establishing and maintaining effective internal control
over compliance with the types of compliance requirements referred to above. In planning and
performing our audit of compliance, we considered the City's internal control over compliance
with the types of requirements that could have a direct and material effect on each major federal
program in order to determine the auditing procedures that are appropriate in the circumstances
for the purpose of expressing an opinion on compliance for each major federal program and to test
and report on internal control over compliance in accordance with the Uniform Guidance, but not
for the purpose of expressing an opinion on the effectiveness of internal control over compliance.
Accordingly, we do not express an opinion on the effectiveness of the City's internal control over
compliance.
A deficiency in internal control over compliance exists when the design or operation of a control
over compliance does not allow management or employees, in the normal course of performing
their assigned functions, to prevent, or detect and correct, noncompliance with a type of
compliance requirement of a federal program on a timely basis. A material weakness in internal
control over compliance is a deficiency, or combination of deficiencies, in internal control over
compliance, such that there is a reasonable possibility that material noncompliance with a type of
compliance requirement of a federal program will not be prevented, or detected and corrected, on
a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a
combination of deficiencies, in internal control over compliance with a type of compliance
requirement of a federal program that is less severe than a material weakness in internal control
over compliance, yet important enough to merit attention by those charged with governance.
Washington State Auditor's Office Page 9
Our consideration of internal control over compliance was for the limited purpose described in the
first paragraph of this section and was not designed to identify all deficiencies in internal control
that might be material weaknesses or significant deficiencies. We did not identify any deficiencies
in internal control over compliance that we consider to be material weaknesses. However,material
weaknesses may exist that have not been identified.
Purpose of this Report
The purpose of this report on internal control over compliance is solely to describe the scope of
our testing of internal control over compliance and the results of that testing based on the
requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other
purpose. However, this report is a matter of public record and its distribution is not limited. It
also serves to disseminate information to the public as a reporting tool to help citizens assess
government operations.
Pat McCarthy
State Auditor
Olympia, WA
July 19, 2018
Washington State Auditor's Office Page 10
•
INDEPENDENT AUDITOR'S REPORT ON
FINANCIAL STATEMENTS
City of Auburn
King County
January 1, 2017 through December 31, 2017
Mayor and City Council
City of Auburn
Auburn, Washington
REPORT ON THE FINANCIAL STATEMENTS
We have audited the accompanying financial statements of the governmental activities, the
business-type activities,each major fund and the aggregate remaining fund information of the City
of Auburn, King County, Washington, as of and for the year ended December 31, 2017, and the
related notes to the financial statements, which collectively comprise the City's basic financial
statements as listed on page 14.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements
in accordance with accounting principles generally accepted in the United States of America; this
includes the design, implementation, and maintenance of internal control relevant to the
preparation and fair presentation of financial statements that are free from material misstatement,
whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We
conducted our audit in accordance with auditing standards generally accepted in the United States
of America and the standards applicable to financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States. Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditor's judgment,
Washington State Auditor's Office Page 11
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including the assessment of the risks of material misstatement of the financial statements,whether
due to fraud or error. In making those risk assessments, the auditor considers internal control
relevant to the City's preparation and fair presentation of the financial statements in order to design
audit procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the City's internal control. Accordingly, we express no such
opinion. An audit also includes evaluating the appropriateness of accounting policies used and the
reasonableness of significant accounting estimates made by management,as well as evaluating the
overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinions.
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects,
the respective financial position of the governmental activities, the business-type activities, each
major fund and the aggregate remaining fund information of the City of Auburn, as of December
31,2017,and the respective changes in financial position and,where applicable,cash flows thereof
and the respective budgetary comparison for the General and Arterial Street funds, for the year
then ended in accordance with accounting principles generally accepted in the United States of
America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
management's discussion and analysis and required supplementary information listed on page 14
be presented to supplement the basic financial statements. Such information, although not a part
of the basic financial statements, is required by the Governmental Accounting Standards Board
who considers it to be an essential part of financial reporting for placing the basic financial
statements in an appropriate operational, economic or historical context. We have applied certain
limited procedures to the required supplementary information in accordance with auditing
standards generally accepted in the United States of America, which consisted of inquiries of
management about the methods of preparing the information and comparing the information for
consistency with management's responses to our inquiries, the basic financial statements, and
other knowledge we obtained during our audit of the basic financial statements. We do not express
an opinion or provide any assurance on the information because the limited procedures do not
provide us with sufficient evidence to express an opinion or provide any assurance.
Washington State Auditor's Office Page 12
Supplementary and Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the City's basic financial statements. The accompanying Schedule of
Expenditures of Federal Awards is presented for purposes of additional analysis as required by
Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements,
Cost Principles, and Audit Requirements for Federal Awards(Uniform Guidance). This schedule
is not a required part of the basic financial statements. Such information is the responsibility of
management and was derived from and relates directly to the underlying accounting and other
records used to prepare the basic financial statements. The information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and certain additional
procedures, including comparing and reconciling such information directly to the underlying
accounting and other records used to prepare the basic financial statements or to the basic financial
statements themselves, and other additional procedures in accordance with auditing standards
generally accepted in the United States of America. In our opinion,the information is fairly stated,
in all material respects, in relation to the basic financial statements taken as a whole.
OTHER REPORTING REQUIRED BY GOVERNMENT AUDITING
STANDARDS
In accordance with Government Auditing Standards,we have also issued our report dated June 21,
2018 on our consideration of the City's internal control over financial reporting and on our tests
of its compliance with certain provisions of laws,regulations, contracts and grant agreements and
other matters. The purpose of that report is to describe the scope of our testing of internal control
over financial reporting and compliance and the results of that testing, and not to provide an
opinion on internal control over financial reporting or on compliance. That report is an integral
part of an audit performed in accordance with Government Auditing Standards in considering the
City's internal control over financial reporting and compliance.
Pat McCarthy
State Auditor
Olympia, WA
June 21, 2018
Washington State Auditor's Office Page 13
FINANCIAL SECTION
City of Auburn
King County
January 1, 2017 through December 31, 2017
REQUIRED SUPPLEMENTARY INFORMATION
Management's Discussion and Analysis—2017
BASIC FINANCIAL STATEMENTS
Statement of Net Position—2017
Statement of Activities—2017
Balance Sheet—Governmental Funds—2017
Reconciliation of Governmental Funds Balance Sheet to the Statement of Net Position—
2017
Statement of Revenues, Expenditures and Changes in Fund Balance—Governmental
Funds—2017
Reconciliation of Governmental Funds Statement of Revenues, Expenditures and
Changes in Fund Balance to the Statement of Activities—2017
Statement of Revenues, Expenditures and Changes in Fund Balance—Budget to Actual—
General Fund—2017
Statement of Revenues, Expenditures and Changes in Fund Balance—Budget to Actual—
Arterial Street Fund—2017
Statement of Net Position—Proprietary Funds—2017
Statement of Revenues, Expenses and Changes in Fund Net Position—Proprietary Funds
—2017
Statement of Cash Flows—Proprietary Funds—2017
Statement of Net Position—Fiduciary Funds—2017
Statement of Changes in Fiduciary Net Position—Fiduciary Funds—2017
Notes to the Financial Statements—2017
REQUIRED SUPPLEMENTARY INFORMATION
Schedule of Proportionate Share of Net Pension Liability—PERS 1, PERS 2/3, LEOFF 1,
LEOFF 2 —2017
Schedule of Employer Contributions—PERS 1,PERS 2/3, LEOFF 1, LEOFF 2—2017
Washington State Auditors Office Page 14
Schedule of Changes in Total Pension Liability and Related Ratio's—Fire Relief and
Pension Plan—2017
Retiree Medical and Long Term Care Benefits for LEOFF 1 Employees— Schedule of
Funding Progress and Schedule of Employer Contributions—2017
SUPPLEMENTARY AND OTHER INFORMATION
Schedule of Expenditures of Federal Awards—2017
Notes to the Schedule of Expenditures of Federal Awards—2017
Washington State Auditor's ice Page 15
MANAGEMENT'S DISCUSSION AND ANALYSIS
The City of Auburn's(the"City")discussion and analysis is designed to:
• Assist the reader in focusing on significant financial issues
• Provide an overview of the City's financial activity
• Identify changes in the City's financial position(its ability to meet future years'challenges)
• Identify any material deviations from the approved budget
• Identify individual fund issues or concerns
Management's Discussion and Analysis is designed to focus on the current year's activities,resulting changes and currently
known facts. Therefore,it should be read in conjunction with the Transmittal Letter and the City's financial statements.
Financial Highlights
• Total government-wide net position — the difference between assets plus deferred outflows and liabilities plus
deferred inflows—equals$695.2 million,an increase of$19.0 million or 2.8%. Of this,a total of$578.7 million,or 83.2%
of total net position,represents net investment in capital assets and includes assets such as utility systems,streets,
buildings, land, vehicles and equipment. An additional $3.2 million of net position is restricted for purposes of
endowment and debt service. Of the remaining $113.3 million of net position, $28.5 million is legally restricted,
restricted by City policy for specific purposes, or is restricted for use by the City's utilities, and $84.8 million is
unrestricted.
• The net increase in government-wide net position during 2017 was$19.0 million. Of this amount,$16.0 million was
directly related to the increase in City-owned net investment in capital assets,restricted net position increased by
$1.9 million,and unrestricted net position increased by$1.1 million.
• Business-type net position increased by$9.8 million to$249.2 million during 2017 as a result of net capital investment
and net earnings related to the City's water,sewer and storm water utilities.
• Governmental fund balances at year-end totaled$69.1 million. Of this amount,$25.4 million,or 36.8%,is unassigned
and available to fund ongoing activities. Compared to 2016,total governmental fund balances increased by $3.5
million. This increase reflects the net effect of a general improvement in the regional economy and continued
vigilance in monitoring general spending.
• Total City debt payments during the year,net of compensated absences and other post-employment benefits,were
$9.4 million. Total long-term liabilities,including bonds and loans,totaled$119.5 million at December 31,2017. The
ending long-term liabilities is a decrease of$9.2 million from 2016 and is largely attributable to the retirement of
bond principal. See note 9 for further information on long-term liability activity during the year.
Washington State Auditors Office Page 16
Other City Highlights:
Parks and Community Development
• Was awarded over$600,000 in grant funds for the Museum and the Arts and Culture Center for programming and
improvements.
• Increased marketing presence on social media as well as completed facility rental marketing brochures for the
Auburn Community&Event Center and other facilities,leading to a large increase in rental revenues.
• Completed construction of new Memory Heights area of Mountain View Cemetery,adding over 500 new burial sites.
• Rebuilt the first green and surrounds at the Auburn Golf Course,increasing drainage and playability.
• Replaced the playground at Roegner Park.
• Completed Les Gove Park improvements along Auburn Way,adding irrigation and updating the pergola.
• Processed more than 2,800 permits and 9oo business licenses, completed 6,050 building inspections, conducted
7,68o permit reviews,and participated in more than 50,000 interactions with customers.
• Launched electronic plan review capabilities that allow customers to submit electronically and that enable the
customer and staff to transfer information electronically.
• Became the first jurisdiction in the State of Washington to allow final subdivisions to be approved administratively
rather than legislatively.
• Managed 1,244 code enforcement cases and achieved resolution on 1,193 cases(95.9%success rate).
Engineering Services
• Completed 25 capital projects totaling approximately$31M that included:3o lane miles of new pavement,6,500 feet
of new water mains,three new pressure reducing valve stations for water,two new water well pumps,10,300 feet
of new storm drainage piping,5,70o feet of new sanitary sewer piping,six new/replaced traffic signal systems,and
20,000 feet of new/replaced sidewalks.
• Completed several water projects bringing the City's water sources back on line and reducing the need to purchase
water from Tacoma,saving the water system approximately$1M per year.
• Completed design of the 22"and I Street NE roundabout and began construction.
• Completed the installation of two dynamic message signs on Auburn Way South and S 277th Street to provide drivers
with information to improve driver behavior and traffic flow.
• Completed the reconstruction of B Street NW using full-depth pavement reclamation methods, saving
approximately$1M in costs.
• Completed the installation of a high friction surface treatment on Lake Tapps Parkway as a pilot project to address
safety concerns.
• Completed the purchase of equipment and began implementation of scanner-generated field survey data.
• Completed the installation of a pedestrian actuated crosswalk at R St SE and 21"St SE, installation of radar speed
feedback signs on 118th Ave SE,SE 316th Street,and 55th Ave 5,and over 4o speed studies.
• Issued 49 right-of-way use permits, completed two franchise agreements, and completed seven street cleanup
activities through the Adopt-A-Street Program.
• Completed the Airport obstruction survey/advanced ground information system(AGIS)survey.
• Completed 433 inspections on private storm systems and 303 inspections on public storm systems for compliance
with our NPDES Phase 2 permit.
Washington State Auditors Office Page 17
City of Auburn_2017 CAFR anagement's Discussion and Analysis
• Issued 38o construction permits for work in the public right-of-way, completed inspections related to 1,190 other
development permits (building, plumbing, water, sewer, storm and backflow), managed 76 active public facility
extension agreements with developers and 26 active grading permits.
• Refreshed all striping on public roads and continued to refresh thermoplastic pavement markings and legends as
needed.
Maintenance&Operations Services
• Completed rehabilitation in ten storm drainage ponds.This work returned the ponds to original design specifications
thereby enhancing the function and longevity of these facilities.
• Engaged in regular preventative maintenance activities of the sewer system to include video inspection, high
velocity cleaning,repair of collection system assets and operation of 24 sewer/storm pump stations.
• Completed a three year project of installing the Sensus Automated Metering Infrastructure (AMI) system. This
project included replacing over 15,000 meters and installing four radio base stations throughout the city to collect
meter reads.
• Completed ongoing citywide repairs or replacement of damaged and worn street signs identified through staff
inspections.
• Equipment Rental replaced 32 new vehicles and equipment to replace aging units in the fleet, minimizing repair
costs and maximizing vehicle up-time and utilization.
Overview of the Financial Statements
The City's basic financial statements are presented in three parts:
1) Government-wide financial statements
2) Fund financial statements
3) Notes to the financial statements
These statements report the City's net position and changes during the reporting year. The net position is the difference
between assets plus deferred outflows of resources and liabilities plus deferred inflows of resources.
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.
Government-wide Financial Statements
The Financial Statements are presented in conformity with the Governmental Accounting Standards Board(GASB),which
establishes Generally Accepted Accounting Principles(GAAP)for governmental entities. The City adopted the provisions of
Statement No.73—Accounting and Financial Reporting for Pensions and Related Assets That Are Not Within the Scope of GASB
Statement 68,and Amendments to Certain Provisions of GASB Statements 67 and 68;GASB Statement No.82—Pension Issues,
an amendment of GASB Statement No.67,No.68,and No.73.There is no material impact to the City of implementing these
standards.
The government-wide financial statements are designed to be corporate-like in that all governmental and business-type
activities are consolidated into columns which add to a total for the City. The focus of the Statement of Net Position is
designed to be similar to bottom-line results for the City and its governmental and business-type activities. This statement
combines and consolidates governmental funds'current financial resources(short-term spendable resources)with capital
Washington State Auditor's Office Page 18
assets, deferred outflows of resources, long-term obligations and deferred inflows of resources. Over time,increases or
decreases in net position may be one indicator of improvement or deterioration in the City's overall financial health.
The Statement of Activities is focused on both the gross and net cost of various functions,including both governmental and
business-type activities,which are supported by the City's general tax and other revenues. This is intended to summarize
and simplify the user's analysis of cost of various governmental services and/or subsidy to various business-type activities.
The revenue generated by the specific functions (charges for services, grants, and contributions) is compared to the
expenses for those functions to show how much each function either supports itself or relies on taxes and other general
funding sources for support. All activity on this statement is reported on the accrual basis of accounting, requiring that
revenues are reported when they are earned and expenses are reported when they are incurred,regardless of when cash is
received or disbursed.
Governmental activities of the City include general government(executive,finance,legal,human resources,and contracted
court), security (police), physical environment, economic environment, transportation, health and human services, and
culture and recreation. The City's business-type activities include water,sanitary sewer,storm water and solid waste utilities
as well as the operations of an airport and cemetery. Governmental activities are primarily supported by taxes,charges for
services,and grants,while business-type activities are self-supporting through user fees and charges.
Fund Financial Statements
The Fund Financial Statements are the traditional reporting format for governments. A fund is a fiscal and accounting entity
with a self-balancing set of accounts used to account for specific activities or meet certain objectives. While the government-
wide statements present the City's finances based on the type of activity(general government vs.business type),the Fund
Financial Statements are presented by fund type,such as the general fund,special revenue funds and proprietary funds,with
the focus on major funds.
Governmental Funds are used to account for essentially the same functions that are reported as governmental activities in
the government-wide financial statements. The government major fund is presented utilizing the"sources and uses of liquid
resources"basis. This is the manner in which the budget is typically developed. The basis of accounting is different between
the governmental fund statements and the government-wide financial statements. The governmental fund statements
focus on the near-term revenues/financial resources and expenditures while the government-wide financial statements
include both near-term and long-term revenues/financial resources and expenses. The information in the governmental fund
statements can be used to evaluate the City's near-term financing requirements and immediate fiscal health. Comparing the
governmental fund statements with the government-wide statements can help the reader better understand the long-term
impact of the City's current-year financing decisions.
Because the basis of accounting is different between the governmental fund statements and the government-wide financial
statements, reconciliations are provided. The reconciliation between the governmental fund Balance Sheets and the
government-wide Statement of Net Position is found directly following the governmental funds' Balance Sheet; the
reconciliation between the governmental fund Statement of Revenues,Expenditures and Changes in Fund Balance and the
government-wide Statement of Activities is found directly following the governmental funds' Statement of Revenues,
Expenses,and Changes in Fund Balances.
The City maintains twenty-one 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
Washington State Auditor's Office Page 19
the fund level according to state law. Budgetary comparison statements are presented for the general and arterial street
funds as part of the basic financial statements. Other budgetary comparison statements are included following the other
government funds'combining statements.
Proprietary funds are used by governments to account for their business-type activities and use the same basis of accounting
utilized in private industry. Business-type activities provide specific goods or services to a group of customers that are paid
for by fees charged to those customers. There is a direct relationship between the fees paid and the services rendered.
The City has two types of proprietary funds:enterprise funds and internal service funds. Enterprise funds are used to account
for goods and services provided to citizens,while internal service funds are used to account for goods and services provided
internally to various City departments.
Enterprise funds report the same functions presented as business-type activities in the government-wide statements,but in
greater detail. The City's enterprise fund statements provide information on the City's four utilities(water,sanitary sewer,
storm water,and solid waste)as well as the City-owned airport and cemetery.
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, maintenance and operation of
facilities,computer hardware and software services,employee costs related to occupational injury or illness,and 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 one fiduciary fund:An agency fund,which is 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 information can be found on pages 44 and 45,and the pension benefit
and other postemployment benefit required supplementary information is found in the required supplemental information
section.
The combining statements referred to earlier in connection with nonmajor governmental funds,nonmajor enterprise funds,
and internal service funds are presented in the section titled"Fund Financial Statements and Schedules".
Washington State Auditor's Office Page 10
Government-wide Financial Analysis
The statement of net position may serve as a useful indicator of the City's financial position. The overall financial position
has improved for the City of Auburn over the prior year. Changes in Net Position from 2016 to 2017 show an increase in total
net position of$19.0 million or 2.8%. Following is a condensed version of the government-wide statement of net position
with a comparison to 2016:
STATEMENT OF NET POSITION
Comparative Analysis of 2017 and 2016
Governmental Activities Business-type Activities Total
As of 12/31/17 As of 12/31/16 As of 12/31/17 As of 12/31/16 As of 12/31/17 As of 12/31/16
Current and other assets $ 130,119,043 $ 121,141,782 $ 58,080,763 $ 57,286,223 $ 188,199,806 $ 178,428,005
Capital assets,net of
accumulated depreciation 404,922,880 400,377,892 237,873,905 231,598,816 642,796,785 631,976,708
Total assets 535,041,923 521,519,674 295,954,668 288,885,039 830,996,591 810,404,713
Deferred Outflows of Resources 2,241,938 4,034,077 928,489 1,359,639 3,170,427 5,393,716
Long-term liabilities 76,954,091 78,915,572 38,315,101 42,564080 115,269,192 121,479,652
Other liabilities 10,713,381 9,533,214 8,478,481 8,130,257 19,191,862 17,663,471
Total liabilities 87,667,472 88,448,786 46,793,582 50,694,337 134,461,054 139,143,123
Deferred Inflows of Resources 3,589,485 329,987 927,497 152,168 4,516,982 482,155
Net position
Net investment in capital assets 373,368,906 367,128,894 205,677,614 195,490,061 579,046,520 562,618,955
Restricted for:
Capital Projects 27,407,299 24,332,465 - 800 27,407,299 24,333,265
Nonexpendable Permanent Endowment 1,717,134 1,666,043 - - 1,717,134 1,666,043
Debt Service 9,686 11,945 1,437,567 2,694,103 1,447,253 2,706,048
Tourist Promotion 200,371 180,146 - - 200,371 180,146
Drug Investigation&Enforce 381,136 451,507 - - 381,136 451,507
Comm Dev Block Grant 44,904 44,904 - 44,904 44,904
Central Business Distr Dev 93,710 58,260 - - 93,710 58,260
Rate Stabilization - - 419,403 415,511 419,403 415,511
Unrestricted 42,803,759 42,900,814 41,627,494 40,797,698 84,431,253 83,698,512
Total net position $ 446,026,905 436,774,978 $ 249,162,078 $ 239,398,173 $ 695,188,983 $ 676,173,151
The largest component of the City's net position,$579.0 million,or 83.2%is its net investment in capital assets. These
capital assets,such as streets,parks,trails,and vehicles and equipment related to police and public works,are used to
provide services to the citizens. As a result,these assets are not for sale,and are therefore not available to fund current
and future City obligations. The City elected the GASB 34 reporting option to include all general infrastructure of the City
acquired or substantially renovated since 1980.
The largest component of unrestricted net position,$42.8 million,may be used for functions such as public safety employee
salaries and supplies,parks and road maintenance,and other general governmental services. The second largest component
of unrestricted net position,$42.0 million,represents the unrestricted net position of the City's business-type activities and
may only be spent on activities related to one of the four City utilities(water,sanitary sewer,storm water and solid waste)
or to the City-owned ventures(airport and cemetery). Examples of utility activities include maintenance of water/sewer
mains,pump and lift stations,storm drain flushing,water meter reading, and garbage collection. Activities related to the
other City-owned ventures include maintenance of hangars and runways at the airport, and grooming and landscaping at
the cemetery.
Restricted governmental fund net position is$29.9 million and is restricted for purposes such as capital project construction,
debt service,drug investigation and enforcement,and endowment.Total net investment in capital assets increased by$16.4
million.
Washington State Auditor's Office Page 21
Changes in Net Position
The change in net position represents the increase or decrease in City net position resulting from its various activities.
Following is a condensed version of the City's changes in net position. The table shows the revenues,expenses and related
changes in net position for both governmental-type and business-type activities:
CHANGES IN NET POSITION
Comparative Analysis of 2017 and 2016
Governmental Activities Business-type Activities Total
2017 2016 2017 2016 2017 2016
Revenues:
Program revenues
Charges for services $ 11,790,334 $ 12,338,041 $ 68,220,200 $ 65,733,943 $ 80,010,534 $ 78,071,984
Operating grants and contributions 2,257,646 2,767,931 106,286 106,286 2,363,932 2,874,217
Capital grants and contributions 13,229,502 13,275,208 4,363,568 10,574,852 17,593,070 23,850,061
General revenues
Property taxes 20,967,953 18,102,286 - - 20,967,953 18,102,286
Sales taxes 22,333,454 21,475,335 - - 22,333,454 21,475,335
Interfund utility taxes 4,540,265 4,624,951 - 4,540,265 4,624,951
Admission&utility taxes 10,391,462 8,917,401 - - 10,391,462 8,917,401
Excise taxes 4,141,146 5,057,013 - - 4,141,146 5,057,013
Other taxes 5,253,964 5,160,215 - - 5,253,964 5,160,215
Investment earnings 787,786 332,520 479,132 196,595 1,266,918 529,115
Miscellaneous revenue 204,306 157,874 444,110 1,085,275 648,416 1,243,148
Total revenues 95,897,818 92,208,775 73,613,296 77,696,951 169,511,114 169,905,726
Expenses:
General government 10,384,647 9,557,602 - - 10,384,647 9,557,602
Public safety 32,746,406 32,117,837 - - 32,746,406 32,117,837
Transportation 17,904,352 16,602,993 - - 17,904,352 16,602,993
Physical environment 3,217,885 3,266,375 - - 3,217,885 3,266,375
Culture and recreation 13,539,098 12,811,186 - - 13,539,098 12,811,186
Economic environment 3,859,863 3,224,984 - - 3,859,863 3,224,984
Health and human services 674,270 573,115 - - 674,270 573,115
Interest on long-term debt 1,555,803 1,709,647 - - 1,555,803 1,709,647
Water - - 12,408,008 13,107,629 12,408,008 13,107,629
Sanitary sewer - 25,360,718 25,685,370 25,360,718 25,685,370
Storm drainage - - 8,979,969 8,814,542 8,979,969 8,814,542
Solid waste - - 14,539,703 13,460,155 14,539,703 13,460,155
Other business-type octiutres - - 2,106,557 2,150,693 2,106,557 2,150,693
Total expenses 83,882,324 79,863,739 63,394,955 63,218,389 147,277,279 143,082,128
Increase in net position before transfers 12,015,495 12,345,036 10,218,341 14,478,562 22,233,836 26,823,598
Transfers 454,436 424,173 (454,436) (424,173) - -
Change in net position 12,469,931 12,769,209 9,763,905 14,054,389 22,233,836 26,823,598
Net Position,January 1,as Previously Reported 436,774,978 421,493,212 239,398,173 225,343,784 676,173,151 646,836,996
Change in Accounting Principle (3,218,004) 2,512,557 - - (3,218,004) 2,512,557
Net Position,January 1.as Restated 433,556,974 424,005,769 239,398,173 225,343,784 672,955,147 649,349,553
Net position,December 31 $ 446,026,905 $ 436,774,978 $ 249,162,078 $ 239,398,173 $ 695,188,983 $ 676,173,151
Governmental activities contributed $12.5 million to the total increase in City net position. 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 lives.
Washington State Auditor's Office Page 22
General tax revenues increased by 6.8%to$67.6 million between 2016 and 2017, compared to an increase of 3.3%between
2015 and 2016:
• Property tax revenue increased$2.9 million or 15.8%.
• Sales tax collections increased$0.9 million or 4.0%,reflecting improvement in the economy.
• Utility and admission tax revenue increased by$1.4 million or 10.3%.
• Excise tax revenue decreased by$0.9 million or 18.1%.
• Investment earnings increased by$0.4 million in governmental activities and$0.3 million in business-type activities
for a government-wide increase of$0.7 million. Government-wide miscellaneous revenue decreased by$0.6 million
to$0.6 million.
Government-wide expenses increased by approximately $4.2 million or 2.9% and were largely attributable to general
increases in operating expenses such as salaries and wages.
The chart below summarizes the government activity revenue by source, while the chart on the next page 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 Chagesfor Sarvices
1% 12%
Other Tax
Utility&Admimion Taxes
11% •
Capital Grants&
Contributions
Interfund Utility Taxes 14%
5%
Operating Grants&
Contributions
2%
Property Taxes
Sales Tax=- 22%
23%
Washington State Auditor's Office Page 23
Program Expenses and Revenues-Governmental Activities
$30
$25 •
$20
.4
c
$15
■Program Revenues
$p - ■Expenses
$0
is
1/4.6> �a�,oc Feces oc Fec` `¢5
Go J> -1ice P6
eta ,ca \F,c caQ Fcs Fac
ec �� `¢a•
¢ 1`J
V <1.(‘ )\� oco aca
<6 a
•e
Business-type net position totaled$249.2 million,an increase of 4.1%. Key components of this increase include:
• Business-type revenues decreased$4.1 million to$73.6 million due to a reduction in capital grants and contributions
as well as miscellaneous revenues, which were partly offset by increases in charges for services and investment
earnings.
• Income(loss)before capital contributions and transfers amounted to:
Water fund: $ 2,747,130
Sanitary sewer fund: 623,178
Storm fund: 1,028,263
Solid waste fund: 677,037
Non-major funds: 155260
$ 5,230,868
• Net transfers totaled($454,436).
Washington State Auditors Office Page 24
The following chart shows the relative net position balances for each business-type fund:
Business Type Net Position-By Fund
Airport Cemetery
slid Wa3e 3.9% 0.6%
20%
3orm Drainage
26.9% Water
32.0%
Sanitary 3;wer
34.6%
The majority of net position in the City's enterprise funds relate to capital asset infrastructure,such as water and sewer
mains and the airport runway. As such,most of the net position is not available to support the ongoing expenses of the
funds.
Following are two charts that contrast the total net position to the spendable portion of net position for each enterprise
fund:
Comparison of Total Net Position to Spendable Net Position
Utility Funds
$90
$80 , ■SPendableNet Portion
$70 ■Total Net Portion
$60
$50 -
$40 - -
$30
$20 -
$10 -
$0MEP
141
Water
Sanitary%wet.
aorm Drainage slid Wade
Washington State Auditor's Office Page 25
Comparison of Total Net Position to Spendable Net Position
Other Enterprise Funds
$13
$9 -
ndable N fbstion
$8 :et
al Net Pbstion
$7 t
u $6
- $5 -
$4
$3
$2 -
$1 -
$0 --
Airport
Cemetery
The first chart following depicts the revenues and expenses for business-type funds,while the second shows the various
sources of business-type revenue.
Business Type Activity Revenues and Expenses
Before Capital Contributions and Transfers
$23 r _ --
$21
$20
$18
$17
$15
ti$14
.2$12
$11 ■Revenues
$9 ■Expenses
$8
•
$6
$5
$3 ..
$0
VVaterSsnitary dorm
Sower Solid Waste Minor
Drainage
Busnes-Type
Activities
Washington State Auditor's Office Page 26
Business Type Activity Revenues
By Source
Investment Earnings Busness-type
0.7% Miscellaneous Income
1.8%
Capital Contributions
5.9%
Chargesfor cervices
91.6%
Financial Analysis of Governmental Funds
The purpose of the City's governmental funds is to report on near-term revenues/financial resources and expenditures. This
information helps determine the City's financial requirements in the near future. Specifically,fund balance is a good indicator
of the City's financial resources.
As of December 31, 2017, the City's governmental funds had combined fund balances of $69.1 million, an increase of$3.5
million or 5.4%over the previous year. This change is primarily due to increases in fund balances for the General fund and
capital improvement fund net of a reduction in fund balance for the City's Arterial Street and other governmental funds.The
following table shows the changes in fund balance between 2016 and 2017.
Changes in Fund Balance-By Fund
Fund 2017 2016 Difference
General fund $ 34,760,782 $ 32,151,179 $ 2,609,603
Arterial street fund 2,584,136 2,655,913 (71,777)
Capital improvement fund 11,271,845 10,032,509 1,239,336
All other government funds 20,442,878 20,704,803 (261,925)
Total $ 69,059,641 $ 65,544,404 $ 3,515,237
Washington State Auditor's Office Page 27
Of the government funds'total fund balances,$25.4 million is unassigned. Nonspendable,restricted,committed and
assigned fund balances total$43.6 million. Of this$43.6 million,$13.9 million is earmarked for capital projects,$18.7 million
is in special revenue funds that are earmarked for specific purposes and$1.7 million is 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 2017,the general fund had
a fund balance of$34.8 million,$9.3 million of which is assigned,and$25.5 million is unassigned.
Other funds that had significant fund balances include:
• $11.3 million in the capital improvement projects fund;used for various governmental capital asset projects.
• $20.4 million in all other government funds;used primarily for local street improvements, local revitalization funding
and maintenance of cemetery.
The general fund balance of $34.8 million increased by $2.6 million from the prior year. Revenues increased with the
continued gradual improvement in the local and regional economic conditions. At the same time,expenses increased over
2016 due to inflation and programmatic changes. Meanwhile, the City continues its vigilance in monitoring general
expenditure activity.
The following chart shows the relative fund balances for governmental funds:
Governmental Funds—Fund Balances
All Other Government
Funds
30%
� xTM
General Fund
` 50%
t on
Capital Improvement
Fund
16%
Arterial Street Fund
4%
Washington State Auditor's Office Page 28
General fund revenue increased by$3.3 million,sources of which are shown in the chart below. Property taxes increased by
$2.9 million and sales taxes increased $o.5 million. Utility and other taxes increased by a net of$0.3 million. Licenses and
Permits decreased by$1.1 million due primarily to reductions in building permit fees($0.8 million)and plumbing permits($0.2
million). Charges for Services increased by $0.2 million, Fines & Forfeitures essentially remained unchanged,
Intergovernmental Revenues increased by$0.4 million and Miscellaneous Revenues increased by$0.2 million.
2017 General Fund Revenue Changes-By Source
$4.0 -
$3.6 -
$3.2 - Property Taxes
$2.9
$2.8 -
$2.4 -
$2.0 -
$1.6 -
2
c
.9
2 $1.2 -
$0.8 - SziIesTaxes
$0.5 Utility&Admission Taxes Intergovernmental
$0.4 Chagesfor Services $0.4
$0.4 - $0.21111-
M i scel l angio us
$0.1
$0.0 - ® e
Fines&Forfeitures
Interfund Utility Taxes ($0.0)
($0.4) - ($0.1)
($0.8) -
($1.2) - Ucerms&Permits
($t1)
($1.6) -
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.
Washington State Auditors Office Page 29
General Fund Budgetary Highlights
The City budgets biennially by adopting two single-year budgets at the end of each even-numbered year and then making
adjustments as necessary via budget amendments throughout the next two years. Major amendments to the 2017 budget
included:
• Budgeted General Fund expenditures and transfers out increased from $69.5 million to $73.2 million. Significant
changes include increased property tax revenues to reflect the use of banked capacity,funding of emergency repairs
at the Auburn Municipal Airport,and transfers to the insurance and cumulative reserve fund.
Reasons for the variances in the general fund between the final budget and actual results include:
• Actual General Fund revenues totaled$68.6 million,exceeding budget by$1.3 million. Significant areas of favorable
variance include sales and property taxes, which exceeded budget by $320,000 and $186,000, respectively, as
described above; rents and leases, which exceeded budget by $164,000; electric and gas utility taxes, which
exceeded budget by$307,000;leasehold excise taxes,which exceeded budget by$163,000;and investment income,
which exceeded budget by$169,000.Areas of unfavorable variance include building permits,which were$383,000
below budget; brokered natural gas taxes, which were $176,000 under budget; and development services fees,
which were$101,000 below budget.
• Actual General Fund expenditures totaled $67.0 million and were under budget by $6.2 million. Departments
experienced savings due to continued vigilance in monitoring city-wide expenditures. Significant areas of under-
expenditure include reduced personnel costs largely due to Police Department vacancies,and reduced professional
services contracts and other miscellaneous expenses.
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 31,2017 totaled
$642.8 million(net of accumulated depreciation), an increase of$10.8 million from 2016.This investment in capital assets
includes land,buildings,improvements,machinery and equipment,construction in progress,utility transmission/distribution
systems,roads,bridges,and other infrastructure.
Major capital asset changes during the year include:
• Developer contributions resulted in an increase of $2.5 million in utility infrastructure assets and $2.4 million in
governmental infrastructure assets.
• $11.3 million was spent by proprietary funds on construction projects during the year.
• Purchases of government land resulted in an increase of$0.1 million.
• $18.5 million was spent by governmental funds on construction projects during the year. Some of the larger projects
in the governmental funds include:
$3.9 million on South 277th(Auburn Way North to Green River Bridge)project
$2.6 million on Auburn Way South Corridor Improvements
$2.0 million on B Street Northwest Reconstruction project
$1.7 million on Auburn Way North Street Preservation project
$1.3 million on West Main St.Multimodal Corridor and ITS Improvements
Washington State Auditor's Office Page 30
A summary of the City's capital assets follows:
Summary of Capital Assets(net of depreciation)
Governmental Activities Business-type Activities Total
As of 12/31/17 As of 12/31/2016 As of 12/31/17 As of 12/31/2016 As of 12/31/17 As of 12/31/2016
Land $ 108,890,255 $ 108,793,702 $ 12,526,187 $ 12,526,187 $ 121,416,442 $ 121,319,889
Building 53,614,550 55,101,628 2,025,151 2,106,829 55,639,701 57,208,457
Site improvements 7,490,415 7,813,341 207,306,228 203,881,093 214,796,643 211,694,434
Equipment 8,652,792 8,436,499 293,545 265,028 8,946,337 8,701,527
Intangibles 37,967 192,530 5,449,186 5,196,600 5,487,153 5,389,130
Infrastructure 216,159,542 209,040,706 - 216,159,542 209,040,706
Construction in progress 10,077,359 10,999,486 10,273,608 7,623,079 20,350,967 18,622,565
$ 404,922,880 $ 400,377,892 $ 237,873,905 $ 231,598,816 $ 642,796,785 $ 631,976,708
More detailed information on capital assets is provided in Note 7.
Long-term Debt
At the end of the current fiscal year,the City had total net bonded debt outstanding of$77.7 million.Of this amount, $22.9
million is due to other governments, $27.8 million is general obligation bonds,and $27.0 million is revenue bonds for the
water,sewer and storm utilities. The City currently maintains a rating of Aa3 with Moody's and a rating of AA+with Standard
&Poor's for its general obligation debt.
The following schedule summarizes the City's bonded debt:
Summary of Bonded Debt
Governmental Business-type
Activities Activities Total
General obligation bonds $ 27,411,611 $ 362,822 $ 27,774,433
Revenue bonds - 27,035,000 27,035,000
Due to other governments $ 22,918,300 - 22,918,300
$ 50,329,911 $ 27,397,822 $ 77,727,733
Below is a summary of additional,non-bonded long-term debt of the City:
Other Long-Term Debt
Public Works Trust Fund loans $ 10,394,433
Capital Lease $ 382,914
$ 10,777,347
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.
Washington State Auditor's Office Page 31
Additional information can be found in note 9 and in the statistical section of this report.
Economic Factors
Over the past year,economic conditions continued to improve locally. Real property values,which had finally recovered to
pre-recession levels by 2016,grew an additional 8.4%in 2017. Property tax receipts grew by 16.2%due in part to this increase
in assessed valuation and in part to the used of banked taxing capacity. Retail sales continued to increase,by 2.7%over 2016
levels,and the rate of unemployment in the County and City remained low. However,building permit revenues decreased
by over 24%reflecting reduced construction activity relative to 2016.
While general economic conditions in the region have improved,and the economic outlook for the City is generally positive,
significant challenges to the City's overall financial condition remain. In particular, several areas at the Federal and State
levels of government continue to cast a shadow. These negative factors include the ongoing disagreements within the
United States Congress on finding a long-term solution to fund governmental services as well as—at the State level—long-
term fiscal challenges for addressing holes left by one-time budget fixes in the current budget and the need to fund basic
education mandates. Additionally, the State and City continue to grapple with the financial impacts of the phase-out of
streamlined sales tax revenue distributions to cities and the uncertainty of sales tax receipts on out-of-state sales under the
new Marketplace Fairness Act.
Therefore, although the City has seen significant private investments in the community, including development within
several blocks in downtown that will serve as a catalyst for future redevelopment,the City remains cautious and continues
to vigilantly monitor and control its expenses in order to live within the City's means.
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.
Washington State Auditor's Office Page 32
City of Auburn,Washington
STATEMENT OF NET POSITION
December 31,2017
Primary Government
Governmental Business-Type
Activities Activities Total
ASSETS:
Cash and Cash Equivalents(Note 3) $ 60,013,183 $ 43,189.343 $ 103,202,526
Cash with Outside Agencies (391) - (391)
Investments(Note 3) 992,430 - 992,430
Receivables
Taxes 306,809 - 306,809
Customer Accounts 486,179 6.884.100 7.370.279
Other Receivables 2,624,305 - 2,624,305
Special Assessments 7,283 - 7,283
Due From Other Governmental Units(Note 6) 2,775,623 171,616 2,947,239
Internal Balances (440,475) 440,475 -
Materials and Supplies Inventory 272,670 160,443 433,113
Restricted Assets:
Temporarily Restricted:
Cash and Cash Equivalents(Note 3) 20,559,911 6,588,886 27,148,797
Due From Other Governmental Units(Note 6) 2,185.905 - 2,185,905
Permanently Restricted:
Cash and Cash Equivalents(Note 3) 1,717,134 - 1,717,134
Prepaids 546,773 - 546.773
Long-Term Contracts and Notes 13,473 645,900 659.373
Net Pension Asset(Note 10) 6,702,047 - 6,702,047
Investment in Joint Ventures(Note 15) 31,356,184 - 31,356,184
Depreciable Capital Assets(Net of Accumulated Depreciation)(Note 7) 285.955,266 209,624,924 495,580,190
Non-Depreciable Capital Assets(Note 7) 118.967,614 28,248,981 147,216,595
Total Assets 535,041,923 295,954,668 830,996,591
DEFERRED OUTFLOWS OF RESOURCES:
Deferred Outflows from Bond Refunding 5,588 21,837 27,425
Deferred Outflows related to Pensions 2,236,350 906,652 3,143,002
Total Deferred Outflow of Resources 2,241,938 928,489 3,170,427
LIABILITIES:
Accounts Payable 5.607,399 3,673,088 9,280,487
Other Liabilities Payable 785,730 1,382 787,112
Payable From Restricted Assets:
Accrued Interest - 1,485,333 1,485,333
Deposits - 215,194 215,194
Uneamed Revenue 13,473 - 13,473
Bonds and Other Debt Payable:
Due Within One Year(Note 9) 3,590,679 3,103,484 6,694,163
Due in More Than One Year(Note 9) 30,414,688 32,702,154 63,116,842
Due to Other Governmental Units:
Due Within One Year(Note 9) 716,100 - 716,100
Due in More Than One Year(Note 9) 22,202,200 - 22.202,200
Net Penion Liability(Note 10) 11,986,783 5.612,947 17,599,730
Firemen's Pension Liability(Note 10) 3,212,435 - 3,212,435
Net OPEB Obligation(Note 11) 9,137,985 - 9,137,985
Total Liabilities 87,667,472 46,793,582 134,461,054
DEFERRED INFLOWS OF RESOURCES:
Deferred Inflows related to Pensions 3,589,485 927,497 4,516,982
Total Deferred Inflows of Resources 3,589.485 927,497 4,516,982
NET POSITION
Net Investment in Capital Assets 373,368,906 205,677,614 579,046,520
Restricted:
Capital Projects 27,407,299 - 27,407,299
Nonexpendable Permanent Endowment 1,717.134 - 1,717,134
Debt Service 9,686 1,437,567 1,447,253
Tourist Promotion 200,371 - 200.371
Drug Investigation and Enforcement 381,136 - 381,136
Community Development Block Grant Program 44,904 - 44,904
Central Business District Development 93,710 - 93,710
Rate Stabilization - 419,403 419,403
Unrestricted 42,803,759 41,627,494 84,431,253
Total Net Position $ 446,026.905 $ 249,162,078 $ 695,188,983
The notes to the basic financial statements are an integral part of this statement.
Washington State Auditor's Office Page 33
City of Auburn, Washington
STATEMENT OF ACTIVITIES
For the Year Ended December 31, 2017
Page 1 of 2
Program Revenues
Charges Operating Capital
for Services Grants and Grants and
Expenses and Fines Contributions Contributions
FUNCTIONS/ PROGRAMS:
Primary Government
Governmental Activities:
General Govemment $ 10,384,647 $ 1,241,905 $ 163,698 $ 366,582
Public Safety 32,746,406 2,523,667 1,936,498 13,227
Transportation 17,904,352 2,118,980 - 11,232,469
Physical Environment 3,217,885 431,580 5,125 220,987
Culture and Recreation 13,539,098 3,073,262 145,325 794,962
Economic Environment 3,859,863 2,400,940 2,000 23,005
Health and Human Resources 674,270 - 5,000 578,270
Interest on Long-Term Debt 1,555,803 - - -
83,882,324 11,790,334 2,257,646 13,229,502
Business-Type Activities
Water 12,408,008 14,781,310 - 1,176,756
Sanitary Sewer 25,360,718 26,369,496 - 873,779
Storm Drainage 8,979,969 9,778,102 - 2,313,033
Solid Waste 14,539,703 15,079,932 106,286 -
Nonmajor Business-Type Activities 2,106,557 2,211,360 - -
63,394,955 68,220,200 106,286 4,363,568
Total Primary Govemment $ 147,277,279 $ 80,010,534 $ 2,363,932 $ 17,593,070
General Revenues:
Taxes:
Property
Retail Sales and Use
Interfund Utility
Utility
Excise
Other
Investment Earnings
Other Revenues
Gain on Sale of Capital Assets
Contributions to Endowment Funds
Transfers (Note 5)
Total General Revenues
Change in Net Position
Net Position, January 1
Change In Accounting Principle
Net Position, January 1 restated
Net Position, December 31
The notes to the basic financial statements are an integral part of this statement.
Washington State Auditor's Office Page 34
Page 2 of 2
Net (Expense)Revenue and
Changes in Net Position
Governmental Business-Type
Activities Activity Total
$ (8,612,462) $ - $ (8,612,462)
(28,273,013) - (28,273,013)
(4,552,903) - (4,552,903)
(2,560,193) - (2,560,193)
(9,525,549) - (9,525,549)
(1,433,918) - (1,433,918)
(91,000) - (91,000)
(1,555,803) - (1,555,803)
(56,604,841) - (56,604,841)
3,550,058 3,550,058
1,882,557 1,882,557
3,111,166 3,111,166
646,515 646,515
104,803 104,803
9,295,099 9,295,099
$ (56,604,841) $ 9,295,099 $ (47,309,742)
$ 20,967,953 $ - $ 20,967,953
22,333,454 - 22,333,454
4,540,265 - 4,540,265
10,391,462 - 10,391,462
4,141,146 - 4,141,146
5,253,964 - 5,253,964
787,786 479,132 1,266,918
134,003 444,110 578,113
19,212 - 19,212
51,091 - 51,091
454,436 (454,436) -
69,074,772 468,806 69,543,578
12,469,931 9,763,905 22,233,836
436,774,978 239,398,173 676,173,151
(3,218,004) - (3,218,004)
433,556,974 239,398,173 672,955,147
$ 446,026,905 $ 249,162,078 $ 695,188,983
Washington State Auditor's Office Page 35
City of Auburn,Washington
BALANCE SHEET
GOVERNMENTAL FUNDS
December 31,2017
Other Total
General Arterial Capital Governmental Governmental
Fund Street Improvement Funds Funds
ASSETS:
Cash and Cash Equivalents $ 32,874,422 $ 1,087,394 $ 11,229,743 $ 20,960,950 $ 66,152,509
Investments(Note 3) 992,430 - - - 992,430
Deposits with Fiscal Agent (391) - - - (391)
Receivables:
Taxes 306,809 - - - 306,809
Customer Accounts 125,862 339,839 - 3,793 469,494
Other Receivables 2,274,352 - - 345,829 2,620,181
Special Assessments - - - 7,283 7,283
Interfund Receivable(Note 5) 50,000 - 93,782 - 143,782
Inventories 30,453 - - - 30,453
Long-Term Notes and Contracts - - 13,473 - 13,473
Due From Other Governmental Units(Note 6) 2,769,412 1,961,355 44,050 180,500 4,955,317
Total Assets 39,423,349 3,388,588 11.381,048 21,498,355 75.691,340
LIABILITIES,DEFERRED INFLOWS AND FUND BALANCES:
Liabilities:
Current Payables 2,974,017 804,452 95,730 961,240 4,835,439
Customer Deposits 427,872 - - - 427,872
Interfund Payable(Note 5) - - - 50,000 50,000
Other Liabilities Payable 188,207 - - 36,954 225,161
Unearned Revenue - - 13,473 - 13,473
Total Liabilities 3,590,096 804,452 109,203 1,048,194 5,551,945
Deferred Inflow of Resources:
Unavailable Revenue-Special Assessments - - - 7,283 7,283
Unavailable Revenue-Other 1,072,471 - - - 1,072,471
Total Deferred Inflow of Resources 1,072,471 - - 7,283 1,079,754
Fund Balances:(Note 1)
Nonspendable 30,453 - - - 30,453
Nonspendable Permanent Endowment - - - 1,717,134 1,717,134
Restricted - 2,584,136 10,794,522 14,758,448 28,137,106
Committed - - - 3,223,108 3,223,108
Assigned 9,315,528 - 477,323 744,188 10,537,039
Unassigned 25,414,801 - - - 25,414,801
Total Fund Balances: 34,760,782 2,584,136 11,271,845 20,442,878 69,059,641
Total Liabilities,Deferred Inflows and Fund Balances $ 39,423,349 $ 3,388,588 $ 11,381,048 $ 21,498,355 $ 75,691,340
The notes to the basic financial statements are an integral part of this statement.
Washington State Auditors Office Page 36
City of Auburn,Washington
RECONCILIATION OF BALANCE SHEET OF GOVERNMENT FUNDS TO THE STATEMENT OF NET POSITION
December 31,2017
Total governmental fund balances as reported on this statement $ 69,059.641
Amounts reported for governmental activities in the statement of net position are different because:
Capital assets used in governmental activities are not financial resources and therefore 396,609,025
not reported in the govemmental funds.
Other non-current assets used in governmental activities are not financial resources and therefore are
not reported in the governmental funds.
Investment in Joint Ventures 8,437,884
Prepaids 546.773
Interest receivable on investments 4,124
Net pension asset 3,489,612
12,478,393
Other long-term assets are not available to pay for current-period expenditures and therefore
are reported as unavailable revenue in the governmental funds.
Unearned revenue beyond the city's 30-day measurable and available period 1,072,471
Unaveilabe revenue reported for special assessments 7,283
1,079,754
Internal service funds are used by management to charge the cost of certain activities,such as insurance,fleet
maintenance and information technology,to individual funds. The assets and liabilities of these internal service 21,111,117
funds are included in governmental activities in the statement of net position.
Some liabilities are not due and payable in the current period and therefore are not reported
in the governmental funds.
Bonds and loans payable (31,376,165)
Premium on Bonds Payable (73,929)
Deferred amount on bond refunding 5.588
Deferred amounts related to pensions (1,326,570)
Interest payable (132,397)
Net pension liability (10,096,427)
Net other postemployment obligations (9,137,985)
Compensated absences payable (2,173,140)
(54,311,024)
Net position of govemment activities as reported on the statement of net position $ 446,026,905
The notes to the basic financial statements are an integral part of this statement.
Washington State Auditor's Office Page 37
City of Auburn,Washington
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
GOVERNMENTAL FUNDS
For the Year Ended December 31,2017
Other Total
General Arterial Capital Govemmental Governmental
Fund Street Improvement Funds Funds
REVENUES:
Taxes:
Property $ 20,837,874 $ - $ - $ 138,510 $ 20,976,384
Retail Sales&Use 19,441,488 - - 2,891,966 22,333,454
Interfund Utility 3,891,656 - - 648,609 4,540,265
Utility 8,932,920 - - 1,458,542 10,391,462
Excise 519,630 - 3,497,030 124,486 4,141,146
Other - - - 42,535 42,535
Licenses and Permits 1,906,796 - - - 1,906,796
Intergovemmental 6,322,043 7,043,677 30,847 2,790,993 16,187,560
Charges for Services 4,416,518 - - 2,701,256 7,117,774
Fines and Forfeitures 882,254 - - - 882,254
Special Assessments - - - 3,835 3,835
Investment Earnings 349,018 11,173 102,542 209,980 672,713
Miscellaneous 1,096,866 709,222 6,259 153,986 1,966,333
Total Revenues 68,597,063 7,764,072 3,636,678 11,164,698 91,162,511
EXPENDITURES:
Current:
General Govemment 9,755,757 - - 9,755,757
Security of Persons and Property 31,464,290 - - 620,086 32,084,376
Physical Environment 3,359,548 - - - 3,359,548
Transportation 3,679,967 9,618,924 - 7,353,647 20,652,538
Economic Environment 3,117,886 - - 762,139 3,880,025
Health and Human Services 674,270 - - - 674,270
Culture and Recreation 11,943,070 - - - 11,943,070
Debt Service:
Principal 57,642 197,376 - 1,380,108 1,635,126
Interest and Other Costs 20,526 12,135 - 1,557,864 1,590,525
Capital Outlay 29,905 - 849,072 1,217,304 2,096,281
Total Expenditures 64,102,861 9,828,435 849,072 12,891,148 87,671,516
Excess(Deficiency)of Revenues
Over(Under)Expenditures 4,494,202 (2,064,363) 2,787,606 (1,726,450) 3,490,995
OTHER FINANCING SOURCES(USES):
Sales of Capital Assets 2,700 - - - 2,700
Insurance Recoveries 134,003 - - - 134,003
Transfers In(Note 5) 1,079,000 1,999,610 475,583 3,496,624 7,050,817
Transfers Out(Note 5) (3,100,302) (7,024) (2,023,853) (2,032,099) (7,163,278)
Total Other Financing Sources and Uses (1,884,599) 1,992,586 (1,548,270) 1,464,525 24,242
Net Change in Fund Balances 2,609,603 (71,777) 1,239,336 (261,925) 3,515,237
Fund Balances-January 1,as Previously Reported 32,151,179 2,655,913 10,032,509 20,704,803 65,544,404
Fund Balances-Ending $ 34,760,782 $ 2,584,136 $ 11,271,845 $ 20,442,878 $ 69,059,641
The notes to the basic financial statements are an integral part of this statement.
Washington State Auditor's Office Page 38
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 31,2017
Net change in fund balances per the Statement of Revenues, Expenditures and Changes in Fund Balance $ 3.515,237
Amount reported as change in net position in the Statement of Activities are different because:
Governmental funds report capital outlays as expenditures. However, in the statement
of activities the cost of those assets is allocated over their estimated useful lives and
reported as depreciation expense. This is the amount by which capital outlay ($18,432,909)
exceeded depreciation($16,509,513)in the current period. 1,923,396
Certain Capital and Joint Venture activities do not use or provide current financial resources
but increase net position. 817,723
Revenues in the Statement of Activities that do not provide current financial resources
are not reported as revenues in the funds:
Property taxes (8,431)
Special assessments (4,114)
Other unavailable revenue (90,700)
Amortization of bond premium 29,141
Investment interest receivable (8,837)
(82,940)
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. 2,451,623
Repayment of the principal of long-term debt consumes the current financial resources of
governmental funds but has no effect on the net position. 1,628,867
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. 1,829,168
Some expenses reported in the Statement of Activities do not require the use of current
financial resources and therefore are not reported as expenditures in governmental funds.
Amortization of prepaids (109,355)
Change in accrued interest payable 4,595
Change in net pension obligation or asset 1,383,217
Change in net other postemployment benefits (690,154)
Change in compensated absences payable (201,446)
386,857
Change in net position on the Statement of Activities $ 12,469,931
The notes to the basic financial statements are an integral part of this statement.
Washington State Auditor's Office Page 39
City of Auburn, Washington
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
GENERAL FUND
For the Year Ended December 31, 2017
Budget Amounts Variance with
Final Final Budget
Original Adopted Actual Positive
(GAAP Basis) (GAAP Basis) Results (Negative)
REVENUES:
Taxes:
Property $ 20,152,000 $ 20,652,000 $ 20,837,874 $ 185,874
Retail Sales & Use 19,094,300 19,094,300 19,441,488 347,188
Interfund Utility 3,671,300 3,936,300 3,891,656 (44,644)
Utility 8,487,700 8,487,700 8,932,920 445,220
Excise 340,300 340,300 519,630 179,330
Licenses and Permits 2,338,700 2,338,700 1,906,796 (431,904)
Intergovernmental 5,919,680 6,129,110 6,243,965 114,855
Charges for Services 3,981,980 4,361,980 4,416,518 54,538
Fines and Forfeitures 876,100 876,100 882,254 6,154
Investment Earnings 69,000 69,000 237,532 168,532
Miscellaneous 879,500 884,500 1,096,866 212,366
Total Revenues 65,810,560 67.169,990 68,407,499 1,237,509
EXPENDITURES:
Current:
General Government 11,182,750 11,285,933 9,755,757 1.530,176
Security of Persons and Property 32,577,455 33,668,898 31,269,319 2,399,579
Physical Environment 4,053,466 4,073,266 3,359,548 713,718
Transportation 3,760,044 3,817,220 3,679,967 137,253
Economic Environment 3,428,643 3,764,529 3,117,886 646,643
Health and Human Services 639,742 733,542 674,270 59,272
Culture and Recreation 12,083,188 12,152,688 11,943,070 209,618
Debt Service 77,699 77,699 78,168 (469)
Capital Outlay 324,519 30,000 29,905 95
Total Expenditures 68,127,506 69,603,775 63,907,890 5,695,885
Excess(Deficiency)of Revenues
Over(Under) Expenditures (2,316,946) (2,433,785) 4,499,609 6,933,394
OTHER FINANCING SOURCES (USES):
Sales of Capital Assets - - 2,700 2,700
Insurance Recoveries 25,000 25,000 134,003 109,003
Transfers In (Note 5) 84,000 79,000 79,000 -
Transfers Out (Note 5) (1,360,476) (3,578,551) (3,100,302) 478,249
Total Other Financing Sources and Uses (1,251,476) (3,474,551) (2,884,599) 589,952
Net Change in Fund Balances (3,568,422) (5,908,336) 1,615,010 7,523,346
Fund Balances -Beginning 16,191,731 21,028,666 21,028,666 -
Fund Balances -Ending $ 12,623,309 $ 15,120,330 $ 22,643,676 $ 7.523,346
RECONCILIATION OF PERSPECTIVE DIFFERENCE BETWEEN BUDGETARY INFORMATION AND
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP):
The Cumulative Reserve Fund is combined with
the General Fund for purposes of GASB Statement 54 9,799,312
The Fire, Relief& Pension Fund is combined with
the General Fund for purposes of GASB Statement 73 2,317,794
Fund Balance-Ending (GAAP) $ 34,760,782
The notes to the basic financial statements are an integral part of this statement.
Washington State Auditors Office Page 40
City of Auburn,Washington
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
ARTERIAL STREET FUND
For the Year Ended December 31, 2017
Budget Amounts Variance with
Final Final Budget
Original Adopted Actual Positive
(GAAP Basis) (GAAP Basis) Results (Negative)
REVENUES:
Intergovernmental $1,717,965 $10,632,292 $7,043,677 ($3,588,615)
Charges for Services - 466,191 - (466,191)
In estment Earnings 2,600 2,600 11,173 8,573
Miscellaneous 100,000 809,221 709,222 (99,999)
Total Revenues 1,820,565 11,910,304 7,764,072 (4,146,232)
EXPENDITURES:
Current:
Transportation 2,580,646 16,304,793 9,618,924 6,685,869
Debt Service
Principal 197,376 197,376 197,376 -
Interest and Other Costs 12,135 12,135 12,135 -
Total Expenditures 2,790,157 16,514,304 9,828,435 6,685,869
Excess(Deficiency)of Revenues
Over(Under Expenditures (969,592) (4,604,000) (2,064,363) 2,539,637
OTHER FINANCING SOURCES (USES):
Transfers In(Note 5) 718,511 3,420,622 1,999,610 (1,421,012)
Transfers Out (Note 5) (4,661) (15,046) (7,024) 8,022
Total Other Financing Sources and Uses 713,850 3,405,576 1,992,586 (1,412,990)
Net Change in Fund Balances (255,742) (1,198,424) (71,777) 1,126,647
Fund Balances -Beginning 1,632,556 2,655,913 2,655,913 -
Fund Balances - Ending $ 1,376,814 $ 1,457,489 $ 2,584,136 $ 1,126,647
The notes to the basic financial statements are an integral part of this statement.
Washington State Auditor's Office Page 41
City of Auburn,Washington
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
December 31,2017
Governmental
Enterprise Funds Activities
Non-Major Total
Sanitary Storm Solid Enterprise Enterprise Internal
Water Sewer Drainage Waste Funds Funds Service Funds
ASSETS:
Current Assets
Cash and Cash Equivalents $ 5,765.412 $ 16,427,725 $ 14,545,114 $ 4,677,646 $ 1,773,446 $ 43,189,343 $ 16,137,719
Restricted Cash:
Bond Payments 1.690,316 535,820 804,480 - - 3.030,616 -
Customer Deposits 43,892 79,473 3,422 - 89,180 215,967 -
Other 1,630.313 516,173 1,195,817 - - 3,342,303 -
Customer Accounts 1,363.945 2,745,457 1,066,124 1,701,592 6,982 6,884,100 16,685
Due From Other Govemmental Units 17,968 - 70,124 69,534 13,990 171,616 6,211
Inventories 135,450 9,103 7,390 - 8,500 160,443 242,217
Total Current Assets 10,647,296 20,313,751 17,692.471 6.448,772 1,892,098 56,994,388 16,402.832
Noncurrent Assets
Long-Term Contracts and Notes - 645,900 - - - 645,900 -
Capital Assets:
Land 897,971 1,695,023 5,937,014 - 3,996,179 12,526.187 -
Intangible-Water Rights 5,449,186 - - - - 5.449,186 -
Buildings and Equipment 2,509,599 1,255,947 290,575 496,618 4,064,521 8,617.260 25,051,494
Improvements Other Than Buildings 131.463,582 101,366,336 79,177,949 - 11,082,929 323,090,796 117,158
Construction in Progress 8.374,328 1,121.482 459,310 - 318,488 10,273.608 109,048
Less: Accumulated Depreciation (54,538,817) (31,609,927) (26,325,396) (449,569) (9.159,423) (122,083,132) (16,963,844)
Total Capital Assets(Net of A/D) 94,155,849 73,828,861 59,539.452 47,049 10,302,694 237,873,905 8,313.856
Total Noncurrent Assets 94,155,849 74.474,761 59,539.452 47,049 10.302.694 238,519,805 8.313,856
Total Assets 104.803,145 94,788,512 77,231,923 6,495.821 12,194,792 295,514,193 24,716,688
DEFERRED OUTFLOW OF RESOURCES:
Deferred Outflow from Bond Refunding - - - - 21,837 21,837 -
Deferred Outflow related to Pensions 312,206 200.138 292,611 51,059 50,638 906,652 310,456
312,206 200,138 292,611 51.059 72,475 _ 928,489 310,456
LIABILITIES:
Current Liabilities:
Current Payables 1,354,856 393,163 391,180 1,364.777 169,112 3,673,088 771,960
Customer Deposits - - - - - - 300
Interfund Payables(Note 5) - - - - 93,782 93.782 -
Loans Payable-Current 634,328 288,262 - - - 922.590 -
Employee Leave Benefits-Current 125,285 103.747 173.857 23,140 18,464 444,493 209,418
Revenue Bonds Payable-Current 871,737 262.685 425,578 - - 1,560,000 -
General Obligation Bonds Payable-Current - - - - 176.401 176,401 -
Accrued Interest 828,486 279,081 377,766 - - 1,485,333 -
Deposits 43,892 79,473 3,422 - 88,407 215,194 -
Other Liabilities Payable 600 172 469 141 - 1,382 41,608
Total Curren(Liabilities 3.859,184 1,406,583 1,372,272 1,388,058 546,166 8,572,263 1.023,286
Noncurrent Liabilities
Employee Leave Benefits 37,836 31,332 52,506 6,988 5,576 134,238 63,246
Other LT Liabilities Payable - - - - - - 67,861
Loans Payable 3,689,390 2,090,408 - - - 5,779.798 -
Revenue Bonds Payable 14,899,559 4.206,276 7,495.862 - - 26.601,697 -
General Obligation Bonds Payable - - - - 186.421 186,421 -
Net Pension Liability 2.775,633 1,130,142 1,339,843 195,660 171.669 5,612,947 1,890,356
Total Noncurrent Liabilities 21,402,418 7,458,158 8,888,211 202,648 363,666 38,315,101 2,021,463
Total Liabilities 25,261,602 8.864,741 10,260,483 1,590,706 909,832 46,887,364 3,044.749
DEFERRED INFLOW OF RESOURCES:
Deferred Inflow related to Pensions 372,104 198,614 284,225 33,442 39,112 927,497 337,021
NET POSITION:
Net Investment in Capital Assets: 75,751,151 67,517,050 52,422,492 47,049 9,939,872 205,677,614 8.204,387
Restricted for:
Debt Service 801,827 237.092 398,648 - - 1,437,567
-
Rate Stabilization - - 419,403 - - 419,403 -
Unrestricted 2,928,667 18,171.153 13,739,283 4,875,683 1,378,451 41,093,237 13,440.987
Total Net Position $ 79,481,645 $ 85,925,295 $ 66,979,826 $ 4,922,732 $ 11,318,323 $ 248,627,821 $ 21.645,374
Adjustment to reflect the consolidation
of internal service funds related to
enterprise funds 534,257
Net position of business-type activities $ 249,162,078
The notes to the basic financial statements are an integral part of this statement.
Washington State Auditor's Office Page 42
City of Auburn,Washington
STATEMENT OF REVENUES,EXPENSES,AND CHANGES IN NET POSITION
PROPRIETARY FUNDS
For the Year Ended December 31,2017
Govemmental
Enterprise Funds Activities
Non-Major Total
Sanitary Storm Solid Enterprise Enterprise Internal
Water Sewer Drainage Waste Funds Funds Service Funds
OPERATING REVENUES:
Charges ofSenices $ 14.781,310 $ 26,369,496 $ 9,778,102 $ 15.079,932 $ 1,407,320 $ 67,416,160 $ 14,275,060
Other Operating Revenue - - - - 804,040 804,040 202,861
Total Operating Revenue 14,781,310 26,369,496 9,778,102 15,079.932 2,211,360 68,220,200 14,477,921
OPERATING EXPENSES:
Operations&Maintenance 3,753,573 19.055,093 3,379,046 12,749,847 1,201,009 40,138,568 10,158,005
Administration 4,672,569 4,464,901 3,372,935 1,770,178 358,309 14,638,892 861,891
Depreciation/Amortization 3.269,581 2,199,711 1,885,931 18,819 510,226 7,884,268 1,862,565
Other Operating Expenses 8,964 6,648 13,085 859 16,254 45,810 -
Total Operating Expenses 11,704,687 25,726,353 8,650,997 14,539,703 2,085,798 62,707,538 12,882,461
Operating Income(Loss) 3,076,623 643,143 1,127,105 540,229 125,562 5.512,662 1,595,460
NON-OPERATING REVENUE(EXPENSE):
Interest Revenue 104,564 164,566 151,733 41,713 16,556 479,132 135,747
Other Non-Operating Revenue 269,264 73,739 78,397 95,095 33,901 550,396 142,037
Gain on Sale of Capital Assets - - - - - - 16,512
Interest Expense (703,321) (258,270) (328,972) - - (1,290,563) (3,580)
Other Non-Operating Expenses - - - - (20.759) (20,759) -
Total Non-Operating Revenue(Expense) (329,493) (19,965) (98.842) 136,808 29,698 (281,794) 290,716
Income(Loss)Before Contributions&Transfers 2,747,130 623,178 1,028.263 677,037 155,260 5,230.868 1,886,176
Capital Contribution 1,176,756 873,779 2,313,033 - - 4.363,568 -
Transfers In(Note 5) 2,500,000 800,000 300.000 - 274,937 3,874,937 1,511,700
Transfers Out(Note 5) (2,693,946) (962,905) (672,122) - (400) (4,329,373) (944,803)
Change in Net Position 3.729,940 1,334,052 2,969,174 677,037 429,797 9,140,000 2,453,073
Net Position,January 1 75,751,705 84,591,243 64,010,652 4.245,695 10,888,526 239,487,821 19.192,301
Net Position,December31 $ 79,481,645 $ 85.925,295 $ 66,979,826 $ 4,922.732 $ 11,318,323 $ 248,627,821 $ 21,645.374
Change in net position from this statement 9,140,000
Adjustment to reflect the consolidation of intemal service fund
activities related to enterprise funds 623,905
Change in net position of business-type activities $ 9,763,905
The notes to the basic financial statements are an integral part of this statement.
Washington State Auditor's Office Page 43
City of Auburn,Washington
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
For the Fiscal Year Ended December 31,2017
Page 1 of 2
Govamment
Non Major ActiAties
Sanitary Storm Solid Enterprise Internal
Water Sewer Drainage Waste Funds Total Service Funds
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash Recei'ed from Users $ 14,724480 $26292293 $ 9,755,335 5 14,937,407 $ 2,212,749 $ 67,922,744 $ 14,465,507
Cash Paid to Suppliers for Goods&Services (4,017,089) (21,169,781) (3,548,224) (13,973,052) (812,879) (43,521,025) (6,466,879)
Cash Paid for Taxes - (45) (817) (858) (16,302) (18,022) -
Cash Paid to Employees (3,855,381) (2,512,575) (3,765,255) (478,771) (721404) (11,333,386) (4,542,201)
Other Cash Received 69,054 - - - - 69,054 (127)
Other Non-Operating Reeenue - 1,978 20,988 - 13,740 36,706 -
Net Cash Prodded(Used)by Operating Actisities 6,921,044 2,612,370 2,462,027 484,726 675,904 13,156,071 3,436,300
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
Interfund Loan Payable - - - - (39,900) (39,900) -
Operating Grant 170210 71,903 425,355 90,316 20,161 777,945 57,928
Transfers In 2,500,000 800,000 300,000 274,937 3,874,937 1,511,700
Transfers Out (2,693,946) (962,905) (672,122) - (400) (4,329,373) (944,803)
Net Cash Prodded(Used)by Noncapital Financing Actisfties (23,736) (91,002) 53233 90,316 254,798 283,609 624,825
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES:
Proceeds from Sale of Equipment - - - - - - 189,666
Purchase of Capital Assets (7,634,783) (1,586,105) (2,050,838) - (398,059) (11,669,765) (2,205,690)
Contributed Capital 597,556 458,574 817,846 - - 1,873,976 -
Capital Grants .. - 20,887 20,887 -
Proceeds from Other Govamments - 22,500 - - - 22,500 -
Proceeds horn Insurance Settlement 19,970 - - 19,970 84,067
Bond Issuance Costs - - - - 10,918 10,918 -
Principal Payment on Debt (1,468,079) (541,127) (413,162) - (171,023) (2,593,391) -
Interest Payment on Debt (814,960) (276,483) (361,994) - (20,759) (1,474,196) (3,580)
Debt Proceeds 91,990 - - - - 91,990 (3,580)
Net Cash Prodded(Used)for Capital and Related Financing Actiaties (9,208286) (1.922,641) (2,008,148) - (558,036) (13,697,111) (1.939,117)
CASH FLOW FROM INVESTING ACTIVITIES:
Interest Receised 104,564 164,566 144,461 41,713 16,556 471,860 135,747
Net Cash Prodded(Used)in hosting ActiNties 104,564 164566 144,461 41213 16,556 471,860 135,747
Net Increase(Decrease)in Cash and Cash Equivalents (2,206,414) 763,293 651,573 616,755 389,222 214,429 2,261,335
Cash and Cash Equtvatents-Beginning of Year 11,336,347 16,795,898 15,897,260 4,060,891 1,473,404 49,563,800 13,876,384
Cash and Cash Equivalents•End of Year $ 9,129,933 $ 17,559,191 $ 16,548,833 $ 4,677,846 $ 1,862,626 $ 49,778,229 $ 16,137,719
CASH AT END OF YEAR CONSISTS OF:
Cash and Cash Equivalents 5,765,412 16.427,725 14,545,114 4,677,646 1,773,446 43,189,343 16,137,719
Restricted Cash-Bond Payments 1,690,316 535,820 804,480 - - 3,030,616 -
Restricted Cash-Customer Deposits 43,892 79,473 3,422 - 89,180 215,967 -
Restricted Cash-Other 1,630,313 516,173 1,195,817 - • 3,342,303 -
Total Cash $ 9,129,933 $ 17,559,191 $ 16,548,833 $ 4,677,646 $ 1,862,626 $ 49,778.229 $ 16,137,719
The notes to the basic financial statements are an integral part of this statement.
Washington State Auditor's Office Page 44
•
City of Auburn,Washington
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
For the Fiscal Year Ended December 31,2017
Page 2of2
Goeemment
Non Major Actitities
Sanitary Storm Solid Enterprise Internal
Water Sewer Drainage Waste Funds Total Service Funds
RECONCILIATION OF NET OPERATING INCOME TO NEW CASH
PROVIDED BY OPERATING ACTIVITIES
Operating Income(Loss) $ 3,076,623 $ 643,143 $ 1,127,105 $ 540,229 $ 125,562 $ 5,512,662 $ 1,595.460
ADJUSTMENTS TO RECONCILE OPERATING INCOME TO
NET CASH PROVIDED(USED)BY OPERATING ACTIVITIES:
Depreciation 3,269,581 2,199,711 1,885,931 18,819 510,226 7,884,268 1,862,565
Other Non-Operating Revenue 69,054 1,978 20,988 13,740 105,760 42
Asset(Increases)Decreases:
Accounts Receivable (64,903) (78,959) (22,767) (142,525) (6,982) (316,136) (12,583)
Inventory 5.064 (1,022) (373) - (505) 3,164 (17,101)
Liability Increases(Decreases):
Accounts&Vouchers Payable 754,947 (74,038) (408,745) 98,676 54,295 425,135 154,337
Deposits Payable 8,053 2,256 - 8,371 18,680 -
Wages&Benefits Payable (135,737) (85,965) (141,900) (23,148) (23,209) (409,959) (157,847)
Compensated Absences Payable (61,638) 5,266 1,788 (7,325) (5,594) (67,503) 11,427
Total Adjustments 3,844,421 1,969,227 1,334,922 (55,503) 550,342 7,643,409 1,840.840
Net Cash Protided(Used)by Operating Actitities $ 6,921,044 $ 2,612.370 $ 2,462,027 $ 484,726 $ 675,904 $ 13,156,071 $ 3,436,300
SCHEDULE OF NONCASH INVESTING,CAPITAL AND
FINANCING ACTIVITIES
Capital Assets Acquired by Contributed Capital 579,200 415205 1,495,187 - - 2.489,592 -
Total Non Cash Investing,Capital and Financing Actitities $ 579,200 $ 415205 $ 1,495,187 $ - $ • $ 2,489,592 $
The notes to the basic financial statements are an integral part of this statement.
Washington State Auditor's Office Page 45
City of Auburn, Washington
STATEMENT OF FIDUCIARY NET POSITION
FIDUCIARY FUNDS
December 31, 2017
Agency
Fund
ASSETS:
Cash and Cash Equivalents $ 527,745
Receivables:
Customer Accounts 6,853
Total Assets 534,598
LIABILITIES:
Current Payables 485,094
Due to Other Gmemmental Units 49,504
Total Liabilities 534,598
The notes to the financial statements are an integral part of this statement.
Washington State Auditor's Office Page 46
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 2017 financial statements have been presented in accordance with the following new Governmental Accounting
Standards Board(GASB)Statements:
a. GASB Statement No.73—Accounting and Financial Reporting for Pensions and Related Assets That Are Not within the
Scope of GASB Statement 68,and Amendments to Certain Provisions of GASB Statements 67 and 68. The objective of
this statement is to improve the usefulness of information about pensions included in the general purpose external
financial reports of state and local governments for making decisions and assessing accountability. This Statement
features two effective dates. The requirements of Statement 73 that address accounting and financial reporting by
employer and governmental non-employer contributing entities for pensions that are not within the scope of
Statement 68 were incorporated into the City's 2016 CAFR. The requirements of Statement 73 for pension plans
that are within the scope of Statement 67 or for pensions that are within the scope of Statement 68 are
implemented in the City's 2017 CAFR. There is no material impact to the City in implementing this standard.
b. GASB Statement No.82- Pension Issues. This statement addresses issues regarding(1)the presentation of payroll-
related measures in required supplementary information, (2)the selection of assumptions and the treatment of
deviations from the guidance in an Actuarial Standard of Practice for financial reporting purposes, and (3) the
classification of payments made by employers to satisfy employee(plan member)contribution requirements. There
is no material impact to the City in implementing this standard.
The City's significant accounting policies are described in the following notes.
A. Reporting Entity
In accordance with the criteria set forth in Statement No.14 of the Governmental Accounting Standards Board(GASB)the
City's Comprehensive Annual Financial Report(CAFR)includes all funds controlled by the City.
Joint Ventures-Based on the criteria of Governmental Accounting Standards Board(GASB)Statement No.14 as modified by
GASB Statements No. 34 and 61, the Valley Communications Center and South Correctional Entity Facility (SCORE) are
included in the accompanying government-wide statement of net position as a joint venture. (Refer to Notes 9 and 15).
Jointly Governed Organizations-The cities of Auburn,Algona and Pacific formed the Valley Regional Fire Authority(VRFA)
effective January 1,2007. The VRFA is a separate municipal corporation of the State of Washington,organized as a regional
fire protection service authority under RCW 52.26. The VRFA is not financially accountable to the member cities,none of the
participating cities has an ongoing financial interest in the VRFA,and the VRFA is not financially dependent upon any member
city. The VRFA imposes its own property tax levy and fire benefit charge. As such,the VRFA is not included in the City of
Auburn's financial reporting entity.
The government-wide financial statements consist of the government-wide statement of net position and the government-
wide statement of activities.
B. Basic Financial Statements
The City's basic financial statements consist of government-wide financial statements and fund financial statements. The
government-wide financial statements, which include the statement of net position and the statement of activities,
summarize the entire operation of the City. The governmental fund financial statements,which include the balance sheet,
Washington State Auditor's Office Page 47
statement of revenues,expenditures and changes in fund balance,and statements of revenues,expenditures and changes
in fund balance budget and actual,provide a more detailed level of reporting. The proprietary fund financial statements,
which include statement of net position,statement of revenues, expenses, and changes in net position and statement of
cash flows,provide a more detailed level of reporting.
The government-wide financial statements report information on all of the non-fiduciary activities of the City. For the most
part, the effect of interfund activity has been eliminated from these statements. Because governmental activities are
normally supported by taxes and intergovernmental revenue,while business-type activities are generally supported through
user fees and charges,governmental activities are reported separately from business-type activities on all government-wide
financial statements.
The Statement of Net Position reports the assets, deferred outflows of resources, deferred inflows and liabilities of the
primary government. The net position section of this statement represents the residual amount of assets and their
associated liabilities, deferred outflow and deferred inflows of resources. The net position section is divided into three
categories. The first category is Net Investment in Capital Assets, which includes all capital assets, net of accumulated
depreciation, less the outstanding balances of any borrowing (bonds, loans) used for acquisition, construction, or
improvement of those assets. Capital assets cannot readily be sold and converted into cash. The second category is
Restricted Net Position,which includes those assets,net of their related debt that have a constraint placed on their use. The
constraints are either: i)externally imposed by creditors, such as through debt covenants,grantors,contributors,or laws
and regulations of other governments,or 2)imposed by law through constitutional provisions or enabling legislation. The
final section is Unrestricted Net Position, and this represents net position that generally can be used for any purpose.
However,they are not necessarily in a spendable form,such as cash.
The statement of activities demonstrates the degree to which the direct expenses of various functions and activities of the
City are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or activity.
The City's policy is to allocate indirect costs to a specific function or segment. Program revenues include i) 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.
Separate financial statements are included for governmental 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 balance/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 fund financial statements. 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
Washington State Auditor's Office Page 48
available if they are collected within the current period or soon enough thereafter(3o 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"unavailable revenue",since they are not considered to be available.
Sales Tax Revenues-The State of Washington collects all sales taxes. Auburn's portion is remitted to the City by the State
monthly. The sales tax received in January is recognized as revenue in current year even though received in the subsequent
year because of when the underlying transaction occurred and the resources are considered to be measurable and available.
Grant Revenues-On cost reimbursement grants,grant revenue is recognized when the eligible expenditure is incurred.
Under the modified accrual basis,expenditures are recorded when the fund liability is incurred,except for the un-matured
interest and principal on general long-term debt,which is recognized when due,and for compensated absences which are
recorded as expenditures when liquidated from expendable available fund resources. Purchases of capital assets from
governmental funds are reported as expenditures during the year incurred and the asset is capitalized and reported on the
government-wide statement of net position. Long-term liabilities,including compensated absences not currently due and
payable,are also reported on the government-wide statement of net position.
The accrual basis of accounting is followed in all proprietary and agency 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 and deferred inflow of resources generally are included on these balance sheets.
Reported fund balance is considered a measure of "available spendable resources". Governmental fund operating
statements focus on measuring cash flows rather than net income;and present increases(revenues and other financing
sources)and decreases(expenditures and other financing uses)in net current assets.
a. General fund-This fund is used to account for all financial resources and transactions of the City not accounted
for in another fund,as required. The general fund is always considered a major fund.
b. Special Revenue funds-These funds are used to account for the proceeds of specific revenue sources(other
than major capital projects) that are legally restricted to expenditures for specified purposes. One special
revenue fund is considered major:the arterial street fund. This fund is supported by the State of Washington's
motor vehicle fuel tax and by various grants 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 local
improvement districts(LID)guarantee fund which provides financial security for outstanding LID bonds. No
debt service funds are considered major funds and are reported within the"Other Governmental Funds".
Washington State Auditor's Office Page 49
d. Capital Projects funds-These funds are used to account for financial resources to be used for the acquisition
or construction of major capital facilities other than those financed by proprietary funds. One capital project
fund is considered major: the capital improvement projects fund. This fund accounts for major capital
acquisitions,and street and parks construction projects.
e. Permanent funds-These funds are used to account for resources that are legally restricted to the extent that
only earnings,and not principal,may be used for purposes of supporting a specific City program. The city has
one permanent fund,Cemetery Endowment.
2. Proprietary Fund Types
Financial statements for proprietary funds use the economic resources measurement focus and the accrual basis of
accounting. This means that all assets and all liabilities(whether current or non-current)associated with proprietary
fund activity are included on the Statement of Net Position. Under the accrual basis of accounting, revenues are
recognized when earned and expenses are recorded when incurred. The economic resources measurement focus is
applied in the determination of financial position,net income,and cash flow.
Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and
expenses generally result from providing services and producing and delivering goods in connection with a proprietary
fund's principal ongoing operations. The principal operating revenue of the City's utility funds,other enterprise funds,
and internal service funds are charges to customers for sales and services, vehicle and computer replacement, and
insurance. Operating expenses for enterprise funds and internal service funds include the cost of sales and services,
administrative expenses, taxes, and depreciation on capital assets. All revenues and expenses not meeting this
definition are reported as non-operating revenues and expenses,or as capital contributions. Substantially all proprietary
fund operating revenues are used as security for revenue bonds.
GASB Statement No.62 Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30,1989
FASB and AICPA Pronouncements, provides a codification of private-sector standards of accounting and financial
reporting issued prior to December 1,1989,to be followed in the financial statements of proprietary fund types. The
City has adopted provisions of GASB Statement No.62.
a. Enterprise funds-These funds are used to account for services to the general public where all or most of the
costs,including depreciation,are to be financed or recovered from users of such services.Four 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.
b. Internal Service funds-These funds are used to account for the financing of goods and services provided to
other funds,departments,or governments on a cost reimbursement basis. The City uses internal service funds
to account for its fleet of vehicles, its maintenance and operation of facilities, the City-wide provision of
computer hardware and software services,the cost of employees affected by an occupational injury or illness,
and its insurance premiums.
3. Fiduciary Fund Types
Fiduciary funds are used to account for assets held by the City in a trustee capacity or as an agent for individuals,private
organizations, other governments, and/or other funds. Fiduciary funds are classified for accounting measurement
purposes as either a governmental fund or a proprietary fund. The city has one fiduciary fund, an Agency Fund. The
Agency fund is custodial in nature on behalf of another individual, entity, or government and does not involve a
measurement of results of operations.
Washington State Auditor's Office Page 50
D. Budget and Budgetary Accounting
The City of Auburn budgets in accordance with the Revised Code of Washington (RCW)35A.33 for the general fund and
special revenue funds. For governmental funds, there are no substantial differences between the budgetary basis and
generally accepted accounting principles. Budgetary accounts are integrated in fund ledgers for all budgeted funds,but the
financial statements include budgetary comparisons for the biennial budgeted governmental funds only. Budgets
established for proprietary and trust funds are"management budgets",and are not legally required to be reported and,as
such,are not reported in the CAFR.
The biennial budget is proposed by the Mayor and adopted by the City Council with legal budgetary control at the fund level;
i.e.,expenditures and other financing sources may not exceed budgeted appropriations at the fund level. The Mayor may
authorize transfers within funds;however,the City Council must approve by ordinance any amendments that increase the
total for the fund. Any unexpended appropriation balances lapse at the end of the fiscal year.
The City prepares the biennial budget on the modified accrual basis, which conforms to Generally Accepted Accounting
Principles(GAAP). The CAFR includes budgetary comparisons for those governmental funds with legally adopted budgets.
Budget amounts include the adopted current year budget appropriations and any revisions made during the year.
State law establishes the budget process and the time limits under which a budget must be developed. The City follows the
procedures outlined below to establish its biennial budget:
a. Sixty days prior to each odd numbered fiscal year,the Mayor submits to the City Council a preliminary budget for
the biennium commencing the following January 1". The operating budget includes proposed expenditures and
funding sources.
b. Public hearings are conducted at the Auburn City Council Meetings to obtain taxpayer comments.
c. Prior to December 3152,the budget is legally enacted through passage of an ordinance.
d. The final operating budget as adopted is published and distributed after adoption. Copies of the budget are made
available to the public.
ORIGINAL AND SUPPLEMENTAL APPROPRIATIONS
Original Final
Budget Revisions Budget
Governmental Funds
General Fund $ 64,735,515 $ 3,742,398 $ 68,477,913
Total Governmental Funds 64,735,515 3,742,398 68,477,913
Special Revenue Funds:
Local Street $ 1,600,000 $ 1,264,398 $ 2,864,398
Arterial Street 12,320,712 6,484,926 18,805,638
Hotel/Motel Tax 86,000 141,500 227,500
Arterial Street Preservation 2,884,378 2,112,193 4,996,571
Drug Forfeiture Fund 273,027 - 273,027
Housing and Community Development 440,000 715,398 1,155,398
Business Improvement Area 55,000 - 55,000
Cumulative Reserve 1,917,084 36,214 1,953,298
Mitigation Fees 1,221,827 2,719,018 3,940,845
Total Special Revenue Funds 20,798,028 13,473,647 34,271,675
Total Budgeted Funds $ 85,533,543 $ 17,216,045 $ 102,749,588
Washington State Auditor's Office Page 51
E. Assets,Liabilities,and Fund Balance
1. Deposits and Investments
It is the City's policy to invest all temporary cash surplus. At December 31,2017,the Washington State Local Government
Investment Pool(LGIP)was holding$116,427,623 in short-term investments. This amount is classified on the Statement
of Net Position as cash and cash equivalents. The interest on these investments is prorated to the various funds based
upon ownership of investments. For purposes of the Statement of Cash Flows,cash and cash equivalents includes cash
on deposit with financial institutions in both demand and time deposit accounts, and amounts invested in the Local
Government Investment Pool,administered by the State Treasurer's Office because it is operated in a manner consistent
with a Securities and Exchange Commission's Rule 2a-7 of the Investment Company Act of 1940. The State Finance
Committee is the administrator of the statute that created the pool and adopts appropriate rules.The State Treasurer's
Office is responsible for establishing the investment policy for the pool and reviews it annually.Any proposed changes
are reviewed by the LGIP Advisory Committee.The terms of the policy are designed to ensure the safety and liquidity of
the funds deposited in the LGIP.
The City, by state law, is authorized to purchase certificates of deposit issued by Washington State depositories that
participate in Washington Public Deposit Protection Commission(WPDPC),U.S.Treasury and Agency securities,banker's
acceptances, and repurchase agreements. The City purchases repurchase agreements only from institutions that use
authorized securities for collateral. The City of Auburn also has signed a"master repurchase agreement"with its primary
bank,Key Bank.
For purposes of the statement of cash flows,all proprietary fund types and similar trust funds consider all highly liquid
investments(including restricted assets)with maturity of three months or less when purchased to be cash equivalents.
Investments are recorded at fair value or amortized cost. Adjustments are made to cost for investments amortized over
the period to maturity in accordance with GASB Statement No.31. The investment in the state investment pool is valued
at amortized cost.
2. Receivables
Taxes receivable consist of property taxes (see Note 4). Accrued interest receivable consists of amounts earned on
notes and contracts at the end of the year.
Customer accounts receivable consist of amounts owed by private individuals or organizations for goods and services
provided. Uncollectible amounts are considered immaterial and the direct write-off method is used.
Special assessments are levied against certain property owners and become liens against the property benefited by the
improvement. Special assessments receivable consist of current assessments,which are due within one year,delinquent
assessments remaining unpaid after the due date,and unearned,uncollected assessments,which have been levied,but
are not due within one year.
Other receivables include utility taxes due from private organizations and customer accounts receivable,which consist
of amounts owed from private individuals or organizations for goods and services, including amounts owed for which
billings have not been prepared. Notes and contracts receivable consist of amounts owed on open accounts from
private individuals or organizations for goods and services rendered.
3. Interfund Receivables and Payables
These accounts include all interfund receivables and payables. A separate schedule of interfund activity is furnished in
Note 5.
Washington State Auditor's Office Page 52
4. Amounts Due From Other Governmental Units
This account includes amounts due from other governments for grants, entitlements and charges for services. A
schedule by fund of amounts due from other governmental units is presented in Note 6.
5. Inventories and Prepaid Expenses
Government fund types recognize the cost of inventory items and prepaid expenses (expenses that benefit future
periods)as expenditures in the year of purchase. In governmental funds,materials and supplies remaining at year-end
are immaterial and not included in inventory. In enterprise and internal service funds, inventories are valued at cost
using the weighted average costing method.
6. Restricted Assets
In accordance with the utility bond ordinances, state law,or other agreements, separate restricted assets have been
established. These assets are restricted for specific purposes including the establishment of bond reserve funds,utility
rate stabilization funds,financing the ongoing capital improvement programs of the various utilities,customer deposits,
nonexpendable permanent cemetery endowment and other purposes.
7. Interfund Transactions
During the course of normal operations, the City has numerous transactions between City funds. Interfund services
provided and used, such as buying goods and services, are recorded as revenues in the internal service funds and
expenditures in the paying fund. Transfers between funds are included as "other financing sources or uses" in
governmental fund types and as other items in proprietary fund types.
8. Capital Assets
Capital assets are recorded at historical cost when known or at estimated historical cost when actual costs are not
known. Infrastructure,such as roads,bridges and water mains,is reported in the applicable government or business-
type activities columns in the government-wide statement of net position. All infrastructure costs have been calculated
and are reported. Government-donated capital assets are stated at their market value on the date donated.
Major outlays for capital assets and improvements are capitalized as projects are constructed. The costs of normal
maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized.
For proprietary funds, interest costs incurred to bring certain assets to the condition and location necessary for their
intended use are capitalized as part of the historical cost of acquiring the assets. Additionally,in situations involving the
acquisition of certain assets financed with the proceeds of tax-exempt borrowing, any interest earned on related
interest-bearing investment from such proceeds are offset against the related interest costs in determining either
capitalization rates or limitations on the amount of interest costs to be capitalized.
Capital assets of enterprise and internal service funds are recorded at cost. The capital assets of the airport are carried
at cost and include those acquired with capital contributed by the Federal Government.
Capital assets of all funds are depreciated, and are calculated on the straight-line method using estimated lives as
follows:
Capitalization Estimated Useful
Asset Threshold Depreciation Method Life
Building $5,000 Straight-line 20-5o years
Other Improvements $5,000 Straight-line io-5o years
Equipment/Machinery $5,000 Straight-line 2-20 years
Infrastructure $5,000 Straight-line 25-5o years
Utility Plant $5,000 Straight-Line 25-5o years
Washington State Auditor's Office Page 33
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. Pensions
For purposes of measuring the net pension liability,deferred outflows of resources and deferred inflows of resources
related to pensions,and pension expense,information about the fiduciary net position of all state sponsored pension
plans and additions to/deductions from those plans'fiduciary net position have been determined on the same basis as
they are reported by the Washington State Department of Retirement Systems. For this purpose, benefit payments
(including refunds of employee contributions) are recognized when due and payable in accordance with the benefit
terms. Investments are reported at fair value.
io. Deferred Outflows/Inflows of Resources
Deferred outflow of resources is the consumption of net position by the government that is applicable to a future
reporting period. The deferred amount on special assessments consist of special assessments not due within one year
is reported as deferred outflows of resources in the governmental funds. Deferred inflow of resources is acquisition of
net position by the government that is applicable to a future reporting period. The difference between the carrying
amount of redeemed and/or defeased debt and its reacquisition price is the deferred amount on refunding and is
amortized over the remaining life of the debt,or the life of the new debt,whichever is shorter. Deferred outflows and
deferred inflows of resources related to pensions are reported for differences between expected and actual experience,
changes of assumptions,and differences between projected and actual returns on pension plan investments.
n. 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 96o hours. Sick leave accumulations
over 96o hours at year-end are paid at 25%. Sick leave is not paid upon termination except in some instances upon
separation in good standing,where employees hired before 12130984 can be reimbursed at their current rate for unused
sick leave up to a maximum of 96o 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 8o hours of compensatory time. The City reports compensated
absences as liabilities in the government-wide statement of net position and in proprietary funds. Vacation,
compensatory time,and sick leave are calculated separately for each employee using the rules described above. The
reporting format is in compliance with GASB statement No.16.
Governmental funds recognize expenditures for vacation, sick, and compensatory time when paid. Proprietary and
pension trust funds recognize the expense and accrue a liability for vacation and sick leave pay as the leave is earned.
All compensated absence liabilities include salary-related payments,where applicable.
12. Unearned Revenues
This account reflects the amounts of taxes and other long-term receivables for which the revenue recognition criteria
have not been met. It also reflects prepayments on accounts and grants received in advance.
Washington State Auditor's Office Page 54
13. Fund Balance Components-Proprietary Funds
In proprietary funds, net position is generally restricted in connection with restricted assets or for legal segregation.
These restrictions are identified on the statement of net position of each fund type.
The City holds and administers a Utility System Rate Stabilization Fund. The City may,by ordinance,withdraw from the
Rate Stabilization Fund for inclusion in the net revenue of the Utility System at any time for any current fiscal year of the
Utility System, except that the total amount withdrawn from the Rate Stabilization Fund in any fiscal year may not
exceed the total debt service of the Utility System in that year.
14. Fund Balance Components—Governmental Funds
Fund balance is presented in the governmental fund financial statements and represents the difference between assets
and liabilities reported within the governmental fund.
Beginning with the most restrictive constraints,fund balance amounts are reported in the following categories:
a. Nonspendable fund balance includes items that cannot be spent. This includes activity that is not in a
spendable form (investments, prepaid amounts, long-term portion of loans/notes receivable, or property
held for resale unless the proceeds are restricted, committed or assigned) and activity that is legally or
contractually required to remain intact.
b. Restricted fund balance is externally (outside the City) enforceable limitations imposed by creditors,
grantors, contributors, laws and regulations of other governments, or laws through constitutional
provisions or enabling legislation.
c. Committed fund balance is self-imposed limitations imposed at the highest level of decision making
authority, namely, Mayor and City Council. Mayor and City Council approval by ordinance is required to
commit,modify or rescind resources.
d. Assigned fund balance includes amounts that are constrained by the City's intent to be used for a specific
purpose,but are neither restricted nor committed. It is the City's policy that the Finance Director shall have
the authority to assign amounts of fund balance to a specific purpose; however, before expenditure,
amounts must be appropriated by the City Council which is often adopted by City Council in the biennial
budget ordinance. For governmental funds,other than the General Fund,this is the residual amount within
the fund that is not restricted or committed.
e. Unassigned fund balance is the residual amount of the General Fund not included in the four categories
described above. Also,any deficit fund balances within the other governmental fund types are reported as
unassigned.
When expenditure is incurred for purposes for which both restricted and unrestricted resources are available,it is the
City's policy to use restricted resources first. When expenditures are incurred for purposes, for which unrestricted
(committed,assigned,and unassigned)resources are available,and amounts in any of these unrestricted classifications
could be used,it is the City's policy to spend committed resources first,then assigned and unassigned,in that order.
Washington State Auditors Office Page 55
The following shows the composition of the fund balance of the governmental funds for the fiscal year ended December
31,2017:
Governmental Fund Balances
December 31,2017
Major
Arterial Capital Other Total
General Street Improvement Governmental Governmental
Fund Fund Fund Funds Funds
Nonspendable
Inventory $ 30,453 $ - $ - $ - $ 30,453
Cemetery Endowment $ - $ - $ - $ 1,717,134 $ 1,717.134
Total Nonspendable 30.453 - - 1.717.134 1,747.587
Restricted
Major Street Construction - 2,584,136 - - 2,584.136
REET 1 Allowable Projects - - 4,824,406 - 4,824,406
REET 2 Allowable Projects - - 5,970,116 - 5,970.116
Arterial Street Presevation Fund - - - 1,557,947 1,557,947
Parks and Trails Construction Projects - - - 1.018.032 1.018,032
City Tourism Promotion - - - 200,371 200,371
Drug Investigation and Enforcement - - - 381,136 381,136
Community Development Block Grant Program - - - 44,904 44,904
Recreational Trail Development - - - 57,022 57,022
Downtown Business Area Improvements - - - 93,710 93,710
Street and Fire Service Mitigation Fees - - - 11,395,640 11,395,640
Debt Serdce - - - 9.686 9.686
Total Restricted - 2.584.136 10,794,522 14,758,448 28,137,106
Committed
Local Street Improvements(Save our Streets) - - - 2,766,701 2,766,701
Arterial Street Preservation - - - 456,407 456.407
Total Committed - - - 3.223,108 3.223.108
Assigned
Appropriations Over Estimated Revenue 9,315,528 - - - 9,315.528
Arterial Street Preservation Fund - - 477,323 25,483 502,806
Drug Investigation and Enforcement - - - 3,918 3,918
Recreation Trail Development - - - 504 504
Downtown Business Area Improvements - - - 763 763
Local Street Improvements - - - 176,649 176,649
School Administration Fees - - - 56,115 56,115
Cemetery Capital Enhancement and Maintenance - - - 94.375 94.375
Downtown Infrastructure Improvements - - - 374,966 374,966
Debt Service - - - 11,415 11,415
Total Assigned 9,315,528 - 477,323 744,188 10.537 039
Unassigned
Unassigned 25.414,801 - - - 25.414,801
Total Unassigned 25,414,801 - - - 25,414,801
Total Fund Balances $ 34,760,782 $ 2,584,136 $ 11,271,845 $ 20,442,878 $ 69,059,641
F. Revenues,Expenditures and Expenses
Operating revenues and expenses for the proprietary fund are those that result from providing services and producing and
delivering goods and/or services in connection with a proprietary fund's principal ongoing operations. For the city,
operating expenses for proprietary funds and internal service funds include the cost of sales and services,administrative
expenses, and depreciation of capital assets. All revenues and expenses not meeting this definition are reported as non-
operating revenues and expenses.
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.
Washington State Auditor's Office Page 56
G. Estimates
The preparation of the financial statements in conformity with accounting principles generally accepted in the United States
requires management to make estimates and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results may differ from those estimates.
NOTE 2—STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
There have been no material violations of finance-related legal or contractual provisions, and there have been no
expenditures exceeding legal appropriations in any of the funds of the City of Auburn.
NOTE 3-DEPOSITS AND INVESTMENTS
At December 31, 2017,the carrying amount of the City's cash demand deposits with Key Bank totaled $6,129,754 while the
bank balance was$6,341,880. In addition,the balance of the City's interest bearing checking account with Opus Bank totaled
$10,020,030. Furthermore,there was$18,800 in petty cash($10,000 in the Drug Forfeiture Fund to be used for enforcements
purposes,$8,800 in various petty cash and cashier change funds).
Custodial Credit Risk. Custodial credit risk is the risk associated with the failure of a depository financial institution. In the
event of a depository financial institution's failure, it is the risk that the City would not be able to recover its deposits or
collateralized securities that are in the possession of the outside parties.
The City minimizes custodial credit risk by following the restrictions set forth in state law.
The Federal Deposit Insurance Corporation(FDIC)insures the City's deposits up to$250,000.The Washington Public Deposit
Protection Commission (WPDPC) (established under Chapter 39.58 of the Revised Code of Washington) constitutes a
multiple financial institution collateral pool. Pledged securities under the WPDPC collateral pool are held by the WPDPC's
agent in the name of the collateral pool.
As required by State law, all investments of the City's funds are obligations of the U.S. Government, or deposits with
Washington State banks that participate in the WPDPC. Pension and permanent funds are not subject to these limitations.
All temporary investments such as the State Investment Pool are stated at amortized cost. Other investments are shown on
the statement of net position at fair value as of December 31, 2017. In accordance with GASB Statement 79, the state
investment pool (LGIP) is reported at amortized cost, and is operated in a manner consistent with the Securities and
Exchange Commission's Rule 2a-7 of the Investment Company Act of 1940. The LGIP meets the maturity, quality,
diversification and liquidity requirements as set forth in GASB Statement 79. The LGIP is an unrated external investment
pool,and was authorized by Chapter 294, Laws of 1986,and is managed and operated by the Washington State Treasurer.
The LGIP does not have any legally binding guarantees of share values. The LGI P does not impose liquidity fees or redemption
gates on participant withdrawals.
The Office of the State Treasurer prepares a stand-alone LGIP financial report. A copy of the report is available from the
Office of the State Treasurer,PO Box 40200,Olympia,Washington 98504-020o,online at http://www.tre.wa.gov.
During 2017,the net decrease in the fair value of investments being held for more than one year is$4,740 at year-end.
Washington State Auditor's Office Page 57
As of December 31,2017,the City had the following investments and maturities:
Schedule of Investments by Maturities
As of December 31,2017
Investment maturities
Fair Less than 1 to 2 2 to 3 Greater than
Investment Type Value 1 year years years 3 years
US Treasuries $ 992,430 $ - $ 992,430 $ - $
$ 992,430 $ - $ 992,430 $ - $
Reconciliation to government-
wide statement of net position:
Total investments above $ 992,430
Plus:cash in checking 16,149,783
Plus:petty cash 18,800
Plus:cash with outside agency (391)
Less:cash investments in fiduciary funds (527,745)
Total cash and investments at fair value $ 16,632,873
Amortized
Investment Type Cost
State investment pool(LGIP) 116,427,623 $ 116,427,623 $ - $ - $
$ 116,427,623 $ 116,427,623 $ - $ - $
Total cash and investments,government-
wide statement of net position $ 133.060,496
Reconciliation of Cash and Investments
Government-Wide Statement of Net Position
As of December 31, 2017
Governmental Business-Type
Activities Activities Total
Cash and Cash Equivalents $ 60,013,183 $ 43,189,343 $ 103,202,526
Cash with Outside Agencies (391) - (391)
Investments 992,430 - 992,430
Temporarily Restricted:
Cash and Cash Equivalents 20,559,911 6,588,886 27,148,797
Permanently Restricted:
Cash and Cash Equivalents 1,717,134 - 1,717,134
$ 83,282,267 $ 49,778,229 $ 133,060,496
The city measures and reports investments at fair value using the valuation input hierarchy established by generally accepted
accounting principles,as follows:
*Level 1—Quoted prices in active markets for identical assets or liabilities;
*Level 2— These are quoted market prices for similar assets or liabilities,quoted prices for identical or similar assets or
liabilities in markets that are not active,or other quoted prices that are not observable;
*Level 3— Unobservable inputs for an asset or liability.
Washington State Auditor's Office Page 58
At December 31,2017,the city had the following investments measured at fair value:
Investments and Derivative Instruments Measured at Fair Value
As of December 31, 2017
Fair Value Measurements Using
Significant
Quoted Prices in Other Significant
Active Markets for Observable Unobservable
Identical Assets Inputs Inputs
Investments by Fair Value Level 12/31/2017 (Level 1) (Level 2) (Level 3)
US Treasuries-Federal National Mortgage Assoc. $ 992,430 $ 992,430 $ - $ -
Total Investments by Fair Value Level $ 992,430 $ 992,430 $ - $ -
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 five years,unless an investment is matched to an
anticipated future cash flow. The segmented time distribution presented in the schedule of investments by maturity above
indicates how the City has managed its interest rate risk.
Credit Risk
Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. State law and the
City's investment policy limits the instruments in which the City may invest. These include:
1. United States bonds
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
it Interim financing warrants of local improvement districts
12. State Local Government Investment Pool
Washington State Auditor's Office Page 59
As of December 31,2017,the City had investments in a limited number of investment instruments as follows:
• U.S.Treasuries
• State Local Government Investment Pool
With the exception of the State Local Government Investment Pool which is not rated,all other investments above carried
a rating of Aaa by Moody's rating service at December 31,2017.
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. City investment policy restricts security holdings to 25-40%of
the City's total investment portfolio in a single security type. This restriction excludes US Treasury obligations and the
Washington State Local Government Investment Pool both of which may comprise t00%of the total investment portfolio.
Other information
Effective 2002,the City has established arrangements with Bank of New York for safekeeping of all investments.
The following is a schedule of investments by fund type:
Schedule of Investments by Fund Category and Investment Type
As of December 31, 2017
State
Investment U.S.
Pool Securities Total
General Fund $ - $ 992,430 $ 992,430
Permanent Fund - -
Enterprise Funds - - -
Internal Service Funds - - -
Fiduciary Funds - - -
Treasurer's Residual Funds 116,427,623 - 116,427,623
Total 116,427,623 $ 992,430 $ 117,420,053
Washington State Auditor's Office Page 60
•
NOTE 4—PROPERTY TAXES
Property taxes received during tax year 2017 were $20,976,384 including collection of prior year delinquent assessments.
Property taxes assessed for collection in tax year 2017 were based on a regular tax levy of$2.05 per$1,000 on a total 2016
assessed value of$9,555,039,113.
For levy year 2017, to be received in 2018, the City's regular tax levy is $2.20 per $1,000 on a 2017 assessed valuation of
$10,559,150,607, as of December 31, 2017,for a total regular levy of$21,548,429. State law provides that debt cannot be
incurred in excess of the following percentages of the taxable property of the City.
1.5o%of assessed value without a vote of the people
2.5o%of assessed value with a vote of the people
The City has additional authority to incur the following debt as a percentage of total valuation.
2.5o%of assessed value with a vote of the people,indebtedness is for utilities
2.5o%of assessed value with a vote of the people,indebtedness is for parks,or open space development
At December 31,2017,the debt limits for the City were as follows:
With a Vote
For Parks or
Without General For Open Space
a Vote Purposes Utilities Development Total
Item 1.50% 1.00% 2.50% 2.50% Capacity
Legal Limit $ 158,387,259 $105,591,506 $ 263,978,765 $ 263,978,765 $ 791,936,295
Outstanding indebtedness (54,208,225) - - - (54,208,225)
Margin available $ 104,179,034 $105,591,506 $ 263,978,765 $ 263,978,765 $ 737,728,070
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 market
value. A revaluation of all property is required every year 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$50. The first half of real property taxes is due on April
3o 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. No allowance for uncollectable taxes is established because delinquent taxes are considered fully
collectable.
At year-end,property taxes are recorded as a receivable with the portion not expected to be collected within 6o days after
the current period are reported as other unavailable revenue in the deferred inflow of resources section of the governmental
funds financial statements. 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.
Washington State Auditor's Office Page 61
2. Washington State law in RCW 84.55.010 limits the annual growth of regular property taxes to the lesser of 1%or the rate
of inflation. With a vote of the majority of the voters within a taxing district,the 1%levy limitation can be"lifted" and
additional taxes may be levied
3. The City may voluntarily levy taxes below the legal limit.
Special levies approved by the voters are not subject to the above limitations.
Property taxes are recorded as receivable and offset by an unearned revenue account when levied. Since state law allows
for the sale of property for failure to pay taxes,no estimate of uncollectible taxes is made.
Washington State Auditor's Office Page 62
NOTE 5— INTERFUND ACTIVITY
Transfers are legally authorized transfers of resources from a fund receiving revenue to the fund through which resources
are to be expended. The principal purposes for interfund transfers include interfund subsidies and transfers into capital
project and debt service funds. lnterfund transfers for the year ended December 31,2017 were as follows:
Transfers
Funds Transfer In Transfer Out
Governmental funds:
General $ 79,000 $ 3,100,302
Cumulative Reserve 1,000,000 -
Total general fund 1,079,000 3,100,302
Special revenue funds:
Arterial Streets 1,999,610 7,024
Local Streets 150,000 5,826
Hotel / Motel tax - 5,000
Arterial Street Preservation 194,915 51,776
Mitigation Fees - 1,969,497
Total special revenue funds 2,344,525 2,039,123
Debt service funds:
1998 Library GO 283,850 -
2010 A&B Annex 1,316,610 -
2010 C&D Local Revitalization 222,510
LID 250 374,615 -
Total debt service funds 2,197,585 -
Capital projects funds:
Municipal Park Construction 954,124 -
Capital Improvements 475,583 2,023,853
Total capital projects funds 1,429,707 2,023,853
Proprietary funds:
Water 2,500,000 2,693,946
Sew er 800,000 962,905
Storm Drainage 300,000 672,122
Airport 274,937 -
Cemetery - 400
Total proprietary funds 3,874,937 4,329,374
Internal service funds:
Insurance 670,715
Facilities - 888,503
Innovation & Technology 368,953 56,300
Equipment Rental 472,032 -
Total internal service funds 1,511,700 944,803
Total $ 12,437,454 $ 12,437,454
All transfers are considered routine.
Washington State Auditors Office Page 63
Loans between funds are classified as inter-fund receivable and payable. Interfund Loans do not affect total fund equity.
Interfund Loans Balance Balance
Due From Due To 1/1/2017 New Loans Repayments 12/31/2017
Housing&Comm Dev. General fund $ 50,000 $ 50,000 $ 50,000 $ 50,000
Airport Fund Capital Improvement 133,682 - 39,900 93,782
Parks Construction General fund 400,000 - 400,000 -
Total interfund loans $ 583,682 $ 50,000 $ 489,900 $ 143,782
All interfund loans are considered short-term cash loans.
`The purpose of the interfund loan to I-busing&Community Development is to cover authorized expenditures while the City waits for
reimbursement of federal Community Development Block Grant monies.
*The purpose of the interfund loan to The Airport Fund is to cover the cost of The Auburn Municipal T Hanger Enclosure Project.
*The purpose of the interfund loan to the Municipal Parks Construction Fund(a Grant Sustained Fund)was to cover authorized expenditures
while the City waited for reimbursement of federal,state,and local grant monies.
Washington State Auditor's Office Page 64
NOTE 6 — DUE FROM OTHER GOVERNMENTAL UNITS
As of December 31,2017 the City had receivables due from other governmental units as follows:
Duo from Other Governmental Units
General Fund:
WSDOT-Excavation Permits $ 300
King Conservation District-Farmer's Market 10,094
King County District Court 510.1 17
King County Library Systems 7,620
King County-Real Estate Excise Taxes 299.559
King County Sheriffs-Registered Sex Offender Grant 370
Pierce County-Real Estate Excise Taxes 12,864
Muckleshoot Indian Tribe 266,528
Department of Com m erce-VNET 1,588
Seattle Police Dept-US Department of Justice JAG Grant 23,961
US Department of Justice-Bulletproof Vest Program 4.985
US Department of Justice-COPS Hiring Program 55.389
WA Auto Theft Prevention Authority- Auto Theft Prevention Grant 74.981
WA State Criminal Justice Training 11,586
WA State Military Department-EMPG Grant 12.459
WA State Traffic Safety Com mission-Grants 8.427
WA State Treasurer-Sales Taxes 1,468,586
Total General Fund 2,769,412
Arterial Street Fund:
WA State Transportation Improvement Board-Arterial Street Imp. 1.292,367
WA Dept.of Transportation-Arterial street imp. 668,988
Total Arterial Street Fund 1.961.355
Arterial Street Preservation Fund:
WA Dept.of Transportation-Arterial street imp. 7,939
Drug Forfeiture Fund:
Pierce County Sheriffs Department-TNET 7.074
Pierce County Sheriffs Department-OCDET 3,530
Total Drug Forfeiture Fund 10,605
Housing&Comm unity Development:
U.S.Dept.of Housing-Community Development Block Grant 161,956
General Government Capital Improvements:
4Culture-Grant 9,903
Pierce County-Real Estate Excise Taxes 32,325
WA State Transportation Improvement Board-Grant 1,821
44,050
Water Fund:
Valley Communications-Lease 1.000
Storm Fund:
City of Algona-Decant Adm in Fee 90
City of Pacific-Decant Adm in Fee 300
King Conservation District 20.000
WA State Department of Ecology 49.734
Total Storm Drainage Fund 70.124
Solid Waste Fund:
King County-Local hazardous waste management grant 14,659
King County-Waste reduction and recycling grant 54,874
Total Solid Waste fund 69.534
Water Capital Fund:
WA State Military Department-Grant 16,968
Airport Capital Fund
Federal Aviation Administration 13,990
Facilities Fund:
VRFA 15
Information Services Fund:
City of Algona 500
City of Pacific 3,620
VRFA 2.077
Total Information Services fund 6,196
Total $ 5,133,144
Reconciliation to government-wide statement of net assets:
Total above due from other governmental units 5,133,144
Amount due to fiduciary fund -
Total due from other governmental units,
government-wide statem ant of net assets $ 5,133.144
Washington State Auditors Office Page 63
NOTE 7—CAPITAL ASSETS AND DEPRECIATION
Capital asset activity for the year ended December 31,2017 is as follows:
Schedule of Capital Asset Activity
Balance Decreases/ Balance
1/1/17 Increases Adjustments 12/31/17
Governmental activities:
Capital assets, not being depreciated:
Land $ 108,793,702 $ 96,553 $ - $ 108,890,255
Construction in progress 10,999,486 10,042,632 (10,964,759) 10,077,359
Total capital assets, not being depreciated 119,793,188 10,139,185 (10,964,759) 118,967,614
Capital assets, being depreciated:
Buildings 73,554,732 61,547 - 73,616,279
Improvements other than buildings 22,557,659 447,780 - 23,005,439
Machinery and equipment 28,288,914 2,309,293 (1,034,486) 29,563,721
Intangibles 1,095,684 - - 1,095,684
Infrastructure 365,765,293 21,097,174 - 386,862,467
Total capital assets being depreciated 491,262,282 23,915,794 (1,034,486) 514,143,590
Less: accumulated depreciation for:
Buildings (18,453,104) (1,548,625) - (20,001,729)
Improvements other than buildings (14,744,318) (770,706) - (15,515,024)
Machinery and equipment (19,852,415) (1,919,846) 861,332 (20,910,929)
Intangibles (903,154) (154,563) - (1,057,717)
Infrastructure (156,724,587) (13,978,338) - (170,702,925)
Total accumulated depreciation (210,677,578) (18,372,078) 861,332 (228,188,324)
Total capital assets, being depreciated, net 280,584,704 5,543,716 (173,154) 285,955,266
Govemmental activities capital assets, net $ 400,377,892 $ 15,682,901 $ (11,137,913) $ 404,922,880
Business-type activities:
Capital assets, not being depreciated:
Land $ 12,526,187 $ - $ - $ 12,526,187
Water Rights 5,196,600 252,586 - 5,449,186
Construction in progress 7,623,079 11,310,392 (8,659,863) 10,273,608
Total capital assets, not being depreciated 25,345,866 11,562,978 (8,659,863) 28,248,981
Capital assets, being depreciated:
Buildings 6,039,603 37,283 - 6,076,886
Improvements other than buildings 311,931,706 11,159,092 - 323,090,798
Machinery and equipment 2,480,505 59,867 - 2,540,372
Total capital assets being depreciated 320,451,814 11,256,242 - 331,708,056
Less: accumulated depreciation for:
Buildings (3,932,774) (118,961) - (4,051,735)
Improvements other than buildings (108,050,613) (7,733,957) - (115,784,570)
Machinery and equipment (2,215,477) (31,350) - (2,246,827)
Total accumulated depreciation (114,198,864) (7,884,268) - (122,083,132)
Total capital assets, being depreciated, net 206,252,950 3,371,974 - 209,624,924
Business-type activities capital assets, net $ 231,598,816 $ 14,934,952 $ (8,659,863) $ 237,873,905
Washington State Auditor's Office Page 66
Capital asset activity for the year ended December 31,2017 is as follows:
Depreciation/amortization expense was charged to functions/programs of the City as follows:
Governmental activities:
General government $ 1,017,296
Public safety 440,566
Transportation 13,565,902
Physical environment -
Culture and recreation 1,485,749
Economic environment -
Capital assets held by the City's internal service funds are charged to the various
functions based on their usage of the assets 1,862,565
Total depreciation/amortization expense-govemmental activities $ 18,372,078
Business-type activities:
Water $ 3,269,581
Sanitary sewer 2,199,711
Storm water 1,885,931
Solid waste 18,819
Golf course -
Airport 462,843
Cemetery 47,383
Total depreciation expense-business-type activities $ 7,884,268
The 2017 total interest cost incurred for business-type activities was$1,331,752 of which$1,290,563 was charged to expense
and$41,189 capitalized.
NOTE 8—CAPITAL LEASE OBLIGATION
The City has the following capital leases:
On January 1,2007 the City entered into a capital lease agreement for the Auburn Avenue Theater facility for a 15 year term.
The intent is for the City's Parks,Arts and Recreation department to offer performances to the public,as well as make the
facility available for short-term rentals.
On July 15,2015 the City entered into a 5 year term capital lease agreement to finance the purchase of a John Deere
Excavator. The lease agreement qualifies as a capital lease for accounting purposes.
The assets acquired through capital leases are as follows:
Assets Acquired Through Capital Leases
Governmental
Asset Activities
Auburn Avenue Theater $ 749,110
John Deere Excavator 204,710
Less:Accumulated Depreciation (638,739)
Total Assets Acquired Through Capital Leases $ 315,081
Washington State Auditor's Office Page 67
The future minimum lease obligation and the net present value of these minimum lease payments as of December 31,2017,
were as follows:
Schedule of Future Minimum Lease Payments
Lease Payable
Theater Excavator Total
2018 79,339 44,342 123,681
2019 79,339 44,342 123,681
2020 79,339 22,582 101,921
2021 80,334 - 80,334
Total minimum lease payments 318,351 111,266 429,617
Less:Amounts representing interest (43,104) (4,593) (47,697)
Present value of future minimum lease payments $ 275,247 $ 106,673 $ 381,920
NOTE 9- LONG-TERM LIABILITIES
General Obligation Bonds are direct obligations of the City for which its full faith and credit are pledged. Debt service for
voter-approved issues, of which the City has none, would be funded by special property tax levies. Debt service for City
Council authorized bonds,also called councilmanic bonds,is funded from regular property taxes or general revenues,and is
generally paid from debt service funds but can be paid from other designated funds.
General Obligation Bonds outstanding at year-end are as follows:
• 2010A Limited Tax General Obligation Improvement and Refunding bonds were issued to provide funds with which to
(i)pay a portion of the costs of acquisition of certain condominium units to provide city office space near City Hall(City
Hall Annex)in lieu of the City Hall Annex lease and(ii)to partially advance refund the 1998 Limited Tax General Obligation
bonds. The 1998 Limited General Obligation bonds were issued for construction of a library to be owned and operated
by the King County Rural Library District.
The City advance refunded the 1998 Limited Tax General Obligation bonds in 2010. The debt is considered extinguished
in an in-substance defeasance and,accordingly is not reflected in the accompanying financial statements. The remaining
balance of outstanding defeased debt as of December 31,2017 is$270,000.
• 20106 Limited Tax General Obligation Bonds (Taxable Build America Bonds — Direct Payment) bonds were issued to
provide funds with which to pay a portion of the costs of acquisition of certain condominium units to provide city office
space near City Hall(City Hall Annex)in lieu of the City Hall Annex lease.
• 2o10D Limited Tax General Obligation Bonds (Taxable Build America Bonds — Direct Payment) bonds were issued to
provide funds with which to pay portion of the downtown infrastructure improvements in the City's revitalization area.
• 2016 Limited Tax General Obligation Refunding Bonds were issued for the primary purposes of(a)refunding on a current
basis the 2005 Limited Tax General Obligation Refunding Bonds and(b)refunding on an advance basis the 2006A Limited
Tax General Obligation Bonds.
The net proceeds were used to purchase United States government securities. Those securities were deposited into an
irrevocable trust with an escrow agent to(a)pay the full outstanding principal and interest on the 2005 Bonds on the
redemption date and to(b)provide for all future debt service payments on the 2006A bonds which were refunded. As
a result of these transactions,the 2005 and 2006A bonds are considered to be defeased and the liability for those bonds
Washington State Auditor's Office Page 68
has been removed from the City's financial statements. The remaining balance of outstanding defeased debt as of
December 31,2017 is$3,134,433.
Revenue Bonds are payable from water,sewer and storm drainage utility revenues generated by those enterprise funds.
State of Washington Public Works Trust Fund and Drinking Water State Revolving Fund Loans are a direct responsibility of
the City. Auburn currently has nine outstanding loans with a remaining total balance of$10,394,433. Seven of the loans are
for water and sewer construction projects.The loans are being repaid from water and sewer fund revenues over a 20-year
period that begins upon each project completion(PWTF 1999,PWTF 2001,PWTF 2002,PWTF 2004,PWTF 2006,PWTF 2013,
& DWSRF 2016).The other two loans are for arterial street improvements and are being repaid from arterial street fund
revenues over a 20-year period that began in 2009 upon project completion(PWTF 2008)and over a 29-year period that
began in 2013 upon project completion(PWTF 2012).
Compensated Absences are paid by those funds that have employees. These are mostly payable by the General fund and
enterprise funds.
The following schedules summarize the long-term debt transactions of the City for the year ended December 31,2017.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 LIABILITES SUMMARY
Other Post Firemen's
General Employee Employment Net Pension Pension Due To Other
Obligation(p Utility Leave Benefit Benefits Liability Liability Premium Governments Total
Long-term liabilities payable 12/31/16 $33,685,361 $36,067,767 $ 2.879,166 $ 8,447,831 $22,652.229 $ - $1,313,939 $23,612,700 $ 128,658,993
Added 937 91,990 2,307,540 1,268.760 - 3,212,435 - - 6.881,662
Retired (1,836,905) (2.422,368) (2,162.171) (578,606) (5,052,499) - (113,312) (694,400) (12,860,261)
Long-term liabilities payable 12/31/17 $31,849.393 $33.737,389 $ 3,024.535 $ 9,137,985 $17.599.730 $ 3,212 435 $1.200,627 $22.918.300 $ 122.680,394
`')Includes capital leases
DEBT SERVICE REQUIREMENT TO MATURITY
General Capital Lease Utility Total
Obligation Bonds Obligation Bonds/Loans Long-Term Debt
Year Principal Interest Principal Interest Principal Interest Principal(" Interest
2018 2,304,062 2,939,960 103,252 19,258 2,679,966 1,402,903 5,087,280 4,362,121
2019 2,094,636 2,843,041 108,796 13,713 2,734,966 1,343,198 4,938,398 4,199.952
2020 1,969,766 2,755,227 95,486 7,926 2,612,597 1,272,380 4,677,849 4,035,533
2021 2,039,702 2,665,409 75,381 2,776 2,672,597 1,206,698 4,787,680 3,874,883
2022 2,109,908 2.564,978 - - 2.505,512 1,118,027 4.615,420 3,683,004
2023-2027 10,919,809 11,108,478 - - 12,967,816 4,073,754 23,887,625 15,182,232
2028-2032 11,987,250 7.719,511 - - 10,203,041 1,115,299 22,190,291 8,834,810
2033-2037 13.236,450 3,596,130 - - 584,966 10,237 13,821,416 3,606,367
2038-2042 4,031,150 282,084 - - 467,972 2,925 4,499,122 285,009
Totals $ 50,692,733 $36,474,818 5 382,915 $ 43,673 $37,429,434 $11,545,420 $ 88,505,082 $48,063,912
(') $ 88,505,082 Principal debt service requirements to maturity
3,024,535 Employee Leave Benefits
9,137,985 Other Post Employment Benefits
17,599,730 Net Pension Liability
3,212,435 Firemen's Pension Liability
1,200,627 Premium
$ 122,680,394 Long Term Liabilities 12/31/2017
Washington Slate Auditors Office Page 69
•
CHANGES IN LONG-TERM LIABILITIES
Interest Maturity Original Principal Balance Balance Due Within
Issue Name Rates Date Amoune'' Installments 12/31/16 Additions Reductions 12/31/17 One Year
GOVERNMENTAL DEBT
(General Obligation Bonds-
LTGO 2010Act' 2.00-4.50% 12/1/2018 4,385000 5235,000-$720,000 $ 530,000 $ - $ (260.000) $ 270,000 $ 270,000
LTGO 201013'1' 327-624% 12/1/2039 20,365000 $535,000-$1,240.000 19,285,000 - (560.000) 18.725,000 575,000
LTGO 20100 iu 3.27-6.19% 12/1/2034 6,320,000 $220,000-$445,000 5,875.000 - (230,000) 5,645,000 240,000
LTGO Rehinding 2016-Golf/Cemetery 1.64-1.64% 12/12025 3,166,930 $71,470-$366,159 3,095,460 • (323,849) 2,771,611 326,560
Total General Obligation Bonds 34,236.930 28,785.460 - (1,373,849) 27,411,611 1,411,560
capital Leases'
Auburn Avenue Theater 6.58% 12/31/2021 695,504 $4,114-56,514 330,151 937 (57.642) 273,446 61,644
John Deere Financial Excavator Lease 3.00% 7/15/2020 204,710 $3,695 146,484 - (37,015) 109,468 41,608
Total Capital Leases 900.214 476,635 937 (94,657) 382,914 103,252
Employee Leave Benefits'
Compensated absences 2232,931 1.866,002 (1,653.130) 2,445.803 1,878,492
Other Post Emolovment Benefits'
LEOFF 1 8,447,831 1.268,760 (578,606) 9,137,985 -
Pens inn%
Net Pension Liability 15,449.080 - (3,462.297) 11,986,783 -
Firemen's Pension Liability - 3,212,435 - 3,212.435 -
public Works Trust Fund I oans'
PWTF2008 0.50% 7/1/2028 1,527,273 $80,383 964.593 - (80,383) 884,210 80,383
PWTF 2012 0.50% 6/1/2041 3,284,857 $116,993 2,924,828 - (116,993) 2,807,835 116,993
Total Public Works Trust Fund Loans 4,812,130 3,889421 - (197.376) 3.692,045 197,376
Premium Related to Debt 108,655 - (34,727) 73,928 -
Total Governmental $ 39,949,274 $ 59.390,013 $ 6,348,134 $ (7,394,642) $ 58,343,504 $ 3.590,680
BUSINESS-TYPE DEBT
General Obligation Bonds
LTGO Refunding 2016-Airport 1.64-1.64% 12/1/2019 700,284 5166,439-5186,420 533,845 - (171.023) 362,822 176,402
Total General Obligation Bonds 700,284 533,845 - (171,023) 362.822 176,402
Revenue Bonds
Utilitysys bonds 20101'' 3.00-6.40% 12/1/2030 21,295,000 $575,000-$1,720,000 18,895,000 - (1,030,000) 17,865.000 1.070,000
Utility sys bonds 20131' 0.38-4.00% 12/1/2032 11,415,000 $335,000-$785,000 9,650,000 - (480,000) 9,170,000 490,000
Total Revenue Bonds 32,710,000 28,545,000 - (1,510,000) 27,035,000 1,560,000
Fmnlrnne I eave Benefits'
Compensated absences 646,235 441,538 (509,041) 578,732 444,493
NetPension Liability 7,203,149 - (1,590.202) 5,612,947 -
Public Works Trust Fund 8 Drinkina Water Loans'
PWTF 1999 1.00% 7/1/2019 3,465,000 $182,368 547,105 - (182,368) 364,736 182,368
PWTF 2001 0.50% 7/1/2021 4,290.405 $227,086 1.135.428 - (227,086) 908,343 227,086
PWTF2002 1.00% 7/1/2022 641,250 $26,114 156,687 - (26,114) 130.572 26,114
PWTF2004 0.50% 7/1/2024 2,049,036 $107,844 862,752 - (107,844) 754,908 107.844
PWTF 2006 0.50% 7/1/2026 3,325,000 $180,418 1,804.180 - (180,418) 1.623,763 180,418
PWTF2013 2.00% 6/1/2032 3,325,000 $188,538 3,016,615 - (188,538) 2,828,076 188,538
DWSRF 2016 1.50% 10/1/2026 1.353,400 $10,221 - 91,990 - 91,990 10,221
Total Public Works Trust Fund 8 Drinking Water Loans 18,449,091 7,522,767 91,990 (912,368) 6,702,388 922,589
Premium Related to Debt 1,205,284 - (78,585) 1.126,699 -
Total Proprietary $ 51,859,375 $ 45,656.280 $ 533,528 $ (4,771,219) $ 41,418,588 $ 3,103,487
Total All Funds $ 91,808,649 $105,046,293 $ 6.881,662 $(12.165,861) $ 99.762,092 $ 6,694,167
Subject to federal arbitrage compliance rules.
("The original amount is the amount authorized and issued with exception of the Utility System Bonds 2013 in which the authorized amount was$13,000,000 and the issued amount
was$11,415,000.
Washington State Auditor's Office Page 70
Due to Other Governments
• SCORE Public Development Authority issued General Obligation bonds in 2009 to acquire,construct,improve,and equip a
consolidated correctional facility located in Des Moines,Washington. The city is contracted to pay 31%of the debt service of
these 3o year bonds that mature in 2039. This debt is paid from the General fund.
CHANGES IN LONG-TERM LIABILITIES DUE TO OTHER GOVERNMENTS
Interest Maturity Original Principal Balance Balance Due Within
Issue Name Rates Date Amount Installments 12/31/16 Additions Reductions 12/31/17 One Year
GOVERNMENTAL DEBT:
General Obligation Bonds
SCORE Public Development Authority 3.00.6.62°/ 1/112039 26,732,850 $593,650-$1,601,150 23,612,700 (694,400) 22,918,300 716,100
Total General Obligation Bonds
Due Other Governments $ 26,732,850 $ 23.612,700 $ - $ (694,400) $ 22,918,300 $ 716,100
LONG-TERM LIABILITIES RECONCILIATION
Enterprise Governmental
Funds Funds 12/31/17
Liabilities payable from restricted assets:
Revenue bonds $ 2,922,900 $ - $ 2,922,900
Long-term bonds payable:
General obligation bonds 362.822 27,411,611 27,774,433
Capital lease - 382.914 382.914
Revenue bonds 24,112.100 - 24.112,100
Public Works Trust Fund loans 6.702,388 3,692,045 10,394.433
Due to Other Governments - 22,918,300 22.918,300
Employee leave benefits 578,732 2.445,803 3,024.535
Other Post Employment Benefits - 9,137,985 9,137.985
Net Pension Liability 5,612,947 11,986.783 17,599,730
Firemen's Pension Liability - 3,212.435 3,212,435
Premium 1,126,699 73,928 1.200,627
Total long-term debt $ 41,418,588 $ 81,261,804 $ 122,680.394
Revenue Bond Debt Service Coverage
The required debt service coverage for the 2013 utility revenue bonds,2010 utility revenue bonds and the 2005 utility
revenue refunding bonds is 1.25. Debt service coverage for 2017 was 3.33. The ratio indicates the direction and degree to
which the revenue stream exists to meet the current debt burden. The ratio is calculated by dividing the net revenue
available by debt service requirements.
The restricted rate stabilization fund for the utility revenue bonds was established to minimize the effect on rates of revenue
fluctuations between years. By transferring cash into this stabilization fund,adjusted net revenue available for debt service,
as defined, would be decreased by the amount of the transfer. Conversely, transfers out of the account would increase
adjusted net revenue available for debt service.
Estimated Arbitrage Rebate
The Federal Tax Reform Act of 1986 requires issuers of tax-exempt debt of over$5 million to make payments to the United
States Treasury of investment interest received at yields that exceed the issuer's tax-exempt borrowing rates. Payments of
arbitrage rebate amounts due under these regulations must be made to the U.S. Treasury every five years. The City's
estimated arbitrage rebate as of December 31,2017 is$o for its tax-exempt bond issues.
Washington State Auditor's Office Page 71
Note to—Pension PIan4
The following table represents the aggregate pension amounts for all plans subject to the requirements of GASB Statement
68,Accounting and Financial Reporting for Pensions for the year 2017
Aggregate Pension Amounts-All Plans
Pension liabilities $ (17,599,730)
Pension assets $ 6,702,047
Deferred outflows of resources $ 3,143,002
Deferred inflows of resources $ (4,516,982)
Pension expense/expenditures $ 1,592,900
*Pension Assets GASB 68 equals total Net Position Statement
State Sponsored 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 state Legislature establishes,and amends,
laws pertaining to the creation and administration of all public retirement systems.
The Department of Retirement Systems(DRS), a department within the primary government of the State of Washington,
issues a publicly available comprehensive annual financial report (CAFR)that includes financial statements and required
supplementary information for each plan. The DRS CAFR may be obtained by writing to:
Department of Retirement Systems
Communications Unit
P.O.Box 48380
Olympia,WA 98540-8380
Or the DRS CAFR may be downloaded from the DRS website at www.drs.wa.gov.
Public Employees'Retirement System(PERS)
PERS members include elected officials; state employees; employees of the Supreme, Appeals and Superior Courts;
employees of the legislature; employees of district and municipal courts; employees of local governments; and higher
education employees not participating in higher education retirement programs. PERS is comprised of three separate
pension plans for membership purposes. PERS plans 1 and 2 are defined benefit plans,and PERS plan 3 is a defined benefit
plan with a defined contribution component.
PERS Plan 1 provides retirement,disability and death benefits. Retirement benefits are determined as two percent of the
member's average final compensation(AFC)times the member's years of service. The AFC is the average of the member's
24 highest consecutive service months. Members are eligible for retirement from active status at any age with at least 30
years of service,at age 55 with at least 25 years of service,or at age 6o with at least five years of service. Members retiring
from active status prior to the age of 65 may receive actuarially reduced benefits. Retirement benefits are actuarially reduced
to reflect the choice of a survivor benefit. Other benefits include duty and non-duty disability payments,an optional cost-of-
living adjustment (COLA), and a one-time duty-related death benefit, if found eligible by the Department of Labor and
Industries. PERS 1 members were vested after the completion of five years of eligible service. The plan was closed to new
entrants on September 30,1977.
Washington State Auditor's Office Page 72
•
Contributions
The PERS Plan i member contribution rate is established by State statute at 6 percent. The employer contribution rate is
developed by the Office of the State Actuary and includes an administrative expense component that is currently set at 0.18
percent. Each biennium, the state Pension Funding Council adopts Plan 1 employer contribution rates. The PERS Plan 1
required contribution rates(expressed as a percentage of covered payroll)for 2017 were as follows:
PERS Plan
Actual Contribution Rates: Employer Employee*
January-June 2017:
PERS Plan 1 6.23% 6.00%
PERS Plan 1 UAAL 4.77%
Administrative Fee 0.18%
Total 11.18% 6.00%
July-December 2017:
PERS Plan 1 7.49% 6.00%
PERS Plan 1 UAAL 5.03%
Administrative Fee 0.18%
Total 12.70% 6.00%
*For employees participating in JBM,the contribution rate was 12.26%.
PERS Plan 2/3 provides retirement,disability and death benefits. Retirement benefits are determined as two percent of the
member's average final compensation(AFC)times the member's years of service for Plan 2 and 1 percent of AFC for Plan 3.
The AFC is the average of the member's 6o highest-paid consecutive service months. There is no cap on years of service
credit. Members are eligible for retirement with a full benefit at 65 with at least five years of service credit. Retirement
before age 65 is considered an early retirement. PERS Plan 2/3 members who have at least 20 years of service credit and are
55 years of age or older,are eligible for early retirement with a benefit that is reduced by a factor that varies according to
age for each year before age 65. PERS Plan 2/3 members who have 30 or more years of service credit and are at least 55
years old can retire under one of two provisions:
• With a benefit that is reduced by three percent for each year before age 65;or
• With a benefit that has a smaller(or no)reduction(depending on age)that imposes stricter return-to-work rules.
PERS Plan 2/3 members hired on or after May 1,2013 have the option to retire early by accepting a reduction of five percent
for each year of retirement before age 65. This option is available only to those who are age 55 or older and have at least 30
years of service credit. PERS Plan 2/3 retirement benefits are also actuarially reduced to reflect the choice of a survivor
benefit. Other PERS Plan 2/3 benefits include duty and non-duty disability payments,a cost-of-living allowance(based on the
CPI), capped at three percent annually and a one-time duty related death benefit, if found eligible by the Department of
Labor and Industries. PERS 2 members are vested after completing five years of eligible service. Plan 3 members are vested
in the defined benefit portion of their plan after ten years of service;or after five years of service if 12 months of that service
are earned after age 44.
PERS Plan 3 defined contribution benefits are totally dependent on employee contributions and investment earnings on
those contributions. PERS Plan 3 members choose their contribution rate upon joining membership and have a chance to
change rates upon changing employers. As established by statute, Plan 3 required defined contribution rates are set at a
minimum of 5 percent and escalate to 15 percent with a choice of six options. Employers do not contribute to the defined
contribution benefits. PERS Plan 3 members are immediately vested in the defined contribution portion of their plan.
Washington State Auditor's Office Page 73
•
Contributions
The PERS Plan 2/3 employer and employee contribution rates are developed by the Office of the State Actuary to fully fund
Plan 2 and the defined benefit portion of Plan 3. The Plan 2/3 employer rates include a component to address the PERS Plan
1 UAAL and an administrative expense that is currently set at 0.18 percent. Each biennium,the state Pension Funding Council
adopts Plan 2 employer and employee contribution rates and Plan 3 contribution rates. The PERS Plan 213 required
contribution rates(expressed as a percentage of covered payroll)for 2017 were as follows:
PERS Plan 213
Actual Contribution Rates: Employer 2/3 Employee 2*
January-June 2017:
PERS Plan 2/3 6.23% 6.12%
PERS Plan 1 UAAL 4.77%
Administrative Fee 0.18%
Employee PERS Plan 3 varies
Total 11.18% 6.12%
July-December 2017:
PERS Plan 2/3 7.49% 7.38%
PERS Plan 1 UAAL 5.03%
Administrative Fee 0.18%
Employee PERS Plan 3 varies
Total 12.70% 7.38%
*For employees participating in JBM,the contribution rate was 15.30%for January-June 2017 and 18.45%for July-
December 2017.
The City's actual PERS plan contributions were$1,216,069 to PERS Plan 1 and$1,714,887 to PERS Plan 2/3 for the year ended
December 31,2017.
Law Enforcement Officers'and Fire Fighters'Retirement System(LEOFF)
LEOFF membership includes all full-time,fully compensated,local law enforcement commissioned officers,firefighters,and
as of July 24,2005,emergency medical technicians. LEOFF is comprised of two separate defined benefit plans.
LEOFF Plan 1 provides retirement, disability and death benefits. Retirement benefits are determined per year of service
calculated as a percent of final average salary(FAS)as follows:
• zo+years of service-2.0%of FAS
• 10-19 years of service-1.5%of FAS
• 5-9 years of service-1%of FAS
The FAS is the basic monthly salary received at the time of retirement,provided a member has held the same position or rank
for 12 months preceding the date of retirement. Otherwise,it is the average of the highest consecutive 24 months'salary
within the last ten years of service. Members are eligible for retirement with five years of service at the age of 5o. Other
benefits include duty and non-duty disability payments,a cost-of living adjustment(COLA),and a one-time duty-related death
benefit,if found eligible by the Department of Labor and Industries. LEOFF 1 members were vested after the completion of
five years of eligible service. The plan was closed to new entrants on September 30,1977.
Washington State Auditor's Office Page 74
Contrihutinns
Starting on July 1, 2000, LEOFF Plan 1 employers and employees contribute zero percent, as long as the plan remains fully
funded. The LEOFF Plan I had no required employer or employee contributions for fiscal year 2017. Employers paid only the
administrative expense of 0.18 percent of covered payroll.
LEOFF Plan 2 provides retirement,disability and death benefits. Retirement benefits are determined as two percent of the
final average salary(FAS)per year of service(the FAS is based on the highest consecutive 6o months). Members are eligible
for retirement with a full benefit at 53 with at least five years of service credit. Members who retire prior to the age of 53
receive reduced benefits. If the member has at least 20 years of service and is age 5o,the reduction is three percent for each
year prior to age 53. Otherwise, the benefits are actuarially reduced for each year prior to age 53. LEOFF 2 retirement
benefits are also actuarially reduced to reflect the choice of a survivor benefit. Other benefits include duty and non-duty
disability payments, a cost-of-living allowance(based on the CPI), capped at three percent annually and a one-time duty-
related death benefit,if found eligible by the Department of Labor and Industries. LEOFF 2 members are vested after the
completion of five years of eligible service.
Contrihutinnc
The LEOFF Plan 2 employer and employee contribution rates are developed by the Office of the State Actuary to fully fund
Plan 2. The employer rate included an administrative expense component set at 0.18 percent. Plan 2 employers and
employees are required to pay at the level adopted by the LEOFF Plan 2 Retirement Board. The LEOFF Plan 2 required
contribution rates(expressed as a percentage of covered payroll)for 2017 were as follows:
LEOFF Plan 2
Actual Contribution Rates: Employer Employee
January-June 2017:
State and local governments 5.05% 8.41%
Administrative Fee 0.18%
Total 5.23% 8.41%
Ports and Universities 8.41% 8.41%
Administrative Fee 0.18%
Total 8.59% 8.41%
July-December 2017
State and local governments 5.25% 8.75%
Administrative Fee 0.18%
Total 5.43% 8.75%
Ports and Universities 8.75% 8.75%
Administrative Fee 0.18%
Total 8.93% 8.75%
The City's actual contributions to the plan were$656,346 for the year ended December 31,2017.
The Legislature,by means of a special funding arrangement,appropriates money from the state General Fund to supplement
the current service liability and fund the prior service costs of Plan 2 in accordance with the recommendations of the Pension
Funding Council and the LEOFF Plan 2 Retirement Board. This special funding situation is not mandated by the state
constitution and could be changed by statute. For the state fiscal year ending June 3o,2017,the state contributed$62,155,262
to LEOFF Plan 2. The amount recognized by the City as its proportionate share of this amount is$380,132.
Actuarial Assumptions
The total pension liability (TPL) for each of the DRS plans was determined using the most recent actuarial valuation
completed in 2017 with a valuation date of June 3o,2016. The actuarial assumptions used in the valuation were based on the
results of the Office of the State Actuary's(OSA)2007-2012 Experience Study and the 2015 Economic Experience Study.
Washington State Auditor's Office Page 75
Additional assumptions for subsequent events and law changes are current as of the 2016 actuarial valuation report. The
TPL was calculated as of the valuation date and rolled forward to the measurement date of June 30, 2017. Plan liabilities
were rolled forward from June 30, 2016, to June 30, 2017, reflecting each plan's normal cost (using the entry-age cost
method),assumed interest and actual benefit payments.
• Inflation: 3.0%total economic inflation;3.75%salary inflation
• Salary increases: In addition to the base 3.75%salary inflation assumption, salaries are also expected to grow by
promotions and longevity.
• Investment rate of return: 7.5%
Mortality rates were based on the RP-2000 report's Combined Healthy Table and Combined Disabled Table,published by the
Society of Actuaries. The OSA applied offsets to the base table and recognized future improvements in mortality by
projecting the mortality rates using ioo percent Scale BB. Mortality rates are applied on a generational basis;meaning,each
member is assumed to receive additional mortality improvements in each future year throughout his or her lifetime.
There were changes in methods and assumptions since the last valuation.
• For all plans except LEOFF Plan 1,how terminated and vested member benefits are valued was corrected.
• How the basic minimum COLA in PERS Plan i is valued for legal order payees was improved.
• For all plans,the average expected remaining service lives calculation was revised.
Discount Rate
The discount rate used to measure the total pension liability for all DRS plans was 7.5 percent.
To determine that rate, an asset sufficiency test included an assumed 7.7 percent long-term discount rate to determine
funding liabilities for calculating future contribution rate requirements. (All plans use 7.7 percent except LEOFF 2,which has
assumed 7.5 percent). Consistent with the long-term expected rate of return,a 7.5 percent future investment rate of return
on invested assets was assumed for the test. Contributions from plan members and employers are assumed to continue
being made at contractually required rates (including PERS 2/3, SERS 2/3, and TRS 2/3 employers, whose rates include a
component for the PERS 1,and TRS 1 plan liabilities). Based on these assumptions,the pension plans'fiduciary net position
was projected to be available to make all projected future benefit payments of current plan members. Therefore,the long-
term expected rate of return of 7.5 percent was used to determine the total liability.
Long-Term Expected Rate of Return
The long-term expected rate of return on the DRS pension plan investments of 7.5 percent was determined using a building-
block-method. In selecting this assumption,the Office of the State Actuary(OSA)reviewed the historical experience data,
considered the historical conditions that produced past annual investment returns, and considered capital market
assumptions and simulated expected investment returns provided by the Washington State Investment Board(WSIB). The
WSIB uses the capital market assumptions and their target asset allocation to simulate future investment returns over
various time horizons.
Washington State Auditor's Office Page 76
Estimated Rates of Return by Asset Class
Best estimates of arithmetic real rates of return for each major asset class included in the pension plan's target asset
allocation as of June 30,2017,are summarized in the table below. The inflation component used to create the table is 2.2
percent and represents the WSIB's most recent long-term estimate of broad economic inflation.
%Long-Term Expected Real
Asset Class Target Allocation Rate of Return Arithmetic
Fixed Income 20 1.70%
Tangible Assets 5;j 4.90%
Real Estate 15% 5.80%
Global Equity 37% 6.30%
Private Equity 23% 9.30%
100%
Sensitivity of NPL
The table below presents the City's proportionate share of the net pension liability calculated using the discount rate of 7.5
percent, as well as what the City's proportionate share of the net pension liability would be if it were calculated using a
discount rate that is 1-percentage point lower(6.5 percent)or i-percentage point higher(8.5 percent)than the current rate.
1%Decrease Current Discount Rate 1%Increase
(6.5%) (7.5%) (8.5%)
PERS 1 $ 11,133,883 $ 9,139,685 $ 7,412,282
PERS 2/3 22,792,245 8,460,044 (3,283,068)
LEOFF 1 (1,153,005) (1,554,407) (1,899,120)
LEOFF 2 $ 1,113,941 $ (5,147,640) $ (10,249,314)
Pension Plan Fiduciary Net Position
Detailed information about the State's pension plans'fiduciary net position is available in the separately issued DRS financial
report.
Pension Liabilities (Assets), Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources
Related to Pensions
At June 30, 2017, the City reported a total pension liability of $10,897,682 for its proportionate share of the net pension
liabilities as follows:
Liability(Asset)
PERS 1 $ 9,139,685
PERS 2/3 8,460,044
LEOFF 1 (1,554,407)
LEOFF 2 $ (5,147,640)
Washington State Auditors.Office Page 77
The amount of the asset reported above for LEOFF Plans 1 and 2 reflects a reduction for State pension support provided to
the City. The amount recognized by the City as its proportionate share of the net pension asset,the related State support,
and the total portion of the net pension asset that was associated with the City were as follows:
LEOFF I Asset LEOFF 2 Asset
Employer's proportionate share $ (1,554,407) $(5,147,640)
State's proportionate share of
the net pension asset associated
with the employer (10,513,971) (3,339,178)
TOTAL $ (12,068,378) $(8,486,817)
At June 3o,the City's proportionate share of the collective net pension liabilities was as follows:
Proportionate Proportionate Share Change in
Share 6/306 6130/17 Proportion
PERS 1 0.194185% 0.192614% (0.001571)%
PERS 213 0.242776% 0.243488% 0.000712%
LEOFF 1 0.101574% 0.102451% 0.000877%
LEOFF 2 0.359661% 0.370954% 0.011293%
Employer contribution transmittals received and processed by the DRS for the fiscal year ended June 3o are used as the basis
for determining each employer's proportionate share of the collective pension amounts reported by the DRS in the Schedules
of Employer and Nonemployer Allocations for all plans except LEOFF 1.
LEOFF Plan 1 allocation percentages are based on the total historical employer contributions to LEOFF 1 from 1971 through
2000 and the retirement benefit payments in fiscal year 2017. Historical data was obtained from a 2011 study by the Office
of the State Actuary (OSA). In fiscal year 2017, the state of Washington contributed 87.12 percent of LEOFF 1 employer
contributions and all other employers contributed the remaining 12.88 percent of employer contributions. LEOFF 1 is fully
funded and no further employer contributions have been required since June 2000. If the plan becomes underfunded,
funding of the remaining liability will require new legislation. The allocation method the plan chose reflects the projected
long-term contribution effort based on historical data.
In fiscal year 2017,the state of Washington contributed 39.35 percent of LEOFF 2 employer contributions pursuant to RCW
41.26.725 and all other employers contributed the remaining 60.65 percent of employer contributions.
The collective net pension liability(asset)was measured as of June 3o, 2017,and the actuarial valuation date on which the
total pension liability(asset)is based was as of June 3o,2016,with update procedures used to roll forward the total pension
liability to the measurement date.
Pension Expense
For the year ended December 31,2017,the City recognized pension expense as follows:
Pension Expense
PERS 1 $ 475,481
PERS 2/3 1,201,215
LEOFF 1 (257,088)
LEOFF 2 173,292
TOTAL $ 1,592,900
Washington State Auditor's Office Page 78
Deferred Outflows of Resources and Deferred Inflows of Resources
At December 31,2017,the City reported deferred outflows of resources and deferred inflows of resources related to pensions
from the following sources:
PERS 1 Deferred Outflows of Deferred Inflows of
Resources Resources
Differences between expected and actual experience $ $
Net difference between projected and actual investment
earnings on pension plan investments 341,067
Changes of assumptions
Changes in proportion and differences between
contributions and proportionate share of contributions
Contributions subsequent to the measurement date 625,456
TOTAL $ 625,456 $ 341,067
PERS 2/3 Deferred Outflows of Deferred Inflows of
Resources Resources
Differences between expected and actual experience $ 857,202 276,236
Net difference between projected and actual investment
earnings on pension plan investments 2,255,244
Changes of assumptions 89,862
Changes in proportion and differences between
contributions and proportionate share of contributions
48,701 10,996
Contributions subsequent to the measurement date 934,975
TOTAL $ 1,930,740 $ 2,544,476
LEOFF 1 Deferred Outflows of Deferred Inflows of
Resources Resources
Differences between expected and actual experience $ S
Net difference between projected and actual investment
earnings on pension plan investments '44,44'
Changes of assumptions
Changes in proportion and differences between contributions
and proportionate share of contributions
Contributions subsequent to the measurement date
TOTAL $ $ 144,441
LEOFF 2 Deferred Outflows of Deferred Inflows of
Resources Resources
Differences between expected and actual experience $ 226,249 $ 195,207
Net difference between projected and actual investment
earnings on pension plan investments 1,155,681
Changes of assumptions 6,199
Changes in proportion and differences between
contributions and proportionate share of contributions
136,110
Contributions subsequent to the measurement date 354,359
TOTAL $ 586,806 $ 1,486,999
Washington State Auditor's Office Page 79
Deferred outflows of resources related to pensions resulting from the City's contributions subsequent to the measurement
date will be recognized as a reduction of the net pension liability in the year ended December 31, 2018. Other amounts
reported as deferred outflows and deferred inflows of resources related to pensions will be recognized in pension expense
as follows:
Year ended PERS i PERS 213 LEOFF i LEOFF 2
December 31
2018 $ (230,540) $ (892,068) $ (90,649) $ (556,277)
2019 72,785 251,250 24,448 94,881
2020 (16,900) (189,859) (9,763) (104,678)
2021 (166,413) (902,906) (68,477) (522,542)
2022 80,379 - (29,631)
Thereafter $ - $ 104,493 $ - $ (136,304)
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 provides retirement and disability
benefits,annual cost-of-living adjustments,and death benefits to plan members and beneficiaries. Membership is limited to
firefighters employed prior to March 1,1970 when the LEOFF retirement system was established. The City's obligation under
the Firemen's Pension Plan consists of paying all benefits,including payments to beneficiaries and healthcare,for firefighters
who retired prior to March 1,1970,and excess pension and healthcare benefits of LEOFF for covered firefighters who retired
after March 1, 1970. Benefits and refunds of the defined benefit pension plan are recognized when due and payable in
accordance with the Plan.The Plan does not issue a separate financial report. Membership of the Firemen's Pension Plan
consisted of 13 eligible inactive employees or their beneficiaries,of which 11 received city paid benefits. There are no active
employees in this plan.
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(which is not considered a special funding situation),interest earnings,member contributions
made prior to the inception of LEOFF,and City contributions required to meet projected future pension obligations. In 2017,
$78,078 was received from the state from taxes on fire insurance premiums,and$22,111 was received from interest earnings.
On-behalf payments of fringe benefits and salaries for the City's employees were recognized as revenues and
expenditures/expenses during the period. Administrative costs, such as City staff time and actuarial valuation costs are
funded from interest earnings or City contributions.
The City has determined that GASB Statement No.67—Financial Reporting for Pension Plans;an amendment of GASB Statement
No. 25 does not apply to the City's single-employer Fire Relief and Pension Fund as there are no assets accumulated in a
qualifying trust and it does not meet the criteria applicability set by the statement as the contributions to that fund are not
irrevocable. Plan assets may be used to cover medical expenses which are outside of the scope of the pension plan benefits.
Therefore,the Fire Relief and Pension Fund has been presented in conformance with GASB Statement No. 73—Accounting
and Financial Reporting for Pensions and Related Assets That Are Not within the Scope of GASB Statement 68,and Amendments
to Certain Provisions of GASB Statements 67 and 68.
Washington State Auditor's Office Page 80
The following table represents the plan aggregate pension amounts for 2017:
Aggregate Pension Amounts—Fire Relief and Pension Plan
Pension liabilities $ (3,212,435)
Deferred outflows of resources $ o
Deferred inflows of resources $ o
Pension expense/expenditures $ 116491
Service Retirement Benefit
The amount of a members benefit is based upon the rank of the firefighter at the time of retirement and amounts to 5o%of
salary plus an additional 2%for each year of service in excess of 25 years,to a maximum benefit of 6o%of salary. An annual
post-retirement increase is determined based upon 2 factors:
• escalation by salary in proportion to the current salary of rank from which the firefighter retired (RCW 41.18.040),
and
• increase proportionate to the annual increase in the Seattle-area CPI and regardless of the increase(or decrease)
in the CPI,the benefits are increased at least 2%each year. (RCW 41.18.104)
Assumptions and Other Inputs to the Total Pension Liability
GASB Statement 73 requires a schedule of changes in Total Pension Liability from year to year. Both the December 31,2016
and the December 31, 2017 amounts are based on the January 1, 2017 actuarial valuation (the valuation date) and then
projected forward to the measurement date. The measurement date is December 31,2017 which is the date as of which the
total pension liability is determined.
The discount rate and other key actuarial assumptions utilized are noted below:
Fire Relief and Pension Plan December 31,2016 December 31,2017
Discount Rate—municipal bond rate(average rating
AA/Aa or higher) 3.75% 3.5o%
Valuation Date January 1,2017 January 1,2017
Measurement Date December 31,2016 December 31,2017
Inflation 2.25% 2.25%
Salary Increases Including Inflation 3.25% 3.25%
Mortality RP-2000 Mortality RP-2000 Mortality
Table(combined Table(combined
healthy)with healthy)with
generational generational
projection using 100% projection using
of Projection Scale 100%of Projection
BB Scale BB
Actuarial Cost Method Entry Age Normal Entry Age Normal
Washington State Auditor's Office Page 81
Total Pension Liability
The following table represents the changes in the total pension liability for 2017:
Fire Relief and Pension Plan Increase(Decrease)
Total Pension Liability
Balances as of December 31,2016 $ 3,218,004
Changes for the year:
Service cost o
Interest on total pension liability ii6,957
Effect of plan changes o
Effect of economic/demographic gains or losses o
Effect of assumptions,changes or inputs 77,612
Benefit payments* (200,138)
Balances as of December 31,2017 $ 3,212,435
*Benefit payments are estimated based on expected payouts.
Sensitivity Analysis
The following table presents the total pension liability of the City,calculated using the discount rate of 3.50%,as well as what
the City's total pension liability would be if it were calculated using a discount rate that is 1 percentage point lower(2.50%)
or 1 percentage point higher(4.50%)than the current rate.
1% Current 1%
Decrease Discount Rate Increase
2.50% 3.50% 4.50%
$3,556,531 $3,212,435 $2,919,603
Pension Expense
The amount of pension expense recognized by the City for the reporting period is as follows:
Fire Relief and Pension Plan January 1,2016 to January 1,2017 to
December 31,2016 December 31,2017
Service Cost N/A $
Interest on Total Pension Liability N/A 116,957
Effect of Plan Changes N/A o
Contributions From State Fire Insurance Premium Tax N/A (78,078)
Recognition of Deferred Inflows/Outflows of Resources:
Recognition of Economic/Demographic Gains/Losses N/A o
Recognition of Assumption Changes or Inputs N/A 77,612
Pension Expense N/A $ 116,491
Washington State Auditor's Office Page 82
Deferred Outflows/Inflows of Resources
As of December 31,2017,the deferred outflows and inflows of resources are as follows:
Fire Relief and Pension Plan Deferred Outflows Deferred Inflows of
of Resources Resources
Differences between expected and actual experience $ o $ o
Changes of assumptions o 0
Contributions subsequent to the measurement date o 0
TOTAL $ o $ o
Amounts currently reported as deferred outflows of resources and deferred inflows of resources related to pensions will
be recognized in pension expense as follows:
Year ended December 31:
2018 $o
2019 0
2020 0
2021 0
2022 0
Thereafter o
NOTE ti -OTHER POST-EMPLOYMENT BENEFITS
In 2008, the city implemented GASB Statement 45, Accounting and Financial Reporting by Employers for Post-Employment
Benefits Other Than Pensions.
Plan Description
The city is the administrator of the LEOFF 1 employees plan covering lifetime medical care. This plan is a defined benefit
healthcare plan,other post-employment benefit plan(OPEB).
The city is required to pay post-employment benefits in accordance with Revised Code of Washington(RCW)Chapter 41.16,
all medical and long term care as long as a disability exists are covered for any active firefighter hired prior to March 1, 1970.
For any retired firefighter hired prior to March 1, 1970, medical and long term care are covered at the discretion of the
Retirement Board. Members retired prior to 1961 for reasons other than duty disability are not eligible for medical benefits
during retirement.
In 1970, LEOFF was established by the Legislature under RCW Chapter 41.26. LEOFF members who joined the system by
September 3o,1977 are Plan 1 members. For Plan 1 members,the city is required to pay all healthcare expenses incurred by
LEOFF 1 retirees. The City's cost is reduced by any amounts retirees receive from Medicare or other health plans.
Funding Policy
The funding policy is based upon the pay-as-you-go financing requirements paid out of the General fund.
Membership
As of December 31,2017,there was i active member and 51 retirees meeting the eligibility requirements of a LEOFF 1 member.
This is considered a closed group with no new members. The one active member is employed by the Valley Regional Fire
Authority(VRFA)which is a separate governmental entity and the City is billed annually for their medical costs.
Washington State Auditor's Office Page 83
Annual OPFB Cnct and Net OPFR Obligation
The City's annual other post-employment benefit(OPEB)cost is calculated based upon the annual required contribution
(ARC),an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a
level of funding that,if paid on an ongoing basis,is projected to cover the normal cost each year and amortize any
unfunded actuarial liabilities over a period of 21 years as of January 1,2008. The following table shows the components of
the City's annual OPEB cost for the year,the amount actually contributed to the plan and changes in the City's net OPEB for
LEOFF.
Fiscal Year Ending
Annual Required Contribution(ARC) 12/31/2015 12/31/2016 12/31/2017
1. Annual Normal Costs at beginning of year $ 45,656 $ 45,656 $ -
2. Amortization of UAAL at beginning of year 2,168,028 2.168,028 1,756,269
3. Interest to end of year 71,945 71,945 61,469
4. ARC at end of year $ 2,285,629 $ 2.285,629 $ 1,817,738
5. Interest on Net OPEB Obligation 201,873 235.548 295.674
6. Adjustment to ARC 541,686 670,637 844,652
7. Annual OPEB Cost $ 1.945,816 $ 1,850,540 $ 1,268,760
8. Employer Contributions 909,657 650,332 578,606
9. Change in Net OPEB Obligation 1,036.159 1.200.208 690.154
10. Net OPEB Obligation at beginning of year 6,211,464 7,247.623 8.447.831
11. Net OPEB Obligation at end of year $ 7.247.623 $ 8,447,831 $ 9,137,985
The net OPEB obligation of$9,137,985 is included as a non-current liability on the Statement of Net Position.
The City's annual OPEB cost,the percentage of OPEB costs contributed to the plan,and the net OPEB obligation for 2017,
2016 and 2015 are as follows:
Contributions as a
Annual Percentage of Net OPEB
Fiscal Year Ending OPEB Cost Annual OPEB Cost Obligation
December 31,2017 $ 1,268,760 46% $ 9,137,985
December 31,2016 1,850,540 35% 8,447,831
December 31,2015 1,945,816 47% 7,247,623
Funded Stattic and Funding Progrecc
As of January 1,2017,the most recent actuarial valuation date,the plan was o%funded. The accrued liability for benefits was
$17.6 million,and the actuarial value of assets was$o,resulting in a UAAL of$17.6 million. The required schedule of funding
progress immediately following the notes to the financial statements presents multi-year trend information about whether
the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits.
Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of occurrence
of events far into the future. Examples include assumptions about future employment,mortality,and the healthcare cost
trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer
are subject to continual revision as actual results are compared with past expectations and new estimates are made about
the future.
Actuarial Methods and Acciimptiont
Projections of benefits for financial reporting purposes are based on the substantive plan(the plan as understood by the
employer and the plan members)and include the types of benefits provided at the time of each valuation. The actuarial
Washington State Auditor's Office Page 84
methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial
accrued liabilities,consistent with the long-term perspective of the calculations.
In the January 1,2017 actuarial valuation,the entry age normal actuarial cost method was used. The actuarial assumptions
used included a 3.5%discount rate,which is based upon the long-term investment yield on the investments that are expected
to be used to finance the payment of benefits. The medical(healthcare)trend rate of 7.9%for pre-65 retirees and 7.4%for
post-65 retirees is assumed and the inflation rate includes the dental inflation rate of 5.o%and long term care inflation rate
of 4.5%.
The UAAL is being amortized on a closed basis at the assumed discount rate using the level dollar amortization method. The
remaining amortization period at January 1,2017 was 12 years.
NOTE 12—ASSOCIATION OF WASHINGTON CITIES EMPLOYEE BENEFIT TRUST("Trust")
Trust Description
The City is a member of the Association of Washington Cities Employee Benefit Trust Health Care Program(AWC Trust
HCP).Chapter 48.62 RCW provides that two or more local government entities may,by Interlocal agreement under
Chapter 39.34 RCW,form together or join a pool or organization for the joint purchasing of insurance,and/or joint self-
insurance,to the same extent that they may individually purchase insurance,or self-insure.
An agreement to form a pooling arrangement was made pursuant to the provisions of Chapter 39.34 RCW,the Interlocal
Cooperation Act.The AWC Trust HCP was formed on January 1,2014 when participating cities,towns,and non-city entities
of the AWC Employee Benefit Trust in the State of Washington joined together by signing an Interlocal Governmental
Agreement to jointly self-insure certain health benefit plans and programs for participating employees,their covered
dependents and other beneficiaries through a designated account within the Trust.
As of December 31,2017,261 cities/towns/non-city entities participate in the AWC Trust HCP.
The AWC Trust HCP allows members to establish a program of joint insurance and provides health and welfare services to
all participating members.The AWC Trust HCP pools claims without regard to individual member experience.The pool is
actuarially rated each year with the assumption of projected claims run-out for all current members.The AWC Trust HCP
includes medical,dental and vision insurance through the following carriers: Kaiser Foundation Health Plan of Washington,
Kaiser Foundation Health Plan of Washington Options, Inc.,Regence BlueShield,Asuris Northwest Health,Delta Dental of
Washington,and Vision Service Plan.Eligible members are cities and towns within the state of Washington.Non-City
Entities(public agency,public corporation,intergovernmental agency,or political subdivision within the state of
Washington)are eligible to apply for coverage into the AWC Trust HCP,submitting application to the Board of Trustees for
review as required in the Trust Agreement.
Participating employers pay monthly premiums to the AWC Trust HCP.The AWC Trust HCP is responsible for payment of all
covered claims.In 2017,the AWC Trust HCP purchased stop loss insurance for Regence/Asuris plans at an Individual Stop Loss
(ISL)of$1.5 million through Life Map,and Kaiser ISL at$1 million with Companion Life through ASG Risk Management.The
aggregate policy is for z00%of expected medical claims.
Participating employers contract to remain in the AWC HCP for a minimum of three years.Participating employers with
over 25o employees must provide written notice of termination of all coverage a minimum of 12 months in advance of the
termination date,and participating employers with under 25o employees must provide written notice of termination of all
coverage a minimum of 6 months in advance of termination date.When all coverage is being terminated,termination will
only occur on December 31. Participating employers terminating a group or line of coverage must notify the HCP a
minimum of 6o days prior to termination.A participating employer's termination will not obligate that member to past
debts,or further contributions to the HCP.Similarly,the terminating member forfeits all rights and interest to the HCP
Account.
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The operations of the Health Care Program are managed by the Board of Trustees or its delegates.The Board of Trustees is
comprised of four regionally elected officials from Trust member cities or towns,the Employee Benefit Advisory Committee
Chair and Vice Chair,and two appointed individuals from the AWC Board of Directors,who are from Trust member cities or
towns. The Trustees or its appointed delegates review and analyze Health Care Program related matters and make
operational decisions regarding premium contributions, reserves, plan options and benefits in compliance with Chapter
48.62 RCW.
The Board of Trustees has decision authority consistent with the Trust Agreement, Health Care Program policies,Chapter
48.62 RCW and Chapter 200-tlo-WAC.
The accounting records of the Trust HCP are maintained in accordance with methods prescribed by the State Auditor's office
under the authority of Chapter 43.09 RCW.The Trust HCP also follows applicable accounting standards established by the
Governmental Accounting Standards Board("GASB").Year-end financial reporting is done on an accrual basis and submitted
to the Office of the State Auditor as required by Chapter 200-110 WAC.The audit report for the AWC Trust HCP is available
from the Washington State Auditor's office.
NOTE 13—CONSTRUCTION COMMITMENTS
At December 31,2017,the City had the following contractual obligations on construction projects:
SCHEDULE OF OUTSTANDING CONSTRUCTION OBLIGATIONS
As of December 31,2017
Amount Outstanding
Traffic projects $ 1,104,773
Street projects 2,914,429
Utilities projects 814,876
Other projects 69,953
Total commitments $ 4,904,030
NOTE 14—CEMETERY ENDOWED CARE FUND
The City maintains one permanent fund known as the cemetery endowed care fund. Paid into this fund is 10%of the base,
pre-tax sales price of each grave,niche or crypt. This fund is irreducible in principal and no part of the income of this fund
shall ever be used for purposes other than those specified upon the creation of the fund.
RCW 68.44.020 restricts the use of endowment net appreciation to endowment care"stipulated in the instrument by which
the fund was established". For the City,the instrument that established the fund is Auburn City Code section 3.04.080,and
section 3.040.120 governs the use of the fund.
ACC 3.04.120 restricts net interest or income from investments to the care of the lots and in the improvement or
embellishment of the cemetery or the erection or preservation of any buildings or structures,fences or walks, or for the
repair,preservation,erection or renewal of any tomb,monument,grave,stone,fence,railing or other erection in or around
the cemetery. The funds may also be used for planting and cultivating trees, shrubs, flowers or plants in or around the
cemetery. All expenditures of income from the fund must first be authorized by the City Council.
For 2017,of the$16,609 net appreciation on investments,all was available for expenditures. Amounts that are available for
expenditure are reflected as assigned fund balance.
Washington State Auditor's Office Page 86
NOTE 15—JOINT VENTURES/RELATED PARTY
Valley Communications Center
The"Valley Communications Center"was established August zo,1976,when an Interlocal Agreement was entered into by
four participating municipal corporations: Renton, Kent,Auburn and Tukwila. The provisions and terms of the"Interlocal
Cooperation Act",pursuant to RCW 39.34,sanction the agreement. The initial duration of the agreement was five years and
thereafter is automatically extended for consecutive two-year periods,unless terminated by one or more of the participating
cities. Any such termination must be in writing and served upon the other cities on or before July 1 in any one year and such
termination shall then become effective on the last day of such year.
On August 4,1999 the Administration Board of Valley Communications Center voted to include the City of Federal Way as a
full participating member city as of January 1,z000. 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 Corn, 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 Corn 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 Corn. The method of allocating revenue source was
changed in 1990 to a basis of prior year's calls with actual first and second quarter and estimated third and fourth quarter
calls. The allocation of prorated financial participation among the five participating cities is the percentage of estimated
dispatched calls attributed to each jurisdiction compared to the total actual and estimated dispatched calls,for the period
for January 1 through December 31. The percentages are applied to the current approved budget, less revenue from
subscribing agencies and all other sources.
The 2017 cost distribution for the five participating cities is as follows:
Dispatchable Percent of
Calls Total
Kent 115,303 26.55%
Renton 87,220 20.09%
Auburn 100,554 23.16%
Tukwila 36,635 8.44%
Federal Way 94,522 21.76%
Total 434,233 100.00%
* Distribution of current year net income is based on these budgeted percentages.
Valley Com is served by an Administration Board composed of the Mayors or designated representatives from the five
participating cities of Renton, Kent, Auburn, Tukwila and Federal Way. The Administration Board is responsible for the
following functions: 1)Budget review and recommendation to the legislative bodies of the participating cities,and budget
adoption after each legislative body has approved the required financial participation for the ensuing year; 2)Approval of
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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: i)Oversees the operation of Valley Corn,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 Corn 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 Corn 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 Kent Renton Auburn Tukwila Federal Way Total
Equity Dec 31, 2016 $ 6,314,604 $ 4,531,544 $ 4,504,828 $2,391,872 $ 3,484,567 $ 21,227,415
Current year change 900,497 681,177 785,309 286,110 738,205 3,391,298
Equity Dec 31, 2017 $ 7,215,101 $ 5,212,721 $ 5,290,137 $ 2,677,982 $ 4,222,772 $ 24,618,713
% of equity 29.31% 21.17% 21.49% 10.88% 17.15%
% of 2017 distribution 26.55% 20.09% 23.16% 8.44% 21.77%
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,27519108th Ave SE,Kent,WA 98030,or telephone 253-372-1300.
South Correctional Entity(SCORE)
The South Correctional Entity (SCORE) consolidated correctional facility was established February 25, 2009, when an
Interlocal Agreement(the"Original Interlocal Agreement")was entered into by seven participating municipal governments,
the"Member Cities"of Auburn, Burien, Des Moines, Federal Way, Renton,SeaTac and Tukwila,under the authority of the
"Interlocal Cooperation Act"(RCW 39.34). This"Original Interlocal Agreement"was amended and restated October 1,2009
and named the City of Des Moines as the"Host City"and the remaining Member Cities as"Owner Cities". This interlocal
agreement is known as the "Formation Interlocal Agreement". Pursuant to a separate "Host City Agreement" dated
October 1,2009,the Host City will not enjoy the same equity position as the Owner Cities until all debts issued are paid and
the Host City fulfills all of its obligations as outlined in the Host City Agreement. Pursuant to SCORE financial policies, all
unexpected funds or reserve funds shall be distributed based on the percentage of the Member City's average daily
population at the SCORE Facility for the last three(3)years regardless of its Owner City or Host City status.
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SCORE, a governmental administrative agency pursuant to RCW 3934.030(3), has the power to acquire, construct, own,
operate, maintain, equip, and improve a correctional facility known as the "SCORE Facility" and to provide correctional
services and functions incidental thereto,for the purpose of detaining arrestees and sentenced offenders in the furtherance
of public safety and emergencies within the jurisdiction of the Member Cities. The SCORE Facility may serve the Member
Cities and Subscribing Agencies which are in need of correctional facilities. Any agreement with a Subscribing Agency shall
be in writing and approved by SCORE as provided within the SCORE Formation Interlocal Agreement.
Financing for the acquisition,construction,equipping,and improvement of the SCORE Facility was provided by bonds issued
by the South Correctional Entity Facility Public Development Authority(the"SCORE PDA"),a public development authority
chartered by the City of Renton pursuant to RCW 35.21.730 through 35.21.755. The SCORE PDA issued$86 million in special
obligation bonds in 2009 (the "Bonds") to construct, develop, acquire and equip the SCORE Facility. Pursuant to the
Formation Interlocal Agreement and the ordinances of each city, each Owner City (which includes the Cities of Auburn,
Burien, Federal Way, Renton, SeaTac,and Tukwila)is obligated to budget for and pay its share, and only its share,of the
principal of and interest on the Bonds as the same become due and payable. Each Owner City's obligation to pay its portion
is an irrevocable,unconditional full faith and credit obligation of such Owner City,payable from property taxes levied within
the constitutional and statutory authority provided without a vote of the electors of the Owner City on all of the taxable
property within the Owner City and other sources of revenues available therefor.The following is a summary of the debt
service requirements for the Bonds:
Summary of Debt Service Requirements
Debt Service Schedule _ Debt Service Allocation to Owner Cities
BABs Auburn Burien Federal Way Renton SeaTac Tukwila
Year Pnncipal Interest Subsidy Total 31% 4% 18% 36% 3% 8%
2018 $ 2,240,000 $ 4,715,979 $ (1,512,496) $ 5,443,483 $ 1,687.480 $ 217,739 $ 979,827 $ 1,959,654 $ 163.304 $ 435,479
2019 2,310,000 4,602,229 (1,478,317) 5,433,912 1,684,513 217,356 978,104 1,956,208 163,017 434,713
2020 2,385,000 4,484,854 (1,440,560) 5,429,294 1,683,081 217,172 977,273 1,954,546 162,879 434,344
2021 2,465,000 4,363.604 (1,401,577) 5,427,027 1,682,378 217,081 976,865 1,953,730 162,811 434,162
2022 2,590,000 4,233,250 (1,500,618) 5,322,632 1,650,016 212,905 958.074 1,916,148 159,679 425,811
2023-2027 14,485,000 18,727,798 (6,710,481) 26,502,317 8.215,718 1,060,093 4,770,417 9,540,834 795,070 2,120,185
2028.2032 17,725,000 13,590,870 (4,959,695) 26,356,175 8,170,414 1,054,247 4,744,112 9,488,223 790,685 2.108,494
2033.2037 21,855,000 7,082,263 (2,731,829) 26,205,434 8,123,685 1,048,217 4,716.978 9,433,956 786,163 2,096,435
2038-2039 10,115,000 676.321 (353,824) 10,437,497 3,235,624 417,500 1,878,749 3,757,499 313,125 835.000
Totals $ 76,170,000 $ 62.477,168 $ (22,089,397) $116,557,771 $ 36,132,909 $ 4,662,310 $ 20.980,399 $ 41.960,798 $ 3.496,733 $ 9,324,623
Washington State Auditor's Office Page 89
The City of Auburn reports its share of equity interest in the Governmental Activities column within the Government-wide
financial statements under non-current assets. The following is condensed(unaudited)financial information as of December
31,2017 related to SCORE:
South Correctional Entity(SCORE)
Member City Percent of Equity 2016 Equity Balance 2017 Apportionment 2017 Equity Balance
Auburn 31.00% $ 3,115,334 $ 32,413 $ 3,147,747
Burien 3.00% 324,602 22,263 $ 346,865
Des Moines 2.00% 166,583 (3,248) $ 163,335
Federal Way 23.00% 2,292,265 61,482 $ 2,353,747
Renton 30.00% 2,941,503 74,665 $ 3,016,168
SeaTac 4.00% 434,029 22,947 $ 456,976
Tukwila 7.00% 703,323 16,099 $ 719,422
Grand Totals 100.00% $ 9,977.639 $ 226,621 $ 10,204,260
Completed financial statements for SCORE and SCORE PDA can be obtained at SCORE,20817 17th Avenue South,Des
Moines,WA 98198.
Since the obligation to fund future joint venture-related debt is separately reported as due to other governments,the
investment in joint ventures is reported as a combination of this debt with the current reported equity in joint ventures as
follows:
Investment in Joint Ventures
Balance Additions Reductions Balance
12/31/2016 12/31/2017
Valley Communication Public Dev Auth $ - $ - $ - $ -
SCORE Public Development Authority 23,612,700 - (694,400) 22,918,300
Due to Other Govemments 23,612,700 - (694,400) 22,918,300
Valley Communications Center 4,504,827 785,310 - 5,290,137
South Correctional Entity (SCORE) 3,115,334 32,413 - 3,147,747
Equity Share 7,620,161 817,723 - 8,437,884
Total Investment in Joint Ventures $31,356,184
NOTE 16—JOINTLY GOVERNED ORGANIZATION/RELATED PARTY
Residents of the cities of Auburn,Algona and Pacific approved in the November 7, 2006 general election the creation of a
regional fire authority pursuant to RCW 52.26.The new regional fire protection service authority,called the Valley Regional
Fire Authority (VRFA), provides first responder fire and emergency medical services to residents of Auburn, Algona and
Pacific.The VRFA is a new municipal corporation,with its own Governing Board,and is legally separate from the three cities
it serves.The Governing Board of the VRFA consists of the Mayors of the three cities within the VRFA service area,as well as
two Councilmembers from each city.Membership on the Governing Board is made by appointment from the city council of
the respective member cities. Effective January 1,2007,all personnel,assets,equipment and contractual obligations of the
former Auburn Fire Department were transferred to the VRFA. Similar transfers were made by the cities of Algona and
Pacific.
Washington State Auditor's Office Page 90
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 2017 Auburn paid$1,808,for the employer's share of active
LEOFF 1 firefighter medical premiums and benefit payments. Premium and benefit payments for retired LEOFF t firefighters
for 2017 were$123,889.Medical premiums and benefit payments made under the Fire Relief and Pension Plan for 2017 were
$67,052.
NOTE 17-CONTINGENCIES AND LITIGATIONS
As of December 31,2017,a number of claims were pending against the City for damages and legal actions. While the outcome
of these actions is uncertain, no uncovered losses are anticipated at this time with 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 general liability insurance.
The City participates in a number of federal and state assisted programs. These grants are subject to audit by the grantors
or their representatives. Such audits could result in requests for reimbursement to grantor agencies for expenditures
disallowed under the terms of the grants. The City's management believes that such disallowances,if any,will be immaterial.
NOTE 18-RISK MANAGEMENT&INSURANCE
Risk Management
The City is exposed to various risks of loss such as:theft and damage and destruction of assets,errors and omissions,injuries
or property damage to others,employees'health,and natural disasters. All risk financing activities are accounted for in the
Insurance internal service fund. To insure against risks of loss the City of Auburn is a member of the Washington Cities
Insurance Authority(WCIA).
Utilizing Chapter 48.62 RCW (self-insurance regulation) and Chapter 39.34 RCW (Interlocal Cooperation Act), nine cities
originally formed WCIA on January 1, 1981. WCIA was created for the purpose of providing a pooling mechanism for jointly
purchasing insurance,jointly self-insuring,and/or jointly contracting for risk management services. WCIA has a total of 161
Members.
New members initially contract for a three-year term, and thereafter automatically renew on an annual basis. A one-year
withdrawal notice is required before membership can be terminated. Termination does not relieve a former member from
its unresolved loss history incurred during membership.
Liability coverage is written on an occurrence basis, without deductibles. Coverage includes general, automobile, police,
errors or omissions,stop gap,employment practices and employee benefits liability. Limits are$4 million per occurrence in
the self-insured layer,and $21 million in limits above the self-insured layer is provided by reinsurance. Total limits are $25
million per occurrence subject to aggregate sublimits. The Board of Directors determines the limits and terms of coverage
annually.
Insurance coverage for property,automobile physical damage,fidelity,inland marine,and boiler and machinery coverage are
purchased on a group basis. Various deductibles apply by type of coverage. Property coverage is self-funded from the
members'deductible to$750,000,for all perils other than flood and earthquake,and insured above that to$300 million per
occurrence subject to aggregates and sublimits. Automobile physical damage coverage is self-funded from the members'
deductible to$250,000 and insured above that to$100 million per occurrence subject to aggregates and sublimits.
In-house services include risk management consultation,loss control field services, and claims and litigation administration.
WCIA contracts for certain claims investigations, consultants for personnel and land use issues, insurance brokerage,
actuarial,and lobbyist services.
Washington State Auditor's Office Page 91
•
WCIA is fully funded by its members, who make annual assessments on a prospectively rated basis, as determined by an
outside, independent actuary. The assessment covers loss, loss adjustment, reinsurance and administrative expenses. As
outlined in the interlocal,WCIA retains the right to additionally assess the membership for any funding shortfall.
An investment committee,using investment brokers,produces additional revenue by investment of WCIA's assets in financial
instruments which comply with all State guidelines.
A Board of Directors governs WCIA, which is comprised of one designated representative from each member. The Board
elects an Executive Committee and appoints a Treasurer to provide general policy direction for the organization. The WCIA
Executive Director reports to the Executive Committee and is responsible for conducting the day to day operations of WCIA.
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 become self-insured for worker's compensation in 2014.
Contributions are made from the operating funds. At December 31,2017 fund equity was$1,595,592.
NOTE 19-TAX ABATEMENTS
The city offers a multifamily property tax exemption within the downtown core to encourage construction of new
multifamily housing,and that the provisions of additional housing opportunities in the downtown core will assist in achieving
the goals of the city's comprehensive plan.Under Chapter 84.14 RCW,the city provides the opportunity for a limited,eight-
year exemptions from ad valorem property taxation for a qualified new multifamily and rehabilitated multifamily housing
constructed in the downtown core and 12-year exemptions from ad valorem property taxation for qualified new affordable
multifamily and rehabilitated multifamily housing contracted in the downtown core. Abatements are obtained through
application by the property owner, including proof of improvements that have been made, and equal 100 percent of the
additional property tax resulting from the increase in assessed value as a result of the improvements. If application is
approved and all requirements meet,exemption begins January 1St,of the year immediately following the calendar year of
issuance of the final certificate of tax emption. If at any time it is determined the property no longer complies with the
terms of the contract or the requirements, or the use of the property for any reason no longer qualifies for the tax
exemption,the tax exemption shall be cancelled and additional taxes,interest and penalties imposed.
The city has the following tax abatement agreement(s)in place as of December 31,2017.
1) Plan A Development LLC,project name Trek Apartments;a four story building of 126 apartment units with outdoor plaza
and ground parking and retail space. The final certificate of tax exemption was issued December 3,2015,with the eight-year
ad valorem property tax exemption to start with tax year 2016. The amount of the property tax abated during the fiscal year
2017 was$39,995.
2) Merrill Gardens at Auburn LLC, project name Merrill Gardens; a senior living community with 129 apartment units(114
assisted living units and 15 memory care units). The building is four stories above grade with one level of below grade parking.
The final certificate of tax exemption was issued September 14,2017,with the eight-year ad valorem property tax exemption
to start with tax year 2018.
Washington State Auditor's Office Page 92
NOTE 20—CHANGE IN ACCOUNTING PRINCIPLE
The City of Auburn implemented the second year requirement of Governmental Accounting Standards Board (GASB)
Statement 73,Accounting and Financial Reporting for Pensions and Related Assets that are not within the Scope of GASB 68,
and Amendments to Certain Provisions of GASB 67 and 68. The Fire Relief and Pension Fund is reported under GASB 73 for
financial reporting(recognize a pension liability),note disclosure and supplementary information.
Washington State Auditor's Office Page 93
REQUIRED SUPPLEMENTARY INFORMATION
Schedule of Proportionate Share of the Net Pension Liability
As of June 3o,2017
Last 10 Fiscal Years*
PERS 1 2017 2016 2015
Employer's proportion of the net pension liability(asset) 0.192614% 0.194185% 0.192878%
Employer's proportionate share of the net pension liability(asset) $ 9,139,685 $10,428,649 $10,089,313
Covered payroll $ 181,521 $ 212,906 $ 328,015
Employer's proportionate share of the net pension liability as a percentage
of its covered payroll 5035.06% 4898.24% 3075.87%
Plan fiduciary net position as a percentage of the total pension liability 61.24% 57.03% 59.10%
PERS 2/3 2017 2016 2015
Employer's proportion of the net pension liability(asset) 0.243488% 0.247760% 0.241739%
Employer's proportionate share of the net pension liability(asset) $ 8,460,044 $12,223,580 $ 8,637,472
Covered payroll $23,904,107 $22,734,107 $21,460,504
Employer's proportionate share of the net pension liability as a percentage
of its covered payroll 35.39% 53.77% 40.25%
Plan fiduciary net position as a percentage of the total pension liability 90.97% 85.82% 89.20%
LEOFF 1 2017 2016 2015
Employer's proportion of the net pension liability(asset) 0.102451% 0.101574% 0.103718%
Employer's proportionate share of the net pension liability(asset) $ (1,554,407) $ (1,046,503) $ (1,250,031)
Covered payroll $ - $ - $ -
Employer's proportionate share of the net pension liability as a percentage
of its covered payroll 0.00% 0.00% 0.00%
Plan fiduciary net position as a percentage of the total pension liability 136.00% 123.74% 127.36%
LEOFF 2 2017 2016 2015
Employer's proportion of the net pension liability(asset) 0.370954% 0.359661% 0.354511%
Employer's proportionate share of the net pension liability(asset) $ (5,147,640) $ (2,091,896) $ (2,193,486)
State's proportionate share of the net pension liability(asset)associated
with the employer $ (3,339,178) $ (1,363,764) $ (1,450,178)
Total $ (8,486,818) $ (3,455,660) $ (3,643,664)
Covered payroll $11,623,292 $10,953,667 $10,336,409
Employer's proportionate share of the net pension liability as a percentage
of its covered payroll -44.29% -19.10% -21.22%
Plan fiduciary net position as a percentage of the total pension liability 113.40% 106.04% 111.67%
Washington State Auditor's Office Page 94
REQUIRED SUPPLEMENTARY INFORMATION
Schedule of Proportionate Share of the Net Pension Liability
As of June 30,2017
Last io Fiscal Years*
* The City implemented GASB Statement No.68 in fiscal year 2015. Information is not available for prior years. The schedule
will be built prospectively until it contains ten years of data.
Notes to Srhpdiilp•
Significant methods and assumptions used in calculating the actuarial determined contribution are presented in Note 10.
Contribution and covered payroll on this schedule is based on the plan fiscal year—July 1—June 30.
The LEOFF 1 plan is closed and has no further covered payroll.
Washington State Auditor's Office Page 95
Schedule of Employer Contributions
As of December 31 2017
Last 10 Fiscal Years*
PERS 1 2017 2016 2015
Statutorily or contractually required contributions $ 22,545 $ 20,088 $ 30,642
Contributions in relation to the statutorily or contractually required contributions $ (22,545) $ (20,088) $ (30,642)
Contribution deficiency(excess) $ - $ - $ -
Covered payroll $ 188,486 $ 179,680 $ 306,408
Contributions as a percentage of covered payroll 11.96% 11.18% 10.00%
PERS 2/3 2017 2016 2015
Statutorily or contractually required contributions $ 2,908,411 $ 2,608,360 $ 2,258,109
Contributions in relation to the statutorily or contractually required contributions $(2,908,411) $(2,608,360) $(2,258,109)
Contribution deficiency(excess) $ - $ - $ -
Covered payroll $24,350,435 $23,330,702 $22,130,501
Contributions as a percentage of covered payroll 11.94% 11.18% 10.20%
LEOFF 2 2017 2016 2015
Statutorily or contractually required contributions $ 639,662 $ 594,665 $ 551,812
Contributions in relation to the statutorily or contractually required contributions $ (639,662) $ (594,665) $ (551,812)
Contribution deficiency(excess) $ - $ - $ -
Covered payroll $11,992,821 $11,370,216 $10,553,437
Contributions as a percentage of covered payroll 5.33% 5.23% 5.23%
* The City implemented GASB Statement No.68 in fiscal year 2015. Information is not available for prior years. The schedule
will be built prospectively until it contains ten years of data.
Note to Schedule•
Significant methods and assumptions used in calculating the actuarial determined contribution are presented in Note 10.
Washington State Auditor's Office Page 96
REQUIRED SUPPLEMENTARY INFORMATION
Schedule of Changes in Total Pension Liability&Related Ratio's
Fire Relief and Pension Plan
Last 10 Fiscal Years*
Fiscal Year Ending December 31
2017 2016 2015 2014 2013 2012 2011 2010 2009 2008
Total Pension Liability-Beginning $3,218,004 N/A N/A N/A N/A N/A N/A N/A N/A N/A
Service Cost - N/A N/A N/A N/A N/A N/A N/A N/A N/A
Interest on Total Pension Liability 116,957 N/A N/A N/A N/A N/A N/A N/A N/A N/A
Effect of Plan Changes - N/A N/A N/A N/A N/A N/A N/A N/A N/A
Effect of Economic/Demographic Gains(Losses) - N/A N/A N/A N/A N/A N/A N/A N/A N/A
Effect of Assumption Changes or Inputs 77,612 N/A N/A N/A N/A N/A N/A N/A N/A N/A
Benefit Payments (200,138) N/A N/A N/A N/A N/A N/A N/A N/A N/A
Net Change in Total Pension Liability (5,569) N/A N/A N/A N/A N/A N/A N/A N/A N/A
Total Pension Liability-Ending $3,212,435 N/A N/A N/A N/A N/A N/A N/A N/A N/A
Covered Payroll - N/A N/A N/A N/A N/A N/A N/A N/A N/A
Total Pension Liability as a%of Covered Payroll N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
*The City implemented GASB Statement No.73 in fiscal year 2017. Information is not available for prior years. The schedule
will be built prospectively until it contains ten years of data.
Notes to Sr-het-1111p.
No assets have been accumulated in a trust that meets the criteria of a qualified plan.
The effect of assumption changes or inputs is the result of a change in the discount rate from 3.75%as of December 31,2016
to 3.50%as of December 31,2017.
Significant methods and assumptions used in calculating the actuarial determined contribution are presented in Note 10.
Washington State Auditor's Office Page 97
REQUIRED SUPPLEMENTARY INFORMATION
Retiree Medical and Long-Term Care Benefits for Firemen's Relief and Pension Plan and LEOFF 1 Employees
January 1,2017
GASB STATEMENTS No.43 and No.45
SCHEDULE OF FUNDING PROGRESS
(rounded to thousands)
Unfunded
Actuarial UAAL as a
Actuarial Actuarial Accrued Percentage
Actuarial Value Accrued Liabilities Funded Covered of Covered
Valuation Date of Assets Liabilities (UAAL) Ratio Payroll Payroll
January 1,2008 20,738 20,738 o% N/A N/A
January 1,2011 - 26,482 26,482 0% N/A N/A
January 1,2014 - 26,246 26,246 0% N/A N/A
January 1,2017 - 17,565 17,565 0% N/A N/A
GASB STATEMENT No.43 SCHEDULE OF EMPLOYER CONTRIBUTIONS
Annual Required
Year Ending Employer Contribution Percentage of
12/31 Contributions (ARC) ARC Contributed
2012 1,104,259 2,197,396 50%
2013 1,24,809 2,197,396 51%
2014 793,286 2,285,629 35%
2015 909,657 2,285,629 40%
2016 350,332 2,285,629 28%
2017 578,606 1,817,738 32%
Washington Slate Auditor's Office Page 98
City of Auburn
Schedule of Expenditures of Federal Awards
For the Year Ended December 31, 2017 -
a
Expenditures
og
0
', From Pass- Passed through
Federal Agency CFDA Other Award Through From Direct to
Fc
a.r (Pass-Through Agency) Federal Program Number Number Awards Awards Total Subrecipients Note
a
C7 CDBG-Entitlement Grants Cluster
.--
o
Office Of Community Planning Community 14.218 B-17-MC-53- - 448,718 448,718 -
And Development, Department Development Block 0014; B-16-MC-
Of Housing And Urban Grants/Entitlement 53-0014 ; B-15-
Development Grants MC-53-0014
Office Of Community Planning Community 14.218 B-14-MC-53- - 85,397 85,397 -
And Development, Department Development Block 0014; B-15-MC-
Of Housing And Urban Grants/Entitlement 53-0014; B-17-
Development Grants MC-53-0014
Office Of Community Planning Community 14.218 B-16-MC-53- - 5,025 5,025 -
And Development, Department Development Block 0014
Of Housing And Urban Grants/Entitlement
Development Grants
Office Of Community Planning Community 14.218 B-17-MC-53- - 29,411 29,411 -
And Development, Department Development Block 0014
Of Housing And Urban Grants/Entitlement
Development Grants
Office Of Community Planning Community 14.218 B-14-MC-53- - 14,743 14,743 -
And Development, Department Development Block 0014
Of Housing And Urban Grants/Entitlement
Development Grants
Office Of Community Planning Community 14.218 B-17-MC-53- - 39,000 39,000 39,000 3
And Development, Department Development Block 0014
Of Housing And Urban Grants/Entitlement
Development Grants
Office Of Community Planning Community 14.218 B-17-MC-53- - 20,000 20,000 20,000 3
And Development, Department Development Block 0014
Of Housing And Urban Grants/Entitlement
Development Grants
Office Of Community Planning Community 14.218 B-17-MC-53- - 10,000 10,000 10,000 3
xAnd Development, Department Development Block 0014
Of Housing And Urban Grants/Entitlement
4.
e Development Grants
The accompanying notes are an integral part of this schedule.
City of Auburn
Schedule of Expenditures of Federal Awards
For the Year Ended December 31, 2017
a
s. Expenditures
00
0
', From Pass- Passed through
2 Federal Agency CFDA Other Award Through From Direct to
a (Pass-Through Agency) Federal Program Number Number Awards Awards Total Subrecipients Note
r
a
Total CDBG- Entitlement Grants Cluster: - 652,294 652,294 69,000
0
Bureau Of Justice Assistance, Bulletproof Vest 16.607 2016-BU-BX- - 13,227 13,227 -
Department Of Justice Partnership Program 16080615
Office Of Community Oriented Public Safety 16.710 2013UMWX012 - 65,975 65,975 - 2
Policing Services, Department Of Partnership and 0
Justice Community Policing
Grants
Office Of Community Oriented Public Safety 16.710 2014UMWX007 - 80,528 80,528 - 2
Policing Services, Department Of Partnership and 9
Justice Community Policing
Grants
Office Of Community Oriented Public Safety 16.710 2016UMWX010 - 47,564 47,564 - 2
Policing Services, Department Of Partnership and 4
Justice Community Policing
Grants
Total CFDA 16.710: - 194,067 194,067 -
Bureau Of Justice Assistance, Edward Byrne Memorial 16.738 2014-DJ-BX- 3,100 - 3,100 -
Department Of Justice(via City of Justice Assistance 1034
Seattle) Grant Program
Bureau Of Justice Assistance, Edward Byrne Memorial 16.738 2015-DJ-BX- 3,126 - 3,126 - 2
Department Of Justice (via City of Justice Assistance 0552
Seattle) Grant Program
Bureau Of Justice Assistance, Edward Byrne Memorial 16.738 2016-DJ-BX- 28,267 - 28,267 - 2
Department Of Justice(via City of Justice Assistance 0138
Seattle) Grant Program
Bureau Of Justice Assistance, Edward Byrne Memorial 16.738 F16-31440-013 13,230 - 13,230 - 2
Department Of Justice(via Pierce Justice Assistance
Do County) Grant Program
o Total CFDA 16.738: 47,723 - 47,723 -
The accompanying notes are an integral part of this schedule.
City of Auburn
Schedule of Expenditures of Federal Awards -
For the Year Ended December 31, 2017
,
Expenditures
og0
', From Pass- Passed through
A Federal Agency CFDA Other Award Through From Direct to
(Pass-Through Agency) Federal Program Number Number Awards Awards Total Subrecipients Note
a
Bureau Of Justice Assistance, N/A-Cooperative 16.PA- PA-WAW-0321 - 3,530 3,530 - 2
o Department Of Justice(via Drug Agreement with Drug WAW-
Enforcement Administration) Enforcement 0321
Administration
Bureau Of Justice Assistance, N/A-Cooperative 16.UNK N/A - 23,097 23,097 - 2
Department Of Justice(via Drug Agreement with Drug NOWN
Enforcement Administration) Enforcement
Administration
Federal Aviation Administration Airport Improvement 20.106 3-53-0003-022- - 5,642 5,642 - 2,4
(faa), Department Of Program 2015
Transportation
Federal Aviation Administration Airport Improvement 20.106 3-53-0003-023- - 13,990 13,990 - 2,4
(faa), Department Of Program 2017
Transportation
Total CFDA 20.106: - 19,632 19,632 -
Highway Planning and Construction Cluster
Federal Highway Administration Highway Planning and 20.205 HSIP-0164(015) 1,959,572 - 1,959,572 - 2,4
(fhwa), Department Of Construction
Transportation (via WA State
Department of Transportation)
Federal Highway Administration Highway Planning and 20.205 STPUL-1090 1,184,209 - 1,184,209 - 2,4
(fhwa), Department Of Construction (009)
Transportation (via WA State
Department of Transportation)
Federal Highway Administration Highway Planning and 20.205 CM-1094(002) 22,062 - 22,062 - 2
(fhwa), Department Of Construction
Transportation (via WA State
Department of Transportation)
b
oo Federal Highway Administration Highway Planning and 20.205 HSIP-000S 397,160 - 397,160 - 2
o (fhwa), Department Of Construction (447)
Transportation (via WA State
Department of Transportation)
The accompanying notes are an integral part of this schedule.
City of Auburn
Schedule of Expenditures of Federal Awards
For the Year Ended December 31, 2017
a
wExpenditures
0
', From Pass- Passed through
Federal Agency CFDA Other Award Through From Direct to
qvr
(Pass-Through Agency) Federal Program Number Number Awards Awards Total Subrecipients Note
a
Federal Highway Administration Highway Planning and 20.205 HSIP-1069(007) 36,830 - 36,830 - 2
(fhwa), Department Of Construction
o
Transportation (via WA State
Department of Transportation)
Federal Highway Administration Highway Planning and 20.205 STPUL-1071 846,639 - 846,639 - 2
(fhwa), Department Of Construction (007)
Transportation (via WA State
Department of Transportation)
Federal Highway Administration Highway Planning and 20.205 HSIP-1103(017) 38,073 - 38,073 - 2
(fhwa), Department Of Construction
Transportation (via WA State
Department of Transportation)
Federal Highway Administration Highway Planning and 20.205 STPUL-9917 22,208 - 22,208 - 2
(fhwa), Department Of Construction (028)
Transportation (via WA State
Department of Transportation)
Federal Highway Administration Highway Planning and 20.205 STPUL-3290 689,101 - 689,101 - 2
(fhwa), Department Of Construction (012)
Transportation (via WA State
Department of Transportation)
Federal Highway Administration Highway Planning and 20.205 HSIP-1069(008) 16,999 - 16,999 - 2
(fhwa), Department Of Construction
Transportation (via WA State
Department of Transportation)
Total Highway Planning and Construction Cluster: 5,212,853 - 5,212,853 -
Highway Safety Cluster
National Highway Traffic Safety State and Community 20.600 Section 402 10,796 - 10,796 - 2
Administration (nhtsa), Highway Safety
Department Of Transportation
b (via WA Traffic Safety
o Commission)
o
ti
The accompanying notes are an integral part of this schedule.
City of Auburn
Schedule of Expenditures of Federal Awards
For the Year Ended December 31, 2017
,
Expenditures
coz
S.
L., From Pass- Passed through
2 Federal Agency CFDA Other Award Through From Direct to
a (Pass-Through Agency) Federal Program Number Number Awards Awards Total Subrecipients Note
a
o National Highway Traffic Safety State and Community 20.600 PT17-06 16,775 - 16,775 - 2
Administration (nhtsa), Highway Safety
o
Department Of Transportation
(via WA Traffic Safety
Commission)
National Highway Traffic Safety State and Community 20.600 PT17-06 11,575 - 11,575 - 5
Administration (nhtsa), Highway Safety
Department Of Transportation
(via WA Traffic Safety
Commission)
National Highway Traffic Safety State and Community 20.600 PT17-04 464 - 464 - 2
Administration (nhtsa), Highway Safety
Department Of Transportation
(via WA Traffic Safety
Commission)
Total CFDA 20.600: 39,610 - 39,610 -
National Highway Traffic Safety National Priority Safety 20.616 MAP-21 Section 3,500 - 3,500 - 2
Administration (nhtsa), Programs 405d
Department Of Transportation
(via WA Traffic Safety
Commission)
National Highway Traffic Safety National Priority Safety 20.616 Section 402 1,627 - 1,627 -
Administration (nhtsa), Programs
Department Of Transportation
(via WA Traffic Safety
Commission)
Total CFDA 20.616: 5,127 - 5,127 -
Total Highway Safety Cluster: 44,737 - 44,737 -
Drinking Water State Revolving Fund Cluster
a Office Of Water, Environmental Capitalization Grants for 66.468 DM16-952-046 70,798 - 70,798 - 6
4 Protection Agency(via WA Drinking Water State
w Department of Commerce) Revolving Funds
Total Drinking Water State Revolving Fund Cluster: 70,798 - 70,798 -
The accompanying notes are an integral part of this schedule.
City of Auburn
Schedule of Expenditures of Federal Awards
For the Year Ended December 31, 2017
Expenditures
oq
c-, From Pass- Passed through
E- Federal Agency CFDA Other Award Through From Direct to
a (Pass-Through Agency) Federal Program Number Number Awards Awards Total Subrecipients Note
a
0
Federal Emergency Management Hazard Mitigation Grant 97.039 FEMA-4168-DR 19,172 - 19,172 - 2
o Agency(fema), Department Of -WA-6-R
Homeland Security(via WA State
Military Department)
Federal Emergency Management Emergency 97.042 E17-171 29,285 - 29,285 - 2
Agency(fema), Department Of Management
Homeland Security(via WA State Performance Grants
Military Department)
Federal Emergency Management Emergency 97.042 E18-076 12,459 - 12,459 - 2
Agency(fema), Department Of Management
Homeland Security(via WA State Performance Grants
Military Department)
Total CFDA 97.042: 41,744 - 41,744 -
Total Federal Awards Expended: 5,437,027 905,847 6,342,874 69,000
a
ft
m
a
The accompanying notes are an integral part of this schedule.
MCAG No. 0369 CITY of AUBURN Schedule 16
Notes to the Schedule of Expenditures of Federal Awards
For the Year Ended December 31, 2017
NOTE 1 - BASIS OF ACCOUNTING
This schedule is prepared on the same basis of accounting as the City of Auburn's financial statements.
The city uses the modified accrual basis of accounting.
NOTE 2 - PROGRAM COSTS
The amounts shown as current year expenditures represent only the federal grant portion of the program
costs. Entire program costs, including the City's portion, may be more than shown.
NOTE 3 -AMOUNTS AWARDED TO SUBRECIPIENTS
Included in the total amount expended for this program is $ 69,000 that was passed through to a
subrecipient that administered its own project.
NOTE 4- PRIOR YEAR PROGRAM COSTS
Expenditures for this program include expenses that were incurred in prior years but was not included in the
2016 SEFA and was reimbursed in 2017.
NOTE 5 - NONCASH AWARDS -CONTRACT SERVICES
The City received contract services that was paid with Federal Department of Transportation funds by
the Washington Traffic Safety Commission. The amount reported on the schedule is total amount paid
directly by WTSC for communications contract services supporting the city project.
NOTE 6 - FEDERAL LOANS
The City was approved by the EPA and the PWB to receive a loan totaling $1,353,400 for the Coal Creek
Springs Transmission Main Replacement. The amount presented in this schedule are the 2017 funded
expenses.
NOTE 7 - INDIRECT COST RATE
The City has not elected to use the 10-percent de minimis indirect cost rate allowed under the
Uniform Guidance.
Washington State Auditors Office Page 105
ABOUT THE STATE AUDITOR'S OFFICE
The State Auditor's Office is established in the state's Constitution and is part of the executive
branch of state government. The State Auditor is elected by the citizens of Washington and serves
four-year terms.
We work with our audit clients and citizens to achieve our vision of government that works for
citizens, by helping governments work better, cost less, deliver higher value, and earn greater
public trust.
In fulfilling our mission to hold state and local governments accountable for the use of public
resources, we also hold ourselves accountable by continually improving our audit quality and
operational efficiency and developing highly engaged and committed employees.
As an elected agency, the State Auditor's Office has the independence necessary to objectively
perform audits and investigations. Our audits are designed to comply with professional standards
as well as to satisfy the requirements of federal, state, and local laws.
Our audits look at financial information and compliance with state, federal and local laws on the
part of all local governments, including schools, and all state agencies, including institutions of
higher education. In addition, we conduct performance audits of state agencies and local
governments as well as fraud, state whistleblower and citizen hotline investigations.
The results of our work are widely distributed through a variety of reports, which are available on
our website and through our free, electronic subscription service.
We take our role as partners in accountability seriously, and provide training and technical
assistance to governments, and have an extensive quality assurance program.
Contact information for the State Auditor's Office
Public Records requests PublicRecords@a,sao.wa.gov
Main telephone (360) 902-0370
Toll-free Citizen Hotline (866) 902-3900
Website www.sao.wa.gov
Washington State Auditor's Office Page 106
3 - 53 - 0003 - 025 - 2019
U.S.Department
of Transportation
Federal Aviation
Administration
GRANT AGREEMENT
PART I—OFFER
Date of Offer September 27, 2019
Airport/Planning Area Auburn Municipal Airport—Auburn, Washington
AIP Grant Number 3-53-0003-025-2019 (Contract Number: DOT-FA19NM-0069)
DUNS Number 032942575
TO: City of Auburn, Washington
(herein called the"Sponsor")
FROM: The United States of America(acting through the Federal Aviation Administration, herein called the
"FAA")
WHEREAS, the Sponsor has submitted to the FAA a Project Application dated August 8, 2019,for a grant of
Federal funds for a project at or associated with the Auburn Municipal Airport, which is included as part of
this Grant Agreement; and
WHEREAS,the FAA has approved a project for the Auburn Municipal Airport (herein called the "Project")
consisting of the following:
Extend Runway 16/34 (Phase 2 -construction);
which is more fully described in the Project Application.
NOW THEREFORE,According to the applicable provisions of the former Federal Aviation Act of 1958, as
amended and recodified,49 U.S.C. §40101, et seq., and the former Airport and Airway Improvement Act
of 1982 (AAIA), as amended and recodified, 49 U.S.C. §47101, et seq., (herein the AAIA grant statute is
referred to as "the Act"),the representations contained in the Project Application, and in consideration of
(a) the Sponsor's adoption and ratification of the Grant Assurances dated March 2014, as applied and
interpreted consistent with the FAA Reauthorization Act of 2018 (see 2018 FAA Reauthorization grant
condition.), (b) and the Sponsor's acceptance of this Offer; and, (c)the benefits to accrue to the United
States and the public from the accomplishment of the Project and compliance with the Grant Assurances
and conditions as herein provided.
THE FEDERAL AVIATION ADMINISTRATION, FOR AND ON BEHALF OF THE UNITED STATES, HEREBY
OFFERS AND AGREES to pay ninety(90) percent of the allowable costs incurred accomplishing the
Project as the United States share of the Project.
1
3 - 53 - 0003 - 025 - 2019
This Offer is made on and SUBJECT TO THE FOLLOWING TERMS AND CONDITIONS:
CONDITIONS
1. Maximum Obligation.The maximum obligation of the United States payable under this Offer is
$2,858,343.
The following amounts represent a breakdown of the maximum obligation for the purpose of establishing
allowable amounts for any future grant amendment,which may increase the foregoing maximum
obligation of the United States under the provisions of 49 U.S.C. §47108(b):
$0 for planning
$2,858,343 airport development or noise program implementation; and,
$0 for land acquisition.
The source of this Grant may include funding from the Small Airport Fund.
2. Period of Performance.The period of performance begins on the date the Sponsor formally accepts this
agreement. Unless explicitly stated otherwise in an amendment from the FAA, the end date of the period
of performance is 4 years (1,460 calendar days) from the date of formal grant acceptance by the Sponsor.
The Sponsor may only charge allowable costs for obligations incurred prior to the end date of the period of
performance (2 CFR §200.309). Unless the FAA authorizes a written extension,the sponsor must submit all
project closeout documentation and liquidate (pay off)all obligations incurred under this award no later
than 90 calendar days after the end date of the period of performance (2 CFR§200.343).
The period of performance end date does not relieve or reduce Sponsor obligations and assurances that
extend beyond the closeout of a grant agreement.
3. Ineligible or Unallowable Costs.The Sponsor must not include any costs in the project that the FAA has
determined to be ineligible or unallowable.
4. Determining the Final Federal Share of Costs.The United States' share of allowable project costs will be
made in accordance with the regulations, policies, and procedures of the Secretary. Final determination of
the United States' share will be based upon the final audit of the total amount of allowable project costs
and settlement will be made for any upward or downward adjustments to the Federal share of costs.
5. Completing the Project Without Delay and in Conformance with Requirements.The Sponsor must carry
out and complete the project without undue delays and in accordance with this agreement, and the
regulations, policies, and procedures of the Secretary. Per 2 CFR § 200.308,the Sponsor agrees to report
to the FAA any disengagement from performing the project that exceeds three months.The report must
include a reason for the project stoppage.The Sponsor also agrees to comply with the assurances which
are part of this agreement.
6. Amendments or Withdrawals before Grant Acceptance.The FAA reserves the right to amend or withdraw
this offer at any time prior to its acceptance by the Sponsor.
7. Offer Expiration Date.This offer will expire and the United States will not be obligated to pay any part of
the costs of the project unless this offer has been accepted by the Sponsor on or before September 27,
2019, or such subsequent date as may be prescribed in writing by the FAA.
8. Improper Use of Federal Funds.The Sponsor must take all steps, including litigation if necessary,to
recover Federal funds spent fraudulently,wastefully,or in violation of Federal antitrust statutes, or
misused in any other manner for any project upon which Federal funds have been expended. For the
purposes of this grant agreement,the term "Federal funds" means funds however used or dispersed by
the Sponsor,that were originally paid pursuant to this or any other Federal grant agreement. The Sponsor
2
3 - 53 - 0003 - 025 - 2019
must obtain the approval of the Secretary as to any determination of the amount of the Federal share of
such funds.The Sponsor must return the recovered Federal share, including funds recovered by
settlement, order, or judgment,to the Secretary.The Sponsor must furnish to the Secretary, upon request,
all documents and records pertaining to the determination of the amount of the Federal share or to any
settlement, litigation, negotiation, or other efforts taken to recover such funds. All settlements or other
final positions of the Sponsor, in court or otherwise, involving the recovery of such Federal share require
advance approval by the Secretary.
9. United States Not Liable for Damage or Injury.The United States is not responsible or liable for damage
to property or injury to persons which may arise from, or be incident to,compliance with this grant
agreement.
10. System for Award Management(SAM) Registration And Universal Identifier.
A. Requirement for System for Award Management(SAM): Unless the Sponsor is exempted from this
requirement under 2 CFR 25.110,the Sponsor must maintain the currency of its information in the
SAM until the Sponsor submits the final financial report required under this grant, or receives the final
payment, whichever is later.This requires that the Sponsor review and update the information at least
annually after the initial registration and more frequently if required by changes in information or
another award term. Additional information about registration procedures may be found at the SAM
website (currently at http://www.sam.gov).
B. Data Universal Numbering System: DUNS number means the nine-digit number established and
assigned by Dun and Bradstreet, Inc. (D & B)to uniquely identify business entities. A DUNS number
may be obtained from D& B by telephone (currently 866-705-5771) or on the web (currently at
http://fedgov.dnb.com/webform).
11. Electronic Grant Payment(s). Unless otherwise directed by the FAA,the Sponsor must make each payment
request under this agreement electronically via the Delphi elnvoicing System for Department of
Transportation (DOT) Financial Assistance Awardees.
12. Informal Letter Amendment of AIP Projects. If, during the life of the project, the FAA determines that the
maximum grant obligation of the United States exceeds the expected needs of the Sponsor by$25,000 or
five percent (5%), whichever is greater,the FAA can issue a letter amendment to the Sponsor unilaterally
reducing the maximum obligation.
The FAA can also issue a letter to the Sponsor increasing the maximum obligation if there is an overrun in
the total actual eligible and allowable project costs to cover the amount of the overrun provided it will not
exceed the statutory limitations for grant amendments.The FAA's authority to increase the maximum
obligation does not apply to the "planning" component of condition No. 1.
The FAA can also issue an informal letter amendment that modifies the grant description to correct
administrative errors or to delete work items if the FAA finds it advantageous and in the best interests of
the United States.
An informal letter amendment has the same force and effect as a formal grant amendment.
13. Air and Water Quality.The Sponsor is required to comply with all applicable air and water quality
standards for all projects in this grant. If the Sponsor fails to comply with this requirement,the FAA may
suspend, cancel, or terminate this agreement.
14. Financial Reporting and Payment Requirements.The Sponsor will comply with all federal financial
reporting requirements and payment requirements, including submittal of timely and accurate reports.
15. Buy American. Unless otherwise approved in advance by the FAA,the Sponsor will not acquire or permit
any contractor or subcontractor to acquire any steel or manufactured products produced outside the
3
3 - 53 - 0003 - 025 - 2019
United States to be used for any project for which funds are provided under this grant.The Sponsor will
include a provision implementing Buy American in every contract.
16. Maximum Obligation Increase For Nonprimary Airports.ln accordance with 49 U.S.C. § 47108(b), as
amended,the maximum obligation of the United States, as stated in Condition No. 1 of this Grant Offer:
A. May not be increased for a planning project;
B. May be increased by not more than 15 percent for development projects;
C. May be increased by not more than 15 percent or by an amount not to exceed 25 percent of the total
increase in allowable costs attributable to the acquisition of land or interests in land,whichever is
greater, based on current credible appraisals or a court award in a condemnation proceeding.
17. Audits for Public Sponsors.The Sponsor must provide for a Single Audit or program specific audit in
accordance with 2 CFR part 200. The Sponsor must submit the audit reporting package to the Federal
Audit Clearinghouse on the Federal Audit Clearinghouse's Internet Data Entry System at
http://harvester.census.gov/facweb/. Provide one copy of the completed audit to the FAA if requested.
18. Suspension or Debarment. When entering into a "covered transaction" as defined by 2 CFR §180.200, the
Sponsor must:
A. Verify the non-federal entity is eligible to participate in this Federal program by:
1. Checking the excluded parties list system (EPLS) as maintained within the System for Award
Management(SAM)to determine if the non-federal entity is excluded or disqualified; or
2. Collecting a certification statement from the non-federal entity attesting they are not excluded or
disqualified from participating; or
3. Adding a clause or condition to covered transactions attesting individual or firm are not excluded
or disqualified from participating.
B. Require prime contractors to comply with 2 CFR§180.330 when entering into lower-tier transactions
(e.g. Sub-contracts).
C. Immediately disclose to the FAA whenever the Sponsor(1) learns they have entered into a covered
transaction with an ineligible entity or(2)suspends or debars a contractor, person, or entity.
19. Ban on Texting While Driving.
A. In accordance with Executive Order 13513, Federal Leadership on Reducing Text Messaging While
Driving, October 1, 2009, and DOT Order 3902.10,Text Messaging While Driving, December 30, 2009,
the Sponsor is encouraged to:
1. Adopt and enforce workplace safety policies to decrease crashes caused by distracted drivers
including policies to ban text messaging while driving when performing any work for, or on behalf
of, the Federal government, including work relating to a grant or subgrant.
2. Conduct workplace safety initiatives in a manner commensurate with the size of the business, such
as:
a. Establishment of new rules and programs or re-evaluation of existing programs to
prohibit text messaging while driving; and
b. Education, awareness, and other outreach to employees about the safety risks associated
with texting while driving.
B. The Sponsor must insert the substance of this clause on banning texting while driving in all subgrants,
contracts and subcontracts.
4
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20. Exhibit "A" Property Map.The Exhibit "A" Property Map dated May 27, 2015, is incorporated herein by
reference or is submitted with the project application and made part of this grant agreement.
21. Employee Protection from Reprisal.
A. Prohibition of Reprisals—
1. In accordance with 41 U.S.C. §4712, an employee of a grantee or subgrantee may not be
discharged, demoted, or otherwise discriminated against as a reprisal for disclosing to a person or
body described in sub-paragraph (A)(2), information that the employee reasonably believes is
evidence of:
i. Gross mismanagement of a Federal grant;
ii. Gross waste of Federal funds;
iii. An abuse of authority relating to implementation or use of Federal funds;
iv. A substantial and specific danger to public health or safety; or
v. A violation of law, rule, or regulation related to a Federal grant.
2. Persons and bodies covered:The persons and bodies to which a disclosure by an employee is
covered are as follows:
i. A member of Congress or a representative of a committee of Congress;
ii. An Inspector General;
iii. The Government Accountability Office;
iv. A Federal office or employee responsible for oversight of a grant program;
v. A court or grand jury;
vi. A management office of the grantee or subgrantee; or
vii. A Federal or State regulatory enforcement agency.
3. Submission of Complaint—A person who believes that they have been subjected to a reprisal
prohibited by paragraph A of this grant term may submit a complaint regarding the reprisal to the
Office of Inspector General (OIG)for the U.S. Department of Transportation.
4. Time Limitation for Submittal of a Complaint-A complaint may not be brought under this
subsection more than three years after the date on which the alleged reprisal took place.
5. Required Actions of the Inspector General—Actions, limitations and exceptions of the Inspector
General's office are established under 41 U.S.C. §4712(b)
6. Assumption of Rights to Civil Remedy- Upon receipt of an explanation of a decision not to conduct
or continue an investigation by the Office of Inspector General,the person submitting a complaint
assumes the right to a civil remedy under4l U.S.C. §4712(c).
22. 2018 FAA Reauthorization.This grant agreement is subject to the terms and conditions contained herein
including the terms known as the Grant Assurances as they were published in the Federal Register on April
3, 2014. On October 5, 2018,the FAA Reauthorization Act of 2018 made certain amendments to 49 U.S.C.
chapter 471.The Reauthorization Act will require FAA to make certain amendments to the assurances in
order to best achieve consistency with the statute. Federal law requires that FAA publish any amendments
to the assurances in the Federal Register along with an opportunity to comment. In order not to delay the
offer of this grant,the existing assurances are attached herein; however, FAA shall interpret and apply
these assurances consistent with the Reauthorization Act. To the extent there is a conflict between the
assurances and Federal statutes,the statutes shall apply.The full text of the Act is at
https://www.congress.gov/bill/115th-congress/house-bill/302/text.
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SPECIAL CONDITIONS
23. Lighting.The Sponsor must operate and maintain the lighting system during the useful life of the system in
accordance with applicable FAA standards.
24. Pavement Maintenance Management Program.The Sponsor agrees that it will implement an effective
airport pavement maintenance management program as required by Grant Assurance Pavement
Preventive Management.The Sponsor agrees that it will use the program for the useful life of any
pavement constructed, reconstructed, or repaired with federal financial assistance at the airport.The
Sponsor further agrees that the program will:
A. Follow FAA Advisory Circular 150/5380-6, "Guidelines and Procedures for Maintenance of Airport
Pavements,"for specific guidelines and procedures for maintaining airport pavements, establishing an
effective maintenance program, specific types of distress and its probable cause, inspection guidelines,
and recommended methods of repair;
B. Detail the procedures to be followed to assure that proper pavement maintenance, both preventive
and repair, is performed;
C. Include a Pavement Inventory, Inspection Schedule, Record Keeping, Information Retrieval, and
Reference, meeting the following requirements:
1. Pavement Inventory.The following must be depicted in an appropriate form and level of detail:
a. Location of all runways, taxiways, and aprons;
b. Dimensions;
c. Type of pavement; and,
d. Year of construction or most recent major rehabilitation.
2. Inspection Schedule.
a. Detailed Inspection. A detailed inspection must be performed at least once a year. If a history
of recorded pavement deterioration is available, i.e., Pavement Condition Index (PCI) survey as
set forth in the Advisory Circular 150/5380-6,the frequency of inspections may be extended to
three years.
b. Drive-By Inspection.A drive-by inspection must be performed a minimum of once per month
to detect unexpected changes in the pavement condition. For drive-by inspections, the date of
inspection and any maintenance performed must be recorded.
3. Record Keeping. Complete information on the findings of all detailed inspections and on the
maintenance performed must be recorded and kept on file for a minimum of five years.The type
of distress, location, and remedial action, scheduled or performed, must be documented.The
minimum information is:
a. Inspection date;
b. Location;
c. Distress types; and
d. Maintenance scheduled or performed.
4. Information Retrieval System.The Sponsor must be able to retrieve the information and records
produced by the pavement survey to provide a report to the FAA as may be required.
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25. Project which Contain Paving Work in Excess of$500,000.The Sponsor agrees to:
A. Furnish a construction management program to the FAA prior to the start of construction which
details the measures and procedures to be used to comply with the quality control provisions of the
construction contract, including, but not limited to,all quality control provisions and tests required by
the Federal specifications.The program must include as a minimum:
1. The name of the person representing the Sponsor who has overall responsibility for contract
administration for the project and the authority to take necessary actions to comply with the
contract;
2. Names of testing laboratories and consulting engineer firms with quality control responsibilities on
the project,together with a description of the services to be provided;
3. Procedures for determining that the testing laboratories meet the requirements of the American
Society of Testing and Materials standards on laboratory evaluation referenced in the contract
specifications (D 3666, C 1077);
4. Qualifications of engineering supervision and construction inspection personnel;
5. A listing of all tests required by the contract specifications, including the type and frequency of
tests to be taken,the method of sampling, the applicable test standard, and the acceptance
criteria or tolerances permitted for each type of test; and
6. Procedures for ensuring that the tests are taken in accordance with the program, that they are
documented daily, and that the proper corrective actions, where necessary, are undertaken.
B. Submit at completion of the project, a final test and quality assurance report documenting the
summary results of all tests performed; highlighting those tests that indicated failure or that did not
meet the applicable test standard.The report must include the pay reductions applied and the reasons
for accepting any out-of-tolerance material. Submit interim test and quality assurance reports when
requested by the FAA.
C. Failure to provide a complete report as described in paragraph b, or failure to perform such tests,will,
absent any compelling justification; result in a reduction in Federal participation for costs incurred in
connection with construction of the applicable pavement. Such reduction will be at the discretion of
the FAA and will be based on the type or types of required tests not performed or not documented
and will be commensurate with the proportion of applicable pavement with respect to the total
pavement constructed under the grant agreement.
D. The FAA, at its discretion, reserves the right to conduct independent tests and to reduce grant
payments accordingly if such independent tests determine that sponsor test results are inaccurate.
26. Grant Approval Based Upon Certification.The FAA and the Sponsor agree that the FAA approval of this
grant is based on the Sponsor's certification to carry out the project in accordance with policies, standards,
and specifications approved by the FAA.The Sponsor Certifications received from the Sponsor for the work
included in this grant are hereby incorporated into this grant agreement.The Sponsor understands that:
a. The Sponsor's certification does not relieve the Sponsor of the requirement to obtain
prior FAA approval for modifications to any AIP standards or to notify the FAA of any
limitations to competition within the project;
b. The FAA's acceptance of a Sponsor's certification does not limit the FAA from
reviewing appropriate project documentation for the purpose of validating the
certification statements;
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c. If the FAA determines that the Sponsor has not complied with their certification
statements, the FAA will review the associated project costs to determine whether
such costs are allowable under AIP.
The Sponsor's acceptance of this Offer and ratification and adoption of the Project Application
incorporated herein shall be evidenced by execution of this instrument by the Sponsor, as hereinafter
provided, and this Offer and Acceptance shall comprise a Grant Agreement, as provided by the Act,
constituting the contractual obligations and rights of the United States and the Sponsor with respect to the
accomplishment of the Project and compliance with the assurances and conditions as provided herein.
Such Grant Agreement shall become effective upon the Sponsor's acceptance of this Offer.
UNITED STATES OF AMERICA
FEDERAL AVIATION ADMINISTRATION
407
/ "PP
(Signature)
Jason Ritchie
(Typed Name)
Acting Manager, Seattle Airports District
Office
(Title of FAA Official)
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PART II-ACCEPTANCE
The Sponsor does hereby ratify and adopt all assurances, statements, representations, warranties,
covenants, and agreements contained in the Project Application and incorporated materials referred to in
the foregoing Offer, and does hereby accept this Offer and by such acceptance agrees to comply with all of
the terms and conditions in this Offer and in the Project Application.
I declare under penalty of perjury that the foregoing is true and correct.'
Executed this 27th day of Sept. , 2019 .
City of Auburn
(Name of Sponsor)
4,44,6
... `A
(Signatu e of •onsor's Authorized Official)
By: Na . , Backus
(Typed Name of Sponsor's Authorized Official)
Title: Mayor
(Title of Sponsor's Authorized Official
CERTIFICATE OF SPONSOR'S ATTORNEY
I, Steve Gross , acting as Attorney for the Sponsor do hereby certify:
That in my opinion the Sponsor is empowered to enter into the foregoing Grant Agreement under the laws
of the State of WA . Further, I have examined the foregoing Grant Agreement and the actions taken
by said Sponsor and Sponsor's official representative has been duly authorized and that the execution
thereof is in all respects due and proper and in accordance with the laws of the said State and the Act. In
addition,for grants involving projects to be carried out on property not owned by the Sponsor, there are
no legal impediments that will prevent full performance by the Sponsor. Further, it is my opinion that the
said Grant Agreement constitutes a legal and binding obligation of the Sponsor in accordance with the
terms thereof.
Dated at Auburn. WA (location)this 27th day of September , 2019
By:
(Signature ponsor's Attorney)
'Knowingly and willfully providing false information to the Federal government is a violation of 18 U.S.C.
Section 1001 (False Statements) and could subject you to fines, imprisonment, or both.
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ASSURANCES
AIRPORT SPONSORS
A. General.
d. These assurances shall be complied with in the performance of grant agreements for airport
development, airport planning, and noise compatibility program grants for airport sponsors.
e. These assurances are required to be submitted as part of the project application by sponsors
requesting funds under the provisions of Title 49, U.S.C., subtitle VII, as amended. As used herein,
the term "public agency sponsor" means a public agency with control of a public-use airport;the
term "private sponsor" means a private owner of a public-use airport; and the term "sponsor"
includes both public agency sponsors and private sponsors.
f. Upon acceptance of this grant offer by the sponsor, these assurances are incorporated in and
become part of this grant agreement.
B. Duration and Applicability.
1. Airport development or Noise Compatibility Program Projects Undertaken by a Public Agency
Sponsor.
The terms, conditions and assurances of this grant agreement shall remain in full force and effect
throughout the useful life of the facilities developed or equipment acquired for an airport
development or noise compatibility program project, or throughout the useful life of the project
items installed within a facility under a noise compatibility program project, but in any event not
to exceed twenty(20)years from the date of acceptance of a grant offer of Federal funds for the
project. However,there shall be no limit on the duration of the assurances regarding Exclusive
Rights and Airport Revenue so long as the airport is used as an airport.There shall be no limit on
the duration of the terms, conditions, and assurances with respect to real property acquired with
federal funds. Furthermore, the duration of the Civil Rights assurance shall be specified in the
assurances.
2. Airport Development or Noise Compatibility Projects Undertaken by a Private Sponsor.
The preceding paragraph 1 also applies to a private sponsor except that the useful life of project
items installed within a facility or the useful life of the facilities developed or equipment acquired
under an airport development or noise compatibility program project shall be no less than ten (10)
years from the date of acceptance of Federal aid for the project.
3. Airport Planning Undertaken by a Sponsor.
Unless otherwise specified in this grant agreement, only Assurances 1, 2, 3, 5, 6, 13, 18, 25, 30, 32,
33, and 34 in Section C apply to planning projects.The terms, conditions, and assurances of this
grant agreement shall remain in full force and effect during the life of the project; there shall be
no limit on the duration of the assurances regarding Exclusive Rights and Airport Revenue so long
as the airport is used as an airport.
C. Sponsor Certification.
The sponsor hereby assures and certifies, with respect to this grant that:
1. General Federal Requirements.
It will comply with all applicable Federal laws, regulations, executive orders, policies, guidelines,
and requirements as they relate to the application, acceptance and use of Federal funds for this
project including but not limited to the following:
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FEDERAL LEGISLATION
a. Title 49, U.S.C., subtitle VII,as amended.
b. Davis-Bacon Act-40 U.S.C. 276(a), et seq.1
c. Federal Fair Labor Standards Act- 29 U.S.C. 201, et seq.
d. Hatch Act—5 U.S.C. 1501, et seq.2
e. Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 Title 42
U.S.C. 4601, et seq.12
f. National Historic Preservation Act of 1966-Section 106- 16 U.S.C. 470(f).'
g. Archeological and Historic Preservation Act of 1974- 16 U.S.C. 469 through 469c.1
h. Native Americans Grave Repatriation Act- 25 U.S.C. Section 3001, et seq.
i. Clean Air Act, P.L. 90-148, as amended.
j. Coastal Zone Management Act, P.L. 93-205, as amended.
k. Flood Disaster Protection Act of 1973 -Section 102(a)-42 U.S.C. 4012a.1
I. Title 49, U.S.C., Section 303, (formerly known as Section 4(f))
m. Rehabilitation Act of 1973 - 29 U.S.C. 794.
n. Title Vlof the Civil Rights Act of 1964 (42 U.S.C. § 2000d et seq., 78 stat. 252) (prohibits
discrimination on the basis of race, color, national origin);
o. Americans with Disabilities Act of 1990, as amended, (42 U.S.C. § 12101 et seq.), prohibits
discrimination on the basis of disability).
p. Age Discrimination Act of 1975 -42 U.S.C. 6101, et seq.
q. American Indian Religious Freedom Act, P.L. 95-341, as amended.
r. Architectural Barriers Act of 1968-42 U.S.C. 4151, et seq.1
s. Power plant and Industrial Fuel Use Act of 1978-Section 403- 2 U.S.C. 8373.1
t. Contract Work Hours and Safety Standards Act-40 U.S.C. 327, et seq.1
u. Copeland Anti-kickback Act- 18 U.S.C. 874.1
v. National Environmental Policy Act of 1969 -42 U.S.C. 4321, et seq.'
w. Wild and Scenic Rivers Act, P.L. 90-542, as amended.
x. Single Audit Act of 1984-31 U.S.C. 7501, et seq.2
y. Drug-Free Workplace Act of 1988-41 U.S.C. 702 through 706.
z. The Federal Funding Accountability and Transparency Act of 2006, as amended (Pub. L. 109-
282, as amended by section 6202 of Pub. L. 110-252).
EXECUTIVE ORDERS
a. Executive Order 11246 - Equal Employment Opportunity)
b. Executive Order 11990- Protection of Wetlands
c. Executive Order 11998—Flood Plain Management
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d. Executive Order 12372 - Intergovernmental Review of Federal Programs
e. Executive Order 12699-Seismic Safety of Federal and Federally Assisted New Building
Construction)
f. Executive Order 12898 - Environmental Justice
FEDERAL REGULATIONS
a. 2 CFR Part180-OMBGuidelines to Agencies on Governmentwide Debarment and Suspension
(Nonprocurement).
b. 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards. [OMB Circular A-87 Cost Principles Applicable to Grants and
Contracts with State and Local Governments, and OMB Circular A-133 -Audits of States, Local
Governments, and Non-Profit Organizations].4'5'6
c. 2 CFR Part 1200—Nonprocurement Suspension and Debarment
d. 14 CFR Part 13 - Investigative and Enforcement Proceduresl4 CFR Part 16- Rules of Practice
For Federally Assisted Airport Enforcement Proceedings.
e. 14 CFR Part 150-Airport noise compatibility planning.
f. 28 CFR Part 35- Discrimination on the Basis of Disability in State and Local Government
Services.
g. 28 CFR § 50.3 - U.S. Department of Justice Guidelines for Enforcement of Title VI of the Civil
Rights Act of 1964.
h. 29 CFR Part 1 - Procedures for predetermination of wage rates.1
i. 29 CFR Part 3 -Contractors and subcontractors on public building or public work financed in
whole or part by loans or grants from the United States.1
j. 29 CFR Part 5 - Labor standards provisions applicable to contracts covering federally financed
and assisted construction (also labor standards provisions applicable to non-construction
contracts subject to the Contract Work Hours and Safety Standards Act).1
k. 41 CFR Part 60-Office of Federal Contract Compliance Programs, Equal Employment
Opportunity, Department of Labor(Federal and federally assisted contracting requirements).1
I. 49 CFR Part 18- Uniform administrative requirements for grants and cooperative agreements
to state and local governments.'
m. 49 CFR Part 20- New restrictions on lobbying.
n. 49 CFR Part 21—Nondiscrimination in federally-assisted programs of the Department of
Transportation -effectuation of Title VI of the Civil Rights Act of 1964.
o. 49 CFR Part 23 - Participation by Disadvantage Business Enterprise in Airport Concessions.
p. 49 CFR Part 24—Uniform Relocation Assistance and Real Property Acquisition for Federal and
Federally Assisted Programs.12
q. 49 CFR Part 26—Participation by Disadvantaged Business Enterprises in Department of
Transportation Programs.
r. 49 CFR Part 27—Nondiscrimination on the Basis of Handicap in Programs and Activities
Receiving or Benefiting from Federal Financial Assistance.1
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s. 49 CFR Part 28—Enforcement of Nondiscrimination on the Basis of Handicap in Programs or
Activities conducted by the Department of Transportation.
t. 49 CFR Part 30- Denial of public works contracts to suppliers of goods and services of
countries that deny procurement market access to U.S. contractors.
u. 49 CFR Part 32—Governmentwide Requirements for Drug-Free Workplace (Financial
Assistance)
v. 49 CFR Part 37—Transportation Services for Individuals with Disabilities (ADA).
w. 49 CFR Part 41-Seismic safety of Federal and federally assisted or regulated new building
construction.
SPECIFIC ASSURANCES
Specific assurances required to be included in grant agreements by any of the above laws, regulations
or circulars are incorporated by reference in this grant agreement.
FOOTNOTES TO ASSURANCE C.1.
1 These laws do not apply to airport planning sponsors.
2 These laws do not apply to private sponsors.
3 49 CFR Part 18 and 2 CFR Part 200 contain requirements for State and Local Governments
receiving Federal assistance.Any requirement levied upon State and Local Governments by this
regulation and circular shall also be applicable to private sponsors receiving Federal assistance
under Title 49, United States Code.
4 On December 26, 2013 at 78 FR 78590,the Office of Management and Budget(OMB) issued the
Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal
Awards in 2 CFR Part 200. 2 CFR Part 200 replaces and combines the former Uniform
Administrative Requirements for Grants(OMB Circular A-102 and Circular A-110 or 2 CFR Part 215
or Circular) as well as the Cost Principles (Circulars A-21 or 2 CFR part 220; Circular A-87 or 2 CFR
part 225; and A-122, 2 CFR part 230). Additionally it replaces Circular A-133 guidance on the Single
Annual Audit. In accordance with 2 CFR section 200.110,the standards set forth in Part 200 which
affect administration of Federal awards issued by Federal agencies become effective once
implemented by Federal agencies or when any future amendment to this Part becomes final.
Federal agencies, including the Department of Transportation, must implement the policies and
procedures applicable to Federal awards by promulgating a regulation to be effective by
December 26, 2014 unless different provisions are required by statute or approved by OMB.
5 Cost principles established in 2 CFR part 200 subpart E must be used as guidelines for determining
the eligibility of specific types of expenses.
6 Audit requirements established in 2 CFR part 200 subpart F are the guidelines for audits.
2. Responsibility and Authority of the Sponsor.
a. Public Agency Sponsor:
It has legal authority to apply for this grant, and to finance and carry out the proposed project;
that a resolution, motion or similar action has been duly adopted or passed as an official act of
the applicant's governing body authorizing the filing of the application, including all
understandings and assurances contained therein, and directing and authorizing the person
identified as the official representative of the applicant to act in connection with the
application and to provide such additional information as may be required.
b. Private Sponsor:
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It has legal authority to apply for this grant and to finance and carry out the proposed project
and comply with all terms, conditions, and assurances of this grant agreement. It shall
designate an official representative and shall in writing direct and authorize that person to file
this application, including all understandings and assurances contained therein; to act in
connection with this application; and to provide such additional information as may be
required.
3. Sponsor Fund Availability.
It has sufficient funds available for that portion of the project costs which are not to be paid by the
United States. It has sufficient funds available to assure operation and maintenance of items
funded under this grant agreement which it will own or control.
4. Good Title.
a. It, a public agency or the Federal government, holds good title, satisfactory to the Secretary, to
the landing area of the airport or site thereof, or will give assurance satisfactory to the
Secretary that good title will be acquired.
b. For noise compatibility program projects to be carried out on the property of the sponsor, it
holds good title satisfactory to the Secretary to that portion of the property upon which
Federal funds will be expended or will give assurance to the Secretary that good title will be
obtained.
5. Preserving Rights and Powers.
a. It will not take or permit any action which would operate to deprive it of any of the rights and
powers necessary to perform any or all of the terms, conditions, and assurances in this grant
agreement without the written approval of the Secretary, and will act promptly to acquire,
extinguish or modify any outstanding rights or claims of right of others which would interfere
with such performance by the sponsor.This shall be done in a manner acceptable to the
Secretary.
b. It will not sell, lease, encumber, or otherwise transfer or dispose of any part of its title or other
interests in the property shown on Exhibit A to this application or,for a noise compatibility
program project,that portion of the property upon which Federal funds have been expended,
for the duration of the terms, conditions, and assurances in this grant agreement without
approval by the Secretary. If the transferee is found by the Secretary to be eligible under Title
49, United States Code,to assume the obligations of this grant agreement and to have the
power, authority, and financial resources to carry out all such obligations,the sponsor shall
insert in the contract or document transferring or disposing of the sponsor's interest, and
make binding upon the transferee all of the terms, conditions, and assurances contained in
this grant agreement.
c. For all noise compatibility program projects which are to be carried out by another unit of
local government or are on property owned by a unit of local government other than the
sponsor, it will enter into an agreement with that government. Except as otherwise specified
by the Secretary,that agreement shall obligate that government to the same terms,
conditions, and assurances that would be applicable to it if it applied directly to the FAA for a
grant to undertake the noise compatibility program project.That agreement and changes
thereto must be satisfactory to the Secretary. It will take steps to enforce this agreement
against the local government if there is substantial non-compliance with the terms of the
agreement.
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d. For noise compatibility program projects to be carried out on privately owned property, it will
enter into an agreement with the owner of that property which includes provisions specified
by the Secretary. It will take steps to enforce this agreement against the property owner
whenever there is substantial non-compliance with the terms of the agreement.
e. If the sponsor is a private sponsor, it will take steps satisfactory to the Secretary to ensure that
the airport will continue to function as a public-use airport in accordance with these
assurances for the duration of these assurances.
f. If an arrangement is made for management and operation of the airport by any agency or
person other than the sponsor or an employee of the sponsor,the sponsor will reserve
sufficient rights and authority to insure that the airport will be operated and maintained in
accordance Title 49, United States Code,the regulations and the terms, conditions and
assurances in this grant agreement and shall insure that such arrangement also requires
compliance therewith.
g. Sponsors of commercial service airports will not permit or enter into any arrangement that
results in permission for the owner or tenant of a property used as a residence, or zoned for
residential use,to taxi an aircraft between that property and any location on airport. Sponsors
of general aviation airports entering into any arrangement that results in permission for the
owner of residential real property adjacent to or near the airport must comply with the
requirements of Sec. 136 of Public Law 112-95 and the sponsor assurances.
6. Consistency with Local Plans.
The project is reasonably consistent with plans (existing at the time of submission of this
application) of public agencies that are authorized by the State in which the project is located to
plan for the development of the area surrounding the airport.
7. Consideration of Local Interest.
It has given fair consideration to the interest of communities in or near where the project may be
located.
S. Consultation with Users.
In making a decision to undertake any airport development project under Title 49, United States
Code, it has undertaken reasonable consultations with affected parties using the airport at which
project is proposed.
9. Public Hearings.
In projects involving the location of an airport, an airport runway, or a major runway extension, it
has afforded the opportunity for public hearings for the purpose of considering the economic,
social, and environmental effects of the airport or runway location and its consistency with goals
and objectives of such planning as has been carried out by the community and it shall, when
requested by the Secretary, submit a copy of the transcript of such hearings to the Secretary.
Further, for such projects, it has on its management board either voting representation from the
communities where the project is located or has advised the communities that they have the right
to petition the Secretary concerning a proposed project.
10. Metropolitan Planning Organization.
In projects involving the location of an airport, an airport runway, or a major runway extension at
a medium or large hub airport, the sponsor has made available to and has provided upon request
to the metropolitan planning organization in the area in which the airport is located, if any, a copy
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of the proposed amendment to the airport layout plan to depict the project and a copy of any
airport master plan in which the project is described or depicted.
11. Pavement Preventive Maintenance.
With respect to a project approved after January 1, 1995, for the replacement or reconstruction of
pavement at the airport, it assures or certifies that it has implemented an effective airport
pavement maintenance-management program and it assures that it will use such program for the
useful life of any pavement constructed, reconstructed or repaired with Federal financial
assistance at the airport. It will provide such reports on pavement condition and pavement
management programs as the Secretary determines may be useful.
12. Terminal Development Prerequisites.
For projects which include terminal development at a public use airport, as defined in Title 49, it
has, on the date of submittal of the project grant application,all the safety equipment required for
certification of such airport under section 44706 of Title 49, United States Code, and all the
security equipment required by rule or regulation, and has provided for access to the passenger
enplaning and deplaning area of such airport to passengers enplaning and deplaning from aircraft
other than air carrier aircraft.
13. Accounting System,Audit,and Record Keeping Requirements.
a. It shall keep all project accounts and records which fully disclose the amount and disposition
by the recipient of the proceeds of this grant, the total cost of the project in connection with
which this grant is given or used, and the amount or nature of that portion of the cost of the
project supplied by other sources, and such other financial records pertinent to the project.
The accounts and records shall be kept in accordance with an accounting system that will
facilitate an effective audit in accordance with the Single Audit Act of 1984.
b. It shall make available to the Secretary and the Comptroller General of the United States, or
any of their duly authorized representatives,for the purpose of audit and examination, any
books, documents, papers, and records of the recipient that are pertinent to this grant.The
Secretary may require that an appropriate audit be conducted by a recipient. In any case in
which an independent audit is made of the accounts of a sponsor relating to the disposition of
the proceeds of a grant or relating to the project in connection with which this grant was given
or used, it shall file a certified copy of such audit with the Comptroller General of the United
States not later than six(6) months following the close of the fiscal year for which the audit
was made.
14. Minimum Wage Rates.
It shall include, in all contracts in excess of$2,000 for work on any projects funded under this
grant agreement which involve labor, provisions establishing minimum rates of wages, to be
predetermined by the Secretary of Labor, in accordance with the Davis-Bacon Act, as amended (40
U.S.C. 276a-276a-5), which contractors shall pay to skilled and unskilled labor, and such minimum
rates shall be stated in the invitation for bids and shall be included in proposals or bids for the
work.
15. Veteran's Preference.
It shall include in all contracts for work on any project funded under this grant agreement which
involve labor, such provisions as are necessary to insure that, in the employment of labor (except
in executive, administrative, and supervisory positions), preference shall be given to Vietnam era
veterans, Persian Gulf veterans, Afghanistan-Iraq war veterans, disabled veterans, and small
business concerns owned and controlled by disabled veterans as defined in Section 47112 of Title
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49, United States Code. However,this preference shall apply only where the individuals are
available and qualified to perform the work to which the employment relates.
16. Conformity to Plans and Specifications.
It will execute the project subject to plans, specifications, and schedules approved by the
Secretary. Such plans, specifications, and schedules shall be submitted to the Secretary prior to
commencement of site preparation, construction, or other performance under this grant
agreement, and, upon approval of the Secretary, shall be incorporated into this grant agreement.
Any modification to the approved plans, specifications, and schedules shall also be subject to
approval of the Secretary, and incorporated into this grant agreement.
17. Construction Inspection and Approval.
It will provide and maintain competent technical supervision at the construction site throughout
the project to assure that the work conforms to the plans, specifications, and schedules approved
by the Secretary for the project. It shall subject the construction work on any project contained in
an approved project application to inspection and approval by the Secretary and such work shall
be in accordance with regulations and procedures prescribed by the Secretary. Such regulations
and procedures shall require such cost and progress reporting by the sponsor or sponsors of such
project as the Secretary shall deem necessary.
18. Planning Projects.
In carrying out planning projects:
a. It will execute the project in accordance with the approved program narrative contained in the
project application or with the modifications similarly approved.
b. It will furnish the Secretary with such periodic reports as required pertaining to the planning
project and planning work activities.
c. It will include in all published material prepared in connection with the planning project a
notice that the material was prepared under a grant provided by the United States.
d. It will make such material available for examination by the public, and agrees that no material
prepared with funds under this project shall be subject to copyright in the United States or any
other country.
e. It will give the Secretary unrestricted authority to publish, disclose, distribute, and otherwise
use any of the material prepared in connection with this grant.
f. It will grant the Secretary the right to disapprove the sponsor's employment of specific
consultants and their subcontractors to do all or any part of this project as well as the right to
disapprove the proposed scope and cost of professional services.
g. It will grant the Secretary the right to disapprove the use of the sponsor's employees to do all
or any part of the project.
h. It understands and agrees that the Secretary's approval of this project grant or the Secretary's
approval of any planning material developed as part of this grant does not constitute or imply
any assurance or commitment on the part of the Secretary to approve any pending or future
application for a Federal airport grant.
19. Operation and Maintenance.
a. The airport and all facilities which are necessary to serve the aeronautical users of the airport,
other than facilities owned or controlled by the United States, shall be operated at all times in
a safe and serviceable condition and in accordance with the minimum standards as may be
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required or prescribed by applicable Federal, state and local agencies for maintenance and
operation. It will not cause or permit any activity or action thereon which would interfere with
its use for airport purposes. It will suitably operate and maintain the airport and all facilities
thereon or connected therewith, with due regard to climatic and flood conditions.Any
proposal to temporarily close the airport for non-aeronautical purposes must first be
approved by the Secretary. In furtherance of this assurance, the sponsor will have in effect
arrangements for-
1) Operating the airport's aeronautical facilities whenever required;
2) Promptly marking and lighting hazards resulting from airport conditions, including
temporary conditions; and
3) Promptly notifying airmen of any condition affecting aeronautical use of the airport.
Nothing contained herein shall be construed to require that the airport be operated for
aeronautical use during temporary periods when snow,flood or other climatic conditions
interfere with such operation and maintenance. Further, nothing herein shall be
construed as requiring the maintenance, repair, restoration, or replacement of any
structure or facility which is substantially damaged or destroyed due to an act of God or
other condition or circumstance beyond the control of the sponsor.
b. It will suitably operate and maintain noise compatibility program items that it owns or controls
upon which Federal funds have been expended.
20. Hazard Removal and Mitigation.
It will take appropriate action to assure that such terminal airspace as is required to protect
instrument and visual operations to the airport (including established minimum flight altitudes)
will be adequately cleared and protected by removing, lowering, relocating, marking, or lighting or
otherwise mitigating existing airport hazards and by preventing the establishment or creation of
future airport hazards.
21. Compatible Land Use.
It will take appropriate action,to the extent reasonable, including the adoption of zoning laws,to
restrict the use of land adjacent to or in the immediate vicinity of the airport to activities and
purposes compatible with normal airport operations, including landing and takeoff of aircraft. In
addition, if the project is for noise compatibility program implementation, it will not cause or
permit any change in land use,within its jurisdiction,that will reduce its compatibility, with
respect to the airport, of the noise compatibility program measures upon which Federal funds
have been expended.
22. Economic Nondiscrimination.
a. It will make the airport available as an airport for public use on reasonable terms and without
unjust discrimination to all types, kinds and classes of aeronautical activities, including
commercial aeronautical activities offering services to the public at the airport.
b. In any agreement, contract, lease, or other arrangement under which a right or privilege at the
airport is granted to any person, firm, or corporation to conduct or to engage in any
aeronautical activity for furnishing services to the public at the airport,the sponsor will insert
and enforce provisions requiring the contractor to-
1) furnish said services on a reasonable, and not unjustly discriminatory, basis to all users
thereof, and
2) charge reasonable, and not unjustly discriminatory, prices for each unit or service,
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provided that the contractor may be allowed to make reasonable and nondiscriminatory
discounts, rebates, or other similar types of price reductions to volume purchasers.
a.) Each fixed-based operator at the airport shall be subject to the same rates,fees,
rentals, and other charges as are uniformly applicable to all other fixed-based
operators making the same or similar uses of such airport and utilizing the same or
similar facilities.
b.)Each air carrier using such airport shall have the right to service itself or to use any
fixed-based operator that is authorized or permitted by the airport to serve any air
carrier at such airport.
c.) Each air carrier using such airport(whether as a tenant, non-tenant, or subtenant of
another air carrier tenant) shall be subject to such nondiscriminatory and
substantially comparable rules, regulations, conditions, rates, fees, rentals, and other
charges with respect to facilities directly and substantially related to providing air
transportation as are applicable to all such air carriers which make similar use of such
airport and utilize similar facilities, subject to reasonable classifications such as
tenants or non-tenants and signatory carriers and non-signatory carriers.
Classification or status as tenant or signatory shall not be unreasonably withheld by
any airport provided an air carrier assumes obligations substantially similar to those
already imposed on air carriers in such classification or status.
d.)It will not exercise or grant any right or privilege which operates to prevent any
person, firm, or corporation operating aircraft on the airport from performing any
services on its own aircraft with its own employees [including, but not limited to
maintenance, repair, and fueling]that it may choose to perform.
e.)In the event the sponsor itself exercises any of the rights and privileges referred to in
this assurance,the services involved will be provided on the same conditions as
would apply to the furnishing of such services by commercial aeronautical service
providers authorized by the sponsor under these provisions.
f.) The sponsor may establish such reasonable, and not unjustly discriminatory,
conditions to be met by all users of the airport as may be necessary for the safe and
efficient operation of the airport.
g.)The sponsor may prohibit or limit any given type, kind or class of aeronautical use of
the airport if such action is necessary for the safe operation of the airport or
necessary to serve the civil aviation needs of the public.
23. Exclusive Rights.
It will permit no exclusive right for the use of the airport by any person providing, or intending to
provide, aeronautical services to the public. For purposes of this paragraph,the providing of the
services at an airport by a single fixed-based operator shall not be construed as an exclusive right if
both of the following apply:
a. It would be unreasonably costly, burdensome, or impractical for more than one fixed-based
operator to provide such services, and
b. If allowing more than one fixed-based operator to provide such services would require the
reduction of space leased pursuant to an existing agreement between such single fixed-based
operator and such airport. It further agrees that it will not, either directly or indirectly, grant or
permit any person,firm, or corporation,the exclusive right at the airport to conduct any
aeronautical activities, including, but not limited to charter flights, pilot training, aircraft rental
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and sightseeing, aerial photography,crop dusting, aerial advertising and surveying, air carrier
operations, aircraft sales and services, sale of aviation petroleum products whether or not
conducted in conjunction with other aeronautical activity, repair and maintenance of aircraft,
sale of aircraft parts, and any other activities which because of their direct relationship to the
operation of aircraft can be regarded as an aeronautical activity, and that it will terminate any
exclusive right to conduct an aeronautical activity now existing at such an airport before the
grant of any assistance under Title 49, United States Code.
24. Fee and Rental Structure.
It will maintain a fee and rental structure for the facilities and services at the airport which will
make the airport as self-sustaining as possible under the circumstances existing at the particular
airport,taking into account such factors as the volume of traffic and economy of collection. No
part of the Federal share of an airport development, airport planning or noise compatibility project
for which a grant is made under Title 49, United States Code,the Airport and Airway Improvement
Act of 1982,the Federal Airport Act or the Airport and Airway Development Act of 1970 shall be
included in the rate basis in establishing fees, rates, and charges for users of that airport.
25. Airport Revenues.
a. All revenues generated by the airport and any local taxes on aviation fuel established after
December 30, 1987, will be expended by it for the capital or operating costs of the airport; the
local airport system; or other local facilities which are owned or operated by the owner or
operator of the airport and which are directly and substantially related to the actual air
transportation of passengers or property;or for noise mitigation purposes on or off the
airport.The following exceptions apply to this paragraph:
1) If covenants or assurances in debt obligations issued before September 3, 1982, by the
owner or operator of the airport, or provisions enacted before September 3, 1982, in
governing statutes controlling the owner or operator's financing, provide for the use of the
revenues from any of the airport owner or operator's facilities, including the airport,to
support not only the airport but also the airport owner or operator's general debt
obligations or other facilities, then this limitation on the use of all revenues generated by
the airport (and, in the case of a public airport, local taxes on aviation fuel) shall not apply.
2) If the Secretary approves the sale of a privately owned airport to a public sponsor and
provides funding for any portion of the public sponsor's acquisition of land, this limitation
on the use of all revenues generated by the sale shall not apply to certain proceeds from
the sale.This is conditioned on repayment to the Secretary by the private owner of an
amount equal to the remaining unamortized portion (amortized over a 20-year period) of
any airport improvement grant made to the private owner for any purpose other than
land acquisition on or after October 1, 1996, plus an amount equal to the federal share of
the current fair market value of any land acquired with an airport improvement grant
made to that airport on or after October 1, 1996.
3) Certain revenue derived from or generated by mineral extraction, production, lease, or
other means at a general aviation airport (as defined at Section 47102 of title 49 United
States Code), if the FAA determines the airport sponsor meets the requirements set forth
in Sec. 813 of Public Law 112-95.
a.) As part of the annual audit required under the Single Audit Act of 1984,the sponsor will
direct that the audit will review, and the resulting audit report will provide an opinion
concerning,the use of airport revenue and taxes in paragraph (a), and indicating
whether funds paid or transferred to the owner or operator are paid or transferred in a
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manner consistent with Title 49, United States Code and any other applicable provision
of law, including any regulation promulgated by the Secretary or Administrator.
b.)Any civil penalties or other sanctions will be imposed for violation of this assurance in
accordance with the provisions of Section 47107 of Title 49, United States Code.
26. Reports and Inspections.
It will:
a. submit to the Secretary such annual or special financial and operations reports as the
Secretary may reasonably request and make such reports available to the public; make
available to the public at reasonable times and places a report of the airport budget in a
format prescribed by the Secretary;
b. for airport development projects, make the airport and all airport records and documents
affecting the airport, including deeds, leases, operation and use agreements, regulations and
other instruments, available for inspection by any duly authorized agent of the Secretary upon
reasonable request;
c. for noise compatibility program projects, make records and documents relating to the project
and continued compliance with the terms, conditions, and assurances of this grant agreement
including deeds, leases, agreements, regulations, and other instruments, available for
inspection by any duly authorized agent of the Secretary upon reasonable request; and
d. in a format and time prescribed by the Secretary, provide to the Secretary and make available
to the public following each of its fiscal years, an annual report listing in detail:
1) all amounts paid by the airport to any other unit of government and the purposes for
which each such payment was made; and
2) all services and property provided by the airport to other units of government and the
amount of compensation received for provision of each such service and property.
27. Use by Government Aircraft.
It will make available all of the facilities of the airport developed with Federal financial assistance
and all those usable for landing and takeoff of aircraft to the United States for use by Government
aircraft in common with other aircraft at all times without charge, except, if the use by
Government aircraft is substantial, charge may be made for a reasonable share, proportional to
such use, for the cost of operating and maintaining the facilities used. Unless otherwise
determined by the Secretary, or otherwise agreed to by the sponsor and the using agency,
substantial use of an airport by Government aircraft will be considered to exist when operations of
such aircraft are in excess of those which, in the opinion of the Secretary, would unduly interfere
with use of the landing areas by other authorized aircraft,or during any calendar month that—
a. by gross weights of such aircraft) is in excess of five million pounds Five (5) or more
Government aircraft are regularly based at the airport or on land adjacent thereto; or
b. The total number of movements(counting each landing as a movement)of Government
aircraft is 300 or more, or the gross accumulative weight of Government aircraft using the
airport (the total movement of Government aircraft multiplied.
28. Land for Federal Facilities.
It will furnish without cost to the Federal Government for use in connection with any air traffic
control or air navigation activities, or weather-reporting and communication activities related to
air traffic control, any areas of land or water, or estate therein, or rights in buildings of the sponsor
as the Secretary considers necessary or desirable for construction, operation, and maintenance at
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Federal expense of space or facilities for such purposes. Such areas or any portion thereof will be
made available as provided herein within four months after receipt of a written request from the
Secretary.
29. Airport Layout Plan.
a. It will keep up to date at all times an airport layout plan of the airport showing:
1) boundaries of the airport and all proposed additions thereto, together with the
boundaries of all offsite areas owned or controlled by the sponsor for airport purposes
and proposed additions thereto;
2) the location and nature of all existing and proposed airport facilities and structures (such
as runways, taxiways, aprons,terminal buildings, hangars and roads), including all
proposed extensions and reductions of existing airport facilities;
3) the location of all existing and proposed nonaviation areas and of all existing
improvements thereon; and
4) all proposed and existing access points used to taxi aircraft across the airport's property
boundary. Such airport layout plans and each amendment, revision, or modification
thereof, shall be subject to the approval of the Secretary which approval shall be
evidenced by the signature of a duly authorized representative of the Secretary on the
face of the airport layout plan.The sponsor will not make or permit any changes or
alterations in the airport or any of its facilities which are not in conformity with the airport
layout plan as approved by the Secretary and which might, in the opinion of the Secretary,
adversely affect the safety, utility or efficiency of the airport.
a.) If a change or alteration in the airport or the facilities is made which the Secretary
determines adversely affects the safety, utility, or efficiency of any federally owned,
leased, or funded property on or off the airport and which is not in conformity with the
airport layout plan as approved by the Secretary,the owner or operator will, if
requested, by the Secretary (1) eliminate such adverse effect in a manner approved by
the Secretary; or(2) bear all costs of relocating such property (or replacement thereof)
to a site acceptable to the Secretary and all costs of restoring such property(or
replacement thereof)to the level of safety, utility, efficiency, and cost of operation
existing before the unapproved change in the airport or its facilities except in the case
of a relocation or replacement of an existing airport facility due to a change in the
Secretary's design standards beyond the control of the airport sponsor.
30. Civil Rights.
It will promptly take any measures necessary to ensure that no person in the United States shall,
on the grounds of race, creed, color, national origin, sex, age, or disability be excluded from
participation in, be denied the benefits of, or be otherwise subjected to discrimination in any
activity conducted with, or benefiting from,funds received from this grant.
a. Using the definitions of activity,facility and program as found and defined in §§ 21.23 (b) and
21.23 (e)of 49 CFR § 21,the sponsor will facilitate all programs, operate all facilities, or
conduct all programs in compliance with all non-discrimination requirements imposed by, or
pursuant to these assurances.
b. Applicability
1) Programs and Activities. If the sponsor has received a grant (or other federal assistance)
for any of the sponsor's program or activities,these requirements extend to all of the
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sponsor's programs and activities.
2) Facilities. Where it receives a grant or other federal financial assistance to construct,
expand, renovate, remodel, alter or acquire a facility,or part of a facility,the assurance
extends to the entire facility and facilities operated in connection therewith.
3) Real Property. Where the sponsor receives a grant or other Federal financial assistance in
the form of, or for the acquisition of real property or an interest in real property,the
assurance will extend to rights to space on, over, or under such property.
c. Duration.
The sponsor agrees that it is obligated to this assurance for the period during which Federal
financial assistance is extended to the program, except where the Federal financial assistance
is to provide, or is in the form of, personal property, or real property, or interest therein, or
structures or improvements thereon, in which case the assurance obligates the sponsor, or
any transferee for the longer of the following periods:
1) So long as the airport is used as an airport,or for another purpose involving the provision
of similar services or benefits; or
2) So long as the sponsor retains ownership or possession of the property.
d. Required Solicitation Language. It will include the following notification in all solicitations for
bids, Requests For Proposals for work, or material under this grant agreement and in all
proposals for agreements, including airport concessions, regardless of funding source:
"The(Name of Sponsor), in accordance with the provisions of Title VI of the Civil Rights Act of
1964(78 Stat. 252,42 U.S.C. §§ 2000d to 2000d-4) and the Regulations, hereby notifies all
bidders that it will affirmatively ensure that any contract entered into pursuant to this
advertisement, disadvantaged business enterprises and airport concession disadvantaged
business enterprises will be afforded full and fair opportunity to submit bids in response to
this invitation and will not be discriminated against on the grounds of race, color, or national
origin in consideration for an award."
e. Required Contract Provisions.
1) It will insert the non-discrimination contract clauses requiring compliance with the acts
and regulations relative to non-discrimination in Federally-assisted programs of the DOT,
and incorporating the acts and regulations into the contracts by reference in every
contract or agreement subject to the non-discrimination in Federally-assisted programs of
the DOT acts and regulations.
2) It will include a list of the pertinent non-discrimination authorities in every contract that is
subject to the non-discrimination acts and regulations.
3) It will insert non-discrimination contract clauses as a covenant running with the land, in
any deed from the United States effecting or recording a transfer of real property,
structures, use, or improvements thereon or interest therein to a sponsor.
4) It will insert non-discrimination contract clauses prohibiting discrimination on the basis of
race, color, national origin, creed, sex, age, or handicap as a covenant running with the
land, in any future deeds, leases, license, permits, or similar instruments entered into by
the sponsor with other parties:
a.) For the subsequent transfer of real property acquired or improved under the applicable
activity, project, or program; and
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b.)For the construction or use of, or access to, space on, over, or under real property
acquired or improved under the applicable activity, project, or program.
f. It will provide for such methods of administration for the program as are found by the
Secretary to give reasonable guarantee that it, other recipients, sub-recipients, sub-grantees,
contractors, subcontractors, consultants,transferees, successors in interest, and other
participants of Federal financial assistance under such program will comply with all
requirements imposed or pursuant to the acts,the regulations, and this assurance.
g. It agrees that the United States has a right to seek judicial enforcement with regard to any
matter arising under the acts,the regulations, and this assurance.
31. Disposal of Land.
a. For land purchased under a grant for airport noise compatibility purposes, including land
serving as a noise buffer, it will dispose of the land, when the land is no longer needed for such
purposes, at fair market value, at the earliest practicable time. That portion of the proceeds of
such disposition which is proportionate to the United States' share of acquisition of such land
will be, at the discretion of the Secretary, (1) reinvested in another project at the airport, or(2)
transferred to another eligible airport as prescribed by the Secretary.The Secretary shall give
preference to the following, in descending order, (1) reinvestment in an approved noise
compatibility project, (2) reinvestment in an approved project that is eligible for grant funding
under Section 47117(e) of title 49 United States Code, (3) reinvestment in an approved airport
development project that is eligible for grant funding under Sections 47114,47115, or 47117
of title 49 United States Code, (4)transferred to an eligible sponsor of another public airport
to be reinvested in an approved noise compatibility project at that airport, and (5) paid to the
Secretary for deposit in the Airport and Airway Trust Fund. If land acquired under a grant for
noise compatibility purposes is leased at fair market value and consistent with noise buffering
purposes,the lease will not be considered a disposal of the land. Revenues derived from such
a lease may be used for an approved airport development project that would otherwise be
eligible for grant funding or any permitted use of airport revenue.
b. For land purchased under a grant for airport development purposes (other than noise
compatibility), it will, when the land is no longer needed for airport purposes, dispose of such
land at fair market value or make available to the Secretary an amount equal to the United
States' proportionate share of the fair market value of the land. That portion of the proceeds
of such disposition which is proportionate to the United States' share of the cost of acquisition
of such land will, (1) upon application to the Secretary, be reinvested or transferred to another
eligible airport as prescribed by the Secretary.The Secretary shall give preference to the
following, in descending order: (1) reinvestment in an approved noise compatibility project, (2)
reinvestment in an approved project that is eligible for grant funding under Section 47117(e)
of title 49 United States Code, (3) reinvestment in an approved airport development project
that is eligible for grant funding under Sections 47114, 47115, or 47117 of title 49 United
States Code, (4) transferred to an eligible sponsor of another public airport to be reinvested in
an approved noise compatibility project at that airport, and (5) paid to the Secretary for
deposit in the Airport and Airway Trust Fund.
c. Land shall be considered to be needed for airport purposes under this assurance if(1) it may
be needed for aeronautical purposes(including runway protection zones) or serve as noise
buffer land, and (2)the revenue from interim uses of such land contributes to the financial
self-sufficiency of the airport. Further, land purchased with a grant received by an airport
operator or owner before December 31, 1987, will be considered to be needed for airport
purposes if the Secretary or Federal agency making such grant before December 31, 1987, was
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notified by the operator or owner of the uses of such land, did not object to such use, and the
land continues to be used for that purpose, such use having commenced no later than
December 15, 1989.
d. Disposition of such land under(a) (b) or(c) will be subject to the retention or reservation of
any interest or right therein necessary to ensure that such land will only be used for purposes
which are compatible with noise levels associated with operation of the airport.
32. Engineering and Design Services.
It will award each contract, or sub-contract for program management, construction management,
planning studies,feasibility studies, architectural services, preliminary engineering, design,
engineering, surveying, mapping or related services with respect to the project in the same
manner as a contract for architectural and engineering services is negotiated under Title IX of the
Federal Property and Administrative Services Act of 1949 or an equivalent qualifications-based
requirement prescribed for or by the sponsor of the airport.
33. Foreign Market Restrictions.
It will not allow funds provided under this grant to be used to fund any project which uses any
product or service of a foreign country during the period in which such foreign country is listed by
the United States Trade Representative as denying fair and equitable market opportunities for
products and suppliers of the United States in procurement and construction.
34. Policies, Standards,and Specifications.
It will carry out the project in accordance with policies, standards, and specifications approved by
the Secretary including, but not limited to, the advisory circulars listed in the Current FAA Advisory
Circulars for AIP projects, dated January 24, 2017 and included in this grant, and in accordance
with applicable state policies, standards, and specifications approved by the Secretary.
35. Relocation and Real Property Acquisition.
a. It will be guided in acquiring real property, to the greatest extent practicable under State law,
by the land acquisition policies in Subpart B of 49 CFR Part 24 and will pay or reimburse
property owners for necessary expenses as specified in Subpart B.
b. It will provide a relocation assistance program offering the services described in Subpart C and
fair and reasonable relocation payments and assistance to displaced persons as required in
Subpart D and E of 49 CFR Part 24.
c. It will make available within a reasonable period of time prior to displacement, comparable
replacement dwellings to displaced persons in accordance with Subpart E of 49 CFR Part 24.
36. Access By Intercity Buses.
The airport owner or operator will permit,to the maximum extent practicable, intercity buses or
other modes of transportation to have access to the airport; however, it has no obligation to fund
special facilities for intercity buses or for other modes of transportation.
37. Disadvantaged Business Enterprises.
The sponsor shall not discriminate on the basis of race, color, national origin or sex in the award
and performance of any DOT-assisted contract covered by 49 CFR Part 26, or in the award and
performance of any concession activity contract covered by 49 CFR Part 23. In addition, the
sponsor shall not discriminate on the basis of race, color, national origin or sex in the
administration of its DBE and ACDBE programs or the requirements of 49 CFR Parts 23 and 26.The
sponsor shall take all necessary and reasonable steps under 49 CFR Parts 23 and 26 to ensure
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nondiscrimination in the award and administration of DOT-assisted contracts, and/or concession
contracts.The sponsor's DBE and ACDBE programs, as required by 49 CFR Parts 26 and 23, and as
approved by DOT, are incorporated by reference in this agreement. Implementation of these
programs is a legal obligation and failure to carry out its terms shall be treated as a violation of this
agreement. Upon notification to the sponsor of its failure to carry out its approved program, the
Department may impose sanctions as provided for under Parts 26 and 23 and may, in appropriate
cases, refer the matter for enforcement under 18 U.S.C. 1001 and/or the Program Fraud Civil
Remedies Act of 1936 (31 U.S.C. 3801).
38. Hangar Construction.
If the airport owner or operator and a person who owns an aircraft agree that a hangar is to be
constructed at the airport for the aircraft at the aircraft owner's expense,the airport owner or
operator will grant to the aircraft owner for the hangar a long term lease that is subject to such
terms and conditions on the hangar as the airport owner or operator may impose.
39. Competitive Access.
a. If the airport owner or operator of a medium or large hub airport (as defined in section 47102
of title 49, U.S.C.) has been unable to accommodate one or more requests by an air carrier for
access to gates or other facilities at that airport in order to allow the air carrier to provide
service to the airport or to expand service at the airport,the airport owner or operator shall
transmit a report to the Secretary that-
1) Describes the requests;
2) Provides an explanation as to why the requests could not be accommodated; and
3) Provides a time frame within which, if any,the airport will be able to accommodate the
requests.
b. Such report shall be due on either February 1 or August 1 of each year if the airport has been
unable to accommodate the request(s) in the six month period prior to the applicable due
date.
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4,c �r
(90fAtt'oi FAA
voi► 1 Airports
,�srR��
Current FAA Advisory Circulars Required for Use in AIP Funded
and PFC Approved Projects
Updated:4/18/2019
View the most current versions of these ACs and any associated changes at:
http://www.faa.gov/airports/resources/advisory circularsand
http://www.faa.gov/regulations policies/advisory circulars/
NUMBER TITLE
70/7460-1L
Change 2 Obstruction Marking and Lighting
150/5000-9A Announcement of Availability Report No. DOT/FAA/PP/92-5, Guidelines for the
Sound Insulation of Residences Exposed to Aircraft Operations
150/5000-17 Critical Aircraft and Regular Use Determination
150/5020-1 Noise Control and Compatibility Planning for Airports
150/5070-6B
Changes 1 2 Airport Master Plans
150/5070-7
Change 1 The Airport System Planning Process
150/5100-13B Development of State Standards for Nonprimary Airports
150/5200-28F Notices to Airmen (NOTAMS)for Airport Operators
150/5200-30D
Change 1 Airport Field Condition Assessments and Winter Operations Safety
150/5200-31C
Changes 1-2 Airport Emergency Plan
150/5210-5D Painting, Marking, and Lighting of Vehicles Used on an Airport
150/5210-7D Aircraft Rescue and Fire Fighting Communications
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FAA Advisory Circular Required for Use AIP Funded and PFC Approved Projects Updated:4/18/2019
3 - 53 - 0003 - 025 - 2019
NUMBER TITLE
150/5210-13C Airport Water Rescue Plans and Equipment
150/5210-14B Aircraft Rescue Fire Fighting Equipment,Tools and Clothing
150/5210-15A Aircraft Rescue and Firefighting Station Building Design
150/5210-18A Systems for Interactive Training of Airport Personnel
150/5210-19A Driver's Enhanced Vision System (DEVS)
150/5220-10E Guide Specification for Aircraft Rescue and Fire Fighting (ARFF) Vehicles
150/5220-16E Automated Weather Observing Systems (AWOS)for Non-Federal Applications
Changes
150/5220-17B Aircraft Rescue and Fire Fighting(ARFF)Training Facilities
150/5220-18A Buildings for Storage and Maintenance of Airport Snow and Ice Control
Equipment and Materials
150/5220-20A Airport Snow and Ice Control Equipment
150/5220-21C Aircraft Boarding Equipment
150/5220-22B Engineered Materials Arresting Systems (EMAS) for Aircraft Overruns
150/5220-23 Frangible Connections
150/5220-24 Foreign Object Debris Detection Equipment
150/5220-25
pard Airport Avian Radar Systems
150/5220-26 Airport Ground Vehicle Automatic Dependent Surveillance - Broadcast (ADS-B)
Changes 1-2 Out Squitter Equipment
150/5300-13A
Change 1 Airport Design
150/5300-14C Design of Aircraft Deicing Facilities
150/5300-16A General Guidance and Specifications for Aeronautical Surveys: Establishment of
Geodetic Control and Submission to the National Geodetic Survey
150/5300-17C
Change 1 Standards for Using Remote Sensing Technologies in Airport Surveys
150/5300-18B General Guidance and Specifications for Submission of Aeronautical Surveys to
Change 1 NGS: Field Data Collection and Geographic Information System (GIS) Standards
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FAA Advisory Circular Required for Use AIP Funded and PFC Approved Projects Updated:4/18/2019
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NUMBER TITLE
150/5320-5D Airport Drainage Design
150/5320-6F Airport Pavement Design and Evaluation
150/5320-12C Measurement, Construction, and Maintenance of Skid Resistant Airport
Changes 1-8 Pavement Surfaces
150/5320-15A Management of Airport Industrial Waste
150/5235-4B Runway Length Requirements for Airport Design
150/5335-SC Standardized Method of Reporting Airport Pavement Strength -PCN
150/5340-1L Standards for Airport Markings
150/5340-SD Segmented Circle Airport Marker System
150/5340-18F Standards for Airport Sign Systems
150/5340-26C Maintenance of Airport Visual Aid Facilities
150/5340-30J Design and Installation Details for Airport Visual Aids
150/5345-3G Specification for L-821, Panels for the Control of Airport Lighting
150/5345-5B Circuit Selector Switch
150/5345-7F Specification for L-824 Underground Electrical Cable for Airport Lighting Circuits
150/5345-10H Specification for Constant Current Regulators and Regulator Monitors
150/5345-12F Specification for Airport and Heliport Beacons
150/5345-13B Specification for L-841 Auxiliary Relay Cabinet Assembly for Pilot Control of
Airport Lighting Circuits
150/5345-26D FAA Specification For L-823 Plug and Receptacle, Cable Connectors
150/5345-27E Specification for Wind Cone Assemblies
150/5345-28G Precision Approach Path Indicator(PAPI) Systems
150/5345-39D Specification for L-853, Runway and Taxiway Retro reflective Markers
150/5345-42H Specification for Airport Light Bases,Transformer Housings,Junction Boxes, and
Accessories
150/5345-43H Specification for Obstruction Lighting Equipment
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FAA Advisory Circular Required for Use AIP Funded and PFC Approved Projects Updated:4/18/2019
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NUMBER TITLE
150/5345-44K Specification for Runway and Taxiway Signs
150/5345-45C Low-Impact Resistant (LIR) Structures
150/5345-46E Specification for Runway and Taxiway Light Fixtures
150/5345-47C Specification for Series to Series Isolation Transformers for Airport Lighting
Systems
150/5345-49D Specification L-854, Radio Control Equipment
150/5345-50B Specification for Portable Runway and Taxiway Lights
150/5345-51B Specification for Discharge-Type Flashing Light Equipment
150/5345-52A Generic Visual Glideslope Indicators(GVGI)
150/5345-53D Airport Lighting Equipment Certification Program
150/5345-54B Specification for L-884, Power and Control Unit for Land and Hold Short Lighting
Systems
150/5345-55A Specification for L-893, Lighted Visual Aid to Indicate Temporary Runway
Closure
150/5345-56B Specification for L-890 Airport Lighting Control and Monitoring System (ALCMS)
150/5360-12F Airport Signing and Graphics
150/5360-13A Airport Terminal Planning
150/5360-14A Access to Airports By Individuals With Disabilities
150/5370-2G Operational Safety on Airports During Construction
150/5370-10H Standards for Specifying Construction of Airports
150/5370-11B Use of Nondestructive Testing in the Evaluation of Airport Pavements
150/5370-13A Off-Peak Construction of Airport Pavements Using Hot-Mix Asphalt
150/5370-15B Airside Applications for Artificial Turf
150/5370-16 Rapid Construction of Rigid (Portland Cement Concrete)Airfield Pavements
150/5370-17 Airside Use of Heated Pavement Systems
150/5390-2C Heliport Design
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FAA Advisory Circular Required for Use AIP Funded and PFC Approved Projects Updated:4/18/2019
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NUMBER TITLE
150/5395-1A Seaplane Bases
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FAA Advisory Circular Required for Use AIP Funded and PFC Approved Projects Updated:4/18/2019
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THE FOLLOWING ADDITIONAL APPLY TO AIP PROJECTS ONLY
Updated: 3/22/2019
NUMBER TITLE
150/5100-14E Architectural, Engineering, and Planning Consultant Services for Airport Grant
Change 1 Projects
150/5100-17 Land Acquisition and Relocation Assistance for Airport Improvement Program
Changes 1 -7 Assisted Projects
150/5300-15A Use of Value Engineering for Engineering Design of Airport Grant Projects
150/5320-17A Airfield Pavement Surface Evaluation and Rating Manuals
150/5370-12B Quality Management for Federally Funded Airport Construction Projects
150/5380-6C Guidelines and Procedures for Maintenance of Airport Pavements
150/5380-7B Airport Pavement Management Program
150/5380-9 Guidelines and Procedures for Measuring Airfield Pavement Roughness
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FAA Advisory Circular Required for Use AIP Funded and PFC Approved Projects Updated:4/18/2019
Washington State Department of Transportation, Aviation Division grant funds are not
awarded.
Section 2. Section 2 of Resolution 5439 is amended to read as follows:
Section 2. The Mayor is authorized to apply for the Federal Aviation Administration grant
in an amount up to Three Million One Hundred Thousand Dollars ($3,100,000.00), to
accept this grant if awarded, and to enter into contracts to expend the grant funds, The
Mayor is authorized to implement administrative procedures necessary to carry out the
directives of this legislation.
Section 3. This Resolution will take effect and be in full force on passage and
signatures.
Dated and Signed this 5th day of August, 2019.
CITY OF AUBURN
e:CY B S, MAYO
ATTEST: APPR• ; D 0 FORM:
l'41*
Shawn Campbell, MMC, City Clerk Steven L. Gross, City Attorney
Resolution No. 5449
August 5, 2019
Page 2 of 2 Rev.2018