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HomeMy WebLinkAbout2009 CAFR Final DocumentCITY OF AUBURN WASHINGTON COMPREHENSIVE ANNUAL FINANCIAL REPORT Fiscal Year January 1, 2009 through December 31, 2009 WASHINGTON Prepared by Finance Department Shelley Coleman, Finance Director CITY OF -T- * MORE THAN YOU IMAGINED CITY OF AUBURN: 2009 CAFR TABLE OF CONTENTS COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended December 31. 2009 TABLE OF CONTENTS INTRODUCTORY SECTION Page Title Page Table of Contents i City Officials ...................................1 Organizational Chart (City and Council Committees) ...................................2 Letter of Transmittal ...................................3 Certificate of Achievement ..11 II. FINANCIAL SECTION Auditor's Report . .13 Management's Discussion and Analysis .........15 Basic Financial Statements Government-wide Financial Statements: Statement of Net Assets .........35 Statement of Activities 36 Fund Financial Statements: Balance Sheet - Governmental Funds .........39 Statement of Revenues, Expenses and Changes in Fund Balance - Governmental Funds .........40 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Government Funds to the Statement of Activities .........41 Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual: General Fund .........42 Arterial Street Fund .........43 Statement of Net Assets - Proprietary Funds 46 Statement of Revenues, Expenses, and Changes in Fund Net Assets - Proprietary Funds .........47 Statement of Cash Flows - Proprietary Funds .........48 Statement of Fiduciary Net Assets - Fiduciary Funds 52 Statement of Changes in Fiduciary Net Assets - Fiduciary Funds 53 Notes to the Financial Statements .........55 Combining and Individual Fund Financial Statements and Schedules: Combining Balance Sheet - Non-Major Government Funds .........98 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Non-Major Government Funds .........99 Combining Balance Sheet - Non-Major Special Revenue Funds ........102 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Non-Major Special Revenue Funds ........104 Schedules of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual: Local Street Special Revenue Fund ........106 Hotel/Motel Tax Special Revenue Fund....._ ........107 CITY OF AUBURN: 2009 CAFR TABLE OF CONTENTS Schedules of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual: (continued) Page Arterial Street Preservation Special Revenue Fund ..108 Drug Forfeiture Special Revenue Fund ..109 Local Law Enforcement Grant Special Revenue Fund ..110 Housing & Community Development Special Revenue Fund ..111 Recreation Trails Special Revenue Fund ..112 Business Improvement Area Special Revenue Fund ..113 Cumulative Reserve Special Revenue Fund ..114 Mitigation Special Revenue Fund....., 115 Combining Balance Sheet - Non-Major Debt Service Funds ..118 Combining Statement of Revenues, Expenditures, and Changes in Fund Balance - Non-Major Debt Service Funds, , 119 Balance Sheet - Non-Major Capital Project Fund ..122 Statement of Revenues, Expenditures, and Changes in Fund Balances - Non-Major Capital Project Fund ..123 Balance Sheet - Permanent Fund ..126 Statement of Revenues, Expenditures and Changes in Fund Balance - Permanent Fund ..127 Combining Statement of Net Assets - Non-Major Enterprise Funds ..130 Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets - Non-Major Enterprise Funds ..131 Combining Statement of Cash Flows - Non-Major Enterprise Funds ..132 Combining Statements of Net Assets - Internal Service Funds ..136 Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets - Internal Service Funds ..137 Combining Statement of Cash Flows - Internal Service Funds ..138 Statement of Changes in Assets and Liabilities - Agency Fund ..142 III. STATISTICAL SECTION Schedule Net Assets by Component ............1 ..144 Changes in Net Assets ............2 ..145 Fund Balances, Government Funds ............3 ..146 Changes in Fund Balances, Government Funds ............4 ..147 Tax Revenues by Source, Government Funds ............5 ..148 Assessed Value by Type ............6 ..149 Property Tax Data ............7 ..150 Property Tax Levies and Collections ............8 ..152 Principal Taxpayers - Property Taxes ............9 ..153 Retail Tax Collections by Sector ..........10 ..154 Ratios of Outstanding Debt by Type ..........11 ..155 Computation of Legal Debt Margin ..........12 ..156 Legal Debt Margin Ratios ..........13.......... ..156 Computation of Net Direct and Estimated Overlapping Debt ..........14 ..157 Ratio of Net General Bonded Debt to Assessed Value ..........15 ..158 Pledged Revenue Bond Coverages ..........16.......... ..159 Population, Income and Housing Trends ..........17 ..160 Major Employers ..........18.......... ..161 Staffing Levels by Department ..........19 ..162 Operating Indicators by Department ..........20 163 Capital Asset Indicators by Department ..........21 ..164 11 CITY COUNCIL Nancy Backus John Partridge Virginia Haugen Bill Peloza Sue Singer DEPARTMENT DIRECTORS Finance Director Shelley Coleman City Attorney Dan Heid Human Resources Director Brenda Heineman Information Services Director Lorrie Rempher Parks Director Daryl Faber Interim Planning Director Kevin Snyder Police Chief Jim Kelly Public Works Director Dennis Dowdy CITY OFFICIALS MAYOR Pete Lewis Lynn Norman Rich Wagner Citizens Judge Patrick Burns Mayor Pete Lewis City Council Director of Human tesources & Risk/Propert Management Brenda Heineman Police Chief Jim Kelley Pudic Works Director Dennis Dowdy Parks/Art and Recreation Director Daryl Faber Finance Committee Nancy Backus, Chairperson Lynn Norman, Vice Chair John Partridge Planning & Community Development Comer lttee Lynn Norman, Chairperson Nancy Backus, Vice Chair Rich Wagner City Attorney Dan Held Director of Information Services Lorrie Rempher Interim Planning Director Kevin Snyder Finance Director Shelley Coleman Municipal Services Committee Bill Peloza, Chairperson Sue Singer, Vice Chair John Partridge Public Works Comn*tee Rich Wagner, Chairperson Sue Singer, Vice Chair Bill Peloza 2 CITY OF ADBURN WASHINGTON June 21, 2010 Peter B. Lewis, Mayor 25 west Moin Street * Auburn WA 98(101-4498 * wwwr,Ci.4uburn,w0_uS * 253-931-3040 Honorable Peter Lewis, Mayor Members of the Auburn City Council Citizens of the City of Auburn 25 W Main Street Auburn, WA 98001 We are pleased to present the City's Comprehensive Annual Financial Report for the year ended December 31, 2009. We publish this financial statement in conformity with generally accepted accounting principles (GAAP). It has been audited in accordance with generally accepted auditing standards by the Washington State Auditor's Office. Therefore, we issue and transmit to you the City of Auburn's Comprehensive Annual Financial Report (CAFR) for the fiscal year ended December 31, 2009. This transmittal letter provides an overview of the report and the financial condition of the City. It also provides insight into the history of the City and the economic conditions affecting it, and describes the systems and controls employed by the Finance department. The Comprehensive Annual Financial Report has several significant uses. First, it provides a general overview of the City's finances to the general public and taxpayers. Second, it is referenced by bond buyers and rating agencies to evaluate the City's fiscal stability and creditworthiness. Finally, the CAFR is a series of financial statements that have been audited by the State Auditor's Office and provides assurances that assets are safeguarded and funds are expended as they were legally appropriated in the biennial budget. INTRODUCTION A. MANAGEMENT REPRESENTATION The Auburn Finance Department prepared the report and accepts complete responsibility for the accuracy, completeness, and fairness of presentation of the information included. The data is believed to be accurate in all material respects, and it is believed that all significant information necessary for an understanding of the affairs and financial condition of the City has been disclosed. The report has been prepared in conformance with generally accepted accounting principals and in conformance with financial reporting standards issued by the Governmental Accounting Standards Board (GASB). City management has developed and evaluated a comprehensive internal control structure that is designed to protect the City's assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the City's financial statements in conformity with generally accepted accounting principles. Because the cost of internal controls should not outweigh the benefits, the City's internal control structure is designed to provide reasonable, rather than absolute, assurance that the financial statements will be free from material misstatement. As management, we attest that, to the best of our knowledge and belief, this financial report is complete and reliable in all material aspects. 3 AUBURN * MORE THAN YOU IMAGINED CITY OF AUBURN: 2009 CAFR LETTER OF TRANSMITTAL As a recipient of federal, state and county financial assistance the City is required to undergo an annual single audit in conformity with U.S. Office of Management and Budget Circular A-133, Audits of State and Local Governments. The audit is conducted by the State Auditor's Office in conjunction with the City's annual independent audit. The results of the City's annual single audit for the fiscal year ended December 31, 2009 provided no instances of material weakness in the internal control structure or significant violations of applicable laws. GAAP requires that management provide a narrative introduction, overview and analysis to accompany the basic financial statements in the form of Management's Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. Auburn's MD&A can be found immediately following the independent auditor's report. B. ORGANIZATION OF THE REPORT The report is divided into three sections: the Introductory Section, the Financial Section, and the Statistical Section. The Introductory Section contains the table of contents, a list of the City's principal officials, an organizational chart, this letter of transmittal, and the Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officers' Association of the United States and Canada for the 2008 CAFR. The Financial Section contains the Washington State Auditor's Report, completed by the Washington State Auditor, Management's Discussion and Analysis, Government-Wide Financial Statements, the Fund Financial Statements, Notes to the Financial Statements and Other Required Combining and Supplemental Information. The Statistical Section, which is unaudited, contains a range of statistical tables and charts that present various financial, economic, social, and demographic data about the City. This information depicts various trends that have affected the fiscal condition of the City over the last ten years. The data presented in this section complies with the requirements of GASB Statement No. 44, Economic Condition Reporting: The Statistical Section. C. REPORTING ENTITY The City of Auburn was incorporated in 1891 and currently operates as a non-charter Code City under the laws of the State of Washington. Code City status in Washington provides "home rule" authority to cities. Auburn has a Mayor/Council form of government, the Mayor is elected and is the full-time Chief Administrator. The seven-member City Council is elected at large, rather than by district. Members of the City Council are responsible for establishing the general direction and policies for the City and for providing the resources necessary to carry out those policies. As the City's chief administrator, the Mayor is responsible for carrying out the policy and direction set by the City Council. This includes the enforcement of laws and ordinances, the execution of contracts and agreements, and maintenance of peace and order in the city. The City is located primarily in southern King County (county seat, Seattle) and a small northeastern portion of Pierce County. These are the two most populous counties in the State of Washington, comprising over 40% of the population. The City is strategically located in relation to the labor and consumer markets of the two largest cities in the area: Seattle in King County and Tacoma in Pierce County. Auburn currently serves approximately 67,500 people within its incorporated limits. The City provides a wide range of services, both beneficial and necessary, to its residents as well as to the adjacent area. These services include police protection; parks and recreational facilities that include a senior center, golf course and museum; land use management and development regulation; infrastructure construction and maintenance; water, sanitary sewage collection, storm drainage, and solid waste services; a general aviation airport; and a municipal 4 CITY OF AUBURN: 2009 CAFR LETTER OF TRANSMITTAL cemetery. The City also has a municipal court and jail facilities that provide services to other governmental agencies through interlocal agreements. II. ECONOMIC CONDITION A. SUMMARY OF LOCAL ECONOMY Auburn began as a small rural community based on agriculture and the railroad, which maintained a significant switching and repair facility. The City has grown significantly since World War ll, both as a residential community and as a commercial and industrial area. Auburn has become a significant area for automobile sales and has also developed a substantial manufacturing and distribution base with the largest employer being The Boeing Co., which employs over 5,000 people in its Auburn facility. Boeing is a worldwide supplier of aircraft and related products. The City's assessed valuation in 2009, for 2010 property tax collection, was $7,702,255,337. Auburn has enjoyed steady residential and industrial growth over the years as development has moved outward from the major cities. The City currently has a growing array of manufacturing facilities, as well as distribution, wholesaling, and retailing operations. Auburn Regional Medical Center, located in Auburn, serves the local geographic area and is a major trauma center of the northwest. The medical center has expanded to include an oncology center and also has constructed a new parking garage. Auburn also has a significant retailing base, and in addition to maintaining its downtown core businesses, has attracted significant retailers who have constructed major new facilities in Auburn in recent years. The SuperMall of the Great Northwest has increased the retail base as the area surrounding the SuperMall continues to develop as well as the 277th Street business corridor. In addition, in the past 10 years Auburn has seen the development of a new YMCA, a new Justice Center, downtown revitalization, Emerald Downs, Muckleshoot Casino, White River Museum, White River Amphitheater, Washington National Golf Course, the commuter rail station, the new Safeway distribution center, and the newly finished Auburn Golf Course Clubhouse. Auburn has also been a center for automobile sales for a number of years, drawing customers throughout the Puget Sound region. Since 2000 the City's total assessed property valuation has more than doubled from $3.0 billion to over $7.7 billion. The sales tax receipts went from $13.4 million to $14.7 million in the same time period. The recent economic downturn compiled with the impact of the Streamlined Sales Tax (SST) legislation enacted by the State of Washington that went into effect July 1, 2008; has dropped sales tax revenues from their high in 2007 of $17.5 million to $11.7 million in 2009. The SST eliminates approximately $200,000 a month of sales tax revenue to the City. The State of Washington has a mitigation plan for cities that are severely impacted by the SST and the City of Auburn received approximately $2.0 million in mitigation payments in 2009, however, there is no certainty that the mitigation payments will continue. The City has suffered in the recession and has not been insulated from the same effects being felt at the State and National levels. The economic climate suddenly changed mid year 2008 and has steadily declined through 2009. Sales Tax revenue which constitutes approximately forty percent of the General Fund budget appears to have leveled off and `reset'. Real Estate Excise Tax revenue decreased 30% from approximately $2.2 million in 2008 to $1.5 million in 2009. The current Real Estate Excise Tax revenue forecast is expected to be less than half of past years receipts. The City has reduced staff and corresponding budgets to align the budgets and live within its means. 5 CITY OF AUBURN: 2009 CAFR LETTER OF TRANSMITTAL There is a more positive note regarding City projects that are in the early development and planning stages including the creation of the Auburn Environmental Park and a recently constructed bird viewing tower in the park. The City has also acquired property in the downtown area and entered into development contracts with a clear goal to revitalize the downtown area. The State Legislature identified the Auburn downtown redevelopment area as a demonstration area and the City is the planned recipient of an annual revenue stream from the State that will provide $6.3 million of infrastructure improvements in the downtown area. This revitalization trend is positive for the aging downtown core and is designed to integrate the existing downtown with the planned development area(s). Other recently completed projects within the downtown area include the Auburn Regional Medical Center campus expansion. The campus expansion includes an oncology center and a 300 stall parking garage which is a public private partnership with the City where the City will own 149 of the stalls. Also completed is a new professional office building which will provide medical/professional office space, relocation of the Key Bank, and over 50,000 square feet of new space for the City Hall. This project is adjacent to the Medical Center project and City Hall. Other factors continue to strengthen the local economy over the past several years. Emerald Downs a major thoroughbred horseracing facility in Auburn, was constructed to replace Longacres - the area's former racing facility located in Renton, Washington. Emerald Downs also provides facilities for meetings, banquets and seminars. A major gambling facility is located on the Muckleshoot Indian Reservation in Auburn. This facility has undergone several expansions within the past ten years which include a non-smoking facility, entertainment, and the addition of a 24-hour family restaurant. The casino also completed construction of a five- story parking garage in 2004 to accommodate casino growth and increased numbers of patrons. The Tribe is in the planning stages at this time for further expansion of the facility in the near future. The Tribe also opened the White River Amphitheater, a 25,000 seat outdoor facility in 2003. The total impact of these facilities on the City has been an increased demand for public safety, and a large transportation impact, as the main arterial accessing these sites goes directly through the City. The Boeing Company's layoffs and divesture over the past several years in the Puget Sound area has had an effect on the regional and local economy. From 2000 through 2009 Boeing has reduced approximately 48% of its jobs in Auburn. The Boeing downsizing operation has led to new economic growth in Auburn as available property and the adjacent land opens up to development opportunities for other businesses. These new businesses are relocating to Auburn by using property vacated by the Boeing Company. In the long term, the City will benefit from the economic diversity. Despite economic cycles, the City has continually focused on enhancing the quality of life in the community. In recent years, through strategically placed bond issues, special levies, successful grant procurements, and conservative operations, parks have been expanded, streets improved, commercial and residential sidewalks have been upgraded, and buildings have been advantageously renovated to house a new senior center and parks department. In 1997, the voters elected to annex to the King County Library System. The System completed construction of a new library in the City early in 2000. In 2001, the City renovated the former library building into a new Senior Center at the Les Gove Park campus. In 2003, the City was successful in negotiating the purchase of the former YMCA building located on this campus. The building was demolished and site prepared for the future construction of a Community Center. The campus currently hosts the Library, White River Valley Museum, Parks and Recreation department and Senior Center. The City's budgeting process is based on financial policies directed at conserving fiscal resources while supporting programmatic strategies. Budget recommendations reflect a long- range analysis of fiscal trends. These policies and practices have not only averted serious 6 CITY OF AUBURN: 2009 CAFR LETTER OF TRANSMITTAL funding problems in the past, particularly in the current and recent recession years of 2001 and 2002, but have maintained the General Fund on a firm financial basis. The City is maintaining a stable financial condition by reducing expenditure budgets to match the current revenue streams. All funds contain adequate balances, and the City's debt is manageable. The General and Cumulative Reserve funds contain satisfactory balances, a significant Insurance fund has been set aside for contingencies, and the Equipment Rental fund is adequate for vehicle replacement. The Proprietary and Fiduciary funds are generally in satisfactory condition and have adequate balances for their purposes. The Water fund has been under some economic pressure due to an aggressive capital program to meet federal and state requirements. Rates were increased from 2007 through 2010. The City completed a comprehensive plan update in 2009 for all utilities. A rate schedule was developed in 2009 and the associated cost-of-service study for the utilities will be completed in 2010. B. FUTURE ECONOMIC OUTLOOK Auburn is in a continuous process of both short-term and long-term financial planning. Short- term financial planning is inherent in the development of the City's biennial budget. Concurrent with the biennial budget is the review of the City's long-term capital needs. Funding sources are assessed with the development of the six-year Capital Facilities Plan. The capital facility plan is a component of the Comprehensive Master Plan, which outlines how the City should look and function in twenty years and creates a vision that can be realistically implemented. An integral part of this vision is determining how to allocate the City's financial resources to achieve the desired goals. The City has several long-term planning and capital projects underway. Several projects include the reconstruction of aged utility infrastructure, reconstruction of local neighborhood streets and the A Street NW project. This project will improve mobility and will contribute to the completion of a North/South arterial corridor. Also underway is a master plan for the Les Gove Park campus which will house a community center and activity center in the future. The Pierce County area of the City continues to grow through the development of new single and multifamily housing in Lakeland Hills. Madera town homes, Pinnacle and Kersey Way single-family homes are some of the newest developments with more in the planning stages. Growth is predicted to continue, but not at the rate experienced in the late 1990's. The challenge is to control costs that grow at a faster rate than revenue. Areas of concern are health care costs and public safety costs related to incarceration and labor contracts. Continuing to fund these sectors will draw valuable resources from other areas such as infrastructure replacement and capital programs. As Auburn moves forward, economic conditions will be continually monitored and adjustments to city spending and services made to maintain the City's financial health. Long-term plans will be focused on ensuring the City continues to be an economically strong and viable city. III. FINANCIAL INFORMATION A. CASH MANAGEMENT The City invests in U.S. Treasury and Agency Issues, Prime Bankers Acceptances, Time Deposits, and Repurchase Agreements. Investment policies and procedures, established by the Mayor and adopted by the City Council, require the City to establish a trustee to take delivery of all investment transactions at time of payment. The City has contracted with the Bank of New York to provide delivery versus payment trustee services on all government agency investments. The State of Washington maintains an investment pool to provide economies of scale in CITY OF AUBURN: 2009 CAFR LETTER OF TRANSMITTAL investing to smaller- and medium-sized cities in the State. The City uses this service for all funds not invested in longer-term securities. The pool operates under the same legal restrictions that apply to all municipalities in the State and, consequently, uses the same instruments as listed above. The State also takes delivery of all investment transactions. The City has adopted a comprehensive investment policy statement to guide City investment practices. These policies are closely patterned after the recommendations in Investing Public Funds published by the Government Finance Officer's Association (GFOA). Investments are restricted to less than three years in order to maintain liquidity on all investments in all funds, yet enable the City to take advantage of the yield curve. Fiduciary funds, which involve long-term reserves and require minimal liquidity, are invested for longer time periods. The City undertakes repurchase agreements only with financial institutions that offer the City full protection in the event of default, by providing the delivery of the underlying security to the City. B. RISK MANAGEMENT The City participates in the Washington Cities' Insurance Authority (an insurance pool of over 100 cities) and the City actively pursues risk reduction in the operation of its programs. The City purchases, with employee participation, most of its health insurance for its employees through commercial policies administered by the Association of Washington Cities. Employees represented by the Teamsters Union have insurance through the Teamsters organization. The City participates in the Washington State Workers' Compensation program. In order to keep its long-term options open and to provide for any uninsured losses that might occur, the City has elected to build an insurance reserve (the Insurance fund). The Insurance fund supplements various insurance coverages maintained by the City. This fund is also used to self-insure some limited exposures, the most significant of which is accidental loss to City-owned vehicles. The Washington Cities' Insurance Authority not only provides a sharing of risk by pooling of losses, it also provides an extensive array of professional services in risk management. The pool monitors the City's management practices and damage claims. The City follows the guidelines provided by the pool in an effort to minimize risk exposure in the day-to-day operations of the City's programs. The City also maintains an extensive employee safety program managed by the Human Resources department. IV. OTHER RELEVANT INFORMATION A. INDEPENDENT AUDIT State law requires an annual audit of all City books of accounts and financial records by the Office of the State Auditor, which is headed by an independently elected State official, the State Auditor. The Auditor has broad legal authority to inquire into all financial and legal compliance matters and such audits are considered equal to audits by certified public accounting firms. The 2009 financial audit of the City is complete and was conducted in conformance with Generally Accepted Auditing Standards. The financial statements of all City funds have been included in this audit. The City has been given an unqualified opinion for 2009. Please see the Auditor's Report. The State Auditor's Office also audits the City's administration of its federal grants under the single audit concept. 8 CITY OF AUBURN: 2009 CAFR LETTER OF TRANSMITTAL B. AWARDS The Government Finance Officer's Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Auburn for its Comprehensive Annual Financial Report for the fiscal year ended December 31, 2008. This was the twenty second consecutive year that the City has achieved this prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current Comprehensive Annual Financial Report continues to meet the Certificate of Achievement Program's requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. The City has also received the Government Finance Officer's Association Distinguished Budget Presentation award for eighteen years. The City was one of just twenty-four cities in the state to receive both the Certificate of Achievement for Excellence in Financial Reporting and the Distinguished Budget Presentation award for 2008. C. ACKNOWLEDGMENTS Preparation of this report could not have been accomplished without the professional, efficient, and dedicated staff of the Finance department and various other City employees who assisted in its production. Further appreciation is extended to the Mayor and City Council for their encouragement, interest, and support in conducting the financial affairs of the City in a sound and progressive manner. The assistance of the auditors from the Washington State Auditor's Office is also greatly appreciated. Respectfully submitted, Shelley R. Coleman Finance Director CITY OF i_ * MORE THAN YOU IMAGINED 10 Certificate. of Achievement for Excellence in Financial Reporting Presented to City of Auburn Washington For its Comprehensive Annual Financial Report for the Fiscal Year Ended December 31, 2008 A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers Association of the United States and Canada to government units and public employee retirement systems whose comprehensive annual financial reports (CAFRs) achieve the highest standards in government accounting and financial reporting. PNGE 0 AND xy~ CIRPPMUM S yak S chi President Executive Director 11 ~ TTV (lam -T- * MORE. THAN YOU IMAGINED 12 Washington State Auditor Brian Sonntag INDEPENDENT AUDITOR'S REPORT June 18, 2010 Mayor City of Auburn Auburn, Washington 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, 2009, which collectively comprise the City's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the City's management. 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 of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. 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, King County, Washington, as of December 31, 2009, 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 conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we will also issue our report dated June 18, 2010, 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. That report will be issued under separate cover in the City's Single Audit Report. The purpose of that report is to describe the scope of our testing of internal 13 i~ Insurance Building, PO Box 40021 • Olympia. Washington 985(1-1-0021 • (360) 902-0370 • TDD May (800) 833-6388 a FAX (360) 753-06=16 hnp~lrw~nw.sao.wa.gov control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. The management's discussion and analysis on pages 15 through 32 is not a required part of the basic financial statements but is supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. Our audit was performed for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The accompanying information listed as combining and individual fund financial statements and schedules on pages 98 through 142 is presented for purposes of additional analysis and is not a required part of the basic financial statements. This information has been subjected to auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. The information identified in the table of contents as the Introductory and Statistical Sections is presented for purposes of additional analysis and is not a required part of the basic financial statements of the City. Such information has not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion on it. Sincerely, 'In BRIAN SONNTAG, CGFM STATE AUDITOR 14 CITY OF AUBURN: 2009 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS MANAGEMENT'S DISCUSSION AND ANALYSIS The City of Auburn's (the "City") discussion and analysis is designed to: • Assist the reader in focusing on significant financial issues • Provide an overview of the City's financial activity • Identify changes in the City's financial position (its ability to meet future years' challenges) • Identify any material deviations from the approved budget • Identify individual fund issues or concerns Management's Discussion and Analysis is designed to focus on the current year's activities, resulting changes and currently known facts. Therefore, it should be read in conjunction with the Transmittal Letter and the City's financial statements. Financial Highlights Total government-wide net assets, the amount by which total assets exceed total liabilities, equal $553.4 million. A total of $465.3 million, or 84.1 % of total net assets, is invested in capital assets, net of debt related to the capital assets, and includes assets such as utility systems, streets, buildings, land, vehicles and equipment. An additional $2.2 million of net assets is restricted for purposes of endowment and debt service. Of the remaining $85.9 million of net assets, $12.6 million is legally restricted, reserved by City policy for specific purposes, or is restricted for use by the City's utilities and $73.3 million is unrestricted. • The net increase in government-wide net assets during 2009 was $13.5 million. Of this amount, $17.1 million was directly related to the increase in City-owned capital assets and infrastructure. • On a government-wide basis, governmental net assets increased by $12.7 million during 2009. Of this amount $11.1 million is attributable to the capitalization of construction projects, and the balance of the increase is due to lower than anticipated expenditures. • Business-type net assets increased by $818,981 during 2009. While the business-type activities had a net loss of $1.4 million, net assets increased due to $1.9 million of utility capital contributions. Of this amount, $7 million is related to utility infrastructure contributed to the City by developers, and $1.2 million is related to new customer connections. • Governmental fund balances at year-end totaled $40.5 million. Of this amount, $38.9 million, or 96%, is unreserved and available to fund ongoing activities. However, the majority of the unreserved fund balance relates to special revenue funds and, as such, is legally restricted for specific purposes. Included in unreserved fund balance is $5.3 million in the cumulative reserve fund that is intended to provide resources in the event of significant downturns in certain City funds or provide for capital needs as designated by the City Council. Compared to 2008, total governmental fund balances decreased by $1.7 million. This decrease is primarily a result of expenditures related to the tenant improvements for the City Hall Annex building. • The general fund's unreserved fund balance increased $200,000 from 2008. This increase resulted from a reduction in expenditures. Total City debt payments during the year, net of compensated absences, were $2.3 million. Total outstanding debt, including bonds and loans, totaled $76.2 million at December 31St This ending debt balance is an increase of $50.2 million from 2008 and is the result of the 15 CITY OF AUBURN: 2009 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS South Correctional Entity (SCORE) issuance of $86.2 million in bonds which the City of Auburn is obligated to pay 31 % or $26.7 million of the debt issuance and the City Hall Annex office space capital lease that was partially offset by scheduled debt repayments. See note 9 for further information on debt activity during the year and note 19 for information related to the issuance of $31,990,000 Limited General Obligation bonds in May 2010. Other City Highlights • Construction of a parallel taxiway at the Auburn Municipal Airport. • The City worked with other regional governments on future regional water supplies, climate change, water demand, source exchange and small systems management. • The expanded use of Photosafe Red Light Photo Enforcement and Speed Enforcement within the City to enhance the public safety of our pedestrian and vehicular traffic. Expansion included two school zones. • Police reduced crime through community programs educating citizens on reducing crimes. • Continued implementation of the neighborhood traffic calming program using revenues from the Photo Safe Red Light Enforcement program. • The completion of the second Shoreline Master Program. • The provision of support to the Save Our Streets program for local street projects. • The completion of Auburn Way North pedestrian crossing and A Street SE pedestrian improvements. • The City provided greater opportunity to citizens in need of human service agency services to use those services in a more coordinated manner. • Completed construction of a bird viewing tower in Auburn Environmental Park. • The City secured Local Revitalization Financing from the State of Washington to assist in funding downtown infrastructure improvements. Overview of the Financial Statements The City's basic financial statements are presented in three parts 1) Government-wide financial statements 2) Fund financial statements 3) Notes to the financial statements 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 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 16 CITY OF AUBURN: 2009 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS focus of the Statement of Net Assets is designed to be similar to bottom-line results for the City and its governmental and business-type activities. This statement combines and consolidates governmental funds' current financial resources (short-term spendable resources) with capital assets and long-term obligations. Over time, increases or decreases in net assets may be one indicator of improvement or deterioration in the City's overall financial health. The Statement of Activities is focused on both the gross and net cost of various functions, including both governmental and business-type activities, which are supported by the City's general tax and other revenues. This is intended to summarize and simplify the user's analysis of cost of various governmental services and/or subsidy to various business-type activities. The revenue generated by the specific functions (charges for services, grants, and contributions) is compared to the expenses for those functions to show how much each function either supports itself or relies on taxes and other general funding sources for support. All activity on this statement is reported on the accrual basis of accounting, requiring that revenues are reported when they are earned and expenses are reported when they are incurred, regardless of when cash is received or disbursed. Governmental activities of the City include general government (executive, finance, legal, human resources, and court), security (police), physical environment, economic environment, transportation, health and human services, and culture and recreation. The City's business-type activities include water, sanitary sewer, storm water and solid waste utilities, as well as the operations of a golf course, airport, cemetery and commercial retail space. Governmental activities are primarily supported by taxes, charges for services, and grants while business-type activities are self- supporting through user fees and charges. Fund Financial Statements The Fund Financial Statements are the traditional reporting format for governments. A fund is a fiscal and accounting entity with a self-balancing set of accounts used to account for specific activities or meet certain objectives. While the government-wide statements present the City's finances based on the type of activity (general government vs. business type), the Fund Financial Statements are presented by fund type, such as the general fund, special revenue funds and proprietary funds, with the focus on major funds. 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 expenditures. The information in the governmental fund statements can be used to evaluate the City's near-term financing requirements and immediate fiscal health. Comparing the governmental fund statements with the government-wide statements can help the reader better understand the long-term impact of the City's current-year financing decisions. Because the basis of accounting is different between the 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 Assets is found on the bottom of the governmental funds' Balance Sheet, while the reconciliation between the governmental fund Statement of Revenues, Expenditures and Changes in Fund Balance and the government-wide Statement of Activities is found directly following the governmental funds' Statement of Revenues, Expenses, and Changes in Fund Balance. The City maintains seventeen individual governmental funds. Of these, three are considered major (the general fund, the arterial street fund, and the capital improvement projects fund) and are 17 CITY OF AUBURN: 2009 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS presented separately in the governmental fund Balance Sheet and the governmental fund Statement of Revenues, Expenditures and Changes in Fund Balances. The remaining governmental funds are combined into a single column labeled "Other Governmental Funds". Individual fund data for each of the other governmental funds can be found in the combining statements later in this report. The City maintains budgetary control over its operating funds through the adoption of a biennial budget. Budgets are adopted at the fund level according to state law. Budgetary comparison statements are presented for the general and arterial street funds as required supplemental information. Other budgetary comparison schedules are included following the other government funds' combining statements in this report. Proprietary funds are used by governments to account for their business-type activities and use the same basis of accounting utilized in private industry. Business-type activities provide specific goods or services to a group of customers that are paid for by fees charged to those customers. There is a direct relationship between the fees paid and the services rendered. The City has two types of proprietary funds: enterprise funds and internal service funds. Enterprise funds are used to account for goods and services provided to citizens, while internal service funds are used to account for goods and services provided internally to various City departments. Enterprise funds report the same functions presented as business-type activities in the government- wide statements, but in greater detail. The City's enterprise fund statements provide information on the City's four utilities (water, sanitary sewer, storm water, and solid waste) as well as the City- owned airport, cemetery, and golf course and the City-leased retail space. Internal service funds are an essential accounting tool used to accumulate and allocate costs internally among the City's various functions. The City uses internal service funds to account for its fleet of vehicles, its maintenance and operation of facilities, the City-wide provision of computer hardware and software services, and its insurance premiums. Internal service funds benefit both governmental and business-type activities, and are allocated accordingly in the government-wide statement of activities. Fiduciary funds account for assets held by the City in a trustee capacity or as an agent for individuals, private organizations, other governments or other funds. Fiduciary funds are not included in the government-wide financial statements because their assets are not available to support the City's activities. The City has two fiduciary funds: a pension fund and an agency fund, and are accounted for on the accrual basis. As agency funds are custodial in nature, they do not include revenues and expenses. Notes to the Financial Statements The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found at the end of the Basic Financial Statements section. Other Information In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the budget vs. actual reports of the City's general fund and major special revenue funds. The budget vs. actual required supplementary information can be found on page 42 and 43, and the pension benefit and other postemployment benefit required supplementary information is found in note 11. 18 CITY OF AUBURN: 2009 CAM MANAGEMENT'S DISCUSSION AND ANALYSIS The combining statements referred to earlier in connection with nonmajor governmental funds, nonmajor enterprise funds, and internal service funds are presented in the section titled "Fund Financial Statements and Schedules". Government-wide Financial Analysis The statement of net assets can serve as a useful indicator of the City's financial position. The City of Auburn's net assets (assets in excess of liabilities) at December 31, 2009 totaled $553.4 million. Following is a condensed version of the government-wide statement of net assets with a comparison to 2008'. City of Aubum Net Assets Goverrr»entalA&Aies Business-typ e Activities Total As of 12131/09 As of 12131!08 As of 12/31/09 As of 12/31108 As of 12/31109 As of 12131/08 Current and other assets $ 95.967,931 $ 61772.384 $ 37.447,361 $ 44.721.537 $ 133,415.292 $ 106493,921 Capital assets, net of accumulated depreciation 343,474,388 310,061.603 167.578.719 159,692,228 511,053,107 469.753,831 Total assets 439,442,319 371,833,987 205,026,080 204,413,765 644,468,399 576,247.752 Longtenm liabilities other liabilities Total liabilities Net assets Invested in capital assets, net of related debt Restricted Unrestricted Total net assets 61,994,470 8,354,361 18.295.607 20,348,476 80,290,077 28.702,837 6,259,422 4,994,178 4,491,593 2,645,390 10,751,015 7,639,568 68,253,892 13,348.539 22.787.200 22,993,866 91.041.092 36.342.405 314,691,982 303,564,348 150,621,492 144,626,496 465,313,474 448,190,844 12741.566 28,965.599 2,071,219 933,914 14.812785 29.899,513 43,754,879 25.955,501 29,546,169 35,859,489 73,301,048 61,814,990 $ 371,188,427 $ 358,485,448 $ 182,238,880 $ 181,419,899 $ 553,427,307 $ 539,905,347 The largest component of the City's net assets, $465.3 million, or 84.1%, is its investment in capital assets, less debt related to the acquisition or construction of those assets. These capital assets, such as streets, parks, trails, and vehicles and equipment related to police and public works, are used to provide services to the citizens. As a result, these assets are not for sale, and are therefore not available to fund current and future City obligations. The City elected the GASB 34 reporting option to include all general infrastructure of the City acquired or substantially renovated since 1980. The largest component of unrestricted net assets, $43.7 million, may be used for functions such as public safety employee salaries and supplies, park and road maintenance, and other general governmental services. The second largest component of unrestricted net assets, $29.5 million, represents the unrestricted net assets of the City's business-type activities and may only be spent on activities related to one of the four City utilities (water, sanitary sewer, storm water and solid waste) or to the City-owned ventures (airport, golf course, cemetery, and commercial retail property). Examples of utility activities include maintenance of water/sewer mains, pump and lift stations, storm drain flushing, water meter reading, and garbage collection. Activities related to the other City- owned ventures include maintenance of hangars and runways at the airport, and grooming and landscaping at the golf course and cemetery. Restricted governmental fund net assets are $12.7 million and are restricted for purposes such as capital project construction, debt service, mitigation, and endowment. 19 CITY OF AUBURN: 2009 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS Changes in Net Assets The change in net assets represents the increase or decrease in City net assets resulting from its various activities. Following is a condensed version of the City's changes in net assets. The table shows the revenues, expenses and related changes in net assets for both governmental-type and business-type activities: City of Auburn's Changes in Net Assets Governmental Activities Business-ty pe Activities Total 2009 2008 2009 2008 2009 2008 Revenues: Program revenues Charges for services $ 8.108.542 $ 9.077.556 $ 42.338,079 $ 39.883 .386 $ 50,446. 621 $ 48,960. 942 Operating grants and contributions 3,001,401 2,567,788 87,454 55 ,024 3,088, 855 2,622, 812 Capital grants and contributions 12,806,049 94,905,563 1,992,259 10,670 ,660 14,798, 308 105,576, 223 General revenues Property taxes Sales taxes InteiRind utility taxes Admission & utility taxes Excise taxes Other taxes Investment earnings Miscellaneous revenue Total revenues Expenses: General government Public safety Transportation Physical environment Culture and recreation Economic environment Health and human services Interest on long-term debt Water Sanitary sewer Storm drainage Solid waste Goff course Other business-type activities Total expenses Increase in net assets before transfers Transfers Change in net assets Net assets-beginning of period Net assets-end of period 13,362,672 10,804,825 13,362.672 10,804,825 14.727.496 17.620.661 14.727.496 17.620.661 3.437.526 2.507.213 3.437.526 2.507.213 9,071,485 8,075,355 9,071,485 8,075,355 2,310,076 3,477,517 2,310,076 3,477,517 4,607.584 2.949.430 4.607.584 2.949.430 570,798 1,589,837 312,618 1,242.363 883,416 2,832,200 67,223 2,751,495 3,669,878 330,472 3,737,101 3,081,967 72,070,852 156,327,240 48,400,288 52,181,905 120,471,140 208,509,145 7.567.085 8.000,715 - - 7,567.085 8.000.715 25.675.063 28.217.844 25.675.063 28.217.844 11,471,167 12,974,861 11,471,167 12,974,861 3,327,836 3,096,696 3,327,836 3,096,696 7.561.569 6.271.924 7.561.569 6.271.924 3.000.257 2.608.980 3.000.257 2.608.980 527,029 776,224 527,029 776,224 408,471 226,651 408,471 226,651 - - 8.970.215 8.565.231 8.970.215 8.565.231 16,569,297 14,479,299 16,569,297 14,479,299 7,275,072 5.226.823 7,275.072 5,226.823 11.019.606 10.7 81.42 6 11.019.606 10.781.426 1,909,758 1,958,703 1,909,758 1,958,703 1,666,754 1,720,603 1,666,754 1,720,603 59.538.478 62.173.895 47.410.702 42.732.085 106.949.180 104.905.980 12,532,374 94,153,345 989,586 9,449,820 13,521,960 103,603,165 170,605 427,740 (170,605) (427,740) - - 12.702.979 94.581,085 818,981 9.022.080 13,521.960 103.603,165 358,485,448 263,904,363 181,419,899 172,397,819 539,905.347 436,302,182 $ 371.188.427 $ 358.485.448 $ 182238.880 $ 181.419.899 $ 553.427.307 $ 539.905.347 Governmental activities contributed $12.7 million to the total increase in City net assets. Revenues to fund capital assets are recorded as program or general revenues in the statement of activities. However, asset purchases are not recorded as expenses in the year purchased and construction costs are not recorded as expenses in the year incurred. Instead, the costs are recorded as long- term assets and are depreciated over their useful life. This amount equaled $11.1 million, which was offset by an overall increase in the cost and variety of governmental services provided. General tax revenues increased in the current fiscal year by 4.6%, compared to a decrease of 7.6% in the prior fiscal year: 20 CITY OF AUBURN: 2009 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS • Property tax revenue rose $2.5 million, or 23.7%. This increase is a result of the annexation of Lea Hill and West Hill areas in 2008. • Sales tax collections fell $2.9 million, or 16.4% as a result of the economic downturn and the Streamlined Sales Tax legislation enacted in Washington State. • Utility and admission tax revenue rose by $996,130 million or 12.3%. The increase is primarily attributable to the one percent utility tax rate increase to fund Arterial Street preservation. • Other taxes increased by $1.6 million. The majority of this increase was attributable to streamlined sales tax mitigation. • Excise tax revenue decreased by $1,167,441, or 33.6%. The decline in excise taxes is from a drop in real estate excise taxes (REET) of $671,354 which reflects the decline in real estate activity both in number of transactions and in the average value per transaction. Investment earnings fell by $1.0 million or 64.1% in governmental activities and $929,745 in business-type activities for a government-wide decline of $1.9 million or 68.8%. These declines reflect the tumultuous conditions in the market. Government-wide Miscellaneous revenue increased $655,134, due to the increase in business-type activities, and was primarily from a federal grant for the airport parallel taxiway. Governmental activities expenses in the primary government as a whole decreased from $62.2 million to $59.5 million in 2009 a decrease of 4.3%. The decrease was a result of the City's reduction in workforce, union concessions and unaffiliated reductions in 2009 along with other cost cutting measures. The first chart on the following page summarizes the government activity revenue by source, while the second chart reflects the specific programs' revenues and related expenses for the various activities of the City. Gaps between specific programs' revenues and their related expenditures are funded through general tax revenues. 21 CITY OF AUBURN: 2009 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS Revenues by Source - Government Activities Other revenue I% Utility & admission taxes 13°% Interfund utility tax, 5% Sales taxes 19% Charges for services 11% pital grants & ontributions 4% Operating grants & contributions 18% xes Program Expenses and Revenues - Governmental Activities $100,000,000 $90,000.000 $80,000,000 $70,000,000 $60,000,000 $50,000,000 $40,000,000 $30,000,000 $20,000,000 $10,000,000 $0 o~ o~ ~a cz; e ~~o oa et ~o \\G ~\~o ~o~ \~o qj ~o a~y Q~~ m~ a~ a~ v~J a\ OProgram revenues ■ Expenses 22 CITY OF AUBURN: 2009 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS Business-type net assets increased by $818,981. Key components of this increase include: $1.9 million of the increase relates to utility capital contributions. Of this amount, $7 million is related to utility infrastructure contributed to the City by developers, and $1.2 million is related to new customer connections. • Income (loss) before capital contributions and transfers amounted to: o Water fund: o Sanitary sewer fund o Storm fund: o Solid waste fund. o Golf course: o Non-major funds: • Net transfers-out totaled $170,605. $ 37,074 (1,897,955; (166, 027; (1,320,186) (232, 998', 2,188, 579 $(1,391,513) Below is a chart that shows the relative net asset balances for each business-type fund: Business-type Net Assets -By Fund Solid wa 1% Storm drainage 22% Water 32% The majority of net assets in the City's enterprise funds relate to capital asset infrastructure, such as water and sewer mains, the airport runway, and the golf course land. As such, most of the net assets are not available to support the ongoing expenses of the funds. Following are two charts that contrast the total net assets to the spendable portion of net assets for each enterprise fund: Golf course 3% 23 Sanitary sewer 35% CITY OF AUBURN: 2009 CAM MANAGEMENT'S DISCUSSION AND ANALYSIS Comparison of Total Net Assets to Spendable Net Assets Utility Funds $70,000,000 $60,000,000 $50,000,000 $40,000,000 $30,000,000 $20,000,00( $10,000,00( QLVI II i ui au iayc Solid waste Comparison of Total Net Assets to Spendable Net Assets Other Enterprise Funds $10,000,000 $9,000,000 $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,00( $1,000,00( Commercial retail The first chart following depicts the revenues and expenses for business-type funds, while the second shows the various sources of business-type revenue: 24 CITY OF AUBURN: 2009 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS Business-type Activity Revenues and Expenses Before Capital Contributions and Transfers $15,000,000 $13,500,000 $12,000,000 $10,500,000 $9,000,000 $7,500,000 $6,000,000 $4,500,000 $3,000,000 $1,500,000 $0 Business-type Activity Revenues - By Source Investment earnings 1% Capital contributior 4% arges for services 87% ❑ Revenues ■ Expenses 25 Water Sanitary Storm Solid waste Golf course Minor sewer drainage business-type activities Business-type miscellaneous CITY OF AUBURN: 2009 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS 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, 2009, the City's governmental funds had combined fund balances of $40,535,810, a decrease of $1,640,644 or 3.88%. This decrease is related to: • General fund $166,760 • Arterial street fund ($311,074) • Capital improvement projects fund ($2,934,510) • Other governmental funds $1,438,180 Of the government funds' total fund balances, $38,997,772 is unreserved. Of this unreserved total, $10,422,360 is earmarked for capital projects and $15,184,058 is in special revenue funds and is earmarked for specific purposes. Of the $1,538,038 of fund balances that are reserved, $1,352,859 is reserved for endowment. The general fund is the primary operating fund of the City. All receipts and payments of ordinary City operations are processed through it unless they are required to be accounted for in another fund. At the end of 2009, the general fund had a fund balance of $13,237,851, all of which is unreserved. Other funds that had significant fund balances include: • $9,770,693 in the capital improvement projects fund', used for various governmental capital asset projects. • $5,360,687 in the cumulative reserve fund; used for revenue stabilization or capital projects. • $5,971,594 in the mitigation fund; used to collect fees from new development to mitigate the cost of new roads and other infrastructure. • $1,506,362 in the cemetery endowed care fund; used for maintenance of the cemetery. 26 CITY OF AUBURN: 2009 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS The following chart shows the relative fund balances for governmental funds: Governmental Funds - Fund Balances Ce endow Mitigation fund 15% Cumulative rese fund 13% General fund 32% krterial street fund 3% Capital improvement fund 24% The increase in the general fund balance of $166,760 is primarily attributable to a decrease in anticipated expenditures. In addition, sales tax revenues declined $2.9 million or 16.4% reflecting the negative impact of the Streamlined Sales Tax legislation enacted in the State of Washington as well as the impacts of the economic downturn over the fiscal year. These decreases in revenue were partially offset by an increase in intergovernmental revenues of $1.2 million; the majority of which is attributable to money received from the State for streamlined sales tax mitigation. General fund expenditures increased by $184,163 or .01% from 2008. The increase reflects the reduction in the personnel costs and other cost saving measures the City undertook in 2009 in light of the economic downturn. 27 All other government funds 9% CITY OF AUBURN: 2009 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS The general fund revenue decrease of $806,449 came from the following sources: $3,000,000 $2,000,000 Intergovernmental $1,882,460 Interfund utility taxes Property taxes $717,942 $1,000,000 $843,792 Utility & admission taxes $450,198 Licenses & permits $216,153 $0 F1 . F-1 . F__] . I I . Fines & forfeitures L($148,737) ($1,000,000) Charges for services ($687,834) Miscellaneous ($1,187,258) ($2,000,000) ($3,000,000) Sales taxes ($2,893,165) ($4,000,000) The ending fund balance decrease of $2.9 million in the capital improvement projects fund is largely due to the City's tenant improvements on the City Hall Annex office space. Other significant changes in fund balances include: • The mitigation fund increased by $503,174 as revenues exceeded expenditures and net transfers. • The local streets fund increased by $821,212 revenues exceeded expenditures and net transfers. Financial Analysis of Proprietary Funds The City's proprietary funds provide the same type of information as found in the government-wide financial statements, but in greater detail. Factors affecting the finances of the City's proprietary funds have already been addressed in the discussion of the City's business-type activities. General Fund Budgetary Highlights The City budgets biennially by adopting a budget at the end of the preceding fiscal year, and then making adjustments as necessary via budget amendments throughout the next two years. Major budget revisions included: • Decreasing sales tax revenue by $2.6 million to adjust for economic downturn. • Decreasing sales tax credit for the annexation by $500,000 due to the economic downturn. 2009 General Fund Revenue Increases /(Decreases) - By Source 28 CITY OF AUBURN: 2009 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS • Increasing intergovernmental revenues by $1.5 million for South Correctional Entity (SCORE) startup cost repayment • Increasing transfer in from Cumulative Reserve fund by $1.5 million for SCORE startup costs • Decreasing Building Permits by $254,350 as construction declines due to the economic downturn. • Decreasing salaries and benefits by $1.3 million due to 11.25 vacant positions City elected to freeze due to the economic downturn. • Decreasing street department capital outlay for a truck with snowplow by $280,000 due to the economic downturn. • Decreasing salaries and benefits by $ 1.1 million for a reduction in workforce (23.5 positions), freezing 3 more vacant positions, union concessions, and unaffiliated reductions. • Decreasing intergovernmental professional services by $620,000 to reserve money for SCORE startup and transition costs in the future. • Increasing police intergovernmental professional services by $1.5 million for City's contribution to SCORE • Increasing transfers out to the Cumulative Reserve fund by $1.5 million for SCORE repayment of startup costs. Reasons for the significant variances in the general fund between the final budget and actual results include: • Retail sales and use tax were below budget by $2.4 million because the streamlined sales tax credit that the State pays the cities for mitigation of losses due to the new destination based sales tax is recorded in intergovernmental revenues but the City includes this credit in its retail sales tax budget. • Intergovernmental revenues exceeded the budgeted amount by $1.5 million because the City received streamlined sales tax mitigation payment of $2.0 million from the State of Washington which were not included in the intergovernmental revenue budget but in the retail sales and use tax budget. The difference is SCORE repayment startup costs that the City did not receive in 2009. • Security of persons and property expenditures were below budget by $1.5 million as jail costs were less than anticipated, and the City did not install as many Redflex traffic lights as planned. • Transfers in were $1.2 million less than budgeted due to $500,000 that was not transferred in from the Commercial Retail fund and $743,043 was not transferred in from the Cumulative Reserve fund for the City's contribution to SCORE startup costs. 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, 2009 totaled $511.1 million (net of accumulated depreciation), an increase of $41.3 million from 2008. 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 29 CITY OF AUBURN: 2009 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS • $24.5 million capital lease for the City Hall Annex • Developer contributions resulted in an increase of $1.2 million in utility infrastructure assets and $2.7 million in governmental infrastructure assets. • $11.3 million was spent by proprietary funds on construction projects during the year. • $16.5 million was spent by governmental funds on construction projects during the year. Some of the larger projects in the governmental funds include: o $1.5 million on Local Street Pavement Preservation o $1.5 million on Arterial Pavement Preservation o $3.2 million on City Hall Annex o $1.4 million on Harvey Road & 8t" Street NE o $0.7 million on Auburn Community Center A summary of the City's net assets follows: Summary of Capital Assets (net of depreciation) Governmental Activities Business-ty pe Activities Total As of 12/31109 As of 12131108 As of 12131109 As of 12/31/08 As of 12/31109 As of 12/31108 Land $ 106,289,278 $ 105,137,746 $ 14,464,997 $ 14,464,997 $ 120,754,275 $ 119,602,743 Building 14,778,942 15,569,975 8,129,361 8,454,977 22,908,303 24,024,952 Site improvements 4,907,626 4,957,636 130,188,990 133,417,881 135,096,616 138,375,517 Equipment 7,160,049 6,613,919 545,342 419,592 7,705,391 7,033,511 Intangibles 25,206,436 616,633 - - 25,206,436 616,633 Infrastructure 168,650,222 168,394,252 - - 168,650,222 168,394,252 Construction in progress 16,481,836 5,494,727 14,250,029 2,934,771 30,731,865 8,429,498 $ 343,474,389 $ 306,784,888 $ 167,578,719 $ 159,692,218 $ 511,053,108 $ 466,477,106 More detailed information on capital assets is provided in note 7 Long-term Debt At the end of the current fiscal year, the City had total bonded debt outstanding of $38,397,677. Of this amount, $27,985,850 is due to other governments, $8,175,000 is general obligation bonds, $2,200,000 is revenue bonds for the water and storm utilities, and $36,827 is special assessment debt with government commitment, The City currently maintains a rating of 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 $ 2,235,000 $ 5,940,000 $ 8,175,000 Special assessment bonds 36,827 - 36,827 Revenue bonds - 2,200,000 2,200,000 Due to other governments 27,985,850 - 27,985,850 $ 30,257,677 $ 8,140,000 $ 38,397,677 Below is a summary of additional, non-bonded long-term debt of the City: 30 CITY OF AUBURN: 2009 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS Other Long-term Debt Public Works Trust Fund loans $ 10,014,943 Employee leave benefits 2,649,569 $ 12,664,512 Washington State law limits the amount of general obligation debt a governmental entity may issue to 7.5% of its total assessed value. Of the 7.5% limit, 2.5% is for general purposes, 2.5% is for open spaces/parks, and 2.5% is for utilities. Non-voted (limited tax) general obligation indebtedness is limited to 1.5% of assessed valuation. The combination of unlimited tax and limited tax general obligation debt for all purposes cannot exceed 7.5% of assessed valuation. Following is a summary of the City's legal debt limitations and capacity: Summary of legal debt limits and capacity Auburn With a Vote Legal Limitation Capacity General $ 192,556,383 $ 129,922,696 Open spaces/parks 192,556,383 192,556,383 Utilities 192, 556, 383 192, 556, 383 Totals 577,669,150 515,035,463 Without a Vote General $ 115,533,830 $ 52,900,143 Totals $ 115,533,830 ' -7=,900,143 Additional information can be found in note 9 and in the statistical section of this report. Economic Factors The outlook for 2010 and beyond is guarded. The economy in the county and the City has experienced the same deep, lingering recession as that of the nation. The largest impact on the City is the decline in sales tax and development revenues. In addition there has been a $2.1 million drop in interest income for the City. Many existing businesses have reduced their forces and unemployment in Auburn ranges between 9% for blue collar workers and close to 12% for middle management. However in spite of the recession there is development occurring in the City: Auburn Regional Medical Center has recently completed construction of an 11,000-square foot cancer treatment center adjacent to the hospital, along with a public/private mix 300-stall parking garage. The City owns 145 of the stalls in the garage • A new three story building houses City offices (City Hall Annex) on the second and a portion of the third floor. The building also features Key Bank as its anchor, along with medical/professional offices. Downtown redevelopment is planned on several blocks (4+) near the Transit Station. A developer has been selected and the project value is estimated to be $240 million. The State has identified the Auburn project as a demonstration project and the City will receive up to $250,000 a year that will support approximately $7.2 million in infrastructure improvements in this area. The City was recently awarded a $3.0 million Economic Development Administration grant for this project. Plans are moving forward to develop a large retail/office project in the City's north end that had been a drive-in movie complex. Up to 65 acres may be involved. Significant new retail sales tax revenues would be generated from this project. 31 CITY OF AUBURN: 2009 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS • A new Super Wal-Mart has begun construction adjacent to the Super Mall and is scheduled for opening in the fall of this year. That will also provide the City with new jobs and new tax revenues. The City has and is adjusting the current expenditure budget in order to live within its means. The recession is anticipated to end early 2010. However, the return of revenue levels will be sometime further off in the future. The City views this economic event as a 'reset' of revenue to a lower base and expectations are that it may be several years before they return to prior levels. 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. 32 CITY OF AUBURN: 2009 CAFR BASIC FINANCIAL STATEMENTS GOVERNMENT-WIDE FINANCIAL STATEMENTS The City presents two government-wide financial statements: The Statement of Net Assets provides information all on city assets and liabilities, with the difference between the two reported as net assets. The Statement of Activities is focused on both the gross and net cost of various functions, including both governmental and business-type activities, which are supported by the City's general tax and other revenues. 33 CITY OF AUBURN: 2009 CAFR BASIC FINANCIAL STATEMENTS C 17V fly IT- Apppp- URN * MORE THAN YOU IMAGINED 34 CITY OF AUBURN: 2009 CAFR BASIC FINANCIAL STATEMENTS CITY OF AUBURN, WASHINGTON STATEMENT OF NET ASSETS DECEMBER 31, 2009 CASH AND CASH EQUIVALENTS (Note 3) CASH WITH OUTSIDE AGENCIES INVESTMENTS (Note 3) RECEIVABLES: TAXES CUSTOMER ACCOUNTS OTHER RECEIVABLES SPECIAL ASSESSMENTS DUE FROM OTHER GOVERNMENTAL UNITS (Note 6) INTERNAL BALANCES MATERIALS AND SUPPLIES INVENTORY LONG-TERM CONTRACTS AND NOTES DEFERRED CHARGES RESTRICTED ASSETS: TEMPORARILY RESTRICTED: CASH AND CASH EQUIVALENTS (Note 3) DUE FROM OTHER GOVERNMENTAL UNITS (Note 6) PERMANENTLY RESTRICTED: CASH AND CASH EQUIVALENTS (Note 3) INVESTMENT IN JOINT VENTURES DEPRECIABLE CAPITAL ASSETS (NET OF ACCUMULATED DEPRECIATION): (Note 7) NON-DEPRECIABLE CAPITAL ASSETS TOTALASSETS LIABILITIES: ACCOUNTS PAYABLE OTHER LIABILITIES PAYABLE PAYABLE FROM RESTRICTED ASSETS: ACCRUED INTEREST DEPOSITS MATURED BONDS PAYABLE UNEARNED REVENUE DEFERRED CREDITS DUE TO OTHER GOVERNMENTAL UNITS SPEC ASSESSMENT DEBT WITH GOVT COMMITMENT (Note 12) NET OPEB OBLIGATION BONDS AND OTHER DEBT PAYABLE: DUE WITHIN ONE YEAR (Note 12) DUE IN MORE THAN ONE YEAR (Note 12) TOTAL LIABILITIES NET ASSETS: INVESTED IN CAPITAL ASSETS. NET OF RELATED DEBT RESTRICTED FOR: CAPITAL PROJECTS DEBT SERVICE SPECIAL REVENUE FUND PROJECTS PERMANENTFUND EXPENDABLE NONEXPENDABLE OTHER PURPOSES RATE STABILI2ATION CONSTRUCTION UNRESTRICTED NET ASSETS TOTAL NET ASSETS $ 37,853,416 $ 23,177,483 $ 61,030,899 3.991.562 5.046,023 9.037,585 446,919 - 446.919 177,165 4,397,705 4,574,870 2,662,766 26,841 2,689,607 650,919 - 650,919 1,245,446 1,106, 654 2,352,100 (233,216) 233,216 - 111,861 206,813 318,674 641.075 1,067.442 1,698,517 1,564,407 - 1,564,407 10.993.821 2.195,184 13,189,005 575.336 - 675,336 1,199, 356 1,199, 356 34, 087, 098 34, 087, 098 220,703,275 138,863,693 359,566,968 122,771,114 28,715,026 151,486,140 5,992,931 4,228,329 10, 221, 260 266,491 54,077 320,568 - 139.299 139.299 69.888 69.888 1,720,387 871,464 2,591,851 27, 985, 850 27, 985, 850 36,827 36,827 1.446.786 1,446.786 4,010,685 1,665,505 5,676,190 26,793,935 15,758,638 42,552,573 314.691.982 150, 621.492 465.313.474 3,192,582 - 3,192, 582 151,451 851,361 1,002,812 8,198,177 - 8,198,177 1.199.356 1,199, 356 300.000 300,000 919,858 919,858 43,754,879 29,546,169 73,301,048 $ 371,188,427 $ 182,238,880 $ 553,427,307 The notes to the financial statements are an integral part of this statement. 35 CITY OF AUBURN: 2009 CAFR BASIC FINANCIAL STATEMENTS CITY OF AUBURN, WASHINGTON STATEMENT OF ACTIVITIES FOR THE YEAR ENDED DECEMBER 31, 2009 Page 1 of 2 PROGRAM REVENUES OPERATING CAPITAL CHARGES GRANTS AND GRANTS AND EXPENSES FOR SERVICES CONTRIBUTIONS CONTRIBUTIONS PRIMARY GOVERNMENT GOVERNMENTAL ACTIVITIES: GENERAL GOVERNMENT PUBLIC SAFETY TRANSPORTATION PHYSICAL ENVIRONMENT CULTURE AND RECREATION ECONOMIC ENVIRONMENT HEALTH AND HUMAN SERVICES INTEREST ON LONG-TERM DEBT BUSINESS-TYPE ACTIVITIES: WATER SANITARY SEWER STORM DRAINAGE SOLID WASTE GOLF COURSE NONMAJOR BUSINESS-TYPE ACTIVITIES TOTAL PRIMARY GOVERNMENT $ 7,567,085 $ 814,095 $ 191,693 $ 354,000 25,675,063 2,854,530 1,814,533 2,255,864 11,471,167 1, 587, 850 9,821.460 3,327, 836 147,996 88,049 66.464 7,561,569 1,048,390 367,119 308,261 3,000,257 1,654,692 141,550 - 527,029 989 398,457 408,471 - - - 59,538,478 8,108,542 3,001,401 12,806,049 8.970,215 16,569,297 7,275,072 11,019,606 1,909,758 8,825,924 14,902,566 6,000,863 9,599,236 1,653,769 87,454 649.742 592.376 750.141 GENERAL REVENUES: TAXES: PROPERTY RETAIL SALES AND USE INTERFUND UTILITY UTILITY EXCISE OTHER INVESTMENT EARNINGS MISCELLANEOUS GAIN ON SALE OF CAPITAL ASSETS CONTRIBUTIONS TO ENDOWMENT FUNDS TRANSFERS (Note 5) TOTAL GENERAL REVENUES NET ASSETS- BEGINNING The notes to the financial statements are an integral part of this statement. 36 CITY OF AUBURN: 2009 CAFR BASIC FINANCIAL STATEMENTS Page 2 of 2 NET (EXPENSE) REVENUE AND CHANGES IN NET ASSETS _ GOVERNMENTAL BUSINESS-TYPE ACTIVITIES ACTIVITY TOTAL $ (6,207,297) $ $ (6,207,297) (18, 750,136) (18, 750,136) (61, 857) (61.857) (3,025, 327) (3, 025, 327) (5, 837, 799) (5, 837, 799) (1,204,015) (1,204,015) (127, 583) (127, 583) (408,471) (408, 471) (35, 622, 486) (35, 622, 486) 505.451 505.451 (1.074.355) (1.074.355) (524,068) (524,068) (1.332,916) (1.332,916) (255,989) (255,989) (311,033) (311,033) (2,992,910) (2,992,910) $ (35,622,486) $ (2,992,910) $ (38,615,396) $ 13,362.672 $ $ 13.362.672 14, 727,496 14, 727.496 3,437,526 3,437,526 9,071,485 9,071,485 2,310,076 2,310,076 4,607,584 4,607,584 570,798 312,618 883,416 114,607 3,662,157 3.776,764 (88,023) 7.721 (80.302) 40,639 - 40,639 170,605 (170,605) - 48,325,465 3,811,891 52,137,356 358,485,448 181,419,899 539,905,347 37 CITY OF AUBURN: 2009 CAFR BASIC FINANCIAL STATEMENTS MAJOR GOVERNMENTAL FUNDS General Fund The general fund accounts for all of the City's financial resources except those required by statute or generally accepted accounting principles to be accounted for in another fund. As is the case with most municipalities, the general fund is the largest and most important accounting entity of the City. As noted in the statements that follow, the general fund receives the bulk of its revenues from local taxes, followed by State shared revenues, service charges, and other income. The general fund is accounted for on a modified accrual basis. Biennial budgets are adopted with appropriations lapsing at the end of each year of the biennium. Arterial Street Fund This fund is supported by the State's one-half cent gas tax and is used for major street construction. Capital Improvement Projects Fund This fund accounts for major capital acquisitions, and streets and parks construction projects. 38 CITY OF AUBURN: 2009 CAFR BASIC FINANCIAL STATEMENTS CITY OF AUBURN, WASHINGTON BALANCE SHEET GOVERNMENTALFUNDS DECEMBER 31, 2009 OTHER TOTAL GENERAL ARTERIAL CAPITAL GOVERNMENTAL GOVERNMENTAL FUND STREET IMPROVEMENT FUNDS FUNDS ASSETS: CASH AND CASH EQUIVALENTS $ 9.047.865 $ 1,827.584 $ 10,604.645 $ 16.440,462 $ 37.920,556 INVESTMENTS 2,990,937 - 1,000,625 3,991,562 RECEIVABLES: TAXES 446.919 - 446.919 CUSTOMER ACCOUNTS OTHER RECEIVABLES SPECIAL ASSESSMENTS INTERFUND RECEIVABLE (Note 5) LONG-TERM NOTES AND CONTRACTS DUE FROM OTHER GOVERNMENTAL UNITS DEFERRED CHARGES TOTAL ASSETS LIABILITIES AND FUND BALANCES: CURRENT PAYABLES CUSTOMER DEPOSITS OTHER LIABILITIES PAYABLE DEFERRED REVENUE TOTAL LIABILITIES FUND BALANCES: RESERVED FOR: DEBT SERVICE ENDOWMENT UNRESERVED.REPORTEDIN: GENERALFUND SPECIAL REVENUE FUNDS CAPITAL PROJECT FUNDS PERMANENTFUND TOTAL FUND BALANCES TOTAL LIABILITIES AND FUND BALANCES Total governmental fund balances as reported on this statement 119,255 51,400 - 170,655 2,592,860 - 56,345 2,649,205 - - 650.919 650.919 59,375 - 59,375 - - 641,075 - 641,075 1.217.764 426.522 - 148,814 1.793.100 - - 4,320 4,320 $ 16,415,600 $ 2,254,106 $ 12,357,120 $ 17,300,860 $ 48,327,686 $ 2,500.995 $ 585,050 $ 1,945,352 $ 363,338 $ 5.394.735 226,679 - - - 226,679 359 - - - 359 449.716 428.393 641.075 650,919 2.170.103 3,177,749 1,013,443 2,586,427 1.014,257 7,791,876 185,179 185,179 1.352.859 1.352,859 13,237,851 - - 13.237,851 - 1.240.663 - 13.943.395 15.184.058 - 9,770,693 651,667 10,422.360 - - - 153,503 153,503 13,237.851 1,240.663 9,770.693 16.286.603 40.535,810 $ 16,415,600 $ 2,254,106 $ 12,357,120 $ 17,300,860 $ 48,327,686 Amounts reported for governmental activities in the statement of net assets are different because: Capital assets used in governmental activities are not financial resources and therefore not reported in the funds. Other long-term assets are not available to pay for current-period expenditures and therefore are deferred in the funds. Prepaid expenses Interest receivable on investments Unearned revenue beyond the citys 30-day measurable and available period Deferred charges for bond issue costs Internal service funds are used by management to charge the cost of certain activities, such as insurance and fleet maintenance, to individual funds. The assets and liabilities of these internal service funds are included in governmental activities in the statement of net assets. Certain Joint Ventures activities do not use or provide current financial resources but increase net assets. Some liabilities are not due and payable in the current period and therefore are not reported in the funds. Bonds and loans payable Interest payable Net pension obligation Net other postemployment obligations Compensated absences payable The notes to the financial statements are an integral part of this statement. $ 40,535,810 336,770,669 1,421,612 13,561 449,716 922 1,885,810 17,957,299 6,101,248 (28,782,406) (33,728) 138,475 (1,446.786) (1,937,965) (32,062,410) $ 371,188,427 39 CITY OF AUBURN: 2009 CAFR BASIC FINANCIAL STATEMENTS CITY OF AUBURN, WASHINGTON STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE GOVERNMENTALFUNDS FOR THE YEAR ENDED DECEMBER 31, 2009 OTHER TOTAL GENERAL ARTERIAL CAPITAL GOVERNMENTAL GOVERNMENTAL FUND STREET IMPROVEMENT FUNDS FUNDS TAXES: PROPERTY RETAIL SALES & USE INTERFUND UTILITY UTILITY EXCISE OTHER LICENSES AND PERMITS INTERGOVERNMENTAL CHARGES FOR SERVICES FINES AND FORFEITURES SPECIAL ASSESSMENTS INVESTMENT EARNINGS MISCELLANEOUS EXPENDITURES: CURRENT: GENERAL GOVERNMENT SECURITY OF PERSONS AND PROPERTY PHYSICAL ENVIRONMENT TRANSPORTATION ECONOMIC ENVIRONMENT HEALTH AND HUMAN SERVICES CULTURE AND RECREATION $ 10,601,791 $ $ $ 2,313,152 $ 12,914,943 14.727.496 - 14.727.496 3,042,567 394,959 3,437,526 7.938.021 1.133.464 9.071.485 680,373 1.558,926 70,777 2,310,076 - - 52.480 52.480 1,326,875 - 1,326,875 7.670.754 1.165.708 779.605 9.616.067 1,709,191 - 1,764,008 3,473,199 1.911.034 - - 1.911.034 56,130 51,467 107,597 169.445 14,994 140,770 159.487 484,696 495,110 257,620 20,693 369,005 1,142,428 50,272,657 1,438,322 1,776,519 7,088,404 60,575,902 7,864.410 - - - 7,864,410 25,356, 285 405,831 25,762,116 3.192.089 - - 3.192.089 2,761,113 4,043,771 3,045,695 9,850,579 2.341.297 - 687.387 3.028.684 527,029 - 527,029 6,622.546 6.622.546 DEBT SERVICE: PRINCIPAL 213.258 35.578 230.825 479.661 INTEREST AND OTHER COSTS 159,239 1,456 - 135,546 296,241 CAPITAL OUTLAY - - 29.154.937 1.183.571 30,338,508 TOTAL EXPENDITURES 49,037.266 4,080,805 29.154.937 5.688.855 87.961,863 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 1.235.391 (2,642,483) (27.378.418) 1.399.549 (27,385,961) OTHER FINANCING SOURCES (USES): SALES OF CAPITAL ASSETS 100,754 10 26,977 127,741 INSURANCE RECOVERIES 114.607 - - - 114,607 ISSUANCE OF DEBT 35,878 921,400 - 957,278 PROCEEDS FROM CAPITAL LEASE - - 24.549.186 - 24,549186 TRANSFERS IN (Note 5) 1,773,957 1,524,151 1,195,158 2,501,040 6,994,306 TRANSFERS OUT (Note 5) (3,093.827) (114,142) (1.300,446) (2,489.386) (6,997,801) TOTAL OTHER FINANCING SOURCES AND USE S (1,068,631) 2,331,409 24,443,908 38,631 25,745,317 NET CHANGE IN FUND BALANCES 166,760 (311,074) (2,934,510) 1,438,180 (1,640,644) FUND BALANCES - BEGINNING 13.071.091 1,551,737 12.705.203 14.848.423 42,176,454 FUND BALANCES - ENDING $ 13.237,851 $ 1,240,663 $ 9.770,693 $ 16.286.603 $ 40.535,810 The notes to the financial statements are an integral part of this statement. 40 CITY OF AUBURN: 2009 CAFR BASIC FINANCIAL STATEMENTS CITY OF AUBURN, WASHINGTON RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENT FUNDS TO THE STATEMENT OF ACTIVITIES FOR THE YEAR ENDED DECEMBER 31, 2009 Net change in fund balances per the Statement of Revenues, Expenditures and Changes in Fund Balance $ (1,640,644) Amount reported as change in net assets in the Statement of Activities are different because: Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlay ($37.504,802) exceeded depreciation ($10,238,356) in the current period. 27,266.446 Certain Capital and Joint Venture activities do not use or provide current financial resources but increase net assets. 8,764,421 Governmental funds report proceeds from sales of assets as other financing sources while the Statement of Activities reports only the gain or loss on sale of capital assets (202.974) Debt proceeds are reported as financing sources in governmental fund and thus contribute to the change in fund balances. In the government-wide statements, however, issuing debt increases long-tern liabilities in the statement of net assets and does not affect the statement of activities. (25,506,464) Revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds: Deferred revenue 449,717 Donation of property - Amortization of bond premium 3,138 Investment interest receivable 34.927 487,782 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. 3,102,832 Repayment of the principal of long-term debt consumes the current financial resources of governmental funds but has no effect on the net assets. 479.661 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. 1.136,781 Sorne expenses reported in the Statement of Activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds. Amortization of debt issue costs (3,240) Amortization of prepaid expenses (109,355) Change in accrued interest payable 3,259 Change in net pension obligation 114,735 Change in net other postemployment benefits (653,582) Change in compensated absences payable (536,679) (1,184,862) 12,702.979 The notes to the financial statements are an integral part of this statement. 41 CITY OF AUBURN: 2009 CAFR BASIC FINANCIAL STATEMENTS CITY OF AUBURN, WASHINGTON STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL GENERALFUND FOR THE YEAR ENDED DECEMBER 31, 2009 FINAL VARIANCE WITH ORIGINAL AMENDED FINAL BUDGET BUDGET BUDGET ACTUAL POSITIVE TAXES: PROPERTY RETAIL SALES & USE INTERFUND UTILITY UTILITY EXCISE LICENSES AND PERMITS INTERGOVERNMENTAL CHARGES FOR SERVICES FINES AND FORFEITURES INVESTMENT EARNINGS MISCELLANEOUS EXPENDITURES: CURRENT: GENERAL GOVERNMENT SECURITY OF PERSONS AND PROPERTY PHYSICAL ENVIRONMENT TRANSPORTATION ECONOMIC ENVIRONMENT HEALTH AND HUMAN SERVICES CULTURE AND RECREATION DEBT SERVICE TOTAL EXPENDITURES EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES): SALES OF CAPITAL ASSETS PROCEEDS FROM LONG TERM DEBT INSURANCE RECOVERIES TRANSFERS IN (Note 5) TRANSFERS OUT (Note 5) TOTAL OTHER FINANCING SOURCES AND USES NET CHANGE IN FUND BALANCES FUND BALANCES- BEGINNING FUND BALANCES- ENDING _ $ 9,868,500 $ 9,868,500 $ 10,601,791 $ 733,291 20,155,000 17,096,725 14,727,496 (2,369,229) 3.152,700 3,152,700 3,042.567 (110,133) 6,783,600 6,783,600 7,938,021 1,154,421 946,500 817.420 680,373 (.137,047) 1,380,500 1,126,150 1,326,875 200,725 3776.000 6,116,550 7.670.754 1,554.204 2,009,300 1,784,220 1,709,191 (75,029) 2,033,000 2,072.400 1.911.034 (161,366) 300,000 300,000 169,445 (130,555) 224,200 351,170 495,110 143,940 50,627300 49,469,435 50,272,657 803,222 9,222,900 8,567,255 7,864,410 702,845 26,590,500 26,869.295 25,356,285 1.513,010 3,808,600 3,368,795 3,192,089 176,706 3,304700 3.135.870 2,761 A 13 374.757 2,784,900 2,897,395 2,341,297 556,098 591,900 590,600 527.029 63,571 7,033,800 6,775,640 6,622,546 153,094 100,754 100,754 - - 35,878 35,878 25,000 80,000 114,607 34,607 1,517,000 3,029,500 1.773,957 (1,255.543) (3,575,700) (3,744,515) 166,760 3,911,275 The notes to the financial statements are an integral part of this statement. 42 CITY OF AUBURN: 2009 CAFR BASIC FINANCIAL STATEMENTS 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, 2009 ORIGINAL FINAL AMENDED VARIANCE WITH FINAL BUDGET BUDGET BUDGET ACTUAL POSITIVE (GAAP BASIS) (.GAAP BASIS) RESULTS (NEGATIVE) TAXES: UTILITY BUSINESS INTERGOVERNMENTAL INVESTMENT EARNINGS MISCELLANEOUS EXPENDITURES: CURRENT: TRANSPORTATION DEBT SERVICE PRINCIPAL INTEREST AND OTHER COSTS CAPITAL OUTLAY TOTAL EXPENDITURES EXCESS (DEFICIENCY) OF REVENUES OTHER FINANCING SOURCES (USES): PROCEEDS OF LONG-TERM DEBT TRANSFERS IN (Not-5) TRANSFERS OUT (1vote1) TOTAL OTHER FINANCING SOURCES AND USES NET CHANGE IN FUND BALANCES FUND BALANCES - BEGINNING FUND BALANCES - ENDING 2,107,300 3,223,100 1,165,708 (2,057,392) 20,000 20,000 14,994 (5,006) 640,000 140,000 257,620 117,620 2.767300 3.383100 1.438.322 (1,944778) 6,849,100 7,445,984 4,043,771 3,402,213 35,600 35,600 35,578 22 9.400 9.400 1.456 7,944 1,720,000 1,800,000 921,400 (878,600) 2,072,800 2,273,840 1,524,151 (749,689) - (296.700) (114.142) 182,558 (334,000) (330,744) (311,074) 19,670 The notes to the financial statements are an integral part of this statement. 43 CITY OF AUBURN: 2009 CAFR BASIC FINANCIAL STATEMENTS C 17V fly IT- Apppp- URN * MORE THAN YOU IMAGINED 44 CITY OF AUBURN: 2009 CAFR BASIC FINANCIAL STATEMENTS MAJOR PROPRIETARY FUNDS ENTERPRISE FUNDS The City's enterprise funds are used to account for operations that are financed and operated in a manner similar to private business operations. The goods and services these funds provide to the general public are primarily financed by service charges. Enterprise funds are self-supporting and use the accrual method of accounting. Auburn has five major enterprise funds. The Water Fund This fund accounts for all maintenance, construction, and debt service requirements associated with the water system. The Sanitary Sewer Fund This fund accounts for maintenance, construction, and debt requirements for Auburn's sanitary sewer system. The Storm Drainage Fund This fund accounts for the maintenance, construction and debt service requirements of Auburn's storm drainage system. The Solid Waste Fund Garbage collection services for the City are accounted for in this fund, supported almost entirely by garbage collection fees. Expenses include payment to the City's garbage contractor and other service charges. The Golf Course Fund Accounts for services, maintenance, and operations associated with the Auburn Municipal Golf Course. 45 CITY OF AUBURN: 2009 CAFR BASIC FINANCIAL STATEMENTS CURRENT ASSETS: CASH AND CASH EQUIVALENTS INVESTMENTS RESTRICTED CASH: BONDS PAYMENTS CUSTOMER DEPOSITS OTHER. CUSTOMER. ACCOUNTS OTHER RECEIVABLES DUE FROM OTHER GOVERNMENTAL UNITS INVENTORIES TOTAL CURRENT ASSETS NONCURRENT ASSETS: LONG-TERM CONTRACTS AND NOTES CAPITAL ASSETS: LAND BUILDINGS AND EQUIPMENT IMPROVEMENTS OTHER THAN BUILDINGS CONSTRUCTION IN PROGRESS LESS: ACCUMULATED DEPRECIATION TOTAL CAPITAL ASSETS (NET OF AD) LIABILITIES: CURRENT LIABILITIES: CURRENT PAYABLES CUSTOMER DEPOSITS INTERFUND PAYABLES LOANS PAYABLE-CURRENT EMPLOYEE LEAVE BENEFITS-CURRENT REVENUE BONDS PAYABLE-CURRENT GENERAL OBLIGATION BONDS PAYABLE-CURRENT ACCRUEDINTEREST DEPOSITS CITY OF AUBURN, WASHINGTON STATEMENT OF NET ASSETS PROPRIETARY FUNDS DECEMBER j1, 2001 SANITARY STORM SOLID GOLF 7,112,183 $ 8,901,147 $ 3,902,561 $ 1,131,040 $ 92,801 $ 2,004,773 2,023,437 1,017,813 - - NON-MAJOR TOTAL ENTERPRISE PROPRIETARY 2,037,751 $ 23,177,483 $ 12,126,037 - 5,046,023 - 272,508 - 95,746 - - - 368254 - 35,606 18,471 - - - 69,888 123,965 - 357499 737,890 425,608 181,968 - 1,702,965 - 840,101 1,739,422 733,644 1,053,722 26,907 3,909 4397705 6,510 8,103 14,217 4,521 - - - 26,941 - - - I pvl 2nn 454 - - 1 1L16 Fl54 - aRL 175,128 3 11,831 11,395 206,013 111,851 10,806,101 13,442,843 7,210,924 2272,216 301,676 2,122,943 36,156703 12,272,090 1,050,900 6,642 1,057,442 897,971 1,654,958 5,686,254 - 2,229,636 3,996,178 14464,997 - 2,344,538 1,131,744 297,853 496,618 6583,467 4,588,623 15442843 15,010,649 82,968,802 65,667,532 38,697,313 - 3,023,053 6,628,275 196,984,975 46,591 3,134,552 4,056,688 4,027,852 - - 3,030,937 14250,029 432,238 (34,251 435) (16 590 677) (13 974 561) (297,872) (2.281.376) (6,168,205) (73564 125) (8,785 759) 55,094 428 55 920 245 34.734.711 198,746 9.5-54.781 12,075 808 167 578719 6,703,719 393,169 1921,254 931,383 872,316 46,869 63,338 4228329 698,196 36,606 18,471 - - - - 54,077 5,725 - - - - 59,375 - 59375 - 435,568 236,791 - - - - 672359 - 153,208 72,952 143,232 16,730 39,048 17,976 443,146 91,692 203,500 - 71,500 - - - 275,000 - - - - - 190,000 85,000 275,000 - 100,848 14205 24 246 - - - 139299 - 69,88R 69.888 1321,899 2,263,673 1,170,361 889,046 335,292 236,202 6216,473 695,613 NONCURRENT LIABILITIES: DEFERRED REVENUE 42,200 162,203 597204 - 63315 6,642 871,464 - EMPLOYEE LEAVE BENEFITS 50,635 24,110 47,338 5,529 12,905 5,941 146,458 30,306 LOANS PAYABLE 4452,631 3,572,974 - - - - 8,025805 - REVENUE BONDS PAYABLE 1452223 - 510241 - - - 1962464 - GENERAL OBLIGATION BONDS PAYABLE 3,943171 1,680,940 5,624111 TOTAL OTHER NONCURRENT LIABILITIES 5,997,689 3,759,287 1,154,783 5,529 4,019,391 1,693,423 16,630,102 30,306 TOTAL LIABILITIES NET ASSETS: 7319588 6,022,960 2,325,144 894,575 4,364,683 1,929,625 22846575 725,919 INVESTED IN CAPITAL ASSETS, NET OF RELATED DEBT 48,550,506 52,110,480 34,152,970 198746 5,298,921 10,309,869 150821,492 6,703,719 RESTRICTED FOR DEBT SERVICE 630007 - 221,354 - - - 851361 - RATE STABILIZATION - - 300,000 - - - 300000 - CONSTRUCTION - 737,890 - - 181,968 - 919,858 - UNRESTRICTED 9,400,428 11,542,658 4,946,167 1377641 20,885 1965,799 29253578 11,546,171 TOTAL NET ASSETS $ 58580941 $ 64,391,028 $ 39,620,491 $ 1,576,387 $ 5,501,774 $ 12,275,668 $ 181 946 289 $ 18,249,890 Adjustment to reflect the consolidation of internal service funds related to enterprise funds =92 591 Net assets of business-type activities $ 182238,880 The notes to the financial statements are an integral part of this statement. 46 CITY OF AUBURN: 2009 CAFR BASIC FINANCIAL STATEMENTS OPERATING REVENUES: CHARGES FOR SERVICES INTEREST OTHER OPERATING REVENUE OPERATING EXPENSES: OPERATIONS & MAINTENANCE ADMINISTRATION DEPRECIATI ONIAM ORTIZATI ON OTHER OPERATING EXPENSES NON-OPERATING REVENUE (EXPENSE): INTEREST REVENUE OTHER NON-OPERATING REVENUES GAIN ON SALE OF CAPITAL ASSETS INTEREST EXPENSE OTHER N(_)N-OPERATING EXPENSES CITY OF AUBURN, WASHINGTON STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS PROPRIETARY FUNDS FOR THE YEAR ENDED DECEMBER 31, 2009 $ 8,825,924 $ 14,902,464 $ 6,000,761 $ 9,599,236 $ 1,571,387 :6 1,354,251 $ 42,254,023 $ 9807,914 - - - - - 1,470 1,470 - 102 102 822,38`2 82,586 293,681 8,825,924 14,902,566 6,000,863 9,599,236 1,653,769 1,355,721 42,338,079 10,101,595 3,262 ,764 12,215275 2,186,976 8,618,463 1,066,789 527267 27,877474 6,581, 135 2484 ,844 2,106,258 2.2298,330 704,113 235,169 704,972 8,533,686 1,109, 613 2,104 ,554 1,390,660 1 UG7,,55 20,534 334,025 3 3,1,79 .270,608 1,533 2^28 1,[in'" [iEi6 1,221,015 5" ,2R4 1,67F-'x,556 621:'2 n4'K 4,5 n7:'4'.3 8,855 ,227 16,934,008 6,168,145 11,019,666 1,698,116 1,574,015 46,189,117 9,223, 976 (29 ,303) (2,031,442) (107,282) (1,420,370) (44,347) (218,294) (3,851,038) 877, 619 0 ,079 37,796 611,4 4'_n 3,Ln'_ 10,7,'! 611' 81 4 93 ,286 19,820 1.04 87,696 15,347 2485,7159 3,;49,611 12, 683 - - - - 4,626 3,095 7,721 (12, 790) (114 ,306) (21,255) (25,120) - (211,642) (92,739) (465,062) - CAF'IT4L C(_)NTF,1P1_ITICiNS 649,742 592,:'76 7571,141 - - - 1,'792,259 61445 TRAIM FERS IN (I'lote 5) - _9,425 - - `1,070 40,1700 185 495 204,100 TRANr FERS OUT(Nnte 5) (166,100) (50,0nn) (I-,,i nnn) (',54,1711-1) (RR900) CHANGE IN NET ASSETS 520,716 (1,266,154) 446,114 (1,326,186) (178,928) 2,228,579 430,141 1,136,781 TOTAL NET ASSETS BEGINNING OF YEAR 58,060,225 65,657,182 39,174,:3" 2,896,573 5,680,702 10,047,089 181,,16,148 17,113,109 TOTAL NET ASSETS END OF YEAR $ 58,586,941 $ 64,391,028 $ 39,626,491 $ 1,576,387 $ 5,501,774 $ 12,275,668 $ 181,946,289 $ 18,249,890 Change in net assets from this statement 430,141 Adjustmentto reflectthe consolidation of internal service fund activities related to enterprise funds 388,840 Change in net assets of business-type activities 818,981 The notes to the financial statements are an integral part of this statement. 47 CITY OF AUBURN: 2009 CAFR BASIC FINANCIAL STATEMENTS CITY OFAUBURN, WASHINGTON STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE FISCALYEAR ENDED DECEMBER 31. 2009 P.1Up I Irt GOVERNMENT NON-MAJOR ACTIVITIES SANITARY STORM SOLID GOLF ENTERPRISE INTERNAL WATER SEWER DRAINAGE WASTE COURSE FUND TOTAL SERVICE FUNDS CASH FLOWS FROM OPERATING ACTIVITIES: CASH RECEIVED FROM USERS $ 8,756,662 $ 14,799,204 $ 4,968,841 $ 9,719,165 $ 1,626,861 $ 1,346,353 $ 41,217,086 $ 10,095,670 CASH PAID TO SUPPLIERS (2,856,212) (10,802,806) (1,220,900) (8,800,692) (554,256) (676,510) (24,911,376) (4,394,658) CASH PAID FOR TAXES (1,003,065) (1,221,815) (535,284) (1,676,556) (62,132) (8,497) (4507,350) (5557) CASH PAID FOR INVENTORY 67,524 709 (3,068) - - (2,940) 62,225 32,084 CASH PAID TO EMPLOYEES (2,910,578) (2,002,983) (2465,561) (538,372) (753,353) !546,7271 (9,217,574) (3,248,355) OTHER CASH RECEIVED (P-1 Dl NET CASH PROVIDED (USED) BY OPERATIN G ACTIVITIES 2.054.330 77231n 744.028 (1.296456) 6,222 263342 111-678 6,222 2649.233 2479.184 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: IN TERFUN D LOAN PAYABLE - - - - (37,500) - (37500) - OPERATING GRANT RECEIVED 6,338 19820 - 55,266 - - 814^_4 - TPA,hISFEPS IIV - 89425 - - 54,070 40,000 186495 224,100 TRA,NSFEPE'OUT NET CASH PROVIDED (USED) BY NON- CAPITAL FINANCING ACTIVITIES (155'1nn1 159 762 (50,0001 59 45 (1.TA ,DODJ 138 000 55 266 16 570 40 000 1'54 inn, 126 82 '_Annn1 116 100 , ( ) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: 2 , ( ) , , , ( 6 ) , PPOCEEDS FROM SALE OF EQUIPMENT 8,739 - - - 510 3.095 12,345 30406 PURCHASE OF CAPITAL ASSETS (2,488,360) (3,308868) (4,457,976) - (144,736) (2,688,758) (13088697) (2,520477) CONTRIBUTED CAPITAL 401,788 134,545 324,301 - 15,347 - 875,981 3,300 CAPITAL GRANTS - - 1,047,703 - - - 1,047,703 - PROCEEDS FROM OTHER GOVERNMENTS - 22,500 - - - 2,485,259 2,507759 4,779 PROCEEDS FROM INSURANCE SETTLEMENT 185 - - - - - 185 4,605 PREMIUM& BOND ISSUANCE COSTS 10,505 - 13,877 - 4,666 9,774 38821 - PRINCIPAL PAYNIENTON DEBT (1,342,695) (236,792) (411,961) - (180,000) (65,000) (2,236,449) - INTEEESTPAYMENT ON DEBT (152,284) (20,231) (44,295) 358 (216,404) (93,233) (526,089) - OTHERCASH RECEIVED (P.AID) NET CASH PROVIDED (USED) FOR CAPITAL AND RELATED FINANCING ACTIVITIES (3 562 123) (3 408 846) (3 528 352) 358 (520 617) 500 (348 361) 500 (11 367 941) (2 477 386) CASH FLOW FROM INVESTING ACTIVITIES: , , , , , , , , , , , , PROCEEDS FROM SALE OF INVESTMENTS 3,112,826 2,003,750 - - - - 5,116,5 i6 - PURCHA.SE OF INESTMEHTS (2,000,0101 (2,100,0001 - - - - A 000,0001 - IHTERESTRECEIED NET CASH PROVIDED (USED) IN INVESTING ACTIVITIES 126 -0 1,239,209 137,210 140,960 n"",167 95,167 1'-1I'd 12,488 5,010 3,018 ill ER 10,758 335,024 1,501,600 00,923 88,923 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS !428,345) (2436,331) (2,827,15:1 (1,228,343) (237,687) (185,925) (7,343,789) 206,821 CASH AND CASH EQUIVALENTS-BEGINNING OF YEAR 8,206,141 12,093,839 7,251,071 2,359,383 512 455 2,293,564 32,716453 11,919,217 CASH AND CASH EQUIVALENTS-END OF YEAR $ 7,777,796 $ 9,657,508 $ 4,423,914 $ 1,131,040 $ 274,769 $ 2,107,639 $ 25,372,665 $ 12,126,037 CASH AT END OF YEAR CONSISTS OF CASH AND CASH EQUIVALENTS $ 7,112,183 $ 8,901,147 5 3,902,56'1 $ 1,111,040 5 66431 $ 2037,761 $ 23,151,112 $ 12,126,038 RESTRICTED CASH-BOND PAYMENTS 5.;1,007 737,890 521,554 - -6070 - 1,915,621 - RESTRICTEDCASH-CUSTOKIER DEPOSITS TOTAL CASH 2.9,505 $ 7,777,796 $ 18471 9,657,508 $ 4A 14 '1 1,131,040 '1 181,908 274,769 $ 2,107,,-P 1 305,933 25372`,665 $ 12,126,038 The notes to the financial statements are an integral part of this statement. 48 CITY OF AUBURN: 2009 CAFR BASIC FINANCIAL STATEMENTS CITY OF AUBURN, WASHINGTON STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FnP THE H HGA,LYEAR ENDED DECEPdIEER ?1 2nn,2 Pane 2 nt? GOVERNMENT NON-MAJOR ACTIVITIES SANITARY STORM SOLID GOLF ENTERPRISE INTERNAL WATER SEWER DRAINAGE WASTE COURSE FUND TOTAL SERVICE FUNDS RECONCILIATION OF NET OPERATING INCOME TO NEW CASH PROVIDED BY OPERATING ACTIVITIES ADJUSTMENTS TO RECONCILE OPERATING INCOME TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES: DEPRECIATION 2,104,554 1,390,660 1,087,555 20,534 334,026 333,278 5,270,607 1,533,229 ASSET (INCREASES) DECREASES ACCOUNTS RECEIVABLE (71,124) (103,362) (1,032,022) 119929 (26,908) 0 (1,113,486) (21,192) INVENTORY 67,524 709 (3,068) - - (2940) 62,225 32,084 LIABILITY (INCREASES) DECREASES: ACCOUNTS&VOUCHERS PAYABLE (84,792) 1,491,782 712,447 (24,122) (4,866) (418) 2,090,030 (10,440) DEPOSITS PAYABLE 1,861 0 - - - (9,369) (7,508) 5,725 WA.GES& BENEFITS PAYABLE 281 4,728 48 3,183 3,441 895 12,576 43473 COMPENSATED ABSENCES PAYABLE 65,329 19,235 86,350 4,391 (4,226) 8,526 179,605 18,687 DEFERRED REVENUE 6,222 6,222 TOTAL ADJUSTMENTS 2,083,632 2,803,753 851,310 123,914 307,689 329,973 6,500,270 1,601,565 NET CASH PROVIDED (USED) BY OPERATING ACTIVITI ES 2,054,330 772,310 744,028 (1,296,456) 263,342 111,678 2,649,233 2,479,184 SCHEDULE OF NONCASH INVESTING. CAPITAL AND FINANCING ACTIVITIES CA.PITA.L ASSETS. ACQUIRED BY CONTRIBUTED CAPITAL $ 325,978 $ INCREASE (DECREASE) IN FAIR VALUE OF INVESTMENT 4,773 457,831 $ 425,841 $ 23,438 (34,688) $ 1,209,650 $ 61,445 (6,477) - The notes to the financial statements are an integral part of this statement. 49 CITY OF AUBURN: 2009 CAFR BASIC FINANCIAL STATEMENTS C 17V fly IT- Apppp- URN * MORE THAN YOU IMAGINED 50 CITY OF AUBURN: 2009 CAFR BASIC FINANCIAL STATEMENTS FIDUCIARY FUNDS Fiduciary funds are used to account for assets held by the City of Auburn as a trustee or agent for various individuals, private organizations, and other governmental units. The Fire Relief and Pension Fund is accounted for on an accrual basis. The agency fund is custodial in nature; therefore, no annual budget is adopted. TRUSTFUNDS The Fire Relief and Pension Fund This fund accounts for the payment of administrative costs and benefits for retired firefighters (and beneficiaries) who were employed prior to March 1, 1970. Primary revenue sources are general property tax allocations; fire insurance premium tax, and investment interest, in accordance with actuarial recommendations. AGENCY FUNDS The Agency Fund This fund accounts for the funds over which the City is strictly a short-term custo- dian. 51 CITY OF AUBURN: 2009 CAFR BASIC FINANCIAL STATEMENTS CITY OF AUBURN, WASHINGTON STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS DECEMBER 31, 2009 FIRE RELIEF PENSION AGENCY TRUSTFUND FUND ASSETS: CASH AND CASH EQUIVALENTS $ 1,752,435 $ 1,679,840 INVESTMENTS 1,080,715 - RECEIVABLES: CUSTOMER ACCOUNTS - 2,621 INTEREST 735 - DUE FROM OTHER GOVERNMENTAL UNITS - - TOTAL ASSETS $ 2,833,885 $ 1,682,461 LIABILITIES: CURRENT PAYABLES TOTAL LIABILITIES NET ASSETS: HELD IN TRUST FOR PENSION BENEFITS $ 5,243 $ 1,682,461 5,243 1,682,461 The notes to the financial statements are an integral part of this statement. 52 CITY OF AUBURN: 2009 CAFR BASIC FINANCIAL STATEMENTS CITY OF AUBURN, WASHINGTON STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS FIDUCIARY FUNDS FOR THE YEAR ENDED DECEMBER 31, 2009 INVESTMENT EARNINGS 11,455 DEDUCTIONS: BENEFIT PAYMENTS 160,811 PROFESSIONAL SERVICES 7,350 ADMINISTRATIVE EXPENSES TOTAL DEDUCTIONS 13,418 181,579 NET ASSETS- BEGINNING NET ASSETS - ENDING 2,940.766 $ 2,828,642 The notes to the financial statements are an integral part of this statement. 53 FIRE INSURANCE PREMIUMS-TRANSFERRED FROM GENERAL FUND $ 58,000 CITY OF AUBURN: 2009 CAFR BASIC FINANCIAL STATEMENTS C 17V fly IT- Apppp- URN * MORE THAN YOU IMAGINED 54 CITY OF AUBURN: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS City of Auburn NOTES TO THE FINANCIAL STATEMENTS December 31, 2009 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ........56 A. REPORTING ENTITY .........56 B. BASIC FINANCIAL STATEMENTS 56 C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING, AND BASIS OF PRESENTATION 57 D. BUDGET AND BUDGETARY ACCOUNTING 60 E. ASSETS, LIABILITIES, AND FUND EQUITY 61 1. DEPOSITS AND INVESTMENTS 61 2. RECEIVABLES .........62 3. INTERFUND RECEIVABLES AND PAYABLES 62 4. AMOUNTS DUE FROM OTHER GOVERNMENTAL UNITS 62 5. INVENTORIES 62 6. RESTRICTED ASSETS 62 7. INTERFUND TRANSACTIONS 63 8. CAPITAL ASSETS 63 9. DEFERRED CREDITS/CHARGES 63 10. COMPENSATED ABSENCES 64 11. DEFERRED REVENUES 64 12. RESERVATIONS AND DESIGNATIONS OF FUND EQUITY 64 F. REVENUES, EXPENDITURES AND EXPENSES 64 G. ESTIMATES .........65 NOTE 2 - STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY 65 NOTE 3 - DEPOSITS AND INVESTMENTS 66 NOTE 4 - PROPERTY TAXES 68 NOTE 5 - INTERFUND ACTIVITY 69 NOTE 6 - DUE FROM OTHER GOVERNMENTAL UNITS 71 NOTE 7 - CAPITAL ASSETS AND DEPRECIATION 73 NOTE 8 - CAPITAL LEASE OBLIGATION 74 NOTE 9 - LONG-TERM DEBT 75 NOTE 10 - PENSION PLANS 78 NOTE 11 -OTHER POST EMPLOYMENT BENEFITS 87 NOTE 12 - ASSOCIATION OF WASHINGTON CITIES EMPLOYEE BENEFIT TRUST 89 NOTE 13 -CONSTRUCTION COMMITMENTS 89 NOTE 14 -CEMETERY ENDOWED CARE FUND 90 NOTE 15 - JOINT VENTURES / RELATED PARTY 90 NOTE 16 - JOINTLY GOVERNED ORGANIZATION / RELATED PARTY 93 NOTE 17 -CONTINGENCIES AND LITIGATION 94 NOTE 18 - RISK MANAGEMENT & INSURANCE 94 NOTE 19 - SUBSEQUENT EVENT 95 55 CITY OF AUBURN: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The City of Auburn, King County, Washington, was incorporated in 1891. It operates under the laws of the State of Washington applicable to a Non-Charter Code City under a Mayor/Council form of government. A full-time mayor and seven part-time council members administer Auburn, all elected at-large to four-year terms. The City provides a range of municipal services authorized by state law, including water services, sanitary sewer collection, solid waste collection, storm drainage, a general aviation airport, a municipal cemetery and a municipal golf course. The accounting and reporting policies of the City of Auburn, which conform to Generally Accepted Accounting Principles (GAAP) for governments, are regulated by the Washington State Auditor's Office. The City's significant accounting policies are described in the following notes. A. REPORTING ENTITY 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 Statement No. 34, the Valley Communications Center and South Correctional Entity Facility (SCORE) are included in the accompanying government-wide statement of net assets as joint ventures. (Please refer to Notes 9 and 15). Jointly Governed Organizations - The cities of Auburn, Algona and Pacific formed the Valley Regional Fire Authority (VRFA) effective January 1, 2007. The VRFA is a separate municipal corporation of the State of Washington, organized as a regional fire protection service authority under RCW 52.26. The VRFA is not financially accountable to the member cities, none of the participating cities has an ongoing financial interest in the VRFA, and the VRFA is not financially dependent upon any member city. The VRFA imposes its own property tax levy and fire benefit charge. The government-wide financial statements consist of the government-wide statement of net assets and the government-wide statement of activities. B. BASIC FINANCIAL STATEMENTS The City's basic financial statements consist of government-wide financial statements and fund financial statements. The government-wide financial statements, which include the statement of net assets and the statement of activities, summarize the entire operation of the City. The governmental fund financial statements, which include balance sheets, statements of revenues, expenditures and changes in fund balances, and budget and actual statements, provide a more detailed level of reporting. The proprietary fund financial statements, which include statement of net assets, statement of revenues, expenses, and changes of net assets and statements of cash flows provide a more detailed level of reporting. The government-wide financial statements report information on all of the non-fiduciary activities of the City. For the most part, the effect of interfund activity has been eliminated from these statements. Because governmental activities are normally supported by taxes and intergovernmental revenue, while business-type activities are generally supported through user fees and charges, governmental activities are reported separately from business-type activities on all government-wide financial statements. 56 CITY OF AUBURN: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS The statement of activities demonstrates the degree to which the direct expenses of various functions and activities of the City are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or activity. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services or privileges provided by a function or activity, and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or activity. Taxes and other items that are not properly included among function or activity revenues are instead reported as general revenues. The City does not allocate indirect expenses to functions in the statement of activities. Separate financial statements are included for government funds, proprietary funds, and fiduciary funds, even though fiduciary funds are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported in separate columns in the fund financial statements. C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING, AND BASIS OF PRESENTATION The accounts of the City are organized on the basis of funds, each of which is considered a separate accounting entity. Each fund is accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenue, and expenditures or expenses, as appropriate. The City resources are allocated to, and accounted for in, individual funds according to the purpose for which they are spent and how they are controlled. The basis of accounting refers to the timing of when revenues and expenditures or expenses are recognized in the accounts and reported in the financial statements. The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary and pension trust fund financial statements. Interfund services provided and used are not eliminated in the process of consolidation. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. The modified accrual basis of accounting is followed in all governmental and permanent funds of the City. Under the modified accrual basis of accounting, revenues are recognized when measurable and available. Revenues are generally considered available if they are collected within the current period or soon enough thereafter (30 days) to pay current liabilities. For derived tax revenues, such as sales tax and utility business and occupation taxes, revenues are recognized in the period when the underlying exchange has occurred. For imposed non-exchange taxes, such as property taxes, revenues are recognized when the use of resources is permitted, or when resources are available. Grant revenue is recognized in the period in which the expenditure occurs and the eligibility requirements have been met. Non-exchange transactions, such as contributions, are recognized when the donation eligibility requirements have been satisfied. Those specific major revenue sources accrued are: Property Taxes - King County and Pierce County collect property taxes and remit to the City daily or monthly. December collections by each County, remitted in January, are recognized as revenues in current year even though received in the subsequent year since they are considered to be measurable and available. Property taxes remaining 57 CITY OF AUBURN: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS uncollected at year-end are reported as "deferred 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, grant revenue is recognized when the expenditure is incurred. Under the modified accrual basis, expenditures are recorded when the fund liability is incurred, except for the un-matured interest and principal on general long-term debt, which is recognized when due, and for compensated absences which are recorded as expenditures when liquidated from expendable available fund resources. Purchases of capital assets from governmental funds are reported as expenditures during the year incurred and the asset is capitalized and reported on the government-wide statement of net assets. Long-term liabilities, including compensated absences not currently due and payable, are also reported on the government-wide statement of net assets. The accrual basis of accounting is followed in all proprietary, agency, and pension trust funds. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recorded when incurred. The three broad fund categories and nine fund types presented in this report are described below: 1. GOVERNMENTAL FUND TYPES All governmental funds are accounted for on a spending or "financial flow" measurement focus. This means that only current assets and current liabilities generally are included on their balance sheets. Their reported fund balance (net current assets) is considered a measure of "available spendable resources". Governmental fund operating statements focus on measuring cash flows rather than net income; they present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. a. General fund - This fund is used to account for all financial resources and transactions of the City not accounted for in another fund, as required. The general fund is always considered a major fund. b. Special Revenue funds - These funds are used to account for the proceeds of specific revenue sources (other than major capital projects) that are legally restricted to expenditures for specified purposes. One special revenue fund is considered major: the arterial street fund. This fund is supported by the State of Washington's one-half cent gas tax and is used for major street construction c. Debt Service funds - These funds account for the accumulation of resources for, and the payment of, general long-term and special assessment debt principal, interest, and related costs. These funds also include the LID guarantee fund which provides financial security for outstanding LID bonds. d. Capital Projects funds - These funds are used to account for financial resources to be used for the acquisition or construction of major capital 58 CITY OF AUBURN: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS facilities other than those financed by proprietary funds. One capital project fund is considered major: the capital improvement projects fund. This fund accounts for major capital acquisitions, and street and parks construction projects. e. Permanent funds - These funds are used to account for resources that are legally restricted to the extent that only earnings, and not principal, may be used for purposes of supporting a specific City program. 2. PROPRIETARY FUND TYPES Financial statements for proprietary funds use the economic resources measurement focus and the accrual basis of accounting. This means that all assets and all liabilities (whether current or non-current) associated with their activity are included on their Statement of Net Assets. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recorded when incurred. The proprietary fund 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. Pursuant to Statement No. 20 of the Governmental Accounting Standards Board (GASB), Accounting and Financial Reporting for Proprietary Funds and Other Governmental Entities That Use Proprietary Fund Accounting, the City has chosen to apply all applicable GASB pronouncements as well as the following pronouncements issued on or before November 30, 1989, unless those pronouncements conflict with or contradict GASB pronouncements: FASB Statements and Interpretations, APB Opinion, and ARBs. a. Enterprise funds - These funds are used to account for services to the general public where all or most of the costs, including depreciation, are to be financed or recovered from users of such services. Five enterprise funds are considered major funds. Utilities provided to residents are accounted for in the water fund, sanitary sewer fund, storm drainage fund and the solid waste fund. The golf course fund is used to account for business operations at the City's municipal golf course. b. Internal Service funds -These funds are used to account for the financing of goods and services provided to other funds, departments, or governments on a cost reimbursement basis. The City uses internal service funds to account for its fleet of vehicles, its maintenance and operation of facilities, the City- wide provision of computer hardware and software services, and its insurance premiums. 59 CITY OF AUBURN: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS 3. FIDUCIARY FUND TYPES Fiduciary funds are used to account for assets held by the City in a trustee capacity or as an agent for individuals, private organizations, other governments, and/or other funds. These include a Fire Relief and Pension Trust Fund and Agency Fund. Each fiduciary fund is classified for accounting measurement purposes as either a governmental fund or a proprietary fund. The Fire Relief and Pension Trust Fund is accounted for on the accrual basis in essentially the same manner as proprietary funds since capital management is critical. Based on actuarial recommendations, there are no employee or employer contributions to the Fire Relief and Pension Plan. Pension benefits are recognized when due; plan administration costs are also recognized when incurred in this fund. The Agency Fund is custodial in nature (assets equal liabilities) and does not involve a measurement of results of operations. D. BUDGET AND BUDGETARY ACCOUNTING The City of Auburn budgets in accordance with the Revised Code of Washington (RCW) 35A.33 for the general and special revenue funds. For governmental funds, there are no substantial differences between the budgetary basis and generally accepted accounting principles. Budgetary accounts are integrated in fund ledgers for all budgeted funds, but the financial statements include budgetary comparisons for 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: 1. Sixty days prior to each odd numbered fiscal year, the Mayor submits to the City Council a preliminary budget for the biennium commencing the following January 15t. The operating budget includes proposed expenditures and funding sources. 2. Public hearings are conducted at the Auburn City Council Meetings to obtain taxpayer comments. 3. Prior to December 3151, the budget is legally enacted through passage of an ordinance. 60 CITY OF AUBURN: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS 4. The final operating budget as adopted is published and distributed after adoption. Copies of the budget are made available to the public. The following represents the original budgeted amounts and all supplemental appropriations. ORIGINAL AND SUPPLEMENTAL APPROPRIATIONS Original Final Budget Revisions Budget Governmental funds General fund $ 55,747,000 $ 576,450 $ 56,323,450 Total governmental funds 55,747,000 576,450 56,323,450 Special revenue funds: Local street 2,200,000 220,150 2,420.150 Arterial street Hotel/motel tax Arterial street preservation Drug forfeiture fund Local law enforcement block grant Housing and community development Recreation trails Business improvement area Cumulative reserve Mitigation fees Total special revenue funds Total budgeted funds 6,894,100 893,584 7, 787,684 153,000 32,000 185,000 1,500,000 319,000 1, 819,000 355,700 38,860 394,560 14,400 - 14,400 600,900 (880j 600,020 7,800 7,800 53,000 53,000 E. ASSETS, LIABILITIES, AND FUND EQUITY 1. DEPOSITS AND INVESTMENTS It is the City's policy to invest all temporary cash surplus. At December 31, 2009, the Washington State Local Government Investment Pool (LGIP) was holding $75,933,234 in short-term investments. This amount is classified on the balance sheet as cash and cash equivalents. The interest on these investments is prorated to the various funds based upon ownership of investments. For purposes of the Statement of Cash Flows, cash and cash equivalents includes cash on deposit with financial institutions in both demand and time deposit accounts, and amounts invested in the Local Government Investment Pool, administered by the State Treasurer's Office because it is operated in a manner consistent with a Securities and Exchange Commission's Rule 2a-7of the Investment Company Act of 1940. The State Finance Committee is the administrator of the statute that created the pool and adopts appropriate rules. The State Treasurer's Office is responsible for establishing the investment policy for the pool and reviews it annually. Any proposed changes are reviewed by the LGIP Advisory Committee. The terms of the policy are designed to ensure the safety and liquidity of the funds deposited in the LGIP. The City, by state law, is authorized to purchase certificates of deposit issued by Washington State depositories that participate in Washington Public Deposit Protection Commission (WPDPC), U.S. Treasury and Agency securities, banker's acceptances, and repurchase agreements. The City purchases repurchase 61 CITY OF AUBURN: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS agreements only from institutions that use authorized securities for collateral. The City of Auburn also has signed a "master repurchase agreement" with its primary bank, Key Bank. For purposes of the statement of cash flows, all proprietary fund types and similar trust funds consider all highly liquid investments (including restricted assets) with maturity of three months or less when purchased to be cash equivalents. Investments are recorded at fair value. Adjustments are made to cost for investments amortized over the period to maturity in accordance with GASB Statement No. 31. The investment in the state investment pool is valued at the pool's share price. 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 deferred, uncollected assessments, which have been levied, but are not due within one year. Other receivables include utility taxes due from private organizations and customer accounts receivable, which consist of amounts owed from private individuals or organizations for goods and services, including amounts owed for which billings have not been prepared. Notes and contracts receivable consist of amounts owed on open accounts from private individuals or organizations for goods and services rendered. 3. INTERFUND RECEIVABLES AND PAYABLES These accounts include all interfund receivables and payables. A separate schedule of interfund activity is furnished in Note 5. 4. AMOUNTS DUE FROM OTHER GOVERNMENTAL UNITS This account includes amounts due from other governments for grants, entitlements and charges for services. A schedule by fund of amounts due from other governmental units is presented in Note 6. 5. INVENTORIES Inventories in the enterprise and internal service funds are valued at cost using the weighted average costing method. Governmental fund types recognize the cost of inventory items as expenditures when purchased. In governmental funds, materials and supplies remaining at year-end are immaterial and not included in inventory. 6. RESTRICTED ASSETS 62 CITY OF AUBURN: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS There are three types of restricted assets: customer deposits, proceeds of revenue bonds issued by City utilities that are restricted by applicable bond ordinances to pay bond and construction costs, and funds contributed by the Muckleshoot Indian Tribe that have been restricted for use in certain construction projects. 7. INTERFUND TRANSACTIONS During the course of normal operations, the City has numerous transactions between City funds. Interfund services provided and used, such as buying goods and services, are recorded as revenues and expenditures. Internal service fund billings are recorded as revenues in the equipment rental fund and as expenditures in the paying fund. Transfers between funds are included as "other financing sources or uses". 8. CAPITAL ASSETS Capital assets are recorded at historical cost when known or at estimated historical cost when actual costs are not known. Infrastructure, such as roads, bridges and water mains, is reported in the applicable government or business-type activities columns in the government-wide statement of net assets. All infrastructure costs have been calculated and are reported. Government-donated capital assets are stated at their market value on the date donated. Major outlays for capital assets and improvements are capitalized as projects are constructed. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized. Capital assets of enterprise and internal service funds are recorded at cost. The capital assets of the airport are carried at cost and include those acquired with capital contributed by the Federal Government. Capital improvements financed by special assessments that provide capital assets to a government's proprietary funds are capitalized on the fund's balance sheet and are offset by equity. Capital assets of all funds are depreciated, and are calculated on the straight-line method using estimated lives as follows: Asset Capitalization Threshold Depreciation Method Estimated Useful Life Building $5,000 Straight-line 20 - 50 years Other Improvements $5,000 Straight-line 10 - 50 years Equipment/Machinery $5,000 Straight-line 2 - 20 years Infrastructure $5,000 Straight-line 25 - 50 years Utility Plant $5,000 Straight-Line 25 - 50 years At the inception of capital leases at the government fund reporting level, the net present value of future minimum lease payments allocable to the capital asset is reflected as expenditures and an "other financing source" of an equal amount. 9. DEFERRED CREDITS/CHARGES Deferred charges and credits include the premium, discount and issuance costs of revenue bonds that are amortized over the life of the bond issue. Deferred credits and charges also include undistributed court receipts. 63 CITY OF AUBURN: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS 10. COMPENSATED ABSENCES City employees accrue vacation leave at a variable rate based on years of service. In general, employees are allowed to accumulate vacation leave up to what would be earned in two years. Unaffiliated employees accrue sick leave at the rate of eight hours per month up to 960 hours. Sick leave accumulations over 960 hours at year-end are paid at 25%. Sick leave is not paid upon termination except in some instances upon separation in good standing, where employees hired before 12/31/1984 can be reimbursed at their current rate for unused sick leave up to a maximum of 960 hours, at a rate based on years of service. The City's union contracts have varied sick leave accruals and payout options. In general, non-exempt employees can accrue up to 80 hours of compensatory time. The City reports compensated absences as liabilities in the government-wide statement of net assets and in proprietary funds. Vacation, compensatory time, and sick leave are calculated separately for each employee using the rules described above. 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. 11. DEFERRED REVENUES This account reflects the amounts of taxes and other long-term receivables for which the revenue recognition criteria have not been met. It also reflects prepayments on accounts and grants received in advance. 12. RESERVATIONS AND DESIGNATIONS OF FUND EQUITY In governmental funds, reserves are used to indicate a portion of fund balance that is not appropriable for expenditure or is legally segregated, and designations are used to indicate tentative managerial plans for financial resource utilization in a future period. In proprietary funds, net assets are generally restricted in connection with restricted assets or for legal segregation. These restrictions are identified on the statement of net assets of each fund type. F. REVENUES, EXPENDITURES AND EXPENSES Under the modified accrual basis of accounting: Charges for services, interest on investments, and rents generally are considered measurable and available when earned in governmental funds. Taxes and federal or state entitlements or shared revenues that have been collected but not remitted by an intermediary collection agency to the City are considered measurable and available. 64 CITY OF AUBURN: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS Special assessments are considered measurable and available when they become due. Grants are considered measurable and available to the extent that expenditures have been made. Other intergovernmental revenues are considered measurable and available when earned. Interfund revenues for goods and services are considered measurable and available when earned. Proceeds from sale or loss of capital assets are recognized as other financing sources. Revenues from taxpayer-assessed taxes (i.e., sales tax), net of estimated refunds, are recognized when measurable and available to finance expenditures of the current period. All other revenues are either not measurable or considered not available until collected. Expenditures are generally recognized when incurred, except for principal and interest on general long-term debt, which are reported as expenditures when paid, and compensated absences, which are reported as expenditures when liquidated from expendable available financial resources. Under the accrual basis of accounting: Revenues are recognized when earned and expenses are recognized when incurred. Contributions of capital in proprietary fund financial statements arise from internal and external contributions of capital assets or from grants or outside contributions of resources restricted to capital acquisition and construction. Transfers between government and business-type activities on the government-wide statement of activities are reported as general revenues. Transfers between funds reported in the governmental activities column are eliminated, as are transfers between funds reported in the business-type activities column. G. ESTIMATES The preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates. 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. 65 CITY OF AUBURN: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS NOTE 3 - DEPOSITS AND INVESTMENTS At December 31, 2009, the carrying amount of the City's cash demand deposits with Key Bank totaled $2,843,373 while the bank balance was $3,418,166. In addition, there was $10,000 in the Drug Forfeiture Fund to be used for enforcement purposes, and $6,900 in various petty cash and cashier change funds. The Federal Deposit Insurance Corporation (FDIC) insures the City's deposits up to $250,000. The Washington Public Deposit Protection Commission (WPDPC) (established under Chapter 39.58 of the Revised Code of Washington) constitutes a multiple financial institution collateral pool. Pledged securities under the WPDPC collateral pool are held by the WPDPC's agent in the name of the collateral pool. As required by State law, all investments of the City's funds are obligations of the U.S. Government, or deposits with Washington State banks that participate in the WPDPC. Pension and permanent funds are not subject to these limitations. All temporary investments are stated at cost. Other investments are shown on the balance sheet at fair value. Investments that were not at par value (cost) as of December 31, 2009 are reported at fair value. The fair value of the position in the state investment pool is the same as the value of shares held by the City in the pool at amortized cost because it is operated in a manner consistent with the Securities and Exchange Commission's Rule 2a-7 of the Investment Company Act of 1940. During 2009, the net decrease in the fair value of investments being held for more than one year is $45,534 at year-end. As of December 31, 2009, the City had the following investments and maturities SCHEDULE OF INVESTMENTS BY MATURITIES AS OF DECEMBER 31. 2009 Investment maturities Fair Less than 1 to 2 2 to 3 Greater than Investment Type Value 1 year years years 3 years State investment pool $ 75.933,234 $ 75.933.234 $ $ $ - US Treasuries 86,652 - 86,652 US Agencies 10,031.648 1.017,813 2,023.438 6,990,398 - $ 86,051,534 $ 76,951,047 $ 2,023,438 $ 6,990,398 $ 86,652 Reconciliation to government- wide statement of net assets: Total investments above $ 86,051,534 Plus: cash in checking and petty cash 2,918,301 Less: cash investments in fiduciary funds (4,512,990) Total cash and investments, government- wide statem ent of net assets $ 84.456,845 66 CITY OF AUBURN: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS Reconciliation of Cash and Investments Government-Wide Statement of Net Assets As of December 31. 2009 Activities Activities Total Cash and Cash Equivalents $ 37,853,416 $ 23,177,483 $ 61,030,899 Cash with Outside Agencies - - - Investments 3,991,562 5,046,023 9,037,585 Temporarily Restricted: Cash and Cash Equivalents 10,993,821 2,195,184 13,189,005 Permanently Restricted: Cash and Cash Equivalents 1,199, 356 - 1,199,356 $ 54,038,155 $ 30,418,690 $ 84,456,845 Interest Rate Risk Interest rate risk is the risk that changes in interest rates of debt investments will adversely affect the fair value of an investment. As a means of limiting its exposure to fair value losses arising from rising interest rates, the City's investment policy limits the maximum maturity of an investment to not greater than three years, unless an investment is matched to an anticipated future cash flow. The segmented time distribution presented in the schedule of investments by maturity above indicates how the City has managed its interest rate risk. Credit Risk Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. State law and the City's investment policy limits the instruments in which the City may invest. These include: 1. United States bonds. 2. United States certificates of indebtedness. 3. Bonds or warrants of the State of Washington. 4. General obligation or utility revenue bonds or warrants of its own or of any other city or town in the State. 5. Its own bonds or warrants of a local improvement district which are within the protection of the local improvement guaranty fund. 6. Savings or time accounts in designated public depositories. 7. Certificates, notes or bonds of United States agencies, or corporations wholly owned by the United States. 8. Repurchase agreements. 9. Banker's acceptances. 10. Federal Home Loan Bank notes and bonds, Federal Land Bank bonds, Federal National Mortgage Association notes, debentures and guaranteed certificates of participation, or obligations of any other government sponsored corporation whose obligations are or may be eligible as collateral for advances to member banks as determined by the Board of Governors of the Federal Reserve System or any portion thereof in investment deposits as defined in RCW 39.8.010 secured by collateral in accordance with RCW 39.58. 11. Interim financing warrants of local improvement districts. 12. State Local Government Investment Pool. As of December 31, 2009, the City had investments in a limited number of investment instruments as follows: • Federal Home Loan Bank bonds • Federal Home Loan Mortgage Corporation bonds • U.S. Treasuries 67 CITY OF AUBURN: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS • State Local Government Investment Pool With the exception of the State Local Government Investment Pool, which is not rated, all of the investments above carried a rating of AAA by Standard & Poor's rating service at December 31, 2009. Concentration of Credit Risk Concentration of credit risk is the risk of loss attributed to the magnitude of an investment in a single issuer. The City diversifies its investments by security type and institution. The investment policy states: "With the exception of US Treasury securities and the State Investment Pool, no more than 20% of the City's total investment portfolio will be invested in a single security type or with a single financial institution". Other information Effective 2002, the City has established arrangements with Bank of New York for safekeeping of all investments. Below is a schedule of investments by fund type: SCHEDULE OF INVESTMENTS BY FUND CATEGORY AND INVESTMENT TYPE AS OF DECEMBER 31, 2009 State Investment U.S. Pool Securities Total General Fund $ - $ 2.990.938 $ 2,990.938 Capital Project Funds - 1,000.625 1,000.625 Enterprise Funds - 5,046,023 5,046.023 Fiduciary Funds - 1,080,715 1,080,715 Treasurer's Residual Funds 75,933.234 - 75,933.234 Total $ 75,933.234 $ 10,118.300 $ 86.051.534 NOTE 4 - PROPERTY TAXES Property taxes received during tax year 2009 were $12,801,791, including collection of prior year delinquent assessments. Property taxes assessed for collection in tax year 2009 were based on a regular tax levy of $1.48 per $1,000 on a total 2008 assessed value of $8,713,852,906. For levy year 2009, to be received in 2010, the City's regular tax levy is $1.82 per $1,000 on a 2009 assessed valuation of $7,702,255,337, as of December 31, 2009, for a total regular levy of $14,094,060. State law provides that debt cannot be incurred in excess of the following percentages of the taxable property of the City. 1.50% of assessed value without a vote of the people 2.50% of assessed value with a vote of the people The City has additional authority to incur the following debt as a percentage of total valuation. 2.50% of assessed value with a vote of the people, indebtedness is for utilities 68 CITY OF AUBURN: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS 2.50% of assessed value with a vote of the people, indebtedness is for parks, or open space development At December 31, 2009, the debt limits for the City were as follows: With a Vote For Parks or Without General For Open Space Item a Vote 1.50% Purposes 1.00% Utilities Development 2.50% 2.50% Total Capacity Legal Limit $ 115,533,830 $ 77,022,553 $ 192,556,383 $ 192,556,383 $ 577,669,150 Outstanding indebtedness (66,411,202) - - - (66,411,202) Assets available 3,777,515 - - - 3,777,515 Margin available $ 52.900,143 $ 77,022,553 $ 192,556,383 $ 192.556,383 $ 515,035.463 The County Treasurer acts as an agent to collect property taxes levied in the county for all taxing authorities. Taxes are levied annually on January 1 on property values listed as of the prior August 31. The County assesses property at 100% of fair value. A revaluation of all property is required at least once every four years and a physical inspection is required at least once every six years. Property taxes levied by the County Assessor and collected by the County Treasurer become a lien on the first day of the levy year and may be paid in two installments if the total amount exceeds $10. The first half of real property taxes is due on April 30 and the balance is due October 31. Delinquent taxes bear interest at the rate of 12% and are subject to additional penalties if not paid as scheduled. At year-end, property taxes are recorded as a receivable with the portion not expected to be collected within 30 days offset by deferred revenue. In the statement of net assets, this deferred revenue is referred to as "Unearned Revenue". During the year, property tax revenues are recognized when cash is received. The Washington State Constitution limits the total regular property taxes to 1 % of assessed valuation or $10 per $1,000 of value. If the taxes of all districts exceed this amount, each is proportionately reduced until the total is at or below the 1 % limit. 2. Washington State law in RCW 84.55.010 limits the annual growth of regular property taxes to the lesser of 1 % or the rate of inflation. With a vote of the majority of the voters within a taxing district, the 1% levy limitation can be "lifted" and additional taxes may be levied. 3. The City may voluntarily levy taxes below the legal limit. Special levies approved by the voters are not subject to the above limitations. Property taxes are recorded as receivable and offset by a deferred revenue account when levied. Since state law allows for the sale of property for failure to pay taxes, no estimate of uncollectible taxes is made. NOTE 6 - INTERFUND ACTIVITY The next two tables summarize interfund activity during 2009. The first table details transfers while the second lists loan activity. Transfers are legally authorized transfers of resources from a fund receiving revenue to the fund through which resources are to be expended. 69 CITY OF AUBURN: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS Governmental funds: General fund Special revenue funds: City street fund Local street fund Arterial street fund Arterial Street Preservation Recreational trails Cumulative reserve Mitigation fees Total special revenue funds Debt service funds: 1998 library GO LID guarantee Total debt service funds Capital projects funds: Park construction Capital improvement projects Total capital projects funds Proprietary funds: Water Sewer Storm drainage Cemetery Golf course Total proprietary funds Internal service funds: Information services Equipment rental Total internal service funds Fiduciary funds: Fire pension & relief fund Permanent funds: Cemetery endowed care All transfers are considered routine. $ 3,093,827 $ 1,773,957 - 150,000 114,142 1,524,151 - 114,142 - 7,000 1,300,785 756,957 1,138, 601 - 2,553,528 2,552,250 - 302,500 10,000 - 10,000 302,500 - 1,170,441 1,300, 446 1,195,158 1,300,446 2,365,599 166,100 - 50,000 89,425 138,000 - - 40,000 - 54,070 354,100 183,495 81,000 - 7,000 204,100 88,000 204,100 58,000 40,000 70 CITY OF AUBURN: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS Loans between funds are classified as interfund receivable and payable. Interfund loans do not affect total fund equity. Interfund Loans Balance Due From Due To 1/112009 New Loans Balance 12/31/20C Golf course fund Capital projects fund $ 96,875 $ - $ 37,500 $ 59,375 All interfund loans are considered short-term cash loans. NOTE 6 - DUE FROM OTHER GOVERNMENTAL UNITS As of December 31, 2009, the City had receivables due from other governmental units as follows: 71 CITY OF AUBURN: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS General Fund City of Seattle - CBRNE Training 1,414 King County - 4Culture - Arts Sustained Support Grant 17,000 King County - Medic One 200 King County - Olympic Leadership Grant 4,167 King County - Real Estate Excise Taxes 46,168 King County Office of Emergency Management - SHSP Equip Grant 22,259 King County Sheriff's - Registered Sex Offender Grant 6,042 Pierce County - Real Estate Excise Taxes 49,772 WA Assn of Sheriff's and Police Chiefs - CTED Gang Emphasis Grant 37,104 WA Auto Theft Prevention Authority - Auto Theft Prevention Grant 38,653 WA State Administrative Office of the Courts 15,208 WA State Military Department - EMPG Grant 14,660 WA State Traffic Safety - Seat Belt / DUI Enforcement 2,948 WA State Treasurer - Sales Taxes 962,169 Total General Fund 1,217,764 Arterial Street Fund: King County Department of Natural Resources & Parks 1,413 WA State Transportation Improvement Board - Arterial Street Improvements 24,979 WA Dept. of Transportation - Arterial Street Improvements 400,130 Total Arterial Street Fund 426,522 Drug Forfeiture Fund: Tacoma Narcotics Enforcement Team (TNET) Grant 28,940 Housing & Community Development Fund: U.S. Dept. of Housing - Community Development Block Grant (CDBG) 98,495 Municipal Park Construction Fund: WA Recreation and Conservation Office - Park Improvement Grants 1,353 Department of Ecology - Coastal Protection Grant 15,699 King County Water and Land Resources - Open Space 4,327 Total Municipal Park Construction Fund 21,379 Storm Fund: King County - Flood Protection Services 1,019,200 Solid Waste Fund: Department of Ecology - CPG Grant 33,062 King County - Local Hazardous Waste Management Grant 19,955 King County - Waste Reduction and Recycling Grant 34,437 Total Solid Waste Fund 87,454 Facilities Fund: GSA Utilities 2,392 Information Services Fund: VRFA - GIS Support Services 18,141 Equipment Rental Fund: VRFA - Fuel Sales 7,149 Total $ 2,927,436 Reconciliation to government-wide statement of net assets: Total above due from other governmental units $ 2,927,436 Amount due to fiduciary fund - Total due from other governmental units, government-wide statement of net assets $ 2,927,436 72 CITY OF AUBURN: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS NOTE 7 - CAPITAL ASSETS AND DEPRECIATION Capital asset activity for the year ended December 31, 2009 is as follows: Schedule of Capital Asset Activity Balance Decreases/ Balance 111/09 Increases Adjustments 12/31109 Governmental activities: Capital assets, not being depreciated: Land $ 105,137,746 $ 1,227,532 $ (76,000) $ 106,289,278 Construction in progress 5,494,727 17,507,549 (6,520,440) 16,481,836 Total capital assets, not being depreciated 110,632,473 18,735,081 (6,596,440) 122,771,114 Capital assets, being depreciated: Buildings 23,629,321 - (153,000) 23,476,321 Improvements other than buildings 13,583,553 384,866 13,968,419 Machinery and equipment 16,739,921 2,371,967 (695,484) 18,416,404 Intangibles 713,231 24,684,825 - 25,398,056 Infrastructure 234,679,050 9,551,212 1571,256) 243,659,006 Total capital assets being depreciated 289,345,076 36,992,870 (1,419,740) 324,918,206 Less: accumulated depreciation for: Buildings (8,059,3461 (640,0361 2,003 (8,697,379) Improvements other than buildings (8,625,9171 034,8761 (9,060,793) Machinery and equipment 110, 126,002 1 (1,782,6411 652,288 1:11,256,355) Intangibles (96,5981 (95,0221 - (191,620) Infrastructure (66,284,798! (8,723,986) - 175,008,784) Total accumulated depreciation (93,192,661) (11,676,5611 654,291 (104,214,931) Total capital assets, being depreciated, net 196,152,415 25,316,309 (765,449) 220,703,275 Governmental activities capital assets, net $ 306,784,888 $ 44,051,390 $ (7,361,889) $ 343,474,389 Business-type activities: Capital assets, not being depreciated: Land $ 14,464,997 $ - $ - $ 14,464,997 Construction in progress 2,934,771 12,559,659 (1,244,401) 14,250,029 Total capital assets, not being depreciated 17,399,768 12,559,659 (1,244,401) 28,715,026 Capital assets, being depreciated: Buildings 12,944,082 - (640,844) 12,303,238 Improvements other than buildings 195,405,439 1,579,536 - 196,984,975 Machinery and equipment 3,037,817 278,473 (176,685) 3,139,605 Total capital assets being depreciated 211,387,338 1,858,009 (817,529) 212,427,818 Less: accumulated depreciation for: Buildings (4,489,105) (325.616) 640,844 (4,173,877) Improvements other than buildings (61,987,558) (4,808,427) - 166,795,985) Machinery and equipment (2,618,225) (136,556) 160,518 1:2,594,263) Total accumulated depreciation (69,094,888) (5,270,599) 801,362 (73,564,125) Total capital assets, being depreciated, net 142,292,450 (3,412,590) (16,167) 138,863,693 Business-type activities capital assets, net $ 159,692,218 $ 9,147,069 $ (1,260,568) $ 167,578,719 73 CITY OF AUBURN: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS Depreciation/amortization expense was charged to functions/programs of the City as follows: Government activities: General government $ 311,972 Public safety 420,714 Transportation 8,564,492 Physical environment 35,867 Culture and recreation 810,290 Capital assets held by the City's internal service funds are charged to the various functions based on their usage of the assets Total depreciation/amortization expense - governmental activities 1,533,228 $ 11,676,563 Business-type activities: Water $ 2,104,554 Sanitary sewer 1,390,660 Storm water 1,087,555 Solid waste 20,534 Golf course 334,026 Airport 224,393 Cemetery 66,648 Commercial retail Total depreciation expense - business-type activities 42,238 $ 5,270,608 NOTE 8 - CAPITAL LEASE OBLIGATION The City has the following capital leases: One January 1, 2007 the City entered into a capital lease agreement for the Auburn Avenue Theater facility for a 15 year term. The intent is for the City's Parks, Arts and Recreation department to offer performances to the public, as well as make the facility available for short- term rentals. On December 7, 2009 the City entered into a capital lease agreement for space in the Auburn Professional Plaza Building (Annex). The non-cancelable term of the lease is 30 years, however, the intent of the City is to exercise its lease purchase option in 2010. SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS 2011 70,111 1,649,735 2012 70,112 1,649,735 2013 70,112 1,649,735 2014 70,112 1,670,357 2015- 2019 350,557 9,509,691 2020- 2024 140,330 10, 936,145 2025- 2029 12, 545,204 2030- 2034 12, 545, 204 2035- 2039 12, 076,661 Total minimum lease payments 841,445 65,882,202 Less: Amounts representing interest (209,735) (41,333,020) Prese nt value of future minimum lease payment s $ 631,710 $ 24,549,182 74 CITY OF AUBURN: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS As of December 31, 2009, the gross value of the Auburn Theater facility acquired under the capital lease is $695,504. Monthly lease payments of $5,843 plus annual inflation adjustments based on the U.S. CPI-W index are payable through the end of the lease period on December 1, 2021. Interest on the lease was imputed at five percent. As of December 31, 2009, the gross value of the space in the Auburn Professional Plaza Building acquired under the capital lease is $24,549,186. Monthly lease payments of $137,478 plus inflation adjustments every 60 months are payable through the end of the non-cancelable lease period or until the lease purchase option is exercised. The lease negatively accrues in the first five years because the lease is structured so that the lease payments are less in the early years than in the final years. Interest on the lease was imputed at seven and three tenth percent. NOTE 9 - LONG-TERM DEBT 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: • 1998 Limited Tax General Obligation bonds were issued for construction of a library to be owned and operated by the King County Rural Library District. These 20-year bonds mature in 2018 and are paid from the Debt Service fund. • 2005 Limited Tax General Obligation refunding bonds were issued to partially advance refund the 1999 Limited Tax Obligation bonds. 1999 Limited Tax General Obligation bonds were issued for construction of hangars at the Auburn Municipal Airport. The 2005 Limited Tax General Obligation refunding bonds mature in 2019 and are paid from the Airport fund. • 2006 Limited Tax General Obligation bonds were issued to fund improvements at the Auburn Golf Course including a pro shop, clubhouse and related facilities, as well as construction of a columbarium at the Mountain View Cemetery. • 2006 Limited Tax General Obligation (taxable) bonds were issued to construct and equip restaurant, banquet and related facilities for a restaurant facility to be located at the Auburn Golf Course clubhouse. Revenue Bonds are payable from water and storm drainage utility revenues generated by those enterprise funds. Special Assessment Bonds are not a direct responsibility of the City, but are funded from the collection of special assessment payments. Debt service principal and interest costs are paid from the individual LID funds. The City is obligated for special assessment debt to the extent that it is required to establish an LID Guarantee fund for the purpose of guaranteeing the payment of local improvement bonds in the event there are insufficient funds in the individual LID fund. State of Washington Public Works Trust Fund Loans are a direct responsibility of the City. Auburn currently has seven outstanding loans with a remaining total balance of $10,014,943. Six of the loans are being repaid from water and sewer fund revenues over a 20-year period that begins upon each project completion. The other loan is being repaid from arterial street fund revenues over a 4-year period that began in 2007 upon project completion. 75 CITY OF AUBURN: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS 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, 2009. The first table summarizes all debt transactions for Auburn, while the second provides detailed information on all long-term debt. Additional schedules reflect total annual debt service requirements to maturity and the reconciliation of debt by fund type, CHANGES IN LONG-TERM DEBT SUMMARY Long-tern debt payable 12/31108 $ 9,271,799 $ 13,296.481 $ 36,827 $ 1.914.598 $ (13.926) $ 1,428,000 $ 25.933,779 Added 25,506,460 - - - - 26,732,850 52,239,310 Retired (48^0,259) (2,002,938) - 734,971 9,578 (175,000) (1,921,648) Long-term debt payable 12131/09 $ 34,290,000 $ 11,293.543 $ 36,827 $ 2,649.569 $ (4,348) $ 27,985,850 $ 76,251,441 (1) Includes capital leases DEBT 2010 669,000 1,492,056 (98,723) 1,819,126 1,070,654 155,066 - 2,558 1,991,409 3,632,340 3,468,805 2011 718,000 2,006,817 (107,015) 1,827,435 1,028,676 139957 - 2,558 65,816 1,705,476 3,976,767 2012 752,000 1,972,995 (116,041) 1,836,418 1,043,676 123,622 36,827 2,558 65,816 1,782,277 3,935,592 2013 1,388,650 1,928,661 (125,796) 1,846,128 1,048,676 106,686 - - 65,816 2,377,346 3,881,474 2014 1,435,500 1,871,347 (115,714) 1,856,620 1,063,676 89,550 - - 65,816 2,449,278 3,817,517 2015 1489,900 1,807,985 109690 1,858,005 1,078,676 69,377 - - 65,816 2,744082 3,735,367 2016 1,325,150 1,738,025 116,716 1,850,927 1,093,676 48,678 - - 65,816 2,601,357 3,637,630 2017 1,389,950 1,678,005 124,207 1,843,381 738676 27,455 - - 65,816 2,318,648 3,548,841 2018 1,449,400 1,613,618 132,195 1,835,334 738,676 22,719 - - 65,816 2,386,087 3,471,672 2019 1,211,100 1,544,816 164,430 1,826,753 738,676 17,984 - - 65,816 2,180,022 3,389,553 2020 1,059,350 1,486,155 445,828 1,806,156 556,307 13,248 - - 65,816 2,127,301 3,305,558 2021 1,094,150 1,434,167 477,855 1,774,168 556,307 10,336 - - - 2,128,312 3,218,671 2022 1,147,900 1,378,907 440,250 1,741,524 329,222 7,424 - - - 1,917,372 3,127,855 2023 1,192,350 1,318,371 473305 1,708,470 303,107 5,647 - - - 1,968,762 3,032,488 2024 1,241,800 1,253,922 536,113 1,672,934 303,107 4,131 - - - 2,081,020 2,930,987 2025 1,289,350 1,183,587 887474 1,621,567 195263 2,616 - - - 2,372,087 2,807,770 2026 931,550 1,107,237 954,106 1,554,935 195,263 1,639 - - - 2,080,919 2,663,811 2027 970,300 1,046,226 1,025741 1,483,299 66,316 663 - - - 2,062,357 2,530,188 2028 1,010,600 982,678 1,102,755 1,406,286 66,316 332 - - - 2,179,671 2,389,296 2029 1,052,450 916,496 1,185,551 1323,490 - - - - - 2,238,001 2,239,986 2030 1,095,850 846,482 1,274,563 1,234,477 - - - - - 2,370,413 2,080,960 2031 1,143,900 772,392 1,370 259 1,138,782 - - - - - 2,514,159 1,911,174 2032 1,191,950 695,122 1,473,139 1,035,902 - - - - - 2,665,089 1,731,023 2033 1,243,100 614,570 1,583,744 925,297 - - - - - 2,826 844 1,539,867 2034 1,297,350 530,532 1,702,653 806,388 - - - - - 3,000,003 1,336,920 2035 1,353,150 442,854 1,830490 678,551 - - - - - 3,183,640 1,121,405 2036 1,410,500 351,432 1,967,925 541,116 - - - - - 3,378,425 892,548 2037 1470,950 256,114 2,115,678 393,362 - - - - - 3,586,628 649,476 2038 1,534,500 156,693 2,274,525 234,515 - - - - - 3,809,025 391,209 2039 1,601,150 52,966 1,974,989 65,510 3,576,139 118476 TOTALS $ 36,160,850 $ 34,481,226 $ 25,180,892 $ 41,546,856 $ 12,214,943 $ 847,129 $ 36,827 $ 7,673 $ 2,649,569 $ 76,243,081 $ 76,882,885 (1) $ 76,243,081 Principal debt service requirements to maturity (4,348) Deferred charges 12,708 Present value adjustment of Auburn Theater Capital Lease on 1!112010 $ 76,251,441 Long Term Debt payable 12/3112009 76 CITY OF AUBURN: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS General obligation bonds: Limited G.O. Libran/ 3355.00% 121112018 $ 4,000000 $110,000-$290000 $ 2440000 $ $ (205,000) $ 2235,000 $ 210000 Total general obligation bonds 4,000,000 2,440,000 - (205,000) 2,235,000 210,000 Capital lease: Aubum Avenue Theater 5.00% 1213112021 695,504 $5,500-$5960 646,799 35,878 (38,259) 544,418 36,247 'nnex 7.30% 12/112039 24549,182 $137478-$209,087 24,549,182 24,549,182 1,549,735 Total capital leases (1) 25,244,686 646,799 24,585,060 (38,259) 25,193,600 1,685,982 Embloyee leae'e benefit. Compensated absences - 1,504,598 - 555,365 2,059,963 1,991,409 Public Works Trust Fund loans: PWTF 2006(a) 0.50% 7/1/2010 189,750 $35,578 71,157 21,400 (35,578) 56,979 56,978 F'U'dTF 20113 0.50% 71112028 1,800000 $66,316 360000 900,000 - 1260,000 66316 Total Public Works Trust Fund loans 1,989,750 431,157 921,400 (35,578) 1,316,979 123,294 Special assessment bnr dS L JO, # 347 6.85% 51112012 587,827 Va ries 36,827 36,827 Deferred charges related to debt (1,024) - 102 (922) - Total governmental $ 31,822,263 $ 5,058,357 $ 25,506,460 $ 276,630 $ 30,841,447 $ 4,010,685 Business-type debt: General obligation bonds GO bond 1999 5.00-5.10% 1111/2009 $ 1,655,000 $45,000 -$65,000 $ 65,000 $ - $ (65,000) $ - $ - GO refunding bond2005 4.01}5.00% 121112019 1,375,000 $10,000 -$190,000 1,345,000 - - 1,345,000 85,000 GO bond 2006 4.25-5.00% 121112025 3,275,000 $5,000 - $395,000 3,275,000 - - 3,275,000 - GO bond 2006 twable 540.552% 121112015 1,885,000 $45,000 -$245,000 1,500,000 (180,000) 1320,000 19npni] Total GO bonds 8,190,000 6,185,000 - (245,000) 5,940,000 275,000 Pedenue bonds. utilit$rsy%s redenue2) 5.01 5.1016 11x112009 8,345,000 $670,000-$1,030,000 1,030000 - (1,030000) - Utlft;.,s ref lrair3l nnda,11u5 (2) F-4 75, 1U112016 2,765,000 $45,000-$355,000 2465000 (265000) 2200,000 275,00[ Total revenue bonds 11,110,000 3,495,000 - (1,295,000) 2,200,000 275,000 Emnlpeee le, de benefit: Public Works Trust Fund loans: PWTF 1999 1.00% 71112019 3,465,000 $182,368 2,006,053 - (182,368) 1,823,685 182,368 PWTF 2001 0.50% 71112021 4,290,405 $227,086 2,952,112 - (227,086) 2 .725,026 227,086 PIPITF 2002 1.00% 71112022 641,250 $26,114 365,602 - (26,115) 339,487 26,114 PWTF 2004 0.50% 71112024 2,049036 $107,844 1,725504 - (107,844) 1617,660 107844 PWTF 2000Qb) 0.50% 71112026 2450000 $128947 2,321053 (128947) 2,192,106 128,947 Total Public Works Trust Fund loans 12,895,691 9,370,324 - (672,360) 8,697,964 672,359 Total all funds $ 64,017,954 $ 24,505,779 $ 25,506,460 $ (1,746,648) $ 48,265,591 $ 5,676,190 (1) The $12,708 dirrerence between the debt service requirement to maburitq and the 12!312009 balance is due to present value adjustment of Theater lease on 1'172010. (2) Subject to federal arbitrage rules. Due to Other Governments • Valley Communication Center Public Development Authority issued General Obligation bonds in 2000 for a new dispatch facility. The City is contracted to pay 20% of the debt service of these 15-year bonds that mature in 2015. This debt is paid from the General fund. • SCORE Public Development Authority issued General Obligation bonds in 2009 to acquire, construct, improve, and equip a consolidated correctional facility to be located in Des Moines, Washington. The city is contracted to pay 31% of the debt service of these 30 year bonds that mature in 2039. This debt is to be paid from the General fund. 77 General Ahl i,tion bonds.: 0e_ %rc ~~u dtinn Puhllp Eev Auth 4. 0575% 1-.1!2015 -,551,600 .$96,600-$53,000 1,428,000 - (175,000) 1253,000 184,0170 SC,-,RE Public Ce.elopnient. itl-~ri11-11106.62%, VI00039 6 7-12 $.93,650-$1,601,150 - 26 732 - 2673 '50 - Total general obligation bonds due other governments 29284450 1,428,000 26732850 (175,000) 27,985,850 184,000 CITY OF AUBURN: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS LONG-TERM DEBT RECONCILIATION Revenue bonds Long-term bonds payable: General obligation bonds Capital lease Revenue bonds Special assessments with government commitment Public Works Trust Fund loans Due to Other Governments Employee leave benefits Deferred charges Total long-term debt 648,190 $ - $ 648,190 5,940,000 2,235,000 8,175,000 - 25,193,600 25,193,600 1,551,810 - 1,551,810 - 36,827 36,827 8,697,964 1,316,979 10,014,943 - 27,985,850 27,985,850 589,606 2,059,963 2,649.569 (3,427) 922) (4,348) $ 17,424,144 $ 58,827,297 $ 76,251,441 11111111111116 Revenue Bond Debt Service Coverage The required debt service coverage for the 1999 utility revenue bonds and the 2005 utility revenue refunding bonds is 1.25. Debt service coverage for 2009 was 1.78. The restricted rate stabilization fund for the utility revenue bonds was established to minimize the effect on rates of revenue fluctuations between years. By transferring cash into this stabilization fund, adjusted net revenue available for debt service, as defined, would be decreased by the amount of the transfer. Conversely, transfers out of the account would increase adjusted net revenue available for debt service. NOTE 10 - PENSION PLANS Substantially all City full-time and qualifying part-time employees participate in one of the following statewide retirement systems administered by the Washington State Department of Retirement Systems, under cost-sharing multiple-employer public employee defined benefit and defined contribution retirement plans. The Department of Retirement Systems (DRS), a department within the primary government of the State of Washington, issues a publicly available comprehensive annual financial report (CAFR) that includes financial statements and required supplementary information for each plan. The DRS CAFR may be obtained by writing to: Department of Retirement Systems, Communications Unit, P.O. Box 48380, Olympia, WA 98504-8380. The following disclosures are made pursuant to GASB Statement 27, Accounting for Pensions by State and Local Government Employers. Public Employees' Retirement System (PERS) Plans 1, 2, and 3 Plan DescriDtion PERS is a cost-sharing multiple-employer retirement system comprised of three separate plans for membership purposes: Plans 1 and 2 are defined benefit plans and Plan 3 is a defined benefit plan with a defined contribution component. Membership in the system includes: elected officials; state employees; employees of the Supreme, Appeals, and Superior courts (other than judges currently in a judicial retirement system); employees of legislative committees; community and technical colleges, college and 78 Liabilities payable from restricted assets: CITY OF AUBURN: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS university employees not participating in national higher education retirement programs; judges of district and municipal courts; and employees of local governments. PERS participants who joined the system by September 30, 1977 are Plan 1 members. Those who joined on or after October 1, 1977 and by either, February 28, 2002 for state and higher education employees, or August 31, 2002 for local government employees, are Plan 2 members unless they exercise an option to transfer their membership to Plan 3. PERS participants joining the system on or after March 1, 2002 for state and higher education employees, or September 1, 2002 for local government employees have the irrevocable option of choosing membership in either PERS Plan 2 or PERS Plan 3. The option must be exercised within 90 days of employment. An employee is reported in Plan 2 until a choice is made. Employees who fail to choose within 90 days default to PERS Plan 3. Notwithstanding, PERS Plan 2 and Plan 3 members may opt out of plan membership if terminally ill, with less than five years to live. PERS Plan 1 and Plan 2 defined benefit retirement benefits are financed from a combination of investment earnings and employer and employee contributions. PIERS retirement benefit provisions are established in state statute and may be amended only by the State Legislature. PERS Plan 1 members are vested after the completion of five years of eligible service. Plan 1 members are eligible for retirement at any age after 30 years of service, or at the age of 60 with five years of service, or at the age of 55 with 25 years of service. The annual benefit is two percent of the average final compensation (AFC) per year of service, capped at 60 percent. (The AFC is based on the greatest compensation during any 24 eligible consecutive months). This annual benefit is subject to a minimum for PERS Plan 1 retirees who have 25 years of service and have been retired 20 years, or who have 20 years of service and have been retired 25 years. Plan 1 members who retire from inactive status prior to the age of 65 may receive actuarially reduced benefits. Plan 1 members who retire from inactive status prior to the age of 65 may receive actuarially reduced benefits. If a survivor option is chosen, the benefit is further reduced. A cost-of living allowance (COLA) is granted at age 66 based upon years of service times the COLA amount, increased by three percent annually. Plan 1 members may also elect to receive an additional COLA amount that provides an automatic annual adjustment based on the Consumer Price Index. To offset the cost of this annual adjustment, the benefit is reduced. PERS Plan 2 members are vested after the completion of five years of eligible service. Plan 2 members may retire at the age of 65 with five years of service with an allowance of two percent of the AFC per year of service. (The AFC is based on the greatest compensation during any eligible consecutive 60-month period. Plan 2 members who retire prior to the age of 65 receive reduced benefits. If retirement is at age 55 or older with at least 30 years of service, a three percent per year reduction applies; otherwise an actuarial reduction will apply. The benefit is also actuarially reduced to reflect the choice of a survivor option. There is no cap on years of service credit; and a cost-of-living allowance is granted (based on the Consumer Price Index), capped at three percent annually. PIERS Plan 3 has a dual benefit structure. Employer contributions finance a defined benefit component, and member contributions finance a defined contribution component. The defined benefit portion provides a benefit calculated at one percent of the average final compensation per year of service. The average final compensation is based on the greatest compensation during any eligible consecutive 60-month period. Effective June 7, 2006, Plan 3 members are vested in the defined benefit portion of their plan after ten years of service; or after five years of service, if twelve months of that service are earned after age 44; or after five service credit years earned in PERS Plan 2 prior to June 1, 2003. Plan 3 members are immediately vested in the defined contribution portion of their plan. Vested Plan 3 members are eligible to retire with full benefits at age 65, or at age 55 with 10 years of service. Plan 3 members who retire prior to the age of 65 receive reduced benefits. If retirement is at age 55 or older with at least 30 years of service, a three percent per year reduction applies; otherwise an actuarial reduction will apply. The benefit 79 CITY OF AUBURN: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS is also actuarially reduced to reflect the choice of a survivor option. There is no cap on years of service credit, and Plan 3 provides the same cost-of-living allowance as Plan 2. The defined contribution portion can be distributed in accordance with an option selected by the member, either as a lump sum or pursuant to other options authorized by the Employee Retirement Benefits Board. Judicial Benefit Multiplier Beginning January 1, 2007 through December 31, 2007, judicial members of PERS were given the choice to participate in the Judicial Benefit Multiplier Program (JBM). Justices and judges in PERS Plan 1 and 2 were able to make a one-time irrevocable election to pay increased contributions that would fund a retirement benefit with a 3.5 percent multiplier. The benefit would be capped at 75 percent of average financial compensation. Judges in PERS Plan 3 could elect a 1.6 percent of pay per year of service benefit, capped at 37.5 percent of average compensation. Members who choose to participate in JBM would: accrue service credit at the higher multiplier beginning with the date of their election, be subject to the benefit cap of 75% of average financial compensation, pay higher contributions, stop contributing to the Judicial Retirement Account (JRA), and be given the option to increase the multiplier on past judicial service. Members who did not choose to participate would: continue to accrue service credit at the regular multiplier; continue to participate in JRA, if applicable; never be a participant in the JBM Program; and continue to pay contributions at the regular PERS rate. Newly elected or appointed justices and judges who chose to become PERS members on or after January 1, 2007, or who had not previously opted into PERS membership, were required to participate in the JBM Program. Members required into the JBM program would: return to prior PERS Plan if membership had previously been established; be mandated into Plan 2 and not have a Plan 3 transfer choice, if a new PERS member; accrue the higher multiplier for all judicial service; not contribute to JRA; and not have the option to increase the multiplier for past judicial service. There are 1,192 participating employers in PERS. Membership in PERS consisted of the following as of the latest actuarial valuation date for the plans of June 30, 2008: Retirees and Beneficiaries Receiving Benefits 73,122 Terminated Plan Members Entitled to but not yet Receiving Benefits 27,267 Active Plan Members Vested 105,212 Active Plan Members Non-vested 56,456 Total 262,057 Fundinq Policy Each biennium, the state Pension Funding Council adopts Plan 1 employer contribution rates, Plan 2 employer and employee contribution rates, and Plan 3 employer contribution rates. Employee contribution rates for Plan 1 are established by statute at 6 percent for state agencies and local government unit employees, and at 7.5 percent for state government elected officials. The employer and employee contribution rates for Plan 2 and the employer contribution rate for Plan 3 are developed by the Office of the State Actuary to fully fund Plan 2 and the defined benefit portion of Plan 3. All employers are required to contribute at the level established by the Legislature. Under PERS Plan 3, employer contributions finance the defined benefit portion of the plan, and member contributions finance the defined contribution portion. The Employee Retirement Benefits Board sets Plan 3 employee contribution rates. Six rate options are available ranging from 5 to 15 percent; two of the options are graduated rates dependent on the employee's age. As a result of the implementation of the Judicial Benefit Multiplier Program in January 2007, a second tier of employer and employee rates was developed to fund, along with investment earnings, the increased retirement benefits of those justices and judges that 80 CITY OF AUBURN: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS participate in the program. The methods used to determine the contribution requirements are established under state statute in accordance with chapters 41.40 and 41.45 RCW. The required contribution rates expressed as a percentage of current year covered payroll, as of December 31, 2009, were as follows: Members not participating in JBM: Employer* 5.31% * 5.31%- 5.31%*** Employee 6.00%**** 3.90%- 1-1. The employer rates include the employer administrative expense fee currently set at 0.16%. The employer rate for state elected officials is 7.89% for Plan 1 and 5.31% for Plan 2 and Plan 3. Plan 3 defined benefit portion only. The employee rate for state elected officials is 7.50% for Plan 1 and 3.90% for Plan 2. * Variable from 5.0% minimum to 15.0% maximum based on rate selected by the PERS 3 member. Members participating in JBM: PERS Plan 1 PERS Plan 2 PERS Plan 3 Employer' 5.31% 5.31% 5.31 Employee 12.26% 9.75% 7.50%*- * The employer rates include the employer administrative expense fee currently set at 0.16%. Plan 3 defined benefit portion only. Minimum rate. Both City and the employees made the required contributions. The City's required contributions for the years ended December 31 were as follows: 2009 $49,565 $1,167,042 $263,837 2008 $54,719 $1,173,956 $238,108 2007 $49,744 $765,172 $144,898 The employer contribution rate for the City was 6.13% in 2007, 8.31% in 2008 and 5.31% in 2009. Law Enforcement Officers' and Fire Fighters' Retirement System (LEOFF) Plans 1 and 2 Plan Description LEOFF is a cost-sharing multiple-employer retirement system comprised of two separate defined benefit plans. LEOFF participants who joined the system by September 30, 1977 are Plan 1 81 CITY OF AUBURN: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS members. Those who joined on or after October 1, 1977 are Plan 2 members. Membership in the system includes all full-time, fully compensated, local law enforcement officers and firefighters and, as of July 24, 2005, those emergency medical technicians who were given the option and chose LEOFF Plan 2 membership. LEOFF membership is comprised primarily of non-state employees, with Department of Fish and Wildlife enforcement officers, who were first included prospectively effective July 27, 2003, being an exception. Effective July 1, 2003, the LEOFF Plan 2 Retirement Board was established by Initiative 790 to provide governance of LEOFF Plan 2. The Board's duties include adopting contribution rates and recommending policy changes to the Legislature for the LEOFF Plan 2 retirement plan. LEOFF defined benefit retirement benefits are financed from a combination of investment earnings, employer and employee contributions, and a special funding situation in which the state pays through state legislative appropriations. LEOFF retirement benefit provisions are established in state statute and may be amended by the State Legislature. LEOFF Plan 1 members are vested after the completion of five years of eligible service. Plan 1 members are eligible for retirement with five years of service at the age of 50. The benefit per year of service calculated as a percent of final average salary (FAS) is as follows: Term of Service Percent of Final Average Salary 20 or more years 2.0% 10 but less than 20 years 1.5% 5 but less than 10 years 1.0% The FAS is the basic monthly salary received at the time of retirement, provided a member has held the same position or rank for 12 months preceding the date of retirement. Otherwise, it is the average of the highest consecutive 24 months' salary within the last ten years of service. A Cost-of-living allowance is granted (based on the Consumer Price Index). LEOFF Plan 2 members are vested after the completion of five years of eligible service. Plan 2 members may retire at the age of 50 with 20 years of service, or at the age of 53 with five years of service, with an allowance of two percent of the FAS per year of service. The FAS is based on the highest consecutive 60 months. Plan 2 members who retire prior to the age of 53 receive reduced benefits. Benefits are actuarially reduced for each year that the benefit commences prior to age 53 and to reflect the choice of a survivor option. If the member has at least 20 years of service and is age 50, the reduction is three percent for each year prior to age 53. There is no cap on years of service credit; and a cost-of-living allowance is granted (based on the Consumer Price Index), capped at three percent annually. There are 375 participating employers in LEOFF. Membership in LEOFF consisted of the following as of the latest actuarial valuation date for the plans of June 30, 2008: Retirees and Beneficiaries Receiving Benefits 9,268 Terminated Plan Members Entitled to but not yet Receiving Benefits 650 Active Plan Members Vested 13,120 Active Plan Members Non-vested 3,927 Total 26,965 Funding Policy Starting on July 1, 2000, Plan 1 employers and employees contribute zero percent as long as the plan remains fully funded. Employer and employee contribution rates are developed by the Office of the State Actuary to fully fund the plan. LEOFF Plan 2 employers and employees are required to pay at the level adopted by the LEOFF Plan 2 Retirement Board. All employers are required to 82 CITY OF AUBURN: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS contribute at the level required by state law. The Legislature, by means of a special funding arrangement, appropriated money from the state General Fund to supplement the current service liability and fund the prior service costs of LEOFF Plan 2 in accordance with the requirements of the Pension Funding Council and the LEOFF Plan 2 Retirement Board. However, this special funding situation is not mandated by the state constitution and this funding requirement could be returned to the employers by a change of statute. The required contribution rates expressed as a percentage of current-year covered payroll, as of December 31, 2009, were as follows: LEOFF Plan 1 LEOFF Plan 2 Employer" 0.16% 5.24%** Employee 0.00% 8.46% * The employer rates include the employer administrative expense fee currently set at 0.16%. **The employer rate for ports and universities is 8.99%. Both the City of Auburn and the employees made the required contributions. The City's required contributions for the years ended December 31 were: LEOFF Plan 1 LEOFF Plan 2 2009 $189 $470,102 2008 $221 $459,489 2007 $216 $382,356 Public Safety Employees' Retirement System (PSERS) Plan 2 Plan Descriation PSERS is a cost-sharing multiple-employer retirement system comprised of a single defined benefit plan, PSERS Plan 2. PSERS was created by the 2004 Legislature and became effective July 1, 2006. PSERS Plan 2 membership includes full-time employees of a covered employer on or before July 1, 2006, who met at least one of the PSERS eligibility criteria, and elected membership during the election period of July 1, 2006 to September 30, 2006; and those full-time employees, hired on or after July 1, 2006 by a covered employer, that meet at least one of the PSERS eligibility criteria. A covered employer is one that participates in PSERS. Covered employers include: State of Washington agencies: Department of Corrections, Department of Natural Resources, Parks and Recreation Commission, Gambling Commission, Washington State Patrol, and Liquor Control Board; Washington state counties; and Washington state cities except for Seattle, Tacoma and Spokane. To be eligible for PSERS, an employee must work on a full-time basis and: • have completed a certified criminal justice training course with authority to arrest, conduct criminal investigations, enforce the criminal laws of Washington, and carry a firearm as part of the job: OR • have primary responsibility to ensure the custody and security of incarcerated or probationary individuals; OR 83 CITY OF AUBURN: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS • function as a limited authority Washington peace officer, as defined in RCW 10.93.020; OR • have primary responsibility to supervise eligible members who meet the above criteria. PSERS defined benefit retirement benefits are financed from a combination of investment earnings and employer and employee contributions. PSERS retirement benefit provisions are established in state statute and may be amended only by the State Legislature. Plan 2 members are vested after the completion of five years of eligible service. PSERS Plan 2 members may retire at the age of 65 with five years of service, or at the age of 60 with at least 10 years of PSERS service credit, with an allowance of two percent of the average final compensation (AFC) per year of service. The AFC is the monthly average of the member's 60 consecutive highest-paid service credit months, excluding any severance pay such as lump-sum payments for deferred sick leave, vacation or annual leave. Plan 2 members who retire prior to the age of 60 receive reduced benefits. If retirement is at age 53 or older with at least 20 years of service, a three percent per year reduction for each year between the age at retirement and age 60 applies. There is no cap on years of service credit; and a cost-of-living allowance is granted (based on the Consumer Price Index), capped at three percent annually. There are 73 participating employers in PSERS. Membership in PSERS consisted of the following as of the latest actuarial valuation date for the plan of June 30, 2008: Retirees and Beneficiaries Receiving Benefits 1 Terminated Plan Members Entitled to but not yet Receiving Benefits - Active Plan Members Vested - Active Plan Members Non-vested 3.981 Total 3,982 Funding Policy Each biennium, the state Pension Funding Council adopts PSERS Plan 2 employer and employee contribution rates. The employer and employee contribution rates for Plan 2 are developed by the Office of the State Actuary to fully fund Plan 2. All employers are required to contribute at the level established by the Legislature. The methods used to determine the contribution requirements are established under state statute in accordance with Chapters 41.37 and 41.45 RCW. The required contribution rates expressed as a percentage of current-year covered payroll, as of December 31. 2009, were as follows: Employers 7.85% Employee 6.55% "The employer rate includes and employer administrative expense fee of 0.16%. Both the City and the employees made the required contributions. The City's required contributions for the years ended December 31 were as follows: 84 CITY OF AUBURN: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS PSERS Plan 2 2009 $ 58,643 2008 $ 57,147 2007 $ 48,549 City of Auburn Fire Relief and Pension Plan The City is the administrator of the Firemen's Pension Plan (Plan), which is a closed, single- employer defined benefit pension plan that was established in conformance with RCW Chapters 41.16 and 41.18. This plan provided retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. Membership is limited to firefighters employed prior to March 1, 1970 when the LEOFF retirement system was established. The City's obligation under the Firemen's Pension Plan consists of paying all benefits, including payments to beneficiaries and healthcare, for firefighters who retired prior to March 1, 1970, and excess pension and healthcare benefits of LEOFF for covered firefighters who retired after March 1, 1970. Benefits and refunds of the defined benefit pension plan are recognized when due and payable in accordance with the Plan. The Plan does not issue a separate financial report. Under state law, the Firemen's Pension Plan is provided an allocation of 25% of all monies received by the state from taxes on fire insurance premiums, interest earnings, member contributions made prior to the inception of LEOFF, and City contributions required to meet projected future pension obligations. The actuary determined as of January 1, 2009 that no future City contributions would be required beyond future revenues from state fire insurance taxes and interest earnings. In 2009 $58,000 was received from the state from taxes on fire insurance premiums. On-behalf payments of fringe benefits and salaries for the City's employees were recognized as revenues and expenditures/expenses during the period. Administrative costs, such as City staff time and actuarial valuation costs are funded from interest earnings or City contributions. Membership of the Firemen's Pension Plan consisted of 14 eligible, of which 12 are receiving benefits. GASB STATEMENTS No. 25 and No. 27 SCHEDULE OF FUNDING PROGRESS irounded to thousands) Unfunded Actuarial Actuarial UAAL as a Actuarial Accrued Accrued Percentage Actuarial Value Liabilities- Liabilities Funded Covered of Covered Valuation Date of Assets Entry Age (UAAL) Ratio Payroll Payroll January 1. 1999 $2,096 $2,157 $60 97.17% $119 51% January 1, 2001 $3,632 $2,332 ($1,3001 155. 75% $58 -2241% January 1, 2003 $3,514 $2,428 ($1,0861 144. 73% $61 -1780% January 1, 2005 $3,160 $2,172 1$9881 145. 00% $64 -1544% January 1, 2007 $2,868 $2,802 {$661 102. 00% $0 N/A January 1, 2009 $2,941 $1,878 ($1,0631 157. 00% $0 N/A This plan primarily covers inactive par ticipants. There are no curren t member contribu tions. Prior to adoption of GASB Statement No. 25 in 1997, the Annual Required Contribution (ARC) was not determined pursuant to the parameters required by the statement. Therefore, no liability prior to 1997 has been shown. 85 CITY OF AUBURN: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS GASB STATEMENT No. 25 GASB STATEMENT No. 27 SCHEDULE OF EMPLOYER CONTRIBUTIONS THREE YEAR TREND INFORMATION Fiscal Actual Annual Required Percentage Annual Percentage Net Year Employer Contribution of ARC Pension Cost of APC Pension Ending Contributions (ARC) Contributed (APC) Contributed Obligation December 31, 1999 $52,738 $5,381 980% December 31, 2000 $31,721 $5,381 590% $5,520 574.66% {$48,8081 December 31, 2001 $37,281 $0 NIA $341 10932.84% {$85,7481 December 31, 2002 $40,869 $0 NIA $684 5975.00% ($125,933) December 31, 2003 $45,664 $0 N/A $1.137 4016.18% ($170,460) December 31, 2004 ($137,783) ($91,881) N/A ($90,143) N/A ($122,820) December 31, 2005 ($144,746) ($78,690) N/A ($76,827) N/A ($54,901) December 31, 2006 ($149,327) ($78,690) NIA ($77,774) NIA $16,652 December 31, 2007 $17,920 ($5,048) N/A 1:$5,420) NIA ($48,953) December 31, 2008 $12,167 ($5,048) N/A ($4,885) NIA ($23,740) December 31, 2009 $37,232 ($78,233) N/A ($77,503) N/A ($138,475) GASB STATEMENT No. 27 Annual Development of Pension Cost Fiscal Year Ending ARC at End of Year (1) Interest on NPO (2) ARC Adjustment Amort. Factor Annual Pension Cost (APC) Total Employer Contributions Change in NPO NPO Balance 12131/1999 $5,381 $1,742 $1,874 13.28% $5,249 $52,738 ($47,489) ($22,667) 12/3112000 $5,381 ($1,582) ($1,721) 13.14% $5,520 $31,721 ($26,201) ($48,808) 1213112001 $0 ($3,417) ($3,758) 12.99% $341 $37,281 1$36,940) ($85,7481 12131/2002 $0 ($6,002) ($6,686) 12.83% $684 $40,869 ($40,185) ($125,9331 12/31/2003 $0 ($8,815) ($9,952) 12.65% $1,137 $45,664 ($44,527) ($170,460) 12/31/2004 ($91,881) ($11,932) ($13,670) 12.47% 490,143) ($137,783) $47,640 ($122,820) 12/31/2005 ($78,690) ($7,369) ($9,232) 13.30% ($76,827) ($144,746) $67,919 ($54,901) 12/31/2006 ($78,6901 ($3,294) ($4,210) 13.04% 477,774) ($149,327) $71,553 $16,652 12/31/2007 ($5,0481 $833 $1,205 13.82% ($5,420) $17,920 ($23,340) ($6,688) 12/31/2008 ($5.048) ($334) ($497) 13.46% ($4,885) $12,167 ($17,052) ($23.740) 12/31/2009 ($78,2331 ($950) ($1,680) 14.13% ($77,5031 $37,232 ($114,735) ($138,4751 (1) A change in consulting actuaries resulted in a recommended change in the actuarial methods and assumptions. (2) 8.00% interest rate was used for years prior to January 1, 1999: 7.00% thereafter. (3) The Net Pension Obligation (NPO) balance is reflected as part of Deferred Charges on the Government-wide Statement of Net Assets Based on 30-year level-dollar closed amortization as of January 1, 1999. The information presented in the preceding required schedules was determined as part of the actuarial valuations at the date indicated. 86 CITY OF AUBURN: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS Valuation date January 1, 2009 Actuarial cost method Entry age normal Amortization method 30-year, closed as of January 1, 1999 Remaining amortization period 20 years Asset valuation method Fair market value Actuarial Assumptions Projected salary increases 3.5% Cost-of living adjustments 2.5% NOTE 11 - OTHER POST EMPLOYMENT BENEFITS In 2008, the city implemented GASB Statement 45, Accounting and Financial Reporting by Employers for Post Employment Benefits Other Than Pensions. Plan Description The city is the administrator of the LEOFF 1 employees plan covering lifetime medical care. This plan is a defined benefit healthcare plan, other post employement benefit plan (OPEB). The city is required to pay post employment benefits in accordance with Revised Code of Washington (RCW) Chapter 41.16, all medical and long term care as long as a disability exists are covered for any active firefighter hired prior to March 1, 1970. For any retired firefighter hired prior to March 1, 1970, medical and long term care are covered at the discretion of the Retirement Board. Members retired prior to 1961 for reasons other than duty disability are not eligible for medical benefits during retirement. In 1970, LEOFF was established by the Legislature under RCW Chapter 41.26. LEOFF members who joined the system by September 30, 1977 are Plan 1 members. For Plan 1 members, the city is required to pay all healthcare expenses incurred by LEOFF 1 retirees. The City's cost is reduced by any amounts retirees receive from Medicare or other health plans. Funding Policy The funding policy is based upon the pay-as-you-go financing requirements. Annual OPEB Cost and Net OPEB Obligation The City's annual other post employment benefit (OPEB) cost is calculated based upon the annual required contribution (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover the normal cost each year and amortize any unfunded actuarial liabilities over a period of 21 years as of January 1, 2008. The table below 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. 87 CITY OF AUBURN: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS Fiscal Year Ending 12131/2009 Annual required contribution (ARC) 1. Annual Normal Costs at beginning of year $ 90,257 2. Amortization of UAAL at beginning of year 1,540,432 3. Interest to end of year 81,534 4. ARC at end of year $ 1,712,223 5. Interest on Net OPEB Obligation 39,660 6. Adjustment to ARC 60,618 7. Annual OPEB Cost $ 1,691,265 8. Employer Contributions 1,037,683 9. Change in Net OPEB Obligation 653,582 10. Net OPEB Obligation at beginning of year 793,204 11. Net OPEB Obligation at end of year $ 1,446,786 The City's annual OPEB cost, the percentage of OPEB costs contributed to the plan, and the net OPEB obligation for 2009 were as follows: Annual t Percentage of t Net OPEB t Fiscal Year Ending OPEB Cos Annual OPEB Cos Obliga ion December 31, 2009 $ 1,691,265 61% $ 1,446,786 Funded Status and Fundinq Progress As of January 1, 2008, the most recent actuarial valuation date, the plan was 0% funded. The accrued liability for benefits was $20.7 million, and the actuarial value of assets was $0, resulting in a UAAL of $20.7 million. Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. Actuarial Methods and Assumptions Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities, consistent with the long-term perspective of the calculations. 88 CITY OF AUBURN: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS In the January 1, 2008 actuarial valuation, the entry age normal actuarial cost method was used. The actuarial assumptions used included a 5.0% 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. Other significant assumptions are a medical inflation rate of 9.0% and long term care of 5.0%. The UAAL is being amortized on a closed basis at the assumed discount rate. The remaining amortization period at January 1, 2008 was 21 years. NOTE 12 - ASSOCIATION OF WASHINGTON CITIES EMPLOYEE BENEFIT TRUST ("Trust") Trust Description The City is a Participating Employer in the Association of Washington Cities Employee Benefit Trust ("Trust"), a cost-sharing multiple-employer welfare benefit plan administered by the Association of Washington Cities. The Trust provides medical benefits to certain eligible retired employees of Participating Employers and their eligible family members. Under Article VII of the Trust document, the Trustees have the authority and power to amend the amount and the nature of the medical and other benefits provided by the Trust. The Trust issues a publicly available financial report that includes financial statements and requires supplementary information for Trust. That report, along with a copy of the Trust document, may be obtained by writing to Trust at 1076 Franklin Street SE, Olympia, WA 98501-1346 or by calling 1-800-562-8981. Fundina Policv The Trust provides that contribution requirements of Participating Employers and of participating employees, retirees and other beneficiaries, if any, are established and may be amended by the Board of Trustees of the Trust. Retirees of the City receiving medical benefits from the Trust contribute $697.60 per month for non-Medicare enrolled retiree-only coverage, $1,395.20 for non- Medicare enrolled retiree and spouse coverage, $1,069.10 for Medicare enrolled retiree and non- Medicare enrolled spouse (or non-Medicare enrolled retiree and Medicare-enrolled spouse) and $743.00 for Medicare-enrolled retiree and spouse coverage. Participating Employers are contractually required to contribute at a rate assessed each year by Trust, currently 14.8 percent of annual covered payroll. The City's contributions to the Trust for the year ended December 31, 2009, was $4.5 million, which equaled the required contributions of that year. NOTE 13 -CONSTRUCTION COMMITMENTS At December 31, 2009 the City had the following contractual obligations on construction projects: SCHEDULE OF OUTSTANDING CONSTRUCTION OBLIGATIONS AS OF DECEMBER 31. 2009 Amount Outstanding Traffic projects $ 166,354 Street projects 1,588,476 Utilities projects 2,786,056 Other projects Total commitments 268,323 $ 4,809,209 89 CITY OF AUBURN: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS NOTE 14 - CEMETERY ENDOWED CARE FUND The City maintains one permanent fund known as the cemetery endowed care fund. Paid into this fund are 15% of all proceeds received from the sale of each grave, niche or crypt. This fund is irreducible in principal and no part of the income of this fund shall ever be used for purposes other than those specified upon the creation of the fund. RCW 68.44.020 restricts the use of endowment net appreciation to endowment care "stipulated in the instrument by which the fund was established". For the City, the instrument that established the fund is Auburn City Code section 3.04.080, and section 3.040.120 governs the use of the fund. ACC 3.04.120 restricts net interest or income from investments to the care of the lots and in the improvement or embellishment of the cemetery or the erection or preservation of any buildings or structures, fences or walks, or for the repair, preservation, erection or renewal of any tomb, monument, grave, stone, fence, railing or other erection in or around the cemetery. The funds may also be used for planting and cultivating trees, shrubs, flowers or plants in or around the cemetery. All expenditures of income from the fund must first be authorized by the City Council. For 2009, of the $25,327 net appreciation on investments, all was available for expenditures. Amounts that are available for expenditure are reflected as unrestricted net assets. NOTE 15 -JOINT VENTURES / RELATED PARTY Vallev Communications Center The "Valley Communications Center" was established August 20, 1976, when an Interlocal Agreement was entered into by four participating municipal corporations: Renton, Kent, Auburn and Tukwila. The provisions and terms of the "Interlocal Cooperation Act", pursuant to RCW 39.34, sanction the agreement. The initial duration of the agreement was five years and thereafter is automatically extended for consecutive two-year periods, unless terminated by one or more of the participating cities. Any such termination must be in writing and served upon the other cities on or before July 1 in any one year and such termination shall then become effective on the last day of such year. On August 4, 1999 the Administration Board of Valley Communications Center voted to include the City of Federal Way as a full participating member city as of January 1, 2000. The five participating municipal corporations that include the cities of Renton, Kent, Auburn, Tukwila, and Federal Way on April 17, 2000 entered into a new interlocal Agreement, pursuant to RCW 39.34, et seq. This agreement reaffirmed Valley Communications Center as a governmental administration agency pursuant to RCW 39.34.030 (3) (b). The purpose of the joint operation, hereafter referred to as Valley Com, is to provide improved consolidated emergency communications (dispatch) services for police, fire and medical aid to the five participating cities and to the several subscribing agencies, which include King County Fire Districts #2, #20, #40, #43, #44, #47, Black Diamond Fire Department, Vashon Island Fire Department, City of Pacific Police and Fire Departments, City of Algona Police Department, City of Black Diamond Police Department, City of Des Moines Police Department, SeaTac Fire Department, North Highline Fire Department, and King County EMS Units. In 1988, King County Fire District #1 was annexed to the City of Tukwila. A separate agreement between Valley Com and the subscribing agencies has been executed, which set forth condition of services and rates charged. 90 CITY OF AUBURN: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS The participating cities provide the majority of revenues to Valley Com. The method of allocating revenue source was changed in 1990 to a basis of prior year's calls with actual first and second quarter and estimated third and fourth quarter calls. The allocation of prorated financial participation among the five participating cities is the percentage of estimated dispatched calls attributed to each jurisdiction compared to the total actual and estimated dispatched calls, for the period for January 1, through December 31. The percentages are applied to the current approved budget, less revenue from subscribing agencies and all other sources. The 2009 cost distribution for the five participating cities is as follows: Renton 79,997 21.38% Kent 102,449 27.38% Auburn 69,752 18.64% Tukwila 36,382 9.72% Federal Way 85,633 22.88% Total 374,213 100.00% Distribution of current year net income is based on these budgeted percentages Valley Com is served by an Administration Board composed of the Mayors or designated representatives from the five participating cities of Renton, Kent, Auburn, Tukwila and Federal Way. The Administration Board is responsible for the following functions: 1) Budget review and recommendation to the legislative bodies of the participating cities, and budget adoption after each legislative body has approved the required financial participation for the ensuing year; 2) Approval of appointment and/or discharge of the Director; 3) Approval of personnel policy and final decisions on all major policy changes; 4) Review and approval of all contracts. In addition, an Operations Board provides direction and consists of two members of each participating City's public safety departments, including the heads of such departments or their designees. The Operations Board performs the following functions: 1) Oversees the operation of Valley Com, advises and makes recommendations to the Administration Board; 2) Makes recommendations on Director selection; 3) Presents proposed policies and budget to the Administration Board; 4) Approves disbursement of funds by the Director. The Director presents a proposed budget to the Operations Board on or before August 15 of each year. Said budget is then presented to the Administration Board by September 1 of each year. The Administration Board can make changes to the proposed Valley Com budget as it finds necessary, but final approval falls to the legislative body of each participating city in accordance with the provisions of the Interlocal Agreement. In August 1993, Valley Com entered into an Interlocal Cooperation Agreement, pursuant to Chapter 39.34 RCW, with the sub-regions of King County, Seattle and Eastside Public Safety Communications Agency (EPSCA). This agreement governs the development, acquisition and installation of the 800 MHz emergency radio communications system (system) funded by the $57 million King County levy. This agreement provides that upon voluntary termination of any sub-region participation in the system, it surrenders its radio frequencies, relinquishes its equipment and transfers any unexpended levy proceeds and association equipment replacement reserves to another sub- region or consortium of sub-regions. 91 CITY OF AUBURN: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS The share of equity belonging to the five participating cities is as follows: Equity Dec. 31, 2008 $4,454,176 $ 6,372,363 $4,234,611 $2,570,406 $ 2,689,657 $ 20, 321, 213 Current year change 199,747 255,808 174,166 90,843 213,819 934,383 Equity Dec 31, 2009 $ 4,653,923 $ 6,628,171 $4,408,777 $ 2,661,249 $ 2,903,476 $ 21,255,596 % of equity 21.90% 31.18% 20.74% 12.52% 13.6611/c. % of 2009 distribution 21.38%I 27.38% 18.64% 9.72% 22.88% Liabilities are the responsibility of the five participating cities in direct proportion to their equity position. Complete audited financial statements for Valley Communications Center can be obtained from Valley Communications Center, 27519 108th Ave SE, Kent, WA 98030, or telephone 253-372- 1300. South Correctional Entity (SCORE) The South Correctional Entity (SCORE) consolidated correctional facility was established February 25, 2009, when an Interlocal Agreement (the "Original Interlocal Agreement") was entered into by seven participating municipal governments, the "Member Cities" of Auburn, Burien, Des Moines, Federal Way, Renton, SeaTac and Tukwila, under the authority of the "Interlocal Cooperation Act" (RCW 39.34). This "Original Interlocal Agreement" was amended and restated October 1, 2009 and named the City of Des Moines as the "Host City" and the remaining Member Cities as "Owner Cities". This interlocal agreement is known as the "Formation Interlocal Agreement". Pursuant to a separate "Host City Agreement" dated October 1, 2009, the Host City will not enjoy the same equity position as the Owner Cities until all debts issued are paid and the Host City fulfills all of its obligations as outlined in the Agreement. SCORE, an governmental administrative agency pursuant to RCW 39.34.030 (3), has the power to acquire, construct, own, operate, maintain, equip, and improve a correctional facility known as the "SCORE Facility" and to provide correctional services and functions incidental thereto, for the purpose of detaining arrestees and sentenced offenders in the furtherance of public safety and emergencies within the jurisdiction of the Member Cities. The SCORE Facility may serve the Member Cities and Subscribing Agencies which are in need of correctional facilities. Any agreement with a Subscribing Agency shall be in writing and approved by SCORE as provided within the SCORE Formation Interlocal Agreement. Financing for the acquisition, construction, equipping, and improvement of the SCORE Facility will be provided by bonds issued by the South Correctional Entity Facility Public Development Authority (the "SCORE PDA"), a public development authority chartered by the City of Renton pursuant to RCW 35.21.730 through 35.21.755 and secured by the full faith and credit of the Cities of Auburn, Burien Federal Way, Renton, SeaTac, and Tukwila (the "Owner Cities'). The SCORE PDA issued $86 million in special obligation bonds in 2009 to carry out the facility development project. The following is a summary of the debt service requirements for the bond issue: 92 CITY OF AUBURN: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS Summa of Debt Service Req uirements Debt Service Schedule Debt Service Allocation to Owner Cities 35% BABs Auburn Burien Federal Wag Renton SeaTac Tukwila Year Pnnclpal Interest Subslay Iotal 31% 4% 18% 3[% 3% tl% 2010 $ - £ 3,394,191 $ (265,223) $ 3,128,968 $ 969.980 $ 125,159 $ 563,214 $ 1,126,428 $ 93,869 $ 250,317 2011 - 5,155,732 (1,675,089) 3 .480,643 1,078 999 139,226 626,516 1,253,031 104,419 278,451 2112 - b, 1bb, l32 (1,675,089) 3,48U,643 1,Un;.J l 139,228 626,blb 1,2b3,U31 1U4,419 2td,4bl 2013 1,915,000 5,126,998 (1,675,089) 5,366,909 1,663,742 214,676 966,044 1,932,087 161,007 429,353 2114 1,95U,000 6,Ubb,6bb (1,854,915) 5,381,591 1,b82,U93 214,4b4 9b5,u8b 1,93U,113 16U,848 428,921 2015-2019 10,750,000 24,045,404 (8,092,315) 26,703,089 8,277 958 1,068,124 4,806,556 9,613,112 801,093 2,136,247 2020-2024 12,905,000 21,102,168 (7 405,227) 26,601,941 8,246 602 1,064,078 4,788,349 9,576,699 798,058 2,128,155 2U2b-2029 lb,blb,000 16,833,lub (6,067,796) 26,44U,J1U 8,196,ti82 1,Ubl,b3b 4,lb9,3b4 9,blu,128 lJ3, 22! 2,11 b, 213 2030-2034 19,265,000 11,158,380 (4,128,483) 26,294,897 8,151,418 1,051,796 4,733,081 9,466,163 788,847 2,103,592 2035-2039 23,775,000 4,064,705 1,697,914 26,141,791 8,103,955 1,045,672 4,705,522 9,411,045 784,254 2,091,343. l otals $ Ub,2Jb,000 $ 101,103,582 $ (34,337,200) $ 153,001,382 $ 47,430,428 $ 6,120,057 $ 27,540,248 $ 55,080,497 $ 4,590,041 $ 12,240,109 Note: Interest is to De paid Irom bona proceeds tlunng the construction period (lulu - 2U11) 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, 2009 related to SCORE: South Correctional Entity (SCORE) 2009 Owner Cities Equity Allocation Member City Percent of Equity 2008 Equity Balance 2009 Distribution 2009 Equity Balance Auburn 31. 00% $ $ 1,692,471 $ 1,692,471 Burien 4. 00% 218,383 218,383 Federal Way 18. 00% 982,725 982,725 Renton 36. 00% 1,965,450 1,965,450 SeaTac 3. 00% 163,787 163,787 Tukwila 8. 00% 436,767 436,767 Grand Totals 100. 00% $ $ 5,459,583 $ 5,459,583 Completed financial statements for SCORE and SCORE PDA can be obtained from the SCORE office, City of Renton, 1055 South Grady Way, Renton, WA 98057. NOTE 16 -JOINTLY GOVERNED ORGANIZATION / RELATED PARTY Residents of the cities of Auburn, Algona and Pacific approved in the November 7, 2006 general election the creation of a regional fire authority pursuant to RCW 52.26. The new regional fire protection service authority, called the Valley Regional Fire Authority (VRFA), provides first responder fire and emergency medical services to residents of Auburn, Algona and Pacific. The VRFA is a new municipal corporation, with its own Governing Board, and is legally separate from the three cities it serves. The Governing Board of the VRFA consists of the Mayors of the three cities within the VRFA service area, as well as two Councilmembers from each city. Membership on the Governing Board is made by appointment from the city council of the respective member cities. Effective January 1, 2007, all personnel, assets, equipment and contractual obligations of the former Auburn Fire Department were transferred to the VRFA. Similar transfers were made by the cities of Algona and Pacific. In accordance with the interlocal agreement at time of formation, each member city retained its obligation for LEOFF 1 firefighter and Fire Relief and Pension Plan obligations. During 2009 Auburn paid $28,446 for the employer's share of active LEOFF 1 firefighter medical premiums and benefit payments. Premium and benefit payments for retired LEOFF 1 firefighters for 2009 were $166,954. Medical premiums and benefit payments made under the Fire Relief and Pension Plan for 2009 were $150,800. 93 CITY OF AUBURN: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS NOTE 17 - CONTINGENCIES AND LITIGATION As of December 31, 2009, a number of claims were pending against the City for damages and legal actions. While the outcome of these actions is uncertain, no losses are clearly anticipated at this time due to these pending claims. In the event of a liability finding against the City, it is anticipated that any potential adverse judgment against the City also would be subject to coverage under the City's comprehensive liability insurance, including public officials' errors and omission insurance and general liability insurance. NOTE 18 - RISK MANAGEMENT & INSURANCE Risk Management The City is exposed to various risks of loss such as: theft and damage and destruction of assets, errors and omissions, injuries or property damage to others, employees' health, and natural disasters. All risk financing activities are accounted for in the Insurance internal service fund. To insure against risks of loss the City of Auburn is a member of the Washington Cities Insurance Authority (WCIA). Utilizing Chapter 48.62 RCW (self-insurance regulation) and Chapter 39.34 RCW (Interlocal Cooperation Act), nine cities originally formed WCIA on January 1, 1981. WCIA was created for the purpose of providing a pooling mechanism for jointly purchasing insurance, jointly self- insuring, and / or jointly contracting for risk management services. WCIA has a total of 136 Members. New members initially contract for a three-year term, and thereafter automatically renew on an annual basis. A one-year withdrawal notice is required before membership can be terminated. Termination does not relieve a former member from its unresolved loss history incurred during membership. Liability coverage is written on an occurrence basis, without deductibles. Coverage includes general, automobile, police, public officials' errors or omissions, stop gap, and employee benefits liability. Limits are $4 million per occurrence self insured layer, and $16 million per occurrence in the re-insured excess layer. The excess layer is insured by the purchase of reinsurance and insurance and is subject to aggregate limits. Total limits are $20 million per occurrence subject to aggregate sublimits in the excess layers. The Board of Directors determines the limits and terms of coverage annually. Insurance coverage for property, automobile physical damage, fidelity, inland marine, and boiler and machinery are purchased on a group basis. Various deductibles apply by type of coverage. Property insurance and auto physical damage are self-funded from the members' deductible to $500,000, for all perils other than flood and earthquake, and insured above that amount by the purchase of reinsurance. In-house services include risk management consultation, loss control field services, claims and litigation administration, and loss analyses. WCIA contracts for the claims investigation consultants for personnel issues and land use problems, insurance brokerage, and lobbyist services. WCIA is fully funded by its members, who make annual assessments on a prospectively rated basis, as determined by an outside, independent actuary. The assessment covers loss, loss adjustment, and administrative expenses. As outlined in the interlocal, WCIA retains the right to additionally assess the membership for any funding shortfall. 94 CITY OF AUBURN: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS An investment committee, using investment brokers, produces additional revenue by investment of WCIA's assets in financial instruments which comply with all State guidelines. These revenues directly offset portions of the membership's annual assessment. A Board of Directors governs WCIA, which is comprised of one designated representative from each member. The Board elects an Executive Committee and appoints a Treasurer to provide general policy direction for the organization. The WCIA Executive Director reports to the Executive Committee and is responsible for conducting the day to day operations of WCIA. No settlement has exceeded insurance coverage over the past three years Workers' Compensation Title 51 RCW requires the City to ensure payment of benefits for job-related injuries and diseases through the Workers' Compensation fund or through self-insurance. The City participates in the State of Washington's Workers' Compensation program. Premiums are based on individual employer's reported payroll hours and insurance rates based on each employer's risk classification and past experience. The premium is paid by employer and employee contributions. NOTE 19 - SUBSEQUENT EVENTS On May 3, 2010, the City of Auburn issued approximately $31,990,000 in Limited General Obligation (LTGO) Bonds. The bonds will be used for the following purposes: 1) refunding all or a portion of the City's outstanding LTGO 1998 bonds; 2) to pay for downtown infrastructure improvements which includes utility relocation and upsizing, a promenade with open plazas, and a new street surface, and 3) to pay for a portion of the cost 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 (Note 8). 95 CITY OF AUBURN: 2009 CAFR NOTES TO THE FINANCIAL STATEMENTS !l~ C17 V -IF * MORE THAN YOU IMAGINED 96 CITY OF AUBURN: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES NON-MAJOR GOVERNMENTAL FUNDS THE CITY HAS FOUR TYPES OF NON-MAJOR GOVERNMENTAL FUNDS: Special Revenue Funds Special revenue funds account for the proceeds of specific revenue sources and are segregated into individual funds to ensure that expenditures are made exclusively for qualified purposes. Special revenue funds are accounted for on a modified accrual basis. Biennial budgets are adopted with appropriations lapsing at year-end. Debt Service Funds Debt service funds account for payments of principal and interest on general obligation and special assessment long-term debt. Capital Project Funds Capital project funds account for the City of Auburn's financial resources used for the acquisition or construction of major non-proprietary capital facilities. Permanent Funds Permanent funds are used to report resources that are legally restricted to the extent that only earnings, and not principal, may be used for purposes that support City programs that are for the benefit of the City or its citizens. 97 CITY OF AUBURN: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF AUBURN, WASHINGTON COMBINING BALANCE SHEET NON-MAJOR GOVERNMENT FUNDS DECEMBER 31, 2009 TOTAL TOTAL TOTAL TOTAL TOTAL NON-MAJOR NON-MAJOR NON-MAJOR NON-MAJOR NON-MAJOR SPECIAL REVENUE DEBT SERVICE CAPITAL PROJ PERMANENT GOVERNMENTAL FUNDS FUNDS FUNDS FUNDS FUNDS ASSETS: CASH AND CASH EQUIVALENTS $ 14,103,143 $ 185,179 $ 645,778 $ 1,506.362 $ 16,440,462 INVESTMENTS - - - - - RECEIVABLES: OTHER RECEIVABLES 56,345 - 56.345 SPECIAL ASSESSMENTS - 650.919 - 650.919 DUE FROM OTHER GOVERNMENTAL UNITS 127,435 - 21,379 148,814 DEFERRED CHARGES 4.320 - - - 4,320 TOTAL ASSETS $ 14,291,243 $ 836.098 $ 667,157 $ 1,506,362 $ 17,300,860 LIABILITIES AND FUND BALANCES: CURRENT PAYABLES DEFERRED REVENUE FUND BALANCES: RESERVED FOR: DEBT SERVICE ENDOWMENT UNRESERVED DESIGNATED FOR MITIGATION UNDESIGNATED $ 347,848 $ - $ 15,490 $ $ 363.338 - 650,919 - 650.919 347.848 650.919 15.490 1,014,257 185,179 - 185,179 1,352, 859 1,352,859 5,971,594 - - 5,971.594 7,971,801 - 651,667 153.503 8,776.971 13.943.395 185.179 651.667 1.506.362 16.286.603 98 CITY OF AUBURN: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF AUBURN, WASHINGTON COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NON-MAJOR GOVERNMENT FUNDS FOR THE YEAR ENDED DECEMBER 31, 2009 TOTAL TOTAL TOTAL TOTAL TOTAL NON-MAJOR NON-MAJOR NON-MAJOR NON-MAJOR NON-MAJOR SPECIAL REVENUE DEBT SERVICE CAPITAL PROJECTS PERMANENT GOVERNMENTAL REVENUES: TAXES: PROPERTY INTERFUND UTILITY UTILITY EXCISE OTHER INTERGOVERNMENTAL CHARGES FOR SERVICES SPECIAL ASSESSMENTS INVESTMENT EARNINGS MISCELLANEOUS TOTAL REVENUES EXPENDITURES: CURRENT: SECURITY OF PERSONS & PROPERTY TRANSPORTATION ECONOMIC ENVIRONMENT DEBT SERVICE PRINCIPAL INTEREST CAPITAL OUTLAY TOTAL EXPENDITURES EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) $ 2,200,000 $ $ 113,152 $ $ 2.313,152 394.959 - 394.959 1.133.464 1.133.464 70,777 70,777 52,480 - 52,480 629.017 150.588 779.605 1.700.823 22.546 40.639 1.764.008 51,467 - 51,467 95.516 36.018 2.626 25.327 159,487 304.926 - 64.079 - 369,005 6,581,962 87,485 352,991 65,966 7,088,404 405.831 405,831 3.045.695 3.045.695 687.387 687.387 230,825 230,825 135.546 - 135,546 - - 1,183,571 1,183,571 4,138.913 366,371 1,183.571 5.688.855 SALE OF CAPITAL ASSETS - - 26.977 26.977 TRANSFERS IN (Note 5) 1,028,099 302,500 1,170,441 2,501,040 TRANSFERS OUT (Note 5) (2,439,386) (10,000) - (40,000) (2,489,386) TOTAL OTHER FINANCING SOURCES (USES) (1,411,287) 292,500 1,197,418 (40,000) 38,631 NET CHANGE IN FUND BALANCES 1.031.762 13.614 366.838 25.966 1.438.180 FUND BALANCES - BEGINNING 12,911,633 171,565 284,829 1,480,396 14,848,423 FUND BALANCES -ENDING i $ 13,943.395 $ 185,179 $ 651,667 $ 1.506.362 $ 16.286.603 99 CITY OF AUBURN: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES f T'T ~►T fl ~ ~ * MORE THAN YOU IMAGINED 100 CITY OF AUBURN: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES NON-MAJOR GOVERNMENTAL FUNDS Special Revenue Funds Special revenue funds account for the proceeds of specific revenue sources and are segregated into individual funds to ensure that expenditures are made exclusively for qualified purposes. Special revenue funds are accounted for on a modified accrual basis. Annual budgets are adopted with appropriations lapsing each year of the biennium. The City has ten non-major special revenue funds The Local Street Fund - This fund was created when Auburn voters approved the Save Our Streets lid lift in 2004 and is used to account for all revenues and expenditures related to this initiative. Hotel/Motel Tax Fund - This fund was created to account for the hotel/motel taxes levied to support City tourist promotion. Arterial Street Preservation Fund - This fund was created to repair classified arterial streets and is funded from a one percent utility tax increase that was adopted by Council in 2008. Drug Forfeiture Fund - Money seized and forfeited from drug activity is deposited in this fund to be used exclusively for drug investigation and enforcement. Local Law Enforcement Block Grant - Accounts for police overtime relating to community oriented policing. The Housing and Community Development Fund - Accounts for projects associated with the Community Development Block Grant program. The Recreational Trails Fund - Created for the purpose of trail development. This is a tax-supported fund. The Business Improvement Area Fund - Accounts for special assessments on downtown merchants for ongoing services and for improvements made to the downtown area. The Cumulative Reserve Fund - Created for the purpose of revenue stabilization for future operations. Mitigation Fees - Accounts for the receipt of contracted mitigation fees for streets and fire service. 101 CITY OF AUBURN: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF AUBURN, WASHINGTON COMBINING BALANCE SHEET NON-MAJOR SPECIAL REVENUE FUNDS DECEMBER 31. 2009 Page 1 of 2 HOTEL/ ARTERIAL LOCAL LOCAL MOTEL STREET DRUG LAW STREEETS TAX PRESERVATION FORFEITURE ENFORCEMENT ASSETS: CASH AND CASH EQUIVALENTS RECEIVABLES: OTHER RECEIVABLES DUE FROM OTHER GOVERNMENTAL UNITS DEFERRED CHARGES TOTALASSETS LIABILITIES AND FUND BALANCES: CURRENT PAYABLES TOTAL LIABILITIES FUND BALANCES: UNRESERVED DESIGNATED FOR MITIGATION UNDESIGNATED TOTAL FUND BALANCES $ 1.550,721 $ 99.870 $ 179.388 $ 767,905 $ 15,418 56,345 - 28,940 - 4.320 - - $ 1,550,721 $ 104,190 $ 235,733 $ 796,845 $ 15,418 $ 62,116 $ 3,514 $ 99,144 $ 51,099 $ 62,116 3,514 99,144 51.099 1,488,605 100,676 136,589 745,746 15,418 1,488,605 100.676 136.589 745,746 15.418 102 CITY OF AUBURN: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES HOUSING BUSINESS COMMUNITY RECREATION IMPROVEMENT CUMULATIVE MITIGATION Page 2 of 2 TOTAL NON-MAJOR SPECIAL REVENUE $ 11.131 $ 44,976 $ 56.103 $ 5.360.687 $ 6.016,944 $ 14,103,143 - - - - - 56.345 98,495 - - 127,435 - - - - - 4,320 $ 109,626 $ 44,976 $ 56,103 $ 5,360,687 $ 6,016,944 $ 14,291,243 $ 75,818 $ $ 10,807 $ $ 45,350 $ 347,848 75,818 10,807 - 45,350 347,848 33,808 44,976 45,296 5,360,687 33,808 44,976 45,296 5,360,687 5,971,594 5,971,594 - 7,971,801 5,971,594 13,943,395 103 CITY OF AUBURN: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF AUBURN, WASHINGTON COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NON-MAJOR SPECIAL REVENUE FUNDS FOR THE YEAR ENDED DECEMBER 31, 2009 Page 1 of 2 HOTEL/ ARTERIAL LOCAL LAW LOCAL MOTEL STREET DRUG ENFORCEMENT STREETS TAX PRESERVATION FORFEITURE GRANT REVENUES: TAXES: PROPERTY $ 2,200,000 $ $ - $ $ INTERFUND UTILITY - 394,959 UTILITY 1,133,464 EXCISE 70,777 - OTHER - INTERGOVERNMENTAL - 56,318 CHARGES FOR SERVICES - 1,350 - - - INVESTMENT EARNINGS 7,574 672 3,357 4,662 180 MISCELLANEOUS - - - 304,926 - TOTAL REVENUES 2.207,574 71799 1,531.780 365,906 180 EXPENDITURES: CURRENT: SECURITY OF PERSONS & PROPERTY TRANSPORTATION ECONOMIC ENVIRONMENT 1,536,362 - 74,159 - - - 1,536,362 74,159 1,509,333 294,050 13,681 1,509,333 294,050 13,681 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES): TRANSFERS IN (Note 5) TRANSFERS OUT (Note 5) TOTAL OTHER FINANCING SOURCES (USES) NET CHANGE IN FUND BALANCES FUND BALANCES- BEGINNING 150,000 114,142 821,212 (1,360) 136,589 71,856 (13,501) 667,393 102,036 - 673,890 28,919 $ 1,488.605 $ 100,676 $ 136,589 $ 745,746 $ 15,418 104 CITY OF AUBURN: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES Page 2 of 2 TOTAL HOUSING BUSINESS NON-MAJOR COMMUNITY RECREATION IMPROVEMENT CUMULATIVE MITIGATION SPECIAL REVENUE DEVELOPMENT TRAILS AREA RESERVE FEES FUNDS $ $ $ $ $ $ 2,200,000 394,959 1,133,464 70,777 52.480 52,480 572.699 - 629,017 - - - 1,699,473 1,700,823 315 405 37,949 40,402 95,516 304,926 581.962 98,100 405,831 - - - 3,045,695 570,133 43,095 - 687,387 570,133 43,095 98,100 4,138, 913 7,000 766,967 1,028,099 - (1,300,785) (1,138,601) (2,439,386) 7,000 (543,828) (1,138,601) (1,411,287) 2,566 7,315 9,790 (505,879) 503,174 1,031,762 31,242 37,661 35,506 5,866,566 5,468,420 12,911,633 105 CITY OF AUBURN: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF AUBURN, WASHINGTON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL LOCAL STREETS SPECIAL REVENUE FUND FOR THE YEAR ENDED DECEMBER 31, 2009 ORIGINAL BUDGET (GAAP BASIS) FINAL AMENDED BUDGET (GAAP BASIS) ACTUAL RESULTS VARIANCE WITH FINAL BUDGET POSITIVE (NEGATIVE) REVENUES: TAXES: PROPERTY $ 2,200,000 $ 2,200,000 $ 2,200,000 $ INVESTMENT EARNINGS 13.200 13,200 7.574 (5.626) MISCELLANEOUS TOTAL REVENUES - 2,213,200 - 2,213,200 - 2,207,574 (5,626) EXPENDITURES: CURRENT: TRANSPORTATION 2,200.000 2,420,150 1.536.362 883.788 TOTAL EXPENDITURES 2,200,000 2,420,150 1.536.362 883,788 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 13,200 (206,950) 671,212 878,162 OTHER FINANCING SOURCES [USES): TRANSFERS IN (Note 5) TOTAL OTHER FINANCING SOURCES (USES) 150,000 150.000 150,000 150,000 150,000 150.000 - - NET CHANGE IN FUND BALANCES 163,200 (56,950) 821,212 878,162 FUND BALANCES- BEGINNING FUND BALANCES - ENDING 441.441 $ 604.641 667,394 $ 610,444 667.393 $ 1,488.605 (1) $ 878.161 106 CITY OF AUBURN: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF AUBURN, WASHINGTON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL HOTEL/MOTEL TAX SPECIAL REVENUE FUND FOR THE YEAR ENDED DECEMBER 31, 2009 FINAL VARIANCE WITH ORIGINAL AMENDED FINAL BUDGET BUDGET BUDGET ACTUAL POSITIVE (GAAP BASIS) (GAAP BASIS) RESULTS (NEGATIVE) REVENUES: TAXES: EXCISE $ 76,000 $ 76,000 $ 70,777 $ (5,223) CHARGES FOR SERVICES 9,100 9,100 1,350 (7,750) INVESTMENT EARNINGS 2,500 2,500 672 (1,828) TOTAL REVENUES 87,600 87,600 72,799 (14,801) EXPENDITURES: CURRENT: ECONOMIC ENVIRONMENT 153,000 185,000 74,159 110,841 TOTAL EXPENDITURES 153 000 185 000 74 159 110 841 , , , , EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (65,400) (97.400) (1,360) 96.040 NET CHANGE IN FUND BALANCES (65,400) (97,400) (1,360) 96,040 FUND BALANCES- BEGINNING 98,000 102,036 102,036 FUND BALANCES- ENDING $ 32,600 $ 4.636 $ 100,676 $ 96.040 107 CITY OF AUBURN: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF AUBURN, WASHINGTON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL ARTERIAL STREET PRESERVATION SPECIAL REVENUE FUND FOR THE YEAR ENDED DECEMBER 31, 2009 FINAL VARIANCE WITH ORIGINAL AMENDED FINAL BUDGET BUDGET BUDGET ACTUAL POSITIVE (GAAP BASIS) (GAAP BASIS) RESULTS (NEGATIVE) REVENUES: TAXES: INTERFUND UTILITY $ 383,200 $ 383,200 $ 394,959 $ 11,759 UTILITY 1,116,800 1,116,800 1,133,464 16,664 INVESTMENT EARNINGS 27,000 27,000 3,357 (23,643) TOTAL REVENUES 1,527,000 1.527.000 1,531.780 4,780 EXPENDITURES: CURRENT: TRANSPORTATION 1,500,000 1,819,000 1,509,333 309,667 TOTAL EXPENDITURES 1,500.000 1.819.000 1.509.333 309.667 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 27,000 (292,000) 22,447 314,447 OTHER FINANCING SOURCES (USES): TRANSFERS IN (Note 5) 296,700 114,142 (182,558) TRANSFERS OUT (Note 5) - - TOTAL OTHER FINANCING SOURCES (USES) 296,700 114,142 (182,558) NET CHANGE IN FUND BALANCES FUND BALANCES- BEGINNING 27.000 4.700 136,589 131,889 108 CITY OF AUBURN: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF AUBURN, WASHINGTON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL DRUG FORFEITURE SPECIAL REVENUE FUND FOR THE YEAR ENDED DECEMBER 31, 2009 FINAL VARIANCE WITH ORIGINAL AMENDED FINAL BUDGET BUDGET BUDGET ACTUAL POSITIVE (GAAP BASIS) (GAAP BASIS) RESULTS (NEGATIVE) REVENUES: INTERGOVERNMENTAL $ - $ - $ 56,318 $ 56,318 INVESTMENT EARNINGS 15,000 15,000 4,662 (10,338) MISCELLANEOUS 200,000 200,000 304,926 104,926 TOTAL REVENUES 215,000 215,000 365,906 150,906 EXPENDITURES: CURRENT: SECURITY OF PERSONS & PROPERTY 355,700 394,560 294,050 100,510 TOTAL EXPENDITURES 355,700 394,560 294,050 100,510 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (140,700) (179,560) 71,856 251,416 NET CHANGE IN FUND BALANCES (140,700) (179,560) 71,856 251,416 FUND BALANCES- BEGINNING 554,807 673,890 673,890 - FUND BALANCES- ENDING $ 414.107 $ 494.330 $ 745,746 $ 251,416 109 CITY OF AUBURN: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF AUBURN, WASHINGTON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL LOCAL LAW ENFORCEMENT GRANT SPECIAL REVENUE FUND FOR THE YEAR ENDED DECEMBER 31. 2009 FINAL VARIANCE WITH ORIGINAL AMENDED FINAL BUDGET BUDGET BUDGET ACTUAL POSITIVE (GAAP BASIS) (GAAP BASIS) RESULTS (NEGATIVE) REVENUES: INTERGOVERNMENTAL INVESTMENT EARNINGS TOTALREVENUES $ 13,000 $ 13,000 $ $ (13,000) EXPENDITURES: CURRENT: SECURITY OF PERSONS & PROPERTY TOTAL EXPENDITURES EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES): TRANSFERS IN (Note 5) TRANSFERS OUT (Note 5) TOTAL OTHER FINANCING SOURCES (USES) NET CHANGE IN FUND BALANCES FUND BALANCES- BEGINNING FUND BALANCES- ENDING 100 100 180 80 13,100 13,100 180 (12,920) 14,400 14,400 13,681 719 14,400 14,400 13,681 719 1,300 1.300 (1,300) (13,501) (13.501) 12,261 28,919 28,919 $ 12,261 $ 28,919 $ 15,418 $ (13,501) 110 CITY OF AUBURN: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF AUBURN, WASHINGTON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL HOUSING & COMMUNITY DEVELOPMENT SPECIAL REVENUE FUND FOR THE YEAR ENDED DECEMBER 31, 2009 FINAL VARIANCE WITH ORIGINAL AMENDED FINAL BUDGET BUDGET BUDGET ACTUAL POSITIVE (GAAP BASIS) (GAAP BASIS) RESULTS (NEGATIVE) REVENUES: INTERGOVERNMENTAL TOTAL REVENUES $ 600,900 600,900 $ 600,900 600,900 $ 672,699 572,699 $ (28,201) (28.201) EXPENDITURES: CURRENT: ECONOMIC ENVIRONMENT 600.900 600.020 570.133 29,887 HEALTH & HUMAN SERVICES - - - - 111 CITY OF AUBURN: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF AUBURN, WASHINGTON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL RECREATION TRAILS SPECIAL REVENUE FUND FOR THE YEAR ENDED DECEMBER 31, 2009 ORIGINAL BUDGET (GAAP BASIS) FINAL AMENDED BUDGET (GAAP BASIS) ACTUAL RESULTS VARIANCE WITH FINAL BUDGET POSITIVE (NEGATIVE) REVENUES: INVESTMENT EARNINGS TOTAL REVENUES $ 800 800 $ 800 800 $ 315 315 $ (485) (485) EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 800 800 315 (485) OTHER FINANCING SOURCES (USES): TRANSFERS IN (Note 5) TOTAL OTHER FINANCING SOURCES (USES) 7,000 7,000 7,000 7,000 7,000 7,000 - - NET CHANGE IN FUND BALANCES 7,800 7,800 7,315 (485) FUND BALANCES- BEGINNING 37,494 37,661 37,661 FUND BALANCES- ENDING $ 45,294 $ 45,461 $ 44,976 $ (485) 112 CITY OF AUBURN: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF AUBURN, WASHINGTON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL BUSINESS IMPROVEMENT AREA SPECIAL REVENUE FUND FOR THE YEAR ENDED DECEMBER 31, 2009 FINAL VARIANCE WITH ORIGINAL AMENDED FINAL BUDGET BUDGET BUDGET ACTUAL POSITIVE (GAAP BASIS) (GAAP BASIS) RESULTS (NEGATIVE) REVENUES: TAXES: OTHER $ 53,000 $ 53,000 $ 52,480 $ (520) INVESTMENT EARNINGS 2,000 2,000 405 (1,595) TOTAL REVENUES 55.000 55,000 52,885 (2,115) EXPENDITURES: CURRENT: ECONOMIC ENVIRONMENT TOTAL EXPENDITURES EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES NET CHANGE IN FUND BALANCES FUND BALANCES- BEGINNING FUND BALANCES- ENDING 53,000 53,000 43,095 9,905 53,000 53,000 43,095 9,905 2,000 2,000 9,790 7,790 68,958 35,506 35,506 - $ 70,958 $ 37,506 $ 45,296 $ 7,790 113 CITY OF AUBURN: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF AUBURN, WASHINGTON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL CUMULATIVE RESERVE SPECIAL REVENUE FUND FOR THE YEAR ENDED DECEMBER 31, 2009 ORIGINAL BUDGET (GAAP BASIS) FINAL AMENDED BUDGET (GAAP BASIS) ACTUAL RESULTS VARIANCE WITH FINAL BUDGET POSITIVE (NEGATIVE) REVENUES: TAXES: INVESTMENT EARNINGS TOTAL REVENUES $ 156,000 156,000 $ 156,000 156,000 $ 37,949 37,949 $ (118,051) (118,051) EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 156,000 156,000 37,949 (118,051) OTHER FINANCING SOURCES (USES): TRANSFERS IN (Note 5) - 1,500,000 756,957 (743,043) TRANSFERS OUT (Note 5) (488,000) (4,100,000) (1,300,785) 2,799,215 NET CHANGE IN FUND BALANCES (332.000) (2.444.000) (505.879) 1,938,121 FUND BALANCES- BEGINNING 5,703,268 5,866,566 5,866,566 FUND BALANCES- ENDING $ 5,371,268 $ 3,422,566 $ 5,360,687 $ 1,938,121 114 CITY OF AUBURN: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF AUBURN, WASHINGTON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL MITIGATION SPECIAL REVENUE FUND FOR THE YEAR ENDED DECEMBER 31, 2009 FINAL VARIANCE WITH ORIGINAL AMENDED FINAL BUDGET BUDGET BUDGET ACTUAL POSITIVE (GAAP BASIS) (GAAP BASIS) RESULTS (NEGATIVE) REVENUES CHARGES FOR SERVICES INVESTMENT EARNINGS EXPENDITURES: CURRENT: SECURITY OF PERSONS & PROPERTY EXCESS (DEFICIENCY) OF REVENUES OTHER FINANCING SOURCES (USES): TRANSFERS OUT (.Note 5) TOTAL OTHER FINANCING SOURCES (USES) NET CHANGE IN FUND BALANCES FUND BALANCES- BEGINNING FUND BALANCES- ENDING $ 810,000 $ 1,397,467 $ 1,699,473 $ 302,006 142,000 142,000 40,402 (101,598) 952,000 1,539,467 1,739,875 200,408 (1,575,100) (1,788,120) (1,138,601) 649,519 (1.575,100) (1,788120) (1,138.601) 649.519 (721,200) (460,753) 503,174 963,927 5,309,345 5,46^0,420 5,46^0,420 - $ 4,588,145 $ 5,007,667 $ 5,971,594 $ 963,927 115 CITY OF AUBURN: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES f T'T ~►T fl ~ ~ * MORE THAN YOU IMAGINED 116 CITY OF AUBURN: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES NON-MAJOR GOVERNMENTAL FUNDS Debt Service Funds Debt service funds account for payments of principal and interest on general obligation and special assessment long-term debt. The City of Auburn has one outstanding general obligation issue, and three special assessment funds. The 1998 General Obligation Library Bonds - Accounts for debt service on a Council-approved bond issue to finance, in conjunction with King County, the construction of a new library in the City. The L.I.D. Guarantee Fund - This fund provides financial security for out- standing L.I.D. bonds and special assessment debt. Special Assessment Debt Fund - Accounts for the special assessment collections and debt service payments for all local improvement districts located within the City. 117 CITY OF AUBURN: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF AUBURN, WASHINGTON COMBINING BALANCE SHEET NON-MAJOR DEBT SERVICE FUNDS DECEMBER 31, 2009 1998 GO LIBRARY BOND DEBT GU LID SPECIAL ARANTEE ASSESSMENTS TOTAL NON-MAJOR DEBT SERVICE FUNDS ASSETS: CASH AND CASH EQUIVALENTS $ 37,746 $ 52,599 $ 94,834 $ 185,179 RECEIVABLES: SPECIAL ASSESSMENTS TOTAL ASSETS - $ 37,746 $ - 650,919 52,599 $ 745,753 $ 650,919 836,098 LIABILITIES AND FUND BALANCES: DEFERRED REVENUE $ - $ - $ 650,919 $ 650,919 TOTAL LIABILITIES - 650,919 650,919 FUND BALANCES: RESERVED FOR: DEBT SERVICE 37,746 - 94,834 132.580 LID GUARANTEE TOTAL FUND BALANCES TOTAL LIABILITIES AND FUND BALANCES - 37.746 $ 37,746 $ 52.599 - 52.599 94,834 52,599 $ 745,753 $ 52.599 185.179 836,098 118 CITY OF AUBURN: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF AUBURN, WASHINGTON COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE NON-MAJOR DEBT SERVICE FUNDS FOR THE YEAR ENDED DECEMBER 31, 2009 TOTAL 1998 G.O. NON-MAJOR LIBRARY L I D SPECIAL DEBT SERVIC BT GUARANTEE ASSESSMENTS TAXES: SPECIAL ASSESSMENTS $ - $ - $ 51,467 $ 51,467 INVESTMENT EARNINGS TOTAL REVENUES 1,083 1,083 369 369 34,566 86,033 36.018 87,485 EXPENDITURES: DEBT SERVICE PRINCIPAL 205,000 - 25,825 230,825 INTEREST TOTAL EXPENDITURES 102,440 307,440 - 33,106 58.931 135,546 366,371 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (306,357) 369 27,102 (278,886) OTHER FINANCING SOURCES (USES): TRANSFERS IN (Note 5) 302,500 - - 302,500 TRANSFERS OUT (Note 5) TOTAL OTHER FINANCING SOURCES (USES) - 302,500 (10,000) (10.000) - - (10,000) 292,500 NET CHANGE IN FUND BALANCES (3,857) (9,631) 27,102 13,614 FUND BALANCES - BEGINNING FUND BALANCES - ENDING 41,603 $ 37,746 $ 62,230 52,599 $ 67,732 94,834 $ 171,565 185,179 119 CITY OF AUBURN: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF * MORE THAN YOU IMAGINED 120 fi CITY OF AUBURN: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES NON-MAJOR GOVERNMENTAL FUNDS Capital Project Funds Capital projects funds account for the City of Auburn's financial resources used for the acquisition or construction of major non-proprietary capital facilities. Auburn has one non-major capital project fund. The Municipal Park Construction Fund - Accounts for park related construction activity and includes funding from a portion of field rental income and adult athletic team fees. 121 CITY OF AUBURN: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF AUBURN, WASHINGTON BALANCE SHEET NON-MAJOR CAPITAL PROJECT FUND DECEMBER 31, 2009 CONSTRUCTION FUNDS ASSETS: CASH AND CASH EQUIVALENTS $ 645,778 $ 645,778 DUE FROM OTHER GOVERNMENTAL UNITS 21,379 21,379 TOTAL ASSETS $ 667,157 $ 667,157 LIABILITIES AND FUND BALANCES: CURRENT PAYABLES $ 15,490 15,490 TOTAL LIABILITIES 15,490 15,490 FUND BALANCES: UNRESERVED UNDESIGNATED 651,667 $ 651,667 651,667 651,667 122 CITY OF AUBURN: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF AUBURN, WASHINGTON STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NON-MAJOR CAPITAL PROJECT FUND FOR THE YEAR ENDED DECEMBER 31. 2009 MUNICIPAL NON-MAJOR PARK CAPITAL PROJECTS CONSTRUCTION FUNDS REVENUES: TAXES: PROPERTY INTERGOVERNMENTAL CHARGES FOR SERVICES 113,152 $ 113,152 150,588 150,588 22.546 22.546 INVESTMENT EARNINGS 2,626 2,626 MISCELLANEOUS 64,079 64,079 TOTAL REVENUES 352,991 352,991 EXPENDITURES: CAPITAL OUTLAY 1,183,571 1,183,571 TOTAL EXPENDITURES 1,183,571 1,183.571 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES): SALES OF CAPITAL ASSETS TRANSFERS IN iNote 51 TOTAL OTHER FINANCING SOURCES (USES) 26,977 26,977 1,170,441 1,170,441 1,197,418 1,197,418 NET CHANGE IN FUND BALANCES FUND BALANCES - BEGINNING 366,838 284,829 366,838 284,829 123 CITY OF AUBURN: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF * MORE THAN YOU IMAGINED 124 fi CITY OF AUBURN: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES NON-MAJOR GOVERNMENTAL FUNDS Permanent Funds Permanent funds are used to report resources that are legally restricted to the extent that only earnings. and not principal, may be used for purposes that support City programs that are for the benefit of the City or its citizens. Auburn has one permanent fund. The Cemetery Endowed Care Fund - Accounts for non-expendable investments held by the City's trustee. The interest income from investments is available for use by the cemetery fund for capital enhancement and maintenance. 125 CITY OF AUBURN: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF AUBURN, WASHINGTON BALANCE SHEET PERMANENTFUND DECEMBER 31, 2009 CEMETERY ENDOWED CARE ASSETS: CASH AND CASH EQUIVALENTS NON-EXPENDABLE TRUST $ 1,506,362 INVESTMENTS - TOTAL ASSETS $ 1,506,362 FUND BALANCES: RESERVED FOR: ENDOWMENT UNRESERVED UNDESIGNATED $ 1,352,859 153,503 1,506,362 $ 1,506,362 126 CITY OF AUBURN: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF AUBURN, WASHINGTON STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE PERMANENT FUND FOR THE YEAR ENDED DECEMBER 31, 2009 CEMETERY ENDOWED CARE REVENUES: INCREASE TO ENDOWMENT FROM LOT SALES $ 40,639 INVESTMENT EARNINGS 25,327 TOTAL REVENUES 1 OTHER FINANCING SOURCES (USES): TRANSFERS OUT (Note 5) TOTAL OTHER FINANCING SOURCES (USES) NET CHANGE IN FUND BALANCE FUND BALANCE- BEGINNING FUND BALANCE- ENDING 40,000) 140,000) 25,966 1,480,396 $ 1,506,362 127 CITY OF AUBURN: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF * MORE THAN YOU IMAGINED 128 fi CITY OF AUBURN: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES NON-MAJOR PROPRIETARY FUNDS Enterprise Funds The City's enterprise funds are used to account for operations that are financed and operated in a manner similar to private business operations. The goods and services these funds provide to the general public are primarily financed by service charges. Enterprise funds are self-supporting and use the accrual method of accounting. Auburn has three non-major enterprise funds. The Airport Fund - Provides accounting of the activities of the Auburn Municipal Airport. Sources of income for the fund are leases, rentals, fuel charges, investment interest, and grant funding as available. The Cemetery Fund - Accounts for Mountain View Cemetery's operations. The Commercial Retail Fund - Accounts for revenues and expenses related to City-owned orleased property that is rented to commercial tenants. 129 CITY OF AUBURN: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF AUBURN, WASHINGTON COMBINING STATEMENT OF NET ASSETS NON-MAJOR ENTERPRISE FUNDS DECEMBER 31, 2009 TOTAL NON-MAJOR COMMERCIAL ENTERPRISE AIRPORT CEMETERY RETAIL FUNDS ASSETS: CURRENT ASSETS: CASH AND CASH EQUIVALENTS RESTRICTED CASH: CUSTOMER DEPOSITS CUSTOMER ACCOUNTS INVENTORIES TOTAL CURRENT ASSETS NONCURRENT ASSETS: LONG-TERM CONTRACTS AND NOTES CAPITAL ASSETS: LAND BUILDINGS AND EQUIPMENT IMPROVEMENTS OTHER THAN BUILDINGS CONSTRUCTION IN PROGRESS LESS: ACCUMULATED DEPRECIATION TOTAL CAPITAL ASSETS (NET OF A/D) LIABILITIES: CURRENT LIABILITIES: CURRENT PAYABLES EMPLOYEE LEAVE BENEFITS-CURRENT GENERAL OBLIGATION BONDS PAYABLE-CURRENT DEPOSITS TOTAL CURRENT LIABILITIES NONCURRENT LIABILITIES: DEFERRED REVENUE EMPLOYEE LEAVE BENEFITS GENERAL OBLIGATION BONDS PAYABLE TOTAL NONCURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS: INVESTED IN CAPITAL ASSETS, NET OF RELATED DEBT UNRESTRICTED TOTAL NET ASSETS 1,045.971 $ 341.503 $ 650,277 $ 2,037.751 69.888 - - 69.888 3.909 - 3.909 - 11,395 - 11,395 1,119,768 352,898 650,277 2,122,943 6.542 6.542 3.653.343 342.835 - 3.996.178 2,476,174 1,015,894 1,096,555 4,588,623 5,189.952 1.082.094 356,229 6,628.275 3,012.041 18.896 - 3.030.937 (4,396,840) (1,142,245) (629,120) (6,168,205) 9.934.670 1.317.474 823,664 12.075.808 26,939 36.399 63.338 1.797 16.179 17.976 85,000 85,000 69.888 69.888 183,624 52,578 236,202 - 6.542 6.542 594 5,347 5,941 1.182.567 498.373 1.680.940 1,183,161 510,262 1,693,423 8,667,103 819,102 823,664 10,309,869 1.020.550 294.972 650,277 1,965.799 $ 9,687.653 $ 1.114.074 $ 1,473,941 $ 12.275.668 130 CITY OF AUBURN: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF AUBURN, WASHINGTON COMBINING STATEMENT OF REVENUES. EXPENSES. AND CHANGES IN FUND NET ASSETS NON-MAJOR ENTERPRISE FUNDS FOR THE YEAR ENDED DECEMBER 31, 2009 TOTAL NON-MAJOR COMMERCIAL ENTERPRISE AIRPORT CEMETERY RETAIL FUNDS OPERATING REVENUES: CHARGES FOR SERVICES INTEREST OTHER OPERATING REVENUE TOTAL OPERATING REVENUES 659,563 $ 694,688 $ 1,470 1,354,251 1,470 OPERATING EXPENSES: OPERATIONS & MAINTENANCE ADMINISTRATION DEPRECIATION/AMORTIZATION OTHER OPERATING EXPENSES TOTAL OPERATING EXPENSES OPERATING INCOME (LOSS) NON-OPERATING REVENUE (EXPENSE) 2,479 524,788 527,267 420,446 284.526 - 704,972 224,393 66,648 42,238 333,279 152 8,345 - 8,497 647,470 884,307 42,238 1,574,015 12,093 (188,149) (42,238) (218,294) INTEREST REVENUE 7,844 2.914 10,758 OTHER NON-OPERATING REVENUES 2,485,259 500 2,485,759 GAIN (.LOSS) ON SALE OF CAPITAL ASSETS - 3,095 3,095 INTEREST EXPENSE (70,963) (21,776) (92,739) TOTAL NON-OPERATING REVENUE ( EXPENSE) 2,422,140 (15,267) 2,406,873 INCOME (LOSS) BEFORE CONTRIBUTIONS & TRANSFERS 2,434,233 (203,416) (42 ,238) 2,188,579 TRANSFERS IN (Note 5) TRANSFERS OUT (Note 5) CHANGE IN NET ASSETS 40.000 40.000 TOTAL NET ASSETS BEGINNING OF YEAR 7,253,420 1,277,490 1,516,179 TOTAL NET ASSETS END OF YEAR $ 9,687,653 $ 1,114,074 $ 1,473,941 131 CITY OF AUBURN: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF AUBURN, WASHINGTON COMBINING STATEMENT OF CASH FLOWS NON-MAJOR ENTERPRISE FUNDS FOR THE FISCAL YEAR ENDED DECEMBER 31. 2009 Page 1 of 2 TOTAL NON-MAJOR COMMERCIAL ENTERPRISE AIRPORT CEMETERY RETAIL FUNDS CASH FLOWS FROM OPERATING ACTIVITIES: CASH RECEIVED FROM USERS CASH PAID TO SUPPLIERS CASH PAID FOR TAXES CASH PAID FOR INVENTORY CASH PAID TO EMPLOYEES $ 650,194 $ 696,159 $ - $ 1,346,353 (376,706) (299,804) - (676,510) (152) (8,345) - (8,497) - (2,940) - (2,940) (22,468) (524,260) - (546,727) 250,868 (139,190) 0 - 111,678 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: TRANSFERS FROM OTHER FUNDS - 40,000 OPERATING TRANSFERS OUT - - NET CASH PROVIDED (USED) BY NON- CAPITAL FINANCING ACTIVITIES - 40,000 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: PROCEEDS FROM SALE OF EQUIPMENT - 3,095 PURCHASE OF CAPITAL ASSETS (2,657,536) (31,222) PROCEEDS FROM OTHER GOVERNMENTS 2,485,259 - PREMIUM & BOND ISSUANCE COSTS 9,774 - PRINCIPAL PAYMENT ON DEBT (65,000) - INTEREST PAYMENT ON DEBT (70,963) (22,270) OTHER CASH RECEIVED (PAID) - 500 NET CASH PROVIDED (USED) FOR CAPITAL AND RELATED FINANCING ACTIVITIES (298,466) (49,896) 40.000 - 40,000 - 3,095 - (2,688,758) - 2,485,259 - 9,774 - (65,000) - (93,233) 500 (348,361) CASH FLOW FROM INVESTING ACTIVITIES: INTEREST RECEIVED 7,844 2,914 - 10,758 NET CASH PROVIDED (USED) IN INVESTING ACTIVITIES 7,844 2,914 - 10,758 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (39,754) (146,171) - (185,925) CASH AND CASH EQUIVALENTS-BEGINNING OF YEAR 1,155,613 487,674 650,277 2,293,564 CASH AND CASH EQUIVALENTS-END OF YEAR $ 1,115759 $ 341,503 $ 650,277 $ 2,107,639 CASH AT END OF YEAR CONSISTS OF: CASH AND CASH EQUIVALENTS $ 1,045,971 $ 341,503 $ 650,277 $ 2,037,751 RESTRICTED CASH-CUSTOMER DEPOSITS 69,888 - - 69,888 TOTAL CASH ; $ 1,115, 859 $ 341,503 $ 650,277 $ 2,107, 639 132 CITY OF AUBURN: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF AUBURN, WASHINGTON COMBINING STATEMENT OF CASH FLOWS NON-MAJOR ENTERPRISE FUNDS FOR THE FISCAL YEAR ENDED DECEMBER 31. 2009 Page 2 of 2 TOTAL NON-MAJOR COMMERCIAL ENTERPRISE AIRPORT CEMETERY RETAIL FUNDS RECONCILIATION OF NET OPERATING INCOME TO NEW CASH PROVIDED BY OPERATING ACTIVITIES OPERATING INCOME (LOSS) $ 12,093 $ (188,149) $ (42,238) $ (218,294) ADJUSTMENTS TO RECONCILE OPERATING INCOME TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES: DEPRECIATION INVENTORY 224,392 66,648 42,238 333,278 - (2,940) - (2,940) LIABILITY (INCREASES) DECREASES: ACCOUNTS & VOUCHERS PAYABLE 23,827 (24,246) - (418) DEPOSITS PAYABLE (9,369) - - (9,369) WAGES & BENEFITS PAYABLE 11 885 - 895 COMPENSATED ABSENCES PAYABLE (87) 8,613 - 8,526 TOTAL ADJUSTMENTS 238,775 48,959 42,2 38 329,973 NET CASH PROVIDED (USED) BY OPERATING ACTIVITI ES $ 250,868 $ (139,190) $ - $ 111,678 SCHEDULE OF NONCASH INVESTING, CAPITAL AND FINANCING ACTIVITIES CAPITAL ASSETS ACQUIRED BY CONTRIBUTED CAPITAL $ INCREASE (DECREASE) IN FAIR VALUE OF INVESTMENT 133 CITY OF AUBURN: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF * MORE THAN YOU IMAGINED 134 J ~ CITY OF AUBURN: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES NON-MAJOR PROPRIETARY FUNDS Internal Service Funds The City of Auburn's internal service funds are used to account for the financing of goods and services provided by one department of operation to other departments on a cost reimbursement basis. Internal service funds are self-supporting and use the accrual method of accounting. Auburn has three internal service funds. The Insurance Fund - Provides a source of funds to pay unemployment claims and property and casualty claims which fall below deductible levels. The Facilities Funds - Accounts for the costs of maintaining various City facilities. The Information Services Fund - Accounts for the costs of purchasing and maintaining the City's various computer and telecommunications systems. The Equipment Rental Fund - Accounts for the costs of purchasing, maintaining, and operating Auburn's fleet of vehicles and related equipment. 135 CITY OF AUBURN: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF AUBURN, WASH INGTON COMBINING STATEMENTS OF NET ASSETS INTERNAL SERVICE FUNDS DECEMBER 31, 2009 CURRENT ASSETS: CASH AND CASH EQUIVALENTS $ 2.234.469 $ 364.681 $ 4,206,834 $ 5.320.053 $ 12.126.037 CUSTOMER ACCOUNTS - 6.510 - 6.510 DUE FROM OTHER GOVERNMENTAL UNITS 2,392 18,141 7,149 27,682 INVENTORIES - - 111,861 111,861 TOTAL CURRENT ASSETS 2,234,469 373,583 4,224,975 5,439,063 12,272,090 NONCURRENT ASSETS: CAPITAL ASSETS: BUILDINGS AND EQUIPMENT - - 3.349.750 11.660.899 15.010.649 IMPROVEMENTS OTHER THAN BUILDINGS - 46.591 46.591 CONSTRUCTION IN PROGRESS 238,803 193.435 432.238 LESS: ACCUMULATED DEPRECIATION TOTAL CAPITAL ASSETS (NET OF AID) (2,517,371) 1,071,182 (6,268.388) 5,632,537 (8,785.759) 6,703,719 LIABILITIES: CURRENT LIABILITIES: CURRENT PAYABLES 125.344 325.718 147.134 598.196 CUSTOMER DEPOSITS 5.725 - - 5.725 EMPLOYEE LEAVE BENEFITS-CURRENT 26.213 41,784 23.695 91.692 TOTAL CURRENT LIABILITIES 157,282 367,502 170,829 695,613 NONCURRENT LIABILITIES: EMPLOYEE LEAVE BENEFITS 8,664 13,810 7,832 30,306 TOTAL NONCURRENT LIABILITIES 8,664 13,810 7,832 30,306 NET ASSETS: INVESTED IN CAPITAL ASSETS, NET OF RELATED DEBT - - 1,071,182 5,632,537 6,703,719 UNRESTRICTED 2,234,469 207,637 3,843,663 5,260,402 11,546,171 TOTAL NET ASSETS $ 2,234,469 $ 207,637 $ 4,914,845 $ 10,892,939 $ 18,249,890 136 CITY OF AUBURN: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF AUBURN, WASHINGTON COMBINING STATEMENT OF REVENUES. EXPENSES. AND CHANGES IN FUND NET ASSETS INTERNAL SERVICE FUNDS FOR THE YEAR ENDED DECEMBER 31, 2009 INSURANCE FACILITIES INFORMATION SERVICES EQUIPMENT RENTAL TOTAL OPERATING REVENUES: CHARGES FOR SERVICES $ $ 2,178,933 $ 4,629,788 $ 2,999,193 $ 9,807,914 OTHER OPERATING REVENUE 95.112 198,569 - 293.681 TOTAL OPERATING REVENUES 2,274,045 4,828,357 2,999,193 10,101,595 OPERATING EXPENSES: OPERATIONS & MAINTENANCE 2,070,298 3,318,801 1,192,036 6,581,135 ADMINISTRATION 258,128 - 103,596 747.889 1,109,613 DEPRECIATION/AMORTIZATION - - 498,973 1,034,255 1,533,228 TOTAL OPERATING EXPENSES OPERATING INCOME (LOSS) 258,128 2,070.298 (258,128) 203,747 3.921.370 906,987 2.974.180 25,013 9.223,976 877,619 NON-OPERATING REVENUE (EXPENSEI: INTEREST REVENUE 11,025 2,827 25,4G6 42,406 81,724 OTHER NON-OPERATING REVENUES - 1.063 11.620 12,683 GAIN (LOSS) ON SALE OF CAPITAL ASSETS TOTAL NON•OPERATING REVENUE (EXPENSE) - 11,025 - 3,890 - 25,466 (12,790) 41,236 (12,790) 81,617 INCOME (LOSS) BEFORE CONTRIBUTIONS CAPITAL CONTRIBUTIONS (247,103) 207,637 - 932,453 - 66,249 61,445 959,236 61,445 TRANSFERS IN (Note 5) 204.100 204,100 TRANSFERS OUT (Note 5) - (81,000) (7,000) (88,000) CHANGE IN NET ASSETS (247.103) 207.637 851,453 324.794 1,136.781 TOTAL NET ASSETS BEGINNING OF YEAR TOTAL NET ASSETS END OF YEAR 2,481,572 $ 2,234,469 $ - 207.637 $ 4.063.392 4.914.845 $ 10.568.145 10.892.939 $ 17,113,109 18,249,890 137 CITY OF AUBURN: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF AUBURN, WASHINGTON COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS FOR THE FISCAL YEAR ENDED DECEMBER 31, 2009 Page 1 of 2 INFORMATION EQUIPMENT INSURANCE FACILITIES SERVICES RENTAL TOTAL CASH FLOWS FROM OPERATING ACTIVITIES: CASH RECEIVED FROM USERS $ - $ 2.273,260 $ 4,823.217 $ 2.999.193 $ 10.095,670 CASH PAID TO SUPPLIERS (252.570) (1.130.500) (1.677.670) (1.333.917) (4.394,658) CASH PAID FOR TAXES - (5,557) CASH PAID FOR INVENTORY 32,084 32,084 CASH PAID TO EMPLOYEES (781,969) (1,864,621) (601,765) 3,248,355) NET CASH PROVIDED (USED) BY OP E RATIN G ACTIVITI ES (258.128) 360.791 1.280,926 1,095.594 2.479.184 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: TRANSFERS IN - - 204,100 204,100 TRANSFERS OUT (81,0001 (7,000) (88,000) NET CASH PROVIDED (USED) BY NON- CAPITAL FINANCING ACTIVITIES - - (81,000) 197,100 116,100 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: PROCEEDS FROM SALE OF EQUIPMENT - - 30,406 30,406 PURCHASE OF CAPITAL ASSETS - - (364,442) (2,156,035) (.2,520,477) CONTRIBUTED CAPITAL - - 3,300 3,300 PROCEEDS FROM OTHER GOVERNMENTS - - 4,779 4,779 PROCEEDS FROM INSURANCE SETTLEMENT - 1.063 3.542 4.605 CASH FLOW FROM INVESTING ACTIVITIES: INTEREST RECEIVED 11,025 2,827 25,465 49,606 88,923 NET CASH PROVIDED (USED) IN INVESTING ACTIVITIES 11.025 2,827 25.465 49,606 88.923 CASH AND CASH EQUIVALENTS-BEGINNING OF YEAR 2,481,572 3,345,884 6,091,761 11,919,217 CASH AT END OF YEAR CONSISTS OF: CASH AND CASH EQUIVALENTS $ 2,234,469 $ 364,681 $ 4,206,834 $ 5,320,053 $ 12,126,038 TOTAL CASH $ 2,234,469 $ 364,681 $ 4,206,834 $ 5,320,053 $ 12,126,038 138 CITY OF AUBURN: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF AUBURN, WASHINGTON COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS FOR THE FISCAL YEAR ENDED DECEMBER 31, 2009 2of2 INFORMATION EQUIPMENT INSURANCE FACILITIES SERVICES RENTAL TOTAL RECONCILIATION OF NET OPERATING INCOME TO NEW CASH PROVIDED BY OPERATING ACTIVITIES OPERATING INCOME LOSS 258 1 $ 28 $ 203 747 $ 906 987 $ 25 013 $ 877 619 ( ) ( , ADJUSTMENTS TO RECONCILE OPERATING INCOME TO NET CASH ) , , , , PROVIDED (USED) BY OPERATING ACTIVITIES: DEPRECIATION - - 498.973 1,034.256 1,533.229 ASSET (INCREASES) DECREASES: ACCOUNTS RECEIVABLE - (8,902) (5,141) (7,149) (21,192) INVENTORY - - 32,084 32.084 LIABILITY (INCREASES) DECREASES: ACCOUNTS & VOUCHERS PAYABLE - 85.667 (99,545) 3,438 (10.440) WAGES & BENEFITS PAYABLE - 39.677 (1,137) 4,933 43,473 DEPOSITS PAYABLE - 5,725 - 5,725 COMPENSATED ABSENCES PAYABLE 34,877 (19,211) 3,021 18,687 TOTALADJUSTMENTS - 157,044 373,939 1,070,582 1,601,565 NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES $ (258 1 28) $ 360 791 $ 1 280 926 $ 1 095 594 $ 2 479 184 , SCHEDULE OF NONCASH INVESTING, CAPITAL AND , , , , , , . FINANCING ACTIVITIES CAPITAL ASSETS ACQUIRED BY CONTRIBUTED CAPITAL $ - $ - $ - $ 61,445 $ 61,445 139 CITY OF AUBURN: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES f T'T ~►T fl ~ ~ * MORE THAN YOU IMAGINED 140 CITY OF AUBURN: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES AGENCYFUNDS The agency fund accounts for monies over which the City is strictly a short- term custodian. Agency funds typically involve only the receipt, temporary investment, and remittance of fiduciary resources to individuals, private organizations, or other governments. 141 CITY OF AUBURN: 2009 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF AUBURN, WASHINGTON STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUND FOR THE FISCAL YEAR ENDED DECEMBER 31, 2009 BALANCE BALANCE 1/1/2009 ADDITIONS DEDUCTIONS 12/3112009 ASSETS: CASH AND CASH EQUIVALENTS $ 1,566,226 $ 3,710,390 $ 3,596,776 $ 1,679,840 OTHER CURRENT ASSETS 5,321 151,138 153,838 2,621 DUE FROM OTHER GOVERNMENTAL UNITS 2,613 - 2,613 - TOTALASSETS $ 1,574,160 $ 3,861.528 $ 3753,227 $ 1,682,461 LIABILITIES: DUE TO OTHER GOVERNMENTAL UNITS $ 1,574,160 $ 5,785,499 $ 5,677,198 $ 1,682,461 TOTAL LIABILITIES $ 1,574,160 $ 5,785,499 $ 5,677,198 $ 1,682,461 142 CITY OF AUBURN: 2409 CAFR STATISTICAL SECTION City of Auburn STATISTICAL SECTION December 31. 2009 Financial Trends Information Financial trends schedules are intended to provide users with information to assist them in understanding and assessing how the City's financial position has changed over time. Schedule 1 Net assets by component 144 Schedule 2 Changes in net assets ....145 Schedule 3 Fund balances, government funds 146 Schedule 4 Changes in fund balances, government funds 147 Schedule 5 Tax revenues by source, government funds 148 Revenue Capacity Information The objective of providing revenue capacity information is to help users understand and assess the factors affecting the City's ability to generate its most significant local source revenues. Schedule 6 Assessed value by type 149 Schedule 7 Property tax data ....150 Schedule 8 Property tax levies and collections 152 Schedule 9 Principal taxpayers-property taxes 153 Schedule 10 Retail tax collections by sector 154 Debt Capacity Information Debt capacity information is intended to assist users to understand and assess the City's current levels of outstanding debt and ability to issue additional debt in the future. Schedule 11 Ratios of outstanding debt by type ....155 Schedule 12 Computation of legal debt margin 156 Schedule 13 Legal debt margin ratios 156 Schedule 14 Computation of net direct and estimated overlapping debt 157 Schedule 15 Ratio of net general bonded debt to assessed value 158 Schedule 16 Pledged revenue bond coverages ....159 Demographic and Economic Information These schedules offer demographic and economic information to assist users in under standing certain aspects of the environment within which the City operates and to provide information that facilitates comparisons of financial statement information over time and across governmen tal units. Schedule 17 Population, income and housing trends ....160 Schedule 18 Major employers 161 Operating Information These schedules contain service and infrastructure data to help users understand how the information in the City's financial report relates to the services the City provides and the activities it performs. Schedule 19 Staffing levels by department 162 Schedule 20 Operating indicators by department 163 Schedule 21 Capital indicators by department 164 143 CITY OF AUBURN: 2009 CAFR STATISTICAL SECTION Governmental activities: Invested in capital assets, net of related debt $ 167,057,262 Restricted 23,384,709 Unresticted 29,547,005 Total governmental activities net assets $ 219,988,976 Eusiness-type activities: Invested in capital assets, net of related debt $ 104,513,351 Restricted 1.919.515 Unreshicted 29 489,320 Total business-type activities net assets $ 135,922,186 Primary government: Invested in capital assets, net of related debt $ 271,570,613 Restricted 25,304,224 Unreshicted 59,036,325 Total primary government net assets $ 355,911,162 (1) Information available for 2003-2009 only due to nevi accounting and reporting standards beginning in 2003 with GASB Statement No. 34. Source: City of Auburn, Finance Department CITY OF AUBURN, WASHINGTON SCHEDULE1 NET ASSETS BY COMPONENTS LAST SEVEN FISCAL YEARS(') (ACCRUAL BASIS OF ACCOUNTING) $ 171,921,373 25,615,116 28490,736 $ 226,027,225 $ 106,783,634 1,969,809 31,849,110 $ 140,602,553 $ 278,705,007 27,584,925 60,339,846 $ 366,629,778 194,121,232 23,4 42,309 2Cr25,M6 $ 241,658,877 $ 115,137,273 2,238,611 32,513,576 $ 149,889,460 $ 309,258,505 25,680,920 56,608,912 $ 391,548,337 200,814,063 $ 212,611,232 26,839,342 24,519,024 24,148,157 26,774,107 $ 251,801,562 $ 263,904,363 $ 125,265,152 $ 130,515,163 6,987,485 1,227,395 25,693 517 40,655,261 $ 157,946,154 $ 172,397,819 $ 326,079 215 $ 343,126,395 33,826 827 25,746,419 49,841674 67429,368 $ 409,747,716 $ 436,302,182 $ 303,564,348 28,965,599 25,955,501 $ 358,485,448 $ 144,626,496 933,914 35,859 489 $ 181,419,899 $ 448,190,844 29,899 513 61,814.99C $ 539,905,347 $ 314,691,982 12, 741 ,566 43,754:379 $ 371,188,427 $ 150,621,492 2,071,219 29,546,169 $ 182,238,880 $ 465,313,474 14,812,785 73,301,048 $ 553,427,307 144 CITY OF AUBURN: 2409 CAFR STATISTICAL SECTION CITY OF AUBURN, WASHINGTON SCHEDULE2 CHANGES IN NET ASSETS LAST SEVEN FISCAL YEARS f'1 (ACCRUAL BASIS OF ACCOUNTING) Expenses Governmental activities General government $ 5,968367 $ 4,235,953 $ 5,284440 $ 6462578 $ 7.196492 $ 8,000,715 $ 7,567,085 Public safety 23,045,701 26,076,348 28,048,087 29,804,864 33,396,630 28,217,844 25,675,063 Transportation 3,071,195 8,239,795 7,956,286 7619268 8077.154 12,974,861 11,471,167 Physical environment 1,845,059 2415,047 2,209,652 2418,543 3,269,334 3,096,696 3,327,836 Culture and recreation 5,108,683 4,949,050 5,324,543 5,729431 6,539,281 6,271,924 7561,569 Economic environment 1,379,552 2,866,473 1,919,780 1,848,988 2,400,031 2,608,980 3,000,257 Health and human services 639678 597,423 602,726 763,156 416456 776,224 527,029 Interest on long-term debt 322,653 362,051 188,945 203,180 163,916 226,651 408,471 Total governmental activities expenses 41,380,888 49,742,140 51,534,459 54,850,008 61,459,294 62,173,895 59,538,478 Business-type activities: Water 6,868,291 6,913,709 6,962,997 7,647,935 7,873,191 8,565,231 8,970,215 Sewer 9 .949,763 11,207,786 12,044,330 1 1,878,252 13,974,607 14,479,299 16 569,297 Storrs drainage 2,955,179 3,169,350 3,354,899 3,852,335 4,224,881 5,226,823 7,275,072 Solid waste 8,553,801 8,645,372 9,121,727 9936222 10,368,901 10,781,426 11,019,606 Golf course 874,809 973,110 1,032,733 1,020,070 1,576,126 1,958,703 1,909,758 Non-major business-type activities 1,730 969 1,624,365 1,593,944 1.618.285 1,735,118 1,720,603 1,666,754 Total business-type activities expenses 30,932,812 32,533,692 34,110,630 35,953,099 39752,824 42,732,085 47410,702 Total primary government expenses $ 72,313,700 $ 82,275,832 $ 85,645,089 $ 90,803,107 $ 101,212,118 $ 104,905,980 $ 106,949,180 Program revenues Governmental activities: Charges for services General Government $ 359398 $ 561,013 $ 663,309 $ 820,585 $ 1,126,258 $ 2,316,125 $ 814,095 Public Safety 1,354,900 1,767,687 2,109,284 2,514,867 3,100,973 2,674,777 2,854,530 Transportation 570,100 447,036 1,052,110 631,340 1,930,504 1,272,751 1,587,850 Physical Environment 237,772 365,681 244,766 436,503 576,539 257,780 147,996 Culture and Recreation 597,300 654,417 726,753 881,318 1,245,122 917,544 1,048,390 Economic Environment 2,088,948 3,097,230 3,169,262 2,590,763 2,070,534 1,638,579 1,654,692 Health and human services 989 Total charges for services 5,208,418 6,893,064 7,965,484 7,875,376 10,049,930 9,077,556 8,108,542 Operating grants and contributions 1,959 919 2,178,951 2,445 913 2,714,324 2,923 968 2,567,788 3,001,401 Capital grants and contributions 12,336,814 5,192,593 11,162,241 5,174,350 9,213,115 94,905,563 12,806,049 Total governmental activities program revenues 19,505,151 14,264,608 21 573 638 15,764050 22,187013 106,550,907 23,915,992 Business-type activities: Charges for services 31,233,491 31,747,066 32,658,440 36,226,324 38.784.127 39,883,386 42,338,079 Operating grants and contributions 33,384 33,384 54,999 47,961 43,263 55,024 87,454 Capital grants and contributions 61985,742 4,351,278 7,857,856 3.988.202 12.479.500 10,670,660 1 .992,259 Total business-type activities program revenues 38,252,617 36,131,728 40571,295 40,262,487 51,306,890 50,609,070 44,417,792 Total primary government program revenues 57,757,768 50,396,336 62,144,933 56026537 73493903 157,159,977 68,333,784 Net (expense)/revenue Governmental activities (21,875,787) (35477512) (23;960821) (33,085958} (39,272,28 1) 44,177,012 (35,622,486) Busines3-type activities 7,819,805 3,598,1036 6460,665 4,309,388 11,554,066 98a (2,992,910) Total primary government net expense $ (14,555,932) $ (31,879,496) $ (23,500,156) L J2776,5701 $ (27,718,215) $ 52,253,997 $ (38,615,396) General revenues and other changes in net assets Governmental activities: Taxes: Propertytaxes $ 12,440,724 $ 12,598,954 $ 13464,390 $ 15,186,456 $ 16,164,073 $ 10,804,825 $ 13,362,672 Retail sales and use tax 13,970,383 15,429,527 16,333,169 17,784,374 18,958 484 17,620,661 14,727,496 Intertund utilitytaxes 1,696389 1,714,102 1,792,136 1,983,652 2095901 2,507,213 3,437,526 Utility taxes 4,225,725 5,012,010 5,349,713 5,893,041 6,073,429 8,075,355 9,071,485 Excise taxes 3,401,498 3,384,515 4,633,037 4 568 549 3,862,692 3,477,517 2,310,076 Othertaxes 1,699,275 1,678,485 1796,224 1,859,428 2,005,836 2,949,430 4,607,584 Investment earnings 769,239 708,259 1,465,102 2,454,694 2,993,174 1,589,837 570,798 Miscellaneous 96,168 192,469 564,416 69,037 (406,847) 2,751,495 67,223 Transfers (1,225,054) 627,000 194,286 (570,588) (371,660) 427,740 170,605 Total governmental activities 37,074,347 41,345,321 45,592,473 49,228,643 51,375,082 50,204,073 48,325,465 Business-type activities: Investment earnings 306,862 421,803 895,870 1,574,444 2,098417 1,242,363 312,618 Miscellaneous 545,087 1,287,528 2,124,658 1,602,274 427522 330,472 3,669,878 Transfers 1,225,054 (627,0001 (194,286) 570588 371,663 1427,7417) (170,605.) Total business-hpe activities: 2,077,908 1,082,881 2826,22 3747,306 2837,599 1,145,095 3,811891 Total primary government $ 39,151,350 $ 42,427,652 $ 48,418,715 $ 52,975,949 1 54,272,681 $ 51,349,168 $ 52,137,356 Change in net assets Governmental actn,tties $ 15,196,610 $ 5867789 $ 15,631,652 $ 10,142,685 $ 12,102,801 $ 94,581,085 $ 12,702,179 Business-type activities 9,396,808 4,680,367 9 286 907 8056 694 14451 665 9,022,080 818,981 Total primary government $ 24,595,418 $ 10,548,156 $ 24,918,559 $ 18,199,379 $ 26,554,466 $ 103,603,165 $ 13,521,960 (1) Information available for 2003-2009 only due to new accounting and reporting standards beginning in 2003 with GASB St atement N o. 34. Source: City of Aubum, Finance Department 145 CITY OF AUBURN: 2009 CAFR STATISTICAL SECTION CITY OF AUBURN, WASHINGTON SCHEDULE3 FUND BALANCES. GOVERNMENTAL FUNDS LAST SEVEN FISCAL YEARS(') (MODIFIED ACCRUAL BASIS OF ACCOUNTING) :eneral Fund o , IJnresen!ed $ I J,4vi ,495 $ i i i 12 200 $ 1t" ~ z~ ~ $ 14,44, 14 41 i, 7 210 $ 13 i 1 1,0`11 $ 13 , 7,g51 Total general fund $ 18,49 ads $ 20,702,250 $ 11,.H8.8215 $ 14,441 'r28 $ 14,462.720 $ 13,071,091 $ 13,237,851 All other governmental funds Reserved $ 1,133,206 $ 1,270,769 $ 1,375,591 $ 1,376,798 $ 1,501,033 $ 1,507,565 $ 1,538,038 Unreserved, reported in: Special revenue funds 9,776,846 10,612,069 8,967,039 10,738,431 13,124,661 14,463,370 15,184,058 Capital projects funds 13,930,030 13,852,020 13,111,273 14,727,423 9,873,331 12,990,032 10,422,360 Permanent funds 233.800 222.020 232.832 188.524 170.983 144.396 153.503 $ 25,073,852 $ 25,956,878 $ 23,686,735 $ 27,031,176 $ 24,670.008 $ 29,105,363 $ 27,297,959 (1) Information available for 2003-2009 only due to new accounting and reporting standards beginning 2003 with GASB Statement No. 34. Source: City of Auburn, Finance Department 146 CITY OF AUBURN: 2009 CAFR STATISTICAL SECTION CITY 0FAUBURN. WASHINGTON SCHEDULE4 CHANGES IN FUND BALANCES. GOVERNMEN' LAST SEVEN FISCAL YEARS f'1 (MODIFIED ACCRUAL BASIS OF ACCOUNTING) Revenues Taxes $ 35,734,592 $ 38,258, 799 $ 41,467, 853 $ 44,867, 161 $ 46,721,651 $ 43,781, 530 $ 42,514 ,006 Licenses and permits 1,255,582 2,248, 576 2,227, 963 1,683, 320 1,606,950 1,110, 722 1,326 875 Intergovernmental 6,756,672 4,697, 501 6,826, 222 6,831, 240 5,766,484 8,369, 888 9,616 ,067 Charges for services 2,924,962 3,393, 178 3,939, 610 3,659, 773 5,017,224 3,784, 544 3,473 ,199 Fines and forfeits 836,244 845, 721 777, 241 1,054 201 2,155,120 2,059, 771 1,911 ,034 Special assessments 177,588 127, 976 153, 627 75. 574 52,291 57, 402 107 ,597 Investment earnings 300,213 336, 442 1,175, 258 1477 368 2,456,291 1363, 375 484 ,696 Miscellaneous 1,102089 2,452, 468 1247, 252 1,865 079 877,473 1,296, 349 1,142 428 Total revenues 49,087,942 52,360, 661 57,815, 026 61,513, 716 64,653484 61,823, 581 60,575 902 Expenditures General government 5,737,882 5,472, 630 5.300. 663 6,062, 037 6,834,084 7,719, 205 7,864 410 Public safety 22,658,127 25,870, 873 27,169, 657 29,148, 278 33568,753 26,023, 912 25,762 ,116 Transportation 4,327,863 5,152, 344 10,337, 587 9,403, 147 7,385,929 8,910, 967 9,850 ,579 Physical environment 1,911,616 2,304, 248 2,191, 796 2,435, 201 3,352,466 3,490, 636 3,192 ,089 Economic environment 1,316,782 2,796, 902 1,877, 675 1,928, 978 2,142,282 2,530, 827 3,028 ,684 Health and human services 639,678 597, 423 602, 726 763, 156 416,456 776, 224 527 ,029 Culture and recreation 4,453,173 4,806, 217 4,815, 643 5,016, 554 6,571,275 6,296, 743 6,622 ,546 Capital outlaya) 3,357,827 12,100, 966 507, 484 3,822, 895 7,346,316 4,778, 334 30,338 ,508 Debt service: Principal 1,162,465 1,018, 355 10,582, 246 420, 631 435,093 456, 655 479 ,661 Interest! other 333,439 248, 005 315, 960 247, 551 203,266 264, 997 296 ,241 Total expenditures 45,898,852 60,367, 963 63,709,437 59,248,428 68,255,920 61,248, 500 87,961 ,863 Excess of revenues over (under) expenditures 3,189,090 (8,007,302) (5,894,411) 2,265,288 (3,602,436) 575,081 (27,385,961) Other financing sources {used Transfers in 5,458,804 3,946,424 9,753,294 8,873,200 6,103,144 7,386,082 6,994,306 Transfers out (6,561,204) (3,319,424) (11,703,804) (9,554,816) (5,542,988) (7,993,842) (6,997,801) Capital leases - 10,356,006 - - 695,504 17,728 24,549,186 Insurance Recoveries 114,607 Issuance of long-term debt - - - 142,313 - 360,606 957,278 Sales of capital assets 26,930 119,053 811,353 127.959 2,698,677 127,741 Total otherfinancing sources (uses) (1,075470) 11,096,053 (1,139,157) (411344) 1,255,660 2468,645 25,745,317 Net change in fund balances $ 2,113,620 $ 3,088,751 $ (7,033,568) $ 1,853,944 $ (2,346,776) $ 3,043,726 $ (1,640,644) Debt service as a percentage of noncapital expenditures 152% 2.62% 17.24% 1.21% 1.05% 1.28% 1.35% (1) Information available for 2003-2009 only due to new accounting and reporting standards beginning 2003 with GASB Statement No. 34. (2) Capital outlay of $4,778,334 for 2009 is for Governmental Funds only. Proprietary Funds captial outlaywas $5,518,270 for total capital outlay of $10,296,664 as reported on the Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Fundsto the Statememt of Activities. Source: City of Auburn, Finance Department 147 CITY OF AUBURN: 2009 CAFR STATISTICAL SECTION CITY OF AUBURN, WASHINGTON SCHEDULES TAX REVENUES BY SOURCE, GOVERNMENT FUNDS LAST TEN FISCAL YEARS Year Property & Use Utility Utility Excise Other Total 2000 10,209,181 13,376,907 972,327 4,704,155 850,570 78,265 30,191,405 2001 11,016,263 13,467,184 1,016,366 6,143,060 1,172,417 44,660 32,859,950 2002 11,673,939 13,568,518 1,078,845 4,193,983 829,537 52,839 31,397,661 2003 12,396,502 13,970,383 1,696,389 4,225,725 3,401,498 44,095 35,734,592 2004 12,680,361 15,429,527 1,714,102 5,012,010 3,384,515 38,284 38,258,799 2005 13,319,740 16,333,169 1,792,136 5,349,713 4,633,037 40,058 41,467,853 2006 14,582,829 17,784,374 1,983,652 5,893,041 4,568,549 54,716 44,867,161 2007 15,666,016 18,958,484 2,095,901 6,073,429 3,862,692 65,129 46,721,651 2008 12,040,124 17,620,661 2,507,213 8,075,355 3,477,517 60,660 43,781,530 2009 12,914,943 14,727,496 3,437,526 9,071,485 2,310,076 52,480 42,514,006 Change 2000-2009 26.5% 10.1% 253.5% 92.8% 171.6% -32.9% 40.8% Fiscal years 2000-2002 include tax revenues collected in the general and special revenue funds. Fiscal years 2003-2009 include all governmental funds. Source: City of Auburn, Finance Department $50,000 $45,000 $40,000 $35,000 c $30,000 $25,000 0 $20,000 $15,000 $10,000 $5,000 $0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 148 FIGURE 5: TAX REVENUES BY SOURCE 2000 - 2009 CITY OF AUBURN: 2009 CAFR STATISTICAL SECTION CITY OF AUBURN, WASHINGTON SCHEDULE6 ASSESSED VALUE BY TYPE LAST TEN FISCAL YEARS (AMOUNTS EXPRESSED IN THOUSANDS) Fiscal Year State Property and Other Personal Property Land and Building Total Assessed Value Total Direct Rate 2000 82,105 746,579 2,345,551 3,174,235 3.00 2001 104,117 751,709 2,510,519 3,366,345 2.99 2002 115,189 800,159 3,104,524 4,019,872 2.93 2003 140,531 787,022 3,344,271 4,271,824 2.93 2004 150,458 742,255 3,599,466 4,492,179 2.87 2005 137,611 704,061 3,834,629 4,676,301 2.88 2006 116,895 623,298 4,359,276 5,099,469 2.87 2007 101,419 607,875 5,055,734 5,765,028 2.73 2008 112,101 640,004 5,804,585 6,556,690 1.48 2009 121.918 764.857 7.837.089 8.723.864 ("1 1.49 Source: King County Dept of Assessments & Pierce County Assessor-Treasurer In 2009, Total Assessed Value increased significantly due to annexations of Lea Hill and West Hill areas FIGURE 6: ASSESSED VALUE BY TYPE 2000 - 2009 $9,000,000 $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 0State property $3,000,000 0Personal property $2,000,000 ■Land and building $1,000,000 $0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 149 CITY OF AUBURN: 2009 CAFR STATISTICAL SECTION CITY OF AUBURN, WASHINGTON SCHEDULE7 PROPERTY TAX DATA LAST TEN FISCAL YEARS Page 1 of 2 Assessed and estimated actual values (1) Estimated and actual value (in thousands) $ 3.174.235 $ 3,366.345 $ 4,019.872 $ 4,271,824 Assessed value (in thousands) $ 3,174.235 $ 3,366,345 $ 4.019.872 $ 4,271.824 Ratio of assessed to actual 100% 100% 100% 100% Property tax rates (l) Direct regular and special General fund $ 3.00157 $ 2.98932 $ 2.93353 $ 2.92857 Debt service funds - - - - Subtotal $ 3.00157 $ 2.98932 $ 2.93353 $ 2.92857 Overlapping regular and specials') Auburn School District $ 5.80795 $ 5.47999 $ King County 1.68951 1.55218 State of Washington 3.30278 3.14502 Port of Seattle 0.21585 0.19029 Emergency Medical Services 0.27299 0.24624 King County Library District 0.58651 0.55737 Valley Regional Fire Authority - - King County Flood Zone - King County Ferry District - - Subtotal 11.87559 11.17109 Total direct and overlapping $ 14.87716 $ 14.16041 $ Sources: (1) King County and Pierce County Deparments of Assessments: real and personal property has been assessed at 100% of the estimated actual value. (2) The decrease in property tax levy to $1.48 is due to the incorporation of the new Valley Regional Fire Authority effective 1/1107. The VRFA will assess its own property tax levy in 2008, partially offsetting what was previously levied by the City. 10.88242 10.64954 FIGURE 7A: TEN YEARS CITY PROPERTY TAX RATES 2000 - 2009 $3.50 0 0 m $3.00 11 v d N ~ $2.50 41 H 4 o $2.00 C 0 a $1.50 $1.00 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 (2) 5.47810 $ 5.35720 1.44949 1.34948 2.98946 2.89680 0.18956 0.25895 0.25000 0.24143 0.52581 0.54568 150 CITY OF AUBURN: 2009 CAFR STATISTICAL SECTION Page 2of2 2004 2005 2006 2007 2008(2) 2009 $ 4,492.179 $ 4,676,301 $ 5,099,469 $ 5,765,028 $ 6,556,690 $ 8.723,864 $ 4,492,179 $ 4,676,301 $ 5,099,469 $ 5,765,028 $ 6,556,690 $ 8,723,864 100% 100% 100% 100% 100% 100% $ 2.87319 $ 2.88000 $ 2.86520 $ 2.73076 $ 1.48385 $ 1.48678 $ 2.87319 $ 2.88000 $ 2.86520 $ 2.73076 $ 1.48385 $ 1.48678 $ 5.34914 $ 5.37195 $ 5.37383 $ 4.94903 $ 4.40970 $ 4.37709 1.43146 1.38229 1.32869 1.28956 1.20770 1.09772 2.75678 2.68951 2.49787 2.32535 2.13233 1.96268 0.25402 0.25321 0.23330 0.23158 0.22359 0.19700 0.23717 0.23182 0.21982 0.20621 0.30000 0.27404 0.53653 0.53255 0.53424 0.50027 0.45336 0.41736 - - - - 1.00000 1.10995 - - - 0.10000 0.91230 - - - - 0.05500 0.05018 10.56510 10.46133 10.18775 9.50200 9.88168 10.39832 $ 13.43829 $ 13.34133 $ 13.05295 $ 12.23276 $ 11.36553 $ 11.88510 FIGURE 713: PROPERTY TAX RATES Last Ten Fiscal Years $14.00 $12.00 a N $10.00 D o ~ F $8.00 0 a $6.00 is $4.00 $2.00 $0.00 District ■ King County Flood Zone 0 Valley Regional Fire Authority ■ King County Library District 0 Emergency Medical Services ■ Port of Seattle 0 State of Washington 0 King County ■ Auburn School District 151 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 (2) CITY OF AUBURN: 2009 CAM STATISTICAL SECTION CITY OF AUBURN, WASHINGTON SCHEDULE8 PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS Total Tax Collected Within the Collections Levy for Fiscal Year of the Levy in Subsequent Total Collections to Date Current Year King County 2000 $10,105,107 $10,022.441 99 .2% $82,666 $10,105,107 100. 0% $0 2001 11,134,267 10,814,089 97 .1% 319,335 11,133,424 100. 0% 843 2002 11,518,383 11,261,600 97 .8% 256,107 11,517,707 100. 0% 676 2003 12.094.516 11,765,654 97 .3% 315,761 12,081,415 99. 9% 13,101 2004 12,212,162 12,031,253 98 .5% 176,081 12,207,334 100. 0% 4,828 2005 12,639,356 12,393,241 98 .1% 239.603 12,632,844 99. 9% 6,512 2006 13,400,344 13,164,248 98 .2% 227,230 13,391,478 99. 9% 8,866 2007 13,846,688 13,605,301 98 .3% 210,145 13.815,446 99. 8% 31,242 2008 9,554,865 9,406,398 98 .4% 93,609 9,500,007 99. 4% 54,858 2009 11,660,279 11,390,684 97 .7% - 11,390.684 97. 7% 269.595 $390,521 Pierce County 2000 $60,601 $59,086 97 .5% $1.515 $60.601 100. 0% $0 2001 114,323 105,707 92 .5% 8,616 114,323 100. 0% - 2002 267,001 258,385 96 .8% 8,616 267,001 100. 0% 2003 435,886 423,834 97 .2% 12,052 435,886 100. 0% 2004 579,828 566,356 97 .7% 13.472 579,828 100. 0% 2005 783,135 769,223 98 .2% 13,912 783,135 100. 0% - 2006 1,242,039 1,220,642 98 .3% 20.126 1.240,768 99. 9% 1,271 2007 1,851,622 1,816,706 98 .1% 32,849 1,849,555 99. 9% 2,067 2008 1.226,883 1,177,665 96 .0% 37.594 1.215,259 99. 1% 11,624 2009 1,265,103 1,223,668 96 .7% - 1,223,668 96. 7% 41,435 $ 56,397 Total current levy balance $446.919 Source: King County Finance and Business Operations Divi sion Pierce County Budget and Finance Department FIGURE 8: TEN YEARS COLLECTION OF LEVIED PROPERTY TAXES Last Ten Fiscal Years -®-Collection percentage 100.0% within the fiscal 99.5% year of the levy 99.0% 98.5% --W-Total collection 98.0% 97 5% percentage 97.0% 96.5% 96.0% 95.5% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 152 CITY OF AUBURN: 2409 CAFR STATISTICAL SECTION CITY OF AUBURN, WASHINGTON SCHEDULE9a PRINCIPAL TAXPAYERS-PROPERTY TAXES CURRENT YEAR AND NINE YEARS AGO 2009 2000 Percentage Percentage of Total City of Total City Assessed Taxable Assessed Taxable Taxpayer Value Rank Assessed Value Value Rank Assessed Value Boeing Company $ 491,218, 466 1 5.63% $ 701,571, 254 1 22.10% GlimcherRealty Trust (Supermall) 119,546, 742 2 1.37% 131,764, 000 2 4.15% Safeway 106,729, 941 3 1.22% - EPropertyTax Inc. 73,718, 900 4 0.85% - Universal Health 59,912, 292 5 0.69% 26,936, 555 6 0.85% Puget Sound Energy 59,115, 114 6 0.68% 49,114, 535 3 1.55% Belara Communities LLC 51,114, 300 7 0.59% Muckleshoot Indian Tribe 50,197, 600 8 0.58% - UPS Supply Chain Solutions 36,083, 797 9 0.41% - Wal-Mart Store 25,257, 711 10 0.29% La Terra Limited Partnership - 44,379, 800 4 1.40% Quadrant Corporation 32,853, 900 5 1.04% Fritz Companies 25,519, 209 7 0.80% U.S. West Communications - 24,562, 959 8 037% Roundup Co. (Fred Meyer) - 12,449, 446 9 039% West Valley 29 Partners - 11,856, 200 10 037% Source: King County and Pierce County Departments of Assessments Total assessed value for 2009 is $8,723,864,000 Total assessed value for 2000 is $3,174,235,000 FIGURE 9a-1: TOP TAXPAYER ASSESSED VALUE AS A PERCENTAGE OF TOTAL ASSESSED VALUE Current Year and Nine Years Ago 40% 30% 20% 10% 0% J1C1C1 21-11-l q FIGURE 9a-2: TOP 10 TAXPAYERS ASSESSED VALUE AS A PERCENTAGE OF TOTAL ASSESSED VALUE Current Year and Nine Years Ago 40% 30% 20% 10% 0% ~uuu Ruud CITY OF AUBURN, WASHINGTON SCHEDULE 9b PRINCIPAL TAXPAYERS-SALES TAXES CURRENT YEAR AND NINE YEARS AGO 2009 2000 I Percentage Percentage Sales of Total City Sales of Total City Tax Sales Taxes Tax Sales Taxes Received Sector (1) Rank Received Received Sector If Rank Received $ 313,722 Automotive 1 2G; 309,568 Distribution 2 26% NOT AVAILABLE 243,202 Automotive 3 2.0% 229.605 General retail 4 1.9% 224,637 Automotive 5 1.9% 220,993 General retail 6 1.9% 189.806 General retail 7 1.6% 180,350 Automotive 8 1.5% 179,370 General retail 9 1.5% 174,129 Automotive 10 1.5% Source: Washington State Department of Revenue (1) It is illegal to disclose specific taxpayer sales tax information, so the above information is being provided without identification 153 CITY OF AUBURN: 2009 CAFR STATISTICAL SECTION CITY OF AU BURN, WASHINGTON SCHEDULE 10 RETAIL TAX COLLECTIONS BY SECTOR LAST TEN FISCAL YEARS (AMOUNTS EXPRESSED IN THOUSANDS) RETAIL TRADE SECTOR Automotivelgas $ 2,755 $ 2,607 $ 2,827 $ 2,862 $ 2,893 $ 3,326 $ 3,428 $ 3,643 $ 3,255 $ 2,559 Furniture 336 306 276 318 438 218 263 268 241 220 Electronics & appliances - - - - - 451 288 262 242 132 Building materials 202 314 371 412 479 488 594 615 521 358 Food stores 542 538 526 401 395 358 346 378 360 352 Health & personal care - - - - - 120 130 143 152 150 Apparel 600 624 646 649 765 836 874 899 873 781 General merchandise 373 468 646 909 990 970 941 974 872 833 Food/Drink 542 566 560 596 651 - - - - - Misc retail trade 1,205 1,228 1,017 864 905 724 939 1,334 1,234 755 $ 6,555 $ 6,651 $ 6869 $ 7,011 $ 7,515 $ 7,491 $ 7,803 $ 8,516 $ 7,750 $ 6,140 SERVICE SECTOR Information $ - $ - $ - $ - $ - $ 566 $ 567 $ 531 $ 489 $ 457 Finance & insurance - - - - - 86 84 85 85 83 Real estate, rental, leasaing - - - - - 294 311 330 394 304 Professional, scientific, technical - - - - - 119 116 162 146 200 Administrative, supply & remediation Services - - - - - 197 195 301 261 261 Educational - - - - - 81 81 87 91 42 Healthcare & social serivices - - - - - 45 33 Be 98 61 Arts & entertainment - - - - - 164 126 172 171 147 Accomodation &food service - - - - - 764 833 870 915 827 Other services 477 492 502 457 485 $ - $ - $ - $ - $ - $ 2,673 $ 2,779 $ 3,128 $ 3,107 $ 2,867 OTHER SECTORS: Services' $ 1,248 $ 1,162 $ 1,154 $ 1,182 $ 1,152 $ - $ - $ - $ - $ - Construction 1,374 1,472 1,448 1,514 2,462 2,608 2,453 2,240 1,647 1,368 Manufacturing 288 368 607 882 793 414 486 625 643 383 Transportation 433 459 426 466 401 31 26 22 76 31 Wholesaling 2,166 2,184 1,676 1,674 1,795 2,313 2,571 2,943 2,366 1,673 Banking 70 89 110 98 127 - - - - - Other business 94 102 126 121 108 73 72 143 72 47 Subtotal - other sectors $ -,673 T 'G.30 'F 3,547 T ,871 $ 6 779 T 4.'.39 $ 5,897 T 5,973 $ 4,744 T 2,902 GRAND TOTAL $ 12,228 $ 12,487 $ 12,416 $ 12,882 $ 14,294 $ 15,603 $ 16,189 $ 17,617 $ 15,601 $ 11,909 OVERLAPPING SALES TAX RATES Basic sales tax rates City of Auburn 0.84% 0.84% 6.84% 0.84% 6.84% 0.84% 6.84% 0.84% 6.84% 0.84% Washington State 6.50% 6.50% 6.50% 6.50% 6.50% 6.50% 6.50% 6.50% 6.50% 6.50% King County 0.16% 0.16% 0.16% 0.16% 0.16% 0.16% 0.16% 0.26% 0.36% 0.36% Regional Transit Authonty 040% 040% 040% 040% 040% 040% 0.40% 040% 0.40% 0.90% Metro 0.60'% 0.80'vo 0.80% 0.80% 0.80'/1" 0.80% 0.bm", 0.80% 0.8n% 0.80% Criminal Justice 0.1056 0.10?/ 0.10% 0.10'd'a 0.101 U 10':6 0.10% 0.10°/6 0.1056 0.10':6 Total basic sales tax rate IL 8.60% 8.80% 8.80% 8.80% 8.80% 8.80% 8.80% 8.90% 9.00% 9.50 Special sales tax rates Restaurants-for stadium funding 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% Motor vehicles-for multimodal transportation 0.00% 0.00% 0.00% 0.30% 0.30% 0.30% 0.30% 0.30% 0.30% 0.30% (1) Starting in March of 2005, the State of Washington switched from classifiying retail sales using the Standard Industrial Classification (SIC) code to the North American Industry Classification System (NAICS). As a result, specific trend comparisons of 2005 results to prior year may not be meaningful. Source: City of Auburn Finance department and State of Washington FIGURE 10: RETAIL TAX COLLECTIONS CITY OF AUBURN: 2000 -2009 $20,000 $18,000 ■ Other $16,000 ❑Wholesaling $14,000 •Man ufacturi ng a $12,000 O Contracting $10 000 , O Servi ce s $8,000 ■Other Retail $6,000 $4,000 $2,000 $0 (]Automotive 208 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 154 CITY OF AUBURN: 2009 CAFR STATISTICAL SECTION CITY OF AUBURN, WASHINGTON SCHEDULE11 RATIO OF OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS Fiscal Obligation Assessment Capital Revenue Trust Fund Year Bonds Bonds Leases Bonds Loans 2000 $7,956,600 $1,013,904 $0 $11,990 ,000 $0 2001 7,700,000 738,904 - 11,110 ,000 7,367 ,157 2002 7,402,000 548,904 1,367 ,108 10,190 ,000 7,826 ,039 2003 7,088,000 347,904 689 ,643 9,230 ,000 7,428 ,695 2004 6,754,000 228,354 10,322 ,787 8,220 ,000 7,066 ,042 2005 6,478,000 132,354 - 7,020 ,000 8,679 ,509 2006 11,210,000 36,827 - 5,905 ,000 9,853 ,410 2007 10,650,000 36,827 663 ,553 4,730 ,000 10,149 ,419 2008 10,053,000 36,827 646 ,799 3,495 ,000 9,730 ,324 2009 36.160.850 36.827 25.193 .600 2.200 .000 10.014 .943 Source: City of Auburn, Finance Department (1) Personal income data provided by Hebert Research for 2000, 2004 and 2005 only, other years are city estimate Total Percentage Primary of Personal Per Government Income`') Capita $;20,JC0,504 :~.05ro 1, 4'J5.53 26, 916, 061 1,85% 611.94 27,334,051 3.84% 611.71 24,784,242 3.27% 546,45 32,591,183 4.16! 70643 22,309,863 2.68! 469.98 27,005,237 3.04! 551.63 26,229,799 2.77% 519.71 23,961,950 1.82% 357.61 73,606,220 4,11% 1,090.70 FIGURE 11: PER CAPITA DEBT Last Ten Fiscal Years $1,200 $900 $600 $300 $0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 155 CITY OF AUBURN: 2009 CAFR STATISTICAL SECTION CITY OF AUBURN, WASHINGTON SCHEDULE12 COMPUTATION OF LEGAL DEBT MARGIN AS OF DECEMBER 31, 2009 General Capacity Special Purpose Capacity Parks and Utility Total Councilmanic Excess Levy Open Spaces Purpose Capacity December 31, 2009 - Total Assessed Value: 7,702,255,337 2.5% of assessed value $ - $ 192,556,383 $ 192,556,383 $ 192,556,383 $ 577,669,150 1.5% of assessed value 115,533,830 (115,533,830) - - - Statutory debt limit 115,533,830 77,022,553 192,556,383 192,556,383 577,669,150 Debt outstanding 62,671,433 - - - 62,671,433 Less redemption fund assets: Available to pay principal 3,777,515 3,777,515 Plus liabilities: Payables 1,725,933 1,725,933 Vacation/sick leave 2,013,836 2,013,836 Net debt outstanding 62,633,687 - - - 62,633,687 Remaining debt capacity $ 52,900,143 $ 77,022,553 $ 192,556,383 $ 192,556,383 $ 515,035,463 CITY OF AUBURN, WASHINGTON SCHEDULE13 LEGAL DEBT MARGIN RATIOS LAST TEN FISCAL YEARS (EXPRESSED IN THOUSANDS) Debt Limit $ 252,476 $ 252.476 $ 294,669 $ 336.913 $ 350,782 $ 35M82 $ 432.377 $ 489.472 $ 653,979 $ 577,669 Total net debt applicable to limit Legal debt margin Total net debt applicable to the limit as a percentage of debt limit 4,866 (4,871) (1,610) 3,576 17,055 17,055 11,352 10,757 10,771 62,671 1.93% -1.93% -0.55% 1.06% 4.86% 4.86% 2.63% 2.20% 1.65% 10.85% 156 CITY OF AUBURN: 2009 CAFR STATISTICAL SECTION CITY OF AUBURN, WASHINGTON SCHEDULE 14 COMPUTATION OF NET DIRECT AND ESTIMATED OVERLAPPING DEBT AS OF DECEMBER 31. 2009 Net Debt Outstanding Percent Applicable' Bonded Amount Applicable Net direct debt: Net direct debt- City of Auburn $ 36,160,850 Estimated net overlapping debt: c~ King County $ 1,018,882,000 2.04% $ 20,785,193 Port of Seattle 357,315,000 2.04% 7,289,226 School District No. 210 168,956.697 143% 4,105,648 School District No. 408 96.765,000 76.33% 73,860,726 School District No. 415 233,137.702 111% 4.919,206 Rural Library District 129,221,246 3.34% 4,315,990 Valley Regional Fire Authority 19,370,000 89.21% 17,279,977 Pierce County 141,471.648 0.92% 1,301,539 Total estimated net overlapping debt 133,857,502 Sources: (1) City of Auburn finance department: includes both bonded and non bonded general long-term debt (2) Overlapping governments (3) King County Assessors office, except for Pierce Co. 157 CITY OF AUBURN: 2009 CAFR STATISTICAL SECTION CITY OF AUBURN, WASHINGTON SCHEDULE15 RATIOS OF NET GENERAL BONDED DEBT TO ASSESSED VALUE AND GROSS BONDED DEBT PER CAPITA LAST TEN FISCAL YEARS Ratio of Net Debt Net Bonded Gross Assessed Gross Service Bonded Debt to Bonded Fiscal Value (1) Bonded Amount (3) Debt Assessed Debt per Year Population (Thousands) Debt (2) Available (Thousands) Value Capita 2000 42, 045 $3,392,920 $7,956,600 $56,752 $7,900 0.23% $189 2001 43, 985 3,752,065 7,700,000 63,660 7,636 0.20% 175 2002 44, 685 3,928,917 8,769,108 5,043 8,764 0.22% 196 2003 45, 546 4,492,179 7,088,000 5,278 7,083 0.16% 156 2004 46, 135 4,677,093 6,754,000 7,248 6,747 0.14% 146 2005 47, 470 5,099,469 6,478,000 14,256 6,464 0.13% 136 2006 48, 955 5,765,028 11,210,000 25,372 11,185 0.19% 229 2007 50, 470 5,765,028 10,650,000 35,810 10,614 0.18% 211 2008 67, 005 6,556,690 10,053,000 41,603 10,011 0.15% 150 2009 67, 485 8,723,864 36,160,850 37,746 36,123 0.41% 536 N otes: (1) From Schedule 6 (2) Amount does not include special assessment and revenue bond debt. (3) Fund balance from debt service fund. FIGURE 15: BONDED DEBT RATIOS Last Ten Fiscal Years 0.0100 $600 0 0090 . 0 0080 $500 . 0 0070 . 0060 0 $400 v . N 0 0050 $300 > . 0 0040 0 . 0 0030 $200 . 0 0020 . 0 0010 $100 . - $0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Year -0- Debt/AV A Debt/Pop 158 CITY OF AUBURN: 2009 CAFR STATISTICAL SECTION CITY OF AUBURN, WASHINGTON SCHEDULE 16 PLEDGED REVENUE BOND COVERAGES LAST TEN FISCAL YEARS Year Gross (1) Revenue Principal Interest Total Times Coverage 2000 17,749,951 11,961.126 5,788,825 880,000 614.245 1,494,245 3.87 2001 18,638,847 12,866,310 5.772,537 1,102,368 579,260 1.681,628 3.43 2002 19,928,128 13,917,916 6,010,212 1,142,368 707,581 1,849,949 3.25 2003 21,243,060 15,611,753 5.631,307 1,407,343 603.357 2,010,700 2.80 2004 21,958,359 16,834,837 5.123.522 1,633,533 539,754 2.173,287 2.36 2005 24,562,487 18,078,747 6,483,740 1,800,568 417,834 2,218,402 2.92 2006 27,087,351 19,615.315 7,472.036 1,718,412 333.016 2,051.428 3.64 2007 27,492,779 21,237,294 6,255,485 1,914,523 281,065 2,195,588 2.85 2008 27,665,498 23,149,802 4,515,696 1,942,938 279,765 2,222,703 2.03 2009 311,265,941 27,314.611 3.951,330 2,002,938 217.283 2,220,221 1.78 Source: City of Auburn, Finance Department (1) Includes water, sewer & storm drainage operating, interest and other revenues (2) Includes water, sewer & storm drainage operating expenses less depreciation. FIGURE 16: UTILITY BOND COVERAGES Last Ten Fiscal Years 2000 $8,000,000 $7.000.000 $6,000,000 $5,000,000 $4,000.000 $3,000,000 $2,000,000 $1,000,000 $0 Operating Net Revenue Expense Available 2001 2002 2003 2004 2005 2006 2007 2008 2009 YEAR 159 CITY OF AUBURN: 2009 CAFR STATISTICAL SECTION CITY OF AUBURN, WASHINGTON SCHEDULE17 POPULATION. INCOME AND HOUSING TRENDS LAST TEN FISCAL YEARS School enrollment (1) 13,079 13,222 13,504 13,461 13,838 13,760 14.367 14,559 14,716 14,589 Rate of unemployment (2) 4.0! 51! 61% 6.2% 51% 4.6% 41% 3.7% 4.2! 8.1! Population (3) 43,047 43,985 45,010 45,355 46,135 47,470 48,955 50,470 67,005 67,485 Personal income (thousands of dollars) (4J $913,500 $974,196 $1,040462 $1,094,254 $1,161,714 $1,247,566 $1,342,818 $1,444,871 $2,024,087 $1,989,661 Per capita personal income (4J $21,221 $22,148 $23,116 $24,126 $25,181 $26,281 $27,430 $28,628 $30,208 $29,483 Housing units tb One unit 8,125 8,247 8,671 8,745 8,990 9,105 9,402 9,625 14,186 14,235 Two or more 7,520 7,667 7,452 7,790 8,078 8,655 8,943 9,623 10,375 10,391 Mobile home or special 2,212 2,302 2,144 2,474 2,421 2,346 2407 2,382 2761 2,782 Total housing units 17,857 18,216 18,267 19,009 19,489 20,106 20,752 21,630 27,322 27,408 (1) Auburn School District No. 408 (2) WA State Employment Security Department - average King County rate (3) WA State Office of Financial Management (4) City estimates - Washington Economic Forecast Summary (5) Office of Financial Management 80,000 70 000 FIGURE 17: POPULATION AND HOUSING TRENDS Last Ten Fiscal Years , 60 000 , 50,000 40 000 41- , 30 000 , 20 000 , 000 10 , 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 (Population -Total housing units 160 CITY OF AUBURN: 2009 CAFR STATISTICAL SECTION Percentage of Total City The Boeing Company Aerospace 5,179 1 19.6% 10,000 1 50.5% MuckleshootTribal Enterprises Gaming 2,500 2 9.5% 1,200 3 4.7% Auburn School District Education 1,800 3 6.8% 1,682 2 7.6% Super Mall Retail 1,700 4 6.4% Green River Community College Education 1,067 5 4.0% 900 4 34% Auburn Regional Medical Center Hospital 805 6 3.0% 500 7 2.8% Emerald Downs Racetrack Horse racing 678 7 2.6% 600 5 34% Safeway GrocertyRetail/Distribution 650 8 2.5% Social Security Administration Gov't/public offices 600 9 23% 536 6 3.0% Zones, Inc. Technology reseller 500 10 1.9% Federal Aviation Administration Federal government 500 10 1 .9% 500 7 2.8% General Services Administration Federal government 500 10 1.9% 325 9 2.0% City of Auburn City government 414 8 2.6% City of Auburn Economic Development Department FIGURE 18A: AUBURN EMPLOYMENT BASE PERCENTAGE OF TOP EMPLOYER COMPARED TO ALL EMPLOYERS Last Ten Fiscal Years FIGURE 1813: AUBURN EMPLOYMENT BASE PERCENTAGE OF TOP 10 EMPLOYERS COMPARED TO ALL EMPLOYERS Last Ten Fiscal Years 160% 80 60% 40 20 0% 'uiiii 'uuu _ ■Top 10 employers ❑AIl employers 161 CITY OF AUBURN. WASHINGTON SCHEDULE 18 MAJOR EMPLOYERS CURRENT YEAR AND NINE YEARS AGO CITY OF AUBURN: 2009 CAFR STATISTICAL SECTION CITY OF AUBURN, WASHINGTON SCHEDULE19 STAFFING LEVELS BY DEPARTMENT LAST TEN FISCAL YEARS Mayor 3 3 3 4 4 8 10 11 12 12 Human resources 6 6 7 7 7 7 15 17 18 9 Finance 25 26 27 28 28 21 23 24 25 25 Municipal court 10 11 12 12 13 14 15 17 21 21 Legal 13 13 13 13 13 13 13 14 16 16 Planning 12 12 13 31 31 32 25 29 34 34 Police 110 112 114 115 115 117 118 121 152 152 Fire (1) 78 78 81 81 81 82 82 - - - Public works 62 62 62 48 49 48 48 54 63 63 Parks & recreation 34 34 35 37 37 36 36 38 40 40 Street 13 13 13 13 13 11 11 15 14 14 Water 14 14 14 16 16 16 16 19 20 20 Sewer 7 7 7 7 6 8 8 11 11 11 Storm utility 7 7 7 7 7 9 9 12 16 17 Solid waste 6 6 6 2 2 2 2 2 2 2 Airport 3 3 3 3 3 - - - - - Cemetery 7 7 7 7 7 6 6 7 7 7 Golf course 6 6 6 6 6 6 6 9 9 9 Facilities (2) - - - - - - - - - 10 Information services - - - - - 10 11 15 18 18 Equipment Rental 8 8 8 10 10 10 9 9 10 11 TOTAL 424 420 438 447 440 456 463 424 488 490 Source: City of Auburn Finance Department (1) No data is presented for Fire employees for 2007 and thereafter due to incorporation of Fire department into a separate legal entity effective 111107. (.2) Facilities Division was previously included in the Hurnan Resources Department prior to the creation of a new Internal Service fund in 2009. (3) Due to the economic downturn, the City has frozen 82.5 of the total 490 positions. FIGURE 19: STAFFING LEVELS BYTYPE OF SERVICE 160 Last Ten Fiscal Years 140 ■2000 120 02001 w 02002 0 100 Q ■2003 02004 w 80 o ■ 2005 a 02006 60 E ■ 2007 Z 02008 40 I 02009 20 a y P ° ~~"P Q Q 162 CITY OF AUBURN: 2009 CAFR STATISTICAL SECTION CITY OF AUBURN, WASHINGTON SCHEDULE 20 OPERATING INDICATORS BY DEPARTMENT LAST TEN FISCAL YEARS Planning Commercial permits Commercial construction value ($1,000's) Residential permits Residential construction value ($1,000's) Police Crimes: Arson Assault Burglary DU l Homicide Narcotics Rape Robbery Theft Theft - motor vehicle Traffic: Non-criminal Parking Fire Type of response: Building Non-building Alarm systems Service Other First Aid Parks and Recreation Athletic teams Recreation activities Golf course rounds (i) Senior center visits (2) Cultural activities Museum audience served (3)f4f Cemetery burials 471 431 434 $75,011 $74,924 $56,257 583 422 421 $65,077 $65,326 $55,108 31 35 46 139 143 169 541 686 578 150 204 170 2 - 3 628 606 499 28 19 33 65 69 68 2,273 2,300 2,243 594 692 875 7,690 9,072 9,643 1,802 1,803 2,188 92 103 101 275 236 260 496 562 511 352 387 370 673 747 819 4,815 4,902 5,177 455 464 467 1,551 1,483 1,527 56,527 53,864 53,967 31,949 29,572 32,121 117 56 88 11,000 11,000 8,994 300 301 277 337 217 240 $50,269 $77,121 $71,047 583 766 604 $89,415 $155,551 $112,125 45 43 33 145 135 168 596 861 623 189 240 218 2 1 1 506 399 472 32 24 13 69 91 85 2,082 2,344 2,509 816 802 869 9,946 7,962 6,850 1,821 1,827 2,140 114 107 94 305 249 198 486 497 474 465 493 493 917 940 870 5,155 5,562 5,679 523 507 445 1,708 1,896 2,086 41,753 45,336 47,501 31,418 32,103 35,308 55 56 56 9,417 10,274 9,340 272 271 277 24E $63,65£ 48` $61,872 36 15E 686 15E 493 24 122 2,21E 642 4,97£ 3,96` 9E 23£ 524 61£ 979 5,61E 459 2,069 43,454 35,381 5E 9,40C 277 214 95 112 $63,658 $22,887 $58,896 293 165 85 $61,872 $27,048 $15,739 30 24 19 143 154 162 590 630 59C 145 194 19, 1 - 368 439 44C 12 14 13 92 102 92 1,962 2,343 2,362 672 639 37C 6,865 6,794 7,78£ 4,802 3,740 4,02E 479 416 42E 2,719 2,056 2,33E 50,500 54,993 50,572 34,427 36,805 41,032 84 84 9C 12,090 11,921 11,83E 245 289 232 Sources: Various city departments (1) 2003- Portion of golf course closed fortwo months (2) 2001 - Senior center had reduced programs and 16 additional closure dates to facilitate move to new facility (3) 2002- Museum actual service has increased, decline in count due to change in calculation method (4) 2001 - Museum closed for renovations for several months (5) 2007 - Effective 1!1!2007 Valley Regional Fire Authority formed replacing the Fire Departments of Auburn, Pacific and Algona. 163 CITY OF AUBURN: 2009 CAFR STATISTICAL SECTION CITY OF AUBURN, WASHINGTON SCHEDULE21 CAPITAL ASSET INDICATORS BY DEPARTMENT LAST TEN FISCAL YEARS General City Total area (square miles) 21.0 22.6 22.7 22.8 22.8 23.3 23.4 23.4 30.0 30.1 Public Works Miles of streets 155 160 166 180 180 180 180 186 272 276 Number of streetlights 2,790 2,790 2,934 2,934 3,355 3,410 3,575 3,602 5,074 5,392 Number of traffic signals n/a n/a n/a n/a 66 72 72 72 83 85 Utilities Number of services 11,546 11,645 12,014 12,077 12,144 12,833 12,633 12,954 13,050 13,076 Miles of water mains 220 243 247 252 254 278 279 287 283 293 Miles of sanitary sewers 156 166 149 176 177 177 177 182 205 207 Miles of storm sewers n/a n/a n/a n/a 185 190 195 197 197 204 Number of fire hydrants n/a n/a n/a n/a 2.270 2.285 2.300 2.369 2.969 2.998 Public Safety Number of fire stations (1) 3 3 3 3 3 3 3 - - - Number of police stations 2 3 3 2 2 2 2 2 2 2 Parks and Recreation Total park acreage 478 547 533 535 592 596 596 596 598 603 Number of softball/baseball fields n/a n/a n/a n/a 19 19 19 19 19 18 Number of soccer/football fields nla n/a n/a n/a 3 3 3 3 3 3 Number of playgrounds n/a n/a n/a n/a 25 29 30 30 32 33 Sources: Various city departments (1) Effective 1/1/2007 Valley Regional Fir e Authority forme d replacing th e Fire Depart ments of Aub urn, Pacific an d Algona. 164 CITY OF AUBURN: 2009 CAFR STATISTICAL SECTION Prepared by: Shelley Coleman Finance Director Karen Jester Financial Planning Manager Lanny Petitjean Senior Accountant Michelle Surdez Senior Accountant Consuelo Rogel Financial Analyst Teri Ashton Accountant Rhonda Ewing Utility & Accounting Services Manager Kristen Hollis Finance Secretary 165 CITY OF AUBURN: 2009 CAFR STATISTICAL SECTION CITY OF i_ * MORE THAN YOU IMAGINED 166