2010, 09-13 for 2009 Financial Statements & Federal Single Audit Report Washington State Auditor's Office
Financial Statements and Federal Single Audit Report
City of Spokane Valley
Spokane County
Audit Period
January 1, 2009 through December 31, 2009
Report No. 1004156
Issue Date �.
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Washington State Auditor
Brian Sonntag
September 13, 2010
Mayor and City Council
City of Spokane Valley
Spokane Valley, Washington
Report on Financial Statements and Federal Single Audit
Please find attached our report on the City of Spokane Valley's financial statements and
compliance with federal laws and regulations.
We are issuing this report in order to provide information on the City's financial condition.
Sincerely,
, ' CI-I
BRIAN SONNTAG, CGFM
STATE AUDITOR
Insurance Building, P.O. Box 40021 •Olympia,Washington 98504-0021 •(360)902-0370 •TDD Relay(800)833-6388
FAX(360)753-0646• http://www.sao.wa.gov
Table of Contents
City of Spokane Valley
Spokane County
January 1, 2009 through December 31, 2009
Federal Summary 1
Independent Auditor's Report on Internal Control over Financial Reporting and on
Compliance and Other Matters in Accordance with Government Auditing Standards 3
Independent Auditor's Report on Compliance with Requirements Applicable to each Major
Program and Internal Control over Compliance in Accordance with OMB Circular A-133 5
Independent Auditor's Report on Financial Statements 7
Financial Section 9
Federal Summary
City of Spokane Valley
Spokane County
January 1, 2009 through December 31, 2009
The results of our audit of the City of Spokane Valley are summarized below in accordance with
U.S. Office of Management and Budget Circular A-133.
FINANCIAL STATEMENTS
An unqualified opinion was issued on the financial statements of the governmental activities, the
business-type activities, each major fund and the aggregate remaining fund information.
Internal Control Over Financial Reporting:
• Significant Deficiencies: We reported no deficiencies in the design or operation of
internal control over financial reporting that we consider to be significant deficiencies.
• Material Weaknesses: We identified no deficiencies that we consider to be material
weaknesses.
We noted no instances of noncompliance that were material to the financial statements of the
City.
FEDERAL AWARDS
Internal Control Over Major Programs:
• Significant Deficiencies: We reported no deficiencies in the design or operation of
internal control over major federal programs that we consider to be significant
deficiencies.
• Material Weaknesses: We identified no deficiencies that we consider to be material
weaknesses.
We issued an unqualified opinion on the City's compliance with requirements applicable to its
major federal programs.
We reported no findings that are required to be disclosed under section 510(a) of OMB
Circular A-133.
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Identification of Major Programs:
The following were major programs during the period under audit:
CFDA No. Program Title
14.218 Community Development Block Grant - Entitlement Grants
20.205 Highway Planning and Construction
20.205 ARRA - Highway Planning and Construction (Recovery Act)
The dollar threshold used to distinguish between Type A and Type B programs, as prescribed
by OMB Circular A-133, was $373,350.
The City did not qualify as a low-risk auditee under OMB Circular A-133.
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Independent Auditor's Report on Internal
Control over Financial Reporting and on
Compliance and Other Matters in Accordance
with Government Auditing Standards
City of Spokane Valley
Spokane County
January 1, 2009 through December 31, 2009
Mayor and City Council
City of Spokane Valley
Spokane Valley, Washington
We have audited the financial statements of the governmental activities, the business-type
activities, each major fund and the aggregate remaining fund information of the City of Spokane
Valley, Spokane County, Washington, as of and for the year ended December 31, 2009, which
collectively comprise the City's basic financial statements, and have issued our report thereon
dated August 30, 2010. The prior year partial comparative information has been derived from
the City's 2008 financial statements that we issued our report thereon dated November 30,
2009.
We conducted our audit in accordance with auditing standards generally accepted in the United
States of America and the standards applicable to the financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States.
INTERNAL CONTROL OVER FINANCIAL REPORTING
In planning and performing our audit, we considered the City's internal control over financial
reporting as a basis for designing our auditing procedures for the purpose of expressing our
opinions on the financial statements, but not for the purpose of expressing an opinion on the
effectiveness of the City's internal control over financial reporting. Accordingly, we do not
express an opinion on the effectiveness of the City's internal control over financial reporting.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to
prevent, or detect and correct misstatements on a timely basis. A material weakness is a
deficiency, or a combination of deficiencies, in internal control such that there is a reasonable
possibility that a material misstatement of the City's financial statements will not be prevented,
or detected and corrected on a timely basis.
Our consideration of internal control over financial reporting was for the limited purpose
described in the first paragraph of this section and would not necessarily identify all deficiencies
in internal control that might be deficiencies, significant deficiencies or material weaknesses.
We did not identify any deficiencies in internal control over financial reporting that we consider
to be material weaknesses, as defined above.
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However, we noted certain matters that we have reported to the management of the City in a
separate letter dated September 13, 2010.
COMPLIANCE AND OTHER MATTERS
As part of obtaining reasonable assurance about whether the City's financial statements are
free of material misstatement, we performed tests of the City's compliance with certain
provisions of laws, regulations, contracts and grant agreements, noncompliance with which
could have a direct and material effect on the determination of financial statement amounts.
However, providing an opinion on compliance with those provisions was not an objective of our
audit, and accordingly, we do not express such an opinion.
The results of our tests disclosed no instances of noncompliance or other matters that are
required to be reported under Government Auditing Standards.
This report is intended for the information and use of management, the Mayor and City Council,
federal awarding agencies and pass-through entities. However, this report is a matter of public
record and its distribution is not limited. It also serves to disseminate information to the public
as a reporting tool to help citizens assess government operations.
BRIAN SONNTAG, CGFM
STATE AUDITOR
August 30, 2010
Washington State Auditor's Office
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Independent Auditor's Report on Compliance
with Requirements Applicable to each Major
Program and Internal Control over Compliance
in Accordance with OMB Circular A-133
City of Spokane Valley
Spokane County
January 1, 2009 through December 31, 2009
Mayor and City Council
City of Spokane Valley
Spokane Valley, Washington
COMPLIANCE
We have audited the compliance of the City of Spokane Valley, Spokane County, Washington,
with the types of compliance requirements described in the U.S. Office of Management and
Budget (OMB) Circular A-133 Compliance Supplement that are applicable to its major federal
programs for the year ended December 31, 2009. The City's major federal programs are
identified in the Federal Summary. Compliance with the requirements of laws, regulations,
contracts and grants applicable to its major federal programs is the responsibility of the City's
management. Our responsibility is to express an opinion on the City's compliance based on our
audit.
We conducted our audit of compliance in accordance with auditing standards generally
accepted in the United States of America; the standards applicable to the financial audits
contained in Government Auditing Standards, issued by the Comptroller General of the United
States; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit
Organizations. Those standards and OMB Circular A-133 require that we plan and perform the
audit to obtain reasonable assurance about whether noncompliance with the types of
compliance requirements referred to above that could have a direct and material effect on a
major federal program occurred. An audit includes examining, on a test basis, evidence about
the City's compliance with those requirements and performing such other procedures as we
considered necessary in the circumstances. We believe that our audit provides a reasonable
basis for our opinion. Our audit does not provide a legal determination on the City's compliance
with those requirements.
In our opinion, the City complied, in all material respects, with the requirements referred to
above that are applicable to its major federal programs for the year ended December 31, 2009.
INTERNAL CONTROL OVER COMPLIANCE
The management of the City is responsible for establishing and maintaining effective internal
control over compliance with requirements of laws, regulations, contracts and grants applicable
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to federal programs. In planning and performing our audit, we considered the City's internal
control over compliance with the requirements that could have a direct and material effect on a
major federal program in order to determine our auditing procedures for the purpose of
expressing our opinion on compliance and to test and report on internal control over
compliance, but not for the purpose of expressing an opinion on the effectiveness of internal
control over compliance. Accordingly, we do not express an opinion on the effectiveness of the
City's internal control over compliance.
A deficiency in internal control over compliance exists when the design or operation of a control
over compliance does not allow management or employees, in the normal course of performing
their assigned functions, to prevent or detect and correct noncompliance with a type of
compliance requirement of a federal program on a timely basis. A material weakness in internal
control over compliance is a deficiency, or combination of deficiencies, in internal control over
compliance, such that there is a reasonable possibility that material noncompliance with a type
of compliance requirement of a federal program will not be prevented, or detected and
corrected, on a timely basis
Our consideration of internal control over compliance was for the limited purpose described in
the first paragraph of this section and would not necessarily identify all deficiencies in internal
control that might be deficiencies, significant deficiencies or material weaknesses. We did not
identify any deficiencies in internal control over compliance that we consider to be material
weaknesses, as defined above.
This report is intended for the information of management, the Mayor and City Council, federal
awarding agencies and pass-through entities. However, this report is a matter of public record
and its distribution is not limited. It also serves to disseminate information to the public as a
reporting tool to help citizens assess government operations.
BRIAN SONNTAG, CGFM
STATE AUDITOR
August 30, 2010
Washington State Auditor's Office
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Independent Auditor's Report on Financial
Statements
City of Spokane Valley
Spokane County
January 1, 2009 through December 31, 2009
Mayor and City Council
City of Spokane Valley
Spokane Valley, 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 Spokane Valley, Spokane County, Washington, as of and for the year ended
December 31, 2009, which collectively comprise the City's basic financial statements as listed
on page 9. 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. The prior
year partial comparative information has been derived from the City's 2008 financial statements
and, in our report dated November 30, 2009, we expressed unqualified opinions on the
respective financial statements of the governmental activities, business-type activities, each
major fund and the aggregate remaining fund information.
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 Spokane Valley, as of
December 31, 2009, and the respective changes in financial position and, where applicable,
cash flows thereof for the year then ended in conformity with accounting principles generally
accepted in the United States of America.
The financial statements include partial prior year comparative information. Such information
does not include all of the information required for a presentation in conformity with accounting
principles generally accepted in the United States of America. Accordingly, such information
should be read in conjunction with the City's financial statements for the year ended
December 31, 2008, from which such partial information was derived.
In accordance with Government Auditing Standards, we have also issued our report on our
consideration of the City's internal control over financial reporting and on our tests of its
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compliance with certain provisions of laws, regulations, contracts and grant agreements and
other matters. The purpose of that report is to describe the scope of our testing of internal
control over financial reporting and compliance and the results of that testing, and not to provide
an opinion on 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 10 through 22 and budgetary comparison
information on pages 60 through 61 are not a required part of the basic financial statements but
are 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 Schedule of
Expenditures of Federal Awards is presented for purposes of additional analysis as required by
U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments,
and Non-Profit Organizations. This schedule is not a required part of the basic financial
statements. Such information has been subjected to the 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.
BRIAN SONNTAG, CGFM
STATE AUDITOR
August 30, 2010
Washington State Auditor's Office
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Financial Section
City of Spokane Valley
Spokane County
January 1, 2009 through December 31, 2009
REQUIRED SUPPLEMENTAL INFORMATION
Management's Discussion and Analysis -2009
BASICFINANCIAL STATEMENTS
Statement of Net Assets — 2009
Statement of Activities —2009
Balance Sheet— Governmental Funds —2009
Reconciliation of Total Governmental Fund Balances to Net Assets of Governmental
Activities —2009
Statement of Revenues, Expenditures and Changes in Fund Balances — Governmental
Funds —2009
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund
Balances of Governmental Funds to the Statement of Activities —2009
Statement of Net Assets — Proprietary Funds —2009
Statement of Revenues, Expenses and Changes in Fund Net Assets — Proprietary
Funds —2009
Statement of Cash Flows — Proprietary Funds —2009
Notes to Financial Statements —2009
REQUIRED SUPPLEMENTAL INFORMATION
Schedule of Revenues, Expenditures and Changes in Fund Balances — Budget to Actual
— General Fund —2009
Schedule of Revenues, Expenditures and Changes in Fund Balances — Budget to Actual
— Street Fund —2009
SUPPLEMENTAL INFORMATION
Schedule of Expenditures of Federal Awards and Notes —2009
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CITY OF SPOKANE VALLEY
MANAGEMENT'S DISCUSSION AND ANALYSIS
For the Year Ended December 31, 2009
As management of the City of Spokane Valley, Washington, we offer readers of the City's financial
statements this narrative overview and analysis of the financial activities of the City for the fiscal year
ended December 31, 2009. All amounts in this discussion and analysis, unless otherwise indicated, are
expressed in thousands of dollars. Also, this discussion contains comparative analysis based on
information from the prior year.
FINANCIAL HIGHLIGHTS
The key financial highlights for 2009 are as follows:
At the end of the current year,the City's governmental activities reported a combined total ending
net asset balance of$111,350 thousand. A total of 56.6% or$63,074 thousand of total net assets
are invested in capital assets, such as streets, land, and buildings. Of the remaining net assets,
$48,276 thousand is available to meet the government's ongoing activities and obligations.
At the end of the current year, ending fund balance in the Statement of Revenues, Expenditures
and Changes in Fund Balance for the General Fund was $24,626 thousand, which represents a
$2,934 thousand net change in fund balance or 13.5 % increase from the prior year; and ending
fund balance is 79.0% of total General Fund expenditures. The increase in ending fund balance
is primarily explained by revenues continuing to outpace expenditures.
Total City debt decreased by $160 thousand to $8,804 thousand during the current fiscal year
primarily due to scheduled debt principal payments.
Total Governmental fund balances at the end of year were $45,207 thousand.
The City continues to increase the allowance for uncollectible gambling tax. At 12-31-09 the
City has $426 thousand set aside for this purpose.
OVERVIEW OF THE FINANCIAL STATEMENTS
This annual report consists of a series of financial statements. These statements are organized so the
reader can understand the City as a financial whole or as an entire operating entity. The statements also
provide a detailed look at specific financial conditions. The following discussion and analysis are
intended to serve as an introduction to the City's basic financial statements.
The City's basic financial statements are comprised of three components: the City-wide financial
statements, fund financial statements, and notes to the financial statements. This report also contains
other supplementary information in addition to the basic financial statements themselves.
The following figure summarizes the major features of the financial statements. This overview section
below also describes the structure and contents of each of the statements in more detail.
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Government-wide Fund Financial Statements
Statement Governmental Proprietary
Entire entity The day to day operating The day to day operating
(except fiduciary funds) activities of the City activities of the City
Scope for basic governmental for business-type
services enterprises
Accounting Accrual accounting and Modified accrual and Accrual accounting and
basis and economic resources current financial resources economic resources focus
measurement focus measurement focus
focus
All assets and liabilities, Current assets and liabilities All assets and liabilities,
Type of asset both financial and that come due during the both financial and capital,
and liability capital, short-term and year or soon thereafter;no short-term and long-term
information long-term capital assets included
All revenues and Revenues when cash is All revenues and expenses
Type of inflow expenses during year, received during the year or during year,regardless of
and outflow regardless of when cash soon thereafter; expenditures when cash is received or
information is received or paid when goods or services have paid
been received and the related
liability is due and payable
GOVERNMENT-WIDE FINANCIAL ANALYSIS
The government-wide financial statements are designed to provide readers with a broad overview of the
City's finances,in a manner similar to a private-sector business.
Statement of Net Assets and Statement of Activities
The statement of net assets presents information on all of the City's assets and liabilities, with the
difference between the two reported as net assets. This statement is similar to the balance sheet from the
business private sector. Over time, increases or decreases in net assets may serve as a useful indicator of
whether the financial position of the City is improving or deteriorating. The statement of activities
presents information showing how the City's net assets changed during the current year. This statement
distinguishes revenue generated by specific functions, from revenue provided by taxes and other sources
not related to a specific function. Revenue generated by specific functions (charges for services, fines and
forfeitures, grants and other contributions) is compared to the expenses for those functions to demonstrate
how much each function either supports itself or relies on taxes and other general funding sources for
support. These statements are prepared using the accrual basis of accounting similar to the accounting
method used by private sector companies. This basis of accounting takes into consideration all of the
current year's revenues and expenses,regardless of when the cash is received or paid.
The change in net assets is important because it tells the reader whether, for the City as a whole, the
financial position of the City has improved or diminished in capacity. However, in evaluating the overall
position of the City,nonfinancial information such as changes in the City's tax base and the condition of
the City's capital assets will also need to be evaluated.
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In the statement of net assets and the statement of activities, the City is divided into two kinds of
activities:
• Governmental Activities Most of the City's programs and services are reported here, including
general government, public safety, physical environment, transportation, economic environment,
and culture & recreation. These services are funded primarily by taxes and intergovernmental
revenues,including federal and state grants and other shared revenues.
• Business-Type Activities—These services are provided on a charge for goods or services basis to
recover all or most of the cost of the services provided. The City's Stormwater Utility
Management Fund activity is reported here.
Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources that have been
segregated for specific activities or objects, and a fiscal accounting entity with a self-balancing set of
accounts used to account for specific activities. The City, like other state and local governments, uses
fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All the
funds of the City can be divided into two categories: governmental fund types, and proprietary fund types.
Fund financial statements provide detailed information about the City's major funds. Based on the
restriction of the use of resources and money, the City has established many funds that account for the
multitude of services provided to our residents.
Governmental Funds — Governmental funds are used to account for essentially the same functions
reported as governmental activities on the government-wide financial statements. Most of the City's
basic services are reported in these funds that focus on how money flows into and out of the funds and the
year end balances available for spending. These funds are reported on the modified accrual basis of
accounting that measures cash and all other financial assets that can be readily converted to cash. The
governmental fund statements provide a detailed short-term view of the City's general government
operations and the basic services being provided,along with the financial resources available.
Because the focus of governmental funds is narrower than that of the government-wide fmancial
statements, it is useful to compare the information presented for governmental funds with similar
information presented for governmental activities on the government-wide financial statements. Both the
governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and
changes in fund balances provide a reconciliation to facilitate this comparison between governmental
funds and governmental activities.
The City maintains nineteen individual governmental funds. Information on the City's four major
governmental funds; General Fund, Street Fund, Street Capital Projects Fund, and Barker Bridge
Reconstruction Fund are presented separately in the governmental fund balance sheet and the
governmental funds statement of revenues, expenditures, and changes in fund balances. Data from the
other governmental funds are combined into a single, aggregated presentation. Individual fund data for
each of these non-major governmental funds is provided in the form of combining statements elsewhere
in this report.
Proprietary Funds—The City has two types of proprietary funds. Enterprise funds are used to report the
same functions presented as business-type activities in the government-wide statements with the fund
statements providing more detail than reported in the government-wide statements. Enterprise funds are
used to account for goods and services provided to the citizens. The City provides information on its
enterprise fund,the Stormwater Utility Management fund also a major fund under Proprietary Funds. The
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City's Internal Service Funds; Equipment Rental and Replacement and Risk Management accounts for
the accumulated and allocated internal costs of fleet vehicles, computer equipment, and insurance claims.
Also, both provide internally for the goods and services among the City's various departments. These
Internal Service funds assets and liabilities are predominantly governmental in nature and have been
included in the column under governmental-type activities on the government-wide financial statement of
net assets.
Notes to the Financial Statements
The notes provide additional information that is essential to a full understanding of the data provided on
the government-wide and fund financial statements. The notes are located immediately following the
basic financial statements.
Other Information
In addition to the basic financial statements and accompanying notes, this report also presents combining
and individual fund statements and schedules for other governmental and internal service funds. This
information can be found in the supplemental section of this report.
GOVERNMENT-WIDE FINANCIAL ANALYSIS
Statement of net assets-The statement of net assets can serve as a useful indicator of the City's financial
position. The City of Spokane Valley's financial position improved slightly during the year ended
December 31, 2009, as total net assets increased by $10,282 thousand or 9.9 %. Net assets at December
31, 2009 totaled $114,300. The following table summarizes and compares the City's net assets for 2009
and 2008 (Table 1):
City of Spokane Valley's Net Assets
(amounts in 000)
Governmental Business-type Total%
Activities Activities Total Change
2009 2008 2009 2008 2009 2008 2009-2008
Current and other assets $ 59,526 $ 62,085 $ 2,418 $ 2,607 $ 61,944 $ 64,692 -4.2%
Capital assets(net of depreciation) 71,585 61,093 683 690 72,268 61,783 17.0%
Total assets 131,111 123,178 3,101 3,297 134,212 126,475 6.1%
Long-term debt outstanding 8,804 8,964 - - 8,804 8,964 -1.8%
Other liabilities 10,956 13,267 151 226 11,107 13,493 -17.7%
Total liabilities 19,760 22,231 151 226 19,911 22,457 -11.3%
Net assets
Invested in capital assets,
net of related debt 63,074 52,370 683 690 63,757 53,060 20.2%
Restricted 3,689 13,966 - - 3,689 13,966 -73.6%
Unrestricted 44,587 34,611 2,267 2,381 46,854 36,992 26.7%
Total net assets $ 111,350 $ 100,947 $ 2,950 $ 3,071 $ 114,300 $ 104,018 9.9%
As noted earlier, the City's net assets, when reviewed over time, may serve as a useful indicator of the
City's financial position. In this case, the Primary Governments assets exceeded liabilities by $114,300
thousand($111,350 thousand in governmental activities and$2,950 in business activities)as of December
31, 2009. By far, the largest portion of the City's net assets $63,757 thousand, 55.8%, reflects its
investment in capital assets ( e.g., land and improvements, buildings and building improvements,
improvements other than buildings, machinery and equipment, vehicles, and infrastructure) less any
related debt used to acquire those assets that is still outstanding. The City uses these capital assets to
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provide services to citizens; consequently, these assets are not available for future spending. Although
the City's investment in its capital assets is reported net of related debt, it should be noted that the
resources needed to repay this debt must be provided from other sources since the capital assets
themselves can not be used to liquidate these liabilities. The majority of these assets were donated by
Spokane County at the time of incorporation.
A portion of City of Spokane Valley's Primary Government's net assets, $3,689 thousand or 3.2%
represents resources that are subject to restrictions on how they can be used. The remaining balance of
unrestricted assets, $44,587 thousand 39%may be used to meet the city's ongoing obligations to citizens
and creditors.
At the end of the current fiscal year, the City is able to report positive balances in all three categories of
net assets, both for government as a whole, as well as for its separate governmental and business-type
activities. The same situation held true for the prior fiscal year.
Changes in net assets-The changes in net assets table illustrates the increases or decreases in net assets
of the City resulting from its operating activities. The City of Spokane Valley's total net assets increased
approximately $10,282 thousand in 2009. Table 2 shows revenues, expenses, and related changes in net
assets in tabular form for both governmental and business type activities.
Changes in City of Spokane Valleys Net Assets
Table 2 as of December 31,2009 and 2008(amounts in 000)
Governmental Business-type Percentage
Activities Activities Total Change
Revenues 2009 2008 2009 2008 2009 2008 2009-2008
Program revenues
Charges for services $ 6,943 $ 7,047 $ 1,706 $ 1,687 $ 8,649 $ 8,734 -1.0%
Operating grants&contributions 611 683 - - 611 683 -10.5%
Capital grants&contributions 15,667 12,157 27 25 15,694 12,182 28.8%
General revenues
Taxes 34,502 33,624 - - 34,502 33,624 2.6%
Other 274 1,003 14 52 288 1,055 -72.7%
Total revenues 57,997 54,514 1,747 1,764 59,744 56,278 6.2%
Expenses
General government 4,592 3,696 - - 4,592 3,696 24.2%
Public safety 20,616 17,664 - - 20,616 17,664 16.7%
Utilities&physical environment 2,333 549 - - 2,333 549 325.0%
Transportation 14,883 16,205 - - 14,883 16,205 -8.2%
Economic environment 574 688 - - 574 688 -16.6%
Community development 2,045 2,971 - - 2,045 2,971 -31.2%
Culture and recreation 2,910 2,551 - - 2,910 2,551 14.1%
Interest on long term debt 401 406 - - 401 406 -1.2%
Stormwater management - - 1,108 1,179 1,108 1,179 -6.0%
Total expenses 48,354 44,730 1,108 1,179 49,462 45,909 7.7%
Changes in net assets before transfers 9,643 9,784 639 585 10,282 10,369 -0.8%
Transfers In(out) 760 235 (760) (235) - - 0.0%
Increase(decrease) net assets 10,403 10,019 (121) 350 10,282 10,369 -0.8%
Net assets-1/1/2009 100,947 90,928 3,071 2,721 104,018 93,649
Net assets-12/31/2009 $ 111,350 $ 100,947 $ 2,950 $ 3,071 $ 114,300 $ 104,018
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Governmental Activities — Charges for services in program revenues (see table 2 precedent page)
decreased overall by $104 thousand, or (1.0) % compared to the prior year. This is the second largest
source of program revenue for the City, accounting for$6,943 thousand or 11.9 % of total governmental
revenues. These charges are for fees for building, community development, and construction permits,
fees associated with the collection of fines and forfeitures related to public safety activity, and licenses
and permits. In total,governmental activities contributed$9,643 thousand of the total change in net assets
before transfers,total of$10,282 thousand.
The City's capital grants and contribution revenues from Federal and State sources made up the largest
source of program revenue, $15,667 thousand or 27.0% of total governmental revenues. The major
recipients of intergovernmental program revenues were the Transportation, Culture and Recreation, and
Utilities and Physical Environment functions of the primary government.
Property tax revenues in the governmental funds account for $10,484 thousand of the $57,997 thousand
total revenues for governmental activities, or 18.1% of total revenues, and the general fund property tax
revenues increased by$604 thousand, for a positive change of 6.1%.
Sales Tax accounted for approximately $16,317 thousand or 28.1% of total revenues in year 2009, the
largest single source of revenue for the City of Spokane Valley. Other taxes received were real estate
excise taxes of$1,088 thousand, Liquor Board Excise tax of$438 thousand, Utility phone tax of$3,054,
Leasehold excise taxes of $6 thousand, Gambling taxes of $727 thousand, Hotel/Motel taxes of $424
thousand and Motor Fuel taxes of$1,963 thousand.
The Transportation function accounted for $14,883 thousand of the $48,354 thousand total expenses for
governmental activities, or 30.8% of total expenses. The largest function was Public Safety, accounting
for $20,616 thousand and representing 42.6% of total governmental expenses and an increase of 16.7%
compared to the prior year.
For governmental activities, the following table 3 indicates the total cost of services and the net cost of
services. The statement of activities reflects the cost of program services with the program revenues from
charges for services, grants, and other contributions offsetting those services. The net cost of these
revenue services identifies the cost of those services supported by tax revenues and unrestricted
intergovernmental revenues.
Net Cost of City of Spokane Valley's Governmental Activities
Table 3 as of December 31,2009 and 2008(amounts in 000)
Total Cost Percentage Net Cost Percentage
of Services Change of Service Change
Primary government 2009 2008 2009-2008 2009 2008 2009-2008
General government $ 4,592 $ 3,696 24.2% $ (1,783) $ (1,027) 73.6%
Public safety 20,616 17,664 16.7% (18,702) (15,817) 18.2%
Utilities-physical environment 2,333 549 325.0% (1,432) (431) 232.3%
Transportation 14,883 16,205 -8.2% (199) (5,032) -96.0%
Economic environment 574 688 -16.6% (574) (688) -16.6%
Community development 2,045 2,971 -31.2% (501) (950) -47.3%
Culture and recreation 2,910 2,551 14.1% (1,540) (494) 211.7%
Other 401 406 -1.2% (401) (406) -1.2%
Total $ 48,354 $ 44,730 8.1% $ (25,132) $ (24,845) 1.2%
Washington State Auditor's Office
15
The primary governments total net cost of services increased by $287 thousand or 1.2%, compared to the
prior year. These City governmental expenses are funded from: intergovernmental revenues, charges for
services, operating grants, and capital grant program revenues of $23,222 thousand (grant program
revenues provided 48.0%of the total net costs of services). (See Table 3 precedent page)
Figure 1:
Program Revenues and Expenses-Governmental Activities
25,000,000 -
20,000,000 -
15,000,000 - —
•Program revenues
10,000,000 •Program expenses
5,000,000 -
0 IT 1 (—' r--fl 11�-1
Ot �� 2t. L t p
et��e `4ya{e '��y�� o�a��a `o��e�` \Q Leo ctea,�,a
Q
�A�J QJ,O` e`'�e Kit* 6�J` aeJe ate
to •`i. �t �� L� 2.
Gene JL; 0���0� Go�iii4 GJL°te
Transportation activity capital grants increased in the current year by$3,472 thousand; these contributions
are used to fund the on-going general government capital outlays of$22,028 thousand, or 37.7% of the
total for governmental funds expenditure activity(see figure 1 above).
Revenues by Source -Governmental Activities
Interest&
investment Charges for
Excise earnings services
taxes 1%
12%
4%
Property
taxes
18% – /–
Capital/operating
grants&
contributions
28%
Sales&Other
taxes
35%
Washington State Auditor's Office
16
Business-Type Activities
The net assets for business-type activities decreased by ($121) thousand during 2009; accounting for a
decrease of ($471) thousand compared to last years change in Net Assets of $350 thousand. For the
current year, the business-type major program revenue source was charges for services of: $1,706
thousand and capital grants and contributions of$26 thousand. (See figure 2).
Figure 2: (amounts in 000)
Program Revenues and Expenses-Business-type Activities
N $2,000 - - - -
ca ..... ..... ..... ..
N ........................
Program revenues
!Program expenses
$ ;
Storm water management
Figure 3: Revenues by Source-Business Type Activities
Interest and
investment
earnings Miscellaneous
0.5% `1.5%
`ti
,
s
Charges for
services
97.5%
The primary source of revenue is a Stormwater management fee imposed upon real property (see figure
3 above).
Washington State Auditor's Office
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FINANCIAL ANALYSIS OF THE CITY OF SPOKANE VALLEY'S FUNDS
As noted earlier,the City of Spokane Valley uses fund accounting to ensure and demonstrate compliance
with finance related requirements.
Governmental Funds
The focus of the City's governmental funds is to provide information on near-term inflows, outflows, and
balances of spendable resources. Such information is useful in assessing the City's financing
requirements. In particular, unreserved fund balance may serve as a useful measure of the City's net
resources available for spending at the end of the year.
As of December 31, 2009, the City's governmental funds reported a combined ending fund balance of
$45,207 thousand, a net decrease of($383) thousand in comparison with the prior year. Approximately
78.1% of this total or $35,308 thousand is unreserved-undesignated fund balance, which is available for
spending at the City's discretion. The remainder of the fund balance is reserved or designated and is not
available for new spending because it has already been committed for a variety of restricted purposes.
The General Fund is the primary operating fund of the City of Spokane Valley where most receipts and
payments of ordinary city operations are processed. Sales taxes are the major revenue source. At the end
of 2009, unreserved-undesignated fund balance was $24,597 thousand. As a measure of the General
Fund's liquidity, it may be useful to compare unreserved-undesignated fund balance to total
governmental-wide activity expenses of $48,354 thousand (see total cost of services 2009 table #3).
General Fund unreserved-undesignated fund balance represents 50.8% of total governmental-wide
activity expenses.
Major Governmental Funds
The General Fund—net change in fund balance increased by $2,934 thousand for the fiscal year ending
December 31, 2009. Both revenues and expenditures were less than the 2009 budget. However, revenues
exceeded expenditures by approximately$3 million.
The Street Fund— ending fund balance of$1,910 thousand, increased $293 thousand compared to the
prior year. The primary source of revenues for the Street fund is the Telephone Utility tax of $3,054
thousand, and the Motor Vehicle Gas tax of $1,927 thousand. A positive variance in revenues
significantly contributed to the increase in ending fund balance.
The Street Capital Projects Fund— has an ending unreserved fund balance of $73 thousand. Project
construction costs were approximately $10,930 thousand for the year as several street projects were
constructed in 2009. Actual revenue was ($2,445) thousand less than final budgeted projections but,
transfers in from other City Funds made up the deficit.
The Barker Bridge Fund— Capital outlay costs were approximately $6,918 thousand. Funding was in a
large part due to transfers from other City funds and from a federal grant. Actual expenditures were
($1,059)thousand less than the final budget.The City anticipates this project will be completed in 2010.
Washington State Auditor's Office
18
Proprietary Funds
The City's enterprise fund, Stormwater Management provides the same type of information found in
the government-wide financial statements, and is also a major proprietary fund.Unrestricted net assets of
the Stormwater Management Fund at December 31, 2009, were $2,267 thousand. Unrestricted net assets
decreased by($114)thousand for the year.
BUDGETARY HIGHLIGHTS
By State law, Title 35A of the Revised Code of Washington (RCW) requires all cities to prepare and
adopt a balanced budget prior to the beginning of the City's fiscal year; the annual operating budget for
the City is effective the first day of January. The City Council amended the original budget revenue and
expenditures during 2009. These amendments have recognized additional unrestricted fund balances
carried over from the prior year and grant proceeds. Expenditure appropriations increased for major street
projects and extraordinary winter weather street operations. In the General Fund, the variance between
actual expenses and the final amended budget was a savings in expenditures of$15,697 thousand, and a
deficiency in total revenues of($2,312) for 2009. However, an unfavorable variance in tax revenue of
($3,078) thousand resulted in a shortage of total revenues. A majority of the positive increases in actual
compared to final budgeted revenue occurred from increases in miscellaneous revenues of$573 thousand,
charges for services of $137 thousand, intergovernmental revenues of $528 thousand, and fines &
forfeitures of$12 thousand.
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets: The City of Spokane Valley's investment in capital assets for its governmental and
business type activities as of December 31, 2009, amounts to $72,268 thousand (net of depreciation).
This investment in capital assets includes land, buildings, improvements, machinery and equipment, and
construction in progress (see Table 4,following). The total increase in the city's investments in capital
assets for the current fiscal year was $10,485 thousand or 17.0%.
Table 4:
City of Spokane Valley's Capital Assets
(net of depreciation, amounts in 000)
Governmental Business-type Total %
Activities Activities Total Change
2009 2008 2009 2008 2009 2008 2009-2008
Land $ 4,244 $ 3,961 $ - $ - $ 4,244 $ 3,961 7.1%
Buildings 10,362 10,679 - - 10,362 10,679 -3.0%
Improvements other than Buildings 4,372 1,772 - - 4,372 1,772 146.7%
Infrastructure 38,006 31,494 650 286 38,656 31,780 21.6%
Machinery and Equipment 790 762 33 28 823 790 4.2%
Construction in Progress 13,811 12,425 - 376 13,811 12,801 7.9%
Total $ 71,585 $ 61,093 $683 $690 $ 72,268 $ 61,783 17.0%
Washington State Auditor's Office
19
Major capital asset events during the current fiscal year included the following:
• Construction in Progress increased 7.9% overall due to several major street and infrastructure projects
beginning in 2008. There was $4,515 thousand in projects carried over from 2008 that were
completed in 2009.
• Land increased 7.1% or $283 thousand for 2009 due to acquisitions for the Pines/Mansfield, Barker
Road,and Broadway(Moore to Flora)construction projects.
• Current fiscal year expenditures for on going improvements to the Street Capital Project infrastructure
projects were $4,170 thousand for acquisitions to Pines/Mansfield and the Sprague Ave Resurface
project.
• Capital Grants Fund infrastructure projects of $2,204 thousand for the Barker Road reconstruction
project for 2009 contributed to the 21.6%increase compared to the prior year.
• 2009 Capital additions by The Parks and Recreation Department for ongoing improvement projects to
the three Valley pools,totaling$1,006 thousand.
Additional information on the City's capital assets can be found in Note 6 (Capital Assets)to the financial
statements.
Long-Term Obligations —At December 31, 2009, the City had total Limited Tax General Obligation
debt outstanding of$8,365 thousand. This amount is backed by the full faith and credit of the City of
Spokane Valley with debt service funded by general government revenues and contributions from the
Public Facilities District. The City's long-term debt decreased by($212)thousand or(2.4)%during fiscal
year 2009. (See table 5).
Table: 5
City of Spokane Valley's Outstanding Obligations
(amounts in 000)
Governmental Total Percentage
Activities Change
2009 2008 2009-2008
General obligation bonds $ 8,365 $ 8,570 -2.4%
Bond premium $ 146 $ 153 -4.6%
Total $ 8,511 $ 8,723 -2.4%
In addition to the bonded debt, the City's long-term obligations include compensated absences (vacation
accruals) and the premium on General obligation bonds. Additional information on the City's long-term
debt can be found in Note 11 (General Long-Term Obligations)in the notes to the financial statements.
Under Washington State statutes, general obligation indebtedness for general purposes is pursuant to a
vote of the electorate and is limited to 2.5% of actual value of taxable property located within the City of
Spokane Valley.Non-voted general purpose indebtedness is limited to 1.5% of assessed valuation and the
combination of voted and non-voted general purpose indebtedness, cannot exceed 2.5% of assessed
valuation.
Washington State Auditor's Office
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The assessed valuation of the City of Spokane Valley for the year 2009, for purposes of determining the
legal debt margin is; $7,019,508,327. Remaining debt capacities for the City under general voted and
non-voted purposes(2.5%)is limited to: $166,829,744.
The City of Spokane Valley maintains an A3 rating from Moody's for its non-voted general obligation
debt. Additional information regarding debt limitations and capacities can be found in Note 11 (Legal
Debt Margin)in the notes to the financial statements.
ECONOMIC FACTORS
The outlook for the City of Spokane Valley economy was projected based on statistics generated in
Spokane County. The character of the City, including current and projected business registrations,
indicate economic activity will likely slow over the coming year. There are an estimated 4,000 businesses
located in Spokane Valley with estimated taxable retail sales of$1.5 billion. The City of Spokane Valley
received $16,317 thousand, a decrease of($1,738) thousand from the prior year, in sales tax dollars for
2009.
Spokane County lost 8,600 jobs in 2009 as the troubled national economy slowed job growth in the
Spokane area. The area's unemployment rate increased to 8.9%, up 3.3% from the year before (2008).
Spokane County's fastest growing non-farm employment sectors are education and health services,
although the state predicts that the professional and business services sector will grow the most through
2017.
Population growth has been steady with the city increasing to over 89,440.
Single family home construction permits in the county, the City of Spokane and the City of Spokane
Valley have slowed to 656 (down from 994 permits in 2008). The average sales price for residential
property fell 9% to $187,585, down from an average of$206,303 in 2008. The slowing of the real estate
market will hold assessed values down which in turn will make significant increases in property tax
revenue unlikely. The continued decline of the economy has curtailed retail sales and the associated sales
tax revenue. Real estate excise tax receipts (known as REETS) used for capital improvements and
infrastructure projects are expected to moderate as the number of real estate sales declines.
The City of Spokane Valley has planned for ample reserves and funds to handle an economic slowdown
without significantly impacting or reducing services. The Pacific Northwest was not immune in
experiencing the national economic decline. However, adverse effects to our economy haven't been as
severe as those we read and hear about in other cities across the country.
The City of Spokane Valley's assessed value climbed a modest 5.8% to 7.0 billion in 2009. An increase
of 2% is expected during 2010. The City's property tax levy rate for 2009 was near $1.499 per thousand
of assessed value.
The City of Spokane Valley contracts with Spokane County and several public service districts for many
city services including street maintenance, public safety, library, and fire protection. This allows the City
to hold the number of full-time employees to 92. Employee salaries and related benefits are the leading
cost for much of the city's operations. In 2009, a comparison of the 32 largest cities was conducted within
the State of Washington and the City of Spokane Valley had the fewest number of employees based on
Washington cities with a population greater than 50,000 and over.
Washington State Auditor's Office
21
No significant general fund tax increases were implemented in 2009, nor are any anticipated for the 2010
general fund budget. A telephone utility tax of 6% was implemented and collected during 2009 in the
City's Street Fund. Expenditures for 2010 were budgeted at levels to maintain and provide services at the
2009 level.
REQUEST FOR INFORMATION
This financial report is designed to provide a general overview of the City of Spokane Valley's
finances for those with an interest in the government's finances. Questions concerning any of
the information provided in this report or requests for additional information should be addressed
to:
City of Spokane Valley
Finance Department
11707 E. Sprague Ave.
Suite 106
Spokane Valley, Washington 99206.
Washington State Auditor's Office
22
City of Spokane Valley, Washington
Statement of Net Assets
December 31, 2009
Primary Government
Governmental Business-type
Activities Activities Total
ASSETS
Cash and cash equivalents $ 40,660,556 $ 2,319,722 $ 42,980,278
Taxes receivable 4,271,575 44,818 4,316,393
Taxes delinquent-receivable 114,383 25,472 139,855
Accounts receivable,(net) 889,797 - 889,797
Interest receivable 27,671 1,536 29,207
Grants receivable 7,580,012 26,586 7,606,598
Internal balances 5,977,544 - 5,977,544
Prepaids 4,195 - 4,195
Capital Assets:
Land 4,244,006 - 4,244,006
Depreciable assets,(net) 53,530,189 682,915 54,213,104
Construction in progress 13,810,744 - 13,810,744
Total Assets $ 131,110,672 $ 3,101,049 $134,211,721
LIABILITIES
Accounts payable $ 4,205,791 $ 38,249 $ 4,244,040
Interest payable 31,931 - 31,931
Internal balances 5,977,544 - 5,977,544
Deposits and other payables 134,676 35,100 169,776
Other accrued liabilities 606,193 17,664 623,857
Deferred revenue - 59,889 59,889
Long-term liabilities:
Due within one year 269,441 - 269,441
Due in more than one year 8,534,604 - 8,534,604
Total Liabilities 19,760,179 150,902 19,911,081
NET ASSETS
Invested in capital assets,net of
related debt 63,073,858 682,915 63,756,773
Restricted for:
Capital projects 3,689,416 - 3,689,416
Unrestricted:
Governmental type activities 44,587,219 - 44,587,219
Business type activities - 2,267,232 2,267,232
Total Net Assets: 111,350,493 2,950,147 114,300,640
Total Liabilities and Net Assets $ 131,110,672 $ 3,101,049 $134,211,721
The notes to the financial statements are an integral part of this financial statement
Washington State Auditor's Office
23
City of Spokane Valley,Washington
Statement of Activities
For the Year Ended December 31,2009
Net(Expense)Revenue and
Program Revenues Changes in Net Assets
Operating
Charges for Grants and Capital Grants Governmental Business-Type
Functions/Programs Expenses Services Contributions &Contributions Activities Activities Total
Primary government:
Governmental activities:
General government $ 4,592,052 $ 2,357,980 $ 450,525 $ - $ (1,783,547) $ - $ (1,783,547)
Public safety 20,615,525 1,864,507 49,263 - (18,701,755) - (18,701,755)
Utilities and physical environment 2,333,398 187,757 11,870 701,339 (1,432,432) - (1,432,432)
Transportation 14,882,890 410,950 96,255 14,176,221 (199,464) - (199,464)
Economic environment 574,475 - - - (574,475) - (574,475)
Community development 2,044,939 1,541,167 3,159 - (500,613) - (500,613)
Culture and recreation 2,910,438 580,881 - 790,000 (1,539,557) - (1,539,557)
Interest on long-term debt 400,573 - - - (400,573) - (400,573)
Total governmental activities 48,354,290 6,943,241 611,071 15,667,560 (25,132,418) - (25,132,418)
Business-type activities:
Stormwater management 1,108,427 1,706,429 - 26,586 - 624,589 624,589
Total business-type activities 1,108,427 1,706,429 - 26,586 - 624,589 624,589
Total primary government $49,462,717 $ 8,649,670 $ 611,071 $ 15,694,146 (25,132,418) 624,589 (24,507,829)
General revenues:
Taxes:
Property taxes 10,484,343 - 10,484,343
Sales and use taxes 16,317,031 - 16,317,031
Excise taxes 3,495,545 - 3,495,545
Other taxes 4,204,882 - 4,204,882
Interest and investment earnings 273,947 14,295 288,242
Transfers 759,994 (759,994) -
Total general revenues and transfers 35,535,742 (745,699) 34,790,043
Change in net assets 10,403,324 (121,110) 10,282,214
Net assets--beginning of year 100,947,169 3,071,257 104,018,426
Net assets--ending $ 111,350,493 $ 2,950,147 $ 114,300,640
The notes to the financial statements are an integral part of this financial statement.
Washington State Auditor's Office
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City of Spokane Valley, Washington
Balance Sheet
Governmental Funds
December 31, 2009
Street Barker Bridge Sub-Total
General Street Capital Projects Reconstruction Governmental
Fund Fund Fund Fund Funds
Assets
Cash and cash equivalents $ 21,465,327 $ 1,602,315 $ 894 $ 105 $ 23,068,641
Taxes receivable 3,581,840 682,914 - - 4,264,754
Accounts receivable,(net) 217,096 31,806 - 232,455 481,357
Interest receivable 14,879 1,104 - - 15,983
Due from other funds 2,423,000 446,000 334,543 - 3,203,543
Due from other governments - - - - -
Grants receivable 9,767 11,761 5,974,791 1,533,760 7,530,079
Prepaids - 4,195 - - 4,195
Internal balances - - - - -
Total Assets $ 27,711,909 $ 2,780,095 $ 6,310,228 $ 1,766,320 $ 38,568,552
Liabilities and Fund Balances
Liabilities:
Accounts payable $ 479,934 $ 337,308 $ 3,220,747 $ 43,587 $ 4,081,576
Interest payable - - - - -
Accrued wages and benefits payable 394,142 15,446 15,578 3,660 428,826
Due to other funds - 355,000 2,699,000 1,710,000 4,764,000
Deposits and other payables 134,676 - - - 134,676
Retainage payable - - 94,000 - 94,000
Deferred revenues 2,076,608 161,778 207,447 9,073 2,454,906
Total Liabilities 3,085,360 869,532 6,236,772 1,766,320 11,957,984
Fund Balances:
Reserved for:
Capital projects - - - - -
Unreserved,designated for,reported in:
Capital projects funds - - - - -
Special revenue funds - 1,504 - - 1,504
General fund 29,546 - - - 29,546
Unreserved,undesignated reported in:
General fund 24,597,003 - - - 24,597,003
Debt service fund - - - - -
Special revenue funds - - - - -
Capital projects funds - 1,909,059 73,456 - 1,982,515
Total Fund Balances 24,626,549 1,910,563 73,456 - 26,610,568
Total Liabilities and Fund Balances $27,711,909 $ 2,780,095 $ 6,310,228 $ 1,766,320 $ 38,568,552
The notes to the financial statements are an integral part of this statement. continued
Washington State Auditor's Office
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City of Spokane Valley, Washington
Balance Sheet
Governmental Funds
December 31, 2009
Other Total
Governmental Governmental
Funds Funds
Assets
Cash and cash equivalents $ - $ 16,667,057 $ 39,735,698
Taxes receivable - 121,204 4,385,958
Accounts receivable,(net) - 408,440 889,797
Interest receivable - 11,124 27,107
Due from other funds - 2,774,000 5,977,544
Due from other governments - 49,933 49,933
Grants receivable - - 7,530,079
Prepaids - - 4,195
Internal balances - - -
Total Assets $ - $ 20,031,759 $ 58,600,312
Liabilities and Fund Balances
Liabilities:
Accounts payable $ - $ 116,967 $ 4,198,543
Interest payable - (988) (988)
Accrued wages and benefits payable - 2,206 431,032
Due to other funds - 1,213,544 5,977,544
Deposits and other payables - 1,667 136,343
Retainage payable - 79,492 173,493
Deferred revenues - 22,707 2,477,613
Total Liabilities - 1,435,596 13,393,580
Fund Balances:
Reserved for:
Capital projects - 3,689,416 3,689,416
Unreserved,designated for,reported in:
Capital projects funds - 5,828,600 5,828,600
Special revenue funds - 349,184 350,688
General fund - 29,546
Unreserved,undesignated reported in:
General fund - - 24,597,003
Debt service fund - 96 96
Special revenue funds - 7,337,683 7,337,683
Capital projects funds - 1,391,184 3,373,699
Total Fund Balances - 18,596,163 45,206,732
Total Liabilities and Fund Balances $ - $20,031,759 $ 58,600,312
The notes to the financial statements are an integral part of this statement.
Washington State Auditor's Office
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City of Spokane Valley, Washington
Reconciliation of Total Governmental Fund Balances to
Net Assets of Governmental Activities
December 31, 2009
Total governmental fund balances: $45,206,732
Amounts reported for governmental activities in the statement
of net assets are different because:
Capital assets used in governmental activities are not financial
resources. This amount reflects the initial investment in
capital assets and are not reported in the funds. 71,584,939
Certain earned tax revenues will be collected after year end and will not
be available until after year end to pay for current expenditures; and
therefore reported as deferred revenues in the funds.
These revenues consist of:
Sales and use taxes 1,696,777
Motor fuel taxes 161,298
Hotel/Motel taxes 22,707
Total 1,880,782
Other long-term assets are not available to pay for current-
period expenditures and therefore are deferred in the funds:
Property taxes 326,127
Intergovernmental 9,214
Charges for services 54,043
Miscellaneous 207,447
Total 596,831
Interest on long-term debt is not accrued in governmental funds,
but rather is recognized as an expenditure when due. (32,918)
Internal service funds are used by management to charge the cost of
certain activities, such as equipment rental and self insurance, to the
individual funds. The assets and liabilities of the internal service fund
are included in governmental activities in the statement of net assets. 918,172
Long-term liabilities, including capital leases payable and accrued
interest payable, are not due and payable in the current
period and therefore are not reported in the funds:
Bonds payable (8,365,000)
Premium on bond issuance (146,081)
Compensated Absences (292,964)
Total (8,804,045)
Total Net Assets of Governmental Activities as shown
on the Statement of Net Assets: $111,350,493
The notes to the financial statements are an integral part of this financial statement.
Washington State Auditor's Office
27
City of Spokane Valley, Washington
Statement of Revenues, Expenditures and Changes in Fund Balances
Governmental Funds
For the Year Ended December 31, 2009
Street Barker Bridge Sub-Total
General Street Capital Projects Reconstruction Governmental
Fund Fund Fund Fund Major Funds
Revenues
Taxes $ 27,526,074 $ 3,054,508 $ - $ - $ 30,580,582
Licenses and permits 2,121,233 - - - 2,121,233
Intergovernmental 1,785,273 2,021,854 6,605,301 6,631,363 17,043,791
Charges for services 835,489 27,945 - - 863,434
Fines and forfeitures 778,136 - - - 778,136
Investment interest 137,934 10,895 - - 148,829
Miscellaneous 1,495,673 90,972 52,986 286,370 1,926,001
Total Revenues 34,679,812 5,206,173 6,658,287 6,917,733 53,462,006
Expenditures
Current:
General government 4,215,537 - - - 4,215,537
Public safety 20,557,834 - - - 20,557,834
Utilities and physical environment 1,730,981 340,558 - - 2,071,539
Transportation 34,300 3,954,601 - - 3,988,901
Economic environment 148,229 - - - 148,229
Community development 2,044,939 - - - 2,044,939
Culture and recreation 2,287,310 - - - 2,287,310
Debt Service:
Principal retirement - - - - -
Interest expense - - - - -
Capital Outlay:
Capital expenditures 137,691 203,405 - - 341,096
Construction in progress - - 10,930,200 6,917,733 17,847,933
Total Expenditures 31,156,821 4,498,564 10,930,200 6,917,733 53,503,318
Excess of Revenues Over(Under) 3,522,991 707,609 (4,271,913) - (41,312)
Expenditures
Other Financing Sources(Uses)
Transfers In 516,263 - 4,271,913 - 4,788,176
Transfers(out) (1,105,000) (414,300) - - (1,519,300)
Total Other Financing Sources(Uses) (588,737) (414,300) 4,271,913 - 3,268,876
Net Change in Fund Balances 2,934,254 293,309 - - 3,227,563
Fund Balances Beginning of Year 21,692,296 1,617,254 73,456 - 23,383,006
Fund Balances End of Year $ 24,626,550 $ 1,910,563 $ 73,456 $ - $ 26,610,569
The notes to the financial statements are an integral part of this statement. continued
Washington State Auditor's Office
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City of Spokane Valley, Washington
Statement of Revenues, Expenditures and Changes in Fund Balances
Governmental Funds
For the Year Ended December 31, 2009
Other Total
Governmental Governmental
Funds Funds
Revenues
Taxes $ - $ 1,512,200 $ 32,092,782
Licenses and permits - - 2,121,233
Intergovernmental - 2,321,118 19,364,909
Charges for services - - 863,434
Fines and forfeitures - - 778,136
Investment interest - 119,738 268,567
Miscellaneous - 1,250 1,927,251
Total Revenues - 3,954,306 57,416,311
Expenditures
Current:
General government - - 4,215,537
Public safety - - 20,557,834
Utilities and physical environment - - 2,071,539
Transportation - - 3,988,901
Economic environment - 375,203 523,432
Community development - - 2,044,939
Culture and recreation - 5,409 2,292,719
Debt Service: -
Principal retirement - 205,417 205,417
Interest expense - 400,660 400,660
Capital Outlay: -
Capital expenditures - 1,201,590 1,542,686
Construction in progress - 2,637,108 20,485,041
Total Expenditures - 4,825,386 58,328,704
Excess of Revenues Over(Under) - (871,080) (912,393)
Expenditures
Other Financing Sources(Uses)
Transfers In - 2,884,754 7,672,930
Transfers(out) - (5,623,636) (7,142,936)
Total Other Financing Sources(Uses) - (2,738,882) 529,994
Net Change in Fund Balances - (3,609,962) (382,399)
Fund Balances Beginning of Year - 22,206,125 45,589,131
Fund Balances End of Year $ - $ 18,596,163 $ 45,206,732
The notes to the financial statements are an integral part of this statement.
Washington State Auditor's Office
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City of Spokane Valley, Washington
Reconciliation of the Statement of Revenues, Expenditures and Changes
in Fund Balances of Governmental Funds to the Statement of Activities
For the Year Ended December 31, 2009
Net change in fund balances -total governmental funds: ($382,399)
Amounts reported for governmental activities 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 as depreciation expense. This is the amount
by which capital outlays and contributions exceeded depreciation and capital
asset disposals in the current period. 10,491,399
Depreciation (11,978,841)
Capital outlay 22,027,727
Capital contributions 442,513
Revenues in the statement of activities that do not provide current financial
resources are not reported as revenues in the governmental funds: 133,416
Sales and use taxes (36)
Property taxes 8,557
Excise taxes 27,994
Other taxes (573)
Charges for services (46,199)
Capital grants and contributions 143,673
Bond proceeds provide current financial resources to governmental
funds, but issuing debt increases long-term liabilities in the
statement of net assets. Repayment of non-current debt is an
expenditure in the governmental funds, but the repayment reduces
long-term liabilities in the statement of net assets. This is the
amount by which repayments exceeded proceeds. 205,000
Some expenses reported in the statement of activities do not require
the use of current financial resources and therefore are not reported
as expenditures in governmental funds:
Compensated absences (52,126)
Bond premium expense 7,315
Interest expense 87 (44,724)
Internal service funds are used by management to charge the costs
of certain activities, such as equipment rental and self insurance to the
individual funds. The net revenue (expense)of the internal service funds
is reported with governmental activities. 632
Total Change in Net Assets of Governmental Activities
as shown on the Statement of Activities: $10,403,324
The notes to the financial statements are an integral part of this statement.
Washington State Auditor's Office
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City of Spokane Valley, Washington
Statement of Net Assets -Proprietary Funds
December 31, 2009 and 2008
Business-activity Governmental
Enterprise Fund Type activities
Stormwater Management Internal Service Funds
Assets 2009 2008 2009 2008
Current Assets:
Cash and cash equivalents $ 2,319,722 $ 2,505,820 $ 924,858 $ 916,664
Taxes delinquent-receivable 70,290 69,231 - -
Accounts receivable,(net) - 29,995 - -
Interest receivable 1,536 2,237 564 875
Grants receivable 26,586 - - -
Due from other governments - - - -
Total Current Assets 2,418,134 2,607,283 925,422 917,539
Capital Assets:
Machinery and equipment 51,369 38,201 - -
Infrastructure 699,319 323,199 - -
Construction in progress - 376,119 - -
Less accumulated depreciation (67,773) (47,418) - -
Total capital assets(net of accumulated depreciation) 682,915 690,101 - -
Total Assets $ 3,101,049 $ 3,297,384 $ 925,422 $ 917,539
Liabilities
Current Liabilities:
Accounts payable $ 38,249 $ 82,973 $ 7,251 $ -
Accrued payroll and benefits payable 17,664 15,136 - -
Due to other funds - - - -
Deposits and other payables 35,100 35,100 - -
Retainage payables - 32,472 - -
Deferred revenue 59,889 60,446 - -
Total Current Liabilities 150,902 226,127 7,251 -
Total Liabilities 150,902 226,127 7,251 -
Net Assets
Invested in capital assets,net of related debt 682,915 690,101 - -
Unrestricted 2,267,232 2,381,156 918,171 917,539
Total Net Assets 2,950,147 3,071,257 918,171 917,539
Total Liabilities and Net Assets $ 3,101,049 $ 3,297,384 $ 925,422 $ 917,539
The notes to the financial statements are an integral part of this statement.
Washington State Auditor's Office
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City of Spokane Valley, Washington
Statement of Revenues, Expenses, and Changes in Fund Net Assets
Proprietary Funds
For the Year Ended December 31, 2009 and 2008
Business-activity Governmental
Enterprise Fund Type activities
Stormwater Management Internal Service Funds
Operating Revenues 2009 2008 2009 2008
Charges for services $ 1,706,429 $ 1,686,936 $ - $ -
Miscellaneous revenues - - - 9,817
Total Operating Revenues 1,706,429 1,686,936 - 9,817
Operating Expenses
Personal services 293,372 243,989 - -
Professional services 92,879 68,765 - -
Materials and supplies 21,172 28,998 - -
Other services and expenses 667,468 817,714 234,748 187,048
Depreciation and amortization 20,355 19,724 - -
Total Operating Expenses 1,095,247 1,179,190 234,748 187,048
Operating Income 611,182 507,746 (234,748) (177,231)
Non-Operating Revenues (Expenses)
Intergovernmental revenues 26,586 25,495 - -
Interest and investment income 14,295 51,820 5,380 23,491
Materials and supplies (13,180) (489) - -
Total Non-Operating Revenues (Expenses) 27,701 76,826 5,380 23,491
Income(loss) before Contributions and Transfers 638,884 584,573 (229,368) (153,740)
Contributions and Transfers
Transfers In - - 230,000 188,000
Transfers(out) (759,994) (234,748) - -
Change in Net Assets (121,110) 349,825 632 34,260
Net Assets Beginning of Year 3,071,257 2,721,432 917,539 883,279
Net Assets End of Year $ 2,950,147 $ 3,071,257 $ 918,171 $ 917,539
The notes to the financial statements are an integral part of this statement.
Washington State Auditor's Office
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City of Spokane Valley, Washington
Statement of Cash Flows -Proprietary Funds
For the Year Ended December 31, 2009(with comparative totals for 2008)
Business Activity Governmental Type Activities
Stormwater Management
Enterprise Fund Internal Service Funds
Cash Flows from Operating Activities 2009 2008 2009 2008
Cash received from customers $ 1,708,778 $1,646,562 $ - $ -
Cash paid to employees (290,844) (234,655) - -
Other cash receipts (556) 70,872 - 11,604
Receipts from internal activity-interfund services provided - - - -
Cash payments to suppliers for goods and services (858,715) (892,683) (227,497) (201,538)
Net cash(used)provided by operating activities 558,663 590,096 (227,497) (189,934)
Cash Flows from Noncapital Financing Activities
Operating subsidies&transfers in (out)other funds (759,994) (234,748) 230,000 188,000
Net cash(used)by noncapital financing activities (759,994) (234,748) 230,000 188,000
Cash Flows from Capital and Related Financing
Activities
Proceeds from sale of capital assets - - - -
Acquistion, construction and (transfers)of capital assets (13,169) (24,690) - -
Intergovernmental revenues/materials&supplies(net) 13,406 25,495 - -
Operating transfers net - - - -
Purchases of capital assets - - - -
Net cash provided(used)by capital and related
financing activities 237 805 - -
Cash Flows from Investing Activities
Interest received 14,996 51,820 5,691 23,491
Net cash provided by investing activities 14,996 51,820 5,691 23,491
Net increase in Cash and Cash Equivalents (186,098) 407,973 8,194 21,557
Cash and Cash Equivalents-January 1,2009 2,505,820 2,097,847 916,664 895,107
Cash and Cash Equivalents-December 31,2009 $ 2,319,722 $2,505,820 $ 924,858 $ 916,664
Reconciliation of Operating Income(Loss)to Net
Cash Provided(Used)by Operating Activities
Operating Income(loss) $ 611,182 $ 507,746 $ (234,748) $ (177,231)
Adjustments to reconcile operating income to net cash
provided by operating activities:
Depreciation 20,355 19,724 - -
Loss on disposal of asset - - - -
(Increase)Decrease in Assets:
Receivables(net) 28,936 (40,374) - -
Grants receivable (26,586) - - -
Due from other funds - 25,000 - -
Interest receivable - 4,735 - 1,787
Increase(Decrease)in Liabilities:
Accounts payable (44,724) 26,653 7,251 (14,490)
Accrued payroll and benefits payable 2,528 5,475 - -
Retainage payable (32,472) - - -
Deposits and other payables - 35,472 - -
Deferred revenues (556) 5,665 - -
Total adjustments
(52,519) 82,350 7,251 (12,703)
Net Cash Provided(used)by Operating Activities $ 558,663 $ 590,096 $ (227,497) $ (189,934)
The notes to the financial statements are an integral part of this statement.
Washington State Auditor's Office
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City of Spokane Valley
Notes to Financial Statements
NOTE 1—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
The City of Spokane Valley,Washington(the City)was incorporated on March 31,2003. The City
operates under a Council–Manager Form of government. The City's major operations, as authorized
under the laws of the State of Washington applicable to a non-charter city code,include planning and
zoning,public safety,public works, and recreation and culture.
The accounting and reporting policies of the City relate to the accompanying financial statements of the
City of Spokane Valley,Washington which have been prepared in conformity with generally accepted
accounting principles(GAAP) as applied to state and local governmental entities.GAAP for local
governments include those principles prescribed by the Governmental Accounting Standards Board
(GASB)which is the accepted standard-setting body for establishing governmental accounting and
financial reporting principles,the Financial Accounting Standards Board(FASB),when applicable, and
the American Institute of Certified Public Accountants(AICPA)pronouncements that have been made
applicable by GASB Statements or Interpretations.
A. Reporting entity
As required by GAAP the City's financial statements present the City of Spokane Valley–the primary
government. There are no component units(either blended or discretely presented)included in these
statements.
B. Government-wide and fund financial statements
The City's basic financial statements include both government-wide (reporting the City as a whole) and
fund financial statements(reporting the City's major funds)to report its financial position and the results
of operations. Both the government-wide and fund fmancial statements categorize primary activities as
either government or business-type.
The government-wide financial statements(i.e.,the statement of net assets and the statement of activities)
report information on all of the non-fiduciary activities of the primary government. For the most part,the
effect of interfund activity has been removed from these statements. Governmental activities,which
normally are supported by taxes and intergovernmental revenues,are reported separately from business-
type activities,which rely to a significant extent on fees and charges for support.
The statement of activities demonstrates the degree to which the direct expenses of a given function or
segments are offset by program revenues. Direct expenses are those that are clearly identifiable with a
specific function or segment. Program revenues include 1)charges to customers or applicants who
purchase,use,or directly benefit from goods, services,or privileges provided by a given function or
segment and 2)grants and contributions that are restricted to meeting the operational or capital
requirements of a particular function or segment. Taxes and other items not properly included among
program revenues are reported as general revenues.
Separate financial statements are provided for governmental funds,proprietary funds, and fiduciary funds.
The City has no fiduciary funds. Major individual funds are reported as separate columns while the
remaining funds are combined for presentation purposes in the governmental funds statements and the
proprietary funds statements.
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City of Spokane Valley
Notes to Financial Statements
C. Measurement focus,basis of accounting, and financial statement presentation
The government-wide financial statements are reported using the economic resources measurement focus
and the accrual basis of accounting,as are proprietary funds. Under this approach,revenues are recorded
when earned and expenses are recorded when a liability is incurred,regardless of the timing of related
cash flows. Property taxes are recognized as revenues in the year for which they are levied. The City
recognizes Grant revenue and similar items in the year in which expenses were incurred and as soon as all
the eligibility requirements imposed by the provider have been met.
Governmental fund financial statements are reported using the current financial resources measurement
focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both
measurable and available. Revenues are considered to be available when they are collectable within the
current period or soon thereafter to pay liabilities of the current period. For this purpose,the government
considers revenues to be available if they are collected within 30 days of the end of the current fiscal
period. Expenditures generally are recorded when a liability is incurred,as under accrual accounting.
However,debt service expenditures,as well as expenditures related to compensated absences,claims,and
judgments are recorded only when the payment is due.
Property taxes,franchise fees,licenses, and interest associated with the current fiscal period are all
considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal
period. Only the portion of special assessments receivable due within the current fiscal period is
considered to be susceptible to accrual as revenue of the current period. All other revenue items are
considered to be measurable and available only when cash is received by the government.
The city reports the following major governmental funds:
The General Fund: is the City's primary operating fund. It accounts for all financial resources of the
City's general government,except those required to be accounted for in another fund.
The Street Fund: This Special revenue fund is responsible for the street operating and maintenance
service levels of all Spokane Valley city streets and bridges. It utilizes the receipts received from the
motor vehicle fuel tax(MVFT)distributed to the City in accordance with the State Revised Codes of
Washington(RCW 82.36.020) and receipts from the City Telephone Tax implemented in 2009. Most
of the service levels to the city streets during 2009 are the same or greater than provided for compared
to 2008.
The Street Capital Projects Fund: accounts for monies used to finance the six year transportation
improvement plan. Revenues include transfers from the Arterial Street Fund, Capital Projects Fund,
and Special Capital Projects Fund, as well as Federal, State and local grants and private source
contributions.
The Barker Bridge Reconstruction Fund: accounts for capital improvement projects expenditures
associated with the Barker Bridge Replacement Project.This project is primarily funded by BRAC
(Bridge Replacement Advisory Committee)grant resources and is estimated to cost approximately
$11,000,000 over several years.
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City of Spokane Valley
Notes to Financial Statements
The city reports the following major proprietary fund:
The Stormwater Management Fund: accounts for the receipt and expenditure of the stormwater
management fee. The expenditures are used for stormwater control,construction,and management.
Additionally,the government reports the following non-major fund types:
Special revenue funds: accounts for arterial street construction,hotel/motel tax revenues and
expenditures,CenterPlace operating reserve,Winter Weather Reserve,and revenues and expenditures
for the Paths and Trails Fund.
Debt service fund: accounts for the resources accumulated and payments made for principal and
interest on general government debt except those to be accounted for in another fund.
Capital project funds: accounts for the acquisition or development of capital facilities for
governmental activities. Their major sources of revenues are from proceeds of general obligation
bonds,grants from other agencies, and contributions from other funds.
Internal service funds: accounts for computer hardware/software,equipment,vehicle replacement,
and risk management services provided to other departments on a cost reimbursement basis.
Private sector standards of accounting and financial reporting issued prior to December 1, 1989,generally
are followed in both the government-wide and proprietary fund financial statements to the extent that
those standards do not conflict with or contradict guidance of the GASB. Governments also have the
option of following subsequent private-sector guidance for their business-type activities and enterprise
funds, subject to this same limitation. The City has elected not to follow subsequent private-sector
guidance.
As a general rule interfund activity has been eliminated from the government-wide financial statements.
Exceptions are payments in lieu of taxes,external type transactions within internal service funds
(revenues and expenses for interest or services to other governmental organizations), and other charges
for stormwater services. Elimination of these charges would distort the direct cost and program revenues
reported for these functions.
Amounts reported as program revenues include 1)charges to customers or applicants for goods, services,
or privileges provided,2)operating grants and contributions, and 3)capital grants and contributions,
including special assessments. Internally dedicated resources are reported as general revenues rather than
program revenues. Likewise,general revenues include all taxes.
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 principle operating revenues of
the stormwater enterprise fund is a stormwater assessment fee. Operating expenses of enterprise funds
and internal service funds include the cost of sales and services,administrative expenses, and depreciation
on capital assets. All revenues and expenses not meeting this definition are reported as non-operating
revenues and expenses.
When both restricted and unrestricted resources are available for use;it is the City's policy to use
restricted resources first and then unrestricted resources as they are needed.
Washington State Auditor's Office
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City of Spokane Valley
Notes to Financial Statements
D. Assets,liabilities,and fund equity
1.Deposits and investments
The City considers all highly liquid assets including demand deposits,petty cash,money market accounts,
certificates of deposit(CD's),investments in the Washington State Treasurer's Local Government
Investment Pool(LGIP), and short-term investments with a maturity of three months or less from the date
of acquisition as cash and cash equivalents.These amounts are classified on the balance sheet or in the
statement of net assets within cash and cash equivalents in the various funds. The interest on these
investments is prorated to the applicable funds and the City's policy has been to hold its investments until
maturity in an attempt to reduce market fluctuation risk. Investments of the City can be drawn down on
demand.
As authorized by Washington state law,the City is allowed to invest in obligations of: the U.S.Treasury,
commercial paper,certificates of deposits,money market funds,mutual funds,and the Washington State
Treasurer's Local Government Investment Pool (LGIP).
Investments for the City of Spokane Valley are reported at fair value at December 31,2009.The
Washington State Treasurer's Local Government Investment Pool(LGIP) operates in accordance with the
Security Exchange Commission's(SEC)Rule 2a-7 of the Investment Company Act of 1940 and other
appropriate state laws and regulations. The fair value of the LGIP portfolio is calculated by a master
custodian or by an independent pricing service under contract with the State Treasurer's Office.The
reported fair value of the City's pool position in the State of Washington's LGIP is the same as the fair
value of the pool shares(refer to note 4).
2.Receivables and payables
Taxes receivable consists of property taxes and related interest and penalties. Accrued interest receivable
consists of amounts earned on investments,notes, and contracts. Accrued interest payable consists of
amounts owed on notes,loans,and contracts.
Customer accounts receivable/payable consist of amounts owed from/to private individuals or
organizations for goods and services including amounts owed. If the transactions are with another
governmental unit,it is accounted for within"due from/to other governments."
Receivables have been reported net of estimated uncollectible accounts. Because property taxes and
special assessments are considered liens on property,no estimated uncollectible amounts are established.
Activity between funds that are representative of lending/borrowing arrangements outstanding at the end
of the fiscal year are referred to either"due to/from other funds" (i.e.,the current portion of interfund
loans)or"interfund loans receivable/payable" (i.e.,the non-current portion of interfund loans). All other
outstanding balances between the governmental activities and business-type activities are reported in the
government-wide fmancial statements as"internal balances(refer to note 9)."
Advances,between funds, as reported in the fund financial statements, are offset by a fund balance
reserve account in applicable governmental funds to indicate that they are not available for appropriation
and are not expendable available financial resources.
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City of Spokane Valley
Notes to Financial Statements
In the government-wide financial statements, and proprietary fund types in the fund financial statements,
long-term liabilities are reported in applicable governmental activities,business-type activities,or
proprietary fund type statement of net assets.
Wages and benefits payable represent wages earned at the end of the current fiscal year but not paid until
the next fiscal year.
3.Inventories and prepaid items
Reported inventories in the governmental and proprietary funds consist of expendable supplies held for
consumption. The cost of inventories has been recorded as expenditure at the time individual inventory
items were purchased(purchase method).
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as
prepaid items in both the government-wide and fund statements.
4. Capital assets and depreciation
Capital assets include: property,plant,equipment,and infrastructure assets(e.g.roads,bridges, sidewalks,
and similar items), are reported in the applicable governmental or business-type columns in the
government-wide financial statements. The City defines capital assets as assets with an initial,individual
cost of more than $5,000 and an estimated useful life in excess of one year. Such assets are recorded at
historical cost or estimated historical cost if purchased or constructed. Other donated assets are recorded
at estimated fair market value at the date of donation.
The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend
assets lives are not capitalized.
Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest
incurred during the construction phase of capital assets of business-type activities is included as part of
the capitalized value of the assets constructed(refer to note 6).
Property,plant,and equipment of the primary government are depreciated using the straight line method
over the estimated service life as follows:
Buildings and improvements 10 - 60 years
Infrastructure 5 -40 years
Light/Heavy duty transportation equipment 5 - 10 years
Other equipment 2 -20 years
Office and computer equipment 3 - 5 years
5.Long-term obligations
Liabilities for long-term debt are recorded in the government-wide statement of net assets and in the
governmental funds balance sheet. The liabilities include bond premiums and discounts,as well as
issuance costs, are deferred and amortized over the life of the bonds. Bonds payable are reported net of
the applicable bond premium or discount. Issuance costs are reported as deferred charges. Long-term
obligations outstanding at year end are outlined in Note 11.
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City of Spokane Valley
Notes to Financial Statements
For governmental funds financial statements,bond issuance costs are expended at the time of issuance.
Bond premiums and discounts are deferred and amortized over the life of the bonds. Bond proceeds are
reported as other
financing sources net of the applicable premium or discount. Issuance costs,even if withheld from the
actual net proceeds received, are reported as debt service expenditures. The nature of debt in the
governmental activity is specific to a program and,therefore; debt service costs are not an allocated
expense.
6.Deferred revenues
The deferred revenues account is used to offset receivables established in the governmental fund financial
statements for certain revenues that are measurable but not considered available to finance payment of
current obligations,and,therefore,not susceptible to accrual on the modified accrual basis. When the
receivable amounts are collected in future periods,this liability account is reduced and corresponding
revenue is recorded.Deferred revenues represented in this manner on the accompanying financial
statements are: uncollected property taxes levied,uncollected road taxes levied,sales and use taxes,motor
fuel taxes,and hotel/motel taxes.
7. Compensated absences
Compensated absences are absences for which employees will be paid,such as vacation and sick leave.
Vacation pay,which may be accumulated up to 360 hours,is payable upon resignation,retirement,or
death. All vacation pay is accrued when incurred in the government-wide,proprietary and fund financial
statements. An additional amount has been accrued for the city's share of Medicare taxes and the Social
Security substitute plan related to vacation accruals. A liability for these amounts is reported in the
government fund statements only if they have matured,for example, as a result of employee resignations
and retirements.
8.Fund balance designations and reservations
hi the fund financial statements,governmental funds report reservations of fund balance for amounts that
are not available for appropriation or are legally restricted by outside parties for use for a specific
purpose. Designations of fund balance represent tentative management plans that are subject to change.
E. Revenues, expenditures,and expenses
1.Program revenues
Program revenues include charges for services to customers for goods or services provided,operating
grants and contributions, and non-operating grants and contributions within the Government-wide
statement of activities. Charges for services include business licenses,construction permits, and
recreation program fees.
2. General revenues
Property taxes,retail taxes,business taxes,excise taxes,and associated penalties and interest,and interest
and investment earnings are classified as general revenues within the Government-wide statement of
activities.
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City of Spokane Valley
Notes to Financial Statements
3.Interfund transfers
Permanent reallocations of resources between funds of the reporting entity are classified as interfund
transfers.For the purposes of the Government-wide Statement of Activities,all interfund transfers
between individual governmental funds have been eliminated.
4.Expenses/expenditures
Expenses in the Government-wide statement of activities are reported by function as a governmental
activity(general government, security of persons and property,physical environment,transportation,
economic environment,culture and recreation,or interest on long-term debt),or business-type activity
(wastewater,or
Stormwater). Certain indirect costs are included in program expenses by function. In the fund financial
statements,expenditures of governmental funds are classified current by function,debt service principle
and interest payments,or purchases of capital items. Proprietary expenditures are classified as operating
or non-operating.
5. Operating and non-operating revenues and expenses
Operating revenues and expenses for proprietary funds are those that result from providing services and
producing and delivering goods and/or services in connection to the proprietary fund's principal ongoing
operations. It also includes all revenue and expenses not related to capital and related financing,non-
capital financing,or investing activities. All revenue and expenses not meeting this definition are non-
operating revenues and expenses.
NOTE 2—STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY:
A. Scope of budget
Annual appropriated budgets are adopted for all funds on a basis consistent with generally accepted
accounting principals. Legal budgetary control is established at the fund level. Subsidiary revenue and
expenditure ledgers are used to compare the budgeted amounts with actual revenues and expenditures. As
a management control device,the subsidiary ledgers are used to monitor expenditures for individual
functions and activities by object class.
B. Procedures for adopting the original budget
The City's budget procedures are mandated by the Revised Code of Washington 35A.33. The following
are key procedural steps in the City's budget development process. Note that the process and dates are
for the 2009 budget process and may be changed for future processes:
• In April,the official"budget call"required by State law is made to all department directors or
fund managers. Budget development instructions and other materials are provided to the
departments at this time.
• In June departments submit revenue and expenditure estimates to the Finance department. The
City Council and City management staff discuss City goals and priorities and reaffirms overall
City priorities,vision,and mission at a mid-year retreat. Additional policy guidance is provided
throughout the year.
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City of Spokane Valley
Notes to Financial Statements
• In July the Finance department submits the preliminary budget to the City Manager.
• In August the City Manager submits estimates on the current year's revenue and expenditures for
the upcoming year to the council.
• During August,preliminary budget documents were prepared,printed and filed with City Clerk.
This proposed budget is presented to the City Clerk and copies are made available to the public.
The Council sets the dates of the preliminary and final budget hearings.
• Before December 31St the City Council,by a majority vote,will adopt the budget by ordinance,
establishing the budget appropriation for the year.
• The approved budget is published and distributed during the first quarter of the following year.
Copies are made available to the public.
• Monthly budget monitoring reports are produced by the Finance Department to report on actual
performance compared to budget estimates and to identify any remedial actions that may be
needed.
C. Amending the budget
The budget, as adopted,constitutes the legal authority for expenditures. The City's budget is adopted at
the fund level, so that expenditures may not legally exceed appropriations at that level of detail. The City
Manager is authorized to transfer budgeted amounts within a fund; however,any revisions that alter the
total expenditures of a fund,or that effect the number of authorized employee positions, salary ranges,or
other conditions of employment must be approved by the City Council. When the City Council
determines that it is in the best interest of the City to increase or decrease the appropriation for a
particular fund,it may do so by ordinance approved by one more than the majority after holding a public
hearing.
The City's budget was amended twice during fiscal year 2009. The financial statements contain the
original and final budget information. The original budget is the first complete appropriated budget. The
final budget is the original budget adjusted by all reserves,transfers,allocations, supplemental
appropriations,and other legally authorized changes. All appropriations lapse at year end. Unexpended
resources must be re-appropriated in the subsequent period.
D. Compliance
For the year ending December 31,2009,no material violations of finance related legal or contractual
provisions occurred and none of the funds exceeded legal appropriations for the fiscal year.
E. Deficit fund equity
At December 31,2009,there are no deficit fund equity balances to disclose.
Washington State Auditor's Office
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City of Spokane Valley
Notes to Financial Statements
NOTE 3—RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL
STATEMENTS:
The governmental fund statements include reconciliations between the fund statements and the
government-wide statements. Differences that make reconciliations necessary include the two differing
measurement focuses and basis of accounting, accrual and modified accrual between the statements.
A. Explanation of certain differences between the governmental fund balance sheet and the
government-wide statement of net assets
The governmental fund balance includes reconciliations between fund balance—total governmental funds
and net assets—governmental activities as reported in the government—wide statement of net assets. One
element of that reconciliation explains that"long-term liabilities, including capital leases payable, are not
due and payable in the current period and therefore are not reported in the funds." The details of the
($8,804,045)difference are as follows:
Long term liabilities-current balances as of 12/31/09
Bonds payable $ (8,365,000)
Premium on bond issuance (146,081)
Total $ (8,511,081)
Compensated absences (292,964)
Net adjustment to reduce fund balance- total governmental funds
to arrive at net assets-governmental activities $ (8,804,045)
Another element of that reconciliation explains the "Internal service funds" are used by management to
charge the cost of certain activities, such as health insurance costs to the individual funds.The assets and
liabilities of the internal service fund are included in governmental activities in the statement of net assets.
The details of the $918,172 difference are as follows.
Net assets of the internal service fund $ 918,172
Less: Internal payables -
Net adjustment to increase fund balance - total
governmental funds to arrive at net assets -
governmental activities $ 918,172
Also, another element of the reconciliation explains that capital assets used in governmental activities are
not current financial resources and the balance reflects the initial investment in capital assets therefore,
"governmental funds do not report capital assets."The details of the $71,584,939 difference are as
follows:
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City of Spokane Valley
Notes to Financial Statements
Beginning balance 1/1/09-Capital Assets,net of accumulated depreciation $ 61,093,539
Additions of Capital Assets,net of accumulated depreciation 19,256,904
Reductions of Capital Assets,net of accumulated depreciation (8,765,504)
Net adjustment to increase fund balance-total governmental
funds to arrive at net assets-governmental activities $ 71,584,939
B. Explanation of certain differences between the governmental fund statement of revenues,
expenditures, and changes in fund balances and the government-wide statement of activities
The governmental fund statement of revenues,expenditures, and changes in fund balances includes
reconciliation between net changes in fund balances total governmental funds and changes in net assets
of governmental activities as reported in the government-wide statement of activities. 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 as depreciation expense.The details of this
$10,491,399 difference are as follows:
Capital outlay $ 22,027,727
Depreciation expense (11,978,841)
Capital contributions (WSDOT) 442,513
Net adjustment to decrease net changes in fund balances-total
governmental funds to arrive at changes in net assets of
governmental activities $ 10,491,399
Bond payable repayments in the amount of$205,000 exceeded proceeds.
Revenues in the statement of activities that do not provide current financial resources to governmental
funds are not reported as revenues in the funds $133,416.
Another element of the reconciliation states that"some expenses reported in the statement of activities do
not require the use of current financial resources and therefore are not reported as expenditures in
governmental funds". The details of this$(44,724)difference are as follows:
Compensated absences $ (52,126)
Bond premimum expense 7,315
Interest expense 87
Net adjustment to decrease net changes in fund balances -
total governmental funds to arrive at changes in net assets of
govenmental activities $ (44,724)
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City of Spokane Valley
Notes to Financial Statements
Another element of the reconciliation states the "internal service funds are used by management to charge
the cost of certain activities, such as self insurance and equipment rental and replacement, to individual
funds."The details of this$632 difference are as follows:
Revenues:
Interest and investment income, miscellaneous revenues $ 5,380
Total Revenues 5,380
Less expenses and net transfers: (4,748)
Net adjustment to increase net changes in fund balances-
total governmental funds to arrive at changes in net assets
of governmental activities
$ 632
NOTE 4—DEPOSITS AND INVESTMENTS:
A.Deposits and investments
As of December 31,2009,the City of Spokane Valley had the following investments:
Weighted
Investment Type Average
(amounts are in thousands) Fair Value Maturity(YRS)
Commercial paper $ 5,156 0.35
State Treasurer's investment pool(LGIP) 36,992 0.44
Total fair value of investments: $ 42,148 -
Portfolio weighted average maturity 0.43
Interest rate risk. In accordance with its investment policy,the City of Spokane Valley manages its
exposure to declines in fair values by limiting the weighted average maturity(WAM)of its investment
portfolio to less than six months.
Credit risk: As required by state law, all investments of the City's funds are obligations of the U.S.
Government,U.S. agency issues,obligations of the State of Washington,general obligation of
Washington State municipalities the State Treasurer's Local Government Investment Pool(LGIP Revised
Code of Washington RCW 43.250),and certificates of deposit(CDs)with Washington State banks and
savings and loan institutions.Also, State law limits these investments to the highest ratings issued by
nationally recognized statistical rating organizations(NRSROs). It is the City of Spokane Valley's policy
to limit its investments in these investment types to the highest ratings issued by NRSROs.As of
December 31,2009,the City of Spokane Valley's investment in the State Treasurer's investment pool
was rated AA+by Standard&Poor's.The City of Spokane Valley's investments in commercial paper
was rated Al by Standard&Poor's.
Concentration of credit risk: The City of Spokane Valley's investment policy does not allow for an
investment in any one issuer that is in excess of the Federal Depository Insurance (FDIC)coverage and
the Washington Public Deposit Protection Commission(PDPC)of the City's total investments.
Washington State Auditor's Office
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City of Spokane Valley
Notes to Financial Statements
Custodial credit risk-deposits: In the case of deposits,this is the risk that in the event of a bank failure,
the City's deposits may not be returned or recovered.The City of Spokane Valley maintains a deposit
policy for custodial credit risk by limiting deposits and certificates of deposits to be covered by(FDIC)or
through collateral held in a multiple financial institution collateral pool administered by the Washington
Public Deposit Protection Commission(PDPC).The PDPC is a statutory authority established under
Chapter 39.58 of the Revised Code of Washington and provides an additional level of security for The
City of Spokane Valley's deposits.As of December 31,2009,the City of Spokane Valley's total bank
balance of$1,923,541 was insured and covered by the FDIC and the Washington State PDPC pool and
therefore,was not exposed to any custodial credit risk-deposits.These bank deposits were in a State
authorized public depository and were within the State limit of the depositaries(bank's)net worth per
RCW 39.58.010 and RCW 39.58.135.
Custodial credit risk-investments: Investments in the State's LGIP are shown on the entity-wide
Statement of Net Assets at fair market value and comparable to a Rule 2a-7 money market fund regulated
by The Securities and Exchange Commission(SEC, 17CFR.270.2a-7). The City's investments can be
categorized to give an indication of risk assumed at year-end. Category 1 includes investments that are
insured,registered,or held by the City or its agent in the City's name. Category 2 includes uninsured and
unregistered investments,which are held by the counterparty's trust department or agent in the City's
name. Category 3 includes uninsured and unregistered investments for which the securities are held by the
counterparty's trust department or agent,but not in the City's name. The City had no Category 1,2,or 3
type investments in their investment portfolio as of December 31,2009.
NOTE 5—PROPERTY TAXES:
The County Treasurer acts as an agent to collect property taxes levied in the county for all taxing
authorities. The County Assessor is responsible for determining what the individual property taxes are,
based upon the monies requested by the taxing districts and the assessed valuation within these districts.
Taxes are levied annually on January 1st on property values listed as of the prior May 31St. Assessed
values are established by the County Assessor at 100%of fair market value. A revaluation of all property
is required every four years. Taxes are due in two equal installments on April 30th and October 31St. Tax
liens are automatic at the point the taxes are levied.
Property taxes levied for the current year are recorded as a receivable when levied,offset by deferred
revenue. During the year,property tax revenues are recognized when cash is collected. At year-end,
property tax revenues are recognized for collections to be distributed by the County Treasurer in January.
No allowance for uncollectible taxes is established because delinquent taxes are considered fully
collectible.For 2009,the City levied$10,528,505 based on the 2008 assessed value of$7,019,508,327.
The tax rate for general City operations is limited by State law(RCW 84.52.043)to $3.60 per$1,000 of
assessed valuation,deducting from there the levy of$1.50 by the Spokane County Fire Districts#1 and
#8, and$.50 for Library Districts which leaves the City with the authority to levy$1.60 for its own
purposes. This amount may be reduced for any of the following reasons:
(1) The Washington State Constitution limits the total regular property taxes to one percent 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 one-percent limit.
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City of Spokane Valley
Notes to Financial Statements
(2) Initiative 747 passed by the voters in November of 2001 limits the amount by which a taxing
jurisdiction can increase the amount of its regular property tax levy to the lesser of the Implicit Price
Deflator(IPD)or one percent,plus adjustments for new construction and annexations. Tax increases
higher than one percent must be approved by the voters at an election held according to (RCW
84.55.050.) A simple majority vote is required.
(3) The City may voluntarily levy taxes below the legal limit.
NOTE 6—CAPITAL ASSETS AND DEPRECIATION:
Donated capital assets received from Spokane County at the time of incorporation were recorded at cost
and the accumulated depreciation at the time of transfer. These assets are shown as capital contributions
on the statement of activities. The following schedule details capital assets donated and transferred to the
City of Spokane Valley during the year ended December 31,2003:
Balance
after
Historical Accumulated Depreciation
Cost Depreciation Cost
Infrastructure:
Roadways $ 187,732,531 $ 127,418,027 $ 60,314,504
Signs, signals,beacons 9,056,000 4,528,000 4,528,000
Crosswalks 130,084 13,008 117,076
Bridges 5,633,979 2,808,112 2,825,867
Total infrastructure 202,552,594 134,767,147 67,785,447
Parks:
Land 1,548,655 -
1,548,655
Buildings 898,729 609,824 288,905
Improvements other buildings 2,123,571 1,059,298 1,064,273
Machinery and equipment 3,337 3,003 334
Total parks 4,574,292 1,672,125 2,902,167
Total County assets donated $207,126,886 $ 136,439,272 $ 70,687,614
Washington State Auditor's Office
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City of Spokane Valley
Notes to Financial Statements
Capital asset activity for the year ended December 31, 2009,is summarized as follows:
Beginning Ending Balance
Governmental-type activities Balance 1/1/2009 Additions Reductions Dec. 31,2009
Land(non depreciable) $ 3,961,376 $ 282,630 $ - $ 4,244,006
Construction in progress 12,425,216 10,151,032 (8,765,504) 13,810,744
Total non-depreciable assets 16,386,592 10,433,662 (8,765,504) 18,054,750
Buildings 12,216,097 - - 12,216,097
Leasehold improvements 130,021 - - 130,021
Improvements other than buildings 3,213,668 2,940,431 - 6,154,099
Infrastructure 227,651,506 17,586,740 - 245,238,246
Machinery and equipment 1,858,920 274,912 - 2,133,832
Total depreciable assets 245,070,213 20,802,083 - 265,872,295
Total capital assets $ 261,456,805 $ 31,235,745 $ (8,765,504) $ 283,927,045
Beginning Ending
Balance Balance
Less accumulated depreciation for: 1/1/2009 Additions Reductions 12/31/2009
Buildings $ 1,558,551 $ 308,557 $ - $ 1,867,108
Leasehold improvements 109,117 7,501 - 116,618
Improvements other than buildings 1,441,411 340,605 - 1,782,016
Infrastructure 196,157,204 11,075,323 - 207,232,526
Machinery and equipment 1,096,983 246,855 - 1,343,838
Total accumulated depreciation $ 200,363,266 $ 11,978,841 $ - $ 212,342,106
Capital assets,net of accumulated
depreciation $ 61,093,539 $ 19,256,904 $ (8,765,504) $ 71,584,939
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City of Spokane Valley
Notes to Financial Statements
Balance Balance
Business-type activities; 1/01/2009 Increases Decreases 12/31/2009
Construction in progress $ 376,119 $ - $ 376,119 $ -
Total non-depreciable assets 376,119 - 376,119 -
Infrastructure 323,199 376,119 - 699,319
Machinery and equipment 38,201 13,168 - 51,369
Total depreciable assets 361,400 389,287 - 750,688
Total capital assets $ 737,519 $ 389,287 $ 376,119 $ 750,688
(Less) accumulated depreciation for:
Infrastructure $ 37,321 $ 12,475 $ - $ 49,796
Machinery and equipment 10,097 7,880 - 17,977
Total accumulated depreciation 47,418 20,355 - 67,773
Capital assets, net of accumulated
depreciation $ 690,101 $ 368,932 $ 376,119 $ 682,915
Depreciation expense was charged to current functions of the primary government for 2009 as follows:
Governmental Activities:
General Government $ 136,526
Public Safety 54,865
Physical environment 245,888
Transportation 10,890,380
Economic environment 35,284
Culture and Recreation 615,899
Total governmental activities current year depreciation expense $ 11,978,841
Business-type activity:
StormWater $ 20,355
Total business-type activities current year depreciation expense $ 20,355
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City of Spokane Valley
Notes to Financial Statements
Construction commitments
The City of Spokane Valley was involved in many construction projects as of December 31,2009. The
projects include various street construction projects with a total of$16,000,867 of contracts in place. At
year end the City's commitments with contractors are as follows:
Remaining
Spent-to-Date Commitments
Various street, bridge, and parks construction projects: $ 14,183,487 $ 1,817,380
The various street,bridge, and parks construction projects are being funded by state and local grants,as
well as,existing resources in various City Funds.
NOTE 7—PENSION PLANS:
Substantially all City of Spokane Valley 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 with the
primary government of the State of Washington,issues a publicly available comprehensive annual
financial report(CAFR)than 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 Employer and
No. 50, Pension Disclosures, an Amendment of GASB Statements No's 25 and 27.
Public Employees' Retirement System (PERS)Plans 1,2, and 3
Plan Description
PERS is a cost-sharing multiple-employer retirement system comprised of three separate plans for
membership purposes; Plans 1 and 2 are defined benefit plans and Plan 3 is a defined benefit/defined
contribution combination plan. Membership in the system includes; elected officials,state employees,
employees of the Supreme,Appeals,and Superior Courts(other than judges in a judicial retirement
system),employees of legislative committees,
community and technical colleges,college and university employees (not 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 joined on or
after 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 September 1,
2002 for local government employees have the 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 Plans 2 and 3 members may opt out of plan membership if terminally ill,with
less than 5 years to live. PERS defined benefit retirement benefits are financed from a combination of
investment earnings and employer and employee contributions. Retirement benefit provisions are
established in state statute and may be amended by the State Legislature.
Washington State Auditor's Office
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City of Spokane Valley
Notes to Financial Statements
PERS Plan 1 retirement benefits are vested after an employee completes five years of eligible service.
Plan 1 members are eligible for retirement at any age after 30 years of service,or at age 60 with five years
of service or at the age of 55 with 25 years of service. The annual pension is 2%of the AFC (average
final compensation)per year of service,capped at 60%. (The AFC is based on the greatest compensation
during any 24 eligible consecutive compensation months.) Plan 1 members who retire from inactive
status prior to age 65 may receive actuarially reduced benefits. The benefit is also actuarially reduced to
reflect the choice of a survivor option.A cost-of living allowance (COLA)is granted at age 66 based
upon years of service times the COLA amount,increased by 3% annually. Plan 1 members may also elect
to receive an optional COLA amount that provides an automatic adjustment based on the Consumer Price
Index(CPI). The adjustment is capped at 3% annually. To offset the cost of this annual adjustment,the
benefit is reduced.
PERS Plan 2 retirement benefits are vested after an employee completes five years of eligible service.
Plan 2 members may retire at the age of 65 with five years of service,with an allowance of 2%of the
AFC(average fmal compensation)per year of service. (The AFC is based on the greatest compensation
during any eligible consecutive 60-months period.) Plan 2 retirements prior to the age of 65 receive
reduced benefits. If retirement is at age 55 or older with at least 30 years of service, a 3%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 3%annually.
PERS Plan 3 has a dual benefit structure. Employer contributions finance a defined benefit component,
and member contributions finance a defined contributions component. The defined benefit portion
provides a benefit calculated at 1%of the AFC (average final compensation)per year of service. (The
AFC 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 five if twelve months that were earned after age 44; or after five service credit years earned in
PERS Plan 2 prior to June 1,2003. Plan 3 members are immediately vested in the defined contribution
portion of their plan. Vested Plan 3 members are eligible to retire with full benefits at age 65,or at age 55
with 10 years of service. Retirements prior to age 65 receive reduced benefits. If retirement is at age 55
or older with at least 30 years of service, a 3%per year reduction applies;otherwise an actuarial reduction
will apply. The benefit is also actuarially reduced to reflect the choice of a survivor option. There is no
cap on years of service credit; and Plan 3 provides the same cost-of-living allowance as Plan 2. The
defined contribution portion can be distributed in accordance with an option selected by the member,
either as a lump sum or pursuant to other options authorized by the Employee Retirement Benefits Board.
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,as reported by The Washington State
Department of Retirement Systems (DRS):
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
Washington State Auditor's Office
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City of Spokane Valley
Notes to Financial Statements
Funding Policy
Each biennium,the state Pension Funding Council adopts Plan 1 employer contribution rates,Plan 2
employer and employee contribution rates, and Plan 3 employer contribution rates. Employee
contribution rates for Plan 1 are established by statute at 6.0%for state agencies and local government
unit employees, and 7.5%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 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 defmed 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 dependant on
the employee's age. The methods used to determine the contribution requirements are established under
state statute in accordance with chapters 41.40 and 41.45 Revised Code of Washington.
Required contribution rates(expressed as a% of current-year covered payroll),as of December 31, 2009,
were as follows:
PERS Plan 1 PERS Plan 2 PERS Plan 3
Employer * 5.31%** 5.31%** 5.31%***
Employee 6.00%**** 3.90%**** *****
*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 Plans 2 and 3.
*** Plan 3 defmed 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 PERS 3 member.
Both the City of Spokane Valley and the employees made the required contributions. The City of
Spokane Valley required contributions for the years ending December 31,2009 were as follows.
PERS Plan 1 PERS Plan 2 PERS Plan 3
2009 Employer contributions $ 14,509 $ 212,142 $ 99,073
2008 Employer contributions 13,956 203,950 75,875
2007 Employer contributions 11,380 142,325 46,987
2006 Employer contributions 3,238 63,233 24,919
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City of Spokane Valley
Notes to Financial Statements
NOTE 8—RISK MANAGEMENT:
The City of Spokane Valley is exposed to financial loss resulting from City-caused damage to property or
persons,bodily injuries or illness of employees, and unemployment compensation. The City is insured
and a member of the Washington Cities Insurance Authority(WCIA) for general liability and property
damage coverage. The City uses the Washington State Department of Labor and Industries Insurance
Services for coverage to pay for medical care for job-related injuries and illnesses, and wage replacement
when the injury or illness is serious enough to miss work. The City is self-insured for unemployment
compensation benefits.
The Risk Management Fund is used to account for,and finance the liability and unemployment insurance
costs. Departments of the City make payments through interfund assessments to the fund on estimates of
the amounts needed to pay prior and current year claims.
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 professional,public officials' errors and omissions, stopgap, 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 insurance. In-
house services include risk management consultation,loss control field services,claims and litigation
administration and loss analyses. WCIA contracts for the claims investigation consultants for personnel
issues and land use problems,insurance brokerage and lobbyist services.
WCIA is fully funded by its members,who make annual assessments on prospectively rated basis, as
determined by an outside independent actuary. The assessments cover loss,loss adjustment,and
administrative expenses.As outlined in the interlocal,WCIA retains the right to additionally assess the
membership for any funding shortfall.
An investment committee,using investment brokers produces additional revenue by investment of
WCIA's assets in financial instruments which comply with 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
Washington State Auditor's Office
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City of Spokane Valley
Notes to Financial Statements
direction for the organization. The WCIA Executive Director reports to the Executive Committee and is
responsible for conducting the day to day operations of the WCIA.
The City is self-insured on a reimbursement basis for unemployment compensation. The City incurred
$15,762 in claims for unemployment compensation in 2009.
NOTE 9—INTERFUND BALANCES AND TRANSFERS:
Interfund Balances
Due to other funds and due from other funds result from goods issued,work performed or services
rendered to or for the benefit of another fund of the same government. The amount of interfund loans
payable within one year is also included in due to and due from other funds.
Due to other fund and due from other fund balances at December 31,2009 were:
Due from Due to
other funds other funds
General fund $ 2,423,000 $ -
Street fund 446,000 355,000
Street capital projects fund 334,544 2,699,000
Barker bridge fund - 1,710,000
Nonmajor governmental funds 2,774,000 1,213,544
Total government -wide $ 5,977,544 $ 5,977,544
All remaining interfund balances resulted from the time lag between year end and beginning fiscal year
dates that(1)interfund goods and services are provided or reimbursable expenditures occur,(2)actual
fiscal year end transactions are recorded in the accounting system, (3)when payments between funds are
made, and(4)temporarily eliminate fiscal year end overdrawn(negative balances)pooled cash positions.
Interfund transfers are the flow of assets with a reciprocal return of assets,goods,or services.The City
uses transfers to(1)move revenues from the fund that statutes or budget requires to collect them to the
fund that statute or budget requires to expend them, (2)move receipts restricted to debt service from the
funds collecting the receipts to the debt service fund as debt service payments become due,and(3)use
unrestricted revenues collected in the general and street funds to finance various programs accounted for
in other funds in accordance with budgetary authorizations.
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City of Spokane Valley
Notes to Financial Statements
Interfund transfer activity for 2009 is as follows:
Transfers - in Transfers - (out)
General fund $ 516,263 $ 1 ,105,000
Street fund - 414,300
Arterial street fund - 310,704
Hotel/Motel fund - 86,963
Winter weather reserve fund 355,000 -
Civic facilities replacement fund 397,000 -
Debt service fund 186,502 -
Capital projects fund - 1 ,954,190
Special capital projects fund - 2,908,057
Street capital projects fund 4,271 ,913 -
Mirabeau point project fund - 363,722
Capital grant fund 328,490 -
Parks capital projects fund 1 ,617,762 -
Stormwater management fund - 759,994
Internal service funds 230,000 -
Total government - wide $ 7,902,930 $ 7,902,930
NOTE 10—SHORT-TERM DEBT::
As of December 31,2009,the City incurred no short-term debt.
NOTE 11—LONG-TERM OBLIGATIONS AND LEASES:
General Obligation Bonds
The City issues general obligation bonds to provide funds for the acquisition and construction of major
capital facilities. General obligation bonds have been issued for governmental-type activities.
General obligation bonds are direct obligations and pledge the full faith and credit of the government.
General obligation bonds are either created by 315th majority vote of the people and,therefore, financed by
a special tax levy; or created by ordinance, adopted by the City Council, and normally financed from
general revenues(councilmanic bonds). General obligation bonds currently outstanding are as follows:
In 2003,the City issued $9,430,000 in councilmanic bonds to finance the construction of the CenterPlace
Community Center and for various street construction projects. The City expects to receive
intergovernmental payments from the Spokane Public Facilities District pursuant to an inter-local
agreement dated July 2003, for up to $7 million of bonds.
Washington State Auditor's Office
54
City of Spokane Valley
Notes to Financial Statements
General obligation bonds currently outstanding as December 31, 2009 are as follows:
Debt
Name of Issuance Purpose Interest Rate Outstanding
2003 LTGO Bonds Governmental Activities 2.00% - 5.00% $8,365,000
The annual debt service requirements to maturity for general obligation bonds are as follows:
Governmental - Type Activities
Total
Principal Interest Requirements
2010 210,000 395,022 605,022
2011 225,000 386,622 611,622
2012 240,000 377,623 617,623
2013 255,000 368,023 623,023
2014 270,000 357,822 627,822
2015-2019 1,655,000 1,612,068 3,267,068
2020-2024 2,480,000 1,135,250 3,615,250
2025-2029 2,090,000 519,250 2,609,250
2030-2033 940,000 112,500 1,052,500
Totals $ 8,365,000 $ 5,264,180 $ 13,629,180
Long-term debt on the Statement of Net Assets is presented net of any premium/discount incurred at the
time of issuance. The 2003 LTGO Bonds were sold at a premium of$189,974 and were reported at the
net amount of$9,619,974. The premium will be amortized over the life of the bonds and the outstanding
liability balance as of December 31, 2009 is: $146,081.
Chances in Lone-Term Liabilities
During the year ended December 31, 2009,the following changes occurred in long-term liabilities:
Amounts
Balance Balance Due within
Governmental -type activities 1/1/2009 Additions Reductions 12/31/2009 One Year
Bonds and notes payable:
General obligation bonds $ 8,570,000 $ - $ 205,000 $ 8,365,000 $ 210,000
Premium on LTGO bonds 153,396 7,315 146,081 7,315
Other liabilities:
Compensated absences 240,838 52,126 - 292,964 52,126
Governmental activities
long-term liabilities $ 8,964,234 $ 52,126 $ 212,315 $ 8,804,045 $ 269,441
Washington State Auditor's Office
55
City of Spokane Valley
Notes to Financial Statements
Legal Debt Margin
RCW 39.36.020 provides cities with three segments of debt capacity,each equal to two and one-half
percent of the city's assessed valuation,for a total debt capacity of seven and one-half percent.
The assessed valuation of the City for the year 2009 for purposes of determining the legal debt margin is
$7,019,508,327. Under State of Washington statutes general obligation indebtedness pursuant to a vote of
the electorate is limited to 2.5%of actual value of taxable property located within the City. Indebtedness
without a vote of the people is limited to 1.5%of actual value subject to the limitation that total general
purpose indebtedness may not exceed 2.5% of total valuation. There is a 2.5% limitation each for utility
purposes and open space and park facilities purposes.
The remaining voted and non-voted GO debt capacities for General purposes of the City at December 31,
2009 are as follows:
Amount
General Purposes Voted and Non-voted Debt-2.5% (1) $ 166,829,744
Utility Voted Debt-2.5% 175,487,708
Open Space and Park Facilities Voted Debt-2.5% 175,487,708
Total Remaining Debt Capacity $ 517,805,160
(1)Includes: $96,634,661 General purpose indebtedness without a vote.
Leases
Operating Leases—The City of Spokane Valley leases buildings and other equipment under
noncancelable operating lease agreements. Operating leases do not give rise to property rights or lease
debt obligations, and therefore the results of these agreements are not reflected in the General Long-term
Obligations of government activities.Total costs for such leases were $498,149 for the fiscal year ending
December 31,2009.The future minimum lease payments for these leases are presented as follows:
Year ending Dec. 31 Amount
2010 $ 532,944
2011 533,177
2012 521,369
2013 120,116
Total minimum future lease payments $ 1,707,606
Washington State Auditor's Office
56
City of Spokane Valley
Notes to Financial Statements
NOTE 12—SUBSEQUENT EVENTS:
A review of services provided under contract and costs paid to the Spokane County Sheriffs Office for
law enforcement during fiscal year 2006 appears to indicate the City of Spokane Valley overpaid.
Spokane County reviewed the same results and believes the City underpaid in 2006 and in subsequent
years. The City reserved all rights during this review and paid an additional $1.3 million during 2009.
Negotiations are underway to determine the accuracy of this information and to recover any prior
overpayments or underpayments.
Spokane County has been leasing space in the City of Spokane Valley police precinct building since June
1,2007.While a final decision has not been made, Spokane County began to reduce their occupancy of
the lease space and the corresponding share of maintenance costs. Rental income to the City of Spokane
Valley was $34,280 and the county's share of maintenance costs were $17,284 for 2009.
In early 2009 Spokane County advised the City of Spokane Valley that the contract for winter weather
maintenance, snow plowing,deicing, and sanding,of City streets would terminate in October 2009. The
City of Spokane Valley acquired five used snow plows from the State of Washington, and a facility near
city hall was leased to house and maintain street equipment. Estimated additional cost to the city to
provide this service ranges between$200,000 and$600,000 annually.
The Barker Road Bridge project contract was officially awarded in the amount of$9,449,355 on June
2008,through a Federal funded grant program with the potential of$10 million in grant revenue proceeds
over the next few years. Total cost of the project is expected to be near$11.8 million with the City
paying costs in excess of$10 million from real estate excise tax(REETS).
In late 2009,the City was awarded a contract for the construction of Discovery Park.A State Grant of
$800,000 will assist the City in paying for this$1.6 million community improvement. Completion of this
project is expected in 2010.
NOTE 13—CONTINGENCIES AND LITIGATION:
In the normal course of governmental operations the City has claims filed against it for various losses
related to tort actions for such things as wrongful acts,injuries,or damages for which a civil action can be
brought, and other routine legal proceedings. At any given point in time,there is a recurring volume of
tort and other claims for compensation and damages against the City,which could impact expenditures.
The City's Risk Management fund provides for these claims, and insurance is available to pay a portion of
damages for certain types of claims. The collective impact of these claims is not likely to have a material
impact on the City's financial position.
The City participates in a number of federal-and-state assisted programs. These grants are subject to audit
by the granting agencies and or their representatives. Such audits could result in requests for
reimbursement to grantor agencies for expenditures disallowed under the terms of the grants. City
management does not believe that such disallowances,if any,will be material.
During fiscal year 2003,the City of Spokane Valley acquired 31 acres of land from Spokane County to be
used for a city park.After acquisition,it was determined that a concrete company on the adjacent parcel
had inadvertently contaminated the acquired property of the City because of confusion over property lines.
Washington State Auditor's Office
57
City of Spokane Valley
Notes to Financial Statements
The concrete company has agreed to assist the City of Spokane Valley in cleaning the contaminated City
property.The concrete company is currently preparing a plan which will be subject to state review and
approval for cleanup of this property.No formal agreement has been signed by the parties and an estimate
of cleanup costs has not been prepared.
NOTE 14—RESTRICTED NET ASSETS:
The governmental-wide statement of net assets reports$3,689,416 of restricted net assets(City Council
authorized),which includes: $3,689,416 for various Capital Projects.
NOTE 15—RECEIVABLE AND PAYABLE BALANCES:
A)Receivables
Receivables at December 31,2009 were as follows:
Governmental Type Accounts Taxes Grants Due from Other Total
Activities receivable(net) receivable receivable other funds receivables receivables
General fund $ 217,096 $ 3,581,840 $ 9,767 $ 2,423,000 $ 14,879 6,246,582
Street fund 31,806 682,914 11,761 446,000 1,104 1,173,585
Street capital projects fund - - 5,974,791 334,543 - 6,309,334
Barker bridge reconstruction fund 232,455 - 1,533,760 - - 1,766,215
Other Governmental funds 408,440 121,204 - 2,774,000 61,057 3,364,701
Total Governmental
type activities $ 889,797 $ 4,385,958 $ 7,530,079 $ 5,977,544 $ 77,040 $ 18,860,418
Business Type Accounts Taxes Due from Other Total
Activities receivable(net) receivable other funds receivables receivables
Stormwater management fund $ - $ 70,290 $ - $ 28,122 $ 98,412
Total Business
type activities $ - $ 70,290 $ - $ 28,122 $ 98,412
Washington State Auditor's Office
58
City of Spokane Valley
Notes to Financial Statements
B) Payables
Payables at December 31, 2009 were as follows:
Governmental Type Accounts Salaries& Due to Deposits Other
Activities payables beneifits payable other funds payables liabilities Total
General fund $ 479,934 $ 394,142 $ - $134,676 $ 2,076,608 3,085,360
Street fund 337,308 15,446 355,000 - 161,778 869,532
Street capital projects fund 3,220,747 15,578 2,699,000 - 301,448 6,236,772
Barker bridge reconstruction fund 43,587 3,660 1,710,000 - 9,073 1,766,320
Other Governmental funds 116,967 2,206 1,213,544 1,667 101,211 1,435,595
Reconciliation of balances in the
fund financial statements to
government-wide financial
statements - - - - 6,366,600 6,366,600
Total Governmental
type activities $ 4,198,542 $ 431,033 $ 5,977,544 $136,343 $ 9,016,718 $ 19,760,179
Business Type Accounts Salaries& Deposits Other
Activities payables beneifits payable payables liabilities Total
Stormwatermanagementfund $ 38,249 $ - $ 35,100 $ 77,553 $ 150,903
Total Business
type activities $ 38,249 $ - $ 35,100 $ 77,553 $ 150,903
Washington State Auditor's Office 26
59
City of Spokane Valley, Washington
Schedule of Revenues, Expenditures and Changes in Fund Balances
Budget to Actual
General Fund,Major Fund
For the Year Ended December 31, 2009
Budgeted Amounts
Variance with
Approved Final Final Budget
Original Budget Amended Budget Actual Over(Under)
Revenues
Taxes $ 30,980,000 $ 30,605,000 $ 27,526,074 $ (3,078,926)
Licenses and permits 2,413,150 2,402,650 2,121,233 (281,417)
Intergovernmental revenues 857,550 1,257,550 1,785,273 527,723
Charges for services 693,305 698,505 835,489 136,984
Fines and forfeitures 765,730 765,730 778,136 12,406
Investment interest 300,000 340,441 137,934 (202,507)
Miscellaneous 987,676 922,235 1,495,673 573,438
Total Revenues 36,997,411 36,992,111 34,679,812 (2,312,300)
Expenditures
Current:
General government 18,676,924 4,944,363 4,215,537 728,826
Public safety 20,906,084 20,782,084 20,557,834 224,250
Utilities and physical environment 2,139,161 2,263,147 1,730,981 532,166
Transportation 43,000 88,000 34,300 53,700
Economic environment 166,000 239,000 148,229 90,771
Community development 2,263,626 2,578,640 2,044,939 533,701
Culture and recreation 2,443,369 2,437,519 2,287,310 150,209
Capital Outlay:
Capital expenditures 215,671 296,521 137,691 158,830
Construction in progress - - - -
Total Expenditures 46,853,835 33,629,274 31,156,821 2,472,453
Excess(Deficiency) of Revenues (9,856,424) 3,362,837 3,522,991 160,153
Over(Under) Expenditures
Other Financing Sources (Uses)
Transfers in 174,900 180,200 516,263 336,063
Transfers(out) (2,435,120) (2,432,000) (1,105,000) 1,327,000
Total Other Financing Sources (Uses) (2,260,220) (2,251,800) (588,737) 1,663,063
Net Change in Fund Balances (12,116,644) 1,111,037 2,934,254 1,823,216
Fund Balances Beginning of Year: 21,692,296 21,692,296 21,692,296 -
Fund Balances End of Year: $ 9,575,652 $ 22,803,333 $ 24,626,550 $ 1,823,216
Washington State Auditor's Office
60
City of Spokane Valley, Washington
Schedule of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual
Street Fund, Major Fund
For the Year Ended December 31, 2009
Budgeted Amounts
Variance with
Approved Final Final Budget
Original Budget Amended Budget Actual Over(Under)
Revenues
Taxes $ 4,550,000 $ 2,500,000 $ 3,054,508 $ 554,508
Intergovernmental revenues - 2,150,000 2,021,854 (128,146)
Charges for services - - 27,945 27,945
Investment interest 125,000 125,000 10,895 (114,105)
Miscellaneous - - 90,972 90,972
Total Revenues 4,675,000 4,775,000 5,206,173 431,173
Expenditures
Current:
Utilities and physical environment - 370,000 340,558 29,442
Transportation 7,274,100 3,753,596 3,954,601 (201,005)
Capital Outlay:
Capital expenditures 40,000 141,504 203,405 (61,901)
Construction in progress - - - -
Total Expenditures 7,314,100 4,265,100 4,498,564 (233,464)
Excess (Deficiency) of Revenues (2,639,100) 509,900 707,609 197,709
Over(Under) Expenditures
Other Financing Sources(Uses)
Transfers in 1,175,000 1,175,000 - (1,175,000)
Transfers(out) (77,900) (77,900) (414,300) (336,400)
Total Other Financing Sources(Uses) 1,097,100 1,097,100 (414,300) (1,511,400)
Net Change in Fund Balances (1,542,000) 1,607,000 293,309 (1,313,691)
Fund Balances Beginning of Year 1,617,254 1,617,254 1,617,254 -
Fund Balances End of Year $ 75,254 $ 3,224,254 $ 1,910,563 $ (1,313,691)
Washington State Auditor's Office
61
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ABOUT THE STATE AUDITORS OFFICE
The State Auditor's Office is established in the state's Constitution and is part of the executive
branch of state government. The State Auditor is elected by the citizens of Washington and serves
four-year terms.
Our mission is to work in cooperation with our audit clients and citizens as an advocate for
government accountability. As an elected agency, the State Auditor's Office has the independence
necessary to objectively perform audits and investigations. Our audits are designed to comply with
professional standards as well as to satisfy the requirements of federal, state, and local laws.
The State Auditor's Office employees are located around the state to deliver our services effectively
and efficiently.
Our audits look at financial information and compliance with state,federal and local laws on the part
of all local governments, including schools, and all state agencies, including institutions of higher
education. In addition,we conduct performance audits of state agencies and local governments and
fraud, whistleblower and citizen hotline investigations.
The results of our work are widely distributed through a variety of reports, which are available on
our Web site and through our free, electronic subscription service. We continue to refine our
reporting efforts to ensure the results of our audits are useful and understandable.
We take our role as partners in accountability seriously. We provide training and technical
assistance to governments and have an extensive quality assurance program.
State Auditor Brian Sonntag, CGFM
Chief of Staff Ted Rutt
Deputy Chief of Staff Doug Cochran
Chief Policy Advisor Jerry Pugnetti
Director of Audit Chuck Pfeil, CPA
Director of Special Investigations Jim Brittain, CPA
Director for Legal Affairs Jan Jutte, CPA, CGFM
Director of Quality Assurance Ivan Dansereau
Local Government Liaison Mike Murphy
Communications Director Mindy Chambers
Public Records Officer Mary Leider
Main number (360) 902-0370
Toll-free Citizen Hotline (866) 902-3900
Website www.sao.wa.gov
Subscription Service https://www.sao.wa.gov/EN/News/Subscriptions/
(SAO FACTS.DOC-Rev.06/09)