2003 Comprehensive Annual Financial Report ,
poka . e
.0,001FV. lley
_ Comprehensive Annual
Financial Report
For the Fiscal Year Ended
December 31, 2003
This Page Intentionally Left Blank
T� .,, r,
--PY\ / '
City of Spokane Valley
Washington •
Comprehensive Annual Financial Report
For the Fiscal Year
March 31, 2003 Through December 31, 2003
Department of Finance.
Ken Thompson
Finance and Administrative Services Director
This Page Intentionally Left Blank
Y!_-1
r
,\41t
TABLE OF CONTENTS
Introductory Section
Table of Contents i
Letter of Transmittal 1
Principal Officials 5
Organization Chart 6
Financial Section
Independent Auditor's Report. 9
Management's Discussion and Analysis 11
Basic Financial Statements
Government-Wide Financial Statements:
Statement of Net Assets 22
Statement of Activities 23
Fund Financial Statements:
Balance Sheet—Governmental Funds 26
Reconciliation of Total Governmental Fund Balances to Net
Assets of Governmental Activities 27
Statement of Revenues, Expenditures and Changes in Fund
Balances—Governmental Funds 28
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund
Balances of Governmental Funds to the Statement of Activities 29
Statement of Revenues, Expenditures, and Changes in Fund Balances—Budget and Actual:
General Fund 30
Street Fund 31
Mirabeau Point Project 32
Street Bond Capital Projects 33
Statement of Net Assets—Proprietary Funds 34
Statement of Revenues, Expenses, and Changes in Fund Equity—Proprietary Funds 35
Statement of Cash Flows—Proprietary Funds 36
Notes to the Financial Statements 37
Combining and Individual Fund Statements and Schedules
Governmental Funds:
Description of Special Revenue and Capital Project Funds 55
Combining Balance Sheet—Nonmajor Governmental Funds 56
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Nonmajor Governmental Funds 57
Combining Balance Sheet—Nonmajor Special Revenue Funds 58
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Nonmajor Special Revenue Funds 59
Combining Balance Sheet—Nonmajor Capital Project Funds 60
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Nonmajor Special Revenue Funds 61
i
Financial Section (Continued)
Schedule of Revenues; Expenditures,.and Chang es in Fund'Balance—Budget&Actual:
Arterial Street Fund 63
Hotel/Motel Fund 64
Capital Projects Fund 65
Special Capital Projects Fund 66
Street Capital Projects Fund ,-, ,67
Proprietary Funds:
Description of Internal Service Funds , ., , 68
Combining Statement of Net'Assets—Internal Service Funds . 69
Combining Statement of Revenues, Expenses, and Changes in Fund Equity—
Internal Service 7,0
Combining Statement of Cash Flows—Internal Service , 71
Capital Assets Used in the Operation of Governmental Funds:
Schedule by-Source 73
Schedule by Function and Activity 74
Schedule of Changes by Function and Activity ,. ,,. . '75
Statistical Section
General Governmental Expenditures and Other Uses by Function 79
General Governmental Revenues and Other Sources•by Source 79
General Governmental Tax:Revenues by Source 79
Property Tax Levies and Collections 80
Assessed and Estimated Actual Value of Taxable Property 80
Property Tax Rates'—Direct and Overlapping Governments 81
Computation of Direct and Overlapping Debt—General Obligation.-Bonds - 81
Ratio of'Net Direct Bonded Debt to.Assessed Value and Bonded:Debt:Per Capita 82
Ratio of Annual Debt Service Expenditures for General Obligation Bonded Debt
to Total General Governmental Expenditures 82
Computation of Limitation of Indebtedness , - - 83
Demographic Statistics 84
Property Value and Construction,,Permits - 84
Principal Taxpayers 85
Largest:Private Employers 85
Miscellaneous'Statistics 86
•
•
Introduction
1
This Page Intentionally Left Blank
,
•
LL ›- -,, -
- "Li
oI411111111111\11
ne
11707 E Sprague Ave Suite 106♦Spokane Valley WA 99206
509.921.1000 • Fax: 509.921.1008 i cityhall@spokanevalley.org
December 3, 2004
To the Honorable Mayor, Members of the City Council, and Citizens of the City of
Spokane Valley:
The Comprehensive Annual Financial Report of the City of Spokane Valley, for
the fiscal year ended December 31, 2003, is submitted herewith. This report
consists of management's representations concerning the finances of the City of
Spokane Valley. Consequently, management assumes full responsibility for the
completeness and reliability of all of the information presented in this report. To
provide a reasonable basis for making these representations, management of the
City of Spokane Valley has established a comprehensive internal control
framework that is designed to both protect the government's assets from loss,
theft, or misuse and to compile sufficient reliable information for the preparation
of the City of Spokane Valley's financial statements in conformity with GAAP.
Because the cost of internal controls should not outweigh their benefits, The City
of Spokane Valley's comprehensive framework of internal controls has been
designed to provide reasonable rather than absolute assurance that the financial
statements will be free from material misstatement. As management, we assert
that, to the best of our knowledge and belief, this financial report is complete and
reliable in all material respects.
The City of Spokane Valley's financial statements have been audited by the
Washington State Auditor's Office. The goal of the independent audit was to
provide reasonable assurance that the City's financial statements for the fiscal
year ended December 31, 2003, are free of material misstatement. The
independent audit involved examining, on a test basis, evidence supporting the
amounts and disclosures in the City of Spokane Valley's financial statements;
assessing the accounting principles used and significant estimates made by
management; and evaluating the overall financial statement presentation. The
independent auditor concluded, based upon the audit, that there was a
reasonable basis for rendering an unqualified opinion that the City of Spokane
Valley's financial statements for the fiscal year ended December 31, 2003 are
fairly presented in conformity with generally accepted accounting principles
(GAAP). The independent auditor's report is present as the first component of
the financial section of this report.
1
Generally accepted accounting principles require that management provide a
narrative introduction, overview, and analysis to accompany the basic financial
statements in the form of Management's Discussion and Analysis (MD&A). This
letter of transmittal is designed to complement .MD&A and should be read in
conjunction with, it. The City of Spokane Valley's MD&A can .be found following
the independent auditor's report.
Profile of the Government
The_City Spokane Valley is a.Noncharter optional code City, operating under
Section 35A of the Revised Code of Washington. It has a Council-City Manager
form of government with ,a seven-member City Council elected by the voters of
the City. Councilmembers are elected at large rather than by district, are
responsible for establishing the general guidelines and policies for the City, and
each serves a four-year term. The Council elects the Mayor and Deputy Mayor
from within its ranks. The "Council appoints the City Manager as the C ity's chief
executive officer responsible for carrying out the policies and direction set by the
Council. This includes the enforcement of laws and ordinances, the execution of
contracts and agreements, and maintenance of peace and order in the City.
Incorporated on March 31., 2003,.Spokane Valley is located in the eastern part of
Spokane County adjacent on the east by the City of Liberty Lake and on the west
by the City of Spokane. The City encompasses an area of 38.5 square miles and
is linked to established transportation corridors.
The City of Spokane Valley provides a full, range of local government services.
These services include police protection, construction and maintenance of the
streets and traditional municipal infrastructure, planning and zoning, library
services, and park and recreational, activities. In addition, the City operates an
equipment maintenance/rental fund and sewer and stormwater utilities. The City
contracts with Spokane County for police protection, jail and court services, park
maintenance, and street maintenance. Library services are contracted through
the Spokane County Library District.
Factors Affecting,Financial Condition
The information:presented in the financial statements is perhaps best understood
when it is considered from the broader perspective of the specific environment
within which the City of Spokane Valley operates.
Local Economy. •
The City of Spokane Valley is the second largest city in Spokane County with a
current population of 83,950. A diversified mix of industries exists within
Spokane Valley with retail and service sectors being the largest. Department
stores, automobile dealerships, and electronic/computer stores lead the retail
2
sector. The service sector has a large concentration of real estate companies,
service call centers, financial institutions, accounting firms, and computer
software companies.
The Spokane Industrial Park, located in the City; is the largest operating
industrial park in the Pacific Northwest with 545 zoned acres and over 4.2 million
square feet of enclosed space in 67 separate building. The park has
approximately 120 tenants employing over 4,500 people.
The economic recession which began in 2001 continues to impact the City of
Spokane Valley and the Inland Empire. region. Spokane Valley experienced ,a
decline in development activity and general slowdown in business activity.
Regional economists predict that the Spokane area economy will grow slightly in
2004.
Long-term.Financial Planning
The City is currently developing a five-year strategic plan for future budgetary
impacts. Due to the recession and the loss of the Kaiser Aluminum Plant, the City
anticipates that General Government revenues will be relatively stagnant for
2004 and 2005.
On the expense side of the City's budget,,employee health benefits stand out as
a significant challenge, as the recent inflation rate in medical care has far
exceeded the general inflation rate. Health care costs are expected to influence
not only employee benefit costs but also contract costs with Spokane County for
law enforcement and street maintenance.
The governing body is committed to establishing and maintaining a healthy
general fund budget reserve. The goal over the next seven years is to maintain a
general fund unreserved balance of between 8 and 15% of revenues. The.City is
committed' to working with the citizens, businesses, and other governmental •
agencies in delivering efficient and effective services to,the.community.
Cash Management
The City Finance Director, pursuant to the City's investment policy, manages the
daily cash and investment activity. Spokane Valley structures its investments to
minimize risk while maintaining reasonable yields on its portfolio.
Cash temporarily idle during the year was invested in the Washington State Local
Government Investment Pool and money market funds. The average yield was
1.2% which produced earnings of $54,468 on all investments for the year ended
December 31, 2003. In accordance with the requirements set by State law, the
State Deposit Protection Commission also insures deposits with in-state'banks'.
3
•
Risk Management
The City of Spokane Valley is a member of the Washington Cities Insurance
Authority (WCIA) for general liability and property damage coverage. The City is
self-insured for unemployment compensation benefits and uses the Washington
State Department of Labor and Industries 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 accounts for its risk management activities in internal service funds and
charges the operating funds annually for the insurance costs. Please refer to
Note 7, Risk Management in the notes section of this report.
Retirement Systems
The City and its employees contribute to a mandatory retirement system
managed by the State of Washington. The Public Employees Retirement System
(PERS) (Plans 1,2, and 3) covers all non-uniformed regular employees. During
2003, the City contributed $14,291 toward these plans.
The City has replaced the Federal Social Security Program with a_ defined
contribution savings program. The City contributes to the program at social
security tax rates but incurs no unfunded liability since the program is a.defined
contribution plan.
For information on the City of Spokane Valley's pension plans, refer to Note 6 in
•
the notes to the financial statements.
Acknowledgements
The preparation of this report could not have been accomplished without the
efficient and dedicated service of those individuals and departments who have
contributed to its publication. I would like to express my appreciation to everyone
who contributed to its preparation. I would also like to thank the Mayor and
members of the. City Council for their interest and support in planning and
conducting the financial operations of the City in a responsible manner.
Respectfully submitted,
.4.1-4161N
Ken Thompson
Finance and Administrative Services Director
4
CITY OF SPOKANE VALLEY
City Council Members
Michael DeVleming, Mayor Diana Wilhite, Deputy Mayor
Position#3 Position#1
Steve Taylor Gary Schimmels
Position #2 Position #4
Richard Munson Mike Flanigan
Position #5 Position #6
Dick Denenny
Position#7
Staff
David Mercier, City-Manager
Nina Regor, Deputy City Manager
Ken Thompson, Finance,&Administrative'Services Director
Marina Sukup, Community Development Director
Mike Jackson, Parks'& Recreation Director
Neil Kersten, Public Works Director
Cary Driskell, Deputy City Attorney
Tom Scholtens, Building Official
Chris Bainbridge, City Clerk
5
CITY COUti IL MEMBERS
Dick Denenny. Michael DeVleming,Mayor Gary Schlmmeis
Mike Flanigan Diana na Wilhite,Deputy Mayor Stave Taylor
Rich Munson
•
CITY MANAGER/CEO CITY ATTORNEY
1
Dave Mercier (Contract)
DEPUTY CITY
MANAGERICOO
Nine Regor
i
EXECUTIVE& COMMUNITY ' ,�;�' '..' - ' ��Q
'41,1 4i' ,a ti 4 PUBLIC WORKS, PARKS& PEi '1'IQN3.& '
LEGISLATIVE- ,DEVELOPMENT rk '` k ECREATION ,` ,
,,,? � :;'•�=z�Y,, Ne/1 Ke�`sten iii y R O N':
OR Marina Sukup X 473 ,-• '4.s�4 :4'F?.f} ?. Mike ackson ;k`' tp ;' "�`
City Clerk Patel .Capital _ Parks _ Operations .
- Improvement (Contract) Oversight ,
Plan
Legislative Investigation - Aquatics Finance •
Relations Development (Contract)
. Engineering
Intergovernmental - Prevention Recreation Legal
-1 Coordination Programs
.. - Stormwater - ,,
Emergency Senior' , _ Contract
Management Center Administration
Transportation
Planning/ Building
GIS, Administrative '
I 11 -
I I Transportation ` CenterPlace
Services
Planning
Long Code Permits! -
Range Current Compliance Inspections - Street
Neighborhood M_aintenance
Traffic (Contract)
• Management
Financial Section
This Page Intentionally Left Blank.
_.t
\ „
8
_� - Via:
L41,,
Sunset (360)9(2-0370
Sst Building e 40021 Washington State Auditor FAX(360)753-0646
Olympia.Washington 98504-0021 Brian Sonntag TDD delay 1-800-833-6388
fittpliwww.saa.mgoe•
INDEPENDENT AUDITOR'S REPORT
December 3,2004
The Honorable Mayor and City Council
11707 E Sprague Ave,Ste 106
Spokane Valley,Washington 99206
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 31,2003,as listed in the table of contents. These financial statements are the responsibility
of the City's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our financial audit in accordance with auditing standards generally accepted in the United States of America
issued by the Comptroller General of the United States of America. 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 opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the
governmental activities, the business-type, each major fund, and the aggregate remaining.fund information of the City of
Spokane Valley,Spokane County,Washington,as of December 31,2003,and the respective changes in financial position and
cash flows,where applicable,thereof, for the year then ended in conformity with accounting principles generally accepted in
the United States of America.
The Management's Discussion and Analysis on pages 11 through 20 and the budgetary comparison Information on pages 63
through 67, 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
inquires 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 of
Spokane Valley's basic financial statements. The accompanying financial information listed as combining financial statements
and supplemental information on pages 55 through 75 is presented for purposes of additional analysis and is not a required
part of the basic financial statements. The combining financial statements and'supplemental information has been subjected
to auditing procedures applied in the audit of the basic financial statements and, in our opinion,are fairly stated, in all material
respects,In relation to the basic financial statements taken as a whole.
The information identified in the table of contents as the introductory and Statistical Sections is presented for purposes of
additional analysis and is not a required part of the basic financial statements of the City. Such information has not been
subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no
opinion on them.
Sincerely,
BRIAN SONNTAG,CGFM
STATE AUDITOR
9
tuf
This Page Intentionally Left Blank
-404
Spokane
6,1
10
MANAGEMENT'S DISCUSSION AND ANALYSIS
This section of the City of Spokane Valley's annual financial report provides a narrative
overview of the City's financial activities for the-fiscal year ended December 31, 2003
and financial position as of December 31', 2003. This information, should be read in
conjunction with the preceding letter of transmittal and the financial statements and
'notes to the financial statements that follow. Previous year comparable data is not
available as this is the first year of incorporation for the City. Comparable data will be
provided in the 2004 annual financial report.
FINANCIAL HIGHLIGHTS
• Net'assets, the amount by which total assets exceed total'liabilities, equal $70.9
million. A'total of 90.1%, or$63.9 million, of total net assets is invested in capital
assets, such as streets, land, and buildings,, and $1.3 million is restricted for
capital projects. Of the remaining'net assets, $5.7 million is available to meet the
government's ongoing activities and obligations.
• The government's net assets increased by $72.0 million in 2003. The transfer of
Spokane County fixed assets and infrastructure provided $70.6 million or 98%
with the remainder being provided by governmental activities, $586 'thousand,
and business-type activities, $794 thousand.
• Governmental fund balances at year end were $13.6 million. O f this amount, a
total of $10.7 million, or 78%, of the governmental fund is unreserved and
available to fund ongoing activities. The remaining $2.9 is earmarked for
interfund loan repayments.
• Unreserved fund balance in the general fund was a negative'$2.4 million. This
negative fund.balance'resulted from initial startup costs of incorporation and is
funded through interfund loans from_the.street fund.
• Total City debt increased to $9.4 million during the current fiscal year. The City
issued this amount of new debt to fund the construction of a recreation facility
and for street capital projects.
OVERVIEW OF THE FINANCIAL STATEMENTS
The City's basic financial statements are presented in three parts:_ 1) government-wide
financial statements, 2) fund financial statements, and 3) notes to the financial
statements. This section of the management's' discussion and analysis is intended to
introduce,and explain the basic financial statements.
Government-wide financial statements
The government-wide financial statements are designed to give the reader a picture' of
the financial condition and activities of the City as a whole. This broad overview is similar
to the financial reporting of the private-sector businesses. The government-wide financial
statements have separate, columns for governmental activities and business-type
activities. Governmental activities of-the City include general government (finance,
11
executive, human resources), public safety (police), physical environment, economic
environment, transportation, mental and physical health, and culture and recreation. The
City's business-type activities consist of the sewer and stormwater utilities.
The statement of net assets presents information on all of the City's asset and.liabilities,
with the difference reported as net assets. This statement is similar to the balance sheet
of a private sector business..Over time, increases or decreases in net assets may serve
as useful indicator of improvement or deterioration in the City's overall financial position.
The statement of activities presents information showing how the govemment's net
assets changed during the most'recent fiscal year. This statement distinguishes revenue
generated by specific functions from revenue provided by taxes and other sources not
related to.a specific function. The revenue generated by the specific functions (charges
for services, grants,.and contributions) is compared to the expenses for those.functions
to show how much each function either supports, itself or relies on taxes and other
general funding:sources for support. All'activity on the statement is reported on the
accrual basis of accounting, requiring that revenues are reported when,they are earned
and expenses are reported when they are incurred, regardless of when cash,is received
or disbursed. Items such as uncollected taxes, unpaid vendor invoices for goods or
services received'during the year, and earned but unused vacation leave are,included in.
the statement of activities as revenue and expenses even though no cash has changed
hands.
The government-wide financial statements can be found immediately following this
Management'Discussion and Analysis(MD&A).
Fund financial statements
The annual financial report includes fund financial statements in addition to the
government-wide financial statements. While the government-wide statements present
the City's finances based on the type of activity, general government versus business-
type, the fund financial statements are presented by fund type such as the general fund,
special revenue funds, and proprietary funds. A fund is a fiscal and accounting entity
with a self-balancing set of accounts Used to account for specific activities or meet
certain objectives. Funds are often set up in accordance with special regulations,
restrictions or limitations. The City of Spokane Valley, like other state and local
governments, use fund accounting to ensure and show compliance with finance-related
legal,requirements. The City's funds are divided into two categories, governmental and
proprietary.
Governmental funds are :used to 'account for essentially the same functions- as are
reported as governmental activities in the government-wide "financial statements. The
basis of ,accounting is different between the governmental fund statements and the
government-wide financial 'statements. The governmental fund- statements focus on
near term revenuestfinancial resources and` expenditures while.the government-wide
financial statements include both near term and long term revenues/financial resources
and expenses. The information in the governmental fund statements can be used to
evaluate the City's near term financing requirements and immediate fiscal health.
Comparing the governmental fund statements with the government-wide statements can
help the reader better understand the long term impact of the City's current year
financing decisions. To assist in this comparison, reconciliations between the
governmental fund statements and the government-wide financial statements are
12
included, with the governmental fund balance sheet and the governmental fund
statement of revenues, expenditures, and changes in fund balances.
The City of Spokane Valley maintains nine individual governmental funds. The City's
four major governmental funds, the general fund, street fund, Mirabeau Point project
fund and street bond capital projects fund are presented separately in the governmental
fund balance sheet and the governmental fund statement of revenues, expenditures and
changes in fund balances. The remaining governmental funds are combined into a
single column labeled other governmental funds. Individual fund data for each of the
other governmental funds can be found in the combining statements later on in this
report.
The City maintains budgetary control over its operating funds through the adoption of an
annual budget. Budgets are adopted at the fund level and according to state law: A.
budgetary comparison statement is presented for the major funds as a basic financial
statement Other budgetary comparison schedules are included following the other,
governmental funds' combining statements in this report
Proprietary funds are used by governments to account for their business-type
activities., Business-type activities provide specific goods or services to a group of
customers that are paid for by fees charged to those customers. There is a direct
relationship between the`fees paid and services received.
The City of Spokane Valley has two types of proprietary funds, enterprise funds and
internal .service. funds. Enterprise funds are used to account for goods and services
provided to citizens. Internal service funds are used to account for goods and services
provided internally to various City departments.
Enterprise funds of the City are used to report the same functions presented as
business;;type activities in the government-wide statements with the fund statements
providing, more detail -then is reported in the government-wide statements. The
enterprise fund statements provide information for the City's wastewater and stormwater
utilities.
Internal service funds are an accounting device used to..accumulate and allocate costs
• internally'among the City's various functions. The City uses internal service funds to
account for its fleet of vehicles, computer equipment, and insurance claims. Internal
service fund assets and liabilities are predominantly governmental and, have been
included in the governmental activities column of the government-wide statement of net
assets.
Notes to the financial statements
The notes to the financial statements provide additional information that is important to a
full understanding of the data in the government-wide and fund financial statements. The
notes are located immediately following the basic financial statements.
Other information
The combining statements for other governmental funds' and internal'service funds are
-presented immediately following the'required supplementary information.
13
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. net assets at December '31, 2003, total
$70,871,330. Following is a condensed version of the government-wide statement of net
assets.. Since this is the first year of incorporation no previous year comparable,data is
available. Comparable data will be provided in the 2004 annual report.
City of Spokane Valley's Net Assets
Governmental Business-Type.
Activities Activities Total.
Current and'other'assets $ 16,204,103 $1,249,91.3 $ 17,454,016
Capital assets, net of accumulated depreciation 64.239.734 - . .64.239.734
Total assets 80,443,837 1,249,913 8.1,693,7,50
Long-temp liabilities 9,554,321 - 9,554,321
Other liabilities 812.269 455:830 , 1.268:099,
Total liabilities 10,366,590 455,830 10,822,420
Net Assets:
Invested in capital assets,.net.of,related debt 63,878,148 - 63,878,148
Restricted 1,322,142 - 1,322,142
Unrestricted- - - 4.876.957 794.083 5.671.040
Total net,assets - '5`70,077,247 $ 794,083 ,$.70,871,330
The largest component of the City's net assets, 75.4% or$63.8 million, is its investment
in capital assets net of any related outstanding debt issued to acquire those assets.
These capital assets such as streets, bridges, parks, and equipment, are used to provide
services to the citizens. Consequently, these assets are not available to sell and convert
to cash for future spending. The majority of these assets were donated by Spokane
County at the time of incorporation.
Approximately 1..9% or $1.3 million of the total net assets of the City are earmarked for
construction projects such as street and infrastructure construction. These assets for
construction come frondedicated taxes.
Other functions of the City may access the remaining net assets of $4.9 million to meet
ongoing obligations to citizens and creditors. Examples of other City obligations which
these net assets may be used for are public safety,, employee salaries, park
maintenance, and ongoing street 'maintenance (street sweeping, 'lane striping,
resurfacing).
At the end of the fiscal year, the City of Spokane Valley reported-positive balances in-all
three categories of net assets, for the government as a whole, 'as well as for the
separate governmental and business-type activities.
14
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 net assets
increased approximately $72 million in 2003. Since this the first year of City
incorporation no previous year.comparable data is available. Comparable data.will be
provided in the 2004.annual financial report.
Following is a condensed version of the City's changes in net assets. The table shows
the revenues, expenses,, and related changes in net assets in tabular form for the
- governmental activities separate from the business-type'activities.
City of'Spokane Valley's Changes.in Net Assets .
Governmental Business-Type
Activities Activities To al
Revenues:
Program Revenues:
Charges for services $ 1,676,886 $559,510 $2,236,396
Operating grants&contributions 19,807 - 19,807
Capital grants&,contributions 70,687,614 - 70,687,614
General Revenues:
Property taxes .6,995,965 - 6,995,965
Sales taxes 9,981,719 - 9,981,719
Excise taxes 3,537,370 - 3,537,370
Other taxes 1,269,878 - 1,269,878
Investment interest 54.468 108 54.576
Total revenues. 94,223,707 559,618 94,783,325
Expenses:
General government 2,989,605, 2,989,605.
Public safety 7,394,944 7,394,944.
Physical.environment 821,886 - 821,886
Transportation 9;054,667 - 9,054,667
Economic environment 7.52,172 - 752,172
Mental and physical health 8,858 - 8,858
Culture and recreation .932,713 - .932,713
Interest on long-term.debt 35,923' , ' - 35;923
Sewer - 720,393 . 720,393
Stormwater management S - .4.142 4.142
Total expenses 21,990;768 724,535 22,715,303:
Increase in net assets before,transfers 72,232,939 (164,917) 72,06.8;022_
Transfers (959.000) 959.000 -
Increase in net assets 71,273,939 79.4,083 72,068,022
Net assets—beginning (1.196;692) - (1.196;6921
Net assets-ending $70,077,247 $ 794;083' $70,871,330
Governmental activities contributed $71.3 million of the total change in net,assets of
$72 million. Key elements of the increase are as follows:
• Donation of infrastructure and parks from Spokane County-accounted for $70.7
million of the increase in governmental activities net,assets. Additionally, the City
1'.5
received $19,807 in grants for developing a growth management plan. Grants
and donations are recorded as program revenues in the statement of activities.
• Sales taxes accounted for approximately $10 million in revenues in year 2003.
The City received $7 million in diverted County Road Taxes that a new city,
receives in its first year of incorporation. Other-taxes received, were real estate
excise taxes ($1:5 million), motor vehicle fuel taxes ($1A million), and hotel/motel
room taxes ($.2211 thousand).
• This being the_ firstlyear of incorporation the City aggressively monitored contract
service costs and staffing levels. The net result was a first year unrestricted
reserve.of.$4.9'million for governmental activities.
Business-type activities of the City's sewer and wastewater utilities increased the City
of Spokane Valley's net assets by$794 thousand, accounting.for 11% of the total growth
in the government's net assets. Key elements of this increase are as follows:
• The Sewer fund utility accounted for an increase of $239 thousand. The
- revenues for the fund come entirely from transfers from other funds. Expenses
are for street asphalt overlays done during new sewer construction.
• The Stormwater Management fund accounted for an increase of $555 thousand
of the increase. The primary revenue source is a stormwater management;fee
imposed upon real property. There were'no stormwater related expenses.
FINANCIAL ANALYSIS OF THE'CITY'S FUNDS
As discussed earlier, the City of Spokane Valley. uses fund accounting to ensure and
demonstrate compliance with finance-related legal requirements.
Governmental funds
The purpose of the City's governmental funds is to report on near term
revenues/financial resources and expenditures. This information helps determine the
City's financial requirements in the near future. In particular, unreserved'fund balance is
a good indicator of the City's resources available for spending at the end of the_year.
At the end of the current year the City's combined ending governmental fund balance
was $13.6 million. Of the total ending fund balance, $2.9 million is reserved for interfund
loans. Of the remaining'fund,balance, $10.5 million is earmarked for capital construction
projects, $2.6 million resides with special revenue funds, and the General fund has a
deficit fund balance of$2.4 million.
Major governmental funds
The general fund is the primary operating fund of the City through which all receipts and
payments of ordinary, City operations are processed, unless they are required to be
accounted for in another fund. Taxes are the major revenue source however-the city
does not receive property tax in its first year of incorporation. At the end of 2003 the fund
balance of the general fund was a deficit$2.4 million.
1.6
The general fund deficit balance by $1.0 million from the beginning deficit
balance of$1.4 million. Revenues were less than projected for sales taxes and fines and
forfeiture's. The beginning deficit fund balance resulted from incorporation start-up costs.
The street fund has a fund balance of $5 million, an increase of $5.1 million over the
beginning deficit balance of $87 thousand. Approximately $2.9 million of the fund
balance is reserved for an interfund loan to-the General'fund.
Diverted county road taxes accounted for the majority of revenues in the street fund. In
the first year of incorporation a new city is not required to assume responsibility for street
maintenance until 60 days from the date of incorporation.As a result, maintenance costs
were approximately$1:5 million. A transfer of$959 thousand was made to various funds
for.street construction projects. The street fund made the'general"fund an operating loan
for$2.9 million.
The Mirabeau Point capital project fund has an ending fund balance of$6.9 million. The
fund accounts for bond proceeds issued for the construction of the CenterPlace
recreation center. Construction costs were $100 thousand and bond issuance costs.of
$85 thousand: -
The street bond capital projects fund has an ending fund balance of $2.4 million: The
fund accounts for bond proceeds issued for the street construction projects.
Construction projects are budgeted for the 2004 budget year. Bond issuance costs
amounted to$24 thousand:
Proprietary funds
The ,City' of Spokane Valley's proprietary fund statements provide the same: type of
information found, in the government-wide financial statements; but in more detail.
Factors concerning'the finances of the City's proprietary funds have been already been
addressed in the discussion of the City's business-type activities.
GENERAL FUND BUDGETARY HIGHLIGHTS
Being the first year of incorporation the General'Fund budget was based upon estimates
from the various sources including the Washington State Boundary' Review Board for
Spokane County and Spokane County. In 'total, actual revenues were $1.6 million less
than budget or about an 11% difference. The total actual expenditures were
approximately$1.4 million less than budgeted or9% below budget.
The City Council amended the expenditure budget during 2003. The amendments
resulted in an increase of $612 thousand, less than a 4% change between the original
and final budgets. The primary change in the expenditure budget'was due to increased.
expenditures for start-up costs related,to incorporation.
On the revenue side of the budget, the primary difference"between the final budget and
the actual amounts relates,to tax revenues and fines and forfeits. Sales tax revenues
were $1.2 million or 13% less than budget. Original' estimates for sales'tax revenues
were done in 2001. Projections- for succeeding years were based upon a projected -
growth rate of 2% peryear. Actual sales tax growth rates for the last 3'years have been
flat.
17
Fines and forfeits were $566 thousand less than budget or 51% less than budget. The
primary difference relates to traffic infractions. Citations issued after the date. of
incorporation take from 8 to 10 weeks to work their way through the court system. As a
result the projected amount of fines & forfeits was not realized, until five months. after.
incorporation.
On the expenditure side of the budget, the largest variations between the final budget.
and the actual amounts were the under expenditure of the public safety function by
approximately $717 thousand and capital expenditures. by $220 thousand. Generally,
city staff reduced spending by 10 to 15 percent in all areas in anticipation of lower
budgeted revenues.
CAPITAL ASSETS AND.DEBT ADMINISTRATION
Capital Assets
As seen earlier, in'the summarized table of the Government-Wide Statement of Net
Assets, the City's investment in capital assets for the fiscal year ended December 31,
2003. was $64.2 million, net of accumulated depreciation.. This 'investment in capital
assets includes land, buildings, ,improvements, machinery and equipment, construction
in progress, and infrastructure. Additional information can be found in Note 5 of this
report.
Major additions to capital assets'during the fiscal year'included the following:
• Spokane County donated $70.7 million dollars in capital assets upon
incorporation of the City. Of this amount, $67.8 million was infrastructure assets
such as roadways, signals,,and bridges. The balance of$2.9 million was various
park properties.
• Equipment purchases related to the start-up of'new city totaled $735 thousand.
The equipment included vehicles, computers, telephone system and leasehold
improvements for city hall.
• Construction in progress on for the CenterPlace Recreation Center totaled $399
thousand dollars.
The following table provides a listing of the capital assets .(net of accumulated
depreciation) at December 31, 2003. •
Governmental
Activities
Land $ 1,548,655
Buildings' 315,827
Other improvements 1,021,099 -
Infrastructure 60,271,997
Machinery'and equipment 683,330 •
Construction in progress 398.826
Total $64,239,734.
18'
Long-Term Debt
At the end of the current.fiscal year, the City of.Spokane Valley has total 'bonded debt
outstanding of'$9,430,000. This. amount is back by the full faith and credit of the City
(general obligation bonds) with debt service fully funded by general government
revenues.
Under State of Washington statutes general obligation 'indebtedness for general
purposes pursuant to a vote of the,electorate:.is limited to 2'/2% of actual value of taxable
property located within the City. 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.
The assessed valuation of the City for the year 2004 for purposes of determining the
legal debt margin is $4,409,259,851."Remaining debt capacities.for the City for general
voted and non-voted purposes(2 '/z%) is limited to$100,745,098. •
The.City of Spokane Valley maintains a A3 ratingfrom Moody's for its non voted general
obligation debt.- Additional information regarding.the debt limitations and capacities can
be found in Note 11 and in the Statistical Section of this report.
ECONOMIC FACTORS AND NEXT YEARS' BUDGETS AND RATES
Several factors that affect the economic climate in the City of Spokane-Valley were
considered when preparing the City's 2004 budget. 'The outlook for, the regional
economy was weighed in relation to its expected impact on the.City'of Spokane Valley.
The character of the City, including its current and future business activity and its
attraction, as a place to live, was evaluated. Based on the budget analysis, the City's
future is promising amid some short-term challenges.
As the nation emerges from a moderate recession with a weak labor market job growth
in Spokane County is expected to increase by just 1 percent, which amounts to about
2,000 jobs. That is roughly the same amount of growth as in 2003. At the end of 2003
the unemployment rate in Spokane County was 6.8 percent.
Coming off a'.record:sales year for residential real estate, 2004 is expected to be another
strong year for sales. Mortgage rates are slowly rising which will effect residential sales
somewhat.but some regional advantages may offset any effect from the rise in interest
rates.
As the national economy rebounded in 2003, the region 'experienced a resurgence in
taxable retail sales. For the first three quarters of 2003, Spokane County's total taxable
retail sales grew by 3.4 percent, compared with the same period in 2002. Many experts
believe retail spending_in.2004 will,depend in.large degree on wage and job growth.
One area of concern is the Sprague Avenue retail corridor. Loss of retail'businesses on
Sprague has resulted'in 400,000 and 450,000 square feet of vacant office. The City
remains committed on encouraging economic development with family wage paying
jobs,.
19
•
The City contracts with Spokane County for a majority of,city service delivery including
public safety, park maintenance, and street maintenance. These contracts were
expected to increase moderately in 2004.
These factors were considered when adopting the City's budget for 2004. The City
adopted the maximum property tax levy as allowed by law, $2.10 per thousand dollars of
assessed valuation for its own purposes. Budgetarily, no general fund tax increases
were. made in the 2004. Expenditures were budgeted at levels to maintain service
delivery at 2003 levels.
REQUESTS FOR FINANCIAL"INFORMATION
This financial report is designed to provide a'general overview of the City of Spokane
Valley's finances and to demonstrate the City's accountability. If you have questions
about this report or need would like to request additional information, contact the'City's
Finance Department, 11707 E Sprague Ave, Suite 106, S pokane Valley, Washington
99206.
•
20
Government-Wide
Financial Statements
Statement of Net Assets
December 31, 2003
Primary Government
Governmental Business Type
Activities Activities Total
Assets:
Current:assets:-
Cash, cash equivalents and
pooled investments $ 13,174,350 $ • 535,6.85 $ 13,710,035
Receivables (net):.
Taxes _ 3,567,290; 55,228 3,622,518
Accounts 121,463 121,463
Internal balances (659,000) 659,000 -
Total current assets 16,204,103 1,249,913 17,454,016
Capital assets(net of accumulated
depreciation):
Land. 1,548,655 - 1,548,655
Building and system 315,827 - 315,827
Improvements other than buildings' 1,021,099 - 1,021,099
Machinery&equipment 683,330 - 683,330
Infrastructure 60,271,997 - 60,271,997
Construction in progress 398,826 - 398,826
Total capital assets, , 64,239,734 - 64,239,734
Total assets 80,443,837 1,249,913 , 81,693,750
Liabilities:
Current liabilities:
Accounts payable 557,725 423,730 981,455
Taxes payable 388 - .388
Accrued liabilities 161,940 - 161,940
Bonds&deposits payable 86,700 32,100 118,800
Other current liabilities • 5,516 - 5,516
Total current liabilities 812,269 455,830 1,268,099
Noncurrent.liabilities:,
Due within one year 149,845 ' - 149,845
Due in more than one year 9,404,476 - 9,404,476
Total noncurrent liabilities 9,554,321 - 9,554,321
Total liabilities 10;366,590 455,830 10,822,420
Net assets:
Invested in capital assets net.of related debt 63,878,148 - 63,878,148
Restricted for:
Capital Projects 1,322,142 - 1,322,142
Unrestricted 4,876,957 794,083 5,671,040
Total net assets $ 70,077,247 $ 794,083 $ 70,871,330
The notes to the financial statements are an integral part of this statement.
22 '
•
Statement.of Activities
For the Year Ended December 31,2003
Progrem'Revenues Net(Expenses)Revenue.and Changes In'Net Assets
Operating Capital Primary Govemement
Charges for Grants and Grants and Governmental Business-type
Functions/Proarams Expenses Services Contributions Contributions .Activities, Activities Total
Primary Government:
Government activities:
General government, $ 2,989,605 207 - - (2,989,398) - (2,989,398)
Public safety 7,394,944 617,859 - = (6,777,085) - (6,777,085)
Physical environment. 821,886 28,498 - - (793;388) - (793;388)
Transportation - 9,054,667 '20,284 - 67,785,447 58,751,064 ,- 58,751,064
Economic environment 752,172 887,886 19,807 - 155;521 - 155,521'
Mental and physical health 8,858 - - . - (8;858) - (8,858)
Culture and recreation 932,713 122,152 - "2,902,167 2,091,606 - 2,091,606
Interest on long-term debt 35,923 - _ - - (35,923) - -(35,923)
Total governmental activities 21,990,768 1,676,886 19,807 70,687,614 50,393,539. 50,393,539
Business-type activities:
Sewer 720,393 - - - - (720,393) (720,393)
w .Stormwater Management 4,142 559,510 - - - 555,368 555,368
Total business-type activities 7.24,535 559,510 - _ _ - (165,025) (165,025)
Total'primary govemment .$ 22,71,5,303 2;236,396 , 19,807 70,687,614 , 50,393,539 (165,025) 50,228,514
General Revenues:
Taxes
Property taxes 6,995,965 - 6,995,965
Sales'and use tax 9,981,719 . - 9,981,719
Excise taxes 3,537,370 ` - 3;537,370
Other-taxes 1,269,878 - 1,269,878
Investment earnings - 54;468 108 54,576
Transfers _ (959,000)' 959,000 -
Total general revenues and transfers 20,880,400 . 959,108 21;839,509
Change in net assets 71,273,939 794,083 72,068,022
Net assets at beginning of year (1,196,692) - (1,196,692)
Net assets at end of year $ '70,077,247 $__ 794,083 - $ 70;871,330.
The notes to the financial statements are an integral part of this statement.
This Page Intentionally Left Blank
; • 't.7 `).
1) ) •
Li
=
A ,
•
2'4.
Fund
Financial Statements
25
•
Balance Sheet
Governmental Funds '
'December31,2003
'Other Total
General Street Mirabeau Street Bond Governmental Governmental
Fund Fund Point Project. Capital Prole is Funds Funds
Assets: _
Cash,cash equivalents and
pooled investments $ 15,482 .`$ 2,130,419 $ 6,882;317 $ 2,445,058. $ 1,632;685" ,$ 13,105,961
Receivables,(net)
Taxes 1,511,956 458,216 - - 179,447' 2,149;619
Accounts 121,463 - - - - 121,,463"
Due from„other funds 729 828,216 - - 79;000 907,945
Interfund loan'receivable - 2;890,000 - - - 2,890,000
Totalrassets -I 1,649;630 $ '6,306,851, $ 6,88Z317, $ 2,445,058, $ 1,891,132, ;$° 19,174;988,
Liabilities and fund balances:
Liabilities:
Accounts.payable 21.1,835 226,052 5,492 - 112,090 555,469
Taxes payable 388 - - - 388.
Due:to other funds 830,961 659,022 - - 79,000 1,568;983
Interfund loan payable 2,890,000 - - - - 2,890,000
Bonds&deposits payable 86,700 - . - - '86,700
Other accrued liabilities 64,975 4,644 r. - - 69,619
Other current liabilities 2,167 3,349 - - - 5,516”
Deferred revenues - . "362,799 - - 362,799
Total Liabilities 4,087,026 1;255,866 5;492 , - 191,090 5;539;474
Fund Balances:
Reserved`for."
Noncurrent.receivables - 2,890,000 - - 2,890,000
Unreserved,reported in:
General Fund (2,437,396) - - - - (2,437;396)
Special Revenue - 2,160;985 - •- - 508;365 2,669;350
Capital Projects - - 6876,825 2,445,058 1,191,677 '10,513,560
Total fund balances (2,437,396) 5,050,985 6,876,825 2,445,058 1,700,042 13,635,514
Total liabilities&fund.balances. $ 1,649,630 $ .6,306,851, ,$ 6,882,317, $ 2;445,058 $ 1,891,132, $ 19,174,988
•
The notes to the financial statements are an integral part`of this statement:
26
Reconciliation of Total Governmental Fund Balances to
Net Assets of Governmental Activities
For the Year Ended December 31,2003
Total government fund balances .$ 13,635;514
- Amounts reported for governmental activities in the statement of net assets
are different because:
Capital assets used in governmental activities are not financial resources and
therefore are not reportedin the funds.. 63,626,756 .
These assets consist of:
Land' 1,548;655
Construction in progress 398;826
• Buildings 898,729
Improvements other than buildings 2,161,262
Machinery and equipment-General Government 85,228
Infrastructure 202,552,594
Less: Accumulated Depreciation (144;01.8';538)
Revenues are recorded when earned and expenses,-are recorded when a liability is
incurred,'regardless of timing of related cash flows. Property taxes are recognized
as revenues in the year for which they are levied. 'Grants and similar items are
recognized as revenue as soon as all the eligibility requirements imposed,by the
provider have been.met. These revenues are therefore not reported in the funds: 1,417,671
These revenues consist of.
Sales and use,tax 1,252,303
Excise tax 138,800
Other taxes 16,994
Investment earnings 9,574
Long-term liabilities, including bonds payable are not due and payable in the
current period and therefore are not reported in the'funds. (9,283,843)
These long-term liabilities,consist of:
Bonds payable (9,554,321)
Accrued interest (35,923)
Compensated absences (56,398)
Deferred'revenue 362,799
Internal service funds are used by management to charge the costs of certain
activities, such as equipment rental, self-insurance, information technology
and facility services to individual funds. The assets and-liabilities of the internal
service funds are included in governmental activities in the statement of net'assets.. .681,149
'Net assets of governmental activities $ 70,077,247,
The notes to the financial statements are an integral part of this statement
27
Statement:of Revenues,Expenditures,and Changes in Fund Balances .
Governmental Funds
• For the Year Ended December 31,2003
Other Total.
General Street Mirabeau Street,Bond Governmental Governmental
Fund _ Fund _ Point Project Capital Projects Funds . - Funds
Revenues:
Taxes $ 9,258,661 $ :6,633,165 $ - $ . - $1,594,933' .$ 17,486,759
Licenses and permits 1,088,165 - - -- - 1,088,165
Intergovernmental,revenires 706,443 966,581 - - 451;941 2,124,965
Charges for services' 477,342 - -- - - 477,342
Fines and forfeitures 533,496 - - - 533,496
Miscellaneous 23,079 31,222 14,140 4,003 666 73,110
Total revenues 12,087,186 7,630,968 • 14,140 4,003' 2,047;540 21,783;837
Expenditures:
Current;
General government 2,836;998' - 31,180 6,519 - 2,874,697
Public safety 7,394,857 - - - - 7,394,857
Physical environment 817,532 - - - - 817,532
Transportation - 1,484;775 - - 17;109 1,501,884
Economic environment 722,116' - - 35,425 757;541
Mental;and physical health 8,858 - - - - 8,858
Culture and recreation 879,047 - -- - - 879,047
Debt Service:
Principal - .- - - - -
Interest 34;891 - - - - 34,891
Bond issuance costs - - '84,528 24,491 - 109,019
Capital'Outlay 475,225 49,610 . 103,863 - 294,964 923,662
Total expenditures . 13;169,524 1',534;385 219,571 :31,010 347;498' 15;301,988
Excess(deficiency)of revenue ,
over(under)expenditures (1,082,338) 6,096;583 (205,431) (27,007) 1,700,042 6,481,849
•
Other financing sources(uses):
Transfers in - - - - 312,103 312,103.
Transfers out '(959;000) -- - (312,103) (1,271,103)
Long-term debt issued - - 7,000,000 2,430,000 , - 9,430,000
Premium on long-term debt - - 131;847 59,638 - 191,485'
Discount on long-term debt _ - - (49,591) (17,573) - (67,164)
Total other financing sources(uses - ,(959,000) 7,082,256 2,472,065, - 8;595,321
Net change in fund,balance (1,082,338) 5,137,583 6,876,825 .2,445,058- '1,700;042 1'5,077,170
Fund balance-beginning (1,355,058) (86,598) - - - (1,441,656)
Fund balance-ending, $ (2,437,396) $ 5,050,985 $, 6,876;825 $ 2,445,058 $ 1,700,042 $ 13,635,514
The notes to the financial statements are an integral:part of this statement.
28 •
Reconciliation of'the Statement of Revenues,Expenditures,and Changes in Fund Balances
Governmental Funds to the Statement'of Activities-
For the Year Ended December31,2003
Net change.in,fund blances-total governmental funds $. 15,077,170
Amounts reported.for governmental activities in the statement of activates
are different because:
Governmental.funds'report capital outlays as'expenditures. However,
in'the°statement.of activities the cost.of these,assets is allocated,over their
useful lives and reported as depreciation expense, This is the amount by
which capital outlays exceeded depreciation in the current period. (6;655,604)
This is comprised of.
Capital outlays 923,662
Current year depreciation (7,579,266)
Revenues in.the°statement of activitiestthat do not provide current financial,
resources,are not reported as revenues in the funds. 72,468;084
. This is°comprised of:
Donated assets 70;687,614
Deferred taxes .362,799
Sales and use tax, 1,252,303
Excise tax 138,800
Other taxes. 16;994
Investment earnings 9;574
Bond proceeds provide current,financial resources to goverimmental funds,,but
issuing,debt increases long-term'liabilities.in the'statement of net assets.
Repayment of long-term debt is an expenditure in the governmental funds,yet,
the repayment reduces long-term liabilities in the statement of net assets.
This IS the amount by which repayments exceeded proceeds. (9,554,321)
This is comprised of
Proceeds from issuance of'limited obligation bonds (9;554;321)
'Some expenses reported in the statement of activities do not require the use
of current financial resources,and•.therefore:are not reported'as.exp'enditures in
the governmental funds. (92;321)
This is comprised of
Accrued interest expense (35,923)
Accrued compensating absence expense. (56,398)
Internal servicefunds are used by management to,charge the cost-of certain
activities;such as equipment rental,self-insurance,.information technology and
facility services to theindividual funds. The net revenue(expense)of these
internal service funds is reported with govemmentalcactivities. 30.931
Change in net assets of governmental activities • 71,273,939.
The notes to the financial statements arean integral,part'of this,statenient.
29'
General Fund ,•
Statement of Revenues, Expenditures,and Changes In Fund Balances
Budget and Actual
For the Year Ended December 31, 2003
Variance with
' Final Budget
Budgeted Amounts Actual Amounts Positive
• Original Final Budgetary Basis (Negative)
Revenues:
Taxes $ 10,472,500 ,$, 10,472;500 $, '9,258,661, '$ (1,213,839)
Licenses and permits 1,102,000 1,102,000 1,088,165 • (13,835)
Intergovernmental'revenues 528,000 528,000 706,443 178,443
Charges for services 419,000 419;000 477,342 58;342
Fines`•and forfeitures 1,099,000 1,099,000 533,496 (565;504)
Miscellaneous 21,000 21,000 23;079 2;079
Total revenues 13,641,500' 13,641,500 12,087,186 (1,554,314)
Expenditures: •
Current:.
General government 2,674,204 2,980,704 2,836,998 1,43,706
Public,safety 8,075,894 8,111,894 7,394,857 717,037
Physical environment. 845,233 872,795 817,532 ,55,263
Economic environment 757,702 802,640 722,116 80;524
Mental and physical health 10,400, 10,400 8,858 '1,542
Culture and recreation 933,172; 951,672 879,047 72,625
Debt Service:
Principal 50,000. '50,000 , , 50,000
Interest 23,000 23,000 34,891 (11,891)
Capital.Outlay 523,295' 701,295, 475,225. 226,070.
Total'expenditures 13,892;900 14,504,400 13,169,524 1;334876
Excess(defcency)of revenue
over(under)expenditures (251,400) (862,900) (1,082,338) (219,438)
Net,change in fund balance (251,400) (862,900) (1.,082,338) (219,438)
Fund:balance-beginning (1,355,058) (1,355,058) (1,355;058)
Fund balance-ending •$ (1,606,458) $ (2,217,958), $ (2,437,396) $ (219,438)
•
The notes to the financial statements are an integral part of this statement.
30
•
,Street Fund
Statement of Revenues, Expenditures, and Changes'in Fund'Balances
Budget and Actual
For the Year Ended December 31, 2003
Variance with
Final Budget
Budgeted Amounts Actual Amounts Positive
Original Final Budgetary Basis (Negative)
Revenues:
Taxes $ 6;757,063 $ 6,757,063 .$ 6,633,165 $ (123,898).
• Intergovernmental revenues • 883,900 883,900 966,581 - 82,681
Miscellaneous. - - 31,222 31,222
Total revenues 7,640;963 7,640,963 7,630;968 (9,995)
Expenditures:
•
Current: -
Transportation 2,790,075 2,698;200 1,484,775 1;213;425
Capital outlay 54,000 54,000 49,610 4,390
Total expenditures 2,844,075 2,752,200 1,534,385 1,217,81.5
Excess(deficiency)of'revenue
over(under)expenditures 4,796,888 4,888,763 6,096,583 1,207,820
•
Other financing sources(uses):
*Transfers in 400,000 - - (400,000)
'Transfers out (1,000,000) (1,000,000) (959,000) 41,000
Total other financing sources(uses) (600,000) (1,000,000) (959,000) (359,000)
Net change in•fund.balance 4,196,888 3,888,763 5,137,583 848,820
Fund balance-beginning _(86,598) , , (86,598) (86,598) -
Fund balance-ending $ 4,1-10;290 $ 3,802,165 $ 5,050,985. $ 848,820•
•
The notes to the financial statements are an integral part of this statement.
31
Mirabeau Point Project
Statement of Revenues, Expenditures, and Changes in Fund Balances
Budget and Actual
For the Year Ended December 31, 2003
Variance with
Final Budget
Budgeted.Amounts Actual Amounts Positive
Original Final Bud getary Basis (Negative)
Revenues:
Miscellaneous '$_ - $ - '$ 14,140 -$ 14,140
Total revenues - - - 14,140 14,140
Expenditures: .,
Current:
General.-government - - 31.,180 (31,180)
Debt Service:
Bond issuance:costs - '200,000. 84,528 115,472
Capital outlay- - 300,000 103,863: 196,137
Total expenditures - 500,000 219,571 280,429
Excess(deficiency)of revenue
over(under)expenditures - (500,000) (205;431). 294,569
Other financing sources (uses):
Long-terns debt:issued 500,000 ,7,000;000 6,500,000
Premium on long-term debt - - 131,847 131,847
Discount on'long-term debt - - (49,591). (49,591)
Total'other financing sources(uses) - 500,000 7,082,256 6,582,256
Net change in.fund balance - - 6,876,825 6,876,825
Fund,balance-beginning - _ - - -
• Fund balance-ending $ - $ - . $ 6,876,825, $ 6,876,825,
The notes to the financial Statementsare an integral part of this statement.
32
Street Bond Capital,,Projects
Statement,of Revenues, Expenditures, and Changes in Fund Balances-
Budget and Actual
For the Year Ended December 31, 2003
Variance with
Final Budget
Budgeted Amounts Actual Amounts Positive
Original Final Budgetary Basis (Negative)
Revenues:
Miscellaneous, $ - . $ - $ 4,003 $ 4,003
Total revenues - - 4,003 4,003
Expenditures:
Current:
General govemment - - 6,519 (6,519)
•
Debt Service:
Bond issuance costs - 24,491 (24,491)
Capital outlay - 2,430,000 - , 2,430,000
Total expenditures - . 2,430,000 31,010, 2,398,990
Excess(deficiency)of revenue
over(under)expenditures - , (2,430,000) (27,007) 2,402,993'
Other financing sources(uses):
Longterm debt issued - 2,430;000 2;430,000 -
Premium on long-term debt - - 59,638 59,638
Discount on long-term debt - . , _ (17,573) (17,573)
Total other financing sources(uses) - .2,430,000 2,472,065 ' 42,065
Net change in fund balance - - 2,445,058 2,445,058.
Fund balance-beginning - - - -
Fund,balance-ending $ - $ - $ 2,445,058 $ 2,445,058
The notes to the financial statements are an integral part of this statement.
33
•
Statement of Net Assets
Proprietary Funds
December-31, 2003
Business-type Activities -Enterprise Funds Governmental
Activities
Stormwater Internal Service
Sewer Management Total: _ Funds.
•
Assets:
Current assets
Cash;,cash,equivalents and
pooled investments $ 3,337 $ 532,348 .$ 535,685 $ 68,389
Assessments receivables.(net) - 55,228 55,228 -
Due from other funds 659,000 - 659,000, 2,767
Total current assets 662,337 587,576: 1,249,913 71,156
Capital assets:
Machinery& Equipment -, - - 650,218
Less accumulated depreciation - - - (37,240)
Total capital assets(net..^of
accumulated depreciation) - - - 612,978,
Total assets 662,337 587,576 "1,249,913- 684,134
Liabilities:
Current Liabilities:
Accounts payable 423,730 - 423,730 .2,256
Due to.other funds - - - "729
Deposits and other payabtes - 32,100 32,100 -
Total liabilities 423,730 32,100 455,830 Z985
Net Assets:
Invested in capital assets. - - - 612,978
Unrestricted 238,607 555,476 794,083 68,171
Total net assets $ 238,607 $ 555,476, $ 794,083 $ 681,149
The notes to the financial statements are an integral part of this statement.
34
•
Statement of Revenues, Expenses, and Changes in'Fund Net Assets
Proprietary,Funds
For the Year Ended.December 31, 2003
Business-type:'Activities"-Enterprise Funds Governmental
Activities-
Storrnwater - Internal Service
Sewer Management Total Funds
Operating Revenues:
Charges for services- $ - $ 559,510, $ 559,510 $ 97,001
Total"operating revenues _ - 559,510 559,510 97,001
Operating Expenses:
Administration - 3,604 3;604 -
Operations 720,393 538 720,931 28,833
Depreciation' - - - 37,240
Total Operating expenses 720,393 ,4;142 724,535 66,073
Operating"income • (720;393) 555,368 (165,025) 30;928
Nonoperating revenues(expenses):
Interest income - -108 108 3
Total nonoperating revenues(expenses) - 108 108 3
' Income before;contributions and transfers (720;393) 555;476 (164,917), 30;931.
Contributions and transfers:
Transfers in 959,000 - 959,000 -
Capital'Contributions - - - 650,218
Change in-net assets 238,607 555;476 794,083 681,149'
Net assets beginning of the year - - - -
Net assets end of;year .$ 238,607 $ 555,476 $ 794,083 $ 681,149
•
•
The notes to the financial statements are an integral part of this statement.
35
Statement of Cash.Flows
Proprietary Funds
December 31, 2003
Business-type Activities-Enterprise Funds Governmental
Activities-
Stormwater Internal Service
Sewer Management Total Funds
Cash flows from operating activities:
Cash receivedfrom customers and users $ - $ 536,382 $ 536,382 $ -
Receipts'from interfund services provided - - 94,234
Payments-to suppliers and for services (296;663) (4;142) (300,805) (25,848)
Net cash provided(used)by operating activities (296,663) 532,240 235,577 68;386
Cash flows from noncapital financing activities:
Transfers in(out) 300,000 300,000
Net cash provided(used)by noncapital
and,related financing activities 300,000 - 300,000 -
Cash flows from investing activities:.
Interest received, - 108 108 .3
Net cash provided(used)by investing activities - 108 108 ,3
Net increase in cash&cash equivalents 3,337 532,348 535,685 68,389
Cash&cash equivalents, March 31,.2003 - - -
Cash&cash•equivalents, December 31,,2003 $ 3,337 $ 532,348, $ 535,685, $ 68,389
Reconciliation of operating income to net cash provided
(used)by-operating activities:
Operating income(loss) $ (720,393) $ 555,368. $ (165,025) $ 30,928
Adjustments to.reconcile operating.income to net
cash provided(used)by operating'activities:
Depreciation - - - 37;240
Changes.in.assets and liabilities:
(Increase)decrease'in accounts receivable - (55,228) (55,228) =
(increase)decreasein due from other funds - - - (2,767)
(Increase)decrease in accounts payable 423;730 - 423,730 2,256
(Increase)decrease in due to other funds - - 729
(Increase)decrease in customer deposits _ 32 100 32,100 -
.Total adjustinents . 423;730 (23,•128) 400,602 37,458
Net cash provided(used)by operating activities $ (296;663) $ 532,240 $ 235,577 $ 68,386,
Noncash investing,capital;and financing activities:
• Contributions of capital assets from other funds - - - 650,218
The notes'to the financial statements are an integral part.of this statement.
• 36
CITY OF SPOKANE VALLEY
NOTES TO THE FINANCIAL STATEMENTS
For the year ended December 31, 2003
Note Page
1 SUMMARY OF ACCOUNTING POLICIES 38
2 STEWDARDSHIP, COMPLIANCE AND ACCOUNTABLILTY 42
3 DEPOSITS AND INVESTMENTS 44
4 PROPERTY TAXES 45
5 CAPITAL ASSETS AND DEPRECIATION 45
6 PENSION PLANS 47
7 RISK MANAGEMENT 49
8 INTERFUND BALANCES AND TRANSFERS 50
9 SHORT-TERM DEBT 50
10 LONG-TERM DEBT 51
11 CONTINGENCIES AND LITIGATION. 52
37
NOTES TO THE FINANCIAL STATEMENTS
December 31,, 2003
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES
The City of Spokane Valley 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 code city, include planning &zoning, public
safety, public works, and recreation &culture.
The accounting and reporting policies of the City relate to the funds included in the accompanying
financial statements conform to generally accepted accounting principles(GAAP) applicable to state
and local governments. GAAP for local governments include those principles prescribed by the
Governmental Accounting Standards Board (GASB), 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 Interpretation.
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). Both the government-wide and
fund financial 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
changes. in net assets) report information on all of the nonfiduciary 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 segment 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.
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
38
in the year for which they are levied. Giants and similar items are recognized as revenue 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 enough 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 and claims and judgments are recorded only
when the payment is due.
Property taxes, franchise,taxes, 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 general government, except those required to be accounted for in another fund.
The Street Fund is responsible for the maintenance of all city streets and bridges. Also,
construction activities for city streets are coordinated through this fund.
The Mirabeau Point Project Fund accounts for monies received from bond'proceeds to be used
for the construction of a.multi-use'community center and acquisition of furnishings.
The Street Bond Capital Projects Fund accounts for monies received from bond proceeds to be.
used for various capital street projects.
The city reports the following major proprietary funds:
The Sewer Fund is responsible for paying for the reconstruction of the streets after completion
of the sewering project
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.
Additional, the government reports the following fund types:
Special revenue funds account for arterial street construction and maintenance, hotel/motel tax
revenues and expenditures, and revenues&expenditures for paths and trails maintenance.
Debt service funds account 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 account 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 account for data 'processing and risk management services provided to
other departments on a cost reimbursement basis.
39
Private-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 Governmental Accounting
Standards Board. 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 wastewater or 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 nonoperating items. Operating,
revenues and expense 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 nonoperating 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.
D. Assets, Liabilities,&Fund Equity
1. Cash and Cash Equivalents
The City considers all highly liquid assets including demand deposits, money market accounts,
CD's, investment in the State Treasurer's Investment Pool, 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.
2. Investments—(Refer to Note 3).
3. 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
40
•
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 financial 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 a_ re not available for
appropriation and are not expendable available financial resources.
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.
4. Inventories:and prepaid items
Reported inventories in governmental funds consist of expendable supplies'held for consumption.
The cost thereof has been recorded as an 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 govemment wide and fund statements.
5. Capital Assets and Deprecation(Refer to Note 5).
6. Long-term Debt •
Liabilities for long-term'debt are recorded in the government-wide statement of net assets and in the
proprietary 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 de ferred charges.
Long-term debt outstanding at,year end is outlined in Note 11.
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 an other financing source 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.
7. 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 and uncollected road
taxes levied.
8. 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 fiduciary fund financial statements. An additional amount has been accrued for the city's share
of deferred compensation and Medicare taxes related to the vacation accrual.A liability for these
41
amounts is-reported in the government fund statements only if they have matured, for example, as a
result of employee resignations and retirements.
9. Fund Balance Designations.and Reservations
In 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. The City has reserved$2,890,000 in the Street Fund for advances to other funds.
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 nonoperating 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 & interest, and
interest & investment earnings are classified 'as general revenues within the Government-wide
Statement of Activities.
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 & property, physical environment,
transportation, economic environment, culture & 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 Nonoperating 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 nonoperating 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.
42
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 2005 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 reaffirm
overall City priorities,vision, and mission at a mid-year retreat. Additional'policy guidance is
provided throughout the year.
• In'July the Finance department submits the preliminary budget to the City Manager.
• In August the City Manager submits estimates on 2004 revenues and preliminary 2005
revenues'and expenditures to Council.
• During September, 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 set the dates of the preliminary and final budget hearings.
• Before December 318t 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:
• Quarterly budget monitoring reports are published 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 three times during the fiscal year. 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 reappropriated in the subsequent period.
D.Compliance
There have been no material violations of finance-related legal or contractual provisions, and there
have been no'expenditures exceeding legal appropriations in any of the funds of the City.
43
E. Deficit Fund Balances
As of December 31, 2003 a deficit fund balance of$2,437,396 exists in the General Fund resulting
from initial'start:up'costs of incorporation. It is expected this fund balance will be eliminated through
a reduction of expenditures through the year 2005 in order to increase fund balance.
NOTE 3-DEPOSITS AND INVESTMENTS
A. Deposits
The City's deposits and certificates of deposit are entirely covered, by the federal depository
insurance(FDIC)or by 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.
B. Investments
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), or certificate of
deposit with Washington State banks and savings and loan institutions.
The Washington Local Government Investment Pool operates, in a manner consistent with the
SEC's Rule 2a-7 of the Investment Company Act of 1940. The fair value of the portfolio is
calculated by the master custodian or by an independent pricing service under contract with the
State Treasurer's Office. The fair value of the 'City's position in the State of Washington Local
Government Investment Pool is the.same as the value of the pool shares
Investments are shown on entity-wide.Statement of Net Assets at fair market'value or 2a7-like-pools
at amortized cost. Investments are reported within Cash & Investments of Governmental Activities
and within Cash&Cash Equivalents of Business-type Activities,
The City's investments are categorized to give an indication of risk assumed at year-end. The
following summary shows the City's investments at.year-end categorized by risk._
• 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
31,2003.
C. Deposit and Investment Reconciliation
Amounts reported in the fund statements are as follows:
Fair Value
Carrying Cash
Amount ,Investments Equivalents
Investments Not Subject to Credit Risk
State Investment'Pool $ 9,832,294 - $ 9,832,294
Money Market Account 3.570.392 - 3.570.392
Total Investments Not Subject to Credit Risk $ 13,402,686 - $ 13,402.686
44
NOTE 4-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 1 on property values listed as of the prior May 31. Assessed
values are established by the County Assessor at 100 percent of fair market value. A revaluation of
all property is required every four years. Taxes are due in two equal installments on April 30 and
October 31. 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
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, #8, and #9, which leaves the City with the authority to levy $2.10 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
(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.
For 2004, the City levied$9,265,808 on an.assessed valuation of$4,409,259,851..
NOTE 5-CAPITAL ASSETS AND DEPRECIATION
Capital assets, which include property, plant, equipment, and infrastructure assets (e.g. roads,
bridges, sidewalks,; an similar items), are reported in the applicable governmental or business-like
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 costif 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.
A summary of changes in t governmental capital assets follows:
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 the assets transferred.
45
Capital Assets Donated From Spokane County
Historical Accumulated Depreciated
Cost Depredation 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 x5.633.979 2.808.1'12 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'assets 4.574:292 1.672:125 2.902.167 ,
Total,County assets donated, $207, 26,886 $136;439,272 $70,687;6t4-
A summary-of changes in governmental capital assets follows:
Beginning Ending
Balance Balance
Governmental activities: 03/31/03 Increases Decreases 12/31/03
Capital assets,not being depreciated:
Land, $ - $1,548,655 $ - ,$1,548,655
Construction'in progress - _ -398.826 - 398.826
Total capital assets,not being depreciated - 1,947;481 - 1,947,481
Capital assets,being depreciated:
Buildings - 936,420 - 936,420
Improvements other buildings - 2,123,571 2,123,571
Infrastructure - 202,552,594 - 202,552,594
Machinery and equipment 244.965 490.481 - 735.446,,
Total capital assets,being depreciated 244,965 206,103,066 - 206,348,031
Less accumulated depredation for:
Buildings - 620,593 - 620,593
Improvements other,buildings - 1,102,472 - 1,102,472
Infrastructure - 142,280,597' - 142,280,597
Machinery and equipment - 52.116 - - 52.116
Total accumulated depreciation"- - 144,055,778 - 144,055;778
Total assets being depreciated;net 244.965 62.047.288 . - 62.292.253
Governmental activities capital assets,net $ 244,965 1-63.994.769 $ - $64;239;734
Business-type activities:
The city, has no business-type capital assets.
Depreciation
Property, plant, and equipment of'the, primary government is depreciated using the straight line
method over the estimated service live as follows::
Buildings and improvements 10-60 years
Infrastructure 40 years
Light/Heavy Transportation Equipment 5-10 years
Other-Equipment 2-20 years
Office Equipment 3-5 years
Computer Equipment' 3-5 years
46
Depreciation expense was charged to functions/programs of the.primary government as.follows:
Governmental Activities
General Government Services $ 27,269
Public Safety 2,509
Physical environment 9,477
Transportation 7,517,732
Economic environment 4,325
Culture and recreation 5.1,19A
Total.depreciation—governmental activities $7,616,506
NOTE 6-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 Retiremeht 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 Employers.
Public Employees' Retirement System(PERS)Plans 1,2,and 3
Plan Descriptio
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 combination defined
benefit/defined contribution 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.
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.
Plan 1 retirement benefits are vested after an employee completes five year 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 percent of the
average final compensation per year of service, capped at 60 percent. The average final
compensation is based on the greatest compensation during any 24 eligible consecutive
compensation months. If qualified, after reaching the age of 66 a cost-of-living allowance is granted
based on years of service and is capped at 3 percent annually.
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, or at the age of 55 with 20
years of service, with an allowance of 2 percent of the average final compensation per year of
service. The average final compensation is based on the greatest compensation during any eligible
consecutive 60-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 percent per year reduction
47
applies; otherwise an actuarial reduction will apply. There is no cap on years of service credit; and a
cost-of-living allowance is granted (indexed to the Seattle Consumer Price Index), capped at 3'
percent annually.
Plan 3 has a dual benefit structure. Employer contributions finance a defined benefit components,
and member contributions finance a defined contributions component. The defined benefit portion
provides .a benefit calculated at 1 percent of the, average final compensation per year of service.
The average final compensation is based on the ,greatest compensation during any eligible
consecutive 60-month period.. Plan 3 members become eligible for retirement if they have: at least
ten years of service; or five years including twelve months that were earned after age'54; or five
service credit years earned in PERS Plan 2'prior to June 1, 2003. Plan 3 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
percent per year reduction applies; otherwise an actuarial reduction will apply. 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 1,167 participating employers in PERS. Membership in PERS'consisted of the following
as of the latest actuarial valuation date for the plans of September 30,2002:
Retirees and Beneficiaries Receiving Benefits 63,756
Terminated Plan Members Entitled to But Not Yet Receiving Benefits, 19,152
Active Plan Members'Vested 98,994
Active Plan Members Nonvested 55.191
Total 237,093
Funding Policy
Each biennium, the state Pension Funding Council adopts Plan 1 employer contribution rates, Plan
2 employer and employee contribution rates, and Plan 3 employer contribution rates. Employee
contribution rates for Plan 1 are established by statute at 6 percent for state agencies and local
government unit employees, and 7.5 percent for state government elected officers. 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. PERS Plan 3
defined contribution is a non-contributing plan for employers. Employees who participate in the
defined contribution portion of PERS Plan 3 do not contribute to the defined benefit portion of'PERS
Plan 3. The Employee Retirement Benefits Board set Plan 3 employee contribution rates. Six rate
options are available ranging from 5 to 15 percent; two of the options have 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 RCW.
PERS Plan 1 .PERS Plan-2 PERS Plan 3
Employer* 1.40% 1.40% 1.40%**
Employee 6.00% 1.18% ***
* The;employer rates include the employer administrative expense fee currently set at 0.22%.
** 'Plan 3 defined benefit portion only.
***'Variable form 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 were as follows.
PERS Plan 1 PERS Plan_2 PERS Plan 3-
2003 Employer Contributions $276 $ 10,567 $3,448
48
NOTE 7—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 by 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 illnessis 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. All 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.
The Washington Cities Insurance Authority (WCIA) was originally formed on January 1, 1981
utilizing Chapter 48.62 RCW (self-insurance regulation) and Chapter 39.34 RCW (Interlocal
Cooperation Act) 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 108
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 $3 million per occurrence self insured layer, and $11 million
per occurrence in the re-insured excess layer with no annual aggregate except $10 million per
member for public officials errors and omissions. The excess layer is insured by the purchase of
reinsurance and insurance. Total limits are $14 million per occurrence. 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 may apply by type of coverage.
Property insurance and auto physical damage are self-funded from the members' deductible to
$250,000 for all perils other than flood and earthquake and insured above that amount by the
purchase of reinsurance.
In-house services include risk management consultation, loss control field services, claims and
litigation administration and loss analyses. WCIA contracts for the claims investigation consultants
for personnel issues and land use problems, insurance brokerage and lobbyist services.
WCIA is fully funded by its members,who make annual assessments on prospectively rate 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 ofthe:membership's annual assessment
A Board of Directors governs WCIA which is comprised of one designated representative from.each
member. The Board elects an Executive Committee and appoints a Treasurer to provide general
policy direction for the organization. The WCIA Executive Director reports to the Executive
Committee and is responsible for conducting the day to day operations of the WCIA.,
The City is self-insured on a reimbursement basis for unemployment compensation. The City did not
have any claims for unemployment,compensation in 2003.
49
NOTE 8—INTERFUND BALANCES AND TRANSFERS
Interfund Balances
Loans between,funds are classified as interfund loans'receivable or payable on the fund financial
statements. Within the city, one fund may borrow from another when specifically authorized by
Council resolution. 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.
As of December 31, 2003 the Street Fund had loaned the General Fund $3,690,000 for cash flow
purposes. Of this amount, $800,000 was to be paid in 2004 so was classified as due to and from
other funds.
Due to other fund and due from other fund.balances at December 31,2003 were:
Due From Due To
O ther Funds Other Funds
General Fund $ 729 $ 830,961
Street Fund 828,216 659,022
Nonmajor governmental funds 79,000 79,000
Nonmajor enterprise,funds 659,000 -
Internal service;funds 2.767 729
Total government wide $1,569,712 $1,569,712
Interfund transfers are the flow of assets with,a reciprocal return of assets, goods, or services'in
return. The City uses transfers to(1) move revenues from the fund that.stature 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.
Interfund'transfer activity for the year is as follows:
'Transfers Out
Arterial. Capital Special
Street Street Projects Capital Proj.
Total Fund Fund Fund Fund
Transfers'In:
Street Capital Projects $312,103 $ -' $ 165,549 $36,554 $ 11,0,00,0
Sewer'Fund 959:000 959.000 - -
Total $ 1,271,103 $959,000 -$ 165,549 $36,554 $ 110,000
All transfers were to fund routine budgeted capital projects.
NOTE 9--SHORT-TERM DEBT
As of December 31,2003, short-term debt transactions consisted of the,following:
Beginning Ending,
Governmental Activities: . Balance Additions Deductions Balance
Tax.Anticipation Notes $ 500,000 $ - $ 500,000 $ -
Intergovernmental'Loan 50.000 - 50,000 -
Total $ 550,000 $ 550,000
The short-term debt was used for cash flow purposes during the pre-incorporation phase.
50
NOTE 10—LONGTERM DEBT 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 govemmental-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 does expect to
receive intergovernmental payments from the Spokane Public Facilities District pursuant to an
interlocal agreement dated as of July 2003, which if and when received by the City will be available
for debt service associated with the Center for up to$7 million of bonds.
General obligation bonds currently outstanding are as follows:
Debt
Name of Issuance .Purpose Interest Rate Outstanding
2003 LTGO Bonds Governmental Activities 2.00%-5.00% $9,430,000
The annual debt service requirements to maturityyfor-general obligation bonds are as follows:
Governmental Activities
Total
Princi al Interest Requirements
2004 $ 145,000 $ 435,928 $ 580,928
2005 165,000 417,835 582,835
2006 175,000 414,535 589,535
2007 185,000 411,035 596,035
2008 190,000 406,872 596,872
2009-2013 1.,135,000 1;928,463 3,063,463
2014-2018 1,530,000 1,674,640 3;204,640
2019-2023 2,425,000 1,256,500 3,681,500
2024-2028 2,24000 631,500 2,876,500
2029-2033 1.235.000 174.250 1.409.250
19,430,000 $7,751,558 $ 17;181,558
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 $124,321 and were
reported at the net amount of$9,554,321. The premium will be amortized over the life of the bonds.
Changes in Long-Term Liabilities
During the year ended December 31 2003,the following changes occurred in long-term;liabilities:
Balance Balance Due Within
Mar.31.2003 Additions Reductions Dec.31.2003 One Year
Governmental Activities:
General Obligation Bonds $ - $9,430,000 $ - $9,430,000 $ 145,000
Compensated Absences 56398 - 56.398
Governmental Activity
Long-Term Liabilities $ - '$9,486;398 $- - $9;486;398 $ 145,000
51
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 2003 for purposes of determining the legal debt
margin is $4;409,259,851. Under State of Washington statutes general obligation indebtedness'
pursuant to a vote of the electorate is limited to 2%% of actual value of taxable property located
within the City. Indebtedness without a vote of the people is limited to 1%%of actual value subject to
the limitation that total general purpose indebtedness may not exceed 2%%of total valuation. There.
is a 2%% limitation each for utility purposes and open space and park facilities purposes.
The remaining debt'capacities of the City are as follows:
Amount,
General Purposes Voted and Non-voted Debt—2%% (1') .$ 100,745,098
Utility Voted Debt—2%% 110,231,496
Open Space and Park Facilities Voted Debt-2%% 110.231.496
Total Remaining Debt Capacity $321,208;090
(1) Includes$56,652,500 debt capacity for non-voted debt.
Leases
Capital Leases The City.had.no capital leases as of December 31, 2003.
Operating Leases The City entered into a four year operating lease agreement with Northwest
Christian Schools for the rental of office space. The lease commenced on February 1, 2003. Rental
rates vary between $15.48 and $19.93 per square foot per annum. Lease payments for the year
ended December 31,,.2003 amounted to$204,969.
Schedule of Minimum Future Rental Payments
Year Ended Dec. 31 Amour
'200.4 $265,888
2005 289,799
2006 313;2708
2007 52:948
Total minimum future rental payments $922,343
NOTE 11 —SUBSEQUENT EVENTS
On September 14, 2004 an election was held that annexed,city fire protection to Fire District 1 and
Fire District 8. Those districts will assume responsibility for all city fire protection on January 1, 2005.
NOTE 12-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 grantors 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.
52
Combining and Individual
Fund Statements and. Schedules
53
This Page Intentionally Left Blank
, _
,,,- NI ti ,t, --n,
, ..._ _ _____3
.,_+�/fit i , si�
thJ` `, cc
1
LL i r ^ �' gl c_
_ �f
54
.Nonmajor Governmental .Funds-
' Special Revenue Funds
Special revenue, funds are used to account for specific revenues that are
legally restricted to expenditure for particular purposes.
Arterial Street Fund — This fund is used to account for the receipt and
expenditure of the State-levied motor vehicle fuel tax distributed to the City
in accordance with ,RCW 82.36.020. Revenues are restricted in use for the
construction, improvement, and repair of arterial streets.
Hotel/Motel Fund — This fund accounts for the receipt and',expenditure of a
special excise tax for tourism promotion and the,acquisition or operation of
tourism related facilities.
Capital Projects-Funds •
Capital projects funds are used to account for the acquisition and
construction of major capital, facilities and infrastructure' other than those
financed by proprietary funds.
Capital Projects Fund —This fund accounts for collection and expenditure of
the-quarter percent real estate excise tax levied on all sales of real estate.
The excise tax must be spent on capital improvements identified in a capital
improvements plan.
Special Capital Projects Fund — This fund accounts for collection and
expenditure of the second quarter real estate excise tax levied on all sales
of real estate'. The excise tax must be used for public works projects or for
streets, water systems, or sewers.
Street Capital Projects Fund. — This fund accounts for monies used to
finance the six year transportation' improvement plan. Revenues are
transfers from, the Arterial Street Fund, Capital Projects Fund, Special
Capital Projects Fund and Street Bond Fund.
55
Combining Balance Sheet
Nonmajor Governmental Funds
December 31, 2003
Total
Nonmajor
Special Capital Governmental
Revenue Projects Funds
Assets:
Cash, cash equivalents and
pooled investments $ 552,239. $ 1,080,446 $ 1,632;685
Receivables (net)
Taxes 67,658 111,789 179,447
Due from other funds - 79,000 79,000
Total assets $ 619,897 .$ 1,271,235 $ 1.,891,132
Liabilities and fund balances:
Liabilities:
Accounts payable 32,532 79,558 112,090
Due to other funds 79,;000 - 79,000
Total liabilities 111,532 79;558 191,090"
Fund balance:
Unreserved 508,365 1,191,677 1,700,042
Total fund balances 508,365 1,191,677 1,700,042
•
Total liabilities and fund.balances .$ 619,897 $ 1,271,235, 1,891,132
56
Combining Statement of Revenues, Expenditures, and.
Changes in Fund Balances
Nonmajor Governmental Funds
For the Year Ended December 31, 2003
Special Capital Total
Revenue Projects December 31,,
Funds Funds .2003
Revenues:
Taxes $ 257,143 $ 1,337,790 $ 1,594,933
Intergovernmental revenues .451.,941 - 451,941
Miscellaneous 255 41.1 666
Total revenues 709;339. 1;338,201 2,047,540
Expenditures
Current:
Transportation - 17,1.09 17,109
Economic environment .35,425 - 35,425
Capital outlay - 294,964 294,964
Total expenditures 35,425 312,073 347,498
Excess (deficiency) of revenue
over(under) expenditures 673,914 1,026,128 1,700,042
Other financing sources (uses):
Transfers in .312,103 312,103
Transfers out (165,549) (146,554) (312,103)
Total other financing sources (uses) (165;549) 165,549
Net change in fund balance 508,365 1,191,677 1,700,042
Fund balance-beginning - -Fund balance-ending $ 508;365 ,$ 1,191,677 $ 1,700,042
57
Combining Balance Sheet
Nonmajor Special Revenue Funds
December 31, 2003
Total Non-
Arterial Hotel/Motel Major Special
Street Fund Fund Revenue Funds
Assets:
Cash, cash equivalents and
pooled;investments $ 320,925 $ 231,314 $ -552,239
Receivables (net)
Taxes 44,613 23,045 67,658
Total assets $ .365,538 $ 254,359 $ 619,897
Liabilities and fund balances:
Liabilities:,
Accounts payable - 32,532 32,532
Due to other funds 79,000 - 79,000
Total liabilities 79,000 32,532 111,532
Fu nd balances:
Unreserved 286,538 221 827 508,365
Total fund balances 286,538 221,827 5.08,365
Total liabilities and fund balances .$ 365,538 :$ 254,359, $ 619,897
5.8
Combining Statement of Revenues, Expenditures, and
Changes in Fund Balances
Nonmajor Special Revenue Funds
For the Year Ended December 31, 2003
Arterial Hotel/Motel
Street Fund Fund Total
Revenues:
Taxes $ - $ 257,143 $ 257,143
Intergovernmental revenues 451,941 - 451,941
Miscellaneous 146 109 255
Total revenues 452,087 257,252 709,339'
Expenditures:
Current:
Economic environment - 35,425 35,425
Total expenditures - 35,425 35,425
Excess (deficiency) of-revenue
over(under) expenditures 452,087 221,827 673,914.
Other financing sources (uses):
Transfers out (165,549) (165,549)
Total other financing sources (Uses) (165,549) - (165,549)
Net change in fund balance 286,538 221,827 508,365
Fund balance - beginning - - -
Fund balance -ending $ 286,538 $ 221,827 $ 508,365
59
•
Combining Balance.Sheet
Nonmajor"Capital Projects Funds
December 31, 2003
Total Non-
Special Street Major Capital
Capital Projects Capital Projects. Capital Projects Projects Funds
Assets:
Cash, cash equivalents and
.pooled investments "$ 576,652 '$ 503,206 $ 588 $ 1,080,446
':Receivables(net)
Taxes 55,895 55,894 - 111,789
Due from other funds - 79;000 79,000
Total assets ;$ 632,547 $ 559,100 $
79,588 $ 1,271,235,
Liabilities and fund balances:
Liabilities:
Accounts Payable - - 79,558 79,558
Total Liabilities - - 79,558 79,558
Fund balances:
Unreserved 632,547 559,100 30 1,191,677
Total fund"balances 632,547 559,100 .30 1,191,677
Total liabilities and fund balances '$" 632,547 ;$ 559,100. $ 79,588_ ;$ 1,271,235,
60
Combining Statement of Revenues, Expenditures, and
Changes in Fund Balances
Nonmajor Capital Projects Funds
For the Year Ended December 31, 2003
Special Street
Capital Capital Capital
Projects Projects Projects Total
Revenues:
Taxes $ 668,895 $ 668,895 $ - $ 1,337,790
Miscellaneous 206 205 - 411
Total revenues 669,101 669,100 - _ 1,338,201
Expenditures:
Current:
Transportation - - 17,109 17,109
Capital outlay - - 294,964 294,964
Total expenditures - - 312,073 312,073
Net change in fund balance 669,101 669,100 (312,073) 1,026,128
Other financing sources (uses):
Transfers in - - 312,103 312,103
Transfers out (36,554) (110,000) - (146,554)
Total other financing sources (uses (36,554) (110,000) 312,103 165,549
Net change in fund balance 632,547 559,100 30 1,191,677
Fund balance- beginning - - - -
Fund balance-ending $ 632,547 $ 559,100 $ 30 $ 1,191,677
61
This Page Intentionally Left Blank
, ..,._
-V -1-- ,
...___. , \
---______,---- ,
\''(j
,
, - t..V
1 -----
62
Arterial Street Fund
Schedule of Revenues, Expenditures; and
'Changes in Fund Balances -Budget and Actual
For the Year Ended December 31,2003
- Variance with
Final Budget
Budgeted Amounts Actual Amounts Positive.
Original Final Budgetary Basis (Negative).
Revenues:
Intergovernmental revenues $ 405,00.0 $ 405;000 .$` 451,941 $ 46,941
Miscellaneous _ - 146 146.
Total revenues 405;000 405;000 , _ 452087 47;087
Other financing sources(uses):
Transfers out '(400;000) (400,000) (165,549) 234,451
Total other financing'sources(uses) (400,000). (400,000) .(.165,549). 234,451
Net change in fund balance 5,000 5,000 286,538 281,538
Fund balance.-beginning - - - - - .
Fund balance,-ending S. 5,000 $ 5,000 $ 286;538 $ 281,538
,63
•
HoteUMotel Fund
Schedule of Revenues, Expenditures;,and
Changes In Fund Balances - Budget and Actual
For the Year Ended December 31, 2003
Variance with
• Final Budget
Budgeted Amounts _ Actual Amounts Positive
Original Final Budgetary Basis (Negative)
Revenues:
Taxes $ 419,000 $ 419,000 $ 257,143 $ (161,857)
Miscellaneous - - 109 109
Total revenues 419;00.0 419,000 257.;252 (161,748)
Expenditures:.
Current:
Economic environment 200;000 200 000 35,425- 164 575
Total expenditures 200 000 200,000 35,425. 164,575
Excess-(deficiency) of revenue
over(under)expenditures 21 9,000 .219,000 221,827 2,827
Net change in fund balance 219;000, 219,000 221,827 , 2,827
Fund balance-beginning - - - -
Fund balance-ending $ 219,000 $ 219,000 $- 221,827 $ 2,827,
64
Capital Projects.Fund
,Schedule of:Revenues, Expenditures,.and
Changes in Fund'Balances -Budget and Actual
For the Year Ended December 31,2003
Variance with
Final Budget
Budgeted Amounts Actual Amounts Positive
Original Final Budgetary Basis (Negative)
Revenues.:
Taxes, $ 563,556 $ 563,556 $ 668,895 '$ 105,339
Miscellaneous - - 206 206
Total revenues 563,556 563,556 669,101 105,545
Other financing sources(uses):
Transfers out (550,000) (550,000) (36,554) 513,446'
Total other financing sources(uses) (550,000) (550,000) (36,554) 513,446
•
Net change in fund balance 13,556 13,556 .632,547 618,991
1
Fund,balancer beginning - - - -
Fund balance:-,ending $ 13,556 $ 13,556 $ 632,5471 $' 61.8,991
•
•
•
65
Special'Capital Projects Fund
-Schedule of Revenues, Expenditures, and
Changes in Fund Balances -Budget and Actual
For the,Year Ended December:31, 2003
•
Variance with
•
Final Budget
Budgeted Amounts Actual Amounts Positive
Original Final Budgetary Basis (Negative)
Revenues:
Taxes' $ 563,556 $ 563,556 $ 668,895 $ 1.05;339
Miscellaneous - - 205, 205.
Total revenues 563,556 563,556 669,100 '105,544.
Other financing sources.(uses):
Transfers out (550,000) '(550,000) _ (110,000) 440,000
Total other financing sources(uses) (550,000) (550,000) (11.0,000) 440,000
Net,change'in fund balance 13,556 13,556 559,100 545,544
Fund'balance--beginning - - - -
Fund balance-.ending $ 13,556, $ 1'3;556 $ 559;100 $ 545,544,
6.6
•
Street.Capita.lProjects Fund
Schedule of Revenues, Expenditures,and
Changes in Fund Balances -Budget and Actual
•
For the Year Ended December 31, 2003
Variance with
Final Budget
Budgeted Amounts Actual Amounts Positive
'Original Final Budgetary'Basis (Negative)
Expenditures:
Current:
Transportation .$ 30,000 :$ 30,000 $ 17,109 $ 12,891
Capital outlay 1,470,000 1,470,000 294,964 1,175,036
Total.expenditures 1,500,000 1,500,000 .312,073' 1,187,927
Excess(deficiency)of revenue
over(under)expenditures (1,500,000) (1.,500,000) (312,073), 1,187;927
Other financing sources(uses):
Transfers in 1;500;000. 1,500,;000 312;1,03 (1,187,897)
Total other financing sources(uses) 1,500,000 1,500,000 .3.12,103 (1,187,897)
Net change in fund'balance. - - '30 30
Fund.balance-beginning - - - -
Fund balance ending , $ - $ - ;$ 30, $ 30,
•
•
67
Internal Service Funds
Internal service 'funds are used to account for the financing of goods or
services provided by one department or agency to other departments or
agencies of the government and to Other 'governments units, on a cost
reimbursement basis.
Equipment Rental and Replacement Fund — This fund accounts, for the
operation of the computer equipment, communications equipment, the
maintenance of city vehicles and equipment,. and reserves for replacement
of designated equipment. Rates charged to user departments are based on.
full cost of operations and maintenance, including the recovery of related.
depreciation expense.
Risk. Management Fund — This fund accounts for the City's insurance
programs for property and casualty losses, unemployment compensation,
and general loss control activities. Premiums received by the fund are used
to pay insurance premiums and unemployment claims.
68
Combining Statement of Net Assets
Internal Service Funds
December 31, 2003
Equipment Rental Risk
& Replacement Management Total
Assets:
Current assets:
Cash, cash equivalents and
pooled'investments $ 62,011 $ 6,378 $ 68,389
Due from other funds 2,767 - 2,767
Total current assets 64,778 6,378 71,156
Capital assets:
Machinery& Equipment 650,218 - 650,218
Less accumulated depreciation (37,240) - (37,240)
Total capital assets (net of
accumulated depreciation) 612,978 - 612,978
Total assets 677,756 6,378 684,134
Liabilities:
Current liabilities:
Accounts payable" 2,256 - 2,256
Due to other funds 729 - 729
Total liabilities 2,985 - 2,985
Net assets:
Invested in capital assets 612,978 - 612,978
Unrestricted 61,793 6,378 68,171
Total net assets $ 674,771 $ 6,378 $ 681,149
69
Combining Statement of Revenues, Expenses,
And.Changes in Fund Net Assets
Internal Service Funds
For the Year Ended December 31, 2003
Equipment Risk
Rental Management Total
Operating Revenues:
Charges for services $ :90,623 $ 6;378 $ 97,001
Total operating revenues 90,623 6,378 97,001
Operating Expenses:
Operations 28,833 - 28,833
Depreciation 37.240 - 37,240
Total Operating expenses 66,073 - 66,073;
Operating income 24,550 6,378 30,928
Nonoperating revenues(expenses)_:
Interest income 3 - 3
Total nonoperating revenues(expenses) 3 3
Income before contributions and transfers 24,553 6,378 30,931
Contributions and transfers:
Capital contributions 650,218 - 650,218
Change in;net assets 674,771 6,378 681,149
Net assets,beginning ofthe year - - -
Net assets end of year $ 674,771 $ 6,378 $ 68,1,149
70
•
•Statement of Cash Flows
Internal Service Funds
, December 31, 2003
Equipment Rental Risk
& Replacement Management Total
Cash flows from operating activities:
Receipts.from interfund`services provided $, 87,856 $ 6,378 $ 94,234
Payments to suppliers (25,848) - (25,848)
Net cash provided (used)by operating activities 62,008 6,378 68;386
Cash flows from investing activities:
Interest received 3 - 3:
Net cash provided (used) by investing.activities, 3 - 3
Net'increase in cash&:cash equivalents 62,011 6,378 68,389
•
Cash &.cash equivalents, March 31, 2003 - - -
Cash &.cash equivalents, December 3.1,,2003' $ 62,011_ $ 6,378 $ 68,389
Reconciliation of Operating income to net cash provided
(used) by operating activities:
Operating income(loss) $, 24,550 $ 6,378. .$ 30,928
Adjustments to reconcile operating income to net
cash provided (used)by operating activities:
Depreciation 37,240 - 3.7,240
Changes in assets and liabilities:
(Increase)decrease-in due from other funds (2,767) - (2,767)
(Increase)decrease in accounts payable 2,256 - 2,256
(Increase)decrease in due to other funds 729 -• 729,
Total adjustments 37,458 - 37,458
Net cash provided (used) by operating activities' $ 62,008 $ 6,378 $ 68,386,
Noncash investing,capital;and financing activities:
Contributions of capital assets from other funds $ 650,218 - $ 650,218
•
71
This Page Intentionally Left Blank
L? .-4;
k
\ tyn,gy
1 / )
•
72
•
City of Spokane Valley
Capital Assets Used in the.Operation of Governmental_Funds
Schedule by Sources
December 31, 2003
2003
Governmental funds capital assets:
Land $ 1,548,655
Buildings 315,828
Improvements 1,021,099
Machinery &equipment 70,351
Infrastructure 60,271,997
Construction work in progress 398,826
Total assets $ 63626,756;.
Investments in governmental funds capital assets by source:
General obligation bonds $ 398,826
General Fund 106,924
Donations. 63,121,006
Total governmental funds capital assets $ 63,626,756,
1 This schedule presents only the capital asset balances related to governmental funds.
assets reported in the intemal service funds are excluded from the above amounts. Gene,
intemal service funds are included as governmental activities in the statement of net ass(
73
City of Spokane Valley
Capital Assets Used in the Operation of Governmental Funds
Schedule by Function and Activity'`
For the Year Ended December'31,2003
Improvements Machinery
Other Than and Construction
Land Buildings Buildings Equipment Infrastructure in Progress Total -
General Government $ - $ 36,907 $ - $ 44,721 $ - $ - '81,628
Public Safety - - - 25,296 - - 25,296
Transportation - - - - 60,271,997 294,964 60,566,961
Economic Environment - - - - - -
Culture and Recreation 1,548,655 278,921 1,021,099 334 - 103;862. . 2,952,871
Total.governmental-funds
capital assets $ 1,548,655 $ 315;828 $ 1,021,099 $ 70,351 $ 60,271,997 $ 398,826 $ 63,626,756
1 This schedule.presents only the capital asset balances related to governmental funds. Accordingly,the capital
assets reported in the internal service funds are excluded from the above amounts. Generally,the capital assets of
internal service funds are included as governmental activities in the statement of net assets.
City of Spokane.Valley
Capital Assets Used in the Operation of'Governmental Funds
Schedule of Changes by Function and Activity1
For the Year Ended..December 31, 2003'
General General.
Fixed Assets Fixed Assets
03/31/2003 Additions Deductions 12/31/2003
General government $ 33,551 $ 30,138 $ $ 63,689
Public Safety - 25,296 - 25,296
Transportation - 60,271,997 - 60,271,997
Economic Environment 17,939 - 1,7,939
Culture.and Recreation - 3,247;835 - 3,247,835
Total,governmental funds capital assets $ 51,490 '$ .63,575,266 ,$ - $ 63,626,756
1 This schedule presents only the:capital asset balances related to=governmental funds. Accordingly,the capital
assets reported in the internal service funds are excluded from the above amounts. Generally,,,the capital assets of
internal service funds are included as•govemmental activities in the.statement'of net assets.
75
This Page Intentionally Left Blank
j „ ..
76
Statistical Section
77
STATISTICAL SECTION
This section contains comprehensive statistical data that relates to the
physical, economic, social, and political characteristics of the City. This
supplementary data is designed to give the reader of'this report a broader
and more complete understanding of the financial affairs of the City and
should be viewed in conjunction with the basic financial statements as
previously presented.
I General Expenditures and Other Uses by Function
II General Revenues and Other'Sources by Source
III General Governmental Tax Revenues by Source
IV Property Tax Levies and Collections
V Assessed and Estimated Actual Value of Taxable Property
VI Property Tax Rates — Direct and Overlapping Governments
VII Computation of Direct,and Overlapping Debt
VIII Ratio of Net Direct General Bonded Debt to Assessed Value and
Bonded Debt Per Capita
IX Ratio of Annual Debt Service Expenditures for General Obligation
Bonded Debt to Total General Governmental Expenditures
X Computation of Limitation of Indebtedness
XI Demographic Statistics
XII Property Value and Construction Permits
XIII Principal Taxpayers
XIV Largest Private Employers
XV Miscellaneous Statistics
78
•
City of Spokane Valley, Table,I
General Governmental Expenditures'and Other Uses.by Function'
Last Ten Fiscal Years2
•
Mental& -
,Fiscal General Public Physical Economic Physical Culture•& Debt 'Capital
Year Government Safety Environment Transportation Environment Health, Recreation Service `Outlay Total
2003 $ 2,874;697 $ 7;394,857 1 817;532 ,$ 1,501,884 $ 757;541 $ 8,858 -$ 879;047 1 143,910 $ 923,662 $15,301,988
City of Spokane Valley Table,ll
General Governmental Revenues and Other Sources by Source
Last Ten Fiscal Years2
Intergovern=
Fiscal Licenses& mental Charges for Fines& Investment
Year Taxes, Permits Revenues Services Forfeitures Earnings; Miscellaneous Total
2003 $17,486;759 $ -1,088,165 $ 2,124,965 $ 477,342 $ 533,496 $ 68,436 1 4,674 ,783
21 ,837
City of Spokane Valley Table III
.General Governmental Tax Revenues by Source
• Last Ten Fiscal Years
Fiscal Property Sales Gambling Hotel/Motel. Real Estate
Year Taxes Tax. Taxes Tax Excise Tax Total
2003 $ 6,633,165 $ 8,729,859. 1- 528,802 .2577143 1;337,790 $ 17,486,759
1..tnduees general,transportation and parks mah,tenance.spedai revenue,aid debt service funds.
2. Less than ten years'date Is provided because 2003 was the first year of ira orporation.-
City of Spokane Valley Table IV
Property Tax Levies and Collections
Last Ten Fiscal Years2
Current Tax Ratio of Total Tax Retion,of Delinquent
Collections and Percent of Current Delinquent Tax Total Tax Collections to Total Outstanding. Taxes to Total Tax
Year Total Tax Levy Adjustments Taxes Collected Collections Collections Tax Levy Delinquent Taxes Levy
2003 $ 7,028,939 $ 6,716,080 95:5% $ - $ 6,716,080 95.5% $ 312,859 4.5%
1.. For the first'year of incorporation the County is obligated to transmitt county road taxes collected from the date of incorporation to the City.
These taxes are to be used for-street and road maintenance and are credited to the Street Fund.
2: Less than ten years data is provided because 2003 was the-first year of incorporation.
0
Co.
.City of Spokane.Valley Table V
Assessed and Estimateda Actual Value of Taxable Property
Last Ten Fiscal Years2
Real Property Personal Property Exemptions Total Ratio of Total
Assessed
Value to
Assessed Estimated Assessed Estimated Real Assessed Estimated Total Estimated
Tax Year Value Actual Value Value Actual Value Property Value Actual Value Actual Value
2004 $3,999,483;249 $ 4,450,200,737 $309,826,177 $309;826,177 $450,717,488 $.4,309;309,426 $4,760,026,914 90.5%
2003 No Data Available-Year of Incorporation
2. Less than ten years data is'provided because;2003 was the first year of incorporation.
3. It is the policy of the Spokane Counts Assessors Office to'value property at 100%,of'market value. As a result,assessed and'actual values are the same.
Source:Spokane County Assessors Office
City of Spokane Valley, Table VI
Property Tax Rates-Direct and Overlapping Governments
Last Teri Fiscal Years
Fiscal School State Fire, Rural
Year City District County School Districts Roads Other Total
2003 0:000 6.140 1.478 2.917 2.999 1:817 0.641 15.992
Table VII
City of Spokane.Valley
Computation of,Direct and Overlapping Debt
General ObligationBonds
December 31,2003
G.O.Debt Percent Amount Applicable.
Jurisdiction Outstanding Overlapping to Government
Direct:
City of Spokane Valley • 1 9,430,000 100:00% $ '9,430,000.
Overlapping:
'Spokane County 70,047,985 19:91% 13,945,166
Fire:District#8' 3,630,000 9:86°i6 358,090.
Spokane County Library:District 2,980,000 35.18% 1,048;271
Spokane School District#81 165,670,000 3.80% 6,290,396,
Central Valley School'District#356 99;068,708, 69:24% 68;599;428
East Valley School District#361 13,934,000 57.94% 8,072,908
•
West Valley School District"#363 8,325;000 54.16% 4,508,864 "
Total'Overlapping,Debt $ 102;823;123
Total Direct and Overlapping $ 112,253,123
81
City of Spokane Valley Table VIII
Ratio of Net Direct Bonded Debt
To Assessed Value and Bonded Debt Per Capita
Last Ten Fiscal Years
Less Debt
Service Fund Ratio o f Net
Gross Bonded Cash and Bonded Debt to Net Direct Bonded
Year Population Assessed Value' Debt Investments Net Direct Bonded Debt Assessed Value Debt Per Capita
2003 82,005 $4,409,259,651 $9,430,000 - $9,430,000 0.21% $ 115
City of Spokane Valley Table IX
Ratio of Annual Debt Service Expenditures
For General Obligation Bonded Debt CO
to Total General Governmental Expenditures
Last Ten Fiscal Years
•
Ratio of
Total Debt Service to
Total General General
Fiscal Debt Governmental Governmental
Year Puincipal Interest Service Expenditures Expenditures,
2003 - - - $ 15,301,988 0.00%
1. Assessed valuation was for propertylax year2004.
Table X
CITY OF SPOKANE VALLEY
COMPUTATION OF LIMITATION OF INDEBTEDNESS
December 31,2003
ASSESSED VALUATION,(2003 FOR 2004 TAXES) .$•4,409,259,851
I. GENERAL PURPOSE.INDEBTEDNESS(LEGAL LIMIT OF 2:5%OF
TAXABLE PROPERTY VALUE) - $ 110,231,496
A. GENERAL PURPOSE.INDEBTEDNESS WITHOUT A VOTE
(LEGAL LIMIT 1,5.%) $ 66,138,898
INDEBTEDNESS(LIABILITIES):
1. Councilmanic Bonds $ 9,430,000
Less: Redemption Fund Assets: •
Cash&Investments in.Bond Redemption Funds -
9,430,00,0
2. General Government Liabilities
Employee Leave Benefits 56,398
Less: Redemption Fund Assets:
56,398
Less: Total Net General'Indebtedness—Section A (9,486;398) •
Margin of Indebtedness Still Available 56,65Z500
B. GENERAL,PURPOSE INDEBTEDNESS'WITH A VOTE
(LEGAL LIMIT 2:5%) 110,231,496
No Indebtedness Incurred -
Remaining Voted G 0 Debt Capacity-General Purposes 110,231,496
Total Indebtedness;Voted&Nonvoted Bonds (9,486,398)
REMAINING VOTED AND NONVOTED GO DEBT APACITY GENERAL PURPOSES 100,745,098
II. INDEBTEDNESS FOR,OPEN.SPACE AND PARKS FACILITIES
WITH A 3/5'VOTE''(LEGAL LIMIT 2.5%) 110,231,496
No Indebtedness Incurred -
Remaining Voted.G 0 Debt Capacity-Open-Spaceand Park Purposes 110,231,496
III. INDEBTEDNESS FOR.UTILITY PURPOSES
WITH A 3/5.VOTE(LEGAL LIMIT 2.5%) 110,231,496
No,Indebtedness Incurred -
Remaining Voted G O Debt Capacity-Open Space and Park Purposes 110;231,496
Total Indebtness Allowable(Legal Limit 7.5%) 330,694,488 •
Less: Indebtedness incurred-All Purposes (9,486,398)
MARGIN OF INDEBTEDNESS AVAILABLE $ 321,208,090,
83
City of Spokane Valley Table XI
Demographic Statistics
Last Ten Fiscal Years
Fiscal Per Capita Area Taxable: School Unemployment
Year Population Income' Sq Miles Retail Sales2 Enrollment Rate'
2003 82,005 $ 26,107 38.5 $ 1,0.7.2;774,225 18,863 6.8%
1. Spokane metropolitan statistical.an3a annual average.
2. For the nine months April 1-December 31,2003.
CO
City of Spokane Valley Table XII
Property Value and Construction Permits
Assessed Property Value Building Permits'
Commercial
Fiscal Personal Industrial
Year Real Property Property Total Total Residential and Other
2003 $ 3,999,483,249 $309,826,177 $4,309,309,426 $ 60,579 $ 22,415 $ 38,164
1.Source: City of Spokane Valley for the period March 31 to December 31,2003.
Table XIII
PRINCIPAL TAXPAYERS
December 31,2003
2003 Percent
Assessed of AN to
Taxpayer- Type of Business - Valuation' Total AN
Kaiser Aluminum, Inc. ,Aluminum Manufacture $ 61,709,547 1.40%
Spokane Valley Mall Retail Malls 56,377,080 1.28%
Avista Corporation Electric&Gas Utility 49,988,659 1.13%
Park SPE,LLC Real Estate 41,960,700 0.95%
Qwest Corporation Telephone Utility 18,957,436 0.43%
Itron Inc. Electronics Manufacturer 16,913;447 0.38%
Honeywell Electronic Materials ElectronicsManufacturer 15,129,873 0.34%
Wal-Mart Stores Inc. ■ Retail Store 12,765,566 0.29%
Cedar Chateau Estates Real Estate 12;751,741 029%
Harland Douglas Real Estate Developer 12,445,410 0.28%0
Total Ten Principal Taxpayers 298,999,459 0.07
Total-All Other Taxpayers 4,110,260,392 0.93
Grand Totals $4,409,259,851 1.00
CO
Ln
Source:Spokane County Treasurer
Table XIV
• LARGEST PRIVATE EMPLOYERS
Number of
Employer. T_ype of Business Employees
Dakotah Call center 1,000
Burlington Northern&Santa Fe.RR Rail road .925
Kaiser Aluminum Aluminum manufacture 650
Huntwood Industries Custom kitchen cabinets 638
Itron Inc. Meter data readers 516
Honeywell Electronic Materials High purity metals 473
Yoke's Washington Foods Retail grocery 447
Tidyrnan's LLC Retail grocery 272
Wagstaff Inca Aluminum casting 209
Avista Corp. Electric&Gas.utility '167
Source:Journal of Business Book of Lists
Table XV
City of Spokane Valley
Miscellaneous.Statistics
December 31,, 2003
Date of Incorporation: March 31, 2003
Form of Government: Noncharter code city under RCW 35A
Council-Manager
Land Area: 38.5 square miles
Population: 82,005
Miles of Roads:
Paved 412 miles
Unpaved 12 miles
Libraries: Two libraries provided by the.Spokane County
District.
Recreation: Number of parks 9,
Number of acres 165
Number of swimming pools 3
Special use facilities 3
Miles of trails 7
Police Protection: Contracted through Spokane County Sheriffs Office
Number of Officers: 98
Fire Protection: Provided by, Fire.Districts 1 and 8.
Public-Education: Four school districts with city boundaries..
Central,Valley School District No. 356
East Valley School District No.'361
West Valley School District No. 363
Spokane School District'No. 81
Number of schools:
High schools 4
Middle'schools 4
Elementary schools 12
Entertainment Facilities: Spokane County Fairgrounds
86