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2005 Comprehensive Annual Financial Report
1 1 1 1 y Spokane jvalley� Comprehensive Annual 1 Financial Report 1 For the Fiscal Year Ended � December 31 , 2005 1 1 1 1 1 City of Spokane V � Washington 1 1 � Comprehensive Annual Financial Report � For the Fiscal Year ' January 1, 2005 Through December 31, 2005 1 Department of Finance ' Ken Thompson Finance and Administrative Services Director 1 I 1 TABLE OF CONTENTS Introductory Section Table of Contents i ` Letter of Transmittal • 1 I Principal Officials 6 . , Financial Section Independent Auditor's Report ....7 Management's Discussion and Analysis 9 Basic Financial Statements Government-Wide Financial Statements: Statement of Net Assets 18 Statement of Activities 19 Fund Financial Statements: ' Balance Sheet—Governmental Funds 20 Reconciliation of Total Governmental Fund Balances to Net Assets of Governmental Activities 21 Statement of Revenues, Expenditures and Changes in Fund Balances—Governmental Funds 22 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund , Balances of Governmental Funds to the Statement of Activities 23 Statement of Revenues, Expenditures,and Changes in Fund Balances—Budget and Actual: • General Fund 24 Street Fund 25 Street.Capital Projects Fund 30 Statement of Net Assets—Proprietary Funds 27 I P ry Statement of Revenues, Expenses, and Changes in Fund Net Assets—Proprietary Funds 28 Statement of Cash Flows—Proprietary Funds 29 Notes to the Financial Statements 30 Combining and Individual Fund Statements and Schedules I Governmental Funds: Description of Special Revenue; Debt Service, and Capital Project Funds 47 Combining Balance Sheet—Nonmajor Governmental Funds 49 Combining Statement of Revenues, Expenditures,and Changes in Fund Balances Nonmajor Govemmental Funds 50 Combining Balance Sheet—Nonmajor Special Revenue Funds 51 Combining Statement of Revenues, Expenditures,and Changes in Fund Balances Nonmajor Special Revenue Funds 52 Combining Balance Sheet—Nonmajor Capital Project Funds 53 Combining Statement of Revenues, Expenditures,and Changes in Fund Balances Nonmajor Capital Project Funds 54 I • Financial Section(Continued) c I i c I Schedule of Revenues, Expenditures, and Changes in Fund Balance—Budget&Actual: Arterial Street Fund 55 Trails and Path Fund 56 • I Hotel/Motel Fund 57 CenterPlace Operating Reserve 58 Service Level Stabiliation Reserve 59 Winter Weather Reserve 60 I Debt Service LTGO 03 Fund 61 Capital Projects Fund 62 Special Capital Projects Fund 63 I Mirabeau Point Project...... 64 Street Bond Capital Projects Fund 65 Community Development Block Grant Fund...... 66 Capital Grants Fund 67 I Barker Bridge Project Fund... ... ... ....68 Parks Capital Projects Fund ... 69 Civic Building Capital Projects Fund...... ... .... 70 Proprietary Funds: Description of Internal Service Funds 71 I Combining Statement of Net Assets—Internal Service Funds 72 Combining Statement of Revenues, Expenses, and Changes in Fund Equity— Internal Service 73 I Combining Statement of Cash Flows—Internal Service 74 Statistical Section I Net Assets by Component 76 Changes in Net Assets 77 Governmental Activities Tax Revenue by Source 78 • Fund Balances of Governmental Funds 78 I Changes in Fund Balances of Governmental Funds 79 General Governmental Tax Revenues by Source 80 Assessed and Estimated Actual Value of Taxable Property . 81 Property Tax Levies and Collections 81 Property Tax Rates. ...... ••• 82 Principal Property Taxpayers 83 Ratio of Outstanding Debt by Type 84 I Ratio of General Bonded Debt Outstanding 84 Direct and Overlapping Governmental Activities Debt 85 Legal Debt Margin 86 Demographic Statistics Principal Employers 87 88 Full-time Equivalent City Government Employees by Function 89 Capital Assets Statistics by Function 89 IOther Supplementary Schedules I Schedule of Long Term Debt...... ...... ........ 90 Computation of Limitation of Indebtedness........................... ................... 91 Schedule of Expenditures of Federal Awards... ... 92 Notes to the Schedule of Expenditures of Federal Awards 93 I ii 1 1 1 f 1 1 Introduction 1 1 1 1 1 1 1 1 1 1 1 1 1 • ! e tT.-`f 4 v i✓rte ��Ys'—` �_• 11707 E Sprague Ave Suite 106 +Spokane Valley WA 99206 �� 509.921.1000♦ Fax: 509.921.1008♦cityhall®spokanevalley.org a`# September 8, 2006 • 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, 2005, 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 generally accepted accounting principles (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 Y ear ended December 31, 2005, 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, 2005 are fairly presented in conformity with generally accepted accounting principles. The independent auditor's report is included as the first component of the financial section of this report. • fir I 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 of 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 City'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 near the Idaho border. The City of Spokane Valley shares a boundary with the City of Spokane on the west. The City encompasses an area of 38.5 square miles and is linked to established transportation corridors. I The city of Spokane Valley provides most local government services. These services include police protection, construction and maintenance of streets, planning and zoning, and park and recreational activities. In addition, the City operates an equipment maintenance/rental fund and stormwater utilities. The for police protection, jail and court services, I City contracts with Spokane County p p , j and street maintenance. Library and Fire services are provided through special purpose Districts. Park maintenance is provided by a private landscape maintenance firm. I 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 85,000. A diversified mix of industries exists within I 2 Spokane Valley with retail and service sectors being the largest. Department stores, automobile dealerships, home improvement outlets and electronic/computer stores lead the retail 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 4,5 00 people. The City of Spokane Valley is recovering well from the effects of the recession that began in 2001. Building permit and sales tax revenues have increased • significantly during the last few years. Long-term Financial Planning The City has developed a six-year strategic plan to identify budgetary issues before they occur. Long-term revenue projections show sales tax, property tax and service revenue increasing. Residential home sales are expected to remain strong through 2006 and commercial building permits are also expected to increase. On the expense side of the City's budget, employee salaries and health benefits stand out as a significant challenges. The recent inflation rate in medical care has 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. These temporary investments produced interest in the general fund of approximately $173,0 00 for the year ended December 31, 2005. In accordance with the requirements set by 3 , , State law, the State Deposit Protection Commission also insures deposits with in- 1 state banks. Risk Management The City of Spokane Valley is a member of the Washington Cities Insurance I Authority (WCIA) for general liability and property damage coverage. The City is ll 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 1 illness is serious enough to miss work. The City accounts for its risk management activities in internal service funds and 1 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 2005, the City contributed $44,968 toward these plans. The City has replaced the Federal Social Security Program with a defined ,I 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 I 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 eve ry one I 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, I • Ken Thompson Finance and Administrative Services Director I 4 . CITY OF SPOKANE VALLEY City Council Members Diana Wilhite,Mayor Steve Taylor,Deputy Mayor Position# 1 Position#2 Michael DeVleming Gary Schimmels Position#3 Position#4 Richard Munson Bill Gothmann 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 Mike Connelly, City Attorney Chris Bainbridge, City Clerk 5 . . .1. City Council Members Dick Denenny Diana Wilhite,Mayor Gary Schimmels Bill Gothmann Steve Taylor,Deputy Mayor Mike DeVieming -..1 Rich Munson .,., = :r .Y. -',''F';W-,119.:04,;e,SY2:-/L:',V.Z-f!Q&K": "1.4. `-P'_.°=1:7;12n :-86.'"Yl■;:,"'_!V:;'..72 ::: :-7-71'!''i'lr'. ''''''''''''''''''''=A:--:.:'r- '''''''-e''''?''''';''. '1 City Manager/CEO Dave Mercier L 1 ecu•ye an. • Deputy City . Legislative Finance Legal Manager/COO Police UPPO Nina Regor —..._..... . _ ,Il iiiiiiiramennian g 7, Patrol L City Clerk ___11' ..i_ ,. .......J --- ,- C71 Operations and , Parks and Public Works Community 1 Legislative Administration Recreation . Development . Lg • Prevention elations 1 intergovernmental .,,..,.,,,,. , ,,' guns limmi ' Investigation °ordination ;! ''minis ative ,,... =parks , Stormwater Planning/GIS Building i-•-ervices :::•:.: Emergency u I. i Operations :i; Development .7 anagement • , •versig MO fi ng ht Aquacs ineering :.:-. Long Range := Code Compliance ,.., Contract Se nior Center i'„ Capital ,,:: f• dministration To E.--mprovement Plan . [-'' Current ',. Permits/inspections CenterPlace ;! Transportation Recreation minsuirJ amPrograms Transportation ISO Neighborhood NoTr a f fi a Management Street Maintenance ars • 7=1111- .-MEIN MIEN - NM - EON- -=NC -mato- .-- -1- I - lima - Ili= - mow mime I rim Emir - iii■1-• - 01 -- -L■mi- -miimi - - - 1 I I I I 1 Financial Section 1 I . 1 1 1 1 I . 1 i 1 1 1 I . I Independent Auditor's Report on Financial Statements City of Spokane Valley I Spokane County January 1, 2005 through December 31, 2005 - I Mayor and City Council City of Spokane Valley Spokane,Washington - . We have audited the accompanying financial statements of the governmental activities,the business-type activities, each major fund and the aggregate remaining fund information of the City of Spokane Valley, I Spokane County, Washington, as of and for the year ended December 31, 2005, which collectively comprise the basic financial statements as listed on page 8. These financial statements are the responsibility of the City's management. Our responsibility is to express opinions on these financial statements based on our audit . IWe conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, I issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles I used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business type activities, each major fund and the aggregate remaining fund information of the City of Spokane Valley, as of December 31, 2005, and the respective changes in financial position and cash flows, where applicable, thereof, and the I respective budgetary comparison for the General, Street and Street Capital Projects funds, for the year then ended, in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards,we have also issued our report on our consideration I of the City's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance I and the results of that testing, and not to provide an opinion on the internal control over financial reporting or an compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. The management's discussion and analysis on pages 9 through 15 is not a required part of the basic financial statements but is supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures,which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However,we did not audit the information and express no opinion on it. Our audit was performed for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The accompanying Schedule of Expenditures of Federal Washington State Auditor's Office 7 Awards is presented for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A-133 Audits of States, Local Governments, and Non-Profit Organizations. This schedule is not a required part of the basic financial statements. Such information has been subjected to auditing procedures applied in the audit.of the basic financial statements and, in our opinion, is fairly the 9 P PP stated,in all material respects,in relation to the basic financial statements taken as a whole. • • tzrotode,„„, • BRIAN SONNTAG,CGFM STATE AUDITOR • August 11, 2006 • • • c I Washington State Auditors Office 8� i 1 I MANAGEMENT'S DISCUSSION AND ANALYSIS • This section of the City of Spokane Valley's annual financial report provides a narrative the City's financial activities for the fiscal year ended December 31, 2005 and overview of th ty y financial position as of December 31, 2005. This information should be read in I conjunction with the preceding letter of transmittal and the financial statements and notes to the financial statements that follow. IFINANCIAL HIGHLIGHTS • • Net assets, the amount by which total assets exceed total liabilities, equal $83.2 I million. A total of 67.3%, or $56.0 million, of total net assets is invested in capital assets, such as streets, land, and buildings, and $7.2 million is restricted for capital projects. Of the remaining net assets, $20.0 million is available to meet the Igovernment's ongoing activities and obligations. . • • The government's net assets increased by $883 thousand in 2005. This increase I was a result of higher than anticipated revenues and lower than appropriated expenditures. • Governmental fund balances at year end were $22.4 million. Of the unreserved I balance $7.2 million is designated for capital projects with the balance available to fund ongoing activities. • Unreserved fund balance in the general fund was $7.0 million. This represents an increase of$2.6 million over the December 31, 2004 unreserved fund balance. • Total City debt decreased by $165 thousand to $9.12 million during the current fiscal year. The City did not issue any additional debt in 2005. I 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. IThis section of the management's discussion and analysis is intended to introduce and explain the basic financial statements. IGovernment-wide financial statements The government-wide financial statements are designed to give the reader a picture of the I 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 I activities- Governmental activities of the City include general government (finance, executive, human resources), public safety (police), physical environment, economic environment, transportation, mental and physical health, and culture and recreation. The IC it./s uu II Iess-Lype act vItles consist UI the storm-water uLIIILY. The statement of net assets presents information on all of the City's assets and liabilities, with the difference reported as net assets. This statement is similar to the balance sheet of I 9 , a private sector business. Over time, increases or decreases in net assets may serve as a , useful indicator of improvement or deterioration in the City's overall financial position. ,' The statement of activities presents information showing how the government'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 I 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 c The annual financial report includes fund financial statements in addition to the II government-wide financial statements. While the government-wide statements present the City's finances based on the type of activity, general government versus business- I 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 i' basis of accounting is different between the governmental fund statements and the 'government-wide financial statements. The governmental fund statements focus on near term revenues/financial resources and expenditures while the government-wide financial ,' statements include both near term and long term revenues/financial resources and expenses. The information in the governmental fund statements can be used to evaluate . the City's near term financing requirements and immediate fiscal health. Comparing the , governmental fund statements with government-wide the overnment-wide statements can help the reader I 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 arid the government-wide financial statements are included with the governmental fund il balance sheet fund the governmental fund statement of revenues, expenditures, and ..1IQl II.G.�111 1u1 d$JQIQI ces. , The City of Spokane Valley maintains nineteen individual governmental funds. The City's three major goV v VernmeYn funds, the geVneVra\A! fund, street fund, ..rd street cVaM pitaN! projects fund are presented separately in the governmental fund balance sheet and the ,Il governmental fund statement of revenues, expenditures and changes in fund balances. The remaining governmental funds are combined into a single column labeled other I 101 I I 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 I • 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 Igovernmental funds'combining statements in this report. Proprietary funds are used by governments to account for their business-type activities. I 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. IThe 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 I provided to citizens. internal service funds are used to account for goods and services • provided internally to various City departments. I 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 stormwater utility. IInternal service funds are an accounting untin 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. INotes to the financial statements . The notes to the financial statements provide additional information that is important to a Ifull understanding of the data in the government-wide and fund financial statements. The notes are located immediately following the basic financial statements. IOther information . The combining statements for other governmental funds and internal service funds are Ipresented immediately following the required supplementary information. GOVERNMENT-WIDE FINANCIAL ANALYSIS IStatement of N et Assets II he statement of net assets r`2ll sei-t1 as a I1seft.I indicator of he I _ITU s Tinafd I?I position. TL... r &..'.. 6:.d.......:...1 'a:..•. ..! .j.•.:.-... a4... .......J.....1 t'1...-�.....t...- 7011 '-f1f11= 6 I I Ic Lilly III ICI II..ICII VJU,ILIUI I III I./1 UVGU UUI II 19 a IG ycaI cl lucu Vcl,G1 111JC1 .]I, GUUJ, CM I IcL assets increased by $883 thousand. The City of Spokane Valley's net assets at I Vece 1IUeI 31, 2005 LULdl $83,26(3,106. Following ig is d condensed version of ti-le government-wide statement of net assets. • I 11 it Table 1 I City of Spokane Valley's Net Assets • (in thousands) Governmental Business-Type Total Primary Activities Activities Government 2005 2004 2005 2004 2005 2004 Current and other assets $28,167 $20,830 $1,397 $1,345 $29,564 $22,175 I Capital assets(net of depreciation) 65.326 71.433 - - 65.326 71.433 Total assets • 93,493 92,263 1,397 1,345 94,890 93,608 Long-term liabilities 9,297 9,488 - - 9,297 9,488 I Other liabilities 2.208 1.662 119 75 2.327 1,737 Total liabilities 11,505 11,150 119 75 11,624 11,225 Net assets: Invested in capital assets,net of related debt - 56,028 62,079 - - 56,028 62,079 Restricted 7,248 7,994 - 7,248 7,994 Unrestricted 18.712 11.040 1.278 1.270 , 19.990 12.310 Total net assets 5 81,988 $81,113 $1,278 $ 1,270 $83,266 5 82,383 The largest component of the City's net assets, 67.3% or $56.0 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 8.7% or $7.2 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 from dedicated taxes. Other functions of the City may access the remaining net assets of $19.9 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. 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$883 thousand in 2005. f 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. 121 I . Table 2 Change in City of Spokane Valley's Net Assets (in thousands) Governmental Business-Type Total Primary Activities Activities Government 2005 2004 2005 2004 2005 2004 Revenues: Program Revenues' I Charges for services $ 4,803 $ 3,119 $ 1,252 $ 777 6,055 $ 3,896 Operating grants&contributions 84 90 - - 84 90 Capital grants&contributions 1,393 11,690 - - 1,393 11,690 General Revenues: I Property taxes 9,549 18,648 8,981 - - 9,549 8,981 Sales taxes 16,532 - - 18,648 16,532 Excise taxes 5,741 • 5,796 - - 5,740 . 5,796 Other taxes 1,534 1,103 - - 1,534 1,103 Loss on disposal of capital assets (62) (10) - - (62) (10) Investment interest 562 233 36 13 598 _ 246 Total revenues 42,252 47,534 1,288 790 43,539 48,324 I Expenses: General government 3,471 - 3,360 - - 3,471 3,360 Public safety 15,934 13,328 - - 15,934 13,328 Physical environment 986 1,124 - - 986 1,124 I Transportation 14,944 13,361 _ _ 14,944 13,361 Economic environment 2,020 1,562 2,020 1,562 Mental and physical health 44 43 - - 44 43 I Culture and recreation 3,785 3,444 - - 3,785 3,444 Interest on long-term debt 450 513 - - 450 513 Sewer - - - 2 2 Stormwater management - - 1.023 75 1.023 75 I Total expenses 41,634 36,735 1,023 77 42,657 36,812 Increase in net assets before transfers 618 10,799 265 713 883 11,512 Transfers 258 237 , (258) (237) - - I Increase in net assets 876 11,036 7 476 883 11,512 Net assets-beginning 81.113 70.077 1.270 794 82,383 70,871 Total net assets $81,989 . $81,113 $ 1,277 $ 1.270 $83,266 $82,383 IGovernmental activities contributed $876 thousand of the total change in net assets of $883 thousand. Key elements of the increase are as follows: . I • Sales taxes accounted for approximately $18.6 million in revenues in year 2005. The City received $9.5 million in property taxes. Other taxes received were real estate excise taxes ($2.5 million), motor vehicle fuel taxes ($1.8 million), and Ihotel/motel room taxes ($ 388 thousand). 0 This being the third year of incorporation the City aggressively monitored contract I .�__ •.z_ a_ and a_LL:... levels. TL.., a It fir-_!vier costs a !d st !!!!!u leve!s. The net result was a third year unrestricted I\.me erve vf. $22.A r--to ellinn I rear nrVcI rnnmI anfJ! activities. I . Rusin.secs_:yprs activitiec of the City's ctormwater utility increased the City of Spokane MI// � Y I�/�■MW V � . YI\ V V► .../• \V1 L... .��V�•I VVM •1V City of Spokane 1 Valley's net assets by $7.7 thousand, accounting for .87% of the total growth in the government's net assets. I 13 it • itKey element of this increase is as follows: • The Stormwater Management fund accounted for the entire increase of $7.7 r thousand. The primary revenue source is a stormwater management fee imposed upon real property. FINANCIAL ANALYSIS OF THE CITY'S FUNDS I As discussed earlier, the City of Spokane Valley uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. I Governmental funds • The purpose of the City's governmental funds is to report on near term revenuesffinancial 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 9 $22.4 million. Of the total ending fund balance, $7.2 million is earmarked for capital `l construction projects, $8.2 million resides with special revenue funds, and the General fund has an unreserved fund balance of$7.0 million. I 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 did not receive property tax in its first year of incorporation. At the end of.2005 the fund 1 balance of the general fund was $7.0 million. t The general fund increased fund balance by $2.3 million for the year ended December 31, I 2005. Revenues exceeded projections by $3.8 million primarily from increased sales tax revenues. Expenditures were $3.4 million less than budget primarily in the area of general government functions. ---' The street fund has a fund balance of$3.9 million, an increase of $600 thousand for the year. The primary source of revenue for the street fund is motor fuel tax. Road maintenance costs were $2.1 million under the original budget projection. I The Street Capital Projects fund has an ending fund balance of$5 thousand. Construction costs were approximately $998 thousand for the year. These projects were mostly funded with grant funds and transfers from other City Funds. 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 I 1 14 I ' concerning the finances of the City's proprietary funds have been already been addressed in the discussion of the City's business-type activities. IGENERAL FUND BUDGETARY HIGHLIGHTS The City Council amended the revenue and expenditure budgets during 2005. The I amendments recognized additional unrestricted fund balance carried over from 2004, service fees from building permits/planning fees, grant proceeds and additional sales tax receipts. Expenditure appropriations increased for street projects, CenterPlace construction and for the creation of reserves for CenterPlace operations, parks capital I improvements, civic facilities, extraordinary winter weather operations and a service level stabilization fund. . I Actual revenues were $3.8 million higher than the final 2005 revenue budget. The largest e was taxes of $2.5 million more than the final budget. portion of this positive variance $ 9 Actual expenditures were $3.4 million less than the final 2005 expenditure budget. I General government expenditures of $3.1 million less than the budgeted amount account for the largest portion of this positive variance. Actual other financing uses were $1.1 r9 P P million more than the final 2005 budget. This negative variance was due to transfers out I being $1.1 million more than budgeted. Overall, there was a positive variance of $6.0 million over the final 2005 budget. I During 2003 and 2004 revenues were conservatively projected and expenditures were estimated on the high side as city staff settled into new positions with the new city. This - conservative approach and a booming economy (building permits, sales tax) resulted in significant increases in fund balance during 2004 and 2005. CAPITAL ASSETS AND DEBT ADMINISTRATION I Capital Assets • I The City of Spokane Valley's investment in capital assets, including construction in o ress for its governmental type activities as of December 31, 2005 amounts to $65.3 pig 9 tYP million, net of accumulated depreciation. This investment in capital assets includes land, I buildings, improvements, machinery and equipment, construction in progress, and infrastructure. The year-end balance represents a net decrease(additions less retirements and depreciation) of$6.1 million from the end of last year. Additional information can be Ifound in Note 5 of this report. Major additions to capital assets during the fiscal year included the following: . I • Spokane County donated $310 thousand dollars in street improvements related to the valley road and valley sewering projects. An additional $2.4 million of city funds were expended for street improvements in 2005. I - Additional equipment it pur ci i ases related i to the start-up of i et city totaled $316 thousand. The equipment included vehicles, computers, telephone syst em and !eacPhnlr1 imnrn i manic fnr situ hall I • Construction in progress for the CenterPlace Regional Recreation Center totaled $3.4 million dollars. The CenterPlace facility was completed in 2005 at a total cost I 15 of $9.6 million. Bond sale proceeds were used early in the project, but, $452,000 in donations remained unspent at year end. The following table provides a listing of the capital assets (net of accumulated . depreciation)at December 31, 2005. Governmental Activities Land $ 1,597,585 • Buildings 9,797,701 Other improvements 814,569 Infrastructure 45,292,497 Machinery and equipment 644,467 Construction in progress 7,179,352 Total $ 65,326.171 • Long-Term Debt At the end of the current fiscal year, the City of Spokane Valley has total bonded debt outstanding of $9,120,000. This amount is backed 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'A% 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 2005 for purposes of determining the legal debt margin is $5,056,951,058. Remaining debt capacities for the City for general voted and non-voted purposes(21/2%) is limited to$117,180,600. from Mood 's for its non-voted general The City of Spokane Valley maintains a A3 rating r y 9 obligation debt. Additional information regarding the debt limitations and capacities can be found in Note 11 and in the Statistical Section of this report. j 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 2006 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 • pr of lisi !g. Healthy economic numbers emerged in 2005 including 5,700 new jobs in Spokane County, with the unemployment rate dropping to 5.9%. Single family dwelling permits in the Spokane area surged to 2,517 while the number of single family dwelling sales topped 8,300. Both numbers reflect the highest tally in the last ten years. 16 I The City of Spokane Valley's assessed value climbed 11% to $5.05 billion in 2005. An Iincrease of another 10% is expected during 2006. The City of Spokane Valley's 2006 property tax rate is expected to remain very close to the 2005 level of $1.60/thousand dollars of assessed value. IA county wide real estate excise tax generated $2.5 million in receipts for city capital projects during 2005. ISales tax receipts are expected to grow at a 5% rate in 2006. The City received $16.8 million in sales tax in 2005. IThe City contracts with Spokane County for a majority of city services including public • safety and street maintenance. Parks maintenance is provided by a private landscape • I maintenance firm. This has allowed the City with a population of 85,010, to hold the number of full-time employees near 60. A moderate cost increase is expected in service contracts in 2006. . IThese factors were considered when the City adopted the 2006 budget. No general fund tax increases were made in 2005, nor were any anticipated in the 2006 budget. Expenditures were budgeted at levels to maintain services at the 2005 level. 1 REQUESTS FOR FINANCIAL INFORMATION IThis 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 I this report or need would like to request additional information, contact the City's Finance Department, 11707 E. Sprague Ave, Suite 106, Spokane Valley, Washington 99206. I • I I I I I I 1 17 1 1 1 1 1 1 basic 1 Financial Statements 1 1 1 1 1 1 1 1 1 i 1 1 1 I 1 1 1 1 1 Government-Wide 1 Financial Statements 1 1 1 1 1 1 1 1 1 1 I I Statement of Net Assets December 31, 2005 Primary Government Governmental Business Type Activities Activities Total Assets: Current assets: • I Cash, cash equivalents and • pooled investments $ 22,657,004 $ 1,212,287 $ 23,869,291 Receivables(net): I Taxes 4,325,621 70,480 4,396,101 Accounts 1,298,731 - 1,298,731 Internal balances (113,816) 113,816 • - Total current assets 28,167,540 1,396,583 • 29,564,123 Capital assets(net of accumulated I depreciation): Land 1,597,585 - 1,597,585 Building and system 9,797,700 - . 9,797,700 I Improvements other than buildings 814,569 - 814,569 Machinery&equipment 644,467 - 644,467 Infrastructure 45,292,497 - 45,292,497 Construction in progress 7,179,352 - 7,179,352 Total capital assets 65,326,170 - 65,326,170 Total assets 93,493,710 1,396,583 94,890,293 I . Liabilities: • Current liabilities: . Accounts payable 516,216 15,667 531,883 Taxes payable 26,071 - 26,071 Accrued liabilities 217,298 - 217,298 • Bonds&deposits payable 93,524 103,520 197,044 I Other current liabilities 1,354,083 - 1,354,083 Total current liabilities 2,207,192 119,187 2 326,379 Noncurrent liabilities: I Due within one year 175,000 - 175,000 Due in more than one year 9,122,808 - 9,122,808 Total noncurrent liabilities 9,297,808 - 9,297,808 ITotal liabilities 11,505,000 119,187 11,624,187 Net assets: Invested in capital assets net of related debt 56,028,362 - 56,028,362 Restricted for III Capital Projects 7,248,194 - 7,248,194 Unrestricted 18,712,154. 1,277,396 19,989,550 Total net assets $ 81,988,710 $ 1,277,396 $ 83,266,106 I The notes to the financial statements are an integral part of this statement. I 18 • Statement of Activities For the Year Ended December 31,2005 • Program Revenues Net(Expenses)Revenue and Changes in Net Assets . Operating ' Capital Primary Governement Charges for Grants and Grants and Governmental. Business-type PunctionslProurams Expenses Services, Contributions, Contributions Activities Activities, Total Primary Government: - Government activities: General government $ 3,471,165 $ - $ - $ - $ (3,471,165) $ - $ (3,471,165) . Public safety 15,934,473 1,180,018 - - (14,754,455) - (14,754,455) Physical environment 986,414 106,324 - - (880,090) • - (880,090) Transportation 14,943,598 - - 1,369,193 (13,574,405) - (13,574,405) Economic environment • 2,019,995 3,102,880 84,284 - 1,167,169 - 1,167,169 Mental and physical health 44,174 - - - (44,174) - (44,174) Culture and recreation 3,784,970 414,257• . - 23,680 (3,347,033) - (3,347,033) Interest on long-term debt 449,980 - - - (449,980) - (449,980) Total governmental activities 41,834,769 4,803,479 84,284 1,392,873 (35,354,133) - •(35,354,133) • Business-type activities: _ Stormwater Management 1,022,193 1,252,006 - - - 229,813 229,813 . '0 Total business-type activities 1,022,193 1,252,006 - - - 229,813 229,813 Total primary government .$42.1.65.L...3982. ..$..635 $ 84,284 L.:12...6.32 (35,354,133) 229,813 (35,124,320) . General Revenues: Taxes Property taxes . 9,549,157 • - 9,549,157 Sales and use tax • 18,647,655 - 18,647,655 Excise taxes 5,740,523 - 5,740,523 Other taxes 1,533,991 - 1,533,991 Loss on disposal of capital assets (62,142) - (62,142) Investment earnings 562,659 35,586 598,245 Transfers 257,692 (257,692) - Total general revenues and transfers 36,229,535 (222,106) 36,007,429 Change in net assets 875,402 7,707 883,109 Net assets at beginning of year 81,113,308 1,269,689 82,382,997 . Net assets at end of year $ 81,988,710 Li.1,277,396 $822.664199, The notes to the financial statements are an integral part of this statement. -MI-- -I MI I- -NM- --MN 1 - iMil - MI - won -iimi_ _illi- -mei- me - MIMI — MN _'- --1111111- r - 1 1 1 I . 1 I Fund Financial Statements I . 1 1 I 1 I I I I 1 I I 1 I • . Balance Sheet Governmental Funds December 31,2005 I Street Other Total General Street Capital Governmental Governmental Fund Fund Projects Funds Funds I Assets: Cash,cash equivalents and pooled investments $ 5,939,973 $ 3,863,896 $ 1;315 $ 12,100,086 $ 21,905,270 Receivables(net) I Taxes 2,054,663 115,501 - 149,411 185,471 2,355,635 Accounts 18,887 161,661 805,128 1,135,087 Interfund loan receivable - • 397,432 - - 397,432 I Due from other funds 861,500 2,879 740,459 544,970 2,149,808 Due from other governments 159,508 - - - 159,508 Total assets $ 9,034,531 $ 4,541,369 $ 891,185 $ 13,635,655 ,$ 28,102,740 - I Liabilities and fund balances: Liabilities: Accounts payable 9,114 461,698 - 40,112 510,924 Taxes payable 25,160 911 - - 26,071 I Interfund loan payable - - - 397,432 397,432 Due to other funds 67,869 48,803 540,741 1,674,081 2,331,494 Due to other governments 1,354,083 - - - 1,354,083 Bonds&deposits payable 93,524 - - - 93,524 Other accrued liabilities 177,443 6,454 13,564 - 197,461 Deferred revenues 259,838 115,501 331,867 5,125 712,331 Total Liabilities 1,987,031 633,367 886,172 2,116,750 5,623,320 I Fund Balances: Reserved for. - CenterPlace Operating - - - - Unreserved,reported in: General Fund 7,047,500 - - 7,047,500 Special Revenue - 3,908,002 - 4,275,724 8,183,726 Capital Projects - - 5,013 7,243,181 7,248,194 Total fund balances 7,047,500 3,908,002 5,013 11,518,905 22,479,420 Total liabilities&fund balances $ 9,034,531, $ 4,541,369 $ 891,185 $ 13,63 5,655 $ 28 102,740 I I I 20 The notes to the financial statements are an integral part of this statement. Reconciliation of Total Governmental Fund Balances to I Net Assets of Governmental Activities For the Year Ended December 31,2005 Total 9 ovemment fund balances $ 22,479,420 1 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 64,981,928 c therefore are not reported in the funds. 1 These assets consist of: Land 1,597,585 Construction in progress 7,179,352 Buildings 10,580,288 Improvements other than buildings 2,123,571 Machinery and equipment-General Government 403,057 Infrastructure 204,266,709 . Less: Accumulated Depreciation (161,168,634) 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. 1,974,122 These revenues consist of. Sales and use tax 1,778,805 • Excise tax 11,000 Other taxes 180,181 Investment earnings • 4,136 Long-term liabilities, including bonds payable are not due and payable in the . � (8,108,375) ' current period and therefore are not reported in the funds. These long-term liabilities consist of: I Bonds payable (9,174,632) Accrued interest (19,837) Compensated absences - (123,176) Deferred revenue 1,209,270 1 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. . 661,615 Net assets of governmental activities $ 81,988,710 The notes to the financial statements are an integral part of this statement. 211 I I Statement of Revenues,Expenditures,and Changes in Fund Balances Governmental Funds For the Year Ended December 31,2005 Street Other Total • General Street - Capital Governmental Governmental I Fund Fund Projects Funds Funds Revenues: Taxes $ 27,377,073 $ - $ 2,885,613 30,262,686_ 2,406,520 Licenses and permits 2,406,520 I 147,028 1,623,055 4,607,847• Intergovernmental revenues 1,309,330 1,528,434 - - 895,974 • Charges for services 895,974 - _ - 1,180,016 Fines and forfeitures 1,180,016 Miscellaneous 448,841 104,052 5,013 405,870 963,776 ITotal revenues 33,617,754 1,632,486 152,041 4,914,538 40,316,819 Expenditures: I Current • - - 2,712,687 General government 2,712,687 - 15,926,633 - Public safety 15,926,633 - - 953,622 Physical environment • 953,622 - - - 2,953,622 I Transportation 34,300 2,891,865 - - Economic environment 1,787,569 250,014 2,037,583 Mental and physical health 44,174 - - - _ 44,174 Culture and recreation 3,642,988 - 3,642,988 Debt Service: - - 165,000 165,000 Principal - - - 430,143 430,143 Interest rest - Capital Outlay 191,145 - 997,977 4,903,027 6,092,149 I Total expenditures 25,293,118 2,891,865 997,977 5,748,184 34,931,144 Excess(deficiency)of revenue • over(under)expenditures 8,324,636 (1,259,379) (845,936) (833,646) 5,385,675 I Other financing sources(uses): Contributions - - 23,680 - 23,680 • Transfers in 187,100 2,000,000 825,448 5,073,264 8,085,812 Transfers out (6,257,696) (140,516) - (1,555,807) (7,954,019) I . Total other financing sources(uses) (6,070,596) 1,859,484 849,128 3,517,457 155,473 Net change in fund balance 2,254,040 600,105 3,192 2,683,811 5,541,148 IFund balance-beginning . 4,793,460 3,307,897 1,821 8,835,094 16,938,272 Fund balance-ending $ 7,047,500- $ 3,908,002 $ 5,013 $ 11,518,905 $ 22,479,420, I • I The notes to the financial statements are an integral part of this statement. 22 I . Reconciliation of the Statement of Revenues,Expenditures,and Changes in Fund Balances I Governmental Funds to the Statement of Activities For the Year Ended December 31,2005 Net change in fund blances-total governmental funds $ 5,541,148 ' 1 Amounts reported for governmental activities in the statement of activates are different because: i 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. (6,937,697) • This is comprised of: outlays Capital s 5,634,320 ' P Y Current year depreciation (12,572,017) The net effect of various miscellaneous transactions involving capital assets (291,391) (i.e.,sales,trade-ins,and donations)is to decrease net assets. Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds. 2,686,453 1 This is comprised of: Deferred taxes 712,331 Sales and use tax 1,778,805 Excise tax 11,000 Other taxes 180,181 Investment earnings 4,136 • Bond proceeds provide current financial resources to governmental 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. 169,845 This is comprised of: I Repayment of long-term debt 169,845 1- Some expenses reported in the statement of activities do not require the use I of current financial resources and therefore are not reported as expenditures in the governmental funds. (143,013) r This is comprised of: I Accrued interest expense (19,63 Accrued compensating absence expense (123,176) internal service funds are used by management to charge the cost of certain activities, such as equipment rental,self-insurance,information technology and facility services to the individual funds. The net revenue(expense)of these internal service funds is reported with governmental activities. (149,943) I Change in net assets of governmental activities $ 875,402 • The notes to the financial statements are an integral part of this statement ' I 231 I . I General Fund Statement of Revenues,Expenditures,and Changes in Fund Balances Budget and Actual For the Year Ended December 31,2005 • Variance with Final Budget Budgeted Amounts Actual Amounts Positive Original Final_ Budgetary Basis (Negative) Revenues: ' Taxes $ 23,860,316 $ 24,858,316 $ 27,377,073 $ 2,518,757 Licenses and permits 1,415,491 2,015,491 2,406,520 391,029 Intergovernmental revenues 1,256,709 1,256,709 1,309,330 52,621 Charges for services 514,057 528,801 89.5,974 367,173 I Fines and forfeitures 1,137,052 1,137,052 1,180,018 42,964 Miscellaneous 37,400 37,400 448,841 411,441 Total revenues 28,221,025 29,833,769 33,617,754 3,783,985 IExpenditures: • Current General government 4,643,232 5,843,977 2,712,687 3,131,290 I Public safety 15,711,424 15,711,424 15,926,633 (215,209) • Physical environment 842,908 914,408 953,622 (39,214) Transportation 36,000 36,000 34,300 1,700 Economic environment 1,634,116 1,710,866 1,787,569 (76,703) I Mental and physical health 44,000 44,000 4,2 44,174 3,642,988 (174) Culture and recreation 4,183,635 23,635 42,988 580,647 Debt service: Principal 1,259,105 - _ - Interest 75,000 - Capital outlay 78,7.45 250,000 191,145 58,855 • Total expenditures 28,508,165 28,734,310 25,293,118 3;441,192 Excess(deficiency)of revenue over(under)expenditures (287,140) 1,099,459 8,324,636 7,225,177 Other financing sources(uses): I Transfers in 287,140 272,396 (5,156,105) 187,100 (85,296) Transfers out - (6,257,696) (1,101,591) Total other financing sources(uses) 287,140 (4,883,709) • (6,070,596) (1,186,887) INet change in fund balance - (3,784,250) 2,254,040 6,038,290 Fund balance-beginning - 3,784,250 4,793,460 1,009,210 IFund balance-ending $ - $ - . $ 7,047,500 $ 7,047,500 IIi The notes to the financial statements are an integral part of this statement. 24 • I Street Fund Statement of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual For the Year Ended December 31, 2005 • Variance with Final Budget Actual Amounts Bud eted Amounts ts Posi Ne a Original Final . Budgetary Basis e I Revenues: $ _ $ _ $ - $ Taxes 1,528,434 (915,619) �' 1,203,004 2,444,053 25,619 Intergovernmental revenues 75,000 75,000 104,052 Miscellaneous 2,519,053 1,632,486 886,567 Total revenues 1,278,004 I Expenditures: Current: 3150,926 5,636,018 2,891,865 2,744,153 ' Transportation 2,891,865 2,744,153 � 3,150,926 5,636,018 Total expenditures Excess(deficiency)of revenue 3,116,965 (1,259,379) 1,857,586 over(under) expenditures (1,872,922 Other financing sources (uses): 1,284,105 3,284,105 2,000,000 (1,284,105) Transfers in 167,140 (140,516) 26,624, Transfers out 167,140 ( 1,257,481 ` 1,116,965 3,116,965 1,859,484 Total other financing sources(uses) . 1 600,105 600,105 Net change in fund balance (755,957) - - - .3,307,897 - ' Fund balance-beginning _ $ 3,908,002 $ 600,105 Fund balance-ending = 7 � � I I II • The notes to the financial statements are an integral part of this statement. • • • 25 I . IStreet Capital Projects.Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended December 31, 2005 • Variance with Final Budget Budgeted Amounts Actual Amounts Positive Original Final Budgetary Basis (Negative) Revenues: I intergovernmental $ - $ - $ 147,028 $ 147,028 Miscellaneous - - 5,013 5,013 Total revenues - - 152,041 152,041 • I Expenditures: Capital outlay 933,000 4,262,330 997,977. 3,264,353 ITotal expenditures 933,000 4,262,330 997,977 3,264,353 Excess(deficiency)of revenue I over(under) expenditures (933,000) (4,262,330) (845,936) 3,416,394 • , Other financing sources (uses): I Contributions - 993,000 2,987,030 23,680 (2,963,350) Transfers in 1,275,300 825,448 (449,852) Total other financing sources(uses) 993,000 4,262,330 849,128 (3,413,202) Net change in fund balance - - 3,192 3,192 Fund balance-beginning - - 1,821 - IFund balance-ending $ - $ - $ 5,013 $ 3,192 I I I • 1 H . • Il 26 f 1 I Statement of Net Assets Proprietary Funds ' December 31, 2005 . Business-type Activities-Enterprise Funds, Non Major Fund Governmental Activities- Stormwater Internal Service Management Funds Assets: Current assets Cash,cash equivalents and pooled investments $ 1,212,287 - $ 751,734 Assessments receivables(net) 70,480 Due from other funds 113,816 67,869 Total current assets 1,396,583 819,603 Capital assets: ' Machinery&Equipment- - 698,300 Less accumulated depreciation - (354,057) Total capital assets(net of accumulated depreciation) - 344,243 Total assets • 1,396,583 1,163,846 Liabilities: Current Liabilities: Accounts payable 15,667 5,292 tiles 103,520 1 Deposits and other pays - 496,939 119,187 502,231 Deferred revenue - Total liabilities I f Net Assets: 344,243 Invested in capital assets - Unrestricted 1,277,396 317,372 . Total net assets $ 1,277,396 $ 661,615 I I I The notes to the financial statements are an integral part of this statement. 271 I -Statement of Revenues.Expenses,and Changes in Fund Net Assets Proprietary Funds For the Year Ended December 31,2005 Business-type Activities-Enterprise Funds ' ` Non Major Governmental • Fund Activities- - Stormwater internal Service Management - Funds , Operating Revenues: • Charges for services $ 1,252,006 $ 211,270 Total operating revenues 1,252,006 211,270 Operating Expenses: Operations 1,022,193 110,314 . Depredation - 195,813 Total Operating expenses 1,022,193 306,127 I, Operating income 229,813 (94,857) Nonoperating revenues(expenses):_ . Interest income 35,586 7,056 Loss on disposal of assets • Total nonoperating revenues(expenses) 35.586 (55,086) , income before contributions and transfers 265,399 (149,943)• I Contributions and transfers: • Transfers in - - Transfers out (257,692) - Capital Contributions - 125,899 - Change in net assets 7,707. (24,044) Net assets beginning of the year 1,269,689 685,659 Net assets end of year $ 1,277,396 $ 661,615 1 1 • - . I • -The notes to the financial statements are an integral part of this statement. . • i . . 28 (' Statement of Cash Flows i Proprietary Funds • For the Year Ended December 31,2005 • 1 Non Major - , Fund Governmental • Activities- 1 Storrriwater• infernal Service , Management Funds { . Cash flows from operating activities: - • - , Cash received from customers and users • $ • 1,255,132 $ 708,209 I r . • Receipts from interfund services provided - - - Payments to suppliers and for services • (1,046,484) (119,685)• Net cash provided(used)by operating activities 208 64 , 8 588,524 - Cash flows from noncapital financing activities: • Transfers in(out) (233,384) - c Net cash provided(used)by noncapital • and related financing activities (233,384) - , Cash flows from capital and related financing activities: il • Acquisition of capital assets (24,308). - - Net cash provided(used)by capital andrelated financing activities (24,308) - . Cash flows from investing activities: • e - Interest received 35,586 7,056 ' Net cash provided(used)by investing activities 35,586 7,056 Net increase in cash&cash equivalents (13,458) 595,580 - . - Cash&cash equivalents,January 1,2005 1,225,745 156,154 r Cash&cash equivalents,December31,2005 $ 1,212,287 $ 751,734 I Reconciliation of operating income to net cash provided ' (used)by operating activities: ` Operating income(loss) 229,813 $ (34,857) I Adjustments to reconcile operating income to net . cash provided(used)by operating activities: I - Depreciation - 195,813 - , Changes in assets and liabilities: (Increase)decrease in assessments receivable (5,762) - (Increase)decrease in due from other funds (59,811) (12,663) - Increase(decrease)in accounts payable (27,012) (2,000) . Increase(decrease)in deposits/other payables 71,420 - Increase(decrease)in due to other government • 5,292 • Increase(decrease)in deferred revenue - , 496,939 . Total adjustments (21,165) 683,381 Net cash provided(used)by operating activities $ 208,648 $ 588,524 I Noncash investing,capital,and financing activities: . Contributions of capital assets from other funds - 125,899 - Transfer of capital assets to other funds 24,308 - • The notes to the financial statements are an integral part of this statement 29! - - I I I I CITY OF SPOKANE VALLEY NOTES TO THE FINANCIAL STATEMENTS IFor the year ended December 31, 2005 I INote Page II SUMMARY OF ACCOUNTING POLICIES 31 2 STEWDARDSHIP, COMPLIANCE AND ACCOUNTABLILTY 35 3 DEPOSITS AND INVESTMENTS 37 I 4 PROPERTY TAXES 37 5 CAPITAL ASSETS AND DEPRECIATION 38 6 PENSION PLANS 40 I 7 RISK MANAGEMENT 42 8 INTERFUND BALANCES AND TRANSFERS 43 9 SHORT-TERM DEBT 44 I 10 LONG-TERM DEBT 44 11 SUBSEQUENT EVENT 46 12 CONTINGENCIES AND LITIGATION 46 I ll I I I I 1 30 NOTES TO THE FINANCIAL STATEMENTS December 31, 2005 { 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. On May 10, 2005 an election was held that annexed library services to the Spokane County Library District. The district will assume responsibility for all city library services on January 1,2006. The accounting and reporting policies of the City relate to the funds included in the accompanying financial statements which 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 31 I 1 incurred, regardless of the 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 I . 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 I 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 I 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. IProperty 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 I 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 IThe city reports the following major governmental funds: The General Fund is the City's primary operating fund. It accounts for all financial resources of . I the general government, except those required to be accounted for in another fund. maintenance of all city The Street Fund is responsible for the ma ty streets and bridges. Also, construction activities for city streets are coordinated through this fund. The Street Capital Projects Fund accounts for monies used to finance the six year transportation improvement plan. Revenues are transfers from the Arterial Street Fund, Capital Projects Fund, I Special Capital Projects Fund and Street Bond Fund. The city reports the following non major proprietary fund: I 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 IAdditionally,the government reports the following fund types: Special revenue funds account for arterial street construction and maintenance, hotel/motel tax I revenues and expenditures, CenterPlace operating reserve, Service level stabilization reserve, winter weather reserve and revenues&expenditures for paths and trails maintenance. I 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 I 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, equipment/vehicle replacement and risk Imanagement services provided to other departments on a cost reimbursement basis. Private-standards of accounting and financial reporting issued prior to December 1, 1989, generally I 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 32 I 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. I I 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,g eneral revenues include all taxes. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principle operating revenues of the stormwater enterprise fund is a stormwater assessment fee. Operating expenses of enterprise funds and internal service funds include the cost of sales and services, administrative expenses, and depreciation on capital assets.All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. When both restricted and unrestricted resources are available for use, it is the City's policy to use I 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 I funds. 2. investments—(Refer to Note 3). 1 3. Receivables and Payables ( p Taxes receivable consists property p e rty taxes and related interest and penalties. Accrued interest I receivable consists of amounts earned on investments, notes, and contracts. Accrued interest payable consists of amounts owed on notes, loans, and contracts. i ndividuals or I - Customer accounts receivable/payable consist of amounts owed from/to private organizations for goods and services including amounts owed. If the transactions are with another governmental unit, it is accounted for within"due from/to other governments". Receivables have been reported net of estimated uncollectible accounts. Because property taxes and special assessments are considered liens on property, no estimated uncollectible amounts are established. Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to either "due to/from other funds" (i.e., the current portion of interfund loans) or "interfund loans receivable/payable" (i.e., the non-current portion of interfund • loans). All other outstanding balances between the governmental activities and business-type activities are reported in the government-wide financial statements as "internal balances". (Refer to _ Note 8.) 1 331 I Advances, between funds, as reported in the fund financial statements, are offset by a fund balance reserve account in applicable governmental funds to indicate that they are not available for appropriation and are not expendable available financial resources. In the government-wide financial statements, and proprietary fund types in the fund financial I 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 . IReported 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 I purchased (purchase method). Certain payments to vendors reflect costs applicable to future accounting periods and are recorded • as prepaid items in both the government-wide and fund statements. I 5. Capital Assets and Deprecation (Refer to Note 5). • I 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 deferred charges. Long-term debt outstanding at year end is outlined in Note 10. 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 IIssuance 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. 1 7. Deferred Revenues The deferred revenues account is used to offset receivables established in the governmental fund I 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 I 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. 1 8. Compensated Absences. Compensated absences are absences for which employees will be paid, such as vacation and sick I leave. Vacation pay, which may be accumulated up to 360 hours, is payable upon resignation, retirement, or death. All vacation pay is accrued when incurred in the government-wide, proprietary and fund financial statements. An additional amount has been accrued for the city's share of deferred compensation and Medicare taxes related to the vacation accrual. A liability for these I 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 I 34 r I 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 t a specific purpose. Designations of fund balance represent tentative management plans that are subject to change. E. Revenues, Expenditures,and Expenses I r 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 I 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 r interfund transfers. For the purposes of the Government-wide Statement of Activities, all interfund transfers between individual governmental funds have been eliminated. r 4. Expenses/Expenditures I 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,wastewater, or stormwater). Certain indirect costs are included in program t 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. I 5. Operating and Nonoperating Revenues and Expenses t Operating revenues and expenses for proprietary funds are those that result from providing services I 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 t financing, non-capital financing, or investing activities. All revenue and expenses not meeting this atin revenues and expenses. I definition are nonoperating xP NOTE 2-STEWARDSHIP,COMPLIANCE AND ACCOUNTABILITY I A. Scope of Budget Annual appropriated budgets are adopted for all funds on a basis consistent with generally accepted I accounting principals. Legal budgetary control is established at the fund level. Subsidiary revenue . and expenditure ledgers are used to compare the budgeted amounts with actual revenues and . expenditures. As a management control device, the subsidiary ledgers are used to monitor expenditures for individual functions and activities by object class. B. Procedures for Adopting the Original Budget The City's budget procedures are mandated by the Revised Code of Washington 35A.33. The following are key procedural steps in the City's budget development process. Note that the process and dates are for the 2007 budget process and may be changed for future processes: I 351 I I • In April, the official"budget call" required by State law is made to all department directors or I 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 I The City Council and City management staff discuss City goals and priorities and reaffirm overa ll Ci ty priorities, vision,and mission at a mid-year retreat. Additional policy guidance is provided throughout the year. I • In July the Finance department submits the preliminary budget to the City Manager. • In August the City Manager submits estimates on 2006 revenues and preliminary 2007 Irevenues and expenditures to Council. • During September, preliminary budget documents were prepared, printed and filed with City I 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 31st the City Council, by a majority vote, will adopt the budget by ordinance, establishing the budget appropriation for the year. . • The approved budget is published and distributed during the first quarter of the following 1 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 I maybe needed. • IC. Amending the Budget • The budget, as adopted, constitutes the legal authority for expenditures. The City's budget is I 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. . I The City's budget was amended two times during the fiscal year. The financial statements contain budget information. The original budget is the first complete appropriated the original and final g budget The final budget is the original budget adjusted by all reserves, transfers, allocations, I 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. E. Deficit Fund Balances I As of December 31, 2005 a deficit fund balance of $52 exists in the Barker Bridge Construction Fund. This fund accounts for the construction costs of the Barker Bridge reconstruction which is financed through a federal grant. The deficit will be eliminated when the grant funds are received. 1 36 • t il NOTE 3-DEPOSITS AND INVESTMENTS II . A. Deposits The City's deposits and certificates deposit of de osit 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. c B.Investments 1 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. I The Washington Local Government Investment Pool operates in a manner consistent with the c 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 1 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 I 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 31,2005. I C.Deposit and Investment Reconciliation ` Amounts reported in the fund statements are as follows: ,I Fair Value Carrying Cash Amount Investments Equivalents Investments Not Subject to Credit Risk ■ State Investment Pool $ 18,615,404 - $ 18,615,404 Money Market Account 4,492,121 - 4,492,121 1 Total Investments Not Subject to Credit Risk $ 23,107,525 - $23,107,525 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 1 i 37; I • Iare, 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 County values are established by the Coun 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 • IOctober 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 I 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 I The tax rate for general City operations is limited by State law(RCW 84.52.043)to$3.60 per$1,000 of assessed valuation, deducting from there the levy of$1.50 by the Spokane County Fire Districts #1 and#8, which leaves the City with the authority to levy$2.10 for its own purposes.This amount Imay 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, Ieach 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 • I 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 Ito RCW 84.55.050. A simple majority vote is required. (3) The City may voluntarily levy taxes below the legal limit. IFor 2005,the City levied $9,555,798 on an assessed valuation of$4,533,703,249. NOTE 5-CAPITAL ASSETS AND DEPRECIATION I 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-type columns in the government-wide financial statements. The City defines capital assets as assets I with an initial, individual cost of more than$5,000 and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Other donated assets are recorded at estimated fair market value at the date of donation. I 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. II 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 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 • I contributions on the statement of activities. The following schedule details the assets transferred during the year ended December 31, 2003. • I 38 i' t Capital Assets Donated From Spokane County I Historical Accumulated Depreciated Cost Depreciation Cost .infrastructure - Roadways $187,732,531 $127,418,027 $60,314,504 Signs,signals,beacons 9,056,000 4,528,000 4,528,000 Crosswalks 130,084 13,008 117,076 Bridges 5,633,979 2.808.112 2,825,867 Total Infrastructure 202,552,594 134,767,147 67,785,447 1 • Parks 1,548,655 Land 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 $207,126,886 $136,439,272 $70,687,614 • A summary of changes in governmental capital assets follows: Beginning Ending Balance Balance Governmental activities: 01/01/05 Increases Decreases 12/31/05 I Capital assets,not being depreciated: - $1,597,585 Land $ 1,597,585 $ - Construction in progress 11,186,032 6.211.415 10,218,095, 7,179,352 Total capital assets,not being depreciated 12,783,617 6,211,415 10,218,095 8,776,937 I • Capital assets,being depreciated: 10,580,288 - Buildings and leasehold improvements 944,297 9,635,991 - . Improvements other buildings 2,123,571 2,123,571 - Infrastructure 203,684,605 582,104 204,266,709 Machinery and equipment 904.722 315,903 119.269, 1,101,356, Total capital assets,being depreciated 207,657,195 10,533,998 1 19,269 21 8,071,924 Less accumulated depreciation for. 782,587 Buildings and leasehold improvements 622,841 159,746 1,309,002 Improvements other buildings 1,156,427 152,575 - Infrastructure 146,959,405 12,014,807 158,974,212 I Machinery and equipment 269.127 , 244,889 , 57.127 456,889, Total accumulated depreciation 149,007,800 12,572,017 57,127 161,522,690 Total assets being depreciated,net 58,649,395 , 10.533,998 12.634.159 56,549,234 1 Governmental activities capital assets, net $ 71,433,012 $16,745,413 122.13.52.254---S-6-5.32-6-M• 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 life 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 (39 , I Computer Equipment 3-5 years I . P Depreciation expense was charged to functions/programs of the primary government as follows: Governmental Activities General government services $ 363,344 I Public safety 10,023 Physical environment 14,105 Transportation . 12,014,808 I Economic environment 16,292 Culture and recreation 153,445 Total depreciation—governmental activities $ 12,572,017 • Construction commitments I The City of Spokane Valley has active construction projects as of December 31,2005. The projects include various street construction'projects. At year end the City's commitments with contractors are as follows: • Remaining Spent-to-Date, Commitments Various street construction projects $ 7.179,352 $ 648,937 IThe various street construction projects are being funded by state and local grants, as well as, existing resources in various City Funds. INOTE 6-PENSION PLANS Substantially all City of Spokane Valley full-time 8nd qualifying part-time employees participate in I one of the following statewide retirement systems administered by the Washington State Department of Retirement Systems, under cost-sharing multiple-employer public employee defined benefit and defined contribution retirement plans. The Department of Retirement Systems(DRS), a department with the primary government of the State of Washington, issues a publicly available I 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 IPlan Description, PERS is a cost-sharing multiple-employer retirement system comprised of three separate plans for I 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 I 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 I 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 I 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 1 40 and employer and employee contributions. Retirement benefit provisions are established in state ` statute an d ma y be amended by the State Legislature. 1 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 ri compensation months. If qualified, after reaching the age of 66 a cost-of-living allowance is granted compens q 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. I 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 consec P 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 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 component, c and member contributions finance a defined contributions component. The defined benefit portion it 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 1,168 participating employers in PERS. Membership in PERS consisted of the following as of the latest actuarial valuation date for the plans of September 30, 2004: I Retirees and Beneficiaries Receiving Benefits 66,896 Terminated Plan Members Entitled to But Not Yet Receiving Benefits 1 21,031 Active Plan Members Vested ,039 Active Plan Members Nonvested 53,217, Total 244,183 . 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 41!' ` I I 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 I Employer* 2.44% 2.44% 2.44%"`* Employee 6.00% 2.25% I * The employer rates include the employer administrative expense fee currently set at 0.19%. ** Plan 3 defined benefit portion only. ***Variable form 5.0%minimum to 15.0%maximum based on rate selected by PERS 3 member. I . 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. • I PERS Plan 1 PERS Plan 2 PERS Plan 3 2005 Employer Contributions $1,765 $33,018 $10,185 2004 Employer Contributions 1,284 18,910 7,315 2003 Employer Contributions 276 10,567 3,448 I NOTE 7—RISK MANAGEMENT I 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 I damage coverage. The City uses the Washington State Department of Labor and Industries Insurance Services for coverage to pay for medical care for job-related injuries and illnesses, and wage replacement when the injury or illness is serious enough to miss work. The City is self-insured I for unemployment compensation benefits. account for, and finance the liability and unemployment The Risk Management Fund is used to acco , 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 I 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. ° INew 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 I membership. Liability coverage is written on an occurrence basis, without deductibles. Coverage includes general, automobile, police professional, public officials' errors and omissions, stopgap, and Iemployee 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 Idetermines the limits and terms of coverage annually. Insurance coverage for property, automobile physical damage, fidelity, inland marine, and boiler and I 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 and $500,000 effective July 1, 2004 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. I 42 ( WCIA is fully funded by its members,who make annual assessments on prospectively rate basis, as I determined by an outside independent actuary. The assessments cover loss, loss adjustment, and administrative expenses. As outlined in the Interlocal, WCIA retains the right to additionally assess the membership for any funding shortfall. An investment committee, using investment brokers produces additional revenue by investment of WCIA's assets in financial instruments which comply with State guidelines. These revenues directly offset portions of the membership's annual assessment. A Board of Directors governs WCIA which is comprised of one designated representative from each member. The Board elects an Executive Committee and appoints a Treasurer to provide general policy direction for the organization. The WCIA Executive Director reports to the Executive Committee and is responsible for conducting the day to day operations of the WCIA. The City is self-insured on a reimbursement basis for unemployment compensation. The City incurred$5,392 in claims for unemployment compensation in 2005. I 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 the (CDBG Block Grant Fund) owed Fund 101 I Finance Director. At December 31, 2005, Fun d 306 ( Street Fund) $400,312 in principal and accrued interest Due to other funds and due from other funds result from goods issued, work performed or services rendered to or for the benefit of another fund of the same government The amount of interfund loans payable within one year is also included in due to and due from other funds. Due to other fund and due from other fund balances at December 31,2005 were: Due From Due To Other Funds, Other Funds General Fund • $ 861,500 $ 67,869 Street Fund 2,879 48,803 Street Capital Projects Fund 740,459 540,740 Nonmajor governmental funds 544,970 1,674,081 Proprietary funds 113,816 - Internal service funds 67,869, - Total government wide $ 2,331,493 $2,331,493 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 collecting the receipts to the debt service fund as debt service I to debt service from the funds g P 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. ( ill'il 43 transfer activity for the Interfund tra ty year is as follows: Transfers Out Street I Nonmajor Stormwater General Capital Street Governmental Management Total Fund Projects Fund Funds Fund ' Transfers In: General Fund $ 187,100 $ - $ - $ 91,713 $ 68,156 $ 27,231 Street Fund 2,000,000 2,000,000 - - - - - Arterial Street Fund 134,941 - - 134,941 - CenterPlace Op.Res. 300,000 300,000 - - Service Level Stabilization 2,306,105 2,306,105 - • - - Winter Weather Reserve 500,000 500,000 - 85,090 - Debt Service Fund 185,090 - 48,803 570,492 185,090 206,153 Street Capital Projects 825,448 - - 81 28 - Street Bond Fund 81,028 - _ 181,028 - CD Block Grant Fund 127,986 - 386,114 - Capital Grants Fund 388,114 - - - - Perim Capital Projects 550,000 550,000 - - - - Civic Building Reserve 500,000 500,000 - - I 24.308 E.R.&R.Fund 125.899 -„ 101.591 - - • Total $8,211,711, 3 6,2 7,695 3_ $140,516 ' .555 807 S 257 .m NOTE 9—SHORT-TERM DEBT As of December 31, 2005,the city had no short-term debt NOTE 10—LONG-TERM DEBT AND LEASES 1 General Obligation Bonds The City issues general obligation bonds to provide funds for the acquisition and construction of I major capital facilities. General obligation bonds have been issued for governmental-type activities. General obligation bonds are direct obligations and pledge the full faith and credit of the government. General obligation bonds are either created by 315th majority vote of the people and, therefore, I 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: I 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 Iinterlocal 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. I 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% $9,120,000 I 1 44 If I The annual debt service requirements to maturity for general obligation bonds are as follows: Governmental Activities Total I Princi al Interest Requirements, 2006 175,000 414,535 589,535 2007 185,000 411,035 596,035 2008 190,000 406,872 596,872 2009 205,000 401,173 606,173 2010 210,000 395,022 605,022 2011-2015 1,275,000 1,837,113 3,112,113 2016-2020 1,810,000 1,540,545 3,350,545 f 2021-2025 2,530,000 1,011,250 3,541,250 2026-2030 1,880,000 414,750 2,294,750 2031-2033 660.000 65,500 725,500 I $9,120,000 $6,897,795 $ 16,017,795 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 31,2005,the following changes occurred in long-term liabilities: Balance Balance Due Within I Jan. 1.2005 Additions Reductions Dec.31,2005 One Year Governmental Activities: General Obligation Bonds • $9,285,000 $ - . $165,000 $9,120,000 $ 175,000 Compensated Absences 83,843 39,333, - 123.176 Governmental Activity Long-Term Liabilities $ 9,368,843 $ 39,333 $165.000, $9,243,176 $ 175,000 I t Legal Debt Margin I RCW 39.36.020 provides cities with three segments of debt capacity,each equal to two and one-half I 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 2005 for purposes of determining the legal debt I margin is $5,056,951,058. Under State of Washington statutes general obligation indebtedness pursuant to a vote of the electorate is limited to 2Y2% of actual value of taxable property located within the City.Indebtedness without a vote of the people is limited to 1/2% of actual value subject to the limitation that total general purpose indebtedness may not exceed 2%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 f General Purposes Voted and Non-voted Debt—2V2% (1) $ 117,180,600 Utility Voted Debt—2Y2% 126,423,776 Open Space and Park Facilities Voted Debt-2%% 126,423,776 Total Remaining Debt Capacity $370,028,152 t I 451 I r (1) includes$66,611,090 debt capacity for non-voted debt. Leases Capital Leases City no ca The Ci had capital leases as of December 31, 2005. p I Operatina Leases The City entered into a six 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 $15.15 and $16.75 per square foot per annum. Lease payments for the year ended December 31,2005 amounted to$291,636. ISchedule of Minimum Future Rental Payments, I Year Ended Dec. 31 • Amount 2006 $ 296,429 • 2007 305,034 2008 314,091 I 2009 324,491 2010 80.548 Total minimum future rental payments $1.320,593. INOTE 11 —SUBSEQUENT EVENT On February 23, 2006, a building and horse stables at Valley Mission Park sustained fire and water I damage. The City expects to receive approximately $109,000 in insurance proceeds for this damage. The City has not determined whether it will repair damage to the building and horse stables which have a depreciated book value of approximately$87,000. I On July 18, 2006, the City and The Washington State Council of County and City Employees(Local 270-V, AFSCME) signed the first collective bargaining agreement. This agreement is effective July 16, 2006 to December 31, 2006, and includes a 6% wage increase for covered employees. I Additionally, the parties signed a second collective bargaining agreement effective January 1, 2007 to December 31, 2009. This second agreement provides for wage increases of 2.5% on January 1 of each year of the contract for all covered employees INOTE 12-CONTINGENCIES AND LITIGATION In the normal course of governmental operations the City has claims filed against it for various Ilosses 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 I 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 City's of these claims is not likely to have a material imp act on the ty's financial position. I 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. • I 1 46 I 1 I I I . 1 Combining and Individual 1 Fund Statements and Schedules 1 1 1 1 1 1 1 1 1 1 1 I 1 1 1 t 1 Government Funds 1 1 1 1 1 1 1 1 1 1 I . 1 1 t 1 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. • Trails and Paths *Fund — This fund is used to account for the receipt and expenditure of the State-levied motor vehicle fuel tax dedicated to the building and maintenance of trails and paths as per RCW 47.30. HoteUMotel Fund—This fund accounts for the receipt and expenditure of a special P P P excise tax for tourism promotion and the acquisition or operation of tourism related . facilities. i CenterPlace Operating Reserve Fund — This fund was established to provide an emergency revenue source for the recently completed facility. Service Level Stabilization Reserve Fund — This fund was established to provide an emergency revenue source to maintain service levels in the event of a downturn in the local economy. • Winter Weather Reserve Fund —This fund was established to provide emergency services during an unusually harsh winter. Debt Service Funds Debt service funds account for the accumulation of resources for, and the payment • of, general long-term debt principal and interest. Debt Service LTGO 03 Fund — This fund accounts for principal and interest payments made on the Limited Tax General Obligation bonds issued in 2003 for street improvements and the construction of the CenterPlace Community Center. 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 Proiects 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. 47 I 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 systems,st estate. or e excise tax must be used for public works projects or for streets, water sewers. Mirabeau Point Project Fund,—This fund accounts for monies received from bond proceeds to be used for the construction of a multi-use community center and 'acquisition of furnishings. Street Bond Fund—This fund accounts for monies received from the sale of bonds ca for street repair and maintenance. Funds are transferred t o other capital projects I funds as needed. Community Development (CD) Block Grant Fund — This fund accounts for grant monies received as part of the federal community development g rant program. Capital Grants Fund, — This fund accounts for monies received as capital grants from various state and federal programs for street and road projects. I Barker Bridge Construction — This fund accounts for expenditures made for the reconstruction of the Barker Road bridge. Parks Capital Projects Fund — This fund is an allocated reserve of monies s_ specifically designated for the Parks.and Recreation Capital plan. 9 Civic Buildings Capital Projects Fund—This fund is an allocated reserve of monies specifically designated for the future construction of Civic Buildings. I I• I. 48 - , I ICombining Balance Sheet Nonmajor Governmental Funds December 31, 2005 I Total Nonmajor Special Debt Capital Governmental Revenue Service Projects Funds Assets: Cash, cash equivalents and pooled investments $ 4,595,981 $ - $ 7,504,105 $ 12,100,086 Receivables (net) Taxes 26,089 - 159,382 185,471 Accounts - - • 805,128 805,128 Due from other funds - - 544,970 544,970 Total assets $ 4,622,070 $ - $ 9,013,585 $ 13,635,655 Liabilities and fund balances: • I Liabilities: . Accounts payable 22,666 - 17,446 40,112 Interfund loan payable - - 397,432 397,432 I Due to other funds 323,680 - 1,350,401 1,674,081 Deferred revenue - - 5,125 5,125 Total liabilities 346,346 - 1,770,404 2,116,750 IFund balance: Unreserved 4,275,724 - 7,243,181 11,518,905 I Total fund balances 4,275,724 - 7,243,181 11,518,905 ITotal liabilities and fund balances $ 4,622,070 $ - $ 9,013,585 $ 13,635,655 I I The notes to the financial statements are an integral part of this statement. I I 49 I i I Combining Statement of Revenues,Expenditures, and Changes in Fund Balances Nonmajor Governmental Funds For the Year Ended December 31,2005 Debt Capital Total• Special Projects December 31, Revenue Service 2005 Funds Funds Funds Revenues: $ 2,490,870 $ 2,885,613 �.�� $ 394,743 $ 910,555 1,623,055 Intergovernmental revenues 314,755 397,745 321,636 405,870, Total revenues Miscellaneous 84,234 - 793,732 397,745 3,723,061 4,914,538 Expenditures: Current - 250,014 Economic environment 250,014 - Debt service: - 165,000 - 165,000 Principal � 308 430,143 Interest - 417,835 12,_- Bond issue costs _ 4�903,027 4,903,027 Capital outlay - 5,748,184, 250,014 582,835 4,915,335 Total expenditures . Excess(deficiency)of revenue (833,646) over(under)expenditures 543,718 (185,090) (1,192,274) Other financing sources(uses):' _ - Contributions ' 3,241,046 185,090 •• 1,647,128 5,073,264 Transfers in 1203971) (1,555,807) Transfers out . ( , , (351,836) - I Total other financing sources(uses) 2,889,210 185,090 443,157 3,517,457 811 `683 (749,117) 2 749, , , Net change in fund balance 3,432,928 - ( I Fund balance-beginning 842,796 - 7,992,298 8,835,094 Fund balance-ending $ 4,275,724, $ - $ 7,243,181 $ 11,518,905 1 r I I . The notes to the financial statements are an integral part of this statement I 501 '- I . I Combining.Balance Sheet Nonmajor Special Revenue Funds IDecember 31,2005 CenterPlace Service Level Winter Total Non- Arterial Trails lit Paths HotelMotel Op.Reserve Stabilization Weather Res. Major Special Street Fund Fund Fund Fund Fund Fund Revenue Funds Assets: Cash,cash equivalents and I pooled investments $ 1,181,569 $ 15,658 $ 248,848 $ 306,291 $ 2,335,706 $ 507,909 $ 4,595,981 Receivables(net) Taxes - - 26,089 - - - 26,089 Total assets $ 1,181,569 $ 15,658 $274,937 $ 306,291 $ 2,335,706 $ 507,909 $ 4,622,070 I Liabilities and fund balances: Liabilities: Accounts payable - - 22,666 - - - 22,666 I Due to other funds 323,680 - - - - - 323,680 Total liabilities 323,680 - 22,666 - - 346,346 Fund balances: Unreserved 857,889 15,658 252,271 306,291 2,335,706 507,909 4,275,724 ITotal fund balances 857,889 15,658 252,271 306,291 2,335,706 507,909 4,275,724 Total liabilities and fund balances $ 1,181,569 $ 15,658 $ 274,937 $ 306,291 $ 2,335,706 $ 507,909 $ 4,622,070 I • I • I C I The notes to the financial statements are an integral part of this statement. I • I II 1 51 I Combining Statement of Revenues,Expenditures,and I . Changes in Fund Balances Nonmajor Special Revenue Funds For the Year Ended December 31,2005 CenterPlace Service Level Winter Arterial Trails&Paths. HotellMotel Op.Res Stabilization Weather Res r Street Fund Fund Fund Fund Fund Fund Total Revenues: - $ - $ 394,743 Taxes $ - $ 6,914 $ 387,829 $ -- - - 314,755 Intergovernmental revenues 314,755 Miscellaneous 34,063 252 6,118 6,291 29,601 7,909 84,234 Total revenues 348,818 7,166 393,947 6,291 29.601 7.909 793,732 Expenditures: • Current - 250,014 - - - 250,014 Economic environment - - •- 250,014 Total expenditures - - 250,014 - Excess(deficiency)of revenue 6,291 29,601 7,909 543.71 B over(under)expenditures 348,818 7,166 143,933 Other financing sources(uses): 300,000 2,306,105 500,000 3,241,046 ' Transfers in 134,941 - - Transfers out (323,680) - (28,156) Total other financing sources(uses) (188,739) • - (28,156) 300,000 2,306,105 500,000 2,889,210 Net change in fund balance 160,079 7,166 115,777 306,291 2,335,705 507,909 3,432,928 - 842,796 Fund balance-beginning 697,810 8,492 136,494 - { Fund balance-ending $® $ 15,658 $_151.221. $ 30291 $ 2,335,706 $$ 5 9 $ 4,275,724 . The notes to the financial statements are an integral part of this statement. I I i 1 1 I II i I I_ 52 f 1 r MN NM 1 NS r r M■ E 'rte MN - MI NM IN NM In IN • • • • • Combining Balance Sheet Nonmajor Capital Projects Funds December 31,2005 . Total Non- Special Mirabeau Street Bond CD Block Capital Grants Barker Bridge Parks Capital Civic Building Major Capital Capital Projects Capital Projects Point Fund Grant Fund Fund Construction Projects Reserve Capital Res. Protects Funds Assets: • Cash,cash equivalents and pooled investments $ 2,492,968 $ 2,388,457 $ 452,188 $ 1,127,351 $ 30 $ 715 $ 954 $ 555,537 $ 507,909 $ 7,504,105 Receivables(net) • Taxes 79,691 79,691 - - - - - - - 158,382• Accounts - - 154 - 439,850 251,130 113,984 - - 805,128' Due from other funds 186,000 - - - 79,931 279,038 - - - 544,970• Total assets $ 2,758,657 $ 2,446,148 $ 452,340 $ 1,127,351 L....511121.1 $ 530,684 1$_____1:_,...14 948 $ 555,537 $ 507,909 $ 9,013,585 Liabilities and fund balances: Liabilities: Accounts payable - - 2,852 - - 14,584 - - - 17,446 Interfund loan payable - - - 397,432 - 397,432 Due to other funds . 491,959 - - 109,898 122,379 511,165 115,000 - - 1,350,401 Deferred revenue - - - - - 5,125 - - - 5022. Total liabilities 491,959 - 2,852 109,698 519,811 530,864 115,000 - - 1,770,404. • t.l1 Fund balances: W Unreserved 2,266,698 2,446,148 449,488 1,017,453 - - (52) 555,537 507,909 7,243,181 Total fund balances 2,268,898 2,446,148 449,488 1,017,453 - - (52) 555,537 507,909 7,243,181 Total liabilities and fund balances 1........L...6_751,857 $ 2,448,148 .$.___ _,.....452 340 $ 1,127,351 $ 519,611 $ 530,884 $ 114,948 $ 555,537 $ 507,909 $ 9,013,585 • The notes to the financial statements are an Integral paR of this statement • • Combining Statement of Revenues,Expenditures,and Changes in Fund Balances Nonmajor Capital Projects Funds For the Year Ended December 31,2005 Special Street Bond Capital Barker Parks • Civic • Capital Capital Mirabeau Capital CD Block Grants Bridge Capital Bldg.Cap, Projects Projects Point projects Grant Fund, Fund Prolect Project Res Prolect Res Total Revenues: $ - - $ - $ $ - $ 2,490,870 Taxes $ 1,256,560 $ 1,234,310 $ - $ - 439,850 356,711 113,994 - - 910,555-Intergovenmental - '" - - 5,537 _Luca 321,636 Miscellaneous _85,158 54,212 150,688 33,859 909 3,723 081 Total revenues 1,321, 33,859 444,127 356,711 113,994 5,537 7, 716 1 288 522 150,68e3 33, ---- Expenditures: - - _ 12,308 - - - - 12,308 Capital - 559,805 744,825 113,994 - 4,903,027 Capital outlay 3,4_ - _ 4,915,335 Total expenditures - - __IMAM 572,113 7_ 113• tii Excess(deficiency)of revenue (127,986) (388,114) - 5,537 7,909 (1,192,274) over(under)expenditures 1,321,716 1,288,522 (3,333,717) 33, --- Other financing sources(uses): - - - - - - Trans feers rs in -ons - 81,028 127,986 388,114 - 550,000 500,000 1,647,128 Trans 405 894 - 81 028 - - - (1,203,971) Transfers out (624,504) (92,545) - ( ) _(81 ____5511002. 5-_p _lama Total other financing sources(uses) (624,504) (92,545) - (324,866) 1 27.988 307,088 Net change in fund balance 697,212 1,195,977 (3,333,717) (291,007) - (81,028) - 555,537 507,909 (749,117) 81,028 52 7,992,298 Fund balance-beginning 1,569,486 _1250E1 3,783.?05 1,308,460 - , .._-�_-� 52 1....5_522:1 $ 5��9�9 .2.2,2_,_13 � Fund balance-ending $$ 2,266,698 $ 2,446,148 $ 449,488 $ 1,0_17,453 �- in____03) The notes to the financial statements are an integral part of this statement • 11111111 MI NM MI - - r _�_ MN r _ NM - 1 i 1 1 � Schedule of Revenues, Expenditures, 1 and Changes in Fund Balance i Budget & Accrual 1 1 1 1 1 I . 1 1 1 1 1 1 I I Arterial Street Fund Schedule of Revenues, Expenditures, and I Changes in Fund Balances-Budget and Actual For the Year-Ended December 31,.2005 Variance with Final Budget Budgeted Amounts Actual Amounts Positive I Ori final Final Budgetary Basis (Negative) Revenues: 314,755 $ (767,248) Intergovernmental revenues $ 562,465. $ 1,082,003 $ 14055 30,248, 4,000 4,000 I Miscellaneous 1,08fi,003 348,818 (737,185) Total revenues 566,465 Other financing sources(uses): 134,941 134,941 I Transfers in 1,086,003 (323,680) 762,323 I Transfers out 856,400 897,264 Total other financing sources(uses) 856,400 1,086 003 (186,73 . Net change in fund balance (289,935) - 160,079 160,079 I _ 697,810 . -•Fund balance-beginning 160, 79 s $ 2 89,935 $ _ $ 857,889 $ Fund balance-ending • i • 55 . I t Trails &Paths Fund Schedule of Revenues, Expenditures,and Changes in Fund Balances -Budget and Actual . For the Year Ended December 31, 2005 I • " Variance with Final Budget Actual Amounts Positive Bud eted Amounts Original Final_ _ Budgetary Basis (Negative) Revenues: 8 91 $ (1 Q,98C) t� Intergovernmental revenues $ 5,100 $ 17,900 $ 252 252 Miscellaneous - - 7,166 - �1 0,734} Total revenues 5,100 17,900 Expenditures: 17,900 - 17,900, Capital outlays - - 17,900 Total revenues -- 17,900 7,1 fi€i Net change in fund balance 5,100 - 7,166• 8,49 8,492- Fund balance -beginning r - Fund balance -ending $ • 5,100‘ $ - $ 15,658, 15,658, I r I I. I t . { 1! , 50 I • . Hotel/Motel Fund Schedule of Revenues,Expenditures, and I Changes in Fund Balances-Budget and Actual For the Year Ended December 31,2005 I Variance with Final Budget • Budgeted Amounts Actual Amounts Positive I Original _ Final Budgetary B (Neg asis ative Revenues; $ 350,000 $ 436,827 $ 387,829 $ " (48,998) Taxes 1,000 1,000 6,118 5,118 Miscellaneous 437,827 000 • 393,947 43,880) I Total revenues • 351,000 Expenditures: Current: 397,827 250,014 147,813 Economic environment 260,000 147,813 I Total expenditures 260,000 397,827 250,014 Excess(deficiency)of revenue 40,000 143,933 103,933 over(under)expenditures 91,000 • Other financing sources(uses): 40,000 40,000 28,156 11,844 Transfers out 40,000 28,156 11,844 1 Total other financing sources(uses) 40,000 II Net change in fund balance 51,000 - 115,777 115,777 _ 136,494 � - Fund balance-beginning - - $ I Fund balance-ending $ 51,000 $ 252,271 $ 115,777 • I I • 57 I • 1 t CenterPlace Operating Reserve Schedule of Revenues, Expenditures, and Changes in Fund Balances-Budget and Actual . For the Year Ended December 31,2005 Variance with Final Budget • Budgeted Amounts Actual Amounts Positive Original Final . Bud getaN Basis (Negative) Revenues: _ $ _ $ 6,291 $ 6,291 Miscellaneous $ - 6,291 6,291, Total revenues - c•Expenditures: _ 300,000 - 300,000 Operating reserve _ 300,000 - 300,000, Total expenditures Excess(deficiency)of revenue 300,000 6,291 306,291 • over(under)expenditures - Other financing sources(uses): _ - 300,000 300,000 Transfers in 300,000 300,000 - Total other financing sources(uses) - 306,291 306,291 Net change in fund balance - Fund balance-beginning $ - $ 306,291 $ 306,291 Fund balance-ending $ • • I • i I. 581 I I I • Service Level Stabilization Wires and Schedule of Revenues, Expendi Changes in Fund Balances -Budget and Actual For the Year Ended December 31,2005 Variance With Final Budget Budgeted Amounts Actual Amounts Positive Original Final Elm._ et _a Basis (Negative) I lRevenues: _ $ 29,601 $ 29,BQ1 Miscellaneous $ - 29,601 29,601 �9,6Q1 Total revenues � - _ ! 1 - 1,DDD,DDD Expenditures ,� 1,DO©,DOii IOperating reserve �- _ 1,0DQ,QnQ - - 1,000,000 Total expenditures - - Excess(deficiency) of revenue . - 1,QQ,DDD 29,601 1,029,601 over(under)expenditures Other financing sources(uses): 1,000,000 2,306,105 1 s3D6,105-I Transfers in '{,OQQ,00Q 2,3Q6,1 Q5 1,306,'105 Total other financing sources(Uses) • 2,335,70G 2,335,706 Net change in fund balance _ Fund balance-beginning r - 7+DG $ 2,335,70fi I Fund balance-ending • $ - $ - $ 2,335,706 I I 1 59 I • 1 Winter Weather Reserve Schedule of Revenues, Expenditures,and Changes in Fund Balances -Budget and Actual ' For the Year Ended December 31, 2005 Variance with Final Budget Budgeted Amounts _ Actual Amounts Positive Ori final Final Budgetary Basis (Negative) Revenues: 7,909 $ _ $ _ $ 7,909 $ Miscellaneous (II 7,909 7,909 Total revenues -- i - Expenditures: _ 500,000 ', 500,000 Operating reserve _ 500,000, , Total expenditures 500 000 of revenue 507,909 Excess(deficiency) _ 500,000 7,909 � 1 over(under)expenditures - Other financing sources(uses): 500000 --Transfers in 500,000 , 500,000 500,000 - Total other financing sources(uses) - - 507,909 507,909 Net change in fund balance ■ Fund balance-beginning $ _ $ - $ 507,909 $ 507,909, ( Fund balance-ending • I 60 1 1 • I Debt Service LTGO 03 Schedule of Revenues, Expenditures,and I Changes in Fund Balances -Budget and Actual For the Year Ended December 31; 2005 Variance with Final Budget I Budgeted Amounts _ Actual Amounts Positive Original Final Budgetary Basis (Negative) Revenues: • 397,745 $ 397,745 $ 397,745 $ - Intergovernmental revenues 397,745 397,745 - Total revenues 397,745 I Expenditures: Debt service: 373,918 165,000 208,918 I Principal 373,918 41835 • (208,918) 582,835 208,917 208,917 7 Interest 582,835 582,835 - Total expenditures . . Excess(deficiency)of revenue 185,090 185,090 - over(under)expenditures 185,090 Other financing sources(uses): 185,090 185,090 185,090 - I Transfers in - 185,090 185,090 185,090 Total other financing sources(uses) Net change in fund balance - • Fund balance-beginning , - eginning - - L__________=_-- $ - IFund balance-ending .$__L_____:___'. I . 61 I I • Capital Projects Fund • Schedule of Revenues, Expenditures, and Changes in Fund Balances-Budget and Actual , For the Year Ended December 31,2005 I Variance with Final Budget Actual Amounts Positive Budgeted.Amounts Ori ing al Final Budgetary Basis (Negative) Revenues: $ 800,000 . $ 2,099,904 $ 1,256,560 $ (843,344)Taxes 6,000 6,000 65,156 59,156 Miscellaneous 2,105,904 1,321,716 (784,188) 806,000 i Total revenues Expenditures: 1,973,359 Capital outlay 200,000 1973,359 - 1,973,359 I Cap Y 1,973,359 200,000 Total revenues I Other financing sources(uses): 491 959 132 545 132,545 (624,504) ( ) Transfers out 132,545 (624,504) (491,959) Total other financing sources (uses) 132,545 1 697,212 697,212 Net change in fund balance 473,455 - - 1,569,486 - Fund balance-beginning _ 2,266,698 $ 697,212 $ 473,455 $ - $ Fund balance-ending I r I I • • I 62 I Special Capital Projects Fund Schedule of Revenues, Expenditures, and I Changes in Fund Balances-Budget and Actual For the Year Ended December 31, 2005 • Variance with Final Budget I Budgeted Amounts Actual Amounts Positive Original Final • Budgetary Basis (Negative) • Revenues: 1,234,310 $ (672,147) Taxes $ 800,000 $ 1,906,457 $ 54,212 48,212 Miscellaneous 6,000 6,000 806,000 1,912,457, 1,288,522 . (623,935) Total revenues . IExpenditures: 2 - 1,707,312 Capital outlay - 1,707,31 I Total expenditures - 1,707,312, • 1,707,312, Other financing sources(uses): (92,545) 112,600 Transfers out (205,145) (205,145) ITotal other financing sources (uses) (205,145) (205,145) (92,545) 112,600 Net change in fund balance 600,855 - 1,195,977 1,195,977 - 1 250,171 - Fund balance-beginning - , Fund balance-ending $ 600,855 $ - $ 2,446,148 $ 1,195,977 • I I I I I 63 I Mirabeau Point Project in Fund Balances Statement of Revenues,Expenditures, and Changes Budget and Actual I For the Year Ended December 31, 2005 , Variance with II Final Budget r Budgeted Amounts Actual Amounts Positive Ori final Final d9eth (Negative) I Revenues: 4,000,000 $ 150,686 $ (3,849,314) Miscellaneous $ _- 4 000,000 150,686 (3,849,314) 1 Total revenues Expenditures: 3�484�g03 515,597 I 3,000,000 4,000,000 Capital outlay 4,000,000 3,484,403 515,597 Total expenditures 3,000,000 . � Excess(deficiency)of revenue _ 3 333,71 (3,333,717) 1 ( 3,000,00 over(under)expenditures ( Other financing sources(uses): - - -- Contributions _ - - Total other financing sources(uses) - Net change in fund balance (3,000,000) - (3,333,717) (3,333,717) I _ - 3,783,205 - Fund balance-beginning - - $ , 9,488 $ (3,333,717) Fund balance-ending $ 3 000,000 $ 1 I I • 1 I I The notes to the financial statements are an integral part of this statement. 64 1 , I Street Bond Capital Projects Statement of Revenues,Expenditures, and Changes in Fund Balances Budget and Actual I For the Year Ended December 31,2005. • Variance with Final Budget Budgeted Amounts Actual Amounts Positive Originat Final Budgetary Basis (Negative) Revenues: $ 33,8J9 $ 33,859 I Miscellaneous • $ $ - Total revenues - - 33,859 33.859 Expenditures: Debt Service: _ _ Bond issuance costs - , - _ ITotal expenditures - • Excess(deficiency)of revenue - 33,859 33,859 over(under)expenditures - other financing sources(uses): Transfers in 406,000 81,028 (324,972) Transfers out (406,000) (406,000) (405,894) 106 Total other financing sources(uses) (406,000) , • - , (324,866) (324,866) Net change in fund balance (406,000) - (291,007) (291,007) •Fund balance-beginning - - 1,308,460 • - Fund balance-ending $ (406,000) $ - $ 1,017,453 $ (291,007) 1 I I I 65 ' • Community Development Block Grant Fund Statement of Revenues, Expenditures,and Changes in Fund Balances • Budget and Actual For the Year Ended December 31,2005 • ■ Variance with • Final Budget Budgeted Amounts Actual Amounts Positive • Original Final Bud Basis (Negative) Revenues: 600,000 $ 439,850 $ (160,150) lntergovenmental $ - 4,277 - Miscellaneous _ 600,000 444127 (160,150) Total revenues Expenditures: Debt Service: - 12,308 (12,308) I Interest _ 600,000 559,805 40,195, Capital outlay 572,113 27,887 � 600,000 Total expenditures Excess(deficiency)of revenue _ (127,986) (127,986)- over(under)expenditures Other financing sources(uses): _ 127,986 127,986 Transfers in - 127,986 127,986, Total other financing sources(uses) - Net change in fund balance ■ Fund balance-beginning - $ - I Fund balance-ending • 1 I 1 I • The notes to the financial statements are an integral part of this statement. I • 66 1 Capital Grants Fund Statement of Revenues, Expenditures,and Changes in Fund Balances Budget and Actual I For the Year Ended December 31,2005 • Variance with Final Budget Budgeted Amounts Actual Amounts Positive • Original Final Budgetary Basis (Negative) Revenues: Intergovernmental To $ 3,235,000 $ 4,418,000 $ 356,711 $ (4,061,289) Total revenues 3,235,000 4,418,000 356,711 (4,061,289) I Expenditures: . Capital Outlay 3,827,000 5,010,000 744,825 4,265,175 Total expenditures . 3,827,000 5,010,000 744,825' 4,265,175 I Excess(deficiency) of revenue over(under)expenditures (592,000) (592,000) (388,114) 203,886 I Other financing sources(uses): Transfers in 592,000 592,000 • • 388,114 (203,886) Transfers out - - (81,028) . (81,028) I Total other financing sources(uses) 592,000 592,000 307,086 (284,914) ` Net change in fund balance - - (81,028) (81,028) I Fund balance-beginning. - - 81,028 - Fund balance-ending $ - $ - $ - $ (81,028) • • I • • I • • 1 67 • Barker Bridge Project Fund • Statement of Revenues,Expenditures,and Changes in Fund Balances t Budget and Actual For the Year Ended December 31,2005 I Variance with ' Final Budget Budgeted Amounts Actual Amounts Positive Original • Final Budgetary Basis (Negative) Revenues: Intergovernmental $ 234,000 $ 350,000 $ 113,994 $ (236,006) Total revenues . 234,000 350,000 . 113,994 (236,006) Expenditures: Capital Outlay 234,000 350,000 113,994 236,006 234,000 350,000 113,994 236,006 Total expenditures Excess(deficiency)of revenue - • - - - I over(under)expenditures Net change in fund balance - - - Fuhd balance-beginning - - (52) Fund balance-ending $ - $ - $ (52) $ • I • • t I I I I I• I 681 I 1 • Parks Capital Projects Fund I Statement of Revenues,Expenditures, and Changes in Fund Balances Budget and Actual For the Year Ended December 31, 2005 I Variance with Final Budget Budgeted Amounts Actual Amounts Positive Original Final Budgetary Basis (Negative) Revenues: Miscellaneous $ - $ - $ 5,537, $ 5,537 ITotal revenues - - 5,537 • 5,537 •Expenditures: Capital Outlay - 550,000, 550,000 Total expenditures - 550,000 - 550,000 • Excess(deficiency)of revenue Iover(under)expenditures - (550,000) 5,537 555,537 •Other financing sources(uses): Transfers in - 550,000 550,000 1 Total other financing sources(uses) - 550,000 550,000 - Net change in fund balance - _'•� � 555,537 555,537 Fund balance-beginning - - Fund balance-ending $ - - , 555,537 $ 555,537 I • . I I 1 . 69 I I Civic Building Capital Projects Fund r • Statement of Revenues,Expenditures,and Changes in Fund Balances Budget and Actual For the Year Ended December 31,2005 Variance with Final Budget Budgeted Amounts Actual Amounts Positive Original Final Budgetary Basis (Negative) Revenues: • Miscellaneous $ - $ - $ 7,909, $ 7,909 Total revenues - - 7,909 7,909 • Expenditures: . I • Capital Outlay - 500,000 - 500,000 Total expenditures - 500,000 - 500,000 I Excess(deficiency)of revenue over(under)expenditures - - (500,000) 7,909 507,909 Other financing sources(uses): Transfers in - 500,000 500,000 - Total other financing sources(uses) - 500,000 500,000 . - Net change in fund balance - - 507,909 507,909 Fund balance-beginning - - - - Fund balance-ending $ - $ - $ 507,909 $ 507,909 I . 1 • • I I 7 0! 1 1 1 1 1 � Proprietary Funds 1 1 1 1 1 1 1 1 1 1 1 1 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. • 1 I I • I . • • • 1 71 I !Ii Combining Statement of Net Assets Internal Service Funds December 31, 2005 ' I Equipment Rental Risk • & Replacement Management Total Assets: Current assets: . Cash, cash equivalents and I 720,984 $ 30,750 $ 751,734 pooled investments $ Due from other funds 67,869 - 67,869 Total current assets 788,853 30,750 819,603 I Capital assets: Machinery& Equipment 698,300 - 698,300 1 Less accumulated depreciation (354,057) - . (354,057) Total capital assets (net of • accumulated depreciation) 344,243, - 344,243 Total assets 1,133,096 30,750 1,163,846 Liabilities: Current liabilities: Accounts payable - - - Due to other funds - 5,292 5,292 I Deferred revenue 496,939 496,939 Total liabilities 496,939 5,292 502,231 I Net assets: Invested in capital assets 344,243 - 344,243 ' Unrestricted 291,91 4 25,458 317,372 Total net assets • $ 636,157 $ 25,458 $ 661,615 ' I t 721 • Combining Statement of Revenues, Expenses, And Changes in Fund Net Assets Internal Service Funds . For the Year Ended December 31,2005 • Equipment Risk Rental Management Total I Operating Revenues: Charges for services $ 106,383 $ 104,887 $ 211,270 Total operating revenues 106,383 104,887 211,270 IOperating Expenses: Operations _ - 110,314 110,314 I Depredation 195,813 - 195,813 Total Operating expenses 195,813 110,314 306,127 Operating income(loss) (89,430) (5,427) (94,857) Nonoperating revenues(expenses): Interest income 6,288 768 7,056 ` Loss on disposal of assets (62,142) - (62,142) . Total nonoperating revenues(expenses) (55,854) • - 768 (55,086) 1 Income before contributions and transfers (145,284) (4,659) - (149,943) Contributions and transfers: ICapital contributions 125,899 - 125,899 Change in net assets (19,385) (4,659) (24,044) INet assets beginning of the year 655,542 30,117 685,659 Net assets end of year $ 636,157 $ 25,458 $ 661,615 I I I I73 I 1 I Statement of Cash Flows Internal Service Funds For the Year Ended December 31, 2005 • Business-type Activities-Enterprise Funds Equipment Rental Risk ' - &Replacement Management Total Cash flows from operating activities: I Receipts from interfund services provided $ 603,322 $ 104,887 $ 708,209 Payments to suppliers (14,663) (105,022) (119,685) . Net cash provided(used) by operating activities 588,659 (135) 588,524 . Cash flows from capital&related financing activities: Acquisition of capital assets - - - - { Net cash provided(used)for capital activites - - - t • Cash flows from investing activities: Interest received 6,288 768 7,056 , Net cash provided(used) by investing activities 6,288 768 7,056 Net increase in cash&cash equivalents 594,947 633 595,580 Cash&cash equivalents, January 1, 2005 126,037 30,117 156,154 Cash&cash equivalents, December 31,2005 $ 720,984 $ 30,750 $ 751,734, Reconciliation of operating income to net cash provided (used)by operating activities: Operating income(loss) $ (89,430) $ . (5,427) $ (94,857) Adjustments to reconcile operating income to net • cash provided (used)by operating activities: Depreciation 195,813 - 195,813 i Changes in assets and liabilities: (Increase)decrease in due from other funds (12,663) - (12,663) Increase(decrease)in accounts payable (2,000) - (2,000) Increase(decrease)in due to other government - 5,292 5,292 Increase(decrease)in deferred revenue 496,939 - 496,939 Total adjustments 678,089 5,292 683,381 Net cash provided(used)by operating activities $ 588,659 $ (135) $ 588,524 - Noncash investing,capital,and financing activities: Contributions of capital assets from other funds $ 125,899 - $ 125,899 `, 741 11 1 1 1 1 1 Statistical Section 1 1 1 1 1 1 1 1 1 i 1 1 I ISTATISTICAL SECTION This part of the City of Spokane Valley's comprehensive annual financial report presents detailed information as a context of understanding what the information in the financial statements, note disclosures, and required supplementary information says about the government's overall financial health. • Financial Trends I These schedules contain trend information to help the reader understand how the • government's financial performance and well-being have changed over time. • Net Assets by Component 78 I Changes in Net Assets 77 Governmental Activities Tax Revenue by Source 78 Fund Balances of Governmental Funds 78 I Changes in Fund Balances of Governmental Funds 79 General Governmental Tax Revenues by Source 8© Revenue Capacity These schedules contain information to help the reader assess the governmental most significant local revenue source, the property tax. I Assessed Value and Estimated Actual Value of Taxable Property 81 Property Tax Levies and Collections 81 Property Tax Rates—Direct and Overlapping Governments 82 Principle Property Taxpayers 83 Debt Capacity, These schedules present information to help the reader assess the affordability of the I government's current levels of outstanding debt and the government's ability to issue additional debt in the future. • Ratios of Outstanding Debt by Type 84 I Direct and Overlapping Governmental Activities Debt 85 Legal Debt Margin 85 Demographic and Economic Information I These schedules offer demographic and economic indicators to help the reader understand the environment within which the government's financial activities take place. IDemographic and Economic Statistics 87 Principle Employers 88 I Full-time Equivalent City Government Employees by Function 89 O peratinqInformation These schedules contain service and infrastructure data to help the reader I understand how the information in the government's financial report relates to the services the government provides and the activities it performs. Capital Assets Statistics by Function 89 I 75 1 I s City of Spokane Valley Net Assets by Component . Last Three Fiscal Years I Fiscal Year 2003 2_ 2005 1 Governmental activities Invested in capital assets, net of related debt $ 63,878,148 $ 62,079,431 $ 56,028,362 Restricted 1,322,142 7,994,118 7,248,194 1 Unrestricted • 4,876,957 11,039,759 18,712,154 To tal governmental activities net assets $ 70,077,247 $ 81,113,308, $ 81,988,710 I Business-type activities - { Invested in capital assets, net of related debt S. - $ - $ - Restricted Unrestricted 794,083 1,269,689 1,277,396 $ 1,269,689 $ 1,277,396 Total business-type activities net assets $ 794,083 Primary government Invested in capital assets, net of related debt $ 63,878,148 2 $ 62 7 079,431 56,028,362 7,994,118 7,248,194 Restricted 1,322,142 Unrestricted 5,671,040 12,309,448 19,989,550 .Total primary 9 I rima government net assets • $ 70,871,330, $ 82,382,997 $ 83,266,106 • • I I I I t 76 I I City of Spokane Valley Changes in Net Assets • Last Three Fiscal Years I Fiscal Year 2003 2004 2005 Expenses I Governmental activities: General government $ 2,989,605. $ 3,359,728 $ 3,471,165 Public safety 7,394,944 13,327,807 15,934,473 I Physical environment 821,886 1,124,472 986,414 Transportation • 9,054,667 13,360,562 14,943,598 Economic environment 752,172 1,562,221 2,019,995 • Mental and physical health 8,858 42,513 44,174 I Culture and recreation 932,713 3,443,688 3,784,970 Interest on long-term debt 35,923 514,531 449,980 Total governmental activities expenses 21,990,768 •- 36,735,522 41,634,769 I Business-type activities Sewer 720,393 1,597 - Stormwater management 4,142 75,041 1,022,193 I Total business-type activities expenses 724,535 76,638 1,022,193 Total primary government expenses $ 22,715,303 $ 36,812,160 $ 42,656,962 I Program Revenues Governmental activities: Charges for services: General government $ $ 2,306 $ - Public safety 617,207 859 1,261,955 1,180,018 Physical environment 28,498 73,279 106,324 Transportation 20,284 - • - Economic environment 887,886 1,629,613 3,102,880 Culture and recreation 122,152 • 152,034 414,257 Operating grants and contributions 19,807 90,305 84,284 I Capital grants and contributions(Note 2) 70,687,614 11,689,821 1,392,873 Total governmental activities program revenues 72,384,307 14,899,313 6,280,636 Business-type activities: I Charges for services: Storrnwater management 559,510 776,859 1,252,006 Total business-type activities program revenues 559,510 776,859 1,252,006 1 Total primary government revenues $ 72,943,817 $ 15,676,172 $ 7,532,642 • Net(expense)/revenue Governmental activities 50,393,539 (21,836,209) (35,354,133) Business-type activities (165,025) 700,221 229,813 Total primary government net expense $ 50,228,514• $ (21,135,988) $ (35,124,320) •I I • I 77 I . I City of Spokane Valley I Governmental Activities Tax Revenues By Source Last Three Fiscal Years (accrual basis of accounting) Sales&Use Fiscal Year Properhi Tax Taxes Excise Tax Other Taxes I 2003 $6,995,965 $ 9,981,719 $ 3,537,370 $ 1,269,878 2004 8,980,837 16,531,976 5,796,164 1,103,277 1 2005 9,509,339 16,868,850 2,494,958 1,416,885 I 1.Year 2003 is the first year of incorporation and for 9 months only. I 1 City of Spokane Valley • Fund Balances of Governmental Units Last Three Fiscal Years (modified accrual basis of accounting) 2003 2004 2005 1 General fund Reserved $ - $ 300,000 $ - Unreserved (2,437,396) 4,493,460 7,047,500 ' Total General Fund $ (2,437,396) $ 4,793,460 $ 7,047,500 All other 9 overnmental funds I Reserved $ 2,890,000 $ - $ - Unreserved, reported in: Special revenue funds 2,669,350 4,150,693 5,340,111 Capital projects funds 10,513,560 7,994,118 7,248,194 Total all other funds $ 16,072,910 $12,144,811 $12,588,305 1 I I 78I , ICity of Spokane Valley Changes in Fund Balances of Governmental Funds Last Three Years (modified accrual basis of accounting) 2003 2004 2005 •Revenues: Taxes $ 17,486,759 $ 27,122,530 $ 30,262,686 Licenses and permits 1,088,165 1,779,081 2,406,520 III Intergovernmental revenues 2,124,965 3,633,119 4,880,524 Charges for services 477,342 792,482 895,974 • Fines and forfeitures 533,496 1,196,234 1,180,016 I Miscellaneous 73,110 282,388 r 950,330. Total revenues . 21,783,837 34,805,834 40,576,050 • I Expenditures: • Current: General government 2,874,697 3,178,887 4,614,278 Public safety 7,394,857 13,324,116 15,926,633 I Physical environment 817,532 1,098,404 953,622 Transportation 1,501,884 3,147,222 2,965,737 Economic environment 757,541 1,588,392 2,037,583 Mental and physical health 8,858 42,513 44,174 Culture and recreation 879,047 3,376,724 3,642,988 Debt Service: Principal - 145,000 373,918 I Interest 34,891 478,986 208,917 Bond issue costs 109,019 1,130 - Capital Outlay 923,662 8,242,737 6,173,177 ITotal expenditures 15,301,988 34,624,111 36,941,027 over(under)expenditures Excess(deficiency)of revenue 6,481,849 181,723 3,635,023 IOther financing sources(uses): Contributions - 2,883,691 23,680 Transfers in 312,103 1,988,886 6,763,135 I Transfers out (1,271,103) (1,751,542) (5,931,828) • Long-term debt issued 9,430,000 Premium on long-term debt 191,485 - - I Discount on long-term debt (67,164) - - ' sources(uses) 8,595,321 3,121,035 854,987 Total other financing ( ) INet change in fund balance 15,077,170 3,302,758 4,490,010 Fund balance-beginning (1,441,656) 13,635,514 16,938,272 IIIFund balance-ending $ 13,635,514 $ 16,938,272 $ 21,428,282 I 79 I 1 c I • City of Spokane Valley General Governmental Tax Revenues by Source Last Three Fiscal Years (modified accrual basis of accounting) Fiscal Property Real Estate Motor fuel Franchise Gambling State Shared Year Tax Sales Tax Excise Tax Taxes Fees Taxes Revenues I 2003 $ - $8,986,557 $ 1,377,790 $ 1,418,522 $ 466,938 $ 558,802 $ 702,236 2004 8,980,837 15,044,619 2,075,840 1,691,707 657,083 880,151 1,051,496 I 2005 9,509,339 16,868,850 2,490,869 1,803,370 696,273 989,237 1,142,958 1.Year 2003 is the first year of incorporation and for 9 months only. I I Ir I I ■ I I I • I • 801• r I NM NM I MI NB MI MS N MR a - - - - - - - City of Spokane Valley Assessed and Estimated'Actual Value of Taxable Property Last Three 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 2006 $ 4,558,391,149 $ 5,056,991,058 $343,237,223 $ 343,237,223 $ 498,599,909 $4,901,628,372 $5,400,228,281 90.8% • 2005 $ 4,066,812,360 $ 4,530,209,970 $339,053,340 $ 339,053,340 $ 463,397,610 $4,533,703,249 $4,997,100,859 90.7% • 2004 $ 3,999,483,249 $ 4,450,200,737 $309,826,177 $ 309,826,1774 $ 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 County's Assessor's Office to value property at 100%of market value. As a result,assessed and actual values are the same. o0 •-, Source:Spokane County Assessor's Office City of Spokane Valley Property Tax Levies and Collections' Last Three Fiscal Years2 Current Tax Ratio of Total Tax Ration 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 2005 $ 9,870,000 $ 9,333,284 94.6% $ 176,055 $ 9,509,339 96.3% $ 601,231 6.1% 2004 $ 9,265,809 $ 9,025,239 97.4% o $ 187,316 $ 9,212,555 99.4% $ 366,113 4.0% 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. • r 1 r' ( Ci ty P of Spokane Valley Property Tax Rates Direct and Overlapping Governments Last Three Fiscal Years Total Direct and Spokane Spokane School Overlapping Fiscal Years Valley County Fire Districts State School Districts Library Bond Other Rates 2005 1.599 1.378 2.937 0.063 5.977 2004 2.108 1.497 3.169 2.911 6.053 0.083 0.000 15.821 2003 0.000 1.478 2.999 2.917 6.140 0.088 2.370 15.992 Source:Spokane County Assessors Office Overlapping rates are those of local and county governments that apply to property owners with the City of Spokane Valley. Not all overlapping rates apply to all Spokane Valley property owners(e.g.,the rates for special districts apply only to the proportion of the govemmenrs property owners whose property is located within the geographic boundaries of the special district.) • t . i ( 82 • INS Mil E NE E N NU r MI r r r NB NM r MB M NM NM City of Spokane Valley Principal Property Taxpayers December 31,2005 2008 2005 2004 Taxable Percent Taxable Percent Taxable Percent Assessed of AN to Assessed of NV to Assessed of AN to Taxpayer Tvoe of Business, Valuation Ent Total AN Valuation Banis Total A/V Valuation E nh Total AN Spokane Valley Mall Retail Malls $ 57,062,622 1 1.28% $ 58,377,080 1 1.24% $ 58,377,080 2 1.28% Avlsta Corporation Electric&Gas Utility 55,972,538 2 1.23% 54,933,310 2 1.21% 49,988,859 3 1.13% KalserAluminum,Inc. Aluminum Manufacture 45,415,950 3 1.00% 49,422,892 3 1.09% 61,709,547 1 1.40% Park SPE,LLC Real Estate 45,248,500 4 1.00% 43,136,600' 4 0.95% 41,960,700 4 0.95% Honeywell Electronic Materials Electronics Manufacturer 31,168,817 5 0.69% 30,069,109 8 0.86% 15,129,873 8 0.34% Qwest Corporation Telephone Utility 22,132,891 6 0.49% 32,677,558 5 0.72% 18,957,436 5 0.43% Itron Inc. Electronics Manufacturer 20,754,510 7 0.46% 23,834,615 7 0.52% 18,913,447 7 0.38% CPM Development Corp. Concrete and Asphalt 18,111,548 8 0.40% 18,230,478 8 0.40% 12,785,586 8 0.29% Calico Partnership dba Verlzon Telephone Utility 17,732,508 9 0.39% N/A - - N/A - - Cedar Chateau Estates Real Estate 14,717,120 10 0.32% 12,659,887 10 0.28% 12,751,741 10 0.29% Total-Ten Principal Taxpayers 328,315,004 6.70% 321,161,509 7.08% 286,554,049 6.50% Total-All Other Taxpayers 4,573,313,388 93.30% 4,212,541,740 92.92% 4,122,706,802 93.50% Grand Totals $4,901,828,372 ,L12.34.71„..)3 249 $4,409,259,851 WSource:Spokane County Treasurer • • • • City of Spokane Valley Ratios of Outstanding Debt by Type Last Three Fiscal Years Govermental Activities General Obligation Special Assessment Business Type Total Primary Fiscal Year Bonds Bonds Capital Leases Activities Government Per Capita 2005 • $9,120,000 - - - $9,120,000 $107 2004 $9,285,000 - - - $9,285,000 $111 2003 $9,430,000 - - - $9,430,000 $115 O0 City of Spokane Valley -p Ratios of General Bonded Debt Outstanding To Assessed Value and Bonded Debt Per Capita Last Three Fiscal Years Less Debt Service Fund Ratio of Net Gross Bonded Cash and Net Direct Bonded Bonded Debt to Net Direct Bonded Year Population Assessed Value Debt Investments Debt Assessed Value Debt Per Capita 2005 85,010 $5,056,991,058 $9,120,000 - $9,120,000 0.180% $107 2004 83,950 $4,527,968,717 $9,285,000 - $9,285,000 0.205% $111 2003 82,005 $4,409,259,651 $9,430,000 - $9,430,000 0.210% $115 1. Assessed valuation was for property tax year 2004. f�-- Min - r - Ems - m -UM- - ... - ono - .ice -moor mom- Ml. - a. - .■. 'a.■w -.■..-\ r - �.: I I I City of Spokane Valley Direct and Overlapping Governmental Activities Debt General Obligation Bonds IAs of December 31,2005 I Percent Amount G.O. Debt Overlappi Applicable to Jurisdiction . Outstanding ng . Government • I Direct: City of Spokane Valley $ 9,1 20,000 100.00% $ 9,120,000 Overlapping: Fire District#8 9.43% - IISpokane County Library District 34.67% - Spokane School District#81 3.87% - ICentral Valley School District#356 68.20% - IEast Valley School District#361 57.10% - West Valley School District#363 53.11% - ITotal Overlapping Debt $ - Total Direct and Overlapping $ 9,120,000 1 I I I I • I 1 1 85 I City of Spokane Valley Legal Debt Margin Information Last Three Fiscal Years I • Fiscal Year 2004 2005 2 I Debt limit-general purposes $ 110,231,496 $ 113,199,218 $ 126,423,776 Total net debt applicable to limit 9,486,398 9,368,843 9,243,176 Legal debt margin $ 100,745,098 $ 103,830,375 $ 117,180,600 Total net debt applicable to the limit as a percentage of debt limit 8.61% 8.28% 7.31% I Legal Debt Margin Calculation for Fiscal Year 2006 Assessed Valuation(2005 for 2006 taxes) $ 4,527,968,717 $ 5,056,951,058 1 General Purpose debt limit(2.5%of total assessed value) $ 113,199,218 $ 126,423,776 Debt applicable to limit: General obligation bonds 9,285,000 9,120,000 General governmental liabilities 83,843 123,176 Total net debt applicable to limit 9,368,843 9,243,176 Margin of indebtness available-general purposes $ 103,830,375 $ 117,180,600 Indebtedness for open space and parks facilities with a 3/5 vote(legal limit 2.5%) $ 113,199,218 $ 126,423,776 Indebtednes s for utility purposes I o with a 3/5 vote(legal limit 2.5%) $ 113,199,218 $ 126,423,776 . Total indebtness allowable(legal limit 7.5%) $ 339,597,653 $• 379,271,328 1 Less: Indebtness incurred-all purposes 9,368,843 9,243,176 Margin of indebtedness available-all purposes $ 330,228,810 $ 370,028,152 I • • I I 86\ I I I • I City of Spokane Valley Demographic Statistics ILast Three Fiscal Years II Unemploymen Fiscal Per Capita Area Taxable School t Year Population Income' Sq Miles Retail Sales2 Enrollment Rate' 2005 85,010 $ 28,065 38.5 $ 1,807,983,422 16,962 5.9% I2004 83,950 $ 27,218 38.5 $ 1,634,649,950 19,741 6.6% 1 2003 82,005 $ 26,107 38.5 $ 1,072,774,225 18,863 6.8% • 1. Spokane metropolitan statistical area annual average. 2. For the nine months April 1 -December 31,2003. I I I I 1 • I 87 • �i t City of Spokane Valley I Principal Employers Last Three Fiscal Years • 20o5 2005 2004 • Number of Number of Number of Employer Time of Business Employees Employees Employees Dakotah Call center 988 1,193 1,000 Huntwood Industries Custom kitchen cabinets 686 727 638 Kaiser Aluminum Aluminum manufacture 590 575 650 CPM Development Corp. Concrete and Asphalt 575 • 550 449 - Yoke's Washington Foods Retail grocery 512 479 447 Honeywell Electronic Materials High purity metals 429 439 473 Wagstaff Inc. Aluminum casting 248 260 209 ltron Inc. Meter data readers 223 458 516 Tidyman's LLC Retail grocery 201 272 272 Source:Journal of Business Book of Lists • • 88 I I City of Spokane Valley Full-time Equivalent City Government Employees by Function Last Three Fiscal Years 1 Function 2003 2004 2005 General government 20 21 20 I Public Safety - - - Physical Environment 8 9 9 r Transportation 2 1 3 I Economic Environment 19 21 Culture and recreation x 5 4 7 Stormwater Management _ - - 2 ITotal 50 53 62 IThe city contracts with Spokane County for law enforcement, park maintenance and street maintenance. IFire protection is provided by Spokane County Fire District No. 1. Library service is provided by the Spokane County Library District. II City of Spokane Valley I Capital Asset Statisitics by Function Last Two Fiscal Years IFunction 2003 2004 2005 . Highways and streets I Streets (miles) 424 431 431 Traffic Signals 72 74 74 I Parks Parks acreage 165 165 165 Parks 9 9 9 I Swimming pools 3 3 3 Tennis courts Community centers 1 1 1 • I Stormwater management Number of swales 1 I 89 1 1 1 i Other Supplementary i Schedules 1 1 1 1 1 I . 1 1 1 1 1 1 1 1 NM - - NM M E - I E I NM ■N r M MB NM M • • MCAG NO.2781 Schedule 09 CITY OF SPOKANE VALLEY SCHEDULE OF LONG-TERM DEBT FOR THE YEAR ENDED DECEMBER 31,2005 BARS Beginning Ending Redeeming Code for Date of Date of Outstanding Amount Amount Outstanding ID. No. Issue Fund Redemption Issue Maturity, Debt Issued ©edeemed Debt 251.11 'GO Bonds of 2003 204 591.73.71 • 11-18-03 12.01-33 9,285,000 - 165,000 9,120,000 Total Limited Go Bonds $9,285,000 $ - $ 165 000 $9000, v • t 1 Schedule 10 CITY OF SPOKANE VALLEY I COMPUTATION OF LIMITATION OF INDEBTEDNESS t December 31,2005 II ASSESSED VALUATION (2005 FOR 2006 TAXES) $ 5,056,951,058 r I. GENERAL PURPOSE INDEBTEDNESS (LEGAL LIMIT OF 2.5%OF I TAXABLE PROPERTY VALUE) $ 126,423,776 r A. GENERAL PURPOSE INDEBTEDNESS WITHOUT A VOTE r (LEGAL LIMIT 1.5%) $ 75,854,266 INDEBTEDNESS(LIABILITIES): 1. Councilmanic Bonds $ 9,120,000 Less: Redemption Fund Assets: Cash&Investments in Bond Redemption Funds - 9,120,000 2. General Government Liabilities Employee Leave Benefits 123,176 Less: Redemption Fund Assets: - 123,176 I Less: Total Net General Indebtedness-Section A (9,243,176) t Margin of Indebtedness Still Available _ 66,611,090 t- s B. GENERAL PURPOSE INDEBTEDNESS WITH A VOTE (LEGAL LIMIT 2.5%) 126,423,776 I No Indebtedness Incurred - Remaining Voted G 0 Debt Capacity-General Purposes 126,423,776 1 Total Indebtedness,Voted&Nonvoted Bonds (9,243,176) c REMAINING VOTED AND NONVOTED GO DEBT CAPACITY-GENERAL PURPOSES 117,180,600 I II. INDEBTEDNESS FOR OPEN SPACE AND PARKS FACILITIES WITH A 3/5 VOTE(LEGAL LIMIT 2.5%) 126,423,776 No Indebtedness Incurred - -- _ - Remaining Voted G 0 Debt Capacity-Open Space and Park Purposes 126,423,776 I III. INDEBTEDNESS FOR UTILITY PURPOSES ` WITH A 315 VOTE(LEGAL LIMIT 2.5%) 126,423,776 No Indebtedness Incurred - Remaining Voted G 0 Debt Capacity-Open Space and Park Purposes 126,423,776 Total lndebtness Allowable(Legal Limit 7.5%) 379,271,328 Less: Indebtedness Incurred-All Purposes (9,243,176) MARGIN OF INDEBTEDNESS AVAILABLE $ 370,028,152 I L 91 s — I ow No No I No o so on No s no — i so am If MCAG No. 27E11 . Schedule 16 City of Spokane Valley Schedule of Expenditures of Federal Awards For the Year Ended December31,2005 Current Year Ex•enditures _ Grantor! ^ Other Pass Through Grantor/ CFDA Identification Program Tittle _. Number Number Indirect Direct Total • U.S.Dept of Fllou singL and Urban Development Passed Thru ,Spokane County Housing and Comm. Dev. . Montgomery Avenue 14.218 B-05-UC-53004 $ 439,850 $ • - $ 439,850 Carnahan (STEP) 14.218 B-04-UC-53004 108,162 108,162 Total CFDA N umbeir 14.218 Community Dev.Block Grants $ 548,012 $ - $ 548,012 U.S.Dept of l:ran: orta tion • Passed Thru State Dept.of Transportation Pines/Mansfield, Wilbur Rd. 20.205 CM-9932 (032) $ 15,978 $ - $ 15,978 N Valley Corrido• Project 20.205 STPUL-9932(024) 52,616 - 52,616 . Appleway Blvcl Tschirley Rd to Hodges Rd 20.205 STPUL-9932 (002) 32,233 - 32,233 . Broadway Ave-Bates Rd to Sullivan Rd 20.205 STPUL-9932(005) 9,065 9,065 - Dishman-Mica-1st Ave to Sprague Ave 20.205 STPUL-9932(011) 3,373 3,373 Argonne Over;ay-Indiana to Montgomery 20.205 STPUL-9932(012) 6,923 - 6,923 Barker Bridge Reconstruction 20.205 BRM-123(004) 113,994 - 113,994 Total CFDA Number 20.205 Highway Planning and Construction $ 234,182 $ - $ 234,182 • TOTAL OF FEDERAL AWARDS EXPENDED $ 782,194 $ - $ 782,194 , CITY OF SPOKANE VALLEY,WASHINGTON Notes to the Schedule of Expenditures of Federal Awards Note 1—Basis of Accounting The Schedule of Expenditures of Federal Awards is prepared on the same basis of accounting as the City's financial statements.. The accrual basis of accounting is used for all funds except the governmental funds which use the modified accrual basis of accounting. Note 2—Program Costs • The amounts shown as current expenditures represent only the federal portion of program costs. Actual program costs,including the City's portion,may be more than shown. • • I 1 f s 93