Snohomish County, Washington

Comprehensive Annual Financial Report

For The Year Ended December 31, 2002

Prepared by the Finance Department

Dan Clements Director of Finance

Table of Contents

Cover Page Table of Contents Introductory Section Letter of Transmittal i Organizational Chart vi Elected Officials vii Financial Section Independent's Auditor Report 1 Management Discussion & Analysis 3 Overview of the Financial Statements 3 Financial Highlights 5 Financial Analysis 5 Fund Financial Information 8 Governmental Funds 8 Proprietary Funds 9 Capital Assets Activity 11 Governmental Activities - Capital Assets 11 Business-type Activities - Capital Assets 11 Debt Management 12 Governmental Activities - Debt 12 Business-type Activities - Debt 13 Economic Factors 13 Location 13 Population 13 Economic History 13 Employment Characteristics 14 The Boeing Company 15 Paine Field 16 Port of Everett 16 US Navy Home Port 16 Transportation 16 Wood and Paper Products 16 High Technology 17 Other Issues 17 Economic Indicators 17 Request For Information 18 Basic Financial Statements Entity-wide Statements Statement of Net Assets 19 Statement of Activities 21 Fund Financial Statements - Governmental Funds Balance Sheet - Governmental Funds 22 Reconciliation of Balance Sheet to Statement of Net Assets 23 Statement of Revenues, Expenditures and Changes in Fund Balance - Governmental Funds 24 Reconciliation of Statement of Revenues, Expenditures and Changes 25 to Fund Balance to Statement of Activities Fund Financial Statements - Proprietary Funds

Table of Contents

Statement of Net Assets - Proprietary Funds 26 Statement of Revenues, Expenses and Changes in Net Assets - Proprietary Funds 28 Statement of Cash Flows - Proprietary funds 29 Fund Financial Statements - Fiduciary Funds Statement of Net Assets - Agency Funds 30 Notes to Financials 31 Note 1 Summary of Significant Accounting Policies 31 1.A Reporting Entity 31 1.B Measurement Focus, Basis of Accounting and Financial 32 Statement Presentation 1.C Assets, Liabilities and Equity 38 Note 2 Stewardship, Compliance and Accountability 42 2.A Budgetary Requirements 42 2.B Deficit Fund Equity 43 Note 3 Detail Notes on Transaction Classes/Accounts 44 3.A Cash and Investments 44 3.B Taxes Receivable 45 3.C Other Receivables 49 3.D Capital Assets 49 3.E Long Term Debt 51 3.F Employee Benefits Payable 55 3.G Accrued Liabilities 55 3.H Operating/Capital Transfers 55 3.I Net Assets/Fund Equity 57 Note 4 Other Notes 59 4.A Employee Pension And Other Benefit Plans 59 4.B Risk Management 63 4.C Commitments, Contingencies and Legal Matters 67 4.D Segment Information 69 4.E Subsequent Events 70 Note 5 Reconciliation of Government Wide and Fund Financial 70 5.A Explanation of Differences Between Balance Sheet and 70 Statement of Net Assets 5.B Explanation of Differences Between Operating Statements 72 and Statement of Activities Required Supplementary Information Budgetary Comparison Schedules - General Fund 74 Budgetary Comparison Schedules - County Road Fund 76 Budgetary Comparison Schedules - Human Services Fund 77 Combining and Other Supplementary Schedules Other Governmental (Minor) Funds Combining Financial Summary 78 Special Revenue Funds Description 79 Special Revenue Funds Balance Sheet 84 Special Revenue Funds Statement of Revenues, Expenses and Changes in Fund Balance 90 Special Revenue Funds Budgetary Comparison Schedules 98 Debt Service Funds Description 112 Debt Service Funds Balance Sheet 113

Table of Contents

Debt Service Funds Statement of Revenues, Expenses and Changes in Fund Balance 114 Debt Service Funds Budgetary Comparison Schedules 115 Capital Projects Funds Description 117 Capital Projects Funds Balance Sheet 118 Capital Projects Funds Statement of Revenues, Expenses and Changes in Fund Balance 119 Internal Service Funds 120 Combining Statement of Net Assets - Internal Service Funds 121 Combining Statement of Revenues, Expenses and Changes in Net Assets - Internal Service Funds 123 Combining Statement of Cash Flows - Internal Service Funds 124 Detail Reconciliation of Government-wide Statements to Fund Financial Statements Reconciliation of Balance Sheet to Statement of Net Assets 125 Reconciliation of Statement of Revenues, Expenditures and Changes to 127 Fund Balance to Statement of Activities Statistical Section Table 1 Expenditures By Function (Last 10 Years) 128 Table 2 Revenues By Source (Last 10 Years) 129 Table 3 Taxes Collected (Last 10 Years) 130 Table4 Assessment (Last 10 Years) 131 Table 5 Overlapping Property (Last 10 Years) 132 Table 6 Principal Taxpayers (Last 10 Years) 133 Table 7 Special Assessment Collection (Last 10 Years) 134 Table 8 Limitation Of Indebtness 135 Table 9 Ratio Of Go Debt To Assessment Value 136 Table 10 Ratio Of Debt Service Expenditures To Total Expenditures 137 Table 11 Computation Of Direct & Overlapping Debt 138 Table 12 Demographics Information 139 Table 13 Property Value, Construction, Bank Deposits (Last 10 Years) 140 Table 14 Misc. Statistics 141 Compliance Section Federal Awards 142 State and Local Awards 150

Snohomish County, Washington

Introductory Section Robert J. Drewel Snohomish County County Executive Department of Finance

July 15, 2003

Honorable Robert J. Drewel Snohomish County Executive County Administration Building Everett, Washington 98201

Re: Transmittal of 2002 Comprehensive Annual Financial Report

Dear Executive Drewel:

This correspondence will transmit the County’s year 2002 Comprehensive Annual Financial Report. The Finance Department is responsible for the accuracy, completeness, and fairness of presentation of the information contained in this report. We believe the data is presented in a manner that fairly sets forth the financial position and results of County operations as measured by the financial activity of its various funds; and that all disclosures necessary to allow interested parties to gain a maximum understanding of Snohomish County’s financial affairs have been included.

Financial Statements This report contains four major sections: Introductory, Financial, Statistical and Compliance. The Introductory Section is designed to provide basic background information about the County. The Financial Section is divided into: 1.) Management’s discussion and analysis, 2.) Government-wide and fund financial statements, 3) Notes to financial statements, and 4) other supplementary information. The Statistical Section provides community social and economic data, financial trends, and the fiscal capacity of Snohomish County for the last ten years. The Compliance Section includes a schedule of expenditures of federal awards and state assistance as required by the U.S. Single Audit Act of 1984, the U. S. Single Audit Act Amendments of 1996 and the U.S. Office of Management and Budget and the Washington State Auditor’s Office.

The County has prepared financial statements to meet the requirements of Governmental Accounting Standards Board Statement No. 34, Basic Financial Statements - and Management’s Discussion and Analysis - for State and Local Governments (GASB 34). These statements are significantly different from previously prepared financial statements. GASB 34 establishes a new four part-reporting model:

1.) Management’s Discussion and Analysis. This narrative report providing significant information about the County and the status of the County's financial position for the fiscal year ended December 31, 2002 as of December 30, 2002. Subsequent reports will be providing comparative analysis of the changes in the County’s financial position from prior year; Letter of Transmittal, continued

2.) Government-wide Financial Statements. These financial reports present an overall view of the County’s fiscal position, including governmental and business-type assets, liabilities, expenses and revenues; 3.) Fund Financial Statements. These more traditional financial reports provide information about major individual governmental and proprietary funds, along with budgetary comparisons for the general and major special revenue funds; and 4.) Notes to the Financial Statements. The Notes section provides more detailed background information about the financial information presented in the Annual Report.

Reporting Entity Primary Government Snohomish County operates under a Home Rule Charter, which was adopted by a vote of citizens in 1979, amended through the charter review process in January 1997. Independently elected administrative officials include the County Executive, the Prosecuting Attorney, the Sheriff, the Auditor, the Clerk, the Treasurer, and the Assessor who are elected at-large.

A five-member County Council, elected by district, constitutes the legislative body. Elected officials serve four-year terms, councilman elections are staggered. Snohomish County provides many services on a countywide basis and some services only to unincorporated areas.

Within appropriate jurisdictions, the county provides road construction and maintenance, law enforcement, criminal prosecution and indigent defense, superior and district court services, criminal detention and correction, tax assessment and collections, planning and community development services, elections and recordings, inquests, and an array of human services. In addition, the county owns and operates an airport and industrial park, a solid waste disposal facility, a golf course, and a data processing center.

Most funds in this report pertain to the entity of Snohomish County. Certain agency funds pertain to the County’s custodianship of assets belonging to independent governments and special purpose districts.

The Snohomish County Treasurer acts as the ex-officio treasurer for most special purpose districts of Snohomish County. Monies received from or for the special purpose districts are deposited in a centralized bank account. The County Treasurer invests or disburses moneys pursuant to instructions of the respective special purpose district’s governing body or administrative officers.

Component Unit The annual financial report includes the Pilchuck Development Corporation. This is a legally separate entity from the County but requires inclusion for reporting purposes for

ii Letter of Transmittal, continued

two reasons: The Board of Directors is appointed by the Snohomish County Council, and the Corporation is prohibited from issuing industrial revenue bonds without the approval of the county Council.

Snohomish County has joined with other local governments in developing The Snohomish County Public Facilities District, established in July 2001, for the purpose of accessing State “rebated” sales tax revenues, and using these dollars to help construct regional centers throughout the County.

Joint Venture Snohomish County participates with other local governments in the Emergency Radio System, and in 1999 formed a non-profit Entity called Snohomish Emergency Radio Systems (SERS). The purpose of SERS is to design, develop, finance, acquire, install, operate, maintain, repair, and replace the public safety communications service in Snohomish County.

Economic Development Over the past several years, County government has played an active role in furthering economic development in the region. The County has worked with the private sector and labor community to develop a Strategic Economic Investment Plan for the County. This plan will serve as the foundation to mobilize the public and private resources needed to build a strong economic future for the community.

One of the actions the County has taken to begin implementing the plan was active participation in the International Trade Alliance. The County’s goal is to “open the door” of international trade to the many small businesses located in the County.

Snohomish County also formed a Public Facilities District, and is transferring State “rebated” sales tax into four County projects: the Everett Arena, Edmonds Performing Arts Center, South Snohomish County Convention Center, and Paine Field Museum of Flight.

Budget Process On or before August 1 of each year, all agencies of the County government submit requests for appropriation to the County Executive so that a budget may be prepared. The budget is prepared showing for each fund, department, organization, activity, and object, actual expenditures for the prior year, current year estimates, and requested appropriations for the next fiscal year.

On or before October 1 of each year the proposed budget is presented to the County Council for review. The Council holds public hearings and may add to, subtract from or change appropriations, but may not change the form of the budget. The County Executive must within the revenues and reserves estimate any changes in the budget as available or the revenue estimates must be changed by an affirmative vote of four members of the Council. At least 30 days prior to the end of the fiscal year, the Council

iii Letter of Transmittal, continued

must adopt the budget. The County Executive has total veto power over appropriation ordinances approved by the Council.

The County Executive is authorized to approve budget transfers between appropriation units within an organizational unit; however the following circumstances require Council approval: 1) Revisions that alter the total expenditures of an organizational unit; 2) Revisions that affect the appropriation units of salaries and wages, personnel benefits or capital outlay; 3) Revisions that create new salaried positions; 4) Revisions that establish new programs; 5) Revisions that delete ongoing programs; 6) Revisions that affect the non-departmental organization of the General Fund.

Financial Information Readers of this report are encouraged to read Management’s Discussion and Analysis (MD&A). The MD&A provides basic financial information about the County and an overview of the County’s activities. The government-wide financial statements, consisting of a statement of net assets and a statement of activities, provide a comprehensive financial picture of the County, split between governmental activities and business-type activities.

These statements are prepared using the economic resources measurement focus and the accrual basis of accounting, where all assets, liabilities, revenues, and expenses of the County are reported. The fund financial statements provide information concerning the County’s funds and are prepared from the County’s accounting records. The County’s accounting records for general governmental operations are maintained on a modified accrual basis, with revenues being recorded when available and measurable and expenditures being recorded when the services or goods are received and the liabilities are incurred. Accounting records for the County’s proprietary funds are maintained on the accrual basis. The County operates on a fiscal year (FY) of January 1 to December 31.

Internal accounting controls for the County are designed to provide reasonable, but not absolute, assurance regarding the safeguarding of assets against loss from unauthorized use or disposition and the reliability of financial records for preparing financial statements and maintaining accountability for assets. The concept of reasonable assurance recognizes that the cost of a control should not exceed the benefits likely to be derived, and the evaluation of costs and benefits requires estimates and judgments by management.

Cash Management In accordance with RCW 36.29.020, the County adopted an investment policy, which guides the investment of County surplus funds. This policy establishes investment objectives, maturity and liquidity requirements, portfolio composition, risk and diversification requirements, and authorized investments. The primary objectives of investment activities are to preserve capital and maintain sufficient liquidity to meet anticipated cash flow needs. The secondary objective is to obtain competitive returns on

iv Letter of Transmittal, continued the investment of County surplus funds. Surplus funds were invested in direct U.S. government obligations, U.S. agency obligations, the Washington Local Government Surplus Funds Trust Fund and the Washington Local Government

Investment Trust Fund: During FY 2002, County investments had yields ranging from 2.0% to 7.515%. The average yield of the portfolio as of September 30, 2002 was 4.64%.

Other Information The Other Information section will provide you with information regarding the County’s audit, and acknowledgments.

Independent Audit The Revised Code of Washington requires an annual audit of the books of account, financial records, internal control, and legal compliance by the State Auditor. The financial statements of all County funds and account groups are included in this Comprehensive Annual Financial Report, which has earned an unqualified opinion for 2002. A copy of the auditor’s opinion letter is presented at the beginning of the “Financial Section” of this Report.

The audit was also designed to meet the requirements of Government Auditing Standards, the federal Single Audit Act of 1984, the Single Audit Act Amendments of 1996, and revised OMB Circular A-133.

Acknowledgements A comprehensive annual financial report of this nature could not have been possible without the efficient and dedicated service of the staff of the Finance Department, the Treasurer’s Office, and the various department directors/elected officials and their employees who assisted or contributed to the annual balancing, reconciliation or reported development. Further appreciation is extended to the Executive and County Council for their interest and support in conducting the financial affairs of the County in a sound and progressive manner.

Staff and I will be happy to respond to any questions or comments about the information contained in this report. Thank you for the support you have given the Finance Department.

Sincerely,

Dan Clements Director of Finance

vi Elected Officials

COUNTY EXECUTIVE Robert J. Drewel

COUNTY COUNCIL

John Koster District 1 Kirke Sievers District 2 Gary Nelson District 3 Dave Gossett District 4 Jeff Sax District 5

ELECTED OFFICE

Gail S. Rauch Assessor Robert Terwilliger Auditor Pam L. Daniels Clerk Janice Ellis Prosecuting Attorney Rick Bart Sheriff Bob Dantini Treasurer

SUPERIOR COURT JUDGES James Allendoerfer Larry E. McKeeman David F. Hulbert Ellen J. Fair George N. Bowden Joseph A. Thibodeau Gerald L. Knight Anita L. Farris Ronald L. Castleberry Richard J. Thorpe Linda C. Krese Charles S. French Kenneth L. Cowsert Thomas J. Wynne

DISTRICT COURT JUDGES

Jay F. Wisman Cascade District Court Thomas E. Kelly Everett District Court Roger M. Fisher Everett District Court Steven M. Clough Evergreen District Court Patricia L. Lyon Evergreen District Court Stephen J. Dwyer South District Court Carol A. McRae South District Court Timothy P. Ryan South District Court

vii

Snohomish County, Washington

Financial Section

Washington State Auditor Brian Sonntag (360) 902-0370 Legislative Building FAX (360) 753-0646 PO Box 40021 TDD Relay 1-800-833-6388 Olympia, Washington 98504-0021 http://www.sao.wa.gov

INDEPENDENT AUDITOR’S REPORT

July 15, 2003

The Honorable Robert J. Drewel, County Executive and Members of the County Council Snohomish County Everett, Washington

We have audited the accompanying basic financial statements of Snohomish County, Washington, as of and for the year ended December 31, 2002, as listed in the table of contents. These financial statements are the responsibility of the County’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

Our audit was performed pursuant to the Revised Code of Washington 43.09.260, under which a full report on the results of this audit will be issued. This report may include findings and recommendations on compliance matters, internal control procedures, and questionable costs or contingencies that would not be material in relation to the County’s basic financial statements taken as a whole.

In our opinion, the basic financial statements referred to above present fairly, in all material respects, the financial position of Snohomish County, Washington, as of December 31, 2002, and the results of its activities and operations and the cash flows of its governmental fund types for the year then ended in conformity with accounting principles generally accepted in the United States of America.

As described in Note 1 to the financial statements, the County adopted Governmental Accounting Standards Board Statement No. 34, Basic Financial Statements – and Management’s Discussion and Analysis – for State and Local Governments, as of January 1, 2002.

1 In accordance with Government Auditing Standards in the United States of America, we will also issue our report on our consideration of the County’s internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit.

Management’s Discussion and Analysis is not a required part of the basic audited financial statements. However, the Management’s Discussion and Analysis is supplementary information required by the Governmental Accounting Standards Board. We applied limited procedures to the Management’s Discussion and Analysis information. Those procedures consisted principally of inquiries of management regarding measurement and presentation. We compared their responses for consistency with the related audited financial information. Because of the limited nature of these procedures, we express no opinion on the Management’s Discussion and Analysis information.

The accompanying budget information is also supplementary information required by the Governmental Accounting Standards Board. The required budget information has been subjected to the audit procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to those financial statements.

Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying financial information listed as supplemental data is presented for purposes of additional analysis, and is not a required part of the basic financial statements of the County. The supplemental data has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements.

The information identified in the table of contents as the Introductory and Statistical Sections is presented for purposes of additional analysis and is not a required part of the basic financial statements of the County. Such information has not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion on it.

Sincerely,

BRIAN SONNTAG, CGFM

STATE AUDITOR

2 Management’s Discussion and Analysis For the Year Ended December 31, 2002

Management’s discussion and analysis provides an objective and easily readable analysis of the County’s financial activities. The analysis provides summary financial information for the County and should be read in conjunction with the County’s financial statements.

Our discussion and analysis of Snohomish County's financial performance provides an overview of the County's financial activities for the fiscal year ended December 31, 2002. Please read it in conjunction with the transmittal letter and the County's financial statements.

Overview Of The Financial Statements The County’s basic financial statements are comprised of three components; 1) entity-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. The entity-wide financial statements present an overall picture of the County’s financial position and results of operations. The fund financial statements present financial information for the County’s major funds. The notes to the financial statements provide additional information concerning the County’s finances that are not disclosed in the entity-wide or fund financial statements.

The entity-wide financial statements are the statement of net assets and the statement of activities. These statements use accounting methods similar to those used by private-sector companies. Emphasis is placed on the net assets of governmental activities and business-type activities and the change in net assets of the County as a primary government.

Governmental activities are primarily supported by property taxes, sales taxes, federal and state grants, and state shared revenues. Operating assessments and charges to the users of those activities supports business-type activities.

The statement of net assets presents information on all assets and liabilities of the County, with the difference between assets and liabilities reported as net assets. Net assets are reported in three categories; 1) invested in capital assets, net of related debt, 2) restricted, and 3) unrestricted. Assets, liabilities, and net assets are reported for all governmental activities separate from the assets, liabilities, and net assets of business-type activities. In addition, assets, liabilities, and net assets are reported for the Snohomish County Public Facility District (SCPFD) and the Pilchuck Development Corporation (PDC), which are considered component units of the County.

The statement of activities presents information on all revenues and expenses of the County and the change in net assets. Expenses and related program revenues are reported by major function, providing the net cost for each function performed by the County. To assist in understanding the County’s operations, expenses have been reported as governmental activities or business-type activities.

Governmental activities performed by the County include public safety, health and human services, transportation, culture and recreation, physical environment, economic environment, and general government services. Business-type activities financed by user charges include surface water management, solid waste disposal, and the Paine Field airport. Expenses and revenues of the SCPFD and PDC are reported separately from the County’s financial information. 3

Management’s Discussion and Analysis For the Year Ended December 31, 2002

Fund financial statements present financial information for governmental funds, proprietary funds, and fiduciary (agency) funds. These statements provide financial information for the major funds of the County. The financial statements for the governmental funds provide information on the current assets and liabilities of those funds, the changes in current financial resources (revenues and expenditures), and current available resources. The proprietary funds’ financial statements provide information on all assets and liabilities of those funds, the changes in the economic resources (revenues and expenses), and total economic resources. The fiduciary funds’ statement provides information concerning assets held in trust by the County on behalf of others.

Fund financial statements include a balance sheet and a statement of revenues, expenditures, and changes in fund balances for all governmental funds. A budgetary comparison schedule is provided for the County’s general fund and major special revenue funds. For the proprietary funds, which includes internal service funds in addition to business- type activities, a statement of net assets; a statement of revenues, expenses, and changes in fund net assets; and a statement of cash flows are presented. A statement of fiduciary net assets is presented for the County’s agency fund. Fund financial statements provide more detailed information about the County’s activities. Individual funds are established by the County to track revenues that are restricted to certain uses, comply with legal requirements, or account for the use of state and federal grants.

The entity-wide financial statements and the fund financial statements provide different perspectives on the County’s financial position. The entity-wide financial statements provide an overall financial picture of the County’s activities by program and function, with subtotals for governmental activities and business-type activities. These statements include all assets and liabilities using the accrual basis of accounting, which is similar to the accounting used by private sector companies. They are intended to provide an understanding of the County's overall financial health, and provide details of how the County paid for its activities and functions.

All assets of the County, including buildings, land; roads, bridges, and traffic signals are reported in the statement of net assets. All liabilities, including principal outstanding on bonds and obligations for future employee benefits are included. The statement of activities includes depreciation on all long lived assets of the County, and certain transactions between the different functions of the County have been eliminated in order to avoid “doubling up” the revenues and expenses. The fund financial statements report the County’s activities in more detail than the entity-wide statements by providing information for the County’s most significant funds, along with totals for all non-major funds. In the case of governmental activities, outlays for long-lived assets are reported as expenditures and long-term liabilities, such as general obligation bonds, are not included in the fund financial statements. Reconciliation is provided to explain the differences in accounting method between the fund financial statements and the entity wide financial statements. Please refer to Note 5 of the financial statement.

The notes to the financial statements provide additional details about the information reported in the financial statements. They explain the County’s accounting policies, and provide detailed information regarding investments, long-term debt, and pension plans.

Management’s Discussion and Analysis For the Year Ended December 31, 2002

FINANCIAL HIGHLIGHTS Total assets of the County exceeded total liabilities by $677 million (net assets). Unrestricted net assets for governmental activities were $221 million and for business-type activities were $33 million. Governmental activities restricted net assets were $107 million and were $1 million for business-type activities. Total net assets increased by $31 million. Of that amount, $30.7 million was attributable to governmental activities and $0.5 million was attributable to business- type activities. Governmental activities revenues were $331 million while expenses; including transfers out were $296 million. Business-type activities revenues, including transfers in were $63 million while business-type expenses were $62 million.

During 2002, a $4.5 million bond anticipation note was issued to finance the purchase of electronic voting equipments. Proceeds from general obligation bonds issued in early 2003 were used to repay this note. It is anticipated that general fund revenues will be used to repay the general obligation bonds. There is currently legislation before Congress that may provide federal funding for the purchase of voting equipment. This may be a possible source of revenue to finance the repayment of the general obligation debt. FINANCIAL ANALYSIS Snohomish County’s net assets total $677 million. The following schedule provides a summary of the assets, liabilities, and net assets of the County. As GASB Statement No. 34 was implemented for 2002, prior year comparable data was not available. Comparable data will be provided in subsequent annual financial reports.

Net Assets

Governmental Business-type Total Activities Activities Assets Current Assets $ 363,584,492 $ 44,151,885 $ 407,736,377 Restricted Assets 172,983 3,253,086 3,426,069 Noncurrent Assets 22,727,805 37,007,727 59,735,532 Capital Assets 449,060,052 135,425,964 584,486,016 Total Assets 835,545,332 219,838,662 1,055,383,994

Liabilities Current Liabilities 54,015,970 15,901,478 69,917,448 Restricted Liabilities - 2,232,592 2,232,592 Noncurrent Liabilities 227,562,769 78,864,884 306,427,653 Total Liabilities 281,578,739 96,998,954 378,577,693

Net Assets Invested in Capital, Net of Related Debt 226,040,998 89,174,846 315,215,844 Restricted 106,853,331 1,020,494 107,873,825 Unrestricted 221,072,264 32,644,367 253,716,632 Total Net Assets $ 553,966,593 $ 122,839,707 $ 676,806,301

The County’s total assets were $1 billion as of December 31, 2002. Capital assets represent $584 million of this amount. As required by GASB Statement No. 34, the County now reports its infrastructure assets. At December 31, 2002 these assets amounted to $226 million, net of accumulated depreciation. The County’s current assets consist of $364 million of cash and investments, $42 million of receivables, net of allowance for uncollectible accounts, and 5

Management’s Discussion and Analysis For the Year Ended December 31, 2002 miscellaneous other current assets of $1.6 million. In addition, the County has restricted assets for debt service and future landfill closure costs of $3.4 million. Total non-current assets include $17.5 million for the County’s equity interest in the Snohomish Emergency Radio System joint venture; $36 million for property held for future use, and $6 million for notes/contracts receivable and deferred charges.

At December 31, 2002, the County had outstanding liabilities of $379 million. General obligation bonds and other long-term loans payable were $300.7 million, $13.8 of which was due within one year. Other liabilities consist of accounts payable of $22.7 million, deferred revenues of 23 million, accrued liabilities of $3.9 million and the bond anticipation note of $4.5 million as discussed earlier. A liability of $11.8 million was recorded for general liability, workers’ compensation and health benefit claims, of which $1.3 million was due within one year. Restricted liabilities of $2.2 million represent future landfill closure costs and solid waste customer deposits. Other non-current liabilities include compensated absences of $8.9 million.

The largest portion of the County’s net assets, $315.2 million, was invested in capital assets, net of the debt used to acquire these assets. The county’s capital assets are used for operations and for providing services. These assets are not available for future spending or for payment of its related debt. The County reported $107.9 million of restricted net assets. These net assets are subject to external legal or contractual restrictions, such as those imposed by the Revised Code of Washington or by contractual agreements with parties outside the County. The remaining balance of $253.7 million represents the unrestricted net assets, the amount that the County may use to meet its ongoing obligations.

The County’s net assets increased by $30.7 million for governmental activities and $.5 million for business-type activities, representing a total change in net assets of $31.2 million. The following schedule provides a summary of the changes in net assets:

Changes in Net Assets

Governmental Business-type Total Activities Activities Revenues

Program Revenues Charges for Services $ 5 5,029,616 $ 4 7,655,166 $ 102,684,782 Operating Grants and Contributions 8 5,343,305 1,3 22,200 86,665,505 Capital Grants and Contributions 1 4,116,283 3,3 00,937 17,417,220 Total Program Revenues $ 154,489,203 $ 52 ,278,303 $ 206,767,507

Management’s Discussion and Analysis For the Year Ended December 31, 2002

Changes in Net Assets (Continued)

Governmental Business-type Total Activities Activities General Revenues Property Taxes $ 103,977,910 $ - $ 103,977,910 Sales/Use Taxes 31,765,803 - 31,765,803 Other Taxes 22,889,381 - 22,889,381 Operating Assessments 21,171 5,623, 474 5,644,645 Interest Earnings 10,611,292 856, 063 11,467,355 Equity Adjustment in Joint Ventures (665,998) - (665,998) Gain (Loss) in Disposition of Capital Assets 806,041 2,214, 400 3,020,441 Contribitions and Donations from Private Sources 1,778,882 5 ,000 1,783,882 Miscellaenous Revenues 5,218,990 66, 478 5,285,468 Total General Revenues $ 176,403,473 $ 8,765, 415 $ 185,168,887

Total Revenues $ 330,892,677 $ 61,043, 718 $ 391, 936,394

Expenses General Government $ 53 ,841,153 $ - $ 53,841,153 Judicial 17,916,332 - 17,916,332 Public Safety 102,207,111 - 102,207,111 Physical Environment 1,060,676 - 1,060,676 Transportation 47,055,056 - 47,055,056 Health and Human Services 46,769,865 - 46,769,865 Economic Environment 6,190,567 - 6,190,567 Culture and Recreation 9,707,267 - 9,707,267 Interest on Long-Term Debt 13,625,354 - 13,625,354 Airport - 9,977, 571 9,977,571 Surface Water - 14,726, 090 14,726,090 Garbage and Solid Waste - 37,666, 718 37,666,718 Total Expenses $ 298,373,382 $ 62,370, 379 $ 360, 743,760

Change in Net Assets before Transfers $ 32 ,519,295 $ (1,326,661) $ 31, 192,634 Transfers In (Out) ( 1,804,304) 1,804, 304 - Change In Net Assets $ 30 ,714,991 $ 477, 642 $ 31, 192,634

Total revenues for the County were $391.9 million. Governmental activities provided 84% or $330.9 million while business-type activities provided 16% or $61 million. Property taxes provided 34% or $103 million of the total revenues for governmental activities, followed by operating grants and contributions of $85.3 million. Equity interest was reduced by $.7 million to cover administrative expenses of the SERS joint venture during the 800MHZ development phase. Most of the governmental activities resources were spent for Public Safety (34%), General Government (18%), Health and Human Services (16%) and Transportation (16%). Interest on long-term debt of $13.6 million was 5% of governmental activities expenses for 2002.

Revenues for business-type activities consisted of charges for services of $47.7 million, operating assessments of $5.6 million and grants and contributions of $4.3 million. A gain in the sale of property by the Airport to the Parks Department provided $2.2 million in revenues.

Management’s Discussion and Analysis For the Year Ended December 31, 2002

Expenses for Solid Waste Management represented 61% of total expenses for business-type activities, Surface Water Management expenses were at 24%, and Airport expenses were at 15%. FUND FINANCIAL INFORMATION Governmental Funds The general fund, county road fund, human services fund and the campus redevelopment capital fund are the County’s major funds. These funds account for 61% of total governmental fund assets and 59% of total governmental fund balances. Governmental funds total assets amounted to $329 million and total liabilities were $26.6 million. The governmental funds’ uses of funds exceeded the sources of funds, resulting in a net change in fund balance with a deficit of $12.2 million. This was largely due to expenditures in the campus redevelopment capital fund, which were financed by bond proceeds received in 2001. The total fund balance for all governmental funds at December 31, 2002 was $302.9 million.

Sources and Uses of Funds - Governmental Funds

180,000 160,000 140,000 120,000 100,000 Sources of Funds 80,000 Uses of Funds

housands $) 60,000 n t i

( 40,000 20,000 0

d nd n u und und F F Fu F unds d s F al es t c tal ner vi rojec en Ge y Roa er m S l P a er an it Count m Gov Hu Cap her Ot

General Fund The County’s general fund is the main operating fund of the County. It is used to account for all financial resources that are not restricted by state or federal laws, or other externally imposed requirements. As of December 31, 2002, total assets were $28.6 million and total liabilities were $7.4 million. The ending fund balance of $21.2 million represents approximately 13% of the budgeted uses of funds for the next fiscal year. The net change in fund balance for the general fund in 2002 was a deficit of $5.2 million. This deficit was largely due to transfers out to other funds for the campus redevelopment project.

Management’s Discussion and Analysis For the Year Ended December 31, 2002

Other Governmental Funds The County Road Fund accounts for the construction, maintenance and inspection of county streets, roads, and bridges and other countywide public works projects. The fund reported total assets of $48.4 million, total liabilities of $5.1 million and an ending fund balance of $43.3 million. County road sources of funds exceeded the uses of funds by $3 million.

The Human Services Fund accounts for the administration, planning, development and provision of the following services: energy assistance; long term care and aging; developmental disabilities; mental health; alcohol and other drugs; community services; children and youth; veteran's relief; and other human services in Snohomish County. Total assets for this fund were $6.5 million and total liabilities were $5.2 million with ending fund balance at $1.3 million.

The Capital Projects Fund accounts for major County construction projects, including the Campus Redevelopment Initiative (CRI) project. This project includes the construction of the new County administration building, corrections building and parking garage. It was created by Ordinance 00-071 effective January 1, 2001. Resources for this fund come from bond proceeds. Additional funding may be received from the general fund, the real estate excise tax fund, or any other County fund upon recommendation by the County Executive and upon approval by the County Council. The fund reported total assets of $117.6 million and total liabilities of $2.8 million. A deficit in the change in fund balance of $6.8 million resulted in the ending fund balance of $114.7 million.

The County has 29 other special revenue funds, 5 debt service funds and 6 capital projects funds. These funds reported total assets of $128.3 million, total liabilities o f $5.9 million and fund balances of $122.3 million. $25.6 million of the ending fund balance was reserved for debt service. These funds reported a change in net assets with a deficit of $3.3 million. Proprietary Funds The County reported 3 major enterprise funds that represented the business-type activities in the government-wide financial statements. There are 5 internal service funds that account for the operation of services provided to the different departments of the County. Since, the principal users of these services are the County’s governmental activities, they are consolidated into the governmental column in the government-wide financial statements.

Net Assets - Proprietary Funds

Solid Waste Airport Surface Total Internal Service Water Funds Assets Current Assets $ 27,324,136 $ 8, 376,278 $ 8, 451,471 $ 44,151,885 $ 32,396,785 Restricted Assets 3,162,126 - 9 0,960 3,253,086 - Noncurrent Assets 36,909,725 - 9 8,002 37,007,727 - Capital Assets 42,077,309 73, 548,119 19, 800,536 135,425,964 31,933,926 Total Assets $ 109,473,296 $ 81, 924,397 $ 28, 440,969 $ 219,838,662 $ 64,330,711

Management’s Discussion and Analysis For the Year Ended December 31, 2002

Net Assets - Proprietary Funds (continued)

Solid Waste Airport Surface Total Internal Service Water Funds

Liabilities Current Liabilities $ 10,343,461 $ 3,081,727 $ 2,476,290 $ 15,901,478 $ 4,765,013 Restricted Liabilities 2,232,592 - - 2,232,592 - Noncurrent Liabilities 44,444,367 19,600,324 14,820,194 78,864,885 14,596,499 Total Liabilities 57,020,420 22,682,051 17,296,484 96,998,955 19,361,512

Net Assets Invested in Capital, Net of Related Debt 31,112,240 53,280,142 4,782,464 89,174,846 27,923,623 Restricted 929,534 - 90,960 1,020,494 16,582,539 Unrestricted 20,411,102 5,962,204 6,271,061 32,644,367 463,037 Total Net Assets $ 52,452,876 $ 59,242,346 $ 11,144,485 $ 122,839,707 $ 44,969,199

Changes in Net Assets

Solid Waste Airport Surface Total Total Water Operating Income (Loss) $ 4,158,336 $ (247,562) $ (7,659,087) $ ( 3,748,313) $ ( 2,318,175) Non-Operating Revenues (Expenses) ( 1,331,737) 3,952,493 (199,102) 2,421,652 1,057,986 Contributions and Transfers ( 770,974) - 2,575,279 1,804,305 ( 2,636,766) Changes in Net Assets $ 2,055,624 $ 3,704,931 $ (5,282,911) $ 477,644 $ (3,896,955)

Statement of Cash Flow

Solid Waste Airport Surface Total Total Water Cash Flow from Operating Activities $ 6,869,032 $ 2,029,195 $ (7,860,859) $ 1,037,368 $ 1,124,996 Cash Flow from Capital and Related Financing Activities ( 2,238,650) (2,839,094) (2,026,950) ( 7,104,694) ( 6,744,982) Cash Flow from NonCapital Financing Activities 37,833 1,370 2,468,343 2,507,546 ( 1,166,930) Cash Flow from Investing Activities 418,028 246,530 234,912 899,470 693,838 Net Increase(Decrease in Cash and Cash Equivalents 5,086,243 (561,999) (7,184,554) ( 2,660,310) ( 6,093,078) Cash and Cash Equivalents, January 1, 2002 21,960,637 7,455,925 15,008,958 44,425,521 36,595,826 Cash and Cash Equivalents, December 1, 2002 $ 27,046,880 $ 6,893,926 $ 7,824,404 $ 41,765,211 $ 30,502,748

Major Enterprise Funds Solid Waste Management Fund This fund is used to account for solid waste disposal operations, capital improvements and debt service. Restricted investments in the amount of $3.2 million represent funds set aside to

Management’s Discussion and Analysis For the Year Ended December 31, 2002 finance long-term landfill post-closure care costs. Total assets as of December 31, 2002 were $109.5 million, total liabilities were $57.2 million, and net assets were $52.5 million. Operating income was $4.2 million, an increase of $449,242 over last year’s operating income.

Airport Fund This fund is used to account for the operation, capital improvements and debt service of Paine Field, Snohomish County Airport. Total assets were $81.9 million. Operating loss was $247,562, a decrease of $825,266 from last year's operating loss, due to a 12% increase in revenues from leases. During the year, the fund earned $2.2 million from the sale of property to the County Parks Department for the purchase of a community little league baseball field. To accommodate an increased demand, 70 new hangars were built with 35 more planned for future construction. An $18 million runway safety project is underway and is to be completed by year-end 2003.

Surface Water Management Fund This fund is used to account for the operations of the Surface Water Management Division. This purpose of this division is to protect and enhance water quality and aquatic habitats, and to minimize damage from flooding and erosion. Total assets as of December 31, 2002 were $28.4 million, total liabilities were $17.3 million, and net assets were $11.1 million.

Surface water’s 2002 operating loss of $7.6 million was an increase of $2.8 million from last year’s operating loss. The increased operating loss was due to expenditures for a comprehensive drainage needs assessment study and inventory, which were financed with the proceeds of a 2001 bond issue. Internal Service Funds The County’s internal service funds are used to provide fleet management, information services, risk management, pits and quarries and employee benefits. Total assets as of December 31, 2002 were 64.3 million, total liabilities were $19.4 million and net assets were $45 million.

Internal service funds operating loss of $2.3 million was a decrease of $6.5 million from last year’s operating income. The increase in operating loss was due to the estimated probable losses for the county’s general liability and employee benefit costs. These estimates are from an actuarially based analysis prepared by MARSH, Inc. The County intends to adjust future rate setting to cover these estimated costs. CAPITAL ASSETS ACTIVITY The following schedule provides a summary of the County’s capital assets activity. Snohomish County’s total investment in capital assets, including construction in progress, amounts to $584 million. Infrastructure assets, net of accumulated depreciation, represent $227 million of capital assets. The minimum threshold for asset capitalization was changed from $2,000 to $5,000 as of January 1, 2002. Existing assets with a cost of less than $5,000 were retired and the resulting charges of $1,384,998 for the governmental activities and $223,429 for the business-type activities were reported as a cumulative effect of a change in accounting principle. An increase in net assets of $252,156,759 for the retroactive capitalization of infrastructure as required by GASB Statement No. 34 was credited as a cumulative effect of a change in accounting principle. GASB Statement No. 34 also requires that depreciation

Management’s Discussion and Analysis For the Year Ended December 31, 2002

expense on the capital assets purchased by the governmental funds be reported on the statement of activities. Retroactive depreciation on these assets amounted to $49,053,477 and was reported as cumulative effect of a change in accounting principle

Capital Assets

Governmental Business-type Total Activities Activities Capital Assets Land $ 117,708,040 $ 33,01 0,853 $ 150,718,893 Building and Structures, net 38,519,486 16,65 8,078 55,177,564 Other Improvements, net 11,377,277 20,22 8,306 31,605,583 Machinery and Equipment, net 35,582,087 69 2,570 36,274,657 Infrastructure Assets, net 216,136,615 10,53 7,066 226,673,681 Construction In Progress 29,350,443 53,90 5,573 83,256,016 Intangibles, net 386,104 39 3,518 779,622 Total Capital Assets $ 449,060,052 $ 135,425,964 $ 584,486,016

Governmental Activities - Capital Assets The County has been purchasing land in order to comply with legally mandated open space and conservation requirements. A 1997 conservation futures bond issue has financed the bulk of these purchases. Land purchases for 2002 amounted to $6 million, bringing cumulative purchases to $25 million. Construction in progress increased by $12 million in the governmental activities due to the campus redevelopment project. Project completion is to be in 2004. Business-type Activities - Capital Assets Business-type activities reported an increase in construction in progress due to the ongoing construction of the new Airport Road Recycling and Transfer Station for $17.6 million. The Southwest Recycling and Transfer Station was closed in 2002 for reconstruction and expansion. Airport’s construction in progress resulted from the construction of the 70 new hangars and the runway safety project. The project includes shifting the runway 430 feet to the south, construction of retainage walls, construction of a new perimeter road, removal of 500,000 cubic yards of dirt, repaving and repainting the runway, installation of security fencing and gates around the perimeter of the airport. DEBT MANAGEMENT Governmental Activities - Debt In August of 2002, the County issued a $4.5 million bond anticipation note to Bank of America for the acquisition of electronic voting equipment. The note bears interest on the outstanding principal balance from its date at an annual rate of 49% of the bank’s prime rate, payable quarterly beginning on October 1, 2002 and on each January 1, April 1, July 1, and October 1 thereafter. Interest paid on this note totaled $45,603, of which $3,246 was paid in 2002. The note was paid on March 30, 2003, upon the issuance of the 2003 limited tax general obligation bonds.

Total principal payments made during 2002 for governmental activities were $6.3 million. Interest expense and other debt service costs for 2002 were $13.6 million.

Management’s Discussion and Analysis For the Year Ended December 31, 2002

Business-Type Activities - Debt The Solid Waste Management Fund received loan proceeds in the amount $17.25 million from the Washington State Public Works Trust Fund Board to finance the construction of the new Airport Road Recycling and Transfer Station and the Southwest Recycling and Transfer Station. The interest rates on this debt were 0.5% and 1%, payable annually on July 1st. Total principal payments made during 2002 for business-type activities were $4.4 million. Interest expense and other debt service costs for 2002 were $4 million. ECONOMIC FACTORS Location Snohomish County is located in northwest Washington State, north of Seattle, and is approximately 2,098 square miles in size. Snohomish County is Washington State’s third most populous county, after King and Pierce. Population The County’s population is evenly distributed between incorporated and unincorporated areas. Everett, the sixth largest city in Washington State, serves as the County seat. Historical population figures for the County and the City of Everett are shown as follows:

Snohomish % City of Year County Change Everett 2002* 628,000 1.6% 96,070 2001* 618,600 2.1% 95,990 2000 606,024 3.9% 87,520 1999 583,300 2.7% 86,730 1998 568,100 3.1% 84,330 1997 551,200 3.1% 84,130 ______Source: Washington State Office of Financial Management *Estimated Economic History Historical dependence on forestry and wood products manufacturing in Snohomish County has been replaced with diversification into airplane manufacturing, high technology and an expanding variety of other industrial and commercial businesses. Governmental agencies and the military, with the development of the U. S. Navy homeport in Everett, contribute significantly to the economy.

Snohomish County is benefiting from significant economic and population growth in western Washington over the last decade and has been among the fastest growing counties in the State. Between 1993 and 2002, the County’s population increased 24%, to a total of 628,000 residents. This rate of increase was more than twice the statewide pace. As Seattle and King County, directly to the south, run out of developable land, continued business and residential growth in Snohomish County is expected to continue.

Management’s Discussion and Analysis For the Year Ended December 31, 2002

Employment Characteristics In the past decade, Snohomish County has seen a significant increase in employment. However, due to major lay-offs at the Boeing Corporation, total county employment has declined from a peak of 330,400 in 1999 to 321,900 as of December 2002. Current indications are that employment levels have stabilized, and slow growth continuing into 2005 is predicted.

Labor Force and Employment Data

Civilian Percent Year Labor Force Employment Unemployment Unemployment 2002* 347,200 321,900 25,300 7.3% 2001 334,900 317,000 17,900 5.4% 2000 343,800 329,700 14,100 4.1% 1999 343,900 330,400 13,500 3.9% 1998 330,200 319,700 10,500 3.2% 1997 315,700 304,800 10,900 3.5% ______Source: Washington State Department of Employment Security *Preliminary subject to change.

Nonagricultural Wage and Salary Employment

2002* 2001 2000 1999 1998 1997 TOTAL $ 206,400 $ 215,600 $ 2 15,600 $ 216,900 $ 220,600 $ 2 07,800

Construction & Mining 14, 000 16,700 17,300 15,900 14,600 13,700 Manufacturing 46, 700 52,900 54,500 60,400 65,400 63,000 Transportation & Public Utilities 5 ,600 5,800 6,100 6,400 6,500 6,100 Retail & Wholesale 48,800 48,900 49,100 48,000 49,900 45,400 Finance, Insurance & Real Estate 10, 700 10,100 9,400 10,000 9,300 8,800 Services 46, 100 47,200 46,900 44,600 43,500 41,300 Government 34, 500 34,000 32,300 31,700 31,400 29,600 ______Source: Washington State Department of Employment Security *Preliminary subject to change.

The major private and public employers in the County are shown on the following table:

Major Employers (As of October 2002)

EMPLOYER PRODUCT/BUSINESS EMPLOYMENT The Boeing Company Commercial Aircraft *20,000 Naval Station Everett Military 6,087 State Of Washington State Government 3,023

Management’s Discussion and Analysis For the Year Ended December 31, 2002

EMPLOYER PRODUCT/BUSINESS EMPLOYMENT Providence Everett Medical Center Health Care 2,624 Snohomish County County Government 2,566 Premera Blue Cross Health Insurance 1,693 BF Goodrich Aerospace Aircraft Maintenance & Renovation 1,650 Verizon Telecommunications 1,633 Edmonds School District Education 1,425 Phillips Medical Systems ATL Medical Equipment 1,296 Tulalip Tribes Casino 1,283 Marysville School District Education 1,281 John Fluke Electronics Manufacturing 1,168 Everett School District Education 1,160 City Of Everett City Government 1,084 Everett Clinic Health Care 1,010 Stevens Healthcare Heath Care 1,005 Kimberly-Clark Corporation Consumer Paper Products 903 ______Source: Economic Development Council, Snohomish County *Approximate number The Boeing Company The Boeing Company (“Boeing”) remains the County’s largest employer, with an estimated 20,000 workers in Snohomish County as of October 2002. Boeing, the world’s largest commercial aircraft manufacturer, established an airplane manufacturing plant at the south end of the City of Everett in 1966. The plant was built to assemble wide-bodied 747 aircraft. In 1980 the plant was expanded for production of the new-generation 767 wide-body twinjet, and in the early 1990’s Boeing completed a $1.5 billion expansion project to accommodate 777 production. Located adjacent to the Snohomish County Airport (Paine Field), the complex presently includes the world’s largest volume building with 472 million cubic feet. Boeing has two office buildings in Everett totaling 1.2 million square feet and housing primarily engineering and administrative staff.

Boeing recently moved its’ corporate headquarters from the Seattle area to Chicago, Illinois. As of October 2002, Boeing had 168,400 employees nationwide (including subsidiaries and contingent labor), of which 62,600 were based in Washington State.

Through December 2002, Boeing had the following orders and deliveries for aircraft assembled in Everett:

Aircraft Firm Orders Deliveries to Date to date 767 931 892 747 1,371 1,319 777 619 424 Total 2,921 2,635 ______Source: The Boeing Company

Management’s Discussion and Analysis For the Year Ended December 31, 2002

Paine Field The Snohomish County Airport, Paine Field, lies just southwest of Everett. Boeing uses the airport in conjunction with its Everett production facility. The Federal Aviation Administration has designated Paine Field as a “reliever airport", to relieve congestion at Seattle-Tacoma International Airport when high volume and weather conditions dictate. The master plan for the airport includes plans for continued industrial development as well as wetlands preservation and development of a 16-acre Wetlands Education Public Park with a variety of amenities. The largest employer, outside of Boeing, at Paine Field is B. F. Goodrich Aerospace, which employs approximately 1,693 people in the refurbishing and overhauling of aircraft. Port of Everett The Port of Everett (the “Port”), a major deep-water port on Puget Sound, is an important element in the County’s economy. The Port’s operations include nine deep-water piers, three steel warehouses and the second largest marina on the west coast, with 2,050 moorage slips. The Port handles approximately one million tons of cargo per year. A 400-slip expansion project is currently in the planning stage. A commercial village with shops and restaurants is also part of the marina, which has become an important local tourist attraction. U.S. Navy Home Port In 1984, the U.S. Navy announced its intention to construct a Navy “home port” in Everett. Construction of the base was completed in 1992. There are over 6,000 military and a number of civilian employees at the base. Eight ships are currently based in Everett, including the aircraft carrier USS Abraham Lincoln. Transportation Transportation is an important aspect of the County’s economy. In addition to the Port activity, the area is served by east-west and north-south rail service, including Burlington Northern for freight and Amtrak for passenger service. Interstate 5, running north and south, provides access to Seattle and Tacoma and Interstate 405 connects to Bellevue and other communities east of Seattle. Five airfields in the County, including Paine Field, handle private and chartered, aircraft. The nearest major commercial airport is Seattle-Tacoma International Airport, 55 miles south of Everett. Everett Transit and Community Transit provide bus transportation in and around Everett. Two Washington State ferry docks are located in the County for commuters to the Olympic Peninsula from Edmonds and to Whidbey Island from Mukilteo, just south of Everett.

Retail trade is a major contributor to the County’s economy. The Everett Mall has four anchor stores, 128 shops, and 772,000 square feet of leasable space. Alderwood Mall, one of the Northwest’s largest retail centers, is located in Lynnwood and has 135 shops and 5 department stores, encompassing 1,100,000 square feet of space. Wood and Paper Products The wood products industry remains an important part of the County’s economy. The largest employer in the wood products industry is Kimberly Clark Corporation, which has approximately 900 employees at its pulp and paper production center in Everett. Lumber processing and the production of finished wood products also contribute to the area’s wood products industry. 16

Management’s Discussion and Analysis For the Year Ended December 31, 2002

High Technology In south Snohomish County, a "technology corridor" has developed which includes over 18 million square feet of commercial space in business parks in a ten-mile area, which spans from the Cities of Bothell to Everett. The corridor includes seven major business centers. The Koll North Creek complex and the Quadrant Business Park - Bothell are located in King County while the Canyon Park Business Center, Harbor Pointe, Seaway Center, Quadrant I-5 Business Center and Quadrant Monte Villa Center are all in Snohomish County.

Some of the major companies with facilities in the corridor include: Advance Technology Laboratories, Allstate Insurance, Norpro, Microsoft Corporation, The Boeing Company, Alliant Techsystems, Verizon Northwest, Immunex Corporation, Motorola Mobile Date, Panlabs, and Traveling Software. The technology corridor is expected to continue to be a growing segment of the County’s economy. Other Issues A variety of additional issues may have an effect on the economy of the Snohomish County area, including but not limited to transportation infrastructure, endangered species listings, the real estate market, and energy costs. The effects of these issues are interdependent and cannot be quantified. Economic Indicators The following are economic indicators for the County.

Personal and Per Capita Personal Income

Year Total Personal Per Capita Income (000) Income *2001 18,223,956 $ 29,460 2000 17,207,445 28,394 1999 16,767,370 28,105 1998 15,871,732 27,109 1997 14,828,432 26,170 1996 13,142,857 24,146 ______Source: U.S. Bureau of Economic Analysis *Latest year available. Preliminary subject to change.

Taxable Retail Sales

Year Snohomish County 2002* $ 5,516,629,993 2001 7,516,540,884 2000 7,473,716,670 1999 7,134,904,716

Management’s Discussion and Analysis For the Year Ended December 31, 2002

Year Snohomish County 1998 6,669,443,890 1997 6,278,819,441 1996 5,559,488,949 ______Source: Washington State Department of Revenue *First 3 quarters of 2002; latest dates available. REQUEST FOR INFORMATION This report was prepared by the Snohomish County Finance Department. Questions concerning this report or requests for additional information should be addressed to the Finance Department, 3000 Rockefeller M/S 610 Everett, WA 98201, or by calling 425-388- 3401, or by visiting our website at http://www.co.snohomish.wa.us/finance/.

Statement of Net Assets As of December 31, 2002

Primary Government

Governmental Business-type Component Activities Activities Total Units ASSETS

Current Assets Cash $ 45,840,350 $ 9,611,077 $ 55,451,427 $ 290,413 Investments 279,992,285 28,992,019 308,984,304 596,964 Taxes Receivables 6,244,171 311,430 6,555,601 - Other Receivables, Net 6,374,121 3,267,884 9,642,005 - Interest Receivable 670,178 85,060 755,238 - Due From Other Governments 22,825,784 1,884,415 24,710,199 - Inventories 926,949 - 926,949 - Prepayments 710,654 - 710,654 - Total Current Assets 363,584,492 44,151,885 407,736,377 887,377

Restricted Assets Cash 1,150 48,689 49,839 - Investments 171,833 3,113,437 3,285,270 - Other Restricted Assets - 90,960 90,960 - Total Restricted Assets 172,983 3,253,086 3,426,069 -

Non-Current Assets Notes/Contract Receivable 5,157,261 - 5,157,261 - Investment in Joint Venture 17,570,484 - 17,570,484 - Deferred Charges 60 1,257,588 1,257,648 - Property Held in Trust for Future use - 35,750,139 35,750,139 - Total Non-Current Assets 22,727,805 37,007,727 59,735,532 -

Capital Assets Land 117,708,040 33,010,853 150,718,893 - Building and Structures, Net 38,519,486 16,658,078 55,177,564 - Other Improvements, Net 11,377,277 20,228,306 31,605,583 - Machinery & Equipment, Net 35,582,087 692,570 36,274,657 - Infrastructure Assets, Net 216,136,615 10,537,066 226,673,681 - Construction in Progress 29,350,443 53,905,573 83,256,016 - Intangible Assets, Net 386,104 393,518 779,622 - Total Capital Assets 449,060,052 135,425,964 584,486,016 -

Total Assets $ 835,545,332 $ 219,838,662 $ 1,055,383,994 $ 887,377

The accompanying notes are an integral part of the financial statements. 19 Statement of Net Assets As of December 31, 2002

Primary Government

Governmental Business-type Component Activities Activities Total Units

LIABILITIES

Current Liabilities Accounts Payable 13,630,769 9,085,846 22,716,615 1,523 Claims and Judgments Payable 1,335,000 - 1,335,000 - Due to Other Governments 383,314 - 383,314 - Accrued Liabilities 3,270,089 661,383 3,931,472 - Deferred Revenue 22,183,502 916,222 23,099,724 - Custodial Accounts 52,272 - 52,272 - Bonds Anticipation Notes Payable 4,539,319 - 4,539,319 - Bonds, Notes and Loans Payable 8,621,705 5,238,027 13,859,732 - Total Current Liabilities 54,015,969 15,901,478 69,917,447 1,523

Restricted Liabilities Payables from Restricted Assets - 48,689 48,689 - Landfill Closure Costs Payable - 2,183,903 2,183,903 - Total Restricted Liabilities - 2,232,592 2,232,592 -

Non-Current Liabilities Employee Benefits Payable 8,108,101 844,066 8,952,167 - Claims and Judgments Payable 10,538,316 - 10,538,316 - Bonds, Notes and Loans Payable 208,916,352 78,020,818 286,937,170 - Total Non-Current Liabilities 227,562,769 78,864,884 306,427,653 -

Total Liabilities 281,578,739 96,998,955 378,577,693 1,523

NET ASSETS

Invested in Capital Assets, Net of Related Debt 226,040,998 89,174,846 315,215,844 - Restricted for: General Government 36,445,188 - 36,445,188 - Public Safety 2,089,071 - 2,089,071 - Health & Human Services 4,479,465 - 4,479,465 - Culture & Recreation 3,694,359 - 3,694,359 - Transportation 60,145,248 - 60,145,248 - Debt Service - 90,960 90,960 - Landfill Closure Costs - 929,534 929,534 - Total Restricted Net Assets 106,853,331 1,020,494 107,873,825 -

Unrestricted Net Assets 221,072,264 32,644,367 253,716,632 885,854

Total Net Assets $ 553,966,593 $ 122,839,707 $ 676,806,301 $ 885,854

The accompanying notes are an integral part of the financial statements. 20 Statement of Activities For the Year Ending December 31, 2002

Net Revenue (Expense) and Changes in Net Assets

Program Revenues Primary Government

Expenses Charges for Grants and Contributions Governmental Business-type Total Component Services Operating Capital Activities Activities Units

Functions/Programs

Governmental Activities General Government $ 53,841,154 $ 17,749,694 $ 10,160,785 $ - $ (25,930,675) $ - $ (25,930,675) $ - Judicial 17,916,332 7,156,915 468,820 - (10,290,597) - (10,290,597) - Public Safety 102,207,111 8,418,987 8,479,941 - (85,308,184) - (85,308,184) - Physical Environment 1,060,676 43,425 173,786 - (843,465) - (843,465) - Transportation 47,055,056 322,096 16,883,807 14,077,283 (15,771,871) - (15,771,871) - Health and Human Services 46,769,865 54,990 41,514,028 39,000 (5,161,847) - (5,161,847) - Economic Environment 6,190,567 19,906,974 7,577,857 - 21,294,264 - 21,294,264 - Culture and Recreation 9,707,267 1,376,535 84,283 - (8,246,449) - (8,246,449) - Interest on Long-Term Debt 13,625,354 - - - (13,625,354) - (13,625,354) -

Total Government Activities 298,373,382 55,029,616 85,343,305 14,116,283 (143,884,178) - (143,884,178) -

Business-type Activities Airport 9,977,571 8,465,649 1,200 2,805,143 - 1,294,421 1,294,421 - Surface Water Management 14,726,090 157,173 327,527 495,794 - (13,745,596) (13,745,596) - Solid Waste Management 37,666,718 39,032,344 993,473 - - 2,359,099 2,359,099 -

Total Business-type Activities 62,370,379 47,655,166 1,322,200 3,300,937 - (10,092,076) (10,092,076) -

Total Primary Government 360,743,761 102,684,782 86,665,505 17,417,220 (143,884,178) (10,092,076) (153,976,254) -

Component Units Public Facility District (PFD) 718,151 ------(718,151) Pilchuck Development Corp (PDC) 327 ------(327)

Total Component Units 718,478 ------(718,478)

General Revenue

Property Taxes $ 103,977,910 $ - $ 103,977,910 $ - Sales/Use Tax 31,765,803 - 31,765,803 1,506,425 Other Taxes 22,889,381 - 22,889,381 - Operating Assessment 21,171 5,623,474 5,644,645 - Interest and Investment Earnings 10,611,292 856,063 11,467,355 6,077 Miscellaneous Revenues 5,218,990 66,478 5,285,468 - Contributions and Donations from Private Sources 1,778,882 5,000 1,783,882 - Gain(Loss) in Joint Ventures (665,998) - (665,998) - Disposition of Capital Assets 806,041 2,214,400 3,020,441 -

Total General Revenue 176,403,473 8,765,415 185,168,888 1,512,503

Transfers (1,804,304) 1,804,304 - -

Total General Revenue & Transfers 174,599,170 10,569,718 185,168,888 1,512,503

Change in Net Assets 30,714,991 477,642 31,192,634 794,025

Beginning Net Assets, Restated 523,251,602 122,362,065 645,613,667 91,829

Ending Net Assets $ 553,966,593 $ 122,839,707 $ 676,806,300 $ 885,854

The accompanying notes are an integral part of the financial statements. 21 Balance Sheet Governmental Funds As of December 31, 2002

General County Human Capital Other Total Fund Roads Services Projects Governmental Fund Fund Fund Fund

ASSETS Current Assets Cash $ 23,498,999 $ 6,052,106 $ 1,945,385 $ 263,938 $ 9,950,214 $ 41,710,642 Investments - 30,900,000 100,000 116,596,089 106,023,156 253,619,245 Taxes Receivable 3,471,730 2,344,467 57,385 - 370,589 6,244,171 Other Receivable, Net 181,534 1,139,831 41,745 - 5,111,411 6,474,521 Interest Receivables 63,116 42,074 119 217,357 296,873 619,539 Due from other Governments 1,373,547 7,957,590 4,387,412 521,364 1,208,707 15,448,620 Total Current Assets 28,588,926 48,436,068 6,532,046 117,598,748 122,960,950 324,116,738

Restricted Assets Cash - - - - 1,150 1,150 Investments - - - - 171,833 171,833 Total Restricted Assets - - - - 172,983 172,983

Non-Current Assets Notes/Contract Receivables - - - - 5,157,261 5,157,261 Deferred Charges - - - - 60 60 Total Non-Current Assets - - - - 5,157,321 5,157,321

Total Assets 28,588,926 48,436,068 6,532,046 117,598,748 128,291,254 329,447,042

LIABILITIES Current Liabilities Accounts Payable 3,572,556 2,801,334 2,304,558 2,854,072 826,793 12,359,313 Due to other Governments 40 - 23,316 - 359,959 383,315 Accrued Liabilities 395,648 3,236 136 - 81,949 480,969 Deferred Revenue 3,426,798 2,343,956 2,890,452 - 4,638,395 13,299,601 Custodial Accounts 4,353 - - - 47,919 52,272 Total Current Liabilities 7,399,395 5,148,526 5,218,462 2,854,072 5,955,015 26,575,470

Total Liabilities 7,399,395 5,148,526 5,218,462 2,854,072 5,955,015 26,575,470

FUND BALANCES Reserved/Restricted Reserves for Debt Service - - - - 25,555,705 25,555,705 Total Reserved/Restricted - - - - 25,555,705 25,555,705

Unreserved/Unrestricted Equity General Fund 21,189,531 - - - - 21,189,531 Special Revenue Fund - 43,287,542 1,313,584 - 61,033,046 105,634,172 Capital Projects Fund - - - 114,744,676 35,747,488 150,492,164 Total Unreserved/Unrestricted Equity 21,189,531 43,287,542 1,313,584 114,744,676 96,780,534 277,315,867

Total Fund Balances 21,189,531 43,287,542 1,313,584 114,744,676 122,336,239 302,871,572

Total Liabilities & Fund Balances $ 28,588,926 $ 48,436,068 $ 6,532,046 $ 117,598,748 $ 128,291,254 $ 329,447,042

The accompanying notes are an integral part of the financial statements. 22 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Assets For the Year Ended December 31, 2002

Total fund balances as shown on the Governmental Funds Balance Sheet $ 302,871,572

Capital Assets used in governmental activities are not financial resources, therefore, are not reported in the funds. This includes Investment in Joint Venture for $17.6 million. 434,696,609

Long-term debts are not due and payable in the current period, therefore are not reported in the funds. This includes the current and non-current portion of the long-term debts, accrued interest payable, and bond anticipation notes payable. (219,008,751)

Internal service funds are used by the County to charge the costs of certain activities, like insurance and fleet services, to individual funds. The assets and liabilities of these funds are included in governmental activities in the Statement of Net Assets. 44,969,199

Other long-term liabilities such as Compensated Absences that are not due and payable in the current period, are not reported in the funds. (9,339,605)

Allowance for uncollectible receivables are reported in the Statement of Net Assets and not in the Balance Sheet of the governmental funds (222,432)

Net Assets of Governmental Activities $ 553,966,593

The accompanying notes are an integral part of the financial statements.

23 Statement of Revenues, Expenditures and Changes in Fund Balance Governmental Funds For the Year Ended December 31, 2002

General County Roads Human Capital Other Total Fund Fund Services Projects Governmental Fund Fund Funds

Detail Revenues Property Taxes $ 57,927,013 $ 38,706,276 $ 1,008,938 $ - $ 6,335,684 $ 103,977,910 Sales/Use Taxes 30,374,607 - - - 1,391,196 31,765,803 Other Taxes 9,056,449 163,765 6,672 - 13,662,495 22,889,381 Operating Assessments 21,171 - - - - 21,171 Licenses & Permits 1,744,725 - - - - 1,744,725 Intergovernmental Revenues 12,818,415 32,873,857 35,242,447 500,000 18,024,868 99,459,588 Charges for Services 23,725,805 3,783,618 154,484 - 23,057,406 50,721,312 Fines & Forfeitures 5,112,681 - 60,395 - 154,284 5,327,360 Interest & Investment Earnings 5,124,666 687,692 1,790 2,282,070 2,003,388 10,099,606 Rents, Leases & Concessions 3,454,309 1,572 - - 78,995 3,534,876

Contributions & Donations from Private Sources 13,300 - 20,801 - 402,309 436,410 Miscellaneous Revenues 459,712 313,080 11,232 2,837,145 1,510,539 5,131,708 Total Detail Revenues 149,832,853 76,529,860 36,506,758 5,619,215 66,621,164 335,109,850

Detail Expenditures Current Judicial 16,746,045 - - 5,266,448 - 22,012,492 General Government 33,273,275 11,052,848 - 6,208,401 15,181,121 65,715,645 Public Safety 78,960,890 - 108,175 912,837 22,222,035 102,203,937 Physical Environment 305,736 - - - 1,552,073 1,857,809 Transportation 395,859 69,867,721 - - 197,163 70,460,743 Health & Human Services 8,217,860 - 38,392,559 - - 46,610,419 Economic Environment 4,054,642 - - - 2,135,924 6,190,566 Culture & Recreation 7,594,075 - - - 10,238,426 17,832,502 Debt Services Principal Payments - 484,564 66,667 - 5,761,749 6,312,980 Interest Expenses - 74,501 - - 13,829,323 13,903,824 Total Detail Expenditures 149,548,382 81,479,634 38,567,401 12,387,686 71,117,814 353,100,917

Other Financial Sources (Uses) Operating/Capital Transfers-in 4,215,789 9,862,580 2,042,600 - 24,888,424 41,009,393 Operating/Capital Transfers-out (9,658,584) (1,943,850) (3,682) - (28,313,883) (39,919,999) Debt Proceeds - - - 4,538,319 4,538,319 Disposition of Capital Assets - - - 123,504 123,504 Total Other Financial Sources (Uses) (5,442,795) 7,918,730 2,038,918 - 1,236,364 5,751,217

Net Change in Fund Equity (5,158,324) 2,968,956 (21,725) (6,768,471) (3,260,286) (12,239,850)

Fund Balances - Beginning 27,337,084 40,249,540 1,335,310 121,269,182 125,448,274 315,639,385 Prior Period Adjustments (989,229) 69,046 - 243,964 148,255 (527,964) Fund Balances - Ending $ 21,189,531 $ 43,287,542 $ 1,313,585 $ 114,744,675 $ 122,336,243 $ 302,871,572

The accompanying notes are an integral part of the financial statements. 24 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities For the Year Ended December 31, 2002

Net Change in fund balances for Governmental Funds ($12,239,850)

Governmental funds report capital outlay as expenditures. However, in the Statement of Activities, the cost of those assets is allocated over their estimated useful lives as depreciation expense. 44,841,984

Capital Contributions and donations do not provide current financial resource and therefore are not reported as revenues in governmental funds, including an equity adjustment to the investment in joint venture. The amounts include $1.3 million of contributions from private sources (right of way land), $256,934 of Operating/Capital Transfer out to the Fleet Management fund of assets purchased by governmental funds and $665,998 of equity adjustment in joint venture. 419,541

Debt proceeds provide current financial resources to governmental funds but debt increases long-term liabilities in the Statement of Net Assets. (4,538,319)

Repayments of bond principal are expenditures in the governmental funds, but the repayment reduces long-term liabilities in the Statement of Net Assets. 6,822,839

Internal service funds are used by the County to charge the costs of certain activities, like insurance and fleet services, to individual funds. The net costs of the internal service funds are reported with governmental activities. (3,896,954)

Some expenses and revenues reported in the Statement of Activities do not require the use of current financial resources and therefore are not reported as expenditures and revenues in governmental funds. (694,248)

Change in Net Assets of Governmental Activities $30,714,991

The accompanying notes are an integral part of the financial statements.

Statement of Net Assets Proprietary Funds As of December 31, 2002

Governmental Business-type Activities Activities Solid Waste Airport Surface Water Total Internal Service Proprietary Funds Funds ASSETS Current Assets Cash$ 8,247,741 $ 497,281 $ 866,055 $ 9,611,077 $ 4,129,708 Investments 15,637,022 6,396,647 6,958,350 28,992,019 26,373,040 Taxes Receivable - - 311,430 311,430 - Other Receivables, Net 2,752,323 515,441 120 3,267,884 122,032 Due From Other Governments 621,349 958,917 304,149 1,884,415 83,764 Interest Receivables 65,701 7,992 11,367 85,060 50,638 Inventories - - - - 926,949 Prepaid Items - - - - 710,654 Total Current Assets 27,324,136 8,376,278 8,451,471 44,151,885 32,396,785

Restricted Assets Cash 48,689 - - 48,689 - Investments 3,113,437 - - 3,113,437 - Other Restricted Assets - - 90,960 90,960 - Total Restricted Assets 3,162,126 - 90,960 3,253,086 -

Non-Current Assets Deferred Charges 1,159,586 - 98,002 1,257,588 - Property Held in Trust for Future Use 35,750,139 - - 35,750,139 - Total Non-Current Assets 36,909,725 - 98,002 37,007,727 -

Capital Assets Land 5,878,530 22,136,338 4,995,985 33,010,853 4,870 Buildings and Structures, Net 3,189,160 13,468,918 - 16,658,078 4,379,991 Other Improvements, Net 8,878,547 715,064 10,634,695 20,228,306 571,478 Machinery and Equipment, Net 461,324 78,542 152,704 692,570 26,853,412 Infrastructure Assets, Net 598,948 9,938,118 - 10,537,066 - Construction in Progress 23,070,800 26,824,903 4,009,870 53,905,573 5,500 Intangibles, Net - 386,236 7,282 393,518 118,675 Total Capital Assets 42,077,309 73,548,119 19,800,536 135,425,964 31,933,926

Total Assets $ 109,473,296 $ 81,924,397 $ 28,440,969 $ 219,838,662 $ 64,330,711

The accompanying notes are an integral part of the financial statements. 26 Statement of Net Assets Proprietary Funds As of December 31, 2002

Governmental Business-type Activities Activities Solid Waste Airport Surface Water Total Internal Service Proprietary Funds Funds

LIABILITIES Current Liabilities Accounts Payable $ 5,976,541 $ 1,554,349 $ 1,554,956 $ 9,085,846 $ 1,271,456 Claims and Judgments Payable - - - - 1,335,000 Accrued Liabilities 349,600 246,516 65,267 661,383 138,056 Deferred Revenue 147,320 457,352 311,550 916,222 1,590,501 Bonds, Notes And Loans Payable 3,870,000 823,510 544,517 5,238,027 430,000 Total Current Liabilities 10,343,461 3,081,727 2,476,290 15,901,478 4,765,013

Restricted Liabilities Payable from Restricted Assets 48,689 - - 48,689 - Future Landfill Closures 2,183,903 - - 2,183,903 - Total Restricted Liabilities 2,232,592 - - 2,232,592 -

Non-Current Liabilities Employee Benefits Payable 439,573 155,857 248,636 844,066 477,880 Bonds, Notes And Loans Payable 44,004,794 19,444,467 14,571,558 78,020,818 3,580,303 Claims And Judgments Payable - - - - 10,538,316 Total Non-Current Liabilities 44,444,367 19,600,324 14,820,194 78,864,884 14,596,499

Total Liabilities 57,020,420 22,682,051 17,296,484 96,998,955 19,361,512

NET ASSETS Invested in Capital Assets, Net of Related Debt 31,112,240 53,280,142 4,782,464 89,174,846 27,923,623

Restricted for: General Government - - - - 16,582,539 Debt Service - - 90,960 90,960 - Landfill Closure Costs 929,534 - - 929,534 - Total Restricted Net Assets 929,534 - 90,960 1,020,494 16,582,539

Unrestricted 20,411,103 5,962,204 6,271,061 32,644,368 463,037 Total Net Assets $ 52,452,876 $ 59,242,346 $ 11,144,485 $ 122,839,707 $ 44,969,199

The accompanying notes are an integral part of the financial statements. 27 Statement of Revenues, Expenses and Changes in Fund Net Assets Proprietary Funds For the Year Ended December 31, 2002

Governmental Business-type Activities Activities

Solid Waste Airport Surface Water Total Internal Service Funds

Operating Revenues Intergovernmental Revenues$ 993,473 $ 1,200 $ 327,527 $ 1,322,200 $ - Operating Assessments - - 5,623,474 5,623,474 - Charges for Services 39,032,344 8,465,649 157,173 47,655,166 50,340,211 Rents, Leases and Concessions - - - - 146,615 Total Operating Revenues 40,025,817 8,466,849 6,108,174 54,600,840 50,486,826

Operating Expenses Personnel Services 7,884,391 3,060,002 5,272,869 16,217,262 9,650,324 Contractual Services 21,771,808 1,589,147 5,486,936 28,847,891 30,910,864 Supplies 673,149 621,888 215,206 1,510,243 6,336,490 Interfund Payments for Services 4,314,433 978,009 2,475,692 7,768,134 2,090,159 Depreciation 1,223,700 2,419,431 316,558 3,959,689 3,817,165 Bad Debt Expense - 45,934 - 45,934 - Total Operating Expenses 35,867,481 8,714,411 13,767,261 58,349,153 52,805,002

Operating Income (Loss) 4,158,336 (247,562) (7,659,087) (3,748,313) (2,318,176)

Non-Operating Revenues (Expenses) Interest & Investment Earnings 442,166 194,142 219,755 856,063 511,686 Miscellaneous Revenues 25,334 1,368 39,776 66,478 87,283 Disposition of Capital Assets - 2,215,000 (600) 2,214,400 682,538 Interest Expenses (1,799,237) (1,263,160) (958,829) (4,021,226) (223,523) Contributions and Donations from Private Sources - - 5,000 5,000 - Intergovernmental Revenues - 2,805,143 495,794 3,300,937 - Total Non-Operating Revenues (Expenses) (1,331,737) 3,952,493 (199,102) 2,421,652 1,057,984

Income(Loss) Before Contributions and Transfers 2,826,599 3,704,931 (7,858,189) (1,326,659) (1,260,192) Operating/Capital Transfers In 12,500 - 2,808,951 2,821,451 2,165,697 (Operating/Capital Transfers out) (783,474) - (233,672) (1,017,147) (4,802,463) Change in Net Assets 2,055,624 3,704,931 (5,282,911) 477,644 (3,896,958)

Net Assets, Beginning 50,481,599 55,684,452 18,283,226 124,449,277 48,026,048 Prior Period Adjustments - (130,786) (1,732,998) (1,863,783) 1,033,131 Cumulative Effect of Change in Accounting Principle (84,348) (16,251) (122,830) (223,429) (193,027)

Net Assets, Ending $ 52,452,876 $ 59,242,346 $ 11,144,487 $ 122,839,707 $ 44,969,194

The accompanying notes are an integral part of the financial statements. 28 Statement of Cash Flow Proprietary Funds For the Year Ending December 31, 2002 Governmental Business-type Activities Activities

Solid Waste Airport Surface Water Total Internal Service

Cash Flow From Operating Activities Receipts from Operations $ 39,112,878 $ 7,761,773 $ 5,987,671 $ 52,862,322 $ 50,509,842 Payments to Employees (6,192,651) (3,183,085) (4,332,811) (13,708,547) (7,762,965) Payments to Claims (22,834,130) (2,549,493) (7,040,026) (32,423,649) (39,808,291) Internal Activity-Payments to Other Funds (3,742,564) - (2,475,692) (6,218,256) (2,090,154) Operating Grants 525,499 - - 525,499 - Total Cash Flow from Operating Activities 6,869,032 2,029,195 (7,860,858) 1,037,369 848,432

Cash Flow from Capital and Related Financing Activities

Capital Acquisition and Construction (13,291,182) (5,971,214) (1,360,987) (20,623,383) (5,123,988) Capital Grants - 2,805,143 495,794 3,300,937 - Capital Contributions/Transfers (783,474) - (2,453) (785,927) (1,857,139) Sale of Fixed Assets - 2,215,000 9,792 2,224,792 854,776 Proceeds of Long Term Debt 17,250,000 - - 17,250,000 - Principal Paid on Loans (3,783,947) (563,767) (240,918) (4,588,632) (401,600) Interest Paid on Loans (1,630,047) (1,324,256) (928,178) (3,882,481) (217,031) Total Cash Flow from Capital and Related Financing Activities (2,238,650) (2,839,094) (2,026,950) (7,104,694) (6,744,982)

Cash Flow from NonCapital Financing Activities Miscellaneous Revenue 25,342 1,372 (109,389) (82,675) (110,737) Operating Transfers 12,500 - 2,577,732 2,590,232 (779,634) Total Cash Flow from NonCapital Financing Activities 37,842 1,372 2,468,343 2,507,557 (890,371)

Cash Flow from Investing Activities Interest on Investments 418,028 246,530 234,912 899,470 693,838 Total Cash Flow from Investing Activities 418,028 246,530 234,912 899,470 693,838

Net Increase(Decrease) in Cash and Cash Equivalents 5,086,252 (561,997) (7,184,553) (2,660,298) (6,093,083)

Cash and Cash Equivalents, January 1, 2002 21,960,637 7,455,925 15,008,958 44,425,521 36,595,826

Cash and Cash Equivalents, December 31, 2002 $ 27,046,889 $ 6,893,928 $ 7,824,405 $ 41,765,223 $ 30,502,743

Reconciliation of Operating Income to Net Cash Provided (Used) by Operating Activities Net Operating Income (Loss) 4,158,336 (247,562) (7,659,087) (3,748,313) (2,318,176) Depreciation Expense 1,223,700 2,419,431 316,558 3,959,689 3,817,168 Bad Debt Expense - (45,934) - (45,934) - Vacation/Sick Leave Expense 19,946 (123,082) 55,655 (47,481) (60,708) Other Adjustments 68,276 (16,251) (1,738) 50,287 (94,272) Changes in Receivables, Net (415,832) (1,125,592) (118,766) (1,660,190) (60,363) Changes in Inventories - - - - 896 Changes in Accounts Payable & Other Liabilities 1,814,606 747,670 (453,480) 2,108,796 (304,721) Changes in Accruals and Deferred Charges - 420,515 - 420,515 (131,392) Net Cash Provided (Used) by Operating Activities $ 6,869,032 $ 2,029,195 $ (7,860,858) $ 1,037,369 $ 848,432

There was no other investing, capital or financing activities affecting assets or liabilities that did not result in cash flows.

The accompanying notes are an integral part of the financial statements.

29 Statement of Assets Fiduciary Funds As of December 31, 2002

Agency Funds

ASSETS

Current Assets Cash $ 60,818,310 Investments 388,785,227 Taxes Receivable 28,844,111 Other Receivables, Net 8,966,471 Due from Other Governments 10,164 Total Current Assets 487,424,283

Non-Current Assets Deferred Charges 98,782 Total Non-Current Assets 98,782

Total Assets $ 487,523,065

LIABILITIES

Current Liabilities Due to Other Governments 487,523,065 Total Current Liabilities 487,523,065

Total Liabilities $ 487,523,065

The accompanying notes are an integral part of the financial statements. 30 Notes To The Financial Statements For the Year Ended December 31, 2002

Note 1. Summary Of Significant Accounting Policies

General The County of Snohomish, Washington (the “County”), was incorporated in 1861 and operates under the laws of the State of Washington applicable to a home rule charter county. The charter was adopted by a vote of the citizens of Snohomish County in 1979 and was amended through the charter review process effective January 1, 1997. The executive branch of the county government is elected at large and consists of the county executive, the prosecuting attorney, the sheriff, the auditor, the clerk, the treasurer, and the assessor. Twelve superior court judges and seven district court judges are also elected at-large. A five-member council, elected by district, constitutes the legislative body.

Snohomish County is a general-purpose government and provides services such as public safety, fire prevention, road construction and maintenance, parks and recreation, judicial administration, health and social programs and general administration. The County also operates an airport, a fairground, and is responsible for the disposal of solid waste and the control of surface water runoff.

The County’s financial statements are prepared in accordance with generally accepted accounting principles (GAAP). The County has implemented the provisions of Governmental Accounting Standards Board (GASB) Statement No. 34, Basic Financial Statements—and Management’s Discussion and Analysis— for State and Local Governments for the 2002-reporting year. Significant changes to financial reporting mandated by GASBS No. 34 include the following:

• A new Management Discussion and Analysis (MD&A) section which provides an analysis of the County's overall financial position and results of operations.

• The presentation of government-wide financial statements prepared on a full accrual basis.

• The individual presentation of only major funds in the fund financial statements, non-major funds are combined and presented in a single column.

• The reporting of infrastructure assets such as roads and bridges, which were not previously reflected on the balance sheet of the County.

1.A. Reporting Entity These financial statements present the County (the primary government) and its component units, the Pilchuck Development Corporation (“PDC”) and

31 Notes To The Financial Statements For the Year Ended December 31, 2002

Snohomish County Public Facilities District (“PFD”). The component units are combined and presented in a single column on the government-wide financial statements.

In determining the financial reporting entity, the County complies with the provisions of GASB Statement No. 14, “The Financial Reporting Entity,” and includes all component units of which the County appointed a voting majority of the units’ board; the County is able to impose its will on the unit or a financial benefit or burden relationship exists.

The County created the PDC in 1983 to promote and finance industrial development. The Snohomish County Council appoints the Corporation's board of directors. The Corporation may issue industrial revenue bonds to finance industrial development facilities upon approval of the County Council, however the County has no financial responsibility for such bonds.

Snohomish County established the PFD in July 2001 to develop convention, sports and entertainment facilities within the County. A five-member board of directors appointed by the County Council governs the PFD.

As of December 31, 2002, the District had formalized support for three regional centers: the Everett Arena, the South Snohomish County Convention Center, and the Edmonds Center for the Performing Arts. Additionally, the District is currently in discussions with the National Flight Interpretive Center for possible funding of an aviation museum at Paine Field.

1.B. Measurement Focus, Basis Of Accounting, and Financial Statement Presentation Government-Wide Financial Statements The statement of net assets and statement of activities present financial information about the County as a whole on a full accrual basis with an economic resource measurement focus. They include all County funds except for the agency funds, which are reported separately. The statements distinguish between governmental and business-type activities. Governmental activities generally are financed through taxes, intergovernmental revenues, and other non-exchange revenues. Business-type activities are financed in whole or in part by fees charged to external parties for goods or services. Program revenues as reported on the statement of activities include charges to customers and users of goods or services provided by that program, and grants or contributions that are restricted for use by that program. Taxes and other revenues that are not specific to a particular program are reported as general revenues.

The expenditures and program revenues of governmental activities are reported on the statement of activities by function/program. Fund financial statements

32 Notes To The Financial Statements For the Year Ended December 31, 2002 also report governmental fund expenditures by function/program. The County reports the following functions/programs:

General Government - Legislative and administrative services, including expenses for recording and elections, financial services, legislative, personnel administration, administration and facility management.

Judicial - Court system for civil, criminal, and juvenile cases, including jury and witness fees and other judicial and legal costs.

Public Safety - Protection and safety of the citizen at large, including expenses for law enforcement, fire, and prevention services, inspections and regulatory enforcements, detention and corrections, emergency services and juvenile services.

Physical Environment - Conservation and preservation of the environment, including engineering and architectural costs for land and facilities in the County

Transportation – Programs to ensure safe and adequate flow of vehicles and pedestrians in the County, includes costs for road and street preservation, construction, and maintenance.

Economic Environment – Programs that improve the welfare of the community and individuals in the County. Includes employment opportunity and development, community planning and development, and housing.

Health and Human Services – Programs that provide prevention, intervention and rehabilitative human services for County citizens with an emphasis on serving those most in need. They include costs associated with programs such as veterans’ services, mental health, substance abuse prevention, and treatment, aging, public health, and children services.

Culture and Recreation - Costs associated for the maintenance and general operations of County parks, trails, natural land and recreational facilities and the fairgrounds.

Interfund Transactions Interfund activity can be classified into two general categories:

• Reciprocal interfund activities are transfers similar to an exchange and exchange-like transactions (quasi-external). Interfund services provided and used are reported as revenues in the seller funds and expenditures in the purchaser funds. • Nonreciprocal interfund activities are transfers similar to nonexchange transactions. They include operating and capital transfers, allocation of overhead expenses, internal service funds and interfund reimbursements.

33 Notes To The Financial Statements For the Year Ended December 31, 2002

These transactions have been eliminated in the statement of activities as follows:

Of the total operating revenue of $50.5 million for internal service funds, $49 million were services to various county departments. The latter were eliminated in the statement of activities. Additionally, interfund reimbursements of $7.4 million within governmental funds have been eliminated from the statement of activities.

The County allocates overhead administrative costs to virtually all County functions/funds. GASBS No. 34 requires such allocations to be presented in a separate column on the statement of activities. As this allocated costs represent only 1% of total program expenses, the County has chosen not to separately present them on the statement of activities. The following schedule details the overhead cost allocation by function:

Indirect Costs Allocation For the Year Ended December 31, 2002

Governmental Activities General Government $ 1,801,378 Culture and Recreation 170,537 Economic Environment 5,704 Health And Human Services 283,054 Physical Environment 33,243 Public Safety 633,467 Transportation 39,533 Total Governmental Activities 2,966,916

Business-type Activities Airport 249,506 Solid Waste 522,597 Surface Water 188,685 Total Business-type Activities 960,788

Total Indirect Costs for Primary Government $ 3,927,704

Operating/Capital transfers are transactions in which assets are moved from one fund to another without any compensation in return or any requirement for repayment. These have been eliminated within the governmental activities and business-type activities categories. Transfers between the two activities are shown on the statement of activities.

34 Notes To The Financial Statements For the Year Ended December 31, 2002

Governmental Activities Total transfer in $ 43, 175,092 Less total transfer out 44, 979,396 Net Transfer out to business-type activities (1, 804,304)

Business-type Activities Total transfer in 2, 821,450 Less total transfer out 1, 017,146 Net transfer in from governmental activities $ 1, 804,304

Fund Financial Statements

The fund financial statements individually present major funds and present non- major funds in total. A fund is considered major if it is the primary operating fund of the entity or if its assets, liabilities, revenues, or expenditures/expenses equal at least 10% of the corresponding total for all funds of that category or type, or at least 5% of the corresponding total for all governmental and enterprise funds combined. Separate financial statements are provided for governmental, proprietary, and fiduciary funds.

The fund financial statements are prepared using a modified accrual accounting basis with a current financial resources measurement focus. The modified accrual basis differs from the full accrual basis in the following ways:

CPurchases of capital assets are considered expenditures. CRedemptions of long-term debt are considered expenditures when due. CProceeds from long-term debt are considered "other financing sources" when received. CRevenues are recognized only when they become both measurable and available to finance expenditures of the current period. Revenues that are measurable but not available are recorded as receivable and offset by deferred revenues. Interest and investment earnings are recorded when earned only if paid within 60 days. CInventories and prepaid items are reported as expenditures when purchased and the reported inventories are offset by a fund balance reserve account. CInterest on long-term debt is not accrued but is recorded as an expenditure when due. CAccumulated unpaid vacation, sick pay, and other employee benefits are considered expenditures when paid

The governmental funds are accounted for with a flow of current financial resources measurement focus, which emphasizes the current sources and uses of resources. The County reports the following governmental funds:

35 Notes To The Financial Statements For the Year Ended December 31, 2002

The general fund is the primary operating fund of the County. It is used to account for all financial resources except those funds required to be accounted for separately.

Special revenue funds account for revenues which are to be utilized for specific purposes and/or expenditures incurred in the performance of specific activities. Major special revenue funds include the county road fund and the human services program fund.

• The County Road Fund was established in accordance with RCW36.33.220. Its function as detailed in Snohomish County Code (SCC) title 13 is to account for the construction, maintenance, and inspection of county streets, roads and bridges and the design and coordination of countywide public works projects. Revenue is primarily from road and other taxes and from state and federal grants. • The Human Services Programs Fund is for the administration, planning, development and provision of the following services: energy assistance, long term care and aging, developmental disabilities, mental health, alcohol and other drugs, community services, children and youth, veteran's relief, and other like services in Snohomish County, as authorized under SCC 2.400.010. Revenue comes from liquor and other taxes, State and Federal grants, matched by some County support, as well as from a tax levy authorized by RCW 73.08.080 for veterans' assistance.

The debt service funds account for the accumulation of resources for the payment of general and special assessment long-term debt.

Capital projects funds account for the resources and expenditures relating to the acquisition and development of capital improvements other than those accounted for in the proprietary funds. The County has seven capital project funds, in which the capital project fund is a major fund. The purpose of the Capital Projects Fund is to provide funding and support for major County construction projects, including building the new County administration building, corrections building and garage. It was created by Ordinance 00-071 effective January 1, 2001. Resources for this fund come from bond proceeds. Additional funding may be received from the General Fund, the Real Estate Excise Tax fund, or any other County fund upon recommendation by the County Executive and upon approval by the County Council. The Department of Facilities management administers the fund.

Proprietary funds are accounted for with a flow of economic resources measurement focus, which emphasizes the measurement of costs and determination of net income. They consist of enterprise fund type and internal service fund type. All assets and all liabilities are reported on the balance sheet. Revenues and expenses are reported on a full accrual basis - revenues are recorded when earned, expenses are recorded when a measurable liability has been incurred. Proprietary funds disclose the composition of cash flows on

36 Notes To The Financial Statements For the Year Ended December 31, 2002

a separate statement of cash flows. Operating income for the proprietary funds includes all revenues derived in the normal course of operations except for interest and investment earnings, gain or loss on the sale of capital assets, capital grants and contributions, and some miscellaneous non-recurring revenues. In accordance with the provisions of Governmental Accounting Standards Board (GASB) Statement No. 20, the County has elected to follow all Financial Accounting Standards Board (FASB) pronouncements issued prior to November 30, 1989, unless they conflict with a GASB pronouncement. Under this election, the County chooses not to follow FASB pronouncements issued after that date.

Enterprise funds account for operations of business-like activities, which are financed primarily by user charges. The accounting focus is on the measurement of costs and the determination of net income. The County maintains three enterprise funds: Solid Waste Management, Airport Operation and Maintenance, and Surface Water Management.

• Solid Waste Management Fund, administered by the Department of Public Works, accounts for the operations, capital improvements, and debt service of the county Solid Waste facility. Revenue comes from the collection of fees at the facilities and from revenue bonds.

• SCC Title 15 established the Airport Fund, which accounts for the operations, capital improvements, and debt service of Paine Field, Snohomish County's airport. The fund is wholly supported by fees for services, with Federal grants and bonds financing capital improvements.

• SCC25.05 provides for the establishment of a Storm and Surface Water Management Fund for Snohomish County to be administered by the Snohomish County Department of Public Works. Revenue comes from the collection of storm and surface water service charges from property owners.

Internal service funds account for centralized operations related to providing goods or services to various County departments on a cost-reimbursement basis. The County’s internal service funds are presented in the proprietary fund financial statements. In the government-wide financial statements, interfund transactions relating to internal service fund activity have been eliminated. Any residual activity and net assets are reported as governmental activities. The County maintains five internal service funds; Equipment Rental and Revolving Fund, Information Services Fund, Snohomish County Insurance Fund, Pits and Quarries Fund and Employee Benefit Fund.

Fiduciary funds account for assets held by the County as an agent for other governments, private organizations, individuals, and other County funds. These include agency funds and trust funds. Agency funds are clearing accounts where assets equal liabilities and there is no measurement of results of

37 Notes To The Financial Statements For the Year Ended December 31, 2002

operations. Trust funds are typically operated as prescribed by a governing trust agreement.

1.C. Assets, Liabilities, And Equity Cash and Investments For the purpose of the statement of net assets, cash includes funds held by the County Treasurer, in bank accounts not administered by the County Treasurer (primarily depository and revolving accounts), petty cash and change funds. Available cash held by the Treasurer is invested nightly with the Washington State Treasurer's Local Government Investment Pool. These invested funds are considered to be cash equivalents as they can be liquidated on demand to meet daily cash flow needs.

The amounts reported as cash also include compensating balances maintained with certain banks to offset charges to the County for banking services. These balances are monitored and adjusted as necessary so that projected interest earnings will offset bank fees and charges. In 2002 the County maintained compensating balances for approximately $6 million.

All unrestricted investments are considered current. Investments are recorded at cost, which is approximate equivalent to fair value.

Interfund Receivables and Payables Occasionally, transactions for goods and services between County funds may result in amounts, which are due but not yet paid. These are reported as “due to/from other funds” on the statement of net assets. Short-term interfund loans are reported as “interfund receivables and payables.” Long-term interfund loans (non-current portion) are reported as “advances to and from other funds.” There were no interfund receivables or payables in the current reporting year.

Receivables Property taxes levied for the current year are recorded as taxes receivable and deferred revenue. As tax payments are collected, the taxes receivable and deferred revenue balances are reduced and revenue is recognized. Taxes receivable includes the related interest and penalties.

Other receivables represent primarily amounts due from private individuals and organizations for goods or services rendered. These balances are presented net of an allowance for doubtful accounts where applicable.

Amounts reported as due from other governments and notes/contract receivable represent receivables from other governments for goods and services rendered, grant reimbursements or entitlements. Amounts due for grant reimbursements are recorded in the period in which the authorized disbursements are made.

38 Notes To The Financial Statements For the Year Ended December 31, 2002

Inventories Governmental funds use the purchase method whereby inventory items are considered expenditures when purchased. Proprietary funds use the average cost flow method and the lower of cost or market basis.

Capital Assets Capital assets are recorded at actual cost. Donated capital assets are recorded at estimated fair market value on the date of donation. Capital costs in the governmental funds are reported as expenditures of the current period in the fund financial statements and as assets in the government-wide financial statements. Individual assets (except infrastructure) with a total cost of less than $5,000 are reported as expenses in the period in which they were incurred.

In compliance with the requirements of GASBS No. 34, the County is now capitalizing expenditures in excess of $100,000 relating to the purchase and construction of infrastructure assets, effective with the current reporting year. Infrastructure assets include roads, bridges, traffic signals and other public property. The County has elected to implement retroactive reporting of infrastructure assets acquired during the years 1980 to 2001 in the current reporting year. These assets are reported at their actual historical cost.

Depreciation of capital assets is reported as an allocated expense in the statement of activities. Depreciation is calculated using the straight-line method based on the estimated useful life of the asset. Generally, buildings and other land improvements are assigned estimated useful lives of 10 to 50 years, machinery and equipment 3 to 20 years, and infrastructure 5 to 60 years.

Restricted Assets and Liabilities Restricted assets include cash and investments that are subject to legal restrictions and also other assets, which are considered to be restricted for a particular purpose such as customer deposits. Related liabilities are reported as payables from restricted assets.

At December 31, 2002, total restricted assets reported by governmental activities included $171,833 for a legally required reserve to guarantee payment of road improvement district bonds and $1,150 in miscellaneous custodial assets.

Business-type activities reported restricted cash of $48,689 representing cash deposits made by solid waste customers in order to guarantee payment of their credit accounts. A related restricted liability in the same amount is also reported to reflect the balance owed to the customers for these refundable deposits.

Restricted investments of business-type activities in the amount of $3,113,437 represent funds set aside to finance the post closure care costs of the Cathcart

39 Notes To The Financial Statements For the Year Ended December 31, 2002

Landfill, which closed in 1992. Federal, state and local requirements mandate that such reserves be established to cover future post closure care costs such as site monitoring, testing, maintenance, and treatment of leachates. The County has no landfills in active operation. The related liability in the amount of $2,183,903 represents the estimated cost of future post closure care as of December 31, 2002. This estimate is subject to change due to inflation, technological changes, or regulatory changes.

Other restricted assets in the amount of $90,960 represent a note receivable from a local municipality. The municipality agreed to contribute to the annual payments on debt obtained by the County to finance a regional storm water detention facility.

Investment in Joint Venture Snohomish County Emergency Radio System (SERS), a public nonprofit corporation, was established via an interlocal agreement between the County and nine cities located within the County. Each member city and the County provide a voting member to the SERS Board of Directors. The purpose of SERS is to develop a countywide public safety communications system. The County financed its investment in SERS with general obligation bond proceeds. In accordance with generally accepted accounting principles, the investment balance was adjusted by $665,998 for the 2002 year to reflect the County’s share of SERS revenues and expenditures. The County has entered into an interlocal agreement with SERS to provide accounting services, including preparation of SERS financial statements. These statements are subject to audit by the Washington State Auditor and can be obtained by writing to the Snohomish County Finance Department, MS610, 3000 Rockefeller Ave., Everett, WA 98201.

Property Held in Trust for Future Use The Carthcart Regional Landfill was completed in 1992 for $35 million and amount transferred into this account. The County has entered into a contract for waste export as described in Note 4C. As a result of services provided under this contract, the County currently has no plans to use this landfill.

Long-term Debt All long-term debt is reported in the government-wide financial statements. Bond premiums/discounts and issuance costs are deferred and amortized over the life of the bonds. Long-term debt incurred by the governmental funds is not reported as a liability in the fund financial statements. The debt proceeds (including any bond premium) are reported as other financing sources and payment of principal, interest, and debt issuance costs are reported as expenditures. Proprietary fund debt is reported on the same basis in both the government-wide and fund financial statements.

40 Notes To The Financial Statements For the Year Ended December 31, 2002

Employee Benefits Payable The County’s policies regarding vacation, sick leave and compensatory time permit employees to be compensated for earned but unused vacation leave, compensatory time, or a portion their sick leave. The liability for these compensated absences is recorded as long-term debt in the government-wide statements. The current portion of this debt is estimated based on historical trends. Deferred Revenues The County reported $23 million of deferred revenues. Deferred revenues are recognized for property taxes and special assessment levies. The County also recognized $7 million due from other entities for the debt service of the general obligation bonds issued in 2001 for their share of the financing of the emergency radio system. Working capital advances, advances from grant related activities and prepaid revenues were reported as deferred revenues.

Equity Classifications The government-wide financial statements present equity as net assets and are displayed in three components:

CInvested in capital assets, net of related debt- Consists of capital assets, net of accumulated depreciation and reduced by the outstanding balances of any bonds, mortgages, notes, or other borrowings that are attributable to the acquisition, construction, or improvement of those assets.

CRestricted net assets—Consists of net assets with constraints placed on the use either by (1) external groups such as creditors, grantors, and contributors; or (2) legal restrictions resulting from constitutional provisions or enabling legislation.

CUnrestricted net assets—All other net assets that do not meet the definition of “restricted” or “invested in capital assets, net of related debt.”

Governmental funds financial statements present equity as fund balance. Fund balance is further classified as reserved and unreserved, with unreserved further split between designated and undesignated. Proprietary fund equity is classified the same as in the government-wide statements.

Effective January 1, 2002, the County has implemented GASB Statement No. 33, Accounting and Financial Reporting for Non-exchange Transactions. This statement defines non-exchange transactions involving financial or capital resources and addresses the timing of recognition of revenue resulting in these transactions. In accordance with the statement, the affected funds have recognized non-exchange transactions, including receipt of capital grant and other capital contributions, as non-operating revenue or expense.

41 Notes To The Financial Statements For the Year Ended December 31, 2002

Note 2. Stewardship, Compliance, And Accountability

2.A. Budgetary Requirements Annual appropriated budgets are adopted for the general, special revenue, debt service, and proprietary funds on the modified accrual basis of accounting. Budgets for capital project funds are adopted at the level of the individual project for fiscal periods that correspond to the lives of the projects. Annual appropriated budgets are adopted at the level of programs within each fund ("appropriation unit").

All departments of County government submit their proposed budget to the County Executive. From these submissions the County Executive develops the recommended budget that is presented to the County Council on or before October 1st of each year. The Council holds public hearings and may make some changes before adopting the final budget at least 30 days before the end of the calendar year. The County Executive has veto power over budget ordinances approved by the Council.

Budget transfers and reallocations between programs within a fund in amounts of $50,000 or less may be made without Council approval subject to certain significant restrictions. These restrictions include revisions that create new salaried positions and that establish new programs or delete ongoing programs. Changes to personnel costs and capital costs are also restricted.

Unless otherwise provided by the appropriation ordinances, all unexpended and unencumbered annual appropriations lapse at the end of the year.

Budgetary Comparison Schedule The budgetary comparison schedule (budgetary basis) for the general fund and major special revenue funds differs from the statement of revenues, expenses and changes in fund balance (GAAP basis) as explained below.

Explanation of Differences between Budgetary Sources and Uses of Funds and GAAP Revenues and Expenditures For the Year Ended December 31, 2002

General Fund County Roads Human Fund Services Fund Sources (Inflows) of resources Actual amounts (budgetary basis) "Available for appropriation" from the budgetary comparison schedules $ 181,385,726 $ 126,641,980 $ 39,884,669 Adjustments: The fund balance at the beginning of the year is a budgetary resource but is not a current year revenue for GAAP reporting (27,337,084) (40,249,540) ( 1,335,310)

42 Notes To The Financial Statements For the Year Ended December 31, 2002

Explanation of Differences between Budgetary Sources and Uses of Funds and GAAP Revenues and Expenditures (continued) For the Year Ended December 31, 2002

General Fund County Roads Human Fund Services Fund

Reclassifications: Operating/Capital Transfers-in are included as a budgetary resources but reported as "other financial sources of funds" in the fund financial statements (4,215,789) (9,862,580) ( 2,042,600) Total revenues as reported on the statement of revenues, expenditures and changes in fund balances - governmental funds. $ 149,832,853 $ 76,529,860 $ 36,506,758

Uses (Outflows) of resources Actual amounts (budgetary basis) "Amount charged to appropriations" from the budgetary comparison schedules $ 159,206,966 $ 83,423,484 $ 38,571,083 Reclassifications: Operating/Capital Transfers-out are included as a charge to appropriation but reported as "other financial sources of funds" in the fund financial statements (9,658,584) (1,943,850) ( 3,682) Total expenditures as reported on the statement of revenues, expenditures and changes in fund balances - governmental funds. 149,548,382 81,479,634 38,567,401

Budgetary Fund Balance, December 31, 2002 22,178,760 43,218,496 1,313,585 Adjustments: Fund balance included an adjustment for prior period corrections. These adjustments are not a budgetary resource. (989,229) 69,046 - Total fund balance - ending as reported on the statement of revenues, expenditures and changes in fund balances - governmental funds. $ 21,189,531 $ 43,287,542 $ 1,313,585

2.B. Deficit Fund Equity Insurance Fund The deficit of $3.9 million is the result of prior net losses of $2.5 million and the current net loss of $1.4 million. The deficit is being addressed in subsequent years through rate setting.

Employee Benefits Fund The deficit of $2.9 million is the result of prior net losses of $0.9 million and the current net loss of $2 million. The County and its labor union representatives have taken various steps to curtail increasing health benefit costs of employees. Recent contract negotiations include employee premium sharing for

43 Notes To The Financial Statements For the Year Ended December 31, 2002

spouses, children, establishing of medical savings plan, and increases in premium rates for the departments.

Note 3. Detail Notes On Transaction Classes/Accounts The following notes present detail information to support the amounts reported in the basic financial statements for its various assets, liabilities, equity, revenues, and expenditures/expenses.

3.A. Cash And Investments The County Treasurer administers cash and investments in accordance with state law for county funds, PFD (component unit), agency funds and SERS joint venture. Allowable investment vehicles include securities issued by the federal government, certificates of deposit, and municipal bonds. The majority of County funds are invested with the Washington State Treasurer’s Local Government Investment Pool. This pool is subject to the collateralization requirements of the Public Deposit Protection Commission.

The County's bank deposits are insured by the Federal Deposit Insurance Corporation (FDIC) to a maximum of $100,000 per bank. Deposited funds are also subject to additional protection by the Washington State Public Deposit Protection Commission. The Commission requires banking institutions qualified as public depositories to pledge collateral in the amount of at least 10% of their total public deposits. Losses of public funds at a single banking institution may be assessed proportionally against the collateral of all qualified public depositories.

Governmental Accounting Standards Board (GASB) Statement No. 3 requires disclosure of investment balances categorized by level of credit risk. Category 1 investments are those that are insured, registered, or held by the County or by its agent in the name of the County. Category 2 investments are those that are uninsured but collateralized with securities held by the pledging financial institution’s trust department or agent in the County’s name. Category 3 investments are uninsured and uncollateralized; or collateralized with securities not in the County’s name; or collateralized with no written or approved collateral agreement. All County investments are Category 1 investments.

Investments are reported at cost, which is materially equivalent to fair value. As of December 31, 2002 the County held no related-party investments.

44 Notes To The Financial Statements For the Year Ended December 31, 2002

Treasurer's Inventory of Cash and Investments As of December 31, 2002

Carrying Value Market Value Cash Account - Bank of America $ 12,577,546 $ 12,577,5 46 Investments Securities of the Federal Government 79,077,869 79,556,7 89 Local Government Investment Pool 659,377,425 6 59,377,425 Certificates of Deposits 45,145,899 45,145,8 99 Municipal Bonds 30,490,930 30,490,9 30 Subtotal Investments 814,092,123 8 14,571,043 Less cash and investments for SERS Joint Venture ( 15,426,016) (15,426,016) Total Cash and Investments held by the Treasurer 811,243,653 8 11,722,573 Other Deposits and Investments 7,018,101 7,018,1 01 Total Cash and Investments as reported for primary government, component units and fiduciary (agency) funds $ 818,261,754 $ 8 18,740,674

3.B. Taxes Receivable Taxing Authority The County is authorized to levy both “regular” property taxes and “excess” property taxes. Regular property taxes are subject to limitations as to rates and amounts and are imposed for general municipal purposes, including the payment of debt service on limited tax general obligation bonds. The County also may impose “excess” property taxes that are not subject to limitation when authorized by a 60 percent majority popular vote, as provided in Article VII, Section 2, of the State Constitution and Revised Code of Washington (RCW), Chapter 84.52.052. To be valid, such popular vote must have a minimum voter turnout of 40 percent of the number who voted at the last County general election, except that one-year excess tax levies also are valid if the turnout is not less than 24 percent of the number who voted at the last County general election. Excess levies may be imposed without a popular vote when necessary to prevent the impairment of the obligation of contracts.

Property Tax Rates and Limitations In the State of Washington, a county may levy taxes at a maximum rate of $1.80 per $1,000 of assessed value against all the real and personal property in the county subject to taxation for general county purposes, including the payment of principal of and interest on bonds issued by the county without a vote of the people (including limited tax general obligations, such as the Bonds) (Chapter 84.52 RCW). The County levied $1.3709 per $1,000 in 2002. In addition, counties may levy taxes at a maximum rate of $2.25 per $1,000 of assessed value in the exercise of road powers. The County levied $1.9023 per $1,000 in 2002 for road construction and maintenance.

45 Notes To The Financial Statements For the Year Ended December 31, 2002

A county may increase its levy from $1.80 to $2.475 for general county purposes if the total levies for both county and road purposes do not exceed $4.05 per $1,000 of assessed value and no other taxing district has had its levy reduced as a result of the increased county levy.

The $1.80 per $1,000 limitation on the general purposes levy is exclusive of certain regular property taxes: (i) a voted levy for emergency medical services, limited to $0.50 per $1,000 (authorized by RCW 84.52.069); (ii) a voted levy to finance affordable housing for very low income households, limited to $0.50 per $1,000 (authorized by RCW 84.52.105); and (iii) a non voted levy for conservation futures, limited to $0.0625 per $1,000 (authorized by RCW 84.34.230). The County currently is levying $0.00584 per $1,000 for conservation futures.

Aggregate regular property tax levies by the State and all taxing districts except port districts and public utility districts are subject to a rate limitation of one percent of the true and fair value of property (or $10.00 per $1,000) by Article VII, Section 2 of the State Constitution and by RCW 84.52.050. Within the one percent limitation, aggregate regular property tax levies by all taxing districts except the State, port districts and public utility districts are subject to a rate limitation of $5.90 per $1,000 of assessed value (or 0.59%) by RCW 84.52.043(2). This limitation is exclusive of levies for emergency medical services, affordable housing for very low-income households and acquiring conservation futures. If aggregate regular property tax levies exceed the one percent or $5.90 per $1,000 limitations, levies requested by “junior” taxing districts within the area affected are reduced or eliminated according to a detailed prioritized list (RCW 84.52.010), in order to bring the aggregate levy into compliance. Junior taxing districts are defined by RCW 84.52.043 as all taxing districts other than the State, counties, cities, towns, road districts, port districts, and public utility districts.

Initiative Measure 747 (“I747”) appeared on the November 6, 2001 statewide general election ballot and was approved by voters. I747 places additional limitations on annual increases in the dollar amount of non-voted property taxes. I747 lowered the 106 percent component of the levy limitation to 101 percent. As a result, the limit factor for the County is currently considered to be the greater of (i) the lesser of 101 percent or 100 percent plus inflation, or (ii) any percent up to 101 percent, if approved by a majority plus one vote of the County Council upon a finding of substantial need. I747 will have no impact on the County’s authority to levy voter-approved property taxes.

Property Tax Levy Procedures In the State of Washington, the county assessors (the “Assessor”) determine the value of all real and personal property throughout their respective counties that is subject to ad valorem taxation. The Assessor’s duties and methods of determining value are prescribed and controlled by statute and by detailed

46 Notes To The Financial Statements For the Year Ended December 31, 2002

regulations promulgated by the Department of Revenue of the State of Washington. For tax purposes, the assessed value of property is set at 100% of its actual value. All property is subject to revaluation every four years. The Assessor on a tax roll at its current assessed value lists the property and the tax roll is filed in the Assessor’s office.

The Assessor’s determinations are subject to revision by the County Board of Equalization and, for certain property, subject to further revision by the State Board of Equalization. After all administrative procedures are completed; the County receives the Assessor’s final certificate of assessed value of property within the County.

Property taxes are levied in specific amounts, and the rates for all taxes levied for all taxing districts in the County (including the County) are determined, calculated, and fixed by the Assessor based upon the assessed valuation of the property within the various taxing districts. The Assessor extends the taxes to be levied within each taxing district upon a tax roll, which contains the total amount of taxes to be so levied and collected. The tax roll is delivered to the County Treasurer by January 15 of each year, and an abstract of the tax roll, showing the total amount of taxes collectible in each of the taxing districts for the year, is delivered to the County Auditor at the same time. The County Auditor issues to the County Treasurer a warrant authorizing the collection of taxes listed on the Assessor’s certified tax roll. The Treasurer creates a tax account for each taxpayer and is responsible for the collection of taxes due to each account. All such taxes are due and payable on the 30th of April of each year, but if the amount due from a taxpayer exceeds $50, one-half may be paid then and the balance no later than October 31 of that year.

The method of giving notice of payment of taxes due, the Treasurer’s accounting for the money collected, the division of the taxes among the various taxing districts, notices of delinquency, and collection procedures are all covered by detailed statutes.

Tax Liens and Foreclosure Property taxes and all charges and expenses relating to the taxes constitute a statutory lien on the property taxed. The lien attaches to the property from and including January 1 in the year in which the tax is levied, and is discharged only when the taxes are paid. In other respects, and subject to the “Homestead Exemption,” the lien for delinquent property taxes is prior to all other liens or encumbrances of any kind on real or personal property subject to taxation. The courts have not decided whether the Homestead Law (chapter 6.13 RCW) may give the occupying homeowner a right in the forced sale of the family residence for delinquent general property taxes to retain the first $40,000 of proceeds of the sale (see Algona v. Sharp, 30 Wn. App. 837, 638, P.2d 627 (1982), holding the homestead right superior to liens for local improvement district assessments).

47 Notes To The Financial Statements For the Year Ended December 31, 2002

By law, the Treasurer may commence foreclosure of a tax lien on real property after three years have passed since the first delinquency. The County Treasurer may commence foreclosure proceedings in superior court upon all tax liens embraced by the certificate of delinquency. The County Treasurer must immediately sell the property to the highest and best bidder for cash upon entry of the order of foreclosure. The minimum bid allowable is the total amount of the taxes, interest, penalty, and costs due. To the extent property is stricken to the County at a foreclosure sale, that property is exempt from taxation for so long as the County holds it. A property owner may redeem their property at any time prior to the foreclosure sale by paying the County Treasurer the amount of the certificate of delinquency and all taxes, interest and costs accruing after the certificate of delinquency is issued, together with interest on such amount at the rate of 12% per annum.

Property Taxes Receivable The following table summarizes property taxes receivable activity for 2002:

Property Taxes Receivable For the Year Ended December 31, 2002

Taxes Tax Levy Taxes Levied Taxes Tax Levy Taxes Receivable, ($/1000) Collected Adjustments Receivable, Beginning Ending County Funds General Fund $ 3,206,536 $ 1.2676 $ 57,749,763 $ 5 7,948,184 $ 4 63,614 $ 3, 471,729 River Improvement 15, 587 0.0061 280, 022 279,120 (3 62) 1 6,127 Veterans Relief 16,783 0.0069 0 16,783 0 0 Mental Health 18,675 0.0077 0 18,675 0 0 Develop Disabilities 18,675 0.0077 0 18,675 0 0 Human Services 0 0.0077 1,013,260 954,805 (1,070) 57,385 Refund Fund 8, 710 1.2676 0 1,361 (1,991) 5,358 Limited Tax Debt Serv 191,361 0.0749 3,413,084 3,403,587 (3,883) 196,975 Facility Construction 0 1.3700 0 0 175 175 Surface Water 31, 441 1.2676 0 5,623,474 5,903,463 311,430 Road 2, 358,106 1.9023 38,647,261 38,706,276 45,376 2,344,467 Conservation Futures 144, 557 0.0584 2,662,045 2,651,616 (3,033) 151,954 Subtotal 6,010,431 103,765,435 109,622,555 6,402,289 6,555,600 Agency Funds Forest Fire 90, 708 N/A 0 623,858 624,136 90,986 State Schools 8,323,643 3.2876 149,774,570 148,816,340 (713,092) 8,568,781 School Districts 11,652,170 4.4107 217,857,450 215,966,081 (1,199,721) 12,343,818 Drainage and Dike Districts 202,525 - 0 420,163 227,844 10,206 Fire Districts 2,056,726 1.5216 35,737,365 35,581,333 (132,275) 2,080,483 Cities/Towns 3,713,929 2.5642 78,640,964 88,101,475 9,893,268 4,146,686 Library Districts 877,210 0.3319 16,853,046 16,820,371 78,379 988,264 Park Districts 22,261 0.0650 385,893 385,034 (792) 22,328 Port Districts 155,650 0.2350 3,412,908 3,346,342 (2,527) 219,689 Hospital districts 388,303 0.3446 6,388,487 6,397,747 (6,173) 372,870 Subtotal 27,483,125 509,050,683 516,458,743 8,769,047 28,844,111

Total Taxes Receivable $ 33,493,556 $ 612,816,118 $626,081,298 $15,171,336 $ 35,399,711

48 Notes To The Financial Statements For the Year Ended December 31, 2002

3.C. Other Receivables In addition to the taxes receivable, the County reported receivables due from private customers and other government entities at $39.6 million. Due from other governments resulted from grant revenues earned by the County, including $5 million from the state and $1 million due from the City of Everett for road construction and maintenance in the county road fund. $7.3 million of receivables due from SERS member cities to pay for the 1999 general obligation bond used in the financing of the 800 MHZ project were included in the other governmental funds. The Solid waste fund reports $2.7 net receivables from its private customers for solid waste disposal.

Other Receivables As of December 31, 2002

Other Due From Notes Receivables Other Contract Governmental Activities Governments Receivables General Fund $ 181,535 $ 1,373,547 $ - County Road Fund 1,139,831 7,957,590 - Human Services Fund 41,745 4,387,412 - Capital Projects Fund - 521,364 - Other Governmental Funds 4,888,978 8,502,108 5,157,261 Internal Service Funds 122,032 83,764 - Total Governmental Activities 6,374,121 22,825,784 5,157,261

Business-type Activities Airport 515,441 958,917 - Solid Waste Management 2,752,323 621,349 - Surface Water Management 120 304,149 - Total Business-type Activities 3,267,885 1,884,416 -

Total Primary Government $ 9,642,006 $ 24,710,200 $ 5,157,261

3.D. Capital Assets The following is a summary of changes in capital assets for the County primary government:

CAPITAL ASSETS For the Year Ended December 31, 2002

Beginning Balance Increases Decreases Ending Balance Governmental Activities: Capital assets not depreciated: Land and improvements $ 104,566,581 $ 14,637,333 $ (1,495,874) $ 117,708,040 Construction in Progress 17,431,217 12,515,108 (595,882) 29,350,443 Total capital assets not depreciated 121,997,798 27,152,441 (2,091,756) 147,058,483

49 Notes To The Financial Statements For the Year Ended December 31, 2002

CAPITAL ASSETS (continued) For the Year Ended December 31, 2002

Beginning Balance Increases Decreases Ending Balance

Other capital assets: Buildings 78,340,565 1,818,280 (1,274,044) 78,884,801 Improvements 12,360,509 664,588 - 13,025,097 Equipment 60,526,699 9,973,259 (7,472,158) 63,027,799 Infrastructure 318,463,751 35,378,611 - 353,842,362 Intangible Assets 1,845,383 449,118 (102,337) 2,192,163 Total other capital assets at historical cost 471,536,906 48,283,856 (8,848,539) 510,972,223

Less accumulated depreciation for: Buildings (40,264,270) (1,375,089) 1,274,044 (40,365,315) Improvements (1,330,729) (317,091) - (1,647,820) Equipment (29,189,272) (4,398,620) 6,142,180 (27,445,712) Infrastructure (121,161,381) (16,544,366) - (137,705,747) Intangible Assets (1,456,198) (349,861) - (1,806,059) Total accumulated depreciation (193,401,851) (22,985,027) 7,416,224 (208,970,653) Other capital assets, net 278,135,056 25,298,829 (1,432,315) 302,001,569

Governmental activities capital assets, net $ 400,132,853 $ 52,451,270 $ (3,524,071) $ 449,060,052

Business-type activities Capital assets not depreciated: Land and improvements $ 32,297,442 $ 713,412 $ - $ 33,010,854 Construction in Progress 41,388,951 22,170,253 (9,653,631) 53,905,573 Total capital assets not depreciated 73,686,393 22,883,665 (9,653,631) 86,916,427

Other capital assets: Buildings 24,600,463 4,112,020 - 28,712,483 Equipment 4,304,119 290,479 (1,264,537) 3,330,061 Infrastructure assets and other improvements 106,308,771 1,609,400 (69,827) 107,848,344 Intangible Assets 1,449,018 167,520 (486,079) 1,130,459 Total other capital assets at historical cost 136,662,372 6,179,419 (1,820,444) 141,021,347

Less accumulated depreciation for: Buildings (11,112,459) (941,947) - (12,054,406) Equipment (3,352,940) (236,859) 952,308 (2,637,491) Infrastructure assets and other improvements (74,624,091) (2,458,881) - (77,082,972) Intangible Assets (871,345) (320,775) 455,179 (736,941) Total accumulated depreciation (89,960,835) (3,958,462) 1,407,487 (92,511,810) Other capital assets, net 46,701,536 2,220,958 (412,957) 48,509,537

Business-type activities capital assets, net $ 120,387,929 $ 25,104,623 $ (10,066,588) $ 135,425,964

Depreciation Amounts posted in the accumulated depreciation include retirement of assets sold, transferred, or adjusted due to changes in capitalization threshold and current period depreciation expense. Amount of depreciation expense charged to capital assets by function are as follows:

50 Notes To The Financial Statements For the Year Ended December 31, 2002

Depreciation Expense For the Year Ended December 31, 2002

Governmental Activities Culture and Recreation $ 459,113 General Government 4,252,603 Health And Human Services 123,255 Judicial 590,818 Physical Environment 16,673 Public Safety 935,019 Transportation 16,607,547 Total Governmental Activities 22,985,027

Business-type Activities Airport 2,419,431 Solid Waste Management 1,223,700 Surface Water Management 316,558 Total Business-type Activities 3,959,689

Total Primary Government $26,944,716 3.E. Long Term Debt The County’s long-term debt consists of general obligation bonds, Washington State public works trust fund loans, bond anticipation notes and special assessment bonds for road improvement district (RID) 24A.

RID 24A bonds were issued in March 1997 for $3.8 million as special limited obligations bonds. Bonds are payable solely from assessments levied on property located adjacent to U.S. Interstate 5, near the 172nd St. NE off ramp in north-central Snohomish County, one to two miles north of Marysville city limits and just west of the Arlington city limits. As of December 31, 2002, special assessments to the property owners within RID 24A remain current on their assessment payments. A RID guaranty funds have been set up under RCW 36.88.220 providing restricted assets of $171,833 at the end of 2002.

The following table summarizes the general obligation debt issued and outstanding as of December 31, 2002, including the revenue sources to be used for repayment.

51 Notes To The Financial Statements For the Year Ended December 31, 2002

Description Funding Source(s) Bond Issue Scheduled Scheduled 2002 GO Interest Amount Payoff Date Debt Payment Rates 1993 Bond Issue, Non Refunded Elevator $ 11 5,200 2003 $ 38,400 5% General Fund Geographical Information Charges GIS to Dept System (GIS) 13 year 23 9,800 2003 81,600 5% Refunding 86A/Fairgrounds 5, 195,000 2003 740,000 5% General Fund 86B Callable/Solid Waste 7, 040,000 2006 580,000 6% Solid Waste 86B Callable/Solid Waste 13, 480,000 2007 1,425,000 5% Solid Waste Total 1993 Bond Issue, Non refunded $ 26, 070,000 $ 2,865,000

1995 Non-refunded Memorial Stadium $ 235,000 2004 $ 45,000 5% Regional Tourism Tax Fund (Planning Dept.) and City of Everett $52,311 Public Safety 295,000 2004 65,000 5% Real Estate Excise Tax (Reet) Surface Water 940,000 2004 230,000 5% Reet 2 Parks 745,000 2004 185,000 6% Reet 2 Medical Examiner 675,000 2004 170,000 5% Reet I Denney Youth Center 3,620,000 2004 880,000 5% Levy Lid Lift and Reet I Total 1995 Bond Issue, Non refunded $ 6, 510,000 $ 1,575,000

1997 Bond Issue Auditor Ballot Elections Equipment $ 305,000 2002 $ 60,000 5% Cumulative Reserve Fund Honeywell Campus 2,665,000 2007 245,000 5% General Fund/Energy Savings Honeywell Corrections 565,000 2007 50,000 5% General Fund/Energy Savings Conservation Futures 24,800,000 2017 885,000 5% Conservation Futures Tax Memorial Stadium Series 400,000 2027 deferred to 2019 AquaSox Baseball Team Memorial Stadium Series AquaSox Baseball Team 1,134,775 2026 deferred to 2019 B Airport 8,415,000 2017 300,000 5% Airport O&M GTE Building 2,035,000 2017 75,000 5% ER&R (Public Works Dept.) Total 1997 Bond Issue $ 40, 319,775 $ 1,615,000

1998 Bond Issue Solid Waste $ 19,450,000 2010 $ 1,675,000 5% Solid Waste Revenues Total 1998 Bond Issue $ 19, 450,000 $ 1,675,000

1999 Bond Issue Auditor Imaging $ 480,000 2006 $ 65,000 5% Auditor's O&M Cathcart 8,333,248 2014 430,760 5% 309 Fund Parks Mitigation Snohomish County 800 Reet 2 MHz 4,757,815 2019 148,531 5% Edmonds 800 MHz 1,479,808 2019 49,552 5% City Billing Fire District No. 111 800 Fire District Billing MHz 1,212,724 2019 46,524 5% Lynnwood 800 MHz 1,795,107 2019 60,110 5% City Billing Marysville 800 MHz 1,197,020 2019 40,083 5% City Billing Mill Creek 800 MHz 451,709 2019 15,126 5% City Billing Mountlake Terrace 800 City Billing MHz 804,410 2019 26,936 5% Woodway 800 MHz 60,674 2019 2,032 475% City Billing Snocom 800 MHz City Billing Edmonds 404,986 2019 13,561 5% Snocom 800 MHz City Billing Mountlake Terrace 215,882 2019 7,229 5% Snocom 800 MHz Other 759,865 2019 30,316 5% Reet I GIS Phase III 2,865,000 2008 245,000 5% Charges GIS to Dept Airport, C-3 1,188,488 2014 61,435 5% Fund 410 Airport O&M Airport, C-5 1,118,264 2014 57,805 5% Fund 410 Airport O&M Total 1999 Bond Issue $ 27, 125,000 $ 1,300,000

52 Notes To The Financial Statements For the Year Ended December 31, 2002

Description Funding Source(s) Bond Issue Scheduled Scheduled 2002 GO Interest Amount Payoff Date Debt Payment Rates 2001 Bond Issue Surface Water Reet 2 Management $ 13,777,451 2021 $ 146,106 5% Airport Debt Service 10 502,339 2011 31,199 5% Airport O&M Year Airport Debt Service 20 Airport O&M Year 10,686,567 2021 113,328 5% 800 MHZ Phase 2 12,572,432 2021 133,327 5% Reet I Parks 5,667,266 2021 60,100 5% General Fund Campus Redevelopment General Fund/ Lease 117,258,945 2026 130,940 5% Avoidance/ Reet I 93/95 Refunding Elevator Refunded 140,000 2006 deferred to 2004 General Fund GIS 13 year Refunded 300,000 2006 5,000 4% Charges GIS to Dept Denney Youth Center Levy Lid Lift and Reet I Refunded 15,925,000 2015 85,000 4% Memorial Stadium Regional Tourism Tax Fund (Planning Dept.) and City of Refunded 4,385,000 2018 25,000 4% Everett $52,311 Public Safety Refunded Reet 1 **Fund Balance in Fund 1,345,000 2015 5,000 4% 215 was used in 2003 Surface Water Refunded 275,000 2005 deferred to 2003 4% Reet 2 Parks Refunded 230,000 2005 deferred to 2003 4% Reet 2 Medical Examiner 205,000 2005 5,000 4% Reet I Total 2001 Bond Issue $ 183,270,000 $ 740,000

2002 Bond Issue 2002 Bond Anticipation 2003 GO debt issue, Election Note Electronic Voting equipment cumulative reserve Equipment $ 4,539,319 2003$ - 2% fund Total 2002 Bond Issue $ 4,539,319 $ - Grand Total of General Obligation Bonds $ 307,284,094 $ 9,770,000

Debt service requirements at December 31, 2002 are as follows:

Debt Service Requirements (in thousand) For the Year Ended December 31, 2002

Governmental Activities

General Obligation Other Debt Special Assessment Principal Interest Principal Interest Principal Interest 2003$ 12,357 $ 18,967 $ 624 $ 46 $ - $ - 2004 8,044 18,367 571 42 - - 2005 8,366 17,776 579 38 195 145 2006 8,207 17,100 587 34 195 135 2007 8,498 16,446 595 30 195 124 2008-2012 45,765 71,835 2,219 91 955 457 2013-2017 51,190 50,183 1,221 23 950 174 2018-2022 39,057 27,974 - - - - 2023-2027 31,712 8,393 - - - - Total$ 213,196 $ 247,041 $ 6,396 $ 304 $ 2,490 $ 1,035

53 Notes To The Financial Statements For the Year Ended December 31, 2002

Debt Service Requirements (in thousand) For the Year Ended December 31, 2002

Business-Type Activities

Solid Waste Airport Surface Water Other Debt Principal Interest Principal Interest Principal Interest Principal Interest 2003$ 3,870 $ 1,573 $ 824 3,725 440 718 $ 104 $ 122 2004 4,040 1,250 866 1,012 461 696 1,153 122 2005 4,240 989 904 964 485 673 1,153 122 2006 4,440 807 952 914 509 649 1,153 122 2007 4,760 616 996 863 535 623 1,153 122 2008-2012 7,005 757 5,752 4,506 3,103 2,687 6,219 610 2013-2017 - - 6,476 1,880 4,017 1,773 5,247 610 2018-2022 - - 3,166 426 4,081 551 4,192 610 Total$ 28,355 $ 5,992 $ 19,936 14,290 13,631 8,370 $ 20,374 $ 2,440

The following table summarizes the changes in long-term debt during 2002:

Long-term Debt (in $/1000) For the Year Ended December 31, 2002

Beginning Additions Reductions Ending Amounts Due Balance Balance Within One Year

Governmental Activities: Bonds and notes payable: General obligation debt$ 214,032 $ 4,539 $ (5,380) $ 213,191 $ 12,537 Special Assessment 2,880 - (390) 2,490 - Other General Obligation Debt 6,881 66 (551) 6,396 624 Subtotal 223,793 4,605 (6,321) 222,077 13,161

Business-type Activities:

Bonds and notes payable Solid Waste 32,035 - (3,680) 28,355 3,870 Airport 20,500 - (564) 19,936 824 Surface Water 13,777 - (146) 13,631 440 Other Debt 3,308 17,250 (184) 20,374 104 69,620 17,250 (4,574) 82,296 5,238 Unamortized Discount on G.O. Bond 962 - - 962 - Subtotal 70,582 17,250 (4,574) 83,258 5,238

Total Primary Government: $ 294,375 $ 21,855 $ (10,895) $ 305,335 $ 18,399

54 Notes To The Financial Statements For the Year Ended December 31, 2002

Debt Limitation

Voted Debt - The County may issue general obligation bonds for general county purposes in an amount not to exceed 2.5 percent of the assessed value of all taxable property. Unlimited tax general obligation bonds require an approving vote, and any election to validate general obligation bonds must have a voter turnout of at least 40 percent of those who voted in the last State general election. Of those voting, 60 percent must be in the affirmative. The principal of and interest on voted general obligation bonds is payable from property taxes in excess of regular property taxes, without limitation as to rate or amount.

Non-voted Debt - The County Council may, by ordinance, authorize the issuance of limited tax general obligation bonds in an amount up to 1.5 percent of the assessed valuation within the County without authorization of the voters. No combination of limited and unlimited tax bonds may exceed 2.5 percent of the assessed valuation. The principal and interest on non-voted debt is payable from regular property tax levies or from other available revenues of the County.

The County’s general obligation debt capacity as of December 31,2002 is shown on Table 8 of the statistical section of this report.

The County analyzes arbitrage requirements and for the year ended there has been no arbitrage liability with its general obligation debt issues.

3.F. Employee Benefits Payable (Compensated Absences) The following table summarizes the County’s liability for compensated absences.

Compensated Absences (in $/1000) For the Year Ended December 31, 2002

Beginning Additions Reductions Ending Amounts Due Balance Balance Within One Year

Governmental Activities $ 9,407 $ 897 $ - $ 10,304 $ 2,196 Business-type Activities Solid Waste 420 75 - 495 56 Airport 277 - (117) 160 4 Surface Water 193 56 - 249 - Subtotal Business-type 890 131 (117) 904 60 Total Primary Government $ 10,297 $ 1,028 $ (117) $ 11,208 $ 2,256

55 Notes To The Financial Statements For the Year Ended December 31, 2002

3.G. Accrued Liabilities The county’s accrued liabilities includes the following:

Accrued Liabilities As of December 31, 2002 Governmental Business-type Total Primary

Activities Activities Government

Interest Payable$ 959,159 $ 335,639 $ 1,294,798 Wages Payable (Compensated Absences) 2,196,555 59,884 2,256,439 Other Accrued Liabilities 114,375 265,860 380,235 Total $ 3,270,089 $ 661,383 $ 3,931,472

3.H. Operating/Capital Transfers Operating/Capital transfers represent subsidies and contributions provided to operating funds and capital project funds with no corresponding debt or promise to repay. The table below summarizes the transfers made between each funds.

56 Notes To The Financial Statements

Schedule of Interfund Transfers For the Year Ended December 31, 2002

Receiving Funds Governmental Activities Business-type Activities General County Road Human Other Internal Subtotal Surface Water Solid Subtotal Total Fund Fund Services Fund Governmental Service Fund Governmental Management Waste Business- Transfer Out Fund Activities Fund Fund type Activities Disbursing Funds Governmental Activities General Fund $ 5 27,252 $ 75 ,000 $ 1,939,968 $ 6, 973,380 $ - $ 9,515,600 $ 130,484 $ 12,500 $ 142, 984 $ 9 ,658,584 County Road Fund 1,893,391 - - 50,459 - 1,943,850 - - - 1,943,850 Human Services Fund - - 3,682 - - 3,682 - - - 3,682 Other Governmental Funds 1,224,347 7,144,514 98,950 17,424,539 - 25,892,350 2,678,467 - 2,678,467 28,570,817 Internal Service Funds 446,254 1,857,139 - 333,373 2,165,697 4,802,463 - - - 4,802,463 Subtotal 4, 091,244 9, 076,653 2,042,600 24, 781,751 2,165,697 42, 157,945 2,808,951 12,500 2, 821,451 44 ,979,396

Business-type Activities Surface Water Management Fund 124,545 2,453 - 106,674 - 233,672 - - - 233,672 Solid Waste Fund - 783,474 - - - 783,474 - - - 783,474 Subtotal 1 24,545 7 85,927 - 106,674 - 1,017,146 - - - 1 ,017,146

Total Transfer In $ 4, 215,789 $ 9, 862,580 $ 2,042,600 $ 24, 888,425 $ 2,165,697 $ 43, 175,091 $ 2,808,951 $ 12,500 $ 2, 821,451 $ 45,996,542

56 Notes To The Financial Statements

3.I. Net Assets/Fund Equity The County reported $107.9 million of restricted net assets. These net assets are subject to external restrictions such as those imposed by the Revised Code of Washington (RCW) or by contractual agreements with parties outside the County. The remaining balance of $253.7 million represents the unrestricted net assets, the amount that the County may use to meet its ongoing obligations.

Governmental Activities Restricted Net Assets are summarized below:

Restricted Net Assets - Governmental Activities

Restricted Net Assets - Governmental Activities As of December 31, 2002

General Government Statutory Limitation Antiprofiteering Revolving $ 9 4,623 RCW 9A.82.110 (4) Auditor's Operation and Maintenance 5 20,800 RCW 36.22.170 Conservation Futures Tax 9 ,877,475 RCW 84.34.240 Elections Equipment Cumulative Reserve 6 39,306 RCW 36.33.020 36.33.030 Equipment Rental and Revolving 1 1,935,575 RCW 36.33.010 Grant Control 2 ,259,361 Grant agreements with various state & federal agencies Pits and Quarries 4 ,646,964 RCW 36.33.010 Real Estate Excise Tax 6 ,249,344 RCW 82.46.010 & 82.46.035 Snohomish County Tomorrow Cumulative Re 2 5,778 RCW 36.33.020 36.33.030 Treasurer's Operation & Maintenance 1 95,964 RCW 84.56.020 Subtotal 36,445,188 Public Safety Crime Victims/Witness 5 66,642 RCW 7.68.035(1), (3), (4), 9.92.060, and 9.95.210 Emergency Services Communication 8 42,163 RCW 82.14B.030 Sheriff Drug Buy Fund 37 3,114 RCW 69.50.505 (f), 63.40 RCW 9.41, 9A.82, 9A.83, or 10.105 Sheriff-Search and Rescue 30 7,152 RCW 36.33.020 36.33.030 Subtotal 2,089,071 Health & Human Services Housing Trust Fund 74 6,905 RCW 36.33.020 36.33.030 Low Income Housing Projects Act of 2002 (Laws of 2002, chapter 294) US Department of Housing Grants 3 ,732,559 Grant Agreements with HUD Subtotal 4,479,465 Culture and Recreation Evergreen Fairground Cumulative Reserve 8 31,484 RCW 36.33.020 36.33.030 Parks Mitigation 2 ,862,875 RCW 82.02.050 Subtotal 3,694,359 Transportation County Road 4 3,287,542 RCW 36.33.220 Public Works Facility Construction 1, 066,361 RCW 36.33.020 36.33.030 Transportation Mitigation 1 5,791,345 RCW 39.92.030 (4), 82.02.050 Subtotal 60,145,248 Total Restricted Net Assets $ 1 06,853,332

57 Notes To The Financial Statements

Adjustments to Net Assets (Equity) In presenting the financial statements in accordance to GASB Statement No. 34, beginning fund balance and net assets have to be restated. These adjustments were presented as prior period adjustments and cumulative effect in change in accounting principle. The following table summarizes these adjustments as follows:

Beginning Net Assets, Restated For the Year Ended December 31, 2002

Governmental Business-type Total Primary Activities Activities Government Beginning Net Assets $ 320,545,569 $ 124,449,277 $ 444,994,846 Prior Period Adjustments 2,431,421 (1,863,783) 567,638 Cumulative Effect in Change in Accounting Principle 200,274,612 (223,429) 200,051,183 Beginning Net Assets, Restated $ 523,251,602 $ 122,362,065 $ 645,613,667

The adjustments posted in the cumulative effect in change in accounting principle relates to the change in the capitalization threshold for capital assets from $2,000 to $5,000. This account was also used to post retroactive capitalization of infrastructure assets and its related accumulated depreciation. Other adjustments included the restatement of the beginning fund balance of governmental activities for the interest paid in 2002 that were accrued for 2001. These adjustments are summarized below.

Cumulative Effect in Change in Accounting Principle For the Year Ended December 31, 2002

Governmental Business-type Total Primary

Activities Activities Government Change in minimun threshold for capital assets $ (1,384,998) $ (223,429) $ ( 1,608,427) Retroactive capitalization of infrastructure assets, net of accumulated depreciation 252,156,759 - 252,156,759 Accumulated Depreciation from Prior Periods - Capital Assets (49,053,477) - ( 49,053,477) Removal 0f 2001 interest expense from 2002 (1,443,672) - ( 1,443,672) Total $ 200,274,612 $ (223,429) $ 200,051,183

Prior period adjustments included accrual adjustments from prior period in order to restate the entity-wide statements to full accrual basis. The adjustments increased net assets by $160,234. An adjustment to the compensatory time liability account for $255,054 resulted when amounts earned for compensatory time was less than the amount paid to employees. A $783,509 receivable from 1992 was written off. The receivable amount was settled in prior years but the

58 Notes To The Financial Statements

account remained outstanding. Fixed asset adjustments between surface water management fund, pits and quarries fund and the governmental funds increased net assets by $756,636. Acquisition made in 2001 for the glacier storage property was not capitalized as an asset in prior year reporting. Prior period adjustments are summarized below.

Prior Period Adjustments For the Year Ended December 31, 2002

Governmental Business-type Total Primary Activities Activities Government Reversal of 2001 state pool interest $ 396,649 $ (105,629) $ 291,020 Accrual adjustment of 2001 interest expense on bonds - (130,786) ( 130,786) Adjustment of comp time payable when amount accrued is less than amount paid for comp time usage. (255,054) - ( 255,054) Write off 1992 receivable balance (783,509) - ( 783,509) To reclassify fixed asset balance from surface water fund 1,324,170 (1,166,635) 157,535 Miscellaneous fixed asset adjustments

to the Pits and Quarries Fund 1,061,328 - 1,061,328 Corrections to construction in progress for the Surface Water Management Fund - (462,227) ( 462,227) Capitalization of Glacier Storage property acquired in 2001 1,004,172 - 1,004,172 Other miscellaneous adjustments (316,335) 1,494 ( 314,841) Total $ 2,431,421 $ (1,863,783) $ 567,638

Note 4. Other Notes

4.A. Employee Pension And Other Benefit Plans Substantially all Snohomish County full-time and qualifying part-time employees participate in the Public Employees Retirement System (PERS) or the Law Enforcement Officers' and Fire Fighters' Retirement System (LEOFF). Both systems are defined benefit pension plans administered by the Washington State Department of Retirement Systems for local government employers statewide. The Department of Retirement Systems issues a comprehensive annual financial report which is available on its website at http://www.wa.gov /DRS/ or by writing:

Department of Retirement Systems PO Box 48380 Olympia, WA 98504-8380

59 Notes To The Financial Statements

Public Employees' Retirement System (PERS) Plans I 2 and 3 PERS is a cost-sharing multiple-employer defined benefit pension plan. Membership in the system includes: elected officials; state employees; employees of the Supreme Appeals, and Superior courts (other than judges); employees of legislative committees; college and university employees (not in national higher education retirement programs) judges of district and municipal courts; non-certified employees of school districts; and employees of local government. PERS contains three "plans". Participants who joined the system before October 1, 1977, are Plan 1 members. Those joining after this date are considered Plan 2 or 3 members. Retirement benefits for both plans are financed from employee and employer contributions and investment earnings. These benefits become vested after completion of 5 years of eligible service. A new Plan 3 was created in March of 2000 and became effective on September 1, 2002. Plan 2 members may elect to transfer to Plan 3 and new employees may choose between Plans 2 and 3.

Plan 1 members are eligible for retirement after 30 years of service, or at the age of 60 with 5 years of service, or at the age of 55 with 25 years of service. The annual pension is 2 percent of the final average salary per each year of service, capped at 60 percent.

Plan 2 members may retire at age 65 with 5 years of service, or at 55 with 20 years of service. Benefits are reduced for retirement before age 65. The monthly benefit is calculated at 2 percent for each year of service of the average of the highest paid 60 consecutive months. There is no cap on years of service credit and a cost-of-living allowance is granted, capped at 3 percent annually.

Plan 3 is composed of two separate benefit components. Member contributions finance a defined contribution component, and employer contributions finance a defined benefit component. The member-financed, defined contribution component provides an investment program that can be accessed when a member separates from covered employment. The amount of retirement income generated by the defined contribution component depends on member’s contribution and the performance of the investments. The employer-financed, defined benefit component provides for a lifetime monthly benefit at age 65, or a reduced lifetime monthly benefit as early as age 55. Reduction factors vary based on the number of service credit years and member’s age.

Each biennium the state legislature establishes Plan 1 employer contribution rates, Plan 2 employer and employee contribution rates and Plan 3 employer contribution rates for the defined benefit component. Members for Plan 3 elect their contribution rate upon enrollment. Employee contribution rates for Plan 1 are established by statute and do not vary from year to year. The employer and employee contribution rates for Plan 2 and 3 are developed by the Office of State Actuary to fully fund the system. All employers are required to contribute

60 Notes To The Financial Statements

at the level established by the legislature. The methods used to determine the contribution requirements were established under state statute.

The required contribution rates expressed as a percentage of covered payrolls, as of December 31, 2002 were:

PERS 1 PERS 2 PERS 3

Contributor Required Required Required Employer 1.77% 1.77% N/A 01/01/02-03/31/02 Employee 6.00% 0.65% N/A 01/01/02-03/31/02 Total 7.77% 2.42% N/A Employer 1.33% 1.33% N/A 04/01/02-04/30/02 Employee 6.00% 0.65% N/A 04/01/02-04/30/02 Total 7.33% 1.98% N/A Employer 1.32% 1.32% 1.32% 05/01/02-12/31/02 Employee 6.00% 0.65% 5%-15% 05/01/02-12/31/02 Total 7.32% 1.97%

Both Snohomish County and the employees made the required contributions. Snohomish County’s required contributions of employees and employers for the years ended December 31, 2002 were:

PERS Plan 1 PERS Plan 2 PERS Plan 3 2002 $1,111,033 $2,347,711 $8,827 2001 1,432,338 4,890,518 N/A 2000 1,617,163 5,998,419 N/A 1999 1,942,779 7,942,990 N/A 1998 2,250,373 9,134,535 N/A

Law Enforcement Officers' And Fire Fighters' Retirement System (LEOFF) LEOFF is a cost-sharing multiple-employer defined benefit pension plan. Membership includes all full-time, fully compensated local law enforcement officers and fire fighters. Employee and employer contributions, investment earnings, and legislative appropriation finance retirement benefits. LEOFF is comprised solely of non-state employees.

LEOFF system contains two plans. Participants who joined the system before October 1, 1977, are Plan 1 members. Those joining after this date are considered Plan 2 members. Retirement benefits are vested after completion of 5 years of eligible service. Plan 1 participants are eligible to retire with 5 years of service at age 50. The benefit per year of service is as follows:

Term Of Service Percent of final Average 20+ Years 2.0% 10-20 Years 1.5% 5-10 Years 1.0%

61 Notes To The Financial Statements

The final average salary is the monthly salary received at time of retirement, provided the member has held the same position for the preceding 12 months. Otherwise it is the average of the highest 24 consecutive months' salary within the last 10 years of service. Substantial disability and death benefits are provided by the plan. Retirement benefits are indexed to the Seattle area consumer price index.

Plan 2 participants are eligible to retire at the age of 50 with 20 years of service or at 53 with 5 years of service. Retirement benefits prior to age 55 are actuarially reduced. The benefit is 2 percent of average salary per year of service. The average salary is based on the highest 5-year period. Retirement benefits are indexed to the consumer price index with a cap of 3 percent annually. Death and disability benefits are also provided.

Employer and employee contribution rates for Plan 2 are developed by the Office of State Actuary to fully fund the system. Plan 2 employers and employees are required to pay at the level established by the legislature. Plan 1 is considered fully funded by state subsidy and no employer or employee contributions were required, although an administrative fee is charged to employers. State statutes established the methods used to determine the contribution requirements.

The required contribution rates expressed as a percentage of covered payrolls, as of December 31, 2002 were:

LEOFF 1 LEOFF 2 Contributor Required Required 01/01/02-04/30/02 Employer 0.23% 2.87% 01/01/02/-04/30/02 Employee 0.00% 4.39% Total 0.23% 7.26% 05/01/02-12/31/02 Employer 0.22% 2.86% 05/01/02-12/31/02 Employee 0.00% 4.39% Total 0.22% 7.25%

Both Snohomish County and the employees made the required contributions. Snohomish County’s required contributions for the years ended December 31, 2002 were:

LEOFF LEOFF

Plan 1 Plan 2 2002 $ 2,265 $1,104,314 2001 3,720 1,338,532 2000 63,468 1,310,574 1999 116,528 1,447,671 1998 122,998 1,508,694 1997 121,861 1,294,813

62 Notes To The Financial Statements

Post Employment Benefit Plans At December 31, 2002, there were 14 active LEOFF 1 employees, and 77 LEOFF 1 retirees. For the retiree group as a whole, there was an average of 240 subscribers (retiree, both LEOFF 1 and PERS/LEOFF II) in 2002. For 2002, the estimated total claims cost paid is $1,683,313, which is an average of $7,014 per subscriber. This includes claims and the LEOFF disability board reimbursements of $190,836. The LEOFF board payments are all medical- oriented.

4.B. Risk Management The County uses two internal service funds to account for and finance property/casualty, worker’s compensation, and employee medical and dental benefits self-insurance programs. The County contracts with third-party claim administrators for general liability claims under $10,000 (small claims), workers' compensation, unemployment compensation, and employee medical benefits claims. The Civil Division of the County’s Prosecuting Attorney’s office handles general liability claims over $10,000. The County purchases insurance for coverage of occurrences, accident or events, neither expected nor intended from the standpoint of the County. Since 2000, claims settlements have not exceeded County's comprehensive general liability insurance as listed below:

Purchased Insurance Coverage Deductible Limits Per Per Occurrence Occurrence

Liability and Property Airport Liability $ 1,000 $200,000,000 Boiler & Machinery 25,000 PD, 25,000,000 12 hours waiting period Property Damage/Time Element 100,000 171,596,841 (combined) Earthquake 5% of values 25,000,000* *Annual aggregate limit 100,000 minimum Flood 5% of values 25,000,000* 100,000 minimum Builders Risk 25,000 Per Project

Evergreen Fairground Liability Each Occurrence 1,000,000 Products/Completed Operations 5,000,000 Aggregate Fire Damage (Any one fire) 300,000 Medical Expenses 5,000 Rodeo Excluded Contingent Ride Liability 1,000,000 Hired Non-Owned Auto Liability $ 1,000,000 Sports Participant Legal Liability Excluded

63 Notes To The Financial Statements

Purchased Insurance Coverage Deductible Limits Per Per Occurrence Occurrence Evergreen Fairground Volunteer 10,000 (AD &D) Med. Expenses

Sheriff –Search & Rescue Accidental Death Benefit 150,000 Accident/Dismember. Aggregate. 150,000 Aggregate Limit Any one Accident 450,000 Weekly Accident Indemnity 400 Accident Medical Expense Benefit 25,000 Protection & Indemnity (P&I) $ 1,000 1,000,000 Hull & Machinery (H&M) Per schedule Per schedule Helicopter - Aircraft Liability 10,000,000

Evergreen Fairground Liability Concessionaires / Special Event 1,000,000 Products/Completed Operations 5,000,000 Aggregate Personal/Advertising Injury 1,000,000 Fire Damage 300,000 Medical Expenses 5,000

Public Employees Blanket Bond Public Employee Dishonesty 25,000 5,000,000 Faithful Performance of Duty 25,000 1,000,000 Vehicle/Vessel Licensing (Sub) 2,000 170,000 Crime – Inside 25,000 5,000,000 Outside 25,000 5,000,000 Computer Fraud 25,000 5,000,000

Notary Bond Various Public Official Bond Various Financial Guarantee/State & Lease 16,000 Bond Self-Insurer’s Pension Bond 113,195

Excess Liability 1,000,000 20,000,000

Polling Locations 500 1,000,000 Aggregate 2,000,000 Fire Damage 100,000 Medical Expenses Excluded Hired & Non Owned Auto Liability Excluded

Pollution Liability-Waste - Storage $ 10,000 $ 1,000,000 Tank Program Aggregate Limit 1,000,000 Aggregate Defense Expenses 250,000

Public Defender Assigned Counsel

64 Notes To The Financial Statements

Purchased Insurance Coverage Deductible Limits Per Per Occurrence Occurrence Professional Liability each claim 1,000 1,000,000 Aggregate Limit 1,000,000 Personal Injury Liability Each Claim 1,000 100,000 Aggregate Limit 300,000 Punitive Damages each claim- each 1,000 50,000 claim Aggregate Limit 50,000 Management Errors & Omissions – 1,000 1,000,000 each claim Aggregate Limit 1,000,000 Employment Practices Liability – 500 50,000 each claim Aggregate Limit 150,000 Contempt Defense Coverage each 100 10,000 claim

Contractors Pollution Liability 250,000 25,000,000 (NBBJ) – each claim

Workers’ Compensation 25,000,000 Employer’s Liability 2,000,000 Self Insured Retention 500,000

Claims settlements and loss expenses are reported in the “Insurance Fund” and the “Employee Benefit Fund.” These funds are responsible for collecting interfund premiums from insured funds and departments, for paying claim settlements and for purchasing certain policies. Interfund premiums are assessed on the basis of claims experience. The County's established liabilities for probable losses at December 31, 2002 are:

Claims and Judgement Payable As of December 31, 2002

Beginning of Current Year Claims Balance at Claims due the Year Claims & Payments Year End within one year Liability Changes in Estimates Workers Compensation 2001 $ 1,370,796 $ 2,792,985 $ (1,780,936) $ 2,382,845 $ - 2002 2,382,845 2,797,801 (2,539,394) 2,641,252 220,000 General Liability 2001 5,540,211 3,728,817 (1,021,100) 8,247,928 - 2002 8,247,928 121,160 (870,813) 7,498,275 1,115,000 Employee Medical Benefits 2001 - 9,300,554 (7,340,280) 1,960,274 - 2002 1,960,274 13,441,072 (13,667,557) 1,733,789 - Total 2002 $ 12,591,047 $ 16,360,033 $ (17,077,764) $ 11,87 3,316 $ 1,335 ,000

65 Notes To The Financial Statements

Insurance Fund The Insurance Fund accounts for the County’s property/casualty insurance program. Established in 1977, this fund accounts for the County’s exposures to loss due to the tortuous conduct of the County and includes those that are commonly covered by general liability, automobile liability, police professional, directors and officials, error and omissions, and professional malpractice insurance policies. In addition to its property insurance policies and excess liability policy, the County has specific liability insurance policies to cover some of its other exposures and coverage for protection against loss caused by employee dishonesty; the dishonest act of third parties in writing or altering checks or other financial instruments; the theft, disappearance and destruction of monies of County locations or when conveyed by a messenger; and for faithful performance of duty.

The fund also accounts for safety and worker’s compensation liability. The County is self-insured for workers’ compensation as certified under the Revised Code of Washington, Industrial Insurance Act, and Title 51. Interfund premiums are based on the hours worked by the fund/department-covered employees times an hourly rate that varies for the different classes of employees and are recorded as quasi-external interfund transactions.

General liability estimates are based on an actuarial analysis prepared by MARSCH, Inc. in May 2003. The estimate includes all pending claim reserves and estimates for incurred but not yet received claims (IBNR), except for $1.3 million of claims that are deemed improbable loss to the County.

Unemployment compensation is expensed quarterly as claims are billed from the Washington State Employment Security Department. Claims settlements and loss expenses are accrued in the insurance fund for the estimated settlement value of both reported and unreported claims. This fund is responsible for collecting interfund premiums from insured funds and departments, for paying claim settlements and for purchasing certain insurance policies. Interfund premiums are assessed on the basis of claims experience and are reported as revenues by the insurance fund and expenses or expenditures by the insured departments and funds.

Employee Benefits Program Fund The Employee Benefits Program Fund accounts for employee medical, dental, vision, life, accidental death and dismemberment, and long term-disability benefit programs, except for public safety LEOFF retiree medical benefits. , The County has self-insured medical and vision plans. Interfund premiums are determined on per employee per month basis and charges to departments through a composite rate of expected claims, expenses and premiums. In some cases, employees contribute towards premiums.

66 Notes To The Financial Statements

4.C. Commitments, Contingencies and Legal Matters Snohomish County has recorded in its financial statements all material liabilities, including an estimate for situations not yet resolved but where, based on available information, management believes it is probable that the County will have to make payment. All known or pending claims are properly recognized within the recorded liabilities of the Snohomish County insurance fund, or are covered by insurance policies.

Debt The County is liable for repayment of defeased debt.

The County has guaranteed payment of $20,715,000 in revenue bonds issued by the Snohomish County Housing Authority. The County’s management has reviewed the housing authority’s ability to meet the debt service requirements on these bonds and does not anticipate that it will become necessary for the County to fulfill these guarantees. Accordingly, no liability has been recorded as a result of these guarantees.

Contracts In June 1992 Solid Waste Management entered into a waste export contract with Regional Disposal Company, also referred to as Rabanco, to transport Snohomish County’s solid waste to RDC’s Klickitat County, Washington landfill. The County agrees to deliver 95% of its solid waste (net of recyclable and construction debris) or 150,000 tons per year, whichever is greater. The original contract with Rabanco was for a term of seven years (which began in 1992). In 1995, the County exercised its right to renew the contract for two consecutive seven-year periods in exchange for a reduction in the waste export fee thus providing for a contract term of 21 years of waste transport, ending May 13, 2013. Snohomish County will pay RDC at a rate of approximately $40 per ton. This rate is adjusted quarterly based on average bale weights and also each October by 65% of the fractional change in the consumer price index. The county paid RDC $19.2 million in 2002. The projected annual estimates range from $20 million to $36 million through the end of the contract, based on a 3% escalation and a 3% tonnage increase.

Construction At December 31, 2002, the County had pending construction project contracts in progress. The commitments related to the remaining contract balances are summarized as follows:

67 Notes To The Financial Statements

Estimated Expended to Balance Contracts 12/31/02 Unexpended Governmental Activities County Roads $ 55,166,243 $ 30,656,870 $ 24,509,373 Facilities Management 50,830,046 10,081,750 40,748,296 Parks Construction 5,108,218 1,462,393 3,645,825 Total Governmental Activities 111,104,507 42,201,013 68,903,494

Business-type Activities Airport 21,861,530 17,730,881 4,130,649 Solid Waste 29,110,104 11,481,184 17,628,920 Total Business-type Activities 50,971,634 29,212,065 21,759,569

Total Primary Government $ 162,076,141 $ 71,413,078 $ 90,663,063

Operating Leases Future minimum rental payments required under operating leases that have initial or remaining non-cancelable lease terms in excess of one year as of December 31, 2002 are as follows:

Year Amounts 2003 $ 4,214,277 2004 3,613,519 2005 1,743,988 2006 1,230,521 2007 906,533 Later years 1 ,710,137 Total minimum payments required $ 13,418,975

No rents were paid during the year ended December 31, 2002 under lease agreements with terms of more than one month.

Grant Program Involvement In the normal course of operations, the County participates in various federal or state grant/loan programs from year to year. The grant/loan programs are often subject to additional audits by agents of the granting or loaning agency, the purpose of that is to ensure compliance with the specific conditions of the grant or loan. Any liability for reimbursement that may arise as a result of these audits cannot be reasonably determined at this time, although it is believed the amount, if any, would not be material.

Environmental Liabilities Snohomish County has a number of closed landfill sites, four of which have a current potential for risk of environmental liability due to groundwater contamination. No determination has been made regarding the extent of the contamination, if any, nor has any range of financial liability been determined. Federal, state, and local regulations require the performance of certain maintenance and monitoring functions at closed landfill sites. However, a

68 Notes To The Financial Statements

liability for future landfill closure costs related to one of these sites has been recorded in the solid waste fund and is reflected in the financial statements.

Litigation The County is a party to various legal proceedings, which normally occur in the course of governmental operations. The financial statements do not include accrual or provisions for loss contingencies that may result from these proceedings.

While the outcome of the above noted proceedings could not be predicted with certainty, the County feels that any settlement or judgment not covered by insurance would not have a material adverse effect on the financial condition of the County.

The following litigation, or threatened litigation, may involve claims for material damages against the County. Currently, the County is unable to provide an opinion as to the ultimate outcome or the amount of damages that may be found:

A $4 million claim by 12 real estate development companies for the recovery of impact fees collected by the County since 1995 for parks, roads, and schools have been filed in November 2002. Plaintiffs are seeking to have the case certified as a class action. The plaintiffs allege the County had no legal right to collect impact fees because it was not in compliance with the provisions of the Growth Management Act allowing such fees. The County's position is that at all relevant times it has been in compliance. The lawsuit was dismissed in June of 2003; however, it is unknown if the plaintiffs will appeal.

Corrections officers at the county jail filed 130 damage claims in December 2002. The employees allege that the County has required them to work during their lunch breaks in violation of the provisions of their collective bargaining agreements, state, and federal law. The employees work eight hour shifts with an included and paid half hour lunch break. Each employee claims damages in the amount of $5,000 per year for each of the last six years or portion thereof worked. The County's position is that it has properly paid for lunch time periods pursuant to the collective bargaining agreements.

4.D. Segment Information The County issued general obligation debt to finance capital improvements for Solid Waste and Airport. Solid Waste and Airport are accounted for in separate proprietary funds. Summary financial information is presented in the Management Discussion and Analysis. Its major customers include:

69 Notes To The Financial Statements

% of Receivable % of Sales Solid Waste Lynnwood Disposal 9% 9% Waste Management Northwes 45% 44% Rubatino Refuse 16% 17% Subtotal Solid Waste 70% 69%

Airport Boeing 84% 33% Goodrich - 24%

4.E. Subsequent Events 2003 Limited Tax General Obligation Bonds In March 2003, the County issued $94.9 million in limited tax general obligation bonds. Proceeds from this issue were used to finance the remaining portion of the County campus redevelopment project, a National Flight Interpretive Center at Paine Field, construction of two solid waste transfer stations, repayment of a bond anticipation note, construction of airport improvements, and construction of a sheriff’s gun range and vehicle impound lot. Various sources will be used to fund debt service on these bonds, including general property taxes, real estate excise taxes, admission fees, solid waste fund operating revenues, and airport fund operating revenues.

Note 5. Reconciliation Of Government-Wide And Fund Financial Statements

5.A. Explanation of Differences Between the Governmental Fund Balance Sheet and the Government-Wide Statement of Net Assets

Total fund balances for the governmental funds balance sheet differs from net assets of governmental activities as reported in the statement of net assets due to the accounting methods used to prepare these statements. The governmental funds balance sheet is presented on a modified accrual basis and the statement of net assets is presented on a full accrual basis. In addition, net internal service fund activity is included in government activities on the statement of net assets. Details of the differences between these two presentations are as follows:

Capital Related Items When capital assets that are to be used in governmental activities are purchased or constructed, the cost of those assets are reported as expenditures in governmental funds. However, the statement of net assets included those capital assets among the assets of the County as a whole.

70 Notes To The Financial Statements

Costs of Capital Assets $ 602,652,374 Accumulated Depreciation (185,526,248) Capital Assets, Net 417,126,126

Investment in Joint Venture 17,570,484 Total Capital Assets Added $ 434,696,609

Long-Term Debt Transactions Long-term liabilities applicable to the County’s governmental debt activities are not due and payable in the current period and accordingly are not reported as fund liabilities. All debt liabilities (both current and long-term) are reported in the statement of net assets.

Interest Payable on Long-term Debt (Accrued Liabilities) $ 941,679 Bond Anticipation Notes Payable 4,539,319 Current Portion of Long-term Debt 8,191,705 Noncurrent Portion of Long-term Debt 205,336,049 Total Long-term Debt $ 219,008,751

Internal Service Funds Assets And Liabilities The assets and liabilities of the internal service funds are included in governmental activities in the statement of net assets because they primarily serve governmental activities of the County.

Internal Service Funds Total Current Assets $ 32,396,785 Internal Service Funds Total Capital Assets, Net 31,933,926 Internal Service Funds Total Assets 64,330,711

Internal Service Funds Total Current Liabilities 4,765,013 Internal Service Funds Total Noncurrent Liabilities 14,596,499 Internal Service Funds Total Noncurrent Liabilities 19,361,512

Internal Service Funds Net Assets $ 44,969,199

Other Long-term Assets/Liabilities Allowance for uncollectible receivables are reported in the statement of net assets and are not reported in the governmental funds. In addition, long-term liabilities such as compensated absences that are not due and payable in the current period, are not reported in the funds.

Allowance for Bad Debts $ (222,432) Total Assets ( 222,432)

Current Portion of Compensated Absences (Accrued Liabilities) 1,709,384 Noncurrent Portion of Compensated Absences 7,630,221 Total Liabilities $ 9,339,605

71 Notes To The Financial Statements

5.B. Explanation of Differences Between Governmental Fund Operating Statements and the Statement of Activities. Details of the differences between these two presentations are as follows:

Capital Related items When capital assets that are to be used in governmental activities are purchased or constructed, the resources expended for those assets are reported as expenditures in governmental funds. However, in the statement of activities, the costs of those assets is allocated over their estimated useful lives and reported as depreciation expense. As a result, fund balances decrease by the amount of financial resources expended, whereas net assets decrease by the amount of depreciation expense charged for the year. In addition, assets donated or contributed to the County’s governmental activities do not provide current financial resource and therefore are not reported as revenues in governmental funds.

Capital Related Expenditures $ 64,009,847 Depreciation Expense (19,167,863) Subtotal 44,841,984 Contributions and Donations from Private Sources (Capital Donatio 1,342,472 Operating/Capital Transfers-out (Contrbited capital assets) ( 256,934) Equity Adjustment in Joint Venture (665,998) Subtotal 419,541 Increase (Decrease) In Net Assets $ 45,261,525

Long-Term Debt Transactions In the statement of activities, debt and capital lease proceeds increase long- term liabilities. However, in the governmental funds, debt proceeds are treated as other financing sources since they provide current financial resources to governmental funds.

Repayments of bond principal and capital lease principal are reported as an expenditure in the governmental funds and, thus, have the effect of reducing fund balance because current financial resources have been used. However, the principal payments reduce the liabilities in the statement of net assets and do not result in an expense in the statement of activities.

Accrual of interest payments for long-term debt do not require the use of current financial resources, and accordingly, are not reported as expenditures in governmental funds. The amount reported for accrued interest expense includes restatement of net assets for interest expense paid in 2002 for 2001.

Debt Proceeds $ ( 4,538,319) Principal Payments of Long-term Debt 6,320,846 Accrued Interest Expense on Long-term Debt 501,993 Increase (Decrease) In Net Assets $ 2,284,520

72 Notes To The Financial Statements

Internal Service Funds Operating Income/Loss The assets and liabilities of the internal service funds are included in governmental activities in the statement of net assets because they primarily serve governmental activities of the County.

Internal Service Funds Total Revenues $ 1,741,725 Internal Service Funds Total Expenditures (3,684,450) Internal Service Funds Total Other Financial Sources (Uses) ( 1,954,229) Internal Service Funds Net Income(Loss) $ (3,896,954)

Other Expense and Equity Adjustments Some expenses reported in the statement of activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds.

Adjustments to equity relating to long-term assets and liabilities do not require the use of current financial resources and therefore are not reported as expenditures or revenues in governmental funds.

Accrued Expenses (Bad Debts Expense) $ ( 222,433) Accrued Expenses (Compensated Absences) (471,815) Total Increase (Decrease) to Net Assets $ (694,248)

73 Budgetary Comparison Schedule General Fund For the Year Ended December 31, 2002

Budgeted Amounts

Original Final Actual Variance

Budgetary Fund Balance, January 1 $ 26,435,094 $ 26,435,094 $ 27,337,084 $ 901,990

Resources (In-flows) Property Taxes 57,810,352 57,810,352 57,927,013 116,661 Sales/Use Taxes 29,937,992 29,937,992 30,374,607 436,615 Other Taxes 8,469,594 8,469,594 9,056,449 586,855 Licenses and Permits 1,959,202 1,959,202 1,744,725 (214,477) Operating Assessments - - 21,171 21,171 Intergovernmental Revenues 10,215,126 10,235,126 12,818,415 2,583,289 Charges for Services 23,403,838 23,403,838 23,725,805 321,967 Fines and Forfeitures 4,792,589 4,792,589 5,112,681 320,092 Interest and Investment Earnings 5,590,817 5,590,817 5,124,666 (466,151) Rents Leases and Concessions 3,309,124 3,389,124 3,454,309 65,185 Contributions & Donations-Private Sources 1,628 1,628 13,300 11,672 Miscellaneous Revenues 1,425,052 1,425,052 459,712 (965,340) Operating/Capital Transfers in 4,479,805 4,479,805 4,215,789 (264,016) Disposition of Capital Assets 190 190 - (190) Total Resources (In-flows) 151,395,309 151,495,309 154,048,642 2,553,333

Amount Available for Appropriation 177,830,403 177,930,403 181,385,726 3,455,323

Charges to Appropriations (out-flows) General Government Executive 1,816,593 1,900,846 1,823,591 77,255 Legislative 2,326,268 2,599,000 2,522,315 76,685 BRB BOE 150,876 150,876 140,849 10,027 Human Services 1,931,115 1,939,968 1,939,968 - Planning 155,543 155,543 147,099 8,444 Assessor 5,467,356 5,516,360 5,490,997 25,363 Auditor 5,624,805 5,624,805 5,585,543 39,262 Finance 3,230,477 3,230,477 3,199,087 31,390 Human Resources Services 1,761,761 1,876,502 1,830,391 46,111 Nondepartmental 14,304,123 10,649,585 9,858,256 791,329 Facilities Management 4,527,319 4,469,319 4,424,458 44,861 Treasurer 2,856,760 2,856,760 2,722,004 134,756 Sheriff 243,010 243,010 255,258 (12,248) Prosecuting Attorney 2,757,104 2,836,350 2,834,568 1,782 Corrections 183,045 157,551 157,474 77 Total General Government 47,336,155 44,206,952 42,931,858 1,275,094

The accompanying notes are an integral part of the financial statements. 74 Budgetary Comparison Schedule General Fund For the Year Ended December 31, 2002

Budgeted Amounts

Original Final Actual Variance

Judicial District Court 5,182,426 5,411,266 5,411,161 105 Superior Court 5,817,453 5,984,313 5,976,754 7,559 Clerk 5,593,943 5,371,443 5,358,129 13,314 Total Judicial 16,593,822 16,767,022 16,746,044 20,978

Public Safety District Court 1,091,780 1,056,723 1,048,259 8,464 Sheriff 32,100,943 33,058,334 32,887,011 171,323 Prosecuting Attorney 7,974,756 7,944,756 7,943,370 1,386 Medical Examiner 1,515,771 1,444,971 1,436,627 8,344 Juvenile Services 10,804,789 11,406,839 11,389,321 17,518 Corrections 22,711,037 24,256,630 24,256,304 326 Total Public Safety 76,199,076 79,168,253 78,960,892 207,361

Physical Environment Sheriff 295,421 305,736 305,736 - Total Physical Environment 295,421 305,736 305,736 -

Transportation Facilities Management 341,236 361,236 395,859 (34,623) Total Transportation 341,236 361,236 395,859 (34,623)

Health and Human Services Human Services 852,085 845,085 842,824 2,261 Nondepartmental 3,354,995 3,354,995 3,354,995 - Office of Public Defense 3,778,565 4,020,491 4,020,491 - Corrections - - (450) 450 Total Health and Human Services 7,985,645 8,220,571 8,217,860 2,711

Economic Environment BRB BOE 78,408 78,408 74,995 3,413 Planning 3,576,463 3,637,683 3,609,424 28,259 Hearing Examiner 363,589 374,809 370,223 4,586 Total Economic Environment 4,018,460 4,090,900 4,054,642 36,258

Culture and Recreation Parks and Recreation 7,791,214 7,871,214 7,594,075 277,139 Total Culture and Recreation 7,791,214 7,871,214 7,594,075 277,139 Amount Charged to Appropriations (out-flows) 160,561,029 160,991,884 159,206,966 1,784,918

Budgetary Fund Balance, Dec. 31 $ 17,269,374 $ 16,938,519 $ 22,178,760 $ 5,240,241

The accompanying notes are an integral part of the financial statements. 75 Budgetary Comparison Schedule County Roads For the Year Ended December 31, 2002

Budgeted Amounts

Original Final Actual Variance

Budgetary Fund Balance, January 1 $ 39,887,796 $ 39,887,796 $ 40,249,540 $ 361,744

Resources (In-flows) Property Taxes 37,217,087 37,217,087 38,706,276 1,489,189 Other Taxes 90,300 90,300 163,765 73,465 Intergovernmental Revenue 37,899,000 37,995,784 32,873,857 (5,121,927) Charges for Services 4,635,144 4,635,144 3,783,618 (851,526) Interest and Investment Earnings 1,300,000 1,300,000 687,692 (612,308) Rents, Leases and Concessions - - 1,572 1,572 Miscellaneous Revenues 235,000 235,000 313,080 78,080 Operating/Capital Transfers in 8,562,000 8,562,000 9,862,580 1,300,580 Debt Proceeds 80,000 80,000 - (80,000) Disposition of Capital Assets 55,000 55,000 - (55,000) Total Resources (In-flows) 90,073,531 90,170,315 86,392,440 (3,777,875)

Amount Available for Appropriation 129,961,327 130,058,111 126,641,980 (3,416,131)

Charges to Appropriations (Out-flows) General Government Public Works 13,240,086 13,590,086 12,996,698 593,388 Total General Government 13,240,086 13,590,086 12,996,698 593,388

Transportation Public Works 83,213,297 82,960,081 70,352,285 12,607,796 Total Transportation 83,213,297 82,960,081 70,352,285 12,607,796

Debt Service Public Works 74,500 74,500 74,501 (1) Total Debt Service 74,500 74,500 74,501 (1) Amount Charged to Appropriations (out-flows) 96,527,883 96,624,667 83,423,484 13,201,183

Total Fund Balances $ 33,433,444 $ 33,433,444 $ 43,218,496 $ 9,785,052

The accompanying notes are an integral part of the financial statements. 76 Budgetary Comparison Schedule Human Services Fund For the Year Ended December 31, 2002

Budgeted Amounts

Original Final Actual Variance

Budgetary Fund Balance, January 1 $ 1,306,150 $ 1,306,150 $ 1,335,310 $ 29,160

Resources (In-flows) Property Taxes 874,499 874,499 1,008,938 134,439 Other Taxes 5,613 5,613 6,672 1,059 Intergovernmental Revenue 34,505,013 34,929,058 35,242,447 313,389 Charges for Services 8,377,403 8,197,530 154,484 (8,043,046) Fines and Forfeitures 54,816 54,816 60,395 5,579 Interest and Investment Earnings 3,589 3,589 1,790 (1,799) Contributions & Donations-Private Sources 4,500 15,600 20,801 5,201 Miscellaneous Revenues 957,500 658,070 11,232 (646,838) Other Financing Sources 2,019,115 2,019,115 2,042,600 23,485 Total Resources (In-flows) 46,802,048 46,757,890 38,549,359 (8,208,531)

Amount Available for Appropriation 48,108,198 48,064,040 39,884,669 (8,179,371)

Charges to Appropriations (Out-flows)

General Government Human Services - - 3,682 (3,682) Total General Government - - 3,682 (3,682)

Public Safety Human Services 102,388 119,388 108,175 11,213 Total Public Safety 102,388 119,388 108,175 11,213

Health and Human Services Human Services 14,613,288 14,930,471 13,503,488 1,426,983 Pass Thru Grants 32,522,980 32,318,107 24,955,738 7,362,369 Total Health and Human Services 47,136,268 47,248,578 38,459,226 8,789,352 Amount Charged to Appropriations (out-flows) 47,238,656 47,367,966 38,571,083 8,796,883

Budgetary Fund Balance, December 31, $ 869,542 $ 696,074 $ 1,313,585 $ 617,511

The accompanying notes are an integral part of the financial statements. 77 Combining Financial Summary Other Governmental Funds As of December 31, 2002

Assets Liabilities Net Assets Revenues Expenditures

Special Revenue Funds: Antiprofiteering Revolving $ 94,623 $ - $ 94,623 $ 1,726 $ 3 Arson Investigation & Equip 4,075 - 4,075 1,954 515 Auditor's O & M 523,330 2,530 520,800 383,090 289,155 Boating Safety 206,630 90,325 116,304 189,139 79,638 Community Development 8,467,337 36,734 8,430,604 15,182,521 13,881,933 Conservation Futures Tax Fund 10,029,824 152,349 9,877,475 2,910,865 2,806,726 Convention & Performing Arts 3,772,662 79,896 3,692,766 1,448,013 989,500 Corrections Commissary 215,369 67,636 147,734 532,371 558,706 Crime Victims/Witness 566,642 - 566,642 371,560 270,760 Elections Equip Cumulative Res 639,305 - 639,305 4,760,774 4,701,779 Emerg Svcs Communication Sys 850,361 8,197 842,163 2,929,420 2,880,394 Evergreen Fairground Cum Reser 831,484 - 831,484 604,242 727,384 Extradition Srvcs - Pend Ord 9,833 - 9,833 - - Fair Sponsorships & Donations 50,643 800 49,843 385,117 380,012 Grant Control 2,471,065 211,705 2,259,361 8,758,008 8,179,894 Housing Trust Fund 746,905 - 746,905 514,656 122,984 Parks Mitigation 2,862,875 - 2,862,875 1,841,096 3,051,784 Public Wrks Facility Construct 1,100,020 33,659 1,066,361 126,989 60,553 Real Estate Excise Tax Fund 6,258,176 8,832 6,249,344 10,547,713 11,343,587 Revenue Stabilization Fund - - - - 869,904 River Management 1,200,805 73,843 1,126,963 1,246,823 752,547 Sheriff Drug Buy Fund 686,892 313,778 373,114 559,850 510,550 Sheriff-Search & Resc Helicopt 307,152 - 307,152 313,355 23,000 Snoh County Tomorrow Cum Res 26,171 393 25,778 94,520 87,975 Special Revenue Funds 673,315 8,320 664,995 21,178 44,983 Tax Refund Fund 320,039 5,358 314,680 1,361 - Transportation Mitigation 15,867,114 75,769 15,791,345 5,487,284 6,927,967 Treasurer's O & M 258,649 62,685 195,964 125,198 69,722 Us Department Of Hud Grants 5,336,449 1,603,889 3,732,559 7,377,833 6,982,883

Total Special Revenue Funds 64,377,745 2,836,699 61,541,046 66,716,657 66,594,838

Debt Service Fund Rid 13 Long Term Debt 73,962 34,224 39,738 39,043 60 Rid 11A Assessment 16,273 9,026 7,247 7,146 - Limited Tax Debt Service 24,915,917 201,153 24,714,764 17,899,315 18,840,717 Road Improvement Dist. 24A 2,799,602 2,522,477 277,125 379,188 743,097 Road Improvement Dist. 30 58,674 49,842 8,832 8,367 -

Total Debt Service Funds 27,864,429 2,816,723 25,047,706 18,333,060 19,583,874

Capital Project Funds: Parks Construction Fund 23,506,870 85,316 23,421,554 7,934,137 9,933,042 Facility Construction 4,905,601 164,677 4,740,924 302,117 1,171,244 Elevator Construction 4,217 - 4,217 - 380 Data Processing Capital 5,310,708 51,600 5,259,107 2,639,571 1,306,842 Facilities Improvements 351,967 - 351,967 202,922 220,479 95 Construction Projects 1,969,718 - 1,969,718 42,948 621,000

Total Capital Project Funds 36,049,081 301,593 35,747,488 11,121,694 13,252,986

Total Governmental Funds $ 128,291,254 $ 5,955,015 $ 122,336,240 $ 96,171,411 $ 99,431,699

The accompanying notes are an integral part of the financial statements. 78 Other Governmental Funds Special Revenue Funds

Anti-profiteering Revolving

Ordinance 90-173 created the anti-profiteering revolving fund, which is administered by the prosecuting attorney under the conditions and for the purposes provided in RCW 9A.82.110(4). Property forfeited to the County under this law is used by the prosecuting attorney for the investigation and prosecution of any offense, within the jurisdiction of the prosecuting attorney, included in the definition of criminal profiteering set forth in the RCW, chapter 9A.82.

Arson Education and Equipment

This fund was established in 1984 with County Ordinance 84-009. Funding is from grants, fines and penalties, and fees charged to an insurance company for copies of arson investigation reports. The fund shall be used only for the education and training of arson investigators employed by any fire district within Snohomish county, pursuant to the interlocal agreements between County and the districts, and in accordance with criteria to be established by the county fire marshal, or for the purchase of equipment necessary to carry out assigned arson investigation.

Auditor’s Operation and Maintenance

RCW 36.22.170 established this fund to deposit fifty percent of the revenue generated through the surcharge of recording documents for ongoing preservation of historical documents of all county offices and departments.

Boating Safety

The purpose of the boating safety fund is to provide for boating safety, education, and law enforcement programs in Snohomish County. This fund was established in 1190 with County Ordinance 90-213, which is administered by the sheriff's department. Resources of the boating safety fund shall be from distribution by the state of vessel registration fees under RCW 88.02.040.

Community Development

According to Ordinance 91-017, the purpose of the community development fund is to provide for administration and enforcement of Snohomish county land-use policies by the department of planning and development services. Resources of the community development fund shall consist of revenues generated from activities of the department of planning and development services including but not limited to fees and charges.

Conservation Futures Tax Fund

Ordinance #88-097 created the Conservation Futures Tax Fund in the Parks and Recreation Department. A property tax levy as authorized by RCW 84.34.230 provides the revenue. The purpose of the fund is to acquire interests or rights in real property for the preservation of open space land, farm and agricultural land and timberland.

79 Other Governmental Funds Special Revenue Funds

Convention & Performing Arts

Revenue from this fund comes from two 2% lodging taxes. The taxes are used for the cost of acquisition, construction, installation, addition, improvement, replacement, repair, maintenance, or operation of convention-center facilities, stadium facilities, performing arts center facilities and/or visual arts center facilities or to pay or secure the payment of all or any portion of general obligation bonds or revenue bonds, if any, issued for such purpose or purposes, or to pay for advertising, publicizing, or otherwise distributing information for the purpose of attracting visitors and encouraging tourist expansion The fund shall be used to support projects or purposes authorized under chapter 67.28 RCW.

Corrections Commissary

The purpose of the commissary fund in the department of corrections is to provide for the purchase of personal supply and comfort items for resale to inmates in county correctional facilities. The fund was created with Ordinance 87-107.

Crime Victims/Witness

Ordinance 82-100 created SCC4.54, which states that the county share of all fines collected under RCW 7.68.035(1), (3), 9.92.060, and 9.95.210, is used for comprehensive programs as provided by RCW 7.68.035(4), to provide services to victims and witnesses of crime. The Prosecuting Attorney administers this fund.

Elections Equipment Cumulative Reserve

The elections equipment cumulative reserve fund is established to accumulate monies collected by the county auditor's office for conducting elections, maintaining voter registration files and producing a local voters' pamphlet. These monies represent a portion of the billings that is intended to recapture the cost of equipment and software purchased and used in conducting elections, maintaining voter registration files and producing a local voters' pamphlet by the county auditor. The money in this fund will be used to purchase equipment, hardware, durable supplies and software used by the county auditor's office for elections, voter registration and local voters' pamphlet operations. The fund was established by Ordinance 89-140 and is administered by the County Auditor.

Emergency Services Communication System

Ordinance 87-005 created this fund in 1987. Pursuant to RCW 82.14B.030(1), there was imposed an excise tax in the amount of $0.50 per month for each switched access line. Pursuant to RCW 82.14B.030(2), there was imposed an excise tax in the amount of $0.50 per month for each radio access line whose place of primary use is located within Snohomish county. All taxes are be placed in said fund for the purposes of paying all or any part of the cost of all expenses related to the acquisition, installation, addition, improvement, replacement, repair, maintenance or operation of an emergency services communication system.

80 Other Governmental Funds Special Revenue Funds

Evergreen Fairground Cumulative Reserve

Ordinance #93-046 created this fund in the parks and recreation department. Surplus fairgrounds operating revenues are transferred to this fund yearly and expended on capital improvements or acquisitions located or used on the Evergreen State Fairgrounds.

Extradition Services

Ordinance 94-017 created this fund in the sheriff's department to account for the costs of transporting people into the County for legal proceedings. A portion of the fees from this fund supports operations.

Fair Sponsorships & Donations

This fund was established in 1991 with Ordinance 91-103. The purpose of the fund is to accumulate monies received by the county from sponsorships and donations relating to the annual Evergreen State Fair. Uses include, but are not limited to, advertising, promotion, entertainment during the fair, and fairgrounds improvements or acquisitions.

Grant Control

This fund accounts for the revenues and expenditures of many programs funded by state and federal grants.

Affordable Housing Trust Fund

Ordinance 89-125 created the Housing Trust Fund. The purpose of the housing trust fund is to: (1) Provide matching funds, loans, or outright grants to county departments, municipalities, housing authorities, agencies or organizations for the construction, purchase, rehabilitation, or support of low- rent public housing, low-income housing, emergency housing, transitional housing, or housing for the elderly or handicapped for the benefit of the citizens of Snohomish county; and (2) To establish a fund into which county funds, donations, grants, or other resources designated for the above- mentioned purpose can be deposited and from which allocation can be made.

As required by Laws of 2002, chapter 294, the Affordable Housing Trust Fund was adopted by ordinance 02-065 effective January 1, 2003 to provide additional funding resources for building operation and maintenance activities for housing projects affordable to very low-income people, as well as to assist in development and preservation of affordable low-income housing. The state of Washington, in its Low Income Housing Projects act of 2002 (Laws of 2002, chapter 294) has directed the county auditor to collect a surcharge of $10.00 on all instruments, except assignments or substitutions of previously recorded deeds of trust, recorded with the county auditor. Five percent of the funds collected shall be applied to the county auditor's Operations and Maintenance Fund to administer the collection of these funds. In accordance with the Laws of 2002, chapter 294, forty percent of the remaining funds shall be transmitted to the state treasurer. The remaining sixty percent of the revenue generated by this surcharge will be placed into the Affordable Housing Trust Fund created by this chapter.

81 Other Governmental Funds Special Revenue Funds

Parks Mitigation

The purpose of the parks mitigation fund is to provide for the development of parks and recreation facilities required to mitigate the impact of residential growth. Ordinance 91-085 created the fund in the parks and recreation department. Resources of the parks mitigation fund shall be from developer contributions authorized by SCC30.66A.

Public Works Facility Construction

This fund was created by Ordinance 89-143 to provide for the design and construction of a new centralized office and parking facility to accommodate the employees of the department of public works.

Real Estate Excise Tax Fund

This fund accounts for the proceeds of a real estate excise tax authorized by the 1982 State Legislature to be used only for growth related capital improvements according to SCC4.12.005.

Revenue Stabilization Fund

The purpose of the revenue stabilization fund is to reserve and accumulate monies in order to mitigate the impact of projected general fund revenue shortfalls in excess of three percent of the current year's budget or the impact of projected expenditures in excess of three percent of the current year's budget caused by the need to fund unanticipated expenses. Ordinance 93-147 created this fund.

River Management

This fund accounts for the maintenance of waterways and storm drainage control areas, and for emergency flood control. A tax levy authorized by RCW 86.12.010, and some grant funding from the state and federal government, finances operations. Public works department administers this fund.

Sheriff Drug Buy Fund

RCW 69.50.505, 63.40, 9.41, 9A82-83, and 83.10.105 authorize this fund to account for the investigation of illegal narcotics. Revenue comes from fines and forfeits paid by those convicted of drug related offenses.

Sheriff Search & Rescue Helicopter

Ordinance 84-034 established this fund to account for the donations made by private parties to fund the operation and maintenance of the Sheriff's helicopter.

82 Other Governmental Funds Special Revenue Funds

Snohomish County Tomorrow Cumulative Reserve

Ordinance 90-082 created this fund. Revenues come from county funds and donations from other public agencies and private parties, and are expended for professional services and operating expenses for the Snohomish county tomorrow planning project as initiated by the Snohomish county council pursuant to Motion No. 89-159, adopted June 16, 1989.

Special Revenue Funds

This consists of the Animal Benefit Bequest fund (SCC4.95), the Blanche Miller Juvenile Court fund (SCC4.96), and the Parks Donation fund (SCC4.97), to receive and expend money from these small bequests or donations.

Tax Refund Fund

This fund is administered by the Treasurer to account for tax refunds as authorized by RCW 84.68.030.

Transportation Mitigation

The purpose of the transportation mitigation fund is to provide for the acquisition, construction, improvement, and administration of roads and transportation facilities necessitated by new development in Snohomish County. Resources of the mitigation fund shall be from lawful transportation mitigation payments, administrative fees applicable to transportation mitigation payments, appropriations, gifts, bequests, bond proceeds, or other financing sources. Ordinance 91- 007 established this fund.

Treasurer’s Operation & Maintenance

RCW 84.56.020(8) requires that fees and costs applicable to the foreclosure, distraint, and sale of real and personal property for delinquent taxes must be deposited into this fund. The resources are used to defray the cost of further foreclosure, distraint, and sale for delinquent taxes.

US Department of HUD Grants

This fund in the Department of Planning and Development Services accounts for all grant agreements and revolving fund loans with the federal Department of Housing and Community Development.

83 Balance Sheet Other Governmental (Special Revenue) Funds As of December 31, 2002

Anti-profiteering Arson Auditor's Boating Community Conservation Revolving Investigation Operation Safety Development Futures Tax Equipment Maintenance

ASSETS Current Assets Cash $ 4,516 $ 4,075 $ 81,806 $ 8,295 $ 34,442 $ 63,725 Investments 90,000 - 441,000 198,000 8,019,257 9,801,935 Taxes Receivable - - - - - 151,954 Other Receivable, Net - - - - 119,883 - Interest Receivables 107 - 524 335 237,456 12,210 Due from other Governments - - - - 56,299 - Total Current Assets 94,623 4,075 523,330 206,630 8,467,337 10,029,824

Restricted Assets Cash ------Total Restricted Assets ------

Non-Current Assets Notes/Contract Receivables ------Total Non-Current Assets ------

Total Assets 94,623 4,075 523,330 206,630 8,467,337 10,029,824

LIABILITIES Current Liabilities Accounts Payable - - 168 - 36,697 396 Due to other Governments ------Accrued Liabilities - - 2,362 - 37 - Deferred Revenue - - - 90,325 - 151,954 Custodial Accounts ------Total Current Liabilities - - 2,530 90,325 36,734 152,349

Total Liabilities - - 2,530 90,325 36,734 152,349

FUND BALANCES Reserved/Restricted Reserves for Debt Service ------Total Reserved/Restricted ------

Unreserved/Unrestricted Equity Special Revenue Fund 94,623 4,075 520,800 116,304 8,430,604 9,877,475 Total Unreserved/Unrestricted Equity 94,623 4,075 520,800 116,304 8,430,604 9,877,475

Total Fund Balances 94,623 4,075 520,800 116,304 8,430,604 9,877,475

Total Liabilities & Fund Balances $ 94,623 $ 4,075 $ 523,330 $ 206,630 $ 8,467,337 $ 10,029,824

The accompanying notes are an integral part of the financial statements. 84 Balance Sheet Other Governmental (Special Revenue) Funds As of December 31, 2002

Convention and Corrections Crime Victims Elections Equipment Performing Arts Commissary Witness Cumulative Reserve

ASSETS Current Assets Cash $ 229,409 $ 135,374 $ 73,557 $ 31,080 Investments 3,400,465 80,000 492,500 592,944 Taxes Receivable - - - - Other Receivable, Net - (100) - 14,577 Interest Receivables 4,171 95 585 705 Due from other Governments 138,616 - - - Total Current Assets 3,772,662 215,369 566,642 639,305

Restricted Assets Cash - - - - Total Restricted Assets - - - -

Non-Current Assets Notes/Contract Receivables - - - - Total Non-Current Assets - - - -

Total Assets 3,772,662 215,369 566,642 639,305

LIABILITIES Current Liabilities Accounts Payable 79,896 19,498 - - Due to other Governments - - - - Accrued Liabilities - 219 - - Deferred Revenue - - - - Custodial Accounts - 47,919 - - Total Current Liabilities 79,896 67,636 - -

Total Liabilities 79,896 67,636 - -

FUND BALANCES Reserved/Restricted Reserves for Debt Service - - - - Total Reserved/Restricted - - - -

Unreserved/Unrestricted Equity Special Revenue Fund 3,692,766 147,734 566,642 639,305 Total Unreserved/Unrestricted Equity 3,692,766 147,734 566,642 639,305

Total Fund Balances 3,692,766 147,734 566,642 639,305

Total Liabilities & Fund Balances $ 3,772,662 $ 215,369 $ 566,642 $ 639,305

The accompanying notes are an integral part of the financial statements. 85 Balance Sheet Other Governmental (Special Revenue) Funds As of December 31, 2002

Emergency Services Evergreen Fairground Extradition Fair Grant Communication System Cumulative Reserve Services Sponsorships Control Donations

ASSETS Current Assets Cash $ 20,348 $ 20,961 $ 9,833 $ 14,901 $ 945,309 Investments 824,882 807,000 - 35,700 - Taxes Receivable - - - - - Other Receivable, Net 1,009 2,560 - - 782,796 Interest Receivables 1,009 963 - 42 - Due from other Governments 3,113 - - - 742,960 Total Current Assets 850,361 831,484 9,833 50,643 2,471,065

Restricted Assets Cash - - - - - Total Restricted Assets - - - - -

Non-Current Assets Notes/Contract Receivables - - - - - Total Non-Current Assets - - - - -

Total Assets 850,361 831,484 9,833 50,643 2,471,065

LIABILITIES Current Liabilities Accounts Payable 8,197 - - 800 169,861 Due to other Governments - - - - (9,082) Accrued Liabilities - - - - 19 Deferred Revenue - - - - 50,907 Custodial Accounts - - - - - Total Current Liabilities 8,197 - - 800 211,705

Total Liabilities 8,197 - - 800 211,705

FUND BALANCES Reserved/Restricted Reserves for Debt Service - - - - - Total Reserved/Restricted - - - - -

Unreserved/Unrestricted Equity Special Revenue Fund 842,163 831,484 9,833 49,843 2,259,361 Total Unreserved/Unrestricted Equity 842,163 831,484 9,833 49,843 2,259,361

Total Fund Balances 842,163 831,484 9,833 49,843 2,259,361

Total Liabilities & Fund Balances $ 850,361 $ 831,484 $ 9,833 $ 50,643 $ 2,471,065

The accompanying notes are an integral part of the financial statements. 86 Balance Sheet Other Governmental (Special Revenue) Funds As of December 31, 2002

Housing Parks Public Works Real Estate Revenue River Trust Mitigation Facility Construction Excise Tax Stabilization Management

ASSETS Current Assets Cash $ 66,628 $ 1,322,503 $ 133,590 $ 6,249,344 $ - $ 633,127 Investments 450,000 1,538,498 965,273 - - 539,000 Taxes Receivable - - - - - 16,127 Other Receivable, Net 229,800 - - 8,832 - 8,074 Interest Receivables 477 1,874 1,157 - - 640 Due from other Governments - - - - - 3,837 Total Current Assets 746,905 2,862,875 1,100,020 6,258,176 - 1,200,805

Restricted Assets Cash ------Total Restricted Assets ------

Non-Current Assets Notes/Contract Receivables ------Total Non-Current Assets ------

Total Assets 746,905 2,862,875 1,100,020 6,258,176 - 1,200,805

LIABILITIES Current Liabilities Accounts Payable - - 33,659 - - 57,701 Due to other Governments ------Accrued Liabilities - - - - - 15 Deferred Revenue - - - 8,832 - 16,127 Custodial Accounts ------Total Current Liabilities - - 33,659 8,832 - 73,843

Total Liabilities - - 33,659 8,832 - 73,843

FUND BALANCES Reserved/Restricted Reserves for Debt Service - - - 508,000 - - Total Reserved/Restricted - - - 508,000 - -

Unreserved/Unrestricted Equity Special Revenue Fund 746,905 2,862,875 1,066,361 5,741,344 - 1,126,963 Total Unreserved/Unrestricted Equity 746,905 2,862,875 1,066,361 5,741,344 - 1,126,963

Total Fund Balances 746,905 2,862,875 1,066,361 6,249,344 - 1,126,963

Total Liabilities & Fund Balances $ 746,905 $ 2,862,875 $ 1,100,020 $ 6,258,176 $ - $ 1,200,805

The accompanying notes are an integral part of the financial statements. 87 Balance Sheet Other Governmental (Special Revenue) Funds As of December 31, 2002

Sheriff Sheriff Snohomish County Special Tax Drug Buy Search & Rescue Tomorrow Revenue Refund Cumulative Reserve

ASSETS Current Assets Cash $ 355,335 $ 307,152 $ 26,171 $ 3,771 $ 314,680 Investments 316,000 - - 668,700 - Taxes Receivable - - - - 5,358 Other Receivable, Net 13,729 - - - - Interest Receivables 678 - - 844 - Due from other Governments - - - - - Total Current Assets 685,742 307,152 26,171 673,315 320,039

Restricted Assets Cash 1,150 - - - - Total Restricted Assets 1,150 - - - -

Non-Current Assets Notes/Contract Receivables - - - - - Total Non-Current Assets - - - - -

Total Assets 686,892 307,152 26,171 673,315 320,039

LIABILITIES Current Liabilities Accounts Payable 10,798 - 393 8,320 - Due to other Governments 224,219 - - - - Accrued Liabilities 78,761 - - - - Deferred Revenue - - - - 5,358 Custodial Accounts - - - - - Total Current Liabilities 313,778 - 393 8,320 5,358

Total Liabilities 313,778 - 393 8,320 5,358

FUND BALANCES Reserved/Restricted Reserves for Debt Service - - - - - Total Reserved/Restricted - - - - -

Unreserved/Unrestricted Equity Special Revenue Fund 373,114 307,152 25,778 664,995 314,680 Total Unreserved/Unrestricted Equity 373,114 307,152 25,778 664,995 314,680

Total Fund Balances 373,114 307,152 25,778 664,995 314,680

Total Liabilities & Fund Balances $ 686,892 $ 307,152 $ 26,171 $ 673,315 $ 320,039

The accompanying notes are an integral part of the financial statements. 88 Balance Sheet Other Governmental (Special Revenue) Funds As of December 31, 2002

Transportation Treasurer's US Department Total Mitigation Operation HUD Grant Special Revenue Maintenance

ASSETS Current Assets Cash $ (3,455,324) $ 24,379 $ (84,022) $ 7,574,965 Investments 19,296,922 171,681 - 48,729,758 Taxes Receivable - - - 173,439 Other Receivable, Net - 62,589 - 1,243,749 Interest Receivables 24,003 - 838 288,715 Due from other Governments 1,512 - 262,371 1,208,707 Total Current Assets 15,867,114 258,649 179,188 59,219,334

Restricted Assets Cash - - - 1,150 Total Restricted Assets - - - 1,150

Non-Current Assets Notes/Contract Receivables - - 5,157,261 5,157,261 Total Non-Current Assets - - 5,157,261 5,157,261

Total Assets 15,867,114 258,649 5,336,449 64,377,745

LIABILITIES Current Liabilities Accounts Payable - - 95,254 521,638 Due to other Governments 75,769 95 69,053 360,054 Accrued Liabilities - - - 81,413 Deferred Revenue - 62,589 1,439,582 1,825,675 Custodial Accounts - - - 47,919 Total Current Liabilities 75,769 62,685 1,603,889 2,836,698

Total Liabilities 75,769 62,685 1,603,889 2,836,698

FUND BALANCES Reserved/Restricted Reserves for Debt Service - - - 508,000 Total Reserved/Restricted - - - 508,000

Unreserved/Unrestricted Equity Special Revenue Fund 15,791,345 195,964 3,732,559 61,033,046 Total Unreserved/Unrestricted Equity 15,791,345 195,964 3,732,559 61,033,046

Total Fund Balances 15,791,345 195,964 3,732,559 61,541,046

Total Liabilities & Fund Balances $ 15,867,114 $ 258,649 $ 5,336,449 $ 64,377,745

The accompanying notes are an integral part of the financial statements. 89 Statement of Revenues, Expenditures and Changes in Fund Balance Other Governmental (Special Revenue) Funds For the Year Ended December 31, 2002

Anti-profiteering Arson Auditor's Boating Safety Revolving Fund Investigation & Operation & Fund Equipment Fund Maintenance Fund Detail Revenues Property Taxes $ - $ - $ - $ - Sales/Use Taxes - - - - Other Taxes - - - - Intergovernmental Revenues - - 145,783 183,643 Charges for Services - 1,954 228,943 - Fines & Forfeitures - - - - Interest & Investment Earnings 1,723 - 8,363 5,496 Rents, Leases & Concessions - - - - Contributions & Donations from Private Sources - - - - Miscellaneous Revenues - - - - Total Detail Revenues 1,723 1,954 383,089 189,139

Detail Expenditures Current General Government 3 - 206,741 - Public Safety - 515 - 79,638 Physical Environment - - - - Transportation - - - - Economic Environment - - - - Culture & Recreation - - - - Total Detail Expenditures 3 515 206,741 79,638

Other Financial Sources (Uses)

Operating/Capital Transfers-in 3 - - - Operating/Capital Transfers-out - - (82,413) - Debt Proceeds - - - Disposition of Capital Assets - - - Total Other Financial Sources (Uses) 3 - (82,413) -

Net Change in Fund Equity 1,723 1,439 93,935 109,501

Fund Balances - Beginning 92,900 2,636 426,866 6,803 Prior Period Adjustments - - - - Fund Balances - Ending $ 94,623 $ 4,075 $ 520,800 $ 116,304

The accompanying notes are an integral part of the financial statements. 90 Statement of Revenues, Expenditures and Changes in Fund Balance Other Governmental (Special Revenue) Funds For the Year Ended December 31, 2002

Community Conservation Convention Corrections Development Futures Tax and Commissary Fund Fund Performing Fund Arts Fund Detail Revenues Property Taxes $ - $ 2,651,616 $ - $ - Sales/Use Taxes - - 1,391,196 - Other Taxes - 17,528 - - Intergovernmental Revenues - 35,361 - - Charges for Services 13,219,851 - - 532,243 Fines & Forfeitures - - - - Interest & Investment Earnings 524,096 180,045 56,816 1,531 Rents, Leases & Concessions - - - - Contributions & Donations from Private Sources - - - - Miscellaneous Revenues 110,539 26,316 - (1,403) Total Detail Revenues 13,854,486 2,910,865 1,448,012 532,371

Detail Expenditures Current General Government 3,358 - - - Public Safety 13,434,609 - - 558,706 Physical Environment - 799,526 - - Transportation - - - - Economic Environment - - 742,036 - Culture & Recreation - - - - Total Detail Expenditures 13,437,967 799,526 742,036 558,706

Other Financial Sources (Uses)

Operating/Capital Transfers-in 1,328,036 - - - Operating/Capital Transfers-out (443,966) (2,007,200) (247,464) - Debt Proceeds - - - - Disposition of Capital Assets - - - - Total Other Financial Sources (Uses) 884,070 (2,007,200) (247,464) -

Net Change in Fund Equity 1,300,588 104,139 458,512 (26,335)

Fund Balances - Beginning 7,122,746 9,753,687 3,234,253 174,068 Prior Period Adjustments 7,269 19,649 - - Fund Balances - Ending $ 8,430,604 $ 9,877,475 $ 3,692,765 $ 147,734

The accompanying notes are an integral part of the financial statements. 91 Statement of Revenues, Expenditures and Changes in Fund Balance Other Governmental (Special Revenue) Funds For the Year Ended December 31, 2002

Crime Victims Elections Emergency Evergreen /Witness Fund Equipment Services Fairground Cumulative Communicatio Cumulative Reserve Fund n System Fund Reserve Fund

Detail Revenues Property Taxes $ - $ - $ - $ - Sales/Use Taxes - - - - Other Taxes - - 2,890,449 - Intergovernmental Revenues 8,292 - - - Charges for Services 323,622 212,383 - - Fines & Forfeitures 1,822 - - - Interest & Investment Earnings - 10,071 9,036 24,957 Rents, Leases & Concessions - - - 78,995 Contributions & Donations from Private Sources - - - - Miscellaneous Revenues - - 29,935 6,500 Total Detail Revenues 333,736 222,454 2,929,420 110,451

Detail Expenditures Current General Government 270,760 4,616,136 - - Public Safety - - 2,880,394 - Physical Environment - - - - Transportation - - - - Economic Environment - - - - Culture & Recreation - - - 727,384 Total Detail Expenditures 270,760 4,616,136 2,880,394 727,384

Other Financial Sources (Uses)

Operating/Capital Transfers-in 37,824 - - 493,791 Operating/Capital Transfers-out - (85,642) - - Debt Proceeds - 4,538,319 - - Disposition of Capital Assets - - - Total Other Financial Sources (Uses) 37,824 4,452,677 - 493,791

Net Change in Fund Equity 100,801 58,995 49,026 (123,141)

Fund Balances - Beginning 465,841 580,310 793,137 954,625 Prior Period Adjustments - - - - Fund Balances - Ending $ 566,642 $ 639,305 $ 842,163 $ 831,484

The accompanying notes are an integral part of the financial statements. 92 Statement of Revenues, Expenditures and Changes in Fund Balance Other Governmental (Special Revenue) Funds For the Year Ended December 31, 2002

Extradition Fair Grant Control Housing Trust Services Fund Sponsorships & Fund Fund Donations Fund Detail Revenues Property Taxes $ - $ - $ - $ - Sales/Use Taxes - - - - Other Taxes - - - - Intergovernmental Revenues - - 7,291,818 - Charges for Services - - 77,758 513,119 Fines & Forfeitures - - - - Interest & Investment Earnings - 1,071 - 1,537 Rents, Leases & Concessions - - - - Contributions & Donations from Private Sources - 343,100 - - Miscellaneous Revenues - 40,946 286,628 - Total Detail Revenues - 385,117 7,656,204 514,656

Detail Expenditures Current General Government - - 2,626,951 - Public Safety - - 4,263,692 - Physical Environment - - - - Transportation - - 103,422 - Economic Environment - - 1,182,929 122,983 Culture & Recreation - 380,012 2,900 - Total Detail Expenditures - 380,012 8,179,894 122,983

Other Financial Sources (Uses)

Operating/Capital Transfers-in - - 1,101,805 - Operating/Capital Transfers-out - - - - Debt Proceeds - - - - Disposition of Capital Assets - - - - Total Other Financial Sources (Uses) - - 1,101,805 -

Net Change in Fund Equity - 5,105 578,114 391,673

Fund Balances - Beginning 9,833 44,738 981,246 355,233 Prior Period Adjustments - - 700,000 - Fund Balances - Ending $ 9,833 $ 49,843 $ 2,259,361 $ 746,905

The accompanying notes are an integral part of the financial statements. 93 Statement of Revenues, Expenditures and Changes in Fund Balance Other Governmental (Special Revenue) Funds For the Year Ended December 31, 2002

Parks Mitigation Public Works Real Estate Revenue Fund Facility Excise Tax Stabilization Construction Fund Fund Fund Detail Revenues Property Taxes $ - $ - $ 10,547,713 $ - Sales/Use Taxes - - - - Other Taxes - - - - Intergovernmental Revenues - - - - Charges for Services 1,794,287 - - - Fines & Forfeitures - - - - Interest & Investment Earnings 46,809 3,485 - - Rents, Leases & Concessions - - - - Contributions & Donations from Private Sources - - - - Miscellaneous Revenues - - - - Total Detail Revenues 1,841,096 3,485 10,547,713 -

Detail Expenditures Current General Government - - - - Public Safety - - - - Physical Environment - - - - Transportation - 60,553 - - Economic Environment - - - - Culture & Recreation 20,416 - - - Total Detail Expenditures 20,416 60,553 - -

Other Financial Sources (Uses)

Operating/Capital Transfers-in - - - - Operating/Capital Transfers-out (3,031,368) - (11,343,587) (869,904) Debt Proceeds - - - Disposition of Capital Assets - 123,504 - - Total Other Financial Sources (Uses) (3,031,368) 123,504 (11,343,587) (869,904)

Net Change in Fund Equity (1,210,688) 66,436 (795,874) (869,904)

Fund Balances - Beginning 4,073,563 999,925 7,045,217 869,904 Prior Period Adjustments - - - - Fund Balances - Ending $ 2,862,875 $ 1,066,361 $ 6,249,344 $ 0

The accompanying notes are an integral part of the financial statements. 94 Statement of Revenues, Expenditures and Changes in Fund Balance Other Governmental (Special Revenue) Funds For the Year Ended December 31, 2002

River Sheriff Drug Buy Sheriff Search Snohomish Management Fund & Rescue Fund County Fund Tomorrow Cumulative Reserve Fund

Detail Revenues Property Taxes $ 279,120 $ - $ - $ - Sales/Use Taxes - - - - Other Taxes 1,844 - - - Intergovernmental Revenues 4,616 232,825 - 57,017 Charges for Services 54,400 31,936 - - Fines & Forfeitures - 119,101 - - Interest & Investment Earnings 9,060 10,603 - - Rents, Leases & Concessions - - - - Contributions & Donations from Private Sources - - - - Miscellaneous Revenues 69,575 165,384 - 112 Total Detail Revenues 418,615 559,850 - 57,129

Detail Expenditures Current General Government - - - - Public Safety - 412,935 23,000 - Physical Environment 752,547 - - - Transportation - - - - Economic Environment - - - 87,975 Culture & Recreation - - - - Total Detail Expenditures 752,547 412,935 23,000 87,975

Other Financial Sources (Uses)

Operating/Capital Transfers-in 828,208 - 313,355 37,391 Operating/Capital Transfers-out - (97,615) - - Debt Proceeds - - - - Disposition of Capital Assets - - - - Total Other Financial Sources (Uses) 828,208 (97,615) 313,355 37,391

Net Change in Fund Equity 494,276 49,299 290,355 6,545

Fund Balances - Beginning 632,687 323,815 16,797 19,233 Prior Period Adjustments - - - - Fund Balances - Ending $ 1,126,963 $ 373,114 $ 307,152 $ 25,778

The accompanying notes are an integral part of the financial statements. 95 Statement of Revenues, Expenditures and Changes in Fund Balance Other Governmental (Special Revenue) Funds For the Year Ended December 31, 2002

Special Revenue Tax Refund Fund Transportation Treasurer's Funds Mitigation Operation & Fund Maintenance Fund Detail Revenues Property Taxes $ - $ 1,361 $ - $ - Sales/Use Taxes - - - - Other Taxes - - - - Intergovernmental Revenues - - 604,005 122,084 Charges for Services - - 4,489,680 261 Fines & Forfeitures - - 33,361 - Interest & Investment Earnings 18,621 - 360,238 2,853 Rents, Leases & Concessions - - - - Contributions & Donations from Private Sources 2,557 - - - Miscellaneous Revenues - - - - Total Detail Revenues 21,178 1,361 5,487,284 125,198

Detail Expenditures Current General Government - - - 69,722 Public Safety 44,017 - - - Physical Environment - - - - Transportation - - 40,387 - Economic Environment - - - - Culture & Recreation 966 - - - Total Detail Expenditures 44,983 - 40,387 69,722

Other Financial Sources (Uses)

Operating/Capital Transfers-in - - - - Operating/Capital Transfers-out - - (6,887,580) - Debt Proceeds - - - - Disposition of Capital Assets - - - - Total Other Financial Sources (Uses) - - (6,887,580) -

Net Change in Fund Equity (23,805) 1,361 (1,440,683) 55,476

Fund Balances - Beginning 688,800 1,096,828 17,211,073 140,488 Prior Period Adjustments - (783,509) 20,954 - Fund Balances - Ending $ 664,995 $ 314,680 $ 15,791,345 $ 195,964

The accompanying notes are an integral part of the financial statements. 96 Statement of Revenues, Expenditures and Changes in Fund Balance Other Governmental (Special Revenue) Funds For the Year Ended December 31, 2002

US Department Total Special of HUD Grant Revenue Fund Fund Detail Revenues Property Taxes $ - $ 13,199,329 Sales/Use Taxes - 1,391,196 Other Taxes - 2,907,977 Intergovernmental Revenues 7,351,357 8,672,536 Charges for Services - 6,088,276 Fines & Forfeitures - 152,462 Interest & Investment Earnings - 677,824 Rents, Leases & Concessions - 78,995 Contributions & Donations from Private Sources - 343,100 Miscellaneous Revenues 26,477 554,418 Total Detail Revenues 7,377,833 34,066,114

Detail Expenditures Current General Government 5,973,631 7,519,553 Public Safety - 8,218,882 Physical Environment - 799,526 Transportation - 204,362 Economic Environment - 2,135,923 Culture & Recreation - 1,110,295 Total Detail Expenditures 5,973,631 19,988,541

Other Financial Sources (Uses)

Operating/Capital Transfers-in - 1,946,345 Operating/Capital Transfers-out (1,009,251) (21,621,406) Debt Proceeds - 4,538,319 Disposition of Capital Assets - 123,504 Total Other Financial Sources (Uses) (1,009,251) (15,013,238)

Net Change in Fund Equity 394,951 (935,665)

Fund Balances - Beginning 3,337,608 44,026,957 Prior Period Adjustments - 740,602 Fund Balances - Ending $ 3,732,559 $ 43,831,894

The accompanying notes are an integral part of the financial statements. 97 Budgetary Comparison Schedule Other Governmental (Special Revenue) Funds As of December 31, 2002

Anti-profiteering Revolving Budgeted Amounts Variance with Original Final Actual Final Budget Budgetary Fund Balance, January 1 $ 88,255 $ 88,255 $ 92,900 $ 4,645 Resources (Inflows): Interest and Investment Earnings - - 1,723 1,723 Miscellaneous Revenues 8,000 8,000 - (8,000) Operating/Capital Transfers In 3 3 3 - Total Resources (Inflows): 8,003 8,003 1,726 (6,277) Amount available for Appropriations 96,258 96,258 94,626 (1,632) Charges to Appropriations (Outflows) Prosecuting Attorney 100,003 100,003 3 100,000 Total General Government 100,003 100,003 3 100,000 Total Charges to Appropriations (Outflows) 100,003 100,003 3 100,000 Budgetary Fund Balance, December 31 $ (3,745) $ (3,745) $ 94,623 $ 98,368

Arson Investigation Equipment Budgeted Amounts Variance with Original Final Actual Final Budget Budgetary Fund Balance, January 1 $ 2,504 $ 2,504 $ 2,636 $ 132 Resources (Inflows): Charges for Services 330 330 1,954 1,624 Total Resources (Inflows): 330 330 1,954 1,624 Amount available for Appropriations 2,834 2,834 4,590 1,756 Charges to Appropriations (Outflows) Planning 2,000 2,000 515 1,485 Total Public Safety 2,000 2,000 515 1,485 Total Charges to Appropriations (Outflows) 2,000 2,000 515 1,485 Budgetary Fund Balance, December 31 $ 834 $ 834 $ 4,075 $ 3,241

The accompanying notes are an integral part of the financial statements. 98 Budgetary Comparison Schedule Other Governmental (Special Revenue) Funds As of December 31, 2002

Auditors Operations & Maintenance Budgeted Amounts Variance with Original Final Actual Final Budget Budgetary Fund Balance, January 1 $ 405,523 $ 405,523 $ 426,866 $ 21,343 Resources (Inflows): Intergovernmental Revenues 100,000 100,000 145,783 45,783 Charges for Services 162,275 162,275 228,943 66,668 Interest and Investment Earnings 20,000 20,000 8,363 (11,637) Total Resources (Inflows): 282,275 282,275 383,089 100,814 Amount available for Appropriations 687,798 687,798 809,955 122,157 Charges to Appropriations (Outflows) Auditor 318,892 318,892 289,154 29,738 Total General Government 318,892 318,892 289,154 29,738 Total Charges to Appropriations (Outflows) 318,892 318,892 289,154 29,738 Budgetary Fund Balance, December 31 $ 368,906 $ 368,906 $ 520,801 $ 151,895

Boating Safety Budgeted Amounts Variance with Original Final Actual Final Budget Budgetary Fund Balance, January 1 $ 6,463 $ 6,463 $ 6,803 $ 340 Resources (Inflows): Intergovernmental Revenues 90,000 90,000 183,643 93,643 Interest and Investment Earnings - - 5,496 5,496 Total Resources (Inflows): 90,000 90,000 189,139 99,139 Amount available for Appropriations 96,463 96,463 195,942 99,479 Charges to Appropriations (Outflows) Sheriff 90,000 90,000 79,638 10,362 Total Public Safety 90,000 90,000 79,638 10,362 Total Charges to Appropriations (Outflows) 90,000 90,000 79,638 10,362 Budgetary Fund Balance, December 31 $ 6,463 $ 6,463 $ 116,304 $ 109,841

The accompanying notes are an integral part of the financial statements. 99 Budgetary Comparison Schedule Other Governmental (Special Revenue) Funds As of December 31, 2002

Community Development Budgeted Amounts Variance with Original Final Actual Final Budget Budgetary Fund Balance, January 1 $ 6,766,609 $ 6,766,609 $ 7,122,746 $ 356,137 Resources (Inflows): Charges for Services 13,662,074 13,662,074 13,219,851 (442,223) Interest and Investment Earnings - - 524,096 524,096 Miscellaneous Revenues 480,000 480,000 110,539 (369,461) Operating/Capital Transfers In 1,328,036 1,328,036 1,328,036 - Total Resources (Inflows): 15,470,110 15,470,110 15,182,522 (287,588) Amount available for Appropriations 22,236,719 22,236,719 22,305,268 68,549 Charges to Appropriations (Outflows) Planning 443,966 443,966 447,324 (3,358) Total General Government 443,966 443,966 447,324 (3,358) Planning 14,921,013 14,921,013 13,434,609 1,486,404 Total Public Safety 14,921,013 14,921,013 13,434,609 1,486,404 Planning 50,000 50,000 - 50,000 Nondepartmental 500,000 500,000 - 500,000 Total Economic Environment 550,000 550,000 - 550,000 Total Charges to Appropriations (Outflows) 15,914,979 15,914,979 13,881,933 2,033,046 Prior Period Adjustments 7,269 Budgetary Fund Balance, December 31 $ 6,321,740 $ 6,321,740 $ 8,430,604 $ 2,108,864

Conservation Futures Tax Budgeted Amounts Variance with Original Final Actual Final Budget Budgetary Fund Balance, January 1 $ 9,266,003 $ 9,266,003 $ 9,753,687 $ 487,684 Resources (Inflows): Property Taxes 2,410,000 2,410,000 2,651,616 241,616 Other Taxes 14,000 14,000 17,528 3,528 Intergovernmental Revenues 30,000 30,000 35,361 5,361 Interest And Investment Earnings 346,000 346,000 180,045 (165,955) Miscellaneous Revenues - - 26,316 26,316 Total Resources (Inflows): 2,800,000 2,800,000 2,910,866 110,866 Amount available for Appropriations 12,066,003 12,066,003 12,664,553 598,550 Charges to Appropriations (Outflows) Parks And Recreation 2,007,200 2,007,200 2,007,200 - Total General Government 2,007,200 2,007,200 2,007,200 - Parks And Recreation 7,233,653 7,233,653 799,526 6,434,127 Total Physical Environment 7,233,653 7,233,653 799,526 6,434,127 Total Charges to Appropriations (Outflows) 9,240,853 9,240,853 2,806,726 6,434,127 Prior Period Adjustments 19,649 Budgetary Fund Balance, December 31 $ 2,825,150 $ 2,825,150 $ 9,877,476 $ 7,052,326

The accompanying notes are an integral part of the financial statements. 100 Budgetary Comparison Schedule Other Governmental (Special Revenue) Funds As of December 31, 2002

Convention & Performing Arts Budgeted Amounts Variance with Original Final Actual Final Budget Budgetary Fund Balance, January 1 $ 3,072,540 $ 3,072,540 $ 3,234,253 $ 161,713 Resources (Inflows): Sales/Use Taxes 1,315,739 1,315,739 1,391,196 75,457 Interest And Investment Earnings 42,291 42,291 56,816 14,525 Total Resources (Inflows): 1,358,030 1,358,030 1,448,012 89,982 Amount available for Appropriations 4,430,570 4,430,570 4,682,265 251,695 Charges to Appropriations (Outflows) Planning 244,564 244,564 247,464 (2,900) Total General Government 244,564 244,564 247,464 (2,900) Planning 922,436 922,436 742,036 180,400 Total Economic Environment 922,436 922,436 742,036 180,400 Total Charges to Appropriations (Outflows) 1,167,000 1,167,000 989,500 177,500 Budgetary Fund Balance, December 31 $ 3,263,570 $ 3,263,570 $ 3,692,765 $ 429,195

Correction Commissary Budgeted Amounts Variance with Original Final Actual Final Budget Budgetary Fund Balance, January 1 $ 165,365 $ 165,365 $ 174,068 $ 8,703 Resources (Inflows): Charges For Services 574,539 574,539 532,243 (42,296) Interest And Investment Earnings 5,000 5,000 1,531 (3,469) Miscellaneous Revenues - - (1,403) (1,403) Total Resources (Inflows): 579,539 579,539 532,371 (47,168) Amount available for Appropriations 744,904 744,904 706,439 (38,465) Charges to Appropriations (Outflows) Corrections 579,539 579,539 558,706 20,833 Total Public Safety 579,539 579,539 558,706 20,833 Total Charges to Appropriations (Outflows) 579,539 579,539 558,706 20,833 Budgetary Fund Balance, December 31 $ 165,365 $ 165,365 $ 147,733 $ (17,632)

The accompanying notes are an integral part of the financial statements. 101 Budgetary Comparison Schedule Other Governmental (Special Revenue) Funds As of December 31, 2002

Crime Victims/Witness Budgeted Amounts Variance with Original Final Actual Final Budget Budgetary Fund Balance, January 1 $ 442,549 $ 442,549 $ 465,841 $ 23,292 Resources (Inflows): Charges For Services 285,000 285,000 323,622 38,622 Fines and Forfeitures - - 1,822 1,822 Intergovernmental Revenues - - 8,292 8,292 Operating/Capital Transfers In 37,824 37,824 37,824 - Total Resources (Inflows): 322,824 322,824 371,560 48,736 Amount available for Appropriations 765,373 765,373 837,401 72,028 Charges to Appropriations (Outflows) Prosecuting Attorney 281,406 281,406 270,760 10,646 Total General Government 281,406 281,406 270,760 10,646 Total Charges to Appropriations (Outflows) 281,406 281,406 270,760 10,646 Budgetary Fund Balance, December 31 $ 483,967 $ 483,967 $ 566,641 $ 82,674

Elections Equipment Cumulative Reserve Budgeted Amounts Variance with Original Final Actual Final Budget Budgetary Fund Balance, January 1 $ 551,295 $ 551,295 $ 580,310 $ 29,016 Resources (Inflows): Charges For Services 166,500 166,500 212,383 45,883 Interest And Investment Earnings - - 10,071 10,071 Debt Proceeds - 5,500,000 4,538,319 (961,681) Total Resources (Inflows): 166,500 5,666,500 4,760,773 (905,727) Amount available for Appropriations 717,795 6,217,795 5,341,083 (876,712) Charges to Appropriations (Outflows) Auditor 125,691 5,648,512 4,701,778 946,734 Total General Government 125,691 5,648,512 4,701,778 946,734 Total Charges to Appropriations (Outflows) 125,691 5,648,512 4,701,778 946,734 Budgetary Fund Balance, December 31 $ 592,104 $ 569,283 $ 639,305 $ 70,023

The accompanying notes are an integral part of the financial statements. 102 Budgetary Comparison Schedule Other Governmental (Special Revenue) Funds As of December 31, 2002

Emergency Services Communication Systems Budgeted Amounts Variance with Original Final Actual Final Budget Budgetary Fund Balance, January 1 $ 753,480 $ 753,480 $ 793,137 $ 39,657 Resources (Inflows): Other Taxes 2,959,969 2,959,969 2,890,449 (69,520) Interest And Investment Earnings 13,439 13,439 9,036 (4,403) Miscellaneous Revenues 35,684 35,684 29,935 (5,749) Total Resources (Inflows): 3,009,092 3,009,092 2,929,420 (79,672) Amount available for Appropriations 3,762,572 3,762,572 3,722,557 (40,015) Charges to Appropriations (Outflows) Auditor 2,057,844 2,057,844 2,880,394 (822,550) Total General Government 2,057,844 2,057,844 2,880,394 (822,550) Total Charges to Appropriations (Outflows) 2,057,844 2,057,844 2,880,394 (822,550) Budgetary Fund Balance, December 31 $ 1,704,728 $ 1,704,728 $ 842,163 $ (862,565)

Evergreen Fairground Cumulative Reserve Budgeted Amounts Variance with Original Final Actual Final Budget Budgetary Fund Balance, January 1 $ 906,894 $ 906,894 $ 954,625 $ 47,731 Resources (Inflows): Interest And Investment Earnings 50,000 50,000 24,957 (25,043) Rents, Leases And Concessions 55,000 55,000 78,995 23,995 Miscellaneous Revenues - - 6,500 6,500 Operating/Capital Transfers In 50,000 50,000 493,791 443,791 Total Resources (Inflows): 155,000 155,000 604,243 449,243 Amount available for Appropriations 1,061,894 1,061,894 1,558,868 496,974 Charges to Appropriations (Outflows) Parks And Recreation 1,428,945 1,428,945 727,384 701,561 Total Culture and Recreation 1,428,945 1,428,945 727,384 701,561 Total Charges to Appropriations (Outflows) 1,428,945 1,428,945 727,384 701,561 Budgetary Fund Balance, December 31 $ (367,051) $ (367,051) $ 831,484 $ 1,198,535

The accompanying notes are an integral part of the financial statements. 103 Budgetary Comparison Schedule Other Governmental (Special Revenue) Funds As of December 31, 2002

Extradition Services Budgeted Amounts Variance with Original Final Actual Final Budget Budgetary Fund Balance, January 1 $ 9,341 $ 9,341 $ 9,833 $ 492 Resources (Inflows): Total Resources (Inflows): - - - - Amount available for Appropriations 9,341 9,341 9,833 492 Budgetary Fund Balance, December 31 $ 9,341 $ 9,341 $ 9,833 $ 492

Fair Sponsorships Donations Budgeted Amounts Variance with Original Final Actual Final Budget Budgetary Fund Balance, January 1 $ 42,501 $ 42,501 $ 44,738 $ 2,237 Resources (Inflows): Interest And Investment Earnings 3,500 3,500 1,071 (2,429) Contributions And Donations From Private Sources 380,000 380,000 343,100 (36,900) Miscellaneous Revenues 30,000 30,000 40,946 10,946 Total Resources (Inflows): 413,500 413,500 385,117 (28,383) Amount available for Appropriations 456,001 456,001 429,855 (26,146) Charges to Appropriations (Outflows) Parks And Recreation 413,500 413,500 380,012 33,488 Total Culture and Recreation 413,500 413,500 380,012 33,488 Total Charges to Appropriations (Outflows) 413,500 413,500 380,012 33,488 Budgetary Fund Balance, December 31 $ 42,501 $ 42,501 $ 49,843 $ 7,342

The accompanying notes are an integral part of the financial statements. 104 Budgetary Comparison Schedule Other Governmental (Special Revenue) Funds As of December 31, 2002

Grant Control Budgeted Amounts Variance with Original Final Actual Final Budget Budgetary Fund Balance, January 1 $ 932,184 $ 932,184 $ 981,246 $ 49,062 Resources (Inflows): Intergovernmental Revenue 8,406,563 8,799,504 7,291,818 (1,507,686) Charges for Services - - 77,758 77,758 Miscellaneous Revenues 4,425,648 4,032,707 286,628 (3,746,079) Operating/Capital Transfers In 2,333,348 2,333,348 1,101,805 (1,231,543) Total Resources (Inflows): 15,165,559 15,165,559 8,758,009 (6,407,550) Amount available for Appropriations 16,097,743 16,097,743 9,739,255 (6,358,488) Charges to Appropriations (Outflows) Prosecuting Attorney 553,741 553,741 975,542 (421,801) Juvenile Services 4,816,259 4,816,259 1,651,409 3,164,850 Total General Government 5,370,000 5,370,000 2,626,951 2,743,049 Sheriff 1,209,760 1,209,760 1,414,986 (205,226) Prosecuting Attorney 2,668,390 2,668,390 1,591,673 1,076,717 Juvenile Services 3,056,941 3,056,941 1,257,034 1,799,907 Total Public Safety 6,935,091 6,935,091 4,263,693 2,671,398 Public Works 31,894 31,894 14,265 17,629 Pass-Through Grants 198,500 198,500 89,156 109,344 Total Transportation 230,394 230,394 103,421 126,973 Planning 2,647,694 2,647,694 1,182,929 1,464,765 Total Economic Environment 2,647,694 2,647,694 1,182,929 1,464,765 Parks and Recreation - - 2,900 (2,900) Total Culture and Recreation - - 2,900 (2,900) Total Charges to Appropriations (Outflows) 15,183,179 15,183,179 8,179,894 7,003,285 Prior Period Adjustments 700,000 Budgetary Fund Balance, December 31 $ 914,564 $ 914,564 $ 2,259,361 $ 1,344,797

Housing Trust Fund Budgeted Amounts Variance with Original Final Actual Final Budget Budgetary Fund Balance, January 1 $ 337,471 $ 337,471 $ 355,233 $ 17,762 Resources (Inflows): Charges For Services - - 513,119 513,119 Interest And Investment Earnings - - 1,537 1,537 Total Resources (Inflows): - - 514,656 514,656 Amount available for Appropriations 337,471 337,471 869,889 532,418 Charges to Appropriations (Outflows) Planning 222,400 222,400 122,983 99,417 Total Economic Environment 222,400 222,400 122,983 99,417 Total Charges to Appropriations (Outflows) 222,400 222,400 122,983 99,417 Budgetary Fund Balance, December 31 $ 115,071 $ 115,071 $ 746,906 $ 631,835

The accompanying notes are an integral part of the financial statements. 105 Budgetary Comparison Schedule Other Governmental (Special Revenue) Funds As of December 31, 2002

Parks Mitigation Budgeted Amounts Variance with Original Final Actual Final Budget Budgetary Fund Balance, January 1 $ 3,869,885 $ 3,869,885 $ 4,073,563 $ 203,678 Resources (Inflows): Charges For Services 2,820,830 2,820,830 1,794,287 (1,026,543) Interest And Investment Earnings 230,954 230,954 46,809 (184,145) Total Resources (Inflows): 3,051,784 3,051,784 1,841,096 (1,210,688) Amount available for Appropriations 6,921,669 6,921,669 5,914,659 (1,007,010) Charges to Appropriations (Outflows) Parks And Recreation 3,031,368 3,031,368 3,031,368 - Total General Government 3,031,368 3,031,368 3,031,368 - Parks And Recreation 20,416 20,416 20,416 - Total Culture and Recreation 20,416 20,416 20,416 - Total Charges to Appropriations (Outflows) 3,051,784 3,051,784 3,051,784 - Budgetary Fund Balance, December 31 $ 3,869,885 $ 3,869,885 $ 2,862,875 $ (1,007,010)

Public Works Facility Construction Budgeted Amounts Variance with Original Final Actual Final Budget Budgetary Fund Balance, January 1 $ 949,929 $ 949,929 $ 999,925 $ 49,996 Resources (Inflows): Interest And Investment Earnings 300,000 300,000 3,485 (296,515) Operating/Capital Transfers In 500,000 500,000 - (500,000) Disposition Of Capital Assets 8,000,000 8,000,000 123,504 (7,876,496) Total Resources (Inflows): 8,800,000 8,800,000 126,989 (8,673,011) Amount available for Appropriations 9,749,929 9,749,929 1,126,914 (8,623,015) Charges to Appropriations (Outflows) Public Works 3,722,924 3,722,924 60,553 3,662,371 Total Transportation 3,722,924 3,722,924 60,553 3,662,371 Total Charges to Appropriations (Outflows) 3,722,924 3,722,924 60,553 3,662,371 Budgetary Fund Balance, December 31 $ 6,027,005 $ 6,027,005 $ 1,066,361 $ (4,960,644)

The accompanying notes are an integral part of the financial statements. 106 Budgetary Comparison Schedule Other Governmental (Special Revenue) Funds As of December 31, 2002

Real Estate Excise Tax Budgeted Amounts Variance with Original Final Actual Final Budget Budgetary Fund Balance, January 1 $ 6,692,956 $ 6,692,956 $ 7,045,217 $ 352,261 Resources (Inflows): Other Taxes 5,290,336 5,290,336 10,547,713 5,257,377 Total Resources (Inflows): 5,290,336 5,290,336 10,547,713 5,257,377 Amount available for Appropriations 11,983,292 11,983,292 17,592,930 5,609,638 Charges to Appropriations (Outflows) Nondepartmental 5,785,670 5,785,670 11,343,587 (5,557,917) Total General Government 5,785,670 5,785,670 11,343,587 (5,557,917) Total Charges to Appropriations (Outflows) 5,785,670 5,785,670 11,343,587 (5,557,917) Budgetary Fund Balance, December 31 $ 6,197,622 $ 6,197,622 $ 6,249,343 $ 51,721

Revenue Stabilization Budgeted Amounts Variance with Original Final Actual Final Budget Budgetary Fund Balance, January 1 $ 826,409 $ 826,409 $ 869,904 $ 43,495 Resources (Inflows): Total Resources (Inflows): - - - - Amount Available for Appropriations 826,409 826,409 869,904 43,495 Charges to Appropriations (Outflows) Nondepartmental 869,904 869,904 869,904 - Total General Government 869,904 869,904 869,904 - Total Charges to Appropriations (Outflows) 869,904 869,904 869,904 - Budgetary Fund Balance, December 31 $ (43,495) $ (43,495) $ - $ 43,495

The accompanying notes are an integral part of the financial statements. 107 Budgetary Comparison Schedule Other Governmental (Special Revenue) Funds As of December 31, 2002

River Management Budgeted Amounts Variance with Original Final Actual Final Budget Budgetary Fund Balance, January 1 $ 601,053 $ 601,053 $ 632,687 $ 31,634 Resources (Inflows): Property Taxes 270,728 270,728 279,120 8,392 Other Taxes 2,000 2,000 1,844 (156) Intergovernmental Revenues 1,478,500 1,478,500 4,616 (1,473,884) Charges For Services 122,000 122,000 54,400 (67,600) Interest And Investment Earnings 6,000 6,000 9,060 3,060 Miscellaneous Revenues 25,000 25,000 69,575 44,575 Operating/Capital Transfers In 828,207 828,207 828,208 1 Total Resources (Inflows): 2,732,435 2,732,435 1,246,823 (1,485,612) Amount available for Appropriations 3,333,488 3,333,488 1,879,510 (1,453,978) Charges to Appropriations (Outflows) Public Works 2,749,130 2,749,130 752,547 1,996,583 Total Physical Environment 2,749,130 2,749,130 752,547 1,996,583 Total Charges to Appropriations (Outflows) 2,749,130 2,749,130 752,547 1,996,583 Budgetary Fund Balance, December 31 $ 584,358 $ 584,358 $ 1,126,963 $ 542,605

Sheriff Drug Buy Fund Budgeted Amounts Variance with Original Final Actual Final Budget Budgetary Fund Balance, January 1 $ 307,624 $ 307,624 $ 323,815 $ 16,191 Resources (Inflows): Intergovernmental Revenues 140,000 140,000 232,825 92,825 Charges For Services 5,000 5,000 31,936 26,936 Fines And Forfeitures 201,100 201,100 119,101 (81,999) Interest And Investment Earnings 3,000 3,000 10,603 7,603 Miscellaneous Revenues 171,300 171,300 165,384 (5,916) Total Resources (Inflows): 520,400 520,400 559,849 39,449 Amount available for Appropriations 828,024 828,024 883,664 55,640 Charges to Appropriations (Outflows) Sheriff 100,273 100,273 97,615 2,658 Total General Government 100,273 100,273 97,615 2,658 Sheriff 840,254 840,254 412,935 427,319 Total Public Safety 840,254 840,254 412,935 427,319 Total Charges to Appropriations (Outflows) 940,527 940,527 510,550 429,977 Budgetary Fund Balance, December 31 $ (112,503) $ (112,503) $ 373,114 $ 485,617

The accompanying notes are an integral part of the financial statements. 108 Budgetary Comparison Schedule Other Governmental (Special Revenue) Funds As of December 31, 2002

Sheriff-Search & Rescue Budgeted Amounts Variance with Original Final Actual Final Budget Budgetary Fund Balance, January 1 $ 15,957 $ 15,957 $ 16,797 $ 840 Resources (Inflows): Property Taxes 2,000 2,000 - (2,000) Other Taxes - 313,355 313,355 - Total Resources (Inflows): 2,000 315,355 313,355 (2,000) Amount available for Appropriations 17,957 331,312 330,152 (1,160) Charges to Appropriations (Outflows) Public Works 2,000 315,355 23,000 292,355 Total Physical Environment 2,000 315,355 23,000 292,355 Total Charges to Appropriations (Outflows) 2,000 315,355 23,000 292,355 Budgetary Fund Balance, December 31 $ 15,957 $ 15,957 $ 307,152 $ 291,195

Snoh County Tomorrow Cumulative Reserve Budgeted Amounts Variance with Original Final Actual Final Budget Budgetary Fund Balance, January 1 $ 18,271 $ 18,271 $ 19,233 $ 962 Resources (Inflows): Intergovernmental Revenues 63,138 63,138 57,017 (6,121) Miscellaneous Revenues 400 400 112 (288) Operating/Capital Transfers In 33,652 33,652 37,391 3,739 Total Resources (Inflows): 97,190 97,190 94,520 (2,670) Amount Available for Appropriations 115,461 115,461 113,753 (1,708) Charges to Appropriations (Outflows) Planning 100,929 100,929 87,975 12,954 Total Economic Environment 100,929 100,929 87,975 12,954 Total Charges to Appropriations (Outflows) 100,929 100,929 87,975 12,954 Budgetary Fund Balance, December 31 $ 14,532 $ 14,532 $ 25,778 $ 11,246

The accompanying notes are an integral part of the financial statements. 109 Budgetary Comparison Schedule Other Governmental (Special Revenue) Funds As of December 31, 2002

Special Revenue Funds Budgeted Amounts Variance with Original Final Actual Final Budget Budgetary Fund Balance, January 1 $ 654,360 $ 654,360 $ 688,800 $ 34,440 Resources (Inflows): Interest and Investment Earnings 60,250 60,250 18,621 (41,629) Contributions and Donations from Private Sources 33,000 33,000 2,557 (30,443) Total Resources (Inflows): 93,250 93,250 21,178 (72,072) Amount available for Appropriations 747,610 747,610 709,978 (37,632) Charges to Appropriations (Outflows) Auditor 6,500 6,500 - 6,500 Total General Government 6,500 6,500 - 6,500 Juvenile Services 60,000 60,000 44,017 15,983 Total Public Safety 60,000 60,000 44,017 15,983 Parks and Recreation 50,000 50,000 966 49,034 Total Culture and Recreation 50,000 50,000 966 49,034 Total Charges to Appropriations (Outflows) 116,500 116,500 44,983 71,517 Budgetary Fund Balance, December 31 $ 631,110 $ 631,110 $ 664,995 $ 33,885

Tax Refund Fund Budgeted Amounts Variance with Original Final Actual Final Budget Budgetary Fund Balance, January 1 $ 1,041,987 $ 1,041,987 $ 1,096,828 $ 54,841 Resources (Inflows): Property Taxes - - 1,361 1,361 Total Resources (Inflows): - - 1,361 1,361 Amount available for Appropriations 1,041,987 1,041,987 1,098,189 56,202 Charges to Appropriations (Outflows) Treasurer - - - - Total General Government - - - - Total Charges to Appropriations (Outflows) - - - - Prior Period Adjustments (783,509) Budgetary Fund Balance, December 31 $ 1,041,987 $ 1,041,987 $ 314,680 $ (727,307)

The accompanying notes are an integral part of the financial statements. 110 Budgetary Comparison Schedule Other Governmental (Special Revenue) Funds As of December 31, 2002

Transportation Mitigation Budgeted Amounts Variance with Original Final Actual Final Budget Budgetary Fund Balance, January 1 $ 16,350,519 $ 16,350,519 $ 17,211,073 $ 860,554 Resources (Inflows): Intergovernmental Revenues 1,090,000 1,090,000 604,005 (485,995) Charges for Services 6,504,000 6,504,000 4,489,680 (2,014,320) Fines and Forfeitures - - 33,361 33,361 Interest and Investment Earnings 1,160,000 1,160,000 360,238 (799,762) Total Resources (Inflows): 8,754,000 8,754,000 5,487,284 (3,266,716) Amount available for Appropriations 25,104,519 25,104,519 22,698,357 (2,406,162) Charges to Appropriations (Outflows) Public Works 8,487,000 8,487,000 6,887,580 1,599,420 Total General Government 8,487,000 8,487,000 6,887,580 1,599,420 Public Works 39,109 39,109 40,387 (1,278) Total Transportation 39,109 39,109 40,387 (1,278) Total Charges to Appropriations (Outflows) 8,526,109 8,526,109 6,927,967 1,598,142 Prior Period Adjustments 20,954 Budgetary Fund Balance, December 31 $ 16,578,410 $ 16,578,410 $ 15,791,344 $ (787,066)

US Department of HUD Grant Fund Budgeted Amounts Variance with Original Final Actual Final Budget Budgetary Fund Balance, January 1 $ 3,170,728 $ 3,170,728 $ 3,337,608 $ 166,880 Resources (Inflows): Intergovernmental Revenues 22,826,235 22,826,235 7,351,357 (15,474,878) Miscellaneous Revenues 16,073 16,073 26,477 10,404 Total Resources (Inflows): 22,842,308 22,842,308 7,377,834 (15,464,474) Amount Available for Appropriations 26,013,036 26,013,036 10,715,442 (15,297,594) Charges to Appropriations (Outflows) Planning 22,826,235 22,826,235 6,982,882 15,843,353 Total General Government 22,826,235 22,826,235 6,982,882 15,843,353 Total Charges to Appropriations (Outflows) 22,826,235 22,826,235 6,982,882 15,843,353 Budgetary Fund Balance, December 31 $ 3,186,801 $ 3,186,801 $ 3,732,560 $ 545,759

The accompanying notes are an integral part of the financial statements. 111 Other Governmental Funds Debt Service Funds

RID 13 Long Term Debt

RCW 36.88.160 empowered the counties to create Road Improvement Districts. This fund accounts for the improvements at 128th Street S.E. The improvements were funded by the sale of RID bonds.

RID 11A Assessment

RCW 36.88.160 empowered the counties to create Road Improvement Districts. Ordinance 82-030, and accounts for the improvements at 165th Avenue S.E established this fund. The improvements were funded by the sale of RID bonds.

Limited Tax Debt Service

The purpose of Ordinance 85-132 is to establish a single debt service fund to provide for the payment of principal and interest related to all currently outstanding and future non-voter-approved limited tax general obligation bond issues as authorized by RCW 39.36.020(2).

Road Improvement District 24A

RCW 36.88.160 empowered the counties to create Road Improvement Districts. Ordinance 87-130, and accounts for the improvements at Smokey Point Boulevard and 172nd Street N.E established this fund.

Road Improvement District 30

RCW 36.88.160 empowered the counties to create Road Improvement Districts. Ordinance 91-169, and accounts for the improvements at 125th Street S.E. as specified in Ordinance 90-135 established this fund. Resources of the Road Improvement District No. 30 shall be from interim financing warrants, interfund loans, commercial lending institution loans, special benefit assessments, appropriations, gifts, bequest, bond proceeds or other financing sources.

112 Balance Sheet Other Governmental (Debt Service) Funds As of December 31, 2002

RID 13 RID 11A Limited GO RID 24A RID 30 Total Debt Service Debt Service

ASSETS Current Assets Cash $ 26,322 $ 7,147 $ 474,583 $ (18,912) $ 8,772 $ 497,912 Investments 13,400 100 24,213,004 124,000 - 24,350,504 Taxes Receivable 34,240 9,026 196,975 2,522,681 49,842 2,812,765 Other Receivable, Net - - 31,355 - - 31,355 Total Current Assets 73,962 16,273 24,915,917 2,627,769 58,614 27,692,536

Restricted Assets Investments - - - 171,833 - 171,833 Total Restricted Assets - - - 171,833 - 171,833

Non-Current Assets Deferred Charges - - - - 60 60 Total Non-Current Assets - - - - 60 60

Total Assets 73,962 16,273 24,915,917 2,799,602 58,674 27,864,429

LIABILITIES Current Liabilities Accounts Payable - - 4,178 - - 4,178 Deferred Revenue 34,224 9,026 196,975 2,522,477 49,842 2,812,545 Total Current Liabilities 34,224 9,026 201,154 2,522,477 49,842 2,816,723

Total Liabilities 34,224 9,026 201,154 2,522,477 49,842 2,816,723

FUND BALANCES Reserved/Restricted Reserves for Debt Service 756 100 24,405,352 641,033 465 25,047,705 Total Reserved/Restricted 756 100 24,405,352 641,033 465 25,047,705

Unreserved/Unrestricted Equity Debt Service Fund 38,982 7,147 309,412 (363,908) 8,367 - Total Unreserved/Unrestricted Equity 38,982 7,147 309,412 (363,908) 8,367 -

Total Fund Balances 39,738 7,247 24,714,763 277,125 8,832 25,047,705

Total Liabilities & Fund Balances $ 73,962 $ 16,273 $ 24,915,917 $ 2,799,602 $ 58,674 $ 27,864,429

The accompanying notes are an integral part of the financial statements. 113 Statement of Revenues, Expenditures and Changes in Fund Balance Other Governmental (Debt Service) Funds For the Year Ended December 31, 2002

Limited GO Total RID 13 RID 11A Debt Service RID 24A RID 30 Debt Service

Detail Revenues Property Taxes$ - $ - $ 3,403,587 $ - $ - $ 3,403,587 Other Taxes 10,144 1,789 22,473 167,373 3,182 204,961 Intergovernmental Revenues - - 785,207 - - 785,208 Interest & Investment Earnings 284 18 480,932 7,165 - 488,400 Contributions & Donations from Private Sources - - 56,652 - - 56,652 Miscellaneous Revenues 28,613 5,340 290,769 204,650 5,186 534,558 Total Detail Revenues 39,042 7,147 5,039,620 379,188 8,367 5,473,366

Detail Expenditures Current Transportation - - - (7,198) - (7,198) Debt Services Principal Payments - - 5,176,749 585,000 - 5,761,749 Interest Expenses 60 - 13,663,968 165,295 - 13,829,323 Total Detail Expenditures 60 - 18,840,717 743,097 - 19,583,874

Other Financial Sources (Uses) Operating/Capital Transfers-in - - 12,859,694 - - 12,859,694 Total Other Financial Sources (Uses) - - 12,859,694 - - 12,859,694

Net Change in Fund Equity 38,982 7,147 (941,403) (363,908) 8,367 (1,250,814)

Fund Balances - Beginning 756 100 25,612,763 641,033 465 26,255,112 Prior Period Adjustments 43,403 43,403 Fund Balances - Ending $ 39,738 $ 7,247 $ 24,714,763 $ 277,125 $ 8,832 $ 25,047,705

The accompanying notes are an integral part of the financial statements. 114 Budgetary Comparison Schedule Other Governmental (Debt Service) Funds As of December 31, 2002

RID 11 A Assessment Budgeted Amounts Variance with Original Final Actual Final Budget Budgetary Fund Balance, January 1 $ 95 $ 95 $ 100 $ 5 Resources (Inflows): Other Taxes 800 800 1,789 989 Interest and Investment Earnings 100 110 18 (92) Miscellaneous Revenues 1,500 1,500 5,340 3,840 Total Resources (Inflows): 2,400 2,410 7,147 4,737 Amount available for Appropriations 2,495 2,505 7,247 4,742 Charges to Appropriations (Outflows) Debt Service 250 250 - 250 Total Interest on Long-Term Debt 250 250 - 250 Total Charges to Appropriations (Outflows) 250 250 - 250 Budgetary Fund Balance, December 31 $ 2,245 $ 2,255 $ 7,247 $ 4,992

Limited Tax Debt Service Budgeted Amounts Variance with Original Final Actual Final Budget Budgetary Fund Balance, January 1 $ 24,332,125 $ 24,332,125 $ 25,612,763 $ 1,280,638 Resources (Inflows): Property Taxes 3,342,642 3,342,642 3,403,587 60,945 Other Taxes 67,000 67,000 22,473 (44,527) Intergovernmental Revenues 739,871 739,871 785,207 45,336 Interest and Investment Earnings 310,000 310,000 480,932 170,932 Contributions and Donations From Private Sources - - 56,652 56,652 Miscellaneous Revenues - - 290,769 290,769 Operating/Capital Transfers In 12,836,871 12,859,692 12,859,694 2 Total Resources (Inflows): 17,296,384 17,319,205 17,899,314 580,109 Amount available for Appropriations 41,628,509 41,651,330 43,512,077 1,860,747 Charges to Appropriations (Outflows) Debt Service 11,768,760 11,769,220 5,176,749 6,592,471 Total Principal on Long-Term Debt 11,768,760 11,769,220 5,176,749 6,592,471 Debt Service 13,590,284 13,613,105 13,663,968 (50,863) Total Interest on Long-Term Debt 13,590,284 13,613,105 13,663,968 (50,863) Total Charges to Appropriations (Outflows) 25,359,044 25,382,325 18,840,717 6,541,608 Prior Period Adjustments 43,403 Budgetary Fund Balance, December 31 $ 16,269,465 $ 16,269,005 $ 24,714,763 $ 8,445,758

The accompanying notes are an integral part of the financial statements. 115 Budgetary Comparison Schedule Other Governmental (Debt Service) Funds As of December 31, 2002

RID 13 Long Term Debt Budgeted Amounts Variance with Original Final Actual Final Budget Budgetary Fund Balance, January 1 $ 718 $ 718 $ 756 $ 38 Resources (Inflows): Other Taxes 2,500 2,500 10,145 7,645 Interest and Investment Earnings 100 100 284 184 Miscellaneous Revenues 5,000 5,000 28,613 23,613 Total Resources (Inflows): 7,600 7,600 39,042 31,442 Amount available for Appropriations 8,318 8,318 39,798 31,480 Charges to Appropriations (Outflows) Debt Service - - 60 (60) Total Interest on Long-Term Debt - - 60 (60) Total Charges to Appropriations (Outflows) - - 60 (60) Budgetary Fund Balance, December 31 $ 8,318 $ 8,318 $ 39,738 $ 31,420

Road Improvement District RID 24 Budgeted Amounts Variance with Original Final Actual Final Budget Budgetary Fund Balance, January 1 $ 608,981 $ 608,981 $ 641,033 $ 32,052 Resources (Inflows): Other Taxes 226,000 226,000 167,374 (58,626) Interest and Investment Earnings - - 7,165 7,165 Miscellaneous Revenues 536,000 536,000 204,650 (331,350) Total Resources (Inflows): 762,000 762,000 379,189 (382,811) Amount available for Appropriations 1,370,981 1,370,981 1,020,222 (350,759) Charges to Appropriations (Outflows) Debt Service 586,000 586,000 577,802 8,198 Total Principal on Long-Term Debt 586,000 586,000 577,802 8,198 Debt Service 176,000 176,000 165,295 10,705 Total Interest on Long-Term Debt 176,000 176,000 165,295 10,705 Total Charges to Appropriations (Outflows) 762,000 762,000 743,097 18,903 Budgetary Fund Balance, December 31 $ 608,981 $ 608,981 $ 277,125 $ (331,856)

Road Improvement District RID 30 Budgeted Amounts Variance with Original Final Actual Final Budget Budgetary Fund Balance, January 1 $ 442 $ 442 $ 465 $ 23 Resources (Inflows): Other Taxes - - 3,181 3,181 Miscellaneous Revenues - - 5,186 5,186 Total Resources (Inflows): - - 8,367 8,367 Amount available for Appropriations 442 442 8,832 8,390 Budgetary Fund Balance, December 31 $ 442 $ 442 $ 8,832 $ 8,390

The accompanying notes are an integral part of the financial statements. 116 Other Governmental Funds Capital Projects Funds

Parks Construction Fund

This fund accounts for the acquisition and development of county parks. These activities are funded from the real estate excise taxes collected by authorization of Washington State SB4972, and developer mitigation fees as authorized by Ordinance #91-085.

Facility Construction

The purpose of the 1989 facility construction fund is to provide for the construction, acquisition, and improvement of county office space and parking facilities described in the long-range office space and parking facility plan adoption by Motion No. 89-121 on May 3, 1989. The department of facilities management administers this fund.

Elevator Construction

The purpose of the elevator modernization construction fund is to provide for the renovation and Ordinance 93-050 created modernization of the elevators in the county administration and county courthouse buildings.

Data Processing Capital

Ordinance 93.057 created the Data Processing Capital fund. The purpose of the data processing capital improvement fund is to provide for the development of various data processing systems for county departments. Resources of the data processing capital improvement fund shall be from the issuance of general obligation bonds, and other resources deemed appropriate by the county council.

Facilities Improvements

This facilities management construction fund was created to provide for the improvement, repair, remodeling, and renovation of County-owned and operated facilities.

Construction Projects

This fund was created to track the flow of bond proceeds received from the 1995 bond issue to their respective capital funds, of which the financing of the Denney Juvenile Justice Center had the biggest share at $22 million.

117 Balance Sheet Other Governmental (Capital Projects) Funds As of December 31, 2002

Data 1994 Total Parks Facility Elevator Processing Facility Construction Capital Construction Construction Construction Construction Improvement Projects Projects

ASSETS Current Assets Cash $ 902,770 $ 159,495 $ 4,217 $ 393,614 $ 351,967 $ 65,273 $ 1,877,337 Investments 21,389,878 4,740,102 - 4,910,799 - 1,902,115 32,942,894 Taxes Receivable - 175 - - - - 175 Other Receivable, Net 1,214,222 - - 6,295 - - 1,220,517 Interest Receivables - 5,829 - - - 2,329 8,158 Total Current Assets 23,506,870 4,905,601 4,217 5,310,708 351,967 1,969,718 36,049,081

Total Assets 23,506,870 4,905,601 4,217 5,310,708 351,967 1,969,718 36,049,081

LIABILITIES Current Liabilities Accounts Payable 85,315 164,501 - 51,160 - - 300,977 Accrued Liabilities - - - 441 - - 441 Deferred Revenue - 175 - - - - 175 Total Current Liabilities 85,315 164,676 - 51,601 - - 301,593

Total Liabilities 85,315 164,676 - 51,601 - - 301,593

FUND BALANCES Unreserved/Unrestricted Equity Debt Service Fund ------Capital Projects Fund 23,421,554 4,740,925 4,217 5,259,107 351,967 1,969,718 35,747,488 Total Unreserved/Unrestricted Equity 23,421,554 4,740,925 4,217 5,259,107 351,967 1,969,718 35,747,488

Total Fund Balances 23,421,554 4,740,925 4,217 5,259,107 351,967 1,969,718 35,747,488

Total Liabilities & Fund Balances $ 23,506,870 $ 4,905,601 $ 4,217 $ 5,310,708 $ 351,967 $ 1,969,718 $ 36,049,081

The accompanying notes are an integral part of the financial statements. 118 Statement of Revenues, Expenditures and Changes in Fund Balance Other Governmental (Capital Projects) Funds For the Year Ended December 31, 2002

Parks Facility Elevator Data Processing Facility 94 Construction Total Capital Construction Construction Construction Construction Improvements Projects Projects Funds

Detail Revenues Intergovernmental Revenues$ 1,211,153 $ - $ - $ - $ - $ - $ 1,211,153 Charges for Services 38,254 - - 1,335,792 202,922 - 1,576,968 Interest & Investment Earnings - 98,908 - 88,429 - 42,948 230,285 Miscellaneous Revenues 172,362 42,609 - - - - 214,971 Total Detail Revenues 1,421,769 141,517 - 1,424,221 202,922 42,948 3,233,376

Detail Expenditures Current General Government - 127,086 380 1,306,842 59,879 - 1,494,186 Public Safety - 444,158 - - - - 444,158 Culture & Recreation 9,106,750 - - - - - 9,106,750 Total Detail Expenditures 9,106,750 571,244 380 1,306,842 59,879 11,045,094

Other Financial Sources (Uses) Operating/Capital Transfers-in 6,512,368 160,600 - 1,215,350 - - 7,888,318 Operating/Capital Transfers-out (826,292) (600,000) (160,600) (621,000) (2,207,892) Total Other Financial Sources (Uses) 5,686,076 (439,400) - 1,215,350 (160,600) (621,000) 5,680,426

Net Change in Fund Equity (1,998,905) (869,128) (380) 1,332,729 (17,557) (578,052) (2,131,292)

Fund Balances - Beginning 25,420,459 5,610,052 4,597 3,926,379 369,524 2,547,770 37,878,780 Fund Balances - Ending $ 23,421,554 $ 4,740,924 $ 4,217 $ 5,259,107 $ 351,967 $ 1,969,718 $ 35,747,488

The accompanying notes are an integral part of the financial statements. 119 Internal Service Fund

502 Equipment Rental & Revolving

SCC4.34 was adopted by resolution in 1978 to create a fund in the department of Public Works. This fund accounts for the acquisition, rental, maintenance, and disposal of rolling stock and the purchasing, inventorying and sale of parts and materials. The fund is supported entirely by fees for services and materials.

505 Information Services

Ordinance 82.026 created the Information Services department to administer the internal services fund. Services provided to other county departments include purchase and maintenance of computer and other data processing equipment, telephone and fax services, records management, and the print shop and mail center.

506 Snohomish County Insurance

Per ordinance 83.157 the insurance fund accounts for the outside insurance and self-insurance programs of the county, and operates the safety program of the Human Resources department. The Director of Finance therein shall make expenditures from the insurance fund or any account. Revenue comes from assessments on the other county departments.

507 Pits and Quarries

SCC4.39, created by Ordinance 86.126, assigns to this Public Works fund responsibility for the purchase, manufacture, storage, and sale of road maintenance and construction materials associated with the county pits and quarries required by the county.

508 Employee Benefits

Pursuant to RCW 36.32.400 and 41.04.180, this is an employee benefit plan and an internal service fund in the Human Resources department as defined by SCC 4.42. The purpose of the plan and fund is to provide and maintain life and health benefits and disability income, for the benefit of employees and their dependents. The fund is funded with county and/or employee contributions.

120

Statement of Net Assets Proprietary Funds For the Year Ended December 31, 2002

Business-type Governmental Activities (Internal Service Funds) Activities

Equipment Information Snohomish County Pits Employee Total Enterprise Rental & Revolving Services Insurance and Quarries Benefit Internal Service

ASSETS Current Assets Cash $ 2,078,820 $ 1,363,599 $ 207,789 $ 39,245 $ 440,255 $ 4,129,708 $ 9,611,077 Investments 9,313,500 6,669,000 5,795,450 4,565,640 29,450 26,373,040 28,992,019 Taxes Receivable ------311,430 Other Receivables, Net - 42,582 7,840 - 71,610 122,032 3,267,884 Due From Other Governments 47,490 36,274 - - 83,764 1,884,415 Interest Receivables 44,926 - - 5,712 - 50,638 85,060 Inventories 857,422 27,875 - 41,652 - 926,949 - Prepaid Items - - 494,815 215,839 710,654 - Total Current Assets 12,342,158 8,139,330 6,505,894 4,652,249 757,154 32,396,785 44,151,885

Restricted Assets Cash ------48,689 Investments ------3,113,437 Other Restricted Assets ------90,960 Total Restricted Assets ------3,253,086

Non-Current Assets Deferred Charges ------1,257,588 Property Held in Trust for Future Use ------35,750,139 Total Non-Current Assets ------37,007,727

Capital Assets Land - - - 4,870 - 4,870 33,010,853 Buildings and Structures, Net 2,649,033 - - 1,730,958 - 4,379,991 16,658,078 Other Improvements, Net - - - 571,478 - 571,478 20,228,306 Machinery and Equipment, Net 25,924,717 873,692 - 55,002 - 26,853,411 692,570 Infrastructure Assets, Net ------10,537,066 Construction in Progress 5,500 - - - - 5,500 53,905,573 Intangibles, Net - 118,675 - - - 118,675 393,518 Total Capital Assets 28,579,250 992,367 - 2,362,308 - 31,933,925 135,425,964

Total Assets $ 40,921,408 $ 9,131,697 $ 6,505,894 $ 7,014,557 $ 757,154 $ 64,330,711 $ 219,838,662

The accompanying notes are an integral part of the financial statements. 121 Statement of Net Assets Proprietary Funds For the Year Ended December 31, 2002

Business-type Governmental Activities (Internal Service Funds) Activities

Equipment Information Snohomish County Pits Employee Total Enterprise Rental & Revolving Services Insurance and Quarries Benefit Internal Service

LIABILITIES Current Liabilities Accounts Payable $ 174,500 $ 455,119 $ 293,885 $ 5,285 $ 342,667 1,271,456 $ 9,085,846 Claims and Judgments Payable - - 1,335,000 - - 1,335,000 - Accrued Liabilities 25,865 112,172 19 - - 138,056 661,383 Deferred Revenue - - - - 1,590,501 1,590,501 916,222 Bonds, Notes And Loans Payable 75,000 355,000 - - - 430,000 5,238,027 Total Current Liabilities 275,365 922,291 1,628,904 5,285 1,933,168 4,765,013 15,901,478

Restricted Liabilities Payable from Restricted Assets ------48,689 Future Landfill Closures ------2,183,903 Total Restricted Liabilities ------2,232,592

Non-Current Liabilities Employee Benefits Payable 206,219 271,661 - - - 477,880 844,066 Bonds, Notes And Loans Payable 1,578,026 2,002,277 - - - 3,580,303 78,020,818 Claims And Judgments Payable - - 8,804,527 - 1,733,789 10,538,316 - Total Non-Current Liabilities 1,784,245 2,273,938 8,804,527 - 1,733,789 14,596,499 78,864,884

Total Liabilities 2,059,610 3,196,229 10,433,431 5,285 3,666,957 19,361,512 96,998,955

NET ASSETS

Invested in Capital Assets, Net of Related Debt 26,926,225 (1,364,910) - 2,362,308 - 27,923,623 89,174,846

Restricted for: General Government 11,935,573 - - 4,646,964 - 16,582,539 - Debt Service ------90,960 Landfill Closure Costs ------929,534 Total Restricted Net Assets 11,935,573 - - 4,646,964 - 16,582,539 1,020,494

Unrestricted - 7,300,378 (3,927,537) - (2,909,803) 463,037 32,644,368

Total Net Assets $ 38,861,798 $ 5,935,468 $ (3,927,537) $ 7,009,272 $ (2,909,803) $ 44,969,199 $ 122,839,707

The accompanying notes are an integral part of the financial statements. 122 Statement of Revenues, Expenses and Changes in Fund Net Assets Proprietary Funds For the Year Ended December 31, 2002

Business-type Governmental Activities Activities Equipment Information Snohomish Pits and Employee Total Enterprise Funds Rental & Services County Quarries Benefits Revolving Insurance

Operating Revenues Charges for Services$ 11,586,720 $ 12,537,356 $ 5,653,995 $ 184,291 $ 20,377,849 $ 50,340,211 $ 47,655,166 Intergovernmental Revenues ------1,322,200 Rents, Leases and Concessions 27,386 - - 119,229 - 146,615 - Operating Assessments ------5,623,474 Total Operating Revenues 11,614,106 12,537,356 5,653,995 303,520 20,377,849 50,486,826 54,600,840

Operating Expenses Personnel Services 3,017,964 5,527,598 1,083,599 - 21,163 9,650,324 16,217,262 Contractual Services 384,783 2,721,838 5,451,563 58,831 22,293,849 30,910,864 28,847,891 Supplies 3,875,516 2,453,309 16,203 (11,664) 3,126 6,336,490 1,510,243 Interfund Payments for Services 1,027,940 645,257 75,732 323,585 17,645 2,090,159 7,768,134 Depreciation 2,914,242 793,871 - 109,052 - 3,817,165 3,959,689 Bad Debt Expense ------45,934 Total Operating Expenses 11,220,445 12,141,873 6,627,097 479,804 22,335,783 52,805,002 58,349,153

Operating Income (Loss) 393,661 395,483 (973,102) (176,284) (1,957,934) (2,318,176) (3,748,313)

Non-Operating Revenues (Expenses) Intergovernmental Revenues ------3,300,937 Interest & Investment Earnings 340,549 120,590 (70,567) 98,487 22,627 511,686 856,063 Contributions and Donations from Private Sources ------5,000 Miscellaneous Revenues 8,045 28,590 - - 50,648 87,283 66,478 Disposition of Capital Assets 328,293 - - 354,245 - 682,538 2,214,400 Interest Expenses (91,843) (131,680) - - - (223,523) (4,021,226) Total Non-Operating Revenues (Expenses) 585,044 17,500 (70,567) 452,732 73,275 1,057,984 2,421,652

Income(Loss) Before Contributions and Transfers 978,705 412,983 (1,043,669) 276,448 (1,884,659) (1,260,192) (1,326,659) Operating/Capital Transfers In 1,043,388 697,489 - - 424,820 2,165,697 2,821,451 (Operating/Capital Transfers out) - (1,030,862) (351,358) (2,900,527) (519,716) (4,802,463) (1,017,147) Change in Net Assets 2,022,093 79,610 (1,395,027) (2,624,079) (1,979,555) (3,896,958) 477,644

Net Assets, Beginning 36,851,947 6,056,079 (2,532,512) 8,580,783 (930,249) 48,026,048 124,449,277 Prior Period Adjustments (7,637) (11,801) - 1,052,569 - 1,033,131 (1,863,783) Cumulative Effect of Change in Accounting Principle (4,603) (188,424) - - - (193,027) (223,429) - Net Assets, Ending $ 38,861,800 $ 5,935,464 $ (3,927,539) $ 7,009,273 $ (2,909,804) $ 44,969,194 $ 122,839,707

The accompanying notes are an integral part of the financial statements. 123 Statement of Cash Flow Proprietary Funds For the Year Ending December 31, 2002

Business-Type Governmental Activities (Internal Service Funds) Activities Equipment Information Snohomish Pits Employee Total Enterprise Rental and Services County and Benefit Internal Funds Revolving Insurance Quarries Service

Cash Flow From Operating Activities Receipts from Operations $ 11,601,831 $ 12,526,619 $ 5,653,995 $ 325,826 $ 20,401,571 $ 50,509,842 $ 52,862,322 Payments to Employees (2,397,739) (4,426,726) (917,337) - (21,163) (7,762,965) (13,708,547) Payments to Claims (4,921,652) (6,208,594) (6,104,813) (154,881) (22,418,351) (39,808,291) (32,423,649) Internal Activity-Payments to Other Funds (1,027,940) (645,250) (75,732) (323,585) (17,647) (2,090,154) (6,218,256) Operating Grants ------525,499 Total Cash Flow from Operating Activities 3,254,500 1,246,049 (1,443,887) (152,640) (2,055,590) 848,432 1,037,369

Cash Flow from Capital and Related Financing Activities Capital Acquisition and Construction (5,017,883) (95,751) - (10,354) - (5,123,988) (20,623,383) Capital Grants ------3,300,937 Capital Contributions/Transfers 1,043,388 - - (2,900,527) - (1,857,139) (785,927) Sale of Fixed Assets 579,600 - - 275,176 - 854,776 2,224,792 Proceeds of Long Term Debt ------17,250,000 Principal Paid on Loans (75,000) (326,600) - - - (401,600) (4,588,632) Interest Paid on Loans (84,002) (133,029) - - - (217,031) (3,882,481) Total Cash Flow from Capital and

Related Financing Activities (3,553,897) (555,380) - (2,635,705) - (6,744,982) (7,104,694)

Cash Flow from NonCapital Financing Activities Miscellaneous Revenue 408 28,590 (190,383) - 50,648 (110,737) (82,675) Operating Transfers - (333,380) (351,358) - (94,896) (779,634) 2,590,232 Total Cash Flow from NonCapital

Financing Activities 408 (304,790) (541,741) - (44,248) (890,371) 2,507,557 - Cash Flow from Investing Activities Interest on Investments 304,388 134,674 125,246 106,903 22,627 693,838 899,470 Total Cash Flow from Investing Activities 304,388 134,674 125,246 106,903 22,627 693,838 899,470

Net Increase(Decrease) in Cash and Cash Equivalents 5,399 520,553 (1,860,382) (2,681,442) (2,077,211) (6,093,083) (2,660,298)

Cash and Cash Equivalents, January 1, 2002 11,386,920 7,512,043 7,863,621 7,286,327 2,546,915 36,595,826 44,425,521

Cash and Cash Equivalents, December 31, 2002 $ 11,392,319 $ 8,032,596 $ 6,003,239 $ 4,604,885 $ 469,704 $ 30,502,743 $ 41,765,223

Reconciliation of Operating Income to Net Cash Provided (Used) by Operating Activities Net Operating Income (Loss) 393,661 395,483 (973,102) (176,284) (1,957,934) (2,318,176) (3,748,313) Depreciation Expense 2,914,243 793,873 - 109,052 - 3,817,168 3,959,689 Bad Debt Expense ------(45,934) Vacation/Sick Leave Expense 22,264 (82,972) - - - (60,708) (47,481) Other Adjustments 2,935 - (97,207) - - (94,272) 50,287 Changes in Receivables, Net (12,274) (9,671) - 22,307 (60,725) (60,363) (1,660,190) Changes in Inventories 27,933 3,980 - (31,017) - 896 - Changes in Accounts Payable & Other Liabilities (94,262) 145,356 (373,578) (76,698) 94,461 (304,721) 2,108,796 Changes in Accruals and Deferred Charges - - - - (131,392) (131,392) 420,515 Net Cash Provided (Used) by Operating Activities $ 3,254,500 $ 1,246,049 $ (1,443,887) $ (152,640) $ (2,055,590) $ 848,432 $ 1,037,369

There was no other investing, capital or financing activities affecting assets or liabilities that did not result in cash flows.

The accompanying notes are an integral part of the financial statements. 124 Reconciliation of Fund Financial Statements to Entity-wide Financial Statements Statement of Net Assets As of December 31, 2002

Governmental Capital Long-Term Others Internal Service Entity-wide Funds Totals Related Debt Funds Totals ASSETS Current Assets Cash $ 41,710,642 $ - $ - $ - $ 4,129,708 $ 45,840,350 Investments 253,619,245 - - - 26,373,040 279,992,285 Taxes Receivable 6,244,171 - - - - 6,244,171 Other Receivables, Net 6,474,521 - - (222,432) 122,032 6,374,121 Due from other Governments 15,448,620 - 7,293,401 - 83,764 22,825,784 Prepaid Items - - - - 710,654 710,654 Inventories - - - - 926,949 926,949 Interest Receivables 619,539 - - - 50,638 670,178 Total Current Assets 324,116,738 - 7,293,401 (222,432) 32,396,785 363,584,492

Restricted Assets Cash 1,150 - - - - 1,150 Investments 171,833 - - - - 171,833 Total Restricted Assets 172,983 - - - - 172,983

Non-Current Assets Deferred Charges 60 - - - - 60 Notes/Contract Receiveables 5,157,261 - - - - 5,157,261 Investment in Joint Venture - 17,570,484 - - - 17,570,484 Total Non-Current Assets 5,157,321 17,570,484 - - - 22,727,805

Capital Assets Land - 117,703,170 - - 4,870 117,708,040 Building and Structures - 74,028,020 - - 4,856,781 78,884,801 Infrastructure - 353,718,147 - - - 353,718,147 Machinery & Equipment - 15,276,655 - - 47,751,144 63,027,799 Other Improvements - 12,136,528 - - 571,478 12,708,006 Construction in Progress - 29,344,943 - - 5,500 29,350,443 Intangibles - 444,911 - - 1,849,589 2,294,501 Accum Depreciation - (185,526,248) - - (23,105,436) (208,631,685) Total Capital Assets - 417,126,126 - - 31,933,926 449,060,052

Total Assets $ 329,447,042 $ 434,696,609 $ 7,293,401 $ (222,432) $ 64,330,711 $ 835,545,332

The accompanying notes are an integral part of the financial statements. 125 Reconciliation of Fund Financial Statements to Entity-wide Financial Statements Statement of Net Assets As of December 31, 2002

Governmental Capital Long-Term Others Internal Service Entity-wide Funds Totals Related Debt Funds Totals

Liabilities Current Liabilities Accounts Payable $ 12,359,313 $ - $ - $ - $ 1,271,456 $ 13,630,769 Claims and Judgement Payable - - - - 1,335,000 1,335,000 Due to other Governments 383,315 - - - - 383,315 Accrued Liabilities 480,969 - 941,679 1,709,384 138,056 3,270,088 Custodial Accounts 52,272 - - - - 52,272 Bonds Anticipation Notes Payable - - 4,539,319 - - 4,539,319 Bonds, Notes and Loan Payable - - 8,191,705 - 430,000 8,621,705 Deferred Revenue 13,299,601 - 7,293,401 - 1,590,501 22,183,503 Total Current Liabilities 26,575,470 - 20,966,104 1,709,384 4,765,013 54,015,969

Noncurrent Liabilities Employee Benefits Payable - - - 7,630,221 477,880 8,108,101 Bonds, notes, loans payable - - 205,336,049 - 3,580,303 208,916,352 Claims and Judgement Payable - - - - 10,538,316 10,538,316 Total Noncurrent Liabilities - - 205,336,049 7,630,221 14,596,499 227,562,769

Total Liabilities 26,575,470 - 226,302,153 9,339,605 19,361,512 281,578,739

Fund Balances Invested in Capital, net of related debt - 417,126,126 (219,008,751) - 27,923,623 226,040,998 Reserved/Restricted For General Government - - - 19,862,649 16,582,539 36,445,188 Public Safety - - - 2,089,071 - 2,089,071 Health & Human Services - - - 4,479,465 - 4,479,465 Culture & Recreation - - - 3,694,359 - 3,694,359 Transportation - - - 60,145,248 - 60,145,248 Reserves for Debt Service 25,555,705 - - (25,555,705) - - Total Reserved/Restricted 25,555,705 - - 64,715,087 16,582,539 106,853,331

Unreserved/Unrestricted Equity

General Fund 21,189,531 - - (21,189,531) - - Special Revenue Fund 105,634,172 - - (105,634,172) - - Capital Projects Fund 150,492,164 - - (150,492,164) - - Unrestricted Net Assets - 17,570,484 - 203,038,743 463,037 221,072,264 Total Unreserved/Unrestricted Equity 277,315,867 17,570,484 - (74,277,124) 463,037 221,072,264

Total Fund Balances 302,871,572 17,570,484 - (9,562,037) 17,045,576 327,925,595

Total Liability & Fund Balances $ 329,447,042 $ 17,570,484 $ 226,302,153 $ (222,432) $ 36,407,088 $ 609,504,334

The accompanying notes are an integral part of the financial statements. 126 Reconciliation of Fund Financial Statements to Entity-wide Financial Statements Statement of Activities For the Year Ended December 31, 2002

Governmental Capital Long-Term Others Internal Internal Entity-wide Funds Totals Related Items Debt Activity Service Totals (Interfund Funds Eliminations)

Detail Revenues Property Taxes$ 103,977,910 $ - $ - $ - $ - $ - $ 103,977,910 Sales/Use Taxes 31,765,803 - - - - - 31,765,803 Other Taxes 22,889,381 - - - - - 22,889,381 Operating Assessments 21,171 - - - - - 21,171 Licenses & Permits 1,744,725 - - - (1,744,725) - - Intergovernmental Revenues 99,459,588 - - - - - 99,459,588 Charges for Services 50,721,312 - - - 3,312,163 996,141 55,029,616 Fines & Forfeitures 5,327,360 - - - (5,327,360) - - Interest & Investment Easrnings 10,099,606 - - - - 511,686 10,611,292 Rents, Leases & Concessions 3,534,876 - - - (3,681,490) 146,614 - Contributions & Donations from Private Sources 436,410 1,342,472 - - - - 1,778,882 Miscellaneous Revenues 5,131,708 - - - - 87,284 5,218,992 Total Detail Revenues 335,109,850 1,342,472 - - (7,441,412) 1,741,725 330,752,635

Detail Expenditures Current Judicial 22,012,492 (4,119,298) - 23,137 - - 17,916,332 General Government 65,715,645 (7,496,417) (659,533) 131,308 (7,441,412) 3,591,563 53,841,153 Public Safety 102,203,937 (502,184) - 451,703 - 53,655 102,207,111 Physical Environment 1,857,809 (797,133) - - - - 1,060,676 Transportation 70,460,743 (23,806,396) 585,000 - - (184,291) 47,055,056 Health & Human Services 46,610,419 92,779 66,667 - - - 46,769,865 Economic Environment 6,190,566 - - - - - 6,190,566 Culture & Recreation 17,832,502 (8,213,334) - 88,100 - - 9,707,268 Debt Services - Principal Payments 6,312,980 - (6,312,980) - - - - Interest Expenses 13,903,824 - (501,993) - - 223,523 13,625,354 Total Expenditures 353,100,917 (44,841,984) (6,822,839) 694,248 (7,441,412) 3,684,450 298,373,382

Other Financial Sources (Uses) Operating/Capital Transfers-in 41,009,393 - - - - 2,165,697 43,175,092 (Operating/Capital Transfers-out) (39,919,999) (256,934) - - - (4,802,463) (44,979,396) Debt Proceeds 4,538,319 - (4,538,319) - - - - Gain(Loss) in Joint Ventures - (665,998) - - - - (665,998) Disposition of Capital Assets 123,504 - - - 682,537 806,041 Total Other Financial Sources (Uses) 5,751,217 (922,932) (4,538,319) - - (1,954,229) (1,664,261)

Net Change in Fund Equity (12,239,850) 45,261,525 2,284,520 (694,248) - (3,896,954) 30,714,991

Fund Balances - Beginning 315,639,385 185,195,432 (219,447,512) (8,867,790) - 48,026,049 320,545,569 Cumulative Effect of Change in Accounting Principle - 201,911,311 (1,443,672) - - (193,027) 200,274,612 Prior Period Adjustments (527,964) 2,328,343 (402,088) - - 1,033,131 2,431,421 Fund Balances - Ending $ 302,871,572 $ 434,696,609 $ (219,008,752) $ (9,562,038) $ - $ 44,969,199 $ 553,966,593

The accompanying notes are an integral part of the financial statements. 127

Snohomish County, Washington

Statistical Section Statistical Tables

Table 1: General Government Expenditures by Function (1) Last Ten Fiscal Years

Security of Transportation, Mental General Persons And Physical Road And Street Economic Physical Culture And Year Government Property Environment Construction Environment Health Recreation Debt Service Total 1993 $ 46,119,827 $ 40,108,291 $ 2,366,730 $ 39,847,333 $ 12,886,256 $ 5,083,103 $ 9,102,249 $ 2,823,709 $ 158,337,498 1994 52,969,152 43,341,687 874,518 40,379,567 12,391,032 5,441,977 9,336,639 3,308,715 168,043,287 1995 58,833,722 46,436,321 456,987 42,024,111 12,064,017 6,471,912 15,146,586 3,694,235 185,127,891 1996 66,518,957 51,846,917 3,048,459 47,213,761 21,474,179 13,506,004 11,352,398 5,379,119 220,339,794 1997 61,678,188 69,411,871 27,310,058 28,669,154 25,539,002 15,625,076 6,129,428 6,238,839 240,601,616 1998 69,279,749 78,220,802 19,136,857 28,092,003 33,094,284 13,451,226 10,928,013 6,180,645 258,383,579 1999 69,983,264 85,225,236 9,671,512 31,628,583 32,556,686 19,977,411 10,807,385 8,523,058 268,373,135 2000 74,349,416 88,838,120 9,179,026 32,326,731 48,457,086 22,158,399 11,281,589 10,494,963 297,085,330 2001 79,002,549 97,951,154 12,327,402 30,730,223 41,562,808 15,327,096 10,922,064 9,957,829 297,781,125 2002 65,715,645 124,216,429 1,857,809 70,460,743 6,190,566 46,610,419 17,832,502 20,216,804 353,100,917

Notes (1) Includes general, special revenue, debt service funds, and capital projects.

128 Statistical Tables

Table 2: General Revenues by Source (1) Last Ten Fiscal Years

Fiscal Taxes Licenses And Inter- Charges for Fine And Miscellaneous Total Year Permits Governmental Services Forfeits 1993 $ 84,255,355 $ 4,508,655 $ 39,711,138 $ 17,229,920 $ 2,736,644 $ 13,073,403 $ 161,515,115 1994 90,918,318 8,900,804 42,413,846 13,748,407 2,693,748 10,913,460 169,588,583 1995 98,565,392 8,709,970 50,444,490 14,298,269 2,839,773 20,659,374 195,517,268 1996 104,660,529 10,920,832 74,568,679 13,861,246 3,149,236 20,125,916 227,286,438 1997 118,767,973 1,438,819 82,633,866 33,209,904 3,270,576 20,553,295 259,874,433 1998 124,855,166 1,491,110 87,223,981 43,393,341 3,301,013 22,584,178 282,848,789 1999 136,173,502 1,553,376 87,587,545 43,911,199 4,766,889 25,079,824 299,072,335 2000 142,710,004 1,773,729 93,847,309 42,302,023 5,789,478 26,654,002 313,076,545 2001 152,649,052 2,038,769 88,903,196 41,644,032 4,958,945 30,774,060 320,968,054 2002 158,654,265 1,744,725 99,459,588 50,721,312 5,327,360 19,202,600 335,109,850

Notes (1) Includes general, special revenue, debt service funds, and capital projects.

129 Statistical Tables

Table 3: Property Tax Levies and Collections Last Ten Fiscal Years

Fiscal Total Current Percent Delinquent Total Percent Of Total Outstanding Percentage of Year Tax Tax Of Levy Tax Tax Tax Collections Delinquent Delinquent Tax Levy Collections Collected Collections Collections To Tax Levied Taxes to Tax Levied 1993 $ 51,027,709 $ 47,965,729 94.00% $ 1,881,431 $ 49,847,160 97.69% $ 1,228,553 2.41% 1994 55,578,679 53,584,032 96.41% 1,902,252 55,486,284 99.83% 1,186,933 2.14% 1995 61,712,668 60,476,183 98.00% 1,772,751 62,248,934 100.87% 3,384,221 5.48% 1996 68,052,602 65,531,655 96.30% 1,987,934 67,519,589 99.22% 3,546,323 5.21% 1997 73,742,793 71,327,804 96.73% 2,133,567 73,461,371 99.62% 3,766,263 5.11% 1998 80,007,668 77,127,597 96.40% 2,245,432 79,373,029 99.21% 2,650,179 3.31% 1999 87,061,076 84,013,938 96.50% 2,292,318 86,306,256 99.13% 3,139,894 3.61% 2000 92,978,795 88,569,946 95.26% 2,359,855 90,929,801 97.80% 5,958,935 6.41% 2001 100,145,087 96,401,289 96.26% 1,846,300 98,247,589 98.11% 5,729,523 5.72% 2002 110,342,888 108,109,217 97.98% 1,513,338 109,622,555 99.35% 5,900,255 5.35%

130 Statistical Tables

Table 4: Assessed and Estimated Actual Value of Taxable Property (1) Last Ten Fiscal Years

Real Property 1 Personal Property 2 Total Ratio of Total Fiscal Assessed Estimated Assessed Estimated Assessed Estimated Assessed to Total Year Value Actual Value Value Actual Value Value Actual Value Estimated Actual Value (2) 1993 $ 23,751,997,496 $ 28,242,565,394 $ 1,608,847,785 $ 1,645,038,635 $ 25,360,845,281 $ 29,887,604,029 84.9% 1994 26,072,826,519 29,661,918,679 1,809,513,543 1,886,875,436 27,882,340,062 31,548,794,115 88.4% 1995 28,390,201,185 30,993,669,416 2,312,095,566 2,390,998,517 30,702,296,751 33,384,667,933 92.0% 1996 29,668,423,386 32,855,396,884 2,318,432,852 2,318,432,852 31,986,856,238 35,173,829,736 90.9% 1997 30,973,901,778 34,569,086,806 2,417,488,128 2,662,431,859 33,391,389,906 37,231,518,665 89.7% 1998 32,734,498,056 37,029,975,176 2,229,493,164 2,315,153,857 34,963,991,220 39,345,129,033 88.9% 1999 34,791,225,831 40,502,009,116 2,243,705,515 2,243,705,515 37,034,931,346 42,745,714,631 86.6% 2000 36,996,486,746 44,413,549,515 2,243,513,873 2,243,513,873 39,240,000,619 46,657,063,388 84.1% 2001 40,305,975,472 49,153,628,624 2,195,719,122 2,195,719,122 42,501,694,594 51,349,347,746 82.8% 2002 42,391,095,463 51,759,579,320 2,243,239,705 2,406,909,555 44,634,335,168 54,166,488,875 82.4%

Notes (1) Snohomish County Assessor’s Annual Report for 2002 Taxes. (2) Ratio based on revaluation schedule determined by the Washington State Department of Revenue.

131 Statistical Tables

Table 5: All Overlapping Government Property Tax Rates (1) (2) Last Ten Fiscal Years (3)

School Year City (4) District (5) County State Other (6) Total (7) 1993 3.04 4.72 2.84 3.56 1.08 15.24 1994 3.04 4.42 2.93 3.49 0.95 14.83 1995 3.15 4.64 3.07 3.38 0.70 14.94 1996 3.25 4.80 3.14 3.62 0.71 15.52 1997 3.27 4.68 3.24 3.58 0.72 15.49 1998 3.30 4.92 3.37 3.52 0.72 15.83 1999 3.21 4.94 3.36 3.50 0.66 15.67 2000 3.33 5.21 3.39 3.40 0.73 16.06 2001 3.12 4.85 3.27 3.29 0.93 15.46 2002 2.57 4.41 1.60 3.18 1.12 12.88

Notes (1) Limitation on Levies. Article 7, subsection 2 of the Washington State Constitution and the Revised Code of Washington (RCW), Chapter 84.52.050, 84.52.043, 84.55.010 (2) Real and Personal Property taxes are payable on or before February 15. Unpaid taxes become delinquent after April 30, unless tax is $50.000 or more and one-half is paid before April 30. In this case the second half is not delinquent until after October 31. (3) Tax rates are in dollars levied per thousand dollars of value. (4) This is an average rate based on total assessed value of cities and towns. Each entity has its own millage rate. (5) This is an average rate based on total assessed value of school districts. Each entity has its own millage rate. (6) This is an average rate based on total county rate less city, school, county and state rates. Each entity within this group has its own assessed property value and millage rate. (7) This is an average rate based on total tax levies and total assessed property for Snohomish County.

132 Statistical Tables

Table 6: Principal Taxpayers 2002 (1)

Taxpayer Business Assessed Percent of Total Valuation Assessed Valuation

Boeing Manufacturing $ 1,414,754,956 3.17% GTE/Verizon Utility 477,831,270 1.07% Kimberly Clark Manufacturing 189,475,351 0.42% Puget Sound Energy/Gas Utility 109,176,494 0.24% Avalonbay Communities Inc. Apartment 105,287,300 0.24% Fred Meyer Retail 98,736,122 0.22% Alderwood Mall LLC Property Mgmt 86,851,732 0.19% Fluke Electronics Corp Technology 84,997,425 0.19% BF Goodrich Aerospace Technology 81,576,426 0.18% Teachers Ins & Annuity Assn. Communication 75,359,992 0.17% Philips Ultrsound Technology 65,476,512 0.15% Carr America Realty Corp Business Parks 62,524,600 0.14% Premera Blue Cross Insurance 58,435,341 0.13% Albertsons Retail 52,907,030 0.12% Palmer Groth & Pietka Inc Apartment 42,698,100 0.10%

Grand Total $3,006,088,651 6.73%

Notes

(1) Snohomish County Assessor’s Annual Report for 2002 Taxes.

133 Statistical Tables

Table 7: Special Assessment Collections and Billings Last Ten Fiscal Years

Fiscal Collections Billings Year RID #11A RID24A RID30 RID #13 RID #11A RID24A RID30 RID #13 1993 $ 21,897 $ - $ - $ 252,520 $ 92,341 $ - $ - $ 491,298 1994 51,491 - - 165,842 60,120 - 179,964 383,685 1995 3,891 - 43,356 50,790 56,229 - 136,608 332,896 1996 3,844 - 8,632 78,491 52,384 - 127,976 254,405 1997 5,104 408,696 12,983 72,509 47,281 4,000,000 114,994 181,896 1998 21,673 101,769 26,370 42,247 25,608 3,489,535 88,624 139,649 1999 2,173 193,249 23,884 25,451 21,949 3,296,286 64,739 114,198 2000 3,658 271,851 10,148 34,647 18,291 3,024,435 54,591 79,551 2001 3,238 297,308 3,590 19,241 15,053 2,727,127 51,001 60,310 2002 5,339 204,650 5,186 28,614 9,026 2,522,477 45,815 34,224

134 Statistical Tables

Table 8: Limitation of Indebtedness For the Year Ended December 31, 2002

Total Taxable Property Value $49,262,949,977

I. Indebtedness For General Purposes Without A Vote

Legal Limit 1.5% Of Taxable Property Value 738,944,250

Indebtedness (Liabilities): GO Bonds $275,119,094 Less Assets Available in Debt Service Fund (24,915,917) Indebtedness Incurred 250,203,177

Margin Of Indebtedness Available Without A Vote $ 488,741,073

II. Indebtedness For General Purposes Without a Vote and With 3/5 Vote

Legal Limit 2.5% Of Taxable Property 1,231,573,749 Value (with and without a vote)

Indebtedness (Liabilities): GO Bonds $275,119,094 Less Assets Available (24,915,917) Indebtedness Incurred - Section II 250,203,177

Margin Of Indebtedness Available Without a Vote and With 3/5 Vote $ 981,370,572

135 Statistical Tables

Table 9: Ratio of Net General Obligation Bonded Debt to Assessed Value and Net General Obligation Bonded per Capita

Fiscal Population Assessed Gross Net Debt Debt Payable Net Ratio of Net Net Bonded Year Value Bonded Service From Enterprise Bonded Bonded Debt to Debt per Debt (1) Funds (2) Revenues (3) Debt (4) Assessed Value Capita 1993 507,900 $ 25,360,845,281 $ 44,115,290 $ 830,000 $ 26,400,000 $ 16,895,290 0.07% $ 33.26 1994 516,500 27,882,340,062 42,708,944 4,301,333 25,650,000 12,757,611 0.05% 24.70 1995 525,600 30,702,296,751 75,921,824 42,657,111 24,025,000 9,239,713 0.03% 17.58 1996 538,100 31,986,856,238 73,637,457 40,288,666 25,495,153 7,853,638 0.02% 14.60 1997 551,200 33,391,389,906 110,282,004 67,120,257 20,780,000 22,381,747 0.07% 40.61 1998 568,100 34,963,991,220 123,136,670 63,422,495 38,035,000 21,679,175 0.06% 38.16 1999 583,300 37,034,931,346 145,469,934 59,864,174 36,140,000 49,465,760 0.13% 84.80 2000 593,500 40,029,932,421 140,771,121 77,496,835 34,130,000 29,144,286 0.07% 49.11 2001 618,600 42,501,694,594 290,604,555 209,620,782 32,035,000 48,948,773 0.12% 79.13 2002 628,000 45,527,932,751 301,888,964 204,642,255 28,355,000 68,891,709 0.15% 109.70

Notes (1) Amount does not include special assessment and revenue bonds. (2) Amount available for repayment of general obligation bonds. (3) These amounts include the general obligation bonds that are being repaid from solid waste revenues. (4) Limited Tax General Obligation Bond Anticipation Notes (BANS) are included in the total net debt outstanding.

136 Statistical Tables

Table 10: Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total Expenditures Last Ten Fiscal Years

Fiscal Principal Interest Total Debt Total General Percentage of Debt Service (1) Year Service Expenditures To Total General Expenditures 1993 $ 1,560,000 $ 542,037 $ 2,102,037 $ 158,337,498 1.33% 1994 1,830,500 520,301 2,350,801 168,046,288 1.40% 1995 977,500 1,962,263 2,939,763 185,692,576 1.58% 1996 2,060,950 1,304,511 3,365,461 224,396,225 1.50% 1997 2,594,600 2,955,393 5,549,993 249,196,299 2.23% 1998 2,897,850 2,361,481 5,259,331 266,589,768 1.97% 1999 4,022,312 3,909,504 7,931,816 276,415,012 2.87% 2000 4,583,228 4,123,262 8,706,490 305,334,166 2.85% 2001 4,986,896 4,328,581 9,315,477 308,885,013 3.02% 2002 6,312,980 13,903,824 20,216,804 353,100,917 5.73%

Note (1) Includes general, special revenue, debt service funds, and capital projects.

137 Statistical Tables

Table 11: Computation of Direct and Overlapping Bonded Debt General Obligation Bonds December 31, 2002

Overlapping G.O. Debt

Net General Obligation Bonded Debt Outstanding $ 275,119,094

Overlapping G.O. Debt

School Districts $ 815,230,204 Hospital 28,470,000 Port District 11,700,000 Cities 129,804,720 Fire Districts 27,425,387 Water Districts 20,588,711 Flood Districts 1,547,202 Park and Recreation Districts 6,630,095 Library District 48,570,589 Snohomish County Public Facilities 8,600,000 Total Overlapping Debt $ 1,098,566,908

Total Direct and Indirect Overlapping Debt $ 1,373,686,002

138 Statistical Tables

Table 12: Demographic Statistics Last Ten Fiscal Years

Fiscal Population (1) (5) Per Capita School Unemployment Year Income (2) Enrollment (3) Rate (4) 1993 507,900 $ 20,828 93,975 6.7 1994 516,500 22,191 96,477 6.5 1995 525,600 22,754 99,491 5.5 1996 538,100 24,146 103,115 4.4 1997 551,200 26,098 104,875 3.5 1998 568,100 27,066 107,204 3.3 1999 583,300 27,815 108,604 3.7 2000 606,024 28,394 110,467 4.6 2001 618,600 29,460 111,876 4.5 2002 628,000 Unavailable 111,689 8.0

Notes (1) State of Washington Office of Financial Management, Forecasting. (2) US Department of Commerce, Bureau of Economic Analysis (3) State of Washington Department of Education. (4) State of Washington Employment Security Department Snohomish County only. (5) US Census Bureau

139 Statistical Tables

Table 13: Property Value, Construction, and Bank Deposits Last Ten Fiscal Years

Fiscal Assessed Value Personal County Construction (1) Residential And Building Permit Commercial Year Real Property Property New Buildings Commercial Valuations Bank Deposits (4) Residential Units Permits (2)(3) (In thousands) (in millions) 1993 $ 26 ,072,826,519 $ 1 ,809,513,543 5,525 4,661 $ 618, 098 $ 2, 108 1994 28 ,390,201,185 2 ,312,095,566 5,438 4,613 549, 604 3, 514 1995 29 ,668,423,386 2 ,318,432,852 5,259 4,400 561, 798 3, 702 1996 30 ,973,901,778 2 ,417,488,128 5,971 4,854 816, 679 3, 797 1997 32 ,018,607,698 2 ,229,306,440 6,897 5,382 826, 721 3, 750 1998 34 ,063,196,705 2 ,243,592,937 9,046 5,709 1, 079,301 3, 905 1999 36 ,996,486,746 2 ,243,513,873 7,452 5,289 945, 504 4, 303 2000 39 ,450,688,489 2 ,195,719,122 6,808 4,633 941, 844 4, 572 2001 42 ,391,095,463 2 ,243,239,705 5,633 4,231 771, 452 5, 053 2002 46 ,298,080,936 2 ,165,502,260 5,134 5,976 438, 363 5, 426

Notes (1) Includes incorporated and unincorporated areas. (2) Includes number of residential, commercial, industrial, public and private buildings. (3) Unincorporated only for 2002. (4) Bank deposits for each year: Federal Deposit Insurance Corporation

140 Statistical Tables

Table 14: Miscellaneous Statistics December 31, 2002

Miscellaneous Statistics Date of Incorporation 1861 County Seat Everett, Washington Form of Government Home Rule Charter Present Charter was adopted November, 1996

Number of Municipalities 20 Land Area 2,098 sq. miles Population (2002) 628,000 Population Density 289 per sq. mile Number of Votes Cast Last General Election 253,423 Number of Registered Voters 338,163 Percentage of Registered Voters Voting Number of County Park Properties 74-94%

County Park Acreage: (Acres)

Resource Conservancy 5,330 Athletic Fields 356 Resource Activity 2,231 Linear Trail 991 Special Use 540 Total County Park Property Acreage 9,449

Elected Positions: Executive 5 Council Positions Assessor Auditor Clerk Sheriff Treasurer Prosecuting Attorney

Bond Rating Aa2 (Moody’s) AA (Standard & Poor's)

141

Snohomish County, Washington

Compliance Section

Schedule of Federal Awards

Grantor/Program Title CFDA State Total Contract Number

U.S. Dept. of Agriculture

Indirect through Office of Superintendent of Public Instruction

National Lunch Program 01-02 10.555 31-002-9790 $ 73,820.82 National Lunch Program 02-03 10.555 31-002-9790 40,284.17 Total CFDA 10.555 $ 114,104.99

Indirect through State DSHS Pass through: Nutrition Program for the Elderly 10.570 0115-01484 $ - Nutrition Services Incentive Program 10.570 0215-12774 - Total CFDA 10.570 $ -

Federal Forest Grant 10.665 NA $ 56,345.00 Federal Forest Yield 10.665 none 892,505.05 Total CFDA 10.665 $ 948,850.05

Total U.S. Dept. of Agriculture $ 1,062,955.04

U. S. Dept. of Commerce Indirect: Snohomish River Estuary Acquisition 11.438 01-1298A $ 612,356.55 Upper Bear Creek Conservation Area 2 11.438 00-1786A 250,000.00 Total CFDA 11.438 $ 862,356.55

Direct - NOAA: Church Creek Watershed 11.463 NA17FZ2761 $ 2,302.99 Twin Creeks Recovery Project 11.463 NA17FZ2760 - Total CFDA 11.463 $ 2,302.99

Total U. S. Dept. of Commerce $ 864,659.54

U. S. Dept. of Housing and Urban Development

Indirect: 2001 City of Everett CDBG Grant 14.218 N/A $ 10,793.06 2002 City of Everett CDBG 14.218 NA 6,276.28 Direct: Community Development Block Grant 14.218 B-02-UC-53-0003 669,406.67 Community Development Block Grant Entitlement 14.218 B-98-UC-53-0003 - Community Development Block Grant Entitlement 14.218 B-00-UC-53-0003 2,337,159.07 Community Development Block Grant Entitlement 14.218 B-97-UC-53-0003 31,645.48 Community Development Block Grant Entitlement 14.218 B-01-UC-53-0003 2,693,280.23 Community Development Block Grant Entitlement 14.218 B-99-UC-53-0003 408,985.04 Community Development Block Grant Entitlement 14.218 B-95-UC-53-0003 - Community Development Block Grant Entitlement 14.218 B-96-UC-53-0003 - Total CFDA 14.218 $ 6,157,545.83 Emergency Shelter Grant 14.231 S-02-UC-53-0004 $ 5,138.40 142 Schedule of Federal Awards

Grantor/Program Title CFDA State Total Contract Number

HUD - ESGP 14.231 S-01-UC-53-0004 100,783.80 HUD - ESGP 14.231 S-98-UC-53-0004 - Total CFDA 14.231 $ 105,922.20

Supportive Housing Grant-Catholic Community Svcs 14.235 WA01B00-4005 $ 296.48 Supportive Housing Grant-Center for Battered Women 14.235 WA01B00-4004 1,127.30 Supportive Housing Grant-Volunteers of America 14.235 WA01B00-4003 1,219.98 Supportive Housing Program 14.235 WA01 B 90-4002 77,985.52 Supportive Housing Program 14.235 WA19 B 80-5002 46,885.75 Supportive Housing Program 14.235 WA01 B 90-4004 176,614.95 Supportive Housing Program 14.235 WA01B10-4002 15,981.08 Supportive Housing Program 14.235 WA01B10-4004 37,979.90 Supportive Housing Program 14.235 WA19 B 80-5001 70,894.70 Supportive Housing Program 14.235 WA19 F 15-0401 3,257.70 Supportive Housing Program 14.235 WA01B10-4001 24,846.29 Pass-through: Supportive Housing Grant-Catholic Community Svcs 14.235 WA01B00-4005 34,782.26 Supportive Housing Grant-Center for Battered Women 14.235 WA01B00-4004 99,936.85 Supportive Housing Grant-Volunteers of America 14.235 WA01B00-4003 72,067.62 Total CFDA 14.235 $ 663,876.38

Home Program 14.239 M-97-DC-53-0201 $ 50,000.00 Home Program 14.239 M-00-DC-53-0201 762,210.64 Home Program 14.239 M-99-DC-53-0201 100.00 Home Program 14.239 M-01-DC-53-0201 923,634.47 Home Program 14.239 M-02-DC-53-0201 176,823.61 Home Program 14.239 M-98-DC-53-0201 25,000.00 Total CFDA 14.239 $ 1,937,768.72

Total U. S. Dept. of Housing and Urban Development $ 8,865,113.13

U. S. Department of the Interior

Indirect through IAC: Countywide Riparian Plant Production Program 15.615 X-98085501-1 $ 2,215.75 Total CFDA 15.615 $ 2,215.75

Total U. S. Department of the Interior $ 2,215.75

U. S. Dept. of Justice Direct: JAIBG 16.523 0163-02482 $ 123,556.30 JAIBG 16.523 0263-14889 48,484.10 Total CFDA 16.523 $ 172,040.40

Indirect through State DSHS Juvenile Justice Program Development Unit 16.540 I-100-02301 $ 5,000.00 Juvenile Justice Program Development Unit 16.540 I-100-01502 5,000.00 Total CFDA 16.540 $ 10,000.00

143 Schedule of Federal Awards

Grantor/Program Title CFDA State Total Contract Number

Direct: Byrne Grant 16.579 F02-67402015 $ 139,119.14 Byrne Grant 2001-2002 16.579 F01-67401015 141,137.27 Total CFDA 16.579 $ 280,256.41

Direct: Planning Implementation and Enhancement Grants 16.585 2000-DC-VX-0050 $ 76,413.35 Pass-through Planning Implementation and Enhancement Grants 16.585 2000-DC-VX-0050 8,587.01 Total CFDA 16.585 $ 85,000.36

Direct: LOCAL LAW ENFORCEMENT BLOCK GRANT 16.592 2001-LB-BX-2230 $ - LOCAL LAW ENFORCEMENT BLOCK GRANT 16.592 2000-LB-BX-0269 87,208.41 LOCAL LAW ENFORCEMENT BLOCK GRANT 16.592 1999-LB-VX-8078 76,693.03 LOCAL LAW ENFORCEMENT BLOCK GRANT 16.592 2002-LB-BX-1788 3,263.48 Total CFDA 16.592 $ 167,164.92

Direct: COPS UNIVERSAL 16.710 1995ccwx0297 $ 41,359.19 COPS UNIVERSAL 16.710 1997UMWX1121 8,667.04 Total CFDA 16.710 $ 50,026.23

Indirect: WSP Eradication Agreement 16.999 C02-0764GSC $ 23,000.00

Total U. S. Dept. of Justice $ 787,488.32

U. S. Dept. of Labor

Indirect through DSHS: Title V Senior Community Service Employ. Program 17.235 0215-12774 $ 1,372.66 Title V Senior Community Service Employment Pgm. 17.235 0115-01484 4,512.66 Pass-Through Title V Senior Community Service Employ. Program 17.235 0215-12774 19,023.74 Pass-Through Title V Senior Community Service Employment Pgm. 17.235 0115-01484 40,379.90 Total CFDA 17.235 $ 65,288.96

Indirect: Welfare-to-Work - Federal 17.253 20-99-5466 $ 4,152.71 Pass-Through Welfare-to-Work - Federal 17.253 20-98-5466 69,310.39 Pass-Through Welfare-to-Work - Federal 17.253 20-99-5466 39,723.31 Total CFDA 17.253 $ 113,186.41

Indirect - Workforce Investment Act - Title IB Admin. Cost Pool 17.255 20-00-7043 $ - Indirect - Workforce Investment Act - Title IB Admin. Cost Pool 17.255 20-01-1043 - Pass-Through: 10% Discretionary-High Tech Incumbent Worker Pgm. 17.255 1046-01-854 - 10% Discretionary-System Enhancement 17.255 20-01-1046 8,123.60 Workforce Investment Act-Tile 1-B Admin Cost Pool 17.255 20-01-1043 - Workforce Investment Act-Title 1-B Admin Cost Pool 17.255 20-00-7043 - Workforce Investment Act-Title 1-B Adult 17.255 20-00-7041/20-01-1041 174,258.92

144 Schedule of Federal Awards

Grantor/Program Title CFDA State Total Contract Number

Workforce Investment Act-Title 1-B Dislocated Worker 17.255 20-00-7042/20-01-1042 123,497.27 Workforce Investment Act-Title 1-B Dislocated Worker 17.255 20-00-5048 - Workforce Investment Act-Title 1-B Youth 17.255 20-00-7040 - Workforce Investment Act-Title 1-B Youth 17.255 20-00-5044 - Workforce Investment Act-Title I-B Admin Cost Pool 17.255 20-00-5040 - Workforce Investment Act-Title I-B Adult 17.255 20-00-5041 - Total CFDA 17.255 $ 305,879.79

Indirect Workforce Investment Act-Title 1-B Adult 17.258 04-01-PY01 $ 3,187.72 Indirect Workforce Investment Act-Title 1-B Adult 17.258 04-02-FY02 8,624.28 Pass-Through Workforce Investment Act-Title 1-B Adult 17.258 04-01-PY01 64,016.50 Pass-Through Workforce Investment Act-Title 1-B Adult 17.258 04-02-FY02 - Total CFDA 17.258 $ 75,828.50

Indirect Workforce Investment Act-Title 1-B Youth 17.259 04-01-PY01 $ - Pass-Through Workforce Investment Act-Title 1-B Youth 17.259 04-01-PY01 204,687.42 Total CFDA 17.259 $ 204,687.42

Indirect Boeing Sub-project 17.260 20-99-5484 $ - Indirect Workforce Investment Act-Title 1-B Dislocated Worker 17.260 04-01-PY01 7,586.72 Indirect Workforce Investment Act-Title 1-B Dislocated Worker 17.260 04-02-FY02 9,435.00 Pass Through Boeing Sub-project 17.260 20-99-5484 121,047.21 Pass Through Workforce Investment Act-Title 1-B Dislocated Worker 17.260 04-01-PY01 32,553.91 Pass Through Workforce Investment Act-Title 1-B Dislocated Worker 17.260 04-02-FY02 - Total CFDA 17.260 $ 170,622.84

Direct: Project REACH 17.261 AF-12397-02-60 $ 5,020.70 HIDTA 2001 None I1PNWP504 $ 35,987.27 HIDTA 2002 None I2PNWP504 220,690.24 HIDTA 2002 None I2PNWP519 339,860.19 HIDTA Director 2001 None I1PNWP519 14,125.19

Indirect through State DSHS Northwest HIDTA Community Coalition None 7511-0 10,038.18 NW HIDTA Community Coalition Support None 8082-0 4,011.60

Pass-Through: NW HIDTA (Drug Court) None 8116-0 70,000.00 Northwest HIDTA Community Coalition None 7511-0 - NW HIDTA Community Coalition Support None 8082-0 25,948.75 Total HIDTA (no CFDA number) $ 720,661.42

Total U. S. Dept. of Labor $ 1,661,176.04

U. S. Dept. of Transportation

Direct: Federal Aviation Administration 20.106 3-53-0028-32 $ - Federal Aviation Administration 20.106 3-53-0028-34 1,624,899.98 Federal Aviation Administration 20.106 3-53-0028-25 21.09 145 Schedule of Federal Awards

Grantor/Program Title CFDA State Total Contract Number

Federal Aviation Administration 20.106 3-53-0028-27 245,960.43 Federal Aviation Administration 20.106 3-53-0028-30 84,977.80 Federal Aviation Administration 20.106 3-53-0028-31 103,260.00 Federal Aviation Administration 20.106 3-53-0028-35 - Federal Aviation Administration 20.106 3-53-0028-36 - Federal Aviation Administration 20.106 3-53-0028-33 377,737.04 Federal Aviation Administration 20.106 3-53-0028-28 368,290.90 Total CFDA 20.106 $ 2,805,147.24

Indirect through Washington State DOT: 128th Street HOV & 124th Street Bike Facs 20.205 STPUL-9931(005) $ 4,490.92 148th Street @ 35th Avenue 20.205 STPH-2580(001) LA4415 5,301.28 148th Street Improvements 20.205 STPUL-2580(002) LA4449 - 164th St. 20.205 PSTPUL-TA96(015) - 172nd St NE/27th Ave. NE RRXing 20.205 STPXP.0531((004) LA5208 52,061.25 292nd Street NW Railroad Crossing 20.205 RRP-2031 (065) LA-1710 755.05 35th - SR96 to Seattle Hill Rd 20.205 STPF-2575 (002) LA-2771 1,144,676.00 91st Avenue SE Railroad Crossing 20.205 STPXP-WARR(018) LA2637 73,128.39 212th/Knutson RR Xing Improvements 20.205 STPX-2031(093) 596.85 Airport Road H.O.V. 20.205 CM 9999 (155) LA-2218 - Chappell Bridge Seismic 20.205 BRS L311(004) 19,519.09 Countywide Arterial Planning 20.205 P-STPUL-TA96(346) 53,428.26 French Creek Bridge No. 13 20.205 BRS-D312 (003) LA-1965 32,891.58 Holly Dr Ped/Bike Improvements 20.205 CM-2553 (002) LA-4067 - Index Bridge #122 20.205 BROS-2031 (070) LA-1973 - Index Galena Road Earthquake Repairs 20.205 ER-0101(228) - Interurban Trail - Maple Rd Bridge 20.205 CM-2031 (079) LA-2542 19,633.12 Interurban Trail/124th St Overcrossing 20.205 CM-2031 (085) LA-3119 118,487.72 Jordan Road Overlay 20.205 STPR-L311(005) LA4466 1,215.99 Larch Way at Poplar Way Signal 20.205 STPH-2031(089) LA4389 166,680.00 Little Pilchuck Creek Bridge #601 20.205 BROS-2031(092) LA5216 372.45 Little Pilchuck Creek Bridge No. 268 20.205 BROS-2031 (071) LA-1974 - Little Pilchuck Creek Bridge No. 426 20.205 BROS-2031 (059) LA-1591 995,120.13 Lowell - Snohomish Rd - Relocation 20.205 ER-9601 (089) LA-3348 250.80 Lowell - Snohomish River Road - Perm Repairs 20.205 ER 9601 (097) LA-3524 34,195.63 Lowell-Snohomish River Trail 20.205 STPE-2616 (002) LA-2403 34,492.91 Machias Bridge #44 20.205 BRS-F310 (001) LA-1966 144,628.10 Marine Drive - Waterworks Signal 20.205 STPH-2686(001) LA4388 - Marine Drive Improvements 20.205 POMVIP-2686(002) 105,732.37 No. Lk. Stevens Bridge #125 20.205 BROS-2031 (083) LA-2835 201,747.93 OK Mill/Machias Rd Intersection 20.205 P-STPH-TA96 (177) LA-3591 - Pilchuck River Bridge #10 20.205 BRM-2631 (002) LA-2241 - Sauk River Bridge No. 414 20.205 BROS-2031(088) LA4307 33,537.39 Silverton Bridge #56 20.205 BHS-X310 (005) LA-3445 456,036.50 Skykomish River Slough Bridge #150 20.205 BROS-2031(091) 21,461.47 SNOCAP Study 20.205 STPUL-2031(094) LA5293 - South Lake Stevens Walkway 20.205 CM-2660(004) LA3896 - Swanson Road Bridge #80 20.205 BROS-2031 (073) LA-2031 31,638.63 Woods Creek Bridge No. 445 20.205 BROS-2031(087) LA3924 11,705.40 Woods Creek Bridge No. 6 20.205 BRS-D312 (002) LA-1594 66,966.55 Total CFDA 20.205 $ 3,830,751.76

146 Schedule of Federal Awards

Grantor/Program Title CFDA State Total Contract Number

Total U. S. Dept. of Transportation $ 6,635,899.00

U. S. Dept. of Energy

Indirect through DCTED: DOE Weatherization Assistance Program 81.042 F01-434-422 $ 128,407.24 DOE Weatherization Assistance Program 81.042 F02-434-422 164,319.07 Total CFDA 81.042 $ 292,726.31

Indirect 01 BPA LOW-INCOME WEATHERIZATION PROGRAM 81.999 F01-446-422 $ 126,409.68

Indirect through WA State Military Department Puget Sound Boulevard 83.544 MD-97-7358-039 $ 27,900.50 Reiter Road - Site 1 83.544 1361-DR-WA - Reiter Road - Sites 2 and 3 83.544 1361-DR-WA - Total CFDA 83.544 $ 27,900.50

Total U. S. Dept. of Energy $ 447,036.49

U. S. Dept. of Health and Human Services

Indirect through WA State DSHS Older Americans Act-Elder Abuse 93.041 0215-04316 $ 4,804.00 Pass Through Older Americans Act-Title 3D 93.043 0215-04316 $ 24,503.99

'01-'02 Regional Long Term Care Ombudsman Program 93.044 No Number Assigned $ 15,498.60 Older Americans Act-Title 3B 93.044 0215-04316 195,077.33 Older Americans Act-Title 3B SAMS 93.044 0215-04316 1,457.50 Pass ThroughOlder Americans Act-Title 3B 93.044 0215-04316 345,357.97 Total CFDA 93.044 $ 557,391.40

Older Americans Act-Title 3C-1 93.045 0215-04316 $ 33,194.11 Older Americans Act-Title 3C-2 93.045 0215-04316 17,238.00 Pass Through Older Americans Act-Title 3C-1 93.045 0215-04316 298,747.00 Pass Through Older Americans Act-Title 3C-2 93.045 0215-04316 155,142.00 Total CFDA 93.045 $ 504,321.11

Older Americans Act-Title 3E 93.052 0215-04316 $ 32,852.51 Older Americans Act-Title 3E Admin. 93.052 0215-04316 9,311.00 Pass Through Older Americans Act-Title 3E 93.052 0215-04316 106,793.24 Total CFDA 93.052 $ 148,956.75

Pass-Through PATH Homeless Mentally Ill 93.150 0163-01080 $ 139,169.27

Comm. Alcohol & Other Drug Svcs. & Prevention Svcs 93.558 7541-0 $ 35,372.94 Housing Support Services-EHA 93.558 No Number-EHA 6,250.00 Housing Support Svcs.-HASCO 93.558 None Assigned-HASCO 7,200.00 Total CFDA 93.558 $ 48,822.94

147 Schedule of Federal Awards

Grantor/Program Title CFDA State Total Contract Number

Indirect: Family Support Federal Share 93.563 75-1501-0-1-609 $ 1,591,532.00 Title IV-D (Clerk) 93.563 2110-80559 414,458.25 Title IV-D (Commissioners) 93.563 2110-80559 113,728.36 Total CFDA 93.563 $ 2,119,718.61

Indirect: 2002 LIHEAP Weatherization Assistance Program 93.568 F-02-431-422C $ 323,793.45 LIHEAP 2003 Weatherization 93.568 F03-431-422 111,478.89 Low-Income Home Energy Assistance Program 93.568 F-02-34002-081 1,151,481.32 Low-Income Home Energy Assistance Program 93.568 F-03-34003-081 506,130.83 Total CFDA 93.568 $ 2,092,884.49

Indirect Community Services Block Grant 93-569 F02-32102-026 $ 56,774.09 Indirect Community Services Block Grant 93-569 #F01-32101-026 40,731.31 Pass Through Community Services Block Grant 93-569 F02-32102-026 256,819.31 Pass Through Community Services Block Grant 93-569 #F01-32101-026 37,714.81 Total CFDA 93.569 $ 392,039.52

'01-'02 Regional Long Term Care Ombudsman Program 93.778 No Number Assigned $ 5,194.38 '02-'03 Regional Long Term Care Ombudsman Program 93.778 No Number Assigned 12,089.46 Adult Day Health 93.778 0215-12774 1,426.31 Adult Day Health 93.778 0115-01484 - Caregiver Training-DDD 93.778 0169-03285 - Caregiver Training-Federal Fund 93.778 0115-02259 - Comm. Alcohol & Other Drug Svcs. & Prevention Svcs 93.778 7541-0 35,766.65 Interpreter Services, Region 2 93.778 0263-14671 - Medicaid Transportation 93.778 9713-11662 - Nurse Services-DDD 93.778 0169-01575 - Personal Care-DDD (includes DDD BHP) 93.778 0169-01576 - Title XIX matched by SCSA 93.778 0215-12774 48,313.81 Title XIX matched by SCSA 93.778 0115-01484 55,335.18 Title XIX-(Federal Fund) 93.778 0115-01484 538,660.20 Title XIX-(Federal Fund) 93.778 0215-12774 643,067.56 Title XIX-Children's Administration 93.778 0115-01484 4.24 Title XIX-Children's Administration 93.778 0215-12774 190.40

Pass Through: Title XIX 93.778 0115-01484 - Title XIX 93.778 0215-12774 - Title XIX matched by SCSA 93.778 0114-01484 5,008.63 Title XIX matched by SCSA 93.778 0215-12774 5,647.53 Title XIX Caregiver Training DDD 93.778 0169-03285 - Title XIX Medicaid Transportation 93.778 9713-11662 - Basic Health Plan-Federal Fund 93.778 0215-10543 - Basic Health Plan-Federal Fund 93.778 21120171 - Title XIX Personal Care DDD/BHP 93.778 0169-01576 - Caregiver Trainings 93.778 0115-02259 - Interpreter Services Region 2 93.778 0263-14671 - Total CFDA 93.778 $ 1,350,704.35

148 Schedule of Federal Awards

Grantor/Program Title CFDA State Total Contract Number

IndirectCMH Admin./Res. Mgmt./Invol. Tx./E&T Admin. (FBG) 93.958 NSRSN-Snohomish-02 $ 68,679.58

Indirect Comm. Alcohol & Other Drug Svcs. & Prevention Svcs 93.959 7541-0 $ 139,011.79 Indirect ubstance Abuse Prevention Specialist Training 93.959 No Number AOD 3,030.00 Pass Through Comm. Alcohol & Other Drug Svcs. & Prevention Svcs 93.959 7541-0 536,655.77 Total CFDA 93.959 $ 678,697.56

Total U. S. Dept. of Health and Human Services $ 8,130,693.57

TOTAL EXPENDITURES OF FEDERAL AWARDS $ 28,457,236.88

NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

NOTE 1 - BASIS OF ACCOUNTING

The Schedule of Federal Awards is prepared on the same basis of accounting as the county's financial statements. The county uses the modified accrual basis for its governmental and fiduciary fund types and the accrual basis of accounting for the proprietary fund types.

NOTE 2 - PROGRAM COSTS

The amounts shown as current year expenditures represent only the federal portion of the program costs. Actual program costs, including the county's portion, may be more than shown.

149 Schedule of State and Local Awards

Grantor/ProgramTitle Contract Number Total

County Road Administration Board 51st Ave NE 3195-02 9615001 $0.00 Airport Way/Lowell Snohomish 3199-03 2414002 0.00 Dubuque Road 3196-02 9475302 0.00 Lowell Snohomish River Road and Airport Way 3199-02 9369301 557,218.99 Machias/OK Bridge #44 3197-06 9455501 0.00 Marine Drive 3193-03 9683001 225,086.20 OK Mill Road / Bridge #423 3100-02 9455503 0.00 67th Ave NE 3196-03 9688602 0.00 Total County Road Administration Board $782,305.19

Washington State Dept. of Community Trade and Economic Development 1997-1999 Energy Matchmakers Program(PSE) 97-439-432 $95,286.55 2001-2003 Energy Matchmakers -Match SO1-498-422 284,830.25 2001-2003 Energy Matchmakers-Cash 001-439-422 334,659.01 Emergency Shelter Assistance Program S-02-422031 19,095.71 Transitional Housing, Operating and Rent 02-416-020 2,192.97 Early Childhood Education & Assistance Program S02 33500 E14 456,880.95 Drug Prosecution Grant S02-67302004 42,090.55 STOP Grant F01-30301-036 28,206.09 STOP Grant F02-30302-036 8,338.25 Buildable Lands S01-62500-005 313,833.72 GMA Update s02-63000-161 52,535.20 Transitional Housing, Operating & Rent 03-416-020 1,891.82 Subtotal $1,639,841.07 Pass-Through Programs Early Childhood Education & Assistance Program S02 33500 E14 2,793,464.45 Emergency Shelter Assistance Program S-02-422031 388,508.78 Transitional Housing, Operating and Rent 02-416-020 87,535.44 Transitional Housing, Operating and Rent 03-416-020 87,922.06 Subtotal $3,357,430.73 Total Washington State Dept. of Community Trade and Economic Development $4,997,271.80

Washington State Department of Ecology Riparian Management C9900134 $0.00 MRC Forage Fish & Dungeness Crab G0200272 31,013.43 Shoreline Inventory and Outreach G0100138 0.00 Snoh/Stilly Restoration (Restoration Maintenance) CC9900134 64,850.00 French Creek Watershed Management Plan G9600288 0.00 Swamp Creek Illicit Discharge G9900145 35,217.63 MRC - NW Straits Project G0200032 10,000.00 Centennial Clean Water Fund-Citizen- Based G0100151 30,931.69 Household Hazardous Waste Collection & Disposal G0200248 926,125.00 150 Schedule of State and Local Awards

Grantor/ProgramTitle Contract Number Total

Litter and Illegal Dump Cleanup C02000051 0.00 School/City Electronics Procurement Policy & Recyc G0200354 88,850.00 Groundwater Mgt. Plan Implementation G0200031 $129,478.02 MRC - Northwest Straits Project G0300026 25,000.00 MRC-Northwest Straits Project G0300054 10,000.00 Total Washington State Department of Ecology $1,351,465.77

Washington State Department of Social & Health Services Caregiver Conference 0215-06806 $1,500.00 Caregiver Training-State Fund 0115-02259 0.00 Chore Personal Care 0115-01484 1,576.27 Community Team for Children Work Order #21003 50,079.00 Respite 0215-12774 36,742.06 Respite 0115-01484 33,640.72 SCSA 0115-01484 156,445.85 SCSA 0215-12774 64,561.55 State Family Caregiver Support 0115-01484 9,283.06 Title XIX-(State Fund) 0115-01484 467,130.10 Title XIX/Chore-(State Fund) 0215-12774 577,645.37 Comm. Alcohol & Other Drug Svcs. & Prevention Svcs 7541-0 571,386.74 Developmental Disabilities # 0163-03278 321,810.52 CMH Admin./ Resource Mgmt./ Invol. Tx./E&T Admin. NSRSN-Snohomish-02 1,215,378.18 Food Stamp Fraud 9912-80622 5,319.00 Diagnostic Juvenile Court Services 0163-02482 167,937.49 Secure Crisis Residential Center Service 721-28956 621,317.38 HB 3900 Community Corrections Program 0163-02482 231,827.40 AT RISK Community Corrections Program 0163-04581 697,963.35 CDDA Community Corrections Program 0163-04581 401,634.35 CJAA Community Corrections Program 0163-04581 234,700.74 Comm Juvenile Accountability Act State Qual Assur 0163-02482 47,795.58 SSODA Community Corrections Program 0163-04581 156,767.05

VOCA Grant 9963-40846, Amendment No. 2 33,972.52 Family Support State Share 75-1501-0-1-609 783,889.00 VOCA Grant 0263-14232 18,845.09 Services to Victims of Crime 0263-14232 0.00 Subtotal $6,909,148.37

Pass-Through Programs: Basic Health Plan-State Fund 21120171 0.00 Basic Health Plan-State Fund 0215-10543 0.00 Caregiver Training-State Fund 0115-02259 0.00 Chore Personal Care 0115-01484 0.00 Comm. Alcohol & Other Drug Svcs. & Prevention Svcs 7541-0 1,767,155.26 Title XIX/Chore-(State Fund) 0215-12774 0.00 Developmental Disabilities # 0163-03278 4,261,366.23 151 Schedule of State and Local Awards

Grantor/ProgramTitle Contract Number Total

CMH Admin./ Resource Mgmt./ Invol. Tx./E&T Admin. NSRSN-Snohomish-02 61,877.39 Respite 0215-12774 60,776.05 Respite 0115-01484 61,473.89 SCSA 0115-01484 255,005.61 SCSA 0215-12774 71,012.49 Senior Farmers Market Nutrition Project 0215-10001 10,000.00 State Family Caregiver Support 0215-12774 0.00 State Family Caregiver Support 0115-01484 18,387.93 Subtotal $6,567,054.85 Total Washington State Department of Social & Health Services $13,476,203.22

Washington State Department of Transportation 112th Street SE - SR99 to 3rd HLP-CC00002 $1,446,053.40 164th Street Improvements HLP-CC00(001) 656,669.47 Commuter Trip Reduction WSEO 96.13-08 142,802.20 County Arterial Preservation 2 527,241.64

Martha Lake Elementary OR96-SP01(035) LA-3824 1,442.62 Everett Vicinity Bridges Seismic - Stage 2 GCA3241 0.00 Coordinated Transportation #GCA3062 22,888.09 Granite Falls Bridge 102 Rehab BHM-X310(006) 0.00 Total Washington State Department of Transportation $2,797,097.42

Dept of Natural Resources Lake Cassidy Boardwalk and Dock 97-17 $0.00 Restoration at Ebey Slough AL97-11 896.76 Total Dept. of Natural Resources $896.76

Wash Treasurer's Office Death Investigations RCW 6850104 $68,864.23 Infant and Child Autopsy Cost RCW 6850104 0.00 Prosecuting Attorney N/A 58,652.88 Total Wash. Treasurer's Office $127,517.11

Interagency Committee for Outdoor Recreation Centennial Trail Phase I Stage II 92-362D/W-0597 -$3,116.01 Centennial Trail Phase II 96-1219D 39,418.04 Lake Goodwin Park 00-1362D 14,273.88 Lake Stevens Community Ball field 01-1143D 21,280.01 Snohomish Estuary Watertrail Trailheads 01-1054D 3,354.07 Whitehorse Community Playfield 98-1250D 23,539.71 Upper Bear Creek Conservation Area 00-1079A 250,000.00 DD6 Snohomish River Estuary Restoration 99-1740D 0.00 Ricci Island 00-1202A 126,285.71 Total Interagency Committee for Outdoor Recreation $475,035.41 152 Schedule of State and Local Awards

Grantor/ProgramTitle Contract Number Total

King County DNR and Snohomish County Parks Twin Creeks Recovery Project Waterworks $0.00

Office of the Administrator for the Courts Unified Family Court Pilot Project ICA-2002-059 $21,313.60 Advocate/Guardian Ad Litem (CASA/VGAL) Program CSC-2002-038 75,956.77 Total Office of the Administrator for the Courts $97,270.37

State of Washington Military Department Puget Sound Boulevard MD-97-7358-03 $27,900.50 Reiter Road - Site 1 EM10481-173 0.00 Reiter Road - Sites 2 and 3 EM10481-173 0.00 Total State of Washington Military Department $27,900.50

Transportation Improvement Board

112th St 9P-138(001)-4 9625019P $1,780,560.00 112th St-SR525 to SR99 9P-138(001)-3 9815129P 141,705.09 32nd St SE- Seattle Hill Rd to SR9 9P031-(011)-1 9835209P 2,411,378.63 148th St SW/SR99 to 52nd Ave W 8-1-031(007)-1 96301981 0.00 164th I-5 Ramps to Mill Creek C/L 9P-031(002)-6 0.00 164th Street SW - Spruce to Ash 9P-031(002)-5 9035489P 567,309.47 196th St SW 9P-140(001)-1 9125169P 0.00 196th St SW - 28th Ave 9P-140(001)-2 9125179P 0.00 204th St/44th Av to Cypress Way 8-1-031(P06)-1 96300681 0.00 228th St/Locust Way 9P-031(003)-4 9035519P 0.00 35th Av SE/SR96(132nd St SE) to Seattle Hill Rd 9P-031(010)-1 9825029P 1,203,684.17 35th Ave SE/Seattle Hill Rd Intersection 9P-031(010)-2 218,884.90 39th Avenue Realignment @ SR524 8-1-031(010)-1 65,798.99 51st Av NE - 108th to 122nd Pl NE 8-1-138(009)-1 98100981 0.00 88th Av NE 9P-031(007)-1 9235039P 0.00 88th St NE 9P-031(007)-2 9525029P 0.00 Interurban 124th Street Overcrossing 9P-031(004)-4 9325039P 1,516.39 Larch Way - 172nd St SE to 164th St SE 9P-031(P12)-1 982509P 0.00 Lundeen Parkway Extension 9P-031(005)-3 9125089P 0.00 Marine Drive - 19th Avenue to 7th Drive NW 8-1-031(008)-1 98100381 801,040.01 Meridian Street Extension 9P-031(005)-2 9125079P 0.00 SR525, SR99 to SR526 Ph2 9-P-138(002)-4 17,709.57 SR527-164th St. 9P-031(006)-4 9325059P 0.00

Total Transportation Improvement Board $7,209,587.22

Washington Dept of Fish and Wildlife Quilceda Allen Citizen Action Program G0000291 $17,970.24 Snohomish Lead Entity 38020218 53,667.00 Stillaguamish Lead Entity 38020217 79,500.00

153 Schedule of State and Local Awards

Grantor/ProgramTitle Contract Number Total

Total Washington Dept of Fish and Wildlife $151,137.24

WA State Department of Agriculture Our Water, Our World IA 02-76-07 $0.00 Noxious Weeds Interagency Agreement IA-02-11-05 74,092.97 Total WA State Department of Agriculture $74,092.97

WA State Dept of Corrections Twin Rivers Contract COCO5388 $64,081.98

Twin Rivers Contract COCO5388 Amendment No. 1 62,849.17 I/G Agreement for Expanded Jail CSEC5775 0.00 Total WA State Dept of Corrections $126,931.15

WA State Dept of Health Furthering EMS Program 19100 $1,200.00

Washington Traffic Safety Commission WTSC Special DUI Grant No Contract Issued $3,431.46 Snohomish County Drinking Driver Countermeasure 03ST-12 38,265.00 Total Washington Traffic Safety Commission $41,696.46

Other Assistance

Lakewood School District Community Mobilization-Youth RAP 2001-2002 No Contract # $844.87 Community Mobilization-Youth RAP 2002-2003 No Contract # 1,998.62

City of Seattle Senior Farmers Market Nutrition DMO2-5117 0.00

Sound Transit Sound Transit None 20,296.00

South King County Multi-Service Center '01-'02 Regional Long Term Care Ombudsman Program No Number Assigned 32,565.00

Interlocal Impact N/A 26,413.16 Evidence Facility N/A 266,847.50 City of Everett N/A 189,311.00 Snohomish County Tomorrow N/A 57,017.00 Transportation Mitigation N/A 604,005.36 Memorial Stadium N/A 22,500.00

Total Other Assistance $1,221,798.51

Total State and Other Assistance $32,959,407.10

154 Schedule of State and Local Awards

NOTES TO THE SCHEDULE OF EXPENDITURES OF STATE AND LOCAL AWARDS

NOTE 1 - BASIS OF ACCOUNTING

The Schedule of State and Local Awards is prepared on the same basis of accounting as the county's financial statements. The county uses the modified accrual basis for its governmental and fiduciary fund types and the accrual basis of accounting for the proprietary fund types.

NOTE 2 - PROGRAM COSTS

The amounts shown as current year expenditures represent only the state portion of the program costs. Actual program costs, including the county's portion, may be more than shown.

155