Snohomish County, Washington
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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 over- all 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