City of Everett, Washington
20COMPREHENSIVE18 ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2018
CITY OF EVERETT, WASHINGTON
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED
DECEMBER 31, 2018
FINANCE DIRECTOR-TREASURER SUSY HAUGEN
PREPARED BY
DEPARTMENT OF FINANCE
FINANCE DIRECTOR-TREASURER Susannah J. Haugen, MSF
BUDGET MANAGER Rae Ann Weighter, CPA
ACCOUNTING MANAGER Young M. Lee, CPA
SENIOR FINANCIAL ANALYST MARY LAMB, CPA
SENIOR FINANCIAL ANALYST WAI POON
FINANCIAL ANALYST Tatiana Sarmiento
FINANCIAL ACCOUNTANT Edward Eugenio
ACCOUNTING TECHNICIAN Jeffrey Coomber Jim Souder
For comments or questions, contact: City of Everett, Accounting Division 425.257.8604
CITY OF EVERETT INTRODUCTORY SECTION
TABLE OF CONTENTS
INTRODUCTORY SECTION PAGE Table of Contents ...... i Letter of Transmittal ...... 1 Principal Officials ...... 6 Organization Chart ...... 7 Certificate of Achievement for Excellence in Financial Reporting ...... 8
FINANCIAL SECTION Independent Auditor's Report ...... 9 Management’s Discussion and Analysis ...... 12 Basic Financial Statements Government Wide Financial Statements: Statement of Net Position ...... 25 Statement of Activities ...... 26 Fund Financial Statements: Balance Sheet - Governmental Funds ...... 28 Reconciliation of the Balance Sheet – Governmental Funds to the Statement of Net Position ...... 29 Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds ...... 30 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities ...... 31 Statement of Net Position – Proprietary Funds ...... 32 Statement of Revenues, Expenses, and Changes in Fund Net Position – Proprietary Funds ...... 33 Statement of Cash Flows – Proprietary Funds ...... 34 Statement of Fiduciary Net Position – Fiduciary Funds ...... 36 Statement of Changes in Fiduciary Net Position – Fiduciary Funds ...... 37 Notes to the Financial Statements ...... 38 Required Supplementary Information
Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual General Fund ...... 84 Note A – Explanation of Difference between Budgetary Revenues and Expenditures and GAAP Revenues and Expenditures ...... 85 Pension Funds ...... 86 Other Post Employment Benefit Funds ...... 93
Combining and Individual Fund Statements and Schedules
Governmental Funds: Combining Balance Sheet – Nonmajor Governmental Funds ...... 95 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances – Nonmajor Governmental Funds ...... 96 Combining Balance Sheet – Nonmajor Special Revenue Funds ...... 97 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances – Nonmajor Special Revenue Funds ...... 101 Combining Balance Sheet – Nonmajor Debt Service Funds ...... 105
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FINANCIAL SECTION (continued) PAGE
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances – Nonmajor Debt Service Funds ...... 106 Combining Balance Sheet – Nonmajor Capital Project Funds ...... 107 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances – Nonmajor Capital Project Funds ...... 109
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Parks & Recreation Fund ...... 111 Library Fund ...... 112 Municipal Arts Fund ...... 113 Conference Center Fund...... 114 General Government Special Projects Fund ...... 115 Street Improvement Fund ...... 116 Streets Fund ...... 117 Motor Vehicle Equipment Replacement Fund ...... 118 Hotel/Motel Tax Fund ...... 119 Cumulative Reserve Real Property Acquisition Fund ...... 120 Property Management Fund ...... 121 Cumulative Reserve Parks Fund ...... 122 Senior Center Reserve Fund ...... 123 Animals Fund ...... 124 Cumulative Reserve Library Fund ...... 125 Emergency Medical Services Fund ...... 126 Criminal Justice Fund...... 127 Traffic Mitigation Fund...... 128 Transportation Benefit District Fund ...... 129 Contingency Reserve Fund ...... 130 Everett CDE LLC Fund ...... 131 CHIP Loan Program Fund ...... 132 Community Development Block Grants Fund ...... 133 Bond Redemption Fund ...... 134 LID Guaranty Fund ...... 135 Consolidated LID Bond Redemption Fund ...... 136
Proprietary Funds: Combining Statement of Net Position – Nonmajor Enterprise Funds ...... 137 Combining Statement of Revenues, Expenses, and Changes in Fund Net Position – Nonmajor Enterprise Funds ...... 138 Combining Statement of Cash Flows – Nonmajor Enterprise Funds ...... 139 Combining Statement of Net Position – Internal Service Funds...... 141 Combining Statement of Revenues, Expenses, and Changes in Fund Net Position – Internal Service Funds ...... 143 Combining Statement of Cash Flows – Internal Service Funds ...... 145
Fiduciary Funds: Combining Statement of Fiduciary Net Position – Trust Funds ...... 147 Combining Statement of Fiduciary Net Position – Agency Funds ...... 148 Combining Statement of Changes in Fiduciary Net Position –Trust Funds ...... 149 Statement of Changes in Assets and Liabilities – Agency Funds ...... 150
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STATISTICAL SECTION PAGE
Statistical Section Overview ...... 151 Financial Trends: Net Position by Component – Last Ten Fiscal Years ...... 152 Changes in Net Position – Last Ten Fiscal Years ...... 153 Fund Balances of Governmental Funds – Last Ten Fiscal Years ...... 156 Changes in Fund Balances of Governmental Funds – Last Ten Fiscal Years ...... 157 General Governmental Tax Revenues by Source - Last Ten Fiscal Years ...... 158 Revenue Capacity: Water Produced and Consumed & Wastewater Treated – Last Ten Fiscal Years ...... 159 Annual Tap Sales - Last Ten Fiscal Years ...... 160 Number of Water and Sewer Customers by Type - Last Ten Fiscal Years ...... 161 Water and Sewer Rates – Last Ten Fiscal Years ...... 162 Largest Water/Sewer Customers – Current Year and Nine Years Ago ...... 163 Taxable Assessed Value and Estimated Actual Value of Property – Last Ten Fiscal Years ...... 164 Property Tax Levies and Collections - Last Ten Fiscal Years ...... 165 Direct and Overlapping Property Tax Rates – Last Ten Fiscal Years ...... 166 Principal Property Tax Payers – Current Year and Nine Years Ago ...... 167 Debt Capacity: Ratios of Outstanding Debt by Type – Last Ten Fiscal Years ...... 168 Ratios of General Bonded Debt Outstanding – Last Ten Fiscal Years ...... 169 Direct and Overlapping Governmental Activities Debt ...... 170 Legal Debt Margin Information – Last Ten Fiscal Years ...... 171 Pledged-Revenue Coverage – Last Ten Fiscal Years ...... 172 Demographic and Economic Information: Demographic and Economic Statistics – Last Ten Fiscal Years ...... 173 Principal Employers – Current Year and Nine Years Ago ...... 175 Operating Information: Full-Time Equivalent City Government Employees by Function – Last Ten Fiscal Years ...... 176 Operating Indicators by Function/Program – Last Ten Fiscal Years ...... 177 Capital Asset Statistics by Function/Program – Last Ten Fiscal Years ...... 180
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PAGE IV 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT
June 26, 2019
Ms. Cassie Franklin, Mayor and Everett City Council City of Everett Everett, Washington
Dear Mayor Franklin and City Council Members: The City of Everett Comprehensive Annual Financial Report (CAFR) for the fiscal year ended December 31, 2018, is hereby submitted.
The CAFR consists of management’s representations concerning the finances of the City of Everett (City). Consequently, management assumes full responsibility for the completeness and reliability of the information presented in this report. To provide a reasonable basis for making these representations, City management has established a comprehensive internal control framework that is designed both to protect the government’s assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the City’s financial statements in conformity with Generally Accepted Accounting Principles (GAAP). Because the cost of internal controls should not outweigh their benefits, the City’s comprehensive framework of internal controls is designed to provide reasonable, rather than absolute, assurance that the financial statements will be free from material misstatement.
The City’s financial statements have been audited by the Washington State Auditor’s Office. The independent auditor issued an unmodified (“clean”) opinion that the City of Everett’s financial statements, for the fiscal year ended December 31, 2018, are fairly presented in conformity with GAAP. The independent auditor’s report is presented as the first component of the financial section of this report.
The independent audit of the City’s financial statements is part of a broader, federally mandated “Single Audit” designed to meet the special needs of federal grantor agencies. The standards governing Single Audit engagements require the independent auditor to report not only on the fair presentation of Finance Department the financial statements, but also the audited government’s internal controls and compliance with legal requirements, with special emphasis on internal 2930 Wetmore Ave Suite 9H Everett, WA 98201 controls and legal requirements involving the administration of federal awards. The City’s Single Audit Report is issued separately and is available upon request. 425.257.8700 425.257.8607 fax Another state mandate requires the Washington State Auditor’s Office to perform additional tests of compliance with state laws and regulations as everettwa.gov required by the Revised Code of Washington (RCW) 43.09.260. This statute requires the State Auditor to inquire as to whether the City complied with the laws and the Constitution of the State of Washington, the City’s own CITY OF EVERETT INTRODUCTORY SECTION
ordinances, and the requirements of the State Auditor's Office. The City’s State compliance report is also available separately upon request.
GAAP require that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of the Management’s Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The City’s MD&A can be found immediately following the independent auditor’s report.
THE CITY OF EVERETT AND ITS SERVICES The City of Everett was incorporated on May 4, 1893. Located at the mouth of the Snohomish River, Everett is 28 miles north of Seattle and 85 miles south of the Canadian border. The City, built along the shores of Port Gardner Bay, encompasses roughly 42 square miles of land and is bordered by 10 miles of freshwater and 11 miles of saltwater shoreline. The City currently serves a population of 111,200.
Everett operates under a Mayor-Council form of government. Under its charter, it has all powers granted to like cities by the Constitution and laws of the State of Washington. The City is a general- purpose governmental entity and provides the full range of municipal services allowed by statute or charter. These services include police, fire, emergency medical, street maintenance, planning and zoning, libraries, parks and recreation, and general administrative services. In addition to its general government services, the City operates five enterprises: water and sewer utility, solid waste (recycling) utility, two golf courses, a transit system, and a parking garage.
The City also includes, as part of its reporting entity, the City of Everett CDE LLC, whose purpose is to help alleviate poverty and incentivize investments into low-income community census tracts, and the Everett Public Facilities District (EPFD), a municipal corporation of the State of Washington, which operates and maintains the Angel of the Winds Arena. Additional information on these separate legal entities can be found in Note 1A in the Notes to the Financial Statements.
The annual budget serves as the foundation for the City’s financial planning and control. The City Council is required to adopt a final budget prior to the start of the ensuing fiscal year and prior to the expenditure of any City funds. Budgetary controls are maintained to ensure compliance with legal provisions embodied in the annual appropriated budget. With the exception of construction funds, which receive project-life budget authority through plans and systems ordinances, activities of all City funds are included in the annual budget process. A budget increase or decrease to a fund must be authorized by the City Council via ordinance, while appropriations within a fund may be moved internally with the Mayor’s approval.
LOCAL ECONOMY We look for the Puget Sound Region’s economy to continue on a modestly upward trend in 2019. Economists predict that the region’s taxable retail sales, employment, and personal income will increase by 4.7 percent, 1.8 percent, and 5.0 percent, respectively.
Construction activity in Everett registered a slight uptick from 2017, but did not return to the higher levels experienced in 2015 and 2016. The forecast looks for the growth trend to continue to be moderate over the next few years.
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The Boeing Company, along with ancillary companies that provide goods and services to Boeing, has long played an important role in the local economy. Consequently, Boeing’s production cycle has a significant impact on both City revenues and the state of the local business community. The following chart illustrates Boeing’s historical airplane deliveries over the past ten years. Boeing delivered 43 more planes in 2018 than in 2017.
BOEING PLANE DELIVERY HISTORY 806 763 762 748 725 637 601 479 474 461
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 In addition to the 747, 767 tanker, 777, and 787 plane models, Boeing will build the next generation 777x at the Everett plant. Construction on new facilities to house this activity is complete. This important decision will help secure Boeing’s continued presence and the future of the aerospace industry in the region for years to come.
LONG-TERM FINANCIAL PLANNING The City uses a five-year forecasting model to plan for future budgetary impacts. On the expense side of the City’s budget, maintaining a competitive compensation and benefits package in order to attract and retain a high quality workforce stands out as a challenge. On the revenue side, areas of concern include property tax growth restrictions and legislated tax shifts.
The City also maintains long-term capital planning models for both the general government and its enterprise funds. General government capital programs include Capital Improvement Program (CIP) 1, which focuses on major repairs and replacements for existing general government structures; CIP 2, which is dedicated to paying debt service on the construction of the Everett Events Center; CIP 3, which funds park and street improvements, and CIP 4, which accumulates funding for facility expansions or new acquisitions. The City’s enterprise activities, which includes the Water and Sewer Utility, Everett Transit, and Golf also use long-term capital models to ensure that resources are available to maintain critical systems and expand capacity as required.
The City continued annual contributions to the LEOFF 1 police and fire pension and OPEB (other post- employment benefits) funds in the 2019 budget. The target year to achieve full funding of these obligations is 2030 – nearly three decades before obligations are complete.
RELEVANT FINANCIAL POLICIES City policy requires the regular monitoring and reporting of revenues and expenditures to Administration and City Council. This regular monitoring allows the City to take proactive measures in the event that the economy underperforms.
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The City continues to adhere to its General Government Fund Balance Policy, adopted in 2004, which limits annual operating expenses to annual operating revenues, and targets the General Government Fund balance at 20 percent of the annual revenue forecast. Part of this policy states that revenues in excess of operating expenditures may be transferred to a capital reserve, long-term obligation, or debt service fund.
MAJOR INITIATIVES Major initiatives include:
Youth Gun Violence and Gang Reduction
• A firearm safety campaign was launched in 2018, through which more than 200 free gunlocks were distributed to lawful gun owners in Everett. • Two new prevention and intervention programs for at-risk youth and their families were developed: Pathways for Adolescent Youth and a multi-disciplinary Positive Outreach Intervention Team. • A new Gang Response Unit was implemented in the Police Department Safe Streets
• The City partnered with Cocoon House, Hopeworks, and Catholic Community Services to establish three new supportive housing facilities in Everett. • The City partnered with Bridgeways to help connect individuals with employers. Community Engagement
• In spring of 2019, the City will offer its second Spanish-language Community Emergency Response Team class and inaugural Everett Community Police Academy. • The City is transitioning to district elections for its City Council positions, which was approved by voters in 2018. Economic Development
• The City Council adopted the new Metro Everett Plan, which will prove tools and incentives for development in the City’s core. • City leaders continue to advocate on behalf of Naval Station Everett, which is a valued community member and strategic asset for our county. • The City will collaborate with the Everett Station District Alliance to establish a Business Improvement Area around Everett Station. Mobility and Transportation
• The City will begin land-use planning for the two light-rail stations destined for southwest Everett, which will connect light rail to our manufacturing center. • Everett Transit introduced two new electric busses in 2018 and plans to have 18 more on the road by 2022. Each one is estimated to save 10,000 gallons of diesel emissions per year • The Grand Avenue Park Bridge will open to pedestrians in 2020. This new bridge will carry stormwater off the bluff and provide a new way to access the waterfront.
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Education and Workforce Development
• The City is partnering with the Everett School District in a summer intern program. This program will provide high school students with real-world experience at Everett-area businesses. • The City will continue to support Everett Community College and WSU as they work to expand their capacity to meet the educational needs of our community. AWARDS AND ACKNOWLEDGEMENTS The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Everett for its comprehensive annual financial report for the year ended December 31, 2017. This was the 21st consecutive year that the City has achieved this prestigious award. In order to be awarded a certificate of achievement, the City must publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements.
A certificate of achievement is valid for a period of one year only. We believe that our current comprehensive annual financial report continues to meet the Certificate of Achievement Program’s requirements and we are submitting it to the GFOA to determine its eligibility for another certificate.
The preparation of this Comprehensive Annual Financial Report was made possible by the dedicated service of the entire staff of the Finance Department. The efforts of the Accounting Division are especially instrumental in the compilation of the information required for preparing this report. All members of the department are to be commended for their consistent dedication to excellence in local government finance. It is to their credit that the citizens of the City of Everett can rely on this report as the definitive discussion of all City financial operations.
Sincerely,
Susy Haugen Finance Director-Treasurer
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CITY OF EVERETT
PRINCIPAL OFFICIALS
Elected Officials Term Expires Mayor ...... 12/31/21 ...... Cassie J Franklin City Councilmembers: Position No. 1 ...... 12/31/21 ...... Paul Roberts Position No. 2 ...... 12/31/21 ...... Jeff Moore, President Position No. 3 ...... 12/31/21 ...... Scott Murphy Position No. 4 ...... 12/31/19 ...... Liz Vogeli Position No. 5 ...... 12/31/19 ...... Scott Bader Position No. 6 ...... 12/31/19 ...... Brenda Stonecipher Position No. 7 ...... 12/31/19 ...... Judy Tuohy
Appointed Officials
Chief of Staff ...... Lyle Ryan Deputy Mayor ...... Nick Harper Executive Director ...... Paul Kaftanski Government Affairs Director ...... Bob Bolerjack Economic Development Director ...... Lanie McMullin Communications Director ...... Meghan Pembroke Public Health & Safety Director ...... Hil Kaman Chief of Police ...... Dan Templeman City Attorney...... James D. Iles Fire Chief ...... Tim Key Information Technology Director ...... Steven Hellyer Labor Relations/Services Director ...... Sharon DeHaan Library Director...... Eileen Simmons Parks & Recreation Director ...... Lori Cummings Planning and Community Development Director...... Allan Giffen Public Works Director ...... Paul Kaftanski Transportation Services Director ...... Tom Hingson City Clerk ...... Sharon Fuller Finance Director-Treasurer ...... Susannah Haugen
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MANAGEMENT’S DISCUSSION AND ANALYSIS
This section of the City of Everett’s annual financial report provides a narrative overview of the City’s financial activities for the fiscal year ended December 31, 2018. The intent of this discussion and analysis is to review the City’s financial performance as a whole. Please read it in conjunction with the Letter of Transmittal, the Financial Statements, and the Notes to the Financial Statements.
2018 FINANCIAL HIGHLIGHTS
• At December 31, 2018, the City’s net position, the amount by which total assets and deferred outflows exceed total liabilities and deferred inflows, totaled $965 million. Of this amount, $771.6 million, or 80%, is invested in capital assets that support the activities of the City. Of the remaining net position, $112 million is unrestricted and may be used to meet the City’s ongoing obligations.
• The net position of governmental activities is $435 million, a decrease of $21.5 million, or 5% from 2017. The decrease is due to a prior period adjustment of minus $41.7 million from the implementation of GASB Statement No 75 and explained in Note 1B. Before the prior period adjustment, net position increased $20 million or 4% over 2017.
• The net position of business-type activities is $530.1 million, which represents an increase of $25.8 million, or 5% over 2017. Growth is due primarily to increases in charges for services, an increase in sales tax revenue, and increased interest revenue arising from market gains over the year.
OVERVIEW OF THE FINANCIAL STATEMENTS
The minimum requirements of the City’s annual financial report include the Management’s Discussion and Analysis (MD&A), the basic financial statements, and required supplementary information. This discussion and analysis provides an overview of the City’s basic financial statements, which consist of three components: 1) government- wide financial statements, 2) fund financial statements, and 3) notes to the financial statements.
In addition to the required components, the City’s annual report includes other voluntary supplementary information. The additional supplementary information includes a section with combining statements that provides details about the City’s non-major funds and internal service funds -- all of which are added together and presented in single columns in the basic financial statements.
BASIC FINANCIAL STATEMENTS
GOVERNMENT-WIDE FINANCIAL STATEMENTS Government-wide financial statements provide readers with a broad overview of the City’s finances in a manner similar to a private-sector business. They provide both short-term and long-term information about the City’s financial status as a whole.
The government-wide statements distinguish between functions of the City that are principally supported by taxes (referred to as "governmental activities") from functions that are intended to recover all or a significant portion of their costs through user fees and charges (referred to as "business-type activities"). The City also includes the Everett Public Facilities District (EPFD) as a discretely presented component unit in its report. A component unit is a governmental unit over which the City can exercise influence and/or may be obligated to provide a financial subsidy. The EPFD is presented in a separate column in the government-wide statements. This presentation allows users of the government-wide financial statements to focus on the primary government as well as address the City’s relative relationship with the EPFD.
The Statement of Net Position presents information on all of the City’s assets, deferred outflow of resources, liabilities, and deferred inflow of resources, with the difference between assets and outflows minus liabilities and inflows reported as net position. This statement combines and consolidates governmental funds’ current financial resources (short-term spendable resources) with capital assets and long-term obligations. The Statement of Net position serves a purpose similar to that of the Balance Sheet of a private-sector business. Over time, increases or decreases in net position may serve as one indicator of whether the financial position of the City is improving or deteriorating.
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The Statement of Activities presents information on the net cost of each governmental and business-type activity as well as information on how the government's net position changed during the fiscal year. This statement also separates program revenue (revenue generated by specific activities through charges for services, grants, and contributions) from general revenue (revenue provided by taxes and other sources not tied to a particular activity). By separating program revenue from general revenue, users of the financial statements can identify the extent to which each activity relies on taxes for funding.
All changes in net position are reported using the accrual basis of accounting, which is similar to the accounting used by private-sector businesses. The accrual basis of accounting requires that revenues are reported when earned and expenses are reported when incurred, regardless of the timing of when cash is received or paid. For instance, uncollected taxes and unpaid vendor invoices for items received in the current fiscal year are included in the statement of activities as revenue and expense, even though the cash associated with these items will not be received or distributed until future fiscal periods.
FUND FINANCIAL STATEMENTS While the government–wide statements look at the City as a whole and focus on types of activities (general government versus business-type activities), the fund financial statements provide a more detailed look at the City’s individual major funds and combined fund types.
A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City uses funds to ensure and demonstrate fiscal accountability and compliance with finance-related legal requirements. The City’s funds fall into three types: governmental funds, proprietary funds, and fiduciary funds.
Governmental funds account for most of the City’s tax-supported activities and are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, the focus of governmental fund financial statements is on near-term inflows and outflows of spendable resources and on balances of spendable resources available at the end of the fiscal year. Such information is useful in evaluating whether there are more, or less, financial resources that can be spent in the near future to finance City services. Approximately 20% of total governmental fund balances is considered nonspendable and not available to finance City services in the near future. Nonspendabe balances consist mainly of loans receivable from the component unit, Everett Public Facilities District.
The Governmental Fund Balance Sheet and the Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balances present separate columns of financial data for the General Fund and the Capital Improvement Reserve Fund. These are the City’s major governmental funds. Data from the remaining governmental funds are combined and presented in a single, aggregated column in the fund statements. Individual fund data for each of the non-major governmental funds is provided as combining statements following the basic financial statements.
Because the focus of governmental fund financial statements is narrower than that of the government-wide financial statements, it is useful to compare information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. This gives the reader a better understanding of the long-term impact of the government's near-term financing decisions. Both the Governmental Fund Balance Sheet and the Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balances provide a reconciliation to the governmental activities column in the government-wide statements to facilitate this comparison.
The City maintains budgetary controls over its governmental funds. Budgetary controls ensure compliance with legal provisions embodied in the annual appropriated budget. Governmental fund budgets are established in accordance with state law and are adopted on a fund level. General Fund budget variances are reviewed later in this discussion and analysis.
Proprietary funds are used to account for the City’s business-type activities where all, or part, of the costs of activities are supported by fees and charges that are paid directly by those who benefit from the activities. The fund level statements provide the same type of information as the government-wide financial statements, only in more detail, since both apply the accrual basis of accounting. In comparing the total assets and total liabilities between the two statements, you will notice only slight differences. One notable difference is that the "due from other funds" (asset) and the "due to other funds" (liability) are combined in a single line called “Internal balances” in the assets section of the government-wide Statement of Net Position.
The City reports two types of proprietary funds: enterprise and internal service funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. Internal
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service funds are used to report activities that provide supplies and services to various City departments and to accumulate and allocate the associated costs of providing these supplies and services to the various functions. The revenues and expenses of internal service funds that are duplicated in other funds are eliminated in the government- wide statements. The net difference between revenues and expenses is allocated to other funds and becomes the only reconciling item between government-wide financial statements and Proprietary Funds Statement of Net Position and Statement of Revenues, Expenses, and Changes in Fund Net Position. Because the internal service funds primarily benefit governmental, rather than business-type activities, the internal service funds are aggregated and included within governmental activities in the government-wide Statement of Net Position.
The Proprietary Fund Statement of Net Position and the Proprietary Fund Statement of Revenues, Expenses, and Changes in Fund Net Position present separate columns of financial data for the Water and Sewer Utility Fund and the Transit Fund. These are the City’s major enterprise funds. Data from the remaining enterprise funds are combined and presented in a single, aggregated column in the fund statements. Individual fund data for each of the non-major enterprise funds, as well as the internal service funds, are provided in combining statements following the basic financial statements.
Fiduciary Funds are used to account for resources held by the City in a trustee capacity, or as an agent for outside individuals or private organizations. Fiduciary funds are not reported in the government-wide financial statements because the resources of those funds are not available to support the City’s own operations. The City’s fiduciary activities are reported in a separate Statement of Fiduciary Net position and a Statement of Changes in Fiduciary Net Position as part of the basic financial statements.
NOTES TO THE FINANCIAL STATEMENTS The notes provide additional information that is essential to a full understanding of the data provided, and are an integral part of the government-wide and fund financial statements.
OTHER INFORMATION In addition to the basic financial statements and accompanying notes, this report contains certain required supplementary information concerning the City’s Fire and Police Pension Funds and Other Post Employment Benefit Funds. Information is also provided for the City’s participation in state retirement plans.
The combining statements referred to earlier for non-major governmental and enterprise funds, as well as internal services funds, are presented immediately following the required supplementary information.
GOVERNMENT-WIDE FINANCIAL ANALYSIS
As noted earlier, changes in net position over time may serve as a useful indicator of a government's financial position. The City's total net position at December 31, 2017, was $960.7 million. At December 31, 2018, the total net position was $965 million. As the following chart illustrates, the City’s net position was relatively unchanged from 2009 through 2013, grew through 2017 and remained stable in 2018.
City's Total Net Position (in millions) 1000
800
600
400 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
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Elements contributing to the change in net position are discussed in the Governmental and Business-Type Activities Analysis sections. The following table presents a condensed version of the Government-Wide Statement of Net Position.
As depicted in the charts below, the majority of the City’s net position is invested in capital assets, which are used to provide services to citizens. Capital assets include streets, water/sewer lines and related utilities infrastructure, land, buildings, equipment, etc., less any related outstanding debt used to acquire those assets. It should be noted that, although the investment in capital assets is reported net of related debt, resources needed to repay this debt must be provided from other sources since the capital assets themselves cannot be used to liquidate these liabilities.
Table 1 City of Everett's Net Position (in thousands)
Governmental Business-Type Total Primary Activities Activities Government 2018 2017 2018 2017 2018 2017 Current and other assets $ 236,064 $ 221,456 $ 112,158 $ 113,193 $ 348,222 $ 334,649 Capital assets, net 345,165 345,151 646,400 635,058 991,565 980,209 Total assets 581,229 566,607 758,558 748,251 1,339,787 1,314,858
Total deferred outflows of resources 7,472 6,766 10,041 10,858 17,513 17,624
Long-term liabilities 128,698 98,650 225,791 243,330 354,489 341,980 Other liabilities 8,388 7,852 6,842 7,672 15,230 15,524 Total liabilities 137,086 106,502 232,633 251,002 369,719 357,504
Total deferred inflows of resources 16,704 10,496 5,838 3,773 22,542 14,269
Net position Net investment in capital assets 327,692 328,134 443,956 418,695 771,648 746,829 Restricted 78,456 64,268 2,915 2,917 81,371 67,185 Unrestricted (deficit) 28,764 63,973 83,257 82,722 112,021 146,695 Total net position $ 434,912 $ 456,375 $ 530,128 $ 504,334 $ 965,040 $ 960,709
Restricted assets represent resources that are subject to external restrictions on how they may be used. The Statement of Net Position further breaks out restricted assets into major categories. For example, $10 million in assets obtained through the Emergency Medical Services levy and criminal justice grant funding are restricted to public safety use. The 2018 year-end unrestricted net position of $29 million in governmental activities and $83 million in business-type activities may be used to meet ongoing obligations.
Net Position - Governmental Activities Net Position - Business-Type Activities (in millions) (in millions)
350 500 450 300 400 250 2016 350 2016 200 300 2017 250 2017 150 200 2018 2018 100 150 100 50 50 - - Invested in Restricted Unrestricted Invested in Restricted Unrestricted capital assets, capital assets, net of related net of related debt debt
At December 31, 2018, the City reported positive balances in all three categories of net position for both governmental and business-type activities. The same situation has held true for the past ten years.
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 15 CITY OF EVERETT FINANCIAL SECTION
The following table contains condensed financial information derived from the government-wide statement of activities comparing the current year to the prior year.
Table 2 City of Everett's Changes in Net Position (in thousands)
Governmental Business-Type Total Primary Activities Activities Government 2018 2017 2018 2017 2018 2017 Revenues Program revenues: Charges for services $ 16,580 $ 15,886 $ 104,766 $ 101,886 $ 121,346 $ 117,772 Operating grants and contributions 4,864 4,057 2,304 2,240 7,168 6,297 Capital grants and contributions 1,396 3,480 4,958 28,054 6,354 31,534 General revenues: Property taxes 43,436 42,794 43,436 42,794 Sales taxes 32,501 30,850 20,170 19,553 52,671 50,403 Business taxes 35,491 36,264 81 100 35,572 36,364 Other taxes 14,909 14,120 - 116 14,909 14,236 Sale of assets 128 69 90 (39) 218 30 Interest and investment earnings 3,048 988 2,341 151 5,389 1,139 T OT AL REV ENUES $ 152,353 $ 148,508 $ 134,710 $ 152,061 $ 287,063 $ 300,569
Program Expenses Governmental activities: General government services $ 24,495 $ 22,623 $ - $ - $ 24,495 $ 22,623 Police 39,223 40,030 - - 39,223 40,030 Fire 31,526 37,788 - - 31,526 37,788 Engineering & construction services 5,702 5,813 - - 5,702 5,813 Transportation 11,017 10,853 - - 11,017 10,853 Community services 3,796 5,453 - - 3,796 5,453 Library 4,269 5,573 - - 4,269 5,573 Culture and recreation 13,535 13,519 - - 13,535 13,519 Judicial 2,155 2,168 - - 2,155 2,168 Social services 1,226 1,213 - - 1,226 1,213 Interest on long-term debt 860 709 - - 860 709 Business-type activities: Water 34,465 33,894 34,465 33,894 Sew er 37,068 36,704 37,068 36,704 Solid w aste 636 698 636 698 Parking 312 278 312 278 Transit 26,457 25,510 26,457 25,510 Golf 4,281 4,208 4,281 4,208 T OT AL EXPENSES $ 137,804 $ 145,742 $ 103,219 $ 101,292 $ 241,023 $ 247,034
Increases (decreases) in net position before special items and transfers $ 14,549 $ 2,766 $ 31,491 $ 50,769 $ 46,040 $ 53,535 Transfers 5,698 5,204 (5,698) (5,204) - - Increase in net position $ 20,247 $ 7,970 $ 25,793 $ 45,565 $ 46,040 $ 53,535 Net position - beginning 456,375 448,405 504,335 458,770 960,710 907,175 Prior period adjustment (41,710) (41,710) -
Net position - ending $ 434,912 $ 456,375 $ 530,128 $ 504,335 $ 965,040 $ 960,710
PAGE 16 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT CITY OF EVERETT FINANCIAL SECTION
As shown in the following chart, taxes made up 52% of total revenue received by the City as a whole in 2018. Total tax revenues increased by $0.5 million, mostly due to increases in sales taxes suggesting stability in the overall economy. Of the 43.2% in charges for services, 86.3% is from business-type activities.
2018 Citywide Sources of Revenue
Grants 4.8%
Property Tax 15.4%
Sales and Use Tax Charges for Services 18.7% 43.2% Business Taxes 12.6% Other 5.3%
The following chart compares the functional expenses of the City. The largest expense is the combined water/sewer/solid waste functions, making up over 29% of the City’s total expenses. A close second is the combined police/fire functions. These functions combined make up over 59% of the functional expenses of the City.
2018 Citywide Functional Expenses
Other Bus 1.9% Gen Gov Svcs 10.2% Transit 11%
Water/Sew er/ Solid Police and Fire Waste 29.4% 29.8%
Other Govt Transportation 5.7% Culture/ 4.6% Recreation/ Library 7.4%
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 17 CITY OF EVERETT FINANCIAL SECTION
GOVERNMENTAL ACTIVITIES ANALYSIS
As shown in the Statement of Activities, total expenses for all governmental activities in 2018 were $137.8 million. Of this amount, $22.8 million was paid for by those who directly benefited from the programs or by other governments and organizations that subsidized certain programs with grants and contributions. The net expense (total expenses less program revenues) of $115 million was the cost of governmental activity services paid primarily by City taxpayers.
Revenues Total governmental activity revenues (excluding transfers) increased $3.8 million, due to an increase in interest earnings because of an improving investment market, and to increased sales and business tax revenues. The increase in both of these revenue sources suggests an improving economic environment.
Governmental Activities - Revenues by Source
Interest and Charges for investment services 10.8% earnings Operating grants Other taxes 2.1% 9.8% and contributions 3.2%
Capital grants and Business taxes contributions 23.3% 0.9%
Propety taxes Sales taxes 28..5% 21.4%
Expenses Total governmental activity expenses for 2018 were $137.8 million, a decrease of $7.9 million from 2017. Police and Fire activities account for over 50% of governmental activity expenses. The decrease in expenses was due largely to the following: an increase in estimated general government pollution remediation liability; in the LEOFF 1 Fire Pension Fund– a decrease in net pension and OPEB costs; in community services – a decrease in net pension costs as well as a decrease in bad debt write offs; and a decrease in net pension costs in the library. Changes in net pension expense can vary significantly from year-to-year due to changes in assumptions in determining liability and expense. The effect of implementing GASB Statement No 75, which changed the accounting principles for computing liabilities for the City’s LEOFF 1 police and fire benefits other than pensions, had a significant effect on the fire activity.
Governmental Activities - Program Revenues and Expenses (in thousands)
$40,000 Expenses
$35,000 Revenues
$30,000
$25,000
$20,000
$15,000
$10,000
$5,000
$- General Po lice Fire Eng & const Transportation Community Lib ra ry Culture and Judicial Social services Interest on government services services recreation long-term debt services
PAGE 18 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT CITY OF EVERETT FINANCIAL SECTION
BUSINESS-TYPE ACTIVITIES ANALYSIS
In 2018, program revenues provided $112 million to cover $103.2 million in business-type activity expenses, providing a net gain of $8.8 million.
Revenues Total business-type revenues decreased $17.3 million from the prior year. As shown in the following chart, the majority of business-type activity revenue is from charges for services, which grew by $2.9 million from 2017 due mainly to a rate increase implemented to address the City’s water and sewer utility capital replacement and improvement programs and inflation-based cost increases in operations and maintenance. Interest earnings increased $2.2 million due to an improving investment market. These increases were offset by a $23 million decrease in grants and capital contributions arising from the acceptance of the City’s segment share of the Everett-Tulalip joint water line in 2017. Grant and capital contribution revenue can fluctuate widely from year to year based on a number of factors, including the availability of federal and state grants, whether the City has applied for and received grant awards, and whether the City has major capital projects in progress. Sales tax growth of 2.4% indicates a return of consumer confidence and a strengthening business climate.
Busine ss-Type Activities - Revenues by Sources
Interest and Taxes Other earnings Investment 15% 0.1% earnings 1.8% Total grants and contributions Charges for 5.4% services 77.7%
Expenses Total business-type expenses for 2018 were $103.2 million, an increase of $1.9 million from 2017. The increase is shared by the combined water/sewer function due to major maintenance and repair programs related to the rate increases implemented in 2016 - 2018, and the transit function related to an increase in the use of outside services and services provided by other funds.
The chart below depicts the revenues and expenses for each of the City’s business-type programs. As shown, Water, Sewer, Solid Waste, Parking and Golf each generated enough program revenue (primarily user fees) to cover operating costs, while Transit did not. These activities are discussed in more detail in the Business-type Funds Analysis section.
Busine ss-Type Activities - Program Revenues and Expenses (in thousands)
$60,000 $50,000 $40,000 Expenses $30,000 Revenues $20,000 $10,000 $- Water Sewer Solid waste Parking Transit Golf
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 19 CITY OF EVERETT FINANCIAL SECTION
FUND-LEVEL FINANCIAL ANALYSIS
GOVERNMENTAL FUNDS As discussed previously, governmental funds are reported in the fund statements with a short-term, spendable resources focus. This information is useful in assessing whether resources available at year-end are adequate to cover upcoming financing requirements.
GASB Statement No. 54 established fund balance classifications that comprise a hierarchy based on the extent to which a government is bound to observe constraints imposed upon the use of the resources reported in governmental funds. The five components of fund balance are as follows:
• Non-spendable fund balance - examples are inventory and prepaid items.
• Restricted fund balance: externally enforceable legal restrictions such as those related to traffic mitigation revenue and grant receipts.
• Committed fund balance: funds that can only be used for purposes pursuant to constraints imposed by formal action of the City Council.
• Assigned fund balance: amounts that reflect the City’s intended use of resources in the special revenue, capital projects, and debt service funds.
• Unassigned fund balance: residual net resources that are not properly classified in one of the above four categories.
At year-end, the governmental funds reported a combined ending fund balance of $164 million. This is a $4 million increase from the prior year-end. The increase is due to improvement in the local economy, which positively influenced tax revenues--property tax and sales tax in particular.
Approximately 52.8% of the total ending fund balance of governmental funds is classified as either assigned or unassigned, which means the funds are available for spending at the City’s discretion.
General Fund – The general fund is the City’s primary operating fund and the largest funding source for day-to-day service delivery. As a result of the requirements established by GASB Statement No. 54, several funds previously classified as special revenue funds are now combined in reporting with the general fund. Without the consolidation, the general fund balance increased by $3.4 million or 5.4%. The increase was mostly due to an increase in revenues received from other governments, charges for services and fines. Expenses decreased over $0.4 million due to a concerted effort to contain labor costs.
Capital Improvement Reserve Fund – The City’s other major governmental fund is reported as a capital fund because it receives funding sources that are restricted to capital use. This fund recorded an increase of $2.4 million in fund balance, mostly due to consolidating two former special revenue funds as the capital improvement fund. As the name indicates, this fund accumulates money to pay for capital projects; therefore, expenditures and fund balance can fluctuate widely from year to year.
Other Governmental Funds – Total fund balance for other governmental funds decreased by $2 million, primarily due to the consolidation of a former special revenue fund into the capital improvement fund as mentioned above. Before considering the reclassification from special revenue to capital, other funds balance increased $0.5 million mostly in other capital projects.
BUSINESS-TYPE FUNDS Water/Sewer Utility Fund – This fund is the largest business-type fund in the City, accounting for $465.6 million, or 88%, of the business-type net position. Of this amount, $378.2 million is invested in capital assets, $2.8 million is classified as restricted for debt service, and $84.5 million is classified as unrestricted. The fund’s 2018 net income, before contributions and transfers, was $26.6 million, which is an increase of 19.6% over 2017. Due to the nature of full accrual accounting to which business-type funds are subject, this increase covers a substantial part of the increased investment in capital assets. The Utility has the ability to set rates to cover anticipated operating as well as capital project costs.
Transit Fund – This is the City’s other major business-type fund. It reported a $21.8 million operating loss in 2018 (before non-operating revenues and capital contributions). The loss was reduced by the voter approved 0.6% sales
PAGE 20 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT CITY OF EVERETT FINANCIAL SECTION tax, which is dedicated for transit purposes. Total sales tax collections in 2018 totaled $20.2 million, an increase of $0.5 million over 2017. Sales taxes are not considered operating revenue in business-type funds because they are collected from the general public and are not user-based.
Other Business-type Funds – The Golf Fund reported a net revenue of $106,493 compared to net loss of $273,932 in 2017. Management continues to implement elements of its business plan to increase revenues and decrease expenses. The Solid Waste Fund balance increased $1.8 million from 2017, largely due to an increase in charges for services linked to increased rates in Utilities as well as decreased operating expenses. The Parking Garage Fund continues to cover expenses with parking fees and interest revenue.
GENERAL FUND BUDGETARY HIGHLIGHTS
2018 Original budget compared to final budget The final General Fund revenue budget (including transfers-in) was $755,223, or 0.73% greater than the original budget. The majority of the increase was in the Intergovernmental revenue and Charges for Services categories. Grant revenue was increased by $341,300 for grant awards received after the original budget was prepared. Charges for Services were increased by $281,500 to account for wildland fire assistance provided to other agencies and for structural collapse training provided to other jurisdictions.
The final expenditure budget (including transfers-out) was $4.66 million or 4.2% greater than the original budget. This included $915,000 in re-appropriations from the 2017 budget for projects approved in 2017 but not completed prior to year-end and $2.3 million in re-appropriations to prefund contributions to the insurance, motor vehicle reserve, and facilities reserve funds. It also included an increase to the jail services budget of $300,000 to account for a Snohomish County jail billing error, an increase to the Fire department’s overtime budget of $515,000, and an increase to grant related expenditure budgets to match the grant revenue noted above.
2018 Actual results compared to final budget General Fund revenue came in below the final amended budget by $0.4 million or 0.4%. The largest shortfall was in the Other revenues category offset by increases in sales and business tax revenues.
Expenditures ended the year $2.9 million or 2.5% under the final amended budget. Labor savings from vacant positions throughout the year accounted for nearly $6.3 million in under expenditures. Transfers out were over budget by $4.75 million due to $4,778,575 received from Everett Public Facilities District (PFD) to advance refund a portion of the City’s outstanding principal and interest on the 2014 Floating Rate LTGO Bonds. The City issued the 2014 Floating Rate LTGO Bonds, in part, to refinance the PFD’s 2007 Project Revenue Bonds. This advance refunding will reduce the principal amount owed to the City by the PFD by $4,770,000. The benefit of this advance refunding was received after the final budget amendment was ratified.
CAPITAL ASSET AND DEBT ADMINISTRATION
CAPITAL ASSETS As of December 31, 2018, the City of Everett’s investment in capital assets, including construction in progress, for its governmental and business-type activities amounted to $991.5 million. The year-end balance represents a net increase (additions less retirements and depreciation) of $11.3 million from the end of the prior year.
Table 3 City of Everett's Capital Assets (net of accumulated depreciation) (in thousands)
Governmental Activities Business-Type Activities Total Activities 2018 2017 2018 2017 2018 2017 Land $ 60,410 $ 60,410 $ 37,983 $ 37,846 $ 98,393 $ 98,256 Buildings 58,136 60,461 157,647 152,006 215,783 212,467 Improvements other than buildings 18,018 18,113 393,642 398,485 411,660 416,598 Infrastructure 188,917 191,055 1,447 1,342 190,364 192,397 Machinery and equipment 14,792 11,816 18,902 15,799 33,694 27,615 Intangibles 207 260 9,166 9,438 9,373 9,698 Construction in progress 4,685 3,036 27,613 20,142 32,298 23,178 $ 345,165 $ 345,151 $ 646,400 $ 635,058 $ 991,565 $ 980,209
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 21 CITY OF EVERETT FINANCIAL SECTION
Major governmental capital asset investments for the year included (in millions): • Vehicle replacement ...... $ 4.4 • 2018 overlay program ...... 3.2 • Grand Avenue Park pedestrian bridge ...... 1.2 Major business-type capital asset investments for the year included (in millions): • Northeast Everett sewer/stormwater separation ...... $ 7.4 • Vehicle replacement ...... 5.5 • Grand Avenue Park bridge ...... 5.0 • Water filtration plant roof replacement ...... 2.8 • Water main replacements ...... 2.1 • Water pollution control facility pump station upgrade ...... 1.3 • Three Lakes bypass valve ...... 1.0
Additional information about the City of Everett’s capital assets can be found in Note 6 to the financial statements.
DEBT ADMINISTRATION As shown in the table below, the City’s total outstanding debt at December 31, 2018, was 231.1 million. Of this amount, $36.6 million is bonded debt backed by the full faith and credit of the City, $167 million is bonded debt secured solely by water and sewer user fees, and $26.4 million is in Public Works Trust Fund and State Revolving Fund loans. The remaining $1.1 million is a tax-exempt installment loan to replace city streetlights with LED lighting.
The City’s total debt outstanding decreased by a net amount (new issues less principal payments and advance refunding of $18.4 million from the prior year-end. The major debt transactions that contributed to this change are detailed below.
• The City redeemed $7.4 million of revenue debt • The City redeemed $7.8 million of general obligation debt • The City redeemed $3.3 million of other long-term debt
Table 4 City of Everett's Outstanding Debt (in thousands)
Governmental Activites Business-Type Activities Total Activities
2018 2017 2018 2017 2018 2017
General obligation bonds $ 35,590 $ 42,355 $ 1,000 $ 2,000 $ 36,590 $ 44,355 Revenue debt - - 167,020 174,395 167,020 174,395 Other long-term debt 1,349 1,535 26,183 29,264 27,532 30,799 $ 36,939 $ 43,890 $ 194,203 $ 205,659 $ 231,142 $ 249,549
The City practices conservative fiscal policy and adheres to the fund balance policy instituted in 2004. This helps the City maintain high credit ratings to assist in obtaining financing at the lowest possible cost. The City’s bond rating, according to Standard & Poor’s, is AA+ for both its general obligation and revenue debt.
Additional details about the City’s long-term debt can be found in Note 10 to the financial statements.
PAGE 22 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT CITY OF EVERETT FINANCIAL SECTION
ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS AND RATES
Principal factors influencing the City’s 2019 budget include: moderate income from retail sales and business revenues stemming from stability in the regional economy, and property tax revenue growth limited to 1% on the base, plus adjustments for new construction and annexations.
Other economic factors considered when preparing the City’s 2019 budget included:
• Economic activity is expected to be moderate.
• Population is expected to increase by 1% in 2019.
• The inflation rate (as measured by the June-to-June Seattle/Urban Consumer Price Index) is expected to remain low. The rate used for factors affecting the 2019 budget was 2.7%.
• Interest rates are expected to increase slightly through 2019. Expectations are for the Federal Reserve to continue to move slowly to remove accommodation from its monetary policy. Some of the specific steps taken to balance the 2019 budget include: increasing the revenue forecast by 2%, eliminating 14.5 FTEs, reducing the contribution to the LEOFF 1 Police and Fire Pension Funds, reducing the contribution to street overlay, and prepaying reserve contributions from prior year carryforwards.
REQUESTS FOR FINANCIAL INFORMATION
This financial report is designed to provide our citizens, creditors, investors, and other interested parties with a general overview of the City’s finances and to show the City’s accountability for the financial resources it receives. If you have any questions about this report, or need additional financial information, please contact the Finance Department at 2930 Wetmore Avenue, Suite 9H, Everett, WA 98201
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 23 CITY OF EVERETT FINANCIAL SECTION
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PAGE 24 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT CITY OF EVERETT FINANCIAL SECTION
STATEMENT OF NET POSTION DECEMBER 31, 2018
Primary Government Component Unit EV ERET T PUBL IC GOV ERNM ENTAL BUSINESS-TYPE FACILITIES ACTIVITIES ACTIVITIES TOTAL DISTRICT ASSETS Cash and cash equivalents $ 11,356,496 $ 3,988,325 $ 15,344,821 $ 2,785,726 Deposits w ith trustees 48,498 204,674 253,172 Investments 125,353,606 94,171,252 219,524,858 Receivables, net 56,152,762 13,983,835 70,136,597 793,285 Internal balances 6,010,371 (6,010,371) - Inventories 545,646 1,330,817 1,876,463 Prepayments 653,766 151,992 805,758 331,051 Restricted: Cash and cash equivalents - 210,367 210,367 1,398,776 Investments - 3,454,661 3,454,661 Special assessments 96,824 2,520 99,344 Net pension assets 34,383,398 - 34,383,398 Investment in joint venture 1,463,344 669,332 2,132,676 Land 60,409,823 37,983,353 98,393,176 257,074 Construction in progress 4,685,810 27,613,376 32,299,186 Capital assets, net (Note 6) 280,069,061 580,803,559 860,872,620 35,745,833
TOTAL ASSETS $ 581,229,405 $ 758,557,692 $ 1,339,787,097 $ 41,311,745
DEFERRED OUTFLOWS OF RESOURCES Deferred charge on refunding $ - $ 7,358,852 $ 7,358,852 $ 87,653 Deferred outflow s related to pensions 7,471,916 2,682,099 10,154,015 - TOTA L DEFERRED OUTFLOWS OF RESOURCES $ 7,471,916 $ 10,040,951 $ 17,512,867 $ 87,653 COM BINED ASSETS AND DEFERRED OUTFLOWS $ 588,701,321 $ 768,598,643 $ 1,357,299,964 $ 41,399,398 OF RESOURCES
LIABILITIES Accounts payable and other current liabilities $ 7,932,335 $ 6,256,267 $ 14,188,602 $ 954,922 Unearned revenues 456,236 586,040 1,042,276 2,124,157 Non-current liabilities (Note 12): Due w ithin one year 15,157,338 14,323,749 29,481,087 535,000 Due in more than one year 51,493,734 197,733,991 249,227,725 44,568,359 Net Pension Liabilities 17,181,524 13,732,715 30,914,239 Net OPEB Liabilities 44,864,788 - 44,864,788 TOTA L LIA BILITIES $ 137,085,955 $ 232,632,762 $ 369,718,717 $ 48,182,438
DEFERRED INFLOWS OF RESOURCES Deferred inflow s related to pensions $ 16,703,583 $ 5,838,126 $ 22,541,709 $ - Deferred inflow s related to concession agreement - - - 131,250 COM BINED LIABILITIES AND DEFERRED INFLOWS $ 153,789,538 $ 238,470,888 $ 392,260,426 $ 48,313,688 OF RESOURCES
NET POSITION Net Investment in capital assets $ 327,691,605 $ 443,956,026 $ 771,647,631 $ (9,012,800) Restricted for: Capital projects 96,484 - 96,484 - Debt service 169,343 2,915,027 3,084,370 1,398,776 Public safety 10,043,355 - 10,043,355 Transportation 15,367,196 - 15,367,196 Parks and recreation 2,324,296 - 2,324,296 Community development projects 15,077,852 - 15,077,852 Library 117,346 - 117,346 Tourism 637,542 - 637,542 Economy 238,901 - 238,901 Related to pension 34,383,398 - 34,383,398 Unrestricted 28,764,465 83,256,702 112,021,167 699,733
TOTAL NET POSITION $ 434,911,783 $ 530,127,755 $ 965,039,538 $ (6,914,291)
The accompanying notes are an integral part of this statement.
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 25 CITY OF EVERETT FINANCIAL SECTION
STATEMENT OF ACTIVITIES FOR THE YEAR ENDED DECEMBER 31, 2018 (PAGE 1 OF 2)
PROGRAM REV ENUES
Operating Capital Charges for Grants and Grants and FUNCTIONS/PROGRAM S Expenses Services Contributions Contributions Primary government:
Governmental activities:
General government services $ 24,495,523 $ 3,787,396 $ 46,807 $ 54,436 Police 39,222,508 224,036 1,209,860 - Fire 31,526,203 2,105,514 928,160 50,690 Engineering & construction services 5,702,289 938,424 - - Transportation 11,017,103 1,636,728 - 1,246,899 Community services 3,796,063 4,353,304 2,151,174 - Library 4,268,802 68,504 66,574 376 Culture and recreation 13,535,097 1,885,740 451,231 43,520 Judicial 2,155,389 1,563,930 - - Social Services 1,225,782 16,355 10,483 - Interest on long-term debt 859,606 - - -
Total governmental activities 137,804,365 16,579,931 4,864,289 1,395,921
Business-type activities: Water 34,464,433 47,690,025 - 483,523 Sew er 37,068,342 47,376,172 49,772 466,094 Solid w aste 635,535 2,382,979 44,865 - Parking 311,878 391,464 - - Transit 26,457,332 2,622,451 2,209,026 4,008,120 Golf 4,281,125 4,302,697 - - Total business-type activities 103,218,645 104,765,788 2,303,663 4,957,737
Total primary government $ 241,023,010 $ 121,345,719 $ 7,167,952 $ 6,353,658 Component units:
Everett Public Facilities District $ 9,657,860 $ 7,353,507 $ 3,119,683 $ -
General revenues: Property taxes Sales taxes Business taxes Excise taxes Allocation of state-imposed taxes Sale of assets Interest and investment earnings Transfers
Total general revenues and transfers Change in net position
Net position - beginning
Change in accounting principle
Net position - beginning, as restated
Net position - ending
The accompanying notes are an integral part of this statement.
PAGE 26 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT CITY OF EVERETT FINANCIAL SECTION
STATEMENT OF ACTIVITIES FOR THE YEAR ENDED DECEMBER 31, 2018 (PAGE 2 OF 2)
NET (EXPENSE) REV ENUE AND CHANGES IN NET POSITION Primary Government Component Unit
Everett Public Governmental Business-Type Facilities Activities Activities Total District
$ (20,606,884) $ - $ (20,606,884)
(37,788,612) - (37,788,612)
(28,441,839) - (28,441,839) (4,763,865) - (4,763,865) (8,133,476) - (8,133,476) 2,708,415 - 2,708,415 (4,133,348) - (4,133,348) (11,154,606) - (11,154,606)
(591,459) - (591,459)
(1,198,944) - (1,198,944) (859,606) - (859,606)
(114,964,224) - (114,964,224)
- 13,709,115 13,709,115
- 10,823,696 10,823,696
- 1,792,309 1,792,309 - 79,586 79,586 - (17,617,735) (17,617,735) - 21,572 21,572
- 8,808,543 8,808,543
$ (114,964,224) $ 8,808,543 $ (106,155,681)
$ 815,330
43,435,580 - 43,435,580 32,501,497 20,169,893 52,671,390
35,491,490 80,683 35,572,173
9,333,783 - 9,333,783 5,574,771 - 5,574,771 127,675 90,635 218,310 3,047,974 2,341,062 5,389,036
5,697,817 (5,697,817) - 135,210,587 16,984,456 152,195,043
20,246,363 25,792,999 46,039,362 815,330
456,374,933 504,334,756 960,709,689 (7,729,621) (41,709,513) - (41,709,513)
414,665,420 504,334,756 919,000,176
$ 434,911,783 $ 530,127,755 $ 965,039,538 $ (6,914,291)
The accompanying notes are an integral part of this statement.
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 27 CITY OF EVERETT FINANCIAL SECTION
BALANCE SHEET GOVERNMENTAL FUNDS DECEMBER 31, 2018
CAPITAL OTHER TOTAL IMPROVEMENT GOVERNMENTAL GOVERNMENTAL GENERAL FUND RESERVE FUND FUNDS FUNDS
ASSETS Cash and cash equivalents $ 5,066,606 $ 1,211,245 $ 3,540,858 $ 9,818,709 Change and imprest funds 50,549 - - 50,549 Deposits w ith trustee 48,498 - - 48,498 Investments 42,657,574 33,674,221 25,770,351 102,102,146 Receivables, net Taxes 11,653,601 328,856 1,160,205 13,142,662 Customer accounts 1,374,278 19,168 19,782 1,413,228 Interest 343,413 81,840 94,816 520,069 Due from other funds 225 - 81 306 Interfund receivable 28,925 - - 28,925 Due from other governmental units 1,378,573 - 833,973 2,212,546 Due from component unit 24,124,298 39,704 - 24,164,002 Prepayments 558,050 - - 558,050 Special assessments - non-current - - 96,824 96,824 Notes/contracts receivable 1,140,000 - 13,320,462 14,460,462 Advances to other funds 6,344,168 - - 6,344,168 TOTAL ASSETS $ 94,768,758 $ 35,355,034 $ 44,837,352 $ 174,961,144
LIABILITIES Wages payable $ 2,609,098 $ - $ 352,143 $ 2,961,241 Accounts payable 2,455,452 - 555,276 3,010,728 Due to other funds 81 - - 81 Interfund payable - - 28,925 28,925 Due to other governmental units 167,179 - 13,499 180,678 Custodial accounts 570,772 - - 570,772 Revenues collected in advance 43,876 - 359,664 403,540 Other liabilities 226,785 - 815 227,600 Unearned Revenue - - 56,640 56,640
TOTA L LIA BILITIES 6,073,243 - 1,366,962 7,440,205
DEFERRED INFLOWS OF RESOURCES Unavailable revenues-property taxes 1,036,839 - - 1,036,839 Unavailable revenues-special assessments - - 96,824 96,824 Unavailable revenues-other 2,195,785 - - 2,195,785 TOTA L DEFERRED INFLOWS OF RESOURCES 3,232,624 - 96,824 3,329,448
FUND BALANCES Nonspendable 32,166,516 - - 32,166,516 Restricted - 6,486,834 37,585,481 44,072,315 Committed 193,312 - - 193,312 Assigned - 28,868,200 5,788,085 34,656,285 Unassigned 53,103,063 - - 53,103,063 TOTA L FUND BA LA NCES 85,462,891 35,355,034 43,373,566 164,191,491 TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES $ 94,768,758 $ 35,355,034 $ 44,837,352 $ 174,961,144
The accompanying notes are an integral part of this statement.
PAGE 28 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT CITY OF EVERETT FINANCIAL SECTION
RECONCILIATION OF THE BALANCE SHEET - GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION DECEMBER 31, 2018
Total Fund Balances reported on the Balance Sheet - Governmental Funds $ 164,191,491 Amounts reported for governmental activities in the Balance Sheet -
Capital assets reported in the government-wide Statement of Net Position not reported in the Balance Sheet - Governmental Funds 343,824,695
Assets and liabilities of internal service funds included in governmental activities in the government-wide Statement of Net Position not reported in the Balance Sheet - Governmental Funds 10,749,731
Net pension assets, liabilities, deferred outflows, and deferred inflows of the City's proportionate share of the State-sponsored retirement plans are reported in the government-wide Statement of Net Position but not in the Balance Sheet - Governmental Funds 9,930,694 Unearned revenues reported in the Balance Sheet - Governmental Funds not reported in the government-wide Statement of Net Position 3,333,392 Net investment in joint venture reported in the government-wide Statement of Net Position not reported in the Balance Sheet - Governmental Funds 1,463,344
Accrued receivables reported in the government-wide Statement of Net Position not reported in the Balance Sheet - Governmental Funds 665,000
Discount on notes receivable reported in the government-wide Statement of Net Position not reported in the Balance Sheet - Governmental Funds (1,023,635) Accrued pollution remediation liability reported in the government-wide Statement of Net Position not reported in the Balance Sheet - Governmental Funds (3,349,457) Net pension and net OPEB assets, liabilities, deferred outflows, and deferred inflows of the City's single-employer Fire and Police retirement plans are reported in the government-wide Statement of Net Position but not in the Balance Sheet - Governmental Funds (43,536,520) Long-term debt reported in the government-wide Statement of Net Position not reported in the Balance Sheet - Governmental Funds (51,336,952)
Total Net Position reported on the government-wide Statement of Net Position $ 434,911,783
The accompanying notes are an integral part of this statement.
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 29 CITY OF EVERETT FINANCIAL SECTION
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE YEAR ENDED DECEMBER 31, 2018
CAPITAL OTHER TOTAL GENERAL IMPROVEMENT GOV ERNM ENTAL GOV ERNM ENTAL FUND RESERV E FUND FUNDS FUNDS
REV ENUES Taxes $ 99,821,819 $ 6,120,389 $ 13,934,183 $ 119,876,391 Licenses and permits 4,208,297 - - 4,208,297 Intergovernmental revenues 4,691,721 - 7,353,178 12,044,899 Charges for services 8,241,963 - 3,348,804 11,590,767 Fines and forfeits 1,685,568 - 4,469 1,690,037 Other revenues 3,351,929 761,390 1,452,109 5,565,428 Total revenues 122,001,297 6,881,779 26,092,743 154,975,819
EXPENDITURES Current: General government services 25,218,047 - 662,050 25,880,097 Security of persons and property 67,964,108 - 9,879,880 77,843,988 Transportation 4,393,494 - 2,959,446 7,352,940 Economic environment 5,709,653 - 1,480,086 7,189,739 Mental and physical health 1,251,505 - - 1,251,505 Culture and recreation 14,873,394 500,000 623,766 15,997,160 Capital outlay 4,818,127 - 8,026,667 12,844,794 Debt service: Principal - 186,615 6,765,000 6,951,615 Interest - 37,724 895,774 933,498 Other debt service costs - - 14,945 14,945 Total Expenditures 124,228,328 724,339 31,307,614 156,260,281 Excess (deficiency) of revenues over (under) expenditures (2,227,031) 6,157,440 (5,214,871) (1,284,462) OTHER FINANCING SOURCES (USES) Disposition of capital assets 121,675 - 6,000 127,675 Transfers in 9,023,888 1,892,219 12,792,205 23,708,312 Transfers out (7,813,050) (5,617,035) (4,828,495) (18,258,580) Insurance recoveries 6,690 - 5,310 12,000 Total other financing sources (uses) 1,339,203 (3,724,816) 7,975,020 5,589,407 Net change in fund balances (887,828) 2,432,624 2,760,149 4,304,945 Fund balances - beginning 86,350,719 32,922,410 40,613,417 159,886,546 FUND BALANCES - ENDING $ 85,462,891 $ 35,355,034 $ 43,373,566 $ 164,191,491
The accompanying notes are an integral part of this statement.
PAGE 30 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT CITY OF EVERETT FINANCIAL SECTION
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, 2018
Net change in fund balances for total governmental funds reported on the Statement of Revenues, Expenditures and Changes in Fund Balances $ 4,304,945 g Expenditures and Changes in Fund Balances differ from amounts reported in the government-wide Statement of Activities by the following items:
Increase (decrease) in governmental pension expense as a result of the requirements of GASB 68. 11,066,594 Governmental funds report the proceeds from the issuance of long-term debt (e.g., bonds and leases) as revenues and the associated issuance costs as expense in the period the debt is issued. Government-wide statements report long-term debt as a liability and amortize issuance costs as expense over the life of the obligation. This item represents the net effect of these differences in the treatment of long-term debt and related items during the current period. 7,025,507 Increase (decrease) to the combined net pension asset and net OPEB liability on the government-wide statements during the current period. 3,486,705 Internal service funds are used by management to charge the costs of fleet management, management information systems, self-insurance, employee health benefits, and telecommunications to individual funds. The net revenue (expense) of certain activities of internal service funds is reported with governmental activities. 1,968,929 Governmental funds report capital outlays as expenditures. Government-wide statements establish capital outlays as assets and allocate the cost of depreciable assets over their estimated useful lives as depreciation expense. This item represents the amount by which capital outlays exceeded (or, if negative, were less than) depreciation expense in the current period. 142,735
Fair value of capital assets donated to the City reported in the government- wide statements during the current period. 46,095 Increase (decrease) to notes and interest receivable on the government-wide statements during the current period. 22,774 Disposition of capital assets (i.e., sales, trade-ins and transfers) results in a decrease in capital assets reported in the government-wide statements during the current period. (15,972)
Increase (decrease) to non-current unearned revenue on the Balance Sheet - Governmental Funds during the current period. (71,728) Increase (decrease) to accrued receivables in the government-wide statements during the current period. (243,831) Increase (decrease) to accrued pollution remediation liability in the government-wide statements during the current period. (1,799,407) Increase (decrease) to investment in joint venture reported in the government- wide statements during the current period. (2,165,102) The (increase) decrease in accrued compensated absences is reported in the government-wide Statement of Activities but not the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances. (3,521,881)
Change in net position of governmental activities reported on the government-wide Statement of Activities $ 20,246,363
The accompanying notes are an integral part of this statement.
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 31 CITY OF EVERETT FINANCIAL SECTION
STATEMENT OF NET POSITION PROPRIETARY FUNDS DECEMBER 31, 2018
GOVERNMENTAL BUSINESS TYPE ACTIVITIES ACTIVITIES - WATER & OTHER INTERNAL SEWER TRANSIT ENTERPRISE SERVICE UTILITY FUNDS TOTAL FUNDS CURRENT A SSETS Cash and cash equivalents $ 3,261,898 $ 344,387 $ 382,040 $ 3,988,325 $ 1,487,238 Deposits w ith Trustee - 204,674 - 204,674 - Investments 85,908,977 3,597,305 4,664,972 94,171,254 23,251,459 Bond covenant accounts: Restricted cash and cash equivalents 97,607 - 86,875 184,482 - Restricted investments 2,730,545 - - 2,730,545 - Receivables, net Taxes - 3,679,000 - 3,679,000 - Customer accounts 7,423,348 45,807 194,429 7,663,584 523,771 Interest 251,706 28,863 15,995 296,564 74,129 Interfund loans 838,700 - - 838,700 - Due from other governments 819,501 1,514,985 10,201 2,344,687 307 Prepayments - - - - 95,716 Inventory 1,194,870 - 135,948 1,330,818 545,646 Total Current Assets 102,527,152 9,415,021 5,490,460 117,432,633 25,978,266 NONCURRENT A SSETS Restricted cash and cash equivalents - 25,885 - 25,885 - Prepayments 151,992 - - 151,992 - Restricted investments - 724,115 - 724,115 - Special assessments 2,520 - - 2,520 - Investment in joint venture 669,332 - - 669,332 - Land 23,136,323 13,887,408 959,622 37,983,353 - Construction in progress 25,860,370 1,753,006 - 27,613,376 - Capital assets, net of depreciation (Note 6) 529,524,592 36,467,373 14,811,591 580,803,556 1,339,996 Total Noncurrent Assets 579,345,129 52,857,787 15,771,213 647,974,129 1,339,996 TOTAL ASSETS 681,872,281 62,272,808 21,261,673 765,406,762 27,318,262 DEFERRED OUTFLOWS OF RESOURCES Refunding of debt 7,358,852 - - 7,358,852 - Resources related to pensions 1,682,817 949,434 49,848 2,682,099 358,241 TOTA L DEFFERED OUTFLOWS OF RESOURCES 9,041,669 949,434 49,848 10,040,951 358,241 COM BINED ASSETS AND DEFERRED OUTFLOW OF RESOURCES $ 690,913,950 $ 63,222,242 $ 21,311,521 $ 775,447,713 $ 27,676,503 LIABILITIES CURRENT LIA BILITIES Wages and benefits payable $ 1,299,177 732,735 $ 51,130 $ 2,083,042 $ 165,720 Accounts payable 2,785,133 568,461 181,611 3,535,205 696,536 Claims and judgments payable - - - - 6,732,046 Interest payable 646,001 - 3,542 649,543 - Taxes payable 189,613 2,907 9,626 202,146 648 Interfund loans payable - - 838,700 838,700 - Due to other governments - 448,126 - 448,126 - Custodial accounts 1,606 - - 1,606 - Unearned revenue - 343,062 240,457 583,519 - Current portion of long-term debt 10,552,504 - 1,002,851 11,555,355 - Other current liabilities - 821,500 - 821,500 186,426 Total Current Liabilities 15,474,034 2,916,791 2,327,917 20,718,742 7,781,376 NONCURRENT LIA BILITIES Capital Leases Payable 29,664 - - 29,664 - Revenue bonds payable 173,588,336 - - 173,588,336 - Claims and judgments payable - - - - 5,006,701 Special assessment bonds payable 2,520 - - 2,520 - Advances from other funds - - 6,344,168 6,344,168 - Loans payable 23,107,207 - - 23,107,207 - Net pension liability 8,772,002 4,843,838 116,875 13,732,715 3,176,057 Liabilities payable from restricted assets - 750,000 - 750,000 - Other long-term liabilities 764,220 442,195 335,864 1,542,279 157,903 Total Noncurrent Liabilities 206,263,949 6,036,033 6,796,907 219,096,889 8,340,661 TOTA L LIA BILITIES 221,737,983 8,952,824 9,124,824 239,815,631 16,122,037 DEFERRED INFLOWS OF RESOURCES Resources related to pensions 3,616,229 2,081,264 140,633 5,838,126 470,939 TOTA L DEFFERED INFLOWS OF RESOURCES 3,616,229 2,081,264 140,633 5,838,126 470,939 COM BINED LIABILITIES AND DEFERRED INFLOW OF RESOURCES $ 225,354,212 $ 11,034,088 $ 9,265,457 $ 245,653,757 $ 16,592,976 NET POSITION Net Investment in Capital Assets 378,215,831 51,277,655 14,462,541 443,956,027 1,339,996 Restricted for debt service 2,828,152 - 86,875 2,915,027 - Unrestricted 84,515,755 910,499 (2,503,352) 82,922,902 9,743,531 TOTAL NET POSITION $ 465,559,738 $ 52,188,154 $ 12,046,064 529,793,956 $ 11,083,527 Amounts reported for business-type activities in the statement of net position are different because: The net effect of activities allocated from internal service funds is presented as an internal balance on the statement of net position. 333,799 Net position of business-type activities $ 530,127,755
The accompanying notes are an integral part of this statement.
PAGE 32 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT CITY OF EVERETT FINANCIAL SECTION
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION PROPRIETARY FUNDS FOR THE YEAR ENDED DECEMBER 31, 2018
GOV ERNM ENTAL BUSINESS-TYPE ACTIVITIES ACTIVITIES - WAT ER & OTHER INTERNAL SEWER ENTERPRISE SERV ICE UTILITY TRANSIT FUNDS TOTAL FUNDS
OPERATING REV ENUES: Admission taxes $ - $ - $ 80,683 $ 80,683 $ - Charges for services 94,344,215 1,313,596 7,074,384 102,732,195 34,641,096 Rental revenues - 1,227,681 - 1,227,681 - Total Operating Revenues 94,344,215 2,541,277 7,155,067 104,040,559 34,641,096 OPERATING EXPENSES: Personnel services 24,072,277 13,660,941 1,115,625 38,848,843 3,463,929 Supplies 4,478,452 1,264,876 557,492 6,300,820 4,890,047 Professional services 4,937,527 1,126,305 1,878,918 7,942,750 21,528,930 Depreciation and amortization 15,926,666 2,837,647 826,168 19,590,481 421,150 Taxes 2,067,244 776 - 2,068,020 - Other operating expenses 12,350,049 5,405,425 618,509 18,373,983 8,333,278 Total Operating Expenses 63,832,215 24,295,970 4,996,712 93,124,897 38,637,334
Operating Income (Loss) 30,512,000 (21,754,693) 2,158,355 10,915,662 (3,996,238)
NON-OPERATING REV ENUES (EXPENSES): Sales tax - 20,169,893 - 20,169,893 - Intergovernmental revenues 49,772 2,189,026 44,865 2,283,663 - Interest and investment revenue 1,861,772 172,722 86,090 2,120,584 401,064 Rent 692,244 - - 692,244 - Other non-operating revenues 279,880 101,295 2,758 383,933 1,448,808 Gain (loss) on sale/retirement of assets (320,005) - 1,580 (318,425) (4,457) Sale of junk/salvage 8,183 - - 8,183 - Interest expense (6,469,312) - (231,828) (6,701,140) - Other non-operating expenses (5,138) (1,684,331) - (1,689,469) 2,824 Total Non-Operating Revenues (Expenses) (3,902,604) 20,948,605 (96,535) 16,949,466 1,848,239
Income (Loss) Before Contributions and Transfers 26,609,396 (806,088) 2,061,820 27,865,128 (2,147,999) Capital contributions 949,617 4,008,120 - 4,957,737 - Transfers in - 4,000 - 4,000 248,083 Transfers out (5,447,340) (254,477) - (5,701,817) - CHA NGE IN NET POSITION 22,111,673 2,951,555 2,061,820 27,125,048 (1,899,916) NET POSITION - BEGINNING 443,448,065 49,236,599 9,984,244 502,668,908 12,983,443 NET POSITION - ENDING $ 465,559,738 $ 52,188,154 $ 12,046,064 $ 529,793,956 $ 11,083,527 The difference betw een Increase in Net Position, and Change in Net Position for business-type funds is explained as follow s: Increase in Net Position, per above $ 27,125,048 The net revenue (expense) of certain activities of internal service funds associated w ith business-type activities. (1,332,049) Change in Net Position, per Statement of Activities $ 25,792,999
The accompanying notes are an integral part of this statement.
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 33 CITY OF EVERETT FINANCIAL SECTION
STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED DECEMBER 31, 2018 (Page 1 of 2)
GOV ERNM ENTAL BUSINESS-TYPE ACTIVITIES ACTIVITIES - WAT ER & OTHER INTERNAL SEWER ENTERPRISE SERV ICE UTILITY TRANSIT FUNDS TOTAL FUNDS CASH FLOWS FROM OPERATING ACTIVITIES: Receipts from customers and users $ 97,016,990 $ 2,260,564 $ 7,260,013 $ 106,537,567 $ 723,687 Receipts from interfund services provided 741,952 411,448 64 1,153,464 33,970,708 Payments to suppliers (16,408,760) (2,321,306) (2,824,030) (21,554,096) (28,761,558) Payments to employees (25,281,097) (14,766,405) (1,177,511) (41,225,013) (3,064,720) Payments for interfund services used (7,308,296) (5,592,149) (162,585) (13,063,030) (448,169) Claims paid - - - - (5,219,772) Other receipts 458,661 97,916 2,758 559,335 1,088,813 Other payments (5,138) (1,672,787) - (1,677,925) - NET CASH PROV IDED (USED) BY OPERATING ACTIV ITIES 49,214,312 (21,582,719) 3,098,709 30,730,302 (1,711,011)
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Sales tax received - 20,211,974 - 20,211,974 - Receipts from non-capital grants 41,690 2,399,109 82,118 2,522,917 - Interfund loan payments received 1,100,000 - - 1,100,000 - Interest received on interfund loans 31,888 - - 31,888 - Principal paid on interfund loans - - (1,305,000) (1,305,000) - Interest paid on interfund loans - - (154,673) (154,673) - Transfers to other funds (5,447,340) (254,477) - (5,701,817) - Transfers from other funds - 4,000 - 4,000 - NET CASH PROV IDED (USED) BY NONCAPITAL FINANCING ACTIV ITIES (4,273,762) 22,360,606 (1,377,555) 16,709,289 - CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Principal paid on capital debt (10,456,182) - (1,000,000) (11,456,182) - Interest paid on capital debt (7,198,078) - (82,500) (7,280,578) - Receipts from capital grants - 3,048,820 - 3,048,820 - Proceeds from sale of capital assets 97,238 - 1,580 98,818 22,264 Capital contributions 362,171 - - 362,171 248,083 Acquisition and construction of capital assets (26,315,069) (5,397,230) (385,373) (32,097,672) (277,179) NET CASH PROV IDED (USED) BY CAPITAL FINANCING ACTIV ITIES (43,509,920) (2,348,410) (1,466,293) (47,324,623) (6,832) CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from sale of investments - 504,569 400,762 905,331 3,027,929 Purchase of investments (17,589,224) - (342,146) (17,931,370) (578,170) Investment income 1,463,800 93,725 85,708 1,643,233 376,319 NET CASH PROV IDED (USED) BY INV ESTING ACTIV ITIES (16,125,424) 598,294 144,324 (15,382,806) 2,826,078 Net Increase (Decrease) in Cash and Cash Equivalents (14,694,794) (972,229) 399,185 (15,267,838) 1,108,235 Cash and Cash Equivalents, January 1 18,054,299 1,547,175 69,730 19,671,204 379,003 CASH AND CASH EQUIV ALENTS, DECEM BER 31 $ 3,359,505 $ 574,946 $ 468,915 $ 4,403,366 $ 1,487,238
Current Cash and Cash Equivalents $ 3,261,898 $ 549,061 $ 382,040 $ 4,192,999 $ 1,487,238 Restricted Cash and Cash Equivalents 97,607 25,885 86,875 210,367 - CASH AND CASH EQUIV ALENTS, DECEM BER 31 $ 3,359,505 $ 574,946 $ 468,915 $ 4,403,366 $ 1,487,238
The accompanying notes are an integral part of this statement.
PAGE 34 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT CITY OF EVERETT FINANCIAL SECTION
STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED DECEMBER 31, 2018 (Page 2 of 2)
GOV ERNM ENTAL BUSINESS-TYPE ACTIVITIES ACTIVITIES - WAT ER & OTHER INTERNAL SEWER ENTERPRISE SERV ICE UTILITY TRANSIT FUNDS TOTAL FUNDS RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROV IDED (USED) BY OPERATING ACTIV ITIES: Operating income (loss) $ 30,512,000 (21,754,693) $ 2,158,355 $ 10,915,662 $ (3,996,238) Adjustments to Reconcile Operating Income to Net Cash Provided (Used) by Operating Activities: Depreciation and amortization 15,926,666 2,837,647 826,168 19,590,481 421,150 Other non-operating receipts 972,124 101,295 2,758 1,076,177 1,451,632 Other non-operating disbursements (5,138) (1,676,166) - (1,681,304) - GASB 68 pension expense adjustments (1,132,071) (1,105,961) (66,503) (2,304,535) 295,465 Change in Assets and Liabilities: (Increase) decrease in inventories (264,713) - (17,396) (282,109) 256,956 (Increase) decrease in receivables 2,897,053 116,533 95,412 3,108,998 (309,520) (Increase) decrease in prepaid expenses 264,868 - - 264,868 (497) Increase (decrease) in accounts and other payables 183,259 (69,301) 88,127 202,085 86,492 Increase (decrease) in compensated absences (141,342) (52,193) 2,190 (191,345) 83,549 Increase (decrease) in other current liabilities 1,606 20,120 9,598 31,324 - TOTAL ADJUSTMENTS 18,702,312 171,974 940,354 19,814,640 2,285,227
NET CASH PROV IDED BY OPERATING ACTIV ITIES $ 49,214,312 $ (21,582,719) $ 3,098,709 $ 30,730,302 $ (1,711,011)
SCHEDULE OF NON-CASH CAPITAL AND RELATED FINANCING ACTIVITIES: Non-Cash Financing, Capital and Investing Activities: Capital assets contributed to other funds $ - $ - $ - $ - $ 26,721 Capital assets contributed by private developers 542,668 - - 542,668 - Increase (decrease) in fair value of investments 202,101 62,172 (10,188) 254,085 (28,113) Capital grants earned, not received - 961,748 - 961,748 - Operating grants earned, not received 24,620 430,760 10,201 465,581 - TOTA L NON-CA SH A CTIV ITIES $ 769,389 $ 1,454,680 $ 13 $ 2,224,082 $ (1,392)
The accompanying notes are an integral part of this statement.
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 35 CITY OF EVERETT FINANCIAL SECTION
STATEMENT OF FIDUCIARY NET POSITION FIDUCIARY FUNDS DECEMBER 31, 2018
TRUST AGENCY FUNDS FUNDS
ASSETS Cash and cash equivalents $ 192,201 $ 94,620 Agency Bonds 45,083,666 - Accounts receivable - net - 23,342 Interest receivable 13,743 - Other Prepayments 1,672 - 45,291,282 117,962 Total Current Assets TOTAL ASSETS 45,291,282 117,962
LIABILITIES Accounts payable 79,273 - Interfund Loans Payable 1,124,729 - Other current liabilities - 117,962 Total Current Liabilities 1,204,002 117,962
TOTAL LIABILITIES 1,204,002 117,962
NET POSITION Net Position restricted for pensions 15,419,944 - Net Position restricted for post employment benefits 28,667,336 - Total held in trust $ 44,087,280 $ -
The accompanying notes are an integral part of this statement.
PAGE 36 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT CITY OF EVERETT FINANCIAL SECTION
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FIDUCIARY FUNDS FOR THE YEAR ENDED DECEMBER 31, 2018
TRUST FUNDS
ADDITIONS: Contributions Employer $ 106,498 State 176,619 Total contributions 283,117
Investment income Interest 926,448 Net appreciation (depreciation) in fair value (97,451) Net investment income 828,997 TOTAL ADDITIONS 1,112,114
DEDUCTIONS: Benefits 3,592,416 Administrative expense 45,052 TOTAL DEDUCTIONS 3,637,468
CHANGE IN NET POSITION Pension benefits (739,260) Postemployment healthcare benefits (1,786,094)
NET POSITION RESTRICTED FOR
EM PL OYEES' PENSION BENEFIT S
Employees' pension benefits, January 1 16,159,204
NET POSITION RESTRICTED FOR POSTEMPLOYMENT HEALTHCARE BENEFITS Postemployment healthcare benefits, January 1 30,453,430
NET POSITION - ENDING $ 44,087,280
The accompanying notes are an integral part of this statement.
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 37 CITY OF EVERETT FINANCIAL SECTION
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2018
NOTE TABLE OF CONTENTS PAGE
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ...... 39
A. Reporting Entity ...... 39 B. Implementation of New Accounting Principle ...... 40 C. Government-Wide and Fund Financial Statements ...... 40 D. Measurement Focus, Basis of Accounting, and Financial Statement Presentation ...... 41 E. Assets, Deferred Outflows of Resources, Liabilities, Deferred Inflows of Resources and Net Position/Fund Balance ...... 42
2 RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS ...... 46
3 STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY ...... 48
4 DEPOSITS AND INVESTMENTS ...... 49
5 PROPERTY TAXES ...... 52
6 CAPITAL ASSETS AND DEPRECIATION ...... 52
7 PENSION PLANS ...... 54
8 OTHER POST EMPLOYMENT BENEFITS ...... 66
9 RISK MANAGEMENT ...... 69
10 LONG-TERM DEBT ...... 70
11 LEASES AND OTHER CONTRACTUAL COMMITMENTS ...... 74
12 CHANGES IN LONG-TERM LIABILITIES ...... 76
13 CONTINGENCIES AND LITIGATION ...... 76
14 INTERFUND BALANCES AND TRANSFERS ...... 77
15 RECEIVABLE AND PAYABLE BALANCES ...... 78
16 JOINT VENTURES ...... 79
17 POLLUTION REMEDIATION OBLIGATIONS ...... 80
18 TAX ABATEMENTS……………………………………………………………………………… 81
19 OTHER DISCLOSURES………………………………………………………………………… 82
PAGE 38 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT CITY OF EVERETT FINANCIAL SECTION
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the City of Everett are prepared in conformity with generally accepted accounting principles (GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for establishing governmental accounting and financial reporting principles. Significant accounting policies are described below.
A. REPORTING ENTITY
The City of Everett was incorporated on May 4, 1893. The City operates under a Mayor-Council form of government, and, under its charter, has all powers granted to like cities by the constitution and laws of the State of Washington. The City is a general-purpose government providing police, fire, emergency medical service, water distribution, sewage collection and treatment, transit services, street maintenance, planning and zoning, libraries, parks and recreation, and general administrative services - the full range of municipal services contemplated by statute or charter.
As required by generally accepted accounting principles, the City of Everett includes all governmental activities, organizations, and functions (referred to in this note as “organizations,” whether they are structured as funds, departments, agencies, boards, or commissions) for which the City of Everett is financially accountable.
Also included are other organizations for which the nature and significance of their relationship with the City of Everett are such that exclusion would cause the City’s financial statements to be misleading or incomplete. The City of Everett is financially accountable for other entities that are considered component units if: (1) it appoints a voting majority of the governing body and (a) it is able to impose its will on the organization or (b) there is a potential for the organization to provide specific financial benefits to or impose specific financial burdens on the City, or (2) it is the sole corporate member of a not-for-profit corporation.
Each blended and discretely presented component unit has a December 31 year-end.
Blended Component Units – Although legally separate entities, blended component units are, in substance, part of the government’s operations. Therefore, data from these units are combined with data of the primary government.
The Industrial Development Corporation (IDC) of the City of Everett, a public nonprofit corporation, is authorized to facilitate the issuance of tax-exempt nonrecourse revenue bonds to finance industrial development within the corporate boundaries of the City. The local government, through the public corporation, lends its name to confer tax- exempt status on the bonds issued. Neither the local government, the public corporation, nor the state government pledges its credit to repayment of the bonds. The funds for repayment of the bonds come from private lenders and must be repaid by the company for which the industrial development facilities are financed and built. Currently, there are no outstanding bonds.
The entire IDC’s governing body is comprised of City council members and the mayor, who serves ex officio. As a result, the City is the sole corporate member of a not-for-profit corporation. The IDC’s account balances and transactions are included in the City’s financial statements as a special revenue fund. The transactions, if any, are minimal; therefore, separate financial statements have not been issued.
The City of Everett CDE LLC, a community development entity (CDE) formed by the City in February 2009, is a separate legal entity whose purpose is to help alleviate poverty and incentivize investment into low-income community census tracts. The Everett CDE LLC applied for New Market Tax Credits (NMTC) in April of 2009. In October 2009, the US Treasury Department awarded $25 million in NMTC to City of Everett CDE LLC.
The City of Everett CDE LLC is wholly owned and controlled by the City. The volunteer board members, who are appointed by the mayor and approved by City Council, serve solely in an advisory capacity. The CDE’s account balances and transactions are included in the City’s financial statements as a special revenue fund.
Discretely Presented Component Unit – The discretely presented component unit is reported in a separate column in the combined financial statements to emphasize that it is legally separate from the government.
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The Everett Public Facilities District (PFD), a municipal corporation of the State of Washington, was established by City ordinance in March 2001, to finance, design, construct, operate, and maintain a special events center. The PFD is included in the City’s reporting entity as a discretely presented component unit because of the financial accountability relationship. The Board of Directors consists of five members, all appointed by the Everett City Council.
In October 2014, the City issued Limited Tax General Obligation (LTGO) Refunding Bonds, a portion of which was used to refund the 2007 Variable Rate Project Revenue Bonds issued by the PFD. The PFD portion is referred to as the 2014 PFD Refunding Bonds. The City is responsible for the debt service on the entire 2014 LTGO Refunding Bonds. The PFD agrees to reimburse the City the amount of principal and interest paid on the 2014 PFD Refunding Bonds. As of December 31, 2018, the outstanding 2014 PFD Refunding Bonds balance was $24,124,298. As of December 31, 2018, the PFD had outstanding 2018 Refunding Bond debt of $19,625,000. Payments for the PFD’s 2018 debt are expected to be made from PFD tax revenues and net project revenues. Complete financial statements may be obtained at the PFD administrative offices at 2000 Hewitt Avenue, Suite 200, Everett, Washington 98201.
B. IMPLEMENTATION OF NEW ACCOUNTING PRINCIPLES
Effective January 1, 2018, the City adopted the provisions of the following GASB Pronouncements:
Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions – improves the accounting and financial reporting for postemployment benefits other than pensions with regard to providing decision-useful information, supporting assessments of accountability and interperiod equity, and creating additional transparency. This Statement establishes standards of recognizing and measuring liabilities, deferred outflows of resources, deferred inflows of resources, and expense/expenditures. It also establishes standards for note disclosure and required supplementary information requirements. The implementation of this Statement resulted in a restatement decreasing beginning net position of the primary government by $41,709,513.
Statement No. 86, Certain Debt Extinguishment Issues – increases consistency in accounting and financial reporting for debt extinguishments by establishing uniform guidance for derecognizing debt that is defeased in substance, regardless of how cash and other monetary assets placed in an irrevocable trust for the purpose of extinguishing that debt were acquired; enhances consistency in financial reporting of prepaid insurance related to debt that has been extinguished; enhances the decision-usefulness of information in notes to financial statements regarding debt that has been defeased in substance.
Statement No. 89, Accounting for Interest Cost Incurred before the End of a Construction Period – provides users of financial statements with more relevant and comparable information about capital assets and the cost of borrowing for a reporting period for both governmental activities and business-type activities.
C. GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS
The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the non-fiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. Likewise, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable.
The statement of activities demonstrates the degree to which the direct expenses of a given function or program are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or program. Additionally, the City’s cost allocation plan allocates a portion of costs to individual functions. These costs reduce the total costs of the function or program providing the service while being included as part of the program expenses reported for the various functional activities that benefit from these services. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported as general revenues.
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Separate fund financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements.
D. MEASUREMENT FOCUS, BASIS OF ACCOUNTING, AND FINANCIAL STATEMENT PRESENTATION
The government-wide financial statements are reported using the economic resources measurement focus and accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.
Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers revenues available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due.
Several major revenue sources associated with the current period are considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. These major revenues include property taxes; business and occupation taxes; real estate excise taxes; sales tax; natural gas, telephone, and electric taxes; licenses; and interest. Only the portion of special assessment receivable due within the current fiscal period is considered susceptible to accrual as revenue of the current period. All other revenue items are considered measurable and available only when cash is received by the City.
The City reports the following major governmental funds:
The general fund is the City’s operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. The capital improvement reserve fund, which is a capital project fund, accounts for the activity and reserves associated with community, recreational and public safety improvements. The major funding sources for this fund include real estate excise tax, general fund contributions, rental income, and interest earnings. In 2018, Fund 154, which was previously reported as a special revenue fund, was consolidated with Fund 162, which is a capital projects fund. Both funds receive REET revenues that are restricted for capital purposes.
The City reports the following major proprietary funds:
The water and sewer utility fund accounts for the distribution and filtration of water, the collection and treatment of wastewater, the collection and treatment of sewage, and for surface water management. The transit fund accounts for public transit transportation services, including van service for the elderly and persons with disabilities and a commute trip reduction program. The transit fund also accounts for the operation of Everett Station.
Additionally, the City reports the following fund types:
Internal service funds account for the City’s self-insured medical and chiropractic health benefits, general liability, workers’ compensation, and property insurance coverage, fleet management services, telecommunication services, and information technology services provided to other departments on a cost reimbursement basis. Pension trust funds account for the activities of the police and fire pension funds, which accumulate resources for pension benefit payments and post-employment health care benefits to qualified public safety employees. Agency funds are custodial in nature (assets equal liabilities) and do not measure the results of operations. The City uses an agency fund to account for the Downtown Business Improvement Area.
As a general rule, the effect of interfund activity has been eliminated for the government-wide financial statements. Exceptions to this general rule are charges between the government’s water and sewer functions and various other functions of the government. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned.
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Amounts reported as program revenues include 1) charges to customers, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than program revenues. All taxes are considered general revenues.
Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the Utilities Fund, Solid Waste Utility Fund, Transit Fund, Parking Garage Fund, Golf Fund, and the internal service funds are charges to customers for sales and services. Operating expenses for enterprise funds and internal service funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.
E. ASSETS, DEFERRED OUTFLOWS OF RESOURCES, LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND NET POSITION/FUND BALANCE
Cash and Cash Equivalents
It is the City’s policy to invest all temporary cash surpluses. These investments are reported in the balance sheet and statements of net position as cash and cash equivalents. Cash and cash equivalents are defined as cash on hand, demand deposits, and all highly liquid investments, including restricted assets, with original maturities of three months or less. The interest on these investments is prorated to the applicable funds.
Investments – See Note 4.
Receivables
Taxes receivable consist of property taxes and related interest and penalties, electric taxes, telephone taxes, B&O taxes, natural gas use taxes, and sales taxes. Customer accounts receivable consist of amounts owed from private individuals or organizations for goods and services including amounts owed for which billings have not been prepared. Interest receivable consists of amounts earned on investments, notes, and contracts at the end of the year. Notes and contracts receivable consist of amounts loaned to private individuals or organizations primarily in conjunction with the Community Home Improvement Program or the Community Development Block Grant Program. Special assessments receivable, which are recorded when the special assessment is levied, consist of current and delinquent assessments and related interest and penalties.
Amounts Due to and from Other Funds, Interfund Loans, and Advances
Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either “interfund loans receivable/payable” or “advances to/from other funds.” All other outstanding balances between funds are reported as “due to/from other funds.” Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as “internal balances.” Separate schedules of interfund loans, advances and amounts due to and from other funds are presented in Note 14.
Advances to other funds, as reported in the fund financial statements, are offset by a nonspendable fund balance reserve account in applicable governmental funds to indicate that they are not available for appropriation and are not expendable available financial resources.
Amounts Due to and from Other Governmental Units
These accounts include amounts due to or from other governments for grants, entitlements, temporary loans, taxes and charges for services.
Inventories and Prepayments
Inventories of proprietary funds are valued using the weighted average cost method for Utilities and Golf, specific identification for Computer Reserve fund, and the moving average cost method for the Equipment Rental Fund. Inventories of the governmental fund are recorded as expenditures when purchased.
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Certain payments made in the current period reflect costs applicable to future accounting periods. These amounts are reported as “prepayments” in both the government-wide and fund financial statements. Prepaid items are reported using the consumption method and recorded as an expense or expenditure at the time of consumption.
Restricted Assets and Liabilities
Constraints imposed by debt covenants and laws and regulations of other governments require that the City maintain cash accounts, investments and receivables for certain purposes. These accounts contain resources for construction, escrow requirements and debt service.
Restricted assets of governmental activities include the following:
Special assessments receivable $ 96,824
Restricted assets of business-type activities include the following:
Revenue bond debt service accounts $ 2,915,027 Special assessments receivable 2,520 $ 2,917,547
Capital Assets and Depreciation - See Note 6.
Compensated Absences
It is the City’s policy to permit employees to accumulate earned but unused sick leave and vacation benefits.
Employees may accumulate a maximum of between 960 and 1,176 hours of sick leave, depending upon the collective bargaining unit agreement or City ordinance that applies to them. Upon separation from City employment, eligible employees will be compensated between 0 and 588 hours of their sick leave balance, depending upon the applicable collective bargaining agreement or City ordinance.
A long-term liability for a portion of accumulated sick leave is recorded in the government-wide and proprietary fund financial statements using the vesting method. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations or retirements.
Eligible employees may accumulate a maximum of between 384 and 448 hours of vacation leave in accordance with the applicable collective bargaining agreement or City ordinance but may not accumulate more than two full years of earned vacation. At the time of retirement or separation from the City, eligible employees will be compensated for a maximum of 240 to 448 hours of their accrued vacation balance, again depending on the applicable collective bargaining agreement or City ordinance.
All vacation pay is accrued when incurred in the government-wide and proprietary fund financial statements. A liability for these amounts is reported in governmental funds only if they have matured.
Deferred Outflows/Inflows of Resources
In addition to assets, the statement of net position reports a separate section for deferred outflows of resources. This represents a consumption of net position that applies to a future period(s) and will not be recognized as an outflow of resources (as either an expense or expenditure) until that period. The City has two items that qualify for reporting in the statement of net position: deferred loss on refunding and deferred outflows related to pension. A deferred loss on refunding results from the difference in the carrying value of refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt. The deferred outflows related to pensions consist of contributions to the State of Washington pension plans from July 1 to December 31 of the current fiscal year, the difference between expected and actual experience, changes in assumptions, and changes in proportionate share. Changes in proportionate share are deferred and amortized over the average remaining expected service lives of all employees in the plans.
In addition to liabilities, the statement of net position and balance sheet report a separate section for deferred inflows of resources. This represents an acquisition of net position that applies to a future period(s) and that will not be recognized as an inflow of resources (revenue) until that period. The City has four items at the fund level that qualify for reporting in this category: (1) unavailable property taxes recorded as receivables, (2) unavailable special
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assessments recorded as non-current receivable, (3) unavailable interest revenue relating to loans, and (4) deferred inflows related to pensions. Items (1) – (3) are accrued at the entity-wide level and are no longer deferred inflows of resources. At the entity-wide level, the only deferred inflow is related to pension.
Pensions
For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the City’s proportionate share of all state sponsored pension plans in which the City participates (See Note 7) and additions to/deductions from those plans’ fiduciary net positions have been determined on the same basis as they are reported by the Washington State Department of Retirement Systems. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.
For purposes of measuring the net pension liability, deferred outflow of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the City’s Police and Fire pension plans and additions to/deductions from the plan fiduciary net positions have been determined on the same basis as they are reported by the plans. For this purpose, benefit payments are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.
Short-term Debt
Debt with a term of one year or less at the time of issue is considered short-term debt. The City did not issue short- term debt during 2018.
Long-term Debt
In the fund financial statements of proprietary fund types and in the government-wide financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities or proprietary fund type statement of net position. Bond premiums and discounts are deferred and amortized over the life of the bonds. Bonds payable are reported net of the applicable bond premium or discount. Bond insurance costs are reported as prepaid charges and amortized over the term of the related debt. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.
Detailed information on long-term debt outstanding at year-end is presented in Note 10 and Note 12.
Other accrued liabilities
These accounts include accrued employee benefits, customer deposits, and pollution remediation liabilities.
Fund Balances
The components for reporting the City’s governmental fund balances are nonspendable, restricted, committed, assigned and unassigned. Nonspendable fund balance cannot be spent because it is either not in spendable form, such as inventory or prepaid expense, or is legally or contractually required to remain intact. Restricted fund balance includes amounts of which the use is subject to constraints imposed by external parties, including creditors, grantors, and laws and regulations of other governments. Committed fund balance includes amounts that can only be used for specific purposes pursuant to constraints imposed by formal action of the City Council, which is the government’s highest level of decision-making authority. Fund balance commitments are established, modified, or rescinded by City Council action through adoption of an ordinance. Assigned fund balance includes amounts that have an intended use established by the City Council or Administration; however, little or no formal action is required to modify intended use. Unassigned fund balance is the residual net resources of the general fund. The general fund is the only fund that reports a positive unassigned fund balance among governmental funds.
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The City considers restricted amounts to be spent when an expenditure is incurred for which both restricted and unrestricted fund balance are available. The City does not have a formal policy for the use of unrestricted fund balance amounts; therefore, it considers committed amounts used first, followed by assigned amounts, and then unassigned amounts when expenditures are incurred for which amounts in any of unrestricted fund balance classifications could be used.
On February 17, 1993, City Council adopted Ordinance 1928-93, which established a Contingency Reserve Fund. Per the ordinance, funds in the Contingency Reserve Fund can only be expended upon consensus agreement between Administration and City Council. Such expenditures can only be used when extraordinary needs arise that require immediate budget attention. Examples include natural and man-made disasters, civic unrest, and severe economic downturns. The balance in the Contingency Reserve Fund at December 31, 2018 was $4.5 million and is included in the unassigned fund balance of the General Fund. The City maintains a formal policy that fund balance in the General Fund be at least 20 percent of operating revenues.
Fund balances by classification for the year ended December 31, 2018 were as follows:
Capital Other Total General Improvement Governmental Governmental Fund Balances Fund Reserved Fund Funds Funds Nonspendable: Long Term Loans $ 25,822,348 $ - $ - $ 25,822,348 Advances to Other Funds 6,344,168 - - 6,344,168
Restricted for: Tourism Advertising - - 637,542 637,542 Everett TV Equipments Replacement - - 2,324,296 2,324,296 Animal Shelter Operation - - 238,901 238,901 Streets Capital Constructions * - 6,486,834 639,210 7,126,044 City Roads Safety & Improvements - - 1,087,435 1,087,435 Library Books - - 24,132 24,132 Library Misc. Operation - - 93,214 93,214 Capital Projects Debt Services * - - 169,343 169,343 Policing - - 10,043,355 10,043,355 Traffic Improvement Projects - - 7,153,717 7,153,717 CHIP Loans & Community Development - - 15,077,852 15,077,852 Parks Capital Construction 96,484 96,484
Committed to: 1% for Arts Projects 193,312 - - 193,312
Assigned to : Capital Projects - 17,372,263 - 17,372,263 City Debt Service - 11,495,937 28,319 11,524,256 Riverfront Capital Project - - 251,281 251,281 City Streets Improvements - - 3,762,384 3,762,384 Parks & Recreation Maintainance - - 197,966 197,966 Animal Shetler Operation - - 168,512 168,512 Library Books - - 55,067 55,067 Library Misc. Operation - - 212,701 212,701 EMS - - 156,595 156,595 Policing - - 30,792 30,792 Community Redevelopment - - 144,123 144,123 City Roads Safety & Improvements - - 590,377 590,377 Facility Construction Projects - - 131,545 131,545 Parks Capital Construction - - 58,423 58,423
Unassigned: 53,103,063 - - 53,103,063 Total Fund Balances $ 85,462,891 $ 35,355,034 $ 43,373,566 $ 164,191,491
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NOTE 2 - RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS
• Explanation of certain differences between the governmental fund balance sheet and the government- wide statement of net position.
The governmental funds balance sheet includes reconciliation between Total Fund Balances – Governmental Funds and Total Net Position-Governmental Activities as reported in the government-wide statement of net position. Certain items in the reconciliation are a combination of items reported at net. These items are detailed as follows:
Capital assets not reported in total governmental funds: Cost of capital assets $519,175,168 Accumulated depreciation (175,350,473) Net adjustment to increase total fund balances of governmental funds to arrive at net position of governmental activities. $ 343,824,695
Long-term debt not reported in total governmental funds: Bonds payable $ (36,938,633) Compensated absences accrued (13,786,478) Unamortized balance of bond premiums (563,050) Accrued interest payable (48,791) Net adjustment to reduce total fund balances of government funds to arrive at net position of governmental activities $ (51,336,952)
Amounts related to Police and Fire pension benefit: Police pension asset and deferredoutflows $ 331,111 Police OPEB liability and deferred outflows (18,844,889) Fire pension asset and deferred outflows 620,450 Fire OPEB liability and deferred outflows (25,643,192) Net adjustment to reduce total fund balances of governmental funds to arrive at net position of governmental activities. $ (43,536,520)
Internal service funds reported separately with business-type funds: Internal service funds - total fund equity $ 11,083,527 Amount allocated to internal balances - business-type activities (333,796) Net adjustment to increase total fund balances of governmental funds to arrive at net position of governmental activities. $ 10,749,731
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• Explanation of certain differences between the governmental fund statement of revenues, expenditures, and changes in fund balances and the government-wide statement of activities.
The governmental fund statement of revenues, expenditures, and changes in fund balances includes reconciliation between Net changes in fund balances-Total Governmental Funds and Change in net position-Governmental Activities as reported in the government-wide statement of activities. Certain items in the reconciliation are a combination of items reported at net. These items are detailed as follows:
The net effect of various miscellaneous transactions involving capital assets: Book value of disposed assets: Cost of government-type capital assets disposed $ (901,353) Accumulated depreciation of disposed assets 858,660 Assets transferred from internal service to governmental funds 26,721 Net adjustment to increase (reduce) net change in fund balances-total governmental funds to arrive at change in net position of governmental activities $ (15,972)
The amount by which depreciation exceeds capital outlays in the current period: Expenditures that are capitalized $ 11,376,123 Current depreciation expense (11,233,388) Net adjustment to increase (reduce) net change in fund balance-total governmental funds to arrive at change in net position of governmental activities $ 142,735
The net effect of the differences in the treatment of long-term debt and related items: Principal payments on long-term debt $ 6,951,615 Decrease (increase) in interest payable 3,511 Amortization of bond premium 70,381 Net adjustment to increase (reduce) net change in fund balances-total governmental funds to arrive at change in net position of governmental activities $ 7,025,507
The net effect of the differences in the treatment of Police and Fire pension benefits: Police pension expenses $ 31,081 Police OPEB expenses 1,420,361 Fire pension expenses 31,587 Fire OPEB expenses 2,003,676 Net adjustment to increase (reduce) net change in fund balances-total governmental funds to arrive at change in net position of governmental activities $ 3,486,705
The net revenue (expense) of certain activities of internal service funds: Interest revenue allocated from internal service funds to governmental activities $ 180,584 Net expense allocated from internal service funds to governmental activities 1,815,066 Interfund transfers out (26,721) Net adjustment to reduce net change in fund balances-total governmental funds to arrive at change in net position of governmental activities $ 1,968,929
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NOTE 3 - STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
Budget
Scope of Budget
Annual appropriated budgets are adopted for the general fund, special revenue funds, and debt service funds, on a basis consistent with generally accepted accounting principles. Budget-to-actual comparison schedules are presented for these funds.
Annual appropriated budgets are also adopted for the proprietary funds; however, they are “management budgets” and are not required to be presented in these statements. Budgets for capital project funds are adopted at the individual-project level and for fiscal periods that correspond to the projects. Because these funds are not budgeted on an annual basis, budgetary comparisons are not presented.
Legal budgetary control is established at the fund level. Subsidiary revenue and expenditure ledgers are used to compare the budgeted amounts with actual revenues and expenditures. As a management control device, the subsidiary ledgers are used to monitor expenditures for individual functions and activities by object class. Annual appropriations for all operating funds lapse at year-end.
Amending the Budget
The Mayor is authorized to transfer appropriations between programs within any fund; however, any revisions that alter the total expenditures of a fund must be approved by the City Council. When City Council determines that it is in the best interest of the City to increase or decrease the appropriation for a particular fund, it may do so by ordinance approved by one more than the majority after holding public hearings. The budget was amended by ordinance four times in 2018.
The financial statements contain the original and final budget information. The original budget is the first complete appropriated budget. The final budget is the original budget adjusted by all reserves, transfers, allocations, supplemental appropriations, and other legally authorized changes.
Compliance
As of December 31, 2018, the following funds reported deficits in fund balance or net position:
Fund 440 – Golf Fund had a deficit net position of $4,491,434. To eliminate the deficit, the City continues elements of its business plan to increase revenue and decrease expenses.
Fund 507 – Telecommunications Fund had a deficit net position of $890,082. The deficit was due to applying the accounting principle changes of GASB 68. Future increase of interfund assessments should help in eliminating this deficit.
There were no other material violations of finance-related legal or contractual provisions in any of the funds of the City.
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NOTE 4 – DEPOSITS AND INVESTMENTS
Deposits
The City’s deposits and certificates of deposit are entirely covered by the Federal Depository Insurance Corporation (FDIC) or by collateral held in a multiple financial institution collateral pool administered by the Washington Public Deposit Protection Commission (PDPC).
Investments
All investments of the City’s funds are obligations of the U.S. Government, U.S. agency issues, the State of Washington Local Government Investment Pool, or deposits with Washington State Banks that are approved by the Washington State Protection Commission (PDPC) to accept public funds.
U.S. Agency and U.S. Treasury Securities classified in Level 2 are valued by the City’s custodian, Wells Fargo, using quoted prices for similar securities and interest rates.
The City is a participant in the Local Government Investment Pool, The LGIP was created by Chapter 294, Laws of 1986 and began operations in July 1986. The LGIP is a short-term investment pool of the state of Washington, available to eligible governmental entities as defined by Revised Code of Washington (RCW) 43.250.020. Participation is voluntary. The LGIP is managed and operated by the Office of the State Treasurer (OST). The State Finance Committee is the administrator of the statute that created the pool and adopts appropriate rules. The State Treasurer is responsible for establishing the investment policy for the pool and reviews the policy annually. Any proposed changes are reviewed by the LGIP Advisory Committee. The terms of the policy are designed to ensure the safety and liquidity of the funds deposited in the LGIP. The State Treasurer and designated investment officers adhere to all restrictions on the investment of funds established by law and policy. The LGIP portfolio is invested in a manner that meets the maturity, quality, diversification and liquidity requirements set forth by the GASB for external investment pools that elect to measure, for financial reporting purposes, investments at amortized cost. The funds are limited to high quality obligations with regulated maximum and average maturities, the effect of which is to minimize both market and credit risk. The LGIP does not have any legally binding guarantees of share value.
The LGIP transacts with its participants at a stable net asset value per share of $1.00, the same method used for reporting. Participants may contribute and withdraw funds on a daily basis. The LGIP does not impose liquidity fees or redemption gates on participant withdrawals.
The Office of the State Treasurer prepares a stand-alone LGIP financial report. A copy of the report is available from the Office of the State Treasurer, PO Box 40200, Olympia, Washington 98504-0200, online at http://www.tre.wa.gov.
Interest Rate Risk Interest rate risk is the risk that changes in interest rates of debt instruments will adversely affect the fair value of an investment. To mitigate the effect of interest rate risk, the portfolio is invested in high quality, highly liquid obligations with limited maximum and average maturities. The City’s Investment Policy limits the effective duration of the portfolio to a maximum of five, and the maximum maturity of any investment to 10 years.
The LGIP is a short-term investment pool. To provide for safety and liquidity of funds, the LGIP consists of only those high quality, short-term instruments authorized by statute. Investments are restricted to fixed rate securities that mature in 397 days or less, except for securities utilized in repurchase agreements and U.S. government and supranational floating or variable rate securities which may have a maximum maturity of 762 days, provided they have reset dates within one year and that on any reset date can reasonably be expected to have a fair value that approximates their amortized cost. The portfolio’s weighted average maturity (WAM) will not exceed 60 days, and a weighted average life (WAL) will not exceed 120 days.
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 49 CITY OF EVERETT FINANCIAL SECTION
The following schedule presents the investments and related maturities as of fiscal year end.
Maturity (in Years) Investment Type Fair Value Less than 1 1 - 5 Over 5 years U.S. Agency Securities - Primary Gov't $ 182,088,810 $ 80,239,197 $ 101,849,614 - U.S. Agency Securities - Pension 41,418,081 4,289,582 24,406,668 12,721,830 Total Investments $ 223,506,891 $ 84,528,779 $ 126,256,282 $ 12,721,830
Maturity (in Years) Deposits Amortized Cost Less than 1 1 - 5 Over 5 years LGIP $ 44,118,767 $ 44,118,767 RBC Deposit 59,888 59,888
Total Deposits $ 44,178,655 $ 44,178,655
Total $ 267,685,546 $ 128,707,434 $ 126,256,282 $ 12,721,830
Fair Value Hierarchy Securities classified as Level 1 in the fair value hierarchy are valued using prices quoted in active markets for identical securities, Level 2 securities are valued using observable inputs, and Level 3 securities are valued using unobservable inputs. U.S. Agency and U.S. Treasury Securities classified in Level 2 are valued by the City’s custodian, Wells Fargo, using quoted prices for similar securities and interest rates. Well’s Fargo’s primary vendor source is Interactive Data (IDC). The pricing methodology includes obtaining feeds from a number of live data sources, including active market makers and inter-dealer brokers. Sources are reviewed based on their historical accuracy for individual issues and maturity ranges. Secondary vendor sources include Bloomberg, Pricing Direct, and Thomson Reuters. The level of fair value measurement is based on the lowest level of significant input for the security type in its entirety. There are no Level 1 or Level 3 security classifications to report.
LGIP investments are stated at amortized cost which approximates fair value. For bank deposits and repurchase agreements, the cost-based measure equals their carrying amount. Monthly, the fair value net asset value per share is calculated and compared to the amortized cost net asset value per share to verify that the LGIP’s shadow price does not deviate by more than one half of 1 percent from the amortized cost of the portfolio.
Quoted Prices in Active Markets Significant Other Significant for Identical Observable Unobservable Asse ts Inputs Inputs Investments by Fair Value Total (Level 1) (Level 2) (Level 3) Agencies FFCB $ 57,830,704 $ - $ 57,830,704 $ - FHLB $ 47,777,980 - 47,777,980 - FHLMC $ 35,918,667 - 35,918,667 - FNMA $ 40,561,460 - 40,561,460 - Total - Primary Gov't $ 182,088,810 $ - $ 182,088,810 $ -
Agencies FFCB $ 10,884,035 $ - $ 10,884,035 $ -
FHLB $ 10,859,619 - 10,859,619 -
FHLMC $ 9,635,033 - 9,635,033 - FNMA $ 10,039,393 - 10,039,393 - Total - LEOFF 1 Pension $ 41,418,081 $ - $ 41,418,081 $ -
Deposits LGIP $ 44,118,767 RBC Deposit $ 59,888 Total Deposits $ 44,178,655
Total By Fair Value $ 267,685,546
PAGE 50 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT CITY OF EVERETT FINANCIAL SECTION
Credit Risk Safety of principal is the foremost objective of the City’s investment program. City investments are undertaken in a conservative manner that seeks to ensure the preservation of the portfolio’s capital. The City holds investments in Government Agencies, all of which hold AA+ ratings from Standard & Poor’s and Aaa from Moody’s Investor Services.
Concentration of Credit Risk Concentration of credit risk is the risk of loss attributed to the magnitude of a government’s investment in a single issuer. The City mitigates concentration of credit risk by limiting the purchase of securities of any one issuer, with the exception of U.S. Treasury and the Local Government Investment Pool as follows:
Maximum Holdings Maximum Holdings Issuer Type Portfolio Issuer U.S. Treasury Notes, Bonds or 100% N/A Certificates Government Sponsored Enterprises 90% 40% Investment Deposits 20% 10% Certificates of Deposit 20% 10% Bankers Acceptances 20% 5% Repurchase Agreements 20% 10% Washington State Bonds 20% N/A Local Government Bonds 20% 5% LGIP 100% N/A Commercial Paper 10% 5%
At December 31, 2018, U.S. Agencies comprised 81 percent of the City’s portfolio, including Federal Farm Credit Bureau (26 percent), Federal Home Loan Bank (21 percent), Federal Home Loan Mortgage Corporation (16 percent), and Federal National Mortgage Association (18 percent). In addition, 19 percent of the portfolio was in the LGIP.
Custodial Credit Risk Custodial credit risk is the risk that, in the event a depository institution or counterparty fails, the City will not be able to recover the value of its deposits, investments or collateral securities that are in the possession of an outside party. Investments held as deposits in financial institutions are insured by the Federal Deposit Insurance Corporation and/or collateralized.
Collateral protection is administered by the Washington Public Deposit Protection Commission (PDPC). The PDPC, created by the Legislature per Chapter 39.58 of the Revised Code of Washington, constitutes a multiple financial institution collateral pool comprised of securities pledged to secure uninsured public deposits. Pledged securities are held by the PDPC’s agent in the name of the collateral pool.
The City’s investment policy requires that securities purchased be held by a custodian, acting as an independent third party, in its safekeeping or trust department.
Interest Allocation
Interest earnings are distributed monthly among funds based on average cash balances. However, in certain cases where a fund’s resources derive from another fund, investment income is reported in the fund that is providing the resources rather than the fund that reports the underlying investment. These special distributions include the following:
Fund Reporting Investment Fund Receiving Investment Income Fund 115 - Special Projects Fund 002 - General Fund Fund 160 - Rainy Day Fund Fund 002 - General Fund Fund 162 - Capital Improvement Fund - CIP 4 Fund 002 - General Fund Fund 342 – City Facilities Construction Fund Fund 002 - General Fund Fund 354 – Parks CIP 3 Construction Fund Fund 154 – Real Estate Excise Tax Fund
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 51 CITY OF EVERETT FINANCIAL SECTION
NOTE 5 - PROPERTY TAXES
The Snohomish County Treasurer acts as an agent to collect property taxes levied in the county for all taxing authorities. Properties listed on the County tax rolls as of May 31 are included in the annual tax levy the following January 1. New construction through August 31 is included in the annual tax levy the following January 1.
Property taxes levied by the County Assessor are based on 100% of market value. The taxes are collected by the County Treasurer and become a lien on the first day of the levy year and may be paid in two equal installments if the total amount exceeds $50. The first half of real property taxes is due April 30 and the balance is due October 31. Delinquent taxes bear interest at the rate of 12% and are subject to additional penalties of 3% to 11% if not paid as scheduled.
Property tax revenues are recognized in the year levied. At year-end, property tax revenues are recognized for collections to be distributed by the County Treasurer within sixty days and an adjustment to taxes receivable and deferred inflows of resources to account for delinquent taxes. No allowance for uncollectible taxes is established because delinquent taxes are considered fully collectible.
The tax rate for general City operations is limited by State law (RCW 84.52.043) to $3.375 per $1,000 of assessed value. An additional amount, up to $0.225, may be levied as a contribution to the Firemen's Pension Fund if a report by a qualified actuary indicates that additional funds are required. The City maintains a Firemen's Pension Fund; thus the limit is $3.600. This amount may be reduced for any of the following reasons:
(1) RCW 84.52.050 limits the total regular property taxes to one percent of assessed valuation or $10 per $1,000 of value. If the taxes of all districts exceed this amount, each is proportionately reduced until the total is at or below the one percent limit.
(2) Initiative 747 passed by the voters in November of 2001 limits the amount by which a taxing jurisdiction can increase the amount of its regular property tax levy to the lesser of the Implicit Price Deflator (IPD) or one percent, plus adjustments for new construction and annexations. Tax increases higher than one percent must be approved by the voters at an election held according to RCW 84.55.050. A simple majority vote is required.
For 2018, the City levied the following property taxes on an assessed value of $16,741,280,387. The special levies identified in the table were approved by the voters and are not subject to the limitations listed above.
LEVY RATE TOTAL PURPOSE OF LEVY PER $1,000 LEVY AMOUNT
General government $2.2023 $ 36,869,047 Emergency medical services 0.4018 6,726,793
TOTAL CITY LEVY $2.6041 $ 43,595,840
NOTE 6 - CAPITAL ASSETS AND DEPRECIATION
Capital assets consist of land, buildings, improvements, machinery and equipment, infrastructure (e.g., roads, bridges, traffic controls, library collections, and similar items), and intangibles (e.g., computer software and other intellectual property) with an estimated useful life of more than one year. Land is capitalized at cost with no minimum threshold. Buildings, improvements, machinery and equipment and intangibles are capitalized when the cost of an individual item exceeds $5,000. Infrastructure assets are capitalized when the cost equals or exceeds $200,000. Assets are valued at actual historical cost or estimated historical cost if actual historical cost is not available. Donated capital assets and infrastructure are valued at acquisition value on the date received. Capital assets financed by capital leases are recorded at the present value of lease payments. Renewals and betterments are capitalized and depreciated over the remaining useful lives of the related properties. The cost of normal maintenance and repair of both governmental and business-type assets is charged to operations as incurred.
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Capital assets are reported in the applicable governmental or business-type columns in the government-wide financial statements. Capital assets of the internal service funds are reported with governmental assets in the statement of net position.
A summary of changes in governmental capital assets appears as follows:
BEGINNING ENDING BALANCE BALANCE GOVERNMENTAL ACTIVITIES 01/01/18 ADDITIONS TRANSFERS DEL ET IONS 12/31/18 Capital assets, not being depreciated or amortized: Land $ 60,409,823 $ - $ - $ - $ 60,409,823 Construction in progress* 3,035,795 4,664,537 (1,495,798) (1,518,724) 4,685,810 Total capital assets, not being depreciated or amortized 63,445,618 4,664,537 (1,495,798) (1,518,724) 65,095,633 Capital assets, being depreciated or amortized: Buildings 102,934,512 - 140,454 - 103,074,966 Improvements other than buildings 41,768,509 - 1,326,369 - 43,094,878 Infrastructure 271,097,872 3,678,030 28,975 - 274,804,877 Machinery and equipment 33,092,418 4,846,185 - (954,828) 36,983,775 Intangibles 1,290,349 41,149 - - 1,331,498 Total capital assets being depreciated or amortized 450,183,660 8,565,364 1,495,798 (954,828) 459,289,994 Less accumulated depreciation or amortization for: Buildings (42,474,080) (2,465,359) - - (44,939,439) Improvements other than buildings (23,655,242) (1,421,765) - - (25,077,007) Infrastructure (80,042,814) (5,844,877) - - (85,887,691) Machinery and equipment (21,275,914) (1,828,495) - 912,098 (22,192,311) Intangibles (1,030,443) (94,044) - - (1,124,487) Total accumulated depreciation and amortization (168,478,493) (11,654,540) - 912,098 (179,220,935) Total capital assets being depreciated or amortized, net 281,705,167 (3,089,176) 1,495,798 (42,730) 280,069,059 Governmental activities capital assets, net $ 345,150,785 $ 1,575,361 $ - $ (1,561,454) $ 345,164,692
* The deletion of construction in progress costs of $1,518,724 in governmental activities represents project costs that did not result in a capital asset and that were expensed in the current year.
A summary of changes in business-type capital assets appears as follows:
BEGINNING ENDING BALANCE BALANCE BUSINESS-TYPE ACTIVITIES 01/01/18 ADDITIONS TRANSFERS DEL ET IONS 12/31/18
Capital assets, not being depreciated: Land $ 37,845,776 $ 137,577 $ - $ - $ 37,983,353 Construction in progress* 20,141,694 24,790,468 (17,060,826) (257,959) 27,613,377 Total capital assets, not being depreciated 57,987,470 24,928,045 (17,060,826) (257,959) 65,596,730 Capital assets, being depreciated Buildings 232,089,039 - 10,326,552 - 242,415,591 Improvements other than buildings 594,563,859 542,668 6,734,274 - 601,840,801 Infrastructure 1,917,502 200,639 - - 2,118,141 Machinery and equipment 41,983,747 5,928,825 - (1,362,302) 46,550,271 Intangibles 16,201,205 - - - 16,201,205 Total capital assets being depreciated 886,755,352 6,672,132 17,060,826 (1,362,302) 909,126,009
Less accumulated depreciation for: Buildings (80,082,841) (4,686,464) - - (84,769,305) Improvements other than buildings (196,078,797) (12,120,150) - - (208,198,947) Infrastructure (575,250) (95,875) - - (671,126) Machinery and equipment (26,184,826) (2,416,928) - 953,242 (27,648,512) Intangibles (6,763,497) (271,064) - - (7,034,561) Total accumulated depreciation (309,685,211) (19,590,481) - 953,242 (328,322,451) Total assets being depreciated, net 577,070,141 (12,918,349) 17,060,826 (409,060) 580,803,558 Business-type activities capital assets, net $ 635,057,611 $ 12,009,696 $ - $ (667,019) $ 646,400,288
* The deletion of construction in progress costs of $257,959 in business-type activities represents project costs that did not result in a capital asset and that were expensed in the current year.
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 53 CITY OF EVERETT FINANCIAL SECTION
Depreciation
Annual depreciation is recorded as an expense of the related activity. Provision for depreciation is computed using the straight-line method over estimated service life as follows. Certain facts or circumstances of specific assets may require amortization over shorter or longer periods.
Estimated Service Life Buildings 25-50 Years Improvements Other Than Buildings 5-50 Years Infrastructure 10-100 Years Machinery and Equipment 2-20 Years Intangibles 2-45 Years
Depreciation expense was charged to functions/programs of the primary government as follows:
GOVERNMENTAL ACTIVITIES General government services $ 499,730 Police 758,915 Fire 734,298 Engineering & construction services 91,655 Transportation 5,518,662 Community services 357,049 Library 811,160 Culture and recreation 2,412,397 Judicial 175,700 Social Services - Internal service allocated to business-type activities 294,974 Total depreciation - governmental activities $ 11,654,540 BUSINESS-TYPE ACTIVITIES Water $ 7,403,034 Sewer 8,661,432 Solid waste 277,176 Parking 12,503 Transit 2,994,821 Golf 536,489 Internal service allocated to business-type activities (294,974) Total depreciation - business-type activities $ 19,590,481
Total depreciation - all activities $ 31,245,021
NOTE 7 - PENSION PLANS
The following table represents the aggregate pension amounts for all State-sponsored plans for the year 2018:
Aggregate Pension Amounts - All Plans Pension liabilities $ (30,914,239) Pension assets 34,039,374 Deferred outflows of resources 9,169,771 Deferred inflows of resources (22,541,709) Pension expense/expenditures (1,315,719)
State Sponsored Pension Plans
Substantially all City’s full-time and qualifying part-time employees participate in one of the following statewide retirement systems administered by the Washington State Department of Retirement Systems, under cost-sharing,
PAGE 54 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT CITY OF EVERETT FINANCIAL SECTION multiple-employer public employee defined benefit and defined contribution retirement plans. The state Legislature establishes, and amends, laws pertaining to the creation and administration of all public retirement systems.
The Department of Retirement Systems (DRS), a department within the primary government of the State of Washington, issues a publicly available comprehensive annual financial report (CAFR) that includes financial statements and required supplementary information for each plan. The DRS CAFR may be obtained by writing to:
Department of Retirement Systems Communications Unit P.O. Box 48380 Olympia, WA 98540-8380
Or the DRS CAFR may be downloaded from the DRS website at www.drs.wa.gov.
Public Employees’ Retirement System (PERS)
PERS members include elected officials; state employees; employees of the Supreme, Appeals and Superior Courts; employees of the legislature; employees of district and municipal courts; employees of local governments; and higher education employees not participating in higher education retirement programs. PERS is comprised of three separate pension plans for membership purposes. PERS plans 1 and 2 are defined benefit plans, and PERS plan 3 is a defined benefit plan with a defined contribution component.
PERS Plan 1 provides retirement, disability and death benefits. Retirement benefits are determined as two percent of the member’s average final compensation (AFC) times the member’s years of service. The AFC is the average of the member’s 24 highest consecutive service months. Members are eligible for retirement from active status at any age with at least 30 years of service, at age 55 with at least 25 years of service, or at age 60 with at least five years of service. Members retiring from active status prior to the age of 65 may receive actuarially reduced benefits. Retirement benefits are actuarially reduced to reflect the choice of a survivor benefit. Other benefits include duty and non-duty disability payments, an optional cost-of-living adjustment (COLA), and a one-time duty-related death benefit, if found eligible by the Department of Labor and Industries. PERS 1 members were vested after the completion of five years of eligible service. The plan was closed to new entrants on September 30, 1977.
Contributions
The PERS Plan 1 member contribution rate is established by State statute at 6 percent. The employer contribution rate is developed by the Office of the State Actuary and includes an administrative expense component that is currently set at 0.18 percent. Each biennium, the state Pension Funding Council adopts Plan 1 employer contribution rates. The PERS Plan 1 required contribution rates (expressed as a percentage of covered payroll) for 2018 were as follows:
PERS Plan 1 Actual Contribution Rates: Employer Employee* PERS Plan 1 7.49% 6.00% PERS Plan 1 UAAL 5.03% Administrative Fee 0.18% Total 12.70% 6.00%
* For employees participating in JBM, the contribution rate was 12.26%.
PERS Plan 2/3 provides retirement, disability and death benefits. Retirement benefits are determined as two percent of the member’s average final compensation (AFC) times the member’s years of service for Plan 2 and 1 percent of AFC for Plan 3. The AFC is the average of the member’s 60 highest-paid consecutive service months. There is no cap on years of service credit. Members are eligible for retirement with a full benefit at 65 with at least five years of service credit. Retirement before age 65 is considered an early retirement. PERS Plan 2/3 members who have at least 20 years of service credit and are 55 years of age or older, are eligible for early retirement with a benefit that is reduced by a factor that varies according to age for each year before age 65. PERS Plan 2/3 members who have 30 or more years of service credit and are at least 55 years old can retire under one of two provisions:
• With a benefit that is reduced by three percent for each year before age 65; or
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 55 CITY OF EVERETT FINANCIAL SECTION
• With a benefit that has a smaller (or no) reduction (depending on age) that imposes stricter return-to-work rules.
PERS Plan 2/3 members hired on or after May 1, 2013 have the option to retire early by accepting a reduction of five percent for each year of retirement before age 65. This option is available only to those who are age 55 or older and have at least 30 years of service credit. PERS Plan 2/3 retirement benefits are also actuarially reduced to reflect the choice of a survivor benefit. Other PERS Plan 2/3 benefits include duty and non-duty disability payments, a cost-of- living allowance (based on the CPI), capped at three percent annually and a one-time duty related death benefit, if found eligible by the Department of Labor and Industries. PERS 2 members are vested after completing five years of eligible service. Plan 3 members are vested in the defined benefit portion of their plan after ten years of service; or after five years of service if 12 months of that service are earned after age 44.
PERS Plan 3 defined contribution benefits are totally dependent on employee contributions and investment earnings on those contributions. PERS Plan 3 members choose their contribution rate upon joining membership and have a chance to change rates upon changing employers. As established by statute, Plan 3 required defined contribution rates are set at a minimum of 5 percent and escalate to 15 percent with a choice of six options. Employers do not contribute to the defined contribution benefits. PERS Plan 3 members are immediately vested in the defined contribution portion of their plan.
Contributions
The PERS Plan 2/3 employer and employee contribution rates are developed by the Office of the State Actuary to fully fund Plan 2 and the defined benefit portion of Plan 3. The Plan 2/3 employer rates include a component to address the PERS Plan 1 UAAL and an administrative expense that is currently set at 0.18 percent. Each biennium, the state Pension Funding Council adopts Plan 2 employer and employee contribution rates and Plan 3 contribution rates. The PERS Plan 2/3 required contribution rates (expressed as a percentage of covered payroll) for 2018 were as follows:
PERS Plan 2/3 Actual Contribution Rates Employer 2/3 Employee 2* PERS Plan 2/3 7.49% 7.38% PERS Plan 1 UAAL 5.03% Administrative Fee 0,18% Employee PERS Plan 3 Varies Total 12.70% 7.38%
* For employees participating in JBM, the contribution rate was 18.45%.
The City’s actual PERS plan contributions were $3,322,499 to PERS Plan 1 and $4,592,193 to PERS Plan 2/3 for the year ended December 31, 2018.
Public Safety Employees’ Retirement System (PSERS)
PSERS Plan 2 was created by the 2004 Legislature and became effective July 1, 2006. To be eligible for membership, an employee must work on a full time basis and:
• Have completed a certified criminal justice training course with authority to arrest, conduct criminal investigations, enforce the criminal laws of Washington, and carry a firearm as part of the job; or
• Have primary responsibility to ensure the custody and security of incarcerated or probationary individuals; or
• Function as a limited authority Washington peace officer, as defined in RCW 10.93.020; or
• Have primary responsibility to supervise eligible members who meet the above criteria.
PSERS membership includes:
• PERS 2 or 3 employees hired by a covered employer before July 1, 2006, who met at least one of the PSERS eligibility criteria and elected membership during the period of July 1, 2006 to September 30 2006; and
PAGE 56 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT CITY OF EVERETT FINANCIAL SECTION
• Employees hired on or after July 1, 2006 by a covered employer, that meet at least one of the PSERS eligibility criteria.
PSERS covered employers include:
• Certain State of Washington agencies (Department of Corrections, Department of Natural Resources, Gambling Commission, Liquor and Cannabis Board, Parks and Recreation Commission, and Washington State Patrol),
• Washington State Counties,
• Washington State Cities (except for Seattle, Spokane, and Tacoma),
• Correctional entities formed by PSERS employers under the Interlocal Cooperation Act.
PSERS Plan 2 provides retirement, disability and death benefits. Retirement benefits are determined as two percent of the average final compensation (AFC) for each year of service. The AFC is based on the member’s 60 consecutive highest creditable months of service. Benefits are actuarially reduced for each year that the member’s age is less than 60 (with ten or more service credit years in PSERS), or less than 65 (with fewer than ten service credit years). There is no cap on years of service credit. Members are eligible for retirement at the age of 65 with five years of service; or at the age of 60 with at least ten years of PSERS service credit; or at age 53 with 20 years of service. Retirement before age 60 is considered an early retirement. PSERS members who retire prior to the age of 60 receive reduced benefits. If retirement is at age 53 or older with at least 20 years of service, a three percent per year reduction for each year between the age at retirement and age 60 applies. PSERS Plan 2 retirement benefits are actuarially reduced to reflect the choice of a survivor benefit. Other benefits include duty and non-duty disability payments, an optional cost-of living adjustment (COLA), and a one-time duty-related death benefit, if found eligible by the Department of Labor and Industries. PSERS Plan 2 members are vested after completing five years of eligible service.
Contributions
The PSERS Plan 2 employer and employee contribution rates are developed by the Office of the State Actuary to fully fund Plan 2. The Plan 2 employer rates include components to address the PERS Plan 1 unfunded actuarial accrued liability and administrative expense currently set at 0.18 percent. Each biennium, the state Pension Funding Council adopts Plan 2 employer and employee contribution rates.
The PSERS Plan 2 required contribution rates (expressed as a percentage of current-year covered payroll) for 2018 were as follows:
PSERS Plan 2 Actual Contribution Rates Employer Employee PSERS Plan 2 6.74% 6.74% PERS Plan 1 UAAL 5.03% Administrative Fee 0.18% Total 11.95% 6.74%
The City’s actual plan contributions were $61,315 to PSERS Plan 2 for the year ended December 31, 2018.
Law Enforcement Officers’ and Fire Fighters’ Retirement System (LEOFF)
LEOFF membership includes all full-time, fully compensated, local law enforcement commissioned officers, firefighters, and as of July 24, 2005, emergency medical technicians. LEOFF is comprised of two separate defined benefit plans.
LEOFF Plan 1 provides retirement, disability and death benefits. Retirement benefits are determined per year of service calculated as a percent of final average salary (FAS) as follows:
• 20+ years of service – 2.0% of FAS • 10-19 years of service – 1.5% of FAS • 5-9 years of service – 1% of FAS
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The FAS is the basic monthly salary received at the time of retirement, provided a member has held the same position or rank for 12 months preceding the date of retirement. Otherwise, it is the average of the highest consecutive 24 months’ salary within the last ten years of service. Members are eligible for retirement with five years of service at the age of 50. Other benefits include duty and non-duty disability payments, a cost-of living adjustment (COLA), and a one-time duty-related death benefit, if found eligible by the Department of Labor and Industries. LEOFF 1 members were vested after the completion of five years of eligible service. The plan was closed to new entrants on September 30, 1977.
Contributions
Starting on July 1, 2000, LEOFF Plan 1 employers and employees contribute zero percent, as long as the plan remains fully funded. The LEOFF Plan I had no required employer or employee contributions for fiscal year 2018. Employers paid only the administrative expense of 0.18 percent of covered payroll.
LEOFF Plan 2 provides retirement, disability and death benefits. Retirement benefits are determined as two percent of the final average salary (FAS) per year of service (the FAS is based on the highest consecutive 60 months). Members are eligible for retirement with a full benefit at 53 with at least five years of service credit. Members who retire prior to the age of 53 receive reduced benefits. If the member has at least 20 years of service and is age 50, the reduction is three percent for each year prior to age 53. Otherwise, the benefits are actuarially reduced for each year prior to age 53. LEOFF 2 retirement benefits are also actuarially reduced to reflect the choice of a survivor benefit. Other benefits include duty and non-duty disability payments, a cost-of-living allowance (based on the CPI), capped at three percent annually and a one-time duty-related death benefit, if found eligible by the Department of Labor and Industries. LEOFF 2 members are vested after the completion of five years of eligible service.
Contributions
The LEOFF Plan 2 employer and employee contribution rates are developed by the Office of the State Actuary to fully fund Plan 2. The employer rate includes an administrative expense component set at 0.18 percent. Plan 2 employers and employees are required to pay at the level adopted by the LEOFF Plan 2 Retirement Board.
Effective July 1, 2017, when a LEOFF employer charges a fee or recovers costs for services rendered by a LEOFF 2 member to a non-LEOFF employer, the LEOFF employer must cover both the employer and state contributions on the LEOFF 2 basic salary earned for those services.
The LEOFF Plan 2 required contribution rates (expressed as a percentage of covered payroll) for 2018 were as follows:
LEOFF Plan 2 Actual Contribution Rates Employer Employee State and local governments 5.25% 8.75% Administrative Fee 0.18% Total 5.43% 8.75%
The City’s actual contributions to the plan were $2,349,334 for the year ended December 31, 2018.
The Legislature, by means of a special funding arrangement, appropriates money from the state General Fund to supplement the current service liability and fund the prior service costs of Plan 2 in accordance with the recommendations of the Pension Funding Council and the LEOFF Plan 2 Retirement Board. This special funding situation is not mandated by the state constitution and could be changed by statute. For the state fiscal year ending June 30, 2018, the state contributed $68,152,127 to LEOFF Plan 2. The amount recognized by the City as its proportionate share of this amount is $1,434,601.
Actuarial Assumptions
The total pension liability (TPL) for each of the DRS plans was determined using the most recent actuarial valuation completed in 2018 with a valuation date of June 30, 2017. The actuarial assumptions used in the valuation were based on the results of the Office of the State Actuary’s (OSA) 2007-2012 Experience Study and the 2017 Economic Experience Study.
Additional assumptions for subsequent events and law changes are current as of the 2017 actuarial valuation report. The TPL was calculated as of the valuation date and rolled forward to the measurement date of June 30, 2018. Plan
PAGE 58 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT CITY OF EVERETT FINANCIAL SECTION liabilities were rolled forward from June 30, 2017, to June 30, 2018, reflecting each plan’s normal cost (using the entry-age cost method), assumed interest and actual benefit payments.
• Inflation: 2.75% total economic inflation; 3.50% salary inflation
• Salary increases: In addition to the base 3.50% salary inflation assumption, salaries are also expected to grow by promotions and longevity.
• Investment rate of return: 7.4%
Mortality rates were based on the RP-2000 report’s Combined Healthy Table and Combined Disabled Table, published by the Society of Actuaries. The OSA applied offsets to the base table and recognized future improvements in mortality by projecting the mortality rates using 100 percent Scale BB. Mortality rates are applied on a generational basis; meaning, each member is assumed to receive additional mortality improvements in each future year throughout his or her lifetime.
There were changes in methods and assumptions since the last valuation.
• Lowered the valuation interest rate from 7.70% to 7.50% for all systems except LEOFF 2. For LEOFF 2 the valuation interest rate was lowered from 7.50% to 7.40%.
• Lowered the assumed general salary growth from 3.75% to 3.50% for all systems.
• Lowered assumed inflation from 3.00% to 2.75% for all systems.
• Modified how the valuation software calculates benefits paid to remarried duty-related death survivors of LEOFF 2 members.
• Updated the trend that the valuation software uses to project medical inflation for LEOFF 2 survivors of a duty- related death, and for certain LEOFF 2 medical-related duty disability benefits.
Discount Rate
The discount rate used to measure the total pension liability for all DRS plans was 7.4 percent.
To determine that rate, an asset sufficiency test included an assumed 7.5 percent long-term discount rate to determine funding liabilities for calculating future contribution rate requirements. (All plans use 7.5 percent except LEOFF 2, which has assumed 7.4 percent). Consistent with the long-term expected rate of return, a 7.4 percent future investment rate of return on invested assets was assumed for the test. Contributions from plan members and employers are assumed to continue being made at contractually required rates (including PERS 2/3, PSERS 2, SERS 2/3, and TRS 2/3 employers, whose rates include a component for the PERS 1, and TRS 1 plan liabilities). Based on these assumptions, the pension plans’ fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return of 7.4 percent was used to determine the total liability.
Long-Term Expected Rate of Return
The long-term expected rate of return on the DRS pension plan investments of 7.4 percent was determined using a building-block-method. In selecting this assumption, the Office of the State Actuary (OSA) reviewed the historical experience data, considered the historical conditions that produced past annual investment returns, and considered capital market assumptions and simulated expected investment returns provided by the Washington State Investment Board (WSIB). The WSIB uses the capital market assumptions and their target asset allocation to simulate future investment returns over various time horizons.
Estimated Rates of Return by Asset Class
Best estimates of arithmetic real rates of return for each major asset class included in the pension plan’s target asset allocation as of June 30, 2018, are summarized in the table below. The inflation component used to create the table is 2.2 percent and represents the WSIB’s most recent long-term estimate of broad economic inflation.
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 59 CITY OF EVERETT FINANCIAL SECTION
% Long-Term Expected Asset Class Target Allocation Real Rate of Return Arithmetic Fixed Income 20% 1.70% Tangible Assets 7% 4.90% Real Estate 18% 5.80% Global Equity 32% 6.30% Private Equity 23% 9.30% 100%
Sensitivity of the Net Pension Liability/(Asset)
The table below presents the City’s proportionate share of the net pension liability calculated using the discount rate of 7.4 percent, as well as what the City’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower (6.4 percent) or 1-percentage point higher (8.4 percent) than the current rate.
1% Decrease Current Discount 1% Increase (6.4%) Rate (8.4%) (7.4%) PERS 1 $ 26,118,015 $ 21,252,516 $ 17,038,011 PERS 2/3 44,181,016 9,659,114 (18,644,991) PSERS 2 271,068 2,609 (208,043) LEOFF 1 (6,443,020) (8,099,136) (9,524,957) LEOFF 2 (3,449,566) (25,940,238) (44,283,996)
Pension Plan Fiduciary Net Position
Detailed information about the State’s pension plans’ fiduciary net position is available in the separately issued DRS financial report.
Pension Liabilities (Assets), Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions
At June 30, 2018, the City reported a total pension liability of $30,914,239 and pension assets of $34,039,374 for its proportionate share of the net pension liabilities as follows:
Liability (or Asset) PERS 1 $21,252,516 PERS 2/3 9,659,114 PSERS 2 2,609 LEOFF 1 (8,099,136) LEOFF 2 (25,940,238)
The amount of the asset reported above for LEOFF Plans 1 and 2 reflects a reduction for State pension support provided to the city. The amount recognized by the City as its proportionate share of the net pension asset, the related State support, and the total portion of the net pension asset that was associated with the City were as follows:
LEOFF 1 Asset LEOFF 2 Asset Employer’s proportionate share $ 8,099,136 $ 25,940,238 State’s proportionate share of the net pension asset associated with the employer 54,782,355 16,795,815 TOTAL 62,881,491 42,736,053
PAGE 60 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT CITY OF EVERETT FINANCIAL SECTION
At June 30, the City’s proportionate share of the collective net pension liabilities was as follows:
Proportionate Proportionate Change in Share 6/30/17 Share 6/30/18 Proportion PERS 1 0.485018% 0.475870% (0.009148%) PERS 2/3 0.577585% 0.565717% (0.011868%) PSERS 2 0.211104% 0.210589% (0.000515%) LEOFF 1 0.439348% 0.446110% (0.006762%) LEOFF 2 1.302978% 1.277707% (0.025271%)
Employer contribution transmittals received and processed by the DRS for the fiscal year ended June 30 are used as the basis for determining each employer’s proportionate share of the collective pension amounts reported by the DRS in the Schedules of Employer and Nonemployer Allocations for all plans except LEOFF 1.
LEOFF Plan 1 allocation percentages are based on the total historical employer contributions to LEOFF 1 from 1971 through 2000 and the retirement benefit payments in fiscal year 2018. Historical data was obtained from a 2011 study by the Office of the State Actuary (OSA). In fiscal year 2018, the state of Washington contributed 87.12 percent of LEOFF 1 employer contributions and all other employers contributed the remaining 12.88 percent of employer contributions. LEOFF 1 is fully funded and no further employer contributions have been required since June 2000. If the plan becomes underfunded, funding of the remaining liability will require new legislation. The allocation method the plan chose reflects the projected long-term contribution effort based on historical data.
In fiscal year 2018, the state of Washington contributed 39.30 percent of LEOFF 2 employer contributions pursuant to RCW 41.26.725 and all other employers contributed the remaining 60.70 percent of employer contributions.
The collective net pension liability (asset) was measured as of June 30, 2018, and the actuarial valuation date on which the total pension liability (asset) is based was as of June 30, 2017, with update procedures used to roll forward the total pension liability to the measurement date.
Pension Expense
For the year ended December 31, 2018, the City recognized pension expense as follows:
Pension Expense PERS 1 $ 1,404,590 PERS 2/3 (450,934) PSERS 2 43,980 LEOFF 1 (1,395,143) LEOFF 2 (918,212) TOTAL (1,315,719)
Deferred Outflows of Resources and Deferred Inflows of Resources
At December 31, 2018, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:
Total Deferred Outflows of Deferred Inflows of Resources Resources Differences between expected and actual experience $ 2,592,873 $ (2,296,145) Net difference between projected and actual investment earnings on pension plan investments $ - $ (12,004,448) Changes of assumptions $ 127,958 $ (6,487,945) Changes in proportion and differences between contributions and proportionate share of contributions $ 1,116,627 $ (1,753,171) Contributions subsequent to the measurement date $ 5,332,313 $ - TOTAL $ 9,169,771 $ (22,541,709)
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 61 CITY OF EVERETT FINANCIAL SECTION
PERS 1 Deferred Outflows of Deferred Inflows of Resources Resources Differences between expected and actual experience $ - $ - Net difference between projected and actual investment earnings on pension plan investments $ - $ (844,563) Changes of assumptions $ - $ - Changes in proportion and differences between contributions and proportionate share of contributions $ - $ - Contributions subsequent to the measurement date $ 1,716,381 $ - TOTAL $ 1,716,381 $ (844,563)
PERS 2/3 Deferred Outflows of Deferred Inflows of Resources Resources Differences between expected and actual experience $ 1,183,954 $ (1,691,133) Net difference between projected and actual investment earnings on pension plan investments $ - $ (5,927,280) Changes of assumptions $ 112,995 $ (2,748,906) Changes in proportion and differences between contributions and proportionate share of contributions $ 422,427 $ (1,198,442) Contributions subsequent to the measurement date $ 2,372,323 $ - TOTAL $ 4,091,699 $ (11,565,761)
PSERS 2 Deferred Outflows Deferred Inflows of of Resources Resources Differences between expected and actual experience $ 19,351 $ (2,677) Net difference between projected and actual investment earnings on pension plan investments $ - $ (35,182) Changes of assumptions $ 279 $ (16,146) Changes in proportion and differences between contributions and proportionate share of contributions $ 373 $ (1,884) Contributions subsequent to the measurement date $ 32,035 $ - TOTAL $ 52,038 $ (55,889)
LEOFF 1 Deferred Outflows Deferred Inflows of of Resources Resources Differences between expected and actual experience $ - $ - Net difference between projected and actual investment earnings on pension plan investments $ - $ (657,532) Changes of assumptions $ - $ - Changes in proportion and differences between contributions and proportionate share of contributions $ - $ - Contributions subsequent to the measurement date $ - $ - TOTAL $ - $ (657,532)
LEOFF 2 Deferred Outflows Deferred Inflows of of Resources Resources Differences between expected and actual experience $ 1,389,568 $ (602,335) Net difference between projected and actual investment earnings on pension plan investments $ - $ (4,539,891) Changes of assumptions $ 14,684 $ (3,722,893) Changes in proportion and differences between contributions and proportionate share of contributions $ 693,827 $ (552,845) Contributions subsequent to the measurement date $ 1,211,574 $ - TOTAL $ 3,309,653 $ (9,417,964)
PAGE 62 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT CITY OF EVERETT FINANCIAL SECTION
Deferred outflows of resources related to pensions resulting from the City’s contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2019. Other amounts reported as deferred outflows and deferred inflows of resources related to pensions will be recognized in pension expense as follows:
Year ended PERS1 PERS 2/3 PSERS 2 LEOFF 1 LEOFF 2 December 31: 2019 $ 36,950 $ (930,163) $ (881) $ 628 $ (510,012) 2020 (184,626) (2,077,324) (4,645) (148,333) (1,197,378) 2021 (554,012) (3,799,666) (12,121) (404,001) (2,802,696) 2022 (142,875) (1,515,115) (6,104) (105,826) (986,031) 2023 - (668,898) (1,703) - (342,406) Thereafter - (855,218) (10,432) - (1,481,363) Total (844,563) (9,846,384) (35,886) (657,532) (7,319,886)
FIRE PENSION FUND / POLICE PENSION FUND
The following table represents the aggregate pension amounts for all plans subject to the requirements of GASB Statement 68 for the year 2018:
Aggregate Pension Amounts - All Plans Total Pension liabilitiies $ - Pension assets $ 344,024 Deferred outlfows of resources $ 607,537 Deferred inflows of resources $ - Pension expense/expenditures $ (270,667)
Plan Description
The City is the administrator of the City of Everett Fire and Police Pension Fund, shown as trust funds in the City’s financial reports. Separate financial statements are not issued. Both systems are closed single-employer defined benefit pension plans established in conformance with RCWs 41.16, 41.18 and 41.20. These plans provide retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. Membership is limited to firefighters and police officers employed prior to March 1, 1970 when the LEOFF retirement system was established. The City’s obligation under the plans consists of paying all benefits, including payment to beneficiaries, for members who retired prior to March 1, 1970 and excess benefits over LEOFF for covered members who retired or will retire after March 1, 1970. The Fire Pension Fund is administered by a fire pension board comprised of the mayor or a designated representative who shall be an elected official of the City, who shall be the chairperson of the board, the City council finance committee chairperson, the City clerk, and two regularly employed or retired fire fighters elected by secret ballot of the employed and retired fire fighters.
The Police Pension Fund is administered by a police pension board comprised of the mayor or a designated representative who shall be an elected official of the City, the City clerk, the City treasurer, president of the City council, and three active or retired members of the police department elected by active and retired members of the police department.
Membership of the Plans consisted of the following as of December 31, 2018:
Retirees and beneficiaries of deceased retirees retiring prior to March 1, 1970 currently receiving full pension benefits from the Fire and Police Pension Fund number 3 and 1, respectively.
Retirees and beneficiaries of deceased retirees retiring on or after March 1, 1970 currently receiving benefits in excess of what LEOFF provides from the Fire and Police Pension Funds number 78 and 43, respectively. Fire Pension members are eligible for retirement after serving 25 years and reaching the age of 50. Members retiring with 25 years of service are paid 50 percent of the basic salary attached to the rank held at the date of retirement. Members retiring with more than 25 years of service will receive an additional 2% of their base for each full year of additional service up to a maximum of five additional years.
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 63 CITY OF EVERETT FINANCIAL SECTION
Police Pension members are eligible for retirement after serving for 25 years. Members retiring with 25 years of service are paid 50 percent of the basic salary attached to the position held for the year preceding the date of retirement, up to the position of captain. Members retiring with more than 25 years of service will receive an additional 2% of their base for each full year of additional service up to a maximum of five additional years.
There were no changes in benefit provisions in the current year.
Summary of Significant Accounting Policies
The Fire Pension Fund and the Police Pension Fund financial statements are reported using the economic resources measurement focus and accrual basis of accounting. Employer contributions to each plan are recognized when due and the employer has made a formal commitment to provide the contributions. Benefits and refunds are recognized when due and payable in accordance with the terms of each plan.
Investments
Investments are reported at fair value, as provided by the custodian. It is the policy of the Pension Board to pursue an investment strategy based on the prudent person standard, which persons of prudence, discretion, and intelligence exercise in the management of their own affairs, not for speculation, but for investment, considering probable safety of their capital as well as the probable income to be derived. With the exception of US Treasury, no more than 50% of the total investment portfolio can be invested in a single security type and no more than 25% can be invested with a single financial institution.
Concentrations The pension plans investments are mostly held in the following government sponsored enterprise (GSE) issued securities:
Agencies Police Fire FFCB 1,389,127 27% 2,878,760 27%
FHLB 1,347,994 26% 2,842,466 26% FHLMC 1,221,949 23% 2,441,872 23% FNMA 1,259,175 24% 2,584,906 24% Total Investments 5,218,245 100% 10,748,004 100%
Rate of return For the year ended December 31, 2018, the annual money-weighted rate of return on pension plan investments, net of pension plan investment expense, was 1.67% for the Fire Pension Fund and 1.92% for the Police Pension Fund. The money-weighted rate of return expresses investment performance, net of investment expenses, adjusted for the changing amounts actually invested.
Net Pension Liability
Fire Pension Police Pension
Total Pension Liability $ 9,985,587 $ 5,090,333 Plan Fiduciary Net Position 10,156,919 5,263,025
Net Pension Liability (Asset) $ (171,332) $ (172,692)
Plan fiduciary net position as a percentage
of the total pension liability 102% 103%
The negative net pension liability is a result of the City overpaying its annual required pension cost.
PAGE 64 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT CITY OF EVERETT FINANCIAL SECTION
Actuarial Assumptions
The total pension liability was determined by an actuarial valuation as of January 1, 2017, using the following actuarial assumptions, applied to all periods included in the measurement:
Salary increases 3.00% Investment rate of return (discount rate) 4.00% Postretirement benefit increase 1. Related to salaries 3.00% 2. Related to CPI 2.25%
Mortality rates were based on the RP-2000 mortality tables projected to 2025 with Scale BB.
The actuarial assumptions used in the valuation include: • Valuation date of January 1, 2017 • Update procedures were used to roll forward the total pension liability to the pension plan’s fiscal year-end • Actuarial value of assets equal to market value • Closed 30 year amortization period of the unfunded obligation beginning January 1, 2000 • Entry Age Cost Method • The investment return was determined by using moderate rate that conservatively reflects the returns expected to be achieved by the fund each year.
Discount Rate
The discount rate used to measure the total pension liability was based on the Bond Buyer General Obligation 20- bond municipal bond index for bonds maturing in 20 years. The rates which were effecitive 12/31/2017 and 12/31/2018 were 3.5% and 4.00% respectively. The projection of cash flows used to determine the discount rate assumed that City’s future annual contributions increase 2.25% each year. Based on this assumption, the pension plan’s fiduciary net position is determined to be actuarially sufficient to fully fund the plan’s obligations by the end of year 2030.
Sensitivity of the net pension liability to changes in the discount rate
The following presents the net pension liability of the City, calculated using the discount rate of 4.00%, as well as what the City’s net pension liability would be if it were calculated using a discount rate that is 1% lower (3.00%) or 1% higher (5.00%) than the current rate:
Current City's net pension liability 1% Decrease Discount Rate 1% Increase (asset) (3.00%) (4.00%) (5.00%) Fire Pension $ 715,190 $ (171,332) $ (942,805) Police Pension $ 187,681 $ (172,692) $ (492,644)
Changes in the Net Pension Liability
Fire Pension Police Pension Fire Pension Plan Fiduciary Net Net Pension Police Pension Plan Fiduciary Net Net Pension Liability (a) Position (b) Liability (a) - (b) Liability (a) Position (b) Liability (a) - (b) Balance at 12/31/2017 $ 10,535,569 $ 10,530,902 $ 4,667 $ 5,448,827 $ 5,628,302 $ (179,475) Changes for the Year: Service Cost ------
Interest 381,678 - 381,678 195,635 - 195,635 Changes in benefit terms ------Difference between expected and actual experience ------Changes in assumptions (210,038) - (210,038) (86,056) - (86,056) Contributions - employer 176,619 (176,619) - - Contributions - emplyees ------
Net investment income - 171,620 (171,620) - 102,996 (102,996) Difference between expected and actual earnings * - - - - - Benefit payment, including refunds of contributions (721,622) (721,622) - (468,073) (468,073) -
Administrative expense - (600) 600 - (200) 200 Other changes ------Net changes (549,982) (373,983) (175,999) (358,494) (365,277) 6,783 Balance at 12/31/2018 $ 9,985,587 $ 10,156,919 $ (171,332) $ 5,090,333 $ 5,263,025 $ (172,692)
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 65 CITY OF EVERETT FINANCIAL SECTION
At December 31, 2018, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:
Fire Pension Police Pension Deferred Outflows Deferred Inflows of Deferred Outflows Deferred Inflows of of Resources Resources of Resources Resources Difference between expected and actual experience $ - $ - $ - $ - Net difference between projected and actual investment earnings on pension plan investments 449,118 - 158,419 - Changes of assumptions - - - - Changes in proportion and differences between contributions and proportionate share of contributions - - - - Contributions subsequent to the measurement date - - - - Total $ 449,118 $ - $ 158,419 $ -
Deferred outflows of resources related to pensions resulting from the City’s contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2018. Other amounts reported as deferred outflows and deferred inflows of resources related to pensions will be recognized in pension expense as follows:
Year ended December 31: Fire Pension Police Pension 2019 $ 160,767 $ 50,303 2020 $ 156,992 $ 49,676 2021 $ 88,730 $ 38,566 2022 $ 42,629 $ 19,874 Thereafter $ - $ -
NOTE 8 - OTHER POST EMPLOYMENT BENEFITS (OPEB)
The following table represents the aggregate OPEB amounts for all plans subject to the requirements of GASB Statement 75 for the year 2018:
Aggregate OPEB Amounts - All Plans Total OPEB liabilitiies $ 44,864,788 OPEB assets $ - Deferred outlfows of resources $ 376,707 Deferred inflows of resources $ -
OPEB expense/expenditures $ (3,035,270)
Plan Descriptions
The City is the administrator of the City of Everett Fire and Police Other Postemployment Benefit (OPEB) Plans. Both plans are closed single-employer defined benefit healthcare plans shown as trust funds in the City’s financial reports. Separate financial statements are not issued. In accordance with RCW 41.26, the City provides lifetime medical care for firefighters and law enforcement officers employed prior to October 1, 1977. The City is self-insured and pays actual claims incurred by plan participants. The City carries individual and aggregate stop loss insurance to mitigate the risk associated with being self-insured. The plans are administered by the same boards that administer the Fire and Police Pension Plans as described in Note 7.
Neither Fire nor Police retirees contribute towards the cost of his/her medical care. The primary sources of funding for both plans are property taxes levied by the City and interest earnings. In addition, the City receives a small Medicare D subsidy. In 2018, the City received $106,498 in Medicare D reimbursements, which were split between the two funds. Administrative costs are financed through interest earnings.
PAGE 66 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT CITY OF EVERETT FINANCIAL SECTION
There are no active firefighter plan participants and 106 firefighter retirees currently receiving benefits. There are no active law enforcement plan participants and 78 law enforcement retirees currently receiving benefits.
Summary of Significant Accounting Policies
The Fire Healthcare Fund and the Police Healthcare Fund financial statements are prepared using the accrual basis of accounting. Employer contributions to each plan are recognized when due and the employer has made a formal commitment to provide the contributions. Benefits and refunds are recognized when due and payable in accordance with the terms of each plan.
Investments are reported at fair value, as provided by the custodian. Details on the investments of the Fire and Police Healthcare Funds are included in Note 4.
Investments
Investments are reported at fair value, as provided by the custodian. It is the policy of the Pension Board to pursue an investment strategy based on the prudent person standard, which persons of prudence, discretion, and intelligence exercise in the management of their own affairs, not for speculation, but for investment, considering probable safety of their capital as well as the probable income to be derived. With the exception of US Treasury, no more than 50% of the total investment portfolio can be invested in a single security type and no more than 25% can be invested with a single financial institution.
Concentrations The OPEB plans investments are mostly held in the following government sponsored enterprise (GSE) issued securities:
Agencies Police Fire
FFCB 3,015,094 27% 4,765,230 27% FHLB 2,925,813 26% 4,705,153 26% FHLMC 2,652,234 23% 4,042,047 23%
FNMA 2,733,033 24% 4,278,812 24%
Total Investments 11,326,174 100% 17,791,242 100%
Rate of return For the year ended December 31, 2018, the annual money-weighted rate of return on OPEB plan investments, net of OPEB plan investment expense, was 1.90% for the Fire OPEB Fund and 1.90% for the Police OPEB Fund. The money-weighted rate of return expresses investment performance, net of investment expenses, adjusted for the changing amounts actually invested.
Net OPEB Liability
Fire OPEB Police OPEB
Total OPEB Liability $ 43,166,944 $ 30,365,180 Plan Fiduciary Net Position 17,296,642 11,370,694 Net OPEB Liability (Asset) $ 25,870,302 $ 18,994,486
Plan fiduciary net position as a percentage of the total OPEB liability 40% 37%
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 67 CITY OF EVERETT FINANCIAL SECTION
Actuarial Assumptions
The total OPEB liability was determined by an actuarial valuation as of January 1, 2017, using the following actuarial assumptions:
• Actuarial Cost Method Entry Age Normal • Amortization Method for determination of Level dollar Annual Required Contribution (accounting expense) • Amortization Method for determination of Increase with 2.25% inflation assumption funding contribution • Remaining Amortization Period 14 years • Actuarial assumptions Investment Rate 3.75% Medical Trend Pre-65 (2017 - 2034) 6.8% - 5.0% Post-65 (2017 – 2034) 8.8% - 5.0% • Long-Term Care Inflation Rate 4.5%
Mortality rates were based on the RP-2000 Mortality Table with generational projection using 100% of Projection Scale BB, with ages set back one year for males and set forward one year for females.
Discount Rate
The discount rate used to measure the total OPEB liability was based on the Bond Buyer General Obligation 20-bond municipal bond index for bonds maturing in 20 years. The rates which were effecitive 12/31/2017 and 12/31/2018 were 3.5% and 4.00% respectively. The projection of cash flows used to determine the discount rate assumed that City’s future annual contributions increase 2.25% each year. Based on this assumption, the OPEB plan’s fiduciary net position is determined to be actuarially sufficient to fully fund the plan’s obligations by the end of year 2030.
Sensitivity of the net OPEB liability to changes in the discount rate
The following presents the net OPEB liability of the City, calculated using the discount rate of 4.00%, as well as what the City’s net OPEB liability would be if it were calculated using a discount rate that is 1% lower (3.00%) or 1% higher (5.00%) than the current rate:
Current
1% Decrease Discount Rate 1% Increase City's net OPEB liability (asset) (3.00%) (4.00%) (5.00%) Fire OPEB $ 31,674,587 $ 25,870,302 $ 21,048,358
Police OPEB $ 23,358,364 $ 18,994,486 $ 15,395,910
Changes in the Net OPEB Liability
Fire OPEB Police OPEB Fire OPEB Liability Plan Fiduciary Net Net OPEB Liability Police OPEB Plan Fiduciary Net Net OPEB Liability (a) Position (b) (a) - (b) Liability (a) Position (b) (a) - (b) Balance at 12/31/2017 $ 45,784,817 $ 18,367,739 $ 27,417,078 $ 32,298,462 $ 12,085,691 $ 20,212,771 Changes for the Year: Service Cost ------
Interest 1,577,650 - 1,577,650 1,113,579 - 1,113,579 Changes in benefit terms ------Difference between expected and actual experience ------Changes in assumptions (2,764,991) - (2,764,991) (2,074,672) - (2,074,672) Contributions - employer 53,249 (53,249) - 53,249 (53,249) Contributions - emplyees ------
Net investment income - 334,596 (334,596) - 219,785 (219,785) Difference between expected and actual earnings * - - - - - Benefit payment, including refunds of contributions (1,430,532) (1,430,532) - (972,189) (972,189) -
Administrative expense - (28,410) 28,410 - (15,842) 15,842 Other changes ------Net changes (2,617,873) (1,071,097) (1,546,776) (1,933,282) (714,997) (1,218,285)
Balance at 12/31/2018 $ 43,166,944 $ 17,296,642 $ 25,870,302 $ 30,365,180 $ 11,370,694 $ 18,994,486
PAGE 68 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT CITY OF EVERETT FINANCIAL SECTION
At December 31, 2018, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:
Fire OPEB Police OPEB Deferred Outflows Deferred Inflows of Deferred Outflows Deferred Inflows of of Resources Resources of Resources Resources Difference between expected and actual experience $ - $ - $ - $ - Net difference between projected and actual investment earnings on OPEB plan investments 227,110 - 149,597 - Changes of assumptions - - - - Changes in proportion and differences between contributions and proportionate share of contributions - - - - Contributions subsequent to the measurement date - - - -
Total $ 227,110 $ - $ 149,597 $ -
Deferred outflows of resources related to OPEB resulting from the City’s contributions subsequent to the measurement date will be recognized as a reduction of the net OPEB liability in the year ended December 31, 2018. Other amounts reported as deferred outflows and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows:
Year ended December 31: Fire OPEB Police OPEB 2019 $ 56,777 $ 37,399 2020 $ 56,777 $ 37,399 2021 $ 56,777 $ 37,399 2022 $ 56,779 $ 37,400
Thereafter $ - $ -
NOTE 9 - RISK MANAGEMENT
The City of Everett is exposed to various risks of loss from torts; theft of, damage to, or destruction of assets; business interruption; errors and omissions; injuries to employees; and natural disasters.
The City combines the reporting of risk management activities into one internal service fund – The Self-Insurance Fund – to account for and finance uninsured risks. All departments of the City make payments through interfund assessments to the self-insurance fund based on estimates of the amounts needed to pay prior and current year claims and to establish a reserve for catastrophic losses.
For the year ending 12/31/2018, the self-insured retention for general liability, auto liability (excluding transit), law enforcement liability, errors and omissions liability and employment practices liability was $1,250,000 per occurrence. Workers’ compensation is self-insured, and effective July 1, 2014, subject to a maximum retention of $1,500,000 for police officer, fire fighter, and bus driver classifications per occurrence, and $1,000,000 for all other classifications per occurrence. Unemployment compensation costs are self-insured by paying the actual benefit cost.
The liability arising out of the operations of the George Culmback Dam are also self-insured. The Culmback Dam is a joint project with Snohomish County PUD No. 1. As such, payment of claims and expenses would be jointly shared between the two entities. To date, there has never been a claim made arising out of the dam operations. The reserve balance in said fund is sufficient to address the current self-insured retention of $2,000,000.
The City purchases commercial insurance for claims in excess of the self-insured retentions and for all other risks of loss. Settled claims have not exceeded this commercial coverage in any of the past three fiscal years.
Everett Transit is a member of the Washington State Transit Insurance Pool (WSTIP). Liability coverage is provided through the Pool with limits of $20,000,000 and a $0 deductible for auto and general liability, and limits of $20,000,000 with a $5,000 deductible for public officials liability.
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 69 CITY OF EVERETT FINANCIAL SECTION
Claims liabilities are based on the estimated cost of settling claims, including case reserves and incurred but not reported (IBNR) claims. Case reserves for general, auto (excluding Transit), employment and law enforcement liabilities are estimated and projected by the Risk Management Division and the City’s third-party administrator on a case-by-case basis using historical experience. Case reserves for Transit liability claims are estimated by the Transit pool, WSTIP. Case reserves for workers’ compensation claims are estimated by the City’s third-party administrator using statistical reserving formulas and historical experience. Claims liabilities include estimates for expenses related to adjusting/investigating and defending the claim or lawsuit.
At December 31, 2018, the estimated liability totaled $8,542,112, consisting of $5,105,887 for tort liability, $3,335,431 for workers’ compensation, and $100,794 for unemployment compensation. These estimates are based on the provisions of Governmental Accounting Standards Board Statement No. 10, which requires that a liability for claims be reported if information prior to the issuance of the financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. Claims liabilities are not discounted.
Changes in the funds’ claims liability amounts in fiscal years 2017 and 2018 appear as follows:
BALANCE AT CURRENT CURRENT YEAR BALANCE AT BEGINNING OF YEAR CHANGES CLAIM FISCAL FISCAL YEAR CLAIMS IN ESTIMATES PAYMENTS YEAR END Tort Liability: 2018 4,433,267 460,184 1,458,258 (1,245,822) 5,105,887 2017 4,850,594 413,967 74,759 (906,053) 4,433,267
Workers' Compensation:
2018 4,399,890 994,713 (84,184) (1,974,988) 3,335,431 2017 3,599,785 1,491,055 1,508,066 (2,199,016) 4,399,890
Unemployment Compensation: 2018 108,601 116,301 30,960 (155,068) 100,794 2017 90,149 125,309 60,221 (167,078) 108,601
In 1995, the City created a self-insured health benefits program for its employees as a means to contain rising health benefit costs. Health Benefits Reserve Fund 508 was established to account for the disbursement of actual medical expenses, associated administrative costs, and reserves for this program. The City added a self-insured dental benefit program in 2016.
In order to mitigate its risk exposure the City holds individual and aggregate stop loss insurance, and maintains both claims fluctuation and liability reserves. The claims fluctuation liability reserve was $3,196,634 at December 31, 2018 based on an analysis of the most recent twelve months of incurred claims with applied monthly completion factors, as required by Washington Administrative Code (WAC) 200-110-040(a).
Changes in the fund’s claims liability in fiscal years 2017 and 2018 appear as follows:
BALANCE AT CURRENT CURRENT YEAR BALANCE AT BEGINNING OF YEAR CHANGES CLAIM FISCAL FISCAL YEAR CLAIMS IN ESTIMATES PAYMENTS YEAR END IBNR Liability 2018 2,587,463 18,707,756 21,451 (18,120,036) 3,196,634 2017 2,626,787 16,185,750 (39,324) (16,185,750) 2,587,463
NOTE 10 - LONG-TERM DEBT
General Obligation Bonds
The City issues general obligation bonds to finance the purchase, acquisition, and/or the construction of capital assets. General obligation bonds have been issued for both general government and business-type activities and are being repaid from the applicable resources. General obligation bonds are direct obligations and pledge the full faith
PAGE 70 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT CITY OF EVERETT FINANCIAL SECTION and credit of the government. These bonds generally are issued as 20 to 25-year serial bonds with equal amounts of principal maturing each year.
General obligation bonds outstanding at December 31, 2018, are as follows:
DATE OF AMOUNT DATE OF FINAL INTEREST ORIGINALLY REDEMPTIONS DEBT NAME OF ISSUE / PURPOSE ISSUE MATURITY RATE(S) ISSUED TO DATE OUTSTANDING Governmental Activities 12 LTGO and Refunding Bonds - capital 10-04-12 12-01-26 2.00-4.00% $ 13,935,000 $ 3,975,000 $ 9,960,000 14 Floating Rate LTGO Bonds - capital 11-03-14 12-13-34 Variable 35,865,000 10,235,000 25,630,000 Total Governmental Activities $ 49,800,000 $ 14,210,000 $ 35,590,000 Business Activities 10 LTGO Bonds - capital 03-26-10 12-01-19 1.00-4.25% $ 10,500,000 $ 9,500,000 $ 1,000,000 Total Business Activities $ 10,500,000 $ 9,500,000 $ 1,000,000
TOTAL GENERAL OBLIGATION BONDS $ 60,300,000 $ 23,710,000 $ 36,590,000
Annual debt service requirements to maturity for general obligation bonds are as follows:
GOVERNMENTAL ACTIVITES BUSINESS-TYPE ACTIVITES YEAR ENDING TOTAL TOTAL DECEMBER 31, PRINCIPAL INTEREST REQUIREMENTS PRINCIPAL INTEREST REQUIREMENTS 2019 2,430,000 797,907 3,227,907 1,000,000 42,500 1,042,500 2020 3,015,000 703,690 3,718,690 - - - 2021 3,475,000 626,218 4,101,218 - - - 2022 3,050,000 510,496 3,560,496 - - -
2023 2,510,000 433,234 2,943,234 - - -
2024 - 2028 10,910,000 1,484,240 12,394,240 - - - 2029 - 2033 10,200,000 475,803 10,675,803 - - - TOTAL $35,590,000 $ 5,031,588 $ 40,621,588 $ 1,000,000 $ 42,500 $ 1,042,500
Interest on the 2014 Floating Rate Bonds is paid at a rate to be determined weekly using the rate equal to the weekly Securities Industry and Financial Markets Association Municipal Swap Index (SIFMA). The rate in effect at 12/31/18 was 2.11%.
Revenue Debt
The City issues bonds where the City pledges income derived from the acquired or constructed assets to pay the debt service.
The revenue bonds listed below will be repaid solely from water/sewer customer net revenues and are payable through 2040. The total principal and interest remaining to be paid on the bonds is $227,525,016. Principal and interest expense for the current year and total customer net revenues were $14,280,851 and $48.287.620 respectively.
Proceeds from the bonds were used for capital purposes related to improving the water/sewer system, including water distribution system improvements, pipeline replacements, water tanks rehabilitation, wastewater pollution control facility expansion, sewer system capacity improvements, and sewer system replacements.
Revenue bonds outstanding at December 31, 2018 are as follows:
DATE OF AMOUNT DATE OF FINAL INTEREST ORIGINALLY REDEMPTIONS DEBT
NAME OF ISSUE / PURPOSE ISSUE MATURITY RATE(S) ISSUED TO DATE OUTSTANDING 11 Water/Sewer Revenue Bonds - capital 03-09-11 12-01-35 2.5-5.0% 51,000,000 47,530,000 3,470,000 13 Water/Sewer Revenue Bonds - capital 03-01-13 12-01-30 3.0-5.0% 62,145,000 12,770,000 49,375,000 15 Water/Sewer Revenue Bonds - capital 11-03-15 12-01-40 2.0-5.0% 50,525,000 4,400,000 46,125,000 16 Water/Sewer Revenue Bonds - capital 12-01-16 12-01-35 3.1-5.0% 68,050,000 - 68,050,000 TOTAL REVENUE BONDS $ 231,720,000 $ 64,700,000 $ 167,020,000
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Annual debt service requirements to maturity for revenue bonds are as follows:
BUSINESS-TYPE ACTIVITIES YEAR ENDING TOTAL DECEMBER 31, PRINCIPAL INTEREST REQUIREMENTS 2019 7,745,000 6,549,951 14,294,951 2020 8,135,000 6,162,701 14,297,701 2021 8,485,000 5,807,251 14,292,251 2022 8,855,000 5,435,201 14,290,201 2023 9,250,000 5,045,701 14,295,701 2024 - 2028 52,210,000 19,251,351 71,461,351 2029 - 2033 47,090,000 9,202,594 56,292,594
2034 - 2038 19,495,000 2,746,469 22,241,469 2039- 2040 5,755,000 303,800 6,058,800 TOTAL $ 167,020,000 $ 60,505,016 $ 227,525,016
Debt Defeasance
In 2018, the City used existing resources of $4,525,000 to purchase US government securities that were placed in an irrevocable trust with an escrow agent in partial defeasance of 2014 Floating Rate Bonds. This partial defeasance is expected to be satisfied in June 2019.
In prior years, the City defeased certain general obligation bonds by placing the proceeds of new bonds in an irrevocable trust to provide for all future debt service payments on the old bonds. Accordingly, the trust account assets and the liability for defeased bonds are not included in the City’s financial statements. At December 31, 2018, $96,525,000 of bonds outstanding are considered defeased.
Other Long Term Debt
The City has received government loans and other notes to provide for construction of capital projects. The Governmental Activities Public Works Trust Fund loans will be paid from the Real Estate Excise Tax Fund 154. The Business Activities Public Works Trust Fund loans, State Revolving Fund loans, and property purchase loans will be paid from water/sewer revenues.
Other long-term debt outstanding, as of December 31, 2018, is presented below:
DATE OF AMOUNT DATE OF FINAL INTEREST ORIGINALLY REDEMPTIONS DEBT NAME OF ISSUE/PURPOSE ISSUE MATURITY RATE(S) ISSUED TO DATE OUTSTANDING Governmental Activities Public Works Trust Fund Loan - 112th Street 12-22-02 07-01-22 0.50% 1,000,000 779,605 220,395 Tax Exempt Installment Loan - LED Lighting 08-25-15 05-07-30 2.97% 1,362,903 234,665 1,128,238 Total Governmental Activities $ 2,362,903 $ 1,014,270 $ 1,348,633
Business Activities PWTFL Sewer Basement Flooding Reduction 07-01-01 07-01-21 1.00% $ 1,881,000 $ 1,584,000 $ 297,000 PWTFL Water Transmission Line 07-01-01 07-01-21 1.00% 4,252,792 3,582,329 670,463 PWTFL Cross-Town Effluent Pipeline 05-13-03 07-01-23 0.50% 5,490,000 4,041,250 1,448,750 PWTFL Water Transmission Lines #2-3 11-17-03 11-17-23 0.50% 841,671 617,103 224,568 PWTFL Treatment Plant Upgrade 04-25-05 07-01-25 0.50% 9,500,000 5,805,556 3,694,444 PWTFL Water Pollution Facility Expansion 06-25-06 07-01-26 0.50% 7,000,000 4,052,632 2,947,368 SRF Clearwell No. 2 03-03-06 10-01-25 1.50% 4,040,000 2,481,984 1,558,016 SRF Clearwell No. 2 12-21-07 10-01-26 1.50% 4,040,000 2,338,947 1,701,053 SRF Clearwell No. 2 03-03-08 10-01-27 1.50% 3,030,000 1,594,737 1,435,263 SRF Clearwell No. 2 08-22-08 10-01-28 1.50% 4,040,000 1,906,804 2,133,196 SRF Recovered Water Outfall 08-05-09 10-01-29 1.50% 1,376,473 579,524 796,948 SRF Bond Street CSO 02-26-14 03-06-33 2.90% 1,994,497 431,176 1,563,321 WPTFL WPCF Plant Expamsnsion Phase C 01-31-13 06-01-32 0.50% 10,000,000 2,322,136 7,677,864 Mukilteo Water District 01-01-11 09-30-24 7.82% 140,883 105,844 35,039 Leases Payable 10-30-17 07-31-21 2.53% 70,214 23,105 47,109
Total Business Activities $ 57,697,530 $ 31,467,128 $ 26,230,402 TOTAL OTHER LONG-TERM DEBT $ 60,060,432 $ 32,481,397 $ 27,579,035
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Annual debt service requirements to maturity for other long-term debt are as follows:
GOVERNMENTAL ACTIVITES BUSINESS-TYPE ACTIVITES YEAR ENDING TOTAL TOTAL DECEMBER 31, PRINCIPAL INTEREST REQUIREMENTS PRINCIPAL INTEREST REQUIREMENTS 2019 134,733 34,610 169,343 3,093,528 260,330 3,353,858 2020 137,098 31,969 169,067 3,097,948 228,259 3,326,208 2021 139,533 29,259 168,792 3,091,719 196,056 3,287,775 2022 142,039 26,475 168,514 2,761,587 165,268 2,926,855 2023 89,524 23,618 113,142 2,764,399 140,256 2,904,655 2024 - 2028 489,117 76,593 565,710 8,598,026 363,327 8,961,352 2029 - 2033 216,588 9,696 226,284 2,823,195 69,923 2,893,119 TOTAL $ 1,348,632 $ 232,220 $ 1,580,852 $ 26,230,403 $ 1,423,419 $ 27,653,822
Bond Covenants, Limitations and Restrictions
At December 31, 2018, restricted assets of enterprise funds include $ 2,915,027 for bond redemption. The City has also purchased a surety policy to cover all outstanding Water and Sewer Revenue Bonds. These represent redemption funds and reserve requirements as contained in the various bond ordinances.
There are a number of other limitations and restrictions contained in the various bond indentures. The City is in compliance with all significant limitations and restrictions.
Debt Limit
RCW 39.36.020 provides cities with three segments of debt capacity, each equal to two and one-half percent of the City’s assessed valuation, for a total debt capacity of seven and one-half percent (7.5%). Allowable uses of these segments are as follows:
Segment 1 - General Governmental Purposes
The City can incur debt up to one and one-half percent (1.5%) of its assessed valuation solely with a vote of the legislative body (often referred to as “councilmanic” debt). To use the remaining one percent (1.0%), a 60 percent vote in favor of the issue by at least 40 percent of the voters voting in the last general election is required.
Segment 2 - City-Owned Water and Sewer Purposes
The City can incur debt up to an additional two and one-half percent (2.5%) for water and sewer purposes with a 60 percent vote in favor of the issue by at least 40 percent of the voters voting in the last general election.
Segment 3 - Acquiring and Developing Open Space, Parks Facilities, and Capital Facilities Associated with Economic Development
The City can incur debt up to an additional two and one-half percent (2.5%) for acquiring and developing open space, parks facilities, and capital facilities associated with economic development with a 60 percent vote in favor of the issue by at least 40 percent of the voters voting in the last general election.
At December 31, 2018 the debt limits for the City were as follows:
Governmental Water & Sewer Park & Capital Purposes Purposes Facilities Without Vote With Vote With Vote With Vote (Councilmanic) 1.50% 1.00% 2.50% 2.50% Legal Limits, Net $ 251,119,206 $ 167,412,804 $ 418,532,010 $ 418,532,010 Net Outstanding Indebtedness 37,938,634 - - - Margin Available $ 213,180,572 $ 167,412,804 $ 418,532,010 $ 418,532,010
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Only general obligation debt is subject to the legal debt limit capacity restrictions. Revenue bonds and Local Improvement District (LID) bonds are not limited because no taxing power or general fund pledge is provided as security.
NOTE 11 - LEASES AND OTHER CONTRACTUAL COMMITMENTS
Operating Leases and Other Contractual Commitments
The City leases equipment and office and storage space under non-cancelable operating leases. Total operating lease expenditures for 2018 were $608,638 in governmental activities and $520,341 in business-type activities. The City also contracts for certain professional services, such as the management of golf courses and parking facilities and the monitoring and maintenance of equipment such as elevators, heating, ventilation and air conditioning, and fire alarm systems in City buildings. Commitments under lease and professional service contractual agreements provide for minimum annual payments as follows:
Year Ending Professional December 31 Leases Services 2018 $ 377,065 $ 2,887,606 2019 - 1,083,698 2020 - 439,275 2021 - 80,413 2022 - 36,277 Total $ 377,065 $ 4,527,269
Capital Leases
The City’s Water and Sewer Utility Fund have entered into capital leases to finance the acquisition of mail machines. The leases were recorded at the present value of their future minimum lease payments as of the inception date.
The assets acquired through capital leases as of December 31, 2018 appear as follows:
Governmental Enterprise Fund Funds Machinery and equipment $ - $ 70,214 Less accumulated depreciation - (17,554)
Machinery and equipment, net of depreciation $ - $ 52,661
The future minimum lease obligations and the net present value of minimum lease payments as of December 31, 2018 appear as follows:
Year Ending Governmental Enterprise December 31 Fund Funds 2019 - 21,564 2020 - 21,564 2021 - 10,782 Total minimum lease payments - 53,909
Less amounts attributable to interest - (6,800)
Net present value of minimum lease payments $ - $ 47,109
PAGE 74 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT CITY OF EVERETT FINANCIAL SECTION
Construction Commitments
As of December 31, 2018, the City had other outstanding contractual commitments, which include construction and engineering contracts for capital projects currently in progress. The City's major significant outstanding contract obligations are summarized as follows:
Expended Remaining PROJECT To Date Commitment Various City Facilities Roofing/Siding projects $ 551,191 $ 275,120 2018 Asphalt Overlay 3,036,511 215,602 Broadway Bridge Replacement 383,394 184,975
Citywide Intersection Signing 670,455 73,657 Diking Improvements District No. 5 Dike Repairs 620,666 268,908 Everett Downtown Streetscape Hoyt - Pacific 679,236 557,756 Grand Avenue Park Bridge 8,705,980 6,264,928 Grand Avenue Park Bridge Design 3,428,707 196,440
Legion Golf Course Stormwater Detention 3,919,125 76,264 North Broadway Transit Improvements 439,597 1,810,167 North Wetmore Stormwater Separation 2,214,142 1,181,647 Process Water Pump Station 320,663 587,433 Sewer Replacement & Capacity Improvement "L" 3,020,414 128,610
Tulalip Water Pipeline 123,395 46,605
Water Filteration Plant 185,191 752,589 Watermain Replacement "Q" Evergreen Way 843,671 606,854 Watermain Replacement "S" 1,076,274 790,421 Watermain Replacement "T" - 2,106,731 WPCF FEN Chlorination Building Upgrade 340,068 7,393,650
Everett parks improvement projects 2,942,268 2,887,244
Total $ 33,500,951 $ 26,405,598
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NOTE 12 - CHANGES IN LONG-TERM LIABILITIES
Changes in Long-term Liabilities During the year ended December 31, 2018, the following changes occurred in long-term liabilities:
Beginning Ending Balance Balance Due Within 1/1/2018 Additions Reductions 12-31-18 One Year Governmental Activities Bonds payable: General obligation bonds $ 42,355,000 $ - $ (6,765,000) 35,590,000 $ 2,430,000 Plus deferred amounts: For issuance premiums 633,431 - (70,381) 563,050 70,381 Total bonds payable: 42,988,431 - (6,835,381) 36,153,050 2,500,381
Governmental loans 1,535,248 - (186,615) 1,348,633 134,733
Pollution remediation liability 1,550,050 1,849,457 (50,050) 3,349,457 1,104,457 OPEB Liabilities 5,919,486 38,945,301 - 44,864,787 - Net Pension Liabilities 24,680,800 17,181,524 (24,680,800) 17,181,524 - Claims and judgements 11,529,221 21,789,623 (21,580,098) 11,738,746 6,732,045 Compensated absences 10,446,295 12,677,189 (9,062,298) 14,061,186 4,685,722 Governmental activity long-term liabilities: $ 98,649,531 $ 92,443,094 $ (62,395,242) $ 128,697,383 $ 15,157,338
Business-Type Activities Bonds payable:
General obligation bonds $ 2,000,000 $ - $ (1,000,000) $ 1,000,000 $ 1,000,000 Revenue bonds 174,395,000 $ - (7,375,000) 167,020,000 7,745,000 Plus deferred amounts: For issuance premiums 15,156,805 - (1,126,645) 14,030,160 1,071,823 Total bonds payable: 191,551,805 - (9,501,645) 182,050,160 9,816,823 Governmental loans 29,264,476 - (3,081,183) 26,183,293 3,076,083 Pollution remediation liability 1,121,500 - - 1,121,500 - Capital leases 62,894 - (15,785) 47,109 17,445 Net Pension Liabilities 18,482,219 13,732,715 (18,482,219) 13,732,715 - Compensated absences 2,847,022 3,474,173 (3,665,518) 2,655,677 1,413,398 Business-type activity long-term liabilities: $ 243,329,916 $ 17,206,888 $ (34,746,350) $ 225,790,454 $ 14,323,749
Internal service funds predominantly serve the governmental funds. Accordingly, long-term liabilities related to internal service funds are included as part of the above totals for governmental activities. At year-end $274,708 of internal service funds compensated absences and $3,176,057 of internal service funds pension cost liability are included in the above amounts. Also, for governmental activities, claims and judgments and compensated absences are generally liquidated by the general fund.
NOTE 13 – CONTINGENCIES AND LITIGATION
In the normal course of its various operations, the City is involved in lawsuits and is the recipient of claims for damages alleging the City is responsible for damage incurred by third parties. Claims and/or litigation arise in such areas as police civil liability, automobile liability, street and sidewalk design and/or maintenance, zoning, building and other land-use regulations, equipment operation, as well as other areas. These claims or lawsuits are a relatively natural consequence of conducting the City's business. The City of Everett self-insures to cover the majority of its liability risk.
PAGE 76 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT CITY OF EVERETT FINANCIAL SECTION
The City has recorded in its financial statements all material liabilities, including an estimate for situations which are not yet resolved, but where, based on available information, management believes it is probable that the City will have to make payment. In the opinion of management, the City's insurance policies and self-insurance reserves are adequate to pay all known or pending claims.
The City participates in a number of federal- and state-assisted programs. These grants are subject to audit by the grantors or their representatives. Such audits could result in requests for reimbursement to grantor agencies for expenditures disallowed under the terms of the grants. City management believes that such disallowances, if any, would be immaterial.
NOTE 14 - INTERFUND BALANCES AND TRANSFERS
Loans between funds are classified as either interfund loans receivable and payable or advances to and from other funds, depending on the time period for which the loan was made. The City uses interfund loans primarily to meet short-term cash flow requirements while waiting for grant reimbursements.
Advances to and from other funds are typically loans that are not expected to be repaid within one year from the date of the financial statements. There is currently one outstanding advance between the General Fund and Golf. It was established to internally finance Golf general obligation bonds that were called in 2007 and 2008 and to finance operating deficits that occurred in 2008 and early 2009. All long-term advances have planned repayment schedules.
Interfund loan balances at December 31, 2018 appear as follows:
INTERFUND INTERFUND ADVANCES ADVANCES LOANS LOANS TO OTHER FROM OTHER RECEIVABLE PAYABLE FUNDS FUNDS
General Fund $ 28,925 $ - $ 6,344,168 $ - Water & Sewer Utility 838,700 - - - Nonmajor Governmental Funds - 28,925 - - Nonmajor Enterprise Funds - 838,700 - 6,344,168
TOTAL $ 867,625 $ 867,625 $ 6,344,168 $ 6,344,168
Interfund transfers are the flow of assets without a reciprocal return of assets, goods or services in return. The City uses transfers to (1) move revenues from the fund that statute or budget requires to collect them to the fund that statute or budget requires to expend them, (2) move receipts restricted to debt service from the funds collecting the receipts to the debt service fund as debt service payments become due, and (3) use unrestricted revenues collected in the general fund to finance various programs accounted for in other funds in accordance with budgetary authorizations.
Interfund transfer activity for the year ending December 31, 2018 appears as follows:
TRANSFERS IN Capital Nonmajor Internal General Improvement Governmental Service Fund Reserve Fund Transit Funds Funds TOTAL TRANSFERS OUT General Fund $ - $ 1,800,000 $ 4,000 $ 5,760,966 $ 248,083 $ 7,813,049 Capital Improvement Reserve Fd 845,700 - - 4,771,335 - 5,617,035 Water & Sewer Utility 5,447,340 - - - - 5,447,340 Transit 254,477 - - - - 254,477 Nonmajor Governmental Funds 2,476,371 92,219 - 2,259,905 - 4,828,495 TOTAL $ 9,023,888 $ 1,892,219 $ 4,000 $ 12,792,206 $ 248,083 $ 23,960,396
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 77 CITY OF EVERETT FINANCIAL SECTION
A transfer is considered significant if it is for a transaction that does not occur on a routine basis or is inconsistent with the customary activities of the fund making the transfer. In 2018, the following significant transfers were completed;
• $5,463,390 from Fund 002 – General Fund, to Fund 210 – Debt Service Fund. • $1,800,000 from Fund 002 – General Fund, to Fund 162 – Capital Projects Reserve. • $2,032,165 from Fund 156 – Criminal Justice Fund, to Fund 002 – General Fund. • $1,999,936 from Fund 159 – Transportation Benefit District, To Fund 119 – Public Works – Street Improvement, a Special Revenue Fund. • $864,704 from Fund 162 – Capital Projects Reserve, to Fund 342 – City Facilities Construction Fund, a Capital Project Fund. • $1,894,294 from Fund 162 – Capital Projects Reserve, to Fund 210 – Debt Service Fund.
NOTE 15 - RECEIVABLE AND PAYABLE BALANCES
Receivables at December 31, 2018 appear as follows:
Customer Due from Other Notes Taxes Accounts Interest Governments Receivable TOTAL Governmental Activities: General Fund $ 11,653,601 $ 2,039,278 $ 343,413 $ 25,502,871 $ 116,365 $ 39,655,528 Capital Improvement Reserve Fund 328,856 19,168 81,840 39,704 - 469,568 Nonmajor Governmental Funds 1,160,205 19,782 94,816 833,973 13,320,462 15,429,238 Internal Service Funds - 523,996 74,129 - 307 598,432 Total Governmental Activities $ 13,142,662 $ 2,602,224 $ 594,198 $ 26,376,548 $ 13,437,134 $ 56,152,766
Business-Type Activities: Water & Sewer Utility $ - $ 7,423,348 $ 251,706 $ 819,501 $ - $ 8,494,555 Transit 3,679,000 45,807 28,863 1,514,985 - 5,268,655 Nonmajor Enterprise Funds - 194,429 15,995 10,201 - 220,625 Total Business-Type Activities $ 3,679,000 $ 7,663,584 $ 296,564 $ 2,344,687 $ - $ 13,983,835
Governmental Activities General Fund - Customer Accounts include $665,000 from PFD for Scoreboard Due from Other Governments include $24,124,298 from PFD for 2014 Refunding Bonds (See Note 1) Notes Receivable excludes $1,023,635 discount on notes reported in the Government Wide Statement of Net Position The receivables from PFD are not expected to be collected within one year
Payables at December 31, 2018 appear as follows:
Wages & Accounts Due to Other Custodial Other Benefits Payable Interest Taxes Governments Accounts Liabilities TOTAL Governmental Activities: General Fund $2,609,098 $2,455,452 $ 48,791 $ - $ 167,179 $ 570,772 $ 226,785 $ 6,078,077 Nonmajor Governmental Funds $352,143 555,276 - - 13,499 - 815 921,733 Internal Service Funds 48,915 696,536 - 648 - - 186,426 932,525 Total $ 3,010,156 $ 3,707,264 $ 48,791 $ 648 $ 180,678 $ 570,772 $ 414,026 $ 7,932,335
Business-Type Activities: Water & Sewer Utility $ 388,690 $ 2,785,133 $ 646,001 $ 189,613 $ - $ 1,606 $ - $ 4,011,043 Transit 264,967 568,461 - 2,907 448,126 750,000 - 2,034,461 Nonmajor Enterprise Funds 15,987 181,611 3,542 9,626 - - 210,766 Total $ 669,644 $ 3,535,205 $ 649,543 $ 202,146 $ 448,126 $ 751,606 $ - $ 6,256,270
The wages and benefits total excludes the following short term vacation and sick leave accruals which are included with non-current liabilities at the entity wide level:
Governmental Activities Internal Service Fund $ 116,805
Business-Type Activities Water and Sewer $ 910,487 Transit 467,768 Nonmajor Enterprise 35,143 $ 1,413,399
PAGE 78 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT CITY OF EVERETT FINANCIAL SECTION
NOTE 16 - JOINT VENTURES
Joint Ventures - The City, in conjunction with other governmental entities, participates in five joint ventures. Using the same criteria applied to the other organizations to determine the reporting entity, these joint ventures have not been included in the City’s annual financial statements.
The Snohomish River Regional Water Authority (SRRWA) was created for the planning, development, ownership, management and financing of water supply sources and transmission, and other water supply facilities, either by itself or in cooperation with other municipal providers of utilities. The primary purpose is to facilitate efficient water resource development and utilization through interlocal cooperation. The SRRWA board is comprised of one representative of each of three members, who is an elected public official designated in writing, authorized to represent the member in meetings of the membership and Board of Directors. The City has a 41.67 percent interest in the joint venture at December 31, 2018 and recorded an investment in the joint venture in the utility fund of $669,332. As of December 31, 2018, the SRRWA had accumulated sufficient resources and was not experiencing any fiscal stress. Separate financial statements for the joint venture may be obtained from the City of Everett, Utilities Finance Manager, 3200 Cedar Street, Everett, WA 98201.
The Snohomish County Emergency Radio System (SERS), a nonprofit corporation pursuant to chapter 24.06 RCW and IRC 501(c)(3), was established via an interlocal agreement in 1999. Member entities include Snohomish County, Fire District 1, and the Cities of Brier, Edmonds, Lynnwood, Marysville, Mill Creek, Mountlake Terrace, Mukilteo, Woodway, and Everett. The purpose of SERS is to develop, operate and maintain a countywide public safety communications system. The governing board consists of ten directors, one appointed by each City and County member, with the authority to take all actions on behalf of SERS. A cost allocation model is used to determine each Member’s share of financial obligations. The cost allocation model is reviewed and recalculated annually to reflect population, geographic service area and calls for service from January 1 through December 31 of each year. As of December 31, 2018, the City has a 14.18 percent interest in the SERS joint venture and a recorded equity interest of $1,463,344. Based on summary financial information provided to the City by Snohomish County, it does not appear that SERS is experiencing any fiscal stress. Separate financial statements for the joint venture may be obtained from Snohomish County, Finance Department, 3000 Rockefeller Avenue, Everett, WA 98201.
One Regional Card for All (ORCA) was established by interlocal agreement for the operating phase of the Regional Fare Integration Project also known as the Smart Card Project. This agreement among City of Everett (Everett Transit), Snohomish County Transit Authority (Community Transit), Sound Transit, King County Metro, Pierce Transit, Kitsap Transit and Washington State Ferries commenced April 1, 2009. Pursuant to the Interlocal Cooperation Act, chapter 39.34 RCW, the participating agencies jointly exercise their powers to better coordinate their respective services and fare payment systems in order to improve the availability, reliability and convenience of public transportation services within their service areas and throughout the region served by the agencies. Everett Transit’s undivided interest in the assets, liabilities and operations of the ORCA smart card are consolidated within these financial statements on a proportionate basis. Everett Transit’s interest in the central cash accounts as of December 31, 2018, is $161,745 which represents unearned fare revenue. Everett Transit’s percentage share of the operating expense for 2018 was 0.80% and capital expense is 0.80%. Separate financial statements for the joint venture may be obtained from Sound Transit, ORCA Regional Fare Coordination System, 401 S Jackson St, Seattle, WA 98104- 2826.
Snohomish County 911 a cash basis, special purpose district was created under the Interlocal Cooperation Act as codified in RCW 39.34. This established the statutory authority necessary for Snohomish County, the cities, towns, fire districts, police districts and other service districts to enter into a contract and agreement to jointly establish, maintain and operate a support communications center. Control of Snohomish County 911 is with a 16 member Board of Directors which is specified in the Interlocal Agreement. Snohomish County 911 takes 911 calls, performs emergency dispatch service for local government agencies including police, fire and medical aid.
In the event of the dissolution of Snohomish County 911, any money in the possession of Snohomish County 911 or the Board of Directors after payment of all costs, expenses and charges validly incurred under this Agreement shall be returned to the parties to the Agreement in portion to their contribution during the fiscal year of dissolution. Before deducting the payment of all costs, expenses and charges validly incurred, the city’s share was $4,840,751 on December 31, 2018.
Complete financial statements for Snohomish County 911 can be obtained from Snohomish County 911’s administrative office at 1121 SE Everett Mall Way, Suite 200, Everett, WA 98208.
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The Alliance for Housing Affordability (AHA) was created in 2013 by the City of Everett and eleven other jurisdictions within Snohomish County to cooperatively formulate affordable housing goals and policies and to foster efforts to provide affordable housing by providing expertise and information to member jurisdictions. The AHA is governed by a Joint Board composed of an elected official from the jurisdictions. The Joint Board is responsible for review and approval of all budgetary, financial, policy, and contractual matters. The Board is assisted by an administrative staff housed at the Housing Authority for Snohomish County. Fiscal agent duties are performed by the City of Mountlake Terrace. Operating funding is provided by the member cities based on each member’s population. The City of Everett population makes up approximately 15.40% of total member’s population. The City’s contribution for 2018 is as follows:
City of Everett's Fiscal Year AHA's total Fiscal City of Everett's Share of % of Total
7/1/17 - 6/30/18 Year Budget Share of Budget AHA Budget
Fiscal Year 2018 $102,586 $10,037 9.78%
Members withdrawing from the agreement relinquish all rights to any reserve funds, equipment, or material purchased. Upon dissolution, the agreement provides for distribution of net assets among the members based on the percentage of the total annual contributions during the period of the Agreement paid by each member.
Budget monitoring information can be obtained from Alliance for Housing Affordability, 12625 4th Ave W, Suite 200, Everett, WA 98204 or City of Mountlake Terrace at 6100 219th St SW, Mountlake Terrace, WA 98043.
NOTE 17 – POLLUTION REMEDIATION OBLIGATIONS
The City recorded the following pollution remediation obligations as other liabilities in its financial statements as of December 31, 2018, in accordance with GASB Statement No. 49:
GOVERNMENTAL BUSINESS-TYPE SITE ACTIVITIES ACTIVITIES
4000 Block South Second Avenue $ 1,400,000
2731 36th Street Southeast 100,000 2808 10th Street 459,542 721 E. Marine View Dr 639,915 145 Alverson Boulevard 750,000
144 West Marine View Drive $ 300,000 3600 Smith Street 821,500
TOTALS $ 3,349,457 $ 1,121,500
The City identified a release of contaminants at the 4000 block of South Second Avenue, Everett, Washington, and will pursuing a Voluntary Cleanup Program (VCP) agreement with the Washington State Department of Ecology (DOE) when the project commences. As of December 31, 2018, the City estimated the liability with regard to pollution remediation at this site to be $1,400,000.
The City identified a release of contaminants at 2731 36th Street Southeast, Everett, Washington, and entered into a VCP agreement with the DOE to remediate the site in previous periods. The City remediated the soil contamination portion of the site during 2010 and then let lapse the VCP agreement with DOE. In the interim, the City continued to test and manage the site under a voluntary action for groundwater. At the completion of the interim action, a VCP agreement is expected to be re-engaged. As of December 31, 2018, the City concluded that additional remediation was needed, and estimated the liability with regard to pollution remediation at this site to be $100,000.
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Three sites located at 2808 10th Street, 721 E. Marine View Drive, and 145 Alverson Boulevard, Everett, Washington were identified as contaminated by releases from the neighboring former ASARCO plant. As of December 31, 2018, the City estimated the liability with regard to pollution remediation at these sites to be $459,542, $639,915, and $750,000, respectively.
The site located at 144 West Marine View Drive, Everett, Washington had previously been identified as contaminated by releases from the neighboring former ASARCO plant. The City voluntarily remediated the site in 1998 in conjunction with a VCP agreement with the DOE. The City had expected to receive a notice of no further action from the DOE upon completion of the DOE’s Final Cleanup Action Plan for ASARCO. The City’s original VCP agreement expired, a new VCP agreement was reinstated in 2008, and the DOE requested the City to send the DOE an analysis of current soil samples at the site. The City engaged an independent engineering firm to analyze soil samples at the site and submit its findings to the DOE, this work was performed during 2009, and the City submitted several alternative remediation proposals to the DOE for consideration. As of December 31, 2018, the City estimated liability with regard to pollution remediation at this site to be $300,000.
The land at 3600 Smith Street for a new transit operations center was purchased in 2017. Per purchase agreement, the City set up an environmental holdback $750,000, from which the City may withdraw if the City incurs costs for eligible remediation work in excess of $821,500. An engineering report estimated cleanup cost $1.1 million. DOE has accepted Cleanup Action Plan and VCP site work has begun in 2017 and will continue into 2019. As of December 31, 2018, the City estimated liability with regard to pollution remediation at this site to be $821,500.
The estimated liability for each of these sites was prepared using the Expected Cash Flow Technique, which measures the liability as the sum of probability-weighted amounts in a range of possible estimated amounts. This is an estimate only, and potential for change exists resulting from price fluctuations, technology changes or changes in applicable laws or regulations. The estimates and underlying assumptions will be re-evaluated on an annual basis.
NOTE 18 - TAX ABATEMENTS
As of December 31, 2018, the City provides tax abatements through two programs – the Multifamily Housing Property Tax Exemption, and the New Job Tax Credit.
Multifamily Housing Property Tax Exemption The Multifamily Housing Property Tax Exemption program provides property tax exemptions to stimulate the construction of new multifamily housing and the rehabilitation of existing vacant and underutilized buildings for multifamily housing in the City’s urban center, in keeping with the goals of the Growth Management Act (Chapter 36.70A RCW).
The value of new construction, conversion, and rehabilitation improvements qualifying under this program are exempt from ad valorem property taxation for: • Ten years provided applications have been submitted prior to July 22, 2007; • Eight years if applications were submitted on or after July 22, 2007; or • Twelve years if applications were submitted on or after July 22, 2007, the property otherwise qualifies for the exemption under Chapter 84.14 RCW, and the owner commits to renting or selling at least twenty percent of the multifamily housing units as affordable housing units to low- and moderate-income households. Tax exemptions are obtained through application by the property owner to the Director of Planning and Community Development. Property owners receiving tax exemptions are required to file a notarized annual declaration with the Director indicating ongoing compliance, which is verified by City staff through an on-site verification.
New Jobs Tax Credit The purpose of the New Jobs Tax Credit is to encourage business growth or relocation into the City. In order to qualify for the tax credit, businesses must create fifty or more new full-time employment positions within four consecutive quarters. The credit is equal to one thousand dollars for each new full-time employment position created, and is used to reduce the amount of Business & Occupation tax owed by the business. A business may claim credit under this program multiple times, up to a cap of five hundred thousand per business.
Businesses must complete an application and submit it to the City Clerk. Businesses receiving the New Jobs Tax Credit must maintain the total number of full-time employment positions existing at the time the credit is claimed for a
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period of three years. If the business does not maintain the total number of full-time employment positions for three years, the credit will be forfeit and the business will be required to pay any amount of credit previously received.
Tax Abatement Program Amount of Taxes Abated Multifamily Property Tax Exemption $112,170 New Jobs Tax Credit $123,950
State of Washington Sales Tax Exemptions The State of Washington has tax abatement agreements that allow for sales/use tax exemptions and deferrals.
Purchases for the construction of new buildings, including labor and services rendered, used to manufacture commercial airplanes or fuselages or wings of commercial airplanes are exempt from sales and use tax per RCW 82.08.980 and 82.12.980. The exemption also applies to new buildings or parts of new buildings used for storing raw materials or finished products used to manufacture commercial airplanes and certain commercial airplane parts. Port districts, political subdivisions, or municipal corporations may also use the sales and use tax exemption when constructing new facilities to lease to these manufacturers. The eligible purchaser must present a Buyers' Retail Sales Tax exemption Certificate to the seller at the time of purchase.
Specific exemptions include:
• Data Center Server Equipment and Power Infrastructure Sale and Use Tax Exemption • High Technology Sales and Use Tax Deferral • Biotechnology and Medical Device Manufacturing Sales and Use Tax Deferral • Exemption for the Construction of New Facilities Used to Manufacture Commercial Airplanes, Fuselages, or Wings of Commercial Airplanes (Aerospace) • Exemption for Computer Hardware, Software, and Peripherals (Aerospace)
The State of Washington is prohibited by RCW 82.32.330 from disclosing detail on the amount of abatements provided under these exemptions and deferrals.
NOTE 19 - OTHER DISCLOSURES
A. CHANGES IN ACCOUNTING PRINCIPLES During the year ended December 31, 2018, the City implemented GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other than Pensions. The actuarial calculation for this change in accounting principle computed beginning liability for both the Fire and Police OPEB plans to increase the ending liability of December 31, 2017, from $5,919,487 to $47,629,000. See Note 1.B – Implementation of New Accounting Principles.
PAGE 82 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT CITY OF EVERETT FINANCIAL SECTION
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES- BUDGET AND ACTUAL
SCHEDULE OF REV ENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL GENERAL FUND FOR YEAR ENDED DECEM BER 31, 2018
V ARIANCE WITH FINAL BUDGET - ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) REV ENUES Taxes $ 86,903,235 $ 87,013,834 $ 85,965,473 $ (1,048,361) Licenses and permits 4,182,669 4,182,669 4,208,297 25,628 Intergovernmental revenues 4,101,461 4,459,543 4,691,721 232,178 Charges for services 6,630,647 6,912,189 6,844,574 (67,615) Fines and forfeits 1,366,500 1,366,500 1,636,704 270,204 Other revenues 891,175 896,175 1,800,423 904,248 T OT AL REV ENUES 104,075,687 104,830,910 105,147,192 316,282 EXPENDITURES Current:
General government services 23,540,648 25,401,069 23,043,656 2,357,413 Security of persons and property 71,138,788 72,290,260 67,964,055 4,326,205 Transportation 4,397,551 4,397,551 4,393,494 4,057
Economic environment 6,147,898 6,497,306 5,709,653 787,653 Mental and physical health 1,223,958 1,251,958 1,166,924 85,034 Culture and recreation 740,722 740,722 730,842 9,880 Capital outlay 16,000 262,043 126,209 135,834 TOTAL EXPENDITURES 107,205,565 110,840,909 103,134,833 7,706,076 Excess (deficiency) of revenues over (under) expenditures (3,129,878) (6,009,999) 2,012,359 8,022,358 OTHER FINANCING SOURCES (USES) Transfers in 8,056,454 8,056,454 8,190,296 133,842 Transfers out (3,809,176) (4,834,176) (9,587,764) (4,753,588) Other Sources - - 5,920 5,920 Total other financing sources (uses) 4,247,278 3,222,278 (1,391,548) (4,613,826)
Net change in fund balances 1,117,400 (2,787,721) 620,811 3,408,532
Fund balances - beginning 25,882,600 30,133,009 64,920,501 34,787,492 FUND BALANCES - ENDING $ 27,000,000 $ 27,345,288 $ 65,541,312 $ 38,196,024
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Required Supplementary Information Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual Note to RSI
Note A – Explanation of Difference between General Fund Budgetary Revenues and Expenditures and GAAP Revenues and Expenditures
The annual budgets are adopted on a basis consistent with generally accepted accounting principles. With the implementation of GASB 54, the funds listed below, which were previously reported as Special Revenue funds will continue to be budgeted and operational, but will be consolidated with the General Fund for reporting purposes.
Revenues Actual Amount $ 105,147,192
Differences - Budget to GAAP Add funds no longer meeting the definition of special revenue funds per GASB Statement No. 54 to General Fund Parks & Recreation Fund 9,443,829 Library Fund 5,337,358 Municipal Arts Fund 943,122 Conference Center Fund 119,884 Motor Vehicle Equip Repl Fund 155,785 Cum Reserve Real Prop Acq Fund 102,886 Property Management Fund 649,302 Senior Center Reserve Fund 101,939 Total revenues as reported on the statement of revenues, expenditures, and changes in fund balance - general fund $ 122,001,297
Expenditures Actual Amount $ 103,134,833 Differences - Budget to GAAP Add funds no longer meeting the definition of special revenue funds per GASB Statement No. 54 to General Fund Parks & Recreation Fund 8,937,254 Library Fund 5,021,847 Municipal Arts Fund 926,327 Conference Center Fund 27,201 Motor Vehicle Equip Repl Fund 3,814,817 Cum Reserve Real Prop Acq Fund 163,382 Property Management Fund 2,118,086 Senior Center Reserve Fund 84,581
Total expenditures as reported on the statement of revenues, expenditures, and changes in fund balance - general fund $ 124,228,328
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FIRE AND POLICE PENSION FUNDS
SCHEDULE OF CHANGES IN THE CITY’S NET PENSION LIABILITY AND RELATED RATIOS Last Nine Fiscal Years* 2018 2017 2016 2015 2014 2013 2012 2011 2010 Fire
Total pension liability Service cost ** $ - $ - $ - $ - $ - $ - $ - $ - $ - Interest expense 382,000 407,400 274,070 279,333 321,047 336,661 391,019 397,248 558,350 Effect of assumption changes (210,000) ------Benefits paid (722,000) (722,821) (792,142) (528,629) (903,934) (393,969) (485,124) (619,526) (750,321) Difference between expected and actual experience - 21,179 (170,129) 98,923 534,898 - 117,605 97,689 90,690 Changes of assumptions - 3,721,618 - - 1,156,048 - (913,665) - (3,120,762) Net changes (550,000) 3,427,376 (688,201) (150,373) 1,108,059 (57,308) (890,165) (124,589) (3,222,043) Total pension liability-beginning 10,569,759 7,142,383 7,830,584 7,980,957 6,872,898 6,930,206 7,820,371 7,944,960 11,167,003 Adjustment to the beginning balance (34,172) ------Total pension liability-ending $ 9,985,587 $ 10,569,759 $ 7,142,383 $ 7,830,584 $ 7,980,957 $ 6,872,898 $ 6,930,206 $ 7,820,371 $ 7,944,960 Plan fiduciary net position Contributions-employer/state $ 176,619 $ 515,525 $ 166,410 $ 1,365,598 $ 170,627 $ 155,946 $ 147,478 $ 154,877 $ 149,966 Investment income net of expenses 171,620 Expected Investment Earnings - 383,000 340,819 345,084 - - - - - Difference between expected and 511,470 101,404 245,782 461,607 163,869 actual investment earnings - (246,048) (341,313) (18,861) Prior period adjustment Benefit payments (721,622) (722,821) (792,142) (528,629) (903,934) (393,969) (485,124) (619,526) (750,321) Medical payments Administrative expenses (600) Other - (200) (525) (138) - - (3,729) (697) Net changes in plan fiduciary net position (373,983) (70,544) (626,751) 1,163,054 (221,837) (136,619) (91,864) (6,771) (437,183) Plan fiduciary net position-beginning 10,530,903 10,601,447 11,228,198 10,065,144 10,286,981 10,423,600 10,225,226 4,231,997 4,669,180 Prior period correction ------290,238 6,000,000 Plan fiduciary net position-ending $ 10,156,920 $ 10,530,903 $ 10,601,447 $ 11,228,198 $ 10,065,144 $ 10,286,981 $ 10,423,600 $ 10,225,226 $ 4,231,997
Net pension liability $ (171,333) $ 38,856 $ (3,459,064) $ (3,397,614) $ (2,084,187) $ (3,414,083) $ (3,493,394) $ (2,404,855) $ 3,712,963
Plan fiduciary net position as a percentage of the total pension liability 101.72% 99.63% 148.43% 143.39% 126.11% 149.67% 150.41% 130.75% 53.27% Covered payroll $ - $ 51,232 $ 199,405 $ 187,937 $ 286,645 $ 339,682 $ 622,642 $ 545,905 $ 891,440 Net pension liability as a percentage of covered payroll N/A 75.84% -1734.69% -1807.85% -727.10% -1005.08% -561.06% -440.53% 416.51%
Police
Total pension liability Service cost ** $ - $ - $ - $ - $ - $ - $ - $ - $ - Interest expense 195,635 214,500 175,970 193,424 287,037 292,753 297,663 306,872 296,385 Effect of assumption changes (86,056) Benefits paid (468,073) (477,050) (503,312) (531,296) (376,067) (438,065) (526,522) (533,545) (587,493) Difference between expected and actual experience - 29,952 (132,630) (160,813) (1,768,304) - 38,128 42,485 45,660 Changes of assumptions - 1,152,261 - - 1,454,959 - 311,552 - 455,201 Net changes (358,494) 919,663 (459,972) (498,685) (402,375) (145,312) 120,821 (184,188) 209,753 Total pension liability-beginning 5,487,402 4,567,739 5,027,711 5,526,396 5,928,771 6,074,083 5,953,262 6,137,450 5,927,697 Adjustment to the beginning balance (38,575) Total pension liability-ending $ 5,090,333 $ 5,487,402 $ 4,567,739 $ 5,027,711 $ 5,526,396 $ 5,928,771 $ 6,074,083 $ 5,953,262 $ 6,137,450
Plan fiduciary net position Contributions-employer/state $ - $ 800,000 $ 1,468,086 $ 2,161,085 $ - $ - $ - $ - $ - Investment income net of expenses 102,996 Expected Investment Earnings - 186,000 86,287 85,176 - - - - - Difference between expected and actual investment earnings - (91,479) (55,542) (3,141) Benefit payments (468,073) (477,050) (503,312) (531,296) (376,067) (438,065) (526,522) (533,545) (587,493) Other (200) (200) (175) (413) - - - - Net changes in plan fiduciary net position (365,277) 417,271 995,344 1,711,411 (376,067) (438,065) (526,522) (533,545) (587,493) Plan fiduciary net position-beginning 5,628,301 5,211,030 4,215,686 2,504,275 2,880,342 2,622,845 4,524,250 557,795 1,145,288 Prior period correction (1,374,883) 4,500,000 Plan fiduciary net position-ending $ 5,263,024 $ 5,628,301 $ 5,211,030 $ 4,215,686 $ 2,504,275 $ 2,184,780 $ 2,622,845 $ 4,524,250 $ 557,795
Net pension liability $ (172,691) $ (140,899) $ (643,291) $ 812,025 $ 3,022,121 $ 3,743,991 $ 3,451,238 $ 1,429,012 $ 5,579,655
Plan fiduciary net position as a percentage of the total pension liability 103.39% 102.57% 114.08% 83.85% 45.31% 36.85% 43.18% 76.00% 9.09% Covered payroll $ - $ - $ 137,179 $ 138,549 $ 239,221 $ 306,766 $ 362,732 $ 436,656 $ 767,632 Net pension liability as a percentage of covered payroll N/A N/A -468.94% 586.09% 1263.32% 1220.47% 951.46% 327.26% 726.87%
* This schedule will be 10 years as information is available ** Service cost is $0, since none of the active employees are eligible for the additional service credits.
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SCHEDULE OF CITY CONTRIBUTIONS Last Nine Fiscal Years*
Fire 2018 2017 2016 2015 2014 2013 2012 2011 2010 Actuarially determined contribution $ 21,000 $ 20,000 $ (85,143) $ (81,088) $ (187,676) $ (178,998) $ (131,810) $ (125,850) $ 105,226 Contributions - 350,000 166,410 1,365,599 170,627 155,946 147,478 154,877 149,966 Contribution deficiency (excess) $ 21,000 $ (330,000) $ (251,553) $ (1,446,687) $ (358,303) $ (334,944) $ (279,288) $ (280,727) $ (44,740)
Covered payroll $ - $ 51,232 $ 199,405 $ 187,937 $ 286,645 $ 339,682 $ 622,642 $ 545,905 $ 891,440
Contributions as a percentage of covered payroll N/A 683.17% 83.45% 726.63% 59.53% 45.91% 23.69% 28.37% 16.82%
Police Actuarially determined contribution $ 41,000 $ 40,000 $ 144,972 $ 138,069 $ 185,912 $ 177,059 $ 131,541 $ 125,278 $ 111,447 Contributions - 800,000 1,468,086 2,161,085 - - - - - Contribution deficiency (excess) $ 41,000 $ (760,000) $ (1,323,114) $ (2,023,016) $ 185,912 $ 177,059 $ 131,541 $ 125,278 $ 111,447
Covered payroll $ - $ - $ 137,178 $ 138,549 $ 239,221 $ 306,766 $ 362,732 $ 436,656 $ 767,632 Contributions as a percentage of covered payroll N/A N/A 1070.21% 1559.80% 0.00% 0.00% 0.00% 0.00% 0.00%
Valuation date: Actuarially determined contribution rates are as of January 1, 2017. Methods and assumptions used to determine contribution rates: Actuarial cost method Entry age normal cost Amortization period Closed 30 year amortization period of the unfunded obligation beginning January 1, 2000. Asset valuation method Actuarial value of assets equal to market value Inflation 2.25% Salary increase 3.00% Investment rate of return 3.75% Mortality Service-retired members and spouses: RP-2000 Mortality Table (combined healthy) with generational projection using 100% of Projections Scale BB, with ages set back one year for males and set forward one year for females. Disabled members: RP-2000 Mortality Table (combined healthy) with generational projection using 100% of Projections Scale BB, with ages set forward two years. Retirement age All actives are retired as of the valuation date.
* This schedule will be 10 years as information is available
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SCHEDULE OF INVESTMENT RETURNS Last Nine Fiscal Years *
Annual money-weighted rate of return, net of investment expenses 2018 2017 2016 2015 2014 2013 2012 2011 2010 Fire 1.67% 1.87% 0.05% 3.14% 9.76% -6.52% 2.14% 7.48% 3.76% Police 1.92% 1.84% -0.01% 3.18% 9.82% -6.31% 2.68% 6.40% 3.66%
* This schedule will be 10 years as information is available
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 87 CITY OF EVERETT FINANCIAL SECTION
City of Everett Schedule of Proportionate Share of the Net Pension Liability PERS 1 As of June 30, 2018 Last 4 Fiscal Years *
2018 2017 2016 2015
Employer's proportion of the net pension liability (asset) % 0.475870% 0.485018% 0.509161% 0.479404%
Employer's proportionate share of the net pension liability $ 21,252,516 23,014,482 27,344,344 25,077,288
TOTAL $ 21,252,516 23,014,482 27,344,344 25,077,288
Covered payroll $ 61,198,921 59,020,113 58,907,060 52,435,930
Employer's proportionate share of the net pension liability as a percentage of covered payroll % 34.73% 38.99% 46.42% 47.82%
Plan fiduciary net position as a percentage of the total pension liability % 63.22% 61.24% 57.03% 59.10%
Notes to Schedule: *Until a full 10-year trend is compiled, only information for those years available is presented.
City of Everett Schedule of Proportionate Share of the Net Pension Liability PERS 2 & 3 As of June 30, 2018 Last 4 Fiscal Years *
2018 2017 2016 2015 Employer's proportion of the net pension liability (asset) % 0.565717% 0.577585% 0.597904% 0.562203% Employer's proportionate share of the net pension liability $ 9,659,114 20,068,318 30,103,994 20,087,834 TOTAL $ 9,659,114 20,068,318 30,103,994 20,087,834
Covered payroll $ 58,859,395 56,628,484 56,301,378 49,849,648
Employer's proportionate share of the net pension liability as a percentage of covered payroll % 16.41% 35.44% 53.47% 40.30% Plan fiduciary net position as a percentage of the total pension liability % 95.77% 90.97% 85.82% 89.20% Notes to Schedule: *Until a full 10-year trend is compiled, only information for those years available is presented.
PAGE 88 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT CITY OF EVERETT FINANCIAL SECTION
City of Everett Schedule of Proportionate Share of the Net Pension Liability PSER 2 As of June 30, 2018 Last 4 Fiscal Years *
2018 2017 2016 2015
Employer's proportion of the net pension liability (asset) % 0.210589% 0.211104% 0.218027% 0.211384%
Employer's proportionate share of the net pension liability $ 2,609 41,362 92,657 38,582
TOTAL $ 2,609 41,362 92,657 38,582
Covered payroll $ 826,269 747,434 707,814 617,932
Employer's proportionate share of the net pension liability as a percentage of covered payroll % 0.32% 5.53% 13.09% 6.24% Plan fiduciary net position as a percentage of the total pension liability % 99.79% 96.26% 90.41% 95.08%
Notes to Schedule: *Until a full 10-year trend is compiled, only information for those years available is presented.
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 89 CITY OF EVERETT FINANCIAL SECTION
City of Everett Schedule of Employer Contributions PERS 1 For the year ended December 31, 2018 Last 4 Fiscal Years *
2018 2017 2016 2015
Statutorily or contractually required contributions $ 3,322,499 2,939,289 2,822,767 2,525,814
Contributions in relation to the statutorily or contractually required contributions $ (3,322,499) (2,939,289) (2,822,767) (2,525,814)
Contribution deficiency (excess) $ - - - -
Covered payroll $ 63,570,948 57,968,890 57,908,615 55,592,788
Contributions as a percentage of covered payroll % 5.23% 5.07% 4.87% 4.54%
Notes to Schedule: *Until a full 10-year trend is compiled, only information for those years available is presented.
City of Everett
Schedule of Employer Contributions PERS 2 & 3 For the year ended December 31, 2018 Last 4 Fiscal Years *
2018 2017 2016 2015
Statutorily or contractually required contributions $ 4,592,193 3,794,281 3,462,296 2,956,452
Contributions in relation to the statutorily or contractually required contributions $ (4,592,193) (3,794,281) (3,462,296) (2,956,452)
Contribution deficiency (excess) $ - - - -
Covered payroll $ 61,248,148 55,682,589 55,524,137 52,988,069
Contributions as a percentage of covered payroll % 7.50% 6.81% 6.24% 5.58%
Notes to Schedule: *Until a full 10-year trend is compiled, only information for those years available is presented.
PAGE 90 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT CITY OF EVERETT FINANCIAL SECTION
City of Everett Schedule of Employer Contributions LEOFF 2 For the year ended December 31, 2018 Last 4 Fiscal Years *
2018 2017 2016 2015
Statutorily or contractually required contributions $ 2,349,334 2,055,917 2,642,544 1,847,723
Contributions in relation to the statutorily or
contractually required contributions $ (2,349,334) (2,055,917) (2,642,544) (1,847,723)
Contribution deficiency (excess) $ - - - -
Covered payroll $ 44,471,510 39,983,105 38,093,810 36,588,195
Contributions as a percentage of covered payroll % 5.28% 5.14% 6.94% 5.05%
Notes to Schedule: *Until a full 10-year trend is compiled, only information for those years available is presented.
City of Everett Schedule of Employer Contributions PSER 2 For the year ended December 31, 2018 Last 4 Fiscal Years *
2018 2017 2016 2015
Statutorily or contractually required contributions $ 61,315 49,510 46,918 43,679
Contributions in relation to the statutorily or
contractually required contributions $ (61,315) (49,510) (46,918) (43,679)
Contribution deficiency (excess) $ - - - -
Covered payroll $ 896,098 743,526 711,952 675,627
Contributions as a percentage of covered payroll % 6.84% 6.66% 6.59% 6.46%
Notes to Schedule: *Until a full 10-year trend is compiled, only information for those years available is presented.
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 91 CITY OF EVERETT FINANCIAL SECTION
SCHEDULE OF CHANGES IN THE CITY’S NET OPEB LIABILITY AND RELATED RATIOS Last One Fiscal Year*
2018 Fire Total OPEB liability Service cost ** $ - Interest expense 1,578,000 Effect of assumption changes (2,765,000) Benefits paid (1,431,000) Difference between expected and actual experience - Changes of assumptions - Net changes (2,618,000) Total OPEB liability-beginning 45,785,000 Adjustment to the beginning balance - Total OPEB liability-ending $ 43,167,000 Plan fiduciary net position Contributions-employer/state $ 53,000 Investment income net of expenses 335,000 Expected Investment Earnings - Difference between expected and actual investment earnings - Prior period adjustment Benefit payments (1,431,000) Medical payments Administrative expenses (28,000) Other - Net changes in plan fiduciary net position (1,071,000) Plan fiduciary net position-beginning 18,368,000 Prior period correction - Plan fiduciary net position-ending $ 17,297,000
Net OPEB liability $ 25,870,000 Plan fiduciary net position as a percentage of the total OPEB liability 40.07% Covered employee payroll N/A Net OPEB liability as a percentage of covered employee payroll N/A
Police Total OPEB liability Service cost ** $ - Interest expense 1,114,000 Effect of assumption changes (2,075,000) Benefits paid (972,000) Difference between expected and actual experience - Changes of assumptions - Net changes (1,933,000) Total OPEB liability-beginning 32,298,000 Adjustment to the beginning balance - Total OPEB liability-ending $ 30,365,000
Plan fiduciary net position Contributions-employer/state $ 53,000 Investment income net of expenses 220,000 Expected Investment Earnings - Difference between expected and actual investment earnings - Benefit payments (972,000) Other - Net changes in plan fiduciary net position (715,000) Plan fiduciary net position-beginning 12,086,000 Plan fiduciary net position-ending $ 11,371,000 Net OPEB liability $ 18,994,000
Plan fiduciary net position as a percentage of the total OPEB liability 37.45% Covered employee payroll $ - Net OPEB liability as a percentage of covered employee payroll N/A * This schedule will be 10 years as information is available ** Service cost is $0, since none of the active employees are eligible for the additional service credits.
PAGE 92 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT CITY OF EVERETT FINANCIAL SECTION
SCHEDULE OF CITY CONTRIBUTIONS Last One Fiscal Year*
Fire 2018 Actuarially determined contribution $ 2,024,000 Contributions - Contribution deficiency (excess) $ 2,024,000
Covered employee payroll $ - Contributions as a percentage of covered- employee payroll N/A Police Actuarially determined contribution $ 1,518,000 Contributions - Contribution deficiency (excess) $ 1,518,000 Covered employee payroll $ - Contributions as a percentage of covered- employee payroll N/A
Valuation date: Actuarially determined contribution rates are as of January 1, 2017.
Methods and assumptions used to determine contribution rates: Actuarial cost method Entry age normal cost Amortization period Closed 30 year amortization period of the unfunded obligation beginning January 1, 2000. Asset valuation method Actuarial value of assets equal to market value Inflation 2.25% Salary increase 3.00% Investment rate of return 3.75% Mortality Service-retired members and spouses: RP-2000 Mortality Table (combined healthy) with generational projection using 100% of Projections Scale BB, with ages set back one year for males and set forward one year for females. Disabled members: RP-2000 Mortality Table (combined healthy) with generational projection using 100% of Projections Scale BB, with ages set forward two years. Retirement age All actives are retired as of the valuation date. * This schedule will be 10 years as information is available
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 93 CITY OF EVERETT FINANCIAL SECTION
SCHEDULE OF INVESTMENT RETURNS Last One Fiscal Year *
Annual money-weighted rate of return, net of investment expenses 2018 Fire 1.90% Police 1.90%
* This schedule will be 10 years as information is available
PAGE 94 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT
COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES
GOVERNMENTAL FUNDS CITY OF EVERETT FINANCIAL SECTION
COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS DECEMBER 31, 2018
TOTAL NONM AJOR SPECIAL CAPITAL GOV ERNM ENTAL REV ENUE DEBT SERV ICE PROJECT S FUNDS ASSETS Cash and cash equivalents $ 3,183,607 $ 28,319 $ 328,932 $ 3,540,858 Investments 23,625,436 - 2,144,915 25,770,351 Receivables, net Taxes 1,160,205 - - 1,160,205 Customer accounts 19,782 - - 19,782 Interest 86,733 - 8,083 94,816 Due from other funds 81 - - 81 Due from other governmental units 733,852 - 100,121 833,973 Special assessments - non-current - 96,824 - 96,824 Notes/contracts receivable 13,320,462 - - 13,320,462 TOTAL ASSETS $ 42,130,158 $ 125,143 $ 2,582,051 $ 44,837,352
LIABILITIES Wages payable $ 352,143 $ - $ - $ 352,143 Accounts payable 496,699 - 58,577 555,276 Interfund payable 28,925 - - 28,925 Due to other governmental units 12,210 - 1,289 13,499 Revenues collected in advance 109,664 - 250,000 359,664 Other liabilities 815 - - 815 Unearned Revenue - - 56,640 56,640 TOTA L LIA BILITIES 1,000,456 - 366,506 1,366,962
DEFERRED INFLOWS OF RESOURCES Unavailable revenues-special assessments - 96,824 - 96,824 TOTA L DEFERRED INFLOWS OF RESOURCES - 96,824 - 96,824
FUND BALANCES Restricted 36,401,562 - 1,183,919 37,585,481 Assigned 4,728,140 28,319 1,031,626 5,788,085 TOTA L FUND BA LA NCES 41,129,702 28,319 2,215,545 43,373,566 TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES $ 42,130,1580 $ 125,1430 $ 2,582,0510 $ 44,837,352 0
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 95
CITY OF EVERETT FINANCIAL SECTION
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED DECEMBER 31, 2018
TOTAL NONM AJOR SPECIAL DEBT CAPITAL GOV ERNM ENTAL REV ENUE SERV ICE PROJECT S FUNDS REV ENUES Taxes $ 13,934,183 $ - $ - $ 13,934,183 Intergovernmental revenues 6,067,384 - 1,285,794 7,353,178 Charges for services 3,348,804 - - 3,348,804 Fines and forfeits 4,469 - - 4,469 Other revenues 1,320,574 16,698 114,837 1,452,109 Total revenues 24,675,414 16,698 1,400,631 26,092,743
EXPENDITURES Current: General government services 69,742 - 592,308 662,050 Security of persons and property 9,879,880 - - 9,879,880 Transportation 2,959,446 - - 2,959,446 Economic environment 1,480,086 - - 1,480,086 Culture and recreation 623,766 - - 623,766 Capital outlay 4,651,715 - 3,374,952 8,026,667 Debt service: Principal - 6,765,000 - 6,765,000 Interest - 895,774 - 895,774 Other debt service costs 14,945 - - 14,945 Total expenditures 19,679,580 7,660,774 3,967,260 31,307,614 Excess (deficiency) of revenues over (under) expenditures 4,995,834 (7,644,076) (2,566,629) (5,214,871) OTHER FINANCING SOURCES (USES) Disposition of capital assets 6,000 - - 6,000 Transfers in 2,343,947 7,670,132 2,778,126 12,792,205 Transfers out (4,641,730) (18,716) (168,049) (4,828,495) 5,310 - - 5,310 Total other financing sources (uses) (2,286,473) 7,651,416 2,610,077 7,975,020
Net change in fund balances 2,709,361 7,340 43,448 2,760,149
Fund balances - beginning 38,420,341 20,979 2,172,097 40,613,417 FUND BALANCES - ENDING $ 41,129,702 $ 28,319 $ 2,215,545 $ 43,373,566
PAGE 96 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT
SPECIAL REVENUE FUNDS
119 The Street Improvement Fund accounts for street overlay improvement projects.
120 The Streets Fund accounts for maintenance and operation of all transportation routes, preparation of streets planned for overlay and maintenance of the Central Business District area.
138 The Motel Tax Fund accumulates the hotel/motel tax for tourism promotion and publicity of the City, promotion of an arts center and capital improvements at the stadium.
148 The Cumulative Reserve for Parks Fund accounts for money accumulated for capital improvements and acquisition of land for parks.
151 The Fund for Animals is a reserve fund that accumulates contributions for animal welfare issues and medical expenses.
152 The Cumulative Reserve for Library Fund accounts for specific capital items and projects that relate to the library program and for literary and cultural services for the intellectual improvement of the individual.
153 The Emergency Medical Services Fund accounts for the paramedic program funded by a special property tax levy passed by the citizens of Everett and ambulance transport fees.
156 The Criminal Justice Fund accounts for the enhancement of new programs of the police department, prosecutor’s office and municipal court.
157 The Traffic Mitigation Fund is a reserve fund for traffic improvements resulting from development in Everett.
159 The Transportation Benefit District Fund accounts for funding for the preservation, maintenance, and construction of local transportation infrastructure in Everett.
170 The City of Everett CDE LLC is a blended component unit of the City. The City of Everett CDE LLC is a separate legal entity whose purpose is to help alleviate poverty and incentivize investments into low income community census tracts.
197 The Community Housing Improvement Program (CHIP) Loan Fund accounts for low interest loans to low-income homeowners in several Everett Neighborhoods. Loans are provided through a loan pool of HUD Block Grant funds.
198 The Community Development Block Grants Fund accounts for a variety of housing and community development programs aimed primarily at low and moderate-income persons and the prevention or elimination of slums and blight. The financing is from Community Block Grant HUD funds.
Funds previously reported as Special Revenue Funds combined with the General Fund Because the city legally adopts budgets for these funds individually, budget to actual comparisons for these funds are presented along with the other governmental funds Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget To Actual
101 The Parks and Recreation Fund accounts for the operations of the City's park system and swimming pool.
110 The Library Fund accounts for the operation of the two City libraries.
112 The Municipal Arts Fund accounts for the maintenance and operations of the City’s performing arts facility, city municipal arts programs, and the 1% for Art program.
114 The Conference Center Fund accounts for the maintenance and operations at the City’s Special Events Center.
115 The General Government Special Projects Fund accounts for specific non-recurring projects.
126 The Motor Vehicle and Equipment Replacement Reserve Fund accumulates funding to provide for the replacement of general government motor vehicles and equipment.
145 The Cumulative Reserve for Real Property Acquisition Fund accounts for real property acquisitions.
146 The Property Management Fund accounts for several city-owned commercial buildings, and the general government building maintenance and repair reserve.
149 The Senior Center Reserve Fund accounts for funding of senior center activities and special events.
160 The Contingency Reserve Fund is a reserve fund for emergencies and contingency expenses funded from the general fund in the form of a general property tax allocation. Expenditure of moneys will be based on a consensus between Administration and the City Council.
CITY OF EVERETT FINANCIAL SECTION
COMBINING BALANCE SHEET NONMAJOR SPECIAL REVENUE FUNDS DECEMBER 31, 2018 (Page 1 of 4)
119 148 ST REET 120 138 CUM . RESERV E IMPROVEMENT ST REET S HOTEL/MOTEL TAX PARKS FUND FUND FUND FUND ASSETS Cash and cash equivalents $ 53,273 $ 73,059 $ 25,585 $ 512,217 Investments 1,475,880 2,024,033 708,805 2,000,493 Receivables, net Taxes 110,030 235,324 81,586 - Customer accounts - 1,326 - - Interest 10,799 8,916 - 13,017 Due from other funds - - - - Due from other governmental units - - - - Notes/contracts receivable - - - - TOTAL ASSETS $ 1,649,982 $ 2,342,658 $ 815,976 $ 2,525,727
LIABILITIES Wages payable $ - $ 23,483 $ - $ - Accounts payable 156,245 50,518 177,906 3,465 Interfund payable - - - - Due to other governmental units - - - - Revenues collected in advance - - - - Other liabilities - 10 528 - TOTA L LIA BILITIES 156,245 74,011 178,434 3,465
FUND BALANCES Restricted - - 637,542 2,324,296 Assigned 1,493,737 2,268,647 - 197,966 TOTA L FUND BA LA NCES 1,493,737 2,268,647 637,542 2,522,262 TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES $ 1,649,982 $ 2,342,658 $ 815,976 $ 2,525,727
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 97
CITY OF EVERETT FINANCIAL SECTION
COMBINING BALANCE SHEET NONMAJOR SPECIAL REVENUE FUNDS DECEMBER 31, 2018 (Page 2 of 4)
153 152 EM ERGENCY 156 151 CUM . RESERV E MEDICAL CRIM INAL ANIMALS LIBRARY SERV ICES JUSTICE FUND FUND FUND FUND ASSETS Cash and cash equivalents $ 23,814 $ 385,179 $ 176,995 $ 918,428 Investments 396,180 - 307,782 8,642,329 Receivables, net Taxes - - - 495,869 Customer accounts - 700 17,681 - Interest - - 1,109 33,019 Due from other funds - - - 81 Due from other governmental units - - 4,909 - Notes/contracts receivable - - - - TOTAL ASSETS $ 419,994 $ 385,879 $ 508,476 $ 10,089,726
LIABILITIES Wages payable $ - $ - $ 322,021 $ - Accounts payable 12,551 518 29,860 15,579 Interfund payable - - - - Due to other governmental units - - - - Revenues collected in advance - - - - Other liabilities 30 247 - - TOTA L LIA BILITIES 12,581 765 351,881 15,579
FUND BALANCES Restricted 238,901 117,346 - 10,043,355 Assigned 168,512 267,768 156,595 30,792 TOTA L FUND BA LA NCES 407,413 385,114 156,595 10,074,147 TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES $ 419,994 $ 385,879 $ 508,476 $ 10,089,726
PAGE 98 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT
CITY OF EVERETT FINANCIAL SECTION
COMBINING BALANCE SHEET NONMAJOR SPECIAL REVENUE FUNDS DECEMBER 31, 2018 (Page 3 of 4)
157 159 170 TRAFFIC Transportation Everett MITIGATION Benefit Dist. CDE LLC FUND FUND FUND ASSETS Cash and cash equivalents $ 323,512 $ 19,898 $ 251,228 Investments 6,805,201 551,259 2,484 Receivables, net Taxes - 237,396 - Customer accounts - - 75 Interest 19,873 - - Due from other funds - - - Due from other governmental units 5,131 - - Notes/contracts receivable - - - TOTAL ASSETS $ 7,153,717 $ 808,553 $ 253,787
LIABILITIES Wages payable $ - $ - $ - Accounts payable - - - Interfund payable - - - Due to other governmental units - - - Revenues collected in advance - - 109,664 Other liabilities - - - TOTA L LIA BILITIES - - 109,664
FUND BALANCES Restricted 7,153,717 808,553 - Assigned - - 144,123 TOTA L FUND BA LA NCES 7,153,717 808,553 144,123 TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES $ 7,153,717 $ 808,553 $ 253,787
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 99
CITY OF EVERETT FINANCIAL SECTION
COMBINING BALANCE SHEET NONMAJOR SPECIAL REVENUE FUNDS DECEMBER 31, 2018 (Page 4 of 4)
197 198 TOTAL CHIP LOAN COM M . DEV EL . NONM AJOR PROGRAM BLOCK GRANTS SPECIAL REV ENUE FUND FUND FUNDS ASSETS Cash and cash equivalents $ 416,922 $ 3,497 $ 3,183,607 Investments 710,990 - 23,625,436 Receivables, net Taxes - - 1,160,205 Customer accounts - - 19,782 Interest - - 86,733 Due from other funds - - 81 Due from other governmental units 656,110 67,702 733,852 Notes/contracts receivable 12,603,197 717,265 13,320,462 TOTAL ASSETS $ 14,387,219 $ 788,464 $ 42,130,158
LIABILITIES Wages payable $ 4,853 $ 1,786 $ 352,143 Accounts payable 29,818 20,239 496,699 Interfund payable - 28,925 28,925 Due to other governmental units 34 12,176 12,210 Revenues collected in advance - - 109,664
Other liabilities - - 815
TOTA L LIA BILITIES 34,705 63,126 1,000,456
FUND BALANCES Restricted 14,352,514 725,338 36,401,562 Assigned - - 4,728,140 TOTA L FUND BA LA NCES 14,352,514 725,338 41,129,702
TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES $ 14,387,219 $ 788,464 $ 42,130,158
PAGE 100 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT
CITY OF EVERETT FINANCIAL SECTION
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR SPECIAL REVENUE FUNDS FOR THE YEAR ENDED DECEMBER 31, 2018 (Page 1 of 4)
119 148 ST REET 120 138 CUM . RESERV E IMPROVEMENT ST REET S HOTEL/MOTEL TAX PARKS FUND FUND FUND FUND
REV ENUES Taxes $ 981,682 $ 1,403,155 $ 680,906 $ - Intergovernmental revenues 918,796 1,986,444 - - Charges for services - 2,037 - 13,441 Fines and forfeits - - - - Other revenues 20,743 42,531 10,208 446,925 Total revenues 1,921,221 3,434,167 691,114 460,366
EXPENDITURES Current: General government services - - - - Security of persons and property - - - - Transportation - 2,959,446 - - Economic environment - - - 37,135 Culture and recreation - - 583,590 12,962 Capital outlay 3,496,102 - - 555,690 Other debt service costs - - - - Total expenditures 3,496,102 2,959,446 583,590 605,787
Excess (deficiency) of revenues over (under) expenditures (1,574,881) 474,721 107,524 (145,421) OTHER FINANCING SOURCES (USES) Disposition of capital assets - - - - Transfers in 2,299,936 - - - Transfers out (250,600) - (60,000) - - 5,025 285 - - Total other financing sources (uses) 2,054,361 285 (60,000) -
Net change in fund balances 479,480 475,006 47,524 (145,421)
Fund balances - beginning 1,014,257 1,793,641 590,018 2,667,683
FUND BALANCES - ENDING $ 1,493,737 $ 2,268,647 $ 637,542 $ 2,522,262
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 101
CITY OF EVERETT FINANCIAL SECTION
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR SPECIAL REVENUE FUNDS FOR THE YEAR ENDED DECEMBER 31, 2018 (Page 2 of 4)
152 153 156 151 CUM . RESERV E EM ERGENCY CRIM INAL ANIMALS LIBRARY M EDICAL SERV ICES JUSTICE FUND FUND FUND FUND REV ENUES Taxes $ - $ - $ 6,698,149 $ 2,402,748 Intergovernmental revenues - - 177,678 1,065,999 Charges for services 7,140 3,159 1,644,171 185,077 Fines and forfeits - - - 4,469 Other revenues 132,470 93,281 66,693 181,027 Total revenues 139,610 96,440 8,586,691 3,839,320 EXPENDITURES Current: General government services - - - 58,527 Security of persons and property - - 9,541,688 338,192 Transportation - - - - Economic environment 128,165 - - - Culture and recreation - 27,214 - - Capital outlay - 13,108 248,778 337,973 Other debt service costs - - 14,945 - Total expenditures 128,165 40,322 9,805,411 734,692 Excess (deficiency) of revenues over (under) expenditures 11,445 56,118 (1,218,720) 3,104,628 OTHER FINANCING SOURCES (USES) Disposition of capital assets - - 6,000 - Transfers in - - - 44,011 Transfers out - - - (2,331,194) - - - - - Total other financing sources (uses) - - 6,000 (2,287,183)
Net change in fund balances 11,445 56,118 (1,212,720) 817,445
Fund balances - beginning 395,968 328,996 1,369,315 9,256,702
FUND BALANCES - ENDING $ 407,413 $ 385,114 $ 156,595 $ 10,074,147
PAGE 102 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT
CITY OF EVERETT FINANCIAL SECTION
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR SPECIAL REVENUE FUNDS FOR THE YEAR ENDED DECEMBER 31, 2018 (Page 3 of 4)
157 159 170 TRAFFIC Transportation EV ERET MITIGATION Benefit District CDE LLC FUND FUND FUND REV ENUES Taxes $ - $ 1,767,543 $ - Intergovernmental revenues - - - Charges for services 1,493,779 - - Fines and forfeits - - - Other revenues 83,745 20,485 56,664 Total revenues 1,577,524 1,788,028 56,664
EXPENDITURES Current: General government services - - 11,215 Security of persons and property - - - Transportation - - - Economic environment - - - Culture and recreation - - - Capital outlay - 64 - Other debt service costs - - - Total expenditures - 64 11,215
Excess (deficiency) of revenues over (under) expenditures 1,577,524 1,787,964 45,449 OTHER FINANCING SOURCES (USES) Disposition of capital assets - - - Transfers in - - - Transfers out - (1,999,936) - - - - - Total other financing sources (uses) - (1,999,936) -
Net change in fund balances 1,577,524 (211,972) 45,449
Fund balances - beginning 5,576,193 1,020,525 98,674
FUND BALANCES - ENDING $ 7,153,717 $ 808,553 $ 144,123
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 103
CITY OF EVERETT FINANCIAL SECTION
COMBINING STATEMENT OF REVENUES EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR SPECIAL REVENUE FUNDS FOR THE YEAR ENDED DECEMBER 31, 2018 (Page 4 of 4)
197 198 TOTAL CHIP LOAN COM M . DEV EL . NONM AJOR PROGRAM BLOCK GRANTS SPECIAL REV ENUE FUND FUND FUNDS REV ENUES Taxes $ - $ - $ 13,934,183 Intergovernmental revenues 1,420,343 498,124 6,067,384 Charges for services - - 3,348,804 Fines and forfeits - - 4,469 Other revenues 164,499 1,303 1,320,574 Total revenues 1,584,842 499,427 24,675,414
EXPENDITURES Current: General government services - - 69,742 Security of persons and property - - 9,879,880 Transportation - - 2,959,446 Economic environment 816,662 498,124 1,480,086 Culture and recreation - - 623,766 Capital outlay - - 4,651,715 Other debt service costs - - 14,945 Total expenditures 816,662 498,124 19,679,580 Excess (deficiency) of revenues over (under) expenditures 768,180 1,303 4,995,834 OTHER FINANCING SOURCES (USES) Disposition of capital assets - - 6,000 Transfers in - - 2,343,947 Transfers out - - (4,641,730) - - - 5,310 Total other financing sources (uses) - - (2,286,473)
Net change in fund balances 768,180 1,303 2,709,361 Fund balances - beginning 13,584,334 724,035 38,420,341
$ 14,352,514 $ 725,338 $ 41,129,702 FUND BALANCES - ENDING
PAGE 104 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT
DEBT SERVICE FUNDS
210 The Bond Redemption Fund accumulates money from special property tax levies and investment interest to pay principal redemption and interest payments on various bond issues. Included are the following programs:
2001 Variable Rate Demand Limited Tax General Obligation Bonds -- $13,000,000 variable rate demand limited general obligation bonds issued in 2001 for capital purposes.
2003 General Obligation Limited Refunding Bond -- $19,200,000 limited tax general obligation bond issued to fund the construction of the Conference Center located at the Everett Events Center ($15,000,000). $3,687,560 of the proceeds was used to refund the 1993 Everett Performing Arts Certificates of Participation, and $512,440 of the proceeds was used to refund the 1993 LTGO Fire Station #7/Animal Shelter bonds.
2012 General Obligation Limited Refunding Bond -- $13,935,000 limited tax general obligation bond issued to refund 2003 LTGO bonds scheduled to mature on or after December 1, 2013.
2014 Floating Rate Limited Tax General Obligation Refunding Bond -- $35,855,000 limited tax general obligation bond issued to refund 2001 VRBD and $27,415,000 variable rate demand LTGO issued by the Everett Public Facilities District in 2007.
243 The Local Improvement District (LID) Guaranty Fund was established in 1919 to guarantee the payments of LID bonds and other short-term obligations.
299 The Consolidated Local Improvement District (LID) Bond Redemption Fund collects special assessments levied against benefited properties for payment of principal and interest for special assessment bond issues.
CITY OF EVERETT FINANCIAL SECTION
COMBINING BALANCE SHEET NONMAJOR DEBT SERVICE FUNDS DECEMBER 31, 2018
299 210 243 CONSOLIDATED BOND L.I.D. L.I.D. BOND TOTAL REDEM PT ION GUARANTY REDEM PT ION NONM AJOR FUND FUND FUND DEBT SERV ICE ASSETS Cash and cash equivalents $ - $ 2,977 $ 25,342 $ 28,319 Special assessments - non-current - - 96,824 96,824 TOTAL ASSETS $ - $ 2,977 $ 122,166 $ 125,143
LIABILITIES TOTA L LIA BILITIES - - - -
DEFERRED INFLOWS OF RESOURCES Unavailable revenues-special assessments $ - $ - $ 96,824 $ 96,824
TOTA L DEFERRED INFLOWS OF RESOURCES - - 96,824 96,824
FUND BALANCES Assigned - 2,977 25,342 28,319 TOTA L FUND BA LA NCES - 2,977 25,342 28,319 TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES $ - $ 2,977 $ 122,166 $ 125,143
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 105
CITY OF EVERETT FINANCIAL SECTION
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR DEBT SERVICE FUNDS FOR THE YEAR ENDED DECEMBER 31, 2018
299 210 243 CONSOLIDATED TOTAL BOND L.I.D. L.I.D. BOND NONM AJOR REDEM PT ION GUARANTY REDEM PT ION DEBT SERV ICE FUND FUND FUND FUNDS REV ENUES Other revenues $ - $ 285 $ 16,413 $ 16,698 Total revenues - 285 16,413 16,698
EXPENDITURES Current: Principal 6,765,000 - - 6,765,000 Interest 895,774 - - 895,774 Total expenditures 7,660,774 - - 7,660,774
Excess (deficiency) of revenues over (under) expenditures (7,660,774) 285 16,413 (7,644,076) OTHER FINANCING SOURCES (USES) Transfers in 7,660,774 9,358 - 7,670,132 Transfers out - (9,358) (9,358) (18,716) Total other financing sources (uses) 7,660,774 - (9,358) 7,651,416
Net change in fund balances - 285 7,055 7,340
Fund balances - beginning - 2,692 18,287 20,979
FUND BALANCES - ENDING $ - $ 2,977 $ 25,342 $ 28,319
PAGE 106 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT
CAPITAL PROJECTS FUNDS
303 The Public Works Improvement Project Fund accounts for Public Works enhancement and improvement projects.
308 The Riverfront District Development Fund accounts for general government projects related to the Riverfront District development.
342 The City Facilities Construction Fund accounts for construction of new city facilities.
354 The Parks CIP 3 Construction Fund accounts for the design and construction of various park improvements funded by the City of Everett Capital Improvement Program III.
CITY OF EVERETT FINANCIAL SECTION
COMBINING BALANCE SHEET NONMAJOR CAPITAL PROJECTS FUNDS DECEMBER 31, 2018 (Page 1 of 2)
303 PUBLIC WORKS 308 342 IMPROVEMENT RIV ERFRONT CITY FACILITIES PROJECT DEVELOPMENT CONSTRUCT. FUND FUND FUND
ASSETS Cash and cash equivalents $ 68,668 $ 8,754 $ 138,608 Investments 1,902,388 242,527 - Receivables, net Interest 8,083 - - Due from other governmental units 56,601 - -
TOTAL ASSETS $ 2,035,740 $ 251,281 $ 138,608
LIABILITIES Accounts payable $ 49,999 $ - $ 7,063 Due to other governmental units 1,289 Revenues collected in advance 250,000 Unearned Revenue 56,640 TOTA L LIA BILITIES 357,928 - 7,063
FUND BALANCES Restricted 1,087,435 - - Assigned 590,377 251,281 131,545 TOTA L FUND BA LA NCES 1,677,812 251,281 131,545 TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES $ 2,035,740 $ 251,281 $ 138,608
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 107
CITY OF EVERETT FINANCIAL SECTION
COMBINING BALANCE SHEET NONMAJOR CAPITAL PROJECTS FUNDS DECEMBER 31, 2018 (Page 2 of 2)
354 TOTAL PARKS NONM AJOR CIP 3 CAPITAL CONSTRUCT. PROJECT S FUND FUNDS
ASSETS Cash and cash equivalents $ 112,902 $ 328,932 Investments - 2,144,915 Receivables, net Interest - 8,083 Due from other governmental units 43,520 100,121
TOTAL ASSETS $ 156,422 $ 2,582,051
LIABILITIES Accounts payable $ 1,515 $ 58,577 Due to other governmental units 1,289 Revenues collected in advance 250,000 Unearned Revenue 56,640 TOTA L LIA BILITIES 1,515 366,506
FUND BALANCES Restricted 96,484 1,183,919 Assigned 58,423 1,031,626 TOTA L FUND BA LA NCES 154,907 2,215,545 TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES $ 156,422 $ 2,582,051
PAGE 108 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT
CITY OF EVERETT FINANCIAL SECTION
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR CAPITAL PROJECTS FUNDS FOR THE YEAR ENDED DECEMBER 31, 2018 (Page 1 of 2)
303 PUBLIC WORKS 308 342 IMPROVEMENT RIV ERFRONT CITY FACILITIES PROJECT DEVELOPMENT CONSTRUCTION FUND FUND FUND REV ENUES Intergovernmental revenues $ 1,242,274 $ - $ - Other revenues 110,934 3,903 - Total revenues 1,353,208 3,903 -
EXPENDITURES Current: General government services - - 592,308 Capital outlay 1,453,925 - 912,486 Total expenditures 1,453,925 - 1,504,794
Excess (deficiency) of revenues over (under) expenditures (100,717) 3,903 (1,504,794) OTHER FINANCING SOURCES (USES) Transfers in 300,600 - 1,519,704 Transfers out (12,115) - (95,620) Total other financing sources (uses) 288,485 - 1,424,084 SPECIAL IT EM
Net change in fund balances 187,768 3,903 (80,710)
Fund balances - beginning 1,490,044 247,378 212,255
FUND BA LA NCES - ENDING $ 1,677,812 $ 251,281 $ 131,545
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 109
CITY OF EVERETT FINANCIAL SECTION
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR CAPITAL PROJECTS FUNDS FOR THE YEAR ENDED DECEMBER 31, 2018 (Page 2 of 2)
354 TOTAL PARKS NONM AJOR CIP 3 CAPITAL CONSTRUCT. PROJECT S FUND FUNDS REV ENUES Intergovernmental revenues $ 43,520 $ 1,285,794 Other revenues - 114,837 Total revenues 43,520 1,400,631 EXPENDITURES Current: General government services - 592,308 Capital outlay 1,008,541 3,374,952 Total expenditures 1,008,541 3,967,260
Excess (deficiency) of revenues over (under) expenditures (965,021) (2,566,629) OTHER FINANCING SOURCES (USES) Transfers in 957,822 2,778,126 Transfers out (60,314) (168,049) Total other financing sources (uses) 897,508 2,610,077 SPECIAL IT EM Net change in fund balances (67,513) 43,448
Fund balances - beginning 222,420 2,172,097
FUND BA LA NCES - ENDING $ 154,907 $ 2,215,545
PAGE 110 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT
BUDGET AND ACTUAL
CITY OF EVERETT FINANCIAL SECTION
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET TO ACTUAL FUND 101 – PARKS AND RECREATION FUND FOR THE YEAR ENDED DECEMBER 31, 2018
V ARIANCE WITH FINAL BUDGET ORIGINAL FINAL POSITIVE/ BUDGET BUDGET ACTUAL ( NEGAT IV E) REV ENUES Taxes $ 7,885,167 $ 7,774,568 $ 7,774,568 $ - Charges for services 1,288,400 1,288,400 1,240,107 (48,293) Other revenues 364,790 364,790 429,154 64,364 Total Revenues 9,538,357 9,427,758 9,443,829 16,071 EXPENDITURES Current: Culture and recreation 9,346,630 9,299,862 8,895,154 404,708 Capital outlay 491,727 522,925 42,100 480,825 Debt service: Total Expenditures 9,838,357 9,822,787 8,937,254 885,533 Excess (deficiency) of revenues over (under) expenditures (300,000) (395,029) 506,575 901,604 OTHER FINANCING SOURCES (USES) Transfers out - - (438) (438) Insurance recoveries - - 770 770 Total other financing sources (uses) - - 332 332
Net changes in fund balances (300,000) (395,029) 506,907 901,936
Fund balances - beginning 300,000 395,029 1,946,176 1,551,147 FUND BALANCES - ENDING $ - $ - $ 2,453,083 $ 2,453,083
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 111
CITY OF EVERETT FINANCIAL SECTION
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET TO ACTUAL FUND 110 – LIBRARY FUND FOR THE YEAR ENDED DECEMBER 31, 2018
V ARIANCE WITH FINAL BUDGET ORIGINAL FINAL POSITIVE/ BUDGET BUDGET ACTUAL ( NEGAT IV E) REV ENUES Taxes $ 5,258,407 $ 5,258,407 $ 5,258,407 $ - Charges for services 16,400 16,400 21,170 4,770 Fines and forfeits 49,000 49,000 48,864 (136) Other revenues 29,000 30,020 8,917 (21,103) Total Revenues 5,352,807 5,353,827 5,337,358 (16,469) EXPENDITURES Current: Culture and recreation 4,702,918 4,703,938 4,293,870 410,068 Capital outlay 749,889 749,889 727,977 21,912 Total Expenditures 5,452,807 5,453,827 5,021,847 431,980 Excess (deficiency) of revenues over (under) expenditures (100,000) (100,000) 315,511 415,511 OTHER FINANCING SOURCES (USES) Total other financing sources (uses) - - - -
Net changes in fund balances (100,000) (100,000) 315,511 415,511
Fund balances - beginning 100,000 100,000 723,562 623,562 FUND BALANCES - ENDING $ - $ - $ 1,039,073 $ 1,039,073
PAGE 112 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT
CITY OF EVERETT FINANCIAL SECTION
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET TO ACTUAL FUND 112 – MUNICIPAL ARTS FUND FOR THE YEAR ENDED DECEMBER 31, 2018
V ARIANCE WITH FINAL BUDGET ORIGINAL FINAL POSITIVE/ BUDGET BUDGET ACTUAL ( NEGAT IV E) REV ENUES Taxes $ 823,371 $ 823,371 $ 823,371 $ - Charges for services 64,500 64,500 61,555 (2,945) Other revenues 47,100 47,100 58,196 11,096 Total Revenues 934,971 934,971 943,122 8,151 EXPENDITURES Current: Culture and recreation 979,971 1,217,271 926,327 290,944 Total Expenditures 979,971 1,217,271 926,327 290,944 Excess (deficiency) of revenues over (under) expenditures (45,000) (282,300) 16,795 299,095 OTHER FINANCING SOURCES (USES) Transfers in 49,000 49,000 137,845 88,845 Transfers out (4,000) (4,000) (4,000) - Total other financing sources (uses) 45,000 45,000 133,845 88,845
Net changes in fund balances - (237,300) 150,640 387,940
Fund balances - beginning - 237,300 574,896 337,596 FUND BALANCES - ENDING $ - $ - $ 725,536 $ 725,536
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 113
CITY OF EVERETT FINANCIAL SECTION
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET TO ACTUAL FUND 114 – CONFERENCE CENTER FUND FOR THE YEAR ENDED DECEMBER 31, 2018
V ARIANCE WITH
FINAL BUDGET ORIGINAL FINAL POSITIVE/ BUDGET BUDGET ACTUAL ( NEGAT IV E) REV ENUES Other revenues $ 108,425 $ 108,425 $ 119,884 $ 11,459 Total Revenues 108,425 108,425 119,884 11,459 EXPENDITURES Current: Culture and recreation 67,002 78,002 27,201 50,801 Total Expenditures 67,002 78,002 27,201 50,801 Excess (deficiency) of revenues over (under) expenditures 41,423 30,423 92,683 62,260 OTHER FINANCING SOURCES (USES) Transfers in 896,967 896,967 845,700 (51,267) Transfers out (938,390) (938,390) (938,390) - Total other financing sources (uses) (41,423) (41,423) (92,690) (51,267) Net changes in fund balances - (11,000) (7) 10,993
Fund balances - beginning - 11,000 65,459 54,459 FUND BALANCES - ENDING $ - $ - $ 65,452 $ 65,452
PAGE 114 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT
CITY OF EVERETT FINANCIAL SECTION
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET TO ACTUAL FUND 115 – GENERAL GOVERNMENT SPECIAL PROJECTS FUND FOR THE YEAR ENDED DECEMBER 31, 2018
V ARIANCE WITH FINAL BUDGET ORIGINAL FINAL POSITIVE/ BUDGET BUDGET ACTUAL ( NEGAT IV E) REV ENUES Total Revenues $ - $ - $ - $ -
EXPENDITURES Current: Economic environment - 15,000 - 15,000 Capital outlay - 359,384 - 359,384 Debt service: - Total Expenditures - 374,384 - 374,384
Excess (deficiency) of revenues over (under) expenditures - (374,384) - 374,384 OTHER FINANCING SOURCES (USES) Disposition of capital assets - Transfers in - 109,869 - (109,869) Transfers out - - (149,515) (149,515) Total other financing sources (uses) - 109,869 (149,515) (259,384)
Net changes in fund balances - (264,515) (149,515) 115,000
Fund balances - beginning - 264,515 264,515 - FUND BALANCES - ENDING $ - $ - $ 115,000 $ 115,000
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 115
CITY OF EVERETT FINANCIAL SECTION
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET TO ACTUAL FUND 119 – STREET IMPROVEMENT FUND FOR THE YEAR ENDED DECEMBER 31, 2018
V ARIANCE WITH FINAL BUDGET ORIGINAL FINAL POSITIVE/ BUDGET BUDGET ACTUAL ( NEGAT IV E) REV ENUES Taxes $ 981,682 $ 981,682 $ 981,682 $ - Intergovernmental revenues 809,140 809,140 918,796 109,656 Other revenues 22,000 22,000 20,743 (1,257) Total Revenues 1,812,822 1,812,822 1,921,221 108,399 EXPENDITURES Current: Capital outlay 4,122,822 4,705,251 3,496,102 1,209,149 Debt service: Total Expenditures 4,122,822 4,705,251 3,496,102 1,209,149
Excess (deficiency) of revenues over (under) expenditures (2,310,000) (2,892,429) (1,574,881) 1,317,548 OTHER FINANCING SOURCES (USES) Transfers in 2,300,000 2,300,000 2,299,936 (64) Transfers out - - (250,600) (250,600) Insurance recoveries 10,000 10,000 5,025 (4,975) Total other financing sources (uses) 2,310,000 2,310,000 2,054,361 (255,639)
Net changes in fund balances - (582,429) 479,480 1,061,909
Fund balances - beginning - 582,429 1,014,257 431,828 FUND BALANCES - ENDING $ - $ - $ 1,493,737 $ 1,493,737
PAGE 116 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT
CITY OF EVERETT FINANCIAL SECTION
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET TO ACTUAL FUND 120 – STREETS FUND FOR THE YEAR ENDED DECEMBER 31, 2018
V ARIANCE WITH FINAL BUDGET ORIGINAL FINAL POSITIVE/ BUDGET BUDGET ACTUAL ( NEGAT IV E) REV ENUES Taxes $ 1,403,155 $ 1,403,155 $ 1,403,155 $ - Intergovernmental revenues 1,730,534 1,730,534 1,986,444 255,910 Charges for services - - 2,037 2,037 Other revenues 50,500 50,500 42,531 (7,969) Total Revenues 3,184,189 3,184,189 3,434,167 249,978
EXPENDITURES Current: Transportation 3,284,189 3,284,189 2,959,446 324,743 Total Expenditures 3,284,189 3,284,189 2,959,446 324,743
Excess (deficiency) of revenues over (under) expenditures (100,000) (100,000) 474,721 574,721 OTHER FINANCING SOURCES (USES) Insurance recoveries - - 285 285 Total other financing sources (uses) - - 285 285
Net changes in fund balances (100,000) (100,000) 475,006 575,006
Fund balances - beginning 100,000 100,000 1,793,641 1,693,641 FUND BALANCES - ENDING $ - $ - $ 2,268,647 $ 2,268,647
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 117
CITY OF EVERETT FINANCIAL SECTION
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET TO ACTUAL FUND 126 – MOTOR VEHICLE EQUIPMENT REPLACEMENT FUND FOR THE YEAR ENDED DECEMBER 31, 2018
V ARIANCE WITH FINAL BUDGET ORIGINAL FINAL POSITIVE/ BUDGET BUDGET ACTUAL ( NEGAT IV E) REV ENUES Intergovernmental revenues $ - $ 1,007,944 $ - $ (1,007,944) Other revenues 150,103 150,103 155,785 5,682 Total Revenues 150,103 1,158,047 155,785 (1,002,262)
EXPENDITURES Current: General government services 250,000 250,000 - 250,000 Security of persons and property - - 53 (53) Capital outlay 2,622,741 6,767,060 3,814,764 2,952,296 Total Expenditures 2,872,741 7,017,060 3,814,817 3,202,243
Excess (deficiency) of revenues over (under) expenditures (2,722,638) (5,859,013) (3,659,032) 2,199,981 OTHER FINANCING SOURCES (USES) Disposition of capital assets 40,000 40,000 103,657 63,657 Transfers in 574,724 574,724 1,351,728 777,004 Transfers out (230,893) (230,893) (292,084) (61,191) Total other financing sources (uses) 383,831 383,831 1,163,301 779,470
Net changes in fund balances (2,338,807) (5,475,182) (2,495,731) 2,979,451
Fund balances - beginning 7,282,076 9,701,320 9,748,174 46,854 FUND BALANCES - ENDING $ 4,943,269 $ 4,226,138 $ 7,252,443 $ 3,026,305
PAGE 118 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT
CITY OF EVERETT FINANCIAL SECTION
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET TO ACTUAL FUND 138 – MOTEL TAX FUND FOR THE YEAR ENDED DECEMBER 31, 2018
V ARIANCE WITH FINAL BUDGET ORIGINAL FINAL POSITIVE/ BUDGET BUDGET ACTUAL ( NEGAT IV E) REV ENUES Taxes $ 560,000 $ 560,000 $ 680,906 $ 120,906 Other revenues 8,500 8,500 10,208 1,708 Total Revenues 568,500 568,500 691,114 122,614
EXPENDITURES Current: Culture and recreation 725,000 736,150 583,590 152,560 Total Expenditures 725,000 736,150 583,590 152,560 Excess (deficiency) of revenues over (under) expenditures (156,500) (167,650) 107,524 275,174 OTHER FINANCING SOURCES (USES) Transfers out - - (60,000) (60,000) Total other financing sources (uses) - - (60,000) (60,000)
Net changes in fund balances (156,500) (167,650) 47,524 215,174
Fund balances - beginning 486,390 497,540 590,018 92,478 FUND BALANCES - ENDING $ 329,890 $ 329,890 $ 637,542 $ 307,652
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 119
CITY OF EVERETT FINANCIAL SECTION
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET TO ACTUAL FUND 145 – CUMULATIVE RESERVE REAL PROPERTY ACQUISITION FUND FOR THE YEAR ENDED DECEMBER 31, 2018
V ARIANCE WITH FINAL BUDGET ORIGINAL FINAL POSITIVE/ BUDGET BUDGET ACTUAL ( NEGAT IV E) REV ENUES Other revenues $ 24,300 $ 24,300 $ 102,886 $ 78,586 Total Revenues 24,300 24,300 102,886 78,586
EXPENDITURES Current: General government services 148,500 148,500 163,382 (14,882) Capital outlay 1,765,316 1,765,316 - 1,765,316 Debt service: - Interest - - Total Expenditures 1,913,816 1,913,816 163,382 1,750,434
Excess (deficiency) of revenues over (under) expenditures (1,889,516) (1,889,516) (60,496) 1,829,020 OTHER FINANCING SOURCES (USES) Disposition of capital assets 200 200 18,018 17,818 Total other financing sources (uses) 200 200 18,018 17,818
SPECIAL IT EM
Net changes in fund balances (1,889,316) (1,889,316) (42,478) 1,846,838
Fund balances - beginning 1,889,316 1,889,316 1,883,294 (6,022) FUND BALANCES - ENDING $ - $ - $ 1,840,816 $ 1,840,816
PAGE 120 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT
CITY OF EVERETT FINANCIAL SECTION
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET TO ACTUAL FUND 146 – PROPERTY MANAGEMENT FUND FOR THE YEAR ENDED DECEMBER 31, 2018
V ARIANCE WITH FINAL BUDGET ORIGINAL FINAL POSITIVE/ BUDGET BUDGET ACTUAL ( NEGAT IV E)
REV ENUES Other revenues $ 653,900 $ 653,900 $ 649,302 $ (4,598) Total Revenues 653,900 653,900 649,302 (4,598)
EXPENDITURES Current: General government services 1,424,323 1,424,323 2,011,009 (586,686) Capital outlay 927,500 927,500 107,077 820,423 Total Expenditures 2,351,823 2,351,823 2,118,086 233,737
Excess (deficiency) of revenues over (under) expenditures (1,697,923) (1,697,923) (1,468,784) 229,139 OTHER FINANCING SOURCES (USES) Transfers in 1,022,452 1,022,452 1,522,460 500,008 Total other financing sources (uses) 1,022,452 1,022,452 1,522,460 500,008
Net changes in fund balances (675,471) (675,471) 53,676 729,147
Fund balances - beginning 1,261,370 1,261,370 1,369,644 108,274 FUND BALANCES - ENDING $ 585,899 $ 585,899 $ 1,423,320 $ 837,421
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 121
CITY OF EVERETT FINANCIAL SECTION
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET TO ACTUAL FUND 148 – CUMULATIVE RESERVE PARKS FUND FOR THE YEAR ENDED DECEMBER 31, 2018
V ARIANCE WITH FINAL BUDGET ORIGINAL FINAL POSITIVE/ BUDGET BUDGET ACTUAL ( NEGAT IV E) REV ENUES Charges for services $ - $ - $ 13,441 $ 13,441 Other revenues 444,112 444,112 446,925 2,813 Total Revenues 444,112 444,112 460,366 16,254
EXPENDITURES Current: Economic environment - - 37,135 (37,135) Culture and recreation 26,856 26,856 12,962 13,894 Capital outlay 575,571 875,571 555,690 319,881 Total Expenditures 602,427 902,427 605,787 296,640
Excess (deficiency) of revenues over (under) expenditures (158,315) (458,315) (145,421) 312,894 OTHER FINANCING SOURCES (USES) Total other financing sources (uses) - - - -
Net changes in fund balances (158,315) (458,315) (145,421) 312,894
Fund balances - beginning 2,755,275 2,755,275 2,667,683 (87,592) FUND BALANCES - ENDING $ 2,596,960 $ 2,296,960 $ 2,522,262 $ 225,302
PAGE 122 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT
CITY OF EVERETT FINANCIAL SECTION
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET TO ACTUAL FUND 149 – SENIOR CENTER RESERVE FUND FOR THE YEAR ENDED DECEMBER 31, 2018
V ARIANCE WITH FINAL BUDGET ORIGINAL FINAL POSITIVE/ BUDGET BUDGET ACTUAL ( NEGAT IV E)
REV ENUES Charges for services $ 65,750 $ 65,750 $ 74,557 $ 8,807 Other revenues 29,400 29,400 27,382 (2,018) Total Revenues 95,150 95,150 101,939 6,789
EXPENDITURES Current: Mental and Physical Health 94,582 94,582 84,581 10,001
Capital outlay - 14,500 - 14,500
Total Expenditures 94,582 109,082 84,581 24,501 Excess (deficiency) of revenues over (under) expenditures 568 (13,932) 17,358 31,290 OTHER FINANCING SOURCES (USES) Total other financing sources (uses) - - - -
Net changes in fund balances 568 (13,932) 17,358 31,290
Fund balances - beginning 478,138 478,138 480,553 2,415 FUND BALANCES - ENDING $ 478,706 $ 464,206 $ 497,911 $ 33,705
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 123
CITY OF EVERETT FINANCIAL SECTION
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET TO ACTUAL FUND 151 – ANIMALS FUND FOR THE YEAR ENDED DECEMBER 31, 2018
V ARIANCE WITH FINAL BUDGET ORIGINAL FINAL POSITIVE/ BUDGET BUDGET ACTUAL ( NEGAT IV E) REV ENUES Charges for services $ 7,000 $ 7,000 $ 7,140 $ 140 Other revenues 66,500 135,670 132,470 (3,200) Total Revenues 73,500 142,670 139,610 (3,060)
EXPENDITURES Current: Economic environment 100,800 182,970 128,165 54,805 Total Expenditures 100,800 182,970 128,165 54,805
Excess (deficiency) of revenues over (under) expenditures (27,300) (40,300) 11,445 51,745 OTHER FINANCING SOURCES (USES) Total other financing sources (uses) - - - -
Net changes in fund balances (27,300) (40,300) 11,445 51,745
Fund balances - beginning 383,779 383,779 395,968 12,189 FUND BALANCES - ENDING $ 356,479 $ 343,479 $ 407,413 $ 63,934
PAGE 124 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT
CITY OF EVERETT FINANCIAL SECTION
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET TO ACTUAL FUND 152 – CUMULATIVE RESERVE LIBRARY FUND FOR THE YEAR ENDED DECEMBER 31, 2018
V ARIANCE WITH FINAL BUDGET ORIGINAL FINAL POSITIVE/ BUDGET BUDGET ACTUAL ( NEGAT IV E) REV ENUES Charges for services $ 3,500 $ 3,500 $ 3,159 $ (341) Other revenues 81,741 81,741 93,281 11,540 Total Revenues 85,241 85,241 96,440 11,199
EXPENDITURES Current: Culture and recreation 71,000 71,000 27,214 43,786 Capital outlay 70,000 70,000 13,108 56,892 Total Expenditures 141,000 141,000 40,322 100,678 Excess (deficiency) of revenues over (under) expenditures (55,759) (55,759) 56,118 111,877 OTHER FINANCING SOURCES (USES) Total other financing sources (uses) - - - -
Net changes in fund balances (55,759) (55,759) 56,118 111,877
Fund balances - beginning 317,165 317,165 328,996 11,831 FUND BALANCES - ENDING $ 261,406 $ 261,406 $ 385,114 $ 123,708
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 125
CITY OF EVERETT FINANCIAL SECTION
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET TO ACTUAL FUND 153 – EMERGENCY MEDICAL SERVICES FUND FOR THE YEAR ENDED DECEMBER 31, 2018
V ARIANCE WITH FINAL BUDGET ORIGINAL FINAL POSITIVE/ BUDGET BUDGET ACTUAL ( NEGAT IV E) REV ENUES Taxes $ 6,744,600 $ 6,744,600 $ 6,698,149 $ (46,451) Intergovernmental revenues 192,844 192,844 177,678 (15,166) Charges for services 1,439,725 1,439,725 1,644,171 204,446 Other revenues 6,000 6,000 66,693 60,693 Total Revenues 8,383,169 8,383,169 8,586,691 203,522
EXPENDITURES Current: General government services 156,857 - - - Security of persons and property 8,553,514 9,570,188 9,541,688 28,500 Capital outlay 221,625 272,940 248,778 24,162 Other debt service costs 1,948 1,948 14,945 (12,997) Total Expenditures 8,933,944 9,845,076 9,805,411 39,665
Excess (deficiency) of revenues over (under) expenditures (550,775) (1,461,907) (1,218,720) 243,187 OTHER FINANCING SOURCES (USES) Disposition of capital assets - - 6,000 6,000 Advances to other funds - Total other financing sources (uses) - - 6,000 6,000
Net changes in fund balances (550,775) (1,461,907) (1,212,720) 249,187
Fund balances - beginning 540,155 741,162 1,369,315 628,153 FUND BALANCES - ENDING $ (10,620) $ (720,745) $ 156,595 $ 877,340
PAGE 126 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT
CITY OF EVERETT FINANCIAL SECTION
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET TO ACTUAL FUND 156 – CRIMINAL JUSTICE FUND FOR THE YEAR ENDED DECEMBER 31, 2018
V ARIANCE WITH FINAL BUDGET ORIGINAL FINAL POSITIVE/ BUDGET BUDGET ACTUAL ( NEGAT IV E) REV ENUES Taxes $ 1,875,000 $ 1,875,000 $ 2,402,748 $ 527,748 Intergovernmental revenues 694,587 953,940 1,065,999 112,059 Charges for services 202,400 202,400 185,077 (17,323) Fines and forfeits 5,000 5,000 4,469 (531) Other revenues 154,610 154,610 181,027 26,417 Total Revenues 2,931,597 3,190,950 3,839,320 648,370
EXPENDITURES Current: General government services 470,922 116,347 58,527 57,820 Security of persons and property 5,142,006 3,483,310 338,192 3,145,118 Capital outlay 257,200 593,106 337,973 255,133 Total Expenditures 5,870,128 4,192,763 734,692 3,458,071
Excess (deficiency) of revenues over (under) expenditures (2,938,531) (1,001,813) 3,104,628 4,106,441 OTHER FINANCING SOURCES (USES) Transfers in 43,250 127,227 44,011 (83,216) Transfers out (267,250) (2,299,525) (2,331,194) (31,669) Total other financing sources (uses) (224,000) (2,172,298) (2,287,183) (114,885)
Net changes in fund balances (3,162,531) (3,174,111) 817,445 3,991,556
Fund balances - beginning 8,825,285 8,836,865 9,256,702 419,837 FUND BALANCES - ENDING $ 5,662,754 $ 5,662,754 $ 10,074,147 $ 4,411,393
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 127
CITY OF EVERETT FINANCIAL SECTION
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET TO ACTUAL FUND 157 – TRAFFIC MITIGATION FUND FOR THE YEAR ENDED DECEMBER 31, 2018
V ARIANCE WITH FINAL BUDGET ORIGINAL FINAL POSITIVE/ BUDGET BUDGET ACTUAL ( NEGAT IV E) REV ENUES Charges for services $ 857,000 $ 857,000 $ 1,493,779 $ 636,779 Other revenues 51,765 51,765 83,745 31,980 Total Revenues 908,765 908,765 1,577,524 668,759
EXPENDITURES Current: Capital outlay 908,025 908,025 - 908,025 Total Expenditures 908,025 908,025 - 908,025
Excess (deficiency) of revenues over (under) expenditures 740 740 1,577,524 1,576,784 OTHER FINANCING SOURCES (USES) Transfers out (3,750,000) (3,750,000) - 3,750,000 Total other financing sources (uses) (3,750,000) (3,750,000) - 3,750,000
Net changes in fund balances (3,749,260) (3,749,260) 1,577,524 5,326,784
Fund balances - beginning 3,749,260 3,749,260 5,576,193 1,826,933 FUND BALANCES - ENDING $ - $ - $ 7,153,717 $ 7,153,717
PAGE 128 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT
CITY OF EVERETT FINANCIAL SECTION
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET TO ACTUAL FUND 159 – TRANSPORTION BENEFIT DISTRICT FUND FOR THE YEAR ENDED DECEMBER 31, 2018
V ARIANCE WITH FINAL BUDGET ORIGINAL FINAL POSITIVE/ BUDGET BUDGET ACTUAL ( NEGAT IV E) REV ENUES Taxes $ 1,450,000 $ 1,450,000 $ 1,767,543 $ 317,543 Other revenues 10,000 10,000 20,485 10,485 Total Revenues 1,460,000 1,460,000 1,788,028 328,028
EXPENDITURES Current: Capital outlay - - 64 (64) Total Expenditures - - 64 (64) Excess (deficiency) of revenues over (under) expenditures 1,460,000 1,460,000 1,787,964 327,964 OTHER FINANCING SOURCES (USES) Transfers out (2,000,000) (2,000,000) (1,999,936) 64 Total other financing sources (uses) (2,000,000) (2,000,000) (1,999,936) 64
Net changes in fund balances (540,000) (540,000) (211,972) 328,028
Fund balances - beginning 962,856 962,856 1,020,525 57,669 FUND BALANCES - ENDING $ 422,856 $ 422,856 $ 808,553 $ 385,697
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 129
CITY OF EVERETT FINANCIAL SECTION
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET TO ACTUAL FUND 160 – CONTINGENCY RESERVE FUND FOR THE YEAR ENDED DECEMBER 31, 2018
V ARIANCE WITH FINAL BUDGET ORIGINAL FINAL POSITIVE/ BUDGET BUDGET ACTUAL ( NEGAT IV E)
REV ENUES Other revenues $ - $ - $ - $ -
Total Revenues - - - -
EXPENDITURES Current: Total Expenditures - - - - Excess (deficiency) of revenues over (under) expenditures - - - - OTHER FINANCING SOURCES (USES) Transfers in 135,000 135,000 135,000 - Total other financing sources (uses) 135,000 135,000 135,000 -
Net changes in fund balances 135,000 135,000 135,000 -
Fund balances - beginning 4,373,945 4,373,945 4,373,945 - FUND BALANCES - ENDING $ 4,508,945 $ 4,508,945 $ 4,508,945 `
PAGE 130 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT
CITY OF EVERETT FINANCIAL SECTION
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET TO ACTUAL FUND 170 – EVERETT CDE LLC FOR THE YEAR ENDED DECEMBER 31, 2018
V ARIANCE WITH FINAL BUDGET ORIGINAL FINAL POSITIVE/ BUDGET BUDGET ACTUAL ( NEGAT IV E)
REV ENUES Other revenues $ - $ - $ 56,664 $ 56,664 Total Revenues - - 56,664 56,664
EXPENDITURES Current: General government services - - 11,215 (11,215)
Total Expenditures - - 11,215 (11,215) Excess (deficiency) of revenues over (under) expenditures - - 45,449 45,449
Net changes in fund balances - - 45,449 45,449
Fund balances - beginning - - 98,674 98,674
FUND BALANCES - ENDING $ - $ - $ 144,123 $ 144,123
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 131
CITY OF EVERETT FINANCIAL SECTION
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET TO ACTUAL FUND 197 – CHIP LOAN PROGRAM FUND FOR THE YEAR ENDED DECEMBER 31, 2018
V ARIANCE WITH FINAL BUDGET ORIGINAL FINAL POSITIVE/ BUDGET BUDGET ACTUAL ( NEGAT IV E) REV ENUES Intergovernmental revenues $ 1,851,349 $ 1,851,349 $ 1,420,343 $ (431,006) Other revenues 121,110 121,110 164,499 43,389 Total Revenues 1,972,459 1,972,459 1,584,842 (387,617)
EXPENDITURES Current: Economic environment 1,903,231 1,903,231 816,662 1,086,569 Total Expenditures 1,903,231 1,903,231 816,662 1,086,569
Excess (deficiency) of revenues over (under) expenditures 69,228 69,228 768,180 698,952 OTHER FINANCING SOURCES (USES) Total other financing sources (uses) - - - -
Net changes in fund balances 69,228 69,228 768,180 698,952
Fund balances - beginning 14,379,661 14,379,661 13,584,334 (795,327) FUND BALANCES - ENDING $ 14,448,889 $ 14,448,889 $ 14,352,514 $ (96,375)
PAGE 132 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT
CITY OF EVERETT FINANCIAL SECTION
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET TO ACTUAL FUND 198 – COMMUNITY DEVELOPMENT BLOCK GRANTS FUND FOR THE YEAR ENDED DECEMBER 31, 2018
V ARIANCE WITH FINAL BUDGET ORIGINAL FINAL POSITIVE/ BUDGET BUDGET ACTUAL ( NEGAT IV E) REV ENUES Intergovernmental revenues $ 629,867 $ 629,867 $ 498,124 $ (131,743) Other revenues - - 1,303 1,303 Total Revenues 629,867 629,867 499,427 (130,440)
EXPENDITURES Current: Economic environment 629,867 629,867 498,124 131,743 Total Expenditures 629,867 629,867 498,124 131,743
Excess (deficiency) of revenues over (under) expenditures - - 1,303 1,303 OTHER FINANCING SOURCES (USES) Total other financing sources (uses) - - - -
Net changes in fund balances - - 1,303 1,303
Fund balances - beginning 714,830 714,830 724,035 9,205 FUND BALANCES - ENDING $ 714,830 $ 714,830 $ 725,338 $ 10,508
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 133
CITY OF EVERETT FINANCIAL SECTION
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET TO ACTUAL FUND 210 – BOND REDEMPTION FUND FOR THE YEAR ENDED DECEMBER 31, 2018
V ARIANCE WITH FINAL BUDGET ORIGINAL FINAL POSITIVE/ BUDGET BUDGET ACTUAL ( NEGAT IV E) REV ENUES Taxes $ - $ - $ - $ - Total Revenues - - - -
EXPENDITURES Debt Service: Principal retirement 2,240,000 2,240,000 6,765,000 (4,525,000) Interest 881,449 881,449 895,774 (14,325) Total Expenditures 3,121,449 3,121,449 7,660,774 (4,539,325)
Excess (deficiency) of revenues over (under) expenditures (3,121,449) (3,121,449) (7,660,774) (4,539,325) OTHER FINANCING SOURCES (USES) Transfers in 3,121,449 3,121,449 7,660,774 4,539,325 Total other financing sources (uses) 3,121,449 3,121,449 7,660,774 4,539,325
Net change in fund balances - - - -
Fund Balances - beginning - - - - FUND BALANCES - ENDING $ - $ - $ - $ -
PAGE 134 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT
CITY OF EVERETT FINANCIAL SECTION
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET TO ACTUAL FUND 243 – L.I.D. GUARANTY FUND FOR THE YEAR ENDED DECEMBER 31, 2018
V ARIANCE WITH FINAL BUDGET ORIGINAL FINAL POSITIVE/ BUDGET BUDGET ACTUAL (NEGATIVE) REV ENUES Other Revenues $ - $ - $ 285 $ 285 Total Revenues - - 285 285
EXPENDITURES Current: Total Expenditures - - - -
Excess (deficiency) of revenues over (under) expenditures - - 285 285 OTHER FINANCING SOURCES (USES) Transfers in 9,358 9,358 9,358 - Transfers out (9,358) (9,358) (9,358) - Total other financing sources (uses) - - - -
Net change in fund balances - - 285 285
Fund Balances - beginning - - 2,692 2,692 FUND BALANCES - ENDING $ - $ - $ 2,977 $ 2,977
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 135
CITY OF EVERETT FINANCIAL SECTION
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET TO ACTUAL FUND 299 – CONSOLIDATED L.I.D. BOND REDEMPTION FUND FOR THE YEAR ENDED DECEMBER 31, 2018
V ARIANCE WITH FINAL BUDGET ORIGINAL FINAL POSITIVE/ BUDGET BUDGET ACTUAL ( NEGAT IV E) REV ENUES Other revenues $ - $ - $ 16,413 $ 16,413 T OT AL REV ENUES - - 16,413 16,413 EXPENDITURES Current: Debt service: TOTAL EXPENDITURES - - - - Excess (deficiency) of revenues over (under) expenditures - - 16,413 16,413 OTHER FINANCING SOURCES (USES) Transfers out (9,358) (9,358) (9,358) - Total other financing sources (uses) (9,358) (9,358) (9,358) - Net change in fund balances (9,358) (9,358) 7,055 16,413 - - Fund Balances - beginning 9,358 9,358 18,287 8,929 FUND BALANCES - ENDING $ - $ - $ 25,342 $ 25,342
PAGE 136 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT
PROPRIETARY FUNDS
ENTERPRISE FUNDS
402 The Solid Waste Utility Fund accounts for activities related to garbage and solid waste management, including recycling and excluding direct engagement in routine collection.
430 The Parking Garage Fund accounts for off-street parking facilities to support the central business district and the relief of traffic congestion.
440 The Golf Fund accounts for the operation and maintenance, and capital improvements of two city-owned golf courses.
CITY OF EVERETT FINANCIAL SECTION
COMBINING STATEMENT OF NET POSITION NONMAJOR ENTERPRISE FUNDS DECEMBER 31, 2018
402 430 440 TOTAL SOLID PARKING GOLF NONM AJOR WASTE GARAGE FUND ENTERPRISE FUND FUND FUNDS CURRENT A SSETS Cash and cash equivalents $ 46,320 $ 107,573 $ 228,147 $ 382,040 Investments 952,910 2,980,543 731,519 4,664,972 Bond covenant accounts: - Restricted cash and cash equivalents 86,875 - - 86,875 Receivables, net - Customer accounts 188,429 - 6,000 194,429 Interest 3,798 10,304 1,893 15,995 Due from other governments 10,201 - - 10,201 Inventory - - 135,948 135,948 Total Current Assets 1,288,533 3,098,420 1,103,507 5,490,460 NONCURRENT A SSETS Land - 756,141 203,481 959,622 Capital assets, net of depreciation (Note 6) 13,189,032 75,020 1,547,539 14,811,591 Total Noncurrent Assets 13,189,032 831,161 1,751,020 15,771,213 TOTAL ASSETS 14,477,565 3,929,581 2,854,527 21,261,673 DEFERRED OUTFLOWS OF RESOURCES Resources related to pensions - - 49,848 49,848 TOTA L DEFFERED OUTFLOWS OF RESOURCES - - 49,848 49,848 COM BINED ASSETS AND DEFERRED OUTFLOW OF RESOURCES $ 14,477,565 $ 3,929,581 $ 2,904,375 $ 21,311,521 LIABILITIES CURRENT LIA BILITIES Wages and benefits payable $ 2,298 $ - $ 48,832 $ 51,130 Accounts payable 4,295 17,771 159,545 181,611 Interest payable 3,542 - - 3,542 Taxes payable - - 9,626 9,626 Interfund loans payable 838,700 - - 838,700 Unearned revenue - - 240,457 240,457 Current portion of long-term debt 1,002,851 - - 1,002,851 Total Current Liabilities 1,851,686 17,771 458,460 2,327,917 NONCURRENT LIA BILITIES Advances from other funds - - 6,344,168 6,344,168 Net pension liability - - 116,875 116,875 Other long-term liabilities - - 335,864 335,864 Total Noncurrent Liabilities - - 6,796,907 6,796,907 TOTA L LIA BILITIES 1,851,686 17,771 7,255,367 9,124,824 DEFERRED INFLOWS OF RESOURCES Resources related to pensions 191 - 140,442 140,633 TOTA L DEFERRED INFLOWS OF RESOURCES 191 - 140,442 140,633 COM BINED LIABILITIES AND DEFERRED INFLOW OF RESOURCES $ 1,851,877 $ 17,771 $ 7,395,809 $ 9,265,457 NET POSITION Net Investment in Capital Assets 12,186,181 831,161 1,445,199 14,462,541 Restricted for debt service 86,875 - - 86,875 Unrestricted 352,632 3,080,649 (5,936,633) (2,503,352) TOTAL NET POSITION $ 12,625,688 $ 3,911,810 $ (4,491,434) $ 12,046,064
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 137
CITY OF EVERETT FINANCIAL SECTION
COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION NONMAJOR ENTERPRISE FUNDS FOR THE YEAR ENDED DECEMBER 31, 2018
402 430 440 TOTAL SOLID PARKING GOLF NONM AJOR WASTE GARAGE FUND ENTERPRISE FUND FUND FUNDS OPERATING REV ENUES: Admission taxes $ - $ - $ 80,683 $ 80,683 Charges for services 2,382,840 391,440 4,300,104 7,074,384 Total Operating Revenues 2,382,840 391,440 4,380,787 7,155,067 OPERATING EXPENSES: Personnel services 79,262 - 1,036,363 1,115,625 Supplies 3,537 966 552,989 557,492 Professional services 83,650 260,783 1,534,485 1,878,918 Depreciation and amortization 277,176 12,503 536,489 826,168 Other operating expenses 82,869 37,627 498,013 618,509 Total Operating Expenses 526,494 311,879 4,158,339 4,996,712
Operating Income (Loss) 1,856,346 79,561 222,448 2,158,355 NON-OPERATING REV ENUES (EXPENSES): Intergovernmental revenues 44,865 - - 44,865 Interest and investment revenue 37,062 46,371 2,657 86,090 Other non-operating revenues 141 24 2,593 2,758 Gain (loss) on sale/retirement of assets - - 1,580 1,580 Interest expense (109,043) - (122,785) (231,828) Total Non-Operating Revenues (Expenses) (26,975) 46,395 (115,955) (96,535)
Income (Loss) Before Contributions and Transfers 1,829,371 125,956 106,493 2,061,820 CHA NGE IN NET POSITION 1,829,371 125,956 106,493 2,061,820
NET POSITION - BEGINNING 10,796,317 3,785,854 (4,597,927) 9,984,244 NET POSITION - ENDING $ 12,625,688 $ 3,911,810 $ (4,491,434) $ 12,046,064
PAGE 138 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT
CITY OF EVERETT FINANCIAL SECTION
COMBINING STATEMENT OF CASH FLOWS NONMAJOR ENTERPRISE FUNDS FOR THE YEAR ENDED DECEMBER 31, 2018
TOTAL 402 430 440 NONM AJOR SOLID WASTE PARKING GOLF ENTERPRISE FUND GARAGE FUND FUND FUNDS CASH FLOWS FROM OPERATING ACTIVITIES: Receipts from customers and users $ 2,461,611 $ 391,440 $ 4,406,962 $ 7,260,013 Receipts from interfund services provided 64 - - 64 Payments to suppliers (176,792) (265,240) (2,381,998) (2,824,030) Payments to employees (79,693) - (1,097,818) (1,177,511) Payments for interfund services used (9,108) (20,592) (132,885) (162,585) Other reciepts 141 24 2,593 2,758 NET CASH PROV IDED BY OPERATING ACTIV ITIES 2,196,223 105,632 796,854 3,098,709
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Receipts from non-capital grants 82,118 - - 82,118 Principal paid on interfund loans (1,100,000) - (205,000) (1,305,000) Interest paid on interfund loans (31,888) - (122,785) (154,673) NET CASH PROV IDED (USED) BY NONCAPITAL FINANCING ACTIV ITIES (1,049,770) - (327,785) (1,377,555)
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Principal paid on capital debt (1,000,000) - - (1,000,000) Interest paid on capital debt (82,500) - - (82,500) Proceeds from sale of capital assets - - 1,580 1,580 Acquisition and construction of capital assets (385,373) - - (385,373) NET CASH PROV IDED (USED) BY CAPITAL FINANCING ACTIV ITIES (1,467,873) - 1,580 (1,466,293) CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from sale of investments 400,762 - - 400,762 Purchase of investments - (84,700) (257,446) (342,146) Investment income 33,923 43,901 7,884 85,708 NET CASH PROV IDED (USED) BY INV ESTING ACTIV ITIES 434,685 (40,799) (249,562) 144,324 Net Increase (Decrease) in Cash and Cash Equivalents 113,265 64,833 221,087 399,185 Cash and Cash Equivalents, January 1 19,930 42,740 7,060 69,730 CASH AND CASH EQUIV ALENTS, DECEM BER 31 $ 133,195 $ 107,573 $ 228,147 $ 468,915
Current Cash and Cash Equivalents $ 46,320 $ 107,573 $ 228,147 $ 382,040 Restricted Cash and Cash Equivalents 86,875 - - 86,875 CASH AND CASH EQUIV ALENTS, DECEM BER 31 $ 133,195 $ 107,573 $ 228,147 $ 468,915
RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROV IDED (USED) BY OPERATING ACTIV ITIES: Operating income (loss) $ 1,856,346 $ 79,561 $ 222,448 $ 2,158,355 Adjustments to Reconcile Operating Income to Net Cash Provided (Used) by Operating Activities: Depreciation and amortization 277,176 12,503 536,489 826,168 Other non-operating receipts 141 24 2,593 2,758 GASB 68 pension expense adjustments (480) - (66,023) (66,503) Change in Assets and Liabilities: (Increase) decrease in inventories - - (17,396) (17,396) (Increase) decrease in receivables 78,835 - 16,577 95,412 Increase (decrease) in accounts and other payables (15,795) 13,544 90,378 88,127 Increase (decrease) in compensated absences - - 2,190 2,190 Increase (decrease) in other current liabilities - - 9,598 9,598 TOTAL ADJUSTMENTS 339,877 26,071 574,406 940,354 NET CASH PROV IDED BY OPERATING ACTIV ITIES $ 2,196,223 $ 105,632 $ 796,854 $ 3,098,709
SCHEDULE OF NON-CASH CAPITAL AND RELATED FINANCING ACTIVITIES: Increase (decrease) in fair value of investments $ 662 $ (5,623) $ (5,227) $ (10,188) Operating grants earned, not received 10,201 - - 10,201 TOTA L NON-CA SH A CTIV ITIES $ 10,863 $ (5,623) $ (5,227) $ 13
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 139
CITY OF EVERETT FINANCIAL SECTION
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PAGE 140 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT
INTERNAL SERVICE FUNDS
501 The Equipment Rental Fund accounts for the costs of operating a maintenance facility for automotive equipment and other machinery used by City departments. Such costs are billed to the other departments at actual cost.
503 The Self-Insurance Fund receives monies from various City funds to pay all costs of self-insurance for workers' compensation, unemployment compensation, liabilities arising out of torts and the operation of the George Culmback Dam.
505 The Computer Reserve Fund receives monies from City departments to pay for computer equipment and related maintenance.
507 The Telecommunications Fund accounts for the cost of operating a centralized telecommunication service for all City departments.
508 The Health Benefits Reserve Fund accounts for the activity and reserve associated with the provision of health benefits to employees of the City.
CITY OF EVERETT FINANCIAL SECTION
COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS DECEMBER 31, 2018 (PAGE 1 OF 2)
501 503 505 EQUIPM ENT SEL F- COM PUT ER RENTAL INSURANCE RESERV E FUND FUND FUND CURRENT A SSETS Cash and cash equivalents $ 282,126 $ 675,392 $ 262,558 Investments 1,807,126 11,824,686 2,218,177 Receivables, net Customer accounts - - - Interest 526 46,547 4,517 Due from other governments 307 - - Prepayments - 95,716 - Inventory 449,630 - 96,016 Total Current Assets 2,539,715 12,642,341 2,581,268 NONCURRENT A SSETS Capital assets, net of depreciation (Note 6) 437,512 - 795,366 Total Noncurrent Assets 437,512 - 795,366 TOTAL ASSETS 2,977,227 12,642,341 3,376,634 DEFERRED OUTFLOWS OF RESOURCES Resources related to pensions 210,990 - - TOTA L DEFFERED OUTFLOWS OF RESOURCES 210,990 - - COM BINED ASSETS AND DEFERRED OUTFLOW OF RESOURCES $ 3,188,217 $ 12,642,341 $ 3,376,634 LIABILITIES CURRENT LIA BILITIES Wages and benefits payable 129,677 $ - $ - Accounts payable 319,008 248,865 89,509 Claims and judgments payable - 3,535,411 - Taxes payable 418 - 230 Other current liabilities - - - Total Current Liabilities 449,103 3,784,276 89,739 NONCURRENT LIA BILITIES Claims and judgments payable - 5,006,701 - Net pension liability 1,509,478 - - Other long-term liabilities 116,803 - - Total Noncurrent Liabilities 1,626,281 5,006,701 - TOTA L LIA BILITIES 2,075,384 8,790,977 89,739 DEFERRED INFLOWS OF RESOURCES Pension 360,926 - - TOTA L DEFFERED INFLOWS OF RESOURCES 360,926 - - COM BINED LIABILITIES AND DEFERRED INFLOW OF RESOURCES $ 2,436,310 $ 8,790,977 $ 89,739 NET POSITION Net Investment in Capital Assets $ 437,512 $ - $ 795,366 Unrestricted $ 314,395 3,851,364 2,491,529 TOTAL NET POSITION $ 751,907 $ 3,851,364 $ 3,286,895
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 141
CITY OF EVERETT FINANCIAL SECTION
COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS DECEMBER 31, 2018 (PAGE 2 OF 2)
507 508 TOTAL T EL E- HEALTH BENEFIT INTERNAL COMM RESERV E SERV ICE FUND FUND FUNDS CURRENT A SSETS Cash and cash equivalents $ 26,074 $ 241,088 $ 1,487,238 Investments 722,364 6,679,106 23,251,459 Receivables, net Customer accounts - 523,771 523,771 Interest - 22,539 74,129 Due from other governments - - 307 Prepayments - - 95,716 Inventory - - 545,646 Total Current Assets 748,438 7,466,504 25,978,266 NONCURRENT A SSETS Capital assets, net of depreciation (Note 6) 107,118 - 1,339,996 Total Noncurrent Assets 107,118 - 1,339,996 TOTAL ASSETS 855,556 7,466,504 27,318,262 DEFERRED OUTFLOWS OF RESOURCES Resources related to pensions 147,251 - 358,241 TOTA L DEFFERED OUTFLOWS OF RESOURCES 147,251 - 358,241 COM BINED ASSETS AND DEFERRED OUTFLOW OF RESOURCES $ 1,002,807 $ 7,466,504 $ 27,676,503
LIABILITIES
CURRENT LIA BILITIES Wages and benefits payable $ 36,043 $ - $ 165,720 Accounts payable 39,154 - 696,536 Claims and judgments payable - 3,196,635 6,732,046 Taxes payable - - 648 Other current liabilities - 186,426 186,426
Total Current Liabilities 75,197 3,383,061 7,781,376 NONCURRENT LIA BILITIES Claims and judgments payable - - 5,006,701 Net pension liability 1,666,579 - 3,176,057 Other long-term liabilities 41,100 - 157,903
Total Noncurrent Liabilities 1,707,679 - 8,340,661 TOTA L LIA BILITIES 1,782,876 3,383,061 16,122,037 DEFERRED INFLOWS OF RESOURCES Pension 110,013 - 470,939 TOTA L DEFFERED INFLOWS OF RESOURCES 110,013 - 470,939 COM BINED LIABILITIES AND DEFERRED INFLOW OF RESOURCES $ 1,892,889 $ 3,383,061 $ 16,592,976 NET POSITION Net Investment in Capital Assets $ 107,118 $ - $ 1,339,996 Unrestricted (997,200) 4,083,443 9,743,531 TOTAL NET POSITION $ (890,082) $ 4,083,443 $ 11,083,527
PAGE 142 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT
CITY OF EVERETT FINANCIAL SECTION
COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION INTERNAL SERVICE FUNDS FOR THE YEAR ENDED DECEMBER 31, 2018 (PAGE 1 OF 2)
501 503 505 EQUIPM ENT SEL F- COM PUT ER RENTAL INSURANCE RESERV E FUND FUND FUND OPERATING REV ENUES: Charges for services $ 7,909,711 $ 5,185,431 $ 2,625,493 Total Operating Revenues 7,909,711 5,185,431 2,625,493
OPERATING EXPENSES: Personnel services 2,491,914 155,068 - Supplies 4,294,197 - 548,863 Professional services 210,581 1,705,746 130,553 Depreciation and amortization 51,383 - 329,831 Other operating expenses 705,632 4,819,592 2,046,477 Total Operating Expenses 7,753,707 6,680,406 3,055,724 Operating Income (Loss) 156,004 (1,494,975) (430,231) NON-OPERATING REV ENUES (EXPENSES): Interest and investment revenue 16,963 209,421 43,366 Other non-operating revenues 14,011 - - Gain (loss) on sale/retirement of assets (26,721) - 22,264 Other non-operating expenses - - - Total Non-Operating Revenues (Expenses) 4,253 209,421 65,630 Income (Loss) Before Contributions and Transfers 160,257 (1,285,554) (364,601) Transfers in 248,083 - - Transfers out - - -
CHA NGE IN NET POSITION 408,340 (1,285,554) (364,601)
NET POSITION - BEGINNING 343,567 5,136,918 3,651,496 NET POSITION - ENDING $ 751,907 $ 3,851,364 $ 3,286,895
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 143
CITY OF EVERETT FINANCIAL SECTION
COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION INTERNAL SERVICE FUNDS FOR THE YEAR ENDED DECEMBER 31, 2018 (PAGE 2 OF 2)
507 508 TOTAL T EL E- HEALTH BENEFIT INTERNAL COMM RESERV E SERV ICE FUND FUND FUNDS OPERATING REV ENUES: Charges for services $ 1,338,756 $ 17,581,705 $ 34,641,096 Total Operating Revenues 1,338,756 17,581,705 34,641,096
OPERATING EXPENSES: Personnel services 816,947 - 3,463,929 Supplies 46,987 - 4,890,047 Professional services 36,396 19,445,654 21,528,930 Depreciation and amortization 39,936 - 421,150 Other operating expenses 609,687 151,890 8,333,278 Total Operating Expenses 1,549,953 19,597,544 38,637,334
Operating Income (Loss) (211,197) (2,015,839) (3,996,238) NON-OPERATING REV ENUES (EXPENSES): Interest and investment revenue 9,411 121,903 401,064 Other non-operating revenues - 1,434,797 1,448,808 Gain (loss) on sale/retirement of assets - - (4,457) Other non-operating expenses 2,824 - 2,824 Total Non-Operating Revenues (Expenses) 12,235 1,556,700 1,848,239 Income (Loss) Before Contributions and Transfers (198,962) (459,139) (2,147,999) Transfers in - - 248,083 Transfers out - - -
CHA NGE IN NET POSITION (198,962) (459,139) (1,899,916)
NET POSITION - BEGINNING (691,120) 4,542,582 12,983,443 NET POSITION - ENDING $ (890,082) $ 4,083,443 $ 11,083,527
PAGE 144 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT
CITY OF EVERETT FINANCIAL SECTION
COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS FOR THE YEAR ENDED DECEMBER 31, 2018 (PAGE 1 OF 2)
501 503 505 EQUIPM ENT SEL F- COM PUT ER RENTAL INSURANCE RESERV E FUND FUND FUND CASH FLOWS FROM OPERATING ACTIVITIES: Receipts from customers and users $ 498,993 $ 220,499 $ - Receipts from interfund services provided 7,464,017 4,964,932 2,625,493 Payments to suppliers (4,597,696) (1,721,387) (2,642,070) Payments to employees (2,406,972) (155,068) - Payments for interfund services used (448,169) - - Claims paid - (5,219,772) - Other receipts 14,011 - - NET CASH PROV IDED (USED) BY OPERATING ACTIV ITIES 524,184 (1,910,796) (16,577)
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Proceeds from sale of capital assets - - 22,264 Capital contributions 248,083 - - Acquisition and construction of capital assets (106,502) - (170,677) NET CASH PROV IDED (USED) BY CAPITAL FINANCING ACTIV ITIES 141,581 - (148,413)
CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from sale of investments - 2,196,962 345,925 Purchase of investments (429,180) - - Investment income 25,116 182,593 43,810 NET CASH PROV IDED (USED) BY INV ESTING ACTIV ITIES (404,064) 2,379,555 389,735 Net Increase (Decrease) in Cash and Cash Equivalents 261,701 468,759 224,745 Cash and Cash Equivalents, January 1 20,425 206,633 37,813 CASH AND CASH EQUIV ALENTS, DECEM BER 31 $ 282,126 $ 675,392 $ 262,558 Current Cash and Cash Equivalents $ 282,126 $ 675,392 $ 262,558 CASH AND CASH EQUIV ALENTS, DECEM BER 31 $ 282,126 $ 675,392 $ 262,558
RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROV IDED (USED) BY OPERATING ACTIV ITIES: Operating income (loss) $ 156,004 $ (1,494,975) $ (430,231) Adjustments to Reconcile Operating Income to Net Cash Provided (Used) by Operating Activities: Depreciation and amortization 51,383 - 329,831 Other non-operating receipts 14,011 - - GASB 68 pension expense adjustments (660) - - Change in Assets and Liabilities: (Increase) decrease in inventories 134,410 - 122,546 (Increase) decrease in receivables 53,299 - - (Increase) decrease in prepaid expenses - (534) 37 Increase (decrease) in accounts and other payables 46,093 (415,287) (38,760) Increase (decrease) in compensated absences 69,644 - - TOTAL ADJUSTMENTS 368,180 (415,821) 413,654 NET CASH PROV IDED BY OPERATING ACTIV ITIES $ 524,184 $ (1,910,796) $ (16,577)
SCHEDULE OF NON-CASH CAPITAL AND RELATED FINANCING ACTIVITIES: Non-Cash Financing, Capital and Investing Activities: Capital assets contributed to other funds $ 26,721 $ - $ - Increase (decrease) in fair value of investments (8,679) (5,994) (2,920) TOTAL NON-CASH ACTIVITIES $ 18,042 $ (5,994) $ (2,920)
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 145
CITY OF EVERETT FINANCIAL SECTION
COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS FOR THE YEAR ENDED DECEMBER 31, 2018 (PAGE 2 OF 2)
507 508 TOTAL T EL E- HEALTH BENEFIT INTERNAL COMM RESERV E SERV ICE FUND FUND FUNDS CASH FLOWS FROM OPERATING ACTIVITIES: Receipts from customers and users $ - $ 4,195 $ 723,687 Receipts from interfund services provided 1,338,756 17,577,510 33,970,708 Payments to suppliers (684,194) (19,116,211) (28,761,558) Payments to employees (502,680) - (3,064,720) Payments for interfund services used - - (448,169) Claims paid - - (5,219,772) Other receipts 2,824 1,071,978 1,088,813 NET CASH PROV IDED (USED) BY OPERATING ACTIV ITIES 154,706 (462,528) (1,711,011)
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Proceeds from sale of capital assets - - 22,264 Capital contributions - - 248,083 Acquisition and construction of capital assets - - (277,179) NET CASH PROV IDED (USED) BY CAPITAL FINANCING ACTIV ITIES - - (6,832)
CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from sale of investments - 485,042 3,027,929 Purchase of investments (148,990) - (578,170) Investment income 11,876 112,924 376,319 NET CASH PROV IDED (USED) BY INV ESTING ACTIV ITIES (137,114) 597,966 2,826,078 Net Increase (Decrease) in Cash and Cash Equivalents 17,592 135,438 1,108,235 Cash and Cash Equivalents, January 1 8,482 105,650 379,003 CASH AND CASH EQUIV ALENTS, DECEM BER 31 $ 26,074 $ 241,088 $ 1,487,238
Current Cash and Cash Equivalents $ 26,074 241,088 $ 1,487,238 CASH AND CASH EQUIV ALENTS, DECEM BER 31 $ 26,074 $ 241,088 $ 1,487,238
RECONCILIATION OF OPERATING INCOM E (LOSS) TO NET CASH PROV IDED (USED) BY OPERATING ACTIV ITIES: Operating income (loss) $ (211,197) $ (2,015,839) $ (3,996,238) Adjustments to Reconcile Operating Income to Net Cash Provided (Used) by Operating Activities: Depreciation and amortization 39,936 - 421,150 Other non-operating receipts 2,824 1,434,797 1,451,632 GASB 68 pension expense adjustments 296,125 - 295,465 Change in Assets and Liabilities: (Increase) decrease in inventories - - 256,956 (Increase) decrease in receivables - (362,819) (309,520) (Increase) decrease in prepaid expenses - - (497) Increase (decrease) in accounts and other payables 13,113 481,333 86,492 Increase (decrease) in compensated absences 13,905 - 83,549 TOTAL ADJUSTMENTS 365,903 1,553,311 2,285,227 NET CASH PROV IDED BY OPERATING ACTIV ITIES $ 154,706 $ (462,528) $ (1,711,011)
SCHEDULE OF NON-CASH CAPITAL AND RELATED FINANCING ACTIVITIES: Non-Cash Financing, Capital and Investing Activities: Capital assets contributed to other funds $ - $ - $ 26,721 Increase (decrease) in fair value of investments (2,465) (8,055) (28,113) TOTAL NON-CASH ACTIVITIES $ (2,465) $ (8,055) $ (1,392)
PAGE 146 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT
FIDUCIARY FUNDS
FIDUCIARY FUNDS
PENSION TRUST FUNDS
637a The Police Pension Fund receives funding from the General Fund (property taxes) and investment interest to pay for retirement benefits not covered by the State's Law Enforcement Officers' and Fire Fighters' Retirement System to active and retired police officers hired on or before March 1, 1970.
637b The Police Healthcare Fund receives funding from the General Fund (property taxes) and investment interest to pay for medical expenses not covered by medical insurance programs for active and retired police officers hired before October 1, 1977.
638a The Fire Pension Fund receives funding from the General Fund (property taxes), a portion of the State levied fire insurance premium tax and investment interest to pay for retirement benefits not covered by the State's Law Enforcement Officers' and Fire Fighters' Retirement System to active and retired fire fighters hired on or before March 1, 1970.
638b The Fire Healthcare Fund receives funding from the General Fund (property taxes) and investment interest to pay for medical expenses not covered by medical insurance programs for active and retired police officers hired before October 1, 1977.
AGENCY FUND
665 The Other Agency Fund accounts for the following entities and processes:
Downtown Business Improvement Area (BIA), District #1 – billing, receipt and disbursement of funds according to the spending authorization provided by Ordinance 2842-05.
CITY OF EVERETT FINANCIAL SECTION
COMBINING STATEMENT OF FIDUCIARY NET POSITION TRUST FUNDS DECEMBER 31, 2018
637a 637b 638a 638b TOTAL POLICE POLICE FIRE FIRE TRUST PENSION HEALTHCARE PENSION HEALTHCARE FUNDS FUND FUND FUND FUND
ASSETS Cash and cash equivalents $ 37,354 $ 63,967 $ 32,635 $ 58,245 $ 192,201 Agency Bonds 5,218,245 11,326,174 10,748,004 17,791,243 45,083,666 Interest receivable 5,829 7,914 - - 13,743 Other Prepayments 1,597 - 75 - 1,672 TOTAL ASSETS 5,263,025 11,398,055 10,780,714 17,849,488 45,291,282
LIABILITIES Accounts payable - 27,361 4,566 47,346 79,273 Interfund Loans Payable - - 619,229 505,500 1,124,729 TOTA L LIA BILITIES - 27,361 623,795 552,846 1,204,002
NET POSITION Restricted for pension benefits and other purposes $ 5,263,025 $ 11,370,694 $ 10,156,919 $ 17,296,642 $ 44,087,280
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 147
CITY OF EVERETT FINANCIAL SECTION
COMBINING STATEMENT OF FIDUCIARY NET POSITION AGENCY FUNDS DECEMBER 31, 2018
TOTAL BIA AGENCY FUNDS
ASSETS Cash and cash equivalents $ 94,620 $ 94,620 Accounts receivable - net 23,342 23,342
TOTAL ASSETS $ 117,962 $ 117,962
LIABILITIES Other current liabilities $ 117,962 $ 117,962 TOTA L LIA BILITIES $ 117,962 $ 117,962
PAGE 148 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT
CITY OF EVERETT FINANCIAL SECTION
COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET POSITION TRUST FUNDS FOR THE YEAR ENDED DECEMBER 31, 2018
637a 637b 638a 638b TOTAL POLICE POLICE FIRE FIRE TRUST PENSION HEALTHCARE PENSION HEALTHCARE FUNDS FUND FUND FUND FUND
ADDITIONS: Contributions Employer $ - $ 53,249 $ - $ 53,249 $ 106,498 State - - 176,619 - 176,619 Total contributions - 53,249 176,619 53,249 283,117
Investment income Interest 111,909 237,352 218,544 358,643 926,448 Net appreciation (depreciation) in fair value (8,913) (17,567) (46,924) (24,047) (97,451)
Net investment income 102,996 219,785 171,620 334,596 828,997
TOTAL ADDITIONS 102,996 273,034 348,239 387,845 1,112,114
DEDUCTIONS: Benefits 468,073 972,189 721,622 1,430,532 3,592,416 Administrative expense 200 15,842 600 28,410 45,052
TOTAL DEDUCTIONS 468,273 988,031 722,222 1,458,942 3,637,468
CHANGE IN NET POSITION Pension benefits (365,277) (373,983) (739,260) Postemployment healthcare benefits (714,997) (1,071,097) (1,786,094)
NET POSITION RESTRICTED FOR EM PL OYEES' PENSION BENEFIT S Employees' pension benefits, January 1 5,628,302 10,530,902 16,159,204
NET POSITION RESTRICTED FOR POSTEMPLOYMENT HEALTHCARE BENEFITS Postemployment healthcare benefits, January 1 12,085,691 18,367,739 30,453,430
NET POSITION - ENDING $ 5,263,025 $ 11,370,694 $ 10,156,919 $ 17,296,642 $ 44,087,280
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 149
CITY OF EVERETT FINANCIAL SECTION
STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUNDS FOR THE YEAR ENDED DECEMBER 31, 2018
BALANCE BALANCE JANUARY 1, 2018 ADDITIONS DEDUCTIONS DECEMBER 31, 2018 BIA ASSETS Cash and cash equivalents $ 184,382 $ 319,649 $ 409,411 $ 94,620 Accounts receivable - net 17,778 234,296 228,732 23,342 TOTAL ASSETS $ 202,160 $ 553,945 $ 638,143 $ 117,962
LIABILITIES Accounts payable $ - $ 408,808 $ 408,808 $ - Other current liabilities 202,160 326,480 410,678 117,962 TOTAL LIABILITIES $ 202,160 $ 735,288 $ 819,486 $ 117,962
BALANCE BALANCE JANUARY 1, 2016 ADDITIONS DEDUCTIONS DECEMBER 31, 2017
TOTAL AGENCY FUNDS
ASSETS Cash and cash equivalents $ 184,382 $ 319,649 $ 409,411 $ 94,620 Accounts receivable - net 17,778 234,296 228,732 23,342 TOTAL ASSETS $ 202,160 $ 553,945 $ 638,143 $ 117,962 LIABILITIES Accounts payable $ - $ 408,808 $ 408,808 $ - Other current liabilities 202,160 326,480 410,678 117,962 TOTAL LIABILITIES $ 202,160 $ 735,288 $ 819,486 $ 117,962
PAGE 150 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT
CITY OF EVERETT STATISTICAL SECTION
STATISTICAL SECTION OVERVIEW
This part of the City of Everett’s comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information say about the government’s overall financial health. This information is unaudited.
CONTENTS STAT No.
Financial Trends Stats 1 - 5 These schedules contain information to assist the reader in understanding how the city’s financial position has changed over time.
Revenue Capacity Stats 6 - 7 These schedules contain information to assist the reader in understanding and assessing the city’s most significant local revenue sources; water/sewer service fees and property taxes.
Debt Capacity Stats 8 - 12 These schedules present information to assist the reader in understanding and assessing the affordability of the city’s current levels of outstanding debt and the government’s ability to issue additional debt in the future.
Demographic and Economic Information Stats 13 - 15 These schedules offer demographic and economic indicators to assist the reader in understanding the environment within which the city’s financial activities take place.
Operating Information Stats 16 - 17 These schedules contain service and infrastructure data to help the reader understand how the information in the government’s financial report relates to the services the city provides and the activities it performs.
Sources: Unless otherwise noted, the information in the schedules is derived from the comprehensive annual financial reports for the relevant year. The city implemented GASB Statement 34 in 2002; schedules presenting government-wide information include information beginning in that year.
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 151 CITY OF EVERETT STATISTICAL SECTION
STAT 01 NET POSITION BY COMPONENT LAST TEN FISCAL YEARS (accrual basis of accounting)
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Governmental Activities Net investment in capital assets $ 276,175,060 $ 277,363,758 $ 280,262,109 $ 291,590,152 $ 301,733,296 $ 276,688,477 $ 319,403,158 $ 324,976,120 $ 328,133,996 $ 327,691,605 Restricted 38,886,183 37,310,156 35,691,667 30,927,056 16,297,575 34,195,045 34,047,044 36,713,957 64,267,802 78,455,713 Unrestricted 95,940,505 93,484,426 93,461,072 79,829,469 86,184,395 106,663,418 80,873,703 86,715,082 63,973,135 28,764,465 Total governmental activities net position $ 411,001,748 $ 408,158,340 $ 409,414,848 $ 402,346,677 $ 404,215,266 $ 417,546,940 $ 434,323,905 $ 448,405,159 $ 456,374,933 $ 434,911,783
Business-type activities Net investment in capital assets $ 355,349,336 $ 361,029,457 $ 361,058,019 $ 358,377,880 $ 362,485,744 $ 369,639,059 $ 356,473,973 $ 381,208,085 $ 418,695,645 $ 443,956,026 Restricted 11,482,570 11,167,299 15,184,274 14,894,611 13,261,092 13,258,812 1,364,001 11,799,565 2,917,186 2,915,027 Unrestricted 49,442,120 42,626,741 48,627,569 58,359,805 61,194,391 68,262,936 88,315,010 65,762,141 82,721,925 83,256,702 Total business-type activities net position $ 416,274,026 $ 414,823,497 $ 424,869,862 $ 431,632,296 $ 436,941,227 $ 451,160,807 $ 446,152,984 $ 458,769,791 $ 504,334,756 $ 530,127,755
Primary Government Net investment in capital assets $ 631,524,396 $ 638,393,215 $ 641,320,128 $ 649,968,032 $ 664,219,040 $ 646,327,536 $ 675,877,131 $ 706,184,205 $ 746,829,641 $ 771,647,631 Restricted 50,368,753 48,477,455 50,875,941 45,821,667 29,558,667 47,453,857 35,411,045 48,513,522 67,184,988 81,370,740 Unrestricted 145,382,625 136,111,167 142,088,641 138,189,274 147,378,786 174,926,354 169,188,713 152,477,223 146,695,060 112,021,167 Total primary government net position $ 827,275,774 $ 822,981,837 $ 834,284,710 $ 833,978,973 $ 841,156,493 $ 868,707,747 $ 880,476,889 $ 907,174,950 $ 960,709,689 $ 965,039,538
Ne t Asse ts - Primary Government (in thousands) 1,200,000 1,000,000 Unrestricted 800,000 Restricted 600,000 400,000 Invested in capital assets, net of related debt 200,000 - 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
PAGE 152 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT CITY OF EVERETT STATISTICAL SECTION
STAT 02 Page 1 of 3 CHANGES IN NET POSITION LAST TEN FISCAL YEARS (accrual basis of accounting)
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 EXPENSES Governmental activities: General government services $ 19,829,413 $ 16,202,175 $ 19,727,643 $ 25,422,415 $ 19,462,237 $ 17,962,330 $ 15,229,252 $ 21,194,313 $ 22,623,200 $ 24,495,523 Police 36,488,879 37,112,805 35,928,460 37,679,652 36,953,341 35,788,822 37,913,612 36,707,805 40,030,005 39,222,508 Judicial * ------1,986,382 2,177,123 2,168,130 2,155,389 Fire 29,593,441 28,925,002 28,302,587 29,278,542 29,429,312 29,620,688 29,193,256 31,861,303 37,788,276 31,526,203 Engineering & construction services 3,966,652 4,466,466 3,511,333 3,591,335 3,786,687 3,757,024 3,323,810 5,392,414 5,812,669 5,702,289 Transportation 8,557,592 10,890,501 8,565,208 8,552,627 6,787,720 7,907,706 9,406,969 12,249,666 10,852,691 11,017,103 Community services 7,583,871 8,189,488 7,296,739 7,574,308 7,659,733 7,309,980 4,726,451 5,331,041 5,453,090 3,796,063 Social services ** ------959,126 1,118,511 1,212,773 1,225,782 Library 5,006,773 4,870,070 5,121,095 5,065,784 5,781,183 5,383,869 4,861,685 5,844,637 5,573,225 4,268,802 Culture and recreation 13,280,089 13,244,263 12,595,237 12,644,830 13,426,236 13,062,126 13,224,113 14,278,342 13,519,056 13,535,097 Interest on long-term debt 842,830 818,660 864,371 812,493 402,235 513,261 454,240 556,520 708,789 859,606 Total governmental activities expenses 125,149,540 124,719,430 121,912,673 130,621,986 123,688,684 121,305,806 121,278,896 136,711,675 145,741,904 137,804,365
Busine ss-type a ctivitie s: Water 23,333,429 25,325,047 26,475,627 29,673,454 30,447,916 28,924,524 29,304,814 32,809,553 33,894,010 34,464,433 Sewer 24,534,675 27,904,797 26,640,525 28,379,198 30,774,660 31,985,659 32,883,228 36,480,492 36,704,554 37,068,342 Solid Waste 3,264,327 3,688,722 1,067,260 793,631 986,840 788,668 1,002,605 672,354 697,533 635,535 Parking 272,951 295,887 251,889 282,917 287,032 274,131 272,970 300,129 277,651 311,878 Transit 24,092,720 25,781,338 22,713,494 23,273,163 22,942,885 23,748,870 21,797,050 23,647,857 25,509,526 26,457,332 Golf 4,577,928 4,139,684 4,012,376 4,146,486 4,370,102 4,312,427 4,298,737 4,336,207 4,208,368 4,281,125 Total business-type activities expenses 80,076,030 87,135,475 81,161,171 86,548,849 89,809,435 90,034,279 89,559,404 98,246,592 101,291,642 103,218,645 Total primary government expenses $ 205,225,570 $ 211,854,905 $ 203,073,844 $ 217,170,835 $ 213,498,119 $ 211,340,085 $ 210,838,300 $ 234,958,267 $ 247,033,546 $ 241,023,010 * Included in Police activities prior to 2015 ** Included in Community services activities prior to 2015
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 153 CITY OF EVERETT STATISTICAL SECTION
STAT 02 Page 2 of 3 CHANGES IN NET POSITION LAST TEN FISCAL YEARS (accrual basis of accounting)
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 PROGRAM REVENUES Governmental activities: Charges for services: General government services $ 2,784,057 $ 1,260,967 $ 1,214,492 $ 1,127,922 $ 1,287,012 $ 1,806,774 $ 3,173,121 $ 3,285,815 $ 3,383,408 $ 3,787,396 Police 3,430,409 3,440,505 3,398,146 2,569,561 2,439,542 2,560,454 307,194 607,234 600,860 224,036 Judicial * ------1,559,065 1,177,902 1,231,510 1,563,930 Fire 1,795,325 1,992,766 1,556,633 1,584,923 1,457,689 1,848,449 1,239,871 1,567,901 2,135,469 2,105,514 Engineering & construction services 522,080 512,461 505,982 451,906 459,583 876,340 689,717 177,777 860,965 938,424 Transportation 1,206,445 795,234 201,283 209,838 497,878 625,648 1,137,000 766,732 1,487,851 1,636,728 Community services 2,858,248 2,056,498 2,284,630 2,463,369 2,355,384 3,689,741 5,071,059 4,686,795 4,214,224 4,353,304 Social services ** ------3,443 3,689 2,402 16,355 Library 122,702 107,017 113,221 102,272 99,250 113,547 88,595 58,343 73,892 68,504 Culture and recreation 1,738,065 1,768,419 1,856,388 1,801,221 2,008,219 1,873,454 1,861,864 1,751,581 1,895,467 1,885,740 Operating grants and contributions 4,647,504 3,973,610 3,014,442 2,131,625 3,352,109 2,387,960 2,907,776 4,099,206 4,056,998 4,864,289 Capital grants and contributions 6,865,521 3,693,227 3,296,672 3,348,510 7,332,484 2,441,564 9,630,441 6,355,056 3,480,214 1,395,921 Total governmental activities program revenues 25,970,356 19,600,704 17,441,889 15,791,147 21,289,150 18,223,931 27,669,146 24,538,031 23,423,260 22,840,141 Busine ss-type a ctivitie s: Charges for services: Water 30,463,819 28,742,817 30,113,113 31,539,348 32,820,242 35,591,782 37,360,006 40,982,646 45,103,720 47,690,025 Sewer 28,522,334 29,307,878 31,568,714 32,879,290 34,502,663 36,294,976 36,617,559 42,388,744 47,485,293 47,376,172 Solid Waste 1,802,186 2,196,527 2,301,760 2,250,755 2,461,856 2,333,877 2,131,832 2,332,479 2,415,968 2,382,979 Parking 374,764 317,457 292,891 264,049 264,095 281,602 334,010 301,817 356,424 391,464 Transit 2,126,900 2,266,491 2,465,498 2,554,691 2,876,207 2,698,730 2,590,765 2,632,143 2,695,314 2,622,451 Golf 3,746,275 3,763,272 3,614,179 3,785,114 3,793,021 3,780,524 4,105,838 3,897,614 3,828,912 4,302,697 Operating grants and contributions 3,779,924 1,436,645 1,486,898 1,855,835 1,521,658 1,302,652 1,486,170 1,600,265 2,239,582 2,303,663 Capital grants and contributions 5,025,507 2,470,223 5,573,861 4,426,220 9,320,558 4,095,153 5,433,271 1,974,082 28,053,959 4,957,737 Total business-type activities program revenues 75,841,709 70,501,310 77,416,914 79,555,302 87,560,300 86,379,296 90,059,451 96,109,790 132,179,172 112,027,188 Total primary government program revenues $ 101,812,065 $ 90,102,014 $ 94,858,803 $ 95,346,449 $ 108,849,450 $ 104,603,227 $ 117,728,597 $ 120,647,821 $ 155,602,432 $ 134,867,329 Net (expense)/revenue Governmental activities $ (99,179,184) $ (105,118,726) $ (104,470,784) $ (114,830,839) $ (102,399,534) $ (103,081,875) $ (93,609,750) $ (112,173,644) $ (122,318,644) $ (114,964,224) Business-type activities (4,234,321) (16,634,165) (3,744,257) (6,993,547) (2,249,135) (3,654,983) 500,047 (2,136,802) 30,887,530 8,808,543 Total primary government net expense $ (103,413,505) $ (121,752,891) $ (108,215,041) $ (121,824,386) $ (104,648,669) $ (106,736,858) $ (93,109,703) $ (114,310,446) $ (91,431,114) $ (106,155,681)
* Included in Police activities prior to 2015 ** Included in Community services activities prior to 2015
PAGE 154 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT CITY OF EVERETT STATISTICAL SECTION
STAT 02 Page 3 of 3 CHANGES IN NET POSITION LAST TEN FISCAL YEARS (accrual basis of accounting)
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 GENERAL REVENUES & OTHER CHANGES IN NET POSITION Governmental activities: Taxes Property $ 35,659,364 $ 35,473,230 $ 38,322,027 $ 38,765,835 $ 38,606,082 $ 39,154,983 $ 40,331,709 $ 42,082,758 $ 42,793,716 $ 43,435,580 Sales 23,175,042 24,818,451 23,696,637 24,605,177 25,596,982 27,025,637 28,725,134 29,683,604 30,849,860 32,501,497 Business 26,331,273 26,083,027 27,105,472 29,331,090 30,706,072 31,980,853 35,462,837 35,969,454 36,263,662 35,491,490 Other 7,646,792 2,909,484 3,566,778 4,019,849 4,070,079 5,554,740 6,787,004 9,561,525 9,212,000 9,333,783 Miscellaneous - 4,861,570 4,542,695 4,660,972 4,086,888 3,567,586 4,243,131 4,774,218 4,976,842 5,702,446 Interest and investment earnings 2,399,689 4,112,868 4,664,927 2,405,516 (2,901,849) 4,772,730 2,183,432 2,669,025 1,288,995 3,047,974 Special items ------Transfers 6,135,417 4,016,688 3,828,756 3,974,229 4,281,872 4,357,020 4,543,176 4,944,066 5,204,561 5,697,817 Total governmental activities 101,347,577 102,275,318 105,727,292 107,762,668 104,446,126 116,413,549 122,276,423 129,684,650 130,589,636 135,210,587 Busine ss-type a ctivitie s: Taxes Sales 14,489,333 15,650,951 14,923,050 15,738,801 16,380,028 17,315,413 18,327,232 18,960,466 19,552,780 20,169,893 Business 95,784 98,269 92,086 99,994 98,650 96,429 106,863 100,034 99,620 80,683 Miscellaneous 173,633 242,899 250,089 239,412 235,158 239,716 1,019,041 373,622 78,656 90,635 Interest and investment earnings 1,277,687 3,208,205 3,786,445 1,652,003 (3,129,771) 4,580,025 1,508,012 2,372,963 543,606 2,341,062 Special items ------Transfers (6,135,417) (4,016,688) (3,828,756) (3,974,229) (4,281,872) (4,357,020) (4,543,176) (4,944,066) (5,204,561) (5,697,817) Total business-type activities 9,901,020 15,183,636 15,222,914 13,755,981 9,302,193 17,874,563 16,417,972 16,863,019 15,070,101 16,984,456
Total primary government general revenues & other changes in net position $ 111,248,597 $ 117,458,954 $ 120,950,206 $ 121,518,649 $ 113,748,319 $ 134,288,112 $ 138,694,395 $ 146,547,669 $ 145,659,737 $ 152,195,043
CHANGE IN NET POSITION Governmental activities $ 2,168,393 $ (2,843,408) $ 1,256,508 $ (7,068,171) $ 2,046,592 $ 13,331,674 $ 28,666,673 $ 17,511,006 $ 8,270,992 $ 20,246,363 Business-type activities 5,666,699 (1,450,529) 11,478,657 6,762,434 7,053,058 14,219,580 16,918,019 14,726,217 45,957,631 25,792,999 Total primary government $ 7,835,092 $ (4,293,937) $ 12,735,165 $ (305,737) $ 9,099,650 $ 27,551,254 $ 45,584,692 $ 32,237,223 $ 54,228,623 $ 46,039,362
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 155 CITY OF EVERETT STATISTICAL SECTION
STAT 03 FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (modified accrual basis of accounting)
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 General Fund Nonspendable $ - $ - $ 8,797,553 $ 9,617,592 $ 9,376,820 $ 35,951,411 $ 35,865,109 $ 35,897,934 $ 36,078,606 $ 32,166,516 Committed - - 467,553 254,608 158,569 137,648 176,773 230,514 233,838 193,312 Reserved Total 9,049,168 8,924,168 9,265,106 9,872,200 9,535,389 36,089,059 36,041,882 36,128,448 36,312,444 32,359,828 Unassigned - - 44,134,696 45,329,693 42,654,161 53,214,782 53,351,648 51,482,538 50,219,025 53,103,063 Unreserved Total 14,339,097 15,229,144 44,134,696 45,329,693 42,654,161 53,214,782 53,351,648 51,482,538 50,219,025 53,103,063 Total general fund $ 23,388,265 $ 24,153,312 $ 53,399,802 $ 55,201,893 $ 52,189,550 $ 89,303,841 $ 89,393,530 $ 87,610,986 $ 86,531,469 $ 85,462,891
All other governmental funds Capital Improvement Reserve fund Nonspendable $ - $ - $ - $ - $ - $ - $ 6,514 $ 15,711 $ 26,409 $ - Restricted - - 2,224,561 472,452 - - - 159,390 327,865 6,486,834 Assigned - - 22,893,618 17,910,076 16,503,700 16,012,751 17,642,760 24,068,013 27,961,397 28,868,200 Total 22,480,222 23,943,481 25,118,179 18,382,528 16,503,700 16,012,751 17,649,274 24,243,114 28,315,671 35,355,034 Special Revenue funds Nonspendable 13,282,625 13,584,940 434,160 - - - - - Restricted - - 21,822,078 16,869,664 29,467,274 32,185,757 33,996,544 34,964,686 38,102,381 36,401,562 Assigned - - 5,400,843 6,171,702 5,597,316 6,092,759 6,177,376 5,884,304 5,035,985 4,728,140 Unassigned - - (290,716) (234,862) (99,335) (28,238) - - - - Total 71,666,770 66,547,709 40,214,830 36,391,444 35,399,415 38,250,278 40,173,920 40,848,990 43,138,366 41,129,702 Debt Service funds Assigned - - 104,223 66,779 32,199 23,475 28,861 26,887 20,979 28,319 Unassigned - - (5,000) ------Total 182,572 141,447 99,223 66,779 32,199 23,475 28,861 26,887 20,979 28,319 Capital Projects funds Restricted 586,964 - - - 123,055 1,589,881 949,667 1,183,919 Assigned - - 1,827,797 1,464,244 1,347,703 1,335,255 1,057,799 1,559,033 1,168,145 1,031,626 Unassigned - - (73,379) - - - (23,639) - 54,285 - Total 3,001,874 4,862,935 2,341,382 1,464,244 1,347,703 1,335,255 1,157,215 3,148,914 2,172,097 2,215,545 Total all other governmental funds $ 97,331,438 $ 95,495,572 $ 67,773,614 $ 56,304,995 $ 53,283,017 $ 55,621,759 $ 59,009,270 $ 68,267,905 $ 73,647,113 $ 78,728,600
General Fund - Unreserved Fund Balance 60,000,000 50,000,000 40,000,000 30,000,000 20,000,000 10,000,000 - 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Starting year ending December 31, 2011, City of Everett implemented GSAB 54 - which required new classification for fund balances
PAGE 156 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT CITY OF EVERETT STATISTICAL SECTION
STAT 04 CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (modified accrual basis of accounting)
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 REVENUES Taxes (see STAT 05) $ 86,129,512 $ 88,226,650 $91,758,492 $95,729,271 $98,384,239 $102,209,927 $110,499,789 $116,364,566 $118,235,320 $119,876,391 Licenses and permits 2,030,987 1,275,090 1,372,902 1,419,348 1,322,961 1,893,008 4,945,503 4,317,644 4,284,350 4,208,297 Intergovernmental revenues 16,533,833 12,943,555 11,583,732 11,178,806 14,252,148 9,322,322 16,244,736 13,182,337 12,124,497 12,044,899 Charges for services 11,617,508 11,366,835 10,300,666 10,713,543 10,887,103 13,015,660 12,355,713 11,910,976 11,268,052 11,590,767 Fines and forfeits 2,113,788 2,289,241 2,406,812 2,089,259 1,837,173 1,941,355 1,679,443 1,299,923 1,367,251 1,690,037 Other revenues 4,890,542 6,055,566 6,359,449 4,049,518 (325,034) 7,016,585 3,958,140 5,482,424 4,161,525 5,565,428 Total revenues 123,316,170 122,156,937 123,782,053 125,179,745 126,358,590 135,398,857 149,683,324 152,557,870 151,440,995 154,975,819 EXPENDITURES General government services $ 21,371,527 $ 19,560,359 $ 22,224,183 $ 25,222,175 $ 23,997,404 $ 23,281,469 $ 28,207,021 $ 28,940,479 $ 28,367,559 $ 25,880,097 Security of persons and property 63,228,588 63,281,581 61,936,081 63,200,943 64,829,094 63,935,921 68,182,152 71,912,136 74,758,838 77,843,988 Physical environment 4,219,145 4,552,143 3,347,520 3,410,948 228,636 238 - - - - Transportation 4,157,219 3,848,650 3,855,360 3,985,867 5,986,630 6,479,364 6,785,224 6,774,470 7,074,261 7,352,940 Economic environment 5,966,209 6,774,540 5,886,619 6,130,190 6,822,836 6,421,104 6,777,917 6,413,472 7,888,997 7,189,739 Mental and physical health 36,022 20,341 25,117 26,659 925,972 957,605 958,117 1,110,749 1,226,021 1,251,505 Culture and recreation 15,000,541 14,994,400 14,595,117 14,581,748 15,890,931 15,154,251 16,624,481 16,066,602 16,060,005 15,997,160 Capital outlay 18,115,409 11,543,600 13,139,960 19,276,636 16,578,457 8,708,162 21,881,242 15,894,395 14,596,524 12,844,794 Debt service: Principal 5,361,799 1,819,316 419,316 2,064,316 874,315 10,659,316 1,777,005 2,399,226 2,329,385 6,951,615 Interest 1,076,646 819,205 806,751 1,079,100 526,252 489,641 550,529 641,976 783,024 933,498 Other debt service costs 50,179 45,267 91,968 39,648 12,118 59,538 - - 1,895 14,945 Total expenditures 138,583,284 127,259,402 126,327,992 139,018,230 136,672,645 136,146,609 151,743,688 150,153,505 153,086,509 156,260,281 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (15,267,114) (5,102,465) (2,545,939) (13,838,485) (10,314,055) (747,752) (2,060,364) 2,404,365 (1,645,514) (1,284,462)
OTHER FINANCING SOURCES (USES) Issuance of long-term debt - - - - - 27,665,000 1,169,444 - - - Refunding debt issued - - - 14,990,718 - 8,200,000 - - - - Payments to debt escrow agent - - - (14,800,000) ------Disposition of capital assets 1,596,399 81,031 161,718 7,853 18,678 42,865 40,938 146,039 861,830 127,675 Transfers in 21,575,867 24,106,469 12,212,052 35,041,669 13,022,464 39,613,074 19,787,919 23,519,925 20,929,018 23,708,312 Transfers out (17,140,074) (20,155,854) (8,303,299) (31,068,283) (8,761,408) (35,320,154) (15,460,737) (18,594,238) (15,836,463) (18,258,580) Other ------19 12,000 Total other financing sources (uses) 6,032,192 4,031,646 4,070,471 4,171,957 4,279,734 40,200,785 5,537,564 5,071,726 5,954,404 5,589,407 Special items 13,692,128 ------NET CHANGE IN FUND BALANCES 4,457,206 (1,070,819) 1,524,532 (9,666,528) (6,034,321) 39,453,033 3,477,200 7,476,091 4,308,890 4,304,945 Debt service as percentage of noncapital expenditures * 5.29% 2.22% 1.07% 2.61% 1.17% 8.87% 1.80% 2.25% 2.24% 5.45%
* Per GASB Statement 44, "noncapital expenditures are calculated by subtracting the following from total expenditures: a) capital outlay (to the extent capitalized for the government-wide statement of net assets) and b) expenditures for capitalized assets contained within the functional expenditure categories."
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 157 CITY OF EVERETT STATISTICAL SECTION
STAT 05 GENERAL GOVERNMENTAL TAX REVENUES BY SOURCE LAST TEN FISCAL YEARS (modified accrual basis of accounting)
Fisca l Sales & Hotel/ Busine ss & Cable Real Estate Year Property * Use ** Motel Occupation Admissions Utility Franchise Leasehold Ex cise Gambling Other Total 2009 34,589,626 22,901,940 273,102 14,163,851 374,554 10,615,049 1,177,820 386,088 1,227,773 398,649 21,060 86,129,512 2010 35,395,579 24,535,121 283,331 14,560,759 355,862 9,945,590 1,220,816 367,540 1,200,059 339,755 22,238 88,226,650 2011 38,373,048 23,412,096 284,541 15,334,228 343,689 10,165,900 1,261,655 453,142 1,751,671 364,778 13,744 91,758,492 2012 38,767,683 24,283,111 322,065 18,337,828 340,820 9,309,502 1,342,939 398,617 2,299,679 320,265 6,762 95,729,271 2013 38,937,693 25,238,206 358,776 19,982,373 350,868 9,011,725 1,361,106 383,769 2,454,933 304,790 - 98,384,239 2014 39,114,443 26,691,791 333,845 21,232,363 351,989 8,984,618 1,403,311 361,968 3,444,007 291,592 - 102,209,927 2015 40,427,659 28,277,445 447,689 23,000,357 363,363 11,635,904 463,213 465,102 4,051,734 319,092 1,048,231 110,499,789 2016 42,063,105 29,205,241 475,529 22,758,995 371,525 11,841,929 997,005 459,206 6,311,852 339,353 1,540,826 116,364,566 2017 42,793,716 30,315,486 531,180 21,505,762 346,232 12,809,826 1,601,840 526,393 6,006,136 250,021 1,513,928 118,200,520 2018 43,506,525 31,814,961 680,906 21,141,209 350,285 12,459,805 1,540,191 707,155 5,627,654 280,157 1,767,543 119,876,391
% Change 2009 - 2018 25.78% 38.92% 149.32% 49.26% -6.48% 17.38% 30.77% 83.16% 358.36% -29.72% 8292.89% 39.18%
* Includes property tax recorded in General Government funds, plus property tax recorded directly to the Police and Fire Pension Funds.
** Includes regular sales and use tax, natural gas use tax, and timber harvest tax.
2009 Taxes by Source 2018 Taxes by Source
Real Estate Excise 1.43% All Other Real Estate All Other 3.06% Utility Property Excise 4.53% 12.32% 40.16% Utility 4.69% Property 10.59% 36.29% Business & Occupation 16.44% Business & Sales & Use Occupation 26.59% 17.64% Sales & Use 26.54%
The graphs above combine Hotel/Motel, Admissions, Cable Franchise, Leasehold, Gambling, and Other taxes into the "All Other" category.
PAGE 158 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT CITY OF EVERETT STATISTICAL SECTION
STAT 6a
WATER PRODUCED AND CONSUMED and WASTEWATER TREATED LAST TEN FISCAL YEARS
(units in millions) Total Direct Rates Gallons of Gallons of Gallons of Average Gallons of Water Sewer Water Water Water Percent Wastewater Ba se Usa ge Ba se Usa ge Year Produced Consumed Unbilled Unbilled Treated Rate 1 Rate Rate Rate
2009 29,894 27,503 2,391 8.00% 6,706 13.20 2.20 40.30 4.48
2010 28,036 25,791 2,245 8.01% 7,056 14.10 2.35 42.40 4.71 2011 23,676 21,782 1,894 8.00% 7,145 15.06 2.51 44.50 4.94 2012 19,920 17,747 1,543 7.75% 7,609 16.02 2.67 46.70 5.19 2013 18,062 16,763 1,399 7.75% 6,455 15.13 3.02 48.00 5.33 2014 18,110 17,747 363 2.00% 7,310 16.92 3.38 49.50 5.5 2015 19,228 18,843 385 2.00% 6,533 18.95 3.79 81.10 5.68 2016 18,010 17,356 654 3.63% 7,180 21.24 4.25 59.87 6.65 2017 18,715 18,045 670 3.58% 7,088 21.34 4.27 65.70 7.3 2018 19,426 18,450 796 4.10% 6,892 22.02 4.40 69.65 7.74
1 Rate shown is for 3/4" meters (most common meter for single family households). See STAT 6d for other meter sizes and rates.
Water Produced and Consumed (in millions)
35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Series1 Series2
Source: City of Everett Water/Sewer Utility Department
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 159 CITY OF EVERETT STATISTICAL SECTION
STAT 6b
ANNUAL TAP SALES
LAST TEN FISCAL YEARS
Water Sewer Meter Taps Taps Year Sold * Sold Total Taps
2009 54 67 121 2010 122 70 192 2011 62 41 103 2012 49 85 134 2013 66 54 120 2014 142 147 289 2015 159 112 271
2016 218 220 438
2017 260 272 532 2018 188 272 460
* Some of these taps may have been acquired through annexation.
Annual Tap Sales
300 250 200 150 100 50 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Water Meter Taps Sewer Taps
Notes: The City saw a dramatic decline in both water and sewer
tap sales due to the struggling economy in 2009.
Source: City of Everett Water/Sewer Utility Department
PAGE 160 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT CITY OF EVERETT STATISTICAL SECTION
STAT 6c
NUMBER OF WATER AND SEWER CUSTOMERS BY TYPE LAST TEN FISCAL YEARS
WATER SEWER Year Residential Commercial Industrial Other Total Year Residential Commercial Industrial Other Total
2009 22,906 2,825 50 332 26,113 2009 21,223 1,822 36 130 23,211 2010 22,848 2,846 48 339 26,081 2010 21,178 1,840 34 133 23,185 2011 24,026 2,883 48 346 27,303 2011 21,250 1,849 34 136 23,269 2012 23,791 2,899 43 540 27,273 2012 21,274 1,848 34 147 23,303 2013 23,902 2,916 40 540 27,398 2013 21,300 1,854 33 150 23,337 2014 24,030 2,928 41 538 27,537 2014 21,429 1,852 33 150 23,464 2015 24,260 2,931 41 538 27,770 2015 21,635 1,845 33 149 23,662 2016 24,569 2,937 40 401 27,947 2016 21,795 1,846 31 138 23,810 2017 24,883 2,950 39 411 28,283 2017 22,136 1,842 31 137 24,146 2018 25,091 3,003 40 401 28,535 2018 22,331 1,874 31 138 24,374
Source: City of Everett Water/Sewer Utility Department
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 161 CITY OF EVERETT STATISTICAL SECTION
STAT 6d
WATER AND SEWER RATES LAST TEN FISCAL YEARS
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 WATER RATES Base rate (meter size) Flat rate $22.00 $23.50 $25.10 $26.10 $30.24 $33.83 $37.89 $42.47 $42.68 $44.02 3/4" 13.20 14.10 15.06 16.02 15.13 16.92 18.95 21.24 21.34 22.02 1" 22.00 23.50 25.10 26.70 30.24 33.83 37.89 42.47 42.68 44.02 2" 26.40 28.20 30.12 32.04 36.29 40.61 45.47 50.96 51.22 52.83 Over 2" 35.20 37.60 40.16 42.72 48.39 54.14 60.62 67.95 68.29 70.44
Usage rate (per CCF) $2.20 $2.35 $2.51 $2.67 $3.02 $3.38 $3.79 $4.25 $4.27 $4.40
SEWER RATES Flat rate $40.30 $42.40 $44.50 $46.70 $48.00 $49.50 $51.10 $59.87 $65.70 $69.65 Usage rate (per CCF) 4.48 4.71 4.94 5.19 5.33 5.50 5.68 6.65 7.30 7.74
Source: City of Everett Water/Sewer Utility Department
PAGE 162 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT CITY OF EVERETT STATISTICAL SECTION
STAT 6e
LARGEST WATER and SEWER CUSTOMERS CURRENT YEAR AND TEN YEARS AGO
2018 Water Revenue 2009 Water Revenue Customer Amount Rank % Amount Rank %
City of Everett $ 23,848,789 1 51.28% $ 12,103,681 1 41.70% Alderwood Water District 13,499,621 2 29.03% 10,531,228 2 36.28% Lake Stevens PUD 2,435,785 3 5.24% 1,871,636 3 6.45% City of Marysville 2,387,179 4 5.13% 1,309,555 5 4.51% City of Monroe 1,481,496 5 3.19% 770,909 6 2.66% Mukilteo Water District 554,678 6 1.19% 1,422,361 4 4.90% City of Snohomish 463,250 7 1.00% 288,802 7 1.00% Tulalip 608,815 8 1.31% - - 0.00% Silver Lake Water District 254,245 9 0.55% 217,978 8 0.75%
Subtotal 45,533,858 97.90% 28,516,150 98.25%
Balance from other customers 976,008 2.10% 507,681 1.75%
Grand total $ 46,509,866 100.00% $ 29,023,831 100.00%
2018 Sewer Revenue 2009 Sewer Revenue
Customer Amount Rank % Amount Rank %
City of Everett $ 26,877,193 1 76.79% $ 16,443,632 1 73.33% Silver Lake Water District 5,788,590 2 16.54% 3,740,592 2 16.68% Alderwood Water District 1,571,954 3 4.49% 1,541,874 3 6.88% Mukilteo Water District 716,066 4 2.05% 662,525 4 2.95% City of Marysville 44,204 5 0.13% 23,341 5 0.10% City of Snohomish 4,097 6 0.01% 12,303 6 0.05%
Grand total $ 35,002,104 100.00% $ 22,424,267 100.00%
Source: City of Everett Water/Sewer Utility Department
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 163 CITY OF EVERETT STATISTICAL SECTION
STAT 07a TAXABLE ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF PROPERTY LAST TEN FISCAL YEARS
Multi- State Le ss: Total Taxable Total Fisca l Residential Commercial Industrial Agricultural Family Other Personal Asse sse d Tax Exempt Asse sse d Direct Year Property Property Property Property Property Property Property Property Property Value1 Tax Rate2 2009 6,886,380,250 4,995,201,347 1,367,947,800 17,371,700 1,951,536,900 461,792,300 1,451,220,118 228,700,703 (3,098,363,164) 14,261,787,954 2.502 2010 6,183,791,200 5,076,738,700 1,416,851,000 17,655,800 1,950,129,800 408,719,700 1,289,759,368 224,083,430 (2,976,597,235) 13,591,131,763 2.655 2011 5,602,394,800 4,703,084,000 1,336,953,900 16,824,900 1,661,765,100 327,026,900 1,283,524,972 234,522,057 (2,802,653,484) 12,363,443,145 3.108 2012 4,852,961,650 4,445,693,500 1,261,413,600 14,924,100 1,558,869,320 285,627,550 1,243,538,893 289,054,941 (2,731,089,096) 11,220,994,458 3.455 2013 4,347,652,050 4,571,650,390 1,332,641,600 14,709,100 1,539,990,350 285,056,700 1,260,086,574 204,075,290 (2,929,053,512) 10,626,808,542 3.633 2014 4,723,071,200 4,554,718,200 1,488,254,587 15,112,600 1,607,530,000 291,666,300 1,406,093,783 179,594,462 (2,754,504,427) 11,511,536,705 3.431 2015 5,288,028,300 4,701,223,000 1,588,559,000 15,345,400 1,758,525,469 297,250,610 1,500,184,463 191,536,703 (2,821,495,063) 12,519,157,882 3.248 2016 5,907,853,000 4,866,470,850 1,846,536,200 11,225,700 1,945,418,780 327,284,800 1,574,366,919 198,268,015 (2,950,562,693) 13,726,861,571 3.068 2017 7,232,250,900 5,423,073,180 2,268,423,800 9,521,100 2,540,831,630 360,760,600 2,052,114,883 194,650,515 (5,217,462,317) 14,864,164,291 2.883 2018 8,242,550,000 5,802,942,800 2,368,213,400 9,971,900 2,886,706,420 355,233,600 2,211,167,312 174,762,116 (5,310,267,161) 16,741,280,387 2.604 1 Washington State law requires all property be assessed at 100% of its true and fair market value. 2 Tax rates are per $1,000 of assessed value. Detail of tax rates can be found in Stat 7c.
Annual Taxable Assessed Value - City of Everett (in millions)
18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 - 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Source: Snohomish County Assessor's Office.
PAGE 164 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT CITY OF EVERETT STATISTICAL SECTION
STAT 07b
PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS
Collected within the Fiscal Year Total Tax Asse ssor's Adjusted Total Fiscal year of the Levy Total Collections to Date Ended Levy for Certification Tax Levy for Percentage of Collections in Percentage of December 31 Fiscal Year Adjustments Fiscal Year Amount Adjusted Levy Subsequent Years Amount Adjusted Levy 2009 35,678,786 (275,606) 35,403,180 34,804,805 98.3% 577,973 35,382,779 99.9% 2010 36,088,548 (249,845) 35,838,703 35,170,678 98.1% 567,596 35,738,274 99.7% 2011 38,420,299 (118,450) 38,301,849 37,596,649 98.2% 681,424 38,278,073 99.9% 2012 38,612,025 (22,567) 38,589,458 38,084,348 98.7% 522,305 38,606,653 100.0% 2013 39,497,033 (216,812) 39,280,221 38,046,225 96.9% 331,298 38,377,523 97.7% 2014 40,662,855 (107,388) 40,555,467 38,705,330 95.4% 554,489 39,259,818 96.8% 2015 42,111,176 (70,078) 42,041,098 39,930,797 95.0% 522,695 40,453,492 96.2% 2016 42,854,301 (78,556) 42,775,744 41,522,111 97.1% 480,213 42,002,324 98.2% 2017 43,595,841 (70,482) 43,525,359 42,190,879 96.9% 486,758 42,677,638 98.1% 2018 46,945,140 - 46,945,140 42,936,684 91.5% - 42,936,684 91.5%
Comparison of Amount Levied to Amount Collected within Fiscal Year
40,000,000
30,000,000 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Adjusted Total Tax Levy Amount Collected within Fiscal Year
Source: Snohomish County Assessor's Office.
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 165 CITY OF EVERETT STATISTICAL SECTION
STAT 07c DIRECT AND OVERLAPPING PROPERTY TAX RATES LAST TEN FISCAL YEARS (rate per $1,000 of assessed value)
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 City Direct Rates:
Regular $2.197 $2.331 $2.608 $2.955 $3.133 $2.931 $2.750 $2.596 $2.438 $2.202
Subtotal-Regular Levy $2.197 $2.331 $2.608 $2.955 $3.133 $2.931 $2.750 $2.596 $2.438 $2.202 Emergency Medical $0.305 $0.324 $0.500 $0.500 $0.500 $0.500 $0.498 $0.472 $0.445 $0.402 City Total $2.502 $2.655 $3.108 $3.455 $3.633 $3.431 $3.248 $3.068 $2.883 $2.604
Overlapping Taxes: County $0.717 $0.782 $0.868 $0.982 $1.077 $1.079 $0.998 $0.933 $0.879 $0.791 State School 1.909 1.993 2.206 2.379 2.433 2.384 2.279 2.124 2.028 2.848 Local School 4.128 4.626 5.438 6.168 6.549 5.974 5.480 5.183 5.881 5.427 Regional Transit Authority 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.250 0.227 Port of Everett 0.267 0.285 0.285 0.345 0.290 0.353 0.334 0.316 0.297 0.271
Grand Total $9.523 $10.341 $11.905 $13.329 $13.982 $13.221 $12.339 $11.624 $12.218 $12.168
Annual Total Direct Tax Rate $4.000
$3.000 $2.000
$1.000
$0.000 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Source: Snohomish County Assessor's Office.
PAGE 166 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT CITY OF EVERETT STATISTICAL SECTION
STAT 07d
PRINCIPAL PROPERTY TAX PAYERS CURRENT YEAR AND NINE YEARS AGO
2009 2018 Taxable Taxable Asse sse d % of Total City Asse sse d % of Total City 2 1 Taxpayer Type of Business Valuation (AV) Rank Taxable AV Valuation (AV) Rank Taxable AV The Boeing Co Aerospace $ 1,575,491,229 1 11.05% $ 3,195,449,785 1 19.09% Fluke Electronics Corp Electronics 92,748,999 4 0.65% 91,631,556 2 0.55% Starwood Capital Group Hotels/Prop. Invst. 73,040,000 3 0.44% Brixton Everett LLC Everett Mall/Prop. Invst. 72,585,600 4 0.43% Prime Catalina Merrill Creek LLC Apartments 72,400,357 5 0.43% Strata Fulton LLC Apartments 66,417,900 6 0.40% Standard JSP Olin LLC Apartments 58,102,600 7 0.35% Frontier Communications NW (Verizon) Telecommunications 151,994,314 3 1.07% 55,578,633 8 0.33% Garden Fresh Gourmet Foods Inc Food Manufacturing 54,020,104 9 0.32% Breit Ta Mf Walden Pond LLC Apartments 50,626,000 10 0.30% Kimberly-Clark Corporation Pulp and Paper 202,287,700 2 1.42% Steadfast Properties & Development Development 65,599,500 5 0.46% Stockpot Inc Food Manufacturing 57,541,083 6 0.40% Millington Apartments LLC Apartments 55,604,900 7 0.39% Stephanus Paul Development 43,420,000 8 0.30% Columbia Cascade Plaza Inc General Retail 41,900,700 9 0.29% Fred Meyer Stores Inc General Retail 40,014,100 10 0.28%
$ 2,326,602,525 16.31% $ 3,789,852,535 22.64%
1 2017 assessed value for 2018 taxes- $16,741,280,387 2 2008 assessed value for 2009 taxes - $14,261,787,954
Source: Snohomish County Assessor's Office
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 167 CITY OF EVERETT STATISTICAL SECTION
STAT 08 RATIOS OF OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS
Governmental Type Activities Business-Type Activities General Public Works General Public Works Total Percentage Obligation Trust Fund Notes Capital Interlocal Obligation Revenue Trust Fund Notes Capital Primary of Personal Per Year Bonds Loans Payable Lease Agreement Bonds Bonds Loans Payable Lease Government Income1 Capita2 2009 28,000,000 1,607,983 - - 261,555 - 115,920,000 39,305,473 4,154,023 85,634 189,334,668 0.69% 1,851 2010 26,400,000 1,440,978 - 6,382 209,244 9,400,000 111,785,000 38,050,597 2,988,644 121,635 190,402,480 0.65% 1,829 2011 26,200,000 1,273,973 - 4,650 156,933 8,200,000 159,480,000 35,938,261 1,820,635 25,225 233,099,677 0.76% 2,263 2012 23,490,000 1,106,968 - 2,974 104,622 7,000,000 156,055,000 33,540,262 481,524 12,782 221,794,132 0.71% 2,147 2013 22,835,000 939,963 - - 52,311 6,000,000 147,880,000 32,046,926 99,346 54,098 209,907,644 0.63% 2,014 2014 48,260,000 772,960 - - - 5,000,000 142,965,000 34,564,395 86,283 40,298 231,688,936 0.66% 2,209 2015 47,424,194 605,954 1,169,444 - - 4,000,000 199,680,074 35,344,181 75,315 25,232 288,324,394 8.40% 2,725 2016 45,203,812 438,949 1,087,223 - - 3,000,000 197,798,451 32,281,264 61,949 8,783 279,880,431 0.72% 2,584 2017 42,988,431 329,672 1,205,576 - - 2,000,000 189,551,805 29,264,477 48,494 62,894 265,451,349 0.65% 2,418 2018 36,153,050 220,395 1,128,239 - - 1,000,000 181,050,160 26,148,256 35,039 47,109 245,782,248 0.55% 2,210 1 See Stat 13 for personal income data (as noted in Stat 13, personal income data is for all of Snohomish County). 2 See Stat 13 for population data. `
Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements.
PAGE 168 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT CITY OF EVERETT STATISTICAL SECTION
STAT 09
RATIOS OF GENERAL BONDED DEBT OUTSTANDING LAST TEN FISCAL YEARS
General Percentage of
Obligation Taxable Per 1 2 3 Year Bonds Asse sse d Va lue Capita 2009 28,000,000 0.20% 271 2010 35,800,000 0.26% 344 2011 34,400,000 0.28% 334 2012 30,490,000 0.27% 295 2013 28,835,000 0.27% 277
2014 53,260,000 0.43% 508
2015 51,424,194 0.37% 486
2016 48,203,812 0.35% 445 2017 44,988,431 0.30% 410 2018 37,153,050 0.22% 334
1 Details regarding the city's outstanding debt can be found in the notes
to the financial statements.
2 See Stat 07a for property value data. 3 See Stat 13 for population data.
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 169 CITY OF EVERETT STATISTICAL SECTION
STAT 10
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT AS OF DECEMBER 31, 2018
Estimated Estimated Share Percentage of Overlapping Governmental Unit Debt Outstanding Applicable * Debt Debt repaid with property taxes Snohomish County $ 301,120,031 14.14% $ 42,570,779 Everett School District No. 2 188,920,000 46.71% 88,244,041
Mukilteo School District No. 6 101,395,000 41.51% 42,089,717
Snohomish School District No. 201 293,590,000 0.01% 30,267
Marysville School District No. 25 59,580,000 0.06% 38,343 Port of Everett 13,810,000 80.88% 11,169,430 Other debt Port of Everett - Other LT Debt 14,562,043 80.88% 11,777,677
Subtotal, overlapping debt 195,920,253
City direct debt 37,501,684
Total direct and overlapping debt $ 233,421,937
* The percentage of overlapping debt applicable is estimated using taxable assessed property values. Applicable percentages were estimated by determining the portion of another governmental unit's taxable assessed value that is within the city's boundaries and dividing it by each unit's total taxable assessed value.
Sources: Assessed value used to estimate applicable percentages was provided by the Snohomish County Assessor's Office. Debt outstanding provided by each government unit.
Percent of Overlapping Debt By Jurisdiction
Marysville & Snohomish School Districts & FD 1 Port of Everett 9.83% City of Everett .03% 16.07%
Mukilteo School District 18.03%
Snohomish County 18.24%
Everett School District 37.80%
PAGE 170 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT CITY OF EVERETT STATISTICAL SECTION
STAT 11 LEGAL DEBT MARGIN INFORMATION LAST TEN FISCAL YEARS
Legal Debt Margin Calculation for Fiscal Year 2018 Non-voted debt Voted debt limit limit (1.5% of (1.0% of assessed value) assessed value) Assessed Value 16,741,280,387 16,741,280,387 Debt limit 251,119,206 167,412,804 Debt applicable to limit: Total general obligation debt 37,938,634 0 Less: Amount set aside for 0 0 repayment of GO debt Total net debt applicable to limit 37,938,634 0 Legal debt margin 213,180,572 167,412,804
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Non-voted debt limit * 213,926,829 203,866,976 185,451,647 168,314,917 159,402,128 187,787,368 205,902,924 205,902,924 222,962,464 251,119,206 Total net debt applicable to limit 29,869,538 37,456,604 35,835,556 31,704,563 40,140,901 54,032,960 53,199,592 49,026,172 45,890,248 37,938,634 Legal debt margin 184,057,291 166,410,372 149,616,091 136,610,354 119,261,227 133,754,408 152,703,332 156,876,752 177,072,216 213,180,572 Total net debt applicable to the limit as a % of debt limit 13.96% 18.37% 19.32% 18.84% 25.18% 28.77% 25.84% 23.81% 20.58% 15.11%
Voted debt limit * 142,617,880 135,911,318 123,634,431 112,209,945 106,268,085 125,191,579 137,268,616 137,268,616 148,641,643 167,412,804 Total net debt applicable to limit 0 0 0 0 0 0 0 0 0 0 Legal debt margin 142,617,880 135,911,318 123,634,431 112,209,945 106,268,085 125,191,579 137,268,616 137,268,616 148,641,643 167,412,804 Total net debt applicable to the limit as a % of debt limit 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
* The assessed values for the current tax year information is used for the debt limit calculation.
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 171 CITY OF EVERETT STATISTICAL SECTION
STAT 12
PLEDGED-REVENUE COVERAGE LAST TEN FISCAL YEARS
SEWER AND WATER REV ENUE BONDS UTILITY NET REV ENUE TOTAL SERV ICE OPERATING AVAILABLE FOR PRINCIPAL COVERAGE YEAR CHARGES 1 EXPENSES 2 DEBT SERV ICE PRINCIPAL INT EREST & INT EREST RATIO
2009 60,830,248 33,138,037 27,692,211 6,615,000 3,981,716 10,596,716 2.61 2010 61,440,078 36,175,493 25,264,585 4,135,000 5,407,280 9,542,280 2.65
2011 65,384,955 37,937,746 27,447,209 3,305,000 6,850,697 10,155,697 2.70
2012 67,046,573 41,736,966 25,309,607 3,425,000 7,576,252 11,001,252 2.30 2013 66,313,169 43,955,371 22,357,798 3,230,000 7,083,431 10,313,431 2.17
2014 76,242,508 43,490,544 32,751,964 4,915,000 6,620,650 11,535,650 2.84 2015 76,616,542 44,024,926 32,591,616 5,125,000 6,409,525 11,534,525 2.83 2016 85,863,933 52,216,819 33,647,114 6,700,000 7,865,269 14,565,269 2.31
2017 93,746,910 50,208,986 43,537,924 7,120,000 7,181,128 14,301,128 3.04 2018 97,236,066 48,948,446 48,287,620 7,375,000 6,905,851 14,280,851 3.38
1 Total operating and noncapital revenues, and operating assessment receipts.
2 Operating expenses exclusive of depreciation plus non-bond interest.
Debt Service Coverage - Last Ten Years
4.00 3.50 3.00 2.50 2.00 1.50 1.00 Minimum Ratio 0.50 Requirement
0.00 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
PAGE 172 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT CITY OF EVERETT STATISTICAL SECTION
STAT 13 Page 1 of 2 DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN FISCAL YEARS
Personal City of Income (2) Per Capita Everett (thousands Personal Unemployment Median School (1) (2) (3) (4) (5) Year Population of dollars) Income Rate Age Enrollment 2009 103,500 27,643,630 * 40,989 * 10.3% 35.8 19,083 2010 104,100 29,448,610 * 42,972 * 9.8% 35.8 19,049 2011 103,100 30,597,337 * 44,052 * 8.2% 37.3 18,856 2012 103,300 31,266,357 43,281 6.3% 37.8 18,614 2013 104,200 33,570,183 45,796 5.3% 38.0 18,745 2014 104,900 34,858,553 46,733 4.8% 38.3 19,157 2015 105,800 34,156,348 44,967 5.0% 38.6 19,606 2016 108,300 38,615,423 49,226 4.6% 37.8 19,986 2017 109,800 41,140,482 51,339 3.9% 38.0 20,227 2018 111,200 44,540,523 54,576 3.8% 37.9 20,419
Sources: (1) Washington State Office of Financial Management, Forecasting Division.
(2) United States Bureau of Economic Analysis. Figures are for all of Snohomish County. (3) Washington State Employment Security Department. Figures are for all of Snohomish County. (4) US Census Bureau, American Community Survey 5 Year Estimates for Snohomish County (5) WA Office of Superintendent of Public Instruction * City calculated estimates.
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 173 CITY OF EVERETT STATISTICAL SECTION
STAT 13
Page 2 of 2
DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN FISCAL YEARS
City of Everett Population 110,000
105,000
100,000 95,000
90,000 85,000
80,000 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Unemployment Rate
12.0% 10.0% 8.0%
6.0%
4.0%
2.0% 0.0% 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
PAGE 174 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT CITY OF EVERETT STATISTICAL SECTION
STAT 14
PRINCIPAL EMPLOYERS CURRENT YEAR AND NINE YEARS AGO
2009 2018 Percentage Percentage of Total City of Total City Employer Employees Rank Employment Employees Rank Employment The Boeing Company 32,000 1 36.36% 35,000 1 31.46% Providence Regional Medical Center 3,200 3 3.64% 4,906 2 4.41% State of Washington 2,800 5 3.18% 3,000 3 2.70% Naval Station Everett 6,000 2 6.82% 2,900 4 2.61% The Everett Clinic 1,900 6 2.16% 2,871 5 2.58% Snohomish County Government 2,965 4 3.37% 2,759 6 2.48% Everett School District 1,700 7 1.93% 2,443 7 2.20% Fluke Corporation (Fortive) 1,200 8 1.08% City of Everett 1,198 9 1.08% Snohomish PUD 1,004 10 0.90% Verizon Northwest 1,500 8 1.70% Aviation Technical Services 1,400 9 1.59% Zumiez 1,400 10 1.59% 54,865 62.35% 57,281 51.50%
Source: Economic Alliance Snohomish County - Top 50 Snohomish County Employers
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 175 CITY OF EVERETT STATISTICAL SECTION
STAT 15 FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION LAST TEN FISCAL YEARS
Full-time equivalent employees as of December 31 * Function/Program 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Governmental Activities: General government services 147.60 149.10 145.30 145.43 143.43 143.13 124.33 133.33 139.33 133.18 Council 8.00 8.00 8.00 8.00 8.00 8.00 8.00 8.00 8.00 8.00 Legal 18.50 20.00 19.00 19.00 18.00 18.00 17.00 18.00 19.00 18.75 Administration 7.00 7.00 7.00 7.00 7.00 7.00 7.00 11.00 12.00 9.00 Economic development 1.90 1.90 1.90 1.90 1.90 1.90 0.90 0.90 0.90 0.00 Municipal court 14.65 14.65 14.65 14.65 14.65 14.65 14.85 14.85 14.85 14.85 Probation 5.45 5.45 5.45 5.45 5.45 5.45 3.45 3.45 3.45 3.45 HR 13.50 13.50 13.50 13.63 13.63 13.13 12.13 13.13 13.13 13.13 Finance 20.80 20.80 20.00 20.00 20.00 20.00 19.00 20.00 21.00 20.00 IT 16.80 16.80 16.80 16.80 16.80 17.00 16.00 17.00 20.00 21.00 Facilities 41.00 41.00 39.00 39.00 38.00 38.00 26.00 27.00 27.00 25.00 Property management Police 246.00 246.00 244.00 244.00 244.00 244.00 242.00 251.00 251.00 251.00 Civilian 47.00 45.00 43.00 43.00 43.00 43.00 41.00 45.00 45.00 45.00 Uniformed 199.00 201.00 201.00 201.00 201.00 201.00 201.00 206.00 206.00 206.00 Fire/EMS 190.80 186.00 186.00 186.00 186.00 186.00 186.00 186.00 186.00 185.00 Fire 142.80 143.00 143.00 143.00 143.00 143.00 143.00 143.00 143.00 135.00 Emergency medical services 48.00 43.00 43.00 43.00 43.00 43.00 43.00 43.00 43.00 50.00 Engineering & construction services 52.15 47.65 47.55 47.05 44.05 44.05 43.05 43.05 44.05 45.05 Transportation 26.55 26.55 26.55 26.55 26.55 26.55 26.55 26.55 28.55 29.55 Community services 46.00 43.00 41.00 41.00 39.00 39.00 39.00 39.00 39.00 44.25 Communications & Marketing 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 4.00 Community, Planning, & Economic Dev 16.50 16.50 15.50 16.00 15.00 15.00 15.15 15.30 15.30 18.45 Neighborhoods/comm svcs 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 0.00 Animal control 18.00 15.00 14.00 14.00 14.00 14.00 14.00 14.00 14.00 14.00 Senior center 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00 Community housing 5.50 5.50 5.50 5.00 4.00 4.00 3.85 3.70 3.70 3.80 Library 43.00 42.20 41.20 40.80 40.80 40.80 38.05 38.05 37.65 37.65 Culture and recreation 61.10 61.10 61.10 61.10 58.10 58.10 54.85 54.45 51.35 51.25 Parks 60.00 60.00 60.00 60.00 57.00 57.00 53.00 52.00 49.50 49.50 Theater 1.10 1.10 1.10 1.10 1.10 1.10 1.85 2.45 1.85 1.75 Total FTEs governmental activities 1 813.20 801.60 792.70 791.93 781.93 781.63 753.83 771.43 776.93 776.93 Busine ss-Type Activitie s: Water/Sewer 213.85 215.20 218.30 219.80 222.80 223.30 223.30 224.30 226.30 227.30 Solid waste 0.60 0.60 0.60 0.60 0.60 0.60 0.60 0.60 0.60 0.60 Transit 143.60 144.00 144.00 144.00 144.87 144.87 153.37 153.37 153.37 157.37 Golf 8.00 8.00 8.00 8.00 8.00 8.00 8.00 8.00 8.50 8.50 Total FTEs business-type activities 366.05 367.80 370.90 372.40 376.27 376.77 385.27 386.27 388.77 393.77 Internal Service: Motor vehicle department 26.00 26.00 24.00 24.00 22.13 22.13 21.63 22.63 22.63 23.13 Telecommunications 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 4.00 4.00 Total FTEs internal services 29.00 29.00 27.00 27.00 25.13 25.13 24.63 25.63 26.63 27.13
Total City FTEs 1,208.25 1,198.40 1,190.60 1,191.33 1,183.33 1,183.53 1,163.73 1,183.33 1,192.33 1,197.83 Annual percent change total city 2.37% -0.82% -0.65% 0.06% -0.67% 0.02% -1.67% 1.68% 0.76% 0.46% * Total ending authorized positions per the city's budget. Note: The costs associated with internal service fund employees are divided between governmental and business-type activities in the government-wide statements. Comments: 1 In 2009, Water/Sewer Utilities added 13 FTEs to support increased maintenance requirements and increased construction projects. The general government labor budget was reduced by 6.4 FTEs (2010), 8.9 FTEs (2011), 7 FTEs (2013), and 7.0 FTEs (2014) largely through attrition and elimination of vacant positions. In 2015, as a result of the structural deficit reduction effort, the City eliminated 15.65 FTEs from the general government labor budget and 0.5 FTE from the non-general government funds. In 2016, 9 FTEs were added to support the Community Streets Initiative Program, 3 FTEs were added for succession planning, and 4FTEs to handle increased workloads. In 2017, 2 FTEs added to Utilities for increased maintenance requirements, 3 Streets & 1 Telecom FTEs added to reduce outside contractor/consultant costs, 1 IT FTE added to reduce overtime costs. For 2018, a new department "Community, Planning, Economic Development" is replacing what was reported as "Planning" in prior years and incorporates the departments of "Economic Development" and "Neighborhoods/comm svcs". "Communications & Marketing" department is being created. These two new departments represent a reorganization of existing staff and departments to better align resources with priorities, and centralize functions. 7 FTE Firefighters/EMTS transferred from Fire to Emergency Medical Services. 4 FTE added to Transit (2 bus operators, a security officer, and admin assistant).
Source: City Budget Department
PAGE 176 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT CITY OF EVERETT STATISTICAL SECTION
STAT 16 Page 1 of 3
OPERATING INDICATORS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS
Estimate Function/Program 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 General government services Municipal Court Total filings (infraction, parking, criminal) 43,529 41,969 36,044 26,811 23,833 26,548 21,215 18,860 28,207 28,750 Finance Active business license accounts 10,000 8,449 8,075 8,477 8,273 8,324 9,800 9,681 10,228 10,500 Public information requests 550 703 750 836 836 837 635 789 965 980 Police Case Reports Written 25,821 26,874 26,874 25,516 26,010 26,124 22,309 17,828 17,795 18,684 Traffic violations 10,291 13,082 13,082 10,787 10,745 11,709 9,335 7,382 6,631 6,899 Parking violations 27,000 22,215 22,215 12,242 9,660 12,248 10,828 11,280 18,931 22,000 Auto thefts 678 1,141 1,141 990 1,034 1,089 940 997 967 984 Financial crimes investigated 1,530 1,266 1,266 1,120 1,198 987 768 717 279 248 Computer forensics 33 36 38 30 35 17 28 37 24 20 Fire/EMS Fire/EMS alarm totals 18,381 17,733 17,851 18,682 19,537 21,351 21,939 23,405 23,934 24,700 Structure fires 92 101 88 109 100 95 105 145 110 115 Mobile vehicle/property fires 82 63 58 51 51 68 59 43 59 65 Outdoor and other fires 210 227 228 249 212 320 571 299 423 445 Inspections 1,556 1,993 1,993 2,017 2,504 1,694 2,150 2,000 2,691 2,745 Engineering & construction services Permits issued 4,500 4,400 4,041 3,800 5,553 6,367 6,568 7,525 7,525 7,000 Inspections 12,000 9,800 9,600 9,100 8,900 8,745 12,829 12,684 12,684 19,000 Transportation Street patching/paving (in sq ft) 255,312 137,600 176,280 157,280 349,280 463,760 245,240 88,200 275,360 331,440 Curbs and gutters replaced (in lineal ft) 5,000 4,106 5,189 5,114 8,850 5,893 3,722 3,561 3,268 3,700 Sidewalk/streets replaced (in sq ft) 89,000 80,618 84,334 101,698 192,210 81,080 80,761 82,905 103,989 100,000
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 177 CITY OF EVERETT STATISTICAL SECTION
STAT 16 Page 2 of 3
OPERATING INDICATORS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS
Estimate Function/Program 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Community services Planning Code enforcement actions 1,800 1,180 1,016 926 926 1,074 1,283 1,275 1,337 1,496 Senior Center Senior meal program attendance 22,626 16,833 18,152 17,389 15,257 13,149 11,984 12,121 14,851 15,403 Animal Services Adoptions 1,995 2,160 2,046 1,583 1,391 1,704 1,620 1,861 1,928 2,551 Owner releases 2,939 2,874 2,407 1,926 1,874 1,677 1,590 1,686 1,516 1,704 Library Total number of materials circulated 1,060,000 1,088,624 1,069,841 1,071,800 1,021,143 1,008,079 1,050,000 1,175,000 1,121,734 1,014,182 Number of reference questions asked 72,622 77,113 56,822 65,792 64,978 61,212 70,000 60,928 62,116 61,199
Culture and recreation Athletic program participants 35,340 30,159 32,340 30,910 32,723 32,908 31,808 31,708 31,184 15,936 Recreational swim participants 74,278 74,886 61,515 63,300 59,897 52,647 47,301 42,997 44,037 48,355 Jetty Island visitors 47,792 45,497 45,497 46,549 43,753 39,777 35,468 37,268 39,675 30,596 Theater attendance 82,500 82,279 78,620 68,387 66,061 67,234 69,896 68,258 74,005 72,000 Water/Sewer Water New connections 59 109 **1,247 41 125 152 190 225 376 184 Water main breaks 21 14 39 16 27 21 19 24 35 16 Average daily consumption (mgd) - finished water 54.4 48.7 48.8 49.0 49.4 49.6 52.7 49 54 53 Peak daily consumption (mgd) - finished water 115.0 88.0 75.0 77.0 82.4 85.0 98.4 83 63 63 Treated water delivered (mg) 19,850 17,255 17,065 17,111 18,031 18,110 19,228 18,010 19,715 194,266 Untreated water delivered (mg) 10,044 10,781 6,611 2,179 0 0 0 0 0 0 Water customers served by system 557,000 557,000 557,000 557,000 560,000 566,000 563,000 603,000 615,000 615,000
Sewer Average daily sewage treated (mg) 18 19 19 21 18 18 18 25 19 19 Sewage treated (mg) 6,706 7,056 7,145 7,609 6,455 7,310 6,533 7,180 6,929 6,892 Number of sanitary sewer customers within city 23,211 23,185 23,269 23,303 23,337 23,464 23,662 23,810 24,146 24,374
** This number includes 1,180 new connections resulting from the annexation of a portion of Mukilteo Water District customers.
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STAT 16 Page 3 of 3
OPERATING INDICATORS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS
Estimate Function/Program 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Parking (Everpark Garage) Average monthly parkers 480 409 353 348 357 350 367 370 370 370 Average daily parkers 518 209 253 300 166 157 165 167 166 167
Transit Fixed route unlinked passenger trips (per svc hr) 20.9 17.6 19.2 20.3 20.0 19.9 19.2 17.7 18.0 16.6 Paratransit unlinked passenger trips (per svc hr) 2.5 2.6 2.4 2.4 2.4 2.3 2.3 2.2 2.5 2.5 Total fixed route miles 1,590,849 1,798,223 1,662,047 1,550,866 1,345,855 1,340,148 1,362,140 1,421,728 1,455,095 1,463,519 Fixed route passengers 2,495,005 2,289,587 2,334,798 2,285,985 2,004,062 1,971,113 1,944,871 1,849,998 1,902,840 1,800,312 Paratransit passengers 108,952 113,581 119,232 108,846 113,008 120,739 121,165 104,604 122,427 129,011
Golf Total rounds at Walter E. Hall course 65,369 64,269 56,587 57,555 56,196 52,089 54,629 52,267 49,093 53,815 Total rounds at Legion Memorial course 63,013 61,952 57,024 59,993 59,466 57,418 60,704 57,109 54,673 58,106
Sources: Various city departments and the City Budget.
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 179 CITY OF EVERETT STATISTICAL SECTION
STAT 17 Page 1 of 2 CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS
Function/Program 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Police Police stations 2 2 2 2 2 2 2 2 2 2 Police vehicles 169 178 180 177 177 177 177 183 183 185 Harbor patrol boats 3 3 3 3 3 3 4 2 2 2 Fire/EMS Fire stations 6 6 6 6 6 6 6 6 6 6 Fire engines (pumpers) 11 7 7 7 9 9 9 11 11 11 Aerial ladder trucks 2 2 2 1 3 3 3 3 3 3 Emergency Medical Units 9 9 9 3 4 4 8 8 7 7 Transportation Paved streets (in miles) 321 321 337 337 337 337 337 337 338 338 Other Improved streets (in miles) 28 28 28 28 28 28 28 28 28 28 Signalized intersections 177 178 180 183 183 176 177 177 177 178 Street lights 6,511 6,511 6,511 6,540 6,540 6,900 6,900 6,921 6,964 6,970
Community services Animal shelter 1 1 1 1 1 1 1 1 1 1 Senior center 1 1 1 1 1 1 1 1 1 1
Library Branches 2 2 2 2 2 2 2 2 2 2 Bookmobile 1 1 1 1 1 1 0 0 0 0
Culture and recreation Number of parks/playgrounds 48 48 48 48 48 43 43 43 43 43 Total acreage owned/managed by City 1,600 1,600 1,600 1,600 1,600 1,600 1,600 1,600 1,600 1,600 Public swimming pool 1 1 1 1 1 1 1 1 1 1
PAGE 180 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT CITY OF EVERETT STATISTICAL SECTION
STAT 17 Page 2 of 2 CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS
Function/Program 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Water/Sewer Water Water mains (miles) 480 494 496 496 496 496 496 491 507 507 Fire hydrants 3,119 3,278 3,279 3,279 3,279 3,328 3,328 3,458 3,458 3,458 Water storage capacity (within city)(in mg) 85 78 78 78 78 54 53 53 54 50 Sewer Sanitary sewers (miles) 330 334 334 334 334 336 339 342 343 344 Storm sewers (miles) 254 259 290 290 290 292 334 305 265 265 Treatment capacity (mgd) 36 35 35 35 35 36 40 40 40 40 Parking Everpark parking garage 1 1 1 1 1 1 1 1 1 1
Transit Number of Buses 49 49 49 49 49 47 47 42 42 44 Number of Paratransit vehicles 22 22 22 26 28 28 28 28 27 26 Transit stations 3 3 3 3 3 3 3 3 3 3 Golf Municipal golf courses 2 2 2 2 2 2 2 2 2 2
Sources: Various city departments and the City Budget.
2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE 181 CITY OF EVERETT STATISTICAL SECTION
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