CITY OF RICHLAND COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Fiscal Year Ended December 31, 2017 Prepared by: Administrative Services Department, Finance Division 505 Swift Blvd., PO Box 190 Richland, WA 99352 Phone: (509) 942-7390 Fax: (509) 942-7688 www.ci.richland.wa.us CITY OF RICHLAND, WA TABLE OF CONTENTS COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Fiscal Year Ended December 31, 2017 TABLE OF CONTENTS INTRODUCTORY SECTION Letter of Transmittal ............................................................................................................................................... 3 GFOA Certificate of Achievement for Excellence in Financial Reporting ...................................................... 9 Organization Chart ............................................................................................................................................... 10 Richland City Council .......................................................................................................................................... 11 Elected and Administrative Officials ................................................................................................................. 12 FINANCIAL SECTION Independent Auditor’s Report ............................................................................................................................ 15 Management’s Discussion and Analysis........................................................................................................... 21 Basic Financial Statements: Government-wide Financial Statements: Statement of Net Position ...................................................................................................................... 40 Statement of Activities ........................................................................................................................... 42 Fund Financial Statements: Balance Sheet – Governmental Funds ................................................................................................. 44 Reconciliation of the Balance Sheet of Governmental Funds to the Government-wide Statement of Net Position ............................................................................................................... 45 Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds .. 46 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds to the Government-wide Statement of Activities ................................. 47 Statement of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual - General Fund ................................................................................................................................... 48 Statement of Net Position – Proprietary Funds .................................................................................. 50 Statement of Revenues, Expenses and Changes in Net Position - Proprietary Funds .................. 52 Statement of Cash Flows – Proprietary Funds ................................................................................... 53 Statement of Fiduciary Net Position – Fiduciary Funds ................................................................... 54 Statement of Changes in Fiduciary Net Position – Fiduciary Funds .............................................. 55 Notes to the Financial Statements ............................................................................................................... 57 Required Supplementary Information: Schedule of Funding Progress and Employer Contributions for the Other Post-Employment Benefits Plan, the Fire and Police OPEB and Pension Plans, and the City’s Proportional Share of State- Sponsored Pension Plans ..................................................................................................................... 121 Combining and Individual Fund Statements and Schedules: Combining Balance Sheet – Nonmajor Governmental Funds ............................................................... 130 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Governmental Funds ....................................................................................................... 131 Combining Balance Sheet – Nonmajor Special Revenue Funds ........................................................... 134 i CITY OF RICHLAND, WA TABLE OF CONTENTS Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Special Revenue Funds ..................................................................................................... 136 Schedules of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual Streets Fund ........................................................................................................................................... 138 Transportation Benefit District Fund ................................................................................................. 139 Park Reserve Fund ............................................................................................................................... 140 Industrial Development Fund ............................................................................................................ 141 Criminal Justice Fund .......................................................................................................................... 142 PFD Facility Contingency Fund ......................................................................................................... 143 Criminal Justice Sales Tax Fund ......................................................................................................... 144 BCES Operations Fund ........................................................................................................................ 145 Hotel/Motel Tax Fund ........................................................................................................................ 146 Special Assessment Lodging Tax Fund ............................................................................................. 147 CDBG Fund ........................................................................................................................................... 148 HOME Fund .......................................................................................................................................... 149 Combining Balance Sheet - Debt Service Funds ...................................................................................... 152 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Debt Service Funds ............................................................................................................................... 154 Combining Balance Sheet – Capital Projects Funds ................................................................................ 158 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Capital Projects Funds ......................................................................................................................... 159 Combining Statement of Net Position – Nonmajor Enterprise Funds ................................................. 162 Combining Statement of Revenues, Expenses and Changes in Fund Net Position - Nonmajor Enterprise Funds ................................................................................................................ 163 Combining Statement of Cash Flows – Nonmajor Enterprise Funds ................................................... 165 Combining Statement of Net Position – Internal Service Funds ........................................................... 168 Combining Statement of Revenues, Expenses and Changes in Net Position - Internal Service Funds ......................................................................................................................... 170 Combining Statement of Cash Flows – Internal Service Funds ............................................................ 172 Combining Statement of Net Position – Pension Trust Funds .............................................................. 176 Combining Statement of Changes in Net Position – Pension Trust Funds ......................................... 177 Combining Statements of Changes in Assets and Liabilities – Agency Funds ................................... 178 STATISTICAL SECTION Financial Trends Information Table 1 – Tax Revenues by Source, Governmental Funds ..................................................................... 184 Table 2 – Changes in Fund Balances, Governmental Funds .................................................................. 185 Table 3 – Net Position ................................................................................................................................. 186 Table 4 – Changes in Net Position ............................................................................................................. 187 Table 5 – Fund Balances, Governmental Funds ...................................................................................... 190 Revenue Capacity Information Table 6 – Property Tax Levies and Collections ........................................................................................ 191 Table 7 – Assessed and Actual Value of Taxable Property .................................................................... 192 Table 8 – Direct and Overlapping