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HomeMy WebLinkAbout2007 CAFRY ♦a\=LL /1 CITY OF RENTON 2007 COMPREHENSIVE ANNUAL FINANCIAL REPORT For Year Ended December 31, 2007 Michael E. Bailey, CPA, Administrator Linda M. Parks, CPA, CGFM, Fiscal Services Director Finance & Information Services City of Renton 1055 South Grady Way Renton, Washington 98057 (425) 430-6858 Website: www.rentonwa.gov ACKNOWLEDGEMENTS Prepared by the Finance Division of the Finance & Information Services Department Finance & IS Administrator Michael E. Bailey, CPA Fiscal Services Director Linda M. Parks, CPA, CGFM Accounting Staff Linda Dixon, Finance Analyst III Jill Masunaga, Senior Finance Analyst Tracy Schuld, Accounting Supervisor Vidya Vinod, Finance Analyst III Tina Hemphill, Finance Analyst III Hai Nguyen, Finance Analyst 11 Nancy Violante, Financial Services Manager Cindy Zinck, Financial Services Manager Administrative Assistant Mary Roy Print & Mail Coordinator Karl Hurst Form/Graphic Technician Beth Haglund TABLE OF CONTENTS DECEMBER 31, 2007 ITEM PAGE INTRODUCTORY SECTION Letterof Transmittal............................................................................................................................... 1-1 2006 Comprehensive Annual Financial Report Award............................................................................1-7 Corporate Organization Structure & Reporting Relations........................................................................1-8 FINANCIAL SECTION IndependentAuditor's Report.............................................................................................................2-1 Management Discussion and Analysis.................................................................................................. 3-1 Basic Financial Statements: Government -wide Financial Statements: Statementof Net Assets.................................................................................................................... 4-1 Statementof Activities...................................................................................................................... 4-2 Fund Statements Government Fund Financial Statements: BalanceSheet.............................................................................................................................4-4 Reconciliation of Balance Sheet to the Statement of Net Assets .................................................. 4-8 Statement of Revenues, Expenditures and Changes in Fund Balances ......................................... 4-9 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Government Funds to the Statement of Activities ..................................... 4-11 Proprietary Fund Financial Statements: Statementof Net Assets............................................................................................................ 4-12 Statement of Revenues, Expenses, and Changes in Fund Balances ............................................ 4-14 Statementof Cash Flows.......................................................................................................... 4-15 Fiduciary Fund Statements: Statement of Fiduciary Net Assets............................................................................................ 4-17 Statement of Changes in Fiduciary Net Assets.......................................................................... 4-18 Notes to Financial Statements: Note 1: Significant Accounting Policies......................................................................................4-19 Note 2: Compliance and Accountability...................................................................................... 4-29 Note 3: Deposits and Investments............................................................................................... 4-31 Note4: Property Taxes...............................................................................................................4-33 Note 5: Capital Assets and Depreciation..................................................................................... 4-35 Note6: Pensions......................................................................................................................... 4-37 Note 7: Other Post Employment Benefits.................................................................................... 4-47 Note8: Contingencies................................................................................................................ 4-47 Note9: Risk Management.......................................................................................................... 4-48 Note 10: Interfund Transactions................................................................................................... 4-50 Note11: Net Assets......................................................................................................................4-52 Note 12: Prior Year Restatements.................................................................................................4-53 Note13: Short Term Debt............................................................................................................ 4-53 Note14: Long Term Debt............................................................................................................ 4-54 Note 15: Deferred Charges in Proprietary Funds........................................................................... 4-57 Note16: Segment Information...................................................................................................... 4-57 Note17: Joint Ventures................................................................................................................ 4-57 Note18: Subsequent Events......................................................................................................... 4-58 Required Supplemental Information Other than MD&A Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget to Actual GeneralFund.................................................................................................................................... 5-1 Actuarial Valuation of Firefighters' Pension Fund............................................................................. 5-2 TABLE OF CONTENTS DECEMBER 31, 2007 ITEM PAGE Combining Statements Non -Major Fund Descriptions...........................................................................................................6-1 CombiningBalance Sheet.................................................................................................................6-5 Combining Statement of Revenues, Expenditures and Changes in Fund Balances ........................... 6-10 Schedule of Revenues, Expenditures and Changes in Fund Balances Budgetto Actual............................................................................................................................. 6-15 Combining Statement of Net Assets, Non -Major Enterprise Funds..................................................6-27 Combining Statement of Revenues, Expenses and Changes in Fund Net Assets, Non -Major Enterprise Funds.................................................................................................... 6-29 Statement of Cash Flows, Non -Major Enterprise Funds.................................................................. 6-30 Combining Statement of Net Assets, Internal Service Funds........................................................... 6-32 Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets, InternalService Funds.............................................................................................................. 6-34 Combining Statement of Cash Flows, Internal Service Funds.......................................................... 6-35 Statement of Changes in Assets and Liabilities Agency Fund — Special Deposit .............................. 6-37 Statistical Section Statistical Section Description...........................................................................................................7-1 Financial Trends: Table 1: Net Assets by Component................................................................................................ 7-3 Table2: Changes in Net Assets...................................................................................................... 7-4 Table 3: Fund Balance of Government Funds................................................................................. 7-6 Table 4: Changes in Fund Balances of Government Funds............................................................. 7-8 Table 5: General Government Tax Revenue by Source................................................................ 7-10 Revenue Capacity: Table 6: Principal Property Tax Payers........................................................................................ 7-11 Table 7: Assessed Value Taxable Property................................................................................... 7-12 Table 8: Property Tax Rates Direct and Overlapping Governments .............................................. 7-14 Table 9: Property Tax Levies and Collections.............................................................................. 7-16 Table 10: Sales Tax Collections by Sector..................................................................................... 7-18 Debt Capacity: Table 11: Ratios of Outstanding Debt by Type............................................................................... 7-20 Table 12: Legal Debt Margin Information...................................................................................... 7-22 Table 13: Ratios of General Bonded Debt Outstanding.................................................................. 7-24 Table 14: Direct and Overlapping Governmental Activities Debt ................................................... 7-25 Table 15: Pledged -Revenue Coverage for Water and Sewer and Golf Course Revenue Bonds........ 7-26 Demographic and Economic Information: Table 16: Demographic and Economic Statistics............................................................................ 7-27 Table 17: Principal Employers.......................................................................................................7-28 Operating Information: Table 18: Full Time Equivalent City Government Employees by Function ..................................... 7-30 Table 19: Operating Indicators by Function................................................................................... 7-32 Table 20: Capital Assets Statistics by Function.............................................................................. 7-34 iv CITY OF RENTON June 1, 2008 Honorable Denis Law, Mayor Members of the Renton City Council Residents of Renton City of Renton, Washington RE: THE 2007 COMPREHENSIVE ANNUAL FINANCIAL REPORT Dear Mayor Law, City Councilmembers, and Residents of Renton: Denis Law, Mayor We are pleased to present the City's Comprehensive Annual Financial Report for the year ended December 31, 2007. We publish this financial statement in conformity with generally accepted accounting principles (GAAP). It has been audited in accordance with generally accepted auditing standards by the Washington State Auditor's Office. The report includes our own representations concerning the finances of the City of Renton. Consequently, we assume full responsibility for the completeness and reliability of all of the information presented in this report. To provide a reasonable basis for making these representations, we have established a comprehensive internal control framework that is designed both to protect the City of Renton's assets from loss, theft or misuse, and to maintain sufficient reliable information for the preparation of the City's financial statements in conformity with GAAP. Because the cost of internal controls should not outweigh the 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. As management, we attest that to the best of our knowledge and belief that this financial report is complete and reliable in all material aspects. These financial statements have been audited by the Washington State Auditor's Office. The goal of this independent audit was to provide reasonable assurance that the City's financial statements for the fiscal year ended December 31, 2007, are free of material misstatements. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in our financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. Based upon the audit, the independent auditor concluded that there was a reasonable basis for issuing an unqualified opinion that the City of Renton's financial statements for the fiscal year ended December 31, 2007, are fairly presented in conformity with GAAP. The State Auditor's report is included as the first component of the financial section of this report. 1055 South Grady Way - Renton, Washington 98057 - (425) 430-6850 RENTON AHEAD OF THE CURVE 2007 Comprehensive Annual Financial Report City of Renton, Washington The independent audit of the City of Renton'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 the financial statements, but also the City's internal controls and compliance to legal requirements with special emphasis on internal controls and legal requirements involving the administration of federal grant programs. The City's Single Audit Report is issued separately and is available upon request or directly from the Washington State Auditor. Another State mandate requires the Washington State Auditor's Office to perform additional tests of compliance with State laws and regulations as required by 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, its own ordinances and orders, and the requirements of the State Auditor's Office. The City's State compliance report is also available upon request and from the Washington State Auditor. GAAP requires 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 RENTON AND ITS SERVICES The City of Renton was incorporated on September 6, 1901. Located at the south end of Lake Washington, our City borders the City of Seattle to the north. We currently have a land area of 18.19 square miles. We have over 1,160 acres of parks that includes 28 active parks. As presented by the Washington State Office of Financial Management, our 2007 population was 60,290. The City of Renton has a strong mayor form of government with an appointed Chief Administrative Officer. The Mayor is independently elected to a four-year term. The Mayor's job is to manage and implement the policies established by the seven -member City Council. The Council establishes policies, appropriates monies through the budget process, and adopts local laws through ordinances. Each Councilmember serves a four-year term and they are elected on a staggered two-year cycle. Both the Council and the Mayor are elected on a non-partisan basis. 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, water, wastewater, stormwater, street construction and maintenance, planning and zoning, libraries, parks and recreation, municipal court and general administrative services. The City operates four utilities: water, sewer, surface water, and solid waste. These are operated very similar to a private business where the revenues from rates and other direct sources must pay for the operational, capital, and long-term debt costs. The City has its own water rights and most of the water provided to its customers comes from its own groundwater supply. The City's sewage is treated by King County, but the City is responsible for transferring and maintaining the 1-2 Introduction 2007 Comprehensive Annual Financial Report City of Renton, Washington system to King County. The City bills Renton residents a monthly fee for the cost of sewer treatment performed by King County. The City also operates a golf course. All costs of the Maplewood Golf Course are paid from green fees, driving range fees, revenue from the restaurant vendor, and other miscellaneous revenue. The golf course has short-term operational costs, an active capital maintenance program, and annual debt service payments for the construction of the clubhouse and the driving range. One operation the City has, which is somewhat unusual for cities our size, is its airport. The Renton Municipal Airport is used by small private plane operators, a floatplane tourist company, and Boeing initiates its maiden 737 flights from this airport. The operational costs of the airport are paid from rental fees. Much of the major capital projects are paid by fees or with Federal Aviation Administration grants. The City of Renton complies with the Budgeting, Accounting, and Reporting System (BARS) as delineated by the Office of the State Auditor as authorized under RCW 43.09.200 and 43.09.230. State law also mandates timely submission of annual financial reports to the State Auditor for annual independent audits. The City of Renton's financial system incorporates financial and administrative controls to ensure the safeguarding of assets and reliability of financial reports. These controls are designed to provide reasonable assurance that transactions are executed in accordance with management authorization and are recorded in conformity with GAAP. They also provide accountability of and control over assets and obligations, and sufficient reporting and review exist to provide adequate information for analysis and comparability of data. The City of Renton maintains budgetary controls to ensure compliance with legal provisions embodied in the annual budget. All activities are appropriated through the annual budget process and published in the City's Annual Budget document. The City Council must adopt an ordinance to increase or decrease total appropriations in a Fund. The Mayor has the authority to move appropriations within a Fund. A thorough discussion of the City's accounting policies can be found under the Summary of Significant Accounting Policies in the Notes to the Financial Statements. FACTORS AFFECTING FINANCIAL CONDITION The information presented in the financial statements is a perspective of past activities that influence the City's financial condition. The following information is presented to place that information in context with the general economy. Economic Condition and Outlook In Mayor Denis Law's 2008 Budget Message — Building for the Future address he highlighted: Introduction 1-3 2007 Comprehensive Annual Financial Report City of Renton, Washington • "The annexation of the Benson Hill area was approved by its citizens. This will bring 17,000 new residents into the city — about 30% of our current population in March 2008." • "The redevelopment of 60 acres of industrial land into a mixed use development known as "The Landing" is well underway. A few of the anchor stores are opening with the 900 units of housing are well underway and dozens of additional businesses are due to open in 2008." • "The local economy continues to grow. New housing, retail, and other business development continues to equal or exceed the rates of growth for the Puget Sound region as a whole." • "Burlington Northern Railway is currently replacing all four bridges on their lines through the heart of the City to make way for continued delivery of parts for The Boeing Company's 737 assembly." • Sales tax trends emerged early in the year and continued for balance of 2007 ahead of 2006 by 8.83%. • The construction category indicates an increase of 45% over 2006 which include several construction projects in town, including roadway and rail projects. UPDATE FROM BUDGET DOCUMENT Outlook The total 2008 adopted budget is $234,638,924, of which $11,706,704 is related to serving the Benson Hill annexation. The 2008 General Government Budget (the City's discretionary funds) totals $97,603.437, which is 16.8% larger than 2007. Without the Benson Hill annexation funding, the 2008 budget increase is just 3.9% over 2007's budget. The rest of the budget provides for construction ($63,351,567) and other operating funds (such as utilities, airport, and golf course - $73,603,311). There are no tax increases in this budget and the property tax levy rate will decrease from $2.82 to $2.56 per $1,000 of assessed property valuation. Even with this tax rate decrease, the City's property tax revenues will grow by 5% as a result of new construction being added to the tax rolls. Utility rates and golf green fees were increase by the City Council in the fall of 2007, with the increases effective in 2008. Along with the increased rates, the Council also approved changes to the assistance available to low-income senior citizen households and requested the review of additional changes that could expand this assistance. The 2008 budget approved the planning for a badly needed maintenance facility for our Parks Division. The facility, to be located on land purchased from King County, is estimated to cost about $12.5 million and will be paid for with money saved over the years for this purpose. The budget includes a change in the service model for fire and emergency services. The addition of four firefighters will allow the department to put an additional aid car in service and have adequate personnel to staff both the aid cars and the fire engines in each station. This will result in better service to the public. In addition, the department will see additional staffing as a result 1-4 Introduction 2007 Comprehensive Annual Financial Report City of Renton, Washington of the annexation of the Benson Hill area. We are working on a contract with the fire district and will provide fire and emergency services to those residents. The Police Department will add vehicles, equipment and personnel to serve the Benson Hill area. The creation of a new police cadet program will help expose interested young people to police work while also making the cadets available for routine tasks in the department. Cameras will be installed at certain intersections in early 2008 to identify those motorists who drive through on a red light. This program is intended to reduce the number of collisions in these intersections. The revenue resulting from citations will help pay for additional court staff and related costs. Source: 2008 Adopted Budget Message — Building for the Future Letter by: Mayor Denis Law OTHER INFORMATION Cash Management The City has adopted an Investment Policy that states that the primary objectives of investment management, in priority order, are safety, liquidity, and return on investment. The Investment Policy reflects provisions in state statute and authorizes investments in obligations with: the US Government or its agencies; banker's acceptances; certificates of deposit issued by public depositories in the State of Washington; the Washington State Local Government Investment Pool; and any other investment authorized by law for taxing districts in the State of Washington. The City has a Fire Pension Fund that is managed by an Oversight Board with members including Firefighters, the Mayor, and one Councilmember. Their investment policies reflect the long-term obligations of investing these funds, which are invested primarily in US Treasury strips. In 2007, the independent actuarial study estimates a (negative) net pension obligation of ($927,201), and is included, as an asset in the City of Renton's Government -wide Financial Statements. Risk Management The City belongs to the Washington Cities Insurance Authority (WCIA). The WCIA is a consortium of Washington State cities that purchases excess coverage in large blocks, thus leveraging the market and risk across a large base. It has a professional staff, but operates with an Oversight Board comprised of City representatives. This Board meets monthly. In most cases, the City of Renton has a variety of insurance deductibles that range from $25,000 to a maximum of $350,000. The City maintains a self-insurance program for health and dental coverage for City employees and dependents. The City purchases excess medical coverage from Berkley Risk for cases that exceed $350,000. The City also purchases life and disability insurance from various healthcare insurance providers. Awards and Acknowledgements The City has a long history of superior achievements in the preparation of its Comprehensive Annual Financial Reports through the peer review program conducted by the Government Introduction 1-5 2007 Comprehensive Annual Financial Report City of Renton, Washington Finance Officers Association. The dedicated staff of the Finance Division work hard each day to ensure that the City's financial records always displays information in conformance with legal parameters. All members of the division are to be commended for their consistent dedication to excellence in local government finance. In particular, Nancy Violante, produced a significant portion of this year's annual financial report. Linda Dixon, Tina Hemphill, Jill Masunaga, Hai Nguyen, and Vidya Vinod contributed significantly by preparing cash flow statements, the statistical section, and other elements of this report. Other contributors included: Kristi Rowland, Tracy Schuld, and Cindy Zinck. The actual production could not be accomplished without the technical expertise of Mary Roy, Karl Hurst, and Beth Haglund. We are pleased with the comprehensive content and quality of this financial report knowing that the citizens of Renton can rely on this report as the definitive assessment of all City financial operations. Sincerely, Michael E. Bailey, CPA Finance & Information Services Administrator Linda M. Parks, CPA Fiscal Services Director 1-6 Introduction Certificate of Achievement for Excellence in Financial Presented to City of Renton Washington For its Comprehensive Annual Financial Report for the Fiscal Year Ended December 31, 2006 A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers Association of the United States and Canada to government units and public employee retirement systems whose comprehensive annual .financial reports (CAFRs) achieve the highest standards in government accounting and financial reporting. MAiGS CM President Executive Director Introduction 1-7 City of Renton Corporate Organization Structure RENTON CITIZENS CITY COUNCIL MAYOR MUNICIPAL COURT Marcie Palmer, President Denis Law JUDGE Randy Corman, Don Persson 425-430-6500 Terry Jurado Terri Briere, King Parker 425-430-6550 Greg Taylor, Rich Zwicker 425-430-6501 CHIEF ADMINISTRATIVE OFFICER COMMUNICATIONS Jay Covington Preeti Shridhar, Director 425-430-6500 425-430-6500 COMMUNITY SERVICES Terry Higashiyama, Administrator 425-430-6600 Facilities Peter Renner, Director Parks Leslie Betlach, Director Recreation Jerry Rerecich, Director Human Services Karen Bergsvik, Manager Library Bette Anderson, Director Renton History Museum Elizabeth Stewart, Manager Community Resources and Events POLICE Kevin Milosevich, Chief 425-430-7503 Operations/Support Tim Troxel, Deputy Chief Patrol Operations Special Operations Patrol Services Investigations Administrative Services Staff and Auxiliary Services PLANNING/ BUILDING/ PUBLIC WORKS Gregg Zimmerman, Administrator 425-430-7394 Development Services Neil Watts, Director Maintenance Services Michael Stenhouse, Director Transportation Systems Peter Hahn, Deputy P/B/PW Administrator Utility Systems Lys Hornsby, Director FIRE AND EMERGENCY SERVICES I. David Daniels, Chief/ Administrator 425-430-7501 Response Operations Mark Peterson Deputy Fire Chief Safety and Support Services Robert Van Horne Deputy Fire Chief Community Risk Reduction Chuck Duffy Deputy Fire Chief I ECONOMIC DEVELOPMENT NEIGHBORHOODS, AND STRATEGIC PLANNING Alex Pietsch, Administrator 425-430-6580 Economic Development Suzanne Dale Estey, Director Neighborhoods Strategic Planning HUMAN RESOURCES AND RISK MANAGEMENT Michael Webby, Administrator 425-430-7650 Human Resources Civil Service Commission Risk Management ADMINISTRATIVE, JUDICIAL AND LEGAL SERVICES Marty Wine, Assistant CAO 425-430-6500 Mayor's Office City Clerk/Cable Manager Bonnie Walton, City Clerk Court Services Joe McGuire, Director Hearing Examiner Fred Kaufman, Hearing Examiner City Attorney Warren Barber Fontes, P.S. FINANCE AND INFORMATION SERVICES Michael Bailey, Administrator 425-430-6858 Finance Linda Parks, Fiscal Services Director Information Services George McBride, IS Director Print and Mail Services Washington State Auditor Brian Sonntag INDEPENDENT AUDITOR'S REPORT July 16, 2008 Mayor and City Council City of Renton Renton, Washington We have audited the accompanying financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of Renton, King County, Washington, as of and for the year ended December 31, 2007, which collectively comprise the City's basic financial statements, as listed in the table of contents. These financial statements are the responsibility of the City's management. Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of Renton, King County, Washington, as of December 31, 2007, and the respective changes in financial position and, where applicable, cash flows thereof, for the year then ended in conformity with accounting principles generally accepted in the United States of America. The management's discussion and analysis on pages 3-1 through 3-17, budgetary comparison information on pages 5-1 and pension trust information on page 5-3 are not a required part of the basic financial statements but are supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. Our audit was performed for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The accompanying information listed as combining statements on pages 6-1 through 6-37 is presented for purposes of additional 10 Insurance Building, PO Box 40021.Olympia, Washington 98504-0021 • (360) 902-0370 • TDD Relay (800) 833-6388 s FAX (360) 753-0646 • http://www.sao.wa.gov analysis and is not a required part of the basic financial statements. This information has been subjected to auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. The information identified in the table of contents as the Introductory and Statistical Sections is presented for purposes of additional analysis and is not a required part of the basic financial statements of the City. Such information has not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion on it. Sincerely, BRIAN SONNTAG, CGFM STATE AUDITOR 2007 Comprehensive Annual Financial Report City of Renton, Washington MANAGEMENT'S DISCUSSION AND ANALYSIS The City of Renton's discussion and analysis provides a narrative overview of the City's financial activities for the fiscal year ended December 31, 2007. The intent of the discussion and analysis is to review the City's financial performance as a whole. This Management's Discussion and Analysis (MD&A) combined with the Transmittal Letter, the Financial Statements, and the Notes to the Financial Statements represent the complete 2007 financial activities for the City of Renton. These are all intended to help the reader understand the City's significant financial issues. This MD&A provides an overview of the City's financial records. The data in this financial report also identifies any material deviations from the financial plan and the adopted annual budget. Finally, the intent of the MD&A and other financial information is to isolate and identify individual fund issues or concerns. FINANCIAL INFORMATION Since 2003, the City of Renton prepared its financial records in accordance to what is known as Government Accounting Standards Board Statement 34 (GASB 34) with a phase in of the infrastructure component in 2004. The City's general Government -wide Financial Statements were prepared on the full accrual basis of accounting in conformity with Generally Accepted Accounting Principles (GAAP). The City's Fund Financial Statements for its major and non -major governmental funds were prepared on the modified accrual basis of accounting in conformity with GAAP. The City's major and non -major enterprise funds, internal service funds, and pension funds were accounted for on the accrual basis. The City of Renton, along with all cities, counties, and other governmental entities in Washington, must comply with the Budgeting, Accounting, and Reporting System (BARS) as defined by the Washington State Office of the Auditor (SAO). SAO audits the financial records of all cities and other governmental units within the State. The City of Renton's financial system integrates financial and administrative controls that ensure the safeguarding of assets and the reliability of financial reports. These controls are designed to provide: 1. reasonable assurance that transactions are executed in accordance to management understanding and approval; 2. reasonable assurance that transactions are executed in accordance to GAAP principles; 3. accountability for control of assets and obligations; and 4. assurance that sufficient reporting and review exists to provide adequate information for analysis and comparability of data. Internal control is a high priority for the City. SAO reviews the City's internal controls, and the City receives and takes action on all the recommendations made. Management's Discussion and Analysis 3-1 2007 Comprehensive Annual Financial Report City of Renton, Washington The City maintains strong budgetary controls in order to ensure compliance with legal provisions embodied in the annual appropriated budget as approved by the City Council. The City Council must authorize any budget increase or decrease to any fund. Financial Highlights • The City's total assets as of December 31, 2007, exceeded liabilities by over $507.5 million. • As of December 31, 2007, the City's Governmental Activities reported net assets of $297.4 million. Of this total, $32.1 million is defined as unrestricted and can be used for needs the Mayor and Council deem necessary. These monies are intended to provide a cushion against significant economic downturns in revenues and to maintain sufficient working capital and cash flow to meet daily financial needs. • Investments in capital assets comprise $232.7 million of the $362.1 million in Governmental Activities net assets. • The business type activities have total net assets of $210.1 million. Ninety (90%) percent of this total, $188.5 million, represents the City's investments in capital assets. An unrestricted balance of $17.9 million remains and is used to meet day to day cash flow requirements and to ensure we can meet all obligations of the utilities and other funds if the revenues do not meet expectations. • The City's total outstanding long-term debt as of December 31, 2007, was $93.4 million. Of this amount, $40.4 million are revenue bonds and PWTF loans dedicated to the waterworks projects. Another $985,000 is for outstanding bonds for Senior Housing. These bonds have a special taxing authority. The Golf Course has $2.8 million outstanding in debt service. Employee leave balances total $5.2 million. The balance of $44 million of our debt is dedicated for general governmental purposes, including the purchase of City Hall, the construction of the downtown parking garage and a replacement of a fire station (our share of a regional E-911), Communications Center, and other small projects, including municipal -bonds sold for fire equipment. OVERVIEW OF THE FINANCIAL STATEMENTS This discussion and analysis provides an introduction and overview to the City of Renton's basic financial statements. The basic financial statements are comprised of three components: 1. Government -wide Financial Statements; 2. Fund Financial Statements; and 3. Notes to the Financial Statements. The graphic representation below illustrates the required components of the City's annual financial report and how the required parts are arranged and relate to one another. This illustration helps explain the City's financial presentation in 2007. This graphic representation should be used in conjunction with the following explanations to help guide the reader in understanding the financial condition of the City of Renton. 3-2 Management's Discussion and Analysis 2007 Comprehensive Annual Financial Report Figure 1 REQUIRED COMPONENTS OF THE ANNUAL FINANCIAL REPORT Management Discussion and Analysis (required supplementary information) IC (new) Government -wide Financial Statements (new) Fund Financial Statements (refocused) w� � Notes to the Financial Statements M (expanded/restructured) � .� Required Supplementary F •� � � Information a? (other than MD&A) City of Renton, Washington In addition to the required components shown in Figure 1, the City's annual report also includes other voluntary supplementary information. The most significant section is the Combining Statements. These provide Balance Sheets, Statement of Revenues, Expenditures, and Changes in Fund Balances with Budget to Actual comparisons, Statement of Net Assets, and Cash Flows for all Non -Major Funds. The next section of information, the Statistical Section, provides a ten-year view of the City's Revenue, Expenditures, Debt Obligations, and Debt Capacity, the City's largest taxpayers, and those entities with the largest employment within the City of Renton. This section provides a long- term perspective on the City's economy. BASIC FINANCIAL STATEMENTS Government -wide Financial Statements provide readers with a broad overview of the City of Renton's finances in a manner similar to a private sector business. They provide both short-term and long-term information about the City's overall financial status. The government -wide statements distinguish between functions of the City that are principally supported by taxes and intergovernmental revenues (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 governmental activities of the City include a full range of local government services provided to the public such as police and fire protection; road maintenance and construction; community planning and economic development; libraries, parks, and recreational opportunities; and other community services. The business -type activities of the City include water, sewer, surface water, solid waste management and services, golf course, and airport. Management's Discussion and Analysis 3-3 2007 Comprehensive Annual Financial Report City of Renton, Washington The Statement of Net Assets presents information on all of the City's assets and liabilities with the difference between the two reported as net assets. This statement combines and consolidates governmental funds' current financial resources (short term available resources) with capital assets and long-term obligations, which is primarily debt. The Statement of Net Assets serves a purpose similar to that of the Balance Sheet of a private -sector business. Over time, increases or decreases in net assets may serve as one indicator of whether the financial position of the City is improving or deteriorating. Other indicators to consider when evaluating the financial position of the City includes changes to the property tax base, general economic conditions as demonstrated through business licenses fees or sales tax revenue, and the condition of the City's infrastructure (roads, drainage systems, bridges, and water infrastructure). The Statement of Activities focuses upon both the gross and net cost of various activities that are provided by the government's general tax and other revenues. This is intended to summarize and simplify the user's analysis of cost to various governmental services and/or subsidy to various business -type activities. By separating program revenue from general revenue, users of the financial statements can identify the extent to which each program relies on taxes for funding. The Governmental Activities reflect the City's basic functions: General Government, Security of Person and Property, Physical Environment, Mental and Physical Health, and Culture and Recreation. Property, sales, and utility taxes finance the majority of these functions. All changes in net assets are reported using accrual basis of accounting, which is similar to the accounting used in the private sector. The accrual basis of accounting requires that revenues are reported when earned and expenses are reported when incurred, no matter when the revenue will actually be received or the obligation will be paid. For example, property taxes are shown as a receivable and revenue even though some amount of these taxes will not be available to the City for several years. All unpaid vendor obligations are illustrated as an accounts payable obligation as of December 31. Fund Financial Statements The City uses funds to ensure and demonstrate fiscal integrity and compliance with finance related legal requirements with a focus on Major Funds. A fund is a group of related accounts that is used to maintain control over resources that have been segregated for specific activities and objectives. There are three types of funds: governmental, proprietary, and fiduciary. A Major Fund has three elements as defined by GASB 34: • Total assets, liabilities, revenues, or expenditures of that individual governmental or enterprise funds are at least ten percent (10%) of the corresponding total (assets, liabilities, etc.) for all funds of that category or type (i.e., governmental, proprietary, or fiduciary); and • Total assets, liabilities, revenues, or expenditures/expenses of the individual government fund or enterprise funds are at least five percent (5%) of the corresponding total for all governmental and enterprise funds combined; or • Any other governmental or enterprise fund that the government's officials believe is particularly important. Governmental Funds present most of a government's tax -supported activities. The Proprietary Funds describe and financially manage the government's business -type activities where all or part 3-4 Management's Discussion and Analysis 2007 Comprehensive Annual Financial Report City of Renton, Washington of the activities' costs are supported by fees and charges that are paid directly by those who benefit from the activities. Fiduciary Funds control resources held by the government as a trustee or agent for parties outside of the government. The resources of Fiduciary Funds cannot be used to support the government's own programs. Governmental Funds The Governmental Fund Balance Sheet and Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balances present separate columns of financial data for the General Fund, Municipal Facilities Construction in Process (CIP), General CIP and the South Lake Washington CIP Funds. The General CIP and South Lake Washington are new major funds for 2007. These comprise 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 in the form of combining statements. Governmental Funds are used to account for essentially the same functions reported as governmental activities in the Government -wide Financial Statements. The focus of governmental Fund Financial Statements is on near-term inflows and outflows of available resources and on balances of 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. Because the focus of governmental Fund Financial Statements is a narrower view 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. The Governmental Fund Balance Sheet and the Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balances provide 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. Proprietary Funds These types of funds consist of two types of funds: Enterprise and Internal Service. They have always been operated as private business activity. Enterprise Funds are used to report the same functions as business -type activities in the Government -wide Financial Statements. Internal 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 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. Because the remaining balances primarily benefit governmental, rather than business -type activities, they have been included within Governmental Activities in the Government -wide Statements. The City of Renton has two major proprietary funds: Waterworks Utility (water, wastewater, and stormwater) and Solid Waste. The Proprietary Fund Balance Sheet and the Proprietary Fund Management's Discussion and Analysis 3-5 2007 Comprehensive Annual Financial Report City of Renton, Washington Statement of Revenues, Expenses, and Changes in Fund Equity present separate columns of financial data for the Waterworks Utility and Solid Waste. Data from the remaining Enterprise Funds are combined and presented in a single, aggregated column in the fund statements. Governmental Activities Internal Service Funds are reported separately in this section. Proprietary Fund 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, only slight differences will be noticed. One notable difference is that the "due from other funds" (asset) and the "due to other funds" (liability) in the proprietary fund statements are combined in a single line called "internal balances" in the asset section of the Government -wide Statement of Net Assets. Fiduciary Funds Fiduciary Funds are used to account for resources held for the benefit of parties outside the government. 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. All of the City's fiduciary activities are reported in a separate Statement of Fiduciary Net Assets and a Statement of Changes in Fiduciary Net Assets. 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. Combining statements for non -major Governmental and Enterprise Funds, as well as Internal Service Funds, are presented immediately following the required supplementary information on pensions. GOVERNMENT -WIDE FINANCIAL ANALYSIS Statement of Net Assets Changes in Net Assets may serve as a useful indicator of a government's financial position. The overall financial position has improved for the City of Renton over the prior year. Changes in Net Assets from 2006 to 2007 shows an increase in total net assets of $21.5 million. 3-6 Management's Discussion and Analysis 2007 Comprehensive Annual Financial Report City of Renton, Washington Table 1 is a condensed version of the Government -wide Statement of Net Assets. Table 1 NET ASSETS Current and other assets $89,914,383 Total Total Governmental Governmental Business -type Business -type Primary Primary Activities Activities Activities Activities Government Government 2006 2007 2006 2007 2006 2007 Current and other assets $89,914,383 $88,100,131 $26,926,855 $24,024,920 $116,841,238 $112,125,051 Land 85,936,207 88,947,494 6,976,320 6,976,320 92,912,527 95,923,814 Construction in process 24,371,783 41,893,039 4,126,115 5,699,288 28,497,898 47,592,327 Capital assets (net of 42,261,663 32,648,993 3,555,690 3,586,667 45,817,353 36,235,660 accumulated depreciation) 143,058,222 143,161,082 213,959,532 218,642,046 357,017,754 361,803,128 TOTAL ASSETS $343,280,595 $362,101,746 $251,988,822 $255,342,574 $595,269,417 $617,444,320 Long term liabilities $51,093,508 $49,397,374 $44,994,968 $43,999,200 $96,088,476 93,396,574 Other liabilities 10,620,578 15,265,203 2,564,530 1,265,319 13,185,108 16,530,522 TOTAL LIABILITIES $61,714,086 $64,662,577 $47,559,498 $45,264,519 $109,273,584 $109,927,096 NET ASSETS o Invested in capital assets, < net of related debt $209,964,556 $232,714,563 $181,515,939 $188,518,151 $391,480,495 $421,232,714 Restricted 42,261,663 32,648,993 3,555,690 3,586,667 45,817,353 36,235,660 Unrestricted 29,340,290 32,075,613 19,357,695 17,973,237 48,697,985 50,048,850 TOTAL NET ASSETS $281,566,509 $297,439,169 $204,429,324 $210,078,055 $485,995,833 $507,517,224 The majority of the City's net assets (82%) are investments in capital assets (e.g., streets, drainage, construction in progress, buildings, equipment, water and sewer pipes) less any related outstanding debt used to acquire these assets. The City's capital assets are used to provide services to citizens. 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. Investments in capital assets net of related debt increased from 2006 to 2007 by $29.8 million. In 2007, the City issued $9,750,000 in Water/Sewer Revenue Bonds. The proceeds of the bonds were used to finance utility capital improvements and to refund certain Water/Sewer Revenue Bonds. Chart 1 CATEGORIES OF NET ASSETS $450,000,000 $375,000,000 $300,000,000 $225,000,000 $150,000,000 $75,000,000 $0 Management's Discussion and Analysis 3-7 o o < F? o> o > ■Unrestricted 0 C7 o o ■Restricted cv N ■Invested in capital assets Management's Discussion and Analysis 3-7 2007 Comprehensive Annual Financial Report City of Renton, Washington Restricted assets, representing resources that are subject to external restrictions on how they may be used, equate to seven percent (7%) of total net assets, down from nine percent (9%) in 2006. The remaining balance (unrestricted net assets) of $50 million may be used to meet the City's ongoing obligations. Chart 1 provides a graphical comparison of the three categories of net assets for 2006 and 2007. As of December 31, 2007, the City reports positive balances in all three categories of net assets, for the government as a whole, as well as for separate governmental and business -type activities. Statement of Change in Net Assets The City's total net assets (before prior period adjustments and changes in accounting principles) increased in 2007 by $21.5 million. Governmental activities generated seventy-three percent (73%) of this total or $15.9 million, while business -type activities generated $5.6 million of this total. Chart 2 below illustrates the various sources and amounts of revenue received by the government as a whole. Table 2 follows the chart. This is a condensed version of the Statement of Activities for the City. Comparable data is available and provided in the 2007 Annual Report. Chart 2 2007 TOTAL REVENUES BY SOURCE Interest/Investment earnings 3% Business Taxes Excise Taxes 7% �% Sales Taxes 14% Property Taxes 1 14% Capital Grants/ Co ntributi 4% Miscellaneous 1% Operating Grants & Contributions 3% Charges for Services 49% 3-8 Management's Discussion and Analysis 2007 Comprehensive Annual Financial Report City of Renton, Washington Table 2 CHANGE OF NET ASSETS Total Primary Total Primary Governmental Governmental Business -Type Business -Type Government Government Activities 2006 Activities 2007 Activities 2006 Activities 2007 2006 2007 REVENUES: $19,977,086 $29,112,970 $7,435,879 $5,648,731 $19,977,086 $29,112,970 Program revenues: 1,434,134 1,845,031 $68,446 1,434,134 1,845,031 Charges for services $31,340,523 $36,863,657 $40,056,079 $45,403,349 $71,396,602 $82,267,006 Operating grants & contributions 4,596,836 5,265,737 77,688 243,537 4,674,524 5,509,274 Capital grants & contributions 5,909,870 4,940,471 6,317,203 1,761,802 12,227,073 6,702,273 GENERAL REVENUES: 6,372,118 6,880,687 6,372,118 6,880,687 Property taxes 23,600,131 23,106,578 23,600,131 23,106,578 Sales taxes 20,869,595 22,749,831 20,869,595 22,749,831 Business taxes 11,219,303 11,962,879 11,219,303 11,962,879 Other taxes 7,718,945 8,236,876 7,718,945 8,236,876 Penalties and interest 3,799 33,949 $27,220,132 $28,657,468 3,799 33,949 Interest and investment earnings 3,251,975 3,465,517 881,486 1,041,576 4,133,461 4,507,093 Miscellaneous 689,243 1,218,889 282,808 135,986 972,051 1,354,875 TOTAL REVENUES $109,200,220 $117,844,384 $47,615,264 $48,586,250 $156,815,484 $166,430,634 PROGRAM EXPENSES GOVERNMENTAL ACTIVITIES General government services $19,977,086 $29,112,970 $7,435,879 $5,648,731 $19,977,086 $29,112,970 Judicial 1,434,134 1,845,031 $68,446 1,434,134 1,845,031 Security of persons and property 30,749,762 36,213,120 7,504,325 5,648,731 30,749,762 36,213,120 Physical environment 2,618,832 2,749,417 196,924,999 204,429,324 2,618,832 2,749,417 Transportation 15,798,138 11,237,287 $204,429,324 $210,078,038 15,798,138 11237,287 Economic environment 6,372,118 6,880,687 6,372,118 6,880,687 Mental and physical health 295,072 301,495 295,072 301,495 Culture and recreation 9,695,924 11,036,931 9,695,924 11,036,931 Interest on long-term debt 1,772,370 2,594,784 1,772,370 2,594,784 Business -type activities Water $27,220,132 $28,657,468 27,220,132 28,657,468 Airport 1,196,363 1,396,054 1,196,363 1,396,054 Solid waste 9,706,016 10,606,560 9,706,016 10,606,560 Golf 2,056,874 2,277,454 2,056,874 2,277,454 TOTAL EXPENSES $88,713,436 $101,971,722 $40,179,385 $42,937,536 $128,892,821 $144,909,258 Increase in net assets before transfers $20,486,784 $15,872,662 $7,435,879 $5,648,731 $27,922,663 $21,521,391 Transfers (68,446) $68,446 0 Increase in net assets 20,418,338 15,872,662 7,504,325 5,648,731 27,922,663 21,521,391 NetAssets- beginning 261,148,171 281,566,509 196,924,999 204,429,324 458,073,170 485,995,833 Net Assets -ending $281,566,509 $297,439,171 $204,429,324 $210,078,038 $485,995,833 $507,517,224 Seventy-one percent (71%) of the City of Renton's total revenue activities are for general governmental activities such as providing police, fire, parks, libraries, recreational, building safety, and planning services. The largest business type activities include water, sewer, surface water, solid Chart 3 waste, and golf activities. 2007 COMPARISON OF TOTAL GOVERNMENTAL vs BUSINESS TYPE EXPENSES Governmental Activities Analysis Governmental activities cost a total of $101.9 million in 2007, up $13.2 million from 2006. Of this amount, $47 million was paid for either by those who directly benefited from the programs or by other governments and organizations that subsidized certain programs with grants Business Type Activities 3 no/r Governmental Activities 70% Management's Discussion and Analysis 3-9 2007 Comprehensive Annual Financial Report City of Renton, Washington and contribution. The net expense (total expenses less program revenues) of $54.9 million was the cost of governmental services City taxpayers primarily paid through various taxes. Chart 4 portrays the cost of each of the City's major governmental programs along with each program's generated revenues (fees and intergovernmental revenues specifically related to that program). $40,000,000 $35,000,000 $30,000,000 $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 $0 Chart 4 GOVERNMENTAL ACTIVITIE S PROGRAM REVENUES AND EXPENSES 2006 vs 2007 1`l,� I§1v Qt04 Qt°4 too too { eon e� 0 'P�� Cs G ti ti IN ,yob' yon^ Qje 4�i�os ��s'� c� °a yOC�' y0o� o�� op°� o�q Oa4 tea dioa btio 0^10 .�a 1a y1 ,lC� ,y0 _f ,mm ryoobG �oo�Ga1 Chart 5 depicts the sources of revenues that fund governmental activities. Approximately fifty-six percent (56%) is from various taxes. Charges for services, grants, and interest earnings generate forty-three percent (43%) of total revenue for general governmental activities. 3-10 Management's Discussion and Analysis 2007 Comprehensive Annual Financial Report Chart 5 GOVERNMENTAL ACTIVITIES REVENUES BY SOURCE Operating Grants 4% Charges for Services 32% Miscellaneous 1% Interest Earnings 3% Capital Grants 4% City of Renton, Washington Property Taxes 20% 1 Retail Sales Taxes Excise Taxes 19% 7% Business Taxes 10% Business -Type Activities Analysis Charts 6 and 7 present the same information on business -type activities as illustrated for general governmental type activities. Chart 6 shows the expense of each of the City's business -type programs along with each program's generated revenues (fees and intergovernmental revenues specifically related to that program.) $ 35,000,000 $ 30,000,000 $ 25,000,000 $ 20,000,000 $15,000,000 $10,000,000 $5,000,000 $0 Chart 6 ■ Expenses BUSINESS TYPE ACTIVITIES PROGRAM REVENUES AND EXPENSES ■Revenues 2006 2007 2006 Airport 2007 Airport 2006 Solid 2007 Solid 2006 Golf 2007 Golf Waterworks Waterworks Waste Waste Course Course The Waterworks Utility had a positive net change of $6.1 million at the end of 2007 compared to $6.8 million in 2006. The City generated $33.8 million in various fees for services and other sources from waterworks activities above the $28.7 million in expenses. Management's Discussion and Analysis 3-11 2007 Comprehensive Annual Financial Report City of Renton, Washington The Airport's total expenses were $1.4 million. Grant revenues for 2007 were $65,986 with total revenues of $1 million. The Solid Waste Utility's revenues were $10.1 million generated from fees for services and $143,483 in grants. The total expenses were $10.6 million. The Golf Course generated a total of $2.3 million in green fees, driving range charges, and other user fees. The total expenses for the Golf Course were $2.3 million. Thus, the Golf Course generated a net asset change of $57,100 for the year. Business -type activities are supported primarily from charges for services. In the City of Renton, $45 million was generated from charges for services in the business -type activities. These comprise ninety-four percent (94%) of the total financial support for these activities. Grant revenues decreased 68.6% or $4.4 million from 2006 to 2007. Chart 7 BUSINESS TYPE ACTIVITIES REVENUES BY SOURCES Interest & Grant Miscellaneous 94% FINANCIAL ANALYSIS OF THE GOVERNMENT'S FUNDS Governmental Funds Analysis The focus of the City's governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City's financing requirements. In particular, unreserved fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. As of the end of the fiscal year, the City's governmental funds reported combined ending fund balances of $50.5 million, a decrease of $9.7 million in comparison to last year. Approximately 15% constitutes unreserved, undesignated fund balance, which is available for spending at the government's discretion. The remainder of the fund balance is reserved or designated to indicate that it is not available for new spending because it has already been committed for operating reserves. The General Fund is the chief operating fund of the City. At the end of the current year, unreserved, undesignated fund balance of the general fund was $8 million, while total fund balance reached $16.5 million. The fund balance total increased $2.6 million during the fiscal year. Excess of revenues over expenses increased by $721,678 in 2007, significantly contributing to this increase. The Parks Fund was eliminated in 2006. The activity of this fund was transferred to the General Fund, significantly contributing to the increase activity in the General Fund. 3-12 Management's Discussion and Analysis 2007 Comprehensive Annual Financial Report City of Renton, Washington The Municipal Fund revenues of $2.4 million in taxes helped contribute toward the overall fund balance increase of $1.1 million. A total of $1.2 million was spent on Major Maintenance of Public Facilities. The Capital Improvement Fund was a new major fund in 2007 and had a net change (decrease) in fund balance of $4.1 million. Decreases of $2.8 million in Proceeds of Long-term Debt and $1.3 million in Transfers contributed significantly to the negative change in the fund balance. The 2007 ending fund balance is $4.4 million. The South Lake Washington Infrastructure Fund was also a new major fund in 2007 and had a net change (decrease) in fund balance of $11.1 million. Decrease of $2.2 million in Intergovernmental Revenues, decrease of $15.7 million in Proceeds of Long-term Debt and an increase of $5.4 million in Capital Outlay expenditures contributed to the negative change in the fund balance. The 2007 ending fund balance is $541,655. Proprietary Funds Analysis The fund financial statements for the proprietary funds are presented in more detail, but essentially provide the same type of information found in the business -type activities in the government -wide financial statements. Unrestricted net assets in the Waterworks Utility Fund and the Solid Waste Fund were $13.5 million and $2.3 million respectively. This represents a decrease in Waterworks Utility Fund of $1.5 million and a decrease in the Solid Waste Fund of $206,696 in unrestricted net assets. Total Net Assets increased in the Waterworks Utility Fund by $6.1 million and decreased in the Solid Waste Fund by $208,009. Other factors concerning the finances of these two funds have already been addressed in the discussion of business -type activities. CAPITAL ASSET AND DEBT ADMINISTRATION Capital Assets The City of Renton's investment in capital assets, including construction in progress, for its governmental and business -type activities as of December 31, 2007, amounts to $505.3 million as presented on the following table. Table 3 CAPITAL ASSETS (Net of Accumulated Depreciation) Governmental Activities Business Type Activities Total Activities 1/1/2007 12/31/2007 1/1/2007 12/31/2007 1/1/2007 12/31/2007 Land $85,936,207 $88,947,494 $ 6,976,321 $6,976,321 $92,912,528 $95,923,815 Construction in progress 24,371,783 41,893,039 4,126,115 5,699,288 28,497,898 47,592,327 Buildings and structures 53,544,216 52,356,883 11,131,546 10,799,011 64,675,762 63,155,894 Other improvements 77,247,581 78,576,142 201,871,536 206,963,989 279,119,117 285,540,131 Machinery and equipment 12,266,422 12,228,057 956,451 879,046 13,222,873 13,107,103 $253,366,209 $274,001,615 $225,061,969 $231,317,655 $478,428,178 $505,319,270 Management's Discussion and Analysis 3-13 2007 Comprehensive Annual Financial Report City of Renton, Washington General government infrastructure includes streets, bridges, overlays, and traffic controls. More detail about the City's Capital Assets can be found in Note 5 to the financial statements. Debt Administration As shown in Table 4, the City's total outstanding debt at December 31, 2007, was $93.4 million. This was a net decrease (new issues less principal payments and refundings) of $2.7 million. Table 4 OUTSTANDING DEBT General Activities Business Type Activities Total Activities 1/1/2007 12/31/2007 1/1/2007 12/31/2007 1/1/2007 12/31/2007 General obligation bonds $46,899,513 $44,956,950 $46,899,513 $44,956,950 Revenue debt $33,840,000 33,405,000 33,840,000 33,405,000 Other long term debt 10,692,018 9,878,951 10,692,018 9,878,951 Employee leave benefits 4,193,995 4,440,424 462,947 715,249 4,656,942 5,155,673 $51,093,508 $49,397,374 $44,994,965 $43,999,200 $96,088,473 $93,396,574 November 1, 2007 the City issued $9,750,000 of Water/Sewer Revenue Bonds. These bonds were issued for the purpose of financing the certain improvements and to refund a portion of the 2002 Water/Sewer Revenue Bonds. The Water & Sewer Revenue Bond underlying ratings remain AA- at both rating agencies. More detailed information about the City's long-term debt can be found in Note 14 to the financial statements. FUTURE YEAR'S BUDGETARY IMPACTS The City continues to benefit from progressive economic development activities allowing the City to continue to grow. • The Landing Project is a redevelopment of the former Boeing production site. It is a major mixed-use development of 68 acres and when fully developed will include 600,000 square feet of retail space, a theater, restaurants, open -space, and 900 residential units. • The City has been rezoning the Highlands area (WWII housing for wartime factories) for redevelopment. • The Boeing Company is the largest employer in the City employs approximately 12,000 employees with an average salary of $90,000. • Seattle Seahawks moved their corporate headquarters and training center to Renton. This facility is about 200,000 square feet, with four practice fields and 48,000 square feet of administrative offices. • Providence Health Systems establishing its offices in the Southgate Office Park, which will employ over 1,000 workers. • McLendon's Hardware relocated to the former K -Mart Building. 3-14 Management's Discussion and Analysis 2007 Comprehensive Annual Financial Report City of Renton, Washington For more information regarding the factors affecting the future year's budgetary impacts, please refer to the Transmittal Letter within this document under: Factors Affecting Financial Condition - Economic Condition. REQUESTS FOR FINANCIAL INFORMATION This financial report is designed to provide our citizens, creditors, investors, and others interested in the City's finances with a general overview of the City's finances and to show the City's accountability for financial resources it receives. If you have any questions about this report or need additional information, please contact Linda Parks, Fiscal Services Director, 1055 South Grady Way, Renton, WA 98057 or visit our web site at http://rentonwa.gov/. Management's Discussion and Analysis 3-15 2007 Comprehensive Annual Financial Report ASSETS Cash and cash equivalents Investments at fair value Receivables (net of allowance for uncollectibles) Internal balances Inventories Prepayments Other non-current assets Restricted assets: Cash and cash equivalents Investments at fair value Land Construction in progress Capital assets (net of accumulated depreciation) Total assets LIABILITIES Accounts payable and other liabilities Interest payable Unamortized (discount)/premium Unearned revenue Non-current liabilities: Due within one year Due in more than one year Total liabilities NET ASSETS Investment in capital assets, net of related debt Restricted for: Promotional programs Construction projects Debt service Unrestricted Total net assets City of Renton, Washington STATEMENT OF NET ASSETS December 31, 2007 PRIMARY GOVERNMENT GOVERNMENTAL BUSINESS -TYPE ACTIVITIES ACTIVITIES TOTAL $ 20,119,002 $ 5,081,099 $ 25,200,101 48,297,436 8,823,548 57,120,984 14,060,134 5,370,085 19,430,219 6,905 (6,905) 443,461 443,461 383,826 - 383,826 5,232,828 726,965 5,959,793 1,395,309 1,395,309 2,191,358 2,191,358 88,947,494 6,976,320 95,923,814 41,893,039 5,699,288 47,592,327 143,161,082 218,642,046 361,803,128 $ 362,101,746 $ 255,342,574 $ 617,444,320 $ 14,361,841 $ 1,391,696 $ 15,753,537 186,309 130,266 316,575 635,952 (484,447) 151,505 81,101 227,804 308,905 5,205,018 3,349,508 8,554,526 44,192,356 40,649,692 84,842,048 $ 64,662,577 $ 45,264,519 $ 109,927,096 $ 232,714,563 $ 188,518,151 $ 421,232,714 2,616,596 - 2,616,596 30,032,397 - 30,032,397 3,586,667 3,586,667 32,075,613 17,973,237 50,048,850 $ 297,439,169 $ 210,078,055 $ 507,517,224 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-1 2007 Comprehensive Annual Financial Report STATEMENT OF ACTIVITIES For the Year Ended December 31, 2007 Page 1 of 2 City of Renton, Washington Business -type activities Waterworks utility $ 28,657,468 $ 32,078,690 $ PROGRAM REVENUES 1,735,680 Airport 1,396,054 965,809 OPERATING 26,122 Solid waste utility 10,606,560 CHARGES FOR GRANTS AND CAPITAL GRANT FUNCTIONS/PROGRAMS EXPENSES SERVICES CONTRIBUTIONS & CONTRIBUTIONS Primary government: $ 42,937,536 $ 45,403,349 $ 243,537 $ 1,761,802 Governmental activities: $ 144,909,258 $ 82,267,006 $ 5,509,274 $ 6,702,273 General government $ 29,112,970 $ 23,163,645 $ 4,249,684 $ 514,633 Judicial 1,845, 031 1,169,581 - - Security of persons and property 36,213,120 591,586 708,299 Physical environment 2,749,417 999,484 - - Transportation 11,237,287 1,432,215 87,481 2,368,824 Economic environment 6,880,687 7,857,186 - 2,054,314 Mental and physical health 301,495 - 209,397 2,700 Culture and recreation 11,036,931 1,649,960 10,876 - Interest on long-term debt 2,594,784 - - - Total governmental activities $ 101,971,722 $ 36,863,657 $ 5,265,737 $ 4,940,471 Business -type activities Waterworks utility $ 28,657,468 $ 32,078,690 $ 60,190 $ 1,735,680 Airport 1,396,054 965,809 39,864 26,122 Solid waste utility 10,606,560 10,094,752 143,483 - Golf course 2,277,454 2,264,098 - - Total business -type activities $ 42,937,536 $ 45,403,349 $ 243,537 $ 1,761,802 Total primary government $ 144,909,258 $ 82,267,006 $ 5,509,274 $ 6,702,273 General revenues: Taxes: Property taxes Retail sales taxes Business taxes Excise taxes Penalties and interest Interest and investment earnings Miscellaneous Total general revenues and transfers Change in net assets Net assets - beginning Net assets - ending The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-2 2007 Comprehensive Annual Financial Report Page 2 of 2 NET (EXPENSE) REVENUE AND CHANGES IN NET ASSETS PRIMARY GOVERNMENT GOVERNMENTAL BUSINESS -TYPE ACTIVITIES ACTIVITIES TOTAL $ (1,185,010) (675,450) (34,913,235) (1,749,933) (7,348,767) 3,030,813 (89,398) (9,376,095) (2,594,784) $ (54,901,859) $ (1,185,010) (675,450) (34,913,235) (1,749,933) (7,348,767) 3,030,813 (89,398) (9,376,095) (2,594,784) $ (54,901,859) $ 5,217,109 $ 5,217,109 (364,259) (364,259) (368,325) (368,325) (13,356) (13,356) $ 4,471,169 $ 4,471,169 $ (54,901,859) $ 4,471,169 $ (50,430,690) $ 23,106,578 $ $ 23,106,578 22,749,831 22,749,831 11,962,879 11,962,879 8,236,876 8,236,876 33,949 33,949 3,465,517 1,041,576 4,507,093 1,218,889 135,986 1,354,875 $ 70,774,519 $ $ 1,177,562 71,952,081 $ 15,872,660 $ 5,648,731 $ 21,521,391 $ 281,566,509 $ 204,429,324 $ 485,995,833 $ 297,439,169 $ 210.078,055 $ 507,517,224 City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-3 2007 Comprehensive Annual Financial Report ASSETS Cash & cash equivalents Investments Receivables (net of allowances) Taxes Customer accounts Accrued interest & penalty Interfund loans receivable Due from other funds Due from other governmental units Prepayments TOTAL ASSETS City of Renton, Washington BALANCE SHEET GOVERNMENTALFUNDS December 31, 2007 Page 1 of 4 MUNICIPAL SO LK WA FACILITIES CAPITAL INFRASTRUC- GENERAL CIP IMPROVEMENT TURE $ 6,784,804 $ 1,438,958 $ 1,063,746 $ 1,414 7,533,665 13,914,644 5,508,676 - 368,733 180,940 2,773,767 141,855 1,181, 392 201,602 351,199 95,226 - 975,000 - 6,905 - - 4,772,646 67,754 1,699,105 347,849 8,000 $ 22,450,122 $ 16,928,495 $ 8,508,608 $ 1,530,655 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-4 2007 Comprehensive Annual Financial Report BALANCE SHEET GOVERNMENTALFUNDS December 31, 2007 Page 2 of 4 ASSETS Cash & cash equivalents Investments Receivables (net of allowances) Taxes Customer accounts Accrued interest & penalty Interfund loans receivable Due from other funds Due from other governmental units Prepayments TOTAL ASSETS OTHER TOTAL GOVERNMENTAL GOVERNMENTAL FUNDS FUNDS 4,450,427 $ 13,739,349 6,612,445 33,569,430 193,223 742,896 948,030 5,045,044 155,276 803,303 - 975,000 447,999 454,904 191,540 7,078,894 - 8,000 $ 12,998,940 $ 62,416,820 City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-5 2007 Comprehensive Annual Financial Report LIABILITIES AND FUND BALANCES Liabilities Accounts payable Taxes payable Retainage payable Due to other funds Interfund loans payable Custodial accounts Deposits Deferred revenue Accrued employee wages and leave payable Total liabilities Fund balances Reserved for: Advances to other funds Prepaid items Unreserved, designated for: General fund contingency Capital project funds contingency Special revenue funds Capital project fund Unreserved reported in: General fund Total fund balances TOTAL LIABILITIES AND FUND BALANCES City of Renton, Washington BALANCE SHEET GOVERNMENTALFUNDS December 31, 2007 Page 3 of 4 MUNICIPAL SO LK WA FACILITIES CAPITAL INFRASTRUC- GENERAL CIP IMPROVEMENT TUBE $ 2,134,476 $ 352,956 $ 3,475,822 $ 14,000 23,397 - - - - 54,851 228,983 - 448,000 - - - 975,000 56,207 - 34,739 736,152 2,982,767 - - $ 5,967,738 $ 407,807 $ 4,152,805 $ 989,000 $ - $ $ $ 975,000 8,000 - 8,450,664 - 1,700,000 14,820,688 4,355,803 8,023,720 (433,345) $ 16,482,384 $ 16,520,688 $ 4,355,803 $ 541,655 $ 22,450,122 $ 16,928,495 $ 8,508,608 $ 1,530,655 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-6 2007 Comprehensive Annual Financial Report BALANCE SHEET GOVERNMENTALFUNDS December 31, 2007 Page 4 of 4 LIABILITIES AND FUND BALANCES Liabilities Accounts payable Taxes payable Retainage payable Due to other funds Interfund loans payable Custodial accounts Deposits Deferred revenue Accrued employee wages and leave payable Total liabilities Fund balances Reserved for: Advances to other funds Prepaid items Unreserved, designated for: General fund contingency Capital project funds contingency Special revenue funds Capital project fund Debt service funds Unreserved reported in: General fund Total fund balances TOTAL LIABILITIES AND FUND BALANCES City of Renton, Washington OTHER TOTAL GOVERNMENTAL GOVERNMENTAL FUNDS FUNDS 31,782 261,148 41,743 32,981 3,435 4,089 $ 375,178 2,616,596 8,599,449 1,392, 915 $ 6,009,036 284,545 325,577 448,000 975,000 56,207 67,720 739,587 2,986,856 $ 11,892,528 975,000 8,000 8,450,664 1,700, 000 2,616,596 27,775,940 1,392, 915 14,802 7,605,177 $ 12,623,762 $ 50,524,292 $ 12,998,940 $ 62,416,820 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-7 2007 Comprehensive Annual Financial Report RECONCILIATION OF THE BALANCE SHEET TO THE STATEMENT OF NET ASSETS December 31, 2007 FUND BALANCES - TOTAL GOVERNMENTAL FUNDS Amounts reported for governmental activities in the statement of net assets are different because: Capital assets used in governmental activities are not financial resource: and therefore are not reported in the governmental funds Capital assets (net) and other non-current assets, $ 279,234,443 The focus of governmental funds is on short-term financing, assets are offset by deferred revenue and are not included in fund balances Deferred revenue $ 658,486 Long-term liabilities, including bonds payable are not due and payable in the current period and therefore are not reported in the governmental funds Interest payable $ (195,565) Long-term liabilities (49,773,730) Internal service funds are used by management to charge the costs o' certain activities to individual funds. Total assets and liabilities of the internal service funds that are reported with governmental activities, less capital assets reported above $ 16,991,243 NET ASSETS OF GOVERNMENTAL ACTIVITIES City of Renton, Washington $ 50,524,292 $ 297,439,169 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-8 2007 Comprehensive Annual Financial Report City of Renton, Washington STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTALFUNDS For the Year Ended December 31, 2007 Page 1 of 2 MUNICIPAL SO LK WA FACILITIES CAPITAL INFRASTRUC- GENERAL CIP IMPROVEMENT TUBE REVENUES Taxes $ 60,853,487 $ 2,352,213 $ $ 490,414 Licenses and permits 4,051,338 - 1,776,892 - Intergovernmental revenues 4,247,212 67,754 2,779,780 2,158,450 Charges for services 4,644,129 - 55 1,181,392 Fines and forfeits 1,150,079 Interfund revenues 2,904,411 - Special assessments - 51,723 Contributions 303,582 - - - Investment earnings 1,142,279 684,513 (37,379) 23,656 Miscellaneous revenues 84,822 - - TOTAL REVENUES $ 79,381,339 $ 7104,480 $ 4,571,071 $ 3,853,912 EXPENDITURES Current: General government $ 14,327,626 $ $ - $ - Security of persons and property 35,583,500 Physical environment 2,764,563 - Transportation 5,508,218 895,140 Economic environment 5,536,661 75,498 - Mental & physical health 13,818 Culture & recreation 10,701,870 - - - Capital outlay 2,401,021 3,838,264 9,685,824 13,257,705 Debt service: Principal payment - - Interest payment 4,582 - - 26,538 TOTAL EXPENDITURES $ 76,841,859 $ 3,913,762 $ 9,685,824 $ 14,179,383 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES $ 2,539,480 $ (809,282) $ (5,114,753) $ (10,325,471) OTHER FINANCING SOURCES (USES) Transfer in $ 480,355 $ 1,871,957 $ 1,065,000 $ Transfer (out) (480,355) - (60,000) (784,580) Sale of capital assets 24,218 TOTAL OTHER FINANCE SOURCES (USES) $ 24,218 $ 1,871,957 $ 1,005,000 $ (784,580) NET CHANGE IN FUND BALANCE $ 2,563,698 $ 1,062,675 $ (4,109,753) $ (11,110,051) FUND BALANCE JANUARY 1 $ 13,918,686 $ 15,458,013 $ 8,465,556 $ 11,651,706 FUND BALANCE DECEMBER 31 $ 16,482,384 $ 16,520,688 $ 4,355,803 $ 541,655 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-9 2007 Comprehensive Annual Financial Report City of Renton, Washington STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTALFUNDS For the Year Ended December 31, 2007 Page 2 of 2 REVENUES Taxes Licenses and permits Intergovernmental revenues Charges for services Fines and forfeits Interfund revenues Special assessments Contributions Investment earnings Miscellaneous revenues TOTALREVENUES EXPENDITURES Current: General government Security of persons and property Physical environment Transportation Economic environment Mental & physical health Culture & recreation Capital outlay Debt service: Principal payment Interest payment TOTAL EXPENDITURES EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES OTHER FINANCING SOURCES (USES) Transfer in Transfer (out) Sale of capital assets TOTAL OTHER FINANCE SOURCES (USES) NET CHANGE IN FUND BALANCE FUND BALANCE JANUARY 1 FUND BALANCE DECEMBER 31 OTHER TOTAL GOVERNMENTAL GOVERNMENTAL FUNDS FUNDS $ 3,002,762 $ 66,698,876 - 5,828,230 538,634 9,791,830 4,223,303 10,048,879 - 1,150,079 448,000 3,352,411 - 51,723 50,000 353,582 673,820 2,486,889 1,500 86,322 $ 8,938,019 $ 99,848,821 $ 269,729 $ 14,597,355 - 35,583,500 2,764,563 - 6,403,358 284,430 5,896,589 - 13,818 128,354 10,830,224 137,209 29,320,023 1,565,904 1,565,904 2,615,503 2,646,623 $ 5,001,129 $ 109,621,957 (9,773,136) $ 3,936,890 $ $ 2,365,676 $ 5,782,988 (4,458,053) (5,782,988) 24,218 $ (2,092,377) $ 24,71-8– $ 1,844,513 $ (9,748,918) $ 10,779,249 $ 60,273,210 $ 12,623,762 $ 50,524,292 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-10 2007 Comprehensive Annual Financial Report RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES GOVERNMENTAL FUNDS For the Year Ended December 31, 2007 NET CHANGES IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures, however, in the statement of activities, the cost of those assets are depreciated over their estimated useful lives Capital Outlay $ 29,320,023 Expenditures for assets under capitalization threshholc (2,787,522) Expenditures for capital assets $ 26,532,501 Less current year depreciation (8,254,544) $ 18,277,957 Repayment of long-term debt is an expenditure in governmen. tal funds, but the repayment reduces long-term liabilities in the statement of net assets. Loan or bond proceeds provide current financial resources to governmenta funds, but the repayment reduces long-term liabilities in the statement of net assets. Principal payments $ 1,565,904 Some revenues or expenditures reported in the statement of activities are not yet available or expensed and therefore are not reported as revenue or expenses in governmental funds $ 331,700 Net Pension Obligation over funded / (under funded; $ 154,035 Internal service funds or activities are used by management tc charge the costs of certain activities to individual funds. The net (expense) of the internal service fund anc internal balances reported with governmental activities, $ 5,291,982 CHANGES IN NET ASSETS OF GOVERNMENTAL ACTIVITIES City of Renton, Washington $ (9,748,918) $ 15,872,660 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-11 2007 Comprehensive Annual Financial Report City of Renton, Washington STATEMENT OF NET ASSETS PROPRIETARY FUNDS December 31, 2007 Page 1 of 2 BUSINESS -TYPE ACTIVITIES ENTERPRISE FUNDS GOVERNMENTAL OTHER TOTAL ACTIVITIES WATERWORKS ENTERPRISE ENTERPRISE INTERNAL SERVICE UTILITY SOLID WASTE FUNDS FUNDS FUNDS ASSETS Current assets: Cash & cash equivalents $ 2,797,689 $ 879,629 $ 1,403,781 $ 5,081,099 $ 6,379,653 Investments at fair value 7,362,526 652,379 808,643 8,823,548 14,728,006 Receivables (net of allowances): Customer accounts 3,285,863 1,169,456 58,946 4,514,265 32,863 Special assessments - current 25,648 - 25,648 Interest - investments 204,096 14,488 20,340 238,924 344,804 Due from other funds - 18,060 Due from other governmental units 430,713 143,483 17,053 591,249 12,330 Inventory of materials and supplies 351,393 - 92,068 443,461 Prepayments 375,826 Total current assets $ 14,457,928 $ 2,859,435 $ 2,400,831 $ 19,718,194 $ 21,891,542 Noncurrent assets: Restricted Cash $ 1,395,309 $ - $ $ 1,395,309 $ Restricted Investments at fair value 1,750,000 441,358 2,191,358 Special assessments deferred 52,918 52,918 Capital assets (net) 211,899,961 19,417,693 231,317,654 7,674,602 Deferred charges and other assets 638,432 35,615 674,047 Total noncurrent assets $ 215,736,620 $ $ 19,894,666 $ 235,631,286 $ 7,674,602 TOTAL ASSETS $ 230,194,548 $ 2,859,435 $ 22,295,497 $ 255,349,480 $ 29,566,144 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-12 2007 Comprehensive Annual Financial Report LIABILITIES Current liabilities: Accounts payable Retainage payable Due to other funds Accrued interest payable Accrued employee wages and benefits payable Accrued taxes payable Custodial Accounts Deferred revenue Revenue bonds payable Capital leases payable Total current liabilities Long-term liabilities: Revenue bonds payable Unamortized premium on revenue bonds Unamortized discount on revenue bonds Deferred amount on revenue bond refundinc Accrued employee wages and benefits payable Claims incurred but not reported Capital leases payable Public works trust fund loan payable Total long-term liabilities TOTAL LIABILITIES NET ASSETS Investment in capital assets, net of related debt Restricted for Waterworks Utility debt Restricted for Golf Course debt Unrestricted TOTAL NET ASSETS City of Renton, Washington STATEMENT OF NET ASSETS PROPRIETARY FUNDS December 31, 2007 Page 2 of 2 BUSINESS -TYPE ACTIVITIES 435,005 ENTERPRISE FUNDS GOVERNMENTAL OTHER TOTAL ACTIVITIES WATERWORKS ENTERPRISE ENTERPRISE INTERNAL SERVICE UTILITY SOLID WASTE FUNDS FUNDS FUNDS $ 448,461 $ 435,005 $ 74,544 $ 958,010 $ 1,299,756 95,847 - 95,847 6,905 6,905 18,060 118,364 11,902 130,266 35,225 1,072 7,194 43,491 13,246 46,727 41,821 36,235 124,783 4,335 44,430 - 125,137 169,567 195,269 32,535 227,804 1,810,000 295,000 2,105,000 9,192 9,192 $ 2,801,228 $ 477,898 $ 591,739 $ 3,870,865 $ 1,335,397 $ 28,790,000 $ $ 2,510,000 $ 31,300,000 $ 659,170 659,170 (330,837) (242,500) (573,337) (570,280) (570,280) 563,321 31,356 120,572 715,249 578,947 2,985,955 66,881 66,881 9,802,877 9,802,877 $ 38,914,251 $ 31,356 $ 2,454,953 $ 41,400,560 $ 3,564,902 $ 41,715,479 $ 509,254 $ 3,046,692 $ 45,271,425 $ 4,900,299 $ 171,739,031 $ $ 16,779,120 $ 188,518,151 $ 7,674,602 3,145, 309 3,145, 309 441,358 441,358 13,594,729 2,350,181 2,028,327 17,973,237 16,991,243 $ 188,479,069 $ 2,350,181 $ 19,248,805 $ 210,078,055 $ 24,665,845 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-13 2007 Comprehensive Annual Financial Report City of Renton, Washington STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS PROPRIETARY FUNDS For the Year Ended December 31, 2007 NON-OPERATING REVENUES(EXPENSES) Intergovernmental revenues 105,190 143,483 BUSINESS -TYPE ACTIVITIES 314,659 2,998 Investment earnings 810,519 86,496 144,561 ENTERPRISE FUNDS 978,627 Gain (loss) on sale of capital assets GOVERNMENTAL - (324) (324) (100,032) OTHER TOTAL 778 ACTIVITIES 32,255 692,604 WATERWORKS (942,363) ENTERPRISE ENTERPRISE (1,100,501) INTERNAL SERVICE Amortization of debt discount and expense (170,756) UTILITY SOLID WASTE FUNDS FUNDS NON-OPERATING REVENUE NET OF EXPENSE FUNDS OPERATING REVENUES: $ 20,556 $ 82,145 $ 1,574,197 INCOME (LOSS) BEFORE CONTRIBUTIONS Charges for services $ 30,992,121 $ 10,167,256 $ 3,230,099 $ 44,389,476 $ 9,755,146 Interdepartmental services $ 1,730,360 675,288 538 - 675,826 CHANGE IN NET ASSETS - Other services $ (229,951) 409,344 - - 409,344 $ 2,558,190 9,581,022 TOTAL OPERATING REVENUES $ 32,076,753 $ 10,167,794 $ 3,230,099 $ 45,474,646 $ 19,336,168 OPERATING EXPENSES: Operations and maintenance $ 5,054,666 $ 887,106 $ 1,754,647 $ 7,696,419 $ (1,279,983) Benefit payments 1,243,249 90,217 390,358 1,723,824 10,702,181 Professional services 170,898 8,449,626 57,937 8,678,461 580,437 Administrative and general 13,451,923 129,482 491,992 14,073,397 1,543,298 Insurance 62,400 - 51,000 113,400 1,904,516 Taxes 2,037,506 1,048,816 10,994 3,097,316 - Capital outlay - - - - 106,303 Depreciation 5,530,612 1,313 723,678 6,255,603 2,061,628 TOTAL OPERATING EXPENSES $ 27,551,254 $ 10,606,560 $ 3,480,606 $ 41,638,420 $ 15,618,380 OPERATING INCOME (LOSS) $ 4,525,499 $ (438,766) $ (250,507) $ 3,836,226 $ 3,717,788 NON-OPERATING REVENUES(EXPENSES) Intergovernmental revenues 105,190 143,483 65,986 314,659 2,998 Investment earnings 810,519 86,496 144,561 1,041,576 978,627 Gain (loss) on sale of capital assets - - (324) (324) (100,032) Other non-operating revenues (expenses) 28,242 778 3,235 32,255 692,604 Interest expense (942,363) - (158,138) (1,100,501) - Amortization of debt discount and expense (170,756) - (34,764) (205,520) - NON-OPERATING REVENUE NET OF EXPENSE $ (169,168) $ 230,757 $ 20,556 $ 82,145 $ 1,574,197 INCOME (LOSS) BEFORE CONTRIBUTIONS AND TRANSFERS $ 4,356,331 $ (208,009) $ (229,951) $ 3,918,371 $ 5,291,985 Capital contributions $ 1,730,360 $ - $ - $ 1,730,360 $ - CHANGE IN NET ASSETS $ 6,086,691 $ (208,009) $ (229,951) $ 5,648,731 $ 5,291,985 NET ASSETS, JANUARY 1 $ 182,392,378 $ 2,558,190 $ 19,478,756 $ 204,429,324 $ 19,373,860 NET ASSETS, DECEMBER 31 $ 188,479,069 $ 2,350,181 $ 19,248,805 $ 210,078,055 $ 24,665,845 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-14 2007 Comprehensive Annual Financial Report City of Renton, Washington STATEMENT OF CASH FLOWS PROPRIETARY FUNDS For the Year Ended December 31, 2007 Page 1 of 2 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-15 BUSINESS -TYPE ACTIVITIES ENTERPRISE FUNDS GOVERNMENTAL OTHER TOTAL ACTIVITIES WATERWORKS ENTERPRISE ENTERPRISE INTERNAL SERVICE UTILITY SOLID WASTE FUNDS FUNDS FUNDS CASH FLOWS FROM OPERATING ACTIVITIES: Cash received for services $ 31,299,489 $ 10,130,403 $ 3,228,767 $ 44,658,659 $ 19,333,824 Cash received from other funds for services 498,349 - - 498,349 - Cash paid to suppliers for goods & services (21,580,628) (10,676,114) (2,380,262) (34,637,004) (2,367,693) Cash paid to other funds for goods & services (43,771) (8,400) (52,171) Cash paid to employees (1,197,995) (76,170) (387,278) (1,661,443) (10,381,148) Other operating receipts - 352,270 352,270 (2,165,389) Other non-operating receipts 28,242 - (155,227) (126,985) (106,303) NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES $ 9,003,686 $ (269,611) $ 297,600 $ 9,031,675 $ 4,313,291 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES (Increase)/decrease in restricted cash $ - $ $ - $ - $ - NET CASH PROVIDED (USED) BY NONCAPITAL FINANCING ACTIVITIES $ $ $ - $ - $ CASH FLOWS FROM CAPITAL FINANCING ACTIVITIES: Acquisition & construction of capital assets $ (11,845,087) $ $ (665,722) $ (12,510,809) $ (1,882,053) Capital contributions 1,730,360 - 1,730,360 Capital grants 105,190 65,986 171,176 Principal payments on debt (1,039,143) (295,000) (1,334,143) Interest payments on debt (1,383,834) 8,872 (1,374,962) NET CASH PROVIDED (USED) BY CAPITAL FINANCING ACTIVITIES $ (12,432,514) $ $ (885,864) $ (13,318,378) $ (1,882,053) CASH FLOWS FROM INVESTING ACTIVITIES: Payments for investments $ (146,304) $ (500,000) $ (58,643) $ (704,947) $ (5,180,277) Interest on investments (6,075,517) 72,691 136,621 (5,866,205) 857,121 NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES $ (6,221,821) $ (427,309) $ 77,978 $ (6,571,152) $ (4,323,156) NET INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS $ (9,650,649) $ (696,920) $ (510,286) $ (10,857,855) $ (1,891,918) CASH & CASH EQUIVALENTS, JANUARY 1 12,479,315 1,576,549 1,914,067 15,969,931 8,271,571 RESTRICTED CASH, JANUARY 1 1,364,332 - - 1,364,332 - CASH , RESTRICTED CASH ,& CASH EQUIVALENTS, DECEMBER 31 $ 4,192,998 $ 879,629 $ 1,403,781 $ 6,476,408 $ 6,379,653 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-15 2007 Comprehensive Annual Financial Report City of Renton, Washington STATEMENT OF CASH FLOWS PROPRIETARY FUNDS For the Year Ended December 31, 2007 Page 2 of 2 BUSINESS -TYPE ACTIVITIES GOVERNMENTAL ENTERPRISE FUNDS ACTIVITIES OTHER TOTAL INTERNAL WATERWORKS SOLID ENTERPRISE ENTERPRISE SERVICE UTILITY WASTE FUNDS FUNDS FUNDS RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES: Operating income (loss) $ 4,525,499 $ (438,766) $ (250,507) $ 3,836,226 $ 1,183,764 Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation & amortization of deferred charges $ 5,530,612 $ 1,313 $ 723,678 $ 6,255,603 $ 2,061,628 Other non-operating revenue 28,242 144,261 (155,227) 17,276 592,573 (Increase) decrease in accounts receivable (101,976) (37,391) (13,417) (152,784) (2,344) (Increase) decrease in due from other funds/governmental units (176,939) (41,553) 33,286 (185,206) (10,454) (Increase) decrease in inventory & prepaid items (79,639) (45,131) (124,770) (269,788) Increase (decrease) in vouchers retainage payable 43,366 (43,352) 14 171,228 Increase (decrease) in due to other funds/governmental units (43,771) - (8,400) (52,171) - Increase (decrease) in payables & other short-term liabilities (681,467) 88,478 60,782 (532,207) Increase (decrease) in customer deposits - 19,354 19,354 - Increase (decrease) in deferred revenues (85,495) - (26,546) (112,041) 590,820 Increase (decrease)in accrued employee leave benefits 45,254 14,047 3,080 62,381 - Total adjustments $ 4,478,187 $ 169,155 $ 548,107 $ 5,195,449 $ 3,133,663 NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES $ 9,003,686 $ (269,611) $ 297,600 $ 9,031,675 $ 4,317,427 NONCASH INVESTING, CAPITAL, AND FINANCING ACTIVITIES Capital disposal and retirement $ 89,549 $ $ - $ 89,549 $ - Contributions of capital assets 1,730,360 1,730,360 Net amort. bond prem. discount & bond issue costs 270,715 270,715 - Increase in fair value of investments 42,849 2,379 - 45,228 2,061,628 Depreciation 5,530,612 1,313 723,678 6,255,603 - The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-16 2007 Comprehensive Annual Financial Report STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS December 31, 2007 ASSETS Cash & cash equivalents Investments at fair value: Federal National Mortgage Association US Treasury Strips Interest on investments TOTAL ASSETS LIABILITIES Vouchers & contracts payable Deposits payable TOTAL LIABILITIES NET ASSETS Held in trust for pension benefits & other purposes PENSION TRUST AGENCY FIREFIGHTER'S SPECIAL PENSION DEPOSITS $ 1,387,880 $ 728,050 134,821 - 4,124,729 2,521,487 - $ 8,168,917 $ 728,050 $ - $ 62,166 665,884 $ $ 728,050 $ 8,168,917 $ City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-17 2007 Comprehensive Annual Financial Report STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS FIREMEN'S PENSION FUND For the Year Ended December 31, 2007 PENSION TRUST FIREMEN'S PENSION ADDITIONS: Other contributions: Fire insurance premiums transferred it $ 85,062 Investment income Investment earnings 672,903 TOTAL ADDITIONS $ 757,965 DEDUCTIONS: Benefit payments Medical benefit payments Administrative and general TOTAL DEDUCTIONS NET INCREASE (DECREASE) NET ASSETS - JANUARY 1 NET ASSETS - DECEMBER 31 $ 427,012 9,059 16,226 $ 452,297 $ 305,668 $ 7,863,249 $ 8,168,917 City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-18 2007 Comprehensive Annual Financial Report City of Renton, Washington NOTES TO THE FINANCIAL STATEMENTS January 1, 2007 through December 31, 2007 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The City of Renton was incorporated on September 6, 1901, and operates under the laws of the State of Washington applicable to a Non -Charter code city with a Mayor/Council form of government. A full-time Mayor and seven part-time Council members serve the City, all elected at large to four-year terms. The City provides the full range of municipal services authorized by state statutes, together with a Municipal Airport, a Waterworks Utility, a Solid Waste Utility, and a Municipal Golf Course. The accounting and reporting policies of the City related to the funds included in the accompanying financial statements conform to generally accepted accounting principles (GAAP) applicable to state and local governments. GAAP for local governments include those principles prescribed by the Governmental Accounting Standards Board (GASB), the Financial Accounting Standards Board (FASB), when applicable, and the American Institute of Certified Public Accountants (AICPA) pronouncements that have been made applicable by GASB Statements or Interpretations. In accordance with GASB Statement 20, the City has not applied to its enterprise activities FASB Statements and Interpretations, Accounting Principles Board opinions, and Accounting Research Bulletins of the Committee of Accounting Procedure issued after November 30, 1989. The City had implemented all applicable GASB Statements through Statement No. 49, with the exception of GASB Statement No. 45. The City is required to implement Statement No. 45: Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions in 2008. All other applicable statements were implemented prior to 2007. A. REPORTING ENTITY As required by GAAP the City's financial statements present the City of Renton — the primary government. The City of Renton's Mayor appoints the Governing Board for the Renton Housing Authority, which is not considered a component unit of the City. The City is under no obligation to subsidize, nor does it exercise any other prerequisite for inclusion. The City of Renton has no component units (either blended or discretely presented) included in these statements. The notes to the financial statements are an integralpart of this statement. Basic Financial Statements, 4-19 2007 Comprehensive Annual Financial Report City of Renton, Washington B. BASIC FINANCIAL STATEMENTS — GASB 34 PRESENTATION The City's basic financial statements include both Government -wide (reporting the City as a whole) and fund financial statements (reporting the City's major funds). Both the Government - wide and fund financial statements categorize primary activities as either government or business -type. GOVERNMENT -WIDE STATEMENTS In the Government -wide Statement of Net Assets, both the governmental and business -type activities columns (a) are presented on a consolidated basis by column, and (b) are reported on a full accrual, economic resource basis, which recognized all long-term assets and receivables as well as long-term debt and obligations. The City's net assets are reported in three parts — investment in capital assets, net of related debt; restricted net assets; and unrestricted net assets. The City first utilizes restricted resources to finance qualifying activities. The Government -wide Statement of Activities reports both the gross and net cost of each of the City's functions and business -type activities (general government, judicial, security of persons and property, physical environment, transportation, economic environment, mental and physical health, culture and recreation, waterworks utility, airport, solid waste utility, and golf course). General government revenues (property taxes, timber taxes, retail sales and use taxes, business taxes, excise taxes, and other taxes) also support the functions. The Statement of Activities reduces gross expenses (including depreciation) by related program revenues, operating and capital grants and contributions. Program revenues must be directly associated with the function or a business -type activity. Operating grants include operating specific and discretionary (either operating or capital) grants while the capital grants column reflects capital specific grants. General revenues normally cover the net cost, by function or business -type activity. The Government -wide focus is more on the sustainability of the City as an entity and the change in the City's net assets resulting from the current year's activities. FUND FINANCIAL STATEMENTS In the fund financial statements, the financial transactions are recorded in individual funds, each accounted for by a separate set of self -balancing accounts that comprise assets, liabilities, reserves, fund equity, revenues, and expenditures or expenses. The presentation is by major funds in either the governmental or business -type categories. GASB Statement 34 sets forth the minimum criteria for the determination of a major fund. The non -major funds are combined in the fund financial statements and are detailed in the combining section. The governmental major fund statements in the fund financial statement are presented on current financial resources and modified accrual basis of accounting. Since governmental fund statements are presented on a different measurement focus and basis of accounting than the Government -wide statements' governmental column, reconciliation is presented at the end of the The notes to the financial statements are an integralpart of this statement. Basic Financial Statements, 4-20 2007 Comprehensive Annual Financial Report City of Renton, Washington statement, which briefly explains the adjustments necessary to transform the fund statements into the Government -wide presentation. Internal service funds of a government are presented in summary form as part of the proprietary fund financial statements. Since the principal users of the internal services are the City's governmental activities, financial statements for internal service funds are consolidated into the governmental column when presented at the governmental level. These services are reflected in the appropriate functional activity (general government, judicial, security of persons and property, physical environment, transportation, economic environment, mental and physical health, culture and recreation). Interfund fund activity has been eliminated from the Government -wide financial statements. Exceptions are payments in lieu of taxes, external type transactions within the internal service funds (revenue and expenses for interest or services provided to other governmental organizations), and other charges for utilities. Elimination of these charges would distort the direct cost and program revenues for these functions. The City's fiduciary funds are presented in the fund financial statements. Since the assets are being held for the benefit of a third party and cannot be used for obligations of the City, they are not included in the Government -wide statements. The following describes each fund as presented in the fund financial statements. MAJOR FUNDS If oil 01.7►i►VI I OWN W_1 a 01 "0117.E GENERAL FUND The General Fund is the primary operating fund of the City. It is used to account for the resources and disbursements of ordinary City operations that are not required to be accounted for in another fund. These include the costs of legislative and executive departments, court services, finance and legal departments, development services, police and fire departments, human resources and technical services, community services, parks, economic development, streets, library and museum, parking garage maintenance, fire memorial, and fire department's health and wellness programs. The major sources of revenue are property taxes, utility taxes, and sales taxes. Licenses and permits, charges for services, and fines and forfeits provide additional support. Community development block grant activities are accounted for within this fund, which is federally funded. MUNICIPAL FACILITIES CONSTRUCTION FUND The Municipal Facilities Construction Fund accounts for the acquisition and development of municipal facilities. Resources included general and special revenue taxes and Council - approved general obligation bonds. The notes to the financial statements are an integralpart of this statement. Basic Financial Statements, 4-21 2007 Comprehensive Annual Financial Report City of Renton, Washington TRANSPORTATION CAPITAL IMPROVEMENT FUND This fund supports the City of Renton transportation projects and projects linked with various State and Federal funding programs. Many of the projects depend on grants, LIDs, and mitigation revenue. SOUTH LAKE WASHINGTON INFRASTRUCTURE PROJECT FUND The South Lake Washington Infrastructure Project Fund accounts for the infrastructure improvements at the south end of Lake Washington. Primary resources include: REET, sales tax, grants, and GO Bonds that will provide for the design, construction, labor wages and benefits, and equipment required to implement the project. ENTERPRISE FUNDS WATERWORKS UTILITY The Waterworks Utility Fund accounts for all operation and capital improvement programs for water, wastewater, and storm water services within the City. The activities primarily supported by user fees include: administration, billings and collections, debt service, engineering and operation, maintenance and repairs. The primary resources for the capital improvement programs are revenue bond proceeds, grants (as available), and utility collection charges. SOLID WASTE Solid waste, recycling, and yard waste collection services for the City are accounted for in this fund, supported entirely by service fees. The expenses include payment to the City's garbage contractor and other service charges. NON -MAJOR FUNDS ARTERIAL STREET FUND The Arterial Street Fund was established pursuant to state law allocating the one-half cent State Gasoline Tax revenue to cities and towns for construction, improvements, and major repair of streets. LEASED CITY PROPERTY FUND Accounts for revenue and expenditures related to City property leased to outside entities. HOTEL/MOTEL TAX FUND Accounts for monies collected through an increase of one percent in hotel/motel taxes for the purpose of increasing tourism in the City of Renton. The notes to the financial statements are an integralpart of this statement. Basic Financial Statements, 4-22 2007 Comprehensive Annual Financial Report City of Renton, Washington PATHS AND TRAILS RESERVE FUND The Paths and Trails Reserve Fund was created for the purpose of planning, accommodating, and establishing and maintaining certain paths and trails within the City of Renton. SPRINGBROOK WETLANDS BANK FUND The City of Renton established this fund in 2007 for the purpose of providing accounting for the Springbrook Creek Wetland and Habitat Mitigation Bank project. The fund will receive revenue by selling Wetlands Credits to third parties and to the City's internal departments. 1% FOR ART FUND The City of Renton established this fund by contributing one percent of general governmental capital project funding for art projects. CABLE COMMUNICATIONS DEVELOPMENT FUND The Cable Communications Development Fund accounts for funding for promotion and development of cable communications as established by City ordinance. GENERAL GOVERNMENTAL MISCELLANEOUS DEBT SERVICE FUND Accounts for debt service on installment contracts for equipment, City Shop land purchase, the 1984 and 1985 Limited General Obligation Bond issue for equipment and the 1986 Limited Bond issue to finance a community center, library improvements, permanent financing for purchase of a golf course, acquisition of wetland property, and equipment. This fund also includes the 1978 Limited General Obligation Bond Redemption issue to account for debt service on a Council -approved bond, which provided partial funding for construction of the Renton Senior Activity Center and the 1978 Limited General Obligation Bond Redemption issue to account for debt service on a Council -approved bond, which provided partial funding for construction of the Renton Senior Activity Center. 1989 UNLIMITED GENERAL OBLIGATION BOND REDEMPTION FUND Accounts for debt service on a voter -approved bond issue, which provided financing to: acquire, construct, rehabilitate, equip, and develop low-income housing for the elderly. COMMUNITY DEVELOPMENT IMPACT MITIGATION FUND Accounts for monies collected from developers to offset impacts created by their developments to City facilities. FIRE IMPACT MITIGATION FUND Accounts for monies collected from developers to offset impacts created by their developments to City facilities. TRANSPORTATION IMPACT MITIGATION FUND Accounts for monies collected from developers to offset impacts created by their developments to City facilities. The notes to the financial statements are an integralpart of this statement. Basic Financial Statements, 4-23 2007 Comprehensive Annual Financial Report City of Renton, Washington AIRPORT FUND Provides accounting for revenues and expenses, which provides administration, debt services, operation, capital improvements, and maintenance of the Renton Municipal Airport and Will Rodger -Wily Post Memorial Seaplane Base. Sources of support to the fund are leases, fuel charges, investment interest, and grant funding as available. GOLF COURSE FUND The Golf Course Fund was created after the City acquired the Maplewood Golf Course. It accounts for the operation, maintenance, debt service, and capital improvements of the facility. OTHER FUND TYPES INTERNAL SERVICE FUNDS EQUIPMENT RENTAL The Equipment Rental Fund accounts for the costs of maintaining and replacing all City vehicles, computers, and auxiliary equipment except for fire apparatus and replacement of police patrol vehicles. The fund also accounts for communication, data support, and printing services provided to City employees. All equipment costs, including depreciation, are factors in calculating the rates, which are charged to each user department. INSURANCE FUND The Insurance Fund provides accounting for self-insurance services to all City departments, including provisions for losses on property, liability, worker's compensation, unemployment compensation, and the health care program. The Insurance Fund pays expenses and rates that are charged to departments based on use and/or coverage requirements. FIDUCIARY FUNDS Fiduciary funds are used to account for assets held by the City in a trustee capacity or as an agent for individuals, private organizations, other governmental units and/or other funds. The City has one Pension Trust Fund and one Agency Fund. PENSION TRUST FUND FIREMEN'S PENSION FUND The Firemen's Pension Fund accounts for the payment of administrative costs and benefits for retired firefighters and their beneficiaries, who were employed prior to March 1, 1970. Primary revenues sources are general property tax allocations in accordance with actuarial calculations, the fire premium tax, and investment income. The notes to the financial statements are an integralpart of this statement. Basic Financial Statements, 4-24 2007 Comprehensive Annual Financial Report AGENCY FUND City of Renton, Washington SPECIAL DEPOSIT FUND The Special Deposit Fund was established for the purpose of holding or retaining cash deposits or other securities pending fulfillment of certain conditions and/or requirements by the depositor. Refunds are made when all obligations have been met and only upon authorization from the transmitting department. C. MEASUREMENT FOCUS AND BASIS OF ACCOUNTING Basis of Accounting refers to the point at which revenues or expenditures/expenses are recognized in the accounts and reported in the financial statements. It relates to the timing of the measurement made regardless of the measurement focus applied: 1. Accrual Both governmental and business -type activities in the Government -wide financial statements and the proprietary and fiduciary fund financial statements are presented on the accrual basis of accounting. Revenues are recognized when earned and expenses are recognized when incurred. Substantially all government fund revenues are accrued. Property taxes are billed and collected within the same period in which taxes are levied. Subsidies and grants to proprietary funds, which finance either capital or current operations, are reported as non-operating revenue based on GASB Statement 33. In applying GASB Statement 33 to grant revenues, the provider recognizes liabilities and expenses and the recipient recognizes receivables and revenue when the eligibility requirements, including time requirements, are met. Resources transmitted before the eligibility requirements are met, are reported as advances by the provider and deferred revenue by the recipient. 2. Modified Accrual The governmental funds financial statements are presented on the modified basis of accounting. Under the modified accrual basis of accounting, revenues are recorded when susceptible to accrual: i.e., both measurable and available. "Available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. The City considers all revenue reported in the governmental funds to be available if the revenues are collected within sixty days after year-end. Expenditures are generally recognized under the modified accrual basis of accounting when the related liability is incurred. The exception to this general rule is that principal and interest on general obligation long-term debt, if any, is recognized when due. D. ASSETS, LIABILITIES, AND FUND EQUITY 1. Cash and Cash Equivalents The City has defined cash and cash equivalents as cash on hand, demand deposits, and all highly liquid investments (including restricted assets) with maturity of three months or less when purchased. These amounts are classified on the balance sheet or in the statement of net assets as cash and cash equivalents or investments in the various funds. The interest on these investments The notes to the financial statements are an integralpart of this statement. Basic Financial Statements, 4-25 2007 Comprehensive Annual Financial Report City of Renton, Washington is prorated to the applicable funds. Included in this category are all funds invested in the Local Government Investment Pool and Municipal Investor Account. Excluded from this category are cash balances held by Fiscal Agents since the City does not have discretionary use of these funds. 2. Investments (refer to Note 3B.) 3. Receivables and Payables — Amounts owed/payable to/by the City at year-end. Taxes receivable consists of property taxes and related interest and penalties (refer to Note 4). Accrued interest receivable consists of amounts earned on investments, notes, and contracts. Accrued interest payable consists of amounts owed on notes, loans, and contracts. Customer accounts receivable/payable consists of amounts owed from/to private individuals or organizations for goods and services. If the transactions are with another governmental unit, it is accounted for within "due from/to other governments." Special assessments are recorded when levied and are liens against the property benefited. Special assessments receivable consist of current and delinquent assessments and related interest and penalties. Deferred assessments consist of special assessments not due within one year. Receivables have been reported net of estimated uncollectible accounts. Because property taxes, special assessments, and utility billings are considered liens on property, no estimated uncollectible amounts are established. Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to either "due to/from other funds " (i.e., the current portion of interfund loans) or "advances to/from other funds" (i.e., the non-current portion of interfund loans). All other outstanding balances between the governmental activities and business -type activities are reported in the Government -wide financial statements as "internal balances " (Refer to Note 10). Advances between funds, as reported in the fund financial statements, are offset by a fund balance reserve account in applicable governmental funds to indicate that they are not available for appropriation and are not expendable available financial resources. In the Government -wide financial statements, and proprietary fund types in the fund financial statements, long-term liabilities are reported in applicable governmental activities, business -type activities, or proprietary fund type statement of net assets. Unamortized Premium — the unamortized portion of the excess of bonds proceeds over their face value (excluding accrued interest and issuance costs). Deferred Amount -Refunding — The difference between the carrying amount of redeemed/defeased debt and its reacquisition price. This amount is deferred and amortized over the remaining life of the debt, or the life of the new debt, whichever is shorter. The notes to the financial statements are an integralpart of this statement. Basic Financial Statements, 4-26 2007 Comprehensive Annual Financial Report 4. Inventories and prepaid items All City inventories are maintained on City of Renton, Washington consumption basis of accounting where items are purchased for inventory and charged to the budgetary accounts as the items are consumed. Any material inventories at year-end are included in the balance sheet of the appropriate fund. Inventories are carried at cost on the first in, first out — FIFO basis. Certain payments to vendors reflect costs applicable to future accounting periods and are reported as prepaid items in both the Government -wide and fund statements. 5. Capital Assets and Depreciation (refer to Note 5). 6. Deferred Revenues This account includes amounts recognized as receivables, but not revenues in the governmental funds because the revenue recognition criterion has not been met. 7. Custodial Accounts This account reflects the liability for net monetary assets being held by the City in its agency capacity. 8. Compensated Absences The City accrues accumulated unpaid vacation and other leave and associated employee -related costs when earned (or estimated to be earned) by the employee. The non-current portion (the amount estimated to be used in subsequent fiscal years) for governmental funds is maintained separately and represents a reconciling item between the fund and Government -wide presentations. 9. Fund Balance Designations and Reservations In the fund financial statements, governmental funds report reservations of fund balance for amounts that are not available for appropriation or are legally restricted by outside parties for use for a specific purpose. Designations of fund balance represent tentative management plans that are subject to change. The City has the following reserved or designated fund balances. Fund Reserved Purpose of Reservation Amount General Fund Prepaid Postage $ 8,000 So Lk WA Interfund loan 975,000 Infrastructure Fund TOTAL $ 983,000 The notes to the financial statements are an integralpart of this statement. Basic Financial Statements, 4-27 2007 Comprehensive Annual Financial Report City of Renton, Washington Fund Designated Purpose of Designation Amount General Fund Operating cash reserves $8,190,664 General Fund Housing initiative reserves 200,000 General Fund Performing Arts Center revenue funds 50,000 General Fund Neighborhood gathering equipment 10,000 Municipal Facilities Fund Acquisition and development of City facilities 14,820,688 Municipal Facilities Fund Highlands Redevelopment 1,500,000 Municipal Facilities Fund Lake Washington Dry Docks 200,000 Capital Improvement Fund City Infrastructure 4,355,803 Community Development Impact Mitigation Fund Offset impact created by new development 1,498,187 Fire Impact Mitigation Fund Offset impact created by new development 2,344,289 Transportation Mitigation Fund Offset impact created by new development 4,756,973 Arterial Street Fund Construction and improvements of streets 476,327 Leased City Properties Fund Leased Property 1,155,934 Hotel/Motel Tax Fund Increase Tourism 348,017 Paths and Trails Fund Acquisition and maintenance of paths and trails 3,182 Springbrook Wetlands Bank Sale of Wetland Credits 448,000 1% For Art Fund Funding for art projects 121,357 Cable Communications Development Fund Promotion and development of cable 63,779 communications 1989 Unlimited General Obligation Bond Low income housing 613,561 Redemption Fund General Governmental Miscellaneous Debt Service Parking Garage Construction 779,354 TOTAL $41,936,115 10. Net Assets (refer to Note 11). 11. Encumbrances An encumbrance system is maintained to account for commitments resulting from approved purchase orders, contracts, and other commitments. Encumbrances remaining at year-end lapse and are canceled. Upon request by the department and approval of the City Council, encumbrances may be re -appropriated in the following year. E. REVENUES, EXPENDITURES, AND EXPENSES Program Revenues Program revenues include charges for services to customers for goods and services provided, operating grants and contributions, and non-operating grants and contributions within the Government -wide Statement of Activities. Charges for services include business licenses, construction permits, and weapon permits. 2. General Revenues Property taxes, timber taxes, retail taxes, business taxes, excise taxes, and associated penalties and interest, and interest and investment earnings are classified as general revenues within the Government -wide Statement of Activities. The notes to the financial statements are an integralpart of this statement. Basic Financial Statements, 4-28 2007 Comprehensive Annual Financial Report City of Renton, Washington 3. Interfund Transfers Permanent reallocation of resources between funds of the reporting entity are classified as interfund transfers. For purposes of the Government -wide Statement of Activities, all interfund transfers between individual governmental funds have been eliminated. 4. Expenditures/Expenses Expenses in the Government -wide Statement of Activities are reported by function as a governmental activity (general government, judicial, security of persons and property, physical environment, transportation, economic environment, culture and recreation, or interest on long- term debt) or business -type activity (waterworks utility, airport, solid waste utility, or golf course). In the fund financial statements, expenditures of governmental funds are classified by: function, debt service principal and interest payments, or purchases of capital items. Proprietary expenditures are classified as operating or non-operating. 5. Operating and Non-operating Revenues and Expenses Operating revenues and expenses for proprietary funds are those that result from providing services and producing and delivering goods and/or services in connection to the proprietary fund's principle ongoing operations. It includes all revenue and expenses not related to capital and related financing, non -capital financing, or investing activities. All revenues and expenses not meeting this definition are non-operating revenues and expenses. NOTE 2. COMPLIANCE AND ACCOUNTABILITY The City of Renton budgets its funds under Generally Accepted Accounting Principles (GAAP) at the fund level. Annual appropriated budgets are adopted for governmental funds. Budgets for proprietary funds are "management budgets" and are not legally required to be reported. Included in the Required Supplemental and Combining sections of the CAFR are Schedules of Revenues, Expenditures, and Changes in Fund Balances (Budget to Actual) reporting the Actual Budgetary GAAP Basis verses Actual GAAP Basis of Accounting for all legally adopted budgets. There have been no material violations of finance -related legal or contractual provisions, and there have been no expenditures exceeding legal appropriations in any of the funds of the City. A. PROCEDURES FOR ADOPTING THE ORIGINAL BUDGET The City of Renton's budget procedures are mandated by the Chapter 35A.33 of the Revised Code of Washington (RCW). The steps in the budget process are as follows: 1. Prior to November 1, the Mayor submits a proposed budget to the City Council. This budget is based on priorities established by the Council; estimates provided by the City departments during the preceding months; balanced by revenue estimates made by the Mayor. 2. The City Council conducts public hearings on the proposed budget in November and December. 3. The Council makes their adjustments to the proposed budget and adopts, by ordinance, a final balanced budget no later than December 31. The notes to the financial statements are an integralpart of this statement. Basic Financial Statements, 4-29 2007 Comprehensive Annual Financial Report City of Renton, Washington 4. The final operating budget, as adopted, is published and distributed within the first four months of the following year. B. AMENDING THE BUDGET The budget, as adopted, constitutes the legal authority for expenditures. Budgets are adopted on the GAAP basis of accounting. Any comparisons between budget and actual revenues and expenditures are reported under the GAAP basis. The annual budget is adopted with budgetary control at the fund level, so expenditures may not legally exceed appropriations at that level of detail. Transfers or revisions within funds are allowed, but only the City Council has the legal authority to increase or decrease a given fund's annual budget. This is accomplished by City ordinance. The budget was amended 19 times during 2007. Original budgeted inflows as compared to the final budgeted inflows are as follows: The notes to the financial statements are an integralpart of this statement. Basic Financial Statements, 4-30 Increase Original Final (Decrease) Budgeted Budgeted Budgeted Fund Inflows Inflows Inflows General Fund $76,047,584 $76,435,740 $388,156 Arterial Street Fund 565,000 565,000 0 Leased City Properties Fund 960,899 1,367,887 406,988 Hotel/Motel Tax Fund 255,000 295,000 40,000 Paths and Trails Reserve Fund 0 0 0 1 % for Art Fund 60,000 60,000 0 Cable Communications Development Fund 38,900 38,900 0 General Government Miscellaneous Debt Service Fund 4,363,265 4,363,908 643 1989 UGO Bond Redemption Fund 521,000 521,000 0 Downtown Parking Garage 0 0 0 Community Development Impact Mitigation Fund 255,000 255,000 0 Fire Impact Mitigation Fund 540,000 540,000 0 Transportation Impact Mitigation Fund 600,000 600,000 0 Aquatic Center Fund 0 0 0 Municipal Facilities Construction Fund 4,232,000 3,583,335 (648,665) General Government Capital Improvement Fund 17,989,100 29,232,715 11,243,615 South Lake Washington Infrastructure Project Fund 2,892,400 7,925,220 5,032,820 Airport Fund 2,454,191 2,454,191 0 Solid Waste Utility Fund 9,565,016 10,343,016 778,000 Golf Course Fund 2,618,465 2,618,465 0 Waterworks Utility Fund 42,367,375 53,908,375 11,541,000 Equipment Repair and Replacement/ IS Fund 7,232,091 7,232,091 0 Insurance Fund 12,545,750 12,545,750 0 TOTAL $186,103,036 $214,885,593 $28,782,557 The notes to the financial statements are an integralpart of this statement. Basic Financial Statements, 4-30 2007 Comprehensive Annual Financial Report City of Renton, Washington Original budgeted outflows as compared to the final budgeted outflows are as follows: Fund Increase Original Final (Decrease) Budgeted Budgeted Budgeted Outflows Outflows Outflows General Fund $76,781,953 $78,063,294 $1,281,341 Arterial Street Fund 565,000 565,000 0 Leased City Properties Fund 703,521 1,464,741 761,220 Hotet/Motel Tax Fund 255,000 280,000 25,000 Paths and Trails Reserve Fund 0 0 0 1% for Art Fund 60,000 84,560 24,560 Cable Communications Development Fund 78,900 177,048 98,148 General Government Miscellaneous Debt Service Fund 6,070,465 6,071,108 643 1989 UGO Bond Redemption Fund 521,000 521,000 0 Downtown Parking Garage 180,000 180,000 0 Community Development Impact Mitigation Fund 1,100,000 711,038 (388,962) Fire Impact Mitigation Fund 300,000 300,000 0 Transportation Impact Mitigation Fund 3,035,600 3,500,000 464,400 Aquatic Center Fund 192,000 192,297 297 Municipal Facilities Construction Fund 5,050,497 6,990,848 1,940,351 General Government Capital Improvement Fund 23,102,100 33,528,300 10,426,200 South Lake Washington Infrastructure Project Fund 13,313,927 16,871,309 3,557,382 Airport Fund 3,841,464 3,534,809 (306,655) Solid Waste Utility Fund 10,917,695 10,982,188 64,493 Golf Course Fund 2,644,465 2,673,871 29,406 Waterworks Utility Fund 41,967,923 54,696,673 12,728,750 Equipment Repair and Replacement/ IS Fund 8,011,405 9,207,123 1,195,718 Insurance Fund 11,664,387 11,664,387 0 TOTAL $210,357,302 $242,259,594 $31,902,292 NOTE 3. DEPOSITS AND INVESTMENTS A. Deposits The City's deposits and certificates of deposit are insured by the Federal Depository Insurance Corporation (FDIC) and the State of Washington Public Deposit Protection Commission (WPDPC) Act of 1969. B. Investments The City invests excess and inactive funds in accordance with the City's Investment Policy (updated and approved on June 5, 2006), which complies with the guidelines within Chapter 35A.40.050 RCW. This allows for investment of excess cash and inactive cash, directs that the responsibility for determining available cash for investment is placed upon the department administering the funds, and allows for pooling of the cash provided that the allocation of income is proportionate to the investment of each fund. Currently, the City invests in obligations of the U.S. Government, U.S. agency issues, Certificates of Deposit with Washington State banks and savings and loan institutions, the State The notes to the financial statements are an integralpart of this statement. Basic Financial Statements, 4-31 2007 Comprehensive Annual Financial Report City of Renton, Washington of Washington Local Government Investment Pool (LGIP), and general obligations of Washington State municipalities. The LGIP, managed by the Washington State Office of the Treasurer, is comparable to a Rule 2a7 -pools recognized by the Securities and Exchange Commission. A 2a7 -like -pool is an external investment pool that is not registered with the SEC as an investment company, but nevertheless has a policy that it will, and does, operate in a manner consistent with the SEC's Rule 2a7 of the Investment Company Act of 1940. Rule 2a7 allows SEC -registered mutual funds to use amortized cost rather than market value to report net assets and compute share prices. Investments are shown on the entity -wide Statement of Net Assets at fair value or for 2a7 -like pools at amortized cost, which approximates fair value. Investments are reported within Cash and Investments of Governmental Activities and within Cash and Cash Equivalents or Investments of Business -type Activities. C. Deposit and Investment Schedule As of December 31, 2007, the City of Renton had the following investments: Security Type Cost Fair Value Weighted Average Maturity (in years) US Agencies Certificates of Deposit (within WPDPC) Local Governmental Investment Pool (LGIP)* $26,036,646 33,000,000 22,393,105 $26,312,340 33,000,000 22,393,105 0.5486 0.6317 0.0008 TOTAL $81,429,751 $81,705,445 1.1810 Firemen's Pension portion ofLGIP excludedfrom above 454,767 454,767 Federal Farm Credit Bank Total LGIP reported as Cash & Cash Equivalents in Statement of Net Assets (22,847,872) (22,847,872) AAA Investments reported in Statement of Net Assets $59,036,646 $59,312,340 Aaa Credit risk. Credit Risk is the risk that an issuer or other counter party to an investment will not fulfill its obligations. All Agency securities in the City's portfolio are rated "Aaa" by Moody's Investors Service and "AAA" by Standard & Poor — each rating is the highest possible. Certificates of Deposit are insured by the FDIC up to $100,000 and, additionally, by collateral held in a multiple financial institution collateral pool administered by the Washington Public Deposit Protection Commission (WPDPC). The Washington State Local Government Investment Pool (LGIP) is a 2a7 -like -pool and is operated in a manner consistent with the SEC's Rule 2a7 of the Investment Company Act of 1940. Security Type Cost Fair Value Moody's S&P Federal National Mortgage Association $7,032,445 $7,089,670 Aaa AAA Federal Home Loan Bank 6,993,771 7,049,700 Aaa AAA Federal Farm Credit Bank 10,001,550 10,156,250 Aaa AAA Federal Home Loan Mortgage Corporation 2,008,880 2,016,720 Aaa AAA Local Governmental Investment Pool (LGIP) 11,843,248 11,843,248 unrated unrated Municipal Investor Account (MIA) 10,549,857 10,549,857 unrated unrated Certificates of Deposit (within WPDPC) 33,000,000 33,000,000 unrated unrated TOTAL 81,429,751 81,705,445 The notes to the financial statements are an integralpart of this statement. Basic Financial Statements, 4-32 2007 Comprehensive Annual Financial Report City of Renton, Washington The City's Investment Policy directs that the standard of prudence for investment activities shall be the Prudent Investor Standard that states: "Investments shall be made with judgment and care, under circumstances then prevailing, which person of prudence, discretion, and intelligence would use in the management of their own affairs, not for speculation, but for investment purposes, considering the probable safety of their capital as well as the probable income to be derived." Custodial credit risk. Custodial credit risk for investments is the risk that, in the event of the failure of the counter party to a transaction, a government will not be able to recover the value of investment or collateral securities that are in the possession of an outside party. All security transactions, including collateral for repurchase agreements, entered into by the City are conducted on a delivery -versus -payment (DVP) basis. Securities are held by a third -parry custodian designated by the City's Finance and Information Services Administrator. Certificates of Deposit are delivered to and held by the Finance Division. 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 diversifies its investment instruments to avoid incurring unreasonable risk inherent with the over -investment of instruments and issuers as follows: Maximum's per Policy Instrument Maximum Issuer Maximum U.S. Treasuries 100% 100% U.S. Agencies 75% 50% Certificates of Deposit (within WPDPC) 50% 25% Local Governmental Investment Pool (LGIP) 50% 50% Commercial Paper 25% 5% Interest Rate Risk. Interest rate risk is the risk that changes in interest rates over time, adversely affecting the fair value of an investment. The City's portfolio is managed within the parameters established by the Investment Policy, which limits the weighted average maturity of the portfolio to five years. NOTE 4. PROPERTY TAXES The King County Finance Director acts as an agent to collect property taxes levied in the county for all taxing authorities. Taxes are levied annually, January 1, on property value listed as of the prior August 31. Assessed values are established by the King County Assessor at 100 percent of The notes to the financial statements are an integralpart of this statement. Basic Financial Statements, 4-33 0-6 6 months — 1-3 3+ Security Type months 1 year years years Totals US Agencies $0 $4,974,404 $21,062,243 $0 $26,036,646 Certificates of Deposit (within WPDPC) 5,000,000 4,000,000 24,000,000 0 33,000,000 Local Governmental Investment Pool 22,393,105 0 0 0 22,393,105 (LGIP) TOTAL $27,393,105 $8,974,404 $45,062,243 $0 $81,429,751 NOTE 4. PROPERTY TAXES The King County Finance Director acts as an agent to collect property taxes levied in the county for all taxing authorities. Taxes are levied annually, January 1, on property value listed as of the prior August 31. Assessed values are established by the King County Assessor at 100 percent of The notes to the financial statements are an integralpart of this statement. Basic Financial Statements, 4-33 2007 Comprehensive Annual Financial Report City of Renton, Washington fair market value. A revaluation of all property is required every two years; however, King County has the ability to revalue annually. Property taxes levied by the King County Assessor and collected by the King County Finance Director become a lien on the first day of the levy year and may be paid in two equal installments if the total amount exceeds $30. The first half of real property taxes is due on April 30 and the balance is due October 31. Delinquent taxes bear interest at the rate of 12 percent and are subject to additional penalties if not paid as scheduled. No allowance for uncollectible taxes is established because delinquent taxes are considered fully collectible. At year-end, property taxes are recorded as a receivable with the portion not expected to be collected within 60 days offset by deferred revenue. During the year, property tax revenues are recognized when cash is received. The tax rate for general City operations is limited to $3.375 per $1,000 of assessed value (RCW 84.52.043). Of this amount, up to .45 cents per thousand dollars may be designated for contribution to the Firemen's Pension Fund. If a report by a qualified actuary on the condition of the Firemen's Pension Fund establishes that this amount (or portion of) is not necessary to maintain the actuarial soundness of the fund, the amount can be used for any other municipal purpose (RCW 41.16.060). The tax rate limit may be reduced for any of the following reasons: 1. The Levy Limit: the levy limit calculation applies to a taxing district's budget, and not to increases in the assessed value or tax bill of individual properties. Initiative 747 which restricted individual taxing districts from collecting, in any year, more than a one percent increase in their regular, non -voted, levy over the highest levy amount since 1985 was overturned by the courts. However during 2007, the state legislature reinstated this limit with the passage of HB2416. New construction, annexations, and excess levies approved by the voters are not included in the levy limit calculation. If the assessed valuation increases by more than one percent due to revaluation, the levy rate will be decreased. 2. The One Percent Constitution Limit: The Washington State Constitution limits the regular (non -voted) combined property tax rate applied to an individual's property to one percent ($10 per $1,000) on the market valuation. Voters may approve special levies that are added to this figure. If the taxes of all districts exceed this amount, each is proportionately reduced until the total is at or below the one percent limit. 3. The City may voluntarily levy taxes below the legal limit. Special levies approved by the voters are not subject to the above limitations. The City's regular levy for 2008 is $2.57052 and the excess levy for General Obligation Bond debt is $.05330 for a total of $2.62382, per the King County Assessor's 2008 Annual Report. The notes to the financial statements are an integralpart of this statement. Basic Financial Statements, 4-34 2007 Comprehensive Annual Financial Report City of Renton, Washington NOTE 5. CAPITAL ASSETS AND DEPRECIATION A. GENERAL POLICIES Major expenditures for capital assets, including capital leases and major repairs that increase the useful life, are capitalized. The capitalization threshold applied to the City's assets is $5,000. Maintenance, repairs, and minor renewals are accounted for as expenditures or expenses when incurred. All capital assets are valued at historical cost (or estimated cost, where historical cost is not known/or estimated market value for donated assets/or the original historical cost when transferred between proprietary and governmental funds.) The City has acquired certain assets with funding provided by federal financial assistance programs. Depending on the terms of the agreements involved, the federal government could retain an interest in these assets. However, the City has sufficient legal interest to accomplish the purposes for which the assets were acquired, and has included such assets within the applicable statements. The City capitalizes art and historical treasures. Art and historical treasures are expected to be maintained or enhanced over time and thus, are not depreciated. B. GOVERNMENTAL CAPITAL ASSETS Governmental long-lived assets of the City purchased, leased, or constructed are recorded as expenditures in the governmental funds and are capitalized, net of depreciation, in the Government -wide statements. The infrastructure component of GASB 34 for assets acquired after January 1, 1980 was implemented retroactively in 2004. C. PROPRIETARY FUND CAPITAL ASSETS Capital assets of proprietary funds are capitalized in their respective statement of net assets, net of depreciation. D. DEPRECIATION Depreciation on all depreciable assets is provided on the straight-line basis over the following useful lives: Estimated Type of Asset Service Life Buildings and structures, except utility plant 25-50 years Other improvements 25-50 years Utility plant 25-75 years Machinery and equipment 3-20 years Infrastructure 25-50 years The notes to the financial statements are an integralpart of this statement. Basic Financial Statements, 4-35 2007 Comprehensive Annual Financial Report City of Renton, Washington Depreciation Expense was charged to governmental and business -type activities as follows: Governmental Activities Amount General government $3,626,549 Judicial 0 Security of persons and property 654,628 Physical environment 15,652 Transportation 2,297,624 Economic development 295,027 Culture and recreation 1,317,283 Health and human services 47,781 TOTAL Governmental Activities Depreciation Expense $8,254,544 Business -type Activities Amount Waterworks $5,530,611 Airport 409,810 Solid waste 1,313 Golf course 313,868 TOTAL Business -type Activities Depreciation Expense $6,255,602 E. SUMMARY OF CHANGES Description Beginning Increases Decreases Ending Balance Balance GOVERNMENTAL ACTIVITIES Capital assets not being depreciated: Land and land improvements $85,936,207 $3,011,287 $0 $88,947,494 Construction in progress 24,371,783 34,898,679 17,377,423 41,893,039 TOTAL capital not being depreciated $110,307,990 $37,909,966 $17,377,423 $130,840,533 Other capital assets: Buildings and structures $73,623,764 $727,840 $0 $74,351,604 Other improvements 112,044,247 4,486,083 23,464 116,506,866 Machinery and equipment 26,763,698 6,573,815 4,231,159 29,106,354 TOTAL other capital assets at capitalized cost $212,431,709 $11,787,738 $4,254,623 $219,964,824 Less accumulated depreciation for: Buildings and structures $20,079,548 $1,915,174 $0 $21,994,722 Other improvements 34,796,666 3,134,059 0 37,930,725 Machinery and equipment 14,497,276 4,846,977 2,465,956 16,878,297 TOTAL accumulated depreciation $69,373,490 $9,896,210 $2,465,956 $76,803,744 Governmental activities capital assets, net of $253,366,209 $39,801,494 $19,166,090 $274,001,613 depreciation BUSINESS -TYPE ACTIVITIES Capital assets not being depreciated: Land and land improvements $6,976,321 $0 $0 $6,976,321 Construction in progress 4,126,115 3,432,579 1,859,404 5,699,290 TOTAL capital assets not being depreciated $11,102,436 $3,432,579 $1,859,404 $12,675,611 Other capital assets Buildings and structures $15,032,621 $0 $0 $15,032,621 Other improvements 269,748,039 10,915,525 140,751 280,522,813 Machinery and equipment 5,864,463 73,792 0 5,938,255 TOTAL other capital assets at capitalized cost $290,645,123 $10,989,317 $140,751 $301,493,689 Less accumulated depreciation for: Buildings and structures $3,901,075 $332,535 $0 $4,233,610 Other improvements 67,876,503 5,771,871 89,549 73,558,825 Machinery and equipment 4,908,012 151,197 0 5,059,209 TOTAL accumulated depreciation $76,685,590 $6,255,603 $89,549 $82,851,644 Business -type capital assets, net of depreciation $225,061,969 $8,166,293 $1,910,606 $231,317,656 The notes to the financial statements are an integralpart of this statement. Basic Financial Statements, 4-36 2007 Comprehensive Annual Financial Report City of Renton, Washington At the end of 2007, 80 projects comprise the Construction in Progress. Upon completion, the projects will be capitalized in the Government -wide statements in their appropriate categories and in the fund statements for proprietary funds, if applicable. Construction commitments at December 31, 2007, are as follows: NOTE 6. PENSION PLANS With the exception of firefighters employed prior to March 1, 1970, 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 multiple -employer public employee defined benefit and defined contribution retirement plans. 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, PO Box 48380, Olympia, WA 98504-8380. The City is the administrator of the Firefighter Pension Plan for all firefighters employed prior to March 1, 1970. The Firefighter Pension Plan is included within the City of Renton's statements as a pension trust fund. There is no separate GAAP -based audited report. A schedule of employer contributions for six years, prepared by Milliman, Consultants and Actuaries, is included in the Required Supplemental Information section. Additional information from the actuarial report prepared for the Firefighter Pension Plan, by Milliman, Consultants and Actuaries, may be obtained by contacting the City of Renton, Finance Division, 1055 South Grady Way, Renton, WA 98057. The following disclosures are made pursuant to GASB Statement No. 27, Accounting for Pensions by State and Local Governmental Employers. Public Employees' Retirement System (PERS) Plans 1, 2, and 3 Plan Description PERS is a cost-sharing multiple -employer retirement system comprised of three separate plans for membership purposes: Plans 1 and 2 are defined benefit plans and Plan 3 is a defined benefit plan with a defined contribution component. The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-37 Estimated Future Cost to Remaining Estimated Funding Fund — Funding Source Date Cost Total Cost Required Waterworks—charges for services $4,436,146 $61,060,000 $65,496,146 None Airport — charges for services 1,211,941 11,990,000 13,201,941 None General governmental — taxes, charges for 26,919,024 190,564,000 217,483,024 None services, grants Golf course — charges for services 51,202 2,275,000 2,326,202 None NOTE 6. PENSION PLANS With the exception of firefighters employed prior to March 1, 1970, 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 multiple -employer public employee defined benefit and defined contribution retirement plans. 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, PO Box 48380, Olympia, WA 98504-8380. The City is the administrator of the Firefighter Pension Plan for all firefighters employed prior to March 1, 1970. The Firefighter Pension Plan is included within the City of Renton's statements as a pension trust fund. There is no separate GAAP -based audited report. A schedule of employer contributions for six years, prepared by Milliman, Consultants and Actuaries, is included in the Required Supplemental Information section. Additional information from the actuarial report prepared for the Firefighter Pension Plan, by Milliman, Consultants and Actuaries, may be obtained by contacting the City of Renton, Finance Division, 1055 South Grady Way, Renton, WA 98057. The following disclosures are made pursuant to GASB Statement No. 27, Accounting for Pensions by State and Local Governmental Employers. Public Employees' Retirement System (PERS) Plans 1, 2, and 3 Plan Description PERS is a cost-sharing multiple -employer retirement system comprised of three separate plans for membership purposes: Plans 1 and 2 are defined benefit plans and Plan 3 is a defined benefit plan with a defined contribution component. The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-37 2007 Comprehensive Annual Financial Report City of Renton, Washington Membership in the system includes: elected officials; state employees; employees of the Supreme, Appeals, and Superior courts (other than judges currently in a judicial retirement system); employees of legislative committees; community and technical colleges, college and university employees not participating in national higher education retirement programs; judges of district and municipal courts; and employees of local governments. PERS participants, who joined the PERS system by September 30, 1977, are Plan 1 members. Those who joined on or after October 1, 1977; and by either, February 28, 2002 for state and higher education employees, or August 31, 2002 for local government employees, are Plan 2 members unless they exercise an option to transfer their membership to Plan 3. PERS participants joining the system on or after March 1, 2002 for state and higher education employees, or September 1, 2002 for local government employees, have the irrevocable option of choosing membership in either PERS Plan 2 or PERS Plan 3. The option must be exercised within 90 days of employment. An employee is reported in Plan 2 until a choice is made. Employees who fail to choose within 90 days default to PERS Plan 3. PERS defined benefit retirement benefits are financed from a combination of investment earnings and employer and employee contributions. PERS retirement benefit provisions are established in state statute and may be amended only by the State Legislature. Plan 1 retirement benefits are vested after an employee completes five years of eligible service. Plan 1 members are eligible for retirement at any age after 30 years of service, or at age 60 with five years of service, or at age 55 with 25 years of service. The annual benefit is 2 percent of the average final compensation per year of service, capped at 60 percent. The average final compensation is based on the greatest compensation during any 24 eligible consecutive compensation months. Plan 1 retirements from inactive status prior to the age of 65 may receive actuarially reduced benefits. The benefit is actuarially reduced to reflect the choice of a survivor option. A cost -of -living allowance (COLA) is granted at age 66 based on years of service credit times the COLA amount, increased by three percent annually. Plan 1 members may also elect to receive an additional COLA amount (indexed to the Seattle Consumer Price Index), capped at 3 percent annually. To offset the cost of this annual adjustment, the benefit is reduced. Plan 2 members are vested after completion of five years of eligible service. Plan 2 members may retire at age 65 with five years of service, or at 55 with 20 years of service, with an allowance of two percent of the average final compensation per year of service. The average final compensation is based on the greatest compensation during any eligible consecutive 60 - month period. Plan 2 retirements prior to age 65 receive reduced benefits. If retirement is at age 55 or older with 30 years of service, a three percent per year reduction applies; otherwise an actuarial reduction will apply. The benefit is also actuarially reduced to reflect the choice of a survivor option. There is no cap on years of service credit; and a cost -of -living allowance is granted (indexed to the Seattle Consumer Price Index), capped at three percent annually. Plan 3 has a dual benefit structure. Employer contributions finance a defined benefit component, and member contributions finance a defined contribution component. The defined benefit portion provides a benefit calculation at one percent of the average final compensation per year of service. The average final compensation is based on the greatest compensation during any The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-38 2007 Comprehensive Annual Financial Report City of Renton, Washington eligible consecutive 60 -month period. Effective June 7, 2006, Plan 3 members are vested in the defined benefit portion of their plan after ten years of service; or after five years if twelve months were earned after age 44; or after five service credit years earned in PERS 2 prior to June 1, 2003. Plan 3 members are immediately vested in the defined contribution portion of their plan. Vested Plan 3 members are eligible to retire with full benefits at age 65, or at age 55 with 10 years of service. Retirements prior to age 65 receive reduced benefits. If retirement is at age 55 or older with at least 30 years of service, a three percent per year reduction applies; otherwise an actuarial reduction will apply. The benefit is also actuarially reduced to reflect the choice of a survivor option. There is no cap on years of service credit; and Plan 3 provides the same cost -of - living allowance as Plan 2. The defined contribution portion can be distributed in accordance with an option selected by the member, either as a lump sum or pursuant to other options authorized by the Employee Retirement Benefits Board. Judicial Benefit Multiplier Beginning January 1, 2007 through December 31, 2007 judicial members of PERS may choose to participate in the Judicial Benefit Program (JBM). Current justices or judges in PERS 1 and 2 may make a one-time irrevocable election to pay increased contributions that would fund a retirement benefit with a 3.5 percent multiplier. The benefit would be capped at 75 percent of average financial compensation. Judges in PERS Plan 3 can elect a 1.6 percent of pay per year of service benefit, capped at 37.5 percent of average compensation. Members who choose to participate in JBM will accrue service credit at a higher multiplier beginning with the date of their election, pay higher contributions to the Judicial Retirement Account (JRA), and be given the option to increase the multiplier on past judicial service. Members who do not choose to participate will: continue to accrue service credit at the regular multiplier; continue to participate in JRA, if applicable; never be a participant in the JBM Program; and continue to pay contributions at the regular PERS rate. Justice and judges who are newly elected or appointed to judicial service and choose to become PERS members on or after January 1, 2007, or who have not previously opted into PERS membership, are required to participate in the JBM Program. Justice and judges who are newly elected or appointed to judicial service will: return prior PERS Plan if membership and previously been established; be mandated into Plan 2 and not have a Plan 3 transfer choice, if a new PERS member; accrue the higher multiplier for all judicial service; not contribute to JRS; and no t have the option to increase the multiplier for past judicial 04-1 1404 There are 1,188 participating employers in PERS. Membership in PERS consisted of the following as of the latest actuarial valuation date for the plans of September 30, 2006: Retirees and beneficiaries receiving benefits 70,201 Terminated plan members entitled to but not yet receiving benefits 25,610 Active plan members vested 105,215 Active plan members non -vested 49,812 TOTAL 250,838 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-39 2007 Comprehensive Annual Financial Report City of Renton, Washington Funding PP licy Each biennium, the state Pension Funding Council adopts Plan 1 employer contribution rates, Plan 2 employer and employee contributions rates, and Plan 3 employer contribution rates. Employee contribution rates for Plan 1 are established by statute at 6 percent for state agencies and local government unit employees, and 7.5 percent for state government elected officials. The employer and employee contribution rates for Plan 2 and the employer contribution rate for Plan 3 are developed by the Office of the State Actuary to fully fund Plan 2 and the defined benefit portion of Plan 3. All employers are required to contribute at the level established by the Legislature. Under PERS 3, employer contributions finance the defined benefit portion of the plan, and member contributions finance the defined contribution portion. The Employee Retirement Benefits Board sets Plan 3 employee contribution rates. Six rate options are available ranging from 5 to 15 percent; two of the options are graduated rates dependent on the employee's age. The methods used to determine the contribution requirements are established under state statute in accordance with Chapters 41.40 and 41.45 RCW. The required contribution rates expressed as a percentage of current -year covered payroll, as of December 31, 2007, were as follows: Members not participating in JBM: Contributor PERS Plan 1 PERS Plan 2 PERS Plan 3 Employer* 6.13%** 6.13%** 6.13*** Employee 6.00%**** 4.15%**** ***** * The employer rates include the employer administrative expense fee currently at .16%. ** The employer rate for state elected officials is 9.12% for Plan 1 and 6.13% for Plan 2 & 3. *** Plan 3 defined benefit portion only. **** The employee rate for state elected officials in 7.5% for Plan 1 and 4.15% for Plan 2. ***** Variable from 5.0% minimum to 15.0% maximum based on rate selected by the PERS 3 member. Members participating in JBM: Contributor PERS Plan 1 PERS Plan 2 PERS Plan 3 Employer -Local Govt.* 6.13% 6.13% 6.13%** Employee -Local Govt. 12.26% 10.38% 7.50%*** * The employer rates include the employer administrative expense fee currently at .16%. ** Plan 3 defined benefit portion only. * * * Minimum rate. Both the City and the employees made the required contributions. The City's required contributions for years ended December 31, were as follows: Year PERS Plan 1 PERS Plan 2 PERS Plan 3 2007 $85,411 $1,229,641 $196,584 2006 $50,609 $616,903 $92,216 2005 33,340 367,240 51,521 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-40 2007 Comprehensive Annual Financial Report City of Renton, Washington Law Enforcement Officers' and Firefighters' Retirement System (LEOFF) Plans 1 and 2 Plan Description LEOFF is a cost-sharing multiple -employer retirement system comprised of two separate defined benefit plans. LEOFF participants who joined the system by September 30, 1977, are Plan 1 members. Those who joined on or after October 1, 1977, are Plan 2 members. Membership in the system includes all full-time, fully compensated; local law enforcement officers and firefighters. LEOFF membership is comprised primarily of non -state employees, with the exception of the Department of Fish and Wildlife enforcement officers, who were first included prospectively effective July 27, 2003, being an exception. In addition, effective July 24, 2005, current members of PERS who are emergency medical technicians can elect to become members of LEOFF Plan 2. Effective July 1, 2003, the LEOFF Plan 2 Retirement Board was established to provide governance of LEOFF Plan 2. The Board's duties include adopting contribution rates and recommending policy changes to the Legislature for the LEOFF Plan 2 retirement plan. LEOFF defined benefits retirement benefits are financed from a combination of investment earnings, employer and employee contributions, and a special funding situation in which the state pays through state legislative appropriations. LEOFF retirement benefit provisions are established in state statute and may be amended by the State Legislature. Plan 1 members are vested after the completion of five years of eligible service. Plan 1 members are eligible for retirement with five years of service at the age of 50. The benefit per year of service calculated as a percent of final average salary is as follows: Percent of Final Term of Service Average Salary 20 or more years 2.0% 10 but less than 20 years 1.5% 5 but less than 10 years 1.0% The final average salary 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. If membership was established in LEOFF after February 18, 1974, the service retirement benefit is capped at 60 percent of final average salary. A cost -of -living allowance is granted (indexed to the Seattle Consumer Price Index). Plan 2 retirement benefits are vested after the completion of five years of eligible service. Plan 2 members may retire at the age of 50 with 20 years of service, or at age 53 with five years of service, with an allowance of two percent of the final average salary per year of service. The final average salary is based on the highest consecutive 60 months. Plan 2 retirements prior to age 53 are actuarially reduced for each year that the benefit commences prior to age 53 and to reflect the choice of a survivor option. If the member has at least 20 years of service credit and is age 50, the reduction is three percent for each year prior to age 53. There is no cap on years of The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-41 2007 Comprehensive Annual Financial Report City of Renton, Washington service credit; and a cost -of -living allowance is granted (indexed to the Seattle Consumer Price Index), capped at 3 percent annually. There are 383 participating employers in LEOFF. Membership in LEOFF consisted of the following as of the latest actuarial valuation date for the plans of September 30, 2006: Retirees and beneficiaries receiving benefits 8,951 Terminated plan members entitled to but not yet receiving benefits 602 Active plan members vested 12,711 Active plan members non -vested 3,603 TOTAL $25,867 Funding PPglicy Starting on July 1, 2000, Plan 1 employers and employees will contribute zero percent as long as the plan remains fully funded. Employer and employee contribution rates are developed by the Office of the State Actuary to fully fund the plan. Plan 2 employer and employees are required to pay at the level adopted by the LEOFF Plan 2 Retirement Board. All employers are required to contribute at the level required by state law. The Legislature has by means of a special funding arrangement appropriated money from the state General Fund to supplement the current service liability and fund the prior service cost of Plan 2 in accordance with the requirements of the Pension Funding Council and the LEOFF Plan 2 Retirement Board. However, this special funding situation is not mandated by the state constitution and this funding requirement could be returned to the employers by a change in statute. The required contribution rates expressed as a percentage of current -year covered payroll, as of December 31, 2007, were as follows: Contributor LEOFF Plan 1 LEOFF Plan 2 Employer* .16% 5.35%** Employee .00% 8.64% State N/A 3.45% * The employer rates include the employer administration expense fee currently at .16%. ** The employer rate for ports and universities is 8.80%. Both the City and the employees made the required contributions. The City's required contributions for years ended December 31, were as follows: Year LEOFF Plan 1 LEOFF Plan 2 2007 $1,676 $891,932 2006 $2,050 $716,583 2005 2.554 549.001 Public Safety Employee's Retirement System (PSERS,) Plan 2 Plan Description PSERS was created by the 2004 legislature and became effective July 1, 2006. PSERS is a cost- sharing multiple -employer retirement system comprised of a single defined benefit plan, PSERS Plan 2. The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-42 2007 Comprehensive Annual Financial Report City of Renton, Washington PSERS Plan 2 membership includes full-time employees of a covered employer on or before July 1, 2006, who met at least one of the PSERS eligibility criteria, and elected membership during the election period of July 1, 2006 to September 30, 2006; and those full-time employees, hired on or after July 1, 2006 by a covered employer, that meet at lease one of the PSERS eligibility criteria. A "covered employer" is one that participates in PSERS. Covered employers include: State of Washington agencies: Department of Corrections, Department of Natural Resources, Parks and Recreation Commission, Gambling Commission, Washington State Patrol, Liquor Control Board; Washington state counties; and Washington state cities except for Seattle, Tacoma and Spokane. To be eligible for PSERS, 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 that criminal laws of Washington, and carry a firearm as part of the job: or • have primary responsibility to ensure the custody and security or 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 defined benefit retirement benefits are financed from a combination of investment earnings and employer and employee contributions. PSERS retirement benefit provisions are established in state statute and may be amended only by the State Legislature. Plan 2 members are vested after the completion of five years of eligible service. PSERS Plan 2 members may retire at the age of 65 with five years of service, or at the age of 60 with at least 10 years of PSERS service credit, with an allowance of two percent of the average final compensation per year of service. The average final compensation is the monthly average of the member's 60 consecutive highest-paid service credit months, excluding any severance pay such as lump -sum payments for deferred sick leave, vacation or annual leave. Plan 2 retirees 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. There is no cap on years of service credit; and a cost -of -living allowance is granted (indexed to the Seattle Price Index), capped at three percent annually. There are 69 participating employers in PSERS. Membership is PSERS consisted of the following as of the latest actuarial valuation date for the plan of September 30, 2006: Retirees and beneficiaries receiving benefits 0 Terminated plan members entitled to but not yet receiving benefits 0 Active plan members vested 0 Active plan members non -vested 2,073 TOTAL 2,073 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-43 2007 Comprehensive Annual Financial Report City of Renton, Washington Funding Policy Each biennium, the state Pension Funding Council adopts Plan 2 employer and employee contribution rates. The employer and employee contribution rates for Plan 2 are developed by the Office of the State Actuary to fully fund Plan 2. All employers are required to contribute at the level established by the Legislature. The methods used to determine the contribution requirements are established under state statute in accordance with chapters 41.37 and 41.45 RCW. The required contribution rates expressed as a percentage of current year covered payroll, as of December 31, 2007 were as follows: Contributor PSERS Plan 2 Employer* 8.55% Employee 6.57% * The employer rates include the employer administrative expense fee currently at .16%. Both the City and the employees made the required contributions. The City's required contributions for years ended December 31, were as follows: Year PSERS Plan 2 2007 $41,424 2006 $8,006 Firefighter's Pension Plan Description The Firefighter's Pension Plan is a closed, single -employer, defined benefit pension plan established in accordance with RCW 41.18 and Renton Municipal Code. This plan provides retirement and disability benefits, annual cost -of -living adjustments, and death benefits to plan members and beneficiaries. This system was established for firefighters employed prior to March 1, 1970, when the LEOFF retirement system was established. The retirement benefits vest after 20 years of service. Members may retire after 25 years of service regardless of age, and after age 50 with 20 or more years of service. At December 31, 2007, there were 42 members in the System: Retirees and beneficiaries receiving benefits 40 Retirees and beneficiaries currently receiving full retirement through LEOFF 2 Active plan members vested 0 Active plan members non -vested 0 TOTAL 42 Funding Policy Under state law, the Firefighter's Pension Plan is provided an allocation of all monies received by the state from taxes on fire insurance premiums; interest earnings; member contributions made prior to the inception of LEOFF; and City contributions required to meet projected future The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-44 2007 Comprehensive Annual Financial Report City of Renton, Washington pension obligations. Costs of administering the Firefighter's Pension Plan are paid by the Plan. For 2007, this cost was $16,226. An actuarial valuation is done every two years and was completed as of January 1, 2007. The Actuarial Valuation of Firefighters' Pension Fund table is reported in the Required Supplemental Information section, and a recap of the Schedule of Funding Progress for the last five valuations is as follows: * A $29 decrease in the actuarial accrued liabilities was made after the City's financial report was published and before the valuation was released. Significant actuarial assumptions used in the January 1, 2007, valuation include: Valuation date: January 1, 2007 Actuarial cost method: entry age normal Amortization method: 30 -year, closed as of January 1, 2000 Remaining amortization period: 23 years Asset valuation method: fair value Actuarial assumptions: 1) investment rate of return — 5%; 2) projected salary increases — 4%; 3) inflation — 3%; and, 4) cost -of -living adjustments — based upon salary increase assumption for FPF benefits, inflation assumption for LEOFF benefits. The Annual Required Contribution (ARC) was computed using the Entry Age Normal Cost Method. Under this method the projected benefits are allocated on a level basis as a percentage of salary over the earnings of each individual between entry age and assumed exit age. The amount allocated to each year is called the Normal Cost and the portion of the Actuarial Present Value of all benefits not provided for by future Normal Cost payments is called the Actuarial Accrued Liability. Since all members have already retired, the amount of the Normal Cost is zero. The Unfunded Actuarial Accrued Liability (UAAL) is the Actuarial Accrued Liability minus the actuarial value of the Fund's assets. The following Annual Pension Cost and Net Pension Obligation table presents the annual Normal Cost and the ARC as of January 1, 2007, assuming the UAAL is amortized over a closed 30 -year period beginning January 1, 2000. The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-45 Unfunded Actuarial Actuarial Actuarial Value of Accrued Accrued Covered UAAL Assets Liabilities Liabilities Payroll as Valuation (rounded Entry Age (UAAL) (rounded a % of Date to (rounded to (rounded Funded to Covered January 1 thousands) thousands) to Ratio thousands) Payroll 1997 $5,238 $6,444 $1,206 81% $260 464% 2001 7,067 6,780 (287) 104% 0 - 2003 9,189 6,472 (2,717) 142% 0 - 2005 7,777 6,254 *(1,523) 124% 0 - 2007 7,847 6,364 (1,483) 123% 0 - * A $29 decrease in the actuarial accrued liabilities was made after the City's financial report was published and before the valuation was released. Significant actuarial assumptions used in the January 1, 2007, valuation include: Valuation date: January 1, 2007 Actuarial cost method: entry age normal Amortization method: 30 -year, closed as of January 1, 2000 Remaining amortization period: 23 years Asset valuation method: fair value Actuarial assumptions: 1) investment rate of return — 5%; 2) projected salary increases — 4%; 3) inflation — 3%; and, 4) cost -of -living adjustments — based upon salary increase assumption for FPF benefits, inflation assumption for LEOFF benefits. The Annual Required Contribution (ARC) was computed using the Entry Age Normal Cost Method. Under this method the projected benefits are allocated on a level basis as a percentage of salary over the earnings of each individual between entry age and assumed exit age. The amount allocated to each year is called the Normal Cost and the portion of the Actuarial Present Value of all benefits not provided for by future Normal Cost payments is called the Actuarial Accrued Liability. Since all members have already retired, the amount of the Normal Cost is zero. The Unfunded Actuarial Accrued Liability (UAAL) is the Actuarial Accrued Liability minus the actuarial value of the Fund's assets. The following Annual Pension Cost and Net Pension Obligation table presents the annual Normal Cost and the ARC as of January 1, 2007, assuming the UAAL is amortized over a closed 30 -year period beginning January 1, 2000. The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-45 2007 Comprehensive Annual Financial Report City of Renton, Washington Fiscal Year Fiscal Year Fiscal Year Ending Ending Ending Annual required contribution (ARC) 12/31/2005 12/31/2006 12/31/2007 Annual normal cost (BOY) Amortization of UAAL (BOY) Interest to end of year (EOY)* $0 (107,622) (5,919) $0 (107,622) (5,919) $0 (104,731) (5,237) ARC at EOY ($113,541) ($113,541) ($109,968) Interest on NPO Adjustment to ARC ($24,553) (31,545) ($33,604) (44,035) ($38,658) (54,591) Annual pension cost (APC) ($106,649) ($103,110) ($94,035) Employer contributions** Change in NPO $58,029 (164,578) $59,068 (162,178) $59,777 (153,812) NPO at BOY prior year ($446,410) ($610,988) ($773,166) NPO at EOY ($610,988) ($773,166) ($926,978) * Assumed interest rate: 5.5% in 2005 and 2006, 5.0% in 2007 ** Employer contributions are total contributions to the fund net of disbursements for medical and administrative expenses. The Annual Development of Pension Cost is recapped as follows: Fiscal Year Annual Total Change Ending ARC @ Interest on ARC Pension Employer in 12/31 EOY NPO Adjustment Cost (APC) Contributions NPO 2002 $0 ($3,781) ($4,435) $654 $55,730 $(55,076) 2003 0 (7,088) (8,433) 1,347 63,088 (61,741) 2004 (205,680) (10,790) (13,047) (203,423) 63,151 (266,574) 2005 (113,541) (24,553) (31,545) (106,549) 58,029 (164,578) 2006 (113,541) (33,604) (44,035) (103,110) 59,068 (162,178) 2007 (109,968) (38,658) (54,591) (94,035) 59,777 (153,812) Fiscal Year Pension Percentage Obligation Amort. Cost (APC) Ending (NPO) 2005 ($106,549) of ($610,988) December NPO (Gain)/ Amort. (Gain)/ Ending 31 Balance Loss Factor*** Loss Balance 2002 ($118,095) ($55,730) 14.2105 ($4,435) ($118,095) 2003 (179,836) (63,088) 14.0032 (8,433) (179,836) 2004 (446,410) (268,831) 13.7834 (13,047) (446,410) 2005 (610,988) (171,570) 14.1517 (31,545) (610,988) 2006 (733,166) (172,609) 13.8750 (44,035) (773,166) 2007 (926,978) (169,745) 14.1630 (54,591) (926,978) Three year trend information is recapped as follows: Contribution Net Fiscal Year Annual as a Pension Ending Pension Percentage Obligation December 31 Cost (APC) of APC (NPO) 2005 ($106,549) N/A ($610,988) 2006 (103,110) N/A (773,166) 2007 (94,035) N/A (926,978) The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-46 2007 Comprehensive Annual Financial Report City of Renton, Washington Employees are not required to make contributions. The contributions to the System for 2007 include $85,062 from fire insurance premiums and $672,903 of investment income. Benefits and refunds of the defined benefit pension plan are recognized when due and payable in accordance with the terms of the plan. For 2007, $427,012 was paid for benefit payments and $9,059 for medical payments. The Net Pension Obligation moves from ($773,166) to ($926,978) and is included, as an asset, in the City of Renton's Governmental -wide Statement of Net Assets. NOTE 7. OTHER POST EMPLOYMENT BENEFITS In addition to the pension benefits described in Note 6, the City is required to pay post employment benefits in accordance with State statute to all LEOFF 1 (law enforcement officers and firefighters hired prior to October 1, 1977) and Fire Pension (firefighters hired prior to March 1, 1970) retirees. Currently there are 96 LEOFF I retirees who receive necessary medical and hospitalization coverage and five retirees who are covered solely by the Fire Pension Plan and receive medical coverage limited to treatment of service -related disabilities only. Expenditures for post employment health care benefits are recognized as retirees report claims. The City does not have a funding policy at this time and no assets are designated for this purpose. During the year, expenditures of $1,448,660 were recognized for post employment health care. State statute provides that the City's responsibility for medical payments of LEOFF I retirees is secondary to any other coverage retirees receive or are eligible to receive. The City recognizes a potential savings exists when retirees utilize Medicare as primary coverage and the City for secondary coverage and ineligible expenses. Therefore, upon reaching age 65, the City requires the retirees to apply for and utilize Medicare Part B coverage. The City reimburses these Medicare premiums at an average cost of approximately $93.50 per month for 50 LEOFF 1 retirees and 5 Fire Pension retirees. NOTE 8. CONTINGENCIES Liti ag tion The City has recorded in its financial statements all material liabilities, including an estimate for situations that 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/or self-insurance reserves are adequate to pay all known or pending claims. Contingencies under Grant Provisions The City participates in a number of federal and state assisted programs. These grants are subject to audit by the grantors of their representatives. Such audits could result in requests for reimbursement to grantor agencies for expenditures disallowed under the terms of the grants. The City's management believes that such disallowances, if any, will be immaterial. The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-47 2007 Comprehensive Annual Financial Report Bond Indentures City of Renton, Washington The City is in compliance with all significant bond indenture and restrictions, with the following exception. Golf Course net revenues in 2007 were severely impacted by inclement weather, causing it to be temporarily out of compliance with the bond debt service coverage covenant of 125% of annual debt service at the end of 2007. The City has raised rates and has a business plan and strategy that aims to adjust and maintain coverage. Construction Commitments Refer to Note 5. NOTE 9. RISK MANAGEMENT The City of Renton is exposed to various risks of loss related to tort; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The City of Renton protects itself against unforeseen losses by utilizing a three -pronged risk management approach. First, the City self -funds first level losses through its Insurance Fund. Second, excess insurance is purchased to cover medium and large losses. Third, the City reserves the right to utilize the provisions of Chapter 35A.31.060 RCW to fund catastrophic or uninsured losses. This State statute allows cities to levy a non -voted property tax increase to pay for uninsured claims. An analysis of the self-insurance retention levels, limits of insurance, and claims administrator for the major types of coverage are as follows: Expires 12/31/2008 Risk Authority Authority Jail (Police Professional Retention WA Cities Ins $1,000,000 WA Cities Ins Type of Coverage Occurrence Claims Administrator Aggregate Amount Carrier Property — Expires $25,000 WA Cities Ins $500,000,000 (per WA Cities Ins 12/31/2008 Authority occurrence subject to Authority Crime —Expires 1/1/2010 10,000 Arthur J. Gallagher annual aggregate & Travelers sub -limits) Casualty & Surety Liability— Expires 250,000 WA Cities Ins $20,000,000 WA Cities Ins 12/31/2008 Authority (per occurrence) Authority Auto Liability — Expires 25,000 WA Cities Ins ACV or Replacement WA Cities Ins 12/31/2008 Authority Cost; per Occurrence Authority Public Officials (E&O) — $250,000 WA Cities Ins $10,000,000 WA Cities Ins Expires 12/31/2008 Authority Authority Jail (Police Professional $10,000 WA Cities Ins $1,000,000 WA Cities Ins Liability) - Expires 6/1/2008 Authority Authority Equipment breakdown — 5,000* Arthur J. Gallagher $50,000,000 Zurich Expires 1/1/2009 Crime —Expires 1/1/2010 10,000 Arthur J. Gallagher $1,000,000 Travelers Casualty & Surety Airport liability — Expires 0 Arthur J. Gallagher $100,000,000 Ace Property & 1/1/2009 Casualty Underground storage tank — 5,000 Arthur J. Gallagher $2,000,000 Commerce & Expires 1/1/2009 Industry Worker's comp — Expires 350,000 Berkley Risk $1,000,000 Midwest Casualty 1/1/2009 Employee health — Expires 150,000 HMA, Inc N/A SunLife 1/1/2009 * There is a 4 -hour utility interruption clause, prior to the deductible becoming applicable The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-48 2007 Comprehensive Annual Financial Report City of Renton, Washington During 2007, there were no reductions in insurance coverage, and settlements for the last three years have not exceeded insurance coverage. The City of Renton is a member of the Washington Cities Insurance Authority (WCIA). Utilizing Chapter 48.62 RCW (self-insurance regulation) and Chapter 39.34 RCW (Interlocal Cooperation Act), nine cities originally formed WCIA on January 1, 1981. WCIA was created for the purpose of providing a pooling mechanism for jointly purchasing insurance, jointly self- insuring, and/or jointly contracting for risk management services. WCIA has a total of 126 members. New members initially contract for a three-year term and thereafter automatically renew on an annual basis. A one-year withdrawal notice is required before membership can be terminated. Termination does not relieve a former member from its unresolved loss history incurred during membership. Liability coverage is written on an occurrence basis, without deductibles. Coverage includes general, automobile, police, public officials' errors or omissions, stop gap, and employee benefits liability. Limits are $3 million per occurrence self insured layer, and $12 million per occurrence in the re -insured excess layer. The excess layer is insured by the purchase of reinsurance and insurance and is subject to aggregate limits. Total limits are $15 million per occurrence subject to aggregate sublimits in the excess layers. The Board of Directors determines the limits and terms of coverage annually. Insurance coverage for property, automobile physical damage, fidelity, inland marine, and boiler and machinery are purchased on a group basis. Various deductibles apply by type of coverage. Property insurance and auto physical damage are self-funded from the members' deductible to $500,000 for all perils other than flood and earthquake, and insured above that amount by the purchase of reinsurance. In-house services include risk management consultation, loss control field services, claims and litigation administration, and loss analyses. WCIA contracts for the claims investigation consultants for personnel issues and land use problems, insurance brokerage and lobbyist services. WCIA is fully funded by its members, who make annual assessments on a prospectively rated basis, as determined by an outside, independent actuary. The assessment covers loss, loss adjustment, and administrative expenses. As outlined in the interlocal agreement, WCIA retains the right to additionally assess the membership for any funding shortfall. An investment committee, using investment brokers, produces additional revenue by investment of WCIA's assets in financial instruments, which comply with all State guidelines. These revenues directly offset portions of the membership's annual assessment. The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-49 2007 Comprehensive Annual Financial Report City of Renton, Washington A Board of Directors governs WCIA, which is comprised of one designated representative from each member. The Board elects an Executive Committee and appoints a Treasurer to provide general policy direction for the organization. The WCIA Executive Director reports to the Executive Committee and is responsible for conducting the day-to-day operations of WCIA. The City's Risk Management Program is administered by the Human Resources and Risk Management Administrator, with claims being processed by the independent claims administrators noted above. As of December 31, 2007, the City had accrued the following amounts for outstanding claims: NOTE 10. INTERFUND TRANSACTIONS Interfund transactions are classified as follows: 1. Services Provided — Transactions that would be treated as revenues, expenditures, or expenses if they involve external organizations, such as buying goods and services or payments in lieu of taxes, are similarly treated when they involve other funds of the City of Renton. 2. Transfers — Transactions to support the operations of other funds are recorded as "Transfers" and classified with "Other Financing Sources or Uses" in the fund statements. Transfers between governmental or proprietary funds are netted as part of the reconciliation to the Government -wide financial statements. 3. Contributions — Contributions to the capital of enterprise or internal service funds, transfers of capital assets between proprietary and governmental funds, transfers to The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-50 Total Claims Coverage Payable 12/31/2007 Property & liability $792,487 Worker's compensation 794,043 Employee health 1,399,425 TOTAL $2,985,955 NOTE 10. INTERFUND TRANSACTIONS Interfund transactions are classified as follows: 1. Services Provided — Transactions that would be treated as revenues, expenditures, or expenses if they involve external organizations, such as buying goods and services or payments in lieu of taxes, are similarly treated when they involve other funds of the City of Renton. 2. Transfers — Transactions to support the operations of other funds are recorded as "Transfers" and classified with "Other Financing Sources or Uses" in the fund statements. Transfers between governmental or proprietary funds are netted as part of the reconciliation to the Government -wide financial statements. 3. Contributions — Contributions to the capital of enterprise or internal service funds, transfers of capital assets between proprietary and governmental funds, transfers to The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-50 Property & Worker's Employee 2007 Liability Compensation Health Totals IBNR claims at beginning of the year $537,693 $765,089 $1,325,000 $2,627,782 Current year and changes in estimates 1,662,228 863,439 1,739,459 4,265,126 Claims payments (1,407,434) (834,485) (1,665,034) (3,906,953) IBNR claims at end of the year $792,487 $794,043 $1,399,425 $2,985,955 NOTE 10. INTERFUND TRANSACTIONS Interfund transactions are classified as follows: 1. Services Provided — Transactions that would be treated as revenues, expenditures, or expenses if they involve external organizations, such as buying goods and services or payments in lieu of taxes, are similarly treated when they involve other funds of the City of Renton. 2. Transfers — Transactions to support the operations of other funds are recorded as "Transfers" and classified with "Other Financing Sources or Uses" in the fund statements. Transfers between governmental or proprietary funds are netted as part of the reconciliation to the Government -wide financial statements. 3. Contributions — Contributions to the capital of enterprise or internal service funds, transfers of capital assets between proprietary and governmental funds, transfers to The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-50 Property & Worker's Employee 2006 Liability Compensation Health Totals IBNR claims at beginning of the year $610,044 $765,089 $1,050,700 $2,425,833 Current year and changes in estimates 1,840,667 987,554 2,584,817 5,413,038 Claims payments (1,913,018) (987,554) (2,310,517) (5,211,089) IBNR claims at end of the year $537,693 $765,089 $1,325,000 $2,627,782 NOTE 10. INTERFUND TRANSACTIONS Interfund transactions are classified as follows: 1. Services Provided — Transactions that would be treated as revenues, expenditures, or expenses if they involve external organizations, such as buying goods and services or payments in lieu of taxes, are similarly treated when they involve other funds of the City of Renton. 2. Transfers — Transactions to support the operations of other funds are recorded as "Transfers" and classified with "Other Financing Sources or Uses" in the fund statements. Transfers between governmental or proprietary funds are netted as part of the reconciliation to the Government -wide financial statements. 3. Contributions — Contributions to the capital of enterprise or internal service funds, transfers of capital assets between proprietary and governmental funds, transfers to The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-50 2007 Comprehensive Annual Financial Report City of Renton, Washington establish or reduce working capital in other funds, and transfers remaining balances when funds are closed are classified non-operating revenue. 4. Loans/Advances — Loans between funds are classified as interfund loans receivable and payable or as advances to and from other funds in the fund statements. Interfund loans do not affect total fund equity, but advances to other funds are offset by a reservation of fund equity. Loans and advances are subject to elimination upon consolidation. As of December 31, 2007, outstanding interfund balances (resulting from various interfund transactions) were as follows: The following is a recap of interfund loans: Fund Municipal facilities CIP South Lake WA infrastructure Interfund loans Receivable $975,000 Interfund loans Pavab $0 Interfund Loan to South lake WA infrastructure fund 975,000 Interfund Loan from Municipal facilities CIP fund TOTAL* $975,000 $975,000 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-51 Receivables Payables Due From Due To Other Other Fund Funds Funds Purpose General fund $6,905 $0 To accrue 2007 interfund services provide, paid for in 2008 Springbrook Wetlands 448,000 0 Wetland credits sold to Transportation CIP Fund in 2007. Transportation CIP 0 448,000 Wetland credits sold to Transportation CIP Fund in 2007. Waterworks utility 0 6,905 To accrue 2007 interfund services provide, paid for in 2008 Insurance 18,060 18,060 To accrue 2007 interfund services provide, paid for in 2008 TOTAL* $472,965 $472,965 *Difference is the result of rounding individual fund numbers in the aggregate. The following is a recap of interfund loans: Fund Municipal facilities CIP South Lake WA infrastructure Interfund loans Receivable $975,000 Interfund loans Pavab $0 Interfund Loan to South lake WA infrastructure fund 975,000 Interfund Loan from Municipal facilities CIP fund TOTAL* $975,000 $975,000 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-51 2007 Comprehensive Annual Financial Report Transfers for 2007 were as follows: City of Renton, Washington NOTE 11. NET ASSETS The Government -wide and business type fund financial statements utilize a net asset presentation. Net assets are the difference between assets and liabilities. Net assets are categorized as investments in capital assets (net of related debt), restricted, and unrestricted. A. Investment in Capital Assets (net of related debt) is intended to reflect the portion of net assets that are associated with non -liquid, capital assets less outstanding capital asset related debt. The net related debt is the debt less the outstanding liquid assets and any associated unamortized costs. B. Restricted assets are liquid assets (generated from revenues and not bond proceeds), which have third party (statutory, bond covenant, or granting agency) limitations on their use. The City would typically use restricted assets first, as appropriated opportunities arise, but reserve the right to selectively defer the use thereof to a future project or replacement equipment acquisition. The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-52 Transfer Transfer Fund In Out Purpose General $480,355 $480,355 Conversion of Special Revenue funds into General Governmental Funds Arterial street 0 565,000 Contribution for CIP Overlay Projects 1% for Art 60,000 0 From Transportation CIP for Art General debt 1,898,688 2,314,108 Contribution for Debt payments and CIP Projects Downtown Parking Garage 0 179,660 Transfer of Fund Balance to CIP Fund 316 Aquatic Center 0 192,297 Transfer of Fund Balance to CIP Fund 316 Fire Impact 0 300,000 Contribution for Fire Impact Debt Payments Transportation Impact 0 500,000 Contribution to Transportation CIP Transportation CIP 1,065,000 60,000 Contribution for Capital Improvements, Contribution for 1% Art project Municipal CIP 1,871,957 0 Contribution for Capital Improvements South Lake WA Infrastructure 0 784,580 Contribution for South lake WA infrastructure Debt Payments Leased property services 406,988 406,988 Transfer of Fund Balance to the new Fund 108 TOTAL $5,782,988 $5,782,988 NOTE 11. NET ASSETS The Government -wide and business type fund financial statements utilize a net asset presentation. Net assets are the difference between assets and liabilities. Net assets are categorized as investments in capital assets (net of related debt), restricted, and unrestricted. A. Investment in Capital Assets (net of related debt) is intended to reflect the portion of net assets that are associated with non -liquid, capital assets less outstanding capital asset related debt. The net related debt is the debt less the outstanding liquid assets and any associated unamortized costs. B. Restricted assets are liquid assets (generated from revenues and not bond proceeds), which have third party (statutory, bond covenant, or granting agency) limitations on their use. The City would typically use restricted assets first, as appropriated opportunities arise, but reserve the right to selectively defer the use thereof to a future project or replacement equipment acquisition. The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-52 2007 Comprehensive Annual Financial Report Restricted assets are as follows: City of Renton, Washington Fund Purpose Amount Hotel / Motel Tax Tourism $348,017 Arterial Street Road construction 476,327 Cable Communications Cable development 63,779 Paths and Trails Acquire and maintain city trails 3,182 Springbrook Wetlands Bank Accounting for wetlands management 448,000 1% for Art Funding for art projects 121,357 Leased City Properties Leased to outside source 1,155,934 Community Development Impact Mitigation for park development 1,498,187 Municipal Facilities Capital projects 16,520,688 Capital Projects General governmental capital projects 4,355,803 Parking Garage Construction Parking Garage Construction 14,802 South Lake Washington Construction infrastructure for SLW 541,655 Fire Impact Mitigation for fire improvements 2,344,289 Transportation Impact Mitigation for transportation projects 4,756,973 Waterworks Debt service reserves 3,145,309 Golf Course Debt service reserves 441,358 TOTAL $36,235,660 C. Unrestricted assets represent unrestricted liquid assets. The City's management may have plans or tentative commitments to expend resources certain purposes in future periods. Further legal action will be required to authorize the actual expenses or expenditures. NOTE 12. PRIOR YEAR RESTATEMENTS The City had a prior year restatement within the Equipment Rental Fund in the amount of $2,534,024. In 2006 capital assets were recorded as general governmental assets rather than internal service fund assets. This restatement records the assets in the appropriate fund. The 2007 Government -wide Statement of Net Assets was correctly stated, but the Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets, Internal Service Funds (page 6-34) required a prior period adjustment to correctly record the assets as being owned by the Equipment Rental Fund. NOTE 13. SHORT TERM DEBT The City of Renton's short-term debt consists of one interfund loan from the Municipal Facilities CIP Fund to the South Lake Washington Infrastructure Fund, as a means to temporarily fund the project prior to the receipt of contractual project revenues. This loan of an amount no greater than $2,000,000 is payable prior to September 15, 2009, and has an annual interest rate equal to the current rate of interest as established by the State of Washington Investment Pool at the time that each loan advance is made. Short-term activities for the year ended December 31, 2007 was as follows: The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-53 Beginning Ending Balance Balance 12/31/2007 Debt 01/01/2007 Issued Redeemed $2,000,000 $0 $975,000 $0 $975,000 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-53 2007 Comprehensive Annual Financial Report NOTE 14. LONG TERM DEBT City of Renton, Washington The City of Renton's long-term debt consists of General Obligation Debt, repaid mainly from general governmental revenue sources and Proprietary Debt, repaid from proprietary revenues. These debts are accounted for in the following areas: 1) The outstanding general obligation debt is reported in the Government -wide financial statements; 2) The repayment, or debt service of the same, is recorded in the Debt Service Funds; and, 3) The proprietary debt liability and repayment of the same are reported in individual Proprietary Funds. Outstanding debt issues as of December 31, 2007, are as follows: Unlimited 1993 GO Refunding Bonds - Senior Housing 5.20%-6.10% 09/01/93 02/01/09 4,270,000 SUBTOTAL UNLIMITED GO 4,270,000 TOTAL GENERAL OBLIGATION BONDS 62,899,344 Installment Contracts: Issued Maturity Original Issued Type of Debt Interest Rates Date Date Amount GOVERNMENTAL DEBT: 278,172 General Obligation Bonds: 63,177,516 Limited 1997 GO Bonds 5.55%-5.75% 05/01/97 12/01/17 $14,697,744 2000 GO Valley Comm Bonds 4.30%-5.38% 09/15/00 12/01/15 2,551,600 2001 GO Refunding Bonds 2.10%-5.25% 11/01/01 12/01/17 13,505,000 2001 GO Bonds 5.0%-5.25% 11/01/01 12/01/21 6,000,000 2002 GO Bonds 2.50%-5.00% 7/15/02 12/01/22 3,895,000 2006 GO Bonds 4.25%-5.00% 8/08/06 12/01/28 17,980,000 SUBTOTAL LIMITED GO 4.00%-5.00% 11/06/07 12/01/22 58,629,344 Unlimited 1993 GO Refunding Bonds - Senior Housing 5.20%-6.10% 09/01/93 02/01/09 4,270,000 SUBTOTAL UNLIMITED GO 4,270,000 TOTAL GENERAL OBLIGATION BONDS 62,899,344 Installment Contracts: Certificates of Participation 4.51% 09/01/98 06/01/08 278,172 TOTAL INSTALLMENT CONTRACTS 278,172 TOTAL GOVERNMENTAL -TYPE DEBT ISSUANCE 63,177,516 BUSINESS -TYPE DEBT: Revenue Bonds: 1998 Water/Sewer Refunding 4.46% 03/01/98 06/01/13 6,120,000 1999 Golf System Refunding 4.96% 04/01/99 12/01/15 5,040,000 2002 Water/Sewer 4.80% 07/01/02 12/01/22 3,660,000 2003 Water/Sewer Refunding 3.20% 09/15/03 06/01/13 8,035,000 2004 Water/Sewer 4.33% 11/01/04 12/01/27 10,335,000 2007 Water/Sewer 4.00%-5.00% 11/06/07 12/01/22 1,430,000 2007 Water/Sewer Refunding 4.00%-5.00% 11/06/07 12/01/22 8,320,000 TOTAL REVENUE BONDS 42,940,000 Public Works Trust Fund Loans: Sierra Heights Sewer Improvements 2.00% 01/20/92 07/01/12 888,462 Central Renton Sewer Replacement 1.00% 05/04/93 07/01/15 1,631,800 East Renton Interceptor 1.00% 06/07/93 07/01/13 2,542,704 Dayton Avenue NE 2.00% 05/12/94 07/01/14 96,958 NE 27`h/Aberdeen Drainage Improvements 1.00% 05/15/95 07/01/15 731,000 East Kennydale Interceptor 2.00% 01/24/98 07/01/16 2,093,740 Honeycreek Interceptor 2.00% 12/04/95 07/01/16 1,840,568 Corrosion Control Treatment Facilities 1.00% 01/06/97 07/01/17 1,106,000 Maplewood Water Treatment Improvement 0.50% 1/22/02 07/01/21 567,831 Construct CT Pipeline for Wells 0.50% 11/5/02 7/1/22 814,527 Maplewood Water Treatment Improvement 0.50% 06/03/04 07/01/24 4,892,500 TOTAL PUBLIC WORKS TRUST FUND LOANS 17,206,090 Leases: Golf Course Operating Lease 5.25 6/15/07 5/15/11 87,800 TOTAL BUSINESS -TYPE DEBT ISSUANCE 60,233,890 TOTAL AMOUNT ISSUED ON OUTSTANDING DEBT AS OF DECEMBER 31, 2007 $123,411,406 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-54 2007 Comprehensive Annual Financial Report City of Renton, Washington For outstanding debt additions and retirements are summarized as follows: Balanced Balanced Due Owed Owed Within Type of Debt 01/01/2007 Additions Deductions 12/31/2007 One Year GOVERNMENTAL DEBT: General Obligation Bonds: Limited 1997 GO Bonds 1,839,501 0 693,926 1,145,575 655,575 1997 GO Bonds - CAB Long Tenn Interest 1,315,199 113,873 489,673 939,399 594,425 2000 GO Valley Comm Bonds 1,755,000 0 160,000 1,595,000 167,000 2001 GO Refunding Bonds 13,195,000 0 75,000 13,120,000 85,000 2001 GO Bonds 6,000,000 0 0 6,000,000 0 2002 GO Bonds 3,325,000 0 150,000 3,175,000 155,000 2006 GO Bonds 17,980,000 0 0 17,980,000 520,000 SUBTOTAL LIMITED GO 45,409,700 113,873 1,568,599 43,954,974 2,177,000 Unlimited 4,030,000 0 545,000 3,485,000 570,000 1993 GO Refunding Bonds -Senior Housing 1,440,000 0 455,000 985,000 480,000 SUBTOTAL UNLIMITED GO 1,440,000 0 455,000 985,000 480,000 TOTAL GENERAL OBLIGATION BONDS 46,849,700 113,873 2,023,599 44,939,974 2,657,000 Installment Contracts: Certificates of Participation 49,813 0 32,837 16,976 16,976 TOTAL INSTALLMENT CONTRACTS 49,813 0 32,837 16,976 16,976 Employee Leave Benefits (Primarily General Fund 4,193,995 2,674,446 2,428,017 4,440,424 2,531,042 Obligations) TOTAL GENERAL OBLIGATION DEBT 51,093,508 2,788,319 4,484,453 49,397,374 5,205,018 BUSINESS -TYPE DEBT: Revenue Bonds: 1998 Water/Sewer Refunding 4,030,000 0 545,000 3,485,000 570,000 1999 Golf System Refunding 3,090,000 0 285,000 2,805,000 295,000 2002 Water/Sewer 11,500,000 0 8,270,000 3,230,000 110,000 2003 Water/Sewer Refunding 4,885,000 0 1,085,000 3,800,000 1,130,000 2004 Water/Sewer 10,335,000 0 0 10,335,000 0 2007 Water/Sewer 0 1,430,000 0 1,430,000 0 2007 Water/Sewer Refunding 0 8,320,000 0 8,320,000 0 TOTAL REVENUE BONDS 33,840,000 9,750,000 10,185,000 33,405,000 2,105,000 Public Works Trust Fund Loans: Sierra Heights Sewer Improvements 153,858 0 25,642 128,216 25,642 Central Renton Sewer Replacement 716,420 0 87,483 628,937 87,483 East Renton Interceptor 941,990 0 134,570 807,420 134,570 Dayton Avenue NE 40,825 0 5,103 35,722 5,103 NE 27"'/Aberdeen Drainage Improvements 383,307 0 42,590 340,717 42,590 East Kennydale Interceptor 1,168,543 0 116,855 1,051,688 116,855 Honeycreek Interceptor 968,720 0 96,872 871,848 96,872 Corrosion Control Treatment Facilities 542,926 0 49,357 493,569 49,357 Maplewood Water Improvement 454,514 0 30,301 424,213 30,301 Const. CT Pipeline for Wells 685,917 0 42,870 643,047 42,870 Maplewood Water Improvements 4,635,000 0 257,500 4,377,500 257,500 TOTAL PUBLIC WORKS TRUST FUND LOANS 10,692,020 0 889,143 9,802,877 889,143 OPERATING LEASES: Golf Course Cart lease 0 87,800 11,726 76,074 20,919 TOTAL OPERATING LEASES 0 87,800 11,726 76,074 20,919 Employee Leave Benefits 462,947 362,318 110,016 715,249 334,446 TOTAL BUSINESS -TYPE DEBT 44,994,967 10,200,118 11,195,885 43,999,200 3,349,508 GRAND TOTALS $96,088,475 $12,988,437 $15,680,338 $93,396,574 $8,554,526 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-55 2007 Comprehensive Annual Financial Report City of Renton, Washington DEEP DISCOUNT DEBT The 1997 Limited General Obligation Bond issue included capital appreciation bonds that are issued at a deep discount. The deep -discount debt will mature in the years 2008 and 2009 with an accreted value of $1,250,000, and 1,000,000 respectively. The deep -discount debt is reported in the Government -wide financial statements in the amount of $1,145,575, net of the remaining unamortized discount. SPECIAL ASSESSMENT DEBT WITH GOVERNMENTAL COMMITMENT As of December 31, 2007, the City of Renton has no special assessment debt outstanding. DEBT LIMIT CAPACITIES State law provides that debt cannot be incurred in excess of the following percentages of the value of the taxable property of the City: 1.5 percent without a vote of the people provided the indebtedness with a vote is 1 percent or less; 2.5 percent with a vote of the people; 5.0 percent with a vote of the people, provided the indebtedness in excess of 2.5 percent is for utilities; and 7.5 percent with a vote of the people provided the indebtedness in excess of 5.0 percent is for open space development and parks facilities. Table 12 in the Statistical Section shows the computation of legal debt margin for general and special purpose capacities for the City of Renton. REFUNDED DEBT The Water and Sewer Revenue and Refunding Bonds, 2007, were issued on November 6, 2007, in the aggregate principal amount of $9,750,000. The purpose of issuing the bonds was to finance improvements to the City's Waterworks Utility and the refunding of certain outstanding 2002 Water and Sewer Revenue Bonds of the City. The aggregate difference between the refunded and refunding debt is $587,154.31. The total economic gain is $348,797.95 at net present value. The refunding portion of the new bond issue proceeds has been placed in an irrevocable trust to provide for all future debt service payments on certain outstanding 2002 Water and Sewer Bonds. As a result, the refunded bonds are considered to be defeased and the liability has been removed from the City's financial statements. As of December 31, 2007, the total amount of defeased debt outstanding and removed from the financial statements, for this refunding, amounts to $8,160,000. ANNUAL DEBT SERVICE REQUIREMENTS The annual debt service requirements to maturity, including principal and interest, for long-term debt as of December 31, 2007, are as follows: The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-56 2007 Comprehensive Annual Financial Report City of Renton, Washington AMOUNT AVAILABLE FOR DEBT SERVICE Fund balances that have been reserved for debt repayment are $1,392,915 in the debt service funds. NOTE 15 - DEFERRED CHARGES IN PROPRIETARY FUNDS As of December 31, 2007, the Waterworks Utility Fund had deferred charges and other assets in the amount of $638,432 for debt issue costs on the 2002-2004 Revenue Bonds. This amount will be fully amortized by 2022. The Golf Course Fund amount was $35,615 for the 1999 Refunded Bond debt issue costs and discount. This amount will be fully amortized by 2016. NOTE 16. SEGMENT INFORMATION An identifiable activity (or grouping of activities) required to be accounted for separately, which (a) is reported as or within an enterprise fund; (b) for which one or more revenue bonds are outstanding; and, (c) where the revenue stream is pledged for payment of, are required to disclose segment information. The City of Renton has no required segment information to disclose for 2007. NOTE 17. JOINT VENTURES A joint venture is a legal entity or other organization that results from a contractual agreement and that is owned, operated, or governed by two or more participants as a separate and specific activity subject to joint control in which the participants retain (a) an on-going financial interest or (b) an on-going financial responsibility. The City participates in one joint venture. VALLEY COMMUNICATIONS CENTER The "Valley Communications Center" was established August 20, 1976, when an Interlocal Agreement was entered into by four original participating municipal corporations, including the cities of Renton, Kent, Auburn, and Tukwila. Federal Way was formally admitted in 2000. The agreement is sanctioned by the provisions and terms of the Interlocal Cooperation Act pursuant to Chapter 39.34 RCW. The initial duration of the agreement was five years, and thereafter is automatically extended for consecutive five-year periods. The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-57 Governmental Activities Business -type Activities Year Ending December 31 Principal Interest Principal Interest 2008 2,079,551 2,698,248 3,015,062 1,562,639 2009 2,205,000 2,549,448 3,111,138 1,446,376 2010 2,269,000 1,975,553 3,192,270 1,352,405 2011 2,353,000 1,883,688 3,269,177 1,253,538 2012 2,467,000 1,786,176 3,359,143 1,140,793 2013-2017 13,729,000 6,933,868 9,894,113 4,532,525 2018-2022 11,805,000 3,495,892 8,918,054 2,964,368 2023-2027 5,775,000 1,237,325 8,525,000 1,244,362 2028 1,335,000 66,750 TOTAL $44,017,551 $22,626,948 $43,283,957 $15,497,006 AMOUNT AVAILABLE FOR DEBT SERVICE Fund balances that have been reserved for debt repayment are $1,392,915 in the debt service funds. NOTE 15 - DEFERRED CHARGES IN PROPRIETARY FUNDS As of December 31, 2007, the Waterworks Utility Fund had deferred charges and other assets in the amount of $638,432 for debt issue costs on the 2002-2004 Revenue Bonds. This amount will be fully amortized by 2022. The Golf Course Fund amount was $35,615 for the 1999 Refunded Bond debt issue costs and discount. This amount will be fully amortized by 2016. NOTE 16. SEGMENT INFORMATION An identifiable activity (or grouping of activities) required to be accounted for separately, which (a) is reported as or within an enterprise fund; (b) for which one or more revenue bonds are outstanding; and, (c) where the revenue stream is pledged for payment of, are required to disclose segment information. The City of Renton has no required segment information to disclose for 2007. NOTE 17. JOINT VENTURES A joint venture is a legal entity or other organization that results from a contractual agreement and that is owned, operated, or governed by two or more participants as a separate and specific activity subject to joint control in which the participants retain (a) an on-going financial interest or (b) an on-going financial responsibility. The City participates in one joint venture. VALLEY COMMUNICATIONS CENTER The "Valley Communications Center" was established August 20, 1976, when an Interlocal Agreement was entered into by four original participating municipal corporations, including the cities of Renton, Kent, Auburn, and Tukwila. Federal Way was formally admitted in 2000. The agreement is sanctioned by the provisions and terms of the Interlocal Cooperation Act pursuant to Chapter 39.34 RCW. The initial duration of the agreement was five years, and thereafter is automatically extended for consecutive five-year periods. The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-57 2007 Comprehensive Annual Financial Report City of Renton, Washington The purpose of the joint operation, hereafter referred to as Valley Comm, is to provide improved consolidated emergency communications (dispatch) services for police, fire, and medical aid, to the five participating cities and to several subscribing agencies that include: King County Fire Districts 2, 17 (Black Diamond), 20, 26, 40, 43, 44, 47; City of Pacific Police and Fire Departments; City of Black Diamond Police Department; City of Des Moines Police Department; SeaTac Fire Department; North Highline Fire Department; King County EMS Units; and Vashon Island Fire Department. Separate agreements between Valley Comm and the subscribing agencies have been executed, which set forth conditions of services and rates charged. The City of Renton reports its share of equity interest in the Governmental Activities column within the Government -wide financial statements under non-current assets. The following is condensed (unaudited) financial information as of December 31, 2007, on Valley Comm: Valley Comm Renton Interest Assets $23,102,085 22.34%* Liabilities 748,003 TOTAL Equity $22,354,082 $4,144,207 *After removing $3,642,531 in assets not subject to the equity interest calculations. Completed Financial Statements for Valley Comm can be obtained from the Valley Communications Center, 23807 — 98th Avenue South, Kent, WA 98031. NOTE 18. SUBSEQUENT EVENTS On January 4, 2008 the City of Renton issued Water & Sewer Bonds, Series 2008A & 2008B in the amount of $12,010,000. The 2008B were issued as taxable bonds in the amount of $2,035,000. These funds will be used for construction purposes in the Waterworks Fund. The Benson Hill Community was annexed into the City of Renton effective March 1, 2008. This annexation added approximately 16,000 new residents and was incorporated into the final 2008 Budget Document. The City of Renton uses both FAS and MBIA to insure certain Revenue Bonds. As a result the City of Renton reported a material event relating to the downgrading of various Bond Insurers. The following table shows the ratings as of April 7, 2008 on the two Bond Insurers the city uses. Insurer Mood 's S&P Fitch FSA 2/26/08 Aaa 3/17/08 AAA 1/24/08 AAA MBIA 2/26/08 Aaa 2/25/08 AAA 4/4/08 AA On April 7, 2008 the City of Renton passed Ordinance 3938 stating the intend of the City of Renton to build a Facilities Maintenance Shop with General Obligation Bonds issued in 2008 to a maximum of $12.5 million. The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-58 2007 Comprehensive Annual Financial Report City of Renton, Washington SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET TO ACTUAL - GENERAL FUND For the Year Ended December 31, 2007 Required Supplemental Information, 5-1 ACTUAL BUDGET TO GAAP BUDGETED AMOUNTS BUDGETARY DIFFERENCES ORIGINAL FINAL BASIS OVER (UNDER) REVENUES Taxes $ 57,614,993 $ 59,623,105 $ 60,853,487 $ 1,230,382 Licenses and permits 3,739,698 3,739,698 4,051,338 311,640 Intergovernmental revenues 3,465,249 3,465,249 4,247,212 781,963 Charges for services 4,483,299 4,489,699 4,644,129 154,430 Fines and forfeits 2,552,933 1,003,600 2,904,411 1,900,811 Interfund revenues 911,400 2,552,933 1,150,079 (1,402,854) Contributions 117,400 70,300 303,582 233,282 Interest 874,800 873,000 1,142,279 269,279 Miscellaneous revenues 139,300 139,300 84,822 (54,478) TOTAL REVENUES $ 73,899,072 $ 75,956,884 $ 79,381,339 $ 3,424,455 EXPENDITURES Current: General government $ 14,468,993 $ 14,578,235 $ 14,327,626 $ (250,609) Security of persons and property 34,654,693 35,177,695 35,583,500 405,805 Physical environment 2,844,310 2,857,810 2,764,563 (93,247) Transportation 5,572,195 5,572,195 5,508,218 (63,977) Economic environment 5,817,690 5,933,824 5,536,661 (397,163) Mental & physical health 10,600 10,600 13,818 3,218 Culture & recreation 8,808,617 10,960,462 10,701,870 (258,592) Capital outlay 2,196,343 2,597,313 2,401,021 (196,292) Debt service: Interest payment 4,582 4,582 TOTAL EXPENDITURES $ 74,373,441 $ 77,688,134 $ 76,841,859 $ (846,275) EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES $ (474,369) $ (1,731,250) $ 2,539,480 $ 4,270,730 OTHER FINANCING SOURCES (USES) Transfer in $ 86,500 $ 262,660 $ 480,355 $ 217,695 Transfer (out) (346,500) (424,656) (480,355) 55,699 Sale of capital assets 24,218 24,218 TOTAL OTHER FINANCE SOURCES (USES) $ (260,000) $ (161,996) $ 24,218 $ 186,214 NET CHANGE IN FUND BALANCE $ (734,369) $ (1,893,246) $ $ 4,456,944 2,563,698 FUND BALANCE JANUARY 1 $ 734,369 $ 1,893,246 $ 13,918,686 $ 12,025,440 FUND BALANCES JANUARY 1 RESTATED $ 734,369 $ 1,893,246 $ 13,918,686 $ 12,025,440 FUND BALANCE DECEMBER 31 $ $ $ 16,482,384 $ 16,482,384 Required Supplemental Information, 5-1 2007 Comprehensive Annual Financial Report ACTUARIAL VALUATION OF FIREFIGHTERS' PENSION FUND EMPLOYER CONTRIBUTIONS December 31, 2007 City of Renton, Washington * Employer contributions for pension are total contributions to the Fund net of disbursements from the Fund for medical expenses under RCW 41.26.150 and administrative expenses. ** The ARC is documented as 0 for negative amounts prior to 2004. Required Supplemental Information, 5-2 ANNUAL FIRE TOTAL REQUIRED PERCENTAGE EMPLOYER INSURANCE EMPLOYER CONTRIBUTION OFARC FISCAL YEAR ENDING CONTRIBUTIONS* PREMIUMS CONTRIBUTIONS (ARC)" CONTRIBUTED December 31, 2002 $ $ 55,730 $ 55,730 $ N/A % December 31, 2003 63,088 63,088 N/A December 31, 2004 (7,099) 70,250 63,151 (205,680) N/A December 31, 2005 (14,375) 72,404 58,029 (113,541) N/A December 31, 2006 (18,753) 77,821 59,068 (113,541) N/A December 31, 2007 (25,285) 85,062 59,777 (109,968) N/A * Employer contributions for pension are total contributions to the Fund net of disbursements from the Fund for medical expenses under RCW 41.26.150 and administrative expenses. ** The ARC is documented as 0 for negative amounts prior to 2004. Required Supplemental Information, 5-2 2007 Comprehensive Annual Financial Report City of Renton, Washington Non -Major Special Revenue Funds ARTERIAL STREET FUND The Arterial Street Fund was established pursuant to state law allocating the one-half cent State Gasoline Tax revenue to cities and towns for construction, improvements, and major repair of streets. HOTEL/MOTEL TAX FUND Accounts for monies collected through an increase of 1% in hotel/motel taxes for the purpose of increasing tourism in the City of Renton. PATHS AND TRAILS RESERVE FUND The Paths and Trails Reserve Fund was created for the purpose of planning, accommodating, and establishing and maintaining certain paths and trails within the City of Renton. SPRINGBROOK WETLANDS BANK FUND The City of Renton established this fund in 2007 for the purpose of providing accounting for the Springbrook Creek Wetland and Habitat Mitigation Bank project. The fund will receive revenue by selling Wetlands Credits to third parties and to the City's internal departments. 1 % FOR ART FUND The City of Renton established this fund by contributing 1% of general governmental capital project funding for art projects. CABLE COMMUNICATIONS DEVELOPMENT FUND The Cable Communications Development Fund accounts for funding for promotion and development of cable communications as established by City ordinance. Combining Statements & Schedules, 6-1 2007 Comprehensive Annual Financial Report City of Renton, Washington Debt Service Funds 1997 LIMITED GENERAL OBLIGATION BOND REDEMPTION FUND Accounts for debt service on a Council -approved bond issue, which provided funding for the purchase of Renton City Hall (2001 GO Refund Bonds). 1978 LIMITED GENERAL OBLIGATION BOND REDEMPTION FUND Accounts for debt service on a Council -approved bond issue, which provided partial funding for construction of the Renton Senior Activity Center (1997 GO Refunding Bonds). 1989 UNLIMITED GENERAL OBLIGATION BOND REDEMPTION FUND Accounts for debt service on a voter -approved bond issue, which provided financing to acquire, construct, rehabilitate, equip and develop low-income housing for the elderly. SPECIAL ASSESSMENT DEBT FUND The Special Assessment Debt Fund accounts for the special assessment collections. Combining Statements & Schedules, 6-2 2007 Comprehensive Annual Financial Report City of Renton, Washington Capital Project Funds COMMUNITY DEVELOPMENT IMPACT MITIGATION FUND Accounts for monies collected from developers to offset impacts created by their developments to City facilities. FIRE IMPACT MITIGATION FUND Accounts for monies collected from developers to offset impacts created by their developments to City facilities. TRANSPORTATION IMPACT MITIGATION FUND Accounts for monies collected from developers to offset impacts created by their developments to City facilities. MUNICIPAL FACILITIES CONSTRUCTION FUND The Municipal Facilities Construction Fund accounts for the acquisition and development of municipal facilities. Resources included general and special revenue taxes and Council - approved general obligation bonds. TRANSPORTATION CAPITAL IMPROVEMENT FUND This fund supports the City of Renton transportation projects and projects linked with various State and Federal funding programs. Many of the projects depend on grants, LIDS, and mitigation revenue. SOUTH LAKE WASHINGTON INFRASTRUCTURE PROJECT FUND The South Lake Washington Infrastructure Project Fund accounts for the infrastructure improvements at the south end of Lake Washington. Primary resources include: REET, sales tax, grants, and GO Bonds that will provide for the design, construction, labor wages and benefits, and equipment required to implement the project. Combining Statements & Schedules, 6-3 2007 Comprehensive Annual Financial Report City of Renton, Washington Non -Major Proprietary Funds Enterprise Funds AIRPORT FUND Accounts for revenues and expenses for administration, debt services, operation, capital improvements, and maintenance of the Renton Municipal Airport and Will Rodger -Wily Post Memorial Seaplane Base. Sources of support to the fund are leases, fuel charges, investment interest, and grant funding as available. GOLF COURSE FUND The Golf Course Fund was created after the City acquired the Maplewood Golf Course. It accounts for the operation, maintenance, debt service and capital improvements of the facility. Internal Service Funds EQUIPMENT RENTAL The Equipment Rental Fund accounts for the costs of maintaining and replacing all City vehicles and auxiliary equipment, except for fire apparatus and replacement of police patrol vehicles. All equipment costs, including depreciation, are factors in calculating the rates that are charged to each user department. INSURANCE FUND The Insurance Fund provides accounting for self-insurance services to all City departments, including provisions for losses on property, liability, worker's compensation, unemployment compensation, and the health care program. Expenses are paid from the Insurance Fund and rates are charged to departments based on use and/or coverage requirements. Combining Statements & Schedules, 6-4 2007 Comprehensive Annual Financial Report COMBINING BALANCE SHEET OTHER GOVERNMENTAL FUNDS December 31, 2007 Page 1 of 5 City of Renton, Washington Combining Statements & Schedules, 6-5 SPECIAL REVENUE FUNDS ARTERIAL LEASED CITY HOTEL/ SPRINGBROOK ASSETS STREET PROPERTIES MOTELTAX WETLANDS Cash & cash equivalents $ 166,067 $ 518,103 $ 212,601 $ Investments 150,714 - 100,000 Receivables (net of allowances): Customer accounts - 946,530 - Accrued interest & penalty 3,522 - - Due from other funds - - 448,000 Due from other governmental units 156,024 - 35,416 - TOTAL ASSETS $ 476,327 $ 1,464,633 $ 348,017 $ 448,000 LIABILITIES AND FUND BALANCES Liabilities Accounts payable $ - $ 8,742 $ - $ Taxes payable 261,148 Retainage payable 1,739 Deposits 32,981 Accrued employee wages and leave payable 4,089 Total liabilities $ $ 308,699 $ $ - Fund balances Unreserved, designated for: Special revenue funds 476,327 1,155,934 348,017 448,000 Total fund balances $ 476,327 $ 1,155,934 $ 348,017 $ 448,000 TOTAL LIABILITIES AND FUND BALANCES $ 476,327 $ 1,464,633 $ 348,017 $ 448,000 Combining Statements & Schedules, 6-5 2007 Comprehensive Annual Financial Report COMBINING BALANCE SHEET OTHER GOVERNMENTAL FUNDS December 31, 2007 Page 2of5 SPECIAL REVENUE FUNDS City of Renton, Washington PATHS & 1% FOR CABLE COMM. TOTAL ASSETS TRAILS ART & DEVELOPMENT SRF Cash & cash equivalents $ 3,182 $ 121,357 $ 75,757 $ 1,097 Investments - - - 25C Receivables (net of allowances): Customer accounts 1,500 948,030 Accrued interest & penalty - 3,522 Due from other funds 448,000 Due from other governmental units - - - 191,440 TOTAL ASSETS $ 3,182 $ 121,357 $ 77,257 $ 2,938,773 LIABILITIES AND FUND BALANCES Liabilities Accounts payable $ - $ - $ 13,478 $ 22,220 Taxes payable - 261,148 Retainage payable 1,739 Deposits 32,981 Accrued employee wages and leave payable - 4,089 Total liabilities $ - $ - $ 13,478 $ 322,177 Fund balances Unreserved, designated for: Special revenue funds 3,182 121,357 63,779 2,616,596 Total fund balances $ 3,182 $ 121,357 $ 63,779 $ 2,616,596 TOTAL LIABILITIES AND FUND BALANCES $ 3,182 $ 121,357 $ 77,257 $ 2,938,773 Combining Statements & Schedules, 6-6 2007 Comprehensive Annual Financial Report COMBINING BALANCE SHEET OTHER GOVERNMENTAL FUNDS December 31, 2007 Page 3 of 5 City of Renton, Washington LIABILITIES AND FUND BALANCES Liabilities Accounts payable Deferred revenue Total liabilities Fund balances Unreserved. Designated for: Debt service funds Total fund balances TOTAL LIABILITIES AND FUND BALANCES $ 8,350 $ 1,212 $ 9,562 - 3,435 3,435 $ 8,350 $ 4,647 $ 12,997 $ 779,354 $ 613,561 $ 1,392,915 $ 779,354 $ 613,561 $ 1,392,915 $ 787,704 $ 618,208 $ 1,405,912 Combining Statements & Schedules, 6-7 DEBT SERVICE FUNDS GENERAL 1989 UGO BOND TOTAL ASSETS DEBT REDEMPTION DSF Cash & cash equivalents $ 88,638 $ 451,589 $ 540,227 Investments 500,000 150,714 650,714 Receivables (net of allowances): Taxes 180,940 12,283 193,223 Accrued interest & penalty 18,126 3,522 21,648 Due from other governmental units - 100 100 TOTAL ASSETS $ 787,704 $ 618,208 $ 1,405,912 LIABILITIES AND FUND BALANCES Liabilities Accounts payable Deferred revenue Total liabilities Fund balances Unreserved. Designated for: Debt service funds Total fund balances TOTAL LIABILITIES AND FUND BALANCES $ 8,350 $ 1,212 $ 9,562 - 3,435 3,435 $ 8,350 $ 4,647 $ 12,997 $ 779,354 $ 613,561 $ 1,392,915 $ 779,354 $ 613,561 $ 1,392,915 $ 787,704 $ 618,208 $ 1,405,912 Combining Statements & Schedules, 6-7 2007 Comprehensive Annual Financial Report COMBINING BALANCE SHEET OTHER GOVERNMENTAL FUNDS December 31, 2007 Page 4 of 5 City of Renton, Washington Combining Statements & Schedules, 6-8 C.D. IMPACT FIRE IMPACT TRANS. IMPACT TOTAL ASSETS MITIGATION MITIGATION MITIGATION CPF Cash & cash equivalents $ 725,546 $ 856,018 $ 1,231,568 $ 2,813,132 Investments 752,379 1,500,000 3,458,638 5,711,017 Receivables (net of allowances): Accrued interest & penalty 20,262 28,275 66,767 115,304 TOTAL ASSETS $ 1,498,187 $ 2,384,293 $ 4,756,973 $ 8,639,453 LIABILITIES AND FUND BALANCES Liabilities Retainage payable $ - $ 40,004 $ - $ 40,004 Total liabilities $ $ 40,004 $ $ 40,004 Fund balances Unreserved, designated for: Capital projects funds $ 1,498,187 $ 2,344,289 $ 4,756,973 $ 8,599,449 Total fund balances $ 1,498,187 $ 2,344,289 $ 4,756,973 $ 8,599,449 TOTAL LIABILITIES AND FUND BALANCES $ 1,498,187 $ 2,384,293 $ 4,756,973 $ 8,639,453 Combining Statements & Schedules, 6-8 2007 Comprehensive Annual Financial Report COMBINING BALANCE SHEET OTHER GOVERNMENTAL FUNDS December 31, 2007 Page 5 of 5 ASSETS Cash & cash equivalents Investments Receivables (net of allowances): Taxes Customer accounts Accrued interest & penalty Due from other funds Due from other governmental units TOTAL ASSETS LIABILITIES AND FUND BALANCES Liabilities Accounts payable Taxes payable Retainage payable Deposits Deferred revenue Accrued employee wages and leave payable Total liabilities Fund balances Special revenue funds Debt service funds Capital projects funds Total fund balances TOTAL LIABILITIES AND FUND BALANCES City of Renton, Washington Combining Statements & Schedules, 6-9 TOTAL OTHER TOTAL TOTAL TOTAL GOVERNMENTAL SRF DSF CPF FUNDS $ 1,097,067 $ 540,227 $ 2,813,132 $ 4,450,426 250,714 650,714 5,711,017 6,612,445 - 193,223 193,223 948,030 948,030 3,522 21,648 115,304 140,474 448,000 - 448,000 191,440 100 - 191,540 $ 2,938,773 $ 1,405,912 $ 8,639,453 $ 12,984,138 $ 22,220 $ 9,562 $ - $ 31,782 261,148 - 261,148 1,739 40,004 41,743 32,981 - 32,981 - 3,435 3,435 4,089 - 4,089 $ 322,177 $ 12,997 $ 40,004 $ 375,178 $ 2,616,596 $ - $ - $ 2,616,596 - 1,392,915 - 1,392,915 8,599,449 8,599,449 $ 2,616,596 $ 1,392,915 $ 8,599,449 $ 12,608,960 $ 2,938,773 $ 1,405,912 $ 8,639,453 $ 12,984,138 Combining Statements & Schedules, 6-9 2007 Comprehensive Annual Financial Report City of Renton, Washington COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES Combining Statements & Schedules, 6-10 OTHER GOVERNMENTAL FUNDS For the Year Ended December 31, 2007 Page 1 of 5 SPECIAL REVENUE FUNDS ARTERIAL LEASED CITY HOTEU SPRINGBROOK STREET PROPERTIES MOTELTAX WETLANDS REVENUES Taxes $ - $ $ 243,251 $ Intergovernmental revenues 538,634 - Charges for services - 956,911 - Interfund revenues - - 448,000 Contributions - - 50,000 - Interest 24,849 27,422 13,792 Miscellaneous revenues - - - - TOTAL REVENUES $ 563,483 $ 984,333 $ 307,043 $ 448,000 EXPENDITURES Current: General government $ - $ 269,729 $ - $ - Economic environment - 284,430 Culture & recreation - - Capital outlay 116,842 Debt service: Interest payment (300) - TOTAL EXPENDITURES $ - $ 386,271 $ 284,430 $ - EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES $ 563,483 $ 598,062 $ 22,613 $ 448,000 OTHER FINANCING SOURCES (USES) Transfer in $ - $ 406,988 $ - $ - Transfer (out) (565,000) (406,988) TOTAL OTHER FINANCE SOURCES (USES) $ (565,000) $ - $ $ - NET CHANGE IN FUND BALANCE $ $ 598,062 $ 22,613 $ 448,000 (1,517) FUND BALANCE JANUARY 1 $ 477,844 $ 557,872 $ 325,404 $ - FUND BALANCE DECEMBER 31 $ 476,327 $ 1,155,934 $ 348,017 $ 448,000 Combining Statements & Schedules, 6-10 2007 Comprehensive Annual Financial Report City of Renton, Washington COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OTHER GOVERNMENTAL FUNDS For the Year Ended December 31, 2007 Page 2 of 5 Combining Statements & Schedules, 6-11 SPECIAL REVENUE FUNDS PATHS & 1% FOR CABLE COMM. TOTAL TRAILS ART & DEVELOPMENT SRF REVENUES Taxes $ $ $ $ 243,251 Intergovernmental revenues 538,634 Charges for services 956,911 Interfund revenues 448,000 Contributions 50,000 Interest 155 3,411 5,621 75,250 Miscellaneous revenues - 1,500 1,500 TOTAL REVENUES $ 155 $ 3,411 $ 7,121 $ 2,313,546 EXPENDITURES Current: General government $ - $ - $ - $ 269,729 Economic environment - 284,430 Culture & recreation - 128,354 128,354 Capital outlay 20,367 - 137,209 Debt service: Interest payment - - (300) TOTAL EXPENDITURES $ $ 20,367 $ 128,354 $ 819,422 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES $ 155 $ (16,956) $ (121,233) $ 1,494,124 OTHER FINANCING SOURCES (USES) Transfer in $ - $ 60,000 $ $ 466,988 Transfer (out) (971,988) TOTAL OTHER FINANCE SOURCES (USES) $ - $ 60,000 $ $ (505,000) NET CHANGE IN FUND BALANCE $ $ 43,044 $ (121,233) $ 989,124 155 FUND BALANCE JANUARY 1 $ 3,027 $ 78,313 $ 185,012 $ 1,627,472 FUND BALANCE DECEMBER 31 $ 3,182 $ 121,357 $ 63,779 $ 2,616,596 Combining Statements & Schedules, 6-11 2007 Comprehensive Annual Financial Report City of Renton, Washington COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE OTHER GOVERNMENTAL FUNDS For the Year Ended December 31, 2007 Page 3 of 5 DEBT SERVICE FUNDS GENERAL 1989 UGO BOND TOTAL DEBT REDEMPTION DSF REVENUES Taxes $ 2,240,921 $ 518,590 $ 2,759,511 Interest 138,736 23,208 161,944 TOTAL REVENUES $ 2,379,657 $ 541,798 $ 2,921,455 EXPENDITURES Debt service: Debt service: $ 1,110,904 $ 455,000 $ 1,565,904 Interest payment 2,551,950 63,853 2,615,803 TOTAL EXPENDITURES $ 3,662,854 $ 518,853 $ 4,181,707 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES $ (1,283,197) $ 22,945 $ (1,260,252) OTHER FINANCING SOURCES (USES) Transferin $ 1,898,688 $ - $ 1,898,688 Transfer (out) (2,314,108) (2,314,108) TOTAL OTHER FINANCE SOURCES (USES) $ (415,420) $ - $ (415,420) NET CHANGE IN FUND BALANCE $ (1,698,617) $ $ (1,675,672) 22,945 FUND BALANCE JANUARY 1 $ 2,477,971 $ 590,616 $ 3,068,587 FUND BALANCE JANUARY 1 RESTATED $ 2,477,971 $ 590,616 $ 3,068,587 FUND BALANCE DECEMBER 31 $ 779,354 $ 613,561 $ 1,392,915 Combining Statements & Schedules, 6-12 2007 Comprehensive Annual Financial Report City of Renton, Washington COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OTHER GOVERNMENTAL FUNDS For the Year Ended December 31, 2007 Page 4 of 5 Combining Statements & Schedules, 6-13 CAPITAL PROJECT FUNDS C.D. IMPACT FIRE IMPACT TRANS. IMPACT TOTAL MITIGATION MITIGATION MITIGATION CPF REVENUES Charges for services $ 531,328 $ 1,386,955 $ 1,348,109 $ 3,266,392 Interest 71,455 93,481 269,993 434,929 TOTAL REVENUES $ 602,783 $ 1,480,436 $ 1,618,102 $ 3,701,321 TOTAL EXPENDITURES $ - $ - $ - $ - EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES $ 602,783 $ 1,480,436 $ 1,618,102 $ 3,701,321 OTHER FINANCING SOURCES (USES) Transfer (out) $ - $ (300,000) $ (500,000) $ (800,000) TOTAL OTHER FINANCE SOURCES (USES) $ $ (300,000) $ (500,000) $ (800,000) NET CHANGE IN FUND BALANCE $ $ 1,180,436 $ 1,118,102 $ 602,783 2,901,321 FUND BALANCE JANUARY 1 $ 895,404 $ 1,163,853 $ 3,638,871 $ 5,698,128 FUND BALANCE DECEMBER 31 $ 1,498,187 $ 2,344,289 $ 4,756,973 $ 8,599,449 Combining Statements & Schedules, 6-13 2007 Comprehensive Annual Financial Report City of Renton, Washington COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OTHER GOVERNMENTAL FUNDS For the Year Ended December 31, 2007 Page 5of5 Combining Statements & Schedules, 6-14 TOTAL OTHER TOTAL TOTAL TOTAL GOVERNMENTAL SRF DSF CPF FUNDS REVENUES Taxes $ 243,251 $ 2,759,511 $ $ 3,002,762 Intergovernmental revenues 538,634 - 538,634 Charges for services 956,911 3,266,392 4,223,303 Interfund revenues 448,000 - 448,000 Contributions 50,000 - - 50,000 Interest 75,250 161,944 434,929 672,123 Miscellaneous revenues 1,500 - - 1,500 TOTAL REVENUES $ 2,313,546 $ 2,921,455 $ 3,701,321 $ 8,936,322 EXPENDITURES Current: General government $ 269,729 $ $ $ 269,729 Economic environment 284,430 284,430 Culture & recreation 128,354 128,354 Capital outlay 137,209 137,209 Debt service: Principal payment 1,565,904 1,565,904 Interest payment (300) 2,615,803 2,615,503 TOTAL EXPENDITURES $ 819,422 $ 4,181,707 $ $ 5,001,129 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES $ 1,494,124 $ (1,260,252) $ 3,701,321 $ 3,935,193 OTHER FINANCING SOURCES (USES) Transfer in $ 466,988 $ 1,898,688 $ - $ 2,365,676 Transfer (out) (971,988) (2,314,108) (800,000) (4,086,096) TOTAL OTHER FINANCE SOURCES (USES) $ (505,000) $ (415,420) $ (800,000) $ (1,720,420) NET CHANGE IN FUND BALANCE $ $ 2,901,321 $ 2,214,773 989,124 $ (1,675,672) FUND BALANCE JANUARY 1 $ 1,627,472 $ 3,068,587 $ 5,698,128 $ 10,394,187 FUND BALANCE DECEMBER 31 $ 2,616,596 $ 1,392,915 $ 8,599,449 $ 12,608,960 Combining Statements & Schedules, 6-14 2007 Comprehensive Annual Financial Report City of Renton, Washington SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET TO ACTUAL - ARTERIAL STREET FUND For the Year Ended December 31, 2007 Combining Statements & Schedules, 6-15 ACTUAL BUDGET TO GAAP BUDGETED AMOUNTS BUDGETARY DIFFERENCES ORIGINAL FINAL BASIS OVER (UNDER) REVENUES Intergovernmental revenues $ 562,500 $ 562,500 $ 538,634 $ (23,866) Interest 2,500 2,500 24,849 22,349 TOTAL REVENUES $ 565,000 $ 565,000 $ 563,483 $ (1,517) TOTAL EXPENDITURES $ - $ $ - $ EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES $ 565,000 $ 565,000 $ 563,483 $ (1,517) OTHER FINANCING SOURCES (USES) Transfer (out) $ (565,000) $ (565,000) $ (565,000) $ TOTAL OTHER FINANCE SOURCES (USES) $ (565,000) $ (565,000) $ (565,000) $ NET CHANGE IN FUND BALANCE $ $ $ (1,517) $ (1,517) FUND BALANCE JANUARY 1 $ $ $ 477,844 $ 477,844 FUND BALANCE DECEMBER 31 $ $ $ 476,327 $ 476,327 Combining Statements & Schedules, 6-15 2006 Comprehensive Annual Financial Report City of Renton, Washington SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET TO ACTUAL - LEASED CITY PROPERTIES For the Year Ended December 31, 2007 ACTUAL BUDGET TO GAAP BUDGETED AMOUNTS BUDGETARY DIFFERENCES ORIGINAL FINAL BASIS OVER (UNDER) REVENUES Charges for services $ 960,899 $ 960,899 $ 956,911 $ (3,988) Interest - - 27,422 27,422 TOTAL REVENUES $ 960,899 $ 960,899 $ 984,333 $ 23,434 EXPENDITURES Current: General government Capital outlay Debt service: Principal payment Interest payment TOTAL EXPENDITURES EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES OTHER FINANCING SOURCES (USES) Transfer in Transfer (out) TOTAL OTHER FINANCE SOURCES (USES) $ 576,321 $ 1,123,731 $ 269,729 $ (854,002) - 116,956 116,842 (114) 120,000 120,000 - (120,000) 7,200 7,200 (300) (7,500) $ 703,521 $ 1,367,887 $ 386,271 $ (981,616) $ 257,378 $ (406,988) $ 1,005,050 598,062 $ $ - $ 406,988 $ 406,988 $ - (406,988) (406,988) NET CHANGE IN FUND BALANCE $ 257,378 $ (406,988) $ 598,062 $ 1,005,050 FUND BALANCE JANUARY 1 $ - $ 406,988 $ 557,872 $ 150,884 FUND BALANCE DECEMBER 31 $ 257,378 $ - $ 1,155,934 $ 1,155,934 Combining Statements & Schedules, 6-16 2007 Comprehensive Annual Financial Report City of Renton, Washington SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET TO ACTUAL - HOTEUMOTEL TAX FUND For the Year Ended December 31, 2007 Combining Statements & Schedules, 6-17 ACTUAL BUDGET TO GAAP BUDGETED AMOUNTS BUDGETARY DIFFERENCES ORIGINAL FINAL BASIS OVER (UNDER) REVENUES Taxes $ 180,000 $ 220,000 $ 243,251 $ 23,251 Contributions 65,000 65,000 50,000 (15,000) Interest 10,000 10,000 13,792 3,792 TOTAL REVENUES $ 255,000 $ 295,000 $ 307,043 $ 12,043 EXPENDITURES Current: Economic environment $ 255,000 $ 295,000 $ 284,430 $ (10,570) TOTAL EXPENDITURES $ 255,000 $ 295,000 $ 284,430 $ (10,570) EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES $ - $ $ 22,613 $ 22,613 TOTAL OTHER FINANCE SOURCES (USES) $ $ - $ - $ - NET CHANGE IN FUND BALANCE $ $ $ 22,613 $ 22,613 FUND BALANCE JANUARY 1 $ $ $ 325,404 $ 325,404 FUND BALANCE DECEMBER 31 $ $ $ 348,017 $ 348,017 Combining Statements & Schedules, 6-17 2007 Comprehensive Annual Financial Report City of Renton, Washington SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET TO ACTUAL - PATHS AND TRAILS FUND For the Year Ended December 31, 2007 Combining Statements & Schedules, 6-18 ACTUAL BUDGET TO GAAP BUDGETED AMOUNTS BUDGETARY DIFFERENCES ORIGINAL FINAL BASIS OVER (UNDER) REVENUES Interfund revenues - - Interest $ $ $ 155 $ 155 TOTALREVENUES $ $ $ 155 $ 155 TOTAL EXPENDITURES $ $ $ $ - EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES $ $ $ 155 $ 155 TOTAL OTHER FINANCE SOURCES (USES) $ $ $ $ - NET CHANGE IN FUND BALANCE $ $ $ 155 $ 155 FUND BALANCE JANUARY 1 $ $ $ 3,027 $ 3,027 FUND BALANCE DECEMBER 31 $ $ $ 3,182 $ 3,182 Combining Statements & Schedules, 6-18 2007 Comprehensive Annual Financial Report City of Renton, Washington SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET TO ACTUAL - SPRINGBROOK WETLANDS BANK FUND For the Year Ended December 31, 2007 REVENUES Interfund revenues TOTALREVENUES TOTAL EXPENDITURES EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES TOTAL OTHER FINANCE SOURCES (USES) NET CHANGE IN FUND BALANCE $ ACTUAL BUDGET TO GAAP BUDGETED AMOUNTS FUND BALANCE JANUARY 1 BUDGETARY DIFFERENCES ORIGINAL FINAL - $ - BASIS OVER (UNDER) $ $ $ 448,000 $ 448,000 $ $ $ 448,000 $ 448,000 $ $ 448,000 $ $ 448,000 NET CHANGE IN FUND BALANCE $ $ $ 448,000 $ 448,000 FUND BALANCE JANUARY 1 $ $ $ - $ - FUND BALANCE DECEMBER 31 $ $ $ 448,000 $ 448,000 Combining Statements & Schedules, 6-19 2007 Comprehensive Annual Financial Report City of Renton, Washington SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET TO ACTUAL - 1 % FOR ART FUND For the Year Ended December 31, 2007 Combining Statements & Schedules, 6-20 ACTUAL BUDGET TO GAAP BUDGETED AMOUNTS BUDGETARY DIFFERENCES ORIGINAL FINAL BASIS OVER (UNDER) REVENUES Interest $ - $ - $ 3,411 $ 3,411 TOTAL REVENUES $ $ $ 3,411 $ 3,411 EXPENDITURES Current: Capital outlay $ 60,000 $ 84,560 $ 20,367 $ (64,193) Debt service: TOTAL EXPENDITURES $ 60,000 $ 84,560 $ 20,367 $ (64,193) EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES $ (60,000) $ (84,560) $ (16,956) $ 67,604 OTHER FINANCING SOURCES (USES) Transfer in $ 60,000 $ 60,000 $ 60,000 $ - TOTAL OTHER FINANCE SOURCES (USES) $ 60,000 $ 60,000 $ 60,000 $ - NET CHANGE IN FUND BALANCE $ $ (24,560) $ 43,044 $ 67,604 FUND BALANCE JANUARY 1 24,560 78,313 53,753 FUND BALANCE DECEMBER 31 $ - $ - $ 121,357 $ 121,357 Combining Statements & Schedules, 6-20 2007 Comprehensive Annual Financial Report City of Renton, Washington SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET TO ACTUAL - CABLE COMMUNICATIONS DEVELOPMENT FUND For the Year Ended December 31, 2007 Combining Statements & Schedules, 6-21 ACTUAL BUDGET TO GAAP BUDGETED AMOUNTS BUDGETARY DIFFERENCES ORIGINAL FINAL BASIS OVER (UNDER) REVENUES Taxes $ 35,000 $ 35,000 $ - $ (35,000) Interest 2,400 2,400 5,621 3,221 Miscellaneous revenues 1,500 1,500 1,500 - TOTAL REVENUES $ 38,900 $ 38,900 $ 7,121 $ (31,779) EXPENDITURES Current: Culture & recreation $ 78,900 $ 177,048 $ 128,354 $ (48,694) Debt service: TOTAL EXPENDITURES $ 78,900 $ 177,048 $ 128,354 $ (48,694) EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES $ (40,000) $ (138,148) $ (121,233) $ 16,915 TOTAL OTHER FINANCE SOURCES (USES) $ - $ - $ - $ - NET CHANGE IN FUND BALANCE $ (40,000) $ (138,148) $ (121,233) $ 16,915 FUND BALANCE JANUARY 1 $ 40,000 $ 138,148 $ 185,012 $ 46,864 FUND BALANCE DECEMBER 31 $ - $ - $ 63,779 $ 63,779 Combining Statements & Schedules, 6-21 2007 Comprehensive Annual Financial Report City of Renton, Washington SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET TO ACTUAL - GENERAL GOVERNMENTAL MISCELLANEOUS DEBT SERVICE FUND For the Year Ended December 31, 2007 ACTUAL BUDGET TO GAAP BUDGETED AMOUNTS BUDGETARY DIFFERENCES ORIGINAL FINAL BASIS OVER (UNDER) REVENUES Taxes $ 2,440,820 $ 2,440,820 $ 2,240,921 $ (199,899) Interest 24,400 24,400 138,736 114,336 TOTAL REVENUES $ 2,465,220 $ 2,465,220 $ 2,379,657 $ (85,563) EXPENDITURES Debt service: Principal payment Interest payment TOTAL EXPENDITURES EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES OTHER FINANCING SOURCES (USES) Transfer in Transfer (out) TOTAL OTHER FINANCE SOURCES (USES) NET CHANGE IN FUND BALANCE FUND BALANCE JANUARY 1 Prior Period Adjustment FUND BALANCE JANUARY 1 FUND BALANCE DECEMBER 31 $ 1,111,900 $ 1,111,900 $ 1,110,904 $ (996) 2,645,100 2,645,100 2,551,950 (93,150) $ 3,757,000 $ 3,757,000 $ 3,662,854 $ (94,146) $ (1,291,780) $ (1,291,780) $ (1,283,197) $ 8,583 $ 1,898,045 $ 1,898,688 $ 1,898,688 $ (2,313,465) (2,314,108) (2,314,108) $ (415,420) $ (415,420) $ (415,420) $ - $ (1,707,200) $ (1,707,200) $ (1,698,617) $ 8,583 $ 1,707,200 $ 1,707,200 $ 2,477,971 $ 770,771 $ 1,707,200 $ 1,707,200 $ 2,477,971 $ 770,771 $ - $ - $ 779,354 $ 779,354 Combining Statements & Schedules, 6-22 2007 Comprehensive Annual Financial Report City of Renton, Washington SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET TO ACTUAL - 1989 UNLIMITED GENERAL OBLIGATION BOND REDEMPTION FUND (Coulon Park) For the Year Ended December 31, 2007 ACTUAL BUDGET TO GAAP BUDGETED AMOUNTS BUDGETARY DIFFERENCES ORIGINAL FINAL BASIS OVER (UNDER) REVENUES Taxes $ 516,000 $ 516,000 $ 518,590 $ 2,590 Interest 5,000 5,000 23,208 18,208 TOTAL REVENUES $ 521,000 $ 521,000 $ 541,798 $ 20798 EXPENDITURES Current: Debt service: Principal payment Interest payment TOTAL EXPENDITURES EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES TOTAL OTHER FINANCE SOURCES (USES) $ 455,000 $ 455,000 $ 455,000 $ 66,000 66,000 63,853 (2,147) $ 521,000 $ 521,000 $ 518,853 $ (2,147) $ - $ $ 22,945 $ 22,945 NET CHANGE IN FUND BALANCE $ $ $ 22,945 $ 22,945 FUND BALANCE JANUARY 1 590,616 590,616 FUND BALANCE DECEMBER 31 $ $ $ 613,561 $ 61371 Combining Statements & Schedules, 6-23 2007 Comprehensive Annual Financial Report City of Renton, Washington SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET TO ACTUAL - MUNICIPAL FACILITIES CAPITAL IMPROVEMENT FUND For the Year Ended December 31, 2007 Combining Statements & Schedules, 6-24 ACTUAL BUDGET TO GAAP BUDGETED AMOUNTS BUDGETARY DIFFERENCES ORIGINAL FINAL BASIS OVER (UNDER) REVENUES Taxes $ 900,000 $ 900,000 $ 2,352,213 $ 1,452,213 Intergovernmental revenues - - 67,754 67,754 Interest 100,000 100,000 685,333 585,333 TOTAL REVENUES $ 1,000,000 $ 1,000,000 $ 3,105,300 $ 2,105,300 EXPENDITURES Current: Economic environment $ 50,000 $ 83,000 $ 75,498 $ (7,502) Capital outlay 5,000,497 6,907,848 3,838,264 (3,069,584) TOTAL EXPENDITURES $ 5,050,497 $ 6,990,848 $ 3,913,762 $ (3,077,086) EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES $ (4,050,497) $ (5,990,848) $ (808,462) $ 5,182,386 OTHER FINANCING SOURCES (USES) Transfer in $ 3,232,000 $ 2,583,335 $ 1,871,957 $ (711,378) Transfer (out) (179,660) (179,660) TOTAL OTHER FINANCE SOURCES (USES) $ 3,232,000 $ 2,583,335 $ 1,692,297 $ (531,718) NET CHANGE IN FUND BALANCE $ (818,497) $ (3,407,513) $ 883,835 $ 4,650,668 FUND BALANCE JANUARY 1 $ 818,497 $ 3,407,513 $ 15,651,655 $ 12,244,142 FUND BALANCE DECEMBER 31 $ - $ - $ 16,535,490 $ 16,894,810 Combining Statements & Schedules, 6-24 2007 Comprehensive Annual Financial Report City of Renton, Washington SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET TO ACTUAL - GENERAL GOVERNMENT CAPITAL IMPROVEMENT FUND For the Year Ended December 31, 2007 Combining Statements & Schedules, 6-25 ACTUAL BUDGET TO GAAP BUDGETED AMOUNTS BUDGETARY DIFFERENCES ORIGINAL FINAL BASIS OVER (UNDER) REVENUES Licenses and permits $ 1,600,000 $ 1,800,000 $ 1,776,892 $ (23,108) Intergovernmental revenues 12,788,500 23,317,715 2,779,780 (20,537,935) Charges for services - - 55 55 Special assessments 51,723 51,723 Interest - (37,379) (37,379) TOTAL REVENUES $ 14,388,500 $ 25,117,715 $ 4,571,071 $ (20,546,644) EXPENDITURES Current: Capital outlay $ 23,042,100 $ 33,468,300 $ 9,685,824 $ (23,782,476) TOTAL EXPENDITURES $ 23,042,100 $ 33,468,300 $ 9,685,824 $ (23,782,476) EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES $ (8,653,600) $ (8,350,585) $ (5,114,753) $ 3,235,832 OTHER FINANCING SOURCES (USES) Proceeds of long-term debt $ - $ 50,000 $ - $ (50,000) Transfer in 3,600,600 4,065,000 1,065,000 (3,000,000) Transfer (out) (60,000) (60,000) (60,000) TOTAL OTHER FINANCE SOURCES (USES) $ 3,540,600 $ 4,055,000 $ 1,005,000 $ (3,050,000) NET CHANGE IN FUND BALANCE $ (5,113,000) $ (4,295,585) $ (4,109,753) $ 185,832 FUND BALANCE JANUARY 1 $ 5,113,000 $ 4,295,585 $ 8,465,556 $ 4,169,971 FUND BALANCE DECEMBER 31 $ - $ - $ 4,355,803 $ 4,355,803 Combining Statements & Schedules, 6-25 2007 Comprehensive Annual Financial Report City of Renton, Washington SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET TO ACTUAL - SOUTH LAKE WASHINGTON INFRASTRUCTURE For the Year Ended December 31, 2007 EXPENDITURES Current: Physical environment Transportation Economic environment Capital outlay Debt service: Interest payment TOTAL EXPENDITURES EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES OTHER FINANCING SOURCES (USES) Transfer (out) TOTAL OTHER FINANCE SOURCES (USES) $ 800,000 $ 1,045,299 $ - $ (1,045,299) - 30,000 895,140 865,140 175,647 203,000 - (203,000) 11,553,700 14,808,430 13,257,705 (1,550,725) - - 26,538 26,538 $ 12,529,347 $ 16,086,729 $ 14,179,383 $ (1,907,346) $ (9,636,947) $ (8,161,509) $ (10,325,471) $ (2,163,962) $ (784,580) $ (784,580) $ (784,580) $ $ (784,580) $ (784,580) $ (784,580) $ NET CHANGE IN FUND BALANCE $ (10,421,527) $ (8,946,089) ACTUAL BUDGET TO GAAP FUND BALANCE JANUARY 1 BUDGETED AMOUNTS BUDGETARY DIFFERENCES $ 2,705,617 ORIGINAL FINAL BASIS OVER (UNDER) REVENUES Taxes $ $ 1,717,621 $ 490,414 $ (1,227,207) Licenses and permits 268,000 - (268,000) Intergovernmental revenues 2,054,300 4,961,447 2,158,450 (2,802,997) Charges for services 838,100 978,152 1,181,392 203,240 Interest - - 23,656 23,656 TOTAL REVENUES $ 2,892,400 $ 7,925,220 $ 3,853,912 $ (4,071,308) EXPENDITURES Current: Physical environment Transportation Economic environment Capital outlay Debt service: Interest payment TOTAL EXPENDITURES EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES OTHER FINANCING SOURCES (USES) Transfer (out) TOTAL OTHER FINANCE SOURCES (USES) $ 800,000 $ 1,045,299 $ - $ (1,045,299) - 30,000 895,140 865,140 175,647 203,000 - (203,000) 11,553,700 14,808,430 13,257,705 (1,550,725) - - 26,538 26,538 $ 12,529,347 $ 16,086,729 $ 14,179,383 $ (1,907,346) $ (9,636,947) $ (8,161,509) $ (10,325,471) $ (2,163,962) $ (784,580) $ (784,580) $ (784,580) $ $ (784,580) $ (784,580) $ (784,580) $ NET CHANGE IN FUND BALANCE $ (10,421,527) $ (8,946,089) $ (11,110,051) $ (2,163,962) FUND BALANCE JANUARY 1 $ 10,421,527 $ 8,946,089 $ 11,651,706 $ 2,705,617 FUND BALANCE DECEMBER 31 $ - $ - $ 541,655 $ 541,655 Combining Statements & Schedules, 6-26 2007 Comprehensive Annual Financial Report City of Renton, Washington COMBINING STATEMENT OF NET ASSETS NON -MAJOR ENTERPRISE FUNDS December 31, 2007 Page 1 of 2 Combining Statements & Schedules, 6-27 TOTAL NON -MAJOR AIRPORT GOLF COURSE ENTERPRISE FUNDS ASSETS Current assets: Cash & cash equivalents $ 773,787 $ 629,994 $ 1,403,781 Investments at fair value 500,000 308,643 808,643 Receivables (net of allowances): Customer accounts 2,223 56,723 58,946 Interest - investments 6,445 13,895 20,340 Due from other governmental units 17,053 - 17,053 Inventory of materials and supplies - 92,068 92,068 Total current assets $ 1,299,508 $ 1,101,323 $ 2,400,831 Restricted assets: Investments at fair value $ $ 441,358 $ 441,358 Total restricted assets $ $ 441,358 $ 441,358 Notes receivable - non-current Special Assessments, deferred Capital assets (net) $ 10,087,018 $ 9,330,675 $ 19,417,693 Deferred charges and other assets - 35,615 35,615 TOTAL ASSETS $ 11,386,526 $ 10,908,971 $ 22,295,497 Combining Statements & Schedules, 6-27 2007 Comprehensive Annual Financial Report City of Renton, Washington COMBINING STATEMENT OF NET ASSETS NON -MAJOR ENTERPRISE FUNDS December 31, 2007 Page 2 of 2 Combining Statements & Schedules, 6-28 TOTAL NON -MAJOR AIRPORT GOLF COURSE ENTERPRISE FUNDS LIABILITIES Current liabilities: Accounts payable $ 25,260 $ 49,284 $ 74,544 Accrued interest payable 11,902 11,902 Accrued employee benefits payable 1,811 5,383 7,194 Accrued taxes payable 23,515 12,720 36,235 Custodial Accounts - 125,137 125,137 Deferred revenue 32,535 32,535 Operating leases payable - 9,192 9,192 Total current liabilities $ 83,121 $ 213,618 $ 296,739 Liabilities payable from restricted assets: Revenue bonds payable - current $ $ 295,000 $ 295,000 Total liabilities payable from restricted assets $ $ 295,000 $ 295,000 Long-term liabilities: Revenue bonds payable $ $ 2,510,000 $ 2,510,000 Unamortized discounts on revenue bonds (242,500) (242,500) Accrued employee wages and benefits payable 39,571 81,001 120,572 Operating leases payable 66,881 66,881 Total long-term liabilities $ 39,571 $ 2,415,382 $ 2,454,953 TOTAL LIABILITIES $ 122,692 $ 2,924,000 $ 3,046,692 NET ASSETS Investment in capital assets, net of related debt $ 10,087,018 $ 6,701,294 $ 16,788,312 Restricted 441,358 441,358 Unrestricted 1,176,816 842,319 2,019,135 TOTAL NET ASSETS $ 11,263,834 $ 7,984,971 $ 19,248,805 Combining Statements & Schedules, 6-28 2007 Comprehensive Annual Financial Report City of Renton, Washington COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS NON - MAJOR ENTERPRISE FUNDS For the Year Ended December 31, 2007 OPERATING REVENUES: Charges for services TOTAL OPERATING REVENUES OPERATING EXPENSES: Operations and maintenance Benefit payments Professional services Administrative and general Insurance Taxes Depreciation TOTAL OPERATING EXPENSES OPERATING INCOME (LOSS) NON-OPERATING REVENUES(EXPENSES) BUSINESS -TYPE ACTIVITIES ENTERPRISE FUNDS TOTAL NON -MAJOR AIRPORT GOLF COURSE ENTERPRISE FUNDS $ 965,998 $ 2,264,101 $ 3,230,099 $ 965,998 $ 2,264,101 $ 3,230,099 $ 561,133 $ 1,193,514 $ 1,754,647 114,750 275,608 390,358 57,937 - 57,937 201,281 290,711 491,992 51,000 - 51,000 143 10,851 10,994 409,810 313,868 723,678 $ 1,396,054 $ 2,084,552 $ 3,480,606 $ (430,056) $ 179,549 $ (250,507) Intergovernmental revenues $ 65,986 $ - $ 65,986 Interest revenues 74,707 69,854 144,561 Gain (loss) on sale of capital assets - (324) (324) Other non-operating revenues(expenses) 2,312 923 3,235 Interest expense - (158,138) (158,138) Amortization of debt discount and expense - (34,764) (34,764) NON-OPERATING REVENUE NET OF EXPENSES $ 143,005 $ (122,449) $ 20,556 INCOME (LOSS) BEFORE CONTRIBUTIONS AND TRANSFERS $ (287,051) $ 57,100 $ (229,951) CHANGE IN NET ASSETS $ (287,051) $ 57,100 $ (229,951) NET ASSETS, JANUARY 1 $ 11,550,885 $ 7,927,871 $ 19,478,756 NET ASSETS, DECEMBER 31 $ 11,263,834 $ 7,984,971 $ 19,248,805 Combining Statements & Schedules, 6-29 2007 Comprehensive Annual Financial Report City of Renton, Washington STATEMENT OF CASH FLOWS NON -MAJOR ENTERPRISE FUNDS For the Year Ended December 31, 2007 Page 1 of 2 CASH FLOWS FROM OPERATING ACTIVITIES: Cash received for services Cash paid to suppliers for goods & services Cash paid to other funds for goods & services Cash paid to employees Other non-operating receipts NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES CASH FLOWS FROM CAPITAL FINANCING ACTIVITIES: Acquisition & construction of capital assets Capital grants Principal payments on debt Interest payments on debt NET CASH PROVIDED (USED) BY CAPITAL FINANCING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES: Payments for investments Interest on investments BUSINESS -TYPE ACTIVITIES ENTERPRISE FUNDS TOTAL NON -MAJOR AIRPORT GOLF COURSE ENTERPRISE FUNDS $ 953,339 $ 2,275,428 $ 3,228,767 (908,185) (1,472,077) (2,380,262) (2,734) (5,666) (8,400) (110,942) (276,336) (387,278) 2,312 (157,539) (155,227) (510,286) CASH & CASH EQUIVALENTS, JANUARY 1 $ (66,210) $ 363,810 $ 297,600 GASH, HES I HIL; I EU GASH ,& GASH LUUIVALEN 16, $ (541,209) $ (124,513) $ (665,722) 65,986 $ 773,787 $ 65,986 1,403,781 (295,000) (295,000) 8,872 8,872 $ (475,223) $ (410,641) $ (885,864) $ (58,643) $ (58,643) 75,558 $ 61,063 136,621 NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES $ 75,558 $ 2,420 $ 77,978 NET INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS $ (465,875) $ (44,411) $ (510,286) CASH & CASH EQUIVALENTS, JANUARY 1 $ 1,239,662 $ 674,405 $ 1,914,067 GASH, HES I HIL; I EU GASH ,& GASH LUUIVALEN 16, DECEMBER 31 $ 773,787 $ 629,994 $ 1,403,781 Combining Statements & Schedules, 6-30 2007 Comprehensive Annual Financial Report City of Renton, Washington STATEMENT OF CASH FLOWS NON -MAJOR ENTERPRISE FUNDS For the Year Ended December 31, 2007 Page 2 of 2 RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES: Operating income (loss) Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation & amortization of deferred charges Other non-operating revenue (Increase) decrease in accounts receivable (Increase) decrease in due from other funds/governmental units (Increase) decrease in inventory & prepaid items Increase (decrease) in vouchers retainage payable Increase (decrease) in due tc other funds/governmental units Increase (decrease) in payables & other short-term liabilities Increase (decrease) in customer deposits Increase (decrease) in deferred revenues Increase (decrease) in accrued employee leave benefits Total adjustments NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES BUSINESS -TYPE ACTIVITIES ENTERPRISE FUNDS TOTAL NON -MAJOR AIRPORT GOLF COURSE ENTERPRISE FUNDS $ (430,056) $ 179,549 $ (250,507) $ 409,810 $ 313,868 $ 723,678 2,312 (157,539) (155,227) 8,616 (22,033) (13,417) 19,987 13,299 33,286 - (45,131) (45,131) (35,409) (7,943) (43,352) (2,734) (5,666) (8,400) (15,998) 76,780 60,782 19,354 19,354 (26,546) - (26,546) 3,808 (728) 3,080 $ 363,846 $ 184,261 $ 548,107 $ (66,210) $ 363,810 $ 297,600 NONCASH INVESTING, CAPITAL, AND FINANCING ACTIVITIES Depreciation $ Net amort. bond prem. discount & bond issue costs 409,810 $ 313,868 $ 723,678 35,244 Combining Statements & Schedules, 6-31 2007 Comprehensive Annual Financial Report COMBINING STATEMENT OF NET ASSETS INTERNAL SERVICE FUNDS December 31, 2007 Page 1 of 2 City of Renton, Washington Combining Statements & Schedules, 6-32 TOTAL EQUIPMENT INSURANCE INTERNAL RENTAL FUND SERVICE FUNDS ASSETS Current assets: Cash & cash equivalents $ 3,087,611 $ 3,292,042 $ 6,379,653 Investments at fair value 3,503,828 11,224,178 14,728,006 Receivables (net of allowances): Customer accounts 1,893 30,970 32,863 Interest - investments 70,701 274,103 344,804 Due from other funds - 18,060 18,060 Due from other governmental units 12,330 - 12,330 Prepayments 128,402 247,424 375,826 Total current assets $ 6,804,765 $ 15,086,777 $ 21,891,542 Property, plant, and equipment: Capital assets (net) $ 7,674,602 $ - $ 7,674,602 Total property, plant, and equipment $ 7,674,602 $ - $ 7,674,602 TOTAL ASSETS $ 14,479,367 $ 15,086,777 $ 29,566,144 Combining Statements & Schedules, 6-32 2007 Comprehensive Annual Financial Report City of Renton, Washington COMBINING STATEMENT OF NET ASSETS INTERNAL SERVICE FUNDS December 31, 2007 Page 2 of 2 Combining Statements & Schedules, 6-33 TOTAL EQUIPMENT INSURANCE INTERNAL RENTAL FUND SERVICE FUNDS LIABILITIES Current liabilities: Accounts payable $ 555,821 $ 743,935 $ 1,299,756 Due to other funds - 18,060 18,060 Accrued employee benefits payable 2,940 10,306 13,246 Accrued taxes payable 4,335 4,335 Total current liabilities $ 563,096 $ 772,301 $ 1,335,397 Long-term liabilities: Revenue bonds payable - Unamortized discounts on revenue bonds Accrued employee wages and benefits payable $ 161,347 $ 417,600 $ 578,947 Claims incurred but not reported - 2,985,955 2,985,955 Total long-term liabilities $ 161,347 $ 3,403,555 $ 3,564,902 TOTAL LIABILITIES $ 724,443 $ 4,175,856 $ 4,900,299 NET ASSETS Investment in capital assets, Net of related debt $ 7,674,602 $ $ 7,674,602 Unrestricted 6,080,322 10,910,921 16,991,243 TOTAL NET ASSETS $ 13,754,924 $ 10,910,921 $ 24,665,845 Combining Statements & Schedules, 6-33 2007 Comprehensive Annual Financial Report City of Renton, Washington COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS INTERNAL SERVICE FUNDS For the Year Ended December 31, 2007 Combining Statements & Schedules, 6-34 TOTAL EQUIPMENT INSURANCE INTERNAL RENTAL FUND SERVICE FUNDS OPERATING REVENUES: Charges for services $ 7,257,190 $ 2,497,956 $ 9,755,146 Other operating revenues 6,074 9,574,948 9,581,022 TOTAL OPERATING REVENUES $ 7,263,264 $ 12,072,904 $ 19,336,168 OPERATING EXPENSES: Operations and maintenance $ 1,085,791 $ 168,250 $ 1,254,041 Benefit payments 1,471,099 9,231,082 10,702,181 Professional services 314,818 265,619 580,437 Administrative and general 1,494,796 48,502 1,543,298 Insurance 246,500 1,658,016 1,904,516 Depreciation 2,061,628 - 2,061,628 Capital outlay 106,303 - 106,303 TOTAL OPERATING EXPENSES $ 6,780,935 $ 11,371,469 $ 18,152,404 OPERATING INCOME (LOSS) $ 482,329 $ 701,435 $ 1,183,764 NON-OPERATING REVENUES (EXPENSES): Intergovernmental revenues $ 2,998 $ - $ 2,998 Interest revenues 320,989 657,638 978,627 Gain (loss) on sale of capital assets (100,032) - (100,032) Other non-operating revenues (expenses; 3,651 688,953 692,604 NON-OPERATING REVENUE NET OF EXPENSE $ 227,606 $ 1,346,591 $ 1,574,197 INCOME (LOSS) BEFORE CONTRIBUTIONS AND TRANSFERS $ 709,935 $ 2,048,026 $ 2,757,961 CHANGE IN NET ASSETS $ 709,935 $ 2,048,026 $ 2,757,961 NET ASSETS, JANUARY 1 $ 10,510,965 $ 8,862,895 $ 19,373,860 Prior year adjustments 2,534,024 - 2,534,024 NET ASSETS, DECEMBER 31 $ 13,754,924 $ 10,910,921 $ 24,665,845 Combining Statements & Schedules, 6-34 2007 Comprehensive Annual Financial Report COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS For the Year Ended December 31, 2007 Page 1 of 2 City of Renton, Washington Combining Statements & Schedules, 6-35 TOTAL EQUIPMENT INSURANCE INTERNAL RENTAL FUND SERVICE FUNDS CASH FLOWS FROM OPERATING ACTIVITIES: Cash received for services $ 7,274,941 $ 12,058,883 $ 19,333,824 Cash paid to suppliers for goods & services (2,221,546) (146,147) (2,367,693) Cash paid to employees (1,524,552) (8,856,596) (10,381,148) Other operating receipts (806,316) (1,359,073) (2,165,389) Other non-operating receipts (106,303) (106,303) NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES $ 2,616,224 $ 1,697,067 $ 4,313,291 CASH FLOWS FROM CAPITAL FINANCING ACTIVITIES: Acquisition & construction of capital assets $ (1,882,053) $ $ (1,882,053) NET CASH PROVIDED (USED) BY CAPITAL FINANCING ACTIVITIES $ (1,882,053) $ $ (1,882,053) CASH FLOWS FROM INVESTING ACTIVITIES: Payments for investments $ (650,000) $ (4,530,277) $ (5,180,277) Interest on investments 313,986 543,135 857,121 Interest on investments Interest on investments $ (336,014) $ (3,987,1421$ (4,323,156) NET INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS $ 398,157 $ (2,290,075) $ (1,891,918) CASH & CASH EQUIVALENTS, JANUARY 1 $ 2,689,454 $ 5,582,117 $ 8,271,571 CASH & CASH EQUIVALENTS, DECEMBER 31 $ 3,087,611 $ 3,292,042 $ 6,379,653 Combining Statements & Schedules, 6-35 2007 Comprehensive Annual Financial Report City of Renton, Washington COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS For the Year Ended December 31, 2007 Page 2 of 2 RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES: Operating income (loss) Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation & amortization of deferred charges Other non-operating revenue (Increase) decrease in accounts receivable (Increase) decrease in due from other funds/governmental units (Increase) decrease in inventory & prepaid items Increase (decrease) in vouchers retainage payable Increase (decrease) in payables & other short-term liabilities Increase(decrease)in accrued employee leave benefits Total adjustments NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES NONCASH INVESTING, CAPITAL, AND FINANCING ACTIVITIES Increase in fair value of investments Depreciation & amortization TOTAL EQUIPMENT INSURANCE INTERNAL RENTAL FUND SERVICE FUNDS $ 482,329 $ 701,435 $ 1,183,764 2,061,628 - 2,061,628 (96,381) 688,954 592,573 11,677 (14,021) (2,344) (12,330) 1,876 (10,454) (25,358) (244,430) (269,788) 219,035 (47,807) 171,228 3,719 (7,855) (4,136) (28,095) 618,915 590,820 $ 2,133,895 $ 995,632 $ 3,129,527 $ 2,616,224 $ 1,697,067 $ 4,313,291 3,828 13,901 17,729 2,061,628 - 2,061,628 Combining Statements & Schedules, 6-36 2007 Comprehensive Annual Financial Report City of Renton, Washington STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUND - SPECIAL DEPOSIT For the Year Ended December 31, 2007 Page 1 of 1 Combining Statements & Schedules, 6-37 BEGINNING ENDING BALANCE DEBITS CREDITS BALANCE ASSETS Cash $ 471,522 $ 595,218 338,691 $ 728,049 TOTAL ASSETS $ 471,522 $ 595,218 $ 338,691 $ 728,049 LIABILITIES Vouchers & contacts payable $ 80,380 $ 338,391 320,177 $ 62,166 Deposits payable 391,142 400,857 675,598 665,883 TOTAL LIABILITIES $ 471,522 $ 739,248 $ 995,775 $ 728,049 Combining Statements & Schedules, 6-37 2007 Comprehensive Annual Financial Report This page is intentionally left blank. City of Renton, Washington Combining Statements Section, 6-38 2007 Comprehensive Annual Financial Report City of Renton, Washington STATISTICAL SECTION December 31, 2007 Presentations included in the Statistical Section of the Comprehensive Annual Financial Report (CAFR) provide users detailed information as a context for understanding what the information in the financial statements, note disclosures and the supporting schedules say about the government's overall financial health. The section is divided into five categories based on the following: FINANCIAL TRENDS These schedules contain trend information to help the reader understand how the government's financial performance and well-being have changed over time. REVENUE CAPACITY These schedules present information to help the reader assess the government's most significant local revenue source — property tax. DEBT CAPACITY These schedules present information to help the reader assess the affordability of the government's current levels of outstanding debt and the government's ability to issue additional debt in the future. DEMOGRAPHIC AND ECONOMIC INFORMATION These schedules offer demographic and economic indicators to help the reader understand the environment within which the government's financial activities take place. OPERATING INFORMATION 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 government provides and the activities it performs. Statistical Section, 7-1 2007 Comprehensive Annual Financial Report This page is intentionally left blank. City of Renton, Washington Statistical Section, 7-2 2007 Comprehensive Annual Financial Report TABLE 1 NET ASSETS BY COMPONENT LAST FIVE FISCAL YEARS (Accrual basis of accounting) FISCAL YEAR City of Renton, Washington 2031_ 2004 2005 2006 2007 Governmental activities $ 248,246,810 $ 359,173,601 $ 375,125,039 $ 391,480,495 $ 421,232,714 Invested in capital assets, net of related debt $ 89,360,313 $ 195,282,055 $ 203,297,293 $ 209,964,556 $ 232,714,563 Restricted 6,816,559 21,460,395 28,578,305 42,748,022 32,648,993 Unrestricted 41,699,232 25,746,196 29,272,573 29,340,290 32,075,613 Total governmental activities net assets $ 137,876,104 $ 242,488,646 $ 261,148,171 $ 282,052,868 $ 297,439,169 Business -type activities $ 248,246,810 $ 359,173,601 $ 375,125,039 $ 391,480,495 $ 421,232,714 Invested in capital assets, net of related debt $ 158,886,497 $ 163,891,546 $ 171,827,746 $ 181,515,939 $ 188,518,151 Restricted 3,048,210 3,555,690 3,555,690 25,097,253 3,586,667 Unrestricted 15,886,887 21,612,156 21,541,563 19,357,695 17,973,237 Total business -type activities net assets $ 177,821,594 $ 189,059,392 $ 196,924,999 $ 225,970,887 $ 210,078,055 Primary government Invested in capital assets, net of related debt $ 248,246,810 $ 359,173,601 $ 375,125,039 $ 391,480,495 $ 421,232,714 Restricted 9,864,769 25,016,085 32,133,995 67,845,275 36,235,660 Unrestricted 57,586,119 47,358,352 50,814,136 48,697,985 50,048,850 Total primary government net assets $ 315,697,698 $ 431,548,038 $ 458,073,170 $ 508,023,755 $ 507,517,224 'First Year of Net Assets by Component Source : City of Renton, Finance & IS Deparrtment Statistical Section, 7-3 2007 Comprehensive Annual Financial Report EXPENSES Government activities: General government Judicial Security of persons and property Physical environment Transportation Economic development Mental and physical health Culture and recreation Interest on long-term debt Total governmental activities expenses Business -type activities: Water Airport Solid Waste Golf Total business -type activities net assets Total primary government expenses PROGRAM REVENUES Government activities: Charges for services: General government charges Judicial Security of persons and property Physical environment Transportation Economic environment Culture and recreation Operating grants and contributions Capital grants and contributions Total governmental activities program revenues Business -type activities: Charges for services: Business -type charges Operating grants and contributions Capital grants and contributions Total business -type activities program revenues Total primary government program revenues Net (expense)/revenue Governmental activities Business -type activities Total primary government net expense TABLE 2 CHANGES IN NET ASSETS LAST FIVE FISCAL YEARS (Accrual basis of accounting) Page 1 of 2 FISCAL YEAR City of Renton, Washington 20031 2004 2005 2006 2007 $ 24,365,244 $ 22,144,567 $ 21,137,856 $ 19,977,086 $ 29,112,970 929,780 1,258,956 247,235 1,340,655 591,586 1,380,816 837,027 1,434,134 400,798 1,845,031 1,519,383 26,238,548 1,660,698 28,647,443 1,432,215 29,496,791 4,236,596 30,749,762 4,368,399 36,213,120 1,460,879 2,013,239 1,558,458 2,278,445 1,649,960 2,208,340 6,213,791 2,618,832 4,596,836 2,749,417 1,094,764 4,221,713 1,227,503 6,797,356 4,940,471 4,183,880 33,768,669 $ 15,798,138 41,847,229 11,237,287 5,886,795 5,519,929 5,899,796 6,372,118 6,880,687 21,646 228,966 300,171 295,072 301,495 8,689,666 10,303,074 9,744,692 9,695,924 11,036,931 1,827,464 1,627,581 1,710,346 1,772,370 2,594,784 $ 74,523,271 $ 78,888,016 $ 76,062,688 $ 88,713,436 $ 101,971,722 $ 22,381,464 $ 23,347,678 $ 25,884,227 27,220,132 28,657,468 1,219,465 936,305 1,226,810 1,196,363 1,396,054 8,516,598 8,558,441 9,327,525 9,706,016 10,606,560 1,831,670 1,933,113 2,132,077 2,056,874 2,277,454 $ 33,949,197 $ 34,775,537 $ 38,570,639 $ 40,179,385 $ 42,937,536 $ 108,472,468 $ 113,663,553 $ 114,633,327 $ 128,892,821 $ 144,909,258 $ 16,716,472 $ 15,579,366 $ 17,525,244 $ 21,852,465 $ 23,163,645 1,287,901 1,531,773 697,883 831,485 1,169,581 929,780 200,149 247,235 517,151 591,586 759,700 837,027 894,750 400,798 999,484 1,519,383 1,916,862 1,660,698 1,628,154 1,432,215 4,969,475 4,236,596 4,516,899 4,368,399 7,857,186 1,460,879 1,507,387 1,558,458 1,742,071 1,649,960 3,732,443 6,213,791 4,979,601 4,596,836 5,265,737 1,094,764 1,745,718 1,227,503 5,909,870 4,940,471 $ 32,470,797 $ 33,768,669 $ 33,308,271 $ 41,847,229 $ 47,069,865 $ 37,077,258 $ 38,917,114 $ 40,029,830 $ 40,056,079 $ 45,403,349 222,193 112,616 196,974 77,688 243,537 6,600,471 6,583,241 5,101,699 6,317,203 1,761,802 $ 43,899,922 $ 45,612,971 $ 45,328,503 $ 46,450,970 $ 47,408,688 $ 76,370,719 $ 79,381,640 $ 78,636,774 $ 88,298,199 $ 94,478,553 $ (42,052,474) $ (45,119,347) $ (42,754,417) $ (46,866,207) $ (54,901,857) 9,950,725 10,837,434 6,757,864 6,271,585 4,471,152 $ (32,101,749) $ (34,281,913) $ (35,996,553) $ (40,594,622) $ (50,430,705) Statistical Section, 7-4 2007 Comprehensive Annual Financial Report GENERAL REVENUES AND OTHER CHANGES IN NET ASSETS Governmental activities: Taxes Property taxes Sales taxes Business taxes Othertaxes Penalties and interest Investment earnings Miscellaneous Transfers Total governmental activities Business -type activities: Investment earnings Miscellaneous Transfers Total business -type activities Total primary government CHANGES IN NET ASSETS Governmental activities Business -type activities Total primary government 'First Year of Changes in Net Assets Source: City of Renton, Finance & IS Department City of Renton, Washington TABLE 2 CHANGES IN NET ASSETS LAST FIVE FISCAL YEARS (Accrual basis of accounting) Page 2 of 2 FISCAL YEAR 2003' 2004 2005 2006 2007 $ 19,520,575 $ 19,578,390 $ 21,523,818 $ 23,600,131 $ 23,106,578 17,334,831 18,281,949 18,910,823 $ 20,869,595 22,749,831 10,895,130 9,957,129 10,643,068 $ 11,219,303 11,962,879 5,449,877 6,751,264 6,938,265 $ 7,718,945 8,236,876 5,415 6,048 49 $ 3,799 33,949 1,081,398 1,291,669 1,449,001 $ 3,251,975 3,465,517 312,867 4,346,619 1,958,217 $ 689,243 1,218,889 (40,000) (10,304) (9,300) (68,446) - $ 54,560,093 $ 60,202,764 $ 61,413,941 $ 67,284,545 $ 70,774,519 242,055 270,605 458,797 881,486 1,041,576 369,513 119,455 639,646 282,808 135,986 40,000 10,304 9,300 68,446 - $ 651,568 $ 400,364 $ 1,107,743 $ 1,232,740 $ 1,177,562 $ 55,211,661 $ 60,603,128 $ 62,521,684 $ 68,517,285 $ 71,952,081 $ 12,507,619 $ 15,083,417 $ 18,659,524 $ 20,418,338 $ 15,872,662 10,602,293 11,237,798 7,865,607 7,504,325 5,648,714 $ 23,109,912 $ 26,321,215 $ 26,525,131 $ 27,922,663 $ 21,521,376 Statistical Section, 7-5 2007 Comprehensive Annual Financial Report $18,000,000 $16,000,000 $14,000,000 $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 TABLE 3 FUND BALANCE OF GOVERNMENT FUNDS LAST TEN FISCAL YEARS (Accrual basis of accounting) Page 1 of 2 General fund General 998 1999 2000 2001 2002 2003 2004 2005 2006 200 City of Renton, Washington All other governmental funds Reserved $ - $ - FISCAL YEAR $ 920,000 $ 1,260,000 Unreserved, reported in: 1998 1999 2000 2001 2002 General fund 9,037,183 2,890,947 3,898,265 4,938,021 3,361,529 Reserved $ 87,000 $ 83,000 $ 311,673 $ 318,053 $ 83,000 Unreserved 4,555,713 5,381,222 8,025,332 6,428,315 3,920,136 Total general fund $ 4,642,713 $ 5,464,222 $ 8,337,005 $ 6,746,368 $ 4,003,136 All other governmental funds Reserved $ - $ - $ - $ 920,000 $ 1,260,000 Unreserved, reported in: Special revenue funds 9,037,183 2,890,947 3,898,265 4,938,021 3,361,529 Debt service funds 2,325,340 2,987,015 2,653,495 2,546,129 2,030,335 Capital project funds 18,663,675 21,682,591 23,570,741 29,133,681 33,742,638 Total all other governmental funds $ 30,026,198 $ 27,560,553 $ 30,122,501 $ 37,537,831 $ 40,394,502 Source : City of Renton, Finance & IS Department Statistical Section, 7-6 2007 Comprehensive Annual Financial Report $60,000,000 $50,000,000 $40,000,000 $30,000,000 $20,000,000 $10,000,000 TABLE 3 FUND BALANCE OF GOVERNMENT FUNDS LAST TEN FISCAL YEARS (Accrual basis of accounting) Page 2 of 2 All other governmental funds —0—All other governmental funds City of Renton, Washington 1998 1999 2000 2001 2002 2003 2004 2005 2006 200 All other governmental funds Reserved $ 880,000 $ 500,000 FISCAL YEAR $ 63,900 $ 975,000 Unreserved, reported in: 2003 2004 2005 2006 2007 General fund 3,985,917 3,238,246 2,929,692 4,243,189 2,616,596 Reserved $ 83,000 $ 108,742 $ 8,000 $ 8,000 $ 8,000 Unreserved 6,758,364 8,603,003 9,189,871 10,737,097 16,474,384 Total general fund $ 6,841,364 $ 8,711,745 $ 9,197,871 $ 10,745,097 $ 16,482,384 All other governmental funds Reserved $ 880,000 $ 500,000 $ 240,000 $ 63,900 $ 975,000 Unreserved, reported in: Special revenue funds 3,985,917 3,238,246 2,929,692 4,243,189 2,616,596 Debt service funds 1,916,243 1,486,894 2,752,445 3,068,587 1,392,915 Capital project funds 22,628,512 26,202,437 27,890,457 42,152,437 29,057,397 Total all other governmental funds $ 29,410,672 $ 31,427,577 $ 33,812,594 $ 49,528,113 $ 34,041,908 Statistical Section, 7-7 2007 Comprehensive Annual Financial Report City of Renton, Washington TABLE 4 CHANGES IN FUND BALANCES OF GOVERNMENT FUNDS LAST TEN FISCAL YEARS (Accrual basis of accounting) Page 1 of 2 REVENUES Taxes Licenses and permits Intergovernmental Charges for services Fines Interfund revenues Special assessments Contributions Interest Miscellaneous Total revenues EXPENDITURES General government Security of persons and property Physical environment Transportation Economic and physical development Mental and physical health Culture and recreation Capital outlay Debt service Principal Interest Total expenditures Excess of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Transfers in Transfers out Other financing sources (uses) Proceeds of long-term debt Interfund loan proceeds Interfund loan repayments Funds remitted to bond trustee Capital leases Sale of capital assets Total other financing sources (uses) Net change in fund balances Debt service as a percentage of noncapital expenditures Source : City of Renton, Finance & IS Department FISCAL YEAR 1998 1999 2 O 2001 2002 $ 41,722,051 $ 44,397,793 $ 47,827,013 $ 50,218,530 $ 49,901,849 4,146,167 3,780,303 4,562,892 4,065,518 4,229,501 9,078,690 5,637,817 6,793,084 6,129,103 6,212,359 7,785,760 7,157,860 7,805,409 7,301,538 7,777,778 722,054 831,327 937,689 993,093 1,043,199 516,929 689,931 352,648 333,056 312,908 1,974,897 91,383 64,092 191,877 118,103 2,626,519 2,129,455 2,307,978 2,583,931 1,073,538 555,701 682,625 727,465 1,231,574 1,198,846 $ 69,128,768 $ 65,398,494 $ 71,378,270 $ 73,048,220 $ 71,868,081 $ 9,915,676 $ 10,058,875 $ 10,858,538 $ 20,074,074 21,300,403 22,889,748 1,730,735 1,892,541 1,769,642 10,985,484 10, 706, 833 10, 330, 362 4,060,970 3,814,967 4,337,239 10,962 8,486 8,599 5,804,099 6,166,358 6,606,662 13,712,159 11,002,950 7,450,837 11,193,462 $ 12,523,577 23,569,864 24,924,380 1,878,956 1,898,665 13,885,329 10, 622, 373 4,484,526 4,479,582 6,756 11,445 7,263,056 7,382,069 5,359,801 10,532,479 2,032,436 2,707,994 2,481,026 2,086,447 1,849,269 1,381,069 1,345,588 1,205,281 882,748 1,382,717 $ 69,707,664 $ 69,004,995 $ 67,937,934 $ 70,610,945 $ 75,606,556 $ (578,896) $ (3,606,501) $ 3,440,336 $ 2,437,275 $ (3,738,475) $ 6,244,003 $ 4,670,101 $ 3,694,498 $ 6,850,944 $ 9,441,451 (7,413,375) (4,587,778) (3,662,809) (8,873,294) (10,009,962) 38,990 - 6,023,484 3,879,038 448,000 823,000 363,800 860,000 (448,000) (823,000) (363,800) (860,000) 362,890 563,283 1,403,688 61,685 104,825 $ (806,482) $ 684,596 $ 1,435,377 $ 4,062,819 $ 3,415,352 $ (1,385,378) $ (2,921,905) $ 4,875,713 $ 6,500,094 $ (323,123) 6.10% 6.99% 6.09% 4.55% 4.97% Statistical Section, 7-8 2007 Comprehensive Annual Financial Report City of Renton, Washington TABLE 4 CHANGES IN FUND BALANCES OF GOVERNMENT FUNDS LAST TEN FISCAL YEARS (Accrual basis of accounting) Page 2 of 2 Excess of revenues over (under) expenditures $ (7,630,191) $ 1,987,607 $ 2,373,896 $ (498,302) $ (9,773,136) OTHER FINANCING SOURCES (USES) Transfers in $ 3,511,700 $ 6,563,978 $ 5,476,360 $ 2,962,895 $ 5,782,988 Transfers out (3,551,700) (7,764,278) (5,443,660) (3,705,341) (5,782,988) Other financing sources (uses) Proceeds of long-term debt 18,490,029 Interfund loan proceeds Interfund loan repayments Funds remitted to bond trustee C 't I I api a eases - - - FISCAL YEAR Sale of capital assets 171,249 117,328 464,547 13,464 2003 Total other financing 2004 2005 2006 2007 REVENUES $ 131,249 $ (1,082,972) $ 497,247 $ 17,761,047 $ 24,218 Net change in fund balances $ (7,498,942) $ 904,635 $ Taxes $ 53,722,322 $ 55,344,506 $58,794,081 $64,005,567 $ 66,698,876 Licenses and permits 5.01% 4,226,883 5.05% 4,329,086 4,686,608 4,962,507 5,828,230 Intergovernmental 4,533,544 7,570,570 5,687,169 9,769,225 9,791,830 Charges for services 6,016,704 6,593,153 5,563,289 6,543,289 10,048,879 Fines 1,055,564 1,008,984 731,286 906,685 1,150,079 Interfund revenues 3,482,110 3,638,574 3,796,042 2,843,147 3,352,411 Special assessments 295,673 20,852 23,340 511,932 51,723 Contributions 255,102 249,938 317,600 214,387 353,582 Interest 1,081,420 1,059,886 1,060,353 2,570,682 2,486,889 Miscellaneous 40,314 122,799 569,881 223,908 86,322 Total revenues $ 74,709,636 $ 79,938,348 $ 81,229,649 $ 92,551,329 $ 99,848,821 EXPENDITURES General government $ 13,283,955 $ 13,660,095 $ 14,382,634 $ 13,972,592 $ 14,597,355 Security of persons and property 26,029,354 27,462,613 29,031,626 31,157,303 35,583,500 Physical environment 2,015,562 2,201,777 2,190,228 2,609,452 2,764,563 Transportation 4,461,387 4,615,345 4,711,924 5,097,449 6,403,358 Economic and physical development 4,613,587 4,947,080 5,123,024 5,519,219 5,896,589 Mental and physical health 10,368 11,723 12,700 9,231 13,818 Culture and recreation 7,585,936 8,563,967 8,876,250 9,933,854 10,830,224 Capital outlay 21,089,534 13,246,669 11,438,104 21,117,525 29,320,023 Debt service Principal 1,417,042 1,477,579 1,375,738 1,503,350 1,565,904 Interest 1,833,102 1,763,893 1,713,525 2,129,656 2,646,623 Total expenditures $ 82,339,827 $ 77,950,741 $ 78,855,753 $ 93,049,631 $ 109,621,957 Excess of revenues over (under) expenditures $ (7,630,191) $ 1,987,607 $ 2,373,896 $ (498,302) $ (9,773,136) OTHER FINANCING SOURCES (USES) Transfers in $ 3,511,700 $ 6,563,978 $ 5,476,360 $ 2,962,895 $ 5,782,988 Transfers out (3,551,700) (7,764,278) (5,443,660) (3,705,341) (5,782,988) Other financing sources (uses) Proceeds of long-term debt 18,490,029 Interfund loan proceeds Interfund loan repayments Funds remitted to bond trustee C 't I I api a eases - - - Sale of capital assets 171,249 117,328 464,547 13,464 24,218 Total other financing sources (uses) $ 131,249 $ (1,082,972) $ 497,247 $ 17,761,047 $ 24,218 Net change in fund balances $ (7,498,942) $ 904,635 $ 2,871,143 $ 17,262,745 $ (9,748,918) Debt service as a percentage of noncapital expenditures 5.31% 5.01% 4.58% 5.05% 5.25% Statistical Section, 7-9 2007 Comprehensive Annual Financial Report $70 $60 $50 $40 $30 U) o $20 $10 $0 TABLE 5 GENERAL GOVERNMENT TAX REVENUE BY SOURCE LAST TEN FISCAL YEARS (Modified accrual basis of accounting) TAX REVENUES BY SOURCE 1998-2007 City of Renton, Washington O Penalty/Delinquent ■ Excise O Business E3 Sales and Use ■ Property Source: City of Renton, Finance & IS Department Statistical Section, 7-10 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 PENALTY/ ADMISSION / INTEREST FISCAL PROPERTY SALES UTILITY EXCISE DELINQUENT YEAR TAX TAX TAX TAX TAX TOTAL 1998 14,524,083 14,948,815 7,645,323 4,336,307 1,036 41,455,565 1999 15,659,424 15,282,981 8,289,865 4,831,792 1,217 44,065,280 2000 16,397,638 16,585,478 9,788,167 4,724,682 8,462 47,504,428 2001 16,794,636 16,724,787 11,105,722 5,066,122 1,939 49,693,206 2002 18,373,237 16,431,456 9,798,260 4,711,446 4,404 49,318,803 2003 19,587,986 17,334,831 10,895,131 5,449,877 5,415 53,273,240 2004 19,886,805 18,281,949 9,957,130 6,751,265 6,048 54,883,197 2005 21,826,229 18,910,822 10,643,068 6,938,264 49 58,318,433 2006 23,600,131 20,869,596 11,219,302 7,718,945 3,799 63,411,773 2007 23,106,578 22,749,831 11,962,879 8,236,876 33,949 66,090,113 Source: City of Renton, Finance & IS Department Statistical Section, 7-10 2007 Comprehensive Annual Financial Report TABLE 6 PRINCIPAL PROPERTY TAX PAYERS December 31, 2007 City of Renton, Washington Source: 'King County Department of Assessments Statistical Section, 7-11 2007 1998 % OF TOTAL % OF TOTAL TAXABLE' TAXABLE TAXABLE TAXABLE ASSESSED ASSESSED ASSESSED ASSESSED TAXPAYER VALUE RANK VALUE VALUE RANK VALUE Boeing 662,337,233 1 6.86% 761,498,607 1 17.88% Paccar 107,406,425 2 1.11% 99,854,551 2 2.34% Puget Sound Energy-Elec/Gas 91,398,221 3 0.95% 87,316,949 3 2.05% Providence Health 67,475,400 4 0.70% AMB Property Corp. 57,481,800 5 0.60% Axis Grand Holdings: 41,591,000 6 0.43% (formerly HSC Real Estate Inc.) ECI Two WTC LLC (WTCTPI LLC) 35,184,500 7 0.36% 30,407,479 6 0.71% BRE Properties 34,819,469 8 0.36% Fred Meyer Stores Inc. 32,553,158 9 0.34% Qwest Corporation 32,461,207 10 0.34% University Street Properties 45,485,400 4 1.07% Renton Building 1-7 43,782,400 5 1.03% Renton Village Assoc. 17,781,100 7 0.42% Bay Apartment Communities 17,500,000 8 0.41% Fred Meyer Stores Inc. 15,858,400 9 0.37% Rosche One Int 14,152,000 10 0.33% All Others 8,496,969,241 87.96% 3,124,863,864 73.38% Total Assessed Valuation $ 9,659,677,654 100.00% $ 4,258,500,750 100.00% Source: 'King County Department of Assessments Statistical Section, 7-11 2007 Comprehensive Annual Financial Report 10,000 w 9,000 c 0 8,000 E 7,000 3 6,000 R 5,000 (D H 4,000 m Q 3,000 2,000 1,000 TABLE 7 ASSESSED VALUE OF TAXABLE PROPERTY LAST TEN FISCAL YEARS Page 1 of 2 Total Taxable Assessed Value 1 ■Taxable Assessed Value 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Year FISCAL YEAR ENDED DECEMBER 31 REAL PROPERTY' RESIDENTIAL COMMERCIAL PROPERTY PROPERTY City of Renton, Washington PERSONAL PROPERTY OTHER 1998 3,099,917,868 N/A 725,191,466 1999 3,543,075,457 N/A 715,425,293 2000 2,958,443,598 2,368,630,142 714,803,819 2001 1,703,991,595 2,613,181,185 745,490,732 2002 2,810,986,787 2,008,043,209 774,850,492 2003 2,314,794,930 2,921,180,100 747,879,276 2004 2,598,762,769 3,057,577,700 716,313,413 2005 2,823,407,473 3,217,655,000 656,709,434 2006 3,734,771,858 3,415,317,348 636,713,076 2007 4,201,702,500 3,853,709,290 754,326,325 12000 is the first year when breakdown is available. Source is from TaxTools 4.1 Tax Database 2,4 Source is from King County Department of Assessments 3The tax exempt real property value is not available for the last ten years Statistical Section, 7-12 2007 Comprehensive Annual Financial Report 4.500 4.000 3.500 3.000 y 2.500 W 2.000 1.500 1.000 0.500 City of Renton, Washington TABLE 7 ASSESSED VALUE OF TAXABLE PROPERTY LAST TEN FISCAL YEARS Page 2 of 2 Direct Tax Rate 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Year FISCAL TOTAL YEAR PERSONAL PROPERTY TOTAL DIRECT ENDED TAX EXEMPT ASSESSED TAX DECEMBER 31 REAL PROPERTY 3 VALUE RATE 4 1998 N/A $ 3,825,109,334 3.896 1999 N/A $ 4,258,500,750 3.747 2000 N/A $ 6,041,877,559 3.684 2001 N/A $ 5,062,663,512 3.375 2002 N/A $ 5,593,880,488 3.354 2003 N/A $ 5,983,854,306 3.277 2004 N/A $ 6,372,653,882 3.327 2005 N/A $ 6,697,771,907 3.227 2006 N/A $ 7,786,802,282 3.116 2007 N/A $ 8,809,738,115 2.884 Statistical Section, 7-13 2006 Comprehensive Annual Financial Report 4.00000 3.50000 3.00000 2.50000 d 2.00000 1.50000 1.00000 0.50000 TABLE 8 PROPERTY TAX RATES DIRECT AND OVERLAPPING GOVERNMENTS LAST TEN FISCAL YEARS Page 1 of 2 Direct Property Tax Rates ti ti ti ti ti ti ti ti Year City of Renton, Washington Source: King County Codes and Levies Special Districts include Emergency Medical Services, Port and Hospital districts Statistical Section, 7-14 DIRECT RATES OVERLAPPING RATES CITY OF RENTON COUNTY Debt Total Debt Total Fiscal Operating Service City Operating Service County Year Millage Millage Millage Millage Millage Millage 1998 3.55000 0.34608 3.89608 1.50586 0.34523 1.85109 1999 3.42726 0.31981 3.74707 1.51957 0.25428 1.77385 2000 3.39877 0.28488 3.68365 1.39802 0.29149 1.68951 2001 3.27385 0.10078 3.37463 1.47266 0.26981 1.74247 2002 3.26036 0.09397 3.35433 1.19751 0.25198 1.44949 2003 3.18871 0.08865 3.27736 1.15386 0.19562 1.34948 2004 3.16022 0.08322 3.24344 1.18279 0.24867 1.43146 2005 3.14843 0.07861 3.22704 1.15665 0.22564 1.38229 2006 3.04482 0.07088 3.11570 1.09915 0.22954 1.32869 2007 2.82148 0.06252 2.88400 1.08814 0.20142 1.28956 Source: King County Codes and Levies Special Districts include Emergency Medical Services, Port and Hospital districts Statistical Section, 7-14 2006 Comprehensive Annual Financial Report 7.00000 6.00000 5.00000 4.00000 3.00000 2.00000 1.00000 City of Renton, Washington TABLE 8 PROPERTY TAX RATES DIRECT AND OVERLAPPING GOVERNMENTS LAST TEN FISCAL YEARS Page 2 of 2 Overlapping Property Tax Rates ^ Year Statistical Section, 7-15 OVERLAPPING RATES SCHOOL DISTRICT Total Debt Total Total Direct & Fiscal Special Operating Service School Overlapping Overlapping Year Districts ' Millage Millage Millage Rates Rates 1998 0.42400 2.11248 1.37974 3.49222 5.76731 9.66339 1999 0.68252 1.87903 1.90387 3.78290 6.23927 9.98634 2000 0.60714 1.85286 1.80111 3.65397 5.95062 9.63427 2001 0.53526 1.74147 1.62522 3.36669 5.64442 9.01905 2002 0.53599 1.63516 1.47772 3.11288 5.09836 8.45269 2003 0.59292 1.62358 1.36333 2.98691 4.92931 8.20667 2004 0.58319 1.60492 1.88086 3.48578 5.50043 8.74387 2005 0.57542 1.62332 2.36918 3.99250 5.95021 9.17725 2006 1.04312 1.53290 2.42680 3.95970 6.33151 9.44721 2007 0.99431 1.40073 2.04586 3.44659 5.73046 8.61446 Statistical Section, 7-15 2007 Comprehensive Annual Financial Report 30,000,000 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 City of Renton, Washington TABLE 9 PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS Page 1 of 2 Levies vs Collections 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 FISCAL YEAR TOTAL TAX COLLECTED WITHIN THE 1 ENDED LEVY FOR FISCAL YEAR OF THE LEVY DECEMBER 31 FISCAL YEAR AMOUNT % OF LEVY 1998 14,719,382 14,511,118 98.6% 1999 15,850,628 15,595,427 98.4% 2000 16,633,388 16,337,790 98.2% 2001 16,967,683 16,677,882 98.3% 2002 18,581,814 18,285,908 98.4% 2003 19,486, 858 19,149,258 98.3% 2004 20,451,011 20,184,238 98.7% 2005 21,654,069 21,358,689 98.6% 2006 22,796,225 22,339,299 98.0% 2007 24,049,060 23,585,143 98.1% Sources: ' Annual Tax Receivable Summary 2 2007 Annual Property Tax Reports from King County Statistical Section, 7-16 2007 Comprehensive Annual Financial Report 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 TABLE 9 PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS Page 2 of 2 Property tax collections 0 Collections within fiscal yr f Collections in subsequent years 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 FISCAL YEAR COLLECTIONS 2 ENDED IN SUBSEQUENT TOTAL COLLECTIONS TO DATE DECEMBER 31 YEARS AMOUNT % OF LEVY 1998 208,264 14,719,382 100.0% 1999 254,790 15,850,217 100.0% 2000 291,580 16,629,370 100.0% 2001 282,509 16,960,391 100.0% 2002 281,900 18,567,808 99.9% 2003 332,060 19,481,318 100.0% 2004 234,434 20,418,671 99.8% 2005 240,042 21,598,731 99.7% 2006 367,051 22,706,349 99.6% 2007 23, 585,143 98.1% City of Renton, Washington Statistical Section, 7-17 2007 Comprehensive Annual Financial Report $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 FUNCTION TABLE 10 SALES TAX COLLECTIONS BY SECTOR LAST TEN FISCAL YEARS Page 1 of 2 Sales Tax Collections by Sector 1998-2002 1998 1999 2000 2001 2002 City of Renton, Washington ] Retail Construction ] Manufacturing ]Transportation Wholesale Automotive Services ]Miscellaneous FISCAL YEAR 19981 1999 2000 2001 20022 RETAIL TRADE SECTOR Furniture N/A $1,245,207 $1,564,002 $1,920,734 $1,623,906 Electronics and Appliances General Merchandise N/A 560,413 581,268 643,592 673,164 Misc Retail Trade N/A 586,594 713,017 704,420 681,148 Others N/A 1,495,038 1,641,879 1,608,082 1,622,166 Subtotal Retail $3-128,884 $3,887,252 $4,500,166 $4,876-828 $4,600,384 OTHER SECTORS Construction $1,913,356 $1,545,886 $1,671,621 $2,060,061 $1,899,005 Manufacturing 710,983 411,607 348,439 426,965 547,333 Transportation 516,572 614,603 768,421 648,177 621,314 Wholesale 1,601,399 1,692,718 1,643,207 1,535,709 1,451,387 Automotive 2,840,747 3,446,262 3,775,582 3,307,794 3,549,973 Services 1,770,069 2,063,272 2,128,373 1,913,630 1,835,039 Miscellaneous 302,535 467,401 428,379 574,268 546,400 Subtotal - Other Sectors $9,655,661 $10,241,749 $10-764.0 2 $10,466-604 $10,450,451 Total Sales Tax $12.784.544 $14.129.001 $15,264-1 l38 $15.343.432 $15,050,835 1 The detail information for the Retail sector for 1998 is not available 2 Transportation category has been merged with Miscellaneous. Certain group codes have been shifted around to better reflect the category they truly represent. (The shift will not affect the total sales tax collected.) Source: Finance Department, City of Renton Statistical Section, 7-18 2007 Comprehensive Annual Financial Report $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 FUNCTION TABLE 10 SALES TAX COLLECTIONS BY SECTOR LAST TEN FISCAL YEARS Page 2 of 2 Sales Tax Collections by Sector 2003-2007 2003 2004 2005 2006 2007 City of Renton, Washington ■ Retail ■ Construction 3 Manufacturing 3 Transportation ■ Wholesale ■ Automotive ■ Services 3 Miscellaneous FISCAL YEAR 2003 2004 2005 2006 20072 RETAIL TRADE SECTOR Furniture $1,758,082 $2,205,114 $1,203,942 $1,276,644 $1,245,901 Electronics and Appliances 1,065,416 1,130,621 1,143,188 General Merchandise 788,699 1,013,876 1,073,144 1,100,217 1,169,225 Misc Retail Trade 763,596 862,919 848,834 928,083 658,429 Others 1,667,483 1,651,782 2,227,721 2,464,896 1,378,094 Subtotal Retail $4-977.860 $5,733,691 $6,419,057 $6,900,461 $5,594,837 OTHER SECTORS Construction $2,122,560 $2,641,907 $2,495,684 $2,688,902 $3,898,202 Manufacturing 754,501 556,555 569,269 797,166 983,110 Transportation 563,863 628,918 494,866 567,401 Wholesale 1,442,263 1,416,559 1,025,132 1,016,468 1,083,059 Automotive 3,625,878 3,538,502 3,946,163 4,303,221 4,176,747 Services 1,953,254 1,677,315 1,736,569 2,039,090 4,103,240 Miscellaneous 567,225 460,372 421,715 378,233 503,000 Subtotal - Other Sectors $11,024544 $10,920-128 $10,689,398 $11,790-482 $14,747,358 Total Sales Tax $16,007,404 $16,653,819 $17,108,455 $18,690,943 $20,342,195 Statistical Section, 7-19 2007 Comprehensive Annual Financial Report TABLE 11 RATIOS OF OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS Page 1 of 2 2007 Primary Government Debt PWTF Loans 15% Bonds 47% GO Bonds 38% GOVERNMENTAL ACTIVITIES BUSINESS -TYPE ACTIVITIES GENERAL SPECIAL FISCAL OBLIGATION ASSESSMENT ENTERPRISE PWTF YEAR BONDS BONDS BONDS LOANS 1998 24,486,738 1,335,000 28,580,000 9,245,358 1999 26,466,763 680,000 26,860,000 9,024,460 2000 24,345,738 320,000 25,020,000 8,645,788 2001 29,289,290 135,000 23,070,000 7,894,357 2002 33,797,023 - 31,230,000 8,222,135 2003 32,245,982 29,070,000 7,579,447 2004 30,629,403 37,680,000 8,350,304 2005 29,107,664 35,790,000 11,581,168 2006 45,584,314 33,840,000 10,692,020 2007 44,017,551 33,405,000 9,802,877 Source: City of Renton, Finance & IS Department 'The percentage of personal Income column is based on personal income of King County. (See table 16) City of Renton, Washington Statistical Section, 7-20 2007 Comprehensive Annual Financial Report 100,000,000 80,000,000 60,000,000 40,000,000 20,000,000 TABLE 11 RATIOS OF OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS Page 2 of 2 Primary Government Debt Total Debt 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Years BUSINESS - TYPE ACTIVITIES TOTAL PRIMARY FISCAL CAPITAL GOVERNMENT YEAR LEASES DEBT City of Renton, Washington PERCENTAGE' OF PERSONAL DEBT PER INCOME POPULATION CAPITA 1998 82,095 63,731,189 9.73% 46,270 1,377 1999 42,276 63,075,498 8.64% 47,620 1,325 2000 86,609 58,420,135 7.56% 50,052 1,167 2001 45,656 60,436,304 7.86% 51,140 1,182 2002 7,238 73,258,398 9.40% 53,840 1,361 2003 58,105 68,955,537 8.78% 54,900 1,256 2004 33,834 76,695,545 8.75% 55,360 1,385 2005 8,621 76,489,458 8.69% 56,840 1,346 2006 24,500 90,140,834 9.33% 58,360 1,545 2007 76,074 87,301,502 N/A 60,290 1,448 Statistical Section, 7-21 2007 Comprehensive Annual Financial Report Debt Limit Total net debt applicable to limit Legal debt margin Total net debt applicable to the limit as a percentage of debt limit City of Renton, Washington TABLE 12 LEGAL DEBT MARGIN INFORMATION LAST TEN FISCAL YEARS Page 1 of 2 FISCAL YEAR 1998 1999 2000 2001 2002 $ 319,387,557 $ 319,387,556 $ 340,899,076 $ 379,698,131 $ 419,541,037 26,958,807 24,462,390 22,248,983 27,586,389 32,258,499 $ 292,428,750 $ 294,925,166 $ 318,650,093 $ 352,111,742 $ 387,282,538 Source: City of Renton, Finance & IS Department 8.44% 7.66% 6.53% 7.27% 7.69% Statistical Section, 7-22 2007 Comprehensive Annual Financial Report TABLE 12 LEGAL DEBT MARGIN INFORMATION LAST TEN FISCAL YEARS Page 2 of 2 City of Renton, Washington LEGAL DEBT MARGIN CALCULATION FOR FISCAL YEAR 2007 Assessed Value $ 8,370,801,805 Add back: exempt real property Total assessed value $ 8,370,801,805 Debt Limit 2.5% of general purpose limit, voted and non -voted 209,270,045 2.5% Utility purpose limit, voted 209,270,045 2.5% Open Space, Park and Capital facilities, voted 209,270,045 Total Debt Limit $ 627,810,135 Debt applicable to limit: General obligation bonds $ 44,000,575 Contracts Payable 16,976 44,017,551 Less: Amount set aside for repayment of general obligation debt and contracts payable (1,392,915) Total net debt applicable to limit $ 42,624,636 Legal Debt Margin $ 585,185,499 Statistical Section, 7-23 FISCAL YEAR 2003 2004 2005 2006 2007 Debt Limit $ 448,787,441 $ 477,947,409 $ 502,332,893 $ 550,085,741 $ 627,810,135 Total net debt applicable to limit 28,173,327 28,137,536 26,423,667 $ 42,515,728 42,624,636 Legal debt margin $ 420,614,114 $ 449,809,873 $ 475,909,226 $ 507,570,013 $ 585,185,499 Total net debt applicable to the limit as a percentage of debt limit 6.28% 5.89% 5.26% 7.73% 6.79% LEGAL DEBT MARGIN CALCULATION FOR FISCAL YEAR 2007 Assessed Value $ 8,370,801,805 Add back: exempt real property Total assessed value $ 8,370,801,805 Debt Limit 2.5% of general purpose limit, voted and non -voted 209,270,045 2.5% Utility purpose limit, voted 209,270,045 2.5% Open Space, Park and Capital facilities, voted 209,270,045 Total Debt Limit $ 627,810,135 Debt applicable to limit: General obligation bonds $ 44,000,575 Contracts Payable 16,976 44,017,551 Less: Amount set aside for repayment of general obligation debt and contracts payable (1,392,915) Total net debt applicable to limit $ 42,624,636 Legal Debt Margin $ 585,185,499 Statistical Section, 7-23 2007 Comprehensive Annual Financial Report 50,000,000 40,000,000 30,000,000 20,000,000 10,000,00( City of Renton, Washington TABLE 13 RATIOS OF GENERAL BONDED DEBT OUTSTANDING LAST TEN FISCAL YEARS General Obligation Debt -- LVV3 2004 2005 2006 2007 LESS: NET GENERAL' AMOUNTS' GENERAL FISCAL OBLIGATION AVAILABLE OBLIGATION YEAR BONDS IN DEBT DEBT 1998 24,486,738 1999 26,466,763 2000 24,345,738 2001 29,289,290 2002 33,797,023 2003 32,245,982 2004 30,629,403 2005 29,107,664 2006 45,584,314 2007 44,017,551 Source: 32,256,820 Finance Department, City of Renton 2 King County Department of Assessments % OF GO DEBT TO ASSESSED ASSESSED PER VALUE VALUE CAPITA 1,590,425 22,896,313 3,825,109,334 0.60% 495 2,345,570 24,121,193 4,258,500,750 0.57% 507 2,096,755 22,248,983 4,514,205,078 0.49% 445 1,770,724 27,518,566 4,988,126,362 0.55% 538 1,540,203 32,256,820 5,549,470,895 0.58% 599 1,879,654 30,366,328 5,959,258,370 0.51% 553 1,440,509 29,188,894 6,333,995,426 0.46% 527 2,683,999 26,423,665 6,697,750,147 0.39% 465 3,068,587 42,515,727 7,334,476,542 0.58% 729 1,392,915 42,624,636 8,370,801,805 0.51% 707 Statistical Section, 7-24 2007 Comprehensive Annual Financial Report TABLE 14 DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT $220 $200 $180 $160 N a $140 0 0 o $120 c o $100 $80 $60 $40 $20 $0 GOVERNMENTAL UNIT City of Renton Direct and Overlapping Debt Others - $0.5 ESTIMATED 2 DEBT' % OUTSTANDING APPLICABLE City of Renton, Washington ESTIMATED SHARE OF OVERLAPPING DEBT City of Renton Direct Debt $ 44,017,551 100% $ 44,017,551 City of Renton Overlapping Debt King County 1,100,812,149 2.83% 31,152,984 Port of Seattle 397,835,000 2.83% 11,258,731 Renton School District #403 220,744,287 57.33% 126,552,700 Issaquah School District #411 277,472,271 1.69% 4,689,281 Kent School District #415 242,615,894 0.0004% 970 Fire District 10-1 499,470 0.6667% 3,330 Fire District 40-1 9,946,110 0.8735% 86,879 King County Library 73,607,300 0.58% 426,922 City of Renton Overlapping Debt Total Direct and Overlapping Debt Sources ' King County Department of Executive Services 2 King County Department of Assessments $ 174,171,797 $ 218,189,348 Statistical Section, 7-25 2007 Comprehensive Annual Financial Report 4.00 3.50 O 3.00 F < 2.50 cc 2.00 W 1.50 O U 1.00 0.50 0.00 City of Renton, Washington TABLE 15 PLEDGED -REVENUE COVERAGE LAST TEN FISCAL YEARS WATER/SEWER & GOLF COURSE REVENUE BONDS 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 YEARS FISCAL YEAR (a) REVENUE EXPENSES W/O DEPRECIATION NET REVENUE AVAILABLE FOR DEBT SERVICE DEBT SERVICE PRINCIPAL INTEREST (b) COVERAGE WATER AND SEWER REVENUE BONDS: 1998 21,597,100 14,877,435 6,719,665 1,765,000 1,377,342 2.14 1999 21,784,310 16,407,442 5,376,868 1,810,000 1,333,452 1.71 2000 23,682,511 15,653,774 8,028,737 1,630,000 1,112,778 2.93 2001 21,994,245 16,051,720 5,942,525 1,730,000 1,019,923 2.16 2002 24,045,660 17,495,472 6,550,188 1,805,000 928,303 2.40 2003 25,934,120 16,990,519 8,943,601 1,635,000 1,282,115 3.07 2004 27,301,230 18,325,863 8,975,367 1,475,000 1,010,268 3.61 2005 27,889,360 18,892,824 8,996,536 1,630,000 1,477,124 2.90 2006 27,750,508 18,850,225 8,900,283 1,680,000 1,430,199 2.86 2007 32,887,272 22,020,642 10,866,630 1,740,000 1,373,036 3.49 GOLF COURSE REVENUE BONDS (c): 1998 2,109,506 1,355,669 753,837 155,000 298,658 1.66 1999 2,252,217 1,278,489 973,728 280,000 157,548 2.23 2000 2,328,044 1,320,681 1,007,363 210,000 227,222 2.30 2001 2,375,997 1,480,024 895,973 220,000 219,348 2.04 2002 2,279,361 1,415,674 863,687 225,000 210,548 1.98 2003 2,177,122 1,573,296 603,826 235,000 201,210 1.38 2004 2,198,597 1,460,445 738,152 250,000 191,223 1.67 2005 2,208,335 1,657,294 551,041 260,000 180,348 1.25 2006 2,337,672 1,725,854 611,818 270,000 168,778 1.39 2007 2,333,955 1,770,684 563,271 285,000 156,358 1.28 Notes: (a) Revenue includes connection charges, system development charges, latecomer fees, and interest revenue. (b) Bond financing requirements are that the average annual coverage is at least 1.3 times the average annual debt service for Water and Sewer revenue bonds. The Golf System revenue bonds coverage requirement is at least 1.25 times that of respective calendar year's annual debt service. (c) 1999 Golf System Refunding Revenue Bonds were issued to refund the 1994 Golf System Revenue Bonds. Source: City of Renton, Finance & IS Department Statistical Section, 7-26 2007 Comprehensive Annual Financial Report 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% TABLE 16 DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN FISCAL YEARS UNEMPLOYMENT RATE ■UNEMPLOYMENT RATE 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 City of Renton, Washington Statistical Section, 7-27 PER CAPITA UN - PERSONAL PERSONAL SCHOOL EMPLOYMENT POPULATION a INCOME b INCOME ° MEDIAN ENROLLMENT e RATE f FISCAL KING CITY OF YEAR COUNTY RENTON KING COUNTY KING COUNTY AGE RENTON KING COUNTY 1998 1,686,266 46,270 65,485,103,000 38,241 35.26 12,513 4.0% 1999 1,712,122 47,620 72,997,198,000 42,218 35.50 12,557 3.8% 2000 1,737,046 50,052 77,271,598,000 44,438 35.70 12,527 4.1% 2001 1,758,312 51,140 76,883,017,000 43,842 35.92 12,556 5.1% 2002 1,774,312 53,840 77,940,608,000 44,313 36.13 12,892 6.1% 2003 1,779,300 54,900 78,534,839,000 44,482 36.38 13,046 6.2% 2004 1,788,300 55,360 87,617,622,000 49,286 36.60 13,062 5.2% 2005 1,808,300 56,840 88,065,435,000 48,789 36.83 13,192 4.7% 2006 1,835,300 58,360 96,579,228,000 52,655 36.93 13,397 4.2% 2007 1,861,300 60,290 N/A N/A 36.97 13,570 3.7% Sources: a Washington State Office of Financial Management b U.S. Bureau of Economic Analysis. C U.S. Bureau of Economic Analysis. d Washington State Office of Financial Management e Renton Public Schools T Washington State Employment Security Department Statistical Section, 7-27 2007 Comprehensive Annual Financial Report EMPLOYER The Boeing Company Valley Medical Center Renton School District #403 PACCAR Inc. Federal Aviation Administration Renton Technical College City of Renton ER Solutions, Inc. Youngs -Columbia of Washington LLC IKEA Multiple Zones International Inc. Wizards of the Coast K & L Distributors Kay Smith Business TABLE 17 PRINCIPAL EMPLOYERS 2007 City of Renton, Washington 1998 Source: 'Business license records and individual queries Note: The table does not include non-profit organizations. The 2007 FTE count for the City of Renton does not include temporary employees. Statistical Section, 7-28 % OF TOTAL % OF TOTAL CITY CITY EMPLOYEES' RANK EMPLOYMENT EMPLOYEES RANK EMPLOYMENT 13,224 1 30.43% 21,276 1 45.88% 2,400 2 5.52% 1,397 3 3.01% 1,376 3 3.17% 658 5 1.42% 1,268 4 2.92% 1,537 2 3.31% 997 5 2.29% 1,127 4 2.43% 835 6 1.92% 641 7 1.47% 644 7 1.39% 524 8 1.21% 392 9 0.90% 0.00% 356 10 0.82% 655 6 1.41% 326 8 0.70% 312 9 0.67% 292 10 0.63% 22,013 50.65% 28,224 60.86% Source: 'Business license records and individual queries Note: The table does not include non-profit organizations. The 2007 FTE count for the City of Renton does not include temporary employees. Statistical Section, 7-28 2007 Comprehensive Annual Financial Report This page is intentionally left blank. City of Renton, Washington Statistical Section, 7-29 2007 Comprehensive Annual Financial Report City of Renton, Washington TABLE 18 FULL TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION LAST TEN FISCAL YEARS Page 1 of 2 Statistical Section, 7-30 FISCAL YEAR 1128 1999 2000 292 2002 FUNCTION General Government 82.6 85.1 90.1 93.5 97.5 Public Safety Police Commissioned Officers 86.0 85.0 85.0 86.0 88.0 Non -Commissioned Officers 31.2 34.2 34.2 36.2 40.2 Fire Commissioned Officers 100.0 103.0 105.0 105.0 105.0 Non -Commissioned Officers 10.0 10.0 11.0 11.0 12.0 Planning/Building/Public Works Administration/Development Services 42.2 43.2 42.7 42.7 42.7 Transportation Systems 31.0 32.0 33.0 33.0 34.0 Utility Systems 22.2 20.2 20.7 20.8 20.8 Maintenance Services 58.0 59.5 59.5 61.0 61.0 Culture and Recreation Parks and Recreation 77.5 77.5 78.5 80.5 77.5 Library 15.0 15.0 15.0 15.0 15.0 Golf Course 9.0 9.0 9.0 10.0 10.0 Total 564.7 573.7 583.7 594.7 603.7 Source: City of Renton, Finance & IS Department Statistical Section, 7-30 2007 Comprehensive Annual Financial Report City of Renton, Washington TABLE 18 FULL TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION LAST TEN FISCAL YEARS Page 2 of 2 Statistical Section, 7-31 FISCAL YEAR 2003 2004 2005 2006 2007 FUNCTION General Government 96.5 97.5 94.5 89.5 89.5 Public Safety Police Commissioned Officers 88.0 89.0 91.0 97.0 99.0 Non -Commissioned Officers 40.2 41.2 43.2 42.2 44.2 Fire Commissioned Officers 105.0 106.0 106.0 106.0 107.0 Non -Commissioned Officers 12.0 13.0 13.0 14.0 15.0 Planning/Building/Public Works Administration/Development Services 42.7 42.7 42.5 46.5 48.5 Transportation Systems 33.0 34.5 34.5 35.5 35.5 Utility Systems 20.8 20.8 20.8 24.8 29.3 Maintenance Services 62.0 62.0 62.0 64.1 67.0 Culture and Recreation Parks and Recreation 77.5 77.5 76.5 76.5 81.0 Library 15.0 15.0 14.0 14.0 15.0 Golf Course 10.0 10.0 10.0 10.0 10.0 Total 602.7 609.2 608.0 620.0 641.0 Statistical Section, 7-31 2007 Comprehensive Annual Financial Report City of Renton, Washington TABLE 19 OPERATING INDICATORS BY FUNCTION LAST TEN FISCAL YEARS Page 1 of 2 Source: City of Renton Departments Statistical Section, 7-32 FISCAL YEAR 1998 1999 2000 2001 2002 FUNCTION Police Physical arrests 1,860 2,287 2,463 3,411 3,813 Parking violations 4,240 3,379 5,955 6,325 4,776 Traffic violations 12,248 11,832 12,188 10,936 11,448 Fire Number of calls answered 7,808 7,698 7,895 8,273 8,233 Inspections 1,880 2,021 2,265 2,269 2,261 Highways and Streets Street resurfacing (miles) 1.15 4.65 1.76 6.54 6.13 Recyclables collected (tons/yr) 4,855.6 5,045.7 5,493.8 5,793.6 5,119.8 Culture and Recreation Athletic field attendence 82,879 86,527 87,000 119,422 126,534 Community Center admissions 154,327 148,041 156,500 174,500 162,970 Library Volume in collections 144,685 153,935 147,818 148,758 155,463 Total volumes borrowed 310,996 334,619 352,334 382,443 456,982 Water Metered connection 13,595 14,279 14,224 13,969 14,583 Average daily consumption 7,554 7,426.5 7,457 7,097 7,232 (thousands of gallons) Peak daily consumption 15,177 11,472 13,590 11,960 12,477 (thousands of gallons) Source: City of Renton Departments Statistical Section, 7-32 2007 Comprehensive Annual Financial Report City of Renton, Washington TABLE 19 OPERATING INDICATORS BY FUNCTION LAST TEN FISCAL YEARS Page 2 of 2 Statistical Section, 7-33 FISCAL YEAR 2003 2004 2005 2006 2007 FUNCTION Police Physical arrests 3,735 4,280 4,590 2,489 2,925 Parking violations 2,742 3,733 3,575 3,520 5,995 Traffic violations 11,651 10,963 12,866 10,172 9,148 Fire Number of calls answered 8,582 8,984 9,202 10,096 10,159 Inspections 2,681 2,539 3,438 3,505 3,197 Highways and Streets Street resurfacing (miles) 4.85 3.67 3.69 3.86 1.59 Recyclables collected (tons/yr) 4,389.0 4,920.3 4,934.2 4,843 5,004 Culture and Recreation Athletic field participants 137,811 156,707 155,000 155,000 91,053 Community Center participants 172,911 172,537 177,761 177,761 162,476 Library Volume in collections 158,676 165,406 190,011 193,965 188,359 Total volumes borrowed 499,792 512,059 491,470 464,333 491,397 Water Metered connection 15,181 15,379 16,585 16,668 16,958 Average daily consumption 7,581 7,635 7,306 7,999 8,008 (thousands of gallons) Peak daily consumption 14,080 14,248 13,025 15,271 14,750 (thousands of gallons) Statistical Section, 7-33 2007 Comprehensive Annual Financial Report City of Renton, Washington TABLE 20 CAPITAL ASSETS STATISTICS BY FUNCTION LAST TEN FISCAL YEARS Page 1 of 2 Source: City of Renton Departments Statistical Section, 7-34 FISCAL YEAR 1998 1999 2000 2001 2002 FUNCTION Police safety Police: Stations 1.0 1.0 1.0 1.0 1.0 Patrol units 6.0 7.0 7.0 7.0 7.0 Fire stations 5.0 5.0 5.0 5.0 5.0 Highways and streets Street (miles) 190.1 180.6 195.4 195.6 213.2 Streetlights (added) 24.0 46.0 69.0 75.0 53.0 Culture and recreation Parks acreage 1,158.0 1,158.0 1,158.0 1,158.0 1,158.0 Parks 27.0 28.0 28.0 26.0 26.0 Swimming pools - - - - - Tennis courts 17.0 17.0 17.0 17.0 17.0 Community centers 1.0 1.0 1.0 1.0 1.0 Water Water mains (miles) 248.6 252.2 278.0 283 289.0 Fire hydrants 2,839 2,893 2,993 3,102 3,193 Sewer Sanitary sewers (miles) 169.1 170.9 162.6 168.1 176.7 Storm sewers (miles) 177.9 180.9 183.8 189.7 199.4 Source: City of Renton Departments Statistical Section, 7-34 2007 Comprehensive Annual Financial Report City of Renton, Washington TABLE 20 CAPITAL ASSETS STATISTICS BY FUNCTION LAST TEN FISCAL YEARS Page 2 of 2 Statistical Section, 7-35 FISCAL YEAR 2003 2004 2005 2006 2007 FUNCTION Police safety Police: Stations 1.0 1.0 1.0 1.0 1.0 Patrol units 7.0 7.0 7.0 7.0 7.0 Fire stations 5.0 5.0 5.0 5.0 5.0 Highways and streets Street (miles) 213.7 213.7 218.0 224.6 233.7 Streetlights 120.0 92.0 86.0 134.0 213.0 Culture and recreation Parks acreage 1,158.0 1,158.0 1,158.0 1,160.0 1,160.0 Parks 26.0 26.0 26.0 26.0 28.0 Swimming pools - 1.0 1.0 1.0 1.0 Tennis courts 17.0 17.0 17.0 17.0 17.0 Community centers 1.0 1.0 1.0 1.0 1.0 Water Water mains (miles) 291.0 291.1 293.0 295.0 300.0 Fire hydrants 3,240 3,274 3,374 3,440 3,544 Sewer Sanitary sewers (miles) 183.5 189.6 193.3 204.9 206.3 Storm sewers (miles) 204.0 209.7 214.8 219.7 222.3 Statistical Section, 7-35 2007 Comprehensive Annual Financial Report This page is intentionally left blank. City of Renton, Washington Statistical Section, 7-36