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HomeMy WebLinkAbout2011 CAFR14; City of Renton 2011 om re ensive Annuainancia eport I 0 AM MUM MENU ---ti - City of RENTON. AHEAD OF THE CUPVE trw%ln Ren 0 Renton City Hall 9 1055 South Grady Way o Renton, Washington 98057 0 rentonwa.gov Printed by Print & Mail Services, City of Renton Cover photo by Denis Law CITY OF RENTON 2011 COMPREHENSIVE ANNUAL FINANCIAL REPORT For Year Ended December 31, 2011 Iwen Wang, Administrator Jamie Thomas, Fiscal Services Director Administrative Services Department City of Renton 1055 South Grady Way Renton, Washington 98057 (425) 430-6858 Website: www.rentonwa.gov TABLE OF CONTENTS DECEMBER 31, 2011 ITEM PAGE INTRODUCTORY SECTION Letterof Transmittal.....................................................................................................................................1-1 2010 Comprehensive Annual Financial Report Award.................................................................................1-8 Corporate Organization Structure & Reporting Relations............................................................................1-9 FINANCIAL SECTION Independent Auditor'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...................................................4-6 Statement of Revenues, Expenditures and Changes in Fund Balances...........................................4-7 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Government Funds to the Statement of Activities........................................4-8 Proprietary Fund Financial Statements: Statementof Net Assets..................................................................................................................4-9 Statement of Revenues, Expenses, and Changes in Fund Balances..............................................4-11 Statementof Cash Flows...............................................................................................................4-12 Fiduciary Fund Statements: Statement of Fiduciary Net Assets................................................................................................4-14 Statement of Changes in Fiduciary Net Assets..............................................................................4-15 Notes to Financial Statements: Note 1: Significant Accounting Policies...........................................................................................4-16 Note 2: Compliance and Accountability..........................................................................................4-26 Note 3: Deposits and Investments..................................................................................................4-28 Note4: Property Taxes....................................................................................................................4-31 Note 5: Capital Assets and Depreciation.........................................................................................4-32 Note6: Pensions..............................................................................................................................4-37 Note 7: Other Post Employment Benefits.......................................................................................4-48 Note8: Contingencies.....................................................................................................................4-50 Note9: Risk Management...............................................................................................................4-51 Note 10: Interfund Transactions.......................................................................................................4-54 Note11: Net Assets...........................................................................................................................4-57 Note 12: Prior Period Adjustments...................................................................................................4-58 Note13: Long Term Debt..................................................................................................................4-58 Note 14: Deferred Charges in Proprietary Funds..............................................................................4-63 Note15: Segment Information..........................................................................................................4-63 Note16: Joint Ventures.....................................................................................................................4-64 Note17: Subsequent Events.............................................................................................................4-66 Required Supplementary Information Other than MD&A Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget to Actual GeneralFund..........................................................................................................................................5-1 TABLE OF CONTENTS DECEMBER 31, 2011 ITEM PAGE Actuarial Valuation of Firefighters' Pension Fund.................................................................................5-2 LEOFF I Retiree Medical Benefits - Schedule of Funding Progress........................................................ ... 5-3 Combining Statements Net Assets by Component....................................................................................................7-2 Non -Major Fund Descriptions................................................................................................................6-1 Table 2: CombiningBalance Sheet......................................................................................................................6-5 Combining Statement of Revenues, Expenditures and Changes in Fund Balances.............................6-11 Fund Balance of Government Funds....................................................................................7-5 Schedule of Revenues, Expenditures and Changes in Fund Balances Table 4: Budgetto Actual..................................................................................................................................6-17 Combining Statement of Net Assets, Non -Major Enterprise Funds....................................................6-30 General Government Tax Revenue by Source......................................................................7-7 Combining Statement of Revenues, Expenses and Changes in Fund Net Assets, Revenue Capacity: Non -Major Enterprise Funds.........................................................................................................6-32 Table 6: Statement of Cash Flows, Non -Major Enterprise Funds......................................................................6-33 Combining Statement of Net Assets, Internal Service Funds..............................................................6-35 Assessed Value Taxable Property.........................................................................................7-9 Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets, Table 8: Internal Service Funds...................................................................................................................6-37 Combining Statement of Cash Flows, Internal Service Funds..............................................................6-38 Property Tax Levies and Collections...................................................................................7-11 Statement of Changes in Assets and Liabilities Agency Fund — Special Deposit..................................6-40 Table 10: STATISTICAL SECTION Statistical Section Description................................................................................................................7-1 Financial Trends: Table 1: Net Assets by Component....................................................................................................7-2 Table 2: Changes in Net Assets...........................................................................................................7-3 Table 3: Fund Balance of Government Funds....................................................................................7-5 Table 4: Changes in Fund Balances of Government Funds................................................................7-6 Table 5: General Government Tax Revenue by Source......................................................................7-7 Revenue Capacity: Table 6: Principal Property Tax Payers...............................................................................................7-8 Table 7: Assessed Value Taxable Property.........................................................................................7-9 Table 8: Property Tax Rates Direct and Overlapping Governments................................................7-10 Table 9: Property Tax Levies and Collections...................................................................................7-11 Table 10: Sales Tax Collections by Sector...........................................................................................7-12 Debt Capacity: Table 11: Ratios of Outstanding Debt by Type...................................................................................7-13 Table 12: Legal Debt Margin Information..........................................................................................7-14 Table 13: Ratios of General Bonded Debt Outstanding.....................................................................7-15 Table 14: Direct and Overlapping Governmental Activities Debt......................................................7-16 Table 15: Pledged -Revenue Coverage for Water and Sewer and Golf Course Revenue Bonds ........7-17 Demographic and Economic Information: Table 16: Demographic and Economic Statistics................................................................................7-19 Table17: Principal Employers............................................................................................................7-20 Operating Information: Table 18: Full Time Equivalent City Government Employees by Function.........................................7-21 Table 19: Operating Indicators by Function.......................................................................................7-22 Table 20: Capital Assets Statistics by Function...................................................................................7-23 iv City of t � ht(t)n June 30, 2012 Honorable Denis Law, Mayor Members of the Renton City Council Residents of Renton City of Renton, Washington RE: THE 2011 COMPREHENSIVE ANNUAL FINANCIAL REPORT Dear Mayor Law, City Councilmembers, and Residents of Renton: We are pleased to present the City's Comprehensive Annual Financial Report for the year ended December 31, 2011. 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, 2011, 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, 2011, are fairly presented in conformity with Introduction, 1-1 2011 Comprehensive Annual Financial Report City of Renton, Washington GAAP. The State Auditor's report is included as the first component of the financial section of this report. 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 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 23.79 square miles. We have over 1,183 acres of parks that includes 30 active parks. As presented by the Washington State Office of Financial Management, our 2011 estimated population was 92,590. 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 medical, street construction and maintenance, planning and zoning, libraries, parks and recreation, municipal court, and general administrative services. Introduction, 1-2 2011 Comprehensive Annual Financial Report City of Renton, Washington 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 does not purchase water from outside sources. The City's sewage is treated by King County, but the City is responsible for transferring and maintaining the 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. Introduction, 1-3 2011 Comprehensive Annual Financial Report City of Renton, Washington Economic Condition and Outlook From the City of Renton's most recent economic forecast: With real GDP growth of 2.8 percent in the fourth quarter of last year, the U.S. economy has now expanded ten consecutive quarters. Recently, job growth appears to have picked up meaningfully. Yet the consensus view is cautionary, citing previous job spurts that have proved temporary, falling home prices, weak wage gains, and slowing global growth. The outcome is continued, but subpar, U.S. growth, at least through 2013. The Puget Sound economy suffered a greater relative employment loss than the U.S. economy during the recession, but is now growing slightly faster. Including the indirect effects, expansion in Boeing payrolls over the last eighteen months accounts for about one-half the total gain of 21,000 jobs. Job growth in the 1 -2 percent range is expected. Burgeoning 737 orders, higher production rates, and rising Boeing employment will lift the Renton economy over the forecast period. Employment and population growth rates are expected to beat comparable regional rates. Taxable retail sales growth will exceed 5 percent. Recessions early in the last decade and again late in the decade robbed the region and some of its sub -areas of virtually the entire net increase in jobs. Overall Puget Sound employment in 2010 was within 2,000 jobs (0.1 percent) of the level in 2000. This unenviable trend, however, has now started to reverse with Renton fully participating. Measured by employment (based on City business license records), the Renton economy outperformed the rest of the region in 2011. In addition to faster job creation, the increase in jobs lifted total empOloyement 3.8 percent above the level in 2000, only the third time in the last eleven years that employment has climbed above the earlier benchmark. The Renton economy, like the U.S. and Puget Sound economies, is expected to post better results for the current decade, building on last year's growth. Both orders and deliveries for 737 airplanes are expected to rise, population and housing activity will climb, and taxable retail sales will advance. Combining the forecasts for Boeing and non -Boeing jobs, total Renton employment is expected to rise 4.3 percent this year, slow to 1.7 percent in 2013, and average 1.4 percent growth annually from 2014 to 2016. This sustained job growth in the first half of the decade will mark an end to the fiver -year cycle of alternating periods of contraction and expansion in Renton employment dating from the early 1990's. Growth in Renton population can be forecast from growth in regional population and Renton housing permits relative to regional housing permits, and similarly, that Renton housing permits are dependent on regional housing permits and population growth in Renton relative to the region. Using the latest regional forecast for population and housing permits, this approach yields a steady population growth rate in Renton of 2.2 percent (excluding annexations) throughout the forecast period along with slow recovery in housing permits — from a low of 307 units last year to 330 units in 2012, 377 in 2013, and an average of 450 units per year from 2014 to 2016. Introduction, 1-4 2011 Comprehensive Annual Financial Report City of Renton, Washington Total taxable retail sales in Renton in 2011, however bucked the improving trend, slipping .8 percent. This is due entirely to continued steep decline in the construction sector (down 33.8 percent in the first three quarters compared to the year-earlier period), and in particular to a drop in heavy construction (off 85.7 percent). If taxable sales in the construction sector in Renton had matched the regional pace (-8.6 percent) last year, then total taxable sales would have climbed 2.7 percent, faster than the overall regional pace. The outlook for most of the key drivers of retail spending is expected to improve over the forecast period for the Puget Sound economy. Personal income is expected rise 5.1 percent this year, but only 3.9 percent in 2013 as the payroll tax cut is rescinded. Faster income growth between 2014 and 2016, a significant pickup in housing permits, and a drop in the unemployment rate will all support healthy growth in taxable retail sales. Higher interest rates, which primarily affect sales of durable goods, are the only negative. UPDATE FROM 2011-2012 BUDGET ADJUSTMENT DOCUMENT The 2011-2012 adopted budget is the first biennial budget for the City of Renton. After the mid -biennial budget adjustment, total adopted revenue is $487 million against total expenditures of $532 million. The adjusted revenue shows an increase of 6.9% from the combined 2009-2010 adopted budget level and the expenditures reflect an increase of 14.9% from the adopted 2009-2010 budgeted expenditures. General Government Revenue The amended revenue projection for 2012 is $103 million. This is an overall decrease of 8% from the adopted 2011 revenue or a 7% decrease over the 2011 year-end actual. This budget anticipates that property tax collections will be $33 million in 2012. This is 2.3% growth from 2011 actual amounts. The growth rate for 2012 is due to higher new construction activity not captured in 2011 valuation, using approximately 1% of "banked capacity" from 2010, plus the allowed 1% revenue growth limit. The City has reached its tax rate limit of $3.10 per $1,000 assessed valuation in 2012. We are projecting modest growth in some of our more volatile revenue sources. Sales tax is projected to grow 2.3% over 2011 year-end actual, development permit and plan review fees are expected to increase 3% in 2012, and a 1.5% annual employment growth for business license fees. We projected a 10% decrease in Real Estate Excise Tax in 2011, and a similar 10% increase in 2012, reflecting an improving economy. As mentioned previously, the adopted budget assumes both Initiatives 1100 and 1105 would pass, resulting in a loss of $200k in state distributed liquor profits in 2011 and $1 million in both profits and excise tax in 2012. General Government Expenditures As we informed the Council at the second quarter financial update in September 2010, the preliminary biennial budget projection was over $2 million out of balance. Introduction, 1-5 2011 Comprehensive Annual Financial Report City of Renton, Washington The higher than anticipated new construction property tax helped to narrowed the gap slightly, but cuts were still necessary to bridge the nearly $2 million gap. Given prior reductions the additional $2 million reduction, while a relatively small percentage of the budget, was more difficult to find than we anticipated. We approached the reduction by focusing on administrative or indirect cost, in areas where workload has been reduced due to the state of the economy or due to programming changes, by reviewing internal parity and sustainability, and by deferring capital outlays. These are to ensure reductions will have minimal service impacts on the community and as recommended by the Community Budget Advisory Group. The resulting reductions total $2.03 million over the biennium, and include reducing another 4.5 FTEs as more fully described in the budget detail. Fund Balance After the mid -biennium budget adjustment, the General Fund will end the 2011-2012 biennium with a $1.2 million decrease to the estimated 2010 year end fund balance for a projected total of $9.9 million or a little over 10% of General Fund expenditures. This is below the 12% target but above the 8% required minimum. The City also maintains a $5 million catastrophic reserve in the Risk Management Fund and a well funded equipment replacement reserve. These reserves and fund balances would provide a safety net during a turbulent and uncertain period in our history. OTHER INFORMATION Awards and Acknowledgements The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Renton for its comprehensive annual financial report for the fiscal year ended December 31, 2010. The City has a long history of achieving this prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current comprehensive annual financial report continues to meet the Certificate of Achievement Program's requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. The 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. Significant contributors are specifically identified in the acknowledgements on page ii of this document. We are pleased with the comprehensive Introduction, 1-6 2011 Comprehensive Annual Financial Report City of Renton, Washington 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, Iwen Wang Administrative Services Administrator Jamie Thomas Fiscal Services Director Introduction, 1-7 Certificate of Achievement for Excellence in Financial Reporting Presented to City of Renton Washington For its Comprehensive Annual Financial Report for the Fiscal Year Ended December 31, 2010 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. r President Executive Director CITY COUNCIL Rich Zwicker, President Randy Corman, Marcie Palmer, Terri Briere, Ed Prince, Greg Taylor, Don Persson 425-430-6500 COMMUNITY SERVICES Terry Higashiyama, Administrator 425-430-6600 Facilities Peter Renner, Director Parks Planning & Natural Resources Leslie Betlach, Director Recreation Tim Williams, Director Human Services Karen Bergsvik, Manager Library Bette Anderson, Director Renton History Museum Elizabeth Stewart, Manager Community Resources and Events Parks & Golf Course Kelly Beymer, Director RENTON CITIZENS MAYOR Denis Law 425-430-6500 CHIEF ADMINISTRATIVE OFFICER Jay Covington 425-430-6500 PUBLIC WORKS Gregg Zimmerman, Administrator 425-430-7394 Maintenance Services Michael Stenhouse, Director Transportation Systems Douglacobson, Deputy PW Administrator Utility Systems Lys Hornsby, Director POLICE I I FIRE AND EMERGENCY SERVICES Kevin Milosevich, Chief Mark Peterson, Chief/ Administrator 425-430-7503 425-430-7501 Support Operations Tim Troxel, Deputy Chief Special Operations Investigations Administrative Services Staff and Auxiliary Services I Patrol Services I Patrol Operations F UNICIPAL COURT JUDGE TerryJurado 425-430-6550 COMMUNITY AND ECONOMIC DEVELOPMENT Chip Vincent, Administrator 425-430-6580 Economic Development and Neighborhoods Suzanne Dale Estey, Director Development Services Neil Watts, Director Planning Vacant, Director CITY ATTORNEY Larry Warren, Administrator 425-255-8678 HUMAN RESOURCES& RISK MANAGEMENT Nancy Carlson, Administrator 425-430-7650 Response Operations Human Resources Bill Flora, Deputy Fire Chief Cathryn Laird, Manager Safety and Support Services Erik Wallgren, Deputy Chief Emergency Management Deborah Needham, Director Community Risk Reduction Dave Pargas, Assistant Fire Marshall Risk Management Gary Lamb, Manager FTBrenefits Program Boggs, Manager EXECUTIVE Jay Covington, CAO 425-430-6500 Mayor's Office Communications Preeti Shridhar, Director ADMINISTRATIVE SERVICES Iwen Wang, Administrator 425-430-6858 Finance Jamie Thomas, Director Information Technology Mehdi Sadri, Director City Clerk/ Cable Manager Bonnie Walton, City Clerk 2011 Comprehensive Annual Financial Report This page intentionally left blank. City of Renton, Washington Introduction, 1-10 ipR op It Washington State Auditor Brian Sonntag INDEPENDENT AUDITOR'S REPORT June 29, 2012 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, 2011, 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 and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. 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, 2011, 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. Insurance Building, P.O. Box 40021 • Olympia, Washington 98504-0021 • (360) 902-0370 • TDD Relay (800) 833-6388 FAX (360) 753-0646 • http://www.sao.wa.gov As described in Note 1, during the year ended December 31, 2011, the City has implemented the Governmental Accounting Standards Board Statement No. 54 - Fund Balance Reporting and Governmental Fund Type Definitions. In accordance with Government Auditing Standards, we will also issue our report dated June 29, 2012, on our consideration of the City's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. That report will be issued under separate cover in the City's Single Audit Report. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. Accounting principles generally accepted in the United States of America require that the management's discussion and analysis on pages 3-1 through 3-14, budgetary comparison information on page 5-1, pension trust fund on pages 5-2 and information on postemployment benefits other than pensions on pages 5-3 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during the audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. 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 financial statements on pages 6-1 through 6-40 is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. This information has been subjected to auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information 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 do not express an opinion or provide any assurance on it. Sincerely, BRIAN SONNTAG, CGFM STATE AUDITOR 2011 Comprehensive Annual Financial Report This page intentionally left blank. City of Renton, Washington 2011 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, 2011. 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 2011 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 The City's 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 full accrual basis of accounting in conformity with GAAP. 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 Auditor's Office (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; 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. 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. Management's Discussion and Analysis, 3-1 2011 Comprehensive Annual Financial Report Financial Highlights City of Renton, Washington • The City's total assets as of December 31, 2011, exceeded liabilities by $453.3 million. • As of December 31, 2011, the City's Governmental Activities reported net assets of $453.3 million. Of this total, $53.2 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. • Investment in capital assets (net of related debt) comprises $373.6 million of the $453.3 million in Governmental Activities net assets. • The business type activities have total net assets of $240.4 million. 90.3% of this total, $217.1 million, represents the City's investments in capital assets (net of related debt). An unrestricted balance of $23.3 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, 2011, was $141.5 million. Of this amount, $41.4 million are revenue bonds and PWTF loans dedicated to the waterworks projects. Employee leave balances and other post -employment benefits total $9.1 million. The balance of $91.0 million of City debt is dedicated for general governmental purposes, including the purchase of City Hall, the construction of the downtown parking garage, construction of two libraries, replacement of a fire station, purchase of a fire station, the construction of a regional communications center and construction of a regional jail facility. 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 2011. 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. Management's Discussion and Analysis, 3-2 2011 Comprehensive Annual Financial Report Figure 1 REQUIRED COMPONENTS OF THE ANNUAL FINANCIAL REPORT Mana.,lement Discussion and Analysis {required supplementary information) IC (new) c e Government -wide Financial Statements (new) r Fund financial Statements (refocused) 2 Notes to tlx: Financial Statements LVI(expanded/restructured) � � o Required Supplementary v ' Information o Cr_ a (other than MD&A) 2 - 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 waterworks (water, sewer, and surface water), solid waste management and services, golf course, and airport. Management's Discussion and Analysis, 3-3 2011 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, Judicial, 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 the 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. 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 Management's Discussion and Analysis, 3-4 2011 Comprehensive Annual Financial Report City of Renton, Washington • 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 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 CIP Fund and Capital Improvement Fund. 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 financial 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. General fund budget variances are specifically addressed later in this discussion and analysis. 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 Management's Discussion and Analysis, 3-5 2011 Comprehensive Annual Financial Report City of Renton, Washington 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 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. 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 2010 to 2011 shows an increase in total net assets of $21.4 million. Management's Discussion and Analysis, 3-6 2011 Comprehensive Annual Financial Report City of Renton, Washington Table 1 is a condensed version of the Government -wide Statement of Net Assets. rent and other assets iital assets TOTAL ASSETS Long-term liabilities Other liabilities TOTAL LIABILITIES NET ASSETS: Invested in capital assets, net of related debt Restricted Unrestricted TOTAL NET ASSETS TABLE 1 CONDENSED STATEMENT OF NET ASSETS Governmental Activities Business -type Activities 2011 2010 2011 2010 2011 $ 132,921,226 $ 110,211,266 $ 27,572,702 $ 22,876,764 $ 160,493,928 432,796,288 426,430,381 258,473,522 258,268,233 691,269,810 565,717,514 536,641,647 286,046,224 281,144,997 851,763,738 Total 2010 $ 133,088,030 684,698,614 817,786,644 99,449,845 83,035,094 42,069,463 44,940,693 141,519,308 127,975,787 12,949,403 13,014,744 3,532,129 4,401,367 16,481,532 17,416,111 112,399,248 96,049,838 45,601,592 49,342,060 158,000,840 145,391,898 373,641,842 383,016,494 217,103,722 214,001,083 590,745,564 597,017,577 26,432,127 11,664,101 - 58,747 26,432,127 11,722,848 53,244,297 45,911,214 23,340,910 17,743,107 76,585,207 63,654,321 $ 453,318,266 $ 440,591,809 $ 240,444,632 $ 231,802,937 $ 693,762,898 $ 672,394,746 The majority of the City's net assets (85%) 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 decreased from 2010 to 2011 by $6.3 million. Investments in capital assets decreased by $9.4 million in the Governmental activities, which is due to the issuance of $16.7 million of new debt to build two new libraries. Very little capital work had taken place in 2011; therefore no significant assets have been recorded related to the new debt. Business -type activities increased $3.1 million primarily due to capital activity as opposed to significant reductions in debt although revenue bond debt in the Golf Course fund (a business -type activity) was replaced by an interfund loan from the General Fund in 2010. Interfund loan debt is not included in the calculation of Investments in capital assets net of related debt. Restricted assets, representing resources that are subject to external restrictions on how they may be used, equate to 3.8% of total net assets, up from 1.7% in 2010. This increase is related to the $16.7 million of new debt issued in 2011 which is restricted for capital construction related to the new libraries. The remaining balance (unrestricted net assets) of $76.6 million will be used to meet the City's ongoing commitments and plans. As of December 31, 2011, 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) increased in 2011 by $22.4 million. Governmental activities generated 57% of this total or $12.7 million, while business -type activities generated $9.7 million of this total. Management's Discussion and Analysis, 3-7 2011 Comprehensive Annual Financial Report Table 2 is a condensed version of the Statement of Activities for the City. City of Renton, Washington Expenses: CONDENSED STATEMENT OF ACTIVITIES Governmental Activities Business -type Activities Total 2011 2010 2011 2010 2011 2010 Revenues: 2,563,989 2,402,692 Public safety 52,627,849 50,657,146 Program revenues: 52,627,849 50,657,146 Physical environment 2,151,322 2,425,279 Charges for services $ 15,534,490 $ 15,895,357 $ 62,328,294 $ 55,064,203 $ 77,862,784 $ 70,959,560 Operating grants and contributions 15,540,897 10,520,151 465,468 125,819 16,006,365 10,645,970 Capital grants and contributions 12,135,982 9,102,331 2,473,309 1,056,961 14,609,291 10,159,292 General revenues: 819,138 882,740 Culture and recreation 11,955,737 13,518,312 Propertytaxes 33,309,975 32,586,884 - - 33,309,975 32,586,884 Sales and use taxes 22,008,777 21,591,375 Waterworks utility - 22,008,777 21,591,375 Other taxes 20,984,369 21,236,078 - - 20,984,369 21,236,078 Other general revenues 1,594,288 877,145 188,325 397,637 1,782,613 1,274,782 Total revenues 121,108,778 111,809,321 65,455,396 56,644,620 186,564,174 168,453,941 Expenses: General government 4,268,321 10,018,501 4,268,321 10,018,501 Judicial 2,563,989 2,402,692 2,563,989 2,402,692 Public safety 52,627,849 50,657,146 52,627,849 50,657,146 Physical environment 2,151,322 2,425,279 2,151,322 2,425,279 Transportation 25, 376, 308 16,903,492 25, 376, 308 16,903,492 Economic environment 6,491,151 7,363,396 6,491,151 7,363,396 Health and human services 819,138 882,740 819,138 882,740 Culture and recreation 11,955,737 13,518,312 11,955,737 13,518,312 Interest on long-term debt 2,165,960 2,127,347 - - 2,165,960 2,127,347 Waterworks utility - - 37,148,813 36,574,469 37,148,813 36,574,469 Airport 2,026,804 1,993,202 2,026,804 1,993,202 Solid waste utility 14,434,201 14,826,315 14,434,201 14,826,315 Golf course - 2,099,936 2,296,870 2,099,936 2,296,870 Total expenses 108,419,775 106,298,905 55,709,754 55,690,856 164,129,529 161,989,761 Increase in net assets before transfers 12,689,003 5,510,416 9,745,642 953,764 22,434,645 6,464,180 Transfers 37,454 (17,095) (37,454) 17,095 Increase in net assets 12,726,457 5,493,321 9,708,188 970,859 22,434,645 6,464,180 Net assets- beginning 440,591,809 434,357,089 231,802,937 230,921,831 672,394,746 665,278,920 Prior period adjustments - 741,399 (1,066,493) (89,753) (1,066,493) 651,646 Net assets- ending $ 453,318,266 $ 440,591,809 $ 240,444,632 $ 231,802,937 $ 693,762,898 $ 672,394,746 Sixty-six percent (66%) of the City's total activities are for governmental activities such as providing police, fire, parks, libraries, recreation, building safety, and planning services. The remaining activities relate to business -type services provided by the City. The largest business -type activities include water, sewer, surface water and solid waste activities. Governmental Activities Analysis Governmental activities cost a total of $108.4 million in 2011, up 2% from 2010. Of this amount, $43.2 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 and contributions. The net expense (total expenses less program revenues) of $65.2 million was the cost of governmental services City taxpayers primarily paid through various taxes. Management's Discussion and Analysis, 3-8 2011 Comprehensive Annual Financial Report City of Renton, Washington Chart 1 portrays the cost of each of the City's governmental programs along with each program's generated revenues (fees and intergovernmental revenues specifically related to that program). Chart 1 Expensesand Program Revenues- Governmental Activities $60,000,000 $50,000,000 $40,000,000 $30,000,000 $20,000,000 $10,000,000 $0 Program O Expenses ■Program Revenues Chart 2 depicts the sources of revenues that fund governmental activities. Approximately sixty- three percent (63%) is from various taxes. Charges for services, grants, and interest earnings generate thirty-three percent (37%) of total revenue for general governmental activities. Chart 2 Revenues by Source- Governmental Activities Other General Revenues 1% Charges for Services 13% Other Taxes Operating G ra nts a nd 17% Contributions 13% Capital Grants and Property Taxes Contributions 28% 10% Business -Type Activities Analysis Charts 3 and 4 present the same information on business -type activities as illustrated for governmental activities. Chart 3 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). Management's Discussion and Analysis, 3-9 2011 Comprehensive Annual Financial Report City of Renton, Washington Chart 3 Expenses and Program Revenues- Business -Type Activities $50,000,000 $45,000,000 $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 Waterworks Utility Airport Solid Waste Utility Golf Course Program D Expenses ■ Program Revenues The City's largest business -type activity, the Waterworks Utility, had a positive net change ($8.4 million) at the end of 2011 compared to $21,000 change in 2010. This large increase is primarily due to rate increases, which are necessary to replace failing systems and provide on-going capital infrastructure replacements. The City generated $45.6 million in various fees for services and other sources from waterworks activities and had $37.1 million in expenses. The Airport's total expenses were $2.0 million. Total revenues for 2011 were $2.0 million, which is consistent with 2010 revenues. The Solid Waste Utility's revenues were $15.0 million generated from fees for services and $111,488 in grants and contributions. The total expenses were $14.4 million. The Golf Course generated a total of $2.0 million in green fees, driving range charges, and other user fees. The total expenses for the Golf Course were $2.1 million. The Golf Course had a loss of $85,000 for the year. Chart4 Revenues by Source - Business -Type Activities Capital Grants and Contributions Other General Revenues 4% 0% Management's Discussion and Analysis, 3-10 2011 Comprehensive Annual Financial Report City of Renton, Washington Business -type activities are supported primarily from charges for services. In the City of Renton, $62.3 million was generated from charges for services in the business -type activities. These comprise ninety-eight percent (95%) of the total financial support for these activities. Grant revenues increased $1.8 million from 2010 to 2011 largely due to a surface and storm water improvement grant for approximately $1.0 million and US Department of Transportation grant for approximately $500,000 for the airport taxiway improvements. 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 $49.2 million, an increase of $17.2 million in comparison to last year. This large increase is attributed to a $16.7 million in general obligation bonds issue in 2011. Approximately fifty-nine percent (59%) constitutes unrestricted fund balance, which has been either committed or assigned to reflect the City Council and management's plans and commitments to be expended in future periods. 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 or capital reserves. The large increase in fund balances resulted from the issuance of general obligation debt, mentioned above, and is restricted for the capital construction of two new libraries. The General Fund is the chief operating fund of the City. At the end of the current year, unrestricted fund balance of the general fund was $13.8 million, while total fund balance ended at $15.7 million. Although unrestricted, this balance has assigned designation for specific functions and plans approved by the City Council. The fund balance increased by $1.3 million as the City was able to realize expenditure savings in excess of revenue received. The Municipal Facilities CIP fund has been included as a major fund of the City due to the importance of municipal projects that may be accounted for in this fund in any given year. The fund balance increased by $17.1 million in 2011 and is directly related the general obligation debt noted earlier. The Capital Improvement fund is the last major governmental fund. This fund accounts for the many transportation -related projects in the City. The fund balance increased $129,200. 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. Net assets in the Waterworks Utility Fund and the Solid Waste Fund were $215.4 million and $2.9 million respectively. This represents an increase in the Management's Discussion and Analysis, 3-11 2011 Comprehensive Annual Financial Report City of Renton, Washington Waterworks Utility Fund of $7.5 million and an increase in the Solid Waste Fund of $0.7 million. The factors concerning the finances of these two funds have been addressed in the discussion of business -type activities. GENERAL FUND BUDGETARY HIGHLIGHTS During the year there was a $4.2 million increase in appropriations between the original and final amended budget. This increase was mainly due to 2010's LEOFFI medical contribution to fully fund actuarially determined annual obligations for 2010 ($700,000) and to fund the gap for banking service fees ($197,000). Other increases were department carryfoward requests which were offset by an increase of $2.7 million to budgeted revenues. In addition, the General Fund did not spend $6.1 million of the legally appropriated expenditures. As a result, the General Fund fund balance increased by $768,000 in 2011. 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, 2011, amounts to $691.3 million as presented on the following table. The increase of $6.6 million in 2011 is made up of large capital projects such as Rainier Ave., Strander Blvd., Lake Washington Trail, Rainer Ave. storm water improvements, and Stonegate/Summerwind wastewater improvements. 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, 2011, was $129.7 million. This was a net increase (new issues less principal payments and refunding) of $10.5 million. Management's Discussion and Analysis, 3-12 TABLE 3 CAPITAL ASSETS (Net of Depreciation/Amortization) Governmental Activities Business -Type Activities Total 2011 2010 2011 2010 2011 2010 nd and Land Improvements $ 182,417,081 $ 178,817,027 $ 6,165,321 $ 6,165,321 $ 188,582,402 $ 184,982,348 i ildi ngs and Structures 64,658,927 66,856,417 11,192,993 11,642,209 75,851,920 78,498,626 :her Improvements 142,756,922 145,034,569 230,654,790 231,025,361 373,411,712 376,059,930 achinery and Equipment 9,512,108 9,780,472 640,493 584,590 10,152,601 10,365,062 tangible Assets 647,589 1,133,843 827,827 832,123 1,475,416 1,965,966 instruction in Progress 32,803,660 24,808,053 8,992,098 8,018,629 41,795,758 32,826,682 Total $ 432,796,287 $ 426,430,381 $ 258,473,522 $ 258,268,233 $ 691,269,809 $ 684,698,614 The increase of $6.6 million in 2011 is made up of large capital projects such as Rainier Ave., Strander Blvd., Lake Washington Trail, Rainer Ave. storm water improvements, and Stonegate/Summerwind wastewater improvements. 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, 2011, was $129.7 million. This was a net increase (new issues less principal payments and refunding) of $10.5 million. Management's Discussion and Analysis, 3-12 2011 Comprehensive Annual Financial Report TABLE 4 LONG-TERM DEBT City of Renton, Washington The City was able to reduce aggregate debt service payments and realize present value gains by refunding 2001 General Obligation Refunding Bonds. More detailed information about the City's long-term debt can be found in Note 13 to the financial statements. FUTURE YEAR'S BUDGETARY IMPACTS The 2011-2012 adopted budget is the first biennial budget for the City of Renton. After the mid - biennial budget adjustment, total adopted revenue is $487 million against total expenditures of $532 million. The adjusted revenue shows an increase of 6.9% from the combined 2009-2010 adopted budget level and the expenditures reflect an increase of 14.9% from the adopted 2009- 2010 budgeted expenditures. In addition to implementing a biennial budget, the City also formed a Community Budget Advisory Group comprised of local residents, business owners, and community leaders. This group was asked several questions in order to solicit their suggestions on opportunities for greater efficiencies and costs savings. They were able to provide the City with a number of valuable recommendations, some of which have been included in the 2011-2012 adopted budget. We initially saw a promising start in early 2010, but the recovery slowed to a crawl during the second quarter of 2010. Our modest growth projections for 2011 were barely met. Housing starts and permits slowly began increasing in 2011 and continue with upward growth into the first quarter of 2012. During budget preparation in 2010, our preliminary projections indicated that maintaining current levels of services in General Government Operations would result in a deficit of $2 million in this budget period. We made the necessary adjustments to bring our expenditures in line with our revenue projections through the next biennium. Every department made difficult choices, reducing or reorganizing services while minimizing adverse impacts to our citizens. In addition, the 2011-2012 adopted budget does not restore any of the service reductions made during 2010 even though some of these cuts and reductions cannot be sustained in the long run. It is likely these service reductions will remain for the 2013-2014 biennial budget. The City is committed to continuing efforts to evaluate the way we do business. We will continue to right -size the structure of government. We will continue to engage our employees to help find innovative and effective ways of serving our citizens. We will continue to practice fiscal responsibility and reduce our debt. And we will continue to work with our labor groups to find sustainable ways of managing our labor costs in order for us to continue to provide quality services to our citizens with fewer dollars. Management's Discussion and Analysis, 3-13 Governmental Activities Business -Type Activities Total 2011 2010 2011 2010 2011 2010 General Obligation Bonds $ 50,290,000 $ 36,425,000 $ - $ - $ 50,290,000 $ 36,425,000 Revenue Bonds - - 34,925,000 36,955,000 34,925,000 36,955,000 Other Long -Term Debt 38,053,639 38,511,875 6,443,218 7,357,566 44,496,857 45,869,441 Total $ 88,343,639 $ 74,936,875 $ 41,368,218 $ 44,312,566 $ 129,711,857 $ 119,249,441 The City was able to reduce aggregate debt service payments and realize present value gains by refunding 2001 General Obligation Refunding Bonds. More detailed information about the City's long-term debt can be found in Note 13 to the financial statements. FUTURE YEAR'S BUDGETARY IMPACTS The 2011-2012 adopted budget is the first biennial budget for the City of Renton. After the mid - biennial budget adjustment, total adopted revenue is $487 million against total expenditures of $532 million. The adjusted revenue shows an increase of 6.9% from the combined 2009-2010 adopted budget level and the expenditures reflect an increase of 14.9% from the adopted 2009- 2010 budgeted expenditures. In addition to implementing a biennial budget, the City also formed a Community Budget Advisory Group comprised of local residents, business owners, and community leaders. This group was asked several questions in order to solicit their suggestions on opportunities for greater efficiencies and costs savings. They were able to provide the City with a number of valuable recommendations, some of which have been included in the 2011-2012 adopted budget. We initially saw a promising start in early 2010, but the recovery slowed to a crawl during the second quarter of 2010. Our modest growth projections for 2011 were barely met. Housing starts and permits slowly began increasing in 2011 and continue with upward growth into the first quarter of 2012. During budget preparation in 2010, our preliminary projections indicated that maintaining current levels of services in General Government Operations would result in a deficit of $2 million in this budget period. We made the necessary adjustments to bring our expenditures in line with our revenue projections through the next biennium. Every department made difficult choices, reducing or reorganizing services while minimizing adverse impacts to our citizens. In addition, the 2011-2012 adopted budget does not restore any of the service reductions made during 2010 even though some of these cuts and reductions cannot be sustained in the long run. It is likely these service reductions will remain for the 2013-2014 biennial budget. The City is committed to continuing efforts to evaluate the way we do business. We will continue to right -size the structure of government. We will continue to engage our employees to help find innovative and effective ways of serving our citizens. We will continue to practice fiscal responsibility and reduce our debt. And we will continue to work with our labor groups to find sustainable ways of managing our labor costs in order for us to continue to provide quality services to our citizens with fewer dollars. Management's Discussion and Analysis, 3-13 2011 Comprehensive Annual Financial Report City of Renton, Washington The City continues to benefit from progressive economic development activities even as the country continues to struggle through the worst economic recession in history. • The Landing is a master planning development area on land previously owned by Boeing. The development has added more than 900 residential units and 600,000 square feet of retail, including a major entertainment district to the city's core. Restaurants and stores at the Landing have enjoyed double-digit sales growth over the previous year. Several new tenants have come in including Dick's Sporting Goods, Marshalls and Panera Bread. • Harrington Square, a very impressive apartment complex celebrated its grand opening in the Highlands/Sunset area. • A number of new companies located in Renton this year that resulted in over 500 new local jobs for our community and new businesses opened in the Downtown, Cascade Village, Renton Village, Southport and Highlands areas of the City. Downtown Renton continues to attract new businesses including several new restaurants, Pike Place Bakery, a new children's clothing store and a book store. • The Farmers Market continues to enjoy record attendance — over 4,000 people every week and 58 registered vendors. The market has also expanded to Valley Medical Center on Sundays. • The Seahawks Training Camp brought over 22,000 people to Renton during the summer, many who shopped and dined in our community. • Private investors purchased the 21 acres south of the Landing and we are looking forward to a significant redevelopment of this area. • The City signed a historic agreement with Boeing for a 20 -year renewed lease for the Renton Municipal Airport. Boeing continues to have over 2,000 orders worth more than $157 billion, and announced that their increased production of the 737 MAX will take place in Renton, increasing production rates to 42 airplanes per month by 2014. • Waterways Cruises has been successfully operating their unique sightseeing and dining cruises from Southport in Renton, bringing over 7,000 visitors to our community in its first year of operation. • The Compass Regional Veteran's Center opened in downtown Renton. This attractive four- story building occupies nearly 60,000 square feet and offers 58 units of affordable housing for veterans and their families and 8,500 square feet of retail space. For more information regarding 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 Iwen Wang, Finance and Information Technology Administrator, 1055 South Grady Way, Renton, WA 98057 or visit our web site at www.rentonwa.gov. Management's Discussion and Analysis, 3-14 2011 Comprehensive Annual Financial Report ASSETS Cash and cash equivalents Cash with fiscal agent Deposit with fiscal agent Investments at fair value Receivables (net of allowance for uncollectibles) Internal balances Inventories Prepayments Other non-current assets Intangible assets (net) Land Construction in progress Capital assets (net of accumulated depreciation) Total assets LIABILITIES Accounts payable and other liabilities Interest payable Unearned revenue Non-current liabilities: Due within one year Due in more than one year Total liabilities Restricted for OPEB Investment in capital assets, net of related debt Restricted for: Judicial Public safety Cuture and recreation Debt service OPEB liability Unrestricted Total net assets City of Renton, Washington STATEMENT OF NET ASSETS December 31, 2011 10,713,999 PRIMARY GOVERNMENT 13,770,934 GOVERNMENTAL BUSINESS -TYPE 367,999 ACTIVITIES ACTIVITIES TOTAL $ 45,475,533 $ 12,606,868 $ 58,082,401 125,134 - 125,134 1,329,607 - 1,329,607 26,826,729 7,441,156 34,267,885 14,496,078 8,124,483 22,620,561 1,514,117 (1,514,117) - - 322,500 322,500 238,401 - 238,401 42,915,627 591,812 43,507,439 647,589 827,827 1,475,416 182,417,081 6,165,321 188,582,402 32,803,660 8,992,098 41,795,758 216,927,958 242,488,276 459,416,234 565,717,514 286,046,224 851,763,738 10,713,999 3,056,935 13,770,934 209,084 158,915 367,999 2,026,320 316,279 2,342,599 7,120, 581 3,180,123 10,300, 704 92,329,264 38,889,340 131,218,604 112,399,248 45,601,592 158,000,840 373,641,842 217,103,722 590,745,564 31,600 577,252 19,448, 219 1,032,361 5,342,695 53,244,297 31,600 577,252 19,448, 219 1,032,361 - 5,342,695 23,340,910 76,585,207 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-1 2011 Comprehensive Annual Financial Report STATEMENT OF ACTIVITIES For the Year Ended December 31, 2011 Page 1 of 2 City of Renton, Washington Business -type activities: Waterworks utility 37,148,813 43,003,494 159,585 PROGRAM REVENUES Airport 2,026,804 2,294,383 194,395 48,327 OPERATING 14,434,201 15,015,434 111,488 - CHARGES FOR GRANTS AND CAPITAL GRANTS FUNCTIONS/PROGRAMS EXPENSES SERVICES CONTRIBUTIONS & CONTRIBUTIONS Primary government: 164,129,529 77,862,784 16,006,365 14,609,291 Governmental activities: Taxes: General government $ 4,268,321 $ 2,756,613 $ 1,186,986 $ 32,661 Judicial 2,563,989 3,565,216 35,034 - Public safety 52,627,849 641,483 7,936,188 - Physical environment 2,151,322 1,015,323 - 83,192 Transportation 25,376,308 3,275,596 5,938,820 11,724,871 Economic environment 6,491,151 2,486,396 334,896 - Health and human services 819,138 - - - Culture and recreation 11,955,737 1,793,863 108,973 295,258 Interest on long-term debt 2,165,960 - - - Total governmental activities 108,419,775 15,534,490 15,540,897 12,135,982 Business -type activities: Waterworks utility 37,148,813 43,003,494 159,585 2,424,982 Airport 2,026,804 2,294,383 194,395 48,327 Solid waste utility 14,434,201 15,015,434 111,488 - Golf course 2,099,936 2,014,983 - - Total business -type activities 55,709,754 62,328,294 465,468 2,473,309 Total primary government 164,129,529 77,862,784 16,006,365 14,609,291 General revenues: Taxes: Property taxes Retail sales taxes Business taxes Excise taxes Penalties and interest Interest and investment earnings Miscellaneous Transfers Total general revenues and transfers Change in net assets Net assets - beginning Prior Period Adjustment Net assets - ending The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-2 2011 Comprehensive Annual Financial Report STATEMENT OF ACTIVITIES For the Year Ended December 31, 2011 22,008,777 Page 2 of 2 16,870,284 NET (EXPENSE) REVENUE AND CHANGES IN NET ASSETS 16,870,284 PRIMARY GOVERNMENT GOVERNMENTAL BUSINESS -TYPE - ACTIVITIES ACTIVITIES TOTAL 719,606 $ (292,061) $ (292,061) 1,036,261 (37,454) 1,036,261 (44,050,178) 150,871 (44,050,178) (1,052,807) 9,708,188 (1,052,807) (4,437,021) (4,437,021) (3,669,859) (3,669,859) (819,138) (819,138) (9,757,643) (9,757,643) (2,165,960) (2,165, 960) (65,208,406) (65,208,406) 8,439,248 8,439,248 510,301 510,301 692,721 692,721 (84,953) (84,953) 9,557,317 9,557,317 (65,208,406) 9,557,317 (55,651,089) 33,309,975 33,309,975 22,008,777 22,008,777 16,870,284 16,870,284 4,113, 705 4,113, 705 380 - 380 602,516 117,090 719,606 991,772 71,235 1,063,007 37,454 (37,454) - 77,934,863 150,871 78,085, 734 12,726,457 9,708,188 22,434,645 (1,066,493) (1,066,493) $ 453,318,266 $ 240,444,632 $ 693,762,898 City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-3 2011 Comprehensive Annual Financial Report ASSETS Cash & cash equivalents Cash with fiscal agent Deposit with fiscal agent Investments Receivables (net of allowances) Taxes Customer accounts Accrued interest & penalty Special assessments Interfund loans receivable Due from other funds Due from other governmental units Advances to other funds TOTAL ASSETS BALANCE SHEET GOVERNMENTAL FUNDS December 31, 2011 Page 1 of 2 MUNICIPAL FACILITIES CAPITAL GENERAL CIP IMPROVEMENT City of Renton, Washington OTHER TOTAL GOVERNMENTAL GOVERNMENTAL FUNDS FUNDS $ 7,873,281 $ 14,572,104 $ 2,306,585 $ 3,832,436 $ 28,584,406 125,134 - - - 125,134 - - 1,329,607 - 1,329,607 4,632,146 8,601,129 1,361,453 2,262,082 16,856,810 2,880,657 - - - 2,880,657 3,753,123 - - 1,500 3,754,623 45,678 38,480 12,110 29,207 125,475 - - - 19,279 19,279 500,416 - - 500,416 44,063 10,822 - 747 55,632 4,842,807 85,168 561,616 2,079,696 7,569,287 1,716,067 - - - 1,716,067 $ 26,413,372 $ 23,307,703 $ 5,571,371 $ 8,224,947 $ 63,517,393 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-4 2011 Comprehensive Annual Financial Report LIABILITIES AND FUND BALANCES Liabilities Accounts payable Taxes payable Retainage payable Due to other funds Matured interest payable Interfund loans payable Custodial accounts Deposits Deferred revenue Accrued employee wages and leave payable Interfund advances - non-current Total liabilities Fund balances Nonspendable Loans/Advances receivable Restricted Committed Capital purposes Assigned Capital purposes Special revenue funds Operating reserves and carryforwards Unassigned Total fund balances TOTAL LIABILITIES AND FUND BALANCES City of Renton, Washington BALANCE SHEET GOVERNMENTAL FUNDS December 31, 2011 Page 2 of 2 MUNICIPAL OTHER TOTAL FACILITIES CAPITAL GOVERNMENTAL GOVERNMENTAL GENERAL CIP IMPROVEMENT FUNDS FUNDS $ 2,656,549 $ 362,604 $ 382,460 $ 36,605 $ 3,438,218 33,148 34 - - 33,182 - 16,475 133,600 500 150,575 73,546 1,019 39,735 - 114,300 - - 9,188 9,188 - 133,840 133,840 225,935 - 225,935 34,739 - 34,739 4,151,414 1,971,987 6,123,401 3,489,265 - - 3,489,265 - - 566,160 - 566,160 10,664,596 380,132 1,264,983 2,009,092 14,318,803 1,149,907 - - - 1,149,907 786,611 18,120,553 - 1,032,360 19,939,524 - 3,081,070 3,380,397 1,007,024 7,468,491 1,725,948 925,991 2,946,437 5,598,376 - - - 1,230,034 1,230,034 13,812,258 - 13,812,258 15,748,776 22,927,571 4,306,388 6,215,855 49,198,590 $ 26,413,372 $ 23,307,703 $ 5,571,371 $ 8,224,947 $ 63,517,393 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-5 2011 Comprehensive Annual Financial Report City of Renton, Washington RECONCILIATION OF THE BALANCE SHEET TO THE STATEMENT OF NET ASSETS December 31, 2011 FUND BALANCES - TOTAL GOVERNMENTAL FUNDS $ 49,198,590 Amounts reported for governmental activities in the statement of net assets are different because: Capital assets and other non-current assets used in governmental activities are not financial resources and therefore are not reported in the governmental funds Other non-current assets 42,896,348 Intangible assets (net of accumulated amortization) 647,589 Capital assets (net of accumulated depreciation) 432,148,699 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 4,097,082 Certain liabilities (such as bonds payable and accrued expenses) are not due and payable in the current period and therefore are not reported in the governmental funds Interest payable (199,896) Long-term liabilities (99,449,844) Internal service funds are used by management to charge the costs of certain activities to individual funds. Total assets and liabilities of the internal service funds that are reported with governmental activities, less amounts reported above. 23,979,698 NET ASSETS OF GOVERNMENTAL ACTIVITIES $ 453,318,266 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-6 2011 Comprehensive Annual Financial Report City of Renton, Washington STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS For the Year Ended December 31, 2011 Page 1 of 1 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES 3,020,645 MUNICIPAL (1,140,800) OTHER TOTAL OTHER FINANCING SOURCES (USES) FACILITIES CAPITAL GOVERNMENTAL GOVERNMENTAL Transfer in GENERAL CIP IMPROVEMENT FUNDS FUNDS REVENUES (2,268,329) (76,772) - (1,799,056) (4,144,157) Taxes $ 71,443,862 $ 575,234 $ - $ 4,247,592 $ 76,266,688 Licenses and permits 2,665,983 - 1,696,116 48,763 4,410,862 Intergovernmental revenues 10,534,331 389,757 7,706,388 811,481 19,441,957 Charges for services 3,860,290 658 - 330,076 4,191,024 Fines and forfeits 3,150,326 - - - 3,150,326 Interfund revenues 3,057,642 20,054,603 - - 3,057,642 Contributions 192,699 (3,692) 4,034,441 65,000 4,288,448 Investment earnings 366,332 51,568 16,429 40,949 475,278 Miscellaneous revenues 646,868 114 42 1,584 648,608 TOTAL REVENUES 95,918,333 1,013,639 13,453,416 5,545,445 115,930,833 EXPENDITURES Current: General government 10,598,389 339,122 - 295 10,937,806 Judicial 2,563,989 - - 2,563,989 Public safety 52,986,589 52,986,589 Physical environment 2,048,971 - - 2,048,971 Transportation 8,018,267 - 2,019,343 734 10,038,344 Economic environment 5,876,231 325,731 - 245,201 6,447,163 Health and human services 511,934 - - 511,934 Culture and recreation 10,215,229 868,867 81,985 11,166,081 Capital outlay 78,089 2,322,659 12,565,685 15,425 14,981,858 Debt service: Principal payments - - - 2,783,237 2,783,237 Interest and fiscal charges - 116,744 9,188 2,376,944 2,502,876 TOTAL EXPENDITURES 92,897,688 3,973,123 14,594,216 5,503,821 116,968,848 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES 3,020,645 (2,959,484) (1,140,800) 41,624 (1,038,015) OTHER FINANCING SOURCES (USES) Transfer in 15,420 2,010,822 1,270,000 590,408 3,886,650 Transfer (out) (2,268,329) (76,772) - (1,799,056) (4,144,157) Restricted for OPEB - 9,425,000 9,425,000 GO bonds issued 16,715,000 - 16,715,000 Premium on general obligation debt - 1,405,553 862,616 2,268,169 Sale of capital assets 500 - - 500 Payment to refunded bond escrow agent - - - (9,950,000) (9,950,000) TOTAL OTHER FINANCE SOURCES (USES) (2,252,409) 20,054,603 1,270,000 (871,032) 18,201,162 NET CHANGE IN FUND BALANCE 768,236 17,163,147 (829,408) 17,095,119 129,200 FUND BALANCE JANUARY 1 14,980,540 5,832,452 4,177,188 7,045,263 32,035,443 FUND BALANCE DECEMBER 31 $ 15,748,776 $ 22,927,571 $ 4,306,388 $ 6,215,855 $ 49,198,590 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-7 2011 Comprehensive Annual Financial Report City of Renton, Washington RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES GOVERNMENTAL ACTIVITIES For the Year Ended December 31, 2011 NET CHANGES IN FUND BALANCES -TOTAL GOVERNMENTAL FUNDS $ 17,163,147 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 is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlays exceeded depreciation expense in the current period. 5,651,389 Revenues in the statement of activities that do not provide current financial resources are not reported as revenue in the funds. 405,096 The issuance of long-term debt (e.g., bonds, leases) provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net assets. Also, governmental funds report the effect of issuance costs, premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferrec and amortized in the statement of activities. This amount is the net effect of these differences in the treatment of long-term debt and related items (16,444,986) Increase (decrease) in other non-current assets which include the Net Pension Asset and Investments in Joint Ventures which are not reported in governmental funds. 2,479,608 Internal service funds are used by management to charge the costs of certain activities to individual funds. The net revenue (expense) of the internal service funds are reported with governmental activities. 3,472,203 CHANGES IN NET ASSETS OF GOVERNMENTAL ACTIVITIES $ 12,726,457 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-8 2011 Comprehensive Annual Financial Report ASSETS Current assets: Cash & cash equivalents Investments at fair value Receivables (net of allowances): Customer accounts Special assessments Interest - investments Due from other funds Interfund loan receivable Due from other governmental units Inventory of materials and supplies Prepayments Total current assets Noncurrent assets: Special assessments deferred Advances to other funds Capital assets (net) Intangible assets (net) Deferred charges and other assets Total noncurrent assets TOTAL ASSETS STATEMENT OF NET ASSETS PROPRIETARY FUNDS December 31, 2011 Page 1 of 2 BUSINESS -TYPE ACTIVITIES ENTERPRISE FUNDS OTHER TOTAL WATERWORKS SOLID ENTERPRISE ENTERPRISE UTILITY WASTE FUNDS FUNDS City of Renton, Washington GOVERNMENTAL ACTIVITIES INTERNAL SERVICE FUNDS $ 9,207,083 $ 1,482,310 $ 1,917,477 $ 12,606,870 $ 16,891,126 5,434,445 874,928 1,131,784 7,441,157 9,969,921 5,376,766 1,563,827 100,804 7,041,397 33,425 93,298 - - 93,298 - 50,346 6,942 10,062 67,350 90,495 - 38,025 7,441 45,466 56,301 94,887 - - 94,887 - 718,624 107,838 95,976 922,438 42,117 263,073 - 59,425 322,498 - - - - - 238,400 21,238,522 4,073,870 3,322,969 28,635,361 27,321,785 121,251 - - 121,251 - 199,855 - 199,855 - 236,303,033 21,342,661 257,645,694 8,376,720 827,827 - 827,827 343,328 470,561 - 470,561 - 237,922,527 21,342,661 259,265,188 8,720,048 $ 259,161,049 $ 4,073,870 $ 24,665,630 $ 287,900,549 $ 36,041,833 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-9 2011 Comprehensive Annual Financial Report City of Renton, Washington STATEMENT OF NET ASSETS PROPRIETARY FUNDS December 31, 2011 Page 2 of 2 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-10 BUSINESS -TYPE ACTIVITIES ENTERPRISE FUNDS GOVERNMENTAL OTHER TOTAL ACTIVITIES WATERWORKS SOLID ENTERPRISE ENTERPRISE INTERNAL SERVICE UTILITY WASTE FUNDS FUNDS FUNDS LIABILITIES Current liabilities: Accounts payable $ 957,249 $ 1,061,638 $ 153,703 $ 2,172,590 $ 564,877 Claims incurred but not reported - - - - 2,442,195 Retainage payable 191,867 191,867 - Due to other funds 43,101 - 43,101 Interfund loans payable - 461,463 461,463 Due to other governments 904,289 - 904,289 Accrued interest payable 153,497 - 5,419 158,916 - Accrued employee wages and benefits payable 380,449 20,248 99,095 499,792 333,027 Accrued taxes payable 32,183 62,215 73,714 168,112 1,988 Custodial accounts 18,640 - 166,767 185,407 - Revenue bonds payable 2,115,000 - - 2,115,000 - Total current liabilities 4,796,275 1,144,101 960,161 6,900,537 3,342,087 Long-term liabilities: Revenue bonds payable 32,810,000 - - 32,810,000 - Unamortized premium on revenue bonds 541,878 541,878 Unamortized discount on revenue bonds (540,297) - (540,297) Advances from other funds - 1,349,762 1,349,762 Deferred revenue 167,920 148,358 316,278 - Accrued employee wages and benefits payable 437,625 16,166 85,039 538,830 345,239 Public works trust fund loan payable 5,538,929 - - 5,538,929 - Total long-term liabilities 38,956,055 16,166 1,583,159 40,555,380 345,239 TOTAL LIABILITIES 43,752,330 1,160,267 2,543,320 47,455,917 3,687,326 NET ASSETS Investment in capital assets, net of related debt 195,761,061 - 21,342,661 217,103,722 8,720,048 Restricted for OPEB - - - - 5,342,695 Unrestricted 19,647,658 2,913,603 779,649 23,340,910 18,291,764 TOTAL NET ASSETS $ 215,408,719 $ 2,913,603 $ 22,122,310 $ 240,444,632 $ 32,354,507 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-10 2011 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, 2011 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-11 BUSINESS -TYPE ACTIVITIES ENTERPRISE FUNDS GOVERNMENTAL OTHER TOTAL ACTIVITIES WATERWORKS SOLID ENTERPRISE ENTERPRISE INTERNAL SERVICE UTILITY WASTE FUNDS FUNDS FUNDS OPERATING REVENUES: Charges for services $ 41,557,439 $ 14,942,041 $ 4,309,366 $ 60,808,846 $ 15,378,279 Interdepartmental services 930,553 1,396 - 931,949 - Other services 565,124 72,000 - 637,124 12,750,617 TOTAL OPERATING REVENUES 43,053,116 15,015,437 4,309,366 62,377,919 28,128,896 OPERATING EXPENSES: Operations and maintenance 20,694,873 11,956,271 2,618,424 35,269,568 23,290,849 Benefit payments - 1,857 - 1,857 - Administrative and general 4,729,678 401,534 601,655 5,732,867 897,430 Taxes 3,411,418 2,074,537 12,340 5,498,295 16,363 Depreciation 6,835,480 - 840,076 7,675,556 1,887,334 TOTAL OPERATING EXPENSES 35,671,449 14,434,199 4,072,495 54,178,143 26,091,976 OPERATING INCOME (LOSS) 7,381,667 581,238 236,871 8,199,776 2,036,920 NON-OPERATING REVENUES(EXPENSES): Intergovernmental revenues 1,448,377 111,488 242,722 1,802,587 225,045 Investment earnings 93,042 9,726 14,321 117,089 126,733 Gain (loss) on sale of capital assets - - - - 16,539 Other non-operating revenues (expenses) 11,397 4,670 5,546 21,613 887,058 Interest expense (1,387,713) - (54,247) (1,441,960) - Amortization of debt discount and expense (89,653) - - (89,653) - NON-OPERATING REVENUE NET OF EXPENSE 75,450 125,884 208,342 409,676 1,255,375 INCOME (LOSS) BEFORE CONTRIBUTIONS AND TRANSFERS 7,457,117 707,122 445,213 8,609,452 3,292,295 Capital contributions 1,136,190 - - 1,136,190 - Transfers in - - 179,907 Restricted for OPEB (26,844) (1,106) (9,504) (37,454) - CHANGE IN NET ASSETS 8,566,463 706,016 435,709 9,708,188 3,472,202 NET ASSETS, JANUARY 1 207,908,749 2,207,587 21,686,601 231,802,937 28,882,305 Prior Year Adjustment (1,066,493) - - (1,066,493) - NET ASSETS, JANUARY 1 RESTATED 206,842,256 2,207,587 21,686,601 230,736,444 28,882,305 NET ASSETS, DECEMBER 31 $ 215,408,719 $ 2,913,603 $ 22,122,310 $ 240,444,632 $ 32,354,507 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-11 2011 Comprehensive Annual Financial Report CASH FLOWS FROM OPERATING ACTIVITIES: Cash received for services Cash received from other funds for services Cash paid to suppliers for goods & services Cash paid to other funds for goods & services Cash paid to employees Other operating receipts Other non-operating receipts NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers to/from other funds NET CASH PROVIDED (USED) BY NONCAPITAL FINANCING 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: Proceeds from sale of investments Payments for investments Interest on investments NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES NET INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS CASH & CASH EQUIVALENTS, JANUARY 1 TOTAL CASH & CASH EQUIVALENTS, DECEMBER 31 City of Renton, Washington STATEMENT OF CASH FLOWS PROPRIETARY FUNDS For the Year Ended December 31, 2011 Page 1 of 2 WATERWORKS UTILITY BUSINESS -TYPE ACTIVITIES ENTERPRISE FUNDS OTHER TOTAL SOLID ENTERPRISE ENTERPRISE WASTE FUNDS FUNDS GOVERNMENTAL ACTIVITIES INTERNAL SERVICE FUNDS $ 42,399,593 $ 15,028,494 $ 4,525,347 $ 61,953,434 $ - (1,025,237) (38,025) - (1,063,262) 28,103,444 (29,803,054) (13,635,918) (3,348,060) (46,787,032) (21,193,380) 1,498,295 - 1,498,295 - 32,019 (7,941) 23,813 47,891 73,409 - (589,858) 158,874 (430,984) (1,926,180) 11,397 - (35,978) (24,581) - 13,113,013 756,752 1,323,996 15,193,761 5,057,293 (26,844) (1,106) (9,504) (37,454) 179,907 (26,844) $ (1,106) (9,504) (37,454) 179,907 (7,502,674) (308,475) (7,811,149) (2,601,853) 1,448,377 1,448,377 (2,934,289) (450,196) (3,384,485) (1,344,963) (672) (1,345,635) (10,333,549) (759,343) (11,092,892) (2,601,853) 425,322 Check Figures 425,322 - - (134,211) 27,780 (106,431) 1,236,041 47,074 4,240 (6,570) 44,744 59,559 472,396 (129,971) 21,210 363,635 1,295,600 3,225,016 625,675 576,359 4,427,050 3,930,947 5,982,067 856,635 1,341,118 8,179,820 12,960,179 $ 9,207,083 $ 1,482,310 $ 1,917,477 $ 12,606,870 $ 16,891,126 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-12 2011 Comprehensive Annual Financial Report 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 to 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 Restricted for OPEB NONCASH INVESTING, CAPITAL, AND FINANCING ACTIVITIES Prior Period Adjustment Contributions of capital assets Net amort. bond prem. discount & bond issue costs Depreciation STATEMENT OF CASH FLOWS PROPRIETARY FUNDS For the Year Ended December 31, 2011 Page 2 of 2 WATERWORKS UTILITY City of Renton, Washington BUSINESS -TYPE ACTIVITIES GOVERNMENTAL ENTERPRISE FUNDS ACTIVITIES OTHER TOTAL INTERNAL SOLID ENTERPRISE ENTERPRISE SERVICE WASTE FUNDS FUNDS FUNDS $ 7,381,667 $ 581,238 $ 236,871 $ 8,199,776 $ 2,036,920 6,835,480 - 840,076 7,675,556 1,887,334 11,397 116,158 206,744 334,299 1,128,642 277,030 13,057 94,875 384,962 11,465 (1,958,998) (23,256) (83,848) (2,066,102) 857,140 3,710 (9,670) (5,960) 19,791 49,304 (91,381) (42,077) 153,946 1,501,503 - 1,501,503 - (917,820) 75,639 (14,657) (856,838) (1,091,563) - 9,597 9,597 (102,279) 111,576 9,297 - 32,019 (6,084) 23,813 49,748 53,618 5,731,346 175,514 1,087,125 6,993,985 3,020,373 $ 13,113,013 $ 756,752 $ 1,323,996 $ 15,193,761 $ 5,057,293 $ (1,066,493) $ - $ - $ (1,066,493) $ - 1,136,190 1,136,190 89,653 - 89,653 - 6,835,480 840,076 7,675,556 1,887,334 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-13 2011 Comprehensive Annual Financial Report City of Renton, Washington STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS December 31, 2011 ASSETS Cash & cash equivalents Investments at fair value: Federal National Mortgage Association US Treasury Strips Certificates of deposit Receivables (net of allowances) 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 $ 1,173,234 $ 591,487 154,634 - 4,252,115 692,497 3,048,843 - 9,321,323 591,487 $ 9,321,323 $ 7,200 584,287 591,487 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-14 2011 Comprehensive Annual Financial Report STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS FIREMEN'S PENSION FUND For the Year Ended December 31, 2011 DEDUCTIONS: Benefit payments 284,826 Administrative and general 8,762 TOTAL DEDUCTIONS 293,588 NETINCREASE(DECREASE) 831,200 NET ASSETS - JANUARY 1 8,490,123 NET ASSETS - DECEMBER 31 $ 9,321,323 City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-15 PENSION TRUST FIREMEN'S PENSION ADDITIONS: Other contributions: Fire insurance premiums transferred in $ 115,054 Investment income Investment interest 355,380 Net increase / (decrease) in the fair value of investments 654,354 TOTAL ADDITIONS 1,124,788 DEDUCTIONS: Benefit payments 284,826 Administrative and general 8,762 TOTAL DEDUCTIONS 293,588 NETINCREASE(DECREASE) 831,200 NET ASSETS - JANUARY 1 8,490,123 NET ASSETS - DECEMBER 31 $ 9,321,323 City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-15 2011 Comprehensive Annual Financial Report City of Renton, Washington NOTES TO THE FINANCIAL STATEMENTS January 1, 2011 through December 31, 2011 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 statues, 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. Effective for Fiscal Year 2011 reporting, the City implemented the following new accounting and reporting standards issued by the Governmental Accounting Standards Board (GASB): GASB Statement No. 54 — Fund Balance Reporting and Governmental Fund Types - This Statement establishes fund balance classifications that comprise a hierarchy based primarily on the extent to which a government is bound to observe constraints imposed upon the use of the resources reported in governmental funds. The statement further provides clarified definitions of the general fund, special revenue fund type, capital projects fund type, debt service fund type, and permanent fund type. /_wd4Z9]:491►[Cl401111 CA 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. Basic Financial Statements, 4-16 2011 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, public safety, physical environment, transportation, economic environment, health and human services, 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. 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. 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 Basic Financial Statements, 4-17 2011 Comprehensive Annual Financial Report City of Renton, Washington 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 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, public safety, physical environment, transportation, economic environment, health and human services, 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 following describes each fund as presented in the fund financial statements. MAJOR FUNDS CK�1�/�:T►f►�1�►11IFe1�11101*1 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, property management for City owned leased facilities, library and museum, 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 CIP FUND The Municipal Facilities Construction Fund accounts for the acquisition and development of municipal facilities. Resources include general and special revenue taxes, grants, and Council - approved general obligation bonds. Basic Financial Statements, 4-18 2011 Comprehensive Annual Financial Report City of Renton, Washington 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. ENTERPRISE FUNDS WATERWORKS UTILITY FUND 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 connection charges. SOLID WASTE FUND 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. ►[0I►G►I��� 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 one percent 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. 1% FOR ART FUND The City of Renton established this fund to account for one percent of construction project actual costs to be used for the selection, acquisition and/or installation of works of art to be placed in, on, or about City public facilities. CABLE COMMUNICATIONS DEVELOPMENT FUND The Cable Communications Development Fund accounts for funding for promotion and development of cable communications as established by City ordinance. Basic Financial Statements, 4-19 2011 Comprehensive Annual Financial Report City of Renton, Washington 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. DEBT SERVICE FUNDS GENERAL GOVERNMENTAL MISCELLANEOUS DEBT SERVICE FUND This debt service fund accounts for the following outstanding debt issues: • 2001 limited tax general obligation refunding bonds which refunded a portion of the 1997 limited tax general obligation bonds for the purchase of Renton City Hall. • 2002 limited tax general obligation bonds which provided funding for the construction of a new fire station. • 2006 limited tax general obligation bonds which provided funding for the construction of South Lake Washington infrastructure improvements. • 2009 intergovernmental debt related to the Fire District #40 asset transfer as a result of the Benson Hill annexation. • 2010 intergovernmental refunding debt which refunded a portion of the 2000 intergovernmental debt for the construction of a new facility for Valley Communications Center. • 2010 limited tax general obligation refunding bonds which refunded a portion of the 2001 limited tax general obligation bonds for the construction of a downtown parking facility. • 2011 limited tax general obligation bonds which funded the development and construction of 2 new libraries. 1997 LIMITED GO BONDS — CITY HALL This debt service fund accounts for the following outstanding debt issue: • 2011 limited tax general obligation refunding bonds which refunded a portion of the 2001 limited tax general obligation refunding bonds which refunded a portion of the 1997 limited tax general obligation bonds for the purchase of Renton City Hall. Basic Financial Statements, 4-20 2011 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 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 which provide for the design, construction, labor wages and benefits, and equipment required to implement the project. ENTERPRISE FUNDS 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. The fund 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 and auxiliary equipment, except for fire apparatus and replacement of police patrol vehicles. In addition, this fund accounts for the City's information technology, facilities and communications costs. All costs, including depreciation, are factors in calculating the rates that are charged to each user department. Basic Financial Statements, 4-21 2011 Comprehensive Annual Financial Report City of Renton, Washington 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 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. AGENCY FUND 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 governmental 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 Basic Financial Statements, 4-22 2011 Comprehensive Annual Financial Report City of Renton, Washington 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 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 313.) 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. Basic Financial Statements, 4-23 2011 Comprehensive Annual Financial Report City of Renton, Washington 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. 4. Inventories and prepaid items All City inventories are maintained on a 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. All inventories are carried at cost on the first in, first out — FIFO basis, with the exception of the Public Works Maintenance shops inventory. The value of this inventory is calculated using the average cost method. 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. Basic Financial Statements, 4-24 2011 Comprehensive Annual Financial Report City of Renton, Washington 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 Fund balances presented in the governmental fund financial statements represent the difference between assets and liabilities reported within the governmental fund. Fund Balance is classified into the following categories: Nonspendable — items that cannot be spent due to form; inventories, prepaid amounts, long- term loan receivables, or amounts that must be maintained intact legally. Restricted — amounts constrained for specific purposes imposed by external parties. Committed — amounts constrained by the City Council, either though formal budget adoption, contract approvals, or for other purposes formally approved by the Council. Assigned — all amounts remaining in governmental funds, other than the general fund, not classified as nonspendable, restricted or committed. Amounts reported as committed also include year-end encumbrances that have received approval from the City Council and re - appropriated in the following year's carry forward budget. Also, the City's financial policies require a maximum amount of 12% and minimum of 8% fund balance to remain in the general fund for cash flow purposes. Unassigned — any remaining fund balance in the general fund not classified as nonspendable, restricted, committed or assigned. 10. Net Assets (refer to Note 11). E. REVENUES, EXPENDITURES, AND EXPENSES 1. 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. Basic Financial Statements, 4-25 2011 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, public safety, physical environment, transportation, economic environment, health and human services, 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. In 2010, operating expenses were consolidated to Operations and maintenance, Administrative and general, Taxes and Depreciation. The other categories reported previously (Benefit payments, Professional services, and Insurance were assigned to Operations and maintenance and Administrative and general as appropriate. 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 on a biennial basis. 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. Basic Financial Statements, 4-26 2011 Comprehensive Annual Financial Report City of Renton, Washington 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. 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 biennial 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 three times during 2011. Original budgeted inflows as compared to the final budgeted inflows are as follows: Fund Original Budgeted Inflows Final Budgeted Inflows Increase (Decrease) Budgeted Inflows General Fund $ 94,251,824 $ 96,971,788 $ 2,719,964 Arterial Street Fund 620,000 620,000 - Hotel/Motel Tax Fund 245,000 245,000 - 1%for Art Fund 15,000 32,000 17,000 Cable Communications Development Fund 85,000 85,000 - General Government Miscellaneous Debt Service Fund 4,715,035 15,069,950 10,354,915 Community Development Impact Mitigation Fund 60,000 121,352 61,352 Fire Impact Mitigation Fund 100,000 100,000 - Transportation Impact Mitigation Fund 250,000 250,000 - Municipal Facilities CIP Fund 13,310,000 22,172,058 8,862,058 General Government Capital Improvement Fund 10,657,819 15,970,043 5,312,224 Airport Fund 3,439,418 3,865,418 426,000 Solid Waste Utility Fund 15,015,942 15,015,942 - Golf Course Fund 2,583,545 2,583,545 - Waterworks Utility Fund 44,828,741 46,660,496 1,831,755 Equipment Repair and Replacement/Information Technology/ Facilities / Communications Fund 12,438,679 12,872,709 434,030 Insurance Fund 16,662,625 17,362,625 700,000 Firemen's Pension 300,000 300,000 - TOTAL $ 219,578,628 $ 250,297,926 $ 30,719,298 Basic Financial Statements, 4-27 2011 Comprehensive Annual Financial Report City of Renton, Washington Original budgeted outflows as compared to the final budgeted outflows are as follows: Fund Original Budgeted Outflows Final Budgeted Outflows Increase (Decrease) Budgeted Outflows General Fund $ 94,833,829 $ 99,043,173 $ 4,209,344 Arterial Street Fund 620,000 620,000 - Hotel/Motel Tax Fund 245,000 450,000 205,000 1% for Art Fund 50,000 68,257 18,257 Cable Communications Development Fund 85,674 221,301 135,627 General Government Miscellaneous Debt Service Fund 4,715,035 15,179,105 10,464,070 Community Development Impact Mitigation Fund 400,000 400,000 - Fire Impact Mitigation Fund 529,056 529,056 - Transportation Impact Mitigation Fund 499,494 999,494 500,000 Municipal Facilities CIP Fund 14,962,000 19,664,999 4,702,999 General Government Capital Improvement Fund 11,647,819 19,542,542 7,894,723 South Lake Washington Infrastructure Project Fund - 58,000 58,000 Airport Fund 3,928,960 2,762,707 (1,166,253) Solid Waste Utility Fund 14,951,710 14,951,710 - Golf Course Fund 2,604,738 2,724,738 120,000 Waterworks Utility Fund 44,901,718 50,119,800 5,218,082 Equipment Repair and Replacement/ IT/ Facilities / Communications Fund 12,922,735 15,865,368 2,942,633 Insurance Fund 16,399,992 16,124,992 (275,000) Firemen's Pension 565,475 565,475 TOTAL $ 224,863,236 $ 259,890,718 $ 35,027,482 For the year 2011 and on, the City will operate and adopt a biennial budget. At year-end 2011, the City of Renton noted the Leased City Properties Fund, exceeded its final adopted budget by $119,892. For financial reporting purposes, this fund is reported within the General Fund, but is reported separately for budget purposes. 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 (last updated and approved on February 23, 2009), 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. Basic Financial Statements, 4-28 2011 Comprehensive Annual Financial Report City of Renton, Washington 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 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 fair 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, 2011, the City of Renton had the following investments: Reconcilation to Statements of Net Assets Weighted Governmental Fiduciary Average Security Type Cost Fair Value Maturity Cash Equivalents - - - Local Government Investment Pool (LGIP) $ 9,890,519 $ 9,890,519 0.00 Investments 58,082,401 1,764,721 59,847,122 Certificates of Deposit (within WPDPC) 34,960,382 34,960,382 0.89 FNMA ZERO COUPON 99,556 154,634 0.83 US TREASURY ZERO COUPON 2,406,901 4,252,115 0.01 TOTAL INVESTMENTS $ 37,466,839 $ 39,367,131 Reconcilation to Statements of Net Assets Governmental Fiduciary Total Cash $ 48,191,882 $ 1,764,721 $ 49,956,603 Restricted Cash - - - Cash Equivalents (LGIP) 9,890,519 - 9,890,519 Total Cash & Cash Equivalents 58,082,401 1,764,721 59,847,122 Investments 34,267,885 5,099,246 39,367,131 Total Investments 34,267, 885 5,099,246 39, 367,131 Total Cash & Investments $ 92,350,286 $ 6,863,967 $ 99,214,253 Credit risk. Credit Risk is the risk that on issuer or other counter party to on 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. Basic Financial Statements, 4-29 2011 Comprehensive Annual Financial Report City of Renton, Washington Certificates of Deposit are insured by the FDIC up to $250,000 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 Cash Equivalents U.S. Agencies 75% 50% Local Government Investment Pool (LGIP) $ 9,890,519 $ 9,890,519 unrated unrated Investments Certificates of Deposit (within WPDPC) 34,960,382 34,960,382 unrated unrated FNMA ZERO COUPON 99,556 154,634 N/A N/A US TREASURY ZERO COUPON 2,406,901 4,252,115 AAA AAA TOTAL INVESTMENTS $ 37,466,839 $ 39,367,131 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 held by a third -party custodian are 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: Instrument Issuer Maximum's per Policy Maximum Maximum U.S. Treasuries 100% 100% U.S. Agencies 75% 50% Certificates of Deposit (within WPDPC) 75% 20% Local Governmental Investment Pool (LGIP) 75% 75% 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 Basic Financial Statements, 4-30 2011 Comprehensive Annual Financial Report City of Renton, Washington established by the Investment Policy, which limits the weighted average maturity of the portfolio to five years. Security Type 0-6 months 6 months - 1 year 1-3 years 3+ years Totals Cash Equivalents Local Government Investment Pool $ 9,890,519 $ - $ - $ - $ 9,890,519 Investments Certificates of Deposit (within WPDPC) 14,394,108 12,950,682 5,600,192 2,015,400 34,960,382 FNMA ZERO COUPON - - - 154,634 154,634 US TREASURY ZERO COUPON - 213,023 714,032 3,325,059 4,252,115 TOTAL INVESTMENTS $ 14,394,108 $ 13,163,705 $ 6,314,224 $ 5,495,093 $ 39,367,131 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 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 $3.60 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 Basic Financial Statements, 4-31 2011 Comprehensive Annual Financial Report City of Renton, Washington 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. There is currently no excess levy for General Obligation Bond debt. The City's regular levy per the King County Assessor's 2011 Annual Report is 2.83207. NOTE S. 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.) Intangible assets, either purchased or internally developed, with a cost of $5,000 or more that are identifiable by meeting one of the following conditions: • The asset is capable of being separate or divided and sold, transferred, licensed, rented, exchanged; or • The asset arises from contractual or other legal rights, regardless of whether those rights are transferable or separable. 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. Basic Financial Statements, 4-32 2011 Comprehensive Annual Financial Report City of Renton, Washington 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. Any gain on the sale of capital assets is recorded in the Statement of Activities as General revenues, Miscellaneous. Donated capital assets are capitalized at estimated fair value of the item at the date of its donation. C. PROPRIETARY FUND CAPITAL ASSETS Capital assets of proprietary funds are capitalized in their respective statement of net assets, net of depreciation. Any gain on the sale of capital assets is recorded in the Statement of Activities as General revenues, Miscellaneous. D. DEPRECIATION AND AMORTIZATION 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 10-50 years Other improvements 10-80 years Utility plant 25-75 years Machinery and equipment 3-40 years Infrastructure 25-50 vears Amortization on all intangible assets is provided on the straight-line basis over the following useful lives: Basic Financial Statements, 4-33 Estimated Type of Asset Service Life Computer Software 3-15 years Land Use Rights 3-12 years Patents, Trademarks, Copyrights 3-50 years Other Intangibles with definite useful lives 3-12 years Basic Financial Statements, 4-33 2011 Comprehensive Annual Financial Report City of Renton, Washington Depreciation and Amortization Expense was charged to functions/programs of the primary government as follows: Governmental Activities Depreciation Amortization Total General Government $ 3,032,791 $ 158,289 $ 3,191,080 Pu b I i c Sa fety 974,972 116,690 1,091,662 Physical Environment - 48,420 48,420 Transportation 3,271,662 3,141 3,274,803 Economic Development 43,989 - 43,989 Culture and Recreation 1,367,024 5,183 1,372,207 Health and Human Services 307,204 - 307,204 Internal Service Funds (General Governmental) 1,682,660 204,674 1,887,334 Total -Governmental Activities $ 10,680,302 $ 536,397 $ 11,216,699 Business -Type Activities Waterworks $ 6,831,184 $ 4,296 $ 6,835,480 Airport 545,005 - $ 545,005 Golf Course 295,071 - $ 295,071 Total -Business -Type Activities $ 7,671,260 $ 4,296 $ 7,675,556 Basic Financial Statements, 4-34 2011 Comprehensive Annual Financial Report E. SUMMARY OF CHANGES City of Renton, Washington �apltal asset activity ror the year enciea uecemoer sl, zu11 was as icmc)ws: Primary Government Beginning Ending Balance Increases Decreases Balance Governmental activities : Capital assets, not being depreciated Land and land improvements $ 178,817,026 $ 3,600,055 $ - $ 182,417,081 Construction in progress 24,808,053 9,636,900 1,641,293 32,803,660 Total capital assets, not being depreciated 203,625,079 13,236,955 1,641,293 215,220,741 Capital assets, being depreciated: Buildings and structures 95,451,455 348,796 - 95,800,251 Other improvements 198,430,013 3,647,391 17,623 202,077,404 Machinery and equipment 30,853,045 2,050,822 959,840 31,944,027 Total capital assets being depreciated 324,734,513 6,047,009 959,840 329,821,682 Less accumulated depreciation for: Buildings and structures 28,595,039 2,546,285 - 31,141,324 Other improvements 53,395,444 5,925,038 - 59,320,482 Machinery and equipment 21,072,573 2,208,979 849,633 22,431,919 Total accumulated depreciation 103,063,056 10,680,302 849,633 112,893,725 Total capital assets, being depreciated, net 221,671,457 (4,633,293) 110,207 216,927,957 Intangible Assets: Intangible assets, not being amortized - - - - Intangible assets, being amortized 4,886,199 50,143 4,936,342 Less accumulated amortization 3,752,356 536,397 4,288,753 Total intangible asset, being amortized, net 1,133,843 (486,254) 647,589 Total Intangible assets 1,133,843 (486,254) - 647,589 Governmental activities capital assets, net $ 426,430,379 $ 8,117,408 $ 1,751,500 $ 432,796,287 Business -type Activities: Capital assets, not being depreciated Land and land improvements $ 6,165,321 $ - $ - $ 6,165,321 Construction in progress 8,018,628 5,376,621 4,403,151 8,992,098 Total capital assets, not being depreciated 14,183,949 5,376,621 4,403,151 15,157,419 Capital assets, being depreciated: Buildings and structures 17,195,908 - - 17,195,908 Other improvements 328,155,384 6,756,296 17,623 334,894,058 Machinery and equipment 6,057,628 151,080 - 6,208,708 Total capital assets being depreciated 351,408,920 6,907,376 17,623 358,298,674 Less accumulated depreciation for: Buildings and structures 5,553,700 449,215 - 6,002,915 Other improvements 97,130,023 7,126,867 17,623 104,239,267 Machinery and equipment 5,473,038 95,178 - 5,568,215 Total accumulated depreciation 108,156,760 7,671,260 17,623 115,810,397 Total capital assets, being depreciated, net 243,252,160 (763,884) - 242,488,276 Intangible Assets: Intangible assets, not being amortized 811,000 811,000 Intangible assets, being amortized 70,088 - 70,088 Less accumulated amortization 48,965 4,296 53,261 Total intangible asset, being amortized, net 21,123 (4,296) 16,827 Total Intangible assets 832,123 (4,296) - 827,827 Business -type capital assets, net $ 258,268,232 $ 4,608,441 $ 4,403,151 $ 258,473,522 Basic Financial Statements, 4-35 2011 Comprehensive Annual Financial Report City of Renton, Washington At the end of 2011, a total of 47 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 as of December 31, 2011, are as follows: Governmental Activities Projects Construction in progress Remaining Commitment BENSON HILL CONDUIT PROJECT $ 109,937 $ - CITY ATTORNEY'S OFFICE FURNITURE/EQUIP 75,000 25,000 DOWNTOWN LIBRARY 648,343 - ENERGOV PERMIT SOFTWARE AND IMPLEMENTATION 222,531 309,617 EVSE CHARGING STATIONS 53,931 - FREIGHTLINER CAMERA VANS 366,138 - GARDEN AVE N WIDENING 342,148 25,013 GOLF COURSE FIBER 5,753 - HIGHLANDS LIBRARY 70,796 - HIGHLANDS TO LANDING 150,260 198 MAY CREEK/HAWKS LANDING 330,932 NE 31ST ST CULVERT 10,997 3,053,505 NE 3RD/NE 4TH CORRIDOR 498,340 - PAPERLESS IMAGING SYSTEM 71,930 - RAINIER AV GRDY WY TO 2ND 23,457,401 389,935 RAINIER AVE PUBLIC ART WORK 2,000 48,000 RECORDS MGMTSYSTEM-LASERFICHE CITYWIDE 7,829 - STRANDER BLVD - SW 27TH ST CONNECT 6,291,907 95,178 TELECOMMUNICATIONS NETWORK MITEL 40,950 352,616 TIFFANY CASCADE CONNECTOR 4,298 - WALKWAY PROGRAM 14,358 WELLS AVE & GRADY TO TALBOT FIBER OPTIC CABLE 27,881 Total governmental activities $ 32,803,660 $ 1,245,359 Business -Type Activities Projects 196 ZONE RESERVOIR & PUMP STATION AUTOMATIC METER READING CONVERSION CASCADE INTERCEPTOR EAST RENTON LIFT STATION ELIMINATION ELLIOT SPAWNING CHANNEL 06 FEMA REPAIR EMERGENCY POWER TO PUMP STATION EMERGENCY RESPONSE PROJ GROUND WATER UNDER INFLUENCE CT HARDIE AVE UNDERPASS STORM SYSTEM IMPROVEMENT LAKE AVE S - RAINIER AVE S STORM IMPROVEMENTS LIBERTY HIGH LIFT STATION LK WA BLVD -HAWKS LAND WATER IMPROVEMENTS LK WA BLV -HAWKS LAND STORM SYSTEM IMPROVEMENTS LK WASH BEACH LS ELIM/REHAB MAPLEWOOD EQUIPMENT ACCESS & H2S MITIGATION PRESIDENT PARK SEWER REPLACEMENT RAINIER AVE S ROAD & UTILITIES IMPROVEMENT RENTON GATEWAY UTILITIES STEEL/AC WATERMAIN REPLC PLAN STONEGATE/SUMMERWIND REPLACEMENT SURFACE WATER SYSTEM REHAB TAXIWAY BRAVO REHAB THUNDER HILLS SURFACE WATER DRAINGE WATER QUALITY MONITORING WESTVIEW LIFTSTATION REHAB Total business -type activities 223,362 10,896 42 3, 446 2,191,494 236,745 80,581 281,020 7,774 158,591 5,196 138,005 - 7,997 11,924 - 171,146 131,083 1,244,595 238,263 100 - 283,309 - 842,337 14,369 591,040 - 1,283 - 468,616 10,420 198 - 290,799 9,148 - 3,053,505 100,162 1,840 - 198,251 32,915 39,222 - 48,235 48,971 267,384 8,815 $ 8,992,098 Basic Financial Statements, 4-36 2011 Comprehensive Annual Financial Report City of Renton, Washington 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, P.O. 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 Statements No. 27, Accounting for Pensions by State and Local Government Employers and No. 50, Pension Disclosures, an Amendment of GASB Statements No. 25 and No. 27. 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. 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 Basic Financial Statements, 4-37 2011 Comprehensive Annual Financial Report City of Renton, Washington 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. Notwithstanding, PERS Plan 2 and Plan 3 members may opt out of plan membership if terminally ill, with less than five years to live. 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. PERS Plan 1 members are vested after the completion of 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 two percent of the average final compensation (AFC) per year of service, capped at 60 percent. (The AFC is based on the greatest compensation during any 24 eligible consecutive compensation months.) Plan 1 members who retire 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 that provides an automatic annual adjustment based on the Consumer Price Index. To offset the cost of this annual adjustment, the benefit is reduced. PERS 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 with an allowance of two percent of the AFC per year of service. (The AFC is based on the greatest compensation during any eligible consecutive 60 -month period.) Plan 2 members who retire prior to the age of 65 receive reduced benefits. If retirement is at 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 a cost -of -living allowance is granted (based on the Consumer Price Index), capped at three percent annually. PERS 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 AFC per year of service. (The AFC is based on the greatest compensation during any 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. Plan 3 members who retire 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 Basic Financial Statements, 4-38 2011 Comprehensive Annual Financial Report City of Renton, Washington 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 were given the choice to participate in the Judicial Benefit Program (JBM). Justices and 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% multiplier. The benefit would be capped at 75% of AFC. Judges in PERS Plan 3 can elect a 1.6% of pay per year of service benefit, capped at 37.5% 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, be subject to the benefit cap of 75% of AFC, pay higher contributions, stop contributing 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. Newly elected or appointed justices and judges who chose to become PERS members on or after January 1, 2007, or who have not previously opted into PERS membership, were required to participate in the JBM Program. Members required into the JBM program would: return to prior PERS Plan if membership had 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 JRA; and not have the option to increase the multiplier for past judicial service. Membership in PERS consisted of the following as of the latest actuarial valuation date for the plans of June 30, 2010: Retirees and beneficiaries receiving benefits 76,899 Terminated plan members entitled to but notyet receiving benefits 28,860 Active plan members vested 105,521 Active plan members non -vested 51,005 Tota 1 262,285 Basic Financial Statements, 4-39 2011 Comprehensive Annual Financial Report City of Renton, Washington Following is a summary of the number of government employers participating in PERS as of June 30, 2010. Number of Participating Employers Tota 1 489 227 634 976 2,326 Funding Policy 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 six 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. As a result of the implementation of the Judicial Benefit Multiplier Program in January 2007, a second tier of employer and employee rates was developed to fund, along with investment earnings, the increased retirement benefits of those justices and judges that participate in the program. 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, 2011, were as follows: Members not participating in JBM: Contributor PERS Plan 1 PERS Plan 2 PERS Plan 3 Employer* 7.25% 7.25% 7.25% Employee 6.00% 4.64% *** * The employer rates include the employer administrative expense fee currently set at 0.16%. ** Plan 3 defined benefit portion only. *** Variable from 5% to 15% based on rate selected bythe member. Basic Financial Statements, 4-40 State School Counties/ Other Pol itica I Total Plan Agencies Districts Municipalities Subdivisions Members PERS 1 144 227 158 180 709 PERS 2 179 - 271 494 944 PERS 3 166 205 302 673 Tota 1 489 227 634 976 2,326 Funding Policy 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 six 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. As a result of the implementation of the Judicial Benefit Multiplier Program in January 2007, a second tier of employer and employee rates was developed to fund, along with investment earnings, the increased retirement benefits of those justices and judges that participate in the program. 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, 2011, were as follows: Members not participating in JBM: Contributor PERS Plan 1 PERS Plan 2 PERS Plan 3 Employer* 7.25% 7.25% 7.25% Employee 6.00% 4.64% *** * The employer rates include the employer administrative expense fee currently set at 0.16%. ** Plan 3 defined benefit portion only. *** Variable from 5% to 15% based on rate selected bythe member. Basic Financial Statements, 4-40 2011 Comprehensive Annual Financial Report Members participating in JBM: City of Renton, Washington Contributor PERS Plan 1 PERS Plan 2 PERS Plan 3 Employer -State Agency* 9.75% 9.75% 9.75%** Employer -Local Govt.* 7.25% 7.25% 7.25%** Employee -State Agency 9.76% 9.10% 7.50%*** Emplovee-Locat Govt. 12.26% 11.60% 7.50%*** * The employer rates include the employer administrative expense fee currently set at 0.16%. ** 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 2011 $ 44,457 $ 1,496,892 $ 261,528 2010 47,133 1,318,045 225,748 2009 71,860 1,826,401 312,631 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, firefighters and as of July 24, 2005, those emergency medical technicians who were given the option and chose LEOFF Plan 2 membership. LEOFF membership is comprised primarily of non -state employees, with the Department of Fish and Wildlife enforcement officers, who were first included prospectively effective July 27, 2003, being an exception. Effective July 1, 2003, the LEOFF Plan 2 Retirement Board was established by Initiative 790 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 benefit 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. LEOFF 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 (FAS) is as follows: Basic Financial Statements, 4-41 2011 Comprehensive Annual Financial Report City of Renton, Washington 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 FAS is the basic monthly salary received at the time of retirement, provided a member has held the same position or rank for 12 months preceding the date of retirement. Otherwise, it is the average of the highest consecutive 24 months' salary within the last ten years of service. A cost -of -living allowance is granted (indexed to the Consumer Price Index). LEOFF Plan 2 members 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 FAS per year of service. The FAS is based on the highest consecutive 60 months. Plan 2 members who retire prior to age 53 receive reduced benefits. Benefits 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 service credit; and a cost -of -living allowance is granted (indexed to the Consumer Price Index), capped at three percent annually. Membership in LEOFF consisted of the following as of the latest actuarial valuation date for the plans of June 30, 2010: Retirees and beneficiaries receiving benefits 9,647 Terminated plan members entitled to but notyet receiving benefits 782 Active plan members vested 13,420 Active plan members non -vested 3,656 Tota 1 27,505 Following is a summary of the number of government employers participating in LEOFF as of June 30, 2010. Number of Participating Employers State School Counties/ Other Political Total Plan Agencies Districts Municipalities Subdivisions Members LEOFF 1 - 48 14 62 LEOFF 2 8 214 152 374 Total 8 262 166 436 Funding Policy Starting on July 1, 2000, LEOFF 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. LEOFF 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, by means of a special funding arrangement, appropriated money from the state General Fund to Basic Financial Statements, 4-42 2011 Comprehensive Annual Financial Report City of Renton, Washington supplement the current service liability and fund the prior service cost of LEOFF 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, 2011, were as follows: Contributor LEOFF Plan 1 LEOFF Plan 2 Employer* 0.16% 5.24% Employee 0.00% 8.46% * The employer rates include the employer admin- istrative expense fee currently set at 0.16%. Both the City and the employees made the required contributions. The City's required contributions for years ended December 31, were as follows: Year LEOFF Plan 1 LEOFF Plan 2 2011 $ 494 $ 1,334,049 2010 394 1,278,378 2009 487 1,258,217 Public Safety Employee's Retirement System (PSERS) Plan 2 Plan Description PSERS is a cost-sharing multiple -employer retirement system comprised of a single defined benefit plan, PSERS Plan 2. PSERS was created by the 2004 legislature and became effective July 1, 2006. 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 least 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 Basic Financial Statements, 4-43 2011 Comprehensive Annual Financial Report City of Renton, Washington • have primary responsibility to ensure the custody and security of incarcerated or probationary individuals; or • function as a limited authority Washington peace officer, as defined in RCW 10.93.020; or • have primary responsibility to supervise eligible members who meet the above criteria. PSERS 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 statue and may be amended only by the State Legislature. PSERS Plan 2 members are vested after the completion of five years of eligible service. Plan 2 members may retire at the age of 65 with five years of service, or at the age of 60 with at least ten years of PSERS service credit, with an allowance of two percent of the average final compensation (AFC) per year of service. The AFC 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 who retire prior to the age of 60 receive reduced benefits. If retirement is at age 53 or older with at least 20 years of service, a three percent per year reduction for each year between the age at retirement and age 60 applies. There is no cap on years of service credit; and a cost -of -living allowance is granted (based on the Consumer Price Index), capped at three percent annually. Membership is PSERS consisted of the following as of the latest actuarial valuation date for the plan of June 30, 2010: Retirees and beneficiaries receiving benefits 7 Terminated plan members entitled to but notyet receiving benefits - Active plan members vested - Active plan members non -vested 4,210 Total 4,217 Following is a summary of the number of government employers participating in PSERS as of June 30, 2010. Number of Participating Employers State School Counties/ Other Political Total Plan Agencies Districts Municipalities Subdivisions Members PSERS 11 65 1 77 Funding Policy Each biennium, the state Pension Funding Council adopts PSERS 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. Basic Financial Statements, 4-44 2011 Comprehensive Annual Financial Report City of Renton, Washington The required contribution rates expressed as a percentage of current year covered payroll, as of December 31, 2011 were as follows: Contributor PSERS Plan 2 Employer* 8.86% Employee 6.36% * The employer rates include the employer administrative expense fee currently set at 0.16%. 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 2011 $ 21,518 2010 64,909 2009 73,255 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, 2011, there were 34 members in the System: Retirees and beneficiaries receiving benefits 31 Retirees and beneficiaries currently receiving full retirement through LEOFF 3 Active plan members vested - Active plan members non -vested - Total 34 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 pension obligations. Costs of administering the Firefighter's Pension Plan are paid by the Plan. For 2011, this cost was $8,762. An actuarial valuation is done every two years and was completed as of January 1, 2011. The Actuarial Valuation of Firefighters' Pension Fund table is reported in the Required Supplemental Basic Financial Statements, 4-45 2011 Comprehensive Annual Financial Report City of Renton, Washington Information section, and a recap of the Schedule of Funding Progress for the last five valuations is as follows: (rounded to thousands) Valuation Unfunded Actuarial UAAL as a Date Actuarial Value Actuarial Accrued Accrued Liabilities Funded Covered Percentage of January of Assets Liabilities (UAAL) Ratio Payroll Covered Payroll 2001 $ 7,067 $ 6,780 $ (287) 104% $ n/a 2003 9,189 6,472 (2,717) 142% n/a 2005 7,777 6,254 (1,523) * 124% n/a 2007 7,847 6,364 (1,483) 123% n/a 2009 8,941 6,517 (2,424) 137% n/a 2011 8,940 3,914 (4,576) 217% n/a * A$29 decrease in the actuarial accrued liabilities was made afterthe City's financial reportwas published and before the valuation was released. Significant actuarial assumptions used in the January 1, 2011, valuation include: Valuation date: January 1, 2011 Actuarial cost method: entry age normal Amortization method: 30 -year, closed as of January 1, 2000 Remaining amortization period: 20 years Asset valuation method: fair value Actuarial assumptions: 1) investment rate of return — 4%; 2) projected salary increases — 3.75%; 3) inflation — 2.75%; 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, 2011, assuming the UAAL is amortized over a closed 30 -year period beginning January 1, 2000. Basic Financial Statements, 4-46 2011 Comprehensive Annual Financial Report City of Renton, Washington Fiscal Year Ending 12/31/2009 12/31/2010 12/31/2011 Annual required contribution (ARC) ARCatEOY Interest on NPO ARC Adjustment Annual Pension Cost Total Employer Contributions Change in NPO I Annual Normal Cost Beginning of Year $ - $ - $ [6=4-5] 2 Amortization of UAAL Beginning of Year $ (113,541) (166,142) (44,035) (166,142) $ 59,068 (335,034) 3. Interest to End of Year* (109,968) (6,646) (54,591) (6,646) 59,777 (13,401) 4 ARC at End of Year [1+2+3] $ (172,788) $ (172,788) $ (348,435) 5. Intereston Net Pension Obligation $ (43,291) $ (51,780) $ (61,382) 6 Adjustment to ARC (172,788) (74,178) (91,589) (91,589) 107,068 (112,345) 7. Annual pension cost (APC) [4+5-6] (348,435) (141,901) (112,345) (132,979) 102,354 (297,472) 8. Employer Contributions** NPO 70,327 Amort. 107,068 Ending 102,354 9. Change in Net Pension Obligation [7-8] Balance (212,228) Factor** (240,047) Balance (399,826) 1D Net Pension Obligation at Beginning of Year $ (1,082,280) $ (1,294,508) $ (1,534,555) 11. Net Pension Obligation at End of Year [9+10] $ (1,294,508) $ (1,534,555) $ (1,934,381) * Assumed interest rate: 4.0% in 2009, 4.0% in 2010, and 4.0% in 2011. ** Employer contributions for pensions 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 Ending ARCatEOY Interest on NPO ARC Adjustment Annual Pension Cost Total Employer Contributions Change in NPO Obligation (NPO) [1] [2] [3=pyr7/9] [4=1+2-3] [5] [6=4-5] 12/31/2006 $ (113,541) $ (33,604) (44,035) $ (103,110) $ 59,068 $ (162,178) 12/31/2007 (109,968) (38,658) (54,591) (94,035) 59,777 (153,812) 12/31/2008 (109,968) (46,349) (67,070) (89,247) 66,055 (155,302) 12/31/2009 (172,788) (43,291) (74,178) (141,901) 70,327 (212,228) 12/31/2010 (172,788) (51,780) (91,589) (132,979) 107,068 (240,047) 12/31/2011 (348,435) (61,382) (112,345) (297,472) 102,354 (399,826) Fiscal Year NPO Amort. Amort. Of Ending Ending Balance (Gain)/Loss Factor** (Gain)/Loss Balance [7=6+pryr7] [8=1-5] [9] [10=pyrll/9] [11=7] 12/31/2006 $ (773,166) $ (172,609) 13.87500 $ (44,035) $ (773,166) 12/31/2007 (926,978) (169,745) 14.16300 (54,591) (926,978) 12/31/2008 (1,082,280) (176,023) 13.82120 (67,069) (1,082,280) 12/31/2009 (1,294,508) (243,115) 14.59030 (74,178) (1,294,508) 12/31/2010 (1,534,555) (279,856) 14.13390 (91,589) (1,534,555) 12/31/2011 (1,934,381) (450,789) 13.65930 (112,345) (1,934,381) Three year trend information is recapped as follows: Basic Financial Statements, 4-47 Annual Contribution as a Net Pension Fiscal Year Ending Pension Cost (APC) Percentage of APC Obligation (NPO) December31,2009 $ (141,901) N/A $ (1,294,508) December 31, 2010 (132,979) N/A (1,534,555) December 31, 2011 (297,472) N/A (1,934,381) Basic Financial Statements, 4-47 2011 Comprehensive Annual Financial Report City of Renton, Washington Employees are not required to make contributions. The contributions to the System for 2011 include $115,054 from fire insurance premiums and $355,380 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 2011, $280,888 was paid for benefit payments and $3,938 for medical payments. The Net Pension Obligation decreased $399,826 to ($1,934,381) and is included as a non- current asset, in the City of Renton's Governmental -wide Statement of Net Assets. NOTE 7. OTHER POST EMPLOYMENT BENEFITS Plan Description In accordance with the Revised Code of Washington (RCW) 41.26, the City provides lifetime medical care for members of the Law Enforcement Officers and Firefighters (LEOFF) retirement system hired prior to October 1, 1977. The plan is a closed, single -employer defined benefit healthcare plan administered by the City. Under authorization of the LEOFF Disability Board, direct payment is made for other retiree medical expenses not covered by standard benefit plan provisions. Financial reporting for the LEOFF retiree healthcare plan is included in the City's Comprehensive Annual Financial Report. The plan does not issue stand-alone financial statements. An actuarial valuation financial report is prepared by Nicolay Consulting, and may be obtained by contacting the City of Renton, Finance Division, 1055 South Grady Way, Renton, WA 98057. As of December 31, 2011, there were 96 retirees and 3 active employees. Funding Policy Funding for LEOFF retiree healthcare costs is provided entirely by the City as required by RCW. The City's funding policy is based upon pay-as-you-go financing requirements. The plan member is not required to contribute to the cost of the plan. Annual OPEB Cost and Net OPEB Obligation The City's annual other postemployment benefit (OPEB) cost is calculated based on the annual required contribution (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover the normal cost each year and to amortize any unfunded actuarial liabilities over a period not to exceed thirty years. The following table shows the components of the City's annual OPEB cost for the year, the amount actually contributed to the plan, and changes in the City's net OPEB obligation. Basic Financial Statements, 4-48 2011 Comprehensive Annual Financial Report City of Renton, Washington Fiscal Year Ending 12/31/2009 12/31/2010 12/31/2011 Annual required contribution (ARC) Annual Normal Cost (BOY) $ 20,000 $ 54,262 $ 54,262 Amortization of UAAL (BOY)* 1,903,621 1,679,491 1,704,544 Interest to End of Year - ARC at end of year $ 1,923,621 $ 1,733,753 $ 1,758,806 Interest on Net OPEB Obligation $ 24,311 $ 62,627 $ 78,799 Adjustment to ARC (35,785) (93,961) (120,635) Annual OPEB cost 1,912,147 1,702,419 1,716,970 Employer Contributions (1,104,351) (983,868) (875,699) Change in NetOPEB Obligation 807,796 718,551 841,271 Net OPEB Obligation at BOY $ 757,876 $ 1,565,672 $ 2,284,223 Net OPEB Obligation at EOY $ 1,565,672 $ 2,284,223 $ 3,125,494 * Unfunded Actuarial Accrued Liability (UAAL) The Net OPEB Obligation of $3,125,494 is included as a noncurrent liability on the City of Renton's Governmental -wide Statement of Net Assets. The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for 2011 and the two preceding years were as follows: Funded Status and Funding Progress As of January 1, 2011, the most recent actuarial valuation date, the plan was 0% funded. The accrued liability for benefits was $27,835,211 and the actuarial value of the assets was $0 resulting in an unfunded actuarial accrued liability (UAAL) of $27,835,211. The covered payroll was $434,132, and the ratio of the UAAL to the covered payroll was 6411.70 percent. Net assets of $5,342,695 restricted in the Insurance Fund for the purpose of funding a portion of the UAAL. Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. Basic Financial Statements, 4-49 Percentage of Annual Employer OPEB Cost Net OPEB Year OPEB Cost Contribution Contributed Obligation 2009 $ 1,912,147 $ 1,104,351 57.75% $ 1,565,672 2010 1,702,419 983,868 57.79% 2,284,223 2011 1,716,970 875,699 51.00% 3,125,494 Funded Status and Funding Progress As of January 1, 2011, the most recent actuarial valuation date, the plan was 0% funded. The accrued liability for benefits was $27,835,211 and the actuarial value of the assets was $0 resulting in an unfunded actuarial accrued liability (UAAL) of $27,835,211. The covered payroll was $434,132, and the ratio of the UAAL to the covered payroll was 6411.70 percent. Net assets of $5,342,695 restricted in the Insurance Fund for the purpose of funding a portion of the UAAL. Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. Basic Financial Statements, 4-49 2011 Comprehensive Annual Financial Report City of Renton, Washington The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multi-year trend information that shows whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial liabilities for benefits. Actuarial Methods and Assumptions Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities, consistent with the long-term perspective of the calculations. The January 1, 2011 actuarial valuation report was prepared using the projected unit credit method. The actuarial assumptions used included a 4.00% discount rate, which is based upon the long-term investment yield on the investments that are expected to be used to finance the payment of benefits. The following health care trend rate assumptions were used: Expected Annual Increase in Health Care Cost The UAAL is being amortized based on a level dollar amortization over a closed 30 year -period that began in 2008 at the assumed discount rate. NOTE 8. CONTINGENCIES Litigation 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. Basic Financial Statements, 4-50 Medicare Nursing Dental and Year Medical Part B Home Vision 2012 7.6% 7.6% 4.0% 2.0% 2013 7.3% 7.3% 4.0% 2.0% 2014 7.0% 7.0% 4.0% 2.0% 2015 6.7% 6.7% 4.0% 2.0% 2016 6.4% 6.4% 4.0% 2.0% 2017 6.1% 6.1% 4.0% 2.0% 2018 5.8% 5.8% 4.0% 2.0% 2019+ 5.5% 5.5% 4.0% 2.0% The UAAL is being amortized based on a level dollar amortization over a closed 30 year -period that began in 2008 at the assumed discount rate. NOTE 8. CONTINGENCIES Litigation 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. Basic Financial Statements, 4-50 2011 Comprehensive Annual Financial Report City of Renton, Washington Bond Indentures The City is in compliance with all significant bond indentures and restrictions. Leases The City also leases office facilities for the City Attorney's office. Total cost for this lease was $90,000 for the year ended December 31, 2010. The lease term ends December 31, 2011. The City has extended the lease for one (1) additional year. The future minimum lease payments for 2012 are $90,000. 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: Basic Financial Statements, 4-51 2011 Comprehensive Annual Financial Report City of Renton, Washington Airport liability — Expires Risk $100,000,000 Ace Property & 1/01/2012 Retention Casualty Type of Coverage Occurrence Aggregate Amount Carrier Property— Expires $25,000 $500,000,000 (per WA Cities Ins 01/01/2012 $350,000 occurrence subject to Authority Expires 1/01/2012 annual aggregate & Excess Employee health — $175,000 sub -limits) Symetra Liability— Expires $250,000 $20,000,000 WA Cities Ins 01/01/2012 (per occurrence) Authority Auto Liability— Expires ACV or Replacement WA Cities Ins 01/01/2012 $25,000 Cost; per Occurrence Authority Public Officials (E&0) — $250,000 $15,000,000 WA Cities Ins Expires 01/01/2012 Authority Equipment breakdown — $5,000* $50,000,000 Zurich Expires 1/01/2012 Crime — Expires 12/31/2012 $10,000 $2,500,000 National Union Fire Airport liability — Expires 0 $100,000,000 Ace Property & 1/01/2012 Casualty Underground storage tank— $25,000 $2,000,000 Colony Insurance Expires 1/01/2012 Co. Excess Worker's comp — $350,000 $1,000,000 Safety National Expires 1/01/2012 Excess Employee health — $175,000 N/A Symetra Expires 1/01/2013 * There is a 4 -hour utility interruption clause, prior to the deductible becoming applicable For policy term January 1, 2012 to January 1, 2013, there were no reductions in insurance coverage and an increase in premiums; however, 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 150 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 $4 million per occurrence self insured layer, and $16 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 $20 million per Basic Financial Statements, 4-52 2011 Comprehensive Annual Financial Report City of Renton, Washington 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 insurance. 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, 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. 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, 2011, the City had accrued the following amounts for outstanding claims: Total Claims Payable Coverage 12/31/2011 Property &liability $ 641,640 Worker's compensation 613,655 Employee health 1,186,900 TOTAL $ 2,442,195 Basic Financial Statements, 4-53 2011 Comprehensive Annual Financial Report City of Renton, Washington 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 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. Basic Financial Statements, 4-54 Property & Worker's Employee 2011 Liability Compensation Health Totals IBNR claims at beginning of the year $ 697,531 $ 696,880 $ 1,899,079 $ 3,293,490 Currentyearand changes in estimates 1,375,182 664,764 8,961,050 11,000,996 Claims payments (1,431,073) (747,989) (9,673,229) (11,852,291) IBNR claims at end of the year $ 641,640 $ 613,655 $ 1,186,900 $ 2,442,195 Property & Worker's Employee 2010 Liability Compensation Health Totals I BNR cl a i ms at begi n ni ng of the yea r $ 332,713 $ 830,652 $ 1,835,494 $ 2,998,859 Currentyearand changes in estimates 1,961,920 738,167 10,166,174 12,866,261 Claims payments (1,597,102) (871,939) (10,102,589) (12,571,630) IBNR claims at end of the year $ 697,531 $ 696,880 $ 1,899,079 $ 3,293,490 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 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. Basic Financial Statements, 4-54 2011 Comprehensive Annual Financial Report City of Renton, Washington The following is a recap of interfund balances for 2011 at the fund level for the purpose of reclassifying revenue/expenditures between funds: At the government wide level, the following interfund balances occurred for the purpose of reclassifying revenue/expenditures between activities: Fund Due From Other Funds Due From General Fund Due To Fund Transportation Mitigation Fund Other Funds - Other Funds General Fund $ 44,063 $ 73,545 General Debt Service Fund I $ 12,515 - - Tranportation Impact Fund $ 747 $ - Municipal Facilities Fund 10,822 1,019 Capital Improvement Fund - 39,735 Subtotal Governmental Funds $ 55,631 $ 114,298 Ai rp o rt I $ 7,441 $ - Solid Waste I $ 38,025 $ - Waterworks Utility Fund - 43,100 Subtotal Enterprise Funds $ 45,466 $ 43,100 Information Technology 17,500 - Facilities 38,801 Subtotal Internal Service Funds $ 56,301 $ - TOTAL $ 157,398 $ 157,398 At the government wide level, the following interfund balances occurred for the purpose of reclassifying revenue/expenditures between activities: Fund Due From Other Funds Due To Other Funds General Fund $ 4,328 $ 7,441 Transportation Mitigation Fund 747 - Airport 7,441 $ Waterworks Utility Fund - 5,075 TOTAL I $ 12,515 $ 12,515 The following is a recap of interfund loans for 2011 at the fund level for capital improvement purposes: Basic Financial Statements, 4-55 Interfund Loans Interfund Loans Fund Receivable Payable General Fund $ 2,216,483 $ - Capital Improvement Fund - 700,000 Subtotal Governmental Funds $ 2,216,483 $ 700,000 Golf Course - 1,516,483 Airport - 294,742 Waterworks Utility Fund 294,742 - Subtotal Enterprise Funds I $ 294,742 $ 1,811,225 TOTAL I $ 2,511,225 $ 2,511,225 Basic Financial Statements, 4-55 2011 Comprehensive Annual Financial Report City of Renton, Washington At the government wide level, only one interfund loan occurred for capital improvement: The following is a recap of interfund transfers for 2011 at the fund level: Interfund Loans Interfund Loans Fund Receivable Payable General Fund $ 1,516,483 $ - Golf Course - 1,516,483 TOTAL I $ 1,516,483 $ 1,516,483 The following is a recap of interfund transfers for 2011 at the fund level: Basic Financial Statements, 4-56 Tranfers Transfers Fund In Out General Fund $ 15,420 $ 2,268,329 Arterial Street Fund - 620,000 One PerfcentforArt Fund - - General Debt Service Fund 529,056 Community Services Impact Mitigation Fund 61,352 - Fire Impact Mitigation Fund - 529,056 Transportation Impact Mitigation Fund - 650,000 Municipal Facilities Fund 2,010,822 76,772 Capital Improvement Fund 1,270,000 - Subtotal Governmental Funds $ 3,886,650 $ 4,144,157 Airport - 8,848 Golf Course 656 Solid Waste 1,106 Waterworks Utility Fund 26,844 Subtotal Enterprise Funds $ - $ 37,454 Equipment Rental 23,526 - Information Technology 119,122 - Facilities 37,782 523 Subtotal Internal Service Funds $ 180,430 $ 523 Firemen's Pension Trust Fund 115,054 - TOTAL $ 4,182,134 $ 4,182,134 Basic Financial Statements, 4-56 2011 Comprehensive Annual Financial Report At the government wide level, the following transfers occurred: City of Renton, Washington Fund Tranfers In Transfers Out Airport $ $ 8,848 Golf Course Judicial Public Safety Debt service OPEB liability 656 Solid Waste Recreation 1,106 Waterworks Utility Fund $ 31,600 $ 577,252 $ 1,327,666 $ - $ 26,844 Equipment Rental 23,526 - Information Services 13,928 - TOTAL $ 37,454 $ 37,454 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 net 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 net assets first, as appropriated opportunities arise, but reserve the right to selectively defer the use thereof to a future project or replacement equipment acquisition. Restricted governmental activity net assets are as follows: Unrestricted net assets represent unrestricted liquid assets. Unrestricted Governmental Activities have committed and assigned designations that reflect the City Council and management's plans and commitments to expend resources for certain purposes in future periods. Funds with committed designations reflect amounts constrained by the City Council, either through formal budget adoption or other purposes formally approved by the Basic Financial Statements, 4-57 Purpose Culture and Fund Judicial Public Safety Debt service OPEB liability Totals Recreation General $ 31,600 $ 577,252 $ 1,327,666 $ - $ $ 1,936,518 General Debt - - - 1,032,361 1,032,361 Municipal Facilities 18,120,553 - 18,120,553 Insurance - - 5,342,695 5,342,695 Total Restricted Net Assets - $ 31,600 $ 577,252 $ 19,448,219 $ 1,032,361 $ 5,342,695 $ 26,432,126 Governmental Actvil Unrestricted net assets represent unrestricted liquid assets. Unrestricted Governmental Activities have committed and assigned designations that reflect the City Council and management's plans and commitments to expend resources for certain purposes in future periods. Funds with committed designations reflect amounts constrained by the City Council, either through formal budget adoption or other purposes formally approved by the Basic Financial Statements, 4-57 2011 Comprehensive Annual Financial Report City of Renton, Washington Council. Amounts with assigned designations reflect all amounts remaining in governmental funds, other than the general fund, not classified as nonspendable, restricted or committed. Assigned amounts also include year-end encumbrances that have received approval from the City Council and re -appropriated in the following year's carry forward budget. The City's financial policies require a maximum amount of 12% and minimum of 8% fund balance to remain in the general fund for cash flow purposes. Unrestricted governmental net assets are classified as follows: NOTE 12. PRIOR PERIOD ADJUSTMENTS Business -Type Activities A prior period adjustment of $1,066,493 was made to reduce revenue and receivable balances for Special Assessment District principal. This amount is for outstanding principal not due to the City until the effected property owners take action to connect to the wastewater system. In prior years this outstanding amount was recorded as a revenue and receivable. NOTE 13. LONGTERM DEBT The City of Renton's long-term debt consists of General Obligation Debt, repaid mainly from general governmental revenue sources, Proprietary Debt, repaid from proprietary revenues and compensated absences/other post employment benefits. 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. Compensated absences and other post employment benefits are generally liquidated mainly from the general fund and to a lesser extent, the internal service funds. Basic Financial Statements, 4-58 General Fund Municipal Facilities Fund Capital Improvement Fund Other Governmental Funds Total Committed Capital $ - $ 3,081,070 $ 3,194,726 $ 1,007,024 $ 7,282,820 Assigned Public Safety 702,811 - - - 702,811 Transportation 1,505,808 254,974 1,760,782 Economic Environment 1,819,380 663,558 2,482,938 Culture and Recreation 133,857 212,470 346,327 General Government 9,650,402 - - 99,030 9,749,432 Capital - 1,725,948 1,111,662 2,946,436 1 5,784,046 Total Unrestricted Net Assets - Governmental Activities $ 13,812,258 $ 4,807,018 $ 4,306,388 $ 5,183,492 $ 28,109,156 NOTE 12. PRIOR PERIOD ADJUSTMENTS Business -Type Activities A prior period adjustment of $1,066,493 was made to reduce revenue and receivable balances for Special Assessment District principal. This amount is for outstanding principal not due to the City until the effected property owners take action to connect to the wastewater system. In prior years this outstanding amount was recorded as a revenue and receivable. NOTE 13. LONGTERM DEBT The City of Renton's long-term debt consists of General Obligation Debt, repaid mainly from general governmental revenue sources, Proprietary Debt, repaid from proprietary revenues and compensated absences/other post employment benefits. 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. Compensated absences and other post employment benefits are generally liquidated mainly from the general fund and to a lesser extent, the internal service funds. Basic Financial Statements, 4-58 2011 Comprehensive Annual Financial Report Outstanding debt issues as of December 31, 2011 are as follows: City of Renton, Washington Basic Financial Statements, 4-59 Issued Maturity Original Issued Type of Debt Interest Rates Date Date Amount GOVERNMENTAL DEBT: General Obligation Bonds: Limited: 2002 GO Bonds 2.50%-5.00% 07/15/2002 12/01/2022 $ 3,895,000 2006 GO Bonds 4.25%-5.00% 08/08/2006 12/01/2028 17,980,000 2010 GO Refunding Bonds 3.00%-4.50% 05/11/2010 12/01/2021 6,170,000 2011 GO Library Bonds 2.00%-5.00% 08/02/2011 12/01/2022 16,715,000 2011 GO Refunding Bonds 2.00%-5.00% 09/21/2011 12/01/2017 9,425,000 SUBTOTAL LIMITED GO 54,185,000 Other Miscellaneous debt - Intergovernmental, Backed by full faith and credit of the City: 2009 FD 40 Loan for acquisition of FS13 3.75% 03/01/2009 09/01/2028 6,798,085 2009 (A) SCORE Tax Exempt 4.00%-5.00% 11/04/2009 01/01/2022 2,953,800 2009 (13) SCORE GABS 3.00%-6.62% 11/04/2009 01/01/2039 28,090,800 2010 GO Valley Comm Refunding Bonds 3.00%-4.00% 04/05/2010 12/01/2015 1,065,000 SUBTOTAL MISCELLANEOUS 38,907,685 TOTAL GOVERNMENTAL -TYPE DEBT ISSUANCE 93,092,685 BUSINESS -TYPE DEBT: Revenue Bonds: 1998 Water/Sewer Refunding 4.46% 03/01/1998 06/01/2013 6,120,000 1999 Golf System Refunding 4.96% 04/01/1999 12/01/2015 5,040,000 2002 Water/Sewer 4.80% 07/01/2002 12/01/2022 11,980,000 2003 Water/Sewer Refunding 3.20% 09/15/2003 06/01/2013 8,035,000 2004 Water/Sewer 4.33% 11/01/2004 12/01/2027 10,335,000 2007 Water/Sewer 4.00%-5.00% 11/06/2007 12/01/2022 1,430,000 2007 Water/Sewer Refunding 4.00%-5.00% 11/06/2007 12/01/2022 8,320,000 2008 Water/Sewer Revenue (a) 4.17% 01/04/2008 12/01/2027 9,975,000 2008 Water/Sewer Revenue (b) 4.17% 01/04/2008 12/01/2016 2,035,000 TOTAL REVENUE BONDS 63,270,000 Public Works Trust Fund Loans: Sierra Heights Sewer Improvements 2.00% 01/20/1992 07/01/2012 888,462 Central Renton Sewer Replacement 1.00% 05/04/1993 07/01/2015 1,631,800 East Renton Interceptor 1.00% 06/07/1993 07/01/2013 2,542,704 Dayton Avenue NE 2.00% 05/12/1994 07/01/2014 96,958 NE 27th/Aberdeen Drainage Improvements 1.00% 05/15/1995 07/01/2015 731,000 East Kennydale Interceptor 2.00% 01/24/1998 07/01/2016 2,093,740 Honeycreek Interceptor 2.00% 12/04/1995 07/01/2016 1,840,568 Corrosion Control Treatment Facilities 1.00% 01/06/1997 07/01/2017 1,106,000 Maplewood Water Treatment Improvement 0.50% 01/22/2002 07/01/2021 567,831 Construct CT Pipeline fo r W e l l s 0.50% 11/05/2002 07/01/2022 814,527 Maplewood Water Treatment Improvement 0.50% 06/03/2004 07/01/2024 5,150,000 TOTAL PUBLIC WORKS TRUST FUND LOANS 17,463,590 TOTAL BUSINESS -TYPE DEBT ISSUANCE 80,733,590 TOTAL AMOUNT ISSUED ON OUTSTANDING DEBT AS OF DECEMBER 31, 2011 $ 173,826,275 Basic Financial Statements, 4-59 2011 Comprehensive Annual Financial Report Outstanding debt additions and retirements are summarized as follows: City of Renton, Washington Basic Financial Statements, 4-60 Beginning Balance Ending Balance Due Within One General Governmental Debt 01/01/2011 Additions Deductions 12/31/2011 Year Limited General Obligation Debt 2001 GO Refunding Bonds $ 11,350,000 $ $11,350,000 $ - $ - 2002 GO Bonds 2,690,000 175,000 2,515,000 200,000 2006 GO Bonds 16,355,000 585,000 15,770,000 610,000 2010 GO Refunding Bonds 6,030,000 5,000 6,025,000 5,000 2011 GO Library Bonds - 16,715,000 - 16,715,000 1,375,000 2011 GO Refunding Bonds - 9,425,000 160,000 9,265,000 1,450,000 Unamortized (discount)/premium 565,612 2,268,169 130,374 2,703,407 - Total Limited GO Bonds 36,990,612 28,408,169 12,405,374 52,993,407 3,640,000 Other Miscellaneous debt - Intergovernmental, Backed with full faith and credit of the City 2009 FD 40 Loan for acquisition of FS13 6,423,275 - 262,236 6,161,039 271,517 2009 (A) SCORE Tax Exempt 2,953,800 - 2,953,800 - 2009 (B) SCORE BABS 28,090,800 - 28,090,800 - 2010GOVaIley Comm. Refunding Bonds 1,044,000 196,000 848,000 201,000 Total Miscellaneous 38,511,875 - 458,236 38,053,639 472,517 Total General Obligation Debt 75,502,487 28,408,169 12,863,610 91,047,046 4,112,517 Other: Employee Leave Benefits (Comp. Absences) 5,248,382 3,020,502 2,991,578 5,277,306 3,008,064 Other post -employment benefits payable 2,284,223 1,716,970 875,699 3,125,494 - Total Governmental Debt $ 83,035,092 $ 33,145,640 $16,730,887 $ 99,449,846 $ 7,120,581 Basic Financial Statements, 4-60 2011 Comprehensive Annual Financial Report City of Renton, Washington Outstanding debt additions and retirements are summarized as follows (continued): DEEP DISCOUNT DEBT As of December 31, 2011, the City of Renton has no deep discount debt outstanding. SPECIAL ASSESSMENT DEBT WITH GOVERNMENTAL COMMITMENT As of December 31, 2011, 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 Basic Financial Statements, 4-61 Beginning Balance Ending Balance Due Within One Business -Type Debt 01/01/2011 Additions Deductions 12/31/2011 Year Revenue Bonds: 1998 Water/Sewer Refunding $ 1,695,000 $ $ 650,000 $ 1,045,000 $ 685,000 1999 Golf System Refunding - - - - 2002 Water/Sewer Bond 2,035,000 1,010,000 1,025,000 1,025,000 2003 Water/Sewer Refunding 1,160,000 355,000 805,000 390,000 2004 Water/Sewer Bond 10,335,000 - 10,335,000 - 2007 Water/Sewer Bond 1,430,000 - 1,430,000 - 2007 Water/Sewer Bond (02) 8,290,000 15,000 8,275,000 15,000 2008 Water/Sewer Bond (a) 9,975,000 - 9,975,000 - 2008 Water/Sewer Bond (b) 2,035,000 2,035,000 Unamortized (discount)/premium (35,361) (36,942) 1,581 - Total Revenue Bonds 36,919,639 - 1,993,058 34,926,581 2,115,000 Public Works Trust Fund Loans: Sierra Heights Sewer Improvements 51,286 25,642 25,643 25,641 Central Renton Sewer Replacement 366,487 87,483 279,003 87,483 East Renton Interceptor 403,710 134,570 269,140 134,570 Dayton Avenue NE 20,412 5,103 15,309 5,103 NE 27th/Aberdeen Drainage Improvement 212,949 42,590 170,359 42,590 East Kennydale Interceptor 701,127 116,855 584,273 116,855 Honeycreek Interceptor 581,232 96,872 484,360 96,872 Corrosion Control Treatment Facilities 345,498 49,357 296,141 49,357 Maplewood Water Improvement 333,310 30,301 303,009 30,301 Const. CF Pipeline for Wells 514,438 42,870 471,568 42,870 Maplewood Water Improvements 3,817,059 272,647 3,544,412 272,647 Total Public Work Trust Fund Loan 7,347,508 904,290 6,443,218 904,289 Other: Golf Course Cart Operating Lease 10,058 - 10,058 - - Employee Leave Benefits (Comp.Absences) 663,488 184,527 148,351 699,664 160,834 Total Business -Type Debt 44,940,693 184,527 3,055,757 42,069,463 3,180,123 GRAND TOTALS $ 127,975,785 $ 33,330,168 $19,786,644 $141,519,309 $ 10,300,704 DEEP DISCOUNT DEBT As of December 31, 2011, the City of Renton has no deep discount debt outstanding. SPECIAL ASSESSMENT DEBT WITH GOVERNMENTAL COMMITMENT As of December 31, 2011, 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 Basic Financial Statements, 4-61 2011 Comprehensive Annual Financial Report City of Renton, Washington 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. ARBITRAGE The City engages an outside agency to calculate its' arbitrage rebate liability on outstanding tax- exempt bonds and certificates of participation under Section 148(f) of the Internal Revenue Code. No additional rebate was found due for any revenue or general obligation bonds for 2011. ISSUED/REFUNDED DEBT On August 2, 2011, the City issued $16,715,000 in Limited Tax General Obligation (LTGO) Bonds with an average interest rate of 3.72%. The proceeds were used to finance all or a portion of the costs of acquiring land for and constructing, improving, and equipping two new public library facilities and repairing, renovating and improving existing library facilities; providing the form and terms of the bond. On September 21, 2011, the City issued $9,425,000 in Limited Tax General Obligation Refunding Bonds with an average interest rate of 3% to advance refund $9,950,000 of outstanding 2001 Limited Tax General Obligation Bonds. The net proceeds were used to purchase U.S. government securities which were deposited with an escrow agent to provide for all future debt service payments on the refunded bonds. As a result, these bonds are considered defeased. The advance refunding resulted in a reduction in the aggregate debt service payments of $1,402,171 and a present value gain of $1,348,396. On May 30, 2011, the City issued $700,000 in an interfund loan (from General Fund to Capital Improvement Fund) with an average interest rate of 2.25% to help finance a portion of the remaining costs for the Southwest 27th Street/Strander Boulevard Connection Project. The interfund loan will be fully repaid on May 30, 2016. In prior years the City defeased certain bond issues by placing the proceeds of new bonds in an irrevocable trust to provide for all future debt service payments on the old bonds. Accordingly, the trust account assets and the liability for the defeased bonds are not included in the City's financial statements. The schedules of assets, liabilities, and net assets of the City's escrow accounts as of December 31, 2011 are provided in the following table. Basic Financial Statements, 4-62 US Bank Corporate Trust (2007 Revenue Bonds) Assets Cash with Trustee $ 1 Investments with Trustee 8,242,817 Estimated Interest Receivable 322,440 Total Assets 8,565,258 Liabilities Refunded Bonds Payable 8,119,795 Total Liabilities 8,119,795 Net Assets Earnings with Trustee 445,463 Total Net Assets $ 445,463 Basic Financial Statements, 4-62 2011 Comprehensive Annual Financial Report City of Renton, Washington ANNUAL DEBT SERVICE REQUIREMENTS The annual debt service requirements to maturity, including principal and interest, for long- term debt as of December 31, 2011, are as follows: AMOUNT AVAILABLE FOR DEBT SERVICE Fund balances that have been reserved for debt repayment are $1,032,361 in the general governmental funds. OPERATING LEASES The City has Golf Course Operating Lease agreement for the amount of $87,800 and dated June 2007. This lease is for the purchase of 50 Club Car Golf Carts. The lease qualifies as an operating lease for accounting purposes because the individual cost of each golf cart is below the City's capitalization threshold of $5,000. Payments are made monthly at an interest rate of 5.25%. The debt service for this lease is accounted for in the Municipal Golf Course System Fund (404). As of December 31, 2011, the City made its final payment and has a remaining balance of zero dollars. NOTE 14 - DEFERRED CHARGES IN PROPRIETARY FUNDS As of December 31, 2011, the total amount of deferred charges and other assets reported in the proprietary funds is $470,561. 100% of this amount is reported in the Waterworks Utility Fund and is for debt issuance costs related to the 2002-2008 Revenue Bonds. This amount will be fully amortized by 2027. NOTE 15. 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 2010. Basic Financial Statements, 4-63 Governmental Activities Business -Type Activities Year Principal Interest Principal Interest 2012 4,112,517 4,214,761 3,019,290 1,577,350 2013 4,921,839 4,078,365 2,488,648 1,485,133 2014 5,052,130 3,928,189 2,368,612 1,423,451 2015 5,215,625 3,749,749 2,433,509 1,346,396 2016 5,173,616 3,571,540 2,418,901 1,264,617 2017-2021 27,692,975 14,431,874 12,113,446 4,978,838 2022-2026 13,747,800 9,001,741 13,610,811 2,526,161 2027-2031 9,533,736 5,530,857 2,915,000 137,665 2032-2036 7,543,800 3,059,430 - - 2037+ 5,349,600 540,898 - - Totals 88,343,639 52,107,404 41,368,217 14,739,611 AMOUNT AVAILABLE FOR DEBT SERVICE Fund balances that have been reserved for debt repayment are $1,032,361 in the general governmental funds. OPERATING LEASES The City has Golf Course Operating Lease agreement for the amount of $87,800 and dated June 2007. This lease is for the purchase of 50 Club Car Golf Carts. The lease qualifies as an operating lease for accounting purposes because the individual cost of each golf cart is below the City's capitalization threshold of $5,000. Payments are made monthly at an interest rate of 5.25%. The debt service for this lease is accounted for in the Municipal Golf Course System Fund (404). As of December 31, 2011, the City made its final payment and has a remaining balance of zero dollars. NOTE 14 - DEFERRED CHARGES IN PROPRIETARY FUNDS As of December 31, 2011, the total amount of deferred charges and other assets reported in the proprietary funds is $470,561. 100% of this amount is reported in the Waterworks Utility Fund and is for debt issuance costs related to the 2002-2008 Revenue Bonds. This amount will be fully amortized by 2027. NOTE 15. 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 2010. Basic Financial Statements, 4-63 2011 Comprehensive Annual Financial Report NOTE 16. JOINT VENTURES City of Renton, Washington 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 two joint ventures. VALLEY COMMUNICATIONS CENTER The Valley Communications Center (Valley Comm) 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 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 financial information as of December 31, 2011 related to Valley Comm: Completed Financial Statements for Valley Comm can be obtained from the Valley Communications Center, 23807 — 98th Avenue South, Kent, WA 98031. Basic Financial Statements, 4-64 Valley Communications Center 2011 Owner Cities Equity Allocation Member City Percent of Equity 2010 Equity Balance 2011 Distribution 2011 Equity Balance Auburn 19.43% $ 4,575,538 $ 148,189 $ 4,723,727 Federal Way 22.00% 3,090,648 167,760 3,258,408 Kent 27.57% 6,841,893 210,199 7,052,092 Renton 21.39% 4,833,671 163,082 4,996,753 Tukwila 9.61% 2,739,460 73,257 2,812,717 Grand Totals 100.00% $ 22,081,210 $ 762,487 $ 22,843,697 Completed Financial Statements for Valley Comm can be obtained from the Valley Communications Center, 23807 — 98th Avenue South, Kent, WA 98031. Basic Financial Statements, 4-64 2011 Comprehensive Annual Financial Report City of Renton, Washington SOUTH CORRECTIONAL ENTITY (SCORE) The South Correctional Entity (SCORE) consolidated correctional facility was established February 25, 2009, when an Interlocal Agreement (the "Original Interlocal Agreement") was entered into by seven participating municipal governments, the "Member Cities" of Auburn, Burien, Des Moines, Federal Way, Renton, SeaTac and Tukwila, under the authority of the "Interlocal Cooperation Act" (RCW 39.34). This "Original Interlocal Agreement" was amended and restated October 1, 2009 and named the City of Des Moines as the "Host City" and the remaining Member Cities as "Owner Cities". This interlocal agreement is known as the "Formation Interlocal Agreement". Pursuant to a separate "Host City Agreement" dated October 1, 2009, the Host City will not enjoy the same equity position as the Owner Cities until all debts issued are paid and the Host City fulfills all of its obligations as outlined in the Agreement. SCORE, an governmental administrative agency pursuant to RCW 39.34.030 (3), has the power to acquire, construct, own, operate, maintain, equip, and improve a correctional facility known as the "SCORE Facility" and to provide correctional services and functions incidental thereto, for the purpose of detaining arrestees and sentenced offenders in the furtherance of public safety and emergencies within the jurisdiction of the Member Cities. The SCORE Facility may serve the Member Cities and Subscribing Agencies which are in need of correctional facilities. Any agreement with a Subscribing Agency shall be in writing and approved by SCORE as provided within the SCORE Formation Interlocal Agreement. Financing for the acquisition, construction, equipping, and improvement of the SCORE Facility will be provided by bonds issued by the South Correctional Entity Facility Public Development Authority (the "SCORE PDA"), a public development authority chartered by the City of Renton pursuant to RCW 35.21.730 through 35.21.755 and secured by the full faith and credit of the Cities of Auburn, Burien Federal Way, Renton, SeaTac, and Tukwila (the "Owner Cities"). The SCORE PDA issued $86 million in special obligation bonds in 2009 to carry out the facility development project. The following is a summary of the debt service requirements for the bond issue: Basic Financial Statements, 4-65 Summa of Debt Service Requirements Debt Service Schedule Debt Service Allocation to Owner Cities 3S%BABs Auburn Burien Federal Way Renton SeaTac Tukwila Year Principal Interest Subsidy Total 31% 4% 18% 36% 3% 8% 2012 $ - $ 5,155,732 $ (1,675,089) $ 3,480,643 $ 1,078,999 $ 139,226 $ 626,516 $ 1,253,031 $ 104,419 $ 278,451 2013 1,915,000 5,126,998 (1,675,089) 5,366,909 1,663,742 214,676 966,044 1,932,087 161,007 429,353 2014 1,950,000 5,066,566 (1,6S4,975) 5,361,591 1,662,093 214,464 965,086 1,930,173 160,848 428,927 2015 1,990,000 4,995,069 (1,632,787) 5,352,282 1,659,207 214,091 963,411 1,926,822 160,568 428,183 2016 2,065,000 4,911,886 (1,632,787) 5,344,099 1,656,671 213,764 961,938 1,923,876 160,323 427,528 2017-2021 11,545,000 22,986,907 (7,869,713) 26,662,194 8,265,280 1,066,488 4,799,195 9,598,390 799,866 2,132,975 2022-2026 13,945,000 19,S86,127 (6,994,733) 26,S36,394 8,226,282 1,061,456 4,776,551 9,553,102 796,092 2,122,912 2027-2031 17,010,000 14,723,464 (5,346,730) 26,386,735 8,179,888 1,055,469 4,749,612 9,499,224 791,602 2,110,939 2032-2036 20,955,000 8,498,417 (3,217,063) 26,236,354 8,133,270 1,049,454 4,722,544 9,445,088 787,091 2,098,908 2037-2039 14,860,000 1,502,494 (697,922) 15,664,572 4,856,017 626,583 2,819,623 5,639,246 469,937 1,253,166 Totals $ 86,235,000 $ 92,553,660 $ 32,396,888 $ 146,391,772 $ 4S,381,449 $ 5,855,671 $ 26,3S0,520 $ S2,701,038 $ 4,391,753 $ 11,711,343 Note: Interest is to be paid from bond proceeds durin the construction period 2010-2011 Basic Financial Statements, 4-65 2011 Comprehensive Annual Financial Report City of Renton, Washington 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 financial information as of December 31, 2011 related to SCORE: Completed financial statements for SCORE and SCORE PDA can be obtained from the SCORE office, City of Renton, 1055 South Grady Way, Renton, WA 98057. NOTE 17. SUBSEQUENT EVENTS There were no significant subsequent events that occurred after the end of the reporting period and before the issuance of the financial statements. Basic Financial Statements, 4-66 South Correctional Entity (SCORE) 2011 Owner Cities Equity Allocation Member City Percent of Equity 2010 Euit Balance 2011 Distribution 2011 Euit Balance Auburn 31.00% $ 1,601,588 $ 1,587,732 $ 3,189,320 Bu ri e n 4.00% 206,656 204,869 411,525 Federal Way 18.00% 929,954 921,909 1,851,863 Renton 36.00% 1,859,910 1,843,818 3,703,728 Se a Ta c 3.00% 154,992 153,651 308,643 Tukwila 8.00% 413,313 409,737 823,050 Grand Totals 100.00% $ 5,166,413 $ 5,121,716 $ 10,288,129 Completed financial statements for SCORE and SCORE PDA can be obtained from the SCORE office, City of Renton, 1055 South Grady Way, Renton, WA 98057. NOTE 17. SUBSEQUENT EVENTS There were no significant subsequent events that occurred after the end of the reporting period and before the issuance of the financial statements. Basic Financial Statements, 4-66 2011 Comprehensive Annual Financial Report City of Renton, Washington REQUIRED SUPPLEMENTARY INFORMATON SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET TO ACTUAL - GENERAL FUND For the Year Ended December 31, 2011 OTHER FINANCING SOURCES (USES) Transfer in BUDGETED AMOUNTS 15,420 15,420 - ORIGINAL FINAL ACTUAL VARIANCE REVENUES Sale of capital assets 500 Taxes $ 71,057,275 $ 71,138,351 $ 71,443,862 $ 305,511 Licenses and permits 2,642,987 2,400,645 2,665,983 265,338 Intergovernmental revenues 8,901,802 11,558,406 10,534,331 (1,024,075) Charges for services 3,912,697 3,934,697 3,860,290 (74,407) Fines and forfeits 3,168,351 3,168,351 3,150,326 (18,025) Interfund revenues 3,314,653 3,673,171 3,057,642 (615,529) Contributions 100,000 168,875 192,699 23,824 Interest 477,730 237,543 366,332 128,789 Miscellaneous revenues 676,329 676,329 646,868 (29,461) TOTAL REVENUES 94,251,824 96,956,368 95,918,333 (1,038,035) EXPENDITURES Current: General government 10,228,422 11,129,091 10,598,389 (530,702) Judicial 2,466,177 2,495,676 2,563,989 68,313 Public safety 52,110,671 53,388,852 52,986,589 (402,263) Physical environment 2,453,387 2,435,235 2,048,971 (386,264) Transportation 8,282,944 8,250,976 8,018,267 (232,709) Economic environment 5,977,163 7,198,248 5,876,231 (1,322,017) Health and human services 528,610 539,236 511,934 (27,302) Culture and recreation 10,510,896 10,572,271 10,215,229 (357,042) Capital outlay 267,559 89,882 78,089 (11,793) Debt service: Principal payment - 700,000 - (700,000) TOTAL EXPENDITURES 92,825,829 96,799,467 92,897,688 (3,901,779) EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES 1,425,995 156,901 3,020,645 2,863,744 OTHER FINANCING SOURCES (USES) Transfer in 15,420 15,420 - Transfer (out) (2,008,000) (2,243,707) (2,268,329) 24,622 Sale of capital assets 500 500 TOTAL OTHER FINANCE SOURCES (USES) (2,008,000) (2,228,287) (2,252,409) 25,122 NET CHANGE IN FUND BALANCE (582,005) (2,071,386) 768,236 2,888,866 FUND BALANCE JANUARY 1 10,895,379 14,980,540 - (14,980,540) Prior Priod Adjustment - - 14,980,540 14,980,540 FUND BALANCES JANUARY 1 RESTATED $ 10,895,379 $ 14,980,540 $ 14,980,540 $ - FUND BALANCE DECEMBER 31 $ 10,313,374 $ 12,909,154 $ 15,748,776 $ 2,839,622 NOTE TO THE REQUIRED SUPPLEMENTARY INFORMATION NOTE 1: Budget and actual information is presented on a GAAP basis of accounting. Required Supplementary Information, 5-1 2011 Comprehensive Annual Financial Report FISCAL YEAR ENDING December 31, 2006 December 31, 2007 December 31, 2008 December 31, 2009 December 31, 2010 December 31, 2011 City of Renton, Washington REQUIRED SUPPLEMENTARY INFORMATION ACTUARIAL VALUATION OF FIREFIGHTERS' PENSION FUND EMPLOYER CONTRIBUTIONS December 31, 2011 ANNUAL FIRE TOTAL REQUIRED EMPLOYER INSURANCE EMPLOYER CONTRIBUTION CONTRIBUTIONS* PREMIUMS CONTRIBUTIONS (ARC) $ (18,753) $ 77,821 $ 59,068 $ (113,541) (25,285) 85,062 59,777 (109,968) (19,894) 85,949 66,055 (109,968) (36,296) 106,623 70,327 (172,788) (5,618) 112,686 107,068 (172,788) (12,700) 115,054 102,354 (348,435) PERCENTAGE OF ARC CONTRIBUTED N/A N/A N/A N/A N/A 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. Required Supplementary Information, 5-2 2011 Comprehensive Annual Financial Report REQUIRED SUPPLEMENTARY INFORMATION LEOFF 1 RETIREE MEDICAL BENEFITS SCHEDULE OF FUNDING PROGRESS December 31, 2011 ACTUARIAL ACTUARIAL VALUE OF ACCRUED VALUATION DATE ASSETS LIABILITIES January 1, 2009 $ 32,331,107 Januray 1, 2010 27,985,358 Januray 1, 2011 27,835,211 City of Renton, Washington UNFUNDED UAAL AS A ACTUARIAL PERCENTAGE ACCRUED FUNDED COVERED OF COVERED LIABILITIES RATIO PAYROLL PAYROLL 32,331,107 0% $ 411,952 7848.27% 27,985,358 0% 414,264 6755.45% 27,835,211 0% 434,132 6411.70% Required Supplementary Information, 5-3 2011 Comprehensive Annual Financial Report This page intentionally left blank. City of Renton, Washington Required Supplementary Information, 5-4 2011 Comprehensive Annual Financial Report Non -Major Governmental Funds Special Revenue Funds ARTERIAL STREET FUND City of Renton, Washington 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. 1% FOR ART FUND The City of Renton established this fund to account for one percent of construction project actual costs to be used for the selection, acquisition and/or installation of works of art to be placed in, on, or about City public facilities. CABLE COMMUNICATIONS DEVELOPMENT FUND The Cable Communications Development Fund accounts for funding for promotion and development of cable communications as established by City ordinance. 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. Combining Statements & Schedules, 6-1 2011 Comprehensive Annual Financial Report Debt Service Funds GENERAL GOVERNMENTAL MISCELLANEOUS DEBT SERVICE FUND This debt service fund accounts for the following outstanding debt issues: City of Renton, Washington • 2001 limited tax general obligation refunding bonds which refunded a portion of the 1997 limited tax general obligation bonds for the purchase of Renton City Hall. • 2002 limited tax general obligation bonds which provided funding for the construction of a new fire station. • 2006 limited tax general obligation bonds which provided funding for the construction of South Lake Washington infrastructure improvements. • 2009 intergovernmental debt related to the Fire District #40 asset transfer as a result of the Benson Hill annexation. • 2010 intergovernmental refunding debt which refunded a portion of the 2000 intergovernmental debt for the construction of a new facility for Valley Communications Center. • 2010 limited tax general obligation refunding bonds which refunded a portion of the 2001 limited tax general obligation bonds for the construction of a downtown parking facility. • 2011 limited tax general obligation bonds which funded the development and construction of 2 new libraries. 1997 LIMITED GO BONDS — CITY HALL This debt service fund accounts for the following outstanding debt issue: • 2011 limited tax general obligation refunding bonds which refunded a portion of the 2001 limited tax general obligation refunding bonds which refunded a portion of the 1997 limited tax general obligation bonds for the purchase of Renton City Hall. Combining Statements & Schedules, 6-2 2011 Comprehensive Annual Financial Report Capital Project Funds COMMUNITY DEVELOPMENT IMPACT MITIGATION FUND City of Renton, Washington 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. 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 which provide for the design, construction, labor wages and benefits, and equipment required to implement the project. Combining Statements & Schedules, 6-3 2011 Comprehensive Annual Financial Report Non -Major Proprietary Funds Enterprise Funds AIRPORT FUND City of Renton, Washington The 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. The fund 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. In addition, this fund accounts for the City's information technology, facilities and communications costs. All 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 2011 Comprehensive Annual Financial Report ASSETS Cash & cash equivalents Investments Customer accounts Interfund loans receivable Due from other governmental units TOTAL ASSETS LIABILITIES AND FUND BALANCES Liabilities Accounts payable Retainage payable Total liabilities Fund balances Committed Assigned Total fund balances TOTAL LIABILITIES AND FUND BALANCES City of Renton, Washington COMBINING BALANCE SHEET OTHER GOVERNMENTAL FUNDS December 31, 2011 Page 1 of 6 SPECIAL REVENUE FUNDS ARTERIAL HOTEL/ PATHS & STREET MOTEL TAX TRAILS $ 99,099 $ 152,628 $ 2,077 58,493 90,088 1,226 1,382 841 12 - 175,000 - 254,974 99,030 3,315 254,974 274,030 3,315 $ 254,974 $ 274,030 $ 3,315 Combining Statements & Schedules, 6-5 2011 Comprehensive Annual Financial Report City of Renton, Washington COMBINING BALANCE SHEET OTHER GOVERNMENTAL FUNDS December 31, 2011 Page 2 of 6 SPECIAL REVENUE FUNDS 1% FOR CABLE COMM. SPRINGBROOK TOTAL ART & DEVELOPMENT WETLANDS SRF ASSETS Cash & cash equivalents $ 76,554 $ 136,075 $ 415,814 $ 882,247 Investments 45,186 80,318 245,433 520,744 Customer accounts - 1,500 - 1,500 Interfund loans receivable 447 728 2,311 5,721 Due from other governmental units - - - 126,473 TOTAL ASSETS 122,187 218,621 663,558 1,536,685 LIABILITIES AND FUND BALANCES Liabilities Accounts payable $ $ 31,151 $ $ 31,151 Retainage payable 500 - 500 Total liabilities 500 31,151 31,651 Fund balances Committed - 100,000 275,000 Assigned 121,687 87,470 663,558 1,230,034 Total fund balances 121,687 187,470 663,558 1,505,034 TOTAL LIABILITIES AND FUND BALANCES $ 122,187 $ 218,621 $ 663,558 $ 1,536,685 Combining Statements & Schedules, 6-6 2011 Comprehensive Annual Financial Report COMBINING BALANCE SHEET OTHER GOVERNMENTAL FUNDS December 31, 2011 Page 3 of 6 ASSETS Cash & cash equivalents Investments Receivables (net of allowances): Special assessments Due from other governmental units TOTAL ASSETS LIABILITIES AND FUND BALANCES Liabilities Accounts payable Deferred revenue Total liabilities Fund balances Nonspendable Restricted Committed Assigned Unassigned Total fund balances TOTAL LIABILITIES AND FUND BALANCES City of Renton, Washington GENERAL TOTAL nrQT hCC $ 647,210 $ 647,210 382,013 382,013 8,076 8,076 1,953,223 1,953,223 2,990,522 2,990,522 $ 5,454 $ 5,454 1,952,708 1,952,708 1,958,162 1,958,162 1,032,360 1,032,360 1,U3/-,3OU L,U.7L,30U $ 2,990,522 $ 2,990,522 Combining Statements & Schedules, 6-7 2011 Comprehensive Annual Financial Report City of Renton, Washington COMBINING BALANCE SHEET OTHER GOVERNMENTAL FUNDS December 31, 2011 Page 4 of 6 C.D. IMPACT FIRE IMPACT TRANS. IMPACT SO LK WA INFRA - MITIGATION MITIGATION MITIGATION STRUCTURE ASSETS Cash & cash equivalents $ 924,548 $ 934,599 $ 410,756 $ 33,076 Investments 545,711 551,644 242,447 19,523 Receivables (net of allowances): Accrued interest & penalty - - 19,279 - Interfund loans receivable 4,796 6,435 3,986 193 Due from other governmental units - - 747 - TOTAL ASSETS 1,475,055 1,492,678 677,215 52,792 LIABILITIES AND FUND BALANCES Liabilities Deferred revenue $ - $ - $ 19,279 $ - Total liabilities 19,279 Fund balances Restricted - - - Committed 400,000 - 280,000 52,024 Assigned 1,075,055 1,492,678 377,936 768 Unassigned - - - - Total fund balances 1,475,055 1,492,678 657,936 52,792 TOTAL LIABILITIES AND FUND BALANCES $ 1,475,055 $ 1,492,678 $ 677,215 $ 52,792 Combining Statements & Schedules, 6-8 2011 Comprehensive Annual Financial Report City of Renton, Washington COMBINING BALANCE SHEET OTHER GOVERNMENTAL FUNDS December 31, 2011 Page 5 of 6 ASSETS Cash & cash equivalents Investments Receivables (net of allowances): Accrued interest & penalty Interfund loans receivable Due from other governmental units TOTAL ASSETS LIABILITIES AND FUND BALANCES Liabilities Deferred revenue Total liabilities Fund balances Restricted Committed Assigned Unassigned Total fund balances TOTAL LIABILITIES AND FUND BALANCES TOTAL CPF $ 2,302,979 1,359,325 19,279 15,410 747 3,697,740 $ 19,279 19,279 732,024 2,946,437 3,678,461 $ 3,697,740 Combining Statements & Schedules, 6-9 2011 Comprehensive Annual Financial Report City of Renton, Washington COMBINING BALANCE SHEET OTHER GOVERNMENTAL FUNDS December 31, 2011 Page 6 of 6 Combining Statements & Schedules, 6-10 TOTAL OTHER TOTAL TOTAL TOTAL GOVERNMENTAL SRF DSF CPF FUNDS ASSETS Cash & cash equivalents $ 882,247 $ 647,210 $ 2,302,979 $ 3,832,436 Investments 520,744 382,013 1,359,325 2,262,082 Receivables (net of allowances): Customer accounts 1,500 - - 1,500 Accrued interest & penalty - - 19,279 19,279 Special assessments - 8,076 - 8,076 Interfund loans receivable 5,721 - 15,410 21,131 Due from other governmental units 126,473 1,953,223 747 2,080,443 TOTAL ASSETS $ 1,536,685 $ 2,990,522 $ 3,697,740 $ 8,224,947 LIABILITIES AND FUND BALANCES Liabilities Accounts payable $ 31,151 $ 5,454 $ - $ 36,605 Retainage payable 500 - - 500 Deferred revenue - 1,952,708 19,279 1,971,987 Total liabilities 31,651 1,958,162 19,279 2,009,092 Fund balances Restricted - 1,032,360 - 1,032,360 Committed 275,000 - 732,024 1,007,024 Assigned 1,230,034 - 2,946,437 4,176,471 Total fund balances 1,505,034 1,032,360 3,678,461 6,215,855 TOTAL LIABILITIES AND FUND BALANCES $ 1,536,685 $ 2,990,522 $ 3,697,740 $ 8,224,947 Combining Statements & Schedules, 6-10 2011 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, 2011 Page 1 of 6 SPECIAL REVENUE FUNDS NET CHANGE IN FUND BALANCE (115,619) 32,748 17 FUND BALANCE JANUARY 1 370,593 241,282 3,298 FUND BALANCE JANUARY 1 RESTATED $ 370,593 $ 241,282 $ 3,298 FUND BALANCE DECEMBER 31 $ 254,974 $ 274,030 $ 3,315 Combining Statements & Schedules, 6-11 ARTERIAL HOTEL/ PATHS & STREET MOTEL TAX TRAILS REVENUES Taxes $ $ 211,750 $ Licenses and permits - Intergovernmental revenues 502,347 - Contributions - 65,000 - Interest 2,034 1,199 17 Miscellaneous revenues - - - TOTAL REVENUES 504,381 277,949 17 EXPENDITURES Current: General government - - - Economic environment 245,201 Culture & recreation - Capital outlay - TOTAL EXPENDITURES - 245,201 - EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES 504,381 32,748 17 OTHER FINANCING SOURCES (USES) Transfer (out) (620,000) - - TOTAL OTHER FINANCE SOURCES (USES) (620,000) NET CHANGE IN FUND BALANCE (115,619) 32,748 17 FUND BALANCE JANUARY 1 370,593 241,282 3,298 FUND BALANCE JANUARY 1 RESTATED $ 370,593 $ 241,282 $ 3,298 FUND BALANCE DECEMBER 31 $ 254,974 $ 274,030 $ 3,315 Combining Statements & Schedules, 6-11 2011 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, 2011 Page 2 of 6 Combining Statements & Schedules, 6-12 1% FOR CABLE COMM. SPRINGBROOK TOTAL ART & DEVELOPMENT WETLANDS SRF REVENUES Taxes $ $ 40,000 $ $ 251,750 Licenses and permits 48,763 48,763 Intergovernmental revenues - 502,347 Contributions - 65,000 Interest 623 1,050 3,231 8,154 Miscellaneous revenues - 1,584 - 1,584 TOTAL REVENUES 623 91,397 3,231 877,598 EXPENDITURES Current: General government 295 - - 295 Economic environment - - 245,201 Culture & recreation - 76,744 76,744 Capital outlay 15,425 - 15,425 TOTAL EXPENDITURES 15,720 76,744 - 337,665 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES (15,097) 14,653 3,231 539,933 OTHER FINANCING SOURCES (USES) Transfer (out) - - (620,000) TOTAL OTHER FINANCE SOURCES (USES) - - (620,000) NET CHANGE IN FUND BALANCE (15,097) 14,653 3,231 (80,067) FUND BALANCE JANUARY 1 136,784 172,817 660,327 1,585,101 FUND BALANCE JANUARY 1 RESTATED $ 136,784 $ 172,817 $ 660,327 $ 1,585,101 FUND BALANCE DECEMBER 31 $ 121,687 $ 187,470 $ 663,558 $ 1,505,034 Combining Statements & Schedules, 6-12 2011 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, 2011 Page 3 of 6 NET CHANGE IN FUND BALANCE 22,805 22,805 FUND BALANCE JANUARY 1 1,009,555 1,009,555 FUND BALANCE JANUARY 1 RESTATED $ 1,009,555 $ $ 1,009,555 FUND BALANCE DECEMBER 31 $ 1,032,360 $ $ 1,032,360 Combining Statements & Schedules, 6-13 GENERAL 1989 UGO BOND TOTAL DEBT REDEMPTION DSF REVENUES Taxes $ 3,995,842 $ $ 3,995,842 Intergovernmental revenues 309,134 309,134 Interest 11,338 11,338 TOTAL REVENUES 4,316,314 4,316,314 EXPENDITURES Debt service: Principal payments 2,783,237 2,783,237 Interest and fiscal charges 2,376,944 2,376,944 TOTAL EXPENDITURES 5,160,181 5,160,181 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES (843,867) (843,867) OTHER FINANCING SOURCES (USES) Transfer in 529,056 529,056 Refunding bonds issued 9,425,000 9,425,000 Premium on general obligation debt 862,616 862,616 Payment to refunded bond escrow agent (9,950,000) (9,950,000) TOTAL OTHER FINANCE SOURCES (USES) 866,672 866,672 NET CHANGE IN FUND BALANCE 22,805 22,805 FUND BALANCE JANUARY 1 1,009,555 1,009,555 FUND BALANCE JANUARY 1 RESTATED $ 1,009,555 $ $ 1,009,555 FUND BALANCE DECEMBER 31 $ 1,032,360 $ $ 1,032,360 Combining Statements & Schedules, 6-13 2011 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, 2011 Page 4 of 6 C.D. IMPACT FIRE IMPACT TRANS. IMPACT MITIGATION MITIGATION MITIGATION REVENUES Charges for services 63,560 83,803 182,713 Interest 6,697 9,117 5,374 TOTAL REVENUES 70,257 92,920 188,087 EXPENDITURES Current: Transportation - - - Culture & recreation TOTAL EXPENDITURES - - - EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES 70,257 92,920 188,087 OTHER FINANCING SOURCES (USES) Transfer in 61,352 - - Transfer (out) - (529,056) (650,000) TOTAL OTHER FINANCE SOURCES (USES) 61,352 (529,056) (650,000) NET CHANGE IN FUND BALANCE 131,609 (436,136) (461,913) FUND BALANCE JANUARY 1 1,343,446 1,928,814 1,119,849 $ 1,343,446 $ 1,928,814 $ 1,119,849 FUND BALANCE DECEMBER 31 $ 1,475,055 $ 1,492,678 $ 657,936 Combining Statements & Schedules, 6-14 2011 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, 2011 Page 5 of 6 REVENUES Charges for services Interest TOTAL REVENUES EXPENDITURES Current: Transportation Culture & recreation 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 FUND BALANCE JANUARY 1 RESTATED FUND BALANCE DECEMBER 31 SO LK WA INFRA- TOTAL STRUCTURE CPF - 330,076 269 21,457 269 351,533 734 734 5,241 5,241 5,975 5,975 P,/Vol 61,352 (1,179,056) (1,117, 704) k",-1 �, IL' -1 58,498 4,450,607 $ 58,498 $ 4,450,607 $ 52,792 $ 3,678,461 Combining Statements & Schedules, 6-15 2011 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, 2011 Page 6 of 6 REVENUES Taxes Licenses and permits Intergovernmental revenues Charges for services Contributions Interest Miscellaneous revenues TOTAL REVENUES EXPENDITURES Current: General government Physical environment Transportation Economic environment Mental & physical health Culture & recreation Debt service: Principal payments Interest and fiscal charges TOTAL EXPENDITURES EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES OTHER FINANCING SOURCES (USES) Transfer in Transfer (out) Refunding bonds issued Premium on general obligation debt Payment to refunded bond escrow agent TOTAL OTHER FINANCE SOURCES (USES) NET CHANGE IN FUND BALANCE FUND BALANCE JANUARY 1 FUND BALANCE DECEMBER 31 (80,067) 22,805 (772,146) (829,408) 1,585,101 1,009,555 4,450,607 7,045,263 $ 1,505,034 $ 1,032,360 $ 3,678,461 $ 6,215,855 Combining Statements & Schedules, 6-16 TOTAL OTHER TOTAL TOTAL TOTAL GOVERNMENTAL SRF DSF CPF FUNDS $ 251,750 $ 3,995,842 $ $ 4,247,592 48,763 - 48,763 502,347 309,134 811,481 - - 330,076 330,076 65,000 - - 65,000 8,154 11,338 21,457 40,949 1,584 - - 1,584 877,598 4,316,314 351,533 5,545,445 295 - - 295 245,201 - 245,201 - 734 734 76,744 - 76,744 15,425 - 15,425 - - 5,241 5,241 2,783,237 2,783,237 - 2,376,944 - 2,376,944 337,665 5,160,181 5,975 5,503,821 (843,867) 345,558 539,933 41,624 - 529,056 61,352 590,408 (620,000) - (1,179,056) (1,799,056) 9,425,000 9,425,000 862,616 862,616 (9,950,000) (9,950,000) (620,000) 866,672 (1,117,704) (871,032) (80,067) 22,805 (772,146) (829,408) 1,585,101 1,009,555 4,450,607 7,045,263 $ 1,505,034 $ 1,032,360 $ 3,678,461 $ 6,215,855 Combining Statements & Schedules, 6-16 2011 Comprehensive Annual Financial Report SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET TO ACTUAL - ARTERIAL STREET FUND For the Year Ended December 31, 2011 BUDGETED AMOUNTS ORIGINAL FINAL ACTUAL City of Renton, Washington VARIANCE REVENUES Intergovernmental revenues $ 617,000 $ 617,000 $ 502,347 $ (114,653) Interest 3,000 3,000 2,034 (966) TOTAL REVENUES 620,000 620,000 504,381 (115,619) EXPENDITURES TOTAL EXPENDITURES - - - EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES 620,000 620,000 504,381 (115,619) OTHER FINANCING SOURCES (USES) Transfer (out) (620,000) (620,000) (620,000) TOTAL OTHER FINANCE SOURCES (USES) (620,000) (620,000) (620,000) NET CHANGE IN FUND BALANCE - - (115,619) (115,619) FUND BALANCE JANUARY 1 200,687 370,595 370,593 (2) FUND BALANCE DECEMBER 31 $ 200,687 $ 370,595 $ 254,974 $ (115,621) Combining Statements & Schedules, 6-17 2011 Comprehensive Annual Financial Report City of Renton, Washington SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET TO ACTUAL - HOTEL/MOTEL TAX FUND For the Year Ended December 31, 2011 REVENUES Taxes Contributions Interest TOTAL REVENUES EXPENDITURES Current: Economic environment TOTAL EXPENDITURES EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES OTHER FINANCING SOURCES (USES) TOTAL OTHER FINANCE SOURCES (USES) NET CHANGE IN FUND BALANCE FUND BALANCE JANUARY 1 FUND BALANCE DECEMBER 31 BUDGETED AMOUNTS ORIGINAL FINAL ACTUAL VARIANCE $ 180,000 $ 180,000 $ 211,750 $ 31,750 65,000 65,000 65,000 - - - 1,199 1,199 245,000 245,000 277,949 32,949 245,000 450,000 245,201 (204,799) 245,000 450,000 245,201 (204,799) 247,828 241,282 241,282 0 $ 247,828 $ 36,282 $ 274,030 $ 237,748 Combining Statements & Schedules, 6-18 2011 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, 2011 BUDGETED AMOUNTS ORIGINAL FINAL ACTUAL VARIANCE REVENUES Interest $ $ $ 17 $ 17 TOTAL REVENUES 17 17 EXPENDITURES TOTAL EXPENDITURES - - EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES 17 17 OTHER FINANCING SOURCES (USES) TOTAL OTHER FINANCE SOURCES (USES) - - NET CHANGE IN FUND BALANCE 17 17 FUND BALANCE JANUARY 1 3,264 3,299 3,298 (1) FUND BALANCE DECEMBER 31 $ 3,264 $ 3,299 $ 3,315 $ 16 Combining Statements & Schedules, 6-19 2011 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, 2011 BUDGETED AMOUNTS ORIGINAL FINAL ACTUAL VARIANCE REVENUES Interest $ $ $ 623 $ 623 TOTAL REVENUES 623 623 EXPENDITURES Current: General government 295 295 Capital outlay 50,000 68,257 15,425 (52,832) TOTAL EXPENDITURES 50,000 68,257 15,720 (52,537) EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES (50,000) (68,257) (15,097) 53,160 OTHER FINANCING SOURCES (USES) Transfer in 15,000 32,000 (32,000) TOTAL OTHER FINANCE SOURCES (USES) 15,000 32,000 (32,000) NET CHANGE IN FUND BALANCE (35,000) (36,257) 21,160 (15,097) FUND BALANCE JANUARY 1 128,796 136,784 136,784 0 FUND BALANCE DECEMBER 31 $ 93,796 $ 100,527 $ 121,687 $ 21,160 Combining Statements & Schedules, 6-20 2011 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, 2011 BUDGETED AMOUNTS ORIGINAL FINAL ACTUAL VARIANCE REVENUES Taxes $ 40,000 $ 40,000 $ 40,000 $ - Licenses and permits 45,000 45,000 48,763 3,763 Interest - - 1,050 1,050 Miscellaneous revenues - - 1,584 1,584 TOTAL REVENUES 85,000 85,000 91,397 6,397 EXPENDITURES Current: Culture and recreation 45,674 45,674 76,744 31,070 Capital outlay 40,000 175,627 - (175,627) TOTAL EXPENDITURES 85,674 221,301 76,744 (144,557) EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES (674) (136,301) 14,653 150,954 OTHER FINANCING SOURCES (USES) TOTAL OTHER FINANCE SOURCES (USES) - - - NET CHANGE IN FUND BALANCE (674) 14,653 150,954 (136,301) FUND BALANCE JANUARY 1 88,718 172,817 172,817 0 FUND BALANCE DECEMBER 31 $ 88,044 $ 36,516 $ 187,470 $ 150,954 Combining Statements & Schedules, 6-21 2011 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, 2011 BUDGETED AMOUNTS ORIGINAL FINAL ACTUAL VARIANCE REVENUES Interest $ $ $ 3,231 $ 3,231 TOTAL REVENUES 3,231 3,231 EXPENDITURES TOTAL EXPENDITURES - - EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES 3,231 3,231 OTHER FINANCING SOURCES (USES) TOTAL OTHER FINANCE SOURCES (USES) - - NET CHANGE IN FUND BALANCE 3,231 3,231 FUND BALANCE JANUARY 1 459,528 660,327 660,327 (0) FUND BALANCE DECEMBER 31 $ 459,528 $ 660,327 $ 663,558 $ 3,231 Combining Statements & Schedules, 6-22 2011 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, 2011 REVENUES Taxes Intergovernmental revenues Interest TOTAL REVENUES EXPENDITURES Debt service: Principal payments Interest and fiscal charges TOTAL EXPENDITURES EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES OTHER FINANCING SOURCES (USES) BUDGETED AMOUNTS nDlr IN AI CIKIAI ArTI IAI vADIANirc $ 3,915,056 $ 3,819,288 $ 3,995,842 $ 176,554 270,923 270,923 309,134 38,211 - - 11,338 11,338 4,185,979 4,090,211 4,316,314 226,103 2,620,236 2,881,423 2,783,237 (98,186) 2,094,799 2,347,681 2,376,944 29,263 4,715,035 5,229,104 5,160,181 (68,923) 1JL71VJD) kl1130,07Jj (o93100 // L7J,VLD Transfers in 529,056 692,123 529,056 (163,067) Refunding bonds issued - 10,287,616 9,425,000 (862,616) Premium on general obligation debt - 862,616 862,616 Payment to refunded bond escrow agent - (9,950,001) (9,950,000) 1 TOTAL OTHER FINANCE SOURCES (USES) 529,056 1,029,738 866,672 (163,066) NET CHANGE IN FUND BALANCE (109,155) - 131,960 22,805 FUND BALANCE JANUARY 1 151,448 1,009,555 1,009,555 - FUND BALANCE DECEMBER 31 $ 151,448 $ 900,400 $ 1,032,360 $ 131,960 Combining Statements & Schedules, 6-23 2011 Comprehensive Annual Financial Report City of Renton, Washington SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGETTO ACTUAL- COMMUNITY DEVELOPMENT IMPACT MITIGATION FUND For the Year Ended December 31, 2011 BUDGETED AMOUNTS Combining Statements & Schedules, 6-24 ORIGINAL FINAL ACTUAL VARIANCE REVENUES Charges for services 60,000 60,000 63,560 3,560 Interest - - 6,697 6,697 TOTAL REVENUES 60,000 60,000 70,257 10,257 EXPENDITURES TOTAL EXPENDITURES - - - EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES 60,000 60,000 70,257 10,257 OTHER FINANCING SOURCES (USES) Proceeds of long-term debt - - 61,352 61,352 Transfer in 61,352 - (61,352) Transfer (out) (400,000) (400,000) (400,000) TOTAL OTHER FINANCE SOURCES (USES) (400,000) (338,648) 61,352 400,000 NET CHANGE IN FUND BALANCE (340,000) (278,648) 131,609 410,257 FUND BALANCE JANUARY 1 1,126,594 1,343,446 1,343,446 0 FUND BALANCE DECEMBER 31 $ 786,594 $ 1,064,798 $ 1,475,055 $ 410,257 Combining Statements & Schedules, 6-24 2011 Comprehensive Annual Financial Report City of Renton, Washington SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET TO ACTUAL - FIRE IMPACT MITIGATION FUND For the Year Ended December 31, 2011 BUDGETED AMOUNTS ORIGINAL FINAL ACTUAL VARIANCE REVENUES Charges for services $ 100,000 $ 100,000 $ 83,803 $ (16,197) Interest - - 9,117 9,117 TOTAL REVENUES 100,000 100,000 92,920 (7,080) EXPENDITURES TOTAL EXPENDITURES - - - EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES 100,000 100,000 92,920 (7,080) OTHER FINANCING SOURCES (USES) Transfer (out) (529,056) (529,056) (529,056) TOTAL OTHER FINANCE SOURCES (USES) (529,056) (529,056) (529,056) NET CHANGE IN FUND BALANCE (429,056) (429,056) (436,136) (7,080) FUND BALANCE JANUARY 1 1,903,522 1,928,814 1,928,814 0 FUND BALANCE DECEMBER 31 $ 1,474,466 $ 1,499,758 $ 1,492,678 $ (7,080) Combining Statements & Schedules, 6-25 2011 Comprehensive Annual Financial Report City of Renton, Washington SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET TO ACTUAL - TRANSPORTATION IMPACT MITIGATION FUND For the Year Ended December 31, 2011 BUDGETED AMOUNTS ORIGINAL FINAL ACTUAL VARIANCE REVENUES Charges for services $ 240,000 $ 240,000 $ 182,713 $ (57,287) Interest 10,000 10,000 5,374 (4,626) TOTAL REVENUES 250,000 250,000 188,087 (61,913) EXPENDITURES TOTAL EXPENDITURES - - - EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES 250,000 250,000 188,087 (61,913) OTHER FINANCING SOURCES (USES) Transfer (out) (499,494) (999,494) (650,000) (349,494) TOTAL OTHER FINANCE SOURCES (USES) (499,494) (999,494) (650,000) 349,494 NET CHANGE IN FUND BALANCE (249,494) (749,494) (461,913) 287,581 FUND BALANCE JANUARY 1 557,134 1,119,850 1,119,849 (1) FUND BALANCE DECEMBER 31 $ 307,640 $ 370,356 $ 657,936 $ 287,580 Combining Statements & Schedules, 6-26 2011 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, 2011 OTHER FINANCING SOURCES (USES) Proceeds of long-term debt BUDGETED AMOUNTS 18,160,000 16,715,000 (1,445,000) ORIGINAL FINAL ACTUAL VARIANCE REVENUES Transfer in 2,400,000 2,400,000 2,010,822 Taxes $ 560,000 $ 560,000 $ 575,234 $ 15,234 Intergovernmental revenues - 586,272 389,757 (196,515) Charges for services - - 658 658 Contributions 350,000 465,786 (3,692) (469,478) Interest - - 51,568 51,568 Miscellaneous revenues - - 114 114 TOTAL REVENUES 910,000 1,612,058 1,013,639 (598,419) EXPENDITURES Current: General government - - 339,122 339,122 Physical environment 160,000 - (160,000) Economic environment - - 325,731 325,731 Culture & recreation 70,000 70,000 868,867 798,867 Capital outlay 14,892,000 19,198,227 2,322,659 (16,875,568) Debt service: Interest payment - 160,000 116,744 (43,256) TOTAL EXPENDITURES 14,962,000 19,588,227 3,973,123 (15,615,104) EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES (14,052,000) (17,976,169) (2,959,484) 15,016,685 OTHER FINANCING SOURCES (USES) Proceeds of long-term debt 10,000,000 18,160,000 16,715,000 (1,445,000) Premiums on bonds sold - - 1,405,553 1,405,553 Transfer in 2,400,000 2,400,000 2,010,822 (389,178) Transfer (out) - (76,772) (76,772) TOTAL OTHER FINANCE SOURCES (USES) 12,400,000 20,483,228 20,054,603 (428,625) NET CHANGE IN FUND BALANCE (1,652,000) 14,588,060 2,507,059 17,095,119 FUND BALANCE JANUARY 1 3,457,170 5,832,452 5,832,452 - FUND BALANCE DECEMBER 31 $ 1,805,170 $ 8,339,511 $ 22,927,571 $ 14,588,060 Combining Statements & Schedules, 6-27 2011 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, 2011 BUDGETED AMOUNTS Combining Statements & Schedules, 6-28 ORIGINAL FINAL ACTUAL VARIANCE REVENUES Licenses and permits $ 1,630,000 $ 1,630,000 $ 1,696,116 $ 66,116 Intergovernmental revenues 7,633,325 12,020,549 7,706,388 (4,314,161) Interfund revenues - 700,000 - (700,000) Contributions - 4,034,441 4,034,441 Interest 16,429 16,429 Miscellaneous revenues - 42 42 TOTAL REVENUES 9,263,325 14,350,549 13,453,416 (897,133) EXPENDITURES Current: Transportation - - 2,019,343 2,019,343 Capital outlay 11,632,819 19,512,542 12,565,685 (6,946,857) Debt service: - - Interest payment - - 9,188 9,188 TOTAL EXPENDITURES 11,632,819 19,512,542 14,594,216 (4,918,326) EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES (2,369,494) (5,161,993) (1,140,800) 4,021,193 OTHER FINANCING SOURCES (USES) Transfer in 1,394,494 1,619,494 1,270,000 (349,494) Transfer (out) (15,000) (30,000) - (30,000) TOTAL OTHER FINANCE SOURCES (USES) 1,379,494 1,589,494 1,270,000 (319,494) NET CHANGE IN FUND BALANCE (990,000) (3,572,499) 129,200 3,701,699 FUND BALANCE JANUARY 1 1,060,648 4,177,188 4,177,188 - FUND BALANCE DECEMBER 31 $ 70,648 $ 604,689 $ 4,306,388 $ 3,701,699 Combining Statements & Schedules, 6-28 2011 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, 2011 REVENUES Interest TOTAL REVENUES EXPENDITURES Current: Transportation Culture & recreation Capital outlay TOTAL EXPENDITURES EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES OTHER FINANCING SOURCES (USES) Transfer (out) TOTAL OTHER FINANCE SOURCES (USES) NET CHANGE IN FUND BALANCE FUND BALANCE JANUARY 1 FUND BALANCE DECEMBER 31 $ $ $ 269 $ 269 269 269 38 58,499 58,498 (1) $ 38 $ 499 $ 52,792 $ 52,293 Combining Statements & Schedules, 6-29 734 734 - 5,241 5,241 56,000 - (56,000) 56,000 5,975 (50,025) (56,000) 50,294 (5,706) I) nnm nnm 38 58,499 58,498 (1) $ 38 $ 499 $ 52,792 $ 52,293 Combining Statements & Schedules, 6-29 2011 Comprehensive Annual Financial Report COMBINING STATEMENT OF NET ASSETS NON -MAJOR ENTERPRISE FUNDS December 31, 2011 Page 1 of 2 City of Renton, Washington Combining Statements & Schedules, 6-30 TOTAL NON -MAJOR AIRPORT GOLF COURSE ENTERPRISE FUNDS ASSETS Current assets: Cash & cash equivalents $ 1,416,885 $ 500,592 $ 1,917,477 Investments at fair value 836,311 295,473 1,131,784 Receivables (net of allowances): Customer accounts 61,667 39,137 100,804 Interest - investments 6,392 3,670 10,062 Due from other funds 7,441 - 7,441 Due from other governmental units 95,976 - 95,976 Inventory of materials and supplies - 59,425 59,425 Total current assets 2,424,672 898,297 3,322,969 Noncurrent assets: Capital assets (net) 12,858,250 8,484,411 21,342,661 TOTAL ASSETS $ 15,282,922 $ 9,382,708 $ 24,665,630 Combining Statements & Schedules, 6-30 2011 Comprehensive Annual Financial Report LIABILITIES Current liabilities: Accounts payable Interfund Loan Payable Accrued interest payable Accrued wages payable Accrued taxes payable Custodial Accounts Total current liabilities Long-term liabilities: Deferred revenue Accrued employee wages and benefits payable Advances from other funds Total long-term liabilities TOTAL LIABILITIES NET ASSETS Investment in capital assets, net of related debt Unrestricted TOTAL NET ASSETS City of Renton, Washington COMBINING STATEMENT OF NET ASSETS NON -MAJOR ENTERPRISE FUNDS December 31, 2011 Page 2 of 2 TOTAL NON -MAJOR AIRPORT GOLF COURSE ENTERPRISE FUNDS $ 134,737 $ 18,966 $ 153,703 94,888 366,575 461,463 2,579 2,840 5,419 42,830 56,265 99,095 64,412 9,302 73,714 - 166,767 166,767 339,446 620,715 960,161 147,359 999 148,358 27,604 57,435 85,039 199,855 1,149,907 1,349, 762 374,818 1,208,341 1,583,159 714,264 1,829,056 2,543,320 12,858,250 8,484,411 21,342,661 1,710,408 (930,759) 779,649 $ 14,568,658 $ 7,553,652 $ 22,122,310 Combining Statements & Schedules, 6-31 2011 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, 2011 OPERATING REVENUES: Charges for services TOTAL OPERATING REVENUES OPERATING EXPENSES: Operations and maintenance Administrative and general Taxes Depreciation TOTAL OPERATING EXPENSES OPERATING INCOME (LOSS) NON-OPERATING REVENUES(EXPENSES): Intergovernmental revenues Interest revenues Other non-operating revenues(expenses) Interest expense NON-OPERATING REVENUE NET OF EXPENSES INCOME (LOSS) BEFORE CONTRIBUTIONS AND TRANSFERS Operating transfers (out) CHANGE IN NET ASSETS NET ASSETS, JANUARY 1 NET ASSETS, DECEMBER 31 BUSINESS -TYPE ACTIVITIES ENTERPRISE FUNDS TOTAL NON -MAJOR AIRPORT GOLF COURSE ENTERPRISE FUNDS $ 2,294,383 $ 2,014,983 $ 4,309,366 2,294,383 2,014,983 4,309,366 1,388,955 1,229,469 2,618,424 78,030 523,625 601,655 2,093 10,247 12,340 545,005 295,071 840,076 2,014,083 2,058,412 4,072,495 280,300 (43,429) 236,871 242,722 - 242,722 9,074 5,247 14,321 2,749 2,797 5,546 (12,723) (41,524) (54,247) 241,822 (33,480) 208,342 (76,909) 522,122 445,213 (8,848) (656) (9,504) nv Jla'41 r �/i,wj) �aj'ivy 14,055,384 7,631,217 21,686,601 $ 14,568,658 $ 7,553,652 $ 22,122,310 Combining Statements & Schedules, 6-32 2011 Comprehensive Annual Financial Report STATEMENT OF CASH FLOWS NON -MAJOR ENTERPRISE FUNDS For the Year Ended December 31, 2011 Page 1 of 2 CASH FLOWS FROM OPERATING ACTIVITIES: Cash received for services Cash paid to suppliers for goods & services Cash paid to employees Other operating receipts Other non-operating receipts NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers from other funds NET CASH PROVIDED (USED) BY NONCAPITAL FINANCING ACTIVITIES CASH FLOWS FROM CAPITAL FINANCING ACTIVITIES: Acquisition & construction of capital assets 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 NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES NET INCREASE(DECREASE)IN CASH & CASH EQUIVALENTS CASH & CASH EQUIVALENTS, JANUARY 1 CASH , RESTRICTED CASH ,& CASH EQUIVALENTS, DECEMBER 31 City of Renton, Washington BUSINESS -TYPE ACTIVITIES ENTERPRISE FUNDS TOTAL NON -MAJOR AIRPORT GOLF COURSE ENTERPRISE FUNDS $ 2,517,319 $ 2,008,028 $ 4,525,347 (1,582,888) (1,765,172) (3,348,060) 16,839 6,974 23,813 158,874 - 158,874 2,749 (38,727) (35,978) 1,112,893 211,103 1,323,996 (8,848) (656) (9,504) (8,848) (656) (9,504) (197,427) (111,048) (308,475) (91,678) (358,518) (450,196) (672) (672) (289,105) (470,238) (759,343) (164,995) 192,775 27,780 (9,456) 2,886 (6,570) (174,451) 195,661 21,210 640,489 (64,130) 576,359 776,396 564,722 1,341,118 $ 1,416,885 $ 500,592 $ 1,917,477 Combining Statements & Schedules, 6-33 2011 Comprehensive Annual Financial Report 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 customer deposits Increase (decrease)in deferred revenues Increase (decrease)in accrued employee leave benefits Total adjustments NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES NONCASH INVESTING, CAPITAL, AND FINANCING ACTIVITIES Depreciation City of Renton, Washington STATEMENT OF CASH FLOWS NON -MAJOR ENTERPRISE FUNDS For the Year Ended December 31, 2011 Page 2 of 2 BUSINESS -TYPE ACTIVITIES ENTERPRISE FUNDS TOTAL NON -MAJOR AIRPORT GOLF COURSE ENTERPRISE FUNDS $ 280,300 $ (43,429) $ 236,871 545,005 295,071 840,076 245,471 (38,727) 206,744 112,359 (17,484) 94,875 (83,848) (83,848) (9,670) (9,670) (109,279) 17,898 (91,381) (4,531) (10,126) (14,657) - 9,597 9,597 110,577 999 111,576 16,839 6,974 23,813 832,593 254,532 1,087,125 $ 545,005 $ 295,071 $ 840,076 Combining Statements & Schedules, 6-34 2011 Comprehensive Annual Financial Report COMBINING STATEMENT OF NET ASSETS INTERNAL SERVICE FUNDS December 31, 2011 Page 1 of 2 ASSETS Current assets: Cash & cash equivalents Investments at fair value Receivables (net of allowances): Customer accounts Interest - investments Due from other funds Due from other governmental units Prepayments Total current assets Noncurrent assets: Capital assets (net) Intangible assets (net) Total noncurrent assets TOTAL ASSETS EQUIPMENT RENTAL $ 4,874,911 $ 2,877,397 INSURANCE FUND 12,016,215 $ 7,092,524 City of Renton, Washington TOTAL INTERNAL SERVICE FUNDS 16,891,126 9,969,921 21,963 11,462 33,425 27,777 62,718 90,495 56,301 - 56,301 42,117 - 42,117 144,418 93,982 238,400 8,044,884 19, 276,901 27, 321,785 8,376,720 2A2 114 8,720,048 - $ 16,764,932 $ 19,276,901 $ 8,376,720 343,328 8,720,048 36,041,833 Combining Statements & Schedules, 6-35 2011 Comprehensive Annual Financial Report LIABILITIES Current liabilities: Accounts payable Claims incurred but not reported Accrued employee benefits payable Accrued taxes payable Total current liabilities Long-term liabilities: Accrued employee wages and benefits payable Total long-term liabilities TOTAL LIABILITIES NET ASSETS Investment in capital assets, Net of related debt Restricted Unrestricted TOTAL NET ASSETS City of Renton, Washington COMBINING STATEMENT OF NET ASSETS INTERNAL SERVICE FUNDS December 31, 2011 Page 2 of 2 EQUIPMENT RENTAL INSURANCE FUND TOTAL INTERNAL SERVICE FUNDS $ 368,423 $ 196,454 $ 564,877 - 2,442,195 2,442,195 309,104 23,923 333,027 1,988 - 1,988 679,515 2,662,572 3,342,087 323,727 21,512 345,239 323,727 21,512 345,239 1,003,242 2,684,084 3,687,326 8,720,048 - 8,720,048 - 5,342,695 5,342,695 7,041,642 11, 250,122 18, 291,764 $ 15,761,690 $ 16,592,817 $ 32,354,507 Combining Statements & Schedules, 6-36 2011 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, 2011 OPERATING REVENUES: Charges for services Other operating revenues TOTAL OPERATING REVENUES OPERATING EXPENSES: Operations and maintenance Administrative and general Taxes Depreciation TOTAL OPERATING EXPENSES OPERATING INCOME (LOSS) NON-OPERATING REVENUES (EXPENSES): Intergovernmental revenues Interest revenues Gain (loss) on sale of capital assets Other non-operating revenues (expenses) NON-OPERATING REVENUE NET OF EXPENSE INCOME (LOSS) BEFORE CONTRIBUTIONS AND TRANSFERS Transfers in Transfers (out) CHANGE IN NET ASSETS NET ASSETS, JANUARY 1 NET ASSETS, DECEMBER 31 TOTAL EQUIPMENT INSURANCE INTERNAL RENTAL FUND SERVICE FUNDS $ 12,407,073 $ 2,971,206 $ 15,378,279 87,972 12, 662,645 12, 750,617 12,495,045 15, 633,851 28,128,896 10,504,327 12,786,522 23,290,849 333,094 564,336 897,430 13,810 2,553 16,363 1,887,334 - 1,887,334 12,738,565 13,353,411 26,091,976 (243,520) 2,280,440 2,036,920 187,372 37,673 225,045 39,043 87,690 126,733 16,539 - 16,539 238,039 649,019 887,058 480,993 774,382 1,255,375 3,054,822 237,473 3,292,295 179,907 179,907 Y1/,JOV J,VJY,OLL J,Y/L,LVL 15,344,310 13,537,995 28,882,305 $ 15,761,690 $ 16,592,817 $ 32,354,507 Combining Statements & Schedules, 6-37 2011 Comprehensive Annual Financial Report COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS For the Year Ended December 31, 2011 Page 1 of 2 CASH FLOWS FROM OPERATING ACTIVITIES: Cash received from other funds for services Cash paid to suppliers for goods & services Cash paid to employees Other operating receipts NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers to/from other funds NET CASH PROVIDED (USED) BY NONCAPITAL FINANCING ACTIVITIES CASH FLOWS FROM CAPITAL FINANCING ACTIVITIES: Acquisition & construction of capital assets NET CASH PROVIDED (USED) BY CAPITAL FINANCING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES: Payments for investments Interest on investments NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES NET INCREASE(DECREASE)IN CASH & CASH EQUIVALENTS CASH & CASH EQUIVALENTS, JANUARY 1 CASH & CASH EQUIVALENTS, DECEMBER 31 City of Renton, Washington EQUIPMENT RENTAL INSURANCE FUND TOTAL INTERNAL SERVICE FUNDS $ 12,466,926 $ 15,636,518 $ 28,103,444 (10,562,685) (10,630,695) (21,193,380) 53,377 20,032 73,409 441,950 (2,368,130) (1,926,180) 179,907 179,907 179,907 179,907 (2,601,853) (2,601,853) (2,601,853) (2,601,853) 719,171 516,870 1,236,041 18,565 40,994 59,559 737,736 557,864 1,295,600 715,358 3,215,589 3,930,947 4,159,553 8,800,626 12,960,179 $ 4,874,911 $ 12,016,215 $ 16,891,126 Combining Statements & Schedules, 6-38 2011 Comprehensive Annual Financial Report COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS For the Year Ended December 31, 2011 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 Depreciation & amortization City of Renton, Washington Combining Statements & Schedules, 6-39 TOTAL EQUIPMENT INSURANCE INTERNAL RENTAL FUND SERVICE FUNDS $ 2,280,440 $ 2,036,920 $ (243,520) 1,887,334 - 1,887,334 441,950 686,692 1,128,642 8,798 2,667 11,465 114,426 742,714 857,140 6,144 13,647 19,791 153,946 - 153,946 (16,743) (1,074,820) (1,091,563) 47,233 6,385 53,618 2,643,088 377,285 3,020,373 $ 2,399,568 $ 2,657,725 $ 5,057,293 $ 1,887,334 $ - $ 1,887,334 Combining Statements & Schedules, 6-39 2011 Comprehensive Annual Financial Report STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUND - SPECIAL DEPOSIT For the Year Ended December 31, 2011 Page 1 of 1 City of Renton, Washington Combining Statements & Schedules, 6-40 BEGINNING ENDING BALANCE DEBITS CREDITS BALANCE ASSETS Cash $ 518,893 $ 865,321 $ 745,903 $ 638,311 Investments at fair value 390,400 390,400 780,800 - TOTAL ASSETS $ 909,293 $ 1,255,721 $ 1,526,703 $ 638,311 LIABILITIES Vouchers & contracts payable $ 63,706 $ 668,907 $ 613,152 $ 7,951 Deposits payable 845,587 673,633 458,406 630,360 TOTAL LIABILITIES $ 909,293 $ 1,342,540 $ 1,071,558 $ 638,311 Combining Statements & Schedules, 6-40 2011 Comprehensive Annual Financial Report STATISTICAL SECTION December 31, 2011 City of Renton, Washington 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 2011 Comprehensive Annual Financial Report TABLE 1 NET ASSETS BY COMPONENT LAST TEN FISCAL YEARS' (Accrual basis of accounting) City of Renton, Washington Source : City of Renton Finance Division 'The City implemented GASB Statement No. 34 during 2003; historical information prior to 2003 is not available Statistical Section, 7-2 2003 2004 2005 2006 2007 2008 2009 2010 2011 Governmental activities Invested in capital assets, net of related debt $ 89,360,313 $ 195,282,055 $ 203,297,293 $ 209,964,556 $ 232,714,563 $ 353,197,782 $ 378,440,636 $ 383,016,494 $ 373,641,842 Restricted 6,816,559 21,460,395 28,578,305 42,261,663 32,648,993 33,294,987 20,882,824 11,664,101 26,432,127 Unrestricted 41,699,232 25,746,196 29,272,573 29,340,290 32,075,613 34,160,010 35,033,629 45,911,214 53,244,297 Total governmental activities net assets $ 137,876,104 $ 242,488,646 $ 261,148,171 $ 281,566,509 $ 297,439,169 $ 420,652,779 $ 434,357,089 $ 440,591,809 $ 453,318,266 Business -type activities Invested in capital assets, net of related debt $ 158,886,497 $ 163,891,546 $ 171,827,746 $ 181,515,939 $ 188,518,151 $ 202,255,997 $ 208,682,683 $ 214,001,083 $ 217,103,722 Restricted 3,048,210 3,555,690 3,555,690 3,555,690 3,586,667 4,171,525 4,029,537 58,747 - Unrestricted 15,886,887 21,612,156 21,541,563 19,357,695 17,973,237 17,430,207 18,209,611 17,743,107 23,340,910 Total business -type activities net assets $ 177,821,594 $ 189,059,392 $ 196,924,999 $ 204,429,324 $ 210,078,055 $ 223,857,729 $ 230,921,831 $ 231,802,937 $ 240,444,632 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 $ 555,453,779 $ 587,123,319 $ 597,017,577 $ 590,745,564 Restricted 9,864,769 25,016,085 32,133,995 45,817,353 36,235,660 37,466,512 24,912,361 11,722,848 26,432,127 Unrestricted 57,586,119 47,358,352 50,814,136 48,697,985 50,048,850 51,590,217 53,243,240 63,654,321 76,585,207 Total primary government net assets $ 315,697,698 $ 431,548,038 $ 458,073,170 $ 485,995,833 $ 507,517,224 $ 644,510,508 $ 665,278,920 $ 672,394,746 $ 693,762,898 Source : City of Renton Finance Division 'The City implemented GASB Statement No. 34 during 2003; historical information prior to 2003 is not available Statistical Section, 7-2 2011 Comprehensive Annual Financial Report City of Renton, Washington TABLE 2 CHANGES IN NET ASSETS LAST TEN FISCAL YEARS' (Accrual basis of accounting) Page 1 of 2 EXPENSES 2003 2004 2005 2006 2007 2008 2009 2010 2011 Government activities: Government activities: General government $ 24,365,244 $ 22,144,567 $ 21,137,856 $ 19,977,086 $ 29,112,970 $ 12,010,422 $ 18,808,404 $ 10,018,501 $ 4,268,321 Judicial 1,258,956 1,340,655 1,380,816 1,434,134 1,845,031 1,761,665 2,134,283 2,402,692 2,563,989 Public safety 26,238,548 28,647,443 29,496,791 30,749,762 36,213,120 46,289,454 44,361,089 50,657,146 52,627,849 Physical environment 2,013,239 2,278,445 2,208,340 2,618,832 2,749,417 3,333,471 2,440,801 2,425,279 2,151,322 Transportation 4,221,713 6,797,356 4,183,880 15,798,138 11,237,287 13,675,581 11,765,835 16,903,492 25,376,308 Economic environment 5,886,795 5,519,929 5,899,796 6,372,118 6,880,687 6,823,426 6,669,911 7,363,396 6,491,151 Health and human services 21,646 228,966 300,171 295,072 301,495 325,066 328,333 882,740 819,138 Culture and recreation 8,689,666 10,303,074 9,744,692 9,695,924 11,036,931 17,025,800 16,992,266 13,518,312 11,955,737 Interest on long-term debt 1,827,464 1,627,581 1,710,346 1,772,370 2,594,784 2,663,436 2,848,081 2,127,347 2,165,960 Total Governmental activities expenses 74,523,271 78,888,016 76,062,688 88,713,436 101,971,722 103,908,321 106,349,003 106,298,905 108,419,775 Business -type activities: 3,732,443 6,213,791 4,979,601 4,596,836 5,265,737 9,570,931 11,029,657 10,520,151 Waterworks utility 22,381,464 23,347,678 25,884,227 27,220,132 28,657,468 32,738,366 35,617,861 36,574,469 37,148,813 Airport 1,219,465 936,305 1,226,810 1,196,363 1,396,054 1,733,894 1,865,481 1,993,202 2,026,804 Solid waste utility 8,516,598 8,558,441 9,327,525 9,706,016 10,606,560 11,518,047 14,143,956 14,826,315 14,434,201 Golfcourse 1,831,670 1,933,113 2,132,077 2,056,874 2,277,454 2,334,838 2,303,192 2,296,870 2,099,936 Total Business -type activities net assets 33,949,197 34,775,537 38,570,639 40,179,385 42,937,536 48,325,145 53,930,490 55,690,856 55,709,754 Total Primary Government expenses 108,472,468 113,663,553 114,633,327 128,892,821 144,909,258 152,233,466 160,279,493 161,989,761 164,129,529 PROGRAM REVENUES Government activities: Charges for services: General government 16,716,472 15,579,366 17,525,244 21,852,465 23,163,645 5,614,638 2,864,232 2,363,280 2,756,613 Judicial 1,287,901 1,531,773 697,883 831,485 1,169,581 2,420,913 5,176,402 3,706,436 3,565,216 Public safety 929,780 200,149 247,235 517,151 591,586 550,773 643,970 761,835 641,483 Physical environment 759,700 837,027 894,750 400,798 999,484 864,581 951,940 1,233,424 1,015,323 Transportation 1,519,383 1,916,862 1,660,698 1,628,154 1,432,215 2,165,538 3,178,543 3,111,259 3,275,596 Economic environment 4,969,475 4,236,596 4,516,899 4,368,399 7,857,186 4,236,983 1,965,125 2,419,488 2,486,396 Culture and recreation 1,460,879 1,507,387 1,558,458 1,742,071 1,649,960 1,739,055 2,377,290 2,299,635 1,793,863 Operating grants and contributions 3,732,443 6,213,791 4,979,601 4,596,836 5,265,737 9,570,931 11,029,657 10,520,151 15,540,897 Capital grants and contributions 1,094,764 1,745,718 1,227,503 5,909,870 4,940,471 18,109,124 16,091,934 9,102,331 12,135,982 Total governmental activities program revenues 32,470,797 33,768,669 33,308,271 41,847,229 47,069,865 45,272,536 44,279,093 35,517,839 43,211,369 Business -type activities: Charges for services: Business -type charges 37,077,258 38,917,114 40,029,830 40,056,079 45,403,349 44,651,684 50,901,497 55,064,203 62,328,294 Operating grants and contributions 222,193 112,616 196,974 77,688 243,537 264,784 46,267 125,819 465,468 Capital grants and contributions 6,600,471 6,583,241 5,101,699 6,317,203 1,761,802 6,888,975 7,556,701 1,056,961 2,473,309 Total business -type activities program revenues 43,899,922 45,612,971 45,328,503 46,450,970 47,408,688 51,805,443 58,504,465 56,246,983 65,267,071 Total primary government program revenues $ 76,370,719 $ 79,381,640 $ 78,636,774 $ 88,298,199 $ 94,478,553 $ 97,077,979 $ 102,783,558 $ 91,764,822 $ 108,478,440 Net Governmental activities $ (42,052,474) $ (45,119,347) $ (42,754,417) $ (46,866,207) $ (54,901,857) $ (58,635,785) $ (62,069,910) $ (70,781,066) $ (65,208,406) Business -type activities 9,950,725 10,837,434 6,757,864 6,271,585 4,471,152 3,480,298 4,573,975 556,127 9,557,317 Total primary government net expense $ (32,101,749) $ (34,281,913) $ (35,996,553) $ (40,594,622) $ (50,430,705) $ (55,155,487) $ (57,495,935) $ (70,224,939) $ (55,651,089) Statistical Section, 7-3 2011 Comprehensive Annual Financial Report GENERAL REVENUES AND OTHER CHANGES Governmental activities: Taxes Property taxes Retail sales taxes Business taxes Excise taxes 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 TABLE 2 CHANGES IN NET ASSETS LAST TEN FISCAL YEARS (Accrual basis of accounting) Page 2 of 2 2003 2004 2005 2006 2007 2008 City of Renton, Washington 2009 2010 2011 $ 19,520,575 $ 19,578,390 $ 21,523,818 $ 23,600,131 $ 23,106,578 $ 29,381,036 $ 32,300,319 $ 32,586,884 $ 33,309,975 17,334,831 18,281,949 18,910,823 20,869,595 22,749,831 23,190,076 22,065,316 21,591,375 22,008,777 10,895,130 9,957,129 10,643,068 11,219,303 11,962,879 14,945,173 14,876,496 16,883,888 16,870,284 5,449,877 6,751,264 6,938,265 7,718,945 8,236,876 4,362,945 4,923,978 4,351,914 4,113,705 5,415 6,048 49 3,799 33,949 6,477 1,353 276 380 1,081,398 1,291,669 1,449,001 3,251,975 3,465,517 2,419,260 1,118,889 794,793 602,516 312,867 4,346,619 1,958,217 689,243 1,218,889 2,104,133 172,594 82,352 991,772 (40,000) (10,304) (9,300) (68,446) - 110,000 (100,000) (17,095) 37,454 54,560,093 60,202,764 61,413,941 67,284,545 70,774,519 76,519,100 75,358,945 76,274,387 77,934,863 242,055 270,605 458,797 881,486 1,041,576 1,120,342 396,957 224,974 117,090 369,513 119,455 639,646 282,808 135,986 85,493 1,207,689 172,663 71,235 40,000 10,304 9,300 68,446 - (110,000) 100,000 17,095 (37,454) 651,568 400,364 1,107,743 1,232,740 1,177,562 1,095,835 1,704,646 414,732 150,871 $ 55,211,661 $ 60,603,128 $ 62,521,684 $ 68,517,285 $ 71,952,081 $ 77,614,935 $ 77,063,591 $ 76,689,119 $ 78,085,734 $ 12,507,619 $ 15,083,417 $ 18,659,524 $ 20,418,338 $ 15,872,662 $ 17,883,315 $ 13,289,035 $ 5,493,321 $ 12,726,457 10,602,293 11,237,798 7,865,607 7,504,325 5,648,714 4,576,133 6,278,621 970,859 9,708,188 $ 23,109,912 $ 26,321,215 $ 26,525,131 $ 27,922,663 $ 21,521,376 $ 22,459,448 $ 19,567,656 $ 6,464,180 $ 22,434,645 'The City implemented GASB Statement No. 34 during 2003; historical information prior to 2003 is not available. Source : City of Renton Finance Division Statistical Section, 7-4 2011 Comprehensive Annual Financial Report $60,000,000 $50,000,000 $40,000,000 $30,000,000 $20,000,000 $10,000,000 City of Renton, Washington TABLE 3 FUND BALANCE OF GOVERNMENT FUNDS LAST TEN FISCAL YEARS (Accrual basis of accounting) 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 W General fund ® All other governmental funds Source : City of Renton Finance Division ' In 2011, implementation of GASB 54 requires new designations of fund balance; prior year data not available in presribed format Statistical Section, 7-5 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 General fund Reserved $ 83,000 $ 83,000 $ 108,742 $ 8,000 $ 8,000 $ 8,000 $ 8,000 $ 8,000 $ 2,468,569 $ Unreserved 3,920,136 6,758,364 8,603,003 9,189,871 10,737,097 16,474,384 13,509,097 13,478,727 12,020,420 - Nonspendablel - - - - - - - - - 1,149,907 Restricted' 786,611 Committed' - Assigned' 13,812,258 Unassigned' - Total general fund $ 4,003,136 $ 6,841,364 $ 8,711,745 $ 9,197,871 $ 10,745,097 $ 16,482,384 $ 13,517,097 $ 13,486,727 $ 14,488,989 $ 15,748,776 All other governmental funds Reserved $ 1,260,000 $ 880,000 $ 500,000 $ 240,000 $ 63,900 $ 975,000 $ 1,000,000 $ - $ 6,771,384 $ - Unreserved, reported in: Special revenue funds 3,361,529 3,985,917 3,238,246 2,929,692 4,243,189 2,616,596 2,806,667 2,106,370 2,073,227 Debt service funds 2,030,335 1,916,243 1,486,894 2,752,445 3,068,587 1,392,915 1,270,936 367,652 - Capital project funds 33,742,638 22,628,512 26,202,437 27,890,457 42,152,437 29,057,397 29,217,384 18,408,802 8,701,843 - Nonspendable' - - - - - - - - - - Restricted' 19,152,913 Committed' 7,468,491 Assigned' 6,828,410 Total all other governmental funds $ 40,394,502 $ 29,410,672 $ 31,427,577 $ 33,812,594 $ 49,528,113 $ 34,041,908 $ 34,294,987 $ 20,882,824 $ 17,546,454 $ 33,449,814 Source : City of Renton Finance Division ' In 2011, implementation of GASB 54 requires new designations of fund balance; prior year data not available in presribed format Statistical Section, 7-5 2011 Comprehensive Annual Financial Report City of Renton, Washington TABLE 4 CHANGES IN FUND BALANCES OF GOVERNMENT FUND' LAST TEN FISCAL YEARS (Accrual basis of accounting) REVENUES Taxes Licenses and permits Intergovernmental Charges for services Fines Interfund revenues Special assessments Contributions Interest Miscellaneous Total revenues EXPENDITURES General government Judicial Public safety Physical environment Transportation Economic environment Health and human services 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 Proceeds of long-term debt Interfund loan proceeds Interfund loan repayments Refunding bonds issued GO Bonds issued Premium on general obligation debt Sale of capital assets Payment to refunded bond escrow agent Total other financing sources (uses) 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 $ 49,901,849 $ 53,722,322 $ 55,344,506 $ 58,794,081 $ 64,005,567 $ 66,698,876 $ 72,514,388 $ 71,545,700 $ 75,223,750 $ 76,266,688 4,229,501 4,226,883 4,329,086 4,686,608 4,962,507 5,828,230 4,975,585 6,226,371 3,975,441 4,410,862 6,212,359 4,533,544 7,570,570 5,687,169 9,769,225 9,791,830 27,549,621 23,968,449 16,203,499 19,441,957 7,777,778 6,016,704 6,593,153 5,563,289 6,543,289 10,048,879 7,145,950 4,543,420 4,635,502 4,191,024 1,043,199 1,055,564 1,008,984 731,286 906,685 1,150,079 2,002,854 3,724,162 3,439,926 3,150,326 - 3,482,110 3,638,574 3,796,042 2,843,147 3,352,411 3,072,526 3,228,110 3,244,928 3,057,642 312,908 295,673 20,852 23,340 511,932 51,723 - 1,353 - - 118,103 255,102 249,938 317,600 214,387 353,582 135,000 516,805 2,952,649 4,288,448 1,073,538 1,081,420 1,059,886 1,060,353 2,570,682 2,486,889 1,740,035 753,607 550,134 475,278 1,198,846 40,314 122,799 569,881 223,908 86,322 1,273,359 171,004 82,353 648,608 71,868,081 74,709,636 79,938,348 81,229,649 92,551,329 99,848,821 120,409,318 114,678,981 110,308,182 115,930,833 12,523, 577 13, 283,955 13,660,095 14,382,634 13, 972,592 14, 597, 355 15,094,140 12,923,999 10,532,537 10,937,806 - - - - - - 1,761,665 2,134,283 2,402,692 2,563,989 24,924,380 26,029,354 27,462,613 29,031,626 31,157,303 35,583,500 45,530,208 46,048,967 48,904,653 52,986,589 1,898,665 2,015,562 2,201,777 2,190,228 2,609,452 2,764,563 3,123,883 2,431,213 2,345,459 2,048,971 10,622,373 4,461,387 4,615,345 4,711,924 5,097,449 6,403,358 6,332,006 7,043,665 10,748,393 10,038,344 4,479,582 4,613,587 4,947,080 5,123,024 5,519,219 5,896,589 6,673,681 7,071,009 7,205,500 6,447,163 11,445 10,368 11,723 12,700 9,231 13,818 16,459 19,726 787,768 511,934 7,382,069 7,585,936 8,563,967 8,876,250 9,933,854 10,830,224 11,119,073 14,914,298 12,310,530 11,166,081 10,532,479 21,089,534 13,246,669 11,438,104 21,117,525 29,320,023 28,520,453 41,989,793 12,216,152 14,981,858 1,849,269 1,417,042 1,477,579 1,375,738 1,503,350 1,565,904 2,079,551 2,327,138 2,682,672 2,783,237 1,382,717 1,833,102 1,763,893 1,713,525 2,129,656 2,646,623 2,729,247 2,629,157 2,231,823 2,502,876 75,606,556 82,339,827 77,950,741 78,855,753 93,049,631 109,621,957 122,980,366 139,533,248 112,368,179 116,968,848 (3,738,475) (7,630,191) 1,987,607 2,373,896 (498,302) (9,773,136) (2,571,048) (24,854,267) (2,059,997) (1,038,015) 9,441,451 3,511,700 6,563,978 5,476,360 2,962,895 5,782,988 4,053,607 15,059,649 2,545,659 3,886,650 (10,009,962) (3,551,700) (7,764,278) (5,443,660) (3,705,341) (5,782,988) (4,200,607) (10,446,000) (2,822,330) (4,144,157) 3,879,038 18,490,029 - 860,000 - 6,798,085 (860,000) - - - 6,170,000 9,425,000 - 16,715,000 443,484 2,268,169 104,825 171,249 117,328 464,547 13,464 24,218 20,643 - 500 - - - - - - - - (6,406,088) (9,950,000) 3,415,352 131,249 (1,082,972) 497,247 17,761,047 24,218 (126,357) 11,411,734 (69,275) 18,201,162 Net change in fund balances $ (323,123) $ (7,498,942) $ 904,635 $ 2,871,143 $ 17,262,745 $ (9,748,918) $ (2,697,405) $ (13,442,533) $ (2,129,272) $ 17,163,147 Debt service as a percentage of non capital expenditures 4.97% 5.31% 5.01% 4.58% 5.05% 5.25% 5.09% 5.08% 4.91% 5.18% Source : City of Renton Finance Division Tables prior to 2010 used the titles "Security of persons and property" and "Mental and physical health" for functions now being referred to as "Public Safety" and "Health and Human Services", respectively. Statistical Section, 7-6 2011 Comprehensive Annual Financial Report $90,000,000 $80,000,000 $70,000,000 $60,000,000 $50,000,000 $40,000,000 $30,000,000 $20,000,000 $10,000,000 $0 TABLE 5 GENERAL GOVERNMENT TAX REVENUE BY SOURCE LAST TEN FISCAL YEARS (Modified accrual basis of accounting) City of Renton, Washington 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 W Property Tax O Sales Tax J Admission/Utility Tax 0 Excise Tax W Penalty, Interest, Delinquent Tax FISCAL YEAR PROPERTY TAX SALES TAX ADMISSION UTILITY TAX EXCISE TAX INTEREST DELINQUENT TAX 2002 18,373,237 16,431,456 9,798,260 4,711,446 4,404 2003 19,587,986 17,334,831 10,895,131 5,449,877 5,415 2004 19,886,805 18,281,949 9,957,130 6,751,265 6,048 2005 21,826,229 18,910,822 10,643,068 6,938,264 49 2006 23,600,131 20,869,596 11,219,302 7,718,945 3,799 2007 23,106,578 22,749,831 11,962,879 8,236,876 33,949 2008 29,381,036 23,190,076 14,945,173 4,362,945 6,477 2009 32,300,319 22,065,316 14,876,496 4,923,978 1,353 2010 32,586,884 21,591,375 16,883,888 4,351,914 276 2011 33,309,975 22,008,777 16,870,284 4,113,705 380 Source : City of Renton Finance Division TOTALTAX 49,318,803 53,273,240 54,883,197 58,318,433 63,411,773 66,090,113 71,885,707 74,167,462 75,414,337 76,303,121 Statistical Section, 7-7 2011 Comprehensive Annual Financial Report TABLE 6 PRINCIPAL PROPERTY TAX PAYERS December 31, 2011 City of Renton, Washington Source: `King County Department of Assessments Statistical Section, 7-8 2011 2002 % OF TOTAL % OF TOTAL TAXABLE' TAXABLE TAXABLE TAXABLE ASSESSED ASSESSED ASSESSED ASSESSED TAXPAYER VALUE RANK VALUE VALUE RANK VALUE Boeing $ 765,951,604 1 6.67% $ 733,174,709 1 13.11% Paccar 83,847,100 2 0.73% 86,464,606 2 1.55% Puget Sound Energy-Elec/Gas 76,550,185 3 0.67% 75,240,601 3 1.35% Transwestern Harvest Lakeshore 69,486,249 4 0.61% Renton Properties LLC 52,108,900 5 0.45% 47,040,200 4 0.84% Fred Meyer Stores Inc. 44,300,759 6 0.39% Axis Grand Holdings 41,166,000 7 0.36% Providence Health 38,786,186 8 0.34% ECI Two WTC LLC (WTCTPI LLC) 37,194,900 9 0.32% Renton Acquisition LLC (Walton Renton Investors III) 30,713,800 10 0.27% US West 40,761,767 5 0.73% Speiker Properties LP 38,522,502 6 0.69% National Tax Search, LLC 38,363,300 7 0.69% Rosche One Interests 24,816,400 8 0.44% Washington Mutual Bank 23,409,861 9 0.42% Avalon Bay Communities Inc 21,206,000 10 0.38% All Others 10,240,360,678 89.20% 4,464,880,542 79.82% Total Assessed Valuation $ 11,480,466,361 100.00% $ 5,593,880,488 100.00% Source: `King County Department of Assessments Statistical Section, 7-8 2011 Comprehensive Annual Financial Report 14,000,000,000 12,000,000,000 10,000,000,000 8,000,000,000 6,000,000,000 4,000,000,000 2,000,000,000 City of Renton, Washington TABLE 7 ASSESSED VALUE OF TAXABLE PROPERTY LAST TEN FISCAL YEARS 2002 2003 2004 2005 2006 Id Total Taxable Assessed Value -1 Direct Tax Rate REAL PROPERTY 1 FISCAL RESIDENTIAL COMMERCIAL PERSONAL YEAR PROPERTY PROPERTY PROPERTY 2002 $ 2,810,986,787 $ 2,008,043,209 $ 774,850,492 $ 2003 2,314,785,310 2,921,167,960 747,879,276 2004 3.354 3.277 3.327 3.227 3.116_ 2.832 2.884 2.624 2.712 2.369 1,997,241,116 656,709,434 2006 2002 2003 2004 2005 2006 Id Total Taxable Assessed Value -1 Direct Tax Rate REAL PROPERTY 1 FISCAL RESIDENTIAL COMMERCIAL PERSONAL YEAR PROPERTY PROPERTY PROPERTY 2002 $ 2,810,986,787 $ 2,008,043,209 $ 774,850,492 $ 2003 2,314,785,310 2,921,167,960 747,879,276 2004 2,598,752,772 3,057,565,937 716,313,413 2005 4,043,821,357 1,997,241,116 656,709,434 2006 4,510,574,558 2,169,976,740 636,713,076 2007 5,157,095,492 2,439,123,680 754,326,325 2008 6,075,180,284 2,738,107,048 828,746,994 2009 9,073,798,071 3,246,587,967 885,490,676 2010 7,759,903,272 3,253,718,932 840,554,180 2011 6,536,356,583 4,089,930,106 821,141,161 Sources: 11,480, 466, 361 2.832 124,349 1King County Department of Assessments 2Exempt data not available before 2006 3Includes Tax Exempt Property ►�1I1y�Z1I1I:��1I1�iI1y 111413 11111 1 TAX EXEMPT ASSESSED REAL TOTAL ASSESSED DIRECT TAX VALUE PER PROPERTY 1,2 VALUE RATE 1 CAPITA $ 5,593,880,488 3.354 $ 103,898 5,983,832,546 3.277 108,995 6,372,632,122 3.327 115,113 6,697,771,907 3.227 117,836 17,212,168 7,334,476,542 3.116 125,971 20,256,008 8,370,801,505 2.884 139,178 17,643,328 9,659,677,654 2.624 122,840 27,368,066 13,233,244,780 2.369 158,525 30,552,056 11,884,728,440 2.712 138,180 33, 038, 511 11,480, 466, 361 2.832 124,349 Statistical Section, 7-9 2011 Comprehensive Annual Financial Report 10.0 9.0 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 City of Renton, Washington TABLE 8 PROPERTY TAX RATES DIRECT AND OVERLAPPING GOVERNMENTS LAST TEN FISCAL YEARS 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Total City f�JTotal County Total special districts o Total school districts (Total direct and overlapping DIRECT RATES OVERLAPPING RATES CITY OF RENTON COUNTY SCHOOL DISTRICT FISCAL OPERATING DEBT TOTAL OPERATING DEBT TOTAL SPECIAL YEAR MILLAGE SERVICE MILLAGE CITY MILLAGE VILLAGE SERVICE MILLAGE COUNTY MILLAGE DISTRICTS' 2002 3.26036 0.09397 3.35433 1.19751 0.25198 1.44949 0.53599 2003 3.18871 0.08865 3.27736 1.15386 0.19562 1.34948 0.59292 2004 3.16022 0.08322 3.24344 1.18279 0.24867 1.43146 0.58319 2005 3.14843 0.07861 3.22704 1.15665 0.22564 1.38229 0.57542 2006 3.04482 0.07088 3.11570 1.09915 0.22954 1.32869 1.04312 2007 2.82148 0.06252 2.88400 1.08814 0.20142 1.28956 0.99431 2008 2.57052 0.05330 2.62382 1.04278 0.16492 1.20770 1.03213 2009 2.36923 - 2.36923 0.95271 0.14501 1.09772 0.94245 2010 2.71184 2.71184 1.16171 0.12328 1.28499 1.04887 2011 2.83207 2.83207 1.21418 0.12398 1.33816 1.08119 Source: King County Codes and Levies Special Districts include Emergency Medical Services, Port and Hospital districts Statistical Section, 7-10 TOTAL DIRECT DEBT TOTAL TOTAL AND OPERATING SERVICE SCHOOL OVERLAPPING OVERLAPPING MILLAGE MILLAGE MILLAGE MILLAGE MILLAGE 1.63516 1.47772 3.11288 5.09836 8.45269 1.62358 1.36333 2.98691 4.92931 8.20667 1.60492 1.88086 3.48578 5.50043 8.74387 1.62332 2.36918 3.99250 5.95021 9.17725 1.53290 2.42680 3.95970 6.33151 9.44721 1.40073 2.04586 3.44659 5.73046 8.61446 1.26082 1.36572 2.62654 4.86637 7.49019 1.42951 1.71049 3.14000 5.18017 7.54940 1.70401 1.69983 3.40384 5.73770 8.44954 1.86118 1.85585 3.71703 6.13638 8.96845 Statistical Section, 7-10 2011 Comprehensive Annual Financial Report $35,000,000 $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 100% 100% 100% 100% 100% 100% 100% 100% 1 9= 98 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 IdTOTALTAX Percent Collected Sources: 1 Annual Tax Receivable Summary from King County Z Annual Property Tax Reports from King County COLLECTIONS Z TOTAL TAX COLLECTED WITHIN THE 1 FISCAL LEVY FOR FISCAL YEAR OF THE LEVY YEAR FISCAL YEAR AMOUNT % OF LEVY 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% 2008 27,188,522 26,722,301 98.3% 2009 31,058,589 30,249,856 97.4% 2010 32,057,010 31,283,546 97.6% 2011 32,166,084 31,538,875 98.1% Sources: 1 Annual Tax Receivable Summary from King County Z Annual Property Tax Reports from King County COLLECTIONS Z TOTAL COLLECTIONS TO IN SUBSEQUENT DATE YEARS AMOUNT % LEVY $ 295,513 $ 18,581,421 100.0% 337,535 19,486,793 100.0% 265,759 20,449,997 100.0% 290,839 21,649,528 100.0% 455,252 22,794,551 100.0% 461,267 24,046,410 100.0% 457,203 27,179,504 100.0% 719,328 30,969,184 99.7% 463,706 31,747,253 99.0% N/A 31,538,875 98.1% Statistical Section, 7-11 2011 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 City of Renton, Washington TABLE 10 SALES TAX COLLECTIONS BY SECTOR LAST TEN FISCAL YEARS 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 0 Retail O Construction W Manufacturing 0 Transportation V Wholesale W Automotive U Services U Miscellaneous RETAIL TRADE SECTOR Furniture Electronics and Appliances General Merchandise Misc Retail Trade Others Subtotal Retail OTHER SECTORS Construction Manufacturing Transportation Wholesale Automotive Services Miscellaneous Subtotal - Other Sectors 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 $ 1,623,906 $ 1,758,082 $ 2,205,114 $ 1,203,942 $ 1,276,644 $ 1,245,901 $ 1,199,045 $ 1,065,605 $ 1,143,289 $ 1,186,244 Total Sales Tax $ 15,050,835 $ 16,007,404 $ 16,653,819 $ 17,108,455 $ 18,690,943 $ 20,342,195 $ 20,955,889 $ 17,995,840 $ 17,198,187 $ 17,729,735 Source : City of Renton Finance Division In 2007 the 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 collected.) Statistical Section, 7-12 1,065,416 1,130,621 1,143,188 1,137,586 1,036,569 1,086,334 988,355 673,164 788,699 1,013,876 1,073,144 1,100,217 1,169,225 1,462,858 1,573,716 1,646,351 1,652,442 681,148 763,596 862,919 848,834 928,083 658,429 756,662 625,320 558,709 594,226 1,622,166 1,667,483 1,651,782 2,227,721 2,464,896 1,378,094 1,574,482 1,538,600 1,563,101 1,649,231 4,600,384 4,977,860 5,733,691 6,419,057 6,900,461 5,594,837 6,130,633 5,839,810 5,997,784 6,070,498 1,899,005 2,122,560 2,641,907 2,495,684 2,688,902 3,898,202 4,725,533 2,991,530 2,218,377 1,576,127 547,333 754,501 556,555 569,269 797,166 983,110 1,050,789 950,113 777,452 1,073,075 621,314 563,863 628,918 494,866 567,401 - - - - - 1,451,387 1,442,263 1,416,559 1,025,132 1,016,468 1,083,059 1,131,445 915,885 941,315 1,148,660 3,549,973 3,625,878 3,538,502 3,946,163 4,303,221 4,176,747 3,575,928 3,215,641 3,035,251 3,179,418 1,835,039 1,953,254 1,677,315 1,736,569 2,039,090 4,103,240 3,939,201 3,616,076 3,694,342 3,960,151 546,400 567,225 460,372 421,715 378,233 503,000 402,360 466,785 533,667 721,805 10,450,451 11,029,544 10,920,128 10,689,398 11,790,482 14,747,358 14,825,256 12,156,029 11, 200,404 11,659,237 Total Sales Tax $ 15,050,835 $ 16,007,404 $ 16,653,819 $ 17,108,455 $ 18,690,943 $ 20,342,195 $ 20,955,889 $ 17,995,840 $ 17,198,187 $ 17,729,735 Source : City of Renton Finance Division In 2007 the 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 collected.) Statistical Section, 7-12 2011 Comprehensive Annual Financial Report $140,000,000 $120,000,000 $100,000,000 $80,000,000 $60,000,000 $40,000,000 $20,000,000 City of Renton, Washington TABLE 11 RATIOS OF OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 * General Obligation (Governmental) 0 Other Long Term (Governmental) * Revenue (Business -Type) O Other Long Term (Business -Type) GOVERNMENTAL ACTIVITIES BUSINESS -TYPE ACTIVITIES Source : City of Renton Finance Division 1The percentage of Personal Income column is based on personal income of King County. (See Table 16) Statistical Section, 7-13 TOTAL GENERAL OTHER OTHER PRIMARY PERCENTAGE FISCAL OBLIGATION LONG TERM REVENUE LONG TERM GOVERNMENT OF PERSONAL DEBT PER YEAR BONDS DEBT BONDS DEBT DEBT INCOME CAPITA 2002 $ 33,797,023 $ $ 31,230,000 $ 8,229,373 $ 73,256,396 7.86% $ 1,361 2003 32,245,982 29,070,000 7,637,552 68,953,534 9.40% 1,256 2004 30,629,403 37,680,000 8,384,138 76,693,541 8.71% 1,385 2005 29,107,664 35,790,000 11,589,789 76,487,453 8.68% 1,346 2006 45,584,314 33,840,000 10,716,520 90,140,834 8.59% 1,545 2007 44,017,551 33,405,000 9,878,951 87,301,502 8.17% 1,448 2008 41,938,000 43,310,000 8,968,894 94,216,894 8.60% 1,196 2009 38,480,000 38,973,547 41,110,000 8,284,962 126,848,509 11.63% 1,516 2010 36,425,000 38,511,875 36,955,000 7,357,546 119,249,421 11.17% 1,383 2011 50,290,000 38,053,639 34,925,000 6,443,218 129,711,857 N/A 1,401 Source : City of Renton Finance Division 1The percentage of Personal Income column is based on personal income of King County. (See Table 16) Statistical Section, 7-13 2011 Comprehensive Annual Financial Report TABLE 12 LEGAL DEBT MARGIN INFORMATION LAST TEN FISCAL YEARS City of Renton, Washington 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 LEGAL DEBT MARGIN CALCULATION FOR Assessed Value Add back: exempt real property Total assessed value Debt Limit 2.5% of general purpose limit, voted and 2.5% Utility purpose limit, voted 2.5% Open Space, Park and Capital Total Debt Limit Debt applicable to limit: General Obligation Bonds Other Long Term Debt Total Debt Less: Amount set aside for repayment of general obligation debt and contracts payable Total net debt applicable to limit Legal Debt Margin Percentage of Net Debt to Debt Limit Source : City of Renton Finance Division $ 5,593,880,488 $ 5,983,832,546 $ 6,372,632,122 $ 6,697,771,907 $ 7,334,476,542 $ 8,370,801,505 $ 9,659,677,654 $ 13,233,244,780 $ 11,884,728,440 $ 11,480,466,361 17,212,168 20,256,008 17,643,328 27,368,066 30,552,056 33,038,511 5,593,880,488 5,983,832,546 6,372,632,122 6,697,771,907 7,351,688,710 8,391,057,513 9,677,320,982 13,260,612,846 11,915,280,496 11,513,504,872 139,847,012 149,595,814 159,315,803 167,444,298 183,792,218 209,776,438 241,933,025 331,515,321 297,882,012 287,837,622 139,847,012 149,595,814 159,315,803 167,444,298 183,792,218 209,776,438 241,933,025 331,515,321 297,882,012 287,837,622 139,847,012 149,595,814 159,315,803 167,444,298 183,792,218 209,776,438 241,933,025 331,515,321 297,882,012 287,837,622 419,541,037 448,787,441 477,947,409 502,332,893 551,376,653 629,329,313 725,799,074 994,545,963 893,646,037 863,512,865 33,797,023 32,245,982 30,629,403 29,107,664 45,584,314 44,017,551 41,938,000 38,480,000.00 36,425,000.00 50,290,000 - - - - - - - 38,973,547.00 38,511,875.18 38,053,639 33,797,023 32,245,982 30,629,403 29,107,664 45,584,314 44,017,551 41,938,000 77,453,547 74,936,875 88,343,639 (2,683,997) (3,068,586) (1,392,915) (1,270,936) (367,652) (1,009,555) (1,032,360) 32,258,799 28,173,327 28,137,539 26,423,667 42,515,728 42,624,636 40,667,064 77,085,895 73,927,320 87,311,279 $ 387,282,238 $ 420,614,114 $ 449,809,870 $ 475,909,226 $ 508,860,925 $ 586,704,677 $ 685,132,010 $ 917,460,068 $ 819,718,717 $ 776,201,586 7.69% 6.28% 5.89% 5.26% 7.71% 6.77% 5.60% 7.75% 8.27% Statistical Section, 7-14 2011 Comprehensive Annual Financial Report 0.80% 0.70% 0.60% 0.50% 0.40% 0.30% 0.20% 0.10% 0.00% TABLE 13 RATIOS OF GENERAL BONDED DEBT OUTSTANDING LAST TEN FISCAL YEARS City of Renton, Washington 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 -w*m—Percent of General Obligation Debt to Assessed Value Source: 1 City of Renton Finance Division Z King County Department of Assessments Statistical Section, 7-15 LESS: NET % OF GO BOND GENERAL1 AMOUNTSl GENERAL DEBTTO FISCAL OBLIGATION AVAILABLE OBLIGATION ASSESSED 2,3 ASSESSED PER YEAR BONDS IN DEBT BOND DEBT VALUE VALUE CAPITA 2002 $ 33,797,023 $ 1,540,203 $ 32,256,820 $ 5,593,880,488 0.58% $ 599 2003 32,245,982 1,879,654 30,366,328 5,983,832,546 0.51% 553 2004 30,629,403 1,440,509 29,188,894 6,372,632,122 0.46% 527 2005 29,107,664 2,683,999 26,423,665 6,697,771,907 0.39% 465 2006 45,584,314 3,068,587 42,515,727 7,334,476,542 0.58% 729 2007 44,017,551 1,392,915 42,624,636 8,370,801,505 0.51% 707 2008 41,938,000 1,270,936 40,667,064 9,659,677,654 0.42% 516 2009 38,480,000 367,652 38,112,348 13,233,244,780 0.29% 456 2010 36,425,000 1,009,555 35,415,445 11,884,728,440 0.30% 411 2011 50,290,000 1,032,360 49,257,640 11,480,466,361 0.43% 532 Source: 1 City of Renton Finance Division Z King County Department of Assessments Statistical Section, 7-15 2011 Comprehensive Annual Financial Report Schools 69% TABLE 14 DIRECTAND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT Port of Seattle 4% GOVERNMENTAL UNIT City of Renton Direct Debt City of Renton Overlapping Debt 4 King County 3 Port of Seattle Renton School District #403 Issaquah School District #411 Kent School District #41S Fire District 20-1 Fire District 40-1 King County Library City of Renton Overlapping Debt Total Direct and Overlapping Debt City of Renton, Washington Renton 16% :ou my 0% DEBT Estimated Percent Estimated Share of OUTSTANDING Applicable overlapping debt $ 50,290,000 100% $ 50,290,000 $ 924,690,136 3.47% $ 32,086,748 336,120,000 3.47% 11,663,364 305,738,450 68.77% 210,256,332 278,300,100 2.52% 7,013,163 206,038,741 0.72% 1,488,218 - 2.91% - 6,359,431 40.55% 2,578,584 123,116,633 1.50% 1,846,749 $ 266,933,158 $ 317,223,158 Sources: 1 King County Department of Executive Services Z King County Department of Assessments 3 King County's debt excludes proprietary -type debt, public facilities district debt financed from special taxes and hotel/motel tax financed debt ° Overlapping percentages are determined by checking within the levy codes of the reporting district to see which taxing districts overlap with that reporting district. For example, within levy code 2100, the Renton School District and the King County Library district overlap with the city and both have debt. Since they both have debt and they overlap with the city, those two districts are reported and the value within that levy code is reported as overlapping with the school and library districts. Statistical Section, 7-16 2011 Comprehensive Annual Financial Report WATER AND SEWER REVENUE BONDS: 16,000,000 14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 0 City of Renton, Washington TABLE 15 PLEDGED -REVENUE COVERAGE LAST TEN FISCAL YEARS Page 1 of 2 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 M Water and Sewer Net Revenue available for debt service o Debt Service OCoverage 4• Revenue Debt Service Ratio Expenses Net Revenue Fiscal without Available for Year Revenue Depreciation Debt Service Principal I I ■ I ■ I ■ I ■ I ■ I ■ I ■ I ■ I ■ 1,635,000 1,282,115 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 M Water and Sewer Net Revenue available for debt service o Debt Service OCoverage Source: City of Renton Finance Division '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. 2Revenue includes connection charges, system development charges, latecomer fees, and interest revenue. Statistical Section, 7-17 Revenue Debt Service Ratio Expenses Net Revenue Fiscal without Available for Year Revenue Depreciation Debt Service Principal Interest Coverage' 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 2008 32,152,413 23,766,437 8,385,976 1,810,000 1,803,687 3.01 2009 34,795,614 26,894,033 7,901,581 1,890,000 1,758,589 2.17 2010 35,790,870 28,183,489 7,607,381 1,955,000 1,689,455 2.09 2011 43,146,158 28,835,969 14,310,189 2,030,000 1,616,365 3.92 Source: City of Renton Finance Division '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. 2Revenue includes connection charges, system development charges, latecomer fees, and interest revenue. Statistical Section, 7-17 2011 Comprehensive Annual Financial Report GOLF COURSE REVENUE BONDS 2,500,000 2,000,000 1,500,000 1,000,000 500,000 Fiscal Year 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 - 1.98 1.67 1.38 TABLE 15 PLEDGED -REVENUE COVERAGE LAST TEN FISCAL YEARS Page 2 of 2 1.39 1.25 1.28 ® 1.10 0.83 City of Renton, Washington N/A N/A 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 0 Golf Course Net Revenue available for debt service 0 Debt Service p Coverage Revenue Debt Service Source: City of Renton Finance Division Ratio Interest Expenses Net Revenue 1.98 201,210 without Available for 1.67 Revenue Depreciation Debt Service Principal 2,279,361 1,415,674 863,687 225,000 2,177,122 1,573,296 603,826 235,000 2,198,597 1,460,445 738,152 250,000 2,208,335 1,657,294 551,041 260,000 2,337,672 1,725,854 611,818 270,000 2,333,955 1,770,684 563,271 285,000 2,310,869 1,827,810 483,059 295,000 2,163,737 1,798,831 364,906 310,000 2,106,614 1,684,423 422,191 2,200,000 2,020,230 1,763,341 256,889 - Source: City of Renton Finance Division Ratio Interest Coverage' 210,548 1.98 201,210 1.38 191,223 1.67 180,348 1.25 168,778 1.39 156,358 1.28 142,820 1.10 128,513 0.83 113,323 N/Az - N/A' 1The Golf System revenue bonds coverage requirement is at least 1.25 times that of respective calendar year's annual debt service. 2The Golf Course borrowed funds from the General Fund to call the outstanding 1999 Refunding Revenue Bond in order to receive a more favorable interest rate (see Resolution No. 4070) 31999 Golf System Refunding Revenue Bonds were issued to refund the 1994 Golf System Revenue Bonds. Statistical Section, 7-18 2011 Comprehensive Annual Financial Report 10% 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% City of Renton, Washington TABLE 16 DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN FISCAL YEARS 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 -King County Unemployment Rate PER CAPITA PERSONAL PERSONAL SCHOOL UNEMPLOYMENT POPULATION 1 INCOME Z INCOME 3 ENROLLMENT 5 RATE 6 FISCAL MEDIAN YEAR KING COUNTY RENTON KING COUNTY 2002 1,774,312 53,840 77,940,608,000 2003 1,779,300 54,900 79,199,166,000 2004 1,788,300 55,360 88,407,884,000 2005 1,808,300 56,840 89,032,307,000 2006 1,835,300 58,360 97,750,314,000 2007 1,861,300 60,290 106,805,239,000 2008 1,884,200 78,780 109,551,329,000 2009 1,909,300 83,650 109,053,408,000 2010 1,933,400 86,230 106,806,333,000 2011 1,942,600 92,590 N/A Sources IWashington State Office of Financial Management 2U.S. Bureau of Economic Analysis. 3U.S. Bureau of Economic Analysis. 4Washington State Office of Financial Management 5Renton Public Schools 6Washington State Employment Security Department Statistical Section, 7-19 MEDIAN KING COUNTY AGE 4 CITY OF RENTON KING COUNTY 44,217 36.13 12,892 6.2% 44,800 36.38 13,046 5.3% 49,670 36.60 13,062 4.8% 49,488 36.83 13,192 4.3% 53,488 36.93 13,397 4.0% 57,710 36.97 13,570 3.9% 58,141 37.00 13,836 6.1% 56,904 37.08 13,977 9.0% 55,136 37.24 14,232 8.6% N/A 37.28 14,440 7.1% Statistical Section, 7-19 2011 Comprehensive Annual Financial Report City of Renton, Washington Source: City of Renton Business license records and individual inquiries CITY 34.44% 3.71 3.13 2.30 1.86 1.64 1.27 1.08 0.85 0.76 51.04% Statistical Section, 7-20 TABLE 17 PRINCIPAL EMPLOYERS 2011 2002 EMPLOYER EMPLOYEES RANK CITY EMPLOYEES RANK Boeing Company 12,528 1 27.93% 14,481 1 Valley Medical Center 2,033 2 4.53 1,562 2 Renton School District 1,837 3 4.10 1,318 3 Federal Aviation Administration 1,480 4 3.30 965 4 Paccarinc 1,077 5 2.40 782 5 Providence WA Regional 838 6 1.87 --- --- City of Renton 698 7 1.56 688 6 King County 516 8 1.15 --- --- Convergent Outsourcing Inc. 428 9 0.95 --- --- Puget Sound Educational Services District #121 364 10 0.81 --- --- Zones International --- --- --- 533 7 Wizards of the Coast --- --- --- 453 8 IKEA --- --- --- 358 9 Shuttle Express, Inc. --- --- --- 319 10 Total Principal Employers 21,799 48.61% 21,459 Total All other employers 23,049 51.39% 20,588 Total Employees working within Renton 44,848 100.00% 42,047 Source: City of Renton Business license records and individual inquiries CITY 34.44% 3.71 3.13 2.30 1.86 1.64 1.27 1.08 0.85 0.76 51.04% Statistical Section, 7-20 2011 Comprehensive Annual Financial Report FUNCTION General Government Public Safety Police Commissioned Officers Non -Commissioned Officers Fire Commissioned Officers Non -Commissioned Officers Public Works Administration Transportation Systems Utility Systems Maintenance Services Culture and Recreation Parks and Recreation Library Museum Golf Course Total TABLE 18 FULL TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION LAST TEN FISCAL YEARS City of Renton, Washington 2002 2003 2004 2005 2006 2007 20081 20092 20103 2011 97.5 96.5 97.5 94.5 89.5 95.0 155.6 163.8 143.3 143.5 88.0 88.0 89.0 91.0 97.0 122.0 124.0 121.0 123.0 123.0 40.2 40.2 41.2 43.2 42.2 49.2 51.2 46.4 44.4 28.4 105.0 105.0 106.0 106.0 106.0 109.0 118.0 137.0 136.0 145.0 12.0 12.0 13.0 13.0 14.0 16.0 17.0 18.0 16.0 16.0 42.7 42.7 42.7 42.5 46.5 49.0 4.0 3.5 3.0 3.0 34.0 33.0 34.5 34.5 35.5 40.5 41.0 37.0 33.0 33.0 20.8 20.8 20.8 20.8 24.8 29.3 36.7 37.7 29.5 29.5 61.0 62.0 62.0 62.0 64.1 71.0 88.0 83.0 78.0 78.0 77.5 77.5 77.5 76.5 76.5 81.0 89.5 86.3 81.8 82.8 14.0 14.0 14.0 13.0 13.0 14.0 14.0 15.0 - - 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 9.5 9.5 9.5 603.7 602.7 609.2 608.0 620.0 687.0 750.0 759.2 698.5 692.7 Source: City of Renton Finance Division 1 I 2008, development services moved from public works to community and economic development which is listed under general government. 2 I 2009, increase in Administrative, Judicial & Legal Services includes moving Legal Services in-house and creation of a Communications Division which was a reorganization of staffing from the Finance and Information Services Department and the Mayors Office. 3Operations of the Renton libraries transferred to King County Library System (KCLS) in 2010 as a result of voter -approved annexation Statistical Section, 7-21 2011 Comprehensive Annual Financial Report TABLE 19 OPERATING INDICATORS BY FUNCTION LAST TEN FISCAL YEARS City of Renton, Washington IOperations of the Renton libraries transferred to King County Library System (KCLS) in 2010 as a result of voter -approved annexation. Source: City of Renton departments Statistical Section, 7-22 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 FUNCTION Public Safety Police Physical arrests 3,813 3,735 4,280 4,590 2,489 2,925 3,580 3,748 3,464 2,810 Parking violations 4,776 2,742 3,733 3,575 3,520 5,995 5,117 6,795 4,748 1,094 Traffic violations 11,448 11,651 10,963 12,866 10,172 9,148 10,705 17,031 16,529 8,641 Fire Number of calls answered 8,233 8,582 8,984 9,202 10,096 10,159 12,402 12,840 13,045 12,752 Inspections 2,261 2,681 2,539 3,438 3,505 3,197 2,772 2,968 2,620 2,300 Transportation Street resurfacing (miles) 6.13 4.85 3.67 3.69 3.86 1.59 2.59 3.08 2.65 2.07 Solid Waste Utility Recyclables collected (tons/yr) 5,119.8 4,389.0 4,920.3 4,934.2 4,843 5,004 5,395 9,653 9,836 12,565 Culture and Recreation Athletic field attendence 126,534 137,811 156,707 155,000 155,000 91,053 93,000 93,000 93,000 93,000 Community Center admissions 162,970 172,911 172,537 177,761 177,761 162,476 155,000 150,000 150,000 150,000 Library Volume in collections 155,463 158,676 165,406 190,011 193,965 188,359 194,497 187,454 N/A N/A Total volumes borrowed 456,982 499,792 512,059 491,470 464,333 491,397 554,223 620,981 N/A N/A Waterworks Utility Metered connection 14,583 15,181 15,379 16,585 16,668 16,958 17,172 17,295 17,368 17,370 Average daily consumption 7,232 7,581 7,635 7,306 7,999 8,008 7,388 7,585 6,750 6,650 (thousands of gallons) Peak daily consumption 12,477 14,080 14,248 13,025 15,271 14,750 12,739 14,814 12,826 12,476 (thousands of gallons) IOperations of the Renton libraries transferred to King County Library System (KCLS) in 2010 as a result of voter -approved annexation. Source: City of Renton departments Statistical Section, 7-22 2011 Comprehensive Annual Financial Report TABLE 20 CAPITAL ASSETS STATISTICS BY FUNCTION LAST TEN FISCAL YEARS City of Renton, Washington 1Includes Natural Area acreage, and developed/undeveloped park acreage for Neighborhood Parks, Community Parks, Regional Parks, Special Use Parks and Corridors 2Developed Neighborhood, Community, Regional and Special Use Parks only. Two new parks were part of Benson Hill Annexation not previously accounted for- Parkwood South Div #3 and SE 186th Place Properties Source: City of Renton Departments Statistical Section, 7-23 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 FUNCTION Public safety Police Stations 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 Police Patrol Units 7.0 7.0 7.0 7.0 7.0 7.0 10.0 10.0 10.0 10.0 Fire stations 5.0 5.0 5.0 5.0 5.0 5.0 6.0 6.0 6.0 7.0 Transportation Street (miles) 213.2 213.7 213.7 218.0 224.6 233.7 263.8 263.8 264.5 266.1 Streetlights 2,492.0 2,612.0 2,704.0 2,790.0 2,924.0 3,137.0 3,367.0 3,505.0 3,935.0 4,015.0 Culture and recreation Parks acreage 1,158.0 1,158.0 1,158.0 1,158.0 1,160.0 1,160.0 1,181.0 1,183.0 1,183.0 1205.81 Parks 26.0 26.0 26.0 26.0 26.0 28.0 29.0 30.0 30.0 32.02 Swimming pools - - 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 Tennis courts 17.0 17.0 17.0 17.0 17.0 17.0 17.0 17.0 17.0 17.0 Community centers 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 Waterworks Utility Water mains (miles) 289 291.0 291.1 293.0 295.0 300.0 304.0 305.0 305.0 305.0 Fire hydrants 3,193 3,240 3,274 3,374 3,440 3,544 3,602 3,624 3,651 3,639 Sanitary sewers (miles) 176.7 183.5 189.6 193.3 204.9 206.3 215.7 216.4 217.7 219.3 Storm sewers (miles) 199.4 204.0 209.7 214.8 219.7 222.3 267.5 273.8 274.9 276.1 1Includes Natural Area acreage, and developed/undeveloped park acreage for Neighborhood Parks, Community Parks, Regional Parks, Special Use Parks and Corridors 2Developed Neighborhood, Community, Regional and Special Use Parks only. Two new parks were part of Benson Hill Annexation not previously accounted for- Parkwood South Div #3 and SE 186th Place Properties Source: City of Renton Departments Statistical Section, 7-23 Y RENTON� AHEAD OF THE CURVE