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HomeMy WebLinkAbout2006 CAFRi CITY OF RENTON 2006 COMPREHENSIVE ANNUAL FINANCIAL REPORT For Year Ended December 31, 2006 Michael E. Bailey, CPA, Administrator Linda M. Parks, CPA, CGFM, Fiscal Services Director Finance & Information Services City of Renton 1055 South Grady Way Renton, Washington 98057 (425) 430-6858 website: www.rentonwa.gov ii ACKNOWLEDGEMENTS Prepared by the Finance Division of the Finance & Information Services Department Finance & IS Administrator Michael E. Bailey, CPA Fiscal Services Director Linda M. Parks, CPA, CGFM Accounting Staff Linda Dixon, Finance Analyst III David Lemenager, Accounting Assistant III Jill Masunaga, Finance Analyst III Bang Parkinson, Finance Analyst Supervisor Tracy Schuld, Accounting Supervisor Vidya Vinod, Finance Analyst II Nancy Violante, Finance Analyst III Cindy Zinck, Finance Analyst Supervisor Administrative Secretary II DeAnna Fricke Print & Mail Coordinator Karl Hurst Form/Graphic Technician Beth Haglund TABLE OF CONTENTS DECEMBER 31, 2006 ITEM PAGE iii INTRODUCTORY SECTION Letter of Transmittal.....................................................................................................................................1-1 2005 Comprehensive Annual Financial Report Award................................................................................1-7 Corporate Organization Structure & Reporting Relations............................................................................1-8 FINANCIAL SECTION Independent Auditor’s Report ..................................................................................................................2-1 Management Discussion and Analysis ......................................................................................................3-1 Basic Financial Statements: Government-wide Financial Statements: Statement of Net Assets.........................................................................................................................4-1 Statement of Activities...........................................................................................................................4-2 Fund Statements Government Fund Financial Statements: Balance Sheet..................................................................................................................................4-4 Reconciliation of Balance Sheet to the Statement of Net Assets ....................................................4-8 Statement of Revenues, Expenditures and Changes in Fund Balances...........................................4-9 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Government Funds to the Statement of Activities.......................................4-11 Proprietary Fund Financial Statements: Statement of Net Assets.................................................................................................................4-12 Statement of Revenues, Expenses, and Changes in Fund Balances..............................................4-14 Statement of Cash Flows...............................................................................................................4-15 Fiduciary Fund Statements: Statement of Fiduciary Net Assets................................................................................................4-17 Statement of Changes in Fiduciary Net Assets .............................................................................4-18 Notes to Financial Statements: Note 1: Significant Accounting Policies .........................................................................................4-19 Note 2: Compliance and Accountability .........................................................................................4-29 Note 3: Deposits and Investments...................................................................................................4-31 Note 4: Property Taxes....................................................................................................................4-34 Note 5: Capital Assets and Depreciation.........................................................................................4-35 Note 6: Pensions..............................................................................................................................4-38 Note 7: Other Post Employment Benefits .......................................................................................4-45 Note 8: Contingencies.....................................................................................................................4-46 Note 9: Risk Management...............................................................................................................4-46 Note 10: Interfund Transactions........................................................................................................4-49 Note 11: Net Assets...........................................................................................................................4-50 Note 12: Prior Year Restatements.....................................................................................................4-51 Note 13: Short Term Debt.................................................................................................................4-51 Note 14: Long Term Debt .................................................................................................................4-51 Note 15: Deferred Charges in Proprietary Funds..............................................................................4-54 Note 16: Segment Information..........................................................................................................4-55 Note 17: Joint Ventures.....................................................................................................................4-55 Note 18: Subsequent Events..............................................................................................................4-56 Required Supplemental Information Other than MD&A Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget to Actual General Fund..........................................................................................................................................5-1 Parks Fund .............................................................................................................................................5-2 Actuarial Valuation of Firefighters’ Pension Fund................................................................................5-3 TABLE OF CONTENTS DECEMBER 31, 2006 ITEM PAGE iv Combining Statements Non-Major Fund Descriptions...............................................................................................................6-1 Combining Balance Sheet......................................................................................................................6-5 Combining Statement of Revenues, Expenditures and Changes in Fund Balances.............................6-12 Schedule of Revenues, Expenditures and Changes in Fund Balances Budget to Actual..................................................................................................................................6-19 Combining Statement of Net Assets, Non-Major Enterprise Funds....................................................6-40 Combining Statement of Revenues, Expenses and Changes in Fund Net Assets, Non-Major Enterprise Funds.........................................................................................................6-42 Statement of Cash Flows, Non-Major Enterprise Funds......................................................................6-43 Combining Statement of Net Assets, Internal Service Funds..............................................................6-45 Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets, Internal Service Funds...................................................................................................................6-47 Combining Statement of Cash Flows, Internal Service Funds.............................................................6-48 Statement of Changes in Assets and Liabilities Agency Fund – Special Deposit ...............................6-50 Statistical Section Statistical Section Description...............................................................................................................7-1 Financial Trends: Table 1: Net Assets by Component ....................................................................................................7-3 Table 2: Changes in Net Assets..........................................................................................................7-4 Table 3: Fund Balance of Government Funds....................................................................................7-6 Table 4: Changes in Fund Balances of Government Funds................................................................7-8 Table 5: General Government Tax Revenue by Source ...................................................................7-10 Revenue Capacity: Table 6: Principal Property Tax Payers............................................................................................7-11 Table 7: Assessed Value Taxable Property ......................................................................................7-12 Table 8: Property Tax Rates Direct and Overlapping Governments................................................7-14 Table 9: Property Tax Levies and Collections..................................................................................7-16 Table 10: Sales Tax Collections by Sector.........................................................................................7-18 Debt Capacity: Table 11: Ratios of Outstanding Debt by Type..................................................................................7-20 Table 12: Legal Debt Margin Information..........................................................................................7-22 Table 13: Ratios of General Bonded Debt Outstanding .....................................................................7-24 Table 14: Direct and Overlapping Governmental Activities Debt .....................................................7-25 Table 15: Revenue Bond Coverage for Water and Sewer and Golf System Bonds...........................7-26 Demographic and Economic Information: Table 16: Demographic and Economic Statistics...............................................................................7-27 Table 17: Principal Employers ...........................................................................................................7-28 Operating Information: Table 18: Full Time Equivalent City Government Employees by Function ......................................7-30 Table 19: Operating Indicators by Function.......................................................................................7-32 Table 20: Capital Assets Statistics by Function..................................................................................7-34 June 1, 2007 Honorable Kathy Keolker, Mayor Members of the Renton City Council Residents of Renton City of Renton, Washington RE: THE 2006 COMPREHENSIVE ANNUAL FINANCIAL REPORT Dear Mayor Keolker, City Councilmembers, and Residents of Renton: We are pleased to present the City’s Comprehensive Annual Financial Report for the year ended December 31, 2006. 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, 2006, 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, 2006, are fairly presented in conformity with GAAP. The State Auditor’s report is included as the first component of the financial section of this report. 2006 Comprehensive Annual Financial Report City of Renton, Washington 1-2 Introduction The independent audit of the City of Renton’s financial statements is part of a broader, federally mandated “Single Audit” designed to meet the special needs of federal grantor agencies. The standards governing Single Audit engagements require the independent auditor to report not only on the fair presentation of the financial statements, but also the City’s internal controls and compliance to legal requirements with special emphasis on internal controls and legal requirements involving the administration of federal grant programs. The City’s Single Audit Report is issued separately and is available upon request or directly from the Washington State Auditor. Another State mandate requires the Washington State Auditor’s Office to perform additional tests of compliance with State laws and regulations as required by RCW 43.09.260. This statute requires the State Auditor to inquire as to whether the City complied with the laws and the Constitution of the State of Washington, its own ordinances and orders, and the requirements of the State Auditor’s Office. The City’s State compliance report is also available upon request and from the Washington State Auditor. GAAP requires that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of the Management’s Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The City’s MD&A can be found immediately following the independent auditor’s report. THE CITY OF RENTON AND ITS SERVICES The City of Renton was incorporated on September 6, 1901. Located at the south end of Lake Washington, our City borders the City of Seattle to the north. We currently have a land area of 17.2 square miles. We have over 1,160 acres of parks that includes 26 active parks. As presented by the Washington State Office of Financial Management, our 2006 population was 58,360. 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 maintenance, planning and zoning, libraries, parks and recreation, and general administrative services. The City operates four utilities: water, sewer, surface water, and solid waste. These are operated very similar to a private business where the revenues from rates and other direct sources must pay for the operational, capital, and long-term debt costs. The City has its own water rights and does not purchase water from outside sources. The City’s sewage is treated by King County, but 2006 Comprehensive Annual Financial Report City of Renton, Washington Introduction 1-3 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. Economic Condition and Outlook In Mayor Kathy Keolker’s 2007 State of the City’s address she highlighted: • “Renton’s taxable retail sales increased by almost 10 percent in 2006 and is expected to increase another 7.5 percent in 2007.” 2006 Comprehensive Annual Financial Report City of Renton, Washington 1-4 Introduction • “Over the seven year period from 1999 to 2005, the City’s population growth averaged 2.8 per year.” • “The number of permits issued for new houses in Renton between 1999 and 2005 was 55 percent greater than in the previous seven-year period.” • “Rapid growth at Boeing is expected to lift total Renton employment. Job gains are expected to continue in 2007 and 2008. Puget Sound should see nearly 15,000 new aerospace jobs, an 8.5 percent annual growth. For the second consecutive year, the 737 program achieved a record with net orders of 729 airplanes. The previous record for the 737 program was 569 in 2005. Boeing’s delivery rate is expected to be a plane a day in 2007-2008.” • “Outside of Boeing, employment is expected to grow about 2.5 percent per year in 2007 and 2008.” • “For the next few years, the rate of increase in Renton jobs is expected to be 1.5 times that of King County. Home sales are also expected to increase.” UPDATE FROM BUDGET DOCUMENT Outlook The 2007 Budget totals $210 million; 58.6 million represents the capital budgets. This is 62% more than last year. Projected in the 2007 budget is an ending fund balance of approximately $1 million more than the policy target, which positions the City well for 2008. The 2007 budget anticipates sales tax revenues to grow by 5% over 2006 actual receipts. The growth was nearly 11% between 2005 and 2006. The City adopted a modest increase in the utility rates to pay for maintenance and capital improvements. This will maintain the quality of services provided. The budget includes, funded by prior year budget savings, $400,000 to fund one-time investments in City programs such as replacement of fire fighting equipment and purchase of vehicles to support additional staff. Approximately 11% of the operating budget increase in 2007 was a result of mandatory cost increases. The most significant increase was the change in the retirement system contribution rates established by the State of Washington. Contributions to the retirement system will increase an average of 44.5% or $635,000 for the general government contributions alone. It is anticipated to increase another 44% in 2008, resulting in an increase of just over $1.8 million over the two-year period. The emergency communications system by Valley Communications increased $176,627. The overtime and retirement system rate increases in Police and Fire were $142,560 and $62,000 respectfully. The 2007 budget also included additional staff resources of 19 employees. Six positions were added to public safety, 13 in other areas of the City. The budget also includes nearly $22 million increase for capital improvement projects. Major highlights are: • Transportation – large projects such as the SW 27th Street Connection to Strander Blvd., South Lake Washington roadway improvements, widening Duval Ave NE, and multi- mode transit improvements of Hardie Ave SW. 2006 Comprehensive Annual Financial Report City of Renton, Washington Introduction 1-5 • Airport – precision approach to make our airport safer in all weather conditions, one building demolition, completing the new north and south entrances to the airfield. • General Government – the Sam Chastian Waterfront Trail and the Springbrook Creek Wetland Mitigation Bank Trail, CIP projects for major parks and facilities maintenance, and technology improvements. • Utilities – the new Hazen 565 Zone reservoir and treatment facility, intertie connections, water main rehabilitaion and replacements, emergency power facilities, lift station replacement and rehabilitation, water treatment facility in Kennydale, Springbrook Creek improvements, and draninage and emergency storm projects. Source: 2007 Adopted Budget Message – Moving Renton Forward Letter by: Mayor Kathy Keolker OTHER INFORMATION Cash Management The City has adopted an Investment Policy that states that the primary objectives of investment management, in priority order, are safety, liquidity, and return on investment. The Investment Policy reflects provisions in state statute and authorizes investments in obligations with: the US Government or its agencies; banker’s acceptances; certificates of deposit issued by public depositories in the State of Washington; the Washington State Local Government Investment Pool; and any other investment authorized by law for taxing districts in the State of Washington. The City has a Fire Pension Fund that is managed by an Oversight Board with members including Firefighters, the Mayor and one Councilmember. Their investment policies reflect the long-term obligations of investing these funds, which are invested primarily in US Treasury strips. In 2006, the independent actuarial study estimates a (negative) net pension obligation of ($773,166), and is included, as an asset in the City of Renton’s Government-wide Financial Statements. Risk Management The City belongs to the Washington Cities Insurance Authority (WCIA). The WCIA is a consortium of Washington State cities that purchases excess coverage in large blocks, thus leveraging the market and risk across a large base. It has a professional staff, but operates with an Oversight Board comprised of City representatives. This Board meets monthly. In most cases, the City of Renton has a variety of insurance deductibles that range from $25,000 to a maximum of $250,000. The City maintains a self-insurance program for health and dental coverage for City employees and dependents. The City purchases excess medical coverage from Berkley Risk for cases that exceed $350,000. The City also purchases life and disability insurance from various healthcare insurance providers. Awards and Acknowledgements The City has a long history of superior achievements in the preparation of its Comprehensive Annual Financial Reports through the peer review program conducted by the Government Finance Officers Association. The dedicated staff of the Finance Division work hard each day to ensure that the City’s financial records always displays information in conformance with legal 2006 Comprehensive Annual Financial Report City of Renton, Washington 1-6 Introduction parameters. All members of the division are to be commended for their consistent dedication to excellence in local government finance. In particular, Bang Parkinson and Nancy Violante, produced a significant portion of this year’s annual financial report. Linda Dixon, Jill Masunaga, and Vidya Vinod contributed significantly by preparing cash flow statements, the statistical section, and other elements of this report. Other contributors included: Kristi Brovold, David Lemenager, Tracy Schuld, and Cindy Zinck. The actual production could not be accomplished without the technical expertise of DeAnna Fricke, Karl Hurst, and Beth Haglund. We are pleased with the comprehensive content and quality of this financial report knowing that the citizens of Renton can rely on this report as the definitive assessment of all City financial operations. Sincerely, Michael E. Bailey, CPA Linda M. Parks, CPA Finance & Information Services Administrator Fiscal Services Director Introduction 1-7 H:\FINANCE\CAFRDOC\CAFR 2006 Book\02_introductory section\H:\FINANCE\CAFRDOC\CAFR 2006 Book\02_introductory section\ City of Renton Corporate Organization Structure RENTON CITIZENS CITY COUNCIL Randy Corman, President Toni Nelson, Terri Briere Dan Clawson, Denis W. Law Marcie Palmer, Don Persson 425-430-6501 MAYOR Kathy Keolker 425-430-6500 CHIEF ADMINISTRATIVE OFFICER Jay Covington 425-430-6500 COMMUNICATIONS Preeti Shridhar, Director 425-430-6500 COMMUNITY SERVICES Terry Higashiyama, Administrator 425-430-6600 Facilities Peter Renner, Director Parks Leslie Betlach, Director Recreation Jerry Rerecich, Director Human Services Karen Bergsvik, Manager Library Bette Anderson, Director Renton History Museum Elizabeth Stewart, Supervisor Community Relations/ Special Events PLANNING/BUILDING/ PUBLIC WORKS Gregg Zimmerman, Administrator 425-430-7394 Development Services Neil Watts, Director Maintenance Services Michael Stenhouse, Director Transportation Systems Peter Hahn, Deputy P/B/PW Administrator Utility Systems Lys Hornsby, Director ECONOMIC DEVELOPMENT NEIGHBORHOODS, AND STRATEGIC PLANNING Alex Pietsch, Administrator 425-430-6580 Economic Development Suzanne Dale Estey, Director Neighborhoods Strategic Planning ADMINISTRATIVE, JUDICIAL AND LEGAL SERVICES Marty Wine, Assistant CAO 425-430-6500 Mayor's Office City Clerk/Cable Manager Bonnie Walton, City Clerk Court Services Joe McGuire, Director Hearing Examiner Fred Kaufman, Hearing Examiner City Attorney Warren Barber Fontes, P.S. POLICE Kevin Milosevich, Chief 425-430-7503 Operations/Support Tim Troxel, Deputy Chief Patrol Operations Patrol Services Investigations Administrative Services Staff Services Auxiliary Services FIRE I. David Daniels, Chief 425-430-7501 Operations Charles Duffy, Deputy Fire Chief Emergency Response Administration/ Support Services Larry Rude, Deputy Fire Chief Prevention Bureau Training Disaster Management HUMAN RESOURCES AND RISK MANAGEMENT Michael Webby, Administrator 425-430-7650 Human Resources Civil Service Commission Risk Management FINANCE AND INFORMATION SERVICES Michael Bailey, Administrator 425-430-6858 Finance Linda Parks, Fiscal Services Director Information Services Print and Mail Services MUNICIPAL COURT JUDGE Terry Jurado 425-430-6550 2006 Comprehensive Annual Financial Report City of Renton, Washington Management’s Discussion and Analysis 3-1 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, 2006. 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 2006 financial activities for the City of Renton. These are all intended to help the reader understand the City’s significant financial issues. This MD&A provides an overview of the City’s financial records. The data in this financial report also identifies any material deviations from the financial plan and the adopted annual budget. Finally, the intent of the MD&A and other financial information is to isolate and identify individual fund issues or concerns. FINANCIAL INFORMATION Since 2003, the City of Renton prepared its financial records in accordance to what is known as Government Accounting Standards Board Statement 34 (GASB 34) with a phase in of the infrastructure component in 2004. The City’s general Government-wide Financial Statements were prepared on the full accrual basis of accounting in conformity with generally accepted accounting principles (GAAP). The City’s Fund Financial Statements for its major and non-major governmental funds were prepared on the modified accrual basis of accounting in conformity with GAAP. The City’s major and non-major enterprise funds, internal service funds and pension funds were accounted for on the accrual basis. The City of Renton, along with all cities, counties and other governmental entities in Washington, must comply with the Budgeting, Accounting, and Reporting System (BARS) as defined by the Washington State Office of the Auditor (SAO). The SAO audits the financial records of all cities and other governmental units within the State. The City of Renton’s financial system integrates financial and administrative controls that ensure the safeguarding of assets and the reliability of financial reports. These controls are designed to provide: 1. reasonable assurance that transactions are executed in accordance to management understanding and approval; 2. reasonable assurance that transactions are executed in accordance to GAAP principles; 3. accountability for control of assets and obligations; and 4. assurance that sufficient reporting and review exists to provide adequate information for analysis and comparability of data. Internal control is a high priority for the City. The State Office of the Auditor reviews the City’s internal controls, and the City receives and takes action on all the recommendations made. 2006 Comprehensive Annual Financial Report City of Renton, Washington 3-2 Management’s Discussion and Analysis The City maintains strong budgetary controls in order to ensure compliance with legal provisions embodied in the annual appropriated budget as approved by the City Council. The City Council must authorize any budget increase or decrease to any fund. Financial Highlights • The City’s total assets as of December 31, 2006, exceeded liabilities by over $486 million. • As of December 31, 2006, the City’s Governmental Activities reported net assets of $282 million. Of this total, $26 million is defined as unrestricted and can be used for needs the Mayor and Council deem necessary. These monies are intended to provide a cushion against significant economic downturns in revenues and to maintain sufficient working capital and cash flow to meet daily financial needs. • Investments in capital assets comprise $213 million of the $282 million in Governmental Activities net assets. • The business type activities have total net assets of $204 million. Eighty-eight (88%) percent of this total, $180 million, represents the City’s investments in capital assets. An unrestricted balance of $20 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, 2006, was $96 million. Of this amount, $41.4 million are revenue bonds and PWTF loans dedicated to the water works projects. Another $1.4 million is for outstanding bonds for Senior Housing. These bonds have a special taxing authority. The Golf Course has $3.09 million outstanding in debt service. Employee leave balances total $4.6 million. The balance of $45.5 million of our debt is dedicated for general governmental purposes, including the purchase of City Hall, the construction of the downtown parking garage and a replacement of a fire station (our share of a regional E-911), Communications Center, and other small projects, including municipal-bonds sold for fire equipment. OVERVIEW OF THE FINANCIAL STATEMENTS This discussion and analysis provides an introduction and overview to the City of Renton’s basic financial statements. The basic financial statements are comprised of three components: 1. Government-wide Financial Statements; 2. Fund Financial Statements; and 3. Notes to the Financial Statements. The graphic representation below illustrates the required components of the City’s annual financial report and how the required parts are arranged and relate to one another. This illustration helps explain the City’s financial presentation in 2006. 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. 2006 Comprehensive Annual Financial Report City of Renton, Washington Management’s Discussion and Analysis 3-3 Figure 1 REQUIRED COMPONENTS OF THE ANNUAL FINANCIAL REPORT In addition to the required components shown in Figure 1, the City’s annual report also includes other voluntary supplementary information. The most significant section is the Combining Statements. These provide Balance Sheets, Statement of Revenues, Expenditures, and Changes in Fund Balances with Budget to Actual comparisons, Statement of Net Assets, and Cash Flows for all Non-Major Funds. The next section of information, the Statistical Section, provides a ten-year view of the City’s Revenue, Expenditures, Debt Obligations, and Debt Capacity, the City’s largest taxpayers, and those entities with the largest employment within the City of Renton. This section provides a long- term perspective on the City’s economy. BASIC FINANCIAL STATEMENTS Government-wide Financial Statements provide readers with a broad overview of the City of Renton’s finances in a manner similar to a private sector business. They provide both short-term and long-term information about the City’s overall financial status. The government-wide statements distinguish between functions of the City that are principally supported by taxes and intergovernmental revenues (referred to as “governmental activities”) from functions that are intended to recover all or a significant portion of their costs through user fees and charges (referred to as “business-type activities.”) The governmental activities of the City include a full range of local government services provided to the public such as police and fire protection; road maintenance and construction; community planning and economic development; libraries, parks and recreational opportunities; and other community services. The business-type activities of the City include water, sewer, surface water, solid waste management and services, golf course, and airport. 2006 Comprehensive Annual Financial Report City of Renton, Washington 3-4 Management’s Discussion and Analysis 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, water infrastructure.) The Statement of Activities focuses upon both the gross and net cost of various activities that are provided by the government’s general tax and other revenues. This is intended to summarize and simplify the user’s analysis of cost to various governmental services and/or subsidy to various business-type activities. By separating program revenue from general revenue, users of the financial statements can identify the extent to which each program relies on taxes for funding. The Governmental Activities reflect the City’s basic functions: General Government, Security of Person and Property, Physical Environment, Mental and Physical Health, and Culture and Recreation. Property, sales, and utility taxes finance the majority of these functions. All changes in net assets are reported using accrual basis of accounting, which is similar to the accounting used in the private sector. The accrual basis of accounting requires that revenues are reported when earned and expenses are reported when incurred, no matter when the revenue will actually be received or the obligation will be paid. For example, property taxes are shown as a receivable as revenue even though some amount of these taxes will not be available to the City for several years. All unpaid vendor obligations are illustrated as an accounts payable obligation as of December 31. Fund Financial Statements The City uses funds to ensure and demonstrate fiscal integrity and compliance with finance related legal requirements with a focus on Major Funds. A fund is a group of related accounts that is used to maintain control over resources that have been segregated for specific activities and objectives. There are three types of funds: governmental, proprietary, and fiduciary. A Major Fund has three elements as defined by GASB 34: • Total assets, liabilities, revenues, or expenditures of that individual governmental or enterprise funds are at least ten percent (10%) of the corresponding total (assets, liabilities, etc.) for all funds of that category or type (i.e., governmental, proprietary, or fiduciary); and • Total assets, liabilities, revenues, or expenditures/expenses of the individual government fund or enterprise funds are at least five percent (5%) of the corresponding total for all governmental and enterprise funds combined; or • Any other governmental or enterprise fund that the government’s officials believe is particularly important. Governmental Funds present most of a government’s tax-supported activities. The Proprietary Funds describe and financially manage the government’s business-type activities where all or part 2006 Comprehensive Annual Financial Report City of Renton, Washington Management’s Discussion and Analysis 3-5 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, Parks, and Municipal Facilities CIP Funds (new major fund in 2006). These comprise the City’s major governmental funds. Data from the remaining governmental funds are combined and presented in a single, aggregated column in the fund statements. Individual fund data for each of the non-major governmental funds is provided in the form of combining statements. Governmental Funds are used to account for essentially the same functions reported as governmental activities in the Government-wide Financial Statements. The focus of governmental Fund Financial Statements is on near-term inflows and outflows of available resources and on balances of resources available at the end of the fiscal year. Such information is useful in evaluating whether there are more or less financial resources that can be spent in the near future to finance City services. Because the focus of governmental Fund Financial Statements is a narrower view than that of the Government-wide Financial Statements, it is useful to compare information presented for governmental funds with similar information presented for governmental activities in the Government-wide Financial Statements. This gives the reader a better understanding of the long- term impact of the government’s near-term financing decisions. The Governmental Fund Balance Sheet and the Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balances provide reconciliation to the governmental activities column in the government-wide statements to facilitate this comparison. The City maintains budgetary controls over its governmental funds. Budgetary controls ensure compliance with legal provisions embodied in the annual appropriated budget. Governmental fund budgets are established in accordance with state law and are adopted on a fund level. General Fund budget variances are reviewed 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 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. All other activities are combined in Other Enterprise Funds. Governmental Activities Internal Service Funds are reported separately in this section. 2006 Comprehensive Annual Financial Report City of Renton, Washington 3-6 Management’s Discussion and Analysis 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 on pensions. GOVERNMENT-WIDE FINANCIAL ANALYSIS Statement of Net Assets Changes in Net Assets may serve as a useful indicator of a government’s financial position. The overall financial position has improved for the City of Renton over the prior year. Changes in Net Assets from 2005 to 2006 shows an increase in total net assets of $27.9 million. 2006 Comprehensive Annual Financial Report City of Renton, Washington Management’s Discussion and Analysis 3-7 Table 1 is a condensed version of the Government-wide Statement of Net Assets. Table 1 NET ASSETS Total Total Governmental Governmental Business-type Business-type Primary Primary Activities Activities Activities Activities Government Government 2005 2006 2005 2006 2005 2006 Current and other assets $69,083,752 $89,914,383 $27,021,623 $38,029,290 $96,105,375 $127,943,673 Capital assets (net of accumulated depreciation) 234,312,957 253,366,212 219,207,529 213,959,532 453,520,486 467,325,744 TOTAL ASSETS $303,396,709 $343,280,595 $246,229,152 $251,988,822 $549,625,861 $595,269,417 Long term liabilities $34,448,776 $51,093,508 $47,794,739 $44,994,968 $82,243,515 $96,088,476 Other liabilities 7,799,762 10,620,578 1,509,414 2,564,530 9,309,176 13,185,108 TOTAL LIABILITIES $42,248,538 $61,714,086 $49,304,153 $47,559,498 $91,552,691 $109,273,584 NET ASSETS Invested in capital assets, net of related debt $203,297,293 $209,964,556 $171,827,746 $181,515,939 $375,125,039 $391,480,495 Restricted 28,578,305 42,261,663 3,555,690 3,555,690 32,133,995 45,817,353 Unrestricted 29,272,573 29,340,290 21,541,563 19,357,695 50,814,136 48,697,985 TOTAL NET ASSETS $261,148,171 $281,566,509 $196,924,999 $204,429,324 $458,073,170 $485,995,833 The majority of the City’s net assets (81%) are investments in capital assets (e.g., streets, drainage, construction in progress, buildings, equipment, water and sewer pipes) less any related outstanding debt used to acquire these assets. The City’s capital assets are used to provide services to citizens. It should be noted that although the investment in capital assets is reported net of related debt, resources needed to repay this debt must be provided from other sources since the capital assets themselves cannot be used to liquidate these liabilities. Investments in capital assets net of related debt increased from 2005 to 2006 by $16.4 million. In 2006, the City issued $17,980,000 Limited Tax obligation bonds. The proceeds of the bonds were used to finance the construction of South Lake Washington infrastructure improvements. Chart 1 CATEGORIES OF NET ASSETS $0 $75,000,000 $150,000,000 $225,000,000 $300,000,000 $375,000,000 $450,000,000 $525,000,000 20 0 5 Go v e r n m e n t a l Ac t i v i t i e s 20 0 6 Go v e r n m e n t a l Ac t i v i t i e s 20 0 5 B u s i n e s s Ty p e Ac t i v i t i e s 20 0 6 B u s i n e s s Ty p e Ac t i v i t i e s 20 0 5 T o t a l Pr i m a r y Go v e r n m e n t 20 0 6 T o t a l Pr i m a r y Go v e r n m e n t Unrestricted Restricted Invested in capital assets 2006 Comprehensive Annual Financial Report City of Renton, Washington 3-8 Management’s Discussion and Analysis Restricted assets, representing resources that are subject to external restrictions on how they may be used, equate to nine percent (9%) of total net assets, up from seven percent (7%) in 2005. The remaining balance (unrestricted net assets) of $48.7 million may be used to meet the City’s ongoing obligations. Chart 1 provides a graphical comparison of the three categories of net assets for 2005 and 2006. As of December 31, 2006, the City reports positive balances in all three categories of net assets, for the government as a whole, as well as for separate governmental and business-type activities. Statement of Change in Net Assets The City’s total net assets (before prior period adjustments and changes in accounting principles) increased in 2006 by $27.9 million. Governmental activities generated seventy percent (73%) of this total or $20.4 million, while business-type activities generated $7.5 million of this total. Chart 2 below illustrates the various sources and amounts of revenue received by the government as a whole. Table 2 follows the chart. This is a condensed version of the Statement of Activities for the City. Comparable data is available and provided in the 2006 Annual Report. Chart 2 2006 TOTAL REVENUES BY SOURCE Property Taxes 15% Sales Taxes 13% Excise Taxes 5% Interest/Investment earnings 3% Operating Grants & Contributions 3% Capital Grants/Contribution 8% Charges for Services 45% Business Taxes 7% Miscellaneous 1% 2006 Comprehensive Annual Financial Report City of Renton, Washington Management’s Discussion and Analysis 3-9 Table 2 CHANGE OF NET ASSETS Governmental Activities 2005 Governmental Activities 2006 Business-Type Activities 2005 Business-Type Activities 2006 Total Primary Government 2005 Total Primary Government 2006 REVENUES: Program revenues: Charges for services $27,101,167 $31,340,523 $40,029,830 $40,056,079 $67,130,997 $71,396,602 Operating grants & contributions 4,979,601 4,596,836 196,974 77,688 5,176,575 4,674,524 Capital grants & contributions 1,227,503 5,909,870 5,101,699 6,317,203 6,329,202 12,227,073 GENERAL REVENUES: Property taxes 21,523,818 23,600,131 21,523,818 23,600,131 Sales taxes 18,910,823 20,869,595 18,910,823 20,869,595 Business taxes 10,643,068 11,219,303 10,643,068 11,219,303 Other taxes 6,938,265 7,718,945 6,938,265 7,718,945 Penalties and interest 49 3,799 49 3,799 Interest and investment earnings 1,449,001 3,251,975 458,797 881,486 1,907,798 4,133,461 Miscellaneous 1,958,217 689,243 639,646 282,808 2,597,863 972,051 TOTAL REVENUES $94,731,512 $109,200,220 $46,426,946 $47,615,264 $141,158,458 $156,815,484 PROGRAM EXPENSES GOVERNMENTAL ACTIVITIES: General government services $21,137,856 $19,977,086 $21,137,856 $19,977,086 Judicial 1,380,816 1,434,134 1,380,816 1,434,134 Security of persons and property 29,496,791 30,749,762 29,496,791 30,749,762 Physical environment 2,208,340 2,618,832 2,208,340 2,618,832 Transportation 4,183,880 15,798,138 4,183,880 15,798,138 Economic environment 5,899,796 6,372,118 5,899,796 6,372,118 Mental and physical health 300,171 295,072 300,171 295,072 Culture and recreation 9,744,692 9,695,924 9,744,692 9,695,924 Interest on long-term debt 1,710,346 1,772,370 1,710,346 1,772,370 Business-type activities Water $25,884,227 $27,220,132 25,884,227 27,220,132 Airport 1,226,810 1,196,363 1,226,810 1,196,363 Solid waste 9,327,525 9,706,016 9,327,525 9,706,016 Golf 2,132,077 2,056,874 2,132,077 2,056,874 TOTAL EXPENSES $76,062,688 $88,713,436 $38,570,639 $40,179,385 $114,633,327 $128,892,821 Increase in net assets before transfers $18,668,824 $20,486,784 $7,856,307 $7,435,879 $26,525,131 $27,922,663 Transfers (9,300) (68,446) $9,300 $68,446 0 0 Increase in net assets 18,659,524 20,418,338 7,865,607 7,504,325 26,525,131 27,922,663 Net Assets - beginning 242,488,646 261,148,171 189,059,392 196,924,999 431,548,038 458,073,170 Net Assets -ending $261,148,171 $281,566,509 $196,924,999 $204,429,324 $458,073,170 $485,995,833 Seventy percent (70%) of the City of Renton’s total revenue activities are for general governmental activities such as providing police, fire, parks, libraries, recreational, building safety, and planning services. The largest business type activities include water, sewer, surface water, solid waste, and golf activities. Governmental Activities Analysis Governmental activities cost a total of $89 million in 2006, up $12.6 million from 2005. Of this amount, $42 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 Chart 3 2006 COMPARISON OF TOTAL GOVERNMENTAL vs BUSINESS TYPE EXPENSES Governmental Activities 69% Business Type Activities 31% 2006 Comprehensive Annual Financial Report City of Renton, Washington 3-10 Management’s Discussion and Analysis and contribution. The net expense (total expenses less program revenues) of $47 million was the cost of governmental services City taxpayers primarily paid through various taxes. Chart 4 portrays the cost of each of the City’s major governmental programs along with each program’s generated revenues (fees and intergovernmental revenues specifically related to that program.) Chart 4 GOVERNMENTAL ACTIVITIES PROGRAM REVENUES AND EXPENSES 2005 vs 2006 -$1,500,000 $3,000,000 $7,500,000 $12,000,000 $16,500,000 $21,000,000 $25,500,000 $30,000,000 2 0 0 5 G e n e r a l G o v t 2 0 0 6 G e n e r a l G o v t 2 0 0 5 J u d i c i a l 2 0 0 6 J u d i c i a l 2 0 0 5 S e c u r i t y o f P e r s o n s a n d P r o p e r t y 2 0 0 6 S e c u r i t y o f P e r s o n s a n d P r o p e r t y 2 0 0 5 P h y s i c a l E n v i r o n m e n t 2 0 0 6 P h y s i c a l E n v i r o n m e n t 2 0 0 5 T r a n s p o r t a t i o n 2 0 0 6 T r a n s p o r t a t i o n 2 0 0 5 E c o n o m i c E n v i r o n m e n t 2 0 0 6 E c o n o m i c E n v i r o n m e n t 2 0 0 5 M e n t a l a n d P h y s i c a l H e a l t h 2 0 0 6 M e n t a l a n d P h y s i c a l H e a l t h 2 0 0 5 C u l t u r e a n d R e c r e a t i o n 2 0 0 6 C u l t u r e a n d R e c r e a t i o n 2 0 0 5 I n t e r e s t o n D e b t 2 0 0 6 I n t e r e s t o n D e b t Expenses Revenues Chart 5 depicts the sources of revenues that fund governmental activities. Approximately fifty- seven percent (57%) is from various taxes. Charges for services, grants, and interest earnings generate forty-two percent (42%) of total revenue for general governmental activities. 2006 Comprehensive Annual Financial Report City of Renton, Washington Management’s Discussion and Analysis 3-11 Chart 5 GOVERNMENTAL ACTIVITIES REVENUES BY SOURCE Property Taxes 21% Capital Grants 5%Operating Grants 4% Charges for Services 30% Excise Taxes 7%Interest Earnings 3% Miscellaneous 1% Business Taxes 10% Retail Sales Ta 19% Business-Type Activities Analysis Charts 6 and 7 present the same information on business-type activities as illustrated for general governmental type activities. Chart 6 shows the expense of each of the City’s business-type programs along with each program’s generated revenues (fees and intergovernmental revenues specifically related to that program.) Chart 6 BUSINESS TYPE ACTIVITIES PROGRAM REVENUES AND EXPENSES $0 $5,000,000 $10,000,000 $15,000,000 $20,000,000 $25,000,000 $30,000,000 $35,000,000 2005 Waterworks 2006 Waterworks 2005 Airport 2006 Airport 2005 Solid Waste 2006 Solid Waste 2005 Golf Course 2006 Golf Course Expenses Revenues The Waterworks Utility had a positive net change of $6.8 million at the end of 2006 compared to $7.4 million in 2005. The City generated $34 million in various fees for services and other sources from waterworks activities above the $27.2 million in expenses. 2006 Comprehensive Annual Financial Report City of Renton, Washington 3-12 Management’s Discussion and Analysis The Airport’s total expenses were $1.2 million. Grant revenues for 2006 were $282,130 with total revenues of $1.2 million. The Solid Waste Utility’s revenues were $9.9 million generated from fees for services and $76,293 in grants. The total expenses were $9.7 million. The Golf Course generated a total of $2.3 million in green fees, driving range charges, and other user fees. The total expenses for the Golf Course were $2.1 million. Thus, the Golf Course generated a net asset change of $291,908 for the year. Business-type activities are supported primarily from charges for services. In the City of Renton, $40 million was generated from charges for services in the business-type activities. These comprise eighty-four percent (84%) of the total financial support for these activities. Grant revenues increased 20.6% or $1.1 million from 2005 to 2006. Chart 7 BUSINESS TYPE ACTIVITIES REVENUES BY SOURCES Charges for Services 84% Grants 13% Interest & Miscellaneous 3% 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 $60 million, an increase of $17 million in comparison to last year. Approximately 8% constitutes unreserved, undesignated fund balance, which is available for spending at the government’s discretion. The remainder of the fund balance is reserved or designated to indicate that it is not available for new spending because it has already been committed for operating reserves. The General Fund is the chief operating fund of the City. At the end of the current year, unreserved, undesignated fund balance of the general fund was $4.9 million, while total fund balance reached $10.7 million. The fund balance total increased 1.5 million during the fiscal year. Transfers to other funds decreased by $2.6 million in 2007, significantly contributing to this increase. The Parks Fund at year-end had an unreserved, designated fund balance of $1,285,989. The overall fund balance increased $448,175 over the prior year. The Parks Fund received $1.3 million more in 2006 Comprehensive Annual Financial Report City of Renton, Washington Management’s Discussion and Analysis 3-13 property taxes to help offset the increase in expenditures in the fund for culture and recreation programs. The Municipal Fund was a new major fund in 2007. An increase in revenues of $2.3 in property taxes, as well as increased interest earnings helped contribute toward the overall fund balance increase of 1.9 million. A total of $1.1 million was spent on the Heather Downs. Proprietary Funds Analysis The fund financial statements for the proprietary funds are presented in more detail, but essentially provide the same type of information found in the business-type activities in the government-wide financial statements. Unrestricted net assets in the Waterworks Utility Fund and the Solid Waste Fund were $15 million and $2.5 million respectively. This represents a decrease in Waterworks Utility Fund of $460,600 and an increase in the Solid Waste Fund of $351,483 in unrestricted net assets. Total Net Assets increase in both funds $6.7 million and $347,544 respectfully. Other factors concerning the finances of these two funds have already been addressed in the discussion of business-type activities. CAPITAL ASSET AND DEBT ADMINISTRATION Capital Assets The City of Renton’s investment in capital assets, including construction in progress, for its governmental and business-type activities as of December 31, 2006, amounts to $478.4 million as presented on the following table. Table 3 CAPITAL ASSETS (Net of Accumulated Depreciation) Governmental Activities Business Type Activities Total Activities 1/1/2006 12/31/2006 1/1/2006 12/31/2006 1/1/2006 12/31/2006 Land $81,997,215 $85,936,207 $6,976,321 $ 6,976,321 $88,973,536 $92,912,528 Construction in progress 15,819,455 24,371,783 2,512,285 4,126,115 18,331,740 28,497,898 Buildings and structures 55,442,027 53,544,216 11,467,501 11,131,546 66,909,528 64,675,762 Other improvements 70,441,585 77,247,581 197,274,995 201,871,536 267,716,580 279,119,117 Machinery and equipment 10,612,674 12,266,422 976,424 956,451 11,589,098 13,222,873 $234,312,956 $253,366,209 $219,207,526 $225,061,969 $453,520,482 $478,428,178 General government infrastructure includes streets, bridges, overlays, and traffic controls. More detail about the City’s Capital Assets can be found in Note 5 to the financial statements. 2006 Comprehensive Annual Financial Report City of Renton, Washington 3-14 Management’s Discussion and Analysis Debt Administration As shown in Table 4, the City’s total outstanding debt at December 31, 2006, was $96.1 million. This was a net increase (new issues less principal payments and refundings) of $14.4 million. Table 4 OUTSTANDING DEBT General Activities Business Type Activities Total Activities 1/1/2006 12/31/2006 1/1/2006 12/31/2006 1/1/2006 12/31/2006 General obligation bonds $29,107,664 $46,899,513 $29,107,664 $46,899,513 Revenue debt $35,790,000 $33,840,000 35,790,000 33,840,000 Other long term debt 11,589,783 10,692,018 11,589,789 10,692,018 Employee leave benefits 4,690,510 4,193,995 411,340 462,947 5,101,850 4,656,942 $33,798,174 $51,093,508 $47,791,123 $44,994,965 $81,589,297 $96,088,473 In 2006 the City issued $17,980,000 of Limited Tax General Obligation Bonds. The proceeds of the bonds will be used for the purpose of providing funds for construction of transportation and utility infrastructure and improvements. In addition, the City included $1,315,199 in accreted interest for the 1997 Capital Appreciation Bonds. The Water & Sewer Revenue Bond underlying ratings remain AA- at both rating agencies. More detailed information about the City’s long-term debt can be found in Note 14 to the financial statements. FUTURE YEAR’S BUDGETARY IMPACTS The City continues to benefit from progressive economic development activities allowing the City to continue to grow. • Seattle Seahawks moving their headquarters to Renton • Providence Health Systems establishing its offices in the Southgate Office Park, which will employ over 1,000 workers • The Evergreen City Ballet occupying the old McLendon building • Wizards of the Coast have relocated to new offices in Renton • The FAA expanding its facilities in Renton • The Landing project includes Fairfield Residential, a 900 apartment complex • Target will open in October of 2007 • Conner Homes has begun development of 20-acres of luxury lakefront residential property For more information regarding the factors affecting the future year’s budgetary impacts, please refer to the Transmittal Letter within this document under: Factors Affecting Financial Condition - Economic Condition and Outlook and Update from Budget Document - Outlook. 2006 Comprehensive Annual Financial Report City of Renton, Washington Management’s Discussion and Analysis 3-15 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 Mike Bailey, Finance and Information Services Administrator, 1055 South Grady Way, Renton, WA 98057 or visit our web site at www.ci.renton.wa.us. 2006 Comprehensive Annual Financial Report City of Renton, Washington 3-16 Management’s Discussion and Analysis This page is intentionally left blank. 2006 Comprehensive Annual Financial Report City of Renton, Washington GOVERNMENTAL BUSINESS-TYPE ACTIVITIES ACTIVITIES TOTAL ASSETS Cash and cash equivalents $ 32,835,943 $ 15,969,931 $ 48,805,874 Investments at fair value 38,653,773 1,420,000 40,073,773 Receivables (net of allowance for uncollectibles)13,388,628 4,800,050 18,188,678 Internal balances 2,749 (2,749) - Inventories - 318,691 318,691 Prepayments 114,038 - 114,038 Other non-current assets 4,919,252 865,242 5,784,494 Restricted assets: Cash and cash equivalents - 1,805,690 1,805,690 Investments at fair value - 1,750,000 1,750,000 Land 85,936,207 6,976,320 92,912,527 Construction in progress 24,371,783 4,126,115 28,497,898 Capital assets (net of accumulated depreciation)143,058,222 213,959,532 357,017,754 Total assets $ 343,280,595 $ 251,988,822 $ 595,269,417 LIABILITIES Accounts payable and other liabilities $ 9,711,138 $ 2,170,529 $ 11,881,667 Interest payable 190,550 174,904 365,454 Unamortized (discount)/premium 648,229 (120,748) 527,481 Unearned revenue 70,661 339,845 410,506 Non-current liabilities: Due within one year 3,994,780 3,024,159 7,018,939 Due in more than one year 47,098,728 41,970,809 89,069,537 Total liabilities $ 61,714,086 $ 47,559,498 $ 109,273,584 NET ASSETS Investment in capital assets, net of related debt $ 209,964,556 $ 181,515,939 $ 391,480,495 Restricted for: Promotional programs 988,260 - 988,260 Construction projects 41,273,403 - 41,273,403 Debt service - 3,555,690 3,555,690 Unrestricted 29,340,290 19,357,695 48,697,985 Total net assets $ 281,566,509 $ 204,429,324 $ 485,995,833 PRIMARY GOVERNMENT STATEMENT OF NET ASSETS December 31, 2006 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-1 2006 Comprehensive Annual Financial Report City of Renton, Washington GOVERNMENTAL BUSINESS-TYPE ACTIVITIES ACTIVITIES TOTAL ASSETS Cash and cash equivalents $ 32,835,943 $ 15,969,931 $ 48,805,874 Investments at fair value 38,653,773 1,420,000 40,073,773 Receivables (net of allowance for uncollectibles)13,388,628 4,800,050 18,188,678 Internal balances 2,749 (2,749) - Inventories - 318,691 318,691 Prepayments 114,038 - 114,038 Other non-current assets 4,919,252 865,242 5,784,494 Restricted assets: Cash and cash equivalents - 1,805,690 1,805,690 Investments at fair value - 1,750,000 1,750,000 Land 85,936,207 6,976,320 92,912,527 Construction in progress 24,371,783 4,126,115 28,497,898 Capital assets (net of accumulated depreciation)143,058,222 213,959,532 357,017,754 Total assets $ 343,280,595 $ 251,988,822 $ 595,269,417 LIABILITIES Accounts payable and other liabilities $ 9,711,138 $ 2,170,529 $ 11,881,667 Interest payable 190,550 174,904 365,454 Unamortized (discount)/premium 648,229 (120,748) 527,481 Unearned revenue 70,661 339,845 410,506 Non-current liabilities: Due within one year 3,994,780 3,024,159 7,018,939 Due in more than one year 47,098,728 41,970,809 89,069,537 Total liabilities $ 61,714,086 $ 47,559,498 $ 109,273,584 NET ASSETS Investment in capital assets, net of related debt $ 209,964,556 $ 181,515,939 $ 391,480,495 Restricted for: Promotional programs 988,260 - 988,260 Construction projects 41,273,403 - 41,273,403 Debt service - 3,555,690 3,555,690 Unrestricted 29,340,290 19,357,695 48,697,985 Total net assets $ 281,566,509 $ 204,429,324 $ 485,995,833 PRIMARY GOVERNMENT STATEMENT OF NET ASSETS December 31, 2006 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-1 2006 Comprehensive Annual Financial Report City of Renton, Washington OPERATING CHARGES FOR GRANTS AND CAPITAL GRANT FUNCTIONS/PROGRAMS EXPENSES SERVICES CONTRIBUTIONS & CONTRIBUTIONS Primary government: Governmental activities: General government $ 19,977,086 $ 21,852,465 $ 4,195,348 $ 18,329 Judicial 1,434,134 831,485 - - Security of persons and property 30,749,762 517,151 254,865 - Physical environment 2,618,832 400,798 - - Transportation 15,798,138 1,628,154 - 1,469,926 Economic environment 6,372,118 4,368,399 44,369 4,418,865 Mental and physical health 295,072 - 78,256 2,750 Culture and recreation 9,695,924 1,742,071 23,998 - Interest on long-term debt 1,772,370 - - - Total governmental activities $ 88,713,436 $ 31,340,523 $ 4,596,836 $ 5,909,870 Business-type activities: Waterworks utility $ 27,220,132 $ 27,036,324 $ 1,395 $ 6,035,073 Airport 1,196,363 909,425 - 282,130 Solid waste utility 9,706,016 9,837,915 76,293 - Golf course 2,056,874 2,272,415 - - Total business-type activities $ 40,179,385 $ 40,056,079 $ 77,688 $ 6,317,203 Total primary government $ 128,892,821 $ 71,396,602 $ 4,674,524 $ 12,227,073 PROGRAM REVENUES STATEMENT OF ACTIVITIES For the Year Ended December 31, 2006 Page 1 of 2 General revenues: Taxes: Property taxes Timber 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 Net assets - ending The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-2 2006 Comprehensive Annual Financial Report City of Renton, Washington OPERATING CHARGES FOR GRANTS AND CAPITAL GRANT FUNCTIONS/PROGRAMS EXPENSES SERVICES CONTRIBUTIONS & CONTRIBUTIONS Primary government: Governmental activities: General government $ 19,977,086 $ 21,852,465 $ 4,195,348 $ 18,329 Judicial 1,434,134 831,485 - - Security of persons and property 30,749,762 517,151 254,865 - Physical environment 2,618,832 400,798 - - Transportation 15,798,138 1,628,154 - 1,469,926 Economic environment 6,372,118 4,368,399 44,369 4,418,865 Mental and physical health 295,072 - 78,256 2,750 Culture and recreation 9,695,924 1,742,071 23,998 - Interest on long-term debt 1,772,370 - - - Total governmental activities $ 88,713,436 $ 31,340,523 $ 4,596,836 $ 5,909,870 Business-type activities: Waterworks utility $ 27,220,132 $ 27,036,324 $ 1,395 $ 6,035,073 Airport 1,196,363 909,425 - 282,130 Solid waste utility 9,706,016 9,837,915 76,293 - Golf course 2,056,874 2,272,415 - - Total business-type activities $ 40,179,385 $ 40,056,079 $ 77,688 $ 6,317,203 Total primary government $ 128,892,821 $ 71,396,602 $ 4,674,524 $ 12,227,073 PROGRAM REVENUES STATEMENT OF ACTIVITIES For the Year Ended December 31, 2006 Page 1 of 2 General revenues: Taxes: Property taxes Timber 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 Net assets - ending The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-2 2006 Comprehensive Annual Financial Report City of Renton, Washington GOVERNMENTAL BUSINESS-TYPE ACTIVITIES ACTIVITIES TOTAL $ 6,089,056 $ 6,089,056 (602,649) (602,649) (29,977,746) (29,977,746) (2,218,034) (2,218,034) (12,700,058) (12,700,058) 2,459,515 2,459,515 (214,066) (214,066) (7,929,855) (7,929,855) (1,772,370) (1,772,370) $ (46,866,207) $ (46,866,207) $ 5,852,660 $ 5,852,660 (4,808) (4,808) 208,192 208,192 215,541 215,541 $ 6,271,585 $ 6,271,585 $ (46,866,207) $ 6,271,585 $ (40,594,622) $ 23,600,131 $ - $ 23,600,131 - - - 20,869,595 - 20,869,595 11,219,303 - 11,219,303 7,718,945 - 7,718,945 3,799 - 3,799 3,251,975 881,486 4,133,461 689,243 282,808 972,051 (68,446) 68,446 - $ 67,284,545 $ 1,232,740 $ 68,517,285 $ 20,418,338 $ 7,504,325 $ 27,922,663 $ 261,148,171 $ 196,924,999 $ 458,073,170 $ 281,566,509 $ 204,429,324 $ 485,995,833 CHANGES IN NET ASSETS PRIMARY GOVERNMENT NET (EXPENSE) REVENUE AND Page 2 of 2 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-3 2006 Comprehensive Annual Financial Report City of Renton, Washington GOVERNMENTAL BUSINESS-TYPE ACTIVITIES ACTIVITIES TOTAL $ 6,089,056 $ 6,089,056 (602,649) (602,649) (29,977,746) (29,977,746) (2,218,034) (2,218,034) (12,700,058) (12,700,058) 2,459,515 2,459,515 (214,066) (214,066) (7,929,855) (7,929,855) (1,772,370) (1,772,370) $ (46,866,207) $ (46,866,207) $ 5,852,660 $ 5,852,660 (4,808) (4,808) 208,192 208,192 215,541 215,541 $ 6,271,585 $ 6,271,585 $ (46,866,207) $ 6,271,585 $ (40,594,622) $ 23,600,131 $ - $ 23,600,131 - - - 20,869,595 - 20,869,595 11,219,303 - 11,219,303 7,718,945 - 7,718,945 3,799 - 3,799 3,251,975 881,486 4,133,461 689,243 282,808 972,051 (68,446) 68,446 - $ 67,284,545 $ 1,232,740 $ 68,517,285 $ 20,418,338 $ 7,504,325 $ 27,922,663 $ 261,148,171 $ 196,924,999 $ 458,073,170 $ 281,566,509 $ 204,429,324 $ 485,995,833 CHANGES IN NET ASSETS PRIMARY GOVERNMENT NET (EXPENSE) REVENUE AND Page 2 of 2 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-3 2006 Comprehensive Annual Financial Report City of Renton, Washington MUNICIPAL FACILITIES GENERAL PARKS CIP ASSETS Cash & cash equivalents $ 5,333,644 $ 1,368,825 $ 4,027,976 Investments 3,000,000 - 10,750,000 Receivables (net of allowances) Taxes 414,752 - 472,947 Customer accounts 1,294,924 425,984 - Accrued interest & penalty 99,201 - 311,332 Due from other funds 330 - - Due from other governmental units 4,296,279 58,924 11,792 Prepayments 8,000 - - Restricted assets: Advances due from other funds - - 63,900 TOTAL ASSETS $ 14,447,130 $ 1,853,733 $ 15,637,947 BALANCE SHEET GOVERNMENTAL FUNDS December 31, 2006 Page 1 of 4 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-4 2006 Comprehensive Annual Financial Report City of Renton, Washington MUNICIPAL FACILITIES GENERAL PARKS CIP ASSETS Cash & cash equivalents $ 5,333,644 $ 1,368,825 $ 4,027,976 Investments 3,000,000 - 10,750,000 Receivables (net of allowances) Taxes 414,752 - 472,947 Customer accounts 1,294,924 425,984 - Accrued interest & penalty 99,201 - 311,332 Due from other funds 330 - - Due from other governmental units 4,296,279 58,924 11,792 Prepayments 8,000 - - Restricted assets: Advances due from other funds - - 63,900 TOTAL ASSETS $ 14,447,130 $ 1,853,733 $ 15,637,947 BALANCE SHEET GOVERNMENTAL FUNDS December 31, 2006 Page 1 of 4 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-4 2006 Comprehensive Annual Financial Report City of Renton, Washington OTHER TOTAL GOVERNMENTAL GOVERNMENTAL FUNDS FUNDS ASSETS Cash & cash equivalents $ 13,833,927 $ 24,564,372 Investments 15,373,773 29,123,773 Receivables (net of allowances) Taxes 485,536 1,373,235 Customer accounts 679,388 2,400,296 Accrued interest & penalty 449,220 859,753 Due from other funds 62,898 63,228 Due from other governmental units 4,114,926 8,481,921 Prepayments - 8,000 Restricted assets: Advances due from other funds - 63,900 TOTAL ASSETS $ 34,999,668 $ 66,938,478 BALANCE SHEET GOVERNMENTAL FUNDS December 31, 2006 Page 2 of 4 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-5 2006 Comprehensive Annual Financial Report City of Renton, Washington OTHER TOTAL GOVERNMENTAL GOVERNMENTAL FUNDS FUNDS ASSETS Cash & cash equivalents $ 13,833,927 $ 24,564,372 Investments 15,373,773 29,123,773 Receivables (net of allowances) Taxes 485,536 1,373,235 Customer accounts 679,388 2,400,296 Accrued interest & penalty 449,220 859,753 Due from other funds 62,898 63,228 Due from other governmental units 4,114,926 8,481,921 Prepayments - 8,000 Restricted assets: Advances due from other funds - 63,900 TOTAL ASSETS $ 34,999,668 $ 66,938,478 BALANCE SHEET GOVERNMENTAL FUNDS December 31, 2006 Page 2 of 4 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-5 2006 Comprehensive Annual Financial Report City of Renton, Washington MUNICIPAL FACILITIES GENERAL PARKS CIP LIABILITIES AND FUND BALANCES Liabilities Accounts payable $ 849,363 $ 178,340 $ 145,551 Taxes payable 10,567 4,494 - Retainage payable - 367 34,383 Due to other funds 15,000 - - Custodial accounts 69,707 39,500 - Deposits 34,739 - - Deferred revenue 803,681 5,687 - Accrued employee wages and leave payable 1,918,976 339,356 - Interfund advances - non-current - - - Total liabilities $ 3,702,033 $ 567,744 $ 179,934 Fund balances Reserved for: Advances to other funds $- $ - $ 63,900 Prepaid items 8,000 - - Unreserved, designated for: General fund contingency 5,761,257 - - Special revenue funds contingency - 949,909 - Special revenue funds - 336,080 - Capital project fund - - 15,394,113 Unreserved reported in: General fund 4,975,840 - - Total fund balances $ 10,745,097 $ 1,285,989 $ 15,458,013 TOTAL LIABILITIES AND FUND BALANCES $ 14,447,130 $ 1,853,733 $ 15,637,947 BALANCE SHEET GOVERNMENTAL FUNDS December 31, 2006 Page 3 of 4 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-6 2006 Comprehensive Annual Financial Report City of Renton, Washington MUNICIPAL FACILITIES GENERAL PARKS CIP LIABILITIES AND FUND BALANCES Liabilities Accounts payable $ 849,363 $ 178,340 $ 145,551 Taxes payable 10,567 4,494 - Retainage payable - 367 34,383 Due to other funds 15,000 - - Custodial accounts 69,707 39,500 - Deposits 34,739 - - Deferred revenue 803,681 5,687 - Accrued employee wages and leave payable 1,918,976 339,356 - Interfund advances - non-current - - - Total liabilities $ 3,702,033 $ 567,744 $ 179,934 Fund balances Reserved for: Advances to other funds $- $ - $ 63,900 Prepaid items 8,000 - - Unreserved, designated for: General fund contingency 5,761,257 - - Special revenue funds contingency - 949,909 - Special revenue funds - 336,080 - Capital project fund - - 15,394,113 Unreserved reported in: General fund 4,975,840 - - Total fund balances $ 10,745,097 $ 1,285,989 $ 15,458,013 TOTAL LIABILITIES AND FUND BALANCES $ 14,447,130 $ 1,853,733 $ 15,637,947 BALANCE SHEET GOVERNMENTAL FUNDS December 31, 2006 Page 3 of 4 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-6 2006 Comprehensive Annual Financial Report City of Renton, Washington OTHER TOTAL GOVERNMENTAL GOVERNMENTAL FUNDS FUNDS LIABILITIES AND FUND BALANCES Liabilities Accounts payable $ 1,469,163 $ 2,642,417 Taxes payable 1,991 17,052 Retainage payable 308,530 343,280 Due to other funds 37,624 52,624 Custodial accounts - 109,207 Deposits 32,981 67,720 Deferred revenue 7,404 816,772 Accrued employee wages and leave payable 293,964 2,552,296 Interfund advances - non-current 63,900 63,900 Total liabilities $ 2,215,557 $ 6,665,268 Fund balances Reserved for: Advances to other funds $- $ 63,900 Prepaid items - 8,000 Unreserved, designated for: General fund contingency - 5,761,257 Special revenue funds contingency 941,029 1,890,938 Special revenue funds 2,016,171 2,352,251 Capital project fund 26,758,324 42,152,437 Debt service funds 3,068,587 3,068,587 Unreserved reported in: General fund - 4,975,840 Total fund balances $ 32,784,111 $ 60,273,210 TOTAL LIABILITIES AND FUND BALANCES $ 34,999,668 $ 66,938,478 Page 4 of 4 BALANCE SHEET GOVERNMENTAL FUNDS December 31, 2006 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-7 2006 Comprehensive Annual Financial Report City of Renton, Washington OTHER TOTAL GOVERNMENTAL GOVERNMENTAL FUNDS FUNDS LIABILITIES AND FUND BALANCES Liabilities Accounts payable $ 1,469,163 $ 2,642,417 Taxes payable 1,991 17,052 Retainage payable 308,530 343,280 Due to other funds 37,624 52,624 Custodial accounts - 109,207 Deposits 32,981 67,720 Deferred revenue 7,404 816,772 Accrued employee wages and leave payable 293,964 2,552,296 Interfund advances - non-current 63,900 63,900 Total liabilities $ 2,215,557 $ 6,665,268 Fund balances Reserved for: Advances to other funds $- $ 63,900 Prepaid items - 8,000 Unreserved, designated for: General fund contingency - 5,761,257 Special revenue funds contingency 941,029 1,890,938 Special revenue funds 2,016,171 2,352,251 Capital project fund 26,758,324 42,152,437 Debt service funds 3,068,587 3,068,587 Unreserved reported in: General fund - 4,975,840 Total fund balances $ 32,784,111 $ 60,273,210 TOTAL LIABILITIES AND FUND BALANCES $ 34,999,668 $ 66,938,478 Page 4 of 4 BALANCE SHEET GOVERNMENTAL FUNDS December 31, 2006 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-7 2006 Comprehensive Annual Financial Report City of Renton, Washington FUND BALANCES - TOTAL GOVERNMENTAL FUNDS $ 60,273,210 Amounts reported for governmental activities in the statement of net assets are different because: Capital assets used in governmental activities are not financial resources and therefore are not reported in the governmental funds. Capital assets (net) and other non-current assets.$ 258,285,461 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 $ 746,111 Long-term liabilities, including bonds payable are not due and payable in the current period and therefore are not reported in the governmental funds Interest payable $ (199,806) Long-term liabilities (51,595,172) 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 capital assets reported above.$ 14,056,705 NET ASSETS OF GOVERNMENTAL ACTIVITIES $ 281,566,509 RECONCILIATION OF THE BALANCE SHEET TO THE STATEMENT OF NET ASSETS December 31, 2006 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-8 2006 Comprehensive Annual Financial Report City of Renton, Washington FUND BALANCES - TOTAL GOVERNMENTAL FUNDS $ 60,273,210 Amounts reported for governmental activities in the statement of net assets are different because: Capital assets used in governmental activities are not financial resources and therefore are not reported in the governmental funds. Capital assets (net) and other non-current assets.$ 258,285,461 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 $ 746,111 Long-term liabilities, including bonds payable are not due and payable in the current period and therefore are not reported in the governmental funds Interest payable $ (199,806) Long-term liabilities (51,595,172) 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 capital assets reported above.$ 14,056,705 NET ASSETS OF GOVERNMENTAL ACTIVITIES $ 281,566,509 RECONCILIATION OF THE BALANCE SHEET TO THE STATEMENT OF NET ASSETS December 31, 2006 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-8 2006 Comprehensive Annual Financial Report City of Renton, Washington MUNICIPAL FACILITIES GENERAL PARKS CIP REVENUES Taxes $ 39,260,540 $ 9,503,672 $ 4,514,285 Licenses and permits 3,132,587 - - Intergovernmental revenues 2,846,753 7,331 - Charges for services 2,246,722 2,272,314 - Fines and forfeits 860,819 - - Interfund revenues 1,791,180 - - Special assessments - - - Contributions 66,781 30,791 23,001 Interest 661,481 47,641 788,103 Miscellaneous revenues 215,804 6,891 - TOTAL REVENUES $ 51,082,667 $ 11,868,640 $ 5,325,389 EXPENDITURES Current: General government $ 10,698,791 $ 2,830,626 $ - Security of persons and property 31,157,303 - - Physical environment 2,609,452 - - Transportation - - - Economic environment 4,709,745 481,227 33,969 Mental & physical health 9,231 - - Culture & recreation - 8,108,612 - Capital outlay 80,343 - 2,924,322 Debt service: Principal payment - - - Interest payment - - - TOTAL EXPENDITURES $ 49,264,865 $ 11,420,465 $ 2,958,291 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES $ 1,817,802 $ 448,175 $ 2,367,098 OTHER FINANCING SOURCES (USES) Proceeds of long-term debt $- $ - $ - Transfer in - - - Transfer (out) (272,000) - (462,000) Sale of capital assets 1,424 - - TOTAL OTHER FINANCE SOURCES (USES) $ (270,576) $ - $ (462,000) NET CHANGE IN FUND BALANCE $ 1,547,226 $ 448,175 $ 1,905,098 FUND BALANCE JANUARY 1 9,197,871 837,814 13,552,915 FUND BALANCE DECEMBER 31 $ 10,745,097 $ 1,285,989 $ 15,458,013 Page 1 of 2 STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS For the Year Ended December 31, 2006 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-9 2006 Comprehensive Annual Financial Report City of Renton, Washington MUNICIPAL FACILITIES GENERAL PARKS CIP REVENUES Taxes $ 39,260,540 $ 9,503,672 $ 4,514,285 Licenses and permits 3,132,587 - - Intergovernmental revenues 2,846,753 7,331 - Charges for services 2,246,722 2,272,314 - Fines and forfeits 860,819 - - Interfund revenues 1,791,180 - - Special assessments - - - Contributions 66,781 30,791 23,001 Interest 661,481 47,641 788,103 Miscellaneous revenues 215,804 6,891 - TOTAL REVENUES $ 51,082,667 $ 11,868,640 $ 5,325,389 EXPENDITURES Current: General government $ 10,698,791 $ 2,830,626 $ - Security of persons and property 31,157,303 - - Physical environment 2,609,452 - - Transportation - - - Economic environment 4,709,745 481,227 33,969 Mental & physical health 9,231 - - Culture & recreation - 8,108,612 - Capital outlay 80,343 - 2,924,322 Debt service: Principal payment - - - Interest payment - - - TOTAL EXPENDITURES $ 49,264,865 $ 11,420,465 $ 2,958,291 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES $ 1,817,802 $ 448,175 $ 2,367,098 OTHER FINANCING SOURCES (USES) Proceeds of long-term debt $- $ - $ - Transfer in - - - Transfer (out) (272,000) - (462,000) Sale of capital assets 1,424 - - TOTAL OTHER FINANCE SOURCES (USES) $ (270,576) $ - $ (462,000) NET CHANGE IN FUND BALANCE $ 1,547,226 $ 448,175 $ 1,905,098 FUND BALANCE JANUARY 1 9,197,871 837,814 13,552,915 FUND BALANCE DECEMBER 31 $ 10,745,097 $ 1,285,989 $ 15,458,013 Page 1 of 2 STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS For the Year Ended December 31, 2006 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-9 2006 Comprehensive Annual Financial Report City of Renton, Washington OTHER TOTAL GOVERNMENTAL GOVERNMENTAL FUNDS FUNDS REVENUES Taxes $ 10,727,070 $ 64,005,567 Licenses and permits 1,829,920 4,962,507 Intergovernmental revenues 6,915,141 9,769,225 Charges for services 2,024,253 6,543,289 Fines and forfeits 45,866 906,685 Interfund revenues 1,051,967 2,843,147 Special assessments 511,932 511,932 Contributions 93,814 214,387 Interest 1,073,457 2,570,682 Miscellaneous revenues 1,213 223,908 TOTAL REVENUES $ 24,274,633 $ 92,551,329 EXPENDITURES Current: General government $ 443,175 $ 13,972,592 Security of persons and property - 31,157,303 Physical environment - 2,609,452 Transportation 5,097,449 5,097,449 Economic environment 294,278 5,519,219 Mental & physical health - 9,231 Culture & recreation 1,825,242 9,933,854 Capital outlay 18,112,860 21,117,525 Debt service: Principal payment 1,503,350 1,503,350 Interest payment 2,129,656 2,129,656 TOTAL EXPENDITURES $ 29,406,010 $ 93,049,631 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES $ (5,131,377) $ (498,302) OTHER FINANCING SOURCES (USES) Proceeds of long-term debt $ 18,490,029 $ 18,490,029 Transfer in 2,962,895 2,962,895 Transfer (out) (2,971,341) (3,705,341) Sale of capital assets 12,040 13,464 TOTAL OTHER FINANCE SOURCES (USES) $ 18,493,623 $ 17,761,047 NET CHANGE IN FUND BALANCE $ 13,362,246 $ 17,262,745 FUND BALANCE JANUARY 1 19,421,865 43,010,465 FUND BALANCE DECEMBER 31 $ 32,784,111 $ 60,273,210 Page 2 of 2 GOVERNMENTAL FUNDS For the Year Ended December 31, 2006 STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-10 2006 Comprehensive Annual Financial Report City of Renton, Washington OTHER TOTAL GOVERNMENTAL GOVERNMENTAL FUNDS FUNDS REVENUES Taxes $ 10,727,070 $ 64,005,567 Licenses and permits 1,829,920 4,962,507 Intergovernmental revenues 6,915,141 9,769,225 Charges for services 2,024,253 6,543,289 Fines and forfeits 45,866 906,685 Interfund revenues 1,051,967 2,843,147 Special assessments 511,932 511,932 Contributions 93,814 214,387 Interest 1,073,457 2,570,682 Miscellaneous revenues 1,213 223,908 TOTAL REVENUES $ 24,274,633 $ 92,551,329 EXPENDITURES Current: General government $ 443,175 $ 13,972,592 Security of persons and property - 31,157,303 Physical environment - 2,609,452 Transportation 5,097,449 5,097,449 Economic environment 294,278 5,519,219 Mental & physical health - 9,231 Culture & recreation 1,825,242 9,933,854 Capital outlay 18,112,860 21,117,525 Debt service: Principal payment 1,503,350 1,503,350 Interest payment 2,129,656 2,129,656 TOTAL EXPENDITURES $ 29,406,010 $ 93,049,631 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES $ (5,131,377) $ (498,302) OTHER FINANCING SOURCES (USES) Proceeds of long-term debt $ 18,490,029 $ 18,490,029 Transfer in 2,962,895 2,962,895 Transfer (out) (2,971,341) (3,705,341) Sale of capital assets 12,040 13,464 TOTAL OTHER FINANCE SOURCES (USES) $ 18,493,623 $ 17,761,047 NET CHANGE IN FUND BALANCE $ 13,362,246 $ 17,262,745 FUND BALANCE JANUARY 1 19,421,865 43,010,465 FUND BALANCE DECEMBER 31 $ 32,784,111 $ 60,273,210 Page 2 of 2 GOVERNMENTAL FUNDS For the Year Ended December 31, 2006 STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-10 2006 Comprehensive Annual Financial Report City of Renton, Washington NET CHANGES IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS $ 17,262,745 Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures; however, in the statement of activities, the cost of those assets are depreciated over their estimated useful lives. Expenditures for capital assets $ 25,035,636 Less current year depreciation (6,671,845) Repayment of long-term debt is an expenditure in governmen- tal funds, but the repayment reduces long-term liabilities in the statement of net assets. Loan or bond proceeds provide current financial resources to governmental funds, but the repayment reduces long-term liabilities in the statement of net assets. Principal payments $ 1,503,350 Some revenues or expenditures reported in the statement of activities are not yet available or expensed and therefore are not reported as revenue or expenses in governmental funds $ (19,299,349) Net Pension Obligation over funded / (under funded)773,166 Internal service funds or activities are used by management to charge the costs of certain activities to individual funds. The net (expense) of the internal service fund and internal balances reported with governmental activities.$ 1,814,635 CHANGES IN NET ASSETS OF GOVERNMENTAL ACTIVITIES $ 20,418,338 For the Year Ended December 31, 2006 RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES GOVERNMENTAL FUNDS The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-11 2006 Comprehensive Annual Financial Report City of Renton, Washington NET CHANGES IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS $ 17,262,745 Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures; however, in the statement of activities, the cost of those assets are depreciated over their estimated useful lives. Expenditures for capital assets $ 25,035,636 Less current year depreciation (6,671,845) Repayment of long-term debt is an expenditure in governmen- tal funds, but the repayment reduces long-term liabilities in the statement of net assets. Loan or bond proceeds provide current financial resources to governmental funds, but the repayment reduces long-term liabilities in the statement of net assets. Principal payments $ 1,503,350 Some revenues or expenditures reported in the statement of activities are not yet available or expensed and therefore are not reported as revenue or expenses in governmental funds $ (19,299,349) Net Pension Obligation over funded / (under funded)773,166 Internal service funds or activities are used by management to charge the costs of certain activities to individual funds. The net (expense) of the internal service fund and internal balances reported with governmental activities.$ 1,814,635 CHANGES IN NET ASSETS OF GOVERNMENTAL ACTIVITIES $ 20,418,338 For the Year Ended December 31, 2006 RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES GOVERNMENTAL FUNDS The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-11 2006 Comprehensive Annual Financial Report City of Renton, Washington GOVERNMENTAL OTHER TOTAL ACTIVITIES WATERWORKS ENTERPRISE ENTERPRISE INTERNAL SERVICE UTILITY SOLID WASTE FUNDS FUNDS FUNDS ASSETS Current assets: Cash & cash equivalents $ 12,479,315 $ 1,576,549 $ 1,914,067 $ 15,969,931 $ 8,271,571 Investments at fair value 520,000 150,000 750,000 1,420,000 9,530,000 Receivables (net of allowances): Customer accounts 3,165,593 1,132,065 45,529 4,343,187 30,519 Special assessments - current 33,894 - - 33,894 - Interest - investments 57,792 3,062 12,400 73,254 241,027 Due from other funds 56,328 - - 56,328 - Due from other governmental units 197,446 101,930 50,339 349,715 1,876 Inventory of materials and supplies 271,754 - 46,937 318,691 - Prepayments - - - - 106,038 Total current assets $ 16,782,122 $ 2,963,606 $ 2,819,272 $ 22,565,000 $ 18,181,031 Noncurrent assets: Restricted cash, cash equivalents, and investments at fair value $ 3,114,332 $ - $ 441,358 $ 3,555,690 $ - Special assessments deferred 62,966 - - 62,966 - Capital assets (net)205,585,486 1,313 19,475,168 225,061,967 5,317,155 Deferred charges and other assets 761,729 - 40,547 802,276 - Total noncurrent assets 209,524,513 1,313 19,957,073 229,482,899 5,317,155 TOTAL ASSETS $ 226,306,635 $ 2,964,919 $ 22,776,345 $ 252,047,899 $ 23,498,186 BUSINESS-TYPE ACTIVITIES ENTERPRISE FUNDS STATEMENT OF NET ASSETS PROPRIETARY FUNDS December 31, 2006 Page 1 of 2 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-12 2006 Comprehensive Annual Financial Report City of Renton, Washington GOVERNMENTAL OTHER TOTAL ACTIVITIES WATERWORKS ENTERPRISE ENTERPRISE INTERNAL SERVICE UTILITY SOLID WASTE FUNDS FUNDS FUNDS ASSETS Current assets: Cash & cash equivalents $ 12,479,315 $ 1,576,549 $ 1,914,067 $ 15,969,931 $ 8,271,571 Investments at fair value 520,000 150,000 750,000 1,420,000 9,530,000 Receivables (net of allowances): Customer accounts 3,165,593 1,132,065 45,529 4,343,187 30,519 Special assessments - current 33,894 - - 33,894 - Interest - investments 57,792 3,062 12,400 73,254 241,027 Due from other funds 56,328 - - 56,328 - Due from other governmental units 197,446 101,930 50,339 349,715 1,876 Inventory of materials and supplies 271,754 - 46,937 318,691 - Prepayments - - - - 106,038 Total current assets $ 16,782,122 $ 2,963,606 $ 2,819,272 $ 22,565,000 $ 18,181,031 Noncurrent assets: Restricted cash, cash equivalents, and investments at fair value $ 3,114,332 $ - $ 441,358 $ 3,555,690 $ - Special assessments deferred 62,966 - - 62,966 - Capital assets (net)205,585,486 1,313 19,475,168 225,061,967 5,317,155 Deferred charges and other assets 761,729 - 40,547 802,276 - Total noncurrent assets 209,524,513 1,313 19,957,073 229,482,899 5,317,155 TOTAL ASSETS $ 226,306,635 $ 2,964,919 $ 22,776,345 $ 252,047,899 $ 23,498,186 BUSINESS-TYPE ACTIVITIES ENTERPRISE FUNDS STATEMENT OF NET ASSETS PROPRIETARY FUNDS December 31, 2006 Page 1 of 2 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-12 2006 Comprehensive Annual Financial Report City of Renton, Washington GOVERNMENTAL OTHER TOTAL ACTIVITIES WATERWORKS ENTERPRISE ENTERPRISE INTERNAL SERVICE UTILITY SOLID WASTE FUNDS FUNDS FUNDS LIABILITIES Current liabilities: Accounts payable $ 1,148,019 $ 349,787 $ 97,530 $ 1,595,336 $ 1,128,528 Retainage payable 52,481 - 41,634 94,115 - Due to other funds 50,676 - 8,400 59,076 7,855 Accrued interest payable 161,874 - 13,030 174,904 - Accrued employee wages and benefits payable 181,740 202 51,469 233,411 45,085 Accrued taxes payable 35,147 38,561 30,258 103,966 616 Custodial Accounts 37,919 - 105,783 143,702 - Deferred revenue 280,764 - 59,081 339,845 - Revenue bonds payable $ 1,740,000 $ - $ 285,000 $ 2,025,000 $ - Capital leases payable - - - - - Total current liabilities $ 3,688,620 $ 388,550 $ 692,185 $ 4,769,355 $ 1,182,084 Long-term liabilities: Revenue bonds payable $ 29,010,000 $ - $ 2,805,000 $ 31,815,000 $ - Unamortized premium on revenue bonds 468,747 - - 468,747 - Unamortized discount on revenue bonds (401,585) - (272,813) (674,398) - Deferred amount on revenue bond refunding 84,903 - - 84,903 - Accrued employee wages and benefits payable 371,552 18,179 73,217 462,948 314,460 Claims incurred but not reported - - - - 2,627,782 Public works trust fund loan payable 10,692,020 - - 10,692,020 - Total long-term liabilities $ 40,225,637 $ 18,179 $ 2,605,404 $ 42,849,220 $ 2,942,242 TOTAL LIABILITIES $ 43,914,257 $ 406,729 $ 3,297,589 $ 47,618,575 $ 4,124,326 NET ASSETS Investment in capital assets, net of related debt $ 164,143,466 $ 1,313 $ 16,385,168 $ 180,529,947 $ 5,317,155 Restricted 3,114,332 - 441,358 3,555,690 - Unrestricted 15,134,580 2,556,877 2,652,230 20,343,687 14,056,705 TOTAL NET ASSETS $ 182,392,378 $ 2,558,190 $ 19,478,756 $ 204,429,324 $ 19,373,860 BUSINESS-TYPE ACTIVITIES ENTERPRISE FUNDS STATEMENT OF NET ASSETS PROPRIETARY FUNDS December 31, 2006 Page 2 of 2 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-13 2006 Comprehensive Annual Financial Report City of Renton, Washington GOVERNMENTAL OTHER TOTAL ACTIVITIES WATERWORKS ENTERPRISE ENTERPRISE INTERNAL SERVICE UTILITY SOLID WASTE FUNDS FUNDS FUNDS LIABILITIES Current liabilities: Accounts payable $ 1,148,019 $ 349,787 $ 97,530 $ 1,595,336 $ 1,128,528 Retainage payable 52,481 - 41,634 94,115 - Due to other funds 50,676 - 8,400 59,076 7,855 Accrued interest payable 161,874 - 13,030 174,904 - Accrued employee wages and benefits payable 181,740 202 51,469 233,411 45,085 Accrued taxes payable 35,147 38,561 30,258 103,966 616 Custodial Accounts 37,919 - 105,783 143,702 - Deferred revenue 280,764 - 59,081 339,845 - Revenue bonds payable $ 1,740,000 $ - $ 285,000 $ 2,025,000 $ - Capital leases payable - - - - - Total current liabilities $ 3,688,620 $ 388,550 $ 692,185 $ 4,769,355 $ 1,182,084 Long-term liabilities: Revenue bonds payable $ 29,010,000 $ - $ 2,805,000 $ 31,815,000 $ - Unamortized premium on revenue bonds 468,747 - - 468,747 - Unamortized discount on revenue bonds (401,585) - (272,813) (674,398) - Deferred amount on revenue bond refunding 84,903 - - 84,903 - Accrued employee wages and benefits payable 371,552 18,179 73,217 462,948 314,460 Claims incurred but not reported - - - - 2,627,782 Public works trust fund loan payable 10,692,020 - - 10,692,020 - Total long-term liabilities $ 40,225,637 $ 18,179 $ 2,605,404 $ 42,849,220 $ 2,942,242 TOTAL LIABILITIES $ 43,914,257 $ 406,729 $ 3,297,589 $ 47,618,575 $ 4,124,326 NET ASSETS Investment in capital assets, net of related debt $ 164,143,466 $ 1,313 $ 16,385,168 $ 180,529,947 $ 5,317,155 Restricted 3,114,332 - 441,358 3,555,690 - Unrestricted 15,134,580 2,556,877 2,652,230 20,343,687 14,056,705 TOTAL NET ASSETS $ 182,392,378 $ 2,558,190 $ 19,478,756 $ 204,429,324 $ 19,373,860 BUSINESS-TYPE ACTIVITIES ENTERPRISE FUNDS STATEMENT OF NET ASSETS PROPRIETARY FUNDS December 31, 2006 Page 2 of 2 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-13 2006 Comprehensive Annual Financial Report City of Renton, Washington GOVERNMENTAL OTHER TOTAL ACTIVITIES WATERWORKS ENTERPRISE ENTERPRISE INTERNAL SERVICE UTILITY SOLID WASTE FUNDS FUNDS FUNDS OPERATING REVENUES: Charges for services $ 25,982,868 $ 9,904,371 $ 3,181,840 $ 39,069,079 $ 9,449,690 Interdepartmental services 712,956 3,606 - 716,562 - Other services 401,393 76,293 190 477,876 7,901,626 TOTAL OPERATING REVENUES $ 27,097,217 $ 9,984,270 $ 3,182,030 $ 40,263,517 $ 17,351,316 OPERATING EXPENSES: Operations and maintenance $ 4,899,649 $ 575,672 $ 1,490,530 $ 6,965,851 $ 1,343,695 Benefit payments 1,001,583 75,292 344,846 1,421,721 10,918,350 Professional services 264,348 7,962,741 46,738 8,273,827 657,388 Administrative and general 12,060,638 44,632 453,022 12,558,292 1,492,481 Insurance 62,400 - 25,300 87,700 2,159,518 Taxes 1,989,785 1,043,740 10,811 3,044,336 - Depreciation 5,462,690 3,939 648,595 6,115,224 876,839 TOTAL OPERATING EXPENSES $ 25,741,093 $ 9,706,016 $ 3,019,842 $ 38,466,951 $ 17,448,271 OPERATING INCOME (LOSS)$ 1,356,124 $ 278,254 $ 162,188 $ 1,796,566 $ (96,955) NON-OPERATING REVENUES(EXPENSES): Intergovernmental revenues $- $ - $ 282,130 $ 282,130 $ 11,163 Interest revenues 653,291 69,290 158,905 881,486 681,292 Gain (loss) on sale of capital assets - - 4,009 4,009 86,244 Other non-operating revenues (expenses)160,233 - 7,039 167,272 458,889 Interest expense (1,428,178) - (167,782) (1,595,960) - Amortization of debt discount and expense (50,862) - (65,613) (116,475) - NON-OPERATING REVENUE NET OF EXPENSE $ (665,516) $ 69,290 $ 218,688 $ (377,538) $ 1,237,588 INCOME (LOSS) BEFORE CONTRIBUTIONS AND TRANSFERS $ 690,608 $ 347,544 $ 380,876 $ 1,419,028 $ 1,140,633 Capital contributions 6,016,851 - - 6,016,851 - Transfers in (out)68,446 - - 68,446 674,000 CHANGE IN NET ASSETS $ 6,775,905 $ 347,544 $ 380,876 $ 7,504,325 $ 1,814,633 FUND BALANCE JANUARY 1 $ 175,616,473 $ 2,210,646 $ 19,097,880 $ 196,924,999 $ 17,559,227 NET ASSETS, DECEMBER 31 $ 182,392,378 $ 2,558,190 $ 19,478,756 $ 204,429,324 $ 19,373,860 BUSINESS-TYPE ACTIVITIES ENTERPRISE FUNDS STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS PROPRIETARY FUNDS For the Year Ended December 31, 2006 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-14 2006 Comprehensive Annual Financial Report City of Renton, Washington GOVERNMENTAL OTHER TOTAL ACTIVITIES WATERWORKS ENTERPRISE ENTERPRISE INTERNAL SERVICE UTILITY SOLID WASTE FUNDS FUNDS FUNDS OPERATING REVENUES: Charges for services $ 25,982,868 $ 9,904,371 $ 3,181,840 $ 39,069,079 $ 9,449,690 Interdepartmental services 712,956 3,606 - 716,562 - Other services 401,393 76,293 190 477,876 7,901,626 TOTAL OPERATING REVENUES $ 27,097,217 $ 9,984,270 $ 3,182,030 $ 40,263,517 $ 17,351,316 OPERATING EXPENSES: Operations and maintenance $ 4,899,649 $ 575,672 $ 1,490,530 $ 6,965,851 $ 1,343,695 Benefit payments 1,001,583 75,292 344,846 1,421,721 10,918,350 Professional services 264,348 7,962,741 46,738 8,273,827 657,388 Administrative and general 12,060,638 44,632 453,022 12,558,292 1,492,481 Insurance 62,400 - 25,300 87,700 2,159,518 Taxes 1,989,785 1,043,740 10,811 3,044,336 - Depreciation 5,462,690 3,939 648,595 6,115,224 876,839 TOTAL OPERATING EXPENSES $ 25,741,093 $ 9,706,016 $ 3,019,842 $ 38,466,951 $ 17,448,271 OPERATING INCOME (LOSS)$ 1,356,124 $ 278,254 $ 162,188 $ 1,796,566 $ (96,955) NON-OPERATING REVENUES(EXPENSES): Intergovernmental revenues $- $ - $ 282,130 $ 282,130 $ 11,163 Interest revenues 653,291 69,290 158,905 881,486 681,292 Gain (loss) on sale of capital assets - - 4,009 4,009 86,244 Other non-operating revenues (expenses)160,233 - 7,039 167,272 458,889 Interest expense (1,428,178) - (167,782) (1,595,960) - Amortization of debt discount and expense (50,862) - (65,613) (116,475) - NON-OPERATING REVENUE NET OF EXPENSE $ (665,516) $ 69,290 $ 218,688 $ (377,538) $ 1,237,588 INCOME (LOSS) BEFORE CONTRIBUTIONS AND TRANSFERS $ 690,608 $ 347,544 $ 380,876 $ 1,419,028 $ 1,140,633 Capital contributions 6,016,851 - - 6,016,851 - Transfers in (out)68,446 - - 68,446 674,000 CHANGE IN NET ASSETS $ 6,775,905 $ 347,544 $ 380,876 $ 7,504,325 $ 1,814,633 FUND BALANCE JANUARY 1 $ 175,616,473 $ 2,210,646 $ 19,097,880 $ 196,924,999 $ 17,559,227 NET ASSETS, DECEMBER 31 $ 182,392,378 $ 2,558,190 $ 19,478,756 $ 204,429,324 $ 19,373,860 BUSINESS-TYPE ACTIVITIES ENTERPRISE FUNDS STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS PROPRIETARY FUNDS For the Year Ended December 31, 2006 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-14 2006 Comprehensive Annual Financial Report City of Renton, Washington GOVERNMENTAL OTHER TOTAL ACTIVITIES WATERWORKS ENTERPRISE ENTERPRISE INTERNAL SERVICE UTILITY SOLID WASTE FUNDS FUNDS FUNDS CASH FLOWS FROM OPERATING ACTIVITIES: Cash received for services $ 28,223,157 $ 9,881,546 $ 3,304,156 $ 41,408,859 $ 17,342,303 Cash received from other funds for services 777,809 - - 777,809 - Cash paid to suppliers for goods & services (18,259,034) (9,194,176) (2,043,023) (29,496,233) (3,331,790) Cash paid to other funds for goods & services (53,189) 654 (52,535) - Cash paid to employees (968,511) (71,190) (333,350) (1,373,051) (10,440,402) Other operating receipts - (347,544) - (347,544) (1,269,500) Other non-operating receipts 160,233 - (156,734) 3,499 - NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES $ 9,880,465 $ 268,636 $ 771,703 $ 10,920,804 $ 2,300,611 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers from other funds $ 68,446 $ - $ 282,130 $ 350,576 $ 272,000 NET CASH PROVIDED (USED) BY NONCAPITAL FINANCING ACTIVITIES $ 68,446 $ - $ 282,130 $ 350,576 $ 272,000 CASH FLOWS FROM CAPITAL FINANCING ACTIVITIES: Acquisition & construction of capital assets $ (10,130,051) $ - $ (1,840,220) $ (11,970,271) $ (1,153,134) Capital contributions 6,016,851 - - 6,016,851 - Principal payments on debt (2,569,145) - (285,000) (2,854,145) - Interest payments on debt (1,431,843) - 13,965 (1,417,878) - NET CASH PROVIDED (USED) BY CAPITAL FINANCING ACTIVITIES $ (8,114,188) $ - $ (2,111,255) $ (10,225,443) $ (1,153,134) CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from sale of investments $ 2,139,475 $ - $ - $ 2,139,475 $ - Payments for investments - - 988,821 988,821 (394,871) Interest on investments - 74,013 200,146 274,159 710,153 NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES $ 2,139,475 $ 74,013 $ 1,188,967 $ 3,402,455 $ 315,282 NET INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS $ 3,974,198 $ 342,649 $ 131,545 $ 4,448,392 $ 1,734,759 CASH & CASH EQUIVALENTS, JANUARY 1 8,505,117 1,233,900 1,782,522 11,521,539 6,536,812 CASH & CASH EQUIVALENTS, DECEMBER 31 $ 12,479,315 $ 1,576,549 $ 1,914,067 $ 15,969,931 $ 8,271,571 BUSINESS-TYPE ACTIVITIES ENTERPRISE FUNDS STATEMENT OF CASH FLOWS PROPRIETARY FUNDS Page 1 of 2 For the Year Ended December 31, 2006 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-15 2006 Comprehensive Annual Financial Report City of Renton, Washington GOVERNMENTAL OTHER TOTAL ACTIVITIES WATERWORKS ENTERPRISE ENTERPRISE INTERNAL SERVICE UTILITY SOLID WASTE FUNDS FUNDS FUNDS CASH FLOWS FROM OPERATING ACTIVITIES: Cash received for services $ 28,223,157 $ 9,881,546 $ 3,304,156 $ 41,408,859 $ 17,342,303 Cash received from other funds for services 777,809 - - 777,809 - Cash paid to suppliers for goods & services (18,259,034) (9,194,176) (2,043,023) (29,496,233) (3,331,790) Cash paid to other funds for goods & services (53,189) 654 (52,535) - Cash paid to employees (968,511) (71,190) (333,350) (1,373,051) (10,440,402) Other operating receipts - (347,544) - (347,544) (1,269,500) Other non-operating receipts 160,233 - (156,734) 3,499 - NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES $ 9,880,465 $ 268,636 $ 771,703 $ 10,920,804 $ 2,300,611 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers from other funds $ 68,446 $ - $ 282,130 $ 350,576 $ 272,000 NET CASH PROVIDED (USED) BY NONCAPITAL FINANCING ACTIVITIES $ 68,446 $ - $ 282,130 $ 350,576 $ 272,000 CASH FLOWS FROM CAPITAL FINANCING ACTIVITIES: Acquisition & construction of capital assets $ (10,130,051) $ - $ (1,840,220) $ (11,970,271) $ (1,153,134) Capital contributions 6,016,851 - - 6,016,851 - Principal payments on debt (2,569,145) - (285,000) (2,854,145) - Interest payments on debt (1,431,843) - 13,965 (1,417,878) - NET CASH PROVIDED (USED) BY CAPITAL FINANCING ACTIVITIES $ (8,114,188) $ - $ (2,111,255) $ (10,225,443) $ (1,153,134) CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from sale of investments $ 2,139,475 $ - $ - $ 2,139,475 $ - Payments for investments - - 988,821 988,821 (394,871) Interest on investments - 74,013 200,146 274,159 710,153 NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES $ 2,139,475 $ 74,013 $ 1,188,967 $ 3,402,455 $ 315,282 NET INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS $ 3,974,198 $ 342,649 $ 131,545 $ 4,448,392 $ 1,734,759 CASH & CASH EQUIVALENTS, JANUARY 1 8,505,117 1,233,900 1,782,522 11,521,539 6,536,812 CASH & CASH EQUIVALENTS, DECEMBER 31 $ 12,479,315 $ 1,576,549 $ 1,914,067 $ 15,969,931 $ 8,271,571 BUSINESS-TYPE ACTIVITIES ENTERPRISE FUNDS STATEMENT OF CASH FLOWS PROPRIETARY FUNDS Page 1 of 2 For the Year Ended December 31, 2006 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-15 2006 Comprehensive Annual Financial Report City of Renton, Washington GOVERNMENTAL ACTIVITIES OTHER TOTAL INTERNAL WATERWORKS SOLID ENTERPRISE ENTERPRISE SERVICE UTILITY WASTE FUNDS FUNDS FUNDS RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES: Operating income (loss)$ 1,356,124 $ 278,254 $ 162,188 $ 1,796,566 $ (96,955) Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation & amortization of deferred charges $ 5,462,690 $ 3,939 $ 648,595 $ 6,115,224 $ 876,839 Other non-operating revenue 160,233 - (156,734) 3,499 545,133 (Increase) decrease in accounts receivable 1,838,896 (102,724) 152,535 1,888,707 (9,013) (Increase) decrease in due from other funds/governmental units 64,853 65,853 (42,633) 88,073 4,849 (Increase) decrease in inventory & prepaid items 29,758 - 6,164 35,922 (10,922) Increase (decrease) in vouchers retainage payable (19,971) 19,526 (16,017) (16,462) 495,371 Increase (decrease) in due to other governmental units (53,189) - 654 (52,535) - Increase (decrease) in payables & other short-term liabilities 866,040 (314) (1,606) 864,120 6,439 Increase (decrease) in customer deposits - - 16,692 16,692 - Increase (decrease) in deferred revenues 141,959 - (9,631) 132,328 - Increase (decrease) in accrued employee leave benefits 33,072 4,102 11,496 48,670 488,870 Total adjustments $ 8,524,341 $ (9,618) - 609,515$ $ 9,124,238 $ 2,397,566 NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES $ 9,880,465 $ 268,636 $ 771,703 $ 10,920,804 $ 2,300,611 NONCASH INVESTING, CAPITAL, AND FINANCING ACTIVITIES Capital disposal and retirement 31,237$ -$ -$ 31,237$ -$ Contributions of capital assets 6,016,851 - - 6,016,851 - Net amort. bond prem. discount & bond issue costs 3,931 - 65,005 68,936 - Increase in fair value of investments 29,022 - 2,821 31,843 - Depreciation 5,462,690 3,939 645,867 6,112,496 876,839 BUSINESS-TYPE ACTIVITIES ENTERPRISE FUNDS STATEMENT OF CASH FLOWS PROPRIETARY FUNDS Page 2 of 2 For the Year Ended December 31, 2006 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-16 2006 Comprehensive Annual Financial Report City of Renton, Washington GOVERNMENTAL ACTIVITIES OTHER TOTAL INTERNAL WATERWORKS SOLID ENTERPRISE ENTERPRISE SERVICE UTILITY WASTE FUNDS FUNDS FUNDS RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES: Operating income (loss)$ 1,356,124 $ 278,254 $ 162,188 $ 1,796,566 $ (96,955) Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation & amortization of deferred charges $ 5,462,690 $ 3,939 $ 648,595 $ 6,115,224 $ 876,839 Other non-operating revenue 160,233 - (156,734) 3,499 545,133 (Increase) decrease in accounts receivable 1,838,896 (102,724) 152,535 1,888,707 (9,013) (Increase) decrease in due from other funds/governmental units 64,853 65,853 (42,633) 88,073 4,849 (Increase) decrease in inventory & prepaid items 29,758 - 6,164 35,922 (10,922) Increase (decrease) in vouchers retainage payable (19,971) 19,526 (16,017) (16,462) 495,371 Increase (decrease) in due to other governmental units (53,189) - 654 (52,535) - Increase (decrease) in payables & other short-term liabilities 866,040 (314) (1,606) 864,120 6,439 Increase (decrease) in customer deposits - - 16,692 16,692 - Increase (decrease) in deferred revenues 141,959 - (9,631) 132,328 - Increase (decrease) in accrued employee leave benefits 33,072 4,102 11,496 48,670 488,870 Total adjustments $ 8,524,341 $ (9,618) - 609,515$ $ 9,124,238 $ 2,397,566 NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES $ 9,880,465 $ 268,636 $ 771,703 $ 10,920,804 $ 2,300,611 NONCASH INVESTING, CAPITAL, AND FINANCING ACTIVITIES Capital disposal and retirement 31,237$ -$ -$ 31,237$ -$ Contributions of capital assets 6,016,851 - - 6,016,851 - Net amort. bond prem. discount & bond issue costs 3,931 - 65,005 68,936 - Increase in fair value of investments 29,022 - 2,821 31,843 - Depreciation 5,462,690 3,939 645,867 6,112,496 876,839 BUSINESS-TYPE ACTIVITIES ENTERPRISE FUNDS STATEMENT OF CASH FLOWS PROPRIETARY FUNDS Page 2 of 2 For the Year Ended December 31, 2006 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-16 2006 Comprehensive Annual Financial Report City of Renton, Washington PENSION TRUST AGENCY FIREFIGHTER'S SPECIAL PENSION DEPOSITS ASSETS Cash & cash equivalents $ 921,296 $ 471,522 Investments at fair value: Federal National Mortgage Association 127,020 - US Treasury Strips 4,316,554 - Receivables (net of allowances) Interest on investments 2,498,379 - TOTAL ASSETS $ 7,863,249 $ 471,522 LIABILITIES Vouchers & contracts payable $- $ 80,380 Deposits payable 391,142 TOTAL LIABILITIES $ - $ 471,522 NET ASSETS Held is trust for pension benefits & other purposes $ 7,863,249 $ - STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS December 31, 2006 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-17 2006 Comprehensive Annual Financial Report City of Renton, Washington PENSION TRUST AGENCY FIREFIGHTER'S SPECIAL PENSION DEPOSITS ASSETS Cash & cash equivalents $ 921,296 $ 471,522 Investments at fair value: Federal National Mortgage Association 127,020 - US Treasury Strips 4,316,554 - Receivables (net of allowances) Interest on investments 2,498,379 - TOTAL ASSETS $ 7,863,249 $ 471,522 LIABILITIES Vouchers & contracts payable $- $ 80,380 Deposits payable 391,142 TOTAL LIABILITIES $ - $ 471,522 NET ASSETS Held is trust for pension benefits & other purposes $ 7,863,249 $ - STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS December 31, 2006 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-17 2006 Comprehensive Annual Financial Report City of Renton, Washington PENSION TRUST FIREMEN'S PENSION ADDITIONS: Other contributions: Fire insurance premiums $ 77,821 Investment income Investment earnings 202,598 TOTAL ADDITIONS $ 280,419 DEDUCTIONS: Benefit payments $ 414,281 Medical benefit payments 11,537 Administrative and general 7,216 TOTAL DEDUCTIONS $ 433,034 NET INCREASE (DECREASE) $ (152,615) NET ASSETS - JANUARY 1 $ 8,015,864 NET ASSETS - DECEMBER 31 $ 7,863,249 STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS FIREMEN'S PENSION FUND For the Year Ended December 31, 2006 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-18 2006 Comprehensive Annual Financial Report City of Renton, Washington PENSION TRUST FIREMEN'S PENSION ADDITIONS: Other contributions: Fire insurance premiums $ 77,821 Investment income Investment earnings 202,598 TOTAL ADDITIONS $ 280,419 DEDUCTIONS: Benefit payments $ 414,281 Medical benefit payments 11,537 Administrative and general 7,216 TOTAL DEDUCTIONS $ 433,034 NET INCREASE (DECREASE) $ (152,615) NET ASSETS - JANUARY 1 $ 8,015,864 NET ASSETS - DECEMBER 31 $ 7,863,249 STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS FIREMEN'S PENSION FUND For the Year Ended December 31, 2006 The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-18 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-19 NOTES TO THE FINANCIAL STATEMENTS January 1, 2006 through December 31, 2006 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. The City had implemented all applicable GASB Statements through Statement No. 47 with the exception of Statement No. 45: Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions. During 2006, the City implemented, if applicable, Statement No. 43: Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans, Statement No. 46: Net Asset Restricted by Enabling Legislation – an amendment of GASB Statement No. 34, and Statement No. 47: Accounting for Terminated Benefits. All other applicable statements were implemented prior to 2006. A. REPORTING ENTITY As required by GAAP the City’s financial statements present the City of Renton – the primary government. The City of Renton’s Mayor appoints the Governing Board for the Renton Housing Authority, which is not considered a component unit of the City. The City is under no obligation to subsidize, nor does it exercise any other prerequisite for inclusion. The City of Renton has no component units (either blended or discretely presented) included in these statements. 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-19 NOTES TO THE FINANCIAL STATEMENTS January 1, 2006 through December 31, 2006 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. The City had implemented all applicable GASB Statements through Statement No. 47 with the exception of Statement No. 45: Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions. During 2006, the City implemented, if applicable, Statement No. 43: Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans, Statement No. 46: Net Asset Restricted by Enabling Legislation – an amendment of GASB Statement No. 34, and Statement No. 47: Accounting for Terminated Benefits. All other applicable statements were implemented prior to 2006. A. REPORTING ENTITY As required by GAAP the City’s financial statements present the City of Renton – the primary government. The City of Renton’s Mayor appoints the Governing Board for the Renton Housing Authority, which is not considered a component unit of the City. The City is under no obligation to subsidize, nor does it exercise any other prerequisite for inclusion. The City of Renton has no component units (either blended or discretely presented) included in these statements. 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-20 B. BASIC FINANCIAL STATEMENTS – GASB 34 PRESENTATION The City’s basic financial statements include both Government-wide (reporting the City as a whole) and fund financial statements (reporting the City’s major funds). Both the Government- wide and fund financial statements categorize primary activities as either government or business-type. GOVERNMENT-WIDE STATEMENTS In the Government-wide Statement of Net Assets, both the governmental and business-type activities columns (a) are presented on a consolidated basis by column, and (b) are reported on a full accrual, economic resource basis, which recognized all long-term assets and receivables as well as long-term debt and obligations. The City’s net assets are reported in three parts – investment in capital assets, net of related debt; restricted net assets; and unrestricted net assets. The City first utilizes restricted resources to finance qualifying activities. The Government-wide Statement of Activities reports both the gross and net cost of each of the City’s functions and business-type activities (general government, judicial, security of persons and property, physical environment, transportation, economic environment, mental and physical health, culture and recreation, waterworks utility, airport, solid waste utility, and golf course). General government revenues (property taxes, timber taxes, retail sales and use taxes, business taxes, excise taxes, and other taxes) also support the functions. The Statement of Activities reduces gross expenses (including depreciation) by related program revenues, operating and capital grants and contributions. Program revenues must be directly associated with the function or a business-type activity. Operating grants include operating specific and discretionary (either operating or capital) grants while the capital grants column reflects capital specific grants. General revenues normally cover the net cost, by function or business-type activity. The Government-wide focus is more on the sustainability of the City as an entity and the change in the City’s net assets resulting from the current year’s activities. FUND FINANCIAL STATEMENTS In the fund financial statements, the financial transactions are recorded in individual funds, each accounted for by a separate set of self-balancing accounts that comprise assets, liabilities, reserves, fund equity, revenues, and expenditures or expenses. The presentation is by major funds in either the governmental or business-type categories. GASB Statement 34 sets forth the minimum criteria for the determination of a major fund. The non-major funds are combined in the fund financial statements and are detailed in the combining section. The governmental major fund statements in the fund financial statement are presented on current financial resources and modified accrual basis of accounting. Since governmental fund statements are presented on a different measurement focus and basis of accounting than the Government-wide statements’ governmental column, a reconciliation is presented at the end of 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-20 B. BASIC FINANCIAL STATEMENTS – GASB 34 PRESENTATION The City’s basic financial statements include both Government-wide (reporting the City as a whole) and fund financial statements (reporting the City’s major funds). Both the Government- wide and fund financial statements categorize primary activities as either government or business-type. GOVERNMENT-WIDE STATEMENTS In the Government-wide Statement of Net Assets, both the governmental and business-type activities columns (a) are presented on a consolidated basis by column, and (b) are reported on a full accrual, economic resource basis, which recognized all long-term assets and receivables as well as long-term debt and obligations. The City’s net assets are reported in three parts – investment in capital assets, net of related debt; restricted net assets; and unrestricted net assets. The City first utilizes restricted resources to finance qualifying activities. The Government-wide Statement of Activities reports both the gross and net cost of each of the City’s functions and business-type activities (general government, judicial, security of persons and property, physical environment, transportation, economic environment, mental and physical health, culture and recreation, waterworks utility, airport, solid waste utility, and golf course). General government revenues (property taxes, timber taxes, retail sales and use taxes, business taxes, excise taxes, and other taxes) also support the functions. The Statement of Activities reduces gross expenses (including depreciation) by related program revenues, operating and capital grants and contributions. Program revenues must be directly associated with the function or a business-type activity. Operating grants include operating specific and discretionary (either operating or capital) grants while the capital grants column reflects capital specific grants. General revenues normally cover the net cost, by function or business-type activity. The Government-wide focus is more on the sustainability of the City as an entity and the change in the City’s net assets resulting from the current year’s activities. FUND FINANCIAL STATEMENTS In the fund financial statements, the financial transactions are recorded in individual funds, each accounted for by a separate set of self-balancing accounts that comprise assets, liabilities, reserves, fund equity, revenues, and expenditures or expenses. The presentation is by major funds in either the governmental or business-type categories. GASB Statement 34 sets forth the minimum criteria for the determination of a major fund. The non-major funds are combined in the fund financial statements and are detailed in the combining section. The governmental major fund statements in the fund financial statement are presented on current financial resources and modified accrual basis of accounting. Since governmental fund statements are presented on a different measurement focus and basis of accounting than the Government-wide statements’ governmental column, a reconciliation is presented at the end of 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-21 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, security of persons and property, physical environment, transportation, economic environment, mental and physical health, culture and recreation). Interfund fund activity has been eliminated from the Government-wide financial statements. Exceptions are payments in lieu of taxes, external type transactions within the internal service funds (revenue and expenses for interest or services provided to other governmental organizations), and other charges for waterworks utility or storm water utility. Elimination of these charges would distort the direct cost and program revenues for these functions. The City’s fiduciary funds are presented in the fund financial statements. Since the assets are being held for the benefit of a third party and cannot be used for obligations of the City, they are not included in the Government-wide statements. The following describes each fund as presented in the fund financial statements. MAJOR FUNDS GOVERNMENTAL FUNDS 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 public safety, building, planning, human services, and general administration. 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. The Community Development Block activities are accounted for within this fund, which is federally funded. PARKS The Parks Fund accounts for the City’s parks and recreation programs: operations, maintenance, and improvements for municipal park buildings, and landscaping and street tree functions. Resources are primarily from general tax revenues and charges for services. 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-21 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, security of persons and property, physical environment, transportation, economic environment, mental and physical health, culture and recreation). Interfund fund activity has been eliminated from the Government-wide financial statements. Exceptions are payments in lieu of taxes, external type transactions within the internal service funds (revenue and expenses for interest or services provided to other governmental organizations), and other charges for waterworks utility or storm water utility. Elimination of these charges would distort the direct cost and program revenues for these functions. The City’s fiduciary funds are presented in the fund financial statements. Since the assets are being held for the benefit of a third party and cannot be used for obligations of the City, they are not included in the Government-wide statements. The following describes each fund as presented in the fund financial statements. MAJOR FUNDS GOVERNMENTAL FUNDS 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 public safety, building, planning, human services, and general administration. 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. The Community Development Block activities are accounted for within this fund, which is federally funded. PARKS The Parks Fund accounts for the City’s parks and recreation programs: operations, maintenance, and improvements for municipal park buildings, and landscaping and street tree functions. Resources are primarily from general tax revenues and charges for services. 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-22 MUNICIPAL FACILITIES CONSTRUCTION FUND The Municipal Facilities Construction Fund accounts for the acquisition and development of municipal facilities. Resources included general and special revenue taxes and Council- approved general obligation bonds. ENTERPRISE FUNDS WATERWORKS UTILITY The Waterworks Utility Fund accounts for all operation and capital improvement programs for water, wastewater, and storm water services within the City. The activities primarily supported by user fees include: administration, billings and collections, debt service, engineering and operation, maintenance and repairs. The primary resources for the capital improvement programs are revenue bond proceeds, grants (as available), and utility collection charges. SOLID WASTE Solid waste, recycling, and yard waste collection services for the City are accounted for in this fund, supported entirely by service fees. The expenses include payment to the City’s garbage contractor and other service charges. NON-MAJOR FUNDS ARTERIAL STREET FUND The Arterial Street Fund was established pursuant to state law allocating the one-half cent State Gasoline Tax revenue to cities and towns for construction, improvements, and major repair of streets. STREET FUND The Street Fund was established pursuant to state law to account for maintenance and improvements of the City’s street and traffic control systems. Major sources of support are general revenues and state levied taxes on motor vehicle fuels distributed to the City of Renton. LIBRARY FUND The Library Fund accounts for operation of the City’s library system, including central and branch facilities. Resources to the fund are mainly general tax revenues and library fines. 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. 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-22 MUNICIPAL FACILITIES CONSTRUCTION FUND The Municipal Facilities Construction Fund accounts for the acquisition and development of municipal facilities. Resources included general and special revenue taxes and Council- approved general obligation bonds. ENTERPRISE FUNDS WATERWORKS UTILITY The Waterworks Utility Fund accounts for all operation and capital improvement programs for water, wastewater, and storm water services within the City. The activities primarily supported by user fees include: administration, billings and collections, debt service, engineering and operation, maintenance and repairs. The primary resources for the capital improvement programs are revenue bond proceeds, grants (as available), and utility collection charges. SOLID WASTE Solid waste, recycling, and yard waste collection services for the City are accounted for in this fund, supported entirely by service fees. The expenses include payment to the City’s garbage contractor and other service charges. NON-MAJOR FUNDS ARTERIAL STREET FUND The Arterial Street Fund was established pursuant to state law allocating the one-half cent State Gasoline Tax revenue to cities and towns for construction, improvements, and major repair of streets. STREET FUND The Street Fund was established pursuant to state law to account for maintenance and improvements of the City’s street and traffic control systems. Major sources of support are general revenues and state levied taxes on motor vehicle fuels distributed to the City of Renton. LIBRARY FUND The Library Fund accounts for operation of the City’s library system, including central and branch facilities. Resources to the fund are mainly general tax revenues and library fines. 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. 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-23 1% FOR ART FUND The City of Renton established this fund by contributing one percent of general governmental capital project funding for art projects. CABLE COMMUNICATIONS DEVELOPMENT FUND The Cable Communications Development Fund accounts for funding for promotion and development of cable communications as established by City ordinance. 1997 LIMITED GENERAL OBLIGATION BOND REDEMPTION FUND Accounts for debt service on a Council-approved bond issue, which provided funding for the purchase of Renton City Hall. 1978 LIMITED GENERAL OBLIGATION BOND REDEMPTION FUND This fund accounts for debt service on a Council-approved bond issue, which provided partial funding for construction of the Renton Senior Activity Center. GENERAL GOVERNMENTAL MISCELLANEOUS DEBT SERVICE FUND Accounts for debt service on installment contracts for equipment, City Shop land purchase, the 1984 and 1985 Limited General Obligation Bond issues for equipment and the 1986 Limited Bond issued to finance a community center, library improvements, permanent financing for purchase of a golf course, acquisition of wetland property, and equipment. 1989 UNLIMITED GENERAL OBLIGATION BOND REDEMPTION FUND Accounts for debt service on a voter-approved bond issue, which provided financing to: acquire, construct, rehabilitate, equip and develop low-income housing for the elderly. DOWNTOWN PARKING GARAGE Accounts for resources and expenditures related to the construction of a downtown parking facility. 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. LEASED CITY PROPERTIES Accounts for revenue and expenditures related to City property leased to outside entities. 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-23 1% FOR ART FUND The City of Renton established this fund by contributing one percent of general governmental capital project funding for art projects. CABLE COMMUNICATIONS DEVELOPMENT FUND The Cable Communications Development Fund accounts for funding for promotion and development of cable communications as established by City ordinance. 1997 LIMITED GENERAL OBLIGATION BOND REDEMPTION FUND Accounts for debt service on a Council-approved bond issue, which provided funding for the purchase of Renton City Hall. 1978 LIMITED GENERAL OBLIGATION BOND REDEMPTION FUND This fund accounts for debt service on a Council-approved bond issue, which provided partial funding for construction of the Renton Senior Activity Center. GENERAL GOVERNMENTAL MISCELLANEOUS DEBT SERVICE FUND Accounts for debt service on installment contracts for equipment, City Shop land purchase, the 1984 and 1985 Limited General Obligation Bond issues for equipment and the 1986 Limited Bond issued to finance a community center, library improvements, permanent financing for purchase of a golf course, acquisition of wetland property, and equipment. 1989 UNLIMITED GENERAL OBLIGATION BOND REDEMPTION FUND Accounts for debt service on a voter-approved bond issue, which provided financing to: acquire, construct, rehabilitate, equip and develop low-income housing for the elderly. DOWNTOWN PARKING GARAGE Accounts for resources and expenditures related to the construction of a downtown parking facility. 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. LEASED CITY PROPERTIES Accounts for revenue and expenditures related to City property leased to outside entities. 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-24 AQUATIC CENTER FUND Accounts for resources and expenditures related to the construction of the Henry Moses Family Aquatic Center. GENERAL GOVERNMENT CAPITAL IMPROVEMENT FUND The General Government Capital Improvement Fund accounts for revenues and expenditures for numerous capital improvements projects, to provide infrastructure necessary for controlled growth, and to address general City needs. Primary resources include: general tax revenues, business licenses fees, federal and state grants, general obligation bond proceeds, and transfers from various cumulative reserve funds. SOUTH LAKE WASHINGTON INFRASTRUCTURE PROJECT FUND The South Lake Washington Infrastructure Project Fund accounts for the infrastructure improvements at the south end of Lake Washington. Primary resources include: REET, sales tax, grants, and GO Bonds that will provide for the design, construction, labor wages and benefits, and equipment required to implement the project. AIRPORT FUND Provides accounting for revenues and expenses, which provides administration, debt services, operation, capital improvements, and maintenance of the Renton Municipal Airport and Will Rodger-Wily Post Memorial Seaplane Base. Sources of support to the fund are leases, fuel charges, investment interest, and grant funding as available. GOLF COURSE FUND The Golf Course Fund was created after the City acquired the Maplewood Golf Course. It accounts for the operation, maintenance, debt service, and capital improvements of the facility. OTHER FUND TYPES INTERNAL SERVICE FUNDS EQUIPMENT RENTAL The Equipment Rental Fund accounts for the costs of maintaining and replacing all City vehicles, computers, and auxiliary equipment except for fire apparatus and replacement of police patrol vehicles. The fund also accounts for communication, data support, and printing services provided to City employees. All equipment costs, including depreciation, are factors in calculating the rates, which are charged to each user department. INSURANCE FUND The Insurance Fund provides accounting for self-insurance services to all City departments, including provisions for losses on property, liability, worker’s compensation, unemployment compensation, and the health care program. The Insurance Fund pays expenses and rates are charged to departments based on use and/or coverage requirements. 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-24 AQUATIC CENTER FUND Accounts for resources and expenditures related to the construction of the Henry Moses Family Aquatic Center. GENERAL GOVERNMENT CAPITAL IMPROVEMENT FUND The General Government Capital Improvement Fund accounts for revenues and expenditures for numerous capital improvements projects, to provide infrastructure necessary for controlled growth, and to address general City needs. Primary resources include: general tax revenues, business licenses fees, federal and state grants, general obligation bond proceeds, and transfers from various cumulative reserve funds. SOUTH LAKE WASHINGTON INFRASTRUCTURE PROJECT FUND The South Lake Washington Infrastructure Project Fund accounts for the infrastructure improvements at the south end of Lake Washington. Primary resources include: REET, sales tax, grants, and GO Bonds that will provide for the design, construction, labor wages and benefits, and equipment required to implement the project. AIRPORT FUND Provides accounting for revenues and expenses, which provides administration, debt services, operation, capital improvements, and maintenance of the Renton Municipal Airport and Will Rodger-Wily Post Memorial Seaplane Base. Sources of support to the fund are leases, fuel charges, investment interest, and grant funding as available. GOLF COURSE FUND The Golf Course Fund was created after the City acquired the Maplewood Golf Course. It accounts for the operation, maintenance, debt service, and capital improvements of the facility. OTHER FUND TYPES INTERNAL SERVICE FUNDS EQUIPMENT RENTAL The Equipment Rental Fund accounts for the costs of maintaining and replacing all City vehicles, computers, and auxiliary equipment except for fire apparatus and replacement of police patrol vehicles. The fund also accounts for communication, data support, and printing services provided to City employees. All equipment costs, including depreciation, are factors in calculating the rates, which are charged to each user department. INSURANCE FUND The Insurance Fund provides accounting for self-insurance services to all City departments, including provisions for losses on property, liability, worker’s compensation, unemployment compensation, and the health care program. The Insurance Fund pays expenses and rates are charged to departments based on use and/or coverage requirements. 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-25 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 government fund revenues are accrued. Property taxes are billed and collected within the same period in which taxes are levied. Subsidies and grants to proprietary funds, which finance either capital or current operations, are reported as non-operating revenue based on GASB Statement 33. In applying GASB Statement 33 to grant revenues, the provider recognizes liabilities and expenses and the recipient recognizes receivables and revenue when the eligibility requirements, including time requirements, are met. Resources transmitted before the eligibility requirements are met, are reported as advances by the provider and deferred revenue by the recipient. 2. Modified Accrual The governmental funds financial statements are presented on the modified basis of accounting. Under the modified accrual basis of accounting, revenues are recorded when susceptible to accrual: i.e., both measurable and available. “Available” means collectible within the current 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-25 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 government fund revenues are accrued. Property taxes are billed and collected within the same period in which taxes are levied. Subsidies and grants to proprietary funds, which finance either capital or current operations, are reported as non-operating revenue based on GASB Statement 33. In applying GASB Statement 33 to grant revenues, the provider recognizes liabilities and expenses and the recipient recognizes receivables and revenue when the eligibility requirements, including time requirements, are met. Resources transmitted before the eligibility requirements are met, are reported as advances by the provider and deferred revenue by the recipient. 2. Modified Accrual The governmental funds financial statements are presented on the modified basis of accounting. Under the modified accrual basis of accounting, revenues are recorded when susceptible to accrual: i.e., both measurable and available. “Available” means collectible within the current 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-26 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 3B.) 3. Receivables and Payables – Amounts owed/payable to/by the City at year-end. Taxes receivable consists of property taxes and related interest and penalties (refer to Note 4). Accrued interest receivable consists of amounts earned on investments, notes, and contracts. Accrued interest payable consists of amounts owed on notes, loans, and contracts. Customer accounts receivable/payable consists of amounts owed from/to private individuals or organizations for goods and services. If the transactions are with another governmental unit, it is accounted for within “due from/to other governments.” Special assessments are recorded when levied and are liens against the property benefited. Special assessments receivable consist of current and delinquent assessments and related interest and penalties. Deferred assessments consist of special assessments not due within one year. Receivables have been reported net of estimated uncollectible accounts. Because property taxes, special assessments, and utility billings are considered liens on property, no estimated uncollectible amounts are established. Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to either “due to/from other funds” (i.e., the current portion of interfund loans) or “advances to/from other funds” (i.e., the non-current portion of interfund loans). All other outstanding balances between the governmental activities and business-type activities are reported in the Government-wide financial statements as “internal balances” (Refer to Note 10). 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-26 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 3B.) 3. Receivables and Payables – Amounts owed/payable to/by the City at year-end. Taxes receivable consists of property taxes and related interest and penalties (refer to Note 4). Accrued interest receivable consists of amounts earned on investments, notes, and contracts. Accrued interest payable consists of amounts owed on notes, loans, and contracts. Customer accounts receivable/payable consists of amounts owed from/to private individuals or organizations for goods and services. If the transactions are with another governmental unit, it is accounted for within “due from/to other governments.” Special assessments are recorded when levied and are liens against the property benefited. Special assessments receivable consist of current and delinquent assessments and related interest and penalties. Deferred assessments consist of special assessments not due within one year. Receivables have been reported net of estimated uncollectible accounts. Because property taxes, special assessments, and utility billings are considered liens on property, no estimated uncollectible amounts are established. Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to either “due to/from other funds” (i.e., the current portion of interfund loans) or “advances to/from other funds” (i.e., the non-current portion of interfund loans). All other outstanding balances between the governmental activities and business-type activities are reported in the Government-wide financial statements as “internal balances” (Refer to Note 10). 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-27 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. Inventories are carried at cost on the first in, first out – FIFO basis. Certain payments to vendors reflect costs applicable to future accounting periods and are reported as prepaid items in both the Government-wide and fund statements. 5. Capital Assets and Depreciation (refer to Note 5). 6. Deferred Revenues This account includes amounts recognized as receivables but not revenues in the governmental funds because the revenue recognition criterion has not been met. 7. Custodial Accounts This account reflects the liability for net monetary assets being held by the City in its agency capacity. 8. Compensated Absences The City accrues accumulated unpaid vacation and other leave and associated employee-related costs when earned (or estimated to be earned) by the employee. The non-current portion (the amount estimated to be used in subsequent fiscal years) for governmental funds is maintained separately and represents a reconciling item between the fund and Government-wide presentations. 9. Fund Balance Designations and Reservations In the fund financial statements, governmental funds report reservations of fund balance for amounts that are not available for appropriation or are legally restricted by outside parties for use for a specific purpose. Designations of fund balance represent tentative management plans that are subject to change. The City has the following reserved or designated fund balances. 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-27 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. Inventories are carried at cost on the first in, first out – FIFO basis. Certain payments to vendors reflect costs applicable to future accounting periods and are reported as prepaid items in both the Government-wide and fund statements. 5. Capital Assets and Depreciation (refer to Note 5). 6. Deferred Revenues This account includes amounts recognized as receivables but not revenues in the governmental funds because the revenue recognition criterion has not been met. 7. Custodial Accounts This account reflects the liability for net monetary assets being held by the City in its agency capacity. 8. Compensated Absences The City accrues accumulated unpaid vacation and other leave and associated employee-related costs when earned (or estimated to be earned) by the employee. The non-current portion (the amount estimated to be used in subsequent fiscal years) for governmental funds is maintained separately and represents a reconciling item between the fund and Government-wide presentations. 9. Fund Balance Designations and Reservations In the fund financial statements, governmental funds report reservations of fund balance for amounts that are not available for appropriation or are legally restricted by outside parties for use for a specific purpose. Designations of fund balance represent tentative management plans that are subject to change. The City has the following reserved or designated fund balances. 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-28 Fund Reserved Purpose of Reservation Amount General Fund Prepaid items $8,000 Municipal Facilities Advances to other funds 63,900 TOTAL $71,900 Fund Designated Purpose of Designation Amount General Fund Operating cash reserves $5,761,257 Parks Fund Operating cash reserves 949,909 Parks Fund Special revenue funds 336,080 Municipal Facilities Capital project fund 15,394,113 Street Fund Operating cash reserves 734,828 Library Fund Operating cash reserves 206,201 TOTAL $23,382,388 10. Net Assets (refer to Note 11). 11. Encumbrances An encumbrance system is maintained to account for commitments resulting from approved purchase orders, contracts, and other commitments. Encumbrances remaining at year-end lapse and are canceled. Upon request by the department and approval of the City Council, encumbrances may be re-appropriated in the following year. E. REVENUES, EXPENDITURES, AND EXPENSES 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. 3. Interfund Transfers Permanent reallocation of resources between funds of the reporting entity are classified as interfund transfers. For purposes of the Government-wide Statement of Activities, all interfund transfers between individual governmental funds have been eliminated. 4. Expenditures/Expenses Expenses in the Government-wide Statement of Activities are reported by function as a governmental activity (general government, judicial, security of persons and property, physical environment, transportation, economic environment, culture and recreation, or interest on long- term debt) or business-type activity (waterworks utility, airport, solid waste utility, or golf course). In the fund financial statements, expenditures of governmental funds are classified by: function, debt service principle and interest payments, or purchases of capital items. Proprietary expenditures are classified as operating or non-operating. 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-28 Fund Reserved Purpose of Reservation Amount General Fund Prepaid items $8,000 Municipal Facilities Advances to other funds 63,900 TOTAL $71,900 Fund Designated Purpose of Designation Amount General Fund Operating cash reserves $5,761,257 Parks Fund Operating cash reserves 949,909 Parks Fund Special revenue funds 336,080 Municipal Facilities Capital project fund 15,394,113 Street Fund Operating cash reserves 734,828 Library Fund Operating cash reserves 206,201 TOTAL $23,382,388 10. Net Assets (refer to Note 11). 11. Encumbrances An encumbrance system is maintained to account for commitments resulting from approved purchase orders, contracts, and other commitments. Encumbrances remaining at year-end lapse and are canceled. Upon request by the department and approval of the City Council, encumbrances may be re-appropriated in the following year. E. REVENUES, EXPENDITURES, AND EXPENSES 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. 3. Interfund Transfers Permanent reallocation of resources between funds of the reporting entity are classified as interfund transfers. For purposes of the Government-wide Statement of Activities, all interfund transfers between individual governmental funds have been eliminated. 4. Expenditures/Expenses Expenses in the Government-wide Statement of Activities are reported by function as a governmental activity (general government, judicial, security of persons and property, physical environment, transportation, economic environment, culture and recreation, or interest on long- term debt) or business-type activity (waterworks utility, airport, solid waste utility, or golf course). In the fund financial statements, expenditures of governmental funds are classified by: function, debt service principle and interest payments, or purchases of capital items. Proprietary expenditures are classified as operating or non-operating. 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-29 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 on the cash basis of accounting at the fund level. Annual appropriated budgets are adopted for governmental funds. Budgets for proprietary funds are “management budgets” and are not legally required to be reported. Included in the Required Supplemental and Combining sections of the CAFR are Schedules of Revenues, Expenditures, and Changes in Fund Balances (Budget to Actual) reporting the Actual Budgetary Basis (cash basis) verses Actual GAAP Basis of Accounting (modified basis) for all legally adopted budgets. There have been no material violations of finance-related legal or contractual provisions, and there have been no expenditures exceeding legal appropriations in any of the funds of the City. A. PROCEDURES FOR ADOPTING THE ORIGINAL BUDGET The City of Renton’s budget procedures are mandated by the Chapter 35A.33 of the Revised Code of Washington (RCW). The steps in the budget process are as follows: 1. Prior to November 1, the Mayor submits a proposed budget to the City Council. This budget is based on priorities established by the Council; estimates provided by the City departments during the preceding months; balanced by revenue estimates made by the Mayor. 2. The City Council conducts public hearings on the proposed budget in November and December. 3. The Council makes their adjustments to the proposed budget and adopts, by ordinance, a final balanced budget no later than December 31. 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 cash basis of accounting; therefore, any comparisons between budget and actual revenues and expenditures are reported under the budgetary basis. The annual budget is adopted with budgetary control at the fund level, so expenditures may not legally exceed appropriations at that level of detail. Transfers or revisions within funds are allowed, but only the City Council has the legal authority to increase or decrease a given fund’s annual budget. This is accomplished by City ordinance. The budget was amended thirteen times during 2006. 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-29 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 on the cash basis of accounting at the fund level. Annual appropriated budgets are adopted for governmental funds. Budgets for proprietary funds are “management budgets” and are not legally required to be reported. Included in the Required Supplemental and Combining sections of the CAFR are Schedules of Revenues, Expenditures, and Changes in Fund Balances (Budget to Actual) reporting the Actual Budgetary Basis (cash basis) verses Actual GAAP Basis of Accounting (modified basis) for all legally adopted budgets. There have been no material violations of finance-related legal or contractual provisions, and there have been no expenditures exceeding legal appropriations in any of the funds of the City. A. PROCEDURES FOR ADOPTING THE ORIGINAL BUDGET The City of Renton’s budget procedures are mandated by the Chapter 35A.33 of the Revised Code of Washington (RCW). The steps in the budget process are as follows: 1. Prior to November 1, the Mayor submits a proposed budget to the City Council. This budget is based on priorities established by the Council; estimates provided by the City departments during the preceding months; balanced by revenue estimates made by the Mayor. 2. The City Council conducts public hearings on the proposed budget in November and December. 3. The Council makes their adjustments to the proposed budget and adopts, by ordinance, a final balanced budget no later than December 31. 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 cash basis of accounting; therefore, any comparisons between budget and actual revenues and expenditures are reported under the budgetary basis. The annual budget is adopted with budgetary control at the fund level, so expenditures may not legally exceed appropriations at that level of detail. Transfers or revisions within funds are allowed, but only the City Council has the legal authority to increase or decrease a given fund’s annual budget. This is accomplished by City ordinance. The budget was amended thirteen times during 2006. 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-30 Original budgeted inflows as compared to the final budgeted inflows are as follows: Increase Original Final (Decrease) Budgeted Budgeted Budgeted Fund Inflows Inflows Inflows General Fund $50,358,513 $50,935,621 $577,108 Park Fund 11,260,376 11,299,136 38,760 Arterial Street Fund 440,000 440,000 0 Street Fund 6,738,878 6,763,878 25,000 Library Fund 1,809,862 1,809,862 0 Hotel/Motel Tax Fund 220,000 242,500 22,500 Paths and Trails Reserve Fund 0 0 0 1% for Art Fund 60,000 60,000 0 Cable Communications Development Fund 38,900 38,900 0 Park Memorial Fund 0 0 0 1997 LGO Bond Fund 986,253 986,253 0 1978 LGO Bond Fund 21,000 21,000 0 General Government Miscellaneous Debt Service Fund 1,799,400 1,799,400 0 1989 UGO Bond Redemption Fund 518,400 518,400 0 Special Assessment Debt Fund 9,500 0 (9,500) Community Development Impact Mitigation Fund 255,000 255,000 0 Fire Impact Mitigation Fund 525,000 525,000 0 Transportation Impact Mitigation Fund 600,000 600,000 0 Leased City Properties Fund 904,902 904,902 0 Aquatic Center Fund 0 0 0 Municipal Facilities Construction Fund 2,100,000 2,100,000 0 General Government Capital Improvement Fund 16,597,600 17,552,990 955,390 South Lake Washington Infrastructure Project Fund 0 24,925,587 24,925,587 Airport Fund 1,921,817 1,921,817 0 Solid Waste Utility Fund 9,104,429 9,104,429 0 Golf Course Fund 2,421,880 2,421,880 0 Waterworks Utility Fund 38,014,220 41,594,146 3,579,926 Equipment Repair and Replacement Fund 3,201,900 3,201,900 0 Information Services Fund 3,431,550 3,833,550 402,000 Insurance Fund 3,007,503 3,007,503 0 Medical Insurance Fund 8,961,109 8,961,109 0 TOTAL $165,307,992 $195,824,763 $30,516,771 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-30 Original budgeted inflows as compared to the final budgeted inflows are as follows: Increase Original Final (Decrease) Budgeted Budgeted Budgeted Fund Inflows Inflows Inflows General Fund $50,358,513 $50,935,621 $577,108 Park Fund 11,260,376 11,299,136 38,760 Arterial Street Fund 440,000 440,000 0 Street Fund 6,738,878 6,763,878 25,000 Library Fund 1,809,862 1,809,862 0 Hotel/Motel Tax Fund 220,000 242,500 22,500 Paths and Trails Reserve Fund 0 0 0 1% for Art Fund 60,000 60,000 0 Cable Communications Development Fund 38,900 38,900 0 Park Memorial Fund 0 0 0 1997 LGO Bond Fund 986,253 986,253 0 1978 LGO Bond Fund 21,000 21,000 0 General Government Miscellaneous Debt Service Fund 1,799,400 1,799,400 0 1989 UGO Bond Redemption Fund 518,400 518,400 0 Special Assessment Debt Fund 9,500 0 (9,500) Community Development Impact Mitigation Fund 255,000 255,000 0 Fire Impact Mitigation Fund 525,000 525,000 0 Transportation Impact Mitigation Fund 600,000 600,000 0 Leased City Properties Fund 904,902 904,902 0 Aquatic Center Fund 0 0 0 Municipal Facilities Construction Fund 2,100,000 2,100,000 0 General Government Capital Improvement Fund 16,597,600 17,552,990 955,390 South Lake Washington Infrastructure Project Fund 0 24,925,587 24,925,587 Airport Fund 1,921,817 1,921,817 0 Solid Waste Utility Fund 9,104,429 9,104,429 0 Golf Course Fund 2,421,880 2,421,880 0 Waterworks Utility Fund 38,014,220 41,594,146 3,579,926 Equipment Repair and Replacement Fund 3,201,900 3,201,900 0 Information Services Fund 3,431,550 3,833,550 402,000 Insurance Fund 3,007,503 3,007,503 0 Medical Insurance Fund 8,961,109 8,961,109 0 TOTAL $165,307,992 $195,824,763 $30,516,771 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-31 Original budgeted outflows as compared to the final budgeted outflows are as follows: Increase Original Final (Decrease) Budgeted Budgeted Budgeted Fund Outflows Outflows Outflows General Fund $50,323,513 $51,700,002 $1,376,489 Park Fund 11,260,376 11,433,136 172,760 Arterial Street Fund 440,000 440,000 0 Street Fund 6,738,878 6,791,878 53,000 Library Fund 1,809,862 1,821,929 12,067 Hotel/Motel Tax Fund 220,000 302,500 82,500 Paths and Trails Reserve Fund 0 0 0 1% for Art Fund 60,000 60,000 0 Cable Communications Development Fund 143,900 143,900 0 Park Memorial Fund 0 0 0 1997 LGO Bond Fund 990,300 990,300 0 1978 LGO Bond Fund 21,500 21,500 0 General Government Miscellaneous Debt Service Fund 1,800,800 1,800,800 0 1989 UGO Bond Redemption Fund 518,400 518,400 0 Special Assessment Debt Fund 32,025 68,000 35,975 Community Development Impact Mitigation Fund 0 0 0 Fire Impact Mitigation Fund 525,000 525,000 0 Transportation Impact Mitigation Fund 1,984,800 1,984,800 0 Leased City Properties Fund 896,432 939,248 42,816 Aquatic Center Fund 0 0 0 Municipal Facilities Construction Fund 3,177,000 5,621,096 2,444,096 General Government Capital Improvement Fund 18,283,700 22,093,600 3,809,900 South Lake Washington Infrastructure Project Fund 0 24,925,587 24,925,587 Airport Fund 2,416,800 2,654,043 237,243 Solid Waste Utility Fund 9,510,248 9,670,248 160,000 Golf Course Fund 2,421,880 2,441,880 20,000 Waterworks Utility Fund 39,027,041 47,824,239 8,797,198 Equipment Repair and Replacement Fund 3,255,110 3,255,110 0 Information Services Fund 3,431,550 3,690,550 259,000 Insurance Fund 2,986,001 4,386,001 1,400,000 Medical Insurance Fund 8,773,034 8,773,034 0 TOTAL $171,048,150 $214,876,781 $43,828,631 NOTE 3. DEPOSITS AND INVESTMENTS A. Deposits The City’s deposits and certificates of deposit are insured by the Federal Depository Insurance Corporation (FDIC) and the State of Washington Public Deposit Protection Commission (WPDPC) Act of 1969. B. Investments The City invests excess and inactive funds in accordance with the City’s Investment Policy (updated and approved on June 5, 2006), which complies with the guidelines within Chapter 35A.40.050 RCW allows for investment of excess cash and inactive cash, directs that the 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-31 Original budgeted outflows as compared to the final budgeted outflows are as follows: Increase Original Final (Decrease) Budgeted Budgeted Budgeted Fund Outflows Outflows Outflows General Fund $50,323,513 $51,700,002 $1,376,489 Park Fund 11,260,376 11,433,136 172,760 Arterial Street Fund 440,000 440,000 0 Street Fund 6,738,878 6,791,878 53,000 Library Fund 1,809,862 1,821,929 12,067 Hotel/Motel Tax Fund 220,000 302,500 82,500 Paths and Trails Reserve Fund 0 0 0 1% for Art Fund 60,000 60,000 0 Cable Communications Development Fund 143,900 143,900 0 Park Memorial Fund 0 0 0 1997 LGO Bond Fund 990,300 990,300 0 1978 LGO Bond Fund 21,500 21,500 0 General Government Miscellaneous Debt Service Fund 1,800,800 1,800,800 0 1989 UGO Bond Redemption Fund 518,400 518,400 0 Special Assessment Debt Fund 32,025 68,000 35,975 Community Development Impact Mitigation Fund 0 0 0 Fire Impact Mitigation Fund 525,000 525,000 0 Transportation Impact Mitigation Fund 1,984,800 1,984,800 0 Leased City Properties Fund 896,432 939,248 42,816 Aquatic Center Fund 0 0 0 Municipal Facilities Construction Fund 3,177,000 5,621,096 2,444,096 General Government Capital Improvement Fund 18,283,700 22,093,600 3,809,900 South Lake Washington Infrastructure Project Fund 0 24,925,587 24,925,587 Airport Fund 2,416,800 2,654,043 237,243 Solid Waste Utility Fund 9,510,248 9,670,248 160,000 Golf Course Fund 2,421,880 2,441,880 20,000 Waterworks Utility Fund 39,027,041 47,824,239 8,797,198 Equipment Repair and Replacement Fund 3,255,110 3,255,110 0 Information Services Fund 3,431,550 3,690,550 259,000 Insurance Fund 2,986,001 4,386,001 1,400,000 Medical Insurance Fund 8,773,034 8,773,034 0 TOTAL $171,048,150 $214,876,781 $43,828,631 NOTE 3. DEPOSITS AND INVESTMENTS A. Deposits The City’s deposits and certificates of deposit are insured by the Federal Depository Insurance Corporation (FDIC) and the State of Washington Public Deposit Protection Commission (WPDPC) Act of 1969. B. Investments The City invests excess and inactive funds in accordance with the City’s Investment Policy (updated and approved on June 5, 2006), which complies with the guidelines within Chapter 35A.40.050 RCW allows for investment of excess cash and inactive cash, directs that the 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-32 responsibility for determining available cash for investment is placed upon the department administering the funds, and allows for pooling of the cash provided that the allocation of income is proportionate to the investment of each fund. Currently, the City invests in obligations of the U.S. Government, U.S. agency issues, Certificates of Deposit with Washington State banks and savings and loan institutions, the State of Washington Local Government Investment Pool (LGIP), and general obligations of Washington State municipalities. The LGIP, managed by the Washington State Office of the Treasurer, is comparable to a Rule 2a7-pools recognized by the Securities and Exchange Commission. A 2a7-like-pool is an external investment pool that is not registered with the SEC as an investment company, but nevertheless has a policy that it will, and does, operate in a manner consistent with the SEC’s Rule 2a7 of the Investment Company Act of 1940. Rule 2a7 allows SEC-registered mutual funds to use amortized cost rather than market value to report net assets and compute share prices. Investments are shown on the entity-wide Statement of Net Assets at fair value or for 2a7-like pools at amortized cost, which approximates fair value. Investments are reported within Cash and Investments of Governmental Activities and within Cash and Cash Equivalents or Investments of Business-type Activities. C. Deposit and Investment Schedule As of December 31, 2006, the City of Renton had the following investments: Security Type Cost Fair Value Weighted Average Maturity (in years) US Agencies $2,845,807 $2,823,773 3.364 Certificates of Deposit (within WPDPC) 39,000,000 39,000,000 1.140 Local Governmental Investment Pool (LGIP) 32,130,605 32,130,605 0.003 Municipal Investor Account (MIA) 10,030,148 10,030,148 0.003 TOTAL $84,006,560 $83,984,526 0.644 Credit risk. Credit Risk is the risk that an issuer or other counter party to an investment will not fulfill its obligations. All Agency securities in the City’s portfolio are rated “Aaa” by Moody’s Investors Service and “AAA” by Standard & Poor – each rating is the highest possible. Certificates of Deposit are insured by the FDIC up to $100,000 and, additionally, by collateral held in a multiple financial institution collateral pool administered by the Washington Public Deposit Protection Commission (WPDPC). The Washington State Local Government Investment Pool (LGIP) is a 2a7-like-pool and is operated in a manner consistent with the SEC’s Rule 2a7 of the Investment Company Act of 1940. 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-32 responsibility for determining available cash for investment is placed upon the department administering the funds, and allows for pooling of the cash provided that the allocation of income is proportionate to the investment of each fund. Currently, the City invests in obligations of the U.S. Government, U.S. agency issues, Certificates of Deposit with Washington State banks and savings and loan institutions, the State of Washington Local Government Investment Pool (LGIP), and general obligations of Washington State municipalities. The LGIP, managed by the Washington State Office of the Treasurer, is comparable to a Rule 2a7-pools recognized by the Securities and Exchange Commission. A 2a7-like-pool is an external investment pool that is not registered with the SEC as an investment company, but nevertheless has a policy that it will, and does, operate in a manner consistent with the SEC’s Rule 2a7 of the Investment Company Act of 1940. Rule 2a7 allows SEC-registered mutual funds to use amortized cost rather than market value to report net assets and compute share prices. Investments are shown on the entity-wide Statement of Net Assets at fair value or for 2a7-like pools at amortized cost, which approximates fair value. Investments are reported within Cash and Investments of Governmental Activities and within Cash and Cash Equivalents or Investments of Business-type Activities. C. Deposit and Investment Schedule As of December 31, 2006, the City of Renton had the following investments: Security Type Cost Fair Value Weighted Average Maturity (in years) US Agencies $2,845,807 $2,823,773 3.364 Certificates of Deposit (within WPDPC) 39,000,000 39,000,000 1.140 Local Governmental Investment Pool (LGIP) 32,130,605 32,130,605 0.003 Municipal Investor Account (MIA) 10,030,148 10,030,148 0.003 TOTAL $84,006,560 $83,984,526 0.644 Credit risk. Credit Risk is the risk that an issuer or other counter party to an investment will not fulfill its obligations. All Agency securities in the City’s portfolio are rated “Aaa” by Moody’s Investors Service and “AAA” by Standard & Poor – each rating is the highest possible. Certificates of Deposit are insured by the FDIC up to $100,000 and, additionally, by collateral held in a multiple financial institution collateral pool administered by the Washington Public Deposit Protection Commission (WPDPC). The Washington State Local Government Investment Pool (LGIP) is a 2a7-like-pool and is operated in a manner consistent with the SEC’s Rule 2a7 of the Investment Company Act of 1940. 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-33 Security Type Cost Fair Value Moody's S&P Federal National Mortgage Association $2,845,807 $2,823,773 Aaa AAA Certificates of Deposit (within WPDPC) 39,000,000 39,000,000 unrated unrated Local Governmental Investment Pool (LGIP) 32,130,605 32,130,605 unrated unrated Municipal Investor Account (MIA) 10,030,148 10,030,148 unrated unrated TOTAL $84,006,560 $83,984,526 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 in over-investing in instruments and issuers as follows: Maximum’s per Policy Instrument Maximum Issuer Maximum U.S. Treasuries 100% 100% U.S. Agencies 75% 50% Certificates of Deposit (within WPDPC) 50% 25% Local Governmental Investment Pool (LGIP) 50% 50% Commercial Paper 25% 5% Interest Rate Risk. Interest rate risk is the risk that changes in interest rates over time, adversely affecting the fair value of an investment. The City’s portfolio is managed within the parameters established by the Investment Policy, which limits the weighted average maturity of the portfolio to five years. 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-33 Security Type Cost Fair Value Moody's S&P Federal National Mortgage Association $2,845,807 $2,823,773 Aaa AAA Certificates of Deposit (within WPDPC) 39,000,000 39,000,000 unrated unrated Local Governmental Investment Pool (LGIP) 32,130,605 32,130,605 unrated unrated Municipal Investor Account (MIA) 10,030,148 10,030,148 unrated unrated TOTAL $84,006,560 $83,984,526 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 in over-investing in instruments and issuers as follows: Maximum’s per Policy Instrument Maximum Issuer Maximum U.S. Treasuries 100% 100% U.S. Agencies 75% 50% Certificates of Deposit (within WPDPC) 50% 25% Local Governmental Investment Pool (LGIP) 50% 50% Commercial Paper 25% 5% Interest Rate Risk. Interest rate risk is the risk that changes in interest rates over time, adversely affecting the fair value of an investment. The City’s portfolio is managed within the parameters established by the Investment Policy, which limits the weighted average maturity of the portfolio to five years. 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-34 Security Type 0-6 months 6 months – 1 year 1-3 years 3+ years Totals US Agencies $0 $0 $0 $2,823,773 $2,823,773 Certificates of Deposit (within WPDPC) 0 31,000,000 8,000,000 0 39,000,000 Local Governmental Investment Pool (LGIP) 32,130,605 0 0 0 32,130,605 Municipal Investor Account (MIA) 10,030,148 0 0 0 10,030,148 TOTAL $42,160,753 $31,000,000 $8,000,000 $2,823,773 $83,984,527 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 $3.375 per $1,000 of assessed value (RCW 84.52.043). Of this amount, up to .45 cents per thousand dollars may be designated for contribution to the Firemen’s Pension Fund. If a report by a qualified actuary on the condition of the Firemen’s Pension Fund establishes that this amount (or portion of) is not necessary to maintain the actuarial soundness of the fund, the amount can be used for any other municipal purpose (RCW 41.16.060). The tax rate limit may be reduced for any of the following reasons: 1. The Levy Limit: the levy limit calculation applies to a taxing district’s budget, and not to increases in the assessed value or tax bill of individual properties. Initiative 747 restricts 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. 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. 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-34 Security Type 0-6 months 6 months – 1 year 1-3 years 3+ years Totals US Agencies $0 $0 $0 $2,823,773 $2,823,773 Certificates of Deposit (within WPDPC) 0 31,000,000 8,000,000 0 39,000,000 Local Governmental Investment Pool (LGIP) 32,130,605 0 0 0 32,130,605 Municipal Investor Account (MIA) 10,030,148 0 0 0 10,030,148 TOTAL $42,160,753 $31,000,000 $8,000,000 $2,823,773 $83,984,527 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 $3.375 per $1,000 of assessed value (RCW 84.52.043). Of this amount, up to .45 cents per thousand dollars may be designated for contribution to the Firemen’s Pension Fund. If a report by a qualified actuary on the condition of the Firemen’s Pension Fund establishes that this amount (or portion of) is not necessary to maintain the actuarial soundness of the fund, the amount can be used for any other municipal purpose (RCW 41.16.060). The tax rate limit may be reduced for any of the following reasons: 1. The Levy Limit: the levy limit calculation applies to a taxing district’s budget, and not to increases in the assessed value or tax bill of individual properties. Initiative 747 restricts 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. 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. 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-35 2. The One Percent Constitution Limit: The Washington State Constitution limits the regular (non-voted) combined property tax rate applied to an individual’s property to one percent ($10 per $1,000) on the market valuation. Voters may approve special levies that are added to this figure. If the taxes of all districts exceed this amount, each is proportionately reduced until the total is at or below the one percent limit. 3. The City may voluntarily levy taxes below the legal limit. Special levies approved by the voters are not subject to the above limitations. The City’s regular levy for 2006 is $3.04482 and the excess levy for General Obligation Bond debt is $.07088 for a total of $3.1157, per the King County Assessor’s 2006 Annual Report. NOTE 5. CAPITAL ASSETS AND DEPRECIATION A. GENERAL POLICES 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 lower of cost or fair market value when transferred between proprietary and governmental funds.) The City has acquired certain assets with funding provided by federal financial assistance programs. Depending on the terms of the agreements involved, the federal government could retain an interest in these assets. However, the City has sufficient legal interest to accomplish the purposes for which the assets were acquired, and has included such assets within the applicable statements. The City capitalizes art and historical treasures. Art and historical treasures are expected to be maintained or enhanced over time and thus, are not depreciated. B. GOVERNMENTAL CAPITAL ASSETS Governmental long-lived assets of the City purchased, leased, or constructed are recorded as expenditures in the governmental funds and are capitalized, net of depreciation, in the Government-wide statements. C. PROPRIETARY FUND CAPITAL ASSETS Capital assets of proprietary funds are capitalized in their respective statement of net assets, net of depreciation. 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-35 2. The One Percent Constitution Limit: The Washington State Constitution limits the regular (non-voted) combined property tax rate applied to an individual’s property to one percent ($10 per $1,000) on the market valuation. Voters may approve special levies that are added to this figure. If the taxes of all districts exceed this amount, each is proportionately reduced until the total is at or below the one percent limit. 3. The City may voluntarily levy taxes below the legal limit. Special levies approved by the voters are not subject to the above limitations. The City’s regular levy for 2006 is $3.04482 and the excess levy for General Obligation Bond debt is $.07088 for a total of $3.1157, per the King County Assessor’s 2006 Annual Report. NOTE 5. CAPITAL ASSETS AND DEPRECIATION A. GENERAL POLICES 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 lower of cost or fair market value when transferred between proprietary and governmental funds.) The City has acquired certain assets with funding provided by federal financial assistance programs. Depending on the terms of the agreements involved, the federal government could retain an interest in these assets. However, the City has sufficient legal interest to accomplish the purposes for which the assets were acquired, and has included such assets within the applicable statements. The City capitalizes art and historical treasures. Art and historical treasures are expected to be maintained or enhanced over time and thus, are not depreciated. B. GOVERNMENTAL CAPITAL ASSETS Governmental long-lived assets of the City purchased, leased, or constructed are recorded as expenditures in the governmental funds and are capitalized, net of depreciation, in the Government-wide statements. C. PROPRIETARY FUND CAPITAL ASSETS Capital assets of proprietary funds are capitalized in their respective statement of net assets, net of depreciation. 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-36 D. DEPRECIATION Depreciation on all depreciable assets is provided on the straight-line basis over the following useful lives: Type of Asset Estimated Service Life Buildings and structures, except utility plant 25-50 years Other improvements 25-50 years Utility plant 25-75 years Machinery and equipment 3-20 years Infrastructure 25-50 years Depreciation Expense was charged to governmental and business-type activities as follows: Governmental Activities Amount General government $3,329,655 Judicial 0 Security of persons and property 647,608 Physical environment 15,652 Transportation 2,075,736 Economic development 293,107 Culture and recreation 1,256,455 Health and human services 54,598 TOTAL Governmental Activities Depreciation Expense $7,672,811 Business-type Activities Amount Waterworks $5,462,690 Airport 381,043 Solid waste 3,939 Golf course 267,552 TOTAL Business-type Activities Depreciation Expense $6,115,224 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-36 D. DEPRECIATION Depreciation on all depreciable assets is provided on the straight-line basis over the following useful lives: Type of Asset Estimated Service Life Buildings and structures, except utility plant 25-50 years Other improvements 25-50 years Utility plant 25-75 years Machinery and equipment 3-20 years Infrastructure 25-50 years Depreciation Expense was charged to governmental and business-type activities as follows: Governmental Activities Amount General government $3,329,655 Judicial 0 Security of persons and property 647,608 Physical environment 15,652 Transportation 2,075,736 Economic development 293,107 Culture and recreation 1,256,455 Health and human services 54,598 TOTAL Governmental Activities Depreciation Expense $7,672,811 Business-type Activities Amount Waterworks $5,462,690 Airport 381,043 Solid waste 3,939 Golf course 267,552 TOTAL Business-type Activities Depreciation Expense $6,115,224 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-37 E. SUMMARY OF CHANGES Description Beginning Balance Increases Decreases Ending Balance GOVERNMENTAL ACTIVITIES Capital assets not being depreciated: Land and land improvements $81,997,215 $3,938,992 $0 $85,936,207 Construction in progress 15,819,455 14,496,673 5,944,345 24,371,783 TOTAL capital not being depreciated $97,816,670 $18,435,665 $5,944,345 $110,307,990 Other capital assets: Buildings and structures $73,605,992 $17,772 $0 $73,623,764 Other improvements 102,371,218 9,673,029 0 112,044,247 Machinery and equipment 23,955,401 4,750,082 1,941,785 26,763,698 TOTAL other capital assets at capitalized cost $199,932,611 $14,440,883 $1,941,785 $212,431,709 Less accumulated depreciation for: Buildings and structures $18,163,965 $1,915,583 $0 $20,079,548 Other improvements 31,929,633 2,867,033 0 34,796,666 Machinery and equipment 13,342,727 2,890,195 1,735,646 14,497,276 TOTAL accumulated depreciation $63,436,325 $7,672,811 $1,735,646 $69,373,490 Governmental activities capital assets, net of depreciation $234,312,956 $25,203,737 $6,150,484 $253,366,209 BUSINESS-TYPE ACTIVITIES Capital assets not being depreciated: Land and land improvements $6,976,321 $0 $0 $6,976,321 Construction in progress 2,512,285 2,860,487 1,246,657 4,126,115 TOTAL capital assets not being depreciated $9,488,606 $2,860,487 $1,246,657 $11,102,436 Other capital assets Buildings and structures $15,032,621 $0 $0 $15,032,621 Other improvements 259,558,408 10,220,868 31,237 269,748,039 Machinery and equipment 5,729,498 134,965 0 5,864,463 TOTAL other capital assets at capitalized cost $280,320,527 $10,355,833 $31,237 $290,645,123 Less accumulated depreciation for: Buildings and structures $3,565,120 $335,959 $4 $3,901,075 Other improvements 62,283,413 5,624,327 31,237 67,876,503 Machinery and equipment 4,753,074 154,938 0 4,908,012 TOTAL accumulated depreciation $70,601,607 $6,115,224 $31,241 $76,685,590 Business-type capital assets, net of depreciation $219,207,526 $7,101,096 $1,246,653 $225,061,969 At the end of 2006, 65 projects comprise the Construction in Progress. Upon completion, the projects will be capitalized in the Government-wide statements in their appropriate categories and in the fund statements for proprietary funds, if applicable. Construction commitments at December 31, 2006, are as follows: 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-37 E. SUMMARY OF CHANGES Description Beginning Balance Increases Decreases Ending Balance GOVERNMENTAL ACTIVITIES Capital assets not being depreciated: Land and land improvements $81,997,215 $3,938,992 $0 $85,936,207 Construction in progress 15,819,455 14,496,673 5,944,345 24,371,783 TOTAL capital not being depreciated $97,816,670 $18,435,665 $5,944,345 $110,307,990 Other capital assets: Buildings and structures $73,605,992 $17,772 $0 $73,623,764 Other improvements 102,371,218 9,673,029 0 112,044,247 Machinery and equipment 23,955,401 4,750,082 1,941,785 26,763,698 TOTAL other capital assets at capitalized cost $199,932,611 $14,440,883 $1,941,785 $212,431,709 Less accumulated depreciation for: Buildings and structures $18,163,965 $1,915,583 $0 $20,079,548 Other improvements 31,929,633 2,867,033 0 34,796,666 Machinery and equipment 13,342,727 2,890,195 1,735,646 14,497,276 TOTAL accumulated depreciation $63,436,325 $7,672,811 $1,735,646 $69,373,490 Governmental activities capital assets, net of depreciation $234,312,956 $25,203,737 $6,150,484 $253,366,209 BUSINESS-TYPE ACTIVITIES Capital assets not being depreciated: Land and land improvements $6,976,321 $0 $0 $6,976,321 Construction in progress 2,512,285 2,860,487 1,246,657 4,126,115 TOTAL capital assets not being depreciated $9,488,606 $2,860,487 $1,246,657 $11,102,436 Other capital assets Buildings and structures $15,032,621 $0 $0 $15,032,621 Other improvements 259,558,408 10,220,868 31,237 269,748,039 Machinery and equipment 5,729,498 134,965 0 5,864,463 TOTAL other capital assets at capitalized cost $280,320,527 $10,355,833 $31,237 $290,645,123 Less accumulated depreciation for: Buildings and structures $3,565,120 $335,959 $4 $3,901,075 Other improvements 62,283,413 5,624,327 31,237 67,876,503 Machinery and equipment 4,753,074 154,938 0 4,908,012 TOTAL accumulated depreciation $70,601,607 $6,115,224 $31,241 $76,685,590 Business-type capital assets, net of depreciation $219,207,526 $7,101,096 $1,246,653 $225,061,969 At the end of 2006, 65 projects comprise the Construction in Progress. Upon completion, the projects will be capitalized in the Government-wide statements in their appropriate categories and in the fund statements for proprietary funds, if applicable. Construction commitments at December 31, 2006, are as follows: 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-38 Fund – Funding Source Cost to Date Estimated Remaining Cost Estimated Total Cost Future Funding Required Waterworks – charges for services $3,073,672 $58,340,000 $61,413,672 None Airport – charges for services 1,052,443 7,215,000 8,267,443 None General governmental – taxes, charges for services, grants 24,371,783 179,348,000 203,719,783 None Golf course – charges for services 1,300,000 1,300,000 None NOTE 6. PENSIONS With the exception of firefighters employed prior to March 1, 1970, substantially all City’s full- time and qualifying part-time employees participate in one of the following statewide retirement systems administered by the Washington State Department of Retirement Systems, under cost- sharing multiple-employer public employee defined benefit and defined contribution retirement plans. The Department of Retirement Systems (DRS), a department within the primary government of the State of Washington, issues a publicly available comprehensive annual financial report (CAFR) that includes financial statements and required supplementary information for each plan. The DRS CAFR may be obtained by writing to: Department of Retirement Systems, Communications Unit, PO Box 48380, Olympia, WA 98504-8380. The City is the administrator of the Firefighter Pension Plan for all firefighters employed prior to March 1, 1970. The Firefighter Pension Plan is included within the City of Renton’s statements as a pension trust fund. There is no separate GAAP-based audited report. A schedule of employer contributions for six years, prepared by Milliman, Consultants and Actuaries, is included in the Required Supplemental Information section. Additional information from the actuarial report prepared for the Firefighter Pension Plan, by Milliman, Consultants and Actuaries, may be obtained by contacting the City of Renton, Finance Division, 1055 South Grady Way, Renton, WA 98057. The following disclosures are made pursuant to GASB Statement No. 25, Financial Reporting for Defined Benefit Pension Plans and Note Disclosures for Defined Contribution Plans and GASB Statement No. 27, Accounting for Pensions by State and Local Government Employers. Public Employees Retirement System (PERS) Plans 1, 2, and 3 Plan Description PERS is a cost-sharing multiple-employer retirement system comprised of three separate plans for membership purposes: Plans 1 and 2 are defined benefit plans and Plan 3 is a defined benefit plan with a defined contribution component. 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, 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-38 Fund – Funding Source Cost to Date Estimated Remaining Cost Estimated Total Cost Future Funding Required Waterworks – charges for services $3,073,672 $58,340,000 $61,413,672 None Airport – charges for services 1,052,443 7,215,000 8,267,443 None General governmental – taxes, charges for services, grants 24,371,783 179,348,000 203,719,783 None Golf course – charges for services 1,300,000 1,300,000 None NOTE 6. PENSIONS With the exception of firefighters employed prior to March 1, 1970, substantially all City’s full- time and qualifying part-time employees participate in one of the following statewide retirement systems administered by the Washington State Department of Retirement Systems, under cost- sharing multiple-employer public employee defined benefit and defined contribution retirement plans. The Department of Retirement Systems (DRS), a department within the primary government of the State of Washington, issues a publicly available comprehensive annual financial report (CAFR) that includes financial statements and required supplementary information for each plan. The DRS CAFR may be obtained by writing to: Department of Retirement Systems, Communications Unit, PO Box 48380, Olympia, WA 98504-8380. The City is the administrator of the Firefighter Pension Plan for all firefighters employed prior to March 1, 1970. The Firefighter Pension Plan is included within the City of Renton’s statements as a pension trust fund. There is no separate GAAP-based audited report. A schedule of employer contributions for six years, prepared by Milliman, Consultants and Actuaries, is included in the Required Supplemental Information section. Additional information from the actuarial report prepared for the Firefighter Pension Plan, by Milliman, Consultants and Actuaries, may be obtained by contacting the City of Renton, Finance Division, 1055 South Grady Way, Renton, WA 98057. The following disclosures are made pursuant to GASB Statement No. 25, Financial Reporting for Defined Benefit Pension Plans and Note Disclosures for Defined Contribution Plans and GASB Statement No. 27, Accounting for Pensions by State and Local Government Employers. Public Employees Retirement System (PERS) Plans 1, 2, and 3 Plan Description PERS is a cost-sharing multiple-employer retirement system comprised of three separate plans for membership purposes: Plans 1 and 2 are defined benefit plans and Plan 3 is a defined benefit plan with a defined contribution component. 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, 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-39 2002 for state and higher education employees, or August 31, 2002 for local government employees, are Plan 2 members unless they exercise an option to transfer their membership to Plan 3. PERS participants joining the system on or after March 1, 2002 for state and higher education employees, or September 1, 2002 for local government employees, have the irrevocable option of choosing membership in either PERS Plan 2 or PERS Plan 3. The option must be exercised within 90 days of employment. An employee is reported in Plan 2 until a choice is made. Employees who fail to choose within 90 days default to PERS Plan 3. PERS defined benefit retirement benefits are financed from a combination of investment earnings and employer and employee contributions. PERS retirement benefit provisions are established in state statute and may be amended only by the State Legislature. Plan 1 retirement benefits are vested after an employee completes five years of eligible service. Plan 1 members are eligible for retirement at any age after 30 years of service, or at age 60 with five years of service, or at age 55 with 25 years of service. The annual benefit is 2 percent of the average final compensation per year of service, capped at 60 percent. The average final compensation is based on the greatest compensation during any 24 eligible consecutive compensation months. If qualified, after reaching age 66, a cost-of-living allowance is granted based on years of service credit and is capped at 3 percent annually. Plan 2 retirement benefits are vested after an employee completes five years of eligible service. Plan 2 members may retire at age 65 with five years of service, or at 55 with 20 years of service, with an allowance of 2 percent of the average final compensation per year of service. The average final compensation is based on the greatest compensation during any eligible consecutive 60-month period. Plan 2 retirements prior to age 65 receive reduced benefits. If retirement is at age 55 or older with 30 years of service, a 3 percent per year reduction applies; otherwise an actuarial reduction will apply. There is no cap on years of service credit; and a cost-of-living allowance is granted (indexed to the Seattle Consumer Price Index), capped at 3 percent annually. Plan 3 has a dual benefit structure. Employer contributions finance a defined benefit component, and member contributions finance a defined contribution component. The defined benefit portion provides a benefit calculation at 1 percent of the average final compensation per year of service. The average final compensation is based on the greatest compensation during any eligible consecutive 60-month period. 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 that were earned after age 44; or after five service credit years earned in PERS 2 prior to June 1, 2003. Plan 3 members are immediately vested in the defined contribution portion of their plan. Vested Plan 3 members are eligible to retire with full benefits at age 65, or at age 55 with 10 years of service. Retirements prior to age 65 receive reduced benefits. If retirement is at age 55 or older with at least 30 years if service, a 3 percent per year reduction applies; otherwise an actuarial reduction will apply. The benefit is also actuarially reduced to reflect the choice of a survivor option. There is no cap on years of service credit; and Plan 3 provides the same cost-of- living allowance as Plan 2. The defined contribution portion can be distributed in accordance with an option selected by the member, either as a lump sum or pursuant to other options authorized by the Employee Retirement Benefits Board. 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-39 2002 for state and higher education employees, or August 31, 2002 for local government employees, are Plan 2 members unless they exercise an option to transfer their membership to Plan 3. PERS participants joining the system on or after March 1, 2002 for state and higher education employees, or September 1, 2002 for local government employees, have the irrevocable option of choosing membership in either PERS Plan 2 or PERS Plan 3. The option must be exercised within 90 days of employment. An employee is reported in Plan 2 until a choice is made. Employees who fail to choose within 90 days default to PERS Plan 3. PERS defined benefit retirement benefits are financed from a combination of investment earnings and employer and employee contributions. PERS retirement benefit provisions are established in state statute and may be amended only by the State Legislature. Plan 1 retirement benefits are vested after an employee completes five years of eligible service. Plan 1 members are eligible for retirement at any age after 30 years of service, or at age 60 with five years of service, or at age 55 with 25 years of service. The annual benefit is 2 percent of the average final compensation per year of service, capped at 60 percent. The average final compensation is based on the greatest compensation during any 24 eligible consecutive compensation months. If qualified, after reaching age 66, a cost-of-living allowance is granted based on years of service credit and is capped at 3 percent annually. Plan 2 retirement benefits are vested after an employee completes five years of eligible service. Plan 2 members may retire at age 65 with five years of service, or at 55 with 20 years of service, with an allowance of 2 percent of the average final compensation per year of service. The average final compensation is based on the greatest compensation during any eligible consecutive 60-month period. Plan 2 retirements prior to age 65 receive reduced benefits. If retirement is at age 55 or older with 30 years of service, a 3 percent per year reduction applies; otherwise an actuarial reduction will apply. There is no cap on years of service credit; and a cost-of-living allowance is granted (indexed to the Seattle Consumer Price Index), capped at 3 percent annually. Plan 3 has a dual benefit structure. Employer contributions finance a defined benefit component, and member contributions finance a defined contribution component. The defined benefit portion provides a benefit calculation at 1 percent of the average final compensation per year of service. The average final compensation is based on the greatest compensation during any eligible consecutive 60-month period. 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 that were earned after age 44; or after five service credit years earned in PERS 2 prior to June 1, 2003. Plan 3 members are immediately vested in the defined contribution portion of their plan. Vested Plan 3 members are eligible to retire with full benefits at age 65, or at age 55 with 10 years of service. Retirements prior to age 65 receive reduced benefits. If retirement is at age 55 or older with at least 30 years if service, a 3 percent per year reduction applies; otherwise an actuarial reduction will apply. The benefit is also actuarially reduced to reflect the choice of a survivor option. There is no cap on years of service credit; and Plan 3 provides the same cost-of- living allowance as Plan 2. The defined contribution portion can be distributed in accordance with an option selected by the member, either as a lump sum or pursuant to other options authorized by the Employee Retirement Benefits Board. 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-40 There are 1,181 participating employers in PERS. Membership in PERS consisted of the following as of the latest actuarial valuation date for the plans of September 30, 2005: Retirees and beneficiaries receiving benefits 68,609 Terminated plan members entitled to but not yet receiving benefits 22,567 Active plan members vested 104,574 Active plan members non-vested 51,004 TOTAL 246,754 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 6 percent for state agencies and local government unit employees, and 7.5 percent for state government elected officers. The employer and employee rates for Plan 2 and the employer contribution rates for Plan 3 are developed by the Office of the State Actuary to fully fund Plan 2 and the defined benefit portion of Plan 3. All employers are required to contribute at the level established by the Legislature. Under PERS 3, employer contributions finance the defined benefit portion of the plan, and member contributions finance the defined contribution portion. The Employee Retirement Benefits Board sets Plan 3 employee contribution rates. Six rate options are available ranging from 5 to 15 percent; two of the options are graduated rates dependent on the employee’s age. The methods used to determine the contribution requirements are established under state statute in accordance with Chapters 41.40 and 41.45 RCW. The required contribution rates expressed as a percentage of current-year covered payroll, as of December 31, 2006, were as follows: Contributor PERS Plan 1 PERS Plan 2 PERS Plan 3 Employer* 3.69 %** 3.69% 3.69%**** Employee 6.00%*** 3.50% ***** * The employer rates include the employer administration expense fee currently at .18%. ** The employer rate for state elected officials is 5.44%. *** The employee rate for state elected officials is 7.50%. **** Plan 3 defined benefit portion only. ***** Variable from 5.0% minimum to 15.0% maximum based on rate selected by the PERS 3 member. 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 2006 $50,609 $616,903 $92,216 2005 33,340 367,240 51,521 2004 25,977 252,464 35,737 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-40 There are 1,181 participating employers in PERS. Membership in PERS consisted of the following as of the latest actuarial valuation date for the plans of September 30, 2005: Retirees and beneficiaries receiving benefits 68,609 Terminated plan members entitled to but not yet receiving benefits 22,567 Active plan members vested 104,574 Active plan members non-vested 51,004 TOTAL 246,754 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 6 percent for state agencies and local government unit employees, and 7.5 percent for state government elected officers. The employer and employee rates for Plan 2 and the employer contribution rates for Plan 3 are developed by the Office of the State Actuary to fully fund Plan 2 and the defined benefit portion of Plan 3. All employers are required to contribute at the level established by the Legislature. Under PERS 3, employer contributions finance the defined benefit portion of the plan, and member contributions finance the defined contribution portion. The Employee Retirement Benefits Board sets Plan 3 employee contribution rates. Six rate options are available ranging from 5 to 15 percent; two of the options are graduated rates dependent on the employee’s age. The methods used to determine the contribution requirements are established under state statute in accordance with Chapters 41.40 and 41.45 RCW. The required contribution rates expressed as a percentage of current-year covered payroll, as of December 31, 2006, were as follows: Contributor PERS Plan 1 PERS Plan 2 PERS Plan 3 Employer* 3.69 %** 3.69% 3.69%**** Employee 6.00%*** 3.50% ***** * The employer rates include the employer administration expense fee currently at .18%. ** The employer rate for state elected officials is 5.44%. *** The employee rate for state elected officials is 7.50%. **** Plan 3 defined benefit portion only. ***** Variable from 5.0% minimum to 15.0% maximum based on rate selected by the PERS 3 member. 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 2006 $50,609 $616,903 $92,216 2005 33,340 367,240 51,521 2004 25,977 252,464 35,737 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-41 Law Enforcement Officers’ and Firefighters’ Retirement System (LEOFF) Plans 1 and 2 Plan Description LEOFF is a cost-sharing multiple-employer retirement system comprised of two separate defined benefit plans. LEOFF participants who joined the system by September 30, 1977, are Plan 1 members. Those who joined on or after October 1, 1977, are Plan 2 members. Membership in the system includes all full-time, fully compensated; local law enforcement officers and firefighters. LEOFF membership is comprised primarily of non-state employees, with the exception of the Department of Fish and Wildlife enforcement officers, who were first included prospectively effective July 27, 2003, being an exception. In addition, effective July 24, 2005, current members of PERS who are emergency medical technicians can elect to become members of LEOFF Plan 2. Effective July 1, 2003, the LEOFF Plan 2 Retirement Board was established to provide governance of LEOFF Plan 2. The Board’s duties include adopting contribution rates and recommending policy changes to the Legislature for the LEOFF Plan 2 retirement plan. LEOFF defined benefits are financed from a combination of investment earnings, employer and employee contributions, and a special funding situation in which the state pays the remainder through state legislative appropriations. LEOFF retirement benefit provisions are established in state statute and may be amended by the State Legislature. Plan 1 retirement benefits are vested after an employee completes five years of eligible service. Plan 1 members are eligible for retirement with five years of service at the age of 50. The benefit per year of service calculated as a percent of final average salary is as follows: Term of Service Percent of Final Average Salary 20 or more years 2.0% 10 but less than 20 years 1.5% 5 but less than 10 years 1.0% The final average salary is the basic monthly salary received at the time of retirement, provided a member has held the same position or rank for 12 months preceding the date of retirement. Otherwise, it is the average of the highest consecutive 24 months’ salary within the last 10 years of service. If membership was established in LEOFF after February 18, 1974, the service retirement benefit is capped at 60 percent of final average salary. A cost-of-living allowance is granted (indexed to the Seattle Consumer Price Index.) Plan 2 retirement benefits are vested after an employee completes 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 2 percent of the final average salary per year of service. The final average salary is based on the highest consecutive 60 months. Plan 2 retirements prior to age 53 are reduced 3 percent for each year that the benefit commences prior to age 53 and to reflect the choice of a survivor option. There is no cap on years of service credit; and a cost-of- living allowance is granted (indexed to the Seattle Consumer Price Index), capped at 3 percent annually. 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-41 Law Enforcement Officers’ and Firefighters’ Retirement System (LEOFF) Plans 1 and 2 Plan Description LEOFF is a cost-sharing multiple-employer retirement system comprised of two separate defined benefit plans. LEOFF participants who joined the system by September 30, 1977, are Plan 1 members. Those who joined on or after October 1, 1977, are Plan 2 members. Membership in the system includes all full-time, fully compensated; local law enforcement officers and firefighters. LEOFF membership is comprised primarily of non-state employees, with the exception of the Department of Fish and Wildlife enforcement officers, who were first included prospectively effective July 27, 2003, being an exception. In addition, effective July 24, 2005, current members of PERS who are emergency medical technicians can elect to become members of LEOFF Plan 2. Effective July 1, 2003, the LEOFF Plan 2 Retirement Board was established to provide governance of LEOFF Plan 2. The Board’s duties include adopting contribution rates and recommending policy changes to the Legislature for the LEOFF Plan 2 retirement plan. LEOFF defined benefits are financed from a combination of investment earnings, employer and employee contributions, and a special funding situation in which the state pays the remainder through state legislative appropriations. LEOFF retirement benefit provisions are established in state statute and may be amended by the State Legislature. Plan 1 retirement benefits are vested after an employee completes five years of eligible service. Plan 1 members are eligible for retirement with five years of service at the age of 50. The benefit per year of service calculated as a percent of final average salary is as follows: Term of Service Percent of Final Average Salary 20 or more years 2.0% 10 but less than 20 years 1.5% 5 but less than 10 years 1.0% The final average salary is the basic monthly salary received at the time of retirement, provided a member has held the same position or rank for 12 months preceding the date of retirement. Otherwise, it is the average of the highest consecutive 24 months’ salary within the last 10 years of service. If membership was established in LEOFF after February 18, 1974, the service retirement benefit is capped at 60 percent of final average salary. A cost-of-living allowance is granted (indexed to the Seattle Consumer Price Index.) Plan 2 retirement benefits are vested after an employee completes 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 2 percent of the final average salary per year of service. The final average salary is based on the highest consecutive 60 months. Plan 2 retirements prior to age 53 are reduced 3 percent for each year that the benefit commences prior to age 53 and to reflect the choice of a survivor option. There is no cap on years of service credit; and a cost-of- living allowance is granted (indexed to the Seattle Consumer Price Index), capped at 3 percent annually. 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-42 There are 376 participating employers in LEOFF. Membership in LEOFF consisted of the following as of the latest actuarial valuation date for the plans of September 30, 2005: Retirees and beneficiaries receiving benefits 8,723 Terminated plan members entitled to but not yet receiving benefits 577 Active plan members vested 12,348 Active plan members non-vested 3,543 TOTAL 25,191 Funding Policy Starting on July 1, 2000, Plan 1 employers and employees will contribute zero percent as long as the plan remains fully funded. Employer and employee contribution rates are developed by the Office of the State Actuary to fully fund the plan. Plan 2 employer and employees are required to pay at the level adopted by the LEOFF Plan 2 Retirement Board in accordance with Chapter 41.45 RCW. All employers are required to contribute at the level required by state law. The Legislature has the ability, by means of a special funding arrangement, to appropriated money from the state General Fund to supplement the current service liability and fund the prior service cost of Plan 1 and 2 in accordance with the requirements of the Pension Funding Council. 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, 2006, were as follows: Contributor LEOFF Plan 1 LEOFF Plan 2 Employer* .18% 4.90%** Employee .00% 7.85% State N/A 3.13% * The employer rates include the employer administration expense fee currently at .18%. ** The employer rate for ports and universities is 8.03%. 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 2006 $2,050 $716,583 2005 2,554 549,001 2004 3,128 433,463 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 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-42 There are 376 participating employers in LEOFF. Membership in LEOFF consisted of the following as of the latest actuarial valuation date for the plans of September 30, 2005: Retirees and beneficiaries receiving benefits 8,723 Terminated plan members entitled to but not yet receiving benefits 577 Active plan members vested 12,348 Active plan members non-vested 3,543 TOTAL 25,191 Funding Policy Starting on July 1, 2000, Plan 1 employers and employees will contribute zero percent as long as the plan remains fully funded. Employer and employee contribution rates are developed by the Office of the State Actuary to fully fund the plan. Plan 2 employer and employees are required to pay at the level adopted by the LEOFF Plan 2 Retirement Board in accordance with Chapter 41.45 RCW. All employers are required to contribute at the level required by state law. The Legislature has the ability, by means of a special funding arrangement, to appropriated money from the state General Fund to supplement the current service liability and fund the prior service cost of Plan 1 and 2 in accordance with the requirements of the Pension Funding Council. 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, 2006, were as follows: Contributor LEOFF Plan 1 LEOFF Plan 2 Employer* .18% 4.90%** Employee .00% 7.85% State N/A 3.13% * The employer rates include the employer administration expense fee currently at .18%. ** The employer rate for ports and universities is 8.03%. 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 2006 $2,050 $716,583 2005 2,554 549,001 2004 3,128 433,463 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 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-43 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, 2006, there were 42 members in the System: Retirees and beneficiaries receiving benefits 38 Retirees and beneficiaries currently receiving full retirement through LEOFF 4 Active plan members vested 0 Active plan members non-vested 0 TOTAL 42 Funding Policy Under state law, the Firefighter’s Pension Plan is provided an allocation of all monies received by the state from taxes on fire insurance premiums; interest earnings; member contributions made prior to the inception of LEOFF; and City contributions required to meet projected future pension obligations. Costs of administering the Firefighter’s Pension Plan are paid by the Plan. For 2006, this cost was $7,216. An actuarial valuation is done every two years and was completed as of January 1, 2007. The Actuarial Valuation of Firefighters’ Pension Fund table is reported in the Required Supplemental Information section, and a recap of the Schedule of Funding Progress for the last five valuations is as follows: Valuation Date January 1 Actuarial Value of Assets (rounded to thousands) Actuarial Accrued Liabilities Entry Age (rounded to thousands) Unfunded Actuarial Accrued Liabilities (UAAL) (rounded to Funded Ratio Covered Payroll (rounded to thousands) UAAL as a % of Covered Payroll 1997 $5,238 $6,444 $1,206 81% $260 464% 2001 7,067 6,780 (287) 104% 0 - 2003 9,189 6,472 (2,717) 142% 0 - 2005 7,777 6,254 *(1,523) 124% 0 - 2007 7,847 6,364 (1,483) 123% 0 - * A $29 decrease in the actuarial accrued liabilities was made after the City’s financial report was published and before the valuation was released. Significant actuarial assumptions used in the January 1, 2007, valuation include: Valuation date: January 1, 2007 Actuarial cost method: entry age normal Amortization method: 30-year, closed as of January 1, 2000 Remaining amortization period: 23 years Asset valuation method: fair value Actuarial assumptions: 1) investment rate of return – 5%; 2) projected salary increases – 4%; 3) inflation – 3%; and, 4) cost-of-living adjustments – based upon salary increase assumption for FPF benefits, inflation assumption for LEOFF benefits. 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-43 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, 2006, there were 42 members in the System: Retirees and beneficiaries receiving benefits 38 Retirees and beneficiaries currently receiving full retirement through LEOFF 4 Active plan members vested 0 Active plan members non-vested 0 TOTAL 42 Funding Policy Under state law, the Firefighter’s Pension Plan is provided an allocation of all monies received by the state from taxes on fire insurance premiums; interest earnings; member contributions made prior to the inception of LEOFF; and City contributions required to meet projected future pension obligations. Costs of administering the Firefighter’s Pension Plan are paid by the Plan. For 2006, this cost was $7,216. An actuarial valuation is done every two years and was completed as of January 1, 2007. The Actuarial Valuation of Firefighters’ Pension Fund table is reported in the Required Supplemental Information section, and a recap of the Schedule of Funding Progress for the last five valuations is as follows: Valuation Date January 1 Actuarial Value of Assets (rounded to thousands) Actuarial Accrued Liabilities Entry Age (rounded to thousands) Unfunded Actuarial Accrued Liabilities (UAAL) (rounded to Funded Ratio Covered Payroll (rounded to thousands) UAAL as a % of Covered Payroll 1997 $5,238 $6,444 $1,206 81% $260 464% 2001 7,067 6,780 (287) 104% 0 - 2003 9,189 6,472 (2,717) 142% 0 - 2005 7,777 6,254 *(1,523) 124% 0 - 2007 7,847 6,364 (1,483) 123% 0 - * A $29 decrease in the actuarial accrued liabilities was made after the City’s financial report was published and before the valuation was released. Significant actuarial assumptions used in the January 1, 2007, valuation include: Valuation date: January 1, 2007 Actuarial cost method: entry age normal Amortization method: 30-year, closed as of January 1, 2000 Remaining amortization period: 23 years Asset valuation method: fair value Actuarial assumptions: 1) investment rate of return – 5%; 2) projected salary increases – 4%; 3) inflation – 3%; and, 4) cost-of-living adjustments – based upon salary increase assumption for FPF benefits, inflation assumption for LEOFF benefits. 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-44 The Annual Required Contribution (ARC) was computed using the Entry Age Normal Cost Method. Under this method the projected benefits are allocated on a level basis as a percentage of salary over the earnings of each individual between entry age and assumed exit age. The amount allocated to each year is called the Normal Cost and the portion of the Actuarial Present Value of all benefits not provided for by future Normal Cost payments is called the Actuarial Accrued Liability. Since all members have already retired, the amount of the Normal Cost is zero. The Unfunded Actuarial Accrued Liability (UAAL) is the Actuarial Accrued Liability minus the actuarial value of the Fund’s assets. The following Annual Pension Cost and Net Pension Obligation table presents the annual Normal Cost and the ARC as of January 1, 2007, assuming the UAAL is amortized over a closed 30-year period beginning January 1, 2000. Annual required contribution (ARC) 12/31/2005 Fiscal Year Ending 12/31/2006 Fiscal Year Ending 12/31/2007 Annual normal cost (BOY) $0 $0 $0 Amortization of UAAL (BOY) (107,622) (107,622) (104,731) Interest to end of year (EOY)* (5,919) (5,919) (5,237) ARC at EOY ($113,541) ($113,541) ($109,968) Interest on NPO ($24,553) ($33,604) ($38,658) Adjustment to ARC (31,545) (44,035) (54,591) Annual pension cost (APC) ($106,649) ($103,110) ($94,035) Employer contributions*** $58,029 $59,068 **$60,000 Change in NPO (164,578) (162,178) (154,035) NPO at BOY prior year ($446,410) ($610,988) ($733,166) NPO at EOY ($610,988) ($773,166) ($927,201) * Assumed interest rate: 5.5% in 2005 and 2006, 5.0% in 2007 ** Estimated amount to be replaced at year-end with actual *** Employer contributions are total contributions to the fund net of disbursements for medical and administrative expenses. The Annual Development of Pension Cost is recapped as follows: Fiscal Year Ending 12/31 ARC @ EOY* Interest on NPO ARC Adjustment Annual Pension Cost (APC) Total Employer Contributions Change in NPO 2002 $0 ($3,781) ($4,435) $654 $55,730 $(55,076) 2003 0 (7,088) (8,433) 1,347 63,088 (61,741) 2004 (205,680) (10,790) (13,047) (203,423) 63,151 (266,574) 2005 (113,541) (24,553) (31,545) (106,549) 58,029 (164,578) 2006 (113,541) (33,604) (44,035) (103,110) 59,068 (162,178) 2007 (109,868) (38,658) (54,591) (94,035) 60,000 (154,035) 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-44 The Annual Required Contribution (ARC) was computed using the Entry Age Normal Cost Method. Under this method the projected benefits are allocated on a level basis as a percentage of salary over the earnings of each individual between entry age and assumed exit age. The amount allocated to each year is called the Normal Cost and the portion of the Actuarial Present Value of all benefits not provided for by future Normal Cost payments is called the Actuarial Accrued Liability. Since all members have already retired, the amount of the Normal Cost is zero. The Unfunded Actuarial Accrued Liability (UAAL) is the Actuarial Accrued Liability minus the actuarial value of the Fund’s assets. The following Annual Pension Cost and Net Pension Obligation table presents the annual Normal Cost and the ARC as of January 1, 2007, assuming the UAAL is amortized over a closed 30-year period beginning January 1, 2000. Annual required contribution (ARC) 12/31/2005 Fiscal Year Ending 12/31/2006 Fiscal Year Ending 12/31/2007 Annual normal cost (BOY) $0 $0 $0 Amortization of UAAL (BOY) (107,622) (107,622) (104,731) Interest to end of year (EOY)* (5,919) (5,919) (5,237) ARC at EOY ($113,541) ($113,541) ($109,968) Interest on NPO ($24,553) ($33,604) ($38,658) Adjustment to ARC (31,545) (44,035) (54,591) Annual pension cost (APC) ($106,649) ($103,110) ($94,035) Employer contributions*** $58,029 $59,068 **$60,000 Change in NPO (164,578) (162,178) (154,035) NPO at BOY prior year ($446,410) ($610,988) ($733,166) NPO at EOY ($610,988) ($773,166) ($927,201) * Assumed interest rate: 5.5% in 2005 and 2006, 5.0% in 2007 ** Estimated amount to be replaced at year-end with actual *** Employer contributions are total contributions to the fund net of disbursements for medical and administrative expenses. The Annual Development of Pension Cost is recapped as follows: Fiscal Year Ending 12/31 ARC @ EOY* Interest on NPO ARC Adjustment Annual Pension Cost (APC) Total Employer Contributions Change in NPO 2002 $0 ($3,781) ($4,435) $654 $55,730 $(55,076) 2003 0 (7,088) (8,433) 1,347 63,088 (61,741) 2004 (205,680) (10,790) (13,047) (203,423) 63,151 (266,574) 2005 (113,541) (24,553) (31,545) (106,549) 58,029 (164,578) 2006 (113,541) (33,604) (44,035) (103,110) 59,068 (162,178) 2007 (109,868) (38,658) (54,591) (94,035) 60,000 (154,035) 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-45 Fiscal Year Ending December 31 NPO Balance (Gain)/ Loss Amort. Factor*** Amort. of (Gain)/ Loss Ending Balance 2002 ($118,095) ($55,730) 14.2105 ($4,435) ($118,095) 2003 (179,836) (63,088) 14.0032 (8,433) (179,836) 2004 (446,410) (268,831) 13.7834 (13,047) (446,410) 2005 (610,988) (171,570) 14.1517 (31,545) (610,988) 2006 (733,166) (172,609) 13.8750 (44,035) (773,166) 2007 (927,201) (189,988) 14.1630 (54,591) (927,201) Three year trend information is recapped as follows: Fiscal Year Ending December 31 Annual Pension Cost (APC) Contribution as a Percentage of APC Net Pension Obligation (NPO) 2005 ($106,549) N/A ($610,988) 2006 (103,110) N/A (773,166) 2007 (94,035)* N/A* (927,201)* *Amounts will be replaced at year-end with actual amounts. Employees are not required to make contributions. The contributions to the System for 2006 include $77,821 from fire insurance premiums and $202,598 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 2006, $414,281 was paid for benefit payments and $11,537 for medical payments. The Net Pension Obligation moves from ($610,988) to ($773,166) and is included, as an asset, in the City of Renton’s Governmental-wide Statement of Net Assets. NOTE 7. OTHER POST EMPLOYMENT BENEFITS In addition to the pension benefits described in Note 6, the City is required to pay post employment benefits in accordance with State statute to all LEOFF 1 (law enforcement officers and firefighters hired prior to October 1, 1977) and Fire Pension (firefighters hired prior to March 1, 1970) retirees. Currently there are 98 LEOFF 1 retirees who receive necessary medical and hospitalization coverage and five retirees who are covered solely by the Fire Pension Plan and receive medical coverage limited to treatment of service-related disabilities only. Expenditures for post employment health care benefits are recognized as retirees report claims. The City does not have a funding policy at this time and no assets are designated for this purpose. During the year, expenditures of $1,151,205 were recognized for post employment health care. State statute provides that the City's responsibility for medical payments of LEOFF I retirees is secondary to any other coverage retirees receive or are eligible to receive. The City recognizes a potential savings exists when retirees utilize Medicare as primary coverage and the City for secondary coverage and ineligible expenses. Therefore, upon reaching age 65, the City requires 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-45 Fiscal Year Ending December 31 NPO Balance (Gain)/ Loss Amort. Factor*** Amort. of (Gain)/ Loss Ending Balance 2002 ($118,095) ($55,730) 14.2105 ($4,435) ($118,095) 2003 (179,836) (63,088) 14.0032 (8,433) (179,836) 2004 (446,410) (268,831) 13.7834 (13,047) (446,410) 2005 (610,988) (171,570) 14.1517 (31,545) (610,988) 2006 (733,166) (172,609) 13.8750 (44,035) (773,166) 2007 (927,201) (189,988) 14.1630 (54,591) (927,201) Three year trend information is recapped as follows: Fiscal Year Ending December 31 Annual Pension Cost (APC) Contribution as a Percentage of APC Net Pension Obligation (NPO) 2005 ($106,549) N/A ($610,988) 2006 (103,110) N/A (773,166) 2007 (94,035)* N/A* (927,201)* *Amounts will be replaced at year-end with actual amounts. Employees are not required to make contributions. The contributions to the System for 2006 include $77,821 from fire insurance premiums and $202,598 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 2006, $414,281 was paid for benefit payments and $11,537 for medical payments. The Net Pension Obligation moves from ($610,988) to ($773,166) and is included, as an asset, in the City of Renton’s Governmental-wide Statement of Net Assets. NOTE 7. OTHER POST EMPLOYMENT BENEFITS In addition to the pension benefits described in Note 6, the City is required to pay post employment benefits in accordance with State statute to all LEOFF 1 (law enforcement officers and firefighters hired prior to October 1, 1977) and Fire Pension (firefighters hired prior to March 1, 1970) retirees. Currently there are 98 LEOFF 1 retirees who receive necessary medical and hospitalization coverage and five retirees who are covered solely by the Fire Pension Plan and receive medical coverage limited to treatment of service-related disabilities only. Expenditures for post employment health care benefits are recognized as retirees report claims. The City does not have a funding policy at this time and no assets are designated for this purpose. During the year, expenditures of $1,151,205 were recognized for post employment health care. State statute provides that the City's responsibility for medical payments of LEOFF I retirees is secondary to any other coverage retirees receive or are eligible to receive. The City recognizes a potential savings exists when retirees utilize Medicare as primary coverage and the City for secondary coverage and ineligible expenses. Therefore, upon reaching age 65, the City requires 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-46 the retirees to apply for and utilize Medicare Part B coverage. The City reimburses these Medicare premiums at an average cost of approximately $88.50 per month for 47 LEOFF I retirees and five Fire Pension retirees. 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. Bond Indentures The City is in compliance with all significant bond indenture and restrictions. 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: 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-46 the retirees to apply for and utilize Medicare Part B coverage. The City reimburses these Medicare premiums at an average cost of approximately $88.50 per month for 47 LEOFF I retirees and five Fire Pension retirees. 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. Bond Indentures The City is in compliance with all significant bond indenture and restrictions. 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: 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-47 Type of Coverage Risk Retention Occurrence Claims Administrator Aggregate Amount Carrier Property $25,000 WA Cities Ins Authority $500,000,000 (per occurrence subject to sub-limits) WA Cities Ins Authority Liability 250,000 WA Cities Ins Authority 14,000,000 (per occurrence) WA Cities Ins Authority Auto Liability 250,000 WA Cities Ins Authority 14,000,000 (per occurrence) WA Cities Ins Authority Equipment breakdown 5,000* Arthur J. Gallagher 50,000,000 Zurich Public officers 250,000 WA Cities Ins Authority 10,000,000 WA Cities Ins Authority Crime 10,000 Arthur J. Gallagher 1,000,000 Travelers Casualty & Surety Airport liability 0 Arthur J. Gallagher 100,000,000 Ace Property & Casualty Underground storage tank 5,000 Arthur J. Gallagher 1,000,000 Commerce & Industry Worker’s comp 350,000 Berkley Risk 1,000,000 Midwest Casualty Employee health 140,000 HMA, Inc N/A SunLife * There is a 4-hour utility interruption clause, prior to the deductible becoming applicable. During 2006, there were no reductions in insurance coverage, and settlements for the last three years have not exceeded insurance coverage. The City of Renton is a member of the Washington Cities Insurance Authority (WCIA). Utilizing Chapter 48.62 RCW (self-insurance regulation) and Chapter 39.34 RCW (Interlocal Cooperation Act), nine cities originally formed WCIA on January 1, 1981. WCIA was created for the purpose of providing a pooling mechanism for jointly purchasing insurance, jointly self- insuring, and/or jointly contracting for risk management services. WCIA has a total of 121 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, stopgap, and employee benefits liability. Limits are $3 million per occurrence self insured layer, and $12 million per occurrence in the re-insured excess layer with no annual aggregate except $10 million per member for public officials’ errors and omissions. The excess layer is insured by the purchase of reinsurance and insurance. Total limits are $15 million per occurrence subject to aggregate sublimits in the excess layers. The Board of Directors determines the limits and terms of coverage annually. Insurance coverage for property, automobile physical damage, fidelity, inland marine, and boiler and machinery are purchased on a group basis. Various deductibles apply by type of coverage. Property insurance and auto physical damage are self-funded from the members’ deductible to 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-47 Type of Coverage Risk Retention Occurrence Claims Administrator Aggregate Amount Carrier Property $25,000 WA Cities Ins Authority $500,000,000 (per occurrence subject to sub-limits) WA Cities Ins Authority Liability 250,000 WA Cities Ins Authority 14,000,000 (per occurrence) WA Cities Ins Authority Auto Liability 250,000 WA Cities Ins Authority 14,000,000 (per occurrence) WA Cities Ins Authority Equipment breakdown 5,000* Arthur J. Gallagher 50,000,000 Zurich Public officers 250,000 WA Cities Ins Authority 10,000,000 WA Cities Ins Authority Crime 10,000 Arthur J. Gallagher 1,000,000 Travelers Casualty & Surety Airport liability 0 Arthur J. Gallagher 100,000,000 Ace Property & Casualty Underground storage tank 5,000 Arthur J. Gallagher 1,000,000 Commerce & Industry Worker’s comp 350,000 Berkley Risk 1,000,000 Midwest Casualty Employee health 140,000 HMA, Inc N/A SunLife * There is a 4-hour utility interruption clause, prior to the deductible becoming applicable. During 2006, there were no reductions in insurance coverage, and settlements for the last three years have not exceeded insurance coverage. The City of Renton is a member of the Washington Cities Insurance Authority (WCIA). Utilizing Chapter 48.62 RCW (self-insurance regulation) and Chapter 39.34 RCW (Interlocal Cooperation Act), nine cities originally formed WCIA on January 1, 1981. WCIA was created for the purpose of providing a pooling mechanism for jointly purchasing insurance, jointly self- insuring, and/or jointly contracting for risk management services. WCIA has a total of 121 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, stopgap, and employee benefits liability. Limits are $3 million per occurrence self insured layer, and $12 million per occurrence in the re-insured excess layer with no annual aggregate except $10 million per member for public officials’ errors and omissions. The excess layer is insured by the purchase of reinsurance and insurance. Total limits are $15 million per occurrence subject to aggregate sublimits in the excess layers. The Board of Directors determines the limits and terms of coverage annually. Insurance coverage for property, automobile physical damage, fidelity, inland marine, and boiler and machinery are purchased on a group basis. Various deductibles apply by type of coverage. Property insurance and auto physical damage are self-funded from the members’ deductible to 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-48 $500,000 for all perils other than flood and earthquake, and insured above that amount by the purchase of reinsurance. In-house services include risk management consultation, loss control field services, claims and litigation administration, and loss analyses. WCIA contracts for the claims investigation consultants for personnel issues and land use problems, insurance brokerage and lobbyist services. WCIA is fully funded by its members, who make annual assessments on a prospectively rated basis, as determined by an outside, independent actuary. The assessment covers loss, loss adjustment, and administrative expenses. As outlined in the interlocal agreement, WCIA retains the right to additionally assess the membership for any funding shortfall. An investment committee, using investment brokers, produces additional revenue by investment of WCIA’s assets in financial instruments, which comply with all State guidelines. These revenues directly offset portions of the membership’s annual assessment. 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, 2006, the City had accrued the following amounts for outstanding claims: Coverage Total Claims Payable 12/31/2006 Property & liability $537,693 Worker’s compensation 765,089 Employee health 1,325,000 TOTAL $2,627,782 2006 Property & Liability Worker’s Compensation Employee Health Totals IBNR claims at beginning of the year $610,044 $765,089 $1,050,700 $2,425,833 Current year and changes in estimates 1,840,667 987,554 2,584,817 5,413,038 Claims payments (1,913,018) (987,554) (2,310,517) (5,211,089) IBNR claims at end of the year $537,693 $765,089 $1,325,000 $2,627,782 2005 Property & Liability Worker’s Compensation Employee Health Totals IBNR claims at beginning of the year $583,617 $695,930 $1,258,170 $2,537,717 Current year and changes in estimates 792,048 418,609 5,222,493 6,433,150 Claims payments (765,621) (349,450) (5,429,963) (6,545,034) IBNR claims at end of the year $610,044 $765,089 $1,050,700 $2,425,833 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-48 $500,000 for all perils other than flood and earthquake, and insured above that amount by the purchase of reinsurance. In-house services include risk management consultation, loss control field services, claims and litigation administration, and loss analyses. WCIA contracts for the claims investigation consultants for personnel issues and land use problems, insurance brokerage and lobbyist services. WCIA is fully funded by its members, who make annual assessments on a prospectively rated basis, as determined by an outside, independent actuary. The assessment covers loss, loss adjustment, and administrative expenses. As outlined in the interlocal agreement, WCIA retains the right to additionally assess the membership for any funding shortfall. An investment committee, using investment brokers, produces additional revenue by investment of WCIA’s assets in financial instruments, which comply with all State guidelines. These revenues directly offset portions of the membership’s annual assessment. 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, 2006, the City had accrued the following amounts for outstanding claims: Coverage Total Claims Payable 12/31/2006 Property & liability $537,693 Worker’s compensation 765,089 Employee health 1,325,000 TOTAL $2,627,782 2006 Property & Liability Worker’s Compensation Employee Health Totals IBNR claims at beginning of the year $610,044 $765,089 $1,050,700 $2,425,833 Current year and changes in estimates 1,840,667 987,554 2,584,817 5,413,038 Claims payments (1,913,018) (987,554) (2,310,517) (5,211,089) IBNR claims at end of the year $537,693 $765,089 $1,325,000 $2,627,782 2005 Property & Liability Worker’s Compensation Employee Health Totals IBNR claims at beginning of the year $583,617 $695,930 $1,258,170 $2,537,717 Current year and changes in estimates 792,048 418,609 5,222,493 6,433,150 Claims payments (765,621) (349,450) (5,429,963) (6,545,034) IBNR claims at end of the year $610,044 $765,089 $1,050,700 $2,425,833 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-49 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. As of December 31, 2006, outstanding interfund balances (resulting from various interfund transactions) were as follows: Fund Receivables Due From Other Funds Payables Due To Other Funds Purpose General fund $330 $15,000 To accrue 2006 interfund services provide, paid for in 2007 Street 47,898 0 To accrue 2006 interfund services provide, paid for in 2007 Hotel / motel 15,000 0 To accrue 2006 interfund services provide, paid for in 2007 General CIP 0 32,038 To accrue 2006 interfund services provide, paid for in 2007 South Lake WA infrastructure 0 5,586 To accrue 2006 interfund services provide, paid for in 2007 Waterworks utility 56,328 50,676 To accrue 2006 interfund services provide, paid for in 2007 Golf 0 5,666 To accrue 2006 interfund services provide, paid for in 2007 Airport 0 2,734 To accrue 2006 interfund services provide, paid for in 2007 Insurance 0 7,855 To accrue 2006 interfund services provide, paid for in 2007 TOTAL* $119,556 $119,555 *Difference is the result of rounding individual fund numbers in the aggregate. 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-49 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. As of December 31, 2006, outstanding interfund balances (resulting from various interfund transactions) were as follows: Fund Receivables Due From Other Funds Payables Due To Other Funds Purpose General fund $330 $15,000 To accrue 2006 interfund services provide, paid for in 2007 Street 47,898 0 To accrue 2006 interfund services provide, paid for in 2007 Hotel / motel 15,000 0 To accrue 2006 interfund services provide, paid for in 2007 General CIP 0 32,038 To accrue 2006 interfund services provide, paid for in 2007 South Lake WA infrastructure 0 5,586 To accrue 2006 interfund services provide, paid for in 2007 Waterworks utility 56,328 50,676 To accrue 2006 interfund services provide, paid for in 2007 Golf 0 5,666 To accrue 2006 interfund services provide, paid for in 2007 Airport 0 2,734 To accrue 2006 interfund services provide, paid for in 2007 Insurance 0 7,855 To accrue 2006 interfund services provide, paid for in 2007 TOTAL* $119,556 $119,555 *Difference is the result of rounding individual fund numbers in the aggregate. 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-50 The following is a recap of interfund advances (expected to be paid by 2007): Fund Advances Due From Other Funds Advances Due To Other Funds Purpose Leased property $0 $63,900 Loan from Municipal Facilities to fund Tenant Improvements Municipal facilities 63,900 0 Loan to Leased Property to fund Tenant Improvements TOTAL $63,900 $63,900 Transfers for 2006 were as follows: Fund Transfer In Transfer Out Purpose General $0 $272,000 Contribution for LEOFF 1 LT Care Arterial street 0 440,000 Contribution for CIP Overlay Projects 1% for Art 17,505 0 From Transportation CIP for Art General debt 525,000 0 Contribution in for Fire Impact Debt. SAD/LID 0 68,446 Transfer Fund Balance to Waterwork Close out the SAD/LID Debt Service Fund Fire impact 0 525,000 Contribution for Fire Impact Debt Payments Transportation impact 0 965,000 Contribution to Transportation CIP Transportation CIP 2,360,390 17,505 Contribution for Capital Improvements Contribution for 1% Art project Municipal CIP 0 402,000 Transfer IS Fund Balance South Lake WA infrastructure 0 955,390 Reimbursement for CIP Costs Waterworks 68,446 0 Transfer SAD/LID Fund Balance Municipal CIP 60,000 Interfund Loan Correction Leased property services 60,000 0 Interfund Loan Correction Information services 402,000 0 Transfer IS Fund Balance previously in Municipal CIP Fund Insurance fund 272,000 0 From General Fund for LEOFF 1 LT Care TOTAL $ 3,705,341 $ 3,705,341 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. 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-50 The following is a recap of interfund advances (expected to be paid by 2007): Fund Advances Due From Other Funds Advances Due To Other Funds Purpose Leased property $0 $63,900 Loan from Municipal Facilities to fund Tenant Improvements Municipal facilities 63,900 0 Loan to Leased Property to fund Tenant Improvements TOTAL $63,900 $63,900 Transfers for 2006 were as follows: Fund Transfer In Transfer Out Purpose General $0 $272,000 Contribution for LEOFF 1 LT Care Arterial street 0 440,000 Contribution for CIP Overlay Projects 1% for Art 17,505 0 From Transportation CIP for Art General debt 525,000 0 Contribution in for Fire Impact Debt. SAD/LID 0 68,446 Transfer Fund Balance to Waterwork Close out the SAD/LID Debt Service Fund Fire impact 0 525,000 Contribution for Fire Impact Debt Payments Transportation impact 0 965,000 Contribution to Transportation CIP Transportation CIP 2,360,390 17,505 Contribution for Capital Improvements Contribution for 1% Art project Municipal CIP 0 402,000 Transfer IS Fund Balance South Lake WA infrastructure 0 955,390 Reimbursement for CIP Costs Waterworks 68,446 0 Transfer SAD/LID Fund Balance Municipal CIP 60,000 Interfund Loan Correction Leased property services 60,000 0 Interfund Loan Correction Information services 402,000 0 Transfer IS Fund Balance previously in Municipal CIP Fund Insurance fund 272,000 0 From General Fund for LEOFF 1 LT Care TOTAL $ 3,705,341 $ 3,705,341 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. 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-51 B. Restricted assets are liquid assets (generated from revenues and not bond proceeds), which have third party (statutory, bond covenant, or granting agency) limitations on their use. The City would typically use restricted assets first, as appropriated opportunities arise, but reserve the right to selectively defer the use thereof to a future project or replacement equipment acquisition. Restricted assets are as follows: Fund Purpose Amount Hotel / Motel Tax Tourism $325,404 Arterial Street Road construction 477,844 Cable Communications Cable development 185,012 Community Development Impact Mitigation for park development 895,404 Municipal Facilities Capital projects 15,458,013 Capital Projects General governmental capital projects 8,465,556 South Lake Washington Construction infrastructure for SLW 11,651,706 Fire Impact Mitigation for fire improvements 1,163,853 Transportation Impact Mitigation for transportation projects 3,638,871 Waterworks Debt service reserves 3,114,332 Golf Course Debt service reserves 441,358 TOTAL $45,817,353 C. Unrestricted assets represent unrestricted liquid assets. The City’s management may have plans or tentative commitments to expend resources certain purposes in future periods. Further legal action will be required to authorize the actual expenses or expenditures. NOTE 12. PRIOR YEAR RESTATEMENTS The City had no prior period adjustments to beginning fund balances or net assets. NOTE 13. SHORT TERM DEBT Short-term debt is defined as debt with maturity of one year or less from the date of issuance. The City had no short-term debt in 2006. NOTE 14. LONG TERM DEBT The City of Renton's long-term debt consists of General Obligation Debt, repaid mainly from general governmental revenue sources and Proprietary Debt, repaid from proprietary revenues. These debts are accounted for in the following areas: 1) The outstanding general obligation debt is reported in the Government-wide financial statements; 2) The repayment, or debt service of the same, is recorded in the Debt Service Funds; and, 3) The proprietary debt liability and repayment of the same are reported in individual Proprietary Funds. 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-51 B. Restricted assets are liquid assets (generated from revenues and not bond proceeds), which have third party (statutory, bond covenant, or granting agency) limitations on their use. The City would typically use restricted assets first, as appropriated opportunities arise, but reserve the right to selectively defer the use thereof to a future project or replacement equipment acquisition. Restricted assets are as follows: Fund Purpose Amount Hotel / Motel Tax Tourism $325,404 Arterial Street Road construction 477,844 Cable Communications Cable development 185,012 Community Development Impact Mitigation for park development 895,404 Municipal Facilities Capital projects 15,458,013 Capital Projects General governmental capital projects 8,465,556 South Lake Washington Construction infrastructure for SLW 11,651,706 Fire Impact Mitigation for fire improvements 1,163,853 Transportation Impact Mitigation for transportation projects 3,638,871 Waterworks Debt service reserves 3,114,332 Golf Course Debt service reserves 441,358 TOTAL $45,817,353 C. Unrestricted assets represent unrestricted liquid assets. The City’s management may have plans or tentative commitments to expend resources certain purposes in future periods. Further legal action will be required to authorize the actual expenses or expenditures. NOTE 12. PRIOR YEAR RESTATEMENTS The City had no prior period adjustments to beginning fund balances or net assets. NOTE 13. SHORT TERM DEBT Short-term debt is defined as debt with maturity of one year or less from the date of issuance. The City had no short-term debt in 2006. NOTE 14. LONG TERM DEBT The City of Renton's long-term debt consists of General Obligation Debt, repaid mainly from general governmental revenue sources and Proprietary Debt, repaid from proprietary revenues. These debts are accounted for in the following areas: 1) The outstanding general obligation debt is reported in the Government-wide financial statements; 2) The repayment, or debt service of the same, is recorded in the Debt Service Funds; and, 3) The proprietary debt liability and repayment of the same are reported in individual Proprietary Funds. 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-52 Outstanding debt issues as of December 31, 2006, are as follows: Type of Debt Interest Rates Issued Date Maturity Date Original Issued Amount GOVERNMENTAL DEBT: General Obligation Bonds: Limited 1997 GO Bonds 5.55%-5.75% 05/01/97 12/01/17 $14,697,744 2000 GO Valley Comm Bonds 4.30%-5.38% 09/15/00 12/01/15 2,551,600 2001 GO Refunding Bonds 2.10%-5.25% 11/01/01 12/01/17 13,505,000 2001 GO Bonds 5.0%-5.25% 11/01/01 12/01/21 6,000,000 2002 GO Bonds 2.50%-5.00% 7/15/02 12/01/22 3,895,000 2006 GO Bonds 4.25%-5.00% 8/08/06 12/01/28 17,980,000 SUBTOTAL LIMITED GO 58,629,344 Unlimited 1993 GO Refunding Bonds - Senior Housing 5.20%-61.0% 09/01/93 02/01/09 4,270,000 SUBTOTAL UNLIMITED GO 4,270,000 TOTAL GENERAL OBLIGATION BONDS 62,899,344 Installment Contracts: Certificates of Participation 4.51% 09/01/98 06/01/08 278,172 TOTAL INSTALLMENT CONTRACTS 278,172 TOTAL GOVERNMENTAL-TYPE DEBT ISSUANCE 63,177,516 BUSINESS-TYPE DEBT: Revenue Bonds: 1998 Water/Sewer Refunding 4.46% 03/01/98 06/01/13 6,120,000 1999 Golf System Refunding 4.96% 04/01/99 12/01/15 5,040,000 2002 Water/Sewer 4.80% 07/01/02 12/01/22 11,980,000 2003 Water/Sewer Refunding 3.20% 09/15/03 06/01/13 8,035,000 2004 Water/Sewer 4.33% 11/01/04 12/01/27 10,335,000 TOTAL REVENUE BONDS 41,510,000 Public Works Trust Fund Loans: Sierra Heights Sewer Improvements 2.00% 01/20/92 07/01/12 888,462 Central Renton Sewer Replacement 1.00% 05/04/93 07/01/15 1,631,800 East Renton Interceptor 1.00% 06/07/93 07/01/13 2,542,704 Dayton Avenue NE 2.00% 05/12/94 07/01/14 96,958 NE 27th/Aberdeen Drainage Improvements 1.00% 05/15/95 07/01/15 731,000 East Kennydale Interceptor 2.00% 01/24/98 07/01/16 2,093,740 Honeycreek Interceptor 2.00% 12/04/95 07/01/16 1,840,568 Corrosion Control Treatment Facilities 1.00% 01/06/97 07/01/17 1,106,000 Maplewood Water Treatment Improvement 0.50% 1/22/02 07/01/21 567,831 Construct CT Pipeline for Wells 0.50% 11/5/02 7/1/22 814,527 Maplewood Water Treatment Improvement 0.50% 06/03/04 07/01/24 4,892,500 TOTAL PUBLIC WORKS TRUST FUND LOANS 17,206,090 Leases: Golf Course Operating Lease 3.81% 4/1/03 4/1/06 78,192 TOTAL LEASES 78,192 TOTAL BUSINESS-TYPE DEBT ISSUANCE 58,794,282 TOTAL AMOUNT ISSUED ON OUTSTANDING DEBT AS OF DECEMBER 31, 2006 $121,971,798 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-52 Outstanding debt issues as of December 31, 2006, are as follows: Type of Debt Interest Rates Issued Date Maturity Date Original Issued Amount GOVERNMENTAL DEBT: General Obligation Bonds: Limited 1997 GO Bonds 5.55%-5.75% 05/01/97 12/01/17 $14,697,744 2000 GO Valley Comm Bonds 4.30%-5.38% 09/15/00 12/01/15 2,551,600 2001 GO Refunding Bonds 2.10%-5.25% 11/01/01 12/01/17 13,505,000 2001 GO Bonds 5.0%-5.25% 11/01/01 12/01/21 6,000,000 2002 GO Bonds 2.50%-5.00% 7/15/02 12/01/22 3,895,000 2006 GO Bonds 4.25%-5.00% 8/08/06 12/01/28 17,980,000 SUBTOTAL LIMITED GO 58,629,344 Unlimited 1993 GO Refunding Bonds - Senior Housing 5.20%-61.0% 09/01/93 02/01/09 4,270,000 SUBTOTAL UNLIMITED GO 4,270,000 TOTAL GENERAL OBLIGATION BONDS 62,899,344 Installment Contracts: Certificates of Participation 4.51% 09/01/98 06/01/08 278,172 TOTAL INSTALLMENT CONTRACTS 278,172 TOTAL GOVERNMENTAL-TYPE DEBT ISSUANCE 63,177,516 BUSINESS-TYPE DEBT: Revenue Bonds: 1998 Water/Sewer Refunding 4.46% 03/01/98 06/01/13 6,120,000 1999 Golf System Refunding 4.96% 04/01/99 12/01/15 5,040,000 2002 Water/Sewer 4.80% 07/01/02 12/01/22 11,980,000 2003 Water/Sewer Refunding 3.20% 09/15/03 06/01/13 8,035,000 2004 Water/Sewer 4.33% 11/01/04 12/01/27 10,335,000 TOTAL REVENUE BONDS 41,510,000 Public Works Trust Fund Loans: Sierra Heights Sewer Improvements 2.00% 01/20/92 07/01/12 888,462 Central Renton Sewer Replacement 1.00% 05/04/93 07/01/15 1,631,800 East Renton Interceptor 1.00% 06/07/93 07/01/13 2,542,704 Dayton Avenue NE 2.00% 05/12/94 07/01/14 96,958 NE 27th/Aberdeen Drainage Improvements 1.00% 05/15/95 07/01/15 731,000 East Kennydale Interceptor 2.00% 01/24/98 07/01/16 2,093,740 Honeycreek Interceptor 2.00% 12/04/95 07/01/16 1,840,568 Corrosion Control Treatment Facilities 1.00% 01/06/97 07/01/17 1,106,000 Maplewood Water Treatment Improvement 0.50% 1/22/02 07/01/21 567,831 Construct CT Pipeline for Wells 0.50% 11/5/02 7/1/22 814,527 Maplewood Water Treatment Improvement 0.50% 06/03/04 07/01/24 4,892,500 TOTAL PUBLIC WORKS TRUST FUND LOANS 17,206,090 Leases: Golf Course Operating Lease 3.81% 4/1/03 4/1/06 78,192 TOTAL LEASES 78,192 TOTAL BUSINESS-TYPE DEBT ISSUANCE 58,794,282 TOTAL AMOUNT ISSUED ON OUTSTANDING DEBT AS OF DECEMBER 31, 2006 $121,971,798 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-53 For outstanding debt additions and retirements are summarized as follows: Type of Debt Balanced Owed 01/01/2006 Additions Deductions Balanced Owed 12/31/2006 Due Within One Year GOVERNMENTAL DEBT: General Obligation Bonds: Limited 1996 GO Bonds $111,670 $0 $111,670 $0 $0 1997 GO Refunding Bonds 429,033 0 429,033 0 0 1997 GO Bonds 2,037,744 0 198,243 1,839,501 693,926 1997 GO Bonds – CAB Long Term Interest 0 1,315,199 0 1,315,199 0 2000 GO Valley Comm Bonds 1,908,000 0 153,000 1,755,000 160,000 2001 GO Refunding Bonds 13,195,000 0 0 13,195,000 75,000 2001 GO Bonds 6,000,000 0 0 6,000,000 0 2002 GO Bonds 3,475,000 0 150,000 3,325,000 150,000 2006 GO Bonds 0 17,980,000 17,980,000 0 SUBTOTAL LIMITED GO 27,156,447 19,295,199 1,041,946 45,409,700 1,078,926 Unlimited 1993 GO Refunding Bonds-Senior Housing 1,870,000 0 430,000 1,440,000 455,000 SUBTOTAL UNLIMITED GO 1,870,000 0 430,000 1,440,000 455,000 TOTAL GENERAL OBLIGATION BONDS 29,026,447 19,295,199 1,471,946 46,849,700 1,533,926 Installment Contracts: Certificates of Participation 81,217 0 31,404 49,813 32,837 TOTAL INSTALLMENT CONTRACTS 81,217 0 31,404 49,813 32,837 Employee Leave Benefits (Primarily General Fund Obligations) 5,341,112 3,566,437 4,713,554 4,193,995 2,428,017 TOTAL GENERAL OBLIGATION DEBT 34,448,776 22,861,636 6,216,904 51,093,508 3,994,780 BUSINESS-TYPE DEBT: Revenue Bonds: 1998 Water/Sewer Refunding 4,550,000 0 520,000 4,030,000 545,000 1999 Golf System Refunding 3,360,000 0 270,000 3,090,000 285,000 2002 Water/Sewer 11,610,000 0 110,000 11,500,000 110,000 2003 Water/Sewer Refunding 5,935,000 0 1,050,000 4,885,000 1,085,000 2004 Water/Sewer 10,335,000 0 0 10,335,000 0 TOTAL REVENUE BONDS 35,790,000 0 1,950,000 33,840,000 2,025,000 Public Works Trust Fund Loans: Sierra Heights Sewer Improvements 179,500 0 25,642 153,858 25,642 Central Renton Sewer Replacement 803,903 0 87,483 716,420 87,483 East Renton Interceptor 1,076,560 0 134,570 941,990 134,570 Dayton Avenue NE 45,928 0 5,103 40,825 5,103 NE 27th/Aberdeen Drainage Improvements 425,897 0 42,590 383,307 42,590 East Kennydale Interceptor 1,285,398 0 116,855 1,168,543 116,855 Honeycreek Interceptor 1,065,592 0 96,872 968,720 96,872 Corrosion Control Treatment Facilities 592,283 0 49,357 542,926 49,357 Maplewood Water Improvement 484,815 0 30,301 454,514 30,301 Const. CT Pipeline for Wells 728,787 0 42,870 685,917 42,870 Maplewood Water Improvements 4,892,500 0 257,500 4,635,000 257,500 TOTAL PUBLIC WORKS TRUST FUND LOANS 11,581,161 0 889,143 10,692,018 889,143 OPERATING LEASES: Golf Course Cart lease 8,622 0 8,622 0 0 TOTAL OPERATING LEASES 0 0 8,622 0 0 Employee Leave Benefits 385,699 487,123 409,874 462,947 110,016 TOTAL BUSINESS-TYPE DEBT 47,765,482 487,123 3,257,639 44,994,965 3,024,159 GRAND TOTALS $82,214,258 $23,348,759 $9,474,543 $96,088,473 $7,018,939 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-53 For outstanding debt additions and retirements are summarized as follows: Type of Debt Balanced Owed 01/01/2006 Additions Deductions Balanced Owed 12/31/2006 Due Within One Year GOVERNMENTAL DEBT: General Obligation Bonds: Limited 1996 GO Bonds $111,670 $0 $111,670 $0 $0 1997 GO Refunding Bonds 429,033 0 429,033 0 0 1997 GO Bonds 2,037,744 0 198,243 1,839,501 693,926 1997 GO Bonds – CAB Long Term Interest 0 1,315,199 0 1,315,199 0 2000 GO Valley Comm Bonds 1,908,000 0 153,000 1,755,000 160,000 2001 GO Refunding Bonds 13,195,000 0 0 13,195,000 75,000 2001 GO Bonds 6,000,000 0 0 6,000,000 0 2002 GO Bonds 3,475,000 0 150,000 3,325,000 150,000 2006 GO Bonds 0 17,980,000 17,980,000 0 SUBTOTAL LIMITED GO 27,156,447 19,295,199 1,041,946 45,409,700 1,078,926 Unlimited 1993 GO Refunding Bonds-Senior Housing 1,870,000 0 430,000 1,440,000 455,000 SUBTOTAL UNLIMITED GO 1,870,000 0 430,000 1,440,000 455,000 TOTAL GENERAL OBLIGATION BONDS 29,026,447 19,295,199 1,471,946 46,849,700 1,533,926 Installment Contracts: Certificates of Participation 81,217 0 31,404 49,813 32,837 TOTAL INSTALLMENT CONTRACTS 81,217 0 31,404 49,813 32,837 Employee Leave Benefits (Primarily General Fund Obligations) 5,341,112 3,566,437 4,713,554 4,193,995 2,428,017 TOTAL GENERAL OBLIGATION DEBT 34,448,776 22,861,636 6,216,904 51,093,508 3,994,780 BUSINESS-TYPE DEBT: Revenue Bonds: 1998 Water/Sewer Refunding 4,550,000 0 520,000 4,030,000 545,000 1999 Golf System Refunding 3,360,000 0 270,000 3,090,000 285,000 2002 Water/Sewer 11,610,000 0 110,000 11,500,000 110,000 2003 Water/Sewer Refunding 5,935,000 0 1,050,000 4,885,000 1,085,000 2004 Water/Sewer 10,335,000 0 0 10,335,000 0 TOTAL REVENUE BONDS 35,790,000 0 1,950,000 33,840,000 2,025,000 Public Works Trust Fund Loans: Sierra Heights Sewer Improvements 179,500 0 25,642 153,858 25,642 Central Renton Sewer Replacement 803,903 0 87,483 716,420 87,483 East Renton Interceptor 1,076,560 0 134,570 941,990 134,570 Dayton Avenue NE 45,928 0 5,103 40,825 5,103 NE 27th/Aberdeen Drainage Improvements 425,897 0 42,590 383,307 42,590 East Kennydale Interceptor 1,285,398 0 116,855 1,168,543 116,855 Honeycreek Interceptor 1,065,592 0 96,872 968,720 96,872 Corrosion Control Treatment Facilities 592,283 0 49,357 542,926 49,357 Maplewood Water Improvement 484,815 0 30,301 454,514 30,301 Const. CT Pipeline for Wells 728,787 0 42,870 685,917 42,870 Maplewood Water Improvements 4,892,500 0 257,500 4,635,000 257,500 TOTAL PUBLIC WORKS TRUST FUND LOANS 11,581,161 0 889,143 10,692,018 889,143 OPERATING LEASES: Golf Course Cart lease 8,622 0 8,622 0 0 TOTAL OPERATING LEASES 0 0 8,622 0 0 Employee Leave Benefits 385,699 487,123 409,874 462,947 110,016 TOTAL BUSINESS-TYPE DEBT 47,765,482 487,123 3,257,639 44,994,965 3,024,159 GRAND TOTALS $82,214,258 $23,348,759 $9,474,543 $96,088,473 $7,018,939 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-54 DEEP DISCOUNT DEBT The 1997 Limited General Obligation Bond issue included capital appreciation bonds that are issued at a deep discount. The deep-discount debt will mature in the years 2007, 2008, and 2009 with an accreted value of $1,245,000, $1,250,000, and 1,000,000 respectively. The deep- discount debt is reported in the Government-wide financial statements in the amount of $1,839,501, net of the remaining unamortized discount. SPECIAL ASSESSMENT DEBT WITH GOVERNMENTAL COMMITMENT As of December 31, 2006, the City of Renton has no special assessment debt outstanding. DEBT LIMIT CAPACITIES State law provides that debt cannot be incurred in excess of the following percentages of the value of the taxable property of the City: 1.5 percent without a vote of the people provided the indebtedness with a vote is 1 percent or less; 2.5 percent with a vote of the people; 5.0 percent with a vote of the people, provided the indebtedness in excess of 2.5 percent is for utilities; and 7.5 percent with a vote of the people provided the indebtedness in excess of 5.0 percent is for open space development and parks facilities. Table 12 in the Statistical Section shows the computation of legal debt margin for general and special purpose capacities for the City of Renton. ANNUAL DEBT SERVICE REQUIREMENTS The annual debt service requirements to maturity, including principal and interest, for long-term debt as of December 31, 2006, are as follows: Governmental Activities Business-type Activities Year Ending December 31 Principle Interest Principle Interest 2007 $1,566,763 $2,702,284 $2,914,143 $1,619,071 2008 2,079,551 2,698,249 2,994,143 1,527,344 2009 2,205,000 2,549,448 3,074,143 1,440,494 2010 2,269,000 1,975,553 3,154,143 1,348,254 2011 2,353,000 1,883,688 3,244,143 1,251,000 2012-2016 13,326,000 7,612,869 11,298,228 4,899,474 2017-2021 13,390,000 4,175,483 7,647,712 3,360,272 2022-2026 5,785,000 1,534,414 8,445,370 1,632,689 2027-2028 2,610,000 197,250 1,760,000 88,000 TOTAL $45,584,314 $25,329,238 $44,532,025 $17,166,598 AMOUNT AVAILABLE FOR DEBT SERVICE Fund balances that have been reserved for debt repayment are $3,068,584 in the debt service funds. NOTE 15 - DEFERRED CHARGES IN PROPRIETARY FUNDS As of December 31, 2006, the Waterworks Utility Fund had deferred charges and other assets in the amount of $761,729 for debt issue costs on the 2002-2004 Revenue Bonds. This amount will be fully amortized by 2022. The Golf Course Fund amount was $40,547 for the 1999 Refunded Bond debt issue costs and discount. This amount will be fully amortized by 2016. 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-54 DEEP DISCOUNT DEBT The 1997 Limited General Obligation Bond issue included capital appreciation bonds that are issued at a deep discount. The deep-discount debt will mature in the years 2007, 2008, and 2009 with an accreted value of $1,245,000, $1,250,000, and 1,000,000 respectively. The deep- discount debt is reported in the Government-wide financial statements in the amount of $1,839,501, net of the remaining unamortized discount. SPECIAL ASSESSMENT DEBT WITH GOVERNMENTAL COMMITMENT As of December 31, 2006, the City of Renton has no special assessment debt outstanding. DEBT LIMIT CAPACITIES State law provides that debt cannot be incurred in excess of the following percentages of the value of the taxable property of the City: 1.5 percent without a vote of the people provided the indebtedness with a vote is 1 percent or less; 2.5 percent with a vote of the people; 5.0 percent with a vote of the people, provided the indebtedness in excess of 2.5 percent is for utilities; and 7.5 percent with a vote of the people provided the indebtedness in excess of 5.0 percent is for open space development and parks facilities. Table 12 in the Statistical Section shows the computation of legal debt margin for general and special purpose capacities for the City of Renton. ANNUAL DEBT SERVICE REQUIREMENTS The annual debt service requirements to maturity, including principal and interest, for long-term debt as of December 31, 2006, are as follows: Governmental Activities Business-type Activities Year Ending December 31 Principle Interest Principle Interest 2007 $1,566,763 $2,702,284 $2,914,143 $1,619,071 2008 2,079,551 2,698,249 2,994,143 1,527,344 2009 2,205,000 2,549,448 3,074,143 1,440,494 2010 2,269,000 1,975,553 3,154,143 1,348,254 2011 2,353,000 1,883,688 3,244,143 1,251,000 2012-2016 13,326,000 7,612,869 11,298,228 4,899,474 2017-2021 13,390,000 4,175,483 7,647,712 3,360,272 2022-2026 5,785,000 1,534,414 8,445,370 1,632,689 2027-2028 2,610,000 197,250 1,760,000 88,000 TOTAL $45,584,314 $25,329,238 $44,532,025 $17,166,598 AMOUNT AVAILABLE FOR DEBT SERVICE Fund balances that have been reserved for debt repayment are $3,068,584 in the debt service funds. NOTE 15 - DEFERRED CHARGES IN PROPRIETARY FUNDS As of December 31, 2006, the Waterworks Utility Fund had deferred charges and other assets in the amount of $761,729 for debt issue costs on the 2002-2004 Revenue Bonds. This amount will be fully amortized by 2022. The Golf Course Fund amount was $40,547 for the 1999 Refunded Bond debt issue costs and discount. This amount will be fully amortized by 2016. 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-55 NOTE 16. SEGMENT INFORMATION An identifiable activity (or grouping of activities) required to be accounted for separately, which (a) is reported as or within an enterprise fund; (b) for which one or more revenue bonds are outstanding; and, (c) where the revenue stream is pledged for payment of, are required to disclose segment information. The City of Renton has no required segment information to disclose for 2006. NOTE 17. JOINT VENTURES A joint venture is a legal entity or other organization that results from a contractual agreement and that is owned, operated, or governed by two or more participants as a separate and specific activity subject to joint control in which the participants retain (a) an on-going financial interest or (b) an on-going financial responsibility. The City participates in one joint venture. VALLEY COMMUNICATIONS CENTER The “Valley Communications Center” was established August 20, 1976, when an Interlocal Agreement was entered into by four original participating municipal corporations, including the cities of Renton, Kent, Auburn, and Tukwila. Federal Way was formally admitted in 2000. The agreement is sanctioned by the provisions and terms of the Interlocal Cooperation Act pursuant to Chapter 39.34 RCW. The initial duration of the agreement was five years, and thereafter is automatically extended for consecutive five-year periods. The purpose of the joint operation, hereafter referred to as Valley Comm, is to provide improved consolidated emergency communications (dispatch) services for police, fire, and medical aid, to the five participating cities and to several subscribing agencies that include: King County Fire Districts 2, 17 (Black Diamond), 20, 26, 40, 43, 44, 47; City of Pacific Police and Fire Departments; City of Black Diamond Police Department; City of Des Moines Police Department; SeaTac Fire Department; North Highline Fire Department; King County EMS Units; and Vashon Island Fire Department. Separate agreements between Valley Comm and the subscribing agencies have been executed, which set forth conditions of services and rates charged. The City of Renton reports its share of equity interest in the Governmental Activities column within the Government-wide financial statements under non-current assets. The following is condensed (unaudited) financial information as of December 31, 2006, on Valley Comm: Valley Comm Renton Interest Assets $22,055,273 Liabilities 718,868 22.51%* TOTAL Equity $21,336,405 $3,981,550 *After removing $3,642,531 in assets not subject to the equity interest calculations. 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-55 NOTE 16. SEGMENT INFORMATION An identifiable activity (or grouping of activities) required to be accounted for separately, which (a) is reported as or within an enterprise fund; (b) for which one or more revenue bonds are outstanding; and, (c) where the revenue stream is pledged for payment of, are required to disclose segment information. The City of Renton has no required segment information to disclose for 2006. NOTE 17. JOINT VENTURES A joint venture is a legal entity or other organization that results from a contractual agreement and that is owned, operated, or governed by two or more participants as a separate and specific activity subject to joint control in which the participants retain (a) an on-going financial interest or (b) an on-going financial responsibility. The City participates in one joint venture. VALLEY COMMUNICATIONS CENTER The “Valley Communications Center” was established August 20, 1976, when an Interlocal Agreement was entered into by four original participating municipal corporations, including the cities of Renton, Kent, Auburn, and Tukwila. Federal Way was formally admitted in 2000. The agreement is sanctioned by the provisions and terms of the Interlocal Cooperation Act pursuant to Chapter 39.34 RCW. The initial duration of the agreement was five years, and thereafter is automatically extended for consecutive five-year periods. The purpose of the joint operation, hereafter referred to as Valley Comm, is to provide improved consolidated emergency communications (dispatch) services for police, fire, and medical aid, to the five participating cities and to several subscribing agencies that include: King County Fire Districts 2, 17 (Black Diamond), 20, 26, 40, 43, 44, 47; City of Pacific Police and Fire Departments; City of Black Diamond Police Department; City of Des Moines Police Department; SeaTac Fire Department; North Highline Fire Department; King County EMS Units; and Vashon Island Fire Department. Separate agreements between Valley Comm and the subscribing agencies have been executed, which set forth conditions of services and rates charged. The City of Renton reports its share of equity interest in the Governmental Activities column within the Government-wide financial statements under non-current assets. The following is condensed (unaudited) financial information as of December 31, 2006, on Valley Comm: Valley Comm Renton Interest Assets $22,055,273 Liabilities 718,868 22.51%* TOTAL Equity $21,336,405 $3,981,550 *After removing $3,642,531 in assets not subject to the equity interest calculations. 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-56 Completed Financial Statements for Valley Comm can be obtained from the Valley Communications Center, 23807 – 98th Avenue South, Kent, WA 98031. NOTE 18. SUBSEQUENT EVENTS The City of Renton, on March 16, 2007, signed an agreement obligating the City of Renton’s golf course to purchase, through a capital lease agreement, 50 golf carts. The terms of the agreement commence on June 15, 2007, and consist of 48 monthly payments of $2,022.14 at an interest rate of 5.25%. The final payment to purchase the golf carts is $50. 2006 Comprehensive Annual Financial Report City of Renton, Washington The notes to the financial statements are an integral part of this statement. Basic Financial Statements, 4-56 Completed Financial Statements for Valley Comm can be obtained from the Valley Communications Center, 23807 – 98th Avenue South, Kent, WA 98031. NOTE 18. SUBSEQUENT EVENTS The City of Renton, on March 16, 2007, signed an agreement obligating the City of Renton’s golf course to purchase, through a capital lease agreement, 50 golf carts. The terms of the agreement commence on June 15, 2007, and consist of 48 monthly payments of $2,022.14 at an interest rate of 5.25%. The final payment to purchase the golf carts is $50. 2006 Comprehensive Annual Financial Report City of Renton, Washington ACTUAL BUDGET TO GAAP ACTUAL BUDGETARY DIFFERENCES GAAP ORIGINAL FINAL BASIS OVER (UNDER) BASIS REVENUES Taxes $ 38,201,658 $ 38,201,658 $ 38,682,760 $ 577,780 $ 39,260,540 Licenses and permits 3,395,598 3,395,598 3,122,817 9,770 3,132,587 Intergovernmental revenues 2,522,657 3,042,325 2,888,949 (42,196) 2,846,753 Charges for services 2,195,500 2,233,190 2,330,797 (84,075) 2,246,722 Fines and forfeits 701,400 701,400 874,303 (13,484) 860,819 Interfund revenues 2,554,400 2,554,400 1,785,150 6,030 1,791,180 Contributions 23,800 25,050 66,781 - 66,781 Interest 649,500 649,500 629,502 31,979 661,481 Miscellaneous revenues 114,000 114,000 215,830 (26) 215,804 TOTAL REVENUES $ 50,358,513 $ 50,917,121 $ 50,596,889 $ 485,778 $ 51,082,667 EXPENDITURES Current: General government $ 10,809,279 $ 11,092,919 $ 10,732,371 $ (33,580) $ 10,698,791 Security of persons and property 31,769,975 32,479,607 31,651,325 (494,022) 31,157,303 Physical environment 2,643,362 2,679,262 2,585,038 24,414 2,609,452 Economic environment 4,763,397 5,031,074 4,685,655 24,090 4,709,745 Mental & physical health 10,600 10,600 9,231 - 9,231 Capital outlay 54,900 116,040 63,394 16,949 80,343 TOTAL EXPENDITURES $ 50,051,513 $ 51,409,502 $ 49,727,014 $ (462,149) $ 49,264,865 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES $ 307,000 $ (492,381) $ 869,875 $ 947,927 $ 1,817,802 OTHER FINANCING SOURCES (USES) Transfer in $ - $ 18,500 $ - $ - $ - Transfer (out)(272,000) (290,500) (272,000) - (272,000) Sale of capital assets - - 1,424 - 1,424 TOTAL OTHER FINANCE SOURCES (USES) $ (272,000) $ (272,000) $ (270,576) $ - $ (270,576) NET CHANGE IN FUND BALANCE $ 35,000 $ (764,381) $ 599,299 $ 947,927 $ 1,547,226 FUND BALANCE JANUARY 1 $ - $ 764,381 $ 9,769,717 $ (571,846) $ 9,197,871 FUND BALANCE DECEMBER 31 $ 35,000 $ - $ 10,369,016 $ 376,081 $ 10,745,097 BUDGETED AMOUNTS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET TO ACTUAL - GENERAL FUND For the Year Ended December 31, 2006 Required Supplemental Information, 5-1 2006 Comprehensive Annual Financial Report City of Renton, Washington ACTUAL BUDGET TO GAAP ACTUAL BUDGETARY DIFFERENCES GAAP ORGINIAL FINAL BASIS OVER (UNDER) BASIS REVENUES Taxes $ 9,228,676 $ 9,228,676 $ 9,436,591 $ 67,081 $ 9,503,672 Intergovernmental revenues - - 11,085 (3,754) 7,331 Charges for services 1,992,100 2,030,860 2,219,974 52,340 2,272,314 Contributions 2,900 2,900 30,791 - 30,791 Interest 36,700 36,700 47,641 - 47,641 Miscellaneous revenues - - 6,679 212 6,891 TOTAL REVENUES $ 11,260,376 $ 11,299,136 $ 11,752,761 $ 115,879 $ 11,868,640 EXPENDITURES Current: General government $ 2,877,408 $ 2,939,408 $ 2,825,323 $ 5,303 $ 2,830,626 Economic environment 564,450 564,450 485,812 (4,585) 481,227 Culture & recreation 7,818,518 7,929,278 8,122,208 (13,596) 8,108,612 Capital outlay - - (206) 206 - TOTAL EXPENDITURES $ 11,260,376 $ 11,433,136 $ 11,433,137 $ (12,672) $ 11,420,465 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES $ - $ (134,000) $ 319,624 $ 128,551 $ 448,175 TOTAL OTHER FINANCE SOURCES (USES) $ - $ - $ - $ - $ - NET CHANGE IN FUND BALANCE $ - $ (134,000) $ 319,624 $ 128,551 $ 448,175 FUND BALANCE JANUARY 1 - 134,000 1,431,865 (594,051) 837,814 FUND BALANCE DECEMBER 31 $ - $ - $ 1,751,489 $ (465,500) $ 1,285,989 BUDGETED AMOUNTS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET TO ACTUAL - PARKS FUND For the Year Ended December 31, 2006 Required Supplemental Information, 5-2 2006 Comprehensive Annual Financial Report City of Renton, Washington ANNUAL FIRE TOTAL REQUIRED PERCENTAGE EMPLOYER INSURANCE EMPLOYER CONTRIBUTION OF ARC FISCAL YEAR ENDING CONTRIBUTIONS* PREMIUMS CONTRIBUTIONS (ARC)** CONTRIBUTED December 31, 2002 $ - $ 55,730 $ 55,730 $ - N/A % December 31, 2003 - 63,088 63,088 - N/A December 31, 2004 (7,099) 70,250 63,151 (205,680) N/A December 31, 2005 (14,375) 72,404 58,029 (113,541) N/A December 31, 2006 (18,753) 77,821 59,068 (113,541) N/A December 31, 2007 (20,000) *** 80,000 *** 60,000 *** (109,968) N/A *** * ** The ARC is documented as 0 for negative amounts prior to 2004. *** Assumed amounts will be replaced at year end with actual amounts. 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. ACTUARIAL VALUATION OF FIREFIGHTERS' PENSION FUND EMPLOYER CONTRIBUTIONS December 31, 2006 Required Supplemental Information, 5-3 2006 Comprehensive Annual Financial Report City of Renton, Washington Required Supplemental Information, 5-4 This page is intentionally left blank. 2006 Comprehensive Annual Financial Report City of Renton, Washington Combining Statements & Schedules, 6-1 NON-MAJOR FUNDS 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. STREET FUND The Street Fund was established pursuant to state law to account for maintenance and improvements of the City’s street and traffic control systems. Major sources of support are general revenues and state levied taxes on motor vehicle fuels distributed to the City of Renton. LIBRARY FUND Accounts for operation of the City’s library system, including central and branch facilities. Resources to the fund are mainly general tax revenues and library fines. 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 by contributing 1% of general governmental capital project funding for art projects. CABLE COMMUNICATIONS DEVELOPMENT FUND The Cable Communications Development Fund accounts for funding for promotion and development of cable communications as established by City ordinance. 2006 Comprehensive Annual Financial Report City of Renton, Washington Combining Statements & Schedules, 6-2 Debt Service Funds 1997 LIMITED GENERAL OBLIGATION BOND REDEMPTION FUND Accounts for debt service on a Council-approved bond issue, which provided funding for the purchase of Renton City Hall (2001 GO Refund Bonds). 1978 LIMITED GENERAL OBLIGATION BOND REDEMPTION FUND Accounts for debt service on a Council-approved bond issue, which provided partial funding for construction of the Renton Senior Activity Center (1997 GO Refunding Bonds). 1989 UNLIMITED GENERAL OBLIGATION BOND REDEMPTION FUND Accounts for debt service on a voter-approved bond issue, which provided financing to acquire, construct, rehabilitate, equip and develop low-income housing for the elderly. SPECIAL ASSESSMENT DEBT FUND The Special Assessment Debt Fund accounts for the special assessment collections. 2006 Comprehensive Annual Financial Report City of Renton, Washington Combining Statements & Schedules, 6-3 Capital Project Funds DOWNTOWN PARKING GARAGE Accounts for resources and expenditures related to the construction of a downtown parking facility. 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. LEASED CITY PROPERTIES Accounts for revenue and expenditures related to City property leased to outside entities. AQUATIC CENTER FUND Accounts for resources and expenditures related to the construction of the Henry Moses Family Aquatic Center. MUNICIPAL FACILITIES CONSTRUCTION FUND The Municipal Facilities Construction Fund accounts for the acquisition and development of municipal facilities. Resources included general and special revenue taxes and Council-approved general obligation bonds. GENERAL GOVERNMENT CAPITAL IMPROVEMENT FUND The General Government Capital Improvement Fund accounts for revenues and expenditures of numerous capital improvement projects, to provide infrastructure necessary for controlled growth, and to address general City needs. Primary resources include general tax revenues, business licenses fees, federal and state grants, general obligation bond proceeds and transfers from various cumulative reserve funds. 2006 Comprehensive Annual Financial Report City of Renton, Washington Combining Statements & Schedules, 6-4 Proprietary Funds Enterprise Funds AIRPORT FUND Accounts for revenues and expenses for administration, debt services, operation, capital improvements, and maintenance of the Renton Municipal Airport and Will Rodger-Wily Post Memorial Seaplane Base. Sources of support to the fund are leases, fuel charges, investment interest, and grant funding as available. GOLF COURSE FUND The Golf Course Fund was created after the City acquired the Maplewood Golf Course. It accounts for the operation, maintenance, debt service and capital improvements of the facility. Internal Service Funds EQUIPMENT RENTAL The Equipment Rental Fund accounts for the costs of maintaining and replacing all City vehicles and auxiliary equipment, except for fire apparatus and replacement of police patrol vehicles. All equipment costs, including depreciation, are factors in calculating the rates that are charged to each user department. INSURANCE FUND The Insurance Fund provides accounting for self-insurance services to all City departments, including provisions for losses on property, liability, worker’s compensation, unemployment compensation, and the health care program. Expenses are paid from the Insurance Fund and rates are charged to departments based on use and/or coverage requirements. 2006 Comprehensive Annual Financial Report City of Renton, Washington ARTERIAL HOTEL/ ASSETS STREET STREET LIBRARY MOTEL TAX Cash & cash equivalents $ 321,306 $ 1,687,604 $ 275,778 $ 287,715 Investments - - - - Receivables (net of allowances): Taxes - - - - Customer accounts - 201,509 - - Accrued interest & penalty - - 1,433 - Due from other funds - 47,898 - 15,000 Due from other governmental units 156,538 73,665 - 34,276 TOTAL ASSETS $ 477,844 $ 2,010,676 $ 277,211 $ 336,991 LIABILITIES AND FUND BALANCES Liabilities Accounts payable $- $ 78,608 $ 31,052 $ 11,587 Taxes payable - 385 93 - Retainage payable - - - - Due to other funds - - - - Interfund loans payable - - - - Deposits - - - - Deferred revenue - - - - Accrued employee wages and leave payable - 232,688 57,461 - Total liabilities $ - $ 311,681 $ 88,606 $ 11,587 Fund balances Unreserved, designated for: Special revenue funds contingency $- $ 734,828 $ 206,201 $ - Special revenue funds $ 477,844 $ 964,167 $ (17,596) $ 325,404 Total fund balances $ 477,844 $ 1,698,995 $ 188,605 $ 325,404 TOTAL LIABILITIES AND FUND BALANCES $ 477,844 $ 2,010,676 $ 277,211 $ 336,991 SPECIAL REVENUE FUNDS COMBINING BALANCE SHEET OTHER GOVERNMENTAL FUNDS December 31, 2006 Page 1 of 7 Combining Statements & Schedules, 6-5 2006 Comprehensive Annual Financial Report City of Renton, Washington PATHS & 1% FOR CABLE COMM. TOTAL ASSETS TRAILS ART & DEVELOPMENT SRF Cash & cash equivalents $ 3,027 $ 78,313 $ 108,568 $ 2,762,311 Investments - - 100,000 100,000 Receivables (net of allowances): Taxes - - - - Customer accounts - - 1,500 203,009 Accrued interest & penalty - - 6,779 8,212 Due from other funds - - - 62,898 Due from other governmental units - - - 264,479 TOTAL ASSETS $ 3,027 $ 78,313 $ 216,847 $ 3,400,909 LIABILITIES AND FUND BALANCES Liabilities Accounts payable $- $ - $ 31,835 $ 153,082 Taxes payable - - - 478 Retainage payable - - - - Due to other funds - - - - Interfund loans payable - - - - Deposits - - - - Deferred revenue - - - - Accrued employee wages and leave payable - - - 290,149 Total liabilities $ - $ - $ 31,835 $ 443,709 Fund balances Unreserved, designated for: Special revenue funds contingency $- $ - $ - $ 941,029 Special revenue funds $ 3,027 $ 78,313 $ 185,012 $ 2,016,171 Total fund balances $ 3,027 $ 78,313 $ 185,012 $ 2,957,200 TOTAL LIABILITIES AND FUND BALANCES $ 3,027 $ 78,313 $ 216,847 $ 3,400,909 SPECIAL REVENUE FUNDS COMBINING BALANCE SHEET OTHER GOVERNMENTAL FUNDS December 31, 2006 Page 2 of 7 Combining Statements & Schedules, 6-6 2006 Comprehensive Annual Financial Report City of Renton, Washington 1997 LGO BOND 1978 LGO BOND GENERAL ASSETS REDEMPTION REDEMPTION DEBT Cash & cash equivalents $ 28,648 $ 29,415 $ 924,157 Investments - - 1,000,000 Receivables (net of allowances): Taxes - - 472,947 Customer accounts - - - Accrued interest & penalty - - 21,694 Due from other funds - - - Due from other governmental units - - 2,319 TOTAL ASSETS $ 28,648 $ 29,415 $ 2,421,117 LIABILITIES AND FUND BALANCES Liabilities Accounts payable $ 605 $ - $ 604 Taxes payable - - - Retainage payable - - - Due to other funds - - - Interfund loans payable - - - Deposits - - - Deferred revenue - - - Accrued employee wages and leave payable - - - Total liabilities $ 605 $ - $ 604 Fund balances Unreserved. Designated for: Debt service funds $ 28,043 $ 29,415 2,420,513 Total fund balances $ 28,043 $ 29,415 $ 2,420,513 TOTAL LIABILITIES AND FUND BALANCES $ 28,648 $ 29,415 $ 2,421,117 DEBT SERVICE FUNDS COMBINING BALANCE SHEET OTHER GOVERNMENTAL FUNDS December 31, 2006 Page 3 of 7 Combining Statements & Schedules, 6-7 2006 Comprehensive Annual Financial Report City of Renton, Washington 1989 UGO BOND SPECIAL TOTAL ASSETS REDEMPTION ASSESSMENT DSF Cash & cash equivalents $ 585,309 $ - $ 1,567,529 Investments - - 1,000,000 Receivables (net of allowances): Taxes 12,589 - 485,536 Customer accounts - - - Accrued interest & penalty - - 21,694 Due from other funds - - - Due from other governmental units 122 - 2,441 TOTAL ASSETS $ 598,020 $ - $ 3,077,200 LIABILITIES AND FUND BALANCES Liabilities Accounts payable $- $ - $ 1,209 Taxes payable - - - Retainage payable - - - Due to other funds - - - Interfund loans payable - - - Deposits - - - Deferred revenue 7,404 - 7,404 Accrued employee leave payable - - - Total liabilities $ 7,404 $ - $ 8,613 Fund balances Unreserved reported in: Debt service funds $ 590,616 $ - $ 3,068,587 Total fund balances $ 590,616 $ - $ 3,068,587 TOTAL LIABILITIES AND FUND BALANCES $ 598,020 $ - $ 3,077,200 COMBINING BALANCE SHEET OTHER GOVERNMENTAL FUNDS December 31, 2006 Page 4 of 7 Combining Statements & Schedules, 6-8 2006 Comprehensive Annual Financial Report City of Renton, Washington DOWNTOWN C.D. IMPACT FIRE IMPACT TRANS. IMPACT ASSETS PARKING MITIGATION MITIGATION MITIGATION Cash & cash equivalents $ 178,840 $ 895,404 $ 830,132 $ 2,606,384 Investments - - 350,000 988,386 Receivables (net of allowances): Taxes - - - - Customer accounts - - - - Accrued interest & penalty 14,802 - 23,725 44,101 Due from other funds - - - - Due from other governmental units - - - - TOTAL ASSETS $ 193,642 $ 895,404 $ 1,203,857 $ 3,638,871 LIABILITIES AND FUND BALANCES Liabilities Accounts payable $- $ - $ - $ - Taxes payable - - - - Retainage payable - - 40,004 - Due to other funds - - - - Interfund loans payable - - - - Deposits - - - - Deferred revenue - - - - Accrued employee leave payable - - - - Total liabilities $ - $ - $ 40,004 $ - Fund balances Unreserved, designated for: Capital projects funds $ 193,642 $ 895,404 $ 1,163,853 $ 3,638,871 Total fund balances $ 193,642 $ 895,404 $ 1,163,853 $ 3,638,871 TOTAL LIABILITIES AND FUND BALANCES $ 193,642 $ 895,404 $ 1,203,857 $ 3,638,871 CAPITAL PROJECT FUNDS COMBINING BALANCE SHEET OTHER GOVERNMENTAL FUNDS December 31, 2006 Page 5 of 7 Combining Statements & Schedules, 6-9 2006 Comprehensive Annual Financial Report City of Renton, Washington LEASED AQUATIC GENERAL SO. LK. WA TOTAL ASSETS PROPERTY CENTER C.I.P. INFRASTRUCTURE CPF Cash & cash equivalents $ 197,955 $ 191,420 $ 2,667,900 $ 1,936,052 $ 9,504,087 Investments - - 4,935,387 8,000,000 14,273,773 Receivables (net of allowances): Taxes - - - - - Customer accounts 476,379 - - - 476,379 Accrued interest & penalty - - 165,166 171,520 419,314 Due from other funds - - - - - Due from other governmental units - - 1,363,841 2,484,165 3,848,006 TOTAL ASSETS $ 674,334 $ 191,420 $ 9,132,294 $ 12,591,737 $ 28,521,559 LIABILITIES AND FUND BALANCES Liabilities Accounts payable $ 12,514 $ - $ 367,913 $ 934,445 $ 1,314,872 Taxes payable 1,513 - - - 1,513 Retainage payable 1,739 - 266,787 - 308,530 Due to other funds - - 32,038 5,586 37,624 Advances payable to other funds 63,900 - - - 63,900 Deposits 32,981 - - - 32,981 Deferred revenue - - - - - Accrued employee wages and leave payable 3,815 - - - 3,815 Total liabilities $ 116,462 $ - $ 666,738 $ 940,031 $ 1,763,235 Fund balances Unreserved, designated for: Capital projects funds $ 557,872 $ 191,420 $ 8,465,556 $ 11,651,706 $ 26,758,324 Total fund balances $ 557,872 $ 191,420 $ 8,465,556 $ 11,651,706 $ 26,758,324 TOTAL LIABILITIES AND FUND BALANCES $ 674,334 $ 191,420 $ 9,132,294 $ 12,591,737 $ 28,521,559 CAPITAL PROJECT FUNDS COMBINING BALANCE SHEET OTHER GOVERNMENTAL FUNDS December 31, 2006 Page 6 of 7 Combining Statements & Schedules, 6-10 2006 Comprehensive Annual Financial Report City of Renton, Washington TOTAL OTHER TOTAL TOTAL TOTAL GOVERNMENTAL ASSETS SRF DSF CPF FUNDS Cash & cash equivalents $ 2,762,311 $ 1,567,529 $ 9,504,087 $ 13,833,927 Investments 100,000 1,000,000 14,273,773 15,373,773 Receivables (net of allowances): Taxes - 485,536 - 485,536 Customer accounts 203,009 - 476,379 679,388 Accrued interest & penalty 8,212 21,694 419,314 449,220 Due from other funds 62,898 - - 62,898 Due from other governmental units 264,479 2,441 3,848,006 4,114,926 TOTAL ASSETS $ 3,400,909 $ 3,077,200 $ 28,521,559 $ 34,999,668 LIABILITIES AND FUND BALANCES - Liabilities - Accounts payable $ 153,082 $ 1,209 $ 1,314,872 $ 1,469,163 Taxes payable 478 - 1,513 1,991 Retainage payable - - 308,530 308,530 Due to other funds - - 37,624 37,624 Interfund loans payable - - 63,900 63,900 Deposits - - 32,981 32,981 Deferred revenue - 7,404 - 7,404 Accrued employee wages and leave payable 290,149 - 3,815 293,964 Total liabilities $ 443,709 $ 8,613 $ 1,763,235 $ 2,215,557 Fund balances Unreserved, designated for: Special revenue funds contingency $ 941,029 $ - $ - $ 941,029 Unreserved reported in: Special revenue funds 2,016,171 - - 2,016,171 Debt service funds - 3,068,587 - 3,068,587 Capital projects funds - - 26,758,324 26,758,324 Total fund balances $ 2,957,200 $ 3,068,587 $ 26,758,324 $ 32,784,111 TOTAL LIABILITIES AND FUND BALANCES $ 3,400,909 $ 3,077,200 $ 28,521,559 $ 34,999,668 Page 7 of 7 COMBINING BALANCE SHEET OTHER GOVERNMENTAL FUNDS December 31, 2006 Combining Statements & Schedules, 6-11 2006 Comprehensive Annual Financial Report City of Renton, Washington ARTERIAL STREET STREET LIBRARY REVENUES Taxes $ - $ 5,342,190 $ 1,768,711 Licenses and permits - 11,107 - Intergovernmental revenues 512,797 830,715 - Charges for services - - 5,948 Fines and forfeits - - 45,866 Interfund revenues - 1,051,967 - Special assessments - - - Contributions - - 13,814 Interest 21,374 55,010 9,460 Miscellaneous revenues - (358) 71 TOTAL REVENUES $ 534,171 $ 7,290,631 $ 1,843,870 EXPENDITURES Current: General government $- $ - $ - Transportation - 5,097,449 - Economic environment - - - Culture & recreation - - 1,759,340 Capital outlay - 1,550,637 - Debt service: Principal payment - - - Interest payment - - - TOTAL EXPENDITURES $ - $ 6,648,086 $ 1,759,340 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES $ 534,171 $ 642,545 $ 84,530 OTHER FINANCING SOURCES (USES) Proceeds of long-term debt - - - Transfer in $ - $ - $ - Transfer (out)(440,000) - - Sale of capital assets - 12,040 - TOTAL OTHER FINANCE SOURCES (USES) $ (440,000) $ 12,040 $ - NET CHANGE IN FUND BALANCE $ 94,171 $ 654,585 $ 84,530 FUND BALANCE JANUARY 1 $ 383,673 $ 1,044,410 $ 104,075 FUND BALANCE DECEMBER 31 $ 477,844 $ 1,698,995 $ 188,605 SPECIAL REVENUE FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OTHER GOVERNMENTAL FUNDS For the Year Ended December 31, 2006 Page 1 of 7 Combining Statements & Schedules, 6-12 2006 Comprehensive Annual Financial Report City of Renton, Washington HOTEL/ PATHS & 1% FOR CABLE COMM. TOTAL MOTEL TAX TRAILS ART & DEVELOPMENT SRF REVENUES Taxes $ 224,940 $ - $ - $ 70,000 $ 7,405,841 Licenses and permits - - - - 11,107 Intergovernmental revenues - - - - 1,343,512 Charges for services - - - - 5,948 Fines and forfeits - - - - 45,866 Interfund revenues - - - - 1,051,967 Special assessments - - - - - Contributions 80,000 - - - 93,814 Interest 13,162 123 2,897 6,850 108,876 Miscellaneous revenues - - - 1,500 1,213 TOTAL REVENUES $ 318,102 $ 123 $ 2,897 $ 78,350 $ 10,068,144 EXPENDITURES Current: General government $- $ - $ - $ - $ - Transportation - - - - 5,097,449 Economic environment 294,278 - - - 294,278 Culture & recreation - - - 65,902 1,825,242 Capital outlay - - 12,546 12,215 1,575,398 Debt service: Principal payment - - - - - Interest payment - - - - - TOTAL EXPENDITURES $ 294,278 $ - $ 12,546 $ 78,117 $ 8,792,367 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES $ 23,824 $ 123 $ (9,649) $ 233 $ 1,275,777 OTHER FINANCING SOURCES (USES) Proceeds of long-term debt - - - - - Transfer in $ - $ - $ 17,505 $ - $ 17,505 Transfer (out)- - - - (440,000) Sale of capital assets - - - - 12,040 TOTAL OTHER FINANCE SOURCES (USES) $ - $ - $ 17,505 $ - $ (410,455) NET CHANGE IN FUND BALANCE $ 23,824 $ 123 $ 7,856 $ 233 $ 865,322 FUND BALANCE JANUARY 1 $ 301,580 $ 2,904 $ 70,457 $ 184,779 $ 2,091,878 FUND BALANCE DECEMBER 31 $ 325,404 $ 3,027 $ 78,313 $ 185,012 $ 2,957,200 SPECIAL REVENUE FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OTHER GOVERNMENTAL FUNDS For the Year Ended December 31, 2006 Page 2 of 7 Combining Statements & Schedules, 6-13 2006 Comprehensive Annual Financial Report City of Renton, Washington 1997 LGO BOND 1978 LGO BOND GENERAL REDEMPTION REDEMPTION DEBT REVENUES Taxes $ 986,254 $ 21,000 $ 1,451,000 Licenses and permits - - - Intergovernmental revenues - - - Charges for services - - - Fines and forfeits - - - Interfund revenues - - - Special assessments - - - Contributions - - - Interest 8,954 1,168 133,752 Miscellaneous revenues - - - TOTAL REVENUES $ 995,208 $ 22,168 $ 1,584,752 EXPENDITURES Current: General government $- $ - $ - Transportation - - - Economic environment - - - Culture & recreation - - - Capital outlay - - - Debt service: Principal payment 198,243 12,399 862,708 Interest payment 789,219 8,562 880,720 TOTAL EXPENDITURES $ 987,462 $ 20,961 $ 1,743,428 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES $ 7,746 $ 1,207 $ (158,676) OTHER FINANCING SOURCES (USES) Proceeds of long-term debt $- $ - $ - Transfer in - - 525,000 Transfer (out)- - - Sale of capital assets - - - TOTAL OTHER FINANCE SOURCES (USES) $ - $ - $ 525,000 NET CHANGE IN FUND BALANCE $ 7,746 $ 1,207 $ 366,324 FUND BALANCE JANUARY 1 $ 20,297 $ 28,208 $ 2,054,189 FUND BALANCE DECEMBER 31 $ 28,043 $ 29,415 $ 2,420,513 Page 3 of 7 AND CHANGES IN FUND BALANCE DEBT SERVICE FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES, OTHER GOVERNMENTAL FUNDS For the Year Ended December 31, 2006 Combining Statements & Schedules, 6-14 2006 Comprehensive Annual Financial Report City of Renton, Washington 1989 UGO BOND SPECIAL TOTAL REDEMPTION ASSESSMENT DSF REVENUES Taxes $ 506,971 $ - $ 2,965,225 Licenses and permits - - - Intergovernmental revenues - - - Charges for services - - - Fines and forfeits - - - Interfund revenues - - - Special assessments - - - Contributions - - - Interest 17,338 - 161,212 Miscellaneous revenues - - - TOTAL REVENUES $ 524,309 $ - $ 3,126,437 EXPENDITURES Current: General government $- $ - $ - Transportation - - - Economic environment - - - Culture & recreation - - - Capital outlay - - - Debt service: Principal payment 430,000 - 1,503,350 Interest payment 84,998 - 1,763,499 TOTAL EXPENDITURES $ 514,998 $ - $ 3,266,849 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES $ 9,311 $ - $ (140,412) OTHER FINANCING SOURCES (USES) Proceeds of long-term debt $- $ - $ - Transfer in - - 525,000 Transfer (out)- (68,446) (68,446) Sale of capital assets - - - TOTAL OTHER FINANCE SOURCES (USES) $ - $ (68,446) $ 456,554 NET CHANGE IN FUND BALANCE $ 9,311 $ (68,446) $ 316,142 FUND BALANCE JANUARY 1 $ 581,305 $ 68,446 $ 2,752,445 FUND BALANCE DECEMBER 31 $ 590,616 $ - $ 3,068,587 DEBT SERVICE FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES, OTHER GOVERNMENTAL FUNDS For the Year Ended December 31, 2006 Page 4 of 7 AND CHANGES IN FUND BALANCE Combining Statements & Schedules, 6-15 2006 Comprehensive Annual Financial Report City of Renton, Washington DOWNTOWN C.D. IMPACT FIRE IMPACT TRANS. IMPACT PARKING MITIGATION MITIGATION MITIGATION REVENUES Taxes $ - $ - $ - $ - Licenses and permits - - - - Intergovernmental revenues - - - - Charges for services - 243,714 331,313 546,343 Fines and forfeits - - - - Interfund revenues - - - - Special assessments - - - - Contributions - - - - Interest 7,857 34,160 55,896 139,400 Miscellaneous revenues - - - - TOTAL REVENUES $ 7,857 $ 277,874 $ 387,209 $ 685,743 EXPENDITURES Current: General government $- $ - $ - $ - Transportation - - - - Economic environment - - - - Culture & recreation - - - - Capital outlay - - - - Debt service: Principal payment - - - - Interest payment - - - - TOTAL EXPENDITURES $ - $ - $ - $ - EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES $ 7,857 $ 277,874 $ 387,209 $ 685,743 OTHER FINANCING SOURCES (USES) Proceeds of long-term debt $- $ - $ - $ - Transfer in - - - - Transfer (out)- - (525,000) (965,000) Sale of capital assets - - - - TOTAL OTHER FINANCE SOURCES (USES) $ - $ - $ (525,000) $ (965,000) NET CHANGE IN FUND BALANCE $ 7,857 $ 277,874 $ (137,791) $ (279,257) FUND BALANCE JANUARY 1 185,785 617,530 1,301,644 3,918,128 FUND BALANCE DECEMBER 31 $ 193,642 $ 895,404 $ 1,163,853 $ 3,638,871 CAPITAL PROJECT FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OTHER GOVERNMENTAL FUNDS For the Year Ended December 31, 2006 Page 5 of 7 Combining Statements & Schedules, 6-16 2006 Comprehensive Annual Financial Report City of Renton, Washington LEASED AQUATIC GENERAL SO. LK. WA TOTAL PROPERTY CENTER C.I.P. INFRASTRUCTURE CPF REVENUES Taxes $ - $ - $ - $ 356,004 $ 356,004 Licenses and permits - - 1,818,813 - 1,818,813 Intergovernmental revenues - - 1,175,765 4,395,864 5,571,629 Charges for services 896,935 - - - 2,018,305 Fines and forfeits - - - - - Interfund revenues - - - - - Special assessments - - 511,932 - 511,932 Contributions - - - - - Interest 12,323 8,410 145,806 399,517 803,369 Miscellaneous revenues - - - - - TOTAL REVENUES $ 909,258 $ 8,410 $ 3,652,316 $ 5,151,385 $ 11,080,052 EXPENDITURES Current: General government $ 443,175 $ - $ - $ - $ 443,175 Transportation - - - - - Economic environment - - - - - Culture & recreation - - - - - Capital outlay - - 8,647,201 7,890,261 16,537,462 Debt service: Principal payment - - - - - Interest payment 21,600 - - 344,557 366,157 TOTAL EXPENDITURES $ 464,775 $ - $ 8,647,201 $ 8,234,818 $ 17,346,794 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES $ 444,483 $ 8,410 $ (4,994,885) $ (3,083,433) $ (6,266,742) OTHER FINANCING SOURCES (USES) Proceeds of long-term debt $- $ - $ 2,799,500 $ 15,690,529 $ 18,490,029 Transfer in 60,000 - 2,360,390 - 2,420,390 Transfer (out)- - (17,505) (955,390) (2,462,895) Sale of capital assets - - - - - TOTAL OTHER FINANCE SOURCES (USES) $ 60,000 $ - $ 5,142,385 $ 14,735,139 $ 18,447,524 NET CHANGE IN FUND BALANCE $ 504,483 $ 8,410 $ 147,500 $ 11,651,706 $ 12,180,782 FUND BALANCE JANUARY 1 53,389 183,010 8,318,056 - 14,577,542 FUND BALANCE DECEMBER 31 $ 557,872 $ 191,420 $ 8,465,556 $ 11,651,706 $ 26,758,324 CAPITAL PROJECT FUNDS Page 6 of 7 COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OTHER GOVERNMENTAL FUNDS For the Year Ended December 31, 2006 Combining Statements & Schedules, 6-17 2006 Comprehensive Annual Financial Report City of Renton, Washington TOTAL OTHER TOTAL TOTAL TOTAL GOVERNMENTAL SRF DSF CPF FUNDS REVENUES Taxes $ 7,405,841 $ 2,965,225 $ 356,004 $ 10,727,070 Licenses and permits 11,107 - 1,818,813 1,829,920 Intergovernmental revenues 1,343,512 - 5,571,629 6,915,141 Charges for services 5,948 - 2,018,305 2,024,253 Fines and forfeits 45,866 - - 45,866 Interfund revenues 1,051,967 - - 1,051,967 Special assessments - - 511,932 511,932 Contributions 93,814 - - 93,814 Interest 108,876 161,212 803,369 1,073,457 Miscellaneous revenues 1,213 - - 1,213 TOTAL REVENUES $ 10,068,144 $ 3,126,437 $ 11,080,052 $ 24,274,633 EXPENDITURES Current: General government $- $ - $ 443,175 $ 443,175 Transportation 5,097,449 - - 5,097,449 Economic environment 294,278 - - 294,278 Culture & recreation 1,825,242 - - 1,825,242 Capital outlay 1,575,398 - 16,537,462 18,112,860 Debt service: Principal payment - 1,503,350 - 1,503,350 Interest payment - 1,763,499 366,157 2,129,656 TOTAL EXPENDITURES $ 8,792,367 $ 3,266,849 $ 17,346,794 $ 29,406,010 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES $ 1,275,777 $ (140,412) $ (6,266,742) $ (5,131,377) OTHER FINANCING SOURCES (USES) Proceeds of long-term debt $- $ - $ 18,490,029 $ 18,490,029 Transfer in 17,505 525,000 2,420,390 2,962,895 Transfer (out)(440,000) (68,446) (2,462,895) (2,971,341) Sale of capital assets 12,040 - - 12,040 TOTAL OTHER FINANCE SOURCES (USES) $ (410,455) $ 456,554 $ 18,447,524 $ 18,493,623 NET CHANGE IN FUND BALANCE $ 865,322 $ 316,142 $ 12,180,782 $ 13,362,246 FUND BALANCE JANUARY 1 2,091,878 2,752,445 14,577,542 19,421,865 FUND BALANCE DECEMBER 31 $ 2,957,200 $ 3,068,587 $ 26,758,324 $ 32,784,111 Page 7 of 7 COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OTHER GOVERNMENTAL FUNDS For the Year Ended December 31, 2006 Combining Statements & Schedules, 6-18 2006 Comprehensive Annual Financial Report City of Renton, Washington ACTUAL BUDGETARY TO GAAP ACTUAL BUDGETARY DIFFERENCES GAAP ORIGINAL FINAL BASIS OVER (UNDER) BASIS REVENUES Intergovernmental revenues $ 438,000 $ 438,000 $ 501,096 $ 11,701 $ 512,797 Interest 2,000 2,000 21,374 - 21,374 TOTAL REVENUES $ 440,000 $ 440,000 $ 522,470 $ 11,701 $ 534,171 TOTAL EXPENDITURES $ - $ - $ - $ - $ - EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES $ 440,000 $ 440,000 $ 522,470 $ 11,701 $ 534,171 OTHER FINANCING SOURCES (USES) Transfer (out)$ (440,000) $ (440,000) $ (440,000) $ - $ (440,000) TOTAL OTHER FINANCE SOURCES (USES) $ (440,000) $ (440,000) $ (440,000) $ - $ (440,000) NET CHANGE IN FUND BALANCE $ - $ - $ 82,470 $ 11,701 $ 94,171 FUND BALANCE JANUARY 1 $ - $ - $ 592,338 $ (208,665) $ 383,673 FUND BALANCE DECEMBER 31 $ - $ - $ 674,808 $ (196,964) $ 477,844 BUDGETED AMOUNTS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET TO ACTUAL - ARTERIAL STREET FUND For the Year Ended December 31, 2006 Combining Statements & Schedules, 6-19 2006 Comprehensive Annual Financial Report City of Renton, Washington ACTUAL BUDGET TO GAAP ACTUAL BUDGETARY DIFFERENCES GAAP ORIGINAL FINAL BASIS OVER (UNDER) BASIS REVENUES Taxes $ 4,940,278 $ 4,940,278 $ 5,322,866 $ 19,324 $ 5,342,190 Licenses and permits 26,300 26,300 39,639 (28,532) 11,107 Intergovernmental revenues 788,100 788,100 825,208 5,507 830,715 Interfund revenues 902,000 927,000 1,056,869 (4,902) 1,051,967 Interest 24,400 24,400 55,010 - 55,010 Miscellaneous revenues 57,800 57,800 (504) 146 (358) TOTAL REVENUES $ 6,738,878 $ 6,763,878 $ 7,299,088 $ (8,457) $ 7,290,631 EXPENDITURES Current: Transportation $ 5,186,741 $ 5,186,741 $ 5,045,565 $ 51,884 $ 5,097,449 Capital outlay 1,552,137 1,605,137 1,552,340 (1,703) 1,550,637 TOTAL EXPENDITURES $ 6,738,878 $ 6,791,878 $ 6,597,905 $ 50,181 $ 6,648,086 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES $ - $ (28,000) $ 701,183 $ (58,638) $ 642,545 OTHER FINANCING SOURCES (USES) Sale of capital assets $ - $ - $ 13,100 $ (1,060) $ 12,040 TOTAL OTHER FINANCE SOURCES (USES) $ - $ - $ 13,100 $ (1,060) $ 12,040 NET CHANGE IN FUND BALANCE $ - $ (28,000) $ 714,283 $ (59,698) $ 654,585 FUND BALANCE JANUARY 1 $ - $ 28,000 $ 1,268,210 $ (223,800) $ 1,044,410 FUND BALANCE DECEMBER 31 $ - $ - $ 1,982,493 $ (283,498) $ 1,698,995 BUDGETED AMOUNTS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET TO ACTUAL - STREET FUND For the Year Ended December 31, 2006 Combining Statements & Schedules, 6-20 2006 Comprehensive Annual Financial Report City of Renton, Washington ACTUAL BUDGET TO GAAP ACTUAL BUDGETARY DIFFERENCES GAAP ORIGINAL FINAL BASIS OVER (UNDER) BASIS REVENUES Taxes $ 1,768,712 $ 1,768,712 $ 1,768,712 $ (1) $ 1,768,711 Charges for services 6,400 6,400 5,948 - 5,948 Fines and forfeits 30,950 30,950 45,866 - 45,866 Contributions 1,400 1,400 13,814 - 13,814 Interest 2,400 2,400 9,460 - 9,460 Miscellaneous revenues - - 71 - 71 TOTAL REVENUES $ 1,809,862 $ 1,809,862 $ 1,843,871 $ (1) $ 1,843,870 EXPENDITURES Current: Culture & recreation $ 1,808,862 $ 1,820,929 $ 1,762,403 $ (3,063) $ 1,759,340 Capital outlay 1,000 1,000 - - - TOTAL EXPENDITURES $ 1,809,862 $ 1,821,929 $ 1,762,403 $ (3,063) $ 1,759,340 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES $ - $ (12,067) $ 81,468 $ 3,062 $ 84,530 TOTAL OTHER FINANCE SOURCES (USES) $ - $ - $ - $ - $ - NET CHANGE IN FUND BALANCE $ - $ (12,067) $ 81,468 $ 3,062 $ 84,530 FUND BALANCE JANUARY 1 $ - $ 12,067 $ 683,218 $ (579,143) $ 104,075 FUND BALANCE DECEMBER 31 $ - $ - $ 764,686 $ (576,081) $ 188,605 BUDGETED AMOUNTS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET TO ACTUAL - LIBRARY FUND For the Year Ended December 31, 2006 Combining Statements & Schedules, 6-21 2006 Comprehensive Annual Financial Report City of Renton, Washington ACTUAL BUDGET TO GAAP ACTUAL BUDGETARY DIFFERENCES GAAP ORIGINAL FINAL BASIS OVER (UNDER) BASIS REVENUES Taxes $ 150,000 $ 160,000 $ 218,012 $ 6,928 $ 224,940 Contributions 65,000 77,500 65,000 15,000 80,000 Interest 5,000 5,000 13,162 - 13,162 TOTAL REVENUES $ 220,000 $ 242,500 $ 296,174 $ 21,928 $ 318,102 EXPENDITURES Current: Economic environment $ 220,000 $ 302,500 $ 296,305 $ (2,027) $ 294,278 TOTAL EXPENDITURES $ 220,000 $ 302,500 $ 296,305 $ (2,027) $ 294,278 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES $ - $ (60,000) $ (131) $ 23,955 $ 23,824 TOTAL OTHER FINANCE SOURCES (USES) $ - $ - $ - $ - $ - NET CHANGE IN FUND BALANCE $ - $ (60,000) $ (131) $ 23,955 $ 23,824 FUND BALANCE JANUARY 1 $ - $ 60,000 $ 276,258 $ 25,322 $ 301,580 FUND BALANCE DECEMBER 31 $ - $ - $ 276,127 $ 49,277 $ 325,404 BUDGETED AMOUNTS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET TO ACTUAL - HOTEL/MOTEL TAX FUND For the Year Ended December 31, 2006 Combining Statements & Schedules, 6-22 2006 Comprehensive Annual Financial Report City of Renton, Washington ACTUAL BUDGET TO GAAP ACTUAL BUDGETARY DIFFERENCES GAAP ORIGINAL FINAL BASIS OVER (UNDER) BASIS REVENUES Interest $- $ - $ 123 $ - $ 123 TOTAL REVENUES $ - $ - $ 123 $ - $ 123 TOTAL EXPENDITURES $ - $ - $ - $ - $ - EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES $ - $ - $ 123 $ - $ 123 TOTAL OTHER FINANCE SOURCES (USES) $ - $ - $ - $ - $ - NET CHANGE IN FUND BALANCE $ - $ - $ 123 $ - $ 123 FUND BALANCE JANUARY 1 $ - $ - $ 2,905 $ (1) $ 2,904 FUND BALANCE DECEMBER 31 $ - $ - $ 3,028 $ - $ 3,027 BUDGETED AMOUNTS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET TO ACTUAL - PATHS AND TRAILS FUND For the Year Ended December 31, 2006 Combining Statements & Schedules, 6-23 2006 Comprehensive Annual Financial Report City of Renton, Washington ACTUAL BUDGET TO GAAP ACTUAL BUDGETARY DIFFERENCES GAAP ORIGINAL FINAL BASIS OVER (UNDER) BASIS REVENUES Interest $- $ - $ 2,897 $ - $ 2,897 TOTAL REVENUES $ - $ - $ 2,897 $ - $ 2,897 EXPENDITURES Capital outlay $ 60,000 $ 60,000 $ 35,440 $ (22,894) $ 12,546 TOTAL EXPENDITURES $ 60,000 $ 60,000 $ 35,440 $ (22,894) $ 12,546 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES $ (60,000) $ (60,000) $ (32,543) $ 22,894 $ (9,649) OTHER FINANCING SOURCES (USES) Transfer in $ 60,000 $ 60,000 $ 17,505 $ - $ 17,505 TOTAL OTHER FINANCE SOURCES (USES) $ 60,000 $ 60,000 $ 17,505 $ - $ 17,505 NET CHANGE IN FUND BALANCE $ - $ - $ (15,038) $ 22,894 $ 7,856 FUND BALANCE JANUARY 1 $ - $ - $ 93,351 $ (22,894) $ 70,457 FUND BALANCE DECEMBER 31 $ - $ - $ 78,313 $ - $ 78,313 BUDGETED AMOUNTS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET TO ACTUAL - 1% FOR ART FUND For the Year Ended December 31, 2006 Combining Statements & Schedules, 6-24 2006 Comprehensive Annual Financial Report City of Renton, Washington ACTUAL BUDGET TO GAAP ACTUAL BUDGETARY DIFFERENCES GAAP ORIGINAL FINAL BASIS OVER (UNDER) BASIS REVENUES Taxes $ 35,000 $ 35,000 $ 70,000 $ - $ 70,000 Interest 2,400 2,400 3,162 3,688 6,850 Miscellaneous revenues 1,500 1,500 - 1,500 1,500 TOTAL REVENUES $ 38,900 $ 38,900 $ 73,162 $ 5,188 $ 78,350 EXPENDITURES Current: Culture & recreation $ 143,900 $ 143,900 $ 47,287 $ 18,615 $ 65,902 Capital outlay - - 12,215 - 12,215 TOTAL EXPENDITURES $ 143,900 $ 143,900 $ 59,502 $ 18,615 $ 78,117 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES $ (105,000) $ (105,000) $ 13,660 $ (13,427) $ 233 TOTAL OTHER FINANCE SOURCES (USES) $ - $ - $ - $ - $ - NET CHANGE IN FUND BALANCE $ (105,000) $ (105,000) $ 13,660 $ (13,427) $ 233 FUND BALANCE JANUARY 1 $ 105,000 $ 105,000 $ 181,689 $ 3,090 $ 184,779 FUND BALANCE DECEMBER 31 $ - $ - $ 195,349 $ (10,337) $ 185,012 BUDGETED AMOUNTS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET TO ACTUAL - CABLE COMMUNICATIONS DEVELOPMENT FUND For the Year Ended December 31, 2006 Combining Statements & Schedules, 6-25 2006 Comprehensive Annual Financial Report City of Renton, Washington ACTUAL BUDGET TO GAAP ACTUAL BUDGETARY DIFFERENCES GAAP ORIGINAL FINAL BASIS OVER (UNDER) BASIS REVENUES Taxes $ 986,253 $ 986,253 $ 986,253 $ 1 $ 986,254 Interest - - 8,954 - 8,954 TOTAL REVENUES $ 986,253 $ 986,253 $ 995,207 $ 1 $ 995,208 EXPENDITURES Debt service: Principal payment 198,000 198,000 198,243 - 198,243 Interest payment $ 792,300 $ 792,300 $ 789,219 $ - $ 789,219 TOTAL EXPENDITURES $ 990,300 $ 990,300 $ 987,462 $ - $ 987,462 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES $ (4,047) $ (4,047) $ 7,745 $ 1 $ 7,746 TOTAL OTHER FINANCE SOURCES (USES) $ - $ - $ - $ - $ - NET CHANGE IN FUND BALANCE $ (4,047) $ (4,047) $ 7,745 $ 1 $ 7,746 FUND BALANCE JANUARY 1 $ 4,047 $ 4,047 $ 20,295 $ 2 $ 20,297 FUND BALANCE DECEMBER 31 $ - $ - $ 28,040 $ 3 $ 28,043 BUDGETED AMOUNTS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET TO ACTUAL - 1997 LIMITED GENERAL OBLIGATION BOND REDEMPTION FUND (2001 GO Refund Bonds) For the Year Ended December 31, 2006 Combining Statements & Schedules, 6-26 2006 Comprehensive Annual Financial Report City of Renton, Washington ACTUAL BUDGET TO GAAP ACTUAL BUDGETARY DIFFERENCES GAAP ORIGINAL FINAL BASIS OVER (UNDER) BASIS REVENUES Taxes $ 21,000 $ 21,000 $ 21,000 $ - $ 21,000 Interest - - 1,168 - 1,168 TOTAL REVENUES $ 21,000 $ 21,000 $ 22,168 $ - $ 22,168 EXPENDITURES Debt service: Principal payment $ 12,400 $ 12,400 $ 12,399 $ - $ 12,399 Interest payment 9,100 9,100 8,562 - 8,562 TOTAL EXPENDITURES $ 21,500 $ 21,500 $ 20,961 $ - $ 20,961 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES $ (500) $ (500) $ 1,207 $ - $ 1,207 TOTAL OTHER FINANCE SOURCES (USES) $ - $ - $ - $ - $ - NET CHANGE IN FUND BALANCE $ (500) $ (500) $ 1,207 $ - $ 1,207 FUND BALANCE JANUARY 1 $ 500 $ 500 $ 28,206 $ 2 $ 28,208 FUND BALANCE DECEMBER 31 $ - $ - $ 29,413 $ 2 $ 29,415 BUDGETED AMOUNTS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET TO ACTUAL - 1978 LIMITED GENERAL OBLIGATION BOND REDEMPTION FUND (1997 GO Refunding Bonds) For the Year Ended December 31, 2006 Combining Statements & Schedules, 6-27 2006 Comprehensive Annual Financial Report City of Renton, Washington ACTUAL BUDGET TO GAAP ACTUAL BUDGETARY DIFFERENCES GAAP ORIGINAL FINAL BASIS OVER (UNDER) BASIS REVENUES Taxes $ 1,250,000 $ 1,250,000 $ 1,250,000 $ 201,000 $ 1,451,000 Interest 24,400 24,400 109,738 24,014 133,752 TOTAL REVENUES $ 1,274,400 $ 1,274,400 $ 1,359,738 $ 225,014 $ 1,584,752 EXPENDITURES Debt service: Principal payment $ 862,700 $ 862,700 $ 862,708 $ - $ 862,708 Interest payment 938,100 938,100 880,720 - 880,720 TOTAL EXPENDITURES $ 1,800,800 $ 1,800,800 $ 1,743,428 $ - $ 1,743,428 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES $ (526,400) $ (526,400) $ (383,690) $ 225,014 $ (158,676) OTHER FINANCING SOURCES (USES) Transfer in 525,000 525,000 525,000 - 525,000 TOTAL OTHER FINANCE SOURCES (USES) $ 525,000 $ 525,000 $ 525,000 $ - $ 525,000 NET CHANGE IN FUND BALANCE $ (1,400) $ (1,400) $ 141,310 $ 225,014 $ 366,324 FUND BALANCE JANUARY 1 $ 1,400 $ 1,400 $ 1,782,235 $ 271,954 $ 2,054,189 FUND BALANCE DECEMBER 31 $ - $ - $ 1,923,545 $ 496,968 $ 2,420,513 BUDGETED AMOUNTS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET TO ACTUAL - GENERAL GOVERNMENTAL MISCELLANEOUS DEBT SERVICE FUND For the Year Ended December 31, 2006 Combining Statements & Schedules, 6-28 2006 Comprehensive Annual Financial Report City of Renton, Washington ACTUAL BUDGET TO GAAP ACTUAL BUDGETARY DIFFERENCES GAAP ORIGINAL FINAL BASIS OVER (UNDER) BASIS REVENUES Taxes $ 514,100 $ 514,100 $ 507,055 $ (84) $ 506,971 Interest 4,300 4,300 17,216 122 17,338 TOTAL REVENUES $ 518,400 $ 518,400 $ 524,271 $ 38 $ 524,309 EXPENDITURES Debt service: Principal payment $ 430,000 $ 430,000 $ 430,000 $ - $ 430,000 Interest payment 88,400 88,400 84,998 - 84,998 TOTAL EXPENDITURES $ 518,400 $ 518,400 $ 514,998 $ - $ 514,998 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES $ - $ - $ 9,273 $ 38 $ 9,311 TOTAL OTHER FINANCE SOURCES (USES) $ - $ - $ - $ - $ - NET CHANGE IN FUND BALANCE $ - $ - $ 9,273 $ 38 $ 9,311 FUND BALANCE JANUARY 1 $ - $ - $ 576,033 $ 5,272 $ 581,305 FUND BALANCE DECEMBER 31 $ - $ - $ 585,306 $ 5,310 $ 590,616 BUDGETED AMOUNTS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET TO ACTUAL - 1989 UNLIMITED GENERAL OBLIGATION BOND REDEMPTION FUND (Coulon Park) For the Year Ended December 31, 2006 Combining Statements & Schedules, 6-29 2006 Comprehensive Annual Financial Report City of Renton, Washington ACTUAL BUDGET TO GAAP ACTUAL BUDGETARY DIFFERENCES GAAP ORIGINAL FINAL BASIS OVER (UNDER) BASIS REVENUES Special assessments $ 7,000 $ - $ - $ - $ - Interest 2,500 - - - - TOTAL REVENUES $ 9,500 $ - $ - $ - $ - EXPENDITURES Debt service: Interest payment $ 32,025 $ - $ - $ - $ - TOTAL EXPENDITURES $ 32,025 $ - $ - $ - $ - EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES $ (22,525) $ - $ - $ - $ - OTHER FINANCING SOURCES (USES) Transfer (out)$- $ (68,000) $ (67,828) $ (618) $ (68,446) TOTAL OTHER FINANCE SOURCES (USES) $ - $ (68,000) $ (67,828) $ (618) $ (68,446) NET CHANGE IN FUND BALANCE $ (22,525) $ (68,000) $ (67,828) $ (618) $ (68,446) FUND BALANCE JANUARY 1 $ 22,525 $ 68,000 $ 77,131 $ (8,685) $ 68,446 FUND BALANCE DECEMBER 31 $ - $ - $ 9,303 $ (9,303) $ - BUDGETED AMOUNTS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET TO ACTUAL - SPECIAL ASSESSMENT DEBT FUND For the Year Ended December 31, 2006 Combining Statements & Schedules, 6-30 2006 Comprehensive Annual Financial Report City of Renton, Washington ACTUAL BUDGET TO GAAP ACTUAL BUDGETARY DIFFERENCES GAAP ORIGINAL FINAL BASIS OVER (UNDER) BASIS REVENUES Interest $- $ - $ 7,857 $ - $ 7,857 TOTAL REVENUES $ - $ - $ 7,857 $ - $ 7,857 TOTAL EXPENDITURES $ - $ - $ - $ - $ - EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES $ - $ - $ 7,857 $ - $ 7,857 TOTAL OTHER FINANCE SOURCES (USES) $ - $ - $ - $ - $ - NET CHANGE IN FUND BALANCE $ - $ - $ 7,857 $ - $ 7,857 FUND BALANCE JANUARY 1 $ - $ - $ 170,982 $ 14,803 $ 185,785 FUND BALANCE DECEMBER 31 $ - $ - $ 178,839 $ 14,803 $ 193,642 BUDGETED AMOUNTS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET TO ACTUAL - DOWNTOWN PARKING GARAGE For the Year Ended December 31, 2006 Combining Statements & Schedules, 6-31 2006 Comprehensive Annual Financial Report City of Renton, Washington ACTUAL BUDGET TO GAAP ACTUAL BUDGETARY DIFFERENCES GAAP ORIGINAL FINAL BASIS OVER (UNDER) BASIS REVENUES Charges for services $ 250,000 $ 250,000 $ 243,714 $ - $ 243,714 Interest 5,000 5,000 34,160 - 34,160 TOTAL REVENUES $ 255,000 $ 255,000 $ 277,874 $ - $ 277,874 TOTAL EXPENDITURES $ - $ - $ - $ - $ - EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES $ 255,000 $ 255,000 $ 277,874 $ - $ 277,874 TOTAL OTHER FINANCE SOURCES (USES) $ - $ - $ - $ - $ - NET CHANGE IN FUND BALANCE $ 255,000 $ 255,000 $ 277,874 $ - $ 277,874 FUND BALANCE JANUARY 1 $ - $ - $ 617,528 $ 2 $ 617,530 FUND BALANCE DECEMBER 31 $ 255,000 $ 255,000 $ 895,402 $ 2 $ 895,404 BUDGETED AMOUNTS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET TO ACTUAL - COMMUNITY DEVELOPMENT IMPACT MITIGATION FUND For the Year Ended December 31, 2006 Combining Statements & Schedules, 6-32 2006 Comprehensive Annual Financial Report City of Renton, Washington ACTUAL BUDGET TO GAAP ACTUAL BUDGETARY DIFFERENCES GAAP ORIGINAL FINAL BASIS OVER (UNDER) BASIS REVENUES Charges for services $ 500,000 $ 500,000 $ 331,313 $ - $ 331,313 Interest 25,000 25,000 52,203 3,693 55,896 TOTAL REVENUES $ 525,000 $ 525,000 $ 383,516 $ 3,693 $ 387,209 TOTAL EXPENDITURES $ - $ - $ - $ - $ - EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES $ 525,000 $ 525,000 $ 383,516 $ 3,693 $ 387,209 OTHER FINANCING SOURCES (USES) Transfer (out)$ (525,000) $ (525,000) $ (525,000) $ - $ (525,000) TOTAL OTHER FINANCE SOURCES (USES) $ (525,000) $ (525,000) $ (525,000) $ - $ (525,000) NET CHANGE IN FUND BALANCE $ - $ - $ (141,484) $ 3,693 $ (137,791) FUND BALANCE JANUARY 1 $ - $ - $ 1,581,613 $ (279,969) $ 1,301,644 FUND BALANCE DECEMBER 31 $ - $ - $ 1,440,129 $ (276,276) $ 1,163,853 BUDGETED AMOUNTS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET TO ACTUAL - FIRE IMPACT MITIGATION FUND For the Year Ended December 31, 2006 Combining Statements & Schedules, 6-33 2006 Comprehensive Annual Financial Report City of Renton, Washington ACTUAL BUDGET TO GAAP ACTUAL BUDGETARY DIFFERENCES GAAP ORIGINAL FINAL BASIS OVER (UNDER) BASIS REVENUES Charges for services $ 500,000 $ 500,000 $ 546,344 $ (1) $ 546,343 Interest 100,000 100,000 168,833 (29,433) 139,400 TOTAL REVENUES $ 600,000 $ 600,000 $ 715,177 $ (29,434) $ 685,743 TOTAL EXPENDITURES $ - $ - $ - $ - $ - EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES $ 600,000 $ 600,000 $ 715,177 $ (29,434) $ 685,743 OTHER FINANCING SOURCES (USES) Transfer (out)$ (1,984,800) $ (1,984,800) $ (965,000) $ - $ (965,000) TOTAL OTHER FINANCE SOURCES (USES) $ (1,984,800) $ (1,984,800) $ (965,000) $ - $ (965,000) NET CHANGE IN FUND BALANCE $ (1,384,800) $ (1,384,800) $ (249,823) $ (29,434) $ (279,257) FUND BALANCE JANUARY 1 $ 1,384,800 $ 1,384,800 $ 4,812,106 $ (893,978) $ 3,918,128 FUND BALANCE DECEMBER 31 $ - $ - $ 4,562,283 $ (923,412) $ 3,638,871 BUDGETED AMOUNTS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET TO ACTUAL - TRANSPORTATION IMPACT MITIGATION FUND For the Year Ended December 31, 2006 Combining Statements & Schedules, 6-34 2006 Comprehensive Annual Financial Report City of Renton, Washington ACTUAL BUDGET TO GAAP ACTUAL BUDGETARY DIFFERENCES GAAP ORIGINAL FINAL BASIS OVER (UNDER) BASIS REVENUES Charges for services $ 904,902 $ 904,902 $ 427,783 $ 469,152 $ 896,935 Interest - - 12,323 - 12,323 TOTAL REVENUES $ 904,902 $ 904,902 $ 440,106 $ 469,152 $ 909,258 EXPENDITURES Current: General government $ 645,076 $ 687,892 $ 440,784 $ 2,391 $ 443,175 Capital outlay 116,956 116,956 - - - Debt service: Principal payment 120,000 120,000 180,000 (180,000) - Interest payment 14,400 14,400 25,200 (3,600) 21,600 TOTAL EXPENDITURES $ 896,432 $ 939,248 $ 645,984 $ (181,209) $ 464,775 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES $ 8,470 $ (34,346) $ (205,878) $ 650,361 $ 444,483 OTHER FINANCING SOURCES (USES) Transfer in $ - $ - $ - $ 60,000 $ 60,000 TOTAL OTHER FINANCE SOURCES (USES) $ - $ - $ - $ 60,000 $ 60,000 NET CHANGE IN FUND BALANCE $ 8,470 $ (34,346) $ (205,878) $ 710,361 $ 504,483 FUND BALANCE JANUARY 1 $ - $ 42,816 $ 356,761 $ (303,372) $ 53,389 FUND BALANCE DECEMBER 31 $ 8,470 $ 8,470 $ 150,883 $ 406,989 $ 557,872 BUDGETED AMOUNTS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET TO ACTUAL - LEASED CITY PROPERTIES For the Year Ended December 31, 2006 Combining Statements & Schedules, 6-35 2006 Comprehensive Annual Financial Report City of Renton, Washington ACTUAL BUDGET TO GAAP ACTUAL BUDGETARY DIFFERENCES GAAP ORIGINAL FINAL BASIS OVER (UNDER) BASIS REVENUES Interest $- $ - $ 8,410 $ - $ 8,410 TOTAL REVENUES $ - $ - $ 8,410 $ - $ 8,410 TOTAL EXPENDITURES $ - $ - $ - $ - $ - EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES $ - $ - $ 8,410 $ - $ 8,410 TOTAL OTHER FINANCE SOURCES (USES) $ - $ - $ - $ - $ - NET CHANGE IN FUND BALANCE $ - $ - $ 8,410 $ - $ 8,410 FUND BALANCE JANUARY 1 $ - $ - $ 183,010 $ - $ 183,010 FUND BALANCE DECEMBER 31 $ - $ - $ 191,420 $ - $ 191,420 BUDGETED AMOUNTS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET TO ACTUAL - AQUATIC CENTER FUND For the Year Ended December 31, 2006 Combining Statements & Schedules, 6-36 2006 Comprehensive Annual Financial Report City of Renton, Washington ACTUAL BUDGET TO GAAP ACTUAL BUDGETARY DIFFERENCES GAAP ORIGINAL FINAL BASIS OVER (UNDER) BASIS REVENUES Taxes $ 2,000,000 $ 2,000,000 $ 4,313,287 $ 200,998 $ 4,514,285 Contributions - - 23,001 - 23,001 Interest 100,000 100,000 541,293 246,810 788,103 TOTAL REVENUES $ 2,100,000 $ 2,100,000 $ 4,877,581 $ 447,808 $ 5,325,389 EXPENDITURES Current: Economic environment $ 50,000 $ 50,000 $ 33,969 $ - $ 33,969 Capital outlay 3,127,000 5,169,096 2,920,639 3,683 2,924,322 TOTAL EXPENDITURES $ 3,177,000 $ 5,219,096 $ 2,954,608 $ 3,683 $ 2,958,291 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES $ (1,077,000) $ (3,119,096) $ 1,922,973 $ 444,125 $ 2,367,098 OTHER FINANCING SOURCES (USES) Proceeds of long-term debt $- $ - $ 180,000 $ (180,000) $ - Transfer (out)- (402,000) (402,000) (60,000) (462,000) TOTAL OTHER FINANCE SOURCES (USES) $ - $ (402,000) $ (222,000) $ (240,000) $ (462,000) NET CHANGE IN FUND BALANCE $ (1,077,000) $ (3,521,096) $ 1,700,973 $ 204,125 $ 1,905,098 FUND BALANCE JANUARY 1 $ 1,077,000 $ 3,521,096 $ 12,928,344 $ 624,571 $ 13,552,915 FUND BALANCE DECEMBER 31 $ - $ - $ 14,629,317 $ 828,696 $ 15,458,013 BUDGETED AMOUNTS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET TO ACTUAL - MUNICIPAL FACILITIES CAPITAL IMPROVEMENT FUND For the Year Ended December 31, 2006 Combining Statements & Schedules, 6-37 2006 Comprehensive Annual Financial Report City of Renton, Washington ACTUAL BUDGET TO GAAP ACTUAL BUDGETARY DIFFERENCES GAAP ORIGINAL FINAL BASIS OVER (UNDER) BASIS REVENUES Licenses and permits $ 1,600,000 $ 1,600,000 $ 1,818,814 $ (1) $ 1,818,813 Intergovernmental revenues 9,594,400 9,594,400 1,249,587 (73,822) 1,175,765 Special assessments - - - 511,932 511,932 Interest - - 86,040 59,766 145,806 TOTAL REVENUES $ 11,194,400 $ 11,194,400 $ 3,154,441 $ 497,875 $ 3,652,316 EXPENDITURES Capital outlay $ 18,223,700 $ 22,033,600 $ 8,608,341 $ 38,860 $ 8,647,201 TOTAL EXPENDITURES $ 18,223,700 $ 22,033,600 $ 8,608,341 $ 38,860 $ 8,647,201 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES $ (7,029,300) $ (10,839,200) $ (5,453,900) $ 459,015 $ (4,994,885) OTHER FINANCING SOURCES (USES) Proceeds of long-term debt $ 2,978,400 $ 2,978,400 $ 2,799,500 $ - $ 2,799,500 Transfer in 2,424,800 3,380,190 2,360,390 - 2,360,390 Transfer (out)(60,000) (60,000) (17,505) - (17,505) TOTAL OTHER FINANCE SOURCES (USES) $ 5,343,200 $ 6,298,590 $ 5,142,385 $ - $ 5,142,385 NET CHANGE IN FUND BALANCE $ (1,686,100) $ (4,540,610) $ (311,515) $ 459,015 $ 147,500 FUND BALANCE JANUARY 1 $ 1,686,100 $ 4,540,610 $ 1,199,532 $ 7,118,524 $ 8,318,056 FUND BALANCE DECEMBER 31 $ - $ - $ 888,017 $ 7,577,539 $ 8,465,556 BUDGETED AMOUNTS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET TO ACTUAL - GENERAL GOVERNMENT CAPITAL IMPROVEMENT FUND For the Year Ended December 31, 2006 Combining Statements & Schedules, 6-38 2006 Comprehensive Annual Financial Report City of Renton, Washington ACTUAL BUDGET TO GAAP ACTUAL BUDGETARY DIFFERENCES GAAP ORIGINAL FINAL BASIS OVER (UNDER) BASIS REVENUES Taxes $ - $ 2,073,626 $ 356,005 $ (1) $ 356,004 Licenses and permits - 268,000 - - - Intergovernmental revenues - 7,054,314 2,092,867 2,302,997 4,395,864 Charges for services - 978,152 - - - Interest - - 46,829 352,688 399,517 TOTAL REVENUES $ - $ 10,374,092 $ 2,495,701 $ 2,655,684 $ 5,151,385 EXPENDITURES Current: Transportation $ - $ 30,000 $ - $ - $ - Capital outlay - 23,940,197 7,884,675 5,586 7,890,261 Debt service: Interest payment - - 344,557 - 344,557 TOTAL EXPENDITURES $ - $ 23,970,197 $ 8,229,232 $ 5,586 $ 8,234,818 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES $ - $ (13,596,105) $ (5,733,531) $ 2,650,098 $ (3,083,433) OTHER FINANCING SOURCES (USES) Proceeds of long-term debt $- $ 14,551,495 $ 15,690,529 $- $ 15,690,529 Transfer (out)- (955,390) (955,390) - (955,390) TOTAL OTHER FINANCE SOURCES (USES) $ - $ 13,596,105 $ 14,735,139 $- $ 14,735,139 NET CHANGE IN FUND BALANCE $ - $ - $ 9,001,608 $ 2,650,098 $ 11,651,706 FUND BALANCE JANUARY 1 $ - $ - $ - $ - $ - FUND BALANCE DECEMBER 31 $ - $ - $ 9,001,608 $ 2,650,098 $ 11,651,706 BUDGETED AMOUNTS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET TO ACTUAL - SOUTH LAKE WASHINGTON INFRASTRUCTURE For the Year Ended December 31, 2006 Combining Statements & Schedules, 6-39 2006 Comprehensive Annual Financial Report City of Renton, Washington T0TAL NON-MAJOR AIRPORT GOLF COURSE ENTERPRISE FUNDS ASSETS Current assets: Cash & cash equivalents $ 1,239,662 $ 674,405 $ 1,914,067 Investments at fair value 500,000 250,000 750,000 Receivables (net of allowances): Customer accounts 10,839 34,690 45,529 Interest - investments 7,296 5,104 12,400 Interfund loan receivable Due from other governmental units 37,040 13,299 50,339 Inventory of materials and supplies - 46,937 46,937 Total current assets $ 1,794,837 $ 1,024,435 $ 2,819,272 Restricted assets: Cash & residual investments @FMV $- $ 441,358 $ 441,358 Total restricted assets $- $ 441,358 $ 441,358 Capital assets (net)$ 9,955,619 $ 9,519,549 $ 19,475,168 Deferred charges and other assets - 40,547 40,547 TOTAL ASSETS $ 11,750,456 $ 11,025,889 $ 22,776,345 COMBINING STATEMENT OF NET ASSETS NON-MAJOR ENTERPRISE FUNDS December 31, 2006 Page 1 of 2 Combining Statements & Schedules, 6-40 2006 Comprehensive Annual Financial Report City of Renton, Washington T0TAL NON-MAJOR AIRPORT GOLF COURSE ENTERPRISE FUNDS LIABILITIES Current liabilities: Accounts payable $ 46,528 $ 51,002 $ 97,530 Retainage payable 35,409 6,225 41,634 Due to other funds 2,734 5,666 8,400 Accrued interest payable - 13,030 13,030 Accrued employee benefits payable 18,247 33,222 51,469 Accrued taxes payable 18,245 12,013 30,258 Custodial Accounts - 105,783 105,783 Deferred revenue 59,081 - 59,081 Operating leases payable - - - Total current liabilities $ 180,244 $ 226,941 $ 407,185 Liabilities payable from restricted assets: Revenue bonds payable - current $- $ 285,000 $ 285,000 Total liabilities payable from restricted assets $- $ 285,000 $ 285,000 Long-term liabilities: Revenue bonds payable $- $ 2,805,000 $ 2,805,000 Unamortized discounts on revenue bonds - (272,813) (272,813) Accrued employee wages and benefits payable 19,327 53,890 73,217 Total long-term liabilities $ 19,327 $ 2,586,077 $ 2,605,404 TOTAL LIABILITIES $ 199,571 $ 3,098,018 $ 3,297,589 NET ASSETS Investment in capital assets, net of related debt $ 9,955,619 $ 5,865,715 $ 15,821,334 Restricted - 441,358 441,358 Unrestricted 1,595,266 1,620,798 3,216,064 TOTAL NET ASSETS $ 11,550,885 $ 7,927,871 $ 19,478,756 NON-MAJOR ENTERPRISE FUNDS COMBINING STATEMENT OF NET ASSETS December 31, 2006 Page 2 of 2 Combining Statements & Schedules, 6-41 2006 Comprehensive Annual Financial Report City of Renton, Washington T0TAL NON-MAJOR AIRPORT GOLF COURSE ENTERPRISE FUNDS OPERATING REVENUES: Charges for services $ 909,424 $ 2,272,416 $ 3,181,840 Other services 190 - 190 TOTAL OPERATING REVENUES $ 909,614 $ 2,272,416 $ 3,182,030 OPERATING EXPENSES: Operations and maintenance $ 476,183 $ 1,014,347 $ 1,490,530 Benefit payments 98,172 246,674 344,846 Professional services 46,738 - 46,738 Administrative and general 168,774 284,248 453,022 Insurance 25,300 - 25,300 Taxes 153 10,658 10,811 Depreciation 381,043 267,552 648,595 TOTAL OPERATING EXPENSES $ 1,196,363 $ 1,823,479 $ 3,019,842 OPERATING INCOME (LOSS)$ (286,749) $ 448,937 $ 162,188 NON-OPERATING REVENUES(EXPENSES): Intergovernmental revenues $ 282,130 $ - $ 282,130 Interest revenues 93,648 65,257 158,905 Gain (loss) on sale of capital assets - 4,009 4,009 Other non-operating revenues(expenses)(61) 7,100 7,039 Interest expense - (167,782) (167,782) Amortization of debt discount and expense - (65,613) (65,613) NON-OPERATING REVENUE NET OF EXPENSES $ 375,717 $ (157,029) $ 218,688 INCOME (LOSS) BEFORE CONTRIBUTIONS AND TRANSFERS $ 88,968 $ 291,908 $ 380,876 CHANGE IN NET ASSETS $ 88,968 $ 291,908 $ 380,876 NET ASSETS, JANUARY 1 $ 11,461,917 $ 7,635,963 $ 19,097,880 NET ASSETS, DECEMBER 31 $ 11,550,885 $ 7,927,871 $ 19,478,756 ENTERPRISE FUNDS COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS NON - MAJOR ENTERPRISE FUNDS For the Year Ended December 31, 2006 BUSINESS-TYPE ACTIVITIES Combining Statements & Schedules, 6-42 2006 Comprehensive Annual Financial Report City of Renton, Washington T0TAL NON-MAJOR AIRPORT GOLF COURSE ENTERPRISE FUNDS CASH FLOWS FROM OPERATING ACTIVITIES: Cash received for services $ 1,016,795 $ 2,287,361 $ 3,304,156 Cash paid to suppliers for goods & services (715,295) (1,327,728) (2,043,023) Cash paid to other funds for goods & services (433) 1,087 654 Cash paid to employees (89,500) (243,850) (333,350) Other non-operating receipts (61) (156,673) (156,734) NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES $ 211,506 $ 560,197 $ 771,703 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers from other funds $ 282,130 - $ 282,130 yg NET CASH PROVIDED (USED) BY NONCAPITAL FINANCING ACTIVITIES $ 282,130 $ - $ 282,130 CASH FLOWS FROM CAPITAL FINANCING ACTIVITIES: Acquisition & construction of capital assets $ (1,404,325) $ (435,895) $ (1,840,220) Principal payments on debt - (285,000) (285,000) Interest payments on debt - 13,965 13,965 NET CASH PROVIDED (USED) BY CAPITAL FINANCING ACTIVITIES $ (1,404,325) $ (706,930) $ (2,111,255) CASH FLOWS FROM INVESTING ACTIVITIES: Payments for investments $ 988,821 - $ 988,821 Interest on investments 125,188 $ 74,958 200,146 NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES $ 1,114,009 $ 74,958 $ 1,188,967 NET INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS $ 203,320 $ (71,775) $ 131,545 CASH & CASH EQUIVALENTS, JANUARY 1 $ 1,036,342 $ 746,180 $ 1,782,522 CASH & CASH EQUIVALENTS, DECEMBER 31 $ 1,239,662 $ 674,405 $ 1,914,067 BUSINESS-TYPE ACTIVITIES ENTERPRISE FUNDS STATEMENT OF CASH FLOWS NON-MAJOR ENTERPRISE FUNDS For the Year Ended December 31, 2006 Page 1 of 2 Combining Statements & Schedules, 6-43 2006 Comprehensive Annual Financial Report City of Renton, Washington TOTAL NON-MAJOR AIRPORT GOLF COURSE ENTERPRISE FUNDS RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES: Operating income (loss)$ (286,749) $ 448,937 $ 162,188 Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation & amortization of deferred charges 381,043 267,552 648,595 Other non-operating revenue (61) (156,673) (156,734) (Increase) decrease in accounts receivable 136,121 16,414 152,535 (Increase) decrease in due from other funds/governmental units (29,334) (13,299) (42,633) (Increase) decrease in inventory & prepaid items 6,164 6,164 Increase (decrease) in vouchers retainage payable (16,017) (16,017) Increase (decrease) in due to other governmental units (433) 1,087 654 Increase (decrease) in payables & other short-term liabilities 11,878 (13,484) (1,606) Increase (decrease) in customer deposits 16,692 16,692 Increase (decrease) in deferred revenues (9,631) (9,631) Increase (decrease) in accrued employee leave benefits 8,672 2,824 11,496 Total adjustments $ 498,255 $ 111,260 $ 609,515 NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES $ 211,506 $ 560,197 $ 771,703 NONCASH INVESTING, CAPITAL, AND FINANCING ACTIVITIES Depreciation & amortization 378,315 $ 332,557 $ 710,872 Increase in fair value of investments 2,821 - 2,821 ENTERPRISE FUNDS BUSINESS-TYPE ACTIVITIES STATEMENT OF CASH FLOWS NON-MAJOR ENTERPRISE FUNDS For the Year Ended December 31, 2006 Page 2 of 2 Combining Statements & Schedules, 6-44 2006 Comprehensive Annual Financial Report City of Renton, Washington TOTAL EQUIPMENT INSURANCE INTERNAL RENTAL FUND SERVICE FUNDS ASSETS Current assets: Cash & cash equivalents $ 2,689,454 $ 5,582,117 $ 8,271,571 Investments at fair value 2,850,000 6,680,000 9,530,000 Receivables (net of allowances): Customer accounts 13,570 16,949 30,519 Interest - investments 67,526 173,501 241,027 Due from other governmental units - 1,876 1,876 Prepayments 103,044 2,994 106,038 Total current assets $ 5,723,594 $ 12,457,437 $ 18,181,031 Property, plant, and equipment: Capital assets (net)$ 5,317,155 $ - $ 5,317,155 Total property, plant, and equipment $ 5,317,155 $ - $ 5,317,155 Deferred charges and other assets TOTAL ASSETS $ 11,040,749 $ 12,457,437 $ 23,498,186 COMBINING STATEMENT OF NET ASSETS INTERNAL SERVICE FUNDS December 31, 2006 Page 1 of 2 Combining Statements & Schedules, 6-45 2006 Comprehensive Annual Financial Report City of Renton, Washington TOTAL EQUIPMENT INSURANCE INTERNAL RENTAL FUND SERVICE FUNDS LIABILITIES Current liabilities: Accounts payable $ 336,786 $ 791,742 $ 1,128,528 Due to other funds - 7,855 7,855 Accrued employee benefits payable 32,292 12,793 45,085 Accrued taxes payable 616 - 616 Total current liabilities $ 369,694 $ 812,390 $ 1,182,084 Long-term liabilities: Accrued employee wages and benefits payable $ 160,090 $ 154,370 $ 314,460 Claims incurred but not reported - 2,627,782 2,627,782 Total long-term liabilities $ 160,090 $ 2,782,152 $ 2,942,242 TOTAL LIABILITIES $ 529,784 $ 3,594,542 $ 4,124,326 NET ASSETS Investment in capital assets, Net of related debt $ 5,317,155 $ - $ 5,317,155 Unrestricted 5,193,810 8,862,895 14,056,705 TOTAL NET ASSETS $ 10,510,965 $ 8,862,895 $ 19,373,860 COMBINING STATEMENT OF NET ASSETS INTERNAL SERVICE FUNDS December 31, 2006 Page 2 of 2 Combining Statements & Schedules, 6-46 2006 Comprehensive Annual Financial Report City of Renton, Washington TOTAL EQUIPMENT INSURANCE INTERNAL RENTAL FUND SERVICE FUNDS OPERATING REVENUES: Charges for services $ 6,488,654 $ 2,961,036 $ 9,449,690 Other operating revenues - 7,901,626 7,901,626 TOTAL OPERATING REVENUES $ 6,488,654 $ 10,862,662 $ 17,351,316 OPERATING EXPENSES: Operations and maintenance $ 1,180,332 $ 163,363 $ 1,343,695 Benefit payments 1,545,118 9,373,232 10,918,350 Professional services 382,620 274,768 657,388 Administrative and general 1,426,804 65,677 1,492,481 Insurance 246,500 1,913,018 2,159,518 Depreciation 870,624 6,215 876,839 TOTAL OPERATING EXPENSES $ 5,651,998 $ 11,796,273 $ 17,448,271 OPERATING INCOME (LOSS)$ 836,656 $ (933,611) $ (96,955) NON-OPERATING REVENUES (EXPENSES): Intergovernmental revenues 11,163 - 11,163 Interest revenues $ 220,451 $ 460,841 $ 681,292 Gain (loss) on sale of capital assets 86,244 - 86,244 Other non-operating revenues (expenses)6,691 452,198 458,889 NON-OPERATING REVENUE NET OF EXPENSE $ 324,549 $ 913,039 $ 1,237,588 INCOME (LOSS) BEFORE CONTRIBUTIONS AND TRANSFERS $ 1,161,205 $ (20,572) $ 1,140,633 Transfers in (out)$ 402,000 $ 272,000 $ 674,000 CHANGE IN NET ASSETS $ 1,563,205 $ 251,428 $ 1,814,633 NET ASSETS, JANUARY 1 $ 8,947,760 $ 8,611,467 $ 17,559,227 NET ASSETS, DECEMBER 31 $ 10,510,965 $ 8,862,895 $ 19,373,860 COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS INTERNAL SERVICE FUNDS For the Year Ended December 31, 2006 Combining Statements & Schedules, 6-47 2006 Comprehensive Annual Financial Report City of Renton, Washington TOTAL EQUIPMENT INSURANCE INTERNAL RENTAL FUND SERVICE FUNDS CASH FLOWS FROM OPERATING ACTIVITIES: Cash received for services $ 6,491,575 $ 10,850,728 $ 17,342,303 Cash paid to suppliers for goods & services (1,356,746) (1,975,044) (3,331,790) Cash paid to employees (1,417,395) (9,023,007) (10,440,402) Other operating receipts (1,470,270) 200,770 (1,269,500) NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES $ 2,247,164 $ 53,447 $ 2,300,611 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers from other funds $- $ 272,000 $ 272,000 NET CASH PROVIDED (USED) BY NONCAPITAL FINANCING ACTIVITIES $ - $ 272,000 $ 272,000 CASH FLOWS FROM CAPITAL FINANCING ACTIVITIES: Acquisition & construction of capital assets $ (1,153,134) $ - $ (1,153,134) NET CASH PROVIDED (USED) BY CAPITAL FINANCING ACTIVITIES $ (1,153,134) $ - $ (1,153,134) CASH FLOWS FROM INVESTING ACTIVITIES: Payments for investments $- $ (394,871) $ (394,871) Interest on investments 225,558 484,595 710,153 NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES $ 225,558 $ 89,724 $ 315,282 NET INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS $ 1,319,588 $ 415,171 $ 1,734,759 CASH & CASH EQUIVALENTS, JANUARY 1 $ 1,369,866 $ 5,166,946 $ 6,536,812 CASH & CASH EQUIVALENTS, DECEMBER 31 $ 2,689,454 $ 5,582,117 $ 8,271,571 COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS For the Year Ended December 31, 2006 Page 1 of 2 Combining Statements & Schedules, 6-48 2006 Comprehensive Annual Financial Report City of Renton, Washington TOTAL EQUIPMENT INSURANCE INTERNAL RENTAL FUND SERVICE FUNDS RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES: Operating income (loss)$ 836,656 $ (933,611) $ (96,955) Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation & amortization of deferred charges 870,624 6,215 876,839 Other non-operating revenue 92,935 452,198 545,133 (Increase) decrease in accounts receivable 2,921 (11,934) (9,013) (Increase) decrease in due from other funds/governmental units 6,725 (1,876) 4,849 (Increase) decrease in inventory & prepaid items (10,928) 6 (10,922) Increase (decrease) in vouchers retainage payable 309,756 185,615 495,371 Increase (decrease) in payables & other short-term liabilities (176) 6,615 6,439 Increase (decrease) in accrued employee leave benefits 138,651 350,219 488,870 Total adjustments $ 1,410,508 $ 987,058 $ 2,397,566 NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES $ 2,247,164 $ 53,447 $ 2,300,611 NONCASH INVESTING, CAPITAL, AND FINANCING ACTIVITIES Depreciation & amortization 870,624 6,215 876,839 For the Year Ended December 31, 2006 COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS Page 2 of 2 Combining Statements & Schedules, 6-49 2006 Comprehensive Annual Financial Report City of Renton, Washington BEGINNING ENDING BALANCE DEBITS CREDITS BALANCE ASSETS Cash $ 366,137 $ 136,021,157 135,915,772 $ 471,522 TOTAL ASSETS $ 366,137 $ 136,021,157 $ 135,915,772 $ 471,522 LIABILITIES Vouchers & contacts payable $ 12,042 $ 105,744,955 105,813,293 $ 80,380 Accrued employee benefits 1,180 49,787,486 49,786,306 - Deposits payable 352,915 344,713 382,940 391,142 TOTAL LIABILITIES $ 366,137 $ 155,877,154 $ 155,982,539 $ 471,522 STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUND - SPECIAL DEPOSIT For the Year Ended December 31, 2006 Page 1 of 1 Combining Statements & Schedules, 6-50 2006 Comprehensive Annual Financial Report City of Renton, Washington Statistical Section, 7-1 STATISTICAL SECTION December 31, 2006 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. 2006 Comprehensive Annual Financial Report City of Renton, Washington Statistical Section, 7-2 This page is intentionally left blank. 2006 Comprehensive Annual Financial Report City of Renton, Washington 20031 2004 2005 2006 Governmental activities Invested in capital assets, net of related debt 89,360,313$ 195,282,055$ 203,297,293$ 209,964,556$ Restricted 6,816,559 21,460,395 28,578,305 42,261,663 Unrestricted 41,699,232 25,746,196 29,272,573 29,340,290 Total governmental activities net assets 137,876,104$ 242,488,646$ 261,148,171$ 281,566,509$ Business-type activities Invested in capital assets, net of related debt 158,886,497$ 163,891,546$ 171,827,746$ 181,515,939$ Restricted 3,048,210 3,555,690 3,555,690 3,555,690 Unrestricted 15,886,887 21,612,156 21,541,563 19,357,695 Total business-type activities net assets 177,821,594$ 189,059,392$ 196,924,999$ 204,429,324$ Primary government Invested in capital assets, net of related debt 248,246,810$ 359,173,601$ 375,125,039$ 391,480,495$ Restricted 9,864,769 25,016,085 32,133,995 45,817,353 Unrestricted 57,586,119 47,358,352 50,814,136 48,697,985 Total primary government net assets 315,697,698$ 431,548,038$ 458,073,170$ 485,995,833$ 1First Year of Net Assets by Component Source : City of Renton, Finance & IS Deparrtment FISCAL YEAR TABLE 1 NET ASSETS BY COMPONENT LAST THREE FISCAL YEARS (Accrual basis of accounting) Statistical Section, 7-3 2006 Comprehensive Annual Financial Report City of Renton, Washington 20031 2004 2005 2006 EXPENSES Government activities: General government 24,365,244$ 22,144,567$ 21,137,856$ 19,977,086$ Judicial 1,258,956 1,340,655 1,380,816 1,434,134 Security of persons and property 26,238,548 28,647,443 29,496,791 30,749,762 Physical environment 2,013,239 2,278,445 2,208,340 2,618,832 Transportation 4,221,713 6,797,356 4,183,880 15,798,138 Economic development 5,886,795 5,519,929 5,899,796 6,372,118 Mental and physical health 21,646 228,966 300,171 295,072 Culture and recreation 8,689,666 10,303,074 9,744,692 9,695,924 Interest on long-term debt 1,827,464 1,627,581 1,710,346 1,772,370 Total governmental activities expenses 74,523,271$ 78,888,016$ 76,062,688$ 88,713,436$ Business-type activities: Water 22,381,464$ 23,347,678$ 25,884,227$ 27,220,132 Airport 1,219,465 936,305 1,226,810 1,196,363 Solid Waste 8,516,598 8,558,441 9,327,525 9,706,016 Golf 1,831,670 1,933,113 2,132,077 2,056,874 Total business-type activities net assets 33,949,197$ 34,775,537$ 38,570,639$ 40,179,385$ Total primary government expenses 108,472,468$ 113,663,553$ 114,633,327$ 128,892,821$ PROGRAM REVENUES Government activities: Charges for services: General government charges 16,716,472$ 15,579,366$ 17,525,244$ 21,852,465$ Judicial 1,287,901 1,531,773 697,883 831,485 Security of persons and property 929,780 200,149 247,235 517,151 Physical environment 759,700 837,027 894,750 400,798 Transportation 1,519,383 1,916,862 1,660,698 1,628,154 Economic environment 4,969,475 4,236,596 4,516,899 4,368,399 Culture and recreation 1,460,879 1,507,387 1,558,458 1,742,071 Operating grants and contributions 3,732,443 6,213,791 4,979,601 4,596,836 Capital grants and contributions 1,094,764 1,745,718 1,227,503 5,909,870 Total governmental activities program revenues 32,470,797$ 33,768,669$ 33,308,271$ 41,847,229$ Business-type activities: Charges for services: Business-type charges 37,077,258$ 38,917,114$ 40,029,830$ 40,056,079$ Operating grants and contributions 222,193 112,616 196,974 77,688 Capital grants and contributions 6,600,471 6,583,241 5,101,699 6,317,203 Total business-type activities program revenues 43,899,922$ 45,612,971$ 45,328,503$ 46,450,970$ Total primary government program revenues 76,370,719$ 79,381,640$ 78,636,774$ 88,298,199$ Net (expense)/revenue Governmental activities (42,052,474)$ (45,119,347)$ (42,754,417)$ (46,866,207)$ Business-type activities 9,950,725 10,837,434 6,757,864 6,271,585 Total primary government net expense (32,101,749)$ (34,281,913)$ (35,996,553)$ (40,594,622)$ FISCAL YEAR LAST THREE FISCAL YEARS CHANGES IN NET ASSETS TABLE 2 (Accrual basis of accounting) Page 1 of 2 Statistical Section, 7-4 2006 Comprehensive Annual Financial Report City of Renton, Washington 20031 2004 2005 2006 GENERAL REVENUES AND OTHER CHANGES IN NET ASSETS Governmental activities: Taxes Property taxes 19,520,575$ 19,578,390$ 21,523,818$ 23,600,131$ Sales taxes 17,334,831 18,281,949 18,910,823 20,869,595$ Business taxes 10,895,130 9,957,129 10,643,068 11,219,303$ Other taxes 5,449,877 6,751,264 6,938,265 7,718,945$ Penalties and interest 5,415 6,048 49 3,799$ Investment earnings 1,081,398 1,291,669 1,449,001 3,251,975$ Miscellaneous 312,867 4,346,619 1,958,217 689,243$ Transfers (40,000) (10,304) (9,300) (68,446) Total governmental activities 54,560,093$ 60,202,764$ 61,413,941$ 67,284,545$ Business-type activities: Investment earnings 242,055 270,605 458,797 881,486 Miscellaneous 369,513 119,455 639,646 282,808 Transfers 40,000 10,304 9,300 68,446 Total business-type activities 651,568$ 400,364$ 1,107,743$ 1,232,740$ Total primary government 55,211,661$ 60,603,128$ 62,521,684$ 68,517,285$ CHANGES IN NET ASSETS Governmental activities 12,507,619$ 15,083,417$ 18,659,524$ 20,418,338$ Business-type activities 10,602,293 11,237,798 7,865,607 7,504,325 Total primary government 23,109,912$ 26,321,215$ 26,525,131$ 27,922,663$ 1First Year of Changes in Net Assets Source: City of Renton, Finance & IS Department FISCAL YEAR Page 2 of 2 (Accrual basis of accounting) TABLE 2 CHANGES IN NET ASSETS LAST THREE FISCAL YEARS Statistical Section, 7-5 2006 Comprehensive Annual Financial Report City of Renton, Washington 1997 1998 1999 2000 2001 General fund Reserved 87,000$ 87,000$ 83,000$ 311,673$ 318,053$ Unreserved 6,291,113 4,555,713 5,381,222 8,025,332 6,428,315 Total general fund 6,378,113$ 4,642,713$ 5,464,222$ 8,337,005$ 6,746,368$ All other governmental funds Reserved -$ -$ -$ -$ 920,000$ Unreserved, reported in: Special revenue funds 8,999,135 9,037,183 2,890,947 3,898,265 4,938,021 Debt service funds 2,919,630 2,325,340 2,987,015 2,653,495 2,546,129 Capital project funds 17,694,301 18,663,675 21,682,591 23,570,741 29,133,681 Total all other governmental funds 29,613,066$ 30,026,198$ 27,560,553$ 30,122,501$ 37,537,831$ Source : City of Renton, Finance & IS Department TABLE 3 (Accrual basis of accounting) FUND BALANCE OF GOVERNMENT FUNDS LAST TEN FISCAL YEARS FISCAL YEAR Page 1 of 2 General fund $- $2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 General Statistical Section, 7-6 2006 Comprehensive Annual Financial Report City of Renton, Washington 2002 2003 2004 2005 2006 General fund Reserved 83,000$ 83,000$ 108,742$ 8,000$ 8,000$ Unreserved 3,920,136 6,758,364 8,603,003 9,189,871 10,737,097 Total general fund 4,003,136$ 6,841,364$ 8,711,745$ 9,197,871$ 10,745,097$ All other governmental funds Reserved 1,260,000$ 880,000$ 500,000$ 240,000$ 63,900$ Unreserved, reported in: Special revenue funds 3,361,529 3,985,917 3,238,246 2,929,692 4,243,189 Debt service funds 2,030,335 1,916,243 1,486,894 2,752,445 3,068,587 Capital project funds 33,742,638 22,628,512 26,202,437 27,890,457 42,152,437 Total all other governmental funds 40,394,502$ 29,410,672$ 31,427,577$ 33,812,594$ 49,528,113$ (Accrual basis of accounting) FUND BALANCE OF GOVERNMENT FUNDS LAST TEN FISCAL YEARS TABLE 3 Page 2 of 2 FISCAL YEAR All other governmental funds $- $10,000,000 $20,000,000 $30,000,000 $40,000,000 $50,000,000 $60,000,000 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 All other governmental Statistical Section, 7-7 2006 Comprehensive Annual Financial Report City of Renton, Washington 1997 1998 1999 2000 2001 REVENUES Taxes 40,050,814$ 41,722,051$ 44,397,793$ 47,827,013$ 50,218,530$ Licenses and permits 3,935,350 4,146,167 3,780,303 4,562,892 4,065,518 Intergovernmental 7,391,617 9,078,690 5,637,817 6,793,084 6,129,103 Charges for services 5,548,215 7,785,760 7,157,860 7,805,409 7,301,538 Fines 733,561 722,054 831,327 937,689 993,093 Interfund revenues - - - - - Special assessments 393,961 516,929 689,931 352,648 333,056 Contributions 800,000 1,974,897 91,383 64,092 191,877 Interest 2,250,016 2,626,519 2,129,455 2,307,978 2,583,931 Miscellaneous 608,217 555,701 682,625 727,465 1,231,574 Total revenues 61,711,751$ 69,128,768$ 65,398,494$ 71,378,270$ 73,048,220$ EXPENDITURES General government 8,675,215$ 9,915,676$ 10,058,875$ 10,858,538$ 11,193,462$ Security of persons and property 19,249,622 20,074,074 21,300,403 22,889,748 23,569,864 Physical environment 1,708,461 1,730,735 1,892,541 1,769,642 1,878,956 Transportation 9,899,119 10,985,484 10,706,833 10,330,362 13,885,329 Economic and physical development 3,414,034 4,060,970 3,814,967 4,337,239 4,484,526 Mental and physical health 7,570 10,962 8,486 8,599 6,756 Culture and recreation 5,592,278 5,804,099 6,166,358 6,606,662 7,263,056 Capital outlay 15,359,691 13,712,159 11,002,950 7,450,837 5,359,801 Debt service Principal 2,273,896 2,032,436 2,707,994 2,481,026 2,086,447 Interest 1,525,725 1,381,069 1,345,588 1,205,281 882,748 Total expenditures 67,705,611$ 69,707,664$ 69,004,995$ 67,937,934$ 70,610,945$ Excess of revenues over (under) expenditures (5,993,860)$ (578,896)$ (3,606,501)$ 3,440,336$ 2,437,275$ OTHER FINANCING SOURCES (USES) Transfers in 6,683,875$ 6,244,003$ 4,670,101$ 3,694,498$ 6,850,944$ Transfers out (7,856,758) (7,413,375) (4,587,778) (3,662,809) (8,873,294) Other financing sources (uses) (238,549) Proceeds of long-term debt 16,141,643 - 38,990 - 6,023,484 Interfund loan proceeds - - 448,000 823,000 363,800 Interfund loan repayments - - (448,000) (823,000) (363,800) Funds remitted to bond trustee (1,410,279) Capital leases - - - - - Sale of capital assets 197,757 362,890 563,283 1,403,688 61,685 Total other financing sources (uses) 13,517,689$ (806,482)$ 684,596$ 1,435,377$ 4,062,819$ Net change in fund balances 7,523,829$ (1,385,378)$ (2,921,905)$ 4,875,713$ 6,500,094$ Debt service as a percentage of noncapital expenditures 7.26% 6.10% 6.99% 6.09% 4.55% Source : City of Renton, Finance & IS Department FISCAL YEAR LAST TEN FISCAL YEARS (Accrual basis of accounting) Page 1 of 2 TABLE 4 CHANGES IN FUND BALANCES OF GOVERNMENT FUNDS Statistical Section, 7-8 2006 Comprehensive Annual Financial Report City of Renton, Washington 2002 2003 2004 2005 2006 REVENUES Taxes 49,901,849$ 53,722,322$ 55,344,506$ $58,794,081 64,005,567 Licenses and permits 4,229,501 4,226,883 4,329,086 4,686,608 4,962,507 Intergovernmental 6,212,359 4,533,544 7,570,570 5,687,169 9,769,225 Charges for services 7,777,778 6,016,704 6,593,153 5,563,289 6,543,289 Fines 1,043,199 1,055,564 1,008,984 731,286 906,685 Interfund revenues - 3,482,110 3,638,574 3,796,042 2,843,147 Special assessments 312,908 295,673 20,852 23,340 511,932 Contributions 118,103 255,102 249,938 317,600 214,387 Interest 1,073,538 1,081,420 1,059,886 1,060,353 2,570,682 Miscellaneous 1,198,846 40,314 122,799 569,881 $223,908 Total revenues 71,868,081$ 74,709,636$ 79,938,348$ 81,229,649$ 92,551,329$ EXPENDITURES General government 12,523,577$ 13,283,955$ 13,660,095$ 14,382,634$ 13,972,592 Security of persons and property 24,924,380 26,029,354 27,462,613 29,031,626 31,157,303 Physical environment 1,898,665 2,015,562 2,201,777 2,190,228 2,609,452 Transportation 10,622,373 4,461,387 4,615,345 4,711,924 5,097,449 Economic and physical development 4,479,582 4,613,587 4,947,080 5,123,024 5,519,219 Mental and physical health 11,445 10,368 11,723 12,700 9,231 Culture and recreation 7,382,069 7,585,936 8,563,967 8,876,250 9,933,854 Capital outlay 10,532,479 21,089,534 13,246,669 11,438,104 21,117,525 Debt service Principal 1,849,269 1,417,042 1,477,579 1,375,738 1,503,350 Interest 1,382,717 1,833,102 1,763,893 1,713,525 2,129,656 Total expenditures 75,606,556$ 82,339,827$ 77,950,741$ 78,855,753$ 93,049,631$ Excess of revenues over (under) expenditures (3,738,475)$ (7,630,191)$ 1,987,607$ 2,373,896$ (498,302) OTHER FINANCING SOURCES (USES) Transfers in 9,441,451$ 3,511,700$ 6,563,978$ 5,476,360$ 2,962,895 Transfers out (10,009,962) (3,551,700) (7,764,278) (5,443,660) (3,705,341) Other financing sources (uses) Proceeds of long-term debt 3,879,038 - - - 18,490,029 Interfund loan proceeds 860,000 - - - Interfund loan repayments (860,000) - - - Funds remitted to bond trustee Capital leases - - - - Sale of capital assets 104,825 171,249 117,328 464,547 13,464 Total other financing sources (uses) 3,415,352$ 131,249$ (1,082,972)$ 497,247$ 17,761,047$ Net change in fund balances (323,123)$ (7,498,942)$ 904,635$ 2,871,143$ 17,262,745$ Debt service as a percentage of noncapital expenditures 4.97% 5.31% 5.01% 4.58% 5.05% FISCAL YEAR (Accrual basis of accounting) LAST TEN FISCAL YEARS Page 2 of 2 CHANGES IN FUND BALANCES OF GOVERNMENT FUNDS TABLE 4 Statistical Section, 7-9 2006 Comprehensive Annual Financial Report City of Renton, Washington PENALTY / ADMISSION / INTEREST FISCAL PROPERTY SALES UTILITY EXCISE DELINQUENT YEAR TAX TAX TAX TAX TAX TOTAL 1997 14,231,754 13,438,839 7,351,853 3,161,912 3,352 38,187,709 1998 14,524,083 14,948,815 7,645,323 4,336,307 1,036 41,455,565 1999 15,659,424 15,282,981 8,289,865 4,831,792 1,217 44,065,280 2000 16,397,638 16,585,478 9,788,167 4,724,682 8,462 47,504,428 2001 16,794,636 16,724,787 11,105,722 5,066,122 1,939 49,693,206 2002 18,373,237 16,431,456 9,798,260 4,711,446 4,404 49,318,803 2003 19,587,986 17,334,831 10,895,131 5,449,877 5,415 53,273,240 2004 19,886,805 18,281,949 9,957,130 6,751,265 6,048 54,883,197 2005 21,826,229 18,910,822 10,643,068 6,938,264 49 58,318,433 2006 23,600,131 20,869,596 11,219,302 7,718,945 3,799 63,411,773 Source: City of Renton, Finance & IS Department TABLE 5 GENERAL GOVERNMENT TAX REVENUE BY SOURCE LAST TEN FISCAL YEARS (Modified accrual basis of accounting) TAX REVENUES BY SOURCE 1997 - 2006 $0 $20 $40 $60 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Mi l l i o n s o f D o l l a r s Penalty/Delinquent Excise Business Sales and Use Property Statistical Section, 7-10 2006 Comprehensive Annual Financial Report City of Renton, Washington % OF TOTAL % OF TOTAL TAXABLE1 TAXABLE TAXABLE TAXABLE ASSESSED ASSESSED ASSESSED ASSESSED TAXPAYER VALUE RANK VALUE VALUE RANK VALUE Boeing 629,784,603 1 7.52% 736,036,584 1 20.30% Paccar 116,317,925 2 1.39% 89,191,285 2 2.46% Puget Sound Energy-Elec/Gas 80,829,517 3 0.97% 71,182,509 3 1.96% Providence Health 57,902,300 4 0.69% AMB Property Corp. 49,479,200 5 0.59% Renton Properties LLC 36,993,300 6 0.44% Qwest Corporation 30,371,972 7 0.36% 33,233,915 5 0.92% BRE Properties 30,005,710 8 0.36% Wal Mart 28,566,077 9 0.34% Axis Grand Holdings: 28,549,000 10 0.34% (formerly HSC Real Estate Inc.) Renton Building 1-7 38,242,800 4 1.05% Fred Meyer Stores Inc. 22,997,426 6 0.63% Renton Village Assoc. 17,323,900 7 0.48% Sunpointe Associates Ltd 15,333,300 8 0.42% Renton Talbot Delaware 14,569,000 9 0.40% Blackner JVLLC 11,735,000 10 0.32% All Others 7,282,002,201 86.99% 2,575,756,045 71.04% Total Assessed Valuation 8,370,801,805$ 100.00% 3,625,601,764$ 100.00% Source: 1King County Department of Assessments TABLE 6 PRINCIPAL PROPERTY TAX PAYERS 2006 1997 December 31, 2006 Statistical Section, 7-11 2006 Comprehensive Annual Financial Report City of Renton, Washington FISCAL YEAR PERSONAL PROPERTY ENDED RESIDENTIAL COMMERCIAL DECEMBER 31 PROPERTY PROPERTY OTHER 1997 2,978,575,856 N/A 647,025,908 1998 3,099,917,868 N/A 725,191,466 1999 3,543,075,457 N/A 715,425,293 2000 2,958,443,598 2,368,630,142 714,803,819 2001 1,703,991,595 2,613,181,185 745,490,732 2002 2,810,986,787 2,008,043,209 774,850,492 2003 2,314,794,930 2,921,180,100 747,879,276 2004 2,598,762,769 3,057,577,700 716,313,413 2005 2,823,407,473 3,217,655,000 656,709,434 2006 3,734,771,858 3,415,317,348 636,713,076 12000 is the first year when breakdown is available 2The tax exempt real property value is not available for the last ten years Source: King County Department of Assessments LAST TEN FISCAL YEARS TABLE 7 ASSESSED VALUE OF TAXABLE PROPERTY REAL PROPERTY Page 1 of 2 Total Taxable Assessed Value 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Year As s e s s e d V a l u e ( m i l l i o n s ) Taxable Assessed Value Statistical Section, 7-12 2006 Comprehensive Annual Financial Report City of Renton, Washington FISCAL TOTAL YEAR TOTAL DIRECT ENDED ASSESSED TAX DECEMBER 31 VALUE RATE 1997 3,625,601,764$ 3.988 1998 3,825,109,334$ 3.896 1999 4,258,500,750$ 3.747 2000 6,041,877,559$ 3.684 2001 5,062,663,512$ 3.375 2002 5,593,880,488$ 3.354 2003 5,983,854,306$ 3.277 2004 6,372,653,882$ 3.327 2005 6,697,771,907$ 3.227 2006 7,786,802,282$ 3.116 TABLE 7 ASSESSED VALUE OF TAXABLE PROPERTY LAST TEN FISCAL YEARS Page 2 of 2 Direct Tax Rate - 0.500 1.000 1.500 2.000 2.500 3.000 3.500 4.000 4.500 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Year Ra t e Direct Tax Rate Statistical Section, 7-13 2006 Comprehensive Annual Financial Report City of Renton, Washington Debt Total Debt Total Fiscal Operating Service City Operating Service County Year Millage Millage Millage Millage Millage Millage 1997 3.60000 0.38781 3.98781 1.75898 0.37275 2.13173 1998 3.55000 0.34608 3.89608 1.50586 0.34523 1.85109 1999 3.42726 0.31981 3.74707 1.51957 0.25428 1.77385 2000 3.39877 0.28488 3.68365 1.39802 0.29149 1.68951 2001 3.27385 0.10078 3.37463 1.47266 0.26981 1.74247 2002 3.26036 0.09397 3.35433 1.19751 0.25198 1.44949 2003 3.18871 0.08865 3.27736 1.15386 0.19562 1.34948 2004 3.16022 0.08322 3.24344 1.18279 0.24867 1.43146 2005 3.14843 0.07861 3.22704 1.15665 0.22564 1.38229 2006 3.04482 0.07088 3.11570 1.09915 0.22954 1.32869 Source: King County Codes and Levies * Special Districts include Emergency Medical Services, Port and Hospital districts CITY OF RENTON COUNTY DIRECT RATES OVERLAPPING RATES LAST TEN FISCAL YEARS Page 1 of 2 TABLE 8 PROPERTY TAX RATES DIRECT AND OVERLAPPING GOVERNMENTS - 0.50000 1.00000 1.50000 2.00000 2.50000 3.00000 3.50000 4.00000 M i l l a g e 19 9 7 19 9 8 19 9 9 20 0 0 20 0 1 20 0 2 20 0 3 20 0 4 20 0 5 20 0 6 Year Direct Property Tax Rates Statistical Section, 7-14 2006 Comprehensive Annual Financial Report City of Renton, Washington Total Debt Total Total Direct & Fiscal Special Operating Service School Overlapping Overlapping Year Districts *Millage Millage Millage Rates Rates 1997 0.69220 2.09865 1.05164 3.15029 5.97422 9.96203 1998 0.42400 2.11248 1.37974 3.49222 5.76731 9.66339 1999 0.68252 1.87903 1.90387 3.78290 6.23927 9.98634 2000 0.60714 1.85286 1.80111 3.65397 5.95062 9.63427 2001 0.53526 1.74147 1.62522 3.36669 5.64442 9.01905 2002 0.53599 1.63516 1.47772 3.11288 5.09836 8.45269 2003 0.59292 1.62358 1.36333 2.98691 4.92931 8.20667 2004 0.58319 1.60492 1.88086 3.48578 5.50043 8.74387 2005 0.57542 1.62332 2.36918 3.99250 5.95021 9.17725 2006 1.04312 1.53290 2.42680 3.95970 6.33151 9.44721 SCHOOL DISTRICT OVERLAPPING RATES LAST TEN FISCAL YEARS TABLE 8 PROPERTY TAX RATES DIRECT AND OVERLAPPING GOVERNMENTS Page 2 of 2 - 1.00000 2.00000 3.00000 4.00000 5.00000 6.00000 7.00000 Mi l l a g e 19 9 7 19 9 8 19 9 9 20 0 0 20 0 1 20 0 2 20 0 3 20 0 4 20 0 5 20 0 6 Year Overlapping Property Tax Rates Statistical Section, 7-15 2006 Comprehensive Annual Financial Report City of Renton, Washington FISCAL YEAR TOTAL TAX ENDED LEVY FOR DECEMBER 31 FISCAL YEAR AMOUNT % OF LEVY 1997 14,167,346 13,970,125 98.6% 1998 14,719,382 14,511,118 98.6% 1999 15,850,628 15,595,427 98.4% 2000 16,633,388 16,337,790 98.2% 2001 16,967,683 16,677,882 98.3% 2002 18,581,814 18,285,908 98.4% 2003 19,486,858 19,149,258 98.3% 2004 20,451,011 20,184,238 98.7% 2005 21,654,069 21,358,689 98.6% 2006 22,796,225 22,339,299 98.0% Sources: 1 Annual Tax Receivable Summary 2 2006 Annual Property Tax Reports from King County COLLECTED WITHIN THE 1 FISCAL YEAR OF THE LEVY Page 1 of 2 TABLE 9 PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS Levies vs Collections - 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 TOTAL TAX TOTAL COLLECTIONS TO DATE Statistical Section, 7-16 2006 Comprehensive Annual Financial Report City of Renton, Washington FISCAL YEAR COLLECTIONS 2 ENDED IN SUBSEQUENT DECEMBER 31 YEARS AMOUNT % OF LEVY 1997 197,217 14,167,342 100.0% 1998 208,264 14,719,382 100.0% 1999 254,790 15,850,217 100.0% 2000 291,580 16,629,370 100.0% 2001 282,509 16,960,391 100.0% 2002 281,900 18,567,808 99.9% 2003 332,060 19,481,318 100.0% 2004 234,434 20,418,671 99.8% 2005 240,042 21,598,731 99.7% 2006 22,339,299 98.0% TOTAL COLLECTIONS TO DATE Page 2 of 2 TABLE 9 PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS Property tax collections - 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Collections within fiscal yr Collections in subsequent years Statistical Section, 7-17 2006 Comprehensive Annual Financial Report City of Renton, Washington 1997 1998 1 1999 2000 2001 FUNCTION RETAIL TRADE SECTOR Furniture $873,707 N/A $1,245,207 $1,564,002 $1,920,734 Electronics and Appliances General Merchandise 404,771 N/A 560,413 581,268 643,592 Misc Retail Trade 482,771 N/A 586,594 713,017 704,420 Others 1,373,238 N/A 1,495,038 1,641,879 1,608,082 Subtotal Retail $3,134,487 $3,128,884 $3,887,252 $4,500,166 $4,876,828 OTHER SECTORS Construction $1,865,804 $1,913,356 $1,545,886 $1,671,621 $2,060,061 Manufacturing 643,122 710,983 411,607 348,439 426,965 Transportation 534,482 516,572 614,603 768,421 648,177 Wholesale 1,559,964 1,601,399 1,692,718 1,643,207 1,535,709 Automotive 2,761,201 2,840,747 3,446,262 3,775,582 3,307,794 Services 1,770,179 1,770,069 2,063,272 2,128,373 1,913,630 Miscellaneous 307,273 302,535 467,401 428,379 574,268 Subtotal - Other Sectors $9,442,025 $9,655,661 $10,241,749 $10,764,022 $10,466,604 Total Sales Tax $12,576,512 $12,784,544 $14,129,001 $15,264,188 $15,343,432 1 The detail information for the Retail sector for 1998 is not available Source: Finance Department, City of Renton SALES TAX COLLECTIONS BY SECTOR LAST TEN FISCAL YEARS TABLE 10 FISCAL YEAR Page 1 of 2 Sales Tax Collections by Sector 1997-2001 $0 $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 1997 1998 1999 2000 2001 Retail Construction Manufacturing Transportation Wholesale Automotive Services Miscellaneous Statistical Section, 7-18 2006 Comprehensive Annual Financial Report City of Renton, Washington 2002 2003 2004 2005 2006 FUNCTION RETAIL TRADE SECTOR Furniture $1,623,906 $1,758,082 $2,205,114 $1,203,942 $1,276,644 Electronics and Appliances 1,065,416 1,130,621 General Merchandise 673,164 788,699 1,013,876 1,073,144 1,100,217 Misc Retail Trade 681,148 763,596 862,919 848,834 928,083 Others 1,622,166 1,667,483 1,651,782 2,227,721 2,464,896 Subtotal Retail $4,600,384 $4,977,860 $5,733,691 $6,419,057 $6,900,461 OTHER SECTORS Construction $1,899,005 $2,122,560 $2,641,907 $2,495,684 $2,688,902 Manufacturing 547,333 754,501 556,555 569,269 797,166 Transportation 621,314 563,863 628,918 494,866 567,401 Wholesale 1,451,387 1,442,263 1,416,559 1,025,132 1,016,468 Automotive 3,549,973 3,625,878 3,538,502 3,946,163 4,303,221 Services 1,835,039 1,953,254 1,677,315 1,736,569 2,039,090 Miscellaneous 546,400 567,225 460,372 421,715 378,233 Subtotal - Other Sectors $10,450,451 $11,029,544 $10,920,128 $10,689,398 $11,790,482 Total Sales Tax $15,050,835 $16,007,404 $16,653,819 $17,108,455 $18,690,943 TABLE 10 SALES TAX COLLECTIONS BY SECTOR LAST TEN FISCAL YEARS FISCAL YEAR Page 2 of 2 Sales Tax Collections by Sector 2002-2006 $0 $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 $8,000,000 2002 2003 2004 2005 2006 Retail Construction Manufacturing Transportation Wholesale Automotive Services Miscellaneous Statistical Section, 7-19 2006 Comprehensive Annual Financial Report City of Renton, Washington BUSINESS-TYPE ACTIVITIES GENERAL SPECIAL FISCAL OBLIGATION ASSESSMENT ENTERPRISE PWTF YEAR BONDS BONDS BONDS LOANS 1997 30,121,269 1,835,000 29,940,000 7,691,547 1998 24,486,738 1,335,000 28,580,000 9,245,358 1999 26,466,763 680,000 26,860,000 9,024,460 2000 24,345,738 320,000 25,020,000 8,645,788 2001 29,289,290 135,000 23,070,000 7,894,357 2002 33,797,023 - 31,230,000 8,222,135 2003 32,245,982 - 29,070,000 7,579,447 2004 30,629,403 - 37,680,000 8,350,304 2005 29,107,664 - 35,790,000 11,581,168 2006 45,584,314 - 33,840,000 10,692,020 Source: City of Renton, Finance & IS Department 1The percentage of personal Income column is based on personal income of King County. (See table 16) GOVERNMENTAL ACTIVITIES Page 1 of 2 LAST TEN FISCAL YEARS RATIOS OF OUTSTANDING DEBT BY TYPE TABLE 11 2006 Primary Government Debt GO Bonds 38% PWTF Loans 15% Enterprise Bonds 47% Statistical Section, 7-20 2006 Comprehensive Annual Financial Report City of Renton, Washington BUSINESS- TYPE ACTIVITIES PERCENTAGE1 TOTAL PRIMARY OF FISCAL CAPITAL GOVERNMENT PERSONAL DEBT PER YEAR LEASES DEBT INCOME POPULATION CAPITA 1997 123,947 69,713,760 12.08% 45,920 1,518 1998 82,095 63,731,189 9.73% 46,270 1,377 1999 42,276 63,075,498 8.64% 47,620 1,325 2000 86,609 58,420,135 7.56% 50,052 1,167 2001 45,656 60,436,304 7.86% 51,140 1,182 2002 7,238 73,258,398 9.40% 53,840 1,361 2003 58,105 68,955,537 8.78% 54,900 1,256 2004 33,834 76,695,545 8.75% 55,360 1,385 2005 8,621 76,489,458 N/A 56,840 1,346 2006 24,500 90,140,834 N/A 58,360 1,545 Page 2 of 2 TABLE 11 RATIOS OF OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS Primary Government Debt - 20,000,000 40,000,000 60,000,000 80,000,000 100,000,000 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Years Total Debt Statistical Section, 7-21 2006 Comprehensive Annual Financial Report City of Renton, Washington 1997 1998 1999 2000 2001 Debt Limit 271,920,132$ 319,387,557$ 319,387,556$ 340,899,076$ 379,698,131$ Total net debt applicable to limit 28,936,990 26,958,807 24,462,390 22,248,983 27,586,389 Legal debt margin 242,983,142$ 292,428,750$ 294,925,166$ 318,650,093$ 352,111,742$ Total net debt applicable to the limit as a percentage of debt limit 10.64% 8.44% 7.66% 6.53% 7.27% Source: City of Renton, Finance & IS Department LAST TEN FISCAL YEARS TABLE 12 LEGAL DEBT MARGIN INFORMATION Page 1 of 2 FISCAL YEAR Statistical Section, 7-22 2006 Comprehensive Annual Financial Report City of Renton, Washington 2002 2003 2004 2005 2006 Debt Limit 419,541,037$ 448,787,441$ 477,947,409$ 502,332,893$ 550,085,741$ Total net debt applicable to limit 32,258,499 28,173,327 28,137,536 26,423,667 42,515,728 Legal debt margin 387,282,538$ 420,614,114$ 449,809,873$ 475,909,226$ 507,570,013$ Total net debt applicable to the limit as a percentage of debt limit 7.69% 6.28% 5.89% 5.26% 7.73% LEGAL DEBT MARGIN CALCULATION FOR FISCAL YEAR 2006 Assessed Value 7,334,476,542$ Add back: exempt real property - Total assessed value 7,334,476,542$ Debt Limit 2.5% of general purpose limit, voted and non-voted 183,361,914 2.5% Utility purpose limit, voted 183,361,914 2.5% Open Space, Park and Capital facilities, voted 183,361,914 Total Debt Limit 550,085,741$ Debt applicable to limit: General obligation bonds 45,534,501$ Contracts Payable 49,813 45,584,314$ Less: Amount set aside for repayment of general obligation debt and contracts payable (3,068,586) Total net debt applicable to limit 42,515,728$ Legal Debt Margin 507,570,013$ LAST TEN FISCAL YEARS TABLE 12 LEGAL DEBT MARGIN INFORMATION Page 2 of 2 FISCAL YEAR Statistical Section, 7-23 2006 Comprehensive Annual Financial Report City of Renton, Washington LESS: NET % OF GO GENERAL 1 AMOUNTS1 GENERAL DEBT TO FISCAL OBLIGATION AVAILABLE OBLIGATION ASSESSED2 ASSESSED PER YEAR BONDS IN DEBT DEBT VALUE VALUE CAPITA 1997 30,121,269 1,641,090 28,480,179 3,625,601,764 0.79% 620 1998 24,486,738 1,590,425 22,896,313 3,825,109,334 0.60% 495 1999 26,466,763 2,345,570 24,121,193 4,258,500,750 0.57% 507 2000 24,345,738 2,096,755 22,248,983 4,514,205,078 0.49% 445 2001 29,289,290 1,770,724 27,518,566 4,988,126,362 0.55% 538 2002 33,797,023 1,540,203 32,256,820 5,549,470,895 0.58% 599 2003 32,245,982 1,879,654 30,366,328 5,959,258,370 0.51% 553 2004 30,629,403 1,440,509 29,188,894 6,333,995,426 0.46% 527 2005 29,107,664 2,683,999 26,423,665 6,697,750,147 0.39% 465 2006 45,584,314 3,068,587 42,515,727 7,334,476,542 0.58% 729 Source: 1 Finance Department, City of Renton 2 King County Department of Assessments TABLE 13 RATIOS OF GENERAL BONDED DEBT OUTSTANDING LAST TEN FISCAL YEARS 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 $- 10,000,000 20,000,000 30,000,000 40,000,000 50,000,000 General Obligation Debt GO Bond Debt Statistical Section, 7-24 2006 Comprehensive Annual Financial Report City of Renton, Washington ESTIMATED ESTIMATED2 SHARE OF DEBT 1 % OVERLAPPING GOVERNMENTAL UNIT OUTSTANDING APPLICABLE DEBT City of Renton Direct Debt 45,584,314$ 100% 45,584,314$ City of Renton Overlapping Debt King County 862,538,000 2.80% 24,151,064 Port of Seattle 416,645,000 2.80% 11,666,060 Renton School District #403 238,476,299 56.54% 134,834,499 Issaquah School District #411 223,109,320 1.40% 3,123,530 Kent School District #415 239,430,209 0.0005% 1,197 Fire District 10-1 950,670 0.4051% 3,851 King County Library 80,429,703 0.49% 394,106 City of Renton Overlapping Debt 174,174,308$ Total Direct and Overlapping Debt 219,758,622$ Sources: 1 King County Department of Executive Services 2 King County Department of Assessments TABLE 14 DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT City of Renton Direct and Overlapping Debt Renton-$29.02 County-$24.3 Port-$10.3 Schools- $118.6 Others - $0.32 $0 $20 $40 $60 $80 $100 $120 $140 $160 $180 $200 Mi l l i o n s o f D o l l a r s `` Statistical Section, 7-25 2006 Comprehensive Annual Financial Report City of Renton, Washington TABLE 15 EXPENSES NET REVENUE FISCAL (a) W/O AVAILABLE FOR (b) YEAR REVENUE DEPRECIATION DEBT SERVICE PRINCIPAL INTEREST COVERAGE WATER AND SEWER REVENUE BONDS: 1997 21,337,411 14,580,175 6,757,236 1,660,000 1,474,986 2.16 1998 21,597,100 14,877,435 6,719,665 1,765,000 1,377,342 2.14 1999 21,784,310 16,407,442 5,376,868 1,810,000 1,333,452 1.71 2000 23,682,511 15,653,774 8,028,737 1,630,000 1,112,778 2.93 2001 21,994,245 16,051,720 5,942,525 1,730,000 1,019,923 2.16 2002 24,045,660 17,495,472 6,550,188 1,805,000 928,303 2.40 2003 25,934,120 16,990,519 8,943,601 1,635,000 1,282,115 3.07 2004 27,301,230 18,325,863 8,975,367 1,475,000 1,010,268 3.61 2005 27,889,360 18,892,824 8,996,536 1,630,000 1,477,124 2.90 2006 27,750,508 18,850,225 8,900,283 1,680,000 1,430,199 2.86 GOLF COURSE REVENUE BONDS (c): 1997 2,090,510 1,270,849 819,661 150,000 305,783 1.80 1998 2,109,506 1,355,669 753,837 155,000 298,658 1.66 1999 2,252,217 1,278,489 973,728 280,000 157,548 2.23 2000 2,328,044 1,320,681 1,007,363 210,000 227,222 2.30 2001 2,375,997 1,480,024 895,973 220,000 219,348 2.04 2002 2,279,361 1,415,674 863,687 225,000 210,548 1.98 2003 2,177,122 1,573,296 603,826 235,000 201,210 1.38 2004 2,198,597 1,460,445 738,152 250,000 191,223 1.67 2005 2,208,335 1,657,294 551,041 260,000 180,348 1.25 2006 2,337,672 1,725,854 611,818 270,000 168,778 1.39 Notes: (a) Revenue includes connection charges, system development charges, latecomer fees, and interest revenue. (b) Bond financing requirements are that the average annual coverage is at least 1.3 times the average annual debt service for Water and Sewer revenue bonds. The Golf System revenue bonds coverage requirement is at least 1.25 times that of respective calendar year's annual debt service. (c) 1999 Golf System Refunding Revenue Bonds were issued to refund the 1994 Golf System Revenue Bonds. Source: City of Renton, Finance & IS Department REVENUE BOND COVERAGE FOR WATER AND SEWER AND GOLF SYSTEM BONDS LAST TEN FISCAL YEARS DEBT SERVICE WATER/SEWER & GOLF COURSE REVENUE BONDS 2.86 1.39 2.16 2.402.14 1.71 2.932.16 3.07 3.61 2.90 1.66 2.30 1.80 2.23 2.04 1.98 1.38 1.67 1.25 0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 YEARS CO V E R A G E R A T I O WATER/SEWER GOLF COURSE Statistical Section, 7-26 2006 Comprehensive Annual Financial Report City of Renton, Washington PER CAPITA UN- PERSONAL PERSONAL SCHOOL EMPLOYMENT INCOME b INCOME c MEDIAN ENROLLMENT e RATE f FISCAL YEAR KING COUNTY RENTON KING COUNTY KING COUNTY AGEd CITY OF RENTON KING COUNTY 1997 1,659,106 45,920 57,707,202,000 34,253 35.00 12,266 4.1% 1998 1,686,266 46,270 65,485,103,000 38,241 35.26 12,513 4.0% 1999 1,712,122 47,620 72,997,198,000 42,218 35.50 12,557 3.8% 2000 1,737,046 50,052 77,271,598,000 44,438 35.70 12,527 4.1% 2001 1,758,312 51,140 76,883,017,000 43,842 35.92 12,556 5.1% 2002 1,774,312 53,840 77,940,608,000 44,313 36.13 12,892 6.1% 2003 1,779,300 54,900 78,534,839,000 44,482 36.38 13,046 6.2% 2004 1,788,300 55,360 87,617,622,000 49,286 36.60 13,062 5.2% 2005 1,808,300 56,840 N/A N/A 36.83 13,192 4.7% 2006 1,835,300 58,360 N/A N/A 36.93 13,397 4.2% Sources: a Washington State Office of Financial Management b U.S. Bureau of Economic Analysis. c U.S. Bureau of Economic Analysis. d Washington State Office of Financial Management e Renton Public Schools f Washington State Employment Security Department POPULATION a TABLE 16 DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN FISCAL YEARS UNEMPLOYMENT RATE 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 UNEMPLOYMENT RATE Statistical Section, 7-27 2006 Comprehensive Annual Financial Report City of Renton, Washington EMPLOYER EMPLOYEES 1 RANK % OF TOTAL CITY EMPLOYMENT EMPLOYEES RANK % OF TOTAL CITY EMPLOYMENT The Boeing Company 11,942 1 29.38% 19,613 1 45.50% Valley Medical Center 2,346 2 5.77% 1,397 2 3.24% PACCAR Inc. 1,749 3 4.30% 1,204 3 2.79% Renton School District #403 1,353 4 3.33% 655 5 1.52% Federal Aviation Administration 860 5 2.12% 1,127 4 2.61% City of Renton 620 6 1.53% 639 6 1.48% ER Solutions, Inc. 428 7 1.05% Young's - Columbia of Washington, LLC 402 8 0.99% Wal-Mart 378 9 0.93% 274 10 0.64% IKEA 361 10 0.89% Multiple Zones International Inc.610 7 1.42% Wizards of the Coast 419 8 0.97% Kay Smith Business 276 9 0.64% 20,439 50.28% 26,214 60.81% Source: 1Business license records and individual queries Note: The table does not include non-profit organizations. The 2006 FTE count for the City of Renton does not include temporary employees. PRINCIPAL EMPLOYERS TABLE 17 2006 1997 Statistical Section, 7-28 2006 Comprehensive Annual Financial Report City of Renton, Washington Statistical Section, 7-29 This page is intentionally left blank. 2006 Comprehensive Annual Financial Report City of Renton, Washington 1997 1998 1999 2000 2001 FUNCTION General Government 81.6 82.6 85.1 90.1 93.5 Public Safety Police Commissioned Officers 86.0 86.0 85.0 85.0 86.0 Non-Commissioned Officers 31.2 31.2 34.2 34.2 36.2 Fire Commissioned Officers 97.0 100.0 103.0 105.0 105.0 Non-Commissioned Officers 10.0 10.0 10.0 11.0 11.0 Planning/Building/Public Works Administration/Development Services 37.5 42.2 43.2 42.7 42.7 Transportation Systems 32.0 31.0 32.0 33.0 33.0 Utility Systems 18.9 22.2 20.2 20.7 20.8 Maintenance Services 58.0 58.0 59.5 59.5 61.0 Culture and Recreation Parks and Recreation 77.2 77.5 77.5 78.5 80.5 Library 15.0 15.0 15.0 15.0 15.0 Golf Course 9.0 9.0 9.0 9.0 10.0 Total 553.4 564.7 573.7 583.7 594.7 Source: City of Renton, Finance & IS Department LAST TEN FISCAL YEARS Page 1 of 2 TABLE 18 FULL TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION FISCAL YEAR Statistical Section, 7-30 2006 Comprehensive Annual Financial Report City of Renton, Washington 2002 2003 2004 2005 2006 FUNCTION General Government 97.5 96.5 97.5 94.5 89.5 Public Safety Police Commissioned Officers 88.0 88.0 89.0 91.0 97.0 Non-Commissioned Officers 40.2 40.2 41.2 43.2 42.2 Fire Commissioned Officers 105.0 105.0 106.0 106.0 106.0 Non-Commissioned Officers 12.0 12.0 13.0 13.0 14.0 Planning/Building/Public Works Administration/Development Services 42.7 42.7 42.7 42.5 46.5 Transportation Systems 34.0 33.0 34.5 34.5 35.5 Utility Systems 20.8 20.8 20.8 20.8 24.8 Maintenance Services 61.0 62.0 62.0 62.0 64.1 Culture and Recreation Parks and Recreation 77.5 77.5 77.5 76.5 76.5 Library 15.0 15.0 15.0 14.0 14.0 Golf Course 10.0 10.0 10.0 10.0 10.0 Total 603.7 602.7 609.2 608.0 620.0 LAST TEN FISCAL YEARS Page 2 of 2 TABLE 18 FULL TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION FISCAL YEAR Statistical Section, 7-31 2006 Comprehensive Annual Financial Report City of Renton, Washington 1997 1998 1999 2000 2001 FUNCTION Police Physical arrests 1,939 1,860 2,287 2,463 3,411 Parking violations 5,170 4,240 3,379 5,955 6,325 Traffic violations 11,300 12,248 11,832 12,188 10,936 Fire Number of calls answered 7,210 7,808 7,698 7,895 8,273 Inspections 1,856 1,880 2,021 2,265 2,269 Highways and Streets Street resurfacing (miles) 4.56 1.15 4.65 1.76 6.54 Recyclables collected (tons/yr) 4,613.1 4,855.6 5,045.7 5,493.8 5,793.6 Culture and Recreation Athletic field attendence 82,739 82,879 86,527 87,000 119,422 Community Center admissions 183,627 154,327 148,041 156,500 174,500 Library Volume in collections 163,298 144,685 153,935 147,818 148,758 Total volumes borrowed 313,407 310,996 334,619 352,334 382,443 Water Metered connection 13,212 13,595 14,279 14,224 13,969 Average daily consumption 7,159 7,554 7,426.5 7,457 7,097 (thousands of gallons) Peak daily consumption 13,841 15,177 11,472 13,590 11,960 (thousands of gallons) Source: City of Renton Departments FISCAL YEAR TABLE 19 OPERATING INDICATORS BY FUNCTION LAST TEN FISCAL YEARS Page 1 of 2 Statistical Section, 7-32 2006 Comprehensive Annual Financial Report City of Renton, Washington 2002 2003 2004 2005 2006 FUNCTION Police Physical arrests 3,813 3,735 4,280 4,590 2,489 Parking violations 4,776 2,742 3,733 3,575 3,520 Traffic violations 11,448 11,651 10,963 12,866 10,172 Fire Number of calls answered 8,233 8,582 8,984 9,202 10,096 Inspections 2,261 2,681 2,539 3,438 3,505 Highways and Streets Street resurfacing (miles) 6.13 4.85 3.67 3.69 3.86 Recyclables collected (tons/yr) 5,119.8 4,389.0 4,920.3 4,934.2 4,843 Culture and Recreation Athletic field participants 126,534 137,811 156,707 155,000 155,000 Community Center participants 162,970 172,911 172,537 177,761 177,761 Library Volume in collections 155,463 158,676 165,406 190,011 193,965 Total volumes borrowed 456,982 499,792 512,059 491,470 464,333 Water Metered connection 14,583 15,181 15,379 16,585 16,668 Average daily consumption 7,232 7,581 7,635 7,306 7,999 (thousands of gallons) Peak daily consumption 12,477 14,080 14,248 13,025 15,271 (thousands of gallons) FISCAL YEAR TABLE 19 OPERATING INDICATORS BY FUNCTION LAST TEN FISCAL YEARS Page 2 of 2 Statistical Section, 7-33 2006 Comprehensive Annual Financial Report City of Renton, Washington 1997 1998 1999 2000 2001 FUNCTION Police safety Police: Stations 1.0 1.0 1.0 1.0 1.0 Patrol units 6.0 6.0 7.0 7.0 7.0 Fire stations 5.0 5.0 5.0 5.0 5.0 Highways and streets Street (miles) 190.1 190.1 180.6 195.4 195.6 Streetlights (added) 94.0 24.0 46.0 69.0 75.0 Culture and recreation Parks acreage 1,158.0 1,158.0 1,158.0 1,158.0 1,158.0 Parks 25.0 27.0 28.0 28.0 26.0 Swimming pools - - - - - Tennis courts 17.0 17.0 17.0 17.0 17.0 Community centers 1.0 1.0 1.0 1.0 1.0 Water Water mains (miles) 243.9 248.6 252.2 278.0 283 Fire hydrants 2,763 2,839 2,893 2,993 3,102 Sewer Sanitary sewers (miles) 167.4 169.1 170.9 162.6 168.1 Storm sewers (miles) 173.0 177.9 180.9 183.8 189.7 Source: City of Renton Departments FISCAL YEAR TABLE 20 CAPITAL ASSETS STATISTICS BY FUNCTION LAST TEN FISCAL YEARS Page 1 of 2 Statistical Section, 7-34 2006 Comprehensive Annual Financial Report City of Renton, Washington 2002 2003 2004 2005 2006 FUNCTION Police safety Police: Stations 1.0 1.0 1.0 1.0 1.0 Patrol units 7.0 7.0 7.0 7.0 7.0 Fire stations 5.0 5.0 5.0 5.0 5.0 Highways and streets Street (miles) 213.2 213.7 213.7 218.0 224.6 Streetlights 53.0 120.0 92.0 86.0 134.0 Culture and recreation Parks acreage 1,158.0 1,158.0 1,158.0 1,158.0 1,160.0 Parks 26.0 26.0 26.0 26.0 26.0 Swimming pools - - 1.0 1.0 1.0 Tennis courts 17.0 17.0 17.0 17.0 17.0 Community centers 1.0 1.0 1.0 1.0 1.0 Water Water mains (miles) 289.0 291.0 291.1 293.0 295.0 Fire hydrants 3,193 3,240 3,274 3,374 3,440 Sewer Sanitary sewers (miles) 176.7 183.5 189.6 193.3 204.9 Storm sewers (miles) 199.4 204.0 209.7 214.8 219.7 Page 2 of 2 FISCAL YEAR TABLE 20 CAPITAL ASSETS STATISTICS BY FUNCTION LAST TEN FISCAL YEARS Statistical Section, 7-35 2006 Comprehensive Annual Financial Report City of Renton, Washington Statistical Section, 7-36 This page is intentionally left blank.