City of Bonney Lake Statement of Net Assets December 31, Governmental Activities

Transcription

1 City of Bonney Lake Statement of Net Assets December 31, 2011 Primary Government Governmental Activities Business-type Activities ASSETS Cash and cash equivalents $ 18,652,693 $ 22,680,890 $ 41,333,583 Receivables (net) 2,391, ,343 2,605,772 Due from other governments 2,444,742-2,444,742 Internal balances (5,474,634) 5,474,634 - Inventories - 404, ,022 Prepaid items 19,543 4,180 23,723 Restricted assets: Cash and cash equivalents (146,748) 508, ,415 Capital Assets: Non-depreciable 20,828,391 4,154,502 24,982,893 Depreciable (net) 26,522,203 82,356, ,878,414 assets 65,237, ,796, ,034,564 LIABILITIES Accounts payable and accrued expenses 1,346, ,531 2,255,741 Deposits 804, ,664 1,407,090 Accrued interest 452, , ,647 Deferred revenue 314, ,492 Noncurrent liabilities: Due in one year 455,453 2,619,921 3,075,374 Due in more than one year 10,841,019 25,456,009 36,297,028 liabilities 14,214,380 30,072,992 44,287,372 NET ASSETS Invested in capital assets, net of related debt 37,177,998 60,128,765 97,306,763 Restricted for: Debt service 167, ,001 1,165,655 Unrestricted 13,677,587 24,597,187 38,274,774 net assets $ 51,023,239 $ 85,723,953 $ 136,747,192 The notes are an integral part of the financial statements. Stmt Net Assets 6/12/2013 1:21 PM

2 City of Bonney Lake Statement of Activities For the Year Ended December 31, 2011 Program Revenues Net (Expense) Revenue and Changes in Net Assets Functions/Programs Expenses Charges for Services Operating Grants and Contributions Capital Grants and Contributions Governmental Activities Businesstype Activities Governmental Activities: General government $ 4,339,246 $ 598,800 $ 640, ,299 $ (2,811,409) $ - $ (2,811,409) Public safety 5,692, , ,870 28,371 (4,807,307) - (4,807,307) Physical environment 255,519 16,387 81,950 - (157,182) - (157,182) Transportation 1,673, ,996-1,627, , ,873 Health and human services 23, , , ,040 Economic environment 1,822, , (1,617,759) - (1,617,759) Culture and recreation 438,494 50, (387,596) - (387,596) Interest on long term debt 423, (423,955) - (423,955) governmental activities 14,669,094 2,148, ,558 1,944,019 (9,740,295) - (9,740,295) Business-type Activities: Water 5,216,775 8,835, ,734-3,923,150 3,923,150 Sewer 4,371,716 3,947, (424,585) (424,585) Stormwater 941,002 1,579,107 31, , ,899 business-type activities 10,529,493 14,361,429 31, ,734-4,168,464 4,168,464 government $ 25,198,587 $ 16,509,651 $ 868,352 $ 2,248,753 (9,740,295) 4,168,464 (5,571,831) General Revenues: Taxes: Property taxes 2,858,536-2,858,536 Sales taxes 3,388,997-3,388,997 B&O taxes 1,895,541-1,895,541 Excise taxes 815, ,055 Utility 881, ,626 Other taxes 69,725-69,725 Investment earnings 93,451 3,457 96,908 Miscellaneous revenues 34,385 32,983 67,368 Transfers 2,600,000 (2,600,000) - general revenues and transfers 12,637,316 (2,563,560) 10,073,756 Change in net assets 2,897,021 1,604,904 4,501,925 Net assets, beginning of year 48,442,719 84,527, ,970,446 Prior period adjustments (316,501) (408,678) (725,179) Net assets, end of year $ 51,023,239 $ 85,723,953 $ 136,747,192 The notes are an integral part of the financial statements. Stmt Activities 6/12/2013 1:22 PM

3 City of Bonney Lake Balance Sheet Governmental Funds December 31, 2011 GENERAL FUND STREET CONSTRUCTION FUND GENERAL GOVT CONSTRUCTION CIVIC CENTER CONSTRUCTION FUND OTHER GOVERNMENTAL FUNDS TOTAL GOVERNMENTAL FUNDS ASSETS Cash and cash equivalents $ 1,184,369 $ 4,262,452 $ 6,216,313 $ 15,569 $ 3,695,470 $ 15,374,173 Receivables (net) 988, ,319 9, ,128 1,800,105 Due from other governmental units 747,497 1,679, ,427,120 Prepaid items 20,143 (600) ,543 Restricted assets: Cash and cash equivalents (146,748) (146,748) assets 2,793,940 6,589,794 6,226,292 15,569 3,848,598 19,474,193 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable 726, ,869 1,427 17, ,463,880 Due to other governments 8, (2,402) (1,405) 4,217 Deposits payable 776,119 (200) ,919 Interfund loan payable , ,583 Deferred revenues 196, , ,172 Other liabilities (236,631) 48, ,604 (145,607) liabilities 1,470,809 1,006,149 2,152 15, ,485 3,337,164 Fund balances: Unassigned reported in: General fund 1,323, ,323,430 Special Revenue funds ,113,950 1,113,950 Debt Service funds ,059 27,059 Capital Projects funds - 5,583,645 6,223,842-1,865,104 13,672,591 fund balances 1,323,430 5,583,645 6,223,842-3,006,113 16,137,030 liabilities and fund balances $ 2,794,239 $ 6,589,794 $ 6,225,994 $ 15,569 $ 3,848,598 $ 19,474,194 The notes are an integral part of the financial statements. Bal Sheet -Gov Funds 6/12/2013 1:24 PM

4 City of Bonney Lake Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds Year Ended December 31, 2011 GENERAL FUND STREET CONSTRUCTION FUND GENERAL GOVT CONSTRUCTION CIVIC CENTER CONSTRUCTION FUND OTHER GOVERNMENTAL FUNDS TOTAL GOVERNMENTAL FUNDS REVENUES Taxes Property $ 2,523,498 $ - $ - $ - $ 357,850 $ 2,881,348 Sales 3,388, ,388,997 B&O 1,895, ,895,541 Excise - 182,679 54, , ,092 Special assessments - 4, ,441 Other 951, ,352 Licenses and permits 430, ,146 Intergovernmental 622,119 1,985, ,636 2,974,872 Charges for goods and services 1,513, , ,838,774 Fines and forfeitures 620, , ,065 Miscellaneous: Interest 79,926 13, ,451 Other 244, ,563 revenues 12,270,320 2,510,758 54, ,325 15,716,642 EXPENDITURES Current: General government 3,398, ,398,825 Public safety 4,664,015-70,518-2,766 4,737,299 Utilities and environment 645, ,809 Transportation 1,430, , ,604,422 Economic environment 1,814, ,814,932 Culture and recreation 349, ,545 Health and human services 3, ,103 6,241 Capital outlay 73,150 1,736,650 1,303, ,294 30,189 3,266,626 Debt service: Principal retirement 282, , , ,662 1,025,196 Interest 259,026 1, ,176-24, ,071 expenditures 12,921,191 2,165,623 1,704, , ,321 17,331,966 Excess (deficiency) of revenues over expenditures (650,871) 345,135 (1,650,298) (123,294) 464,004 (1,615,324) OTHER FINANCING SOURCES (USES) Developer contributions - 288, ,299 Other capital contributions 96, ,140 Transfers in - 400,000 3,100, ,293 1,000,000 4,623,293 Transfers out (2,650,000) - (123,293) - - (2,773,293) other financing sources and uses (2,553,860) 688,299 2,976, ,293 1,000,000 2,234,439 Net Change in fund balances (3,204,731) 1,033,434 1,326,409 (1) 1,464, ,115 - Fund balances, beginning of year $ 4,742,993 $ 4,608,981 $ 4,897,731 $ 1 1,584,711 $ 15,834,417 Prior period adjustment (215,129) (58,770) - - (42,602) (316,501) Fund balances, end of year $ 1,323,133 $ 5,583,645 $ 6,224,140 $ - $ 3,006,113 $ 16,137,031 The notes are an integral part of the financial statements. Stmt Rev, Exp, Chngs in FB 6/12/20131:28 PM

5 City of Bonney Lake Reconciliation of Governmental Fund Balances To Net Assets of Governmental Activities December 31, 2011 Governmental Fund Balances $ 16,137,030 Amounts reported for governmental activities in the statement of net assets are different because: Receivables for fines and forfeitures and the related allowance for uncollectible accounts are not current financial resources and, therefore not reported in the funds. - Internal balances (4,674,052) Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds. - Long-term liabilities applicable to the City's activities are not due and payable in the current period and are not reported as fund liabilities: Debt and notes payable - Compensated absences - Other post employment benefits payable - Interest payable - Deferred revenue 123,680 Internal service funds are used by management to charge the costs of insurance and information services to individual funds. assets and liabilities of the internal service funds that are reported with governmental activities, net of amounts reported above. - Net assets of governmental activities $ 11,586,658 The notes to the financial statements are an integral part of this statement. Recon To Net Assets 6/12/2013 1:26 PM

6 City of Bonney Lake Statement of Net Assets Proprietary Funds December 31, 2011 Business-type Activities - Enterprise Funds ASSETS Current assets: Water Sewer Stormwater Proprietary Funds Gov. Activities Internal Service Funds Cash and cash equivalents $ 14,861,347 $ 6,981,382 $ 838,161 $ 22,680,890 $ 3,278,519 Receivables (net of allowance for uncollectible accounts) 43, ,853 31, , Due from other governmental units ,622 Prepaid expenses ,734 4,180 - Deposits Interfund loan receivable - current - 200, ,145 - Inventories 80, , ,022 - Restricted assets: Cash and cash equivalents 55, , ,560 - current assets: 15,040,838 8,096, ,951 24,011,743 3,296,161 Noncurrent assets: Interfund loan receivable - 600, ,436 - Capital assets: Land 1,317, ,397-1,675,672 - Construction in progress 1,882, ,295 72,789 2,478,830 - Buildings 2,843,653 3,210,849 9,683 6,064,185 - Leasehold improvements - 19,422,000-19,422,000 - Improvements other than buildings 47,694,575 4,801,412 7,621,712 60,117,699 - Machinery and equipment 49, ,364 3, ,590 5,484,581 Intangible asset 9,244,346 15,665, ,297 25,046,675 - Accumulated depreciation (14,656,890) (12,490,724) (2,014,322) (29,161,936) (2,991,197) noncurrent assets: 48,375,652 32,905,061 5,830,438 87,111,151 2,493,384 assets 63,416,490 41,002,015 6,704, ,122,894 5,789,545 LIABILITIES AND FUND BALANCES Current liabilities: Accounts payable and accrued expenses 400, ,204 71,996 1,409,326 52,233 Due to other governmants Deposits (290,931) 380, ,665 - Accrued interest 397,827 87, ,867 - Current portion of long-term debt 1,800, ,911-2,619,921 - Other liabilities 14,460 (8,671) 7,215 13,004 - current liabilities: 2,321,507 2,215,728 79,746 4,616,981 52,233 Non current liabilities: Compensated absences 56,060 46, ,222 2,973 Revenue bonds payable 2,626, ,614-3,203,367 - Public Works Trust Fund payable 11,572,621 9,191,416-20,764,037 - Contract payable for purchase of water rights 1,386, ,386,384 - Non current liabilities: 15,641,818 9,814,192-25,456,010 2,973 liabilities 17,963,325 12,029,920 79,746 30,072,991 55,206 NET ASSETS Invested in capital assets, net of related debt 31,987,885 22,317,120 5,830,438 60,135,443 2,493,384 Restricted for debt service 998, ,001 - Unrestricted 12,467,279 6,654, ,205 19,916,459 3,240,955 net assets $ 45,453,165 $ 28,972,095 $ 6,624,643 $ 81,049,903 $ 5,734,339 Reconciliation to government-wide statement of net assets: Adjustment to reflect consolidations of internal service funds' activities related to enterprise funds 4,674,050 Net assets of business-type activities $ 85,723,953 The notes are an integral part of the financial statements. Stmt Net Assets Proprietary 6/12/2013 1:32 PM

7 City of Bonney Lake Statement of Revenues, Expenses, and Changes in Fund Net Assets Proprietary Funds For the Year Ended December 31, 2011 Business-type Activities - Enterprise Funds Water Sewer Stormwater Proprietary Funds Gov. Activities Internal Service Funds Operating revenues: Charges for goods and services $ 6,087,269 $ 3,459,427 $ 1,547,674 $ 11,094,370 $ 1,503,619 operating revenues 6,087,269 3,459,427 1,547,674 11,094,370 1,503,619 Operating expenses: Cost of sales and services 2,869,831 2,663, ,289 6,246, ,713 Administration 679, , ,591 1,329,808 87,346 Insurance ,938 External and interfund taxes 836, , ,978 1,329,993 - Depreciation 1,503,785 1,309, ,379 2,989, ,746 operating expenses 5,889,650 4,799,181 1,207,237 11,896,068 1,518,743 Operating income (loss) 197,619 (1,339,754) 340,437 (801,698) (15,124) Nonoperating revenues (expenses): Investment earnings - 3,458-3,458 (904) Miscellaneous revenue 34, ,052 32,118 Interest and other debt service cost (249,129) (83,809) - (332,938) - non operating revenue (215,077) (80,351) - (295,428) 31,214 Income (loss) before contributions and transfers (17,458) (1,420,105) 340,437 (1,097,126) 16,090 System development fees 2,746, ,704 31,431 3,265,987 - Capital contributions 304, ,734 - Grants ,794 31,794 - Transfers in ,000 Transfers out (1,500,000) (1,000,000) (100,000) (2,600,000) - Change in net assets 1,534,128 (1,932,401) 303,662 (94,611) 766,090 Net assets at beginning of year 44,066,577 31,164,186 6,322,429 81,553,192 4,968,249 Prior period adjustments (147,540) (259,690) (1,448) (408,678) - Net assets at end of year $ 45,453,165 $ 28,972,095 $ 6,624,643 81,049,903 $ 5,734,339 Reconciliation to government-wide statement of net assets: Adjustment to reflect consolidations of internal service funds activities related to enterprise funds Change in net assets of business-type activities 1,699,515 $ 1,604,904 The notes are an integral part of the financial statements. Stmt Activities - Proprietary 6/12/2013 1:33 PM

8 City of Bonney Lake Statement of Cash Flows Proprietary Funds For the Year Ended December 31, 2011 Business-type Activities - Enterprise Funds WATER SEWER STORM TOTAL Gov. Activities Internal Service Funds Cash flows from operating activities: Receipts from customers and users $ 6,107, $ 3,459, $ 1,525, $ 11,092, $ 1,488,028 Payments for external and interfund taxes (836,141) (343,874) (149,978) (1,329,993) (1,069) Payments to employees (1,593,024) (1,085,971) (566,510) (3,245,505) (204,944) Payments for goods and services (1,743,671) (1,869,890) (269,677) (3,883,238) (956,075) Net cash provided by operating activities 1,934, , ,876 2,633, ,940 Cash flows from noncapital financing activities: Grants and contributions ,794 31,794 - Interfund loans - 200, ,145 - Payments from other governments Transfers from other funds ,000 Transfers to other funds (1,500,000) (1,000,000) (100,000) (2,600,000) - Nonoperating system development fees 2,746, ,704 31,432 3,265,988 - Nonoperating miscellaneous revenue 34, ,053 32,118 Net cash (used) by noncapital financing 1,280,905 (312,151) (36,774) 931, ,118 Cash flows from capital and related financing activities: Debt proceeds 1,338,000 1,162,000-2,500,000 - Debt principal payments (1,699,425) (815,107) - (2,514,532) - Interest paid on debt (244,502) (95,024) - (339,526) - Insurance recoveries (904) Payment for capital acquisitions (2,081,147) (1,848,080) (72,790) (4,002,017) (229,687) Net cash (used) by capital and related financing activities (2,687,074) (1,596,211) (72,790) (4,356,075) (230,591) Cash flows from investing activities: Interest income - 3,457-3,457 - Net cash provided by investing activities - 3,457-3,457 - Net Increase (decrease) in cash and cash equivalents 528,589 (1,745,058) 429,312 (787,157) 877,467 Cash and cash equivalents, beginning of year 14,536,128 9,437, ,296 24,384,284 2,401,052 Prior period adjustment (147,540) (259,690) (1,448) (408,678) - Cash and cash equivalents, end of the year $ 14,917,177 $ 7,433,112 $ 838,160 $ 23,188,449 $ 3,278,519 Cash and cash equivalents, unrestricted $ 14,861,347 $ 6,981,382 $ 838,160 $ 22,680,889 $ 3,278,519 Cash and cash equivalents, restricted 55, , ,560 - cash and cash equivalents $ 14,917,177 $ 7,433,112 $ 838,160 $ 23,188,449 $ 3,278,519 Reconciliation of operating income (loss) to net cash provided (used) by operating activities: Operating income (loss) $ 197,619 $ (1,339,754) $ 340,432 $ (801,703) $ (15,124) Adjustments to reconcile operating income to net cash provided (used) by operating activities: Depreciation 1,503,785 1,309, ,379 2,989, ,746 Changes in assets and liabilities: (Increase) decrease in accounts receivable (20,578) (7,354) (30,958) (58,890) (15,591) (Increase) decrease in due from other governments ,025 12,025 - (Increase) decrease in prepaids 441 (287) (3,701) (3,547) - (Increase) decrease in inventory Increase (decrease) in accounts payable 217, ,239 44, ,682 5,611 Increase (decrease) in deposits 34,866 7,796-42,662 - Increase (decrease) in compensated absences 895 (2,669) - (1,774) 298 Increase (decrease) in due to other governments (13) Net cash provided by operating activities $ 1,934,758 $ 159,847 $ 538,876 $ 2,633,481 $ 325,940 Non-cash transactions: Amortization of bond premium/discount $ (2,565) $ (563) $ - $ (3,128) $ - Amortization of debt issue costs $ 2,914 $ 640 $ - $ 3,554 $ - Capital asset donation/conveyance $ 304,734 $ - $ - $ 304,734 $ - The notes are an integral part of the financial statements. Stmt Cash Flows - Proprietary 6/12/20131:34 PM

9 CITY OF BONNEY LAKE Notes to the Financial Statements December 31, 2011 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The City of Bonney Lake reports financial activity using the revenue and expenditure classifications, statements, and schedules contained in the Cash Basis Budgeting, Accounting, and Reporting System (BARS) Manual. This basis of accounting and reporting is another comprehensive basis of accounting (OCBOA) that is prescribed by the State Auditor s Office under the authority of Washington State law, Chapter RCW. A. Reporting Entity The City of Bonney Lake, organized as a non-chartered code city, was incorporated in 1949 utilizing the Mayor/Council form of government. The City s legislative authority, the City Council, consists of a Mayor and seven Council members who are elected to overlapping four-year terms of office. The Council is responsible for assuring citizen representation through policy direction and adoption of local codes and legislation. B. Fund Accounting The accounts of the City are organized on the basis of funds, each of which is considered a separate accounting entity. Each fund is accounted for with a separate set of single-entry accounts that comprises its cash, investments, revenues and expenditures, as appropriate. The city s resources are allocated to and accounted for in individual funds depending on their intended purpose. The following are fund types used by the City: The City reports the following major governmental funds: The General Fund is the City s operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. The Street Construction Fund is used for capital purposes such as roads, streets, sidewalks and street lights. The General Government Construction Fund is used for capital purposes. The City has three proprietary funds and considers them all to be major. The Water Fund accounts for the activities of water distribution for the City. The City operates its own water distribution system. The Sewer Fund accounts for the sewer collection activities for the City. The City operates its own sewage pumping stations and collection systems, and has a capacity agreement with the City of Sumner, who operates the wastewater treatment plant. The Stormwater Fund accounts for the activities of stormwater treatment and disposal. Additionally, the City reports the following fund types: Internal Service Funds account for fleet management services and insurance provided to other departments of the government on a cost-reimbursement basis. Notes to the Financial Statements (C4) 1

10 C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation Basis of accounting refers to when revenues and expenditures are recognized in the accounts and reported in the financial statements. Beginning with the FY2011 statements, the City has elected to report on a cash basis. Prior reporting was on an accrual (GAAP) basis. Revenues are recognized only when cash is received and expenditures are recognized when paid, including those properly chargeable against the report year s budget appropriations when required by state law. In accordance with state law the City also recognized expenditures paid during twenty days after the close of the fiscal year for claims incurred during the prior period. Purchases of capital assets are expensed during the year of acquisition. There is no capitalization of capital assets, nor allocation of depreciation expense. Inventory is expensed when purchased. The basis of accounting described above represents a comprehensive basis of accounting other than accounting principles generally accepted in the United States of America. D. Budgetary Information The City of Bonney Lake s budget procedures are mandated by Chapter 35A.34 of the Revised Code of Washington. Biennial budgets are adopted for all governmental funds on a basis consistent with generally accepted accounting principles. Budgets are adopted at the level of the fund, and the budgets constitute the legal authority for expenditures at that level. For administrative purposes, the biennial budget allocates budgets separately for each year of the biennium; however, legally, the combined allocations for the biennium constitute the officially adopted budget. Appropriations lapse at biennial end. The appropriated and actual expenditures for the legally adopted budgets were as follows: Notes to the Financial Statements (C4) 2

11 BUDGET TO ACTUAL - ALL FUNDS (2011) Fund 2011/2012 Biennial 2011 Final Appropriated Amounts Actual Expenditures Variance General $ 28,453,257 $ 15,570,892 $ 12,882,365 Drug Investigation 330,698 23, ,438 Contingency GO Refunded Bond 357, ,152 (302) Streets Capital Improveemnt 6,922,540 2,165,623 4,756,917 Parks Capital Improvement 2,674, ,054 2,438,690 General Government Capital 4,630,675 1,828,128 2,802,547 Civic Center CIP - 123,294 (123,294) Water 23,045,186 9,862,247 13,182,939 Wastewater (Sewer) 22,357,426 7,255,488 15,101,938 Stormwater 2,917,802 1,203,651 1,714,151 Equipment Rental and Replacement 2,141, ,940 1,172,811 Insurance 843, , ,435 : All Funds $ 94,675,303 $ 40,030,668 $ 54,644,635 E. Assets, Liabilities and Equities 1. Cash and Cash Equivalents The City considers all highly liquid investments including restricted assets with a maturity of three months or less when purchased to be a cash equivalent. It is the City s policy to invest all temporary cash surpluses. At December 31, 2011, the treasurer was holding $43,074,758 in cash and cash equivalents. 2. Deposits The City of Bonney Lake deposits are covered by the Federal Deposit Insurance Corporation and/or the Washington Public Deposit Protection Commission. 3. Inventories Inventories in governmental funds consist of expendable supplies held for consumption. The cost is recorded as an expenditure at the time individual inventory items are purchased. 4. Capital Assets Capital assets are long-lived assets of the City of Bonney Lake and are recorded as expenditures when purchased. 5. Compensated Absences Notes to the Financial Statements (C4) 3

12 Compensated absences, such as vacation and sick leave are absences for which employees will be paid. Vacation pay may be accumulated up to a maximum of 240 hours or 30 days, and is payable upon separation or retirement. Sick leave may accumulate up to a maximum of 960 hours. After 5 years employment, 25% of accumulated sick leave up to a maximum of 720 hours is payable upon resignation or layoff. Upon retirement, or death, 100% of accumulated sick leave up to a maximum of 720 hours is payable. 6. Long-Term Obligations See Long Term Debt Note Other Financing Sources/Uses The City of Bonney Lake s Other Financing Sources/Uses consists of Transfers In and Transfers Out. 8. Risk Management The City of Bonney Lake is a member of the Washington Cities Insurance Authority (WCIA). Utilizing Chapter RCW (self-insurance regulation) and Chapter RCW (Interlocal Cooperation Act), nine cities originally formed WCIA on January 1, WCIA was created for the purpose of providing a pooling mechanism for jointly purchasing insurance, jointly self-insuring, and/or jointly contracting for risk management services. WCIA has a total of 126 Members. New members initially contract for a three-year term and thereafter automatically renew on an annual basis. A one-year withdrawal notice is required before membership can be terminated. Termination does not relieve a former member from its unresolved loss history incurred during membership. Liability coverage is written on an occurrence basis, without deductibles. Coverage includes general, automobile, police, public officials errors or omissions, stop gap, and employee benefits liability. Limits are $3 million per occurrence self insured layer, and $12 million per occurrence in the reinsured excess layer. The excess layer is insured by the purchase of reinsurance and insurance and is subject to aggregate limits. limits are $15 million per occurrence subject to aggregate sub limits in the excess layers. The Board of Directors determines the limits and terms of coverage annually. Insurance coverage for property, automobile physical damage, fidelity, inland marine, and boiler and machinery are purchased on a group basis. Various deductibles apply by type of coverage. Property insurance and auto physical damage are self-funded from the members deductible to $500,000, for all perils other than flood and earthquake, and insured above that amount by the purchase of reinsurance. In-house services include risk management consultation, loss control field services, claims and litigation administration, and loss analyses. WCIA contracts for the claims investigation consultants for personnel issues and land use problems, insurance brokerage, and lobbyist services. WCIA is fully funded by its members, who make annual assessments on a prospectively rated basis, as determined by an outside, independent actuary. The assessment covers loss, loss adjustment, and administrative expenses. As outlined in the interlocal, 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. Notes to the Financial Statements (C4) 4

13 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. In the prior three years, settlements did not exceed the City s insurance coverage. 9. Reserved Fund Balance Reserved fund balances are used primarily for customer deposits. NOTE 2 - STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY There have been no material violations of finance-related legal or contractual provisions. The City of Bonney Lake budgets on a biennial basis. The City is in the first year of the 2011/2012 Biennial Budget. There have been no expenditures exceeding legal appropriations in any of the funds of the City. NOTE 3 INVESTMENTS The City of Bonney Lake s investments are either insured, registered, or held by the City of Bonney Lake or its Agent in the City s name. The City of Bonney Lake s investments are presented at cost. Investments by type at December 31, 2011 are as follows: Investment Type City's Own Investments Investments held by Agent in City's name Cost Local Government Investment Pool 35,148,232-35,148,232 Investments $ 35,148,232 NOTE 4 PROPERTY TAXES The County Assessor-Treasurer acts as an agent to collect property taxes levied in the county for all taxing authorities. Collections are on approximately the 10 th of each month for the prior month collections. January 1 February 14 April 30 October 31 Property Tax Calendar Taxes are levied and become an enforceable lien against properties. Tax bills are mailed. First of two equal installment payments is due. Second installment is due. Notes to the Financial Statements (C4) 5

14 Property tax revenues are recognized when cash is received by the City of Bonney Lake. Delinquent taxes are considered fully collectible because a lien affixes to the property after the tax is levied. The city may levy up to $3.6 per $1,000 of assessed valuation for general governmental services, subject to two limitations: 1. Washington State (RCW ) limits the growth of regular property taxes to one percent per year unless approved by a majority of the voters at an election as provided in RCW Under this statute, local governments are free to place measures on the ballot seeking approval of property tax increases for: Specific dollar amounts, specific periods of time, which can exceed one year, and/or general or limited purposes; 2. The Washington State Constitution limits the total regular property taxes to one percent of assessed valuation or $10 per $1,000 of value. If the taxes of all districts exceed this amount, each is proportionately reduced until the total is at or below the 1 percent limit. The City levy does not include voter approved special levy for payment of debt on the Public Safety Building. Because the city belongs to the local fire district and library district, according to law the local fire district s levy and the library district s levy must be subtracted from the City s levy. Since these districts are currently levying their maximum amounts, the local levy can be no higher than $1.60 per $1,000: ($3.60 less $1.50 for the fire district less $.50 for the library district = $1.60.) Special property tax levies approved by the voters are not subject to the limitations listed above. The City s regular tax levy for the tax year 2011 was $1.265 on an assessed valuation of $1.99 billion for a total regular levy of $2,516,516. Additionally, a special levy for debt service on the Public Safety Building was $0.182 per $1,000 for a total additional levy of $359,750. The total City property tax levies for tax year 2011 was $1.447 per $1,000 of assessed value yielding $2,876,266. NOTE 5 INTERFUND LOANS AND ADVANCES Within the City, one fund may borrow from another when specifically authorized by City Council resolution. The activity and balances of interfund loans at December 31, 2011 are as follows: Balance at Balance at Beginning of Repayments/ End of Lending Fund Borrowing Fund Year New Loans Adjustments Year Sewer Fund Parks Capital Fund $ 1,000,727 $ - $ (200,145) $ 800,582 The principal purpose of this interfund loan was the purchase of the Allen Yorke Park property. Of the $800,582 due, $200,145 is due within one year. NOTE 6 LONG-TERM DEBT The accompanying Schedule of Liabilities (09) provides more detail of the outstanding debt and liability of the City of Bonney Lake and summarizes the City s debt transactions for The Notes to the Financial Statements (C4) 6

15 debt service payment for the fiscal year being reported and future payment requirements, including interest, are as follows: Annual Requirements to Retire Debt Obligations The annual aggregate maturities for each debt type for the years subsequent to December 31, 2011 are as follows: General Obligation Bonds Governmental Activities Business-Type Activities Year Principal Interest Requirements Principal Interest Requirements , , , , , , , , , , , , , , , ,815,000 1,485,000 3,300, ,255,000 1,043,000 3,298, ,780, ,355 3,295, ,000 27, , $ 8,960,000 $ 4,891,888 $ 13,851,888 $ - $ - $ - Revenue Bonds Governmental Activities Business-Type Activities Year Principal Interest Requirements Principal Interest Requirements , , , , , , , , , ,000 91, , ,000 72, , ,335, ,053 1,440,053 $ - $ - $ - $ 3,565,000 $ 647,953 $ 4,212,953 Notes to the Financial Statements (C4) 7

16 Public Works Trust Fund Loans Governmental Activities Business-Type Activities Year Principal Interest Requirements Principal Interest Requirements ,657, ,909 1,801, ,657, ,768 1,788, ,657, ,626 1,775, ,657, ,485 1,761, ,657,405 91,343 1,748, ,404, ,179 6,689, ,428,236 85,646 4,513, ,573 6, ,177 $ - $ - $ - $ 20,000,149 $ 965,562 $ 20,965,711 Other Debt Governmental Activities Business-Type Activities Year Principal Interest Requirements Principal Interest Requirements ,268 56, , , , , ,270 48, , ,128 81, , ,639 40, , ,128 54, , ,392 31, , ,128 27, , ,547 22, , ,911 15, , $ 1,286,027 $ 213,510 $ 1,499,537 $ 1,848,511 $ 271,685 $ 2,120,196 Notes to the Financial Statements (C4) 8

17 NOTE 7 POST EMPLOYMENT BENEFITS Substantially all City of Bonney Lake 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. Actuarial information is on a system-wide basis and is not considered pertinent to the City of Bonney Lake s financial statement. Contributions to the system by both employee and employer are based upon gross wages covered by plan benefit. Historical trend or other information regarding each plan is presented in the Washington State Department of Retirement Systems annual financial report. A copy of this report may be obtained by writing to: Department of Retirement Systems Communications Unit PO Box Olympia, WA NOTE 8 OTHER DISCLOSURES A. Contingencies and Commitments In September 2008, the City received a claim for damages arising from a marine vessel accident occurring in This matter is still outstanding at 12/31/2011, with no action occurring in Although the outcome of this claim is not presently determinable, in the opinion of the City s management, the resolution of this matter will not have a material adverse effect on the financial condition of the government. The City participates in a number of federal and state assisted programs. These grants are subject to audit by the grantors or their representatives. Such audits could result in requests for reimbursement to grantor agencies for expenditures disallowed under the terms of the grants. City management believes that such disallowances, if any, will be immaterial. During fiscal year 2011 the City booked a Prior Period Adjustment applicable to fiscal year The adjustment was detected during our 2010 audit engagement for over-reporting cash balances in financial statements for all funds in the amount of $725,182. B. Subsequent Events There are no subsequent events at the time of financial statement preparation. C. Other Post Employment Benefits As required by the Revised Code of Washington (RCW) Chapter41.26 the City has a commitment to provides lifetime medical care for members of the Law Enforcement Officers and Firefighters (LEOFF) retirement system hired before October 1, 1977, under a defined benefit plan administered by the City. This plan is commonly referred to as LEOFF 1 and includes coverage for medical, vision, nursing care, etc. The City provides LEOFF 1 post employment benefits for one retired law enforcement employee. The city s funding policy is based upon pay-as-you-go financing requirement and retirees in this category are not required to contribute any portion of the cost Notes to the Financial Statements (C4) 9

18 coverage. For the City s one member, the city purchased health insurance from the Untied Benefit Trust. The retired law enforcement employee received a benefit contribution of $634 per month or $7,608 per year for the retiree only coverage. Notes to the Financial Statements (C4) 10