2012 Comprehensive Annual Financial Report - the City of Tukwila

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CITY OF TUKWILA: 2012 CAFRLETTER OF TRANSMITTALmeasured by the financial activity of the City’s various funds. All disclosures necessary toenable the reader to gain the maximum understanding of the City’s financial activity have beenincluded. The report has been prepared in conformance with GAAP and in conformance withfinancial reporting standards issued by the Governmental Accounting Standards Board (GASB).City management has developed and evaluated a comprehensive internal control structure thatis designed to provide reasonable, but not absolute, assurance regarding the safeguarding ofassets against loss from unauthorized use or disposition, and the reliability of financial recordsfor preparing financial statements and maintaining accountability for assets. The concept ofreasonable assurance is based on the assumption that the cost of internal controls should notexceed the benefits expected to be derived. As management, we attest that, to the best of ourknowledge and belief, this financial report is complete and reliable in all material aspects.As a recipient of federal, state and county financial assistance the City is required to undergo anannual single audit in conformity with the provisions of the Single Audit Act amendments of1996 and U.S. Office of Management and Budget Circular A-133, Audits of States, LocalGovernments, and Non-profit Organizations. The audit is conducted by the State Auditor’sOffice in conjunction with the City’s annual independent audit. Information related to this singleaudit includes the Schedule of Expenditures of Federal Awards, findings and recommendations,if applicable, and auditor’s reports on internal control and compliance with applicable laws,regulations, contracts and agreements. The results of the City’s annual single audit for thefiscal year ended December 31, 2012 provided no instances of material weaknesses in theinternal control structure or significant violations of applicable laws.B. REPORTING ENTITYThe City of Tukwila is a non-charter optional code City, operating under Section 35A of theRevised Code of Washington. It has a strong Mayor form of government with a seven-memberCity Council elected by the voters of the City. Councilmembers are elected at large rather thanby district, are responsible for establishing the general guidelines and policies for the City, andeach serves a four-year term. The Mayor appoints the City Administrator as the City’s chiefadministrative officer responsible for carrying out the policies and direction set by the Mayor andCity Council.The City of Tukwila provides a full range of local government services. These services includepolice and fire protection, emergency medical services, construction and maintenance of streetsand traditional municipal infrastructure, planning and zoning, park and recreational activities,and cultural events. In addition, the City operates an equipment maintenance/rental fund. TheCity operates its own municipal 18-hole golf course. The City provides sewer, water, andsurface water services. The City has a municipal court for traffic infractions, misdemeanors, andgross misdemeanors. Other jurisdictions provide jail services to the City. Tukwila residentsreceive library services from the King County Library System.Incorporated in 1908, the City of Tukwila abuts the City of Seattle on the north and is one mileeast of Seattle-Tacoma International Airport. Tukwila has a small residential population of19,486; however, the daytime shopper/visitor and working population can reach over 150,000during the holiday shopping season.4
CITY OF TUKWILA: 2012 CAFRLETTER OF TRANSMITTALII.ECONOMIC CONDITIONA. SUMMARY OF LOCAL ECONOMYA diverse regional economy is led by The Boeing Company and other smaller manufacturingcompanies. The Puget Sound region is a major international trade gateway to the Far East.Also, high tech industries such as Microsoft have made their home in this region. This diversityhas now become the strength of our economic well being.Tukwila enjoys a strong position in the Puget Sound region as well as the State of Washington.Tukwila’s location at the crossroads of the State’s most significant freeway network (the I-5 andI-405 interchange) and planned multi-modal transit center and commuter light rail reinforces thewell-established advantages of Tukwila as a business location. These major transportationsystems and strategic access to Seattle, Tacoma, Sea-Tac Airport and the population base ofthe south Puget Sound region provide a natural setting for commercial and industrial activity.Tukwila enjoys one of the largest sales tax bases in the State of Washington, with over $15million in revenue for 2012. The total combined retail sales activity amounted to approximately$1.79 billion in 2012, representing a slight decrease in sales tax revenue and retail activitywithin Tukwila, as compared to last year. Although the manufacturing sector was up 54%, bothconstruction and transportation and warehousing activity were down 31 percent and 20 percentrespectively. The strength of the City’s retail sales activity is the Westfield SouthcenterShopping Center and Parkway Plaza retail development, which combine to create one of thelargest retail concentrations on the west coast. This strength has attracted new retailestablishments to locate in Tukwila.This diversified revenue base is further supported by an assessed valuation of $4.6 billion aswell as our above-mentioned sales tax base, and has allowed the City to pursue a long-termcapital investment program.The City experienced modest growth in overall development activities but a slight decline indevelopment value. Permitting activity increased from 2,020 permits issued in 2011 for a totalvalue of $92.4 million to 2,056 permits issued in 2012 for a total value of $52.4 million.B. FUTURE ECONOMIC OUTLOOKTukwila is in a continuous process of both short-term and long-term financial planning. Shorttermfinancial planning is inherent in the development of the City’s biennial budget. Concurrentwith the biennial budget is the City’s long-term capital needs and potential funding is assessedwith the development of the six-year capital facility plan. The capital facility plan is a componentof the Comprehensive Master Plan, which outlines how the City should look and function intwenty years and creates a vision that can be realistically implemented. An integral part of thisvision is determining how to allocate the City’s financial resources to achieve the desired goals.5
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2012 Comprehensive Annual Financial Report - the City of Tukwila

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