2012 Comprehensive Annual Financial Report - the City of Tukwila
2012 Comprehensive Annual Financial Report - the City of Tukwila 2012 Comprehensive Annual Financial Report - the City of Tukwila
CITY OF TUKWILA: 2012 CAFRNOTES TO THE FINANCIAL STATEMENTSFund Balance/Net PositionFund balance represents the difference between the current assets and current liabilities. The Cityrestricts those portions of fund balance which are legally segregated for a specific future use or whichdo not represent available, spendable resources and therefore are not available for generalappropriation or expenditure.Net position represents the difference between assets and liabilities. Net position invested in capitalassets, net of related debt, consists of capital assets, net of accumulated depreciation, reduced by theoutstanding balances of any borrowing used (i.e., the amount that the City has not spent) for theacquisition, construction or improvement of those assets. Net position is reported as restricted whenthere are limitations imposed on their use either through the enabling legislation adopted by the City orthrough external restrictions imposed by creditors, grantors or laws or regulations of other governments.The remaining balance is reported as unrestricted.The City applies restricted resources first when an expense is incurred for purposes of which bothrestricted and unrestricted net position is available. This is followed by committed resources, thenassigned, and lastly unassigned resources.In 2011, the 2003 Limited General Obligation Bond debt obtained to finance the construction of the golfcourse clubhouse was transferred from the Foster Golf Course fund to a governmental debt servicefund. This amount is excluded from the net investment in capital assets for the governmental activities.It is included in the total for the net investment in capital assets calculation for the primary government.In 2012, the City revised the Reserve Policy which addresses the various types of the City’s operatingand restricted use funds. The objectives of this Policy are to establish, attain, and restore minimumfund balances, including self-insurance health care reserve funds, and specified review and reporting offund balances.At the close of each fiscal year, the General Fund balance and the Reserve Fund balance shall eachequal or exceed 10% of the previous year General Fund revenue, exclusive of significant nonoperating,non-recurring revenues such as real estate sales or transfers in from other funds.Enterprise funds, at the close of each fiscal year, the unrestricted fund balance shall equal or exceed20% of the previous year revenue, exclusive of non-operating, non-recurring revenues such as realestate sales, transfers in from other funds or debt proceeds.The City shall maintain a reserve balance in each of its self-insured health care funds an amount equalto 2.5 times or 250%, of the actuarially determined IBNR (incurred but not reported) reserve. Thecontingency reserve balance will be combined with the IBNR reserve balance and recorded as oneliability in each of the self-insured health care plan funds.Fund Balance ComponentsThe fund balance amounts for governmental funds have been classified in accordance with GASBStatement No. 54 and are reported as nonspendable, restricted, committed, assigned or unassigned.Nonspendable fund balance includes items that cannot be spent. This includes activity that isnot in a spendable form (inventories, prepaid amounts, long-term portion of loans/notesreceivable, or property held for resale unless the proceeds are restricted, committed orassigned) and activity that is legally or contractually required to remain intact, such as aprincipal balance in a permanent fund.Restricted fund balances have constraints placed upon the use of the resources either by anexternal party or imposed by law through a constitutional provision or enabling legislation.60
CITY OF TUKWILA: 2012 CAFRNOTES TO THE FINANCIAL STATEMENTSCommitted fund balances can be used only for specific purposes pursuant to constraintsimposed by a formal action in the form of ordinances and resolutions of TukwilaCouncilmembers, the City’s highest level of decision-making authority. This formal action is thepassage of an ordinance by City Council creating, modifying, or rescinding an appropriation.These committed amounts cannot be used for any other purpose unless Council removes orchanges the specified use by taking the same type of action it employed to previously committhose amounts.Assigned fund balance includes amounts that are constrained by the City’s intent to be used fora specific purpose, but are neither restricted nor committed. For governmental funds, other thanthe General Fund, this is the residual amount within the fund that is not restricted or committed.Unassigned fund balance is the residual amount of the General Fund not included in the fourcategories described above. Also, any deficit fund balances within the other governmental fundtypes are reported as unassigned.Each fund has been analyzed to classify the fund balance in accordance with GASB Statement No. 54.Funds are created by the Legislature and money is authorized to be transferred to the fund for aparticular purpose. At this point, balances in these funds are at least committed, and may be furtherrestricted depending on whether there is an external party, constitutional provision, or enablinglegislation constraint involved.The following table illustrates the use of fund balance resources for governmental funds. The Cityapplies restricted resources first when an expense is incurred for purposes of which both restricted andunrestricted net position is available in the governmental funds.General FundNonspendable Restricted Committed Assigned Unassigned TotalBeginning Fund Balance $ - $ - $ - $ - $ 8,260,142 $ 8,260,142Additions - - - - 51,052,023 51,052,023Expenditures - - - - (50,933,608) (50,933,608)Ending Fund Balance $ - $ - $ - $ - $ 8,378,557 $ 8,378,557Restricted-Committed-Assigned-UnassignedArterial StreetNonspendable Restricted Committed Assigned Unassigned TotalBeginning Fund Balance $ - $ 2,696,537 $ - $ 4,232,859 $ - $ 6,929,396Additions - 3,737,157 192,353 - - 3,929,510Expenditures - (6,038,939) (192,353) (4,144,283) - (10,375,575)Ending Fund Balance $ - $ 394,755 $ - $ 88,576 $ - $ 483,331Restricted-Committed-Assigned-UnassignedLand Acquisition Recreation & Park DevelopmentNonspendable Restricted Committed Assigned Unassigned TotalBeginning Fund Balance $ - $ 88,487 $ - $ 1,339,485 $ - $ 1,427,972Additions - 1,049,120 33,779 - - 1,082,899Expenditures - (1,137,607) (33,779) (249,298) - (1,420,684)Ending Fund Balance $ - $ - $ - $ 1,090,188 $ - $ 1,090,188Restricted-Committed-Assigned-Unassigned61
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CITY OF TUKWILA: <strong>2012</strong> CAFRNOTES TO THE FINANCIAL STATEMENTSCommitted fund balances can be used only for specific purposes pursuant to constraintsimposed by a formal action in <strong>the</strong> form <strong>of</strong> ordinances and resolutions <strong>of</strong> <strong>Tukwila</strong>Councilmembers, <strong>the</strong> <strong>City</strong>’s highest level <strong>of</strong> decision-making authority. This formal action is <strong>the</strong>passage <strong>of</strong> an ordinance by <strong>City</strong> Council creating, modifying, or rescinding an appropriation.These committed amounts cannot be used for any o<strong>the</strong>r purpose unless Council removes orchanges <strong>the</strong> specified use by taking <strong>the</strong> same type <strong>of</strong> action it employed to previously committhose amounts.Assigned fund balance includes amounts that are constrained by <strong>the</strong> <strong>City</strong>’s intent to be used fora specific purpose, but are nei<strong>the</strong>r restricted nor committed. For governmental funds, o<strong>the</strong>r than<strong>the</strong> General Fund, this is <strong>the</strong> residual amount within <strong>the</strong> fund that is not restricted or committed.Unassigned fund balance is <strong>the</strong> residual amount <strong>of</strong> <strong>the</strong> General Fund not included in <strong>the</strong> fourcategories described above. Also, any deficit fund balances within <strong>the</strong> o<strong>the</strong>r governmental fundtypes are reported as unassigned.Each fund has been analyzed to classify <strong>the</strong> fund balance in accordance with GASB Statement No. 54.Funds are created by <strong>the</strong> Legislature and money is authorized to be transferred to <strong>the</strong> fund for aparticular purpose. At this point, balances in <strong>the</strong>se funds are at least committed, and may be fur<strong>the</strong>rrestricted depending on whe<strong>the</strong>r <strong>the</strong>re is an external party, constitutional provision, or enablinglegislation constraint involved.The following table illustrates <strong>the</strong> use <strong>of</strong> fund balance resources for governmental funds. The <strong>City</strong>applies restricted resources first when an expense is incurred for purposes <strong>of</strong> which both restricted andunrestricted net position is available in <strong>the</strong> governmental funds.General FundNonspendable Restricted Committed Assigned Unassigned TotalBeginning Fund Balance $ - $ - $ - $ - $ 8,260,142 $ 8,260,142Additions - - - - 51,052,023 51,052,023Expenditures - - - - (50,933,608) (50,933,608)Ending Fund Balance $ - $ - $ - $ - $ 8,378,557 $ 8,378,557Restricted-Committed-Assigned-UnassignedArterial StreetNonspendable Restricted Committed Assigned Unassigned TotalBeginning Fund Balance $ - $ 2,696,537 $ - $ 4,232,859 $ - $ 6,929,396Additions - 3,737,157 192,353 - - 3,929,510Expenditures - (6,038,939) (192,353) (4,144,283) - (10,375,575)Ending Fund Balance $ - $ 394,755 $ - $ 88,576 $ - $ 483,331Restricted-Committed-Assigned-UnassignedLand Acquisition Recreation & Park DevelopmentNonspendable Restricted Committed Assigned Unassigned TotalBeginning Fund Balance $ - $ 88,487 $ - $ 1,339,485 $ - $ 1,427,972Additions - 1,049,120 33,779 - - 1,082,899Expenditures - (1,137,607) (33,779) (249,298) - (1,420,684)Ending Fund Balance $ - $ - $ - $ 1,090,188 $ - $ 1,090,188Restricted-Committed-Assigned-Unassigned61
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