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Home My WebLink About2012 Annual ReportCity of Bremerton, Washington Annual Financial Report For the Fiscal Year ended December 31, 2012 Prepared by the Finance Department City of Bremerton 3456 Ih Street, Suite 600 Bremerton, WA 98337 (360) 473 -5210 Website: www.ci.bremerton.wa.us City of Bremerton Comprehensive Annual Financial Report For the Fiscal Year Ended December 31, 2012 Table of Contents Page Introductory Section Letter of Transmittal 1 Organization Chart 4 List of Elected and Appointed Officials 5 Financial Section Independent Auditor's Report 7 Management's Discussion and Analysis 10 Basic Financial Statements: Government -wide Financial Statements: Statement of Net Position 23 Statement of Activities 24 Fund Financial Statements: Balance Sheet — Governmental Funds 25 Statement of Revenues, Expenditures, and Changes in Fund Balances — Governmental Funds 26 Reconciliation of the Statement of Revenues, Expenditures, and Changes In Fund Balances of Governmental Funds to the Statement of Activities--------------------------------------------------------- - - - - -- 27 Statement of Revenues, Expenditures, and Changes in Fund Balances — Budget and Actual General Fund 28 Statement of Net Position — Proprietary Funds -------------------------------------------------------------------------------------------------------- - - - - -- 29 Statement of Revenues, Expenses, and Changes in Fund Net Position — Proprietary Funds ------------------------------------ - - - - -- 30 Statement of Cash Flows — Proprietary Funds 31 Statement of Fiduciary Net Position — Fiduciary Funds-------------------------------------------------------------------------------------------- - - - - -- 33 Notes to the Financial Statements 35 Required Supplementary Information: LEOFF I Pension Benefits ------------ ------------------------------- 67 Combining and Individual Fund Statements and Schedules: Combining Balance Sheet — Nonmajor Governmental Funds------------------------------------------------------------------------------------------- - - - - -- 69 Combining Statement of Revenues, Expenditures and Changes in Fund Balances — Nonmajor Governmental Funds ----- - - - - -- 72 Schedules of Revenue, Expenditures, and Changes in Fund Balances — Budget and Actual: Special Revenue Funds 75 Debt Service Funds 89 Capital Projects Funds 93 Combining Statement of Net Position — Proprietary Funds------------------------------------------------------------------------------------------- - - - - -- 100 Combining Statement of Revenues, Expenses, and Changes in Fund Net Position — Proprietary Funds ---------------------- - - - - -- 101 Combining Statement of Cash Flows — Proprietary Funds-------------------------------------------------------------------------------------------- - - - - -- 102 Combining Statement of Net Position — Internal Service Funds ----------------------------------------------------------------------------------- - - - - -- 104 Combining Statement of Revenues, Expenses, and Changes in Fund Net Position — Internal Service Funds--------------- - - - - -- 105 Combining Statement of Cash Flows — Internal Service Funds ------------------------------------------------------------------------------------ - - - - -- 106 Combining Statement of Fiduciary Net Position - Agency Funds----------------------------------------------------------------------------------- - - - - -- 108 Table of Contents Statistical Section Financial Trends: Page Table 1 — Net Assets by Component 109 Table 2 — Changes in Net Assets 110 Table 3 — Fund Balance of Government Funds 111 Table 4 — Changes in Fund Balances of Government Funds----------------------------------------------------------------------------------------- - - - - -- 112 Revenue Capacity: Table 5 — Assessed and Estimated Actual Value of Taxable Property -------------------------------------------------------------------------- - - - - -- 113 Table 6 — Property Tax Rates Direct and Overlapping Governments Last 10 Fiscal Years ------------------------------------------ - - - - -- 114 Table 7 — Principal Property Taxpayers 115 Table 8 - Property Tax Levies and Collections 116 Debt Capacity Table 9 — Ratio of Net General Bonded Debt 117 Table 10 — Computation of Direct and Overlapping Debt--------------------------------------------------------------------------------------------- - - - - -- 118 Table 11 — Computation of Legal Debt Margin 119 Table 12 — Water and Sewer Revenue Bond Coverage ------------------------------------------------------------------------------------------------- - - - - -- 120 Demographic and Economic Information: Table 13 — Demographic Statistics 121 Table 14 —Miscellaneous Statistics 122 City of Bremerton / 1 July 16, 2013 Department of Financial Services 345 6th Street Suite 600, Bremerton, WA 98337 Telephone: 360- 473 -5347 Fax: 360- 473 -5200 Becky.Hasart &i. bremerton. wa. us Becky Hasart, Director of Financial Services To the Members of the City Council and the Citizens of the City of Bremerton: The Department of Financial Services is pleased to provide you with the Annual Financial Report of the City of Bremerton for the fiscal year ended December 31, 2012. State statute and financial best practices require the City issue annually a report on its financial position and activity. Responsibility for both the accuracy of the data, and the completeness and fairness of the presentation, including all disclosures, rests with city management based upon a comprehensive framework of internal controls that have been established to provide assurances that the financial statements are free of any material misstatements. To the best of our knowledge and belief, the enclosed data are accurate in all material respects and are reported in a manner that presents fairly the financial position and results of operations of the various funds and component units of the City. Generally Accepted Accounting Principles (GAAP) in the United States of America requires that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of 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 in the Financial Section of this report. The City of Bremerton is required to undergo an independent, annual single audit in conformity with the provisions of the Single Audit Act of 1996 and the U.S. Office of Management and Budget Circular A- 133, Audits of States, Local Governments, and Non -Profit Organizations. Information related to this independent, single audit, including a schedule of expenditures of federal awards, the State Auditor's Office reports on the internal control structure and compliance with applicable laws and regulations, and the schedule of findings and questioned costs, if any, are included in separately issued reports. Profile of the Government The City of Bremerton was incorporated in 1901, and operates under the laws of the State of Washington applicable to a home -rule charter city under a Mayor /Council form of govermnent. The City Council is comprised of nine members, elected by district by the citizens of the City, each serving a four -year tern. The City Council members are part-time elected officials who exercise the legislative powers of the City and determine matters of policy. The Mayor, a full -time elected official, is the chief executive officer of the City. The officers and department directors are appointed by the Mayor with City Council approval. The City provides a full range of municipal services including fire protection/emergency medical services, law enforcement, municipal court, parks and recreation facilities /activities, transportation, 2 / City of Bremerton infrastructure construction and maintenance, economic development, building and planning, zoning, finance and administration, and operates water, sewer, and stormwater utility systems. The City of Bremerton is located in Kitsap County and lies east of the Olympic Mountains directly across Puget Sound from Seattle. As the largest city in the County, Bremerton had a 2012 population of 39,650 and serves as the urban center for the Bremerton- Silverdale Metropolitan Statistical Area (MSA). For over a century, Bremerton has been home to Puget Sound Naval Shipyard which continues to service U.S. Naval vessels and its personnel. The City adopts an annual (calendar year) budget and the Council is required to adopt the final budget by no later than the close of the fiscal year. This annual budget serves as the foundation for the City's financial planning and control. The budget is prepared by fund, department, and /or program. Periodic amendments to the adopted budget are approved by the City Council. Economic Overview /Factor's Affecting the City's Financial Condition Information presented in the financial statements is best considered in the broader context of the economic environment in Bremerton and the surrounding area. Local Economy (Source: Employment Security Dept., Bureau of Economic Analysis; US Census Bureau) As stated above, the City of Bremerton has been home to Puget Sound Naval Shipyard (PSNS) for over a century. PSNS employs over 9,000 civilians that service U.S. Navy ships. In addition, nearly 6,000 active duty military personnel are based at this site. Additional major employers in our region include Harrison Medical Center with 2650 employees and Olympic College with 1269 employees. Kitsap County's business climate remains as healthy as our environment thanks to the presence of major Naval installations, including the PSNS, Naval Base Kitsap, Naval Undersea Warfare Center Division Keyport, and Naval Hospital Bremerton. Our county has a skilled workforce of approximately 125,000. Local jobs are found in approximately 119,000 non - agricultural positions and in thousands of other sole proprietorships. About 1 / of these non - agricultural jobs are military, federal civil service, and private sector defense contractor jobs that directly or indirectly support our major Naval installations. For 2012, the county's unemployment rate was 7.4 percent. In comparison, the State of Washington's unemployment rate for the same period was 8.2 percent. Per Capita income for the Bremerton- Silverdale MSA is also improving. 2011 per capita income was $42,580, a slight increase over 2010's figure of $42,300. The median household income projections for Kitsap County also continue to improve. The 2012 projection for Kitsap County is $57,155, as compared to $55,400 for 2011, and as compared to the 2012 Washington State median household income figure of $56,444. The naval and Department of Defense installations in the county have a significant impact on the City's economy. The naval presence has served the City well in the past and is expected to continue to help it recover from the effects of the current recession. In addition, it has been the City's policy to encourage and facilitate diversification in the region's employment base. The City has completed its master plan for the South Kitsap Industrial Area, which encourages manufacturing and industrial development. City of Bremerton / 3 ■ Relevant Financial Policies Financial and Budget Policy Statements are presented on pages 165 -168 of the 2013 Annual Budget, which may be found on the City's website at www.ci.bremertou.wa.us Long -term financial planning is discussed in several of the policy statements, including strategic planning, financial sustainability, and budget and contingency policies. In addition, long -tern financial planning for the City is framed by the City's Comprehensive Plan which was adopted in December 2004. The Comprehensive Plan represents the expressed vision of the City and related expectations on the nature of growth and services to be provided. The Financial and Budget Policy statements define what constitutes a "good outcome" for the City in regards to financial planning and decisions and the boundaries or demonstrated performance deemed necessary to achieve those objectives. ■ Revenue Limitations State law allows the City to levy a property tax rate of up to $3.825 per thousand of assessed property value annually (Bremerton is eligible for the additional $0.225 for fireman's pension fund). No matter what the assessed value is, however, the growth rate of property tax collections is limited to 1% per year prior to the addition of new construction. In no event may the annual limit exceed the $3.825 per thousand of assessed value. During 2012, the City levied at the statutory limitation of $3.06 per thousand of assessed value, inclusive of the $0.50 per thousand emergency management services levy. Major Initiatives The City of Bremerton, in partnership with other public entities, provided significant public sector stimulus investment to the City's revitalization program by infusing public dollars into key infrastructure improvements. Over the past five years, these projects have included a new Conference Center, parking garages, two hotels, two condominium complexes, an expanded marina, Harborside Park and Plaza, a ferry terminal traffic tunnel, as well as a new Government Center. The City continued this investment in its revitalization program with the completion of a new parking garage downtown. This new garage led to the development of a multi -plex cinema (opened June 2012) and commitment from private development for a new 72 unit residential apartment complex to commence construction during 2013. Acknowledgments The preparation of this report could not have been accomplished without the efforts of the staff in the Department of Financial Services. We would like to express our appreciation to all those who assisted and contributed to the preparation. We would like to specifically thank Cathy Johnson, Assistant Director of Financial Services, for her work in bringing this document together. We would also like to thank the Directors and City Council members for their dedication and commitment to providing the City and the residents with a plan to improve the financial health and welfare of the City's governmental operations. Respectfully submitted, Patty Lent Mayor Becky Hasart Director of Financial Services CITIZENS OF BREMERTON C) 0 Oo m m 0 JUDGE MUNICIPAL COURT MAYOR'S OFFICE CITY COUNCIL AUDIT COMMITTEE CITY AUDITOR CITY POLICE ' FINANCIAL PUBLIC WORKS ' COMMUNITY PARKS & FIRE - EMS ATTORNEY SERVICES SERVICES & UTILITIES DEVELOPMENT RECREATION SERVICES Council to City Patrol Records Management Engineering Land & Use Planning Parks Building Fire Suppression & Maintenance Civil Legal Services Traffic Admin Support Services Street Lighting & Building Inspections Recreation Programs Emergency Medical Road Maintenance Services Prosecution Investigation Public Acess TV Utility Operations Code Enforcement City Fountains Fire Prevention & Maintenance Civil Litigation Crime Prevention Information Technology Facility Maintenance Environmental Review Gold Mountain Golf Risk Management Home Detention City Clerk Forestry Management One -Stop Senior Center Permit Center & Programs Safety Program Jail Contrail Conference Center Water Supply Zoning Administration Parks Commission Operating & Enforcement Support Photo Enforcement Human Resources Wastewater Treatment CDBG Home Program Community Policing B & O Tax Surface Water Annexations Management Reserve Office Business & Construction Admin Program Regulatory Licensing Special Operations Debt Management Equipment Rental Group Reserve & Operations Fiscal Policy Surveying & Mapping Oversight Cash & Bank Permit Coordination Management Accounting & Budget Utility Billing & Customer Service C) 0 Oo m m 0 City of Bremerton / 5 Directory of Officials 2012 Elected Officials: Mayor.................................................................................................. ............................... Patty Lent District #1 Council Member ......................................................... ............................... Jim McDonald District #2 Council Member ................................... ............................... .........................Leslie Daugs District #3 Council Member ............................... ............................... ..........................Adam Brockus District #4 Council Member ........................................................... ............................... Wendy Priest District #5 Council Member .......................................................... ............................... Greg Wheeler District #6 Council Member ......................................................... ............................... Faye Flemister District #7 Council Member ........................................................... ............................... Carol Arends District #8 Council Member ........................................................... ............................... Eric Younger District #9 Council Member .......................................................... ............................... Nick Wofford Judge, Municipal Court .................................................................. ............................... James Docter Appointed Officials: CityAttorney .................................................... ............................... ..........................Roger Lubovich Director, Public Works and Utilities ................................................ ............................... Chal Martin FireChief ............................................................................................... ............................... Al Duke PoliceChief .................................................................................... ............................... Craig Rogers Director of Financial Services ........................................................ ............................... Becky Hasart Director of Community Development ........................................ ............................... Andrea Spencer Director of Parks and Recreation .............................................. ............................... Wyn Birkenthal CityAuditor ..................................................................................... ............................... Gary Nystul 6 / City of Bremerton THIS PAGE LEFT BLANK INTENTIONALLY. City of Bremerton / 7 Independent Auditor's Report on Financial Statements City of Bremerton Kitsap County January 1, 2012 through December 31, 2012 Council City of Bremerton Bremerton, Washington REPORT ON THE FINANCIAL STATEMENTS We have audited the accompanying financial statements of the governmental activities, the business -type activities, each major fund and the aggregate remaining fund information of the City of Bremerton, Kitsap County, Washington, as of and for the year ended December 31, 2012, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed on page 20. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the City's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. Washington State Auditor's Office 17 8 / City of Bremerton We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business -type activities, each major fund and the aggregate remaining fund information of the City of Bremerton, as of December 31, 2012, and the respective changes in financial position and, where applicable, cash flows thereof, and the budgetary comparison for the general fund, for the year then ended in accordance with accounting principles generally accepted in the United States of America. Matters of Emphasis As discussed in Note 19 to the financial statements, in 2012, the City adopted new accounting guidance, Governmental Accounting Standards Board Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources and Net Position. Our opinion is not modified with respect to this matter. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis on pages 21 through 33 and information on postemployment benefits other than pensions on page 77 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Supplementary and Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The accompanying Schedule of Expenditures of Federal Awards is presented for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A -133, Audits of States, Local Governments, and Non - Profit Organizations. This schedule is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. Washington State Auditor's Office 18 City of Bremerton / 9 OTHER REPORTING REQUIRED BY GOVERNMENT AUDITING STANDARDS In accordance with Government Auditing Standards, we have also issued our report dated September 9, 2013 on our consideration of the City's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City's internal control over financial reporting and compliance. TROY KELLEY STATE AUDITOR September 9, 2013 Washington State Auditor's Office 19 10 / City of Bremerton Management's Discussion and Analysis The City of Bremerton (City) presents this Management Discussion and Analysis (MD &A) in order to provide a narrative overview of the City's financial activities, focus on significant financial issues, and highlight significant changes in the City's financial position for the fiscal year ended December 31, 2012. This information should be read in conjunction with the financial statements and notes to the financial statements that follow. Financial Highlights At the end of fiscal year 2012, the assets of the City exceeded its liabilities by $256.8 million. The net investment in capital assets accounts for over 84.8 percent of this amount ($217.8 million). Net assets restricted primarily for construction projects, debt service, Community Development Block Grant (CDBG) programs, tourism promotion, worker's compensation liability and public safety account for another 2.3 percent of this amount ($5.8 million). The remaining net assets of $33.2 million may be used to meet the City's ongoing obligations to citizens and creditors. • The City's net assets increased by $16.5 million (6.87°/x) during the fiscal year. The governmental net assets increased by $7.8 million (9.3 %) from the amount reported in 2011. Business -type net assets increased by $8.7 million (5.6 %). The Business -type increase included net income before contributions and transfers for the Water utility of $1,046,064, Wastewater utility of $3,569,783, other non -major proprietary funds of $133,537 and Golf Course $(161,302). As of December 31, 2012, the City's governmental funds reported a combined fund balance of $9.3 million, an increase of 0.8% from the prior year end. The fund balance of the General Fund increased by $1,195,224 while the remaining non -major governmental funds had a fund balance decrease of $1,117,740. The overall increase of $77,485 is primarily attributable to decreased expenditures for personnel and supplies and services in the General fund offset by an increase in grant funded capital projects in other governmental funds. $2.8 million of the combined ending governmental fund balances is restricted for specific purposes by external parties or enabling legislation or otherwise not available for expenditure. Of the remaining $6.5 million of unrestricted fund balance $2.4 million has been committed or assigned for specific purposes while $4.0 million is unassigned and available to the City for future appropriation. • At the end of 2012, the unassigned fund balance of the General Fund was $4.0 million or approximately eleven percent of total General Fund expenditures of $34.5 million. The General Fund's unassigned fund balance increased by $744,241 from the prior year's amount of $3.3 million, a 22.7 percent increase. This increase over 2011 is primarily due to reduced expenditures from 2011. The 2011 expenditures included a one -time settlement of $1,150,000 under a contingent loan agreement with Kitsap County. • The City's total outstanding debt decreased by $10.5 million (13.9°/x) during the current fiscal year to $65.1 million. General obligation debt decreased by $1.7 million and revenue debt decreased by $8.8 million. Debt per capita decreased from $1,949 to $1,642, a 15.75% decrease. • The City's net investment in Capital Assets increased $6.8 million (2.5 %) in 2012. Total Capital assets from governmental activities increased $5.1 million or 4.8 %. Total Capital assets from business type activities increased $1.7 million or 1.0 %. These increases are primarily due to Park Avenue Plaza parking facility ($2.6 million) and crosstown pipeline ($2.5 million) projects. In addition, roads, traffic signals and lighting in the Bay Vista development, valued at $2.6 million, were conveyed to the City by the developers of the plat. City of Bremerton / I I Overview of the Financial Statements The City's basic financial statements are presented in three parts: 1) government -wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. Other supplementary information in addition to the basic financial statements is also contained in this report. This section of the management's discussion and analysis is intended to introduce and explain the basic financial statements. Government -wide Financial Statements The government -wide financial statements are designed to give the reader a picture of the financial condition and activities of the City as a whole. This broad overview is similar to the financial reporting of private- sector businesses. The government -wide financial statements have separate columns for governmental activities and business -type activities. Governmental activities of the City include general government (finance, executive, human resources), community development, public safety (police and fire), utilities and environment, transportation, economic environment, and culture and recreation. The City's business -type activities are limited to the City's municipal golf course and water, wastewater and non -major utility activities. Governmental activities are primarily supported by taxes, charges for services, and grants while business -type activities are self - supporting through user fees and charges. The statement of net position presents information on all of the City's assets and liabilities, highlighting the difference between the two as net position. This statement is similar to the balance sheet of a private sector business. Over time, increases or decreases in net position may be one indicator of improvement or deterioration in the City's overall financial health. The statement of activities presents information designed to show how the City's net position changed during the year. This statement distinguishes revenue generated by specific functions from revenue provided by taxes and other sources not related to a specific function. The revenue generated by the specific functions (charges for services, grants, and contributions) is compared to the expenses for those functions to show how much each function either supports itself or relies on taxes and other general funding sources for support. All activity on this statement is reported on the accrual basis of accounting, requiring that revenues are reported when they are earned and expenses are reported when they are incurred, regardless of when cash is received or disbursed. Items such as uncollected taxes, unpaid vendor invoices for goods or services received during the year, and earned but unused vacation leave are included in the statement of activities as revenue and expenses even though no cash has changed hands. Fund Financial Statements The annual financial report includes fund financial statements in addition to the government -wide financial statements. While the government -wide statements present the City's finances based on the type of activity, general government versus business -type, the fund financial statements are presented by fund type such as the general fund, special revenue funds, and proprietary funds. A fund is a fiscal and accounting entity with a self - balancing set of accounts used to account for specific activities or meet certain objectives. Funds are often set up in accordance with special regulations, restrictions or limitations. The City, like other state and local governments, uses fund accounting to ensure and show compliance with finance - related legal requirements. The City's funds are divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental funds are used to account for essentially the same functions as are reported as governmental activities in the government -wide financial statements. The basis of accounting is different between the governmental fund statements and the government -wide financial statements. The governmental fund statements focus on near -term revenues /financial resources and expenditures while the government -wide financial statements include both near -term and long -term revenues /financial resources and expenses. The information in the governmental fund statements can be used to evaluate the City's near -term financing requirements and immediate fiscal health. Comparing the governmental fund statements with the government -wide statements can help the reader better understand the long -term impact of the City's current year financing decisions. To assist in this 12 / City of Bremerton comparison, reconciliations between the governmental fund statements and the government -wide financial statements are included with the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances. The City maintained twenty -four (24) individual governmental funds in 2012. The City's General fund is presented separately in the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances. The remaining governmental funds are combined into a single column labeled "Other Governmental Funds ". Information for each of the non -major governmental funds is provided in the combining statements in this report. The City maintains budgetary control over its operating funds through the adoption of an annual budget. Budgets are adopted at the department and category group level by fund in accordance with City code and state law. A budgetary comparison statement is presented as required supplementary information for all funds for which there was an adopted budget. Proprietary funds are used by governments to account for their business -type activities. Business -type activities provide specific goods or services to a group of customers that are paid for by fees charged to those customers. There is a direct relationship between the fees paid and the services received. The City has two types of proprietary funds: enterprise funds and internal service funds. Enterprise funds are used to account for goods and services provided to citizens. Internal service funds are used to account for goods and services provided internally to various City departments. The City's five (5) enterprise funds are used to report the same functions presented as business -type activities in the government -wide statements with the fund statements providing more detail than is reported in the government - wide statements. The enterprise fund statements provide separate information for the City's municipal golf course, water and wastewater and stormwater utilities. Internal service funds are an accounting device used to accumulate and allocate costs internally among the City's various functions. The City uses internal service funds to account for maintenance and acquisition of its fleet of vehicles, insurance premiums and claims, unemployment insurance obligations, termination benefits as well as information technology services. Internal service funds benefit both governmental and business -type activities and are allocated accordingly in the government -wide statement of activities. Fiduciary funds account for assets held by the City in a trustee capacity or as an agent for individuals, private organizations, other governments, or other funds. Fiduciary funds are not included in the government -wide financial statements because their assets are not available to support the City's activities. The City has one type of fiduciary fund an agency fund. Agency funds are custodial in nature and do not include revenues and expenses as they do not measure the results of operations. Government -wide Financial Analysis Statement of net position The statement of net position can serve as a useful indicator of the City's financial position. The City's net assets at December 31, 2012 total $256.8 million. Following is a condensed version of the government -wide statement of net position. The City presents its financial statements in compliance with Governmental Accounting Standards Board Statement No. 34 (GASB 34), Basic Financial Statements and Management's Discussion and Analysis for State and Local Governments. Two years of financial information in the GASB 34 format are presented. City of Bremerton / 13 Net Position Amounts in 000's Governmental Activities Business -Type Activities Total 2012 2011 Difference 2012 2011 Difference 2012 2011 Difference Current Assets $ 17,450 $ 17,065 $ 385 $ 25,203 $ 27,347 $ (2,144) $ 42,653 $ 44,412 $ (1,759) Restricted Assets 472 100 372 1,739 1,690 49 2,211 1,790 421 Capital Assets 110,243 105,193 5050 171,700 169,962 1,738 281,943 275,155 6,788 Other Noncurrent Assets 1,590 1,550 40 1,021 1,103 (82) 2,611 2,653 (42) Total assets 129,755 123,908 5,847 199,663 200,102 (439) 329,418 324,010 5,408 Current Liabilities 13,508 4,911 8,597 1,462 4,901 (3,439) 14,970 9,812 5,158 Payable from Restricted Assets - - - - 163 (163) - 163 (163) Noncurrent Liabilities 24,955 35,508 (10,553) 32,670 38,181 (5,511) 57,625 73,689 (16,064) Total liabilities 38,463 40,419 (1,956) 34,132 43,245 (9,113) 72,595 83,664 (11,069) Net position Net investment in capital assets 78,295 71,533 6,762 139,494 128,931 10,563 217,789 200,464 17,325 Restricted 4,201 6,008 (1,807) 1,617 1,527 90 5,818 7,535 (1,717) Unrestricted 8,796 5,948 2,848 24,420 26,399 (1,979) 33,216 32,347 869 Total net position $ 91,292 $ 83,489 $ 7,803 $ 165,531 $ 156,857 $ 8,674 $ 256,823 $ 240,346 $ 16,477 The largest component of the City's net assets, $217.8 million (or 84.8 %), is its investment in capital assets less any related outstanding debt issued to acquire those assets. These capital assets, such as utility plant, streets, trails, parks, fire and police vehicles, are used to provide services to the citizens. Consequently, these assets are not available to sell and convert to cash for future spending. Although the City's investment in its capital assets is reported net of related debt, the resources needed to repay the debt must be provided from other sources, as capital assets cannot be used to liquidate these liabilities. Restricted net assets consist of amounts legally or otherwise externally restricted for debt service and other programs. Of the $4.2 million of governmental restricted assets, $1.5 million or 35.7% is restricted for the construction of capital assets. $2.7 million of restricted net assets are special revenues restricted primarily for use in the Community Development Block Grant program (26.2 %), for public safety services (19.9 %), tourism promotion (3.1 %), workers compensation liability (2.4 %) and Parking system operation and debt service (12.7°/x). $1.6 million of business -type restricted assets are reserves required for debt service payments and asset replacement. A total of $24.4 million represents the unrestricted net assets of the City's business -type activities and may only be spent on golf course operations, water, wastewater and other utility activities. Maintenance of utility delivery systems (water lines, pump station, wells), storm drain flushing, water meter reading, and capital construction projects, such as well rehabilitation, are examples of utility activities. Other functions of the City may access the remaining net assets of $8.8 million to meet ongoing obligations to citizens and creditors. Examples of other City obligations which these net assets may be used for are: public safety employee salaries, parks maintenance (mowing, fence repair, etc), and ongoing street maintenance (street sweeping, restriping, resurfacing, etc). At the end of the fiscal year, the City reported positive balances in all three categories of net assets for the government as a whole, as well as for the separate governmental and business -type activities. Changes in net position The Changes in Net Position table illustrates the increase or decrease in net position of the City resulting from its operating activities. The City's overall financial position improved in 2012 with net position increasing approximately $16.7 million before prior period adjustments. Net assets of governmental activities increased by $7.8 million and the net assets of business -type activities increased by $8.9 million. Following is a condensed version of the City's changes in net assets. The table shows the revenues, expenses, and related changes in net assets in tabular form for the governmental activities separate from the business -type 14 / City of Bremerton activities. The graphs that follow compare program revenues to program expenses and illustrate the revenues by source separately for the governmental and business -type activities. Changes in Net Position Amounts in 000's Revenues Program revenues Charges for services Operating grants and contributions Capital grants and contributions General revenues Property taxes Sales taxes Business taxes Utility taxes Other taxes Other general revenues Total revenues Expenses Governmental activities General government Public safety Utilities and environment Transportation Economic Enivironment Culture and recreation Interest on long -term debt Business -type activities Water Wastewater Golf course Other proprietary fiords Total expenses Excess of revenues over expenses Transfers Change in net position Net position - beginning Prior period adjustment Net position - ending Governmental Activities Business -Type Activities (2,249) Total 2012 2011 Difference 2012 2011 Difference 2012 2011 Difference 23,177 23,719 (542) 220 219 1 $ 8,148 $ 8,134 $ 14 $ 26,808 $ 26,471 $ 337 $ 34,956 $ 34,605 $ 351 678 1,863 (1,185) 3 259 (256) 681 2,122 (1,441) 6,847 1,754 5,093 9,254 2,580 6,674 16,101 4,334 11,767 8,579 8,547 32 6,061 - - 8,579 8,547 32 7,296 7,051 245 16 17 (1) 7,312 7,068 244 3,257 3,175 82 1 8,868 1 3,258 3,175 83 4,407 4,512 (105) 9,944 9,822 122 4,407 4,512 (105) 2,679 2,385 294 - - 135 2,679 2,385 294 488 Q' Al 170 658 Q' 34 n7o (170) Q' A inn 683 N 3r.7ri 613 Q' 10 oAn N 70 r. Q li 1,171 Q' 70 inn 1,271 Q' r.4 nio (100) Q' i i 111 2,336 4,585 (2,249) 2,336 4,585 (2,249) 23,177 23,719 (542) 23,177 23,719 (542) 220 219 1 220 219 1 4,207 4,235 (28) 4,207 4,235 (28) 1,865 2,232 (367) 1,865 2,232 (367) 6,061 5,976 85 6,061 5,976 85 1,172 1,512 (340) - - 1,172 1,512 (340) - - - 8,923 8,868 55 8,923 8,868 55 9,944 9,822 122 9,944 9,822 122 2,271 2,136 135 2,271 2,136 135 - - 2,282 1,831 451 2,282 1,831 451 $ 39,038 $ 42,478 $ (3,440) $ 23,420 $ 22,657 $ 763 $ 62,458 $ 65,135 $ (2,677) 3,341 (4,399) 7,740 13,345 7,283 6,062 16,686 2,884 13,802 4,462 3,738 724 (4,462) (3,738) (724) - - - 7,803 (661) 8,464 8,883 3,545 5,338 16,686 2,884 13,802 83,489 84,616 (1,127) 156,857 153,438 3,419 240,346 238,054 2,292 - (466) 466 (209) (126) (83) (209) (592) 383 $ 91,292 $ 83,489 $ 7,803 $ 165,531 $ 156,857 $ 8,674 $ 256,823 $ 240,346 $ 16,477 Governmental activities accounted for an increase of $7.8 million of the total change in net assets of $16.7 million. Significant elements of the increase are as follows: ■ Expenditures decreased by 8.1% in 2012 compared to 2011. Reductions occurred in many functional areas, as a significant effort was made to match declining resources. The most notable exception was expenditures for Culture and Recreation. Expenditures for Culture and Recreation increased 14% in 2012 as a result of increased operating costs at the Kitsap Conference Center. Expenditure decreases are primarily due to the fact that 2011 expenditures included a $1,150,000 settlement under a contingent loan agreement with Kitsap County as well as positive expenditure budget variances in expenditures associated with Community Development, Facilities, Law Enforcement, Engineering, and Police and Fire Pension departments. ■ Total revenue from governmental activities in 2012 increased by $4.3 million from 2011. Program revenues accounted for the largest portion of this increase, $3.9 million or 91 %. Within program revenue, Operating Grants and Contributions decreased $1.2 million or 63 %. This was offset by an increase in Capital Grants and Contributions of $5.1 million, or 283 %. The increase in Capital Grants and Contributions were from grants for construction of the Park Plaza parking facility as well as several low impact street development projects. The remaining increase in revenue for governmental activities is attributable to tax revenues. Tax revenues that support ongoing operations increased by $.5 million in 2012 from the 2011 level. Sales taxes increased $0.2 City of Bremerton / 15 million or 3.5 %. Utility taxes decreased by $0.1 million or 0.02°/x. Property, business, and other taxes increased $0.4 million or 2.9% with the largest increase being other general taxes ($.3 million). Other general revenues which include interest earnings, gains on disposal of assets, and miscellaneous income, decreased by $0.17 million in 2012 from the 2011 level, or 25.8 %. The largest component of this decrease ($.5 million) was related to the sale of property and other assets. In 2011 a retail pad at Park Avenue Plaza was sold for $500,000 for the construction of a multiscreen cinema. This decrease was offset by an increase of $3 million for the return, in 2012, of the city's portion of bond reserves held by Housing Kitsap for the debt issued to construct the Norm Dicks Government Center. These reserves were used to partially fund the refunding escrow account. ■ Transfers continued to play a significant role in the increase to net assets in 2012. Transfers from Business -type activities increased $724,000 in 2012. Payments in lieu of tax levied on the city's own utilities increased by $766,628 to $4,462,373 (20.7°/x). Revenue by Source - Governmental Activities Amounts in $000 2011 and 2012 10,000 9,000 8,000 7,000 ®zou 6,000 ®zoiz 5,000 4,000 3,000 2,000 1,000 0 Charges for Operating Capital Property Business Utility Other grants and grants and Sales taxes Other taxes general services contributions contributions taxes taxes taxes revenues ®2011 8,134 1,863 1,754 8,547 7,051 3 4,512 2,385 658 ®2012 8,148 678 6,847 8,579 7,296 3,257 4,407 2,679 488 16 / City of Bremerton Amounts in $000 << : 201> 2 Expenditures by Type - Governmental Activities 2011 and 2012 Expenses and Program Revenues - Governmental Activities Amounts in $000 2012 ® Program Expense ❑Program Rcvcnuc Business -type activities increased City's net assets by $8.9 million, before prior period adjustments, accounting for approximately fifty three percent of the total growth in the government's net assets. • A key element of this increase is in capital grants and contributions which continued to be a significant revenue source in 2012. Revenue of $9.3 million from this source increased $6.7 million or 258.6% in 2012 from 2011 levels as a result of forgiveness of a $6.2 million of Public Trust Fund Loan at completion of the construction of the UV Treatment Plant. Of the $9.3 million received from this contribution in 2012, 16% City of Bremerton / 17 was from developer contributions. The largest contribution, $1,026,707, was from Bremerton Housing Authority for infrastructure at the Bay Vista development. • Charges for services increased $3 million in 2012. This increase was largely as a result of a 6% utility Water rate increase on billings effective January 1, 2012. There was no utility rate increases to Sewer and Stormwater. Golf course revenues decreased $19,135 (0.9 %) in 2012. • Expenditures for Business Type activities increased $.76 million in 2012 over 2011. This increase was mainly attributable to general cost increases for fuel, utilities and supplies. • Transfers to Governmental Activities increased by $724,000 in 2012. Payments in lieu of tax levied on the city's own utilities increased by $766,628 to $4,462,373 (20.7 %). • Business -Type activities were reduced $209,000 in 2012 by a prior period adjustment for capitalized costs incurred in prior years on projects that are no longer included in the capital improvement plan. Revenue by Source - Business -type Activities 18 / City of Bremerton Expenses by Fund - Business -type Amounts in $000 2011 and 2012 n 2011 Expenses and Program Revenues - Business -type Activities Amounts in $000 2012 18,000 --------------------------------- 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 - I MF_T__Mi7 0 Water Wastewater Go If course Other proprietary funds ® Program Expense 13 Program Revenue City of Bremerton / 19 Comparison of Total Revenues and Total Expenses Amounts in $000 2011 and 2012 ®2011 02012 Financial Analysis of the City's Funds As discussed earlier, the City uses fund accounting to ensure and demonstrate compliance with finance- related legal requirements. Governmental funds The General Fund is the primary operating fund of the City through which all receipts and payments of ordinary City operations are processed, unless they are required to be accounted for in another fund. Taxes are the major revenue source. At the end of 2012, the fund balance of the General Fund was $4.6 million. As a measure of the fund's liquidity, the 2012 ending fund balance is 13.3% of the fund's 2012 expenditures, an increase of 3.6% over 2011's 9.7 %. The General Fund balance increased in 2012 by $1.2 million. Revenues increased from $30.8 million in 2011 to $32.0 million in 2012. Expenditures decreased from $35.0 million to $34.5 million during the same period. Expenditures exceeded revenues in the General Fund by $2.5 million in 2012 but were offset by net transfers and other financing sources of $3.7 million. Proprietary funds The City's proprietary funds provide the same type of information found in the government -wide financial statements, but in more detail. Other than accomplishing the programs identified in the 2012 capital improvement program there were no significant transactions pertaining to the proprietary funds. General Fund Budget Variations The General Fund collected revenues at 98.9% of the amended amount budgeted or $.41 million less than budgeted. Expenditures for 2012 were 93.9% of the amended budget resulting in actual expenditures being $2.2 million less than the budgeted amount. The negative revenue budget variance is substantially attributable to a decrease in anticipated charges for services and payments in lieu of taxes. The positive expenditure budget variance is largely attributable to personnel cost savings from attrition and lower supplies and services expenditures than anticipated in the Community Development, Law Enforcement, Engineering and Police & Fire Pension departments. 20 / City of Bremerton The General Fund budget was balanced in 2012. The original budget provided for a decrease to the fund balance of $8,259. The budget was amended two times during 2012. The final amended budget provided for a decrease to fund balance of $585,299. At the conclusion of 2012, the General Fund increased fund balance by $1.2 million. Capital Asset and Debt Administration Capital Assets The City's investment in capital assets for its governmental and business -type activities as of December 31, 2012, amounts to $281.9 million (net of accumulated depreciation). This investment in capital assets includes land, buildings, improvements, machinery and equipment, construction in progress, utility transmission /distribution systems, and roads. The major capital asset additions for governmental activities during 2012 was the construction of Park Plaza Garage and the addition of roads, traffic signals and lighting in the Bay Vista development, conveyed to the City by the developers of the plat. The major capital assets changes for business -type activities included the construction of wastewater and water capital improvement projects identified within the City's 2012 capital improvement plan. Capital Assets (net of depreciation) Amounts in 000's Governmental Activities Business -Type Activities Total 2012 2011 Difference 2012 2011 Difference 2012 2011 Difference 2012 2011 Difference Land $ 17,434 $ 17,406 $ 28 $ 9,107 $ 8,602 $ 505 $ 26,541 $ 26,008 $ 533 Buildings 46,036 47,175 (1,139) 34,557 32,530 2,027 80,593 79,705 888 Improvements/Infrastructure 26,619 25,616 1,003 92,794 91,265 1,529 119,413 116,881 2,532 Machinery and Equipment 2,987 3,344 (357) 30,948 28,857 2,091 33,935 32,201 1,734 Construction in Progress 17,167 11,651 5,516 4,294 8,708 (4,414) 21,461 20,359 1,102 TOTAL 7 110,243 $ 105,192 $ 5,051 $ 171,700 $ 169,962 $ 1,738 $ 281,943 $ 275,154 $ 6,789 Additional information on the City's capital assets can be found in Note 5. Long -term debt For governmental activities in 2012, the City refunded its 2003 LTGO bond obligation associated with the Norm Dicks Government Center (City hall), resulting in an estimated total debt savings of $1.689 million over the life of the refunded bonds. There was no additional debt issues associated with governmental activities during 2012. New debt for business -type activities in 2012 consisted of $503,004 of intergovernmental loans to fund Water /Wastewater capital improvement projects identified within the utilities' capital improvement plan. The long- term debt principal paid off in 2012 totaled $16,207,285. Outstanding Debt - General Obligation and Revenue Bonds Amounts in 000's General Obligation Bonds General Obligation Notes Revenue Bonds Revenue Loans TOTAL Governmental Activities Business -Type Activities Total 2012 2011 Difference 2012 2011 Difference 2012 2011 Difference $ 32,675 $ 34,300 $ (1,625) $ 5,058 $ 5,163 $ (105) $ 37,733 $ 39,463 $ (1,730) $ 35 $ 48 (13) $ $ - - 35 48 $ (13) - - - 3,575 3,925 (350) 3,575 3,925 $ (350) - 23,777 32,173 (8,396) 23,777 32,173 $ (8,396) $ 32,710 $ 34,348 $ (1,638) $ 32,410 $ 41,261 $ (8,851) $ 65,120 $ 75,609 $ (10,489) City of Bremerton / 21 Additional Information on the City's long -term debt can be found in Note 10 of this report. Economic Factors and Next Years Budgets and Rates Several factors that affect the economic climate in Bremerton were considered when preparing the City's 2013 annual budget. The outlook for the nation, state and region was weighed in relation to its expected impact on Bremerton. The character of the City, including its current and future business activity and its attraction as a place to live, was evaluated. The current financial position and the ability of the City to recover from its history of economic depression have improved slightly due to the major effort to rehabilitate Bremerton's downtown core and attract new investors to the community. In addition, the national, regional and local economic conditions began to show improvement during 2012; however, the impacts of federal sequestration had to be considered as it relates to the City of Bremerton. Federal sequestration, which became effective on March 1, 2013, is expected to have a minimal impact on the City's local economy. However, the City's federal subsidy to pay a portion of its Build America Bonds obligations will see a decrease of 4.35% due to federal sequestration. The City has anticipated this reduction and has compensated for this reduction in its 2013 budget. The State of Washington is continuing to face considerable budget challenges; however, the state's budget challenges have had limited effect on Bremerton's transportation capital funding received from the state. Over the past several years, Bremerton has been successful in attracting state and federal grant funds for major transportation improvement projects, including the multi -phase SR304 Bremerton Gateway transportation improvement project. Future outside funding opportunities will be highly competitive and Bremerton, due to its current economic demographics, should compete very well for certain projects. Mid- to long -term, Bremerton must increase its local revenue to address transportation needs. In an effort to do so, the Bremerton City Council, acting as the Bremerton Transportation Benefit District Board, enacted a $20 per vehicle car tab fee to be used solely for transportation projects. This fee was adopted in December 2011. The first receipts resulting from these revenues were received in 2012. Bremerton continues to move forward with its revitalization and development program that will extend to all areas of the community. The center piece project is the Bremerton Harborside Development which is designed to establish the City of Bremerton as a premier waterfront community in the Puget Sound. Of the multi -year plans to revitalize Bremerton, the following are completed as of December 2012; the Harborside Conference Center, Hotel and Plaza, Bremerton Ice Arena, Kitsap Credit Union Headquarters /Office building, downtown Naval Parking Garage, waterfront condominiums, Harborside Fountain Park and Naval Museum, downtown police station, Norm Dicks Government Center building, downtown fire station, downtown marina facility, the Downtown Pedestrian Bremerton Transit Center Access, PSNS Memorial Plaza, Fairfield Inn & Suites, downtown Municipal Courthouse, First Street Plaza and the revitalization of Lions Park. Construction of a parking garage and retail commercial pads at Burwell and Park Ave was substantially completed as of December 2012. In addition, a new multi- screen movie theater was completed during 2012 in association with the newly developed retail commercial pads. Highmark Homes LLC of Tukwila has purchased East Park, a 50 -acre hillside site in East Bremerton for development of as many as 437 housing units. If built in its entirety, the new East Park will be among the largest neighborhoods constructed in Bremerton. The entire project would be constructed in six phases, to be built out over several years. The first phase of this project is underway. Projects that are in the various stages of completion include; Bay Vista mixed use redevelopment project, the revitalization of Kiwanis park and a multi -unit apartment complex to be placed on top of the Park Plaza parking facility in the Harborside district. These projects occurring throughout Bremerton are a product of both public and private investment. Economic development is a critical component of achieving a recovery from years of economic depression and to mitigate for the revenue losses incurred over the past several years from statewide initiatives. Initiative 695 and 747 resulted in 22 / City of Bremerton losses of ongoing revenues and limited property tax growth for Washington cities, including Bremerton. These statewide initiatives have impacted current and future revenues that fund the City of Bremerton's governmental services. The ability of Bremerton to provide sufficient funding for future core government services will be impacted by the success of its economic development efforts. However, these efforts alone will be insufficient to fund these core services without the identification and implementation of additional revenue sources. In May 2012, the City began a yearlong comprehensive rate analysis on its Water, Wastewater, and Stormwater utilities, to include an analysis of its revenue and capital requirements for a minimum six year horizon. On April 3, 2013, the City completed and adopted this analysis on its three utilities, raising rates to adequately fund the operations and maintenance, capital, and the anticipated debt service needs for the three utilities over the next six years. This adopted analysis anticipates the issuance of up to a maximum of $35 million in revenue bonds. Again, the analysis adopted rate increases adequate to cover the related debt service on these bonds. Requests for information This financial report is designed to provide a general overview of the City's finances for readers with an interest in municipal finances. Questions concerning any of the information provided in this report, or requests for additional information, may be addressed to the Director of Financial Services, City of Bremerton, 345 Sixth Street, Suite 600, Bremerton, WA 98337 -1873. City of Bremerton / 23 Assets Current assets: Cash & Cash Equivalents Investments Receivables Internal balances Due from other governments Inventories Prepayments Restricted assets: Investments Special Assessments Receivable Prepayments Notes and contracts receivable: Due within one year Due in more than one year Capital assets net of depreciation Intangible Assets Other assets Total assets Deferred outflows of resources Liabilities Accounts payable and other current liabilities Employee wages payable Other accrued liabilities Custodial accounts Noncurrent liabilities Due within one year Due in more than one year Total liabilities Deferred inflows of resources Net Position Net investment in capital assets Restricted for: Tourism promotion & facilities Parking system Community development block grant Public safety Debt service Workers compensation Capital projects Unrestricted Total Net Position Statement of Net Position December 31, 2012 Primary Government Governmental Business -Type Activities Activities Total $ 4,151,469 $ 8,503,983 $ 12,655,452 5,628,710 9,977,824 15,606,534 4,540,579 4,727,087 9,267,666 255,567 (255,567) - 2,725,448 1,212,643 3,938,091 108,743 1,026,323 1,135,066 22,368 11,256 33,624 100,000 1,428,425 1,528,425 - 310,544 310,544 372,049 - 372,049 17,000 51,041 68,041 963,295 458,161 1,421,456 110,242,926 171,699,676 281,942,602 - 180,440 180,440 626,967 331,555 958,522 $ 129,755,121 $ 199,663,391 $ 329,418,512 $ 2,031,351 $ 997,261 $ 3,028,612 984,601 242,004 1,226,605 230,304 195,395 425,699 - 27,658 27,658 10,262,010 3,159,604 13,421,614 24,954,748 29,510,206 54,464,954 1,497,663 123,457 1,621,120 $ 38,463,014 $ 34,132,128 $ 72,595,142 $ 78,295,484 $ 139,494,215 $ 217,789,699 132,290 132,290 534,760 534,760 1,102,180 1,102,180 834,032 - 834,032 - 1,493,512 1,493,512 100,000 - 100,000 1,497,663 123,457 1,621,120 8,795,698 24,420,079 33,215,777 $ 91,292,107 $ 165,531,263 $ 256,823,370 See accompanying notes to the financial statements. 24 / City of Bremerton Statement of Activities For the Year Ended December 31, 2012 Business -type activities Water 8,923,134 9,169,328 3,000 7,334,469 7,583,663 Net (Expense) Revenue and Wastewater 9,943,879 13,221,055 - 834,279 Program Revenues 4,111,455 Changes in Net Position 2,271,036 2,023,310 - (247,726) Operating Capital 2,281,994 2,394,166 - 1,085,226 1,197,398 Charges for Grants and Grants and Governmental Business -Type 3,000 9,253,974 Function /Program Expenses Services Contributions Contributions Activities Activities Total Governmental activities: General government $ 2,335,832 $ 1,341,366 $ $ $ (994,466) $ $ (994,466) Public safety 23,177,212 2,831,808 90,617 92,206 (20,162,581) (20,162,581) Utilities and environment 219,560 90,492 - - (129,068) (129,068) Transportation 4,206,821 1,516,736 - 5,981,226 3,291,141 3,291,141 Economic environment 1,865,434 518,050 587,247 - (760,137) (760,137) Culture and recreation 6,061,443 1,849,414 - 773,816 (3,438,213) (3,438,213) Interest on long -term debt 1,172,255 - - - (1,172,255) (1,172,255) Total governmental activities 39,038,557 8,147,866 677,864 6,847,248 (23,365,579) (23,365,579) Business -type activities Water 8,923,134 9,169,328 3,000 7,334,469 7,583,663 7,583,663 Wastewater 9,943,879 13,221,055 - 834,279 4,111,455 4,111,455 Golf course 2,271,036 2,023,310 - (247,726) (247,726) Other proprietary funds 2,281,994 2,394,166 - 1,085,226 1,197,398 1,197,398 Total business-type activities 23,420,043 26,807,859 3,000 9,253,974 12,644,790 12,644,790 Total government S 62,458,600 S 34,955,725 S 680,864 S 16,101,222 S (23,365,579) S 12,644,790 S (10,720,789) General Revenues Taxes Property Sales Business Utility Other Unrestricted investment interest Miscellaneous Gain/(Loss) on disposal of capital assets Transfers, internal activities Total general revenues and transfers 8,578,750 - 8,578,750 7,295,954 16,201 7,312,155 3,256,913 1,120 3,258,033 4,407,473 - 4,407,473 2,679,142 - 2,679,142 169,186 252,650 421,836 348,083 380,319 728,402 (29,125) 50,691 21,566 4,462,373 (4,462,373) - 31,168,749 (3,761,392) 27,407,357 Change in net position Net position - beginning Prior period adjustment Net position - ending 7,803,170 8,883,398 16,686,568 83,488,937 156,856,948 240,345,885 - (209,083) (209,083) $ 91,292,107 S 165,531,263 S 256,823,370 See accompanying notes to the financial statements. City of Bremerton / 25 Balance Sheet Governmental Funds December 31, 2012 Liabilities and Fund Balances Liabilities: Accounts /contracts payable $ 629,091 $ Other Total Due to other funds 292,254 Governmental Governmental Due to other governments General Funds Funds Assets 857,036 51,210 908,246 Cash & Cash Equivalents $ 1,242,602 $ 1,680,761 $ 2,923,363 Investments 2,293,821 1,787,651 4,081,472 Receivables 3,776,224 760,169 4,536,393 Due from other funds 1,093,551 69,254 1,162,805 Due from other governments 3,836 2,678,445 2,682,281 Inventories 18,418 - 18,418 Notes /contracts - deferred - 980,295 980,295 Total assets $ 8,428,452 $ 7,956,575 $ 16,385,027 Liabilities and Fund Balances Liabilities: Accounts /contracts payable $ 629,091 $ 1,037,367 $ 1,666,458 Due to other funds 292,254 637,208 929,462 Due to other governments 30,980 67 31,047 Employee wages payable 857,036 51,210 908,246 Other current liabilities 25,303 205,000 230,303 Deferred revenues 1,991,118 1,347,427 3,338,545 Total liabilities 3,825,782 3,278,279 7,104,061 Fund balances: Nonspendable 18,418 - 18,418 Restricted 20,562 2,786,592 2,807,154 Committed - 313,984 313,984 Assigned 545,168 1,577,720 2,122,888 Unassigned 4,018,522 - 4,018,522 Total fund balances 4,602,670 4,678,296 9,280,966 Total liabilities and fund balances $ 8,428,452 $ 7,956,575 $ 16,385,027 Amounts reported for governmental activities in the statement of nets position are different because: Capital assets used in governmental activities are not financial resources 110,242,926 and therefore not reported in the funds. Other long -term assets are not available to pay for current - period 4,011,661 expenditures and therefore are deferred in the funds. Internal service funds are used by management to charge the costs of certain activities to individual funds. 2,259,197 These assets and liabilities are included in governmental activities in the statement of net assets. Long -term liabilities are not due and payable in the current period and therefore are not reported in the (34,502,643) funds. Net position of governmental activities $ 91,292,107 See accompanying notes to the financial statements. 26 / City of Bremerton Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds For the Year Ended December 31, 2012 Expenditures Other Governmental Current General Governmental Funds General government Fund Funds Total Revenues 20,890,868 270,999 21,161,867 Taxes 219,560 - 219,560 Property $ 7,778,202 $ 780,968 $ 8,559,170 Sales 6,956,360 756,725 7,713,085 Business 7,056,312 476,664 7,532,976 Other 243,497 427,807 671,304 Licenses and permits 867,468 265,833 1,133,301 Intergovernmental 1,259,048 5,702,323 6,961,371 Charges for services 6,166,734 434,854 6,601,588 Fines and forfeits 1,214,619 277,594 1,492,213 Miscellaneous 451,212 1,534,623 1,985,835 Total revenues 31,993,452 10,657,391 42,650,843 Expenditures Current - 5,215,000 5,215,000 General government 5,890,386 205,666 6,096,052 Public safety 20,890,868 270,999 21,161,867 Utilities and environment 219,560 - 219,560 Transportation 1,943,232 2,476,198 4,419,430 Economic environment 1,161,787 729,740 1,891,527 Mental /physical health 69,963 - 69,963 Culture and recreation 3,989,361 541,572 4,530,933 Debt service: Principal 70,000 1,388,239 1,458,239 Interest and other debt issue costs 136,591 1,003,525 1,140,116 Capital Outlay 131,725 5,576,624 5,708,349 Total expenditures 34,503,473 12,192,563 46,696,036 Excess (deficiency) of revenues over expenditures (2,510,021) (1,535,172) (4,045,193) Other financing sources (uses) Proceeds of long term debt - 5,215,000 5,215,000 Premiums on Bonds Sold - 122,033 122,033 Payments to refunded debt escrow agent (102,619) (5,551,195) (5,653,814) Insurance recoveries 349 - 349 Transfers in 4,647,514 1,427,176 6,074,690 Transfers out (839,999) (772,317) (1,612,316) Total other financing sources and uses 3,705,245 440,697 4,145,942 Other changes in fund balance Change in reserves for inventory - (23,264) (23,264) Net change in fund balances 1,195,224 (1,117,739) 77,485 Fund balances- beginning 3,407,446 5,796,035 9,203,481 Fund balances - ending $ 4,602,670 $ 4,678,296 $ 9,280,966 See accompanying notes to the financial statements. City of Bremerton / 27 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities For the Year Ended December 31, 2012 Amounts reported for governmental activities in the statement of activities are different because: Net change in fund balances — total government funds $ 77,485 Governmental funds report capital outlays as expenditures, however, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlays exceeded depreciation in the current period. 5,055,785 Revenues and expenses in the statement of activities that do not provide current financial resources are not reported in the funds. (156,085) The issuance of long -term debt (e.g. bonds) provides current financial resources to governmental funds, while the repayment of the principal of long -term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net assets. Also, governmental funds report the effect of issuance costs, premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. This amount is the net effect of these differences in the treatment of long -term debt and related items. 1,780,824 Internal service funds are used by management to charge the costs of fleet replacement and risk management to individual funds. The net revenue of certain activities of internal service funds is reported with governmental activities. 1,045,161 Change in net position of governmental activities $ 7,803,170 See accompanying notes to the financial statements. 28 / City of Bremerton Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual General Fund For the Year Ended December 31, 2012 Revenues Taxes Licenses and permits Intergovernmental Charges for services Fines and forfeits Other Revenues Total revenues Expenditures City Council Executive Finance Legal Human Resources Community Development Municipal Court City Auditor Law Enforcement Fire/Emergency Medical Services Police & Fire Pension Facilities Parks & Recreation Engineering Non - Departmental Total expenditures Excess (deficiency) of revenues over expenditures Fund balances - beginning Fund balances - ending Adjustment to reflect consolidation of Contingency Reserve and Conference Center funds included in the Statement of Revenues, Expenditures and Changes in Fund Balances for Governmental Funds Fund Balances Ending Expenditures Personnel Supplies, services & taxes Capital expenditure Debt Service Transfers Total expenditures $ 21,968,900 $ Variance with Original Final Final Budget Budget Budget Actual Positive 2012 2012 2012 (Negative) $ 21,968,900 $ 21,968,900 $ 22,034,371 $ 65,471 917,625 917,625 867,468 (50,157) 1,217,648 1,222,786 1,259,048 36,262 5,284,900 5,284,900 4,980,811 (304,089) 1,133,730 1,133,730 1,214,619 80,889 4,851,359 5,053,359 4,815,285 (238,074) 35,374,162 35,581,300 35,171,602 (409,698) 332,770 332,770 323,799 8,971 370,360 370,360 359,142 11,218 1,149,840 1,153,840 1,077,938 75,902 971,550 981,650 902,601 79,049 333,210 398,010 305,250 92,760 1,408,536 1,408,536 1,161,787 246,749 1,294,187 1,294,187 1,251,646 42,541 170,960 170,960 166,714 4,246 9,498,837 9,598,837 9,090,504 508,333 8,311,214 8,413,452 8,346,964 66,488 2,544,000 2,544,000 2,178,153 365,847 807,117 970,117 790,417 179,700 2,593,741 2,608,741 2,515,992 92,749 2,134,928 2,137,328 1,943,232 194,096 3,461,171 3,783,811 3,557,844 225,967 35,382,421 36,166,599 33,971,983 2,194,616 (8,259) (585,299) 1,199,619 1,784,918 2,249,115 3,109,766 2,926,983 (182,783) $ 2,240,856 $ 2,524,467 $ 4,126,602 $ 1,602,135 $ 476,068 $ 4,602,670 26,436,100 26,636,500 25,458,332 1,178,168 7,755,016 7,977,942 7,232,717 745,225 55,000 300,852 131,725 169,127 411,305 411,305 309,209 102,096 725,000 840,000 840,000 - 35,382,421 36,166,599 33,971,983 2,194,616 See accompanying notes to the financial statments_ City of Bremerton / 29 Statement of Net Position Proprietary Funds December 31, 2012 Noncurrent assets: Business -type Activities Net investment in capital assets Governmental Notes and contracts receivable 458,161 - Enterprise Funds - 458,161 - Activities 67,306 - Golf 67,306 Nonmajor Prepaid pension Internal - Water Course Wastewater Enterprise Funds Total Service Funds Assets 5,271,284 167,934,199 3,771,635 Other noncurrent assets 331,571 21,003 159,421 Current assets: - Total noncurrent assets 60,850,652 7,498,688 95,351,037 5,271,284 168,971,661 Cash & Cash Equivalents $ 2,293,076 $ 135,929 $ 2,692,198 $ 887,267 $ 6,008,470 $ 3,723,619 Restricted investments 46,222 - 1,382,203 - $ 1,428,425 100,000 Investments 3,029,443 182,320 2,228,797 1,190,074 6,630,634 4,894,428 External receivables 1,493,833 1,252 2,473,695 801,016 4,769,796 - Restricted special assesments rec 243,238 - - - 243,238 - Interest receivable 2,247 132 2,639 870 5,888 3,650 Due from other funds 216,825 820 30,907 47,049 295,601 303,323 Due from other governments - - 530,077 682,566 1,212,643 - Inventories 676,185 236,941 350,138 - 1,026,323 90,325 Prepayments 11,256 - - - 11,256 61,016 Total current assets 8,012,325 320,453 9,690,654 3,608,842 21,632,274 9,176,361 Noncurrent assets: Net investment in capital assets 55,082,247 Notes and contracts receivable 458,161 - - - 458,161 - Restricted special assessments rec 67,306 - - 67,306 - Prepaid pension - - - - 333,401 Capital assets net of depreciation 59,993,614 7,477,685 95,191,616 5,271,284 167,934,199 3,771,635 Other noncurrent assets 331,571 21,003 159,421 - 511,995 - Total noncurrent assets 60,850,652 7,498,688 95,351,037 5,271,284 168,971,661 4,105,036 Total assets $ 68,862,977 $ 7,819,141 $ 105,041,691 $ 8,880,126 $ 190,603,935 $ 13,281,397 Deferred outflows of resources Bonds payable from restricted assets 41,000 - - - Liabilities Net investment in capital assets 55,082,247 2,623,729 72,869,849 Current liabilities: Restricted for capital assets - - 123,457 - 123,457 100,000 Restricted for debt service 234,766 Accounts/contractpayable $ 293,450 $ 50,543 $ 226,680 $ 302,771 $ 873,444 $ 219,086 Due to other funds 106,946 268,846 330,307 98,224 804,323 27,946 Employee wages payable 117,675 - 96,100 28,229 242,004 76,355 Other accrued liabilities 97,138 - 95,890 2,367 195,395 440,367 Current portion of long term debt 593,961 79,495 2,431,971 13,177 3,118,604 2,803 Bonds payable from restricted assets 41,000 - - - 41,000 - Custodial accounts 27,158 - - 500 27,658 - Total current liabilities 1,277,328 398,884 3,180,948 445,268 5,302,428 766,557 Noncurrent liabilities: Claims and judgements payable - - - - - 451,818 Bonds, notes and loans payable 4,210,663 4,774,461 19,900,775 108,507 28,994,406 - Bonds payable from restricted assets 81,000 - - 81,000 - Compensated absences 236,941 - 152,198 45,661 434,800 57,705 Total noncurrent liabilities 4,528,604 4,774,461 20,052,973 154,168 29,510,206 509,523 Total liabilities $ 5,805,932 $ 5,173,345 $ 23,233,921 $ 599,436 $ 34,812,634 $ 1,276,080 Deferred inflows of resources Net Position Net investment in capital assets 55,082,247 2,623,729 72,869,849 5,152,913 135,728,738 - Restricted for capital assets - - 123,457 - 123,457 100,000 Restricted for debt service 234,766 - 1,258,746 - 1,493,512 - Unrestricted 7,740,032 22,067 7,555,718 3,127,777 18,445,594 11,905,317 Total net position $ 63,057,045 $ 2,645,796 $ 81,807,770 $ 8,280,690 $ 155,791,301 $ 12,005,317 Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds 9,739,962 Net position of business -type activities $ 165,531,263 See accompanying notes to the filiancial statements. 30 / City of Bremerton Operating revenues: Charges for services Interest & dividend income Other operating revenue Total operating revenues Operating expenses: General operations Maintenance Customer service and marketing General administration Depreciation and amortization Property, excise and B &O taxes Risk transfer payments Payments to claimants & beneficiaries Other operating expenses Total operating expenses Operating income (loss) Nonoperating revenues (expenses) Business -type Activities Governmental Enterprise Funds Activities Nonmajor Golf Enterprise Internal Water Course Wastewater Funds Total Service Funds $ 8,686,057 $ - 486,271 1,944,690 - 78,620 S 13,238,376 S - - 2,214,871 - 179,295 S 26,083,994 S - 744,186 4,186,548 18,681 36,133 9,172,328 2,023,310 13,238,376 2,394,166 26,828,180 4,241,362 1,690,868 618,813 2,754,754 631,112 5,695,547 2,818,661 2,802,721 1,083,948 1,880,542 1,148,106 6,915,317 - 368,325 - 225,366 116,745 710,436 - 951,271 114,011 907,542 245,279 2,218,103 307,585 1,770,790 397 175 161,469 9 159 3,244,600 391258 96,564 39 257 5,273,423 836 849 551,038 452,151 (425,481) 452,926 - - - 452,926 51,174 8,434,076 1,987,400 9,404,062 2,277,063 22,102,601 3,755,128 738,252 35,910 3,834,314 117,103 4,725,579 486,234 Interest and investment revenue 99,329 4,196 68,681 21,157 193,363 66,520 Interest expense (127,380) (207,523) (422,036) (4,931) (761,870) - Gain (loss) on capital asset disposal (8,360) 6,115 52,936 - 50,691 (10,671) Other nonoperating revenue/expense 344,223 - 35,888 208 380,319 6,793 Total nonoperating revenues (expenses) 307,812 (197,212) (264,531) 16,434 (137,497) 62,642 Income (loss) before contributions and transfers 1,046,064 (161,302) 3,569,783 133,537 4,588,082 548,876 Capital contributions 7,334,469 834,279 1,085,226 9,253,974 - Transfers out (1,310,542) (2,699,404) (452,427) (4,462,373) - Change in net assets 7,069,991 (161,302) 1,704,658 766,336 9,379,683 548,876 Total net position - beginning 56,169,570 2,807,098 80,118,331 7,525,702 11,456,441 Prior period adjustment (182,516) - (15,219) (11,348) - Total net position - ending S 63,057,045 S 2,645,796 S 81,807,770 S 8,280,690 $ 12,005,317 Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds (496,285) Change in net position of business-type activities $ 8,883,398 Statement of Revenues, Expenses and Changes in Fund Net Position Proprietary Funds For the Year Ended December 31, 2012 See accompanying notes to the financial statements. City of Bremerton / 39 Statement of Cash Flows Proprietary Funds For the Year Ended December 31, 2012 Page 1 of 2 Business -type Activities Enterprise Funds Cash Flows From Operating Activities Cash received from customers Interest on investments Cash payments to Suppliers Cash payments to employees Purchase of insurance Payment for insurance claims Other operating receipts and payments Net cash provided by operating activities Cash Flows From Noncapital Financing Activities Transfers out Other nonoperating revenueS /expenses Net cash provided (Used) by noncapital financing activities Cash Flows From Capital and Related Financing Activities AcgUisition and construction of capital assets Proceeds /costs on sale of assets Capital contributions 111SUrance recoveries Collections on notes receivable Loan/grant proceeds Principal paid on bonds Principal paid on other debt Interest paid on bonds and other debt Net cash provided (Used) for capital and related financing activities Water Golf Course Wastewater Nonmajor Enterprise Funds Total $ 8,668,272 $ 1,944,038 $ 13,195,287 $ 2,053,269 $ 25,860,866 (3,526,449) (1,813,536) (3,677 16) (1,080,686) (10,097 ,787) (3,422,843) Interest on loans and investments (2,396,244) (808,447) (6,627,534) 484,076 78,743 - 111,996 674,815 2,203,056 209,245 7,121,927 276,132 9,810,360 Governmental Activities Internal Service Funds $ 4,169,915 19,366 (1,982,631) (1,213,353) (411,256) (403,726) 53,238 231,553 (1,310,764) (2,632,486) (445,229) (4,388,479) - 320,431 34,620 208 355,259 7,613 (990,333) (2,597,866) (445,021) (4,033,220) 7,613 (1,091,792) (295,459) (5,048,994) (198,769) (6,635,014) (142,603) - 5,295 - - 5,295 24,050 476,351 - 434,103 42,798 953,252 - 1,359 Interest on loans and investments 225,000 - 226,359 82,397 - - - 82,397 519,504 261,000 222,445 202,690 1,205,639 (41,000) (105,000) (334,000) - (480,000) (578,705) (2,100,057) (9,864) (2,688,626) (115,778) (180,707) (428,939) (5,129) (730,553) (747,664) (314,871) (7,030,442) 31,726 (8,061,251) (118,553) Cash Flows From Investing Activities Proceeds from repayment of loans 12,233 - - - 12,233 87,592 Net change in investments 698,022 144,787 3,201,746 519,605 4,564,160 1,791,142 Issuance ofinterfand loans - - - - - (261,000) Interest on loans and investments 52,387 4,421 73,481 22,154 152,443 69,593 Net cash provided (Used) in investing activities 762,642 149,208 3,275,227 541,759 4,728,836 1,687,327 Net increase (decrease) in cash and cash equivalents 1,227,701 43,582 768,846 404,596 2,444,725 1,807,940 Cash -beginning of year 1,065,375 92,347 1,923,352 482,671 3,563,745 1,915,679 Cash - end of year $ 2,293,076 $ 135,929 $ 2,692,198 $ 887,267 $ 6,008,470 $ 3,723,619 Cash at the end of the year consists of: Operating fiord cash Restricted cash Total cash at end of year 2,293,076 135,929 2,692,198 887,267 6,008,470 3,723,619 $ 2,293,076 $ 135,929 $ 2,692,198 $ 887,267 $ 6,008,470 $ 3,723,619 See accompanying notes to the financial statements. 32 / City of Bremerton Statement of Cash Flows Proprietary Funds For the Year Ended December 31, 2012 Page 2 of 2 Business -type Activities Governmental Enterprise Funds Activities Nonmajor Golf Enterprise Internal Noncash investing, capital and financial activities; Developers contributed infrastructure $ 647,699 $ $ 400,176 $ 455,542 $ 1,503,417 $ Forgiven D W SRF ARRA Principle Loan $ 6,210,419 $ $ $ $ 6,210,419 $ See accompanying notes to the financial statements. Water Course W astewater Funds Total Sei vice Funds Reconciliation of operating income to net cash provided by operating activities: Operating income (loss) $ 738,252 $ 35,910 $ 3,834,314 $ 117,103 $ 4,725,579 $ 486,234 Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation 1,770,790 161,469 3,244,600 96,564 5,273,423 551,038 Decrease (increase) in receivables (75,622) 244 (46,158) (167,183) (288,719) 685 Decrease (increase) in due from other funds /govt (32,032) 1,107 25,725 (60,783) (65,983) 6,406 Decrease (increase) in prepaid expenses 5,032 - - 5,032 55,245 Decrease (increase) in inventory (11,256) - - - (11,256) (15,395) Increase (decrease) in accounts payable (78,229) 29,729 35,460 258,070 245,030 3,857 Increase (decrease) in due to otherfunds/govt (22,698) (15,941) 65,365 45,798 72,524 19,633 Increase (decrease) in employee wages payable (34,564) (176,464) (5,582) (216,610) (25,638) Increase (decrease) in employee leaves payable (51,025) 141,546 (7,855) 82,666 (7,120) Increase (decrease) in other payables (5,592) (3,273) (2,461) - (11,326) (843,392) Net cash provided by operating activities $ 2,203,056 $ 209,245 $ 7,121,927 $ 276,132 $ 9,810,360 $ 231,553 Noncash investing, capital and financial activities; Developers contributed infrastructure $ 647,699 $ $ 400,176 $ 455,542 $ 1,503,417 $ Forgiven D W SRF ARRA Principle Loan $ 6,210,419 $ $ $ $ 6,210,419 $ See accompanying notes to the financial statements. City of Bremerton / 33 Statement of Fiduciary Net Position Fiduciary Funds As of December 31, 2012 Agency Funds Assets Cash and cash equivalents $ 288,865 Interfund receivables 2 Total assets $ 288,867 Deferred outflows of resources $ - Liabilities Accounts /contracts payable 47,611 Other current liabilities 241,256 Total liabilities $ 288,867 Deferred inflows of resources $ - Net Position $ - See accompanying notes to the financial statements. 34 / City of Bremerton THIS PAGE LEFT BLANK INTENTIONALLY. City of Bremerton / 35 Notes to Financial Statements January 1, 2012 — December 31, 2012 1. Summary of significant accounting policies The financial statements of the City of Bremerton have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for establishing governmental accounting and financial reporting principles. A. Reporting Entity The City of Bremerton was incorporated on October 14, 1901 and operates under the laws of the State of Washington applicable to a home -rule charter city with a Council /Mayor form of government. The City is a general purpose government which provides police, fire, water, wastewater, street maintenance, parks and recreation, planning and zoning, municipal court and general governmental services to its citizens. As required by GAAP, the financial statements present the City, the primary government, and its component units. The component units discussed below are included in the City's reporting entity because of the significance of their operational or financial relationships with the City. In 2009, the City established the Bremerton Transportation Benefit District that meets the criteria of a component unit. See Note 7 for discussion of the Bremerton Transportation Benefit District. Financial Statements for this unit were not included for fiscal years prior to 2012 as no fees had been enacted nor transportation improvements funded. B. Government -wide and fund financial statements The government -wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the non - fiduciary activities of the City (and its component units). For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business -type activities, which rely to a significant extent on fees and charges for support. The statement of activities demonstrates the degree to which the direct expenses of a given function are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function. Our policy is to not allocate indirect costs to a specific function. Program revenues are those items that are applicable to customers who purchase, use, or directly benefit from goods, services, or privileges provided by a given function. Grants and contributions that are restricted to meeting the operational or capital requirement of a particular function are also included. Taxes and other items not properly included among program revenues are reported instead as general revenues. Separate fund financial statements are provided for governmental funds, proprietary funds, and fiduciary funds. Fiduciary funds, however, are excluded from the government -wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. C. Measurement focus, basis of accounting, and financial statement presentation The government -wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the city considers revenues to be available if they are collected within 30 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as 36 / City of Bremerton under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Property taxes, fines and certain receivables for services provided are associated within the current period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Only the portion of special assessment receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period. All other revenue items are considered to be measurable and available only when cash is received 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 and transactions except those required to be accounted and reported for in another fund. The City reports the following major proprietary funds: The water and wastewater funds account for activities related to the ongoing operations of the City's water and sewer systems. The golf course fund accounts for the operations and maintenance of the City owned Gold Mountain Golf Course. Additionally, the City reports the following fund types: Debt Service Funds account for the resources accumulated and payments made for principal and interest on general obligation debt except those required to be accounted for in another fund. Special Revenue Funds account for the proceeds of specific revenue sources to finance specific activities as required by law or administrative regulation. Their revenues are earmarked to finance certain activities or functions. Capital Project Funds account for the acquisition or development of capital facilities for governmental activities. Their major sources of revenues are from proceeds from general obligation bonds, loans, real estate excise tax, impact fees, grants from other agencies and contributions from other funds. Nonmajor Enterprise funds account for the operations, maintenance and capital additions of the City's stormwater utility. Internal service funds account for the accumulation of funds used to repair City vehicles and equipment and to replace them at the end of their useful lives. Funds are also accumulated for the purpose of carrying out the city's Risk Management, Information Technology Services, Unemployment and Employee leave payout activities. In all cases, City departments contribute according to the benefit provided by each fund. Agency funds account for assets held by a government as an agent for individuals, private organizations, other governments, and /or other funds. All funds are used for custodial or clearing purposes. The City eliminates the effect of interfund activity from the government -wide financial statements. There are some exceptions to this rule such as charges between the utility function and other functions within the City, and any payments -in -lieu of taxes. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Amounts reported as program revenues include charges to customers, special assessments, operating grants and contributions and capital grants and contributions. General revenues include all taxes. Proprietary funds distinguish operating revenues and expenses from non - operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. Operating revenues includes charges for services rendered for water, sewer, stormwater as well as golf fees and timber revenues. Operating expenses include administration, operations and maintenance expenses and depreciation on capital assets. All revenues and expenses not falling into the above broad categories are reported as non - operating revenues and expenses. City of Bremerton / 37 D. Budgetary Information 1. Scone of Budget Annual appropriated budgets are adopted for all funds except fiduciary fund types. All appropriations lapse at the end of each year. The budget is prepared using a basis of accounting substantially the same as the GAAP basis used in accounting for governmental funds. The budgetary basis of accounting differs from generally accepted accounting principles. The city budgets the Contingency Reserve and Conference Center activities as if they were special revenue funds. However, GAAP requires these activities to be reported with the General fund. The Conference Center fund does not have a significant stream of restricted resources and under GAAP the Contingency Reserve fund was established for a specific purpose, stabilization, which should be included in the General fund. From a budgetary perspective, the city budgets for each of these funds separate from the General fund. The budgetary comparison for the General Fund does not include the managerial funds. 2. Amending the Budget The City's budget is adopted at the department and category group level. The five distinct category groups are 1) Personnel, 2) Supplies, Services and Taxes, 3) Debt Service, 4) Capital Expenditures and 5) Transfers. Expenditures may not legally exceed appropriations at that level of detail. The Mayor may authorize a one -time transfer of less than $10,000 between category groups within a department. All other revisions within a fund or any revisions that alter the total expenditures of a fund, or affect the number of authorized employee positions or salary ranges must be approved by the City Council. The City's budget was amended two times in 2012. The financial statements contain the original and final budget information. The original budget is the first complete appropriated budget. The final budget is the original budget adjusted by all supplemental appropriations authorized for the fiscal year. E. Assets, Liabilities and Net Assets 1. Cash and Cash Eauivalents It is the City's policy to invest all temporary cash surpluses. At December 31, 2012, the City was holding $8,756,667 in short-term residual investments of surplus cash. This amount is classified on the balance sheet as cash and cash equivalents in various funds. The interest on these investments is prorated to the various funds. The amounts reported as cash and cash equivalents also include compensating balances maintained with the City's bank in lieu of payments for services rendered. The average compensating balance maintained during 2012was $5,327,111. For purposes of the statement of cash flows, the City considers all highly liquid investments (including restricted assets) with a maturity of three months or less when purchased to be cash equivalents. 2. Investments - See Note 3 Deposits and Investments. 3. Receivables External receivables consist of property, B &O, utility, sales and parking taxes as well as other revenues earned by the City from the County, State and other taxpayers but not yet received. Also included are customer accounts receivable which consist of amounts owed from private individuals or organizations for goods and services including amounts owed for which billings have not been prepared. Special assessments are recorded when levied. Special assessments receivable consist of current and delinquent assessments and related interest and penalties. Deferred assessments on the fund financial statements consist of unbilled special assessments that are liens against the property benefited. As of December 31, 2012, $193,396 of special assessments receivable were delinquent. The amounts reported as notes and contracts receivable primarily represents housing rehabilitation loans resulting from the federal Department of Housing and Urban Development Community Development Block Grant programs. Deferred notes and contracts on the fund financial statement consist of outstanding loan balances that are liens against the property 38 / City of Bremerton benefited and the note receivable from property sold. An indeterminate portion of the Block Grant loans will be forgiven if certain qualifying conditions are met by the loan recipients. 4. Amounts Due To and From Other Funds and Governments Amounts due to and from other funds include interfund loans receivable /payable as well as outstanding balances that have resulted from the provision of services between funds as well as corrections of prior transactions. Any residual balances outstanding between the governmental activities and business -type activities are reported in the government - wide financial statements as internal balances. A summary schedule of interfund loans receivable and payable is furnished in Note 14. 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. 5. Inventories Inventories in governmental funds consist of expendable supplies held for consumption. The cost is recorded as expenditure at the time individual inventory items are purchased. The portion of fund balance not available for future expenditure is included in the nonspendable category of fund balance. A comparison to market value is not considered necessary. In proprietary funds, a perpetual inventory is maintained, in which the cost is capitalized when inventory items are purchased, and expensed when the item is consumed. Inventory is recorded by the FIFO (first in first out) method which approximates market value. 6. Restricted Assets and Liabilities These accounts contain resources for programs, construction, replacement, and debt service, including current and delinquent special assessments receivable in enterprise funds. Related liabilities are shown as Payable from Restricted Assets. Specific debt service reserve requirements are described in Note 10, Long -Term Debt. Restricted assets are composed of the following: Governmental type:' Investlments -Workers compensation $ 100,000 Prepaid Pension- Workers Compensation 372,049 Total governmental $ 472,049 Investiments -Debt service $ 1,304,968 Investiments - Construction 123,457 Receivables -Debt service 310,544 Totalbusiness $ 1,738,969 7. Capital Assets. See Note 5, Capital Assets. Capital assets, which include property, plant, equipment and infrastructure assets, (e.g., roads, bridges, sidewalks, and similar items) are reported in the applicable governmental or business -type columns in the government -wide financial statements. Capital assets are defined by the City as assets with an initial, individual cost of more than $10,000 and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. Costs for additions or improvements to capital assets are capitalized when they increase the effectiveness or efficiency of the asset. The cost of normal maintenance and repairs are not capitalized. City of Bremerton / 39 Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of the capital assets of business -type activities is not included as a part of the capitalized value of the assets constructed. Property, plant and equipment of the City are depreciated using the straight line method over the following estimated useful lives: Buildings 50 Years Improvements Other than Buildings — Governmental Assets 20 Years Improvements Other than Buildings — Proprietary Assets 50 Years Infrastructure 10 -15 Years Plant Machinery and Equipment 20 Years Furniture and Fixtures 20 Years Vehicles and Similar Equipment 10 Years Data Processing/Electronic Equipment 5 Years 8. Other Noncurrent Assets This account reflects various non - current assets of the City including utility water rights, standing timber purchased under the City's utility land management plan, the unamortized portion of debt issuance costs and the city's negative net pension obligation. 9. Compensated Absences It is the City's policy to permit employees to accumulate earned but unused vacation, compensatory time, and sick leave benefits. The City records a liability for all outstanding vacation pay. The payment is based on current wages at termination. Employees with the required length of service may receive cash payouts for all accumulated vacation leave. Maximum vacation payout is dependent on which labor group covers a specific employee based on the following chart: Employee Group Teamsters IAFF Local 437 (firefighters) Police Guild Police Management Non - represented personnel Maximum Vacation Cash Out 240 hours 315 hours 360 hours 300 hours 240 hours Non - exempt employees may request compensatory time off in lieu of overtime payment. Unused compensatory time is cashed out upon termination based on wages at that time. The City records a liability for all outstanding compensatory time. Compensatory time is accrued at a rate of one and one -half hours for each hour of overtime worked up to the following maximums allowed: Employee Group Teamsters IAFF Local 437 (shift personnel) IAFF Local 437 (non -shift personnel) Police Guild Maximum Compensatory Time Cash Out 40 hours 275 hours 209 hours 60 hours Compensatory time may be carried over from year to year. Upon resignation, employees not eligible for retirement do not receive any compensation for unused sick leave. Employees that meet the eligibility criteria for service retirement may receive cash payouts of 35% of unused sick leave up to the maximum allowed based on the following: 40 / City of Bremerton Employee Group Teamsters IAFF Local 437 (shift firefighters) IAFF Local 437 (non -shift personnel) Police Guild Police Management Non - represented personnel Maximum Sick Leave Cash out 35% of 960 hours (336 hours max) 35% of 1440 hours (504 hours max) 35% of 1166 hours (408 hours max) 35% of 1200 hours (420 hours max) 35% of 1200 hours (420 hours max) 35% of 960 hours (336 hours max) The City records a liability for sick leave for all personnel that meet the eligibility criteria for retirement. The payment is based on current wages at time of retirement. The entire eligible compensated absence liability is reported on the government -wide financial statements. In the proprietary funds, the entire amount of compensated absences is reported as a fund liability. 10. Other Current/Accrued Liabilities These accounts on the fund statements include deposits payable held on open contracts as well as the current portion of claims and judgments payable. 11. Long -term Debt See Note 10, Long -Term Debt. 12. Deferred Revenue This account includes amounts recognized as receivables but not revenues in governmental funds because the revenue recognition criteria have not been met. 13. Fund Balance Classification. Details. and Minimum Fund Balance In the fund financial statements, governmental funds report fund balances based on the extent to which the City is bound to observe constraints on the use of the governmental funds' resources. Fund balances are classified in the following manner: Nonspendable — includes amounts that are either 1) not in spendable form, or 2) legally or contractually required to be maintained intact. Inventories, prepaid items and permanent trust are classified as nonspendable fund balances. Restricted — includes amounts which are constrained for specific purposes that are 1) externally imposed by creditors, grantors, contributors, or laws or regulations of other governments, or 2) imposed by law through enabling legislation. Committed — includes amounts that can be used for specific purposes with constraints imposed by formal action of the highest level of decision - making authority. The authorization specifying the purposes for which committed funds can be used should have the consent of both the legislative and executive branches of government. The City operates under a Mayor - Council form of government. As Executive Officer, the Mayor supervises the administrative process of the City and works with the City Council. The City Council enacts ordinances and resolutions that may impose, modify or rescind fund balance commitments. Assigned — includes amounts that are intended to be used for specific purposes, but are neither restricted nor committed. The authority for assignment of funds is not required to be the government's highest level of decision making authority. Furthermore, the constraints imposed on the use of assigned amounts are more easily removed or modified than those imposed on committed fund balances. The City Council may authorize executive officers to assign fund balances for specific purposes through Council ordinances and resolutions. Unassigned — includes amounts that are not assigned to other funds and do not meet the criteria for being classified as restricted, committed, or assigned. Fund balances that can be utilized for economic stabilization, emergencies and contingencies that do not qualify as restricted or committed are reported as unassigned. City of Bremerton / 41 When both restricted and unrestricted resources are available for use, it is the City's policy to use restricted resources first, then unrestricted resources as needed. Under the default policy provided in GASB 54, unrestricted resources are reduced in the following order when expenditures are incurred for purposes for which amounts in any of those unrestricted fund balance classifications could be used: committed amounts are reduced first, followed by assigned amounts, and then unassigned. A minimum fund balance policy has been established by the City Council that establishes target year end operating cash and investment balances as a percentage of budgeted operating expenditures for the City's General, Water, Wastewater, Stormwater and Golf Course funds. The following table shows the status at December 31, 2012. Target Target Balance Fund Rate Balance 12/31/2012 General General Other 2,944,778 Water Fund Funds Total Fund balances: 12% 1,474,417 4,468,903 Nonspendable: 12% 282,592 1,518,811 Inventory $ 18,418 $ 18,418 Restricted for: Tourism promotion & facilities 20,562 111,728 132,290 Parking system 218,834 218,834 Community development block grant 251,885 251,885 Public safety 833,699 833,699 Debt service 2,810 2,810 Capital projects 1,367,636 1,367,636 Committed to: Employee Wellness 6,637 6,637 Parks 33,594 33,594 Public Access Television 182,706 182,706 Public safety 39,303 39,303 Public art 51,744 51,744 Assigned to: 2013 Budget 545,168 545,168 Street Operations 387,331 387,331 Tourism promotion & facilities 23,486 23,486 Building Abatement 248,229 248,229 Court Improvement 4,223 4,223 Debt Service 237,363 237,363 Park Capital 564,670 564,670 Capital Improvements 112,418 112,418 Unassigned: 4,018,522 4,018,522 Total Fund Balances $ 4,602,670 $ 4,678,296 $ 9,280,966 When both restricted and unrestricted resources are available for use, it is the City's policy to use restricted resources first, then unrestricted resources as needed. Under the default policy provided in GASB 54, unrestricted resources are reduced in the following order when expenditures are incurred for purposes for which amounts in any of those unrestricted fund balance classifications could be used: committed amounts are reduced first, followed by assigned amounts, and then unassigned. A minimum fund balance policy has been established by the City Council that establishes target year end operating cash and investment balances as a percentage of budgeted operating expenditures for the City's General, Water, Wastewater, Stormwater and Golf Course funds. The following table shows the status at December 31, 2012. Target Target Balance Fund Rate Balance 12/31/2012 General 8.5% $ 3,048,589 $ 2,944,778 Water 12% 1,136,491 4,292,120 Wastewater 12% 1,474,417 4,468,903 Stormwater 12% 282,592 1,518,811 Golf Course 12% 251,815 318,249 A contingency reserve fund, for the purposes of economic stabilization, was created by the City Council to protect the City's General Fund in the event of unforeseen and unfunded emergency requirements. The minimum fund balance is set at $1,000,000. The proceeds of sale of all General Fund real property are committed to this purpose. Funds are to be expended, with the unanimous vote of the City Council, only in the event of a bona fide emergency defined as a significant crisis threatening the financial viability of the City. If the balance of the fund is less than one million dollars a repayment plan shall be established to replenish the fund to its minimum level. Balances in excess of $1,000,000 can be used for capital purposes upon City Council approval by simple majority vote. In May of 2011 the City Council authorized the expenditure of $1,150,000 to settle a dispute over a contingent loan agreement between the City, Kitsap County and Kitsap Consolidated Housing Authority. At 12/31/12 the balance was 42 / City of Bremerton $234,192. The fund balance of this management fund is reported as part of the General Fund. The 2013 amended budget includes $230,000 towards the rebuilding of the reserve amount. 2. Reconciliation of Government -wide and Fund Financial Statements A. Explanation of aggregated differences between the governmental fund balance sheet and the government -wide statement of net position The governmental fund balance sheet includes a reconciliation between total fund balance and total net position as reported in the government -wide statement of net position. The details of the aggregated differences are presented below. Capital assets used in governmental activities are not financial resources and therefore not reported in the funds: Other long -term assets are not available to pay for current-period expenditures and therefore are not reported in the funds: Deferred revenue for taxes and receivables due beyond the city's 30 day measurable and available period $ 3,338,545 Investment interest accrued beyond the city's 30 day measurable and available period Build America Bond subsidy beyond the city's 30 day measurable Internal Service funds are used by management to charge the costs of certain activities to individual funds: 2,982 Some liabilities, including bonds, loans and compensated absences payable, are not due and payable in the current period and therefore are not reported in the funds: GO bonds payable $ (32,710,000) Less: Issuance premiums (432,125) Add: Deferred amount on refunding 1,194,683 Capital Assets of governmental funds net of depreciation $ 110,236,768 Capital Assets of Internal Service funds included in govermental activities and available period 43,167 Deferred charge for bond issue costs 244,420 Net position of Internal service funds included in governmental activities $ 2,265,355 Other Long tern payables 0 Accrued interest payable (238,577) City of Bremerton / 43 B. Explanation of aggregated differences between the governmental fund statement of revenues, expenditures, and changes in fund balances and the government -wide statement of activities The governmental fund statement of revenues, expenditures, and changes in fund balances includes reconciliation between net changes in fund balances — total governmental funds and changes in net position of governmental activities as reported in the government -wide statement of activities. The details of the aggregated differences are presented below. Government funds report capital outlays as expenditures; however, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. The issuance of long -term debt provides current financial resources to governmental funds, while the repayment of the principal of long -term debt consumes the current financial resources of governmental funds. Also, governmental funds report the effect of issuance costs, premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. GO bond principal paid Principal of GO Bonds Issued Long Tenn Notes Issued Unamortized debt issuance costs $ 6,853,239 (5,215,000) Some revenues and expenses reported in the statement of activities do not provide /do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds: Change in accrued interest receivable $ (3,629) Change in deferred property taxes receivable 19,579 Change in court fines receivable (14,192) Change in block grant loans receivable 34,157 Change in parking/red light fines receivable 136,046 Change in BKAT contracts receivable (17,000) Change in Build America Bond subsidy receivable (395) Change in other post - employment benefits payable (32,169) Change in accrued interest payable (37,944) The net revenue of certain internal service fund activities are governmental in nature and are included in the change in net position in the government -wide statements. Capital outlay $ 5,708,350 Depreciation (3,570,583) Contributions of capital assets 2,947,143 44 / City of Bremerton Net revenue of risk management activities Net Revenue of employment security activities Net Revenue of Accrued Leave activities 3. Deposits and Investments A. Deposits 1,033,230 160,820 3,732 (164,804) 12.183 The City's deposits are entirely covered by federal depository insurance (FDIC) or by collateral held in a multiple financial institution collateral pool administered by the Washington Public Deposit Protection Commission (PDPC). B. Investments As required by state law, all investments of the City funds are obligations of the U.S. Government, U.S. agency issues, obligations of the State of Washington, general obligations of Washington State municipalities, the State Treasurer's Investment Pool, or certificates of deposit with Washington State banks and savings and loan institutions. All temporary investments are stated at market value. Other property and investments are shown on the statement of net assets at cost. Investments US Agency securities Federal National Mortgage Assn AA 2.62 4,037,879 24% Federal Farm Credit Banks AA 1.17 2,016,920 12% Federal Home Loan Bank AA 1.71 6,022,160 35% Federal Home Loan Mortgage Corp AA 2.93 - 0% - 0% City of Bremerton LTGO Bonds NR 13.5 5,058,000 30% Total Investments 17,134,959 Total Cash & Investments 30,079,276 Interest Rate Risk. Asa means of limiting its exposure to realized fair value losses arising from rising interest rates, the City's investment policy requires that to the extent possible maturities be matched with anticipated cash flow requirements. Unless matched to a specific cash flow, the City is limited by the investment policy to maturities of five years or less. Credit Risk. Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. The City's investment policy limits investments to those authorized by State of Washington statutes governing the investment of public funds. The City's investments in agency securities were rated AAA by Standard & Poor's Rating Service. The Washington State Local Government Investment Pool which operates in a manner consistent with the section 2a-7 of the SEC's Investment Act of 1940, is unrated. Concentration of Credit Risk. As can be seen in the preceding table, the City is in compliance with its investment policy which requires that (with the exception of U.S. Treasury securities and the State Investment Pool) no more than 30% of the City's total investment portfolio will be invested in a single security type or with a single financial institution. Net revenue of information technology activities Cash & Cash Equivalents Washington State Local Government Inv. Pool NR 0.13 $8,756,667 Cash on hand 4,187,650 Total Cash & Cash Equivalents 12,944,317 City of Bremerton / 45 Custodial Credit Risk. The custodial credit risk for deposits is the risk that in the event of bank failure, the City's deposits may not be recovered. The City of Bremerton's investment policy requires deposits to be in a qualified financial institution. The definition of qualified institution is described in RCW 39.58.080 and the bank must be a participant in the State of Washington's Public Depository Protection Commission (PDPC). The custodial credit risk for safekeeping of securities is the risk in the event that the City would not have access to investment holdings. The City's investment policy requires that all security transactions be conducted on a delivery versus payment basis. Securities will be held in a third party custodial account designated by the City Treasurer. 4. Property Taxes The Kitsap County Treasurer acts as an agent to collect property taxes levied in the County for all taxing authorities. Collections are distributed the end of each month. A. Property Tax Calendar January 1 - Taxes are levied and become an enforceable lien against properties. February 14 - Tax bills are mailed. April 30 - First of two equal installment payments is due. May 31 - Assessed value of property established for next year's levy at 100 percent of market value. October 31 - Second installment is due. Property taxes are recorded as a revenue and receivable when levied. Property taxes collected in advance of the fiscal year to which they apply are recorded as deferred revenue and recognized as revenue of the period to which they apply. No allowance for uncollectible taxes is established because delinquent taxes are considered fully collectible. Prior year tax levies were recorded using the same principal, and delinquent taxes are evaluated annually. RCW 84.52.043 allows a city to levy taxes of up to $3.375 per $1,000 of taxable property in the city and RCW 41.14.060 allows an additional $0.225 per $1,000 for any municipal purpose, if not required to fund pension programs. For cities annexed to a library district, such as the City, the maximum levy rate is reduced by the amount of the library district levy. For tax year 2012, the Kitsap Regional Library District levied $0.37 per $1,000 of assessed valuation, and therefore the City's maximum levy rate is $3.23 per $1,000 of assessed valuation. These taxes may be levied without a vote of the people. This limitation is exclusive of a potential levy for the maintenance of a local improvement guaranty fund, which the City does not levy. The City's regular levy for 2012 was $2.559062 per $1,000 on an assessed valuation of $2.549 billion, for a total regular levy of $6,522,962. Special levies, approved by the voters are not subject to the above limitations. In 2012, the City levied an additional $0.81 per $1,000 for General Obligation Bonds and Emergency Medical Services, for a total additional levy of $2,053,308. Article VII, Section 2 of the Washington Constitution, as amended in 1973, limits aggregate regular property tax levies by the State and all taxing districts, except port districts and public utility districts, to $10 per $1,000 or one percent of the true and fair value of property. RCW 84.52.050 provides the same limitation by statute. 46 / City of Bremerton 5. Capital Assets Capital assets, not being depreciated Land $ 17,406,238 $ 27,544 - $ 17,433,782 Construction in progress 11,651,214 5,951,495 435,172 17,167,537 Total capital assets, not being depreciated 29,057,452 5,979,039 435,172 34,601,319 Capital assets, being depreciated: 130,215,313 4,056,458 14,977 134,256,794 Buildings /building improvements 56,672,424 27,288 8,782 56,690,930 Improvements other than buildings 17,658,185 93,980 76,596 17,675,569 Machinery and equipment 8,816,098 162,201 98,525 8,879,774 Infrastructure 34,454,683 2,828,157 - 37,282,840 Total capital assets, being depreciated 117,601,390 3,111,626 183,903 120,529,113 Less accumulated depreciation for: 216,505 158,298,730 $ 169,961,876 $ 12,212,945 $ Buildings /buildings improvements 9,496,965 1,159,267 1,786 10,654,446 Improvements other than buildings 8,295,123 817,891 61,058 9,051,956 Machinery and equipment 5,472,391 512,806 91,934 5,893,263 Infrastructure 18,201,566 1,086,275 - 19,287,841 Total accumulated depreciation 41,466,045 3,576,239 154,778 44,887,506 Total capital assets, being depreciated, net 76,135,345 (464,613) 29,125 75,641,607 Governmental activities capital assets, net $ 105,192,797 $ 5,514,426 $ 464,297 $ 110,242,926 Capital assets, not being depreciated: Land Construction in progress Total capital assets, not being depreciated Capital assets, being depreciated: Buildings /building improvements Improvements other than buildings Machinery and equipment Total capital assets, being depreciated Less accumulated depreciation for: Buildings /buildings improvements Improvements other than buildings Machinery and equipment Total accumulated depreciation Total capital assets, being depreciated, net Business -type activities Capital assets, net $ 8,601,813 $ 504,889 - $ 9,106,702 8,708,059 5,844,825 10,258,640 4,294,244 17,309,872 6,349,714 10,258,640 13,400,946 50,988,939 2,995,614 - 53,984,553 130,215,313 4,056,458 14,977 134,256,794 52,653,049 4,557,894 1,603,792 55,607,151 233,857,301 11,609,966 1,618,769 243,848,498 18,458,936 968,686 - 19,427,622 38,950,300 2,527,092 14,977 41,462,415 23,796,061 2,250,957 1,387,287 24,659,731 81,205,297 5,746,735 1,402,264 85,549,768 152,652,004 5,863,231 216,505 158,298,730 $ 169,961,876 $ 12,212,945 $ 10,475,145 $ 171,699,676 Capital asset activity for the year ended December 31, 2012 was as follows: City of Bremerton / 47 Depreciation expense was charged to functions /programs of the primary government as follows: General government Public safety Transportation, including depreciation of general infrastructure assets Economic environment Culture and recreation Capital assets held by the government's internal service funds are charged to the various functions based on their usage of the assets Total depreciation expense - Governmental activities Water Wastewater Stormwater Golf Capital assets held by the government's internal service funds are charged to the various functions based on their usage of the assets Total depreciation expense - Business -type activities 6. Construction Commitments $ 215,553 594,940 1,074,634 348 1,685,108 5,656 $ 3,576,239 $ 1,705,747 3,237,575 96,564 161,467 545,382 $ 5,746,735 At December 31, 2012 the City had several construction projects underway. The following table contains the projects and status at year end. Remaining Project Spent to Date Commitment Park Plaza Construction 7,208,264 130,595 Cross Town Pipeline 2,327,167 29,451 11th & Warren Cosntructlon 767,072 506,752 Pacific 11th to Sheldon 174,756 17,533 E 11th Shore Dr to Pitt 74,874 11,858 LID Pacific Avemme 215,805 82,492 LID Manetter Business Area 119,837 130,089 Bremerton Highway Safety Improvements 710,666 58,934 Price RdPRV 0 26,256 Cook Rd Booster Station 0 18,704 $ 11,598,441 $ 1,012,664 7. Component Unit On February 4, 2009 the City authorized and approved the creation of a Transportation Benefit District (TBD) coextensive with the boundaries of the City in order to exercise the powers available under RCW 36.73. This blended component unit is governed by a board composed of the nine members of the Bremerton City Council, who serve in an ex- officio and independent capacity. The primary purpose of the District is the acquisition, construction, improvement, provision and /or funding of the maintenance of City streets and related infrastructure. The TBD is an independent taxing district and was established primarily to benefit the City of Bremerton satisfying GASB Statement No. 14's criteria for the recognition of the TBD as a blended component unit of the City. Beginning fiscal year 2012, the TBD 48 / City of Bremerton has enacted a $20 per vehicle license fee to fund appropriate projects. In 2012, the TBD received total collections from vehicle license fees of $160,676. There were no expenses or capital assets to report in 2012. 8. Pension Plans Substantially all City 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 retirement plans. The Department of Retirement Systems (DRS), a department within the primary government of the State of Washington, issues apublicly 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; or it may be downloaded from the DRS website at www,drs _wa,wv The following disclosures are made pursuant to GASB Statements 27, Accounting fbr Pensions by State and Local Government Employers and No. 50 Pension Disclosures, an Amendment of GASB Statements No. 25 and No. 27. Public Employees' Retirement System (PERS) Plans 1, 2 and 3 Plan Description The Legislature established PERS in 1947. Membership in the system includes: elected officials; state employees; employees of the Supreme, Appeals, and Superior courts (other than judges currently in the Judicial Retirement System); employees of legislative committees; community and technical colleges, college and university employees not participating in higher education retirement programs; judges of district and municipal courts; and employees of local governments. PERS retirement benefit provisions are established in Chapters 41.34 and 41.40 RCW and may be amended only by the State Legislature. 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. PERS members who joined the system by September 30, 1977, are Plan 1 members. Those who joined on or after October 1, 1977 and by either, February 28, 2002 for state and higher education employees or August 31, 2002 for local government employees, are Plan 2 members unless they exercised an option to transfer their membership to Plan 3. PERS members 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. Employees who fail to choose within 90 days default to PERS Plan 3. Notwithstanding, PERS Plan 2 and Plan 3 members may opt out of plan membership if terminally ill, with less than five years to live. PERS is comprised of and reported as three separate plans for accounting purposes; Plan 1, Plan 2/3, and Plan 3. Plan 1 accounts for the defined benefits of Plan 1 members. Plan 2/3 accounts for the defined benefits of Plan 2 members and the defined benefit portion of benefits for Plan 3 members. Plan 3 accounts for the defined contribution portion of benefits for Plan 3 members. Although members can only be a member of either Plan 2 or Plan 3, the defined benefit portions of Plan 2 and Plan 3 are accounted for in the same pension trust fund. All assets of this Plan 2/3 defined benefit plan may legally be used to pay the defined benefits of any of the Plan 2 or Plan 3 members or beneficiaries, as defined by the terns of the plan. Therefore, Plan 2/3 is considered to be a single plan for accounting purposes. PERS Plan 1 and Plan 2 defined benefit retirement benefits are financed from a combination of investment earnings and employer and employee contributions. Employee contributions to the PERS Plan 1 and Plan 2 defined benefit plans accrue interest at a rate specified by the Director of DRS. During DRS' Fiscal Year 2012, the rate was five and on -half percent compounded quarterly. Members in PERS Plan 1 and Plan 2 can elect to withdraw total employee contributions and interest thereon upon separation from PERS- covered employment. PERS Plan 1 members are vested after the completion of five years of eligible service. PERS Plan 1 members are eligible for retirement after 30 years of service, or at age 60 with five years of service, or at the age of 55 with 25 years of service. The monthly benefit is 2 percent of the average final compensation (AFC) per year of service. The retirement benefit may not exceed 60 percent of the AFC. The AFC is the monthly average of the 24 consecutive highest - paid service credit months. The monthly benefit is subject to a minimum of retirees who have 25 years of service and have been retired 20 years, or who have 20 years of service and have been retired 25 years. If a survivor option is chosen, the benefit is further reduced. Plan 1 members retiring from inactive status prior to the age of 65 may receive actuarially reduced benefits. Plan 1 members may elect City of Bremerton / 49 to receive an optional COLA that provides an automatic annual adjustment based on the Consumer Price Index. The adjustment is capped at 3 percent annually. To offset the cost of this annual adjustment, the benefit is reduced. PERS Plan 1 provides duty and non -duty disability benefits. Duty disability retirement benefits for disablement prior to the age of 60 consist of a temporary life annuity. The benefit amount is $350 a month, or two- thirds of the monthly AFC, whichever is less. The benefit is reduced by any workers' compensation benefit and is payable as long as the member remains disabled or until the member attains the age of 60, at which time the benefit is converted to the member's service retirement amount. A member with five years of covered employment is eligible for non -duty disability retirement. Prior to the age of 55, the benefit amount is 2 percent of the AFC for each year of service reduced by 2 percent for each year the member's age is less than 55. The total benefit is limited to 60 percent of the AFC and is actuarially reduced to reflect the choice of a survivor option. Plan 1 members may elect to receive an optional COLA amount (based on the Consumer Price Index), capped at 3 percent annually. To offset the cost of this annual adjustment, the benefit is reduced. PERS Plan 1 members can receive credit for military service while actively serving in the military if such credit makes them eligible to retire. Members can also purchase up to 24 months of service credit lost because of an on-the-job injury. The survivor of a PERS Plan 1 member who dies after having earned ten years of service credit has the option, upon the member's death, of either a monthly survivor benefit or the lump sum of contributions plus interest. PERS Plan 2 members are vested after completion of five years of eligible service. Plan 2 members are eligible for normal retirement at the age of 65 with five years service. The monthly benefit is 2 percent of the AFC per year of service. The AFC is the monthly average of the 60 consecutive highest-paid service months. There is no cap on years of service credit; and a cost - of -living allowance is granted (based on the Consumer Price Index), capped at 3 percent annually. PERS Plan 2 members who have at least 20 years of service credit and are 55 years of age or older, are eligible for early retirement with a reduced benefit. The benefit is reduced by an early retirement factor (ERF) that varies according to age, for each year before age 65. PERS Plan 2 members who have 30 or more years of service credit and are at least 55 years old can retire under one of two provisions: • With a benefit that is reduced by 3 percent for each year before age 65. • With a benefit that has a smaller (or no) reduction (depending on age) that imposes stricter return-to -work rules. PERS Plan 2 retirement benefits are also actuarially reduced to reflect the choice, if made, of a survivor option. The surviving spouse or eligible child(ren) of a PERS Plan 2 member who dies after having earned ten years of service credit has the option of either a monthly benefit or a lump sum payment of the member's contributions plus interest. PERS Plan 3 has a dual benefit structure. Employer contributions finance a defined benefit component, and member contributions finance a defined contribution component. As established by Chapter 41.34 RCW, employee contribution rates to the defined contribution component rage from 5 percent to 15 percent of salaries, based on member choice. There are currently no requirements for employer contributions to the defined contribution component of PERS Plan 3. PERS Plan 3 defined contribution retirement benefits are dependent upon the results of investment activities. Members may elect to self - direct the investment of their contributions. Any expenses incurred in conjunction with self - directed investments are paid by members. Absent a member's self - direction, PERS Plan 3 investments are made in the same portfolio as that of the PERS 2/3 defined benefit plan. For DRS' fiscal year 2012, PERS Plan 3 employee contributions were $95.2 million, and plan refunds paid out were $66.2 million. The defined benefit portion of PERS Plan 3 provides members a monthly benefit that is 1 percent of the AFC per year of service. The AFC is the monthly average of the 60 consecutive highest -paid service months. There is no cap on years of service credit, and Plan 3 provides the same cost -of- living allowance as Plan 2. Effective June 7, 2006, PERS Plan 3 members are vested in the defined benefit portion of their plan after ten years of service; or after five years of service, if twelve months of that service are earned after age 44; or after five service credit years earned in PERS Plan 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 for normal retirement at age 65, or they may retire early with the following conditions and benefits: 50 / City of Bremerton • If they have at least ten service years and are 55 years old, the benefit is reduced by an ERF that varies with age, for each year before 65. • If they have 30 service credit years and are at least 55 years old, they have the choice of a benefit that is reduced by 3 percent for each year before age 65; or a benefit with a smaller (or no) reduction factor (depending on age) that imposes stricter return -to -work rules. PERS Plan 3 benefit retirement benefits are also actuarially reduced to reflect the choice, if made, of a survivor option. PERS Plan 2 and Plan 3 provided disability benefits. There is no minimum amount of service credit required for eligibility. The Plan 2 monthly benefit amount is 2 percent of the AFC per year of service. For Plan 3, the monthly benefit amount is 1 percent of the AFC per year of service. These disability benefit amounts are actuarially reduced for each year that the member's age is less than 65, 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 (based on the Consumer Price Index) capped at 3 percent annually. PERS Plan 2 and Plan 3 members may have up to ten years of interruptive military service credit; five years at no cost and five years that may be purchased by paying the required contributions. PERS Plan 2 and Plan 3 members who become totally incapacitated for continued employment while serving the uniformed services, or a surviving spouse or eligible child(ren), may request interruptive military service credit. PERS Plan 2 and Plan 3 members can purchase up to 24 months of service credit lost because of an on-the-job injury. PERS members may also purchase up to five years of additional service credit once eligible for retirement. This credit can only be purchased at the time of retirement and can be used only to provide the member with a monthly annuity that is paid in addition to the member's retirement benefit. Beneficiaries of a PERS Plan 2 or Plan 3 member with ten years of service who is killed in the course of employment receive retirement benefits without actuarial reduction, if the member was not at normal retirement age at death. This provision applies to any member killed in the course of employment, on or after June 10, 2004, if found eligible by the Department of Labor and Industries. A one -time duty - related death benefit is provided to the estate (or duly designated nominee) of a PERS member who dies in the line of service as a result of injuries sustained in the course of employment, or if the death resulted from an occupational disease or infection that arose naturally and proximately out of said member's covered employment, if found eligible by the Department of Labor and Industries. From January 1, 2007 through December 31, 2007, judicial members of PERS were given the choice to participate in the Judicial Benefit Multiplier Program (JBM) enacted in 2006. Justices and judges in PERS Plan 1 and 2 were able to make a one -time irrevocable election to pay increased contributions that would fund a retirement benefit with a 3.5 percent multiplier. The benefit would be capped at 75 percent of AFC. Judges in PERS Plan 3 could elect a 1.6 percent of pay per year of service benefit, capped at 37.5 percent of AFC. Members who chose to participate in JBM would: accrue service credit at the higher multiplier beginning with the date of their election; be subject to the benefit cap of 75 percent of AFC; stop contributing to the Judicial Retirement Account QRA); pay higher contributions; and be given the option to increase the multiplier on past judicial service. Members who did not choose to participate would: continue to accrue service credit at the regular multiplier; not be subject to a benefit cap; continue to participate in JRA, if applicable; continue to pay contributions at the regular PERS rate; and never be a participant in the JBM Program. Newly elected or appointed justices and judges who chose to become PERS members on or after January 1, 2007, or who had not previously opted into PERS membership, were required to participate in the JBM Program. Members required into the JBM Program would: return to prior PERS Plan if membership had previously been established; be mandated into Plan 2 and not have a Plan 3 transfer choice, if a new PERS member; accrue the higher multiplier for all judicial service; not contribute to JRA; and not have the option to increase the multiplier for past judicial service. There are 1,184 participating employers in PERS. Membership in PERS consisted of the following as of the latest actuarial valuation date for the plans of June 30, 2011: City of Bremerton / 51 Retirees and beneficiaries receiving benefits 79,363 Terminated plan members entitled to but not yet receiving benefits 29,925 Active plan members vested 105,578 Active plan members non - vested 46,839 Total 261,705' Funding Policy Each biennium, the state Pension Funding Council adopts PERS Plan 1 employer contribution rates, PERS Plan 2 employer and employee contribution rates, and PERS 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 at a 7.5 percent for state government elected officials. The employer and employee contribution rates for Plan 2 and the employer contribution rate for Plan 3 are developed by the Office of the State Actuary to fully fund Plan 2 and the defined benefit portion of Plan 3. Under PERS Plan 3, employer contributions finance the defined benefit portion of the plan and member contributions finance the defined contribution portion. The Plan 3 employee contribution rates range from 5 percent to 15 percent, based on member choice. Two of the options are graduated rates dependent on the employee's age. As a result of the implementation of the Judicial Benefit Multiplier Program in January 2007, a second tier of employer and employee rates was developed to fund, along with investment earnings, the increased retirement benefits of those justices and judges that participate in the program. The methods used to determine the contribution requirements are established under state statute in accordance with Chapters 41.40 and 41.45 RCW. The required contribution rates expressed as a percentage of current -year covered payroll, as of December 31, 2012, are as follows: Members Not Participating in JBM: * The employer rates include the employer administrative expense fee currently set at 0.16 %_ ** The employer rate for state elected officials is 10.74% for Plan 1 and 7.21% for Plan 2 and 3. ** * Plan 3 defined benefit portion only. ** ** The employee rate for state elected officials is 7.50% for Plan 1 and 4.64% for Plan 2. ** ** * Variable from 5.0% minimum to 15.0% maximum based on rate selected by the PERS 3 member. Members Participating in JBM: PERS Plan iI PERS Plan 2 PERS Plan 3 Employer * 7.21 % ** 7.21 % ** 7.21 % * ** Employee 6.00 % * * ** 4.64 % * * ** * * * ** * The employer rates include the employer administrative expense fee currently set at 0.16 %_ ** The employer rate for state elected officials is 10.74% for Plan 1 and 7.21% for Plan 2 and 3. ** * Plan 3 defined benefit portion only. ** ** The employee rate for state elected officials is 7.50% for Plan 1 and 4.64% for Plan 2. ** ** * Variable from 5.0% minimum to 15.0% maximum based on rate selected by the PERS 3 member. Members Participating in JBM: *The employer rates include the employer administrative expense fee currently set at 0.16 % / "Plan 3 defined benefit portion only. ** *Minimum rate. Both the City and the employees made the required contributions. The City's required contributions for the years ended December 31 were as follows: PERS Plan I PERS Plan 2 PERS Plan 3 Employer -State Agency* 9.71% 9.71% 9.71%** Employer -Local Agency* 7.21% 7.21% 7.21 % ** Employee -State Agency 9.76% 9.10% 7.50 % ** Employee -Local Agency 12.26% 11.60% 7.50 % ** *The employer rates include the employer administrative expense fee currently set at 0.16 % / "Plan 3 defined benefit portion only. ** *Minimum rate. Both the City and the employees made the required contributions. The City's required contributions for the years ended December 31 were as follows: 52 / City of Bremerton Law Enforcement Officers' and Fire Fighters' Retirement System (LEOFF) Plans 1 and 2 Plan Description The Legislature established LEOFF in 1970. Membership in the system includes all full -time, fully compensated, local law enforcement commissioned officers, firefighters and, as of July 24, 2005, emergency medical technicians. LEOFF membership is comprised primarily of non -state employees, with Department of Fish and Wildlife enforcement officers, who were first included prospectively effective July 27, 2003, being an exception. LEOFF retirement benefit provisions are established in Chapter 41.26 RCW and may be amended only by the State Legislature. LEOFF is a cost - sharing multiple - employer retirement system comprised of two separate defined benefit plans. LEOFF members 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. LEOFF defined benefit retirement benefits are financed from a combination of investment earnings, employer and employee contributions, and a special funding situation in which the state pays through state legislative appropriations. Effective July 1, 2003, the LEOFF Plan 2 Retirement Board was established by Initiative 790 to provide governance of LEOFF Plan 2. The Board's duties include adopting contribution rates and recommending policy changes to the Legislature for the LEOFF Plan 2 retirement plan. LEOFF retirement benefits are financed from a combination of investment earnings, employer and employee contributions, and a special funding situation in which the state pays through state legislative appropriations. Employee contributions to the LEOFF Plan 1 and Plan 2 defined benefit plans accrue interest at a rate specified by the Director of DRS. During DRS' fiscal year 2012, the rate was five and one -half percent compounded quarterly. Members in LEOFF Plan 1 and Plan 2 can elect to withdraw total employee contributions and interest earnings upon separation from LEOFF- covered employment. LEOFF Plan 1 members are vested after the completion of five years of eligible service. Plan 1 members are eligible for retirement with five years of service at the age of 50. The benefit per year of service calculated as a percent of final average salary (FAS) is as follows: Term of Service PERS Plan f PERS Plan 2 PERS Plan 3 2012 $ 57,198 $ 771,999 $ 102,682 2011 $ 59,297 $ 690,533 $ 88,187 2010 $ 63,887 $ 596,771 $ 80,024 Law Enforcement Officers' and Fire Fighters' Retirement System (LEOFF) Plans 1 and 2 Plan Description The Legislature established LEOFF in 1970. Membership in the system includes all full -time, fully compensated, local law enforcement commissioned officers, firefighters and, as of July 24, 2005, emergency medical technicians. LEOFF membership is comprised primarily of non -state employees, with Department of Fish and Wildlife enforcement officers, who were first included prospectively effective July 27, 2003, being an exception. LEOFF retirement benefit provisions are established in Chapter 41.26 RCW and may be amended only by the State Legislature. LEOFF is a cost - sharing multiple - employer retirement system comprised of two separate defined benefit plans. LEOFF members 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. LEOFF defined benefit retirement benefits are financed from a combination of investment earnings, employer and employee contributions, and a special funding situation in which the state pays through state legislative appropriations. Effective July 1, 2003, the LEOFF Plan 2 Retirement Board was established by Initiative 790 to provide governance of LEOFF Plan 2. The Board's duties include adopting contribution rates and recommending policy changes to the Legislature for the LEOFF Plan 2 retirement plan. LEOFF retirement benefits are financed from a combination of investment earnings, employer and employee contributions, and a special funding situation in which the state pays through state legislative appropriations. Employee contributions to the LEOFF Plan 1 and Plan 2 defined benefit plans accrue interest at a rate specified by the Director of DRS. During DRS' fiscal year 2012, the rate was five and one -half percent compounded quarterly. Members in LEOFF Plan 1 and Plan 2 can elect to withdraw total employee contributions and interest earnings upon separation from LEOFF- covered employment. LEOFF Plan 1 members are vested after the completion of five years of eligible service. Plan 1 members are eligible for retirement with five years of service at the age of 50. The benefit per year of service calculated as a percent of final average salary (FAS) is as follows: Term of Service Percent of Final Average Salar 20 or more years 2.0 % 10 but less than 20 years 1.5% 5 but less than 10 years 1.0% The FAS is the basic monthly salary received at the time of retirement, provided a member has held the same position or rank for 12 months preceding the date of retirement. Otherwise, it is the average of the highest consecutive 24 months' salary within the last 10 years of service. A cost-of-living allowance is granted (based on the Consumer Price Index). LEOFF Plan 1 provides death and disability benefits. Death benefits for survivors of Plan 1 members on active duty consist of the following: (1) If eligible spouse, 50 percent of the FAS, plus 5 percent of FAS for each eligible surviving child, with a limitation on the combined allowances of 60 percent of the FAS; or (2) If no eligible spouse, eligible children receive 30 percent of FAS for the first child plus 10 percent for each additional child, subject to a 60 percent limitation of FAS, divided equally. A one -time duty - related death benefit is provided to the estate (or duly designated nominee) of a LEOFF Plan 1 member who dies as a result of injuries or illness sustained in the course of employment, or if the death resulted from an occupational disease or infection that arose naturally and proximately out of the member's covered employment, if found eligible by the Department of Labor and Industries. The LEOFF Plan 1 disability allowance is 50 percent of the FAS plus 5 percent for each child up to a maximum of 60 percent. Upon recovery from disability before the age of 50, a member is restored to service with full credit for service while disabled. City of Bremerton / 53 Upon recovery after the age of 50, the benefit continues as the greater of the member's disability allowance or service retirement allowance. LEOFF Plan 1 members may purchase up to five years of additional service credit once eligible for retirement. This credit can only be purchased at the time of retirement and can be used only to provide the member with a monthly annuity that is paid in addition to member's benefit. LEOFF Plan 2 members are vested after the completion of five years of eligible service. Plan 2 members are eligible for retirement at the age of 53 with five years of service, or at age 50 with 20 years of service. Plan 2 members receive a benefit of 2 percent of the FAS per year of service. (the FAS is based on the highest consecutive 60 months), actuarially reduced to reflect the choice of a survivor option. Members who retire prior to the age 53 receive reduced benefits. If the member has at least 20 years of service and is age 50, the reduction is 3 percent for each year prior to age 53. Otherwise, the benefits are actuarially reduced for each year prior to age 53. A cost-of-living allowance is granted (based on the Consumer Price Index), capped at 3 percent annually. LEOFF Plan 2 provides disability benefits. There is no minimum amount of service credit required for eligibility. The Plan 2 allowance amount is 2 percent of the FAS for each year of service. Benefits are reduced to reflect the choice of survivor option and for each year that the member's age is less than 53, unless the disability is duty - related. If the member has at least 20 years of service and is age 50, the reduction is 3 percent for each year prior to age 53. A disability benefit equal to 70 percent of FAS, subject to offsets for workers' compensation and Social Security disability benefits received, is also available to those LEOFF Plan 2 members who are catastrophically disabled in the line of duty and incapable of future substantial gainful employment in any capacity. Effective June 2010, benefits to LEOFF Plan 2 members who are catastrophically disabled include payment of eligible health care insurance premiums. Members of LEOFF Plan 2 who leave service because of line of duty disability are allowed to withdraw 150 percent of accumulated member contributions. This withdrawal benefit is not subject to federal income tax. Alternatively, members of LEOFF Plan 2 who leave service because of a line of duty disability may be eligible to receive a retirement benefit of at least 10 percent of FAS and 2 percent per year of service beyond five years. The first 10 percent of the FAS is not subject to federal income tax. LEOFF Plan 2 retirees may return to work in an eligible position covered by another retirement system, choose membership in that system and suspend their pension benefits, or not choose membership and continue receiving pension benefits without interruption. LEOFF Plan 2 members who apply for retirement may purchase up to five years of additional service credit. The cost of this credit is the actuarial equivalent of the resulting increase in the member's benefit. LEOFF Plan 2 members can receive service credit for military service that interrupts employment. Additionally, LEOFF Plan 2 members who become totally incapacitated for continued employment while serving in the uniformed services, or a surviving spouse or eligible child(ren), may request interruptive military service credit. LEOFF Plan 2 members may also purchase up to 24 consecutive months of service credit for each period of temporary duty disability. Beneficiaries of a LEOFF Plan 2 member who is killed in the course of employment receive retirement benefits without actuarial reduction, if found eligible by the Director of the Department of Labor and Industries. Benefits to eligible surviving spouses and dependent children of LEOFF Plan 2 members killed in the course of employment include the payment of on- going health care insurance premiums paid to the Washington state Health Care Authority. A one -time duty - related death benefit is provided to the estate (or duly designated nominee) of a LEOFF Plan 2 member who dies as result of injuries or illness sustained in the course of employment, or if the death resulted from an occupational disease or infection that arose naturally and proximately out of the member's covered employment, if found eligible by the Department of Labor and Industries. Legislation passed in 2009 provides to the Washington - state- registered domestic partners of LEOFF Plan 2 members the same treatment as married spouses, to the extent that the treatment is no in conflict with federal laws. There are 373 participating employers in LEOFF. Membership in LEOFF consisted of the following as of the latest actuarial valuation date for the plans of June 30, 2011: 54 / City of Bremerton Retirees and beneficiaries receiving benefits 9,947 Terminated plan members entitled to but not yet receiving benefits 656 Active plan members vested 13,942 Active plan members non- vested 3,113 Total 27,658' Funding Policy Employer and employee contribution rates are developed by the Office of the State Actuary to fully fund the plan. Starting on July 1, 2000, LEOFF Plan 1 employers and employees contribute zero percent as long as the plan remains fully funded. Plan 2 employers and employees are required to pay at the level adopted by LEOFF Plan 2 Retirement Board. The Legislature, by means of a special funding arrangement, appropriated money from the state General Fund to supplement the current service liability and fund the prior service costs of LEOFF Plan 2 in accordance with the recommendations of the Pension Funding Council and the LEOFF Plan 2 Retirement Board. However, this special funding situation is not mandated by the state constitution and this funding requirement could be returned to the employers by a change of statute. For DRS' fiscal year 2012, the state contributed $52.8 million to LEOFF Plan 2. The methods used to determine the contribution requirements are established under state statute in accordance with Chapters 41.26 and 41.45 RCW. The required contribution rates expressed as a percentage of current -year covered payroll, as of December 31, 2012, are as follows: *The employer rates include the employer administrative expense fee currently set at 0.16 %. * *The employer rate for ports and universities is 8.62% Both the City and the employees made the required contributions. The City's required contributions for the years ended December 31 were as follows: LEOFF Plan 1 LEOFF Plan 2 Employer* 0.16 % 5.24 % ** Employee 0.00% 8.46% State N/A 3.38% *The employer rates include the employer administrative expense fee currently set at 0.16 %. * *The employer rate for ports and universities is 8.62% Both the City and the employees made the required contributions. The City's required contributions for the years ended December 31 were as follows: Public Safety Employees' Retirement System (PSERS) Plan 2 Plan Description PSERS was created by the 2004 Legislature and became effective July 1, 2006. PSERS retirement benefit provisions have been established by Chapter 41.37 RCW and may be amended only by the State Legislature. PSERS is a cost - sharing multiple - employer retirement system comprised of a single defined benefit plan, PSERS Plan 2. PSERS membership includes: LEOFF Plan 1 LEOFF Plan 2 2012 $ 545 $ 549,928 2011 $ 758 $ 555,170 2010 $ 736 $ 547,704 Public Safety Employees' Retirement System (PSERS) Plan 2 Plan Description PSERS was created by the 2004 Legislature and became effective July 1, 2006. PSERS retirement benefit provisions have been established by Chapter 41.37 RCW and may be amended only by the State Legislature. PSERS is a cost - sharing multiple - employer retirement system comprised of a single defined benefit plan, PSERS Plan 2. PSERS membership includes: City of Bremerton / 55 • Full -time employees hired by a covered employer on or before July 1, 2006, who met at least one of the PSERS eligibility criteria, and elected membership during the period of July 1, 2006 to September 30, 2006; and • Full -time employees, hired on or after July 1, 2006 by a covered employer, that meet at least one of the PSERS eligibility criteria. A covered employer is one that participates in PSERS. Covered employers include the following: • State of Washington agencies: Department of Corrections, Department of Natural Resources, Parks and Recreation Commission, Gambling Commission, Washington State Patrol, and Liquor Control Board; • Washington State counties; • Washington State cities except for Seattle, Tacoma and Spokane; and • Correctional entities formed by PSERS employers under the Interlocal Cooperation Act. To be eligible for PSERS, an employee must work on a full -time basis and: • Have completed a certified criminal justice training course with authority to arrest, conduct criminal investigations, enforce the criminal laws of Washington and carry a firearm as part of the job; or • Have primary responsibility to ensure the custody and security of incarcerated or probationary individuals; or • Function as a Washington peace officer, as defined in RCW 10.93.020; or • Have primary responsibility to supervise eligible members who meet the above criteria. PSERS retirement benefits are financed from a combination of investment earnings and employer and employee contributions. Employee contributions to the plan accrue interest at a rate specified by the Director of DRS. During DRS' fiscal year 2012, the rate was five and one -half percent compounded quarterly. Members in PSERS Plan 2 can elect to withdraw total employee contributions and interest thereon upon separation from PSERS- covered employment. PSERS Plan 2 members are vested after completion of five years of eligible service. PSERS members may retire with a monthly benefit of 2 percent of the average final compensation (AFC) at the age of 65 with five years of service, or at the age of 60 with at least 10 years of PSERS service credit, or at age 53 with 20 years of service. The AFC is the monthly average of the member's 60 consecutive highest -paid service credit months. There is no cap on years of service credit; and a cost -of- living allowance is granted (based on the Consumer Price Index), capped at 3 percent annually. PSERS members who retire prior to the age of 60 receive reduced benefits. If retirement is at age 53 or older with at least 20 years of service, a 3 percent per year reduction for each year between the age at retirement and age 60 applies. PSERS Plan 2 provides disability benefits. There is no minimum amount of service credit required for eligibility. The benefit is 2 percent of the average final compensation (AFC) for each year of service. The AFC is based on the member's 60 consecutive highest creditable months of service. Benefits are actuarially reduced for each year that the member's age is less than 60 (with ten or more service credit years in PSERS), or less than 65 (with fewer than ten service credit years). There is no cap on years of service credit, and a cost -of -living allowance is granted (based on the Consumer Price Index), capped at 3 percent annually. PSERS Plan 2 members can receive service credit for military service that interrupts employment. Additionally, PSERS members who become totally incapacitated for continued employment while serving in the uniformed services, or a surviving spouse or eligible child(ren), may request interruptive military service credit. PSERS members may also purchase up to 24 consecutive months of service credit for each period of temporary duty disability. Beneficiaries of a PSERS Plan 2 member with ten years of service who is killed in the course of employment, receive retirement benefits without actuarial reduction. This provision applies to any member killed in the course of employment, if found eligible by the Director of the Department of Labor and Industries. A one -time duty - related death benefit is provided to the estate (or duly designated nominee) of a PSERS member who dies as a result of injuries or illness sustained in the course of employment, or if the death resulted from an occupational disease or infection that arose naturally and proximately out of the member's covered employment, if found eligible by the Department of Labor and Industries. 56 / City of Bremerton There are 76 participating employers in PSERS. Membership in PSERS consisted of the following as of the latest actuarial valuation date for the plan of June 30, 2011: Retirees and beneficiaries receiving benefits 15 Terminated plan members entitled to but not yet receiving benefits 1 Active plan members vested 167 Active plan members non - vested 4,020 Taal 4,203 Funding Policy Each biennium, the state Pension Funding Council adopts Plan 2 employer and employee contribution rates. The employer and employee contribution rates for Plan 2 are developed by the Office of the State Actuary to fully fund Plan 2. The methods used to determine the contribution requirements are established under state statute in accordance with Chapters 41.37 and 41.45 RCW. The required contribution rates expressed as a percentage of current -year covered payroll, as of December 31, 2012, are as follows: PSERS Plan 2 Employer* 8.87% Employee 6.36% *The employer rate includes an employer administrative expense fee of 0.16 %. Both the City and the employees made the required contribution. The City's required contributions for the years ended December 31 were as follows: 9. Risk Management The City's Risk Management Fund is used to finance its various exposures to loss. These exposures include theft, damage or destruction of assets, errors and omissions, property damage and injury of others. Smaller losses are self - insured while commercially available excess insurance is purchased for many larger losses. The City's General and Utility funds participate in financing the Risk Management Fund. Following is a summary of the City's 2012 insurance coverage and risk retention: Coverage Lirdt Self- Insured Risk PSERS flan 2 2012 $ 10,667 2011 $ 9,864 2010 $ 9,111 9. Risk Management The City's Risk Management Fund is used to finance its various exposures to loss. These exposures include theft, damage or destruction of assets, errors and omissions, property damage and injury of others. Smaller losses are self - insured while commercially available excess insurance is purchased for many larger losses. The City's General and Utility funds participate in financing the Risk Management Fund. Following is a summary of the City's 2012 insurance coverage and risk retention: Coverage Lirdt Self- Insured Risk Per Occurrence Retention Insurer Excess liability $5,000,000 $250,000 Ironshore Specialty Insurance Company Excess workers compensation Statutory 450,000 Safety National Casualty Corporation Blanket property 100,000,000 100,000 AffiliatedFMInstrance Company Employee blanket bond 1,000,000 25,000 Great American Insurance Conpany Pollution legal liability 1,000,000 100,000 Indian Harbor Insurance Company The risk manager and claims administrators establish reserves for open claims on a case by case basis, after an assessment of each claim's settlement value. Actuarial techniques are used to estimate the long -term liability of the fund for both reported and unreported losses. As of December 31, 2012, the Risk Management Fund had cash and investment reserves of $2,071,231. In September 2010 the City cash - funded a long term workers' compensation pension with the Department of Labor & Industries in the amount of $468,669. The Statement of Net Position for the Risk Management fund includes the unspent portion of this amount in prepayments. Long -term fund liabilities have been estimated at $451,818. Cash balances adequate to pay currently City of Bremerton / 57 due claims have been available in the fund since its inception in 1986. In the last three years, no settlement has exceeded the limit of liability on applicable insurance policies. The expected annual level of incurred claims is approximately $440,367. The following table shows the actual claims activity for 2011 and 2012: Claims liability - beginning of year $ 1,669,403 $ 1,759,683 Claims incurred 1,304,200 409,438 Estimate change prior years (877,318) (903,812) Payment on claims (336,602) (373,125) Claims liability - end of year $ 1,759,683 $ 892,184 10. Long -term Debt A. Long Term Debt The City issues general obligation and revenue bonds to finance the purchase or construction of capital assets. Bonded indebtedness has also been entered into to advance refund G.O. bonds. General obligation bonds have been issued for both general government and business -type activities and are being repaid from the applicable resources. The revenue bonds are being repaid by proprietary fund revenues. General obligation bonds currently outstanding are as follows: 2009 LTGO Refunding 12/31/28 3.0 / 4.5 5,058,000 2010 LTGO BABS 09/01/35 3.61 6,555,000 2010 UTGO Refunding 12/01/27 3.07 9,775,000 2010 LTGO (B) BABS 12/01/30 3.42 2,220,000 2011 LTGO BAN 07/29/13 Variable 8,910,000 2011 Promissory Note - Kitsap County 05/16/14 0 35,000 2012 LTGO Refunding - Govt Center 12/31/21 4.00 5,215,000 Total General Obligation Bonds and Notes The annual debt service requirements to maturity for general obligation bonds are as follows: 2013 $ 9,870,000 $ 992,375 2014 1,070,000 904,392 2015 1,055,000 881,386 2016 1,095,000 853,080 2017 1,110,000 822,630 2018 -2022 6,025,000 3,545,842 2023 -2027 7,120,000 2,274,908 2028 -2032 3,560,000 974,887 2033 -2035 1,805,000 176,745 Total $ 32,710,000 $ 11,426,245 $ 105,000 $ 200,000 220,000 245,000 270,000 1,587,000 1,980,000 451,000 $ 5,058,000 $ $ 37,768,000 177,030 198,120 190,120 203,985 192,960 767,520 376,650 20,295 2,126,680 Revenue bonds and loans currently outstanding are as follows: 58 / City of Bremerton 1994 PWTF Loan - Warren Ave CSO 1995 PWTF Loan W W TP improvements 1996 PWTF Loan Callow Ave CSO I 1997 PWTF Loan Callow Ave CSO 11 1998 PWTF Loan SR 303 water main 1999 PWTF Loan Tracyton water sys ph2 1999 PWTF Loan CSO design 2000 PWTF Loan Multi-Basin CSO 2000 PWTF Loan Callow CSO 3 -5 2001 PWTF Loan East Bremerton CSO 2003 PWTF Loan Anderson Cove Basin 12 2003 PWTF Loan Naval Avenue 2004 PWTF Loan Brentwood stormdrain red 2004 PWTF Loan Pacific Ave Basin CSO 2006 PWTF Loan W W TP upgrade 2007 PWTF Anderson Cove sewer PS CW 1 2007 PWTF W WTP upgrades 1994 CCWF Loan Callow Ave CSO design 1997 CCWF Loan Callow Ave CSO I 1998 DWSRF Loan corrosion control facility 2009 DWSRF UV Treatment Upgrade (ARRA) 2001 DWSRF Loan Tracyton WD upgrade 2002 DWSRF Loan Eastside flow &pressure 2002 DWSRF Loan Casad Damseismic upgrade 2003 DWSRF Loan Casad Damintake tower 2003 DWSRF Loan Pump Station 4 upgrade 2004 DWSRF Loan Anderson Creek 2004 DWSRF Loan seismic upgrades 1999 WPCRF Loan CSO plan update 1999 WPCRF Loan Anderson Cove CSO 1999 WPCRF Loan Callow Ave CSO final 2002 WPCRF Loan Anderson CV CSO red 2002 WPCRF Loan Cherry/Trenton CSO red 2002 WPCRF Loan Trenton pump station 2002 WPCRF Loan Tracyton Beach CSO 2002 WPCRF Loan Anderson Cove Basin 12 2003 WPCRF Pacific Ave CSO red -sep 2003 WPCRF Loan Pacific Ave CSO reduction 2004 WPCRF Loan Cherry/Trenton CSO red -1 2007 WPCRF WWTP upgrade 2009 WPCRF Gorst Sewerage Constuction 2009 WPCRF Gorst Septic System Design 2009 WPCRF Gorst Sewerage Design 2007 W/S Refunding Revenue bond Total revenue bonds and loans Maturity Interest Outstanding Date Rate 12/31/2012 07/01/14 1.0 $ 319,212 07/01/15 1.0 555,702 07/01/16 1.0 605,781 07/01/17 1.0 176,260 07/01/18 1.0 994,737 07/01/19 2.0 69,352 07/01/20 1.0 341,548 07/01/20 1.0 1,194,607 07/01/20 1.0 1,787,437 07/01/21 0.5 1,425,000 07/01/23 0.5 317,339 07/01/23 4.0 144,738 07/01/24 4.0 118,371 07/01/24 0.5 839,728 07/01/25 0.5 138,743 07/01/27 0.5 532,895 07/01/27 0.5 2,444,406 05/01/17 0.0 167,717 07/31/18 4.8 1,081,777 10/01/18 4.0 330,100 10/1/17 0.0 49,683 10/01/21 2.5 1,256,241 10/1/22 2.5 610,202 10/1/22 2.5 392,758 10/01/23 1.5 48,410 10/01/23 1.5 633,723 10/01/24 1.5 64,582 10/01/24 1.5 339,579 12/31/22 1.5 138,203 02/27/21 1.5 452,883 12/31/22 1.5 319,618 1/23/22 1.5 335,125 10/15/24 1.5 666,164 10/15/24 1.5 665,734 12/31/25 1.5 402,441 12/31/26 1.5 190,511 6/30/24 1.5 209,331 12/31/27 1.5 834,979 12/31/26 1.5 822,484 1/1/29 2.6 549,113 12/31/30 1.4 561,095 12/31/30 2.9 107,662 12/31/30 1.4 540,533 12/01/21 4.3 3,575,000 $ 27,351,504 City of Bremerton / 59 Revenue bond and loan debt service requirements to maturity are as follows: Year Ending December 31 2013 2014 2015 2016 2017 2018 -2022 2023 -2027 2028 -2030 Governmental Activities Principal Total $ Business Activities Interest Principal Interest $ - $ 3,050,562 $ 495,966 - - 3,075,667 426,867 - - 2,946,662 385,043 - - 2,752,546 329,556 - - 2,601,701 276,454 - - 9,689,046 669,794 - - 2,894,392 112,335 - - 340,928 9,011 $ - $ 27,351,504 $ 2,705,026 On February 20, 2003, the City issued $10,865,000 principal amount of Weekly Rate Demand Revenue Bonds, 2003, (Kitsap Regional Conference Center Parking Garage). Those bonds were secured by a letter of credit from Bank of America (the `Bank ") that initially expired on February 10, 2006, and was extended. The current letter of credit expired on August 10, 2011. On August 1, 2011 the letter of credit facility was replaced by issuance of a $9,675,000 limited tax general obligation bond anticipation note due on August 1, 2013. On May 23, 2013, the City refunded this bond anticipation note (see Note 19 Subsequent Events). The interest rate on the 2011 BAN is based on the BBA LIBOR Daily Floating Rate and is computed on the principal amount outstanding on the basis of a 360 day year and the actual days elapsed. The effective rate at December 31, 2012 was 1.1378 %. In 2009 the City was awarded a $ 6,272,523 Drinking Water Assistance loan, funded through the American Recovery and Reinvestment Act of 2009 for the design and construction of a UV Treatment and Chlorine disinfection Facility. Terms of the loan provide that at project completion, the lesser of the loan amount less the loan fee or the actual eligible costs less the loan fee will be forgiven. The project was completed in 2012 and the loan amount of $6,210,419 was forgiven. In proprietary funds, unamortized debt issue costs are recorded as deferred charges and bonds are displayed net of premium or discount. Annual interest expense is decreased by amortization of debt premium and increased by the amortization of debt issue costs and discount. At December 31, 2012, the city has $240,173 available in debt service funds to service the general bonded debt. Restricted assets in proprietary funds contain $1,428,425 in sinking funds and reserves as required by bond indentures. B. Refunded Debt The City issued $5,215,000 of general obligation refunding bonds to provide resources to purchase U.S. Government and state and Local Government Series securities that were placed in an irrevocable trust for the purpose of generating resources for all future debt service payments on $5,395,000 of refunded debt. As a result, the refunded bonds are considered to be defeased and the liability has been removed from the governmental activities column of the statement of net position. This advance refunding was undertaken to reduce total debt service payments over the next twenty two years by $1,689,887 and resulted in an economic gain of $963,804. 11. Changes in Long Term Liabilities During the year ended December 31, 2012, the following changes occurred in long -term liabilities: 60 / City of Bremerton Governmental Activities: Bonds payable: General obligation bonds Notes Payable Add unamortized premiums Less deferred refunding expense Total bonds payable: Claims and judgments Compensated absences Governmental activity long -term liabilities: Business -type Activities: Bonds payable: General obligation bonds Revenue bonds Less deferred refunding expense Total bonds payable: Intergovernmental loans Compensated Absences Business -type activity long -term liabilities: $ 34,300,000 $ 5,215,000 $ 6,840,000 $ 32,675,000 $ 9,870,000 48,239 - 13,239 35,000 - 338,513 122,033 28,421 432,125 26,502 (1,013,192) (258,813) (77,322) (1,194,683) (74,859) 33,673,560 5,078,220 6,804,338 31,947,442 9,821,643 1,759,683 409,438 1,276,937 892,184 440,367 2,168,174 2,172,368 1,963,410 2,377,132 - $ 37,601,417 $ 7,660,026 $ 10,044,685 $ 35,216,758 $ 10,262,010 $ 5,163,000 $ - $ 105,000 $ 5,058,000 $ 105,000 3,925,000 - 350,000 3,575,000 365,000 (229,548) - (25,505) (204,043) (25,505) 8,858,452 - 429,495 8,428,957 444,495 32,172,546 503,004 8,899,046 23,776,504 2,685,561 555,539 311,840 403,030 464,349 29,548 $ 41,586,537 $ 814,844 $ 9,731,571 $ 32,669,810 $ 3,159,604 The Risk Management, Equipment Maintenance and Information Technology internal service funds predominantly serve the governmental funds. Accordingly, long -tern liabilities for them are included as part of the above totals for governmental activities. At year end $892,184 of Risk Management claims and judgments and $60,508 of compensated absences are included in the above governmental activities amounts. Also, for the governmental activities, compensated absences are generally liquidated by the general fund and claims and judgments by the Risk Management internal service fund. 12. Contingencies and Litigation As of December 31, 2012, there were a small number of claims for damages and lawsuits pending against the City. In the opinion of the City's legal counsel, neither the potential liability for any single claim or lawsuit, nor the aggregate potential liability arising from all actions currently pending would materially affect the financial condition of the City. As discussed in Note 10, Long -Term Debt, the City is contingently liable for repayment of refunded debt. The City participates in a number of federal and state assisted programs. These grants are subject to audit by the grantor or their representatives. Such audits could result in requests for reimbursement to grantor agencies for expenditures disallowed under the terns of the grants. Management believes that such disallowances, if any, will be immaterial. City of Bremerton / 61 13. Restricted Net Position The government -wide statement of net position reports $5,817,894 of restricted net position, all of which is restricted by enabling legislation and external contractual commitments. 14. Interfund Balances and Transfers A. Interfund Balances Interfund balances at December 31, 2012 were as follows: Interfund balances at year end were a result of outstanding interfund loans as well as amounts due for services provided between funds. Amounts due for services will be liquidated early in 2013. Interfund loans are approved by City Council Resolution and include a repayment date. The following schedule is a summary of loans outstanding at year end including the year of final payment. Water General Other $ - $ - 163,781 Waste- Other Internal - 261,000 261,000 General Fund Govt Water Water Golf Proprietary Service Fiduciary Total General Fund $ - $ 80,141 $ 102,202 $ 317,195 $ 7,846 $ 48,062 $ 1,076 $ $ 556,522 Other governmental funds - 9,771 - - - 41,483 18,000 69,254 Water 37,473 315 - 10,001 5,255 - 53,044 Wastewater 27,950 - 538 - 2,419 - 30,907 Golf - - - - 820 820 Other proprietary funds 38,025 8,535 489 - 47,049 Fiduciary funds - 2 - - - - 2 Internal Service 25,025 1,415 3,717 3,111 - 1,005 8,050 42,323 Total $ 128,473 $ 100,179 $ 106,946 $ 330,307 $ 7,846 $ 98,224 $ 27,946 $ $ 799,921 Interfund balances at year end were a result of outstanding interfund loans as well as amounts due for services provided between funds. Amounts due for services will be liquidated early in 2013. Interfund loans are approved by City Council Resolution and include a repayment date. The following schedule is a summary of loans outstanding at year end including the year of final payment. Water Park Land 2025 $ 163,781 $ - $ - 163,781 Internal service Equipment purchase 2016 - - 261,000 261,000 General Arterial Street 2013 499,193 - 499,193 General Evergreen Remediation 2013 - 37,836 37,836 Total $ 163,781 $ 537,029 $ 261,000 $ 961,810 B. Interfund Transfers Interfund transfers at December 31, 2012 were as follows: General Other Waste- Other w Find Govt Water Water Proprietary Total General $ - $ 415,000 $1,310,542 $2,699,404 $ 107,568 $ 4,532,514 - - Other governmental fiords 840,000 357,317 344,859 1,542,176 Total $ 840,000 $ 772,317 $1,310,542 $2,699,404 $ 452,427 $ 6,074,690 Interfund transfers are the flow of assets without equivalent flows of assets in return and without a requirement for repayment. Generally funds flow between funds with tax or other resources to funds for payment of debt service, capital construction or in support of operations. This category also includes payment in lieu of taxes levied by the General fund on city utility funds that are not payments for, and are not reasonably equivalent in value to, services provided. 62 / City of Bremerton There were no significant transfers during 2012. 15. Receivable and Payable Balances A. Receivables Receivables at December 31. 2012 were as follows: Governmental Activities: General Fund Non -major and other funds Reconciliation of balances in fund financial statements to government -wide financial statements Total governmental activities Business -Type Activities: Water Golf Wastewater Other Proprietary Funds Reconciliation of balances in fund financial statements to government -wide financial statements Total business -type activities B. Payables $ 1,529,684 $ 2,231,103 $ 437,605 322,564 $ 1,967,289 $ 2,553,667 $ $ 15,437 $ $ 3,776,224 980,295 1,740,464 - 4,186 4,186 $ 995,732 $ 4,186 $ 5,520,874 $ 1,391,172 310,544 560,822 $ 2,247 $ 2,264,785 - - - 1,252 132 1,384 2,473,570 125 - 2,639 2,476,334 801,016 - - 870 801,886 - 2,444 2,444 $ 4,665,758 $ 125 $ 310,544 $ 562,074 $ 8,332 $ 5,546,833 Accounts Payable and other accrued liabilities at December 31, 2012 were as follows: Governmental Activities: General Fund Non -major and other funds Reconciliation of balances in fund financial statements to government -wide financial statements Total governmental activities $ 627,675 $ 1,416 $ 905,827 131,540 95,269 - $ 1,628,771 $ 132,956 $ 30,980 $ 25,303 $ 685,374 67 205,000 1,242,434 - $ 238,578 333,847 31,047 $ 468,881 $ 2,261,655 City of Bremerton / 63 Business -Type Activities: Water $ 293,450 $ - $ Golf 50,543 - Wastewater 226,680 - Other Proprietary funds 292,909 9,862 Reconciliation of balances in fiord financial statements to government -wide financial statements 123,817 Total business -type activities $ 987,399 $ 9,862 $ 16. Post Employment Benefits other than Pension $ 97,138 $ 390,588 - 50,543 95,890 322,570 2,367 305,138 123,817 - $ 195,395 $ 1,192,656 Statement No. 45 of the Governmental Accounting Standards Board, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions, establishes standards for reporting of post employment benefits other than pensions for financial statement for periods beginning after December 15, 2007. Plan Description As required by the Revised Code of Washington (RCW) Chapter 41.26, the City 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 healthcare plan administered by the City. The members necessary hospital, medical, and nursing care expenses not payable by worker's compensation, social security, insurance provided by another employer, other pension plan, or any other similar source are covered. Most medical coverage for eligible retirees is provided by one of the City's employee medical insurance programs. Under the authorization of the LEOFF Disability Board, direct payment is made for other retiree medical expenses not covered by standard medical plan benefit provisions. Finance reporting for the LEOFF retiree healthcare plan is included in the City's Comprehensive Annual Financial Report. Funding Policy Funding for LEOFF retiree healthcare costs is provided entirely by the City as required by RCW. The City's funding policy is based upon pay -as- you -go financing requirements. Annual OPEB Cost and Net OPEB Obli ag tion The City's annual other postemployment benefit (OPEB) cost is calculated based upon the annual required contribution (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover the normal cost each year and amortize any unfunded actuarial liabilities over a period of fifteen years as of January 1, 2012. The following table shows the components of the City's annual OPEB cost for the year, the amount actually contributed to the plan, and changes in the City's net OPEB. The net OPEB obligation of ($382,547) is included as a noncurrent asset on the Statement of Net Position. Determination of Annual Required Contribution: Amortization of UAAL* 1,492,940 Interest on Amortization Payment (11,498) Annual Required Contribution (ARC) $ 1,481,442 64 / City of Bremerton Determination of NET OPEB Obligation: Annual Required Contribution Adjustment to ARC Annual OPEB Cost Contributions Change in Net OPEB Obligations Net OPEB Obligations - beginning of year Net OPEB Obligations - end of year * Unfunded Actuarial Accrued Liability (UAAL) $ 1,481,442 33,727 $ 1,515,169 (1,483,000) $ 32,169 $ (414,716) $ (382,547) The City's OPEB cost, the percentage OPEB cost contributed to the plan and the net OPEB Assets for 2012 and the preceding three years, was as follows: 12/31/2010 $ 1,366,185 105.61% $ (357,107) 12/31/2011 $ 1,366,185 104.22% $ (414,716) 12/31/2012 $ 1,515,169 78.15% $ (382,547) Funded Status and Funding Progress As of December 31, 2011, the most recent actuarial valuation date, the plan was 0% funded. The accrued liability for benefits was $17,942,584 and the actuarial value of the assets was $0 resulting in a UAAL of $17,942,584. Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress presented as required supplementary information following the notes to the financial statement, presents multiyear trend information that show whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial liabilities for benefits. Actuarial Methods and Assumptions Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-tern volatility in actuarial accrued liabilities, consistent with the long -term perspective of the calculations. In the December 31, 2011 actuarial valuation, the projected unit credit actuarial cost method was used. The actuarial assumptions used included a 3.0% discount rate, which is based upon the long -tern investment yield on the investments that are expected to be used to finance payment of benefits. A medical inflation rate of 10% graded to 5% over six years was used along with a long term care inflation rate of 3.0 %. The UAAL is being amortized on an open amortization level dollar amount over 15 years. The remaining amortization period at December 31, 2012 was 14 years. 17. Segment Information The City operates a utility system providing water, wastewater and stormwater management services to the citizens of Bremerton and a portion of Kitsap County outside city boundaries. Operations are financed by user fees imposed on customers of each utility. The City has issued revenue bonds to finance improvements to its sewer system. While the operations of each utility are accounted for in separate funds, the repayment of the revenue bonds relies on the combined City of Bremerton / 65 revenues of all three utilities. In addition, the City operates a public golf course whose operations are funded entirely through user fees. With the exception of the combined utility, there are no revenue bonds issued or other revenue - backed debt outstanding for which full, detailed segment data is not provided in the proprietary fund financial statements. The key financial data for the year ended December 31, 2012 for the combined utility operations are as follows: Assets Current assets $ 21,303,837 Restricted assets 525,467 Capital assets 160,456,514 Other assets 490,992 Total assets 182,776,810 Liabilities Current liabilities 4,895,560 Long -tern liabilities 24,735,745 Total liabilities 29,631,305 Net Assets Restricted for debt service 1,493,512 Restricted for capital replacement 123,457 Unrestricted 18,423,527 Invested in capital assets net of related debt 133,105,009 Total net assets $ 153,145,505 Total operating revenues $ 24,804,870 Operating Expenditures: Operations & maintenance 15,003,247 Depreciation /ainortization/depletion 5,111,954 Total operating expenses 20,115,201 Operating income(loss) 4,689,669 Non - Operating Revenues/Expenses Interest revenue /expense (net) (365,180) Other (net) 424,895 Total non - operating revenues /expenses 59,715 Capital contributions 9,253,974 Transfers (4,462,373) Change in net assets 9,540,985 Beginning net assets 143,813,603 Prior period adjustment 20( 9,083) Ending net assets $ 153,145,505 66 / City of Bremerton Net cash provided By: (a) Operating activities $ 9,601,115 (b) Noncapital financing activities (4,033,220) (c) Capital and related financing activities (7,746,380) (d) Investing activities 628,181 Beginning cash and investment balance 3,471,398 Ending cash and investment balance $ 1,921,094 18. Prior Period Adjustment In 2008 the City entered into aprofessional services agreement for the design of 27 separate water main improvements, totaling over 23,000 feet of water mains. Construction for these projects was not funded in subsequent capital improvement budgets. With no foreseeable future plans to fund these projects, a prior period adjustment in the amount of $209,082 was posted in 2012 to remove the design costs from Work in Progress. 19. Accounting and Reporting Changes The 2012 financial statements are presented in accordance with the following new GASB Statements: • 60 — Service Concession Arrangements — not applicable at this time • 62 — Codification of AICPA and FASB Pronouncements • 63 — Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources and Net Position • 64 — Derivative Instruments — not applicable at this time 20. Subsequent Events On May 23, 2013, the City issued $8,965,000 in limited tax general obligation bonds (non - taxable) to refund the City's outstanding limited tax general obligation note, 2011, in the amount of $8,910,000 maturing on July 29, 2013 associated with the City's parking system. Moody's Investor Services affirmed the City's bond rating of Al for the 2013 limited tax general obligation refunding bonds (non - taxable). Also on May 23, 2013, the City issued $5,200,000 in limited tax general obligation bonds (taxable) to refund the City's outstanding limited tax general obligation bonds, 2009, in the amount of $5,058,000 maturing on December 1 of the years 2013 through 2028, inclusive. These bonds are associated with the City's Gold Mountain Golf Complex. The 2009 Bond was held in the City's investment portfolio and may be prepaid at any time. The 2013 Bonds were issued so the City can obtain the benefit of savings in total debt service requirements. Moody's Investor Services affirmed the City's bond rating of Al for the 2013 limited tax general obligation refunding bonds (taxable). City of Bremerton / 67 Required Supplementary Information LEOFF 1 Retiree Medical Benefits Schedule of Funding Progress Actuarial UAAL as a Actuarial Accrued Unfunded Actuarial Percentage Fiscal Year Value of Liability Unit Accrued Liabilities Funded Covered of Covered Ended Assets Cost UAAL Ratio Payroll Payroll 12/31/2008 $ - $ 16,191,238 $ 16,191,238 0.0% $ 673,125 2405.38% 12/31/2009 $ - $ 21,632,822 $ 21,632,822 0.0% $ 461,567 4686.82% 12/31/2011 $ - $ 17,942,584 $ 17,942,584 0.0% $ 341,195 5300.00% 68 / City of Bremerton THIS PAGE LEFT BLANK INTENTIONALLY. Combining Balance Sheet NonMajor Govermental Funds December 31, 2012 Page 1 of 3 Special Revenue Assets Cash & Cash Equivalents Investments Receivables Due from other funds Due from other governments Notes /contracts - deferred Total assets Arterial Street Street Lodging Tax Parldng System Community Block Grant Abatement Revolving Police Special Projects BKAT Gift & Donation $ - $ 112,744 $ 56,311 $ 87,737 $ 187,229 $ 106,023 $ 339,008 $ 92,279 $ 36,211 - 151,220 75,528 117,680 - 142,206 454,705 123,772 48,570 - 170,362 29,178 411,310 - - - - - - 60,116 - - - - - - - 1,780,201 - - - 115,498 - - - - - - - - 850,295 - - 130,000 - $ 1,780,201 $ 494,442 $ 161,017 $ 616,727 $ 1,153,022 $ 248,229 $ 793,713 $ 346,051 $ 84,781 Liabilities and Fund Balances Liabilities: Accounts /contracts payable $ 658,344 $ 56,289 $ 10,803 $ 49,524 $ 47,096 $ - $ 3,188 $ 1,121 $ - Due to other funds 499,229 1,481 15,000 16,237 71 - - 144 5,247 Due to other governments 4 46 - 17 - - - - - Employee wages payable 936 39,295 - - 3,675 - - 7,304 - Other current liabilities 195,000 10,000 - - - - - - - Deferred revenues - - - 332,115 850,295 - - 130,000 - Total liabilities 1,353,513 107,111 25,803 397,893 901,137 - 3,188 138,569 5,247 Fund balances: Restricted 426,688 - 111,728 218,834 251,885 - 790,525 24,776 - Committed - - - - - - - 182,706 79,534 Assigned - 387,331 23,486 - - 248,229 - - - Total fund balances 426,688 387,331 135,214 218,834 251,885 248,229 790,525 207,482 79,534 Total liabilities and fund balanc $ 1,780,201 $ 494,442 $ 161,017 $ 616,727 $ 1,153,022 $ 248,229 $ 793,713 $ 346,051 $ 84,781 n 0 Oo m i3 m 0 rn Special Revenue Combining Balance Sheet NonMajor Govermental Funds December 31, 2012 Debt Service Page 2 of 3 Liabilities and Fund Balances Liabilities: Accounts /contracts payable $ - $ - $ One Transportation Special - Due to other funds 2012 Debt 537,469 Trial Percent Benefits Revenue Bond 2010 2010 UTGO/ Government Service - - Improvement for Art District Total Fund LTGO LTGO (B) Center LTGO Total Assets 205,000 - - - - - Deferred revenues - - - 1,312,410 10,809 - Cash & Cash Equivalents $ 20,244 $ 22,101 $ 160,736 $ 1,220,623 $ 11,012 $ 56,356 $ 18,110 $ 1,415 $ 86,893 Investments 27,153 29,643 - 1,170,477 14,769 75,589 24,290 1,898 116,546 Receivables - - 28,551 639,401 13,912 31,094 26,745 - 71,751 Due from other funds - - - 60,116 - - - - - Due from other governments - - - 1,895,699 - - - - - Notes /contracts - deferred - - - 980,295 - - - - - Total assets $ 47,397 $ 51,744 $ 189,287 $ 5,966,611 $ 39,693 $ 163,039 $ 69,145 $ 3,313 $ 275,190 Liabilities and Fund Balances Liabilities: Accounts /contracts payable $ - $ - $ - $ 826,365 - Due to other funds - - 60 537,469 - - - - - Due to other governments - - - 67 - - - - - Employee wages payable - - - 51,210 - - - - - Other current liabilities - - - 205,000 - - - - - Deferred revenues - - - 1,312,410 10,809 - 24,208 - 35,017 Total liabilities - - 60 2,932,521 10,809 - 24,208 - 35,017 Fund balances: Restricted 43,174 - 189,227 2,056,837 800 - 2,010 - 2,810 Committed - 51,744 - 313,984 - - - - - Assigned 4,223 - - 663,269 28,084 163,039 42,927 3,313 237,363 Total fund balances 47,397 51,744 189,227 3,034,090 28,884 163,039 44,937 3,313 240,173 Total liabilities and fund balanc $ 47,397 $ 51,744 $ 189,287 $ 5,966,611 $ 39,693 $ 163,039 $ 69,145 $ 3,313 $ 275,190 0 n 0 Oo m i3 m 0 Combining Balance Sheet NonMajor Govermental Funds December 31, 2012 Page 3 of 3 n 0 Oo m i3 m 0 Capital Projects Total General Capital Nonmajor Harborside Park Govt Parks Evergreen Lower Projects Governmental Plaza Park Plaza Plaza Phase II Cap Impr Construction Remediation Wheaton Way Total Funds Assets Cash & Cash Equivalents $ - $ 28,772 $ 27,858 $ 89,593 $ 78,641 $ - $ 148,381 $ 373,245 $ 1,680,761 Investments - 38,593 37,364 120,171 105,479 - 199,021 500,628 1,787,651 Receivables - - - 49,017 - - - 49,017 760,169 Due from other funds - 4,138 - - 5,000 - - 9,138 69,254 Due from other governments - - 134,978 - 606,535 41,233 - 782,746 2,678,445 Notes /contracts - deferred - - - - - - - - 980,295 Total assets $ - $ 71,503 $ 200,200 $ 258,781 $ 795,655 $ 41,233 $ 347,402 $ 1,714,774 $ 7,956,575 Liabilities and Fund Balances Liabilities: Accounts /contracts payable $ - $ - $ 88,072 $ - $ 121,573 $ 1,357 $ - 211,002 $ 1,037,367 Due to other funds - - 4,138 - 57,765 37,836 - 99,739 637,208 Due to other governments - - - - - - - - 67 Employee wages payable - - - - - - - - 51,210 Other current liabilities - - - - - - - - 205,000 Deferred revenues - - - - - - - - 1,347,427 Total liabilities - - 92,210 - 179,338 39,193 - 310,741 3,278,279 Fund balances: Restricted - - 107,990 230,444 51,647 2,040 334,824 726,945 2,786,592 Committed - - - - - - - - 313,984 Assigned - 71,503 - 28,337 564,670 - 12,578 677,088 1,577,720 Total fund balances - 71,503 107,990 258,781 616,317 2,040 347,402 1,404,033 4,678,296 Total liabilities and fund balanc $ - $ 71,503 $ 200,200 $ 258,781 $ 795,655 $ 41,233 $ 347,402 $ 1,714,774 $ 7,956,575 n 0 Oo m i3 m 0 Combining Statement of Revenues, Expenditures and Changes in Fund Balances NonMajor Governmental Funds For the Year Ended December 31, 2012 Revenue Page 1 of 3 Expenditures Arterial Parking Community Abatement Police Special Gift & Trial Current Street Street Lodging Tax System Block Grant Revolving Projects BKAT Donation Improvement Revenues 183,691 - 6,975 15,000 Taxes - 6,260 - 264,144 595 - Property $ $ 1,787,630 $ $ $ $ $ $ $ $ Sales - - 417,131 - 682,711 4,029 - Business 476,499 - - - - 165 Other - - Licenses and permits - - - 395,000 - 265,833 - Intergovernmental 1,807,868 799,655 109,594 527,826 - 17,000 - 22,632 Charges for services (4,917) 103,135 - - 29,723 16,932 - 99,723 1,090 - Fines and forfeits - - - 256,118 - - 21,476 - - - Miscellaneous 3,455 11,005 1,321 880,020 5,810 2,413 62,355 2,302 20,269 464 Total revenues 1,806,406 1,390,294 418,452 1,136,138 563,359 19,345 83,831 385,023 21,359 23,096 Expenditures Current General government 183,691 - 6,975 15,000 Public safety - 6,260 - 264,144 595 - Transportation 544 1,787,630 - 688,024 - - - - Economic environment - - 43,000 - 682,711 4,029 - Culture and recreation 54,297 172,000 - - - 273,609 Debt service: Principal - - 395,000 - Interest and other debt issue costs - - 109,594 Capital Outlay 1,900,405 3,929 - - - - - - - - Total expenditures 1,900,949 2,035,807 215,000 1,192,618 682,711 4,029 264,144 273,609 7,570 15,000 Excess (deficiency) ofrevenues (94,543) (645,513) 203,452 (56,480) (119,352) 15,316 (180,313) 111,414 13,789 8,096 over expenditures Other Financing Sources (Uses) Proceeds of long term debt - - - - - Premiums on Bonds Sold Payments to refunded debt escrow agent - Transfers in 844,859 - Transfers out - (170,000) (421) (25,000) (10,000) Total other financing sources and uses 844,859 (170,000) (421) (25,000) (10,000) Other Changes in Fund Balance Change in reserves for inventory (23,264) - - - - - - Net change in fund balances (94,543) 176,082 33,452 (56,480) (119,773) 15,316 (180,313) 86,414 3,789 8,096 Fund balances-beginning 521,231 211,249 101,762 275,314 371,658 232,913 970,838 121,068 75,745 39,301 Fund balances-ending $ 426,688 S 387,331 S 135,214 S 218,834 S 251,885 S 248,229 S 790,525 S 207,482 S 79,534 S 47,397 14 fv n O Cb N i3 CD O Revenues Taxes Property Sales Business Other Licenses and permits Intergovernmental Charges for services Fines and forfeits Miscellaneous Total revenues Expenditures Current General government Public safety Transportation Economic environment Culture and recreation Debt service: Principal Interest and other debt issue costs Capital Outlay Total expenditures Excess (deficiency) ofrevenues over expenditures Other Financing Sources (Uses) Proceeds of long term debt Premiums on Bonds Sold Payments to refunded debt escrow agent Transfers in Transfers out Total other financing sources and uses Other Changes in Fund Balance Change in reserves for inventory Net change in fund balances Fund balances- beginning Fund balances- ending Combining Statement of Revenues, Expenditures and Changes in Fund Balances NonMajor Governmental Funds For the Year Ended December 31, 2012 Revenue Debt Service Page 2of3 One Pecent Transportation for Art Benefit District Total 2012 Bond 2010 2010 UTGO/ Government Fund LTGO LTGO(B) Center LTGO Total Harborside Park Plaza Plaza $ $ $ - $ 369,761 $ - $ 411,207 $ $ 780,968 $ $ 417,131 - 339,594 - 339,594 476,664 - - 265,833 - - - - 3,174,981 121,270 37,674 158,944 189,168 434,854 - - - - - 277,594 - - - - - 514 59 989,987 5,374 1,244 2,526 297,044 306,188 60 1,220 514 189,227 6,037,044 375,135 462,108 451,407 297,044 1,585,694 60 1,220 - - 205,666 - - - - - - 270,999 2,476,198 729,740 499,906 395,000 690,000 205,000 85,000 - 980,000 109,594 28,143 346,787 436,079 79,569 890,578 - 1,904,334 - - - - - 281,366 6,591,437 718,143 551,787 521,079 79,569 1,870,578 281,366 514 189,227 (554,393) (343,008) (89,679) (69,672) 217,475 (284,884) 60 (280,146) 5,215,000 5,215,000 122,033 122,033 - - - - (5,551,195) (5,551,195) - 844,859 225,000 50,000 72,500 347,500 200,000 (205,421) - - - - (34,396) - 639,438 225,000 50,000 72,500 (214,162) 133,338 (34,396) 200,000 - - (23,264) - - 514 189,227 61,781 (118,008) (39,679) 2,828 3,313 (151,546) (34,336) (80,146) 51,230 - 2,972,309 146,892 202,718 42,109 - 391,719 34,336 151,649 $ 51,744 $ 189,227 $ 3,034,090 $ 28,884 $ 163,039 $ 44,937 $ 3,313 $ 240,173 $ - $ 71,503 n O Cb N i3 CD O W Combining Statement of Revenues, Expenditures and Changes in Fund Balances NonMajor Governmental Funds For the Year Ended December 31, 2012 Expenditures Total Current Evergreen Nonmajor Park Plaza General Gov't Parks Remediation Lower Wheaton Governmental 205,666 Phase 11 CapImpr Construction Project Way Total Funds Revenues Transportation Taxes Economic environment - - Property $ $ $ $ $ $ $ 780,968 Sales Debt service: 756,725 Business Principal 13,239 476,664 Other Interest and other debt issue costs 427,807 3,353 - 427,807 427,807 Licenses and permits - - - - - - 265,833 Intergovernmental 1,544,528 2,316,206 773,816 41,233 8,821 2,368,398 5,702,323 Charges for services - (744,083) - - - - 434,854 Fines and forfeits - - - - - - 277,594 Miscellaneous 27,595 1,752 204,379 57 3,385 238,448 1,534,623 Total revenues 1,572,123 429,559 978,195 41,290 12,206 3,034,653 10,657,391 Expenditures Current General government 205,666 Public safety 270,999 Transportation 2,476,198 Economic environment - - 729,740 Culture and recreation 41,666 41,666 541,572 Debt service: - Principal 13,239 13,239 1,388,239 Interest and other debt issue costs - 3,353 - - 3,353 1,003,525 Capital Outlay 2,316,206 1,007,863 58,081 8,774 3,672,290 5,576,624 Total expenditures 2,316,206 - 1,066,121 58,081 8,774 3,730,548 12,192,563 Excess (deficiency) ofrevenues (744,083) 429,559 (87,926) (16,791) 3,432 (695,895) (1,535,172) over expenditures Other Financing Sources (Uses) Proceeds of long term debt - - 5,215,000 Premiums on Bonds Sold 122,033 Payments to refunded debt escrow agent - - - (5,551,195) Transfers in 34,396 421 234,817 1,427,176 Transfers out (200,000) (332,500) - (566,896) (772,317) Total other financing sources and uses (165,604) (332,500) 421 (332,079) 440,697 Other Changes in Fund Balance Change in reserves for inventory - - - (23,264) Net change in fund balances (909,687) 97,059 (87,505) (16,791) 3,432 (1,027,974) (1,117,739) Fund balances-beginning 1,017,677 161,722 703,822 18,831 343,970 2,432,007 5,796,035 Fund balances-ending $ 107,990 S 258,781 S 616,317 S 2,040 S 347,402 S 1,404,033 S 4,678,296 Page 3 of 3 n O Cb m CD CD O City of Bremerton / 75 Arterial Street Special Revenue Fund Other Governmental Funds Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual For the Year Ended December 31, 2012 Revenues Taxes Licenses and pennits Intergovernmental Charges for services Fines and forfeitures Other revenue Total revenues Expenditures Personnel Supplies, services & taxes Capital expenditure Debt service Transfers Total expenditures Excess (deficiency) of revenues over expenditures Fund balances - beginning Prior period adjustments Fund balances - ending 288 (288) - - 256 (256) 4,904,100 4,833,000 1,900,405 2,932,595 4,904,100 4,833,000 1,900,949 2,932,051 (546,656) (475,556) (94,543) 381,013 546,656 475,584 521,231 45,647 $ - $ 28 $ 426,688 $ 426,660 Variance with Original Final Final Budget Budget Budget Actual Positive 2012 2012 2012 (Negative) 4,357,444 4,357,444 1,807,868 (2,549,576) - - (4,917) (4,917) - - 3,455 3,455 4,357,444 4,357,444 1,806,406 (2,551,038) 288 (288) - - 256 (256) 4,904,100 4,833,000 1,900,405 2,932,595 4,904,100 4,833,000 1,900,949 2,932,051 (546,656) (475,556) (94,543) 381,013 546,656 475,584 521,231 45,647 $ - $ 28 $ 426,688 $ 426,660 76 / City of Bremerton Street Special Revenue Fund Other Governmental Funds Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual For the Year Ended December 31, 2012 Revenues Taxes Licenses and pennits Intergovernmental Charges for services Fines and forfeitures Other revenue Total revenues Expenditures Personnel Supplies, services & taxes Capital expenditure Debt service Transfers Total expenditures Excess (deficiency) of revenues over expenditures Fund balances - beginning Prior period adjustments Fund balances - ending $ 454,800 $ Variance with Original Final Final Budget Budget Budget Actual Positive 2012 2012 2012 (Negative) $ 454,800 $ 454,800 $ 476,499 $ 21,699 820,400 820,400 799,655 (20,745) 205,000 210,000 103,135 (106,865) 827,044 875,844 855,864 (19,980) 2,307,244 2,361,044 2,235,153 (125,891) 1,196,900 1,196,900 1,031,441 165,459 1,084,587 1,084,587 1,000,437 84,150 - 102,987 3,929 99,058 2,281,487 2,384,474 2,035,807 348,667 25,757 (23,430) 199,346 222,776 99,804 187,985 211,249 23,264 $ 125,561 $ 164,555 $ 410,595 $ 246,040 City of Bremerton / 77 Contingency Reserve Special Revenue Fund Other Governmental Funds Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual For the Year Ended December 31, 2012 Revenues Taxes Licenses and pennits Intergovernmental Charges for services Fines and forfeitures Other revenue Total revenues Expenditures Personnel Supplies, services & taxes Capital expenditure Debt service Transfers Total expenditures Excess (deficiency) of revenues over expenditures Fund balances - beginning Prior period adjustments Fund balances - ending Variance with Original Final Final Budget Budget Budget Actual Positive 2012 2012 2012 (Negative) 115,000 117,100 2,100 115,000 117,100 2,100 115,000 117,100 2,100 117,745 117,092 117,092 - $ 117,745 $ 232,092 $ 234,192 $ 2,100 78 / City of Bremerton Lodging Tax Special Revenue Fund Other Governmental Funds Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual For the Year Ended December 31, 2012 Revenues Taxes Licenses and pennits Intergovernmental Charges for services Fines and forfeitures Other revenue Total revenues Expenditures Personnel Supplies, services & taxes Capital expenditure Debt service Transfers Total expenditures Excess (deficiency) of revenues over expenditures Fund balances - beginning Prior period adjustments Fund balances - ending $ 380,000 $ Variance with Original Final Final Budget Budget Budget Actual Positive 2012 2012 2012 (Negative) $ 380,000 $ 380,000 $ 417,131 $ 37,131 100 100 1,321 1,221 380,100 380,100 418,452 38,352 230,000 215,000 215,000 - 155,000 170,000 170,000 - 385,000 385,000 385,000 - (4,900) (4,900) 33,452 38,352 85,212 101,762 101,762 - $ 80,312 $ 96,862 $ 135,214 $ 38,352 City of Bremerton / 79 Parking System Revenue Special Revenue Fund Other Governmental Funds Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual For the Year Ended December 31, 2012 Revenues Taxes Licenses and pennits Intergovernmental Charges for services Fines and forfeitures Other revenue Total revenues Expenditures Personnel Supplies, services & taxes Capital expenditure Debt service Transfers Total expenditures Excess (deficiency) of revenues over expenditures Fund balances - beginning Prior period adjustments Fund balances - ending 616,233 616,233 688,024 Variance with Original Final 504,594 Final Budget Budget Budget Actual Positive 2012 2012 2012 (Negative) 500 500 - (500) 300,000 300,000 256,118 (43,882) 855,000 855,000 880,020 25,020 1,155,500 1,155,500 1,136,138 (19,362) 616,233 616,233 688,024 (71,791) 675,705 675,705 504,594 171,111 1,291,938 1,291,938 1,192,618 99,320 (136,438) (136,438) (56,480) 79,958 540,041 275,314 275,314 - $ 403,603 $ 138,876 $ 218,834 $ 79,958 80 / City of Bremerton Community Development Block Grant Special Revenue Fund Other Governmental Funds Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual For the Year Ended December 31, 2012 Revenues Taxes Licenses and pennits Intergovernmental Charges for services Fines and forfeitures Other revenue Total revenues Expenditures Personnel Supplies, services & taxes Capital expenditure Debt service Transfers Total expenditures Excess (deficiency) of revenues over expenditures Fund balances - beginning Prior period adjustments Fund balances- ending 199,200 199,200 103,897 95,303 2,400,775 2,400,775 578,814 1,821,961 421 421 - 2,599,975 2,600,396 683,132 1,917,264 (72,338) (72,759) (119,773) (47,014) 390,453 372,894 371,658 (1,236) $ 318,115 $ 300,135 $ 251,885 $ (48,250) Variance with Original Final Final Budget Budget Budget Actual Positive 2012 2012 2012 (Negative) 199,200 199,200 103,897 95,303 2,400,775 2,400,775 578,814 1,821,961 421 421 - 2,599,975 2,600,396 683,132 1,917,264 (72,338) (72,759) (119,773) (47,014) 390,453 372,894 371,658 (1,236) $ 318,115 $ 300,135 $ 251,885 $ (48,250) 2,488,311 2,488,311 527,826 (1,960,485) 30,000 30,000 29,723 (277) 9,326 9,326 5,810 (3,516) 2,527,637 2,527,637 563,359 (1,964,278) 199,200 199,200 103,897 95,303 2,400,775 2,400,775 578,814 1,821,961 421 421 - 2,599,975 2,600,396 683,132 1,917,264 (72,338) (72,759) (119,773) (47,014) 390,453 372,894 371,658 (1,236) $ 318,115 $ 300,135 $ 251,885 $ (48,250) City of Bremerton / 81 Abatement Revolving Special Revenue Fund Other Governmental Funds Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual For the Year Ended December 31, 2012 Revenues Taxes Licenses and pennits Intergovernmental Charges for services Fines and forfeitures Other revenue Total revenues Expenditures Personnel Supplies, services & taxes Capital expenditure Debt service Transfers Total expenditures Excess (deficiency) of revenues over expenditures Fund balances - beginning Prior period adjustments Fund balances - ending 42,000 42,000 4,029 37,971 42,000 42,000 4,029 37,971 (35,500) (35,500) 15,316 50,816 212,871 232,913 232,913 - $ 177,371 $ 197,413 $ 248,229 $ 50,816 Variance with Original Final Final Budget Budget Budget Actual Positive 2012 2012 2012 (Negative) 5,500 5,500 16,932 11,432 1,000 1,000 2,413 1,413 6,500 6,500 19,345 12,845 42,000 42,000 4,029 37,971 42,000 42,000 4,029 37,971 (35,500) (35,500) 15,316 50,816 212,871 232,913 232,913 - $ 177,371 $ 197,413 $ 248,229 $ 50,816 82 / City of Bremerton Police Special Projects Special Revenue Fund Other Governmental Funds Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual For the Year Ended December 31, 2012 Revenues Taxes Licenses and pennits Intergovernmental Charges for services Fines and forfeitures Other revenue Total revenues Expenditures Personnel Supplies, services & taxes Capital expenditure Debt service Transfers Total expenditures Excess (deficiency) of revenues over expenditures Fund balances - beginning Prior period adjustments Fund balances - ending 359,700 359,700 264,144 95,556 50,000 50,000 - 50,000 409,700 409,700 264,144 145,556 (303,700) (303,700) (180,313) 123,387 863,205 970,838 970,838 - $ 559,505 $ 667,138 $ 790,525 $ 123,387 Variance with Original Final Final Budget Budget Budget Actual Positive 2012 2012 2012 (Negative) 31,000 31,000 21,476 (9,524) 75,000 75,000 62,355 (12,645) 106,000 106,000 83,831 (22,169) 359,700 359,700 264,144 95,556 50,000 50,000 - 50,000 409,700 409,700 264,144 145,556 (303,700) (303,700) (180,313) 123,387 863,205 970,838 970,838 - $ 559,505 $ 667,138 $ 790,525 $ 123,387 City of Bremerton / 83 Public Access TV Operations Special Revenue Fund Other Governmental Funds Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual For the Year Ended December 31, 2012 Revenues Taxes Licenses and pennits Intergovernmental Charges for services Fines and forfeitures Other revenue Total revenues Expenditures Personnel Supplies, services & taxes Capital expenditure Debt service Transfers Total expenditures Excess (deficiency) of revenues over expenditures Fund balances - beginning Prior period adjustments Fund balances - ending $ - $ Variance with Original Final Final Budget Budget Budget Actual Positive 2012 2012 2012 (Negative) $ - $ - $ 165 $ 165 240,000 240,000 265,833 25,833 17,000 17,000 17,000 - 78,040 78,040 99,723 21,683 1,600 1,600 2,302 702 336,640 336,640 385,023 48,383 239,700 239,700 231,715 7,985 37,154 47,154 41,894 5,260 35,000 25,000 - 25,000 25,000 25,000 25,000 - 336,854 336,854 298,609 38,245 (214) (214) 86,414 86,628 190,695 121,068 121,068 - $ 190,481 $ 120,854 $ 207,482 $ 86,628 84 / City of Bremerton Gift and Donation Special Revenue Fund Other Governmental Funds Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual For the Year Ended December 31, 2012 Revenues Taxes Licenses and pennits Intergovernmental Charges for services Fines and forfeitures Other revenue Total revenues Expenditures Personnel Supplies, services & taxes Capital expenditure Debt service Transfers Total expenditures Excess (deficiency) of revenues over expenditures Fund balances - beginning Prior period adjustments Fund balances - ending 1,000 1,000 1,090 90 16,360 16,360 20,269 3,909 17,360 17,360 21,359 3,999 29,600 Variance with Original Final Final Budget Budget Budget Actual Positive 2012 2012 2012 (Negative) 1,000 1,000 1,090 90 16,360 16,360 20,269 3,909 17,360 17,360 21,359 3,999 29,600 29,600 7,570 22,030 5,000 10,000 10,000 - 34,600 39,600 17,570 22,030 (17,240) (22,240) 3,789 26,029 65,610 75,746 75,745 (1) $ 48,370 $ 53,506 $ 79,534 $ 26,028 City of Bremerton / 85 Trial Improvement Special Revenue Fund Other Governmental Funds Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual For the Year Ended December 31, 2012 Revenues Taxes Licenses and pennits Intergovernmental Charges for services Fines and forfeitures Other revenue Total revenues Expenditures Personnel Supplies, services & taxes Capital expenditure Debt service Transfers Total expenditures Excess (deficiency) of revenues over expenditures Fund balances - beginning Prior period adjustments Fund balances - ending Variance with Original Final Final Budget Budget Budget Actual Positive 2012 2012 2012 (Negative) 22,000 22,000 22,632 632 464 464 22,000 22,000 23,096 1,096 15,000 15,000 15,000 - 15,000 15,000 15,000 - 7,000 7,000 8,096 1,096 38,643 39,301 39,301 - $ 45,643 $ 46,301 $ 47,397 $ 1,096 86 / City of Bremerton One Percent For Arts Special Revenue Fund Other Governmental Funds Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual For the Year Ended December 31, 2012 Variance with Original Final Final Budget Budget Budget Actual Positive 2012 2012 2012 (Negative) Revenues Taxes - Licenses and pennits - - - - Intergovennnental - - - - Charges for services - - - - Fines and forfeitures - - - - Other revenue 440 440 514 74 Total revenues 440 440 514 74 Expenditures Personnel - - - - Supplies, services & taxes 500 500 - 500 Capital expenditure 10,000 10,000 - 10,000 Debt service - - - - Transfers - - - - Total expenditures 10,500 10,500 - 10,500 Excess (deficiency) of revenues (10,060) (10,060) 514 10,574 over expenditures Fund balances - beginning 53,433 51,230 51,230 (0) Prior period adjustments - - - - Fund balances-ending $ 43,373 $ 41,170 $ 51,744 $ 10,574 City of Bremerton / 87 Conference Center Operations Special Revenue Fund Other Governmental Funds Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual For the Year Ended December 31, 2012 Revenues Taxes Licenses and pennits Intergovernmental Charges for services Fines and forfeitures Other revenue Total revenues Expenditures Personnel Supplies, services & taxes Capital expenditure Debt service Transfers Total expenditures Excess (deficiency) of revenues over expenditures Fund balances - beginning Prior period adjustments Fund balances - ending - - 38 (38) 1,543,157 1,543,157 1,474,070 69,087 1,543,157 1,543,157 1,474,108 69,049 (57,667) (57,667) (121,496) (63,829) 310,003 363,371 363,372 1 $ 252,336 $ 305,704 $ 241,876 $ (63,828) Variance with Original Final Final Budget Budget Budget Actual Positive 2012 2012 2012 (Negative) 1,321,490 1,321,490 1,185,923 (135,567) 164,000 164,000 166,689 2,689 1,485,490 1,485,490 1,352,612 (132,878) - - 38 (38) 1,543,157 1,543,157 1,474,070 69,087 1,543,157 1,543,157 1,474,108 69,049 (57,667) (57,667) (121,496) (63,829) 310,003 363,371 363,372 1 $ 252,336 $ 305,704 $ 241,876 $ (63,828) 88 / City of Bremerton Revenues Taxes Licenses and pennits Intergovernmental Charges for services Fines and forfeitures Other revenue Total revenues Transportation Benefit District Other Governmental Funds Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual For the Year Ended December 31, 2012 Variance with Original Final Final Budget Budget Budget Actual Positive 2012 2012 2012 (Negative) 150,093 189,168 39,075 59 59 Expenditures Personnel Supplies, services & taxes Capital expenditure Debt service Transfers Total expenditures Excess (deficiency) of revenues over expenditures Fund balances - beginning Prior period adjustments Fund balances - ending 150,093 189,227 39,134 150,093 189,227 39,134 $ - $ 150,093 $ 189,227 $ 39,134 City of Bremerton / 89 Bond Debt Service Fund Other Governmental Funds Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual For the Year Ended December 31, 2012 Revenues Taxes Licenses and pennits Intergovernmental Charges for services Fines and forfeitures Other revenue Total revenues Expenditures Personnel Supplies, services & taxes Capital expenditure Debt service Transfers Total expenditures Excess (deficiency) of revenues over expenditures Fund balances - beginning Prior period adjustments Fund balances - ending $ 355,400 $ Variance with Original Final Final Budget Budget Budget Actual Positive 2012 2012 2012 (Negative) $ 355,400 $ 355,400 $ 369,761 $ 14,361 227,500 227,500 230,374 2,874 582,900 582,900 600,135 17,235 718,250 718,250 718,143 107 718,250 718,250 718,143 107 (135,350) (135,350) (118,008) 17,342 152,235 146,892 146,892 - $ 16,885 $ 11,542 $ 28,884 $ 17,342 90 / City of Bremerton 2010 LTGO Bond Fund Other Governmental Funds Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual For the Year Ended December 31, 2012 Revenues Taxes Licenses and pennits Intergovernmental Charges for services Fines and forfeitures Other revenue Total revenues Expenditures Personnel Supplies, services & taxes Capital expenditure Debt service Transfers Total expenditures Excess (deficiency) of revenues over expenditures Fund balances - beginning Prior period adjustments Fund balances - ending $ 330,000 $ 330,000 $ 339,594 $ 9,594 121,270 121,270 121,270 - 50,775 50,775 51,244 469 502,045 502,045 512,108 10,063 551,880 551,880 551,787 93 551,880 551,880 551,787 93 (49,835) (49,835) (39,679) 10,156 204,244 202,718 202,718 - $ 154,409 $ 152,883 $ 163,039 $ 10,156 Variance with Original Final Final Budget Budget Budget Actual Positive 2012 2012 2012 (Negative) $ 330,000 $ 330,000 $ 339,594 $ 9,594 121,270 121,270 121,270 - 50,775 50,775 51,244 469 502,045 502,045 512,108 10,063 551,880 551,880 551,787 93 551,880 551,880 551,787 93 (49,835) (49,835) (39,679) 10,156 204,244 202,718 202,718 - $ 154,409 $ 152,883 $ 163,039 $ 10,156 City of Bremerton / 91 2010 UTGO Ref/ UTGO B Bond Fund Other Governmental Funds Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual For the Year Ended December 31, 2012 Revenues Taxes Licenses and pennits Intergovernmental Charges for services Fines and forfeitures Other Revenue Total revenues Expenditures Personnel Supplies, services & taxes Capital expenditure Debt service Transfers Total expenditures Excess (deficiency) of revenues over expenditures Fund balances - beginning Prior period adjustments Fund balances - ending $ 412,800 $ Variance with Original Final Final Budget Budget Budget Actual Positive 2012 2012 2012 (Negative) $ 412,800 $ 412,800 $ 411,207 $ (1,593) 37,675 37,675 37,674 (1) 73,150 73,150 75,026 1,876 523,625 523,625 523,907 282 520,775 521,105 521,079 26 520,775 521,105 521,079 26 2,850 2,520 2,828 308 29,221 42,109 42,109 - $ 32,071 $ 44,629 $ 44,937 $ 308 92 / City of Bremerton Government Center LTGO Fund Other Governmental Funds Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual For the Year Ended December 31, 2012 Revenues Taxes Licenses and pennits Intergovernmental Charges for services Fines and forfeitures Other revenue Total revenues Expenditures Personnel Supplies, services & taxes Capital expenditure Debt service Transfers Total expenditures Excess (deficiency) of revenues over expenditures Fund balances - beginning Prior period adjustments Fund balances - ending Variance with Original Final Final Budget Budget Budget Actual Positive 2012 2012 2012 (Negative) 5,634,051 5,634,077 26 5,634,051 5,634,077 26 5,630,398 5,630,764 (366) 5,630,398 5,630,764 (366) 3,653 3,313 (340) $ - $ 3,653 $ 3,313 $ (340) City of Bremerton / 93 Harborside Plaza Commons Capital Projects Fund Other Governmental Funds Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual For the Year Ended December 31, 2012 Revenues Taxes Licenses and pennits Intergovernmental Charges for services Fines and forfeitures Other revenue Total revenues Expenditures Personnel Supplies, services & taxes Capital expenditure Debt service Transfers Total expenditures Excess (deficiency) of revenues over expenditures Fund balances - beginning Prior period adjustments Fund balances - ending Variance with Original Final Final Budget Budget Budget Actual Positive 2012 2012 2012 (Negative) 60 60 60 60 - 34,396 34,396 - - 34,396 34,396 - - (34,396) (34,336) 60 34,396 34,336 (60) 94 / City of Bremerton Park Plaza Capital Projects Fund Other Governmental Funds Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual For the Year Ended December 31, 2012 Revenues Taxes Licenses and pennits Intergovernmental Charges for services Fines and forfeitures Other revenue Total revenues Expenditures Personnel Supplies, services & taxes Capital expenditure Debt service Transfers Total expenditures Excess (deficiency) of revenues over expenditures Fund balances - beginning Prior period adjustments Fund balances - ending Variance with Original Final Final Budget Budget Budget Actual Positive 2012 2012 2012 (Negative) 200,000 201,220 1,220 200,000 201,220 1,220 109,600 350,000 281,365 68,635 109,600 350,000 281,365 68,635 (109,600) (150,000) (80,145) 69,855 110,319 151,648 151,648 - $ 719 $ 1,648 $ 71,503 $ 69,855 City of Bremerton / 95 Park Plaza Phase II Capital Projects Fund Other Governmental Funds Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual For the Year Ended December 31, 2012 Revenues Taxes Licenses and pennits Intergovernmental Charges for services Fines and forfeitures Other revenue Total revenues Expenditures Personnel Supplies, services & taxes Capital expenditure Debt service Transfers Total expenditures Excess (deficiency) of revenues over expenditures Fund balances - beginning Prior period adjustments Fund balances - ending 2,366,420 1,960,331 1,544,528 (415,803) 170,000 - - - 211,330 1,133,340 61,990 (1,071,350) 2,747,750 3,093,671 1,606,518 (1,487,153) 4,089,802 3,909,586 2,316,206 1,593,380 - 200,000 200,000 - 4,089,802 4,109,586 2,516,206 1,593,380 (1,342,052) (1,015,915) (909,688) 106,227 1,342,052 1,015,975 1,017,678 1,703 $ - $ 60 $ 107,990 $ 107,930 Variance with Original Final Final Budget Budget Budget Actual Positive 2012 2012 2012 (Negative) 2,366,420 1,960,331 1,544,528 (415,803) 170,000 - - - 211,330 1,133,340 61,990 (1,071,350) 2,747,750 3,093,671 1,606,518 (1,487,153) 4,089,802 3,909,586 2,316,206 1,593,380 - 200,000 200,000 - 4,089,802 4,109,586 2,516,206 1,593,380 (1,342,052) (1,015,915) (909,688) 106,227 1,342,052 1,015,975 1,017,678 1,703 $ - $ 60 $ 107,990 $ 107,930 96 / City of Bremerton General Government Improvements Capital Projects Fund Other Governmental Funds Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual For the Year Ended December 31, 2012 Revenues Taxes Licenses and pennits Intergovernmental Charges for services Fines and forfeitures Other revenue Total revenues Expenditures Personnel Supplies, services & taxes Capital expenditure Debt service Transfers Total expenditures Excess (deficiency) of revenues over expenditures Fund balances - beginning Prior period adjustments Fund balances - ending $ 380,000 $ Variance with Original Final Final Budget Budget Budget Actual Positive 2012 2012 2012 (Negative) $ 380,000 $ 380,000 $ 427,807 $ 47,807 800 800 1,752 952 380,800 380,800 429,559 48,759 332,500 332,500 332,500 - 332,500 332,500 332,500 - 48,300 48,300 97,059 48,759 185,141 161,722 161,722 - $ 233,441 $ 210,022 $ 258,781 $ 48,759 City of Bremerton / 97 Park Facilities Construction Capital Projects Fund Other Governmental Funds Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual For the Year Ended December 31, 2012 Revenues Taxes Licenses and pennits Intergovernmental Charges for services Fines and forfeitures Other revenue Total revenues Expenditures Personnel Supplies, services & taxes Capital expenditure Debt service Transfers Total expenditures Excess (deficiency) of revenues over expenditures Fund balances - beginning Prior period adjustments Fund balances - ending 5,700 - 41,666 (41,666) 1,334,000 1,376,500 1,007,863 368,637 - 19,800 16,592 3,208 1,339,700 1,396,300 1,066,121 330,179 (369,700) (425,879) (87,505) 338,374 719,308 783,948 703,822 (80,126) $ 349,608 $ 358,069 $ 616,317 $ 258,248 Variance with Original Final Final Budget Budget Budget Actual Positive 2012 2012 2012 (Negative) 745,000 745,000 773,816 28,816 225,000 225,421 204,800 (20,621) 970,000 970,421 978,616 8,195 5,700 - 41,666 (41,666) 1,334,000 1,376,500 1,007,863 368,637 - 19,800 16,592 3,208 1,339,700 1,396,300 1,066,121 330,179 (369,700) (425,879) (87,505) 338,374 719,308 783,948 703,822 (80,126) $ 349,608 $ 358,069 $ 616,317 $ 258,248 98 / City of Bremerton Evergreen Park Remediation Capital Projects Fund Other Governmental Funds Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual For the Year Ended December 31, 2012 Revenues Taxes Licenses and pennits Intergovernmental Charges for services Fines and forfeitures Other revenue Total revenues Expenditures Personnel Supplies, services & taxes Capital expenditure Debt service Transfers Total expenditures Excess (deficiency) of revenues over expenditures Fund balances - beginning Prior period adjustments Fund balances - ending 82,500 80,000 58,081 21,919 82,500 80,000 58,081 21,919 (21,250) (18,750) (16,791) 1,959 149,301 18,831 18,831 - $ 128,051 $ 81 $ 2,040 $ 1,959 Variance with Original Final Final Budget Budget Budget Actual Positive 2012 2012 2012 (Negative) 60,750 60,750 41,233 (19,517) 500 500 57 (443) 61,250 61,250 41,290 (19,960) 82,500 80,000 58,081 21,919 82,500 80,000 58,081 21,919 (21,250) (18,750) (16,791) 1,959 149,301 18,831 18,831 - $ 128,051 $ 81 $ 2,040 $ 1,959 City of Bremerton / 99 Lower Wheaton Way Capital Projects Fund Other Governmental Funds Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual For the Year Ended December 31, 2012 Revenues Taxes Licenses and pennits Intergovernmental Charges for services Fines and forfeitures Other revenue Total revenues Expenditures Personnel Supplies, services & taxes Capital expenditure Debt service Transfers Total expenditures Excess (deficiency) of revenues over expenditures Fund balances - beginning Prior period adjustments Fund balances - ending 1,610,135 1,610,135 - 1,610,135 8,774 (8,774) 1,610,135 1,610,135 8,774 1,601,361 (242,051) (242,051) 3,431 245,482 242,076 343,971 343,971 - $ 25 $ 101,920 $ 347,402 $ 245,482 Variance with Original Final Final Budget Budget Budget Actual Positive 2012 2012 2012 (Negative) 1,368,084 1,368,084 8,821 (1,359,263) - - 3,384 3,384 1,368,084 1,368,084 12,205 (1,355,879) 1,610,135 1,610,135 - 1,610,135 8,774 (8,774) 1,610,135 1,610,135 8,774 1,601,361 (242,051) (242,051) 3,431 245,482 242,076 343,971 343,971 - $ 25 $ 101,920 $ 347,402 $ 245,482 900 / City of Bremerton Combining Statement of Net Position Other Proprietary Funds December 31, 2012 Business -type Activities Enterprise Funds Gorst Creek Assets Current assets Cash & Cash Equivalents $ 876,220 11,047 $ 887,267 Investments 1,175,258 14,816 1,190,074 External receivables 801,016 - 801,016 Interest receivable 859 11 870 Due from other funds 47,049 - 47,049 Due from other governments 538,032 144,534 682,566 Total current assets 3,438,434 170,408 3,608,842 Noncurrent assets: Capital assets net of depreciation 5,271,284 - 5,271,284 Total noncurrent assets 5,271,284 - 5,271,284 Total assets $ 8,709,718 $ 170,408 $ 8,880,126 Deferred outflows of resources $ - $ - $ - Liabilities Current liabilities: Accounts /contract payable $ 270,421 32,350 $ 302,771 Due to other funds 98,224 - 98,224 Employee wages payable 28,229 28,229 Other accrued liabilities 2,367 2,367 Current portion of long term debt 13,177 13,177 Custodial accounts 500 500 Total current liabilities 412,918 32,350 445,268 Noncurrent liabilities: Bonds, notes and loans payable 108,507 - 108,507 Compensated absences 45,661 45,661 Total noncurrent liabilities 154,168 - 154,168 Total liabilities $ 567,086 $ 32,350 $ 599,436 Deferred inflows of resources $ - $ - $ - Net Position Net investment in capital assets 5,152,913 - 5,152,913 Unrestricted 2,989,719 138,058 3,127,777 Total net position $ 8,142,632 $ 138,058 $ 8,280,690 City of Bremerton / 909 Combining Statement of Revenues, Expenses, and Changes in Fund Net Position Other Proprietary Funds For the Year Ended December 31, 2012 Operating revenues: Charges for services Other operating revenue Total operating revenues Operating expenses: General operations Maintenance Customer service and marketing General administration Depreciation and amortization Property, excise and B &O taxes Total operating expenses Operating income (loss) Business -type Activities Enterprise Funds Gorst Creek ,_ 1 $ 2,214,871 $ - $ 2,214,871 179,295 179,295 2,214,871 179,295 2,394,166 409,072 1,148,106 116,745 245,279 96,564 39,257 2,277,063 117, 103 2,055,023 159,848 222,040 222,040 (42,745) 631,112 1,148,106 116,745 245,279 96,564 39,257 Nonoperating revenues (expenses) Interest and investment revenue 20,346 Interest expense (4,931) Other nonoperating revenue /expense 208 Total nonoperating revenues (expenses) 15,623 Income (loss) before contributions and transfers 175,471 Capital contributions Transfers out Change in net assets 1,085,226 (452,427) 808,270 811 21, 157 (4,931) , )no U 1 1 1 V,TJT (41,934) 133,537 1,085,226 (452,427) (41,934) 766,336 Total net assets - beginning 7,345,710 179,992 7,525,702 Prior period adjustments (11,348) - (11,348) Total net assets - ending $ 8,142,632 $ 138,058 $ 8,280,690 902 / City of Bremerton Combining Statement of Cash Flows Other Proprietary Funds For the Year Ended December 31, 2012 Page 1 of 2 Cash Flows From Operating Activities Cash received from customers Cash payments to suppliers Cash payments to employees Other operating receipts and payments Net cash provided by operating activities Cash Flows From Noncapital Financing Activities Transfers out Other nonoperating revenues /expenses Net cash provided (used) by noncapital financing activities Cash Flows From Capital and Related Financing Activies Acquisition and construction of capital assets Capital contributions Loan/grant proceeds Principal paid on other debt Interest paid on revenue bonds and other debt Net cash provided (used) for capital and related financing activities Cash Flows From Investing Activities Net change in investments Interest on loans and investments Net cash provided in investing activities Business -type Activities Nonmajor Enterprise Funds Gorst Creek Stormwater Watershed Total $ 2,053,269 $ - $ 2,053,269 (876,119) (204,567) (1,080,686) (808,440) (7) (808,447) - 111,996 111,996 368,710 (92,578) 276,132 (445,229) - (445,229) 208 - 208 (445,021) - (445,021) (198,769) - (198,769) 42,798 - 42,798 202,690 - 202,690 (9,864) - (9,864) (5,129) - (5,129) 31,726 - 31,726 442,758 76,847 519,605 21,254 900 22,154 464,012 77,747 541,759 Net increase (decrease) in cash and cash equivalents 419,427 (14,831) 404,596 Cash - beginning of year 456,793 25,878 482,671 Cash - end of year $ 876,220 $ 11,047 $ 887,267 Cash at the end of the year consists of: Operating fund cash 876,220 11,047 887,267 Total cash at end of year $ 876,220 $ 11,047 $ 887,267 City of Bremerton / 903 Combining Statement of Cash Flows Other Proprietary Funds For the Year Ended December 31, 2012 Page 2 of 2 Business -type Activities Nonmajor Enterprise Funds Gorst Creek Stormwater Watershed Total Reconciliation of operating income to net cash provided by operating activities: Operating income (loss) Adjustments to reconcile operating income to net cash provided by operating activates: Depreciation Decrease (increase) in receivables Decrease (increase) in due from other funds /govt Increase (decrease) in accounts payable Increase (decrease) in due to other funds /govt Increase (decrease) in employee wages payable Increase (decrease) in employee leaves payable Net cash provided by operating activities 159,848 $ (42,745) $ 117,103 96,564 - 96,564 (167,183) - (167,183) 6,516 (67,299) (60,783) 240,597 17,473 258,070 45,798 - 45,798 (5,575) (7) (5,582) (7,855) - (7,855) $ 368,710 $ (92,578) $ 276,132 Noncash investing, capital and financial activities; Developers contributed infrastructure $ 455,542 $ - $ 455,542 904 / City of Bremerton Combining Statement of Net Position Internal Service Funds December 31, 2012 Assets Current assets: Cash & Cash Equivalents Restricted. Investments Investments Interest receivable Due from other funds Inventories Prepayments Total current assets Noncurrent assets: Prepaid. Pension Capital assets not of depreciation Other noncurrent assets Total noncurrent assets Total assets Deferred outflows of resources Liabilities Current liabilities: Accounts/contract payable Due to other funds Employee wages payable Other accrued. liabilities Current portion of long term debt Total current liabilities Noncurrent liabilities: Claims and judgements payable Compensated. absences Total noncurrent liabilities Total liabilities Deferred inflows of resources Net Position Restricted. Unrestricted. Total not position Business -type Activities Enterprise Funds Risk Employment Accrued. Leave Equipment Equipment Information Management Security Liability Maintenance Reserve Technology Total S 884,657 S 76,391 S 18,011 S 142,045 S 2,495,513 S 107,002 S 3,723,619 100,000 - - - - - 100,000 1,086,574 102,462 24,158 190,523 3,347,190 143,521 4,894,428 867 75 18 139 2,446 105 3,650 11,905 10,213 10,199 10,006 261,000 - 303,323 - - - 90,325 - - 90,325 61,016 - - - - - 61,016 2,145,019 189,141 52,386 433,038 6,106,149 250,628 9,176361 333,401 - - - - - 333,401 - - - - 3,765,477 6,158 3,771,635 333,401 - - - 3,765,477 6,158 4,105,036 S 2,478,420 S 189,141 S 52,386 S 433,038 S 9,871,626 S 256,786 S 13,281,397 S - S - S - S - S - S - S - S 24,327 S 3,767 S - $ 60,454 S 123,817 S 6,721 S 219,086 - - - 18,550 7,847 1,549 27,946 - - 40,448 17,187 - 18,720 76,355 440,367 - - - - - 440,367 - - - 1,234 - 1,569 2,803 464,694 3,767 40,448 97,425 131,664 28,559 766,557 451,818 - - - - - 451,818 - - - 21,199 - 36,506 57,705 451,818 - - 21,199 - 36,506 509,523 $ 916,512 S 3,767 S 40,448 S 118,624 S 131,664 S 65,065 S 1,276,080 100,000 - - - - - 100,000 1,461,908 185,374 11,938 314,414 9,739,962 191,721 11,905,317 S 1,561,908 S 185,374 S 11,938 S 314,414 S 9,739,962 S 191,721 S 12,005,317 City of Bremerton / 905 Combining Statement of Revenues, Expenses and Changes in Fund Net Position Internal Service Funds For the Year Ended December 31, 2012 Governmental Activities Internal Service Funds Operating revenues: Charges for services Interest & dividend income Other operating revenue Total operating revenues Operating expenses: General operations General administration Depreciation and amortization Risk transfer payments Payments to claimants & beneficiaries Total operating expenses Operating income (loss) Nonoperating revenues (expenses) Interest and investment revenue Gain (loss) on capital asset disposal Other nonoperating revenue /(expense) Total nonoperating revenues (expenses) Income (loss) before contributions and transfers Capital contributions Change in net assets Total net assets - beginning Total net assets - ending Equipment Equipment Risk Employment Accrued Leave Rental Rental information Management Security Liability Operations Reserve Technology Total $ 1,393,903 $ 240,260 $ 240,440 $ 1,522,533 $ $ 789,412 $ 4,186,548 18,681 - - - - 18,681 6,051 29,187 895 36,133 1,418,635 240,260 240,440 1,551,720 790,307 4,241,362 - 80,924 237,349 1,548,471 951,917 2,818,661 307,585 - - - - 307,585 - 545,382 5,656 551,038 452,151 - - 452,151 (425,481) (425,481) 385,429 80,924 237,349 1,548,471 545,382 957,573 3,755,128 1,033,206 159,336 3,091 3,249 (545,382) (167,266) 486,234 - 1,484 641 2,646 59,287 2,462 66,520 - - - - (10,671) - (10,671) 24 6,288 481 6,793 24 1,484 641 8,934 49,097 2,462 62,642 1,033,230 160,820 3,732 12,183 (496,285) (164,804) 548,876 1,033,230 160,820 3,732 12,183 (496,285) (164,804) 548,876 528,678 24,554 8,206 302,231 10,236,247 356,525 11,456,441 $ 1,561,908 $ 185,374 $ 11,938 $ 314,414 $ 9,739,962 $ 191,721 $ 12,005,317 906 / City of Bremerton Combining Statement of Cash Flows Internal Service Funds For the Year Ended December 31, 2012 Page 1 oft Equipment Equipment Risk Employment Accrued Leave Rental Rental Information Management Security Liability Operations Reserve Technology Total Cash Flows From Operating Activities Cash received from customers $ 1,397,681 $ 230,047 $ 230,241 $ 1,522,534 $ - $ 789,412 $ 4,169,915 interest on investments 19,366 - - - - - 19,366 Cash payments to suppliers (359,114) (108,229) - (1,079,103) - (436,185) (1,982,631) Cash payments to employees - - (213,269) (479,516) - (520,568) (1,213,353) Purchase ofinsurance (411,256) - - - - - (411,256) Payment for insurance claims (403,726) - - - - - (403,726) Other operating receipts and payments 6,051 47,187 53,238 Net cash provided (used) by operating activities 249,002 121,818 16,972 11,102 (167,341) 231,553 Cash Flows From Noneapital Financing Activities Other nonoperating revenues /expenses 24 (739) 8,328 7,613 Net cash provided by noncapital financing activities 24 (739) 8,328 7,613 Cash Flows From Capital and Related Financing Activities Acquisition and construction of capital assets - - - - (142,603) - (142,603) Proceeds from sale of other assets - - - - 24,050 - 24,050 Net cash used for capital and related financing activities - - - - (118,553) - (118,553) Cash Flows From Investing Activities Proceeds from repayment of loans - - - - 87,592 - 87,592 Net change in investments 234,451 (59,119) (5,010) 58,580 1,382,009 180,231 1,791,142 Issuance ofinterfimd loans - - - - (261,000) - (261,000) interest on loans and investments - 1,456 644 2,777 62,005 2,711 69,593 Net cash provided in investing activities 234,451 (57,663) (4,366) 61,357 1,270,606 182,942 1,687,327 Net increase (decrease) in cash and cash equivalents 483,477 64,155 12,606 71,720 1,160,381 15,601 1,807,940 Cash - beginning ofycar 401,180 12,236 5,405 70,325 1,335,132 91,401 1,915,679 Cash - end ofycar $ 884,657 $ 76,391 $ 18,011 $ 142,045 $ 2,495,513 $ 107,002 $ 3,723,619 Cash at the end of the year consists of. Operating fiord cash 884,657 76,391 18,011 142,045 2,495,513 107,002 3,723,619 Restricted cash - - - - - - - Total cash at end of year $ 884,657 $ 76,391 $ 18,011 $ 142,045 $ 2,495,513 $ 107,002 $ 3,723,619 City of Bremerton / 907 Combining Statement of Casb Flows Internal Service Funds For the Year Ended December 31, 2012 Page of2 Equipment Equipment Risk Employment Accrued Leave Rental Rental information Management Security Liability Operations Reserve Technology Total Reconciliation of operating income to net cash provided by ofan ating activities: Operating income (loss) Adjustments to reconcile operating income to net cash provided by ofan Ming activities: Depreciation Decrease (in. ease) in esvables Decrease (in a ease) in due from other finds govt Decrease (in. ease) in prepaid expenses Dect ease(ina ease) in in enbay increase(decrease) in accounts payable increase (decrease) in due to other f inds/govt increase(decrease) in employee wages payable increase(decrease) in employee leaves payable increase (decrease) in other payables Net cash provided by ofan ating activities 1,033 206 159,336 3,091 3 249 (545,382) (167,266) 486,234 - - - - 545,382 5,656 551,038 685 - - - - - 685 3,777 (10,213) (10,199) 2,029 - 21,012 6,406 55,245 - - - - - 55,245 - - - (15,395) - - (15,395) 23,587 (27305) - 9,746 - (2171) 3,857 - - - 18,214 - 1,419 19,633 - - - (26,632) - 994 (25,638) - - - 19,865 - (26985) (7,120) (867,498) 24,080 26 (843,392) 249,002 121,818 16,972 11,102 (167,341) 231,553 Noncash investing, capital and financial activities: 908 / City of Bremerton Combining Statement of Fiduciary Net Position Agency Funds As of December 31, 2012 Salary Administrative Clearing Trust Total Assets Cash and cash equivalents Interfund receivables Total assets $ 72,915 $ 215,950 $ 288,865 2 - 2 $ 72,917 $ 215,950 $ 288,867 Deferred outflows of resources Liabilities Accounts /contracts payable Other current liabilities Total liabilities Deferred inflows of resources - 47,611 47,611 72,917 168,339 241,256 $ 72,917 $ 215,950 $ 288,867 Net Position Governmental Activities Net Investment in Capital Assets Restricted Unrestricted Total governmental activities net position Business -type activities Net Investment in Capital Assets Restricted Unrestricted Total business -type activities net position Primary Government Net Investment in Capital Assets Restricted Unrestricted Total primary government net position 2011 2009 ®Business -Type ■ Governmental 2007 2005 2003 n `c O m i3 CD C> 0 0 0 0 0 0 o u o o " .Z . o �, °' ��' o �, °' ��. S k ti l ti ti l Table 1 Net Position by Component Last Ten Fiscal Years 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 $ 50,204,781 $ 49,164,535 $ 50,329,300 $ 58,958,873 $ 69,497,809 $ 72,451,892 $ 72,087,573 $ 66,905,386 $ 71,532,476 $ 78,295,484 4,492,936 11,592,172 13,542,273 7,390,108 3,168,374 2,682,534 3,111,288 8,275,949 6,008,032 4,200,925 7,905,197 7,067,568 9,323,734 13,822,625 15,362,418 10,777,450 9,159,249 9,434,193 5,948,429 8,795,698 62,602,914 67,824,275 73,195,307 80,171,606 88,028,601 85,911,876 84,358,110 84,615,528 83,488,937 91,292,107 86,487,527 87,788,590 89,467,683 92,069,352 92,747,306 103,397,203 122,329,665 128,158,641 128,930,881 139,290,172 360,852 514,774 494,194 557,859 1,483,026 3,988,736 1,174,604 1,305,903 1,527,135 1,616,969 6,138,489 8,265,819 11,074,025 14,575,413 23,225,228 21,514,830 21,386,589 23,973,489 26,398,932 24,624,122 92,986,868 96,569,183 101,035,902 107,202,624 117,455,560 128,900,769 144,890,858 153,438,033 156,856,948 165,531,263 136,692,308 136,953,125 139,796,983 151,028,225 162,245,115 175,849,095 194,417,238 195,064,027 200,463,357 217,789,699 4,853,788 12,106,946 14,036,467 7,947,967 4,651,400 6,671,270 4,285,892 9,581,852 7,535,167 5,817,894 14,043,686 15,333,387 20,397,759 28,398,038 38,587,646 32,292,280 30,545,838 33,407,682 32,347,361 33,215,777 $ 155,589,782 $ 164,393,458 $ 174,231,209 $ 187,374,230 $ 205,484,161 $ 214,812,645 $ 229,248,968 $ 238,053,561 $ 240,345,885 $ 256,823,370 Total Net Position n `c O m i3 CD C> 0 0 0 0 0 0 o u o o " .Z . o �, °' ��' o �, °' ��. S k ti l ti ti l I 90 / City of Bremerton Table 2 Changes in Net Position Last Ten Fiscal Years Esp-- 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 R--.. Governraental.?eriviner $ 4,497,784 $ 3,178,781 $ 3,311,938 $ 4,036,679 $ 3,838,442 $ 4,799,392 $ 4,001,383 $ 3,250,587 $ 4,585,130 $ 2,335,832 Program R-- 15,642,194 16,435,104 18,447,613 19,018,326 21,823,943 22 694,179 23,922,957 24,187,445 23,718,909 23,177,212 Charges for Scrviccs $ 5,213,469 $ 6,408,743 $ 7,069,069 $ 7,898,109 $ 8,239,980 $ 8,911,480 $ 9,065,757 $ 7,974,533 $ 8,134,426 $ 8,147,866 Operetiog Grants end Comribotions 1,360,384 1,904,575 1,505,305 964,454 1,350,646 2,321,404 2226,968 2,685,281 1,862,766 677,864 Capital Grams and Contributions 7,347,931 7,528,350 1,541,002 7,895,086 9,928,551 4,638,620 3,922,004 3,748,282 1,753,775 6,847,248 Gcncrel Revenues 180,743 185,612 PropertyT -s 6,966,861 7,005,388 6,991,232 7,329,167 7,920,916 7, 799, 723 8, 490 ,418 8,553,934 8,546,532 8,578,750 Sales T.- 6,313,342 6,393,740 6,637,147 7,157,768 7,574,011 7,790,117 6,541,673 6,538,977 7,050,928 7,295,954 Business T.- 2,632,276 3,555,740 4,224,596 3,898,778 4,783,087 3,454,258 3,706,834 3,406,535 3,175,405 3,256,913 Utility Texcs 3,986,704 4,055,931 4196,416 4,744,302 4,974,578 5,087,768 4,753,803 4,531,307 4,512,670 4,407,473 Other T-s 2 ,611,599 2,598,693 2,938,131 3, 567, 985 2, 984, 146 2, 572, 169 2, 461 ,170 2,391,050 2,384,628 2,679,142 Other Gcocral Revenues 342,419 (131,583) 2,172,184 3,088,501 1,831,840 1,004,194 217,758 1,428,517 657,845 488,144 Toml Gover nraenml Revenuer 36,774,985 39,319,577 37,375,082 46,544,150 49,587,755 43,579,733 41,386,385 41,258,416 38,078,975 42,379,354 Business- 7_Nye.4eriviner 854,947 908,739 1,060,383 1,200,116 1,328,735 1,328,657 1,478,026 1,603,135 1,831,098 2181,994 Charges for Scrviccs 21,266,386 22,026,027 24,568,993 27,738,767 27,611,963 26,764,076 27,619,991 25,981,745 26,471,213 26,807,859 Operating Greens end Contributions - - - - - 235,414 34,341 65,812 258,531 3,000 Cepitel Greens end Contributions 1,200,151 2,553,628 1,279,260 755,136 4,936,686 8,449,263 3,882,290 7,417,318 2,580,408 9,253,974 Sales T.- 45,131 58,973 71,500 49,180 41,562 21,857 14,678 - 16,735 16,201 Business T.- 13,704 9,588 11,572 6,672 8,004 229 - 6,486 395 1,120 Other Gcocral Revenues 54,414 (2,712) 187,537 487,531 913,859 1,005,523 556,994 584,246 613,062 683,660 TotlB . rs -7)y.4 r'vitier 22,579,786 24,645,504 26,118,862 29,037,286 33,512,074 36,476,362 32,108,294 34,055,607 29,940,344 36,765,814 Tara) P,i-yGovcrnmcm Pro gram Revenues S 59,354,771 S 63,965,081 S 63,493,944 S 75,581,436 S 83,099,829 S 80,056,095 S 73,494,679 S 75,314,023 S 68,019,319 S 79,14L,168 Esp-- Governraenial Aelivilier Gcocral govcrommt $ 4,497,784 $ 3,178,781 $ 3,311,938 $ 4,036,679 $ 3,838,442 $ 4,799,392 $ 4,001,383 $ 3,250,587 $ 4,585,130 $ 2,335,832 Public sefc 15,642,194 16,435,104 18,447,613 19,018,326 21,823,943 22 694,179 23,922,957 24,187,445 23,718,909 23,177,212 Utiliacs end m, iro-mt 193,048 183,645 205,404 374,985 223,469 226,975 219,431 219,631 219,560 Traospo ti- 3,823,484 6,442,549 4,453,072 7,731,187 8,936,077 8,914,778 4,214,922 4,012,477 4,235,164 4,206,821 t',conomic L',iro -,a 2, 247, 355 2,916,242 2,463,469 2,863,004 2,601,899 3,146,023 2,031,753 3,310,097 2,231,951 1,865,434 M-1 physical health 180,743 185,612 CuIn,. end --ti- 3,552,084 4,633,144 5,115,632 5,581,830 6,429,966 6,859,463 5,944,853 6,510,247 5,975,233 6,061,443 Imerest on long term debt 929,920 1,205,561 1,360,925 1,422,858 1,378,912 1,181,513 961,926 976,987 1,511,968 1,172,255 T-I rn enml Layenser 31,066,612 35,180,638 35,152,649 40,859,288 45,384,224 47,818,817 41,304,769 42,467,271 42,477,986 39,038,557 Business- 7_Nye.4eriviner NNetcr 6,244,202 7,234,139 7,189,614 8,052,273 8,247,875 9,073,514 9,242,707 8,298,916 8,868,640 8,923,134 NNasfcwatcr 7,879,292 8,425,512 8,409,503 8,387,319 8,589,358 9,012,578 8,927,299 9,009,876 9,822,019 9,943,879 GolfCoursc 3,522,053 3,412,554 3,318,926 3,578,441 3,498,529 3,264,660 3,198,390 2,256,772 2,135,886 2,271,036 Other Propnetary Funds 854,947 908,739 1,060,383 1,200,116 1,328,735 1,328,657 1,478,026 1,603,135 1,831,098 2181,994 TorlB. rs -7)y.4 r'vitier 18,500,494 19,980,944 19,978,426 21,218,149 21,664,497 22679,409 22846,422 21,168,699 22,657,643 23,420,043 Tara) P,i-yGovcrnmcm Pro gram L'.xpcoscs S 49,567,106 S 5 S 55,131,075 S 62077,437 S 67,048,721 S 70,498,226 S 64,151,191 S 63,635,970 S 65,135,629 S 6245L,600 Chxngem Net Assets Governraenial Aelivilier L'.. ofrcvcoocs over capcoscs $ 5,708,373 $ 4,138,939 $ 2 ,222,433 $ 5,684,862 $ 4,203,531 $ (4,239,084) $ 81,616 $ (1,208,855) $ (4,399,011) $ 3,340,797 Treosf-rs 1,162,029 1,153,453 1,673,717 1,291,437 1,944,641 1,973,245 4,175,924 3,610,764 3,737,965 4,462,373 Go raental.?cri x _ U.ana it N.l Position 6,870,402 5,292,392 3,896,150 6,976,299 6,148,172 (2,265,839) 4,257,540 2,401,909 (661,046) 7,803,170 Business- 7_Nye.4eriviner L'.. ofrcvcoocs over capcoscs 4,079,292 4,664,560 6,140,436 7,819,137 11,847,577 13,796,953 9,261,872 12,886,908 7,282,701 13,345,771 Transf-rs (1,162,029) (1,153,453) (1,673,717) (1,291,437) (1,944,641) (1,973,245) (4,175,924) (3,610,764) (3,737,965) (4,462,373) Bus .s- 7_Nye. felt x .U. n m A, P-W- 2,917,263 3,511,107 4,466,719 6,527,700 9,902,936 11,823,708 5,085,948 9,276,144 3,544,736 8,883,398 Governraenial Aelivilier A, Position Nct position bcgmoiog 55,732,512 62,531,706 69,299,157 73,195,307 80,171,606 82,507,135 85,911, 876 84,358,110 84,615,528 83,488,937 Prior period edj� t -sp-ml items 1,475,059 1,708,823 (140,726) (5,811,306) (2,144,491) (465,545) Nct position c ding 62,602,914 69,299,157 73,195,307 80,171,606 88,028,601 80,100,570 84,358,110 84,615,528 83,488,937 91,292,107 Business- 7_)ye.4elivilier Nel.fssels Nct position bcgmoiog 90,139,144 93,058,076 96,569,183 101,035,902 107,202,624 123,593,896 128,900,769 144,890,858 153,438,033 156,856,948 Prior period edjus- 'sp-ml items (69,539) (360,978) 350,000 (705,529) 10,904,141 (728,969) (125,821) (209,083) Nct position coding 92,986,868 96,569,183 101,035,902 107,202,624 117,455,560 134,712,075 144,890,858 153,438,033 156,856,948 165,531,263 Tuts) Primary G- -.meat Net Assets $ 155,569,762 $ 165,666,340 S 174,231,209 S 187,374,230 S 205,484,161 S 214,812,645 S 229,248,968 S 238,053,561 S 240,345,885 S 256,823,370 Table 3 Fund Balance of Government Funds Last Ten Fiscal Years n O Cb N i3 CD O v 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 GENERAL FUND (Per GASB 54) Nonspendable $ $ $ $ $ $ $ $ $ 18,683 $ 18,418 Restricted 48,556 20,562 Committed - - Assigned 65,926 545,168 Unassigned 3,274,281 4,018,522 GENERAL FUND (Prior to GASB 54)* Reserved 93,442 16,070 15,570 14,970 20,470 19,070 - - Unreserved 881,433 2,410,089 3,531,157 4,386,943 4,084,868 1,313,146 1,957,308 3,049,878 - - Total General Fund 974,875 2,426,159 3,546,727 4,401,913 4,105,338 1,332,216 1,957,308 3,049,878 3,407,446 4,602,670 ALL OTHER GOVERNMENTAL FUNDS (Per to GASB 54) Nonspendable $ $ - $ - $ - $ $ - $ - $ - $ 23,264.00 $ Restricted - - - - - 4,592,196 2,786,592 Committed 232,026 313,984 Assigned 1,045,415 1,577,720 Unassigned (96,866) - ALL OTHER GOVERNMENTAL FUNDS (Prior to GASB 54)* Reserved 71,938 72,949 1,564,096 1,054,224 176,435 198,472 350,758 391,078 Unreserved, Reported In: Special Revenue Funds 5,247,909 3,745,126 4,593,224 5,025,387 6,251,037 5,867,682 5,758,691 4,488,327 Capital Projects Funds 16,070,360 8,046,173 7,653,595 6,074,023 2,626,138 1,578,618 2,096,861 6,662,498 Debt Service Funds 294,747 203,981 375,324 418,036 548,107 590,314 262,834 433,778 - - Total All Other Governmental Funds 21,684,954 12,068,229 14,186,239 12,571,670 9,601,717 8,235,086 8,469,144 11,975,681 5,796,035 4,678,296 * Prior to the implementation of GASB Statement 54 in 2011, fund balances were classified as Reserved or Unreserved. n O Cb N i3 CD O v 112 / City of Bremerton Table 4 Changes in Fund Balances of Government Funds Last Ton Fiscal Years Debt service as a percentage of non- capital expenditures 25,000,000 20,000,000 15,000,000 ®Beginning Fund Balance ®Ending Fund Balance 10,000,000 5,000,000 5.79% 613% 748% 727% 6.86% 4.64% 481% 4.09% 6.64% 634% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 REVENUES Talcs $21,066,589 $22,219, 675 523, 762, 468 $25,423,632 $26,572,963 $25,132, 935 $24, 259, 262 $23,958,593 $24,139,778 $24,476,535 Licenses and Permits 720,506 862,913 1,138,578 1,043,642 1,160,778 1,037,771 1,174,918 1,165,394 1,233,719 1,133,301 Intergovernmental 10,292,514 11,907,911 4,665,774 10,574,163 10, 004,467 8,846,813 8,126,087 8,266,451 5,650,308 6,961,371 Charges for services 3,467,422 3,795,272 4,647,098 5,214,339 4,645,238 5,005,728 5,188,790 5,648,907 4,950,225 6,601,588 Fines and forfeits 833,772 751,536 721,703 868,427 1,022,563 1,689,080 1,929,836 1,581,937 1,536,690 1,492,213 Miscellaneous 1,762,139 1,681,959 2,634,054 3,101,742 3,107,379 2,497,255 1,636,519 2,962,238 1,706,691 1,985,835 Total Revenues 38,142,942 41,219,266 37,569,675 46,225,945 46,513,388 44,209,582 42,315,412 43,583,520 39,217,411 42,650,843 EXPENDITURES Current General Government 5,446,515 5,176,259 5,097,706 5,628,413 6,389,555 6,830,197 6,793,202 6,878,458 7,237,760 6,096,052 Public Safety 14,622,354 13,493,936 14,817,115 15,516,122 17,418,932 21,205,949 22,222,451 22,369,568 21,787,632 21,161,867 Utilities and Environment 193,048 195,122 195,461 217,600 374,985 223,469 226,975 219,431 219,631 219,560 Transportation 3,715,299 3,350,876 2,945,199 6,295,350 7,652,880 7,401,334 3,372,750 3,010,848 3,135,657 4,419,430 Economic environment 2,239,290 3,003,305 2,576,379 2,795,953 2,521,648 3,142,196 1,950,417 3,269,259 2,292,909 1,891,527 Mental /physical health 180,743 185,612 68,131 71,285 71,379 73,525 74,922 75,126 75,573 69,963 Culture and recreation 3,131,506 4,121,492 4,327,569 4,873,362 5,313,236 5,357,250 4,548,291 4,867,545 4,364,162 4,530,933 Debt Service Principal 714,000 737,500 1,060,863 1,367,000 1,562,499 986,000 1,035,500 771,500 1,382,500 1,458,239 Interest and other debt issue costs 1,099,157 1,190,262 1,367,191 1,409,746 1,363,534 1,165,883 946,444 964,772 1,402,902 1,140,116 Capital 16,622,050 17,842,919 4,022,693 10,722,720 8,090,180 4,515,778 4,874,658 9,361,248 7,256,768 5,708,349 Intergovernmental Payments 42,203 Total Expenditures 47,963,962 49,297,283 36,478,307 48,897,551 50,758,828 50,901,581 46,045,610 51,787,755 49,197,697 46,696,036 Excess (deficiency) ofrevenues (9,821,020) (8,078,017) 1,091,368 (2,671,606) (4,245,440) (6,691,999) (3,730,198) (8,204,235) (9,980,286) (4,045,193) over (under) expenditures OTHER FINANCING SOURCES (USES) Proceeds of Long Term Debt 10,865,000 800,000 1,671,000 - - - - 19,407,267 9,675,000 5,215,000 Premiums on Bonds Sold 122,033 Payments to Refunded Escrow Agent - - (1,661,309) - - - - (10,387,010) (9,675,000) (5,653,814) Capital Asset Donation & Disposal - 5,958 2,659,534 2,700,538 1,467,967 428,319 398,759 40,930 511,823 - insurance Recoveries - - - - - - 14,664 18,629 1,251 349 Transfers in 5,075,298 4,955,598 6,377,743 9,768,469 8,957,389 6,461,827 7,415,810 5,630,979 6,921,147 6,074,690 Transfers out (3,753,180) (5,705,285) (6,885,610) (10,596,716) (9,445,689) (4,195,667) (3,239,886) (2,020,214) (3,282,833) (1,612,316) Total other financing sources and uses 12,187,118 56,271 2,161,358 1,872,291 979,667 2,694,479 4,589,347 12,690,581 4,151,388 4,145,942 OTHER CHANGES IN FUND BALANCE Change in Reserves for Inventory (10,023) (72,486) (14,148) 39,932 (755) (1,507) - (10,666) 6,820 (23,264) Not change in fund balances 2,356,075 (8,094,232) 3,238,578 (759,383) (3,266,528) (3,999,027) 859,149 4,475,680 (5,822,078) 77,485 Fund balances beginning 20,232,545 22,588,620 14,494,388 17,732,966 16,973,583 13,707,055 9,567,302 10,426,451 15,025,559 9,203,481 Prior Period Adjustments (140,726) 123,428 Fund balances- ending 522,588,620 514, 494,388 577,732,966 576,973,583 573,707,055 S 9,567,302 570,426,451 515,025,559 S 9,203,481 S 9,280,966 Debt service as a percentage of non- capital expenditures 25,000,000 20,000,000 15,000,000 ®Beginning Fund Balance ®Ending Fund Balance 10,000,000 5,000,000 5.79% 613% 748% 727% 6.86% 4.64% 481% 4.09% 6.64% 634% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 City of Bremerton / 113 Table 5 Assessed and Estimated Actual Value of Taxable Property Last Ten Fiscal Years REAL PROPERTY PERSONAL PROPERTY Fiscal Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 TOTALS Ratio oftotal Estimated Assessed Actual Value Value 1,447,949,250 1,652,910,103 1,5 88,499,3 81 1,853,5 58,204 1,722,154,076 1,986,336,881 2,089,518,973 2,324,270,270 2,557,714,553 2,919,765,471 2,974,663,326 3,395,734,390 2,950,336,030 3,430,623,291 2,738,164,824 3,187,619,120 2,592,959,827 2,939,863,749 2,396,294,922 2,704,621,808 Ratio oftotal Estimated Assessed Actual Value Value 137,191,146 137,191,146 125,299, 389 125,299, 389 125,883,139 125,883,139 133,373,551 133,373,551 134,674,238 134,674,238 140,113,102 143,118, 592 134,404,987 138,704,837 161,319,684 163,279,032 155,787,967 157,999,967 152,670,570 155,153,018 Ratio oftotal Estimated Assessed Actual Value Value 1,5 85,140,396 1,790,101,249 1,713,798,770 1,978,857,5 93 1,848,037,215 2,112,220,020 2,222,892,524 2,457,643,821 2,692,3 88,791 3,054,439,709 3,114,776,428 3,538,852,982 3,084,741,017 3,569,328,128 2,899,484,508 3,350,898,152 2,748,747,794 3,097,863,716 2,548,965,492 2,859,774,826 Ratio oftotal Total Aasessed Value Bremerton To Total Estimated Levy Rate Actual Value Per 51,000 88.0% 4.43 86.1% 4.15 87.0% 3.82 90.1% 3.35 87.9% 2.85 87.8% 2.51 86.2% 2.76 86.2% 2.97 88.4% 3.13 88.8% 3.37 Source: Kitsap County Assessor's Office Table 6 Property Tax Rates Direct and Overlapping Governments Last Tcn Fiscal Ycars Dircct Ratcs Overlapping Ratcs City Milcagc Bremerton School District Fiscal Operating EMS Dcbt Scrvicc Total City Kitsap County Statc School Operating Dcbt Total Bremerton Port of Bremerton Public Utility Kitsap Regional Total Total Dircct & Ycar Milcagc Milcagc Milcagc Milcagc Milcagc Milcagc Milcagc Milcagc School Milcagc Milcagc Dcbt Milcagc Library Milcagc Overlapping Ratcs Overlapping Ratcs 2003 3.20220 0.48150 0.75100 4.43470 1.60170 2.92670 3.20280 1.63560 4.83840 0.38470 0.10590 0.10180 0.46230 10.42150 14.85620 2004 3.02778 0.50000 0.62376 4.15154 1.41320 3.07972 3.07238 1.50870 4.58108 0.37595 0.09925 0.09978 0.45270 10.10168 14.25322 2005 2.85463 0.47265 0.49682 3.82410 1.30856 2.96103 2.91888 1.41966 4.33854 0.34628 0.08733 0.09221 0.41963 9.55357 13.37767 2006 2.46012 0.40695 0.47883 3.34590 1.13108 2.59911 2.54897 1.18100 3.72997 0.30368 0.07304 0.07970 0.36159 8.27816 11.62406 2007 2.10316 0.34805 0.39588 2.84710 0.96251 2.29576 2.40579 0.97236 3.37815 0.25940 0.50933 0.06782 0.30765 7.78062 10.62772 2008 1.90323 0.31487 0.29256 2.51065 0.87703 2.02829 2.22231 0.96519 3.18750 0.23606 0.45766 0.06180 0.28021 7.12855 9.63919 2009 1.96901 0.50000 0.29004 2.75905 0.90091 2.02559 2.43646 0.97730 3.41377 0.28150 0.01427 0.06348 0.28792 6.98743 9.74648 2010 2.16239 0.50000 0.30911 2.97151 0.98964 2.13360 2.78147 0.97671 3.75818 0.29218 0.03215 0.06847 0.32040 7.59463 10.56613 2011 2.32957 0.50000 0.29627 3.12583 1.02506 2.37752 3.06517 1.07096 4.13613 0.30854 0.03302 0.07376 0.34726 8.30129 11.42712 2012 2.55906 0.50000 0.30861 3.36767 1.09357 2.49738 3.36624 1.17709 4.54333 0.32997 0.03472 0.07804 0.37076 8.94777 12.31544 Direct Property Tax Rate 5.00000 4.50000 4.00000 3.50000 3.00000 13 Mileage 2.50000 2.00000 1.50000 1.00000 0.50000 0.00000 12.00000 10.00000 8.00000 ®Mileage 6.00000 4.00000 2.00000 0.00000 Overlapping Property Tax Rate n `G O Cb N CD CD O Sourcc: Kitsap County Assessor's Ofticc 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 City of Bremerton / 115 Table 7 Principal Property Taxpayers Current Year and Nine Years Ago 2012 2003 Percent Percent Assessed of Total Assessed of Total Name Type ofBusiness Rank Valuation Assessed Value Rank Valuation Assessed Value Puget Sound Energy Utility 1 $ 30,716,230 1.2% 1 $ 33,514,499 2.1% Qwest Corporation Telephone Utility 2 18,101,980 0.7% Kitsap Community Credit Union Finance 3 15,166,250 0.6% R &LProperty Management HOA Condo Management 4 12,134,650 0.5% HCK2 LLC Fairfield hm & Suites Mgmt 5 10,775,765 0.4% Heartland Automobile Prop LLC Retail- Automotive 6 10,215,910 0.4% Bremer Trust Commercial Property 7 9,895,990 0.4% 3 12,403,630 0.8% Ryan Tim Properties LP Commercial Property 8 9,874,370 0.4% Group Health Options INC Insurance 9 8,844,980 0.3% EP Holdings LLC Real Estate Management 10 8,629,770 0.3% U. S. West Telephone Utility 2 23,015,935 1.5% Merit Company Community Center 4 9,150,330 0.6% ViewcrestVillages Residential Proper ties 5 8,566,420 0.5% Fir Lane Terrace Conv Ctr Convalescent Center 6 7,068,600 0.4% Shp It Bremerton LLC Apartments 7 6,702,600 0.4% Washington Mutual Bank Bank 8 6,392,310 0.4% Beta Ballard LLC Community Center 9 6,359,730 0.4% Cascade Natural Gas Gas Utility 10 6,300,706 0.4% Total Taxable Assessed Value of 10 Largest Taxpayers 134,355,895 5.3% 119,474,760 7.5% Total Taxable Assessed Value of all Other Taxpayers 2,414,609,597 94.7% 1,465,665,636 92.5% Total Taxable Assessed Value of all Taxpayers $ 2,548,965,492 100% $ 1,585,140,396 100% Source: Kitsap County Assessor's Office 116 / City of Bremerton Table 8 Property Tax Levies and Collections Last Ten Fiscal Years (In Thousands) Current % of Delinquent Total % of Total Outstanding % of Outstanding Fiscal Tax Tax Tax Levy Tax Tax Tax Collections Delinquent Delinquent Year Levy Collections Collected Collections Collections to Tax Levy Taxes to Tax Levy 2003 7,011 6,642 94.74 196 6,838 97.54 546 7.78 2004 7,105 6,784 95.48 195 6,979 98.23 523 7.36 2005 7,065 6,801 96.26 214 7,015 99.29 498 7.05 2006 7,431 7,188 96.73 308 7,496 100.87 631 8.49 2007 7,658 7,406 96.71 436 7,842 102.40 425 5.55 2008 7,816 7,498 95.93 190 7,688 98.36 506 6.47 2009 8,507 8,064 94.79 192 8,256 97.05 735 8.64 2010 8,613 8,209 95.31 411 8,620 100.08 669 7.77 2011 8,590 8,278 96.37 283 8,561 99.66 655 7.63 2012 8,587 8,242 95.98 317 8,559 99.67 614 7.15 City of Bremerton / 117 Table 9 Ratio of Net General Bonded Debt To Assessed Value and Net Bonded Debt Per Capita Last Ten Fiscal Years * State of Washington Office of Financial Management ** Kitsap County Assessor G.O. Less Debt % Net Bonded Fiscal Assessed Bonded Service Net Bonded Debt to Debt Per Year Population* Value ** Debt Fund Debt Assessed Value Cauita 2003 38,730 1,585,140,396 26,962,502 375,436 26,587,066 1.68 686 2004 37,520 1,713,798,770 33,170,000 273,708 32,896,292 1.92 877 2005 34,580 1,848,037,215 31,875,139 401,164 31,473,975 1.70 910 2006 35,910 2,222,892,524 30,318,664 457,626 29,861,038 1.34 832 2007 35,810 2,692,388,791 28,619,400 573,654 28,045,746 1.04 783 2008 36,860 3,114,776,428 27,424,767 623,385 26,801,382 0.86 727 2009 36,620 3,084,741,017 26,847,185 313,948 26,533,237 0.86 725 2010 36,190 2,899,484,508 35,705,685 474,303 35,231,382 1.22 974 2011 38,790 2,748,747,794 39,511,239 426,513 39,084,726 1.42 1,008 2012 39,650 2,548,965,492 37,768,000 275,190 37,492,810 1.47 946 * State of Washington Office of Financial Management ** Kitsap County Assessor 118 / City of Bremerton Table 10 Computation of Direct and Overlapping Debt December 31, 2012 Gross General Percentage Amount Obligation Debt Applicable Applicable Jurisdiction Outstanding To Bremerton To Bremerton City of Bremerton 37,768,000 100.00 37,768,000 Kitsap County 107,133,369 9.39 10,059,823 Port of Bremerton 3,930,000 22.77 894,861 School District #100 17,196,467 75.71 13,019,445 So. Kitsap Schools - Non -Voted 3,214,703 0.23 7,394 TOTAL 169,242,539 61,749,523 City of Bremerton / 119 Table 11 Computation of Legal Debt Margin as of December 31, 2012 Total Taxable property Value 2,394,781,600 for collection in 2012 2.5% ($63,724,149) general purposes limit is allocated between: Up to 1.5% debt without a vote (councilmanic) 35,921,724 Less: outstanding debt 27,993,000 Less: contracts payable - Less: excess of debt with a vote - Add: available assets - Equals: remaining debt capacity without a vote 7,928,724 1 % general purposes debt with a vote 23,947,816 Less: outstanding debt 9,775,000 Less: contracts payable - Add: assets available 112,147 Equals: remaining debt capacity with a vote 14,284,963 2.5% utility purpose limit, voted 59,869,540 Less: outstanding debt - Less: contracts payable - Add: assets available - Equals: remaining debt capacity - utility purpose, voted 59,869,540 2.5% open space, park and capital_facilities, voted 59,869,540 Less: outstanding debt - Less: contracts payable - Add: assets available - Equals remaing debt capacity - open space park and capital facilities, voted 59,869,540 920 / City of Bremerton Table 12 Water and Sewer Revenue Bond Coverage Last Ten Fiscal Years Maintenance & Net Revenue Fiscal Gross Operating Available For Year Revenue Expenses* Debt Service 2003 16,600,789 9,000,574 7,600,215 2004 17,379,274 10,432,584 6,946,690 2005 19,516,612 11,751,679 7,764,933 2006 21,732,894 10,951,004 10,781,890 2007 23,009,152 11,486,862 11,522,290 2008 23,021,132 13,023,575 9,997,557 2009 22,697,794 13,160,506 9,537,288 2010 22,172,232 12,563,519 9,608,713 2011 22, 869,304 12, 807,726 10,061,578 2012 29,222,180 12,822,748 16,399,432 Current Current Coverage Principal Interest Total Ratio 2,145,000 657,620 2,802,620 2.71 2,270,000 533,720 2,803,720 2.48 2,390,000 413,410 2,803,410 2.77 2,555,659 305,144 2,860,803 3.77 2,815,000 242,816 3,057,816 3.77 305,000 223,202 528,202 18.93 320,000 210,148 530,148 17.99 330,000 196,452 526,452 18.25 335,000 182,328 517,328 19.45 350,000 167,990 517,990 31.66 * Net of depreciation, amortization and City taxes. City of Bremerton / 929 Table 13 Demographic Statistics Last Ten Fiscal Years Fiscal Population Personal" Income School * ** # of * * ** Rate of * * * ** Year Number Income ($000) Per Capita Enrollment Housing Units Unemployment 2003 38,730 1,265,712 32,680 5,787 16,617 5.4 2004 37,520 1,299,639 34,639 5,703 16,615 5.9 2005 34,580 1,287,196 37,224 5,412 16,607 5.1 2006 35,910 1,382,427 38,497 5,209 16,615 4.7 2007 35,810 1,486,858 41,521 4,998 16,797 4.4 2008 36,860 1,574,351 42,712 5,061 17,171 4.4 2009 36,620 1,568,169 43,404 4,835 17,170 7.4 2010 36,190 1,530,837 42,300 4,855 17,273 7.3 2011 38,790 1,688,297 42,580 5,175 16,915 7.6 2012 39,650 - - 4,904 17,090 7.4 * State of Washington, Office of Financial Management * U.S. Department of Commerce - Bureau of Economic Analysis (County data prorated based on local population) Information for 2012 not available at report date. State of Washington Office of Financial Management - Office of Superintendent of Public Instruction State of Washington, Office of Financial Management; Postcensual estimate 4/1/13 State of Washington, Employment Security Department