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2022-04-12 City Council - Full FIN Agenda-31201 N o Agenda Edmonds City Council FINANCE COMMITTEE - ZOOM VIRTUAL ONLINE MEETING EDMONDS CITY COUNCIL MEETINGS WEB PAGE, HTTP://EDMONDSWA.IQM2.COM/CITIZENS/DEFAULT.ASPX, EDMONDS, WA 98020 APRIL 12, 2022, 6:00 PM COUNCIL COMMITTEE MEETINGS ARE WORK SESSIONS FOR THE COUNCIL AND CITY STAFF. COMMITTEE MEETING AGENDAS DO NOT INCLUDE AUDIENCE COMMENTS OR PUBLIC HEARINGS. THIS MEETING IS HELD VIRTUALLY USING THE ZOOM MEETING PLATFORM. TO VIEW OR LISTEN TO THE COMMITTEE MEETING, CLICK ON OR PASTE THE FOLLOWING LINK INTO A WEB BROWSER USING A COMPUTER OR SMART PHONE: HTTPS://ZOOM. US/J/95798484261 OR JOIN BY DIAL -UP PHONE: US: +1 253 215 8782 WEBINAR ID: 957 9848 4261 COMMITTEE MEMBERS: DIANE BUCKSHNIS (CHAIR), WILL CHEN, VIVIAN OLSON (EX-OFFICIO MEMBER) CALL TO ORDER COMMITTEE BUSINESS 1. Report from the Edmonds Public Facilities District (20 min) 2. 2022 April Budget Amendment (10 min) 3. ARPA Funding Status (20 min) 4. February 2022 Monthly Financial Report (10 min) 5. Federal Grant Audit Exit Conference Follow-up (15 min) ADJOURN Edmonds City Council Agenda April 12, 2022 Page 1 2.1 City Council Agenda Item Meeting Date: 04/12/2022 Report from the Edmonds Public Facilities District Staff Lead: Dave Turley Department: Administrative Services Preparer: Dave Turley Background/History Representatives from the Edmonds Public Facilities District make periodic reports to Finance Committee. Staff Recommendation Presentation for discussion only. Packet Pg. 2 2.2 City Council Agenda Item Meeting Date: 04/12/2022 2022 April Budget Amendment Staff Lead: Dave Turley Department: Administrative Services Preparer: Marissa Cain Background/History Amend the 2022 Ordinance No. 4250 Staff Recommendation Staff recommends that Finance Committee review the attached budget amendment ordinance and place on full council agenda for April 19. Attachments: 2022 April Budget Amendment Exhibits 2022 April Budget Amendment Ordinance Packet Pg. 3 2.2.a New Item for Council to Consider (April 2022) Budget Amendment for: April 19, 2022 Item Description: The City contracts with the Sound Salmon Solutions to provide monthly habitat restoration events in our parks. The program scope, number of locations and volunteer efforts has more than doubled in the past two years. To support the program's expansion, an increase of $5k is required to cover the cost of additional time and materials (i.e. plants) needed. Department: Parks, Recreation, Cultural & Human Services Fund Name: 001 GENERAL Division: Recreation Title: Sound Salmon Solutions Preparer: Angie Feser Budget Amendment Type New Item For Council To Consider Please select when the budget was approved Date of approval How is this amendment funded? 100% Ending Fund Balance What is the nature of the expenditure? One -Time Is the Expenditure Operating or Capital? 10perating Expenditure Increase (Decrease) Account Number Description 2022 2023 2024 2025 2026 001.000.64.571.21.41.00 Professional Services $ 5,000 Total Expenditure Increase (Decrease) $ 5,000 Revenue Increase (Decrease) Account Number Description 2022 2023 2024 2025 2026 Total Revenue Increase (Decrease) Ending Fund Balance Increase (Decrease) Account Number Description 2022 2023 2024 2025 2026 001.000.39.508.00.000.00 Ending Fund Balance $ 5,000 Total Ending Fund Balance Increase (Decrease) $ (5,000) r c m E c m E Q m m �L Q Q N N O N Packet Pg. 4 New Item for Council to Consider (April 2022) 2.2.a Budget Amendment for: April 19, 2022 Item Description: The Salmon Safe Certification Project, approved in the 2021 budget will incur all of the related expenditures in 2022. No expenditures were made in 2021 so the full contracted amount of $38,800 is being requested. Department: Parks, Recreation, Cultural & Human Services Division: Administration Fund 001 GENERAL Title: Salmon Safe Certification Project Name: Preparer: Angie Feser Budget Amendment Type New Item For Council To Consider Please select when the budget was approved 2021 Adopted Budget Date of approval How is this amendment funded? 100% Ending Fund Balance What is the nature of the expenditure? One -Time Is the Expenditure Operating or Capital? Operating Expenditure Increase (Decrease) Account Number Description 2022 2023 2024 2025 2026 001.000.64.571.21.41.00 Professional Services $ 38,800 $ $ $ $ - Total Expenditure Increase (Decrease) $ 38,800 $ - $ S $ - Revenue Increase (Decrease) Account Number Description 2022 2023 2024 2025 2026 $ S $ S - Total Revenue Increase (Decrease) $ $ - $ $ $ - Ending Fund Balance Increase (Decrease) Account Number Description 2022 2023 2024 2025 2026 001.000.39.508.00.000.00 EndingFund Balance $ 38,800 $ $ $ $ Total Ending Fund Balance Increase (Decrease) $ (38,800) $ - $ S $ Packet Pg. 5 New Item for Council to Consider (April 2022) 2.2.a Budget Amendment for: April 19, 2022 Item Description: Given the difficulties encountered while distributing 2020 CARES fund grants to the Edmonds business community, the retirement of the Community Services Director who administered the CARES and ARPA grants, part-time status of the interim Community Services Director who was not here during 2021, and an Administrative Services Deputy Director who joined the City after CARES and ARPA grants had been disbursed, this budget amendment proposes an additional $100,000 for audit and grant management of the 2021 and 2022 ARPA funds distribution, to come from ARPA funds as it directly supports the administration of ARPA funds. Budget Amendment Type Date of Discussion or Budget Approval? How is this amendment funded? What is the nature of the expenditure? Is the Expenditure Operating or Capital? Expenditure Increase (Decrease) Grant manager tasks might include: 1. Risk assessments 2. Management of the Federal Grants Audit 3. Review and approval of grant contracts 4. Recommend better audit procedures 5. Conduct or consult on audit meetings 6. Manage audit requests to/from the SAO and the City 7. Provide feedback to Finance S. Time consuming tasks related to ARPA management where the City lacks resources Services Grant Mai Menkveld New Item For Council To Consider 100 % Ending Fund Balance One -Time Operating Fund 142 EDMONDS CARES Name: FUND Account Number Description 2022 2023 2024 2025 2026 142.000.39.557.20.41.00 Professional Services $ 100,000 $ S S $ Total Expenditure Increase Decrease $ 100,000 $ S S $ Revenue Increase (Decrease) Account Number Description 2022 2023 2024 2025 2026 $ $ S S $ Total Revenue Increase Decrease $ $ S S $ Ending Fund Balance Increase (Decrease) Account Number Description 2022 2023 2024 2025 2026 142.000.39.508.30.00.00 Fund Balance $ 100,000 $ S $ $ Total Ending Fund Balance Increase Decrease $ 100,000 $ S $ $ Packet Pg. 6 New Item for Council to Consider (April 2022) 2.2.a Budget Amendment for: April 19, 2022 Item Description: This request is for additional funds needed to hire Temporary staffing to cover the workload for a person who is on administrative leave. Because this is paid leave, we do not have salary savings to offset this expenditure. Budget Amendment Type Date of Discussion or Budget Approval? How is this amendment funded? What is the nature of the expenditure? Is the Expenditure Operating or Capital? Expenditure Increase (Decrease) hired a Temp through Robert Half starting full-time at $60 per hour. The City has a standing contract with Half. h a weekly rate of $2,400 ($60 per hour X 40 hours), if the temp is here for 3-months it would be $28,800. While do not know how long the Temp will be needed, this request is to cover an initial 3-month period. If more is tied we may request another budget amendment at that time. Services Staff Menkveld New Item For Council To Consider 100% Ending Fund Balance One -Time Operating Fund F 001 GENERAL Name: Account Number Description 2022 2023 2024 2025 2026 001.000.31.514.23.41.00 Professional Services $ 28,800 $ S S $ Total Expenditure Increase (Decrease) S 2S,S00 $ S S $ Revenue Increase (Decrease) Account Number Description 2022 2023 2024 2025 2026 S $ S S $ Total Revenue Increase (Decrease) $ $ S $ $ Ending Fund Balance Increase (Decrease) Account Number Description 2022 2023 2024 2025 2026 001.000.39.508.00.00.00 Fund Balance $ (28,800) $ S $ $ Total Ending Fund Balance Increase (Decrease) 1 $ (28,800) $ I S I S 1 $ Packet Pg. 7 New Item for Council to Consider (April 2022) 2.2.a Budget Amendment for: April 19, 2022 Description: Budget Amendment Type Date of Discussion or Budget Approval? How is this amendment funded? What is the nature of the expenditure? Is the Expenditure Operating or Capital? Expenditure Increase (Decrease) The City's Contract with South County Fire was updated, and approved by Council on January 25. The new contract calls for an annual amount of $9,419,852, an increase of $1,569,015. (This can be found on Packet Page 282 of the January 25, 2022 Council Packet.) This amendment is to increase the annual budget for the city's Fire Contract by that amount. Finance Increase budget for revised contract with South County Fire Dave Turlev New Item For Council To Consider Jan 25 2022 100% Ending Fund Balance On -Going Operating Fund 001 GENERAL Name: Fill out on going costs & revenues Account Number Description 2022 2023 2024 2025 2026 001.000.39.522.20.41.50 Intergovernmental Svcs - Fire District Contract $ 1,569,015 $ 1,569,015 $ 1,569,015 $ 1,569,015 $ 1,569,015 Total Expenditure Increase Decrease $ 1,569,015 $ 1,569,015 $ 1,569,015 $ 1,569,015 $ 1,569,015 Revenue Increase (Decrease) Account Number Description 2022 2023 2024 2025 2026 Total Revenue Increase Decrease $ $ $ $ $ Ending Fund Balance Increase (Decrease) Account Number Description 2022 2023 2024 2025 2026 001.000.39.508.00.00.00 Ending Fund Balance $ 1,569,015 $ 1,569,015 $ 1,569,015 $ 1,569,015 $ 1,569,015 Total Ending Fund Balance Increase Decrease $ 1,569,015 $ 1,569,015 $ 1,569,015 $ 1,569,015 $ 1,569,015 a+ C d E C E Q d i� 7 m �L CL Q N N O N Packet Pg. 8 New Item for Council to Consider (April 2022) 2.2.a Budget Amendment for: April 19, 2022 Description: WCIA provided the City with a preliminary estimate of what the assessment would be for the 2022 fiscal year, which we included in the 2022 proposed budget. The actual assessment that we received in January was higher. This budget amendment is to increase the city budget for the updated WCIA assessment. Finance ITitle: IUpdate budget for revised invoice amount from WCIA I Dave Budget Amendment Type Date of Discussion or Budget Approval? How is this amendment funded? What is the nature of the expenditure? Is the Expenditure Operating or Capital? Expenditure Increase (Decrease) New Item For Council To Consider New Item 100%Ending Fund Balance On -Going Operating Fund MULTIPLE FUNDS Name: Fill out on going costs & revenues Account Number Description 2022 2023 2024 2025 2026 001.000.39.518.90.46.00 WCIA Insurance Allocation $ 127,622 $ 127,622 $ 127,622 $ 127,622 $ 127,622 111.000.68.542.90.46.00 WCIA Insurance Allocation 61,104 61,104 61,104 61,104 61,104 421.000.74.534.80.46.00 WCIA Insurance Allocation 15,094 15,094 15,094 15,094 15,094 422.000.72.531.90.46.00 WCIA Insurance Allocation 61,791 61,791 61,791 61,791 61,791 423.000.75.535.80.46.00 WCIA Insurance Allocation 663 663 663 663 663 423.000.76.535.89.46.00 WCIA Insurance Allocation 18,018 18,018 18,018 18,018 18,018 511.000.77.548.68.46.00 WCIA Insurance Allocation 7,911 7,911 7,911 7,911 7,911 Total Expenditure Increase Decrease $ 167,295 1 $ 167,295 1 $ 167,295 1 $ 167,295 1 $ 167,295 Revenue Increase (Decrease) Account Number Description 2022 2023 2024 2025 2026 Total Revenue Increase Decrease $ $ $ $ $ Ending Fund Balance Increase (Decrease) Account Number Description 2022 2023 2024 2025 2026 001.000.39.508.00.00.00 Ending Fund Balance $ 127,622 $ 127,622 $ 127,622 $ 127,622 $ 127,622 111.000.68.508.30.00.00 Ending Fund Balance 61,104 61,104 61,104 61,104 61,104 421.000.74.508.00.00.00 Ending Fund Balance 15,094 15,094 15,094 15,094 15,094) 422.000.72.508.00.00.00 Ending Fund Balance 61,791 61,791 61,791 61,791 61,791 423.000.75.508.00.00.00 Ending Fund Balance 17,355 17,355 17,355 17,355 17,355 511.000.77.508.00.00.00 Ending Fund Balance 7,911 7,911 7,911 7,911 7,911 Total Ending Fund Balance Increase Decrease $ 167,295 $ 167,295 $ 167,295 $ 167,295 $ 167,295 a+ C d E C E Q d i� 7 m �L CL Q N N O N Packet Pg. 9 New Item for Council to Consider (April 2022) 2.2.a Budget Amendment for: April 19, 2022 Description: Budget Amendment Type Date of Discussion or Budget Approval? How is this amendment funded? What is the nature of the expenditure? Is the Expenditure Operating or Capital? Expenditure Increase (Decrease) Additional Professional Services budget to complete work that is unscheduled and requires expedited action. Additional Repair and Maintenance budget to address building operational issues that require service contractor repairs or equipment replacement to maintain continuity of business. Public Works Facilities and Maintenance Thom Sullivan New Item For Council To Consider 100% Ending Fund Balance One -Time Operating Fund 001 GENERAL Name: Account Number Description 2022 2023 2024 2025 2026 001.000.66.518.30.41.00 Professional Services $ 233,000 $ $ $ $ 001.000.66.518.30.48.00 Repair and Maintenance 432,000 016.000.66.518.30.48.00 Repair and Maintenance 665,000 Total Expenditure Increase Decrease $ $ S $ $ Revenue Increase (Decrease) Account Number Description 2022 2023 2024 2025 2026 Total Revenue Increase Decrease $ $ S $ S Ending Fund Balance Increase (Decrease) Account Number Description 2022 2023 2024 2025 2026 001.000.39.508.00.00.00 Ending Fund Balance $ 665,000 $ $ $ $ 016.000.66.508.00.00.00 Ending Fund Balance 665,000 Total Ending Fund Balance Increase Decrease S - S S S $ a+ C d E C E Q d i� 7 m �L CL Q N N O N Packet Pg. 10 New Item for Council to Consider (April 2022) 2.2.a Budget Amendment for: April 19, 2022 Description: Budget Amendment Type Date of Discussion or Budget Approval? How is this amendment funded? What is the nature of the expenditure? Is the Expenditure Operating or Capital? Expenditure Increase (Decrease) Repair and Maintenance annual service agreements and regulatory compliance required services as well as, annual Professional Services required to maintain building systems and safety. See attached sheet for details: Public Works Facilities Facilities Mani Thom Sullivan New Item For Council To Consider 100% Ending Fund Balance One -Time Operating Fund 001 GENERAL Name: Account Number Description 2022 2023 2024 2025 2026 001.000.66.518.30.48.00 Repair and Maintenance $ 293,500 $ $ $ $ 001.000.66.518.30.41.00 Professional Services 168,000 Total Expenditure Increase Decrease $ 461,500 $ S $ $ Revenue Increase (Decrease) Account Number Description 2022 2023 2024 2025 2026 Total Revenue Increase Decrease $ $ $ S S Ending Fund Balance Increase (Decrease) Account Number Description 2022 2023 2024 2025 2026 001.000.39.508.00.00.00 Ending Fund Balance $ 461,500 $ $ $ $ Total Ending Fund Balance Increase Decrease $ 461,500 $ I S I S I$ a+ C d E C E Q d i� 7 m L CL Q N N O N Packet Pg. 11 0 New Item for Council to Consider (April 2022) Budget Amendment for: April 19, 2022 Description: I Washington State Dept. of Commerce Grant award for new solar plant Department: jPublicWorks Fund Name: 016 BUILDING MAINTENANCE Division: lFacilities Title: Facilities Manager Preoarer: Thom Sullivan Budget Amendment Type New Item For Council To Consider Date of Discussion or Budget Approval? 11/17//2022 How is this amendment funded? Reimbursed by Grants or Outside Agencies What is the nature of the expenditure? One -Time Is the Expenditure Operating or Capital? ICapital Expenditure Increase (Decrease) Account Number Description 2022 2023 2024 2025 2026 016.000.66.518.30.41.00 Professional Services $ 80,000 $ $ $ $ 016.000.66.518.30.48.00 Repair and Maintenance 150,000 Total Expenditure Increase Decrease $ 230,000 $ S $ $ Revenue Increase (Decrease) Account Number Description 2022 2023 2024 2025 2026 016.000.334.00.000.00 WA DOC Grant $ 119,645 $ $ $ $ Total Revenue Increase Decrease $ 119,645 1 $ $ S S Ending Fund Balance Increase (Decrease) Account Number Description 2022 2023 2024 2025 2026 016.000.66.508.00.00.00 Ending Fund Balance $ 110,355 $ $ $ $ Total Ending Fund Balance Increase Decrease $ 110,355 $ I S I S I$ C d E C E Q d 7 m �L CL Q N N O N Packet Pg. 12 Previously Discussed by Council (April 2022) 2.2.a Budget Amendment for: April 19, 2022 Description: Budget Amendment Type Date of Discussion or Budget Approval? How is this amendment funded? What is the nature of the expenditure? Is the Expenditure Operating or Capital? Expenditure Increase (Decrease) On March 22 the City Council requested that additional consultant work be performed on the PROS Plan. This amendment is to provide additional funds to pay for this work beyond the original contracted scope of work Cultural & Human Services Administration Increase consultant budget for PROS Angie Feser Previously Discussed By Council • Mar 22 2022 100% Ending Fund Balance One -Time Operating Fund 001 GENERAL Name Account Number Description 2022 2023 2024 2025 2026 001.000.64.571.21.41.00 Professional Services $ 8,000 $ $ $ $ Total Expenditure Increase(Decrease) $ 8,000 $ $ S S Revenue Increase (Decrease) Account Number Description 2022 2023 2024 2025 2026 Total Revenue Increase Decrease S $ S S $ Ending Fund Balance Increase (Decrease) Account Number Description 2022 2023 2024 2025 2026 001.000.39.508.00.000.00 Ending Fund Balance $ (8,000) $ $ $ $ Total Ending Fund Balance Increase Decrease S (8.o0o) S S S S a+ C d E C E Q d i� 7 m �L CL Q N N O N 10 Packet Pg. 13 Previously Discussed by Council (April 2022) 2.2.a Budget Amendment for: April 19, 2022 Item Description: With the start of the OpenGov Budget, Reporting and Transparancy implementation, the nest step is acquiring remaining ERP system. As mentioned/discussed at previous Council meetings, a Project Manager is necessary to lead that search. This position would be contracted as a professional service for 3 to 6 months. nee received an intial quote from Plante Moran of $45,000, which is an estimated 170 hours of work at a blended of $265, and intends to contact at least two other firms. The total budget request is $60,000 since there are other s yet to contact. This offers flexibility in engaging in the right partnership even if it is greater than $45,000. is a sample of Project Manager work: 1. Develop detailed project plan 2. Establish project collaboration center (SharePoint) 3. Schedule and moderate status meetings 4. Develop solution criteria and define the decision -making process 5. Conduct additional due diligence activities 6. Review contracts and Statements of Work 7. Assist in transition to implementation Administrative Services Fund 001 GENERAL Name. 11'reparer: (Megan Menkveld Budget Amendment Type Previously Discussed By Council Date of Discussion or Budget Approval? Dec. 14, 2021 (Committee); Jan. 14, 2022 (Committee); Jan. 25, 2022 (Council) How is this amendment funded? 100% Ending Fund Balance What is the nature of the expenditure? One -Time Is the Expenditure Operating or Capital? Operating Expenditure Increase (Decrease) Account Number Description 2022 2023 2024 2025 2026 001.000.31.514.23.41.00 Professional Services $ 60,600 $ $ $ $ Total Expenditure Increase (Decrease) $ 60,000 $ $ S $ Revenue Increase (Decrease) Account Number Description 2022 2023 2024 2025 2026 Total Revenue Increase (Decrease) $ $ S S $ Ending Fund Balance Increase (Decrease) Account Number Description 2022 2023 2024 2025 2026 001.000.39.508.00.00.00 Ending Fund Balance $ (60,000) $ S S $ Total Ending Fund Balance Increase (Decrease) 1 $ (60,000)1 $ I S S $ 11 Packet Pg. 14 2.2.b ORDINANCE NO. XXXX AN ORDINANCE OF THE CITY OF EDMONDS, WASHINGTON, AMENDING ORDINANCE NO. 4250 AS A RESULT OF UNANTICIPATED TRANSFERS AND EXPENDITURES OF VARIOUS FUNDS, AND FIXING A TIME WHEN THE SAME SHALL BECOME EFFECTIVE. WHEREAS, previous actions taken by the City Council require Interfund Transfers and increases in appropriations; and WHEREAS, state law requires an ordinance be adopted whenever money is transferred from one fund to another; and WHEREAS, the City Council has reviewed the amended budget appropriations and information which was made available; and approves the appropriation of local, state, and federal funds and the increase or decrease from previously approved programs within the 2022 Budget; and THEREFORE, WHEREAS, the applications of funds have been identified; THE CITY COUNCIL OF THE CITY OF EDMONDS, WASHINGTON, DO ORDAIN AS FOLLOWS: Section 1. Section 1. of Ordinance No. 4250 adopting the final budget for the fiscal year 2022 is hereby amended to reflect the changes shown in Exhibits A, B, C, and D adopted herein by reference. 1 Packet Pg. 15 2.2.b Section 2. Effective Date. This ordinance, being an exercise of a power specifically delegated to the City legislative body, is not subject to referendum, and shall take effect five (5) days after passage and publication of an approved summary thereof consisting of the title. ATTEST/AUTHENTICATE: CITY CLERK, SCOTT PASSEY APPROVED AS TO FORM: OFFICE OF THE CITY ATTORNEY: IM JEFF TARADAY FILED WITH THE CITY CLERK: PASSED BY THE CITY COUNCIL: PUBLISHED: EFFECTIVE DATE: ORDINANCE NO. APPROVED: MAYOR, MIKE NELSON 2 Packet Pg. 16 2.2.b SUMMARY OF ORDINANCE NO. of the City of Edmonds, Washington On the day of , 2022, the City Council of the City of Edmonds, passed Ordinance No. A summary of the content of said ordinance, consisting of the title, provides as follows: AN ORDINANCE OF THE CITY OF EDMONDS, WASHINGTON, AMENDING ORDINANCE NO. 4250 AS A RESULT OF UNANTICIPATED TRANSFERS AND EXPENDITURES OF VARIOUS FUNDS, AND FIXING A TIME WHEN THE SAME SHALL BECOME EFFECTIVE. The full text of this Ordinance will be mailed upon request. DATED this day of 12022. CITY CLERK, SCOTT PASSEY 3 Packet Pg. 17 2.2.b EXHIBIT "A": Budget Amendment Summary (April 2022) FUND NO. FUND DESCRIPTION 2022 BEGINNING FUND BALANCE REVENUE EXPENDITURES 2022 ENDING FUND BALANCE 001 GENERAL FUND 12,908,490 44,760,353 52,335,272 5,333,571 009 LEOFF-MEDI CAL INS. RESERVE 370,037 225,000 260,490 334,547 011 RISK MANAGEMENT RESERVE FUND - - - - 012 CONTINGENCY RESERVE FUND 1,784,770 - 1,784,770 014 HISTORIC PRESERVATION GIFT FUND 16,299 5,900 10,399 016 BUILDING MAINTENANCE 4,610,222 545,000 4,065,222 017 MARSH RESTORATION & PRESERVATION FUND 844,866 - - 844,866 018 EDMONDS HOMELESSNESS RESPONSE FUND - 200,000 200,000 - 019 EDMONDS OPIOID RESPONSE FUND - - - - 104 DRUG ENFORCEMENT FUND 193,873 167,210 45,800 315,283 111 STREET FUND 731,490 1,751,930 2,315,780 167,640 112 COMBINED STREETCONST/IMPROVE 2,075,270 13,684,871 12,868,796 2,891,345 117 MUNICIPAL ARTS ACQUIS. FUND 659,041 216,701 195,380 680,362 120 HOTEL/MOTEL TAX REVENUE FUND 51,231 84,410 100,900 34,741 121 EMPLOYEEPARKINGPERMITFUND 80,358 26,540 26,880 80,018 122 YOUTH SCHOLARSHIP FUND 12,768 1,550 3,000 11,318 123 TOURISM PROMOTIONAL FUND/ARTS 85,338 29,590 28,200 86,728 125 PARK ACQ/IMPROVEMENT 3,375,343 2,271,020 4,589,688 1,056,675 126 SPECIAL CAPITAL FUND 2,799,839 2,261,030 2,483,667 2,577,202 127 GIFTS CATALOG FUND 294,795 82,750 78,400 299,145 130 CEMETERY MAINTENANCE/IMPROV 211,509 182,430 220,561 173,378 136 PARKSTRUSTFUND 168,837 4,330 50,000 123,167 137 CEMETERY MAINTENANCE TRUSTFD 1,100,900 43,520 25,000 1,119,420 138 SISTER CITY COMMISSION 10,362 10,290 11,900 8,752 140 BUSINESS IMPROVEMENT DISTRICT FUND 23,181 79,349 87,680 14,850 141 AFFORDABLE & SUPPORTIVE HOUSING FUND 143,441 65,000 - 208,441 142 EDMONDS RESCUE PLAN FUND 4,727,492 4,856,549 6,077,492 3,506,549 143 TREE FUND 20,487 215,330 214,800 21,017 211 LID FUND CONTROL - - - - 231 2012 LTGO DEBTSERVICE FUND 611,370 611,370 - 332 PARKS CONSTRUCTION 4,848,045 3,822,685 7,614,418 1,056,312 421 WATER 26,413,506 11,018,136 11,490,988 25,940,654 422 STORM 15,081,583 7,877,897 9,619,649 13,339,831 423 SEWER/TREATMENT PLANT 48,428,426 24,820,083 29,529,856 43,718,653 424 BOND RESERVE FUND 843,961 1,988,700 1,988,710 843,951 511 EQUIPMENT RENTAL FUND 8,999,440 1,925,920 1,950,371 8,974,989 512 Technology Rental Fund 889,194 1,153,570 1,539,022 503,742 Totals 142,804,394 124,438,114 147,114,970 120,127,538 �L sZ Q N N O N C N E t U M r Q Packet Pg. 18 2.2.b EXHIBIT "B": Budget Amendments by Revenue (April 2022) FUND NO. FUND DESCRIPTION Adopted Budget Ord.#4240 1/1/2022 Adopted Amendment Ord.#4249 3/1/2022 Adopted Amendment Ord.#4250 3/15/2022 Proposed Amendment Ord.# 2022 Amended Revenue Budget 001 General Fund $ 44,204,863 $ (35,000) $ 470,845 $ 119,645 $ 44,760,353 009 Leoff-Medical Ins. Reserve 225,000 - - 225,000 011 Risk Management Reserve Fund - - 012 Contingency Reserve Fund 014 Historic Preservation Gift Fund 016 Building Maintenance Fund 017 Marsh Restoration & Preservation Fund - - 018 Edmonds Homelessness Response Fund 200,000 200,000 019 Edmonds Opioid Response Fund - - - 104 Drug Enforcement Fund 167,210 167,210 111 Street Fund 1,751,930 - 1,751,930 112 Combined Street Const/Improve 13,359,021 325,850 13,684,871 117 Municipal Arts Acquis. Fund 216,701 - 216,701 118 Memorial Street Tree - - 120 Hotel/Motel Tax Revenue Fund 84,410 84,410 121 Employee Parking Permit Fund 26,540 26,540 122 Youth Scholarship Fund 1,550 1,550 123 Tourism Promotional Fund/Arts 29,590 29,590 125 ParkAcq/Improvement 2,271,020 2,271,020 126 Special Capital Fund 2,261,030 2,261,030 127 Gifts Catalog Fund 82,750 82,750 130 Cemetery Maintenance/Improv 182,430 182,430 136 Parks Trust Fund 4,330 4,330 137 Cemetery Maintenance Trust I'd 43,520 43,520 138 Sister City Commission 10,290 10,290 140 Business Improvement District Fund 79,349 79,349 141 Affordable and Supportive Housing Fund 65,000 65,000 142 Edmonds Rescue Plan Fund 4,856,549 4,856,549 143 Tree Fund 215,330 215,330 211 Lid Fund Control - - 231 2012 LTGO Debt Service fund 611,370 611,370 332 Parks Construction 3,822,685 3,822,685 421 Water 11,018,136 11,018,136 422 Storm 8,277,897 (400,000) - 7,877,897 423 Sewer/Treatment Plant 16,001,340 8,818,743 24,820,083 424 Bond Reserve Fund 1,988,700 - 1,988,700 511 Equipment Rental Fund 1,925,920 1,925,920 512 Technology Rental Fund 1,153,570 1,153,570 617 Firemen's Pension Fund - - Totals $ 114,938,031 1 $ (235,000) $ 9,615,438 1 $ 119,645 1 $ 124,438,114 r C d E C d E Q d Cf 3 m �L Q Q N N O N �L Q Q N N 0 N C N E t v M r Q Packet Pg. 19 2.2.b EXHIBIT "C": Budget Amendment by Expenditure (April 2022) FUND NO. FUND DESCRIPTION Adopted Budget Ord.#4240 1/1/2022 Adopted Amendment Ord.#4249 3/1/2022 Adopted Amendment Ord.#4250 3/15/2022 Proposed Amendment Ord.# 2022 Amended Expenditure Budget 001 General Fund $ 49,246,551 $ (1,677) $ 126,661 $ 2,963,737 $ 52,335,272 009 Leoff-Medical Ins. Reserve 260,490 - 260,490 011 Risk Management Reserve Fund - - 012 Contingency Reserve Fund - - 014 Historic Preservation Gift Fund 5,900 5,900 016 Building Maintenance Fund 980,000 (435,000) 545,000 017 Marsh Restoration & Preservation Fund - - - 018 Edmonds Homelessness Response Fund 200,000 200,000 019 Edmonds Opioid Response Fund - - 104 Drug Enforcement Fund 45,800 - 45,800 111 Street Fund 2,254,676 61,104 2,315,780 112 Combined Street Const/Improve 12,542,946 325,850 - 12,868,796 117 Municipal Arts Acquis. Fund 181,880 13,500 195,380 118 Memorial Street Tree - - - 120 Hotel/Motel Tax Revenue Fund 100,900 100,900 121 Employee Parking Permit Fund 26,880 26,880 122 Youth Scholarship Fund 3,000 3,000 123 Tourism Promotional Fund/Arts 28,200 - 28,200 125 ParkAcq/Improvement 4,279,876 309,812 4,589,688 126 Special Capital Fund 1,922,273 561,394 2,483,667 127 Gifts Catalog Fund 78,400 - 78,400 130 Cemetery Maintenance/Improv 220,561 - 220,561 136 Parks Trust Fund - 50,000 50,000 137 Cemetery Maintenance TrustFd 25,000 - 25,000 138 Sister City Commission 11,900 11,900 140 Business Improvement District Fund 87,680 87,680 141 Affordable and Supportive Housing Fund - - - 142 Edmonds Rescue Plan Fund 1,250,000 4,727,492 100,000 6,077,492 143 Tree Fund 214,800 - - 214,800 211 Lid Fund Control - - 231 2012LTGO Debt Service Fund 611,370 - 611,370 332 Parks Construction 7,321,018 293,400 - 7,614,418 421 Water 11,110,498 365,396 15,094 11,490,988 422 Storm 8,638,202 (400,000) 1,443,238 (61,791) 9,619,649 423 Sewer/Treatment Plant 15,656,812 13,855,689 17,355 29,529,856 424 Bond Reserve Fund 1,988,710 - - 1,988,710 511 Equipment Rental Fund 1,942,460 - 7,911 1,950,371 512 Technology Rental Fund 1,447,422 91,600 - 1,539,022 617 Firemen'S Pension Fund - Totals 1 $122,484,205 1 $ (201,677) $ 22,164,032 1 $ 2,668,410 1 $ 147,114,970 r C d E C d E Q d Cf 3 m �L Q Q N N 0 N �L Q N N O N C N E t V M r Q Packet Pg. 20 EXHIBIT "D": Budget Amendment Summary (April 2022) 2.2.b Fund Number Proposed Amendment Changein Revenue Proposed Amendment Change in Expense Proposed Amendment Change in Ending Fund Balance 001 2,963,737 (2,963,737) 016 119,645 (435,000) 554,645 111 61,104 (61,104) 142 100,000 (100,000) 421 15,094 (15,094) 422 (61,791) 61,791 423 17,355 (17,355) 511 7,911 (7,911) Total Change 119,645 2,668,410 (2,548,765) �L Q Q N N O N C N E t V M r Q Packet Pg. 21 2.3 City Council Agenda Item Meeting Date: 04/12/2022 ARPA Funding Status Staff Lead: Doug Merriman, CSED Interim Director Department: City Clerk's Office Preparer: Nicholas Falk Background/History Section 4 of Ordinance No. 4229, passed by the City Council on July 20, 2021, set out the provisions for utilizing the City's allocation of federal American Rescue Plan Act (ARPA) funding to mitigate the local impacts of the COVID-19 pandemic. These provisions divide the total funding of $11,893,099 into six accounts, A through F, to concentrate the expenditure of funds into specific areas of interest. City Council subsequently passed Ordinance. 4237, on November 1, 2021, to "clarifying the availability of the grant funds and increasing the parameters of grant recipient eligibility". During the latter part of 2021 and the first 2 months of 2022, programs within each Account designated in Ordinance No. 4229 have progressed through startup phases with funding being committed and expended per the terms of the ordinance. Staff Recommendation 1) Discuss possible reallocation of ARPA funds between categories. 2) Discuss possible edits to Ordinance wording to eliminate unintended restrictions to disbursing funds. Please note that any suggested changes to the existing funding allocations will require the additional amendments to the wording of the attached draft Ordinance. Narrative 1) ARPA Funding Status Graphs as of 3/4/2022. 2) Draft amended Ordinance No 4237 - with edits and comments. Attachments: ARPA Funding Slides as of 3-4-2022 Ordinance 4237 - Amends Ordinance 4229 SB Comments Packet Pg. 22 2.3.a 1 $80,788 A - City Expenditures - 6.3% $90,474 _ $7 B - Household Support - aiw 34.9% . $244,369 C - Business Support - 9.5% $56, D - Nonprofit Support - _ $420,5 4.2% $420,5 $500, M $199,999 E - Job Retraining - 5.0% $6( $6( F - Green Infrastructure - $0 40.1 % $0 $0 ■ Expenditures Total ARPA Funds - $11,893,099 $1,050,000 $1,125,000 $4,150, 000 $4 1,768,099 I I 1 1 $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 Commitments Funds Allocated - Account r r a� c c LL Q a o: Q N N O N 17 M 0 U) CU U) a) W a� c c LL Q a Q c m E t r a Packet Pg. 23 2.3.a Housing Repair Support - 24.0 Utility Bill Support - 3.6% Household General Support - 72.4 B - Household Support Subcategories - $4,150,000 $3,000,000 $0 $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 $3,500,000 ■ Expenditures Commitments ■ Funds Allocated w a Packet Pg. 24 2.3.a Small Business Support - 55.6 Tourism Support - 26.6% General Business Support - 17.8 $0 C - Business Support Subcategories - $1,125,000 ■ Expenditures $625,0 $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 $700,000 Commitments ■ Funds Allocated w a Packet Pg. 25 2.3.b ORDINANCE NO.4237 AN ORDINANCE OF THE CITY OF EDMONDS, WASHINGTON, AMENDING ORDINANCE 4229, RELATED TO THE EDMONDS RESCUE PLAN FUND WHEREAS, the City Council adopted Ordinance 4229 on July 20, 2021, which set out the provisions for utilizing Edmonds' allocation of federal American Rescue Plan Act of 2021 (ARPA) monies to mitigate the local impacts of the COVID-19 pandemic and related social, health and economic crises; and WHEREAS, following adoption of Ordinance 4229, City staff determined that certain revisions to the language of the Ordinance would benefit the public by clarifying the availability of the grant funds and increasing the parameters for grant recipient eligibility; and WHEREAS, the City Council wishes to incorporate the proposed revisions into the provisions of Ordinance 4229 as set forth herein; NOW THEREFORE; THE CITY COUNCIL OF THE CITY OF EDMONDS, WASHINGTON, ORDAINS AS FOLLOWS: Section 1. Subsection 4.B. of Ordinance 4229 is hereby amended as follows (deletions are indicated by strike through: additions are indicated by underline): B. Account "B" shall be the "Edmonds Rescue Plan Household Support" account into which $4,150,000 from the ARPA funds shall be allocated to reimburse those City expenditures incurred through administration of the following programs, in compliance with the ARPA eligibility criteria: 1. Household Support. Up to $3,000,000 for Grants to households earning for housing expenses, food, medical bills,childcare, internet access, and other household expenses. Up-to-4004iHouseholds may receive grants of up to $2,500 in 2021 �no 2022. r"Households mayreceive grants of up to $2,500 in 2023 and 2024. 2. Utility Bill Support. Up to $150,000 for one-time grants to households in amounts up to $1,000 €ef- } to O� N N d t� C to C :a L O to C N E a ti M N N U C M c — ' Commented [MD7]: Would propose to eliminate L. :r of households limitation. Based on experience, mo: O households do not qualify for the maximum funding .. nt. Accordingly, we run out of number of household ca +' C before we run out of money. 01 E t t) r� r� Q Packet Pg. 26 2.3.b 150 hattseholds ., help defray expenses derived from outstanding City of Edmonds utilities bills. 3. Housing Repair. Up to $1,000,000 for one-time grants to households up to $5,000 each earning nomore than 40% of Edmonds Median Income for housing repair,) especially focused on energy -saving measures such as roof repair, window replacement, HVAC repair/replacement, etc. Up to 200 grants a4 up ,. $5,000 each To be eligible for grants. households must meet one of the two following parameters: 1) Eearn no more than 60% of EdmondsMedian Income. with priority given 2) Qualify for assistance under one of the listed programs on the U.S. Department of the Treasury Final Rule for the State and Local Fiscal Recovery Funds (SLFRF) program, as an impacted or disproportionately impacted Section 2. Subsection 4.C.3 of Ordinance 4229 is hereby amended as follows (deletions are indicated by strike through: additions are indicated by underline): 3. Small Business Support. Up to $625,000 for direct grants to small businesses most affected by the COVID-19-related economic recession. Grants will take the form of individual financial support grants (in the form of loans that are forgivable after four months of performance), totaling up to 50 at up to $10,000 each in 2021, with up to 25 grants of up to $5,000 each available in 2022. Eligibility criteria for these grants will include: a. Small businesses in Edmonds with zero to 30 employees. b. Businesses must demonstrate at least a 50% loss in revenue by the end of 2020 compared to the pre -pandemic 2019 revenues. c. Businesses must not have received more than $10,000 in othergrants, tax credits or other financial assistance. 2 N M r CO C Commented [BS2]: I appears this is targeting tho are disproportionately impacted as defined below (t] e extreme of the two measures, should update to refle ILL a a a rn C E Formatted: No underline, Underline color: Aut, C color: Auto, Character scale: 100% C) Formatted: Indent: Left: 1.21", First line: 0" m O� N le Commented [MD3]: Based on Final Rule, we we V propose that a household qualifying under one of th, categories would qualify for assistance for our grant M C L O rn C N E a ti M N N v C tC C 'a L O r C d E t v M a Packet Pg. 27 2.3.b d. Particular consideration will be given to businesses owned by people of color, women, veterans, and other minorities. Section 3. Section 5 of Ordinance 4229 is hereby amended as follows (additions are indicated by underline): 3 R a1 c 'a C 3 LL Q IL Q' Q N r� C O E E O 0 m Cn CD I N N d t� C c0 C L O a ti M N N V C C L 0 C a) E L :i a Packet Pg. 28 2.3.b Section 5. For those accounts that specify the number of grants or the amount of grant funds to be awarded in specific years. in the event that the number of grants or the amount of grant funds awarded in a year will result in less than a full disbursement of that year allocated funds, the Mayor or designee has the option to award additional grants, to roll over remaining funds to the following year. or both. The City may only use ARPA funds to cover costs incurred for one or more of the purposes allowed by federal law and during the period beginning March 3, 2021, and ending December 31, 2024. A cost shall be considered to have been incurred for purposes of this Section if the City has incurred an obligation with respect to such cost by December 31, 2024. The City must return any funds not obligated by December 31, 2024, and any funds not expended to cover such obligations by December 31, 2026. Section 4. Severability. If any section, subsection, clause, sentence, or phrase of this ordinance should be held invalid or unconstitutional, such decision shall not affect the validity of the remaining portions of this ordinance. Section 5. Publication. This Ordinance shall be published by an approved summary consisting of the title. Section 6. Effective Date. This ordinance, being exempt under RCW 35A. 11.090(4), as an ordinance appropriating money, is not subject to referendum and shall take effect five (5) days after passage and publication of an approved summary thereof consisting of the title. APPROVED: W Q Packet Pg. 29 2.3.b a a Packet Pg. 30 2.4 City Council Agenda Item Meeting Date: 04/12/2022 February 2022 Monthly Financial Report Staff Lead: Dave Turley Department: Administrative Services Preparer: Sarah Mager Background/History N/A Staff Recommendation Review and move to full council on consent. Narrative February 2022 Monthly Financial Report Attachments: February 2022 Monthly Financial Report Packet Pg. 31 I 2.4.a I OF EDP � d lac. 1 $9v CITY OF EDMONDS MONTHLY BUDGETARY FINANCIAL REPORT FEBRUARY 2022 Packet Pg. 32 1 INVESTMENT PORTFOLIO SUMMARY I 2.4.a I Agency/ Investment Issuer Type FFCB Bonds Energy Northwest Bonds Energy Northwest Bonds Mason & Kitsap Cnty WA Bonds Grant Cnty WA Bonds Grant Cnty WA Bonds Seattle WA Muni Bonds FHLB Bonds First Financial - ECA CD Kent WA Bonds Spokane County WA Bonds First Financial - Waterfront Center CD TOTAL SECURITIES Washington State Local Gov't Investment Pool Snohomish County Local Gov't Investment Pool TOTAL PORTFOLIO City of Edmonds Investment Portfolio Detail As of February 28, 2022 Years Purchase to Par Price 1,998,548 1,466,077 260,748 948,084 1,517,955 576,332 2,224,500 1,996,590 2,803,516 286,648 207,260 1,575,000 15,861,256 Issuer Diversification Seattle WA Kent WA, Muni, 13% Mason & First Kits apCnty Financial - WA, 6% CD, 29% Grant Cnty Spokane WA, 13%County FHLB, WA, 1% 13% FFCB, 13% Energy Northwest, 10% 0.29 0.34 0.34 0.76 0.84 0.84 0.93 1.60 1.71 1.76 2.76 5.68 1.49 Value 2,000,000 1,345,000 250,000 855,000 1,500,000 520,000 2,000,000 2,000,000 2,803,516 250,000 200,000 1,575,000 15,298,516 14, 921, 257 42,527,765 Market Value 2,008,088 1,364,933 251,888 881,633 1,504,545 537,919 2,076,060 1,969,112 2,803,516 266,795 201,206 1,575,000 15,440,695 14, 921, 257 42,527,765 $ 72,747,539 $ 72,889,717 Maturity Date 06/14/22 07/01 /22 07/01 /22 12/01 /22 01 /01 /23 01 /01 /23 02/01 /23 10/05/23 11 /15/23 12/01 /23 12/01 /24 11 /01 /27 Demand Demand Coupon Rate 1.88% 5.00% 2.95% 5.00% 1.54% 5.00% 5.00% 0.22% 2.08% 5.00% 2.10% 0.25% 0.11% 1.04% Cash and Investment Balances Checki ng, (in $ Millions) _ $2.7 , 4% CD's, $4.4,� Bonds, 6% $10.9, 14% State LGIP,k $14.9, 20% County LGIP, $42.5 , 569/c O N to U C O C LL 21 L r� C O a N N O N to 3 L LL 1 Packet Pg. 33 I 2.4.a I INVESTMENT PORTFOLIO SUMMARY Annual Interest Income $1,400, 000 $1,236,875 $1,200, 000 $1,000,000 $882556 947 931 $950,684 $800,000 $635,781 $600,000 $400,000 $226,451 $200,000 $- 2017 2018 201 2020 2021 YTD 2022 2 Packet Pg. 34 GENERAL FUND SUMMARY I 2.4.a I General Fund Revenues and Expenses (Rolling 24 months) General Fund Revenue General Fund Expenses 10,000, 000 9,000,000 8,000,000 --•� 7,000, 000 6,000,000 • 5,000,000 • 4,000,000 • 3,000,000 2,000,000 -+ 1,00%000 - - T March June September December March June September December General Fund Tax Revenue (2016 through 2021) Sales Tax Property Tax EMS Tax Other Taxes 12,000, 000 10,000, 000 8,000, 000 6,000,000 4,000, 000 2,000,000 2016 2017 2018 2019 2020 2021 2,000,000 1,800,000 1,600,000 1,400, 000 1,200,000 1,000,000 800,000 600,000 400,000 200,000 Sales Tax General Fund Tax Revenue (2022 YTD) 537.762 Property Tax EMS Tax it- Other Taxes 3 I Packet Pg. 35 I 2.4.a I City of Edmonds, WA Monthly Revenue Summary -General Fund 2022 General Fund Cumulative Monthly YTD Variance Budget Forecast Budget Forecast Actuals January $ 2,484,467 $ 2,484,467 $ 2,291,020 -7.79% February 4,913,525 2,429,058 4,710,176 -4.14% March 7,374,972 2,461,446 April 10,508,115 3,133,143 May 19,342,926 8,834,811 June 21,919,233 2,576,308 July 24,447,221 2,527,987 August 27,064,689 2,617,469 September 29,443,427 2,378,738 October 33,489,206 4,045,780 November 42,060,773 8,571,567 December 44,640,708 2,579,935 City of Edmonds, WA Monthly Revenue Summary -Real Estate Excise Tax 2022 Real Estate Excise Tax 1 & 2 Cumulative Monthly Budget Forecast Budget Forecast YTD Variance Actuals January $ 381,097 $ 381,097 $ 377,895 -0.84% February 611,562 230,465 620,392 1.44% March 952,142 340,580 April 1,227,434 275,291 May 1,586,772 359,339 June 1,961,879 375,106 July 2,368,248 406,370 August 2,810,074 441,826 September 3,256,638 446,564 October 3,660,486 403,848 November 4,056,561 396,075 December 4,400,000 343,439 *The monthly budget forecast columns are based on a five-year average. F O CL C M a lL t r C O r- N N O N M 7 L d w Packet Pg. 36 1 SALES TAX SUMMARY 2.4.a Construction Trade, $268,962 Accommodation, $6,4491 Clothing and Accessories, CommuniMMA? $43,825 Wholesale Trade, $62,848 12,000,000 10,000, 000 8,000,000 6,000,000 4,000,000 2,000,000 0 Sales Tax Analysis By Category Current Period: February 2022 Year -to -Date Total $1,853,000 Amusement & TT r Automotive Repair, Recreation, $12,529 , $39,684 Business Services, $223,849 Gasoline, $5,488 Retail Food Stores, etail Automotive, $60,440 -■■ Others, $30,497 Manufacturing, $22,816 g & Drinking, $182,969 Annual Sales Tax Revenue $10,302,518 7.395.114 $8,406,296 $8,452,715 $8,317,046 1.853.000 2016 2017 2018 201!3 2020 2021 YTD 2022 F 0 CL c 0 c 21 z c 0 a N N O N M L d 5 I Packet Pg. 37 I 2.4.a I City of Edmonds, WA Monthly Revenue Summary -Sales and Use Tax 2022 Sales and Use Tax Cumulative Monthly Budget Forecast Budget Forecast YTD Variance Actuals January $ 763,651 $ 763,651 $ 857,872 12.34% February 1,704,609 940,958 1,853,000 8.71% March 2,420,254 715,646 April 3,074,639 654,384 May 3,893,081 818,442 June 4,672,507 779,426 July 5,523,403 850,896 August 6,439,084 915,680 September 7,293,649 854,565 October 8,203,996 910,347 November 9,139,425 935,429 December 10,000,000 860,575 City of Edmonds, WA Monthly Revenue Summary -Gas Utility Tax 2022 Gas Utility Tax Cumulative Monthly Budget Forecast Budget Forecast YTD Actuals Variance January $ 79,399 $ 79,399 $ 96,596 21.66% February 164,205 84,806 96,596 -41.17% March 246,125 81,920 April 313,860 67,734 May 367,416 53,556 June 402,173 34,757 July 429,975 27,802 August 452,332 22,357 September 472,668 20,335 October 496,035 23,367 November 534,998 38,963 December 595,000 60,002 Gas Utility Tax 700,000 600,000 500,000 - 400,000 300,000 200,000 100,000 0 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Current Year Budget Prior Year *The monthly budget forecast columns are based on a five-year average. F O CL C M a LL t r C O N N O N M 7 L d 6 Packet Pg. 38 I 2.4.a I City of Edmonds, WA Monthly Revenue Summary -Telephone Utility Tax 2022 Telephone Utility Tax Cumulative Monthly YTD Variance Budget Forecast Budget Forecast Actuals January $ 53,352 $ 53,352 $ 43,844-17.82% February 96,981 43,629 66,255-31.68% March 143,255 46,275 April 192,397 49,142 May 232,481 40,084 June 277,770 45,288 July 321,046 43,277 August 362,710 41,663 September 400,099 37,389 October 445,363 45,264 November 482,039 36,676 December 523,000 40,961 Electric Utility Tax Telephone Utility Tax 600,000 500,000 400,000 300,000 200,000 100,000 0 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Current Year Budget -*-- Prior Year City of Edmonds, WA Monthly Revenue Summary -Electric Utility Tax 2022 Cumulative Monthly YTD Variance Budget Forecast Budget Forecast Actuals January $ 148,905 $ 148,905 $ 183,023 22.91% February 312,488 163,583 377,116 20.68% March 449,608 137,121 April 602,286 152,678 May 723,393 121,107 June 824,492 101,099 July 920,639 96,147 August 1,015,921 95,282 September 1,108,535 92,614 October 1,199,070 90,535 November 1,299,972 100,902 December 1,410,000 110,028 Electric Utility Tax 1,zsuu,uuu 1,600,000 1,400,000 1,200,000 1,000,000 800,000 600,000 400,000 200,000 0 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC -*-- Current Year Budget � Prior Year *The monthly budget forecast columns are based on a five-year average. O CL O 2 U C M C LL t r C O N 04 O N M 7 L d Packet Pg. 39 I 2.4.a I City of Edmonds, WA Monthly Revenue Summary -Meter Water Sales 2022 Meter Water Sales Cumulative Monthly Budget Forecast Budget Forecast YTD Variance Actuals January $ 809,979 $ 809,979 $ 827,704 2.19% February 1,383,405 573,426 1,383,308 -0.01% March 2,213,219 829,814 April 2,744,029 530,810 May 3,542,697 798,668 June 4,167,857 625,160 July 5,138,308 970,451 August 5,986,736 848,427 September 7,133,311 1,146,575 October 7,954,825 821,514 November 8,891,706 936,881 December 9,464,783 573,077 City of Edmonds, WA Monthly Revenue Summary -Storm Water Sales 2022 Storm Water Sales Cumulative Monthly Budget Forecast Budget Forecast YTD Variance Actuals January $ 426,464 $ 426,464 $ 417,730 22.91% February 1,352,938 926,475 1,322,856 20.68% March 1,779,789 426,851 April 2,159,443 379,654 May 2,586,880 427,437 June 2,966,444 379,564 July 3,385,868 419,425 August 4,311,526 925,657 September 4,738,766 427,240 October 5,118,192 379,426 November 5,545,860 427,668 December 5,911,497 365,637 Storm Water Sales 6,000,000 5,500,000 5,000,000 4,500,000 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Current Year Budget - Prior Year *The monthly budget forecast columns are based on a five-year average. F O !Z C M a LL t r C O N N O tV M 7 L d Packet Pg. 40 I 2.4.a I City of Edmonds, WA Monthly Revenue Summary-Unmeter Sewer Sales 2022 Unmeter Sewer Sales Cumulative Monthly Budget Forecast Budget Forecast YTD Variance Actuals January $ 863,521 $ 863,521 $ 877,046 1.57% February 1,571,494 707,973 1,604,010 2.07% March 2,435,565 864,071 April 3,143,499 707,934 May 4,009,811 866,312 June 4,719,932 710,121 July 5,593,564 873,631 August 6,307,925 714,362 September 7,215,145 907,220 October 7,936,868 721,723 November 8,819,637 882,769 December 9,528,089 708,452 O N R U C t4 C LL t Y O 2 N N O N fC 3 L LL *The monthly budget forecast columns are based on a five-year average. 9 Packet Pg. 41 L 2.4.a I City of Edmonds, WA Monthly Expenditure Report -General Fund 2022 General Fund Cumulative Monthly YTD Variance Budget Forecast Budget Forecast Actuals January $ 5,037,513 $ 5,037,513 $ 4,601,625 -8.65% February 8,698,441 3,660,928 8,134,057 -6.49% March 12,684,987 3,986,545 April 16,175,488 3,490,501 May 19,877,603 3,702,115 June 24,471,682 4,594,079 July 28,365,767 3,894,085 August 32,050,577 3,684,810 September 35,945,282 3,894,705 October 40,211,986 4,266,704 November 44,691,316 4,479,330 December 49,371,535 4,680,219 Non -Departmental General Fund 45,000,000 40,000,000 35,000,000 30,000,000 25,000,000 20,000,000 15,000,000 5,000,000 0 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC --"—Current Year Budget �Prior Year City of Edmonds, WA Monthly Expenditure Report -Non -Departmental 2022 Cumulative Monthly YTD Variance Budget Forecast Budget Forecast Actuals January $ 2,235,029 $ 2,235,029 $ 2,099,939 -6.04% February 3,157,194 922,165 2,938,380 -6.93% March 4,332,218 1,175,025 April 5,048,922 716,703 May 5,936,975 888,054 June 7,580,854 1,643,878 July 8,529,581 948,727 August 9,310,253 780,673 September 10,214,848 904,595 October 11,354,650 1,139,802 November 12,623,189 1,268,539 December 13,877,484 1,254,295 Non -Departmental 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 0 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC --"— Current Year Budget 0-- Prior Year *The monthly budget forecast columns are based on a five-year average. F O CL O C M a LL t r C O 2 N N O N M 7 L d 10 Packet Pg. 42 I 2.4.a I City of Edmonds, WA Monthly Expenditure Report -City Council 2022 City Council Cumulative Monthly YTD Variance Budget Forecast Budget Forecast Actuals January $ 33,985 $ 33,985 $ 23,687-30.30% February 71,308 37,323 43,670-38.76% March 112,128 40,821 April 150,174 38,046 May 199,408 49,234 June 253,207 53,799 July 291,886 38,679 August 345,215 53,328 September 382,380 37,165 October 414,981 32,601 November 455,321 40,340 December 497,900 42,579 City of Edmonds, WA Monthly Expenditure Report -Office of Mayor 2022 Office of Mayor Cumulative Monthly Budget Forecast Budget Forecast YTD Actuals Variance January $ 36,522 $ 36,522 $ 28,255 -22.63% February 74,639 38,117 59,226 -20.65% March 111,240 36,600 April 148,486 37,247 May 185,158 36,671 June 221,111 35,953 July 257,901 36,789 August 295,030 37,129 September 331,738 36,709 October 367,805 36,067 November 405,747 37,941 December 443,913 38,166 Office of Mayor 500,000 450,000 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC --"-CurrentYeaz Budget --*-PriorYeaz *The monthly budget forecast columns are based on a five-year average. F O CL C M a LL t r C O N N O N M 7 L d 11 Packet Pg. 43 I 2.4.a I City of Edmonds, WA Monthly Expenditure Report -Human Resources 2022 Human Resources Cumulative Monthly Budget Forecast Budget Forecast YTD Actuals Variance January $ 77,402 $ 77,402 $ 59,932 -22.57% February 141,639 64,236 135,524 -4.32% March 202,815 61,176 April 266,756 63,941 May 331,195 64,439 June 405,872 74,678 July 464,145 58,273 August 524,126 59,981 September 590,408 66,282 October 654,662 64,254 November 726,800 72,138 December 824,831 98,031 City of Edmonds, WA Monthly Expenditure Report -Municipal Court 2022 Municipal Court Cumulative Monthly Budget Forecast Budget Forecast YTD Actuals Variance January $ 104,268 $ 104,268 $ 91,643 -12.11% February 213,906 109,638 187,919 -12.15% March 322,490 108,584 April 431,592 109,102 May 548,505 116,913 June 654,584 106,079 July 763,667 109,084 August 884,110 120,443 September 995,910 111,800 October 1,110,987 115,077 November 1,227,059 116,072 December 1,368,755 141,696 Municipal Court 1,400,000 1,200,000 1,000,000 800,000 600,000 400,000 200,000 0 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC --"-CurrentYeaz Budget -m-PriorYear *The monthly budget forecast columns are based on a five-year average. F O CL C M a LL t r C O N N O N M 7 L d 12 Packet Pg. 44 I 2.4.a I City of Edmonds, WA Monthly Expenditure Report -Community Services/Economic Development 2022 Community Services/Economic Development Cumulative Monthly YTD Variance Budget Forecast Budget Forecast Actuals January $ 49,857 $ 49,857 $ 33,127-33.56% February 103,113 53,256 72,230-29.95% March 155,568 52,455 April 205,451 49,882 May 260,752 55,301 June 315,986 55,234 July 373,132 57,147 August 434,777 61,645 September 492,000 57,223 October 552,240 60,239 November 622,590 70,351 December 719,388 96,798 F O CL FY C M C ILL t r C O N 04 O N M 7 L d ILL *The monthly budget forecast columns are based on a five-year average. 13 Packet Pg. 45 I 2.4.a I City of Edmonds, WA Monthly Expenditure Report -Technology Rental Fund 2022 Technology Rental Fund Cumulative Monthly YTD Variance Budget Forecast Budget Forecast Actuals January $ 176,962 $ 176,962 $ 216,858 22.55% February 334,966 158,004 287,295-14.23% March 484,397 149,431 April 566,805 82,408 May 674,037 107,232 June 784,541 110,504 July 877,847 93,306 August 989,174 111,327 September 1,106,217 117,044 October 1,245,373 139,155 November 1,341,722 96,350 December 1,539,022 197,300 Finance Technology Rental Fund 1,600,000 1,400,000 1,200,000 1,000,000 800,000 600,000 400,000 200,000 0 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC -0-- Current Year Budget -d Prior Year City of Edmonds, WA Monthly Expenditure Report -Administrative Services 2022 Cumulative Monthly Budget Forecast Budget Forecast YTD Variance Actuals January $ 225,174 $ 225,174 $ 217,022 -3.62% February 377,256 152,082 380,532 0.87% March 531,363 154,106 April 687,851 156,488 May 845,341 157,490 June 1,057,978 212,637 July 1,239,765 181,786 August 1,394,692 154,927 September 1,554,018 159,326 October 1,720,684 166,666 November 1,876,703 156,018 December 2,034,511 157,808 *The monthly budget forecast columns are based on a five-year average. F O CL C M a LL t r C O N N O N M 7 L d 14 Packet Pg. 46 I 2.4.a I City of Edmonds, WA Monthly Expenditure Report -City Attorney 2022 City Attorney Cumulative Monthly YTD Variance Budget Forecast Budget Forecast Actuals January $ 80,982 $ 80,982 $ 77,656 -4.11% February 161,963 80,982 155,234 -4.16% March 242,945 80,982 April 323,927 80,982 May 404,908 80,982 June 485,890 80,982 July 566,871 80,982 August 647,853 80,982 September 728,835 80,982 October 809,816 80,982 November 890,798 80,982 December 971,780 80,982 Police City Attorney 1,000,000 900,000 800,000 700,000 600,000 500,000 400,000 300,000 200,000 100,000 0 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC --P-- Current Yeaz Budget Prior Yeaz City of Edmonds, WA Monthly Expenditure Report -Police 2022 Cumulative Monthly YTD Variance Budget Forecast Budget Forecast Actuals January $ 1,045,238 $ 1,045,238 $ 973,358 -6.88% February 2,105,968 1,060,730 1,945,020 -7.64% March 3,177,596 1,071,629 April 4,236,492 1,058,896 May 5,296,298 1,059,805 June 6,428,932 1,132,634 July 7,551,012 1,122,080 August 8,579,704 1,028,692 September 9,657,485 1,077,782 October 10,845,669 1,188,184 November 12,168,634 1,322,964 December 13,375,470 1,206,836 Police 8,000,000 6,000,000 4,000,000 2,000,000 0 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC --"- Current Yeaz Budget �Prior Year *The monthly budget forecast columns are based on a five-year average. O sZ O 2 C M C LL t r C O N N O N M 7 L d 15 Packet Pg. 47 I 2.4.a I City of Edmonds, WA Monthly Expenditure Report -Development Services 2022 Development Services Cumulative Monthly YTD Variance Budget Forecast Budget Forecast Actuals January $ 272,173 $ 272,173 $ 309,139 13.58% February 567,186 295,012 661,303 16.59% March 860,247 293,062 April 1,174,618 314,370 May 1,488,050 313,432 June 1,792,716 304,666 July 2,114,310 321,593 August 2,423,605 309,295 September 2,733,462 309,857 October 3,039,102 305,640 November 3,402,002 362,901 December 3,791,859 389,857 Parks & Recreation Development Services 4,000,000 3,500,000 3,000,000 2,500,000 2,000,00001 1,500,000 1,000,000 500,000 0 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC -0-- Current Yeaz Budget -d Prior Year City of Edmonds, WA Monthly Expenditure Report -Parks & Recreation 2022 Cumulative Monthly YTD Variance Budget Forecast Budget Forecast Actuals January $ 355,002 $ 355,002 $ 319,222-10.08% February 741,625 386,623 651,988-12.09% March 1,126,525 384,900 April 1,522,015 395,490 May 1,924,415 402,401 June 2,349,540 425,125 July 2,810,806 461,266 August 3,318,677 507,872 September 3,838,377 519,700 October 4,255,079 416,701 November 4,650,239 395,160 December 5,081,735 431,496 Parks & Recreation 5,500,000 4,000,000 1,500,000 500,000 0 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC -0-- Current Yeaz Budget - Prior Year *The monthly budget forecast columns are based on a five-year average. 16 Packet Pg. 48 I 2.4.a I City of Edmonds, WA Monthly Expenditure Report -Public Works Administration 2022 Public Works Administration Cumulative Monthly YTD Variance Budget Forecast Budget Forecast Actuals January $ 49,466 $ 49,466 $ 22,716-54.08% February 100,066 50,600 46,637-53.39% March 150,167 50,100 April 201,867 51,701 May 252,421 50,554 June 303,852 51,431 July 355,684 51,832 August 405,471 49,786 September 455,172 49,701 October 504,185 49,013 November 567,424 63,239 December 614,113 46,689 Facilities Maintenance Public Works Administration 700,000 600,000 500,000 400,000 300,000 200,000 100,000 0 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Current Year Budget � Prior Year City of Edmonds, WA Monthly Expenditure Report -Facilities Maintenance 2022 Cumulative Monthly YTD Variance Budget Forecast Budget Forecast Actuals January $ 147,178 $ 147,178 $ 109,202-25.80% February 306,257 159,079 369,398 20.62% March 485,440 179,182 April 646,968 161,528 May 809,892 162,925 June 942,838 132,946 July 1,105,857 163,019 August 1,298,546 192,690 September 1,524,621 226,074 October 1,782,450 257,829 November 1,988,047 205,597 December 2,298,775 310,728 Facilities Maintenance 500,000 0 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC -0-- Current Yeaz Budget -0-- Prior Year *The monthly budget forecast columns are based on a five-year average. F O sZ C M C LL t r C O N tV O N M 7 L d 17 Packet Pg. 49 I 2.4.a I City of Edmonds, WA Monthly Expenditure Report -Engineering 2022 Engineering Cumulative Monthly Budget Forecast Budget Forecast YTD Variance Actuals January $ 225,595 $ 225,595 $ 226,829 0.55% February 452,988 227,392 457,182 0.93% March 684,071 231,083 April 917,956 233,885 May 1,175,026 257,070 June 1,412,521 237,495 July 1,660,688 248,167 August 1,900,016 239,329 September 2,131,816 231,799 October 2,366,570 234,755 November 2,602,612 236,042 December 2,845,336 242,724 O N R U C f� C LL _A t Y O 2 N N O N fC 3 L LL *The monthly budget forecast columns are based on a five-year average. 18 Packet Pg. 50 I 2.4.a I Page 1 of 1 C TTY O F IDMO NDS REVINUES BY FUND - SUMMARY Fund 2022 Amended 2/28/2021 2/28/2022 Amount No. Title Budget Revenues Revenues Remaining %Received 001 GENERAL FUND 1 $ 44,640,708 $ 5,089,278 $ 4,710,176 $ 39,930,532 110 009 LEOFF-MEDICAL INS. RESERVE 225,000 - - 225,000 04 016 BUILDING MAINTENANCE FUND - - 12,371 (12,371) 04 018 EDMONDS HOMELESSNESS RESPONSE FUND 200,000 - - 200,000 00 104 DRUG ENFORCEMENT FUND 167,210 502 528 166,682 00 .-. Ill STREET FUND 1,751,930 227,570 220,123 1,531,807 130 O 0. 112 COMBINED STREET CONST/IMPROVE 13,684,871 483,438 391,143 13,293,728 34 4) 117 MUNICIPAL ARTSACQUIS. FUND 216,701 4,749 67,722 148,979 314 �p 118 MEMORIAL STREET TREE - 137 - - 04 v C M 120 HOTEL/MOTEL TAX REVENUE FUND 84,410 7,389 14,104 70,306 170 r- IL 121 EMPLOYEE PARKING PERMIT FUND 26,540 5,080 7,790 18,750 290 122 YOUTH SCHOLARSHIP FUND 1,550 93 100 1,450 60 r C 123 TOURISM PROMOTIONAL FUND/ARTS 29,590 2,846 5,195 24,395 180 0 125 REAL ESTATE EXCISE TAX 2 2,271,020 479,346 338,827 1,932,193 150 N 126 REAL ESTATE EXCISE TAX 1 2,261,030 477,329 334,358 1,926,672 154 N 127 GIFT S CAT ALOG FUND 82,750 18,231 62,990 19,760 764 �% M 130 CEMETERY MAINTENANCE/IMPROVEMT 182,430 31,103 40,753 141,677 220 i 136 PARKSTRUST FUND 4,330 1,126 1,182 3,148 270 Li 137 CEMETERY MAINTENANCE TRUST FD 43,520 10,675 12,091 31,429 280 r- 138 SISTER CITY COMMISSION 10,290 70 108 10,182 14 O 0. 140 BUSINESS IMPROVEMENT DISTRICT 79,349 34,450 34,985 44,364 440 4) 141 AFFORDABLE AND SUPPORTIVE HOUSINGFUND 65,000 14,207 16,010 48,990 250 i0 142 EDMONDS RESCUE PLAN FUND 4,856,549 - - 4,856,549 00 143 TREE FUND 215,330 - 143 215,187 00 E 231 2012 LT GO DEBT SERVICE FUND 611,370 - - 611,370 00 >, 332 PARKS CAPITAL CONSTRUCTION FUND 3,822,685 31,155 20,158 3,802,527 s 14 411 COMBINED UTILITY OPERATION - 120 25,960 (25,960) 04 421 WATER UTILITY FUND 11,018,136 1,556,152 1,654,074 9,364,062 150 422 STORM UTILITY FUND 2 7,877,897 1,847,019 1,567,867 6,310,030 200 423 SEWER/WWTP UTILITY FUND 3 24,820,083 4,419,842 3,393,406 21,426,677 140 424 BOND RESERVE FUND 1,988,700 2 2 1,988,698 04 511 EQUIPMENT RENTAL FUND 1,925,920 253,410 318,226 1,607,694 170 512 TECHNOLOGY RENTAL FUND 1,153,570 205,039 196,324 957,246 170 $ 124,318,469 $ 15,200,360 $ 13,446,717 $1109871,752 110 Fund 001 revenues are down $(379,102) in 2022; this is due to a "DOC FAC Roofing Grant that was received in January of 2021. 2 2022 Utility Rate Increases are 4.5%for Water, 5%for Sewer, and 9.5%for Storm Drain. 3 Difference is primarily due to WWTP partner billings in January 2021. 19 Packet Pg. 51 I 2.4.a I Page 1 of 1 C ITY OF EDMO NDS EXPENDITURES BY FUND - SUMMARY Fund 2022 Amended 2/28/2021 2/28/2022 Amount No. Title Budget Expenditures Expenditures Remaining %Spent 001 GENERAL FUND $ 49,371,535 $ 7,637,016 $ 8,134,057 $ 41,237,478 160 009 LEOFF-MEDICAL INS. RESERVE 260,490 55,277 53,349 207,141 200 014 HISTORIC PRESERVATION GIFT FUND 5,900 - - 5,900 04 016 BUILDING MAINTENANCE FUND 980,000 - 980,000 00, 018 EDMONDS HOMELESSNESS RESPONSE FUND 200,000 - 200,000 00/ 104 DRUG ENFORCEMENT FUND 45,800 - - 45,800 00 p iZ III STREET FUND 2,254,676 434,795 454,338 1,800,338 200, 112 COMBINED STREET CONST/IMPROVE 12,868,796 35,024 69,666 12,799,130 10, 117 MUNICIPAL ARTSACQUIS. FUND 195,380 6,141 2,125 193,255 10 _ 120 HOTEL/MOTEL TAX REVENUE FUND 100,900 7,278 5,703 95,197 to 60/ C 121 EMPLOYEE PARKING PERMIT FUND 26,880 - - 26,880 IL 04 122 YOUTH SCHOLARSHIP FUND 3,000 (150) 3,150 -50, r c 123 TOURISM PROMOTIONAL FUND/ARTS 28,200 - - 28,200 00 0 125 REAL ESTATE EXCISE TAX 2 4,589,688 11,457 144,516 4,445,172 30/ N N 126 REAL ESTATE EXCISE TAX 1 2,483,667 105,293 30,676 2,452,991 10/ N 127 GIFTS CATALOG FUND 78,400 - 2,114 76,286 30, �% M 130 CEMETERY MAINTENANCE/IMPROVEMT 220,561 28,671 31,341 189,220 140 i 136 PARKS TRUST FUND 50,000 - - 50,000 00 137 CEMETERY MAINTENANCE TRUST FUND 25,000 - 25,000 00, 138 SISTER CITY COMMISSION 11,900 - - 11,900 00, 0 0. 140 BUSINESS IMPROVEMENT DISTRICT 87,680 4,600 5,885 81,795 70, 142 EDMONDS RESCUE PLAN FUND 5,977,492 - 114,190 5,863,302 20/ iC 143 TREE FUND 214,800 - 214,800 00 r 231 2012 LT GO DEBT SERVICE FUND 611,370 - 611,370 00, C 332 PARKS CAPITAL CONSTRUCTION FUND 7,614,418 67,133 834,366 6,780,052 110 421 WATER UTILITY FUND 11,475,894 792,707 894,523 10,581,371 80 422 STORM UTILITY FUND 9,681,440 582,617 833,537 8,847,903 90 423 SEWER/WWTP UTILITY FUND 29,512,501 1,213,019 1,545,617 27,966,884 5" 424 BOND RESERVE FUND 1,988,710 - - 1,988,710 04 511 EQUIPMENT RENTAL FUND 1,942,460 194,816 257,364 1,685,096 130 512 TECHNOLOGY RENTAL FUND 1,539,022 168,294 287,295 1,251,727 190 617 FIREMEN'S PENSION FUND - 16,682 - - 00, S 144,446,560 $ 11,360,819 $ 13,700,513 S 130,746,047 90, 20 Packet Pg. 52 I 2.4.a I Page 1 of 3 Title TAXES: 1 REAL PERSONAL / PROPERTY TAX 2 EMS PROPERTY TAX 3 VOTED PROPERTY TAX 4 LOCAL RETAIL SALESIUSE TAX 4 5 NATURAL GAS USE TAX 6 1/10 SALES TAX LOCAL CRIM JUST 7 ELECTRIC UTILITY TAX 8 GAS UTILITY TAX 9 SOLID WASTE UTILITY TAX 10 WATERUTILITY TAX 11 SEWER UTILITY TAX 12 ST ORMWAT ER UT ILIT Y T AX 13 T.V. CABLE UTILITY TAX 14 TELEPHONE UTILITY TAX 15 PULLTABSTAX 16 AMUSEMENT GAMES 17 LEASEHOLD EXCISE TAX LICENSES AND PERMITS: 18 FIRE PERMITS -SPECIAL USE 19 POLICE - FINGERPRINTING 20 VENDING MACHINE/CONCESSION 21 FRANCHISE AGREEMENT -COMCAST 22 FRANCHISE FEE-EDUCATION/GOVERNMENT 23 FRANCHISE AGREEMENT-ZIPLY FIBER 24 OLYMPIC VIEW WATER DISTRICT FRANCHISE 25 GENERAL BUSINESS LICENSE 26 DEV SERV PERMIT SURCHARGE 27 RIGHT OF WAY FRANCHISE FEE 28 BUILDING STRUCTURE PERMITS 29 ANIMAL LICENSES 30 STREET AND CURB PERMIT 31 OT R NON -BUS LIC/PERMIT S INTERGOVERNMENTAL: 32 DOJ 15-0404-0-1-754 - BULLET PROOF VEST 33 HIGH VISIBILITY ENFORCEMENT 34 CORONAVIRUS RELIEF FUND 2 35 DOC FAC ROOFING 36 STATE GRANTS- BUDGET ONLY 37 PUD PRIVILEDGE TAX 38 CJ - POPULATION 39 TRIAL COURT IMPROVEMENT 40 CRIMINAL JUSTICE -SPECIAL PROGRAMS 41 MARIJUANA EXCISE TAX DISTRIBUTION 42 DUI - CITIES 43 LIQUOR EXCISE TAX 44 LIQUOR BOARD PROFITS 45 FIRST RESPONDERS FLEX FUND 46 DISCOVERY PROGRAMS TECHNOLOGY ACQ. C ITY O F IDMO NDS REVENUES - GENERAL FUND 2022 Amended 2/28/2021 Budget Revenues 2/28/2022 Amount Revenues Remaining %Received $ 11,127,000 $ 125,743 $ 95,781 $ 11,031,219 10r 4,278,000 49,084 37,762 4,240,238 10/ 500 1 27 473 501 10,000,000 1,647,058 1,853,000 8,147,000 190/ 7,600 904 3,599 4,001 470/ 870,000 157,476 178,710 691,290 210/ 1,410,000 367,328 377,116 1,032,884 270r 595,000 172,999 96,596 498,404 160/ 284,000 59,636 48,316 235,684 170r 953,000 137,637 138,271 814,729 1501 894,600 148,232 160,357 734,244 180/ 471,900 120,531 132,287 339,613 280i 792,000 128,053 133,791 658,209 170/ 523,000 85,370 66,255 456,745 130r 55,200 23,251 18,591 36,609 340/ 350 143 - 350 00/ 306,000 75,813 72,345 233,655 240/ 32,568,150 3,299,257 3,412,804 29,155,346 10°i 250 100 50 200 20°/ 700 - 20 680 30r 40,000 5,764 14,505 25,495 360/ 702,700 170,449 179,444 523,256 260/ 41,000 6,441 3,060 37,940 70/ 100,600 15,635 12,550 88,050 120/ 384,000 80,860 84,298 299,702 220/ 250,000 41,146 40,738 209,263 160/ 63,000 13,845 15,575 47,425 250/ 30,000 14,440 30,173 (173) 1010/ 650,600 87,212 77,263 573,337 120/ 24,000 4,017 6,357 17,643 260i 55,000 7,970 (1,806) 56,806 -30/ 20,000 2,151 2,388 17,612 120r 2,361,850 450,028 464,614 1,897,236 200, 9,000 2,671 5,237 3,763 580/ 11,100 417 718 10,382 60/ - 3,947 - - 00/ - 379,270 - - 00/ 273,000 - - 273,000 00/ 210,500 - - 210,500 00/ 13,070 3,379 3,571 9,499 270/ 16,740 4,035 - 16,740 00/ 45,600 12,061 12,693 32,907 280/ 60,000 - - 60,000 00/ 4,500 1,667 1,793 2,707 400/ 261,500 68,016 72,230 189,270 280r 343,200 - - 343,200 00/ 1,000 - - 1,000 00/ 550 - - 550 00/ 1,249,760 475,464 96,243 1,153,517 80, 4 2022 Local Retail Sales/Use Tax revenues are $205,942 higher than 2021 revenues. Please also see pagespages 5 & 6. 21 1 Packet Pg. 53 1 2.4.a Page 2 of 3 C ITY O F IDMO NDS REVENUES - GENERAL FUND 2022 Amended 2/28/2021 2/28/2022 Amount Title Budget Revenues Revenues Remaining %Received CHARGES FOR GOODS AND SERVICES: 1 RECORD/LEGAL INSTRUMENTS 2 ATM SURCHARGE FEES 3 CREDIT CARD FEES 4 COURT RECORD SERVICES 5 D/M COURT REC SER 6 DRE REIMBURSEABLE 7 WARRANT PREPARATION FEE 8 IT TIME PAY FEE 9 MUNIC.-DIST. COURT CURR EXPEN 10 SALE MAPS & BOOKS 11 CLERKS TIME FOR SALE OF PARKING PERMITS 12 BID SUPPLIES REIMBURSEMENT 13 PHOTOCOPIES 14 POLICE DISCLOSURE REQUESTS 15 ENGINEERING FEES AND CHARGES 16 ELECTION CANDIDATE FILINGFEES 17 CUSTODIAL SERVICES (SNO-ISLE) 18 PASSPORTS AND NATURALIZATION FEES 19 POLICE SERVICES SPECIAL EVENTS 20 CAMPUS SAFETY-EDM. SCH. DIST. 21 WOODWAY-LAW PROTECTION 22 MISCELLANEOUS POLICE SERVICES 23 FIRE DISTRICT #1 STATION BILLINGS 24 LEGAL SERVICES 25 ADULT PROBATION SERVICE CHARGE 26 BOOKING FEES 27 FIRE CONSTRUCTION INSPECTION FEES 28 EMERGENCY SERVICE FEES 29 EMS TRANSPORT USER FEE 30 FLEX FUEL PAYMENTSFROMSI'ATIONS 31 ANIMAL CONTROL SHELTER 32 ZONING/SUBDIVISION FEE 33 PLAN CHECKING FEES 34 FIRE PLAN CHECK FEES 35 PLANNING 1% INSPECTION FEE 36 S.E.P.A. REVIEW 37 CRITICAL AREA STUDY 38 GYM AND WEIGHTROOM FEES 39 PROGRAM FEES 40 TAXABLE RECREATION ACTIVITIES 41 HOLIDAY MARKET REGISTRATION FEES 42 WINTERMARKET FEES 43 BIRD FEST REGISTRATION FEES 44 INTERFUND REIMBURSEMENT -CONTRACT SVCS $ 3,000 $ 632 $ 1,266 $ 1,734 420r 600 18 32 568 50i 11,000 963 360 10,640 30/ 150 - - 150 00/ 300 - - 300 00/ - 168 - - 00/ 4,000 - - 4,000 00/ 1,000 74 34 966 30/ 50 33 21 29 410r 100 - - 100 00/ 25,000 - - 25,000 00/ 600 - - 600 00/ 1,000 57 943 60/ 5,000 - - 5,000 00/ 180,000 36,966 46,655 133,345 260/ 1,400 - 2,885 (1,485) 2060/ 85,000 16,470 23,810 61,190 280/ 10,000 - 805 9,195 80/ 30,000 - - 30,000 00/ 14,000 - - 14,000 00/ 210,970 51,206 - 210,970 00/ - - 13 (13) 00/ 57,000 14,616 15,373 41,627 270/ 1,050 33 26 1,024 20/ 38,000 5,730 3,165 34,835 80/ 3,000 125 39 2,961 10/ 10,000 2,618 5,837 4,163 580r 3,500 763 100 3,400 30/ 1,007,500 201,222 238,403 769,097 240i 2,500 520 600 1,900 240/ 100 - - 100 00/ 65,600 17,275 20,885 44,715 320/ 425,000 142,787 37,202 387,798 90/ 4,000 1,209 2,561 1,439 640/ 500 - 110 390 220/ 3,000 - 740 2,260 250/ 14,000 1,485 3,885 10,115 280/ 13,000 - 16 12,984 00/ 1,011,580 12,135 6,406 1,005,174 10/ 1,300 - - 1,300 00/ 5,000 185 - 5,000 00/ - - 6,080 (6,080) 00/ 1,000 - - 1,000 00/ 4,011,558 202,383 196,414 3,815,144 501 7,261,358 709,617 613,778 6,647,580 80, 22 Packet Pg. 54 2.4.a Page 3 of 3 C ITY O F EDMO NDS REVENUES - GENERAL FUND 2022 Amended 2/28/2021 2/28/2022 Amount Title Budget Revenues Revenues Remaining %Received FINES AND PENALTIES: 1 PROOF OF VEHICLE INS PENALTY 2 TRAFFIC INFRACTION PENALTIES 3 NC TRAFFIC INFRACTION 4 CRT COST FEE CODE LEG ASSESSMENT (LGA) 5 NON -TRAFFIC INFRACTION PENALTIES 6 OTHER INFRACTIONS'04 7 PARKING INFRACTION PENALTIES 8 PARK/INDDISZONE 9 DWI PENALTIES 10 DUI - DP ACCT 11 CRIM CNV FEE DUI 12 DUI - DP FEE 13 CRIMINAL TRAFFIC MISDEMEANOR 8/03 14 CRIMINAL CONVICTION FEE CT 15 CRIM CONV FEE CT 16 OTHER NON-T RAF MISDEMEANOR PEN 17 OTHER NON TRAFFIC MISD. 8/03 18 COURT DV PENALTY ASSESSMENT 19 CRIMINAL CONVICTION FEE CN 20 CRIM CONV FEE CN 21 PUBLIC DEFENSE RECOUPMENT 22 BANK CHARGE FOR CONV. DEFENDANT 23 COURT COST RECOUPMENT 24 BUS. LICENSE PERMIT PENALTY 25 MISC FINES AND PENALTIES NIIS C ELLANEO US : 26 INVESTMENT INTEREST 27 INTEREST ON COUNTY TAXES 28 INTEREST - COURT COLLECTIONS 29 SPACE/FACILITIESRENTALS 30 BRACKET ROOM RENTAL 31 LEASES LONG TERM 32 DONATION/CONTRIBUTION 33 PARKSDONATIONS 34 BIRD FEST CONTRIBUTIONS 35 POLICE CONTRIBUTIONS FROM PRIV SOURCES 36 SALE OF JUNK/SALVAGE 37 SALES OF UNCLAIM PROPERTY 38 CONFISCATED AND FORFEITED PROPERTY 39 OTHER JUDGEMENT/SETTLEMENT 40 POLICE JUDGMENTS✓RESTITUTION 41 CASHIERS OVERAGES✓SHORTAGES 42 OTHER MISC REVENUES 43 SMALL OVERPAYMENT 44 NSF FEES - PARKS & REC 45 NSF FEES - MUNICIPAL COURT 46 NSF FEES - DEVEL SERV DEPT 47 US BANK REBATE TRANSFERS -IN: 48 TRANSFER FROM FUND 127 TOTAL GENERAL FUND REVENUE $ 2,000 $ 514 $ 248 $ 1,752 120/ 230,000 32,192 10,394 219,606 501 18,000 1,699 676 17,324 40/ 10,000 2,638 638 9,362 60/ 1,000 - - 1,000 00/ 1,500 306 171 1,329 110/ 100,000 9,724 3,428 96,572 30/ 2,000 - 44 1,956 20/ 7,000 1,330 415 6,585 60/ 300 16 - 300 00/ 100 35 4 96 40/ 1,500 308 252 1,248 170i 25,000 2,349 1,032 23,968 40/ 2,000 254 268 1,732 130/ 700 13 - 700 00/ 100 12 - 100 00/ 10,000 298 352 9,648 40/ 800 - 12 788 20/ 1,000 5 52 948 501 200 7 - 200 00/ 8,000 545 373 7,627 501 14,000 1,594 536 13,464 40/ 3,000 469 49 2,951 20/ 10,100 - - 10,100 00/ 150 - - 150 00/ 448,450 54,309 18,945 429,505 4°i 270,390 64,006 63,353 207,037 230/ 13,340 1,488 715 12,625 501 10,180 1,418 877 9,303 90/ 153,000 (423) 2,973 150,028 20/ 2,100 - - 2,100 00/ 205,000 32,293 34,379 170,621 170/ 2,500 - 76 2,424 30/ 3,500 - 300 3,200 90/ 1,500 - - 1,500 00/ 5,000 - - 5,000 00/ 300 - - 300 00/ 3,800 468 324 3,476 90/ 2,000 - - 2,000 00/ 2,000 - - 2,000 00/ 200 10 10 190 501 - 2 14 (14) 00/ 41,180 1,304 758 40,422 20/ 100 8 13 87 130/ 100 30 - 100 00/ 150 - - 150 00/ - - - - 00/ 8,500 - - 8,500 00/ 724,840 100,603 103,792 621,048 140, 26,300 - - 26,300 00/ 26,300 - - 265300 00/ $ 44,640,708 $ 5,089,278 $ 4,710,176 $39,930,532 110/ 23 Packet Pg. 55 I 2.4.a I Page 1 of 6 CITY OF EDMO NDS EXPENDITURES BY FUND - DETAIL 2022 Amended 2/28/2021 2/28/2022 Amount Title Budget Expenditures Expenditures Remaining %Spent GENERAL FUND EXPENDITURES (001) I SALARIES AND WAGES $ 19,196,413 $ 2,808,687 $ 2,841,391 $ 16,355,022 150 2 OVERTIME 594,080 96,367 201,343 392,737 340 3 HOLIDAY BUY BACK 294,001 1,951 6,187 287,814 24 4 BENEFITS 6,820,049 1,063,517 1,072,560 5,747,489 164 5 UNIFORMS 119,151 11,822 6,880 112,271 69 6 PENSION AND DISABILITY PAYMENTS 70,944 - 11,825 59,119 170 7 SUPPLIES 481,165 59,823 45,215 435,950 94 8 SMALL EQUIPMENT 204,019 9,766 15,804 188,216 M 9 PROFESSIONAL SERVICES 15,274,828 2,556,380 2,653,970 12,620,858 170 10 COMMUNICATIONS 171,235 20,147 14,441 156,794 M 11 TRAVEL 81,155 - 3,217 77,938 44 12 EXCISE TAXES 16,500 2,544 2,993 13,507 180 13 RENTAL/LEASE 2,091,693 255,532 338,100 1,753,593 160 14INSURANCE 375,539 405,121 503,160 (127,621) 1344 15 UTILITIES 529,462 60,817 90,751 438,711 174 16 REPAIRS & MAINTENANCE 364,850 104,472 144,268 220,582 400 17 MISCELLANEOUS 652,023 130,071 131,953 520,070 200 18 INTERGOVERNMENTAL PAYMENTS 50,000 50,000 50,000 - 10M 19 INTERFUND SUBSIDIES 1,385,000 - - 1,385,000 M 20 MACHINERY/EQUIPMENT - - - - M 21 CONSTRUCTION PROJECTS 270,180 - - 270,180 M 22 GENERAL OBLIGATION BOND PRINCIPAL 55,170 - - 55,170 04 23 INTEREST ON LONG-TERM EXTERNAL DEBT 4,790 - - 4,790 M 24 DEBT ISSUE COSTS 268,788 - - 268,788 04 25 OTHER INTEREST & DEBT SERVICE COSTS 500 - - 500 M 49,371,535 7,637,016 8,134,057 41,237,478 16" LEO FF-MEDIC AL INS. RESERVE (009) 26 BENEFITS $ - $ 32,702 $ 35,907 $ (35,907) 04 27 PENSION AND DISABILITY PAYMENTS 252,990 22,575 17,442 235,548 74 28 PROFESSIONAL SERVICES 7,000 - - 7,000 M 29 MISCELLANEOUS 500 - - 500 04 260,490 S 55,277 53,349 207,141 20° HISTORIC PRESERVATION GIFT FUND (014) 30 SUPPLIES $ 100 $ $ - $ 100 0° 31 PROFESSIONAL SERVICES 200 200 09 32 MISCELLANEOUS 5,600 5,600 0° 5,900 5,900 04 BUILDING MAINTENANCE FUND (016) 33 PROFESSIONAL SERVICES $ 115,000 $ $ - $ 115,000 09 34 REPAIR & MAINTENANCE 665,000 - 665,000 04 35 MACHINERY/EQUIPMENT 90,000 - 90,000 M 36 CONSTRUCTION PROJECTS 110,000 - - 110,000 04 980,000 - - 980,000 M EDMONDS HOMELESSNESS RESPONSEFUND (018) 37 PROFESSIONAL SERVICES $ 200,000 $ - $ - $ 200,000 0° 200,000 - - 200,000 0° DRUG ENFO RC EMENT FUND (104) 38 PROFESSIONAL SERVICES $ 45,000 $ $ - $ 45,000 0° 39 REPAIR/MAINT 800 800 0° 45,800 $ 45,800 0° O CL O io C to C IL s C O z N N O N O 7 L N LL 24 Packet Pg. 56 I 2.4.a I Page 2 of 6 CITY OF EDMO NDS EXPENDITURES BY FUND - DETAIL 2022 Amended 2/28/2021 2/28/2022 Amount Title Budget Expenditures Expenditures Remaining %Spent STREETFUND (111) 1 SALARIES AND WAGES $ 749,110 $ 124,506 $ 113,792 $ 635,318 154 2 OVERTIME 38,400 12,118 5,910 32,490 15° 3 BENEFITS 347,919 61,385 57,737 290,182 170 4 UNIFORMS 6,000 3,602 1,345 4,655 224 5 SUPPLIES 263,000 4,155 10,551 252,449 44 6 SMALL EQUIPMENT 20,000 - 587 19,413 39 7 PROFESSIONAL SERVICES 23,210 3,525 4,389 18,821 190 8 COMMUNICATIONS 4,500 699 672 3,828 154 9 TRAVEL 1,000 - - 1,000 04 10 RENTAL/LEASE 290,150 40,935 48,091 242,059 174 11 INSURANCE 123,007 148,533 184,111 (61,104) 15W 12 UTILITIES 273,730 28,616 23,446 250,284 90 13 REPAIRS & MAINTENANCE 72,000 - 2,318 69,682 M 14 MISCELLANEOUS 8,000 6,721 1,389 6,611 174 15 MACHINERY/EQUIPMENT 30,000 - - 30,000 W 16 GENERAL OBLIGATION BOND PRINCIPAL 4,270 - - 4,270 W 17 INTEREST 380 - 380 0° $ 2,254,676 $ 434,795 $ 454,338 $ 1,800,338 2W COMBINED STREETCONST/IMPROVE(112) 18 PROFESSIONAL SERVICES $ 3,159,560 $ 35,024 $ 42,490 $ 3,117,070 11 19 REPAIR&MAINTENANCE 1,508,270 - - 1,508,270 04 20 INTERFUND SUBSIDIES 108,975 - - 108,975 W 21 LAND - - 27,176 (27,176) 04 22 CONSTRUCTION PROJECTS 8,018,521 - - 8,018,521 09 23 INTERGOVERNMENTAL LOANS 72,220 - 72,220 04 24 INTEREST 1,250 - - 1,250 M $ 12,868,796 $ 35,024 $ 69,666 $ 12,799,130 19 MUNICIPAL ARTS ACQUIS. FUND (117) 25 SUPPLIES $ 4,700 $ 217 $ - $ 4,700 W 26 SMALL EQUIPMENT 1,700 - - 1,700 W 27 PROFESSIONAL SERVICES 180,000 5,312 1,100 178,900 14 28 TRAVEL 80 - - 80 W 29 RENTAL/LEASE 2,000 2,000 W 30 REPAIRS & MAINTENANCE 300 - - 300 M 31 MISCELLANEOUS 6,600 612 1,025 5,575 164 $ 195,380 $ 6,141 $ 2,125 $ 193,255 14 HO TEL/MO TEL TAX REVENUE FUND (120) 32 PROFESSIONAL SERVICES $ 95,900 $ 7,278 $ 5,703 $ 90,197 64 33 MISCELLANEOUS 1,000 - - 1,000 W 34 INTERFUND SUBSIDIES 4,000 - - 4,000 W $ 100,900 $ 7,278 $ 5,703 $ 95,197 64 EMPLO YEE PARKING PERMIT FUND (121) 35 SUPPLIES $ 1,790 $ - $ - $ 1,790 W 36 PROFESSIONAL SERVICES 25,090 - 25,090 W $ 26,880 $ - $ - $ 26,880 0° YOUTH SCHOLARSHIP FUND (122) 37 MISCELLANEOUS $ 3,000 $ - $ (150) $ 3,150 -54 $ 3,000 $ $ (150) $ 3,150 -5° TOURISM PROMOTIONAL FUND/ARTS (123 ) 38 PROFESSIONAL SERVICES $ 28,200 $ - $ - $ 28,200 W $ 28,200 $ - $ - $ 28,200 0° F O CL O io C tv C IL s c O a N N 0 N M 7 L N LL 25 Packet Pg. 57 I 2.4.a I Page 3 of 6 CITY OF EDMO NDS EXPENDITURES BY FUND - DETAIL 2022 Amended 2/28/2021 2/28/2022 Amount Title Budget Expenditures Expenditures Remaining %Spent REAL ESTATE EXC ISE TAX 2 (125) 1 SUPPLIES $ 21,000 $ 6,956 $ 3,050 $ 17,950 150 2 PROFESSIONAL SERVICES 469,320 - 15,539 453,781 39 3 REPAIRS&MAINTENANCE 668,258 4,501 56,168 612,090 M 4 INTERFUND SUBSIDIES 2,534 - - 2,534 09 5 CONSTRUCTION PROJECTS 3,428,576 - 69,759 3,358,817 24 $ 4,589,688 $ 11,457 $ 144,516 $ 4,445,172 34 REAL ESTATE EXCISE TAXI (126) 6 PROFESSIONAL SERVICES 7 REPAIRS & MAINTENANCE 8 INTERFUND SUBSIDIES 9 CONSTRUCTION PROJECTS 10 GENERAL OBLIGATION BONDS 11 INTEREST GWIS CATALOG FUND (127) 12 SUPPLIES 13 PROFESSIONAL SERVICES 14 MISCELLANEOUS 15 INTERFUND SUBSIDIES CEVIEIIItYMAINTENANCUI PROVEMENT(130) 16 SALARIES AND WAGES 17 OVERTIME 18 BENEFIT S 19 UNIFORMS 20 SUPPLIES 21 SUPPLIES PURCHASED FOR INVENTORY/RESALE 22 PROFESSIONAL SERVICES 23 COMMUNICATIONS 24 TRAVEL 25 RENTAL/LEASE 26 UTILITIES 27 REPAIRS & MAINTENANCE 28 MISCELLANEOUS PARKS TIRUSTFUND (136) 29 PROFESSIONAL SERVICES CEMETERY MAINTENANCE TRUST FUND (137) 30 SMALL EQUIPMENT SISTER CITY COMMISSION (138) 31 SUPPLIES 32 TRAVEL 33 MISCELLANEOUS BUSINESS IMPROVEMENT DISTRICT FUND (140) 34 SUPPLIES 35 PROFESSIONAL SERVICES 36 MISCELLANEOUS EDMONDS RESCUEPLAN FUND (142) 37 PROFESSIONAL SERVICES TREE FUND (143) 38 SUPPLIES 39 PROFESSIONAL SERVICES 40 LAND 2012 LTGO DEBT SERVIC FUND (231) 41 GENERAL OBLIGATION BOND 42 INTEREST $ 673,827 $ 18,817 $ 17,410 $ 656,417 M 878,353 14,138 13,266 865,087 2" 144,970 - - 144,970 09 526,057 72,339 - 526,057 M 149,820 - - 149,820 04 110,640 - - 110,640 09 $ 2,483,667 $ 105,293 $ 30,676 $ 2,452,991 14 $ 45,000 $ - $ 2,114 $ 42,886 59 6,500 - - 6,500 04 600 - - 600 04 26,300 - - 26,300 04 $ 78,400 $ - $ 2,114 $ 76,286 T $ 119,837 $ 14,060 $ 14,060 $ 105,777 120 3,500 30 210 3,290 6° 41,069 6,248 6,168 34,901 150 1,000 - - 1,000 00 7,000 - 45 6,955 I4 20,000 1,638 3,690 16,310 1M 4,200 800 800 3,400 190 1,700 281 284 1,416 174 500 - - 500 0° 11,690 2,775 1,948 9,742 170 5,565 272 267 5,298 54 500 - - 500 04 4,000 2,567 3,868 132 970 $ 220,561 $ 28,671 $ 31,341 $ 189,220 144 $ 50,000 $ - $ - $ 50,000 04 $ 50,000 $ - $ - $ 50,000 M $ 25,000 $ - $ - $ 25,000 09 $ 25,000 $ - $ - $ 25,000 09 $ 1,500 $ - $ - $ 1,500 04 4,500 - - 4,500 M 5,900 - - 5,900 04 $ 11,900 $ - $ - $ 11,900 00 $ 4,050 $ 273 $ 94 $ 3,956 24 77,535 4,254 5,719 71,816 79 6,095 73 73 6,022 1° 87,680 4,600 5,885 81,795 74 $ 5,977,492 $ - $ 114,190 $ 5,863,302 24 5,977,492 - 114,190 5,863,302 2° $ 1,000 $ - $ - $ 1,000 M 14,800 - - 14,800 04 199,000 - - 199,000 00 214,800 - - 214,800 04 $ 550,000 $ - $ - $ 550,000 00 61,370 - - 61,370 M $ 611,370 $ - $ - $ 611,370 0° O CL io C ca C IL s C O .01 N O N M 7 L N LL 26 Packet Pg. 58 I 2.4.a I Page 4 of 6 CITY OF EDMO NDS EXPENDITURES BY FUND - DETAIL 2022 Amended 2/28/2021 2/28/2022 Amount Title Budget Expenditures Expenditures Remaining %Spent PARKS CONSTRUCTION FUND (332) 1 PROFESSIONAL SERVICES $ 95,832 $ 359 $ 58,258 $ 37,574 614 2 INTERFUND SUBSIDIES 63,000 - 62,656 344 999 3 CONSTRUCTION PROJECTS 7,357,188 66,774 713,452 6,643,736 109 4 DEBT ISSUE COSTS 98,398 - - 98,398 09 $ 7,614,418 $ 67,133 $ 834,366 $ 6,780,052 110 WATER FUND (421) 5 SALARIES AND WAGES 6 OVERTIME 7 BENEFIT S 8 UNIFORMS 9 SUPPLIES 10 WATER PURCHASED FOR RESALE 11 SUPPLIES PURCHASED FOR INVENTORY/RESALE 12 SMALL EQUIPMENT 13 PROFESSIONAL SERVICES 14 COMMUNICATIONS 15 TRAVEL 16 EXCISE TAXES 17 RENTAL/LEASE 18 INSURANCE 19 UTILITIES 20 REPAIRS & MAINTENANCE 21 MISCELLANEOUS 22 INTERFUND SUBSIDIES 23 MACHINERY/EQUIPMENT 24 CONSTRUCTION PROJECTS 25 GENERAL OBLIGATION BONDS 26 REVENUE BONDS 27 INTERGOVERNMENTAL LOANS 28 INTEREST STORM FUND (422) 29 SALARIES AND WAGES 30 OVERTIME 31 BENEFIT S 32 UNIFORMS 33 SUPPLIES 34 SMALL EQUIPMENT 35 PROFESSIONAL SERVICES 36 COMMUNICATIONS 37 TRAVEL 38 EXCISE TAXES 39 RENTALILEASE 40INSURANCE 41 UTILITES 42 REPAIR & MAINTENANCE 43 MISCELLANEOUS 44 INTERFUND SUBSIDIES 45 CONSTRUCTION PROJECTS 46 GENERAL OBLIGATION BONDS 47 REVENUE BONDS 48 INTERGOVERNMENTAL LOANS 49 INTEREST $ 842,096 $ 112,836 $ 120,241 $ 721,855 149 24,000 3,083 3,264 20,736 149 330,100 47,134 51,867 278,233 169 4,000 355 686 3,314 179 150,000 5,499 20,467 129,533 149 2,170,000 123,474 149,684 2,020,317 79 170,000 18,365 23,934 146,066 149 11,000 - 587 10,413 59 2,237,439 96,002 49,681 2,187,758 29 30,000 1,927 3,939 26,061 139 200 - - 200 09 1,649,700 211,492 213,695 1,436,005 139 152,590 20,901 25,598 126,992 179 107,265 98,196 122,359 (15,094) 1149 35,000 4,179 5,346 29,654 159 176,130 11,030 11,535 164,595 79 123,600 38,233 49,045 74,555 409 645,370 - - 645,370 09 10,000 - - 10,000 09 1,998,334 - 42,594 1,955,740 29 2,870 - - 2,870 M 399,780 - - 399,780 09 25,840 - - 25,840 09 180,580 - - 180,580 09 $ 11,475,894 $ 792,707 $ 894,523 $ 10,581,371 M $ 734,284 $ 124,593 $ 125,774 $ 608,510 179 26,000 10,242 4,759 21,241 1M 294,767 54,656 53,780 240,987 189 6,500 1,689 2,403 4,097 379 46,000 7,044 18,484 27,516 409 4,000 304 587 3,413 159 3,481,263 72,289 86,715 3,394,548 29 3,200 491 534 2,666 170 4,300 - - 4,300 09 470,100 131,822 144,632 325,468 319 267,150 44,467 44,446 222,704 179 144,126 66,228 82,335 61,791 579 10,500 2,105 2,524 7,976 249 67,130 10,963 11,040 56,090 169 232,300 55,723 61,461 170,839 269 297,787 - - 297,787 09 3,137,333 - 194,065 2,943,268 69 104,540 - - 104,540 09 195,390 - - 195,390 09 53,590 - - 53,590 09 101,180 - - 101,180 09 $ 9,681,440 $ 582,617 $ 833,537 $ 8,847,903 99 F O CL io C M C IL s c O N N 0 N M 7 L N LL 2% Packet Pg. 59 I 2.4.a I Page 5 of 6 CITY OF EDMO NDS EXPENDITURES BY FUND - DETAIL 2022 Amended 2/28/2021 2/28/2022 Amount Title Budget Expenditures Expenditures Remaining %Spent SEWER FUND (423) 1 SALARIES AND WAGES $ 2,090,461 $ 299,000 $ 312,259 $ 1,778,202 15° 2 OVERTIME 95,000 21,540 31,456 63,544 3M 3 BENEFITS 847,408 128,681 124,674 722,734 154 4 UNIFORMS 9,500 3,244 3,339 6,161 354 5 SUPPLIES 421,000 50,738 29,952 391,048 74 6 FUEL CONSUMED 60,000 12,235 - 60,000 M 7 SUPPLIES PURCHASED FOR INV OR RESALE 4,000 - - 4,000 M 8 SMALL EQUIPMENT 35,000 1,566 85,279 (50,279) 2440 9 PROFESSIONAL SERVICES 2,315,884 191,351 203,876 2,112,008 94 10 COMMUNICATIONS 43,000 2,868 7,286 35,714 170 11 TRAVEL 5,000 - - 5,000 09 12 EXCISE TAXES 978,000 181,313 198,449 779,551 2M 13 RENTAL/LEASE 317,410 54,548 52,715 264,695 17 14 INSURANCE 185,052 162,851 203,936 (18,884) 11M 15 UTILITIES 1,532,060 43,515 142,051 1,390,009 9° 16 REPAIR & MAINTENANCE 790,630 38,368 126,645 663,985 164 17 MISCELLANEOUS 126,350 19,683 23,700 102,650 194 18 INTERFUND SUBSIDIES 6,388,519 - - 6,388,519 M 19 CONSTRUCTION PROJECTS 12,520,297 - - 12,520,297 M 20 GENERAL OBLIGATION BONDS 126,500 - - 126,500 M 21 REVENUE BONDS 89,840 - - 89,840 M 22 INTERGOVERNMENTAL LOANS 174,610 - - 174,610 M 23 INTEREST 356,980 - - 356,980 M 24 DEBT ISSUE COSTS - 1,518 - - M $ 29,512,501 $ 1,213,019 $ 1,545,617 $ 27,966,884 54 BOND RESERVE FUND (424) 25 REVENUE BONDS $ 810,010 $ - $ - $ 810,010 04 26 INTEREST 1,178,700 - - 1,178,700 M $ 1,988,710 $ - $ - $ 1,988,710 v F O CL O io C to C M 21 s r C O M N N 0 N M 7 N LL 28 Packet Pg. 60 I 2.4.a I Page 6 of 6 CITY OF EDMO NDS EXPENDITURES BY FUND - DETAIL 2022 Amended 2/28/2021 2/28/2022 Amount Title Budget Expenditures Expenditures Remaining %Spent EQUIPMENT RENTAL FUND (511) 1 SALARIES AND WAGES $ 275,712 $ 45,834 $ 47,129 $ 228,583 179 2 OVERTIME 2,000 1,573 222 1,778 ii9 3 BENEFITS 112,077 19,335 19,100 92,977 179 4 UNIFORMS 1,500 605 646 854 4M 5 SUPPLIES 120,000 9,513 40,039 79,961 3M 6 FUEL CONSUMED 1,000 - - 1,000 09 7 SUPPLIES PURCHASED FOR INVENTORY/RESALE 268,000 13,497 81,457 186,543 309 8 SMALL EQUIPMENT 58,000 4,749 1,924 56,076 39 9 PROFESSIONAL SERVICES 46,750 194 223 46,527 09 10 COMMUNICATIONS 3,000 304 309 2,691 109 11 TRAVEL 1,000 - - 1,000 09 12 RENTAL/LEASE 11,160 2,070 1,728 9,432 159 13 INSURANCE 41,261 39,334 51,903 (10,642) 1269 14 UTILITIES 14,000 2,526 3,276 10,724 2M 15 REPAIRS & MAINTENANCE 60,000 3,886 2,002 57,998 39 16 MISCELLANEOUS 12,000 1,588 1,396 10,604 129 17 MACHINERY/EQUIPMENT 915,000 49,807 6,008 908,992 19 $ 1,942,460 $ 194,816 $ 257,364 $ 1,685,096 139 TECHNOLOGY RENTAL FUND (512) 18 SALARIES AND WAGES $ 442,074 $ 51,188 $ 43,726 $ 398,348 109 19 OVERTIME 2,000 303 - 2,000 09 20 BENEFITS 159,538 17,364 18,703 140,835 129 21 SUPPLIES 5,000 1,605 1,750 3,250 359 22 SMALL EQUIPMENT 357,900 2,320 8,341 349,559 29 23 PROFESSIONAL SERVICES 61,860 2,478 2,472 59,388 49 24 COMMUNICATIONS 58,770 8,690 7,807 50,963 1M 25 TRAVEL 1,500 - - 1,500 09 26 RENTAL/LEASE 7,460 733 743 6,717 109 27 REPAIRS & MAINT ENANCE 381,920 83,525 203,737 178,183 5M 28 MISCELLANEOUS 5,000 88 16 4,984 09 29 MACHINERY/EQUIPMENT 56,000 - - 56,000 09 $ 1,539,022 $ 168,294 $ 287,295 $ 1,251,727 199 FIREMAN'S PENSION FUND (617) 30 BENEFITS $ - $ 6,428 $ - $ - 09 31 PENSION AND DISABILITY PAYMENTS 10,254 09 $ - $ 16,682 $ - S - 09 TOTAL EXPENDITURE ALL FUNDS $ 144,446,560 $ 11,360,819 $ 13,700,513 S 130,746,047 99 O CL O io C M C LL z C O M N N O N M 7 L N LL 29 Packet Pg. 61 2.4.a Page 1 of 1 C ITY O F IDMO NDS EXPENDITURES - GENERAL FUND - BY DEPARTMENT IN SUMMARY 2022 Amended 2/28/2021 2/28/2022 Amount Title Budget Expenditures Expenditures Remaining %Spent CITY COUNCIL OFFICE OF MAYOR HUMAN RESOURCES MUNICIPAL COURT CITY CLERK ADMINISTRATIVE SERVICES CITY ATTORNEY NON -DEPARTMENTAL POLICE SERVICES SATELLITE OFFICE COMMUNITY SERVICES✓ECONOMIC DEV DEVELOPMENT SERVICES HUMAN SERVICES PROGRAM PARKS & RECREATION PUBLIC WORKS FACILITIES MAINTENANCE $ 497,900 $ 53,681 $ 43,670 $ 454,230 9% 443,913 55,740 59,226 384,687 13% 824,831 132,066 135,524 689,307 16% 1,368,755 183,450 187,919 1,180,836 14% _ - 139,396 - - 0% 0 CL 2,034,511 226,074 380,532 1,653,979 19% lY 971,780 142,526 155,234 816,546 16% .70 13,877,484 2,845,113 2,938,380 10,939,104 21% M C 13,375,470 1,856,572 1,945,020 11,430,450 15% LL 166,576 - 8,348 158,228 5% C 719,388 85,831 72,230 647,158 10% 0 3,791,859 448,394 661,303 3,130,556 17% N 459,109 - 21,465 437,644 5% O N M 5,081,735 655,977 651,988 4,429,747 13% 3,459,449 517,863 503,819 2,955,630 15% si 2,298,775 294,332 369,398 1,929,377 16% N $ 49,371,535 $ 7,637,016 $ 8,134,057 $ 41,237,478 16% O C ITY OF EDMO NDS EXPENDITURES - UTILITY- BY FUND IN SUMMARY Title 2022 Amended Budget 2/28/2021 Expenditures 2/28/2022 Expenditures Amount Remaining %Spent WATER UTILITYFUND $ 11,475,894 $ 792,707 $ 894,523 $ 10,581,371 8% STORM UTILITY FUND 9,681,440 582,617 833,537 8,847,903 9% SEWER/WWTP UTILITY FUND 29,512,501 1,213,019 1,545,617 27,966,884 5% BOND RESERVE FUND 1,988,710 - - 1,988,710 0% $ 52,658,545 $ 2,588,343 $ 3,273,677 $ 49,384,868 6% 30 Packet Pg. 62 I 2.4.a I Page 1 of 2 C ITY O F EDMO NDS EXPENDITURES - GENERAL FUND - BY DEPARTMENT IN DETAIL 2022 Amended 2/28/2021 2/28/2022 Amount Title Budget Expenditures Expenditures Remaining %Spent CITY COUNCIL SALARIES AND WAGES BENEFIT S SUPPLIES SERVICES O FFIC E O F MAYO R SALARIES AND WAGES BENEFIT S SUPPLIES SERVICES HUMAN RESOURCES SALARIES AND WAGES BENEFIT S SUPPLIES SERVICES MUNICIPAL C O URT SALARIES AND WAGES BENEFIT S SUPPLIES SERVICES CITY CLERK SALARIES AND WAGES BENEFIT S SUPPLIES SERVICES $ 204,132 $ 32,572 $ 25,901 $ 178,231 13% 121,868 16,707 14,188 107,680 12% 2,000 1,494 163 1,837 8% 169,900 2,907 3,419 166,481 2% $ 497,900 $ 53,681 $ 43,670 $ 454,230 9% $ 232,296 $ 38,249 $ 40,066 $ 192,230 17% 81,787 14,075 14,439 67,348 18% O 1,500 124 1,357 143 90% C 128,330 3,293 3,364 124,966 3% W $ 443,913 $ 55,740 $ 59,226 $ 384,687 13% $ 398,299 $ 65,989 $ 76,448 $ 321,851 19% 142,526 27,556 28,671 113,855 20% 13,600 685 246 13,354 2% LL 270,406 37,836 30,158 240,248 11% s $ 824,831 $ 132,066 $ 135,524 $ 689,307 16% O 04 $ 910,606 $ 124,687 $ 129,827 $ 780,779 14% N 217,654 37,929 36,915 180,739 17% C 11,600 - 1,243 10,357 11% N 228,895 20,835 19,934 208,961 9% $ 1,368,755 $ 183,450 $ 187,919 $ 1,180,836 14% L $ - $ 66,460 $ - $ 0% - 27,520 - 0% v 0 - 403 - 0% O - 45,014 - 0% Q- $ - $ 139,396 $ - $ - 0% ADMINIS TRATIVE S ERVIC ES SALARIES AND WAGES $ 1,301,073 $ 123,623 $ 219,500 $ 1,081,573 17% BENEFITS 413,858 41,692 74,226 339,632 18% SUPPLIES 13,000 1,008 2,259 10,741 17% SERVICES 306,580 59,750 84,547 222,033 28% $ 2,034,511 $ 226,074 $ 380,532 $ 1,653,979 19% CITY ATPO RNEY SERVICES $ 971,780 $ 142,526 $ 155,234 $ 816,546 16% $ 971,780 $ 142,526 $ 155,234 $ 816,546 16% NON -DEPARTMENTAL SALARIES AND WAGES $ 101,750 $ - $ - $ 101,750 0% BENEFITS 145,504 8,868 14,684 130,820 10% SUPPLIES 5,000 7 - 5,000 0% SERVICES 11,860,982 2,786,238 2,873,696 8,987,286 24% INTERFUND SUBSIDIES 1,435,000 50,000 50,000 1,385,000 3% DEBT SERVICE - PRINCIPAL 55,170 - - 55,170 0% DEBT SERVICE - INTEREST 274,078 274,078 0% $ 13,877,484 $ 2,845,113 $ 2,938,380 $ 10,939,104 21% PO LIC E SERVIC ES SALARIES AND WAGES $ 8,723,512 $ 1,246,585 $ 1,289,952 $ 7,433,560 15% BENEFITS 2,994,876 446,844 449,778 2,545,098 15% SUPPLIES 281,569 24,632 14,102 267,467 5% SERVICES 1,375,513 138,511 191,189 1,184,325 14% $ 13,375,470 $ 1,856,572 $ 1,945,020 $ 11,430,450 15% S ATELLITE O FFIC E SALARIES AND WAGES $ 25,000 $ - $ - $ 25,000 0% BENEFIT S 5,000 - 5,000 0% SUPPLIES 12,000 8,019 3,981 67% SERVICES 124,576 329 124,247 0% $ 166,576 $ $ 8,348 $ 158,228 5% 31 Packet Pg. 63 Page 2 of 2 C ITY O F EDMO NDS EXPENDITURES - GENERAL FUND - BY DEPARTMENT IN DETAIL 2022 Amended 2/28/2021 2/28/2022 Amount Title Budget Expenditures Expenditures Remaining %Spent COMMUNITY SERVICES/ECON DEV. SALARIES AND WAGES $ 365,627 $ 53,887 $ 33,357 $ 332,270 9% BENEFITS 111,361 15,227 10,865 100,496 10% SUPPLIES 4,075 41 184 3,891 5% SERVICES 238,325 16,676 27,825 210,500 12% $ 719,388 $ 85,831 $ 72,230 $ 647,158 10% DEVELO PMEVT S ERVIC ES /PLANNING SALARIES AND WAGES $ 1,978,832 $ 290,566 $ 384,754 $ 1,594,078 19% BENEFITS 681,706 107,524 126,981 554,725 19% SUPPLIES 19,400 523 433 18,967 2% SERVICES 1,111,921 49,781 149,136 962,785 13% MACHINERY/EQUIPMENT 0% $ 3,791,859 $ 448,394 $ 661,303 $ 3,130,556 17% HUMAN SERVICES PROGRAM SALARIES AND WAGES $ 101,496 $ - $ 10,782 $ 90,714 11% BENEFIT S 29,113 - 2,165 26,948 7% SUPPLIES 15,000 - 59 14,942 0% SERVICES 313,500 - 8,460 305,040 3% 459,109 21,465 437,644 5% PARKS & REC REATIO N SALARIES AND WAGES $ 2,627,863 $ 386,977 $ 365,506 $ 2,262,357 14% BENEFITS 865,945 139,402 133,623 732,322 15% SUPPLIES 166,640 16,626 22,326 144,314 13% SERVICES 1,421,287 112,972 130,534 1,290,753 9% $ 5,081,735 $ 655,977 $ 651,988 $ 4,429,747 13% PUBLIC WORKS ADMINISTRATION SALARIES AND WAGES $ 387,424 $ 49,897 $ 21,156 $ 366,268 5% BENEFIT S 126,689 17,238 10,695 115,994 8% SUPPLIES 9,600 63 1,063 8,537 11% SERVICES 90,400 14,521 13,723 76,677 15% $ 614,113 $ 81,720 $ 46,637 $ 567,476 8% FACILITIFS MAINTENANCE SALARIES AND WAGES 860,456 138,057 146,231 714,225 17% BENEFITS 369,679 57,084 56,253 313,426 15% SUPPLIES 128,000 23,187 9,563 118,437 7% SERVICES 670,460 76,005 157,350 513,110 23% MACHINERY/EQUIPMENT 270,180 - - 270,180 0% $ 2,298,775 $ 294,332 $ 369,398 $ 1,929,377 16% ENGINEERING SALARIES AND WAGES $ 1,866,128 $ 289,455 $ 305,443 $ 1,560,685 16% BENEFITS 702,578 117,673 117,782 584,796 17% SUPPLIES 2,200 795 - 2,200 0% SERVICES 274,430 28,220 33,957 240,473 12% $ 2,845,336 $ 436,144 $ 457,182 $ 2,388,154 16% TOTAL GENERAL FUND EXPENDITURES $ 49,371,535 $ 7,637,016 $ 8,134,057 $ 41,237,478 16% O CL O io C M C IL s r C O z N N O N M 7 N LL 32 Packet Pg. 64 I 2.4.a I GENERAL FUND OVERVIEW BALANCES CHANGE IN FUND BALANCES GENERAL FUND ---- ACTUAL ---- ---- ACTUAL ---- & SUBFUNDS 2/28/2022 2/28/2022 Q1 YTD Fund Balance Cash Balance 001-General Fund $ 12,846,678 $ 4,757,128 $ (3,423,881 �E 009-Leoff-Medical Ins. Reserve 201,869 201,869 (53,349 Q. 011-Risk Management Reserve Fund 25,000 25,000 - a� 012-ContingencyReserve Fund 1,782,150 1,782,150 - 6 v 014-Historic Preservation Gift Fund 16,422 16,421 - c 016-Building Maintenance 4,412,371 4,412,371 12,371 ii 017 - Marsh Restoration & Preservation 848,617 848,616 - , t Total General Fund & Subfunds $ 20,133,107 $ 12,043,555 $ - $ (3,464,858 c a N N *$8,067,160 of the fund balance in Fund 001 added to the $1,78150 balance in Fund 012, represent the required 2, N 20% operating reserve. ca There are no interfund loans outstanding at this time. L u_ GOVERNMENTAL FUNDS OVERVIEW BALANCES CHANGE IN FUND BALANCES GOVERNMENTAL ---- ACTUAL ---- ---- ACTUAL ---- FUNDS 2/28/2022 2/28/2022 Q1 YTD Fund Balance Cash Balance General Fund & Subfunds $ 20,133,107 $ 12,043,555 $ (3,464,858 Special Revenue 19,115,235 17,544,413 687,748 Capital Projects 2,817,764 3,560,445 (814,208 Total Governmental Funds $ 42,066,106 $ 33,148,413 $ - $ (3,591,318 *Please note that these revenues and expenses occur within annual cycles. This Interim Report is not adjusted for accruals or those annual cycles. 33 Packet Pg. 65 1 2.4.a SPECIAL REVENUE FUNDS OVERVIEW BALANCES CHANGE IN FUND BALANCES GOVERNMENTAL ---- ACTUAL ---- ---- ACTUAL ---- SPECIAL REVENUE 2/28/2022 2/28/2022 Q1 YTD Fund Balance Cash Balance 104 - Drug Enforcement Fund $ 76,158 $ 76,524 $ 528 1 1 1 - Street Fund 729,198 592,130 (234,215 0 112 - Combined Street Const/Improve 2,539,727 1,380,609 321,477 117 - Municipal Arts Acquis. Fund 718,576 720,830 65,597 120 - Hotel/Motel Tax Revenue Fund 79,934 66,557 8,400 'U 121 - Employee Parking Permit Fund 84,839 85,097 7,790 122 - Youth Scholarship Fund 14,595 14,642 250 123 -Tourism Promotional Fund/Arts 101,708 97,476 5,195 >+ 125 - Real Estate Tax2 4,269,470 4,187,323 194,311 126 - Real Estate Excise Tax 1 * 3,635,007 3,458,294 303,682 0 127 - Gifts Catalog Fund 363,978 365,012 60,876 N 130 - Cemetery Maintenance/Improvement 277,092 278,013 9,413 c 136 - Parks Trust Fund 170,791 171,358 1,182 N 137 - Cemetery Maintenance Trust Fund 1,125,860 1,129,586 12,091 ca 138- Sister City Comm ission 15,667 15,719 108 140 -Business Improvement Disrict 58,231 58,231 29,100 141 -Affordable and Supportive Housing I'd 175,424 168,031 16,010 .. 142 - Edmonds Rescue Plan Fund 4,658,190 4,658,190 (114,190 0 143 -Tree Fund 20,791 20,791 143 0. Total Special Revenue $ 19,115,235 $ 17,544,413 $ - $ 687,748 *$200,000 of the fund balance in Fund 126 has been reserved for Marsh Restoration Funding, as well as $500,000 for 'U the purchase of Open Space. ii ENTERPRISE FUNDS OVERVIEW 0 2 N N O N BALANCES CHANGE IN FUND BALANCES �+ c� ENTERPRISE ---- ACTUAL ---- ---- ACTUAL ---- FUNDS 2/28/2022 2/28/2022 Q1 YTD u_ Fund Balance Cash Balance c m 421 -Water Utility Fund $ 30,102,151 $ 7,260,392 $ 759,551 t 422 -Storm Utility Fund " 16,699,638 5,970,353 734,330 r 423-Sewer/WWTPUtility Fund 62,337,986 16,758,240 1,847,788 Q 424 - Bond Reserve Fund 843,963 843,963 2 411 -Combined Utility Operation 25,960 58,179 25,960 Total Enterprise Funds $ 110,009,699 $ 30,891,127 $ - $ 3,367,631 *$250,000 of the Storm Utility Fund Balance has been reserved for Marsh Restoration Funding. *Please note that these revenues and expenses occur within annual cycles. This Interim Report is not adjusted for accruals or those annual cycles. 34 Packet Pg. 66 2.4.a SUMMARY OVERVIEW BALANCES CHANGE IN FUND BALANCES ---- ACTUAL ---- ---- ACTUAL ---- CITY-WIDE 2/28/2022 2/28/2022 Q1 YTD Fund Balance Cash Balance Governmental Funds $ 42,066,106 $ 33,148,413 $ (3,591,318 Enterprise Funds 110,009,699 30,891,127 3,367,631 00. Internal Services Fund 10,337,386 5,903,427 a) (30,109 W Total City-wide Total $ 162,413,190 $ 69,942,967 $ - $ (253,796 2 U c c� c ii 2, t c 0 INTERNAL SERVICE FUNDS OVERVIEW N N N O N fC 3 L BALANCES CHANGE IN FUND BALANCES o INTERNAL SERVICE ---- ACTUAL ---- ---- ACTUAL 0. ---- FUNDS 2/28/2022 2/28/2022 Q1 YTD Fund Balance Cash Balance c 511 - Equipment Rental Fund $ 9,344,327 $ 5,086,490 $ 60,861 u_ 21 512 -Technology Rental Fund 993,059 816,937 (90,971 0 Total Internal Service Funds $ 10,337,386 $ 5,903,427 $ - $ (30,109 2 N N O N fC 3 L LL d E L V Q *Please note that these revenues and expenses occur within annual cycles. This Interim Report is not adjusted for accruals or those annual cycles. 35 Packet Pg. 67 2.5 City Council Agenda Item Meeting Date: 04/12/2022 Federal Grant Audit Exit Conference Follow-up Staff Lead: Dave Turley Department: Administrative Services Preparer: Dave Turley Background/History The exit conference for the 2020 Federal Grant audit was held on March 29. Staff Recommendation Discussion only. Narrative Council has requested an opportunity to discuss the Federal Grants audit held on March 29. Attachments: EDmondspublished22audit City of Edmonds Exit Packet - March 29, 2022 Packet Pg. 68 2.5.a Financial Statements and Federal Single Audit Report City of Edmonds For the period January 1, 2020 through December 31, 2020 Published March 31, 2022❑ .❑ Find out what's new at SAO Report No. 1030259 by scanning this code with ❑ your smartphone's camera Packet Pg. 69 2.5.a Office of the Washington State Auditor Pat McCarthy March 31, 2022 Mayor and City Council City of Edmonds Edmonds, Washington Report on Financial Statements and Federal Single Audit Please find attached our report on the City of Edmonds financial statements and compliance with federal laws and regulations. We are issuing this report in order to provide information on the City's financial condition. Sincerely, Pat McCarthy, State Auditor Olympia, WA Americans with Disabilities In accordance with the Americans with Disabilities Act, we will make this document available in alternative formats. For more information, please contact our Office at (564) 999-0950, TDD Relay at (800) 833-6388, or email our webmaster at webmasterksao.wa.gov. Insurance Building, P.O. Box 40021 • Olympia, Washington 98504-0021 • (564) 999-0950 • Pat. McCarthy@sao.wa.gov Packet Pg. 70 2.5.a Schedule of Findings and Questioned Costs................................................................................... 4 Schedule of Federal Award Findings and Questioned Costs.......................................................... 6 Independent Auditor's Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with GovernmentAuditing Standards................................................................................................... 12 Independent Auditor's Report on Compliance for Each Major Federal Program and Report on Internal Control Over Compliance in Accordance With the Uniform Guidance ......................... 14 Independent Auditor's Report on the Financial Statements.......................................................... 17 FinancialSection........................................................................................................................... 20 Corrective Action Plan for Findings Reported Under Uniform Guidance..................................100 About the State Auditor's Office..................................................................................................101 a Office of the Washington State Auditor sao.wa.gov Page 3 Packet Pg. 71 2.5.a City of Edmonds January 1, 2020 through December 31, 2020 SECTION I — SUMMARY OF AUDITOR'S RESULTS The results of our audit of the City of Edmonds are summarized below in accordance with Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Financial Statements We issued an unmodified opinion on the fair presentation of the financial statements of the governmental activities, the business -type activities, each major fund and the aggregate discretely presented component units and remaining fund information in accordance with accounting principles generally accepted in the United States of America (GAAP). Internal Control over Financial Reporting: • Significant Deficiencies: We reported no deficiencies in the design or operation of internal control over financial reporting that we consider to be significant deficiencies. • Material Weaknesses: We identified no deficiencies that we consider to be material weaknesses. We noted no instances of noncompliance that were material to the financial statements of the City. Federal Awards Internal Control over Major Programs: • Significant Deficiencies: We reported no deficiencies in the design or operation of internal control over major federal programs that we consider to be significant deficiencies. • Material Weaknesses: We identified deficiencies that we consider to be material weaknesses. We issued an adverse opinion on the City's compliance with requirements applicable to its major federal program. We reported findings that are required to be disclosed in accordance with 2 CFR 200.516(a). Office of the Washington State Auditor sao.wa.gov Page 4 Packet Pg. 72 2.5.a Identification of Major Federal Programs The following program was selected as a major program in our audit of compliance in accordance with the Uniform Guidance. CFDA No. Program or Cluster Title 21.019 COVID-19 — Coronavirus Relief Fund The dollar threshold used to distinguish between Type A and Type B programs, as prescribed by the Uniform Guidance, was $750,000. The City did not qualify as a low -risk auditee under the Uniform Guidance. SECTION II — FINANCIAL STATEMENT FINDINGS None reported. SECTION III — FEDERAL AWARD FINDINGS AND QUESTIONED COSTS See Finding 2020-001. Office of the Washington State Auditor sao.wa.gov Page 5 Packet Pg. 73 2.5.a City of Edmonds January 1, 2020 through December 31, 2020 2020-001 The City's internal controls were inadequate for ensuring compliance with federal requirements for allowable activities and costs and subrecipient monitoring CFDA Number and Title: Federal Grantor Name: Federal Award/Contract Number: Pass -through Entity Name: Pass -through Award/Contract Number: Questioned Cost Amount: Background 21.019 — COVID-19 — Coronavirus Relief Fund U.S. Department of the Treasury N/A Washington State Department of Commerce, Snohomish County, and Economic Alliance Snohomish County 20-6541 C-167 $871,500 The purpose of the Coronavirus Relief Fund (CRF) program is to provide payments to state, territorial, tribal and certain eligible local governments to cover necessary expenditures incurred because of the COVID-19 pandemic. During fiscal year 2020, the City spent $2,123,907 in program funds to cover additional costs the City incurred during the pandemic, including teleworking equipment, personal protective equipment, and payroll. Additionally, the City spent $1,345,500 of these funds to establish a program that provided direct assistance payments to local businesses financially affected by COVID-19. The program funds also included $456,344 passed through to four subrecipients to fulfil components of the program's objectives. The portion of program funds the City passed through to the subrecipients provided emergency assistance to households financially affected by COVID-19. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include Office of the Washington State Auditor sao.wa.gov Page 6 Packet Pg. 74 understanding program requirements and monitoring the effectiveness of established controls. Activities Allowed/Allowable Costs For the CRF program, the costs that recipients submit for federal reimbursement must have been necessary for responding to the COVID-19 pandemic and not previously included in budgets prior to March 27, 2020. All costs recipients charge to the CRF program must comply with program requirements and be supported by proper documentation demonstrating costs are specifically related to COVID-19 activities. Subrecipient Monitoring Whenever the City passes on federal funding to subrecipients, federal regulations require the City to clearly identify the subaward contract as a federal award and include all applicable program requirements. Further, the City must monitor its subrecipients to ensure they comply with the terms and conditions of the federal award. To determine the appropriate level of monitoring, the City must evaluate each subrecipient's risk of noncompliance with federal requirements. For this award, monitoring would include verifying the subrecipients only provided assistance to participants who met eligibility requirements and claimed reimbursement for allowable costs. Description of Condition Activities Allowed/Allowable Costs The City established four eligibility criteria for local businesses to receive assistance payments, but it did not have a process for verifying that businesses met all of these criteria. For one of the criteria, City employees relied on each business' application and self -attestation without verifying the information was accurate to ensure businesses were eligible to receive assistance payments. Subrecipient Monitoring The City contracted with four local nonprofit organizations to administer housing assistance programs and distribute food to food -insecure individuals and households in Edmonds. The City did not include all required elements in the subawards and did not perform risk assessments or monitor each subrecipient for compliance with program requirements, as federal regulations require. We consider these deficiencies in internal controls to be material weaknesses, which led to material noncompliance. These issues were not reported as a finding in the prior audit. Office of the Washington State Auditor sao.wa.gov Page 7 Packet Pg. 75 2.5.a Cause of Condition Many businesses and people experienced sudden financial hardship due to the COVID-19 pandemic. In an effort to help preserve its local economy, the City acted quickly by providing assistance payments to businesses and passing funds to nonprofit organizations it had worked with in the past for other programs. However, the CRF program was a new type of federal funding for the City, and it had not previously used federal funds to provide direct assistance payments to local businesses or passed funding through to subrecipients. As such, City employees lacked adequate experience and needed training to know they should have independently verified each business met all eligibility criteria before awarding assistance. Further, City employees were not aware of all federal requirements involved when passing funding through to subrecipients. Effect of Condition and Questioned Costs Activities Allowed/Allowable Costs Without obtaining documentation from business grant applicants to verify they met all eligibility criteria, the City cannot ensure business relief grant costs were allowable. During the audit, we gave the City the opportunity to obtain documentation from businesses to support their eligibility. In January 2022, the City hired a contractor to request and review supporting documentation from the 172 businesses that received CRF funds. We reviewed the information the contractor obtained and found the following: • Eight businesses did not respond to the City's request for financial information or, after some communication, did not provide financial information. These businesses received a total of $62,000. • Twenty-nine businesses did not meet the City's eligibility criteria, based on the information they provided. These businesses received a total of $235,500. An additional 74 businesses that received a total of $574,000 in direct business grants provided tax returns, quarterly reports, profit and loss statements or other financial information that showed a loss in revenues for the respective period. However, based on the information provided, we could not confirm a year -over -year business/revenue loss of at least 30 percent in April or May 2020, which the City's eligibility criteria required. We also could not confirm the expenditures the City charged to the program were allowable for these businesses. As such, we are questioning these costs. Office of the Washington State Auditor sao.wa.gov Page 8 Packet Pg. 76 2.5.a Subrecipient Monitoring The City did not include all required information in the four subrecipient contracts, such as the subrecipient's unique entity identifier, federal award date, name of federal awarding agency, pass -through entity, contact information for awarding official of the pass -through entity, and the program's CFDA number and name. Without this information, the subrecipient is at an increased risk of not knowing the award comes from a federal program. This also increases the risk the subrecipient would not know it needs to comply with specific program requirements, which could potentially lead to spending funds for unallowable purposes. Further, without performing risk assessments and adequately monitoring subrecipients, the City cannot ensure it is performing the proper level of monitoring and that subrecipients are complying with program requirements. Because the City did not perform risk assessments and monitor the four subrecipients, we gave the City the opportunity to perform monitoring during the audit and verify if subrecipients complied with the terms and conditions of the subaward. In early 2022, the City hired a contractor to perform risk assessments and review three of the subrecipients to verify they only provided assistance to eligible participants and complied with program requirements. The City found the subrecipients did not have adequate support demonstrating participant eligibility. As a result, we are considering the costs the City passed through to subrecipients, totaling $456,344, to be unsupported payments. Recommendation We recommend the City: • Provide adequate training to staff responsible for administering federal programs • Dedicate the necessary time and resources to staying updated on program guidance and ensuring compliance with all program requirements • Verify that beneficiaries of public funds meet all of the City's eligibility criteria before awarding funds • Include all required elements in subaward agreements, assess subrecipients' risk, and monitor them accordingly to verify they are complying with the terms and conditions of the award and only providing funds to eligible participants Office of the Washington State Auditor sao.wa.gov Page 9 Packet Pg. 77 2.5.a City's Response The City of Edmonds appreciates the opportunity to respond to the Washington State Auditor's Office's (SAO) conclusions. The City is committed to establishing and following effective internal controls for administering federal grants and for compliance with federal uniform guidance for grant administration, and to monitor any transactions with subrecipients to ensure compliance with federal requirements. During 2020 the City endeavored to distribute Coronavirus Relief Funds as expeditiously as possible into the community where support was most needed due to the devastating impact on residents and businesses because of the COVID-19 pandemic. We worked very hard to distribute these funds quickly and efficiently, which we believe had a very significant, positive impact on our community. In our attempts to get the grant money into the community as quickly as possible, the City relied in part upon business's self -certification of our eligibility requirements under penalty of perjury. After distributing the CARES funds we became aware that some of the businesses to whom grants had been awarded did not meet the eligibility requirements. When we learned this we performed our own internal audit to determine the number of businesses that were not eligible. After reviewing our audit results, the SAO determined that 29 businesses who did not meet our grant requirements nevertheless submitted applications and received grants totaling $235,500. Another 8 businesses have not responded to our requests for documentation; those businesses received grants totaling $62, 000. The City is exploring various remedies that may be available and appropriate, including but not limited to civil suits and criminal prosecution, to recover this $297,500 in grant funds or otherwise hold wrongdoers accountable for their actions. The remaining questioned costs of $574, 000 are from 74 businesses who were able to supply documentation of losses that they incurred on an annual basis, but were unable to supply information specific to April or May of 2020. Because these businesses were able to show proof of COVID-related income losses, we are not intending to pursue legal action in these cases at this time. The City acted in good faith to quickly deliver aid and assistance to our residents, following the guidance and direction available at the time from the Department of Treasury and the Department of Commerce. Overall, City staff administered this highly complex and time sensitive program in a professional manner while dealing with emergency circumstances. We acknowledge that this does not relieve the City of the necessity to ensure that assistance payments are distributed only to those who meet our eligibility requirements. The City will also provide training to ensure that subrecipients are evaluated and monitored sufficiently to ensure eligibility and to reduce any risk of Office of the Washington State Auditor sao.wa.gov Page 10 Packet Pg. 78 noncompliance. We are planning to add additional staff to provide better monitoring of the distribution of future grants funds, and we will provide staff with the time, resources, and training necessary to avoid these errors from occurring again. Auditor's Remarks We appreciate the City's commitment to resolving this finding and thank the City for its cooperation and assistance during the audit. We will review the corrective action taken during the next regular audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. Title 2 CFR Part 200, Uniform Guidance, section 332, Requirements for pass -through entities, establishes subrecipient monitoring and management requirements for pass through entities. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 42 U.S. Code of Federal Regulations (CFR) Part 801, Coronavirus Relief Fund establishes allowable costs of the program. 2 CFR Part 200, Subpart E, cost principles do not apply to the Coronavirus Relief Fund. Therefore, auditors refer to guidance and FAQs from the U.S. Department of the Treasury and the pass -through agency, the Washington State Department of Commerce, as the criteria when testing the allowability of costs under the Fund. Guidance and FAQs from both the U.S. Department of the Treasury and the Washington State Department of Commerce can be found at: https://www.commerce.wa.gov/serving- communities/local-government/covid-resiliency-grants/. These documents speak to the grantors' expectation that local governments obtain documentation that supports how businesses met eligibility criteria. Office of the Washington State Auditor sao.wa.gov Page 11 Packet Pg. 79 2.5.a Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards City of Edmonds January 1, 2020 through December 31, 2020 Mayor and City Council City of Edmonds Edmonds, Washington We have audited, 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, the financial statements of the governmental activities, the business -type activities, each major fund and the aggregate discretely presented component units and remaining fund information of the City of Edmonds, as of and for the year ended December 31, 2020, and the related notes to the financial statements, which collectively comprise the City's basic financial statements, and have issued our report thereon dated June 30, 2021. As discussed in Note 2 to the financial statements, during the year ended December 31, 2020, the City implemented Governmental Accounting Standards Board Statement No. 84, Fiduciary Activities and Statement No. 88, Certain Disclosures Related to Debt, including Direct Borrowings and Direct Placements. As discussed in Note 17 to the 2020 financial statements, the full extent of the COVID-19 pandemic's direct or indirect financial impact on the City is unknown. INTERNAL CONTROL OVER FINANCIAL REPORTING In planning and performing our audit of the financial statements, we considered the City's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we do not express an opinion on the effectiveness of the City's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, Office of the Washington State Auditor sao.wa.gov Page 12 Packet Pg. 80 2.5.a or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the City's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. COMPLIANCE AND OTHER MATTERS As part of obtaining reasonable assurance about whether the City's financial statements are free from material misstatement, we performed tests of the City's compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. PURPOSE OF THIS REPORT The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. However, this report is a matter of public record and its distribution is not limited. It also serves to disseminate information to the public as a reporting tool to help citizens assess government operations. � 0 Pat McCarthy, State Auditor Olympia, WA June 30, 2021 Office of the Washington State Auditor sao.wa.gov Page 13 Packet Pg. 81 2.5.a Report on Compliance for Each Major Federal Program and Report on Internal Control over Compliance in Accordance with the Uniform Guidance City of Edmonds January 1, 2020 through December 31, 2020 Mayor and City Council City of Edmonds Edmonds, Washington REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM We have audited the compliance of the City of Edmonds, with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Compliance Supplement that could have a direct and material effect on each of the City's major federal programs for the year ended December 31, 2020. The City's major federal programs are identified in the accompanying Schedule of Findings and Questioned Costs. Management's Responsibility Management is responsible for compliance with federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs. Auditor's Responsibility Our responsibility is to express an opinion on compliance for each of the City's major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the City's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. Office of the Washington State Auditor sao.wa.gov Page 14 Packet Pg. 82 2.5.a We believe that our audit provides a reasonable basis for our adverse opinion on compliance for each major federal program. Our audit does not provide a legal determination on the City's compliance. Basis for Adverse Opinion on 21.019 - Coronavirus Relief Fund As described in Finding 2020-01 in the accompanying Schedule of Federal Award Findings and Questioned Costs, the City did not comply with requirements regarding 21.019 - Coronavirus Relief Fund for Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Subrecipient Monitoring. Compliance with such requirements is necessary, in our opinion, for the City to comply with the requirements applicable to that program. Adverse Opinion on 21.019 - Coronavirus Relief Fund In our opinion, because of the significance of the matter described in the Basis for Adverse Opinion paragraph, the City did not comply, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on 21.019 — Coronavirus Relief Fund for the year ended December 31, 2020. City's Response to Findings The City's response to the noncompliance findings identified in our audit is described in the accompanying Schedule of Federal Award Findings and Questioned Costs. The City's response was not subjected to the auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response. REPORT ON INTERNAL CONTROL OVER COMPLIANCE Management of the City is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the City's internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program in order to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the City's internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of Office of the Washington State Auditor sao.wa.gov Page 15 Packet Pg. 83 compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. We identified certain deficiencies in internal control over compliance, as described in the accompanying Schedule of Federal Award Findings and Questioned Costs as Finding 2020-001 that we consider to be a material weakness. City's Response to Findings The City's response to the internal control over compliance findings identified in our audit is described in the accompanying Schedule of Federal Award Findings and Questioned Costs. The City's response was not subjected to the auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response. Purpose of this Report The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. However, this report is a matter of public record and its distribution is not limited. It also serves to disseminate information to the public as a reporting tool to help citizens assess government operations. Pat McCarthy, State Auditor Olympia, WA March 29, 2022 Office of the Washington State Auditor sao.wa.gov Page 16 Packet Pg. 84 2.5.a Report on the Financial Statements City of Edmonds January 1, 2020 through December 31, 2020 Mayor and City Council City of Edmonds Edmonds, 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 discretely presented component units and remaining fund information of the City of Edmonds, as of and for the year ended December 31, 2020, 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 Office of the Washington State Auditor sao.wa.gov Page 17 Packet Pg. 85 2.5.a 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. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions 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 discretely presented component units and remaining fund information of the City of Edmonds, as of December 31, 2020, 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 2 to the financial statements, in 2020, the City adopted new accounting guidance, Governmental Accounting Standards Board Statement No. 84, Fiduciary Activities and Statement No. 88, Certain Disclosures Related to Debt, including Direct Borrowings and Direct Placements. Our opinion is not modified with respect to this matter. As discussed in Note 17 to the 2020 financial statements, the full extent of the COVID-19 pandemic's direct or indirect financial impact on the City is unknown. 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 and required supplementary information listed on page 20 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 Office of the Washington State Auditor sao.wa.gov Page 18 Packet Pg. 86 2.5.a 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 as a whole. The accompanying Schedule of Expenditures of Federal Awards is presented for purposes of additional analysis as required by Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance).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. OTHER REPORTING REQUIRED BY GOVERNMENT AUDITING STANDARDS In accordance with Government Auditing Standards, we have also issued our report dated June 30, 2021 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. Pat McCarthy, State Auditor Olympia, WA June 30, 2021 Office of the Washington State Auditor sao.wa.gov Page 19 Packet Pg. 87 2.5.a ■ City of Edmonds January 1, 2020 through December 31, 2020 REQUIRED SUPPLEMENTARY INFORMATION Management's Discussion and Analysis — 2020 BASIC FINANCIAL STATEMENTS Statement of Net Position — 2020 Statement of Activities — 2020 Balance Sheet — Governmental Funds — 2020 Reconciliation of the Balance Sheet to the Statement of Net Position — Governmental Funds — 2020 Statement of Revenues, Expenditures and Changes in Fund Balances — Governmental Funds — 2020 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Government Funds to the Statement of Activities — 2020 Statement of Revenues, Expenditures, and Changes in Fund Balances — Budget and Actual — General Fund — 2020 Statement of Net Position — Proprietary Funds — 2020 Statement of Revenues, Expenses and Changes in Net Position — Proprietary Funds — 2020 Statement of Cash Flows — Proprietary Funds — 2020 Statement of Fiduciary Net Position — 2020 Statement of Changes in Fiduciary Net Position — 2020 Notes to the Financial Statements — 2020 REQUIRED SUPPLEMENTARY INFORMATION Firemen's Pension Fund Other Post -Employment Benefits — Schedule of Changes in Total OPEB Liability and Related Ratios — 2020 Firemen's Pension Fund — Schedule of Changes in the City's Net Pension Liability and Related Ratios — 2020 Firemen's Pension Fund — Schedule of City Contributions — 2020 Schedules of Proportionate Share of the Net Pension Liability — PERS 1, PERS 2/3, LEOFF 1, LEOFF 2 — 2020 Schedule of Employer Contributions — PERS 1, PERS 2/3, LEOFF 1, LEOFF 2 — 2020 Office of the Washington State Auditor sao.wa.gov Page 20 Packet Pg. 88 2.5.a SUPPLEMENTARY AND OTHER INFORMATION Schedule of Expenditures of Federal Awards — 2020 Notes to the Schedule of Expenditures of Federal Awards — 2020 Office of the Washington State Auditor sao.wa.gov Page 21 Packet Pg. 89 2.5.a MANAGEMENT'S DISCUSSION AND ANALYSIS The Management's Discussion and Analysis section of this provides an overview of the City's financial activities for the year ended December 31, 2020. The purpose is to highlight significant financial issues, major financial activities and resulting changes in the financial position and economic factors affecting the City. The reader is encouraged to consider the information presented here in conjunction with the information furnished in the Letter of Transmittal, the City's financial statements and the accompanying notes following the financial information. Financial Highlights • The regional, national and global economies were impacted significantly in 2020 by the pandemic brought on by the COVID-19 virus. While some industries were devastated — travel/tourism and in - person entertainment such as concerts and sporting events, for example — the City's revenue performance remained surprisingly strong in 2020. In the General Fund Taxes, Licenses and Permits, and Charges for Services decreased by only $1,139,116 compared to 2019, a 3.0% decrease, and assessed property values in the City increased by 7.7 percent over 2019. The assets and deferred outflows of resources of the City of Edmonds exceeded its liabilities and deferred inflows at fiscal year-end by $198.3 million (net position), an increase of $12.2 million over 2019. Of this amount, $144.6 million is a net investment in capital assets. The unrestricted net position totals $34.2 million and may be used to meet the city's ongoing obligations to citizens and creditors. In addition, the restricted net position totals $19.5 million and is earmarked for debt service, capital projects and special revenue funds. The City's total net position improved by $12.2 million in 2020. Governmental activities increased by $2.7 million and business -type activities increased by $9.5 million, mostly the result of a bond issuance in late 2020. • Governmental funds reported a combined ending fund balance of $34.5 million; a $1.6 million reduction from the prior year. Of this amount, $14.4 million is unassigned and available to fund ongoing activities. The committed fund balance category totals $3.1 million and the assigned fund balance category totals $2 million. The 2020 unassigned fund balance equals 25.9% of 2020 general fund expenditures. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the City of Edmonds basic financial statements. The basic financial statements are comprised of three components: 1) government -wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. Other supplementary information contained in the report is intended to furnish additional detail to support the basic financial statements. Using this Annual Financial Report This annual report consists of a series of financial statements and notes to those statements. These statements are organized so the reader can understand the City of Edmonds as a financial whole or as an entire operating entity. The statements then proceed to provide an increasingly detailed look at specific financial conditions. Government -wide Financial Statements The government -wide financial statements are designed to provide readers with a broad overview of the city's financial position in a manner like that of the private -sector business. These statements are reported on the full accrual basis of accounting. Under the full accrual basis, certain revenues and expenses are reported that will not affect the cash flows until future periods. The focus of the Statement of Net Position is designed to be similar to bottom -line results for the City and its governmental and business -type activities. This statement presents all of the City's assets, deferred outflows of resources, liabilities, and deferred inflows of resources, with the residual reported as net position. 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 both the gross and net cost of various functions, including both Page 22 Packet Pg. 90 2.5.a governmental and business -type activities, which are supported by the City's general tax and other revenues. This is intended to summarize and simplify the reader's analysis of the cost of various governmental services and/or subsidy to various business -type activities. 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. Governmental activities of the City include general government (executive, finance, legal, human resources, and court), public safety, utilities and environment, transportation, economic environment, mental and physical health, and culture and recreation. The City's business -type activities include water, sewer, and storm utilities. 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 City also includes as a discretely presented component unit the Edmonds Public Facilities District (PFD), a performing arts center in Edmonds, and the PFD's blended component unit, the Edmonds Center for the Arts, a non-profit established to collect donations and manage the operations for the PFD. Although legally separate, the PFD is important because the City provides financial support and oversight responsibilities connected to the activities of the board. Fund Financial Statements The annual financial report includes fund financial statements in addition to the government -wide 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 of Edmonds, like other state and local governments, uses fund accounting to ensure and show compliance with finance - related legal requirements. The City presents three categories of funds: governmental funds, proprietary funds, and fiduciary funds. Governmental funds account for essentially the same functions reported as governmental activities in the government -wide financial statements. Most of the City's basic services are reported in the governmental funds. These statements, however, focus on cash and other assets that can readily be converted to available resources, as well as any balances remaining at year-end. Such information is useful in determining which financial resources are available in the near future to finance City programs. Readers may better understand the long-term impact of the government's near -term financing decisions by comparing the information presented for the governmental funds with similar information presented for governmental activities in the government -wide financial statements. The Governmental Funds' Balance Sheet and the Governmental Funds' Statement of Revenues, Expenditures, and Changes in Fund Balances provide a reconciliation to facilitate the comparison. Information for the major governmental funds is presented separately in the Governmental Fund Balance Sheet and in the Governmental Fund's Statement of Revenues, Expenditures, and Changes in Fund Balances; information for the non -major funds is presented in the aggregate. The City's main operating fund is the General Fund. However, the City maintains many accounts and seven sub -funds within the General Fund. The remaining governmental funds are combined into a single column labeled non -major governmental funds. Individual fund data for each of the non -major governmental funds can be found in combining statements later in the report. The City maintains control over its operating funds through the adoption of an annual budget. Budgets are adopted at the fund level and accordance with state law. A budgetary comparison is presented for the General Fund as part of the basic financial statements. The basic governmental fund financial statements can be found after the government -wide statements of this report. Proprietary funds account for services for which the City charges outside customers and other City Page 23 Packet Pg. 91 2.5.a departments. Proprietary funds provide the same information as shown in the government -wide financial statements, since both use the accrual basis of accounting. Proprietary funds report the same functions presented as business -type activities in the government -wide financial statements. 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 to City departments. The enterprise fund statements provide information for the City's water, sewer, and storm water utilities. The City uses internal service funds to account for its fleet of vehicles and its technology equipment. Because these internal services largely benefit governmental rather than business -type functions, they have been included within the governmental activities in the government -wide financial statements. The basic proprietary fund financial statements can be found following the governmental fund statements of this report. Fiduciary funds account for assets held by the City in a trustee capacity or as an agent for individuals or other entities. Fiduciary funds are not included in the government -wide financial statements because their assets are not available to support City programs. The City's fiduciary activities are reported in a separate Statement of Fiduciary Net Position and a Statement of Changes in Fiduciary Net Position as part of the basic financial statements. The basic fiduciary fund financial statements can be found following the proprietary fund statements of this report. Notes to the Financial Statements The notes to the financial statements are an integral part of the financial statements. They provide additional disclosures essential to a full understanding of the information provided in the government -wide and fund financial statements. The notes to the financial statements immediately follow the basic financial statements in this report. Other Information In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning pensions and other post -employment benefits. Additional information can be found in Note 10 — Pension Plans and Note 11 — Other Post -Employment Benefits. Government -wide Financial Analysis This section provides analysis of the government -wide financial statements including long-term and short- term information about the City's financial condition. The following two tables address the financial results of the City as a whole. The first table is a condensed version of the 2020 government -wide statement of net position with a comparison to 2019: Condensed Statement of Net Position Governmental Activities Business -type Activities Total 2020 2019 2020 2019 2020 2019 Current and other assets $ 54,428,570 $ 56,272,471 $40,144,165 $31,928,197 $ 94,572,735 $ 88,200,668 Capital assets, net 78,793,002 75,296,662 113,972,003 98,151,383 192,765,005 173,448,045 Total assets 133,221,572 131,569,133 154,116,168 130,079,580 287,337,740 261,648,713 Deferred outflows of resources 2,689,090 2,186,285 436,657 434,888 3,125,747 2,621,173 Deferred outflows of resources 2,689,090 2,186,285 436,657 434,888 3,125,747 2,621,173 Total assets and deferred outflows of resources 135,910,662 133,755,418 154,552,825 130,514,468 290,463,487 264,269,886 Current liabilities 6,320,709 4,603,696 6,960,202 4,109,558 13,280,911 8,713,254 Noncurrent liabilities 21,227,359 21,361,446 54,672,191 42,663,261 75,899,550 64,024,707 Total liabilities 27,548,068 25,965,142 61,632,393 46,772,819 89,180,461 72,737,961 Deferred inflows of resources 2,537,375 4,715,190 387,703 668,932 2,925,078 5,384,122 Deferred inflows of resources 2,537,375 4,715,190 387,703 668,932 2,925,078 5,384,122 Total liabilities and deferred inflows of 30,085,443 30,680,332 62,020,096 47,441,751 92,105,539 78,122,083 NET POSITION Net investment in capital assets 76,233,673 72,350,862 68,391,695 54,539,364 144,625,368 126,890,226 Restricted 16,255,342 20,538,591 3,296,724 2,983,688 19,552,066 23,522,279 Unrestricted 13,336,204 10,185,633 20,844,310 25,549,665 34,180,514 35,735,298 Total net position $105,825,219 $103,075,086 $92,532,729 $83,072,717 $198,357,948 $186,147,803 Page 24 Packet Pg. 92 2.5.a Analysis of Net Position Total net position (assets and deferred outflows, minus liabilities and deferred inflows) of the primary government was $198.3 million at December 31, 2020 an improvement of $12.2 million or 6.5% compared to December 31, 2019. Governmental activities increased their net position by $2.7 million and business -type activities increased their net position by $9.5 million. The largest component of the City's net position, $144.6 million, or 72.9%, is its investment in capital assets. These capital assets, such as streets, parks, trails, and vehicles and equipment related to police and public works, are used to provide services to the citizens. As a result, these assets are not for sale, and are therefore not available to fund current and future City obligations. Approximately $19.5 million of the primary government's total net position is restricted for debt service payments, transportation improvements, and other purposes, a decrease of $4.0 million compared to 2019. The primary government's December 31, 2020 unrestricted net position totals $34.2 million, a decrease of $1.5 million compared to 2019. The December 31, 2020 governmental activities unrestricted net position of $13.4 million may be used to meet ongoing obligations to citizens and creditors. There are no restrictions, commitments, or other limitations that significantly affect the availability of these resources for future use. Restricted governmental fund net position is $16.2 million and is restricted for purposes such as debt service, public safety, transportation, culture and recreation, and other purposes. Unrestricted net position of the City's business -type activities totals $20.8 million, representing the portion of unrestricted net position that may only be spent on activities related to one of the City's utilities (water, sewer, and storm water). Examples of utility activities include maintenance of water/sewer mains, pump and lift stations, storm drain flushing, water meter reading, and the wastewater treatment plant. Changes in Net Position The change in net position represents the increase or decrease in City net position resulting from its various activities. The following table is a condensed version of the City's changes in net position and compares 2020 results with 2019. This table shows program revenues, their respective expenses and the overall changes in net position for both governmental -type and business -type activities: Page 25 Packet Pg. 93 2.5.a Changes in Net Position Governmental Activities Business -type Activities Total 2020 2019 2020 2019 2020 2019 REVENUES Program revenues: Charges for services $ 12,634,784 $ 13,372,648 $27,280,123 $25,983,491 $ 39,914,907 $ 39,356,139 Operating grants and contributions 2,619,351 633,296 25,297 34,198 2,644,648 667,494 Capital grants and contributions 2,158,357 1,796,082 5,511,256 1,457,600 7,669,613 3,253,682 General revenues: Property taxes 14,599,185 14,386,149 - - 14,599,185 14,386,149 Sales taxes 9,397,119 9,477,813 9,397,119 9,477,813 Interfund utility taxes 2,359,529 2,450,254 2,359,529 2,450,254 Utility taxes 4,133,662 4,242,835 4,133,662 4,242,835 Excise taxes 6,248,492 5,690,723 6,248,492 5,690,723 Interest and investment earnings 691,210 1,468,251 165,842 363,547 857,052 1,831,798 Miscellaneous 552,738 274,840 3,544 - 556,282 274,840 Gains on disposition of assets 273,183 23,386 - - 273,183 23,386 Total revenues 55,667,610 53,816,277 32,986,062 27,838,836 88,653,672 81,655,113 EXPENSES Governmental activities: General government 16,103,089 13,458,742 16,103,089 13,458,742 Public safety 25,261,314 26,060,416 25,261,314 26,060,416 Utilities and environment 229,528 201,958 229,528 201,958 Transportation 4,885,398 7,185,216 4,885,398 7,185,216 Economic environment 1,461,200 1,640,845 1,461,200 1,640,845 Mental and physical health 147,957 166,750 147,957 166,750 Culture and recreation 4,682,914 5,405,494 4,682,914 5,405,494 Interest on long-term debt 146,808 48,910 146,808 48,910 Business -Type activities: Sewer Fund - - 10,930,526 12,068,583 10,930,526 12,068,583 Storm Fund 5,021,779 4,374,384 5,021,779 4,374,384 Water Fund 7,573,014 8,164,665 7,573,014 8,164,665 Total expenses 52,918,208 54,168,331 23,525,319 24,607,632 76,443,527 78,775,963 Excess (deficiency) before transfers 2,749,402 (352,054) 9,460,743 3,231,204 12,210,145 2,879,150 Transfers 731 11,984 (731) (11,984) - - Increase (decrease)in net position 2,750,133 (340,070) 9,460,012 3,219,220 12,210,145 2,879,150 Net position - beginning 103,075,086 103,415,154 83,072,717 79,853,497 186,147,803 183,268,651 Net position - ending $105,825,219 $103,075,084 $92,532,729 $83,072,717 $198,357,948 $186,147,801 Analysis of the Changes in Net Position Net position of the primary government increased by $12.2 million, mostly due to the sale of $13.9 million of Climate Bonds in the Sewer Fund. Total government -wide revenues of the primary government increased by $7.0 million or 8.5% and total expenses decreased by $2.3 million or 3.0% over the prior year. These changes are discussed in more detail below. Governmental Activities: The table above shows the net position for Governmental activities increased by $2.7 million. This increase is the result of an increase in total revenues combined with a reduction of total expenses in 2020. Governmental activity expenditures decreased by $1.3 million or 2.3% and Governmental activity revenues increased by $1.8 million, or 3.4% from 2019 levels. The expenditure decrease is due to severe pandemic -related cutbacks, primarily in public safety, transportation, and cultural services expenditures in the City. The decreased spending was matched with an increase to general revenues. The increase in revenues is from over $2 million in Federal CARES funds appropriations and other related funds received from Snohomish County, which the City used to provide assistance to local individuals, businesses, and other organizations. Below are additional significant changes to revenues for 2020: Page 26 Packet Pg. 94 2.5.a • As a result of record low interest rates, Interest and Investment Earnings decreased by $777,756, or 47.02%. • Property tax revenue increased $248,154, or 1.7%. • Sales tax collections decreased by $72,347, or 0.8%. • Excise taxes increased by $561,016 or 9.9%. The next chart summarizes the government activity revenue by source, while the second one reflects the specific programs' revenues and related expenses for the various activities of the City. Gaps between specific programs' revenues and their related expenditures are funded through general tax revenues. Revenues by Source - Governmental Activities Capital grants and Interest and contributions Investment Operating grants 3.88% earnings and contributions I 1.24% 4.70% Charges for Service 22.70% Excise taxes 11.22% Gains on disposition of assets Utility taxes, - 0.49% 7.43% ' Interfund utility-/ taxes 4.24% FProperty taxes 26.23% Sales taxes 16.88% Miscellaneous 0.99% Page 27 Packet Pg. 95 2.5.a Expenses and Program Revenues - Governmental Activities $1,828,406 I I I I Culture and recreation $4,682,914 I Mental and physical $157,393 I health $147,957 I $3,217,476 I Economic environment I $1,461,200 $1,818,388 Transportation 1II $4,885,398 IIII IIIIII $125 I IIII Utilities and environment $229 528 I I I I I I I I I I I I $3,749,544 I Public safety 1 I General government $6,641,160 I $16,103,089 1 $0 $5,000,000 $10,000,000 $15,000,000 $20,000,000 ■ Program Revenues Expenses Business -type Activities: $25,261,314 I I I I I I $25,000,000 $30,000,000 Business -type activities net position increased by $9.5 million, or 11.4%. A key component of this increase includes a sale of $13.9 million of Climate Bonds. The majority of net position in the City's enterprise funds relate to capital asset infrastructure, such as water and sewer mains, storm water infrastructure, and the wastewater treatment plant. As such, most of the net position is not available to support the ongoing expenses of the funds. The following chart depicts major sources of revenue for business -type activities: Expenses and Program Revenues - Business -Type Activities I I I I I I I I I I I I I I I I I I $10,223,8471 I I I Water I I I I $1,573,014 I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I $6,005,318 I I I I I Storm I I I I I $5,021,779 I I I I I I I I I I I i i I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I $16,587,51'11 Sewer 1 $10,93,526 I I I I I I I I I I I I I I I $0 $2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000 $14,000,000 $16,000,000 $18,000,000 ■ Program Revenues Expenses a+ Q Page 28 Packet Pg. 96 2.5.a Financial Analysis of the City's Funds As noted earlier, the City of Edmonds uses fund accounting to ensure and demonstrate compliance with finance -related legal requirements. Governmental funds The purpose of the City's governmental funds is to report on near -term revenues/financial resources and expenditures. This information helps determine the City's financial requirements in the near future. Specifically, fund balance is a good indicator of the City's financial resources. As of December 31, 2020, the City's governmental funds had combined fund balances of $34.5 million, a decrease of $1.6 million or 4.5% from 2019. Approximately 41.8% or $14.4 million of this amount constitutes unassigned General Fund balance, which is available for spending at the City Council's discretion, and $2 million is assigned for future development of Civic Park. The 2020 unassigned fund balance equals 33.3% of 2020 General Fund expenditures, indicating that the City is in a strong financial position. The remainder of the fund balance is restricted to indicate that it is not available for new spending because it has already been committed for debt service payments, public safety, transportation, recreation and other purposes. The General Fund, Fund 001, is the primary operating fund of the City. Primarily due to the effects of the COVID-19 pandemic, the 2020 fund balance experienced a decrease of $1.6 million or 8.5% from 2019. The following chart shows the relative fund balances for governmental funds: Governmental Funds - Fund Balance Special revenue funds 38.52% General fund 61.48% MWIPPIr Special revenue funds ■ General fund Proprietary funds The City of Edmonds' proprietary funds provide the same type of information found in the government -wide statements, but in more detail. Unrestricted net position of the combined utility funds at the end of the year amounted to $20.8 million, a $4.7 million decrease over 2019. The change in total net position for the three funds was a $9.5 million increase. General Fund Budgetary Highlights The City of Edmonds produces an annual budget document to fulfill the Community's vision for where City resources should be directed. The budget reflects the City Council's goals of maintaining long-term financial health and stability in the City's General Fund and reserves, while continuing the delivery of high -quality services to citizens. The original 2020 General Fund expenditure budget of $ 48.7 million was amended to include additional appropriations of $1.1 million, the majority of which was for building maintenance projects. A comparison of the actual performance of the General Fund on a budgetary basis to the final budget indicates that total budgeted revenues (excluding transfers) exceeded actual revenues by $1.6 million. This was primarily due to Page 29 Packet Pg. 97 2.5.a decreases in sales tax, development services, and cultural services revenues, largely as a result of the pandemic. Total actual expenditures were $3.4 million or 7.2% under budget, excluding transfers, in the General Fund. The under expenditures are mainly from reduced salaries and benefits due to a hiring freeze, a reduction in professional services and consultants, and reduced spending on large maintenance projects, mostly a result of the pandemic. Capital Asset and Debt Administration Capital Assets The City of Edmonds' investment in capital assets for governmental and business -type activities as of December 31, 2020 amounts to $144.6 million (net of accumulated depreciation), an increase of $17.7 million from 2019. This investment in capital assets includes land and construction in progress, which are not subject to depreciation. Other capital assets, including buildings, improvements other than buildings, infrastructure, machinery and equipment, and intangible assets, are subject to depreciation. Governmental type capital assets (net of depreciation) totaled $78.8 million in 2020, an increase of $3.5 million from 2020. Business -type capital assets (net of depreciation) totaled $114.0 million, an increase of $15.8 million from 2019. In addition to the effects depreciation, these changes are the result of capitalizing construction in progress, and acquisition of machinery and equipment. More information on the City's Capital Assets can be found in Note 9 - Capital Assets and Depreciation. A summary of the City's capital assets, net of accumulated depreciation, follows Governmental Activities As of 12/31/20 As of 12/31/19 Business -Type Activities As of 12/31/20 As of 12/31/19 Total As of 12/31/20 As of 12/31/19 (in thousands) Land $ 17,688 $ 17,688 $ 1,257 $ 1,257 $ 18,945 $ 18,945 Building 7,283 7,296 15,460 16,140 22,743 23,436 Improvements other than buildings 14,232 15,020 78,439 72,432 92,672 87,452 Infrastructure 26,640 27,786 26,640 27,786 Machinery and Equipment 5,113 5,131 492 537 5,604 5,668 Intangible Assets 0 0 29 31 29 31 Construction in Progress 7,836 2,376 18,295 7,755 26,132 10,131 Total $ 78,793 $ 75,297 $ 113,972 $ 98,152 $ 192,765 $ 173,449 Long-term Debt At the end of the current fiscal year, the City had total bonded debt outstanding of $61,492,987. Of this amount, $7,759,103 is general obligation bonds for governmental activities, $1,478,884 is general obligation bonds for business -type activities and $52,255,000 is revenue bonds for business -type activities for the City - operated utilities. The City currently maintains a rating of AA with Standard & Poor's and Aa3 with Moody's. The following schedule summarizes the City's long-term debt. For additional detailed information on long- term debt activity please see Notes 12 and 13. Governmental Activities Business -Type Activities Total As of 12/31/20 As of 12/31/19 As of 12/31/20 As of 12/31/19 As of 12/31/20 As of 12/31/19 General Obligation Debt $ 7,759,103 $ 8,595,125 $ 1,478,884 $ 1,738,359 $ 9,237,987 $ 10,333,484 Revenue Bonds - - 52,255,000 39,770,000 52,255,000 39,770,000 Notes from Direct Borrowing 318,283 390,484 1,576,283 1,556,398 1,894,566 1,946,882 Total $ 8,077,386 $ 8,985,609 $ 55,310,167 $ 43,064,757 $ 63,387,553 $ 52,050,366 Page 30 Packet Pg. 98 2.5.a Economic Factors and Next Year's Budgets Principal factors influencing the City's 2021 budget include continued improvement in sales tax and excise tax revenues stemming from the improving retail sales, sales of real estate, and construction activity in the City, and slow growth in the overall economy. The 2021 budget was adopted in December 2020 by the City Council. Our budget reflects the City Council's goals, maintains long-term financial health and stability of our General Fund and reserves, and despite the uncertainty around the economic effects of the pandemic, continues the delivery of high -quality services for our community. The 2021 budget includes these priorities: • $500,000 to begin implementation of a new Human Services Program • $50,000 to enhance our arts & culture through the Edmonds Center for the Arts • $50,000 for Equity Diversity training for all staff and board and commission members • $2.2 million for pedestrian safety improvements • $500,000 to start a new Open Space fund that will grow every year • $6.03 million for construction of Civic Park • $22.2 million for the Wastewater Carbon Recover Project • $900,000 for Daylighting of Willow Creek • $100,000 for a new Greenhouse • $875,000 for Highway 99 Revitalization • $2.6 million for the City's pavement overlay program Requests for Information The City's financial statements are designed to provide users with a general overview of the City's finances as well as to demonstrate the City's accountability to its citizens, investors, creditors, and other customers. If you have a question about this report, please contact the Finance Director, 121 Fifth Avenue North, Edmonds, Washington, WA 98020. Page 31 Packet Pg. 99 2.5.a City of Edmonds Statement of Net Position December 31, 2020 Primary Government component Unit Governmental Business -type Edmonds Public Facilites Activities Activities Total District ASSETS Current assets: Cash & equity in pooled investments $ 19,046,314 $ 12,133,991 $ 31,180,305 $ 101,256 Investments 10,894,660 8,321,570 19,216,230 - Taxes receivable 383,437 - 383,437 - Customer accounts 634,325 3,946,665 4,580,990 40,157 Court receivable 384,265 - 384,265 - Other receivable - - - 127,702 Interest on investments 324,317 151,255 475,572 - Due from other governments 4,195,707 3,245,586 7,441,293 165,039 Due from component unit 400,000 - 400,000 - Inventory of materials & supplies 53,158 148,899 202,057 5,270 Prepayments 59,523 Total current assets 36,316,183 27,947,966 64,264,149 498,947 Noncurrent assets: Restricted cash and cash equivalents 8,288,515 12,196,199 20,484,714 138,071 Due from component unit - long-term 3,400,552 - 3,400,552 - Restricted net pension asset 4,656,343 4,656,343 Investment in joint venture 1,766,977 - 1,766,977 - Depreciable capital assets (net) 53,268,149 94,419,813 147,687,962 6,845,623 Non Depreciable capital assets 25,524,853 19,552,190 45,077,043 3,607,031 Total noncurrent assets 96,905,389 126,168,202 223,073,591 10,590,725 Total assets 133,221,572 154,116,168 287,337,740 11,089,672 DEFERRED OUTFLOWS OF RESOURCES Deferred outflows of resources - Debt refunding 7,410 63,655 71,065 - Deferred outflows of resources - Pension 2,681,680 373,002 3,054,682 - Deferred outflows of resources - PFD - - - 143,489 Total deferred outflows of resources 2,689,090 436,657 3,125,747 143,489 Total assets and deferred outflows of resources 135,910,662 154,552,825 290,463,487 11,233,161 LIABILITIES Current liabilities: Accounts payable 2,334,643 3,117,700 5,452,343 162,261 Accrued wages 1,254,719 223,511 1,478,230 39,889 Internal balances (231,144) 231,144 - - Due to other governmental units - 307,896 307,896 - Othercurrentliabilities 206,158 582,697 788,855 - Accrued bond interest payable 17,206 155,892 173,098 4,635 Deposits payable - 6,148 6,148 28,255 Due within one year 2,739,127 2,335,214 5,074,341 703,509 Unearned Revenue - - - 468,131 Total current liabilities 6,320,709 6,960,202 13,280,911 1,406,690 Noncurrent liabilities: Pension liabilities 4,558,174 936,895 5,495,069 390,704 Total other post employment liability 8,365,221 - 8,365,221 - Due in more than one year 8,303,964 53,735,296 62,039,260 5,714,363 Total noncurrent liabilities 21,227,359 54,672,191 75,899,550 6,105,067 Total liabilities 27,548,068 61,632,393 89,180,461 7,511,747 DEFERRED INFLOWS OF RESOURCES Deferred inflows of resources - Debt refunding 103,485 18,244 121,729 - Deferred inflows of resources - Pension 2,433,890 369,459 2,803,349 - Deferred inflows of resources - PFD 108,664 Total deferred inflows of resources 2,537,375 387,703 2,925,078 108,664 Total liabilites and deferred inflows of resources 30,085,443 62,020,096 92,105,539 7,620,411 NET POSITION Net investment in capital assets 76,233,673 68,391,695 144,625,368 4,101,920 Restricted for: Customer Deposits - 6,148 6,148 - Debt Service - 3,290,576 3,290,576 985,585 Public Safety 74,303 - 74,303 - Transportation 3,220,074 - 3,220,074 - Economic Environment 86,073 - 86,073 - Social Services 78,441 - 78,441 - Culture and Recreation 8,129,745 - 8,129,745 - Other 10,363 - 10,363 - Pensions 4,656,343 - 4,656,343 - Unrestricted 13,336,204 20,844,310 34,180,514 (1,474,755) Total net position $ 105,825,219 $ 92,532,729 $ 198,357,948 $ 3,612,750 The notes to financial statements are an integral part of this statement Page 32 Packet Pg. 100 2.5.a City of Edmonds Statement of Activities For the Year Ended December 31, 2020 Page 1 of 2 Program Revenues Operating Grants and Capital Grants and Functions/Programs Expenses Charges for Services Contributions Contributions Primary government: Governmental activities: General government $ 16,103,089 $ 6,559,215 $ 81,945 $ Public safety 25,261,314 3,120,543 249,731 379,270 Utilities and environment 229,528 - 125 - Transportation 4,885,398 925,912 137,663 754,813 Economic environment 1,461,200 1,189,731 2,027,745 - Mental and physical health 147,957 157,393 - - Culture and recreation 4,682,914 681,990 122,142 1,024,274 Interest on long-term debt 146,808 - - - Total governmental activities 52,918,208 12,634,784 2,619,351 2,158,357 Business -type activities: Sewer Utility 10,930,526 11,855,940 17,884 4,713,687 Storm Utility 5,021,779 5,453,276 1,958 550,084 Water Utility 7,573,014 9,970,907 5,455 247,485 Total business -type activities 23,525,319 27,280,123 25,297 5,511,256 Total primary government $ 76,443,527 $ 39,914,907 $ 2,644,648 $ 7,669,613 Component Unit Edmonds Public Facilities District 2,501,386 1,689,533 898,873 130,806 Total component unit $ 2,501,386 $ 1,689,533 $ 898,873 $ 130,806 General revenues Property taxes Sales taxes Interfund utility taxes Utility tax Excise Taxes Interest and investment earnings Miscellaneous Gains on disposition of assets Transfers Total General revenues and Transfers Change in net position Net position - beginning Net position - ending The notes to financial statements are an integral part of this statement. Page 33 Packet Pg. 101 2.5.a Page 2 of 2 Net (Expense) Revenue and Changes in Net Position Primary Government Component Unit Governmental Business -type Edmonds Public Activities Activities Total Facilities District $ (9,461,929) (21,511,770) (229,403) (3,067,010) 1,756,276 9,436 (2,854,508) (146,808) (35,505,716) $ (9,461,929) (21,511,770) (229,403) (3,067,010) 1,756,276 9,436 (2,854,508) (146,808) (35,505,716) 5,656,985 5,656,985 983,539 983,539 2,650,833 2,650,833 9,291,357 9,291,357 (35,505,716) 9,291,357 (26,214,359) 14,599,185 14,599,185 9,397,119 9,397,119 2,359,529 2,359,529 4,133,662 4,133,662 6,248,492 - 6,248,492 691,210 165,842 857,052 552,738 3,544 556,282 273,183 - 273,183 731 (731) - 38,255,849 168,655 38,424,504 2,750,133 9,460,012 12,210,145 103,075,086 83,072,717 186,147,803 $ 105,825,219 $ 92,532,729 $ 198,357,948 217,826 217,826 600 11 611 218,437 3,394,313 $ 3,612,750 Page 34 Packet Pg. 102 2.5.a ASSETS Cash and cash equivalents Investments Property taxes receivable Customer accounts Interest on investments Court Receivable Interfund receivable Due from other governments Due from component unit Restricted cash and investments Total assets LIABILITIES Accounts payable Wages and benefits payable Interfund payables Other current liabilities Unearned revenues Total liabilities DEFERRED INFLOWS OF RESOURCES Deferred inflows of resources - property taxes Deferred inflows of resources - court receivable Total deferred inflow of resources Total liabilities and deferred inflows of resources FUND BALANCES (DEFICITS) Restricted Committed Assigned Unassigned Total fund balances (deficits) Total liabilities and fund balances (deficits) City of Edmonds Balance Sheet Governmental Funds December 31, 2020 Total Governmental General Fund Total Nonmajor Funds Funds $ 6,849,705 $ 8,833,297 $ 15,683,002 4,250,041 4,473,178 8,723,219 383,437 - 383,437 633,328 - 633,328 203,438 81,422 284,860 384,265 - 384,265 448,144 - 448,144 2,517,462 1,675,187 4,192,649 3,800,552 - 3,800,552 4,803,516 3,484,999 8,288,515 $ 24,273,888 $ 18,548,083 $ 42,821,971 $ 1,197,681 $ 1,062,071 $ 2,259,752 1,156,165 58,617 1,214,782 - 217,000 217,000 139,475 66,682 206,157 3,816,828 - 3,816,828 6,310,149 1,404,370 7,714,519 197,668 - 197,668 333,948 333,948 531,616 - 531,616 6,841,765 1,404,370 8,246,135 1,016,642 2,000,000 14,415,481 17,432,123 15, 084, 001 15, 084, 001 2,059,712 3,076,354 - 2,000,000 14,415,481 17,143,713 34,575,836 $ 24,273,888 $ 18,548,083 $ 42,821,971 The notes to financial statements are an integral part of this statement. Page 35 Packet Pg. 103 2.5.a CITY OF EDMONDS, WASHINGTON RECONCILIATION OF THE BALANCE SHEET TO THE STATEMENT OF NET POSITION GOVERNMENTAL FUNDS DECEMBER 31, 2020 Total governmental fund balances as reported on this statement $ 34,575,836 Amounts reported for governmental activities in the statement of net position are different because: Capital assets used in governmental activities are not financial resources and therefore not reported i n the funds. These assets consist of: Land $ 17,688,372 Construction in progress 7,836,481 Subtotal: Non -depreciable capital assets 25,524,853 Investment injointventure 1,766,977 Buildings 24,917,754 Improvements other than buildings 24,441,805 Infrastructure 65,186,618 Machinery and equipment -general government 10,562,344 Less: Accumulated depreciation (71,840,372) Subtotal: Depreciable capital assets 53,268,149 80,559,979 Other long-term assets are not available to pay for current -period expenditures and therefore a re deferred i n the funds. Net Pension Asset 4,656,343 Deferred outflow of resources - bond refunding 7,410 Deferred outflow of resources - pension ($66,465 attributable to internal service funds) 2,681,680 Deferred inflow of resources - property tax 197,668 Deferred inflow of resources - court receivable 333.948 7,877,049 1 nterna I servi ce funds a re used by ma nagement to cha rge the cost of equi pment maintenance to individual funds. The assets and liabilities of these internal service funds are included in governmental activities in the statement of net position. Capital assets of $4,746,702 are included in the capital asset adjustment above. The compensated absence liability and the pension amounts are included in the appropriate categories with a note. 5,516,594 Some liabilities are not due and payable in the current period and therefore are not reported in the funds. General obligation bonds (8,045,000) Compensated absences ($131,856 attributable to internal service funds) (2,495,038) Public works trust fund loans (318,283) Nonexchange Financial Guarantee (184,770) Subtotal: Long-term debt payable (11,043,091) Accrued interest payable (17,206) Total pension liabilities ($189,624 attributableto internal service funds) (4,558,174) Total other post employment benefit liability (8,365,221) Deferred inflow of resources -bond refunding (103,485) Deferred inflow of resources - pension ($53,868 attributable to internal servicefunds) (2,433,890) Unearned revenues reported in the BalanceSheet- Governmental Funds are not reported in the government -wide Statement of Net Position (Note 1) 3,816,828 (22,704,239) Net position of government activities as reported on the statement of net position $ 105,825,219 The notes to the financial statements are an integral part of this statement Page 36 Packet Pg. 104 2.5.a City of Edmonds Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds For the Year Ended December 31, 2020 REVENUES Taxes Licenses and permits Intergovernmental Charges for services Fines and forteitures Investment earnings Contributions Miscellaneous Total revenues EXPENDITURES Current: General government Public safety Utilities and environment Transportation Economic environment Mental and physical health Culture and recreation Debt service: Principal Interest Capital outlay: General government Transportation Culture and recreation Total expenditures Excess (deficiency) of revenues over expenditures OTHER FINANCING SOURCES (USES) Insurance Recoveries Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balances - beginning Fund balances - ending Total Nonmajor Total Governmental General Fund Funds Funds $ 30,738,452 $ 4,532,144 $ 35,270,596 2,276,861 94,932 2,371,793 1,633,633 4,425,431 6,059,064 5,412,044 1,573,972 6,986,016 287,693 - 287,693 265,629 252,705 518,334 125 - 125 322,816 689,584 1,012,400 40,937,253 11,568,768 52,506,021 12, 879, 778 1,775,500 14, 655, 278 23,759,212 30,332 23,789,544 - 180,098 180,098 5,012 3,380,404 3,385,416 1,675,334 68,152 1,743,486 147,957 - 147,957 3,732,644 492,697 4,225,341 163,840 744,383 908,223 132,784 100,588 233,372 825,995 - 825,995 - 857,396 857,396 9,053 4,602,811 4,611,864 43, 331, 609 12, 232, 361 55, 563, 970 (2,394,356) (663,593) (3,057,949) 16,977 - 16,977 1,535,800 945,198 2,480,998 (776,990) (203,277) (980,267) 775,787 741,921 1,517,708 (1,618,569) 78,328 (1,540,241) 19,050,692 17,065,385 36,116,077 $ 17,432,123 $ 17,143,713 $ 34,575,836 The notes to financial statements are an integral part of this statement. Page 37 Packet Pg. 105 2.5.a CITY OF EDMONDS, WASHINGTON RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENT FUNDS TO THE STATEMENT OF ACTIVITIES FOR THE YEAR ENDED DECEMBER 31, 2020 Net change in fund balances perthe Statement of Revenues, Expenditures and Changes in Fund Balance $ (1,540,241) Amount reported as change in net position in the Statement of Activities are different because: Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated ove r thei r esti mated useful lives and reported as depreciation expense. This is the amount bywhich capital outlay is exceeded by depreciation and amortization in the current period. Capital outlays $ 6,362,362 Current year depreciation (2,905,604) Adjustment in investment in jointventure 59,800 3,516,558 Revenues in the Statement of Activities thatdo not provide current financial resources are not reported as revenues in the funds: Deferred inflows of resources - propertytaxes (30,059) PFD Debt Service (426,233) PFD Nonexchange Financial Guarantee 184,768 Other unearned revenue (17,704) LEOFF 2 Pensions 221,305 Court receivable (20,256) (88,179) Bond proceeds provide current financial resources to governmental funds, but issuing debt increases long-term liabilities in the statement of net position. Repayment of long-term debt is an expenditure in the governmental funds, yet the repayment reduces long-term liabilities in the statement of net position. This is the amount bywhich repayments exceeded proceeds. Amortization of Bond Refunding 23,220 Long-term debt repayments 908,223 931,443 Internal service funds are used by management to charge the costs of equipment rental to individual funds. The net revenue (expense) of this internal service fund is reported with governmental activities. (848,645) Some expenses reported in the Statement of Activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds. Accrued Interest Expense 2,175 Loss on Sale of Assets 58,135 Interest Expense forthe PFD 60,592 Total pension obligation 994,934 Accrued compensating absence expense (336,638) 779,197 Change in net position on the Statement of Activities $ 2,750,133 The notes to the financial statements are an integral partofthis statement. Page 38 Packet Pg. 106 2.5.a City of Edmonds GENERALFUND Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended December 31, 2020 REVENUES Taxes Licenses and permits Intergovernmental Charges for services Fines and forteitures Investment earnings Miscellaneous Total revenues EXPENDITURES C u rre nt: General government Public safety Transportation Economic environment Mental and physical health Culture and recreation Total current Debt service: Principal Interest Total debt service Capital outlay: General government Public safety Culture and recreation Total capital outlay Total expenditures Budgeted Amounts Variance with Original Final Actual Final Budget $31,180,588 $31,180,588 $ 30,738,452 $ (442,136) 2,260,730 2,260,730 2,276,861 16,131 947,060 1,196,697 1,633,633 436,936 6,418,500 6,418,500 5,412,044 (1,006,456) 542,940 542,940 287,693 (255,247) 560,740 560,740 265,629 (295,111) 414,450 416,112 322,941 (93,171) 42,325,008 42,576,307 40,937,253 (1,639,054) 12,531,117 13,258,328 12,879,778 378,550 24,878,421 25,130,563 23,759,212 1,371,351 5,000 5,000 5,012 (12) 1,946,846 1,954,673 1,675,334 279,339 159,985 241,002 147,957 93,045 4,606,451 4,739,555 3,732,644 1,006,911 44,127,820 45,329,121 42,199,937 3,129,184 168,850 168,850 163,840 5,010 137,750 137,750 132,784 4,966 306,600 306,600 296,624 9,976 1,025,000 1,025,000 825,995 199,005 23,120 23,120 - 23,120 - 9,053 9,053 - 1,048,120 1,057,173 835,048 222,125 45,482,540 46,692,894 43,331,609 3,361,285 Excess (deficiency) of revenues over expenditures (3,157,532) (4,116,587) (2,394,356) 1,722,231 OTHER FINANCING SOURCES (USES) Insurance Recoveries - - 16,977 16,977 Transfers in 1,978,200 1,978,200 1,535,800 (442,400) Transfers out (3,256,870) (3,266,993) (776,990) 2,490,003 Total other financing source (uses) (1,278,670) (1,288,793) 775,787 2,064,580 Net change in fund balances (4,436,202) (5,405,380) (1,618,569) 3,786,811 Fund balances - beginning 16,941,743 19,050,691 19,050,692 1 Fund balances - ending $12,505,541 $13,645,311 $ 17,432,123 $ 3,786,812 The notes to the financial statements are an integral part of this statement. Page 39 Packet Pg. 107 2.5.a City of Edmonds Statement of Net Position Proprietary Funds December 31, 2020 Governmental Activities 421/422/423 Combined Utility Internal Service Funds Funds ASSETS Current assets: Cash and cash equivalents $ 12,133,991 $ 3,363,313 Investments 8,321,570 2,171,444 Customer accounts 3,946,665 997 Interest on investments 151,255 39,458 Due from other governments 3,245,586 3,058 Inventory 148,899 53,158 Tota I current assets 27,947,966 5,631,428 Noncurrent assets: Restricted cash and investment 12,196,199 - Land 1,257,107 - Property, plant and equipment (net) 94,390,901 4,671,836 Construction in progress 18,295,083 74,866 Intangible assets (net) 28,912 - Total noncurrent assets 126,168,202 4,746,702 Total assets 154,116,168 10,378,130 DEFERRED OUTFLOWS OF RESOURCES Deferred outflows of resources -refunding 63,655 - Deferred outflows of resources - pension 373,002 66,465 Total deferred outflows of resources 436,657 66,465 Total assets and deferred outflows of resources 154,552,825 10,444,595 LIABILITIES Current liabilities: Accounts payable 3,117,700 74,892 Wages and benefits payable 223,511 39,937 Interfund payables 231,144 - Due to other governmental units 307,896 Other current liabilities 588,845 Interest payable 155,892 Compensated absences - current 343,218 Loans payable - current 253,302 Revenue bonds payable -current 1,475,475 G.O. bonds payable - current 263,219 - Total current liabilities 6,960,202 114,829 Noncurrent liabilities: Compensated absences - long-term 68,932 131,856 Pension liabilities 936,895 189,624 Loans payable -long-term 1,322,981 - Revenue bonds payable - long-term 51,127,718 G.O. bonds payable - long-term 1,215,665 - Total noncurrent liabilities 54,672,191 321,480 Total liabilities 61,632,393 436,309 DEFERRED INFLOWS OF RESOURCES Deferred inflows of resources - refunding 18,244 - Deferred inflow of resources - pension 369,459 53,868 Total deferred inflows of resources 387,703 53,868 Total liabilities and deferred inflows of resources 62,020,096 490,177 NET POSITION Net investment in capital assets 68,391,695 4,671,836 Restricted for: Customer Deposits 6,148 - Debt Service 3,290,576 - Unrestricted 20,844,310 5,282,582 Total net position $ 92,532,729 $ 9,954,418 The notes to financial statements are an integral part of this statement. Page 40 Packet Pg. 108 2.5.a City of Edmonds Statement of Revenues, Expenses, and Changes in Net Position Proprietary Funds For the Year Ended December 31, 2020 OPERATING REVENUES Charges for services Other operating revenue Total operating revenues OPERATING EXPENSES Personnel services Operations and maintenance Professional services Insurance Depreciation Total operating expenses Operating income (loss) NONOPERATING REVENUES (EXPENSES) Intergovernmental Investment earnings Judgments and settlements Gain (loss) on sale of capital assets Interest expense Total nonoperating revenues (expenses) Income (loss) before contributions and transfers Operations and maintenance Professional Services Capital grants and contributions Transfers Out Change in net position Total net position - beginning Total net position - ending Business -type Governmental Activities Activities 421/422/423 Combined Utility Internal Service Funds Funds $ 27,072,814 $ 2,694,759 210,853 14 27,283,667 2,694,773 4,595,477 726,177 10,979,846 915,644 956,140 75,442 344,984 43,001 4,029,768 642,948 20,906,215 2,403,212 6,377,452 291,561 25,297 72,546 165,842 163,509 - 61,566 (821,659) 64,798 (1,739,008) - (2,369,528) 362,419 4,007,924 653,980 (3,175) (2,625) (55,262) - 5,511,256 - (731) (1,500,000) 9,460,012 (848,645) 83,072,717 10, 803, 063 $ 92,532,729 $ 9,954,418 The notes to financial statements are an integral part of this statement. Page 41 Packet Pg. 109 2.5.a City of Edmonds Statement of Cash Flows Proprietary Funds Forthe Year Ended December 31, 2020 CASH FLOWS FROM OPERATING ACTIVITIES Cash receipts from customers Payments to employees Payments to suppliers Net cash provided (used) by operating activities CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Grant income Proceeds of refunding debt Net cash provided (used) by noncapital financing activities CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Gain from the sale of capital assets Judgments and settlements Acquisition and construction of capital assests Professional Services Capital grants and contributions Operations and maintenance Principal payments on debt Interest payments on debt Transfers to other funds Net cash provided (used) by capital and related financing activities CASH FLOWS FROM INVESTING ACTIVITIES Investment income Purchase of investments Net cash provided (used) by investing activities Net increase (decrease) in cash and cash equivalents Balances - beginning of year Balances - end of the year The notes to financial statements are an integral part of this statement. Business -type Governmental Artiviti— Artivitiac 411/41Z/413 Combined Utility Internal Service Flinn, Funric $ 24,057,207 $ 2,691,188 (4,867,377) (769,180) (9,490,710) (981,729) 9,699,120 940,279 25,297 13,875,000 13,900,297 122,464 61,566 (20,680,034) (682,060) (55,262) - 5,511,256 72,546 (3,175) (2,625) (1,822,173) (1,708,074) (731) (1,500,000) (18,758,193) (1,928,109) 151,140 159,485 4,756,025 938,709 4,907,165 1,098,194 9,748,389 110,365 14_1;R1 _Rn1 3.757_g4R ,l. L4,SSV, lyU .; 3,3b3,313 Page 42 Packet Pg. 110 2.5.a City of Edmonds Statement of Cash Flows Proprietary Funds For the Year Ended December 31, 2020 Reconciliation of operating income (loss) to net cash provided (used) by operating activities: Operating Income Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation Changes in assets and liabilities: Customer Receivables Accounts Payable - Supplier Payroll Liabilities Net cash provided (used) by operating activities The notes to financial statements are an integral part of this statement. Business -type Governmental Activities Activities 421/422/423 Combined Utility Internal Service Funds Funds $ 6,377,452 $ 291,561 4,029,768 642,948 (3,226,460) (3,585) 2,790,260 52,358 (271,900) (43,003) $ 9,699,120 $ 940,279 r Q Page 43 Packet Pg. 111 2.5.a City of Edmonds Statement of Fiduciary Net Position December 31, 2020 ASSETS Cash and cash equivalents Total assets LIABILITIES Accrued expenses Total liabilities NET POSITION Net position restricted for pensions Net position restricted for custodial funds Total net position Firemen's Swat Custodial Pension Fund Fund $141,787 $31,565 141,787 31,565 6,672 6,672 - 135,115 - - 31,565 $ 135,115 $ 31,565 The notes to financial statements are an integral part of this statement. Page 44 Packet Pg. 112 2.5.a City of Edmonds Statement of Changes in Fiduciary Net Position For the Year Ended December 31, 2020 ADDITIONS Contributions: Employer contributions State shared revenue -distribution of fire insurance premiums Total contributions Intergovernmental Investment earnings Miscellaneous Total additions DEDUCTIONS Benefits paid to retirees Administrative expenses Swat Supplies Total deductions Change in net position Net Position -- beginning of the year Net Position -- end of the year Firemen's Swat Custodial Pension Fund Fund $ 15,000 $ - 51,491 - 66,491 - 355,644 3,897 - - 1,056 70,388 356,700 80,998 - 1,007 - - 358,322 82,005 358,322 (11,617) (1,622) 146,732 33,187 $ 135,115 $ 31,565 The notes to financial statements are an integral part of this statement. a R 3 0 0 U_ m U c m L 0 U x w =a 0 Q c /L^ V 0 Lm a� U_ =a 0 c� N N N T M 0 a c 0 E 0 w c m E U a r r Q Page 45 Packet Pg. 113 2.5.a CITY OF EDMONDS NOTES TO THE FINANCIAL STATEMENTS NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The financial statements of the City of Edmonds 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. The significant accounting policies are described below. A. Reporting Entity The City of Edmonds was incorporated in 1890 and operates under the laws of the state of Washington applicable to cities. Edmonds operates with a Council/Mayor form of government. Both the Mayor and Council are elected to four-year terms. The City provides a full range of general government services including public safety; streets; parks and recreation; planning and zoning; permits and inspection; general administration; and water, sewer, storm water and wastewater treatment utilities. As required by Generally Accepted Accounting Principles the financial statements present the City of Edmonds, the primary government, and its component unit. The component unit discussed below is included in the City's reporting entity because of the significance of their operational and financial relationships with the City. Discretely Presented Component Unit On April 24, 2001 the Edmonds City Council formed the Edmonds Public Facilities District (PFD) via Ordinance 3358, under the authority provided by RCW 35.57. The purpose of the PFD is to construct and operate a regional arts center in the City of Edmonds, defined by RCW 35.57 as a conference, convention or special events center, along with related parking. A five -member board governs the PFD and is appointed to four-year terms by the Edmonds City Council. The PFD has authority under state law to issue debt, levy certain taxes, and enter into contracts. In 2002 the City issued Limited Tax General Obligation Bonds in the amount of $7,015,000 for the acquisition, renovation and remodeling of a Performing Arts Center. The City transferred the proceeds of this issuance to the PFD. The City refinanced these bonds in 2012. These bonds are a debt of the City and not the PFD; however, the PFD is obligated by inter -local agreement to pay the entire amount of the PFD's portion of the debt service over the life of the bonds. For more information on the Edmonds Public Facility District see Note 12, Long -Term Debt. Separate financial statements can be obtained from the Edmonds Center for the Arts, c/o Joe Mclalwain, 410 Fourth Avenue N., Edmonds, WA 98020. Joint Ventures The City of Edmonds participates in two separate joint ventures: Snohomish County 911 The City of Edmonds and other Police and Fire entities jointly operate Snohomish County 911. Snohomish County 911, a cash basis, special purpose district, was created under the Interlocal Cooperation Act, as codified in RCW 39.34. This established the statutory authority necessary for Snohomish County, cities, towns, fire districts, police districts and other service districts to enter into a contract and agreement to jointly establish, maintain and operate a support communications center. Control of Snohomish County 911 is with a 16 member Board of Directors which is specified in the Interlocal Agreement. Snohomish County 911 takes 911 calls and performs emergency dispatch services for local governmental agencies including police, fire, and medical aid. In the event of the dissolution of Snohomish County 911, any money in the possession of Page 46 Packet Pg. 114 2.5.a Snohomish County 911 or the Board of Directors after payment of all costs, expenses and charges validly incurred shall be returned to the parties to this agreement and shall be apportioned between Principals based on the ratio that the average of each Principals' contributions to the operating budget over the preceding five years bears to the total of all then remaining Principals' User Fees paid during the five year period. Before deducting the payment of all costs, expenses, and charges validly incurred, the City of Edmonds share was $1,766,977 on December 31, 2020. Snohomish County 911's 2020 operating budget was $24,575,191, operating revenues received were $24,285,981, and total operating expenditures were $23,917,807. Complete financial statements for Snohomish County 911 can be obtained from their administrative office at 1121 SE Everett Mall Way, Suite 200, Everett, WA 98208. The Alliance for Housing Affordability (AHA) In September 2013, the City of Edmonds joined the cities of Everett, Granite Falls, Lake Stevens, Lynnwood, Marysville, Mill Creek, Mountlake Terrace, Mukilteo, and Snohomish, the Town of Woodway, and Snohomish County to establish the Alliance for Housing Affordability (AHA). The agreement was amended in May, 2014 to add the City of Arlington and in June, 2014 to add the City of Stanwood. The purpose of AHA is to cooperatively formulate affordable housing goals and policies and to foster efforts to provide affordable housing by providing expertise and information to member jurisdictions. Operating funding is provided by member cities. AHA is governed by a Joint Board composed of an elected official from each member. The Joint Board is responsible for review and approval of all budgetary, financial, policy, and contractual matters. The Board is assisted by an administrative staff housed at the Housing Authority for Snohomish County (HASCO). Fiscal agent duties were transferred to HASCO during fiscal year 2018. The values included in the table below were audited and updated by the new fiscal agent and may be different than what was reported in previous years. Each member city is responsible for contributing operating revenues as determined from the AHA annual budget. Contributions from the member cities are based on each member's population. A grant from the Gates Foundation provided $50,000 to assist with the first two years of organizational start-up. The City of Edmonds equity share to date is: AHA's Total Edmonds Share Fiscal Year Fiscal Year Edmonds Share as % of Total Ending 6/30 Budget of Budget AHA Budget 2015 $ 93,063 $ 2,457 2.6% 2016 $ 43,652 $ 2,381 5.5% 2017 $ 97,934 $ 3,518 3.6% 2018 $ 102,586 $ 3,841 3.7% 2019 $ 107,391 $ 4,120 3.8% 2020 $ 112,408 $ 4,344 3.9% 2021 $ 117,673 $ 4,368 3.7% Members withdrawing from the agreement relinquish all rights to any reserve funds, equipment, or material purchased. Upon dissolution, the agreement provides for distribution of net assets among the members based on the percentage of the total annual contributions during the period of the Agreement paid by each member. Budget monitoring information can be obtained from Pam Frost, Director of Finance, HASCO, 12711 41" Ave W, Everett WA 982014 (or email: pfrost@hasco.org) or from Chris Collier, Program Manager, Alliance for Housing Affordability, 12711 41" Ave W, Everett WA 98204. Page 47 Packet Pg. 115 2.5.a B. Basis of Presentation — 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 nonfiduciary activities of the primary government and its component unit. 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. Likewise, the primary government is reported separately from a legally separate component unit for which the primary government is financially accountable. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Our policy is to allocate indirect costs to a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Internally dedicated resources are reported as general revenues rather than program revenues. Taxes and other items not properly included among program revenues are reported as general revenues. The effect of interfund activity has been eliminated from the government -wide financial statements. Exceptions are charges between the government's water and sewer function and other functions of the government. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter 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. The City reports one major governmental fund, the General Fund. The General Fund is the City's operating fund. It accounts for all financial resources of the general government, except those required or elected to be accounted for in another fund. The City also reports one major enterprise fund. The Combined Utility Fund accounts for all maintenance, construction, and debt service requirements associated with the City's water, sewer, and stormwater systems. The City has two Internal Service Funds. The Equipment Rental Fund accounts for the cost of maintaining the City's vehicle fleet. The Technology Rental Fund accounts for the cost of Information Technology equipment repair and replacement. The City has two Fiduciary Funds. The Firemen's Pension Fund is used to account for payment of administrative costs and benefits for retired firefighters who were employed prior to March 1, 1970. The North Sound Metro Special Weapons and Tactics Team (SWAT) is a Custodial Fund that accounts for the administration and bookkeeping for a regional SWAT team. The City signed an interlocal agreement with surrounding cities in 2013 to form a SWAT team, and the City of Edmonds Police Department was designated as the host Police Department and is responsible for the holding of funds. C. Measurement Focus, Basis of Accounting Government -Wide and Governmental Funds The government -wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, similar to the proprietary and fiduciary fund 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 revenue Page 48 Packet Pg. 116 2.5.a in the year in which they are levied. Grants and similar items are recognized as revenue as soon as 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 most revenues to be available if they are collected within 30 days of the end of the current fiscal period. The City considers property taxes, sales taxes, natural gas taxes and Hotel/Motel excise taxes as available if they are collected within 60 days after year end. Expenditures generally are recorded when a liability is incurred, as 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. All other revenue items are considered to be measurable and available only when cash is received. Proprietary Funds The proprietary fund statements are reported using the economic resources measurement focus and full -accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred regardless of the timing of the cash flows. 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. The principal operating revenues of the City's Combined Utility Funds are charges to customers for sales and service. The City also recognizes as operating revenue the portion of utility connection fees intended to recover the cost of connecting new customers to the water and sewer systems. Operating expenses for enterprise funds include operating and maintenance costs, employee salaries and benefits, contracted services, insurance, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non -operating revenues and expenses. D. Budgetary Information Scope of Budget Annual appropriated budgets are adopted for general fund and special revenue funds on the modified accrual basis of accounting. Budgets for debt service and capital projects funds are adopted at the level of the individual debt issue or project and for fiscal periods that correspond to the lives of debt issues or projects. Budgets for the General Fund and Special Revenue Funds are adopted at the Fund level. Purely as a management tool, budgets are broken out by department, activity and expense types. Appropriations for the General and Special Revenue funds lapse at year-end, except for appropriations for capital outlays, which are carried forward from year to year until fully expended or the purpose of the appropriation has been accomplished or abandoned. Amending the Budget The Mayor is authorized to transfer budgeted amounts between departments or between object classes within any department; however, any revisions that alter the total expenditures of a fund, or that affect the number of authorized employee positions, salary ranges, hours, or other conditions of employment must be approved by the City Council. When the Council determines that it is in the best interest of the City to increase or decrease the appropriation for a particular fund or department, it may do so by ordinance approved by one more than the majority after holding a public hearing. Page 49 Packet Pg. 117 2.5.a The budget amounts shown in the financial statements are the final authorized amounts as revised during the year. 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 supplemental appropriations and other legally authorized changes applicable for the fiscal year. E. Assets, Liabilities, Fund Balance, Net Position Cash and Cash Equivalents It is the City's policy to invest all temporary cash surpluses. The City considers all highly liquid assets, including investments in the Washington State Local Government Investment Pool, the Snohomish County Investment Pool, and short-term investments with a maturity of three months or less when purchased to be cash equivalents. 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. For purposes of the statement of cash flows, the City considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. For more information on investments, see Note 3, Deposits and Investments. Receivables Taxes receivable consist of property taxes and related interest and penalties (See Note 4, Property Taxes). Accrued interest receivable consists of amounts earned on investments, notes, and contracts at the end of the year. Customer accounts receivable consist of amounts owed by private individuals and organizations for goods and services including amounts owed for which billings have not been prepared. Notes and contracts receivable consist of amounts owed on open account from private individuals or organizations for goods and services rendered. Receivables are shown net of allowances for uncollectible accounts. Amounts Due To/From Other Funds and Governments, Interfund Loans and Advances Receivable Activities between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either interfund loans receivable/payable or advances to/from other funds. All other outstanding balances between funds are reported as due to/from other funds. Any residual balances outstanding between the governmental activities and business -type activities are reported in the government -wide financial statements as internal balances. A separate schedule of interfund loans receivable and payable is furnished in Note 7, Interfund Activity. 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. Inventories Inventories are assets that are held for internal consumption or resale. The combined utility fund inventories are expensed as consumed, using the first -in, first -out valuation method, which approximates market. Internal service fund inventories are expensed when purchased. A physical inventory is taken at year-end. No inventory is maintained in Governmental Funds; however, the Internal Service fund inventories are included in the "Governmental Activities" on the Statement of Net Position. Restricted Assets These accounts contain resources for construction and debt service in enterprise funds. Specific debt service reserve requirements are described in Note 13, Long -Term Debt and certain cash and investments have been classified as restricted assets on the Statement of Net Position in accordance with utility bond resolutions, state law, or for other purposes. When both restricted and Page 50 Packet Pg. 118 2.5.a unrestricted resources are available for use, it is the City's policy to use restricted resources first, then unrestricted resources as they are needed. Capital Assets Capital assets, which include property, plant, and 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 that meets or exceeds $5,000, and an estimated useful life in excess of one year. Infrastructure assets are capitalized when their cost meets or exceeds $50,000, and repairs or replacements to components of the Wastewater Treatment Plant are capitalized when their cost meets or exceeds $100,000. Costs for additions or improvements to capital assets are capitalized when they increase an asset's value, capacity, or materially extends its useful life. The costs for normal maintenance and repairs are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Land, permanent artwork, and construction in progress are not depreciated. Buildings, equipment, non -building improvements and intangible assets are depreciated using the straight-line method using varying estimated service lives for individual assets and asset classifications, depending on particular characteristics of an asset and factors surrounding its anticipated use. See Note 9 for additional information regarding capital assets. The average service lives used to calculate depreciation for specific categories of assets are summarized below: Asset Type Buildings Improvements other than Buildings Furniture and fixtures Cars Vans, Trucks, Trailers Data Processing Equipment Infrastructure Sidewalks Machinery and Equipment Intangible Assets Est. Service Life (Years) 30-50 20-40 5-10 5-10 5-20 3-10 20-100 30 5-20 20-30 Deferred Outflows/Inflows of Resources In addition to assets, the Statement of Net Position will sometimes report a separate section for deferred outflows of resources. This represents a consumption of net position that applies to future periods and will not be recognized as an outflow of resources (as either an expense or expenditure) until that period. The City has two items that qualify for reporting in this category: 1) deferred gains on refunding and 2) pensions. Deferred gains on refunding reported in the statement of net position results from the difference in the carrying value of refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt. The second item is related to pensions and affects both assets and liabilities. The City's fiscal year ends on December 31, while the State's fiscal year ends on June 30. This causes the recognition periods for pension contributions to not match, resulting in the recognition of Deferred Outflows and Deferred Inflows to account for the City's pension contributions. In addition to liabilities, the Statement of Net Position and the Governmental Fund Balance Sheet will sometimes report a separate section for deferred inflows of resources. This represents an acquisition of net position that applies to future periods and will not be recognized as an inflow of resources (revenue) until that period. The City has four items that qualify for reporting in this category: 1) unavailable property taxes recorded as receivables, 2) unavailable court fees recorded Page 51 Packet Pg. 119 2.5.a as a receivable, 3) deferred losses on refunding, and 4) pensions and other post -employment obligations, as explained above. Compensated Absences Compensated absences are absences for which employees will be paid, such as vacation and sick leave, and holiday earned by police employees, according to the terms of union contracts or per RCW. Also included is compensatory time earned in lieu of overtime. All such compensated absences are accrued when incurred in the government -wide, proprietary, and fiduciary fund financial statements, and are payable upon termination, retirement or death. Compensated absences including payroll taxes are reported as a current liability on the balance sheet. Actual balances are accrued for all types of compensated absences except sick leave, the liability for which is estimated using the termination method provided by GASB Statement No. 16. Pensions For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of all state sponsored pension plans and additions to/deductions from those plans' fiduciary net position have been determined on the same basis as they are reported by the Washington State Department of Retirement Systems. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. Other Accrued Liabilities Employees earn vacation pay based on their years of service, and may carry over accruals of up to two years' accumulated leave from one year to the next. Unused vacation leave at time of termination, retirement or death is considered vested and payable to the employee. Unused sick leave is paid out upon termination, retirement or death based on a percentage of the employee's accumulated sick leave, in accordance with the terms of their union contract, or in accordance with Edmonds City Code Chapter 2.35. Unearned Revenues This account includes amounts recognized as receivables but not revenues in governmental funds because the revenue recognition criteria have not been met. Fund Balance Classification The difference between fund Assets and Deferred Outflows of Resources, minus its Liabilities and Deferred Inflows of Resources, is referred to as Net Position on the government -wide, proprietary, and fiduciary fund statements, and as Fund Balance on the governmental fund statements. The fund balance amounts for governmental funds are classified in accordance with GASB Statement No. 54, and are reported as non -spendable, restricted, committed, assigned, or unassigned. • Non -spendable fund balance represents amounts that are either not in a spendable form (e.g. inventories or prepaid balances) or are legally or contractually required to remain intact. • Restricted fund balances include amounts that have constraints placed upon their use by constitution, external resource providers, or through enabling legislation. • Committed fund balances include amounts that are limited by resolution of the City Council. A resolution must be taken to impose limitations on the use of these resources, and another resolution is required to modify or eliminate those limitations. • Assigned fund balances include amounts that are intended by the Mayor or department Directors for an intended use, but are neither restricted nor committed. This type of Page 52 Packet Pg. 120 2.5.a limitation can be imposed by the highest levels of decision making within the City, but little or no formal action is required to modify or eliminate those limitations. • Unassigned fund balance is the residual amount of the general fund not included in the four categories described above. Also, any deficit fund balances within the other governmental fund types are reported as unassigned. When both restricted and unrestricted fund balances are available for use, the City considers restricted fund balance to have been spent first. When committed, assigned, or unassigned fund balance amounts are available for use, the City considers committed fund balance to be spent first, assigned fund balance second, and unassigned fund balance last. F. Revenues, Expenditures and Expenses The modified accrual basis of accounting is followed in all governmental funds of the City. Under the modified accrual basis of accounting: Charges for services, interest on investments, and rents generally are considered measurable and available when earned in governmental funds. Taxes and federal or state entitlements or shared revenues that have been collected but not remitted by an intermediary collection agency to the City are considered measurable and available. Grants are considered measurable and available to the extent that expenditures have been incurred. Other intergovernmental revenues are considered measurable and available when earned. Interfund revenues for goods and services are considered measurable and available when earned. Proceeds from the disposal of capital assets are recognized as other financing sources. Revenues from taxpayer -assessed taxes (e.g. sales tax), net of estimated refunds, are recognized when measurable and available to finance expenditures of the current period. All other revenues are either not measurable or considered not available until collected. Expenditures are generally recognized when incurred, except for principal and interest on general long-term debt, which are reported as expenditures when paid, and compensated absences, which are reported as expenditures when liquidated from expendable available financial resources. The accrual basis of accounting is followed in all proprietary and fiduciary funds. Under the accrual basis of accounting: Revenues are recognized when earned and expenses are recognized when incurred. Contributions of capital in proprietary fund financial statements arise from internal and external contributions of capital assets or from grants or outside contributions of resources restricted to capital acquisition and construction. Transfers between government and business -type activities on the government - wide statement of activities are reported as general revenues. Transfers between funds reported in the governmental activities column are eliminated, as are transfers between funds reported in the business -type activities column. G. Estimates The preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates. Page 53 Packet Pg. 121 2.5.a NOTE 2 — ACCOUNTING AND REPORTING CHANGES Reporting Changes — Effective for fiscal year 2020 reporting, the City adopted the following new standards issued by the Governmental Accounting Standards Board (GASB): GASB Statement No. 84, Fiduciary Activities — improves financial reporting by establishing criteria for identifying fiduciary activities that meet the criteria of whether a government controls the assets of the fiduciary activity and the beneficiaries with whom a fiduciary relationship exists. This Statement describes four fiduciary funds that should be reported, if applicable as 1) pension (and other employee benefit) trust fund, 2) investment trust funds, 3) private -purpose trust funds, and 4) custodial funds. The City reports two fiduciary funds. (See Fiduciary Fund Statements) Any applicable provisions of this Statement have been adopted and incorporated into these financial statements. GASB Statement No. 88, Certain Disclosures Related to Debt, including Direct Borrowings and Direct Placements — improves financial reporting by providing users of financial statements with essential information, including unused lines of credit, assets pledged as collateral for debt, and terms specified in debt agreements related to significant events of default with finance -related consequences, significant termination events with finance -related consequences, and significant subjective acceleration clauses. This Statement also requires that existing and additional information be provided for direct borrowings and direct placements of debt separately from other debt. Any applicable provisions of this Statement have been adopted and incorporated into these financial statements. GASB Statement No. 90, Majority Equity Interests — improves financial reporting by improving the consistency and comparability of reporting a government's majority equity interest in a legally separate organization, and to improving the relevance of financial statement information for certain component units. Any applicable provisions of this Statement have been adopted and incorporated into these financial statements. GASB Statement No. 95, Postponement of the Effective Dates of Certain Authoritative Guidance — provides temporary relief to governments in light of the COVID-19 pandemic. This Statement postponed the effective dates of certain provisions in Statements and Implementation Guides that first became effective for periods beginning after June 15, 2018, and later. The City recognized this Statement for fiscal year 2020 reporting. This Statement has no impact on the financial statements or notes in this report, it only affects the required implementation date of other GASB Statements. NOTE 3 — DEPOSITS AND INVESTMENTS Investments are presented in the financial statements at fair value based on quoted market prices. The City's position in the State and County Local Government Investment Pools is the same as the value of the pool shares. Pool investments are reported as Cash and Cash Equivalents. Interest earned on the pooled investments is allocated to individual funds based on that fund's cash balance at the end of each month. The City holds most investments to maturity. Interest earnings are recognized in the period in which they become available and measurable. Cash and equity in pooled investments are comprised of both government -type and business -type activities. The balances are comprised of the following: Page 54 Packet Pg. 122 2.5.a December 31, 2020 Deposits with US Bank $ 5,453,258 Petty Cash/Change Funds 4,500 Local Government Investment Pool 21,444,678 Snohomish County Investment Pool 20,132,419 Certificates of Deposit 7,803,516 Federal Agency Securities 16,216,230 $ 71,054,601 Interest rate risk. Interest rate risk is the risk that changes in interest rates of debt investments will adversely affect the fair value of an investment. As a means of limiting its exposure to fair value losses arising from rising interest rates, the City's investment policy manages the exposure to declines in fair values by limiting the average of maturity of its portfolio to no more than three and one half years, unless an investment is matched to an anticipated future cash flow. Information about the sensitivity of the fair values of the City's investments to market interest rate fluctuations is provided by the following table that shows the distribution of the City's investments by maturity: Remaining Maturitv in Months Fair Twelve Months Twelve Months Two Years to Three Years Credit Value or Less to Two Years Three Years to Seven Years Rating Federal Agency Securities $ 16,216,230 $ 4,682,513 $ 6,787,925 $ 4,480,610 $ 265,183 Aaa/AA+ Certificates of Deposit 7,803,516 3,000,000 - 2,803,516 2,000,000 Not Rated Local Government Investment Pool 21,444,678 21,444,678 - - Not Rated Snohomish County Investment Pool 20,132,419 20,132,419 - - - Not Rated $ 65,596,843 $ 49,259,610 $ 6,787,925 $ 7,284,126 $ 2,265,183 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 the instruments in which the City may invest. The City is empowered to invest in the following types of securities: • U.S. Government obligations, U.S. Government agency obligations, and U.S. govern- ment instrumentality obligations, which have a liquid market with a readily determinable market value; • U.S. Treasury securities maturing in less than ten years; • Fully insured or collateralized certificates of deposit, and other evidences of deposit, at qualified financial institutions that are approved by the Washington Public Deposit Protection Commission; • Banker's Acceptances, and commercial paper rated in the highest tier by a nationally recognized rating agency; • Investment grade obligations of state and local governments and public authorities located within the State of Washington; and • Local government investment pools, either state administered or through joint powers statutes and other intergovernmental agreement legislation. The Washington State Local Government Investment Pool (LGIP), created by the Washington State Legislature in 1986, is managed and operated solely by the Office of the State Treasurer. The State Finance Committee administers the statute that created the pool and adopts appropriate rules. The State Treasurer established the LGIP Advisory Committee to provide advice on the pool's operation. The advisory committee includes 12 members selected from the active pool participants. Eight members are appointed by the participant associations, and four are appointed by the State Treasurer. Page 55 Packet Pg. 123 2.5.a The LGIP is considered extremely low risk and is recorded as a cash equivalent. The pool is unrated by financial rating agencies. Investments are reported at their amortized cost basis to pool participants, which approximates fair value. The LGIP transacts with its participants at a stable net asset value per share of $1.00, the same method used for reporting. The Snohomish County Investment Pool (SCIP) is not registered with the SEC. Investments are reported at fair value to the participants. It includes participating funds from the County's primary government and funds from the districts where the County Treasurer serves as ex-officio Treasurer. There are no involuntary participants in the SCIP. All participants have notified the Treasurer of their desire to participate in the SCIP. The portion of the pool belonging to outside districts is reported in an Investment Trust Fund. SCIP investments are those allowed by County Investment Policy and include savings accounts, CD's and securities. Pool participant shares are based on the dollars that they have invested in SCIP. The income is distributed based on interest rates on investments, amortization of premiums and discounts, and realized gains and losses for the month. Pool oversight comes from the Snohomish County Finance Committee (SCFC). The SCFC consists of the County Treasurer, County Executive and Chairperson of the County Council. SCFC approves investment policies for SCIP. Fair value of securities is based on the market value reports provided by the County's custodial agent. The market values are uploaded into the County investment software monthly from the custodial agent. The fair value of each participant's investment is determined by calculating the ratio of total investments by pool participants divided into the total fair value of the SCIP underlying assets. Each pool participant can determine their fair value by taking their investment in SCIP multiplied by this ratio. Custodial Credit Risk - Deposits. Custodial Credit Risk for Deposits is the risk that in the event of a bank failure, the City may not be able to recover deposits or collateral securities that are in the possession of an outside party. All City deposits are insured by Federal Depository Insurance (FDIC) up to $250,000. All deposits not covered by FDIC insurance are covered by the Washington Public Deposit Protection Commission (WPDPC). The WPDPC constitutes a multiple financial institution collateral arrangement that provides for additional assessments against members of the pool on a pro rata basis up to a maximum of 10 percent of each institution's public deposits. The WPDPC may make pro-rata assessments to members of the WPDPC pool in the event the pool's collateral should be insufficient to cover a loss. Custodial Credit Risk — Investments. Custodial Credit Risk for Investments is the risk that in the event of the failure of the counterparty, the City will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. All City securities are held for safekeeping by U.S. Bank, as the City's agent, in the City's name. Concentration of Credit Risk. Concentration of Credit Risk is the risk of loss attributed to the magnitude of an investment in a single issuer. The City diversifies its investments by security type and institution. The investment policy requires that no more than 50 percent of the City's portfolio, at the time of purchase, shall be in any single financial institution, with the exception of investments in the LGIP, the SCIP, or U.S. Treasury or Agency securities. The City measures and reports investments at fair value using the valuation input hierarchy established by Generally Accepted Accounting Principles. Fair value is defined as the exchange price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction. The guidance requires three levels of fair value measurement based on the respective inputs. Page 56 Packet Pg. 124 2.5.a Level 1: Prices quoted in active markets for identical securities. Level 2: Quoted market prices for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other than quoted prices that are not observable. Level 3: Unobservable inputs for an asset or liability. U.S. Agency securities and municipal bonds classified in Level 2 are valued using quoted prices for similar securities and interest rates. The level of fair value measurement is based on the lowest level of significant input for the security type in its entirety. There are no Level 1 or Level 3 security classifications to report. The following table presents recurring fair value measurements as of December 31, 2020: Fair Value Measurement Using Quoted Prices Significant Active Markets Other Significant for Identical Observable Unobservable Investment Type Assets (Level 1) Inputs (Level 2) Inputs (Level 3) Total Federal Agency Securities $ $ 16,216,230 $ - $ 16,216,230 Snohomish Co. Investment Pool 20,132,419 - 20,132,419 WA State LGIP 21,444,678 - 21,444,678 Certificate of Deposit 7,803,516 - 7,803,516 Total $ $ 65,596,843 $ - $ 65,596,843 The following table identifies the types of investments, concentration of investments in any one issuer, and maturities of the City's investment portfolio at December 31, 2020: Maturities Less Than 1 %of Total Investment Type Fair Value Year 1 to 7 Years Portfolio Federal Agency Securities $ 16,216,230 $ 4,682,513 $ 11,533,717 24.72% Snohomish County Pool 20,132,419 20,132,419 - 30.69% Certificates of Deposit 7,803,516 3,000,000 4,803,516 11.90% Subtotal 44,152,165 27,814,932 16,337,233 67.31% WA State LGIP ' 21,444,678 21,444,678 - 32.69% Total $ 65,596,843 $ 49,259,610 $ 16,337,233 100.00% Percentage of Total Portfolio 75.09% 24.91% 100.00% Discretely Presented Component Unit: Cash and equity in pooled investments of the Edmonds Public Facilities District are comprised of governmental type activities only. The balances as of December 31, 2020 are as follows: Component Unit December 31, 2020 Cash and Cash Equivalents $ 101,256 Restricted Cash and Cash Equivalents 138,071 $ 239,327 Page 57 Packet Pg. 125 2.5.a The following tables present information regarding the components of Cash and Cash Equivalents as of December 31, 2020: Financial Statements Governmental Business -type Total Fiduciary Activities Activities Primary Govt. Funds Total Cash and Cash Equivalents $ 19,046,314 $ 12,133,991 $ 31,180,305 $ 173,352 $ 31,353,657 Restricted Cash and Cash Equivalents 8,288,515 12,196,199 20,484,714 - 20,484,714 Investments 10,894,660 8,321,570 19,216,230 - 19,216,230 $ 38,229,489 $ 32,651,760 $ 70,881,249 $ 173,352 $ 71,054,601 Restricted Cash and Cash Equivalents Governmental Business -type Activities Activities Total Deposit to Bond Reserve Account $ - $ 3,290,576 $ 3,290,576 First Financial CD -Waterfront Center 2,000,000 - 2,000,000 First Financial CD - PFD Collateral 2,803,516 2,803,516 Unspent Construction Debt Proceeds 3,484,999 8,905,623 12,390,622 $ 8,288,515 $ 12,196,199 $ 20,484,714 NOTE 4 — PROPERTY TAXES The Snohomish County Treasurer acts as an agent to collect property taxes levied in the County for all taxing authorities. Property tax is recorded as a receivable and revenue when levied. Property tax collected in advance of the fiscal year to which it applies is recorded as deferred inflow and recognized as revenue in the period to which it applies. No allowance for uncollectible tax is established because delinquent taxes are considered fully collectible. Prior year tax levies were recorded using the same principle, and delinquent taxes are evaluated annually. The City may levy up to $3.10 per $1,000 of assessed valuation for general governmental services. This rate is limited by the Washington State Constitution and RCW 84.55.010. The City's regular levy for 2020 was $0.95632303622 per $1,000 on an assessed valuation of $11,011,221,440 for a total regular levy of $10,530,285. City of Edmonds voters have approved one special levy, for Emergency Medical Services (EMS). The City's EMS Levy for 2020 was $0.37349634392 per $1,000 on an assessed valuation of $11,011,221,440 for a total EMS levy of $4,112,651. Property Tax Calendar January 1 Tax is levied and become an enforceable lien against properties. February 14 Tax bills are mailed. April 30 First of two equal installment payments is due. Assessed value of property established for next year's levy at 100 May 31 percent of market value. October 31 Second installment is due. Page 58 Packet Pg. 126 2.5.a NOTE 5 — RECEIVABLES AND PAYABLES Receivables at December 31. 2020 are as follows: Due from Customer Due From Other Component Accounts Taxes Governments Units Total Governmental Activities General Fund $ 633,328 $ 383,437 $ 2,517,462 $ 3,800,552 $ 7,334,778 Other Governmental Funds - - 1,675,187 - 1,675,187 Internal Service 997 3,058 4,055 otal Govemmental Activities $ 634,325 $ 383,437 $ 4,195,706 $ 3,800,552 $ 9,014,020 Business -type Activities Combined Utility Fund $ 3,946,665 $ $ 3,245,586 $ $ 7,192,251 Total Business -type Activities $ 3,946,665 $ $ 3,245,586 $ $ 7,192,251 Payables at December 31, 2020 are as follows Salaries and Benefits Accounts Payable M Due to Other Governments Other Current Liabilities Governmental Activities General Fund $ 1,156,165 $ 1,197,681 $ $ 139,475 $2,493,321 Other Governmental Funds 58,617 1,062,071 66,682 1,187,370 Internal Service 39,937 74,892 - 114,829 Total Govemmental Activities $ 1,254,719 $ 2,334,643 $ $ 206,158 $3,795,520 Business -type Activities Combined Utility Fund $ 223,511 $ 3,117,700 $ 307,896 $ 588,845 $4,237,952 Total Business -type Activities $ 223,511 $ 3,117,700 $ 307,896 $ 588,845 $4,237,952 NOTE 6 — DEFERRED INFLOWS AND OUTFLOWS OF RESOURCES Deferred Outflows of Resources at December 31, 2020, are as follows. - Deferred Outflows of Resources - Government -wide Governmental Business -Type Statement of Net Position Activities Activities Difference between the reacquisition price and the net carrying amount of old debt in current refundings when the reacquistion price is greater. $ 7,410 $ 63,655 GASB 68 Pension Deferred Outflow 2,681,680 373,002 $ 2,689,090 $ 436,657 Page 59 Packet Pg. 127 2.5.a Deferred Inflows of Resources at December 31. 2020 are as follows: Deferred Inflows of Resources - Government -wide Governmental Business -Type Statement of Net Position Activities Activities Difference between the reacquisition price and the net carrying amount of old debt in current refundings when the reacquistion price is less. $ 103,485 $ 18,244 GASB 68 Pension Deferred Inflow 2,433,890 369,459 $ 2,537,375 $ 387,703 Deferred Inflows of Resources - Governmental Enterprise Funds Balance Sheet General Fund Funds The portion of property taxes not received within 60 days of 2020 $ 197,668 $ The portion of court receivables not recei\(ed within 60 days of 2020 333,948 Total $ 531,616 $ - NOTE 7 — INTERFUND ACTIVITY There were two interfund balances as of December 31, 2020. The first was for a utility tax payable to the General Fund in the amount of $231,144. The second was for an interfund loan between the Contingency Reserve Fund and the Edmonds CARES Fund in the amount of $217,000. The Edmonds CARES Fund made grant eligible payments and is waiting for grant reimbursement from Snohomish County. Interfund transfers are the flow of assets without a reciprocal return of assets, goods or services. The City uses transfers to move revenues from the fund that statute or budget requires to collect them to the fund that statute or budget requires to expend them. Routine transfers include contributions to the pension funds, transfers for debt service requirements, transfers from unrestricted revenues collected in the General Fund to finance various programs accounted for in other funds, transfers for the 1 % percent for the arts program, and transfers when the City closes out activity in a fund. Significant transfers in 2020 include a $1.5 million transfer from the Equipment Rental Fund to the General Fund. Interfund activitv for the vear is as follows: Transfers Out Other Transfers In General Governmental Enterprise Total General Fund $ 1,535,800 $ - $ 776,991 $ $ 776,991 Other Governmental 945,199 35,800 167,477 203,277 Enterprise - - 731 731 Internal Service - 1,500,000 - 1,500,000 Total $ 2,480,999 $ 1,535,800 $ 945,199 $ - $ 2,480,999 Page 60 Packet Pg. 128 2.5.a NOTE 8 — RESTRICTED, COMMITTED AND ASSIGNED COMPONENTS The government -wide statement of net position reports $16,186,900 for Governmental Activities and $3,296,724 for Business -Type Activities as restricted components of net position. The fund statements report $3,076,353 as committed and $2,000,000 as assigned components of fund balance. Governmental Activities Restricted for: Per RCW, proceeds from seizures are limited to law enforcement activities exclusively $ Restricted per RCW related to state fuel taxes, transportation benefit fees, impact fees and grant agreements Restricted per RCW related to REET revenue and lodging tax restrictions, private donors, and grant agreements Per RCW, proceeds are limited to paying the cost of tourism promotion and the Edmonds Business Improvement District Per RCW, 60% of the proceeds are limited to the construction of affordable housing, construction of mental and behavioral health - related facilities and facilities where housing related programs are provided. The remaining proceeds must be used for the operation, delivery or evaluation of mental and behavioral health treatment programs and services or housing -related services Restricted by grant agreements and private donations limited to a specific purpose Restricted for Net Pension Assets Total Restricted Components of Net Position 74,303 3,220,074 8,129, 745 86,073 78,441 10,363 4,656,343 $ 16,255,342 Business -Type Activities Restricted for: Customer deposits $ 6,148 Debt service restrictions 3,290,576 Total Restricted Components of Net Position $ 3,296,724 Governmental Activities Committed for: Committed for the cost of operating and restoring the Edmonds Marsh $ 864,616 Committed to provide moneys with which to alleviate the problem of homelessness in Edmonds and the surrounding area 123,581 Committed to provide moneys with which to alleviate the problem of opioid addiction in Edmonds and the surrounding area 28,445 Committed for the acquisition or advancement of visual and performing arts within the City 682,727 Committed for the administration of the employee permit parking program solely and exclusively 81,998 Committed for special projects, special events, capital improvements and other nonrecurring needs of cemetery 205,127 Committed to be expended solely for the purpose of maintaining the cemetery 1,089,860 Total Committed Components of Fund Balance $ 3,076,353 Governmental Activities Assigned for: Assigned for Civic Park 2,000,000 Total Assigned Components of Fund Balance $ 2,000,000 Page 61 Packet Pg. 129 2.5.a NOTE 9 — CAPITAL ASSETS AND DEPRECIATION Capital asset activity for the year ended December 31, 2020 is as follows: Schedule of Capital Asset Activity Balance Balance 1/1/2020 Increases Decreases 12/31/2020 Governmental Activities Capital assets, not being depreciated: Land Construction in progress Total capital assets not being depreciated: Capital assets, being depreciated: Building Improvements other than buildings Infrastructure Machinery and equipment Total capital assets being depreciated: Less accumulated depreciation for: Buildings Improvements other than buildings Infrastructure Machinery and equipment Total accumulated depreciation: Total capital assets being depreciated, net: Governmental activities capital assets, net: Business -type Activities Capital assets not being depreciated: Land Construction in progress Total capital assets, not being depreciated: Capital assets being depreciated: Building Improvements other than buildings Machinery and equipment Intangible assets Total capital assets being depreciated: Less accumulated depreciation for: $ 17, 688, 372 $ - $ - $ 17, 688, 372 2,375,529 5,740,141 (279,189) 7,836,481 20,063,901 5,740,141 (279,189) 25,524,853 24,427,468 490,286 - 24,917,754 24,630,915 - (189,111) 24,441,804 64,873,168 313,450 - 65,186,618 10,443,849 765,394 (646,898) 10,562,344 124, 375, 399 1,569,130 (836, 009) 125,108, 520 (17,131,319) (503,556) - (17,634,875) (9,565,537) (833,159) 189,110 (10,209,586) (37,059,986) (1,486,381) - (38,546,367) (5,313,320) (725,456) 589,232 (5,449,543) (69, 070,161) (3,548,552) 778,342 (71, 840, 371) 55,305,238 (1,979,422) (57,667) 53,268,149 $ 75,369,139 $ 3,760,719 $ (336,855) $ 78,793,002 Balance Balance 1/1/2020 Increases Decreases 12/31/2020 $ 1,257,107 $ - $ - $ 1,257,107 7,755,141 14,851,137 (4,311,195) 18,295,083 9,012,248 14,851,137 (4,311,195) 19,552,190 35,489,768 - (51,040) 35,438,728 106,302,842 10,115,555 (1,557,937) 114,860,460 1,056,690 5,023 1,061,712 1,296,697 - 1,296,697 144,145, 996 10,120, 578 (1,608,977) 152, 657, 597 Buildings (19,349,640) (680,296) 51,039 (19,978,897) Improvements other than buildings (33,871,180) (3,286,106) 736,278 (36,421,008) Machinery and equipment (508,598) (61,498) - (570,096) Intangible assets (1,265,916) (1,868) - (1,267,784) Total accumulated depreciation: (54,995,334) (4,029,768) 787,317 (58,237,785) Total capital assets being depreciated, net: 89,150,663 6,090,810 (821,660) 94,419,813 Business activities capital assets, net: $ 98,162,911 $ 20,941,947 $ (5,132,855) $ 113,972,003 Page 62 Packet Pg. 130 2.5.a The difference between the 2019 Ending Balance and the 2020 Beginning Balance for capital assets in the Governmental Activities is due to two misstatements identified during the 2019 audit that were not corrected during the 2019 audit. The city deleted roads that were still in use and expensed playground equipment that should have been capitalized. The difference for the Business -type Activities is due to two assets identified by the engineering department that were not originally added to the capital asset list. The items were listed on the small and attractive list but met the capital asset threshold. Depreciation Expense by Function Governmental Activities: General government $ 468,951 Public safety 305,018 Culture and recreation 707,519 Transportation 1,419,541 Physical Environment 4,575 Internal service 642,948 Total depreciation expense - Governmental Activities $ 3,548,552 Business -Type Activities: Stormwater $ 661,015 Water 1,124, 800 Sewer 873,978 Wastewater Treatment 1,369,976 Total depreciation expense - Business Type Activities $ 4,029,768 NOTE 10 — PENSION PLANS The following table represents the aggregate pension amounts for all plans as of and for the year ended December 31, 2020: State Sponsored Plans Single Employer Plan Total Pension Liabilities $ 4,987,572 $ 507,497 $ 5,495,069 Pension Assets $ 4,656,343 $ - $ 4,656,343 Deferred Outflows of Resources $ 3,053,817 $ 865 $ 3,054,682 Deferred Inflows of Resources $ 2,803,349 $ - $ 2,803,349 Pension Expense/Expenditures $ 370,468 $ 13,534 $ 384,002 State Sponsored Pension Plans Substantially all of the City's full-time and qualifying part-time employees participate in one of the following statewide retirement systems administered by the Washington State Department of Retirement Systems (DRS), under cost -sharing, multiple -employer public employee defined benefit and defined contribution retirement plans. The state Legislature establishes, and amends, laws pertaining to the creation and administration of all public retirement systems. Page 63 Packet Pg. 131 2.5.a The DRS, a department within the primary government of the State of Washington, issues a publicly available Comprehensive Annual Financial Report that includes financial statements and required supplementary information for each plan. The DRS Report may be obtained by writing to Department of Retirement Systems, Communications Unit, P.O. Box 48380, Olympia, WA 98540, or it may be downloaded from the DRS website at www.drs.wa.gov. Public Employees Retirement System (PERS) PERS members include elected officials; state employees; employees of the Supreme, Appeals and Superior Courts; employees of the legislature; employees of district and municipal courts; employees of local governments; and higher education employees not participating in higher education retirement programs. PERS is comprised of three separate pension plans for membership purposes. PERS plans 1 and 2 are defined benefit plans, and PERS 3 is a defined benefit plan with a defined contribution component. PERS Plan 1 — provides retirement, disability and death benefits. Retirement benefits are determined as 2% of the member's average final compensation (AFC) times the member's years of service. The AFC is the average of the member's 24 highest consecutive service months. Members are eligible for retirement from active status at any age with at least 30 years of service, at age 55 with at least 25 years of service, or at age 60 with at least five years of service. Members retiring from active status prior to the age of 65 may receive actuarially reduced benefits. Retirement benefits are actuarially reduced to reflect the choice of a survivor benefit. Other benefits include duty and non -duty disability payments, an optional cost of living adjustment, and a one-time duty -related death benefit, if found eligible by the Department of Labor and Industries. PERS 1 members were vested after the completion of five years of eligible service. The plan was closed to new entrants on September 30, 1977. Contributions — The PERS Plan 1 member contribution rate is established by State statute at 6%. The employer contribution rate is developed by the Office of the State Actuary and includes an administrative expense component that is currently set at 0.18%. Each biennium, the state Pension Funding Council adopts Plan 1 employer contribution rates. The PERS Plan 1 required contribution rates (expressed as a percentage of covered payroll) for 2020 were as follows: PERS Plan 1 Actual Contribution Rates Employer Employee 2020 January through August PERS Plan 1 7.92% 6.00% PERS Plan 1 UAAL 4.76% Administrative Fee 0.18% Total 12.86% 6.00% September through December PERS Plan 1 7.92% 6.00% PERS Plan 1 UAAL 4.87% Administrative Fee 0.18% Total 12.97% 6.00% The City's actual contributions to the plan were $719,557 for the year ended December 31, 2020. PERS Plan 213 — provides retirement, disability and death benefits. Retirement benefits are determined as 2% of the member's average final compensation (AFC) times the member's years of service for Plan 2 and 1 % of AFC for Plan 3. The AFC is the average of the member's 60 highest - paid consecutive service months. There is no cap on years of service credit. Members are eligible for retirement with a full benefit at age 65 with at least five years of service credit. Retirement before Page 64 Packet Pg. 132 2.5.a age 65 is considered an early retirement. PERS Plan 2/3 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 benefit that is reduced by a factor that varies according to age for each year before age 65. PERS Plan 2/3 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% for each year before age 65; or • With a benefit that has a smaller (or no) reduction (depending on age) that imposes stricter return -to -work rules. PERS Plan 2/3 members hired on or after May 1, 2013 have the option to retire early by accepting a reduction of 5% for each year of retirement before age 65. This option is available only to those who are age 55 or older and have at least 30 years of service credit. PERS Plan 2/3 retirement benefits are also actuarially reduced to reflect the choice of a survivor benefit. Other PERS Plan 2/3 benefits include duty and non -duty disability payments, a cost -of -living allowance based on the CPI capped at 3% annually, and a one-time duty related death benefit, if found eligible by the Department of Labor and Industries. PERS 2 members are vested after completing five years of eligible service. 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 12 months of that service are earned after age 44. PERS Plan 3 — defined contribution benefits are totally dependent on employee contributions and investment earnings on those contributions. PERS Plan 3 members choose their contribution rate upon joining membership and have a chance to change rates upon changing employers. Plan 3 required defined contribution rates are set at a minimum of 5% and escalate to 15% with a choice of six options. Employers do not contribute to the defined contribution benefits. PERS Plan 3 members are immediately vested in the defined contribution portion of their plan. Contributions — The PERS Plan 2/3 employer and employee contribution rates are developed by the Office of the State Actuary to fully fund Plan 2 and the defined benefit portion of Plan 3. The Plan 2/3 employer rates include a component to address the PERS Plan 1 unfunded actuarially accrued liability (UAAL) and an administrative expense that is currently set at 0.18 percent. Each biennium, the state Pension Funding Council adopts Plan 2 employer and employee contribution rates and Plan 3 contribution rates. The PERS Plan 2/3 required contribution rates (expressed as a percentage of covered payroll) for 2020 were as follows: PERS Plan 2/3 Actual Contribution Rates Employer 2/3 Employee 2 Employee 3 2020 January through August PERS Plan 2/3 7.92% 7.90% Varies PERS Plan 1 UAAL 4.76% Administrative Fee 0.18% Total 12.86% 7.90% Varies September through December PERS Plan 2/3 7.92% 7.90% Varies PERS Plan 1 UAAL 4.87% Administrative Fee 0.18% Total 12.97% 7.90% Varies The City's actual contributions to the plan were $1,128,159 for the year ended December 31, 2020. Law Enforcement Officers' and Fire Fighters' Retirement System (LEOFF) LEOFF membership includes all full-time, fully compensated, local law enforcement commissioned officers, firefighters, and as of July 24, 2005, emergency medical technicians. LEOFF is comprised of two separate defined benefit plans. Page 65 Packet Pg. 133 2.5.a LEOFF Plan 1 provides retirement, disability and death benefits. Retirement benefits are determined per years of service calculated as a percent of final average salary (FAS) as follows: • 20+ years of service — 2.0% of FAS • 10 — 19 years of service — 1.5% of FAS • 5 — 9 years of service — 1 % of FAS 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. Members are eligible for retirement with 5 years of service at the age of 50. Other benefits include duty and non -duty disability payments, a cost -of living adjustment (COLA), and a one-time duty -related death benefit, if found eligible by the Department of Labor and Industries. LEOFF 1 members were vested after the completion of 5 years of eligible service. The plan was closed to new entrants on September 30, 1977. Contributions — Starting on July 1, 2000 LEOFF Plan 1 employers and employees contribute zero percent, as long as the plan remains fully funded. The LEOFF Plan I had no required employer or employee contributions for fiscal year 2020. Employers paid only the administrative expense of 0.18% of covered payroll. LEOFF Plan 2 — provides retirement, disability and death benefits. Retirement benefits are determined as 2% of the final average salary (FAS) per year of service (the FAS is based on the highest consecutive 60 months). Members are eligible for retirement with a full benefit at age 53, with at least 5 years of service credit. Members who retire prior to the age of 53 receive reduced benefits. If the member has at least 20 years of service and is age 50, the reduction is 3% for each year prior to age 53. Otherwise, the benefits are actuarially reduced for each year prior to age 53. LEOFF 2 retirement benefits are also actuarially reduced to reflect the choice of a survivor benefit. Other benefits include duty and non -duty disability payments, a cost -of -living allowance based on the CPI, capped at 3% annually and a one-time duty -related death benefit, if found eligible by the Department of Labor and Industries. LEOFF 2 members are vested after the completion of 5 years of eligible service. Contributions — The LEOFF Plan 2 employer and employee contribution rates are developed by the Office of the State Actuary to fully fund Plan 2. The employer rate included an administrative expense component set at 0.18%. Plan 2 employers and employees are required to pay at the level adopted by the LEOFF Plan 2 Retirement Board. Effective July 1, 2017, when a LEOFF employer charges a fee or recovers costs for services rendered by a LEOFF 2 member to a non-LEOFF employer, the LEOFF employer must cover both the employer and State contributions on the LEOFF 2 basic salary earned for those services. The state contribution rate (expressed as a percentage of covered payroll) was 3.44% in 2020. The LEOFF Plan 2 required contribution rates (expressed as a percentage of covered payroll) for 2020 were as follows: LEOFF Plan 2 Actual Contribution Rates Employer Employee 2020 January through December LEOFF Plan 2 5.15% 8.59% Administrative Fee 0.18% Total 5.33% 8.59% Page 66 Packet Pg. 134 2.5.a The City's actual contributions to the plan were $360,086 for the year ended December 31, 2020 The Legislature, by means of a special funding arrangement, appropriates money from the state General Fund to supplement the current service liability and fund the prior service costs of Plan 2 in accordance with the recommendations of the Pension Funding Council and the LEOFF Plan 2 Retirement Board. This special funding situation is not mandated by the state constitution and could be changed by statute. For the state fiscal year ending June 30, 2020 the state contributed $76,297,643 to LEOFF Plan 2. The amount recognized by the City as its proportionate share of this amount is $221,306. Actuarial Assumptions The total pension liability (TPL) for each of the DRS plans was determined using the most recent actuarial valuation completed in 2020, with a valuation date of June 30, 2019. The actuarial assumptions used in the valuation were based on the results of the Office of the State Actuary's (OSA) 2013-2018 Experience Study and the 2019 Economic Experience Study. Additional assumptions for subsequent events and law changes are current as of the 2019 actuarial valuation report. The TPL was calculated as of the valuation date and rolled forward to the measurement date of June 30, 2020. Plan liabilities were rolled forward from June 30, 2019, to June 30, 2020, reflecting each plan's normal cost (using the entry -age cost method), assumed interest and actual benefit payments. Inflation: 2.75% total economic inflation; 3.50% salary inflation Salary increases: In addition to the base 3.50% salary inflation assumption, salaries are also expected to grow by promotions and longevity. Investment rate of return: 7.4% Mortality rates were developed using the Society of Actuaries' Pub. H-2020 mortality rates, which vary by member status, as the base table. The OSA applied age offsets for each system, as appropriate, to better tailor the mortality rates to the demographics of each plan. OSA applied the long-term MP-2017 generational improvement scale, also developed by the Society Actuaries, to project mortality rates for every year after the 2010 base table. Mortality rates are applied on a generational basis; meaning, each member is assumed to receive additional mortality improvements in each future year throughout his or her lifetime. There were changes in methods and assumptions since the last valuation. • OSA updated its demographic assumptions based on the results of its latest demographic experience study. See OSA's 2013-2018 Demographic Experience Study at leg.wa.gov/osa • OSA updated the Early Retirement Factors and Joint -and -Survivor factors used in its model to match the ones implemented by DRS on October 1, 2020. These factors are used to value benefits for members who elect to retire early and for survivors of members that die prior to retirement. • The valuation includes liabilities and assets for Plan 3 members purchasing Total Allocation Portfolio annuities when determining contribution rates and funded status. • OSA simplified its modeling of medical premium reimbursements for survivors of duty -related deaths in LEOFF 2. Page 67 Packet Pg. 135 2.5.a • OSA changed its method of updating certain data items that change annually, including the public safety duty -related death lump sum and Washington state average wage. OSA set these values at 2018 and will project them into the future using assumptions until the next Demographic Experience Study in 2025. See leg.wa.gov/osa for more information on this method change. Discount Rate The discount rate used to measure the total pension liability for all DRS plans was 7.4%. To determine that rate, an asset sufficiency test was completed to test whether each pension plan's fiduciary net position was sufficient to make all projected future benefit payments for current plan members. Based on OSA's assumptions, the pension plans' fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return of 7.4 percent was used to determine the total liability. Long -Term Expected Rate of Return The long-term expected rate of return on the DRS pension plan investments of 7.4% was determined using a building -block -method. In selecting this assumption, the Office of the State Actuary (OSA) reviewed the historical experience data, considered the historical conditions that produced past annual investment returns, and considered capital market assumptions and simulated expected investment returns provided by the Washington State Investment Board (WSIB). The WSIB uses the capital market assumptions and their target asset allocation to simulate future investment returns at various future times. Estimated Rates of Return by Asset Class Best estimates of arithmetic real rates of return for each major asset class included in the pension plan's target asset allocation as of June 30, 2020, are summarized in the table below. The inflation component used to create the table is 2.2% and represents the WSIB's most recent long-term estimate of broad economic inflation. Asset Class Target Allocation Percent Long - Term Expected Real Rate of Return Arithmetic Fixed Income 20.00% 2.20% Tangible Assets 7.00% 5.10% Real Estate 18.00% 5.80% Global Equity 32.00% 6.30% Private Equity 23.00% 9.30% Total 100.00% Sensitivity of the NPL The table below presents the City's proportionate share of the net pension liability (asset) calculated using the discount rate of 7.4%, as well as what the City's proportionate share of the net pension liability (asset) would be if it were calculated using a discount rate that is 1-percentage point lower (6.4%) or 1-percentage point higher (8.4%) than the current rate. Page 68 Packet Pg. 136 2.5.a 2020 1% Decrease (6.4%) Current Discount Rate (7.4%) 1% Increase (8.4%) PERS 1 $ 4,323,056 $ 3,451,385 $ 2,691,199 PERS 2/3 $ 9,558,504 $ 1,536,177 $ 5,070,214 LEOFF 1 $ 852,457 $ 1,047,310 $ 1,215,891 LEOFF 2 $ 71,448 $ 3,609,032 $ 6,505,608 Pension Plan Fiduciary Net Position Detailed information about the State's pension plans' fiduciary net position is available in the separately issued DRS financial report. Pension Liabilities (Assets) At December 31, 2020, the City reported a total pension liability of $4,987,562 and a total pension asset of ($4,656,342) for its proportionate share of the net pension liabilities as follows (measured as of June 30, 2020): 2020 Liability (Asset) PERS 1 $ 3,451,385 PERS 2/3 $ 1,536,177 Total $ 4,987,562 LEOFF 1 $ 1,047,310 LEOFF 2 $ 3,609,032 Total $ 4,656,342 The amount of the asset reported above for LEOFF Plans 1 and 2 reflects a reduction for State pension support provided to the City. The amount recognized by the City as its proportionate share of the net pension asset, the related State support, and the total portion of the net pension asset that was associated with the City were as follows: LEOFF 1 (Asset) LEOFF 2 (Asset) Employer's Proportionate Share $ 1,047,310 $ 3,609,032 State's Proportionate Share of the Net Pension Asset Associated with the Employer $ 7,083,982 $ 2,307,703 Total $ 8,131,292 $ 5,916,735 The City's proportionate share of the collective net pension assets, deferred outflows, liabilities, and deferred inflows was as follows: Proportionate Share 6/30/2019 Proportionate Share 6/30/2020 Change in Proportion PERS 1 0.097960% 0.097758% -0.000202% PERS 2/3 0.119772% 0.120113% 0.000341% LEOFF 1 0.053590% 0.055457% 0.001867% LEOFF 2 0.192032% 1 0.176926% 1 -0.015106% Page 69 Packet Pg. 137 2.5.a Employer contribution transmittals received and processed by the DRS for the fiscal year ended June 30 are used as the basis for determining each employer's proportionate share of the collective pension amounts reported by the DRS in the Schedules of Employer and Nonemployer Allocations for all plans except LEOFF 1. LEOFF Plan 1 allocation percentages are based on the total historical employer contributions to LEOFF 1 from 1971 through 2000 and the retirement benefit payments in fiscal year 2020. Historical data was obtained from a 2011 study by the Office of the State Actuary (OSA). In fiscal year 2019, the state of Washington contributed 87.12% of LEOFF 1 employer contributions and all other employers contributed the remaining 12.88% of employer contributions. LEOFF 1 is fully funded and no further employer contributions have been required since June 2000. If the plan becomes underfunded, funding of the remaining liability will require new legislation. The allocation method the plan chose reflects the projected long-term contribution effort based on historical data. In fiscal year 2020, the state of Washington contributed 39% of LEOFF 2 employer contributions pursuant to RCW 41.26.725 and all other employers contributed the remaining 61 % of employer contributions. The collective net pension liability (asset) was measured as of June 30, 2020, and the actuarial valuation date on which the total pension liability (asset) is based was as of June 30, 2019, with update procedures used to roll forward the total pension liability to the measurement date. Pension Expense For the year ended December 31, 2020, the City recognized pension expense as follows: 2020 PERS 1 $ 159,072 PERS 2/3 $ 139,854 LEOFF 1 $ 86,904 LEOFF 2 $ 158,449 Total I $ 370,471 Page 70 Packet Pg. 138 2.5.a Deferred Outflows of Resources and Deferred Inflows of Resources At December 31, 2020 the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Deferred Outflows of Inflows of PERS 1 Resources Resources Differences Between Expected and Actual Experience $ - $ Net Difference Between Projected and Actual Investment Earnings on Pension Plan Investments $ - $ 19,216 Changes of Assumptions $ - $ - Changes in Proportion and Differences Between Contributions and Proportionate Share of Contributions $ - $ - Contributions Subsequent to the Measurement Date $ 360,233 $ - Total PERS 1 $ 360,233 $ 19,216 Deferred Deferred Outflows of Inflows of PERS 2/3 Resources Resources Differences Between Expected and Actual Experience $ 549,929 $ 192,520 Net Difference Between Projected and Actual Investment Earnings on Pension Plan Investments $ - $ 78,016 Changes of Assumptions $ 21,879 $ 1,049,342 Changes in Proportion and Differences Between Contributions and Proportionate Share of Contributions $ 465,371 $ 560,922 Contributions Subsequent to the Measurement Date $ 560,626 $ - Total PERS 2/3 $ 1,597,805 $ 1,8801800 Page 71 Packet Pg. 139 2.5.a Deferred Deferred Outflows of Inflows of LEOFF 1 Resources Resources Differences Between Expected and Actual Experience $ - $ Net Difference Between Projected and Actual Investment Earnings on Pension Plan Investments $ - $ 10,955 Changes of Assumptions $ - $ - Changes in Proportion and Differences Between Contributions and Proportionate Share of Contributions $ - $ - Contributions Subsequent to the Measurement Date $ - $ - Total LEOFF 1 $ - $ 10,955 Deferred Deferred Outflows of Inflows of LEOFF 2 Resources Resources Differences Between Expected and Actual Experience $ 499,369 $ 64,009 Net Difference Between Projected and Actual Investment Earnings on Pension Plan Investments $ - $ 40,226 Changes of Assumptions $ 5,228 $ 558,838 Changes in Proportion and Differences Between Contributions and Proportionate Share of Contributions $ 398,351 $ 229,305 Contributions Subsequent to the Measurement Date $ 192,831 $ - Total LEOFF 2 $ 1,095,779 $ 892,378 Deferred Deferred Outflows of Inflows of All Plans Resources Resources Differences Between Expected and Actual Experience $ 1,049,298 $ 256,529 Net Difference Between Projected and Actual Investment Earnings on Pension Plan Investments $ - $ 148,413 Changes of Assumptions $ 27,107 $ 1,608,180 Changes in Proportion and Differences Between Contributions and Proportionate Share of Contributions $ 863,722 $ 790,227 Contributions Subsequent to the Measurement Date $ 1,113,690 $ - Total All Plans $ 3,053,817 $ 2,803,349 Page 72 Packet Pg. 140 2.5.a Deferred outflows of resources related to pensions resulting from the City's contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the following year. Other amounts reported as deferred outflows and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Year Ending December 31, PERS 1 PERS 213 2021 $ 87,203 $ 656,079 2022 $ 2,743 $ 171,024 2023 $ 26,608 $ 8,645 2024 $ 44,122 $ 72,347 2025 $ - $ 34,808 Thereafter $ - $ 62,693 Total $ 19,216 $ 843,612 LEOFF 1 LEOFF 2 2021 $ 39,105 $ 250,783 2022 $ 2,039 $ 18,885 2023 $ 11,117 $ 70,239 2024 $ 19,072 $ 137,576 2025 $ - $ 7,434 Thereafter $ - $ 79,858 Total $ 10,955 $ 10,571 Firemen's Pension Fund Plan Description The Law Enforcement Officers' and Firefighters' (LEOFF) pension system was established by the State of Washington on March 1, 1970. The City retained the responsibility for all benefits payable to members (or to their survivors) who retired prior to that date. In addition, the City retained the responsibility for a portion of the benefits payable to members who were active on that date. As a result, the City of Edmonds is the administrator of the Firemen's Pension Plan which is shown as a Trust Fund in the City's financial reports. Separate financial statements are not issued. This system is a closed, single -employer, defined benefit pension system. City firefighters who served before March 1, 1970 are participants of this pension fund. Benefits are established in accordance with RCW 41.18 and RCW 41.20. Employees Covered by Benefit Terms During 2020 there were a total of 4 retirees covered under this system who are receiving pension benefits; of these 4 retirees, 3 are also receiving medical benefits from this fund. There were no active employees covered under this plan, and there were no inactive employees entitled to but not yet receiving benefits. The pension plan is closed to new entrants. Funding Policy and Contributions Under State law, the Firemen's Pension Fund is provided an allocation of 25% of all money received by the State from taxes on fire insurance premiums. The General Fund may provide additional funding through transfers to help fund benefits and administrative costs as necessary. Active pension plan members are not required to contribute to the plan. Page 73 Packet Pg. 141 2.5.a The financial activity of the Firemen's Pension Fund is presented in the Statement of Fiduciary Net Position and the Statement of Changes in Fiduciary Net Position. No separate stand-alone financial report is issued for the Firemen's Pension Fund. Although the City administers the pension plan, it is partially funded by a percentage of the tax on fire insurance premiums. The state contributes 25% of taxes on fire insurance premiums to this plan and is considered a non -employer contributing entity. The amount of contributions received for the year ended December 31, 2020 was $51,491. Milliman, Inc., actuaries and consultants, provided the Firemen's Pension Fund Actuarial Valuation for the year ended December 31, 2020. The Net Pension Liability was measured as of December 31, 2020, and the total pension liability used to calculate the net pension liability was determined by the actuarial valuation as of January 1, 2020. The Firemen's Pension Fund did not hold any investments. The net pension liability has been recorded as a noncurrent liability on the City's Government -wide Statement of Net Position. Significant actuarial assumptions used in the valuation include: Actuarial Cost Method Entry Age Actuarial Asset Method Market Value Assumptions: Investment Return Assumption Discount Rate)* 2.00% Increases 3.00% -Salary Inflation related to Consumer Price Index 2.25% Increase Timing Jul 1 -Salary LEOFF Increase Timing April 1 RP-2000 Mortality Table (combined healthy) with generational projection using 100% of Projection Scale BB, with Mortality - Service -retired members and ages set back one year for males and spouses set forward one year for females. RP-2000 Mortality Table (combined healthy) with generational projection using 100% of Projection Scale BB, with Mortality - Disabled members ages set forward two years. *Discount rate is based on The Bond Buyer General Obligation 20-bond municipal index for bonds that mature in 20 years. There were changes in methods and assumptions since the last actuarial valuation January 1, 2020). • Decreased the investment rate of return from 2.75% to 2.00%. Page 74 Packet Pg. 142 2.5.a Chanaes in the Net Pension Liabil Increase (Decrease) Total Pension Plan Fiduciary Net Pension Liability Net Position Liability Balances at December 31, 2019 $ 642,577 $ 146,733 $ 495,844 Changes for the Year: Service Cost - - - Interest 16,828 - 16,828 Changes in Benefits Provided - - - Changes in Actuarial Assumptions or Inputs 29,948 - 29,948 Differences Between Expected and Actual Experience - - - Contributions - Employer - Net Investment Income 3,897 (3,897) Contributions from state fire insurance premium tax 51,491 (51,491) Benefit Payments and Withdrawals (61,740) (61,740) - Medical Payments from Fund (19,258) 19,258 Administrative Expenses (1,007) 1,007 Other - - - Balances at December 31, 2020 $ 627,613 $ 120,116 $ 507,497 Net Plan Fiduciary Net Position Total Pension Liability Pension Plans Fiduciary Net Position Net Pension Liability Plan Fiduciary Net Position as a % of the Total Pension Liability 2020 2019 $ 627,613 $ 642,577 120,116 146,733 $ 507,497 $ 495,844 19.14% 22.84% SensitivitV of Net Pension LiabilitV The following table presents the City's proportionate share of the net pension liability calculated using the discount rate of 2.00%, as well as what the City's proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1 percentage point lower or 1 percentage point higher than the current rate. 1% Decrease Current Rate 2% 1% Increase Net Pension Liability $ 551,761 $ 507,497 $ 468,128 Page 75 Packet Pg. 143 2.5.a Pension Expense For the year ended December 31, 2020 the City recognized pension expense related to the Firemen's pension plan as follows: Service Cost $ - Interest Cost 16,828 Expected Investment Earnings (3,618) Administrative Expense 1,007 Medical Payments 19,258 Contributions from state fire insurance premium tax (51,491) Amortization of Deferred Inflows and Outflows 31,550 Changes in Benefits Provided - $ 13,534 Deferred Outflows of Resources and Deferred Inflows of Resources At December 31, 2020 the City reported deferred outflows of resources and deferred inflows of resources related to the Firemen's pension plan from the following sources: Differences Between Expected and Actual Experience Net Difference Between Projected and Actual Investment Earnings on Pension Plan Investments Changes of Assumptions Total Deferred Deferred Outflows of Inflows of Resources Resources (865) - $ (865) $ - Deferred Outflows of resources related to the Firemen's Pension Plan and Deferred Inflows of Resources related to the Firemen's Pension Plan will be recognized in pension expense as follows: Year Endina December 31 2021 2022 2023 2024 2025 Thereafter Total $ (738) (123) (59) 55 $ (865) Municipal Employees Benefits Trust (MEBT) By majority vote, City employees approved the City's withdrawal from the Social Security System pursuant to 2 U.S.C.A., Sec. 418 (g) effective July 1, 1977. City employees who customarily work 1,000 or more hours per year and who otherwise would be eligible for Social Security coverage and benefits are required to participate. Both the City and participants are required to contribute an Page 76 Packet Pg. 144 2.5.a amount equal to the current Federal Insurance Contributions Act (FICA) tax rate. The City's contribution for fiscal year 2020 was $1,246,189 which represents its full liability. For the year ending December 31, 2020 the City's covered payroll was $21,910,021. No significant benefit changes occurred in 2020. The plan is administered by a Plan Committee consisting of two members appointed by the Mayor and five members elected by the employees who contribute to the plan. Members appointed by the Mayor serve at the pleasure of the Mayor; elected members serve a two-year term and may be re-elected for an additional two-year term. Plan assets are not City property, but are maintained in trust at American Stock Transfer and Trust Company. Plan assets, therefore, are not included in these financial statements. The City may amend the provisions of the plan, provided that no such amendment shall enlarge the duties or the liabilities of the plan trustee without its consent. The City has the right at any time to reduce, suspend, or completely discontinue its contributions to the plan. Actuarial determinations are not required because 1) long-term disability insurance and survivor income insurance are provided through Cigna Group Insurance, and 2) each participant shall, at their normal retirement, instruct the Trustee to (a) acquire a non -forfeitable, non- transferable annuity contract, (b) pay their retirement benefit from their account (no City or participant contributions are to be added to the account after retirement), or (c) pay a single cash sum. When a participant terminates, the Trustee shall be instructed to pay the full amount of the participant's contributions plus the vested portion credited to their account. NOTE 11 — OTHER POST EMPLOYMENT BENEFITS (OPEB) The following table represents the aggregate OPEB amounts for all plans subject to the requirements of GASB 75 for the year ended December 31: OPEB Liabilities 2020 $ (8,365,221) Deferred Outflows of Resources - Deferred Inflows of Resources - OPEB Expense 843,038 In addition to providing pension benefits described under "Fireman's Pension," the City provides other post -employment health care benefits. Firefighters hired between March 1, 1970 and September 30, 1977 are members of the LEOFF 1 pension system and are also eligible for a supplemental retirement benefit plus health benefits under the City plan. General Information about the OPEB Plan Plan Description This system is a closed, single -employer, defined benefit OPEB plan. Benefits Provided The City pays the medical insurance premiums and any additional medical expenses not covered by insurance, including long-term care. These benefits were paid from the LEOFF 1 Retiree Medical Reserve Fund. In accordance with RCW 41.26.150, all employees who become eligible after age 50 or become disabled while employed with at least 5 years of service in the LEOFF 1 system are eligible. Page 77 Packet Pg. 145 2.5.a Employees Covered by Benefit Terms At December 31, 2020 the following employees were covered by the benefit terms: 2020 Inactive Employees or Beneficiaries Currently Receiving Benefit Payments 22 Inactive Employees Entitled to But Not Yet Receiving Benefit Payments - Active Employees - Funding Policy The plan is funded on a pay-as-you-go basis and there are no assets accumulating in a qualifying trust. Contributions Under authorization of the Disability Board, the City pays the medical insurance premiums and any additional medical expenses not covered by insurance, including long-term care. The retiree does not contribute towards the cost of their medical care. Total OPEB Liability The City's total OPEB liability was measured as of December 31, 2020 and was determined using an actuarial valuation as of December 31, 2018. The actuarial measurement was based on the following methods and assumptions: -Methodology: Actuarial Cost Method Entry Age Actuarial Asset Method Market Value Assumptions: Investment Return Assumption Discount Rate) * 2.00% Increases 3.00% -Salary Cost of Living Adjustments 2.50% Inflation 2.50% RP-2014 Static Projection to 2024 with Scale MP-2014 -Mortality Medical Trend Rate 5.25% gradin down to 5.00% in 2020 -Long-Term Care Trend Rate 5.00% *Discount rate is based on The Bond Buyer General Obligation 20-bond municipal index for bonds that mature in 20 years. There were changes in methods and assumptions since the last actuarial valuation (December 31, 2018). • Decreased the investment rate of return from 2.75% to 2.00%. Page 78 Packet Pg. 146 2.5.a Changes in the total OPEB Liability: Balance - January 1 Service Cost Interest Changes in Actuarial Assumptions Differences Between Expected and Actual Experieni Benefit Payments and Withdrawals Other Total 2020 $ 7,877,232 211,775 631,263 (355,049) $ 8,365,221 Sensitivitv of the Total OPEB Liabilitv to Chanaes in the Healthcare Cost Trend Rate and Discount Rate The following presents the total OPEB liability of the City calculated using a discount rate and healthcare trend rates that are 1 percentage point higher and 1 percentage point lower than the current discount rate and health care cost trend rates: 1% Decrease Current Rate 2% 1% Increase Discount Rate $ 9,332,226 $ 8,365,221 $ 7,539,272 Current Rate 5.25% Grading Down to 5% in 1% Decrease 2020 1% Increase Discount Rate $ 7,375,412 $ 8,365,221 $ 9,515,675 OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB The City recognized OPEB expense for the year ended December 31 as follows: Service Cost Interest Cost Amortization of Deferred Inflows and Outflows Total 2020 211,775 631,263 $ 843,038 Page 79 Packet Pg. 147 2.5.a NOTE 12 — LONG-TERM DEBT The City of Edmonds issues general obligation and revenue bonds to finance the acquisition and construction of major capital facilities and capital programs. General obligation bonds have been issued in the past for both general government and business type activities and are being repaid from the applicable resources. Governmental Activities long-term debt is paid from property and sales tax revenues. Revenue bonds are repaid out of the revenues generated by the related utility. In November of 2020, the City issued Water and Sewer Revenue Bonds (Certified Climate Bonds) in the amount of $13,875,000 for the Carbon Recovery Project at the wastewater treatment plant. The City of Edmonds is liable for seven Public Works Trust Fund Loans; three of the direct borrowing notes are general obligation and four notes from direct borrowing are businesses -type. The notes from direct borrowing are considered obligations of both the general government and the utility and are being repaid from the applicable resources. The City is liable for a direct borrowing note awarded by the Washington State Department of Ecology for the Wastewater Treatment Plant Electrical Improvements Project and a Snohomish County Public Works Assistance Fund direct borrowing note to finance the construction of a Stormwater Pump Station. The City is in compliance with all Washington State debt limitation statutes and bond indenture agreements. The City also has an outstanding line of credit with Snohomish County in the amount $136,250. General obliaation bonds currentiv outstandina are as follows Maturity Interest Original Principal Balance Issue Name Date Rates Amount Installment 12/31/2020 Governmental Debt: 2012 LTGO Refunding Bonds 12/1/2031 2.00% $ 9,004,043 $ 643,802 $ 3,862,981 2016 Chase Bank Loan 12/1/2026 1.67% 838,526 82,220 521,122 2019 LTGO Bond - Civic Park 12/1/2039 5.00% 3,485,000 110,000 3,375,000 Total Governmental GO Bonds 13,327,569 836,022 7,759,103 Business -type Debt: 2012 LTGO Refunding Bonds 12/1/2031 2.00% 320,957 31,198 32,019 2016 Chase Bank Loan 12/1/2026 1.67% 2,328,116 228,277 1,446,864 Total Business- type GO Bonds 2,649,073 259,475 1,478,883 Total General Obligation Bonds $15,976,642 $1,095,497 $ 9,237,986 Revenue bonds currently outstanding are as follows: Maturity Interest Original Principal Balance Issue Name Date Rates Amount Installment 12/31/2020 Business- type Debt: 2011 Water/Sew er Bonds 12/1/2031 4.00% $13,720,000 $ 635,000 $ 8,705,000 2013 Water/Sewer Bonds 12/1/2038 5.00% 15,010,000 205,000 13,730,000 2015 Water/Sewer Bonds 12/1/2040 4.00% 18,740,000 550,000 15,945,000 2020 Water/Sewer Bonds 12/1/2045 2.00% 13,875,000 - 13,875,000 Total Revenue Bonds $ 61,345,000 $1,390,000 $ 52,255,000 Page 80 Packet Pg. 148 2.5.a Notes from Direct Borrowing currently outstanding are as follows: Maturity Interest Original Principal Balance Issue Name Date Rates Amount Installment 12/31/2020 Governmental Debt: P W Trust Fund Loan - Street Construction 6/30/2022 0.50% $ 340,000 $ 18,143 $ 36,287 P W Trust Fund Loan - Street Construction 6/30/2024 0.50% 400,000 21,176 84,706 P W Trust Fund Loan - Street Construction 5/24/2026 0.50% 624,750 32,882 197,290 Total Governmental Notes from Direct Borrowings 1,364,750 72,201 318,282 Business -type Debt: P W Trust Fund Loan - Trt. Rant/Sew er Improv P W Trust Fund Loan - Water Improvements P W Trust Fund Loan - Storm Improvements P W Trust Fund Loan - Sewer Improvements Department of Ecology 6/30/2022 0.50% 1,347,250 71,325 142,650 6/30/2024 6/30/2024 6/30/2025 10/31 /2033 Snohomish County Loan 7/1/2037 Total Business- type Notes from Direct Borrowings 0.50% 408,000 25,839 103,356 0.50% 605,625 32,063 128,250 0.50% 1,216,902 72,295 361,476 2.30% 638,540 29,580 453,314 1.50% 408,750 21,513 387,237 4,625,067 252,615 1,576,283 Total Notes from Direct Borrowings $ 5,989,817 $ 324,816 $ 1,894,565 Nonexchange Financial Guarantees currently outstanding are as follows: Maturity Interest Original Principal Balance Issue Name Date Rates Amount Installment 12/31/2020 Governmental Debt Edmonds Public Facilities District 12/1/2025 0.700% $ 1,312,868 $ 184,769 $ 184,770 Total Nonexchange Financial Guarantee $ 1,312,868 $ 184,769 $ 184,770 Nonexchange Financial Guarantee - In 2008, the City of Edmonds guaranteed the 17-year, $4 million general obligation bond issuance of the Edmonds Public Facilities District (PFD), a legally separate district within the City, in accordance with the authority provided by the Washington State Legislature and codified in RCW Chapters 35.57 and 39.46. The City guaranteed repayment of these bonds through a Contingent Loan Agreement (CLA) with the PFD, and has advanced funds to them to assist with debt service on these bonds. In 2018 the PFD refinanced these bonds by issuing a 10-year Note to First Financial Northwest Bank (FFNB) in the amount of $2,803,516. At the same time the City purchased an interest bearing Certificate of Deposit in the same amount, to be held by FFNB as collateral. Each time the PFD makes a principal payment on the loan, the City has the option to reduce the balance of the Certificate of Deposit by the amount of the principal payment. In the event that the PFD is unable to make a payment, the CLA requires that the City will loan the PFD enough for them to be able to make the required payment. Between 2008 and December 31, 2020, the City has loaned the PFD a total of $1,206,191. These advances are shown in the City's Statement of Net Position as a Due from Component Unit. Because of the debt restructuring undertaken with FFNB and the extension of a dedicated sales tax stream that will support future debt payments, the City believes that the likelihood that the City will be required to make additional loans to the PFD has significantly diminished. In recognition of this the City has reduced the estimated nonexchange financial guarantee liability in half for 2020, and if events continue as forecast during 2021, it is likely that by December 31, 2021 the City will eliminate this liability completely. In addition, the City expects to recover the entire balance of all past loans made under the CLA. The liability recognized for nonexchange financial guarantees by the City for 2020 is as follows: Page 81 Packet Pg. 149 2.5.a Balance Balance 12/31/2019 Increases Decreases 12/31/2020 $ 369,539 $ - $ 184,769 $ 184,770 Debt Limit — RCW 39.36.020 provides cities with three segments of debt capacity, each equal to 2.5% of the city's assessed valuation, for a combined total of 7.5%. Allowable uses of these segments are as follows: Segment 1 — General Governmental Purposes The City can incur debt up to one and one-half percent (1.5%) of its assessed valuation solely with a vote of the legislative body (often referred to as "councilmanic" debt). To use the remaining one percent (1.0%), a 60 percent vote in favor of the issue by at least 40 percent of the number of voters who voted in the last general election is required. Segment 2 — City -Owned Water and Sewer Purposes The City can incur debt up to an additional two and one-half percent (2.5%) for water and sewer purposes with a 60 percent vote in favor of the issue by at least 40 percent of the number of voters who voted in the last general election. Segment 3 — Acquiring and Developing Open Space, Parks Facilities, and Capital Facilities Associated with Economic Development The City can incur debt up to an additional two and one-half percent (2.5%) for acquiring and developing open space, parks facilities, and capital facilities associated with economic development purposes with a 60 percent vote in favor of the issue by at least 40 percent of the number of voters who voted in the last general election. Debt Limit Capacity Water & Sewer Park & Capital Governmental Purposes Purposes Facilities Without Vote (Councilmanic) With Vote With Vote With Vote Item 1.5% 2.5% 2.5% 2.5% Legal Limits $ 165,168,322 $ 110,112,214 $ 275,280,536 $ 275,280,536 Net outstanding indebtedness (13,954,961) - - - Margin Available $ 151,213,361 $ 110,112,214 $ 275,280,536 $ 275,280,536 Defeased Debt — In prior years, the City has defeased the 2007 general obligation bond and several revenue bond issues by creating separate irrevocable trust funds. New debt has been issued and the proceeds used to purchase U.S. Government securities that were placed in the trust funds. These investments and fixed earnings from the investments are sufficient to fully service the defeased debt until the debt is called or matures. For financial reporting purposes, the debt is considered defeased and therefore removed from City financial statements. Debt Service to Maturity — The requirements to amortize the long-term debt as of December 31, 2020 are presented below. Debt service for the LTGO bonds and governmental loans are met by the General Fund and certain special revenue funds, and reimbursements from proprietary funds Page 82 Packet Pg. 150 2.5.a of the City with the exception of the 2012 LTGO refunding bonds. The Public Facilities District (PFD) is obligated by inter -local agreement to pay the entire amount of the PFD's portion of the 2012 debt service over the life of the bonds. (See Note 1). Debt service for the revenue bonds is paid by the Utility Fund. In prior years the City has typically used the General Fund to liquidate long- term liabilities other than debt. At December 31, 2020 the City had $3,290,576 in the Enterprise funds available for debt service. Following is a table which reflects debt service to maturity for Governmental Activities and Business - Type Activities. Year GOVERNMENTAL ACTIVITIES Principal Interest Total BUSINESS TYPE ACTIVITIES Principal Interest Total 2021 953,455 206,476 1,159, 931 1,961,521 1,890,489 3,852,010 2022 831,443 178,385 1,009,828 1,982,898 1,817,347 3,800,245 2023 850,509 159,367 1,009,876 1,978,426 1,755,091 3,733,517 2024 886,280 141,003 1,027,283 2,036,304 1,691,922 3,728,227 2025 901,976 121,386 1,023,362 2,044,354 1,625,682 3,670,036 2026-2030 1,703,723 370,094 2,073,817 9,832,621 7,133, 970 16, 966, 591 2031-2035 1,070,000 181,456 1,251,456 11, 434, 501 5,184, 879 16, 619, 380 2036-2040 880,000 55,875 935,875 12, 299, 539 2,604,440 14, 903, 979 2041-2045 - - - 11, 740, 000 801,456 12, 541, 456 $ 8,077,386 $ 1,414,043 $ 9,491,428 $ 55, 310,165 $ 24, 505, 277 $ 79, 815, 442 Terms specified in debt agreements related to significant (1) events of default with finance -related consequences, (2) termination events with finance -related consequences, and (3) subjective acceleration clauses. If the principal of any Bond is not paid when the Bond is properly presented at its maturity date or date fixed for redemption, the City will be obligated to pay interest on the Bond at the same rate provided in the Bond from and after its maturity or date fixed for redemption until the Bond, both principal and interest, is paid in full or until sufficient money for its payment in full is on deposit in the Bond Fund or in a trust account established to refund or defease the Bond, and the Bond has been called for payment by giving notice of that call to the Registered Owner. If Snohomish County finds that the City has failed to comply with the terms of the loan agreement, the County can declare the City in default and terminate the Agreement in whole. The City has 5 days from written notice to remedy said default. In the event the City fails to remedy the default, the County shall issue the City of Edmonds written notice of termination and declare the principle amount owing and interest due at the time to be immediately due and payable. The Washington State Public Works Trust Fund loans will assess a daily penalty beginning on the 31 st day past the due date. The penalty will be assessed on the entire payment amount. The penalty will be 12% per annum calculated on a 360-day year for the delinquent amount. The Washington State Department of Ecology loan will assess a late charge of one percent per month on the past due amount starting on the date the debt becomes past due and until it is paid in full. If the Department of Ecology initiates a termination event or a loan default event occurs, the Department of Ecology may at its sole discretion demand that the City repay the outstanding balance of the loan amount and all accrued interest. In the event of a default, the Department may declare the principal of and interest on the loan immediately due and payable. Page 83 Packet Pg. 151 2.5.a Arbitrage — The Federal Tax Reform Act of 1986 requires tax-exempt debt issuers to pay investment income received at yields that exceed the issuer's borrowing rates to the United States Treasury. The liability is recorded at present value and payable every five years or 60 days after defeasance of the debt. At December 31, 2020, the City of Edmonds had no arbitrage liability. Revenue Bond Debt Service Coverage — The required debt service coverage for the utility revenue bonds is 1.25. Please refer to Schedule 15 in the Statistical Section. NOTE 13 — CHANGES IN LONG-TERM LIABILITIES During the year ended December 31, 2020, the following changes occurred in long-term liabilities: Governmental activities Bonds payable: General obligation bonds Less: For issuance premiums Total bonds payable: Pension liabilities Total OPEB liability Beginning Ending Balance Balance Due Within 1/1/2020 Additions Reductions 12/31/2020 One Year $ 8,595,125 $ - $ (836, 022) $ 7,759,103 $ 881,253 300,944 - (15,047) 285,897 15,047 8,896,069 - (851,069) 8,045,000 896,300 4,510,105 48,069 - 4,558,174 - 7,877,232 487,989 - 8,365,221 - Compensated absences 2,136,462 2,660,388 (2,301,812) 2,495,038 1,770,626 Governmental loans 390,484 - (72,201) 318,283 72,201 Nonexchange Financial Guarantee 369,539 - (184,769) 184,770 - Governmental activity long-term liabilities $ 24,179,891 $ 3,196,446 $ (3,409,851) $ 23,966,486 $ 2,739,127 Business -type activities Bonds Payable: General obligation bonds 1,738,359 $ - $ (259,475) $ 1,478,884 $ 263,219 Revenue bonds 39,770,000 13,875,000 (1,390,000) 52,255,000 1,445,000 Less: For issuance premiums 547,260 - (36,959) 510,301 36,959 For issuance discount - (162,108) - (162,108) (6,484) Total bonds payable: 42,055,619 13,712,892 (1,686,434) 54,082,077 1,738,694 Pension liabilities 916,052 21,884 (1,041) 936,895 - Compensated absences 414,416 443,919 (446,185) 412,150 343,218 Business -type loans 1,556,398 272,500 (252,615) 1,576,283 253,302 Business -type activity long-term liabilities $ 44,942,485 $ 14,451,195 $ (2,386,275) $ 57,007,405 $ 2,335,214 Internal service funds predominately serve the governmental funds. Accordingly, the December 31, 2020 long-term liabilities for the fund are included as part of the above totals for governmental activities. At year-end internal service fund balances include $131,856 for compensated absences and $189,624 for the total pension obligation. The General Fund is typically used in prior years to liquidate long-term liabilities other than debt. Page 84 Packet Pg. 152 2.5.a NOTE 14 — CONTINGENCIES AND LITIGATIONS Other Contingencies — The City has recorded in its financial statement all material liabilities, including an estimate for situations which are not yet resolved but where, based on available information, management believes that it is probable that the City will have to make payment. In the opinion of management, the City's insurance policies are adequate to pay all known or pending claims. Grants — The City participates in a number of federal- and state -assisted programs. These grants are subject to audit by the grantors or their representatives. Such audits could result in requests for reimbursement to grantor agencies for expenditures disallowed under the terms of the grants. City management believes that any such disallowances, if any, will be immaterial. NOTE 15 — RISK MANAGEMENT Property and Liability Insurance — The City of Edmonds is exposed to various risks of loss from torts; thefts of damage or destruction of assets; business interruption; errors and omissions; injuries to employees; and natural disasters. The City and its employees contribute to the State of Washington's Department of Labor and Industries for Workers' Compensation. There were no settlements in excess of coverage in any of the prior three years. The City of Edmonds is a member of the Washington Cities Insurance Authority (WCIA). Utilizing Chapter 48.62 RCW and Chapter 39.34 RCW, nine cities originally formed the WCIA on January 1, 1981. The WCIA was created for the purpose of providing a pooling mechanism for jointly purchasing insurance, jointly self -insuring, and jointly contracting for risk management services. WCIA has a total of 162 members. New members initially contract for a three-year term, and thereafter automatically renew on an annual basis. A one-year withdrawal notice is required before membership can be terminated. Termination does not relieve a former member from its unresolved loss history incurred during membership. Liability coverage is written on an occurrence basis, without deductibles. Coverage includes general, automobile, police, errors or omissions, stop gap, employment practices and employee benefits liability. Limits are $4 million per occurrence in the self -insured layer, and $21 million in limits above the self -insured layer is provided by reinsurance. Total limits are $25 million per occurrence subject to aggregates and sublimits. The Board of Directors determines the limits and terms of coverage annually. Insurance coverage for property, automobile physical damage, fidelity, inland marine, and boiler and machinery coverage are purchased on a group basis. Various deductibles apply by type of coverage. Property coverage is self -funded from the members' deductible to $750,000, for all perils other than flood and earthquake, and insured above that to $400 million per occurrence subject to aggregates and sublimits. Automobile physical damage coverage is self -funded from the members' deductible to $250,000 and insured above that to $100 million per occurrence subject to aggregates and sublimits. In-house services include risk management consultation, loss control field services, and claims and litigation administration. WCIA contracts for certain claims investigations, consultants for personnel and land use issues, insurance brokerage, actuarial, and lobbyist services. WCIA is fully funded by its members, who make annual assessments on a prospectively rated basis, as determined by an outside, independent actuary. The assessment covers loss, loss adjustment, reinsurance and other administrative expenses. As outlined in the interlocal, WCIA retains the right to additionally assess the membership for any funding shortfall. The City currently Page 85 Packet Pg. 153 2.5.a has no such assessments due to WCIA. The City incurred no settlements in excess of coverage in any of the past three years. An investment committee, using investment brokers, produces additional revenue by investment of WCIA's assets in financial instruments which comply with all State guidelines. A Board of Directors governs WCIA, which is comprised of one designated representative from each member. The Board elects an Executive Committee and appoints a Treasurer to provide general policy direction for the organization. The WCIA Executive Director reports to the Executive Committee and is responsible for conducting the daily operations of WCIA. Employee Benefit Trust Health Care Program — The City of Edmonds is a member of the Association of Washington Cities Employee Benefit Trust Health Care Program (AWC Trust HCP). Chapter 48.62 RCW provides that two or more local government entities may, by Interlocal agreement under Chapter 39.34 RCW, form together or join a pool or organization for the joint purchasing of insurance, and/or joint self-insurance, to the same extent that they may individually purchase insurance, or self -insure. An agreement to form a pooling arrangement was made pursuant to the provisions of Chapter 39.34 RCW, the Interlocal Cooperation Act. The AWC Trust HCP was formed on January 1, 2014 when participating cities, towns, and non -city entities of the AWC Employee Benefit Trust in the State of Washington joined together by signing an Interlocal Governmental Agreement to jointly self -insure certain health benefit plans and programs for participating employees, their covered dependents and other beneficiaries through a designated account within the Trust. As of December 31, 2020, 262 cities, towns, or non -city entities participate in the AWC Trust HCP. The AWC Trust HCP allows members to establish a program of joint insurance and provides health and welfare services to all participating members. In April 2020, The Board of Trustees adopted a large employer policy, requiring newly enrolling groups with 600 or more employees to submit medical claims without regard to individual member experience. The pool is actuarially rated each year with the assumption of projected claims run -out for all current members. The AWC Trust HCP includes medical, dental and vision insurance through the following carriers: Kaiser Foundation Health Plan of Washington, Kaiser Foundation Health Plan of Washington Options, Inc., Regence BlueShield, Asuris Northwest Health, Delta Dental of Washington, and Vision Service Plan. Eligible members are cities and towns within the state of Washington. Non -City Entities (public agency, public corporation, intergovernmental agency, or political subdivision within the state of Washington) are eligible to apply for coverage into the AWC Trust HCP, submitting application to the Board of Trustees for review as required in the Trust Agreement. Participating employers pay monthly premiums to the AWC Trust HCP. The AWC Trust HCP is responsible for payment of all covered claims. In 2020, the AWC Trust HCP purchased stop loss insurance for Regence/Asuris plans at an individual stop loss (ISL) of $1.5 million through Commencement Bay Risk Management, and Kaiser ISL at $1 million with Companion Life through ASG Risk Management. The aggregate policy is for 200% of expected medical claims. Participating employers contract to remain in the AWC Trust HCP for a minimum of three years. Participating employers with over 250 employees must provide written notice of termination of all coverage a minimum of 12 months in advance of the termination date, and participating employers with under 250 employees must provide written notice of termination of all coverage a minimum of 6 months in advance of termination date. When all coverage is being terminated, termination will only occur on December 31. Participating employers terminating a group or line of coverage must notify the AWC Trust HCP a minimum of 60 days prior to termination. A participating employer's termination will not obligate that member to past debts, or further contributions to the AWC Trust HCP. Similarly, the terminating member forfeits all rights and interest to the AWC Trust HCP Account. Page 86 Packet Pg. 154 2.5.a The operations of the Health Care Program are managed by the Board of Trustees or its delegates. The Board of Trustees is comprised of four regionally elected officials from Trust member cities or towns, the Employee Benefit Advisory Committee Chair and Vice Chair, and two appointed individuals from the AWC Board of Directors, who are from Trust member cities or towns. The Trustees or its appointed delegates review and analyze Health Care Program related matters and make operational decisions regarding premium contributions, reserves, plan options and benefits in compliance with Chapter 48.62 RCW. The Board of Trustees has decision authority consistent with the Trust Agreement, Health Care Program policies, Chapter 48.62 RCW and Chapter 200- 110-WAC. The accounting records of the AWC Trust HCP are maintained in accordance with methods prescribed by the State Auditor's office under the authority of Chapter 43.09 RCW. The AWC Trust HCP also follows applicable accounting standards established by the Governmental Accounting Standards Board. In 2018, the retiree medical plan subsidy was eliminated, and is noted as such in the report for the fiscal year ending December 31, 2018. Year-end financial reporting is done on an accrual basis and submitted to the Office of the State Auditor as required by Chapter 200-110 WAC. The audit report for the AWC Trust HCP is available from the Washington State Auditor's office. Page 87 Packet Pg. 155 2.5.a NOTE 16 - COMMITMENTS The City has several capital improvement projects in progress. As of December 31, 2020, the City's outstanding material contractual obligations, which include construction and engineering contracts, are summarized below: Contract Name Expenditures to Date Remaining Commitment Waterfront Redevelopment 743,739 612,624 Edmonds Fishing Pier Rehab 447,139 23,087 84th Ave Overlay 1,122,347 19,477 Ph 10 Waterline & Swedish Hospital Water System 1,805,828 259,343 2020 Overlay Program 80,607 48,208 Five Corners Recoating Project 530,458 15,657 Dayton Street Stormwater Pump Station 1,793,751 163,219 Dayton St. Utility Replacement (3rd to 9th) 6,659,412 597,274 2019 Storm Maintenance Project 117,071 28,694 Phase 7 Sanitary Sewer Replacement Project 2,419,902 56,654 Citywide Crossing Enhancements 347,676 1,288,858 Citywide Bicycle Improvements 73,584 235,937 238th St. Island & Downtown Ramps 630,750 (363,014) Citywide CIPP Sewer Rehab Project Phase 2 630,751 94,469 Phase 2 & 3 Storm Utility Replacement 132,352 378,734 Phase 8 Sewerline Replacement Program 255,888 116,024 Phase 11 Waterline Replacement Project 329,633 74,067 Yost & Sewer Reservoir Assessment 4,691 92,177 2021 Overlay Program 21,158 22,615 Hwy 99 Gateway Revitalization 658,150 835,615 Students Saving Salmon 2,935 7,065 76th Ave & 220th St. Intersection Improvements 49,909 33 Grant Writing for Willow Creek Daylighting Project 4,563 15,875 Swedish Hospital Water System Replacement 428,584 31,249 2020 Guardrail Installation Project 14,138 510 Edmonds Marsh Feasibility Study - Willow Creek Daylightin, 509,689 24,636 2018 Lorian Woods Slope Study 48,461 8,439 Lift Station #1 Basin & Flow Study 228,877 39,804 Lake Ballinger Sewer Trunk Main Study 68,794 226,354 2017 CIPP Sewer Repairs 77,524 7,476 WWTP Outfall Pipe Modifications 50,358 39,642 On -Call Wastewater Engineering Services 6,758 18,242 2020 Capital Projects CM, Engineering & Inspection Service 117,551 180,049 Ballinger Regional Facility 289,015 35,854 175th St. SW Slope 3,060 3,790 Edmonds Public Works Apron Repair 21,755 3,245 Waterfront Redeviopment 3,786,800 1,167,451 Civic Center Complex 1,084,602 3,741,738 Edmonds Fishing Pier Rehab 89,375 54,425 $ 25,687,633 $ 10,205,596 NOTE 17 - SUBSEQUENT EVENTS In early 2020 a deadly new virus, COVID-19, was identified in the Continental United States. This virus grew into a global pandemic, affecting virtually every aspect of life in the City of Edmonds, in the nation, and in the world. The effects of the pandemic continue into 2021. Although the City has escaped the majority of the economic fallout from the pandemic, at the time of publication of this document the pandemic continues, and the impacts it will have in 2021 and beyond are unknown to us at this time. Page 88 Packet Pg. 156 CITY OF EDMONDS: 2020 Comprehensive Annual Financial Report REQUIRED SUPPLEMENTARY INFORMATION 2.5.a FIREMEN'S PENSION FUND OTHER POST -EMPLOYMENT BENEFITS SCHEDULE OF CHANGES IN THE TOTAL OPEB LIABILITY AND RELATED RATIOS LAST 10 FISCAL YEARS* Total OPEB Liability Service Cost Interest Changes in Actuarial Assumptions Differences Between Expected and Actual Experience Benefit Payments and Withdrawals Net Change in Total OPEB Liability Total OPEB Liability - Beginning Total OPEB Liability - Ending Covered Payroll 2020 2019 2018 211,775 272,551 225,578 631,263 961,775 9,075 - - (578,428) (355,049) (338,445) (388,253) 487,989 895,881 (732,028) 7,877,232 6,981,351 7,713,379 $ 8,365,221 $ 7,877,232 $ 6,981,351 Total OPEB Liability as a %of Covered Payroll N/A N/A N/A Notes to Schedule: No assets are accumulated in a trust that meets the criteria in paragraph 4 of GASB 75. Until a full 10-year trend is compiled, only information for those years available is presented. r Q Page 89 Packet Pg. 157 2.5.a CITY OF EDMONDS: 2020 Comprehensive Annual Financial Report REQUIRED SUPPLEMENTARY INFORMATION FIREMEN'S PENSION FUND SCHEDULE OF CHANGES IN THE CITY'S NET PENSION LIABILITY AND RELATED RATIOS LAST 10 FISCAL YEARS* 2020 2019 2018 2017 2016 2015 2014 Total Pension Liability Service Cost $ - $ - $ - $ - $ - $ - $ Interest 16,828 26,547 19,147 23,528 15,991 16,365 30,016 Changes in Benefits Provided - - - - 188,817 - - Differences Between Expected and Actual Experience - 67,664 96,849 - 17,054 (256,011) Changes in Actuarial Assumptions 29,948 (55,159) (4,985) 37,919 (13,330) (31,502) Benefit Payments and Withdrawals 61,740 119,116 53,203 48,062 27,936 26,175 (24,481) Net Change in Total Pension Liability (14,964) (80,064) 57,808 13,385 180,596 (9,810) (281,978) Total Pension Liability - Beginning 642,577 722,641 664,833 651,448 470,852 480,662 762,640 Total Pension Liability -Ending $627,613 $642,577 $722,641 $664,833 $651,448 $470,852 $ 480,662 Fiduciary Net Position Contributions - Employer $ - $ 15,000 $ 39,297 $ 46,613 $ 47,449 $ 38,775 $ 21,581 Contributions from State Fire Insurance Premium Tax 51,491 48,232 - - - - - Net Investment Income 3,897 6,605 5,662 4,455 2,296 1,629 662 Benefit Payments and Withdrawals (61,740) (119,116) (53,203) (48,062) (27,936) (26,175) (24,481) Medical payments from fund (19,258) (20,417) - - Administrative Expenses (1,007) (1,269) (538) (1,222) (214) - Other 96 Change in Fiduciary Net Position (26,617) (70,965) (8,782) 1,784 21,595 14,325 (2,238) Fiduciary Net Position - Beginning 146,733 217,698 226,480 224,696 203,101 188,776 191,014 Fiduciary Net Position - Ending $120,116 $146,733 $217,698 $226,480 $224,696 $203,101 $ 188,776 Net Pension Liability $507,497 $495,844 $504,943 $438,353 $426,752 $267,751 $ 291,886 Fiduciary Net Position as a % of the Total Pension Liability 19.1% 22.8% Covered Payroll N/A N/A Net Pension Liability as a %of Covered Payroll N/A N/A Information is presented onlyforthose years forwhich information is available 30.1 % 34.1 % 34.5% 43.1 % 39.3% N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A R 3 O O LL d U C i C O U X W 'a 7 Q C ca L R N N LL 'a 7 cC N N 13 N t T 7 to C O E W C d E t v R r r Q Page 90 Packet Pg. 158 CITY OF EDMONDS: 2020 Comprehensive Annual Financial Report REQUIRED SUPPLEMENTARY INFORMATION 2.5.a FIREMEN'S PENSION FUND SCHEDULE OF CITY CONTRIBUTIONS LAST 10 FISCAL YEARS Annual Money Contributions Weighted Rate Actuarially Contribution Employer's as a Percent of Return Determined Actual Deficiency Covered of Covered Net of Investment Year Contribution Contribution (Excess) Payroll Payroll Expense 2020 $ 82,874 $ 32,233 $ 50,641 $ N/A 2.88 % 2019 82,874 42,815 40,059 - N/A 3.75 2018 43,194 39,297 3,897 - N/A 2.58 2017 43,194 46,613 (3,419) - N/A 1.99 2016 25,353 47,449 (22,096) - N/A 1.08 2015 25,353 38,775 (13,422) - N/A 0.83 2014 44,223 21,581 22,642 - N/A 0.35 2013 44,223 (3,576) 47,799 - N/A 0.17 2012 38,602 42,004 (3,402) - N/A 0.14 2011 38,602 (6,229) 44,831 - N/A 0.16 * Information is presented onlyfor those years forwhich information is available. r Q Page 91 Packet Pg. 159 CITY OF EDMONDS: 2020 Comprehensive Annual Financial Report REQUIRED SUPPLEMENTARY INFORMATION 2.5.a SCHEDULES OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY JUNE 30 (MEASUREMENT DATE) LAST 10 FISCAL YEARS* (SEE INDEPENDENT AUDITOR'S REPORT) PERS 1 Employer's Net Pension Plan Fiduciary Employer's Proportionate Liability (Asset) Net Position as Proportion of Share of the Employer's as a Percentage a Percentage the Net Pension Net Pension Covered of Covered of the Total Year Liability (Asset) Liability (Asset) Payroll Payroll Pension Liability 2020 0.097758% $ 3,451,385 $ 14, 373, 946 24. 01 % 68. 64% 2019 0.097960% 3,766,920 13, 393, 923 28.12% 67.12% 2018 0.090868% 4,058,195 12,701,466 31.95% 63.22% 2017 0.109876% 5,213,702 13,404,013 38.90% 61.24% 2016 0.101894% 5,472,188 14,068,530 38.90% 57.03% 2015 0.101786% 5,324,534 13,688,460 38.90% 59.10% Notes to Schedule: *Information is presented only for those years for which information is available. PERS 2/3 Employer's Net Pension Plan Fiduciary Employer's Proportionate Liability (Asset) Net Position as Proportion of Share of the Employer's as a Percentage a Percentage the Net Pension Net Pension Covered of Covered of the Total Year Liability (Asset) Liability (Asset) Payroll Payroll Pension Liability 2020 0.120113% $ 1,536,177 $ 14, 092,149 10.90% 97.22% 2019 0.119772% 1,163, 393 13,101, 081 8.88% 97.77% 2018 0.109886% 1,876,206 12,370,371 15.17% 95.77% 2017 0.133191% 4,627,751 13,053,673 35.45% 90.97% 2016 0.121658% 6,125,384 12,502,808 48.99% 85.82% 2015 0.121602% 4,344,909 11, 627, 811 37.37% 89.20% Notes to Schedule: *Information is presented only for those years for which information is available. Page 92 Packet Pg. 160 CITY OF EDMONDS: 2020 Comprehensive Annual Financial Report REQUIRED SUPPLEMENTARY INFORMATION 2.5.a Year SCHEDULES OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY JUNE 30 (MEASUREMENT DATE) LAST 10 FISCAL YEARS* (SEE INDEPENDENT AUDITOR'S REPORT) LEOFF 1 State's Proportionate Share of the Employer's Net Pension Employer's Proportionate Liability (Asset) Proportion of Share of the Associated the Net Pension Net Pension With The Liability (Asset) Liability (Asset) Employer Employer's Covered Total Payroll 2020 0.055457% $ (1,047,310) $ (7,083,982) $ (8,131,292) $ - 2019 0.053590% (1,059,266) (7,164,848) (8,224,114) - 2018 0.053132% (964,613) (6,524,615) (7,489,228) - 2017 0.055859% (847,504) (5,732,485) (6,579,989) - 2016 0.055141% (568,110) (5,363,896) (5,932,006) - 2015 0.054022% (651,084) (5,125,471) (5,776,555) - Net Pension Plan Fiduciary Liability (Asset) Net Position as as a Percentage a Percentage of Covered of the Total Payroll Pension Liability 2020 0.00% 146.88% 2019 0.00% 148.78% 2018 0.00% 144.42% 2017 0.00% 135.96% 2016 0.00% 123.74% 2015 0.00% 127.36% Notes to Schedule: *Information is presented only for those years for which information is available. Page 93 Packet Pg. 161 CITY OF EDMONDS: 2020 Comprehensive Annual Financial Report REQUIRED SUPPLEMENTARY INFORMATION 2.5.a Year SCHEDULES OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY JUNE 30 (MEASUREMENT DATE) LAST 10 FISCAL YEARS* (SEE INDEPENDENT AUDITOR'S REPORT) Employer's Proportion of the Net Pension Liability (Asset) LEOFF 2 Employer's Proportionate Share of the Net Pension Liability (Asset) State's Proportionate Share of the Net Pension Liability (Asset) Associated With The Employer Employer's Covered Total Payroll 2020 0.176926% $ (3,609,032) $ (2,307,703) $ (5,916,735) $ 6,654,735 2019 0.192032% (4,448,792) (2,913,363) (7,362,155) 6,764,235 2018 0.180721% (3,669,030) (797,902) (4,466,932) 6,513,429 2017 0.201856% (2,801,107) (545,988) (3,347,095) 3,524,363 2016 0.184178% (1,071,235) (229, 538) (1,300,773) 3,059,830 2015 0.183336% (1,884,327) (409,091) (2,293,418) 2,861,034 Net Pension Liability (Asset) as a Percentage of Covered Payroll Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 2020 -54.23% 115.83% 2019 -65.77% 119.43% 2018 -56.33% 118.50% 2017 -79.48% 113.36% 2016 -35.01 % 106.04% 2015 -65.86% 111.67% Notes to Schedule: *Information is presented only for those years for which information is available. Page 94 Packet Pg. 162 2.5.a CITY OF EDMONDS: 2020 Comprehensive Annual Financial Report REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF EMPLOYER CONTRIBUTIONS DECEMBER 31 (EMPLOYER REPORTING DATE) LAST 10 FISCAL YEARS* PERS 1 Contributions in Relation to the Contributions Statutorily Statutorily Contribution Employer's as a Percent Required Required Deficiency Covered of Covered Year Contribution Contribution (Excess) Payroll Payroll 2020 2019 2018 2017 2016 2015 E3 Notes to Schedule: 719,557 710,800 676,511 639,839 620,544 583,605 (719, 557) $ - $ 14, 529, 989 4.95% (710, 800) - 13, 939, 730 5.10% (676, 511) - 12, 882, 202 5.25% (639, 839) - 12, 597, 735 5.08% (620,544) - 12,099,373 5.13% (583, 605) - 11, 674,157 5.00% * Information is presented only for those years for which information is available. Year 2020 2019 2018 2017 2016 2015 Statutorily Required Contribution $ 1,128,159 1,054,573 942,080 842,249 743,678 710,849 Notes to Schedule: PERS 2/3 Contributions in Relation to the Statutorily Contribution Required Deficiency Contribution (Excess) $ (1,128,159) $ - (1,054,573) - (942,080) - (842, 249) - (743, 678) - (710, 849) - Employer's Covered Pavroll $ 14, 244, 396 13, 663, 708 12, 560,116 12, 270, 542 11, 845, 981 11, 203, 929 * Information is presented only for those years for which information is available. Contributions as a Percent of Covered Pavroll 7.92% 7.72% 7.50% 6.86% 6.28% 6.34% a R 3 0 0 w am U c m L c 0 U .r w =a 0 Q .r c c� L 0 L a� w .r =a 0 c� N N N T 0 a c 0 E 0 w c m E U 0 r r Q Page 95 Packet Pg. 163 2.5.a CITY OF EDMONDS: 2020 Comprehensive Annual Financial Report REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF EMPLOYER CONTRIBUTIONS DECEMBER 31 (EMPLOYER REPORTING DATE) LAST 10 FISCAL YEARS* LEOFF 1 Contributions in a Relation to the Contributions R Statutorily Statutorily Contribution Employer's as a Percent o Required Required Deficiency Covered of Covered Year Contribution Contribution (Excess) Payroll Payroll �o m U c 2020 $ - $ - $ - $ - 0.00% y 2019 - - - - 0.00% c 2018 - - - - 0.00% V 2017 - - - - 0.00% x 2016 - - - - 0.00%_ 2015 Q Notes to Schedule: c� /L^ V * Information is presented only for those years for which information is available. @ m LEOFF 2 Contributions in .r 3 Relation to the Contributions c� N N Statutorily Statutorily Contribution Employer's as a Percent Required Required Deficiency Covered of Covered T Year Contribution Contribution (Excess) Payroll Payroll a 2020 $ 360,086 $ (360,086) $ - $ 6,991,945 5.15% c 2019 354,709 (354,709) - 6,769,231 5.24% E 0 2018 180,384 (180,384) - 6,552,661 2.75% W 2017 176,008 (176,008) - 6,142,987 2.87% 2016 154,521 (154,521) - 3,059,830 5.05% E 2015 144,483 (144,483) - 2,861,034 5.05% a r r Notes to Schedule: Q * Information is presented only for those years for which information is available. Page 96 Packet Pg. 164 § \ 2 U) f 2 w ■o 04 J64 �— n 2 � 2U-k § ° S [ $ g Lu 0'D2 �w CL x % LU @ © d � ¢ o �LL u m e 25a 2 z ) § $ o: 2�2 @ g a 2 2 p \ q % o o s C R e k / / co � e � � 2 2 § 2� N e ƒ o U. 222 � J r \ » 3 CD 7 » \ w LO 0 3 # 6 � u § k E Cl) w 2�« 7 U L L 2 2 § $ § k 2� 0 3 r Q� Q o «� \ % c \ � z \ d � co 2 k } ® 2 0 z 0 m3 m3 )LL y ■ 0 � \ � w r r r = o x LLE 2 \ \ \ § \ 04 �z \ \ \ \ \ / / & 3 § G G § § m e § m o = 2 E 2 E / E / / / \� §§ §§ §§ m E— o m \ 2 0- E_ E= E. _$ 2 p 2 CL m #/ \) 2 Co \ w U. _ /� \ .2)o .2)o .2)0 2= a m3 \ § @ / 2 / » » 0 % \ j0 \ ( 0 6 a / 3\ / 9\ E ak )®< a/ / m« EO � _ y >= « w j= ® Z0LL w �_ <y/ • §/ »± >_ \ƒ� /_ CIg° $Z0LL gam° $a $g ¥ ¥—\/ ?U)/ \z § / 2 7 / /CQI k ]E2Pz6 _ LL2 L CL I�I=» I±±E==M:OLE \ /}/ }\\/�\ /\i�k\ k�i�k\ i%kƒ/¥ M \/i�k\ a 0 Q < » u—z<-E I%kƒ/¥ ■ 0wkƒf2 8 EOI = c�<I;= 2�<In= 0 <EmC: _ ±<EnE n ��I oI= e X u2wI=E LL<e-0 I=�E=e z<e-Q I2�E=a E<e--Q z « Eno zme240 / g Page y Packet Pg. 165 $ z 25a § 2 5 c U) \ 2 w ■o J� �— n 2 � 2U-k § ° S [ $ ow Lu 0'D2 �w CL x % LU @ © d � ¢ o �LL u m / \ \ / a h� �7 o U. a o $ o \ w \ M / w 6 co\ 0 U� \� \ �E \ (Dz 7 3 K 2 y K z a z z «R = = a c LLE \ \ \ \ ; �z \ G E E � 7 2 7 E 2 b 2 2 2 % .$ \ % % % e 22 � } ) k a = m ƒ/>_ ) ) j \ 7? �k m \ \ � CL / ) / \ƒ�\ / / / © » \ \ \ u < m �® _ *®® *®_ ®§ qLU\? q3\ \IR E2� #o a/ _�$% _°° LL �m\U) \LL <2E < <L) ��®�k «I7/ ki( ki(\ 2§ 2� 9—<e� �§ofI\� e==� e2= e2=o w w«@/ w c L) Lu �� a /\§�k§\\§\§\ E\ \ Z2�E<ImE � oIz<-EE << << << III= I±u E±Io /ƒ/§// 0/-0 §/� b��/ k \ Q C14 C14 k 3 » /E ƒ 2 }� _ 3 \ LULU }$/\ Ljj ƒ§$zE \2z LU 7 \\}\ ƒki§± k Csi C14 k C14 I�r co IV � k § 7 J k U- k � Page m Packet Pg. 166 2.5.a Cl Cd l cd g as %1 O O 00 y 'C > 3•a • r--I i4 Vi Cd Q% (d (d Ur N Qr Q 'b U Cn cd •�� Cd • O i•-I 0 00 k U � U U �••� � Vl O Q o rn vi m fir" N U fti" + Cd Cd •�, � '� F-' c 3 � w o � � N W O Ln N 4; to w N N W cd A. cd cd u qtl Y }�y • w�q i-1 1:) i \ \ V] 0 �••� FBI �J Page 99 Packet Pg. 167 2.5.a x CITY OF EDMONDS CITY HALL 121 Sr AVENUE NORTH - EDMONDS, WA 98020 Aic. , ? `' 425.771.0240 + FAX 425.771.0265 CORRECTIVE ACTION PLAN FOR FINDINGS REPORTED UNDER UNIFORM GUIDANCE City of Edmonds January 1, 2020 through December 31, 2020 This schedule presents the corrective action planned by the City for findings reported in this report in accordance with Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Finding ref number: Finding caption: 2020-001 The City's internal controls were inadequate for ensuring compliance with federal requirements for allowable activities and costs and subrecipient monitoring activities. Name, address, and telephone of City contact person: Dave Turley 121 5th Avenue N. Edmonds, WA 98020 (425) 275-4688 Corrective action the auditee plans to take in response to the finding: The City will ensure that the distribution of any support payments to individuals and businesses will comply with stated eligibility requirements, and that required reporting from recipients will be obtained. Anticipated date to complete the corrective action: We have already begun implementing this corrective action and plan for it to be in place for 2021 reporting requirements. Office of the Washington State Auditor sao.wa.gov Page100 Packet Pg. 168 2.5.a The State Auditor's Office is established in the Washington State Constitution and is part of the executive branch of state government. The State Auditor is elected by the people of Washington and serves four-year terms. We work with state agencies, local governments and the public to achieve our vision of increasing trust in government by helping governments work better and deliver higher value. In fulfilling our mission to provide citizens with independent and transparent examinations of how state and local governments use public funds, we hold ourselves to those same standards by continually improving our audit quality and operational efficiency, and by developing highly engaged and committed employees. As an agency, the State Auditor's Office has the independence necessary to objectively perform audits, attestation engagements and investigations. Our work is designed to comply with professional standards as well as to satisfy the requirements of federal, state and local laws. The Office also has an extensive quality control program and undergoes regular external peer review to ensure our work meets the highest possible standards of accuracy, objectivity and clarity. Our audits look at financial information and compliance with federal, state and local laws for all local governments, including schools, and all state agencies, including institutions of higher education. In addition, we conduct performance audits and cybersecurity audits of state agencies and local governments, as well as state whistleblower, fraud and citizen hotline investigations. The results of our work are available to everyone through the more than 2,000 reports we publish each year on our website, www.sao.wa.gov. Additionally, we share regular news and other information via an email subscription service and social media channels. We take our role as partners in accountability seriously. The Office provides training and technical assistance to governments both directly and through partnerships with other governmental support organizations. Stay connected at sao.wa.gov • Find your audit team • Request public records • Search BARS manuals (GAAP and cash), and find reporting templates • Learn about our training workshops and on -demand videos • Discover which governments serve enter an address on our map • Explore public financial data with the Financial Intelligence Tool Other ways to stay in touch • Main telephone: (564) 999-0950 • Toll -free Citizen Hotline: (866) 902-3900 • Email: webmasterksao.wa. gov Office of the Washington State Auditor sao.wa.gov Page101 Packet Pg. 169 2.5.b Exit Conference: City of Edmonds The Office of the Washington State Auditor's vision is increased trust in government. Our mission is to provide citizens with independent and transparent examinations of how state and local governments use public funds, and develop strategies that make government more efficient and effective. The purpose of this meeting is to share the results of your audit and our draft reporting. We value and appreciate your participation. Audit Reports We will publish the following reports for the period January 1, 2020 through December 31, 2020: • Financial statement and federal grant compliance audits — see draft report. • Annual Comprehensive Financial Report opinion letter — see letter. • Accountability audit — see draft report. Recommendations not included in the Audit Reports Exit Items We have provided exit recommendations for management's consideration. Exit items address control deficiencies or non-compliance with laws or regulation that have an insignificant or immaterial effect on the entity, or errors with an immaterial effect on the financial statements. Exit items are not referenced in the audit report. Communications required by audit standards In relation to our financial statement audit report, we would like to bring to your attention: • Uncorrected misstatements in the audited financial statements are summarized on the attached schedule. We agree with management's representation that these misstatements are immaterial to the fair presentation of the financial statements. • There were no material misstatements in the financial statements corrected by management during the audit. Finalizing Your Audit Report Publication Audit reports are published on our website and distributed via e-mail in an electronic .pdf file. We also offer a subscription service that allows you to be notified by email when audit reports are released or posted to our website. You can sign up for this convenient service at: https://portal.sao.wa.gov/SAOPortal. Management Representation Letter We have included a copy of representations requested of management. Packet Pg. 170 2.5.b Audit Cost At the entrance conference, we estimated the cost of the audit to be $86,000 plus estimated charges of $10,000 for travel costs, mileage, and other expenses. During the audit, we performed additional, unforeseen, work over the City's federal program expenditures and we followed up on a loss reported to our Office. We are pleased to report that because of savings due to working remotely, we anticipate total audit costs to approximate $95,000. a Your Next Scheduled Audit 3 0 Your next audit is scheduled to be conducted in May 2022 and will cover the following general areas: 0 LL • Accountability for Public Resources • Financial Statement including Annual Comprehensive Financial Report Opinion Letter i • Federal Programs 0 The estimated cost for the next audit based on current rates is $90,000 plus travel expenses of approximately $10,000. This preliminary estimate is provided as a budgeting tool and not a guarantee of final cost. w Working Together to Improve Government Q c Audit Survey When your report is released you will receive an audit survey from us. We value your opinions on our audit i services and hope you provide feedback. Local Government Support Team T This team provides support services to local governments through technical assistance, comparative statistics, o training, and tools to help prevent and detect a loss of public funds. Our website and client portal offers many -5 aD resources, including a client Help Desk that answers auditing and accounting questions. Additionally this team W assists with the online filing of your financial statements. The Center for Government Innovation The Center for Government Innovation of the Office of the Washington State Auditor is designed to offer services specifically to help you help the residents you serve at no additional cost to your government. What does this mean? We provide expert advice in areas like Lean, peer -to -peer networking and culture -building to help local governments find ways to be more efficient, effective and transparent. The Center can help you by providing assistance in financial management, cybersecurity and more. Check out our best practices and other resources that help local governments act on accounting standard changes, comply with regulations, and respond to recommendations in your audit. The Center understands that time is your most precious commodity as a public servant, and we are here to help you do more with the limited hours you have. If you are interested in learning how we can help you maximize your effect in government, call us at (564) 999-0818 or email us at Centerksao.wa.gov. Questions? Please contact us with any questions about information in this document or related audit reports. Kelly Collins, CPA, Director of Local Audit, (564) 999-0807, Kelly.Collins(a)sao.wa.gov Tina Watkins, CPA, Assistant Director of Local Audit, (360) 260-6411 Tina.Watkins(u,sao.wa.gov Kristina Baylor, Program Manager, (425) 951-0290, Kristina.Baylor(a,sao.wa.gov Kirk Gadbois, Assistant Audit Manager, (425) 951-0912, Kirk. Gadbois(a,sao.wa.gov Maggie Wallis, CPA, Audit Lead, (425) 948- 6738, Magdalene.Wallis(a,sao.wa.gov Packet Pg. 171 2.5.b Attachment: Summary of Uncorrected Misstatements Description Statement / Schedule Opinion Unit OPEB: The "total OPEB liability" should be allocated between current and non -current liabilities in the financial statements. Since there is no Governmental trust fund to make the benefit payments, the employer is making the Statement of Net Position Activities payments. So the amounts expected to be due within one year are current liabilities. The current portion is an estimate typically done by the actuary. Note 2, Accounting and Reporting Changes, page 46: The disclosure Notes to the Financial of new statements should be limited to the statements that have a financial Statements N/A impact on the government. Note 13, Changes in Long -Term Liabilities, page 76: We would expect Notes to the Financial N/A that the "Total OPEB Liability" would include a current portion. Statements Note 12 - Long-term Debt (GASB 88): The Chase Bank Loan is considered a direct borrowing and should be reported under the direct borrowings table instead of with the General Obligation Bonds. Notes to the Financial We reviewed the City's debt service requirements table and noted it does Statements N/A not separately report debt service requirements for direct placements/borrowings as required per GASB 88. Depreciation Expense: We recalculated business type activities Statement of Net Position depreciation expense and determined it was correctly calculated and - Proprietary Funds reported for all assets except asset 8847. We noted this asset's FY20 Statement of Revenues, 421/422/423 depreciation of $36,770 was not on the depreciation schedule. Debra Expenses, and Changes in Combined Sharp, Accountant, will have Eden research the cause as there is nothing Net Position - Proprietary Utility Funds in the setting that should be preventing this asset from running Funds depreciation. Depreciation expense understated by $36,789, accumulated depreciation Statement of Net Position Business Type understated by $36,789 causing overall reported asset, net to be overstated Statement of Activities Activities b $36,789. Statement of Net Position Utility Billing: The City is charging certain sewer customers $5.21 bi- - Proprietary Funds monthly./423 The City's ordinance for those customers states the rate to be Y Statement of Revenues, Combined Combined $5.21 per month or $10.42 bi-monthly. Charges for services is understated Expenses, and Changes in Utility Funds by approximately $20,105. Net Position - Proprietary As this is an estimate, no correction should be made unless the City Funds Statement of Net Position Business Type decides to determine the exact amount of misstatement. Statement of Activities Activities Cash & Investments: The City's cash and investment reconciliation did Statement of Net Position Governmental not include the Court's year end bank cash balance of $104,958 or any Activities related reconciling items as the Court did not complete their 12/31/20 Balance Sheet General Fund reconciliation and submit to the City's Finance Department. Transfers: The City transferred $1.5 million from the internal service General Fund funds to the general fund. We noted the $1.5 million came from: Statement of Revenues, Aggregate • General Fund (Fund 001) - $1,124,991 (comprised of $996,686 Expenditures and Changes Remaining general fund and 128,305 park maintenance fund) in Fund Balances - Funds • Street Fund (Fund 111) - $20,385 Governmental Funds • Combined Utility Funds (Funds 421/422/423) - $334,624 • Fleet (Fund 511) - $20,000 Statement of Revenues, 421/422/423 The amounts attributable to the street fund, combined utility funds, and Expenses, and Changes in Combined fleet fund should be refunded back to those funds, not the general fund. Net Position - Proprietary Utility Funds We determined transfers -in for the general fund, per the withdrawals on Funds the B-fund spreadsheet, is overstated by $375,009. a 3 0 0 U. a� c m a� c 0 c� x Q c L m a� T c 0 .N N N 0 N 0 N z M 2 a� M IL X w c 0 E w 4- 0 U c m E z 0 Q Packet Pg. 172 2.5.b Financial Statements and Federal Single Audit Report City of Edmonds For the period January 1, 2020 through December 31, 2020 Published March 31, 2022❑ .❑ Find out what's new at SAO Report No. 1030259 by scanning this code with ❑ your smartphone's camera Packet Pg. 173 2.5.b Office of the Washington State Auditor Pat McCarthy March 31, 2022 Mayor and City Council City of Edmonds Edmonds, Washington Report on Financial Statements and Federal Single Audit Please find attached our report on the City of Edmonds financial statements and compliance with federal laws and regulations. We are issuing this report in order to provide information on the City's financial condition. Sincerely, Pat McCarthy, State Auditor Olympia, WA Americans with Disabilities In accordance with the Americans with Disabilities Act, we will make this document available in alternative formats. For more information, please contact our Office at (564) 999-0950, TDD Relay at (800) 833-6388, or email our webmaster at webmasterksao.wa.gov. Insurance Building, P.O. Box 40021 • Olympia, Washington 98504-0021 • (564) 999-0950 • Pat. McCarthy@sao.wa.gov Packet Pg. 174 2.5.b Schedule of Findings and Questioned Costs................................................................................... 4 a Schedule of Federal Award Findings and Questioned Costs.......................................................... 6 R 3 0 Independent Auditor's Report on Internal Control Over Financial Reporting and on Compliance ,0 and Other Matters Based on an Audit of Financial Statements Performed in Accordance with c GovernmentAuditing Standards................................................................................................... 13 as c Independent Auditor's Report on Compliance for Each Major Federal Program and Report on v Internal Control Over Compliance in Accordance With the Uniform Guidance ......................... 15 x w Independent Auditor's Report on the Financial Statements.......................................................... 18 Q FinancialSection........................................................................................................................... 21 M Corrective Action Plan for Findings Reported Under Uniform Guidance..................................101 i a� About the State Auditor's Office..................................................................................................102 !i Office of the Washington State Auditor sao.wa.gov Packet Pg. 175 2.5.b City of Edmonds January 1, 2020 through December 31, 2020 SECTION I — SUMMARY OF AUDITOR'S RESULTS The results of our audit of the City of Edmonds are summarized below in accordance with Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Financial Statements We issued an unmodified opinion on the fair presentation of the financial statements of the governmental activities, the business -type activities, each major fund and the aggregate discretely presented component units and remaining fund information in accordance with accounting principles generally accepted in the United States of America (GAAP). Internal Control over Financial Reporting: • Significant Deficiencies: We reported no deficiencies in the design or operation of internal control over financial reporting that we consider to be significant deficiencies. • Material Weaknesses: We identified no deficiencies that we consider to be material weaknesses. We noted no instances of noncompliance that were material to the financial statements of the City. Federal Awards Internal Control over Major Programs: • Significant Deficiencies: We reported no deficiencies in the design or operation of internal control over major federal programs that we consider to be significant deficiencies. • Material Weaknesses: We identified deficiencies that we consider to be material weaknesses. We issued an adverse opinion on the City's compliance with requirements applicable to its major federal program. We reported findings that are required to be disclosed in accordance with 2 CFR 200.516(a). Office of the Washington State Auditor sao.wa.gov Packet Pg. 176 2.5.b Identification of Major Federal Programs The following program was selected as a major program in our audit of compliance in accordance with the Uniform Guidance. CFDA No. Program or Cluster Title 21.019 COVID-19 — Coronavirus Relief Fund The dollar threshold used to distinguish between Type A and Type B programs, as prescribed by the Uniform Guidance, was $750,000. The City did not qualify as a low -risk auditee under the Uniform Guidance. SECTION II — FINANCIAL STATEMENT FINDINGS None reported. SECTION III — FEDERAL AWARD FINDINGS AND QUESTIONED COSTS See Finding 2020-001. Office of the Washington State Auditor sao.wa.gov Packet Pg. 177 2.5.b City of Edmonds January 1, 2020 through December 31, 2020 2020-001 The City's internal controls were inadequate for ensuring compliance with federal requirements for allowable activities and costs and subrecipient monitoring CFDA Number and Title: Federal Grantor Name: Federal Award/Contract Number: Pass -through Entity Name: Pass -through Award/Contract Number: Questioned Cost Amount: Background 21.019 — COVID-19 — Coronavirus Relief Fund U.S. Department of the Treasury N/A Washington State Department of Commerce, Snohomish County, and Economic Alliance Snohomish County 20-6541 C-167 $871,500 The purpose of the Coronavirus Relief Fund (CRF) program is to provide payments to state, territorial, tribal and certain eligible local governments to cover necessary expenditures incurred because of the COVID-19 pandemic. During fiscal year 2020, the City spent $2,123,907 in program funds to cover additional costs the City incurred during the pandemic, including teleworking equipment, personal protective equipment, and payroll. Additionally, the City spent $1,345,500 of these funds to establish a program that provided direct assistance payments to local businesses financially affected by COVID-19. The program funds also included $456,344 passed through to four subrecipients to fulfil components of the program's objectives. The portion of program funds the City passed through to the subrecipients provided emergency assistance to households financially affected by COVID-19. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include Office of the Washington State Auditor sao.wa.gov Packet Pg. 178 2.5.b understanding program requirements and monitoring the effectiveness of established controls. Activities Allowed/Allowable Costs For the CRF program, the costs that recipients submit for federal reimbursement must have been necessary for responding to the COVID-19 pandemic and not previously included in budgets prior to March 27, 2020. All costs recipients charge to the CRF program must comply with program requirements and be supported by proper documentation demonstrating costs are specifically related to COVID-19 activities. Subrecipient Monitoring Whenever the City passes on federal funding to subrecipients, federal regulations require the City to clearly identify the subaward contract as a federal award and include all applicable program requirements. Further, the City must monitor its subrecipients to ensure they comply with the terms and conditions of the federal award. To determine the appropriate level of monitoring, the City must evaluate each subrecipient's risk of noncompliance with federal requirements. For this award, monitoring would include verifying the subrecipients only provided assistance to participants who met eligibility requirements and claimed reimbursement for allowable costs. Description of Condition Activities Allowed/Allowable Costs The City established four eligibility criteria for local businesses to receive assistance payments, but it did not have a process for verifying that businesses met all of these criteria. For one of the criteria, City employees relied on each business' application and self -attestation without verifying the information was accurate to ensure businesses were eligible to receive assistance payments. Subrecipient Monitoring The City contracted with four local nonprofit organizations to administer housing assistance programs and distribute food to food -insecure individuals and households in Edmonds. The City did not include all required elements in the subawards and did not perform risk assessments or monitor each subrecipient for compliance with program requirements, as federal regulations require. We consider these deficiencies in internal controls to be material weaknesses, which led to material noncompliance. These issues were not reported as a finding in the prior audit. Office of the Washington State Auditor sao.wa.gov Packet Pg. 179 2.5.b Cause of Condition Many businesses and people experienced sudden financial hardship due to the COVID-19 pandemic. In an effort to help preserve its local economy, the City acted quickly by providing assistance payments to businesses and passing funds to nonprofit organizations it had worked with in the past for other programs. However, the CRF program was a new type of federal funding for the City, and it had not previously used federal funds to provide direct assistance payments to local businesses or passed funding through to subrecipients. As such, City employees lacked adequate experience and needed training to know they should have independently verified each business met all eligibility criteria before awarding assistance. Further, City employees were not aware of all federal requirements involved when passing funding through to subrecipients. Effect of Condition and Questioned Costs Activities Allowed/Allowable Costs Without obtaining documentation from business grant applicants to verify they met all eligibility criteria, the City cannot ensure business relief grant costs were allowable. During the audit, we gave the City the opportunity to obtain documentation from businesses to support their eligibility. In January 2022, the City hired a contractor to request and review supporting documentation from the 172 businesses that received CRF funds. We reviewed the information the contractor obtained and found the following: • Eight businesses did not respond to the City's request for financial information or, after some communication, did not provide financial information. These businesses received a total of $62,000. • Twenty-nine businesses did not meet the City's eligibility criteria, based on the information they provided. These businesses received a total of $235,500. An additional 74 businesses that received a total of $574,000 in direct business grants provided tax returns, quarterly reports, profit and loss statements or other financial information that showed a loss in revenues for the respective period. However, based on the information provided, we could not confirm a year -over -year business/revenue loss of at least 30 percent in April or May 2020, which the City's eligibility criteria required. We also could not confirm the expenditures the City charged to the program were allowable for these businesses. As such, we are questioning these costs. Office of the Washington State Auditor sao.wa.gov Packet Pg. 180 2.5.b Subrecipient Monitoring The City did not include all required information in the four subrecipient contracts, such as the subrecipient's unique entity identifier, federal award date, name of federal awarding agency, pass -through entity, contact information for awarding official of the pass -through entity, and the program's CFDA number and name. Without this information, the subrecipient is at an increased risk of not knowing the award comes from a federal program. This also increases the risk the subrecipient would not know it needs to comply with specific program requirements, which could potentially lead to spending funds for unallowable purposes. Further, without performing risk assessments and adequately monitoring subrecipients, the City cannot ensure it is performing the proper level of monitoring and that subrecipients are complying with program requirements. Because the City did not perform risk assessments and monitor the four subrecipients, we gave the City the opportunity to perform monitoring during the audit and verify if subrecipients complied with the terms and conditions of the subaward. In early 2022, the City hired a contractor to perform risk assessments and review three of the subrecipients to verify they only provided assistance to eligible participants and complied with program requirements. The City found the subrecipients did not have adequate support demonstrating participant eligibility. As a result, we are considering the costs the City passed through to subrecipients, totaling $456,344, to be unsupported payments. Recommendation We recommend the City: • Provide adequate training to staff responsible for administering federal programs • Dedicate the necessary time and resources to staying updated on program guidance and ensuring compliance with all program requirements • Verify that beneficiaries of public funds meet all of the City's eligibility criteria before awarding funds • Include all required elements in subaward agreements, assess subrecipients' risk, and monitor them accordingly to verify they are complying with the terms and conditions of the award and only providing funds to eligible participants Office of the Washington State Auditor sao.wa.gov Packet Pg. 181 2.5.b City's Response The City of Edmonds appreciates the opportunity to respond to the Washington State Auditor's Office's (SAO) conclusions. The City is committed to establishing and following effective internal controls for administering federal grants and for compliance with federal uniform guidance for grant administration, and to monitor any transactions with subrecipients to ensure compliance with federal requirements. During 2020 the City endeavored to distribute Coronavirus Relief Funds as expeditiously as possible into the community where support was most needed due to the devastating impact on residents and businesses because of the COVID-19 pandemic. We worked very hard to distribute these funds quickly and efficiently, which we believe had a very significant, positive impact on our community. In our attempts to get the grant money into the community as quickly as possible, the City relied in part upon business's self -certification ofour eligibility requirements under penalty of perjury. After distributing the CARES funds we became aware that some of the businesses to whom grants had been awarded did not meet the eligibility requirements. When we learned this we performed our own internal audit to determine the number of businesses that were not eligible. After reviewing our audit results, the SAO determined that 29 businesses who did not meet our grant requirements nevertheless submitted applications and received grants totaling $235,500. Another 8 businesses have not responded to our requests for documentation; those businesses received grants totaling $62, 000. The City is exploring various remedies that may be available and appropriate, including but not limited to civil suits and criminal prosecution, to recover this $297, 500 in grant funds or otherwise hold wrongdoers accountable for their actions. The remaining questioned costs of $574, 000 are from 74 businesses who were able to supply documentation of losses that they incurred on an annual basis, but were unable to supply information specific to April or May of 2020. Because these businesses were able to show proof of COVID-related income losses, we are not intending to pursue legal action in these cases at this time. The City acted in good faith to quickly deliver aid and assistance to our residents, following the guidance and direction available at the time from the Department of Treasury and the Department of Commerce. Overall, City staff administered this highly complex and time sensitive program in a professional manner while dealing with emergency circumstances. We acknowledge that this does not relieve the City of the Office of the Washington State Auditor sao.wa.gov Packet Pg. 182 necessity to ensure that assistance payments are distributed only to those who meet our eligibility requirements. The City will also provide training to ensure that subrecipients are evaluated and monitored sufficiently to ensure eligibility and to reduce any risk of noncompliance. We are planning to add additional staff to provide better monitoring of the distribution offuture grants funds, and we will provide staff with the time, resources, and training necessary to avoid these errors from occurring again. Auditor's Remarks We appreciate the City's commitment to resolving this finding and thank the City for its cooperation and assistance during the audit. We will review the corrective action taken during the next regular audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. Title 2 CFR Part 200, Uniform Guidance, section 332, Requirements for pass -through entities, establishes subrecipient monitoring and management requirements for pass through entities. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 42 U.S. Code of Federal Regulations (CFR) Part 801, Coronavirus Relief Fund establishes allowable costs of the program. 2 CFR Part 200, Subpart E, cost principles do not apply to the Coronavirus Relief Fund. Therefore, auditors refer to guidance and FAQs from the U.S. Department of the Treasury and the pass -through agency, the Washington State Department of Commerce, as the criteria when testing the allowability of costs under the Fund. Guidance and FAQs from both the U.S. Department of the Treasury and the Washington State Department of Commerce can be found at: https://www.commerce.wa.gov/serving- communities/local-government/covid-resiliency-grants/. These documents speak to the Office of the Washington State Auditor sao.wa.gov Packet Pg. 183 2.5.b grantors' expectation that local governments obtain documentation that supports how businesses met eligibility criteria. Office of the Washington State Auditor sao.wa.gov Packet Pg. 184 2.5.b Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards City of Edmonds January 1, 2020 through December 31, 2020 Mayor and City Council City of Edmonds Edmonds, Washington We have audited, 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, the financial statements of the governmental activities, the business -type activities, each major fund and the aggregate discretely presented component units and remaining fund information of the City of Edmonds, as of and for the year ended December 31, 2020, and the related notes to the financial statements, which collectively comprise the City's basic financial statements, and have issued our report thereon dated June 30, 2021. As discussed in Note 2 to the financial statements, during the year ended December 31, 2020, the City implemented Governmental Accounting Standards Board Statement No. 84, Fiduciary Activities and Statement No. 88, Certain Disclosures Related to Debt, including Direct Borrowings and Direct Placements. As discussed in Note 17 to the 2020 financial statements, the full extent of the COVID-19 pandemic's direct or indirect financial impact on the City is unknown. INTERNAL CONTROL OVER FINANCIAL REPORTING In planning and performing our audit of the financial statements, we considered the City's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we do not express an opinion on the effectiveness of the City's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, Office of the Washington State Auditor sao.wa.gov Packet Pg. 185 2.5.b or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the City's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. COMPLIANCE AND OTHER MATTERS As part of obtaining reasonable assurance about whether the City's financial statements are free from material misstatement, we performed tests of the City's compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. PURPOSE OF THIS REPORT The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. However, this report is a matter of public record and its distribution is not limited. It also serves to disseminate information to the public as a reporting tool to help citizens assess government operations. � 0 Pat McCarthy, State Auditor Olympia, WA June 30, 2021 Office of the Washington State Auditor sao.wa.gov Packet Pg. 186 2.5.b Report on Compliance for Each Major Federal Program and Report on Internal Control over Compliance in Accordance with the Uniform Guidance City of Edmonds January 1, 2020 through December 31, 2020 Mayor and City Council City of Edmonds Edmonds, Washington REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM We have audited the compliance of the City of Edmonds, with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Compliance Supplement that could have a direct and material effect on each of the City's major federal programs for the year ended December 31, 2020. The City's major federal programs are identified in the accompanying Schedule of Findings and Questioned Costs. Management's Responsibility Management is responsible for compliance with federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs. Auditor's Responsibility Our responsibility is to express an opinion on compliance for each of the City's major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the City's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. Office of the Washington State Auditor sao.wa.gov Packet Pg. 187 2.5.b We believe that our audit provides a reasonable basis for our adverse opinion on compliance for each major federal program. Our audit does not provide a legal determination on the City's compliance. Basis for Adverse Opinion on 21.019 - Coronavirus Relief Fund As described in Finding 2020-01 in the accompanying Schedule of Federal Award Findings and Questioned Costs, the City did not comply with requirements regarding 21.019 - Coronavirus Relief Fund for Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Subrecipient Monitoring. Compliance with such requirements is necessary, in our opinion, for the City to comply with the requirements applicable to that program. Adverse Opinion on 21.019 - Coronavirus Relief Fund In our opinion, because of the significance of the matter described in the Basis for Adverse Opinion paragraph, the City did not comply, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on 21.019 — Coronavirus Relief Fund for the year ended December 31, 2020. City's Response to Findings The City's response to the noncompliance findings identified in our audit is described in the accompanying Schedule of Federal Award Findings and Questioned Costs. The City's response was not subjected to the auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response. REPORT ON INTERNAL CONTROL OVER COMPLIANCE Management of the City is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the City's internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program in order to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the City's internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of Office of the Washington State Auditor sao.wa.gov Packet Pg. 188 2.5.b compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. We identified certain deficiencies in internal control over compliance, as described in the accompanying Schedule of Federal Award Findings and Questioned Costs as Finding 2020-001 that we consider to be a material weakness. City's Response to Findings The City's response to the internal control over compliance findings identified in our audit is described in the accompanying Schedule of Federal Award Findings and Questioned Costs. The City's response was not subjected to the auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response. Purpose of this Report The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. However, this report is a matter of public record and its distribution is not limited. It also serves to disseminate information to the public as a reporting tool to help citizens assess government operations. Pat McCarthy, State Auditor Olympia, WA March 29, 2022 Office of the Washington State Auditor sao.wa.gov Packet Pg. 189 2.5.b ■ Report on the Financial Statements City of Edmonds January 1, 2020 through December 31, 2020 Mayor and City Council City of Edmonds Edmonds, 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 discretely presented component units and remaining fund information of the City of Edmonds, as of and for the year ended December 31, 2020, 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 Office of the Washington State Auditor sao.wa.gov Packet Pg. 190 2.5.b 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. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions 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 discretely presented component units and remaining fund information of the City of Edmonds, as of December 31, 2020, 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 2 to the financial statements, in 2020, the City adopted new accounting guidance, Governmental Accounting Standards Board Statement No. 84, Fiduciary Activities and Statement No. 88, Certain Disclosures Related to Debt, including Direct Borrowings and Direct Placements. Our opinion is not modified with respect to this matter. As discussed in Note 17 to the 2020 financial statements, the full extent of the COVID-19 pandemic's direct or indirect financial impact on the City is unknown. 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 and required supplementary information listed on page 20 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 Office of the Washington State Auditor sao.wa.gov Packet Pg. 191 2.5.b 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 as a whole. The accompanying Schedule of Expenditures of Federal Awards is presented for purposes of additional analysis as required by Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance).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. OTHER REPORTING REQUIRED BY GOVERNMENT AUDITING STANDARDS In accordance with Government Auditing Standards, we have also issued our report dated June 30, 2021 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. Pat McCarthy, State Auditor Olympia, WA June 30, 2021 Office of the Washington State Auditor sao.wa.gov Packet Pg. 192 2.5.b ■ City of Edmonds January 1, 2020 through December 31, 2020 REQUIRED SUPPLEMENTARY INFORMATION Management's Discussion and Analysis — 2020 BASIC FINANCIAL STATEMENTS Statement of Net Position — 2020 Statement of Activities — 2020 Balance Sheet — Governmental Funds — 2020 Reconciliation of the Balance Sheet to the Statement of Net Position — Governmental Funds — 2020 Statement of Revenues, Expenditures and Changes in Fund Balances — Governmental Funds — 2020 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Government Funds to the Statement of Activities — 2020 Statement of Revenues, Expenditures, and Changes in Fund Balances — Budget and Actual — General Fund — 2020 Statement of Net Position — Proprietary Funds — 2020 Statement of Revenues, Expenses and Changes in Net Position — Proprietary Funds — 2020 Statement of Cash Flows — Proprietary Funds — 2020 Statement of Fiduciary Net Position — 2020 Statement of Changes in Fiduciary Net Position — 2020 Notes to the Financial Statements — 2020 REQUIRED SUPPLEMENTARY INFORMATION Firemen's Pension Fund Other Post -Employment Benefits — Schedule of Changes in Total OPEB Liability and Related Ratios — 2020 Firemen's Pension Fund — Schedule of Changes in the City's Net Pension Liability and Related Ratios — 2020 Firemen's Pension Fund — Schedule of City Contributions — 2020 Schedules of Proportionate Share of the Net Pension Liability — PERS 1, PERS 2/3, LEOFF 1, LEOFF 2 — 2020 Schedule of Employer Contributions — PERS 1, PERS 2/3, LEOFF 1, LEOFF 2 — 2020 Office of the Washington State Auditor sao.wa.gov Packet Pg. 193 2.5.b SUPPLEMENTARY AND OTHER INFORMATION Schedule of Expenditures of Federal Awards — 2020 Notes to the Schedule of Expenditures of Federal Awards — 2020 Office of the Washington State Auditor sao.wa.gov Packet Pg. 194 2.5.b x CITY OF EDMONDS CITY HALL 121 Sr AVENUE NORTH - EDMONDS, WA 98020 Aic. , ? `' 425.771.0240 + FAX 425.771.0265 CORRECTIVE ACTION PLAN FOR FINDINGS REPORTED UNDER UNIFORM GUIDANCE City of Edmonds January 1, 2020 through December 31, 2020 This schedule presents the corrective action planned by the City for findings reported in this report in accordance with Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Finding ref number: Finding caption: 2020-001 The City's internal controls were inadequate for ensuring compliance with federal requirements for allowable activities and costs and subrecipient monitoring activities. Name, address, and telephone of City contact person: Dave Turley 121 5th Avenue N. Edmonds, WA 98020 (425) 275-4688 Corrective action the auditee plans to take in response to the finding: The City will ensure that the distribution of any support payments to individuals and businesses will comply with stated eligibility requirements, and that required reporting from recipients will be obtained. Anticipated date to complete the corrective action: We have already begun implementing this corrective action and plan for it to be in place for 2021 reporting requirements. Office of the Washington State Auditor sao.wa.gov Packet Pg. 195 2.5.b The State Auditor's Office is established in the Washington State Constitution and is part of the executive branch of state government. The State Auditor is elected by the people of Washington and serves four-year terms. We work with state agencies, local governments and the public to achieve our vision of increasing trust in government by helping governments work better and deliver higher value. In fulfilling our mission to provide citizens with independent and transparent examinations of how state and local governments use public funds, we hold ourselves to those same standards by continually improving our audit quality and operational efficiency, and by developing highly engaged and committed employees. As an agency, the State Auditor's Office has the independence necessary to objectively perform audits, attestation engagements and investigations. Our work is designed to comply with professional standards as well as to satisfy the requirements of federal, state and local laws. The Office also has an extensive quality control program and undergoes regular external peer review to ensure our work meets the highest possible standards of accuracy, objectivity and clarity. Our audits look at financial information and compliance with federal, state and local laws for all local governments, including schools, and all state agencies, including institutions of higher education. In addition, we conduct performance audits and cybersecurity audits of state agencies and local governments, as well as state whistleblower, fraud and citizen hotline investigations. The results of our work are available to everyone through the more than 2,000 reports we publish each year on our website, www.sao.wa.gov. Additionally, we share regular news and other information via an email subscription service and social media channels. We take our role as partners in accountability seriously. The Office provides training and technical assistance to governments both directly and through partnerships with other governmental support organizations. Stay connected at sao.wa.gov • Find your audit team • Request public records • Search BARS manuals (GAAP and cash), and find reporting templates • Learn about our training workshops and on -demand videos • Discover which governments serve enter an address on our map • Explore public financial data with the Financial Intelligence Tool Other ways to stay in touch • Main telephone: (564) 999-0950 • Toll -free Citizen Hotline: (866) 902-3900 • Email: webmasterksao.wa. gov Office of the Washington State Auditor sao.wa.gov Packet Pg. 196 2.5.b Office of the Washington State Auditor Pat McCarthy June 30, 2021 Mayor and City Council City of Edmonds Edmonds, Washington Report on Financial Statements Please find attached our report on the City of Edmonds's financial statements. We are issuing this report for inclusion in the City's comprehensive annual financial report package, which will be issued by the City under the City's own cover. This report is in addition to our regular financial statement audit report, which will be available on our website and includes the City's basic financial statements. Sincerely, �� Iwo Pat McCarthy, State Auditor Olympia, WA Americans with Disabilities In accordance with the Americans with Disabilities Act, we will make this document available in alternative formats. For more information, please contact our Office at (564) 999-0950, TDD Relay at (800) 833-6388, or email our webmaster at webmasterksao.wa.g. Insurance Building, P.O. Box 40021 • Olympia, Washington 98504-0021 • (564) 999-0950 • Pat. McCarthy@sao.wa.gov Packet Pg. 197 2.5.b Office of the Washington State Auditor Pat McCarthy Mayor and City Council City of Edmonds Edmonds, Washington REPORT ON THE FINANCIAL STATEMENTS We have audited the accompanying financial statements of the governmental activities, the business - type activities, the aggregate discretely presented component units, each major fund and the aggregate remaining fund information of the City of Edmonds, as of and for the year ended December 31, 2020, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents. 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 Packet Pg. 198 2.5.b 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. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions 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, the aggregate discretely presented component units, each major fund and the aggregate remaining fund information of the City of Edmonds, as of December 31, 2020, 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 2 to the financial statements, in 2020, the City adopted new accounting guidance, Governmental Accounting Standards Board Statement No. 84, Fiduciary Activities and Statement No. 88 Certain Disclosures Related to Debt, including Direct Borrowings and Direct Placements. Our opinion is not modified with respect to this matter. As discussed in Note 17 to the 2020 financial statements, the full extent of the COVID-19 pandemic's direct or indirect impact on the City is unknown. 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 and required supplementary information listed in the table of contents 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. Packet Pg. 199 2.5.b 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 as a whole. The combining and individual fund financial statements and schedules are presented for the purposes of additional analysis and are 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 financial statements. This information has been subjected to 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 financial statements or to the 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. The Introductory and Statistical Sections are presented for purposes of additional analysis and are not a required part of the basic financial statements of the City. Such information has not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on it. OTHER REPORTING REQUIRED BY GOVERNMENT AUDITING STANDARDS In accordance with Government Auditing Standards, we will also issue our report dated June 30, 2021, 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. That report will be issued under separate cover in the City's Single Audit Report. 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. Sincerely, Pat McCarthy, State Auditor Olympia, WA June 30, 2021 Packet Pg. 200 2.5.b Accountability Audit Report City of Edmonds For the period January 1, 2020 through December 31, 2020 Published March 31, 2022Find out what's new at SAO by scanning this code with Report No. 1030264 ❑ your smartphone's camera Packet Pg. 201 2.5.b Office of the Washington State Auditor Pat McCarthy March 31, 2022 Mayor and City Council City of Edmonds Edmonds, Washington Report on Accountability Thank you for the opportunity to work with you to promote accountability, integrity and openness in government. The Office of the Washington State Auditor takes seriously our role of providing state and local governments with assurance and accountability as the independent auditor of public accounts. In this way, we strive to help government work better, cost less, deliver higher value and earn greater public trust. Independent audits provide essential accountability and transparency for City operations. This information is valuable to management, the governing body and public stakeholders when assessing the government's stewardship of public resources. Attached is our independent audit report on the City's compliance with applicable requirements and safeguarding of public resources for the areas we examined. We appreciate the opportunity to work with your staff and value your cooperation during the audit. Sincerely, Pat McCarthy, State Auditor Olympia, WA Americans with Disabilities In accordance with the Americans with Disabilities Act, we will make this document available in alternative formats. For more information, please contact our Office at (564) 999-0950, TDD Relay at (800) 833-6388, or email our webmaster at webmaster(a),sao.wa.go Insurance Building, P.O. Box 40021 • Olympia, Washington 98504-0021 • (564) 999-0950 • Pat. McCarthy@sao.wa.gov Packet Pg. 202 2.5.b AuditResults................................................................................................................................... 4 RelatedReports............................................................................................................................... 5 Informationabout the City.............................................................................................................. 6 About the State Auditor's Office..................................................................................................... 7 a R 3 0 0 LL a� c a� L JT W a 0 U x W 3 a ,L^ V R L d Office of the Washington State Auditor sao.wa.gov Page 3 Packet Pg. 203 2.5.b Results in brief This report describes the overall results and conclusions for the areas we examined. In those selected areas, City operations complied, in all material respects, with applicable state laws, regulations, and its own policies, and provided adequate controls over the safeguarding of public resources. In keeping with general auditing practices, we do not examine every transaction, activity, policy, internal control, or area. As a result, no information is provided on the areas that were not examined. About the audit This report contains the results of our independent accountability audit of the City of Edmonds from January 1, 2020 through December 31, 2020. Management is responsible for ensuring compliance and adequate safeguarding of public resources from fraud, loss or abuse. This includes the design, implementation and maintenance of internal controls relevant to these objectives. This audit was conducted under the authority of RCW 43.09.260, which requires the Office of the Washington State Auditor to examine the financial affairs of all local governments. Our audit involved obtaining evidence about the City's use of public resources, compliance with state laws and regulations and its own policies and procedures, and internal controls over such matters. The procedures performed were based on our assessment of risks in the areas we examined. Based on our risk assessment for the year ended December 31, 2020, the areas examined were those representing the highest risk of fraud, loss, abuse, or noncompliance. We examined the following areas during this audit period: • Accounts receivable — utility billing, adjustments and collections • Payroll — leave balances and accruals and end of employment payments • Court financial activities — evaluated design of controls for bank reconciliation process • Compliance with rental agreement contract terms including rent waivers during the COVID-19 pandemic • Financial condition — reviewing for indications of financial distress • Open public meetings — compliance with minutes, meetings and executive session requirements Office of the Washington State Auditor sao.wa.gov Page 4 Packet Pg. 204 2.5.b Financial Our opinion on the City's financial statements and compliance with federal grant program requirements is provided in a separate report, which includes the City's financial statements. That report is available on our website, http://portal.sao.wa. og v/ReportSearch. Federal grant programs We evaluated internal controls and tested compliance with the federal program requirements, as applicable, for the City's major federal program, which is listed in the Schedule of Findings and Questioned Costs section of the separate financial statement and single audit report. That report includes a federal finding regarding relief grants awarded to local businesses and inadequate monitoring of subrecipients reported. That report is available on our website, http://portal.sao.wa. og v/ReportSearch. Office of the Washington State Auditor sao.wa.gov Page 5 Packet Pg. 205 2.5.b The City of Edmonds, incorporated in 1890, is the third largest city in Snohomish County with an estimated population of 42,470 citizens. Located 15 miles north of Seattle, the City encompasses approximately nine square -miles in Snohomish County. The City provides services including: administration, police, municipal court, streets, parks and recreation, facilities, cultural arts, cemetery, planning and community development, water, wastewater collection and treatment plant management services, and sewer utility. An elected, seven -member Council governs the City with a separately elected Mayor. The Council appoints management to oversee the City's daily operations as well as its 240 employees. For fiscal year 2020, the City had expenditures of approximately $75.6 million. Primary revenue sources for the City include taxes, grants, charges for services, and fines and forfeitures. Contact information related to this report Address: City of Edmonds 121 5th Avenue N. Edmonds, WA 98020 Contact: Dave Turley, Administrative Services Director Telephone: (425) 275-4688 Website: www.edmondswa.gov Information current as of report publish date. Audit history You can find current and past http://portal.sao.wa.gov/ReportSearch. audit reports for the City of Edmonds at Office of the Washington State Auditor sao.wa.gov Page 6 Packet Pg. 206 2.5.b The State Auditor's Office is established in the Washington State Constitution and is part of the executive branch of state government. The State Auditor is elected by the people of Washington and serves four-year terms. We work with state agencies, local governments and the public to achieve our vision of increasing trust in government by helping governments work better and deliver higher value. In fulfilling our mission to provide citizens with independent and transparent examinations of how state and local governments use public funds, we hold ourselves to those same standards by continually improving our audit quality and operational efficiency, and by developing highly engaged and committed employees. As an agency, the State Auditor's Office has the independence necessary to objectively perform audits, attestation engagements and investigations. Our work is designed to comply with professional standards as well as to satisfy the requirements of federal, state and local laws. The Office also has an extensive quality control program and undergoes regular external peer review to ensure our work meets the highest possible standards of accuracy, objectivity and clarity. Our audits look at financial information and compliance with federal, state and local laws for all local governments, including schools, and all state agencies, including institutions of higher education. In addition, we conduct performance audits and cybersecurity audits of state agencies and local governments, as well as state whistleblower, fraud and citizen hotline investigations. The results of our work are available to everyone through the more than 2,000 reports we publish each year on our website, www.sao.wa.gov. Additionally, we share regular news and other information via an email subscription service and social media channels. We take our role as partners in accountability seriously. The Office provides training and technical assistance to governments both directly and through partnerships with other governmental support organizations. Stay connected at sao.wa.gov • Find your audit team • Request public records • Search BARS manuals (GAAP and cash), and find reporting templates • Learn about our training workshops and on -demand videos • Discover which governments serve you enter an address on our map • Explore public financial data with the Financial Intelligence Tool Other ways to stay in touch • Main telephone: (564) 999-0950 • Toll -free Citizen Hotline: (866) 902-3900 • Email: webmaster(d), sao.wa. goy Office of the Washington State Auditor sao.wa.gov Page 7 Packet Pg. 207 2.5.b ^` CITY OF EDMONDS CITY HALL 121 5" AVENUE NORTH - EDMONDS. WA 98020 /VC. 1 425.771.0240 • FAX 425.771.0265 June 30, 2021 Washington State Auditor's Office 15129 Main Street, Suite C 102 Mill Creek, WA 98012 To the Office of the Washington State Auditor: We are providing this letter in connection with your audit of City of Edmonds for the period from January 1, 2020 through December 31, 2020. Representations are in relation to matters existing during or subsequent to the audit period up to the date of this letter. Certain representations in this letter are described as being limited to matters that are significant or material. Information is considered significant or material if it is probable that it would change or influence the judgment of a reasonable person. We confirm, to the best of our knowledge and belief, having made appropriate inquires to be able to provide our representations, the following representations made to you during your audit. If we subsequently discover information that would change our representations related to this period, we will notify you in a timely manner. General Representations: 1. We have provided you with unrestricted access to people you wished to speak with and made available requested and relevant information of which we are aware, including: a. Financial records and related data. b. Minutes of the meetings of the governing body or summaries of actions of recent meetings for which minutes have not yet been prepared. c. Other internal or external audits, examinations, investigations or studies that might concern the objectives of the audit and the corrective action taken to address significant findings and recommendations. d. Communications from regulatory agencies, government representatives or others concerning possible material noncompliance, deficiencies in internal control or other matters that might concern the objectives of the audit. e. Related parry relationships and transactions. f. Results of our internal assessment of business risks and risks related to financial reporting, compliance and fraud. Packet Pg. 208 2.5.b 2. We acknowledge our responsibility for compliance with requirements related to confidentiality of certain information, and have notified you whenever records or data containing information subject to any confidentiality requirements were made available. 3. We acknowledge our responsibility for compliance with applicable laws, regulations, contracts and grant agreements. 4. We have identified and disclosed all laws, regulations, contracts and grant agreements that could have a direct and material effect on the determination of financial statement amounts, including legal and contractual provisions for reporting specific activities in separate funds. 5. We have complied with all material aspects of laws, regulations, contracts and grant agreements. 6. We acknowledge our responsibility for establishing and maintaining effective internal controls over compliance with applicable laws and regulations and safeguarding of public resources, including controls to prevent and detect fraud. 7. We have established adequate procedures and controls to provide reasonable assurance of safeguarding public resources and compliance with applicable laws and regulations. 8. Except as reported to you in accordance with RCW 43.09.185, we have no knowledge of any loss of public funds or assets or other illegal activity, or any allegations of fraud or suspected fraud involving management or employees. 9. In accordance with RCW 43.09.200, all transactions have been properly recorded in the financial records, notwithstanding immaterial uncorrected items as outlined in the Aggregation of Misstatements. Additional representations related to the financial statements: 10. We acknowledge our responsibility for fair presentation of financial statements and believe financial statements are fairly presented in conformity with generally accepted accounting principles in the United States of America. 11. We acknowledge our responsibility for establishing and maintaining effective internal control over financial reporting. 12. The financial statements include financial information of the primary government and all component units, fiduciary and other activity required by generally accepted accounting principles to be included in the financial reporting entity. 13. The financial statements properly classify all funds and activities. 14. All funds that meet the quantitative criteria in GASB requirements or are otherwise particularly important to financial statement users, are presented as major funds. 15. Capital assets, including infrastructure and intangible assets, are properly capitalized, reported and depreciated as applicable. Packet Pg. 209 2.5.b 16. We have no plans or intentions that may materially affect the reported value or classification of assets, liabilities or net position. 17. Revenues are appropriately classified by fund and account. 18. Expenses have been appropriately classified by fund and account, and allocations have been made on a reasonable basis. 19. Net position components (net investment in capital assets, restricted and unrestricted) and fund balance components (nonspendable, restricted, committed, assigned and unassigned) are properly classified and, as applicable, approved. 20. Significant assumptions we used in making accounting estimates are reasonable. 21. The following have been properly classified, reported and disclosed in the financial statements, as applicable: a. Interfund, internal, and intra-entity activity and balances. b. Related -party transactions, including sales, purchases, loans, transfers, leasing arrangements, and guarantees, and amounts receivable from or payable to related parties. c. Joint ventures and other related organizations. d. Guarantees under which the government is contingently liable. e. All events occurring subsequent to the fiscal year end through the date of this letter that would require adjustment to, or disclosure in, the financial statements. f. Effects of all known actual or possible litigation, claims, assessments, violations of laws, regulations, contracts or grant agreements, and other loss contingencies. 22. We have accurately disclosed to you all known actual or possible pending or threatened litigation, claims or assessments whose effects should be considered when preparing the financial statements. We have also accurately disclosed to you the nature and extent of our consultation with outside attorneys concerning litigation, claims and assessments. 23. We acknowledge our responsibility for reporting supplementary information such as the Schedule of Expenditures of Federal Awards and Combining and Individual Fund Financial Statements and Schedules in accordance with applicable requirements and believe supplementary information is fairly presented, in both form and content in accordance with those requirements. 24. We have disclosed to you all significant changes to the methods of measurement and presentation of supplementary information, reasons for any changes and all significant assumptions or interpretations underlying the measurement or presentation. Packet Pg. 210 2.5.b 25. We acknowledge our responsibility for the supplementary information required by generally accepted accounting principles in the United States (RSI) and believe RSI is measured and presented within prescribed guidelines. 26. We have disclosed to you all significant changes in the methods of measurement and presentation of RSI, reasons for any changes and all significant assumptions or interpretations underlying the measurement or presentation of the RSI. 27. We believe the effects of uncorrected financial statement misstatements summarized in the schedule of uncorrected items provided to us by the auditor are not material, both individually and in the aggregate, to each applicable opinion unit. 28. We acknowledge our responsibility not to publish any document containing the audit report with any change in the financial statements, supplementary and other information referenced in the auditor's report. We will contact the auditor if we have any needs for publishing the audit report with different content included. 29. We adequately considered the qualifications of Milliman, Inc. and agree with conclusions regarding the Firefighter's Pension and other post -employment benefits liability, which are reflected in financial statement amounts and disclosures. We provided Milliman, Inc. with accurate and complete information in response to requests and did not give or cause any instructions to be given to Milliman, Inc. with respect to the values or amounts derived in an attempt to bias their work, and we are not otherwise aware of any matters that have had an impact on the independence or objectivity of Milliman, Inc. 30. We acknowledge our responsibility for presenting Annual Comprehensive Financial Report combining statements and supplemental schedules in accordance with generally accepted accounting principles in the United States. We believe that combining statements and supplemental schedules are fairly presented, including both form and content, in accordance with those principles. We have disclosed to you all significant changes to the methods of measurement and presentation of combining statements and supplemental schedules, reasons for any changes and all significant assumptions or interpretations underlying the measurement or presentation of the combining statements and supplemental schedules. Mike Nelson Dave Turley Mayor Administrative Servic s Director Packet Pg. 211 2.5.b CITY OF EDMONDS C4TY HALL 121 r AVENUE NORTH • EDMONDS, WA 98020 ��VC, g•Yfl 425.771.0240 • FAX 425.771.0265 March 29, 2022 Washington State Auditor's Office 15129 Main Street, Suite C 102 Mill Creek, WA 98012 To the Office of the Washington State Auditor: We are providing this letter in connection with your audit of the City of Edmonds for the period from January 1, 2020 through December 31, 2020. Representations are in relation to matters existing during or subsequent to the audit period up to the date of this letter. Certain representations in this letter are described as being limited to matters that are significant or material. Information is considered significant or material if it is probable that it would change or influence the judgment of a reasonable person. We confirm, to the best of our knowledge and belief, having made appropriate inquires to be able to provide our representations, the following representations made to you during your audit. If we subsequently discover information that would change our representations related to this period, we will notify you in a timely manner. General Representations: We have provided you with unrestricted access to people you wished to speak with and made available requested and relevant information of which we are aware, including: a. Financial records and related data. b. Minutes of the meetings of the governing body or summaries of actions of recent meetings for which minutes have not yet been prepared. c. Other internal or external audits, examinations, investigations or studies that might concern the objectives of the audit and the corrective action taken to address significant findings and recommendations. d. Communications from regulatory agencies, government representatives or others concerning possible material noncompliance, deficiencies in internal control or other matters that might concern the objectives of the audit. e. Related party relationships and transactions. f. Results of our internal assessment of business risks and risks related to financial reporting, compliance and fraud. 2. We acknowledge our responsibility for compliance with requirements related to confidentiality of certain information, and have notified you whenever records or data containing information subject to any confidentiality requirements were made available. 3. We acknowledge our responsibility for compliance with applicable laws, regulations, contracts and grant agreements. Packet Pg. 212 2.5.b 4. We have identified and disclosed all laws, regulations, contracts and grant agreements that could have a direct and material effect on the determination of financial statement amounts, including legal and contractual provisions for reporting specific activities in separate funds. 5. We have complied with all material aspects of laws, regulations, contracts and grant agreements. 6. We acknowledge our responsibility for establishing and maintaining effective internal controls over compliance with applicable laws and regulations and safeguarding of public resources, including controls to prevent and detect fraud. 7. We have established adequate procedures and controls to provide reasonable assurance of safeguarding public resources and compliance with applicable laws and regulations. 8. We have no knowledge of any loss of public funds or assets or other illegal activity, or any allegations of fraud or suspected fraud involving management or employees. 9. In accordance with RCW 43.09.200, all transactions have been properly recorded in the financial records, notwithstanding immaterial uncorrected items referenced below. 10. We are responsible for taking corrective action on audit findings and have developed a corrective action plan. Additional representations related to the financial statements: 11. We acknowledge our responsibility for fair presentation of financial statements and believe financial statements are fairly presented in conformity with generally accepted accounting principles in the United States of America. 12. We acknowledge our responsibility for establishing and maintaining effective internal control over financial reporting. 13. The financial statements include financial information of the primary government and all component units, fiduciary and other activity required by generally accepted accounting principles to be included in the financial reporting entity. 14. The financial statements properly classify all funds and activities. 15. All funds that meet the quantitative criteria in GASB requirements or are otherwise particularly important to financial statement users, are presented as major funds. 16. Capital assets, including infrastructure and intangible assets, are properly capitalized, reported and depreciated as applicable. 17. We have no plans or intentions that may materially affect the reported value or classification of assets, liabilities or net position. 18. Revenues are appropriately classified by fund and account. 19. Expenses have been appropriately classified by fund and account, and allocations have been made on a reasonable basis. 20. Net position components (net investment in capital assets, restricted and unrestricted) and fund balance components (nonspendable, restricted, committed, assigned and unassigned) are properly classified and, as applicable, approved. Packet Pg. 213 2.5.b 21. Significant assumptions we used in making accounting estimates are reasonable. 22. The following have been properly classified, reported and disclosed in the financial statements, as applicable: a. Interfund, internal, and intra-entity activity and balances. b. Related -party transactions, including sales, purchases, loans, transfers, leasing arrangements, and guarantees, and amounts receivable from or payable to related parties. c. Joint ventures and other related organizations. d. Guarantees under which the government is contingently liable. e. All events occurring subsequent to the fiscal year end through the date of this letter that would require adjustment to, or disclosure in, the financial statements. f. Effects of all known actual or possible litigation, claims, assessments, violations of laws, regulations, contracts or grant agreements, and other loss contingencies. 23. We have accurately disclosed to you all known actual or possible pending or threatened litigation, claims or assessments whose effects should be considered when preparing the financial statements. We have also accurately disclosed to you the nature and extent of our consultation with outside attorneys concerning litigation, claims and assessments. 24. We acknowledge our responsibility for reporting supplementary information (the Schedule of Expenditures of Federal Awards) in accordance with applicable requirements and believe supplementary information is fairly presented, in both form and content in accordance with those requirements. 25. We have disclosed to you all significant changes to the methods of measurement and presentation of supplementary information, reasons for any changes and all significant assumptions or interpretations underlying the measurement or presentation. 26. We acknowledge our responsibility for the supplementary information required by generally accepted accounting principles in the United States (RSI) and believe RSI is measured and presented within prescribed guidelines. 27. We have disclosed to you all significant changes in the methods of measurement and presentation of RSI, reasons for any changes and all significant assumptions or interpretations underlying the measurement or presentation of the RSI. 28. We believe the effects of uncorrected financial statement misstatements summarized below are not material, both individually and in the aggregate, to each applicable opinion unit. Description Statement / Schedule Opinion Unit OPEB: The "total OPEB liability" should be allocated between current and non -current liabilities in the financial statements. Since there is no trust fund to make the benefit payments, the Statement of Net Governmental employer is making the payments. So the amounts expected to Position Activities be due within one year are current liabilities. The current portion is an estimate typicially done by the actuary. Note 2, Accounting and Reporting Changes, page 46: The Notes to the Financial disclosure of new statements should be limited to the Statements N/A statements that have a financial impact on the government. Note 13, Changes in Long -Term Liabilities, page 76: We Notes to the Financial would expect that the "Total OPEB Liability" would include a Statements N/A current portion. Packet Pg. 214 2.5.b Note 12 - Lona-term Debt (GASS 88): The Chase Bank Loan is considered a direct borrowing and should be reported under the direct borrowings table instead of with the General Obligation Bonds. Notes to the Financial N/A Statements We reviewed the City's debt service requirements table and noted it does not separately report debt service requirements for direct placements/borrowings as required per GASB 88. Depreciation Ex ep nse: We recalculated business type Statement of Net activities depreciation expense and determined it was correctly Position - Proprietary calculated and reported for all assets except asset 8847. We Funds 421/422/423 noted this asset's FY20 depreciation of $36,770 was not on the Statement of Revenues, Combined depreciation schedule. Debra Sharp, Accountant, will have Expenses, and Changes Utility Funds Eden research the cause as there is nothing in the setting that in Net Position - should be preventing this asset from running depreciation. Proprietary Funds Statement of Net Business Depreciation expense understated by $36,789, accumulated depreciation understated by $36,789 causing overall reported Position Type asset, net to be overstated b $36,789. Statement of Activities Activities Statement of Net Position - Proprietary Utility Billing The City is charging certain sewer customers Funds 421/422/423 $5.21 bi-monthly. The City's ordinance for those customers Statement of Revenues, Combined states the rate to be $5.21 per month or $10.42 bi-monthly. Expenses, and Changes Utility Funds Charges for services is understated by approximately $20,105. in Net Position - As this is an estimate, no correction should be made unless the Pro rieta Funds Statement of Net Business City decides to determine the exact amount of misstatement. Position Type Statement of Activities Activities Cash & Investments: The City's cash and investment Statement of Net Governmental reconciliation did not include the Court's year end bank cash Position Activities balance of $104,958 or any related reconciling items as the Court department did not complete their 12/31/20 Balance Sheet General Fund reconciliation and submit to the City's Finance department. Transfers: The City transferred $1.5 million from the internal General Fund Aggregate service funds to the general fund. We noted the $1.5 million Statement of Revenues, came from: • General Fund (Fund 001) - $1,124,991 (comprised of Expenditures and Remaining g Funds 996,686 general fund and 128,305 park maintenance fund) Changes in Fund Balances - Street Fund (Fund 111) - $20,385 Governmental Funds • Combined Utility Funds (Funds 421/422/423) - $334,624 • Fleet (Fund 511) - $20,000 Statement of Revenues, 421/422/423 The amounts attributable to the street fund, combined utility Expenses, and Changes Combined Combi C funds, and fleet fund should be refunded back to those funds, in Net Position - Utility Funds not the general fund. We determined transfers -in for the general Proprietary Funds fund, per the withdrawals on the B-fund spreadsheet, is overstated by $375 009. 29. We acknowledge our responsibility not to publish any document containing the audit report with any change in the financial statements, supplementary and other information referenced in the auditor's report. We will contact the auditor if we have any needs for publishing the audit report with different content included. Additional representations related to expenditures under federal grant programs: 30. We acknowledge our responsibility for complying, and have complied, with the requirements of 2 CFR § 200 Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards. Packet Pg. 215 2.5.b 31. With regards to your audit of federal grant programs, we have made available all relevant and requested information of which we are aware, including: a. All federal awards and related grant agreements (including amendments, if any), contracts with pass -through entities, service organizations and vendors, and correspondence. b. All communications from federal awarding agencies, vendors, service organizations or pass -through entities concerning possible noncompliance. c. All information regarding corrective actions taken and management decisions or follow-up work performed by federal or pass -through agencies on any findings reported in the past. d. All documentation related to the compliance requirements, including information related to federal program financial reports and claims for advances and reimbursements. e. Interpretations or other support for any situations where compliance with requirements might be questionable or unclear. 32. Except as reported by the audit, we have identified and complied with all direct and material compliance requirements of federal awards. 33. Management is responsible for establishing effective internal control and has, except as reported by the audit, maintained sufficient control over federal programs to provide reasonable assurance that awards are managed in compliance with laws, regulations, contracts or grant agreements that could have a material effect on each of our federal awards. 34. Federal program financial reports and claims for advances and reimbursements are supported by the accounting records from which the basic financial statements have been prepared, and are prepared on a basis consistent with the Schedule of Expenditures of Federal Awards. 35. Copies of federal program reports provided to you are true copies of the reports submitted, or electronically transmitted, to federal agencies or pass -through agencies, as applicable. 36. We are responsible for, and will accurately prepare, the auditee section of the Data Collection Form as required by the Uniform Guidance. Additional representations related to federal grants passed through to subreci ients: 37. We have advised our subrecipients of requirements imposed on them by Federal laws, regulations, contracts or grant agreements as well as any supplemental requirements we impose as a condition of receiving Federal awards. 38. We have monitored the activities of our subrecipients as necessary to ensure that Federal awards are used for authorized purposes in compliance with laws, regulations, contracts or grant agreements. 39. We have determined that subrecipients expending $750,000 or more in Federal awards during the subrecipient's fiscal year have met the audit requirements of 2 CFR § 200.501 for that fiscal year. Packet Pg. 216 2.5.b 40. When applicable, we have issued a management decision on audit findings within six months after receipt of the subrecipient's audit report and ensured that the subrecipient has taken appropriate and timely corrective action 41. We have considered the results of our subrecipients' audits and made any necessary adjustments to our own accounting records. l Mike Nelson Dave Turley Packet Pg. 217 Pat McCarthy New Audit Status Tool: What you need to know The Office of the Washington State Auditor has created a tool for following the status of audit findings and corrective actions. This tool is called Tracker. Local governments will follow the same basic process for responding to audit findings, butTracker will make information about findings and corrective action status easily accessible in a single location. The goals for this tool are to improve the usability of information regarding the status of audit issues and to give governments a way to quickly share their plans for resolving those issues. Benefits of Tracker Using Tracker, your government can: • Get up to speed more quickly when turnover occurs. Employees who are new or in new positions will have one stop access to prior audit issues and corrective actions, rather than having to search multiple websites and contact their auditors. This also will help ease transitions with new leaders. • Be clear about its current audit status. • Better and more quickly prepare for upcoming audits. • More easily identify and resolve issues before the audit is conducted or the audit report published. • Enter a status update at the time of the change. It is easier to note details about a change when they are top of mind instead of waiting for months to capture that information ahead of the next audit. • Show quickly that it resolved an issue - and get the credit for that expedient resolution. This could be useful for governments trying to manage perceptions regarding their stewardship of public funds. "Our vision is to increase trust in government, and Tracker does that by meeting the public's increasing expectation o government transparenc Pat McCarthy State Auditor rcU, UU, y Packet Pg. 218 Increased transparency The Tracker tool will take information that is already available and improve the usability. Update at your convenience We think you will find that using Tracker to check and update your audit status at your convenience improves efficiency, accuracy, preparation and staff transitions. The designated representative or representatives for your government can update submitted information. Timeline Our plan is for the Tracker system for local governments to begin operating in March, and to become publicly accessible by the end of 2019. Questions? If you have questions or concerns, please feel free to contact your local audit team. 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