HomeMy WebLinkAboutCity of Port Townsend 2018 & 2019 Audited Financial Statements
Published April 5, 2021
Report No. 1027957
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Financial Statements Audit Report
City of Port Townsend
For the period January 1, 2018 through December 31, 2019
Insurance Building, P.O. Box 40021 Olympia, Washington 98504-0021 (564) 999-0950 Pat.McCarthy@sao.wa.gov
Office of the Washington State Auditor
Pat McCarthy
April 5, 2021
Mayor and City Council
City of Port Townsend
Port Townsend, Washington
Report on Financial Statements
Please find attached our report on the City of Port Townsend’s financial statements.
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 webmaster@sao.wa.gov.
Office of the Washington State Auditor sao.wa.gov
TABLE OF CONTENTS
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
Government Auditing Standards..................................................................................................... 4
Independent Auditor's Report on the Financial Statements ............................................................ 7
Financial Section ........................................................................................................................... 11
About the State Auditor's Office ................................................................................................... 72
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INDEPENDENT AUDITOR’S REPORT
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 Port Townsend
January 1, 2018 through December 31, 2019
Mayor and City Council
City of Port Townsend
Port Townsend, 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
City of Port Townsend, as of and for the years ended December 31, 2019 and 2018, and the related
notes to the financial statements, which collectively comprise the City’s financial statements, and
have issued our report thereon dated March 29, 2021.
We issued an unmodified opinion on the fair presentation of the City’s financial statements in
accordance with its regulatory basis of accounting. We issued an adverse opinion on the fair
presentation with regard to accounting principles generally accepted in the United States of
America (GAAP) because the financial statements are prepared by the City using accounting
practices prescribed by state law and the State Auditor’s Budgeting, Accounting and Reporting
System (BARS) manual described in Note 1, which is a basis of accounting other than GAAP. The
effects on the financial statements of the variances between the basis of accounting described in
Note 1 and accounting principles generally accepted in the United States of America, although not
reasonably determinable, are presumed to be material.
As discussed in Note 12 to the financial statements, during the year ended December 31, 2019, the
City adopted new accounting guidance for presentation and disclosure of postemployment benefits
other than pensions, as required by the BARS Manual.
As discussed in Note 17 the 2019 financial statements, the full extent of the COVID-19 pandemic’s
direct or indirect financial impact on the City is unknown.
Page 4
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INTERNAL CONTROL OVER FINANCIAL REPORTING
In planning and performing our audits 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,
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
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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.
Pat McCarthy
State Auditor
Olympia, WA
March 29, 2021
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Office of the Washington State Auditor sao.wa.gov
INDEPENDENT AUDITOR’S REPORT
Report on the Financial Statements
City of Port Townsend
January 1, 2018 through December 31, 2019
Mayor and City Council
City of Port Townsend
Port Townsend, Washington
REPORT ON THE FINANCIAL STATEMENTS
We have audited the accompanying financial statements of the City of Port Townsend, for the
years ended December 31, 2019 and 2018, and the related notes to the financial statements, which
collectively comprise the City’s financial statements, as listed on page 11.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements
in accordance with the financial reporting provisions of state law and the Budgeting, Accounting
and Reporting System (BARS) manual prescribed by the State Auditor described in Note 1. This
includes determining that the basis of accounting is acceptable for the presentation of the financial
statements in the circumstances. Management is also responsible for 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 audits. We
conducted our audits 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
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Office of the Washington State Auditor sao.wa.gov
due to fraud or error. In making those risk assessments, the auditor considers internal control
relevant to the City’s preparation and fair presentation of the financial statements in order to design
audit procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the City’s internal control. Accordingly, we express no such
opinion. An audit also includes evaluating the appropriateness of accounting policies used and the
reasonableness of significant accounting estimates made by management, as well as evaluating the
overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinions.
Unmodified Opinion on Regulatory Basis of Accounting (BARS Manual)
As described in Note 1, the City of Port Townsend has prepared these financial statements to meet
the financial reporting requirements of state law using accounting practices prescribed by the State
Auditor’s Budgeting, Accounting and Reporting System (BARS) manual. Those accounting
practices differ from accounting principles generally accepted in the United States of America
(GAAP). The differences in these accounting practices are also described in Note 1.
In our opinion, the financial statements referred to above present fairly, in all material respects,
the cash and investments of the City of Port Townsend, and its changes in cash and investments,
for the years ended December 31, 2019 and 2018, on the basis of accounting described in Note 1.
Basis for Adverse Opinion on U.S. GAAP
Auditing standards issued by the American Institute of Certified Public Accountants (AICPA)
require auditors to formally acknowledge when governments do not prepare their financial
statements, intended for general use, in accordance with GAAP. The effects on the financial
statements of the variances between GAAP and the accounting practices the City used, as
described in Note 1, although not reasonably determinable, are presumed to be material. As a
result, we are required to issue an adverse opinion on whether the financial statements are
presented fairly, in all material respects, in accordance with GAAP.
Adverse Opinion on U.S. GAAP
The financial statements referred to above were not intended to, and in our opinion they do not,
present fairly, in accordance with accounting principles generally accepted in the United States of
America, the financial position of the City of Port Townsend, as of December 31, 2019 and 2018,
or the changes in financial position or cash flows thereof for the years then ended, due to the
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significance of the matter discussed in the above “Basis for Adverse Opinion on U.S. GAAP”
paragraph.
As discussed in Note 12 to the financial statements, during the year ended December 31, 2019, the
City adopted new accounting guidance for presentation and disclosure of postemployment benefits
other than pensions, as required by the BARS manual. Our opinion is not modified with respect to
this matter.
As discussed in Note 17 to the 2019 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
Supplementary and Other Information
Our audits were conducted for the purpose of forming opinions on the financial statements taken
as a whole. The Schedules of Liabilities are presented for purposes of additional analysis, as
required by the prescribed BARS manual. These schedules are not a required part of the 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.
The information has been subjected to the auditing procedures applied in the audit of the 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 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
March 29, 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
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Office of the Washington State Auditor sao.wa.gov
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
March 29, 2021
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FINANCIAL SECTION
City of Port Townsend
January 1, 2018 through December 31, 2019
FINANCIAL STATEMENTS
Fund Resources and Uses Arising from Cash Transactions – 2019
Fund Resources and Uses Arising from Cash Transactions – 2018
Fiduciary Fund Resources and Uses Arising from Cash Transactions – 2019
Fiduciary Fund Resources and Uses Arising from Cash Transactions – 2018
Notes to Financial Statements – 2019
Notes to Financial Statements – 2018
SUPPLEMENTARY AND OTHER INFORMATION
Schedule of Liabilities – 2019
Schedule of Liabilities – 2018
Page 11
Beginning Cash and Investments
30810 Reserved
30880 Unreserved
388 / 588 Net Adjustments
Revenues
310 Taxes
320 Licenses and Permits
330 Intergovernmental Revenues
340 Charges for Goods and Services
350 Fines and Penalties
360 Miscellaneous Revenues
Total Revenues:
Expenditures
510 General Government
520 Public Safety
530 Utilities
540 Transportation
550 Natural and Economic
Environment
560 Social Services
570 Culture and Recreation
Total Expenditures:
Excess (Deficiency) Revenues over Expenditures:
Other Increases in Fund Resources
391-393, 596 Debt Proceeds
397 Transfers-In
385 Special or Extraordinary Items
386 / 389 Custodial Activities
381, 382, 395,
398
Other Resources
Total Other Increases in Fund Resources:
Other Decreases in Fund Resources
594-595 Capital Expenditures
591-593, 599 Debt Service
597 Transfers-Out
585 Special or Extraordinary Items
586 / 589 Custodial Activities
581, 582 Other Uses
Total Other Decreases in Fund Resources:
Increase (Decrease) in Cash and Investments:
Ending Cash and Investments
5081000 Reserved
5088000 Unreserved
Total Ending Cash and Investments
Total for All
Funds
(Memo Only)
010 General
Fund
101 Drug
Enforcement
102
Contingency
Fund
719,177 ---
12,013,963 1,904,791 1,000 181,490
280,891 88,920 --
13,052,157 7,405,087 --
653,964 653,502 --
1,368,082 242,717 --
12,059,040 89,039 --
47,049 45,583 --
897,102 148,917 -2,877
28,077,394 8,584,845 -2,877
2,696,940 1,277,741 --
5,923,370 3,519,912 --
7,281,652 ---
1,171,418 ---
1,697,304 1,063,032 --
----
2,657,151 2,784 --
21,427,835 5,863,469 --
6,649,559 2,721,376 -2,877
255,271 ---
3,259,742 --500
----
----
279,727 71,035 --
3,794,740 71,035 -500
3,550,841 315,388 --
3,347,512 ---
3,293,977 2,484,077 --
----
4,607 4,607 --
310,232 68,017 --
10,507,169 2,872,089 --
(62,870)(79,678)-3,377
688,212 ---
12,262,949 1,914,033 1,000 184,867
12,951,161 1,914,033 1,000 184,867
City of Port Townsend
Fund Resources and Uses Arising from Cash Transactions
For the Year Ended December 31, 2019
The accompanying notes are an integral part of this statement.Page 12
Beginning Cash and Investments
30810 Reserved
30880 Unreserved
388 / 588 Net Adjustments
Revenues
310 Taxes
320 Licenses and Permits
330 Intergovernmental Revenues
340 Charges for Goods and Services
350 Fines and Penalties
360 Miscellaneous Revenues
Total Revenues:
Expenditures
510 General Government
520 Public Safety
530 Utilities
540 Transportation
550 Natural and Economic
Environment
560 Social Services
570 Culture and Recreation
Total Expenditures:
Excess (Deficiency) Revenues over Expenditures:
Other Increases in Fund Resources
391-393, 596 Debt Proceeds
397 Transfers-In
385 Special or Extraordinary Items
386 / 389 Custodial Activities
381, 382, 395,
398
Other Resources
Total Other Increases in Fund Resources:
Other Decreases in Fund Resources
594-595 Capital Expenditures
591-593, 599 Debt Service
597 Transfers-Out
585 Special or Extraordinary Items
586 / 589 Custodial Activities
581, 582 Other Uses
Total Other Decreases in Fund Resources:
Increase (Decrease) in Cash and Investments:
Ending Cash and Investments
5081000 Reserved
5088000 Unreserved
Total Ending Cash and Investments
110 Street
Operations
Fund
120 Library
Fund
135 Real Estate
Excise Tax
Fund
150 Lodging
Tax Fund
----
260,854 214,522 380,283 246,906
----
- 1,089,122 577,446 564,314
462---
214,448 ---
988---
-1,466 - -
19,901 57,060 6,201 3,811
235,799 1,147,648 583,647 568,125
----
----
----
611,489 - - -
- - - 366,964
----
- 1,106,528 - -
611,489 1,106,528 -366,964
(375,690)41,120 583,647 201,161
----
636,707 - - -
----
----
688---
637,395 ---
27,439 2,444 -52,205
----
174,900 -510,000 125,000
----
----
----
202,339 2,444 510,000 177,205
59,366 38,676 73,647 23,956
----
320,220 253,198 453,930 270,862
320,220 253,198 453,930 270,862
City of Port Townsend
Fund Resources and Uses Arising from Cash Transactions
For the Year Ended December 31, 2019
The accompanying notes are an integral part of this statement.Page 13
Beginning Cash and Investments
30810 Reserved
30880 Unreserved
388 / 588 Net Adjustments
Revenues
310 Taxes
320 Licenses and Permits
330 Intergovernmental Revenues
340 Charges for Goods and Services
350 Fines and Penalties
360 Miscellaneous Revenues
Total Revenues:
Expenditures
510 General Government
520 Public Safety
530 Utilities
540 Transportation
550 Natural and Economic
Environment
560 Social Services
570 Culture and Recreation
Total Expenditures:
Excess (Deficiency) Revenues over Expenditures:
Other Increases in Fund Resources
391-393, 596 Debt Proceeds
397 Transfers-In
385 Special or Extraordinary Items
386 / 389 Custodial Activities
381, 382, 395,
398
Other Resources
Total Other Increases in Fund Resources:
Other Decreases in Fund Resources
594-595 Capital Expenditures
591-593, 599 Debt Service
597 Transfers-Out
585 Special or Extraordinary Items
586 / 589 Custodial Activities
581, 582 Other Uses
Total Other Decreases in Fund Resources:
Increase (Decrease) in Cash and Investments:
Ending Cash and Investments
5081000 Reserved
5088000 Unreserved
Total Ending Cash and Investments
171 Fire and
EMS Fund
180 Affordable
Housing Fund
190 Community
Dev Block
Grants
199 Community
Services Fund
----
4,622 21,080 176,617 101,006
- - - 2,549
2,403,048 9,719 - 605,128
----
- - 16,090 -
- - - 200,160
----
3,030 386 2,958 107,998
2,406,078 10,105 19,048 913,286
---619,444
2,403,458 ---
----
----
--3,315-
----
--- 1,523,677
2,403,458 -3,315 2,143,121
2,620 10,105 15,733 (1,229,835)
----
- - - 1,189,933
----
----
- - - 109,353
---1,299,286
---37,553
----
----
----
----
---19,329
---56,882
2,620 10,105 15,733 12,569
----
7,242 31,185 192,350 116,124
7,242 31,185 192,350 116,124
City of Port Townsend
Fund Resources and Uses Arising from Cash Transactions
For the Year Ended December 31, 2019
The accompanying notes are an integral part of this statement.Page 14
Beginning Cash and Investments
30810 Reserved
30880 Unreserved
388 / 588 Net Adjustments
Revenues
310 Taxes
320 Licenses and Permits
330 Intergovernmental Revenues
340 Charges for Goods and Services
350 Fines and Penalties
360 Miscellaneous Revenues
Total Revenues:
Expenditures
510 General Government
520 Public Safety
530 Utilities
540 Transportation
550 Natural and Economic
Environment
560 Social Services
570 Culture and Recreation
Total Expenditures:
Excess (Deficiency) Revenues over Expenditures:
Other Increases in Fund Resources
391-393, 596 Debt Proceeds
397 Transfers-In
385 Special or Extraordinary Items
386 / 389 Custodial Activities
381, 382, 395,
398
Other Resources
Total Other Increases in Fund Resources:
Other Decreases in Fund Resources
594-595 Capital Expenditures
591-593, 599 Debt Service
597 Transfers-Out
585 Special or Extraordinary Items
586 / 589 Custodial Activities
581, 582 Other Uses
Total Other Decreases in Fund Resources:
Increase (Decrease) in Cash and Investments:
Ending Cash and Investments
5081000 Reserved
5088000 Unreserved
Total Ending Cash and Investments
200 G.O. Debt
Service
301 General CIP
Projects
411 Water
Sewer Fund 412 Storm Fund
--719,177 -
89,905 1,852,071 4,669,691 168,160
-73,883 115,539 -
398,293 ---
----
-494,597 400,230 -
-- 8,341,036 943,540
----
7,976 97,641 386,104 3,303
406,269 592,238 9,127,370 946,843
5,800 -493,653 -
----
-- 5,160,758 736,830
-96,704 - -
-263,993 --
----
----
5,800 360,697 5,654,411 736,830
400,469 231,541 3,472,959 210,013
---255,271
1,283,900 126,035 22,000 -
----
----
-92,100 3,051 -
1,283,900 218,135 25,051 255,271
- 1,670,235 956,004 276,157
1,677,451 9,514 1,468,360 192,187
----
----
----
-56,588 166,298 -
1,677,451 1,736,337 2,590,662 468,344
6,918 (1,286,661)907,348 (3,060)
--688,212 -
96,823 639,293 5,723,543 165,100
96,823 639,293 6,411,755 165,100
City of Port Townsend
Fund Resources and Uses Arising from Cash Transactions
For the Year Ended December 31, 2019
The accompanying notes are an integral part of this statement.Page 15
Beginning Cash and Investments
30810 Reserved
30880 Unreserved
388 / 588 Net Adjustments
Revenues
310 Taxes
320 Licenses and Permits
330 Intergovernmental Revenues
340 Charges for Goods and Services
350 Fines and Penalties
360 Miscellaneous Revenues
Total Revenues:
Expenditures
510 General Government
520 Public Safety
530 Utilities
540 Transportation
550 Natural and Economic
Environment
560 Social Services
570 Culture and Recreation
Total Expenditures:
Excess (Deficiency) Revenues over Expenditures:
Other Increases in Fund Resources
391-393, 596 Debt Proceeds
397 Transfers-In
385 Special or Extraordinary Items
386 / 389 Custodial Activities
381, 382, 395,
398
Other Resources
Total Other Increases in Fund Resources:
Other Decreases in Fund Resources
594-595 Capital Expenditures
591-593, 599 Debt Service
597 Transfers-Out
585 Special or Extraordinary Items
586 / 589 Custodial Activities
581, 582 Other Uses
Total Other Decreases in Fund Resources:
Increase (Decrease) in Cash and Investments:
Ending Cash and Investments
5081000 Reserved
5088000 Unreserved
Total Ending Cash and Investments
423 Golf Course
Fund
500 Fleet
Replacement
Fund
540 Public
Works
Administration
555 Engineering
Services
----
27,728 1,499,764 28,847 159,548
----
----
----
----
- 1,179,432 526,601 778,244
----
8,653 36,246 1,344 2,299
8,653 1,215,678 527,945 780,543
-299,634 --
----
--508,691 875,373
-463,225 --
----
----
24,162 ---
24,162 762,859 508,691 875,373
(15,509)452,819 19,254 (94,830)
----
----
----
----
-3,500 - -
-3,500 --
-204,289 -9,127
----
----
----
----
----
-204,289 -9,127
(15,509)252,030 19,254 (103,957)
----
12,219 1,751,794 48,101 55,591
12,219 1,751,794 48,101 55,591
City of Port Townsend
Fund Resources and Uses Arising from Cash Transactions
For the Year Ended December 31, 2019
The accompanying notes are an integral part of this statement.Page 16
Beginning Cash and Investments
30810 Reserved
30880 Unreserved
388 / 588 Net Adjustments
Revenues
310 Taxes
320 Licenses and Permits
330 Intergovernmental Revenues
340 Charges for Goods and Services
350 Fines and Penalties
360 Miscellaneous Revenues
Total Revenues:
Expenditures
510 General Government
520 Public Safety
530 Utilities
540 Transportation
550 Natural and Economic
Environment
560 Social Services
570 Culture and Recreation
Total Expenditures:
Excess (Deficiency) Revenues over Expenditures:
Other Increases in Fund Resources
391-393, 596 Debt Proceeds
397 Transfers-In
385 Special or Extraordinary Items
386 / 389 Custodial Activities
381, 382, 395,
398
Other Resources
Total Other Increases in Fund Resources:
Other Decreases in Fund Resources
594-595 Capital Expenditures
591-593, 599 Debt Service
597 Transfers-Out
585 Special or Extraordinary Items
586 / 589 Custodial Activities
581, 582 Other Uses
Total Other Decreases in Fund Resources:
Increase (Decrease) in Cash and Investments:
Ending Cash and Investments
5081000 Reserved
5088000 Unreserved
Total Ending Cash and Investments
595
Unemployment
Self-Insurance
-
25,078
-
-
-
-
-
-
397
397
668
-
-
-
-
-
-
668
(271)
-
667
-
-
-
667
-
-
-
-
-
-
-
396
-
25,474
25,474
City of Port Townsend
Fund Resources and Uses Arising from Cash Transactions
For the Year Ended December 31, 2019
The accompanying notes are an integral part of this statement.Page 17
Beginning Cash and Investments
30810 Reserved
30880 Unreserved
388 / 588 Net Adjustments
Revenues
310 Taxes
320 Licenses and Permits
330 Intergovernmental Revenues
340 Charges for Goods and Services
350 Fines and Penalties
360 Miscellaneous Revenues
Total Revenues:
Expenditures
510 General Government
520 Public Safety
530 Utilities
540 Transportation
550 Natural and Economic
Environment
560 Social Services
570 Culture and Recreation
Total Expenditures:
Excess (Deficiency) Revenues over Expenditures:
Other Increases in Fund Resources
391-393, 596 Debt Proceeds
397 Transfers-In
385 Special or Extraordinary Items
386 / 389 Custodial Activities
381, 382, 395,
398
Other Resources
Total Other Increases in Fund Resources:
Other Decreases in Fund Resources
594-595 Capital Expenditures
591-593, 599 Debt Service
597 Transfers-Out
585 Special or Extraordinary Items
586 / 589 Custodial Activities
581, 582 Other Uses
Total Other Decreases in Fund Resources:
Increase (Decrease) in Cash and Investments:
Ending Cash and Investments
5081000 Reserved
5088000 Unreserved
Total Ending Cash and Investments
Total for All
Funds
(Memo Only)
010 General
Fund
101 Drug
Enforcement
102
Contingency
Fund
1,786,451 ---
12,418,926 1,776,966 557 170,786
----
12,996,531 7,422,114 --
610,867 610,405 --
1,532,452 287,813 --
11,782,180 130,927 --
60,223 58,811 --
1,190,220 112,873 -1,704
28,172,473 8,622,943 -1,704
2,520,079 1,130,600 --
5,810,229 3,440,760 --
6,423,194 ---
1,198,033 ---
1,518,626 1,075,069 --
----
2,549,471 6,345 --
20,019,632 5,652,774 --
8,152,841 2,970,169 -1,704
4,734,931 ---
4,152,842 4,007 443 9,000
----
29,273 960 --
296,070 10,800 --
9,213,116 15,767 443 9,000
10,524,589 63,196 --
3,850,461 ---
4,184,321 2,785,795 --
----
28,823 9,120 --
250,000 ---
18,838,194 2,858,111 --
(1,472,237)127,825 443 10,704
719,177 ---
12,013,963 1,904,791 1,000 181,490
12,733,140 1,904,791 1,000 181,490
City of Port Townsend
Fund Resources and Uses Arising from Cash Transactions
For the Year Ended December 31, 2018
The accompanying notes are an integral part of this statement.Page 18
Beginning Cash and Investments
30810 Reserved
30880 Unreserved
388 / 588 Net Adjustments
Revenues
310 Taxes
320 Licenses and Permits
330 Intergovernmental Revenues
340 Charges for Goods and Services
350 Fines and Penalties
360 Miscellaneous Revenues
Total Revenues:
Expenditures
510 General Government
520 Public Safety
530 Utilities
540 Transportation
550 Natural and Economic
Environment
560 Social Services
570 Culture and Recreation
Total Expenditures:
Excess (Deficiency) Revenues over Expenditures:
Other Increases in Fund Resources
391-393, 596 Debt Proceeds
397 Transfers-In
385 Special or Extraordinary Items
386 / 389 Custodial Activities
381, 382, 395,
398
Other Resources
Total Other Increases in Fund Resources:
Other Decreases in Fund Resources
594-595 Capital Expenditures
591-593, 599 Debt Service
597 Transfers-Out
585 Special or Extraordinary Items
586 / 589 Custodial Activities
581, 582 Other Uses
Total Other Decreases in Fund Resources:
Increase (Decrease) in Cash and Investments:
Ending Cash and Investments
5081000 Reserved
5088000 Unreserved
Total Ending Cash and Investments
110 Street 120 Library
135 Real Estate
Excise Tax
Fund
150 Lodging
Tax
----
380,772 240,915 301,052 252,500
----
- 1,068,190 615,768 534,185
462---
221,354 ---
759---
-1,412 - -
11,834 7,784 3,463 1,616
234,409 1,077,386 619,231 535,801
---12,838
----
----
665,025 ---
---403,557
----
- 1,028,299 --
665,025 1,028,299 -416,395
(430,616)49,087 619,231 119,406
----
627,707 - - -
----
8,111---
----
635,818 ---
150,220 75,480 --
----
174,900 -540,000 125,000
----
----
----
325,120 75,480 540,000 125,000
(119,918)(26,393)79,231 (5,594)
----
260,854 214,522 380,283 246,906
260,854 214,522 380,283 246,906
City of Port Townsend
Fund Resources and Uses Arising from Cash Transactions
For the Year Ended December 31, 2018
The accompanying notes are an integral part of this statement.Page 19
Beginning Cash and Investments
30810 Reserved
30880 Unreserved
388 / 588 Net Adjustments
Revenues
310 Taxes
320 Licenses and Permits
330 Intergovernmental Revenues
340 Charges for Goods and Services
350 Fines and Penalties
360 Miscellaneous Revenues
Total Revenues:
Expenditures
510 General Government
520 Public Safety
530 Utilities
540 Transportation
550 Natural and Economic
Environment
560 Social Services
570 Culture and Recreation
Total Expenditures:
Excess (Deficiency) Revenues over Expenditures:
Other Increases in Fund Resources
391-393, 596 Debt Proceeds
397 Transfers-In
385 Special or Extraordinary Items
386 / 389 Custodial Activities
381, 382, 395,
398
Other Resources
Total Other Increases in Fund Resources:
Other Decreases in Fund Resources
594-595 Capital Expenditures
591-593, 599 Debt Service
597 Transfers-Out
585 Special or Extraordinary Items
586 / 589 Custodial Activities
581, 582 Other Uses
Total Other Decreases in Fund Resources:
Increase (Decrease) in Cash and Investments:
Ending Cash and Investments
5081000 Reserved
5088000 Unreserved
Total Ending Cash and Investments
171 Fire and
EMS
180 Affordable
Housing Fund
190 Community
Dev Block
Grants
199 Community
Services
----
2,525 10,922 168,421 88,594
----
2,369,499 10,000 - 571,127
----
- - 46,519 -
- - - 194,916
----
2,067 158 1,677 68,514
2,371,566 10,158 48,196 834,557
---524,740
2,369,469 ---
----
----
--40,000 -
----
--- 1,491,611
2,369,469 -40,000 2,016,351
2,097 10,158 8,196 (1,181,794)
----
- - - 1,196,009
----
- - - 20,202
---637
---1,216,848
---3,474
----
---1,250
----
---17,918
----
---22,642
2,097 10,158 8,196 12,412
----
4,622 21,080 176,617 101,006
4,622 21,080 176,617 101,006
City of Port Townsend
Fund Resources and Uses Arising from Cash Transactions
For the Year Ended December 31, 2018
The accompanying notes are an integral part of this statement.Page 20
Beginning Cash and Investments
30810 Reserved
30880 Unreserved
388 / 588 Net Adjustments
Revenues
310 Taxes
320 Licenses and Permits
330 Intergovernmental Revenues
340 Charges for Goods and Services
350 Fines and Penalties
360 Miscellaneous Revenues
Total Revenues:
Expenditures
510 General Government
520 Public Safety
530 Utilities
540 Transportation
550 Natural and Economic
Environment
560 Social Services
570 Culture and Recreation
Total Expenditures:
Excess (Deficiency) Revenues over Expenditures:
Other Increases in Fund Resources
391-393, 596 Debt Proceeds
397 Transfers-In
385 Special or Extraordinary Items
386 / 389 Custodial Activities
381, 382, 395,
398
Other Resources
Total Other Increases in Fund Resources:
Other Decreases in Fund Resources
594-595 Capital Expenditures
591-593, 599 Debt Service
597 Transfers-Out
585 Special or Extraordinary Items
586 / 589 Custodial Activities
581, 582 Other Uses
Total Other Decreases in Fund Resources:
Increase (Decrease) in Cash and Investments:
Ending Cash and Investments
5081000 Reserved
5088000 Unreserved
Total Ending Cash and Investments
200 G.O. Debt
Service 301 CIP Street
411 Water
Sewer CIP
412 Storm
Capital Fund
-- 1,786,451 -
86,746 3,090,484 4,682,314 147,120
----
405,648 ---
----
-976,199 567 -
-- 7,816,815 859,233
----
5,502 309,316 628,820 1,791
411,150 1,285,515 8,446,202 861,024
1,500 1,500 525,089 -
----
-- 5,228,398 669,775
-39,489 - -
----
----
----
1,500 40,989 5,753,487 669,775
409,650 1,244,526 2,692,715 191,249
- 1,643,822 2,653,749 437,360
1,257,400 95,330 25,000 -
----
----
-26,451 258,182 -
1,257,400 1,765,603 2,936,931 437,360
- 3,994,047 4,001,578 607,569
1,663,891 4,495 2,182,075 -
--524,105 -
----
--1,785-
-250,000 --
1,663,891 4,248,542 6,709,543 607,569
3,159 (1,238,413)(1,079,897)21,040
--719,177 -
89,905 1,852,071 4,669,691 168,160
89,905 1,852,071 5,388,868 168,160
City of Port Townsend
Fund Resources and Uses Arising from Cash Transactions
For the Year Ended December 31, 2018
The accompanying notes are an integral part of this statement.Page 21
Beginning Cash and Investments
30810 Reserved
30880 Unreserved
388 / 588 Net Adjustments
Revenues
310 Taxes
320 Licenses and Permits
330 Intergovernmental Revenues
340 Charges for Goods and Services
350 Fines and Penalties
360 Miscellaneous Revenues
Total Revenues:
Expenditures
510 General Government
520 Public Safety
530 Utilities
540 Transportation
550 Natural and Economic
Environment
560 Social Services
570 Culture and Recreation
Total Expenditures:
Excess (Deficiency) Revenues over Expenditures:
Other Increases in Fund Resources
391-393, 596 Debt Proceeds
397 Transfers-In
385 Special or Extraordinary Items
386 / 389 Custodial Activities
381, 382, 395,
398
Other Resources
Total Other Increases in Fund Resources:
Other Decreases in Fund Resources
594-595 Capital Expenditures
591-593, 599 Debt Service
597 Transfers-Out
585 Special or Extraordinary Items
586 / 589 Custodial Activities
581, 582 Other Uses
Total Other Decreases in Fund Resources:
Increase (Decrease) in Cash and Investments:
Ending Cash and Investments
5081000 Reserved
5088000 Unreserved
Total Ending Cash and Investments
423 Golf Course
Fund
500 Equipment
Rental 540 PW Admin
555 Engineering
Services
----
42,296 714,117 26,226 210,781
----
----
----
----
- 1,270,799 553,053 955,678
----
8,648 14,227 7,860 2,120
8,648 1,285,026 560,913 957,798
-290,977 --
----
--525,021 -
-493,519 --
----
----
23,216 ---
23,216 784,496 525,021 -
(14,568)500,530 35,892 957,798
----
- 905,111 - -
----
----
----
-905,111 --
-619,994 - 1,009,031
----
--33,271 -
----
----
----
-619,994 33,271 1,009,031
(14,568)785,647 2,621 (51,233)
----
27,728 1,499,764 28,847 159,548
27,728 1,499,764 28,847 159,548
City of Port Townsend
Fund Resources and Uses Arising from Cash Transactions
For the Year Ended December 31, 2018
The accompanying notes are an integral part of this statement.Page 22
Beginning Cash and Investments
30810 Reserved
30880 Unreserved
388 / 588 Net Adjustments
Revenues
310 Taxes
320 Licenses and Permits
330 Intergovernmental Revenues
340 Charges for Goods and Services
350 Fines and Penalties
360 Miscellaneous Revenues
Total Revenues:
Expenditures
510 General Government
520 Public Safety
530 Utilities
540 Transportation
550 Natural and Economic
Environment
560 Social Services
570 Culture and Recreation
Total Expenditures:
Excess (Deficiency) Revenues over Expenditures:
Other Increases in Fund Resources
391-393, 596 Debt Proceeds
397 Transfers-In
385 Special or Extraordinary Items
386 / 389 Custodial Activities
381, 382, 395,
398
Other Resources
Total Other Increases in Fund Resources:
Other Decreases in Fund Resources
594-595 Capital Expenditures
591-593, 599 Debt Service
597 Transfers-Out
585 Special or Extraordinary Items
586 / 589 Custodial Activities
581, 582 Other Uses
Total Other Decreases in Fund Resources:
Increase (Decrease) in Cash and Investments:
Ending Cash and Investments
5081000 Reserved
5088000 Unreserved
Total Ending Cash and Investments
595
Unemployment
Self-Insurance
-
24,832
-
-
-
-
-
-
246
246
32,835
-
-
-
-
-
-
32,835
(32,589)
-
32,835
-
-
-
32,835
-
-
-
-
-
-
-
246
-
25,078
25,078
City of Port Townsend
Fund Resources and Uses Arising from Cash Transactions
For the Year Ended December 31, 2018
The accompanying notes are an integral part of this statement.Page 23
308 Beginning Cash and Investments
388 & 588 Net Adjustments
310-390 Additions
510-590 Deductions
Net Increase (Decrease) in Cash and
Investments:
508 Ending Cash and Investments
Total for All
Funds
(Memo Only)
Pension/OPEB
Trust Fund
Private-Purpose
Trust Custodial
482,864 246,381 2,549 233,934
(238,599)-(2,549)(236,050)
120,105 38,299 -81,806
106,060 25,809 -80,251
14,045 12,490 -1,555
258,310 258,871 -(561)
City of Port Townsend
Fiduciary Fund Resources and Uses Arising from Cash Transactions
For the Year Ended December 31, 2019
The accompanying notes are an integral part of this statement.
Page 24
308 Beginning Cash and Investments
388 & 588 Net Adjustments
310-390 Additions
510-590 Deductions
Net Increase (Decrease) in Cash and
Investments:
508 Ending Cash and Investments
Total for All
Funds
(Memo Only)
Pension/OPEB
Trust Fund
Private-Purpose
Trust Custodial
312,008 231,925 2,549 77,534
----
327,329 36,686 -290,643
156,473 22,230 -134,243
170,856 14,456 -156,400
482,864 246,381 2,549 233,934
City of Port Townsend
Fiduciary Fund Resources and Uses Arising from Cash Transactions
For the Year Ended December 31, 2018
The accompanying notes are an integral part of this statement.
Page 25
City of Port Townsend
Notes to the Financial Statements
For the Year Ended December 31, 2019
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The City of Port Townsend was incorporated on January 16, 1860 and operates under the laws of the
State of Washington applicable to a non-charter code city. The city is a general-purpose local
government and provides police and fire protection, water, sewer, storm drainage, waste management,
as well as maintaining parks, streets, and a library for use by its citizens.
The City of Port Townsend reports financial activity in accordance with the Cash Basis Budgeting,
Accounting and Reporting System (BARS) Manual prescribed by the State Auditor’s Office under the
authority of Washington State law, Chapter 43.09 RCW. This manual prescribes a financial reporting
framework that differs from generally accepted accounting principles (GAAP) in the following manner:
x Financial transactions are recognized on a cash basis of accounting as described below.
x Component units are required to be disclosed but are not included in the financial statements.
x Government-wide statements, as defined in GAAP, are not presented.
x All funds are presented, rather than a focus on major funds.
x The Schedule of Liabilities is required to be presented with the financial statements as
supplementary information.
x Supplementary information required by GAAP is not presented.
x Ending balances are not presented using the classifications defined in GAAP.
A. Fund Accounting
Financial transactions of the government are reported in individual funds. Each fund uses a
separate set of self-balancing accounts that comprises its cash and investments, revenues and
expenditures. The government’s resources are allocated to and accounted for in individual funds
depending on their intended purpose. Each fund is reported as a separate column in the financial
statements, except for fiduciary funds, which are presented by fund types. The total column is
presented as “memo only” because any interfund activities are not eliminated.
The following fund types are used:
GOVERNMENTAL FUND TYPES:
General Fund (Fund 010):
This fund is the primary operating fund of the city. It accounts for all financial resources except
those required or elected to be accounted for in another fund.
Page 26
Special Revenue Funds (Funds in the 100 series):
These funds account for specific revenue sources derived from specific taxes, grants or other
sources, which are restricted or committed to expenditures for specified purposes of the city.
Debt Service Funds (Funds in the 200 series):
These funds account for the financial resources that are restricted, committed, or assigned to
expenditures for principal, interest and related costs on general long-term debt.
Capital Projects Funds (Funds in the 300 series):
These funds account for financial resources which are restricted, committed, or assigned for the
acquisition or construction of capital facilities or other capital assets.
PROPRIETARY FUND TYPES:
Enterprise Funds (Funds in the 400 series):
These funds account for operations that provide goods or services to the general public and are
supported primarily through user charges.
Prior to 2016, the City reported its Golf Course Fund as a Fiduciary Fund. The activities of this fund
are supported by user charges to support capital improvements, maintenance and repairs, and
other operating expenditures of the Golf Course and was reassigned as an Enterprise Fund.
Internal Service Funds (Funds in the 500 series):
These funds account for operations that provide goods or services to other departments or funds
of the city or other governmental units on a cost reimbursement basis.
FIDUCIARY FUND TYPES:
Fiduciary funds account for assets held by the government in a trustee capacity or as an agent on
behalf of others.
Pension (and Other Employee Benefit) Trust Funds (Fund 610):
Pension funds are used to report fiduciary activities for pension and Other Post-Employment
Benefits (OPEB) plans administered through a trust. This fund is used to account for financial
resources to pay retiree benefits related to the Fire Fighters’ Retirement System (Firemen’s
Pension).
Private Purpose Trust:
These funds report all trust arrangements under which principal and income benefit individuals,
private organizations and other governments. The City currently does not have any of these funds.
Page 27
Custodial Funds (Funds 631):
These funds are used to account for assets that the city holds on behalf of others in a custodial
capacity. The City’s custodial (Fund 631) is used for miscellaneous pass through deposits.
B. Basis of Accounting and Measurement Focus
Financial statements are prepared using the cash basis of accounting and measurement focus.
Revenues are recognized when cash is received, and expenditures are recognized when paid.
In accordance with state law the City of Port Townsend also recognizes expenditures paid during
twenty days after the close of the fiscal year for claims incurred during the previous period.
Purchases of capital assets are expensed during the year of acquisition. There is no capitalization
of capital assets, nor allocation of depreciation expense. Inventory is expensed when purchased.
C. Cash and Investments
See Note 3 – Deposits and Investments
D. Capital Assets
The city is responsible for stewardship of public resources and as such, has policies and procedures
in place to track, demonstrate accountability, and ensure security of all assets.
Capital assets are assets with an initial individual cost of more than $5,000 and an estimated useful
life in excess of one year. Operating under a cash basis, capital assets and inventory are recorded
as capital expenditures when purchased; because the entire expenditure is recognized in the period
when the cash outflow occurs, the reporting of depreciation accounts is not appropriate.
Capital Improvements are defined as projects to create, expand, or modify a capital facility or
infrastructure. The project may include design, permitting, environmental analysis, land
acquisition, construction, landscaping, site improvements, initial furnishings, and equipment.
E. Compensated Absences
Vacation leave may be accumulated up to 240 hours for regular employees and 360 hours for
department heads. Vacation leave is payable upon separation or retirement. Sick leave may be
accumulated up to 1,440 hours. Upon separation or retirement em ployees do not receive payment
for unused sick leave. Payments related to leave are recognized when paid. The compensated
absence balances decreased by $54,529 from 2018 to 2019, ending at $473,073 for the year.
F. Long-Term Debt
See Note 5 – Debt Service Requirements
G. Reserved Portion of Ending Cash and Investments
Page 28
Beginning and Ending Cash and Investments is reported as reserved when it is subject to
restrictions on use imposed by external parties or due to internal commitments established by the
City Council through a formal action (e.g. ordinance or resolution). When expenditures that meet
these restrictions are incurred, the city intends to use reserved resources first before using
unreserved amounts.
Reservations of Ending Cash and Investments consist of $688,212 as of December 31, 2019. These
funds were reserved by Trust in 1956 for system replacement or improvements related to the
Olympic Gravity Water System Pipeline (Ordinance 1321).
Page 29
NOTE 2 – BUDGET COMPLIANCE
The city adopts annual appropriated budgets for all funds. These budgets are appropriated at the fund
level. The budget constitutes the legal authority for expenditures at that level. Annual appropriations
for these funds lapse at the fiscal year end.
Annual appropriated budgets are adopted on the same basis of accounting as used for financial
reporting.
The appropriated and actual expenditures for the legally adopted budgets were as follow:
Budgeted amounts are authorized to be transferred within any fund/object classes within
departments; however, any revisions that alter the total expenditures of a fund, or impact the number
of authorized employee positions, salary ranges, hours, or other conditions of employment must be
approved by the city council.
Final Appropriated Actual
Amounts Expenditures Variance
General 10,286,457$ 10,166,384$ 120,073$
Street 930,573$ 813,828$ 116,745$
Library 1,161,673$ 1,108,971$ 52,702$
Real Estate Excise Tax Fund 510,000$ 510,000$ -$
Lodging Tax 573,536$ 544,168$ 29,368$
Fire & EMS Service 2,415,000$ 2,403,458$ 11,542$
Affordable Housing Fund 10,000$ -$ 10,000$
Community Development Block Grants 15,000$ 3,315$ 11,685$
Community Services 2,241,633$ 2,200,006$ 41,627$
GO Debt Service 1,689,855$ 1,683,251$ 6,604$
General Capital Improvement Funds 4,669,827$ 3,109,005$ 1,560,822$
Water/Sewer Utility Funds 11,570,291$ 10,087,420$ 1,482,871$
Storm water Operations & Storm Capital Funds 2,064,150$ 1,324,103$ 740,047$
Golf Course Fund 24,229$ 24,162$ 67$
Equipment Rental 1,072,310$ 967,148$ 105,162$
Public Work & Admin 594,272$ 508,692$ 85,580$
Engineering Service Fund 982,310$ 884,498$ 97,812$
Unemployment Self Insurance 20,000$ 668$ 19,332$
Firemen's Pension 26,179$ 25,809$ 370$
Custodial Funds -$ 319,023$ (319,023)$
TOTAL 40,857,295$ 36,683,910$ 4,173,385$
FISCAL YEAR 2019
Page 30
NOTE 3 – DEPOSITS AND INVESTMENTS
Deposits and investments by type at December 31, 2019 are as follows:
It is the city’s policy to invest all temporary cash surpluses. The interest on these investments is
prorated to the various funds.
Investments in the State Local Investment Pool (LGIP)
The city is a voluntary participant in the Local Government Investment Pool, an external investment
pool operated by the Washington State Treasurer. The pool is not rated and not registered with SEC.
Rather, oversight is provided by the State Finance Committee in accordance with Chapter 43.250 RCW.
Investments in the LGIP are reported at amortized cost, which is the same as the value of the pool per
share. The LGIP does not impose any restrictions on participant withdrawals.
The Office of the State Treasurer prepares a stand-alone financial report for the pool. A copy of the
report is available from the Office of the State Treasurer, PO Box 40200, Olympia, Washington 98504-
0200, online at www.tre.wa.gov.
Investments in U.S. Government Securities
The city has invested a portion of the water and sewer utility funds in U.S. Government Securities at
U.S. Bank, administered by ProEquities Inc., which is registered with the U.S. Securities and Exchange
Commission (SEC) and the Municipal Securities Rulemaking Board (MSRB). ProEquities Inc. is subject
to the regulations and rules on municipal securities established by the SEC and MSRB. U.S. Government
Securities are reported at original cost. The weighted average maturity of these securities is 2.87 years.
Type of Deposit or Investment
City's own deposits
and investments
Deposits and investments
held by the city as a
custodian for other
governments or
organization Total
Bank Deposits 2,703,219$ 62,023$ 2,765,242$
Certificates of Deposit - -
Local Government Investment Pool 7,690,336 196,287 7,886,623
U.S. Government Securities 2,557,606 2,557,606
Total 12,951,161$ 258,310$ 13,209,471$
Page 31
Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in event o f a failure of a depository financial institution,
the city would not be able to recover deposits or would not be able to recover collateral securities that
are in possession of an outside party. The city’s deposits are mostly covered by federal depository
insurance (FDIC) or by collateral held in a multiple financial institution collateral pool administered by
the Washington Public Deposit Protection Commission (PDPC).
All investments are insured, registered or held by the city or its agent in the government’s name.
NOTE 4 – PROPERTY TAXES
The Jefferson County Treasurer acts as agent to collect property taxes levied in the county for all taxing
authorities. Collections are distributed after the total collected surpasses $10,000; with any balance
left over distributed at month-end.
Property tax revenues are recognized when cash is received by the city. Delinquent taxes are
considered fully collectible because a lien affixes to the property when taxes are levied.
The city’s regular levy for 2019 was $1.41735 per $1,000 on assessed valuation of $1,655,086,482 for
a total regular levy of $2,345,852.
A Library LID lift was approved by voters in 2008 to be initially phased in over 2009-2011. For 2019 the
library levy was $0.65929 per $1,000 on assessed valuation of $1,655,086,482 for a total levy of
$1,091,188.
Voters approved a Fire LID lift in 2012. For 2019 the Fire LID lift was $0.43541 per $1,000 on assessed
valuation of $1,655,086,482 for a tax amount of $720,652.
The city also has a special levy for Emergency Medical Services (EMS). The EMS levy rate was voter
approved in 2010 to $0.46608 per $1,000 on assessed valuation of $1,655,086,482 for a total levy of
$771,413 in 2019.
In 2015, voters approved a tax levy for improvements to the Mountain View Commons. The tax levy
pays for the debt service on the bonds issued to make these improvements. The levy rate for 2019
was $0.09247 per $1,000 on assessed valuation of $1,622,060,005 for a total levy of $149,999.
On February 12, 2019, the voters of Port Townsend and those in the East Jefferson Fire Rescue district
approved the annexation of the City of Port Townsend into Fire Protection District No. 1, with voter
approval at 69.28% and 67.74%, respectively. Prior to annexation the City’s fire services were funded
through a Fire levy lid lift and a contribution of approximately $908,000 from the City’s General Fund.
The City also has an EMS Levy that has been in place since 2010 to fund emergency response and
transport services. With annexation and starting in 2019 for the 2020 tax year, the City will no longer
have either the separate Fire or EMS levy. The City retains its full General property tax authority.
The City Council has put in place a means to limit its authority to levy the full General levy property tax
Page 32
for a period of five years. While the City Council cannot bind a future Council forever from doing its
duties, it can limit what a future Council can do for a limited period of time. In this case, the Council has
adopted an enforceable policy that limits the Council’s tax authority. Resolution 18-052 provides that
the City will not assess any of the $908,000 increase in 2020 (the first year it would go into effect if
annexation is approved). Thereafter starting in 2021 through 2024 the Council will have limited
authority as provided for by the policy. The policy requires that any amount of the $908,000 be phased
in at a rate not to exceed 33% per each year starting in 2021. Further, it restricts what the money can be
used for as outlined in the adopted policy.
The City’s policy also has a transparency provision that includes enhanced public notice and public
process. In addition to the regular public process for the annual property tax levy actions by the City
Council, the policy requires a separate public notice and process starting in June of preceding year for
the City Council to consider using any of the $908,000 starting in 2021 through 2022 (note there is no
levy allowed in 2020). Beginning in June of 2020, the City Manager is required to submit a proposal
regarding any decision to use any of the $908,000. This will include whether to levy nothing at all or any
portion thereof consistent with the annual policy limits. The City Manager shall also include the
proposed use of the taxes to City Council. It is up to the City Council to accept or modify the City
Manager’s proposal. The City Council prior to acting shall announce its intentions and provide an
enhanced public notice of its intent. Based upon the City Council’s findings, following public input, the
City Council will instruct the City Manager to include within the budget to be submitted for the following
year their recommendation as it relates to the $908,000. This can also include a recommendation to not
levy any of the $908,000.
NOTE 5 – DEBT SERVICE REQUIREMENTS
The accompanying Schedule of Liabilities (Schedule 09) provides a listing of the outstanding debt of the
city and summarizes the City of Port Townsend’s debt transactions for Calendar Year 2019. The debt
service payments for the year being reported and future payment requirements, including interest, are
listed in the table below. Schedule 09 also includes liabilities for compensated absences (see Note 1E)
and pension liabilities (see Note 6).
A. Bonds
The City of Port Townsend issues general obligation and revenue bonds to finance the construction and
improvement of capital assets. Bonded indebtedness has also been used to advance refund revenue
bonds prior to Fiscal Year 2018. General obligation bonds have been issued for both general
government and business-type activities and are being repaid from the applicable resources. The
revenue bonds are being repaid by proprietary fund revenues.
Page 33
In 2019, the City Council authorized a Limited General Obligation Bond Anticipation Note (BAN) for
$1,500,000. The BAN line of credit interest rate is fixed at 2.75% per annum. The 2019 BAN was used
to repay the May 31, 2019 maturing BAN, which had a balance of $978,000. The city also made a
principal payment of $108,000 leaving a balance of $870,000 as of December 31, 2019. The maturity
date of the line of credit is June 1, 2021.
In 2008, the City issued $7,500,000 in Limited General Obligation Bonds to finance road and sidewalk
improvements, as well as tourism, infrastructure, and waterfront access improvements. In 2017, the
City issued $9,155,000 Of Limited Tax General Obligation and Refunding Bonds (Series 2017A Bank
Qualified/Tax Exempt) and $1,105,000 Limited Tax General Obligation Bonds (Series 2017B Taxable).
The proceeds of the Bonds refunded approximately $7,800,000 of the 2008 General Obligation Bonds
at a significantly lower interest rate, producing a net present value savings of $980,000 or 13.1%. The
City took advantage of the savings and low interest rate enviro nment to obtain an additional $3,200,000
in proceeds. These proceeds funded sidewalk improvements, Water Street repaving project, capital
improvements at the Carnegie Library and other capital items. The All-in Total Interest Cost of the
bonds was 3.29%. The Bonds were authorized pursuant to Ordinance 3165, passed on February 6,
2017. Two series of bonds were structured where the taxable (higher interest rate) series (2017B)
matures first, callable on or after June 1, 2022, followed by the lower cost tax-exempt bonds (2017A),
callable on or after June 1, 2026. The City applied to S&P Global Ratings (S&P) for a rating on this bond
issue. The rating analysis with S&PP covered the local economy, city policies and practices,
management and finances. Based on the overall strength of the City, S&P upgraded the City’s bond
rating from A+ to AA-.
Year G.O. Bonds
G.O. Bond
Anticipation
Line of Credit
Revenue
Bond
Anticipation
Line of Credit
Revenue
Bonds Other Debt
Total Debt
Service
2019 $1,677,451 $120,340 $56,996 $0 $1,492,724 $3,347,512
2020 $1,704,789 $886,925 $1,910,500 $0 $1,423,440 $5,925,654
2021 $1,701,139 $0 $0 $0 $1,414,346 $3,115,485
2022 $1,708,389 $0 $0 $0 $1,349,975 $3,058,364
2023 $1,679,239 $1,274,456 $2,953,695
2024-2028 $8,405,414 $0 $0 $0 $6,041,364 $14,446,779
2029-2033 $7,808,282 $0 $0 $0 $5,128,407 $12,936,689
2034-2038 $2,949,882 $0 $0 $0 $2,690,128 $5,640,010
2039-2042 $92,812 $0 $0 $0 $0 $92,812
Total $27,727,397 $1,007,265 $1,967,496 $0 $20,814,840 $51,516,998
DEBT SERVICE SCHEDULE
Page 34
In 2010, the City issued an additional $3,740,000 in bonds for sidewalks, utilities and street
improvements, as well as funding for the Carnegie Library seismic retrofit. In 2012 the City refunded
the balance of the 1999 General Obligation Bonds and the 2005 General Obligation Bonds. As part of
the same financing, $1,505,000 of the 2003 Bonds were advance refunded as well as $2,500,000 of the
2002 Bonds.
In 2015, the City issued $3,385,000 in voter approved Unlimited Tax General Obligation bonds to
finance energy retrofits, building improvements at city facilities located at Mountain View Commons,
which houses municipal services and social and public service organizations, and other general capital
project costs. The bond is being repaid by a voted property tax assessment and other City tax receipts.
In 2016, the city council approved authorized a line of credit providing for the issuance and sale of a
Water and Sewer Revenue Bond Anticipation Note with an aggregate principal amount not to exceed
$3,000,000. This line of credit was established to provide interim financing for the city’s water and
sewer capital improvements. The interest rate is Kitsap Bank’s prime rate minus 2.25% and cannot be
less than 1.25%. As of the end of 2018, the city had an outstanding draw on the line of credit of
$1,862,500, and the interest rate was 3.25%. The maturity date of the line of credit is March 1, 2021.
The line of credit will allow the City to pay construction invoices per contract terms while awaiting
reimbursement from state and federal programs.
In 2018, the City issued $834,000 in Limited Tax General Obligation Bonds to provide funding for the
construction of eight low-income rental housing units owned and operated by Homeward Bound, a
Washington non-profit corporation. The bond is being repaid through a Promissory Note and Security
Agreement with Homeward Bound.
Proprietary Long-Term Debt currently outstanding as of December 31, 2019 is as follows:
Issue
Year Purpose Original Issue Interest Rate Maturity Date
Debt
Outstanding
2016
Utility Capital Revenue
Bond Anticipation Note Line
of Credit for Water/ Sewer
improvements $1,862,500
Prime rate minus
2.25% interest rate;
cannot be less than
1.25%3/1/2021 $1,862,500
2017
DOE - Wastewater Facility -
Outfall Project $225,091 2.00% 7/31/2040 $225,091
2018
CERB - Regional
Stormwater Facility $489,860 3.00% 7/31/2038 $489,860
Total $2,577,451
PROPRIETARY LONG TERM DEBT
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General Obligation Debt currently outstanding as of December 31, 2019 is as follows:
Issue
Year Purpose Original Issue Interest Rate Maturity Date
Debt
Outstanding
2010
Limited G.O. Bonds for
street, sidewalk, utilities
and historic district $3,740,000 2.30% - 5.00% 12/1/2030 $2,950,000
2012
Limited G.O. Bonds for
refunding of 1999 Bonds, a
portion of the 2002 G.O.
Bonds, and a portion of the
2005 G.O. Bonds $5,530,000 .50% - 4.25% 12/1/2025 $2,175,000
2015
Voted Unlimited G.O. Bonds
for energy retrofits and
capital improvments at the
Mountain View campus and
other general capital
projects $3,385,000 2.0% - 4.0% 12/1/2031 $2,835,000
2017
Limited G.O. Taxable Bonds
for Library Renovations,
Streets & Visitor Center
Frontage & Other general
Capital Projects $1,150,000 1.2% - 3.2% 12/1/2025 $1,060,000
2017
Limited G.O. Bonds for
Library Retrofit, Streets &
Visitor Center Frontage &
other general capital
projects $9,155,000 4.00% 12/1/2035 $9,155,000
2018
Limited G.O. Taxable Bonds
to provide funding to the
Homeward Bound housing
project $834,000 4.35% 5/22/2040 $834,000
2019
Limited G.O. Bond
Anticipation Note (Line of
Credit) for capital
improvments at the
Mountain View campus and
other general capital
project costs (Formerly 2014
BAN)$1,500,000 2.75% 6/1/2021 $870,000
Total $19,879,000
G.O. LONG TERM OUTSTANDING DEBT
Page 36
B. Public Works Trust Fund Loans and State Revolving Fund Loans
State of Washington Public Works Trust Funds (PWTF) Loans are intergovernmental loans from the
Public Works Board to undertake local public works projects. These loans are a direct responsibility of
the City of Port Townsend. The City currently has six such loans.
State Revolving Fund (SRF) Loans are State of Washington Department of Ecology low interest loans
for projects that protect and improve water quality. The City of Port Townsend has one SRF loan.
Drinking Water State Revolving Fund (DWSRF) Loans are low interest State of Washington loans for
infrastructure construction and improvements for drinking water systems that increase public health
and comply with drinking water regulations. In some cases, partial loan forgiveness is offered. The
City currently has three of these loans.
As of December 31, 2019, the long-term debt payable for PWTF and SRF loans consisted of the
following:
Page 37
Issue
Year Purpose Original Issue Interest Rate
Maturity
Date
Debt
Outstanding
1999
PWTF Loan: Gaines Street Lift
Station; San Juan Street Trunk Line $1,434,365 1.00% 6/1/2019 $0
2001
PWTF Loan: Wastewater Treatment
Outfall Expansion; Trunk Sewer Line
Replacement $1,153,350 0.50% 6/1/2021 $110,553
2002
PWTF Loan: Morgan Hill Water
System Improvements $1,263,453 0.50% 6/1/2022 $200,105
2005
SRF Loan: Dept of Ecology Loan:
Wastewater Conveyance Storm and
Sewer Separation; Gains Street Lift
Station Phase II; Trunk Sewer Line
Replacement $856,803 1.50% 9/8/2024 $244,288
2012 PWTF Loan: City Lake Repair $1,000,000 0.25% 6/1/2031 $631,578
2012
PWTF Loan: Mandated LT2 Water
Treatment Facility $1,896,000 0.50% 6/1/2031 $1,343,057
2012
DWSRF Loan: LT2 Federally
Mandated Water Treatment Facility $3,071,521 1.50% 10/1/2036 $2,627,468
2013
PWTF Loan: 5 MG Reservoir
Replacement $1,258,394 0.50% 6/1/2032 $975,813
2013 PWTF Loan: UV Disinfection $3,942,278 0.50% 6/1/2032 $3,204,035
2014
DWSRF Loan: Replacement for
Primary 5MG Reservoir with
Booste [1]$4,596,320 1.00% 10/1/2037 $3,986,670
2015
DWSRF Loan: Mandated LT2 Water
Treatment Facility[2]$3,537,275 1.00% 10/1/2037 $3,183,547
Total $16,507,114
PUBLIC WORKS AND STATE REVOLVING FUND LOAN SCHEDULE
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NOTE 6 – PENSION PLANS
A. State Sponsored Plans
Substantially all city full-time and qualifying part-time employees participated in Public Employee’s
Retirement System (PERS), Law Enforcement Officers’ and Fire Fighters’ Retirement System (LEOFF)
Volunteer Firemen Relief and Pension Fund, Firemen’s Pension and Relief Fund administered by
Washington State Department of Retirement Systems (DRS), under cost-sharing multiple-employer
public employee defined benefit and defined contribution employee retirement plans. Contributions
to the systems by both employee and employer are based upon gross wages covered by the plan.
The State Legislature establishes, and amends, laws pertaining to the creation and administration of
all public retirement systems.
The Department of Retirement Systems, a department within the primary government of the State of
Washington, issues a publicly available comprehensive annual financial report (CAFR) that includes
financial statements and required supplementary information for each plan. The DRS CAFR may be
obtained by writing to:
Department of Retirement Systems
Communication Unit
PO Box 48380
Olympia, WA 98504-8380
Also, the DRS CAFR may be downloaded from the DRS website at www.drs.wa.gov.
At June 30, 2019 (the measurement date of the plans), the city’s proportionate share of the collective
net pension liabilities, as reported on Schedule 09, and the city’s proportionate share of the collective
net pension assets was as follows:
Allocation % Liability (Asset)
PERS 1 0.000000% $0.00
PERS 1 UAAL 0.040129% $1,543,102.51
PERS 2 / 3 0.051811% $503,260.97
$2,046,363.48
Allocation % Liability (Asset)
LEOFF 1 0.012331% -$243,735.90
LEOFF 2 0.039301% -$910,483.52
-$1,154,219.42
Total Net Pension Liability (Sch 09)
Net pension Assets
Page 39
LEOFF Plan 1
The city also participates in LEOFF Plan 1. The LEOFF Plan 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. Starting on July 1, 2000, employers and employees
contribute zero percent.
LEOFF Plan 2
The city also participates in the LEOFF Plan 2. 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 recommendation 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.
B. Firemen’s Pension Trust Fund/Plan
Plan Description. The City is the administrator of the Firemen’s Pension Fund/Plan which is closed,
single-employer, defined benefit pension plan that was established in conformance with the Revised
Code of Washington (RCW) Chapters 14.16, 14.18 and 41.20. The plan is limited to full-time and fully
compensated firefighters who were hired prior to the establishment of the Law Enforcement Officers’
and Fire Fighters’ Retirement System (LEOFF) on March 1, 1970.
Through the LEOFF Act, the State undertook to provide the bulk of police and fire pensions; however,
the municipalities continue to be responsible for all or part of pension benefits for employees hired
before March 1, 1970. Firefighters hired before, but not retired on March 1, 1970, received at
retirement the greater of the pension benefit provided under the old pension laws and under the LEOFF
Act. Any excess of the old benefit over the LEOFF benefit is provided by the City. The City also pays the
customary and reasonable cost of necessary medical expenses of the retiree for life.
Pre-LEOFF supplemental pension payments are based upon formulas using the City's current
compensation levels attached to the employee’s rank at retirement. In the event the pension paid by
the State falls short of what the retiree should receive based upon the formula, the City pays the
difference. Should the retiree receive more from the State than would result from the application of
the formula, no adjustments or paybacks are requested. The system/plan is shown as a trust fund in
the financial statement of the City.
As of December 31, 2019, membership consisted of two (2) pre-LEOFF firefighter retirees.
Funding Policy. Under the State law, the Firefighter’s Pension Plan is funded from regular property tax
levies at $0.225 per $1,000 assessed valuation, interest earnings, and City contributions required to
meet projected future pension obligations.
All costs associated with the pre-LEOFF firefighter retirees are accounted for in the Firemen’s Pension
Trust Fund.
Page 40
In 2019, the Firemen’s Pension Trust Fund received a total of $38,299 contributions as follows:
2019 __
Contributions:
Contribution from General Fund – Property Tax $ 34,235
Investment Interest 4,064
Total Funding $ 38,299
A formal actuarial valuation study has not been done in recent years; however, based on the
supplemental pension benefits paid over the last ten years coupled with consideration of the ages of
the remaining plan members, the estimated funding requirements for future supplemental pension
benefits as of December 31, 2019 is estimated at $3,216. This future pension obligation amount is not
reported on the Schedule 09, as the Firemen’s Pension Fund/Plan has net pension asset as illustrated
below.
The total cash and investment balance in the Firemen’s Pension Fund as of December 31, 2019 is
$258,871.
City of Port Townsend Firemen’s Pension Trust Fund Assets (Liabilities)
As of December 31, 2019
2019______
Total Fund Asset (Cash & Investments) $ 258,871
Less Estimated Future Supplemental Pension Obligations (3,216)
Net Fund Asset Available for Costs of Medical Benefits $ 255,655
NOTE 7 – RISK MANAGEMENT
The City of Port Townsend is a member of the Washington Cities Insurance Authority (WCIA). Utilizing
Chapter 48.62 RCW (self-insurance regulation) and Chapter 39.34 RCW (Interlocal Cooperation Act), nine
cities originally formed WCIA on January 1, 1981. WCIA was created for the purpose of providing a
pooling mechanism for jointly purchasing insurance, jointly self-insuring, and / or jointly contracting for
risk management services. WCIA has a total of 163 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 $16 million in limits above the self-
insured layer is provided by reinsurance. Total limits are $20 million per occurrence subject to
aggregates and sublimits. The Board of Directors determines the limits and terms of coverage annually.
Insurance 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 $300 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.
Page 41
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.
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 day to day operations of WCIA.
NOTE 8 – CONTINGENCIES AND LITIGATION
In the opinion of management, the City’s insurance program (see Note 7) and self-insurance fund (see
Note 10) are adequate to pay all known or pending claims.
NOTE 9 – INTERFUND LOANS
In 2019, the City Council authorized, through Resolution 19-093 on December 2, 2019, an interfund
loan from the Transmission Line Replacement Fund to the Community Services Fund regarding
resolution 19-054 on June 13, 2019 authorizing a contract with BERK Consulting, Inc. to develop a parks,
recreation, and open space (PROS) plan for the City of Port Townsend. This interfund loan will be
repaid by future appropriations to the Community Services Fund, no later than December 31, 2022.
This $90,000 loan is the only outstanding interfund loan as of December 31, 2019.
NOTE 10 – SELF INSURANCE
The City of Port Townsend self-insures for unemployment through the State of Washington’s
Employment Security Department. When a former employee files for and obtains unemployment
coverage with the State of Washington, the City of Port Townsend is direct-billed their portion of the
unemployment benefit costs.
In 2013, the City of Port Townsend established an Unemployment Self Insurance Fund. As of December
Loan Reference Borrowing Fund Lending Fund
Balance
1/1/19
2019
Repayments New Loans
Balance
12/31/2019
Parks PROS Plan Community Services Fund Transmission Line (417) -$ -$ 90,000$ 90,000$
TOTAL -$ -$ 90,000$ 90,000$
Page 42
31, 2019, the fund had a balance of $25,474 as compared to the prior year ending Fund balance of
$25,078.
NOTE 11 – MANAGEMENT FUNDS
To assist in managing the City of Port Townsend’s finances, the city has established management funds
for accounting purposes. The management fund activities are rolled into one fund for reporting
purposes.
The following funds include managerial fund activity that is reported in one fund:
x Water and Sewer Utility Fund
x Storm Utility Fund
x General Government Capital Improvement Project Fund
NOTE 12 – OTHER POST EMPLOYMENT BENEFITS
The LEOFF I Retiree Medical Plan is a closed, single-employer, defined-benefit OPEB plan administered by
the city as required by RCW 41.26. The plan pays for 100% of eligible retirees’ healthcare costs on a pay-
as-you-go basis. As of December 31, 2019, the plan had seven members, all retirees. As of December 31,
2019, the city’s total OPEB liability was $2,771,711, as calculated using the alternative measurement
method. For the year ended December 31, 2019, the city paid $51,957 in benefits.
NOTE 13 – CONSTRUCTION COMMITMENT
The City of Port Townsend has no active construction projects as of December 31, 2019. Total
construction commitment as of the end of the year totaled $258,379. A summary table of those
commitments is below:
PROJECT CONTRACTOR PROJECT PHASE
CONTRACT
AMOUNT PAID TO DATE
REMAINING
CONTRACT
Rainier Regional Stormwater Facility AHBL Design 233,742 212,447 21,295
Rainier Regional Stormwater Facility Van Aller
Surveying Design 12,372 9,968 2,404
Sewer Outfall Replacement CH2MHill
Engineers Design 544,727 327,404 217,323
Library Restrooms and Windows
Terrapin
Architecture,
P.C.Design 28,000 10,643 17,357
TOTAL $818,841 $560,462 $258,379
TABLE OF CONSTRUCTION COMMITMENTS - 2019
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NOTE 14 – HEALTH & WELFARE
The City of Port Townsend 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, 2019, 261 cities/towns/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. The AWC Trust HCP pools 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 2019, 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.
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
Page 44
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
(“GASB”). 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.
NOTE 15 – COMPONENT UNIT(S), JOINT VENTURES, AND RELATED PARTIES
The Fort Worden Public Development Authority (The Authority) was established by Ordinance 3108
enacted by the City on September 8, 2009. That Ordinance adopted the Authority’s Charter, granting
it the power to manage, promote, develop, secure funding, and enhance the Fort Worden State Park
including undertaking, assisting with, and otherwise facilitating the implementation of a Lifelong
Learning Center at the Park.
The Authority is a public corporation authorized under the provisions of RCW 35.21.735 – 35.21.759.
It is a separate legal entity that is independent from the City. RCW 35.21.750 provides that
“…liabilities incurred by such public corporation, commission, or authority shall be satisfied exclusively
from the assets and properties of such public corporation, commission, or authority and no creditor or
other person shall have any right of action against the city, town, or county creating such corporation,
commission or authority on account of any debts, obligations, or liabilities of such public corporation,
commission, or authority.”
The Authority is governed by a Board of Directors. A nominating committee of the Authority solicits,
reviews and recommends Board Members. As the Chartering Agency, the City appoints Board
Members. The City Council also can remove Board members by resolution. The Authority maintains
independent financial reports. Financial reports are provided annually to the City Manager and City
Council and an independent audit is required annually.
In 2019, the City provided $25,000 of support to the Authority from the Lodging Tax Fund (approved by
the Lodging Tax Advisory Committee and the City Manager) to fund joint marketing of the Fort Worden
Lifelong Learning Center and the City of Port Townsend.
NOTE 16 – OTHER DISCLOSURES
In 2019, a prior period adjustment was made for $280,891. $238,599 was related to changes in
generally accepted accounting principles regarding the fund types, specifically, Fiduciary Funds. $42,292
was related to receiving a refund for a vendor overpayment on a 2018 construction project.
Page 45
NOTE 17 – SUBSEQUENT EVENTS
A. Local Sales & Use Tax for Affordable & Supportive Housing
In January 2020, the City Council adopted Ordinance 3244 Adopting Legislation to Authorize a Sales and
Use Tax for Affordable and Supportive Housing in Accordance with Substitute House Bill 1406 (SHB
1406). This ordinance will authorize the city to impose a tax of 0.073% to be used for affordable
housing. The tax is a credit against the state sales tax rate of 6.5%, so it will not increase the tax rate for
City consumers. The tax may remain in effect for 20 years. The City’s annual share of this tax is
estimated at $21,000. The City Council also authorized Amendment 1 to its Interlocal Agreement with
Jefferson County to manage the SHB 1406 revenues and expenditures under the same process and
structures as the recording fee funds (178 and 179 funds). The SHB 1406 will be accounted and
reported separately; the City will receive annual reporting from the County on the revenues and
expenditures to SHB 1406 funds.
B. COVID-19
In February 2020, the Governor of the state of Washington declared a state of emergency in response to
the spread of a deadly new virus. In the weeks following the declaration, precautionary measures to
slow the spread of the virus have been ordered. These measures include closing schools, colleges and
universities, cancelling public events, prohibiting public and private gatherings, and requiring people to
stay home unless they are leaving for an essential function.
As of the filing of this annual report, the duration of the emergency is unknown. Due to the stay home
order and the cancellation of many public events and gatherings in the City for 2020, City management
staff is projecting a decline in revenues in some key areas. The City Manager has instituted temporary
furloughs, hiring freezes of certain positions and budget reductions in discretionary spending. State and
Federal funding resources may become available to assist local governments with this emergency.
The length of time these measures will be in place, and the full extent of the financial impact on the city
is unknown at this time.
C. Release of Promissory Note and Security Agreement
On October 28, 2020, the City executed a Release Agreement with Homeward Bound, a Washington
non-profit corporation. The agreement released Homeward Bound of all their obligations, including
repaying the City the principal amount of $834,000 under a Promissory Note dated December 10, 2018
related to constructing and owning eight low-income rental housing units, which the City provided
funding through a 2018 bond issuance. The Release Agreement also transferred all the rights, title,
and interest of the associated property to the City.
D. Issuance of Debt
In November 2020, the City issued a Limited Tax General Obligation and Refunding Bond in the principal
amount of $3,658,350. The proceeds were used to refund the outstanding 2010 Limited Tax General
Obligation Bonds, to repay the outstanding 2019 Limited Tax General Obligation Bond Anticipation Note,
and to pay the costs to issue the bond. The new issuance was privately placed with Kitsap Bank of Port
Orchard, WA. The $2,753,800 of proceeds for refunding maintain the same maturity date of 12/1/2030,
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but at a significantly lower average interest rate of 1.54%. The remainder of $904,550 matures on
12/1/2040 and carries an average interest rate of 2.02%.
In November 2020, the City issued a Water and Sewer Revenue Bond in the principal amount of
$1,914,980. The proceeds were used to pay part of the cost of constructing water system
improvements, to repay the City’s 2016 Water and Sewer Revenue Bond Anticipation Note, and to pay
the costs to issue the bond. The new issuance was privately placed with Kitsap Bank of Port Orchard,
WA. The bond matures on 12/1/2040 and carries an average interest rate of 2.16%.
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City of Port Townsend
Notes to the Financial Statements
For the Year Ended December 31, 2018
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The City of Port Townsend was incorporated on January 16, 1860 and operates under the laws of the
State of Washington applicable to a non-charter code city. The city is a general purpose local
government and provides police and fire protection, water, sewer, storm drainage, waste management,
as well as maintaining parks, streets, and a library for use by its citizens.
The City of Port Townsend reports financial activity in accordance with the Cash Basis Budgeting,
Accounting and Reporting System (BARS) Manual prescribed by the State Auditor’s Office under the
authority of Washington State law, Chapter 43.09 RCW. This manual prescribes a financial reporting
framework that differs from generally accepted accounting principles (GAAP) in the following manner:
x Financial transactions are recognized on a cash basis of accounting as described below.
x Component units are required to be disclosed, but are not included in the financial statements.
x Government-wide statements, as defined in GAAP, are not presented.
x All funds are presented, rather than a focus on major funds.
x The Schedule of Liabilities is required to be presented with the financial statements as
supplementary information.
x Supplementary information required by GAAP is not presented.
x Ending balances are not presented using the classifications defined in GAAP.
A. Fund Accounting
Financial transactions of the government are reported in individual funds. Each fund uses a
separate set of self-balancing accounts that comprises its cash and investments, revenues and
expenditures. The government’s resources are allocated to and accounted for in individual funds
depending on their intended purpose. Each fund is reported as a separate column in the financial
statements, except for fiduciary funds, which are presented by fund types. The total column is
presented as “memo only” because any interfund activities are not eliminated.
The following fund types are used:
GOVERNMENTAL FUND TYPES:
General Fund (Fund 010):
This fund is the primary operating fund of the city. It accounts for all financial resources except
those required or elected to be accounted for in another fund.
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Special Revenue Funds (Funds in the 100 series):
These funds account for specific revenue sources derived from specific taxes, grants or other
sources, which are restricted or committed to expenditures for specified purposes of the city.
Debt Service Funds (Funds in the 200 series):
These funds account for the financial resources that are restricted, committed, or assigned to
expenditures for principal, interest and related costs on general long-term debt.
Capital Projects Funds (Funds in the 300 series):
These funds account for financial resources which are restricted, committed, or assigned for the
acquisition or construction of capital facilities or other capital assets.
PROPRIETARY FUND TYPES:
Enterprise Funds (Funds in the 400 series):
These funds account for operations that provide goods or services to the general public and are
supported primarily through user charges.
Prior to 2016, the City reported its Golf Course Fund as a Fiduciary Fund. The activities of this fund
are supported by user charges to support capital improvements, maintenance and repairs, and
other operating expenditures of the Golf Course and was reassigned as an Enterprise Fund.
Internal Service Funds (Funds in the 500 series):
These funds account for operations that provide goods or services to other departments or funds
of the city or other governmental units on a cost reimbursement basis.
FIDUCIARY FUND TYPES:
Fiduciary funds account for assets held by the government in a trustee capacity or as an agent on
behalf of others.
Pension (and Other Employee Benefit) Trust Funds (Fund 610):
Pension funds are used to report fiduciary activities for pension and OPEB plans administered
through a trust. This fund is used to account for financial resources to pay retiree benefits related
to the Fire Fighters’ Retirement System (Firemen’s Pension).
Private Purpose Trust:
These funds report all trust arrangements under which principal and income benefit individuals,
private organizations and other governments. The City currently does not have any of these funds.
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Custodial Funds (Funds 613 – 699):
These funds are used to account for assets that the city holds on behalf of others in a custodial
capacity. The City’s custodial funds include Refundable Deposits (Fund 632) used for performance
bonds and other miscellaneous deposits, Agency Fund (Fund 631) used for miscellaneous pass
through deposits, and the Memorial Fund (Fund 633) used to account for assets and donations to
the City for general public benefit. Funds coming into the Memorial Fund are managed in accord
with any conditions and terms imposed by the donor making the gift.
B. Basis of Accounting and Measurement Focus
Financial statements are prepared using the cash basis of accounting and measurement focus.
Revenues are recognized when cash is received and expenditures are recognized when paid.
In accordance with state law the City of Port Townsend also recognizes expenditures paid during
twenty days after the close of the fiscal year for claims incurred during the previous period.
Purchases of capital assets are expensed during the year of acquisition. There is no capitalization
of capital assets, nor allocation of depreciation expense. Inventory is expensed when purchased.
C. Cash and Investments
See Note 3 – Deposits and Investments
D. Capital Assets
The city is responsible for stewardship of public resources and as such, has policies and procedures
in place to track, demonstrate accountability, and insure security of all assets.
Capital assets are assets with an initial individual cost of more than $5,000 and an estimated useful
life in excess of one year. Operating under a cash basis, capital assets and inventory are recorded
as capital expenditures when purchased; because the entire expenditure is recognized in the period
when the cash outflow occurs, the reporting of depreciation accounts is not appropriate.
Capital Improvements are defined as projects to create, expand, or modify a capital facility or
infrastructure. The project may include design, permitting, environmental analysis, land
acquisition, construction, landscaping, site improvements, initial furnishings, and equipment.
E. Compensated Absences
Vacation leave may be accumulated up to 240 hours for regular employees and 360 hours for
department heads. Vacation leave is payable upon separation or retirement. Sick leave may be
accumulated up to 1,440 hours. Upon separation or retirement em ployees do not receive payment
for unused sick leave. Payments related to leave are recognized when paid. The compensated
absence balances increased by $16,203 from 2017 to 2018, ending at $527,602 for the year.
F. Long-Term Debt
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See Note 5 – Debt Service Requirements
G. Reserved Portion of Ending Cash and Investments
Beginning and Ending Cash and Investments is reported as reserved when it is subject to
restrictions on use imposed by external parties or due to internal commitments established by the
City Council through a formal action (e.g. ordinance or resolution). When expenditures that meet
these restrictions are incurred, the city intends to use reserved resources first before using
unreserved amounts.
Reservations of Ending Cash and Investments consist of $719,177 as of December 31, 2018. These
funds were reserved by Trust in 1956 for system replacement or improvements related to the
Olympic Gravity Water System Pipeline (Ordinance 1321).
NOTE 2 – BUDGET COMPLIANCE
The city adopts annual appropriated budgets for all funds. These budgets are appropriated at the
fund level. The budget constitutes the legal authority for expenditures at that level. Annual
appropriations for these funds lapse at the fiscal year end.
Annual appropriated budgets are adopted on the same basis of accounting as used for financial
reporting.
The appropriated and actual expenditures for the legally adopted budgets were as follow:
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Budgeted amounts are authorized to be transferred within any fund/object classes within
departments; however, any revisions that alter the total expenditures of a fund, or impact the
number of authorized employee positions, salary ranges, hours, or other conditions of employment
must be approved by the city council.
NOTE 3 – DEPOSITS AND INVESTMENTS
It is the city’s policy to invest all temporary cash surpluses. The interest on these investments is
prorated to the various funds. All deposits are covered by the Federal Deposit Insurance
Corporation and/or the Washington Public Deposit Protection Commission. The city’s investments
are insured, registered, or held by the city or its agent in the city’s name.
The city has two investment instruments:
1. Deposits in the Local Government Investment Pool administered by the Washington Public
Deposit Protection Commission. The monthly interest on these investments is prorated to the
various funds based on participation and fund balance.
Final Appropriated Actual
Amounts Expenditures Variance
General 9,396,000$ 9,222,339$ 173,661$
Street 1,015,710$ 990,144$ 25,566$
Library 1,127,585$ 1,103,780$ 23,805$
Real Estate Excise Tax Fund 540,000$ 540,000$ -$
Lodging Tax 547,338$ 541,394$ 5,944$
Fire & EMS Service 2,385,276$ 2,369,469$ 15,807$
Affordable Housing Fund 10,000$ -$ 10,000$
Community Development Block Grants 40,000$ 40,000$ -$
Community Services 2,150,776$ 2,038,993$ 111,783$
GO Debt Service 1,666,892$ 1,665,391$ 1,501$
General Capital Improvement Funds 7,587,001$ 6,646,797$ 940,204$
Water/Sewer Utility Funds 15,251,514$ 15,017,206$ 234,308$
Storm water Operations & Storm Capital Funds 1,378,574$ 1,358,449$ 20,125$
Golf Course Fund 40,419$ 23,216$ 17,203$
Equipment Rental 1,444,064$ 1,404,492$ 39,572$
Public Work & Admin 561,145$ 558,292$ 2,853$
Engineering Service Fund 1,065,865$ 1,009,030$ 56,835$
Unemployment Self Insurance 46,416$ 32,835$ 13,581$
Firemen's Pension 27,140$ 22,230$ 4,910$
Agency Funds -$ 134,242$ (134,242)$
Memorial Fund -$ -$ -$
TOTAL 46,281,715$ 44,718,300$ 1,563,415$
FISCAL YEAR 2018
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2. A portion of deposits for water and sewer utility funds are invested in U.S. Government
securities at U.S. Bank, administered by ProEquities Inc., which is registered with the U.S.
Securities and Exchange Commission (“SEC”) and the Municipal Securities Rulemaking Board
(“MSRB”). ProEquities Inc. is subject to the regulations and rules on municipal securities
established by the SEC and MSRB. The interest is recorded in the water and sewer fund when
received. The weighted average maturity of these securities is 2.20 years.
Investments are reported at fair value. Investment activity fo r the year ending December 31, 2018
is listed below:
City of Port Townsend
State of Washington
Local Government Investment Pool
1/1/2018 Beginning Balance 6,547,911$
Gross Investment Earnings 151,117$
Administrative Fees (555)$
Net Investment Earnings 150,562$
Deposits 2,000,000$
Withdrawals (500,000)$
1,500,000$
12/31/2018 Ending Balance (Market Value) 8,198,473$
City of Port Townsend
US Bank Investment Account
1/1/2018 Beginning Balance -$
Gross Investment Earnings 5,383$
Administrative Fees (81)$
Net Investment Earnings 5,302$
Deposits 2,033,596$
Withdrawals -$
2,033,596$
12/31/2018 Ending Balance (Market Value) 2,038,898$
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NOTE 4 – PROPERTY TAXES
The Jefferson County Treasurer acts as agent to collect property taxes levied in the county for all taxing
authorities. Collections are distributed after the total collected surpasses $10,000; with any balance
left over distributed at month-end.
Property tax revenues are recognized when cash is received by the city. Delinquent taxes are
considered fully collectible because a lien affixes to the property when taxes are levied.
The city’s regular levy for 2018 was $1.50579 per $1,000 on assessed valuation of $1,528,558,379 for
a total regular levy of $2,301,703.
A Library LID lift was approved by voters in 2008 to be initially phased in over 2009-2011. For 2018 the
library levy was $0.70021 per $1,000 on assessed valuation of $1,528,558,379 for a total levy of
$1,070,312.
Voters approved a Fire LID lift in 2012. For 2018 the Fire LID lift was $0.46243 per $1,000 on assessed
valuation of $1,528,558,379 for a tax amount of $706,865.
The city also has a special levy for Emergency Medical Services (EMS). The EMS levy rate was voter
approved in 2010 to $0.49492 per $1,000 on assessed valuation of $1,528,558,379 for a total levy of
$756,527 in 2018.
In 2015, voters approved a tax levy for improvements to the Mountain View Commons. The tax levy
pays for the debt service on the bonds issued to make these improvements. The levy rate for 2018
was $0.10019 per $1,000 on assessed valuation of $1,497,191,373 for a total levy of $149,999.
NOTE 5 – DEBT SERVICE REQUIREMENTS
The accompanying Schedule of Liabilities (Schedule 09) provides a listing of the outstanding debt of the
city and summarizes the City of Port Townsend’s debt transactions for Calendar Year 2018. The debt
service payments for the year being reported and future payment requirements, including interest, are
listed in the table below. Schedule 09 also includes liabilities for compensated absences (see Note 1E)
and pension liabilities (see Note 6).
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A. Bonds
The City of Port Townsend issues general obligation and revenue bonds to finance the construction and
improvement of capital assets. Bonded indebtedness has also been used to advance refund revenue
bonds prior to Fiscal Year 2018. General obligation bonds have been issued for both general
government and business-type activities and are being repaid from the applicable resources. The
revenue bonds are being repaid by proprietary fund revenues.
In 2018, the City issued $834,000 in Limited Tax General Obligation Bonds to provide funding for the
construction of eight low-income rental housing units owned and operated by Homeward Bound, a
Washington non-profit corporation. The bond is being repaid through a Promissory Note and Security
Agreement with Homeward Bound.
In 2008, the City issued $7,500,000 in Limited General Obligation Bonds to finance road and sidewalk
improvements, as well as tourism, infrastructure, and waterfront access improvements. In 2017, the
City issued $9,155,000 Of Limited Tax General Obligation and Refunding Bonds (Series 2017A Bank
Qualified/Tax Exempt) and $1,105,000 Limited Tax General Obligation Bonds (Series 2017B Taxable).
The proceeds of the Bonds refunded approximately $7,800,000 of the 2008 General Obligation Bonds
at a significantly lower interest rate, producing a net present value savings of $980,000 or 13.1%. The
City took advantage of the savings and low interest rate environment to obtain an additional $3,200,000
in proceeds. These proceeds funded sidewalk improvements, Water Street repaving project, capital
improvements at the Carnegie Library and other capital items. The All-in Total Interest Cost of the
bonds was 3.29%. The Bonds were authorized pursuant to Ordinance 3165, passed on February 6,
Year G.O. Bonds
G.O. Bond
Anticipation
Line of Credit
Revenue
Bond
Anticipation
Line of Credit
Revenue
Bonds Other Debt
Total Debt
Service
2018 $1,663,891 $0 $639,272 $21,000 $1,526,298 $3,850,461
2019 $1,683,854 $997,287 $1,903,500 $0 $1,457,016 $6,041,657
2020 $1,707,551 $0 $0 $0 $1,351,780 $3,059,331
2021 $1,703,901 $0 $0 $0 $1,342,590 $3,046,491
2022 $1,711,151 $0 $0 $0 $1,278,124 $2,989,275
2023-2027 $8,418,715 $0 $0 $0 $5,774,007 $14,192,722
2028-2032 $8,123,540 $0 $0 $0 $5,293,132 $13,416,672
2033-2037 $4,280,090 $0 $0 $0 $2,685,660 $6,965,750
2038-2041 $161,607 $0 $0 $0 $0 $161,607
Total $29,454,300 $997,287 $2,542,772 $21,000 $20,708,608 $53,723,967
DEBT SERVICE SCHEDULE
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2017. Two series of bonds were structured where the taxable (higher interest rate) series (2017B)
matures first, callable on or after June 1, 2022, followed by the lower cost tax-exempt bonds (2017A),
callable on or after June 1, 2026. The City applied to S&P Global Ratings (S&P) for a rating on this bond
issue. The rating analysis with S&PP covered the local economy, city policies and practices,
management and finances. Based on the overall strength of the City, S&P upgraded the City’s bond
rating from A+ to AA-.
In 2010, the City issued an additional $3,740,000 in bonds for sidewalks, utilities and street
improvements, as well as funding for the Carnegie Library seismic retrofit. In 2012 the City refunded
the balance of the 1999 General Obligation Bonds and the 2005 General Obligation Bonds. As part of
the same financing, $1,505,000 of the 2003 Bonds were advance refunded as well as $2,500,000 of the
2002 Bonds.
In 2014, the City Council authorized a Limited General Obligation Bond Anticipation Note (BAN) for
$1,500,000. The BAN line of credit interest rate is a variable rate tied to the LIBOR (London Interbank
Offered Rate) and is calculated as 65% of the 3-month LIBOR rate plus 1.05%. The city initiated a draw
of $978,000 on this line of credit in 2018. The maturity date of the line of credit was December 1, 2017,
and was amended with Ordinance 3186 to extend the maturity to May 31, 2019. The interest rate and
other terms remain the same. The interest rate for this credit line was 2.87% as of December 31, 2018.
In 2015, the City issued $3,385,000 in voter approved Unlimited Tax General Obligation bonds to
finance energy retrofits, building improvements at city facilities located at Mountain View Commons,
which houses municipal services and social and public service organizations, and other general capital
project costs. The bond is being repaid by a voted property tax assessment and other City tax receipts.
In 2016, the city council approved authorized a line of credit providing for the issuance and sale of a
Water and Sewer Revenue Bond Anticipation Note with an aggregate principal amount not to exceed
$3,000,000. This line of credit was established to provide interim financing for the city’s water and
sewer capital improvements. The interest rate is Kitsap Bank’s prime rate minus 2.25% and cannot be
less than 1.25%. As of the end of 2018, the city had an outstanding draw on the line of credit of
$1,862,500, and the interest rate was 3.25%. The maturity date of the line of credit is March 1, 2021.
The line of credit will allow the City to pay construction invoices per contract terms while awaiting
reimbursement from state and federal programs.
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Proprietary Long-Term Debt currently outstanding as of December 31, 2018 is as follows:
Issue
Year Purpose Original Issue Interest Rate Maturity Date
Debt
Outstanding
1978
Water/Sewer Revenue
Bonds for Water and Sewer
Improvements $395,000 5.00% 12/1/2018 $0
2016
Utility Capital Revenue
Bond Anticipation Note Line
of Credit for Water/ Sewer
improvements $1,862,500
Prime rate minus
2.25% interest rate;
cannot be less than
1.25%3/1/2021 $1,862,500
2017
DOE - Wastewater Facility -
Outfall Project $2,667 2.00% 6/30/2018 $2,667
2018
CERB - Regional
Stormwater Facility $269,182 3.00% 7/31/2036 $269,182
Total $2,134,349
PROPRIETARY LONG TERM DEBT
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General Obligation Debt currently outstanding as of December 31, 2018 is as follows:
Issue
Year Purpose Original Issue Interest Rate Maturity Date
Debt
Outstanding
2010
Limited G.O. Bonds for
street, sidewalk, utilities
and historic district $3,740,000 2.30% - 5.00% 12/1/2030 $3,155,000
2012
Limited G.O. Bonds for
refunding of 1999 Bonds, a
portion of the 2002 G.O.
Bonds, and a portion of the
2005 G.O. Bonds $5,530,000 .50% - 4.25% 12/1/2025 $2,680,000
2014
Limited G.O. Bond
Anticipation Note (Line of
Credit) for capital
improvments at the
Mountain View campus and
other general capital
project costs $1,500,000
Variable rate tied
to Libor index (65%
of 3 month Libor
plus 1.05%, rate as
of 12/31/2018 -
2.86805% 5/31/2019 $978,000
2015
Voted Unlimited G.O. Bonds
for energy retrofits and
capital improvments at the
Mountain View campus and
other general capital
projects $3,385,000 2.0% - 4.0% 12/1/2031 $3,020,000
2017
Limited G.O. Taxable Bonds
for Library Renovations,
Streets & Visitor Center
Frontage & Other general
Capital Projects $1,150,000 1.2% - 3.2% 12/1/2025 $1,060,000
2017
Limited G.O. Bonds for
Library Retrofit, Streets &
Visitor Center Frontage &
other general capital
projects $9,155,000 4.00% 12/1/2035 $9,155,000
2018
Limited G.O. Taxable Bonds
to provide funding to the
Homeward Bound housing
project $834,000 4.35% 5/22/2040 $834,000
Total $20,882,000
G.O. LONG TERM OUTSTANDING DEBT
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B. Public Works Trust Fund Loans and State Revolving Fund Loans
State of Washington Public Works Trust Funds (PWTF) Loans are intergovernmental loans from the
Public Works Board to undertake local public works projects. These loans are a direct responsibility of
the City of Port Townsend. The City currently has seven such loans.
State Revolving Fund (SRF) Loans are State of Washington Department of Ecology low interest loans
for projects that protect and improve water quality. The City of Port Townsend has one SRF loan.
Drinking Water State Revolving Fund (DWSRF) Loans are low interest State of Washington loans for
infrastructure construction and improvements for drinking water systems that increase public health
and comply with drinking water regulations. In some cases, partial loan forgiveness is offered. The
City currently has three of these loans.
As of December 31, 2018, the long-term debt payable for PWTF and SRF loans consisted of the
following:
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Issue
Year Purpose Original Issue Interest Rate
Maturity
Date
Debt
Outstanding
1998
PWTF Loan: CT Pipeline Tri-Area
Water Storage, Tri-Area Well
Upgrades $2,172,055 1.00% 6/1/2018 $0
1999
PWTF Loan: Gaines Street Lift
Station; San Juan Street Trunk Line $1,434,365 1.00% 6/1/2019 $59,594
2001
PWTF Loan: Wastewater Treatment
Outfall Expansion; Trunk Sewer Line
Replacement $1,153,350 0.50% 6/1/2021 $165,829
2002
PWTF Loan: Morgan Hill Water
System Improvements $1,263,453 0.50% 6/1/2022 $266,807
2005
SRF Loan: Dept of Ecology Loan:
Wastewater Conveyance Storm and
Sewer Separation; Gains Street Lift
Station Phase II; Trunk Sewer Line
Replacement $856,803 1.50% 9/8/2024 $291,098
2012 PWTF Loan: City Lake Repair $1,000,000 0.25% 6/1/2031 $684,210
2012
PWTF Loan: Mandated LT2 Water
Treatment Facility $1,896,000 0.50% 6/1/2031 $1,454,978
2012
DWSRF Loan: LT2 Federally
Mandated Water Treatment Facility $3,071,521 1.50% 10/1/2036 $2,782,025
2013
PWTF Loan: 5 MG Reservoir
Replacement $1,258,394 0.50% 6/1/2032 $1,050,875
2013 PWTF Loan: UV Disinfection $3,942,278 0.50% 6/1/2032 $3,450,499
2014
DWSRF Loan: Replacement for
Primary 5MG Reservoir with
Booste [1]$4,596,320 1.00% 10/1/2037 $4,196,495
2015
DWSRF Loan: Mandated LT2 Water
Treatment Facility[2]$3,537,275 1.00% 10/1/2037 $3,360,411
Total $17,762,821
[1] - Received $1,969,851 in loan forgiveness, included in 2018 Reductions on Schedule 09
[2] - Received $1,515,975 in loan forgiveness, included in 2018 Reductions on Schedule 09
PUBLIC WORKS AND STATE REVOLVING FUND LOAN SCHEDULE
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NOTE 6 – PENSION PLANS
A. State Sponsored Plans
Substantially all city full-time and qualifying part-time employees participated in Public Employee’s
Retirement System (PERS), Law Enforcement Officers’ and Fire Fighters’ Retirement System (LEOFF)
Volunteer Firemen Relief and Pension Fund, Firemen’s Pension and Relief Fund administered by
Washington State Department of Retirement Systems (DRS), under cost-sharing multiple-employer
public employee defined benefit and defined contribution employee retirement plans. Contributions
to the systems by both employee and employer are based upon gross wages covered by the plan.
The State Legislature establishes, and amends, laws pertaining to the creation and administration of
all public retirement systems.
The Department of Retirement Systems, a department within the primary government of the State of
Washington, issues a publicly available comprehensive annual financial report (CAFR) that includes
financial statements and required supplementary information for each plan. The DRS CAFR may be
obtained by writing to:
Department of Retirement Systems
Communication Unit
PO Box 48380
Olympia, WA 98504-8380
Also, the DRS CAFR may be downloaded from the DRS website at www.drs.wa.gov.
At June 30, 2018 (the measurement date of the plans), the city’s proportionate share of the collective
net pension liabilities, as reported on Schedule 09, and the city’s proportionate share of the collective
net pension assets was as follows:
Allocation % Liability (Asset)
PERS 1 0.000000% $0.00
PERS 1 UAAL 0.040890% $1,826,161.30
PERS 2 / 3 0.052499% $896,373.70
$2,722,535.00
Allocation % Liability (Asset)
LEOFF 1 0.012124% -$220,111.46
LEOFF 2 0.039131% -$794,444.61
-$1,014,556.07
Total Net Pension Liability (Sch 09)
Net pension Assets
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LEOFF Plan 1
The city also participates in LEOFF Plan 1. The LEOFF Plan 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. Starting on July 1, 2000, employers and employees
contribute zero percent.
LEOFF Plan 2
The city also participates in the LEOFF Plan 2. 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 recommendation 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.
B. Firemen’s Pension Trust Fund/Plan
Plan Description. The City is the administrator of the Firemen’s Pension Fund/Plan which is closed,
single-employer, defined benefit pension plan that was established in conformance with the Revised
Code of Washington (RCW) Chapters 14.16, 14.18 and 41.20. The plan is limited to full-time and fully
compensated firefighters who were hired prior to the establishment of the Law Enforcement Officers’
and Fire Fighters’ Retirement System (LEOFF) on March 1, 1970.
Through the LEOFF Act, the State undertook to provide the bulk of police and fire pensions; however,
the municipalities continue to be responsible for all or part of pension benefits for employees hired
before March 1, 1970. Firefighters hired before, but not retired on March 1, 1970, received at
retirement the greater of the pension benefit provided under the old pension laws and under the LEOFF
Act. Any excess of the old benefit over the LEOFF benefit is provided by the City. The City also pays the
customary and reasonable cost of necessary medical expenses of the retiree for life.
Pre-LEOFF supplemental pension payments are based upon formulas using the City's current
compensation levels attached to the employee’s rank at retirement. In the event the pension paid by
the State falls short of what the retiree should receive based upon the formula, the City pays the
difference. Should the retiree receive more from the State than would result from the application of
the formula, no adjustments or paybacks are requested. The system/plan is shown as a trust fund in
the financial statement of the City.
As of December 31, 2018, membership consisted of three (3) pre-LEOFF firefighter retirees.
Funding Policy. Under the State law, the Firefighter’s Pension Plan is funded from regular property tax
levies at $0.225 per $1,000 assessed valuation, interest earnings, and City contributions required to
meet projected future pension obligations.
All costs associated with the pre-LEOFF firefighter retirees are accounted for in the Firemen’s Pension
Trust Fund.
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In 2018, the Firemen’s Pension Trust Fund received a total of $36,686 contributions as follows:
2018 __
Contributions:
Contribution from General Fund – Property Tax $ 34,235
Investment Interest 2,451
Total Funding $ 36,686
A formal actuarial valuation study has not been done in recent years; however, based on the
supplemental pension benefits paid over the last ten years coupled with consideration of the ages of
the remaining plan members, the estimated funding requirements for future supplemental pension
benefits as of December 31, 2018 is estimated at $9,958. This future pension obligation amount is not
reported on the Schedule 09, as the Firemen’s Pension Fund/Plan has net pension asset as illustrated
below.
The total cash and investment balance in the Firemen’s Pension Fund as of December 31, 2018 is
$246,381.
City of Port Townsend Firemen’s Pension Trust Fund Assets (Liabilities)
As of December 31, 2018
2018______
Total Fund Asset (Cash & Investments) $ 246,381
Less Estimated Future Supplemental Pension Obligations (9,958)
Net Fund Asset Available for Costs of Medical Benefits $ 236,423
NOTE 7 – RISK MANAGEMENT
The City of Port Townsend is a member of the Washington Cities Insurance Authority (WCIA). Utilizing
Chapter 48.62 RCW (self-insurance regulation) and Chapter 39.34 RCW (Interlocal Cooperation Act),
nine cities originally formed WCIA on January 1, 1981. WCIA was created to providing a pooling
mechanism for jointly purchasing insurance, jointly self-insuring, and / or jointly contracting for risk
management services. WCIA has a total of 160 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 $16 million in limits above
the self-insured layer is provided by reinsurance. Total limits are $20 million per occurrence subject to
aggregates and sub-limits. The Board of Directors determines the limits and terms of coverage
annually.
Insurance 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
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coverage is self-funded from the members’ deductible to $750,000, for all perils other than flood and
earthquake, and insured above that to $300 million per occurrence subject to aggregates and sub-
limits. 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 sub-limits.
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, and
administrative expenses. As outlined in the interlocal, WCIA r etains the right to additionally assess the
membership for any funding shortfall.
An investment committee, using investment brokers, produces additional revenue by investment of
WCIA’s assets in financial instruments which comply with all State guidelines.
A Board of Directors governs WCIA, which is comprised of one designated representative from each
member. The Board elects an Executive Committee and appoints a Treasurer to provide general policy
direction for the organization. The WCIA Executive Director reports to the Executive Committee and is
responsible for conducting the day to day operations of WCIA.
NOTE 8 – CONTINGENCIES AND LITIGATION
In the opinion of management, the City’s insurance program (see Note 7) and self-insurance fund (see
Note 10) are adequate to pay all known or pending claims.
NOTE 9 – INTERFUND LOANS
In 2017, the City Council authorized, through Resolution 17-053 on November 13, 2017, an interfund
loan from the Transmission Line Replacement Fund to the General Fund regarding resolution 17-019
on April 24, 2017 authorizing a loan from the City to Homeward Bound, a Washington non-profit
corporation for an affordable housing project. This interfund loan was repaid when the city issued
$834,000 in Limited General Obligation Bonds in 2018. The city signed a promissory note and security
agreement with Homeward Bound, CLT in 2018. The interfund loan payment to the Transmission Line
Fund was made on December 13, 2018 leaving a balance of zero for interfund loans as of 12/31/2018.
Loan Reference Borrowing Fund Lending Fund Balance 1/1/18
2018
Repayments New Loans
Balance
12/31/2018
Homeward Bound General Fund
Transmission
Line (417) $250,000 $250,000 $0 $0
TOTAL $250,000 $250,000 $0 $0
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NOTE 10 – SELF INSURANCE
The City of Port Townsend self-insures for unemployment through the State of Washington’s
Employment Security Department. When a former employee files for and obtains unemployment
coverage with the State of Washington, the City of Port Townsend is direct-billed their portion of the
unemployment benefit costs.
In 2013, the City of Port Townsend established an Unemployment Self Insurance Fund. As of December
31, 2018, the fund had a balance of $25,078 as compared to the prior year ending Fund balance of
$24,832.
NOTE 11 – MANAGEMENT FUNDS
To assist in managing the City of Port Townsend’s finances, the city has established management funds
for accounting purposes. The management fund activities are rolled into one fund for reporting
purposes.
The following funds include managerial fund activity that is reported in one fund:
x Water and Sewer Utility Fund
x Storm Utility Fund
x General Government Capital Improvement Project Fund
NOTE 12 – POST EMPLOYMENT BENEFITS
The City of Port Townsend has a commitment to pay for post-employment benefits for employees that
belong to LEOFF1 retirement system. These benefits include medical insurance premiums, out-of-
pocket medical costs, and dental and vision care. Six police retirees and three Fire/EMS retirees and/or
spouses received these benefits during the year and $51,801 was paid out for those benefits.
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NOTE 13 – CONSTRUCTION COMMITMENT
The City of Port Townsend has three active construction projects as of December 31, 2018. Total
construction commitment as of the end of the year totaled $750,210. A summary table of those
commitments is below:
NOTE 14 – HEALTH & WELFARE
The City of Port Townsend 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, 2018, 257
cities/towns/non-city entities participate in the AWC Trust HCP.
PROJECT CONTRACTOR PROJECT PHASE
CONTRACT
AMOUNT PAID TO DATE
REMAINING
CONTRACT
Rainier Regional Stormwater Facility AHBL Design 151,921 80,716 71,204
Rainier Regional Stormwater Facility Van Aller
Surveying Design 12,372 9,968 2,405
Outfall Replacement CH2MHill
Engineers Design 249,825 116,485 133,340
SR 20 Pedestrian Walkway PND ENG Design 90,000 58,604 31,396
Jefferson Street
Van Aller
Surveying Design 16,145 15,065 1,081
Jefferson Street
Krazan &
Associates Construction 3,221 384 2,838
Jefferson Street Seton Construction 419,730 173,121 246,609
Visitor Center SCJ Alliance Design 188,852 39,876 148,976
Mountain View
Rollunda
Architect Design 172,882 167,688 5,194
Mountain View
Olympic
Peninsula
Construction Construction 1,215,248 1,155,083 60,166
Library
Rollunda
Architect Design 110,203 96,779 13,424
Library
Interwest
Construction Construction 299,556 265,977 33,579
TOTAL $2,929,954 $2,179,744 $750,210
TABLE OF CONSTRUCTION COMMITMENTS - 2018
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The AWC Trust HCP allows members to establish a program of joint insurance and provides health and
welfare services to all participating members. The AWC Trust HCP pools 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 2018, the AWC Trust HCP purchased stop loss
insurance for Regence/Asuris plans at an Individual Stop Loss (ISL) of $1.5 million through Life Map, 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 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 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 HCP. Similarly, the terminating member forfeits all
rights and interest to the HCP Account.
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 Trust HCP are maintained in accordance with methods prescribed by the
State Auditor’s office under the authority of Chapter 43.09 RCW. The Trust HCP also follows applicable
accounting standards established by the Governmental Accounting Standards Board (“GASB”). In 2018,
the retiree medical plan subsidy was eliminated, and is noted as such in this report. 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.
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NOTE 15 – SUBSEQUENT EVENTS
On February 12, 2019, the voters of Port Townsend and those in the East Jefferson Fire Rescue district
approved the annexation of the City of Port Townsend into Fire Protection District No. 1, with voter
approval at 69.28% and 67.74%, respectively. Prior to annexation the City’s fire services were funded
through a Fire levy lid lift and a contribution of approximately $908,000 from the City’s General Fund.
The City also has an EMS Levy that has been in place since 2010 to fund emergency response and
transport services. With annexation and starting in 2019 for the 2020 tax year, the City will no longer
have either the separate Fire or EMS levy. The City retains its full General property tax authority.
The City Council has put in place a means to limit its authority to levy the full General levy property tax
for a period of five years. While the City Council cannot bind a future Council forever from doing its
duties, it can limit what a future Council can do for a limited period of time. In this case, the Council has
adopted an enforceable policy that limits the Council’s tax authority. Resolution 18-052 provides that
the City will not assess any of the $908,000 increase in 2020 (the first year it would go into effect if
annexation is approved). Thereafter starting in 2021 through 2024 the Council will have limited
authority as provided for by the policy. The policy requires that any amount of the $908,000 be phased
in at a rate not to exceed 33% per each year starting in 2021. Further, it restricts what the money can be
used for as outlined in the adopted policy.
The City’s policy also has a transparency provision that includes enhanced public notice and public
process. In addition to the regular public process for the annual property tax levy actions by the City
Council, the policy requires a separate public notice and process starting in June of preceding year for
the City Council to consider using any of the $908,000 starting in 2021 through 2022 (note there is no
levy allowed in 2020). Beginning in June of 2020, the City Manager is required to submit a proposal
regarding any decision to use any of the $908,000. This will include whether to levy nothing at all or any
portion thereof consistent with the annual policy limits. The City Manager shall also include the
proposed use of the taxes to City Council. It is up to the City Council to accept or modify the City
Manager’s proposal. The City Council prior to acting shall announce its intentions and provide an
enhanced public notice of its intent. Based upon the City Council’s findings, following public input, the
City Council will instruct the City Manager to include within the budget to be submitted for the following
year their recommendation as it relates to the $908,000. This can also include a recommendation to not
levy any of the $908,000.
NOTE 16 – OTHER FINANCIAL INFORMATION
The Fort Worden Public Development Authority (The Authority) was established by Ordinance 3108
enacted by the City on September 8, 2009. That Ordinance adopted the Authority’s Charter, granting
it the power to manage, promote, develop, secure funding, and enhance the Fort Worden State Park
including undertaking, assisting with, and otherwise facilitating the implementation of a Lifelong
Learning Center at the Park.
The Authority is a public corporation authorized under the provisions of RCW 35.21.735 – 35.21.759.
It is a separate legal entity that is independent from the City. RCW 35.21.750 provides that
“…liabilities incurred by such public corporation, commission, or authority shall be satisfied exclusively
from the assets and properties of such public corporation, commission, or authority and no creditor or
other person shall have any right of action against the city, town, or county creating such corporation,
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commission or authority on account of any debts, obligations, or liabilities of such public corporation,
commission, or authority.”
The Authority is governed by a Board of Directors. A nominating committee of the Authority solicits,
reviews and recommends Board Members. As the Chartering Agency, the City appoints Board
Members. The City Council also can remove Board members by resolution. The Authority maintains
independent financial reports. Financial reports are provided annually to the City Manager and City
Council and an independent audit is required annually.
In 2018, the City provided $25,000 of support to the Authority from the Lodging Tax Fund (approved
by the Lodging Tax Advisory Committee and the City Manager) to fund joint marketing of the Fort
Worden Lifelong Learning Center and the City of Port Townsend.
Page 69
ID. No.Description
Beginning
Balance Additions Reductions Ending BalanceDue Date
General Obligation Debt/Liabilities
251.11 2010 Bond 3,155,000 - 205,000 2,950,00012/1/2030
251.11 2012 Refunding Bond 2,680,000 - 505,000 2,175,00012/1/2025
251.22 2015 Bond 3,020,000 - 185,000 2,835,00012/1/2031
251.11 2017a Refunding Bond 9,155,000 -- 9,155,00012/1/2035
251.11 2017b Taxable Refunding Bond 1,060,000 -- 1,060,00012/1/2025
251.11 2018 Bond 834,000 --834,0005/22/2040
19,904,000 -895,000 19,009,000Total General Obligation Debt/Liabilities:
Revenue and Other (non G.O.) Debt/Liabilities
263.62 2019 BAN Line of Credit (Formerly
2014 BAN)
978,000 - 108,000 870,0006/1/2021
263.62 2016 Utility Line of Credit 1,862,500 - - 1,862,5003/1/2021
263.88 1999 PWTF Loan Sewer 59,594 - 59,594 -6/1/2019
263.88 2001 PWTF Loan Sewer 165,829 - 55,276 110,5536/1/2021
263.88 2002 PWTF Loan Water 266,807 - 66,702 200,1056/1/2022
263.82 2002 DOE Wastewater Loan 291,012 - 46,724 244,2889/8/2024
263.88 2012 PWTF Loan City Lake 684,210 - 52,632 631,5786/1/2031
263.82 2012 DWSRF LT2 2,782,025 - 154,557 2,627,46810/1/2036
263.88 2012 PWTF Loan LT2 1,454,978 - 111,921 1,343,0576/1/2031
263.88 2013 PWTF Loan UV Disinfection 3,450,499 - 246,464 3,204,0356/1/2032
263.88 2013 PWTF Loan 5MG Reservoir 1,050,875 - 75,062 975,8136/1/2032
263.82 2014 DWSRF Loan 5MG Reservoir 4,196,495 - 209,825 3,986,67010/1/2038
263.82 2015 DWSRF Loan LT2 3,360,411 - 176,864 3,183,54710/1/2037
263.82 2017 DOE Wastewater Loan 2,667 222,424 - 225,0917/31/2040
263.84 2015 CERB Loan 269,182 255,271 34,593 489,8607/31/2038
259.12 Compensated Absences 527,602 633,630 688,159 473,073
264.30 Net Pension Liability 2,722,535 783,363 1,459,535 2,046,363
264.40 OPEB Liability - 2,771,711 - 2,771,711
24,125,221 4,666,399 3,545,908 25,245,712Total Revenue and Other (non G.O.)
Debt/Liabilities:
44,254,7124,440,9084,666,39944,029,221Total Liabilities:
City of Port Townsend
Schedule of Liabilities
For the Year Ended December 31, 2019
Page 70
ID. No.Description
Beginning
Balance Additions Reductions Ending BalanceDue Date
General Obligation Debt/Liabilities
251.11 2010 Bond 3,355,000 - 200,000 3,155,00012/1/2030
251.11 2012 Refunding Bond 3,165,000 - 485,000 2,680,00012/1/2025
251.22 2015 Bond 3,205,000 - 185,000 3,020,00012/1/2031
251.11 2017a Refunding Bond 9,155,000 -- 9,155,00012/1/2035
251.11 2017b Taxable Refunding Bond 1,060,000 -- 1,060,00012/1/2025
251.11 2018 Bond - 834,000 -834,0005/22/2040
263.61 2014 BAN Line of Credit - 978,000 -978,0005/31/2019
19,940,000 1,812,000 870,000 20,882,000Total General Obligation Debt/Liabilities:
Revenue and Other (non G.O.) Debt/Liabilities
263.62 2016 Utility Line of Credit 1,700,000 762,500 600,000 1,862,5003/1/2021
252.11 1978 Water Revenue Bond 20,000 - 20,000 -3/1/2018
263.88 1998 PWTF Loan Water 44,718 - 44,718 -6/1/2018
263.88 1999 PWTF Loan Sewer 119,189 - 59,595 59,5946/1/2019
263.88 2001 PWTF Loan Sewer 221,105 - 55,276 165,8296/1/2021
263.88 2002 PWTF Loan Water 333,509 - 66,702 266,8076/1/2022
263.82 2002 DOE Wastewater Loan 337,127 - 46,115 291,0129/8/2024
263.88 2012 PWTF Loan City Lake 736,842 - 52,632 684,2106/1/2031
263.82 2012 DWSRF LT2 2,917,945 - 135,920 2,782,02510/1/2036
263.88 2012 PWTF Loan LT2 1,566,899 - 111,921 1,454,9786/1/2031
263.88 2013 PWTF Loan 5MG Reservoir 1,103,985 21,952 75,062 1,050,8756/1/2032
263.88 2013 PWTF Loan UV Disinfection 3,442,963 254,000 246,464 3,450,4996/1/2032
263.82 2014 DWSRF Loan 5MG Reservoir 5,588,889 (1,171,526) 220,868 4,196,49510/1/2037
263.82 2015 DWSRF Loan LT2 4,240,773 (703,498) 176,864 3,360,41110/1/2037
263.86 2017 DOE Wastewater Loan 2,100 567 -2,66712/31/2038
263.84 2015 CERB Loan - 269,182 -269,1827/31/2036
259.12 Compensated Absences 511,399 658,066 641,863 527,602
264.30 Net Pension Liability 3,678,861 746,263 1,702,589 2,722,535
26,566,304 837,506 4,256,589 23,147,221Total Revenue and Other (non G.O.)
Debt/Liabilities:
44,029,2215,126,5892,649,50646,506,304Total Liabilities:
City of Port Townsend
Schedule of Liabilities
For the Year Ended December 31, 2018
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Office of the Washington State Auditor sao.wa.gov
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